Outperformance led by Commercial Loan
Growth and a Strong Net Interest Margin
JERICHO,
N.Y., Oct. 23, 2023 /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 third quarter of 2023. We
have included the following key updates, as well as significant
achievements during the quarter:
Relationship Banking with Strong Foundational
Balance Sheet Management
- Core commercial relationship banking clients in our two
national verticals represent approximately 85% of our $1.3 billion deposit base in the current quarter.
These relationship banking clients are derived from coupling
lending facilities, payment processing, and other unique custodial
banking needs with commercial cash management depository services,
leading to a stable and reliable core deposit base.
- Solid credit metrics, asset quality, and reserve coverage
ratios with no nonperforming loans at quarter end and a 1.38%
allowance for credit losses to loans ratio. Within our commercial
real estate portfolio, we have no exposure to commercial office
space and only $15.7 million of
exposure to the hospitality industry as of September 30, 2023.
- Our overall liquidity position (cash, borrowing capacity, and
available reciprocal client sweep balances) totaled $782.4 million, or 61% of total deposits.
- Uninsured deposits totaled $373.1
million, or 29%, of total deposits with approximately 85%
representing clients with full relationship banking including, but
not limited to, law firm operating accounts, certain balances of
escrow accounts, merchant reserves, ISO reserves, ACH processing,
and custodial accounts.
- Strong interest rate risk management with short duration assets
(approximately 60% of loans tied to prime). Coupling this with
low-cost core relationship deposits leads to an industry leading
net interest margin of 6.19%.
- Strong capital foundation with common equity tier 1 ("CET1")
and tangible common equity to tangible asset(1)
("TCE/TA") ratios of 14.34% and 12.52%, respectively. Including the
after tax unrealized losses on both the available-for-sale and
held-to-maturity securities portfolios of $17.4 million and $8.0
million, respectively, the adjusted(1) CET1 and
adjusted(1) TCE/TA ratios would have been 12.21% and
11.98%, respectively.
Significant Achievements and Key Performance
Metrics for the Quarter Ended September 30,
2023
- Net income increased 28% to $9.8
million, or $1.17 per diluted
share, as compared to $7.7 million,
or $0.94 per diluted share, for the
comparable quarter in 2022, and $9.1
million, or $1.10 per diluted
share for the second quarter of 2023.
- Industry leading returns on average assets and equity of 2.71%
and 21.44%, respectively, as compared to 2.48% and 20.60% for the
same period in 2022, and 2.65% and 21.03% for the second quarter of
2023.
(1) See
non-GAAP reconciliation provided at the end of this news
release.
- Continued expansion of our total revenue base fueled by an
industry leading net interest margin of 6.19% and strong fee-based
income totaling $6.5 million in the
current quarter, led by our payment processing platform. Fee income
represented 23% of total revenue.
- Significant loan growth totaling $57.7
million, or 22% annualized, to $1.1
billion on a linked quarter basis, focused primarily in
higher yielding variable rate commercial loans nationally and our
multi-family real estate portfolio. These newly originated
commercial loans have and will continue to create additional
opportunities for full commercial banking relationships (commercial
deposits).
- Stable low-cost core commercial relationship deposit model
totaling $1.3 billion and a
cost-of-funds of 0.69% (including demand deposits). We anticipate
continued increases in our cost-of-funds in response to the current
interest rate environment, which may negatively impact our net
interest margin in the future. Off-balance sheet sweep funds
totaled $457.3 million at quarter
end, with approximately 61% available for additional on-balance
sheet liquidity, while the associated administrative service
payments ("ASP") fees totaled $619
thousand.
- Stable and consistent payment processing fee income of
$5.6 million with continued increases
in small business clients nationally totaling 83,000. Our
technology enabled payments platform facilitated the processing of
$8.4 billion in credit and debit card
payment volume across 157.3 million transactions for our
clients.
- Strong efficiency ratio of 48.7% despite recent hires
including, but not limited to, senior business development/sales
officers ("BDOs"), senior underwriters and other support staff in
various areas focused on our client-centric relationship banking
model as well as risk and compliance management.
- On October 2, 2023, Esquire was
named to the Piper Sandler 2023 Bank & Thrift Small Market-All
Stars. This distinction identifies Esquire as one of the top
performing small-cap financial institutions in the country.
"Being named a top performing financial institution by the
investment banking community during 2023 is a testament to our
dedicated management team, valued employees, and client-centric
business model that continuously builds long-term stakeholder
value," stated Tony Coelho, Chairman
of the Board.
"Our continued investment in current resources including people
and technology clearly demonstrates the untapped potential of both
national verticals while also ensuring that we do not sacrifice our
focus on excellence in client service and overall risk management
across the entire Company," stated Andrew
C. Sagliocca, Vice Chairman, CEO, and President.
Third Quarter Earnings
Net income for the quarter ended September 30, 2023 was $9.8 million, or $1.17 per diluted share, compared to $7.7 million, or $0.94 per diluted share for the same period in
2022. Returns on average assets and equity for the current quarter
were 2.71% and 21.44%, respectively, compared to 2.48% and 20.60%
for the same period of 2022.
