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What changed in Esquire Financial Holdings, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Esquire Financial Holdings, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+338 added−312 removedSource: 10-K (2026-03-13) vs 10-K (2025-03-17)

Top changes in Esquire Financial Holdings, Inc.'s 2025 10-K

338 paragraphs added · 312 removed · 262 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

109 edited+27 added−19 removed183 unchanged
Biggest changeWe believe our unique and dynamic business model distinguishes us from other banks and non-bank financial services companies in the markets we operate as demonstrated by comparing our performance metrics for the years ended 2024 and 2023.
Biggest changeWe believe our unique and dynamic business model distinguishes us from other banks and non-bank financial services companies in the markets we operate as demonstrated by comparing our performance metrics for the years ended 2025 and 2024. 4 Table of Contents On March 11, 2026, the Company, Esquire Merger Sub, Inc., a direct, wholly owned subsidiary of the Company (“Merger Sub”), and Signature Bancorporation, Inc. entered into an Agreement and Plan of Merger (as may be amended, modified or supplemented from time to time in accordance with its terms, the “merger agreement”), pursuant to which Esquire and Signature have agreed to combine their respective businesses.
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.
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.
Other Regulations Esquire Bank’s operations are also subject to federal laws applicable to credit transactions, such as: ● The Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers; ● The Real Estate Settlement Procedures Act, requiring that borrowers for mortgage loans for 1 – 4 family real estate receive various disclosures, including good faith estimates of settlement costs, lender servicing and escrow account practices, and prohibiting certain practices that increase the cost of settlement services; ● The Home Mortgage Disclosure Act, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves; ● The Equal Credit Opportunity Act and other fair lending laws, prohibiting discrimination on the basis of race, religion, sex and other prohibited factors in extending credit; ● The Fair Credit Reporting Act, governing the use of credit reports on consumers and the provision of information to credit reporting agencies; 22 Table of Contents ● Unfair or Deceptive Acts or Practices laws and regulations; ● The Coronavirus Aid, Relief and Economic Security Act; ● The Fair Debt Collection Practices Act, governing the manner in which consumer debts may be collected; and ● The rules and regulations of the various federal agencies charged with the responsibility of implementing such federal laws.
Other Regulations Esquire Bank’s operations are also subject to federal laws applicable to credit transactions, such as: ● The Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers; ● The Real Estate Settlement Procedures Act, requiring that borrowers for mortgage loans for 1 – 4 family real estate receive various disclosures, including good faith estimates of settlement costs, lender servicing and escrow account practices, and prohibiting certain practices that increase the cost of settlement services; ● The Home Mortgage Disclosure Act, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves; 22 Table of Contents ● The Equal Credit Opportunity Act and other fair lending laws, prohibiting discrimination on the basis of race, religion, sex and other prohibited factors in extending credit; ● The Fair Credit Reporting Act, governing the use of credit reports on consumers and the provision of information to credit reporting agencies; ● Unfair or Deceptive Acts or Practices laws and regulations; ● The Coronavirus Aid, Relief and Economic Security Act; ● The Fair Debt Collection Practices Act, governing the manner in which consumer debts may be collected; and ● The rules and regulations of the various federal agencies charged with the responsibility of implementing such federal laws.
Thus, instead of using the law firm’s cash flow, law firms use Case Cost LOCs to finance litigation cash flows because the finance charges can generally be charged against the settlement proceeds. Case Cost LOCs are not contingent loans, meaning that their repayment is not dependent on a favorable case settlement.
Thus, instead of using the law firm’s cash flow, law firms use our Case Cost LOCs to finance litigation cash flows because the finance charges can generally be charged against the settlement proceeds. Case Cost LOCs are not contingent loans, meaning that their repayment is not dependent on a favorable case settlement.
While some overlap exists between the litigation market loan products offered by 7 Table of Contents Esquire Bank and these companies (primarily lines of credit, case-cost and post-settlement commercial loans), there are a number of critical differences that we believe gives our Bank a competitive advantage including, but not limited to: ● Esquire Bank can offer more competitive terms (i.e., rates) on loans compared to specialty finance companies because its cost of funds is much lower than the funding costs for these non-bank competitors; ● the non-bank companies are not able to offer commercial cash management services on deposit products (i.e., commercial on-line banking, remote deposit capture technology), letters of credit, debit cards, or other business services; and ● non-banks cannot offer products uniformly across the country because they are not national banks.
While some overlap exists between the litigation market loan products offered by Esquire Bank and these companies (primarily lines of credit, case-cost and post-settlement commercial loans), there are a number of critical differences that we believe gives our Bank a competitive advantage including, but not limited to: ● Esquire Bank can offer more competitive terms (i.e., rates) on loans compared to specialty finance companies because its cost of funds is much lower than the funding costs for these non-bank competitors; ● the non-bank companies are not able to offer commercial cash management services on deposit products (i.e., commercial on-line banking, remote deposit capture technology), letters of credit, debit cards, or other business services; and ● non-banks cannot offer products uniformly across the country because they are not national banks.
The Bank was well capitalized under the prompt corrective action requirements at December 31, 2024. Dividends Under federal law and applicable regulations, a national bank may generally declare a cash dividend, without approval from the OCC, in an amount equal to its year-to-date net income plus the prior two years’ net income that is still available for cash dividend.
The Bank was well capitalized under the prompt corrective action requirements at December 31, 2025. Dividends Under federal law and applicable regulations, a national bank may generally declare a cash dividend, without approval from the OCC, in an amount equal to its year-to-date net income plus the prior two years’ net income that is still available for cash dividend.
The majority of residential mortgages are originated internally, although we do purchase residential mortgages from time to time. Purchased loans are subject to all the asset quality and documentary precautions normally used when originating a loan. Construction Loans. Construction loans are originated on an opportunistic basis. At December 31, 2024, there were no construction loans.
The majority of residential mortgages are originated internally, although we do purchase residential mortgages from time to time. Purchased loans are subject to all the asset quality and documentary precautions normally used when originating a loan. Construction Loans. Construction loans are originated on an opportunistic basis. At December 31, 2025, there were no construction loans.
Typically, at least three years of successful experience in plaintiff (or contingency fee) practice are required for a law firm. Working capital lines of credit and case cost lines of credit are floating rate, prime-based loans. The proceeds of a Case Cost loan can only be used against case expenses.
Typically, at least three years of successful experience in plaintiff (or contingency fee) practice are required for a law firm. Working capital lines of credit and case cost lines of credit are floating rate, prime-based loans, typically with rate floors. The proceeds of a Case Cost loan can only be used against case expenses.
We are required to maintain an investment in FHLB stock, which is based on our level of mortgage related assets (“MRA”) and adjusted for any FHLB borrowings, for which we had none at December 31, 2024.
We are required to maintain an investment in FHLB stock, which is based on our level of mortgage related assets (“MRA”) and adjusted for any FHLB borrowings, for which we had none at December 31, 2025.
Construction lending involves additional risks when compared with permanent 1 – 4 family lending because funds are advanced upon the security of the project, which is of uncertain value prior to its completion. This type of lending also typically involves higher loan principal amounts and is often concentrated with a small number 13 Table of Contents of builders.
Construction lending involves additional risks when compared with permanent 1 – 4 family lending because funds are advanced upon the security of the project, which is of uncertain value prior to its completion. This type of lending also typically involves higher loan principal amounts and is often concentrated with a small number of builders.
A bank’s loans to its executive officers, directors, any owner of more than 10% of its stock (each, an “insider”) and certain entities controlled by any such person (an insider’s “related interest”) are subject to the conditions and limitations 19 Table of Contents imposed by Section 22(h) of the Federal Reserve Act and the FRB’s Regulation O.
A bank’s loans to its executive officers, directors, any owner of more than 10% of its stock (each, an “insider”) and certain entities controlled by any such person (an insider’s “related interest”) are subject to the conditions and limitations imposed by Section 22(h) of the Federal Reserve Act and the FRB’s Regulation O.
Management understands the importance of concentration risk and continuously monitors to ensure that portfolio risk is balanced between such factors as loan type, geography, collateral, structure, maturity and risk rating, among other things. Our Loan Policy establishes detailed concentration limits and sub limits by loan type and geography. Ongoing Credit Risk Management.
Management understands the importance of concentration risk and continuously monitors to ensure that portfolio risk is balanced between such factors as loan type, geography, collateral, structure, maturity and risk rating, among other things. Our Loan Policy establishes detailed concentration limits and sub limits by loan type and geography. 14 Table of Contents Ongoing Credit Risk Management.
At December 31, 2024, we had no such loans. Consumer Loans. Consumer loans are primarily personal loans and, to a lesser extent, post-settlement consumer loans made to plaintiffs and claimants as described below.
At December 31, 2025, we had no such loans. Consumer Loans. Consumer loans are primarily personal loans and, to a lesser extent, post-settlement consumer loans made to plaintiffs and claimants as described below.
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; ● 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; ● 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; 2 Table of Contents ● 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; ● 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; 3 Table of Contents ● 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 Annual Report on Form 10-K.
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; ● 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; ● 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; ● the impact of a potential federal government shutdown; ● 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, 2 Table of Contents 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; ● 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; 3 Table of Contents ● 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; ● our ability to successfully complete our merger with Signature Bancorporation, Inc.
We believe we have a stable core deposit base due primarily to the litigation market strategy as we strongly encourage and are successful in having law firm borrowers maintain their operating and escrow banking relationship with us. Our low cost of funds is due to our deposit composition consisting of approximately 99.1% in core deposit accounts at December 31, 2024.
We believe we have a stable core deposit base due primarily to the litigation market strategy as we strongly encourage and are successful in having law firm borrowers maintain their operating and escrow banking relationship with us. Our low cost of funds is due to our deposit composition consisting of approximately 99.7% in core deposit accounts at December 31, 2025.
All of our debt securities are classified as available-for-sale or held-to-maturity and can be used to collateralize Federal Home Loan Bank of New York (“FHLB”) borrowings, FRB borrowings, or other borrowings. At December 31, 2024, our securities had a fair value of $302.7 million, and consisted of U.S. Government Agency collateralized mortgage obligations and mortgage-backed securities.
All of our debt securities are classified as available-for-sale or held-to-maturity and can be used to collateralize Federal Home Loan Bank of New York (“FHLB”) borrowings, FRB borrowings, or other borrowings. At December 31, 2025, our securities had a fair value of $302.0 million and consisted of U.S. Government Agency collateralized mortgage obligations and mortgage-backed securities.
Advances are made under several different programs, each having its own interest rate and range of maturities. Depending on the program, limitations on the amount of advances are 15 Table of Contents based either on a fixed percentage of an institution’s net worth or on the FHLB assessment of the institution’s creditworthiness.
Advances are made under several different programs, each having its own interest rate and range of maturities. Depending on the program, limitations on the amount of advances are based either on a fixed percentage of an institution’s net worth or on the FHLB assessment of the institution’s creditworthiness.
The Dodd-Frank Act codified the source of strength policy. Under the prompt corrective action provisions of federal law, a bank holding company parent of an undercapitalized subsidiary bank is required to guarantee, within specified limits, the capital restoration plan that is required of an undercapitalized bank.
The Dodd-Frank Act codified the source of strength policy. 23 Table of Contents Under the prompt corrective action provisions of federal law, a bank holding company parent of an undercapitalized subsidiary bank is required to guarantee, within specified limits, the capital restoration plan that is required of an undercapitalized bank.
The FDIC also concurrently maintained the DIF reserve ratio at 2.0% for 2023. The increase in assessment rate schedules is intended to increase the likelihood that the reserve ratio reaches the statutory minimum of 1.35% by the statutory deadline of September 30, 2028.
The FDIC also concurrently maintained the DIF reserve ratio at 2.0% for 2023. The increase in assessment rate 17 Table of Contents schedules is intended to increase the likelihood that the reserve ratio reaches the statutory minimum of 1.35% by the statutory deadline of September 30, 2028.
Sarbanes-Oxley Act of 2002 The Sarbanes-Oxley Act of 2002 is intended to improve corporate responsibility, to provide for enhanced penalties for accounting and auditing improprieties at publicly traded companies and to protect investors by improving the accuracy 24 Table of Contents and reliability of corporate disclosures pursuant to the securities laws.
Sarbanes-Oxley Act of 2002 The Sarbanes-Oxley Act of 2002 is intended to improve corporate responsibility, to provide for enhanced penalties for accounting and auditing improprieties at publicly traded companies and to protect investors by improving the accuracy and reliability of corporate disclosures pursuant to the securities laws.
Residential mortgage loans are originated or purchased primarily for investment purposes, generally with fixed rates and 30-year or 15-year terms. Adjustable-rate mortgages (“ARMs”) are purchased or originated as 1 year ARMs, 5/1 ARMs, or 7/1 ARMs. We perform an extensive credit history review for each borrower. Second homes or investment properties are subject to additional requirements.
Residential mortgage loans are originated or purchased primarily for investment purposes, generally with fixed rates and 30-year or 15-year terms. Adjustable-rate mortgages (“ARMs”) are purchased or originated as 1 year ARMs, 5/1 ARMs, or 7/1 ARMs. We perform an extensive credit history review for each borrower. Second 13 Table of Contents homes or investment properties are subject to additional requirements.
The guidance outlines the agencies’ views on sound risk management principles related to third party relationships, 18 Table of Contents including as related to the performance of adequate due diligence on the third party, appropriate documentation of the relationship, and performance of adequate oversight and auditing in order to limit the risks to the bank.
The guidance outlines the agencies’ views on sound risk management principles related to third party relationships, including as related to the performance of adequate due diligence on the third party, appropriate documentation of the relationship, and performance of adequate oversight and auditing in order to limit the risks to the bank.
In evaluating each potential loan relationship, we adhere to a disciplined underwriting evaluation process including but not limited to the following: ● understanding the customer’s financial condition and ability to repay the loan, including DSCR and global DSCR; ● verifying that the primary and secondary sources of repayment are adequate in relation to the amount and structure of the loan; ● observing appropriate loan to value guidelines for collateral secured loans; ● maintaining our targeted levels of diversification for the loan portfolio, both as to type of borrower and geographic location of collateral; ● ensuring that each loan is properly documented with perfected liens on collateral; and ● applying risk rating criteria tailored to our lending activities.
In evaluating each potential loan relationship, we adhere to a disciplined underwriting evaluation process including but not limited to the following: ● understanding the customer’s financial condition and ability to repay the loan, including DSCR and global DSCR; ● verifying that the primary and secondary sources of repayment are adequate in relation to the amount and structure of the loan; ● observing appropriate loan to value guidelines for collateral secured loans; ● maintaining our targeted levels of diversification for the loan portfolio, both as to type of borrower and geographic location of collateral; 12 Table of Contents ● ensuring that each loan is properly documented with perfected liens on collateral; ● assessing industry risk and economic conditions; and ● applying risk rating criteria tailored to our lending activities.
Esquire Bank has adopted policies and procedures to comply with these requirements. 21 Table of Contents Privacy and Cybersecurity Laws Esquire Bank is subject to a variety of federal and state privacy laws, which govern the collection, safeguarding, sharing and use of customer information.
Esquire Bank has adopted policies and procedures to comply with these requirements. Privacy and Cybersecurity Laws Esquire Bank is subject to a variety of federal and state privacy laws, which govern the collection, safeguarding, sharing and use of customer information.
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.
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 and Los Angeles metropolitan markets.
No amounts were outstanding on any of the aforementioned lines as of December 31, 2024. Human Capital Resources ​ At December 31, 2024, we employed 138 full time equivalent individuals, of which approximately 60% are either minorities or women. None of our employees are represented by a collective bargaining agreement.
No amounts were outstanding on any of the aforementioned lines as of December 31, 2025. Human Capital Resources ​ At December 31, 2025, we employed 151 full time equivalent individuals, of which approximately 60% are either minorities or women. None of our employees are represented by a collective bargaining agreement.
The regulatory structure gives the regulatory agencies extensive discretion in connection with their supervisory and enforcement activities and examination policies, including policies with respect to the classification of assets and the establishment of adequate credit loss reserves for regulatory purposes.
The regulatory 16 Table of Contents structure gives the regulatory agencies extensive discretion in connection with their supervisory and enforcement activities and examination policies, including policies with respect to the classification of assets and the establishment of adequate credit loss reserves for regulatory purposes.
The Company has made the election under the BHCA to be designated a financial holding company. 16 Table of Contents Any change in the applicable laws and regulations, whether by the OCC, the FDIC, the FRB or through legislation, could have a material adverse impact on Esquire Bank, the Company and their operations and the Company’s stockholders.
The Company has made the election under the BHCA to be designated a financial holding company. Any change in the applicable laws and regulations, whether by the OCC, the FDIC, the FRB or through legislation, could have a material adverse impact on Esquire Bank, the Company and their operations and the Company’s stockholders.
Significant penalties and fines, as well as other supervisory orders may be imposed on a financial institution for non-compliance with these requirements. In addition, the federal bank regulatory agencies must consider the effectiveness in combating money laundering activities for financial institutions engaging in a merger transaction.
Significant penalties and fines, as well as other supervisory orders may be imposed on a financial institution for non- 21 Table of Contents compliance with these requirements. In addition, the federal bank regulatory agencies must consider the effectiveness in combating money laundering activities for financial institutions engaging in a merger transaction.
We have no exposure to office and construction loans, minimal exposure to hospitality ($14.7 million as of December 31, 2024), and a regulatory CRE concentration exposure at both the consolidated and Bank level that is less than 200% of total capital plus the allowance for credit losses.
We have no exposure to office and construction loans, minimal exposure to hospitality ($14.0 million as of December 31, 2025), and a regulatory CRE concentration exposure at both the consolidated and Bank level that is less than 200% of total capital plus the allowance for credit losses.
The payment processing (merchant acquiring) market has also been and will continue to be a significant growth opportunity for our Company, as we offer focused and tailored products and services to small businesses nationally.
We believe the payment processing (merchant acquiring) market has been and will continue to be a growth opportunity for our Company, as we offer focused and tailored products and services to small businesses nationally.
In connection with these loans, the Bank generally requires personal guarantees 12 Table of Contents of key partners in most circumstances and, in certain circumstances an assignment of life insurance of partners, in accordance with our Board approved Lending Policy.
In connection with these loans, the Bank generally requires personal guarantees of key partners in most circumstances and, in certain circumstances an assignment of life insurance of partners, in accordance with our Board approved Lending Policy.
The term “covered transaction” includes, among other things, the making of a loan to an affiliate, a purchase of assets from an affiliate, the issuance of a guarantee on behalf of an affiliate, and the acceptance of securities of an affiliate as collateral for a loan.
The term “covered transaction” includes, among other things, the making of a loan to an affiliate, a purchase of assets from an 19 Table of Contents affiliate, the issuance of a guarantee on behalf of an affiliate, and the acceptance of securities of an affiliate as collateral for a loan.
We do not use a traditional “brick and mortar” branch network to support our deposit growth and have one branch, located in Jericho, New York and one branch in Los Angeles, California planned to open in 2025.
We do not use a traditional “brick and mortar” branch network to support our deposit growth and have one branch, located in Jericho, New York and one branch in Los Angeles, California.
In addition to our lending activities, we have continued to expand our payment processing platform with dollar volume increasing 10% compared to 2023 while maintaining a stable fee-based revenue stream. We provide dynamic and flexible payment processing solutions to small business owners.
In addition to our lending activities, we have continued to expand our payment processing platform with dollar volume increasing 9% compared to 2024 while maintaining a stable fee-based revenue stream. We provide dynamic and flexible payment processing solutions to small business owners.
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 $554.4 million at December 31, 2024, makes this litigation vertical a highly desirable core low-cost funding platform fueling bank-wide growth. Payment Processing.
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 $736.6 million at December 31, 2025, makes this litigation vertical a highly desirable core low-cost funding platform fueling bank-wide growth. Payment Processing.
For the year ended December 31, 2024, we received a blended rate of approximately six basis points for payment processing, compared to direct payment processing providers that may receive two to three times that rate for a portfolio with similar risk characteristics.
For the year ended December 31, 2025, we received a blended rate of approximately five basis points for payment processing, compared to direct payment processing providers that may receive two to three times that rate for a portfolio with similar risk characteristics.
We have no office exposure in our CRE portfolio as of December 31, 2024. Owner-occupied loans represented 7.9% of the CRE portfolio at December 31, 2024. We both originate and, on a limited basis, participate in CRE loans. All loans are independently underwritten by us utilizing the same underwriting criteria per our Board established credit policy. 1 – 4 Family.
We have no office exposure in our CRE portfolio as of December 31, 2025. Owner-occupied loans represented 5.3% of the CRE portfolio at December 31, 2025. We both originate and, on a limited basis, participate in CRE loans. All loans are independently underwritten by us utilizing the same underwriting criteria per our Board established credit policy. 1 – 4 Family.
To qualify for this additional 10%, the Bank must perfect a security interest in the collateral and the collateral must have a market value at all times of at least 100% of the loan amount that exceeds the 15% general limit. At December 31, 2024, our regulatory limit on loans-to-one borrower was $35.9 million.
To qualify for this additional 10%, the Bank must perfect a security interest in the collateral and the collateral must have a market value at all times of at least 100% of the loan amount that exceeds the 15% general limit. At December 31, 2025, our regulatory limit on loans-to-one borrower was $43.5 million.
Our payment processing platform has grown to 88,000 small businesses at December 31, 2024, generating 17% of our revenue for the year ended December 31, 2024. We believe that both our litigation and payment processing platforms represent a significant opportunity for future growth in lending, fee income, core deposits and enhanced lending opportunities.
Our payment processing platform has grown to 93,000 small businesses at December 31, 2025, generating 14% of our revenue for the year ended December 31, 2025. We believe that both our litigation and payment processing platforms represent a significant opportunity for future growth in fee income, core deposits and enhanced lending opportunities.
Our deposit strategy primarily focuses on developing lending and other service orientated relationships with customers rather than competing with other institutions on rate. Our longer duration escrow or claimant trust settlement deposits represent accounts where the law firm is trustee for the claimant settlement funds and represent $979.0 million, or 60%, of total deposits.
