<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the quarterly period
ended March 31, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number ____________
____________
ENTERBANK HOLDINGS, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 43-1706259
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
150 NORTH MERAMEC, CLAYTON, MO 63105
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 314-725-5500
____________
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the Registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
------ ------
Indicate the number of shares outstanding of each of the registrant's
classes of common stock as of May 10, 2000:
Common Stock, $.01 par value 7,165,236 shares outstanding
as of May 10, 2000
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<PAGE> 2
ENTERBANK HOLDINGS, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited):
Consolidated Balance Sheets
At March 31, 2000 and December 31, 1999.....................................................1
Consolidated Statements of Income
Three Months Ended March 31, 2000 and 1999..................................................2
Consolidated Statements of Comprehensive Income
Three Months Ended March 31, 2000 and 1999..................................................3
Consolidated Statements of Cash Flows
Three Months Ended March 31, 2000 and 1999..................................................4
Notes to Consolidated Financial Statements..................................................5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations..............................................................7
Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk-
There have been no material changes from the information provided
in the December 31, 1999 Annual Report on Form 10-K
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K......................................................15
Signatures.....................................................................................16
</TABLE>
<PAGE> 3
PART I - ITEM 1
ENTERBANK HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (unaudited)
<TABLE>
<CAPTION>
At March 31, At December 31,
Assets 2000 1999
------------ ---------------
<C> <C>
Cash and due from banks $ 18,371,993 $ 14,798,216
Federal funds sold 44,725,000 54,825,000
Interest-bearing deposits 8,025 469
Investments in debt and equity securities:
Trading, at fair value - 910,000
Available for sale, at estimated fair value 33,047,600 23,807,572
Held to maturity, at amortized cost
(estimated fair value of $523,384 at March 31,
2000, and $676,851 at December 31, 1999) 526,752 679,806
------------ --------------
Total investments in debt and equity securities 33,574,352 25,397,378
------------ --------------
Loans held for sale 2,641,578 1,438,335
Loans, less unearned loan fees 394,711,848 385,101,759
Less allowance for loan losses 4,382,000 4,235,000
------------ --------------
Loans, net 390,329,848 380,866,759
------------ --------------
Other real estate owned 396,072 396,072
Office equipment and leasehold improvements 3,463,699 3,228,256
Accrued interest receivable 2,822,335 2,473,781
Investment in Enterprise Merchant Banc, LLC 643,247 572,009
Investment in Enterprise Fund, L.P. 564,726 546,710
Prepaid expenses and other assets 2,814,075 3,458,459
------------ --------------
Total assets $ 500,354,950 $ 488,001,444
============ ==============
Liabilities and Shareholders' Equity
Deposits:
Demand $ 64,099,423 $ 62,486,092
Interest-bearing transaction accounts 30,540,932 31,532,705
Money market accounts 212,248,708 197,935,760
Savings 1,958,529 2,736,638
Certificates of deposit:
$100,000 and over 69,670,020 67,031,719
Other 68,399,362 74,074,916
------------ --------------
Total deposits 446,916,974 435,797,830
Guaranteed preferred beneficial interests in
EBH-subordinated debentures 11,000,000 11,000,000
Federal Home Loan Bank advances 6,910,028 6,920,386
Accrued interest payable 949,098 962,205
Accounts payable and accrued expenses 975,480 557,338
------------ --------------
Total liabilities 466,751,580 455,237,759
------------ --------------
Shareholders' equity:
Common stock, $.01 par value; authorized
20,000,000 shares; issued and outstanding
7,163,952 shares at March 31, 2000 and
7,143,636 shares at December 31, 1999 71,630 71,436
Surplus 19,377,715 19,285,957
Retained earnings 14,234,161 13,476,400
------------ --------------
Accumulated other comprehensive income (loss) (80,136) (70,108)
------------ --------------
Total shareholders' equity 33,603,370 32,763,685
------------ --------------
Total liabilities and shareholders' equity $ 500,354,950 $ 488,001,444
------------ --------------
</TABLE>
- -----------------------------
See accompanying notes to consolidated financial statements.
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<PAGE> 4
ENTERBANK HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Income (unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
2000 1999
---------- ----------
Interest income:
<C> <C>
Interest and fees on loans $ 8,956,835 $ 6,335,238
Interest on debt securities:
Taxable 418,801 321,851
Nontaxable 6,377 6,669
Interest on federal funds sold 684,570 277,920
Interest on interest earning deposits 152 177
---------- ----------
Total interest income 10,066,735 6,941,855
---------- ----------
Interest expense:
Interest-bearing transaction accounts 121,252 111,931
Money market accounts 2,511,885 1,704,840
Savings 10,950 9,470
Certificates of deposit:
$100,000 and over 1,008,936 652,083
Other 990,534 640,190
Federal funds purchased 1,667 --
Guaranteed preferred debenture expense 265,873 --
Federal Home Loan Bank advances 84,999 75,027
---------- ----------
Total interest expense 4,996,096 3,193,541
---------- ----------
Net interest income 5,070,639 3,748,314
Provision for loan losses 145,436 80,000
---------- ----------
Net interest income after
provision for loan losses 4,925,203 3,668,314
---------- ----------
Noninterest income:
Service charges on deposit accounts 173,149 130,655
Financial advisory income 97,308 --
Gain on sale of trading security 500 --
Other service charges and fee income 37,970 78,953
Gain on sale of mortgage loans 80,767 335,424
Income from investment in Enterprise Merchant Banc, LLC 30,112 --
Gain on investment in Enterprise Fund, L.P. 18,015 6,806
---------- ----------
Total noninterest income 437,821 551,838
---------- ----------
Noninterest expense:
Salaries 1,936,401 1,558,556
Payroll taxes and employee benefits 411,999 325,986
Occupancy 277,486 228,410
Furniture and equipment 119,591 100,524
Data processing 125,137 109,930
Other 1,115,897 752,288
---------- ----------
Total noninterest expense 3,986,511 3,075,694
---------- ----------
Income before income tax expense 1,376,513 1,144,458
Income tax expense 529,350 406,675
---------- ----------
Net income $ 847,163 $ 737,783
========== ==========
Per share amounts
Basic earnings per share $ 0.12 $ 0.10
Basic weighted average common shares and
common stock equivalents outstanding 7,152,241 7,122,312
Diluted earnings per share $ 0.11 $ 0.10
Diluted weighted average common shares and common
stock equivalents 7,773,274 7,611,268
</TABLE>
- -----------------------
See accompanying notes to consolidated financial statements.
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<PAGE> 5
ENTERBANK HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income (unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
2000 1999
------------- ------------
<S> <C> <C>
Net income $ 847,163 $ 737,783
------------- ------------
Other comprehensive income (loss), before tax:
Unrealized losses on securities:
Unrealized losses arising during period (15,194) (29,408)
------------- ------------
Other comprehensive income (loss), before tax (15,194) (29,408)
Income tax benefit related to items of
other comprehensive income 5,166 9,999
------------- ------------
Other comprehensive income (loss), net of tax (10,028) (19,409)
------------- ------------
Comprehensive income $ 837,135 $ 718,374
============= ============
</TABLE>
- -----------------------
See accompanying notes to consolidated financial statements.
3
<PAGE> 6
ENTERBANK HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
2000 1999
-------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 847,163 $ 737,783
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 174,616 148,726
Provision for loan losses 145,436 80,000
Gain on sale of trading security (500) --
Net accretion of debt and equity securities (29,526) (159,296)
Gain on investment in Enterprise Fund, L.P. (18,015) (6,808)
Mortgage loans originated (7,700,668) (20,888,068)
Proceeds from mortgage loans sold 6,578,192 26,525,466
Gain on sale of mortgage loans (80,767) (335,424)
Increase in accrued interest receivable (348,554) (272,518)
(Decrease) increase in accrued interest payable (13,107) 317,246
Other, net 1,062,524 (379,322)
------------- -------------
Net cash provided by operating activities 616,794 5,767,785
------------- -------------
Cash flows from investing activities:
(Purchases of) proceeds from interest-bearing deposits (7,556) 2,347
Purchases of available-for-sale debt securities (8,885,276) (7,439,465)
Purchases of available-for-sale equity securities (332,200) --
Proceeds from maturities of available-for-sale debt securities -- 34,000,000
Proceeds from maturities and principal paydown on
held-to-maturity debt securities 150,000 103,000
Proceeds from sale of trading security 910,500 --
Net increase in loans (9,608,525) (24,918,712)
Purchases of office equipment and leasehold improvements (410,059) (104,717)
Investment in Enterprise Merchant Banc, LLC (71,238) --
------------- -------------
Net cash (used in) provided by investing activities (18,254,354) 1,642,453
------------- -------------
Cash flows from financing activities:
Net increase in demand and savings accounts 14,156,397 16,019,086
Net decrease in certificates of deposit (3,037,253) (7,879,321)
Proceeds from Federal Home Loan Bank advances - 500,000
Principal payments on Federal Home Loan Bank advances (10,358) (1,776)
Cash dividends paid (89,401) (71,360)
Proceeds from the exercise of common stock options 91,952 54,799
------------- -------------
Net cash provided by financing activities 11,111,337 8,621,428
------------- -------------
Net (decrease) increase in cash and due from banks (6,526,223) 16,031,666
Cash and cash equivalents, beginning of period 69,623,216 43,951,018
------------- -------------
Cash and cash equivalents, end of period $ 63,096,993 $ 59,982,684
============= =============
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 5,009,203 $ 3,367,843
Income taxes 1,172,000 527,309
============= =============
</TABLE>
- -----------------------------
See accompanying notes to consolidated financial statements.
4
<PAGE> 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
ENTERBANK HOLDINGS, INC. AND SUBSIDIARIES
(1) BASIS OF PRESENTATION
The accompanying consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01
of Regulation S-X. They do not include all information and footnotes
required by generally accepted accounting principles for complete
consolidated financial statements. The accompanying consolidated financial
statements of Enterbank Holdings, Inc. and subsidiaries (the "Company" or
"Enterbank") are unaudited and should be read in conjunction with the
consolidated financial statements and notes thereto contained in the
Company's Annual Report on Form 10-K for the year ended December 31, 1999.
