Esquire Financial (ESQ) - 2024 Q4 - Annual Report

Financial Performance - Total assets increased to $1,892,503 thousand as of December 31, 2024, up from$ 1,616,876 thousand in 2023, representing a growth of approximately 17%[356]. - Loans held for investment rose to $1,397,021 thousand in 2024, compared to$ 1,207,413 thousand in 2023, indicating an increase of about 15.7%[356]. - Total deposits grew to $1,642,236 thousand in 2024, up from$ 1,407,299 thousand in 2023, marking an increase of around 16.7%[356]. - Stockholders' equity reached $237,094 thousand in 2024, compared to$ 198,555 thousand in 2023, which is an increase of about 19.4%[356]. - Net income for 2024 was $43,658 thousand, up 6.5% from$ 41,011 thousand in 2023[359]. - Total interest income for 2024 reached $113,373 thousand, a 23.2% increase from$ 91,888 thousand in 2023[358]. - Net interest income after provision for credit losses increased to $95,229 thousand in 2024, compared to$ 79,248 thousand in 2023, reflecting a 20.2% growth[358]. - Total noninterest income decreased to $24,895 thousand in 2024, down 16.5% from$ 29,751 thousand in 2023[358]. - Total noninterest expense rose to $60,843 thousand in 2024, an increase of 14.6% from$ 53,117 thousand in 2023[358]. - Earnings per share (EPS) for 2024 was $5.58, compared to$ 5.31 in 2023, representing a 5.1% increase[358]. - The company declared cash dividends of $0.60 per share for 2024, up from$ 0.475 per share in 2023[361]. Credit Quality and Risk Management - The allowance for credit losses increased to $20,979 thousand in 2024 from$ 16,631 thousand in 2023, reflecting a rise of approximately 26.5%[356]. - Provision for credit losses was $4,700 thousand in 2024, compared to$ 4,525 thousand in 2023, indicating a 3.9% increase[358]. - The total past due loans amounted to $10,942 million as of December 31, 2024, compared to$ 11,074 million in 2023, showing a decrease of approximately 1.2%[424]. - The company continues to monitor credit quality indicators and categorize loans based on borrowers' ability to service their debt, ensuring proactive management of credit risk[425]. - The company evaluates its loan pooling methodology at least annually, focusing on segments such as Commercial, Consumer, Multifamily, and Commercial Real Estate[386][387][388][389]. Loan Portfolio Composition - The commercial real estate loan portfolio comprises $355.2 million, or 25.4%, and the commercial real estate (CRE) loan portfolio totals$ 87.0 million, or 6.2% of total loans as of December 31, 2024[74]. - The multifamily portfolio has a current weighted average debt service coverage ratio (DSCR) of approximately 1.64 and an original loan-to-value (LTV) ratio of 54%[79]. - Multifamily loans maturing in 2025 total $59.5 million with a current weighted average DSCR of approximately 1.34 and an original LTV of 57%[79]. - The commercial loan segment saw a significant increase, with total commercial loans reaching$ 920,567 million in 2024, up from $737,914 million in 2023, marking an increase of about 24.7%[423]. - The consumer loan segment also grew, with total consumer loans increasing to$ 19,339 million in 2024 from $14,491 million in 2023, reflecting a growth of approximately 33.5%[423]. - The multifamily loan category remained stable, with a slight increase to$ 355,165 million in 2024 from $348,241 million in 2023, representing a growth of about 2.6%[423]. - The commercial real estate loans decreased slightly to$ 87,038 million in 2024 from $89,498 million in 2023, indicating a decline of approximately 2.8%[423]. Regulatory Compliance and Governance - The company is subject to extensive regulation and supervision by the OCC and the FRB, ensuring compliance with federal laws and regulations[86]. - Esquire Bank is subject to federal anti-money laundering and anti-terrorist financing laws, including the Bank Secrecy Act and the USA PATRIOT Act[114]. - The SEC requires registrants to report material cybersecurity incidents on Form 8-K and disclose cybersecurity policies in Forms 10-K and 10-Q[120]. - The Company is required to obtain prior approval from the FRB to acquire more than 5% of a class of voting securities of any additional bank or bank holding company[127]. - The Company has not elected to utilize the community bank leverage ratio alternative framework as of December 31, 2024[99]. Employee and Community Engagement - The company employed 138 full-time equivalent individuals, with approximately 60% being minorities or women[81]. - The company encourages employee development through on-the-job training and internal promotions[82]. - The company’s benefits package includes health care coverage, retirement benefits, and paid time off[83]. - The company supports community-based organizations through a comprehensive grant and lending program as part of its Community Reinvestment Act obligations[84]. - Esquire Bank was rated "outstanding" in its Community Reinvestment Act compliance during its most recent OCC evaluation[112]. Capital Management - The company maintains a capital conservation buffer of 2.5% of common equity Tier 1 capital to risk-weighted assets above the minimum requirements[98]. - The company was well capitalized under the prompt corrective action requirements at December 31, 2024, with a common equity Tier 1 risk-based capital ratio of 6.5%[103]. - The company has the ability to borrow a total of$ 431,700 million from the FHLB of New York as of December 31, 2024, compared to $284,247 million in 2023, representing a significant increase of 51.9%[439]. - The Inflation Reduction Act introduced a 1% excise tax on stock repurchases, effective January 1, 2023, which may affect the company's capital management strategies[135]. Accounting and Financial Reporting - The company adopted a new credit loss accounting standard effective January 1, 2023, impacting the methodology for estimating credit losses[344]. - The company maintained effective internal control over financial reporting as of December 31, 2024, according to the independent auditor's opinion[343]. - The Company adopted ASU 2023-07 in 2024, enhancing segment reporting disclosures without material effect on consolidated financial statements[414]. - The Company is evaluating the impact of ASU 2023-09 on income tax disclosures, effective for fiscal years beginning after December 15, 2024[415]. Investment and Securities - The investment portfolio had a fair value of$ 302.7 million, consisting of U.S. Government Agency collateralized mortgage obligations and mortgage-backed securities[76]. - As of December 31, 2024, total available-for-sale securities amounted to $241,746 million, with unrealized losses of$ 19,976 million[416]. - The total held-to-maturity securities value was $60,931 million as of December 31, 2024, with unrealized losses of$ 7,729 million[416]. - The Company reported no allowance for credit losses on available-for-sale securities as of December 31, 2024, due to high credit quality[420]. - The Company had no outstanding FHLB advances as of December 31, 2024[417].