Strong Commercial Loan & Deposit Growth Drives Resilient Net Interest Margin & Record Earnings

JERICHO, N.Y., Oct. 23, 2025 /PRNewswire/ -- Esquire Financial Holdings, Inc. $(ESQ)$ (the "Company"), the financial holding company for Esquire Bank, National Association ("Esquire Bank" or the "Bank"), (collectively "Esquire") today announced its operating results for the third quarter of 2025. Significant achievements and key performance metrics during the current quarter and year-to-date of 2025 include:

   -- Net income increased $2.7 million or 23.7% to $14.1 million, or $1.62 per 
      diluted share, in the current quarter as compared to $11.4 million, or 
      $1.34 per diluted share, for the comparable quarter in 2024. On a linked 
      quarter basis, net income increased $2.2 million or 18.2% when compared 
      to $11.9 million, or $1.38 per diluted share. For the current quarter, 
      adjusted(1) net income and diluted earnings per share were $12.8 million 
      and $1.47, respectively, excluding certain discrete tax benefits related 
      to share-based compensation, reducing income taxes by approximately $1.3 
      million and lowering the effective tax rate to 19.5%. 
 
   -- Consistent industry leading returns on average assets and equity of 2.61% 
      and 20.83%, respectively, notwithstanding our continued investment in 
      current resources (both people and technology) to support future growth 
      while also maintaining excess capital levels with an equity to asset 
      ratio of 12.8%. For the current quarter, adjusted(1) returns on average 
      assets and equity of 2.37% and 18.89%, respectively, excluding certain 
      discrete tax benefits noted above. 
 
   -- Resilient net interest margin of 6.04% in the current quarter supported 
      by our national litigation platform growth, despite both elevated levels 
      of average interest earning cash balances totaling $189.4 million 
      (generated from average core deposits growth totaling $103.1 million, or 
      23.4% annualized, on a linked quarter basis), and declines in short-term 
      market interest rates from their highs in the latter part of 2023. Total 
      year-to-date revenue increased $15.4 million, or 16.8%, to $107.2 million 
      when comparing 2025 to 2024. 
 
   -- Continued strong core deposit growth totaling $97.1 million, or 22% 
      annualized, on a linked quarter basis to $1.87 billion, comprised of 
      low-cost commercial relationship deposits with a cost-of-funds of 1.03% 
      (including demand deposits). Deposits grew $343.0 million, or 22%, when 
      comparing the current quarter to the comparable quarter in 2024. 
      Off-balance sheet sweep funds totaled $412 million, with approximately 
      95% available for additional on-balance sheet liquidity, while the 
      associated administrative service payments ("ASP") fee income totaled 
      $731 thousand for the current quarter. Additional available liquidity, 
      excluding the aforementioned sweeps, totaled approximately $1.1 billion. 
 
   -- Loan growth on a linked quarter basis was $52.4 million, or 14% 
      annualized, totaling $1.55 billion, despite elevated loan 
      payoffs/paydowns of $54.8 million in the quarter while growth year over 
      year was $249.5 million, or 19.2%. Average loan growth on a linked 
      quarter basis was $70.1 million, or 19% annualized. Loan growth was 
      fueled by increases in higher yielding variable rate commercial loans 
      from our national litigation platform totaling $74.6 million, or 33% 
      annualized, on a linked quarter basis. These commercial lending 
      relationships have and will continue to create additional opportunities 
      for future loan draws and core deposit growth (noninterest bearing 
      operating or demand deposits and escrow or IOLTA accounts nationally) 
      through our full service commercial relationship banking and tech-enabled 
      commercial cash management platform. 
 
   -- Solid credit metrics, asset quality, and reserve coverage ratios with an 
      allowance for credit losses to loans ratio of 1.37%, nonperforming loans 
      totaling $8.6 million, and nonperforming loans to total assets ratio of 
      0.40%. 
 
   -- Stable and consistent noninterest income in the current quarter totaling 
      $6.2 million, or 17% of total revenue, led by our payment processing 
      platform with 93,000 small business clients nationally. Our tech-enabled 
      payments platform allowed us to perform commercial treasury clearing 
      services for $10.1 billion in credit and debit card payment volume, a 
      9.5% increase from the comparable quarter in 2024, across 151.8 million 
      transactions for our small business clients. 
 
