ESQUIRE FINANCIAL HOLDINGS, INC. REPORTS SECOND QUARTER 2024 RESULTS
National Litigation Platform Continues to Drive Strong Growth and Industry Leading Returns
"In 2024, our focus on creating long-term stakeholder value continued as growth in low-cost core deposits from our national litigation platform was invested in higher yielding variable rate commercial loans and short-term agency mortgage-backed securities at the current peak in interest rates. As part of our ALCO process, management proactively increased the investment portfolio to approximately 15% of total assets (as compared to 12.5% at year-end), while simultaneously moderating multifamily and commercial real estate growth in 2024 due to the current economic and interest rate environment," stated
Significant achievements and key performance metrics during the current quarter and year to date of 2024 include:
- On a linked quarter basis, net income increased
$429 thousand or 4.3% to$10.5 million , or$1.25 per diluted share, as compared to$10.1 million , or$1.20 per diluted share. Net income increased$1.4 million or 15.1% from$9.1 million in the second quarter 2023, or$1.10 per diluted share. - Consistent industry leading returns on average assets and equity of 2.58% and 20.16% for the current quarter, respectively, as compared to 2.59% and 20.14% on a linked quarter basis despite our continued investment in current resources for future growth. These returns were fueled by the continued expansion of our total revenue base to
$30.6 million in the current quarter, led by a strong net interest margin of 6.19% (fueled by low-cost core deposit growth) as well as stable fee-based income. - Total loan growth on a linked quarter basis was
$32.8 million , or 11% annualized, totaling$1.26 billion and was driven by a$32.3 million or a 17% annualized increase in higher yielding variable rate commercial loans nationally. These commercial loans, primarily to law firms, have and will continue to create additional opportunities for continued core deposit growth (noninterest bearing operating or DDA and escrow or IOLTA accounts) through our full commercial relationship banking programs and our branchless commercial cash management platform. - Interest earning asset growth, excluding cash and cash equivalents, was
$65.4 million , or 18% annualized, on a linked quarter basis and totaled$1.51 billion . In 2024, management elected to temper multifamily and commercial real estate loan growth in response to the current economic environment and instead purchase agency mortgage-backed securities with commensurate risk adjusted yields, improving our liquidity ratios as well as increasing the securities to total assets ratio to approximately 15%. - Solid credit metrics, asset quality, and reserve coverage ratios with a 1.47% allowance for credit losses to loans ratio and nonperforming loan to total assets ratio of 0.64%, represented by one multifamily loan totaling
$10.9 million . We have no exposure to commercial office space, no construction loans, and only$15.0 million in performing loans to the hospitality industry. - Continued deposit growth totaling
$52.8 million , or 15% annualized, on a linked quarter basis to$1.49 billion , comprised of core low-cost commercial relationship deposits with a cost-of-funds of 0.87% (including demand deposits). Off-balance sheet sweep funds totaled$408.0 million at quarter end, with approximately 67% available for additional on-balance sheet liquidity, while the associated administrative service payments ("ASP") fee income totaled$620 thousand for the current quarter. Additional available liquidity totaled approximately$653 million (secured FHLB and FRB borrowing capacity plus available on-balance sheet sweep liquidity), excluding cash and unsecured borrowing capacity. - Stable and consistent fee income totaling
$6.3 million or 21% of total revenue, led by our payment processing platform with 83,000 small business clients nationally. Our technology enabled payments platform facilitated the processing of$9.3 billion in credit and debit card payment volume across 155.6 million transactions for our clients in the current quarter. - Strong efficiency ratio of 49.8% notwithstanding our investments in resources to support future growth and excellence in client service.
- Launched our redesigned website (integrated with our marketing cloud, CRM platform, and Lawyer IQ platform) including the integration of AI driven sales content to improve current user engagement and prospective client acquisition.
- Strong capital foundation with common equity tier 1 ("CET1") and tangible common equity to tangible asset(1) ("TCE/TA") ratios of 14.89% and 12.67%, respectively. Including the after-tax unrealized losses on both the available-for-sale and held-to-maturity securities portfolios of
$14.2 million and$6.0 million , respectively, the adjusted(1) CET1 and adjusted(1) TCE/TA ratios were 13.41% and 12.32%, respectively.Esquire Bank remains well above the bank regulatory "Well Capitalized" standards.