In the opinion of management, all adjustments consisting of normal
recurring accruals considered necessary for a fair presentation of the
results of operations for the interim periods presented herein have been
included. Operating results for the three month period ended March 31, 2000
are not necessarily indicative of the results that may be expected for any
other interim period or for the year ending December 31, 2000. The
consolidated financial statements include the accounts of Enterbank
Holdings, Inc. and its subsidiaries. All significant intercompany accounts
and transactions have been eliminated.
Certain amounts in the consolidated financial statements for the year ended
December 31, 1999 have been reclassified to conform to the 2000
presentation. Such reclassifications had no effect on previously reported
consolidated net income or shareholders' equity.
(2) MERGER AGREEMENT
On January 5, 2000 the Company announced that it signed a Merger Agreement
with Commercial Guaranty Bancshares, Inc. ("CGB"), the bank holding company
for First Commercial Bank, N.A. headquartered in Overland Park, Kansas. On
March 22, 2000 the Company formed Enterbank Acquisition Corp. I
("Acquisition Corp") as a wholly owned subsidiary of Enterbank Holdings,
Inc. Acquisition Corp. was formed for the sole purpose of facilitating the
pending merger transaction between the Company and Commercial Guaranty
Bancshares, Inc. Acquisition Corp is a Kansas Corporation with 100 shares
of common stock, par value $0.01, all of which are issued to Enterbank
Holdings, Inc. In the merger, Acquisition Corp will be merged into CGB and
CGB will become a wholly owned subsidiary of Enterbank. As a result of the
merger, each share of CGB common stock outstanding at the effective time of
the merger, other than shares with respect to which dissenters' rights are
perfected, will be converted into 2.1429 shares of Enterbank common stock.
The merger is intended to be a tax-free reorganization for federal income
tax purposes and will be accounted for as a pooling of interests. The
merger is subject to the approval of the shareholders of both companies and
regulatory approval, and is expected to be completed sometime in the middle
of 2000. More information is contained in the Merger Agreement on file with
the Securities and Exchange Commission as an exhibit to Enterbank's Annual
Report on Form 10-K for the year ended December 31, 1999.
(3) DEFERRED COMPENSATION PLAN
On December 20, 1999 the Company adopted the Enterbank Holdings, Inc.
Deferred Compensation Plan I ("the Plan"). The Plan was established to
provide deferred compensation benefits to selected executives of the
Company, under the meaning of ERISA, in addition to other employee benefits
programs offered by the Company. The Plan is intended to be a "top-hat",
unfunded plan which will assist the participants in retirement planning and
planning for their longer-term financial needs. The plan year began on
January 1, 2000 and all deferral elections were made in advance.
5
<PAGE> 8
(4) SEGMENT DISCLOSURE
Management of the Company reviews the financial performance of its operation
segments on an after-tax basis. The Company's four major operating segments in
2000 and 1999 include Enterbank Holdings, Inc., Enterprise Bank, Enterprise
Financial Advisors and Enterprise Merchant Banc, Inc. Enterbank Holdings
includes general corporate expenses not allocated to the operating segments as
well as assets and income related to EBH Trust. Enterprise Bank provides a full
range of commercial banking services. These services include but are not limited
to loans, demand and interest earning accounts, safe deposit boxes, lock boxes
and cash management services. Enterprise Financial Advisors, a division of
Enterprise Bank, offers financial planning and trust services.
Enterprise Merchant Banc offers merchant banking and venture capital services.
The following are the financial results for the Company's operating segments for
the three-month periods ended March 31, 2000 and 1999:
<TABLE>
<CAPTION>
Enterprise
Enterbank Financial Enterprise
Holdings Enterprise Bank Advisors Merchant Banc Eliminations Consolidated
-------------------------------------------------------------------------------------------
Three months ended March 31, 2000
<S> <C> <C> <C> <C> <C> <C>
Interest income $ 9,505 $ 10,066,735 $ - $ - $ (9,505) $ 10,066,735
Interest expense 275,378 4,730,223 - - (9,505) 4,996,096
Net interest margin (265,873) 5,336,512 - - - 5,070,639
Provision for loan losses - 145,436 - 145,436
Gross income prior to direct
expense 18,515 241,461 171,143 36,708 - 467,827
Direct expense - - 30,006 - - 30,006
Noninterest income 18,515 241,461 141,137 36,708 - 437,821
Noninterest expense 360,124 3,243,935 382,445 7 - 3,986,511
------------- ------------ ------------- ----------- ------------ ------------
Income (loss) before income
tax expense (benefit) (607,482) 2,188,602 (241,308) 36,701 - 1,376,513
Income tax expense (benefit) (207,167) 826,828 (104,456) 14,145 - 529,350
------------- ------------ ------------- ----------- ------------ ------------
Net income (loss) $ (400,315) $ 1,361,774 $ (136,852) $ 22,556 $ - $ 847,163
============= ============ ============= =========== ============ ============
Total assets $ 6,068,784 $497,829,888 $ 65,521 $ 1,016,671 $ (4,625,914) $500,354,950
------------- ------------ ------------- ----------- ------------ ------------
</TABLE>
<TABLE>
<CAPTION>
Three months ended March 31, 1999
<S> <C> <C> <C> <C> <C> <C>
Interest income $ - $ 6,941,855 $ - $ 10 $ (10) $ 6,941,855
Interest expense - 3,193,551 - - (10) 3,193,541
Net interest margin - 3,748,304 - 10 - 3,748,314
Provision for loan losses - 80,000 - - - 80,000
Gross income prior to direct 726 484,466 26,570 52,081 - 563,843
Direct expense - - 12,005 - - 12,005
Noninterest income 726 484,466 14,565 52,081 - 551,838
Noninterest expense 180,556 2,504,713 219,140 171,285 - 3,075,694
------------- ------------ ------------ ----------- ------------ ------------
Income (loss) before income
tax expense (benefit) (179,830) 1,648,057 (204,575) (119,194) - 1,144,458
Income tax expense (benefit) (47,739) 580,691 (78,184) (48,093) - 406,675
------------- ------------ ------------ ----------- ------------ ------------
Net income (loss) $ (132,091) $ 1,067,366 $ (126,391) $ (71,101) $ - $ 737,783
============= ============ ============ =========== ============ ============
Total assets $ 1,006,014 $383,475,768 $ 28,918 $ 548,778 $ (108,511) $384,950,967
------------- ------------ ------------ ----------- ------------ ------------
</TABLE>
As demonstrated in the table, Enterprise Bank ("the Bank") is the primary source
of income and assets for the Company. The Bank contributed $114 million in
assets at March 31, 2000 over assets at March 31, 1999. Most of the asset growth
experienced by the Company is attributable to the Bank. The Bank also provides
much of the income to the Company. The Bank experienced a 28% increase in net
income during the three-month period ended March 31, 2000 compared to the same
period in 1999. The Company experienced a 15% increase in net income for the
same period. Enterprise Financial Advisors began operations during the second
half of 1998 and is experiencing net losses primarily because it is currently in
early stages of growth. During 1999 and 2000, Enterprise Merchant Banc raised
capital for a second
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<PAGE> 9
equity fund and completed a restructuring, which resulted in a net operating
profit for the first quarter of 2000. Enterbank Holdings has some assets in the
form of small investments. Enterbank Holdings also has interest expense related
to its Trust Preferred Securities and noninterest expenses related to
consolidated items of the Company.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Readers should note that in addition to the historical information contained
herein, this Form 10-Q contains forward looking statements which are inherently
subject to risks and uncertainties that could cause actual results to differ
materially from those contemplated by such statements. Factors that could cause
or contribute to such differences include, but are not limited to, the effect
that changes in interest rates and our cost of funds have on our earnings and
assets, our level of loan defaults and delinquencies, our ability to
successfully grow and realize profits from our commercial banking operations and
our strategic non-banking lines of business, concentrations of our loans in one
geographic area, our ability to retain key personnel, the degree and nature of
our competition, and changes in government regulation of our business, as well
as those discussed in the Company's Annual Report on Form 10-K for the year
ended December 31, 1999.
INTRODUCTION
The discussion summarizes the significant factors affecting the consolidated
financial condition, results of operations, liquidity and cash flows of the
Company for the three months ended March 31, 2000 compared to the three months
ended March 31, 1999 and the year ended December 31, 1999. This discussion
should be read in conjunction with the consolidated financial statements and
notes thereto contained in the Company's Annual Report on Form 10-K for the year
ended December 31, 1999.
FINANCIAL CONDITION
Total assets at March 31, 2000 were $500 million, an increase of $12 million, or
3%, over total assets of $488 million at December 31, 1999. Loans less unearned
loan fees, were $395 million, an increase of $10 million, or 3%, over total
loans and leases of $385 million at December 31, 1999. Federal funds sold and
investment securities were $78 million, a decrease of $2 million, or 2%, from
total Federal funds sold and investment securities of $80 million at December
31, 1999. The decrease resulted from the shift in earnings assets from
short-term investments into loans during the first three months of 2000.
Total deposits at March 31, 2000 were $447 million, an increase of $11 million
over total deposits of $436 million at December 31, 1999.
Total shareholders' equity at March 31, 2000 was $33.6 million, an increase of
$840,000 over total shareholders' equity of $32.8 million at December 31, 1999.
The increase in equity is due to net income of $847,163 for the three months
ended March 31, 2000, and the exercise of incentive stock options by employees,
less dividends paid to shareholders.
RESULTS OF OPERATIONS
Net income was $847,163 for the three month period ended March 31, 2000, an
increase of 15% over net income of $737,783 for the same period in fiscal 1999.
Basic earnings per share for the three month periods ended March 31, 2000 and
1999 were $0.12 and $0.10, respectively. Diluted earnings per share for the
three-month periods ended March 31, 2000 and 1999 were $0.11 and $0.10,
respectively.