   -- Strong efficiency ratio of 48.9% for the current quarter, notwithstanding 
      our investments to support future growth, risk management and excellence 
      in client service as well as the opening of our flagship full service 
      banking facility in Los Angeles, California (Watt Plaza in Century City) 
      to support our current and future clients in Southern California. 
 
   -- Entered into a new headquarters lease spanning 50,000 square feet across 
      two floors with dedicated indoor space and 16,000 square feet of outdoor 
      space for employees, clients, and Esquire events in Jericho, NY. The new 
      headquarters will support continued future growth and investment in 
      resources as we execute on our long-term vision. 
 
   -- Strong capital foundation with common equity tier 1 ("CET1") and tangible 
      common equity to tangible asset(2) ("TCE/TA") ratios of 15.27% and 12.78%, 
      respectively. The Bank remains well above the bank regulatory "Well 
      Capitalized" standards. 

"With another year of industry leading performance and growth, our investment in a new headquarters will position us to attract top talent while providing our teams with a state-of-the-art facility to serve the complex and fragmented national and local verticals we operate, support future expansion, and allow us to continue to deliver exceptional client service," stated Tony Coelho, Chairman of the Board.

"By deeply understanding and serving our key national verticals and local markets and continuously investing in our future, we've established a strong culture and foundation for sustainable growth and continued industry leadership, as reflected in our top tier performance metrics, resilient net interest margin, and strong core deposit and commercial loan growth on a national basis," stated Andrew C. Sagliocca, Vice Chairman, Chief Executive Officer, and President.

 
(1)  See non-GAAP reconciliation provided at the end of this news release. 
(2)  The Bank has no recorded intangible assets on the Statement of Financial 
     Condition, and accordingly, GAAP common equity and GAAP assets are equal 
     to tangible common equity and tangible assets. 
 

Third Quarter 2025 vs. 2024

Net income for the quarter ended September 30, 2025 was $14.1 million, or $1.62 per diluted share, compared to $11.4 million, or $1.34 per diluted share for the same period in 2024. Returns on average assets and equity for the current quarter were 2.61% and 20.83%, respectively, compared to 2.62% and 20.29% for the same period of 2024. Excluding a $1.3 million tax benefit related to share-based compensation, adjusted(1) net income, diluted earnings per share, return on average assets, and return on average common equity for the current quarter ended September 30, 2025 were $12.7 million, $1.47, 2.37% and 18.89%, respectively.

Net interest income increased $5.5 million, or 21.2%, to $31.3 million, due to growth in average interest earning assets totaling $389.0 million, or 23.3%, to $2.06 billion, funded with low-cost core deposits from our regional business development teams and relationship banking efforts. Our net interest margin of 6.04% decreased 12 basis points from 2024 as increases in higher yielding loans and securities were muted by elevated interest earning cash balances of $69.1 million, negatively impacting our net interest margin by approximately 12 basis points. Average loan yields increased 11 basis points to 7.98% while average loans increased $262.0 million, or 20.6%, to $1.53 billion, primarily due to commercial loan growth of $238.0 million, or 29.9%, focused in our higher yielding law firm commercial loans that grew $250.5 million, or 35.7%. Loan interest income increased $5.7 million, or 22.8%, to $30.8 million with $5.3 million related to growth in average loan volumes (substantially all commercial) and $386 thousand due to an increase in average loan rates (substantially all commercial). Average securities increased $57.9 million, or 20.7%, to $337.7 million with a securities to asset ratio of 15% at September 30, 2025. The yield on average securities increased 41 basis points to 3.81%, and securities income increased $855 thousand with $538 thousand attributable to average volume increases and $316 thousand attributable to increases in average rate. Average deposits increased $364.2 million, or 24.5%, to $1.85 billion, led by increases in litigation related escrow or IOLTA, commercial money market, and noninterest bearing commercial demand deposits totaling $215.4 million, $121.3 million, and $36.2 million, respectively. Our cost of deposits, including noninterest bearing demand deposits, increased 15 basis points to 1.03% due to changes in deposit composition coupled with increases in short-term money market rates. Our loan-to-deposit ratio was 82% at September 30, 2025.

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October 23, 2025 08:30 ET (12:30 GMT)