Continued Growth in our National Platforms
Drives Industry Leading Performance Metrics
JERICHO,
N.Y., April 25, 2024 /PRNewswire/ -- Esquire
Financial Holdings, Inc. (NASDAQ: ESQ) (the "Company"), the
financial holding company for Esquire Bank, National Association
("Esquire Bank" or the "Bank"), (collectively "Esquire") today
announced its operating results for the first quarter of 2024.
Significant achievements and key performance metrics during the
current quarter include:
- On a linked quarter basis, net income totaled $10.1 million, or $1.20 per diluted share, as compared to
$9.9 million, or $1.18 per diluted share, despite our continued
investment in people and future growth in the current quarter. For
the first quarter 2023, net income totaled $12.2 million, or $1.47 per diluted share, while
adjusted(1) net income and diluted earnings per share
for the same period were $9.2 million
and $1.11, excluding a $4.0 million pre-tax gain on the partial sale of
our fintech investment.
- Industry leading and consistent returns on average assets and
equity of 2.59% and 20.14% for the current quarter, respectively,
as compared to 2.59% and 20.78% on a linked quarter basis. These
returns were fueled by the continued expansion of our total revenue
base to $29.3 million, led by a
strong net interest margin of 6.06% as well as stable fee-based
income.
- Loan growth on a linked quarter basis was $20.8 million, or 7% annualized, totaling
$1.23 billion and was comprised of
higher yielding variable rate commercial loans from our national
litigation platform. These commercial loans have and will continue
to create additional opportunities for full commercial relationship
banking (commercial deposits) through our branchless commercial
cash management platform. As anticipated, commercial loan growth
was tempered in the first quarter by paydowns of elevated net draws
in the fourth quarter 2023 as well as our decision to proactively
moderate multifamily and commercial real estate loan growth due to
the current economic and short-term interest rate environment.
- Solid credit metrics, asset quality, and reserve coverage
ratios with a 1.43% allowance for credit losses to loans ratio and
nonperforming loan to total assets ratio of 0.66%, represented by
one multifamily loan totaling $10.9
million. Within our commercial real estate portfolio, we
have no exposure to commercial office space, no construction loans,
and $15.3 million in performing loans
to the hospitality industry.
- Continued deposit growth totaling $26.8
million, or 8% annualized, on a linked quarter basis to
$1.43 billion, comprised of core
low-cost commercial relationship deposits with a cost-of-funds of
0.96% (including demand deposits). Off-balance sheet sweep funds
totaled $466.6 million at quarter
end, with approximately 62% available for additional on-balance
sheet liquidity, while the associated administrative service
payments ("ASP") fee income totaled $746
thousand for the current quarter. Additional available
liquidity totaled approximately $647
million (secured FHLB and FRB borrowing capacity plus
available on-balance sheet sweep liquidity), excluding cash &
cash equivalents and any unsecured borrowings capacity.
- Stable and consistent fee income totaling $6.4 million or 22% of total revenue, led by our
payment processing platform with 85,000 small business clients
nationally. Our technology enabled payments platform facilitated
the processing of $8.6 billion in
credit and debit card payment volume across 150.5 million
transactions for our clients in the current quarter.
- Strong efficiency ratio of 49.8% notwithstanding our
investments in resources to support future growth and excellence in
client service.
- Our consistent industry leading performance and growth has led
to an increase in our regular quarterly cash dividends to
$0.15 per share of common stock, or
12.5% of earnings per diluted share.
- In January 2024, the Company
announced that it closed on a committed investment of $6 million (representing 24.99% ownership
interest) in United Payment Systems, LLC (doing business as
Payzli), an end-to-end payment technology company that acts as a
single source for payment services, business management software,
web enablement and mobile solutions.
- On February 28, 2024, the Company
announced plans to establish a branch in Los Angeles, California, underscoring the
strength of this market for both national verticals and our
commitment to future growth. As of the date of this release, the
Company has received regulatory approval to establish the
branch.
- Strong capital foundation with common equity tier 1 ("CET1")
and tangible common equity to tangible asset(1)
("TCE/TA") ratios of 14.41% and 12.52%, respectively. Including the
after tax unrealized losses on both the available-for-sale and
held-to-maturity securities portfolios of $14.4 million and $6.0
million, respectively, the adjusted(1) CET1 and
adjusted(1) TCE/TA ratios were 12.88% and 12.16%,
respectively. Esquire Bank remains well above the bank regulatory
"Well Capitalized" standards.
(1) See non-GAAP
reconciliation provided at the end of this news release.
"We have always believed that a strong and fortified balance
sheet anchored by outstanding client relationships will
consistently generate long term growth, industry leading
performance metrics, and continued success into the future," stated
Tony Coelho, Chairman of the Board.
"Our strong credit culture, underwriting, and robust risk
management coupled with our ability to generate and retain
significant capital from earnings will allow us to continue to grow
in a safe and sound manner."
"In light of the current economic and interest rate environment
surrounding multifamily and commercial real estate, we have
tempered our short-term growth targets in these asset classes for
the foreseeable future," stated Andrew C.
