1 TO OUR SHAREHOLDERS AND FRIENDS ENTERPRISE FINANCIAL SERVICES CORP BOARD OF DIRECTORS Chairman Peter F. Benoist Chairman & CEO Enterprise Bank & Trust Vice Chairman Kevin C. Eichner President & CEO Enterprise Financial Services Corp Lead Director Chairman, Executive, Nominating and Governance James J. Murphy, Jr. Murphy Company Paul R. Cahn Elan-Polo Imports, Inc. Chairman, Compensation William H. Downey Great Plains Energy, Inc. Kansas City Power & Light Company Robert E. Guest, Jr. Doster Mickes James Ullom Benson & Guest, LLC Lewis A. Levey Enhanced Value Strategies, Inc. Chairman, Audit Richard S. Masinton Russell Stover Candies Paul J. McKee, Jr. McEagle Corporation Birch M. Mullins Lindbergh Warson Properties Robert E. Saur Conrad Properties Sandra A. Van Trease BJC HealthCare Henry D. Warshaw Virtual Realty Enterprises Advisory Director William L. Zelenik Millennium Brokerage Group This year marked the third consecutive year of record growth and earnings for our company, with net income increasing 37% to $11.3 million and earnings per share (fully diluted) reaching $1.05 – a 28% increase. Our business model and strategies have now produced a three year compound annual increase of 26% in the all-important category of EPS growth–a number I am fairly certain will rank EFSC in the upper echelons of the industry. Each of our core lines of business – banking and wealth management – achieved new performance highs while positioning for the future with additional talent and new marketing and service initiatives. It is very gratifying to be realizing our vision of becoming one of the very highest performing growth organizations in the financial services industry. Pictured left to right: James J. Murphy, Jr., Kevin C. Eichner, and Peter F. Benoist This was a year with many highlights and proved to be an exceptional one for our shareholders. The successful listing of EFSC stock on the national NASDAQ was certainly one of those highlights. The NASDAQ listing and subsequent inclusion in the Russell Index a few months later were well received by the market, as our stock rose to a new all-time high of over $27.00 per share before ending the year at $22.68 – a 23% gain from 2004 and a 145% increase since mid-2002. We worked hard in 2005 to communicate our value proposition to a broader institutional investor market and to cultivate a following. Now, just 2 a year after our initial efforts, nearly 10% of our shares have found their way into selected institutional and mutual funds. This has helped to strengthen demand and liquidity in the stock, and by year end, EFSC was formally covered by three of the top analysts in the financial services industry. Two of those had strong buy ratings on our stock as we entered the new year and the third joined them in February of 2006. Growing our institutional shareholder base remains a priority for 2006 as it is our belief that institutions of the right type should own somewhere between 30% and 40% of our shares over the next few years. Of course, we appreciate the loyalty of all of our shareholders and are proud that most of those who originally invested with us remain happy owners. Another significant event in 2005 was the acquisition of the Millennium Brokerage Group, giving EFSC a widely admired national platform for life insurance distribution and related wealth management services. With thirteen offices doing business in forty-nine states, MBG is a highly respected brokerage and advisory organization in the life insurance industry. It is already contributing to our revenue and earnings growth rates and should allow us to market our trust and certain banking products through MBG’s powerful distribution channels. The deal itself has been structured to be very “shareholder friendly,” as one analyst put it, with EFSC entitled to a 23.1% preferred pre-tax return before any incremental 3 payouts to MBG principals. Under the leadership of Bill Zelenik and his fine team, we are positioning Millennium for further expansion. We intend to take advantage of the strong demand by life insurance carriers for high Critical to fulfilling our stated mission of “guiding our clients to a lifetime of success,” our bank-based relationship managers are now regularly and eagerly introducing their bank clients to our wealth management offerings. Our company and our clients benefit greatly from this level of integration and alignment. end, high volume, efficient distributors like Millennium while offering our direct clients the very best products available. While we are excited by the Millennium acquisition and what it can mean for our shareholders, we remain committed to strong organic growth, preferring to view growth through acquisitions as strictly optional for us. As I often say to our associates and investors, “Acquisitions should be frosting on a well baked cake.” We believe investors are more likely to reward organic growth over time as it is tougher to demonstrate and therefore more highly valued. The exceptional performance of our banking line of business in 2005 deserves special comment. Under the leadership of Peter Benoist, Steve Marsh, and their great banking management team, Enterprise crossed the billion dollar mark in loans for the first time, posting a 14% growth rate over 2004 in average loans outstanding. Impressive as this growth was in an exceedingly competitive market, asset quality was simply extraordinary, with charge-offs totaling only two basis points for the year. A major competitive advantage for our company is our core deposit base and its growth was also outstanding. Jim Wagner and his team have made a real impact in this key funding source. Deposits grew by $177 million (19% for the year) and, even more impressive, we were able to maintain our enviable core base with 21% of our total deposits in the noninterest 4 bearing category. With numbers like these, it is easy to understand why our banking organization is so highly regarded. Equally exciting for 2005 was the performance of our Wealth Management business segment. Our Trust and Wealth Products groups continue to offer a unique value proposition which has proven very attractive to our clients. The expansion to Kansas City paid off handsomely even as our St. Louis business continued its rapid growth. Total Wealth Management income