National Litigation Platform Continues to
Drive Strong Growth and Industry Leading Returns
JERICHO,
N.Y., July 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 second quarter and year to
date of 2024.
"In 2024, our focus on creating long-term stakeholder value
continued as growth in low-cost core deposits from our national
litigation platform was invested in higher yielding variable rate
commercial loans and short-term agency mortgage-backed securities
at the current peak in interest rates. As part of our ALCO process,
management proactively increased the investment portfolio to
approximately 15% of total assets (as compared to 12.5% at
year-end), while simultaneously moderating multifamily and
commercial real estate growth in 2024 due to the current economic
and interest rate environment," stated Andrew C. Sagliocca, Vice Chairman, CEO, and
President. "As a result of these actions, interest earning assets,
excluding cash and cash equivalents, increased $65.4 million, or 18% annualized, on a linked
quarter basis and $104.5 million, or
15% annualized, from year-end 2023 while our net interest margin
increased to 6.19% for the current quarter."
Significant achievements and key performance metrics during the
current quarter and year to date of 2024 include:
- On a linked quarter basis, net income increased $429 thousand or 4.3% to $10.5 million, or $1.25 per diluted share, as compared to
$10.1 million, or $1.20 per diluted share. Net income increased
$1.4 million or 15.1% from
$9.1 million in the second quarter
2023, or $1.10 per diluted share.
- Consistent industry leading returns on average assets and
equity of 2.58% and 20.16% for the current quarter, respectively,
as compared to 2.59% and 20.14% on a linked quarter basis despite
our continued investment in current resources for future growth.
These returns were fueled by the continued expansion of our total
revenue base to $30.6 million in the
current quarter, led by a strong net interest margin of 6.19%
(fueled by low-cost core deposit growth) as well as stable
fee-based income.
- Total loan growth on a linked quarter basis was $32.8 million, or 11% annualized, totaling
$1.26 billion and was driven by a
$32.3 million or a 17% annualized
increase in higher yielding variable rate commercial loans
nationally. These commercial loans, primarily to law firms, have
and will continue to create additional opportunities for continued
core deposit growth (noninterest bearing operating or DDA and
escrow or IOLTA accounts) through our full commercial relationship
banking programs and our branchless commercial cash management
platform.
- Interest earning asset growth, excluding cash and cash
equivalents, was $65.4 million, or
18% annualized, on a linked quarter basis and totaled $1.51 billion. In 2024, management elected to
temper multifamily and commercial real estate loan growth in
response to the current economic environment and instead purchase
agency mortgage-backed securities with commensurate risk adjusted
yields, improving our liquidity ratios as well as increasing the
securities to total assets ratio to approximately 15%.
- Solid credit metrics, asset quality, and reserve coverage
ratios with a 1.47% allowance for credit losses to loans ratio and
nonperforming loan to total assets ratio of 0.64%, represented by
one multifamily loan totaling $10.9
million. We have no exposure to commercial office space, no
construction loans, and only $15.0
million in performing loans to the hospitality industry.
- Continued deposit growth totaling $52.8
million, or 15% annualized, on a linked quarter basis to
$1.49 billion, comprised of core
low-cost commercial relationship deposits with a cost-of-funds of
0.87% (including demand deposits). Off-balance sheet sweep funds
totaled $408.0 million at quarter
end, with approximately 67% available for additional on-balance
sheet liquidity, while the associated administrative service
payments ("ASP") fee income totaled $620
thousand for the current quarter. Additional available
liquidity totaled approximately $653
million (secured FHLB and FRB borrowing capacity plus
available on-balance sheet sweep liquidity), excluding cash and
unsecured borrowing capacity.
- Stable and consistent fee income totaling $6.3 million or 21% of total revenue, led by our
payment processing platform with 83,000 small business clients
nationally. Our technology enabled payments platform facilitated
the processing of $9.3 billion in
credit and debit card payment volume across 155.6 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.
- Launched our redesigned website (integrated with our marketing
cloud, CRM platform, and Lawyer IQ platform) including the
integration of AI driven sales content to improve current user
engagement and prospective client acquisition.
- Strong capital foundation with common equity tier 1 ("CET1")
and tangible common equity to tangible asset(1)
("TCE/TA") ratios of 14.89% and 12.67%, respectively. Including the
after-tax unrealized losses on both the available-for-sale and
held-to-maturity securities portfolios of $14.2 million and $6.0
million, respectively, the adjusted(1) CET1 and
adjusted(1) TCE/TA ratios were 13.41% and 12.32%,
respectively. Esquire Bank remains well above the bank regulatory
"Well Capitalized" standards.
"Our industry leading performance, strong balance sheet
management, and proven growth trends will continue to create value
for all stakeholders beyond our financial sector peers," stated
Tony Coelho, Chairman of the Board.
"We will continue to remain steadfast in our vision – to build a
client-centric and tech-focused company that is disruptive to the
national markets we serve while generating best-in-class
performance and returns."
"Our current balance sheet management strategy to increase short
duration agency mortgage-backed securities rather than originate
multifamily and commercial real estate loans only impacts the
composition of our interest earning assets and does not change our
views for growth and earnings in 2024," stated Andrew C. Sagliocca. "At the same time, we
believe these decisions enhance our Company's liquidity position,
asset composition, and flexibility in the future as inflation slows
and the Federal Reserve moderates its views on short-term rates in
the near future."
(1) See non-GAAP
reconciliation provided at the end of this news release.
