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Announcements Commercial

Therium Access announces second round of grant awards to improve access to justice in the UK

Therium Group Holdings Limited, one of the world’s leading providers of litigation, arbitration and specialty legal finance, today announced the second recipients of grant awards by Therium Access, the firm’s not-for-profit arm dedicated to facilitating access to justice. This follows the recent appointment of Lord John Thomas of Cwmgiedd to its Advisory Committee and Jeunesse Mensier as Grant Programme Director.  The recipients of this grant round are: The Child Poverty Action Group:  a grant for the employment of an additional solicitor to build the capacity of their award-winning legal team which conducts strategic litigation to end child poverty; The Bar Human Rights Committee: a grant for the employment of a legal and policy officer to support the Bar’s influential international human rights work; JUSTICE: a grant towards their core costs to support their work which seeks to effect systemic change within the UK justice system by producing in-depth reports and recommendations; Advocate: a grant for the employment of their volunteer manager who facilitates and supports the laudable pro bono efforts of the Bar by representing those who cannot afford legal representation; The Free Representation Unit: a grant for the employment of a legal officer to provide full casework and advocacy in the social security and employment tribunals; National Family Mediation: a grant for the employment of a call handler to provide early advice and arrange mediation for families going through divorce or separation; The Speakeasy Law Centre: a grant for the employment of a new trainee solicitor who will provide legal advice to vulnerable people in the Cardiff area and ultimately qualify as a solicitor with experience in legal aid and social welfare law; Project for Registration of Children as British Citizens: a grant for the employment of a legal administrator and towards their core costs to support the specialist advice and strategic litigation they conduct on complex children’s citizenship issues; and Central England Law Centre: a grant towards their Birmingham centre’s core costs to support the direct advice they provide to local people and to bring strategic litigation cases. In addition, Therium Access has approved grants for two strategic litigation cases. Further information on these grants will follow in due course. Launched in March 2019, Therium Access has committed to providing grants worth a total sum of £900,000 to date. It is anticipated that tens of thousands of people will benefit from these grants, either by receiving direct advice and support or by the strategic litigation conducted by these organisations. Therium Access is the first of its kind initiative in the litigation funding industry. Grants awarded by Therium Access are intended to promote access to justice for those who lack the funds necessary to pursue or defend claims, as well as supporting projects that seek to improve access to justice.  John Byrne, Co-Founder and CEO of Therium Capital Management Limited, said: “We were overwhelmed by the number of worthy applications we received.  It is humbling to see the incredible work that so many organisations are doing every day to support the most vulnerable people in our society. Therium is proud to offer support to a number of these inspirational organisations and we look forward to building even more relationships in the advice sector.” Lord Falconer, Chairman of Therium Access Advisory Committee, said: “These grants demonstrate the depth of the impact Therium Access has. Most of our grants have been made to organisations which provide direct advice to those most in need, but it is also critical to support organisations which seek to challenge, influence or change the law.” About Therium Access Therium Access is the primary expression of Therium’s corporate and social responsibility programme. Therium Access dispenses with the criteria of funding for profit and has the sole purpose of facilitating access to justice.  Therium Access is a mark of Therium’s wider commitment to the pursuit of justice and the rule of law. Therium Access accepts applications from charities and other entities whose services and projects facilitate access to justice or from those seeking assistance to obtain legal representation on cases (including defence) which have strategic importance. The applicant’s need and the impact of the grant will be important factors in our review process. The deadline for the submission of the next round of grant applications is 30 April 2020. In addition, urgent applications may be considered on an ad hoc basis. Applications need to be made by legal representatives or the entity seeking a grant.  The board of Therium Access is assisted by an Advisory Committee which is chaired by Lord Falconer, former Lord Chancellor, Secretary of State for Constitutional Affairs and Secretary of State for Justice. Therium Access aims to support access to justice in the broadest terms and considers applications that further the following causes (in no particular order): The right to legal representation or due process; The proper and efficient administration of justice; The advancement of human rights; The promotion of equality of rights and diversity; The protection of children, the elderly, the disabled, minorities, asylum seekers and other vulnerable or disadvantaged groups; The advancement of environmental protection or improvement; The promotion of legal education that furthers the causes listed above; and any other case or project in which a person, group, or entity will not have access to justice without financial assistance. Therium Access is intended to be a global initiative. Its initial focus is on the UK and it will be rolled out in other jurisdictions in a number of planned phases. About Therium Therium is a leading global provider of litigation and arbitration and specialty legal finance. Over that period, Therium has funded claims with a total value exceeding £34 billion, including many of the largest and most high profile funded cases in the UK.  With investment teams in the UK, USA, Australia, Spain and Norway, Therium has established a track record of success in litigation finance in all forms, including single case litigation and arbitration funding, funding law firms and portfolios of litigation and arbitration claims.  Therium is also a founding member of the Association of Litigation Funders of England and Wales.  Therium Access and its not-for-profit funding is the latest innovation from Therium which has consistently been at the forefront of innovation in litigation finance, pioneering the combined use of insurance tools alongside funding vehicles, and introducing portfolio funding products into the UK.  Therium’s ability to develop innovative funding arrangements and bespoke financial solutions for litigants and law firms complements its unmatched experience and rigorous approach to funding a wide range of commercial disputes throughout the world. Chambers and Partners have ranked Therium as a Tier 1 litigation funder and Neil Purslow, the firm’s Chief Investment Officer, as a leading individual in the litigation funding industry, for the last two years. In February this year, Therium Capital Management was top ranked as one of the two “Leading” litigation and arbitration funding firms in the UK by legal and business directory Leaders League, in their 2019 ranking of litigation funding. Therium was also ranked as “Excellent” in the 2019 US ranking.  www.therium.com  www.theriumaccess.org
Uncategorized

LPF-Funded $750MM Shareholder Class Action Launched Against New Zealand Insurer CBL

