Esquire Financial Holdings, Inc 8-K, filed Jan 26, 2022
Esquire Financial Holdings, Inc. (ESQ)
About this 8-K
Esquire Financial Holdings, Inc filed this 8-K on January 26, 2022, reporting on events of January 25, 2022.
Items reported
- Item 2.02: Financial results
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Item 2.02Results of Operations and Financial Condition.
On January 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 and year ended December 31, 2021. 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 7.01.Regulation 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 9.01.Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. | | Description |
99.1 | | |
99.2 | | Written presentation to be distributed and made available to investors and posted |
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. |
| |
| |
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Dated: January 25, 2022 | By:/s/ Andrew C. Sagliocca |
| Andrew C. Sagliocca |
| President and Chief Executive Officer |
Exhibit 99.1
ESQUIRE FINANCIAL HOLDINGS, INC.
REPORTS FOURTH QUARTER AND FULL YEAR 2021 RESULTS
Loan and Revenue Growth Continues to Drive Record Earnings and Returns
Jericho, NY – January 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 fourth quarter and full year of 2021. Significant achievements during the quarter include:
| ● | Net income of $6.7 million, or $0.83 per diluted share, as compared to $2.5 million, or $0.32 per diluted share on a linked quarter basis. |
| ● | Returns on average assets and common equity of 2.44% and 19.19%, respectively, as compared to 0.97% and 7.32% on a linked quarter basis. |
| ● | Current quarter includes a tax benefit of approximately $1.2 million, or $0.14 per diluted share, related to the exercise of certain stock options. Excluding this tax benefit, adjusted (1) net income, diluted earnings per share, return on average assets, and return on average common equity would have been $5.6 million, $0.69, 2.02%, and 15.85%, respectively. |
| ● | Industry leading net interest margin of 4.48% despite the sustained low interest rate environment and its negative effects on industry-wide median net interest margins. |
| ● | Loans held for investment increased $40.4 million, or 22% annualized, to $784.5 million on a linked quarter basis. Excluding repayments on Paycheck Protection Program (“PPP”) loans totaling $7.4 million, loans held for investment increased 26% annualized on a linked quarter basis as the Company continues to deploy excess liquidity from core deposits into higher yielding loans. |
| ● | Deposits increased $51.4 million on a linked quarter basis, or 21% annualized, to $1.0 billion, primarily driven by commercial deposits, with a cost of funds of 0.10% (including demand deposits). Demand deposits, totaling $409.4 million, represent 40% of total deposits while off-balance sheet sweep funds totaled $537.5 million at quarter end, clearly highlighting our excess liquidity and the continued strength of our branchless business model. |
| ● | Total assets increased $55.5 million on a linked quarter basis, or 20% annualized, to $1.2 billion and $242.1 million from year end 2020, or 26%. |
| ● | Noninterest income totaled $5.2 million or 31% of total revenues, stabilizing in the current quarter and increasing $479 thousand from the fourth quarter of 2020. |
| ● | Continued solid asset quality metrics with a reserve for loan losses to total loans of 1.16%. |
| ● | Esquire Bank remains well above the bank regulatory “Well Capitalized” standards. |
“The investments in our brand, digital platform, and sales strategy across our national litigation and payment processing platforms have and will continue to yield strong growth and returns, making Esquire a top performing financial institution in the industry driven by our technology platforms,” stated Tony Coelho, Chairman of the Board.
“Our timing and investment in digital marketing and related technology has been transformational for our Company,” stated Andrew C. Sagliocca, President and Chief Executive Officer. “Our digital marketing platform has contributed to more than half of the commercial loan originations, accelerating our growth on a national basis while most financial institutions stagnated in 2021. We believe that our
| (1) | Adjusted to exclude the fourth quarter 2021 discrete income tax benefit on share-based compensation totaling approximately $1.2 million. See non-GAAP reconciliation provided elsewhere herein. |
digital platforms are key to the Company’s future success and will play a significant role in 2022. Our sales pipeline remains robust, driven by our current and future digital marketing and technology development plans as well as employees that will support our future growth plans.”
Fourth Quarter Earnings
Net income for the quarter ended December 31, 2021 was $6.7 million, or $0.83 per diluted share, compared to $3.9 million, or $0.51 per diluted share for the same period in 2020. Returns on average assets and common equity for the current quarter were 2.44% and 19.19%, respectively, compared to 1.70% and 12.54% for the same period of 2020.
Net interest income for the fourth quarter of 2021 increased $1.8 million, or 18.4%, to $11.7 million, due to growth in average interest earning assets totaling $161.4 million, or 18.4%, to $1.0 billion when compared to the same period in 2020. Our net interest margin remained consistent at 4.48% for the fourth quarter of 2021 compared to 4.49% for the same period in 2020, supported by the origination of higher yielding commercial litigation loans during the period. Average loans in the quarter increased $94.6 million, or 14.4%, to $753.5 million when compared to the fourth quarter of 2020 fueled by growth in our litigation and multifamily loan portfolios. Our loan-to-deposit ratio was 76.3% as our low cost deposit base increased $224.4 million, or 27.9%, as compared to December 31, 2020.
