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Enterprise Financial Services Receives Regulatory Approvals for Acquisition of First Choice Bancorp
Monday 19 July 2021

US-based Enterprise Financial Services Corp (NASDAQ: EFSC), the holding company of Enterprise Bank and Trust (EB and T), has received regulatory approval or received a regulatory waiver from the Federal Deposit Insurance Corp. and the Federal Reserve Bank of St. Louis, as applicable, and preliminary approval from the Missouri Division of Finance, for First Choice Bank to be merged into EB and T on the terms and subject to the conditions of the agreement and plan of merger, dated as of April 26, 2021, by and among EFSC, EB and T, First Choice Bancorp and First Choice Bank, the company said.

The consummation of the merger remains subject to the approval by FCBP's shareholders of the merger, the approval by EFSC's shareholders of the merger and the issuance of shares of EFSC's common stock to holders of FCBP common stock in connection with the merger, and the satisfaction of other closing conditions.

EFSC expects that the FCBP acquisition will close in 3Q21.

In April, Enterprise Financial Services and First Choice Bancorp (NASDAQ: FCBP), the holding company of First Choice Bank, entered into a definitive merger agreement pursuant to which EFSC will acquire FCBP in an all-stock merger, in a transaction valued at approximately USD 397.7m.

Under the terms of the merger agreement, FCBP will merge with and into EFSC, and First Choice will subsequently merge with and into EB and T (with Enterprise and EB and T as the surviving entities) in a transaction valued at USD 33.40 per FCBP share, based on the closing price of EFSC's common stock on April 23, 2021.

On a pro forma consolidated basis, the combined company would have approximately USD 12.7bn in consolidated total assets as of March 31, 2021.

The transaction is expected to be approximately 8% accretive to Enterprise's 2022 earnings per share after giving effect to estimated fully phased-in transaction synergies. Estimated tangible book value per share dilution to EFSC is expected to be earned back in less than three years.

The acquisition is expected to generate an internal rate of return of approximately 21% for Enterprise.

Headquartered in Cerritos, California, FCBP had approximately USD 2.5bn in total assets, USD 2.0bn in loans, and USD 1.9bn in deposits as of March 31, 2021.

First Choice is a community-based financial institution that serves primarily commercial and consumer clients in diverse communities and specialises in loans to small- to medium-sized businesses and private banking clients, commercial and industrial loans, and commercial real estate loans. First Choice is a Preferred Small Business Administration Lender.

First Choice conducts business through eight full-service branches and two loan production offices located in Los Angeles, Orange, and San Diego Counties.

Under and subject to the terms of the definitive agreement each holder of FCBP common stock will receive 0.6603 shares of EFSC common stock for each FCBP common share held and cash in lieu of fractional shares.

Existing Enterprise shareholders will own approximately 80% of the outstanding shares of the combined company, and FCBP shareholders are expected to own approximately 20%.

Boenning and Scattergood, Inc. served as financial advisor to EFSC and Holland and Knight LLP served as legal counsel. Keefe, Bruyette and Woods, A Stifel company, served as financial advisor to FCBP and Duane Morris LLP served as legal counsel.

Enterprise Financial Services Corp (NASDAQ: EFSC), with approximately USD 10.2bn in assets, is a financial holding company headquartered in Clayton, Missouri.

Enterprise Bank and Trust, a Missouri state-chartered trust company with banking powers and a wholly-owned subsidiary of EFSC, operates 39 branch offices in the US.

Enterprise Bank and Trust offers a range of business and personal banking services and wealth management services. Enterprise Trust, a division of Enterprise Bank and Trust, provides financial planning, estate planning, investment management and trust services to businesses, individuals, institutions, retirement plans and non-profit organisations.

First Choice Bancorp, headquartered in Cerritos, California, is the bank holding company for First Choice Bank. First Choice Bank is a community-based financial institution that serves primarily commercial and consumer clients in diverse communities and specialises in loans to small- to medium-sized businesses and private banking clients, commercial and industrial loans, and commercial real estate loans.
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Date Published: 19/07/2021

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