On this page of StockholderLetter.com we present the latest annual shareholder letter from Esquire Financial Holdings, Inc. — ticker symbol ESQ. Reading current and past ESQ letters to shareholders can bring important insights into the investment thesis.

 •  4/30/2025 Letter Continued (Full PDF)
 •  4/14/2023 ESQ Stockholder Letter
 •  4/18/2024 ESQ Stockholder Letter
 •  More "Banking & Savings" Category Stockholder Letters
 •  ESQ Benford's Law Stock Score = 92

ESQ Shareholder/Stockholder Letter Transcript:

Esquire Financial Holdings
2024 ANNUAL REPORT

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    nancial 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    nancial and payment processing solutions
to the litigation community and their clients as well as dynamic and
   exible payment processing solutions to small-business owners.
For more information, visit www.esquirebank.com.

TO OUR VALUED STAKEHOLDERS,
In 2024, Esquire   s steadfast strategic vision on building
a client-centric and tech-focused Company that is
Review of 2024
disruptive to the complex and fragmented national busi-
Since our current growth and performance metrics are
nesses we serve has once again generated industry
included in this Annual Report, we wanted to focus on
leading returns and performance metrics, creating value
several notable items that clearly demonstrate our con-
for all stakeholders well beyond our financial sector peers.
sistent growth and financial performance in the current
We remain focused on serving two vast, disruption-
year as well as over the past five years (compounded
ready national markets, the $443 billion litigation and
annual growth rates or    CAGR   ):
$11 trillion small business payment processing
Diluted earnings per share was $5.14 with a CAGR of
verticals. This is bolstered by tailored tech-enabled finan-
33%, generating industry leading returns on average
cial solutions and data that supports our clients    unique
assets and equity of 2.57% and 20.14%, respectively,
business and growth objectives. Despite our notable
while maintaining excess capital levels with common
growth and performance over the past several years,
equity tier 1 (   CET1   ) and tangible common equity to
Esquire has captured only a small segment of both national
tangible asset (   TCE/TA   ) ratios of 14.67% and 12.53%,
markets, positioning the Company for continued growth
respectively.
opportunities (commensurate to prior years) in these
underserved national markets during 2025 and beyond.
Strong deposit growth totaling $235 million, or 17%,
to $1.64 billion, with a CAGR of 20% and primarily
As a testament to our consistent growth and industry
comprised of low-cost commercial relationship depos-
leading performance, accolades from the leaders in
its funded at 0.91% (including demand deposits),
the business community during 2024 include:
generated from our highly efficient tech-enabled
Included on the    2024 Fortune 100 Fastest-Growing
commercial cash management platform nationally. In
Companies    list (one of only four banks) based on
addition, off-balance sheet sweep funds increased
revenue growth, earnings per share growth and three-
$276 million, or 99%, to $554 million enhancing our
year annualized return to shareholders for the period
additional available liquidity to $907 million, excluding
ending June 30, 2024.
cash and unsecured borrowing capacity.
Recognized as a    Best-Performing U.S. Community
Significant loan growth totaling $190 million, or 16%
Bank of 2024    by S&P Global Market Intelligence
annualized, to $1.4 billion, with a CAGR of 20%, despite
based on key financial metrics including returns,
management tempering multifamily and commercial
growth, and funding, while placing a premium on
real estate loan growth in response to the economic
balance sheet strength and risk profile. The rankings
environment. Higher yielding variable rate commercial
provide insight into banks that have demonstrated
loan growth from our national platforms totaled
resilience and strong performance in a dynamic
$183 million, or 25%, while commercial litigation related
financial environment.
loans grew $223 million, or 37%, nationally and rep-
Named to the 2024 Keefe, Bruyette & Woods    (   KBW   )
resent 60% of total loans at year end. These commercial
Bank Honor Roll. This elite group of banks comprises
loans have and will continue to create additional oppor-
only 5% of the eligible firms nationally by delivering the
tunities for future core deposit growth through our full
strongest and most consistent earnings growth over the
service commercial relationship and tech-enabled cash
past decade while commanding premium valuations.
management platform.
ESQUIRE FINANCIAL HOLDINGS, INC.
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Solid credit metrics, asset quality, and reserve
Our current client base represents a small fraction of
coverage ratios with an allowance for credit losses
the estimated 50,000+ contingent fee law firms in the
to loans ratio of 1.50% and a nonperforming loan
U.S., a complex and fragmented market that creates
to total assets ratio of 0.58%, represented by one
significant business opportunities for Esquire. We cur-
multifamily loan totaling $10.9 million.
rently have lending clients in 31 states with New York,
Continued expansion of our total revenue base to
California, Texas, Pennsylvania, and Florida represent-
$125 million, with a CAGR of 24%, fueled by an industry
ing 71% of our law firm loan portfolio. Our success is
leading net interest margin of 6.06% and stable fee-
tied to our unique ability to couple traditional com-
based income (led by our payment processing platform)
mercial underwriting with non-traditional contingent
totaling $25 million, or 20% of total revenue.
inventory or asset-based underwriting. Typically, these
Maintaining a strong efficiency ratio of 48.7%,
not withstanding our continuous investment in
resources (technology and people) to support future
growth and excellence in client service.
inventories of claims for injured consumers have a
duration of 2-3 years, significantly longer than traditional accounts receivables or inventories of goods.
These industry factors (the unique nature of contingent
fee law f irms, their collateral and long-duration
With industry leading performance over the last several
contingent inventory, and atypical revenue streams)
years as well as a fortified balance sheet and strong
coupled with the TAM create a unique and valuable
risk management as a foundation, we believe Esquire
opportunity for a tech-enabled disruptor bank. This
is well positioned for sustained growth in these
unique risk profile translates into a blended 9.36%
underserved national markets for the foreseeable future.
variable rate asset yield funded with core-deposits
with a blended cost of 0.91%. More importantly, for
Litigation Market
The litigation market represents a complex, fragmented,
and significant underserved market with U.S. tort actions
estimated to consume 2.1% of U.S. GDP annually or
$443 billion (the total addressable market or    TAM   ).
Esquire does not compete with the primary funders/
lenders in this market (non-bank finance companies)
and believes there are significant barriers to entry including
every $1.00 we advance on these lending facilities
we receive on average $1.44 of low-cost core operating
and escrow funds (excluding $554 million of off-balance
sheet escrow funds), fueling and funding other interest
earning asset growth. Our extremely low historic
delinquency rates and low charge-off rates clearly
demonstrate our strong underwriting process and
expertise in this vertical.
our clear industry track record for almost two decades,
We continually invest in current resources that will fuel
national brand awareness as an industry leader, exten-
future growth and excellence in client service on our
sive in-house management and board experience, deep
tech-enabled litigation platform:
relationships with well-respected law firms nationally,
Continue to leverage our regional business development
and solution based products and services tailored to
officers or BDOs (supported by hires in commercial
commercial law firms    needs and wants. We live and breathe
lending, risk, and operations) located in key markets
this market on a daily basis making us thought leaders for
throughout the U.S. These BDOs are supported by
industry content and tech-enabled financial solutions for
our best-in-class technology stack including, but not
these firms and the litigation industry as a whole.
limited to: our proprietary CRM system, digital
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ESQUIRE FINANCIAL HOLDINGS, INC.