Our deposit strategy primarily focuses on developing lending and other service orientated relationships with customers rather than competing with other institutions on rate. Our longer duration escrow or claimant trust settlement deposits represent accounts where the law firm is trustee for the claimant settlement funds and represent $1.23 billion, or 60%, of total deposits.
We strive to identify potential problem loans early in an effort to aggressively seek resolution of these situations before the loans create a loss, record any necessary charge-offs promptly and maintain adequate allowance levels for probable credit losses incurred in the loan portfolio.
We strive to identify potential problem loans early in an effort to aggressively seek resolution of these situations before the loan becomes past due, potentially creates a loss, record any necessary charge-offs promptly and maintain adequate allowance levels for probable credit losses incurred in the loan portfolio.
As of December 31, 2024, we had contractual arrangements with three payment processors or clearing agents, TSYS, Repay and Fiserv, which are utilized by Esquire Bank and our ISOs to authorize, clear and settle card transactions.
As of December 31, 2025, we had contractual arrangements with three payment processors or clearing agents, Global Payments, Repay and Fiserv, which are utilized by Esquire Bank and our ISOs to authorize, clear and settle card transactions.
A copy of the Company’s clawback policy is included by reference to this Annual Report on Form 10-K.
A copy of the Company’s clawback policy is included by reference to this Annual Report on Form 10-K. ​ 25 Table of Contents
For traditional community banking products and services, our primary market area is the New York metropolitan area, specifically Nassau County and New York City boroughs (Manhattan, Brooklyn, Bronx, and Queens) of New York State and secondarily throughout the rest of New York State.
For traditional community banking products and services, our primary market area is the New York metropolitan area, specifically Nassau County, New York and New York City boroughs of Manhattan, Brooklyn, Bronx, and Queens and secondarily throughout the rest of New York State, as well as Los Angeles, California.
Mortgage loans are primarily secured by 1 – 4 family cash flowing investment properties ($14.7 million, or 1.0% of total loans, as of December 31, 2024) in our market area. The residential mortgage loan portfolio includes 1 – 4 family income producing investment properties, primary and secondary owner occupied residences, investor coops and condos.
Mortgage loans are primarily secured by 1 – 4 family cash flowing investment properties ($9.8 million, or 0.6% of total loans, as of December 31, 2025) in our market area. The residential mortgage loan portfolio includes 1 – 4 family income producing investment properties, primary and secondary owner occupied residences, investor coops and condos.
We offer tailored banking 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).
We offer tailored banking 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 areas (subsets of the New York and Los Angeles metropolitan markets).
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 $1.44 of low-cost (our cost of funds for the year ended December 31, 2024 is 91 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.
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 $1.35 of low-cost (our cost of funds for the year ended December 31, 2025 is 99 basis points) core operating and escrow deposits from these law firms through our “branchless” national platform, fueling and funding additional growth in our other asset classes.
We use proprietary and industry leading technology to ensure card brand and regulatory compliance, support multiple processing platforms, manage daily risk across 88,000 small business merchants in all 50 states, and perform commercial treasury clearing services for approximately $36 billion in processing volume across 604 million transactions for the year ended December 31, 2024. Proprietary Technology.
We use proprietary and industry leading technology to ensure card brand and regulatory compliance, support multiple processing platforms, manage daily risk across 93,000 small business merchants in all 50 states, and perform commercial treasury clearing services for approximately $40 billion in processing volume across 590 million transactions for the year ended December 31, 2025. Proprietary Technology.
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 $979.0 million, or 60%, of total deposits.
Our extremely low historic delinquency rates and low charge-off rates 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 $1.23 billion, or 60%, of total deposits.
The success of our national litigation and payment processing verticals coupled with our focus on branchless technology has led to industry leading performance.
The success of our national litigation and payment processing verticals coupled with our focus on financial technology (“fin-tech”) has led to industry leading performance.
We entered into the payment processing business as an acquiring bank in 2012 in an effort to increase our noninterest income and to provide cross selling opportunities for other business banking products and services. For the year ended December 31, 2024, payment processing revenues were $20.9 million, which was 16.7% of our total revenue.
We entered into the payment processing business as an acquiring bank in 2012 in an effort to increase our noninterest income and to provide cross selling opportunities for other business banking products and services. For the year ended December 31, 2025, payment processing revenues were $20.2 million, which was 13.8% of our total revenue.
Multifamily loans are the largest component of the real estate loan portfolio and totaled $355.2 million (or 25.4% of total loans) as of December 31, 2024. The multifamily loan portfolio primarily consists of nonrecourse loans secured by nonowner occupied apartment buildings in the New York Metropolitan area (i.e., Brooklyn, the Bronx, Manhattan.).
Multifamily loans are the largest component of the real estate loan portfolio and totaled $372.8 million (or 21.2% of total loans) as of December 31, 2025. The multifamily loan portfolio primarily consists of nonrecourse loans secured by nonowner occupied apartment buildings in the New York Metropolitan area (i.e., Brooklyn, the Bronx, Manhattan.).
Chamber of Commerce Institute for Legal Reform (“Tort Costs in America – An Empirical Analysis of Costs and Compensation of U.S. Tort System”) published in November 2022 with a total addressable market (“TAM”) of $443 billion for 2020.
Chamber of Commerce Institute for Legal Reform (“Tort Costs in America – An Empirical Analysis of Costs and Compensation of U.S. Tort System”) published in November 2024, with an estimated total addressable market (“TAM”) of $529 billion for 2022.
Our low cost core deposits (total deposits, excluding time deposits), representing our primary funding source for loan growth, totaled $1.63 billion at December 31, 2024, a key driver of our total cost of deposits of 0.91%. These stable low cost funds are driven by our litigation related operating and escrow commercial deposits.
Our low cost core deposits (total deposits, excluding time deposits), representing our primary funding source for loan growth, totaled $2.06 billion at December 31, 2025, a key driver of our total cost of deposits of 0.99%. These stable low cost funds are driven by our litigation related operating and escrow commercial deposits.
Our unique low cost core deposit model is primarily driven by escrow and operating accounts from law firms and other litigation settlements on a national basis, representing 74% of the $1.64 billion in total deposits at December 31, 2024. Our core deposits (excluding time deposits) represent 99.1% of our total deposits at December 31, 2024.
Our unique low cost core deposit model is primarily driven by escrow and operating accounts from law firms and other litigation settlements on a national basis, representing 78% of the $2.06 billion in total deposits at December 31, 2025. Our core deposits (excluding time deposits) represent 99.7% of our total deposits at December 31, 2025.
Personal loans are purchased or originated for debt consolidation, medical expenses, living expenses, payment of outstanding bills, or other consumer needs on both a secured and unsecured basis. At December 31, 2024, total consumer loans held for investment (excluding Consumer Litigation-Related Loans of $2.7 million) totaled $16.6 million (or 1.2% of total loans).
Personal loans are purchased or originated to consumers or plaintiffs for debt consolidation, medical expenses, living expenses, payment of outstanding bills, or other consumer needs on both a secured and unsecured basis. At December 31, 2025, total consumer loans held for investment (excluding Consumer Litigation-Related Loans of $3.1 million) totaled $19.6 million (or 1.1% of total loans).
Examinations and Assessments Esquire Bank is required to file periodic reports with and is subject to periodic examination by the OCC. Federal regulations generally require periodic on-site examinations for all depository institutions. Esquire Bank is required to pay an annual assessment to the OCC to fund the agency’s operations.
Examinations and Assessments Esquire Bank is required to file periodic reports with and is subject to periodic examination by the OCC. Federal regulations generally require periodic on-site examinations for all depository institutions.
Federal Securities Laws Esquire Financial Holdings, Inc.’s common stock is registered with the SEC. Consequently, Esquire Financial Holdings, Inc. is subject to the information, proxy solicitation, insider trading and other restrictions and requirements of the SEC under the Securities Exchange Act of 1934.
Consequently, Esquire Financial Holdings, Inc. is subject to the information, proxy solicitation, insider trading and other restrictions and requirements of the SEC under the Securities Exchange Act of 1934.
Term loans to law firms totaled $119.1 million at December 31, 2024 (or 14.2% of total Litigation-Related Loans). ● Post-Settlement Commercial and Other Commercial Litigation-Related Loans. Post-settlement commercial loans are bridge loans secured by proceeds from non-appealable, settled cases. Other commercial litigation-related loans consist of both secured and unsecured loans to law firms and attorneys.
Term loans to law firms totaled $186.7 million at December 31, 2025 (or 15.8% of total Litigation-Related Loans). ● Post-Settlement Commercial and Other Commercial Litigation-Related Loans. Post-settlement commercial loans are bridge loans secured by proceeds from non-appealable, settled cases. Other commercial litigation-related loans consist of both secured and unsecured loans to law firms and attorneys.
Acquisition of more than 10% of any class of a bank holding company’s voting stock constitutes a rebuttable presumption of control under the Change in Bank Control Act regulations under certain circumstances including where, as is the case with the Company, the issuer has registered securities under Section 12 of the Securities Exchange Act of 1934.
Acquisition of more than 10% of any class of a bank holding company’s voting stock constitutes a rebuttable presumption of control under the Change in Bank Control Act regulations under certain circumstances including where, as is the case with the Company, the issuer has registered securities under Section 12 of the Securities Exchange Act of 1934. 24 Table of Contents Federal Securities Laws Esquire Financial Holdings, Inc.’s common stock is registered with the SEC.
Due to increases in market interest rates since 2022, management enhanced its ongoing credit risk management monitoring of the commercial real estate loan portfolio. Specifically, management has further analyzed the multifamily and CRE loan portfolios which comprise $355.2 million, or 25.4%, and $87.0 million, or 6.2%, respectively, of total loans, as of December 31, 2024.
Due to increases in market interest rates since 2022, management enhanced its ongoing credit risk management monitoring of the commercial real estate loan portfolio. Specifically, management has further analyzed the multifamily and CRE loan portfolios which comprise $372.8 million, or 21.2%, and $107.3 million, or 6.1%, respectively, of total loans, as of December 31, 2025.
The balance of held for investment post-settlement consumer loans to individuals was $2.7 million at December 31, 2024. Real Estate Loans. The majority of our real estate secured loans are in the New York metropolitan area. 9 Table of Contents Multifamily.
The balance of held for investment post-settlement consumer loans to individuals was $3.1 million at December 31, 2025. Real Estate Loans. The majority of our real estate secured loans are in the New York metropolitan area. Multifamily.
Our 10 Table of Contents Merchant Acquiring and Risk Policy establishes authorities and guidelines for the Bank to acquire payment processing arrangements with ISOs, payment facilitators, merchants and agent banks through merchant portfolio acquisitions. Such guidelines include initial and ongoing due diligence requirements and approval authorities.
Our Merchant Acquiring and Risk Policy establishes authorities and guidelines for the Bank to acquire payment processing arrangements with ISOs, payment facilitators, merchants and agent banks through merchant portfolio acquisitions. Such guidelines include initial and ongoing due diligence requirements and approval authorities. All merchants, regardless of how the merchant is acquired, must meet our Merchant Credit/Underwriting Policy requirements.
Our total cost of deposits is 0.91% for the year ended December 31, 2024, anchored by our noninterest bearing demand deposits and litigation related escrow funds representing 30% and 60%, respectively, of total deposits.
Our total cost of deposits is 0.99% for the year ended December 31, 2025, anchored by our noninterest bearing 11 Table of Contents demand deposits and litigation related escrow funds representing 28% and 60%, respectively, of total deposits.
This unique risk profile translates approximately into a blended 9.36% asset yield on these commercial loans for the year ended December 31, 2024.
This unique risk profile translates to a blended 9.10% asset yield on these commercial loans for the year ended December 31, 2025.
At December 31, 2024, we had 27 active ISOs, servicing 88,000 merchants, and for the year ended December 31, 2024, we processed $36.3 billion in card volume. We intend to continue to expand our payment processing business.
At December 31, 2025, we had 28 active ISOs, servicing 93,000 merchants, and for the year ended December 31, 2025, we processed $39.5 billion in card volume. We intend to continue to expand our payment processing business.
In the event of an unfavorable outcome for the borrower, the loans are repaid from the cash flows of the law firm. ● Term Loans. Term loans are short-term unsecured business loans originated to law firms for general corporate purposes. These loans are offered to law firms at the same terms as those offered to other types of businesses.
In the event of an unfavorable outcome for the borrower, the loans are repaid from the cash flows of the law firm. ● Term Loans. Term loans are short-term unsecured business loans originated to law firms for general corporate purposes.
Community Reinvestment Act and Fair Lending Laws Under the Community Reinvestment Act (“CRA”), Esquire Bank has a continuing and affirmative obligation consistent with its safe and sound operation to help meet the credit needs of its entire community, including low and moderate income neighborhoods.
Esquire Bank is required to pay an annual assessment to the OCC to fund the agency’s operations. 20 Table of Contents Community Reinvestment Act and Fair Lending Laws Under the Community Reinvestment Act (“CRA”), Esquire Bank has a continuing and affirmative obligation consistent with its safe and sound operation to help meet the credit needs of its entire community, including low and moderate income neighborhoods.
As of December 31, 2024, our commercial Litigation-Related Loans, which consist of working capital lines of credit, case cost lines of credit, term loans and other commercial Litigation-Related Loans (“Commercial Litigation-Related Loans”), totaled $835.8 million, or 99.7% of our total Litigation-Related Loan portfolio and 59.8% of our loan portfolio.
As of December 31, 2025, our commercial Litigation-Related Loans, which consist of working capital lines of credit, case cost lines of credit, term loans and other commercial Litigation-Related Loans (“Commercial Litigation-Related Loans”), totaled $1.18 billion, or 99.7% of our total Litigation-Related Loan portfolio and 67.0% of our loan portfolio.
We compete with a wide range of regional and national banks located in our market areas as well as non-bank commercial finance companies on a nationwide basis.
Competition The bank and non-bank financial services industries in our markets and surrounding areas are highly competitive. We compete with a wide range of regional and national banks located in our market areas as well as non-bank commercial finance companies on a nationwide basis.
Safety and Soundness Standards Each federal banking agency, including the OCC, has adopted guidelines establishing general standards relating to internal controls, information and internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth, asset quality, earnings, compensation, fees and benefits and information security standards.
The Bank has not elected to utilize this alternative framework as of December 31, 2025. 18 Table of Contents Safety and Soundness Standards Each federal banking agency, including the OCC, has adopted guidelines establishing general standards relating to internal controls, information and internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth, asset quality, earnings, compensation, fees and benefits and information security standards.
The litigation community represented approximately 75% of our deposit base at December 31, 2024, with $979.0 million, or 60%, of total deposits in longer duration escrow or claimant trust settlement deposit accounts where the law firm is trustee for the claimant settlement funds.
The litigation community represented approximately 78% of our deposit base at December 31, 5 Table of Contents 2025, with $1.23 billion, or 60%, of total deposits in longer duration escrow or claimant trust settlement deposit accounts where the law firm is trustee for the claimant settlement funds.
As of December 31, 2024, we had $431.7 million of available borrowing capacity with the FHLB. We also had a borrowing capacity with the FRB of New York discount window of $51.4 million. The other borrowing lines are maintained primarily for contingency funding sources and totaled $17.5 million.
As of December 31, 2025, we had $455.5 million of available borrowing capacity with the FHLB. We also had a borrowing capacity with the FRB of New York (“FRB”) discount window of $48.1 million. The other borrowing lines are maintained primarily for contingency funding sources and totaled $29.0 million.
For the year ended December 31, 2024: ● Our net income was $43.7 million or $5.14 per diluted share while our return on average assets and equity were 2.57% and 20.14%, respectively. ● We had a net interest margin of 6.06%, primarily driven by growth in higher yielding variable rate commercial loans and a low cost of funds of 0.91% on our deposits (including demand deposits). 4 Table of Contents ● Our loans held for investment increased 16%, or $189.6 million, to $1.40 billion, primarily driven by growth in higher yielding commercial loans. ● Our noninterest income totaled $24.9 million, which represented 20% of our total revenue (net interest income plus noninterest income) at December 31, 2024, driven by our payment processing platform and administrative service payment (“ASP”) fee income. ● As of December 31, 2024, our total assets, loans, deposits and stockholders’ equity totaled $1.89 billion, $1.40 billion, $1.64 billion and $237.1 million, respectively.
For the year ended December 31, 2025: ● Our net income was $50.8 million or $5.87 per diluted share while our return on average assets and equity were 2.43% and 19.41%, respectively. ● We had a net interest margin of 6.02%, primarily driven by growth in higher yielding litigation related commercial loans and a low cost of funds of 0.99% on our deposits (including demand deposits). ● Our loans held for investment increased 26%, or $361.4 million, to $1.76 billion, primarily driven by growth in higher yielding litigation related commercial loans. ● Our noninterest income totaled $25.1 million, which represented 17% of our total revenue (net interest income plus noninterest income) at December 31, 2025, driven by our payment processing platform and administrative service payment (“ASP”) fee income. ● As of December 31, 2025, our total assets, loans, deposits and stockholders’ equity totaled $2.37 billion, $1.76 billion, $2.06 billion and $289.6 million, respectively.
For example, the regulations specify that a bank’s CRA performance will be considered in its expansion (e.g., branching or merger) proposals and may be the basis for approving, denying or conditioning the approval of an application.
For example, the regulations specify that a bank’s CRA performance will be considered in its expansion (e.g., branching or merger) proposals and may be the basis for approving, denying or conditioning the approval of an application. As of the date of its most recent OCC evaluation, Esquire Bank was rated “outstanding” with respect to its CRA compliance.
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. 5 Table of Contents We currently have clients in 31 states and our larger markets include California, the New York metro area, Texas, Florida, Pennsylvania, South Carolina, New Jersey and Michigan.
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.
Our lending activities follow written, non-discriminatory, underwriting standards and loan origination procedures established by our Board of Directors and management. We have established several levels of lending authority that have been delegated by the Board of Directors to the Directors Loan Committee, the Chief Lending Officer and other personnel in accordance with the Lending Authority in the Loan Policy.
We have established several levels of lending authority that have been delegated by the Board of Directors to the Directors Loan Committee, the Chief Executive Officer, the Chief Credit Officer, the Chief Lending Officer and other personnel in accordance with the Lending Authority in the Loan Policy.
CRE loans totaled $87.0 million (or 6.2% of total loans) as of December 31, 2024 and consisted primarily of loans secured by warehouses (54.1% of the CRE portfolio), mixed use (17.9% of the CRE portfolio), hospitality properties (16.9% of the CRE portfolio), with the remainder comprised of retail properties (11.1% of the CRE portfolio).
CRE loans totaled $107.3 million (or 6.1% of total loans) as of December 31, 2025 and consisted primarily of loans secured by warehouses (42.1% of the CRE portfolio), mixed use (26.7% of the CRE portfolio), hospitality properties (13.0% of the CRE portfolio), with the remainder comprised of retail properties (18.2% of the CRE portfolio).
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 $1.05 billion with no outstanding borrowings, positions our Company for future growth and success. 6 Table of Contents Market Area We define the market area for our legal community products and services as law firms practicing within the United States, United States territories and United States commonwealths, and we serve the litigation market on a nationwide basis.
Coupling these performance metrics with strong balance sheet management including, but not limited to, loan portfolio diversification, an asset sensitive balance sheet with approximately 71% 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 $1.12 billion with no outstanding borrowings, positions our Company for future growth and success.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe can provide no assurance that we will be successful in increasing the volume of our loans and deposits at acceptable levels and upon terms acceptable to us. We also can provide no assurance that we will be successful in expanding our operations organically or through strategic acquisition while managing the costs and implementation risks associated with this growth strategy.
Biggest changeWe also can provide no assurance 34 Table of Contents that we will be successful in expanding our operations organically or through strategic acquisition while managing the costs and implementation risks associated with this growth strategy. We expect to continue to experience growth in the number of our employees and customers and the scope of our operations.
Our New York City multifamily loan portfolio could be adversely impacted by changes in legislation or regulation which, in turn, could have a material adverse effect on our financial condition and results of operations. ​ On June 14, 2019, the New York State legislature passed the New York Housing Stability and Tenant Protection Act of 2019.
Our New York City multifamily loan portfolio could be adversely impacted by changes in policy legislation or regulation which, in turn, could have a material adverse effect on our financial condition and results of operations. ​ On June 14, 2019, the New York State legislature passed the New York Housing Stability and Tenant Protection Act of 2019.
The factors that could cause the Company’s stock price to decrease include, but are not limited to: (i) our past and future dividend practice; (ii) our financial condition, performance, creditworthiness and prospects; (iii) variations in our operating results or the quality of our assets; (iv) operating results that vary from the expectations of management, securities analysts and investors; (v) changes in expectations as to our future financial performance; (vi) changes in financial markets related to market valuations of financial industry companies; (vii) current or future financial institutional illiquidity and/or seizures by federal regulators; (viii) the operating and securities price performance of other companies that investors believe are comparable to us; (ix) future sales of our equity or equity-related securities; (x) the credit, mortgage and housing markets, the markets for securities relating to mortgages or housing, and developments with respect to financial institutions generally; and (xi) changes in global financial markets and global economies and general market conditions, such as 39 Table of Contents interest or foreign exchange rates, inflation, recessionary conditions, stock, commodity or real estate valuations or volatility and other geopolitical, regulatory or judicial events.
The factors that could cause the Company’s stock price to decrease include, but are not limited to: (i) our past and future dividend practice; (ii) our financial condition, performance, creditworthiness and prospects; (iii) variations in our operating results or the quality of our assets; (iv) operating results that vary from the expectations of management, securities analysts and investors; (v) changes in expectations as to our future financial performance; (vi) changes in financial markets related to market valuations of financial industry companies; (vii) current or future financial institutional illiquidity and/or seizures by federal regulators; (viii) the operating and securities price performance of other companies that investors believe are comparable to us; (ix) future sales of our equity or equity-related securities; (x) the credit, mortgage and housing markets, the markets for securities relating to mortgages or housing, and developments with respect to financial institutions generally; and (xi) changes in global financial markets and global economies and general market conditions, such as interest or foreign exchange rates, inflation, recessionary conditions, stock, commodity or real estate valuations or volatility and other geopolitical, regulatory or judicial events.