Second Quarter Earnings
Net income for the quarter ended June 30,
2024 was $10.5 million, or
$1.25 per diluted share, compared to
$9.1 million, or $1.10 per diluted share for the same period in
2023. Returns on average assets and equity for the current quarter
were 2.58% and 20.16%, respectively, compared to 2.65% and 21.03%
for the same period of 2023.
Net interest income for the second quarter of 2024 increased
$4.2 million, or 21.1%, to
$24.3 million, due to growth in
average interest earning assets (funded with low-cost core
deposits) totaling $243.4 million, or
18.2%, to $1.58 billion as well as a
17 basis point increase in our net interest margin to 6.19% when
compared to the same period in 2023. Our net interest margin was
positively impacted by growth in higher yielding variable rate
commercial loans and low-cost litigation-based deposits. Average
loan yield increased 12 basis points to 7.85% while average loans
increased $247.2 million, or 24.9%,
to $1.24 billion, primarily due to
growth in our national commercial lending platform and, to a lesser
extent, growth in our regional multifamily loan portfolio during
2023. Loan interest income increased $5.1
million, or 26.5%, to $24.2
million with the increase in average loan balances
(primarily commercial) comprising $4.9
million of the increase and $191
thousand representing increases in average rate. Our
loan-to-deposit ratio was 84.8% as our low-cost deposit base
increased $227.9 million, or 18.1%,
primarily due to growth in our longer duration escrow or IOLTA
(interest on lawyer trust accounts) deposit banking relationships.
Our deposit cost-of-funds, excluding demand deposits, increased 21
basis points in the current quarter when compared to 2023 due to
increases in short-term interest rates as well as management
proactively increasing rates on IOLTA accounts in the various
states where we operate. Deposit expense increased $1.1 million to $3.1
million for the quarter with increases in average rate
(primarily IOLTA) comprising $756
thousand and an increase of $340
thousand (primarily IOLTA) attributable to average deposit
balances. Average securities in the quarter increased $45.1 million to $253.3
million and yields increased 92 basis points to 3.21% due to
our previously noted balance sheet or ALCO strategy. 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 second quarter of 2024, a $325 thousand decrease from the second quarter
2023 provision. As of June 30, 2024,
our allowance to loans ratio was 1.47% as compared to 1.34% as of
June 30, 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 short-term interest rate environment as well as the current
uncertain economic environment including, but not limited to, its
potential impact on the New York
metro multifamily and commercial real estate market.
Noninterest income totaled $6.3
million for the second quarter of 2024 as compared to
$6.7 million in the same period for
2023. Payment processing income was $5.3
million for the second quarter of 2024, a $442 thousand decrease from the same period in
2023, primarily due to the anticipated ISO attrition and changes in
our overall merchant risk profile. Payment processing volumes for
the credit and debit card processing platform increased
$810 million, or 9.6%, to
$9.3 billion and transactions
decreased 1.2 million, or 0.8%, to 155.6 million, for the current
quarter, as compared to the same period in 2023. We continue to
focus on the expansion of sales channels through ISOs, prudently
managing risk while increasing the number of merchants, growing
volumes, and expanding our technology and other resources in the
payments vertical. The Company utilizes proprietary and industry
leading technology to ensure card brand and regulatory compliance,
supports multiple processing platforms, manages daily risk across
83,000 small business merchants in all 50 states, and performs
commercial treasury clearing services. ASP fee income decreased
$119 thousand to $620 thousand for the second 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 $141 thousand to $333
thousand when compared to the comparable prior year quarter
primarily due to increases in client loan fees.
Noninterest expense increased $2.3
million, or 17.4%, to $15.2
million for the second quarter of 2024, as compared to the
same period in 2023. This increase was primarily due to increases
in employee compensation and benefits, advertising and marketing,
data processing, and occupancy and equipment, partially offset by
decreases in professional services costs. Employee compensation and
benefits costs increased $1.7
million, or 22.1%, 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 eight employees, or 6%,
year-over-year to 141 full-time equivalents as we expanded our
sales, lending, and risk management areas. Advertising and
marketing costs increased $561
thousand as we continued to grow our digital marketing
platform, expand our thought leadership in our national verticals,
and support our regional BDOs recently hired in 2023. Data
processing costs increased $473
thousand due to increased processing volume, primarily
driven by our core banking platform, and additional costs related
to our technology implementations. Occupancy and equipment costs
increased $321 thousand due to
amortization of our investments in internally developed software to
support our digital platform and additional office space to support
our growth. Professional services costs decreased $758 thousand due to the costs in 2023 associated
with our executive search firm. Our investments in current
resources (people, technology, and digital marketing) will continue
to support our long-term growth goals.
The Company's efficiency ratio was 49.8% for the three months
ended June 30, 2024, as compared to
48.4% in 2023 reflecting our current investment in resources to
support future growth. Our strong efficiency ratio is a result of
our continued revenue growth driven by our core national platforms
that have (and will continue to) benefit from our investments in
technology, digital marketing, employees, and other branchless
infrastructure that support our industry leading returns.
The effective tax rate was 27.0% for the second quarter of 2024,
consistent with the second quarter of 2023.
Year to Date Earnings
Net income for the six months ended June
30, 2024 was $20.5 million, or
$2.45 per diluted share, compared to
$21.3 million, or $2.57 per diluted share for the same period in
2023. Returns on average assets and equity for the six months ended
June 30, 2024 were 2.59% and 20.15%,
respectively, compared to 3.15% and 25.55% 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 in the first
quarter of 2023, adjusted(1) net income, diluted
earnings per share, return on average assets, and return on average
common equity for the six months ended June
30, 2023 was $18.4 million,
$2.21, 2.72% and 22.02%,
respectively.
