Esquire Financial Holdings, Inc. (NASDAQ: ESQ), the financial holding company for Esquire Bank, National Association, today announced its operating results for the first quarter of 2021. Significant achievements during the current quarter when compared to the fourth quarter 2020 (“linked quarter”) include:

• Net income increased to $4.2 million, or $0.53 per diluted share, as compared to $3.9 million, or $0.51 per diluted share on a linked quarter basis. Net income and diluted earnings per share were $2.6 million and $0.33, respectively, for the first quarter of 2020.
• Industry-leading returns on average assets and common equity of 1.81% and 13.30%, respectively, as compared to 1.70% and 12.54% on a linked quarter basis while maintaining a strong net interest margin of 4.50%.
• Total assets increased $61.6 million, or 27% annualized, to $998.3 million on a linked quarter basis.
• Deposits increased $55.6 million, or 28% annualized, to $859.7 million on a linked quarter basis, primarily driven by commercial deposits, with a cost of funds of 0.10% (including demand deposits). Demand deposits, totaling $408.4 million, represent 48% of total deposits while off-balance sheet sweep funds totaled $515 million at quarter-end, demonstrating the continued strength of our branchless business model.
• Loans increased $30.4 million, or 18% annualized, to $702.9 million on a linked quarter basis and $112.5 million, or 19%, from the first quarter of 2020 primarily due to growth in our commercial and multifamily loan portfolios.
• Payment processing (merchant) fee income increased 17.5% to $5.4 million on a linked quarter basis as we continued to expand merchant relationships and processing volumes. Total non-interest income represented 35% of total revenue in the current quarter. Excluding independent sales organization (“ISO”) early termination fees totaling $500 thousand in the current quarter, payment processing fee income increased 6.5% on a linked quarter basis and represented 32% of total revenue.
• Continued solid asset quality metrics with nonperforming loans to total loans of 0.43% and a reserve for loan losses to total loans of 1.88% as we prudently increased our provision for loan losses, partially offset by the effects of our ISO early termination fees. Excluding SBA guaranteed PPP loans totaling $31.7 million, our reserve for loan losses to total loans was 1.96%.
• We recently signed an exclusive agreement with InComm Payments, a global leading payments technology company, to offer prepaid card services under the Serve® brand for Social Security Disability Insurance (“SSDI”) payments, offering the Serve® Card issued by American Express. InComm became the exclusive distributor of American Express’s prepaid reloadable cards when they acquired the Serve® technology platform in 2018.
• We recently launched our innovative digital technologies to support seamless communication in our national verticals, significantly enhancing our multimedia digital marketing capabilities, as well as streamlining our online functionality and associated application processes.
• Esquire Bank remains well above the bank regulatory “Well Capitalized” standards.

“We continue to innovate and evolve, recently coupling our unique business verticals with our exclusive InComm prepaid card offering in the SSDI claimant space,” stated Tony Coelho, Chairman of the Board. “This agreement represents a clear entry point for our Company to offer the litigation market financial solutions for the underserved consumers in SSDI settlements.”

“Leveraging our recently deployed digital assets, we now reach more potential clients over a single week than we previously reached over any given year,” stated Andrew C. Sagliocca, President and Chief Executive Officer. “Our thought leadership and digital innovation in both the litigation and payment processing verticals will continue to revolutionize our Company, transforming us into a leading financial and technology provider in both market verticals on a national basis.”

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