LPF Group is funding a $750MM class action against collapsed New Zealand Insurer CBL, alleging the company directors breached their continuous disclosure obligations, made misleading statements during the IPO, and engaged in insider trading. As reported in Stuff, CBL collapsed in 2018, and now major shareholders, led by investment firm Harbour and Argo Investments Limited, are seeking redress for their financial losses. The company failure was one of the largest at the time in New Zealand corporate history. The claim alleges that the IPO statements were misleading, as they gave the impression that the company had enough in reserves to cover its insurance obligations. The claim also states that company executives failed to properly disclose key financial information post-IPO, and that directors Peter Harris and Alistair Hutchinson sold shares in CBL through companies they controlled, using information not privy to the general public. The now-defunct insurer, which did most of its business in Europe and specialized in new home renovation insurance, cost shareholders hundreds of millions when it went belly-up. Questions are also being asked about the industry regulator, the Reserve Bank, which had suspicions about CBL in 2013, but did not actively pursue an investigation until 2017 due to a lack of resources. CBL's directors are defending themselves against the allegations, and deny any wrongdoing whatsoever.
Commercial

Hearing Set for RAM Investors in LPF-Funded ANZ Claim

Ross Asset Management (RAM) investors are suing Australia and New Zealand Banking Group (ANZ), alleging that the bank breached its fiduciary duties to investors. The first legal hurdle has emerged, with ANZ filing a 'strike-out' application, asking the court to dismiss the motion entirely. As reported in ShareChat, the underlying claim involves investors in RAM, who allege that the now-defunct investment vehicle swindled them out of millions of dollars. RAM collapsed in 2012 after it was discovered to essentially be a Ponzi scheme. The $450MM under management had been wiped out, with further losses of $100MM on the books. Thus far, only $10MM has been recovered for investors. A claimant pool of 500 investors is suing ANZ for $70MM, in a claim that is funded by New Zealand funder LPF Group. With ANZ's latest application, the likelihood of a court date before 2021 is looking grim. However RAM investor group spokesman John Strahl noted that he'd rather have this application out of the way now, to ensure the court indeed wants to hear this case, than learn much later in the process that the case should be tossed.
Announcements Commercial

Augusta launches Consumer Claims Division with hires from Deloitte, Puma Investments, Prospect Capital and Stevens & Bolton

Augusta, the UK’s largest litigation funder by case volume, today announces the formation of its Consumer Claims Division, with four new hires into the business.

Led by Head of Structured Projects, Ed Yell, new joiners to the team are: Investment Managers Oliver Lawson, Solicitor (joining from Stevens & Bolton), Matthew Pitchers, ACA (joining from Deloitte) and Katherine Woodfine, CFA (joining from Puma Investments) as well as Investment Associate Lewis Davey (joining from Prospect Capital). Max Turner, already with Augusta, will also work with the team.

Louis Young, Managing Director at Augusta, said “I’m delighted to welcome Oliver, Matthew, Katherine and Lewis to the new division that Ed Yell has created. We have seen increasing demand for the funding of both large-scale consumer actions and high volume individual claims, both in the UK and in Europe, and we have responded with investment into specialist expertise to help law firms, claims managers and their clients navigate the compensation terrain on their way to gaining the access to justice that is sorely needed”.

Augusta has recently announced a further $115m fundraising from a multi-billion-dollar US-based investment manager. This follows a £150m fundraising from a global investment fund in 2018, to finance business growth and investment in funding cases.

Augusta has also recently announced hirings into its senior team with the arrival of Proskauer Director Polly Bahl as Chief Operating Officer, FTI Consulting Managing Director Leor Franks as Chief Marketing Officer and Ardonagh Group’s Chief Counsel Frances Coats as General Counsel. These additions reflect Augusta’s ongoing growth and increasing client demand for dispute and litigation funding.

About Augusta:

- Established in 2013, Augusta is the largest litigation and dispute funding institution in the UK by # case. Augusta’s scale enables us to make decisions in market-leading timeframes and fund cases of any size. - Augusta is organised into a series of specialist practice groups: Arbitration, Class Action, Competition, Consumer, Intellectual Property and Litigation, and sectors including Financial Services and Construction & Energy. - By the end of H12019, Augusta had funded 213 claims with a market-leading win ratio of over 80%. - Augusta has offices in London, Sydney, Melbourne and Toronto. - #consumer #litigation #legalservices #investment #privateequity

Announcements Commercial

Lord Thomas of Cwmgiedd joins the Advisory Committee of Therium Access, which is chaired by Lord Falconer