"Our industry leading performance, strong balance sheet management, and proven growth trends will continue to create value for all stakeholders beyond our financial sector peers," stated
"Our current balance sheet management strategy to increase short duration agency mortgage-backed securities rather than originate multifamily and commercial real estate loans only impacts the composition of our interest earning assets and does not change our views for growth and earnings in 2024," stated
(1) See non-GAAP reconciliation provided at the end of this news release.
Net income for the quarter ended
Net interest income for the second quarter of 2024 increased
The provision for credit losses was
Noninterest income totaled
Noninterest expense increased
The Company's efficiency ratio was 49.8% for the three months ended
The effective tax rate was 27.0% for the second quarter of 2024, consistent with the second quarter of 2023.
Net income for the six months ended
Net interest income for the six months ended
The provision for credit losses was
Noninterest income totaled
Noninterest expense increased
(1) See non-GAAP reconciliation provided at the end of this news release.
The Company's efficiency ratio was 49.8% for the six months ended
The effective tax rate was 26.8% for the six months ended
At
Due to increases in short-term interest rates associated with the current inflationary environment since 2022, management enhanced its ongoing credit risk management including risk management of its commercial real estate loan portfolio. The following is a brief summary of our ongoing risk management for our multifamily and CRE portfolios as of
- The multifamily portfolio, excluding one nonperforming loan, totaling
$341.2 million , has a current weighted average DSCR and an original LTV (defined as unpaid principal balance as ofJune 30, 2024 divided by appraised value at origination) of approximately 1.66 and 54%, respectively, and the CRE portfolio, totaling$88.4 million , has a current weighted average DSCR and an original LTV of approximately 1.53 and 59%, respectively. - Multifamily loans maturing in less than one year totaled
$47.0 million and had a current weighted average DSCR and an original LTV of approximately 1.42 and 55%, respectively. CRE loans maturing in less than one year totaled$2.2 million and had a current weighted average DSCR and an original LTV of approximately 3.54 and 47%, respectively. - Multifamily loans maturing in one to two years totaled
$50.3 million and had a current weighted average DSCR and an original LTV of approximately 1.38 and 66%, respectively. CRE loans maturing in one to two years totaled$2.2 million and had a current weighted average DSCR and an original LTV of approximately 1.49 and 61%, respectively.
(1) See non-GAAP reconciliation provided at the end of this news release.
At
The following table provides information regarding the composition of our loan portfolio for the periods presented:
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
2024 |
|
|
2023 |
|
|
2023 |
|
|||||||||
|
|
(Dollars in thousands) |
|
|||||||||||||||
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multifamily |
|
$ |
352,097 |
|
27.9 |
% |
|
$ |
348,241 |
|
28.8 |
% |
|
$ |
298,718 |
|
28.3 |
% |
Commercial real estate |
|
|
88,376 |