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<PAGE> 10
NET INTEREST INCOME
Net interest income (presented on a tax equivalent basis) was $5.1 million, or
4.36% of average earnings assets, for the three months ended March 31, 2000,
compared to $3.8 million, or 4.45% of average earning assets, for the same
period in 1999. The $1.3 million, or 35% increase, in net interest income for
the three months ended March 31, 2000 resulted primarily from a $125 million
increase in average earnings assets to $470 million, from $345 million during
the same period in 1999. The increase in earning assets is attributable to the
continued calling efforts of the Company's relationship officers and sustained
economic growth in the local market served by the Company. The yield on average
earning assets increased to 8.63% for the three month period ended March 31,
2000 compared to 8.20% for the three month period ended March 31, 1999. The
increase in asset yield was primarily due to five 0.25% increases, for a total
of a 1.25% increase in the prime rate since July of 1999 and a general increase
in average yield on loans. The increase in asset yield was also attributed to a
change in the mix of assets from noninterest earning assets to interest earning
assets. Interest earning assets increased to 95.51% of total assets for the
three months ended March 31, 2000 from 92.48% for the same period in 1999. Most
of the increase occurred in federal funds sold. The increase in net interest
margin was offset by a $107 million increase in average interest-bearing
liabilities to $397 million for the three months ended March 31, 2000 from $290
million during the same period in 1999. The yield on interest-bearing
liabilities increased to 5.05% for the three months ended March 31, 2000
compared to 4.47% for the same period in 1999. This increase is attributed to
the above mentioned increases in the prime rate and the addition of $11 million
in guaranteed preferred beneficial interests in EBH-subordinated debentures. The
increase in the interest paid on interest bearing liabilities was also
attributed to a change in the mix of liabilities. Total interest-bearing
liabilities increased to 80.72% of total average assets for the three months
ended March 31, 2000 from 77.74% for the same period in 1999. This increase is
attributed to the above mentioned guaranteed preferred beneficial interests in
EBH-subordinated debentures and an increase in certificates of deposit.
8
<PAGE> 11
The following table sets forth, on a tax-equivalent basis, certain information
relating to the Company's average balance sheet and reflects the average yield
earned on interest-earning assets, the average cost of interest-bearing
liabilities and the resulting net interest income for the three month periods
ended March 31, 2000 and 1999:
<TABLE>
<CAPTION>
Three months ended March 31,
--------------------------------------------------------------------------------------------
2000 1999
--------------------------------------------------------------------------------------------
Percent Interest Average Percent Interest Average
Average of Total Income/ Yield/ Average of Total Income/ Yield/
Balance Assets Expense Rate Balance Assets Expense Rate
-------- --------- ---------- ------- --------- -------- -------- -------
ASSETS (Dollars in Thousands)
Interest-earning assets:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Loans (1) $391,379 79.57% $ 8,993 9.22% $ 295,261 79.25% $ 6,360 8.74%
Taxable investments in debt
securities 28,786 5.85 419 5.84 24,451 6.56 322 5.34
Non-taxable investments in debt
securities (2) 604 0.12 10 6.64 632 0.18 10 6.42
Federal funds sold 49,072 9.97 685 5.60 24,184 6.49 278 4.66
Interest earning deposits 14 0.00 0 4.29 17 0.00 0 4.27
-------- -------- --------- --------- ------- --------
Total interest-earning assets 469,855 95.51 10,107 8.63 344,545 92.48 6,970 8.20
Non-interest-earning assets:
Cash and due from banks 15,854 3.23 23,054 6.19
Office equipment and leasehold
improvements 3,426 0.70 3,052 0.82
Investment in EMB, LLC 304 0.06
Prepaid expenses and other assets 6,714 1.37 5,150 1.38
Allowance for loan losses (4,285) (0.87) (3,238) (0.87)
-------- -------- --------- -------
Total assets $491,868 100.00% $ 372,563 100.00%
======== ======== ========= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing transaction
accounts $ 28,453 5.78% $ 121 1.71% $ 24,972 6.70% $ 112 1.82%
Money market accounts 207,806 42.24 2,512 4.85 158,787 42.62 1,705 4.35
Savings 1,788 0.36 11 2.47 1,554 0.42 9 2.47
Certificates of deposit 140,896 28.65 1,999 5.69 97,994 26.30 1,292 5.35
Federal funds purchased 110 0.02 2 6.08 -- -- -- --
Federal Home Loan Bank advances 7,026 1.43 85 4.85 6,328 1.70 75 4.81
Guaranteed preferred beneficial
interests in EBH-subordinated
debentures 11,000 2.24 266 9.69 -- -- -- --
-------- -------- --------- --------- ------- --------
Total interest-bearing liabilities 397,079 80.72 4,996 5.05 289,635 77.74 3,193 4.47
Noninterest-bearing liabilities:
Demand deposits 59,500 12.10 52,086 13.98
Other liabilities 1,950 0.40 1,166 0.31
-------- -------- --------- -------
Total liabilities 458,529 93.22 342,887 92.03
Shareholders' equity 33,339 6.78 29,676 7.97
-------- -------- --------- -------
Total liabilities and
shareholders' equity $491,868 100.00% $ 372,563 100.00%
======== ======== ========= =======
Net interest income $ 5,111 $ 3,777
========= ========
Net interest margin 4.36% 4.45%
</TABLE>
(1) Average balances include non-accrual loans. The income on such loans is
included in interest but is recognized only upon receipt.
Loan fees included in interest income are approximately $272,000 and
$250,000, for 2000 and 1999, respectively.
(2) Non-taxable investment income is presented on a fully tax-equivalent basis
assuming a tax rate of 34%.
9
<PAGE> 12
PROVISION FOR LOAN LOSSES
The provision for loan losses was $145,000 for the three months ended March 31,
2000, compared to $80,000 for the same period in 1999. The Company's asset
quality remained strong with net recoveries of $2,000 for the three months ended
March 31, 2000 compared to net recoveries of $1,000 for the same period in 1999.
Loan growth remained strong during the first three months of 2000. The Company
increased its allowance for loan losses by charging provision expense $145,000.
The increase in provision expense in the first quarter of 2000 as compared to
the same period in 1999 was made due to the continued increase in loans
outstanding.
The following table summarizes changes in the allowance for loan losses arising
from loans charged off and recoveries on loans previously charged off by loan
category and additions to the allowance that have been charged to expense.
<TABLE>
<CAPTION>
Three months ended
March 31,
-------------------------------
2000 1999
---- ----
(Dollars in Thousands)
<S> <C> <C>
Allowance at beginning of year $ 4,235 $ 3,200
----------- ------------
Loans charged off:
Commercial and industrial -- --
Real estate:
Commercial -- --
Construction -- --
Residential -- --
Consumer and other -- --
----------- ------------
Total loans charged off -- --
----------- ------------
Recoveries of loans previously charged off:
Commercial and industrial -- --
Real estate:
Commercial -- --
Construction -- --
Residential -- 1
Consumer and other 2 --
----------- ------------
Total recoveries of loans previously charged off 2 1
----------- ------------
Net loans (recovered) charged off (2) (1)
----------- ------------
Provisions charged to operations 145 80
----------- ------------
Allowance at end of period $ 4,382 $ 3,281
=========== ============
Average loans $ 391,379 $ 295,261
Total loans $ 394,712 $ 298,737
Nonperforming loans $ -- $ 29
Net charge-offs to average loans 0.00% 0.00%
Allowance for loan losses to loans 1.11% 1.10%
</TABLE>
10
<PAGE> 13
The Company's credit management policy and procedures focus on identifying,
measuring and controlling credit exposure. These procedures employ a
lender-initiated system of rating credits, which is ratified in the loan
approval process and subsequently tested in internal loan reviews, external
audits and regulatory bank examinations. The system requires rating all loans at
the time they are made.
Adversely rated credits, including loans requiring close monitoring which would
not normally be considered criticized credits by regulators, are included on a
monthly loan watch list. Loans may be added to the watch list for reasons which
are temporary and correctable, such as the absence of current financial
statements of the borrower or a deficiency in loan documentation. Other loans
are added whenever any adverse circumstance is detected which might affect the
borrower's ability to meet the terms of the loan. This could be initiated by the
delinquency of a scheduled loan payment, a deterioration in the borrower's
financial condition identified in a review of periodic financial statements, a
decrease in the value of the collateral securing the loan, or a change in the
economic environment in which the borrower operates. Loans on the watch list
require detailed loan status reports prepared by the responsible officer every
four months, which are then discussed in formal meetings with the loan review
and loan administration staffs. Downgrades of loan risk ratings may be initiated
by the responsible loan officer at any time. However, upgrades of risk ratings
may only be made with the concurrence of the loan review and credit
administration staffs generally at the time of the formal watch list review
meetings.
Each month, loan administration provides management with a detailed list of
loans on the watch list and summaries of the entire loan portfolio categorized
by risk rating. These are coupled with an analysis of changes in the risk
profiles of the portfolios, changes in past due and non-performing loans and
changes in watch list and classified loans over time. In this manner, the
overall increases or decreases in the levels of risk in the portfolios are
monitored continually. Factors are applied to the loan portfolios for each
category of loan risk to determine acceptable levels of allowance for loan
losses. These factors are derived primarily from the actual loss experience and
from published national surveys of norms in the industry. The calculated
allowances required for the portfolios are then compared to the actual allowance
balances to determine the provisions necessary to maintain the allowances at
appropriate levels. In addition, management exercises judgment in its analysis
of determining the overall level of the allowance for loan losses. In its
analysis, management considers the change in the portfolio, including growth and
composition, and the economic conditions of the region in which the Company
operates. Based on this quantitative and qualitative analysis, the allowance for
loan losses is adjusted. Such adjustments are reflected in the consolidated
statements of income.
The Company does not engage in foreign lending. Additionally, the Company does
not have any concentrations of loans exceeding 10% of total loans which are not
otherwise disclosed in the loan portfolio composition table. The Company does
not have a material amount of interest-bearing assets which would have been
included in non-accrual, past due or restructured loans if such assets were
loans.
Management believes the allowance for loan losses is adequate to absorb losses
in the loan portfolio. While management uses available information to recognize
loan losses, future additions to the allowance may be necessary based on changes
in economic conditions. In addition, various regulatory agencies, as an integral
part of their examination process, periodically review the allowance for loan
losses. Such agencies may require the Company to increase the allowance for loan
losses based on their judgments and interpretations about information available
to them at the time of their examinations.
While the Company has benefited from very low historical net charge-offs during
an extended period of rapid loan growth, management remains cognizant that
historical loan loss and non-performing asset experience may not be indicative
of future results. Were the experience to deteriorate, and additional provisions
for loan losses were required, future operational results would be negatively
impacted. Both management and the Board of Directors continually monitor changes
in asset quality, market conditions, concentration of credit and other factors,
all of which impact the credit risk associated with the Company's loan
portfolio.
