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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): January 22, 2026
Esquire Financial Holdings, Inc.
(Exact name of the registrant as specified in its charter)
Maryland |
001-38131 |
27-5107901 |
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(State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(IRS Employer Identification No.) |
100 Jericho Quadrangle, Suite 100 |
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Jericho, New York |
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11753 |
(Address of principal executive offices) |
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(Zip Code) |
(516) 535-2002
(Registrant’s telephone number)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (See General Instruction A.2. below):
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4c) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
Common Stock, $0.01 par value |
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ESQ |
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The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02Results of Operations and Financial Condition.
On January 22, 2026, Esquire Financial Holdings, Inc. (the “Company”), the holding company for Esquire Bank, National Association (“Esquire Bank”), issued a press release announcing its earnings for the fourth quarter and full year 2025. A copy of the press release is attached as Exhibit 99.1 hereto and incorporated herein by reference.
The information contained in this Item 2.02 and Exhibit 99.1 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any filings made by the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as expressly set forth by specific reference in such filing.
Item 7.01Regulation FD Disclosure.
Esquire Financial Holdings, Inc. (the “Company”) intends to distribute and make available to investors, and to post on its website, the written presentation attached hereto as Exhibit 99.2. The presentation is furnished in this Current Report on Form 8-K, pursuant to this Item 7.01, as Exhibit 99.2, and is incorporated herein by reference.
The information contained in this Item 7.01 and Exhibit 99.2 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any filings made by the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as expressly set forth by specific reference in such filing.
Item 9.01Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. |
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Description |
99.1 |
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99.2 |
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Written presentation to be distributed and made available to investors and posted |
104 |
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Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
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ESQUIRE FINANCIAL HOLDINGS, INC. |
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Dated: January 22, 2026 |
By:/s/ Andrew C. Sagliocca |
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Andrew C. Sagliocca |
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Vice Chairman, Chief Executive Officer and President |
Exhibit 99.1
ESQUIRE FINANCIAL HOLDINGS, INC.
REPORTS FOURTH QUARTER AND FULL YEAR 2025 RESULTS
Significant Commercial Loan and Deposit Growth Nationally Positions Esquire for Continued Success in 2026
Jericho, NY – January 22, 2026 – 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 fourth quarter and full year 2025. Significant achievements and key performance metrics during the current quarter and year include:
| ● | Net income increased 14.6% to $13.5 million, or $1.55 per diluted share in the current quarter, as compared to $11.8 million, or $1.37 per diluted share, for the comparable quarter in 2024 despite a $1.2 million increase in the provision for credit losses and a $3.4 million increase in total noninterest expense. For the full year of 2025, net income increased 16.4% to $50.8 million notwithstanding a $5.0 million increase in the provision for credit losses and a $10.4 million increase in total noninterest expense when compared to 2024. During the current quarter and full year 2025, certain discrete tax benefits related to share-based compensation reduced the reported tax rate to 22.8% and 22.6%, respectively, as compared to 25.0% and 26.4% for the fourth quarter and full year 2024, respectively. Excluding these compensation related items, our 2025 and 2024 normalized effective tax rate was approximately 27%. |
| ● | On a linked quarter basis, pretax profit was relatively flat despite a $1.2 million increase in the provision for credit losses due to significant commercial law firm loan growth and a $704 thousand increase in total noninterest expenses in the current quarter. |
| ● | Consistent industry leading returns on average assets and equity of 2.36% and 18.90% in the current quarter, respectively, and 2.43% and 19.41% for full year 2025, respectively, notwithstanding our continued investment in current resources to support future growth and excellence in client service while also maintaining excess capital with an equity to assets ratio of 12.2%. |
| ● | Resilient net interest margin of 6.05% and 6.02% in the current quarter and full year 2025, respectively, led by our national litigation platform growth, despite continued declines in short-term market interest rates from their highs in 2023. Total full year revenue increased $21.7 million, or 17.4%, to $146.6 million when comparing 2025 to 2024. |
| ● | Significant loan growth on a linked quarter basis totaling $211.4 million, or 54.2% annualized, to $1.76 billion, fueled by a $185.3 million or a 74.0% annualized increase in higher yielding commercial litigation related loans nationally. Growth was led by both new lending facility originations of $68.5 million and net draws on existing facilities of $116.8 million, respectively. As in previous years, we anticipate that a portion of these draws may pay down in early 2026, tempering first quarter 2026 loan growth. Average loans grew $122.9 million or 31.8% annualized to $1.66 billion on a linked quarter basis. For the full year 2025, loans grew $361.4 million, or 25.9%, when compared to $1.40 billion in 2024 with commercial litigation loan growth totaling $342.5 million or 41.0%. These commercial relationships will continue to create additional opportunities for future loan growth (future draws on existing facilities and additional availability on renewed lines-of-credit) as well as future growth in core deposits through our full-service commercial relationship banking programs and commercial cash management platform on a national basis. |
| ● | Significant corresponding commercial core deposit growth on a linked quarter basis totaling $183.5 million, or 38.9% annualized, to $2.06 billion, comprised of low-cost commercial relationship deposits with a cost-of-funds of 1.00% (including demand deposits). Growth on a linked quarter basis was fueled by our litigation related escrow or IOLTA deposits nationally. We anticipate that a portion of these elevated escrow/IOLTA funds may be disbursed in early 2026 to claimants, tempering first quarter deposit growth. For the full year 2025, core deposits grew $428.7 million, or 26.3%, when compared to $1.63 billion in 2024. Off-balance sheet sweep funds increased $182 million, or 33%, to $736.6 million when compared to year-end 2024, with approximately 61.0% available for additional on-balance sheet liquidity, while the associated administrative service payments (“ASP”) fee income totaled $741 thousand for the current quarter. Additional available liquidity, excluding the aforementioned sweeps, totaled approximately $1.1 billion. |
1
| ● | Solid credit metrics, asset quality, and reserve coverage ratios with an allowance for credit losses to loans ratio of 1.37%, nonperforming loans totaling $8.6 million, and nonperforming loans to total assets ratio of 0.36%. |
| ● | Stable and consistent noninterest income in the current quarter totaling $6.1 million, or 16% of total revenue, led by our payment processing platform with 93,000 small business clients nationally. Our tech-enabled payments platform allowed us to perform commercial treasury clearing services for $10.0 billion in credit and debit card payment volume, a 7.9% increase from the comparable quarter in 2024, across 145.4 million transactions for our small business clients in all 50 states. |
| ● | Strong efficiency ratio of 48.4% for the current quarter, notwithstanding our investments to support future growth, risk management and excellence in client service as well as the August 2025 opening of our flagship full-service branch in Los Angeles, California (Watt Plaza in Century City) to support our current and future clients in Southern California. |
| ● | Named to the Piper Sandler 2025 Bank & Thrift Sm-All Stars for the third time in several years, placing Esquire among an elite peer group of top performing small-cap banks nationwide. |
| ● | Strong capital foundation with common equity tier 1 (“CET1”) and tangible common equity to tangible assets(1) (“TCE/TA”) ratios of 14.18% and 12.24%, respectively. The Bank remains well above the bank regulatory “Well Capitalized” standards. |
“Despite our industry leading performance metrics and the associated industry accolades in 2025, we continue to remain steadfast in serving two vast, complex, fragmented, and significantly underserved national markets, both the litigation and payments verticals, with tailored tech-enabled financial solutions and data that support our clients’ unique businesses and growth objectives,” stated Tony Coelho, Chairman of the Board.