increased by 53% to $6.5 million and resulted in a 62% increase in pre-tax earnings to $1.1 million. Paul Vogel, Matt Wagner, Steve Ray, Michael Weisman and their teams performed admirably. They have delivered on the strategic imperative of making this line of business a significant differentiator and a major contributor to earnings. Critical to fulfilling our stated mission of “guiding our clients to a lifetime of success,” our bank-based relationship managers are now regularly and eagerly introducing their bank clients to our wealth management offerings. Our company and our clients benefit greatly from this level of integration and alignment. The addition of Millennium to the wholesale sector of our Wealth Management segment promises to further accelerate growth and earnings in the years ahead. “It is very gratifying to be realizing our vision of becoming one of the very highest performing growth organizations in the financial services industry.” 5 In reflecting on 2005, I would especially like to acknowledge the members of our Boards and the truly fine support they offer management in representing your interests. We were sorry that our Chairman of the past five years, Paul J. McKee, Jr., chose to retire from this role, as he has presided over some of the most momentous years in the history of our relatively young company. Paul has been a great friend, partner and mentor and will be missed in that capacity, although he remains an ardent supporter of our company and what it stands for. The Board’s decision to appoint Peter Benoist to an inside chairmanship and Jim Murphy to the new role of Lead Director has been very well received. I – and Enterprise – have always benefited from a partnership at the top, As Enterprise executives and spouses look on, CEO Kevin C. Eichner signs in to celebrate the first anniversary of EFSC’s listing on the NASDAQ as part of the “Closing Bell” ceremony on February 6, 2006 in New York City. and this certainly continues with the new configuration. Peter and Jim enjoy wonderful reputations and we are very fortunate to have them in these key roles. In closing, I am proud of our progress as reflected in our 2005 business outcomes, and remain very excited about our future prospects. Clearly, we have the talent, strength and passion to continue to make EFSC one of the great emerging growth stories in our industry. Sincerely, Kevin C. Eichner President & CEO SENIOR MANAGEMENT Kevin C. Eichner President and CEO, Enterprise Financial Services Corp Peter F. Benoist Chairman and CEO, Enterprise Bank & Trust Deborah N.Barstow Senior Vice President and Controller, Enterprise Financial Services Corp Joseph J. Feld Senior Vice President, Information Technology and Deposit Processing Scott R. Goodman President, Enterprise Bank & Trust, Clayton James E. Graser President, Enterprise Bank & Trust, Sunset Hills Linda M. Hanson President, Enterprise Bank & Trust, Kansas City Region Craig G. Huston President, Enterprise Bank & Trust, Overland Park Timothy P. Kelley Senior Vice President, Business Continuity Planning and Facilities Richard C. Leuck President, Enterprise Bank & Trust, St. Charles County Jack A. Mannebach Senior Vice President, Commercial Lending Stephen P. Marsh President, Enterprise Bank & Trust, and Senior Credit Officer Jerry M. Mueller Senior Vice President, Marketing Mark G. Murtha Senior Vice President, Human Resources Robert L. Owens President, Enterprise Bank & Trust, Plaza Steven L. Ray President, Trust Fiduciary Enterprise Trust Frank H.Sanfilippo Executive Vice President, Chief Financial Officer, Enterprise Financial Services Corp Jack L. Sutherland Chairman, Kansas City Regional Board of Directors Paul L. Vogel President and CEO, Enterprise Trust James C. Wagner Executive Vice President, Enterprise Financial Services Corp Matthew A.Wagner President, Kansas City Trust Advisory Michael S.Weisman President, Wealth Products Group William L. Zelenik CEO, Millennium Brokerage Group MILLENNIUM BROKERAGE GROUP Home Office Nashville, Tennessee 615-259-9355 Little Rock, Arkansas 501-221-6052 Pasadena, California 626-844-1414 Santa Ana, California 714-564-1012 Littleton, Colorado 303-948-2317 Wheaton, Illinois 630-668-8925 Overland Park, Kansas 913-814-9799 St. Charles, Missouri 636-447-6865 Islandia, New York 631-582-9201 Strongsville, Ohio 440-572-1175 Knoxville, Tennessee 865-558-1779 Dallas, Texas 214-575-2272 Lubbock, Texas 806-796-3472 Shareholders are invited to address issues, questions or concerns to the Enterprise Investor Relations Dept., c/o Frank Sanfilippo, Executive Vice President and Chief Financial Officer at 314-512-7214, fsanfilippo@enterprisebank.com, 150 N. Meramec, Suite 300, Clayton, MO 63105. Shareholders can get share prices, volumes, insider trading information, and other valuable facts online at ww w.enterprisebank.com by clicking on the Investor Relations tab on the Enterprise home page or www.Nasdaq.com by entering the company’s trading symbol “EFSC” and following the prescribed protocol. The Investor Relations Department stands ready to be of assistance in any way. Readers should note that in addition to the historical information contained herein, this 2005 Annual Report 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, burdens imposed by federal and state regulations of banks, credit risk, exposure to local economic conditions, risks associated with rapid increase or decrease in prevailing interest rates and competition from banks and other financial institutions, as well as those discussed in the Company’s Annual Report on Form 10-K. CORPORATE HEADQUARTERS Enterprise Financial Services Corp 150 North Meramec, Suite 300 Clayton, Missouri 63105 314-725-5500 Toll-free: 800-396-8141 ST. LOUIS REGION Clayton 150 North Meramec Clayton, Missouri 63105 314-725-5500 St. Peters 300 St. Peters Centre Boulevard St. Peters, Missouri 63376 636-926-3900 St. Charles 1001 First Capitol Drive St. Charles, Missouri 63301 636-946-6006 Sunset Hills 3890 South Lindbergh Boulevard St. Louis, Missouri 63127 314-849-7500 KANSAS CITY REGION Overland Park 12695 Metcalf Avenue Overland Park, Kansas 66213 913-663-5525 Plaza 444 West 47th Street Kansas City, Missouri 64112 816-531-5353 ENTERPRISE OPERATIONS CENTER 1281 North Warson Road St. Louis, Missouri 63132 314-993-6200 Toll-Free 800-438-0378