Sagliocca, Vice Chairman, CEO, and President. "This
short-term decision does not impact our view on growth and earnings
for 2024 but only impacts the composition of our assets and
earnings. Finally, we believe the NY Metro real estate market
sentiment, and more specifically multifamily housing, will
stabilize as inflation slows and the Federal Reserve moderates its
views on short-term rates."
(1) See non-GAAP
reconciliation provided at the end of this news release.
First Quarter Earnings
Net income for the quarter ended March
31, 2024 was $10.1 million, or
$1.20 per diluted share, compared to
$12.2 million, or $1.47 per diluted share for the same period in
2023. Returns on average assets and equity for the current quarter
were 2.59% and 20.14%, respectively, compared to 3.68% and 30.45%
for the same period of 2023. Excluding the pretax gain of
$4.0 million ($3.0 million after-tax or $0.36 per diluted share) on the partial sale of
our Litify fintech investment, adjusted(1) net income,
diluted earnings per share, return on average assets, and return on
average common equity for the quarter ended March 31, 2023 was $9.2
million, $1.11, 2.79% and
23.10%, respectively.
Net interest income for the first quarter of 2024 increased
$3.6 million, or 18.5%, to
$22.9 million, due to growth in
average interest earning assets (funded with core deposits)
totaling $218.0 million, or 16.8%, to
$1.52 billion as well as a modest
increase in our net interest margin to 6.06% when compared to the
same period in 2023. Our net interest margin was positively
impacted by growth in higher yielding variable rate commercial
loans. The average yield on loans increased 28 basis points to
7.78%, primarily driven by growth in higher yielding variable rate
commercial loans. Average loans in the quarter increased
$256.5 million, or 26.9%, to
$1.21 billion when compared to the
first quarter of 2023, primarily due to growth in our national
commercial lending platform and, to a lesser extent, our regional
multi-family real estate loan portfolio. Loan income increased
$5.8 million, or 32.8%, to
$23.4 million with the increases in
average loan balances (primarily commercial) accounting for
$5.2 million of the increase and
$600 thousand representing increases
in average rate. Our loan-to-deposit ratio was 85.6% as our
low-cost deposit base increased $169.7
million, or 13.4%, primarily due to growth in our longer
duration escrow (interest on lawyer trust accounts or "IOLTA")
deposit banking relationships. Our deposit cost-of-funds, excluding
demand deposits, increased 82 basis points in the current quarter
when compared to 2023 due to increases in short-term interest rates
as well as management pro-actively increasing rates on IOLTA
accounts in the various states where we operate. Deposit expense
increased $2.1 million to
$3.2 million with increases in
average rate (primarily core IOLTA relationship deposits)
accounting for $1.4 million of the
increase and increases related to average deposit balances
accounting for $707 thousand
(primarily core relationship money market deposits) of the
increase. Average securities in the quarter increased $17.4 million to $226.2
million and yields increased 61 basis points to 2.85%,
primarily due to reinvestment of portfolio cash flows into
securities at current market rates. The movement in short-term
interest rates increased yields and interest income on our interest
earning cash balances.
The provision for credit losses was $1.0
million for the first quarter of 2024, a $500 thousand increase from the first quarter
2023 provision. As of March 31, 2024,
our allowance to loans ratio was 1.43% as compared to 1.34% as of
March 31, 2023. The increase in the
allowance as a percentage of loans was general reserve driven
considering loan growth and qualitative factors associated with the
current uncertain economic environment including, but not limited
to, its potential impact on the New
York metro commercial real estate market.
Noninterest income totaled $6.4
million for the first quarter of 2024 as compared to
$10.3 million in the same period for
2023. Excluding the $4.0 million gain
on our Litify fintech investment, adjusted(1)
noninterest income in the first quarter of 2023 was $6.3 million. Payment processing income was
$5.3 million for the first quarter of
2024, a $217 thousand decrease from
the same period in 2023, primarily due to the anticipated ISO
customer turnover and changes in our overall merchant risk profile.
Payment processing volumes and transactions for the credit and
debit card processing platform increased $937 million, or 12.2%, to $8.6 billion and 7.6 million, or 5.3%, to 150.5
million transactions, respectively, for the current quarter, as
compared to the same period in 2023. These increases were due to
the expansion of sales channels through ISOs, an increased number
of merchants, volume increases, and were facilitated by our focus
on technology and other resources in the payments vertical. The
Company utilizes proprietary and industry leading technology to
ensure card brand and regulatory compliance, support multiple
processing platforms, manage daily risk across 85,000 small
business merchants in all 50 states, and perform commercial
treasury clearing services. ASP fee income increased $217 thousand to $746
thousand for the first quarter of 2024. ASP fee income is
directly impacted by the average balances of off-balance sheet
sweep funds as well as current short-term market interest rates.
Other noninterest income increased $155
thousand to $348 thousand when
compared to the comparable prior year quarter primarily due to
increases in loan fees.