|
7.0 |
|
|
|
89,498 |
|
7.4 |
|
|
|
91,057 |
|
8.6 |
|
1 – 4 family |
|
|
15,336 |
|
1.2 |
|
|
|
17,937 |
|
1.5 |
|
|
|
21,606 |
|
2.0 |
|
Total real estate |
|
|
455,809 |
|
36.1 |
|
|
|
455,676 |
|
37.7 |
|
|
|
411,381 |
|
38.9 |
|
Commercial: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Litigation related |
|
|
668,676 |
|
53.0 |
|
|
|
612,457 |
|
50.7 |
|
|
|
526,076 |
|
49.8 |
|
Other |
|
|
117,917 |
|
9.4 |
|
|
|
125,457 |
|
10.4 |
|
|
|
108,814 |
|
10.3 |
|
Total commercial |
|
|
786,593 |
|
62.4 |
|
|
|
737,914 |
|
61.1 |
|
|
|
634,890 |
|
60.1 |
|
Consumer |
|
|
19,010 |
|
1.5 |
|
|
|
14,491 |
|
1.2 |
|
|
|
10,500 |
|
1.0 |
|
Total loans held for investment |
|
$ |
1,261,412 |
|
100.0 |
% |
|
$ |
1,208,081 |
|
100.0 |
% |
|
$ |
1,056,771 |
|
100.0 |
% |
Deferred loan fees and unearned |
|
|
(350) |
|
|
|
|
|
(668) |
|
|
|
|
|
(989) |
|
|
|
Loans, held for investment |
|
$ |
1,261,062 |
|
|
|
|
$ |
1,207,413 |
|
|
|
|
$ |
1,055,782 |
|
|
|
Total deposits were
Due to the nature of our larger mass tort and class action settlements related to the litigation vertical, we participate in
At
Stockholders' equity increased
This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 relating to future results of the Company. Forward-looking statements are subject to many risks and uncertainties, including, but not limited to: changes in business plans as circumstances warrant; changes in general economic, business and political conditions, including changes in the financial markets; and other risks detailed in the "Cautionary Note Regarding Forward-Looking Statements," "Risk Factors" and other sections of the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the
|
||||||||||
Consolidated Statement of Condition (unaudited) |
||||||||||
(dollars in thousands except per share data) |
||||||||||
|
||||||||||
|
|
|
|
|
|
|
|
|||
|
|
2024 |
|
2023 |
|
2023 |
|
|||
ASSETS |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
152,733 |
|
$ |
165,209 |
|
$ |
106,199 |
|
Securities purchased under agreements to resell, at cost |
|
|
— |
|
|
— |
|
|
49,505 |
|
Securities available-for-sale, at fair value |
|
|
176,814 |
|
|
122,107 |
|
|
103,681 |
|
Securities held-to-maturity, at cost |
|
|
73,062 |
|
|
77,001 |
|
|
80,883 |
|
Securities, restricted at cost |
|
|
3,034 |
|
|
2,928 |
|
|
2,928 |
|
Loans, held for investment |
|
|
1,261,062 |
|
|
1,207,413 |
|
|
1,055,782 |
|
Less: allowance for credit losses |
|
|
(18,521) |
|
|
(16,631) |
|
|
(14,179) |
|
Loans, net of allowance |
|
|
1,242,541 |
|
|
1,190,782 |
|
|
1,041,603 |
|
Premises and equipment, net |
|
|
2,809 |
|
|
2,602 |
|
|
2,501 |
|
Other assets |
|
|
64,721 |
|
|
56,247 |
|
|
63,254 |
|
Total Assets |
|
$ |
1,715,714 |
|
$ |
1,616,876 |
|
$ |
1,450,554 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
$ |
482,988 |
|
$ |
473,274 |
|
$ |
508,916 |
|
Savings, NOW and money market deposits |
|
|
991,953 |
|
|
926,264 |
|
|
729,586 |
|
Certificates of deposit |
|
|
11,952 |
|
|
7,761 |
|
|
20,482 |
|
Total deposits |
|
|
1,486,893 |
|
|
1,407,299 |
|
|
1,258,984 |
|
Other liabilities |
|
|
11,410 |
|
|
11,022 |
|
|
12,664 |
|
Total liabilities |
|
|
1,498,303 |
|
|
1,418,321 |
|
|
1,271,648 |
|
Total stockholders' equity |
|
|
217,411 |
|
|
198,555 |
|
|
178,906 |
|