11
<PAGE> 14
The following table sets forth information concerning the Company's
non-performing assets as of the dates indicated:
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
-------------- ----------------
(Dollars in Thousands)
<S> <C> <C>
Non-accrual loans $ -- $ 294
Loans past due 90 days or more
and still accruing interest -- --
Restructured loans -- --
-------------- ----------------
Total nonperforming loans 294
Foreclosed property 396 396
-------------- ----------------
Total non-performing assets $ 396 $ 690
============== ================
Total assets $ 500,355 $ 488,001
Total loans $ 394,712 $ 385,102
Total loans plus foreclosed property $ 395,108 $ 385,498
Nonperforming loans to loans 0.00% 0.08%
Nonperforming assets to loans plus
foreclosed property 0.10% 0.18%
Nonperforming assets to total assets 0.08% 0.14%
</TABLE>
NONINTEREST INCOME
Noninterest income was $437,821 for the three months ended March 31, 2000,
compared to $551,838 for the same period in 1999. The decrease is primarily
attributed to a $254,657 decrease in the gain on the sale of mortgage loans. The
decrease in the gain on sale of mortgage loans was due to an increase in
interest rates since July 1999. Over half of the gain on sale of mortgage loans
prior to March 1999 was due to refinancing. The demand for refinanced mortgage
loans dramatically decreased with the rise in interest rates. Most of the
mortgage loans originated during late 1999 and 2000 were for the purchase of new
or existing homes. The above mentioned decreases were offset slightly by
increases in financial advisory income, service charges on deposit accounts and
income from investments in Enterprise Merchant Banc, LLC. Financial advisory
income was $97,308 for the three month ended March 31, 2000 as compared to $0
for the same period in 1999. The Company began offering financial advisory and
trust services in October 1998 and started generating fees in the second quarter
of 1999. Service charges on deposit accounts were $173,149 for the three months
ended March 31, 2000, compared to $130,655 for the same period in 1999. The
increase in service charges is due to a concerted effort by the Company's
management to alter service charges and other fees to stay competitive in the
marketplace and an increase in the number of deposit accounts. The increase from
Enterprise Merchant Banc, LLC is a result of increased activity and a recent
restructuring of that business unit.
NONINTEREST EXPENSE
Noninterest expense was $4.0 million for the three months ended March 31, 2000,
compared to $3.1 million for the same period in 1999. Increases in noninterest
expenses are primarily due to: 1) increased activity and growth in the trust and
financial planning operations started during 1998; 2) an increase in the FDIC
insurance expense primarily due to a reclassification of the risk category for
the banking subsidiary; and 3) normal increases associated with continued
growth. Other noninterest expenses were $1,012,635 for the three months ended
March 31, 2000, an increase of $269,972, or 36%, over $742,663 for the three
months ended March 31, 1999. This increase is attributed to normal operating
expenses associated with growth.
12
<PAGE> 15
LIQUIDITY AND INTEREST RATE SENSITIVITY
Liquidity is provided by the Company's earning assets, including short-term
investments in federal funds sold, maturities in the loan portfolio, maturities
in the investment portfolio, amortization of term loans, deposit inflows,
proceeds from borrowings, and retained earnings.
Since inception, the Company has experienced rapid loan and deposit growth
primarily due to the aggressive direct calling efforts of the Company's
relationship officers and sustained economic growth in the local market served
by the Company. Management has pursued privately held businesses who desire a
close working relationship with a locally managed, full service bank. Due to the
relationship developed with these customers, management views deposits from this
source as a stable deposit base. Additionally, the Company belongs to a national
network of time depositors (primarily credit unions) who place time deposits
with the Company, typically in increments of $99,000. The Company has used this
source of deposits for over four years and considers it to be a stable source of
deposits enabling the Company to acquire funds at a cost below its alternative
cost of funds. There were $41 million and $45 million of deposits from the
national network with the Company at March 31, 2000 and December 31, 1999,
respectively.
The following table sets forth the amount and maturity of certificates of
deposit that had balances of more than $100,000 at March 31, 2000:
<TABLE>
<CAPTION>
Remaining Maturity Amount
- ------------------------------------------ -------------
(Dollars in Thousands)
<S> <C>
Three months or less $ 22,768
Over three through six months 40,201
Over six through twelve months 6,394
Over twelve months 307
-------------
$ 69,670
=============
</TABLE>
The asset/liability management process, which involves management of the
components of the balance sheet to allow assets and liabilities to reprice at
approximately the same time, is an ever-changing process essential to minimizing
the effect of interest rate fluctuations on net interest income.
In March 2000, the Company renewed a $2,500,000 unsecured line of credit from
Jefferson Bank and Trust. The line of credit matures on March 31, 2001 and is an
interest only note accruing interest at a variable rate of Prime minus 0.50%.
There were no amounts outstanding under the line of credit at March 31, 2000.
CAPITAL ADEQUACY
Risk-based capital guidelines for financial institutions were adopted by
regulatory authorities effective January 1, 1991. These guidelines were designed
to relate regulatory capital requirements to the risk profile of the specific
institution and to provide for uniform requirements among the various
regulators. Currently, the risk-based capital guidelines require the Company to
meet a minimum total capital ratio of 8.0% of which at least 4.0% must consist
of Tier 1 capital. Tier 1 capital generally consists of (a) common shareholders'
equity (excluding the unrealized market value adjustments on the
available-for-sale securities), (b) qualifying perpetual preferred stock and
related surplus subject to certain limitations specified by the FDIC, (c)
minority interests in the equity accounts of consolidated subsidiaries less (d)
goodwill, (e) mortgage servicing rights within certain limits, and (f) any other
intangible assets and investments in subsidiaries that the FDIC determines
should be deducted from Tier 1 capital. The FDIC also requires a minimum
leverage ratio of 3.0%, defined as the ratio of Tier 1 capital less purchased
mortgage servicing rights to total assets, for banking organizations deemed the
strongest and most highly rated by banking regulators. A higher minimum leverage
ratio is required of less highly rated banking organizations. Total capital, a
measure of capital adequacy, includes Tier 1 capital, allowance for possible
loan losses, and debt considered equity for regulatory capital purposes.
13
<PAGE> 16
The following table summarizes the Company's risk-based capital and leverage
ratios at the dates indicated:
<TABLE>
<CAPTION>
To Be Well
Capitalized Under
For Capital Prompt Corrective
Actual Adequacy Purposes Action Provisions
------------------- ------------------- -------------------
Amount Ratio Amount Ratio Amount Ratio
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
At March 31, 2000:
Total Capital (to Risk Weighted Assets)
Enterbank Holdings, Inc. $ 49,065,506 11.69% $ 33,568,529 8.00% $ 41,666,712 10.00%
Enterprise Bank $ 42,587,576 10.21% $ 33,371,765 8.00% $ 41,420,758 10.00%
Tier I Capital (to Risk Weighted Assets)
Enterbank Holdings, Inc. $ 44,683,506 10.65% $ 16,784,264 4.00% $ 25,000,027 6.00%
Enterprise Bank $ 38,205,576 9.16% $ 16,685,883 4.00% $ 24,852,455 6.00%
Tier I Capital (to Average Assets)
Enterbank Holdings, Inc. $ 44,068,793 9.08% $ 14,756,041 3.00% $ 24,610,401 5.00%
Enterprise Bank $ 38,205,576 7.80% $ 14,687,468 3.00% $ 24,479,113 5.00%
At December 31, 1999:
Total Capital (to Risk Weighted Assets)
Enterbank Holdings, Inc. $ 48,068,793 11.82% $ 32,538,625 8.00% $ 40,673,282 10.00%
Enterprise Bank $ 41,215,654 10.22% $ 32,253,615 8.00% $ 40,317,018 10.00%
Tier I Capital (to Risk Weighted Assets)
Enterbank Holdings, Inc. $ 43,833,793 10.78% $ 16,269,313 4.00% $ 24,403,969 6.00%
Enterprise Bank $ 36,980,654 9.17% $ 16,126,807 4.00% $ 24,190,211 6.00%
Tier I Capital (to Average Assets)
Enterbank Holdings, Inc. $ 43,833,793 10.74% $ 12,248,031 3.00% $ 20,413,385 5.00%
Enterprise Bank $ 36,980,654 9.09% $ 12,201,701 3.00% $ 20,336,168 5.00%
</TABLE>
EFFECT OF INFLATION
Changes in interest rates may have a significant impact on a commercial bank's
performance because virtually all assets and liabilities of commercial banks are
monetary in nature. Interest rates do not necessarily move in the same direction
or in the same magnitude as the prices of goods and services. Inflation does
have an impact on the growth of total assets in the banking industry, often
resulting in a need to increase equity capital at higher than normal rates to
maintain an appropriate equity-to-assets ratio.
14
<PAGE> 17
PART II - OTHER INFORMATION
ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K
(a). Exhibits.
Exhibit
Number Description
-------- -----------
10.1 (1) Enterbank Holdings, Inc. Deferred Compensation Plan I
10.2 Agreement and Plan of Merger dated January 5, 2000
between Enterbank Holdings, Inc. and Commercial
Guaranty Bancshares, Inc. (incorporated herein by
reference to Exhibit 10.4 of the Registrant's Annual
Report on Form 10-K for the period ending December 31,
1999 (File No. 000-24131))
11.1 (1) Statement regarding computation of per share earnings
27.1 (1) Financial Data Schedule (EDGAR only)
(b). During the three months ended March 31, 2000, the Registrant filed one
current report on form 8-K, dated January 5, 2000, in which the
Registrant announced the signing of the Agreement and Plan of Merger
(see Exhibit 10.4 above) between Enterbank Holdings, Inc. and
Commercial Guaranty Bancshares, Inc.
- ----------------------
(1) Filed herewith.
15
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned; thereunto duly authorized, in the City of Clayton, State of
Missouri on the 15th day of May, 2000.
ENTERBANK HOLDINGS, INC.
By: /s/ Fred H. Eller
------------------------------
Fred H. Eller
Chief Executive Officer
By: /s/ James C. Wagner
------------------------------
James C. Wagner
Chief Financial Officer
16
<PAGE> 1
EXHIBIT 10.1
ENTERBANK HOLDINGS, INC.