“By continuously expanding our knowledge of the markets we serve, investing in technology and the client experience, and cultivating key national regions through our senior business development officers and best-in-class client service, we are confident that we will grow and perform commensurate with our 2025 results,” stated Andrew C. Sagliocca, Vice Chairman, CEO, and President. “Our culture and goals are aligned; we will continue to generate best-in-class products, technology and client service to meet the needs and wants of the businesses we serve nationally as well as industry leading growth, performance, and financial metrics for the benefit of all stakeholders.”
| (1) | The Bank has no recorded intangible assets on the Statement of Financial Condition, and accordingly, GAAP common equity and GAAP assets are equal to tangible common equity and tangible assets. |
2
Fourth Quarter 2025 vs. 2024
Net income for the quarter ended December 31, 2025 was $13.5 million, or $1.55 per diluted share, compared to $11.8 million, or $1.37 per diluted share for the same period in 2024. Returns on average assets and equity for the current quarter were 2.36% and 18.90%, respectively, compared to 2.49% and 19.99% for the same period of 2024.
Net interest income increased $6.4 million, or 23.8%, to $33.3 million, due to growth in average interest earning assets totaling $360.0 million, or 19.7%, to $2.18 billion, funded with low-cost core deposits from our regional new business development teams and existing relationship banking efforts. Our net interest margin increased 18 basis points to 6.05%, led by higher yielding commercial loan production nationally. Average loan yields increased 17 basis points to 7.95% while average loans increased $340.0 million, or 25.8%, to $1.66 billion, with litigation related loan growth totaling $320.3 million, or 42.1%. Loan interest income increased $7.4 million, or 28.9%, to $33.2 million with $6.9 million related to growth in average loan volumes, led by litigation related commercial growth, and $568 thousand due to an increase in average loan rates. Average securities increased $31.4 million, or 10.4%, to $334.4 million with yields increasing 34 basis points to 3.78%. Securities income increased $566 thousand with $290 thousand attributable to average volume increases and $276 thousand attributable to increases in average rate. Average deposits increased $327.4 million, or 20.1%, to $1.96 billion, led by increases in litigation related escrow or IOLTA, commercial money market, and noninterest bearing commercial demand deposits totaling $154.3 million, $99.5 million, and $82.4 million, respectively. Our cost of deposits, including noninterest bearing demand deposits, increased 5 basis points to 1.00% due to changes in deposit composition coupled with increases in short-term money market rates. Our loan-to-deposit ratio was 85% at December 31, 2025.
The provision for credit losses was $2.9 million for the fourth quarter of 2025, a $1.2 million increase from the fourth quarter 2024, primarily due to significant loan growth in the current quarter. As of December 31, 2025, our allowance to loans ratio was 1.37% as compared to 1.50% as of December 31, 2024. Based on management’s evaluation of current credit risk in our commercial real estate and commercial portfolios as well as increases in the general reserves considering loan growth, loan composition, and the current uncertain economic and short-term interest rate environment, management believes the allowance for credit losses is adequate at December 31, 2025.
Noninterest income totaled $6.1 million in the current quarter, consistent with 2024. Payment processing income was $5.1 million for the fourth quarter of 2025, consistent with the prior year quarter. Growth in payment processing income has been muted, primarily due to changes in our overall merchant risk profile and merchant composition. Payment processing volumes for the credit and debit card processing platform increased $729.5 million, or 7.9%, to $10.0 billion while transactions volume totaled 145.4 million for the current quarter. We continue to focus on the expansion of merchant sales channels through our current and future ISOs, new merchant originations, active management of our merchant risk profiles, and by expanding our technology and other resources in the payment vertical. The Company utilizes proprietary and industry leading/customized technology to ensure card brand and regulatory compliance, to support multiple processing platforms, to manage daily risk across 93,000 small business merchants in all 50 states, and to perform commercial treasury clearing services for $10.0 billion in volume across 145.4 million in transactions in the current quarter. ASP fees totaled $741 thousand, consistent with prior quarters, and are directly impacted by the average balance of off-balance sheet sweep funds as well as current short-term market interest rates.
Noninterest expense increased $3.4 million, or 21.5%, to $19.1 million for the fourth quarter of 2025. This was primarily due to increases in employee compensation and benefits, data processing, occupancy and equipment costs, professional and consulting services, and travel and business relations. Employee compensation and benefits costs increased $1.5 million, or 16.1%, primarily due to increases in year-end salaries, employee benefit costs, stock grants and related stock-based compensation, staffing, regional business development officer (“BDO”) incentive pay or sales commissions, and year-end bonuses. The increase in BDO incentive pay is directly tied to our litigation related/commercial loan and core deposit growth, attracting full-service commercial banking clients nationally. Data processing costs increased $469 thousand due to increases in core banking processing volumes and the continued implementation/improvement of technology supporting client relationships and lead acquisition initiatives (CRM platform, digital marketing, business development, and lending) as well as overall risk management across all platforms. Occupancy and equipment costs increased $421 thousand due to the replacement and accelerated amortization of certain internally developed software to support our digital platform, and costs associated with the August 2025 opening of our Los Angeles branch. Professional and consulting services costs increased $411 thousand due to the evaluation of certain business development opportunities, and professional search costs related to staffing needs. Travel and business relations expenses increased $309 thousand as a result of our high touch business development efforts nationally that complement our digital marketing efforts and additional travel related to the opening and associated training for our new Los Angeles branch.
The Company’s efficiency ratio was 48.4% for the three months ended December 31, 2025, as compared to 47.5% in 2024, notwithstanding our continuous investment in resources (both technology and people) to support future growth, lead acquisition initiatives, excellence in client service, enhanced risk management, and costs associated with our flagship Los Angeles branch.
The effective tax rate was 22.8% for the fourth quarter of 2025, as compared to 25.0% in the prior year quarter, resulting from certain discrete tax benefits related to share-based compensation.
3
Year Ended 2025 vs. 2024
Net income for the year ended December 31, 2025 was $50.8 million, or $5.87 per diluted share, compared to $43.7 million, or $5.14 per diluted share for the same period in 2024. Returns on average assets and equity for the current year were 2.43% and 19.41%, respectively, compared to 2.57% and 20.14% for the same period of 2024.
