Esquire Financial Holdings, Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-38131

Esquire Financial Holdings, Inc.

(Exact Name of Registrant as Specified in Its Charter)


Maryland		27-5107901
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

100 Jericho Quadrangle, Suite 100, Jericho, New York		11753
(Address of Principal Executive Offices)		(Zip Code)

(516) 535-2002

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value

ESQ

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such requirements for the past 90 days.

YES ⌧ NO ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

YES ⌧ NO ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ◻		Accelerated filer ☒
Non-accelerated filer ◻		Smaller reporting company ◻
		Emerging growth company ◻

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES ☐ NO ⌧

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of May 1, 2025, there were 8,461,494 outstanding shares of the issuer’s common stock.

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Esquire Financial Holdings, Inc.

Form 10-Q

Table of Contents

		Page
PART I. FINANCIAL INFORMATION		3

Item 1.	Financial Statements (unaudited)	3

	Consolidated Statements of Financial Condition	3

	Consolidated Statements of Income	4

	Consolidated Statements of Comprehensive Income	5

	Consolidated Statements of Changes in Stockholders’ Equity	6

	Consolidated Statements of Cash Flows	7

	Notes to Interim Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39

Item 4.	Controls and Procedures	39

PART II. OTHER INFORMATION		40

Item 1.	Legal Proceedings	40

Item 1A.	Risk Factors	40

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40

Item 3.	Defaults Upon Senior Securities	40

Item 4.	Mine Safety Disclosures	40

Item 5.	Other Information	41

Item 6.	Exhibits	41

	SIGNATURES	42

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PART I – FINANCIAL INFORMATION

Item 1.Financial Statements

ESQUIRE FINANCIAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Dollars in thousands, except per share data)

(Unaudited)


	March 31,		December 31,
	2025		2024
Assets:
Cash and cash equivalents	$	173,041	$	126,329
Securities available-for-sale, at fair value		236,919		241,746
Securities held-to-maturity, at cost (fair value of $60,304 and $60,931, at March 31, 2025 and December 31, 2024, respectively)		66,736		68,660
Securities, restricted, at cost		3,034		3,034

Loans held for investment		1,415,858		1,397,021
Less: allowance for credit losses		(19,461)		(20,979)
Loans, net of allowance		1,396,397		1,376,042
Premises and equipment, net		3,328		2,436
Accrued interest receivable		10,792		10,124
Other assets		64,190		64,132
Total assets	$	1,954,437	$	1,892,503

Liabilities:
Deposits:
Demand	$	523,441	$	497,958
Savings, NOW and money market		1,158,748		1,130,174
Time		5,931		14,104
Total deposits		1,688,120		1,642,236

Accrued expenses and other liabilities		15,593		13,173
Total liabilities		1,703,713		1,655,409

Commitments and contingencies		—		—

Stockholders’ equity:
Preferred stock, par value $0.01; authorized 2,000,000 shares; none issued		—		—
Common stock, par value $0.01; authorized 15,000,000 shares; 8,550,672 and 8,473,651 shares issued, respectively; and 8,431,774 and 8,354,753 shares outstanding, respectively		85		85
Additional paid-in capital		105,150		104,052
Retained earnings		162,860		152,932
Accumulated other comprehensive loss		(11,683)		(14,287)
Treasury stock at cost (118,898 and 118,898 shares, respectively)		(5,688)		(5,688)
Total stockholders’ equity		250,724		237,094
Total liabilities and stockholders’ equity	$	1,954,437	$	1,892,503

See accompanying notes to interim consolidated financial statements.

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ESQUIRE FINANCIAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)


	Three Months Ended March 31,
	2025		2024
Interest income:
Loans held for investment	$	26,810	$	23,389
Securities, includes restricted stock		3,042		1,605
Interest earning cash and other		1,661		1,079
Total interest income		31,513		26,073

Interest expense:
Savings, NOW and money market deposits		3,784		3,098
Time deposits		119		111
Borrowings		1		1
Total interest expense		3,904		3,210

Net interest income		27,609		22,863
Provision for credit losses		1,500		1,000
Net interest income after provision for credit losses		26,109		21,863

Noninterest income:
Payment processing fees		4,912		5,296
Administrative service income		880		746
Customer related fees, service charges and other		359		347
Total noninterest income		6,151		6,389

Noninterest expense:
Employee compensation and benefits		10,065		9,161
Occupancy and equipment		1,132		927
Professional and consulting services		1,264		951
FDIC and regulatory assessments		270		222
Advertising and marketing		851		872
Travel and business relations		306		278
Data processing		1,920		1,511
Other operating expenses		940		646
Total noninterest expense		16,748		14,568

Net income before income taxes		15,512		13,684
Income tax expense		4,105		3,626

Net income	$	11,407	$	10,058

Earnings per share
Basic	$	1.43	$	1.29
Diluted	$	1.33	$	1.20

See accompanying notes to interim consolidated financial statements.

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ESQUIRE FINANCIAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands)

(Unaudited)


	Three Months Ended March 31,
	2025		2024
Net income	$	11,407	$	10,058
Other comprehensive income (loss):
Unrealized gains (losses) arising during the period on securities available-for-sale		3,810		(1,564)
Tax effect		(1,206)		430
Total other comprehensive income (loss)		2,604		(1,134)
Total comprehensive income	$	14,011	$	8,924

See accompanying notes to interim consolidated financial statements.

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ESQUIRE FINANCIAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Dollars in thousands, except per share data)

(Unaudited)


												Accumulated
								Additional				other				Total
	Preferred	Common		Preferred		Common		paid-in		Retained		comprehensive		Treasury		stockholders'
	shares	shares		stock		stock		capital		earnings		loss		stock		equity
Balance at January 1, 2025	—	8,354,753	$	—	$	85	$	104,052	$	152,932	$	(14,287)	$	(5,688)	$	237,094
Net income	—	—		—		—		—		11,407		—		—		11,407
Other comprehensive income	—	—		—		—		—		—		2,604		—		2,604
Exercise of stock options, net of repurchases (11,895 shares)	—	57,547		—		—		9		—		—		—		9
Restricted stock grants	—	19,474		—		—		—		—		—		—		—
Stock compensation expense	—	—		—		—		1,089		—		—		—		1,089
Cash dividends declared to common stockholders ($0.175 per share)	—	—		—		—		—		(1,479)		—		—		(1,479)
Balance at March 31, 2025	—	8,431,774	$	—	$	85	$	105,150	$	162,860	$	(11,683)	$	(5,688)	$	250,724

												Accumulated
								Additional				other				Total
	Preferred	Common		Preferred		Common		paid-in		Retained		comprehensive		Treasury		stockholders'
	shares	shares		stock		stock		capital		earnings		loss		stock		equity
Balance at January 1, 2024	—	8,287,848	$	—	$	84	$	99,713	$	114,261	$	(13,235)	$	(2,268)	$	198,555
Net income	—	—		—		—		—		10,058		—		—		10,058
Other comprehensive loss	—	—		—		—		—		—		(1,134)		—		(1,134)
Exercise of stock options	—	11,000		—		—		173		—		—		—		173
Stock compensation expense	—	—		—		—		967		—		—		—		967
Cash dividends declared to common stockholders ($0.15 per share)	—	—		—		—		—		(1,242)		—		—		(1,242)
Shares received related to tax withholding	—	(6,059)		—		—		—		—		—		(299)		(299)
Balance at March 31, 2024	—	8,292,789	$	—	$	84	$	100,853	$	123,077	$	(14,369)	$	(2,567)	$	207,078

See accompanying notes to interim consolidated financial statements.

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ESQUIRE FINANCIAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)



	Three Months Ended
	March 31,
	2025		2024
Cash flows from operating activities:
Net income	$	11,407	$	10,058
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses		1,500		1,000
Depreciation and amortization of premises and equipment		260		176
Stock compensation expense		1,089		967
Net amortization (accretion):
Securities		126		88
Loans		(28)		(148)
Right of use asset		185		138
Software		464		431
Changes in other assets and liabilities:
Accrued interest receivable		(668)		(177)
Other assets		(866)		(1,829)
Operating lease liability		(221)		(173)
Accrued expenses and other liabilities		2,562		2,246
Net cash provided by operating activities		15,810		12,777
Cash flows from investing activities:
Net change in loans		(21,827)		(20,789)
Purchases of securities available-for-sale		—		(24,973)
Principal repayments on securities available-for-sale		8,536		3,292
Principal repayments on securities held-to-maturity		1,899		1,736
Purchase of equity investment		(450)		(3,524)
Purchases of premises and equipment		(1,152)		(235)
Development of capitalized software		(597)		(691)
Net cash used in investing activities		(13,591)		(45,184)
Cash flows from financing activities:
Net increase in deposits		45,884		26,750
Exercise of stock options, net of repurchases		9		173
Tax withholding payments for vested equity awards		—		(299)
Cash dividends paid to common stockholders		(1,400)		(1,183)
Net cash provided by financing activities		44,493		25,441
Increase (decrease) in cash and cash equivalents		46,712		(6,966)
Cash and cash equivalents at beginning of the period		126,329		165,209
Cash and cash equivalents at end of the period	$	173,041	$	158,243

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	3,919	$	3,205
Taxes		901		646
Noncash transactions:
Dividends declared but not paid		79		59
Exchange of noncash instruments		—		(300)

See accompanying notes to interim consolidated financial statements.

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ESQUIRE FINANCIAL HOLDINGS, INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 — Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The Interim Consolidated Financial Statements including the accounts of Esquire Financial Holdings, Inc. and its wholly owned subsidiary, Esquire Bank, N.A., are collectively referred to as “the Company.” All significant intercompany accounts and transactions have been eliminated in consolidation.

The accompanying unaudited Interim Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial information. In the opinion of management, the interim statements reflect all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows of the Company on a consolidated basis and all such adjustments are recurring in nature. These financial statements and the accompanying notes should be read in conjunction with the Company’s audited financial statements for the years ended December 31, 2024 and 2023. Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025 or any other period.

Subsequent Events

The Company has evaluated events for recognition and disclosure through the date of issuance.

Investment in Variable Interest Entities

During 2022, the Company sold its legacy National Football League (“NFL”) consumer post-settlement loan portfolio to a variable interest entity (“VIE”) in exchange for a nonvoting interest valued at $13.5 million where the Company remained as servicer of the loan portfolio at the discretion of the VIE manager. Gains or losses on this investment are the result of changes in projected cash flows from the VIE’s loan portfolio based on expected claim settlements. For the three months ended March 31, 2025 and 2024, the Company did not recognize an equity method gain or loss on its investment. As of March 31, 2025, the investment’s carrying amount was $9.0 million with a remaining life of 4.0 years, and a carrying amount of $9.4 million as of December 31, 2024.

During 2024, the Company closed on an investment in United Payment Systems, LLC (doing business as Payzli) in exchange for a 24.99% ownership interest. Payzli is an end-to-end payment technology company that acts as a single source for payment services, business management software, web enablement and mobile solutions. For the three months ended March 31, 2025 and 2024, the Company did not recognize an equity method gain or loss on its investment. The investment’s carrying amount was $4.6 million and $4.4 million as of March 31, 2025 and December 31, 2024, respectively.

