Esquire Financial Holdings, the financial holding company for Esquire Bank, National Association, announced its operating results for the second quarter of 2021.
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Net income increased to $4.5 million, or $0.57 per diluted share, as compared to $4.2 million, or $0.53 per diluted share on a linked quarter basis. Net income and diluted earnings per share were $2.5 million and $0.33, respectively, for the second quarter of 2020.
Industry leading returns on average assets and common equity of 1.84% and 13.76%, respectively, as compared to 1.81% and 13.30% on a linked quarter basis while maintaining a strong net interest margin of 4.49%.
Total assets increased $59.8 million on a linked quarter basis, or 24% annualized, to $1.1 billion.
Deposits increased $55.0 million on a linked quarter basis, or 26% annualized, to $914.7 million, primarily driven by commercial deposits, with a cost of funds of 0.09% (including demand deposits). Demand deposits, totaling $395.6 million, represent 43% of total deposits while off-balance sheet sweep funds totaled $546.9 million at quarter end, demonstrating the continued strength of our branchless business model.
Loans increased $4.5 million on a linked quarter basis to $707.4 million despite significant paydowns on commercial lines of credit. Average loans increased $22.8 million, or approximately 14% annualized, to $700.3 million on a linked quarter basis while we continue to maintain a robust loan pipeline for the balance of 2021.
Payment processing (merchant) fee income totaled $5.4 million in the current quarter, an increase of 10% on a linked quarter basis, excluding certain early termination fees totaling $500 thousand in the trailing quarter. Payment processing fee income increased $2.5 million, or 88%, when comparing the current quarter to 2020. Total noninterest income represented 34% of total revenue in the current quarter.
Continued solid asset quality metrics with nonperforming loans to total loans of 0.32% and a reserve for loan losses to total loans of 1.98%. Excluding Small Business Administration ("SBA") guaranteed Paycheck Protection Program ("PPP") loans totaling $23.6 million, our reserve for loan losses to total loans was 2.05%.
Named the #1 top performing community bank in the 2020 Raymond James Community Bankers Cup.
Esquire Bank remains well above the bank regulatory "Well Capitalized" standards. ■