Esquire Financial Holdings, Inc. · NASDAQ:ESQ
Esquire Financial — Q3 2022 Earnings Presentation
26 slides from Esquire Financial's earnings presentation, 2022
Slide 1: Ensuring our Clients and Our Institution Succeed Boldly
Ensuring our Clients and Our Institution Succeed Boldly Esquire Financial Holdings, Inc. (Financial Holding Company for Esquire Bank, N.A.) 3Q 2022 Investor Presentation Listed as ESQ
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
Our Mission Ensuring that our Company and clients succeed boldly with innovative solution-based products and technology, driving client success through relationship banking
Slide 4: How Our Clients Succeed Boldly
How Our Clients Succeed Boldly Nationwide Branchless Tech Enabled Litigation & Payment Processing Verticals Generating Industry Leading Returns Litigation Vertical Payment Processing Vertical Commercial Banking Nationally (Merchant Services) Small Business Banking Nationally Decades of expertise i
Slide 5: Strong Growth Driven by Unique National Verticals
How Esquire Succeeds Boldly Strong Growth Driven by Unique National Verticals at September 30, 2022 Key Highlights Strong growth in higher yielding variable rate loans Stable low-cost branchless and tech enabled deposit model Equity to Assets of 11.02% 5
Slide 6: Industry Leading Net Interest Margin
How Esquire Succeeds Boldly Industry Leading Net Interest Margin Stable low-cost branchless deposit model Strong commercial deposits franchise nationally DDA and escrow-based NOW accounts represent 38% and 40% of total deposits at September 30, 2022, respectively Higher yielding variable rat
Slide 7: Strong Revenue Growth
How Esquire Succeeds Boldly Strong Revenue Growth Key Highlights Strong asset sensitive net interest margin Stable payment processing fee income as short-term interest rates increase 7
Slide 8: Financial Highlights
How Esquire Succeeds Boldly Financial Highlights at September 30, 2022 Key Highlights Industry leading returns from our unique and tech enabled national business models Stable payment processing fee income – noninterest income totaled 29% of revenue for the quarter ended September 30, 2022 Bra
Slide 9: Financial Highlights, cont’d
How Esquire Succeeds Boldly Financial Highlights, cont’d at September 30, 2022 *EPS – Diluted Earnings Per Share 9
Slide 10: Loan Portfolio Diversification with Focused Growth
How Esquire Succeeds Boldly Loan Portfolio Diversification with Focused Growth at September 30, 2022 Focused growth in higher yielding variable rate commercial loans with strong credit metrics Selective multifamily loan growth with strong historical performance in the NY metro market 10
Slide 11: Loan Portfolio Diversification with Focused Growth
How Esquire Succeeds Boldly Loan Portfolio Diversification with Focused Growth Approximately 57% of our loan portfolio is variable rate and primarily tied to prime as of September 30, 2022 Asset sensitive – estimated sensitivity of projected annualized net interest income (“NII”) up 100 and 200
Slide 12: Solid Credit Metrics, Asset Quality and ALLL Coverage
How Esquire Succeeds Boldly Solid Credit Metrics, Asset Quality and ALLL Coverage at September 30, 2022 12 *ALLL – Allowance for loan and lease losses (1) Reclassified the legacy NFL consumer loan portfolio from held for investment to held for sale Note – All asset quality metrics are based on our l
Slide 13: Deposit Composition and Growth
How Esquire Succeeds Boldly Deposit Composition and Growth DDA and NOW (escrow funds) deposits total 78% of total deposits, representing stable funding sources in various interest rate scenarios Litigation and payment processing deposits represent 72% and 13% of total deposits at September 30, 2
Slide 14: Why Esquire is Set to Succeed Boldly
Key Takeaways Why Esquire is Set to Succeed Boldly Significant national markets primed Tremendous untapped potential: for disruption: $429 billion & Esquire’s current market share is a 100,000+ firms in the litigation fraction of both national verticals that vertical and $9.5 trillion and are primed
Slide 15: National Markets Litigation & Payment Processing Verticals Supported by Investment in Technology
National Markets Litigation & Payment Processing Verticals Supported by Investment in Technology
Slide 16: Commercial Litigation (Law Firm) Loans
How Esquire Succeeds Boldly Commercial Litigation (Law Firm) Loans Full annual underwriting: 3 years financials and tax returns (business and personal) Full contingent case inventory valuation process & collateral assignment Diversity across law firm inventories and collateral Personal guara
Slide 17: Payment Processing – Current ISO Model
How Esquire Succeeds Boldly Payment Processing – Current ISO Model What is an ISO? ISO Responsibilities Bank Responsibilities They Do We Do Merchant Vertical and Technology Robust Policies Focus Tech Enabled Card Brand and Sales Agent Model Regulatory Compliance Performs Initial Underwriti
Slide 18: Strong Growth in Stable Noninterest Income
How Esquire Succeeds Boldly Strong Growth in Stable Noninterest Income at September 30, 2022 Currently servicing approximately 75,000 merchants across 50 states Noninterest income, primarily payment processing fees, represents 29% of total revenue, at September 30, 2022 18 *Payment processing CA
Slide 19: Protecting Our Company with Strong Payment Processing Reserves
How Esquire Succeeds Boldly Protecting Our Company with Strong Payment Processing Reserves at September 30, 2022 Key Highlights Strong and stable DDA reserves Protecting capital from merchant chargebacks and returns 19
Slide 20: Client Centric Technology A Key Driver for Future Growth
Technology Driving Bold Success Client Centric Technology A Key Driver for Future Growth AI to facilitate precision marketing and exponential customer acquisition across Artificial Intelligence* all verticals Website analytics, data enrichment and Website thought leadership content marketing Marketi
Slide 21: Succeeding Boldly
Succeeding Boldly Contact Information: Eric S. Bader Executive Vice President & Chief Operating Officer 516-535-2002 eric.bader@esqbank.com Listed as ESQ
Slide 22: Appendix: Commercial Real Estate Loans, U.S. Litigation & Payment Markets
Appendix Commercial Real Estate Loans, U.S. Litigation & Payment Markets
Slide 23: New York City properties total $1.3 trillion in Market Value
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 24: U.S. Litigation Market: A Significant Growth Opportunity
Esquire’s Bold Opportunities U.S. Litigation Market Key Highlights A Significant Growth Opportunity $429 billion** Total Addressable Market U.S. Tort actions are estimated to consume 1.5-2.0% of U.S. GDP* annually or $429 billion** (“TAM”) in litigation vertical Esquire does not compete with n
Slide 25: Aligning Law Firm Case Inventory Lifecycle to Customer Retention
Digitally Transforming The Business of Law Aligning Law Firm Case Inventory Lifecycle to Customer Retention Client Receive Case Settlement/ Disbursement Incident Intake Management Verdict $ 1-3 Years (+) Products Technology Case Cost Loans Esquire Insight – Case Management Technology Working C
Slide 26: Payment Volume Trends – A Significant Growth Opportunity
Esquire’s Bold Opportunities Payment Volume Trends – A Significant Growth Opportunity at December 31, 2021 ($ in billions) The payments industry grew nearly 25% from 2020 to 2021 to an estimated total payment volume of $9.5 trillion 2019-2021: +9.7% CAGR Sources: Company Financial Records, Note: Pay
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