8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): October 25, 2022

Esquire Financial Holdings, Inc.

(Exact name of the registrant as specified in its charter)

-
Maryland	001-38131	27-5107901
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(IRS 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)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (See General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4c)

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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

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. ☒

Item 2.02Results of Operations and Financial Condition.

On October 25, 2022, Esquire Financial Holdings, Inc. (the “Company”), the holding company for Esquire Bank, National Association (“Esquire Bank”), issued a press release announcing its earnings for the quarter ended September 30, 2022. A copy of the press release is attached as Exhibit 99.1 hereto and incorporated herein by reference.

The information contained in this Item 2.02 and Exhibit 99.1 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any filings made by the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as expressly set forth by specific reference in such filing.

Item 7.01Regulation FD Disclosure.

Esquire Financial Holdings, Inc. (the “Company”) intends to distribute and make available to investors, and to post on its website, the written presentation attached hereto as Exhibit 99.2. The presentation is furnished in this Current Report on Form 8-K, pursuant to this Item 7.01, as Exhibit 99.2, and is incorporated herein by reference.

The information contained in this Item 7.01 and Exhibit 99.2 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any filings made by the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as expressly set forth by specific reference in such filing.

Item 9.01Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release dated October 25, 2022.
99.2	Written presentation to be distributed and made available to investors and posted on the Company’s website.
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

	ESQUIRE FINANCIAL HOLDINGS, INC.
Dated:  October 25, 2022	By:/s/ Andrew C. Sagliocca
	Andrew C. Sagliocca
	President and Chief Executive Officer

EX-99.1

Exhibit 99.1

ESQUIRE FINANCIAL HOLDINGS, INC.

REPORTS THIRD QUARTER 2022 RESULTS

Record Returns Driven by Commercial Loan Growth and Asset Sensitive Balance Sheet

Jericho, NY – October 25, 2022 – Esquire Financial Holdings, Inc. (NASDAQ: ESQ) (the “Company”), the financial holding company for Esquire Bank, National Association (“Esquire Bank”), today announced its operating results for the third quarter of 2022. Significant achievements during the quarter include:

● Net income increased 21% to $7.7 million, or $0.94 per diluted share, as compared to $6.4 million, or $0.78 per diluted share on a linked quarter basis. Net income and diluted earnings per share were $2.5 million and $0.32, respectively, for the third quarter of 2021.

● Industry leading returns on average assets and equity of 2.48% and 20.60%, respectively, as compared to 2.00% and 17.81% on a linked quarter basis. Returns on average assets and equity were 0.97% and 7.32%, respectively, for the third quarter of 2021.

● Strong net interest margin of 5.18% primarily driven by a 61 basis point increase in loan yields on a linked quarter basis (approximately 57% of our loan portfolio is variable rate tied to prime).

● Our loan portfolio increased $15.8 million on a linked quarter basis to $875.1 million despite elevated paydowns of $43.3 million. Our loan pipeline remains robust for the balance of 2022.

● Continued solid credit metrics, asset quality and reserve coverage ratios with nonperforming loans to total loans of 0.67% and a reserve for loan losses to total loans of 1.24%.

● Deposits increased $32.0 million on a linked quarter basis, or 11% annualized, to $1.2 billion with a cost-of-funds of 0.15% (including demand deposits), as a direct result of our highly efficient branchless and technology enabled deposit platforms. Demand deposits and escrow-based NOW accounts represented 38% and 40% of total deposits, respectively.

● Off-balance sheet sweep funds totaled $496.1 million at quarter end while the associated administrative service payments (“ASP”) fees increased $269 thousand, or 44%, to $886 thousand on a linked quarter basis.

● Strong payment processing fee income and continued increases in small business clients nationally totaling $5.5 million and 75,000, respectively. Our technology enabled payments platform facilitated the processing of $7.3 billion in credit and debit card payment volume across 142.1 million transactions for our clients. Fee income represents 29% of total revenue.

● On October 18, 2022, Keefe, Bruyette & Woods initiated analyst coverage for Esquire Financial Holdings, Inc.’s common stock.

● Esquire Bank remains well above the bank regulatory “Well Capitalized” standards.

“These outstanding results are a product of Esquire’s increased brand awareness in two unique national markets driven by investments in our digital marketing platform, people, and other tech focused initiatives,” stated Tony Coelho, Chairman of the Board of Directors.

“Our national commercial lending pipeline remains robust and will continue to drive core variable rate loan growth and associated commercial deposit opportunities,” stated Andrew C. Sagliocca, Chief Executive Officer and President. “Additionally, there are significant growth opportunities in our fee-based payment processing vertical as we continue to expand our investment in tech and services. Both national verticals have a large addressable market and benefit from Esquire’s ‘solutions based approach’ to our target clients’ growth needs rather than a product based approach utilized by most financial services companies.”

Third Quarter Earnings

Net income for the quarter ended September 30, 2022 was $7.7 million, or $0.94 per diluted share, compared to $2.5 million, or $0.32 per diluted share for the same period in 2021. Returns on average assets and equity for the current quarter were 2.48% and 20.60%, respectively, compared to 0.97% and 7.32% for the same period of 2021. The third quarter of 2021 was impacted by a $2.5 million charge, net of tax, related to the reclassification of the legacy NFL consumer post settlement loan portfolio. Excluding this charge, net income, diluted earnings per share, return on average assets, and return on average common equity for the third quarter of 2021 was $5.0 million, $0.63, 1.93% and 14.49%, respectively.

