Market Overview - As of March 31, 2023, the company operates as a full-service commercial bank focused on the litigation industry and small businesses, with a total addressable market of $443 billion for 2020 in the U.S. tort actions sector [125]. - The company has clients in 28 states, with significant markets including New York, California, Texas, Florida, Pennsylvania, South Carolina, and New Jersey [126]. - The litigation market is projected to consume 1.85%-2.13% of U.S. GDP annually, indicating a strong growth opportunity for the company [125]. Financial Performance - The company reported a return on average assets of 3.68% and a return on average equity of 30.45% for the quarter ended March 31, 2023 [130]. - Net income increased by $6.8 million, or 128.0%, to $12.2 million for the three months ended March 31, 2023, compared to $5.3 million for the same period in 2022 [148]. - Net interest income rose by $7.5 million, or 63.7%, to $19.3 million for the three months ended March 31, 2023, driven by an $8.3 million increase in interest income [149]. - Noninterest income surged by $4.8 million, or 86.5%, to $10.3 million, primarily due to a $4.0 million nonrecurring gain on an equity investment [158]. - Total noninterest expense increased by $3.1 million, or 33.1%, to $12.5 million, with significant rises in employee compensation and professional services [161]. Asset and Liability Management - Total assets increased by $55.2 million, or 4.0%, to $1.5 billion as of March 31, 2023, driven by a 24.2% increase in cash and cash equivalents [132]. - Loans held for investment grew to $966.9 million, representing 76.4% of total deposits, with commercial loans increasing by $13.8 million, or 2.5% [133]. - Total deposits rose by $36.1 million, or 2.9%, to $1.3 billion, with demand deposits increasing by $104.2 million, or 23.4% [137]. - The allowance for credit losses was $13.0 million, or 1.34% of total loans, reflecting an increase due to loan growth and economic uncertainties [142]. - Off-balance sheet sweep funds totaled approximately $262.5 million, with $140.5 million available to be swept back onto the balance sheet [139]. Interest Income and Margin - Interest income increased by $8.3 million, or 69.4%, to $20.4 million for the three months ended March 31, 2023, attributed to growth in loans, securities, and interest earning cash [151]. - Loan interest income increased by $6.6 million, or 59.8%, to $17.6 million, supported by a $175.4 million, or 22.6%, increase in average loan balance [152]. - The net interest margin improved by 160 basis points to 6.03% for the three months ended March 31, 2023, from 4.43% in the prior year [150]. - The net interest margin was 6.03%, with stable fee income representing 21% of total revenue, including a nonrecurring gain of $4.0 million [130]. Credit Losses and Provisions - The provision for credit losses was $500 thousand, a decrease of $140 thousand from the previous year, with an allowance to loans ratio of 1.34% [157]. - The company maintained no nonperforming assets as of March 31, 2023, with special mention loans decreasing from $13.7 million to $5.4 million [142]. Technology and Competitive Edge - The company emphasizes its unique ability to combine traditional commercial underwriting with non-traditional asset-based underwriting, enhancing its competitive edge [126]. - The company’s future success relies on developing and embracing cutting-edge technology to differentiate itself from other financial firms [124]. Economic and Regulatory Risks - The company faces risks from economic conditions, competition, and regulatory changes that could impact its financial performance [123]. Capital and Liquidity - Total stockholders' equity increased by $12.6 million to $170.8 million, primarily due to net income of $12.2 million [141]. - The overall liquidity position was $588.4 million, representing 47% of total deposits, indicating a highly liquid balance sheet [177]. - Total risk-based capital ratio was 16.14% as of March 31, 2023, exceeding the minimum requirement of 10.00% [180]. - The bank is asset-sensitive in a rising interest rate environment, with estimated net interest income increasing by $18.185 million under a 400 basis point increase in rates [169]. - Economic value of equity (EVE) increased by $48.265 million under a 400 basis point increase in interest rates, totaling $327.504 million [171]. Operational Costs - Employee compensation and benefits costs increased due to staff growth and year-end salary adjustments, impacting overall expenses [162]. - Professional services costs rose due to the retention of a global executive search firm to enhance sales and underwriting capabilities [162]. - Advertising and marketing costs increased as the company expanded its brand and digital marketing efforts [162]. Taxation - Income tax expense for Q1 2023 was $4.4 million, reflecting an effective tax rate of 26.5%, consistent with Q1 2022 [163].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K Esquire Financial Holdings, Inc. (Exact Name of Registrant as Specified in its Charter) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38131 Maryland 27-5107901 (State or o ...

