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Prospectus
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Issuer:
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| | Enterprise Financial Services Corp, a Delaware corporation | |
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Securities Offered:
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depositary shares (or depositary shares if the underwriters exercise their option to purchase additional depositary shares in full), each representing a 1/40th ownership interest in a share of % fixed rate non-cumulative perpetual preferred stock, par value $.01 per share, or the Series A Preferred Stock, with a liquidation preference of $1,000 per share of Series A Preferred Stock (equivalent to $25.00 per depositary share) of the Company. Each holder of a depositary share will be entitled, through the depositary, in proportion to the applicable fraction of a share of Series A Preferred Stock represented by such depositary share, to all the rights and preferences of the Series A Preferred Stock represented thereby (including with respect to dividends, voting, redemption and liquidation rights).
We may from time to time elect to issue additional shares of the Series A Preferred Stock and related depositary shares, and all such additional shares of Series A Preferred Stock and the related depositary shares will form a single series with the Series A Preferred Stock and the related depositary shares, respectively, offered by this prospectus supplement, provided that such additional shares will only be issued if they are fungible with the original shares for United States federal income tax purposes.
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Underwriters’ Option to Purchase Additional Shares:
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| | We have granted the underwriters an option to purchase up to an additional depositary shares, within 30 days after the date of this prospectus supplement at the public offering price, less the applicable underwriting discount. | |
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Fixed Rate Dividends:
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| | We will pay dividends on the Series A Preferred Stock, only when, as and if declared by our board of directors or a duly authorized committee thereof, and to the extent that we have funds legally available for the payment of such dividends. Dividends will be payable from the date of issuance on the stated amount of $1,000 per share of the Series A Preferred Stock, or the stated amount (equivalent to $25.00 per depositary share) at a rate of % per annum, payable quarterly, in arrears, on each | |
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dividend payment date. See also “— Dividend Payment Dates” below. Upon payment of any dividends on the Series A Preferred Stock, the depositary will distribute to holders of depositary shares a proportionate payment.
Dividends on the Series A Preferred Stock are payable only when, as and if declared, and will not be cumulative or mandatory. If for any reason our board of directors or a duly authorized committee thereof does not declare a dividend on the Series A Preferred Stock in respect of a dividend period (as defined under “Description of the Series A Preferred Stock — Dividends”), then no dividend shall be deemed to have accrued for such dividend period, be payable on the applicable dividend payment date, or accumulate, and we will have no obligation to pay any dividend for that dividend period, whether or not our board of directors or a duly authorized committee thereof declares a dividend on the Series A Preferred Stock or any other class or series of our capital stock for any future dividend period.
While the Series A Preferred Stock is outstanding, unless dividends on all outstanding shares of Series A Preferred Stock for the most recently completed dividend period have been paid in full or declared and a sum sufficient for the payment thereof has been set aside for payment, acquisitions of, and dividends and distributions on, junior or parity stock, including our common stock, are permitted only under certain circumstances. See “Description of the Series A Preferred Stock — Dividends — Restrictions on Dividends, Redemption and Repurchases.”
Our ability to pay dividends on the Series A Preferred Stock depends on the ability of the Bank to pay dividends to us. The ability of the Company and the Bank to pay dividends in the future is subject to bank regulatory requirements, including capital regulations and policies established by the Federal Reserve, the FDIC and the Missouri Division of Finance, as applicable. Dividends on the Series A Preferred Stock will not be declared, paid or set aside for payment to the extent such act would cause us to fail to comply with applicable laws and regulations, including applicable Federal Reserve capital adequacy regulations and policies. See “Description of the Series A Preferred Stock — Dividends.”
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Dividend Payment Dates:
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| | Dividends on the Series A Preferred Stock will be payable when, as and if declared by our board of directors, or a duly authorized committee thereof, quarterly, in arrears, on , , and of each year, beginning on , | |
| | | | each referred to herein as a dividend payment date. If any date on which a dividend would otherwise be payable is not a business day, then the applicable dividend will be paid on the next business day without any adjustment to the amount of dividends paid. | |
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Redemption:
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The Series A Preferred Stock is perpetual and has no maturity date.
We may redeem the Series A Preferred Stock at our option, (i) in whole or in part, from time to time, on any dividend payment date on or after , or (ii) in whole, but not in part, at any time within 90 days following a regulatory capital treatment event (as defined under “Description of the Series A Preferred Stock — Redemption”), in each case at a redemption price equal to $1,000 per share (equivalent to $25.00 per depositary share), plus any declared and unpaid dividends, without regard to any undeclared dividends, to, but excluding, the redemption date. If we redeem the Series A Preferred Stock, the depositary will redeem a proportionate number of depositary shares. The Series A Preferred Stock will not be subject to any sinking fund or other obligation of the Company to redeem or repurchase the Series A Preferred Stock.