The provision for loan losses was $555 thousand for the fourth quarter of 2021, a $1.0 million decrease from the same period in 2020. The decrease in the provision relates to a reduced pandemic related uncertainty and the reclassification of the NFL loan portfolio to loans held for sale in the third quarter 2021. As of December 31, 2021, Esquire had nonperforming loans held for investment of $6 thousand and an allowance to loans ratio of 1.16%.
Noninterest income increased $479 thousand, or 10.2%, to $5.2 million for the fourth quarter of 2021, as compared to the fourth quarter of 2020, driven by our payment processing platform. Payment processing volumes for the platform increased $1.9 billion, or 42.1%, to $6.3 billion for the quarter ended December 31, 2021, as compared to the same period in 2020, driven by expansion of our sales channels through ISOs, increased number of merchants, volume increases, and the reopening of the economy as pandemic restrictions continued to ease nationally. During the current quarter, our payment processing fee income began to stabilize as higher margin e-commerce volumes decreased, primarily due to the reopening of the economy as pandemic restrictions continued to ease and stabilize nationally.
Noninterest expense increased $1.0 million, or 13.1%, to $8.7 million for the fourth quarter of 2021, as compared to the same period in 2020. This increase was primarily driven by increases in employee compensation and benefits, data processing and travel and business relations, offset by a decrease in professional and consulting services. Employee compensation and benefits costs increased $1.1 million, or 25.5%, 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. Professional and consulting service costs decreased $277 thousand, or 32.7%, partially offsetting the increase in employee compensation and benefits as previously contracted consultants were hired, primarily in our technology development and digital marketing departments. Data processing costs increased $89 thousand, or 10.5%, 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 $77 thousand, as we re-engaged in our traditional high touch marketing and sales efforts to complement our digital marketing efforts.
The Company’s efficiency ratio was 51.9% for the three months ended December 31, 2021, as compared to 53.1% in 2020. This decrease is a result of growth in our total revenue with a focus on our national platforms. These national platforms have benefited from our investments in technology, digital marketing, employees, and infrastructure.
The effective tax rate was 11.0% for the fourth quarter of 2021, as compared to 26.5% for the same period in 2020, due to certain discrete tax benefits totaling approximately $1.2 million related to share-based compensation recognized in the fourth quarter of 2021, specifically, voluntary stock option exercises.
Full Year Earnings
Net income for the year ended December 31, 2021 was $17.9 million, or $2.26 per diluted share, compared to $12.6 million, or $1.65 per diluted share for the same period in 2020. Returns on average assets and common equity for the year ended December 31, 2021 were 1.77% and 13.42%, respectively, compared to 1.45% and 10.69% for the same period of 2020.
Net interest income for the year ended 2021 increased $6.3 million, or 16.7%, to $43.7 million, due to growth in average interest earning assets totaling $134.9 million, or 16.1%, to $972.8 million when compared to the same period in 2020. Our net interest margin increased 2 basis points to 4.49% for the year ended 2021 compared to 4.47% for the same period in 2020, despite the sustained low interest rate environment. Average loans for the year increased $112.4 million, or 18.6%, to $717.7 million when compared to the same period in 2020 with growth in our higher yielding litigation loans and the multifamily portfolio.
2
The provision for loan losses was $7.0 million for the year ended 2021, a $705 thousand increase from the same period in 2020. In the third quarter of 2021, the Company reclassified its legacy NFL consumer post settlement loan portfolio totaling $23.6 million from held for investment to held for sale, which reduced our exposure and extended the portfolio’s duration. This change in accounting model to the lower of cost or market resulted in a $9.0 million charge-off, of which $3.0 million was recognized as a component of the third quarter provision for loan losses. The remaining 2021 provision relates to an increase in the general reserve attributable to loan growth in the current environment with a reduced level of pandemic related uncertainty.
Noninterest income increased $6.4 million, or 43.5%, to $21.0 million for the year ended 2021, as compared to the same period in 2020, driven by our payment processing platform. Payment processing volumes for this platform increased $8.8 billion, or 59.4%, to $23.7 billion for the year ended December 31, 2021, as compared to the same period in 2020, driven by expansion of our sales channels through ISOs, increased number of merchants, volume increases, and the fact that pandemic restrictions continued to ease and stabilize nationally throughout 2021.
Noninterest expense increased $6.4 million, or 22.3%, to $35.1 million for the year ended 2021, as compared to the same period in 2020. This increase was primarily driven by increases in employee compensation and benefits, advertising and marketing, data processing and occupancy and equipment costs. Employee compensation and benefits costs increased $4.9 million, or 28.9%, due to increases in staff and officer level employees to primarily support our growth, investment in digital platforms and related sales/marketing divisions, and the impact of salary, bonus and stock-based compensation increases. Advertising and marketing costs increased $590 thousand, as we purposefully enhanced our brand and sales channels through our new digital marketing efforts and thought leadership in our national verticals. We also re-engaged in our traditional high touch marketing and sales efforts to complement our digital marketing efforts. Data processing costs increased $551 thousand, or 17.7%, due to increased processing volume, primarily driven by our core banking platform, and additional costs related to our technology implementations. Occupancy and equipment costs increased $386 thousand, or 15.9%, primarily due to amortization of our investments in internally developed software to support our new digital platforms, precautionary office cleaning costs related to COVID-19 and additional office space to support our continued growth.