Loss Contingencies

Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there now are such matters that will have a material effect on the Consolidated Financial Statements.

Summary of Significant Accounting Policies

Please see "Part I - Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies" for a discussion of areas in the accompanying unaudited Consolidated Financial Statements utilizing significant estimates.

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Impact of Issued but Not Yet Effective Accounting Standards

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, intended to enhance the transparency of income tax disclosures, primarily related to the rate reconciliation and income taxes paid information. Specifically, the amendments in this ASU require disclosure of: (i) a tabular reconciliation, using both percentages and reporting currency amounts, with prescribed categories that are required to be disclosed, and the separate disclosure and disaggregation of prescribed reconciling items with an effect equal to 5% or more of the amount determined by multiplying pretax income from continuing operations by the applicable statutory rate; (ii) a qualitative description of the states and local jurisdictions that make up the majority (greater than 50%) of the effect of the state and local income taxes; and (iii) amount of income taxes paid, net of refunds received, disaggregated by federal, state, and foreign taxes and by individual jurisdictions that comprise 5% or more of total income taxes paid, net of refunds received. The ASU also includes other amendments to improve the effectiveness of income tax disclosures. The transition method is prospective with retrospective method permitted. The new disclosure requirements are effective for the Company for the annual reporting period ended December 31, 2025 which will be reflected on the annual Consolidated Financial Statements.

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NOTE 2 — Debt Securities

The following tables summarize the major categories of securities as of the dates indicated:


	March 31, 2025
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value

	(In thousands)
Securities available-for-sale:
Mortgage-backed securities – agency	$	100,521	$	38	$	(14,821)	$	85,738
Collateralized mortgage obligations ("CMOs") – agency		152,293		821		(1,933)		151,181
Total available-for-sale	$	252,814	$	859	$	(16,754)	$	236,919

			Gross		Gross
	Amortized		Unrecognized		Unrecognized		Fair
	Cost		Gains		Losses		Value

	(In thousands)
Securities held-to-maturity:
CMOs – agency	$	66,736	$	5	$	(6,437)	$	60,304
Total held-to-maturity	$	66,736	$	5	$	(6,437)	$	60,304

	December 31, 2024
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value

	(In thousands)
Securities available-for-sale:
Mortgage-backed securities – agency	$	103,009	$	—	$	(17,057)	$	85,952
CMOs – agency		158,442		271		(2,919)		155,794
Total available-for-sale	$	261,451	$	271	$	(19,976)	$	241,746

			Gross		Gross
	Amortized		Unrecognized		Unrecognized		Fair
	Cost		Gains		Losses		Value

	(In thousands)
Securities held-to-maturity:
CMOs – agency	$	68,660	$	—	$	(7,729)	$	60,931
Total held-to-maturity	$	68,660	$	—	$	(7,729)	$	60,931

Mortgage-backed securities included all pass-through certificates guaranteed by FHLMC, FNMA, or GNMA and the CMOs are backed by government agency pass-through certificates. CMOs, by virtue of the underlying residential collateral or structure, are fixed rate current pay sequentials or planned amortization classes (“PACs”). As actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations, these securities are not considered to have a single maturity date.

There were no sales or calls of securities for the three months ended March 31, 2025 and 2024.

At March 31, 2025, securities having a fair value of $244.7 million were pledged to the Federal Home Loan Bank of New York (“FHLB”) for borrowing capacity totaling $227.2 million. At December 31, 2024, securities having a fair value of $249.6 million were pledged to the FHLB for borrowing capacity totaling $232.3 million. At March 31, 2025 and December 31, 2024, the Company had no outstanding FHLB advances.

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At March 31, 2025, securities having a fair value of $52.5 million were pledged to the Federal Reserve Bank of New York (“FRB”) for borrowing capacity totaling $50.8 million. At December 31, 2024, securities having a fair value of $53.0 million were pledged to the FRB for borrowing capacity totaling $51.4 million. At March 31, 2025 and December 31, 2024, the Company had no outstanding FRB borrowings.

The following table provides the gross unrealized and unrecognized losses and fair value, aggregated by investment category and length of time the individual securities have been in a continuous unrealized or unrecognized loss position:


	March 31, 2025
	Less Than 12 Months				12 Months or Longer				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses

	(In thousands)
Securities available-for-sale:
Mortgage-backed securities – agency	$	3,049	$	(5)	$	76,485	$	(14,816)	$	79,534	$	(14,821)
CMOs – agency		34,382		(215)		10,339		(1,718)		44,721		(1,933)
Total available-for-sale	$	37,431	$	(220)	$	86,824	$	(16,534)	$	124,255	$	(16,754)

	Less Than 12 Months				12 Months or Longer				Total
	Fair Value		Gross Unrecognized Losses		Fair Value		Gross Unrecognized Losses		Fair Value		Gross Unrecognized Losses

	(In thousands)
Securities held-to-maturity:
CMOs – agency	$	—	$	—	$	56,148	$	(6,437)	$	56,148	$	(6,437)
Total held-to-maturity	$	—	$	—	$	56,148	$	(6,437)	$	56,148	$	(6,437)

	December 31, 2024
	Less Than 12 Months				12 Months or Longer				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses

	(In thousands)
Securities available-for-sale:
Mortgage-backed securities – agency	$	6,341	$	(84)	$	79,610	$	(16,973)	$	85,951	$	(17,057)
CMOs – agency		94,642		(998)		10,729		(1,921)		105,371		(2,919)
Total available-for-sale	$	100,983	$	(1,082)	$	90,339	$	(18,894)	$	191,322	$	(19,976)

	Less Than 12 Months				12 Months or Longer				Total
	Fair Value		Gross Unrecognized Losses		Fair Value		Gross Unrecognized Losses		Fair Value		Gross Unrecognized Losses

	(In thousands)
Securities held-to-maturity:
CMOs – agency	$	—	$	—	$	56,523	$	(7,729)	$	56,523	$	(7,729)
Total held-to-maturity	$	—	$	—	$	56,523	$	(7,729)	$	56,523	$	(7,729)

Management evaluates securities available-for-sale in unrealized loss positions to determine whether the impairment is due to credit-related factors. Due to the decline in fair value being attributable to changes in interest rates, not credit quality and because the Company does not have the intent to sell the securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider the securities to be impaired at March 31, 2025.

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As of March 31, 2025 and December 31, 2024, none of the Company’s available-for-sale securities were in an unrealized loss position due to credit, and therefore no allowance for credit losses on available-for-sale securities was required. Additionally, there was no allowance for credit losses on securities held-to-maturity due to the high credit quality composition consisting of issuances from government sponsored agencies as of March 31, 2025 and December 31, 2024.

Accrued interest receivable on securities totaling $1.0 million at March 31, 2025 and $1.1 million at December 31, 2024, was included in Accrued interest receivable in the Consolidated Statements of Financial Condition and excluded from amortized cost and estimated fair value in the tables above.

NOTE 3 — Loans

The composition of loans by class is summarized as follows:


	March 31,		December 31,
	2025		2024

	(In thousands)
Real estate:
Multifamily	$	364,877	$	355,165
Commercial real estate		86,797		87,038
1 – 4 family		10,974		14,665
Total real estate		462,648		456,868
Commercial		934,141		920,567
Consumer		18,705		19,339
Total loans held for investment		1,415,494		1,396,774
Deferred fees and unearned premiums, net		364		247
Allowance for credit losses		(19,461)		(20,979)
Loans held for investment, net	$	1,396,397	$	1,376,042

The following tables present the activity in the allowance for credit losses by class for the three months ending March 31, 2025 and March 31, 2024:


			Commercial
	Multifamily		Real Estate		1‑4 Family		Commercial		Consumer		Total

	(In thousands)
March 31, 2025
Allowance for credit losses:
Beginning balance	$	5,116	$	691	$	52	$	14,283	$	837	$	20,979
Provision (credit) for credit losses		2,031		(28)		72		(455)		(120)		1,500
Recoveries		—		—		—		—		19		19
Loans charged-off		(2,940)		—		(79)		—		(18)		(3,037)
Total ending allowance balance	$	4,207	$	663	$	45	$	13,828	$	718	$	19,461

March 31, 2024
Allowance for credit losses:
Beginning balance	$	3,236	$	823	$	58	$	12,056	$	458	$	16,631
Provision (credit) for credit losses		75		(32)		3		575		379		1,000
Recoveries		—		—		—		—		19		19
Loans charged-off		—		—		—		—		(127)		(127)
Total ending allowance balance	$	3,311	$	791	$	61	$	12,631	$	729	$	17,523

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As of March 31, 2025 and December 31, 2024, there was one multifamily collateral dependent loan secured by real estate totaling $8.0 million and $10.9 million, respectively, with no associated specific reserve on the Consolidated Statements of Financial Condition.

The following tables present the aging of the past due loans measured at amortized cost, excluding deferred fees and unearned premiums, net, due to immateriality, by class of loans as of March 31, 2025 and December 31, 2024:


									Total Past
	30-59		60-89		90 Days				Due &
	Days		Days		or More		Nonaccrual		Nonaccrual		Loans Not
	Past Due		Past Due		Past Due		Loans		Loans		Past Due		Total

	(In thousands)
March 31, 2025
Multifamily	$	—	$	—	$	—	$	8,000	$	8,000	$	356,877	$	364,877
Commercial real estate		—		—		—		—		—		86,797		86,797
1 – 4 family		—		—		—		—		—		10,974		10,974
Commercial		2		—		—		—		2		934,139		934,141
Consumer		—		40		—		—		40		18,665		18,705
Total	$	2	$	40	$	—	$	8,000	$	8,042	$	1,407,452	$	1,415,494

									Total Past
	30-59		60-89		90 Days				Due &
	Days		Days		or More		Nonaccrual		Nonaccrual		Loans Not
	Past Due		Past Due		Past Due		Loans		Loans		Past Due		Total

	(In thousands)
December 31, 2024
Multifamily	$	—	$	—	$	—	$	10,940	$	10,940	$	344,225	$	355,165
Commercial real estate		—		—		—		—		—		87,038		87,038
1 – 4 family		—		—		—		—		—		14,665		14,665
Commercial		—		2		—		—		2		920,565		920,567
Consumer		—		—		—		—		—		19,339		19,339
Total	$	—	$	2	$	—	$	10,940	$	10,942	$	1,385,832	$	1,396,774

Credit Quality Indicators

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed whenever a credit is extended, renewed or modified, or when an observable event occurs indicating a potential decline in credit quality, and no less than annually for large balance loans.

The Company uses the following definitions for risk ratings:

Special Mention - Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard - Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful - Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

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Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans.