If the processing of claims for the Fund’s loan portfolio continues to extend beyond our maturity for these loans due to the aforementioned fraud, revisions to qualifying physician requirements, revised protocols due to “race-norming” claims, or the additional 30 Table of Contents administrative processes, portfolio delinquencies, credit downgrades and further losses as the result of possible charge-offs of these loans could occur or increase in the future, which would negatively impact our investment.
If the processing of claims for the Fund’s loan portfolio continues to extend beyond our maturity for these loans due to the aforementioned fraud, revisions to qualifying physician requirements, revised protocols due to “race-norming” claims, or the additional 33 Table of Contents administrative processes, portfolio delinquencies, credit downgrades and further losses as the result of possible charge-offs of these loans could occur or increase in the future, which would negatively impact our investment.
These actions include the power to enjoin “unsafe or unsound” practices, to require affirmative action to correct any conditions resulting from any violation or practice, to issue an administrative order that can be judicially enforced, to direct an increase in our capital, to restrict our growth, to assess civil monetary penalties against our officers or directors, to remove officers and directors and, if it is concluded that such conditions cannot be 37 Table of Contents corrected or there is an imminent risk of loss to depositors, to terminate our deposit insurance and place us into receivership or conservatorship.
These actions include the power to enjoin “unsafe or unsound” practices, to require affirmative action to correct any conditions resulting from any violation or practice, to issue an administrative order that can be judicially enforced, to direct an increase in our capital, to restrict our growth, to assess civil monetary penalties against our officers or directors, to remove officers and directors and, if it is concluded that such conditions cannot be corrected or there is an imminent risk of loss to depositors, to terminate our deposit insurance and place us into receivership or conservatorship.
In particular, negative public perceptions regarding our reputation, including negative perceptions regarding our ability to maintain the security of our technology systems and protect customer data or our compliance programs, could 29 Table of Contents lead to decreases in the levels of deposits that customers and potential customers choose to maintain with us or significantly increase the costs of attracting and retaining customers.
In particular, negative public perceptions regarding our reputation, including negative perceptions regarding our ability to maintain the security of our technology systems and protect customer data or our compliance programs, could 32 Table of Contents lead to decreases in the levels of deposits that customers and potential customers choose to maintain with us or significantly increase the costs of attracting and retaining customers.
A deterioration in economic conditions in the United States and our markets could result in an increase in loan delinquencies and non-performing assets, decreases in loan collateral values and a decrease in demand for our products and services, all of which, in turn, would adversely affect our business, financial condition and results of operations. ​ We are exposed to the risks of natural disasters and global market disruptions.
A deterioration in economic conditions in the United States and our markets could result in an increase in loan delinquencies and non-performing assets, decreases in loan collateral values and a decrease in demand for our products and services, all of which, in turn, would adversely affect our business, financial condition and results of operations. 35 Table of Contents ​ We are exposed to the risks of natural disasters and global market disruptions.
Because we plan to continue to increase our originations of these loans, commercial loans generally have a larger average size as compared with other loans such as commercial real estate loans, and the collateral for commercial loans is generally less 25 Table of Contents readily-marketable, losses incurred on a small number of commercial loans could have a disproportionate and material adverse impact on our financial condition and results of operations.
Because we plan to continue to increase our originations of these loans, commercial loans generally have a larger average size as compared with other loans such as commercial real estate loans, and the collateral for commercial loans is generally less readily-marketable, losses incurred on a small number of commercial loans could have a disproportionate and material adverse impact on our financial condition and results of operations.
While our Consumer Litigation-Related Loans, which consist of post-settlement consumer loans, are typically well secured by the settlement amount, we can still be exposed to the financial stability of the borrower as a result of unforeseen rulings or administrative legal anomalies with a particular borrower’s settlement that eliminate or greatly reduce their settlement amount.
While our Consumer Litigation-Related Loans, which consist of post-settlement consumer loans, are typically well secured by the settlement amount, we can still be exposed to the financial stability of the borrower as a result of unforeseen rulings or administrative legal anomalies with a 28 Table of Contents particular borrower’s settlement that eliminate or greatly reduce their settlement amount.
The federal banking agencies and Financial Crimes Enforcement Network are authorized to impose significant civil money penalties for violations of those requirements and have recently engaged in coordinated enforcement efforts against banks and other financial services providers with the U.S. Department of Justice, Drug Enforcement Administration and Internal Revenue Service.
The federal banking agencies and Financial Crimes Enforcement Network are authorized to impose 41 Table of Contents significant civil money penalties for violations of those requirements and have recently engaged in coordinated enforcement efforts against banks and other financial services providers with the U.S. Department of Justice, Drug Enforcement Administration and Internal Revenue Service.
Increases in chargebacks or other liability could have a material adverse effect on our business, financial condition, and results of operations. Changes in card network rules, standards or fees could adversely affect our business or operations. In order to provide our payment processing services, we are members of the Visa and MasterCard networks.
Increases in chargebacks or other liability could have a material adverse effect on our business, financial condition, and results of operations. 39 Table of Contents Changes in card network rules, standards or fees could adversely affect our business or operations. In order to provide our payment processing services, we are members of the Visa and MasterCard networks.
From 2016 through 2024, we experienced significant growth following our initial public offering, a capital raise and the conversion from a savings and loan holding company with a savings bank subsidiary to a bank holding company with a national bank subsidiary.
From 2016 through 2025, we experienced significant growth following our initial public offering, a capital raise and the conversion from a savings and loan holding company with a savings bank subsidiary to a bank holding company with a national bank subsidiary.
We also face significant competition from many larger institutions, including large commercial banks and third party processors that operate in the payment processing business, and our ability to grow that portion of our business depends on us being able to continue to attract and retain ISOs and merchants.
We also face significant competition from 38 Table of Contents many larger institutions, including large commercial banks and third party processors that operate in the payment processing business, and our ability to grow that portion of our business depends on us being able to continue to attract and retain ISOs and merchants.
This could adversely affect our ability to process these transactions or provide these services. There could be a sudden change in 32 Table of Contents customer transaction volume, electrical, telecommunications or other major physical infrastructure outages, natural disasters, events arising from local or larger scale political or social matters, including terrorist acts, pandemics, and cyber- attacks.
This could adversely affect our ability to process these transactions or provide these services. There could be a sudden change in customer transaction volume, electrical, telecommunications or other major physical infrastructure outages, natural disasters, events arising from local or larger scale political or social matters, including terrorist acts, pandemics, and cyber- attacks.
Additional risks not presently known also may have a material adverse effect on the Company’s results of operations and financial condition. Risks Related to Our Lending Activities Because we intend to continue to increase our commercial loans, our credit risk may increase.
Additional risks not presently known also may have a material adverse effect on the Company’s results of operations and financial condition. 27 Table of Contents Risks Related to Our Lending Activities Because we intend to continue to increase our commercial loans, our credit risk may increase.
Despite the defensive measures we take to manage our internal technological and operational infrastructure, these threats have in the past and may in the future originate externally from third parties such as foreign governments, organized crime and other hackers, and outsource or infrastructure-support providers and application developers, or may originate internally from within our organization.
Despite the defensive measures we take to manage our internal technological and operational infrastructure, these threats have in the 37 Table of Contents past and may in the future originate externally from third parties such as foreign governments, organized crime and other hackers, and outsource or infrastructure-support providers and application developers, or may originate internally from within our organization.
As of December 31, 2024, the carrying amount of our investment in the Fund and our total exposure is $9.4 million, with a remaining life of 4.3 years. As a business operating in the financial services industry, our business and operations may be adversely affected in numerous and complex ways by weak economic conditions.
As of December 31, 2025, the carrying amount of our investment in the Fund and our total exposure is $9.0 million, with a remaining life of 3.3 years. As a business operating in the financial services industry, our business and operations may be adversely affected in numerous and complex ways by weak economic conditions.
The secure maintenance and transmission of confidential information, as well as execution of transactions over these systems, are essential to protect 34 Table of Contents us and our customers against fraud and security breaches and to maintain our clients’ confidence.
The secure maintenance and transmission of confidential information, as well as execution of transactions over these systems, are essential to protect us and our customers against fraud and security breaches and to maintain our clients’ confidence.
Any system of controls, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met.
Any system of controls, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances 36 Table of Contents that the objectives of the system are met.
Various assumptions and judgments about the collectability of the loan portfolio are made, including the creditworthiness of borrowers and the value of the real estate and other assets serving as 26 Table of Contents collateral for the repayment of many loans.
Various assumptions and judgments about the collectability of the loan portfolio are made, including the creditworthiness of borrowers and the value of the real estate and other assets serving as collateral for the repayment of many loans.
In addition, we are heavily dependent on the 33 Table of Contents strength and capability of our technology systems which we use both to interface with our customers and to manage our internal financial and other systems.
In addition, we are heavily dependent on the strength and capability of our technology systems which we use both to interface with our customers and to manage our internal financial and other systems.
In determining the amount of the allowance for credit losses, management reviews the loans and the loss and delinquency experience and evaluates economic conditions. At December 31, 2024, our allowance for credit losses as a percentage of total loans, net of unearned income, was 1.50%.
In determining the amount of the allowance for credit losses, management reviews the loans and the loss and delinquency experience and evaluates economic conditions. At December 31, 2025, our allowance for credit losses as a percentage of total loans, net of unearned income, was 1.37%.
Further, increased competition among financial 35 Table of Contents services companies due to the recent consolidation of certain competing financial institutions may adversely affect our ability to market our products and services.
Further, increased competition among financial services companies due to the recent consolidation of certain competing financial institutions may adversely affect our ability to market our products and services.
This excludes $12.4 million of the Company’s deposits held by the Bank. We have traditionally obtained funds through deposits for use in lending and investment activities. The interest rates stated for borrowings typically exceed the interest rates paid on deposits.
This excludes $11.8 million of the Company’s deposits held by the Bank. We have traditionally obtained funds through deposits for use in lending and investment activities. The interest rates stated for borrowings typically exceed the interest rates paid on deposits.
Multifamily and commercial real estate loans represented 31.7% of our total loan portfolio at December 31, 2024. Multifamily and commercial real estate loans are often larger and involve greater risks than other types of lending because payments on such loans are often dependent on the successful operation or development of the property or business involved.
Multifamily and commercial real estate loans represented 27.3% of our total loan portfolio at December 31, 2025. Multifamily and commercial real estate loans are often larger and involve greater risks than other types of lending because payments on such loans are often dependent on the successful operation or development of the property or business involved.
In the event that we are unable to perform all these tasks and meet these challenges effectively, including continuing to attract core deposits, our operations, and consequently our earnings, could be adversely impacted. 31 Table of Contents Our ten largest deposit clients account for 25.9% of our total deposits.
In the event that we are unable to perform all these tasks and meet these challenges effectively, including continuing to attract core deposits, our operations, and consequently our earnings, could be adversely impacted. Our ten largest deposit clients account for 25.1% of our total deposits.
Our business strategy is to continue to grow our assets and expand our operations, including through potential strategic acquisitions. Our ability to grow depends, in part, upon our ability to expand our market share, successfully attract core deposits, and to identify loan and investment opportunities as well as opportunities to generate fee-based income.
Our business strategy is to continue to grow our assets and expand our operations, including through strategic acquisitions, such as our announced merger with Signature. Our ability to grow depends, in part, upon our ability to expand our market share, successfully attract core deposits, and to identify loan and investment opportunities as well as opportunities to generate fee-based income.
An increase in the required capital level would further limit our use of capital for other purposes. Risks Related to Laws and Regulation and Their Enforcement As a bank holding company, the sources of funds available to us are limited.
In addition, the card networks require certain capital requirements. An increase in the required capital level would further limit our use of capital for other purposes. Risks Related to Laws and Regulation and Their Enforcement As a bank holding company, the sources of funds available to us are limited.
At December 31, 2024, the weighted average age of our loan portfolio was 3.62 years, however, the average customer relationship is of a longer term. We may not be able to adequately measure and limit the credit risk associated with our loan portfolio, which could adversely affect our profitability.
At December 31, 2025, the weighted average age of our loan portfolio was 3.61 years, however, the average customer relationship is of a longer term. 29 Table of Contents We may not be able to adequately measure and limit the credit risk associated with our loan portfolio, which could adversely affect our profitability.
As of December 31, 2024, the Company had approximately $979.0 million of law firm escrow (or trust) deposits that were evaluated by management to identify an appropriate estimate of FDIC insurance coverage that passes through each deposit account to the beneficial owner of the funds held in the account.
As of December 31, 2025, the Company had approximately $1.23 billion of law firm escrow (or trust) deposits that were evaluated by management to identify an appropriate estimate of FDIC insurance coverage that passes through each deposit account to the beneficial owner of the funds held in the account.
As of December 31, 2024, 44.8% of our loan portfolio was in New York and our loan portfolio had concentrations of 34.2% in New York City. If the local economy, and particularly the real estate market, declines, the rates of delinquencies, defaults, foreclosures, bankruptcies and losses in our loan portfolio would likely increase.
As of December 31, 2025, 36.7% of our loan portfolio was in New York and our loan portfolio had concentrations of 27.8% in New York City. If the local economy, and particularly the real estate market, declines, the rates of delinquencies, defaults, foreclosures, bankruptcies and losses in our loan portfolio would likely increase.
As of December 31, 2024, our ten largest bank depositors accounted for, in the aggregate, 25.9% of our total deposits.
As of December 31, 2025, our ten largest bank depositors accounted for, in the aggregate, 25.1% of our total deposits.
The loss of our deposit clients or substantial reduction of our deposit balances could force us to fund our business with more expensive and less stable funding sources. As of December 31, 2024, approximately $463.9 million, or 28%, of our total Bank deposits of $1.64 billion, were not FDIC insured.
The loss of our deposit clients or substantial reduction of our deposit balances could force us to fund our business with more expensive and less stable funding sources. As of December 31, 2025, approximately $685.1 million, or 33%, of our total Bank deposits of $2.06 billion, were not FDIC insured.
Inflation could also negatively impact us through rising costs and interest rates. Adverse economic conditions and government policy responses to such conditions could have a material adverse effect on our business, financial condition, results of operations and prospects.
Inflation could also negatively impact us through rising costs and interest rates. Adverse economic conditions and government policy responses to such conditions could have a material adverse effect on our business, financial condition, results of operations and prospects. Artificial Intelligence presents risks and challenges that may adversely affect our business.
Additional factors related to the credit quality of consumer loans, particularly consumer post-settlement loans, include the quality of the post-settlement claim and unforeseen court rulings or administrative legal anomalies which could impact the final settlement amount.
Additional factors related to the credit quality of consumer loans, particularly consumer post-settlement loans, include the quality of the post-settlement claim and unforeseen court rulings or administrative legal anomalies which could impact the final settlement amount. Additional factors related to the credit quality of commercial real estate loans include tenant vacancy rates and the quality of management of the property.
The bulk of these deferred tax assets consists of deferred credit loss deductions and deferred compensation deductions. The net deferred tax asset is measured by applying currently-enacted income tax rates to the accounting period during which the tax benefit is expected to be realized. Federal regulators periodically examine our business, and we may be required to remediate adverse examination findings.
The net deferred tax asset is measured by applying currently-enacted income tax rates to the accounting period during which the tax benefit is expected to be realized. 40 Table of Contents Federal regulators periodically examine our business, and we may be required to remediate adverse examination findings.
Nonperforming loans may increase and nonperforming or delinquent loans may adversely affect future performance. In addition, federal and state regulators periodically review the allowance for credit losses and may require an increase in the allowance for credit losses or recognize further loan charge-offs.
In addition, federal and state regulators periodically review the allowance for credit losses and may require an increase in the allowance for credit losses or recognize further loan charge-offs.
We expect to continue to experience growth in the number of our employees and customers and the scope of our operations. Our success will depend upon the ability of our officers and key employees to continue to implement and improve our operational and other systems, to manage multiple, concurrent customer relationships, and to hire, train and manage our employees.
Our success will depend upon the ability of our officers and key employees to continue to implement and improve our operational and other systems, to manage multiple, concurrent customer relationships, and to hire, train and manage our employees.
A substantial portion of our loan portfolio consists of multifamily real estate loans and commercial real estate loans, which have a higher degree of risk than other types of loans. At December 31, 2024, we had $355.2 million of multifamily loans and $87.0 million of commercial real estate loans.
A substantial portion of our loan portfolio consists of multifamily real estate loans and commercial real estate loans, which have a higher degree of risk than other types of loans. At December 31, 2025, we had $372.8 million of multifamily loans and $107.3 million of commercial real estate loans.
If assumptions prove to be incorrect, the allowance for credit losses may not cover probable incurred losses in the loan portfolio at the date of the financial statements. Significant additions to the allowance would materially decrease net income. We had one nonperforming multifamily loan totaling $10.9 million at December 31, 2024.
If assumptions prove to be incorrect, the allowance for credit losses may not cover probable incurred losses in the loan portfolio at the date of the financial statements. Significant additions to the allowance would materially decrease net income.
Because of the uncertainty of estimates involved in these matters, we may be required to do one or more of the following: significantly increase the allowance for credit losses or sustain credit losses that are significantly higher than the reserve provided. These could have a material adverse effect on our business, financial condition or results of operations.
Because of the uncertainty of estimates involved in these matters, we may be required to do one or more of the following: significantly increase the allowance for credit losses or sustain credit losses that are significantly higher than the reserve provided.
ITEM 1A. Risk Factors The material risks that management believes affect the Company are described below. You should carefully consider the risks as described below, together with all of the information included herein. The risks described below are not the only risks the Company faces.
You should carefully consider the risks as described below, together with all of the information included herein. The risks described below are not the only risks the Company faces.
At December 31, 2024, our consumer loans held for investment totaled $19.3 million, or 1.4% of our total loan portfolio, of which $2.7 million, or 14.0%, were post-settlement consumer loans.
At December 31, 2025, our consumer loans held for investment totaled $22.8 million, or 1.3% of our total loan portfolio, of which $3.1 million, or 13.8%, were post-settlement consumer loans.
It is possible that competitive pressures will result in us absorbing a portion of such increases in the future, which would increase our costs, reduce our profit 36 Table of Contents margin and adversely affect our business and financial condition. In addition, the card networks require certain capital requirements.
From time to time, the card networks increase the fees that they charge to acquirers and we charge to our merchants. It is possible that competitive pressures will result in us absorbing a portion of such increases in the future, which would increase our costs, reduce our profit margin and adversely affect our business and financial condition.
Any increase in our allowance for credit losses or loan charge-offs as required by these regulatory authorities may have a material adverse effect on our results of operations or financial condition.
Any increase in our allowance for credit losses or loan charge-offs as required by these regulatory authorities may have a material adverse effect on our results of operations or financial condition. Our loan portfolio is unseasoned. With a growing and generally unseasoned loan portfolio, our credit risk may continue to increase and our future performance could be adversely affected.
Any of these results could have a material adverse effect on our business, financial condition, results of operations and growth prospects. 38 Table of Contents We could be adversely affected by the soundness of other financial institutions and other third parties we rely on. Financial services institutions are interrelated as a result of trading, clearing, counterparty or other relationships.
We could be adversely affected by the soundness of other financial institutions and other third parties we rely on. Financial services institutions are interrelated as a result of trading, clearing, counterparty or other relationships.
As a result, the value of the collateral located in New York State securing the Company’s multifamily loans or the future net operating income of such properties could potentially become impaired which, in turn, could have a material adverse effect on our financial condition and results of operations. ​ Risks Related to our Business We have experienced significant growth, which makes it difficult to forecast our revenue and evaluate our business and future prospects.
As a result, the value of the collateral located in New York State securing the Company’s multifamily loans or the future net operating income of such properties could potentially become impaired which, in turn, could have a material adverse effect on our financial condition and results of operations. ​ Additionally, new potential policy changes could affect the city’s multifamily housing market.
Interruption of our customers’ supply chains and federal funding could negatively impact their business and operations and impact their ability to repay their loans.
The complexity surrounding AI use makes it difficult to know the expected impact on our business. Interruption of our customers’ supply chains and federal funding could negatively impact their business and operations and impact their ability to repay their loans.
At December 31, 2024, the weighted average age of our loans was 7.64 years, 3.27 years, 3.16 years, 3.76 years and 2.50 years for our 1 – 4 family loans, multifamily loans, commercial real estate loans, commercial loans and consumer loans, respectively.
At December 31, 2025, the weighted average age of our loans was 8.03 years, 3.69 years, 3.26 years, 3.57 years and 4.26 years for our 1 – 4 family loans, multifamily loans, commercial real estate loans, commercial loans and consumer loans, respectively.
A substantial portion of our business is dependent on the prospects of the legal industry and changes in the legal industry may adversely affect our growth and profitability. We depend on our relationships within the legal community and our products and services tailored to the legal industry account for a significant source of our revenue.
We depend on our relationships within the legal community and our products and services tailored to the legal industry account for a significant source of our revenue.
Additional 27 Table of Contents factors related to the credit quality of commercial real estate loans include tenant vacancy rates and the quality of management of the property. A failure to effectively measure and limit the credit risk associated with our loan portfolio could have an adverse effect on our business, financial condition, and results of operations.
A failure to effectively measure and limit the credit risk associated with our loan portfolio could have an adverse effect on our business, financial condition, and results of operations.
Risks Related to Our Common Stock The Company’s stock price can be volatile. The Company’s stock price can fluctuate in response to a variety of factors, some of which are not under our control.
These could have a material adverse effect on our business, financial condition or results of operations. ​ 42 Table of Contents Risks Related to Our Common Stock The Company’s stock price can be volatile. The Company’s stock price can fluctuate in response to a variety of factors, some of which are not under our control.
Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for us.
Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for us. Any of these results could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
At December 31, 2024, our commercial loans totaled $920.6 million, or 65.9% of our total loans, including $835.8 million of Commercial Litigation-Related Loans, which represented 90.8% of our commercial loans.
At December 31, 2025, our commercial loans totaled $1.25 billion, or 70.8% of our total loans, including $1.18 billion of Commercial Litigation-Related Loans, which represented 94.6% of our commercial loans.