Total Liabilities and Stockholders' Equity |
|
$ |
1,715,714 |
|
$ |
1,616,876 |
|
$ |
1,450,554 |
|
|
|
|
|
|
|
|
|
|
|
|
Selected Financial Data |
|
|
|
|
|
|
|
|
|
|
Common shares outstanding |
|
|
8,292,948 |
|
|
8,287,848 |
|
|
8,192,379 |
|
Book value per share |
|
$ |
26.22 |
|
$ |
23.96 |
|
$ |
21.84 |
|
Equity to assets |
|
|
12.67 |
% |
|
12.28 |
% |
|
12.33 |
% |
|
|
|
|
|
|
|
|
|
|
|
Capital Ratios (1) |
|
|
|
|
|
|
|
|
|
|
Tier 1 leverage ratio |
|
|
12.53 |
% |
|
12.07 |
% |
|
11.72 |
% |
Common equity tier 1 capital ratio |
|
|
14.89 |
|
|
14.13 |
|
|
14.27 |
|
Tier 1 capital ratio |
|
|
14.89 |
|
|
14.13 |
|
|
14.27 |
|
Total capital ratio |
|
|
16.14 |
|
|
15.38 |
|
|
15.52 |
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality |
|
|
|
|
|
|
|
|
|
|
Nonperforming loans |
|
$ |
10,940 |
|
$ |
10,940 |
|
$ |
4 |
|
Allowance for credit losses to total loans |
|
|
1.47 |
% |
|
1.38 |
% |
|
1.34 |
% |
Nonperforming loans to total loans |
|
|
0.87 |
|
|
0.91 |
|
|
0.00 |
|
Nonperforming assets to total assets |
|
|
0.64 |
|
|
0.68 |
|
|
0.00 |
|
Allowance to nonperforming loans |
|
|
169 |
|
|
152 |
|
|
NM |
|
________________________________________ |
|
(1) |
Regulatory capital ratios presented on bank-only basis. The Bank has no recorded intangible assets on the Statement of Financial Condition, and accordingly, tangible common equity is equal to common equity. |
|
|
NM – Not meaningful |
|
||||||||||||||||
Consolidated Income Statement (unaudited) |
||||||||||||||||
(dollars in thousands except per share data) |
||||||||||||||||
|
||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
2024 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|||||
Interest income |
|
$ |
27,385 |
|
$ |
26,073 |
|
$ |
22,055 |
|
$ |
53,458 |
|
$ |
42,420 |
|
Interest expense |
|
|
3,063 |
|
|
3,210 |
|
|
1,966 |
|
|
6,273 |
|
|
3,042 |
|
Net interest income |
|
|
24,322 |
|
|
22,863 |
|
|
20,089 |
|
|
47,185 |
|
|
39,378 |
|
Provision for credit losses |
|
|
1,000 |
|
|
1,000 |
|
|
1,325 |
|
|
2,000 |
|
|
1,825 |
|
Net interest income after provision for credit losses |
|
|
23,322 |
|
|
21,863 |
|
|
18,764 |
|
|
45,185 |
|
|
37,553 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment processing fees |
|
|
5,322 |
|
|
5,296 |
|
|
5,764 |
|
|
10,618 |
|
|
11,277 |
|
Gain on equity investments |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
4,027 |
|
Other noninterest income |
|
|
953 |
|
|
1,093 |
|
|
931 |
|
|
2,046 |
|
|
1,653 |
|
Total noninterest income |
|
|
6,275 |
|
|
6,389 |
|
|
6,695 |
|
|
12,664 |
|
|
16,957 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
|
9,525 |
|
|
9,161 |
|
|
7,803 |
|
|
18,686 |
|
|
15,287 |
|
Other expenses |
|
|
5,707 |
|
|
5,407 |
|
|
5,173 |
|
|
11,114 |
|
|
10,170 |
|
Total noninterest expense |
|
|
15,232 |
|
|
14,568 |
|
|
12,976 |
|
|
29,800 |
|
|
25,457 |
|
Income before income taxes |
|
|
14,365 |
|
|
13,684 |
|
|
12,483 |
|
|
28,049 |
|
|
29,053 |
|
Income taxes |
|
|
3,878 |
|
|
3,626 |
|
|
3,370 |
|
|
7,504 |
|
|
7,761 |
|
Net income |
|
$ |
10,487 |
|
$ |
10,058 |
|
$ |
9,113 |
|
$ |
20,545 |
|
$ |
21,292 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.34 |
|
$ |
1.29 |
|
$ |
1.18 |
|
$ |
2.64 |
|
$ |
2.76 |
|
Diluted |
|
|
1.25 |
|
|
1.20 |
|
|
1.10 |
|
|
2.45 |
|
|
2.57 |
