Esquire Financial Holdings, Inc. [ESQ] Filings

10-Q 1 esq-20240630x10q.htm 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-38131

Esquire Financial Holdings, Inc.

(Exact Name of Registrant as Specified in Its Charter)


Maryland		27-5107901
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

100 Jericho Quadrangle, Suite 100, Jericho, New York		11753
(Address of Principal Executive Offices)		(Zip Code)

(516) 535-2002

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value

ESQ

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such requirements for the past 90 days.

YES ⌧ NO ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

YES ⌧ NO ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ◻		Accelerated filer ◻
Non-accelerated filer ☒		Smaller reporting company ☒
		Emerging growth company ◻

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES ☐ NO ⌧

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of August 1, 2024, there were 8,314,227 outstanding shares of the issuer’s common stock.

Table of Contents

Esquire Financial Holdings, Inc.

Form 10-Q

Table of Contents

		Page
PART I. FINANCIAL INFORMATION		3

Item 1.	Financial Statements (unaudited)	3

	Consolidated Statements of Financial Condition	3

	Consolidated Statements of Income	4

	Consolidated Statements of Comprehensive Income	5

	Consolidated Statements of Changes in Stockholders’ Equity	6

	Consolidated Statements of Cash Flows	7

	Notes to Interim Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42

Item 4.	Controls and Procedures	42

PART II. OTHER INFORMATION		43

Item 1.	Legal Proceedings	43

Item 1A.	Risk Factors	43

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43

Item 3.	Defaults Upon Senior Securities	43

Item 4.	Mine Safety Disclosures	43

Item 5.	Other Information	43

Item 6.	Exhibits	44

	SIGNATURES	45

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1.Financial Statements

ESQUIRE FINANCIAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Dollars in thousands, except per share data)

(Unaudited)


	June 30,		December 31,
	2024		2023
Assets:
Cash and cash equivalents	$	152,733	$	165,209
Securities available-for-sale, at fair value		176,814		122,107
Securities held-to-maturity, at cost (fair value of $64,777 and $69,116, at June 30, 2024 and December 31, 2023, respectively)		73,062		77,001
Securities, restricted, at cost		3,034		2,928

Loans held for investment		1,261,062		1,207,413
Less: allowance for credit losses		(18,521)		(16,631)
Loans, net of allowance		1,242,541		1,190,782
Premises and equipment, net		2,809		2,602
Accrued interest receivable		9,170		9,130
Other assets		55,551		47,117
Total assets	$	1,715,714	$	1,616,876

Liabilities:
Deposits:
Demand	$	482,988	$	473,274
Savings, NOW and money market		991,953		926,264
Time		11,952		7,761
Total deposits		1,486,893		1,407,299

Accrued expenses and other liabilities		11,410		11,022
Total liabilities		1,498,303		1,418,321

Commitments and contingencies		—		—

Stockholders’ equity:
Preferred stock, par value $0.01; authorized 2,000,000 shares; none issued		—		—
Common stock, par value $0.01; authorized 15,000,000 shares; 8,372,344 and 8,361,185 shares issued, respectively; and 8,292,948 and 8,287,848 shares outstanding, respectively		84		84
Additional paid-in capital		101,815		99,713
Retained earnings		132,320		114,261
Accumulated other comprehensive loss		(14,241)		(13,235)
Treasury stock at cost (79,396 and 73,337 shares, respectively)		(2,567)		(2,268)
Total stockholders’ equity		217,411		198,555
Total liabilities and stockholders’ equity	$	1,715,714	$	1,616,876

See accompanying notes to interim consolidated financial statements.

Table of Contents

ESQUIRE FINANCIAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Interest income:
Loans held for investment	$	24,216	$	19,137	$	47,605	$	36,752
Securities, includes restricted stock		2,023		1,189		3,628		2,343
Securities purchased under agreements to resell		—		715		—		1,368
Interest earning cash and other		1,146		1,014		2,225		1,957
Total interest income		27,385		22,055		53,458		42,420

Interest expense:
Savings, NOW and money market deposits		2,932		1,809		6,030		2,821
Time deposits		130		156		241		219
Borrowings		1		1		2		2
Total interest expense		3,063		1,966		6,273		3,042

Net interest income		24,322		20,089		47,185		39,378
Provision for credit losses		1,000		1,325		2,000		1,825
Net interest income after provision for credit losses		23,322		18,764		45,185		37,553

Noninterest income:
Payment processing fees		5,322		5,764		10,618		11,277
Administrative service income		620		739		1,366		1,268
Gain on equity investment		—		—		—		4,027
Customer related fees, service charges and other		333		192		680		385
Total noninterest income		6,275		6,695		12,664		16,957

Noninterest expense:
Employee compensation and benefits		9,525		7,803		18,686		15,287
Occupancy and equipment		1,156		835		2,083		1,664
Professional and consulting services		857		1,615		1,808		3,158
FDIC and regulatory assessments		233		182		455		326
Advertising and marketing		881		320		1,753		749
Travel and business relations		180		246		458		394
Data processing		1,722		1,249		3,233		2,382
Other operating expenses		678		726		1,324		1,497
Total noninterest expense		15,232		12,976		29,800		25,457

Net income before income taxes		14,365		12,483		28,049		29,053
Income tax expense		3,878		3,370		7,504		7,761

Net income	$	10,487	$	9,113	$	20,545	$	21,292

Earnings per share
Basic	$	1.34	$	1.18	$	2.64	$	2.76
Diluted	$	1.25	$	1.10	$	2.45	$	2.57

See accompanying notes to interim consolidated financial statements.

