Key Highlights

  • Adjusted diluted EPS was $2.12, and GAAP diluted EPS was $1.57 versus $1.62 a year earlier.
  • Total revenue was $61.4 million, up from $42.1 million in the second quarter.
  • Loans rose 80.1% from June 30 to $3.43 billion, including $1.38 billion from Signature.
  • Net interest margin was 5.74%, down from 5.96% in the second quarter.
  • Nonperforming loans were 0.25% of loans, and the allowance was 1.30%.

Esquire Earnings: Did the Signature Deal Lift Adjusted EPS to $2.12?

Esquire Financial (NASDAQ:ESQ) reported third-quarter results on Tuesday, October 27, with adjusted diluted EPS of $2.12 against a screened estimate of $1.89, a surprise of 12.17% as screened. GAAP diluted EPS was $1.57, compared with $1.49 in the second quarter and $1.62 a year earlier.

Net income was $17.5 million versus $13.0 million in the second quarter and $14.1 million a year ago. Adjusted net income was $23.6 million, and nine-month net income was $42.7 million, or $4.48 per share, with adjusted EPS of $5.38.

The gap between GAAP and adjusted results reflects merger costs of $8.9 million in the quarter.

Esquire Margin and Efficiency: What Changed After the Acquisition?

Total revenue was $61.4 million, made up of $53.5 million of net interest income and $7.9 million of noninterest income, versus $42.1 million in the second quarter. Net interest margin was 5.74%, compared with 5.96% and 6.04% a year earlier, and the Signature acquisition added about 6 basis points.

Esquire serves small businesses and the litigation industry, with a payment processing arm. Payment processing fees were $5.4 million, up $375,000 year over year, on $10.5 billion of volume across 152.2 million transactions for about 94,000 merchants.

The reported efficiency ratio was 58.6% versus 50.1% in the second quarter, while the adjusted ratio improved to 41.1% from 47.6%. Return on average assets was 1.73%, or 2.34% adjusted, and adjusted return on average tangible equity was 23.10%.

Esquire Signature Deal: What Did the Merger Add?

The acquisition of Signature Bancorporation, parent of Signature Bank of Chicago, closed on August 1, 2026, at a purchase price of $466.1 million. It added $1.90 billion of assets, $1.36 billion of loans and $1.65 billion of deposits at fair value, with goodwill of $246.9 million and a core deposit intangible of $49.3 million.

The combined company has about $4.75 billion of assets, and the deal is about 10% accretive to tangible book value. The chief executive said it positions the company for performance that exceeds the initial earnings expectations set when the deal was announced on March 12, 2026.

Esquire Credit and Capital: How Strong Is the Balance Sheet?

Deposits were $3.98 billion, up $1.80 billion from June 30, with noninterest-bearing demand deposits of $1.11 billion, or 27.9%. Cost of deposits was 1.13%, and uninsured deposits were 42.1%. Litigation-related loans were $1.46 billion, or 42.5% of loans.

Nonperforming loans were $8.6 million, or 0.25% of loans, and nonperforming assets were 0.20% of assets. The provision was $1.8 million versus $2.9 million in the second quarter, and the allowance was $44.7 million, or 1.30% of loans.

Consolidated common equity tier 1 was 13.45%, and tangible common equity to tangible assets was 10.91%. Book value per share was $64.69 and tangible book value per share $40.48. The quarterly dividend was $0.20 per share, up from $0.175 a year earlier.

What to Watch Next for Esquire After the Signature Close?

Investors will watch how net interest margin holds as acquired balances season, progress toward the April 2027 systems conversions and deposit retention. Sweep funds of $775.5 million off balance sheet, about 32.9% of which could move on balance sheet, add a funding option.