Noninterest expense increased $2.1
million, or 16.7%, to $14.6
million for the first quarter of 2024, as compared to the
same period in 2023. This increase was primarily due to increases
in employee compensation and benefits, data processing, advertising
and marketing, and travel and business relations, partially offset
by decreases in professional services costs. Employee compensation
and benefits costs increased $1.7
million, or 22.4%, due to increases in employees to support
growth and excellence in client service as well as the impact of
year end salary, bonus and stock-based compensation increases. Our
overall staffing levels increased by 21 employees, or 18%,
year-over-year to 139 full time equivalents as of March 31, 2024, primarily from our hiring of six
regional managing directors/senior BDOs, resources within our
commercial underwriting/lending area, sales support staff,
operational staff to support Esquire's growth plans as well as our
risk management and compliance areas, and our new chief legal
officer throughout 2023. Data processing costs increased
$378 thousand due to increased
processing volume, primarily driven by our core banking platform,
and additional costs related to our technology implementations.
Advertising and marketing costs increased $443 thousand as we continued to grow our digital
marketing platform, expand our thought leadership in our national
verticals, and support our new regional BDOs.
(1) See non-GAAP
reconciliation provided at the end of this news release.
Travel and business relations costs increased $130 thousand, as a result of our high touch
marketing and sales efforts which complement our digital marketing
efforts and additional travel related to our newly hired regional
BDOs. Professional services costs decreased $592 thousand due to the costs associated with a
global executive search firm in 2023. Our investment in current
resources (people, technology, and digital marketing) should
continue to support our long-term growth goals.
The Company's efficiency ratio was 49.8% for the three months
ended March 31, 2024, as compared to
42.2% in 2023. The adjusted(1) efficiency ratio was
48.9% for the three months ended March 31,
2023, excluding the aforementioned $4.0 million pre-tax gain. Our strong efficiency
ratio is a result of our continued revenue growth driven by our
core national platforms. These platforms have benefited from our
investments in technology, digital marketing, employees, and other
branchless infrastructure that support our industry leading
returns.
The effective tax rate was 26.5% for the first quarter of 2024,
consistent with the first quarter of 2023.
Asset Quality
At March 31, 2024, we had one
nonperforming loan totaling $10.9
million and no exposure to commercial office space, no
construction loans, and only $15.3
million in performing loans to the hospitality industry. The
allowance for credit losses was $17.5
million, or 1.43% of total loans, as compared to
$13.0 million, or 1.34% of total
loans at March 31, 2023. The ratio of
nonperforming loans to total loans and total assets was 0.89% and
0.66%, respectively. The allowance for credit losses to the
nonperforming loans was 160%. The increase in the allowance as a
percentage of loans was general reserve driven considering loan
growth and qualitative factors associated with the current
uncertain economic environment including, but not limited to, its
potential impact on the New York
Metro commercial real estate market.
Due to increases in short-term interest rates associated with
the current inflationary environment since 2022, management
enhanced its ongoing credit risk management including risk
management of its commercial real estate loan portfolio. The
following is a brief summary of our ongoing risk management for our
multifamily and CRE portfolios as of March
31, 2024:
- The multifamily portfolio, totaling $348.7 million, has a current weighted average
DSCR and an original LTV (defined as unpaid principal balance as of
March 31, 2024 divided by appraised
value at origination) of approximately 1.67 and 54%, respectively,
and the CRE portfolio, totaling $89.0
million, has a current weighted average DSCR and an original
LTV of approximately 1.61 and 60%, respectively.
- Multifamily loans maturing in less than one year totaled
$36.7 million and had a current
weighted average DSCR and an original LTV of approximately 1.49 and
57%, respectively. CRE loans maturing in less than one year totaled
$5.5 million and had a current
weighted average DSCR and an original LTV of approximately 3.79 and
52%, respectively.
- Multifamily loans maturing in one to two years totaled
$39.0 million and had a current
weighted average DSCR and an original LTV of approximately 1.36 and
56%, respectively. CRE loans maturing in one to two years totaled
$2.2 million and had a current
weighted average DSCR and an original LTV of approximately 1.57 and
61%, respectively.
Balance Sheet
At March 31, 2024, total assets
were $1.65 billion, reflecting a
$203.5 million, or 14.0% increase
from March 31, 2023. This increase
was primarily attributable to growth in loans totaling $262.6 million, or 27.2%, to $1.23 billion. Our higher yielding variable rate
commercial loans increased $188.4
million, or 33.3%, during this same period. Our commercial
relationship banking sales pipeline remains robust, anchored by our
national platforms and supported by our competitive advantages in
data, analytics and digital marketing. This coupled with our
regional BDOs and related support staff should continue to drive
growth across our national commercial platform. Our
available-for-sale securities portfolio increased $34.2 million to $142.2
million as compared to March 31,
2023. Our held-to-maturity securities portfolio totaled
$75.2 million, in line with
March 31, 2023. In the third quarter
of 2023, management elected to close out its reverse repurchase
agreements and reinvest these funds into higher yielding commercial
loans.
(1) See non-GAAP
reconciliation provided at the end of this news release.
