Esquire Financial Holdings, Inc. · NASDAQ:ESQ
Esquire Financial — Q3 2021 Earnings Presentation
29 slides from Esquire Financial's earnings presentation, Oct 25, 2021
Slide 1: 3Q 2021 Investor Presentation
Ensuring our Clients and Our Institution Succeed Boldly Listed as ESQ Esquire Financial Holdings, Inc. (Financial Holding Company for Esquire Bank, N.A.) 3Q 2021 Investor Presentation Exhibit 99.2
Slide 2: Forward Looking Disclosure
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, ar
Slide 3: Our Mission
Ensuring that our Company and clients succeed boldly with innovative products and technology, driving client success through relationship banking Our Mission
Slide 4: How Our Clients Succeed Boldly
Expertise in the litigation market for 14+ years Client centric – relationship banking with a single point of contact Unique products and services tailored to client’s needs Strong underwriting and excellent commercial credit metrics How Our Clients Succeed Boldly Expertise in sales, risk,
Slide 5: Financial Highlights
Financial Highlights How Esquire Succeeds Boldly Key Highlights Industry leading returns from our unique national business models Stable payment processing fee income – noninterest income totaled 30% of revenue Branchless low-cost deposits with a cost of funds of 0.09% at September 30, 2021 *
Slide 6: Financial Highlights, cont'd
Financial Highlights, cont’d How Esquire Succeeds Boldly 6 at September 30, 2021 *EPS – Diluted Earnings Per Share (1) Adjusted to exclude the $2.5 million charge, net of tax, related to the reclassification of our legacy NFL consumer post settlement loan portfolio from held for investment to held f
Slide 7: Strong Growth Driven by Unique National Verticals
Strong Growth Driven by Unique National Verticals How Esquire Succeeds Boldly Key Highlights Strong growth in higher yielding loans Stable low-cost deposit model Equity to Assets of 12.21% 7 at September 30, 2021
Slide 8: Strong Revenue Growth
Strong Revenue Growth How Esquire Succeeds Boldly 8 (1) Includes a $384 thousand charge related to the NFL loan portfolio valuation. Key Highlights Strong net interest margin Stable payment processing fee income
Slide 9: Stable low-cost deposit model; Industry Leading Net Interest Margin
Stable low-cost deposit model Strong commercial deposits franchise DDA and escrow-based NOW accounts represent 43% and 36% of total deposits at September 30, 2021, respectively Higher yielding variable rate commercial loans anchored by our litigation (attorney related) portfolio How Esquire
Slide 10: Loan Portfolio Diversification with Focused Growth
Loan Portfolio Diversification with Focused Growth Focused growth in higher yielding commercial loans with strong credit metrics Selective multifamily loan growth with strong historical performance in the NY metro market How Esquire Succeeds Boldly 10 at September 30, 2021
Slide 11: Loan Portfolio Diversification with Focused Growth
Approximately 54% of our loan portfolio is variable rate of which 87% have interest rate floor protection at September 30, 2021 Asset sensitive – estimated sensitivity of projected annualized net interest income (“NII”) up 100 and 200 basis point rate scenarios increases projected NII by 9.3% an
Slide 12: Esquire's Bold Opportunities
Esquire’s Bold Opportunities New York City properties total $1.3 trillion in Market Value.* A Significant Growth Opportunity Thoughtful in our property and borrower selection process Minimal historical losses Average debt-service coverage (“DSCR”) of approximately 1.5x Average loan-to-value
Slide 13: Solid Credit Metrics, Asset Quality and ALLL Coverage
Solid Credit Metrics, Asset Quality and ALLL Coverage How Esquire Succeeds Boldly 13 at September 30, 2021 *ALLL – Allowance for loan and lease losses Note – All asset quality metrics are based on our loans held for investment portfolio (1) Reclassified the legacy NFL consumer loan portfolio from he
Slide 14: Deposit Composition and Growth
*Note: Excludes sweeps totaling $444 million Deposit Composition and Growth DDA and NOW (escrow funds) deposits total 79% of total deposits, representing stable funding sources in various interest rate scenarios Litigation and payment processing deposits represent 68% and 16% of total deposits a
Slide 15: Recognized for Succeeding Boldly
Recognized for Succeeding Boldly Raymond James’ #1 Top Performing Community Bank (2020, 2019) Piper Sandler & Co.’s FSG Top Ideas (2021, 2020) 2019 Bank and Thrift SM – All Stars 15 Strong Financial Metrics = Industry Leading Performance Consistent recognition of exemplary performance from the indus
Slide 16: National Litigation Market
National Litigation Market Law firms need bold financial partners
Slide 17: The Esquire Competitive Advantage
The Esquire Competitive Advantage Esquire’s Bold Opportunities U.S. Litigation Market A Significant Growth Opportunity U.S. Tort actions are estimated to consume 1.5-2.0% of U.S. GDP* annually or $429 billion** Esquire does not compete with non-bank finance companies Significant barriers to en
Slide 18: Commercial Litigation (Law Firm) Loans
Commercial Litigation (Law Firm) Loans Full annual underwriting: 3 years financials and tax returns (business and personal) Full case inventory valuation process Collateral assignment of full case inventory Diversity across law firm inventories and collateral Personal guarantees Average
Slide 19: Payment Processing
Payment Processing Succeed Boldly with flexible payment options across several payment platforms
Slide 20: Payment Volume Trends
The payments industry grew nearly 3% from 2019 to 2020 to an estimated total payment volume of $7.6 trillion Esquire’s Bold Opportunities Payment Volume Trends – A Significant Growth Opportunity Sources: Company Financial Records,, Note: PayPalfigures represent PayPal’s estimated U.S.percent share o
Slide 21: Independent Sales Organization (ISO) Model
Independent Sales Organization (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 Man
Slide 22: Strong Growth in Stable Noninterest Income
Currently servicing 63,000+ merchants across 50 states Noninterest income, primarily payment processing fees, represents 30% of total revenue, at September 30, 2021 How Esquire Succeeds Boldly *Payment processing CAGR is 62% 22 Strong Growth in Stable Noninterest Income at September 30, 2021 *Pa
Slide 23: Protecting Our Company with Strong Payment Processing Reserves
How Esquire Succeeds Boldly Key Highlights Strong and stable DDA reserves Protection from merchant chargebacks and returns 23 Protecting Our Company with Strong Payment Processing Reserves at September 30, 2021
Slide 24: High Tech, High Touch
High Tech, High Touch Growing boldly with financial technology for the future
Slide 25: Technology Driving Bold Success
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 enr
Slide 26: Digitally Transforming The Business of Law
26 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 and Term Loans Qualified Settlement Loans (“QS
Slide 27: Key Takeaways: Why Esquire is Set to Succeed Boldly
Large national markets primed for disruption: $429 billion for the litigation vertical and $7.6 trillion 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 We are
Slide 28: Non-GAAP Financial Measure Reconciliation
Appendix (all dollars in thousands except per share data) 28 Non-GAAP Financial Measure Reconciliation Adjusted net income, which is used to compute adjusted return on average assets, adjusted return on average common equity and adjusted earnings per common share, excludes the impact of the charge r
Slide 29: Contact Information
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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