DEFERRED COMPENSATION PLAN I
Article I
Establishment of Plan
1.1 Purpose. The Enterbank Holdings, Inc. Deferred Compensation Plan I is
hereby established by the Board of Directors of Enterbank Holdings, Inc. (the
"Corporation" or "Enterbank Holdings"), a Delaware corporation, to provide
deferred compensation benefits to selected executives of the Corporation as more
fully provided herein. The benefits provided under the Plan are intended to be
in addition to other employee benefits programs offered by the Corporation,
including but not limited to tax-qualified employee benefit plans.
1.2 Effective Date and Term. Enterbank Holdings, Inc. adopts this unfunded
eferred compensation plan effective as of December 20, 1999, to be known as the
Enterbank Holdings, Inc. Deferred Compensation Plan I, hereinafter referred to
as the "Plan."
1.3 Applicability of ERISA. This Plan is intended to be a "top-hat" plan.
This Plan is an unfunded plan maintained primarily for the purpose of providing
deferred compensation to a select group of management or highly compensated
employees within the meaning of ERISA.
Article II
Definitions
As used within this document, the following words and phrases have
the meanings described in this Article II unless a different meaning is required
by the context. Some of the words and phrases used in the Plan are not defined
in this Article II, but for convenience, are defined as they are introduced into
the text. Words in the masculine gender shall be deemed to include the feminine
gender. Any headings used are included for ease of reference only, and are not
to be construed so as to alter any of the terms of the Plan.
2.1 Annual Deferral. The amount of Basic Salary and/or Bonuses which the
Participant elects to defer in each Deferral Period pursuant to Article 4.1 of
the Plan Document.
2.2 Basic Salary. A Participant's base annual salary for the applicable
Plan Year.
2.3 Beneficiary. Individual(s) or entit(ies) designated by a Participant in
accordance with Section 14.6.
2.4 Board or Board of Directors. The Board of Directors of the Corporation.
2.5 Bonus. Earnings and incentive compensation awarded to a Participant at
the option of the Corporation which may or may not occur during each Plan Year.
2.6 Code. The Internal Revenue Code of 1986. Reference to a section of the
Code shall include that section and any comparable section or sections of any
future legislation that amends, supplements or supersedes such section.
2.7 Committee. A committee of one or more individuals appointed by the
Board of Directors to administer the Plan.
II-1
<PAGE> 2
2.8 Corporation. Enterbank Holdings, Inc.
2.9 Deferral Account. The account established for a Participant pursuant to
Section 5.1 of the Plan Document.
2.10 Deferral Election. The election made by the Participant pursuant to
Section 4.1 of the Plan Document.
2.11 Deferral Period. The Plan Year, or in the case of a newly hired or
promoted employee who becomes an Eligible Employee during a Plan Year, the
remaining portion of the Plan Year. In the case of the first Plan Year, the
Deferral Period for Bonus commences December 20, 1999, and ends December 31,
1999. The first Deferral Period for Basic Salary commences January 1, 2000, and
ends December 31, 2000.
2.12 Disability. A total and permanent disability, which qualifies the
Participant for early payout of benefits, as described in Section 7.2. The
existence of a Disability shall be determined by the Committee on the advice of
a physician chosen by the Committee.
2.13 Effective Date. December 20, 1999.
2.14 Eligible Employee. An employee of the Corporation or a subsidiary of
the Corporation who is designated by the Board of Directors.
2.15 ERISA. The Employee Retirement Income Security Act of 1974, as amended.
2.16 IRS. The Internal Revenue Service.
2.17 Participant. Any individual approved by the Board of Directors who
becomes eligible to participate in the Plan pursuant to - Article III of the
Plan Document.
2.18 Participant Agreement and Deferral Election Form. The written agreement
to defer Basic Salary and/or Bonuses made by the Participant. Such written
agreement shall be in a format designated by the Corporation. In order to revoke
these documents, the Participant should notify the committee and the Plan
Administrator.
2.19 Plan. The Enterbank Holdings, Inc. Deferred Compensation Plan I.
2.20 Plan Administrator. The Corporation unless the Corporation designates
another individual or entity to hold the position of the Plan Administrator.
2.21 Plan Year. For the initial Plan Year, the period beginning December 20,
1999, and ending on December 31, 1999. Thereafter, "Plan Year" means the
12-month period beginning each January 1 and ending on the following December
31.
2.22 Rabbi Trust. The Rabbi Trust, which the Corporation may, in its sole
discretion, establish for the Enterbank Holdings, Inc. Deferred Compensation
Plan I, as amended from time to time.
2.23 Retirement Date. The first day of the first month coincident with or
next following the date on which a Participant reaches age 65 and employment
ceases with Corporation. If Participant continues employment with Corporation
beyond age 65, the Retirement Date shall be the first day of the first month
coincident with or next following the date on which Participant's employment
ceases with the Corporation. If Participant is employed by Corporation at the
time the Participant reaches age 68, the Participant's Retirement Date shall be
the first day of the
II-2
<PAGE> 3
first month coincident with or next following the date on which the Participant
reaches age 68 regardless of whether Participant is still employed by the
Corporation.
2.23 Valuation Date. Each business day of the Plan Year.
2.24 Years of Service. Each consecutive twelve (12) month period during
which a Participant is continuously employed by the Corporation.
Article III
Eligibility and Participation
3.1 Participation - Eligibility and Initial Period. Participation in the
Plan is open only to Eligible Employees of the Corporation (as defined in
Section 2.14). Each Eligible Employee of the Corporation, as of the Effective
Date, may become a Participant for the Deferral Period from December 20, 1999,
through December 31, 1999, if he submits a properly completed Participation
Agreement and Deferral Election Form to the Committee prior to December 23,
1999. Such Form shall apply to any Bonus paid after the execution of the Form
and to Basic Salary paid January 1, 2000, through December 31, 2000. Any
employee becoming an Eligible Employee after the Effective Date, e.g., new hires
or promoted employees, may become a Participant for the Deferral Period
commencing on or after he becomes an Eligible Employee if he submits a properly
completed Participation Agreement and Deferral Election Form within thirty (30)
days after becoming an eligible employee.
3.2 Participation - Subsequent Entry into Plan. An Eligible Employee who
does not elect to participate at the time of initial eligibility as set forth in
Section 3.1 shall remain eligible to become a Participant in subsequent Plan
Years as long as he continues his status as an Eligible Employee. In such event,
the Eligible Employee may become a Participant by submitting a properly executed
Participation Agreement and Deferral Election Form prior to January 1 of the
Plan Year for which it is effective.
Article IV
Contributions
4.1 Deferral Election. Before the first day of each Plan Year, a
Participant shall file with the Committee, a Participation Agreement and
Deferral Election Form indicating the amount of Basic Salary and/or Bonus
deferrals for that Plan Year. After a Plan Year commences, such Deferral
Election shall continue for the entire Plan Year except that it shall terminate
upon termination of employment.
4.2 Maximum Deferral Election. A Participant may elect to defer up to up to
one hundred percent (100%) of Bonus earned during the first Plan Year dated
December 20, 1999 through December 31, 1999. Thereafter, a Participant may elect
to defer up to twenty-five percent (25%) of Basic Salary and/or up to one
hundred (100%) of Bonuses earned during the corresponding Deferral Period. A
Deferral Election may be automatically reduced if the Committee determines that
such action is necessary to meet Federal or State tax withholding obligations.
4.3 Minimum Deferral Election. For the initial Deferral Period commencing
December 20, 1999 and ending December 31, 1999, there shall be no minimum
deferral; thereafter, a Participant must elect to defer at least $2,400 during
the Deferral Period from Basic Salary, Bonuses, or a combination of Basic Salary
and Bonuses or no deferral during such Deferral Period.
4.4 Employer Contributions. The Corporation may, in its sole discretion,
make a contribution to the Participant's Deferral Account.
II-3
<PAGE> 4
Article V
Accounts
5.1 Deferral Accounts. Solely for recordkeeping purposes, the Plan
Administrator shall establish a Deferral Account for each Participant. A
Participant's Deferral Account shall be credited with the contributions made by
him or on his behalf by the Corporation under Section 4.4 and shall be credited
(or charged, as the case may be) with the hypothetical or deemed investment
earnings and losses determined pursuant to Section 5.3, and charged with
distributions made to or with respect to him.
5.2 Crediting of Deferral Accounts. Basic salary contributions under
Section 4.1 shall be credited to a Participant's Deferral Account as of the date
on which such contributions were withheld from his Basic Salary. Bonus
contributions under Section 4.1 shall be credited to a Participant's Deferral
Account as of the date on which the contribution would have otherwise been paid
in cash. Contributions under Section 4.4 shall be credited to the Participant's
Deferral Account as of the date declared by the Corporation. Any distribution
with respect to a Deferral Account shall be charged to that Account as of the
date such payment is made by the Corporation or the trustee of any Rabbi Trust
established for the Plan.
5.3 Earning Credits or Losses. Amounts credited to a Deferral Account shall
be credited with deemed net income, gain and loss, including the deemed net
unrealized gain and loss based on hypothetical investment directions made by the
Participant with respect to this Deferral Account on a form designated by the
Corporation, in accordance with investment options and procedures adopted by the
Corporation in its sole discretion, from time to time. Such earnings will
continue to accrue during any period in which installments are paid pursuant to
Article VII.
5.4 Hypothetical Nature of Accounts. The Plan constitutes a mere promise by
the Corporation to make the benefit payments in the future. Any Deferral Account
established for a Participant under this Article V shall be hypothetical in
nature and shall be maintained for the Corporation's recordkeeping purposes
only, so that any contributions can be credited and so that deemed investment
earnings and losses on such amounts can be credited (or charged, as the case may
be). Neither the Plan nor any of the Accounts (or subaccounts) shall hold any
actual funds or assets. The right of any individual or entity to receive one or
more payments under the Plan shall be an unsecured claim against the general
assets of the Corporation. Any liability of the Corporation to any Participant,
former Participant, or Beneficiary with respect to a right to payment shall be
based solely upon contractual obligations created by the Plan. The Corporation,
the Board of Directors, the Committee and any individual or entity shall not be
deemed to be a trustee of any amounts to be paid under the Plan. Nothing
contained in the Plan, and no action taken pursuant to its provisions, shall
create or be construed to create a trust of any kind, or a fiduciary
relationship, between the Corporation and a Participant, former Participant,
Beneficiary, or any other individual or entity. The Corporation may, in its sole
discretion, establish a Rabbi Trust as a vehicle in which to place funds with
respect to this Plan.