The following is a summary of the credit risk profile of loans, measured at amortized cost, by internally assigned grade as of the periods indicated, the years represent the year of originations for non-revolving loans:


	March 31, 2025
	2025		2024		2023		2022		2021		2020 and Prior		Revolving		Revolving-Term		Total

	(In thousands)
Multifamily:
Pass	$	14,557	$	26,575	$	104,906	$	26,511	$	106,853	$	77,598	$	—	$	—	$	357,000
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		8,000		—		—		8,000
Doubtful		—		—		—		—		—		—		—		—		—
Total		14,557		26,575		104,906		26,511		106,853		85,598		—		—		365,000
Current period gross charge-offs		—		—		—		—		—		2,940		—		—		2,940

Commercial real estate:
Pass		340		1,826		2,940		57,349		10,251		14,054		—		—		86,760
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total		340		1,826		2,940		57,349		10,251		14,054		—		—		86,760
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

1-4 family:
Pass		—		—		—		1,813		—		9,165		—		—		10,978
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total		—		—		—		1,813		—		9,165		—		—		10,978
Current period gross charge-offs		—		—		—		—		—		79		—		—		79

Commercial:
Pass		29,566		45,499		29,289		16,212		1,831		536		804,301		3,189		930,423
Special Mention		—		—		—		—		—		—		3,986		—		3,986
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total		29,566		45,499		29,289		16,212		1,831		536		808,287		3,189		934,409
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Consumer:
Pass		454		1,857		3,510		1,758		—		1,250		9,882		—		18,711
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total		454		1,857		3,510		1,758		—		1,250		9,882		—		18,711
Current period gross charge-offs		—		—		—		18		—		—		—		—		18

Total:
Pass		44,917		75,757		140,645		103,643		118,935		102,603		814,183		3,189		1,403,872
Special Mention		—		—		—		—		—		—		3,986		—		3,986
Substandard		—		—		—		—		—		8,000		—		—		8,000
Doubtful		—		—		—		—		—		—		—		—		—
Total loans	$	44,917	$	75,757	$	140,645	$	103,643	$	118,935	$	110,603	$	818,169	$	3,189	$	1,415,858
Total current period gross charge-offs	$	—	$	—	$	—	$	18	$	—	$	3,019	$	—	$	—	$	3,037

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	December 31, 2024
	2024		2023		2022		2021		2020		2019 and Prior		Revolving		Revolving-Term		Total

	(In thousands)
Multifamily:
Pass	$	26,687	$	104,953	$	26,657	$	107,510	$	22,996	$	55,583	$	—	$	—	$	344,386
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		10,940		—		—		—		10,940
Doubtful		—		—		—		—		—		—		—		—		—
Total		26,687		104,953		26,657		107,510		33,936		55,583		—		—		355,326
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Commercial real estate:
Pass		1,834		3,040		57,620		10,315		1,714		12,471		—		—		86,994
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total		1,834		3,040		57,620		10,315		1,714		12,471		—		—		86,994
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

1-4 family:
Pass		—		—		1,823		—		—		12,846		—		—		14,669
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total		—		—		1,823		—		—		12,846		—		—		14,669
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Commercial:
Pass		59,298		41,051		17,473		2,167		239		378		792,851		3,240		916,697
Special Mention		—		—		—		—		—		—		3,987		—		3,987
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total		59,298		41,051		17,473		2,167		239		378		796,838		3,240		920,684
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Consumer:
Pass		2,251		3,964		2,285		—		296		993		9,559		—		19,348
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total		2,251		3,964		2,285		—		296		993		9,559		—		19,348
Current period gross charge-offs		—		38		352		—		—		—		—		—		390

Total:
Pass		90,070		153,008		105,858		119,992		25,245		82,271		802,410		3,240		1,382,094
Special Mention		—		—		—		—		—		—		3,987		—		3,987
Substandard		—		—		—		—		10,940		—		—		—		10,940
Doubtful		—		—		—		—		—		—		—		—		—
Total loans	$	90,070	$	153,008	$	105,858	$	119,992	$	36,185	$	82,271	$	806,397	$	3,240	$	1,397,021
Total current period gross charge-offs	$	—	$	38	$	352	$	—	$	—	$	—	$	—	$	—	$	390

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The Company considers the performance of the loan portfolio and its impact on the allowance for credit losses. For smaller dollar commercial and consumer loan classes, the Company evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity.

Loan Modifications

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. During the three months ended March 31, 2025 and 2024, the Company did not modify the terms of any loans or commitments to lend to borrowers experiencing financial difficulty in the form of an interest rate reduction, term extension, principal forgiveness or other-than-insignificant payment delay.

Pledged Loans

At March 31, 2025, loans totaling $304.0 million were pledged to the FHLB for borrowing capacity totaling $202.5 million. At December 31, 2024, loans totaling $297.8 million were pledged to the FHLB for borrowing capacity totaling $199.4 million.

NOTE 4 — Noninterest Income

The majority of the Company’s revenue-generating transactions are not subject to Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, including revenue generated from financial instruments, such as loans, letters of credit, and investment securities. Descriptions of revenue-generating activities that are within the scope of ASC 606, and are presented in the Consolidated Statements of Income as components of noninterest income, are as follows:


	Three Months Ended March 31,
	2025		2024

	(In thousands)
Payment processing fees:
Payment processing income	$	4,750	$	5,100
ACH income		162		196
Total payment processing fees		4,912		5,296
Customer related fees, service charges and other:
Administrative service income		880		746
Other		359		347
Total customer related fees, service charges and other		1,239		1,093
Total noninterest income	$	6,151	$	6,389

The Company has made no significant judgments in applying the revenue guidance prescribed in ASC 606 that affect the determination of the amount and timing of revenue from the above-described contracts with customers.

●

Payment processing income – We provide payment processing services as an acquiring bank through the third-party or independent sales organization (“ISO”) business model in which we process credit and debit card transactions on behalf of merchants. We enter into a tri-party merchant agreement, between the Company, ISO and each merchant. The Company’s performance obligation is clearing and settling credit and debit transactions on behalf of the merchants. The Company recognizes revenue monthly once it summarizes and computes all revenue and expenses applicable to each ISO, which is our performance obligation.

●

ACH income – We provide ACH services for merchants and other commercial customers. Contracts are entered into with third parties that require ACH transactions processed on behalf of their customers. Fees are variable and based on the volume of transactions within a given month. Our performance obligations are

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processing and settling ACHs on behalf of the customers. Our obligation is satisfied within each business day when the transactions (ACH files) are sent to the FRB for clearing. Revenue is recognized based on the total volume of transactions processed that month for a given customer.

●

Administrative service income – Administrative service income is derived primarily from the management of qualified settlement funds (“QSFs”), which are funds from settled mass torts and class action lawsuits. Our performance obligations with the QSFs are outlined in court approved orders which includes ensuring funds are invested into safe investment vehicles such as U.S. treasuries and FDIC insured products. Our fees for placing these funds in appropriate vehicles are earned over the course of a month, representing the period over which the Company satisfies the performance obligation.

●

Other – The other category includes revenue from service charges on deposit accounts, debit card fees, asset management fees, and certain loan related fees where revenue is recognized as performance obligations are satisfied.

NOTE 5 — Share-Based Payment Plans

The Company issues incentive and non-statutory stock options, restricted stock awards (“RSAs”), and performance restricted stock units (“PSUs”) to certain employees and directors pursuant to its equity incentive plans, which have been approved by the stockholders. Share-based awards are granted by the Compensation Committee of the Board of Directors.

Under the plans, options are granted with an exercise price equal to the fair value of the Company’s stock at the date of the grant. Options granted vest over three or five years and have ten-year contractual terms. All options provide for accelerated vesting upon a change in control (as defined in the plans).

The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on peer volatility. The Company uses peer data to estimate option exercise and post-vesting termination behavior. The expected term of options granted is based on peer data and represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant.

Restricted shares are granted at the fair value on the date of grant and vest over five or six years with a third vesting at each of the last three anniversary dates. Restricted shares have the same voting rights as common stock and nonvested restricted shareholders do not have rights to the accrued dividends until vested.

Share payouts of PSUs will be earned based on the Company’s performance with respect to two equally weighted metrics, return on average assets and diluted EPS growth. Performance is measured against pre-established financial targets over a two-year performance period and will cliff vest on the three-year anniversary from the date of grant. Compensation expense on PSUs is based upon the fair value of the shares on the date of the grant for the expected aggregate share payout.

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There were no stock options granted during the three months ended March 31, 2025 and 2024.

The following table presents a summary of the activity related to options for the three months ended March 31, 2025:


	Three Months Ended March 31, 2025
				Weighted
		Weighted		Average
		Average		Remaining
		Exercise		Contractual
	Options	Price		Life (Years)
Outstanding at beginning of year	559,308	$	24.72
Granted	—		—
Exercised	(69,442)		14.31
Forfeited	(200)		77.92
Expired	—		—
Outstanding at period end	489,666	$	26.17	4.14
Vested or expected to vest	489,666	$	26.17	4.14
Exercisable at period end	414,943	$	20.42	3.29

The Company recognized compensation expense related to options of $185 thousand and $180 thousand for the three months ended March 31, 2025 and 2024, respectively. At March 31, 2025, unrecognized compensation cost related to nonvested options was approximately $1.3 million and is expected to be recognized over a weighted average period of 2.12 years. The intrinsic value for options outstanding, vested, or expected to vest was $24.2 million and $22.8 million for exercisable options at March 31, 2025.

Information related to stock option exercises during each period is as follows:


	Three Months Ended
	March 31,
	2025		2024

	(In thousands)
Intrinsic value of options exercised	$	4,776	$	369
Cash received from option exercises		9		173
Excess tax benefit from option exercises		231		83

The following table presents a summary of the activity related to restricted stock for the three months ended March 31, 2025:


	Three Months Ended March 31, 2025
		Weighted Average
		Grant Date
	Shares	Fair Value
Outstanding at beginning of year	414,114	$	37.87
Granted	19,474		87.42
Vested	—		—
Forfeited	—		—
Outstanding at period end	433,588	$	40.10

The Company recognized compensation expense related to restricted stock of $823 thousand and $787 thousand for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, there was $11.7 million of total unrecognized compensation cost related to nonvested shares granted under the plan. The cost is expected to be recognized over a weighted-average period of 4.02 years.

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The following table presents a summary of the activity related to PSUs for the three months ended March 31, 2025:


	Three Months Ended March 31, 2025
		Weighted Average
		Grant Date
	Units	Fair Value
Expected aggregate share payout at beginning of year	—	$	—
Granted	19,474		85.32
Vested	—		—
Forfeited	—		—
Expected aggregate share payout at period end	19,474	$	85.32
Minimum aggregate share payout at period end	—		—
Maximum aggregate share payout at period end	29,211	$	85.32

The Company recognized compensation expense related to PSUs of $80 thousand for the three months ended March 31, 2025 and no PSU expense in the three months ended March 31, 2024. As of March 31, 2025, there was $1.6 million of total unrecognized compensation cost related to nonvested PSUs based on the expected aggregate share payout to be recognized over a weighted-average period of 2.86 years.

NOTE 6 — Earnings per Share

The factors used in the earnings per share computation follow:


	Three Months Ended March 31,
	2025		2024

	(Dollars in thousands, except per share data)
Basic:
Net income	$	11,407	$	10,058
Weighted average shares outstanding		7,988,999		7,786,887
Basic earnings per share	$	1.43	$	1.29

Diluted:
Net income	$	11,407	$	10,058
Weighted average shares outstanding for basic earnings per share		7,988,999		7,786,887
Add: Dilutive effects of share based awards		612,608		614,865
Weighted average shares and dilutive potential shares		8,601,607		8,401,752
Diluted earnings per share	$	1.33	$	1.20

Share-based awards totaling 27,900 and 95,450 shares of common stock were not considered in computing diluted earnings per common share for the three months ended March 31, 2025 and 2024, respectively, because they were anti-dilutive.