Jersey, Channel Islands, 29 October 2019. Therium Access, the not-for-profit arm of leading global litigation finance provider Therium, today announced that Lord John Thomas of Cwmgiedd is joining its Advisory Committee. Jeunesse Mensier has also been named Grant Programme Director. Lord Thomas was Lord Chief Justice of England and Wales – the most senior judge in the UK – between 2013 and 2017, and is a life peer. He was born in Wales and read law at Trinity Hall, Cambridge before being called to the Bar in 1969. Lord Thomas commenced practice in commercial law at what is now Essex Court Chambers in 1972 and became Queen’s Counsel in 1984. In 1992, he was appointed by the Department of Trade to inquire into the affairs of the Mirror Group Newspapers when owned by Mr Robert Maxwell. He became a High Court Judge in 1996, became a Lord Justice of Appeal in 2003 and was Senior Presiding Judge of England and Wales from 2003 to 2006. In 2008, he was appointed Vice-President of the Queen’s Bench Division and Deputy Head of Criminal Justice. He succeeded Sir Anthony May as President of the Queen’s Bench Division in 2011 before becoming Lord Chief Justice of England and Wales two years later. More recently, Lord Thomas has been the Chair of the Commission on Justice in Wales tasked with reviewing the Welsh justice system. The Report will be released later this month. Jeunesse Mensier was previously an Investment Officer at Therium, and the change in her role further demonstrates Therium’s commitment to this ground-breaking initiative in the litigation funding industry. Throughout her career, Jeunesse has been committed to access to justice and she will lead the direction of the grant programme as it continues to expand. Therium Access, launched in March this year, awards grants for cases with strategic importance which tackle important or systemic issues, as well as to organisations that seek to improve access to justice. The Advisory Committee is chaired by former Lord Chancellor and Justice Secretary Lord Falconer.  The inaugural recipients of Therium Access grants included The Personal Support Unit, LawWorks, Crosslight Advice and the Suffolk Law Centre. Jeunesse Mensier, Grant Programme Director of Therium Access, said: “To add someone of the calibre and experience of Lord Thomas to our esteemed Advisory Committee is a real privilege. We are currently reviewing over 50 applications received as part of our second grant round, and the next grant recipients will be announced on the 4th of November. We look forward to Lord Thomas’s support and invaluable insights in helping to ensure that Therium Access fulfils its purpose.” Lord Thomas said: “I am delighted to join the Advisory Committee of Therium Access, an important initiative in restoring the right to legal support. The pressure of austerity and legal aid cuts have resulted in a justice system that is unable to protect the rights and serve the interests of its most vulnerable citizens. Access to the courts and the ability to rely on the rule of law form the bedrock of a civilised society.” John Byrne, Co-Founder and CEO of Therium Capital Management Limited, said: “Therium Access is extremely fortunate to have the commitment and enthusiasm of Jeunesse Mensier and a distinguished Advisory Committee, chaired by Lord Falconer, which assesses grant applications from those shut out of the justice system. Adding Lord Thomas to the committee makes an even more formidable team.” About Therium Access Therium Access is the primary expression of Therium’s corporate and social responsibility programme. Therium Access dispenses with the criteria of funding for profit and has the sole purpose of facilitating access to justice.  Therium Access is a mark of Therium’s wider commitment to the pursuit of justice and the rule of law. Therium Access accepts applications from charities and other entities whose services and projects facilitate access to justice or from those seeking assistance to obtain legal representation on cases (including defence) which have a strategic importance. The applicant’s need and the impact of the grant will be important factors in our review process. The deadline for the submission of the next round of grant applications is 30 April 2020. In addition, urgent applications may be considered on an ad hoc basis. Applications need to be made by legal representatives or the entity seeking a grant.  The board of Therium Access is assisted by an Advisory Committee which is chaired by Lord Falconer, former Lord Chancellor, Secretary of State for Constitutional Affairs and Secretary of State for Justice. Therium Access aims to support access to justice in the broadest terms and considers applications that further the following causes (in no particular order): The right to legal representation or due process; The proper and efficient administration of justice; The advancement of human rights; The promotion of equality of rights and diversity; The protection of children, the elderly, the disabled, minorities, asylum seekers and other vulnerable or disadvantaged groups; The advancement of environmental protection or improvement; The promotion of legal education that furthers the causes listed above; and any other case or project in which a person, group, or entity will not have access to justice without financial assistance. Therium Access is intended to be a global initiative. Its initial focus is on the UK and it will be rolled out in other jurisdictions in a number of planned phases. About Therium Therium is a leading global provider of litigation and arbitration and specialty legal finance, active in England and Wales since 2009. Over that period, Therium has funded claims with a total value exceeding £34 billion, including many of the largest and most high profile funded cases in the UK.  With investment teams in the UK, USA, Australia, Spain and Norway, Therium has established a track record of success in litigation finance in all forms, including single case litigation and arbitration funding, funding law firms and portfolios of litigation and arbitration claims.  Therium is also a founding member of the Association of Litigation Funders of England and Wales. Therium Access and its not-for-profit funding is the latest innovation from Therium which has consistently been at the forefront of innovation in litigation finance, pioneering the combined use of insurance tools alongside funding vehicles, and introducing portfolio funding products into the UK.  Therium’s ability to develop innovative funding arrangements and bespoke financial solutions for litigants and law firms complements its unmatched experience and rigorous approach to funding a wide range of commercial disputes throughout the world. Chambers and Partners have ranked Therium as a Tier 1 litigation funder and Neil Purslow, the firm’s Chief Investment Officer, as a leading individual in the litigation funding industry, for the last two years. In February this year, Therium Capital Management was top ranked as one of the two “Leading” litigation and arbitration funding firms in the UK by legal and business directory Leaders League, in their 2019 ranking of litigation funding. Therium was also ranked as “Excellent” in the 2019 US ranking. www.therium.com www.theriumaccess.org
Announcements Commercial

New research: Lawyers’ use of legal finance is growing—and becoming more sophisticated