|
Basic - adjusted (1) |
|
|
1.34 |
|
|
1.29 |
|
|
1.18 |
|
|
2.64 |
|
|
2.38 |
|
Diluted - adjusted (1) |
|
|
1.25 |
|
|
1.20 |
|
|
1.10 |
|
|
2.45 |
|
|
2.21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Financial Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets |
|
|
2.58 |
% |
|
2.59 |
% |
|
2.65 |
% |
|
2.59 |
% |
|
3.15 |
% |
Return on average equity |
|
|
20.16 |
|
|
20.14 |
|
|
21.03 |
|
|
20.15 |
|
|
25.55 |
|
Adjusted return on average assets (1) |
|
|
2.58 |
|
|
2.59 |
|
|
2.65 |
|
|
2.59 |
|
|
2.72 |
|
Adjusted return on average equity (1) |
|
|
20.16 |
|
|
20.14 |
|
|
21.03 |
|
|
20.15 |
|
|
22.02 |
|
Net interest margin |
|
|
6.19 |
|
|
6.06 |
|
|
6.02 |
|
|
6.13 |
|
|
6.02 |
|
Efficiency ratio (1) |
|
|
49.8 |
|
|
49.8 |
|
|
48.4 |
|
|
49.8 |
|
|
45.2 |
|
Adjusted efficiency ratio (1) |
|
|
49.8 |
|
|
49.8 |
|
|
48.4 |
|
|
49.8 |
|
|
48.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends paid per common share |
|
$ |
0.150 |
|
$ |
0.150 |
|
$ |
0.125 |
|
$ |
0.300 |
|
$ |
0.225 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average basic shares |
|
|
7,798,441 |
|
|
7,786,887 |
|
|
7,708,350 |
|
|
7,792,664 |
|
|
7,708,546 |
|
Weighted average diluted shares |
|
|
8,402,750 |
|
|
8,401,752 |
|
|
8,299,704 |
|
|
8,402,119 |
|
|
8,301,149 |
|
________________________________________ |
|
(1) |
See non-GAAP reconciliation provided elsewhere herein. |
|
|||||||||||||||||||||||||
Consolidated Average Balance Sheets and Average Yield/Cost (unaudited) |
|||||||||||||||||||||||||
(dollars in thousands) |
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
|
|
Three Months Ended |
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
2024 |
|
2024 |
|
2023 |
|
||||||||||||||||||
|
|
Average |
|
|
|
|
Average |
|
Average |
|
|
|
|
Average |
|
Average |
|
|
|
|
Average |
|
|||
|
|
Balance |
|
Interest |
|
Yield/Cost |
|
Balance |
|
Interest |
|
Yield/Cost |
|
Balance |
|
Interest |
|
Yield/Cost |
|
||||||
INTEREST EARNING ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, held for investment |
|
$ |
1,240,599 |
|
$ |
24,216 |
|
7.85 |
% |
$ |
1,208,429 |
|
$ |
23,389 |
|
7.78 |
% |
$ |
993,353 |
|
$ |
19,137 |
|
7.73 |
% |
Securities, includes restricted stock |
|
|
253,328 |
|
|
2,023 |
|
3.21 |
% |
|
226,175 |
|
|
1,605 |
|
2.85 |
% |
|
208,211 |
|
|
1,189 |
|
2.29 |
% |
Securities purchased under agreements |
|
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
— |
|
|
49,963 |
|
|
715 |
|
5.74 |
% |
Interest earning cash and other |
|
|
87,025 |
|
|
1,146 |
|
5.30 |
% |
|
81,740 |
|
|
1,079 |
|
5.31 |
% |
|
85,991 |
|
|
1,014 |
|
4.73 |
% |
Total interest earning assets |
|
|
1,580,952 |
|
|
27,385 |
|
6.97 |
% |
|
1,516,344 |
|
|
26,073 |
|
6.92 |
% |
|
1,337,518 |
|
|
22,055 |
|
6.61 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST EARNING ASSETS |
|
|
50,688 |
|
|
|
|
|
|
|
48,602 |
|
|
|
|
|
|
|
44,004 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL AVERAGE ASSETS |
|
$ |
1,631,640 |
|
|
|
|
|
|
$ |
1,564,946 |
|
|
|
|
|
|
$ |
1,381,522 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST BEARING LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, Money Market deposits |
|
$ |
899,419 |
|
$ |
2,932 |
|
1.31 |
% |
$ |
860,159 |
|
$ |
3,098 |
|
1.45 |
% |
$ |
673,154 |
|
$ |