Net interest income for the six months ended June 30, 2024 increased $7.8 million, or 19.8%, to $47.2 million, due to growth in average interest
earning assets (funded with low-cost core deposits) totaling
$230.6 million, or 17.5%, to
$1.55 billion as well as an 11 basis
point increase in our net interest margin to 6.13% when compared to
the same period in 2023. Our net interest margin was positively
impacted by growth in higher yielding variable rate commercial
loans and low-cost litigation-based deposits. The average yield on
loans increased 20 basis points to 7.82%, primarily driven by
growth in higher yielding variable rate commercial loans. Average
loans for the six months ended June 30,
2024 increased $251.8 million,
or 25.9%, to $1.22 billion, primarily
due to growth in our national commercial lending platform and, to a
lesser extent, growth in our regional multifamily loan portfolio
during 2023. Loan interest income increased $10.9 million, or 29.5%, to $47.6 million with the increases in average loan
balances (primarily commercial) comprising $10.1 million of the increase and $732 thousand representing increases in average
rate. Our deposit cost-of-funds, excluding demand deposits,
increased 51 basis points for the six months ended June 30, 2024 when compared to the same period in
2023 due to increases in short-term interest rates as well as
management proactively increasing rates on IOLTA accounts in the
various states where we operate. Deposit expense increased
$3.2 million to $6.3 million for the six months ended
June 30, 2024 with increases in
average rate (primarily IOLTA and to a lesser extent relationship
money market deposits) comprising $2.2
million of the increase and the remaining increase of
$1.1 million (primarily IOLTA and to
a lesser extent relationship money market deposits) attributable to
average deposit balances. Average securities for the six months
ended June 30, 2024 increased
$31.2 million to $239.8 million and yields increased 77 basis
points to 3.04% due to our previously noted balance sheet or ALCO
strategy. The movement in short-term interest rates increased
yields and interest income on our interest earning cash
balances.
The provision for credit losses was $2.0
million for the six months ended June
30, 2024, a $175 thousand
increase from the same period in 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 short-term interest rate environment as well as the current
uncertain economic environment including, but not limited to, its
potential impact on the New York
metro multifamily and commercial real estate market.
Noninterest income totaled $12.7
million for the six months ended June
30, 2024 as compared to $17.0
million in the same period for 2023. Excluding the
$4.0 million gain on our Litify
fintech investment, adjusted(1) noninterest income in
the six months ended June 30, 2023
was $12.9 million. Payment processing
income was $10.6 million for the six
months ended June 30, 2024, a
$659 thousand decrease from the same
period in 2023, primarily due to the anticipated ISO attrition and
changes in our overall merchant risk profile. Payment processing
volumes and transactions for the credit and debit card processing
platform increased $1.7 billion, or
10.8%, to $17.9 billion and 6.4
million, or 2.1%, to 306.1 million transactions, respectively, for
the six months ended June 30, 2024,
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. ASP fee
income increased $98 thousand to
$1.4 million for the six months ended
June 30, 2024 as compared to the same
period in 2023. Other noninterest income increased $295 thousand to $680
thousand for the six months ended June 30, 2024 when compared to the same period in
2023, primarily due to increases in client loan related fees.
Noninterest expense increased $4.3
million, or 17.1%, to $29.8
million for the six months ended June
30, 2024, as compared to the same period in 2023. This
increase was primarily due to increases in employee compensation
and benefits, advertising and marketing, data processing, and
occupancy and equipment, partially offset by decreases in
professional services costs. Employee compensation and benefits
costs increased $3.4 million, or
22.2%, 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. In 2024, we
experienced the full year impact of our 2023 key hires including,
but not limited to, our regional senior BDOs, sales support,
lending/lending support, and risk management staffing initiatives.
Advertising and marketing costs increased $1.0 million as we continued to grow our digital
marketing platform, expand our thought leadership in our national
verticals, and support our regional BDOs. Data processing costs
increased $851 thousand due to
increased processing volume, primarily driven by our core banking
platform, and additional costs related to our technology
implementations. Occupancy and equipment costs increased
$419 thousand due to amortization of
our investments in internally developed software to support our
digital platform and additional office space to support our growth.
Professional services costs decreased $1.4
million due to the hiring costs associated with our
executive search firm in 2023. Our investment in current resources
(people, technology, and digital marketing) will continue to
support our long-term growth goals.
(1) See non-GAAP
reconciliation provided at the end of this news release.
The Company's efficiency ratio was 49.8% for the six months
ended June 30, 2024, as compared to
45.2% for the same period in 2023. The adjusted(1)
efficiency ratio was 48.7% for the six months ended June 30, 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 26.8% for the six months ended
June 30, 2024, compared to 26.7% for
the same period in 2023.
Asset Quality
At June 30, 2024, we had one
nonperforming loan totaling $10.9
million and no exposure to commercial office space nor
construction loans and only $15.0
million in performing loans to the hospitality industry. The
allowance for credit losses was $18.5
million, or 1.47% of total loans, as compared to
$14.2 million, or 1.34% of total
loans at June 30, 2023. The ratio of
nonperforming loans to total loans and total assets was 0.87% and
0.64%, respectively. The allowance for credit losses to
nonperforming loans was 169%. The increase in the allowance as a
percentage of loans was general reserve driven considering loan
growth and qualitative factors associated with the current
short-term interest rate environment as well as the current
uncertain economic environment including, but not limited to, its
potential impact on the New York
metro multifamily and 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 June
30, 2024:
- The multifamily portfolio, excluding one nonperforming loan,
totaling $341.2 million, has a
current weighted average DSCR and an original LTV (defined as
unpaid principal balance as of June 30,
2024 divided by appraised value at origination) of
approximately 1.66 and 54%, respectively, and the CRE portfolio,
totaling $88.4 million, has a current
weighted average DSCR and an original LTV of approximately 1.53 and
59%, respectively.