Other primary sources of funds consist of cash flows from operations, maturities and sales of investment securities and/or loans, brokered deposits, borrowings from the FHLB of New York and/or FRB discount window, and unsecured borrowings. The Company also may borrow funds from third-party lenders, such as other financial institutions.
Any changes made to the rates offered on deposits to remain competitive with other financial institutions may also adversely affect profitability and 31 Table of Contents liquidity. Other primary sources of funds consist of cash flows from operations, maturities and sales of investment securities and/or loans, brokered deposits, borrowings from the FHLB and/or FRB discount window, and unsecured borrowings.
As a result of our recent accelerated growth, our ability to forecast our future results of operations and plan for and model future growth is limited and subject to a number of uncertainties.
On March 12, 2026, the Company announced the entry into a merger agreement with Signature that, if approved, will nearly double the size of the Company. As a result of our recent accelerated growth, our ability to forecast our future results of operations and plan for and model future growth is limited and subject to a number of uncertainties.
Removed
The estimation of expected credit losses under current US GAAP may create volatility in earnings as compared to previous models which may have a material impact on its financial condition or results of operations.
Added
Risk Factors Summary of Risk Factors The following is a summary of some of the material risks and uncertainties that could have an adverse effect on our business. ● Risks Related to Our Lending Activities o Because we intend to continue to increase our commercial loans, our credit risk may increase. o A substantial portion of our loan portfolio consists of multifamily real estate loans and commercial real estate loans, which have a higher degree of risk than other types of loans. o We may increase our purchases or originations of consumer loans, and such loans generally carry greater risk than loans secured by owner-occupied, 1 – 4 family real estate, and these risks will increase as we continue to increase originations of these types of loans. o A substantial majority of our loans and operations are in New York, and therefore our business is particularly vulnerable to a downturn in the New York City economy. o If the allowance for credit losses is not sufficient to cover actual credit losses, earnings could decrease. o Our loan portfolio is unseasoned. o We may not be able to adequately measure and limit the credit risk associated with our loan portfolio, which could adversely affect our profitability. o Our New York City multifamily loan portfolio could be adversely impacted by changes in policy legislation or regulation which, in turn, could have a material adverse effect on our financial condition and results of operations. ● Risks Related to Our Business o We have experienced significant growth, which makes it difficult to forecast our revenue and evaluate our business and future prospects. o The merger with Signature and any future acquisitions could disrupt the Company’s business and adversely affect our results of operations, financial condition and cash flows. o A substantial portion of our business is dependent on the prospects of the legal industry and changes in the legal industry may adversely affect our growth and profitability. o A lack of liquidity could adversely affect the Company’s financial condition and results of operations. o The loss of our deposit clients or substantial reduction of our deposit balances could force us to fund our business with more expensive and less stable funding sources. o The Bank has deposit accounts whose ownership is based on a fiduciary relationship, which management evaluates to identify an appropriate estimate of FDIC insurance coverage, and such estimates may underreport the amount of the Bank’s uninsured deposits. o Reputational risk and social factors may impact our results and damage our brand. o We may incur losses related to our exposure to NFL consumer post-settlement loans through our equity method investment in a third party sponsored variable interest entity. o As a business operating in the financial services industry, our business and operations may be adversely affected in numerous and complex ways by weak economic conditions. o Artificial Intelligence presents risks and challenges that may adversely affect our business. o Interruption of our customers’ supply chains and federal funding could negatively impact their business and operations and impact their ability to repay their loans. o We may not be able to grow, and if we do we may have difficulty managing that growth. o Our ten largest deposit clients account for 25.1% of our total deposits. ● Risks Related to Market Interest Rates o Interest rate shifts may reduce net interest income and otherwise negatively impact our financial condition and results of operations. ● Risks Related to Operations o Inflation can have an adverse impact on our business and on our customers. o We are exposed to the risks of natural disasters and global market disruptions. o We rely heavily on our management team and our business could be adversely affected by the unexpected loss of one or more of our officers. 26 Table of Contents o We are subject to certain operational risks, including, but not limited to, customer or employee fraud and data processing system failures and errors. o The Company’s controls and procedures may fail or be circumvented. o We face risks related to our operational, technological and organizational infrastructure. o A failure in our operational systems or infrastructure, or those of third parties, could impair our liquidity, disrupt our businesses, result in the unauthorized disclosure of confidential information, damage our reputation and cause financial losses. o The occurrence of fraudulent activity, breaches or failures of our information security controls or cybersecurity-related incidents could have a material adverse effect on our business, financial condition and results of operations. o If our risk management framework is not effective at mitigating risk and loss to us, we could suffer unexpected losses and our results of operations could be materially adversely affected. ● Risks Related to Competitive Matters o We operate in a highly competitive industry and face significant competition from other financial institutions and financial services providers, which may decrease our growth or profits. ● Risks Related to Our Payment Processing Business o Our merchants or ISOs may be unable to satisfy obligations for which we may ultimately be liable. o Fraud by merchants or others could have a material adverse effect on our business and financial condition. o Changes in card network rules, standards or fees could adversely affect our business or operations. ● Risks Related to Laws and Regulation and Their Enforcement o As a bank holding company, the sources of funds available to us are limited. o Our business, financial condition, results of operations and future prospects could be adversely affected by the highly regulated environment and the laws and regulations that govern our operations, corporate governance, executive compensation and accounting principles, or changes in any of them. o Federal regulators periodically examine our business, and we may be required to remediate adverse examination findings. o We are subject to the Community Reinvestment Act and fair lending laws, and failure to comply with these laws could lead to material penalties. o The fiscal, monetary and regulatory policies of the federal government and its agencies could have an adverse effect on our results of operations. o We face a risk of noncompliance and enforcement action with the Bank Secrecy Act and other anti-money laundering statutes and regulations. o We could be adversely affected by the soundness of other financial institutions and other third parties we rely on. ● Risks Related to Accounting Matters o Changes in accounting standards could materially impact our financial statements. o Our accounting estimates rely on analytics, models and assumptions, which may not accurately predict events. ● Risks Related to Our Common Stock o The Company’s stock price can be volatile. o Anti-takeover provisions could negatively impact our shareholders. ​ The material risks that management believes affect the Company are described below.
Removed
In June 2016, the FASB issued an accounting standard update, “Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments,” which replaced the current “incurred loss” model for recognizing credit losses with an “expected loss” model referred to as the CECL model.
Added
Nonperforming assets totaled $8.6 million as of December 31, 2025, and consisted of one multifamily loan totaling $7.8 million and one commercial loan (a small business merchant uncorrelated to our primary commercial litigation lending platform and other commercial loans) totaling $736 thousand. Nonperforming loans may increase and nonperforming or delinquent loans may adversely affect future performance.
Removed
Under the CECL model, the Company is required to present certain financial assets carried at amortized cost, such as loans held for investment and held-to-maturity debt securities, at the net amount expected to be collected.
Added
The current New York City administration has expressed support for rent freezes and expanded tenant protections, which, if enacted, may reduce rental income and property values across multifamily properties. These market dynamics could adversely impact the credit quality of our borrowers. Lower property cash flows may impair borrowers’ ability to service existing debt.
Removed
The measurement of expected credit losses is based on information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. This measurement takes place at the time the financial asset is first entered into and periodically thereafter.
Added
In addition, a sustained decline in collateral values could elevate loan-to-value ratios and reduce recovery prospects in the event of foreclosure. ​ Risks Related to our Business We have experienced significant growth, which makes it difficult to forecast our revenue and evaluate our business and future prospects.
Removed
This differs significantly from the “incurred loss” model previously required under current GAAP, which delays recognition until it is probable a loss has been incurred. The CECL model may create more volatility in the level of the allowance for credit losses (“ACL”).
Added
The merger with Signature and any future acquisitions could disrupt the Company’s business and adversely affect our results of operations, financial condition and cash flows. On March 12, 2026, the Company announced that it has entered into a merger agreement with Signature.
Removed
If the Company is required to materially increase its level of the ACL for any reason, such increase could adversely affect its business, financial condition and results of operations. ​ Our loan portfolio is unseasoned. With a growing and generally unseasoned loan portfolio, our credit risk may continue to increase and our future performance could be adversely affected.
Added
The Company may choose to expand in the future by making additional acquisitions, including other financial institutions, 30 Table of Contents branches or fee-based businesses, that could be material to its business, results of operations, financial condition and cash flows.
Removed
Any changes made to the rates offered on deposits to remain competitive with other financial institutions may also adversely affect profitability and 28 Table of Contents liquidity.
Added
Acquisitions, including the merger with Signature, involve many risks, including, but not limited to, the following: ● an acquisition may negatively affect the Company’s results of operations, financial condition or cash flows because it may require us to incur charges or assume substantial debt or other liabilities, may cause adverse tax consequences or unfavorable accounting treatment, may expose us to claims and disputes by third parties, or may not generate sufficient financial return to offset additional costs and expenses related to the acquisition; ● the Company may encounter difficulties or unforeseen expenditures in integrating the operations of any company that it acquires, particularly if key personnel of the acquired company decide not to work for us; ● an acquisition may disrupt our ongoing business, divert resources, increase our expenses and distract our management; ● an acquisition, and in particular the merger, will involve the entry into geographic or business markets in which the Company has little or no prior experience or where competitors have stronger market positions; ● if the Company incurs debt to fund such acquisition, such debt may subject us to material restrictions on our ability to conduct our business as well as financial maintenance covenants; and ● the Company will issue a significant amount of equity securities to the Signature shareholders in connection with the merger transaction, such that existing shareholders will be diluted and earnings per share may decrease.
Removed
From time to time, the card networks increase the fees that they charge to acquirers and we charge to our merchants.
Added
The occurrence of any of these risks could have a material adverse effect on the Company’s business, results of operations, financial condition and cash flows. A substantial portion of our business is dependent on the prospects of the legal industry and changes in the legal industry may adversely affect our growth and profitability.
Added
The Company also may borrow funds from third-party lenders, such as other financial institutions.
Added
Many companies in the finance industry including us and our vendors have begun incorporating artificial intelligence (AI) software and applications into our business activities in order to increase productivity. The AI industry worldwide is developing rapidly, as is the legal and regulatory environment around its use.
Added
Reliance on AI therefore presents risks and challenges as we adapt to evolving rules and regulations, concerns regarding data privacy and misuse of intellectual property, and data biases and accuracy of responses to inquiries during use. These potential issues could raise compliance costs and increase security and liability concerns, which may reduce any productivity gained through its use.
Added
We can provide no assurance that we will be successful in increasing the volume of our loans and deposits at acceptable levels and upon terms acceptable to us.
Added
The bulk of these deferred tax assets consists of deferred credit loss deductions and deferred compensation deductions.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThis strategy includes employee training, innovative technologies, and policies and procedures in the areas of information security, data governance, business continuity and disaster recovery, privacy, third-party risk management, and incident response. ​ The Company leverages a variety of industry frameworks and regulatory guidance to develop and maintain its information systems and cybersecurity program, including but not limited to Interagency Guidelines Establishing Information Security Standards, Federal Financial Institutions Examination Council (“FFIEC”) Information Technology Examination Handbook (with particular emphasis on the FFIEC’s Information Security and Business Continuity Management Handbooks), FFIEC Cybersecurity Assessment Tool, Gramm-Leach-Bliley Act (“GLBA”) 501(b), and the Center for Internet Security (“CIS”) Critical Controls Framework.
Biggest changeThis strategy includes employee training, innovative technologies, and policies and procedures in the areas of information security, data governance, business continuity and disaster recovery, privacy, third-party risk management, and incident response. ​ The Company leverages a variety of industry frameworks and regulatory guidance to develop and maintain its information systems and cybersecurity program, including but not limited to Interagency Guidelines Establishing Information Security Standards, Federal Financial Institutions Examination Council (“FFIEC”) Information Technology Examination Handbook (with particular emphasis on the FFIEC’s Information Security and Business Continuity Management Handbooks), Gramm-Leach-Bliley Act (“GLBA”) 501(b), and the Center for Internet Security (“CIS”) Critical Controls Framework.
In addition, the program leverages certain, third-party benchmarking, audits, and third-party threat intelligence sources to facilitate and enhance the effectiveness of the program. ​ Core activities supporting the Company’s strategy include cybersecurity training, technology optimization, threat intelligence, vulnerability and patch management and the testing of incident response, business continuity and disaster recovery capabilities. ​ Employees play a significant role in the defense against cybersecurity threats.
In addition, the program leverages certain, third-party benchmarking, audits, and third-party threat intelligence sources to facilitate and enhance the effectiveness of the program. ​ Core activities supporting the Company’s strategy include cybersecurity training, technology optimization, threat intelligence, vulnerability and patch management and the testing of incident response, business continuity and disaster recovery capabilities. 43 Table of Contents ​ Employees play a significant role in the defense against cybersecurity threats.
Accordingly, the Company utilizes a 40 Table of Contents third-party risk management program, which includes a detailed onboarding process and periodic reviews of vendors with access to sensitive company data. ​ As indicated above, supporting the operations are incident response, business continuity, and disaster recovery programs. These programs identify and assess threats and evaluate risk.
Accordingly, the Company utilizes a third-party risk management program, which includes a detailed onboarding process and periodic reviews of vendors with access to sensitive company data. ​ As indicated above, supporting the operations are incident response, business continuity, and disaster recovery programs. These programs identify and assess threats and evaluate risk.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. Properties At December 31, 2024, we conducted business through our corporate headquarters and full service branch in Jericho, New York (Nassau County) and one administrative office in Boca Raton, Florida. In 2024, our lease commenced on our Los Angeles, California location which we intend to operate as a full service branch planned to open in 2025.
Biggest changeITEM 2. Properties At December 31, 2025, we conducted business through our corporate headquarters, full service branches in Jericho, New York (Nassau County) and Los Angeles, California, and one administrative office in Boca Raton, Florida. All the current locations are leased properties.
All the current locations are leased properties. At December 31, 2024, the total net book value of our leasehold improvements, furniture, fixtures and equipment was approximately $2.4 million.
At December 31, 2025, the total net book value of our leasehold improvements, furniture, fixtures and equipment was approximately $4.4 million. 44 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAt December 31, 2024, 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 4. Mine Safety Disclosures Not applicable. ​ 41 Table of Contents PART II
Biggest changeAt December 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 4. Mine Safety Disclosures Not applicable. ​ 45 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeITEM 4. Mine Safety Disclosures 41 ​ ​ ​ PART II ​ 42 ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 42 ITEM 6. [Reserved] 43 ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 44 ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 66 ITEM 8.
Biggest changeITEM 4. Mine Safety Disclosures 45 ​ ​ ​ PART II ​ 46 ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 46 ITEM 6. [Reserved] 48 ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 49 ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 71 ITEM 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table summarizes information as of December 31, 2024 relating to equity compensation plans of the Company pursuant to which grants of options, restricted stock awards or other rights to acquire shares may be granted from time to time. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of securities ​ ​ Number of securities ​ ​ ​ ​ remaining available for ​ ​ to be issued upon ​ Weighted-average ​ future issuance under ​ ​ exercise of ​ exercise price of ​ equity compensation ​ ​ outstanding options, ​ outstanding options, ​ plans (excluding securities ​ ​ warrants and rights ​ warrants and rights ​ reflected in column (a)) Plan Category (a) (b) (c) Equity Compensation Plans Approved by Security Holders 559,308 ​ $ 24.72 476,571 Equity Compensation Plans Not Approved by Security Holders — ​ — — Total Equity Compensation Plans 559,308 ​ $ 24.72 476,571 ​ ​ 42 Table of Contents The following table presents information regarding purchase of our common stock during the quarter ended December 31, 2024 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) October 1, 2024 through October 31, 2024 ​ — ​ $ — ​ — ​ 257,694 November 1, 2024 through November 30, 2024 ​ — ​ ​ — ​ — ​ 257,694 December 1, 2024 through December 31, 2024 ​ — ​ ​ — ​ — ​ 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.
Biggest changeThe following table summarizes information as of December 31, 2025 relating to equity compensation plans of the Company pursuant to which grants of options, restricted stock awards (“RSAs”) or other rights to acquire shares may be granted from time to time. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of securities ​ ​ Number of securities ​ ​ ​ ​ remaining available for ​ ​ to be issued upon ​ Weighted-average ​ future issuance under ​ ​ exercise of ​ exercise price of ​ equity compensation ​ ​ outstanding options, ​ outstanding options, ​ plans (excluding securities ​ ​ warrants and rights ​ warrants and rights ​ reflected in column (a)) Plan Category ​ ​ ​ (a) ​ ​ ​ (b) ​ ​ ​ (c) Equity Compensation Plans Approved by Security Holders 376,910 ​ $ 34.88 380,000 Equity Compensation Plans Not Approved by Security Holders — ​ — — Total Equity Compensation Plans 376,910 ​ $ 34.88 380,000 ​ The following table presents information regarding purchase of our common stock during the quarter ended December 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) October 1, 2025 through October 31, 2025 ​ — ​ $ — ​ — ​ 257,694 November 1, 2025 through November 30, 2025 ​ — ​ ​ — ​ — ​ 257,694 December 1, 2025 through December 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.
Any determination to pay cash dividends on our common stock is made by our board of directors and depends on a number of factors, including: ● our historical and projected financial condition, liquidity and results of operations; ● our capital levels and requirements; ● statutory and regulatory prohibitions and other limitations; ● any contractual restriction on our ability to pay cash dividends, including pursuant to the terms of any of our credit agreements or other borrowing arrangements; ● our business strategy; ● tax considerations; ● any acquisitions or potential acquisitions that we may examine; ● general economic conditions; and ● other factors deemed relevant by our board of directors.
Any determination to pay cash dividends on our common stock is made by our board of directors and depends on a number of factors, including: ● our historical and projected financial condition, liquidity and results of operations; 46 Table of Contents ● our capital levels and requirements; ● statutory and regulatory prohibitions and other limitations; ● any contractual restriction on our ability to pay cash dividends, including pursuant to the terms of any of our credit agreements or other borrowing arrangements; ● our business strategy; ● tax considerations; ● any acquisitions or potential acquisitions that we may examine; ● general economic conditions; and ● other factors deemed relevant by our board of directors.
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our shares of common stock are traded on the NASDAQ Capital Market under the symbol “ESQ”. The approximate number of holders of record of Esquire Financial Holding, Inc.’s common stock as of March 1, 2025 was 5,470.
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our shares of common stock are traded on the NASDAQ Capital Market under the symbol “ESQ”. The approximate number of holders of record of Esquire Financial Holding, Inc.’s common stock as of March 1, 2026 was 15,308.
Shares repurchased pursuant to these plans during the three months ended December 31, 2024 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Period ​ Total number of shares purchased ​ ​ Average price paid per share October 1, 2024 through October 31, 2024 ​ — ​ $ — November 1, 2024 through November 30, 2024 ​ — ​ ​ — December 1, 2024 through December 31, 2024 ​ 39,502 ​ ​ 79.01 ​ 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. ​ ​ ​ ​
Shares repurchased pursuant to these plans during the three months ended December 31, 2025 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Period ​ Total number of shares purchased ​ ​ Average price paid per share October 1, 2025 through October 31, 2025 ​ — ​ $ — November 1, 2025 through November 30, 2025 ​ — ​ ​ — December 1, 2025 through December 31, 2025 ​ 37,620 ​ ​ 106.01 ​ 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. ​ ​ ​ ​
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.
There is no expiration date for the stock repurchase program. ​ 47 Table of Contents Participants in the Company’s stock-based incentive plans may have shares withheld to cover income taxes upon the vesting of RSAs pursuant to the terms of the applicable plan and not under the Company’s share repurchase program.
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The Company’s common stock began trading on the NASDAQ Capital Market on June 27, 2017. In 2022, we initiated a regular quarterly dividend on our common stock.
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The Company’s common stock began trading on the NASDAQ Capital Market on June 27, 2017. Pursuant to the regulations of the SEC, the graph below compares our performance with that of the total return for the KBW® Bank Index and the NASDAQ® Composite Index from December 31, 2020 through December 31, 2025.
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The graph assumes the reinvestment of dividends in additional shares of the same class of equity securities as those listed below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, Index ​ 2020 ​ 2021 ​ 2022 ​ 2023 ​ 2024 ​ 2025 Esquire Financials Holdings, Inc. ​ 100.00 ​ 164.15 ​ 225.43 ​ 260.34 ​ 414.28 ​ 531.89 KBW Bank Index ​ 100.00 ​ 135.05 ​ 103.01 ​ 98.07 ​ 130.19 ​ 167.69 NASDAQ Composite Index ​ 100.00 ​ 121.39 ​ 81.21 ​ 116.47 ​ 149.83 ​ 180.33 ​ In 2022, we initiated a regular quarterly dividend on our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe allowance for credit losses is based on management’s assessment of various factors affecting the loan portfolio, including portfolio composition, delinquent and nonaccrual loans, national and local business conditions and loss experience and an overall evaluation of the quality of the underlying collateral. 51 Table of Contents The following table sets forth activity in our allowance for credit losses for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2024 ​ 2023 ​ 2022 ​ ​ (In thousands) Allowance at beginning of year ​ $ 16,631 ​ $ 12,223 ​ $ 9,076 Impact of CECL adoption ​ — ​ 283 ​ — Provision for credit losses ​ 4,700 ​ 4,525 ​ 3,490 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Charge-offs: ​ ​ ​ Multifamily ​ — ​ — ​ 178 Commercial real estate ​ — ​ — ​ — 1 – 4 family ​ — ​ — ​ — Commercial ​ — ​ 5 ​ 64 Consumer ​ 390 ​ 439 ​ 150 Total charge-offs ​ 390 ​ 444 ​ 392 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Recoveries: ​ ​ ​ Multifamily ​ — ​ — ​ 17 Commercial real estate ​ — ​ — ​ — 1 – 4 family ​ — ​ — ​ — Commercial ​ — ​ — ​ 32 Consumer ​ 38 ​ 44 ​ — Total recoveries ​ 38 ​ 44 ​ 49 Allowance at end of year ​ $ 20,979 ​ $ 16,631 ​ $ 12,223 ​ The following table presents average loans and credit loss experience for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2024 ​ ​ ​ ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Charge-offs ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Charge-offs ​ ​ ​ ​ Average ​ ​ ​ Net ​ ​ ​ to Average ​ ​ ​ ​ ​ Average ​ ​ ​ Net ​ ​ ​ to Average ​ ​ ​ ​ Loans (1) ​ ​ ​ Charge-offs ​ ​ ​ Loans ​ ​ ​ ​ ​ Loans (1) ​ ​ ​ Charge-offs ​ ​ ​ Loans ​ ​ ​ (Dollars in thousands) ​ Multifamily ​ $ 349,360 ​ ​ $ — ​ ​ ​ — % ​ ​ ​ $ 304,848 ​ ​ $ — ​ ​ ​ — % Commercial real estate ​ 88,272 ​ ​ — ​ ​ ​ — ​ ​ ​ ​ 90,735 ​ ​ — ​ ​ ​ — ​ 1 – 4 family ​ ​ 15,898 ​ ​ ​ — ​ ​ ​ — ​ ​ ​ ​ ​ 22,109 ​ ​ ​ — ​ ​ ​ — ​ Commercial ​ 786,534 ​ ​ — ​ ​ ​ — ​ ​ ​ ​ 621,730 ​ ​ 5 ​ ​ ​ 0.00 ​ Consumer ​ 18,698 ​ ​ 352 ​ ​ ​ 1.88 ​ ​ ​ ​ 13,477 ​ ​ 395 ​ ​ ​ 2.93 ​ Total ​ $ 1,258,762 ​ ​ $ 352 ​ ​ ​ 0.03 % ​ ​ ​ $ 1,052,899 ​ ​ $ 400 ​ ​ ​ 0.04 % ​ (1) Excludes net deferred loan fees and unearned premiums.
