On July 25, 2024, Esquire Financial Holdings Inc (ESQ, Financial) released its 8-K filing reporting its second-quarter 2024 results. Esquire Financial Holdings Inc is a full-service commercial bank dedicated to serving the financial needs of the legal industry and small businesses nationally, as well as commercial and retail customers in the New York metropolitan area. The Bank offers tailored products and solutions to the legal community and their clients as well as dynamic and flexible payment processing solutions to small business owners.
Quarterly Performance Overview
Esquire Financial Holdings Inc (ESQ, Financial) reported net income of $10.5 million, or $1.25 per diluted share, for the quarter ended June 30, 2024, surpassing the analyst estimate of $1.19 per share. This represents a notable increase from the $9.1 million, or $1.10 per diluted share, reported for the same period in 2023. The company's revenue for the quarter was $24.3 million, exceeding the estimated $23.51 million.
Key Financial Metrics
Net interest income for Q2 2024 increased by $4.2 million, or 21.1%, to $24.3 million, driven by growth in average interest-earning assets funded with low-cost core deposits. The net interest margin improved to 6.19%, up from 6.02% in the same period last year. Average loan yield increased to 7.85%, with average loans growing by $247.2 million, or 24.9%, to $1.24 billion.
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Income | $10.5 million | $9.1 million |
| Earnings Per Share (Diluted) | $1.25 | $1.10 |
| Net Interest Income | $24.3 million | $20.1 million |
| Net Interest Margin | 6.19% | 6.02% |
| Average Loan Yield | 7.85% | 7.73% |
Balance Sheet and Asset Quality
As of June 30, 2024, total assets were $1.72 billion, reflecting an 18.3% increase from June 30, 2023. This growth was primarily driven by a $205.3 million, or 19.4%, increase in loans. The allowance for credit losses stood at $18.5 million, or 1.47% of total loans, up from 1.34% a year earlier. The ratio of nonperforming loans to total loans was 0.87%, indicating strong asset quality.
Noninterest Income and Expense
Noninterest income for Q2 2024 totaled $6.3 million, down from $6.7 million in Q2 2023. This decline was primarily due to a decrease in payment processing income, which fell by $442 thousand. Noninterest expense increased by $2.3 million, or 17.4%, to $15.2 million, driven by higher employee compensation and benefits, advertising and marketing, and data processing costs.
Year-to-Date Performance
For the six months ended June 30, 2024, Esquire Financial Holdings Inc reported net income of $20.5 million, or $2.45 per diluted share, compared to $21.3 million, or $2.57 per diluted share, for the same period in 2023. Excluding a $4.0 million gain on the partial sale of a fintech investment in Q1 2023, adjusted net income for the first half of 2023 was $18.4 million, or $2.21 per diluted share.
Conclusion
Esquire Financial Holdings Inc (ESQ, Financial) demonstrated robust growth in Q2 2024, driven by strong performance in its core deposit and commercial loan segments. The company's strategic focus on higher-yielding variable rate commercial loans and low-cost core deposits has positively impacted its net interest margin and overall financial health. Despite challenges in noninterest income, Esquire's proactive balance sheet management and investment in technology and human resources position it well for sustained growth.
Explore the complete 8-K earnings release (here) from Esquire Financial Holdings Inc for further details.