The Company’s efficiency ratio was 54.2% for the year ended December 31, 2021, as compared to 55.0% for the same period in 2020.
The effective tax rate decreased to 21.1% for the year ended 2021, as compared to 26.5% for the same period in 2020, due to certain discrete tax benefits totaling approximately $1.2 million related to share-based compensation recognized in the fourth quarter of 2021 as previously discussed.
Asset Quality
Nonperforming loans held for investment, totaling $6 thousand, consisted of several nonaccrual consumer loans. As of December 31, 2021, the allowance for loan losses was $9.1 million, or 1.16% of total loans, as compared to $11.4 million, or 1.70% of total loans at December 31, 2020. The decrease in the allowance as a percent of loans was primarily due to the charge-off of $9.0 million upon reclassification of the legacy NFL consumer post settlement loan portfolio from held for investment to held for sale during the third quarter of 2021. As a result, reserve for loan losses to total loans returned to approximately pre-pandemic levels.
In 2020, management implemented a customer payment deferral program (principal and interest) under the CARES Act to assist business borrowers and certain consumers that may have been experiencing financial hardship due to COVID-19 related challenges. As of December 31, 2021, there were no participants in our payment deferral program.
We are participating in the PPP administered by the SBA and have originated $45.5 million PPP loans to date. As of December 31, 2021, our outstanding PPP loan balance was $4.2 million as $41.3 million has been fully repaid by the SBA.
Balance Sheet
At December 31, 2021, total assets were $1.2 billion, reflecting a $242.1 million, or 25.8% increase from December 31, 2020. This increase is attributable to increases in loans held for investment totaling $112.1 million, or 16.7%, to $784.5 million, driven by litigation and multifamily loans, funded with low-cost deposits. In the third quarter of 2021, the Company reclassified its legacy consumer NFL loan portfolio totaling $23.6 million to loans held for sale, incurring a pretax charge totaling $3.4 million ($2.5 million net of tax), or $0.31 per diluted share. As of December 31, 2021, the fair value of these loans held for sale was approximately $14.1 million based on an independent third-party valuation. This accounting reclassification to held for sale is reflective of management’s intent to sell these assets to a fund in the near term. These loans held for sale totaling $14.1 million have been included in the other assets financial statement caption on the statement of financial condition. Excluding the effects of the NFL reclassification and net payoffs of our PPP loans totaling $25.9 million and $17.7 million in 2021, respectively, our loan growth would have been $155.7 million or 24.9% when comparing the year ended 2021 to 2020. Our available for sale securities portfolio increased $30.7 million, or 26.1%, to $148.4 million as compared to December 31, 2020.
3
The following table provides information regarding the composition of our loan portfolio for the periods presented:
| | At December 31, | | | At December 31, | | ||||||
| | 2021 | | | 2020 | | ||||||
| | (Dollars in thousands) | ||||||||||
Real estate: |
| |
|
|
|
| | |
|
|
|
|
1 – 4 family | | $ | 40,753 |
| 5.19 | % | | $ | 48,433 |
| 7.20 | % |
Multifamily | |
| 254,852 |
| 32.46 | | |
| 169,817 |
| 25.24 | |
Commercial real estate | |
| 48,589 |
| 6.19 | | |
| 54,717 |
| 8.13 | |
Construction | |
| — |
| — | | |
| — |
| — | |
Total real estate | |
| 344,194 |
| 43.84 | | |
| 272,967 |
| 40.57 | |
Commercial | |
| 432,108 |
| 55.05 | | |
| 358,410 |
| 53.28 | |
Consumer | |
| 8,681 |
| 1.11 | | |
| 41,362 |
| 6.15 | |
Total loans held for investment | | | 784,983 |
| 100.00 | % | | | 672,739 |
| 100.00 | % |
Deferred loan fees and unearned premiums, net | |
| (466) |
|
| | |
| (318) |
|
| |
Allowance for loan losses | |
| (9,076) |
|
| | |
| (11,402) |
|
| |
Loans held for investment, net | | $ | 775,441 |
|
| | | $ | 661,019 |
|
| |
| | | | | | | | | | | | |
Loans held for sale, net (included in Other assets) | | $ | 14,100 |
|
| | | $ | — |
|
| |
Total deposits were $1.0 billion as of December 31, 2021, a $224.4 million, or 27.9%, increase from December 31, 2020. This was primarily due to a $158.6 million, or 35.9%, increase in Savings, NOW and Money Market deposits to $599.7 million, a $57.7 million, or 16.4%, increase in noninterest bearing demand deposits to $409.4 million, and an $8.1 million, or 72.4%, increase in time deposits to $19.3 million. The increase in deposits was primarily driven by commercial and escrow low-cost deposits from our litigation and small business platforms. Off-balance sheet sweep funds totaled $537.5 million at quarter end. Our deposit growth and our off-balance sheet funds continue to demonstrate our strong liquidity position and the strength of our unique branchless and low-cost funding model.
Stockholders’ equity increased $17.7 million to $143.7 million as of December 31, 2021, compared to December 31, 2020. Esquire Bank remains well above bank regulatory “Well Capitalized” standards.