Biggest changeThe following table sets forth activity in our allowance for credit losses for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ ​ 2025 ​ 2024 ​ 2023 ​ ​ (In thousands) Allowance at beginning of year ​ $ 20,979 ​ $ 16,631 ​ $ 12,223 Impact of CECL adoption ​ — ​ — ​ 283 Provision for credit losses ​ 9,675 ​ 4,700 ​ 4,525 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Charge-offs: ​ ​ ​ ​ ​ ​ Multifamily ​ 3,275 ​ — ​ — Commercial real estate ​ — ​ — ​ — 1 – 4 family ​ 79 ​ — ​ — Commercial ​ 3,250 ​ — ​ 5 Consumer ​ 57 ​ 390 ​ 439 Total charge-offs ​ 6,661 ​ 390 ​ 444 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Recoveries: ​ ​ ​ ​ ​ ​ Multifamily ​ — ​ — ​ — Commercial real estate ​ — ​ — ​ — 1 – 4 family ​ — ​ — ​ — Commercial ​ — ​ — ​ — Consumer ​ 29 ​ 38 ​ 44 Total recoveries ​ 29 ​ 38 ​ 44 Allowance at end of year ​ $ 24,022 ​ $ 20,979 ​ $ 16,631 ​ The following table presents average loans and credit loss experience for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ ​ ​ 2024 ​ ​ ​ ​ ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Charge-offs ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Charge-offs ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Charge-offs ​ ​ ​ ​ Average ​ ​ ​ Net ​ ​ ​ ​ to Average ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ Net ​ ​ ​ ​ to Average ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ Net ​ ​ ​ ​ to Average ​ ​ ​ ​ Loans (1) ​ ​ ​ Charge-offs ​ ​ ​ ​ Loans ​ ​ ​ ​ ​ ​ Loans (1) ​ ​ ​ ​ Charge-offs ​ ​ ​ ​ Loans ​ ​ ​ ​ ​ ​ Loans (1) ​ ​ ​ ​ Charge-offs ​ ​ ​ ​ Loans ​ ​ ​ (Dollars in thousands) ​ Multifamily ​ $ 363,895 ​ ​ $ 3,275 ​ ​ ​ ​ 0.90 ​ % ​ ​ ​ $ 349,360 ​ ​ ​ $ — ​ ​ ​ ​ — % ​ ​ ​ ​ $ 304,848 ​ ​ ​ $ — ​ ​ ​ ​ — % Commercial real estate ​ 95,724 ​ ​ — ​ ​ ​ ​ — ​ ​ ​ ​ ​ 88,272 ​ ​ ​ — ​ ​ ​ ​ — ​ ​ ​ ​ ​ 90,735 ​ ​ ​ — ​ ​ ​ ​ — ​ 1 – 4 family ​ ​ 10,439 ​ ​ ​ 79 ​ ​ ​ ​ 0.76 ​ ​ ​ ​ ​ ​ 15,898 ​ ​ ​ ​ — ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ 22,109 ​ ​ ​ ​ — ​ ​ ​ ​ — ​ Commercial ​ 1,022,283 ​ ​ 3,250 ​ ​ ​ ​ 0.32 ​ ​ ​ ​ ​ 786,534 ​ ​ ​ — ​ ​ ​ ​ — ​ ​ ​ ​ ​ 621,730 ​ ​ ​ 5 ​ ​ ​ ​ 0.00 ​ Consumer ​ 19,346 ​ ​ 28 ​ ​ ​ ​ 0.14 ​ ​ ​ ​ ​ 18,698 ​ ​ ​ 352 ​ ​ ​ ​ 1.88 ​ ​ ​ ​ ​ 13,477 ​ ​ ​ 395 ​ ​ ​ ​ 2.93 ​ Total ​ $ 1,511,687 ​ ​ $ 6,632 ​ ​ ​ ​ 0.44 ​ % ​ ​ ​ $ 1,258,762 ​ ​ ​ $ 352 ​ ​ ​ ​ 0.03 % ​ ​ ​ ​ $ 1,052,899 ​ ​ ​ $ 400 ​ ​ ​ ​ 0.04 % 57 Table of Contents ​ (1) Excludes net deferred loan fees and unearned premiums.
Net Interest Income. Net interest income increased $16.2 million, or 19.3%, to $99.9 million for the year ended December 31, 2024 from $83.8 million for the year ended December 31, 2023, due to a $21.5 million increase in interest income, partially offset by a $5.3 million increase in interest expense.
Net interest income increased $16.2 million, or 19.3%, to $99.9 million for the year ended December 31, 2024 from $83.8 million for the year ended December 31, 2023, due to a $21.5 million increase in interest income, partially offset by a $5.3 million increase in interest expense.
When property is acquired, it is initially recorded at the fair value less costs to sell at the date of foreclosure, establishing a new cost basis. Holding costs and declines in fair value after acquisition of the property result in charges against income. At December 31, 2024 and 2023, we did not have any foreclosed assets.
When property is acquired, it is initially recorded at the fair value less costs to sell at the date of foreclosure, establishing a new cost basis. Holding costs and declines in fair value after acquisition of the property result in charges against income. At December 31, 2025, 2024 and 2023, we did not have any foreclosed assets.
The following table sets forth certain information at December 31, 2024 regarding the contractual maturity of our held for investment loan portfolio. Demand loans, loans having no stated repayment schedule or maturity, and overdraft loans are reported as being due in one year or less.
The following table sets forth certain information at December 31, 2025 regarding the contractual maturity of our held for investment loan portfolio. Demand loans, loans having no stated repayment schedule or maturity, and overdraft loans are reported as being due in one year or less.
Additionally, approximately 90% of our commercial loans have interest rate floor protection as of December 31, 2024. Nonperforming Assets Nonperforming assets include loans that are 90 or more days past due or on nonaccrual status, including real estate and other loan collateral acquired through foreclosure and repossession.
Additionally, approximately 90% of our commercial loans have interest rate floor protection as of December 31, 2025. Nonperforming Assets Nonperforming assets include loans that are 90 or more days past due or on nonaccrual status, including real estate and other loan collateral acquired through foreclosure and repossession.
Debt Securities Portfolio At December 31, 2024 and 2023, all debt securities available-for-sale were carried at fair value and we had no investments in a single company or entity, other than government and government agency securities, which had an aggregate book value in excess of 10% of our equity.
Debt Securities Portfolio At December 31, 2025 and 2024, all debt securities available-for-sale were carried at fair value and we had no investments in a single company or entity, other than government and government agency securities, which had an aggregate book value in excess of 10% of our equity.
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 December 31, 2024.
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 December 31, 2025.
The composition and maturities of the investment securities portfolio at December 31, 2024, are summarized in the following table. Maturities are based on the final contractual payment dates and do not reflect the impact of prepayments or early redemptions that may occur.
The composition and maturities of the investment securities portfolio at December 31, 2025, are summarized in the following table. Maturities are based on the final contractual payment dates and do not reflect the impact of prepayments or early redemptions that may occur.
In addition, because future events affecting borrowers and collateral cannot be predicted with certainty, there can be no assurance that the existing allowance for credit losses is adequate or that increases will not be necessary should the quality of any loans deteriorate as a result of the factors discussed above.
In addition, because future events affecting borrowers and collateral cannot be predicted with certainty, there can be no assurance that the existing allowance for credit losses is adequate or that 58 Table of Contents increases will not be necessary should the quality of any loans deteriorate as a result of the factors discussed above.
This increase was attributable to an 87 basis point increase in yields, driven by our investing strategy of deploying excess cash flow into short duration agency mortgage-backed securities while tempering our real estate lending, as well as a $54.9 million, or 26.1%, increase in average securities balances.
This increase was attributable to an 87 basis point increase in yields, driven by our investing strategy of deploying excess cash flow into short duration agency mortgage-backed 66 Table of Contents securities while tempering our real estate lending, as well as a $54.9 million, or 26.1%, increase in average securities balances.
As of December 31, 2024 and December 31, 2023, 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.
As of December 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.
Through our wholly owned bank subsidiary, Esquire Bank, National Association, 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.
Through our wholly owned bank subsidiary, Esquire Bank, National Association, we are a full service commercial bank dedicated to serving the financial needs of the legal and small business communities (as well as their owners and employees) on a national basis, and commercial and retail customers in the New York metropolitan market.
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.
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. 50 Table of Contents Qualitative factors are used to supplement the static pool methodology to determine total estimated expected credit losses during a given period.
In 2024, the Company received cash consideration resulting in a realized gain on its Litify investment of approximately $500 thousand, offset by an equity method loss of approximately $500 thousand recognized on its investment in a third party sponsored NFL consumer post settlement loan fund. 59 Table of Contents Noninterest Expense.
In 2024, the Company received cash consideration resulting in a realized gain on its Litify investment of approximately $500 thousand, offset by an equity method loss of approximately $500 thousand recognized on its investment in a third party sponsored NFL consumer post settlement loan fund. Noninterest Expense.
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.
The board of directors of our bank has oversight of our asset and liability 68 Table of Contents 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.
The Company utilizes proprietary and industry leading customized technology to ensure card brand and regulatory compliance, supports multiple processing platforms, manages daily risk across 88,000 small business merchants in all 50 states, and performed commercial treasury clearing services for $36.3 billion in volume across 603.7 million transactions in 2024.
The Company utilizes proprietary and industry leading customized technology to ensure card brand and regulatory compliance, supports multiple processing platforms, manages 67 Table of Contents daily risk across 88,000 small business merchants in all 50 states, and performed commercial treasury clearing services for $36.3 billion in volume across 603.7 million transactions in 2024.
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 44 Table of Contents of management judgment.
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 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 December 31, 2024 Total Risk-based Capital Ratio ​ Bank 10.00 % 10.50 % 15.92 % ​ ​ ​ ​ ​ ​ ​ ​ Tier 1 Risk-based Capital Ratio ​ Bank 8.00 % 8.50 % 14.67 % ​ ​ ​ ​ ​ ​ ​ ​ Common Equity Tier 1 Capital Ratio ​ Bank 6.50 % 7.00 % 14.67 % ​ ​ ​ ​ ​ ​ ​ ​ Tier 1 Leverage Ratio ​ Bank 5.00 % 4.00 % 11.70 % ​ ​ 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 65 Table of Contents 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.
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 December 31, 2025 Total Risk-based Capital Ratio ​ ​ ​ ​ Bank 10.00 % 10.50 % 15.43 % ​ ​ ​ ​ ​ ​ ​ ​ Tier 1 Risk-based Capital Ratio ​ ​ ​ ​ Bank 8.00 % 8.50 % 14.18 % ​ ​ ​ ​ ​ ​ ​ ​ Common Equity Tier 1 Capital Ratio ​ ​ ​ ​ Bank 6.50 % 7.00 % 14.18 % ​ ​ ​ ​ ​ ​ ​ ​ Tier 1 Leverage Ratio ​ ​ ​ ​ Bank 5.00 % 4.00 % 11.87 % ​ ​ 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.
Our overall liquidity position (cash, borrowing capacity, and available reciprocal client sweep balances) totaled $1.05 billion at December 31, 2024, or 64.0% 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.
Our overall liquidity position (cash, borrowing capacity, and available reciprocal client sweep balances) totaled $1.22 billion at December 31, 2025, or 59.0% 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.
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. No impairment charges were recorded for the years ended December 31, 2024, 2023 and 2022. Portfolio Maturities and Yields.
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. No impairment charges were recorded for the years ended December 31, 2025, 2024 and 2023. ​ 59 Table of Contents Portfolio Maturities and Yields.
Therefore, these law firm escrow accounts carry FDIC insurance at the claimant settlement level, not at the deposit account level. The FDIC insured and uninsured deposited balances reflect management’s determination of settlement claims deposited as of period end. In addition, as of December 31, 2024, the aggregate amount of our uninsured certificates of deposit was $6.8 million.
Therefore, these law firm escrow accounts carry FDIC insurance at the claimant settlement level, not at the deposit account level. The FDIC insured and uninsured deposited balances reflect management’s determination of settlement claims deposited as of period end. In addition, as of December 31, 2025, the aggregate amount of our uninsured certificates of deposit was $3.0 million.
The following table sets forth the composition of our loan portfolio by type of loan at the dates indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ 2024 ​ 2023 ​ ​ Amount Percent Amount Percent ​ ​ (Dollars in thousands) Real estate: ​ ​ Multifamily ​ $ 355,165 25.4 % $ 348,241 28.8 % Commercial real estate ​ 87,038 6.2 ​ 89,498 7.4 ​ 1 – 4 family ​ ​ 14,665 1.1 ​ ​ 17,937 1.5 ​ Total real estate ​ 456,868 32.7 ​ 455,676 37.7 ​ Commercial ​ 920,567 65.9 ​ 737,914 61.1 ​ Consumer ​ 19,339 1.4 ​ 14,491 1.2 ​ Total loans held for investment ​ $ 1,396,774 100.0 % $ 1,208,081 100.0 % Deferred loan fees and unearned premiums, net ​ 247 ​ (668) ​ Allowance for credit losses ​ (20,979) ​ (16,631) ​ Loans held for investment, net ​ $ 1,376,042 ​ $ 1,190,782 ​ ​ The following table sets forth the composition of our held for investment Litigation-Related Loan portfolio by type of loan at the dates indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ 2024 ​ ​ 2023 ​ ​ Amount Percent Amount Percent ​ ​ (Dollars in thousands) Litigation-Related Loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial Litigation-Related: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Working capital lines of credit ​ $ 531,574 ​ 63.4 % ​ $ 373,338 ​ 60.7 % Case cost lines of credit ​ ​ 185,204 ​ 22.1 ​ ​ ​ 152,165 ​ 24.8 ​ Term loans ​ ​ 119,061 ​ 14.2 ​ ​ ​ 86,954 ​ 14.1 ​ Total Commercial Litigation-Related ​ ​ 835,839 ​ 99.7 ​ ​ ​ 612,457 ​ 99.6 ​ Consumer Litigation-Related: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Post-settlement consumer loans ​ ​ 2,716 ​ 0.3 ​ ​ ​ 2,406 ​ 0.4 ​ Structured settlement loans ​ ​ — ​ — ​ ​ ​ 16 ​ — ​ Total Consumer Litigation-Related ​ ​ 2,716 ​ 0.3 ​ ​ ​ 2,422 ​ 0.4 ​ Total Litigation-Related Loans ​ $ 838,555 ​ 100.0 % ​ $ 614,879 ​ 100.0 % ​ At December 31, 2024, our Litigation-Related Loans, which include commercial and consumer lending to attorneys, law firms and plaintiffs/claimants, totaled $838.6 million, or 60.0% of our total loan portfolio, compared to $614.9 million at December 31, 2023.
The following table sets forth the composition of our loan portfolio by type of loan at the dates indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2025 ​ 2024 ​ 2023 ​ ​ ​ ​ Amount ​ ​ ​ Percent ​ ​ ​ Amount ​ ​ ​ Percent ​ ​ ​ Amount ​ ​ ​ Percent ​ ​ (Dollars in thousands) Real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Multifamily ​ $ 372,800 21.2 % $ 355,165 25.4 % $ 348,241 28.8 % Commercial real estate ​ 107,293 6.1 ​ 87,038 6.2 ​ 89,498 7.4 ​ 1 – 4 family ​ ​ 9,835 0.6 ​ ​ 14,665 1.1 ​ ​ 17,937 1.5 ​ Total real estate ​ 489,928 27.9 ​ 456,868 32.7 ​ 455,676 37.7 ​ Commercial ​ 1,245,555 70.8 ​ 920,567 65.9 ​ 737,914 61.1 ​ Consumer ​ 22,762 1.3 ​ 19,339 1.4 ​ 14,491 1.2 ​ Total loans held for investment ​ $ 1,758,245 100.0 % $ 1,396,774 100.0 % $ 1,208,081 100.0 % Deferred loan fees and unearned premiums, net ​ 182 ​ ​ 247 ​ ​ (668) ​ ​ Allowance for credit losses ​ (24,022) ​ ​ (20,979) ​ ​ (16,631) ​ ​ Loans held for investment, net ​ $ 1,734,405 ​ ​ $ 1,376,042 ​ ​ $ 1,190,782 ​ ​ ​ The following table sets forth the composition of our held for investment Litigation-Related Loan portfolio by type of loan at the dates indicated. 54 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ 2025 ​ ​ 2024 ​ ​ 2023 ​ ​ ​ ​ ​ Amount ​ ​ ​ Percent ​ ​ ​ ​ ​ ​ Amount ​ ​ ​ Percent ​ ​ ​ ​ ​ ​ Amount ​ ​ ​ Percent ​ ​ ​ ​ ​ (Dollars in thousands) ​ Litigation-Related Loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial Litigation-Related: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Working capital lines of credit ​ $ 782,182 ​ 66.2 % ​ $ 531,574 ​ 63.4 % ​ $ 373,338 ​ 60.7 % Case cost lines of credit ​ ​ 209,469 ​ 17.7 ​ ​ ​ 185,204 ​ 22.1 ​ ​ ​ 152,165 ​ 24.8 ​ Term loans ​ ​ 186,674 ​ 15.8 ​ ​ ​ 119,061 ​ 14.2 ​ ​ ​ 86,954 ​ 14.1 ​ Total Commercial Litigation-Related ​ ​ 1,178,325 ​ 99.7 ​ ​ ​ 835,839 ​ 99.7 ​ ​ ​ 612,457 ​ 99.6 ​ Consumer Litigation-Related: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Post-settlement consumer loans ​ ​ 3,130 ​ 0.3 ​ ​ ​ 2,716 ​ 0.3 ​ ​ ​ 2,406 ​ 0.4 ​ Structured settlement loans ​ ​ — ​ — ​ ​ ​ — ​ — ​ ​ ​ 16 ​ — ​ Total Consumer Litigation-Related ​ ​ 3,130 ​ 0.3 ​ ​ ​ 2,716 ​ 0.3 ​ ​ ​ 2,422 ​ 0.4 ​ Total Litigation-Related Loans ​ $ 1,181,455 ​ 100.0 % ​ $ 838,555 ​ 100.0 % ​ $ 614,879 ​ 100.0 % ​ At December 31, 2025, our Litigation-Related Loans, which include commercial and consumer lending to attorneys, law firms and plaintiffs/claimants, totaled $1.18 billion, or 67.2% of our total loan portfolio, compared to $838.6 million at December 31, 2024.
The allowance for credit losses as a percentage of loans was 1.50% and 1.38% as of December 31, 2024 and 2023, respectively.
The allowance for credit losses as a percentage of loans was 1.37% and 1.50% as of December 31, 2025 and 2024, respectively.
As other companies may use different calculations for this measure, this presentation may not be comparable to other similarly titled measures by other companies. ​ 47 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, ​ ​ 2024 ​ 2023 ​ 2022 ​ 2021 ​ 2020 ​ ​ (Dollars in thousands) ​ Efficiency Ratio: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income $ 99,929 ​ $ 83,773 ​ $ 59,346 ​ $ 43,703 ​ $ 37,440 ​ Noninterest income ​ 24,895 ​ ​ 29,751 ​ ​ 24,925 ​ ​ 21,024 ​ ​ 14,647 ​ Less: net gain on equity investments ​ — ​ ​ (4,013) ​ ​ — ​ ​ — ​ ​ — ​ Recurring revenue $ 124,824 ​ $ 109,511 ​ $ 84,271 ​ $ 64,727 ​ $ 52,087 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total noninterest expense $ 60,843 ​ $ 53,117 ​ $ 41,980 ​ $ 35,064 ​ $ 28,670 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Efficiency ratio ​ 48.7 % ​ 48.5 % ​ 49.8 % ​ 54.2 % ​ 55.0 % ​ Discussion and Analysis of Financial Condition for the Years Ended December 31, 2024 and 2023 Assets .
As other companies may use different calculations for this measure, this presentation may not be comparable to other similarly titled measures by other companies. ​ 53 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, ​ ​ 2025 ​ 2024 ​ 2023 ​ 2022 ​ 2021 ​ ​ (Dollars in thousands) ​ Efficiency Ratio: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income $ 121,481 ​ $ 99,929 ​ $ 83,773 ​ $ 59,346 ​ $ 43,703 ​ Noninterest income ​ 25,080 ​ ​ 24,895 ​ ​ 29,751 ​ ​ 24,925 ​ ​ 21,024 ​ Less: net gain on equity investments ​ — ​ ​ — ​ ​ (4,013) ​ ​ — ​ ​ — ​ Recurring revenue $ 146,561 ​ $ 124,824 ​ $ 109,511 ​ $ 84,271 ​ $ 64,727 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total noninterest expense $ 71,234 ​ $ 60,843 ​ $ 53,117 ​ $ 41,980 ​ $ 35,064 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Efficiency ratio ​ 48.6 % ​ 48.7 % ​ 48.5 % ​ 49.8 % ​ 54.2 % ​ Discussion and Analysis of Financial Condition for the Years Ended December 31, 2025 and 2024 Assets .