1,809 |
|
1.08 |
% |
Time deposits |
|
|
11,702 |
|
|
130 |
|
4.47 |
% |
|
11,041 |
|
|
111 |
|
4.04 |
% |
|
16,234 |
|
|
156 |
|
3.85 |
% |
Total interest bearing deposits |
|
|
911,121 |
|
|
3,062 |
|
1.35 |
% |
|
871,200 |
|
|
3,209 |
|
1.48 |
% |
|
689,388 |
|
|
1,965 |
|
1.14 |
% |
Borrowings |
|
|
44 |
|
|
1 |
|
9.14 |
% |
|
45 |
|
|
1 |
|
8.94 |
% |
|
46 |
|
|
1 |
|
8.72 |
% |
Total interest bearing liabilities |
|
|
911,165 |
|
|
3,063 |
|
1.35 |
% |
|
871,245 |
|
|
3,210 |
|
1.48 |
% |
|
689,434 |
|
|
1,966 |
|
1.14 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST BEARING LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
|
499,348 |
|
|
|
|
|
|
|
477,020 |
|
|
|
|
|
|
|
500,058 |
|
|
|
|
|
|
Other liabilities |
|
|
11,894 |
|
|
|
|
|
|
|
15,787 |
|
|
|
|
|
|
|
18,231 |
|
|
|
|
|
|
Total noninterest bearing liabilities |
|
|
511,242 |
|
|
|
|
|
|
|
492,807 |
|
|
|
|
|
|
|
518,289 |
|
|
|
|
|
|
Stockholders' equity |
|
|
209,233 |
|
|
|
|
|
|
|
200,894 |
|
|
|
|
|
|
|
173,799 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL AVG. LIABILITIES AND EQUITY |
|
$ |
1,631,640 |
|
|
|
|
|
|
$ |
1,564,946 |
|
|
|
|
|
|
$ |
1,381,522 |
|
|
|
|
|
|
Net interest income |
|
|
|
|
$ |
24,322 |
|
|
|
|
|
|
$ |
22,863 |
|
|
|
|
|
|
$ |
20,089 |
|
|
|
Net interest spread |
|
|
|
|
|
|
|
5.62 |
% |
|
|
|
|
|
|
5.44 |
% |
|
|
|
|
|
|
5.47 |
% |
Net interest margin |
|
|
|
|
|
|
|
6.19 |
% |
|
|
|
|
|
|
6.06 |
% |
|
|
|
|
|
|
6.02 |
% |
Deposits (including noninterest bearing |
|
$ |
1,410,469 |
|
$ |
3,062 |
|
0.87 |
% |
$ |
1,348,220 |
|
$ |
3,209 |
|
0.96 |
% |
$ |
1,189,446 |
|
$ |
1,965 |
|
0.66 |
% |
|
|||||||||||||||||
Consolidated Average Balance Sheets and Average Yield/Cost (unaudited) |
|||||||||||||||||
(dollars in thousands) |
|||||||||||||||||
|
|||||||||||||||||
|
|
Six Months Ended |
|
||||||||||||||
|
|
2024 |
|
2023 |
|
||||||||||||
|
|
Average |
|
|
|
|
Average |
|
Average |
|
|
|
|
Average |
|
||
|
|
Balance |
|
Interest |
|
Yield/Cost |
|
Balance |
|
Interest |
|
Yield/Cost |
|
||||
INTEREST EARNING ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, held for investment |
|
$ |
1,224,513 |
|
$ |
47,605 |
|
7.82 |
% |
$ |
972,753 |
|
$ |
36,752 |
|
7.62 |
% |
Securities, includes restricted stock |
|
|
239,752 |
|
|
3,628 |
|
3.04 |
% |
|
208,513 |
|
|
2,343 |
|
2.27 |
% |
Securities purchased under agreements to resell |
|
|
— |
|
|
— |
|
— |
|
|
49,686 |
|
|
1,368 |
|
5.55 |
% |
Interest earning cash and other |
|
|
84,382 |
|
|
2,225 |
|
5.30 |
% |
|
87,094 |
|
|
1,957 |
|
4.53 |
% |
Total interest earning assets |
|
|
1,548,647 |
|
|
53,458 |
|
6.94 |
% |
|
1,318,046 |
|
|
42,420 |
|
6.49 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST EARNING ASSETS |
|
|
49,646 |
|
|
|
|
|
|
|
44,094 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL AVERAGE ASSETS |
|
$ |
1,598,293 |
|
|
|
|
|
|
$ |
1,362,140 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST BEARING LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, Money Market deposits |
|
$ |
879,789 |
|
$ |
6,030 |
|
1.38 |
% |
$ |
660,737 |
|
$ |
2,821 |
|
0.86 |
% |
Time deposits |
|
|
11,372 |
|
|
241 |
|
4.26 |
% |
|
12,848 |
|
|
219 |
|
3.44 |
% |
Total interest bearing deposits |
|
|
891,161 |
|
|
6,271 |
|
1.42 |
% |
|
673,585 |
|
|
