Esquire Financial (ESQ) - 2025 Q1 - Quarterly Results

Financial Performance - Net income for Q1 2025 increased 13% to $11.4 million, or$ 1.33 per diluted share, compared to $10.1 million, or$ 1.20 per diluted share in Q1 2024[1] - For the three months ended March 31, 2025, net income was $11,407,000, a decrease of 2.94% from$ 11,753,000 in the previous quarter and an increase of 13.43% from $10,058,000 in the same quarter last year[29] - Net interest income after provision for credit losses was$ 26,109,000, up 3.66% from $25,186,000 in the previous quarter and up 19.93% from$ 21,863,000 year-over-year[29] - Total noninterest income was $6,151,000, slightly down from$ 6,169,000 in the previous quarter and down from $6,389,000 year-over-year[29] - The return on average assets was 2.39%, down from 2.49% in the previous quarter and 2.59% year-over-year[29] - The return on average equity was 19.13%, down from 19.99% in the previous quarter and 20.14% year-over-year[29] Revenue and Growth - Net interest margin expanded to 5.96%, a 9 basis points increase on a linked quarter basis, contributing to a total revenue increase of$ 4.5 million, or 15%, to $33.8 million[1] - Loan growth on a linked quarter basis was$ 18.8 million, or 5% annualized, totaling $1.42 billion, with significant average loan growth of$ 79.2 million, or 24% annualized[1] - Core deposit growth totaled $45.9 million, or 11% annualized, reaching$ 1.69 billion, with total deposits increasing by $254.1 million, or 18% year-over-year[1] - Total assets increased by$ 300.2 million, or 18.1%, to $1.95 billion as of March 31, 2025, compared to the previous year[15] - Loans totaled$ 1.42 billion, reflecting a growth of $187.6 million, or 15.3%, with variable rate commercial loans increasing by$ 179.9 million, or 23.8%[15] - Total deposits reached $1.69 billion, a$ 254.1 million, or 17.7%, increase from March 31, 2024, driven by a $211.7 million, or 22.4%, rise in Savings, NOW, and Money Market deposits[17] Expenses and Efficiency - Noninterest expense increased by$ 2.2 million, or 15%, to $16.7 million, primarily due to increases in employee compensation and benefits[10] - The efficiency ratio was 49.6% for Q1 2025, slightly improved from 49.8% in the prior year, despite ongoing investments in growth and risk management[12] - The efficiency ratio improved to 49.6% from 47.5% in the previous quarter, indicating better cost management[29] Capital and Equity - Stockholders' equity rose by$ 43.6 million to $250.7 million as of March 31, 2025, primarily due to net increases in retained earnings[20] - The company maintains a Tier 1 capital ratio of 15.24% and remains well above regulatory "Well Capitalized" standards[21] - The common equity tier 1 capital ratio was 15.24%, reflecting a strong capital position[33] - Adjusted tangible common equity to tangible assets ratio was 12.59%, indicating solid asset management[33] Credit Quality - The provision for credit losses was$ 1.5 million, a $500 thousand increase from Q1 2024, with an allowance for credit losses to loans ratio of 1.37%[8] - Nonperforming loans decreased to$ 8.0 million, down from $10.9 million a year earlier, resulting in a nonperforming loans to total loans ratio of 0.57%[27] Dividends and Shareholder Returns - The company announced a 17% increase in quarterly cash dividends to$ 0.175 per share, marking the fourth consecutive increase since initiating dividends in 2022[5] - Cash dividends paid per common share increased to $0.175 from$ 0.150 in the previous quarter and the same quarter last year[29] Strategic Initiatives - A sourcing joint venture agreement with Fortress Investment Group was announced to expand lending solutions for contingency fee law firms, enhancing borrowing options[5] Liquidity and Securities - The available-for-sale securities portfolio increased by $94.8 million to$ 236.9 million compared to March 31, 2024[15] - The total securities to assets ratio improved to 16% as of March 31, 2025, compared to 13% in the prior year, enhancing liquidity[15] - Uninsured deposits accounted for $525.6 million, or 31%, of total deposits, with approximately 80% representing clients with full commercial banking relationships[17] Multifamily Portfolio - The multifamily portfolio had a weighted average Debt Service Coverage Ratio (DSCR) of approximately 1.62 and an original Loan-to-Value (LTV) of 55%[16]