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NOTE 7 — Leases

The Company recognizes the present value of its operating lease payments related to its office facilities and retail branch as operating lease assets and corresponding lease liabilities on the Consolidated Statements of Financial Condition. These operating lease assets represent the Company’s right to use an underlying asset for the lease term, and the lease liability represents the Company’s obligation to make lease payments over the lease term. As these leases do not provide an implicit rate, the Company used its incremental borrowing rate, the rate of interest to borrow on a collateralized basis for a similar term, at the lease commencement date in order to determine present value.

Short-term lease payments, those leases with original terms of 12 months or less, are recognized in the Consolidated Statements of Income, on a straight-line basis over the lease term. Certain leases may include one or more options to renew. The exercise of lease renewal options is typically at the Company’s discretion and are included in the operating lease liability if it is reasonably certain that the renewal option will be exercised. Certain real estate leases may contain lease and non-lease components, such as common area maintenance charges, real estate taxes, and insurance, which are generally accounted for separately and are not included in the measurement of the lease liability since they are generally able to be segregated. The Company does not sublease any of its leased properties. The Company does not lease properties from any related parties.

As of March 31, 2025, right of use (“ROU”) lease assets and related lease liabilities were $3.0 million and $3.3 million, respectively. As of December 31, 2024, ROU lease assets and related lease liabilities were $3.2 million and $3.5 million, respectively. ROU assets are included within Other assets and related lease liabilities are included within Accrued expenses and other liabilities on the Consolidated Statements of Financial Condition.

As of March 31, 2025, the Company was obligated under several non-cancelable leases for certain premises and equipment. The minimum annual rental commitments, exclusive of taxes and other charges, under non-cancelable lease agreements for premises at March 31, 2025, are summarized as follows:


		Operating Lease
		Liabilities
		(In thousands)
2025	$	776
2026		988
2027		240
2028		248
2029		255
Thereafter		1,392
Total operating lease payments		3,899
Less: interest		623
Present value of operating lease liabilities	$	3,276


	March 31,
	2025			2024
Weighted-average remaining lease term		6.60	years		2.67	years
Weighted-average discount rate		4.24	%		3.30	%

The components of total lease cost are as follows:


	Three Months Ended
	March 31,
	2025		2024

	(In thousands)
Operating lease cost	$	223	$	158
Short-term lease cost		16		34
Total lease cost	$	239	$	192

Cash paid for operating leases	$	275	$	227

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NOTE 8 — Fair Value Measurements

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values.

Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2 – Significant observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

For available-for-sale securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2).

Assets and liabilities measured at fair value on a recurring basis are summarized below:


	Fair Value Measurements Using
	Quoted Prices In Active Markets For Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)

	(In thousands)
March 31, 2025
Assets
Securities available-for-sale
Mortgage-backed securities – agency	$	—	$	85,738	$	—
CMOs – agency		—		151,181		—
Total available-for-sale	$	—	$	236,919	$	—

December 31, 2024
Assets
Securities available-for-sale
Mortgage-backed securities – agency	$	—	$	85,952	$	—
CMOs – agency		—		155,794		—
Total available-for-sale	$	—	$	241,746	$	—

There were no transfers between Level 1 and Level 2 during the three months ended March 31, 2025 and 2024.

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The following tables present the carrying amounts and fair values (represents exit price) of financial instruments not carried at fair value at March 31, 2025 and December 31, 2024:


	Fair Value Measurement at March 31, 2025, Using:
	Carrying
	Value		(Level 1)		(Level 2)		(Level 3)		Total

	(In thousands)
Financial Assets:
Cash and cash equivalents	$	173,041	$	173,041	$	—	$	—	$	173,041
Securities, held-to-maturity		66,736		—		60,304		—		60,304
Securities, restricted, at cost		3,034		N/A		N/A		N/A		N/A
Loans held for investment, net		1,396,397		—		—		1,373,295		1,373,295
Accrued interest receivable		10,792		—		1,240		9,552		10,792

Financial Liabilities:
Time deposits		5,931		—		5,910		—		5,910
Demand and other deposits		1,682,189		1,682,189		—		—		1,682,189
Secured borrowings		42		—		—		42		42
Accrued interest payable		1		—		1		—		1


	Fair Value Measurement at December 31, 2024, Using:
	Carrying
	Value		(Level 1)		(Level 2)		(Level 3)		Total

	(In thousands)
Financial Assets:
Cash and cash equivalents	$	126,329	$	126,329	$	—	$	—	$	126,329
Securities, held-to-maturity		68,660		—		60,931		—		60,931
Securities, restricted, at cost		3,034		N/A		N/A		N/A		N/A
Loans held for investment, net		1,376,042		—		—		1,351,736		1,351,736
Accrued interest receivable		10,124		—		1,139		8,985		10,124

Financial Liabilities:
Time deposits		14,104		—		14,083		—		14,083
Demand and other deposits		1,628,132		1,628,132		—		—		1,628,132
Secured borrowings		42		—		—		42		42
Accrued interest payable		25		—		25		—		25

NOTE 9 — Accumulated Other Comprehensive Loss

The following presents changes in accumulated other comprehensive loss by component, net of tax, for the three months ended March 31, 2025 and 2024:


	Three Months Ended March 31,
	2025		2024

	(In thousands)
Unrealized Gains (Losses) on Securities Available-for-Sale
Beginning balance	$	(14,287)	$	(13,235)
Other comprehensive income (loss) before reclassifications, net of tax		2,604		(1,134)
Net current period other comprehensive income (loss)		2,604		(1,134)
Ending balance	$	(11,683)	$	(14,369)

There were no reclassifications out of accumulated other comprehensive loss for the three months ended March 31, 2025 and 2024.

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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

Management’s discussion and analysis of financial condition at March 31, 2025 and December 31, 2024 and results of operations for the three months ended March 31, 2025 and 2024 is intended to assist in understanding the financial condition and results of operations of Esquire Financial Holdings, Inc. The information contained in this section should be read in conjunction with the unaudited Consolidated Financial Statements and the notes thereto appearing in Part I, Item 1, of this quarterly report on Form 10-Q and the audited Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Cautionary Note Regarding Forward-Looking Statements

This quarterly report contains forward-looking statements, which can be identified by the use of words such as “may,” “might,” “should,” “could,” “predict,” “potential,” “believe,” “expect,” “attribute,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “goal,” “target,” “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. These forward-looking statements include, but are not limited to:

●

statements of our goals, intentions and expectations;

●

statements regarding our business plans, prospects, growth and operating strategies;

●

statements regarding the quality of our loan and investment portfolios; and

●

estimates of our risks and future costs and benefits.

These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. We are under no duty to and do not take any obligation to update any forward-looking statements after the date of this quarterly report.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

●

our ability to manage our operations under the current economic conditions nationally and in our market area;

●

adverse changes in the financial industry, securities, credit and national local real estate markets (including real estate values);

●

risks related to a high concentration of loans secured by real estate located in our market area;

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risks related to a high concentration of loans and deposits dependent upon the legal and “litigation” market;

●

the impact of any potential strategic transactions;

●

unexpected outflows of uninsured deposits could require us to sell investment securities at a loss;

●

our ability to enter new markets successfully and capitalize on growth opportunities;

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●

significant increases in our credit losses, including as a result of our inability to resolve classified and nonperforming assets or reduce risks associated with our loans, and management’s assumptions in determining the adequacy of the allowance for credit losses;

●

interest rate fluctuations, which could have an adverse effect on our profitability;

●

The imposition of tariffs or other domestic or international governmental policies impacting the value of the products of our borrowers;

●

external economic and/or market factors, such as changes in monetary and fiscal policies and laws, including the interest rate policies of the Board of Governors of the Federal Reserve System (“FRB”), inflation or deflation, changes in the demand for loans, and fluctuations in consumer spending, borrowing and savings habits, which may have an adverse impact on our financial condition;

●

continued or increasing competition from other financial institutions, credit unions, and non-bank financial services companies, many of which are subject to different regulations than we are;

●

credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs and in our allowance for credit losses and provision for credit losses;

●

our success in increasing our legal and “litigation” market lending;

●

our ability to attract and maintain deposits and our success in introducing new financial products;

●

losses suffered by merchants or Independent Sales Organizations (“ISOs”) with whom we do business;

●

our ability to effectively manage risks related to our payment processing business;

●

changes in interest rates generally, including changes in the relative differences between short-term and long-term interest rates and in deposit interest rates, that may affect our net interest margin and funding sources;

●

fluctuations in the demand for loans;

●

technological changes that may be more difficult or expensive than expected;

●

changes in consumer spending, borrowing and savings habits;

●

declines in our payment processing income as a result of reduced demand, competition and changes in laws or government regulations or policies affecting financial institutions, which could result in, among other things, increased deposit insurance premiums and assessments, capital requirements, regulatory fees and compliance costs;

●

changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board (“FASB”), the Securities and Exchange Commission or the Public Company Accounting Oversight Board;

●

loan delinquencies and changes in the underlying cash flows of our borrowers;

●

the impairment of our investment securities;

●

our ability to control costs and expenses;

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●

the failure or security breaches of computer systems on which we depend;

●

acts of war, terrorism, natural disasters, global market disruptions, including global pandemics or political instability;

●

the effects of any federal government shutdown or reduction in force;

●

competition and innovation with respect to financial products and services by banks, financial institutions and non-traditional providers, including retail businesses and technology companies;

●

changes in our organization and management and our ability to retain or expand our management team and our board of directors, as necessary;

●

the costs and effects of legal, compliance and regulatory actions, changes and developments, including the initiation and resolution of legal proceedings, regulatory or other governmental inquiries or investigations, and/or the results of regulatory examinations and reviews;

●

the ability of key third-party service providers to perform their obligations to us; and

●

other economic, competitive, governmental, legal, regulatory and operational factors affecting our operations, pricing, products and services described elsewhere in this Quarterly Report on Form 10-Q.

The foregoing factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included in our Annual Report on Form 10-K for the year ended December 31, 2024, as supplemented by subsequent Quarterly Reports on Form 10-Q. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New risks and uncertainties arise from time to time, and it is not possible for us to predict those events or how they may affect us. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Critical Accounting Estimates

A summary of our significant accounting policies is described in Note 1 to the Consolidated Financial Statements included in our Annual Report. Critical accounting estimates are necessary in the application of certain accounting policies and procedures and are particularly susceptible to significant change. Critical accounting policies are defined as those involving significant judgments and assumptions by management that could have a material impact on the carrying value of certain assets or on income under different assumptions or conditions. Management believes that the most critical accounting policies, which involve the most complex or subjective decisions or assessments, are as follows:

Allowance for Credit Losses on Loans Held for Investment. Management considers the accounting policy relating to the allowance for credit losses on loans held for investment to be a critical accounting policy given the inherent subjectivity and uncertainty in estimating the levels of the allowance required to cover credit losses in the portfolio and the material effect that such judgments can have on the results of operations. See Note 1 “Business and Summary of Significant Accounting Policies” in our Annual Report for discussion of our allowance for credit losses on loans held for investment policy.