4
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; 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. Further, given its ongoing and dynamic nature, it is difficult to predict the full impact of the COVID-19 outbreak on our business. The extent of such impact will depend on future developments, which are highly uncertain, including when the coronavirus can be controlled and abated and when and how the economy may be reopened. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, we could be subject to any of the following risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations: the demand for our products and services may decline, making it difficult to grow assets and income; if the economy worsens, loan delinquencies, problem assets, and foreclosures may increase; collateral for loans, especially real estate, may decline in value; our allowance for loan losses may increase if borrowers experience financial difficulties; the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; and our cyber security risks are increased as the result of an increase in the number of employees working remotely. 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
5
ESQUIRE FINANCIAL HOLDINGS, INC.
Condensed Consolidated Statement of Condition (unaudited)
(dollars in thousands except per share data)
| | December 31, | | December 31, | | ||
|
| 2021 |
| 2020 |
| ||
ASSETS |
| |
|
| |
|
|
Cash and cash equivalents | | $ | 149,156 | | $ | 65,185 | |
Securities purchased under agreements to resell, at cost | |
| 50,271 | |
| 51,726 | |
Securities available for sale, at fair value | |
| 148,384 | |
| 117,655 | |
Securities, restricted at cost | |
| 2,680 | |
| 2,694 | |
Loans, held for investment | |
| 784,517 | |
| 672,421 | |
Less: allowance for loan losses | |
| (9,076) | |
| (11,402) | |
Loans, net of allowance | |
| 775,441 | |
| 661,019 | |
Premises and equipment, net | |
| 3,334 | |
| 3,017 | |
Other assets | |
| 49,504 | |
| 35,418 | |
Total Assets | | $ | 1,178,770 | | $ | 936,714 | |
| | | | | | | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |
|
| |
|
| |
Demand deposits | | $ | 409,350 | | $ | 351,692 | |
Savings, NOW and money market deposits | |
| 599,747 | |
| 441,160 | |
Certificates of deposit | |
| 19,312 | |
| 11,202 | |
Total deposits | |
| 1,028,409 | |
| 804,054 | |
Other liabilities | |
| 6,626 | |
| 6,584 | |
Total liabilities | |
| 1,035,035 | |
| 810,638 | |
Total stockholders' equity | |
| 143,735 | |
| 126,076 | |
Total Liabilities and Stockholders' Equity | | $ | 1,178,770 | | $ | 936,714 | |
| | | | | | | |
Selected Financial Data | |
|
| |
|
| |
Common shares outstanding | |
| 8,088,846 | |
| 7,793,482 | |
Book value per share | | $ | 17.77 | | $ | 16.18 | |
Equity to assets | |
| 12.19 | % |
| 13.46 | % |
| | | | | | | |
Capital Ratios (1) | |
|
| |
|
| |
Tier 1 leverage ratio | |
| 11.46 | % |
| 12.51 | % |
Common equity tier 1 capital ratio | |
| 14.79 | % |
| 15.44 | % |
Tier 1 capital ratio | |
| 14.79 | % |
| 15.44 | % |
Total capital ratio | |
| 15.89 | % |
| 16.69 | % |
| | | | | | | |
Asset Quality - loans held for investment | |
|
| |
|
| |
Loans 90 days past due and still accruing | | $ | — | | $ | — | |
Nonaccrual loans | | | 6 | | | 2,303 | |
Nonperforming loans | | $ | 6 | | $ | 2,303 | |
| | | | | | | |
Allowance for loan losses to total loans | |
| 1.16 | % |
| 1.70 | % |
Nonperforming loans to total loans | |
| 0.00 | % |
| 0.34 | % |
Nonperforming assets to total assets | |
| 0.00 | % |
| 0.25 | % |
Allowance to nonperforming loans | | | 157,180 | % | | 495 | % |
(1) Regulatory capital ratios presented on bank-only basis.
6
ESQUIRE FINANCIAL HOLDINGS, INC.
