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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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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 July 23, 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 quarter and year-to-date ended June 30, 2026. 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. |
Description |
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99.1 |
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99.2 |
Written presentation to be distributed and made available to investors and posted |
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104 |
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.
ESQUIRE FINANCIAL HOLDINGS, INC. |
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Dated: July 23, 2026 |
By:/s/ Andrew C. Sagliocca |
Andrew C. Sagliocca |
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Vice Chairman, Chief Executive Officer and President |
Exhibit 99.1
Esquire Financial Holdings, Inc.
Reports Second Quarter 2026 Results
Continued Strong Commercial Loan & Core Deposit Growth Nationally; Signature Merger Closing Currently Scheduled for August 1, 2026
Jericho, NY – July 23, 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 second quarter and year-to-date of 2026. Significant achievements and key performance metrics during the current quarter and year-to-date of 2026 include:
| ● | Net income increased 9.2% to $13.0 million, or $1.49 per diluted share, as compared to $11.9 million, or $1.38 per diluted share, for the comparable quarter in 2025 despite: (1) pretax merger expenses totaling $1.1 million related to our acquisition of Signature Bancorporation, Inc. (the parent company of Signature Bank in Chicago, collectively “Signature”) and (2) an elevated provision for credit losses related to a multifamily nonaccrual loan and related charge-off. For the current quarter, adjusted(1) net income and diluted earnings per share were $14.0 million and $1.60, respectively, excluding the previously noted pretax merger expenses of $1.1 million ($970 thousand, net of tax), representing an increase of 15.9%, or $0.22 per diluted share, as compared to the second quarter of 2025. |
| ● | Consistent industry leading returns on average assets and equity of 2.09% and 17.06%, respectively, despite the $970 thousand in merger-related expenses, net of tax, previously noted, as well as our continued investment in current resources to support future growth and excellence in client service. For the current quarter, adjusted(1) returns on average assets and equity were 2.25% and 18.33%, respectively. |
| ● | Resilient net interest margin of 5.96% for the quarter ended June 30, 2026, driven by our national litigation platform growth, despite significant declines in short-term market interest rates from their highs in 2023. Our net interest margin was negatively impacted by approximately 10 basis points due to elevated average interest earning cash balances that were funded with core deposit growth. Total revenue increased $13.0 million, or 18.7%, to $82.6 million, for year-to-date 2026 when compared to the prior year period. |
| ● | Loan growth on a linked quarter basis was $87.2 million, or 19% annualized, totaling $1.90 billion, despite payoffs totaling $76.1 million ($74.6 million in commercial loans) in the current quarter. Loan growth was primarily comprised of both commercial totaling $61.6 million ($72.6 million in litigation related or law firm loans) and commercial real estate totaling $25.6 million. Total loans grew $407.7 million, or 27.3%, (litigation related loans grew $376.5 million or 41.0%) when comparing the current quarter to the comparable quarter in 2025 while average total loans grew $414.5 million, or 28.3%, (litigation related loans grew $405.8 million or 46.1%) for the same period. 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. To clearly demonstrate this point, law firms or litigation clients that have banked with Esquire for four years have a compounded annual growth rate on their loans and related commercial deposit balances of approximately 15% and 30%+, respectively. |
| ● | Strong corresponding deposit growth on a linked quarter basis totaling $77.1 million, or 15% annualized, to $2.18 billion with a cost-of-funds of 1.03% (including demand deposits). Growth on a linked quarter basis was fueled by litigation related escrow or IOLTA deposits. Deposits grew $397.4 million, or 22.3%, when comparing the current quarter to the comparable quarter in 2025 while average total deposits grew $412.7 million, or 23.6%, for the same period. Off-balance sheet (“OBS”) sweep funds totaled $1.03 billion, with approximately 38% available for additional on-balance sheet liquidity, while the associated administrative service payments (“ASP”) fee income totaled $1.1 million for the current quarter. Additional available liquidity totaled approximately $523 million, excluding cash, OBS sweep funds, and unsecured borrowing capacity. |
| (1) | See non-GAAP reconciliation provided at the end of this news release. |
1
| ● | Solid credit metrics, asset quality, and reserve coverage ratios with an allowance for credit losses to loans ratio of 1.30%, two nonperforming loans totaling $5.1 million, and a nonperforming loans to total assets ratio of 0.20%. During the current quarter, a $4.4 million multifamily loan, net of a $1.6 million charge-off, that was reported as criticized in prior periods was placed on nonaccrual. This multifamily loan was made to the same sponsor as a former nonaccrual multifamily loan that was disposed of in the first quarter of 2026. We have no additional loan exposure to this sponsor. |
| ● | Stable and consistent noninterest income in the current quarter totaling $6.4 million, or 15% 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 $10.6 billion in credit and debit card payment volume, a 4.3% increase from the comparable quarter in 2025, across 152.6 million transactions for our small business clients in all 50 states. |
| ● | Strong efficiency ratio of 50.1% for the current quarter, notwithstanding our investments to support future growth, risk management and excellence in client service. Excluding the previously noted pretax merger costs totaling $1.1 million, the adjusted(1) efficiency ratio was 47.6%. |
| ● | Esquire has received all required regulatory approvals or waivers necessary to complete the previously announced acquisition of Signature, and the transaction is currently expected to close on August 1, 2026, pending satisfaction of customary closing conditions. |
| ● | Key recognitions during the current quarter are: (1) named the #1 Best Law Firm Funding Provider in The Recorder's 2026 "Best Of" survey; (2) included in Keefe, Bruyette & Woods (“KBW”) Bank Honor Roll for the third consecutive year for consistent and exceptional performance over the past decade; (3) ranked first overall in the 2025 Raymond James Community Bankers Cup as the top-performing community bank, representing the eighth consecutive year on their list; and (4) ranked among the top U.S. merchant acquirers by Nilson Report for the second consecutive year. |
| ● | Strong capital foundation with common equity tier 1 (“CET1”) and tangible common equity to tangible assets(2) (“TCE/TA”) ratios of 14.24% and 12.50%, respectively. The Bank remains well above the bank regulatory “Well Capitalized” standards. |
“The timely closing of our Signature merger currently scheduled for August 1, 2026 will deliver enhanced value to all stakeholders while accelerating our growth in Chicago and the Midwest markets in the future,” stated Tony Coelho, Chairman of the Board. “Chicago represents one of the top three largest metro markets by both population and number of contingent fee law firms with New York City and Los Angeles rounding out the top three metro markets.”
“By deeply understanding and serving our key national verticals, we've established a strong culture and foundation for sustainable growth and continued industry leading performance metrics and returns,” stated Andrew C. Sagliocca, Vice Chairman, Chief Executive Officer, and President. “The Signature merger serves to position the combined entity for continued growth and success in the highly desirable Midwest and Chicago metro markets with a well-established Chicago-based management team and brand.”
| (1) | See non-GAAP reconciliation provided at the end of this news release. |
| (2) | 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
Second Quarter 2026 vs. 2025
Net income for the quarter ended June 30, 2026 was $13.0 million, or $1.49 per diluted share, compared to $11.9 million, or $1.38 per diluted share for the same period in 2025. Returns on average assets and equity for the current quarter were 2.09% and 17.06%, respectively, compared to 2.37% and 18.74% for the same period of 2025. Excluding after-tax merger expenses of $970 thousand, adjusted(1) net income, diluted earnings per share, return on average assets, and return on average common equity were $14.0 million, $1.60, 2.25% and 18.33%, respectively.