Net interest income increased $21.6 million, or 21.6%, to $121.5 million, due to growth in average interest earning assets totaling $369.7 million, or 22.4%, to $2.02 billion, funded with low-cost core deposit growth from our regional new business development teams and existing relationship banking efforts. Our net interest margin decreased 4 basis points to 6.02%, primarily due to elevated average interest earning cash balances of $49.1 million that negatively impacted our net interest margin by approximately 8 basis points. Average loan yields increased 9 basis points to 7.91% while average loans increased $253.1 million, or 20.1%, to $1.51 billion, led by higher yielding litigation related loan growth of $253.7 million, or 37.2%. Loan interest income increased $21.1 million, or 21.4%, to $119.6 million with $20.0 million related to growth in average loan volumes (substantially all litigation related commercial loans) and $1.1 million due to increases in average loan rates. Average securities increased $67.5 million, or 25.4%, to $333.3 million and securities yields increased by 53 basis points to 3.78%. Securities income increased by $4.0 million with $2.4 million attributable to average volume increases and $1.5 million attributable to increases in average rate. Average deposits increased $340.2 million, or 23.2%, to $1.81 billion, led by increases in litigation related escrow or IOLTA, money market (primarily commercial), and noninterest bearing commercial demand deposits totaling $208.4 million, $80.4 million, and $60.0 million, respectively. Our cost of deposits, including noninterest bearing demand deposits, increased 8 basis points to 0.99% due to changes in deposit composition coupled with increases in short-term money market rates.
The provision for credit losses was $9.7 million for the year ended December 31, 2025, a $5.0 million increase from the same period in 2024, driven by $6.6 million in net charge-offs primarily comprised of (1) a small business merchant related commercial loan charge-off totaling $3.3 million ($736 thousand on nonaccrual as of December 31, 2025) in the second quarter of 2025; and (2) a multifamily loan charge-off totaling $2.9 million in the first quarter of 2025 ($7.8 million on nonaccrual as of December 31, 2025). As of December 31, 2025, our allowance to loans ratio was 1.37% as compared to 1.50% as of December 31, 2024. Based on management’s evaluation of current credit risk in our commercial real estate and commercial portfolios as well as increases in the general reserves considering loan growth, loan composition, and the current uncertain economic and short-term interest rate environment, management believes the allowance for credit losses is adequate at December 31, 2025.
Noninterest income totaled $25.1 million, consistent with 2024. Payment processing income was $20.2 million, a $660 thousand decrease from 2024, primarily due to changes in our overall merchant risk profile and merchant composition. Payment processing volumes for the credit and debit card processing platform increased $3.1 billion, or 8.6%, to $39.5 billion and transactions totaled 590.4 million for the current year. ASP fee income increased $257 thousand to $3.0 million for the year ended December 31, 2025. 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 the second quarter of 2025, we recognized a $432 thousand gain on certain equity investments.
Noninterest expense increased $10.4 million, or 17.1%, to $71.2 million for the year ended December 31, 2025, as compared to 2024. This increase was primarily due to increases in employee compensation and benefits, data processing, professional and consulting services, occupancy and equipment and travel and business relations. Employee compensation and benefits costs increased $4.5 million, or 11.8%, primarily due to increases in regional BDO incentive pay or sales commissions, year-end bonuses, employee benefit costs, stock grants and related stock-based compensation, and, to a lesser extent, the impact of year end salary increases and employee hires. The increase in BDO incentive pay is directly tied to our litigation related/commercial loan and core deposit growth, attracting full-service commercial banking clients nationally. Data processing costs increased $1.8 million due to increases in core banking processing volumes and the continued implementation/improvement of technology supporting client relationships and lead acquisition initiatives (CRM platform, digital marketing, business development, and lending) as well as overall risk management across all platforms. Professional and consulting services costs increased $1.7 million due to continuously evaluating business development opportunities, increased insurance and accounting costs, and costs related to staffing needs, including our new Los Angeles branch. Occupancy and equipment costs increased $814 thousand due to the replacement and accelerated amortization of certain internally developed software to support our digital marketing and risk management platforms and costs related to our new Los Angeles branch. Travel and business relations expenses increased $684 thousand, resulting from our high touch sales efforts that complement our digital marketing efforts and additional travel related to the opening and associated training for our new Los Angeles branch.
The Company’s efficiency ratio was 48.6% for the year ended December 31, 2025, as compared to 48.7% in 2024, notwithstanding our continuous investment in resources (both technology and people) to support future growth, lead acquisition initiatives, excellence in client service, enhanced risk management, and the opening of our flagship Los Angeles branch.
The effective tax rate was 22.6% for the year ended December 31, 2025, as compared to 26.4% in the prior year, resulting from certain discrete tax benefits related to share-based compensation.
4
Asset Quality
At December 31, 2025, we had two nonperforming loans totaling $8.6 million, with no exposure to commercial office or construction related borrowers, and $14.0 million in performing loans to the hospitality industry. The allowance for credit losses was $24.0 million, or 1.37% of total loans, as compared to $21.0 million, or 1.50% of total loans at December 31, 2024. The ratio of nonperforming loans to total loans and total assets was 0.49% and 0.36%, respectively, at December 31, 2025. Based on management’s evaluation of current credit risk in our commercial real estate and commercial portfolios as well as increases in the general reserves considering loan growth, loan composition, and the current uncertain economic and short-term interest rate environment, management believes the allowance for credit losses is adequate at December 31, 2025.
From a credit risk management perspective, the commercial real estate portfolio, excluding one multifamily nonaccrual loan, totaled $472.3 million and has a current weighted average debt service coverage ratio (“DSCR”) and an original loan-to-value (“LTV”) (defined as unpaid principal balance as of December 31, 2025 divided by appraised value at origination) of approximately 1.60 and 55%, respectively. When further evaluating this population, loans with below current market rates maturing in (1) less than one year totaled $49.4 million and had a current weighted average DSCR and an original LTV of approximately 1.29 and 67%, respectively; and (2) one to two years totaled $47.6 million and had a current weighted average DSCR and an original LTV of approximately 1.40 and 67%, respectively.
Balance Sheet – December 31, 2025 vs. 2024
At December 31, 2025, total assets increased $473.2 million, or 25.0%, to $2.37 billion. This increase was primarily attributable to growth in loans totaling $361.4 million, or 25.9%, to $1.76 billion. Our higher yielding variable rate commercial loans increased $325.0 million, or 35.3%, to $1.25 billion with commercial litigation related loans increasing $342.5 million, or 41.0%, to $1.18 billion. Our commercial relationship banking sales pipeline remained robust, anchored by our regional senior BDOs (supported by commercial lending, risk, and operations) located in key markets throughout the U.S. These BDOs are supported by our best-in-class technology stack including, but not limited to; our proprietary CRM system, digital marketing cloud and lending based technology built on Salesforce supporting client relationships and lead acquisition initiatives; account-based digital marketing (or “ABM”) with significant thought leadership content; and artificial intelligence (or “AI”) for advanced data analytics across our platform powering personalized and real-time ABM content to both current clients and prospective clients. Our available-for-sale securities portfolio increased $4.8 million to $246.5 million supported by purchases at current market interest rates totaling $47.6 million, offsetting portfolio amortization totaling $50.6 million. Our held-to-maturity securities portfolio totaled $60.2 million, a decrease of $8.5 million, due to portfolio amortization. Our total securities to assets ratio was 13% at December 31, 2025.