Condensed Consolidated Income Statement (unaudited)
(dollars in thousands except per share data)
| | Three months ended | | Year ended |
| ||||||||
| | December 31, | | December 31, |
| ||||||||
|
| 2021 |
| 2020 |
| 2021 |
| 2020 |
| ||||
Interest income | | $ | 11,930 | | $ | 10,094 | | $ | 44,531 | | $ | 38,630 | |
Interest expense | |
| 231 | |
| 213 | |
| 828 | |
| 1,190 | |
Net interest income | |
| 11,699 | |
| 9,881 | |
| 43,703 | |
| 37,440 | |
Provision for loan losses | |
| 555 | |
| 1,550 | |
| 6,955 | |
| 6,250 | |
Net interest income after provision for loan losses | |
| 11,144 | |
| 8,331 | |
| 36,748 | |
| 31,190 | |
| | | | | | | | | | | | | |
Noninterest income: | |
|
| |
|
| |
|
| |
|
| |
Payment processing fees | |
| 4,908 | |
| 4,572 | |
| 20,856 | |
| 14,099 | |
Other noninterest income | |
| 259 | |
| 116 | |
| 168 | |
| 548 | |
Total noninterest income | |
| 5,167 | |
| 4,688 | |
| 21,024 | |
| 14,647 | |
| | | | | | | | | | | | | |
Noninterest expense: | |
|
| |
|
| |
|
| |
|
| |
Employee compensation and benefits | |
| 5,552 | |
| 4,424 | |
| 21,741 | |
| 16,873 | |
Other expenses | |
| 3,197 | |
| 3,314 | |
| 13,323 | |
| 11,797 | |
Total noninterest expense | |
| 8,749 | |
| 7,738 | |
| 35,064 | |
| 28,670 | |
Income before income taxes | |
| 7,562 | |
| 5,281 | |
| 22,708 | |
| 17,167 | |
Income taxes | |
| 832 | |
| 1,399 | |
| 4,783 | |
| 4,549 | |
Net income | | $ | 6,730 | | $ | 3,882 | | $ | 17,925 | | $ | 12,618 | |
| | | | | | | | | | | | | |
Earnings Per Share | |
|
| |
|
| |
|
| |
|
| |
Basic | | $ | 0.89 | | $ | 0.52 | | $ | 2.40 | | $ | 1.70 | |
Diluted | | $ | 0.83 | | $ | 0.51 | | $ | 2.26 | | $ | 1.65 | |
Basic - adjusted (1) | | $ | 0.74 | | $ | 0.52 | | $ | 2.24 | | $ | 1.70 | |
Diluted - adjusted (1) | | $ | 0.69 | | $ | 0.51 | | $ | 2.11 | | $ | 1.65 | |
| | | | | | | | | | | | | |
Selected Financial Data | |
|
| |
|
| |
|
| |
|
| |
Return on average assets | |
| 2.44 | % |
| 1.70 | % |
| 1.77 | % |
| 1.45 | % |
Return on average equity | |
| 19.19 | % |
| 12.54 | % |
| 13.42 | % |
| 10.69 | % |
Adjusted return on average assets (1) | |
| 2.02 | % |
| 1.70 | % |
| 1.66 | % |
| 1.45 | % |
Adjusted return on average common equity (1) | |
| 15.85 | % |
| 12.54 | % |
| 12.54 | % |
| 10.69 | % |
Net interest margin | |
| 4.48 | % |
| 4.49 | % |
| 4.49 | % |
| 4.47 | % |
Efficiency ratio (2) | |
| 51.9 | % |
| 53.1 | % |
| 54.2 | % |
| 55.0 | % |
| (2) | Adjusted to exclude a discrete income tax benefit of $1.2 million related to share-based compensation recognized in the fourth quarter 2021. See non-GAAP reconciliation provided elsewhere herein. |
| (3) | Efficiency ratio represents noninterest expenses divided by the sum of net interest income plus noninterest income. |
7
ESQUIRE FINANCIAL HOLDINGS, INC.
Condensed Consolidated Average Balance Sheets and Average Yield/Cost (unaudited)
(dollars in thousands)
| | For the Three Months Ended December 31, |
| ||||||||||||||
| | 2021 | | 2020 |
| ||||||||||||
| | | | | | | | (Dollars in thousands) | | | | | | | |||
| | Average | |
| | | Average | | Average | |
| | | Average |
| ||
|
| Balance |
| Interest |
| Yield/Cost |
| Balance |
| Interest |
| Yield/Cost |
| ||||
INTEREST EARNING ASSETS |
| |
|
| |
|
|
|
| |
|
| |
|
|
| |
Loans, held for investment | | $ | 753,500 | | $ | 11,137 |
| 5.86 | % | $ | 658,855 | | $ | 9,533 |
| 5.76 | % |
Securities, includes restricted stock | |
| 142,677 | |
| 585 |
| 1.63 | % |
| 115,370 | |
| 423 |
| 1.46 | % |
Securities purchased under agreements to resell | |
| 50,482 | |
| 148 |
| 1.16 | % |
| 29,447 | |
| 94 |
| 1.27 | % |
Interest earning cash and other | |
| 90,244 | |
| 60 |
| 0.26 | % |
| 71,789 | |
| 44 |
| 0.24 | % |
Total interest earning assets | |
| 1,036,903 | |
| 11,930 |
| 4.56 | % |
| 875,461 | |
| 10,094 |
| 4.59 | % |
| | | | | | | | | | | | | | | | | |
NONINTEREST EARNING ASSETS | |
| 55,414 | |
|
|
|
| |
| 30,724 | |
|
|
|
| |
| | | | | | | | | | | | | | | | | |
TOTAL AVERAGE ASSETS | | $ | 1,092,317 | |
| | | | | $ | 906,185 | |
| | | | |