Net interest income for the third quarter of 2022 increased $4.3 million, or 37.8%, to $15.5 million, due to growth in average interest earning assets totaling $197.7 million, or 19.9%, to $1.2 billion and increases in the average yields on interest earning assets when compared to the same period in 2021. Our net interest margin increased to 5.18% in the current quarter as the margin was positively impacted by growth in higher yielding variable rate commercial loans and the impact of increases in short-term market interest rates. The average yield on loans increased 78 basis points to 6.53% in the current quarter driven by commercial loan growth. Additionally, approximately 57% of our portfolio is comprised of variable rate commercial loans tied to prime that were positively impacted by increases in short-term market rates. Average loans in the quarter increased $116.2 million, or 15.7%, to $854.4 million when compared to the third quarter of 2021, driven primarily by our national commercial lending platform. Excluding the PPP loan portfolio in the third quarter of 2021, average loan growth would have been approximately 20%. Total loan originations during the quarter were $59.1 million, partially offset by elevated paydowns of $43.3 million. Our loan-to-deposit ratio was 73.7% as our low-cost deposit base increased $210.4 million, or 21.5%, fueled by demand and escrow deposits. Average securities in the quarter increased $76.5 million to $214.7 million as management opportunistically invested excess liquidity in the investment portfolio driving average yields up 41 basis points to 2.08% and increasing interest income $543 thousand to $1.1 million in the current quarter. The increases in short-term market interest rates increased yields and the corresponding interest income on our reverse repurchase agreements as well as our interest earning cash balances.

The provision for loan losses was $650 thousand for the third quarter of 2022 which was a $3.1 million decrease from the $3.8 million third quarter 2021 provision. The third quarter of 2021 included a charge for the reclassification of our legacy NFL consumer post settlement loan portfolio to loans held for sale and were subsequently exited.As of September 30, 2022, Esquire had an allowance to loans ratio of 1.24% as compared to 1.20% in the trailing quarter ended June 30, 2022. The increase in the allowance as a percentage of loans was general reserve driven considering the qualitative factors associated with the current uncertain economic environment.

Noninterest income was $6.4 million for the third quarter of 2022, a $1.5 million increase from the same period in 2021, driven by increases in payment processing fees, ASP fees, and the third quarter of 2021 valuation losses on the NFL portfolio of $384 thousand. Payment processing income was $5.5 million for the third quarter of 2022, a $231 thousand increase from the same period in 2021. Payment processing volumes and transactions for the credit and debit card processing platform increased $1.1 billion, or 17.4%, to $7.3 billion and 27.5 million, or 24.0%, to 142.1 million transactions, respectively, for the quarter ended September 30, 2022, as compared to the same period in 2021. These increases were driven by expansion of our sales channels through ISOs, increased number of merchants, volume increases, the reopening of the economy post pandemic and were facilitated by our focus on technology and other resources in the payments vertical. We use proprietary and industry leading technology to ensure card brand and regulatory compliance, support multiple processing platforms, manage daily risk across 75,000 small business merchants in all 50 states, and perform commercial treasury clearing services for approximately $7.3 billion in processing volume across 142.1 million transactions. ASP fee income totaled $886 thousand for the third quarter of 2022, as this fee income on our off-balance sheet funds is directly impacted by the average balance of those funds and short-term interest rates.

Noninterest expense increased $1.8 million, or 20.3%, to $10.8 million for the third quarter of 2022, as compared to the same period in 2021. This increase was primarily driven by increases in employee compensation and benefits, hiring related costs, advertising and marketing, data processing, and travel and business relations. Employee compensation and benefits costs increased $996 thousand, or 18.0%, due to increases in staff and officer level employees to support our growth, investment in digital platforms and related sales/marketing divisions, and the impact of salary, bonus and stock-based compensation increases. Due to the effects of inflation on the overall economy and consumer prices, we proactively increased our employees’ base salary at year-end in excess of industry and national averages to support employee retention. Hiring related costs increased $278 thousand as we continue to invest in staffing to support our growth. Advertising and marketing costs increased $191 thousand, or 66.1%, as we continued to grow our digital marketing

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platform and expand our thought leadership in our national verticals. Data processing costs increased $130 thousand, or 13.3%, due to increased processing volume, primarily driven by our core banking platform, and additional costs related to our technology implementations. Travel and business relations costs increased $74 thousand as we continued to re-engage in our traditional high touch marketing and sales efforts to complement our digital marketing efforts.

The Company’s efficiency ratio was 49.3% for the three months ended September 30, 2022, as compared to 55.6% in 2021.

The effective tax rate was 26.5% for the third quarter of 2022, as compared to 27.0% for the same period in 2021.

Year to Date Earnings

Net income for the nine months ended September 30, 2022 was $19.4 million, or $2.37 per diluted share, compared to $11.2 million, or $1.42 per diluted share for the same period in 2021. Returns on average assets and equity for the nine months ended September 30, 2022 were 2.14% and 17.88%, respectively, compared to 1.52% and 11.36% for the same period of 2021.

