Esquire Financial (US:ESQ)2025-10-23 12:45Financial Performance - Net income for Q3 2025 increased by $2.7 million or 23.7% to $14.1 million, with diluted earnings per share at $1.62, compared to $11.4 million or $1.34 per diluted share in Q3 2024[1]. - Year-to-date revenue for 2025 rose by $15.4 million or 16.8% to $107.2 million compared to 2024[1]. - Net income for the nine months ended September 30, 2025, reached $37,354 thousand, a 16.5% increase from $31,905 thousand for the same period in 2024[38]. - Adjusted net income for Q3 2025 was $12,747 thousand, with a GAAP net income of $14,057 thousand, indicating a decrease of 9.3% when accounting for tax benefits[43]. Asset and Deposit Growth - Total assets increased by $401.8 million, or 22.5%, to $2.18 billion, driven by a $249.5 million, or 19.2%, growth in loans to $1.55 billion[27]. - Total deposits reached $1.88 billion, a $343.0 million, or 22.3%, increase, with litigation-related escrow deposits rising by $189.9 million, or 22.9%[28]. - Average deposits increased by $364.2 million or 24.5% to $1.85 billion, driven by increases in litigation-related escrow and commercial money market deposits[8]. - Total deposits increased to $1,879,440 thousand as of September 30, 2025, compared to $1,642,236 thousand at December 31, 2024, marking a growth of 14.5%[36]. Loan and Credit Quality - Loan growth on a linked quarter basis was $52.4 million or 14% annualized, totaling $1.55 billion, with year-over-year growth of $249.5 million or 19.2%[1]. - The provision for credit losses was $1.8 million for Q3 2025, a $750 thousand increase from Q3 2024, with an allowance to loans ratio of 1.37%[9]. - The provision for credit losses increased by $3.8 million to $6.8 million for the nine months ended September 30, 2025, with charge-offs of $6.2 million, including $3.3 million from a small business loan and $2.9 million from a multifamily loan[18]. - Nonperforming loans decreased to $8,646 thousand, down from $10,940 thousand at June 30, 2025, indicating improved asset quality[36]. Income and Expense Management - Noninterest income for Q3 2025 was stable at $6.2 million, with payment processing income at $5.1 million, reflecting a 9.5% increase in processing volumes to $10.1 billion[10]. - Noninterest income rose by $235 thousand, or 1.3%, to $19.0 million, while payment processing income decreased by $699 thousand to $15.1 million, despite an 8.9% increase in payment processing volumes to $29.5 billion[19]. - Noninterest expense increased by $7.0 million, or 15.5%, to $52.2 million, primarily due to a $2.9 million increase in employee compensation and benefits, reflecting a 10.4% rise[20]. - The efficiency ratio for Q3 2025 was 48.9%, compared to 48.1% in the prior year, despite ongoing investments in resources[14]. Capital and Regulatory Compliance - Stockholders' equity increased by $46.7 million to $279.2 million, primarily due to net increases in retained earnings[31]. - The bank remains well above regulatory "Well Capitalized" standards, ensuring a strong capital position[32]. - The Tier 1 capital ratio remained strong at 15.27% as of September 30, 2025, consistent with the previous quarter[36]. Tax and Effective Rates - The effective tax rate for Q3 2025 was 19.5%, down from 27.0% in the prior year, due to discrete tax benefits related to stock options[15]. - The effective tax rate decreased to 22.5% for the nine months ended September 30, 2025, down from 26.8% in the prior year, due to discrete tax benefits related to share-based compensation[24]. Interest and Yield Metrics - Net interest margin for Q3 2025 was 6.04%, supported by growth in average interest-earning assets totaling $389.0 million or 23.3% to $2.06 billion[8]. - Net interest income for the three months ended September 30, 2025, was $31,339 thousand, an increase of 6.7% compared to $29,254 thousand for the previous quarter[38]. - Net interest income for the nine months ended September 30, 2025, was $88,202 thousand, compared to $73,043 thousand in the same period of 2024, reflecting an increase of 20.8%[40]. - The average yield on interest-earning assets was 6.89% in 2025, slightly down from 6.94% in 2024[40].