On January 1, 2023, we adopted the CECL Standard. The Company is required under the CECL Standard to estimate and record lifetime credit losses expected to be incurred on such financial instruments over the entire contractual term at the time they are recorded in the financial statements, such as with the funding or purchasing of a loan, or a

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commitment to lend unless the commitment is unconditionally cancellable. Because this allowance methodology follows a forward-looking lifetime expected loss approach, it is not necessary for a loss event to have been incurred before a credit loss is recognized. The estimation process in determining an appropriate level for the allowance for credit losses requires consideration of past events, current conditions, and reasonable and supportable forecasts, and involves a significant degree of management judgment. The Company determines the allowance for credit losses using methods it believes are appropriate given the characteristics of each loan portfolio and applies these methods consistently over time.

The Company employs a static pool methodology for all loan segments. In a static pool approach, statistical information about a pool of loans originated during a specified period is tracked over its life (including losses, delinquencies, and prepayments). In general, this methodology operates by calculating a rate representing the current balance expected to not be collected for each pool. This loss rate is then applied against the current portfolio loans with similar characteristics of those established in the pool.

In accordance with the CECL Standard, the Company must estimate expected credit losses over the contractual term of a loan, adjusted for expected prepayments. In estimating the life of a loan, the Company cannot extend the contractual term of a loan for expected extensions, renewals, and modifications, unless there is a borrower-held extension or renewal option that is not unconditionally cancelable. In developing the estimate of expected credit losses, the Company must reflect information about past events, current conditions, and reasonable and supportable forecasts. This information should include what is reasonably available without undue cost and effort and may include information sourced internally, externally, or a combination of both.

The estimation of expected credit losses requires the use of forward-looking information that is both reasonable and supportable, including information that relates to economic forecasts and how those forecasts are expected to impact expected future losses. The Company incorporates reasonable and supportable forecasts as qualitative adjustments applied to the historical loss rates over the reasonable and supportable forecast period. The CECL Standard does not require a specific method for developing economic forecasts, nor does it require a specific timeframe over which a reasonable and supportable forecast should be employed in the Company’s CECL model. While the Company is not precluded from utilizing economic forecasts over the entire contractual term of a loan, the Company utilizes forecasts it believes are reasonable and supportable. The Company considers its methodologies to determine reasonable and supportable forecasts and reversion techniques to be accounting estimates rather than accounting policies or principles. For periods beyond which the Company is unable to determine a reasonable and supportable forecast, it will revert to unadjusted historical loss information in accordance with the CECL Standard. Management assesses the sensitivity of key assumptions by stressing the quantitative inputs utilized in its economic forecasts. This sensitivity analysis provides management with a hypothetical result to assess the sensitivity of our allowance for credit losses to a change in a key quantitative input.

Qualitative factors are used to supplement the static pool methodology to determine total estimated expected credit losses during a given period. Because the static pool methodology estimates losses based on historical loss information, management utilizes qualitative factors to measure expected credit losses which are not sufficiently captured within the static pool model during a given period.

On a quarterly basis, management determines the extent to which qualitative factors are used to bring the allowance for credit losses to a level deemed appropriate. These adjustments to the allowance for credit losses may be positive or negative to the quantitatively modeled results from the static pool methodology. Final qualitative adjustments to the allowance for credit losses are subject to management judgment.

The Company measures the allowance for credit losses on a collective basis by pooling loans according to similar risk characteristics. When a loan is deemed to no longer share risk characteristics similar to others in the portfolio, the Company evaluates such loans on an individual basis. Management may consider changes to a borrower’s circumstances impacting cash collections, delinquency and non-accrual status, probability of default, industry, or other facts and circumstances when determining whether a loan shares risk characteristics with other loans in a pool. For a loan that does not share risk characteristics with other loans in a pool and is not collateral dependent, expected credit loss is measured based on the discounted value of the expected future cash flows and the amortized cost of the loan. If an entity determines that foreclosure of the collateral is probable, the CECL Standard requires the entity to measure expected credit losses of collateral dependent loans based on the difference between the current fair value of the collateral and the amortized cost

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basis of the financial asset. As of March 31, 2025, there was one multifamily loan totaling $8.0 million that was individually analyzed and collateral dependent on the Consolidated Statements of Financial Condition.

When applying this critical accounting estimate, management’s inputs and estimates of the timing and amounts of future losses are subject to significant judgment as these projected cash flows rely upon factors that depend on current or expected future conditions. Management expects there to be differences between actual and estimated results.

Future changes to the allowance for credit losses may be necessary based on changes in economic, market, or other conditions. Changes to estimates could result in a material change in the allowance for credit losses and charges to provision for credit losses would materially decrease the Company’s net income. The Company’s loan portfolio may experience significant credit losses, which could have a material adverse effect on our operating results.

Overview

We are a financial holding company headquartered in Jericho, New York and registered under the Bank Holding Company Act of 1956, as amended. Through our wholly owned bank subsidiary, Esquire Bank, National Association (“Esquire Bank” or the “Bank”), we are a full service commercial bank dedicated to serving the financial needs of the legal and small business communities on a national basis, as well as commercial and retail customers in the New York metropolitan market. We offer tailored products and solutions to the legal community and their clients as well as dynamic and flexible payment processing solutions to small business owners, both on a national basis. We also offer traditional banking products for businesses and consumers in our local market area (a subset of the New York metropolitan market).

Our results of operations depend primarily on our net interest income which is the difference between the interest income we earn on our interest-earning assets and the interest we pay on our interest-bearing liabilities. Our results of operations also are affected by our provisions for credit losses, noninterest income and noninterest expense. Noninterest income currently consists primarily of payment processing income, administrative service payment (“ASP”) fee income and customer related fees and charges. Noninterest expense currently consists primarily of employee compensation and benefits, data processing costs, occupancy and equipment costs and professional and consulting services. Our results of operations also may be affected significantly by general and local economic and competitive conditions, changes in market interest rates, governmental policies, the litigation market and actions of regulatory authorities.

The Company’s foundation for success has been our nationwide branchless litigation and payment processing verticals supported by our forward-thinking senior managers, outstanding client service teams, and inclusive corporate culture. The future of our success will be the ability to continue developing and embracing cutting-edge technology to significantly leverage these verticals, differentiating us from other technology enabled financial firms and creating the catalyst for industry leading growth and returns.

Litigation Market Commercial Banking. The litigation market has been and will continue to be a significant growth opportunity for our Company as we offer focused and tailored products and services to law firms nationally. U.S. tort actions alone are estimated to consume approximately 2.1% of U.S. GDP annually according to the U.S. Chamber of Commerce Institute for Legal Reform (“Tort Costs in America – An Empirical Analysis of Costs and Compensation of the U.S. Tort System”) published in November 2024 with a total addressable market (“TAM”) of $529 billion for 2022. We do not compete directly with non-bank finance companies, the primary funders in this market, and believe there are various and significant barriers to entry including, but not limited to, our clear industry track record for decades, extensive in-house experience, deep relationships with respected firms nationally, and unique products tailored to commercial law firms’ needs and wants.

We currently have lending clients in 31 states and our larger markets include California, New York, Texas, Florida, Pennsylvania, Michigan, South Carolina and New Jersey. Our success is tied to our unique ability to couple traditional commercial underwriting with non-traditional asset-based underwriting. Our team understands law firms’ contingent case inventory valuation process (as well as traditional hourly billing firms). Typically, these inventories of claims for injured consumers or claimants have a duration of 2 to 3 years, significantly longer than traditional accounts receivables or inventories of goods that can have a duration of 30 to 60 days or 120 days, respectively. These factors (the unique industry, contingent collateral, longer durations of the law firms’ inventories, atypical revenue streams of the law

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firms and more) coupled with the TAM create a unique and valuable opportunity for the Company with minimal incumbent competition. This unique risk profile translates approximately into a blended 9.5% variable rate asset yield on these commercial loans for the quarter ended March 31, 2025. More importantly, since our commercial banking platform is focused on full service relationship banking, for every $1.00 we advance on these loans we receive on average $1.50 of low-cost (our cost of funds for the quarter ended March 31, 2025 is 94 basis points) core operating and escrow deposits from these law firms through our branchless platform, fueling and funding additional growth in our other asset classes. Our extremely low historic delinquency rates and low charge-off rates clearly demonstrate our strong underwriting process and expertise in this vertical. Our longer duration escrow or claimant trust settlement deposits represent accounts where the law firm is trustee for the claimant settlement funds and represent $961.4 million, or 57%, of total deposits at March 31, 2025. These law firm escrow accounts as well as other fiduciary deposit accounts are for the benefit of the law firm’s customers (or claimants) and are titled in a manner to ensure that the maximum amount of FDIC insurance coverage passes through the account to the beneficial owner of the funds held in the account. Therefore, these law firm escrow accounts carry FDIC insurance at the claimant settlement level, not at the deposit account level. Coupling these types of commercial relationships with our off-balance sheet commercial litigation funds of $468.8 million at March 31, 2025, makes this litigation vertical a highly desirable core low-cost funding platform fueling bank-wide growth.

Payment Processing. The payment processing (merchant acquiring) market will continue to be a growth opportunity for our company, as we offer focused and tailored products and services to small businesses nationally. The payment industry grew approximately 11% on a compound annual growth rate from 2020 to 2024 with payment volumes or TAM of $11.6 trillion according to company records on U.S. payment industry trends. Couple this with the fact that there are less than 100 acquiring financial institutions in the U.S., this vertical represents a growth opportunity for our Company. We believe there are various and significant barriers to entry to this market including, but not limited to, our industry track record, extensive in-house experience, strong relationships with non-bank acquirers, and our unique approach to servicing these small business merchants and their respective verticals. We use proprietary and industry leading technology to ensure card brand and regulatory compliance, support multiple processing platforms, manage daily risk across approximately 90,000 small business merchants in all 50 states, and perform commercial treasury clearing services for approximately $9 billion in credit and debit card processing volume across 140 million transactions in the quarter ended March 31, 2025.

Proprietary Technology. We are a digital first company utilizing best-in-class technology to fuel future growth with industry leading client retention rates. We have built a customized and fully integrated customer relationship management (“CRM”) platform, integrated into our digital marketing cloud and our nCino loan platform (all built on Salesforce for excellence in client service and operational efficiency) and invest in artificial intelligence (“AI”) to facilitate precision marketing and client acquisition across both national verticals with an initial focus on the litigation vertical.

The success of our national litigation and payment processing verticals coupled with our focus on branchless technology has led to industry leading performance. For the quarter ended March 31, 2025, we have produced industry leading returns including, but not limited to, an average return on assets and equity of 2.39% and 19.13%, respectively; industry leading net interest margin of 5.96%; strong efficiency ratio of 49.6%; and a diversified revenue stream as demonstrated by a strong net interest margin and stable fee income representing 18% of total revenue (our payment processing vertical has a compound annual growth rate of 14% since 2020). Coupling these performance metrics with strong balance sheet management including, but not limited to, loan portfolio diversification, an asset sensitive balance sheet with approximately 66% of our loans being variable rate and tied to prime, with interest rate floors in place on 90% of our variable rate loan portfolio, solid credit metrics, a stable low cost deposit base, and strong available liquidity of $1.11 billion, or 66% of deposits, with no outstanding borrowings, positions our Company for future growth and success.