Net interest income for the nine months ended September 30, 2022 increased $9.0 million, or 28.1%, to $41.0 million, due to growth in average interest earning assets totaling $216.7 million, or 22.8%, to $1.2 billion and increases in the average yields on interest earning assets when compared to the same period in 2021. Our net interest margin increased to 4.69% in the current period as the margin was positively impacted by growth in higher yielding variable rate commercial loans and the impact of increases in short-term market interest rates. The average yield on loans increased 32 basis points to 6.08% when comparing 2022 to the prior year period. Average loans increased $118.8 million, or 16.8%, to $824.4 million when compared to the prior year period, driven primarily by growth in the commercial loan portfolio. Average securities increased $70.5 million to $201.5 million as management opportunistically invested excess liquidity in the agency bond portfolios driving average yields up 35 basis points to 1.97% and increasing interest income $1.4 million to $3.0 million in the current year. The movement in short-term market interest rates increased yields and interest income on our reverse repurchase agreements as well as our interest earning cash balances.

The provision for loan losses was $2.1 million for the nine months ended September 30, 2022, which was a $4.3 million decrease from 2021 provision of $6.4 million due to the charge recognized in 2021 on our legacy NFL consumer post settlement loan portfolio.

Noninterest income was $18.1 million for the nine months ended September 30, 2022, a $2.3 million increase from the same period in 2021, driven by increases in payment processing fees and ASP fees in the current year and net valuation losses of $384 thousand on the NFL portfolio in the prior year. Payment processing income increased $339 thousand as compared to the prior year period despite $500 thousand in early termination fees in 2021. Payment processing volumes and transactions for the credit and debit card processing platform increased $3.3 billion, or 18.7%, to $20.7 billion and 72.0 million, or 22.2%, to 396.0 million transactions, respectively, for the nine months ended September 30, 2022, as compared to the same period in 2021. These increases were driven by expansion of our sales channels through ISOs, increased number of merchants, volume increases and the reopening of the economy post pandemic. ASP fee income increased from $29 thousand in 2021 to $1.5 million in 2022 as this fee income on our off-balance sheet funds is directly impacted by the average balance of those funds and short-term interest rates.

Noninterest expense increased $4.3 million, or 16.3%, to $30.6 million for the nine months ended 2022, as compared to the same period in 2021. This increase was primarily driven by increases in employee compensation and benefits, hiring related costs, data processing, travel and business relations, and advertising and marketing and occupancy and equipment costs, offset by a decrease in consulting services. Employee compensation and benefits costs increased $2.8 million, or 17.1%, due to increases in staff and officer level employees to support our growth, investment in digital platforms and related sales/marketing divisions, and the impact of salary, bonus and stock-based compensation increases. Due to the effects of inflation on the overall economy and consumer prices, we proactively increased our employees’ base salary at year-end in excess of industry and national averages to support employee retention. Consulting service costs decreased $293 thousand, or 32.9%, partially offsetting the increase in employee compensation and benefits as previously contracted consultants were hired, primarily in our technology development and digital marketing departments. Hiring related costs increased $553 thousand as we continue to increase our staffing to support our growth. Data processing costs increased $433 thousand, or 15.8%, due to increased processing volume, primarily driven by our core banking platform, and additional costs related to our technology implementations. Travel and business relations costs increased $191 thousand as we continued to re-engage in our traditional high touch marketing and sales efforts on a national basis to complement our digital marketing efforts. Advertising and marketing costs increased $173 thousand, or 18.5%, as we continued to grow our digital marketing platform and expand our thought leadership in our national verticals. Occupancy and equipment costs increased $156 thousand, or 7.4%, primarily due to amortization of our investments in internally developed software to support our new digital platform and additional office space to support our continued growth.

The Company’s efficiency ratio was 51.7% for the nine months ended September 30, 2022, as compared to 55.0% in 2021.

The effective tax rate was 26.5% for the nine months ended 2022, as compared to 26.1% for the same period in 2021.

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Asset Quality

At September 30, 2022, nonperforming loan balances totaled $5.8 million and consisted of two commercial law firm loan facilities with strong loan to collateral values. As of September 30, 2022, the allowance for loan losses was $10.9 million, or 1.24% of total loans, as compared to $8.7 million, or 1.16% of total loans at September 30, 2021. The increase in the allowance as a percentage of loans was general reserve driven considering the qualitative factors associated with the current uncertain economic environment.

Balance Sheet

At September 30, 2022, total assets were $1.3 billion, reflecting a $224.3 million, or 20.0% increase from September 30, 2021. This increase was attributable to loans held for investment increasing $131.0 million, or 17.6%, to $875.1 million, driven by commercial and commercial real estate loans, funded with low-cost deposits. Excluding the effects of net payoffs of our PPP loans totaling $11.7 million, our loan growth was $143.0 million, or 19.5%, when comparing September 30, 2022 to 2021. Our higher yielding variable rate commercial loans increased $92.0 million, or 23.8%, during this same period, driven by our national litigation lending platform. Our sales pipeline remains robust, anchored by our current and future digital marketing plans, robust proprietary CRM platform and our employees that support current and future growth. Commencing in the first quarter of 2022, we invested a portion of our excess liquidity in held-to-maturity securities, totaling $80.1 million at September 30, 2022. Our available-for-sale securities portfolio decreased $30.3 million, or 21.4%, to $111.4 million as compared to September 30, 2021.

