Eagle Financial Services Inc

Thank you for standing by. At this time, I would like to welcome everyone to the EGLE Financial Services first quarter earnings call. All lines have been placed on mute to prevent any background noise. I would now like to turn the call over to Nicholas Smith, Deputy CFO. You may begin.

Good morning. Thank you for joining us for our first quarter earnings conference call. Before we begin, Please note that the information provided during this call contains forward-looking statements. Actual results may differ materially from those statements. Please refer to our most recent form 10-K, our Q1 earnings release, and other filings with the SEC for a detailed discussion of risk factors. We do not assume any obligation to update any forward-looking statements as a result of new information except as required by law. Also during the call, we will discuss certain non-GAAP financial measures in reference to the company's performance. You can see our reconciliation of these measures and GAAP financial measures in the appendix to our presentation, which can be found on our investor relations website. With us today are our CEO, Brandon Morey, our CFO, Kate Chappell, and our Chief Banking Officer, Joseph Trubisch.

I will now turn the call over to Brandon. Thank you, Nick, and good morning, everyone. Our first quarter results reflect continued progress executing against our long-term strategy, even as we navigate a more normalized growth environment following the liquidity events that we discussed throughout 2025. For the quarter, we reported net income of 3.7 million, or 69 cents per polluted share. While earnings declined modestly from the fourth quarter, the underlying performance of the franchise remained solid. Margin expanded, the efficiency ratio improved meaningfully, and the credit quality remained well controlled. Net interest margin increased to 3.63%, driven primarily by continued improvement in funding costs and the benefits of last year's down sheet repositioning. Deposit pricing discipline and the runoff of our higher cost funding continue to positively impact our spread. We also made good progress on the expense side. Non-interest expense declined sequentially, largely reflecting lower incentive compensation rules compared to the fourth quarter. As a result, our efficiency ratio improved 68% down from 70% last quarter. Credit quality remained stable. Non-performing assets increased slightly to .80% of total assets, given by the addition of two smaller relationships to non-actual status. These are well secured, and based on updated valuations, we believe the collateral is sufficient. We also recorded net recoveries in the quarter. which is a positive signal as we continue to actively manage criticized assets. Overall, our balance sheet remains strong and conservative. To put it in the example, capital levels exceed well-capitalized regulatory thresholds, and we reduce wholesale borrowings meaningfully during the quarter. These actions position us well as we continue to support our clients and communities. I think we'll now walk through the financial results in some great detail. Thanks.