Comparison of Financial Condition at March 31, 2025 and December 31, 2024

Assets. Our total assets were $1.95 billion at March 31, 2025, an increase of $61.9 million, or 3.3%, from $1.89 billion at December 31, 2024, due to increases in cash and cash equivalents of $46.7 million, or 37.0%, growth in loans held for investment of $18.8 million, or 1.3%, partially offset by a decrease in securities available-for-sale of $4.8 million, or 2.0%.

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Loan Portfolio Analysis. At March 31, 2025, loans, net of deferred fees and unearned premiums, were $1.42 billion, or 83.9% of total deposits, compared to $1.40 billion, or 85.1% of total deposits, at December 31, 2024. The growth in loans was primarily driven by net production in commercial loans and multifamily loans. Commercial loans increased $13.6 million, or 1.5%, to $934.1 million at March 31, 2025 from $920.6 million at December 31, 2024. Multifamily loans increased $9.7 million, or 2.7%, to $364.9 million at March 31, 2025 from $355.2 million at December 31, 2024.

Loan Portfolio Composition. The following table sets forth the composition of our loan portfolio by type of loan at the dates indicated:


	March 31,				December 31,
	2025				2024
	Amount		Percent		Amount		Percent

	(Dollars in thousands)
Real estate:
Multifamily	$	364,877	25.8	%	$	355,165	25.4	%
Commercial real estate		86,797	6.1			87,038	6.2
1 – 4 family		10,974	0.8			14,665	1.1
Total real estate		462,648	32.7			456,868	32.7
Commercial		934,141	66.0			920,567	65.9
Consumer		18,705	1.3			19,339	1.4
Total loans held for investment	$	1,415,494	100.0	%	$	1,396,774	100.0	%
Deferred loan fees and unearned premiums, net		364				247
Allowance for credit losses		(19,461)				(20,979)
Loans held for investment, net	$	1,396,397			$	1,376,042

The following table sets forth the composition of our held for investment Litigation-Related Loan portfolio by type of loan at the dates indicated:


	March 31,				December 31,
	2025				2024
	Amount		Percent		Amount		Percent

	(Dollars in thousands)
Litigation-Related Loans:
Commercial Litigation-Related:
Working capital lines of credit	$	522,814	62.4	%	$	531,574	63.4	%
Case cost lines of credit		193,808	23.1			185,204	22.1
Term loans		118,793	14.2			119,061	14.2
Total Commercial Litigation-Related		835,415	99.7			835,839	99.7
Consumer Litigation-Related:
Post-settlement consumer loans		2,622	0.3			2,716	0.3
Total Consumer Litigation-Related		2,622	0.3			2,716	0.3
Total Litigation-Related Loans	$	838,037	100.0	%	$	838,555	100.0	%

At March 31, 2025, our Litigation-Related loans, which include commercial and consumer lending to attorneys, law firms and plaintiffs/claimants, totaled $838.0 million, or 59.2% of our total loan portfolio, compared to $838.6 million, or 60.0% of our total loan portfolio at December 31, 2024. We also had Commercial Litigation-Related committed and uncommitted undrawn lines of credit totaling $90.7 million and $680.6 million, respectively, at March 31, 2025.

Litigation-Related post-settlement consumer loans decreased $94 thousand to $2.6 million as of March 31, 2025, from $2.7 million as of December 31, 2024.

Debt Securities Portfolio. Securities available-for-sale decreased $4.8 million, or 2.0%, to $236.9 million at March 31, 2025 from $241.7 million at December 31, 2024, due to paydowns of $8.5 million, offset by unrealized gains

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of $3.8 million. Securities held-to-maturity decreased $1.9 million, or 2.8%, to $66.7 million at March 31, 2025 from $68.7 million at December 31, 2024, driven by paydowns of $1.9 million and net premium amortization of $25 thousand.

Funding. Total deposits increased $45.9 million, or 2.8%, to $1.69 billion at March 31, 2025 from $1.64 billion at December 31, 2024. We continue to focus on the acquisition and expansion of core deposit relationships. Core deposits, which we define as total deposits excluding time deposits, totaled $1.68 billion at March 31, 2025, or 99.6% of total deposits, compared to $1.63 billion or 99.1% of total deposits at December 31, 2024. Litigation and payment processing deposits represent $1.42 billion, or 84.1%, of total deposits at March 31, 2025. Savings, NOW and money market deposits increased $28.6 million, or 2.5%, to $1.16 billion at March 31, 2025.

Core commercial relationship banking clients in our two national verticals represent approximately 80% of our $1.69 billion deposit base at March 31, 2025. These relationship banking clients are derived from coupling lending facilities, payment processing, and other unique custodial banking needs with commercial cash management depository services. Our deposit strategy primarily focuses on developing full service commercial banking relationships with our clients through commercial lending facilities, payment processing, and other unique commercial cash management services in our two national verticals, rather than competing with other institutions on rate. Our longer duration interest on lawyer trust accounts (“IOLTA”), escrow and settlement deposits represent $961.4 million, or 57.0%, of total deposits. As of March 31, 2025, uninsured deposits were $525.6 million, or 31%, of our total deposits of $1.69 billion, excluding $11.3 million of affiliate deposits held at the Bank. Approximately 80% of our uninsured deposits represent clients with full commercial relationship banking with us (commercial loans, payment processing, and other commercial service-oriented relationships) including, but not limited to, law firm operating accounts, law firm IOLTA/escrow accounts, merchant reserves, ISO reserves, ACH processing, and custodial accounts.

Due to the nature of our larger mass tort and class action settlements related to the litigation vertical, we participate in FDIC insured sweep programs as well as treasury secured money market funds. As of March 31, 2025, off-balance sheet sweep funds totaled approximately $468.8 million, of which approximately $442.8 million, or 94.5%, was available to be swept onto our balance sheet as reciprocal client relationship deposits. Our core low-cost deposit growth and off-balance sheet client funds continue to clearly demonstrate our highly efficient, full service commercial relationship and tech-enabled cash management platform.

At March 31, 2025, we had the ability to borrow, on a secured basis, up to $429.6 million from the Federal Home Loan Bank of New York and $50.8 million from the Federal Reserve Bank of New York discount window. At March 31, 2025, we also had $17.5 million in aggregate unsecured lines of credit with unaffiliated correspondent banks. No borrowing amounts were outstanding during the first quarter of 2025. Historically, we have not leveraged our balance sheet to generate earnings and have always utilized core client deposits to fund our asset growth and related earnings.

Stockholders’ Equity. Total stockholders’ equity increased $13.6 million to $250.7 million at March 31, 2025, from $237.1 million at December 31, 2024, primarily due to net income of $11.4 million and other comprehensive income of $2.6 million, as unrealized losses on our securities available-for-sale declined due to current short-term market interest rates, and amortization of share-based compensation of $1.1 million, partially offset by dividends declared to common stockholders of $1.5 million.

Asset Quality. Nonperforming assets consisted of one multifamily loan totaling $8.0 million as of March 31, 2025 and $10.9 million as of December 31, 2024. We had no exposure to commercial office space, no construction loans, and $14.5 million in performing loans to the hospitality industry. The allowance for credit losses was $19.5 million, or 1.37% of total loans, as of March 31, 2025, as compared to $21.0 million, or 1.50% of total loans at December 31, 2024. Effective March 31, 2025, a $2.9 million charge-off on the one nonperforming multifamily loan was recognized based on our proposed restructuring of this credit with the borrower in April 2025. We anticipate that this restructuring will be completed in the second quarter of 2025 with the goal of returning this nonperforming credit facility to performing status, based on future sustained performance metrics, in the latter part of 2025. The decrease in the allowance as a percentage of loans was a result of management’s revaluation of credit risk in our multifamily portfolio subsequent to a $2.9 million charge-off recognized, which was partially offset by an increase in the general reserve considering loan growth, loan composition, and the current uncertain economic and short-term interest rate environment including, but not limited to, its potential impact on the New York metro multifamily and commercial real estate market. At March 31, 2025, special mention and

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substandard loans totaled $4.0 million and $8.0 million, respectively, compared to $4.0 million and $10.9 million, respectively, as of December 31, 2024. The ratio of nonperforming loans to total loans and total assets was 0.57% and 0.41%, respectively, as of March 31, 2025, as compared to 0.78% and 0.58%, respectively, as of December 31, 2024. The allowance for credit losses to the nonperforming loans was 243% as of March 31, 2025, as compared to 192% as of December 31, 2024.

The following is a brief summary of our risk management results for our multifamily and CRE portfolios as of March 31, 2025:

●

The multifamily portfolio, excluding one nonperforming loan, totaling $356.9 million, has a current weighted average DSCR and an original LTV (defined as unpaid principal balance as of March 31, 2025 divided by appraised value at origination) of approximately 1.62 and 55%, respectively, and the CRE portfolio, totaling $86.8 million, has a current weighted average DSCR and an original LTV of approximately 1.52 and 58%, respectively.

●

Multifamily loans maturing in less than one year totaled $61.6 million and had a current weighted average DSCR and an original LTV of approximately 1.32 and 58%, respectively. CRE loans maturing in less than one year totaled $2.2 million and had a current weighted average DSCR and an original LTV of approximately 1.53 and 60%, respectively.

●

Multifamily loans maturing in one to two years totaled $54.1 million and had a current weighted average DSCR and an original LTV of approximately 1.38 and 68%, respectively. CRE loans maturing in one to two years totaled $9.6 million and had a current weighted average DSCR and an original LTV of approximately 1.59 and 60%, respectively.

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Average Balance Sheets and Rate/Volume Analysis

The following tables present average balance sheet information, interest income, interest expense and the corresponding average yields earned and rates paid for periods indicated. The average balances are daily averages and, for loans, include both performing and nonperforming balances. Interest income on loans includes the effects of net premium amortization and net deferred loan origination fees accounted for as yield adjustments. No tax-equivalent yield adjustments have been made as we have no tax exempt investments.


	Three Months Ended March 31,
	2025						2024
	Average				Average		Average				Average
	Balance		Interest		Yield/Cost		Balance		Interest		Yield/Cost

					(Dollars in thousands)
INTEREST EARNING ASSETS
Loans, held for investment	$	1,394,602	$	26,810	7.80	%	$	1,208,429	$	23,389	7.78	%
Securities, includes restricted stock		327,838		3,042	3.76	%		226,175		1,605	2.85	%
Interest earning cash and other		155,768		1,661	4.32	%		81,740		1,079	5.31	%
Total interest earning assets		1,878,208		31,513	6.80	%		1,516,344		26,073	6.92	%

NONINTEREST EARNING ASSETS		60,877						48,602

TOTAL AVERAGE ASSETS	$	1,939,085					$	1,564,946

INTEREST BEARING LIABILITIES

Savings, NOW, Money Market deposits	$	1,134,099	$	3,784	1.35	%	$	860,159	$	3,098	1.45	%
Time deposits		10,806		119	4.47	%		11,041		111	4.04	%
Total interest bearing deposits		1,144,905		3,903	1.38	%		871,200		3,209	1.48	%
Borrowings		43		1	9.43	%		45		1	8.94	%
Total interest bearing liabilities		1,144,948		3,904	1.38	%		871,245		3,210	1.48	%

NONINTEREST BEARING LIABILITIES
Demand deposits		535,182						477,020
Other liabilities		17,142						15,787
Total noninterest bearing liabilities		552,324						492,807
Stockholders' equity		241,813						200,894

TOTAL AVG. LIABILITIES AND EQUITY	$	1,939,085					$	1,564,946
Net interest income			$	27,609					$	22,863
Net interest spread					5.42	%					5.44	%
Net interest margin					5.96	%					6.06	%
Deposits (including noninterest bearing demand deposits)	$	1,680,087	$	3,903	0.94	%	$	1,348,220	$	3,209	0.96	%

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The following table presents the dollar amount of changes in interest income and interest expense for major components of interest earning assets and interest bearing liabilities for the periods indicated. The table distinguishes between: (1) changes attributable to volume (changes in volume multiplied by the prior period’s rate); (2) changes attributable to rate (change in rate multiplied by the prior year’s volume); and (3) total increase (decrease) (the sum of the previous columns). Changes attributable to both volume and rate are allocated ratably between the volume and rate categories.