The following table provides information regarding the
composition of our loan portfolio for the periods presented:
|
|
March 31,
|
|
|
December 31,
|
|
|
March 31,
|
|
|
|
2024
|
|
|
2023
|
|
|
2023
|
|
|
|
(Dollars in thousands)
|
|
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multifamily
|
|
$
|
348,666
|
|
28.4
|
%
|
|
$
|
348,241
|
|
28.8
|
%
|
|
$
|
274,656
|
|
28.4
|
%
|
Commercial real
estate
|
|
|
89,016
|
|
7.2
|
|
|
|
89,498
|
|
7.4
|
|
|
|
91,493
|
|
9.5
|
|
1 – 4 family
|
|
|
17,797
|
|
1.5
|
|
|
|
17,937
|
|
1.5
|
|
|
|
21,730
|
|
2.2
|
|
Total real
estate
|
|
|
455,479
|
|
37.1
|
|
|
|
455,676
|
|
37.7
|
|
|
|
387,879
|
|
40.1
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Litigation
related
|
|
|
634,430
|
|
51.6
|
|
|
|
612,457
|
|
50.7
|
|
|
|
476,888
|
|
49.3
|
|
Other
|
|
|
119,860
|
|
9.8
|
|
|
|
125,457
|
|
10.4
|
|
|
|
89,039
|
|
9.2
|
|
Total
commercial
|
|
|
754,290
|
|
61.4
|
|
|
|
737,914
|
|
61.1
|
|
|
|
565,927
|
|
58.5
|
|
Consumer
|
|
|
18,953
|
|
1.5
|
|
|
|
14,491
|
|
1.2
|
|
|
|
13,116
|
|
1.4
|
|
Total loans held for
investment
|
|
$
|
1,228,722
|
|
100.0
|
%
|
|
$
|
1,208,081
|
|
100.0
|
%
|
|
$
|
966,922
|
|
100.0
|
%
|
Deferred loan fees and
unearned
premiums, net
|
|
|
(480)
|
|
|
|
|
|
(668)
|
|
|
|
|
|
(1,292)
|
|
|
|
Loans, held for
investment
|
|
$
|
1,228,242
|
|
|
|
|
$
|
1,207,413
|
|
|
|
|
$
|
965,630
|
|
|
|
Total deposits were $1.43
billion as of March 31, 2024,
a $169.7 million, or 13.4%, increase
from March 31, 2023. This was
primarily due to a $237.5 million, or
33.5%, increase in Savings, NOW and Money Market deposits, driven
primarily by our IOLTA and other escrow deposits and, to a lesser
extent, our commercial relationship money market deposits
(primarily our mass tort/class action funds), offset by a
$75.9 million, or 13.8%, decrease in
demand deposits. Our deposit strategy primarily focuses on
developing full service commercial banking relationships with our
clients through lending facilities, payment processing, and other
unique commercial cash management services in our two national
verticals, rather than competing with other institutions on rate.
Our longer duration IOLTA, escrow and claimant trust settlement
deposits represent $709.5 million, or
49.5%, of total deposits. As of March 31,
2024, uninsured deposits were $369.4
million, or 26%, of our total deposits of $1.43 billion, excluding $10.6 million of affiliate deposits held by the
Bank. Approximately 80% of our uninsured deposits represent clients
with full relationship banking (loans, payment processing, and
other service-oriented relationships) including, but not limited
to, law firm operating accounts, law firm IOLTA/escrow accounts,
merchant reserves, ISO reserves, ACH processing, and custodial
accounts.
Due to the nature of our larger mass tort and class action
settlements related to the litigation vertical, we participate in
FDIC insured sweep programs as well as treasury secured money
market funds. As of March 31, 2024,
off-balance sheet sweep funds totaled approximately $466.6 million, of which approximately
$290.9 million, or 62.3%, was
available to be swept onto our balance sheet as reciprocal client
relationship deposits. Our deposit growth and off-balance sheet
funds continue to demonstrate our highly efficient branchless and
technology enabled deposit platforms.
At March 31, 2024, we had the
ability to borrow up to $300.1 million from the FHLB of New York and $55.9
million from the FRB of New York discount
window. No borrowing amounts were outstanding during the first
quarter of 2024. Historically, we have not leveraged our balance
sheet to generate earnings and have always utilized core client
deposits to fund our asset growth and related earnings.
Stockholders' equity increased $36.3
million to $207.1 million as
of March 31, 2024, when compared to
March 31, 2023, primarily from
increases in retained earnings.
Esquire Bank remains well above bank regulatory "Well
Capitalized" standards.
About Esquire Financial Holdings,
Inc.
Esquire Financial Holdings, Inc. is a financial holding company
headquartered in Jericho, New
York, with one branch office in Jericho, New York and an administrative office
in Boca Raton, Florida. Its
wholly-owned subsidiary, Esquire Bank, National Association, is a
full-service commercial bank dedicated to serving the financial
needs of the litigation industry and small businesses nationally,
as well as commercial and retail clients in the New York metropolitan area. The Bank offers
tailored financial and payment processing solutions to the
litigation community and their clients as well as dynamic and
flexible payment processing solutions to small business owners. For
more information, visit www.esquirebank.com.