- Multifamily loans maturing in less than one year totaled
$47.0 million and had a current
weighted average DSCR and an original LTV of approximately 1.42 and
55%, respectively. CRE loans maturing in less than one year totaled
$2.2 million and had a current
weighted average DSCR and an original LTV of approximately 3.54 and
47%, respectively.
- Multifamily loans maturing in one to two years totaled
$50.3 million and had a current
weighted average DSCR and an original LTV of approximately 1.38 and
66%, 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 1.49 and
61%, respectively.
(1) See non-GAAP
reconciliation provided at the end of this news release.
Balance Sheet
At June 30, 2024, total assets
were $1.72 billion, reflecting a
$265.2 million, or 18.3% increase
from June 30, 2023. This increase was
primarily attributable to growth in loans totaling $205.3 million, or 19.4%, to $1.26 billion. Our higher yielding variable rate
commercial loans increased $151.7
million, or 23.9%, 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 will continue to drive
growth across our national commercial platform. Our
available-for-sale securities portfolio increased $73.1 million to $176.8
million as compared to June 30,
2023, as management opportunistically deployed excess
liquidity into securities as part of our previously mentioned
balance sheet management or ALCO process at current market rates.
Our held-to-maturity securities portfolio totaled $73.1 million, a decrease of $7.8 million, or 9.7%, as the portfolio paid
down. In the third quarter of 2023, management elected to close out
its reverse repurchase agreements and reinvest these funds into
higher yielding commercial loans.
The following table provides information regarding the
composition of our loan portfolio for the periods presented:
|
|
June 30,
|
|
|
December 31,
|
|
|
June 30,
|
|
|
|
2024
|
|
|
2023
|
|
|
2023
|
|
|
|
(Dollars in thousands)
|
|
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multifamily
|
|
$
|
352,097
|
|
27.9
|
%
|
|
$
|
348,241
|
|
28.8
|
%
|
|
$
|
298,718
|
|
28.3
|
%
|
Commercial real
estate
|
|
|
88,376
|
|
7.0
|
|
|
|
89,498
|
|
7.4
|
|
|
|
91,057
|
|
8.6
|
|
1 – 4 family
|
|
|
15,336
|
|
1.2
|
|
|
|
17,937
|
|
1.5
|
|
|
|
21,606
|
|
2.0
|
|
Total real
estate
|
|
|
455,809
|
|
36.1
|
|
|
|
455,676
|
|
37.7
|
|
|
|
411,381
|
|
38.9
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Litigation
related
|
|
|
668,676
|
|
53.0
|
|
|
|
612,457
|
|
50.7
|
|
|
|
526,076
|
|
49.8
|
|
Other
|
|
|
117,917
|
|
9.4
|
|
|
|
125,457
|
|
10.4
|
|
|
|
108,814
|
|
10.3
|
|
Total
commercial
|
|
|
786,593
|
|
62.4
|
|
|
|
737,914
|
|
61.1
|
|
|
|
634,890
|
|
60.1
|
|
Consumer
|
|
|
19,010
|
|
1.5
|
|
|
|
14,491
|
|
1.2
|
|
|
|
10,500
|
|
1.0
|
|
Total loans held for
investment
|
|
$
|
1,261,412
|
|
100.0
|
%
|
|
$
|
1,208,081
|
|
100.0
|
%
|
|
$
|
1,056,771
|
|
100.0
|
%
|
Deferred loan fees and
unearned
premiums, net
|
|
|
(350)
|
|
|
|
|
|
(668)
|
|
|
|
|
|
(989)
|
|
|
|
Loans, held for
investment
|
|
$
|
1,261,062
|
|
|
|
|
$
|
1,207,413
|
|
|
|
|
$
|
1,055,782
|
|
|
|
Total deposits were $1.49 billion
as of June 30, 2024, a $227.9 million, or 18.1%, increase from
June 30, 2023. This was primarily due
to a $262.4 million, or 36.0%,
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
$25.9 million, or 5.1%, 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 $813.6 million, or
54.7%, of total deposits. As of June 30,
2024, uninsured deposits were $455.7
million, or 31%, of our total deposits of $1.49 billion, excluding $11.1 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 June 30, 2024,
off-balance sheet sweep funds totaled approximately $408.0 million, of which approximately
$273.6 million, or 67.1%, 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 June 30, 2024, we had the
ability to borrow, on a secured basis, up to $324.8 million from the FHLB of New York and $54.4
million from the FRB of New York discount
window. No borrowing amounts were outstanding during the