October 23, 2019 – Burford Capital, the leading global finance and investment management firm focused on law, today announced the results of its 2019 Legal Finance Report: A Survey of In-House and Law Firm Lawyers. Based on online survey data from 509 in-house and law firm lawyers in the US, UK, Canada and Australia, as well as in-depth phone interviews conducted with 32 leading lawyers across seven countries, the report reveals that legal finance is continuing to grow in use and sophistication, with lawyers predicting still more use in the event of a recession. Christopher Bogart, Burford’s CEO, commented: “What stands out about the findings is that lawyers not only expect their companies and firms to use legal finance but also are becoming more discerning in how they do so—whether that means funded recovery programs or high-value monetizations for in-house lawyers, or a proactive use of finance as a new business and client retention tool for law firms.” He continued: “This reflects the tremendous evolution of the category Burford led in our first decade, and we are of course gratified that the research also shows how much experience and track record matter to lawyers in their choice of legal finance provider.” Key findings from the research include: Awareness and use of legal finance continue to grow
  • 69.2% of lawyers are “very familiar” with legal finance, up from 50.3% in 2018.
  • 73.9% of lawyers see legal finance as growing and increasingly important.
  • 80.0% of lawyers agree that legal finance is an essential law firm new business tool.
Lawyers are becoming more sophisticated in their use of legal finance
  • The #1 factor cited by lawyers in choosing a legal finance provider is “expertise/track record” (45.6%), and the least is “cost of capital” (33.3%).
  • 3 out of 4 lawyers (74.8%) cite as a very important/important benefit that legal finance allows their businesses to invest in growth and “use capital efficiently”.
  • In interviews, Burford was the first or only legal finance company named by 91.0% of lawyers who were able to name any providers of legal finance unprompted.
Companies leave millions in claim value on the table 
  • 72.0% of in-house lawyers say their companies have failed to pursue meritorious legal claims for fear of adversely impacting the bottom line.
  • In interviews, half of in-house lawyers note that their companies have recovery programs.
Lawyers agree that legal finance is accepted and ethical
  • 72.1% of lawyers agree that “discovery and professional conduct rules adequately address issues raised by the presence of legal finance”.
  • 68.6% of lawyers agree that “most lawyers support litigation finance; its opponents are a vocal minority who exploit unjustified fears about its use”.
Use is predicted to increase should the economy worsen
  • 67.1% of lawyers regard as an “important” or “very important” benefit of legal finance that it allows their companies and firms to “recession-proof” legal budgets.
  • 69.5% of lawyers will push for legal finance in the event of a recession, and in-house lawyers will be even more likely to advocate for the tool.
The full 2019 Legal Finance Report: A Survey of In-House and Law Firm Lawyers is available on Burford’s web site and will be discussed in two upcoming webcasts; see Burford’s event calendar for details.

Contact

Liz Bigham, Burford Capital, 646-763-6163, lbigham@burfordcapital.com

About Burford Capital

Burford Capital is the leading global finance and investment management firm focused on law. Its businesses include litigation finance and risk management, asset recovery and a wide range of legal finance and advisory activities. Burford is publicly traded on the London Stock Exchange, and it works with law firms and clients around the world from its principal offices in New York, London, Chicago, Washington, Singapore and Sydney. For more information about Burford: www.burfordcapital.com.
Announcements Commercial

Esquire Financial Holdings, Inc. Reports Third Quarter 2019 Results

JERICHO, N.Y., Oct. 25, 2019 /PRNewswire/ -- Esquire Financial Holdings, Inc. (ESQ) (the "Company"), the holding company for Esquire Bank, National Association ("Esquire Bank"), today announced its operating results for the three and nine months ended September 30, 2019.

Significant achievements during the quarter include:

  • Net income increased to $3.8 million, or $0.49 per diluted share, for the current quarter compared to net income of $3.5 million, or $0.45 per diluted share for the quarter ended June 30, 2019.
  • Returns on average assets and common equity were 2.01% and 14.58%, respectively, as compared to 1.89% and 14.04% for the trailing quarter ended June 30, 2019.
  • Supported by a strong net interest margin of 4.82%, net interest income for the third quarter increased $1.5 million, or 20%, to $8.7 million compared to the same period in 2018.
  • Total assets increased 19% annualized, or $95.8 million, to $759.7 million when compared to December 31, 2018.
  • Loans increased 19% annualized, or $65.8 million, from December 31, 2018, to $533.9 million, primarily driven by our higher yielding commercial loan portfolio.
  • Continued solid asset quality metrics with 0.20% in nonperforming loans to total loans and an allowance for loan losses to total loans of 1.26% at September 30, 2019.
  • Merchant services fees increased 153% to $3.3 million compared to the quarter ended September 30, 2018. Total fee income represented 28.4% of total revenue for the quarter.
  • Efficiency ratio improved to 54.0% for the third quarter of 2019 compared to 55.7% for the second quarter of 2019.
  • Deposits totaled $644.5 million, a $76.1 million, or 18% annualized increase from December 31, 2018 with a cost of funds of 0.44% (including demand deposits). This growth was driven by our litigation and merchant platforms.
  • Average demand deposits represent approximately 40% of our average total deposits for the three and nine months ended September 30, 2019.
  • Esquire Bank remains well above the bank regulatory "Well Capitalized" standards.

"Our lending and merchant platforms continue to grow, driving strong performance metrics despite the current interest rate environment and economic outlook," stated Tony Coelho, Chairman of the Board. "We will continue to invest resources in both verticals."

"We continue to experience strong growth in our litigation platform despite excess liquidity in the alternative litigation finance market," stated Andrew C. Sagliocca, President and Chief Executive Officer.

Third Quarter Earnings

Net income for the quarter ended September 30, 2019 was $3.8 million, or $0.49 per diluted share, compared to $1.7 million, or $0.22 per diluted share for the same period in 2018. Returns on average assets and common equity for the current quarter were 2.01% and 14.58% compared to 1.07% and 7.66% for the same period of 2018. The prior year quarterly results included a one-time $859 thousand after tax compensation charge. Excluding this charge net income was $2.5 million, or $0.33 per diluted share in 2018. Returns on average assets and common equity were 1.62% and 11.57% excluding the compensation charge.

Net interest income for the third quarter of 2019 increased $1.5 million, or 20.2%, to $8.7 million, primarily due to growth in average interest earning assets totaling $113.0 million, or 18.6%, to $720.4 million when compared to the same period in 2018. Our net interest margin increased to 4.82% for the third quarter of 2019 compared to 4.75% in 2018. Average loans in the quarter increased $112.3 million, or 27.0%, to $528.3 million when compared to the third quarter of 2018. Loan growth was primarily driven by commercial loans representing organic growth funded with core deposits (total deposits excluding certificates of deposit). Core deposits represent 96.9% of total deposits at September 30, 2019 while our loan-to-deposit ratio was 82.8%.