5
The following table provides information regarding the composition of our loan portfolio for the periods presented:
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December 31, |
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September 30, |
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December 31, |
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2025 |
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2025 |
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2024 |
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(Dollars in thousands) |
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Real estate: |
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|
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|
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|
|
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Multifamily |
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$ |
372,800 |
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21.2 |
% |
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$ |
365,309 |
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23.6 |
% |
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$ |
355,165 |
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25.4 |
% |
Commercial real estate |
|
|
107,293 |
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6.1 |
|
|
|
105,634 |
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6.8 |
|
|
|
87,038 |
|
6.2 |
|
1 – 4 family |
|
|
9,835 |
|
0.6 |
|
|
|
10,013 |
|
0.7 |
|
|
|
14,665 |
|
1.1 |
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Total real estate |
|
|
489,928 |
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27.9 |
|
|
|
480,956 |
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31.1 |
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|
|
456,868 |
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32.7 |
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Commercial: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Litigation related |
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1,178,325 |
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67.0 |
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|
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993,072 |
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64.2 |
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|
|
835,839 |
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59.8 |
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Other |
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67,230 |
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3.8 |
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55,517 |
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3.6 |
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|
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84,728 |
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6.1 |
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Total commercial |
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1,245,555 |
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70.8 |
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|
|
1,048,589 |
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67.8 |
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|
|
920,567 |
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65.9 |
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Consumer |
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22,762 |
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1.3 |
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|
|
17,181 |
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1.1 |
|
|
|
19,339 |
|
1.4 |
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Total loans held for investment |
|
$ |
1,758,245 |
|
100.0 |
% |
|
$ |
1,546,726 |
|
100.0 |
% |
|
$ |
1,396,774 |
|
100.0 |
% |
Deferred loan fees and unearned premiums, net |
|
|
182 |
|
|
|
|
|
254 |
|
|
|
|
|
247 |
|
|
|
Loans, held for investment |
|
$ |
1,758,427 |
|
|
|
|
$ |
1,546,980 |
|
|
|
|
$ |
1,397,021 |
|
|
|
Total deposits were $2.06 billion as of December 31, 2025, a $420.8 million, or 25.6%, increase from December 31, 2024 due to a $247.9 million, or 25.3%, increase in litigation related escrow or IOLTA, a $83.3 million, or 64.7%, increase in money market deposits (primarily commercial), and a $78.5 million, or 15.8%, increase in noninterest bearing commercial demand deposits. Our deposit strategy primarily focuses on developing full service commercial banking relationships nationally with our clients through commercial 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 settlement deposits represent $1.23 billion, or 59.5%, of total deposits. As of December 31, 2025, uninsured deposits were $685.1 million, or 33%, of our total deposits of $2.06 billion, excluding $12.1 million of the Company’s deposits held at the Bank. Approximately 75% of our uninsured deposits represent clients with full commercial relationship banking with us including, but not limited to, commercial loans, payment processing, and various commercial service-oriented relationships including 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 December 31, 2025, off-balance sheet sweep funds totaled approximately $736.6 million, with approximately $449.0 million, or 61.0%, available to be swept on balance sheet as reciprocal client relationship deposits. Our core low-cost deposit growth and off-balance sheet client funds continue to clearly demonstrate our highly efficient, full service commercial relationships and tech-enabled cash management platform.
At December 31, 2025, we had the ability to borrow, on a secured basis, up to $455.6 million from the FHLB of New York and $48.1 million from the FRB of New York discount window. No borrowing amounts were outstanding during the fourth quarter of 2025. 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 $52.5 million to $289.6 million as of December 31, 2025, primarily driven by net increases in retained earnings (net income less dividends paid to shareholders), and to a lesser extent, additional paid-in-capital due to share-based compensation and decreases in other comprehensive losses related to net unrealized gains in our available-for-sale securities portfolio.
The Bank remains well above bank regulatory “Well Capitalized” standards.
6
About Esquire Financial Holdings, Inc.
Esquire Financial Holdings, Inc. is a financial holding company headquartered in Jericho, New York. Its wholly owned subsidiary, Esquire Bank, is a full-service commercial bank, with branch offices in Jericho, New York and Los Angeles, California, as well as an administrative office in Boca Raton, Florida. The Bank is dedicated to serving the financial needs of the litigation industry and small businesses nationally, as well as commercial and retail customers 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.
Contact Information:
Eric S. Bader
Executive Vice President and Chief Operating Officer
Esquire Financial Holdings, Inc.
(516) 535-2002
eric.bader@esqbank.com
7
ESQUIRE FINANCIAL HOLDINGS, INC.
Consolidated Statement of Condition (unaudited)
(dollars in thousands except per share data)
|
|
December 31, |
|
September 30, |
|
December 31, |
|||
|
|
2025 |
|
2025 |
|
2024 |
|||
ASSETS |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
235,887 |
|
$ |
240,759 |
|
$ |
126,329 |
Securities available-for-sale, at fair value |
|
|
246,505 |
|
|
265,132 |
|
|
241,746 |
Securities held-to-maturity, at cost |
|
|
60,193 |
|
|
62,288 |
|
|
68,660 |
Securities, restricted at cost |
|
|
3,173 |
|
|
3,173 |
|
|
3,034 |
Loans, held for investment |
|
|
1,758,427 |
|
|
1,546,980 |
|
|
1,397,021 |
Less: allowance for credit losses |
|
|
(24,022) |
|
|
(21,119) |
|
|
(20,979) |
Loans, net of allowance |
|
|
1,734,405 |
|
|
1,525,861 |
|
|
1,376,042 |
Premises and equipment, net |
|
|
4,379 |
|
|
4,408 |
|
|
2,436 |
Other assets |
|
|
81,119 |
|
|
82,690 |
|
|
74,256 |
Total Assets |
|
$ |
2,365,661 |
|
$ |
2,184,311 |
|
$ |
1,892,503 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
Demand deposits |
|
$ |
576,455 |
|
$ |
605,533 |
|
$ |
497,958 |
Savings, NOW and money market deposits |
|
|
1,480,380 |
|
|
1,267,850 |
|
|
1,130,174 |
Certificates of deposit |
|
|
6,172 |
|
|
6,057 |
|
|
14,104 |
Total deposits |
|
|
2,063,007 |
|
|
1,879,440 |
|
|
1,642,236 |
Other liabilities |
|
|
13,056 |
|
|
25,644 |
|
|
13,173 |
Total liabilities |
|
|
2,076,063 |
|
|
1,905,084 |
|
|
1,655,409 |
Total stockholders' equity |
|
|
289,598 |
|
|
279,227 |
|
|
237,094 |
Total Liabilities and Stockholders' Equity |
|
$ |
2,365,661 |
|
$ |
2,184,311 |
|
$ |
1,892,503 |
|
|
|
|
|
|
|
|
|
|
Selected Financial Data |
|
|
|
|
|
|
|
|
|
Common shares outstanding |
|
|
8,552,405 |
|
|
8,565,491 |
|
|
8,354,753 |
Book value per share |
|
$ |
33.86 |
|
$ |
32.60 |
|
$ |
28.38 |
Equity to assets |
|
|
12.24 |
% |
|
12.78 |
% |
|
12.53 |
|
|
|
|
|
|
|
|
|
|
Capital Ratios (1) |
|
|
|
|
|
|
|
|
|
Tier 1 leverage ratio |
|
|
11.87 |
% |
|
12.00 |
% |
|
11.70 |
Common equity tier 1 capital ratio |
|
|
14.18 |
|
|
15.27 |
|
|
14.67 |
Tier 1 capital ratio |
|
|
14.18 |
|
|
15.27 |
|
|
14.67 |
Total capital ratio |
|
|
15.43 |
|
|
16.52 |
|
|
15.92 |
|
|
|
|
|
|
|
|
|
|
Asset Quality |
|
|
|
|
|
|
|
|
|
Nonperforming loans |
|
$ |
8,572 |
|
$ |
8,646 |
|
$ |
10,940 |
Allowance for credit losses to total loans |
|
|
1.37 |
% |
|
1.37 |
% |
|
1.50 |
Nonperforming loans to total loans |
|
|
0.49 |
|
|
0.56 |
|
|
0.78 |
Nonperforming assets to total assets |
|
|
0.36 |
|
|
0.40 |
|
|
0.58 |
Allowance to nonperforming loans |
|
|
280 |
|
|
244 |
|
|
192 |
| (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. |
8
ESQUIRE FINANCIAL HOLDINGS, INC.