3,040 |
|
0.91 |
% |
Borrowings |
|
|
45 |
|
|
2 |
|
8.94 |
% |
|
46 |
|
|
2 |
|
8.77 |
% |
Total interest bearing liabilities |
|
|
891,206 |
|
|
6,273 |
|
1.42 |
% |
|
673,631 |
|
|
3,042 |
|
0.91 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST BEARING LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
|
488,184 |
|
|
|
|
|
|
|
502,399 |
|
|
|
|
|
|
Other liabilities |
|
|
13,840 |
|
|
|
|
|
|
|
18,065 |
|
|
|
|
|
|
Total noninterest bearing liabilities |
|
|
502,024 |
|
|
|
|
|
|
|
520,464 |
|
|
|
|
|
|
Stockholders' equity |
|
|
205,063 |
|
|
|
|
|
|
|
168,045 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL AVG. LIABILITIES AND EQUITY |
|
$ |
1,598,293 |
|
|
|
|
|
|
$ |
1,362,140 |
|
|
|
|
|
|
Net interest income |
|
|
|
|
$ |
47,185 |
|
|
|
|
|
|
$ |
39,378 |
|
|
|
Net interest spread |
|
|
|
|
|
|
|
5.52 |
% |
|
|
|
|
|
|
5.58 |
% |
Net interest margin |
|
|
|
|
|
|
|
6.13 |
% |
|
|
|
|
|
|
6.02 |
% |
Deposits (including noninterest bearing demand deposits) |
|
$ |
1,379,345 |
|
$ |
6,271 |
|
0.91 |
% |
$ |
1,175,984 |
|
$ |
3,040 |
|
0.52 |
% |
Consolidated Non-GAAP Financial Measure Reconciliation (unaudited)
(all dollars in thousands except per share data)
We believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our financial position, results and ratios. However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for this measure, this presentation may not be comparable to other similarly titled measures by other companies.
Adjusted net income, which is used to compute adjusted return on average assets, adjusted return on average equity and adjusted earnings per share, excludes the impact of the recognized gain, net of tax, on the Company's equity investments.
|
Three Months Ended |
|
Six Months Ended |
|
|||||||||||
|
|
|
|
|
|
|
|
|
|||||||
|
2024 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|||||
Net income – GAAP |
$ |
10,487 |
|
$ |
10,058 |
|
$ |
9,113 |
|
$ |
20,545 |
|
$ |
21,292 |
|
Less: gain on equity investments |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(4,027) |
|
Add: income tax impact |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,087 |
|
Adjusted net income |
$ |
10,487 |
|
$ |
10,058 |
|
$ |
9,113 |
|
$ |
20,545 |
|
$ |
18,352 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets – GAAP |
|
2.58 |
% |
|
2.59 |
% |
|
2.65 |
% |
|
2.59 |
% |
|
3.15 |
% |
Adjusted return on average assets |
|
2.58 |
% |
|
2.59 |
% |
|
2.65 |
% |
|
2.59 |
% |
|
2.72 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average equity – GAAP |
|
20.16 |
% |
|
20.14 |
% |
|
21.03 |
% |
|
20.15 |
% |
|
25.55 |
% |
Adjusted return on average equity |
|
20.16 |
% |
|
20.14 |
% |
|
21.03 |
% |
|
20.15 |
% |
|
22.02 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share – GAAP |
$ |
1.34 |
|
$ |
1.29 |
|
$ |
1.18 |
|
$ |
2.64 |
|
$ |
2.76 |
|
Adjusted basic earnings per share |
$ |
1.34 |
|
$ |
1.29 |
|
$ |
1.18 |
|
$ |
2.64 |
|
$ |
2.38 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share – GAAP |
$ |
1.25 |
|
$ |
1.20 |
|
$ |
1.10 |
|
$ |
2.45 |
|
$ |
2.57 |
|
Adjusted diluted earnings per share |
$ |
1.25 |
|
$ |
1.20 |
|
$ |
1.10 |
|
$ |
2.45 |
|
$ |
2.21 |
|
The following table presents a reconciliation of efficiency ratio (non-GAAP) and adjusted efficiency ratio (non-GAAP).