Net interest income increased $6.5 million, or 22.2%, to $35.7 million, due to growth in average interest earning assets totaling $457.4 million, or 23.5%, to $2.40 billion, funded with low-cost core deposits from our regional business development teams and existing relationship banking efforts. Our net interest margin decreased 7 basis points to 5.96%, primarily due to a $53.1 million increase in average interest earning cash balances to $205.0 million in the current quarter coupled with decreases in short-term market interest rates over the same period. Assuming this excess cash, funded with core low-cost deposits, was deployed in loans at current average loan yields, our net interest margin would have been approximately 10 basis points higher. Average loan yields decreased 11 basis points to 7.78%, primarily due to our litigation related loan yields, while average loans increased $414.5 million, or 28.3%, to $1.88 billion, with average litigation related loan growth totaling $405.7 million, or 46.1%. Loan interest income increased $7.7 million, or 26.6%, to $36.4 million with $8.0 million related to growth in average loan volumes, led by litigation related commercial growth, offset by $390 thousand due to a decrease in average loan rates. Average securities decreased $10.2 million, or 3.1%, to $322.8 million with yields remaining relatively flat at 3.79%. Average deposits increased $412.7 million, or 23.6%, to $2.16 billion, led by increases in litigation related escrow or IOLTA, commercial money market, and noninterest bearing commercial demand deposits totaling $297.5 million, $90.0 million, and $19.1 million, respectively. Our cost of deposits, including noninterest bearing demand deposits, increased 5 basis points to 1.03% due to changes in deposit composition. Our loan-to-deposit ratio was 87% at June 30, 2026.
The provision for credit losses was $2.9 million for the second quarter of 2026, a $625 thousand decrease from the second quarter 2025, primarily due to management’s revaluation of credit risk in our loan portfolio subsequent to certain charge-offs and related credit downgrades in both quarters, offset by provisioning for primarily commercial loan growth. During the current quarter, a $4.4 million multifamily loan, net of a $1.6 million charge-off, that was reported as criticized in prior periods was placed on nonaccrual. As of June 30, 2026, our allowance to loans ratio was 1.30%, consistent with the prior year quarter. Based on management’s evaluation of current credit risk in our commercial real estate and commercial portfolios, management believes the allowance for credit losses is adequate at June 30, 2026.
Noninterest income totaled $6.4 million in the current quarter, a decrease of $194 thousand from the second quarter of 2025. Payment processing income was $5.1 million for the second quarter of 2026, consistent with the prior year quarter, as 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 $432.6 million, or 4.3%, to $10.6 billion while transaction volume totaled 152.6 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 $10.6 billion in volume across 152.6 million transactions in the current quarter. ASP fees totaled $1.1 million, an increase of $449 thousand from the prior year quarter, and are directly impacted by the average balance of OBS sweep funds as well as current short-term market interest rates. During the second quarter 2025, we recognized a $432 thousand gain on the sale of a fintech investment.
Noninterest expense increased $4.0 million, or 23.7%, to $21.1 million for the second quarter of 2026. This was primarily due to increases in employee compensation and benefits, merger related costs, data processing, advertising and marketing, and occupancy and equipment costs. Employee compensation and benefits costs increased $2.4 million, or 23.4%, primarily due to increases in year-end salaries, staffing, stock grants and related stock-based compensation, regional business development officer (“BDO”) incentive pay (sales commissions) and year-end bonus accruals. The increase in BDO incentive pay is directly correlated to our litigation related/commercial loan and related core commercial deposit growth, attracting full-service commercial banking clients nationally. In connection with the announced merger with Signature, we incurred merger related costs (advisory, legal, accounting, valuation, and other professional or consulting fees, and general administrative costs) of $1.1 million in the second quarter of 2026. Data processing costs increased $343 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. Advertising and marketing costs increased $193 thousand, as we continued to grow our brand, targeting digital marketing platform, and expand our thought leadership in our national verticals. Occupancy and equipment costs increased $176 thousand due to costs associated with the operation of our Los Angeles branch which opened in late 2025.
| (1) | See non-GAAP reconciliation provided at the end of this news release. |
3
The Company’s efficiency ratio was 50.1% for the three months ended June 30, 2026, as compared to 47.6% in 2025, notwithstanding our continued 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 adjusted(1) efficiency ratio was 47.6% excluding the previously noted $1.1 million in merger related costs.
The effective tax rate was 28.4% for the second quarter of 2026, as compared to 22.0% in the prior year quarter. The increase was primarily due to certain discrete tax benefits related to share-based compensation in the prior year quarter.
Year-to-Date 2026 vs. 2025
Net income for the six months ended June 30, 2026 was $25.2 million, or $2.89 per diluted share, compared to $23.3 million, or $2.70 per diluted share for the same period in 2025. Returns on average assets and equity for the current six months were 2.10% and 16.94%, respectively, compared to 2.38% and 18.93% for the same period of 2025. Excluding after-tax merger costs and accelerated stock compensation expense totaling $2.5 million, adjusted(1) net income, diluted earnings per share, return on average assets, and return on average common equity were $27.7 million, $3.18, 2.31% and 18.64%, respectively.
Net interest income increased $12.9 million, or 22.7%, to $69.8 million, due to growth in average interest earning assets totaling $430.6 million, or 22.5%, to $2.34 billion, funded with low-cost core deposits from our regional business development teams and existing relationship banking efforts. Our net interest margin increased 1 basis point to 6.00%, led by growth in higher yielding commercial loan production nationally. Average loan yields decreased 2 basis points to 7.82% while average loans increased $395.6 million, or 27.7%, to $1.82 billion (average litigation related loan growth totaling $380.3 million, or 44.5%). Loan interest income increased $15.1 million, or 27.2%, to $70.7 million with $15.3 million related to growth in average loan volumes, led by litigation related commercial growth, offset by $192 thousand due to a decrease in average loan rates. Average securities decreased $1.8 million to $328.6 million with yields increasing 5 basis points to 3.82%. Average deposits increased $388.6 million, or 22.7%, to $2.10 billion, led by increases in litigation related escrow or IOLTA, commercial money market, and noninterest bearing commercial demand deposits totaling $256.9 million, $92.8 million, and $30.5 million, respectively. Our cost of deposits, including noninterest bearing demand deposits, increased 5 basis points to 1.01% due to changes in deposit composition.
The provision for credit losses was $5.6 million for the six months ended June 30, 2026, a $575 thousand increase from the comparable period in 2025, primarily due to management’s revaluation of credit risk in our loan portfolio subsequent to certain charge-offs and related credit downgrades in both periods, offset by provisioning for primarily commercial loan growth. In 2026, there were $4.7 million in charge-offs related to two multifamily loans to the same sponsor. As of June 30, 2026, our allowance to loans ratio was 1.30%. Based on management’s evaluation of current credit risk in our commercial real estate and commercial portfolios, management believes the allowance for credit losses is adequate at June 30, 2026.