second 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 $38.5
million to $217.4 million as
of June 30, 2024, when compared to
June 30, 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," "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)
|
|
|
|
June 30,
|
|
December 31,
|
|
June 30,
|
|
|
|
2024
|
|
2023
|
|
2023
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
152,733
|
|
$
|
165,209
|
|
$
|
106,199
|
|
Securities purchased
under agreements to resell, at cost
|
|
|
—
|
|
|
—
|
|
|
49,505
|
|
Securities
available-for-sale, at fair value
|
|
|
176,814
|
|
|
122,107
|
|
|
103,681
|
|
Securities
held-to-maturity, at cost
|
|
|
73,062
|
|
|
77,001
|
|
|
80,883
|
|
Securities, restricted
at cost
|
|
|
3,034
|
|
|
2,928
|
|
|
2,928
|
|
Loans, held for
investment
|
|
|
1,261,062
|
|
|
1,207,413
|
|
|
1,055,782
|
|
Less: allowance for
credit losses
|
|
|
(18,521)
|
|
|
(16,631)
|
|
|
(14,179)
|
|
Loans, net of
allowance
|
|
|
1,242,541
|
|
|
1,190,782
|
|
|
1,041,603
|
|
Premises and equipment,
net
|
|
|
2,809
|
|
|
2,602
|
|
|
2,501
|
|
Other assets
|
|
|
64,721
|
|
|
56,247
|
|
|
63,254
|
|
Total Assets
|
|
$
|
1,715,714
|
|
$
|
1,616,876
|
|
$
|
1,450,554
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
|
Demand
deposits
|
|
$
|
482,988
|
|
$
|
473,274
|
|
$
|
508,916
|
|
Savings, NOW and money
market deposits
|
|
|
991,953
|
|
|
926,264
|
|
|
729,586
|
|
Certificates of
deposit
|
|
|
11,952
|
|
|
7,761
|
|
|
20,482
|
|
Total
deposits
|
|
|
1,486,893
|
|
|
1,407,299
|
|
|
1,258,984
|
|
Other
liabilities
|
|
|
11,410
|
|
|
11,022
|
|
|
12,664
|
|
Total
liabilities
|
|
|
1,498,303
|
|
|
1,418,321
|
|
|
1,271,648
|
|
Total stockholders'
equity
|
|
|
217,411
|
|
|
198,555
|
|
|
178,906
|
|
Total Liabilities and Stockholders'
Equity
|
|
$
|
1,715,714
|
|
$
|
1,616,876
|
|
$
|
1,450,554
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Financial Data
|
|
|
|
|
|
|
|
|
|
|
Common shares
outstanding
|
|
|
8,292,948
|
|
|
8,287,848
|
|
|
8,192,379
|
|
Book value per
share
|
|
$
|
26.22
|
|
$
|
23.96
|
|
$
|
21.84
|
|
Equity to
assets
|
|
|
12.67
|
%
|
|
12.28
|
%
|
|
12.33
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Capital Ratios (1)
|
|
|
|
|
|
|
|
|
|
|
Tier 1 leverage
ratio
|
|
|
12.53
|
%
|
|
12.07
|
%
|
|
11.72
|
%
|
Common equity tier 1
capital ratio
|
|
|
14.89
|
|
|
14.13
|
|
|
14.27
|
|
Tier 1 capital
ratio
|
|
|
14.89
|
|
|
14.13
|
|
|
14.27
|
|
Total capital
ratio
|
|
|
16.14
|
|
|
15.38
|
|
|
15.52
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality
|
|
|
|
|
|
|
|
|
|
|
Nonperforming
loans
|
|
$
|
10,940
|
|
$
|
10,940
|
|
$
|
4
|
|
Allowance for credit
losses to total loans
|
|
|
1.47
|
%
|
|
1.38
|
%
|
|
1.34
|
%
|
Nonperforming loans to
total loans
|
|
|
0.87
|
|
|
0.91
|
|
|
0.00
|
|
Nonperforming assets to
total assets
|
|
|
0.64
|
|
|
0.68
|
|
|
0.00
|
|
Allowance to
nonperforming loans
|
|
|
169
|
|
|
152
|
|
|
NM
|
|
________________________________________
|
(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.
|
|
|
NM – Not
meaningful
|
ESQUIRE FINANCIAL
HOLDINGS, INC.
|
Consolidated Income
Statement (unaudited)
|
(dollars in
thousands except per share data)
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
June 30,
|
|
|
|
2024
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Interest
income
|
|
$
|
27,385
|
|
$
|
26,073
|
|
$
|
22,055
|
|
$
|
53,458
|
|
$
|
42,420
|
|
Interest
expense
|
|
|
3,063
|
|
|
3,210
|
|
|
1,966
|
|
|
6,273
|
|
|
3,042
|
|
Net interest
income
|
|
|
24,322
|
|
|
22,863
|
|
|
20,089
|
|
|
47,185
|
|
|
39,378
|
|
Provision for credit
losses
|
|
|
1,000
|
|
|
1,000
|
|
|
1,325
|
|
|
2,000
|
|
|
1,825
|
|
Net interest income
after provision for credit losses
|
|
|
23,322
|
|
|
21,863
|
|
|
18,764
|
|
|
45,185
|
|
|
37,553
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment processing
fees
|
|
|
5,322
|
|
|
5,296
|
|
|
5,764
|
|
|
10,618
|
|
|
11,277
|
|
Gain on equity
investments
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,027
|
|