|
Three Months Ended |
|
Six Months Ended |
|
|||||||||||
|
|
|
|
|
|
|
|
|
|||||||
|
2024 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|||||
Efficiency ratio – non-GAAP(1) |
|
49.8 |
% |
|
49.8 |
% |
|
48.4 |
% |
|
49.8 |
% |
|
45.2 |
% |
Noninterest expense – GAAP |
$ |
15,232 |
|
$ |
14,568 |
|
$ |
12,976 |
|
$ |
29,800 |
|
$ |
25,457 |
|
Net interest income – GAAP |
|
24,322 |
|
|
22,863 |
|
|
20,089 |
|
|
47,185 |
|
|
39,378 |
|
Noninterest income – GAAP |
|
6,275 |
|
|
6,389 |
|
|
6,695 |
|
|
12,664 |
|
|
16,957 |
|
Less: gain on equity investments |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(4,027) |
|
Adjusted noninterest income – non-GAAP |
$ |
6,275 |
|
$ |
6,389 |
|
$ |
6,695 |
|
$ |
12,664 |
|
$ |
12,930 |
|
Adjusted efficiency ratio – non-GAAP(2) |
|
49.8 |
% |
|
49.8 |
% |
|
48.4 |
% |
|
49.8 |
% |
|
48.7 |
% |
|
|
(1) |
The reported efficiency ratio is a non-GAAP measure calculated by dividing GAAP noninterest expense by the sum of GAAP net interest income and GAAP noninterest income. |
(2) |
The adjusted efficiency ratio is a non-GAAP measure calculated by dividing GAAP noninterest expense by the sum of GAAP net interest income and adjusted noninterest income. |
The following table presents the adjusted tangible common equity to tangible assets calculation (non-GAAP):
|
|
|
|
|
2024 |
|
|
Total assets - GAAP |
$ |
1,715,714 |
|
Less: intangible assets |
|
— |
|
Tangible assets ("TA") - non-GAAP |
|
1,715,714 |
|
|
|
|
|
Total stockholders' equity - GAAP |
$ |
217,411 |
|
Less: intangible assets |
|
— |
|
Less: preferred stock |
|
— |
|
Tangible common equity ("TCE") - non-GAAP |
|
217,411 |
|
Add: unrecognized losses on securities held-to-maturity, net of tax |
|
(6,006) |
|
Adjusted TCE - non-GAAP |
$ |
211,405 |
|
|
|
|
|
Stockholders' equity to assets - GAAP |
|
12.67 |
% |
TCE to TA - non-GAAP |
|
12.67 |
% |
Adjusted TCE to TA - non-GAAP |
|
12.32 |
% |
The following table presents the common equity tier 1 capital ratio and the adjusted common equity tier 1 capital ratio:
|
|
|
|
|
2024 |
|
|
Common equity tier 1 ("CET1") capital - Bank |
$ |
203,293 |
|
Add: unrealized losses on securities available-for-sale, net of tax |
|
(14,241) |
|
Add: unrecognized losses on securities held-to-maturity, net of tax |
|
(6,006) |
|
Adjusted CET1 capital - Bank |
$ |
183,046 |
|
|
|
|
|
Total risk-weighted assets - Bank |
$ |
1,365,132 |
|
|
|
|
|
CET1 capital ratio(1) |
|
14.89 |
% |
Adjusted CET1 capital ratio(1) |
|
13.41 |
% |
|
|
(1) |
Regulatory capital ratios presented on bank-only basis. The Bank has no recorded intangible assets on the Statement of Financial Condition, and accordingly, tangible common equity is equal to common equity. |
View original content:https://www.prnewswire.com/news-releases/esquire-financial-holdings-inc-reports-second-quarter-2024-results-302206576.html
SOURCE