We must either replace the shares to be redeemed with an equal amount of instruments that qualify as common equity Tier 1 Capital or additional Tier 1 Capital, or demonstrate to the Federal Reserve that following such redemption we will continue to hold capital commensurate with our risk.
Holders of depositary shares should not expect that we will redeem any Series A Preferred Stock or related depositary shares.
Neither the holders of the Series A Preferred Stock nor holders of depositary shares will have any right to require the redemption or repurchase of the Series A Preferred Stock.
Any redemption of the Series A Preferred Stock is subject to our receipt of any required prior approval by the Federal Reserve and to the satisfaction of any conditions set forth in the capital adequacy rules of the Federal Reserve applicable to us and the redemption of the Series A Preferred Stock.
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Liquidation Rights:
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| | In the event we liquidate, dissolve or wind-up our business and affairs, either voluntarily or involuntarily, holders of the Series A Preferred Stock are entitled to receive an amount per share equal to the stated amount of $1,000 per share (equivalent to $25.00 per depositary share), plus any dividends that have been declared but not paid prior | |
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to the date of payment of distributions to stockholders, without regard to any undeclared dividends.
Distributions will be made only to the extent of our assets that are legally available for distribution to stockholders (i.e., after satisfaction of all our liabilities to creditors, if any), subject to the rights of holders of any securities ranking senior to the Series A Preferred Stock or pro rata as to the Series A Preferred Stock and any other shares of our stock ranking equally as to the distribution of our assets on our liquidation, dissolution or winding up, and before any distribution of assets is made to holders of our common stock or any other class or series of our stock that ranks junior to the Series A Preferred Stock as to the distribution of assets on our liquidation, dissolution or winding up.
Holders of the Series A Preferred Stock are subordinate to all of our indebtedness and to other non-equity claims on us and our assets, including in the event that we entered into a receivership, insolvency, liquidation or similar proceeding. In addition, holders of the Series A Preferred Stock may be fully subordinated to interests held by the U.S. government in the event that we enter into a receivership, insolvency, liquidation or similar proceeding.
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Voting Rights:
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| | None, except (i) with respect to authorizing, creating or increasing the authorized amount of stock ranking senior to the Series A Preferred Stock in the payment of dividends or in the distribution of assets on any liquidation, dissolution or winding up of the Company, (ii) with respect to certain material adverse changes in the terms of the Series A Preferred Stock, (iii) in the case of certain share exchanges, reclassifications, mergers and consolidations and other transactions, (iv) in the case of certain dividend non-payments or (v) as otherwise required by applicable law or Nasdaq. See “Description of the Series A Preferred Stock — Voting Rights” below. Holders of depositary shares must act through the depositary to exercise any voting rights, as described under “Description of the Depositary Shares — Voting of the Series A Preferred Stock” below. | |
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Ranking:
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With respect to the payment of dividends by, and distributions of assets upon any liquidation, dissolution or winding up of, the Company, shares of the Series A Preferred Stock will rank:
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senior to our common stock and any class or series of our stock that may be issued in the future that is not expressly stated to be on parity
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with or senior to the Series A Preferred Stock with respect to such dividend and distributions, which we refer to as junior stock;
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on parity with, or equally to, any class or series of our capital stock we have issued and may issue in the future that is expressly stated to be on parity with the Series A preferred stock with respect to such dividends and distributions, which we refer to as parity stock;
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junior to any class or series of our capital stock we may issue in the future that is expressly stated to be senior to the Series A preferred stock with respect to such dividends and distributions, if the issuance is approved by the holders of at least two-thirds of the outstanding shares of Series A preferred stock, which we refer to as senior stock; and
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junior to our secured and unsecured debt.
We will generally be able to pay dividends and distributions upon liquidation, dissolution or winding up of the Company only out of funds legally available for such payment (i.e., after satisfaction of all our liabilities to creditors, if any) and pro rata as to the Series A Preferred Stock and any other class or series of our stock that ranks on a parity with the Series A Preferred Stock in the payment of current dividends, referred to herein as the dividend parity stock, and distributions upon any liquidation, dissolution or winding up of the Company, as applicable.