Noninterest income totaled $12.8 million in the current six months, an increase of $110 thousand from the same period in 2025. Payment processing income was $10.3 million for the six months ended June 30, 2026, an increase of $250 thousand from the same period in 2025 as 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 $854.3 million, or 4.4%, to $20.2 billion while transaction volume totaled 289.9 million for the current six months. ASP fees totaled $2.2 million, an increase of $706 thousand from the same period in 2025, a direct result of the average balance of OBS sweep funds. During the second quarter 2025, we recognized a $432 thousand gain on the sale of a fintech investment.
Noninterest expense increased $8.0 million, or 23.5%, to $41.8 million for the six months ended June 30, 2026. This was primarily due to increases in employee compensation and benefits, merger related costs, data processing, advertising and marketing, and occupancy and equipment costs. Employee compensation and benefits costs increased $4.5 million, or 22.4%, primarily due to increases in year-end salaries, stock grants and related stock-based compensation, staffing, regional BDO incentive pay (sales commissions), and year-end bonus accruals. The increase in BDO incentive pay is directly correlated to our litigation related/commercial loan and related core commercial deposit growth, attracting full-service commercial banking clients nationally. Due to the departure of two board members for personal reasons in the first quarter of 2026, we incurred compensation charges related to accelerated stock grant expense totaling $398 thousand. In connection with the Signature merger, we incurred merger related costs (advisory, legal, accounting, valuation, and other professional or consulting fees, as well as general administrative costs) of $2.3 million for the six months ended June 30, 2026.
Data processing costs increased $792 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. Advertising and marketing costs increased $340 thousand, as we continued to grow our brand, targeting digital marketing platform, and expand our thought leadership in our national verticals. Occupancy and equipment costs increased $300 thousand primarily due to costs associated with the operation of our Los Angeles branch which opened in late 2025.
| (1) | See non-GAAP reconciliation provided at the end of this news release. |
4
The Company’s efficiency ratio was 50.6% for the six months ended June 30, 2026, as compared to 48.6% in 2025, notwithstanding our continued 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 the Signature merger and our flagship Los Angeles branch. The adjusted(1) efficiency ratio was 47.2% excluding the previously noted $2.7 million in elevated noninterest expense in connection with the Signature merger and accelerated director share-based compensation in the current year.
The effective tax rate was 28.5% for the six months ended June 30, 2026, as compared to 24.3% in the prior year period. The increase was primarily due to certain discrete tax benefits related to share-based compensation in the prior year period.
Asset Quality
At June 30, 2026, we had two nonperforming loans totaling $5.1 million, with no exposure to commercial office or construction/vacant land related borrowers, and $13.7 million in performing loans to the hospitality industry. The allowance for credit losses was $24.7 million, or 1.30% of total loans, as compared to $19.4 million, or 1.30% of total loans at June 30, 2025. The ratio of nonperforming loans to total loans and total assets was 0.27% and 0.20%, respectively, at June 30, 2026. During the quarter, we placed a multifamily loan on nonaccrual totaling $4.4 million, net of a $1.6 million charge-off. 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 June 30, 2026.
From a credit risk management perspective, the commercial real estate portfolio, excluding one multifamily nonaccrual loan, totaled $524.6 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 June 30, 2026 divided by appraised value at origination) of approximately 1.67 and 54%, respectively.
Balance Sheet – June 30, 2026 vs. 2025
At June 30, 2026, total assets increased $451.0 million, or 21.9%, to $2.51 billion. This increase was primarily attributable to growth in loans totaling $407.7 million, or 27.3%, to $1.90 billion. Our higher yielding variable rate commercial loans increased $329.3 million, or 32.7%, to $1.34 billion with commercial litigation related loans increasing $376.5 million, or 41.0%, to $1.29 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. who have also significantly expanded our participation in local, state, and national trial associations across the country. 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 decreased $17.2 million to $240.1 million due to portfolio amortization totaling $64.9 million, offset by purchases totaling $46.2 million. Our held-to-maturity securities portfolio totaled $56.1 million, a decrease of $8.4 million, due to portfolio amortization. Our total securities to assets ratio was 12% at June 30, 2026.
The following table provides information regarding the composition of our loan portfolio for the periods presented:
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|
June 30, |
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December 31, |
|
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June 30, |
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|||||||||
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|
2026 |
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2025 |
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|
2025 |
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|
(Dollars in thousands) |
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|||||||||||||||
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multifamily |
|
$ |
395,886 |
|
20.8 |
% |
|
$ |
372,800 |
|
21.2 |
% |
|
$ |
366,439 |
|
24.5 |
% |
Commercial real estate |
|
|
133,096 |
|
7.0 |
|
|
|
107,293 |
|
6.1 |
|
|
|
91,166 |
|
6.1 |
|
1 – 4 family |
|
|
8,959 |
|
0.5 |
|
|
|
9,835 |
|
0.6 |
|
|
|
10,093 |
|
0.7 |
|
Total real estate |
|
|
537,941 |
|
28.3 |
|
|
|
489,928 |
|
27.9 |
|
|
|
467,698 |
|
31.3 |
|
Commercial: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Litigation related |
|
|
1,294,892 |
|
68.1 |
|
|
|
1,178,325 |
|
67.0 |
|
|
|
918,424 |
|
61.5 |
|
Other |
|
|
42,216 |
|
2.2 |
|
|
|
67,230 |
|
3.8 |
|
|
|
89,403 |
|
6.0 |
|
Total commercial |
|
|
1,337,108 |
|
70.3 |
|
|
|
1,245,555 |
|
70.8 |
|
|
|
1,007,827 |
|
67.5 |
|
Consumer |
|
|
26,756 |
|
1.4 |
|
|
|
22,762 |
|
1.3 |
|
|
|
18,584 |
|
1.2 |
|
Total loans held for investment |
|
$ |
1,901,805 |
|
100.0 |
% |
|
$ |
1,758,245 |
|
100.0 |
% |
|
$ |
1,494,109 |
|
100.0 |
% |
Deferred loan fees and unearned premiums, net |
|
|
466 |
|
|
|
|
|
182 |
|
|
|
|
|
490 |
|
|
|
Loans, held for investment |
|
$ |
1,902,271 |
|
|
|
|
$ |
1,758,427 |
|
|
|
|
$ |
1,494,599 |
|
|
|
| (1) | See non-GAAP reconciliation provided at the end of this news release. |
5
Total deposits were $2.18 billion as of June 30, 2026, a $397.4 million, or 22.3%, increase from June 30, 2025 due to a $361.8 million, or 38.3%, increase in litigation related escrow or IOLTA, and a $55.0 million, or 22.9% increase in money market deposits (primarily commercial). 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 $1.31 billion, or 59.9%, of total deposits. As of June 30, 2026, uninsured deposits were $722.4 million, or 33%, of our total deposits, excluding $18.9 million of the Company’s deposits held at the Bank. Approximately 65% 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 June 30, 2026, OBS sweep funds totaled approximately $1.03 billion, with approximately $392.5 million, or 38.0%, 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 June 30, 2026, we had the ability to borrow, on a secured basis, up to $477.6 million from the FHLB of New York and $45.0 million from the FRB of New York discount window. No borrowing amounts were outstanding during the second quarter of 2026. 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 $50.3 million to $313.9 million as of June 30, 2026, primarily driven by net increases in retained earnings (net income less dividends paid to shareholders), and to a lesser extent, additional paid-in-capital from share-based compensation and decreases in other comprehensive losses related to our available-for-sale securities portfolio.
