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Jun 30, 2020
Esquire Financial Q2 2020 Earnings Report
Second quarter results reported with net income relatively unchanged despite recording an additional provision for loan losses.
Key Takeaways
Esquire Financial Holdings, Inc. reported net income of $2.5 million, or $0.33 per diluted share, for the second quarter of 2020. The results were impacted by an additional provision for loan losses of $1.5 million due to the economic uncertainty surrounding the COVID-19 pandemic. Deposits increased by $27.1 million, driven by low-cost litigation market customers.
Net income was relatively unchanged at $2.5 million, or $0.33 per diluted share, on a linked quarter basis.
Deposits increased $27.1 million, or 15.5% annualized, to $724.9 million on a linked quarter basis.
Loans totaling $593.7 million were relatively unchanged on a linked quarter basis.
Merchant services fee income was relatively unchanged at $2.9 million on a linked quarter basis despite significant processing volume declines.
Esquire Financial
Esquire Financial
Forward Guidance
The COVID-19 pandemic may continue to impact our financial results and demand for our products and services during the second half of 2020 and potentially beyond.
Challenges Ahead
- The demand for our products and services may decline, making it difficult to grow assets and income.
- If the economy is unable to substantially reopen, and high levels of unemployment continue for an extended period of time, 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.
- Our allowance for loan losses may increase if borrowers experience financial difficulties, which will adversely affect our net income.
- The net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us.