Net interest income for the third quarter of 2023 increased
$6.2 million, or 39.7%, to
$21.7 million, due to growth in
average interest earning assets (funded with core deposits)
totaling $200.7 million, or 16.8%, to
$1.4 billion as well as a 101 basis
point increase in our net interest margin to 6.19% when compared to
the same period in 2022. Our net interest margin was positively
impacted by growth in higher yielding variable rate commercial
loans and increases in short-term interest rates. The average yield
on loans increased 126 basis points to 7.79%, primarily driven by
higher yielding variable rate commercial loan growth (approximately
60% of our portfolio is tied to prime) that also drove core deposit
growth from our relationship banking platform. Average loans in the
quarter increased $235.7 million, or
27.6%, to $1.1 billion when compared
to the third quarter of 2022, primarily due to growth in our
national commercial lending platform and, to a lesser extent, our
regional real estate loan portfolio. Our loan-to-deposit ratio was
86.8% as our low-cost deposit base increased $95.1 million, or 8.0%, primarily due to growth
in our longer duration escrow deposit banking relationships.
Average securities in the quarter remained flat, totaling
$207.9 million and yields increased
28 basis points to 2.36% 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. In the current quarter,
management elected to close out its reverse repurchase agreements
and reinvest these funds into higher yielding commercial loans. Our
deposit cost-of-funds, excluding demand deposits, increased 88
basis points in the current quarter when compared to 2022 due to
increases in short-term interest rates as well as management
pro-actively increasing rates on escrow accounts in the various
states where we operate (interest on lawyer trust accounts or
IOLTA). We anticipate continued increases in our cost-of-funds due
to the current short-term interest rate environment. These
increases may negatively impact our net interest margin in future
quarters.
The provision for credit losses was $1.2
million for the third quarter of 2023, a $550 thousand increase from the third quarter
2022 provision. As of September 30,
2023, our allowance to loans ratio was 1.38% as compared to
1.24% as of September 30, 2022. 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 increased to $6.5
million for the third quarter of 2023 as compared to
$6.4 million in the same period for
2022. Payment processing income was $5.6 million for the third quarter of 2023, a
$163 thousand increase from the same
period in 2022. Payment processing volumes and transactions for the
credit and debit card processing platform increased $1.1 billion, or 14.6%, to $8.4 billion and 15.3 million, or 10.7%, to 157.3
million transactions, respectively, for the quarter ended
September 30, 2023 as compared to the
same period in 2022. 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 83,000 small business merchants in all 50
states, and perform commercial treasury clearing services. ASP fee
income decreased $267 thousand, or
30.1%, to $619 thousand for the third
quarter of 2023. 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. In September 2023, the Company's remaining
partnership interests in Litify were exchanged for cash and
undiscounted noncash consideration of approximately $2.9 million. As a result, the Company recognized
a gain on its investment of $1.3
million in the third quarter of 2023. The Company also
recognized an equity method loss of $1.3
million on its investment in a third party sponsored NFL
consumer post settlement loan fund. The NFL fund's primary
model assumptions were adjusted to extend the expected weighted
average life of the underlying assets by approximately one
year. The Company presents this investment in other assets
with a carrying amount of $10.7
million.
Noninterest expense increased $2.9
million, or 27.0%, to $13.8
million for the third quarter of 2023, as compared to the
same period in 2022. This increase was primarily due to increases
in employee compensation and benefits, data processing,
professional services costs, occupancy and equipment, and travel
and business relations. Employee compensation and benefits costs
increased $1.9 million, or 29.4%, due
to increases in staff and officer level employees to support growth
as well as the impact of year end salary, bonus and stock-based
compensation increases. In 2023, we hired six regional managing
directors/senior BDOs, resources within our commercial
underwriting/lending area, sales support staff, operational staff
to support Esquire's future growth plans as well as our risk
management and compliance areas, and a senior vice president and
chief legal officer/corporate secretary. Professional services
costs increased $485 thousand
primarily due to our focus on compliance and risk management in the
payment processing division. Data processing costs increased
$266 thousand due to increased
processing volume, primarily driven by our core banking platform,
and additional costs related to our technology implementations.
Travel and business relations costs increased $75 thousand, as a result of our high touch
marketing and sales efforts which complement our digital marketing
efforts. Occupancy and equipment costs increased $76 thousand due to amortization of our
investments in internally developed software to support our digital
platform and additional office space to support our growth.
The Company's efficiency ratio was 48.7% for the three months
ended September 30, 2023, as compared
to 49.3% in 2022, despite our significant increase in resources
including, but not limited to, people and technology to support
growth, risk management, and compliance. This improvement is
a result of our continued revenue growth driven by our core
national platforms. These national 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 26.0% for the third quarter of 2023,
as compared to 26.5% for the same period in 2022. The effective tax
rate in the third quarter of 2023 was impacted by certain discrete
tax benefits related to share-based compensation.
Year to Date Earnings
Net income for the nine months ended September 30, 2023 was $31.1 million, or $3.74 per diluted share, compared to $19.4 million, or $2.37 per diluted share for the same period in
2022. Returns on average assets and equity for the nine months
ended September 30, 2023 were 3.00%
and 24.09%, respectively, compared to 2.14% and 17.88% for the same
period of 2022. Excluding the year-to-date pretax gain of
$5.3 million on our Litify investment
and the $1.3 million equity method
loss on our investment in a third party sponsored NFL consumer post
settlement loan fund, adjusted(1) net income, diluted
earnings per share, return on average assets, and return on average
common equity for the nine months ended September 30, 2023 would have been $28.2 million, $3.39, 2.71% and 21.82%, respectively.