The following table provides information regarding the composition of our loan portfolio for the periods presented:

	At September 30,				At December 31,				At September 30,
	2022				2021				2021
	(Dollars in thousands)
Real estate:
Multifamily	$	263,689	30.1	%	$	254,852	32.5	%	$	240,055	32.2	%
Commercial real estate		83,515	9.5			48,589	6.1			53,437	7.2
1 – 4 family		31,496	3.6			40,753	5.2			44,022	5.9
Total real estate		378,700	43.2			344,194	43.8			337,514	45.3
Commercial		478,854	54.7			427,859	54.6			386,818	51.9
PPP		—	—			4,249	0.5			11,693	1.6
Consumer		18,424	2.1			8,681	1.1			8,651	1.2
Total loans held for investment	$	875,978	100.0	%	$	784,983	100.0	%	$	744,676	100.0	%
Deferred loan fees and unearned premiums, net		(864)				(466)				(584)
Loans, held for investment	$	875,114			$	784,517			$	744,092
Loans held for sale, net (included in Other assets)	$	—			$	14,100			$	14,200

Total deposits were $1.2 billion as of September 30, 2022, a $210.4 million, or 21.5%, increase from September 30, 2021. This was primarily due to a $173.9 million, or 31.7%, increase in Savings, NOW and Money Market deposits to $723.0 million, a $28.7 million, or 6.9%, increase in noninterest bearing demand deposits to $445.6 million, and a $7.8 million increase in time deposits to $18.9 million. The increase in deposits was primarily driven by commercial and escrow low-cost and noninterest bearing deposits from our litigation and small business platforms. Off-balance sheet sweep funds totaled $496.1 million at quarter end, representing additional sources of liquidity for future growth. Our deposit growth and off-balance sheet funds continue to demonstrate our highly efficient branchless and technology enabled deposit platforms.

Stockholders’ equity increased $11.4 million to $148.5 million as of September 30, 2022, compared to September 30, 2021, primarily due to net income and amortization of share-based compensation, partially offset by other comprehensive losses of $15.8 million. This other comprehensive loss reflects the current unrealized losses on our available-for-sale agency MBS portfolio, net of tax, that have been negatively impacted by recent increases in short-term market interest rates. Esquire Bank remains well above bank regulatory “Well Capitalized” standards.

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About Esquire Financial Holdings, Inc.

Esquire Financial Holdings, Inc. is a financial holding company headquartered in Jericho, New York, with one branch office in Jericho, New York and an administrative office in Boca Raton, Florida. Its wholly-owned subsidiary, Esquire Bank, National Association, is a full-service commercial bank dedicated to serving the financial needs of the litigation industry and small businesses nationally, as well as commercial and retail customers in the New York metropolitan area. The bank offers tailored financial and payment processing solutions to the litigation community and their clients as well as dynamic and flexible payment processing solutions to small business owners. For more information, visit www.esquirebank.com.

Cautionary Note Regarding Forward-Looking Statements

This press release includes “forward-looking statements” 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; the continuing impact of the COVID-19 pandemic on our business and results of operation; 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 Securities and Exchange Commission. The forward-looking statements included in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “might,” “should,” “could,” “predict,” “potential,” “believe,” “expect,” “attribute,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “goal,” “target,” “outlook,” “aim,” “would,” “annualized” and “outlook,” or similar terminology. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise, except as may be required by law.

Contact Information:

Eric S. Bader

Executive Vice President and Chief Operating Officer

Esquire Financial Holdings, Inc.

(516) 535-2002

eric.bader@esqbank.com

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ESQUIRE FINANCIAL HOLDINGS, INC.

Condensed Consolidated Statement of Condition (unaudited)

(dollars in thousands except per share data)

	September 30,			December 31,			September 30,
	2022			2021			2021
ASSETS
Cash and cash equivalents	$	182,125		$	149,156		$	138,235
Securities purchased under agreements to resell, at cost		50,225			50,271			50,899
Securities available-for-sale, at fair value		111,375			148,384			141,703
Securities held-to-maturity, at cost		80,102			—			—
Securities, restricted at cost		2,810			2,680			2,680
Loans, held for investment		875,114			784,517			744,092
Less: allowance for loan losses		(10,885)			(9,076)			(8,665)
Loans, net of allowance		864,229			775,441			735,427
Premises and equipment, net		2,852			3,334			3,443
Other assets		53,825			49,504			50,883
Total Assets	$	1,347,543		$	1,178,770		$	1,123,270
LIABILITIES AND STOCKHOLDERS' EQUITY
Demand deposits	$	445,557		$	409,350		$	416,849
Savings, NOW and money market deposits		722,972			599,747			549,069
Certificates of deposit		18,928			19,312			11,125
Total deposits		1,187,457			1,028,409			977,043
Other liabilities		11,548			6,626			9,046
Total liabilities		1,199,005			1,035,035			986,089
Total stockholders' equity		148,538			143,735			137,181
Total Liabilities and Stockholders' Equity	$	1,347,543		$	1,178,770		$	1,123,270
Selected Financial Data
Common shares outstanding		8,082,918			8,088,846			7,847,494
Book value per share	$	18.38		$	17.77		$	17.48
Equity to assets		11.02	%		12.19	%		12.21	%
Capital Ratios (1)
Tier 1 leverage ratio		11.57	%		11.46	%		11.32	%
Common equity tier 1 capital ratio		14.77	%		14.79	%		14.79	%
Tier 1 capital ratio		14.77	%		14.79	%		14.79	%
Total capital ratio		15.90	%		15.89	%		15.90	%
Asset Quality - Loans Held for Investment
Nonperforming loans	$	5,820		$	6		$	12
Allowance for loan losses to total loans		1.24	%		1.16	%		1.16	%
Nonperforming loans to total loans		0.67	%		0.00	%		0.00	%
Nonperforming assets to total assets		0.43	%		0.00	%		0.00	%
Allowance to nonperforming loans		187	%		NM			NM