Table of Contents 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 September 30, 2022 OR ☐ 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 (State or Other Jurisdiction of ...

Table of Contents Title of each class Trading Symbol(s) Name of each exchange on which registered 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, 2022 OR ☐ 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 Regi ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements for the quarterly period ended June 30, 2021 [Condensed Consolidated Statements of Financial Condition](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Financial%20Condition) Total assets grew to $1.06 billion, driven by increases in loans, cash, and deposits | Financial Metric | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :--- | :--- | :--- | | **Total Assets** | **$1,058,077** | **$936,714** | | Cash and cash equivalents | $145,736 | $65,185 | | Loans, net | $693,360 | $661,019 | | **Total Liabilities** | **$923,407** | **$810,638** | | Total deposits | $914,661 | $804,054 | | **Total Stockholders' Equity** | **$134,670** | **$126,076** | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Net income increased significantly for the three and six-month periods, fueled by higher net interest and noninterest income | Metric (in thousands) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $10,667 | $9,172 | $20,719 | $18,351 | | Total Noninterest Income | $5,467 | $2,955 | $10,932 | $6,075 | | **Net Income** | **$4,502** | **$2,533** | **$8,676** | **$5,130** | | Diluted EPS | $0.57 | $0.33 | $1.10 | $0.67 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash and cash equivalents increased by $80.6 million, driven by financing activities from strong deposit growth | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $16,324 | $13,829 | | Net cash used in investing activities | ($46,401) | ($5,235) | | Net cash provided by financing activities | $110,628 | $44,028 | | **Increase in cash and cash equivalents** | **$80,551** | **$52,622** | [Notes to Interim Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Interim%20Condensed%20Consolidated%20Financial%20Statements) Details accounting policies, loan portfolio composition, and significant growth in payment processing income - As of June 30, 2021, there were **no participants** in the company's COVID-19 related customer payment deferral program[33](index=33&type=chunk) | Loan Composition (in thousands) | At June 30, 2021 | At December 31, 2020 | | :--- | :--- | :--- | | Commercial | $373,887 | $358,410 | | Multifamily | $201,171 | $169,817 | | Consumer | $35,213 | $41,362 | | **Total Loans** | **$708,465** | **$672,739** | - The allowance for loan losses increased to **$14.0 million** at June 30, 2021, from $11.4 million at year-end 2020, with the provision driven by loan growth and increased risk in the consumer portfolio[53](index=53&type=chunk)[55](index=55&type=chunk) - Payment processing income, a key component of noninterest income, grew to **$5.2 million in Q2 2021** from $2.7 million in Q2 2020, reflecting strong growth in the merchant services business[78](index=78&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Discusses strong financial performance in Q2 2021, highlighting growth in assets, loans, deposits, and net income [Comparison of Financial Condition](index=29&type=section&id=Comparison%20of%20Financial%20Condition) Total assets grew 13.0% to $1.1 billion, supported by strong growth in core deposits and litigation-related loans - Total assets grew by **$121.4 million, or 13.0%**, to $1.1 billion at June 30, 2021[125](index=125&type=chunk) - Litigation-Related loans increased to **$353.7 million**, representing 49.9% of the total loan portfolio[130](index=130&type=chunk) - Core deposits grew to **$903.4 million**, representing 98.8% of total deposits, and the company managed an additional **$546.9 million** in off-balance sheet sweep funds[132](index=132&type=chunk)[133](index=133&type=chunk) [Comparison of Operating Results](index=33&type=section&id=Comparison%20of%20Operating%20Results) Q2 2021 net income surged 77.7% year-over-year, driven by higher net interest income and payment processing fees | Metric (Q2 2021 vs Q2 2020) | Change Amount (in thousands) | Change Percent | | :--- | :--- | :--- | | Net Income | $2,000 | 77.7% | | Net Interest Income | $1,500 | 16.3% | | Noninterest Income | $2,512 | 85.0% | | Noninterest Expense | $2,336 | 34.4% | - Payment processing income for Q2 2021 increased by **$2.5 million (91.6%)** year-over-year, driven by a 98.8% increase in quarterly processing volumes to **$6.2 billion**[157](index=157&type=chunk)[159](index=159&type=chunk) - For the six months ended June 30, 2021, net income increased by **$3.5 million (69.1%)** to $8.7 million compared to the