Other noninterest
income
|
|
|
953
|
|
|
1,093
|
|
|
931
|
|
|
2,046
|
|
|
1,653
|
|
Total noninterest
income
|
|
|
6,275
|
|
|
6,389
|
|
|
6,695
|
|
|
12,664
|
|
|
16,957
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation
and benefits
|
|
|
9,525
|
|
|
9,161
|
|
|
7,803
|
|
|
18,686
|
|
|
15,287
|
|
Other
expenses
|
|
|
5,707
|
|
|
5,407
|
|
|
5,173
|
|
|
11,114
|
|
|
10,170
|
|
Total noninterest
expense
|
|
|
15,232
|
|
|
14,568
|
|
|
12,976
|
|
|
29,800
|
|
|
25,457
|
|
Income before income
taxes
|
|
|
14,365
|
|
|
13,684
|
|
|
12,483
|
|
|
28,049
|
|
|
29,053
|
|
Income taxes
|
|
|
3,878
|
|
|
3,626
|
|
|
3,370
|
|
|
7,504
|
|
|
7,761
|
|
Net income
|
|
$
|
10,487
|
|
$
|
10,058
|
|
$
|
9,113
|
|
$
|
20,545
|
|
$
|
21,292
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.34
|
|
$
|
1.29
|
|
$
|
1.18
|
|
$
|
2.64
|
|
$
|
2.76
|
|
Diluted
|
|
|
1.25
|
|
|
1.20
|
|
|
1.10
|
|
|
2.45
|
|
|
2.57
|
|
Basic - adjusted
(1)
|
|
|
1.34
|
|
|
1.29
|
|
|
1.18
|
|
|
2.64
|
|
|
2.38
|
|
Diluted - adjusted
(1)
|
|
|
1.25
|
|
|
1.20
|
|
|
1.10
|
|
|
2.45
|
|
|
2.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Financial Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
|
2.58
|
%
|
|
2.59
|
%
|
|
2.65
|
%
|
|
2.59
|
%
|
|
3.15
|
%
|
Return on average
equity
|
|
|
20.16
|
|
|
20.14
|
|
|
21.03
|
|
|
20.15
|
|
|
25.55
|
|
Adjusted return on
average assets (1)
|
|
|
2.58
|
|
|
2.59
|
|
|
2.65
|
|
|
2.59
|
|
|
2.72
|
|
Adjusted return on
average equity (1)
|
|
|
20.16
|
|
|
20.14
|
|
|
21.03
|
|
|
20.15
|
|
|
22.02
|
|
Net interest
margin
|
|
|
6.19
|
|
|
6.06
|
|
|
6.02
|
|
|
6.13
|
|
|
6.02
|
|
Efficiency ratio
(1)
|
|
|
49.8
|
|
|
49.8
|
|
|
48.4
|
|
|
49.8
|
|
|
45.2
|
|
Adjusted efficiency
ratio (1)
|
|
|
49.8
|
|
|
49.8
|
|
|
48.4
|
|
|
49.8
|
|
|
48.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends paid per
common share
|
|
$
|
0.150
|
|
$
|
0.150
|
|
$
|
0.125
|
|
$
|
0.300
|
|
$
|
0.225
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average basic
shares
|
|
|
7,798,441
|
|
|
7,786,887
|
|
|
7,708,350
|
|
|
7,792,664
|
|
|
7,708,546
|
|
Weighted average
diluted shares
|
|
|
8,402,750
|
|
|
8,401,752
|
|
|
8,299,704
|
|
|
8,402,119
|
|
|
8,301,149
|
|
________________________________________
|
(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
|
|
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
|
|
2024
|
|
2024
|
|
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
|
|
$
|
1,240,599
|
|
$
|
24,216
|
|
7.85
|
%
|
$
|
1,208,429
|
|
$
|
23,389
|
|
7.78
|
%
|
$
|
993,353
|
|
$
|
19,137
|
|
7.73
|
%
|
Securities, includes
restricted stock
|
|
|
253,328
|
|
|
2,023
|
|
3.21
|
%
|
|
226,175
|
|
|
1,605
|
|
2.85
|
%
|
|
208,211
|
|
|
1,189
|
|
2.29
|
%
|
Securities purchased
under agreements
to resell
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
49,963
|
|
|
715
|
|
5.74
|
%
|
Interest earning cash
and other
|
|
|
87,025
|
|
|
1,146
|
|
5.30
|
%
|
|
81,740
|
|
|
1,079
|
|
5.31
|
%
|
|
85,991
|
|
|
1,014
|
|
4.73
|
%
|
Total interest earning
assets
|
|
|
1,580,952
|
|
|
27,385
|
|
6.97
|
%
|
|
1,516,344
|
|
|
26,073
|
|
6.92
|
%
|
|
1,337,518
|
|
|
22,055
|
|
6.61
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST EARNING
ASSETS
|
|
|
50,688
|
|
|
|
|
|
|
|
48,602
|
|
|
|
|
|
|
|
44,004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL AVERAGE
ASSETS
|
|
$
|
1,631,640
|
|
|
|
|
|
|
$
|
1,564,946
|
|
|
|
|
|
|
$
|
1,381,522
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST BEARING
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, Money
Market deposits
|
|
$
|
899,419
|
|
$
|
2,932
|
|
1.31
|
%
|
$
|
860,159
|
|
$
|
3,098
|
|
1.45
|
%
|
$
|
673,154
|
|
$
|
1,809
|
|
1.08
|
%
|
Time
deposits
|
|
|
11,702
|
|
|
130
|
|
4.47
|
%
|
|
11,041
|
|
|
111
|
|
4.04
|
%
|
|
16,234
|
|
|
156
|
|
3.85
|
%
|
Total interest bearing
deposits
|
|
|
911,121
|
|
|
3,062
|
|
1.35
|
%
|
|
871,200
|
|
|
3,209
|
|
1.48
|
%
|
|
689,388
|
|
|
1,965
|
|
1.14
|
%
|
Borrowings
|
|
|
44
|
|
|
1
|
|
9.14
|
%
|
|
45