Table of Contents

ESQUIRE FINANCIAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net income	$	10,487	$	9,113	$	20,545	$	21,292
Other comprehensive income (loss):
Unrealized gains (losses) arising during the period on securities available-for-sale		176		(980)		(1,388)		931
Tax effect		(48)		270		382		(256)
Total other comprehensive income (loss)		128		(710)		(1,006)		675
Total comprehensive income	$	10,615	$	8,403	$	19,539	$	21,967

See accompanying notes to interim consolidated financial statements.

Table of Contents

ESQUIRE FINANCIAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Dollars in thousands, except per share data)

(Unaudited)


												Accumulated
								Additional				other				Total
	Preferred	Common		Preferred		Common		paid-in		Retained		comprehensive		Treasury		stockholders'
	shares	shares		stock		stock		capital		earnings		loss		stock		equity
Balance at April 1, 2024	—	8,292,789	$	—	$	84	$	100,853	$	123,077	$	(14,369)	$	(2,567)	$	207,078
Net income	—	—		—		—		—		10,487		—		—		10,487
Other comprehensive income	—	—		—		—		—		—		128		—		128
Exercise of stock options, net of repurchases (257 shares)	—	159		—		—		—		—		—		—		—
Stock compensation expense	—	—		—		—		962		—		—		—		962
Cash dividends declared to common stockholders ($0.15 per share)	—	—		—		—		—		(1,244)		—		—		(1,244)
Balance at June 30, 2024	—	8,292,948	$	—	$	84	$	101,815	$	132,320	$	(14,241)	$	(2,567)	$	217,411

												Accumulated
								Additional				other				Total
	Preferred	Common		Preferred		Common		paid-in		Retained		comprehensive		Treasury		stockholders'
	shares	shares		stock		stock		capital		earnings		loss		stock		equity
Balance at April 1, 2023	—	8,190,758	$	—	$	82	$	97,224	$	88,504	$	(13,732)	$	(1,327)	$	170,751
Net income	—	—		—		—		—		9,113		—		—		9,113
Other comprehensive loss	—	—		—		—		—		—		(710)		—		(710)
Exercise of stock options, net of repurchases (2,070 shares)	—	2,121		—		—		6		—		—		—		6
Stock compensation expense	—	—		—		—		788		—		—		—		788
Cash dividends declared to common stockholders ($0.125 per share)	—	—		—		—		—		(1,024)		—		—		(1,024)
Purchase of common stock	—	(500)		—		—		—		—		—		(18)		(18)
Balance at June 30, 2023	—	8,192,379	$	—	$	82	$	98,018	$	96,593	$	(14,442)	$	(1,345)	$	178,906

												Accumulated
								Additional				other				Total
	Preferred	Common		Preferred		Common		paid-in		Retained		comprehensive		Treasury		stockholders'
	shares	shares		stock		stock		capital		earnings		loss		stock		equity
Balance at January 1, 2024	—	8,287,848	$	—	$	84	$	99,713	$	114,261	$	(13,235)	$	(2,268)	$	198,555
Net income	—	—		—		—		—		20,545		—		—		20,545
Other comprehensive loss	—	—		—		—		—		—		(1,006)		—		(1,006)
Exercise of stock options, net of repurchases (257 shares)	—	11,159		—		—		173		—		—		—		173
Stock compensation expense	—	—		—		—		1,929		—		—		—		1,929
Cash dividends declared to common stockholders ($0.30 per share)	—	—		—		—		—		(2,486)		—		—		(2,486)
Shares received related to tax withholding	—	(6,059)		—		—		—		—		—		(299)		(299)
Balance at June 30, 2024	—	8,292,948	$	—	$	84	$	101,815	$	132,320	$	(14,241)	$	(2,567)	$	217,411

												Accumulated
								Additional				other				Total
	Preferred	Common		Preferred		Common		paid-in		Retained		comprehensive		Treasury		stockholders'
	shares	shares		stock		stock		capital		earnings		loss		stock		equity
Balance at January 1, 2023	—	8,195,333	$	—	$	82	$	96,387	$	77,712	$	(15,117)	$	(906)	$	158,158
Cumulative change in accounting principle	—	—		—		—		—		(568)		—		—		(568)
Balance at January 1, 2023 (as adjusted for change in accounting principle)	—

Esquire Financial Holdings, Inc. [ESQ] Filings
10-Q	[2024-08-14]
10-Q	[2024-05-10]
10-K	[2024-03-29]
10-Q	[2023-11-09]
10-Q	[2023-08-11]
10-Q	[2023-05-12]
10-K	[2023-03-27]
10-Q	[2022-11-10]
10-Q	[2022-08-12]
10-Q	[2022-05-13]
10-K	[2022-03-11]
10-Q	[2021-11-10]
10-Q	[2021-08-06]
10-Q	[2021-05-14]
10-K	[2021-03-19]
10-Q	[2020-11-06]
10-Q	[2020-08-07]
10-Q	[2020-05-08]
10-K	[2020-03-12]
10-Q	[2019-11-08]
10-Q	[2019-08-08]
10-Q	[2019-05-09]
10-K	[2019-03-14]
10-Q	[2018-11-14]
10-Q	[2018-08-14]
10-Q	[2018-05-14]
10-K	[2018-03-29]
10-Q	[2017-11-14]
10-Q	[2017-08-14]
S-1	[2017-05-31]