Cautionary Note Regarding
Forward-Looking Statements
This press release includes "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995
relating to future results of the Company. Forward-looking
statements are subject to many risks and uncertainties, including,
but not limited to: changes in business plans as circumstances
warrant; changes in general economic, business and political
conditions, including changes in the financial markets; and other
risks detailed in the "Cautionary Note Regarding Forward-Looking
Statements," "Risk Factors" and other sections of the Company's
Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as
filed with the Securities and Exchange Commission. The
forward-looking statements included in this press release are not a
guarantee of future events, and that actual events may differ
materially from those made in or suggested by the forward-looking
statements. Forward-looking statements generally can be identified
by the use of forward-looking terminology such as "may," "might,"
"should," "could," "predict," "potential," "believe," "expect,"
"attribute," "continue," "will," "anticipate," "seek," "estimate,"
"intend," "plan," "projection," "goal," "target," "outlook," "aim,"
"would," "annualized" and "outlook," or similar terminology. Any
forward-looking statements presented herein are made only as of the
date of this press release, and the Company does not undertake any
obligation to update or revise any forward-looking statements to
reflect changes in assumptions, the occurrence of unanticipated
events, or otherwise, except as may be required by law.
ESQUIRE FINANCIAL
HOLDINGS, INC.
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Statement of Condition (unaudited)
|
|
|
|
|
|
|
|
|
|
|
(dollars in
thousands except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
|
|
2024
|
|
2023
|
|
2023
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
158,243
|
|
$
|
165,209
|
|
$
|
203,799
|
|
Securities purchased
under agreements to resell, at cost
|
|
|
—
|
|
|
—
|
|
|
49,230
|
|
Securities
available-for-sale, at fair value
|
|
|
142,159
|
|
|
122,107
|
|
|
107,936
|
|
Securities
held-to-maturity, at cost
|
|
|
75,242
|
|
|
77,001
|
|
|
76,931
|
|
Securities, restricted
at cost
|
|
|
2,928
|
|
|
2,928
|
|
|
2,810
|
|
Loans, held for
investment
|
|
|
1,228,242
|
|
|
1,207,413
|
|
|
965,630
|
|
Less: allowance for
credit losses
|
|
|
(17,523)
|
|
|
(16,631)
|
|
|
(12,952)
|
|
Loans, net of
allowance
|
|
|
1,210,719
|
|
|
1,190,782
|
|
|
952,678
|
|
Premises and equipment,
net
|
|
|
2,661
|
|
|
2,602
|
|
|
2,593
|
|
Other assets
|
|
|
62,329
|
|
|
56,247
|
|
|
54,847
|
|
Total Assets
|
|
$
|
1,654,281
|
|
$
|
1,616,876
|
|
$
|
1,450,824
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
|
Demand
deposits
|
|
$
|
472,616
|
|
$
|
473,274
|
|
$
|
548,509
|
|
Savings, NOW and money
market deposits
|
|
|
947,055
|
|
|
926,264
|
|
|
709,511
|
|
Certificates of
deposit
|
|
|
14,378
|
|
|
7,761
|
|
|
6,352
|
|
Total
deposits
|
|
|
1,434,049
|
|
|
1,407,299
|
|
|
1,264,372
|
|
Other
liabilities
|
|
|
13,154
|
|
|
11,022
|
|
|
15,701
|
|
Total
liabilities
|
|
|
1,447,203
|
|
|
1,418,321
|
|
|
1,280,073
|
|
Total stockholders'
equity
|
|
|
207,078
|
|
|
198,555
|
|
|
170,751
|
|
Total Liabilities and Stockholders'
Equity
|
|
$
|
1,654,281
|
|
$
|
1,616,876
|
|
$
|
1,450,824
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Financial Data
|
|
|
|
|
|
|
|
|
|
|
Common shares
outstanding
|
|
|
8,292,789
|
|
|
8,287,848
|
|
|
8,190,758
|
|
Book value per
share
|
|
$
|
24.97
|
|
$
|
23.96
|
|
$
|
20.85
|
|
Equity to
assets
|
|
|
12.52
|
%
|
|
12.28
|
%
|
|
11.77
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Capital Ratios (1)
|
|
|
|
|
|
|
|
|
|
|
Tier 1 leverage
ratio
|
|
|
12.42
|
%
|
|
12.07
|
%
|
|
11.31
|
%
|
Common equity tier 1
capital ratio
|
|
|
14.41
|
|
|
14.13
|
|
|
14.89
|
|
Tier 1 capital
ratio
|
|
|
14.41
|
|
|
14.13
|
|
|
14.89
|
|
Total capital
ratio
|
|
|
15.66
|
|
|
15.38
|
|
|
16.14
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality
|
|
|
|
|
|
|
|
|
|
|
Nonperforming
loans
|
|
$
|
10,941
|
|
$
|
10,940
|
|
$
|
—
|
|
Allowance for credit
losses to total loans
|
|
|
1.43
|
%
|
|
1.38
|
%
|
|
1.34
|
%
|
Nonperforming loans to
total loans
|
|
|
0.89
|
|
|
0.91
|
|
|
0.00
|
|
Nonperforming assets to
total assets
|
|
|
0.66
|
|
|
0.68
|
|
|
0.00
|
|
Allowance to
nonperforming loans
|
|
|
160
|
|
|
152
|
|
|
NM
|
|
_________________
|
(1)
|
Regulatory capital
ratios presented on bank-only basis. The Bank has no recorded
intangible assets on the Statement of Financial Condition, so
accordingly, tangible common equity is equal to common
equity.