The Corporation does not in any way guarantee any Participant's Deferral Account
against loss or depreciation, whether caused by poor investment performance,
insolvency of a deemed investment or by any other event or occurrence. In no
event shall the employee, officer, director, or stockholder of the Corporation
be liable to any individual or entity on account of any claim arising by reason
of the Plan provisions or any instrument or instruments implementing its
provisions, or for the failure of any Participant, Beneficiary or other
individual or entity to be entitled to any particular tax consequences with
respect to the Plan or any credit or payment thereunder.
5.5 Statement of Deferral Accounts. The Plan Administrator shall provide to
each Participant quarterly statements setting forth the value of the Deferral
Account maintained for such Participant.
II-4
<PAGE> 5
Article VI
Vesting
6.1 Vesting. The Corporation's contributions credited to a Participant's
Deferral Account under Section 4.4 and any deemed investment earnings
attributable to these contributions shall be one hundred percent (100%) vested
or nonforfeitable when the Participant has five Years of Service with the
Corporation. Prior to the time a Participant has five Years of Service with the
Corporation, the Corporation's contributions to his account shall be zero
percent (0%) vested. In addition, a Participant shall be one hundred percent
(100%) vested in the Corporation's contributions, including any deemed
investment earnings attributable to these contributions, upon his death or
Disability while he is actively employed by the Corporation. All other amounts
credited to a Participant's Deferral Account shall be one hundred percent (100%)
vested at all times.
Article VII
Benefits
7.1 Retirement Date. Unless benefits have already commenced pursuant to
another section in this Article VII, a Participant shall be entitled to begin
receipt of the vested amount credited to his Deferral Account as of the
Valuation Date coinciding with his Retirement Date. Payment of any amount under
this Section shall commence within thirty (30) days of the Participant's
Retirement Date and in accordance with the payment method elected by the
Participant on his Participation Agreement and Deferral Election Form.
7.2 Disability. If a Participant suffers a Disability while employed with
the Corporation and before he is entitled to benefits under this Article, he
shall receive the amount credited to his Deferral Account as of the Valuation
Date coinciding with the Date on which the Participant is determined by the
Committee to have suffered a Disability. Payment of any amount under this
Section shall commence within thirty (30) days of when the Committee determines
the existence of the Participant's Disability and in accordance with the payment
method elected by the Participant on his Participation Agreement and Deferral
Election Form.
7.3 Pre-Retirement Survivor Benefit. If a Participant dies before becoming
entitled to benefits under this Article, the Beneficiary or Beneficiaries
designated under Section 14.6, shall receive in a single lump sum, a
Pre-Retirement Survivor Benefit equal to the vested amount credited to the
Participant's Deferral Account as of the Valuation Date coinciding with the date
of the Participant's death. Payment of any amount under this Section shall be
made within thirty (30) days of the Participant's death, or if later, within
thirty (30) days of when the Committee receives notification of or otherwise
confirms the Participant's death.
7.4 Post-Retirement Survivor Benefit. If a Participant dies after benefits
have commenced, but prior to receiving complete payment of benefits under this
Article, the Beneficiary or Beneficiaries designated under Section 14.6, shall
receive in a single lump sum the vested amount credited to the Participant's
Deferral Account as of the Valuation Date coinciding with the date of the
Participant's death. Payment of any amount under this Section shall be made
within thirty (30) days of the Participant's death, or if later, within thirty
(30) days of when the Committee receives notification of or otherwise confirms
the Participant's death.
7.5 Termination. If a Participant's employment terminates with the
Corporation before he becomes entitled to receive benefits by reason of any of
the above Sections, he shall receive in a single lump sum the vested amount
credited to his Deferral Account as of the Valuation Date coinciding with the
date on which the Participant's employment terminates. Payment of any amount
under this Section shall be made within thirty (30) days of when the Participant
terminates his employment with the Corporation.
7.6 Change in Control. If a Change in Control occurs before a Participant
becomes entitled to receive benefits by reason of any of the above Sections or
before the Participant has received complete payment of his benefits under this
Article, he shall receive a lump sum payment of the amount credited to his
Account as of the Valuation Date immediately preceding the date on which the
Change in Control occurs. Payment of any amount
II-5
<PAGE> 6
under this section shall commence within thirty (30) days of when the Change in
Control is deemed to have occurred and is recognized by the Corporation's Board
of Directors.
For the purposes of this Plan, a Change in Control shall mean a change in
control of the Corporation of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), whether or not
the Corporation is in fact required to comply therewith; provided, that, without
limitation, such a change in control for purposes of this Plan shall be deemed
to have occurred if:
(i) any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act), other than the Corporation, any trustee or other
fiduciary holding securities under an employee benefit plan of the
Corporation or a corporation owned, directly or indirectly, by the
stockholders of the Corporation in substantially the same proportions as
their ownership of stock of the Corporation is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Corporation representing thirty percent
(30%) or more of the combined voting power of the Corporation's then
outstanding securities; or
(ii) during any period of twenty-four (24) consecutive months (not
including any period prior to the effective date of this Plan), individuals
who at the beginning of such period constitute the Corporation's Board of
Directors and any new director (other than a director designated by a person
who has entered into an agreement with the Corporation to effect a
transaction described in paragraphs (i), (ii) or (iii) of this Section whose
election by the Board or nomination for election by the stockholders of the
Corporation was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof; or
(iii) the stockholders of the Corporation approve a merger or
consolidation of the Corporation with any other corporation, other than (A)
a merger or consolidation which would result in the voting securities of the
Corporation outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least fifty percent (50%) of the
combined voting securities of the Corporation or such surviving entity
outstanding immediately after such merger or consolidation or (B) a merger
or consolidation effected to implement a recapitalization of the Corporation
(or similar transaction) in which no "person" (as hereinabove defined)
acquires thirty percent (30%) or more of the combined voting power of the
Corporation's then outstanding securities; or
(iv) the stockholders of the Corporation approve a plan of complete
liquidation of the Corporation or an agreement for the sale or disposition
by the Corporation of all or substantially all of the Corporation's assets.
7.7 Payment Methods. Unless otherwise provided in this Article VII, a
Participant may elect to receive payment of the vested amount credited to his
Deferral Account in a single lump sum or in five (5), or ten (10) annual
installments. This election must be made on the Participation Agreement and
Deferral Election Form for the corresponding Plan Year. Any installment payments
shall be paid annually on the first practicable day after the distributions are
scheduled to commence. Each installment payment shall be determined by
multiplying the Deferral Account Balance by a fraction, the numerator of which
is one and the denominator of which is the number of remaining installment
payments.
Article VIII
In-Service Distributions
8.1 Election of In-Service Distributions. A Participant may irrevocably
elect in each Deferral Period, for that particular Deferral Election, to receive
in the future an In-Service Distribution from his Deferral Account. Such
Deferral Election shall state the percentage and date on which such In-Service
distribution is to be paid. Each
II-6
<PAGE> 7
election shall state the date on which such In-Service Distribution is to be
paid; provided that such date is not earlier than five (5) years from January
1st of the Plan Year following the year of said election. For example: The
earliest distribution date for the initial Plan Year ending December 31, 1999
would be January 1, 2005. This is calculated using January 1, 2000 as the
"January 1st of the Plan Year following" plus five (5).
8.2 Payment of In-Service Distributions. All In-Service Distributions shall
be made within thirty (30) days of the date stated on the Participation
Agreement and Deferral Election Form. Distributions shall be in the form of a
single lump sum payment.
8.3 Termination Prior to In-Service Distribution Date. Notwithstanding a
Participant's election of an In-Service Distribution, in the event a
Participant's employment terminates for any reason pursuant to Article VII of
the Plan Document and prior to such Participant receiving any In-Service
Distribution, the Participant shall receive his Deferral Account according to
the payment method designated in Article VII or as elected on his Participation
Agreement and Deferral Election Form.
Article IX
Hardship Withdrawals
9.1 Hardship Withdrawals. If a Participant incurs an unforeseeable
emergency, the Participant may make a written request to the Committee for a
hardship withdrawal from his account. An unforeseeable emergency is a severe
financial hardship to the Participant resulting from a sudden and unexpected
illness or accident of the Participant or the Participant's dependent (as
defined in Section 152(e) of the Code), loss of the Participant's property due
to casualty or other similar extraordinary and unforeseen circumstances beyond
the control of the Participant. Withdrawals of amounts because of unforeseeable
emergencies are only permitted to the extent reasonably necessary to satisfy the
emergency need. The Committee will have sole discretion in dealing with and
determining hardship cases. This section shall be interpreted in a manner
consistent with Sections 1.457-2(h)(4) and 1.457-2(h)(5) of the Treasury
Regulations.
In the event of a Hardship Withdrawal, the Participant's deferrals for the
remainder of the Plan Year shall be suspended. Deferrals may commence with the
next following Plan Year provided the Participant completes the appropriate
Participation Agreement and Deferral Election form prior to January 1 of the
corresponding Plan Year.
Article X
Establishment of Trust
10.1 Establishment of Trust. The Corporation may establish a Rabbi Trust for
the Plan. If established, all benefits payable under this Plan to a Participant
shall be paid directly by the Corporation from the Rabbi Trust. To the extent
that such benefits are not paid from the Rabbi Trust, the benefits shall be paid
from the general assets of the Corporation. Any Rabbi Trust shall be an
irrevocable grantor trust which conforms to the terms of the model trust as
described in IRS Revenue Procedure 92-64, I.R.B. 1992-33. The assets of the
Rabbi Trust are subject to the claims of the Corporation's creditors in the
event of its insolvency. Except as to any amounts paid or payable to a Rabbi
Trust, the Corporation shall not be obligated to set aside, earmark or escrow
any funds or other assets to satisfy its obligations under this Plan, and the
Participant and/or his designated Beneficiaries shall not have any property
interest in any specific assets of the Corporation other than the unsecured
right to receive payments from the Corporation, as provided in this Plan.
Article XI
Plan Administration
11.1 Plan Administration. The Plan shall be administered by the Committee,
and such Committee may designate an agent to perform the recordkeeping duties.
