Esquire Financial Holdings, Inc. · NASDAQ:ESQ
Esquire Financial — Q3 2021 Earnings Presentation
29 slides from Esquire Financial's earnings presentation, 2021
Slide 1: 3Q 2021 Investor Presentation
Ensuring our Clients and Our Institution Succeed Boldly Esquire Financial Holdings, Inc. (Financial Holding Company for Esquire Bank, N.A.) 3Q 2021 Investor Presentation Succeed Boldly Listed as ESQ
Slide 2: Forward Looking Disclosure
3) ESQUIRE E838 sce Bn 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 a
Slide 3: Ensuring that our Company and clients succeed boldly
“ESQUIRE Ensuring that our Company and clients succeed boldly with innovative products and technology, driving client success through relationship banking ‘-. y
Slide 4: How Our Clients Succeed Boldly
= B How Our Clients Succeed Boldly (£2) ESQUIRE ‘Succeed Boldly A Branchless Financial Institution with Innovative Technology and Industry Leading Returns Litigation Commercial Banking Nationally Expertise in the litigation market for 14+ years Client centric — relationship banking with a single poi
Slide 5: Financial Highlights
3) ESQUIRE EB ‘Succeed Boldly How Esquire Succeeds Boldly Financial Highlights at September 30, 2021 Return on average assets cpGR® Key Highlights Industry leading returns from our unique national business models 34% 2.0% f— 1.93% 1.81% 1.84% Stable payment processing fee income — noninterest income
Slide 6: Financial Highlights, cont'd
Ea] Esquire =) seca How Esquire Succeeds Boldly Financial Highlights, cont’d at September 30, 2021 . Return on average Diluted EPS* stockholders’ equity I 2.0 = GR 1 15% $ 16% CPS ‘ I | 12% $15 1 I | 9% I $1.0 | 1 6% | I $0.5 i aK ' | $0 0% 2015 2016 2017 2018 2019 §=2020 = 1Q 2021 2 2021 3Q 2021 20
Slide 7: Strong Growth Driven by Unique National Verticals
=) How Esquire Succeeds Boldly Strong Growth Driven by Unique National Verticals at September 30, 2021 Loans, net of deferred fees ei ($ in thousands) we $800,000 5 Os $702,865 $707,377 $600,000 $565,369 = $468,101 $400,000 $348,978 $278,578 $221,720 $200,000 205 = «2016-2017, 2018) 2019-2020: 10202
Slide 8: Strong Revenue Growth
=] ESQUIRE A 3 ‘Succeed Boldly How Esquire Succeeds Boldly Strong Revenue Growth ($ in thousands) Key Highlights $60,000 -— Strong net interest margin Stable payment processing fee income $40,000 $20,000 $0 2015 2016 2017 2018 2019 2020 1Q2021 2Q2021 3Q 2021 BB Netinierestincome — Bother noninterest
Slide 9: Industry Leading Net Interest Margin
Ea] Esquire =) seca How Esquire Succeeds Boldly Industry Leading Net Interest Margin » Stable low-cost deposit model » Strong commercial deposits franchise » DDAand escrow-based NOW accounts represent 43% and 36% of total deposits at September 30, 2021, respectively » Higher yielding variable rate c
Slide 10: Loan Portfolio Diversification with Focused Growth
=) How Esquire Succeeds Boldly Loan Portfolio Diversification with Focused Growth at September 30, 2021 Focused growth in higher yielding commercial loans with strong credit metrics Selective multifamily (oan growth with strong historical performance in the NY metro market Gross Loans ($ in thousand
Slide 11: Loan Portfolio Diversification with Focused Growth
=) How Esquire Succeeds Boldly 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”
Slide 12: Esquire's Bold Opportunities
[Ea] Esquire EB = Esquire’s Bold Opportunities New York City properties total $1 3 Real estate portfolio — $338 million trillion in Market Value.* at September 30, 2021 A Significant Growth Ma Commercial — Other Family Opportunity Commercial — Owner Occ. Hospitality 1-4 Family-Inc. & Invest. Prop. >
Slide 13: Solid Credit Metrics, Asset Quality and ALLL Coverage
3) ESQUIRE EB — How Esquire Succeeds Boldly Solid Credit Metrics, Asset Quality and ALLL Coverage at September 30, 2021 ALLL'/Loans Nonperforming Loans/Loans aoe 1.08% pd 05% 1.70% 0.43% 4% 138 0.34% oer: 1.25% F . 123% 1.22% 120% 124% 116% eas 0.26% 10% 02% 05% ors 0.00% , 0.00% , 0.00% , 0.00% 0.0
Slide 14: Deposit Composition and Growth
EB How Esquire Succeeds Boldly 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 at September 30, 20