The Bank remains well above bank regulatory “Well Capitalized” standards.
6
Earnings Call Information
The Company will conduct a conference call on Thursday, July 23, 2026 at 10:00 a.m. (ET), during which Andrew C. Sagliocca, Vice Chairman, Chief Executive Officer and President, and Michael Lacapria, Senior Vice President and Chief Financial Officer, will discuss Esquire’s second quarter financial performance, followed by a question-and-answer period.
The live audio webcast can be accessed via the following link: https://events.q4inc.com/attendee/221060674
Corresponding presentation slides and a replay of the conference call will be available on Esquire’s Investor Relations web page at investorrelations.esquirebank.com. The conference call may also be accessed by telephone using the dial-in information below:
Conference Call Details
U.S. - (833) 461-5787
Meeting ID: 221 060 674
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 and Los Angeles metropolitan areas. 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; the ability to complete, or any delays in completing, the pending merger between the Company and Signature; any failure to realize the anticipated benefits of the transaction when expected or at all; certain restrictions during the pendency of the transaction that may impact the Company’s ability to pursue, certain business opportunities or strategic transactions; the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events, diversion of management’s attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships, including those resulting from the completion of the merger and integration of the companies 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)
|
|
June 30, |
|
December 31, |
|
June 30, |
|
|||
|
|
2026 |
|
2025 |
|
2025 |
|
|||
ASSETS |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
242,183 |
|
$ |
235,887 |
|
$ |
162,973 |
|
Securities available-for-sale, at fair value |
|
|
240,146 |
|
|
246,505 |
|
|
257,375 |
|
Securities held-to-maturity, at cost |
|
|
56,099 |
|
|
60,193 |
|
|
64,470 |
|
Securities, restricted at cost |
|
|
3,196 |
|
|
3,173 |
|
|
3,173 |
|
Loans, held for investment |
|
|
1,902,271 |
|
|
1,758,427 |
|
|
1,494,599 |
|
Less: allowance for credit losses |
|
|
(24,724) |
|
|
(24,022) |
|
|
(19,407) |
|
Loans, net of allowance |
|
|
1,877,547 |
|
|
1,734,405 |
|
|
1,475,192 |
|
Premises and equipment, net |
|
|
3,980 |
|
|
4,379 |
|
|
4,228 |
|
Other assets |
|
|
87,867 |
|
|
81,119 |
|
|
92,566 |
|
Total Assets |
|
$ |
2,511,018 |
|
$ |
2,365,661 |
|
$ |
2,059,977 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
$ |
552,131 |
|
$ |
576,455 |
|
$ |
567,156 |
|
Savings, NOW and money market deposits |
|
|
1,621,790 |
|
|
1,480,380 |
|
|
1,209,066 |
|
Certificates of deposit |
|
|
5,772 |
|
|
6,172 |
|
|
6,106 |
|
Total deposits |
|
|
2,179,693 |
|
|
2,063,007 |
|
|
1,782,328 |
|
Other liabilities |
|
|
17,475 |
|
|
13,056 |
|
|
14,093 |
|
Total liabilities |
|
|
2,197,168 |
|
|
2,076,063 |
|
|
1,796,421 |
|
Total stockholders' equity |
|
|
313,850 |
|
|
289,598 |
|
|
263,556 |
|
Total Liabilities and Stockholders' Equity |
|
$ |
2,511,018 |
|
$ |
2,365,661 |
|
$ |
2,059,977 |
|
|
|
|
|
|
|
|
|
|
|
|
Selected Financial Data |
|
|
|
|
|
|
|
|
|
|
Common shares outstanding |
|
|
8,649,400 |
|
|
8,552,405 |
|
|
8,499,559 |
|
Book value per share |
|
$ |
36.29 |
|
$ |
33.86 |
|
$ |
31.01 |
|
Equity to assets |
|
|
12.50 |
% |
|
12.24 |
% |
|
12.79 |
% |
|
|
|
|
|
|
|
|
|
|
|
Capital Ratios (1) |
|
|
|
|
|
|
|
|
|
|
Tier 1 leverage ratio |
|
|
11.68 |
% |
|
11.87 |
% |
|
12.06 |
% |
Common equity tier 1 capital ratio |
|
|
14.24 |
|
|
14.18 |
|
|
14.89 |
|
Tier 1 capital ratio |
|
|
14.24 |
|
|
14.18 |
|
|
14.89 |
|
Total capital ratio |
|
|
15.49 |
|
|
15.43 |
|
|
16.11 |
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality |
|
|
|
|
|
|
|
|
|
|
Nonperforming loans |
|
$ |
5,136 |
|
$ |
8,572 |
|
$ |
8,736 |
|
Allowance for credit losses to total loans |
|
|
1.30 |
% |
|
1.37 |
% |
|
1.30 |
% |
Nonperforming loans to total loans |
|
|
0.27 |
|
|
0.49 |
|
|
0.58 |
|
Nonperforming assets to total assets |
|
|
0.20 |
|
|
0.36 |
|
|
0.42 |
|
Allowance to nonperforming loans |
|
|
481 |
|
|
280 |
|
|
222 |
|
| (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 |
|
Six Months Ended |
|
|||||||||||
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
|||||||
|
|
2026 |
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
|||||
Interest income |
|
$ |
41,301 |
|
$ |
39,033 |
|
$ |
33,536 |
|
$ |
80,334 |
|
$ |
65,049 |
|
Interest expense |
|
|
5,553 |
|
|
5,029 |
|
|
4,282 |
|
|
10,582 |
|
|
8,186 |
|
Net interest income |
|
|
35,748 |
|
|
34,004 |
|
|
29,254 |
|
|
69,752 |
|
|
56,863 |
|
Provision for credit losses |
|
|
2,900 |
|
|
2,700 |
|
|
3,525 |
|
|
5,600 |
|
|
5,025 |
|
Net interest income after provision for credit losses |
|
|
32,848 |
|
|
31,304 |
|
|
25,729 |
|
|
64,152 |
|
|
51,838 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment processing fees |
|
|
5,126 |
|
|
5,143 |
|
|
5,107 |
|
|
10,269 |
|
|
10,019 |
|
Other noninterest income |
|
|
1,257 |
|
|
1,312 |
|
|
1,470 |
|
|
2,569 |
|
|
2,709 |
|
Total noninterest income |
|
|
6,383 |
|
|
6,455 |
|
|
6,577 |
|
|
12,838 |
|
|
12,728 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