Net interest income for the nine months ended 2023 increased
$20.1 million, or 49.0%, to
$61.1 million, due to growth in
average interest earning assets (funded with core deposits)
totaling $175.6 million, or 15.0%, to
$1.3 billion as well as a 139 basis
point increase in our net interest margin to 6.08% when compared to
the same period in 2022. Our net interest margin was positively
impacted by growth in higher yielding variable rate commercial
loans and increases in short-term interest rates. The average yield
on loans increased 160 basis points to 7.68%, primarily driven by
higher yielding variable rate commercial loan growth (approximately
60% of our portfolio is tied to prime). Average loans for the nine
months ended September 30, 2023
increased $188.1 million, or 22.8%,
to $1.0 billion when compared to the
nine months ended September 30, 2022,
primarily due to growth in our national commercial lending platform
and, to a lesser extent, our regional real estate loans. Average
securities for the nine months ended September 30, 2023 increased $6.8 million to $208.3
million as yields increased 33 basis points to 2.30%
primarily due to reinvestment of portfolio cash flows into
securities at current market interest rates, increasing interest
income $606 thousand to $3.6 million for the nine months ended
September 30, 2023. The movement in
short-term interest rates increased yields and interest income on
our reverse repurchase agreements and interest earning cash
balances. Our deposit cost-of-funds, excluding demand deposits,
increased 78 basis points when comparing the first nine months of
2023 to the same period in 2022 due to increases in short-term
interest rates as well as management pro-actively increasing rates
on IOLTA or escrow accounts in the various states where we operate.
We anticipate additional increases in our cost-of-funds in the
future due to the current short-term interest rate environment.
These increases may negatively impact our net interest margin in
future quarters.
The provision for credit losses was $3.0
million for the nine months ended September 30, 2023, an $885 thousand increase from the same period in
2022. 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 increased to $23.5
million for the nine months ended September 30, 2023, as compared to $18.1 million in same period in 2022.
Payment processing income was $16.9
million for the nine months ended September 30, 2023, a $611
thousand increase from the same period in 2022. Payment
processing volumes and transactions for the credit and debit card
processing platform increased $3.8
billion, or 18.6%, to $24.5
billion and 61.0 million, or 15.4%, to 457.0 million
transactions, respectively, for the nine months ended September 30, 2023 as compared to the same period
in 2022. These increases were due to the expansion of sales
channels through ISOs, the 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
$375 thousand, or 24.8%, to
$1.9 million for the nine months
ended September 30, 2023 as average
balances of off-balance sheet sweep funds and the increases in
short-term interest rates directly impact fee income. In
February 2023, Litify was reorganized
into a partnership and an unrelated third party acquired majority
ownership in the reorganized entity. As an equity holder and party
to the reorganization and sale transaction, the Company's
partnership interests were exchanged for cash and undiscounted
noncash consideration of approximately $8.3
million. As a result, the Company recognized a gain of
$5.3 million in 2023. As previously
noted, the Company also recognized an equity method loss of
$1.3 million on its investment in a
third party sponsored NFL consumer post settlement loan fund in
2023.
(1) See
non-GAAP reconciliation provided at the end of this news
release.
Noninterest expense increased $8.6
million, or 28.1%, to $39.2
million for the nine months ended September 30, 2023, as compared to the same
period in 2022. This increase was primarily due to increases in
employee compensation and benefits, professional services costs,
data processing, hiring related costs, travel and business
relations, occupancy and equipment, and advertising and marketing.
Employee compensation and benefits costs increased $4.8 million, or 25.2%, due to increases in staff
and officer level employees to support growth as well as the impact
of year end salary, bonus and stock-based compensation increases.
As previously noted, we have made a significant investment in
people in almost all areas of our Company to support future growth,
client-centric relationship banking, and overall compliance and
risk management across all verticals. Professional
services costs increased $2.2 million
with $1.1 million representing costs
associated with the retention of a global executive search firm to
further expand our regional national sales capabilities (BDOs),
commercial underwriting support staff, and payment processing
staff. The remaining $1.1
million increase in professional services costs was
primarily due to incremental increases in insurance, legal,
accounting, risk management, and compliance costs. Data processing
costs increased $590 thousand due to
increased processing volume, primarily driven by our core banking
platform, and additional costs related to our technology
implementations. Travel and business relations costs increased
$245 thousand, as a result of our
high touch marketing and sales efforts which complement our digital
marketing efforts. Occupancy and equipment costs increased
$240 thousand due to amortization of
our investments in internally developed software to support our
digital platform and additional office space to support our growth.
Advertising and marketing costs increased $107 thousand, as we continued to grow our brand
and expand our thought leadership through digital marketing efforts
in our national verticals.
The Company's efficiency ratio was 46.4% for the nine months
ended September 30, 2023, as compared
to 51.7% in 2022, despite our investment in resources as noted
above. The adjusted(1) efficiency ratio was 48.7%
excluding the Litify gain of $5.3
million and the $1.3 million
loss on our investment in the NFL loan fund. Our national platforms
that drive our growth have benefited from our investments in
technology, digital marketing, employees, and other branchless
infrastructure that support our industry leading returns.
The effective tax rate for the nine months ended September 30, 2023, and 2022 was 26.5%.
Asset Quality
At September 30, 2023, there were
no nonperforming loans while the allowance for credit losses was
$15.3 million, or 1.38% of total
loans, as compared to $10.9 million,
or 1.24% of total loans at September 30,
2022. As of January 1, 2023,
the Company adopted the CECL Standard which increased its allowance
for credit losses as a percentage of loans by 2 basis points, or
$283 thousand, which was reflected as
an adjustment to retained earnings in the first quarter. The
remaining 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. As part of the adoption of the CECL Standard,
management established a credit reserve for unfunded loan
commitments of $500 thousand which is
classified in other liabilities on the Statement of Financial
Condition and reflected as an adjustment to retained earnings.