|
|
|
1
|
|
8.94
|
%
|
|
46
|
|
|
1
|
|
8.72
|
%
|
Total interest bearing
liabilities
|
|
|
911,165
|
|
|
3,063
|
|
1.35
|
%
|
|
871,245
|
|
|
3,210
|
|
1.48
|
%
|
|
689,434
|
|
|
1,966
|
|
1.14
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST BEARING
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand
deposits
|
|
|
499,348
|
|
|
|
|
|
|
|
477,020
|
|
|
|
|
|
|
|
500,058
|
|
|
|
|
|
|
Other
liabilities
|
|
|
11,894
|
|
|
|
|
|
|
|
15,787
|
|
|
|
|
|
|
|
18,231
|
|
|
|
|
|
|
Total noninterest
bearing liabilities
|
|
|
511,242
|
|
|
|
|
|
|
|
492,807
|
|
|
|
|
|
|
|
518,289
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
209,233
|
|
|
|
|
|
|
|
200,894
|
|
|
|
|
|
|
|
173,799
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL AVG. LIABILITIES
AND EQUITY
|
|
$
|
1,631,640
|
|
|
|
|
|
|
$
|
1,564,946
|
|
|
|
|
|
|
$
|
1,381,522
|
|
|
|
|
|
|
Net interest
income
|
|
|
|
|
$
|
24,322
|
|
|
|
|
|
|
$
|
22,863
|
|
|
|
|
|
|
$
|
20,089
|
|
|
|
Net interest
spread
|
|
|
|
|
|
|
|
5.62
|
%
|
|
|
|
|
|
|
5.44
|
%
|
|
|
|
|
|
|
5.47
|
%
|
Net interest
margin
|
|
|
|
|
|
|
|
6.19
|
%
|
|
|
|
|
|
|
6.06
|
%
|
|
|
|
|
|
|
6.02
|
%
|
Deposits (including
noninterest bearing
demand deposits)
|
|
$
|
1,410,469
|
|
$
|
3,062
|
|
0.87
|
%
|
$
|
1,348,220
|
|
$
|
3,209
|
|
0.96
|
%
|
$
|
1,189,446
|
|
$
|
1,965
|
|
0.66
|
%
|
ESQUIRE FINANCIAL
HOLDINGS, INC.
|
Consolidated Average
Balance Sheets and Average Yield/Cost (unaudited)
|
(dollars in
thousands)
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
2024
|
|
2023
|
|
|
|
Average
|
|
|
|
|
Average
|
|
Average
|
|
|
|
|
Average
|
|
|
|
Balance
|
|
Interest
|
|
Yield/Cost
|
|
Balance
|
|
Interest
|
|
Yield/Cost
|
|
INTEREST EARNING
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, held for
investment
|
|
$
|
1,224,513
|
|
$
|
47,605
|
|
7.82
|
%
|
$
|
972,753
|
|
$
|
36,752
|
|
7.62
|
%
|
Securities, includes
restricted stock
|
|
|
239,752
|
|
|
3,628
|
|
3.04
|
%
|
|
208,513
|
|
|
2,343
|
|
2.27
|
%
|
Securities purchased
under agreements to resell
|
|
|
—
|
|
|
—
|
|
—
|
|
|
49,686
|
|
|
1,368
|
|
5.55
|
%
|
Interest earning cash
and other
|
|
|
84,382
|
|
|
2,225
|
|
5.30
|
%
|
|
87,094
|
|
|
1,957
|
|
4.53
|
%
|
Total interest earning
assets
|
|
|
1,548,647
|
|
|
53,458
|
|
6.94
|
%
|
|
1,318,046
|
|
|
42,420
|
|
6.49
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST EARNING
ASSETS
|
|
|
49,646
|
|
|
|
|
|
|
|
44,094
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL AVERAGE
ASSETS
|
|
$
|
1,598,293
|
|
|
|
|
|
|
$
|
1,362,140
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST BEARING
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, Money
Market deposits
|
|
$
|
879,789
|
|
$
|
6,030
|
|
1.38
|
%
|
$
|
660,737
|
|
$
|
2,821
|
|
0.86
|
%
|
Time
deposits
|
|
|
11,372
|
|
|
241
|
|
4.26
|
%
|
|
12,848
|
|
|
219
|
|
3.44
|
%
|
Total interest bearing
deposits
|
|
|
891,161
|
|
|
6,271
|
|
1.42
|
%
|
|
673,585
|
|
|
3,040
|
|
0.91
|
%
|
Borrowings
|
|
|
45
|
|
|
2
|
|
8.94
|
%
|
|
46
|
|
|
2
|
|
8.77
|
%
|
Total interest bearing
liabilities
|
|
|
891,206
|
|
|
6,273
|
|
1.42
|
%
|
|
673,631
|
|
|
3,042
|
|
0.91
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST BEARING
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand
deposits
|
|
|
488,184
|
|
|
|
|
|
|
|
502,399
|
|
|
|
|
|
|
Other
liabilities
|
|
|
13,840
|
|
|
|
|
|
|
|
18,065
|
|
|
|
|
|
|
Total noninterest
bearing liabilities
|
|
|
502,024
|
|
|
|
|
|
|
|
520,464
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
205,063
|
|
|
|
|
|
|
|
168,045
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL AVG. LIABILITIES
AND EQUITY
|
|
$
|
1,598,293
|
|
|
|
|
|
|
$
|
1,362,140
|
|
|
|
|
|
|
Net interest
income
|
|
|
|
|
$
|
47,185
|
|
|
|
|
|
|
$
|
39,378
|
|
|
|
Net interest
spread
|
|
|
|
|
|
|
|
5.52
|
%
|
|
|
|
|
|
|
5.58
|
%
|
Net interest
margin
|
|
|
|
|
|
|
|
6.13
|
%
|
|
|
|
|
|
|
6.02
|
%
|
Deposits (including
noninterest bearing demand deposits)
|
|
$
|
1,379,345
|
|
$
|
6,271
|
|
0.91
|
