Item 1.01 Entry into Material Definitive Agreement.

          On March 22, 2006, Enterprise Financial Services Corp (“Enterprise”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with NorthStar Bancshares, Inc. (“NorthStar”), NorthStar Bank N.A. (“Bank”), Leland M. Walker, as representative of the sellers (“Seller Representative”), and Igloo Acquisition, Inc., a direct wholly-owned subsidiary of Enterprise (“Acquisition”).

          In accordance with the terms and subject to the conditions of the Merger Agreement, NorthStar will merge with and into Acquisition.  The NorthStar shareholders (“Sellers”) will receive cash and shares of Enterprise common stock. The aggregate consideration for the acquisition of NorthStar is $36,000,000.00 payable (i) in cash to NorthStar in an amount necessary to purchase certain employee stock options whose holders elect to take cash in an amount equal to $27.50 per share, less the option exercise price; (ii) in cash to Sellers who own less than 1,000 NorthStar shares; and (iii) in cash and Enterprise common stock to Sellers who own 1,000 or more NorthStar shares.  

          The number of shares of Enterprise common stock to be issued will be adjusted based on the Market Price (average stock price during the twenty (20) trading days ending two (2) days before closing), at fixed prices of $23.40, $28.60 or the Market Price, if the Market Price is in the $20.80 to $31.20 range, or at the Market Price plus or minus $2.60 if the Market Price is outside of that range.  Sellers owning 1,000 shares or more of NorthStar stock will receive a portion of their purchase price (80%) in stock and the remainder (20%) in cash, provided that if the Market Price falls below $20.80, Enterprise may elect to reduce the percentage of total stock issued to no less than 50% of the total purchase price.  Enterprise will have a right of first refusal to repurchase any of its common stock proposed to be sold by Sellers during the first two years after closing at the then-current market price.

          NorthStar and the Bank have made customary representations and warranties to Enterprise in the Merger Agreement, and the Merger Agreement also contains customary conditions to closing.

Each Seller will contribute his/her/its proportionate share to the escrow funds, with all cash deposited for Sellers receiving all cash in the merger, and all stock deposited for Sellers who receive cash and stock in the merger.

          At the closing, Enterprise also will enter into employment agreements (the “Employment Agreements”) with Leland Walker, Robert Barker, and Michael Bartkoski.  Enterprise will also enter into nonsolicitation agreements (the “Nonsolicitation Agreements”) with each of the directors of NorthStar restricting solicitation of NorthStar employees and customers for two years.  

          The foregoing descriptions of the Merger Agreement, the merger and the ancillary documents contemplated by the Merger Agreement are qualified in their entirety by reference to the Merger Agreement, and the forms of Employment Agreements, Nonsolicitation Agreement, and Escrow Agreement, copies of which are attached as Exhibits 2.1, 10.1, 10.2, and 10.3 respectively, and incorporated herein by reference.

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