Balance Sheet
At September 30, 2023, total
assets were $1.5 billion, reflecting
a $134.9 million, or 10.0% increase
from September 30, 2022. This
increase was primarily attributable to growth in loans totaling
$238.3 million, or 27.2%, to
$1.1 billion. Our higher yielding
variable rate commercial loans increased $183.4 million, or 38.3%, 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
platforms. Our available-for-sale securities portfolio increased
$3.0 million to $114.4 million as compared to September 30, 2022 driven by purchases partially
offset by paydowns and unrealized losses associated with the
current interest rate environment. Our held-to-maturity securities
portfolio decreased $1.3 million to
$78.8 million as compared to
September 30, 2022. In the current
quarter, 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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
September 30,
|
|
|
|
2023
|
|
|
2022
|
|
|
2022
|
|
|
|
(Dollars in thousands)
|
|
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multifamily
|
|
$
|
327,653
|
|
29.4
|
%
|
|
$
|
262,489
|
|
27.7
|
%
|
|
$
|
263,689
|
|
30.1
|
%
|
Commercial real
estate
|
|
|
90,052
|
|
8.1
|
|
|
|
91,837
|
|
9.7
|
|
|
|
83,515
|
|
9.5
|
|
1 – 4 family
|
|
|
20,974
|
|
1.9
|
|
|
|
25,565
|
|
2.7
|
|
|
|
31,496
|
|
3.6
|
|
Total real
estate
|
|
|
438,679
|
|
39.4
|
|
|
|
379,891
|
|
40.1
|
|
|
|
378,700
|
|
43.2
|
|
Commercial
|
|
|
662,272
|
|
59.4
|
|
|
|
552,082
|
|
58.2
|
|
|
|
478,854
|
|
54.7
|
|
Consumer
|
|
|
13,390
|
|
1.2
|
|
|
|
16,580
|
|
1.7
|
|
|
|
18,424
|
|
2.1
|
|
Total loans held for
investment
|
|
$
|
1,114,341
|
|
100.0
|
%
|
|
$
|
948,553
|
|
100.0
|
%
|
|
$
|
875,978
|
|
100.0
|
%
|
Deferred loan fees and
unearned premiums, net
|
|
|
(903)
|
|
|
|
|
|
(1,258)
|
|
|
|
|
|
(864)
|
|
|
|
Loans, held for
investment
|
|
$
|
1,113,438
|
|
|
|
|
$
|
947,295
|
|
|
|
|
$
|
875,114
|
|
|
|
Total deposits were $1.3 billion
as of September 30, 2023, a
$95.1 million, or 8.0%, increase from
September 30, 2022. This was
primarily due to a $79.4 million, or
11.0%, increase in Savings, NOW and Money Market deposits, driven
by our IOLTA (escrow) deposits. Our deposit strategy primarily
focuses on developing full service commercial banking relationships
with our clients through lending facilities, payment processing,
and other unique service orientated relationships in our two
national verticals, rather than just competing with other
institutions on rate. Our longer duration IOLTA, escrow and
claimant trust settlement deposits represent $651.9 million, or 50.8%, of total deposits.
These law firm escrow accounts, as well as other fiduciary deposit
accounts, are for the benefit of the law firm's clients (or
claimants) and are titled in a manner to ensure that the maximum
amount of FDIC insurance coverage passes through the account to the
beneficial owner of the funds held in the account. Therefore, these
law firm escrow accounts carry FDIC insurance at the claimant
settlement level, not at the deposit account level. As of
September 30, 2023, uninsured
deposits were $373.1 million, or 29%,
of our total deposits of $1.3
billion, excluding $6.7
million of affiliate deposits held by the Bank.
Approximately 85% 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 September 30,
2023, off-balance sheet sweep funds totaled approximately
$457.3 million, of which
approximately $310.4 million, or
67.9%, was available to be swept back 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 September 30, 2023, we had the
ability to borrow up to $279.6 million from the FHLB of New York and $58.2
million from the FRB of New York discount
window. No borrowing amounts were outstanding in 2023.
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. Additionally, the Company has
access to the Federal Reserve Bank Term Funding Program but has not
drawn on such facility.
Stockholders' equity increased $37.1
million to $185.6 million as
of September 30, 2023 when compared
to September 30, 2022. This increase
was primarily due to net income and amortization of share-based
compensation, partially offset by the following items: increases in
dividends declared to common stockholders; increases in other
comprehensive losses; a January 1,
2023 reduction attributable to the adoption of the CECL
standard; and the repurchase of 8,000 shares of common stock. The
other comprehensive loss reflects the current unrealized losses on
our available-for-sale agency MBS portfolio, net of tax, that have
been negatively impacted by recent increases in short-term market
interest rates.
