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Exhibit 99.1
ESQUIRE FINANCIAL HOLDINGS, INC.
REPORTS SECOND QUARTER 2022 RESULTS
Strong Balance Sheet and Revenue Growth Drive Record Earnings and Returns
Jericho, NY – July 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 second quarter of 2022. Significant achievements during the quarter include:
● | Net income increased 19% to $6.4 million, or $0.78 per diluted share, as compared to $5.3 million, or $0.66 per diluted share on a linked quarter basis. Net income and diluted earnings per share were $4.5 million and $0.57, respectively, for the second quarter of 2021. |
● | Industry leading returns on average assets and equity of 2.00% and 17.81%, respectively, as compared to 1.92% and 15.06% on a linked quarter basis. Returns on average assets and equity were 1.84% and 13.76%, respectively, for the second quarter of 2021. |
● | Strong net interest margin of 4.46% anchored by variable rate commercial loans as loan yields improved 16 basis points on a linked quarter basis. The net interest margin was negatively impacted in the current quarter by elevated levels of interest earning cash balances. Approximately 59% of our loan portfolio is variable rate and primarily tied to prime. |
● | Our loan portfolio increased $41.3 million, or 20% annualized, to $859.3 million on a linked quarter basis, as we continued to focus our digital marketing efforts and resources on higher yielding commercial loans anchored by our national litigation platform. |
● | Continued solid credit metrics, asset quality and reserve coverage ratios with minimal nonperforming loans and a reserve for loan losses to total loans of 1.20%. |
● | Deposits increased $65.6 million on a linked quarter basis, or 24% annualized, to $1.2 billion with a cost-of-funds of 0.10% (including demand deposits), a direct result of our highly efficient branchless and technology enabled deposit platforms. Demand deposits and escrow-based NOW accounts represented 44% and 39% of total deposits, respectively. |
● | Off-balance sheet sweep funds totaled $496.8 million at quarter end while the associated administrative service payments (“ASP”) fees increased to $617 thousand due to increases in short-term interest rates. These sweeps represent additional sources of funding for future loan growth. |
● | Growth in payment processing fee income and small business clients nationally totaling $5.5 million and 72,000, respectively. Our technology enabled payments platform facilitated the processing of $7.1 billion in payment volume across 136.1 million transactions for our clients. Fee income represents 31% of total revenue. |
● | On June 2, 2022, the Company announced an exclusive agreement with B.E. Blank & Company (“BEB”) to provide growth capital financing to commercial law firms nationally. |
● | Effective June 27, 2022, the Company was added as a member of the broad-market Russell 3000 Index as part of the 2022 Russell indexes reconstitution. Based upon its membership in the Russell 3000 Index, the Company has also become a member of the small-cap Russell 2000 Index. |
● | Esquire Bank remains well above the bank regulatory “Well Capitalized” standards. |
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Esquire Financial Holdings, Inc.'s Definitive Proxy Statement (Form DEF 14A) filed after their 2022 10-K Annual Report includes:
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Our net interest margin decreased 3 basis points, due to elevated levels of average interest earning cash to manage customer settlement activity, to 4.46% for the three months ended June 30, 2022 from 4.49% for the three months ended June 30, 2021.
Our net interest margin decreased 6 basis points, due to elevated levels of average interest earning cash in the second quarter 2022 to manage customer settlement activity, to 4.44% for the six months ended June 30, 2022 from 4.50% for the six months ended June 30, 2021.
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.
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.
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).
Our extremely low historic delinquency...Read more
These forward-looking statements include, but...Read more
Critical accounting policies are defined...Read more
Hiring related costs, a component...Read more
Hiring related costs, a component...Read more
We have built a customized...Read more
(1) Towers Watson U.S. Tort...Read more
Noninterest expense information is as...Read more
Noninterest expense information is as...Read more
These increases were driven by...Read more
These increases were driven by...Read more
Our payment processing vertical has...Read more
The Company's foundation for success...Read more
Interest earning cash and other...Read more
Interest earning cash and other...Read more
Our branchless commercial banking loans...Read more
The table distinguishes between: (1)...Read more
The payment industry grew 9.7%...Read more
Pursuant to the JOBS Act,...Read more
Payment processing volumes and transactions...Read more
Payment processing volumes and transactions...Read more
Interest income increased $3.1 million,...Read more
Interest income increased $4.9 million,...Read more
Commercial loans increased $50.3 million,...Read more
Interest expense increased $89 thousand,...Read more
Interest expense increased $132 thousand,...Read more
Customer related fees and service...Read more
We recorded an income tax...Read more
We recorded an income tax...Read more
In the event loan demand...Read more
Customer related fees and service...Read more
Securities purchased under agreements to...Read more
Noninterest income information is as...Read more
Noninterest income information is as...Read more
Interest rate risk is the...Read more
Off-balance sheet sweep funds totaled...Read more
Off-balance sheet sweep funds totaled...Read more
Travel and business relations costs...Read more
Travel and business relations costs...Read more
The CARES Act and implementing...Read more
Net interest income increased $3.0...Read more
Net interest income increased $4.7...Read more
These factors (the unique industry,...Read more
Effective January 1, 2020, the...Read more
Noninterest expense currently consists primarily...Read more
The decrease in the provision...Read more
Data processing costs increased due...Read more
Data processing costs increased due...Read more
Total stockholders' equity increased $1.8...Read more
Net income increased $1.8 million,...Read more
Net income increased $3.0 million,...Read more
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
Ticker: ESQ
CIK: 1531031
Form Type: 10-Q Quarterly Report
Accession Number: 0001558370-22-013509
Submitted to the SEC: Fri Aug 12 2022 4:27:19 PM EST
Accepted by the SEC: Fri Aug 12 2022
Period: Thursday, June 30, 2022
Industry: Commercial Banks