| | | | | | | | | | | | | | | | | |
INTEREST BEARING LIABILITIES | |
|
| |
|
|
|
| |
|
| |
|
|
|
| |
| | | | | | | | | | | | | | | | | |
Savings, NOW, Money Market deposits | | $ | 484,972 | | $ | 210 |
| 0.17 | % | $ | 407,186 | | $ | 191 |
| 0.19 | % |
Time deposits | |
| 11,314 | |
| 20 |
| 0.70 | % |
| 10,185 | |
| 21 |
| 0.82 | % |
Total interest bearing deposits | |
| 496,286 | |
| 230 |
| 0.18 | % |
| 417,371 | |
| 212 |
| 0.20 | % |
Borrowings | |
| 103 | |
| 1 |
| 3.85 | % |
| 137 | |
| 1 |
| 2.90 | % |
Total interest bearing liabilities | |
| 496,389 | |
| 231 |
| 0.18 | % | | 417,508 | |
| 213 |
| 0.20 | % |
| | | | | | | | | | | | | | | | | |
NONINTEREST BEARING LIABILITIES | |
|
| |
|
|
|
| |
|
| |
|
|
|
| |
Demand deposits | |
| 446,032 | |
|
|
|
| |
| 353,531 | |
|
|
|
| |
Other liabilities | |
| 10,778 | |
|
|
|
| |
| 11,985 | |
|
|
|
| |
Total noninterest bearing liabilities | |
| 456,810 | |
|
|
|
| |
| 365,516 | |
|
|
|
| |
Stockholders' equity | |
| 139,118 | |
|
|
|
| |
| 123,161 | |
|
|
|
| |
| | | | | | | | | | | | | | | | | |
TOTAL AVG. LIABILITIES AND EQUITY | | $ | 1,092,317 | |
|
|
|
| | $ | 906,185 | |
|
|
|
| |
Net interest income | |
|
| | $ | 11,699 |
| | |
|
| | $ | 9,881 |
| | |
Net interest spread | | | | | | | | 4.38 | % | | | | | | | 4.39 | % |
Net interest margin | |
|
| |
|
|
| 4.48 | % |
|
| |
|
|
| 4.49 | % |
8
ESQUIRE FINANCIAL HOLDINGS, INC.
Condensed Consolidated Average Balance Sheets and Average Yield/Cost (unaudited)
(dollars in thousands)
| | For the Year Ended December 31, |
| ||||||||||||||
| | 2021 | | 2020 |
| ||||||||||||
| | | | | | | | (Dollars in thousands) | | | | | | | |||
| | Average | |
| | | Average | | Average | |
| | | Average |
| ||
|
| Balance |
| Interest |
| Yield/Cost |
| Balance |
| Interest |
| Yield/Cost |
| ||||
INTEREST EARNING ASSETS |
| |
|
| |
|
|
|
| |
|
| |
|
|
| |
Loans, held for investment | | $ | 717,680 | | $ | 41,545 |
| 5.79 | % | $ | 605,273 | | $ | 35,588 |
| 5.88 | % |
Securities, includes restricted stock | |
| 133,958 | |
| 2,174 |
| 1.62 | % |
| 126,166 | |
| 2,556 |
| 2.03 | % |
Securities purchased under agreements to resell | |
| 51,008 | |
| 619 |
| 1.21 | % |
| 7,402 | |
| 94 |
| 1.27 | % |
Interest earning cash and other | |
| 70,132 | |
| 193 |
| 0.28 | % |
| 99,069 | |
| 392 |
| 0.40 | % |
Total interest earning assets | |
| 972,778 | |
| 44,531 |
| 4.58 | % |
| 837,910 | |
| 38,630 |
| 4.61 | % |
| | | | | | | | | | | | | | | | | |
NONINTEREST EARNING ASSETS | |
| 37,941 | |
|
|
|
| |
| 30,028 | |
|
|
|
| |
| | | | | | | | | | | | | | | | | |
TOTAL AVERAGE ASSETS | | $ | 1,010,719 | |
| | | | | $ | 867,938 | |
| | | | |
| | | | | | | | | | | | | | | | | |
INTEREST BEARING LIABILITIES | |
|
| |
|
|
|
| |
|
| |
|
|
|
| |
| | | | | | | | | | | | | | | | | |
Savings, NOW, Money Market deposits | | $ | 439,718 | | $ | 746 |
| 0.17 | % | $ | 421,530 | | $ | 888 |
| 0.21 | % |
Time deposits | |
| 11,152 | |
| 79 |
| 0.71 | % |
| 16,785 | |
| 297 |
| 1.77 | % |
Total interest bearing deposits | |
| 450,870 | |
| 825 |
| 0.18 | % |
| 438,315 | |
| 1,185 |
| 0.27 | % |
Borrowings | |
| 78 | |
| 3 |
| 3.85 | % |
| 113 | |
| 5 |
| 4.42 | % |
Total interest bearing liabilities | |
| 450,948 | |
| 828 |
| 0.18 | % | | 438,428 | |
| 1,190 |
| 0.27 | % |
| | | | | | | | | | | | | | | | | |
NONINTEREST BEARING LIABILITIES | |
|
| |
|
|
|
| |
|
| |
|
|
|
| |
Demand deposits | |
| 415,662 | |
|
|
|
| |
| 301,359 | |
|
|
|
| |
Other liabilities | |
| 10,491 | |
|
|
|
| |
| 10,066 | |
|
|
|
| |
Total noninterest bearing liabilities | |
| 426,153 | |
|
|
|
| |
| 311,425 | |
|
|
|
| |
Stockholders' equity | |
| 133,618 | |
|
|
|
| |
| 118,085 | |
|
|
|
| |
| | | | | | | | | | | | | | | | | |
TOTAL AVG. LIABILITIES AND EQUITY | | $ | 1,010,719 | |
|
|
|
| | $ | 867,938 | |
|
|
|
| |
Net interest income | |
|
| | $ | 43,703 |
| | |
|
| | $ | 37,440 |
| | |
Net interest spread | | | | | | | | 4.40 | % | | | | | | | 4.34 | % |
Net interest margin | |
|
| |
|
|
| 4.49 | % |
|
| |
|
|
| 4.47 | % |
9
ESQUIRE FINANCIAL HOLDINGS, INC.