	Three Months Ended
	March 31,
	2025 vs. 2024
	Increase				Total
	(Decrease) due to				Increase
	Volume		Rate		(Decrease)

	(In thousands)
Interest earned on:
Loans held for investment	$	3,388	$	33	$	3,421
Securities, includes restricted stock		841		596		1,437
Interest earning cash and other		813		(231)		582
Total interest income		5,042		398		5,440

Interest paid on:
Savings, NOW, money market deposits		904		(218)		686
Time deposits		(3)		11		8
Total deposits		901		(207)		694
Borrowings		—		—		—
Total interest expense		901		(207)		694
Change in net interest income	$	4,141	$	605	$	4,746

Comparison of Operating Results for the Three Months Ended March 31, 2025 and 2024

General. Net income increased $1.3 million, or 13.4%, to $11.4 million for the three months ended March 31, 2025 from $10.1 million for the three months ended March 31, 2024. The increase resulted from a $4.7 million increase in net interest income, partially offset by an increase of $2.2 million in noninterest expense and a decrease of $238 thousand in noninterest income.

Net Interest Income. Net interest income increased $4.7 million, or 20.8%, to $27.6 million for the three months ended March 31, 2025 from $22.9 million for the three months ended March 31, 2024, due to a $5.4 million increase in interest income, partially offset by a $694 thousand increase in interest expense.

Our net interest margin of 5.96% decreased 10 basis points, driven by the change in composition of our average interest earning assets (primarily securities and interest earning cash balances) funded with low-cost core deposits as well as decreases in short-term market interest rates. Average loan yields increased 2 basis points to 7.80% while average loans increased $186.2 million, or 15.4%, to $1.39 billion. Average securities increased $101.7 million, or 45.0%, to $327.8 million as management elected to ratably purchase short duration agency mortgage-backed securities throughout 2024, in light of tempering commercial real estate growth, which increased the portfolio’s yield by 91 basis points to 3.76%. Average interest bearing deposit balances (primarily IOLTA) increased $273.9 million, or 31.8%, when compared to March 31, 2024 where our deposit cost-of-funds, excluding demand deposits, decreased 10 basis points to 1.38% due to increases in low-cost IOLTA deposits. Due to our significant deposit growth, average interest earning cash balances, a lower yielding asset category at 4.32%, remained elevated at $155.8 million, negatively impacting our net interest margin, despite our success in deploying excess cash into higher yielding commercial loans and securities on a linked quarter basis.

Interest Income. Interest income increased $5.4 million, or 20.9%, to $31.5 million for the three months ended March 31, 2025 from $26.1 million for the three months ended March 31, 2024 and was attributable to increases in loan, securities and interest earning cash and other interest income. Throughout 2024, management tempered multifamily and

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commercial real estate loan growth in response to the economic environment, replacing the growth with the purchases of short duration agency mortgage-backed securities. This decision further enhanced our liquidity profile and improved our securities to asset ratio to approximately 16% at March 31, 2025 from 13% at March 31, 2024.

Loan interest income increased $3.4 million, or 14.6%, to $26.8 million for the three months ended March 31, 2025 from $23.4 million for the three months ended March 31, 2024. This increase was attributable to a $186.2 million, or 15.4%, increase in the average loan balance due to growth in our higher yielding national litigation lending platform that grew $187.5 million, or 25.5%, and a 2 basis point increase in loan yields to 7.80%. Our loan platform growth (primarily commercial) drove a $3.4 million increase in interest income, all of which was due to increased volume while our loan yields remained consistent. The commercial loan portfolio yield for the quarter ended March 31, 2025 was 9.40%.

Securities interest income increased $1.4 million, or 89.5%, to $3.0 million for the three months ended March 31, 2025 from $1.6 million for the three months ended March 31, 2024, driven by purchases of short duration agency mortgage-backed securities throughout 2024. Average securities increased $101.7 million, or 44.9%, to $327.8 million as management elected to ratably purchase short duration agency mortgage-backed securities throughout 2024, in light of tempering commercial real estate growth, at commensurate risk adjusted yields. Securities interest income increased by $1.4 million with $841 thousand attributable to average volume increases and $596 thousand attributable to increases in average rate as new positions were acquired at a market rate higher than the blended rate of the legacy portfolio.

Interest earning cash interest income increased $582 thousand to $1.7 million for the three months ended March 31, 2025 from $1.1 million for the three months ended March 31, 2024, attributable to a $74.0 million, or 90.6%, increase in the average balance of interest earning cash. Average interest earning cash balances, a lower yielding asset category, remained elevated at $155.8 million, negatively impacting our net interest margin, despite our success in deploying excess cash into higher yielding commercial loans and securities on a linked quarter basis. Interest earning cash income increased by $582 thousand with $813 thousand attributable to average volume increases, offset by a $231 thousand decrease attributable to decreases in short term rates.

Interest Expense. Interest expense increased $694 thousand, or 21.6%, to $3.9 million for the three months ended March 31, 2025 from $3.2 million for the three months ended March 31, 2024, attributable to increases in average deposit balances (primarily IOLTA) comprising $901 thousand of the interest expense movement, offset by a decrease of $207 thousand attributable to deposit product composition. Average deposits increased $331.9 million, or 24.6%, to $1.68 billion, led by increases in escrow or IOLTA, noninterest bearing demand, and money market (both commercial and personal) deposits totaling $259.6 million, $58.2 million, and $17.9 million, respectively, when comparing the three months ended March 31, 2025 to the prior year period.

Provision for Credit Losses. Our provision for credit losses was $1.5 million for the three months ended March 31, 2025, an increase of $500 thousand from the $1.0 million provision for the three months ended March 31, 2024. As of March 31, 2025, our allowance to loans ratio was 1.37% as compared to 1.43% as of March 31, 2024. The decrease in the allowance as a percentage of loans was a result of management’s revaluation of credit risk in our multifamily portfolio subsequent to a $2.9 million charge-off recognized, which was partially offset by an increase in the general reserve considering loan growth, loan composition, and the current uncertain economic and short-term interest rate environment including, but not limited to, its potential impact on the New York metro multifamily and commercial real estate market.

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Noninterest Income. Noninterest income information is as follows:


	Three Months Ended
	March 31,				Change
	2025		2024		Amount		Percent

	(Dollars in thousands)
Payment processing fees:
Payment processing income	$	4,750	$	5,100	$	(350)	(6.9)	%
ACH income		162		196		(34)	(17.3)
Total payment processing fees		4,912		5,296		(384)	(7.3)
Customer related fees, service charges and other:
Administrative service income		880		746		134	18.0
Other		359		347		12	3.5
Total customer related fees, service charges and other		1,239		1,093		146	13.4
Total noninterest income	$	6,151	$	6,389	$	(238)	(3.7)	%

Payment processing income was $4.9 million for the quarter ended March 31, 2025, a $384 thousand decrease from the same period in 2024, primarily due to changes in our overall merchant risk profile and composition. Payment processing volumes for the credit and debit card processing platform increased $673.3 million, or 7.8%, to $9.3 billion and transactions decreased 10.1 million, or 6.7%, to 140.4 million for the quarter ended March 31, 2025, as compared to the same period in 2024. We continue to focus on the expansion of sales channels through ISOs, prudently managing risk while focusing on new merchant originations, increasing overall volumes, and expanding our technology and other resources in the payment vertical. The Company utilizes proprietary and industry leading/customized technology to ensure card brand and regulatory compliance, supports multiple processing platforms, manages daily risk across 90,000 small business merchants in all 50 states, and performs commercial treasury clearing services for $9.3 billion in volume across 140.4 million in transactions in the quarter ended March 31, 2025. ASP fee income increased $134 thousand to $880 thousand for the first quarter of 2025. ASP fee income is directly impacted by the average balances of off-balance sheet sweep funds as well as current short-term market interest rates. Off-balance sheet sweep funds totaled $468.8 million at March 31, 2025, demonstrating the continued strength of our branchless core business model. Other income increased $12 thousand, or 3.5%, to $359 thousand due to increases in loan and other banking fees.

Noninterest Expense. Noninterest expense information is as follows:


	Three Months Ended
	March 31,				Change
	2025		2024		Amount		Percent

	(Dollars in thousands)
Noninterest expense:
Employee compensation and benefits	$	10,065	$	9,161	$	904	9.9	%
Occupancy and equipment		1,132		927		205	22.1
Professional and consulting services		1,264		951		313	32.9
FDIC and regulatory assessments		270		222		48	21.6
Advertising and marketing		851		872		(21)	(2.4)
Travel and business relations		306		278		28	10.1
Data processing		1,920		1,511		409	27.1
Other operating expenses		940		646		294	45.5
Total noninterest expense	$	16,748	$	14,568	$	2,180	15.0	%

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Employee compensation and benefits costs increased primarily due to increases in sales commissions, bonuses, year-end stock grants and related stock-based compensation, and, to a lesser extent, the impact of year end salary increases. The increase in sales related commissions is directly related to our regional business development officer (“BDO”) strategy and their success in the litigation market, attracting full-service commercial banking clients nationally and directly impacting commercial lending and core-deposit growth. Data processing costs increased due to increases in core banking processing volumes and the continued implementation/improvement of technology supporting client relationships and lead acquisition initiatives (CRM platform, digital marketing, business development, and lending) as well as overall risk management across all platforms. Professional and consulting services costs increased due to continuously evaluating business development opportunities in our national verticals, increased insurance and accounting costs, and costs related to the staffing needs for our Los Angeles private banking branch (scheduled to open in the summer of 2025). Occupancy and equipment costs increased due to amortization of internally developed software to support our digital marketing and risk management platforms and rent commencement related to our Los Angeles private banking branch. Other operating costs increased due to increases in regulatory expenses and other client development costs.

Income Tax Expense. We recorded income tax expense of $4.1 million for the three months ended March 31, 2025, reflecting an effective tax rate of 26.5%, compared to $3.6 million, or 26.5%, for the three months ended March 31, 2024.

Management of Market Risk

General. The principal objective of our asset and liability management function is to evaluate the interest rate risk within the balance sheet and pursue a controlled assumption of interest rate risk while maximizing net income and preserving adequate levels of liquidity and capital. The board of directors of our bank has oversight of our asset and liability management function, which is managed by our Asset/Liability Management Committee. Our Asset/Liability Management Committee meets regularly to review, among other things, the sensitivity of our assets and liabilities to market interest rate changes, local and national market conditions and market interest rates. That group also reviews our liquidity, capital, deposit mix, loan mix and investment positions.