Consolidated Income Statement (unaudited)
(dollars in thousands except per share data)
|
|
Three Months Ended |
|
Year Ended |
|
|||||||||||
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
|||||||
|
|
2025 |
|
2025 |
|
2024 |
|
2025 |
|
2024 |
|
|||||
Interest income |
|
$ |
38,237 |
|
$ |
36,131 |
|
$ |
30,784 |
|
$ |
139,417 |
|
$ |
113,373 |
|
Interest expense |
|
|
4,958 |
|
|
4,792 |
|
|
3,898 |
|
|
17,936 |
|
|
13,444 |
|
Net interest income |
|
|
33,279 |
|
|
31,339 |
|
|
26,886 |
|
|
121,481 |
|
|
99,929 |
|
Provision for credit losses |
|
|
2,900 |
|
|
1,750 |
|
|
1,700 |
|
|
9,675 |
|
|
4,700 |
|
Net interest income after provision for credit losses |
|
|
30,379 |
|
|
29,589 |
|
|
25,186 |
|
|
111,806 |
|
|
95,229 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment processing fees |
|
|
5,127 |
|
|
5,069 |
|
|
5,088 |
|
|
20,215 |
|
|
20,875 |
|
Other noninterest income |
|
|
992 |
|
|
1,164 |
|
|
1,081 |
|
|
4,865 |
|
|
4,020 |
|
Total noninterest income |
|
|
6,119 |
|
|
6,233 |
|
|
6,169 |
|
|
25,080 |
|
|
24,895 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
|
11,181 |
|
|
10,852 |
|
|
9,634 |
|
|
42,314 |
|
|
37,845 |
|
Other expenses |
|
|
7,883 |
|
|
7,508 |
|
|
6,051 |
|
|
28,920 |
|
|
22,998 |
|
Total noninterest expense |
|
|
19,064 |
|
|
18,360 |
|
|
15,685 |
|
|
71,234 |
|
|
60,843 |
|
Income before income taxes |
|
|
17,434 |
|
|
17,462 |
|
|
15,670 |
|
|
65,652 |
|
|
59,281 |
|
Income taxes |
|
|
3,966 |
|
|
3,405 |
|
|
3,917 |
|
|
14,830 |
|
|
15,623 |
|
Net income |
|
$ |
13,468 |
|
$ |
14,057 |
|
$ |
11,753 |
|
$ |
50,822 |
|
$ |
43,658 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.66 |
|
$ |
1.74 |
|
$ |
1.49 |
|
$ |
6.30 |
|
$ |
5.58 |
|
Diluted |
|
|
1.55 |
|
|
1.62 |
|
|
1.37 |
|
|
5.87 |
|
|
5.14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Financial Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets |
|
|
2.36 |
% |
|
2.61 |
% |
|
2.49 |
% |
|
2.43 |
% |
|
2.57 |
% |
Return on average equity |
|
|
18.90 |
|
|
20.83 |
|
|
19.99 |
|
|
19.41 |
|
|
20.14 |
|
Net interest margin |
|
|
6.05 |
|
|
6.04 |
|
|
5.87 |
|
|
6.02 |
|
|
6.06 |
|
Efficiency ratio |
|
|
48.4 |
|
|
48.9 |
|
|
47.5 |
|
|
48.6 |
|
|
48.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends paid per common share |
|
$ |
0.175 |
|
$ |
0.175 |
|
$ |
0.150 |
|
$ |
0.700 |
|
$ |
0.600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average basic shares |
|
|
8,131,450 |
|
|
8,094,441 |
|
|
7,869,435 |
|
|
8,061,589 |
|
|
7,817,626 |
|
Weighted average diluted shares |
|
|
8,703,436 |
|
|
8,690,130 |
|
|
8,588,925 |
|
|
8,662,219 |
|
|
8,487,041 |
|
9
ESQUIRE FINANCIAL HOLDINGS, INC.
