Eagle Bancorp, Inc.

Good day, and thank you for standing by, and welcome to Eagle Band Corp, Inc., second 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'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 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 Reel, and our Chief Credit Officer, Jan Williams. I would now like to turn it over to Susan.

Thank you, Eric. Good morning, everyone. Before discussing our progress in continuing to execute our strategic objectives, I want to address our second quarter results announced last night. The quarter's results were affected by a goodwill valuation, which Eric will elaborate on. It's important to note, as you should know, that this impairment does not impact our cash, liquidity, regulatory or tangible capital ratios. It is a non-operating item that has been fully removed from our balance sheet, ensuring that any goodwill valuation risk will not affect our future results. That said, We are pleased to report that operating earnings in the second quarter have significantly improved from the first quarter. This improvement is largely driven by a lower provision for credit losses as we continue to prudently build reserves in response to uncertain market and economic conditions. We are rigorously focused on executing our strategic objectives of diversifying and growing our loan book and deposit franchise and capitalizing on value propositions for customer segments where we already have market presence. While achieving our loan mix goal is a multi-year endeavor, we anticipate ongoing progress in the interim, though achieving the goal may not be linear. We are already seeing encouraging results from our efforts to grow deposits and diversify our funding. although it is still early. Notably, we have onboarded a team to lead our expatriate banking services division, and we are excited about the future contributions this division will bring to our deposit diversification. Additionally, our direct digital channel continues to build momentum. As this channel grows, we aim to reduce our reliance on wholesale funding thereby lowering the costs of our interest-bearing funding. While we acknowledge the significant work ahead, we remain optimistic. Economic and interest rate uncertainties, particularly regarding office loans and other CRE exposures, have presented challenges. Eagle Bank has always been committed to serving commercial real estate investors and commercial business customers in the Washington, D.C. metropolitan area. and it will continue to do so. Our strategy is designed to gradually diversify our loan portfolio while continuing to offer exceptional value to our commercial customers. We remain cautious about the office sector, understanding that a return to pre-COVID absorption rates is unlikely in our region. Nevertheless, we are dedicated to working closely with our customers find solutions that maximize the value of their collateral. Our objective is to establish a strong foundation for sustainable growth, achieving improved and consistent profitability, regardless of the interest rate environment. I am confident that we have identified the necessary actions to set us up for continued success. With that, I'll hand it over to Eric.