The Committee shall construe and interpret the Plan,
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<PAGE> 8
including disputed and doubtful terms and provisions and, in its sole
discretion, decide all questions of eligibility and determine the amount, manner
and time of payment of benefits under the Plan. The determinations and
interpretations of the Committee shall be consistently and uniformly applied to
all Participants and Beneficiaries, including but not limited to interpretations
and determinations of amounts due under this Plan, and shall be final and
binding on all parties. The Plan at all times shall be interpreted and
administered as an unfunded deferred compensation plan, and no provision of the
Plan shall be interpreted so as to give any Participant or Beneficiary any right
in any asset of the Corporation which is a right greater than the right of a
general unsecured creditor of the Corporation.
Article XII
Nonalienation of Benefits
12.1 Nonalienation of Benefits. The interests of Participants and their
Beneficiaries under this Plan are not subject to the claims of their creditors
and may not be voluntarily or involuntarily sold, transferred, alienated,
assigned, pledged, anticipated, or encumbered, attached or garnished. Any
attempt by a Participant, his Beneficiary, or any other individual or entity to
sell, transfer, alienate, assign, pledge, anticipate, encumber, attach, garnish,
charge or otherwise dispose of any right to benefits payable shall be void. The
Corporation may cancel and refuse to pay any portion of a benefit which is sold,
transferred, alienated, assigned, pledged, anticipated, encumbered, attached or
garnished. The benefits which a Participant may accrue under this Plan are not
subject to the terms of any Qualified Domestic Relations Order (as that term is
defined in Section 414(p) of the Code) with respect to any Participant, and the
Plan Administrator, Board of Directors, employees, Committee and Corporation
shall not be required to comply with the terms of such order in connection with
this Plan. The withholding of taxes from Plan payments, the recovery of Plan
overpayments of benefits made to a Participant or Beneficiary, the transfer of
Plan benefit rights from the Plan to another plan, or the direct deposit of Plan
Payments to an account in a financial institution (if not actually a part of an
arrangement constituting an assignment or alienation) shall not be construed as
assignment or alienation under this Article XII.
Article XIII
Amendment and Termination
13.1 Amendment and Termination. The Corporation reserves the right to amend,
alter or discontinue this Plan at any time. Such action may be taken in writing
by any officer of the Corporation who has been duly authorized by the
Corporation to perform acts of such kind. However, no such amendment shall
deprive any Participant or Beneficiary of any portion of any benefit which would
have been payable had the Participant's employment with the Corporation
terminated on the effective date of such amendment or termination.
Notwithstanding the provisions of this Article XIII to the contrary, the
Corporation may amend the Plan at any time, in any manner, if the Corporation
determines any such amendment is required to ensure that the Plan is
characterized as providing deferred compensation for a select group of
management or highly compensated employees and as described in ERISA Sections
201(2), 301(a)(3) and 401(a)(1) or to otherwise conform the Plan to the
provisions of any applicable law including, but not limited to, ERISA and the
Code.
Article XIV
General Provisions
14.1 Good Faith Payment. Any payment made in good faith in accordance with
provisions of the Plan shall be a complete discharge of any liability for the
making of such payment under the provisions of this Plan.
14.2 No Right to Employment. This Plan does not constitute a contract of
employment, and participation in
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<PAGE> 9
the Plan shall not give any Participant the right to be retained in the
employment of the Corporation.
14.3 Binding Effect. The provisions of this Plan shall be binding upon the
Corporation and its successors and assigns and upon every Participant and
his/her heirs, Beneficiaries, estates and legal representatives.
14.4 Participant Change of Address. Each Participant entitled to benefits
shall file with the Plan Administrator, in writing, any change of post office
address. Any check representing payment and any communication addressed to a
Participant or a former Participant at this last address filed with the Plan
Administrator, or if no such address has been filed, then at his last address as
indicated on the Corporation's records, shall be binding on such Participant for
all purposes of the Plan, and neither the Plan Administrator, the Corporation
nor any other payer shall be obliged to search for or ascertain the location of
any such Participant. If the Plan Administrator is in doubt as to the address of
any Participant entitled to benefits or as to whether benefit payments are being
received by a Participant, it shall, by registered mail addressed to such
Participant at his last known address, notify such Participant that:
(i) All unmailed and future Plan payments shall be withheld until
Participant provides the Plan Administrator with evidence of such
Participant's continued life and proper mailing address; and
(ii) Participant's right to any Plan payment shall, at the option of
the Committee, be canceled forever, if, at the expiration of five
(5) years from the date of such mailing, such Participant or his
Beneficiary shall not have provided the Committee with evidence of
his continued life and proper mailing address.
14.5 Notices. Each Participant shall furnish to the Plan Administrator any
information the Plan Administrator deems necessary for purposes of administering
the Plan, and the payment provisions of the Plan are conditional upon the
Participant furnishing promptly such true and complete information as the Plan
Administrator may request. Each Participant shall submit proof of his age when
required by the Plan Administrator. The Plan Administrator shall, if such proof
of age is not submitted as required, use such information as is deemed by it to
be reliable, regardless of the lack of proof, or the misstatement of the age of
individuals entitled to benefits. Any notice or information which, according to
the terms of the Plan or requirements of the Plan Administrator, must be filed
with the Plan Administrator, shall be deemed so filed if addressed and either
delivered in person or mailed to and received by the Plan Administrator, in care
of the Corporation currently located at:
Enterbank Holdings, Inc.
Attn: Chief Financial Officer
150 North Meramec
Clayton, MO 63105
14.6 Designation of Beneficiary. Each Participant shall designate, by name,
on Beneficiary designation forms provided by the Plan Administrator, the
Beneficiary(ies) who shall receive any benefits which might be payable after
such Participant's death. A Beneficiary designation may be changed or revoked
without such Beneficiary's consent at any time or from time to time in the
manner as provided by the Plan Administrator, and the Plan Administrator shall
have no duty to notify any individual or entity designated as a Beneficiary of
any change in such designation which might affect such individual or entity's
present or future rights. If the designated Beneficiary does not survive the
Participant, all amounts which would have been paid to such deceased Beneficiary
shall be paid to any remaining Beneficiary in that class of beneficiaries,
unless the Participant has designated that such amounts go to the lineal
descendants of the deceased Beneficiary. If none of the designated primary
Beneficiaries survive the Participant, and the Participant did not designate
that payments would be payable to such Beneficiary's lineal descendants, amounts
otherwise payable to such Beneficiaries shall be paid to any successor
Beneficiaries designated by the Participant, or if none, to the Participant's
spouse, or, if the Participant was not married at the time of death, the
Participant's estate.
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<PAGE> 10
No Participant shall designate more than five (5) simultaneous Beneficiaries,
and if more than one (1) Beneficiary is named, Participant shall designate the
share to be received by each Beneficiary. Despite the limitation on five (5)
Beneficiaries, a Participant may designate more than five (5) Beneficiaries
provided such beneficiaries are the surviving spouse and children of the
Participant. If a Participant designates alternative, successor, or contingent
Beneficiaries, such Participant shall specify the shares, terms and conditions
upon which amounts shall be paid to such multiple, alternative, successor or
contingent beneficiaries. Any payment made under this Plan after the death of a
Participant shall be made only to the Beneficiary or Beneficiaries designated
pursuant to this Section.
14.7 Claims. Any claim for benefits must initially be submitted in writing
to the Plan Administrator. If such claim is denied (in whole or in part), the
claimant shall receive notice from the Plan Administrator, in writing, setting
forth the specific reasons for denial, with specific reference to applicable
provisions of this Plan. Such notice shall be provided within ninety (90) days
of the date the claim for benefits is received by the Plan Administrator, unless
special circumstances require an extension of time for processing the claim, in
which event notification of the extension shall be provided to the claimant
prior to the expiration of the initial 90 day period. The extension notification
shall indicate the special circumstances requiring the extension of time and the
date by which the Plan Administrator expects to render its decision. Any such
extension shall not exceed 90 days. Any disagreements about such interpretations
and construction may be appealed in writing by the claimant within sixty (60)
days to the Plan Administrator. The Plan Administrator shall respond to such
appeal within sixty (60) days, with a notice in writing fully disclosing its
decision and its reasons, unless special circumstances require an extension of
time for reviewing the claim, in which event notification of the extension shall
be provided to the claimant prior to the expiration of the initial sixty (60)
day period. Any such extension shall be provided to the claimant prior to the
commencement of the extension. Any such extension shall not exceed 60 days. No
member of the Board of Directors, or any committee thereof, shall be liable to
any individual or entity for any action taken hereunder, except those actions
undertaken with lack of good faith.
14.8 Action by Board of Directors. Any action required to be taken by the
Board of Directors of the Corporation pursuant to the Plan provisions may be
performed by a committee of the Board, to which the Board of Directors of the
Corporation delegates the authority to take actions of that kind.
14.9 Governing Law. To the extent not superseded by the laws of the United
States, the laws of the State of Missouri shall be controlling in all matters
relating to this Plan.
14.10 Severability. In the event any provision of this Plan shall be held
illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining provisions of the Plan, and the Plan shall be interpreted
and enforced as if such illegal and invalid provisions had never been set forth.
IT WITNESS WHEREOF, ENTERBANK HOLDINGS, INC. has adopted the foregoing
instrument effective as of December 20, 1999.
ENTERBANK HOLDINGS, INC.
By:
Title:
ATTEST:
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<PAGE> 11
ENTERBANK HOLDINGS, INC.
DEFERRED COMPENSATION PLAN I
PARTICIPATION AGREEMENT AND DEFERRAL ELECTION FORM
Participant Name: _____________________________________________________________
Participant Address: __________________________________________________________
Social Security Number: ___________________ Date of Birth: __________________
________________________________________________________________________________
PART I - PARTICIPATION AGREEMENT
Enterbank Holdings, Inc. (the "Company") has established the Enterbank Holdings,
Inc. Deferred Compensation Plan I (the "Plan") effective, December 20, 1999.
You have been selected for Plan participation. Your consent to participate in
the Plan and your election to defer your compensation under the Plan is
evidenced by your signature on the last page of this Form. Unless otherwise
defined in this Form, a capitalized term has the same meaning as that provided
in the Plan. A copy of the Plan is attached to this Form. Please read the Plan
and keep it for your future reference. If you have questions about the Plan,
please contact Jim Wagner at (314) 725-5500.