same period in 2020[166](index=166&type=chunk) [Asset Quality](index=30&type=section&id=Asset%20Quality) Asset quality remained strong with low nonperforming assets and an increased allowance for loan losses to 1.98% | Metric | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Nonperforming assets to total loans | 0.32% | N/A | | Allowance for loan losses to total loans | 1.98% | 1.70% | | Coverage Ratio (ALL / Nonperforming assets) | 617% | N/A | - The company increased its general allowance for consumer loans to **$6.1 million (17.4% of the consumer portfolio)** due to extended duration risk in the legacy NFL post-settlement loan portfolio[139](index=139&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position and exceeds all regulatory capital requirements as a "well capitalized" institution - Primary sources of funds include deposit inflows and loan repayments, with cash and cash equivalents totaling **$145.7 million** at June 30, 2021[199](index=199&type=chunk)[201](index=201&type=chunk) - The company had access to **$116.9 million** from the FHLB, **$28.9 million** from the Federal Reserve discount window, and **$67.5 million** in unsecured lines of credit, with no amounts outstanding[202](index=202&type=chunk) | Capital Ratio (Bank) | Actual at June 30, 2021 | "Well Capitalized" Minimum | | :--- | :--- | :--- | | Total Risk-based Capital | 17.86% | 10.00% | | Tier 1 Risk-based Capital | 16.60% | 8.00% | | Tier 1 Leverage Ratio | 12.29% | 5.00% | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Cross-references the market risk discussion detailed within Management's Discussion and Analysis - The information required for this item is included in Item 2 of this report under the heading "Management of Market Risk"[210](index=210&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes in internal controls - The Principal Executive Officer and Principal Financial Officer concluded that the company's **disclosure controls and procedures were effective** as of the end of the period[210](index=210&type=chunk)[212](index=212&type=chunk) - **No changes in internal control over financial reporting** occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[212](index=212&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no pending legal proceedings expected to have a material adverse effect on its financials - As of June 30, 2021, the company is **not involved in any pending legal proceedings** expected to have a material adverse effect on its financials[215](index=215&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) Highlights increased credit risks associated with the legacy NFL post-settlement consumer loan portfolio - A key risk factor is the potential for **increased loan losses** in the NFL Concussion Settlement Program portfolio due to extended duration and other issues[216](index=216&type=chunk) - Factors increasing risk include fraud investigations, modified rules for physicians, pandemic-related delays, and the pledge to **abandon "race-norming"** in claims assessment[217](index=217&type=chunk)[218](index=218&type=chunk)[219](index=219&type=chunk) - As of June 30, 2021, the NFL consumer loan exposure was approximately **$24.6 million**, with **26% of this portfolio classified** as special mention or substandard[220](index=220&type=chunk)[222](index=222&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase any shares during the quarter, with 265,694 shares remaining available for purchase | Period (2021) | Total Shares Purchased | Average Price Paid | | :--- | :--- | :--- | | April | 0 | $0 | | May | 0 | $0 | | June | 0 | $0 | | **Total** | **0** | **$0** | - The company's share repurchase program authorizes the purchase of up to 300,000 shares, and **265,694 shares may still be purchased** under the plan[225](index=225&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38131 | --- | --- | --- | |--------------------------------------------------------------|----------------------------------- ...

Table of Contents Title of each class Trading Symbol(s) Name of each exchange on which registered 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 September 30, 2020 OR ☐ 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 ...

Table of Contents 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 June 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | |-------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------ ...

Table of Contents 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 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, 2020 OR ☐ 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. ...

Table of Contents 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 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 September 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File ...