|
|
NM – Not
meaningful
|
ESQUIRE FINANCIAL
HOLDINGS, INC.
|
|
|
|
|
|
|
|
|
|
|
Consolidated Income
Statement (unaudited)
|
|
|
|
|
|
|
|
|
|
|
(dollars in
thousands except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
|
|
2024
|
|
2023
|
|
2023
|
|
Interest
income
|
|
$
|
26,073
|
|
$
|
25,567
|
|
$
|
20,365
|
|
Interest
expense
|
|
|
3,210
|
|
|
2,897
|
|
|
1,076
|
|
Net interest
income
|
|
|
22,863
|
|
|
22,670
|
|
|
19,289
|
|
Provision for credit
losses
|
|
|
1,000
|
|
|
1,500
|
|
|
500
|
|
Net interest income
after provision for credit losses
|
|
|
21,863
|
|
|
21,170
|
|
|
18,789
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
income:
|
|
|
|
|
|
|
|
|
|
|
Payment processing
fees
|
|
|
5,296
|
|
|
5,418
|
|
|
5,513
|
|
Gain on equity
investments
|
|
|
—
|
|
|
—
|
|
|
4,027
|
|
Other noninterest
income
|
|
|
1,093
|
|
|
848
|
|
|
722
|
|
Total noninterest
income
|
|
|
6,389
|
|
|
6,266
|
|
|
10,262
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
expense:
|
|
|
|
|
|
|
|
|
|
|
Employee compensation
and benefits
|
|
|
9,161
|
|
|
8,761
|
|
|
7,484
|
|
Other
expenses
|
|
|
5,407
|
|
|
5,140
|
|
|
4,997
|
|
Total noninterest
expense
|
|
|
14,568
|
|
|
13,901
|
|
|
12,481
|
|
Income before income
taxes
|
|
|
13,684
|
|
|
13,535
|
|
|
16,570
|
|
Income taxes
|
|
|
3,626
|
|
|
3,653
|
|
|
4,391
|
|
Net income
|
|
$
|
10,058
|
|
$
|
9,882
|
|
$
|
12,179
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.29
|
|
$
|
1.28
|
|
$
|
1.58
|
|
Diluted
|
|
|
1.20
|
|
|
1.18
|
|
|
1.47
|
|
Basic - adjusted
(1)
|
|
|
1.29
|
|
|
1.28
|
|
|
1.20
|
|
Diluted - adjusted
(1)
|
|
|
1.20
|
|
|
1.18
|
|
|
1.11
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Financial Data
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
|
2.59
|
%
|
|
2.59
|
%
|
|
3.68
|
%
|
Return on average
equity
|
|
|
20.14
|
|
|
20.78
|
|
|
30.45
|
|
Adjusted return on
average assets (1)
|
|
|
2.59
|
|
|
2.59
|
|
|
2.79
|
|
Adjusted return on
average equity (1)
|
|
|
20.14
|
|
|
20.78
|
|
|
23.10
|
|
Net interest
margin
|
|
|
6.06
|
|
|
6.12
|
|
|
6.03
|
|
Efficiency ratio
(1)
|
|
|
49.8
|
|
|
48.0
|
|
|
42.2
|
|
Adjusted efficiency
ratio (1)
|
|
|
49.8
|
|
|
48.0
|
|
|
48.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends paid per
common share
|
|
$
|
0.150
|
|
$
|
0.125
|
|
$
|
0.100
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average basic
shares
|
|
|
7,786,887
|
|
|
7,730,151
|
|
|
7,708,745
|
|
Weighted average
diluted shares
|
|
|
8,401,752
|
|
|
8,387,587
|
|
|
8,302,633
|
|
_________________
|
(1)
|
See
non-GAAP reconciliation provided elsewhere herein.
|
ESQUIRE FINANCIAL
HOLDINGS, INC.
