Enterprise Financial Services Corp. announced unaudited consolidated earnings results for the fourth quarter and full year ended December 31, 2017. For the quarter, the company reported net interest income of $47,404,000 against $35,454,000 a year ago. Income before income tax expense was $27,349,000 against $20,681,000 a year ago. Net income was $7,529,000 or $0.32 diluted per share against $13,628,000 or $0.67 diluted per share a year ago. Return on average assets was 0.57% against 1.36% a year ago. Return on average common equity was 5.37% against 14.04% a year ago. Return on average tangible common equity was 6.99% against 15.33% a year ago. Core net interest income was $44,901,000 against $32,175,000 a year ago. Core income before income tax expense was $24,687,000 against $17,966,000 a year ago. Core net income was $17,995,000 or $0.77 diluted per share against $11,945,000 or $0.59 diluted per share a year ago. Non-GAAP Return on average assets was 1.37% against 1.19% a year ago. Non-GAAP Return on average common equity was 12.84% against 12.31% a year ago. Non-GAAP Return on average tangible common equity was 16.71% against 13.44% a year ago. Total core revenue was $56,019,000 against $40,024,000 a year ago. Book value per common share was $23.76 against $19.31 a year ago. Tangible book value per common share was $18.20 against $17.69 a year ago. Earnings per share decreased 54% primarily from the aforementioned DTA revaluation. This decline was partially offset by seasonally strong sales of state tax credits in addition to continued earnings expansion due to organic growth.

For the year, the company reported net interest income of $177,304,000 against $135,495,000 a year ago. Income before income tax expense was $86,517,000 against $74,839,000 a year ago. Net income was $48,190,000 or $2.07 diluted per share against $48,837,000 or $2.41 diluted per share a year ago. Return on average assets was 0.97% against 1.29% a year ago. Return on average common equity was 9.05% against 13.14% a year ago. Return on average tangible common equity was 11.63% against 14.42% a year ago. Core net interest income was $169,586,000 against $123,515,000 a year ago. Core income before income tax expense was $85,240,000 against $62,534,000 a year ago. Core net income was $59,912,000 or $2.58 diluted per share against $41,237,000 or $2.03 diluted per share a year ago. Non-GAAP Return on average assets was 1.20% against 1.09% a year ago. Non-GAAP Return on average common equity was 11.26% against 11.10% a year ago. Non-GAAP Return on average tangible common equity was 14.46% against 12.18% a year ago. Total core revenue was $203,964,000 against $150,302,000 a year ago. The net income year over year increased from earnings of the acquisition of Jefferson County Bancshares Inc. ("JCB") and organic growth coupled with net interest margin expansion. Core net interest income growth of $46.1 million was due to approximately 11 months of net interest income from the acquisition of JCB, organic growth in portfolio loan balances funded principally by core deposits, and a 21 basis point expansion of core net interest margin. Reported earnings declined due to the DTA revaluation charge of $12.1 million, within income tax expense, due to U.S. corporate income tax reform.

The company generally expects interest rate increases to be able to offset the increase in deposit and liability costs. Given growth expectations, it expects to translate that to meaningful growth in core net interest income dollars. To that end, for 2018, it expects portfolio loan growth will be 7% to 9%. It expects the effective tax rate to be 17% to 19% in 2018. Thereafter, the effective tax rate will increase 2% to 3% on a quarterly basis, which is 19% to 21% each quarter.