NASDAQ$ESQ

Esquire Financial Holdings Inc · Q1 2020 earnings

Q1 2020 earnings · · Investor relations

Briefing

Net income decreased due to additional provision for credit losses based on qualitative factors reflective of the rapid decline in economic conditions due to the COVID-19 pandemic.

Esquire Financial Holdings reported a decrease in net income to $2.6 million, or $0.33 per diluted share, for the first quarter of 2020, compared to $3.0 million, or $0.39 per diluted share, for the same period in 2019. The results were impacted by an additional provision for credit losses totaling $1.5 million due to the COVID-19 pandemic.

  • Net income decreased 13% to $2.6 million, or $0.33 per diluted share, compared to the same period last year.
  • Net interest income increased 16% to $9.2 million, supported by a net interest margin of 4.71%.
  • Total assets increased 12% on an annualized basis to $821.5 million compared to December 31, 2019.
  • Merchant services fees increased 63% to $3.0 million compared to the quarter ended March 31, 2019.

Headline financials

Total Revenue

$12.3M

Previous: $10M+22.9%
EPS (adj)

$0.33

Previous: $0.39-15.4%
Net Interest Margin

4.7%

Previous: 4.9%-4.7%
Efficiency Ratio

55.8%

No prior period
NPLs to Total Loans

0.1%

No prior period
Allowance to Loans

1.5%

No prior period
Capital Expenditures

-$217K

Previous: -$333K+34.8%
Free Cash Flow

$2.38M

Previous: $2.65M-10.3%
Net Income

$2.6M

Previous: $2.99M-13.0%
Operating Income

$9.42M

Previous: $7.7M+22.3%
Gross Profit

$12.3M

Previous: $10M+22.9%
Cash & Equivalents

$70.4M

Previous: $49.9M+41.0%
Total Assets

$821M

Previous: $720M+14.1%

Revenue & EPS history

Esquire Financial · Revenue · Quarterly

$12.3M

Q1 2020+22.9%vs Q1 2019
Beat estimate in 9 of 14 quarters(64%)
ActualEstimate

Forward guidance

The COVID-19 pandemic is expected to impact financial results and demand for products and services during the second quarter of 2020 and potentially beyond, affecting revenues, earnings, allowance for credit losses, capital reserves, and liquidity.

Tailwinds

  • Company implemented various strategies and protocols to protect its employees and their families.
  • Company provided uninterrupted services for our customers while maintaining continuity of our core operating systems
  • Company mitigated financial risks posed by changing market conditions.
  • Company canceled all business travel (both into and out of our offices).
  • Company implemented quarantine and work from home protocols.

Headwinds

  • The demand for our products and services may decline, making it difficult to grow assets and income.
  • Loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income.
  • Collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase.
  • The allowance for loan losses may increase if borrowers experience financial difficulties, which will adversely affect our net income.
  • Cyber security risks are increased as the result of an increase in the number of employees working remotely.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2020

Historical avgQ1 2020

+2.1%

Avg return

Earnings day

+2.1%

Avg return

5 days after

+4.8%

Avg return

30 days after

71%

29 / 41 earnings

Positive

+11.5%

Q4 2017

Best reaction

-3.4%

Q2 2016

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+4.3%-2.9%+0.7%
Q4 2025+0.8%-0.3%-2.0%
Q3 2025+1.1%-2.3%-1.4%
Q2 2025-1.3%-3.1%-1.8%
Q1 2025+2.6%+4.7%+8.7%
Q4 2024-3.2%-3.6%-11.3%
Q3 2024+2.8%+7.3%+21.8%
Q2 2024+3.6%+4.4%+7.0%
Q1 2024+4.6%+0.2%+0.3%
Q4 2023+6.9%+9.1%+1.2%
Q3 2023+2.0%+5.3%+4.5%
Q2 2023+3.6%+1.1%-4.8%
Q1 2023+2.8%+4.3%+14.8%
Q4 2022+6.6%+8.3%+10.3%
Q3 2022+7.7%+10.8%+15.3%
Q2 2022+8.4%+5.6%+13.2%
Q1 2022-2.9%-3.8%-2.9%
Q4 2021+4.4%+2.5%+4.3%
Q3 2021-1.0%+0.1%+9.7%
Q2 2021+2.7%+1.6%+8.9%
Q1 2021-0.5%-0.7%+5.2%
Q4 2020-0.4%-12.0%-9.3%
Q3 2020+1.8%-8.1%+8.9%
Q2 2020-1.5%-3.1%+3.5%
Q1 2020+4.5%+12.8%+14.1%
Q4 2019-2.4%-1.0%+1.0%
Q3 2019+4.7%+6.4%+6.2%
Q2 2019+3.5%+7.2%-4.8%
Q1 2019+6.0%+12.5%+2.1%
Q4 2018-3.1%-0.9%+7.4%
Q3 2018+4.4%+3.8%+11.2%
Q2 2018+0.0%-4.1%+1.9%
Q1 2017-0.1%-0.6%+9.3%
Q1 2018-2.7%-2.5%+0.5%
Q4 2016+2.2%+0.9%-1.0%
Q4 2015+2.2%+0.9%-1.0%
Q4 2017+11.5%+18.2%+19.2%
Q3 2016+1.0%+1.5%+18.1%
Q3 2017+2.3%+2.9%+11.5%
Q2 2016-3.4%-0.5%-6.6%
Q2 2017+1.4%+1.7%+3.8%
Q1 2016
Q3 2015
Q2 2015
Q1 2015

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