Esquire Financial Holdings, Inc. · NASDAQ:ESQ
Esquire Financial — Q1 2021 Earnings Presentation
28 slides from Esquire Financial's earnings presentation, 2021
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.) 1Q 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 bankigg ) 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
=] ESQUIRE A 3 ‘Succeed Boldly How Esquire Succeeds Boldly Financial Highlights at March 31, 2021 Key Highlights Return on average assets yes Industry leading returns from our unique national business models 2.0% Stable payment processing fee income — noninterest income totaled 35% of revenue at Mar
Slide 6: Financial Highlights, cont'd
ESQUIRE BANK =) — How Esquire Succeeds Boldly Financial Highlights, cont’d at March 31, 2021 . Return on average Diluted EPS* stockholders’ equity 35% cAGR 15% 12% 9% 6% 2% 0% 2015 2016 2017 2018 2019 2020 19 2021 2015 2016 2017 2018 2019 2020 1Q 202) “EPS — Diluted Earnings Per Share o
Slide 7: Strong Growth Driven by Unique National Verticals
=) How Esquire Succeeds Boldly Strong Growth Driven by Unique National Verticals at March 31, 2021 Loans, net of deferred fees ($ in thousands) $800,000 702,865 $672,421 5 $600,000 $468,101 $400,000 $348,978 $278,578 $221,720 $200,000 2015 2016 2017 2018 2019 2020 10.2021 Key Highlights Strong growt
Slide 8: Strong Revenue Growth
Ea] Esquire ab aah How Esquire Succeeds Boldly Strong Revenue Growth at March 31, 2021 ($ in thousands) $60,000 ;— $52,087 $45,922 Key Highlights $40,000 F- Strong net interest margin Stable payment processing fee income $25,372 $20,000 $1,994 $0 2015 2016 2017 2018 2019 2020 1Q 2021 WB Netinteresti
Slide 9: Industry Leading Net Interest Margin
=] ESQUIRE =) seca How Esquire Succeeds Boldly Industry Leading Net Interest Margin at March 31, 2021 » Stable low-cost deposit model » Strong commercial deposits franchise » DDAand escrow-based NOW accounts represent 48% and 37% of total deposits at March 31, 2021, respectively » Higher yielding va
Slide 10: Loan Portfolio Diversification with Focused Growth
A 3 ‘Succeed Boldly How Esquire Succeeds Boldly Loan Portfolio Diversification with Focused Growth at March 31, 2021 Focused growth in higher yielding commercial loans with strong credit metrics Selective multi-family loan growth with strong historical performance in the NY metro market Gross Loans
Slide 11: Loan Portfolio Diversification with Focused Growth
=) How Esquire Succeeds Boldly Loan Portfolio Diversification with Focused Growth Approximately 51% of the loan portfolio is variable rate of which 85% have interest rate floor protection at March 31, 2021 Asset sensitive — estimated sensitivity of projected annualized net interest income (“NII”) up
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 1.46x Average loan-to-value (“LTV”) of 55% Str
Slide 13: Solid Credit Metrics, Asset Quality and ALLL Coverage
ESQUIRE BANK =) — How Esquire Succeeds Boldly Solid Credit Metrics, Asset Quality and ALLL Coverage at March 31, 2021 ALLL*/Loans Net Charge-Offs/Average Loans 0.30% 2.0% 030% > 0.25% 15% 0.20% 016% 10% 015% 040% 010% 05% oos% 0.02% a a 10.00% | MN | 0.00% 10.00% , 205 20182017018 «= 20192020 10 202
Slide 14: Deposit Composition and Growth
=) How Esquire Succeeds Boldly Deposit Composition and Growth DDA and NOW (escrow funds) deposits total 85% of total deposits, representing stable funding sources in various interest rate scenarios Litigation and payment processing deposits represent 60% and 17% of total deposits at March 31, 2021,
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: A Significant Growth Opportunity
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 trillion 2018-2019: +10.3% CAGR 2019-2020: +2.9% CAGR
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
= B How Esquire Succeeds Boldly (£2) ESQUIRE ‘Succeed Boldly Strong Growth in Stable Noninterest Income at March 31, 2021 » Currently servicing 58,000+ merchants across 50 states >» Noninterest income, primarily payment processing fees, represents 35% of total revenue at March 31, 2021 $15,000 $12,0
Slide 23: Protecting Our Company with Strong Payment Processing Reserves
Ea] Esquire ab ae How Esquire Succeeds Boldly Protecting Our Company with Strong Payment Processing Reserves at March 31, 2021 ISO and Merchant DDA Reserves ($ in thousands) $150,000 ;—- $127,851 $120,000 + $117,435 a Key Highlights Strong and stable DDA $20,000 F- reserves $94,526 Protection from $
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 $ ces @ecslleans Esquire Insight — Case Working Capital and Term Loans Management Technology Qualified Settlement Loans Commer
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: in 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: Succeeding Boldly: 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 — Q1 2021 Earnings Presentation on 6ix