Eagle Bancorp, Inc.

Good day, and thank you for standing by. Welcome to the Eagle Bancorp Inc. First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Eric Newell, Chief Financial Officer of Eagle Bancorp, Inc. Please go ahead.

Good morning. This is Eric Newell, Chief Financial Officer of Eagle Bancorp. Before we begin the presentation, I would like to remind everyone that some of the comments made during this call are forward-looking statements. We cannot make any promises about future performance and caution you not to place undue reliance on these forward-looking statements. Our Form 10-K for the 2023 fiscal year and current reports on Form 8-K, including the earnings presentation slides, identify risk factors that could cause the company's actual results to differ materially from those projected in any forward-looking statements made this morning, which speak only as of today. Eagle Bancorp does not undertake to update any forward-looking statements as a result of new information or future events or developments unless required by law. This morning's commentary will include non-GAAP financial information. The earnings release, which is posted in the investor relations section of our website and filed with the SEC, contains reconciliations of this information to the most directly comparable GAAP information. Our periodic reports are available from the company, online at our website, or on the SEC's website. With me today is our President and CEO, Susan Riehl, our Chief Credit Officer, Jan Williams, and our Bank Chief Financial Officer, Charles Lovingston. I would now like to turn it over to Susan.

Thank you, Eric. Good morning, everyone. The management team and I have worked through the first quarter to continue executing on our strategies that I discussed on our last earnings call in January. I will update you on these in a moment. But first, while our first quarter results reflect continued stability in pre-provisioned net revenue from the fourth quarter, net income was impacted by a loss recognized in our office portfolio. As Eric and Jan will review in more detail, the quarter's net income was impacted by a charge-off on a central business district office relationship. We are continuing to be proactive in identifying and addressing challenges. Eric will discuss how our allowance for credit losses is evolving, informed by more timely information about our markets. We've been proactive with our customers that have maturities upcoming to address the credit posture of Eagle Bank. The challenges of the first quarter demonstrated the benefits of the company's prudent approach to capital preservation. Our common equity tier one ratio at March 31, excuse me, stood at 13.8%. Based on December 31 capital ratio, Eagle's capital levels are in the top quartile of banks greater than $10 billion in total assets. We are highly confident that our focus on preserving and growing pre-provisioned net revenue and our strong level of capital will allow us to work through our office portfolio challenges. The team has been hard at work during the quarter on executing on our strategies. Last quarter, I mentioned our strategy to diversify our deposit portfolio. To that end, last year we introduced our direct banking channel as a soft launch. We've expanded that to our local markets in the first quarter and just two weeks ago started to market more widely outside of our footprint. The early results are promising. Over the last six months, with our deposit promotion strategies, we've opened 558 new relationships through all of our acquisition channels, including our new digital channel. Most of these customers are new to Eagle, and our teams have been developing strategies to cross-sell these customers into other products to deepen the relationships. During the quarter, we also onboarded a new team that has developed and built expatriate banking programs at their former organizations. Once up and running, we expect this line of business to nicely augment our deposit gathering efforts. Another important strategy is the growth of CNI loans. This includes expanding the breadth and depth of services offered by our treasury management business to better support the growth of CNI loans. Our CNI pipelines are growing as we are seeing more activity in our government contracting and education segments. Our government contracting team was a source of revenue growth in the first quarter. and we continue to win new relationships in our charter school segment where we are establishing a strong presence. In late February, we announced the July 2024 retirement of Lindsey Raume, who leads the CNI team. I am excited for Lindsey on his next chapter and appreciate his contributions to Eagle Bank. We expect to have identified a new leader later this spring. While I am disappointed at the quarterly results, I am excited about the future. Eagle Bank was built on the premise of serving commercial real estate investors and commercial business customers in the metropolitan area around Washington, DC. Our expertise allows us to better partner with our customers through challenges. In combination with the new initiatives just discussed, we remain committed to our customers providing them concierge service through our relationship first culture. As we work through the cycle of credit, our strategies and focus will also be on growing pre-provision net revenue through growth of net interest income and fee income. Our objective is to have a strong foundation and be well positioned for sustainable growth with improved and consistent profitability regardless of the interest rate environment. I am confident that we've identified the actions needed to set us up for continued success. With that, I'll hand it over to Eric.