Enterprise Financial Services Corp (NasdaqGS:EFSC) executed a letter of intent to acquire First Choice Bancorp (NasdaqCM:FCBP) for approximately $390 million on March 23, 2021. Enterprise Financial Services Corp entered into an agreement to acquire First Choice Bancorp on April 26, 2021. Under the terms of the transaction, First Choice will merge with and into Enterprise, with Enterprise continuing as the surviving entity to be immediately followed by the merger of First Choice Bank with and into Enterprise Bank & Trust, with Enterprise Bank & Trust as the surviving institution. Subject to the terms and conditions of the merger agreement, at the effective time of the merger, each share of First Choice common stock outstanding immediately prior to the effective time will be converted into the right to receive 0.6603 shares of Enterprise common stock, as well as cash in lieu of fractional shares of Enterprise common stock and pursuant to which EFSC will acquire, in an all-stock merger, FCBP. Each unvested option to acquire shares of First Choice common stock, or First Choice option, will vest or be forfeited, as the case may be, pursuant to the terms of the First Choice benefit plan and/or award agreement, and each vested and outstanding First Choice option granted under any First Choice benefit plan and/or award agreement will be canceled and extinguished and exchanged for the right to receive an amount of cash equal to the product of the aggregate number of shares of First Choice common stock issuable upon exercise of such First option and the excess, if any, of the product of the exchange ratio and the daily volume weighted average price of Enterprise's common stock for the 20 consecutive trading days ending on the trading day immediately preceding the closing date of the merger, over the per-share exercise price of such First Choice option. Subject to the terms and conditions of the merger agreement, at the effective time of the Merger, each award of First Choice restricted stock units and other stock-based awards granted by First Choice that is then unsettled or unvested will vest or be cancelled, as the case may be, pursuant to the terms of the applicable stock plan and/or award agreement. Existing Enterprise shareholders will own approximately 80% of the outstanding shares of the combined company and FCBP shareholders are expected to own approximately 20%. First Choice must pay Enterprise a termination fee of $16.8 million if the Merger Agreement is terminated under specified circumstances. In addition, if the Merger Agreement is terminated by either party as a result of the other party's breach of its representations or warranties, or material breach of its covenants set forth in the Merger Agreement and such breach would result in the closing conditions not being satisfied, then the non-terminating party will be required to pay the terminating party $1.5 million as liquidated damages.

Upon closing of the transaction, FCBP Founder and Chairman of the Board, Peter Hui, will join the Enterprise board of directors. The completion of the Merger is subject to various closing conditions, which include, approval of the Merger Agreement and the transactions contemplated by the Merger Agreement by First Choice's shareholders and Enterprise's shareholders, the receipt of all required regulatory approvals, the effective registration of the shares of Enterprise common stock to be issued to First Choice shareholders with the U.S. Securities and Exchange Commission and the approval of such shares for listing on the Nasdaq Global Select Market, the number of Dissenting Shares shall not exceed 10% of the number of shares of First Choice Common Stock issued and outstanding immediately prior to the closing date and the receipt by each party of an opinion from its counsel to the effect that the Merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended. Each of the board of directors of Enterprise, EB&T, First Choice and FCB unanimously approved the Merger Agreement. On June 4, 2021, registration statement on Form S-4 was declared effective. As of July 16, 2021, the transaction has received regulatory approval or received a regulatory waiver from the Federal Deposit Insurance Corporation and the Federal Reserve Bank of St. Louis, as applicable, and preliminary approval from the Missouri Division of Finance. The shareholder of First Choice Bancorp approved the transaction on July 19, 2021. The shareholder of Enterprise approved the transaction on July 20, 2021. The transaction is expected to close in the third quarter of 2021. The transaction is expected to be approximately 8% accretive to Enterprise's 2022 earnings per share (excluding the impact of one-time transaction expenses) after giving effect to estimated fully phased-in transaction synergies. The acquisition is expected to generate an internal rate of return of approximately 21% for Enterprise.

Boenning & Scattergood, Inc. served as financial advisor to EFSC and will receive a fee of $3.1 million and Paul J. Jaskot of Holland & Knight, LLP acted as legal advisor to Enterprise Financial Services Corp. Jeff Wishner and Ashwin Kakani of Keefe, Bruyette & Woods, A Stifel Company, served as financial advisors to First Choice Bancorp. Keefe, Bruyette & Woods, A Stifel Company fairness opinion provider to FCBP and S. Alan Rosen of Duane Morris LLP acted as legal advisor to First Choice Bancorp. Computershare Trust Company, NA acted as transfer agent to First Choice Bancorp and Enterprise in the transaction. Boenning & Scattergood acted as fairness opinion provider to Enterprise Financial Services and will receive a fee of $0.4 million. To assist in the solicitation of proxies, Enterprise and First Choice have each retained Innisfree M&A Incorporated, for fees of $18,000 plus reimbursement of out-of-pocket expenses for its services. First Choice agreed to pay Keefe, Bruyette & Woods a cash fee equal to 1.2% of the aggregate merger consideration, $0.4 million of which became payable to KBW with the rendering of KBW's opinion and the balance of which is contingent upon the closing of the merger.