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.
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.
Income Tax Expense. We recorded income tax expense of $14.9 million for the year ended December 31, 2023, reflecting an effective tax rate of 26.6%, compared to $10.3 million, or an effective tax rate of 26.5%, for the year ended December 31, 2022. Management of Market Risk General.
We recorded income tax expense of $15.6 million for the year ended December 31, 2024, reflecting an effective tax rate of 26.4%, compared to $14.9 million, or an effective tax rate of 26.6%, for the year ended December 31, 2023. Management of Market Risk General.
Selected Financial Data The following information is derived in part from the consolidated financial statements of Esquire Financial Holdings, Inc. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At or For the Years Ended December 31, ​ ​ 2024 2023 2022 2021 2020 ​ ​ ​ (Dollars in thousands, except share and per share data) ​ Balance Sheet Data: ​ ​ ​ ​ ​ Total assets ​ $ 1,892,503 ​ $ 1,616,876 ​ $ 1,395,639 ​ $ 1,178,770 ​ $ 936,714 ​ Cash and cash equivalents ​ 126,329 ​ 165,209 ​ 164,122 ​ 149,156 ​ 65,185 ​ Securities available-for-sale, at fair value ​ 241,746 ​ 122,107 ​ 109,269 ​ 148,384 ​ 117,655 ​ Securities held-to-maturity, at cost ​ 68,660 ​ 77,001 ​ 78,377 ​ — ​ — ​ Loans, held for investment ​ 1,397,021 ​ 1,207,413 ​ 947,295 ​ 784,517 ​ 672,421 ​ Total deposits ​ 1,642,236 ​ 1,407,299 ​ 1,228,236 ​ 1,028,409 ​ 804,054 ​ Total stockholders’ equity ​ 237,094 ​ 198,555 ​ 158,158 ​ 143,735 ​ 126,076 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income Statement Data: ​ ​ ​ ​ ​ ​ Interest income ​ $ 113,373 ​ $ 91,888 ​ $ 60,993 ​ $ 44,531 ​ $ 38,630 ​ Interest expense ​ 13,444 ​ 8,115 ​ 1,647 ​ 828 ​ 1,190 ​ Net interest income ​ 99,929 ​ 83,773 ​ 59,346 ​ 43,703 ​ 37,440 ​ Provision for credit losses ​ 4,700 ​ 4,525 ​ 3,490 ​ 6,955 ​ 6,250 ​ Net interest income after provision for credit losses ​ 95,229 ​ 79,248 ​ 55,856 ​ 36,748 ​ 31,190 ​ Payment processing income ​ ​ 20,875 ​ ​ 22,316 ​ ​ 21,944 ​ ​ 20,856 ​ ​ 14,099 ​ Other noninterest income ​ ​ 4,020 ​ ​ 7,435 ​ ​ 2,981 ​ ​ 168 ​ ​ 548 ​ Total noninterest income ​ 24,895 ​ 29,751 ​ 24,925 ​ 21,024 ​ 14,647 ​ Employee compensation and benefits ​ ​ 37,845 ​ ​ 32,481 ​ ​ 25,774 ​ ​ 21,741 ​ ​ 16,873 ​ Other expenses ​ ​ 22,998 ​ ​ 20,636 ​ ​ 16,206 ​ ​ 13,323 ​ ​ 11,797 ​ Total noninterest expense ​ 60,843 ​ 53,117 ​ 41,980 ​ 35,064 ​ 28,670 ​ Net income before income taxes ​ 59,281 ​ 55,882 ​ 38,801 ​ 22,708 ​ 17,167 ​ Income tax expense ​ 15,623 ​ 14,871 ​ 10,283 ​ 4,783 ​ 4,549 ​ Net income ​ $ 43,658 ​ $ 41,011 ​ $ 28,518 ​ $ 17,925 ​ $ 12,618 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Per Share Data: ​ ​ ​ ​ ​ ​ Earnings per share: ​ ​ ​ ​ ​ ​ Basic ​ $ 5.58 ​ $ 5.31 ​ $ 3.73 ​ $ 2.40 ​ $ 1.70 ​ Diluted ​ ​ 5.14 ​ ​ 4.91 ​ ​ 3.47 ​ ​ 2.26 ​ ​ 1.65 ​ Book value per share (1) ​ ​ 28.38 ​ ​ 23.96 ​ ​ 19.30 ​ ​ 17.77 ​ ​ 16.18 ​ Tangible book value per share (2) ​ ​ 28.38 ​ ​ 23.96 ​ ​ 19.30 ​ ​ 17.77 ​ ​ 16.18 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selected Performance Ratios: ​ ​ ​ ​ ​ ​ Return on average assets ​ 2.57 % 2.89 % 2.31 % 1.77 % 1.45 % Return on average equity ​ 20.14 ​ 23.20 ​ 19.44 ​ 13.42 ​ 10.69 ​ Interest rate spread ​ 5.48 ​ 5.57 ​ 4.85 ​ 4.40 ​ 4.34 ​ Net interest margin ​ 6.06 ​ 6.09 ​ 4.99 ​ 4.49 ​ 4.47 ​ Efficiency ratio (3) ​ 48.74 ​ 46.79 ​ 49.82 ​ 54.17 ​ 55.04 ​ Loan to deposit ratio ​ ​ 85.07 ​ ​ 85.80 ​ ​ 77.13 ​ ​ 76.28 ​ ​ 83.63 ​ Average interest earning assets to average interest bearing liabilities ​ 172.03 ​ 188.86 ​ 201.47 ​ 215.72 ​ 191.12 ​ Average equity to average assets ​ 12.75 ​ 12.44 ​ 11.89 ​ 13.22 ​ 13.61 ​ ​ 46 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At or For the Years Ended December 31, ​ 2024 2023 2022 2021 2020 Asset Quality Ratios (Loans Held for Investment): ​ ​ Allowance for credit losses to total loans 1.50 % 1.38 % 1.29 % 1.16 % 1.70 % Allowance for credit losses to nonperforming loans (4) 192 % 152 % NM ​ NM ​ 495 % Net charge-offs (recoveries) to average outstanding loans 0.03 % 0.04 % 0.04 % 1.29 % 0.30 % Nonperforming loans to total loans (4) 0.78 % 0.91 % 0.00 % 0.00 % 0.34 % Nonperforming loans to total assets (4) 0.58 % 0.68 % 0.00 % 0.00 % 0.25 % Nonperforming assets to total assets (5) 0.58 % 0.68 % 0.00 % 0.00 % 0.25 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital Ratios (Esquire Bank): Total capital to risk weighted assets 15.92 % 15.38 % 15.44 % 15.89 % 16.69 % Tier 1 capital to risk weighted assets 14.67 % 14.13 % 14.21 % 14.79 % 15.44 % Tier 1 common equity to risk weighted assets 14.67 % 14.13 % 14.21 % 14.79 % 15.44 % Tier 1 leverage capital ratio 11.70 % 12.07 % 10.98 % 11.46 % 12.51 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other: Number of offices 3 3 3 3 3 Number of full-time equivalent employees 138 140 115 110 99 (1) For purposes of computing book value per share, book value equals total common stockholders’ equity divided by total number of shares of common stock outstanding.
The Company’s loan portfolio may experience significant credit losses, which could have a material adverse effect on our operating results. ​ 51 Table of Contents Selected Financial Data The following information is derived in part from the consolidated financial statements of Esquire Financial Holdings, Inc. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At or For the Years Ended December 31, ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ 2022 ​ ​ ​ 2021 ​ ​ ​ (Dollars in thousands, except share and per share data) ​ Balance Sheet Data: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets ​ $ 2,365,661 ​ $ 1,892,503 ​ $ 1,616,876 ​ $ 1,395,639 ​ $ 1,178,770 ​ Cash and cash equivalents ​ 235,887 ​ 126,329 ​ 165,209 ​ 164,122 ​ 149,156 ​ Securities available-for-sale, at fair value ​ 246,505 ​ 241,746 ​ 122,107 ​ 109,269 ​ 148,384 ​ Securities held-to-maturity, at cost ​ 60,193 ​ 68,660 ​ 77,001 ​ 78,377 ​ — ​ Loans, held for investment ​ 1,758,427 ​ 1,397,021 ​ 1,207,413 ​ 947,295 ​ 784,517 ​ Total deposits ​ 2,063,007 ​ 1,642,236 ​ 1,407,299 ​ 1,228,236 ​ 1,028,409 ​ Total stockholders’ equity ​ 289,598 ​ 237,094 ​ 198,555 ​ 158,158 ​ 143,735 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income Statement Data: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest income ​ $ 139,417 ​ $ 113,373 ​ $ 91,888 ​ $ 60,993 ​ $ 44,531 ​ Interest expense ​ 17,936 ​ 13,444 ​ 8,115 ​ 1,647 ​ 828 ​ Net interest income ​ 121,481 ​ 99,929 ​ 83,773 ​ 59,346 ​ 43,703 ​ Provision for credit losses ​ 9,675 ​ 4,700 ​ 4,525 ​ 3,490 ​ 6,955 ​ Net interest income after provision for credit losses ​ 111,806 ​ 95,229 ​ 79,248 ​ 55,856 ​ 36,748 ​ Payment processing income ​ ​ 20,215 ​ ​ 20,875 ​ ​ 22,316 ​ ​ 21,944 ​ ​ 20,856 ​ Other noninterest income ​ ​ 4,865 ​ ​ 4,020 ​ ​ 7,435 ​ ​ 2,981 ​ ​ 168 ​ Total noninterest income ​ 25,080 ​ 24,895 ​ 29,751 ​ 24,925 ​ 21,024 ​ Employee compensation and benefits ​ ​ 42,314 ​ ​ 37,845 ​ ​ 32,481 ​ ​ 25,774 ​ ​ 21,741 ​ Other expenses ​ ​ 28,920 ​ ​ 22,998 ​ ​ 20,636 ​ ​ 16,206 ​ ​ 13,323 ​ Total noninterest expense ​ 71,234 ​ 60,843 ​ 53,117 ​ 41,980 ​ 35,064 ​ Net income before income taxes ​ 65,652 ​ 59,281 ​ 55,882 ​ 38,801 ​ 22,708 ​ Income tax expense ​ 14,830 ​ 15,623 ​ 14,871 ​ 10,283 ​ 4,783 ​ Net income ​ $ 50,822 ​ $ 43,658 ​ $ 41,011 ​ $ 28,518 ​ $ 17,925 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Per Share Data: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 6.30 ​ $ 5.58 ​ $ 5.31 ​ $ 3.73 ​ $ 2.40 ​ Diluted ​ ​ 5.87 ​ ​ 5.14 ​ ​ 4.91 ​ ​ 3.47 ​ ​ 2.26 ​ Book value per share (1) ​ ​ 33.86 ​ ​ 28.38 ​ ​ 23.96 ​ ​ 19.30 ​ ​ 17.77 ​ Tangible book value per share (2) ​ ​ 33.86 ​ ​ 28.38 ​ ​ 23.96 ​ ​ 19.30 ​ ​ 17.77 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selected Performance Ratios: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Return on average assets ​ 2.43 % 2.57 % 2.89 % 2.31 % 1.77 % Return on average equity ​ 19.41 ​ 20.14 ​ 23.20 ​ 19.44 ​ 13.42 ​ Interest rate spread ​ 5.46 ​ 5.48 ​ 5.57 ​ 4.85 ​ 4.40 ​ Net interest margin ​ 6.02 ​ 6.06 ​ 6.09 ​ 4.99 ​ 4.49 ​ Efficiency ratio (3) ​ 48.60 ​ 48.74 ​ 46.79 ​ 49.82 ​ 54.17 ​ Loan to deposit ratio ​ ​ 85.24 ​ ​ 85.07 ​ ​ 85.80 ​ ​ 77.13 ​ ​ 76.28 ​ Average interest earning assets to average interest bearing liabilities ​ 162.96 ​ 172.03 ​ 188.86 ​ 201.47 ​ 215.72 ​ Average equity to average assets ​ 12.53 ​ 12.75 ​ 12.44 ​ 11.89 ​ 13.22 ​ ​ 52 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At or For the Years Ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ 2022 2021 Asset Quality Ratios (Loans Held for Investment): ​ ​ ​ ​ ​ ​ ​ Allowance for credit losses to total loans 1.37 % 1.50 % 1.38 % 1.29 % 1.16 % Allowance for credit losses to nonperforming loans (4) 280 % 192 % 152 % NM ​ NM ​ Net charge-offs (recoveries) to average outstanding loans 0.44 % 0.03 % 0.04 % 0.04 % 1.29 % Nonperforming loans to total loans (4) 0.49 % 0.78 % 0.91 % 0.00 % 0.00 % Nonperforming loans to total assets (4) 0.36 % 0.58 % 0.68 % 0.00 % 0.00 % Nonperforming assets to total assets (5) 0.36 % 0.58 % 0.68 % 0.00 % 0.00 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital Ratios (Esquire Bank): ​ ​ ​ ​ ​ Total capital to risk weighted assets 15.43 % 15.92 % 15.38 % 15.44 % 15.89 % Tier 1 capital to risk weighted assets 14.18 % 14.67 % 14.13 % 14.21 % 14.79 % Tier 1 common equity to risk weighted assets 14.18 % 14.67 % 14.13 % 14.21 % 14.79 % Tier 1 leverage capital ratio 11.87 % 11.70 % 12.07 % 10.98 % 11.46 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other: ​ ​ ​ ​ ​ Number of offices 4 3 3 3 3 Number of full-time equivalent employees 148 138 140 115 110 (1) For purposes of computing book value per share, book value equals total common stockholders’ equity divided by total number of shares of common stock outstanding.
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.
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 areas (a subset of the New York and Los Angeles markets).
Certificates of deposit totaled $14.1 million at December 31, 2024, or 0.9% of total deposits at that date. 54 Table of Contents The following tables set forth the distribution of average deposits by account type at the dates indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ 2024 ​ 2023 ​ ​ ​ Average ​ ​ ​ Average ​ Average ​ Average ​ Balance Percent Cost ​ Balance ​ Percent ​ Cost ​ ​ ​ (Dollars in thousands) ​ Demand (noninterest bearing) ​ $ 510,868 34.78 % 0.00 % ​ $ 497,795 40.61 % 0.00 % Savings, NOW and Money Market ​ 945,899 64.39 ​ 1.36 ​ ​ 715,004 58.32 ​ 1.07 ​ Time ​ 12,281 0.84 ​ 4.49 ​ ​ 13,159 1.07 ​ 3.62 ​ Total deposits ​ $ 1,469,048 100.00 % 0.91 % ​ $ 1,225,958 100.00 % 0.66 % ​ Our deposit strategy primarily focuses on developing full service branchless commercial banking relationships nationally 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.
The following tables set forth the distribution of average deposits by account type at the dates indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ 2025 ​ 2024 ​ 2023 ​ ​ ​ Average ​ ​ ​ Average ​ Average ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ Average ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ ​ Balance ​ ​ ​ Percent ​ ​ ​ Cost ​ Balance ​ Percent ​ Cost ​ Balance ​ Percent ​ Cost ​ ​ ​ (Dollars in thousands) ​ Demand (noninterest bearing) ​ $ 570,842 31.55 % 0.00 % ​ $ 510,868 34.78 % 0.00 % $ 497,795 40.61 % 0.00 % Savings, NOW and Money Market ​ 1,231,143 68.05 ​ 1.43 ​ ​ 945,899 64.39 ​ 1.36 ​ 715,004 58.32 ​ 1.07 ​ Time ​ 7,239 0.40 ​ 3.87 ​ ​ 12,281 0.84 ​ 4.49 ​ 13,159 1.07 ​ 3.62 ​ Total deposits ​ $ 1,809,224 100.00 % 0.99 % ​ $ 1,469,048 100.00 % 0.91 % $ 1,225,958 100.00 % 0.66 % ​ Our deposit strategy primarily focuses on developing full service commercial banking relationships nationally 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.
The 52 Table of Contents allowance for credit losses allocated to each category is not necessarily indicative of future losses in any particular category and does not restrict the use of the allowance to absorb losses in other categories. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ 2024 ​ 2023 ​ ​ ​ ​ Percent of Percent of ​ ​ Percent of Percent of ​ ​ ​ ​ ​ Allowance ​ Loans in ​ ​ ​ ​ Allowance ​ Loans in ​ ​ ​ ​ ​ ​ for Credit ​ Each ​ ​ ​ ​ for Credit ​ Each ​ ​ ​ Allowance ​ Losses to ​ Category ​ Allowance ​ Losses to ​ Category ​ ​ ​ for Credit ​ Total ​ to Total ​ for Credit ​ Total ​ to Total ​ ​ ​ Losses ​ Allowance ​ Loans ​ Losses ​ Allowance ​ Loans ​ ​ ​ (Dollars in thousands) Multifamily ​ $ 5,116 24.4 % 25.4 % $ 3,236 19.5 % 28.8 % Commercial real estate ​ 691 3.3 6.2 ​ 823 4.9 7.4 ​ 1 – 4 family ​ ​ 52 0.2 ​ 1.1 ​ ​ 58 0.3 ​ 1.5 ​ Commercial ​ ​ 14,283 68.1 ​ 65.9 ​ ​ 12,056 72.5 ​ 61.1 ​ Consumer ​ 837 4.0 1.4 ​ 458 2.8 1.2 ​ Total allocated allowance ​ $ 20,979 100.0 % 100.0 % $ 16,631 100.0 % 100.0 % ​ ​ Loans rated special mention totaled $4.0 million as of December 31, 2024, comparable to the same period in 2023.
The allowance for credit losses allocated to each category is not necessarily indicative of future losses in any particular category and does not restrict the use of the allowance to absorb losses in other categories. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ 2025 ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percent of ​ ​ ​ Percent of ​ ​ ​ ​ ​ ​ ​ ​ Percent of ​ ​ ​ Percent of ​ ​ ​ ​ ​ ​ ​ ​ Percent of ​ ​ ​ Percent of ​ ​ ​ ​ ​ ​ ​ ​ Allowance ​ Loans in ​ ​ ​ ​ Allowance ​ Loans in ​ ​ ​ ​ Allowance ​ Loans in ​ ​ ​ ​ ​ ​ for Credit ​ Each ​ ​ ​ ​ for Credit ​ Each ​ ​ ​ ​ for Credit ​ Each ​ ​ ​ Allowance ​ Losses to ​ Category ​ Allowance ​ Losses to ​ Category ​ Allowance ​ Losses to ​ Category ​ ​ ​ for Credit ​ Total ​ to Total ​ for Credit ​ Total ​ to Total ​ for Credit ​ Total ​ to Total ​ ​ ​ Losses ​ Allowance ​ Loans ​ Losses ​ Allowance ​ Loans ​ Losses ​ Allowance ​ Loans ​ ​ ​ (Dollars in thousands) ​ Multifamily ​ $ 6,026 25.1 % 21.2 % $ 5,116 24.4 % 25.4 % $ 3,236 19.5 % 28.8 % Commercial real estate ​ 795 3.3 6.1 ​ 691 3.3 6.2 ​ 823 4.9 ​ 7.4 ​ 1 – 4 family ​ ​ 35 0.1 ​ 0.6 ​ ​ 52 0.2 ​ 1.1 ​ ​ 58 0.3 ​ 1.5 ​ Commercial ​ ​ 16,285 67.8 ​ 70.8 ​ ​ 14,283 68.1 ​ 65.9 ​ ​ 12,056 72.5 ​ 61.1 ​ Consumer ​ 881 3.7 1.3 ​ 837 4.0 1.4 ​ 458 2.8 ​ 1.2 ​ Total allocated allowance ​ $ 24,022 100.0 % 100.0 % $ 20,979 100.0 % 100.0 % $ 16,631 100.0 % 100.0 % ​ At December 31, 2025, special mention and substandard loans totaled $12.3 million and $8.6 million, respectively, compared to $4.0 million and $10.9 million, respectively, as of December 31, 2024.
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.
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.
See Note 1 “Business and Summary of Significant Accounting Policies” for discussion of our allowance for credit losses on loans held for investment policy. On January 1, 2023, we adopted the CECL Standard.
See Note 1 “Business and Summary of Significant Accounting Policies” for discussion of our allowance for credit losses on loans held for investment policy.
At December 31, 2024, loans were $1.40 billion, or 73.8% of total assets, compared to $1.21 billion, or 74.7% of total assets, at December 31, 2023.
At December 31, 2025, loans were $1.76 billion, or 74.3% of total assets, compared to $1.40 billion, or 73.8% of total assets, at December 31, 2024.
We continue to focus on the acquisition and expansion of core deposit relationships, which we define as all deposits except for certificates of deposit. Core deposits totaled $1.63 billion at December 31, 2024, or 99.1% of total deposits at that date.
We continue to focus on the acquisition and expansion of core deposit relationships, which we define as all deposits except for certificates of deposit. Core deposits totaled $2.06 billion at December 31, 2025, or 99.7% of total deposits at that date. Certificates of deposit totaled $6.2 million at December 31, 2025, or 0.3% of total deposits at that date.
Management recently had these properties appraised and noted that no specific reserve was necessary. 50 Table of Contents The following table sets forth information regarding our nonperforming assets at the dates indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2024 ​ 2023 ​ ​ ​ (Dollars in thousands) Nonaccrual loans: ​ ​ Multifamily ​ $ 10,940 ​ $ 10,940 ​ Commercial real estate ​ — ​ — ​ 1 – 4 family ​ ​ — ​ ​ — ​ Commercial ​ — ​ — ​ Consumer ​ — ​ — ​ Total nonaccrual loans ​ ​ 10,940 ​ ​ 10,940 ​ Other real estate owned ​ — ​ — ​ Loans past due 90 days and still accruing ​ — ​ 69 ​ Total nonperforming assets ​ $ 10,940 ​ $ 11,009 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loans held for investment (1) ​ $ 1,397,021 ​ $ 1,207,413 ​ Total assets ​ $ 1,892,503 ​ $ 1,616,876 ​ Allowance for credit losses ​ $ 20,979 ​ $ 16,631 ​ Total nonaccrual loans to total loans ​ 0.78 % 0.91 % Total nonperforming assets to total assets ​ 0.58 % 0.68 % Allowance for credit losses to nonaccrual loans ​ 192 % 152 % Allowance for credit losses to nonperforming loans ​ 192 % 152 % Allowance for credit losses to total loans at end of the period (1) ​ 1.50 % 1.38 % (1) Loans are presented before the allowance for credit losses and include net deferred loan fees and unearned premiums.