(1) Regulatory capital ratios presented on bank-only basis.

NM – Not meaningful

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ESQUIRE FINANCIAL HOLDINGS, INC.

Condensed Consolidated Income Statement (unaudited)

(dollars in thousands except per share data)

	Three months ended						Nine months ended
	September 30,						September 30,
	2022			2021			2022			2021
Interest income	$	15,960		$	11,493		$	41,940		$	32,600
Interest expense		413			209			934			597
Net interest income		15,547			11,284			41,006			32,003
Provision for loan losses		650			3,750			2,140			6,400
Net interest income after provision for loan losses		14,897			7,534			38,866			25,603
Noninterest income:
Payment processing fees		5,458			5,227			16,287			15,948
Other noninterest income		974			81			1,768			292
Gain (loss) on loans held for sale		—			(384)			88			(384)
Total noninterest income		6,432			4,924			18,143			15,856
Noninterest expense:
Employee compensation and benefits		6,519			5,523			18,952			16,189
Other expenses		4,319			3,484			11,657			10,124
Total noninterest expense		10,838			9,007			30,609			26,313
Income before income taxes		10,491			3,451			26,400			15,146
Income taxes		2,780			932			6,996			3,951
Net income	$	7,711		$	2,519		$	19,404		$	11,195
Earnings Per Share
Basic	$	1.01		$	0.34		$	2.54		$	1.50
Diluted	$	0.94		$	0.32		$	2.37		$	1.42
Selected Financial Data
Return on average assets		2.48	%		0.97	%		2.14	%		1.52	%
Return on average equity		20.60	%		7.32	%		17.88	%		11.36	%
Net interest margin		5.18	%		4.50	%		4.69	%		4.50	%
Efficiency ratio (1)		49.3	%		55.6	%		51.7	%		55.0	%

(1) Efficiency ratio represents noninterest expenses divided by the sum of net interest income plus noninterest income.

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ESQUIRE FINANCIAL HOLDINGS, INC.

Condensed Consolidated Average Balance Sheets and Average Yield/Cost (unaudited)

(dollars in thousands)

	For the Three Months Ended September 30,
	2022						2021
	Average				Average		Average				Average
	Balance		Interest		Yield/Cost		Balance		Interest		Yield/Cost
INTEREST EARNING ASSETS
Loans, held for investment	$	854,447	$	14,055	6.53	%	$	738,281	$	10,709	5.75	%
Securities, includes restricted stock		214,722		1,126	2.08	%		138,200		583	1.67	%
Securities purchased under agreements to resell		49,771		377	3.01	%		50,972		150	1.17	%
Interest earning cash and other		72,902		402	2.19	%		66,726		51	0.30	%
Total interest earning assets		1,191,842		15,960	5.31	%		994,179		11,493	4.59	%
NONINTEREST EARNING ASSETS		43,358						33,765
TOTAL AVERAGE ASSETS	$	1,235,200					$	1,027,944
INTEREST BEARING LIABILITIES
Savings, NOW, Money Market deposits	$	572,966	$	368	0.25	%	$	453,678	$	189	0.17	%
Time deposits		19,141		44	0.91	%		11,126		19	0.68	%
Total interest bearing deposits		592,107		412	0.28	%		464,804		208	0.18	%
Borrowings		48		1	8.27	%		54		1	7.35	%
Total interest bearing liabilities		592,155		413	0.28	%		464,858		209	0.18	%
NONINTEREST BEARING LIABILITIES
Demand deposits		481,599						414,930
Other liabilities		12,966						11,550
Total noninterest bearing liabilities		494,565						426,480
Stockholders' equity		148,480						136,606
TOTAL AVG. LIABILITIES AND EQUITY	$	1,235,200					$	1,027,944
Net interest income			$	15,547					$	11,284
Net interest spread					5.03	%					4.41	%
Net interest margin					5.18	%					4.50	%

8

ESQUIRE FINANCIAL HOLDINGS, INC.