Slide 15: Strong Financial Metrics = Industry Leading Performance
ESQUIRE ‘Succeed Boldly Strong Financial Metrics = Industry Leading Performance Consistent recognition of exemplary performance from the industry RAYMOND JAMES’ PIPER | SANDLER PIPER| SANDLER Raymond James’ Piper Sandler & 2019 Bank and #1 Top Performing Co.’s FSG Thrift SM — All Stars Community Ban
Slide 16: National Litigation Market
. ESQUIRE BANK ‘Succeed Boldly ' maiz National Litigation Market =, Law firms need bold financial partners
Slide 17: U.S. Litigation Market
pss) ESQUIRE ‘Succeed Boldly 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 non-b
Slide 18: 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 case inventory valuation process Collateral assignment of full case inventory Diversity across law firm inventories and collateral Personal
Slide 19: Payment Processing
ESQUIRE Payment Processing Succeed Boldlyv flexible payment-o across several payment platforms
Slide 20: Esquire's Bold Opportunities: Payment Volume Trends
3) ESQUIRE E838 sce Bn Esquire’s Bold Opportunities Payment Volume Trends - A Significant Growth Opportunity at December 31, 2020 (§ in billions) The payments industry grew nearly 3% from 2019 to 2020 to an estimated total payment volume of $7.6 2018-2019: +10.3% CAGR 2019-2020: +2.9% CAGR $8,000 —
Slide 21: Independent Sales Organization (ISO) Model
:5)) ESQUIRE ‘Succeed Boldly Independent Sales Organization (ISO) Model What is an ISO? ISO Responsibilities Merchant Vertical and Technology Focus Sales Agent Model Performs Initial Underwriting Boards Merchant to Payment Processing Platform Installation of Merchant Equipment Manage Call Center for
Slide 22: Strong Growth in Stable Noninterest Income
Ea] Esquire =) seca How Esquire Succeeds Boldly Strong Growth in Stable Noninterest Income at September 30, 2021 » Currently servicing 63,000+ merchants across 50 states >» Noninterest income, primarily payment processing fees, represents 30% of total revenue, at September 30, 2021 Noninterest incom
Slide 23: Protecting Our Company with Strong Payment Processing Reserves
(£2) ESQUIRE =} Sescessouty How Esquire Succeeds Boldly Protecting Our Company with Strong Payment Processing Reserves at September 30, 2021 ISO and Merchant DDA Reserves ($ in thousands) $150,000 ;— $137377 $134,345 $127,851 $120,000 |- sit7455) Key Highlights Strong and stable DDA $90,000 | reserv
Slide 24: High Tech, High Touch
_- ESQUIRE ‘Succeed Boldly High Tech, High Touch Growing boldly with, © financial technology _ for the future
Slide 25: Client Centric Technology
ESQUIRE ‘Succeed Boldly Client Centric Technology A Key Driver for Future Growth Al to facilitate precision marketing and el . ae weap +ab | eau exponential customer acquisition across all verticals . Se isscilci Website analytics, data enrichment and Website dun&bradstrect all Google Analytics thou
Slide 26: Aligning Law Firm Case Inventory Lifecycle to Customer Retention
pss) ESQUIRE ‘Succeed Boldly Aligning Law Firm Case Inventory Lifecycle to Customer Retention Client Receive Case Settlement/ Disbursement Incident Intake Management Verdict $ Case Cost Loans Esquire Insight — Case ; F Management Technology Working Capital and Term Loans Commercial Cash Management Q
Slide 27: Key Takeaways
Ea] Esquire ‘Succeed Boldly Key Takeaways Why Esquire is Set to Succeed Boldly Large national markets primed for Tremendous untapped { disruption: for the potential: Esquire’s current 3 litigation vertical and market share is on of in the payment processing vertical both national verticals ad We are
Slide 28: Non-GAAP Financial Measure Reconciliation
= B Ea] Esquire Appendix Non-GAAP Financial Measure Reconciliation (all dollars in thousands except per share data) 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
Slide 29: Contact Information
Succeeding Boldly Contact Information Eric S. Bader Executive Vice President & Chief Operating Officer 516-535-2002 eric.bader@esqbank.com ‘Succeed Boldly Nasdaq Listed as ESQ
Esquire Financial Holdings — Q3 2021 Earnings Presentation on 6ix