Esquire Financial Holdings reported first-quarter 2026 net income of $12.2 million, up 7.0% from $11.4 million a year earlier, with diluted earnings per share rising to $1.40 from $1.33.
Revenue climbed to $40.5 million, up $6.7 million, or 19.8%, from the prior-year quarter. Net interest income increased $6.4 million, or 23.2%, to $34.0 million, while net interest margin widened 8 basis points to 6.04% from 5.96%.
Average interest-earning assets rose $403.5 million, or 21.5%, to $2.28 billion. Average loans increased $376.4 million, or 27.0%, to $1.77 billion, led by litigation-related loans, which grew $354.6 million, or 42.7%. Average securities rose $6.6 million, or 2.0%, to $334.5 million.
On a linked-quarter basis, loans increased $56.7 million, or 13% annualized, to $1.82 billion. Commercial loans rose $30.0 million, including $44.0 million of litigation-related loans, while commercial real estate loans increased $23.3 million. Average loan balances were $115.6 million higher than the prior quarter, or 28% annualized.
Deposits also grew. Total deposits increased $39.6 million on a linked-quarter basis, or 8% annualized, to $2.10 billion. Compared with the first quarter of 2025, deposits were up $414.4 million, or 24.6%, and average total deposits rose $364.2 million, or 21.7%, to $2.04 billion. The cost of deposits, including noninterest-bearing demand deposits, increased 6 basis points to 1.00%.
Noninterest income was $6.5 million, up $304 thousand from a year earlier. Payment processing income rose $231 thousand to $5.1 million, while ASP fee income increased $257 thousand to $1.1 million. Card payment volume reached $9.7 billion, up $421.7 million, or 4.6%, from the prior-year quarter, across 137.3 million transactions.
Noninterest expense climbed $3.9 million, or 23.3%, to $20.7 million. Employee compensation and benefits increased $2.2 million, merger-related costs were $1.3 million, data processing rose $449 thousand, advertising and marketing increased $147 thousand, and occupancy and equipment costs rose $124 thousand. The company also recorded a $398 thousand charge tied to accelerated stock compensation.
Provision for credit losses was $2.7 million, up $1.2 million from the first quarter of 2025. During the quarter, Esquire foreclosed on a $7.8 million nonaccrual multifamily loan, recorded $3.2 million of charge-offs, classified the property as other real estate owned, and sold it to an unrelated third party.
Asset quality remained tight. Nonperforming loans totaled $736 thousand, and the nonperforming loan-to-total-assets ratio was 0.03%. The allowance for credit losses to loans ratio was 1.30%, down from 1.37% a year earlier.
Profitability ratios eased from last year but remained strong. Return on average assets was 2.10%, down from 2.39%, and return on average equity was 16.82%, down from 19.13%. The efficiency ratio was 51.1%, compared with 49.6% a year earlier.
Capital ratios remained elevated, with common equity tier 1 at 14.25% and tangible common equity to tangible assets at 12.44%.
The board raised the regular quarterly cash dividend 14% to $0.20 per share, marking the fifth consecutive dividend increase since 2022. Following these announcements, the company's shares moved -0.08%, and are now trading at a price of $106.76. For more information, read the company's full 8-K submission here.