Condensed Consolidated Average Balance Sheets and Average Yield/Cost (unaudited)

(dollars in thousands)

	For the Nine Months Ended September 30,
	2022						2021
	Average				Average		Average				Average
	Balance		Interest		Yield/Cost		Balance		Interest		Yield/Cost
INTEREST EARNING ASSETS
Loans, held for investment	$	824,402	$	37,499	6.08	%	$	705,609	$	30,408	5.76	%
Securities, includes restricted stock		201,502		2,975	1.97	%		131,019		1,588	1.62	%
Securities purchased under agreements to resell		49,307		699	1.90	%		51,185		470	1.23	%
Interest earning cash and other		92,617		767	1.11	%		63,354		134	0.28	%
Total interest earning assets		1,167,828		41,940	4.80	%		951,167		32,600	4.58	%
NONINTEREST EARNING ASSETS		46,577						32,054
TOTAL AVERAGE ASSETS	$	1,214,405					$	983,221
INTEREST BEARING LIABILITIES
Savings, NOW, Money Market deposits	$	557,316	$	841	0.20	%	$	424,468	$	536	0.17	%
Time deposits		19,186		90	0.63	%		11,098		59	0.71	%
Total interest bearing deposits		576,502		931	0.22	%		435,566		595	0.18	%
Borrowings		67		3	5.99	%		70		2	3.82	%
Total interest bearing liabilities		576,569		934	0.22	%		435,636		597	0.18	%
NONINTEREST BEARING LIABILITIES
Demand deposits		481,887						405,427
Other liabilities		10,817						10,393
Total noninterest bearing liabilities		492,704						415,820
Stockholders' equity		145,132						131,765
TOTAL AVG. LIABILITIES AND EQUITY	$	1,214,405					$	983,221
Net interest income			$	41,006					$	32,003
Net interest spread					4.58	%					4.40	%
Net interest margin					4.69	%					4.50	%

9

EX-99.2

Exhibit 99.2

Ensuring our Clients and Our Institution Succeed BoldlyListed as ESQ Esquire Financial Holdings, Inc. (Financial Holding Company for Esquire Bank, N.A.)3Q 2022 Investor Presentation Exhibit 99.2

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, are subject to assumptions, risks and uncertainties, many of which are beyond the control of the Company. These statements are may be identified through the use of words or phrases such as “may,” “might,” “should,” “could,” “predict,” “potential,” “believe,” “expect,” “attribute,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “goal,” “target,” “outlook,” “aim,” “would,” “annualized” and “outlook,” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. Forward-looking statements speak only as of the date they are made and are inherently subject to uncertainties and changes in circumstances, including those described under the heading “Risk Factors” in the Company’s 10-K and 10-Q, filed with the Securities and Exchange Commission (“SEC”).Forward-looking statements are not guarantees of future performance and should not be relied upon as representing management’s views as of any subsequent date. Actual results could differ materially from those indicated. The Company undertakes no obligation to update forward-looking statements, whetheras a result of new information, future events or otherwise, except as may be required by law. The forward-looking statements speak as of the date of this presentation.The delivery of this presentation shall not, under anycircumstances, create any implication there has been no change in the affairs of the Company after the date hereof.This presentation includes industry and market data that we obtained from periodic industry publications, third-party studies and surveys. Industry publications and surveys generally state that the information contained therein has been obtained from sources believed to be reliable.Although we believe the industry and market data to be reliable as of the date of this presentation, this information could prove to be inaccurate.Industry and market datacould be wrong because of the method by which sources obtained their data and because information cannot always be verified with complete certainty due to the limitson the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties.In addition, we do not know all of the assumptions regarding general economic conditions or growth that were used in preparing the forecasts from the sources relied upon or cited herein.2

Ensuring that our Company and clients succeed boldlywith innovative solution-based products and technology, driving client success through relationship banking Our Mission

Decades of expertise in the national litigation marketAsset sensitive model anchored by law firm loans yielding approx. 9%Branchless and tech enabled core deposit platform funded at 0.15%Driving loan and deposit growth with a CAGR of 23% since 2015Expertise in sales, risk, and compliance management for 25+ yearsIndependent Sales Organization (“ISO”) model with approximately 75,000 merchants nationallyFee income represents 29% of total revenueStrong growth and stable payment processing fee income with a CAGR of 58% since 2017Average ROA and ROTCE of 2.48% and 20.60%, respectively Industry leading NIM of 5.18%Diversified revenue stream with strong NIM and stable fee incomeStrong efficiency ratio of 49.3% while investing in vertical specific technology & future growth A digital-first bank with best-in-class technology fueling futuregrowth and industry leading client retention ratesCustomized and fully integrated Customer Relationship Management (“CRM”) for excellence in client service and operational efficiencyInvestments made in artificial intelligence (“AI”) to facilitate precision marketing and client acquisition across our national verticalsNationwide Branchless Tech Enabled Litigation & Payment Processing Verticals Generating Industry Leading Returns Litigation VerticalCommercial Banking NationallyIndustry Leading ReturnsFueled by Branchless and Tech Enabled National VerticalsPayment Processing Vertical(Merchant Services)Small Business Banking NationallyTechnology –the FutureA Catalyst for Strong Growth 4 How Our Clients Succeed Boldly

Strong Growth Driven by Unique National Verticals How Esquire Succeeds Boldly Key HighlightsStrong growth in higher yielding variable rate loansStable low-cost branchless and tech enabled deposit modelEquity to Assets of 11.02% 5at September 30, 2022