The provision for loan losses was $425 thousand for the third quarter of 2019, a $25 thousand decrease from the comparable period in 2018. As of September 30, 2019, Esquire had nonperforming loans to total loans of 0.20%.

Noninterest income increased $1.7 million, or 93.1%, to $3.5 million for the third quarter of 2019 as compared to third quarter 2018. Our merchant services platform experienced strong growth, offset by decreased administrative service payment ("ASP") fees on off-balance sheet funds. Merchant processing income increased $2.0 million or 152.6% compared to the third quarter of 2018. This increase was due to the expansion of our sales channels through independent sales organizations ("ISOs"), merchants and additional fee allocation arrangements as we continue to focus on prudently growing this source of stable fee income. Other noninterest income, consisting primarily of ASP fee income, declined by $309 thousand compared to the quarter ended September 30, 2018. Our ASP fee income is impacted by the volume and duration of off-balance sheet funds as well as short-term interest rates.

Noninterest expense increased $274 thousand, or 4.3%, to $6.6 million for the third quarter of 2019 as compared to the third quarter of 2018. Excluding the aforementioned one-time pretax compensation charge totaling $1.2 million, noninterest expense increased $1.4 million for the third quarter of 2019. This increase was driven by increases in employee compensation and benefits, professional and consulting services and data processing costs. Employee compensation and benefits costs increased due to an increase in the number of employees as well as the impact of year end salary increases. Professional and consulting costs increased due to our IT enterprise-wide architecture assessments and other pre-development IT costs. Data processing costs were higher due to increased processing volume primarily driven by our core banking platform as well as additional costs related to certain system implementations. The Company's efficiency ratio continued to improve to 54.0% for the three months ended September 30, 2019 as compared to 56.8% for the same period ended 2018.

The effective tax rate for the third quarter of 2019 was approximately 27%. Year to Date Earnings Net income for the nine months ended September 30, 2019 was $10.3 million, or $1.32 per diluted share, compared to $5.9 million, or $0.76 per diluted share for the same period in 2018. Returns on average assets and common equity for the nine months ended September 30, 2019 were 1.90% and 13.86% compared to 1.35% and 9.19% for the same period of 2018. The prior year to date results included a one-time $859 thousand after tax compensation charge. Excluding this charge, net income was $6.7 million, or $0.87 per diluted share. Returns on average assets and common equity were 1.54% and 10.54% excluding the compensation charge. For the nine months ended September 30, 2019, net interest income increased $5.2 million, or 26.2%, to $25.3 million, primarily due to growth in average interest earning assets totaling $121.1 million, or 21.2%, to $691.9 million when compared to the same period in 2018. Our net interest margin increased to 4.88% for the nine months ended 2019 compared to 4.69% for the same period in 2018. Average loans for the nine months ended 2019 increased $118.1 million, or 31.0%, to $499.0 million. Loan growth was primarily driven by commercial loans which represents organic growth funded with core deposits. The provision for loan losses was $1.3 million for the nine months ended September 30, 2019, $275 thousand higher than the comparable period in 2018. The higher provision is reflective of growth as well as the composition of the loan portfolio. Noninterest income increased $2.8 million, or 47.7%, to $8.6 million for the nine months ended 2019. Our merchant services platform experienced strong growth, offset by decreased ASP fees. Merchant processing income increased $4.5 million or 126.3% compared to the nine months ended 2018. This increase was due to the expansion of our sales channels through independent sales organizations ("ISOs"), merchants and additional fee allocation arrangements. Other noninterest income, consisting primarily of ASP fee income, declined by $1.7 million or 71.9% compared to the nine months ended September 30, 2018. Noninterest expense increased $1.7 million, or 10.1%, to $18.6 million for the nine months ended 2019 as compared to the nine months ended 2018. Excluding the aforementioned one-time pretax compensation charge totaling $1.2 million, noninterest expense increased $2.9 million for the third quarter of 2019 driven by an increase in compensation and benefits, data processing and professional and consulting services costs. Employee compensation and benefits costs increased due to an increase in the number of employees as well as the impact of year end salary increases. Data processing costs were higher due to increased processing volume primarily driven by our core banking platform as well as additional costs related to certain system implementations. Professional and consulting costs increased due to our IT enterprise-wide architecture assessments and other pre-development IT costs. The Company's efficiency ratio continued to improve to 54.8% for the nine months ended September 30, 2019 as compared to 60.8% for the period ended 2018. The effective tax rate for the nine months ended 2019 was approximately 27%. Asset Quality Nonperforming assets, consisting of several nonaccrual consumer loans, totaled $1.1 million as of September 30, 2019. Nonperforming assets as a percentage of total assets was 0.14%. There were no nonperforming assets as of September 30, 2018. The allowance for loan losses was $6.7 million, or 1.26% of total loans, as compared to $5.2 million, or 1.19% of total loans at September 30, 2018. The increase in the allowance as a percentage of loans was primarily related to loan growth in the commercial, commercial real estate and consumer loan categories. Balance Sheet At September 30, 2019, total assets were $759.7 million, reflecting a $114.1 million, or 17.7% increase from September 30, 2018. This increase is attributable to increases in loans totaling $96.1 million, or 21.9%, to $533.9 million, primarily driven by commercial attorney related, commercial real estate and consumer loans, funded with core low-cost deposits. Total deposits were $644.5 million as of September 30, 2019, a $92.3 million, or 16.7% increase from September 30, 2018. This was primarily due to a $66.8 million, or 20.1% increase in Savings, NOW and Money Market deposits to $398.8 million and a $35.8 million, or 18.8% increase in noninterest bearing demand deposits to $225.7 million, offset by a decrease in time deposits of $10.3 million, or 33.9%, to $20.0 million. These increases were driven by commercial and escrow low-cost deposits from our litigation and merchant customers. Stockholders' equity increased $18.4 million to $106.9 million at September 30, 2019 compared to September 30, 2018. Esquire Bank remains well above bank regulatory "Well Capitalized" standards. The Company anticipates continued earnings growth in 2019 driven by its lending pipelines as well as its merchant services fee income opportunities. About Esquire Financial Holdings, Inc. Esquire Financial Holdings, Inc. is a bank holding company headquartered in Jericho, New York, with one branch office in Jericho, New York and an administrative office in Boca Raton, Florida. Its wholly-owned subsidiary, Esquire Bank, National Association, is a full service commercial bank dedicated to serving the financial needs of the legal industry and small businesses nationally, as well as commercial and retail customers in the New York metropolitan area. The bank offers tailored products and solutions to the legal community and their clients as well as dynamic and flexible merchant services solutions to small business owners. For more information, visit www.esquirebank.com. Cautionary Note Regarding Forward-Looking Statements This press release includes "forward-looking statements" relating to future results of the Company. Forward-looking statements are subject to many risks and uncertainties, including, but not limited to: changes in business plans as circumstances warrant; changes in general economic, business and political conditions, including changes in the financial markets; and other risks detailed in the "Cautionary Note Regarding Forward-Looking Statements," "Risk Factors" and other sections of the Company's 10-K as filed with the Securities and Exchange Commission. The forward-looking statements included in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "might," "should," "could," "predict," "potential," "believe," "expect," "attribute," "continue," "will," "anticipate," "seek," "estimate," "intend," "plan," "projection," "goal," "target," "outlook," "aim," "would," "annualized" and "outlook," or similar terminology. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise, except as may be required by law.