For the Plan Year beginning January 1, 2000 and ending December 31, 2000, your
completed Form must be received by the Company prior to December 23, 1999. In
future years, your completed Form must be received by the Company prior to
December 15 of the preceding year. Your compensation deferral election will
apply to your annual compensation for services rendered for the Company after
execution of the Deferral Election Form. After any Plan Year has begun, your
deferral election for that year cannot be modified. Nonetheless, you may
prospectively terminate your deferral election at any time during the Plan Year;
however, you may not begin deferring again until the following Plan Year. In
order to participate, your total deferral of salary and bonus combined must be
no less than $2,400 in a calendar year.
Your deferral contributions are not subject to federal or state income tax until
distributed from the Plan; however, they are subject to Social Security taxes at
the time services are rendered. Such amounts will not again be subject to Social
Security taxes at the time of distribution. The Company will deduct from your
remaining compensation, which is not deferred into the Plan, your Social
Security tax liability for your deferral contributions.
________________________________________________________________________________
PART II - DEFERRAL ELECTION (complete before the beginning of the plan year)
A. 2000 SALARY
Please note the percentage/dollar amount indicated will be deducted from each
paycheck during the Plan Year.
(Please select one)
[ ] I elect to defer ____________% (up to 25%) from my salary or $________ from
each bimonthly paycheck.
[ ] I elect NO deferral of salary.
Note: You cannot change the deferral level during the plan year for which your
election applies.
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<PAGE> 12
PART III - DEFERRAL ELECTION
A. 1999 BONUS
<TABLE>
(Please select one)
<S> <C>
[ ] I elect to defer _______________ dollars ($_______________) of my bonus.
[ ] I elect to defer _______________ percent (_______________%) of my bonus.
[ ] I elect to defer the first _______________ dollars ($_______________) of my bonus and _______________ percent
(_______________%) of my remaining bonus, if any.
[ ] I elect to defer _______________ percent (_______________%) of the first _______________ dollars ($_______________) of my
bonus.
[ ] I elect to defer _______________ percent (_______________%) of any bonus in excess of _______________ dollars
($)_____________.
[ ] I elect NO deferral of bonus.
</TABLE>
________________________________________________________________________________
B. 2000 BONUS (complete before the beginning of the plan year)
<TABLE>
(Please select one)
<S> <C>
[ ] I elect to defer _______________ dollars ($_______________) of my bonus.
[ ] I elect to defer _______________ percent (_______________%) of my bonus.
[ ] I elect to defer the first _______________ dollars ($_______________) of my bonus and _______________ percent
(_______________%) of my remaining bonus, if any.
[ ] I elect to defer _______________ percent (_______________%) of the first _______________ dollars ($_______________) of my
bonus.
[ ] I elect to defer _______________ percent (_______________%) of any bonus in excess of _______________ dollars
($)______________.
[ ] I elect NO deferral of bonus.
</TABLE>
________________________________________________________________________________
PART IV - SELECTION OF INVESTMENTS
MUST BE IN MULTIPLES OF 5%, AND THE TOTAL MUST EQUAL 100%.
I hereby request to have my Deferral Account valued as though invested as
follows:
_____ Money Market
_____ International
_____ S&P Index
_____ Growth & Income
_____ Bond
_____ Small Cap
100%
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<PAGE> 13
________________________________________________________________________________
PART V - SELECTION OF RETIREMENT OR DISABILITY PAYMENT METHOD
I elect to receive my account balance upon Retirement or Disability in the
following method:
<TABLE>
<S> <C> <C>
[ ] Lump sum payment* [ ] Five annual payments* [ ] Ten annual payments
</TABLE>
* If your state has enacted a Source Tax law, your distribution could be subject
to double state income taxation if a distribution payout of less than ten years
is selected. Please consult your tax advisor if you require additional
information.
________________________________________________________________________________
PART VI - IN-SERVICE DISTRIBUTION
A. ELECTION
(Please select one)
[ ] I elect to receive an In-Service Distribution of _________ % of my 1999
Bonus Deferral Account. I request that the In-Service Distribution be
paid to me ___________________________ (insert a month, day and year.)
Your In-Service Distribution is payable in a Lump Sum and may not occur prior to
January 1, 2005.
B. ELECTION
(Please select one)
[ ] I elect to receive an In-Service Distribution of _________ % of my 2000
Salary Deferral Account. I request that the In-Service Distribution be
paid to me ___________________________ (insert a month, day and year.)
[ ] I elect to receive an In-Service Distribution of _________ % of my 2000
Bonus Deferral Account. I request that the In-Service Distribution be
paid to me ___________________________ (insert a month, day and year.)
Your In-Service Distribution is payable in a Lump Sum and may not occur prior to
January 1, 2006.
________________________________________________________________________________
PART VII - PRIMARY BENEFICIARY DESIGNATION(S)
<TABLE>
<S> <C> <C> <C>
[ ] In equal shares (do not complete percentages) [ ] In unequal shares (indicate percentages)
</TABLE>
Beneficiary Name: ________________________________________________
Address: _____________________________________________________________
Social Security Number:_______________________ Percentage: _______________
Relationship to Participant:_____________________________ (e.g., spouse)
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<PAGE> 14
Beneficiary Name: ________________________________________________
Address: _____________________________________________________________
Social Security Number:_______________________ Percentage: _______________
Relationship to Participant:_____________________________ (e.g., spouse)
Beneficiary Name: ________________________________________________
Address: _____________________________________________________________
Social Security Number:_______________________ Percentage: _______________
Relationship to Participant:_____________________________ (e.g., spouse)
________________________________________________________________________________
PART VIII - CONTINGENT BENEFICIARY
<TABLE>
<S> <C> <C> <C>
[ ] In equal shares (do not complete percentages) [ ] In unequal shares (indicate percentages)
</TABLE>
Beneficiary Name: ________________________________________________
Address: _____________________________________________________________
Social Security Number:_______________________ Percentage: _______________
Relationship to Participant:_____________________________ (e.g., spouse)
Beneficiary Name: ________________________________________________
Address: _____________________________________________________________
Social Security Number:_______________________ Percentage: _______________
Relationship to Participant:_____________________________ (e.g., spouse)
Beneficiary Name: ________________________________________________
Address: _____________________________________________________________
Social Security Number:_______________________ Percentage: ______________
Relationship to Participant:_____________________________ (e.g., spouse)
[ ] I want my designated beneficiaries to receive survivor benefits in a lump
sum
[ ] I want my beneficiaries to receive survivor benefits in the payment
stream as I have elected
NOTE: If one of your designated Primary Beneficiaries does not survive you,
his/her share of your benefits will be distributed proportionately to the
remaining Primary Beneficiaries unless you designate that you want that person's
share distributed to his/her lineal descendants (i.e., children, grandchildren).
You may do this by putting LDPS (Lineal Descendants Per Stirpes) after the name
of the Beneficiary. Contingent Beneficiaries may be treated in the same manner.
I have read and understand the terms of the attached Plan. I understand that I
have the opportunity for my legal counsel to review this Plan before my
execution. Finally, I understand that this Plan is not subject to ERISA.
________________________________ ____________________________________
SIGNATURE OF PARTICIPANT SIGNATURE OF OFFICER OF COMPANY
____________________________________
TITLE
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<PAGE> 1
EXHIBIT 11.1
STATEMENT REGARDING CALCULATION OF EARNINGS PER SHARE(1)
<TABLE>
<CAPTION>
Basic Diluted
EPS number EPS number Net Basic Diluted
of shares of shares Income EPS EPS
---------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
THREE MONTHS ENDED MARCH 31, 1999 7,122,312 7,611,268 $ 737,783 $ 0.10 $ 0.10
THREE MONTHS ENDED MARCH 31, 2000 7,152,241 7,773,274 $ 847,163 $ 0.12 $ 0.11
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1999 Basic Diluted
--------- ---------
<S> <C> <C>
Average Shares Outstanding 7,122,312 7,122,312
Options - Plan 1 45,057
Average Option Price $ 2.26
Total Exercise Cost $ 101,979
Shares Repurchased 9,246
Net Shares from Option - Plan 1 35,811
Options - Plan 2 219,000
Average Option Price $ 2.55
Total Exercise Cost $ 557,720
Shares Repurchased 50,564
Net Shares from Option - Plan 2 168,436
Options - Plan 3 552,951
Average Option Price $ 5.57
Total Exercise Cost $3,079,937
Shares Repurchased 279,233
Net Shares from Option - Plan 3 273,718
Options - EFA Non-qualified 83,832
Average Option Price $ 10.06
Total Exercise Cost $ 843,350
Shares Repurchased 76,460
Net Shares from Option - EFA Non-qualified 7,372
Options - Moneta(2) 38,745
Average Option Price $ 10.00
Total Exercise Cost $ 387,450
Shares Repurchased 35,127
Net Shares from Option - Moneta(2) 3,618
--------- ---------
Gross Shares 7,122,312 7,611,268
Price
$ 11.03
THREE MONTHS ENDED MARCH 31, 2000 Basic Diluted
--------- ---------
Average Shares Outstanding 7,152,241 7,152,241
Options - Plan 1 30,000
Average Option Price $ 2.33
Total Exercise Cost $ 69,900
Shares Repurchased 3,879
Net Shares from Option - Plan 1 26,121
Options - Plan 2 211,035
Average Option Price $ 2.55
Total Exercise Cost $ 538,139
Shares Repurchased 29,863
Net Shares from Option - Plan 2 181,172
Options - Plan 3 552,685
Average Option Price $ 5.74
Total Exercise Cost $3,172,412
Shares Repurchased 176,049
Net Shares from Option - Plan 3 376,636
Options - EFA Non-qualified 84,000
Average Option Price $ 10.06
Total Exercise Cost $ 845,040
Shares Repurchased 46,895
Net Shares from Option - EFA Non-qualified 37,105
--------- ---------
Gross Shares 7,152,241 7,773,274
Price
$ 18.02
</TABLE>
- ---------------------------
(1) Adjusted to give retroactive effect to a 3-for-1 stock split effective
September 29, 1999.
(2) As of March 31, 1999 Moneta options were dilutive for the earnings per
share calculation. As of March 31, 2000 Moneta options were considered to be
anti-dilutive for the earnings per share calculation, therefore these shares
have been excluded from the calculation.
II-15
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