Esquire Financial Holdings, Inc. · NASDAQ:ESQ
Esquire Financial — Q1 2025 Earnings Presentation
27 slides from Esquire Financial's earnings presentation, Apr 1, 2025
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 2025 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: Nationwide Branchless Tech Enabled Litigation & Payment Processing Verticals
How Our Clients Succeed Boldly Nationwide Branchless Tech Enabled Litigation & Payment Processing Verticals Generating Industry Leading Growth, Returns, & Performance Metrics Litigation Vertical Payment Processing Vertical Commercial Banking Nationally (Merchant Services) Decades of expertise in t
Slide 4: Strong Growth Driven by Unique National Verticals
How Esquire Succeeds Boldly Strong Growth Driven by Unique National Verticals at March 31, 2025 Key Highlights Strong growth in higher yielding variable rate commercial loans nationally Stable low-cost branchless and tech enabled deposit model Equity to Assets of 12.83% (Adjusted(1) 12.59%)
Slide 5: Industry Leading Net Interest Margin
How Esquire Succeeds Boldly Industry Leading Net Interest Margin Stable low-cost branchless funding model with a strong commercial deposit franchise nationally DDA and escrow-based NOW/IOLTA accounts represent 31% and 57% of total deposits at March 31, 2025, respectively Higher yielding variab
Slide 6: Strong Revenue Growth
How Esquire Succeeds Boldly Strong Revenue Growth ($ in thousands) at March 31, 2025 Key Highlights Strong net interest margin Stable payment processing fee income Growing ASP fee income derived from off-balance sheet funds management 6
Slide 7: Financial Highlights
How Esquire Succeeds Boldly Financial Highlights at March 31, 2025 Key Highlights Industry leading returns Named to Fortune’s Annual 100 Fastest-Growing Companies List in 2024 Named to the KBW 2024 Bank Honor Roll Named to the Piper Sandler 2023 Bank & Thrift Small Market-All Stars Raymond
Slide 8: Loan Portfolio Diversification with Focused Growth
How Esquire Succeeds Boldly Loan Portfolio Diversification with Focused Growth at March 31, 2025 Focused growth in higher yielding variable rate commercial loans with strong credit metrics on a national basis Selective multifamily loan growth with strong historical performance, DSCRs, and LTVs i
Slide 9: Loan Portfolio Diversification with Focused Growth
How Esquire Succeeds Boldly Loan Portfolio Diversification with Focused Growth Substantially all of our $934 million in commercial loans are variable rate and tied to prime comprising approximately 66% of our loan portfolio Approximately 90% of our variable rate commercial loan portfolio was ori
Slide 10: Commercial Litigation (Law Firm) Loans
How Esquire Succeeds Boldly Commercial Litigation (Law Firm) Loans Full annual underwriting including, but not limited to: 3 years financials and tax returns (business and personal) Full contingent case inventory valuation process & collateral assignment or UCC-1 Personal guarantees for the
Slide 11: New York Metro Area Real Estate
Esquire’s Bold Opportunities New York Metro Area Real Estate A Reliable Asset Class & Liquidity Source Selective in our property and borrower selection process Strong generational owners/operators with high quality net worth Minimal historical losses No office nor construction loan exposure
Slide 12: Multifamily & CRE Maturities
How Esquire Succeeds Boldly Multifamily & CRE Maturities at March 31, 2025 Multifamily loans totaling $115.7 million mature over the next two years with $26.3 million, or 23%, having an LTV in excess of 70% Other CRE loans totaling $11.7 million mature over the next two years with no loans in ex
Slide 13: Solid Credit Metrics, Asset Quality and ACL Coverage
How Esquire Succeeds Boldly Solid Credit Metrics, Asset Quality and ACL Coverage at March 31, 2025 13 Note – All asset quality metrics are based on our loans held for investment portfolio (1) NFL consumer loan portfolio - $9.0 million charge-off.
Slide 14: Deposit Composition and Growth
How Esquire Succeeds Boldly Deposit Composition and Growth ($ in millions) at March 31, 2025 Our tech enabled deposit platform utilizes our corporate cash management suite of services, creating a highly efficient branchless platform Our overall liquidity position (cash, borrowing capacity, and a
Slide 15: Deposit Composition Details
How Esquire Succeeds Boldly Deposit Composition Details DDA and NOW (escrow funds) deposits total 88% of total deposits, representing stable funding sources in various interest rate scenarios Litigation and payment processing deposits represent 74% and 10% of total deposits at March 31, 2025, re
Slide 16: Strong Growth in Stable Noninterest Income
How Esquire Succeeds Boldly Strong Growth in Stable Noninterest Income at March 31, 2025 Currently servicing 90,000 merchants across 50 states in our payment processing (merchant acquiring) vertical Fee income, primarily payment processing fees, represents 18% of total revenue for the quarter en
Slide 17: Protecting Our Company with Strong Payment Processing Reserves
How Esquire Succeeds Boldly Protecting Our Company with Strong Payment Processing Reserves at March 31, 2025 Key Highlights Strong and stable DDA reserves Protecting capital from merchant chargebacks and returns 17
Slide 18: 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: $443 billion & Esquire’s current market share is a 100,000+ firms in the litigation fraction of both national verticals that vertical and $11.4 trillion and are compl
Slide 19: 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 20: 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 21: Appendix & Supplemental Disclosure
Appendix & Supplemental Disclosure National Markets – Litigation & Payment Processing Verticals & Non-GAAP Reconciliation
Slide 22: U.S. Litigation Market A Significant Growth Opportunity
Esquire’s Bold Opportunities U.S. Litigation Market Key Highlights A Significant Growth Opportunity $443 billion* Total Addressable Market U.S. Tort actions are estimated to consume 2.1% of U.S. GDP* annually or $443 billion* (“TAM”) in litigation vertical Esquire does not compete with non-ban
Slide 23: 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 24: 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 25: Payment Volume Trends – A Significant Growth Opportunity
Esquire’s Bold Opportunities Payment Volume Trends – A Significant Growth Opportunity at December 31, 2024 ($ in billions) The payments industry CAGR was 11% from 2020 to 2024 to an estimated total payment volume of $11.6 trillion Sources: Company Financial Records, Note: PayPalfigures represent Pay
Slide 26: Non-GAAP Financial Measure Reconciliation
Appendix Non-GAAP Financial Measure Reconciliation (all dollars in thousands) The following table presents the adjusted tangible common equity to tangible assets calculation (non-GAAP): March 31, 2025 Total assets - GAAP $ 1,954,437 Less: intangible assets — Tangible assets ("TA") - non-GAAP 1,954,4
Slide 27: Non-GAAP Financial Measure Reconciliation (Cont'd)
Appendix Non-GAAP Financial Measure Reconciliation (Cont’d) (all dollars in thousands) The following table presents the common equity tier 1 capital ratio and the adjusted common equity tier 1 capital ratio: March 31, 2025 Common equity tier 1 ("CET1") capital - Bank $ 230,860 Add: unrealized losses
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