ESQUIRE FINANCIAL HOLDINGS, INC.

Condensed Consolidated Statement of Condition (unaudited)

(dollars in thousands except per share data)

September 30, 

December 31, 

September 30, 

2019

2018

2018

ASSETS

Cash and cash equivalents

$

61,676

$

30,562

$

39,840

Securities available for sale, at fair value

139,165

145,698

147,522

Securities, restricted at cost

2,665

2,583

2,403

Loans

533,949

468,101

437,883

Less: allowance for loan losses

(6,741)

(5,629)

(5,229)

Loans, net of allowance

527,208

462,472

432,654

Premises and equipment, net

2,872

2,694

2,616

Other assets

26,152

19,890

20,568

Total Assets

$

759,738

$

663,899

$

645,603

LIABILITIES AND STOCKHOLDERS' EQUITY

Demand deposits

$

225,740

$

212,721

$

189,960

Savings, NOW and money market deposits

398,812

335,283

332,016

Certificates of deposit

19,959

20,417

30,215

Total deposits

644,511

568,421

552,191

Other liabilities

8,324

2,704

4,917

Total liabilities

652,835

571,125

557,108

Total stockholders' equity

106,903

92,774

88,495

Total Liabilities and Stockholders' Equity

$

759,738

$

663,899

$

645,603

Selected Financial Data 

Common shares outstanding

7,541,670

7,532,723

7,445,723

Book value per share

$

14.17

$

12.32

$

11.89

Equity to assets

14.07

%

13.97

%

13.71

%

Capital Ratios (1)

Tier 1 leverage ratio

13.11

%

13.26

%

13.40

%

Common equity tier 1 capital ratio

16.90

%

17.54

%

17.78

%

Tier 1 capital ratio

16.90

%

17.54

%

17.78

%

Total capital ratio

18.08

%

18.70

%

18.92

%

Asset Quality

Nonperforming loans  

$

1,076

$

—

$

—

Allowance for loan losses to total loans

1.26

%

1.20

%

1.19

%

Nonperforming loans to total loans

0.20

%

—

%

—

%

Nonperforming assets to total assets

0.14

%

—

%

—

%

Allowance/nonperforming loans

626.49

%

—

%

—

%

_______________

(1) Regulatory capital ratios presented on bank-only basis.

ESQUIRE FINANCIAL HOLDINGS, INC.

Condensed Consolidated Income Statement (unaudited)

(dollars in thousands except per share data)

Three months ended 

Nine months ended 

September 30, 

September 30, 

2019

2018

2019

2018

Interest income

$

9,498

$

7,620

$

27,303

$

20,754

Interest expense

751

344

2,044

741

Net interest income

8,747

7,276

25,259

20,013

Provision for loan losses

425

450

1,250

975

Net interest income after provision for loan losses

8,322

6,826

24,009

19,038

Noninterest income:

Merchant processing income

3,284

1,300

7,994

3,532

Other noninterest income

191

500

653

2,322

Total noninterest income

3,475

1,800

8,647

5,854

Noninterest expense:

Employee compensation and benefits

3,817

4,161

10,841

10,230

Other expenses

2,787

2,169

7,752

6,661

Total noninterest expense

6,604

6,330

18,593

16,891

Income before income taxes

5,193

2,296

14,063

8,001

Income taxes

1,376

614

3,793

2,140

Net income

$

3,817

$

1,682

$

10,270

$

5,861

Earnings Per Share

Basic

$

0.52

$

0.23

$

1.39

$

0.80

Diluted

$

0.49

$

0.22

$

1.32

$

0.76

Basic - adjusted (1)

$

0.52

$

0.34

$

1.39

$

0.91

Diluted - adjusted (1)

$

0.49

$

0.33

$

1.32

$

0.87

Selected Financial Data

Return on average assets

2.01

%

1.07

%

1.90

%

1.35

%

Return on average common equity

14.58

%

7.66

%

13.86

%

9.19

%

Adjusted return on average assets (1)

2.01

%

1.62

%

1.90

%

1.54

%

Adjusted return on average common equity (1)

14.58

%

11.57

%

13.86

%

10.54

%

Net interest margin

4.82

%

4.75

%

4.88

%

4.69

%

Efficiency ratio(2)

54.0

%

56.8

%

54.8

%

60.8

%

__________________

(1) Figures have been adjusted to exclude a $1.2 million one-time charge (pretax) related to the passing of the Company's Executive Chairman in 2018. See non-GAAP reconciliation provided elsewhere herein.