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
September 30,
|
|
|
|
2023
|
|
2022
|
|
2022
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
120,646
|
|
$
|
164,122
|
|
$
|
182,125
|
|
Securities purchased
under agreements to resell, at cost
|
|
|
—
|
|
|
49,567
|
|
|
50,225
|
|
Securities
available-for-sale, at fair value
|
|
|
114,373
|
|
|
109,269
|
|
|
111,375
|
|
Securities
held-to-maturity, at cost
|
|
|
78,779
|
|
|
78,377
|
|
|
80,102
|
|
Securities, restricted
at cost
|
|
|
2,928
|
|
|
2,810
|
|
|
2,810
|
|
Loans, held for
investment
|
|
|
1,113,438
|
|
|
947,295
|
|
|
875,114
|
|
Less: allowance for
credit losses (1)
|
|
|
(15,328)
|
|
|
(12,223)
|
|
|
(10,885)
|
|
Loans, net of
allowance
|
|
|
1,098,110
|
|
|
935,072
|
|
|
864,229
|
|
Premises and equipment,
net
|
|
|
2,503
|
|
|
2,704
|
|
|
2,852
|
|
Other assets
|
|
|
65,073
|
|
|
53,718
|
|
|
53,825
|
|
Total Assets
|
|
$
|
1,482,412
|
|
$
|
1,395,639
|
|
$
|
1,347,543
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
|
Demand
deposits
|
|
$
|
472,073
|
|
$
|
444,324
|
|
$
|
445,557
|
|
Savings, NOW and money
market deposits
|
|
|
802,332
|
|
|
764,354
|
|
|
722,972
|
|
Certificates of
deposit
|
|
|
8,188
|
|
|
19,558
|
|
|
18,928
|
|
Total
deposits
|
|
|
1,282,593
|
|
|
1,228,236
|
|
|
1,187,457
|
|
Other
liabilities
|
|
|
14,209
|
|
|
9,245
|
|
|
11,548
|
|
Total
liabilities
|
|
|
1,296,802
|
|
|
1,237,481
|
|
|
1,199,005
|
|
Total stockholders'
equity
|
|
|
185,610
|
|
|
158,158
|
|
|
148,538
|
|
Total Liabilities and Stockholders'
Equity
|
|
$
|
1,482,412
|
|
$
|
1,395,639
|
|
$
|
1,347,543
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Financial Data
|
|
|
|
|
|
|
|
|
|
|
Common shares
outstanding
|
|
|
8,203,259
|
|
|
8,195,333
|
|
|
8,082,918
|
|
Book value per
share
|
|
$
|
22.63
|
|
$
|
19.30
|
|
$
|
18.38
|
|
Equity to
assets
|
|
|
12.52
|
%
|
|
11.33
|
%
|
|
11.02
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Capital Ratios (2)
|
|
|
|
|
|
|
|
|
|
|
Tier 1 leverage
ratio
|
|
|
11.98
|
%
|
|
10.98
|
%
|
|
11.57
|
%
|
Common equity tier 1
capital ratio
|
|
|
14.34
|
%
|
|
14.21
|
%
|
|
14.77
|
%
|
Tier 1 capital
ratio
|
|
|
14.34
|
%
|
|
14.21
|
%
|
|
14.77
|
%
|
Total capital
ratio
|
|
|
15.59
|
%
|
|
15.44
|
%
|
|
15.90
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality
|
|
|
|
|
|
|
|
|
|
|
Nonperforming
loans
|
|
$
|
—
|
|
$
|
4
|
|
$
|
5,820
|
|
Allowance for credit
losses to total loans
|
|
|
1.38
|
%
|
|
1.29
|
%
|
|
1.24
|
%
|
Nonperforming loans to
total loans
|
|
|
0.00
|
%
|
|
0.00
|
%
|
|
0.67
|
%
|
Nonperforming assets to
total assets
|
|
|
0.00
|
%
|
|
0.00
|
%
|
|
0.43
|
%
|
Allowance to
nonperforming loans
|
|
|
NM
|
|
|
NM
|
|
|
187
|
|
|
|
(1)
|
Results for reporting
periods beginning after January 1, 2023 are presented under
the CECL Standard while prior period amounts are reported in
accordance with previously applicable GAAP.
|
(2)
|
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
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
|
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Interest
income
|
|
$
|
23,901
|
|
$
|
22,055
|
|
$
|
15,960
|
|
$
|
66,321
|
|
$
|
41,940
|
|
Interest
expense
|
|
|
2,176
|
|
|
1,966
|
|
|
413
|
|
|
5,218
|
|
|
934
|
|
Net interest
income
|
|
|
21,725
|
|
|
20,089
|
|
|
15,547
|
|
|
61,103
|
|
|
41,006
|
|
Provision for credit
losses (1)
|
|
|
1,200
|
|
|
1,325
|
|
|
650
|
|
|
3,025
|
|
|
2,140
|
|
Net interest income
after provision for credit losses
|
|
|
20,525
|
|
|
18,764
|
|
|
14,897
|
|
|
58,078
|
|
|
38,866
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment processing
fees
|
|
|
5,621
|
|
|
5,764
|
|
|
5,458
|
|
|
16,898
|
|
|
16,287
|
|
(Loss) gain on equity
investments
|
|
|
(14)
|
|
|
—
|
|
|
—
|
|
|
4,013
|
|
|
—
|
|
Other noninterest
income
|
|
|
921
|
|
|
931
|
|
|
974
|
|
|
2,574
|
|
|
1,856
|
|
Total noninterest
income
|
|
|
6,528
|
|
|
6,695
|
|
|
6,432
|
|
|
23,485
|
|
|