Condensed Consolidated Non-GAAP Financial Measure Reconciliation (unaudited)
(all dollars in thousands except per share data)
Adjusted net income, which is used to compute adjusted return on average assets, adjusted return on average common equity and adjusted earnings per common share, excludes a discrete income tax benefit related to share-based compensation, specifically, voluntary stock option exercises.
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.
| | Three months ended | | | Year ended | | ||||||
| | December 31, | | | December 31, | | ||||||
| 2021 | | 2020 | | 2021 | | 2020 | | ||||
Net income - GAAP | $ | 6,730 | | $ | 3,882 | | $ | 17,925 | | $ | 12,618 | |
Less: tax benefit on share-based compensation | | 1,172 | | | — | | | 1,172 | | | — | |
Adjusted net income | $ | 5,558 | | $ | 3,882 | | $ | 16,753 | | $ | 12,618 | |
| | | | | | | | | | | | |
Return on average assets – GAAP | | 2.44 | % | | 1.70 | % | | 1.77 | % | | 1.45 | % |
Adjusted return on average assets | | 2.02 | % | | 1.70 | % | | 1.66 | % | | 1.45 | % |
| | | | | | | | | | | | |
Return on average common equity – GAAP | | 19.19 | % | | 12.54 | % | | 13.42 | % | | 10.69 | % |
Adjusted return on average common equity | | 15.85 | % | | 12.54 | % | | 12.54 | % | | 10.69 | % |
| | | | | | | | | | | | |
Basic earnings per share – GAAP | $ | 0.89 | | $ | 0.52 | | $ | 2.40 | | $ | 1.70 | |
Adjusted basic earnings per share | $ | 0.74 | | $ | 0.52 | | $ | 2.24 | | $ | 1.70 | |
| | | | | | | | | | | | |
Diluted earnings per share – GAAP | $ | 0.83 | | $ | 0.51 | | $ | 2.26 | | $ | 1.65 | |
Adjusted diluted earnings per share | $ | 0.69 | | $ | 0.51 | | $ | 2.11 | | $ | 1.65 | |
10
Exhibit 99.2
| Ensuring our Clients and Our Institution Succeed Boldly Listed as ESQ Esquire Financial Holdings, Inc. (Financial Holding Company for Esquire Bank, N.A.) 4Q 2021 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 boldly with innovative 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. 7.0% Branchless stable core DDA and escrow deposits funded at 0.10% 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 65,000+ merchants nationally Fee income represents 33% of total revenue Strong growth and stable payment processing fee income with a CAGR of 58% since 2017 AverageROA and ROTCE of 1.77% and 13.42%, respectively Industry leading NIM of 4.49% Diversified revenue stream with strong NIM and stable fee income Strong efficiency ratio of 54.2% while investing in unique 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 verticals Nationwide Branchless Litigation & Payment Processing Verticals Generating Industry Leading Returns Litigation Vertical Commercial Banking Nationally Industry Leading Returns Fueled by Our Unique Branchless National Verticals Payment Processing Vertical (Merchant Services) Small Business Banking Nationally Technology –the Future A 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 loans Stable low-cost deposit model Equity to Assets of 12.19% 5 at December 31, 2021 |
| Stable low-cost deposit model Strong commercial deposits franchise DDA and escrow-based NOW accounts represent 40% and 38% of total deposits at December 31, 2021, respectively Higher yielding variable rate commercial loans anchored by our litigation (attorney related) portfolio How Esquire Succeeds Boldly 6 Industry Leading Net Interest Margin *Included noninterest bearing demand deposits (“DDA”) |
| Strong Revenue Growth How Esquire Succeeds Boldly 7 Key Highlights Strong net interest margin Stable payment processing fee income Net interest incomeOther noninterest income Payment processing income |
| Financial Highlights How Esquire Succeeds Boldly Key Highlights Industry leading returns from our unique national business models Stable payment processing fee income –noninterest income totaled 33% of revenue for the year ended December 31, 2021 Branchless low-cost deposits with a cost of funds of 0.10% at December 31, 2021 * Book value per share and equity to assets are $17.77 and 12.19% at December 31, 2021, respectively Raymond James’ #1 Top Performing Community Bank (2020, 2019) Piper Sandler & Co.’s “2021 FSG Top Ideas” 8 at December 31, 2021 *Included noninterest bearing demand deposits (“DDA”) |
| Financial Highlights, cont’d How Esquire Succeeds Boldly 9 at December 31, 2021 *EPS –Diluted Earnings Per Share |
| Loan Portfolio Diversification with Focused Growth Focused growth in higher yielding commercial loans with strong credit metrics Selective multifamily loan growth with strong historical performance in the NY metro market How Esquire Succeeds Boldly 10 at December 31, 2021 |
| Approximately 55% of our loan portfolio is variable rate of which 92% have interest rate floor protection at December 31, 2021 Asset sensitive –estimated sensitivity of projected annualized net interest income (“NII”) up 100 and 200 basis point rate scenarios increases projected NII by 9.6% and 19.5%, respectively at September 30, 2021 Loan Portfolio Diversification with Focused Growth How Esquire Succeeds Boldly 11 |