|
|
Consolidated Average
Balance Sheets and Average Yield/Cost (unaudited)
|
|
(dollars in
thousands)
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
|
|
2024
|
|
2023
|
|
2023
|
|
|
|
Average
|
|
|
|
|
Average
|
|
Average
|
|
|
|
|
Average
|
|
Average
|
|
|
|
|
Average
|
|
|
|
Balance
|
|
Interest
|
|
Yield/Cost
|
|
Balance
|
|
Interest
|
|
Yield/Cost
|
|
Balance
|
|
Interest
|
|
Yield/Cost
|
|
INTEREST EARNING
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, held for
investment
|
|
$
|
1,208,429
|
|
$
|
23,389
|
|
7.78
|
%
|
$
|
1,169,411
|
|
$
|
23,028
|
|
7.81
|
%
|
$
|
951,925
|
|
$
|
17,615
|
|
7.50
|
%
|
Securities, includes
restricted stock
|
|
|
226,175
|
|
|
1,605
|
|
2.85
|
%
|
|
218,130
|
|
|
1,439
|
|
2.62
|
%
|
|
208,819
|
|
|
1,154
|
|
2.24
|
%
|
Securities purchased
under agreements to resell
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
49,405
|
|
|
653
|
|
5.36
|
%
|
Interest earning cash
and other
|
|
|
81,740
|
|
|
1,079
|
|
5.31
|
%
|
|
83,103
|
|
|
1,100
|
|
5.25
|
%
|
|
88,209
|
|
|
943
|
|
4.34
|
%
|
Total interest earning
assets
|
|
|
1,516,344
|
|
|
26,073
|
|
6.92
|
%
|
|
1,470,644
|
|
|
25,567
|
|
6.90
|
%
|
|
1,298,358
|
|
|
20,365
|
|
6.36
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST EARNING
ASSETS
|
|
|
48,602
|
|
|
|
|
|
|
|
44,805
|
|
|
|
|
|
|
|
44,186
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL AVERAGE
ASSETS
|
|
$
|
1,564,946
|
|
|
|
|
|
|
$
|
1,515,449
|
|
|
|
|
|
|
$
|
1,342,544
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST BEARING
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, Money
Market deposits
|
|
$
|
860,159
|
|
$
|
3,098
|
|
1.45
|
%
|
$
|
814,089
|
|
$
|
2,826
|
|
1.38
|
%
|
$
|
648,183
|
|
$
|
1,012
|
|
0.63
|
%
|
Time
deposits
|
|
|
11,041
|
|
|
111
|
|
4.04
|
%
|
|
8,366
|
|
|
70
|
|
3.32
|
%
|
|
9,424
|
|
|
63
|
|
2.71
|
%
|
Total interest bearing
deposits
|
|
|
871,200
|
|
|
3,209
|
|
1.48
|
%
|
|
822,455
|
|
|
2,896
|
|
1.40
|
%
|
|
657,607
|
|
|
1,075
|
|
0.66
|
%
|
Borrowings
|
|
|
45
|
|
|
1
|
|
8.94
|
%
|
|
45
|
|
|
1
|
|
8.82
|
%
|
|
47
|
|
|
1
|
|
8.63
|
%
|
Total interest bearing
liabilities
|
|
|
871,245
|
|
|
3,210
|
|
1.48
|
%
|
|
822,500
|
|
|
2,897
|
|
1.40
|
%
|
|
657,654
|
|
|
1,076
|
|
0.66
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST BEARING
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand
deposits
|
|
|
477,020
|
|
|
|
|
|
|
|
484,690
|
|
|
|
|
|
|
|
504,765
|
|
|
|
|
|
|
Other
liabilities
|
|
|
15,787
|
|
|
|
|
|
|
|
19,614
|
|
|
|
|
|
|
|
17,897
|
|
|
|
|
|
|
Total noninterest
bearing liabilities
|
|
|
492,807
|
|
|
|
|
|
|
|
504,304
|
|
|
|
|
|
|
|
522,662
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
200,894
|
|
|
|
|
|
|
|
188,645
|
|
|
|
|
|
|
|
162,228
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL AVG. LIABILITIES
AND EQUITY
|
|
$
|
1,564,946
|
|
|
|
|
|
|
$
|
1,515,449
|
|
|
|
|
|
|
$
|
1,342,544
|
|
|
|
|
|
|
Net interest
income
|
|
|
|
|
$
|
22,863
|
|
|
|
|
|
|
$
|
22,670
|
|
|
|
|
|
|
$
|
19,289
|
|
|
|
Net interest
spread
|
|
|
|
|
|
|
|
5.44
|
%
|
|
|
|
|
|
|
5.50
|
%
|
|
|
|
|
|
|
5.70
|
%
|
Net interest
margin
|
|
|
|
|
|
|
|
6.06
|
%
|
|
|
|
|
|
|
6.12
|
%
|
|
|
|
|
|
|
6.03
|
%
|
Deposits (including
noninterest bearing demand deposits)
|
|
$
|
1,348,220
|
|
$
|
3,209
|
|
0.96
|
%
|
$
|
1,307,145
|
|
$
|
2,896
|
|
0.88
|
%
|
$
|
1,162,372
|
|
$
|
1,075
|
|
0.37
|
%
|
ESQUIRE FINANCIAL HOLDINGS, INC.
Consolidated
Non-GAAP Financial Measure Reconciliation
(unaudited)
(all dollars in thousands except per share
data)
We believe that these non-GAAP financial measures provide
information that is important to investors and that is useful in
understanding our financial position, results and ratios. However,
these non-GAAP financial measures are supplemental and are not a
substitute for an analysis based on GAAP measures. As other
companies may use different calculations for this measure, this
presentation may not be comparable to other similarly titled
measures by other companies.