(2) Efficiency ratio represents noninterest expenses divided by the sum of net interest income plus noninterest income. See non-GAAP reconciliation provided elsewhere herein addressing non-recurring charges.

ESQUIRE FINANCIAL HOLDINGS, INC.

Condensed Consolidated Average Balance Sheets and Average Yield/Cost (unaudited)

(dollars in thousands)

For the Three Months Ended September 30, 

2019

2018

Average

Average

Average

Average

Balance

Interest

Yield/Cost

Balance

Interest

Yield/Cost

INTEREST EARNING ASSETS

Loans

$

528,328

$

8,312

6.24

%

$

416,004

$

6,432

6.13

%

Securities, includes restricted stock

146,408

950

2.57

%

157,635

1,035

2.60

%

Interest earning cash

45,688

236

2.05

%

33,777

153

1.80

%

Total interest earning assets

720,424

9,498

5.23

%

607,416

7,620

4.98

%

NONINTEREST EARNING ASSETS

34,267

14,803

TOTAL AVERAGE ASSETS

$

754,691

$

622,219

INTEREST BEARING LIABILITIES

Savings, NOW, Money Markets

$

381,533

$

625

0.65

%

$

327,548

$

291

0.35

%

Time deposits

19,902

125

2.49

%

17,555

41

0.93

%

Total interest bearing deposits

401,435

750

0.74

%

345,103

332

0.38

%

Short-term borrowings

1

—

—

%

1,131

7

2.46

%

Secured borrowings

88

1

6.22

%

273

5

7.27

%

Total interest bearing liabilities

401,524

751

0.74

%

346,507

344

0.39

%

NONINTEREST BEARING LIABILITIES

Demand deposits

240,502

183,864

Other liabilities

8,785

4,708

Total noninterest bearing liabilities

249,287

188,572

Stockholders' equity

103,880

87,140

TOTAL AVG. LIABILITIES AND EQUITY

$

754,691

$

622,219

Net interest income

$

8,747

$

7,276

Net interest spread

4.49

%

4.58

%

Net interest margin

4.82

%

4.75

%

ESQUIRE FINANCIAL HOLDINGS, INC.

Condensed Consolidated Average Balance Sheets and Average Yield/Cost (unaudited)

(dollars in thousands)

For the Nine Months Ended September 30, 

2019

2018

Average

Average

Average

Average

Balance

Interest

Yield/Cost

Balance

Interest

Yield/Cost

INTEREST EARNING ASSETS

Loans

$

498,989

$

23,524

6.30

%

$

380,918

$

17,378

6.10

%

Securities, includes restricted stock

151,557

3,073

2.71

%

149,556

2,906

2.60

%

Interest earning cash

41,326

706

2.28

%

40,249

470

1.56

%

Total interest earning assets

691,872

27,303

5.28

%

570,723

20,754

4.86

%

NONINTEREST EARNING ASSETS

30,281

11,556

TOTAL AVERAGE ASSETS

$

722,153

$

582,279

INTEREST BEARING LIABILITIES

Savings, NOW, Money Markets

$

356,812

$

1,665

0.62

%

$

281,768

$

580

0.28

%

Time deposits

20,034

375

2.50

%

27,126

140

0.69

%

Total interest bearing deposits

376,846

2,040

0.72

%

308,894

720

0.31

%

Short-term borrowings

1

—

—

%

382

6

2.10

%

Secured borrowings

88

4

6.08

%

275

15

7.29

%

Total interest bearing liabilities

376,935

2,044

0.73

%

309,551

741

0.32

%

NONINTEREST BEARING LIABILITIES

Demand deposits

238,485

184,382

Other liabilities

7,676

3,117

Total noninterest bearing liabilities

246,161

187,499

Stockholders' equity

99,057

85,229

TOTAL AVG. LIABILITIES AND EQUITY

$

722,153

$

582,279

Net interest income

$

25,259

$

20,013

Net interest spread

4.55

%

4.54

%

Net interest margin

4.88

%

4.69

%

ESQUIRE FINANCIAL HOLDINGS, INC.

Condensed Consolidated Non-GAAP Financial Measure Reconciliation (unaudited) 

 (dollars in thousands except per share data)

Adjusted net income, which is used to compute adjusted return on average assets, adjusted return on average common equity and adjusted earnings per common share, excludes the impact of a one-time charge relating to compensation expense as a result of the passing of our Executive Chairman in 2018. 

We believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our financial position, results and ratios. However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for this measure, this presentation may not be comparable to other similarly titled measures by other companies.

The efficiency ratio is a non-GAAP measure of expense control relative to revenue. We calculate the efficiency ratio by dividing total noninterest expenses excluding non-recurring items by the sum of total net interest income and total noninterest income, each as determined under GAAP, but excluding net gains(losses) on securities and other non-recurring income sources, if applicable, from this calculation, which we refer to as recurring revenue. We believe that this provides one reasonable measure of recurring expenses relative to recurring revenue.