18,143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation
and benefits
|
|
|
8,433
|
|
|
7,803
|
|
|
6,519
|
|
|
23,720
|
|
|
18,952
|
|
Other
expenses
|
|
|
5,326
|
|
|
5,173
|
|
|
4,319
|
|
|
15,496
|
|
|
11,657
|
|
Total noninterest
expense
|
|
|
13,759
|
|
|
12,976
|
|
|
10,838
|
|
|
39,216
|
|
|
30,609
|
|
Income before income
taxes
|
|
|
13,294
|
|
|
12,483
|
|
|
10,491
|
|
|
42,347
|
|
|
26,400
|
|
Income taxes
|
|
|
3,457
|
|
|
3,370
|
|
|
2,780
|
|
|
11,218
|
|
|
6,996
|
|
Net income
|
|
$
|
9,837
|
|
$
|
9,113
|
|
$
|
7,711
|
|
$
|
31,129
|
|
$
|
19,404
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.27
|
|
$
|
1.18
|
|
$
|
1.01
|
|
$
|
4.04
|
|
$
|
2.54
|
|
Diluted
|
|
|
1.17
|
|
|
1.10
|
|
|
0.94
|
|
|
3.74
|
|
|
2.37
|
|
Basic - adjusted
(2)
|
|
|
1.28
|
|
|
1.18
|
|
|
1.01
|
|
|
3.66
|
|
|
2.54
|
|
Diluted - adjusted
(2)
|
|
|
1.17
|
|
|
1.10
|
|
|
0.94
|
|
|
3.39
|
|
|
2.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Financial Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
|
2.71
|
%
|
|
2.65
|
%
|
|
2.48
|
%
|
|
3.00
|
%
|
|
2.14
|
%
|
Return on average
equity
|
|
|
21.44
|
|
|
21.03
|
|
|
20.60
|
|
|
24.09
|
|
|
17.88
|
|
Adjusted return on
average assets (2)
|
|
|
2.71
|
|
|
2.65
|
|
|
2.48
|
|
|
2.71
|
|
|
2.14
|
|
Adjusted return on
average equity (2)
|
|
|
21.46
|
|
|
21.03
|
|
|
20.60
|
|
|
21.82
|
|
|
17.88
|
|
Net interest
margin
|
|
|
6.19
|
|
|
6.02
|
|
|
5.18
|
|
|
6.08
|
|
|
4.69
|
|
Efficiency ratio
(2)
|
|
|
48.7
|
|
|
48.4
|
|
|
49.3
|
|
|
46.4
|
|
|
51.7
|
|
Adjusted efficiency
ratio (2)
|
|
|
48.7
|
|
|
48.4
|
|
|
49.3
|
|
|
48.7
|
|
|
51.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends paid per
common share
|
|
$
|
0.125
|
|
$
|
0.125
|
|
$
|
0.090
|
|
$
|
0.350
|
|
$
|
0.180
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average basic
shares
|
|
|
7,717,971
|
|
|
7,708,350
|
|
|
7,637,407
|
|
|
7,711,722
|
|
|
7,628,903
|
|
Weighted average
diluted shares
|
|
|
8,379,112
|
|
|
8,299,704
|
|
|
8,226,214
|
|
|
8,330,109
|
|
|
8,186,097
|
|
|
|
(1)
|
Results for reporting
periods beginning after January 1, 2023 are presented under
the CECL Standard while prior period amounts are reported in
accordance with previously applicable GAAP.
|
(2)
|
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
|
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
|
|
2023
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
|
Average
|
|
|
|
Average
|
|
|
|
|
Yield/
|
|
Average
|
|
|
|
|
Yield/
|
|
Average
|
|
|
|
|
Yield/
|
|
|
|
Balance
|
|
Interest
|
|
Cost
|
|
Balance
|
|
Interest
|
|
Cost
|
|
Balance
|
|
Interest
|
|
Cost
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
|
|
|
|
|
INTEREST EARNING
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, held for
investment
|
|
$
|
1,090,112
|
|
$
|
21,408
|
|
7.79
|
%
|
$
|
993,353
|
|
$
|
19,137
|
|
7.73
|
%
|
$
|
854,447
|
|
$
|
14,055
|
|
6.53
|
%
|
Securities, includes
restricted stock
|
|
|
207,873
|
|
|
1,238
|
|
2.36
|
%
|
|
208,211
|
|
|
1,189
|
|
2.29
|
%
|
|
214,722
|
|
|
1,126
|
|
2.08
|
%
|
Securities purchased
under agreements to resell
|
|
|
9,932
|
|
|
158
|
|
6.31
|
%
|
|
49,963
|
|
|
715
|
|
5.74
|
%
|
|
49,771
|
|
|
377
|
|
3.01
|
%
|
Interest earning cash
and other
|
|
|
84,581
|
|
|
1,097
|
|
5.15
|
%
|
|
85,991
|
|
|
1,014
|
|
4.73
|
%
|
|
72,902
|
|
|
402
|
|
2.19
|
%
|
Total interest earning
assets
|
|
|
1,392,498
|
|
|
23,901
|
|
6.81
|
%
|
|
1,337,518
|
|
|
22,055
|
|
6.61
|
%
|
|
1,191,842
|
|
|
15,960
|
|
5.31
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST EARNING
ASSETS
|
|
|
49,762
|
|
|
|
|
|
|
|
44,004
|
|
|
|
|
|
|
|
43,358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL AVERAGE
ASSETS
|
|
$
|
1,442,260
|
|
|
|
|
|
|
$
|
1,381,522
|
|
|
|
|
|
|
$
|
1,235,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST BEARING
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, Money
Market deposits
|
|
$
|
722,684