The following table sets forth information regarding our nonperforming assets at the dates indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ 2025 ​ 2024 ​ 2023 ​ ​ ​ (Dollars in thousands) Nonaccrual loans: ​ ​ ​ ​ ​ ​ Multifamily ​ $ 7,836 ​ $ 10,940 ​ $ 10,940 ​ Commercial real estate ​ — ​ — ​ — ​ 1 – 4 family ​ ​ — ​ ​ — ​ ​ — ​ Commercial ​ 736 ​ — ​ — ​ Consumer ​ — ​ — ​ — ​ Total nonaccrual loans ​ ​ 8,572 ​ ​ 10,940 ​ ​ 10,940 ​ Other real estate owned ​ — ​ — ​ — ​ Loans past due 90 days and still accruing ​ — ​ — ​ 69 ​ Total nonperforming assets ​ $ 8,572 ​ $ 10,940 ​ $ 11,009 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loans held for investment (1) ​ $ 1,758,427 ​ $ 1,397,021 ​ $ 1,207,413 ​ Total assets ​ $ 2,365,661 ​ $ 1,892,503 ​ $ 1,616,876 ​ Allowance for credit losses ​ $ 24,022 ​ $ 20,979 ​ $ 16,631 ​ Total nonaccrual loans to total loans ​ 0.49 % 0.78 % 0.91 % Total nonperforming assets to total assets ​ 0.36 % 0.58 % 0.68 % Allowance for credit losses to nonaccrual loans ​ 280 % 192 % 152 % Allowance for credit losses to nonperforming loans ​ 280 % 192 % 152 % Allowance for credit losses to total loans at end of the period (1) ​ 1.37 % 1.50 % 1.38 % (1) Loans are presented before the allowance for credit losses and include net deferred loan fees and unearned premiums.
We also had Commercial Litigation-Related committed and uncommitted undrawn lines of credit totaling $85.0 million and $580.3 million, respectively, at December 31, 2024. Litigation-Related post-settlement consumer loans increased $310 thousand to $2.7 million as of December 31, 2024, from $2.4 million as of December 31, 2023. 49 Table of Contents Loan Maturity.
We also had Commercial Litigation-Related committed and uncommitted undrawn lines of credit totaling $106.9 million and $797.5 million, respectively, at December 31, 2025, compared to $85.0 million and $580.3 million, respectively, at December 31, 2024. Litigation-Related post-settlement consumer loans increased $414 thousand to $3.1 million as of December 31, 2025, from $2.7 million as of December 31, 2024. Loan Maturity.
At December 31, 2024, through pledging of our securities and certain loans, we had the ability to borrow a total of $431.7 million from the FHLB of New York and $54.9 million from the FRB of New York discount window. At December 31, 2024, we also had $17.5 million in aggregated unsecured lines of credit with unaffiliated correspondent banks.
At December 31, 2025, through pledging of our securities and certain loans, we had the ability to borrow a total of $455.5 million from the FHLB and $48.1 million from the FRB discount window. At December 31, 2025, we also had $29.0 million in aggregated unsecured lines of credit with unaffiliated correspondent banks.
No amounts were outstanding on any of the aforementioned lines as of December 31, 2024. At December 31, 2024, our off-balance sheet sweeps funds totaled $554.4 million, of which $424.2 million, or 76.5%, was able to be swept on balance sheet as reciprocal client relationship deposits.
No amounts were outstanding on any of the aforementioned lines as of December 31, 2025. At December 31, 2025, our off-balance sheet sweeps funds totaled $736.6 million, of which $449.0 million, or 61.0%, was able to be swept on balance sheet as reciprocal client relationship deposits.
Securities held-to-maturity totaled $68.7 million at December 31, 2024, as compared to $77.0 million at December 31, 2023, due to paydowns and portfolio amortization. 53 Table of Contents Management evaluates securities available-for-sale in unrealized loss positions to determine whether the impairment is due to credit-related factors.
Securities held-to-maturity decreased $8.5 million due to portfolio amortization and totaled $60.2 million at December 31, 2025, as compared to $68.7 million at December 31, 2024. Management evaluates securities available-for-sale in unrealized loss positions to determine whether the impairment is due to credit-related factors.
LIABILITIES AND EQUITY ​ $ 1,700,590 ​ ​ $ 1,420,978 ​ ​ ​ $ 1,234,377 ​ ​ Net interest income ​ ​ $ 99,929 ​ ​ ​ $ 83,773 ​ ​ ​ ​ $ 59,346 ​ ​ Net interest spread ​ ​ ​ ​ ​ ​ ​ 5.48 % ​ ​ ​ ​ ​ ​ 5.57 % ​ ​ ​ ​ ​ ​ ​ 4.85 % Net interest margin ​ ​ 6.06 % ​ 6.09 % ​ ​ ​ 4.99 % Deposits (including nonint. demand deposits) ​ $ 1,469,048 ​ $ 13,440 ​ 0.91 % $ 1,225,958 ​ $ 8,111 ​ 0.66 % ​ $ 1,075,550 ​ $ 1,643 ​ 0.15 % ​ ​ 56 Table of Contents 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.
LIABILITIES AND EQUITY ​ $ 2,088,776 ​ ​ ​ ​ $ 1,700,590 ​ ​ ​ ​ ​ $ 1,420,978 ​ ​ ​ ​ Net interest income ​ ​ ​ $ 121,481 ​ ​ ​ ​ $ 99,929 ​ ​ ​ ​ ​ $ 83,773 ​ ​ Net interest spread ​ ​ ​ ​ ​ ​ ​ 5.46 % ​ ​ ​ ​ ​ ​ 5.48 % ​ ​ ​ ​ ​ ​ ​ 5.57 % Net interest margin ​ ​ ​ ​ 6.02 % ​ ​ ​ 6.06 % ​ ​ ​ ​ ​ 6.09 % Deposits (including nonint. demand deposits) ​ $ 1,809,224 ​ $ 17,932 ​ 0.99 % $ 1,469,048 ​ $ 13,440 ​ 0.91 % ​ $ 1,225,958 ​ $ 8,111 ​ 0.66 % ​ ​ 62 Table of Contents 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.
As of December 31, 2024, the aggregate amount of uninsured deposits (deposits in amounts greater than or equal to $250,000) was $463.9 million, or 28.2%, of our total Bank deposits of $1.64 billion, excluding $12.4 million of the Company’s deposits held by the Bank.
As of December 60 Table of Contents 31, 2025, the aggregate amount of uninsured deposits (deposits in amounts greater than or equal to $250,000) was $685.1 million, or 33.2%, of our total Bank deposits of $2.06 billion, excluding $12.1 million of the Company’s deposits held by the Bank.
Interest income on loans includes the effects of net premium amortization and net deferred loan origination fees accounted for as yield adjustments.
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 adjustments have been made as we have no tax exempt investments. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ 2024 ​ 2023 ​ 2022 ​ ​ Average ​ ​ Average Average ​ ​ Average Average ​ ​ Average ​ ​ Balance ​ Interest ​ Yield/Cost ​ Balance ​ Interest ​ Yield/Cost ​ Balance ​ Interest ​ Yield/Cost ​ ​ ​ (Dollars in thousands) ​ INTEREST EARNING ASSETS ​ ​ ​ ​ ​ ​ ​ Loans held for investment ​ $ 1,258,914 ​ $ 98,458 7.82 % $ 1,051,903 ​ $ 81,188 7.72 % ​ $ 844,393 ​ $ 54,007 6.40 % Securities, includes restricted stock ​ 265,714 ​ 8,636 3.25 % 210,776 ​ 5,020 2.38 % ​ 204,501 ​ 4,161 2.03 % Securities purchased under agreements to resell ​ — ​ — — ​ 27,142 ​ 1,526 5.62 % ​ 49,273 ​ 1,251 2.54 % Interest earning cash and other ​ 123,805 ​ 6,279 5.07 % 85,454 ​ 4,154 4.86 % ​ 91,206 ​ 1,574 1.73 % Total interest earning assets ​ 1,648,433 ​ 113,373 6.88 % 1,375,275 ​ 91,888 6.68 % ​ 1,189,373 ​ 60,993 5.13 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NONINTEREST EARNING ASSETS ​ 52,157 ​ ​ 45,703 ​ ​ ​ 45,004 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ TOTAL AVERAGE ASSETS ​ $ 1,700,590 ​ ​ ​ ​ ​ $ 1,420,978 ​ ​ ​ ​ ​ ​ $ 1,234,377 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ INTEREST BEARING LIABILITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Savings, NOW, money market deposits ​ $ 945,899 ​ $ 12,889 1.36 % $ 715,004 ​ $ 7,635 1.07 % ​ $ 572,498 ​ $ 1,488 0.26 % Time deposits ​ 12,281 ​ 551 4.49 % 13,159 ​ 476 3.62 % ​ 17,775 ​ 155 0.87 % Total deposits ​ 958,180 ​ 13,440 1.40 % 728,163 ​ 8,111 1.11 % ​ 590,273 ​ 1,643 0.28 % Borrowings ​ 44 ​ 4 9.09 % 46 ​ 4 8.70 % ​ 75 ​ 4 5.33 % Total interest bearing liabilities ​ 958,224 ​ 13,444 1.40 % ​ 728,209 ​ 8,115 1.11 % ​ 590,348 ​ 1,647 0.28 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NONINTEREST BEARING LIABILITIES ​ ​ ​ ​ ​ ​ ​ ​ Demand deposits ​ 510,868 ​ ​ 497,795 ​ ​ ​ 485,277 ​ ​ Other liabilities ​ 14,755 ​ ​ 18,210 ​ ​ ​ 12,043 ​ ​ Total noninterest bearing liabilities ​ 525,623 ​ ​ 516,005 ​ ​ ​ 497,320 ​ ​ Stockholders' equity ​ 216,743 ​ ​ 176,764 ​ ​ ​ 146,709 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ TOTAL AVG.
No tax-equivalent adjustments have been made as we have no tax exempt investments. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ 2025 ​ 2024 ​ 2023 ​ ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ Average ​ ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ ​ Balance ​ Interest ​ Yield/Cost ​ Balance ​ Interest ​ Yield/Cost ​ Balance ​ Interest ​ Yield/Cost ​ ​ ​ (Dollars in thousands) ​ INTEREST EARNING ASSETS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans held for investment ​ $ 1,511,997 ​ $ 119,576 7.91 % $ 1,258,914 ​ $ 98,458 7.82 % ​ $ 1,051,903 ​ $ 81,188 7.72 % Securities, includes restricted stock ​ 333,259 ​ 12,598 3.78 % 265,714 ​ 8,636 3.25 % ​ 210,776 ​ 5,020 2.38 % Securities purchased under agreements to resell ​ — ​ — — ​ — ​ — — % ​ 27,142 ​ 1,526 5.62 % Interest earning cash and other ​ 172,890 ​ 7,243 4.19 % 123,805 ​ 6,279 5.07 % ​ 85,454 ​ 4,154 4.86 % Total interest earning assets ​ 2,018,146 ​ 139,417 6.91 % 1,648,433 ​ 113,373 6.88 % ​ 1,375,275 ​ 91,888 6.68 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NONINTEREST EARNING ASSETS ​ 70,630 ​ ​ ​ ​ 52,157 ​ ​ ​ ​ ​ 45,703 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ TOTAL AVERAGE ASSETS ​ $ 2,088,776 ​ ​ ​ ​ ​ $ 1,700,590 ​ ​ ​ ​ ​ ​ $ 1,420,978 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ INTEREST BEARING LIABILITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Savings, NOW, money market deposits ​ $ 1,231,143 ​ $ 17,652 1.43 % $ 945,899 ​ $ 12,889 1.36 % ​ $ 715,004 ​ $ 7,635 1.07 % Time deposits ​ 7,239 ​ 280 3.87 % 12,281 ​ 551 4.49 % ​ 13,159 ​ 476 3.62 % Total deposits ​ 1,238,382 ​ 17,932 1.45 % 958,180 ​ 13,440 1.40 % ​ 728,163 ​ 8,111 1.11 % Borrowings ​ 42 ​ 4 9.52 % 44 ​ 4 9.09 % ​ 46 ​ 4 8.70 % Total interest bearing liabilities ​ 1,238,424 ​ 17,936 1.45 % ​ 958,224 ​ 13,444 1.40 % ​ 728,209 ​ 8,115 1.11 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NONINTEREST BEARING LIABILITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Demand deposits ​ 570,842 ​ ​ ​ ​ 510,868 ​ ​ ​ ​ ​ 497,795 ​ ​ ​ ​ Other liabilities ​ 17,688 ​ ​ ​ ​ 14,755 ​ ​ ​ ​ ​ 18,210 ​ ​ ​ ​ Total noninterest bearing liabilities ​ 588,530 ​ ​ ​ ​ 525,623 ​ ​ ​ ​ ​ 516,005 ​ ​ ​ ​ Stockholders' equity ​ 261,822 ​ ​ ​ ​ 216,743 ​ ​ ​ ​ ​ 176,764 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ TOTAL AVG.
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. At December 31, 2024, Esquire Bank was classified as well-capitalized.
At December 31, 2025 and 2024, 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.
At December 31, 2024, our off-balance sheet sweeps funds totaled $554.4 million, of which $424.2 million, or 76.5%, was able to be swept on balance sheet as reciprocal client relationship money market deposits.
At December 31, 2025, our off-balance sheet sweeps funds totaled $736.6 million, of which $449.0 million, or 61.0%, was able to be swept on balance sheet as reciprocal client relationship money market deposits.
Excess liquid assets are invested generally in interest earning deposits and short-and intermediate-term 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 December 31, 2024 and 2023, cash and cash equivalents totaled $126.3 million and $165.2 million, respectively.
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 December 31, 2025 and 2024, cash and cash equivalents totaled $235.9 million and $126.3 million, respectively.
The following table sets forth the maturity of the uninsured certificates of deposit as of December 31, 2024. ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ (In thousands) Maturing period: ​ ​ Three months or less ​ $ 6,132 Over three months through six months ​ 614 Over six months through twelve months ​ 78 Over twelve months ​ — Total ​ $ 6,824 ​ Borrowings At December 31, 2024, we had the ability to borrow a total of $431.7 million from the FHLB of New York.
The following table sets forth the maturity of the uninsured certificates of deposit as of December 31, 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ (In thousands) Maturing period: ​ ​ ​ Three months or less ​ $ 1,038 Over three months through six months ​ 1,098 Over six months through twelve months ​ 278 Over twelve months ​ 626 Total ​ $ 3,040 ​ Borrowings At December 31, 2025, we had the ability to borrow a total of $455.5 million from the FHLB.
Loans rated substandard totaled $10.9 million as of December 31, 2024, comparable to the same period in 2023, driven by one nonaccrual multifamily loan. Our special mention and substandard loans as a percentage of loans was 0.3% and 0.8% as of December 31, 2024, respectively, and 0.3% and 0.9% as of December 31, 2023, respectively.
Loans rated special mention and substandard totaled $4.0 million and $10.9 million, respectively, as of December 31, 2023. Substandard loans were driven by the one nonaccrual multifamily loan as of December 31, 2023.
Net income increased $2.6 million, or 6.5%, to $43.7 million for the year ended December 31, 2024 from $41.0 million for the year ended December 31, 2023. The increase resulted from a $16.2 million increase in net interest income, partially offset by an increase in noninterest expense of $7.7 million and a decrease in noninterest income of $4.9 million.
The increase resulted from a $16.2 million increase in net interest income, partially offset by an increase in noninterest expense of $7.7 million and a decrease in noninterest income of $4.9 million. Net Interest Income.
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, other correspondent bank lines or obtain additional funds through reciprocal deposits.
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, other correspondent bank lines or obtain additional funds through reciprocal deposits. 70 Table of Contents Esquire Bank is subject to various regulatory capital requirements administered by Office of the Comptroller of the Currency (the “OCC”), and the Federal Deposit Insurance Corporation.
Net Interest Income. Net interest income increased $24.4 million, or 41.2%, to $83.8 million for the year ended December 31, 2023 from $59.3 million for the year ended December 31, 2022, due to a $30.9 million increase in interest income, partially offset by a $6.5 million increase in interest expense.
Net interest income increased $21.6 million, or 21.6%, to $121.5 million for the year ended December 31, 2025 from $99.9 million for the year ended December 31, 2024, due to a $26.0 million increase in interest income, partially offset by a $4.5 million increase in interest expense.
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. 64 Table of Contents 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.
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-and intermediate-term securities.
Changes attributable to both volume and rate are allocated ratably between the volume and rate categories. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended ​ December 31, ​ 2024 vs. 2023 ​ Increase Total ​ (Decrease) due to ​ Increase ​ Volume Rate (Decrease) ​ (In thousands) Interest earned on: ​ ​ ​ ​ ​ ​ ​ Loans held for investment $ 16,682 ​ $ 588 ​ $ 17,270 Securities, includes restricted stock 1,507 ​ 2,109 ​ 3,616 Securities purchased under agreements to resell (1,526) ​ — ​ (1,526) Interest earning cash and other 1,938 ​ 187 ​ 2,125 Total interest income 18,601 ​ 2,884 ​ 21,485 ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest paid on: ​ ​ Savings, NOW, money market deposits 2,002 ​ 3,252 ​ 5,254 Time deposits (33) ​ 108 ​ 75 Total deposits 1,969 ​ 3,360 ​ 5,329 Borrowings — ​ — ​ — Total interest expense 1,969 ​ 3,360 ​ 5,329 Change in net interest income $ 16,632 ​ $ (476) ​ $ 16,156 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended ​ ​ December 31, ​ ​ 2023 vs. 2022 ​ ​ Increase ​ ​ Total ​ ​ (Decrease) due to ​ ​ Increase ​ Volume Rate ​ (Decrease) ​ ​ (In thousands) Interest earned on: ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans held for investment ​ $ 16,455 ​ $ 10,726 $ 27,181 Securities, includes restricted stock ​ 131 ​ ​ 728 ​ 859 Securities purchased under agreements to resell ​ (746) ​ ​ 1,021 ​ 275 Interest earning cash and other ​ (105) ​ ​ 2,685 ​ 2,580 Total interest income ​ 15,735 ​ ​ 15,160 ​ 30,895 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest paid on: ​ ​ ​ ​ ​ ​ ​ ​ ​ Savings, NOW, money market deposits ​ 591 ​ ​ 5,556 ​ 6,147 Time deposits ​ (50) ​ ​ 371 ​ 321 Total deposits ​ 541 ​ ​ 5,927 ​ 6,468 Borrowings ​ (2) ​ ​ 2 ​ — Total interest expense ​ 539 ​ 5,929 6,468 Change in net interest income ​ $ 15,196 ​ $ 9,231 $ 24,427 ​ ​ 57 Table of Contents Comparison of Operating Results for the Years Ended December 31, 2024 and 2023 General.
Changes attributable to both volume and rate are allocated ratably between the volume and rate categories. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended ​ December 31, ​ 2025 vs. 2024 ​ Increase ​ ​ ​ Total ​ (Decrease) due to ​ Increase ​ Volume ​ ​ ​ Rate ​ ​ ​ (Decrease) ​ (In thousands) Interest earned on: ​ ​ ​ ​ ​ ​ ​ ​ Loans held for investment $ 20,003 ​ $ 1,115 ​ $ 21,118 Securities, includes restricted stock 2,413 ​ 1,549 ​ 3,962 Interest earning cash and other 2,188 ​ (1,224) ​ 964 Total interest income 24,604 ​ 1,440 ​ 26,044 ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest paid on: ​ ​ ​ ​ ​ Savings, NOW, money market deposits 4,060 ​ 703 ​ 4,763 Time deposits (203) ​ (68) ​ (271) Total deposits 3,857 ​ 635 ​ 4,492 Borrowings — ​ — ​ — Total interest expense 3,857 ​ 635 ​ 4,492 Change in net interest income $ 20,747 ​ $ 805 ​ $ 21,552 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended ​ ​ December 31, ​ ​ 2024 vs. 2023 ​ ​ Increase ​ ​ Total ​ ​ (Decrease) due to ​ ​ Increase ​ ​ ​ ​ Volume ​ ​ ​ Rate ​ ​ ​ ​ (Decrease) ​ ​ (In thousands) Interest earned on: ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans held for investment ​ $ 16,682 ​ $ 588 $ 17,270 Securities, includes restricted stock ​ 1,507 ​ ​ 2,109 ​ 3,616 Securities purchased under agreements to resell ​ (1,526) ​ ​ — ​ (1,526) Interest earning cash and other ​ 1,938 ​ ​ 187 ​ 2,125 Total interest income ​ 18,601 ​ ​ 2,884 ​ 21,485 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest paid on: ​ ​ ​ ​ ​ ​ ​ ​ ​ Savings, NOW, money market deposits ​ 2,002 ​ ​ 3,252 ​ 5,254 Time deposits ​ (33) ​ ​ 108 ​ 75 Total deposits ​ 1,969 ​ ​ 3,360 ​ 5,329 Borrowings ​ — ​ ​ — ​ — Total interest expense ​ 1,969 ​ 3,360 5,329 Change in net interest income ​ $ 16,632 ​ $ (476) $ 16,156 ​ ​ Comparison of Operating Results for the Years Ended December 31, 2025 and 2024 General.
We also had a borrowing capacity with the FRB of New York discount window of $51.4 million. At December 31, 2024, we also had $17.5 million in aggregate unsecured lines of credit with unaffiliated correspondent banks.