Stable low-cost branchless deposit modelStrong commercial deposits franchise nationallyDDA and escrow-based NOW accounts represent 38% and 40% of total deposits at September 30, 2022, respectivelyHigher yielding variable rate commercial loans anchored by our national litigation portfolioAsset sensitive balance sheet benefiting from increases in short-term interest rates How Esquire Succeeds Boldly 6Industry Leading Net Interest Margin*Included noninterest bearing demand deposits (“DDA”)

Strong Revenue Growth How Esquire Succeeds Boldly 7 Key HighlightsStrong asset sensitive net interest marginStable payment processing fee income as short-term interest rates increase

Financial Highlights How Esquire Succeeds Boldly Key HighlightsIndustry leading returns from our unique and tech enabled national business modelsStable payment processing fee income –noninterest income totaled 29% of revenue for the quarter ended September 30, 2022Branchless low-cost deposits with a cost of funds of 0.15% at September 30, 2022 *Book value per share and equity to assets are $18.38 and 11.02% at September 30, 2022, respectivelyRaymond James’ Top Performing Community Bank (2018-2021)Piper Sandler & Co.’s “2021 FSG Top Ideas” Added to the Russell 3000 Index as part of the 2022 index reconstitution 8at September 30, 2022*Included noninterest bearing demand deposits (“DDA”)

Financial Highlights, cont’d How Esquire Succeeds Boldly 9at September 30, 2022*EPS –Diluted Earnings Per Share

Loan Portfolio Diversification with Focused GrowthFocused growth in higher yielding variable rate commercial loans with strong credit metricsSelective multifamily loan growth with strong historical performance in the NY metro market How Esquire Succeeds Boldly 10at September 30, 2022

Approximately 57% of our loan portfolio is variable rate and primarily tied to prime as of September 30, 2022Asset sensitive –estimated sensitivity of projected annualized net interest income (“NII”) up 100 and 200 basis point rate scenarios increases projected NII by 9.5% and 19.2%, respectively at June 30, 2022Loan Portfolio Diversification with Focused Growth How Esquire Succeeds Boldly 11

Solid Credit Metrics, Asset Quality and ALLL Coverage How Esquire Succeeds Boldly 12at September 30, 2022*ALLL –Allowance for loan and lease lossesNote –All asset quality metrics are based on our loans held for investment portfolio(1) Reclassified the legacy NFL consumer loan portfolio from held for investment to held for sale which is accounted for at the lower of cost or market driving a $9.0 million charge off.

*Note: Excludes sweeps totaling $496 millionDeposit Composition and GrowthDDA and NOW (escrow funds) deposits total 78% of total deposits, representing stable funding sources in various interest rate scenariosLitigation and payment processing deposits represent 72% and 13% of total deposits at September 30, 2022, respectivelyOff-balance sheet commercial litigation funds (“sweeps”) total $496 million at September 30, 2022, representing an additional source of fundingOur tech enabled deposit platform allows our commercial customers to utilize our corporate cash management suite, including remote deposit capture (“RDC”) while also leveraging our mobile banking application, creating a highly efficient branchless platform How Esquire Succeeds Boldly 13

Significant national markets primed for disruption: $429 billion & 100,000+ firms in the litigation vertical and $9.5 trillion and 10+ million merchants in the payment processing verticalKey TakeawaysWhy Esquire is Set to Succeed Boldly Tremendous untapped potential: Esquire’s current market share is a fraction of both national verticals that are primed for disruption by our client- centric & tech-focused institutionWe are thought leaders in the litigation vertical and provide C-suite access for ISO flexibility in the payment processing verticalDifferentiated and positioned for growth: With industry leading tailored products and state-of-the-art technology geared towards effective client acquisition 14

National MarketsLitigation & Payment Processing Verticals Supported by Investment in Technology

Commercial Litigation (Law Firm) LoansFull annual underwriting:3 years financials and tax returns (business and personal) Full contingent case inventory valuation process & collateral assignmentDiversity across law firm inventories and collateralPersonal guaranteesAverage LTV of less than 20%Average DSCR is typically greater than 1.70xAverage draws against committed and uncommitted line-of-credit (“LOC”) and case disbursement loans of approximately 50%Weighted average interest rate approximately 9%Funded with low-cost litigation depositsLitigation deposits to litigation loans drawn is approximately 212% How Esquire Succeeds Boldly 16

Payment Processing –Current ISO Model How Esquire Succeeds BoldlyWhat is an ISO? ISO Responsibilities They DoMerchant Vertical and Technology FocusSales Agent ModelPerforms Initial UnderwritingBoards Merchant to Payment Processing PlatformInstallation of Merchant EquipmentManage Call Center for Merchant ClientsMerchant Risk and PCI Compliance Bank Responsibilities We DoRobust PoliciesTech Enabled Card Brand and Regulatory ComplianceSupport Multiple Processing SystemsAssess ISO VerticalsRe-underwrite Merchant ApplicationsUtilize Industry Leading Risk Management TechnologyDaily and Month End Risk and Compliance ManagementCommercial Treasury Function for Merchant Clearing and ISO Cash ManagementMaintaining and Monitor ISO and Merchant Reserves (DDA) 17

Currently servicing approximately 75,000 merchants across 50 statesNoninterest income, primarily payment processing fees, represents 29% of total revenue, at September 30, 2022 How Esquire Succeeds Boldly *Payment processing CAGR is 58%18 Strong Growth in Stable Noninterest Incomeat September 30, 2022

