Esquire Financial Holdings, Inc. (ESQ) 10-Q Quarterly Report May 2022

Jericho, NY – April 25, 2022 – Esquire Financial Holdings, Inc. (NASDAQ: ESQ) (the “Company”), the financial holding company for Esquire Bank, National Association (“Esquire Bank”), today announced its operating results for the first quarter of 2022. Significant achievements during the quarter include:

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Net income of $5.3 million, or $0.66 per diluted share, as compared to $6.7 million, or $0.83 per diluted share on a linked quarter basis. Net income for the fourth quarter of 2021 included a tax benefit of approximately $1.2 million, or $0.14 per diluted share, related to the exercise of certain stock options.

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Returns on average assets and equity of 1.92% and 15.06%, respectively, as compared to 1.81% and 13.30% for the comparable prior year period.

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Industry leading net interest margin of 4.43% anchored by variable rate commercial loans and low-cost core deposits. Approximately 54% of our loan portfolio is variable rate and tied to prime, positively impacting earnings as short-term interest rates increase.

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Our loan portfolio increased $33.5 million, or 17% annualized, to $818.0 million on a linked quarter basis, as we continued to focus our efforts and resources on higher yielding variable rate commercial loans anchored by our national litigation portfolio. Excluding the final repayments of our Paycheck Protection Program (“PPP”) loans in the quarter, annualized loan growth was approximately 20%.

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Continued solid credit metrics, asset quality and reserve coverage ratios with minimal nonperforming loans and a reserve for loan losses to total loans of 1.16%.

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On April 1, 2022, the Company finalized the sale of its legacy NFL consumer post settlement loan portfolio to a third party sponsored entity (or “Fund”) in exchange for a nonvoting economic interest in the Fund valued at $13.5 million.

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Deposits increased $61.5 million on a linked quarter basis, or 24% annualized, to $1.1 billion supported by our stable low-cost core deposits with a cost-of-funds of 0.10%. Demand deposits and escrow-based NOW accounts represented 45% and 34% of total deposits, respectively, and were a direct result of our highly efficient branchless and technology-enabled deposit platforms. Off-balance sheet sweep funds totaled $618.0 million at quarter end, representing additional sources of funding for future growth.

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Continued stable payment processing fee income totaling $5.3 million across 68,000 small business clients nationally. Our technology enabled payments platform facilitated the processing of $6.2 billion in payment volume across 117.8 million transactions for our clients. Fee income represents 32% of total revenue.

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For the fourth consecutive year, the Company was named a top performing institution by Raymond James (Top Performing Community Banks in the US for 2021).

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Esquire Bank remains well above the bank regulatory “Well Capitalized” standards.

“Esquire’s industry leading performance metrics once again placed us among the top performing financial services companies in the country,” stated Tony Coelho, Chairman of the Board of Directors. “Our vision is to create a client-centric and technology-focused institution for our national verticals that is disruptive and valuable to these markets. We plan to continue to serve these markets, our shareholders, and team members with value creation beyond our financial sector peer group.”

The following information was filed by Esquire Financial Holdings, Inc. (ESQ) on Monday, April 25, 2022 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Esquire Financial Holdings, Inc.'s 10-Q Quarterly Report:

Financial - Earnings Highlight
Interest earning cash and other interest income increased $17 thousand, or 42.5%, to $57 thousand for the three months ended March 31, 2022 from $40 thousand for the three months ended March 31, 2021.

Revenue - Geography Highlight
Management considers the accounting policy relating to the allowance for loan losses to be a critical accounting policy given the inherent subjectivity and uncertainty in estimating the levels of the allowance required to cover loan losses in the portfolio and the material effect that such judgements can have on the results of operations.
Revenue - Product Highlight
The Company will lose its emerging growth company status on December 31, 2022 since that would be the last day of the fiscal year of the Company following the fifth anniversary of the date of the first sale of the common equity securities of the Company pursuant to an effective registration statement under the Securities Act of 1933.
Revenue - Product Highlight
A company loses emerging growth company status on the earlier of: (i) the last day of the fiscal year of the company during which it had total annual gross revenues of $1.07 billion or more; (ii) the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the company pursuant to an effective registration statement under the Securities Act of 1933; (iii) the date on which such company has, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; or (iv) the date on which such company is deemed to be a "large accelerated filer" under Securities and Exchange Commission regulations (generally, at least $700 million of voting and non-voting equity held by non-affiliates).
Financial - Expense Highlight
These forward-looking statements include, but are not limited to: statements of our goals, intentions and expectations; statements regarding our business plans, prospects, growth and operating strategies; statements regarding the quality of our loan and investment portfolios; and estimates of our risks and future costs and benefits.
Financial - Income
Critical accounting policies are defined...Read more
Financial - Income
Interest income increased $1.8 million,...Read more
Revenue - Product
Payment processing volumes and transactions...Read more
Revenue - Product
Securities available-for-sale decreased $14.2 million,...Read more
Financial - Expense
Noninterest expense information is as...Read more
Financial - Earnings
Our net interest margin decreased...Read more
Revenue - Product
The table distinguishes between: (1)...Read more
Revenue - Product
Our total assets were $1.2...Read more
Other - Other
Pursuant to the JOBS Act,...Read more
Financial - Expense
Interest expense increased $43 thousand,...Read more
Financial - Income
We recorded an income tax...Read more
Other - Other
In the event loan demand...Read more
Financial - Income
Noninterest income information is as...Read more
Other - Other
Interest rate risk is the...Read more
Revenue - Product
Quarterly volumes increased $1.3 billion,...Read more
Other - Other
Off-balance sheet sweep funds totaled...Read more
Financial - Expense
Travel and business relations costs...Read more
Other - Other
The CARES Act and implementing...Read more
Financial - Income
Net interest income increased $1.7...Read more
Financial - Shares
Effective January 1, 2020, the...Read more
Financial - Expense
Advertising and marketing costs decreased...Read more
Financial - Expense
Noninterest expense currently consists primarily...Read more
Financial - Expense
Data processing costs increased due...Read more
Financial - Earnings
Net income increased $1.2 million,...Read more
Other - Other
In 2020, management implemented a...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

Esquire Financial Holdings, Inc. provided additional information to their SEC Filing as exhibits

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32: Section 1350 Certification

Ticker: ESQ
CIK: 1531031
Form Type: 10-Q Quarterly Report
Accession Number: 0001558370-22-008795
Submitted to the SEC: Fri May 13 2022 5:18:32 PM EST
Accepted by the SEC: Fri May 13 2022
Period: Thursday, March 31, 2022
Industry: Commercial Banks

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Esquire Financial Holdings, Inc. (ESQ) SEC Filing 10-Q Quarterly Report for the period ending Thursday, March 31, 2022

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