|
|
$
|
1,988
|
|
1.09
|
%
|
$
|
673,154
|
|
$
|
1,809
|
|
1.08
|
%
|
$
|
572,966
|
|
$
|
368
|
|
0.25
|
%
|
Time
deposits
|
|
|
18,565
|
|
|
187
|
|
4.00
|
%
|
|
16,234
|
|
|
156
|
|
3.85
|
%
|
|
19,141
|
|
|
44
|
|
0.91
|
%
|
Total interest bearing
deposits
|
|
|
741,249
|
|
|
2,175
|
|
1.16
|
%
|
|
689,388
|
|
|
1,965
|
|
1.14
|
%
|
|
592,107
|
|
|
412
|
|
0.28
|
%
|
Borrowings
|
|
|
46
|
|
|
1
|
|
8.62
|
%
|
|
46
|
|
|
1
|
|
8.72
|
%
|
|
48
|
|
|
1
|
|
8.27
|
%
|
Total interest bearing
liabilities
|
|
|
741,295
|
|
|
2,176
|
|
1.16
|
%
|
|
689,434
|
|
|
1,966
|
|
1.14
|
%
|
|
592,155
|
|
|
413
|
|
0.28
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST BEARING
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand
deposits
|
|
|
501,841
|
|
|
|
|
|
|
|
500,058
|
|
|
|
|
|
|
|
481,599
|
|
|
|
|
|
|
Other
liabilities
|
|
|
17,091
|
|
|
|
|
|
|
|
18,231
|
|
|
|
|
|
|
|
12,966
|
|
|
|
|
|
|
Total noninterest
bearing liabilities
|
|
|
518,932
|
|
|
|
|
|
|
|
518,289
|
|
|
|
|
|
|
|
494,565
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
182,033
|
|
|
|
|
|
|
|
173,799
|
|
|
|
|
|
|
|
148,480
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL AVG. LIABILITIES
AND EQUITY
|
|
$
|
1,442,260
|
|
|
|
|
|
|
$
|
1,381,522
|
|
|
|
|
|
|
$
|
1,235,200
|
|
|
|
|
|
|
Net interest
income
|
|
|
|
|
$
|
21,725
|
|
|
|
|
|
|
$
|
20,089
|
|
|
|
|
|
|
$
|
15,547
|
|
|
|
Net interest
spread
|
|
|
|
|
|
|
|
5.65
|
%
|
|
|
|
|
|
|
5.47
|
%
|
|
|
|
|
|
|
5.03
|
%
|
Net interest
margin
|
|
|
|
|
|
|
|
6.19
|
%
|
|
|
|
|
|
|
6.02
|
%
|
|
|
|
|
|
|
5.18
|
%
|
ESQUIRE FINANCIAL
HOLDINGS, INC.
|
Consolidated Average
Balance Sheets and Average Yield/Cost (unaudited)
|
(dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2023
|
|
2022
|
|
|
|
Average
|
|
|
|
|
Average
|
|
Average
|
|
|
|
|
Average
|
|
|
|
Balance
|
|
Interest
|
|
Yield/Cost
|
|
Balance
|
|
Interest
|
|
Yield/Cost
|
|
|
|
(Dollars in thousands)
|
|
INTEREST EARNING
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, held for
investment
|
|
$
|
1,012,469
|
|
$
|
58,160
|
|
7.68
|
%
|
$
|
824,402
|
|
$
|
37,499
|
|
6.08
|
%
|
Securities, includes
restricted stock
|
|
|
208,298
|
|
|
3,581
|
|
2.30
|
%
|
|
201,502
|
|
|
2,975
|
|
1.97
|
%
|
Securities purchased
under agreements to resell
|
|
|
36,289
|
|
|
1,526
|
|
5.62
|
%
|
|
49,307
|
|
|
699
|
|
1.90
|
%
|
Interest earning cash
and other
|
|
|
86,247
|
|
|
3,054
|
|
4.73
|
%
|
|
92,617
|
|
|
767
|
|
1.11
|
%
|
Total interest earning
assets
|
|
|
1,343,303
|
|
|
66,321
|
|
6.60
|
%
|
|
1,167,828
|
|
|
41,940
|
|
4.80
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST EARNING
ASSETS
|
|
|
45,836
|
|
|
|
|
|
|
|
46,577
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL AVERAGE
ASSETS
|
|
$
|
1,389,139
|
|
|
|
|
|
|
$
|
1,214,405
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST BEARING
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, Money
Market deposits
|
|
$
|
681,613
|
|
$
|
4,809
|
|
0.94
|
%
|
$
|
557,316
|
|
$
|
841
|
|
0.20
|
%
|
Time
deposits
|
|
|
14,774
|
|
|
406
|
|
3.67
|
%
|
|
19,186
|
|
|
90
|
|
0.63
|
%
|
Total interest bearing
deposits
|
|
|
696,387
|
|
|
5,215
|
|
1.00
|
%
|
|
576,502
|
|
|
931
|
|
0.22
|
%
|
Borrowings
|
|
|
46
|
|
|
3
|
|
8.72
|
%
|
|
67
|
|
|
3
|
|
5.99
|
%
|
Total interest bearing
liabilities
|
|
|
696,433
|
|
|
5,218
|
|
1.00
|
%
|
|
576,569
|
|
|
934
|
|
0.22
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST BEARING
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand
deposits
|
|
|
502,211
|
|
|
|
|
|
|
|
481,887
|
|
|
|
|
|
|
Other
liabilities
|
|
|
17,737
|
|
|
|
|
|
|
|
10,817
|
|
|
|
|
|
|
Total noninterest
bearing liabilities
|
|
|
519,948
|
|
|
|
|
|
|
|
492,704
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
172,758
|
|
|
|
|
|
|
|
145,132
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL AVG. LIABILITIES
AND EQUITY
|
|
$
|
1,389,139
|
|
|
|
|
|
|
$
|
1,214,405
|
|
|
|
|
|