Adjusted net income, which is used to compute adjusted return on
average assets, adjusted return on average equity and adjusted
earnings per share, excludes the impact of the recognized gain, net
of tax, on the Company's equity investments.
|
Three Months Ended
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
|
2024
|
|
2023
|
|
2023
|
|
Net income –
GAAP
|
$
|
10,058
|
|
$
|
9,882
|
|
$
|
12,179
|
|
Less: gain
on equity investments
|
|
—
|
|
|
—
|
|
|
(4,027)
|
|
Add:
income tax impact
|
|
—
|
|
|
—
|
|
|
1,087
|
|
Adjusted net
income
|
$
|
10,058
|
|
$
|
9,882
|
|
$
|
9,239
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets – GAAP
|
|
2.59
|
%
|
|
2.59
|
%
|
|
3.68
|
%
|
Adjusted return on
average assets
|
|
2.59
|
%
|
|
2.59
|
%
|
|
2.79
|
%
|
|
|
|
|
|
|
|
|
|
|
Return on average
equity – GAAP
|
|
20.14
|
%
|
|
20.78
|
%
|
|
30.45
|
%
|
Adjusted return on
average equity
|
|
20.14
|
%
|
|
20.78
|
%
|
|
23.10
|
%
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share – GAAP
|
$
|
1.29
|
|
$
|
1.28
|
|
$
|
1.58
|
|
Adjusted basic earnings
per share
|
$
|
1.29
|
|
$
|
1.28
|
|
$
|
1.20
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share – GAAP
|
$
|
1.20
|
|
$
|
1.18
|
|
$
|
1.47
|
|
Adjusted diluted
earnings per share
|
$
|
1.20
|
|
$
|
1.18
|
|
$
|
1.11
|
|
The following table presents a reconciliation of efficiency
ratio (non-GAAP) and adjusted efficiency ratio (non-GAAP).
|
Three Months Ended
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
|
2024
|
|
2023
|
|
2023
|
|
Efficiency ratio –
non-GAAP(1)
|
|
49.8
|
%
|
|
48.0
|
%
|
|
42.2
|
%
|
Noninterest expense –
GAAP
|
$
|
14,568
|
|
$
|
13,901
|
|
$
|
12,481
|
|
Net interest income –
GAAP
|
|
22,863
|
|
|
22,670
|
|
|
19,289
|
|
Noninterest income –
GAAP
|
|
6,389
|
|
|
6,266
|
|
|
10,262
|
|
Less: gain
on equity investments
|
|
—
|
|
|
—
|
|
|
(4,027)
|
|
Adjusted noninterest
income – non-GAAP
|
$
|
6,389
|
|
$
|
6,266
|
|
$
|
6,235
|
|
Adjusted efficiency
ratio – non-GAAP(2)
|
|
49.8
|
%
|
|
48.0
|
%
|
|
48.9
|
%
|
(1)
|
The reported efficiency
ratio is a non-GAAP measure calculated by dividing
GAAP noninterest expense by the sum of GAAP net interest
income and GAAP noninterest income.
|
(2)
|
The adjusted efficiency
ratio is a non-GAAP measure calculated by dividing
GAAP noninterest expense by the sum of GAAP net interest
income and adjusted noninterest income.
|
The following table presents the adjusted tangible common equity
to tangible assets calculation (non-GAAP):
|
March 31,
|
|
|
2024
|
|
Total assets -
GAAP
|
$
|
1,654,281
|
|
Less: intangible
assets
|
|
—
|
|
Tangible assets ("TA")
- non-GAAP
|
|
1,654,281
|
|
|
|
|
|
Total stockholders'
equity - GAAP
|
$
|
207,078
|
|
Less:
intangible assets
|
|
—
|
|
Less:
preferred stock
|
|
—
|
|
Tangible common equity
("TCE") - non-GAAP
|
|
207,078
|
|
Add: unrecognized
losses on securities held-to-maturity, net of tax
|
|
(5,999)
|
|
Adjusted TCE -
non-GAAP
|
$
|
201,079
|
|
|
|
|
|
Stockholders' equity to
assets - GAAP
|
|
12.52
|
%
|
TCE to TA -
non-GAAP
|
|
12.52
|
%
|
Adjusted TCE to TA -
non-GAAP
|
|
12.16
|
%
|
The following table presents the common equity tier 1 capital
ratio and the adjusted common equity tier 1 capital ratio:
|
|
|
|
|
March 31,
|
|
|
2024
|
|
Common equity tier 1
("CET1") capital - Bank
|
$
|
191,944
|
|
Add: unrealized losses
on securities available-for-sale , net of tax
|
|
(14,369)
|
|
Add: unrecognized
losses on securities held-to-maturity, net of tax
|
|
(5,999)
|
|
Adjusted CET1 capital -
Bank
|
$
|
171,576
|
|
|
|
|
|
Total risk-weighted
assets - Bank
|
$
|
1,332,002
|
|
|
|
|
|
CET1 capital
ratio(1)
|
|
14.41
|
%
|
Adjusted CET1 capital
ratio(1)
|
|
12.88
|
%
|
(1)
|
Regulatory capital
ratios presented on bank-only basis. The Bank has no recorded
intangible assets on the Statement of Financial Condition, and
accordingly, tangible common equity is equal to common
equity.
|
View original
content:https://www.prnewswire.com/news-releases/esquire-financial-holdings-inc-reports-first-quarter-2024-results-302127490.html
SOURCE Esquire Financial Holdings, Inc.