As a financial institution, our primary component of market risk is interest rate volatility. Fluctuations in interest rates will ultimately impact both the level of income and expense recorded on most of our assets and liabilities, and the fair value of all interest earning assets and interest bearing liabilities, other than those which have a short-term to maturity. Interest rate risk is the potential of economic losses due to future interest rate changes. These economic losses can be reflected as a loss of future net interest income and/or a loss of current fair values. The objective is to measure the effect on net interest income and to adjust the balance sheet to minimize the inherent risk while at the same time maximizing income.

We manage our exposure to interest rates primarily by structuring our balance sheet in the ordinary course of business. We do not typically enter into derivative contracts for the purpose of managing interest rate risk, but we may do so in the future. Based upon the nature of our operations, we are not subject to foreign exchange or commodity price risk. We do not own any trading assets.

Net Interest Income Simulation. We use an interest rate risk simulation model to test the interest rate sensitivity of net interest income and the balance sheet. Instantaneous parallel rate shift scenarios are modeled and utilized to evaluate risk and establish exposure limits for acceptable changes in net interest margin. These scenarios, known as rate shocks, simulate an instantaneous change in interest rates and use various assumptions, including, but not limited to, prepayments on loans and securities, deposit decay rates, pricing decisions on loans and deposits, reinvestment and replacement of asset and liability cash flows.

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The following table presents the estimated changes in net interest income of Esquire Bank, National Association, calculated on a bank-only basis, which would result from changes in market interest rates over a twelve-month period beginning March 31, 2025.


	March 31,
	2025
	Estimated
Changes in	12-Months
Interest Rates	Net Interest
(Basis Points)	Income			Change

	(Dollars in thousands)
300	$	154,372	$	24,920
200		145,705		16,253
100		136,826		7,374
0		129,452		—
-100		122,724		(6,728)
-200		115,438		(14,014)
-300		108,000		(21,452)

Economic Value of Equity Simulation. We also analyze our sensitivity to changes in interest rates through an economic value of equity (“EVE”) model. EVE represents the present value of the expected cash flows from our assets less the present value of the expected cash flows arising from our liabilities adjusted for the value of off-balance sheet contracts. EVE attempts to quantify our economic value using a discounted cash flow methodology. We estimate what our EVE would be as of a specific date. We then calculate what EVE would be as of the same date throughout a series of interest rate scenarios representing immediate and permanent, parallel shifts in the yield curve.

The following table presents the estimated changes in EVE of Esquire Bank, National Association, calculated on a bank-only basis that would result from changes in market interest rates at March 31, 2025.


	March 31,
	2025
Changes in	Economic
Interest Rates	Value of
(Basis Points)	Equity			Change

	(Dollars in thousands)
300	$	454,483	$	61,554
200		437,099		44,170
100		416,366		23,437
0		392,929		—
-100		362,440		(30,489)
-200		326,468		(66,461)
-300		285,408		(107,521)

Many assumptions are used to calculate the impact of interest rate fluctuations. Actual results may be significantly different than our projections due to several factors, including the timing and frequency of rate changes, market conditions and the shape of the yield curve. The computations of interest rate risk shown above do not include actions that our management may undertake to manage the risks in response to anticipated changes in interest rates, and actual results may also differ due to any actions taken in response to the changing rates.

Liquidity and Capital Resources

Liquidity is the ability to meet current and future financial obligations of a short-term nature. Our primary sources of funds consist of deposit inflows, loan repayments and maturities and sales of securities. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions and competition.

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We regularly review the need to adjust our investments in liquid assets based upon our assessment of: (1) expected loan demand, (2) expected deposit flows, (3) yields available on interest earning deposits and securities, and (4) the objectives of our asset/liability management program. Excess liquid assets are invested generally in interest earning deposits and short duration securities.

Our most liquid assets are cash and cash equivalents. The levels of these assets are dependent on our operating, financing, lending and investing activities during any given period. At March 31, 2025, cash and cash equivalents totaled $173.0 million.

At March 31, 2025, through pledging of our securities and certain loans, we had the ability to borrow, on a secured basis, up to $429.6 million from the FHLB of New York and $50.8 million from the FRB of New York discount window. At March 31, 2025, we also had $17.5 million in aggregated unsecured lines of credit with unaffiliated correspondent banks. No amounts were outstanding on any of the aforementioned lines as of March 31, 2025.

At March 31, 2025, our off-balance sheet sweeps funds totaled $468.8 million, of which $442.8 million, or 94.5%, was available to be swept on balance sheet as reciprocal client deposits.

Our overall liquidity position (cash, borrowing capacity, and available reciprocal client sweep balances) totaled $1.11 billion at March 31, 2025, or 66% of total deposits, creating a highly liquid and unlevered balance sheet.

We have no material commitments or demands that are likely to affect our liquidity other than set forth below. In the event loan demand were to increase faster than expected, or any unforeseen demand or commitment were to occur, we could access our borrowing capacity with the FHLB, FRB, correspondent bank lines or through reciprocal deposits.

Esquire Bank is subject to various regulatory capital requirements administered by the Office of the Comptroller of the Currency (the “OCC”), and the Federal Deposit Insurance Corporation. At March 31, 2025, Esquire Bank exceeded all applicable regulatory capital requirements, and was considered “well capitalized” under regulatory guidelines.

We manage our capital to comply with our internal planning targets and regulatory capital standards administered by the OCC and review capital levels on a monthly basis.

The following table presents our capital ratios as of the indicated dates for Esquire Bank.


			For Capital Adequacy
			Purposes
			Minimum Capital with		Actual
	“Well Capitalized”		Conservation Buffer		At March 31, 2025
Total Risk-based Capital Ratio
Bank	10.00	%	10.50	%	16.49	%

Tier 1 Risk-based Capital Ratio
Bank	8.00	%	8.50	%	15.24	%

Common Equity Tier 1 Capital Ratio
Bank	6.50	%	7.00	%	15.24	%

Tier 1 Leverage Ratio
Bank	5.00	%	4.00	%	12.01	%

Effective January 1, 2020, the federal banking agencies adopted a rule to establish for institutions with assets of less than $10 billion that meet other specified criteria a “community bank leverage ratio” (the ratio of a bank’s tangible equity capital to average total consolidated assets) of 9% that such institutions may elect to utilize in lieu of the generally applicable leverage and risk-based capital requirements noted above. A “qualifying community bank” with capital

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exceeding 9% will be considered compliant with all applicable regulatory capital and leverage requirements, including the requirement to be “well capitalized”. For the current period, Esquire Bank has elected to continue to utilize the generally applicable leverage and risk based requirements and not apply the community bank leverage ratio.

Effects of Inflation. The impact of inflation, as it affects banks, differs substantially from the impact on non-financial institutions. Banks have assets which are primarily monetary in nature and which tend to move with inflation. This is especially true for banks with a high percentage of rate sensitive interest-earning assets and interest-bearing liabilities. A bank can further reduce the impact of inflation with proper management of its rate sensitivity gap. This gap represents the difference between interest rate sensitive assets and interest rate sensitive liabilities. The Company attempts to structure its assets and liabilities and manages its gap to protect against substantial changes in interest rate scenarios, in order to minimize the potential effects of inflation.

Item 3.Quantitative and Qualitative Disclosures About Market Risk

The information required by this item is included in Item 2 of this quarterly report under “Management of Market Risk.”

Item 4.Controls and Procedures

An evaluation was performed under the supervision and with the participation of the Company’s management, including the Principal Executive Officer and the Principal Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act of 1934, as amended) as of March 31, 2025. Based on that evaluation, the Company’s Principal Executive Officer and Principal Financial Officer concluded that the Company’s disclosure controls and procedures were effective.

During the quarter ended March 31, 2025, there have been no changes in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

Periodically, we are involved in claims and lawsuits, such as claims to enforce liens, condemnation proceedings on properties in which we hold security interests, claims involving the making and servicing of real property loans and other issues incident to our business. At March 31, 2025, we are not a party to any pending legal proceedings that we believe would have a material adverse effect on our financial condition, results of operations or cash flows.

Item 1A. Risk Factors

There have been no material changes to our risk factors as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table presents information regarding the purchase of our common stock during the quarter ended March 31, 2025 and the stock repurchase program approved by our Board of Directors.


Period	Total number of shares purchased		Average price paid per share	Total number of shares purchased as part of publicly announced plans or programs	Maximum number of shares that may yet be purchased under the plans or programs (1)
January 1, 2025 through January 31, 2025	—	$	—	—	257,694
February 1, 2025 through February 28, 2025	—		—	—	257,694
March 1, 2025 through March 31, 2025	—		—	—	257,694

(1)

On January 9, 2019, the Company announced a share repurchase program, which authorized the purchase of up to 300,000 shares of common stock. There is no expiration date for the stock repurchase program.

Participants in the Company’s stock-based incentive plans may have shares withheld to cover income taxes upon the vesting of restricted stock awards pursuant to the terms of the applicable plan and not under the Company’s share repurchase program. Shares repurchased pursuant to these plans during the three months ended March 31, 2025 were as follows:


Period	Total number of shares purchased		Average price paid per share
January 1, 2025 through January 31, 2025	—	$	—
February 1, 2025 through February 28, 2025	—		—
March 1, 2025 through March 31, 2025	—		—

Participants in the Company’s stock-based incentive plans may also net settle shares in order to facilitate the exercise of stock options which is considered a cashless option exercise resulting in a net issuance of shares to the participant with no change in treasury stock.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

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Item 5. Other Information

During the first quarter of 2025, none of our directors or officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement,” as that term is used in SEC regulations.

Item 6. Exhibits


Exhibit
Number		Description

3.1		Articles of Incorporation of Esquire Financial Holdings, Inc. (1)

3.2		Amended and Restated Bylaws of Esquire Financial Holdings, Inc. (2)

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32		Written Statement of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.0		The following materials for the quarter ended March 31, 2025, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) Consolidated Statements of Financial Condition, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Changes in Stockholders’ Equity (v) Consolidated Statements of Cash Flows and (v) Notes to the Consolidated Financial Statements, tagged as blocks of text and including detailed tags.

104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

(1)	Incorporated by reference to Exhibit 3.1 in the Registration Statement on Form S-1 (File No. 333-218372) originally filed by the Company under the Securities Act of 1933 with the Commission on May 31, 2017, and all amendments or reports filed thereto.

(2)	Incorporated by reference to Exhibit 3.2 in the Registration Statement on Form S-1/A (File No. 333-218372) originally filed by the Company under the Securities Act of 1933 with the Commission on June 22, 2017, and all amendments or reports filed thereto.

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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 thereunto duly authorized.


	ESQUIRE FINANCIAL HOLDINGS, INC.

Date: May 12, 2025	/s/ Andrew C. Sagliocca
	Andrew C. Sagliocca
	Vice Chairman, Chief Executive Officer and President

Date: May 12, 2025	/s/ Michael Lacapria
	Michael Lacapria
	Senior Vice President and Chief Financial Officer