Consolidated Average Balance Sheets and Average Yield/Cost (unaudited)
(dollars in thousands)
|
|
Three Months Ended |
|
||||||||||||||||||||||
|
|
December 31, |
|
September 30, |
|
December 31, |
|
||||||||||||||||||
|
|
2025 |
|
2025 |
|
2024 |
|
||||||||||||||||||
|
|
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 |
|
$ |
1,655,408 |
|
$ |
33,165 |
|
7.95 |
% |
$ |
1,532,484 |
|
$ |
30,839 |
|
7.98 |
% |
$ |
1,315,392 |
|
$ |
25,731 |
|
7.78 |
% |
Securities, includes restricted stock |
|
|
334,409 |
|
|
3,185 |
|
3.78 |
% |
|
337,705 |
|
|
3,244 |
|
3.81 |
% |
|
303,017 |
|
|
2,619 |
|
3.44 |
% |
Interest earning cash and other |
|
|
193,861 |
|
|
1,887 |
|
3.86 |
% |
|
189,418 |
|
|
2,048 |
|
4.29 |
% |
|
205,281 |
|
|
2,434 |
|
4.72 |
% |
Total interest earning assets |
|
|
2,183,678 |
|
|
38,237 |
|
6.95 |
% |
|
2,059,607 |
|
|
36,131 |
|
6.96 |
% |
|
1,823,690 |
|
|
30,784 |
|
6.72 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST EARNING ASSETS |
|
|
77,334 |
|
|
|
|
|
|
|
74,791 |
|
|
|
|
|
|
|
57,283 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL AVERAGE ASSETS |
|
$ |
2,261,012 |
|
|
|
|
|
|
$ |
2,134,398 |
|
|
|
|
|
|
$ |
1,880,973 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST BEARING LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, Money Market deposits |
|
$ |
1,334,666 |
|
$ |
4,904 |
|
1.46 |
% |
$ |
1,275,061 |
|
$ |
4,739 |
|
1.47 |
% |
$ |
1,081,662 |
|
$ |
3,730 |
|
1.37 |
% |
Time deposits |
|
|
6,085 |
|
|
53 |
|
3.46 |
% |
|
6,092 |
|
|
52 |
|
3.39 |
% |
|
14,111 |
|
|
167 |
|
4.71 |
% |
Total interest bearing deposits |
|
|
1,340,751 |
|
|
4,957 |
|
1.47 |
% |
|
1,281,153 |
|
|
4,791 |
|
1.48 |
% |
|
1,095,773 |
|
|
3,897 |
|
1.41 |
% |
Borrowings |
|
|
42 |
|
|
1 |
|
9.45 |
% |
|
42 |
|
|
1 |
|
9.45 |
% |
|
44 |
|
|
1 |
|
9.04 |
% |
Total interest bearing liabilities |
|
|
1,340,793 |
|
|
4,958 |
|
1.47 |
% |
|
1,281,195 |
|
|
4,792 |
|
1.48 |
% |
|
1,095,817 |
|
|
3,898 |
|
1.42 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST BEARING LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
|
617,153 |
|
|
|
|
|
|
|
568,107 |
|
|
|
|
|
|
|
534,747 |
|
|
|
|
|
|
Other liabilities |
|
|
20,336 |
|
|
|
|
|
|
|
17,341 |
|
|
|
|
|
|
|
16,555 |
|
|
|
|
|
|
Total noninterest bearing liabilities |
|
|
637,489 |
|
|
|
|
|
|
|
585,448 |
|
|
|
|
|
|
|
551,302 |
|
|
|
|
|
|
Stockholders' equity |
|
|
282,730 |
|
|
|
|
|
|
|
267,755 |
|
|
|
|
|
|
|
233,854 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL AVG. LIABILITIES AND EQUITY |
|
$ |
2,261,012 |
|
|
|
|
|
|
$ |
2,134,398 |
|
|
|
|
|
|
$ |
1,880,973 |
|
|
|
|
|
|
Net interest income |
|
|
|
|
$ |
33,279 |
|
|
|
|
|
|
$ |
31,339 |
|
|
|
|
|
|
$ |
26,886 |
|
|
|
Net interest spread |
|
|
|
|
|
|
|
5.48 |
% |
|
|
|
|
|
|
5.48 |
% |
|
|
|
|
|
|
5.30 |
% |
Net interest margin |
|
|
|
|
|
|
|
6.05 |
% |
|
|
|
|
|
|
6.04 |
% |
|
|
|
|
|
|
5.87 |
% |
Deposits (including noninterest bearing demand deposits) |
|
$ |
1,957,904 |
|
$ |
4,957 |
|
1.00 |
% |
$ |
1,849,260 |
|
$ |
4,791 |
|
1.03 |
% |
$ |
1,630,520 |
|
$ |
3,897 |
|
0.95 |
% |
10
ESQUIRE FINANCIAL HOLDINGS, INC.
Consolidated Average Balance Sheets and Average Yield/Cost (unaudited)
(dollars in thousands)
|
|
Year Ended December 31, |
|
||||||||||||||
|
|
2025 |
|
2024 |
|
||||||||||||
|
|
Average |
|
|
|
|
Average |
|
Average |
|
|
|
|
Average |
|
||
|
|
Balance |
|
Interest |
|
Yield/Cost |
|
Balance |
|
Interest |
|
Yield/Cost |
|
||||
INTEREST EARNING ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, held for investment |
|
$ |
1,511,997 |
|
$ |
119,576 |
|
7.91 |
% |
$ |
1,258,914 |
|
$ |
98,458 |
|
7.82 |
% |
Securities, includes restricted stock |
|
|
333,259 |
|
|
12,598 |
|
3.78 |
% |
|
265,714 |
|
|
8,636 |
|
3.25 |
% |
Interest earning cash and other |
|
|
172,890 |
|
|
7,243 |
|
4.19 |
% |
|
123,805 |
|
|
6,279 |
|
5.07 |
% |
Total interest earning assets |
|
|
2,018,146 |
|
|
139,417 |
|
6.91 |
% |
|
1,648,433 |
|
|
113,373 |
|
6.88 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST EARNING ASSETS |
|
|
70,630 |
|
|
|
|
|
|
|
52,157 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL AVERAGE ASSETS |
|
$ |
2,088,776 |
|
|
|
|
|
|
$ |
1,700,590 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST BEARING LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, Money Market deposits |
|
$ |
1,231,143 |
|
$ |
17,652 |
|
1.43 |
% |
$ |
945,899 |
|
$ |
12,889 |
|
1.36 |
% |
Time deposits |
|
|
7,239 |
|
|
280 |
|
3.87 |
% |
|
12,281 |
|
|
551 |
|
4.49 |
% |
Total interest bearing deposits |
|
|
1,238,382 |
|
|
17,932 |
|
1.45 |
% |
|
958,180 |
|
|
13,440 |
|
1.40 |
% |
Borrowings |
|
|
42 |
|
|
4 |
|
9.52 |
% |
|
44 |
|
|
4 |
|
9.09 |
% |
Total interest bearing liabilities |
|
|
1,238,424 |
|
|
17,936 |
|
1.45 |
% |
|
958,224 |
|
|
13,444 |
|
1.40 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST BEARING LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
|
570,842 |
|
|
|
|
|
|
|
510,868 |
|
|
|
|
|
|
Other liabilities |
|
|
17,688 |
|
|
|
|
|
|
|
14,755 |
|
|
|
|
|
|
Total noninterest bearing liabilities |
|
|
588,530 |
|
|
|
|
|
|
|
525,623 |
|
|
|
|
|
|
Stockholders' equity |
|
|
261,822 |
|
|
|
|
|
|
|
216,743 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL AVG. LIABILITIES AND EQUITY |
|
$ |
2,088,776 |
|
|
|
|
|
|
$ |
1,700,590 |
|
|
|
|
|
|
Net interest income |
|
|
|
|
$ |
121,481 |
|
|
|
|
|
|
$ |
99,929 |
|
|
|
Net interest spread |
|
|
|
|
|
|
|
5.46 |
% |
|
|
|
|
|
|
5.48 |
% |
Net interest margin |
|
|
|
|
|
|
|
6.02 |
% |
|
|
|
|
|
|
6.06 |
% |
Deposits (including noninterest bearing demand deposits) |
|
$ |
1,809,224 |
|
$ |
17,932 |
|
0.99 |
% |
$ |
1,469,048 |
|
$ |
13,440 |
|
0.91 |
% |
11
|
Ensuring our Clients and Our Institution Succeed Boldly Listed as ESQ Esquire Financial Holdings, Inc. (Financial Holding Company for Esquire Bank, N.A.) 4Q & Full Year 2025 Investor Presentation Exhibit 99.2 |
|
Forward Looking Disclosure This presentation contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are not historical fact and express management’s current expectations, forecasts of future events or long-term goals and, by their nature, are subject to assumptions, risks and uncertainties, many of which are beyond the control of the Company. These statements are may be identified through the use of words or phrases 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 the negative version of those words or other comparable words or phrases of a future or forward-looking nature. Forward-looking statements speak only as of the date they are made and are inherently subject to uncertainties and changes in circumstances, including those described under the heading “Risk Factors” in the Company’s 10-K and 10-Q, filed with the Securities and Exchange Commission (“SEC”). Forward-looking statements are not guarantees of future performance and should not be relied upon as representing management’s views as of any subsequent date. Actual results could differ materially from those indicated. The Company undertakes no obligation to update forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law. The forward-looking statements speak as of the date of this presentation. The delivery of this presentation shall not, under any circumstances, create any implication there has been no change in the affairs of the Company after the date hereof. This presentation includes industry and market data that we obtained from periodic industry publications, third-party studies and surveys. Industry publications and surveys generally state that the information contained therein has been obtained from sources believed to be reliable. Although we believe the industry and market data to be reliable as of the date of this presentation, this information could prove to be inaccurate. Industry and market data could be wrong because of the method by which sources obtained their data and because information cannot always be verified with complete certainty due to the limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties. In addition, we do not know all of the assumptions regarding general economic conditions or growth that were used in preparing the forecasts from the sources relied upon or cited herein. 2 |