marketing cloud and lending based technology built
relationships is approximately 20% per year. This fact
on Salesforce, supporting client relationships and lead
clearly demonstrates that our focus on deeply serving
acquisition initiatives; account-based digital marketing
the needs of contingency fee law firms while driving
(or    ABM   ) with significant thought leadership content;
tech-enabled products, services, and thought leader-
and artificial intelligence (or    AI   ) for advanced data
ship supports our client   s unique business and growth
analytics across our platform and to power person-
objectives, while also strengthening Esquire   s organic
alized and real-time ABM content to both current
balance sheet growth from existing clients.
clients and prospective clients.
Opening our Los Angeles (Beverly Hills), California
Private Banking Branch in the summer of 2025. This
market has historically been one of our top national
markets and will play a pivotal role in our continued
growth and success in the future.
Commencing our recently announced sourcing joint
venture agreement through which funds managed
Payment Processing Market
The payment processing (merchant acquiring) market
has also been a source of growth for our Company, as
we offer focused and tailored products and services
to small businesses nationally. The payment industry
grew 6% from 2022 to 2023, with a TAM of $11 trillion
and less than 100 acquiring financial institutions sup-
by affiliates of Fortress Investment Group (   Fortress   )
porting these small businesses in the U.S. We believe
will provide capital to expand lending solutions and
there are various barriers to this market including, but
banking services to contingency fee law firms, enhanc-
not limited to, our clear industry track record for more
ing borrowing options to law firms and offering access
than a decade with no losses, extensive in-house expe-
to customized credit facilities with industry leading
rience, deep relationships with non-bank acquirers, and
terms, rates, and flexibility. The Fortress agreement
our unique approach to servicing these small business
will also provide additional flexibility for law firms   
merchants and their respective verticals. We use pro-
advance rates against their contingent collateral.
prietary and industry leading technology to ensure card
Significant enhancement to our litigation payment
brand and regulatory compliance, support multiple
platform supporting and servicing case cost financing
processing platforms, manage daily risk across approx-
loans, a unique and key lending product for law firms
imately 88,000 small business merchants in all 50 states,
nationally. This technology will allow law firms to
and perform commercial treasury clearing services for
self-service their case costs for each claimant/case,
approximately $36 billion in debit and credit card pro-
track those costs, and pass through the interest
cessing volume across 604 million transactions in 2024.
charged on these facilities to the final settlement while
connecting via API to their case cost and accounting
software, thereby integrating the law firm   s back-office
technology with Esquire   s customized tech-enabled
commercial banking platform.
We are a technology-enabled financial institution, supporting multiple card brands, payment platforms, numerous issuing banks, and small businesses nationally for
millions of consumer and business payments every day.
These factors and more generated $21 million in stable
Based on our internal historical analysis of contingent
and consistent fee based income and representing
law firm clients, the 5-year CAGR for our litigation related
approximately 90% of total noninterest income with a
commercial loans and commercial depositor y
CAGR of 14% over the past 5 years.
ESQUIRE FINANCIAL HOLDINGS, INC.
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 4/30/2025 Letter Continued (Full PDF)