|
12,605 |
|
|
12,221 |
|
|
10,216 |
|
|
24,826 |
|
|
20,281 |
|
Merger expenses |
|
|
1,070 |
|
|
1,272 |
|
|
— |
|
|
2,342 |
|
|
— |
|
Other expenses |
|
|
7,430 |
|
|
7,164 |
|
|
6,846 |
|
|
14,594 |
|
|
13,529 |
|
Total noninterest expense |
|
|
21,105 |
|
|
20,657 |
|
|
17,062 |
|
|
41,762 |
|
|
33,810 |
|
Income before income taxes |
|
|
18,126 |
|
|
17,102 |
|
|
15,244 |
|
|
35,228 |
|
|
30,756 |
|
Income taxes |
|
|
5,148 |
|
|
4,891 |
|
|
3,354 |
|
|
10,039 |
|
|
7,459 |
|
Net income |
|
$ |
12,978 |
|
$ |
12,211 |
|
$ |
11,890 |
|
$ |
25,189 |
|
$ |
23,297 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.57 |
|
$ |
1.48 |
|
$ |
1.48 |
|
$ |
3.05 |
|
$ |
2.91 |
|
Diluted |
|
|
1.49 |
|
|
1.40 |
|
|
1.38 |
|
|
2.89 |
|
|
2.70 |
|
Basic - adjusted (1) |
|
|
1.69 |
|
|
1.67 |
|
|
1.48 |
|
|
3.35 |
|
|
2.91 |
|
Diluted - adjusted (1) |
|
|
1.60 |
|
|
1.58 |
|
|
1.38 |
|
|
3.18 |
|
|
2.70 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Financial Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets |
|
|
2.09 |
% |
|
2.10 |
% |
|
2.37 |
% |
|
2.10 |
% |
|
2.38 |
% |
Return on average equity |
|
|
17.06 |
|
|
16.82 |
|
|
18.74 |
|
|
16.94 |
|
|
18.93 |
|
Adjusted return on average assets (1) |
|
|
2.25 |
|
|
2.37 |
|
|
2.37 |
|
|
2.31 |
|
|
2.38 |
|
Adjusted return on average equity (1) |
|
|
18.33 |
|
|
18.96 |
|
|
18.74 |
|
|
18.64 |
|
|
18.93 |
|
Net interest margin |
|
|
5.96 |
|
|
6.04 |
|
|
6.03 |
|
|
6.00 |
|
|
5.99 |
|
Efficiency ratio |
|
|
50.1 |
|
|
51.1 |
|
|
47.6 |
|
|
50.6 |
|
|
48.6 |
|
Adjusted efficiency ratio (1) |
|
|
47.6 |
|
|
46.9 |
|
|
47.6 |
|
|
47.2 |
|
|
48.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends paid per common share |
|
$ |
0.200 |
|
$ |
0.200 |
|
$ |
0.175 |
|
$ |
0.400 |
|
$ |
0.350 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average basic shares |
|
|
8,274,280 |
|
|
8,252,720 |
|
|
8,029,541 |
|
|
8,263,559 |
|
|
8,009,382 |
|
Weighted average diluted shares |
|
|
8,726,355 |
|
|
8,700,319 |
|
|
8,639,038 |
|
|
8,713,539 |
|
|
8,620,501 |
|
| (1) | See non-GAAP reconciliation provided at the end of this news release. |
9
ESQUIRE FINANCIAL HOLDINGS, INC.
Consolidated Average Balance Sheets and Average Yield/Cost (unaudited)
(dollars in thousands)
|
|
Three Months Ended |
|
||||||||||||||||||||||
|
|
June 30, |
|
March 31, |
|
June 30, |
|
||||||||||||||||||
|
|
2026 |
|
2026 |
|
2025 |
|
||||||||||||||||||
|
|
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 |
|
$ |
1,876,857 |
|
$ |
36,417 |
|
7.78 |
% |
$ |
1,771,003 |
|
$ |
34,298 |
|
7.85 |
% |
$ |
1,462,401 |
|
$ |
28,762 |
|
7.89 |
% |
Securities, includes restricted stock |
|
|
322,761 |
|
|
3,046 |
|
3.79 |
% |
|
334,459 |
|
|
3,178 |
|
3.85 |
% |
|
332,965 |
|
|
3,127 |
|
3.77 |
% |
Interest earning cash and other |
|
|
205,031 |
|
|
1,838 |
|
3.60 |
% |
|
176,268 |
|
|
1,557 |
|
3.58 |
% |
|
151,915 |
|
|
1,647 |
|
4.35 |
% |
Total interest earning assets |
|
|
2,404,649 |
|
|
41,301 |
|
6.89 |
% |
|
2,281,730 |
|
|
39,033 |
|
6.94 |
% |
|
1,947,281 |
|
|
33,536 |
|
6.91 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST EARNING ASSETS |
|
|
80,188 |
|
|
|
|
|
|
|
74,655 |
|
|
|
|
|
|
|
69,289 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL AVERAGE ASSETS |
|
$ |
2,484,837 |
|
|
|
|
|
|
$ |
2,356,385 |
|
|
|
|
|
|
$ |
2,016,570 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST BEARING LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, Money Market deposits |
|
$ |
1,571,288 |
|
$ |
5,502 |
|
1.40 |
% |
$ |
1,458,983 |
|
$ |
4,957 |
|
1.38 |
% |
$ |
1,178,058 |
|
$ |
4,225 |
|
1.44 |
% |
Time deposits |
|
|
6,415 |
|
|
50 |
|
3.13 |
% |
|
8,148 |
|
|
67 |
|
3.33 |
% |
|
6,037 |
|
|
56 |
|
3.72 |
% |
Total interest bearing deposits |
|
|
1,577,703 |
|
|
5,552 |
|
1.41 |
% |
|
1,467,131 |
|
|
5,024 |
|
1.39 |
% |
|
1,184,095 |
|
|
4,281 |
|
1.45 |
% |
Borrowings |
|
|
42 |
|
|
1 |
|
9.55 |
% |
|
372 |
|
|
5 |
|
5.45 |
% |
|
42 |
|
|
1 |
|
9.55 |
% |
Total interest bearing liabilities |
|
|
1,577,745 |
|
|
5,553 |
|
1.41 |
% |
|
1,467,503 |
|
|
5,029 |
|
1.39 |
% |
|
1,184,137 |
|
|
4,282 |
|
1.45 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST BEARING LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
|
581,150 |
|
|
|
|
|
|
|
577,194 |
|
|
|
|
|
|
|
562,056 |
|
|
|
|
|
|
Other liabilities |
|
|
20,752 |
|
|
|
|
|
|
|
17,305 |
|
|
|
|
|
|
|
15,902 |
|
|
|
|
|
|
Total noninterest bearing liabilities |
|
|
601,902 |
|
|
|
|
|
|
|
594,499 |
|
|
|
|
|
|
|
577,958 |
|
|
|
|
|
|
Stockholders' equity |
|
|
305,190 |
|
|
|
|
|
|
|
294,383 |
|
|
|
|
|
|
|
254,475 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL AVG. LIABILITIES AND EQUITY |
|
$ |
2,484,837 |
|
|
|
|
|
|
$ |
2,356,385 |
|
|
|
|
|
|
$ |
2,016,570 |
|
|
|
|
|
|
Net interest income |
|
|
|
|
$ |
35,748 |
|
|
|
|
|
|
$ |
34,004 |
|
|
|
|
|
|
$ |
29,254 |
|
|
|
Net interest spread |
|
|
|
|
|
|
|
5.48 |
% |
|
|
|
|
|
|
5.55 |
% |
|
|
|
|
|
|
5.46 |
% |
Net interest margin |
|
|
|
|
|
|
|
5.96 |
% |
|
|
|
|
|
|
6.04 |
% |
|
|
|
|
|
|
6.03 |
% |
Deposits (including nonint. demand deposits) |
|
$ |
2,158,853 |
|
$ |
5,552 |
|
1.03 |
% |
$ |
2,044,325 |
|
$ |
5,024 |
|
1.00 |
% |
$ |
1,746,151 |
|
$ |
4,281 |
|
0.98 |
% |
10
ESQUIRE FINANCIAL HOLDINGS, INC.