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No Maturity:
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| | The Series A Preferred Stock does not have any maturity date, and we are not required to redeem the Series A Preferred Stock at any time. Accordingly, the Series A Preferred Stock will remain outstanding indefinitely, unless and until we decide to redeem it after receiving any required prior approval of the Federal Reserve. | |
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Preemptive and Conversion Rights:
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| | The holders of the depositary shares and the Series A Preferred Stock do not have any preemptive or conversion rights. | |
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Nasdaq Listing:
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| | We have applied to list the depositary shares on the Nasdaq under the symbol “EFSCP.” If the application is approved, trading of the depositary shares on the Nasdaq is expected to commence within 30 days after the initial delivery of the depositary shares. | |
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Tax Consequences:
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| | If you are a non-corporate United States holder (as defined below under “Material United States Federal Income Tax Consequences”), dividends paid to you will generally qualify for taxation at preferential rates if you meet certain holding period | |
| | | | and other applicable requirements. If you are a corporate United States holder, dividends receive by you will generally be eligible for the dividends-received deduction if you meet certain holding period and other applicable requirements. If you are a Non-United States holder (as defined below under “Material United States Federal Income Tax Consequences”, dividends paid to you generally are subject to United States federal withholding tax at a 30% rate or at a lower rate if you are eligible for the benefits of an income tax treaty that provides for a lower rate. For further discussion of the tax consequences relating to the Series A Preferred Stock and depositary shares, see “Material United States Federal Income Tax Consequences.” | |
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Use of Proceeds:
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| | We estimate that the net proceeds from this offering, after deducting underwriting discounts and estimated expenses, will be approximately $ million (or approximately $ million if the underwriters exercise in full their option to purchase additional shares), after deducting the underwriting discount and estimated offering expenses payable by us. We intend to use these proceeds for general corporate purposes, which may include repayment or redemption of outstanding indebtedness, the payment of dividends, providing capital to support our organic growth or growth through strategic acquisitions, capital expenditures, financing investments, repurchasing shares of our common stock, and for investments in the Bank as regulatory capital. See “Use of Proceeds” in this prospectus supplement. | |
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Depositary, Transfer Agent and Registrar:
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| | Computershare N.A. | |
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Risk Factors:
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| | An investment in the depositary shares representing interests in the Series A Preferred Stock involves risks. You should carefully consider the information contained under “Risk Factors” in this prospectus supplement beginning on page S-15 and the accompanying prospectus and under the “Risk Factors” section included as Item 1A. of Part I of our Annual Report and as Item 1A. of Part II in each subsequently filed Quarterly Report on Form 10-Q, as well as other information included or incorporated by reference into this prospectus supplement and the accompanying prospectus, including our financial statements and the notes thereto, before making an investment decision. | |
($ in thousands, except share and per share data)
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September 30, 2021
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As Further
Adjusted for this Offering |
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Cash and due from banks
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| | | $ | 1,389,287 | | | | | $ | | | |
Borrowings | | | | | | | | | | | | | |
Subordinated debentures and notes
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| | | | 204,103 | | | | | | 204,103 | | |
Federal Home Loan Bank advances
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| | | | 50,000 | | | | | | 50,000 | | |
Other borrowings
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| | | | 219,484 | | | | | | 219,484 | | |
Notes payable
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| | | | 24,286 | | | | | | 24,286 | | |
Total borrowings
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| | | $ | 497,873 | | | | | $ | | | |
Shareholders’ equity | | | | | | | | | | | | | |
Series A Preferred stock, $1,000 liquidation preference per share, $.01 par value; 5,000,000 shares authorized; no shares outstanding (actual); and shares outstanding (as adjusted)
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| | | | — | | | | | | | | |
Common stock, $.01 par value; 75,000,000 shares authorized; 40,352,097 shares issued
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| | | | 404 | | | | | | 404 | | |
Treasury stock, at cost; 1,980,093 shares
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| | | | (73,528) | | | | | | (73,528) | | |
Additional paid-in capital
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| | | | 1,031,146 | | | | | | 1,031,146 | | |
Retained earnings
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| | | | 461,711 | | | | | | 461,711 | | |
Accumulated other comprehensive income
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| | | | 19,902 | | | | | | 19,902 | | |
Total shareholders’ equity
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| | | $ | 1,439,635 | | | | | $ | | | |
Total debt and shareholders’ equity
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| | | $ | 1,937,508 | | | | | $ | | | |
Capital Ratios | | | | | | | | | | | | | |
Common equity tier 1 ratio
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| | | | 11.2% | | | | | | | | |
Tier 1 ratio
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| | | | 12.2% | | | | | | | | |
Total capital ratio
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| | | | 14.5% | | | | | | | | |
Leverage ratio
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| | | | 9.7% | | | | | | | | |
Underwriters
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Number of
Depositary Shares |
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Keefe, Bruyette & Woods, Inc.
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Raymond James & Associates, Inc.
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Boenning & Scattergood, Inc.
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Janney Montgomery Scott LLC
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Total
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Per Depositary
Share |
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No
Exercise |
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Full
Exercise |
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Public offering price
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| | | | % | | | | | $ | | | | | $ | | | ||
Underwriting discount
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| | | | % | | | | | $ | | | | | $ | | | ||
Proceeds, before expenses, to us
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| | | | % | | | | | $ | | | | | $ | | | |
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