We also had a borrowing capacity with the FRB discount window of $48.1 million. At December 31, 2025, we also had $29.0 million in aggregate unsecured lines of credit with unaffiliated correspondent banks. No amounts were outstanding on any of the aforementioned lines as of December 31, 2025 and December 31, 2024.
As of December 31, 2024, there was one multifamily loan totaling $10.9 million that was individually analyzed and collateral dependent on the Consolidated Statements of Financial Condition. 45 Table of Contents 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.
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.
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.
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.
In the third quarter of 2023, management elected to close out its reverse repurchase agreements and reinvest these funds into higher yielding commercial loans. 58 Table of Contents Interest Expense.
Securities purchased under agreements to resell interest income decreased $1.5 million, or 100.0%, to $0 for the year ended December 31, 2024 from $1.5 million for the year ended December 31, 2023. In the third quarter of 2023, management elected to close out its reverse repurchase agreements and reinvest these funds into higher yielding commercial loans. Interest Expense.
Our provision for credit losses was $4.5 million for the year ended December 31, 2023 compared to $3.5 million for the year ended December 31, 2022.
Our provision for credit losses increased $5.0 million to $9.7 million for the year ended December 31, 2025 from $4.7 million for the year ended December 31, 2024.
We recorded income tax expense of $15.6 million for the year ended December 31, 2024, reflecting an effective tax rate of 26.4%, compared to $14.9 million, or an effective tax rate of 26.6%, for the year ended December 31, 2023. Comparison of Operating Results for the Years Ended December 31, 2023 and 2022 General.
We recorded income tax expense of $14.8 million for the year ended December 31, 2025, reflecting an effective tax rate of 22.6%, compared to $15.6 million, or an effective tax rate of 26.4%, for the year ended December 31, 2024. The decrease in effective tax rate resulted from certain discrete tax benefits related to share-based compensation.
Securities interest income increased $859 thousand, or 20.6%, to $5.0 million for the year ended December 31, 2023 from $4.2 million for the year ended December 31, 2022.
Loan interest income increased $21.1 million, or 21.4%, to $119.6 million for the year ended December 31, 2025 from $98.5 million for the year ended December 31, 2024.
Critical Accounting Estimates A summary of our accounting policies is described in Note 1 to the Consolidated Financial Statements included in this annual report. Critical accounting estimates are necessary in the application of certain accounting policies and procedures and are particularly susceptible to significant change.
The transaction remains subject to regulatory approval, approval of Esquire and Signature shareholders, and other customary closing conditions. 49 Table of Contents Critical Accounting Estimates A summary of our significant accounting policies is described in Note 1 to the Consolidated Financial Statements included in this Annual Report.
As of December 31, 2024, the Company had approximately $979.0 million of law firm escrow (or trust) deposits with the majority of these law firms also having a commercial lending relationship with the Bank.
As of December 31, 2023, the aggregate amount of uninsured deposits was $381.6 million, or 27.1%, of our total Bank deposits of $1.41 billion, excluding $5.5 million of the Company’s deposits held by the Bank. ​ As of December 31, 2025, the Company had approximately $1.23 billion of longer duration law firm escrow (or trust) deposits with the majority of these law firms also having a commercial lending relationship with the Bank.
Our total assets were $1.89 billion at December 31, 2024, an increase of $275.6 million from $1.62 billion at December 31, 2023. The increase was primarily due to growth in our loan portfolio and securities available-for-sale, offset by decreases in cash and cash equivalents. Loan Portfolio Analysis.
Our total assets were $2.37 billion at December 31, 2025, an increase of $473.2 million from $1.89 billion at December 31, 2024, due to growth in loans held for investment of $361.4 million, or 25.9%, and increases in cash and cash equivalents of $109.6 million, or 86.7%. Loan Portfolio Analysis.
Our higher yielding commercial loans increased $182.7 million, or 24.8%, to $920.6 million at December 31, 2024 from $737.9 million at December 31, 2023 where commercial litigation related loan growth was $223.4 million, or 36.5%, to $835.8 million in 2024.
Our higher yielding variable rate commercial loans increased $325.0 million, or 35.3%, to $1.25 billion at December 31, 2025 from $920.6 million at December 31, 2024 where commercial litigation related loan growth was $342.5 million, or 41.0%, to $1.18 billion in 2025.
Multifamily loans increased $6.9 million, or 2.0%, to $355.2 million at December 31, 2024 from $348.2 million at December 31, 2023. Consumer loans increased $4.8 million or 33.5%, to $19.3 million at December 31, 2024 from $14.5 million at December 31, 2023.
Commercial real estate loans increased $20.3 million, or 23.3%, to $107.3 million at December 31, 2025 from $87.0 million at December 31, 2024. Multifamily loans increased $17.6 million, or 5.0%, to $372.8 million at December 31, 2025 from $355.2 million at December 31, 2024.
Our deposit growth and off-balance sheet funds demonstrate our highly efficient branchless and technology enabled deposit platforms. ​ As of December 31, 2023, the aggregate amount of uninsured deposits was $381.6 million, or 27.1%, of our total Bank deposits of $1.41 billion, excluding $5.5 million of the Company’s deposits held by the Bank.
Our core low-cost deposit growth and off-balance sheet client funds continue to clearly demonstrate our highly efficient, full service commercial relationships and tech-enabled cash management platform. ​ As of December 31, 2024, the aggregate amount of uninsured deposits was $463.9 million, or 28.2%, of our total Bank deposits of $1.64 billion, excluding $12.4 million of the Company’s deposits held by the Bank.
No tax-equivalent yield adjustments have been made as we have no tax free interest earning assets. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ ​ ​ ​ ​ ​ More Than One Year ​ More Than Five Years ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ One Year or Less ​ through Five Years ​ Through Ten Years ​ More Than Ten Years ​ Total ​ ​ ​ Weighted ​ ​ Weighted ​ ​ Weighted ​ ​ Weighted ​ ​ Weighted ​ ​ Amortized ​ Average ​ Amortized ​ Average ​ Amortized ​ Average ​ Amortized ​ Average ​ Amortized ​ Average ​ ​ Cost ​ Yield ​ Cost ​ Yield ​ Cost ​ Yield ​ Cost ​ Yield ​ Cost ​ Yield ​ ​ (Dollars in thousands) Securities available-for-sale: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mortgage backed securities-agency ​ $ — — % $ 4,403 3.23 % $ 5,675 3.57 % $ 92,931 1.89 % $ 103,009 2.04 % Collateralized mortgage obligations-agency ​ — — ​ — — ​ 1,286 2.43 ​ 157,156 5.04 ​ 158,442 5.01 ​ Total securities available-for-sale ​ $ — — % $ 4,403 3.23 % $ 6,961 3.36 % $ 250,087 3.87 % $ 261,451 3.84 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Securities held-to-maturity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Collateralized mortgage obligations-agency ​ $ — — % $ — — % $ — — % $ 68,660 3.00 % $ 68,660 3.00 % Total securities held-to-maturity ​ $ — — % $ — — % $ — — % $ 68,660 3.00 % $ 68,660 3.00 % ​ Deposits Total deposits increased $234.9 million, or 16.7%, to $1.64 billion at December 31, 2024 from $1.41 billion at December 31, 2023.
No tax-equivalent yield adjustments have been made as we have no tax free interest earning assets. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ ​ ​ ​ ​ More Than One Year ​ More Than Five Years ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ One Year or Less ​ through Five Years ​ Through Ten Years ​ More Than Ten Years ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ Amortized ​ Average ​ Amortized ​ Average ​ Amortized ​ Average ​ Amortized ​ Average ​ Amortized ​ Average ​ ​ Cost ​ Yield ​ Cost ​ Yield ​ Cost ​ Yield ​ Cost ​ Yield ​ Cost ​ Yield ​ ​ (Dollars in thousands) Securities available-for-sale: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mortgage backed securities-agency ​ $ — — % $ 4,697 3.09 % $ 7,658 4.04 % $ 85,342 1.89 % $ 97,697 2.12 % Collateralized mortgage obligations-agency ​ — — ​ — — ​ 9,003 5.21 ​ 151,720 4.96 ​ 160,723 4.98 ​ Total securities available-for-sale ​ $ — — % $ 4,697 3.09 % $ 16,661 4.68 % $ 237,062 3.86 % $ 258,420 3.90 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Securities held-to-maturity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Collateralized mortgage obligations-agency ​ $ — — % $ — — % $ — — % $ 60,193 2.94 % $ 60,193 2.94 % Total securities held-to-maturity ​ $ — — % $ — — % $ — — % $ 60,193 2.94 % $ 60,193 2.94 % ​ Deposits Total deposits increased $420.8 million, or 25.6%, to $2.06 billion at December 31, 2025 from $1.64 billion at December 31, 2024, primarily due to our focus on client acquisition and expansion/growth in our national litigation platform.
The increase for the year ended December 31, 2024 was primarily due to net income of $43.7 million and amortization of share-based compensation of $3.8 million, partially offset by dividends declared to common stockholders of $5.0 million, shares received related to tax withholding of $3.4 million, and other comprehensive loss of $1.1 million.
The increase for the year ended December 31, 2025 was primarily due to net income of $50.8 million, decreases in other comprehensive losses related to net unrealized gains in our available-for-sale securities portfolio of $5.8 million, and amortization of share-based compensation of $5.0 million, partially offset by dividends declared to common stockholders of $6.0 million, and shares from employees related to income tax withholding on share-based compensation of $4.0 million. ​ 61 Table of Contents Average Balance Sheets and Related Yields and Rates The following tables present average balance sheet information, interest income, interest expense and the corresponding average yields earned and rates paid for the years ended December 31, 2025, 2024 and 2023.
Commercial real estate loans decreased $2.5 million, or 2.7%, to $87.0 million at December 31, 2024 from $89.5 million at December 31, 2023. 1 – 4 family loans decreased $3.3 million, or 18.2%, to $14.7 million at December 31, 2024 from $17.9 million at December 31, 2023.
Consumer loans increased $3.4 million or 17.7%, to $22.8 million at December 31, 2025 from $19.3 million at December 31, 2024. 1 – 4 family loans decreased $4.8 million, or 32.9%, to $9.8 million at December 31, 2025 from $14.7 million at December 31, 2024. Loan Portfolio Composition.
Interest income increased $30.9 million, or 50.7%, to $91.9 million for the year ended December 31, 2023 from $61.0 million for the year ended December 31, 2022 and was attributable to an increase in loan, securities, interest earning cash and other and reverse repurchase interest income.
Interest Income. Interest income increased $26.0 million, or 23.0%, to $139.4 million for the year ended December 31, 2025 from $113.4 million for the year ended December 31, 2024 and was attributable to increases in income on loans, securities and interest earning cash.
Loan interest income increased $27.2 million, or 50.3%, to $81.2 million for the year ended December 31, 2023 from $54.0 million for the year ended December 31, 2022.
Net income increased $7.2 million, or 16.4%, to $50.8 million for the year ended December 31, 2025 from $43.7 million for the year ended December 31, 2024.
Interest expense increased $6.5 million, or 392.7%, to $8.1 million for the year ended December 31, 2023 from $1.6 million for the year ended December 31, 2022, as expense was impacted by both increases in the volume and rate on interest bearing deposits.
Securities interest income increased $4.0 million, or 45.9%, to $12.6 million for the year ended December 31, 2025 from $8.6 million for the year ended December 31, 2024 with $2.4 million attributable to average volume increases and $1.5 million attributable to increases in average rate.
Net income increased $12.5 million, or 43.8%, to $41.0 million for the year ended December 31, 2023 from $28.5 million for the year ended December 31, 2022. The increase resulted from a $24.4 million increase in net interest income and a $4.8 million increase in noninterest income, partially offset by an increase in noninterest expense of $11.1 million.
The increase resulted from a $21.6 million increase in net interest 63 Table of Contents income, and a decrease in tax expense of $793 thousand, partially offset by an increase in noninterest expense of $10.4 million and in increase in the provision for credit losses of $5.0 million. Net Interest Income.
No amounts were outstanding on any of the aforementioned lines as of December 31, 2024 and December 31, 2023. 55 Table of Contents Stockholders’ Equity Total stockholders’ equity increased $38.5 million, or 19.4%, to $237.1 million at December 31, 2024, from $198.6 million at December 31, 2023.
Stockholders’ Equity Total stockholders’ equity increased $52.5 million, or 22.1%, to $289.6 million at December 31, 2025, from $237.1 million at December 31, 2024.
Noninterest expense information is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended ​ ​ ​ ​ ​ ​ December 31, ​ Change ​ ​ 2023 2022 Amount Percent ​ ​ (Dollars in thousands) ​ Noninterest expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee compensation and benefits ​ $ 32,481 ​ $ 25,774 ​ $ 6,707 ​ 26.0 % Occupancy and equipment ​ ​ 3,363 ​ ​ 3,236 ​ ​ 127 ​ 3.9 ​ Professional and consulting services ​ ​ 5,447 ​ ​ 3,376 ​ ​ 2,071 ​ 61.3 ​ FDIC and regulatory assessments ​ ​ 793 ​ ​ 558 ​ ​ 235 ​ 42.1 ​ Advertising and marketing ​ ​ 1,823 ​ ​ 1,462 ​ ​ 361 ​ 24.7 ​ Travel and business relations ​ ​ 985 ​ ​ 566 ​ ​ 419 ​ 74.0 ​ Data processing ​ ​ 5,165 ​ ​ 4,222 ​ ​ 943 ​ 22.3 ​ Other operating expenses ​ ​ 3,060 ​ ​ 2,786 ​ ​ 274 ​ 9.8 ​ Total noninterest expense ​ $ 53,117 ​ $ 41,980 ​ $ 11,137 ​ 26.5 % ​ Employee compensation and benefits costs increased due to increases in employees to support growth as well as the impact of year end salary, bonus and stock-based compensation increases.
Noninterest expense information is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ ​ December 31, ​ Change ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ Amount ​ ​ ​ Percent ​ ​ ​ ​ ​ (Dollars in thousands) ​ Noninterest expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee compensation and benefits ​ $ 42,314 ​ $ 37,845 ​ $ 4,469 ​ 11.8 % Occupancy and equipment ​ ​ 4,907 ​ ​ 4,093 ​ ​ 814 ​ 19.9 ​ Professional and consulting services ​ ​ 5,498 ​ ​ 3,824 ​ ​ 1,674 ​ 43.8 ​ FDIC and regulatory assessments ​ ​ 1,118 ​ ​ 943 ​ ​ 175 ​ 18.6 ​ Advertising and marketing ​ ​ 3,614 ​ ​ 3,514 ​ ​ 100 ​ 2.8 ​ Travel and business relations ​ ​ 1,650 ​ ​ 966 ​ ​ 684 ​ 70.8 ​ Data processing ​ ​ 8,458 ​ ​ 6,660 ​ ​ 1,798 ​ 27.0 ​ Other operating expenses ​ ​ 3,675 ​ ​ 2,998 ​ ​ 677 ​ 22.6 ​ Total noninterest expense ​ $ 71,234 ​ $ 60,843 ​ $ 10,391 ​ 17.1 % ​ Employee compensation and benefits costs increased primarily due to increases in regional BDO incentive pay or sales commissions, year-end bonuses, employee benefit costs, stock grants and related stock-based compensation, and, to a lesser extent, the impact of year end salary increases and employee hires.
Interest earning cash and other interest income increased $2.6 million, to $4.2 million for the year ended December 31, 2023 from $1.6 million for the year ended December 31, 2022. This increase was attributable to a 313 basis point increase in yields driven by the movement in short-term interest rates.
Average securities increased $67.5 million, or 25.4%, to $333.3 million and securities yields increased by 53 basis points to 3.78%. Income on interest earning cash increased $964 thousand, to $7.2 million for the year ended December 31, 2025 with $2.2 million attributable to average volume increases (funded with core deposits), offset by $1.2 million due to decreases in short-term rates.
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 as of December 31, 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2024 Changes in ​ Economic ​ ​ ​ Interest Rates ​ Value of ​ ​ ​ (Basis Points) Equity ​ Change ​ ​ (Dollars in thousands) 300 ​ $ 447,969 ​ $ 47,121 200 ​ ​ 434,630 ​ ​ 33,782 100 ​ ​ 418,066 ​ ​ 17,218 0 ​ ​ 400,848 ​ ​ — -100 ​ ​ 376,828 ​ ​ (24,020) -200 ​ ​ 345,119 ​ ​ (55,729) -300 ​ ​ 307,948 ​ ​ (92,900) ​ Many assumptions are used to calculate the impact of interest rate fluctuations.
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. 69 Table of Contents 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 as of December 31, 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2025 Changes in ​ Economic ​ ​ ​ Interest Rates ​ Value of ​ ​ ​ (Basis Points) ​ ​ ​ Equity ​ ​ ​ ​ Change ​ ​ (Dollars in thousands) 300 ​ $ 562,251 ​ $ 95,613 200 ​ ​ 533,739 ​ ​ 67,101 100 ​ ​ 501,959 ​ ​ 35,321 ​ ​ ​0 ​ ​ 466,638 ​ ​ — -100 ​ ​ 423,174 ​ ​ (43,464) -200 ​ ​ 375,111 ​ ​ (91,527) -300 ​ ​ 320,662 ​ ​ (145,976) ​ Many assumptions are used to calculate the impact of interest rate fluctuations.
Securities purchased under agreements to resell interest income decreased $1.5 million, or 100.0%, to $0 for the year ended December 31, 2024 from $1.5 million for the year ended December 31, 2023.
Comparison of Operating Results for the Years Ended December 31, 2024 and 2023 General. Net income increased $2.6 million, or 6.5%, to $43.7 million for the year ended December 31, 2024 from $41.0 million for the year ended December 31, 2023.
The table does not include any estimate of prepayments that could significantly shorten the average life of all loans and may cause our actual repayment experience to differ from that shown below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 Multifamily Real Estate 1 – 4 Family Commercial Consumer Total ​ ​ (In thousands) Amounts due in: ​ ​ ​ ​ ​ ​ One year or less ​ $ 70,456 ​ $ 1,714 ​ $ 5,927 ​ $ 609,524 ​ $ 6,286 ​ $ 693,907 More than one to five years ​ 212,637 ​ 84,942 ​ 7,595 ​ 277,383 ​ 13,053 ​ 595,610 More than five to fifteen years ​ 72,072 ​ 382 ​ 755 ​ 33,660 ​ — ​ 106,869 More than fifteen years ​ — ​ — ​ 388 ​ — ​ — ​ 388 Total ​ $ 355,165 ​ $ 87,038 ​ $ 14,665 ​ $ 920,567 ​ $ 19,339 ​ $ 1,396,774 ​ The following table sets forth fixed and adjustable-rate held for investment loans at December 31, 2024 that are contractually due after December 31, 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Due After December 31, 2025 ​ Fixed Adjustable Total ​ ​ (In thousands) Real estate: ​ ​ ​ Multifamily ​ $ 262,987 ​ $ 21,722 ​ $ 284,709 Commercial real estate ​ 77,817 ​ 7,507 ​ 85,324 1 – 4 family ​ ​ 8,711 ​ ​ 27 ​ ​ 8,738 Commercial ​ 53,986 ​ 257,057 ​ 311,043 Consumer ​ 5,041 ​ 8,012 ​ 13,053 Total ​ $ 408,542 ​ $ 294,325 ​ $ 702,867 ​ At December 31, 2024, substantially all of our $920.6 million commercial loans are variable rate and tied to prime, comprising approximately 66% of our loan portfolio.
The table does not include any estimate of prepayments that could significantly shorten the average life of all loans and may cause our actual repayment experience to differ from that shown below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ Multifamily ​ ​ ​ Real Estate ​ ​ ​ 1 – 4 Family ​ ​ ​ Commercial ​ ​ ​ Consumer ​ ​ ​ Total ​ ​ (In thousands) Amounts due in: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ One year or less ​ $ 77,133 ​ $ 2,105 ​ $ 2,240 ​ $ 801,717 ​ $ 2,191 ​ $ 885,386 More than one to five years ​ 285,742 ​ 104,822 ​ 6,590 ​ 402,922 ​ 20,571 ​ 820,647 More than five to fifteen years ​ 9,925 ​ 366 ​ 628 ​ 40,916 ​ — ​ 51,835 More than fifteen years ​ — ​ — ​ 377 ​ — ​ — ​ 377 Total ​ $ 372,800 ​ $ 107,293 ​ $ 9,835 ​ $ 1,245,555 ​ $ 22,762 ​ $ 1,758,245 ​ The following table sets forth fixed and adjustable-rate held for investment loans at December 31, 2025 that are contractually due after December 31, 2026. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Due After December 31, 2026 ​ ​ ​ ​ Fixed ​ ​ ​ Adjustable ​ ​ ​ Total ​ ​ (In thousands) Real estate: ​ ​ ​ ​ ​ ​ Multifamily ​ $ 291,284 ​ $ 4,383 ​ $ 295,667 Commercial real estate ​ 98,446 ​ 6,742 ​ 105,188 1 – 4 family ​ ​ 7,595 ​ ​ — ​ ​ 7,595 Commercial ​ 74,909 ​ 368,929 ​ 443,838 Consumer ​ 3,460 ​ 17,111 ​ 20,571 Total ​ $ 475,694 ​ $ 397,165 ​ $ 872,859 ​ 55 Table of Contents At December 31, 2025, substantially all of our $1.25 billion commercial loans are variable rate and tied to prime, comprising approximately 71% of our loan portfolio.
Travel and business relations costs increased as a result of our high touch marketing and sales efforts which complement our digital marketing efforts and additional travel related to our newly hired regional BDOs.
Travel and business relations expenses increased resulting from our high touch sales efforts that complement our digital marketing efforts and additional travel related to the opening and associated training for our new Los Angeles branch. Income Tax Expense.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. Quantitative and Qualitative Disclosures About Market Risk The quantitative and qualitative disclosures about market risk are included under the section of this Annual Report entitled “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Management of Market Risk.” ​ ​ 66 Table of Contents
Biggest changeITEM 7A. Quantitative and Qualitative Disclosures About Market Risk The quantitative and qualitative disclosures about market risk are included under the section of this Annual Report entitled “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Management of Market Risk.” ​ ​ 71 Table of Contents

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