Consolidated Average Balance Sheets and Average Yield/Cost (unaudited)
(dollars in thousands)
|
|
Six Months Ended June 30, |
|
||||||||||||||
|
|
2026 |
|
2025 |
|
||||||||||||
|
|
Average |
|
|
|
|
Average |
|
Average |
|
|
|
|
Average |
|
||
|
|
Balance |
|
Interest |
|
Yield/Cost |
|
Balance |
|
Interest |
|
Yield/Cost |
|
||||
INTEREST EARNING ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, held for investment |
|
$ |
1,824,222 |
|
$ |
70,715 |
|
7.82 |
% |
$ |
1,428,689 |
|
$ |
55,572 |
|
7.84 |
% |
Securities, includes restricted stock |
|
|
328,577 |
|
|
6,224 |
|
3.82 |
% |
|
330,416 |
|
|
6,169 |
|
3.77 |
% |
Interest earning cash and other |
|
|
190,729 |
|
|
3,395 |
|
3.59 |
% |
|
153,831 |
|
|
3,308 |
|
4.34 |
% |
Total interest earning assets |
|
|
2,343,528 |
|
|
80,334 |
|
6.91 |
% |
|
1,912,936 |
|
|
65,049 |
|
6.86 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST EARNING ASSETS |
|
|
77,438 |
|
|
|
|
|
|
|
65,107 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL AVERAGE ASSETS |
|
$ |
2,420,966 |
|
|
|
|
|
|
$ |
1,978,043 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST BEARING LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, Money Market deposits |
|
$ |
1,515,446 |
|
$ |
10,459 |
|
1.39 |
% |
$ |
1,156,200 |
|
$ |
8,009 |
|
1.40 |
% |
Time deposits |
|
|
7,277 |
|
|
117 |
|
3.24 |
% |
|
8,409 |
|
|
175 |
|
4.20 |
% |
Total interest bearing deposits |
|
|
1,522,723 |
|
|
10,576 |
|
1.40 |
% |
|
1,164,609 |
|
|
8,184 |
|
1.42 |
% |
Borrowings |
|
|
206 |
|
|
6 |
|
5.87 |
% |
|
43 |
|
|
2 |
|
9.38 |
% |
Total interest bearing liabilities |
|
|
1,522,929 |
|
|
10,582 |
|
1.40 |
% |
|
1,164,652 |
|
|
8,186 |
|
1.42 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST BEARING LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
|
579,183 |
|
|
|
|
|
|
|
548,693 |
|
|
|
|
|
|
Other liabilities |
|
|
19,038 |
|
|
|
|
|
|
|
16,519 |
|
|
|
|
|
|
Total noninterest bearing liabilities |
|
|
598,221 |
|
|
|
|
|
|
|
565,212 |
|
|
|
|
|
|
Stockholders' equity |
|
|
299,816 |
|
|
|
|
|
|
|
248,179 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL AVG. LIABILITIES AND EQUITY |
|
$ |
2,420,966 |
|
|
|
|
|
|
$ |
1,978,043 |
|
|
|
|
|
|
Net interest income |
|
|
|
|
$ |
69,752 |
|
|
|
|
|
|
$ |
56,863 |
|
|
|
Net interest spread |
|
|
|
|
|
|
|
5.51 |
% |
|
|
|
|
|
|
5.44 |
% |
Net interest margin |
|
|
|
|
|
|
|
6.00 |
% |
|
|
|
|
|
|
5.99 |
% |
Deposits (including nonint. demand deposits) |
|
$ |
2,101,906 |
|
$ |
10,576 |
|
1.01 |
% |
$ |
1,713,302 |
|
$ |
8,184 |
|
0.96 |
% |
11
ESQUIRE FINANCIAL HOLDINGS, INC.
Consolidated Non-GAAP Financial Measure Reconciliation (unaudited)
(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 merger expenses and accelerated stock compensation, net of tax.
|
Three Months Ended |
|
Six Months Ended |
|
|||||||||||
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
|||||||
|
2026 |
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
|||||
Net income – GAAP |
$ |
12,978 |
|
$ |
12,211 |
|
$ |
11,890 |
|
$ |
25,189 |
|
$ |
23,297 |
|
Adjustments to net income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger expenses |
|
1,070 |
|
|
1,272 |
|
|
— |
|
|
2,342 |
|
|
— |
|
Accelerated stock compensation |
|
— |
|
|
398 |
|
|
— |
|
|
398 |
|
|
— |
|
Income tax effect of adjustments |
|
(100) |
|
|
(120) |
|
|
— |
|
|
(220) |
|
|
— |
|
Adjusted net income |
$ |
13,948 |
|
$ |
13,761 |
|
$ |
11,890 |
|
$ |
27,709 |
|
$ |
23,297 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets – GAAP |
|
2.09 |
% |
|
2.10 |
% |
|
2.37 |
% |
|
2.10 |
% |
|
2.38 |
% |
Adjusted return on average assets |
|
2.25 |
% |
|
2.37 |
% |
|
2.37 |
% |
|
2.31 |
% |
|
2.38 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average equity – GAAP |
|
17.06 |
% |
|
16.82 |
% |
|
18.74 |
% |
|
16.94 |
% |
|
18.93 |
% |
Adjusted return on average equity |
|
18.33 |
% |
|
18.96 |
% |
|
18.74 |
% |
|
18.64 |
% |
|
18.93 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share – GAAP |
$ |
1.49 |
|
$ |
1.40 |
|
$ |
1.38 |
|
$ |
2.89 |
|
$ |
2.70 |
|
Adjusted diluted earnings per share |
$ |
1.60 |
|
$ |
1.58 |
|
$ |
1.38 |
|
$ |
3.18 |
|
$ |
2.70 |
|
The following table presents a reconciliation of efficiency ratio (non-GAAP) and adjusted efficiency ratio (non-GAAP).