|
Decades of expertise in the national litigation market which is complex, fragmented, underserved and poised for disruption Asset sensitive model anchored by law firm loans yielding approx. 9.10% “Branchless” and tech enabled core deposit platform funded at 0.99% (1.00% in 4Q ‘25) Driving loan and deposit growth with a 5 Year CAGR of approximately 20% since 2021 Decades of expertise in sales, risk, and compliance management Independent Sales Organization (“ISO”) model with 93,000 merchants nationally Stable and consistent fee income represents 17% (16% in 4Q ‘25) of total revenue ROA and ROTCE of 2.43% and 19.41%, respectively (2.36% and 18.90% in 4Q ‘25) Industry leading NIM of 6.02% (6.05% in 4Q ‘25) Diversified revenue stream with strong NIM and stable fee income Strong efficiency ratio of 48.6% (48.4% in 4Q ‘25) while investing in resources (employees, technology, and digital marketing) for future growth A digital-first disruptor bank with best-in-class technology fueling future growth and industry leading client retention rates Account-based digital marketing (“ABM”) from our CRM to power prospective client engagements nationally Leveraged artificial intelligence (“AI”), advanced data analytics, and personalization features to deliver real-time thought leadership content Nationwide “Branchless” Tech Enabled Litigation & Payment Processing Verticals Generating Industry Leading Growth, Returns, & Performance Metrics Litigation Vertical Commercial Banking Nationally Industry Leading Returns Fueled by “Branchless” and Tech Enabled National Verticals Payment Processing Vertical (Merchant Services) Small Business Banking Nationally Technology – the Future A Catalyst for Strong Growth 3 How Our Clients Succeed Boldly |
|
Strong Growth Driven by Unique National Verticals How Esquire Succeeds Boldly Key Highlights Strong growth in higher yielding variable rate commercial loans nationally Stable low-cost “branchless” and tech enabled deposit model Equity to Assets of 12.24% Common Equity Tier 1 of 14.18% (Bank Level) Book value per share of $33.86 4 at December 31, 2025 |
|
Stable low-cost “branchless” funding model with a strong commercial deposit franchise nationally DDA and escrow-based NOW/IOLTA accounts represent 28% and 60% of total deposits at December 31, 2025, respectively Higher yielding variable rate commercial loans anchored by our national litigation portfolio Asset sensitive balance sheet with approximately 90% of our variable rate commercial loans having one-year interest rate floors at their origination or renewal dates How Esquire Succeeds Boldly 5 Industry Leading Net Interest Margin |
|
Strong Revenue Growth ($ in thousands) at December 31, 2025 How Esquire Succeeds Boldly 6 Key Highlights Strong net interest margin Stable payment processing fee income Growing ASP fee income derived from off-balance sheet funds management |
|
Financial Highlights How Esquire Succeeds Boldly Industry Recognition & Awards Named to the Piper Sandler 2025 Bank & Thrift Sm-All Stars for the third time in several years Named to Fortune’s Annual 100 Fastest-Growing Companies List in 2024 Named to the KBW 2024 & 2025 Bank Honor Roll Awarded the 2024 Raymond James Community Bankers Cup for the seventh consecutive year Recognized as a Best Performing Small Community Bank of 2024 by S&P Global Recognized as Best In Class Marketer by the Association of National Advertisers B2 Awards in 2025 for the third consecutive year 7 at December 31, 2025 |
|
Loan Portfolio Diversification with Focused Growth Focused growth in higher yielding variable rate commercial loans with strong credit metrics on a national basis Selective multifamily loan growth with strong historical performance, DSCRs, and LTVs in the NY metro market How Esquire Succeeds Boldly 8 at December 31, 2025 |
|
Substantially all of our $1.25 billion in commercial loans are variable rate and tied to prime comprising approximately 71% of our loan portfolio Approximately 90% of our variable rate commercial loan portfolio was originated (or renewed annually) with interest rate floors in place Asset sensitive – estimated sensitivity of projected annualized net interest income (“NII”) down 100 and 200 basis point rate scenarios decreases projected NII by 5.7% and 11.8%, respectively at September 30, 2025 Loan Portfolio Diversification with Focused Growth How Esquire Succeeds Boldly 9 |
|
Commercial Litigation (Law Firm) Loans Full annual underwriting including, but not limited to: 3 years financials and tax returns (business and personal) Full contingent case inventory valuation process & collateral assignment or UCC-1 Personal guarantees for the majority of loans, including personal background checks Diversity across law firm inventories and collateral Average loan-to-collateral fee value or LTV of less than 15% Strong average DSCR (on average > 4.0x) Average draws against committed and uncommitted line-of-credit (“LOC”) and case disbursement loans of approximately 50% Weighted average interest rate of approximately 9.10% Funded with low-cost contingent law firm litigation deposits Litigation deposits to litigation loan facilities drawn is approximately 135% How Esquire Succeeds Boldly 10 |
|
Esquire’s Bold Opportunities New York Metro Area Real Estate A Reliable Asset Class & Liquidity Source Selective in our property and borrower selection process Strong generational owners/operators with high quality net worth No office or construction loan exposure Multifamily and CRE portfolio average current DSCR and original LTV of 1.6x and 55%, respectively $49 million with below current market rates maturing in less than one year with average current DSCR and original LTV of 1.3x and 67%, respectively $48 million with below current market rates maturing between one and two years with average current DSCR and original LTV of 1.4x and 67%, respectively Rent regulated, free market, and mixed (both rent regulated and free market) represent approximately one -third each of the $373 million multifamily loan portfolio CRE exposure is 165% of Bank level regulatory Tier 1 capital plus the allowance for credit losses (“ACL”). CRE exposure is 149% of consolidated level regulatory Tier 1 capital plus the ACL Pledged Multifamily and Residential loan portfolio provides liquidity totaling $219.8 million through the Federal Home Loan Bank of NY (“FHLB”) program as of December 31, 2025 11 |
|
Solid Credit Metrics, Asset Quality and ACL Coverage How Esquire Succeeds Boldly at December 31, 2025 Note – All asset quality metrics are based on our loans held for investment portfolio (1) NFL consumer loan portfolio - $9.0 million charge-off. 12 |