|
Net interest
income
|
|
|
|
|
$
|
61,103
|
|
|
|
|
|
|
$
|
41,006
|
|
|
|
Net interest
spread
|
|
|
|
|
|
|
|
5.60
|
%
|
|
|
|
|
|
|
4.58
|
%
|
Net interest
margin
|
|
|
|
|
|
|
|
6.08
|
%
|
|
|
|
|
|
|
4.69
|
%
|
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 loss
(gain), net of tax, on the Company's equity investments.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Net income –
GAAP
|
$
|
9,837
|
|
$
|
9,113
|
|
$
|
7,711
|
|
$
|
31,129
|
|
$
|
19,404
|
|
Less: loss
(gain) on equity investments
|
|
14
|
|
|
—
|
|
|
—
|
|
|
(4,013)
|
|
|
—
|
|
Add:
income tax impact
|
|
(4)
|
|
|
—
|
|
|
—
|
|
|
1,083
|
|
|
—
|
|
Adjusted net
income
|
$
|
9,847
|
|
$
|
9,113
|
|
$
|
7,711
|
|
$
|
28,199
|
|
$
|
19,404
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets – GAAP
|
|
2.71
|
%
|
|
2.65
|
%
|
|
2.48
|
%
|
|
3.00
|
%
|
|
2.14
|
%
|
Adjusted return on
average assets
|
|
2.71
|
%
|
|
2.65
|
%
|
|
2.48
|
%
|
|
2.71
|
%
|
|
2.14
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
equity – GAAP
|
|
21.44
|
%
|
|
21.03
|
%
|
|
20.60
|
%
|
|
24.09
|
%
|
|
17.88
|
%
|
Adjusted return on
average equity
|
|
21.46
|
%
|
|
21.03
|
%
|
|
20.60
|
%
|
|
21.82
|
%
|
|
17.88
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share – GAAP
|
$
|
1.27
|
|
$
|
1.18
|
|
$
|
1.01
|
|
$
|
4.04
|
|
$
|
2.54
|
|
Adjusted basic earnings
per share
|
$
|
1.28
|
|
$
|
1.18
|
|
$
|
1.01
|
|
$
|
3.66
|
|
$
|
2.54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share – GAAP
|
$
|
1.17
|
|
$
|
1.10
|
|
$
|
0.94
|
|
$
|
3.74
|
|
$
|
2.37
|
|
Adjusted diluted
earnings per share
|
$
|
1.17
|
|
$
|
1.10
|
|
$
|
0.94
|
|
$
|
3.39
|
|
$
|
2.37
|
|
The following table presents a reconciliation of efficiency
ratio (non-GAAP) and adjusted efficiency ratio (non-GAAP).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Efficiency ratio –
non-GAAP(1)
|
|
48.7
|
%
|
|
48.4
|
%
|
|
49.3
|
%
|
|
46.4
|
%
|
|
51.7
|
%
|
Noninterest expense –
GAAP
|
$
|
13,759
|
|
$
|
12,976
|
|
$
|
10,838
|
|
$
|
39,216
|
|
$
|
30,609
|
|
Net interest income –
GAAP
|
|
21,725
|
|
|
20,089
|
|
|
15,547
|
|
|
61,103
|
|
|
41,006
|
|
Noninterest income –
GAAP
|
|
6,528
|
|
|
6,695
|
|
|
6,432
|
|
|
23,485
|
|
|
18,143
|
|
Less: loss
(gain) on equity investments
|
|
14
|
|
|
—
|
|
|
—
|
|
|
(4,013)
|
|
|
—
|
|
Adjusted noninterest
income – non-GAAP
|
$
|
6,542
|
|
$
|
6,695
|
|
$
|
6,432
|
|
$
|
19,472
|
|
$
|
18,143
|
|
Adjusted efficiency
ratio – non-GAAP(2)
|
|
48.7
|
%
|
|
48.4
|
%
|
|
49.3
|
%
|
|
48.7
|
%
|
|
51.7
|
%
|
|
|
(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):
|
|
|
|
|
September 30,
|
|
|
2023
|
|
Total assets -
GAAP
|
$
|
1,482,412
|
|
Less: intangible
assets
|
|
—
|
|
Tangible assets ("TA")
- non-GAAP
|
|
1,482,412
|
|
|
|
|
|
Total stockholders'
equity - GAAP
|
$
|
185,610
|
|
Less:
intangible assets
|
|
—
|
|
Less:
preferred stock
|
|
—
|
|
Tangible common equity
("TCE") - non-GAAP
|
|
185,610
|
|
Add: unrecognized
losses on securities held-to-maturity, net of tax
|
|
(7,993)
|
|
Adjusted TCE -
non-GAAP
|
$
|
177,617
|
|
|
|
|
|
Stockholders' equity to
assets - GAAP
|
|
12.52
|
%
|
TCE to TA -
non-GAAP
|
|
12.52
|
%
|
Adjusted TCE to TA -
non-GAAP
|
|
11.98
|
%
|
The following table presents the common equity tier 1 capital
ratio and the adjusted common equity tier 1 capital ratio:
|
|
|
|
|
September 30,
|
|
|
2023
|
|
Common equity tier 1
("CET1") capital - Bank
|
$
|
170,558
|
|
Less: unrealized losses
on securities available-for-sale , net of tax
|
|
(17,401)
|
|
Less: unrecognized
losses on securities held-to-maturity, net of tax
|
|
(7,993)
|
|
Adjusted CET1 capital -
Bank
|
$
|
145,164
|
|
|
|
|
|
Total risk-weighted
assets - Bank
|
$
|
1,189,300
|
|
|
|
|
|
CET1 capital
ratio(1)
|
|
14.34
|
%
|
Adjusted CET1 capital
ratio(1)
|
|
12.21
|
%
|
|
|
(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-third-quarter-2023-results-301963891.html
SOURCE Esquire Financial Holdings, Inc.