Three months ended 

Nine months ended 

September 30, 

September 30, 

2019

2018

2019

2018

Net income 

$

3,817

$

1,682

$

10,270

$

5,861

Add: compensation charge

-

1,173

-

1,173

Less: tax impact

-

314

-

314

Compensation charge, net

-

859

-

859

Adjusted net income

$

3,817

$

2,541

$

10,270

$

6,720

Return on average assets-GAAP

2.01

%

1.07

%

1.90

%

1.35

%

Add: compensation charge

0.00

%

0.55

%

0.00

%

0.19

%

Adjusted return on average assets

2.01

%

1.62

%

1.90

%

1.54

%

Return on average common equity-GAAP

14.58

%

7.66

%

13.86

%

9.19

%

Add: compensation charge

0.00

%

3.91

%

0.00

%

1.35

%

Adjusted return on average common equity

14.58

%

11.57

%

13.86

%

10.54

%

Diluted earnings per share-GAAP

$

0.49

$

0.22

$

1.32

$

0.76

Add: compensation charge

0.00

0.11

0.00

0.11

Adjusted diluted earnings per share

$

0.49

$

0.33

$

1.32

$

0.87

Efficiency Ratio 

Net interest income

$

8,747

$

7,276

$

25,259

$

20,013

Noninterest income

3,475

1,800

8,647

5,854

Recurring revenue

$

12,222

$

9,076

$

33,906

$

25,867

Total noninterest expense

$

6,604

$

6,330

$

18,593

$

16,891

Less: compensation charge

-

1,173

-

1,173

Recurring noninterest expense

$

6,604

$

5,157

$

18,593

$

15,718

Efficiency ratio

54.0

%

56.8

%

54.8

%

60.8

%

SOURCE Esquire Financial Holdings, Inc.
Announcements

Therium Expands London Investment Team with Appointment of James Dobias

London, 22 October, 2019 – Therium Group Holdings Ltd., a leading provider of litigation finance globally with over $1 billion of assets under management, has added to its investment team in London with the appointment of James Dobias as an Investment Officer. James joins Therium from Slaughter and May, where he advised on a broad range of complex commercial disputes, as well as white-collar and corporate investigations, including: High-value follow-on and standalone competition damages claims, including collective settlement negotiations with claimant law firms; Mass tort and other group claims across a number of sectors; Defending Aegis in High Court litigation alleging breach of warranty and fraudulent misrepresentation; Advising a FTSE 100 company on a fraud and asset tracing claim, involving considerations as to jurisdiction, location of assets and foreign enforcement risk; and Advising Rolls-Royce during its bribery and corruption investigations, including the negotiation of simultaneous deferred prosecution agreements with the UK Serious Fraud Office and the US Department of Justice. James has also held senior commercial roles at SAM Labs, an internet-of-things electronics company, and online lawyer introduction service Lexoo. Neil Purslow, Co-Founder and Chief Investment Officer of Therium, said: “James is a first class litigator with tremendous experience of working on very challenging, typically cross-border disputes with multiple stakeholders. His expertise and entrepreneurial flair fits perfectly with Therium and he will play a key role as we continue to see substantial demand for our litigation funding services globally. We are delighted that James has joined our investment team.” James Dobias, Investment Officer, Therium Capital Management, said: “I have admired Therium for many years and been hugely impressed by its work, innovation and rapid growth across the world. It’s very exciting to be joining such a preeminent leader of the litigation finance industry.” James is a graduate of the University of Oxford (First Class Honours in Philosophy, Politics and Economics (PPE)), where he came top of his year in Economics, and BPP Law School, where he achieved a Distinction in both the Graduate Diploma in Law and the Legal Practice Course. Therium is one of world’s leading litigation financing firms. The firm has funded claims valued at £34 billion and has operations across Europe, including in the UK, Germany, Italy, Spain and Scandinavia, and in the USA and Australia. Therium is ranked as a Tier 1 litigation funder in Chambers and Partners’ 2019 litigation support directory. About Therium Therium is a leading global provider of litigation, arbitration and specialty legal finance and has funded claims with a total value exceeding £34 billion.  The firm has investment teams in the UK, USA, Australia, Spain, Germany and Oslo, supplementing its resources in its corporate headquarters in Jersey, Channel Islands.  Therium has established a track record of success in litigation finance in all forms including single case litigation, group litigation and arbitration funding, funding law firms, funding portfolios of litigation and arbitration claims and monetising judgments and awards.  Therium has raised over $1 billion since its foundation, which includes the latest £325 million fund raised in March 2019. www.therium.com
Announcements Consumer

Multi Funding USA Receives Approval to Serve Ohio Legal Community

Woodstock, NY—October 21, 2019 — Multi Funding USA, a leading pre-settlement funding provider serving law firms, attorneys and plaintiffs, announced that it has received authorization to provide pre-settlement funding to lawyers throughout the state of Ohio. Through its advanced and secure technology, attorneys can easily apply for litigation financing on Multi Funding USA’s secure website, and receive automated notifications, documentation, and funding in an expedited manner. Based in Woodstock, New York, Multi Funding serves attorneys in approximately fourteen states across the country. The company is one of a handful of NMLS (Nationwide Mortgage Licensing System)-certified pre-settlement providers. The NMLS certification process includes a rigorous set of financial, operational and technology audits, indicating that Multi Funding has the financial resources and security protocols to satisfy the needs of lawyers and plaintiffs. “We are delighted that Multi Funding  has received approval to serve the needs of attorneys and clients in the state of Ohio, and we are eager to help clients manage the financial burdens associated with waiting for cases to settle,” said Joseph Duffy, managing partner of Multi Funding USA. “Our secure technology, combined with the peace-of-mind associated with NMLS certification, should resonate with Ohio attorneys who are looking to partner with a skilled, experienced, and highly reputable partner.” The company leverages a state-of-the-art litigation financing platform provided by Segue Cloud Services. This platform automates the entire burdensome pre-settlement process, including intake, verification, notification, funding, and reporting. This system typically places funds into the hands of plaintiffs and attorneys in less than 24 hours, providing financial security in the often-lengthy pre-settlement period. About Multi Funding USA Headquartered in Woodstock, New York, Multi Funding is a major provider of specialized legal funding, attorney funding, and law firm funding services. With decades of lawsuit funding, business, and legal experience, the company’s founders have made it their focus to provide simple and fast services while maintaining a high standard of excellence. Multi Funding has provided millions of dollars of legal funding to plaintiffs and attorneys across the United States. www.multifundingusa.com