Adjusted noninterest expense, which is used to compute the adjusted efficiency ratio, excludes the impact of merger expenses and accelerated stock compensation.
|
Three Months Ended |
|
Six Months Ended |
|
|||||||||||
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
|||||||
|
2026 |
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
|||||
Efficiency ratio – non-GAAP(1) |
|
50.1 |
% |
|
51.1 |
% |
|
47.6 |
% |
|
50.6 |
% |
|
48.6 |
% |
Noninterest expense – GAAP |
$ |
21,105 |
|
$ |
20,657 |
|
$ |
17,062 |
|
$ |
41,762 |
|
$ |
33,810 |
|
Less: merger expenses |
|
1,070 |
|
|
1,272 |
|
|
— |
|
|
2,342 |
|
|
— |
|
Less: accelerated stock compensation |
|
— |
|
|
398 |
|
|
— |
|
|
398 |
|
|
— |
|
Adjusted noninterest expense – non-GAAP |
$ |
20,035 |
|
$ |
18,987 |
|
$ |
17,062 |
|
$ |
39,022 |
|
$ |
33,810 |
|
Net interest income – GAAP |
|
35,748 |
|
|
34,004 |
|
|
29,254 |
|
|
69,752 |
|
|
56,863 |
|
Noninterest income – GAAP |
|
6,383 |
|
|
6,455 |
|
|
6,577 |
|
|
12,838 |
|
|
12,728 |
|
Total revenue – GAAP |
$ |
42,131 |
|
$ |
40,459 |
|
$ |
35,831 |
|
$ |
82,590 |
|
$ |
69,591 |
|
Adjusted efficiency ratio – non-GAAP(2) |
|
47.6 |
% |
|
46.9 |
% |
|
47.6 |
% |
|
47.2 |
% |
|
48.6 |
% |
| (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 adjusted noninterest expense by the sum of GAAP net interest income and GAAP noninterest income. |
12
Exhibit 99.2
|
Ensuring our Clients and Our Institution Succeed Boldly Listed as ESQ Esquire Financial Holdings, Inc. (Financial Holding Company for Esquire Bank, N.A.) 2Q 2026 Investor Presentation Exhibit 99.2 |
|
Forward Looking Disclosure This presentation 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; the ability to complete, or any delays in completing, the pending merger between the Company and Signature; any failure to realize the anticipated benefits of the transaction when expected or at all; certain restrictions during the pendency of the transaction that may impact the Company’s ability to pursue, certain business opportunities or strategic transactions; the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events, diversion of management’s attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships, including those resulting from the completion of the merger and integration of the companies 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.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. This presentation contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). 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. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. A reconciliation of the non-GAAP measures used in this presentation to the most directly comparable GAAP measures is provided in the Appendix to this presentation. 2 |
|
Decades of expertise in the national litigation market, a complex, fragmented, and underserved vertical poised for disruption Asset sensitive model anchored by law firm loans yielding approximately 8.80% “Branchless” and tech enabled national core deposit platform funded at 1.03% Driving litigation loan and deposit growth with a 5 Year CAGR of approximately 25%+ since 2021 Decades of expertise in sales, risk, compliance, and treasury management Independent Sales Organization (“ISO”) model with 93,000 merchants nationally in all 50 states Stable and consistent fee income represents 15% of total revenue Tech-enabled platform performing commercial treasury clearing services for $10.6 billion in volume across 153 million transactions ROA and ROTCE of 2.09% and 17.06%, respectively (Adjusted 2.25%(1) and 18.33%(1)) Industry leading NIM of 5.96% Diversified revenue stream with strong NIM and stable fee income Strong efficiency ratio of 50.1% (Adjusted 47.6%(1)) while investing in resources (employees, technology, and 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”) using our CRM to power prospective client engagements nationally Leverage artificial intelligence (“AI”), advanced data analytics, and personalization features to deliver real-time thought leadership content to client and prospective clients 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 National Payment Processing Vertical (Merchant Services) Small Business Banking Nationally Technology – the Future A Catalyst for Strong Growth 3 How Our Clients Succeed Boldly (1) See non-GAAP reconciliation provided in appendix. |
|
Strong Growth Driven by Unique National Verticals How Esquire Succeeds Boldly Key Highlights Strong growth in higher yielding variable rate commercial loans nationally, primarily litigation related loans Stable low-cost “branchless” and tech enabled deposit model Equity to Assets of 12.50% Common Equity Tier 1 of 14.24% (Bank Level) Book value per share of $36.29 4 at June 30, 2026 |
|
Stable low-cost “branchless” funding model with a strong commercial deposit franchise nationally DDA and escrow-based IOLTA accounts represent 25% and 60% of total deposits at June 30, 2026, respectively Higher yielding variable rate commercial loans anchored by our national litigation portfolio Asset sensitive balance sheet with approximately 90% of our variable rate commercial loans having one-year interest rate floors at their origination or renewal dates Resilient net interest margin despite significant declines in short-term rates since 2023 How Esquire Succeeds Boldly 5 Resilient Industry Leading Net Interest Margin |
|
Strong Revenue Growth ($ in thousands) at June 30, 2026 How Esquire Succeeds Boldly 6 Key Highlights Strong and resilient net interest margin Stable payment processing fee income Growing ASP fee income derived from off-balance sheet funds management |
|
Consistent Industry Leading Performance & Growth How Esquire Succeeds Boldly Industry Recognition & Awards #1 Best Law Firm Funding Provider in The Recorder’s 2026 “Best Of” survey KBW 2026 Bank Honor Roll for the third consecutive year 2025 Raymond James Community Bankers Cup for the eighth consecutive year Piper Sandler 2025 Bank & Thrift Sm-All Stars for the third time in several years Best-Performing Community Bank List of 2024 & 2025 by S&P Global Top 10 merchant acquiring bank by the Nilson Report Best In Class Marketer by the Association of National Advertisers B2 Awards in 2025 for the third consecutive year 7 at June 30, 2026 (1) See non-GAAP reconciliation provided at the end of this presentation |
|
Loan Portfolio Diversification with Focused Growth Focused growth in higher yielding variable rate commercial litigation related loans with strong credit metrics on a national basis Selective commercial real estate loan growth with strong historical performance, DSCRs, and LTVs in the NY metro market How Esquire Succeeds Boldly 8 at June 30, 2026 |
|
Substantially all of our $1.33 billion in commercial loans are variable rate and tied to prime comprising approximately 70% 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 5.9% and 11.8%, respectively at March 31, 2026 Despite asset sensitivity and declining short -term rates since late 2023, a resilient NIM of approximately 6.00% since 2023 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 8.80% Funded with low-cost relationship based commercial litigation related deposits Litigation deposits to litigation loan facilities drawn is approximately 133% How Esquire Succeeds Boldly 10 |
|
Commercial Litigation Vertical: Proven Model, Significant Runway How Esquire Succeeds Boldly 11 Sustained Platform Growth… ...Through Exceptional Client Relationships Litigation customers that have banked with Esquire for four years have a CAGR, since inception of their banking relationship, on their loan and deposit balances of 15% and 30%+, respectively Full law firm banking relationships quickly grow as customers benefit from Esquire’s extensive experience, suite of resources, and deployment of credit facilities, allowing the law firms to invest in & grow their business National market expansion introduces a new cohort of prospective clients into this proven relationship-growth engine Significant growth opportunities including, but not limited to, the top three largest metro markets – New York, Los Angeles, and Chicago |