| Solid Credit Metrics, Asset Quality and ALLL Coverage How Esquire Succeeds Boldly 12 at December 31, 2021 *ALLL –Allowance for loan and lease losses Note –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 $538 million Deposit 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 69% and 14% of total deposits at December 31, 2021, respectively Off-balance sheet commercial litigation funds (“sweeps”) total $538 million at December 31, 2021, representing an additional source of funding Commercial customers utilize our corporate cash management suite, including remote deposit capture (“RDC”) while leveraging our mobile banking application for personal banking, creating a highly efficient branchless platform How Esquire Succeeds Boldly 13 |
| Large national markets primed for disruption: $429 billion & 100,000+ firms in the litigation vertical and $7.6 trillion and 10+ million merchants in the payment processing vertical Key Takeaways Why Esquire is Set to Succeed Boldly Tremendous untapped potential: Esquire’s current market share is a fraction of both national verticals We are thought leaders in the litigation vertical and provide C-suite access for ISO flexibility in payment processing vertical Differentiated and positioned for growth: With industry leading tailored products and state-of-the-art technology geared towards effective client acquisition 14 |
| National Markets Litigation & 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 7.0% Funded with low-cost litigation deposits Litigation deposits to litigation loans drawn is approximately 186% How Esquire Succeeds Boldly 16 |
| Payment Processing –Current ISO Model How Esquire Succeeds Boldly What 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 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 Treasury Function for Merchant Clearing Maintaining and Monitor ISO and Merchant Reserves (DDA) 17 |
| Currently servicing 65,000+ merchants across 50 states Noninterest income, primarily payment processing fees, represents 33% of total revenue, at December 31, 2021 How Esquire Succeeds Boldly *Payment processing CAGR is 58% 18 Strong Growth in Stable Noninterest Income at December 31, 2021 |
| How Esquire Succeeds Boldly Key Highlights Strong and stable DDA reserves Protection from merchant chargebacks and returns 19 Protecting Our Company with Strong Payment Processing Reserves at December 31, 2021 |
| Technology Driving Bold Success Client Centric Technology A Key Driver for Future Growth Website Artificial Intelligence* Marketing Sales Underwriting Onboarding Marketing Cloud AI to facilitate precision marketing and exponential customer acquisition across all verticals Website analytics, data enrichment and thought leadership content marketing Precision marketing –right offer right time Sales enablement, pipeline management and forecasting Underwriting efficiency & risk management / cash management and mobile banking / online applications Customer 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 SIGNATURE * Deployment of AI technologies applicable only to sales and marketing processes and not used as a decisioning tool for loan underwriting processes. 20 |
| Succeeding Boldly Listed as ESQ Contact Information: Eric S. Bader Executive Vice President & Chief Operating Officer 516-535-2002 eric.bader@esqbank.com |
| Commercial Real Estate Loans, U.S. Litigation & Payment Markets Appendix |
| Esquire’s Bold Opportunities New 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 Advantage Esquire’s Bold Opportunities U.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 Record Extensive Litigation Experience In-House Deep Relationships with Respected Firms Nationally Daily Resources and Research Cash Flow Lending Coupled with Borrowing Base or Asset Based Approach Tailoring 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 |
| 25 Digitally Transforming The Business of Law Aligning Law Firm Case Inventory Lifecycle to Customer Retention Client Incident Receive Intake Case Management Settlement/ Verdict Disbursement $ 1-3 Years (+) Products Case Cost Loans Working Capital and Term Loans Qualified Settlement Loans (“QSF”) Escrow Banking 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 Assets and Content 25 |
| The payments industry grew nearly 3% from 2019 to 2020 to an estimated total payment volume of $7.6 trillion Esquire’s Bold Opportunities Payment Volume Trends – A Significant Growth Opportunity Sources:CompanyFinancialRecords,Note: PayPalfiguresrepresent PayPal’sestimated U.S.percent shareof“TotalPaymentVolume”(TPV).PayPalvolumeincludesvolumefromabankaccount,aPayPal accountbalance,aPayPalCredit account,acreditordebit cardorotherstored valueproductssuchascouponsandgiftcards.Assuch,someofthisvolumemaybeincludedinothernetworks aswell. PayPal’sclassificationinthepaymentsindustryecosystemisvaried/debatedasitperforms functionsattributedtoapaymentnetwork,anissuer,acquirer,etc.,and its financialreportingdoesnotdirectly alignwithotherpaymentnetworkreportingstructures andmethods.DiscovervolumeincludesDiscoverNetworkandPulseNetworktransactions. 2018-2019: +10.3% CAGR2019-2020: +2.9% CAGR 26 at December 31, 2020 ($ in billions) |
