Esquire Financial Holdings, Inc. · NASDAQ:ESQ
Esquire Financial — Q4 2021 Earnings Presentation
26 slides from Esquire Financial's earnings presentation, Jan 26, 2022
Slide 1: 4Q 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.) 4Q 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: Decades of expertise in the national litigation market Asset Sensitive model anchored
Decades of expertise in the national litigation market Asset Sensitive model anchored by law firm loans yielding approx. 7.0% Branchless stable core DDA and escrow deposits funded at 0.10% Driving loan and deposit growth with a CAGR of 23% since 2015 Expertise in sales, risk, and complianc
Slide 5: 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 12.19% 5 at December 31, 2021
Slide 6: Industry Leading Net Interest Margin
Stable low-cost deposit model Strong commercial deposits franchise DDA and escrow-based NOW accounts represent 40% and 38% of total deposits at December 31, 2021, respectively Higher yielding variable rate commercial loans anchored by our litigation (attorney related) portfolio How Esquire S
Slide 7: Strong Revenue Growth
Strong Revenue Growth How Esquire Succeeds Boldly 7 Key Highlights Strong net interest margin Stable payment processing fee income Net interest incomeOther noninterest income Payment processing income
Slide 8: 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 33% of revenue for the year ended December 31, 2021 Branchless low-cost deposits with a cost of fun
Slide 9: Financial Highlights, cont'd
Financial Highlights, cont’d How Esquire Succeeds Boldly 9 at December 31, 2021 *EPS –Diluted Earnings Per Share
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 December 31, 2021
Slide 11: Loan Portfolio Diversification with Focused Growth
Approximately 55% of our loan portfolio is variable rate of which 92% have interest rate floor protection at December 31, 2021 Asset sensitive –estimated sensitivity of projected annualized net interest income (“NII”) up 100 and 200 basis point rate scenarios increases projected NII by 9.6% and
Slide 12: Solid Credit Metrics, Asset Quality and ALLL Coverage
Solid Credit Metrics, Asset Quality and ALLL Coverage How Esquire Succeeds Boldly 12 at December 31, 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 held
Slide 13: Deposit Composition and Growth
*Note: Excludes sweeps totaling $538 million 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 69% and 14% of total deposits a
Slide 14: Why Esquire is Set to Succeed Boldly
Large national markets primed for disruption: $429 billion & 100,000+ firms in the litigation vertical and $7.6 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
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
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 guarantees Average LTV of less
Slide 17: Payment Processing – Current ISO Model
Payment Processing –Current ISO Model How Esquire Succeeds Boldly What is an ISO? ISO Responsibilities They Do Merchant Vertical and Technology Focus Sales Agent Model Performs Initial Underwriting Boards Merchant to Payment Processing Platform Installation of Merchant Equipment Manage C
Slide 18: Strong Growth in Stable Noninterest Income
Currently servicing 65,000+ merchants across 50 states Noninterest income, primarily payment processing fees, represents 33% of total revenue, at December 31, 2021 How Esquire Succeeds Boldly *Payment processing CAGR is 58% 18 Strong Growth in Stable Noninterest Income at December 31, 2021
Slide 19: 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 19 Protecting Our Company with Strong Payment Processing Reserves at December 31, 2021
Slide 20: 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 21: Succeeding Boldly
Succeeding Boldly Listed as ESQ Contact Information: Eric S. Bader Executive Vice President & Chief Operating Officer 516-535-2002 eric.bader@esqbank.com
Slide 22: Appendix
Commercial Real Estate Loans, U.S. Litigation & Payment Markets Appendix
Slide 23: Esquire's Bold Opportunities
Esquire’s Bold Opportunities New York City properties total $1.3 trillion in Market Value.* A Significant Growth Opportunity Thoughtfulin our property and borrower selection process Minimal historical losses Average debt-service coverage(“DSCR”) ofapproximately 1.5x Average loan-to-value(“LT
Slide 24: The Esquire Competitive Advantage: U.S. Litigation Market
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 25: Digitally Transforming The Business of Law
25 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 26: Payment Volume Trends – A Significant Growth Opportunity
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:CompanyFinancialRecords,Note: PayPalfiguresrepresent PayPal’sestimated U.S.percent shareof“TotalP
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