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Esquire’s Bold Opportunities New York Metro Area Real Estate A Reliable Asset Class & Source of Liquidity Selective in our property and sponsor selection process Strong generational owners/operators with high quality net worth No office or construction/land loan exposure Multifamily and CRE portfolio average current DSCR and original LTV of 1.7x and 54%, respectively Rent regulated, free market, and mixed (both rent regulated and free market) represent approximately one -third each of the $391 million multifamily loan portfolio Rent regulated and mixed multifamily loans provide unique opportunities for regulatory CRA credit CRE exposure is 168% of Bank level regulatory Tier 1 capital plus the allowance for credit losses (“ACL”). CRE exposure is 152% of consolidated level regulatory Tier 1 capital plus the ACL Pledged Multifamily and Residential loan portfolio provides liquidity totaling $249.5 million through the Federal Home Loan Bank of NY (“FHLB”) program as of June 30, 2026 12 |
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Solid Credit Metrics, Asset Quality and ACL Coverage How Esquire Succeeds Boldly at June 30, 2026 Note – All asset quality metrics are based on our loans held for investment portfolio (1) NFL consumer loan portfolio - $9.0 million charge-off. 13 |
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Deposit Composition with Strong Growth Our tech enabled deposit platform utilizes our corporate cash management suite of services, creating a highly efficient “branchless” platform nationally Our overall liquidity position (cash, borrowing capacity, and available reciprocal client sweep balances) totaled $1.19 billion, or 54% of total deposits, creating a highly liquid and unlevered balance sheet How Esquire Succeeds Boldly 14 ($ in millions) at June 30, 2026 |
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*Note: Excludes sweeps totaling $1.0 billion Deposit Composition Details DDA and NOW (escrow or IOLTA funds) deposits total 86% of total deposits, representing a stable low-cost funding source in various interest rate scenarios Litigation and payment processing deposits represent 79% and 6% of total deposits at June 30, 2026, respectively Uninsured deposits (excluding $18.9 million of the Company’s deposits) totaled $722.4 million, or 33%, of total deposits with approximately 65% representing 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 Off-balance sheet sweep funds totaled $1.0 billion at June 30, 2026, with $392.5 million, or 38%, available for additional on-balance sheet liquidity How Esquire Succeeds Boldly 15 |
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Currently servicing 93,000 merchants across 50 states in our payment processing (merchant acquiring) vertical Fee income, primarily payment processing fees, represents 15% of total revenue for the quarter ended June 30, 2026 How Esquire Succeeds Boldly Stable & Consistent Noninterest Income at June 30, 2026 16 |
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How Esquire Succeeds Boldly Key Highlights Strong and stable DDA reserves and residuals Protecting capital from merchant chargebacks and returns 17 Protecting Our Company with Strong Payment Processing Reserves at June 30, 2026 |
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Significant national markets primed for disruption: $529 billion & 100,000+ firms in the litigation vertical and $12.2 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 solutions and state-of-the-art technology geared towards effective client acquisition 18 |
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Technology Driving Bold Success Client Centric Technology A Key Driver for Future Growth and Client Relationship Management 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. 19 Online Banking |
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Succeeding Boldly Listed as ESQ Contact Information: Eric S. Bader Executive Vice President & Chief Operating Officer 516-535-2002 eric.bader@esqbank.com |
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Appendix & Supplemental Disclosure National Markets – Litigation & Payment Processing Verticals & Non-GAAP Reconciliation |
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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, digital brand awareness, regulatory/compliance, regional business development officers, and decades of experience Decades of Industry Track Record Extensive Litigation Experience In-House Deep Relationships with Respected Firms Nationally and Trial Associations Daily Resources and Research Cash Flow Lending Coupled with Borrowing Base or Asset Based Approach Tailoring unique solutions other banks do not offer Typically advancing more than traditional banks, on traditional banking terms 22 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. |
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23 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 (+) Solutions 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 Technology Proprietary CRM Platform Account-Based Digital Marketing (“ABM”) Proprietary Thought Leadership Content Artificial Intelligence (“AI”) Powering Personalized ABM Unique Risk Management and Boarding Platforms Commercial Cash Management Platform Specialized Case Cost Lending and Law Firm Management Platform 23 |
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Payment Processing – Current ISO Model How Esquire Succeeds Boldly What is an ISO? ISO Responsibilities They Do Merchant Vertical and Front-End Technology Focus Sales Agent Model Performs Initial Underwriting Boards Merchant to Core 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 Financial and Compliance Risk Management Commercial Treasury Function for Merchant Clearing and ISO Cash Management Maintaining and Monitor ISO and Merchant Reserves (DDA) 24 |
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The payments industry CAGR was 8% from 2021 to 2025 to an estimated total payment volume of $12.2 trillion Esquire’s Bold Opportunities Payment Volume Trends – A Significant Growth Opportunity Sources: Company Financial Records, Note: PayPal figures represent PayPal’s estimated U.S.percent share of “Total Payment Volume” (TPV).PayPal volume includes volume from a bank account, a PayPal account balance, a PayPalCredit account, a credit or debit card or other stored value products such as coupons and gift cards. Assuch, some of this volume may be included in other networks aswell. PayPal’s classification in the payments industry ecosystem is varied/debated as it performs functions attributed to a payment network, an issuer, acquirer, etc., and its financial reporting does not directly align with other payment network reporting structures and methods. Discover volume includes Discover Network and PulseNetwork transactions. 25 at December 31, 2025 ($ in billions) |
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Appendix Non-GAAP Financial Measure Reconciliation 26 (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 merger expenses and accelerated stock compensation, net of tax. Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, 2026 2026 2025 2026 2025 Net income – GAAP $ 12,978 $ 12,211 $ 11,890 $ 25,189 $ 23,297 Adjustments to net income: Merger expenses 1,070 1,272 — 2,342 — Accelerated stock compensation — 398 — 398 — Income tax effect of adjustments (100) (120) — (220) — Adjusted net income $ 13,948 $ 13,761 $ 11,890 $ 27,709 $ 23,297 Return on average assets – GAAP 2.09 % 2.10 % 2.37 % 2.10 % 2.38 % Adjusted return on average assets 2.25 % 2.37 % 2.37 % 2.31 % 2.38 % Return on average equity – GAAP 17.06 % 16.82 % 18.74 % 16.94 % 18.93 % Adjusted return on average equity 18.33 % 18.96 % 18.74 % 18.64 % 18.93 % Diluted earnings per share – GAAP $ 1.49 $ 1.40 $ 1.38 $ 2.89 $ 2.70 Adjusted diluted earnings per share $ 1.60 $ 1.58 $ 1.38 $ 3.18 $ 2.70 |
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Appendix Non-GAAP Financial Measure Reconciliation 27 (all dollars in thousands) The following table presents a reconciliation of efficiency ratio (non-GAAP) and adjusted efficiency ratio (non-GAAP). Adjusted noninterest expense, which is used to compute the adjusted efficiency ratio, excludes the impact of merger expenses and accelerated stock compensation. (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 adjusted noninterest expense by the sum of GAAP net interest income and GAAP noninterest income. Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, 2026 2026 2025 2026 2025 Efficiency ratio – non-GAAP(1) 50.1 % 51.1 % 47.6 % 50.6 % 48.6 % Noninterest expense – GAAP $ 21,105 $ 20,657 $ 17,062 $ 41,762 $ 33,810 Less: merger expenses 1,070 1,272 — 2,342 — Less: accelerated stock compensation — 398 — 398 — Adjusted noninterest expense – non-GAAP $ 20,035 $ 18,987 $ 17,062 $ 39,022 $ 33,810 Net interest income – GAAP 35,748 34,004 29,254 69,752 56,863 Noninterest income – GAAP 6,383 6,455 6,577 12,838 12,728 Total revenue – GAAP $ 42,131 $ 40,459 $ 35,831 $ 82,590 $ 69,591 Adjusted efficiency ratio – non-GAAP(2) 47.6 % 46.9 % 47.6 % 47.2 % 48.6 % |