How Esquire Succeeds Boldly Key HighlightsStrong and stable DDA reservesProtecting capital from merchant chargebacks and returns 19Protecting Our Company with Strong Payment Processing Reservesat September 30, 2022

Technology Driving Bold SuccessClient Centric TechnologyA Key Driver for Future Growth WebsiteArtificial Intelligence*MarketingSalesUnderwritingOnboarding MarketingCloud AI to facilitate precision marketing and exponential customer acquisition across all verticalsWebsite analytics, data enrichment and thought leadership content marketingPrecision marketing –right offer right timeSales enablement, pipeline management and forecastingUnderwriting efficiency & risk management / cash management and mobile banking / online applicationsCustomer onboarding / core banking Partnering with best-in-class software vendors and solutions, with custom development to service all verticals at the bankProprietary CRM built on Salesforce platform housing all client data touch points from prospect to boarding with a single client view, enabling high volume client acquisition strategies and excellence in client service * Deployment of AI technologies applicable only to sales and marketing processes and not used as a decisioning tool for loan underwriting processes. 20 Online Banking

SucceedingBoldly Listed as ESQ Contact Information:Eric S. Bader Executive Vice President & Chief Operating Officer 516-535-2002eric.bader@esqbank.com

Commercial Real Estate Loans, U.S. Litigation & Payment Markets Appendix

Esquire’s Bold OpportunitiesNew York City properties total $1.3 trillion in Market Value.* A Significant Growth OpportunityThoughtfulin our property and borrower selection processMinimal historical lossesAverage debt-service coverage(“DSCR”) ofapproximately 1.5xAverage loan-to-value(“LTV”) of approximately 55%Strong owner and operators with high quality net worthCRE exposure is less than 225% of total capital plus the allowance for loan losses (“ALLL”) 23*NYC Department of Finance publishes fiscal year 2022 tentative property tax assessment roll issued on January 15, 2021

The Esquire Competitive AdvantageEsquire’s Bold OpportunitiesU.S. Litigation Market A Significant Growth OpportunityU.S. Tort actions are estimated to consume 1.5-2.0% of U.S. GDP* annually or $429 billion** Esquire does not compete with non-bank finance companies Significant barriers to entry–management expertise, brand awareness, regulatory/compliance, and decades of experience 15-Year Industry Track RecordExtensive Litigation Experience In-HouseDeep Relationships with Respected Firms NationallyDaily Resources and Research Cash Flow Lending Coupled with Borrowing Base or Asset Based ApproachTailoring unique products other banks do not offer Typically advancing more than traditional banks, on traditional banking terms 24 Key Highlights$429 billion** Total Addressable Market (“TAM”) in litigation verticalEsquire is a tailored, differentiated brand and thought leader in the litigation market*US Tort actions are estimated to consume 1.5-2.0% of U.S. GDP annually. –Towers Watson US Tort Trends**$429 billion estimated annual US tort costs by US Chamber of Commerce –US Chamber of Commerce IRL Costs and Compensation of US Tort System

25Digitally Transforming The Business of LawAligning Law Firm Case Inventory Lifecycle to Customer Retention Client IncidentReceive IntakeCase ManagementSettlement/VerdictDisbursement $ 1-3 Years (+) ProductsCase Cost LoansWorking Capital LoansFirm and Partner Acquisition LoansTerm Loans to Finance Case Acquisition & GrowthEscrow Banking and QSF Settlement ServicesPlaintiff Banking including Exclusive Prepaid Card Offering TechnologyEsquire Insight –Case Management TechnologyCommercial Cash ManagementCase Cost ManagementOnline ApplicationsThought Leadership -Digital Platform and Content 25

The payments industry grew nearly 25% from 2020 to 2021 to an estimated total payment volume of$9.5 trillion Esquire’s Bold OpportunitiesPayment Volume Trends –A Significant Growth Opportunity Sources:CompanyFinancialRecords,Note: PayPalfiguresrepresent PayPal’sestimated U.S.percent shareof“TotalPaymentVolume”(TPV).PayPalvolumeincludesvolumefromabankaccount,aPayPalaccountbalance,aPayPalCredit account,acreditordebit cardorotherstored valueproductssuchascouponsandgiftcards.Assuch,someofthisvolumemaybeincludedinothernetworks aswell.PayPal’sclassificationinthepaymentsindustryecosystemisvaried/debatedasitperforms functionsattributedtoapaymentnetwork,anissuer,acquirer,etc.,and its financialreportingdoesnotdirectly align with other payment network reporting structures and methods. Discover volume includes Discover Network and Pulse Network transactions. 2019-2021: +9.7% CAGR 26at December 31, 2021 ($ in billions)

XML

Document and Entity Information	Oct. 25, 2022
Document and Entity Information [Abstract]
Document Type	8-K
Document Period End Date	Oct. 25, 2022
Entity File Number	001-38131
Entity Registrant Name	Esquire Financial Holdings, Inc.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	27-5107901
Entity Address, Address Line One	100 Jericho Quadrangle
Entity Address, Adress Line Two	Suite 100
Entity Address, City or Town	Jericho
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	11753
City Area Code	516
Local Phone Number	535-2002
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	ESQ
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Central Index Key	0001531031
Amendment Flag	false