|
Deposit Composition and Growth Our tech enabled deposit platform utilizes our corporate cash management suite of services, creating a highly efficient “branchless” platform Our overall liquidity position (cash, borrowing capacity, and available reciprocal client sweep balances) totaled $1.22 billion, or 59% of total deposits, creating a highly liquid and unlevered balance sheet How Esquire Succeeds Boldly 13 ($ in millions) at December 31, 2025 |
|
*Note: Excludes sweeps totaling $737 million Deposit Composition Details DDA and NOW (escrow funds) deposits total 88% of total deposits, representing stable funding sources in various interest rate scenarios Litigation and payment processing deposits represent 78% and 7% of total deposits at December 31, 2025, respectively Uninsured deposits (excluding $12.1 million of the Company’s deposits) totaled $685 million, or 33%, of total deposits with approximately 75% 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 Off-balance sheet sweep funds totaled $737 million at December 31, 2025, with $449 million, or 61%, available for additional on-balance sheet liquidity How Esquire Succeeds Boldly 14 |
|
Currently servicing 93,000 merchants across 50 states in our payment processing (merchant acquiring) vertical Fee income, primarily payment processing fees, represents 17% of total revenue for the year ended December 31, 2025 How Esquire Succeeds Boldly Stable & Consistent Noninterest Income at December 31, 2025 15 |
|
How Esquire Succeeds Boldly Key Highlights Strong and stable DDA reserves Protecting capital from merchant chargebacks and returns 16 Protecting Our Company with Strong Payment Processing Reserves at December 31, 2025 |
|
Significant national markets primed for disruption: $529 billion & 100,000+ firms in the litigation vertical and $11.7 trillion and 10+ million merchants in the payment processing vertical Key Takeaways Why Esquire is Set to Succeed Boldly Tremendous untapped potential: Esquire’s current market share is a fraction of both national verticals that are complex, fragmented, underserved and poised for disruption by our client-centric & tech-focused institution We are thought leaders in the litigation vertical and provide C-suite access for ISO flexibility in the payment processing vertical Differentiated and positioned for growth: With industry leading tailored products and state-of-the-art technology geared towards effective client acquisition 17 |
|
Technology Driving Bold Success Client Centric Technology A Key Driver for Future Growth Website Artificial Intelligence* Marketing Sales Underwriting Onboarding Marketing Cloud AI to facilitate precision marketing and exponential customer acquisition across all verticals Website analytics, data enrichment and thought leadership content marketing Precision marketing – right offer right time Sales enablement, pipeline management and forecasting Underwriting efficiency & risk management / cash management and mobile banking / online applications Customer onboarding / core banking Partnering with best-in-class software vendors and solutions, with custom development to service all verticals at the bank Proprietary CRM built on Salesforce platform housing all client data touch points from prospect to boarding with a single client view, enabling high volume client acquisition strategies and excellence in client service * Deployment of AI technologies applicable only to sales and marketing processes and not used as a decisioning tool for loan underwriting processes. 18 Online Banking |
|
Succeeding Boldly Listed as ESQ Contact Information: Eric S. Bader Executive Vice President & Chief Operating Officer 516-535-2002 eric.bader@esqbank.com |
|
Appendix & Supplemental Disclosure National Markets – Litigation & Payment Processing Verticals & Non-GAAP Reconciliation |
|
The Esquire Competitive Advantage Esquire’s Bold Opportunities U.S. Litigation Market A Significant Growth Opportunity U.S. Tort actions are estimated to consume 2.1% of U.S. GDP* annually or $529 billion* Esquire does not compete with non-bank finance companies Significant barriers to entry – management expertise, brand awareness, regulatory/compliance, and decades of experience Decades of Industry Track Record Extensive Litigation Experience In-House Deep Relationships with Respected Firms Nationally Daily Resources and Research Cash Flow Lending Coupled with Borrowing Base or Asset Based Approach Tailoring unique products other banks do not offer Typically advancing more than traditional banks, on traditional banking terms 21 Key Highlights $529 billion* Total Addressable Market (“TAM”) in litigation vertical Esquire is a tailored, differentiated brand and thought leader in the litigation market *US Chamber of Commerce Institute for Legal Reform – “Tort Costs in America – An Empirical Analysis of Costs and Compensation of U.S. Tort System”. Published in November 2024. |
|
22 Digitally Transforming The Business of Law Aligning Law Firm Case Inventory Lifecycle to Customer Retention Client Incident Receive Intake Case Management Settlement/ Verdict Disbursement $ 1-3 Years (+) Products Case Cost Loans Working Capital Loans Firm and Partner Acquisition Loans Term Loans to Finance Case Acquisition & Growth Escrow Banking and QSF Settlement Services Plaintiff Banking including Exclusive Prepaid Card Offering Technology Esquire Insight – Case Management Technology Commercial Cash Management Case Cost Management Online Applications Thought Leadership - Digital Platform and Content 22 |
|
Payment Processing – Current ISO Model How Esquire Succeeds Boldly What is an ISO? ISO Responsibilities They Do Merchant Vertical and Technology Focus Sales Agent Model Performs Initial Underwriting Boards Merchant to Payment Processing Platform Installation of Merchant Equipment Manage Call Center for Merchant Clients Merchant Risk and PCI Compliance Bank Responsibilities We Do Robust Policies Tech Enabled Card Brand and Regulatory Compliance Support Multiple Processing Systems Assess ISO Verticals Re-underwrite Merchant Applications Utilize Industry Leading Risk Management Technology Daily and Month End Risk and Compliance Management Commercial Treasury Function for Merchant Clearing and ISO Cash Management Maintaining and Monitor ISO and Merchant Reserves (DDA) 23 |
|
The payments industry CAGR was 11% from 2020 to 2024 to an estimated total payment volume of $11.7 trillion Esquire’s Bold Opportunities Payment Volume Trends – A Significant Growth Opportunity Sources: Company Financial Records, Note: PayPal figures represent PayPal’s estimated U.S.percent share of “Total Payment Volume” (TPV).PayPal volume includes volume from a bank account, a PayPal account balance, a PayPalCredit account, a credit or debit card or other stored value products such as coupons and gift cards. Assuch, some of this volume may be included in other networks aswell. PayPal’s classification in the payments industry ecosystem is varied/debated as it performs functions attributed to a payment network, an issuer, acquirer, etc., and its financial reporting does not directly align with other payment network reporting structures and methods. Discover volume includes Discover Network and PulseNetwork transactions. 24 at December 31, 2024 ($ in billions) |