%
|
$
|
1,175,984
|
|
$
|
3,040
|
|
0.52
|
%
|
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
|
|
Six Months Ended
|
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
June 30,
|
|
|
2024
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net income –
GAAP
|
$
|
10,487
|
|
$
|
10,058
|
|
$
|
9,113
|
|
$
|
20,545
|
|
$
|
21,292
|
|
Less: gain
on equity investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,027)
|
|
Add:
income tax impact
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,087
|
|
Adjusted net
income
|
$
|
10,487
|
|
$
|
10,058
|
|
$
|
9,113
|
|
$
|
20,545
|
|
$
|
18,352
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets – GAAP
|
|
2.58
|
%
|
|
2.59
|
%
|
|
2.65
|
%
|
|
2.59
|
%
|
|
3.15
|
%
|
Adjusted return on
average assets
|
|
2.58
|
%
|
|
2.59
|
%
|
|
2.65
|
%
|
|
2.59
|
%
|
|
2.72
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
equity – GAAP
|
|
20.16
|
%
|
|
20.14
|
%
|
|
21.03
|
%
|
|
20.15
|
%
|
|
25.55
|
%
|
Adjusted return on
average equity
|
|
20.16
|
%
|
|
20.14
|
%
|
|
21.03
|
%
|
|
20.15
|
%
|
|
22.02
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share – GAAP
|
$
|
1.34
|
|
$
|
1.29
|
|
$
|
1.18
|
|
$
|
2.64
|
|
$
|
2.76
|
|
Adjusted basic earnings
per share
|
$
|
1.34
|
|
$
|
1.29
|
|
$
|
1.18
|
|
$
|
2.64
|
|
$
|
2.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share – GAAP
|
$
|
1.25
|
|
$
|
1.20
|
|
$
|
1.10
|
|
$
|
2.45
|
|
$
|
2.57
|
|
Adjusted diluted
earnings per share
|
$
|
1.25
|
|
$
|
1.20
|
|
$
|
1.10
|
|
$
|
2.45
|
|
$
|
2.21
|
|
The following table presents a reconciliation of efficiency
ratio (non-GAAP) and adjusted efficiency ratio (non-GAAP).
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
June 30,
|
|
|
2024
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Efficiency ratio –
non-GAAP(1)
|
|
49.8
|
%
|
|
49.8
|
%
|
|
48.4
|
%
|
|
49.8
|
%
|
|
45.2
|
%
|
Noninterest expense –
GAAP
|
$
|
15,232
|
|
$
|
14,568
|
|
$
|
12,976
|
|
$
|
29,800
|
|
$
|
25,457
|
|
Net interest income –
GAAP
|
|
24,322
|
|
|
22,863
|
|
|
20,089
|
|
|
47,185
|
|
|
39,378
|
|
Noninterest income –
GAAP
|
|
6,275
|
|
|
6,389
|
|
|
6,695
|
|
|
12,664
|
|
|
16,957
|
|
Less: gain
on equity investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,027)
|
|
Adjusted noninterest
income – non-GAAP
|
$
|
6,275
|
|
$
|
6,389
|
|
$
|
6,695
|
|
$
|
12,664
|
|
$
|
12,930
|
|
Adjusted efficiency
ratio – non-GAAP(2)
|
|
49.8
|
%
|
|
49.8
|
%
|
|
48.4
|
%
|
|
49.8
|
%
|
|
48.7
|
%
|
|
|
(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):
|
June 30,
|
|
|
2024
|
|
Total assets -
GAAP
|
$
|
1,715,714
|
|
Less: intangible
assets
|
|
—
|
|
Tangible assets ("TA")
- non-GAAP
|
|
1,715,714
|
|
|
|
|
|
Total stockholders'
equity - GAAP
|
$
|
217,411
|
|
Less:
intangible assets
|
|
—
|
|
Less:
preferred stock
|
|
—
|
|
Tangible common equity
("TCE") - non-GAAP
|
|
217,411
|
|
Add: unrecognized
losses on securities held-to-maturity, net of tax
|
|
(6,006)
|
|
Adjusted TCE -
non-GAAP
|
$
|
211,405
|
|
|
|
|
|
Stockholders' equity to
assets - GAAP
|
|
12.67
|
%
|
TCE to TA -
non-GAAP
|
|
12.67
|
%
|
Adjusted TCE to TA -
non-GAAP
|
|
12.32
|
%
|
The following table presents the common equity tier 1 capital
ratio and the adjusted common equity tier 1 capital ratio:
|
June 30,
|
|
|
2024
|
|
Common equity tier 1
("CET1") capital - Bank
|
$
|
203,293
|
|
Add: unrealized losses
on securities available-for-sale, net of tax
|
|
(14,241)
|
|
Add: unrecognized
losses on securities held-to-maturity, net of tax
|
|
(6,006)
|
|
Adjusted CET1 capital -
Bank
|
$
|
183,046
|
|
|
|
|
|
Total risk-weighted
assets - Bank
|
$
|
1,365,132
|
|
|
|
|
|
CET1 capital
ratio(1)
|
|
14.89
|
%
|
Adjusted CET1 capital
ratio(1)
|
|
13.41
|
%
|
|
|
(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.
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content:https://www.prnewswire.com/news-releases/esquire-financial-holdings-inc-reports-second-quarter-2024-results-302206576.html
SOURCE Esquire Financial Holdings, Inc.