Eagle Bancorp, Inc. (EGBN) Earnings Call Transcript & Summary

[indiscernible] press releases which can be found on our website at www.eaglebankcorp.com. This presentation contains non-GAAP financial measures. Reconciliation of these measures can be found in our 2023 10-K or the March 31 10-Q. Also speaking this morning are Norman Pozez, our Executive Chairman; Susan Riel, our President and Chief Executive Officer; Rohini Ramanujam, our AVP, Senior Auditor and Inspector of Elections; and Jane Cornett, our Corporate Secretary. I would now like to introduce Rohini. She will be providing some information about voting during today's meeting. And after Susan Riel's presentation and following our Q&A session, she will announce the preliminary voting results.

[indiscernible] Question/Chat. This is where the bottom of the [indiscernible] webinar panel on your screen. There is an arrow to the left of Question/Chat in the panel. If the arrow is pointed to the right, then please click on it. The arrow should now be pointed down, and you should now see a hyperlink to the voting page. This is also the same space for you to type any questions you may have. If you have not voted on the 3 proposals listed in the company's proxy statement or if you are voting on the 3 proposals but would like to change your vote, click on the link; it will take you to a page where you can vote. If you have already voted and you don't want to change your vote, then there's nothing further that you need to do. Once you have voted, you can [indiscernible] the window that popped up when you clicked on the link in the chat box. The polls are now open and you may click on the link provided to cast your vote. Voting will close at the conclusion of the question-and-answer portion of today's meeting. After our President and CEO's remarks and after the question-and-answer session, I'll provide the preliminary vote totals on each proposal. The [indiscernible] report will be provided to the Corporate Secretary for retention in the official records of the company and will be disclosed in our Form 8-K filing. In the meantime, I'd like to introduce the company's Corporate Secretary, Jane Cornett, who will be announcing the quorum and stating the purpose of the meeting.

Thank you, Rohini. I am pleased to report that we do have a quorum, and therefore, this meeting is duly organized. We are here today for the following purposes: One, to elect 9 individuals nominated as directors for a 1-year term until the company's 2025 Annual Meeting of Shareholders or until their successors are duly elected and qualified. Two, to ratify the appointment of Crowe LLP as the company's independent registered public accounting firm to audit the consolidated financial statements of the company for the year-ended December 31, 2024. Three, to vote on a nonbinding advisory resolution approving the compensation of our named executive directors; and four, to transact any other business that may properly come before the meeting or any adjournment or postponement of the meeting. It is now my pleasure to introduce Eagle Bancorp's Executive Chairman, Norman Pozez. Thank you.

Thank you, Jane. Good morning. As Executive Chairman, it is my honor to address you all today at our Annual Shareholder Meeting. As we all know, the last several years have been a challenging period for our industry. All banks have faced numerous headwinds and challenges in the current economic climate, which have impacted our operations and financial results. Eagle remains committed to our mission of delivering exceptional financial services to our customers while creating long-term value for our shareholders. Despite the challenging market conditions, we have continued to invest in our people and infrastructure to ensure that we remain well positioned to navigate these uncertain times. Our experienced team has been working diligently to manage risk and seize opportunities, and I'm confident in their abilities. To our valued employees, I want to say thank you for your hard work, dedication and resilience. Your commitment to our customers and to each other has been truly inspiring, and I'm proud to be part of such a talented and dedicated team. To our shareholders, I want to assure you that we remain focused on delivering long-term value through growth, strong risk management and prudent capital allocation. Before I turn it over to Susan, the other directors present who are joining us virtually are Matt Brockwell, Steven Freidkin, Theresa LaPlaca, Leslie Ludwig, Kathy Raffa, Jim Soltesz and Ben Soto. Now it's my honor to introduce our President and Chief Executive Officer, Susan Riel, who will take you through some of the highlights.

Thanks, Norm. It is my pleasure to speak to everyone this morning. I would like to thank each of you for joining us today. I would also like to thank our Board of Directors, our employees and our many customers for the support given us over the past year. Also, I would like to take this opportunity to introduce the individuals we expect to serve as executive officers of the holding company for what the lawyers call Section 16 officers: Eric Newell, our Chief Financial Officer; Jane Williams, our Chief Credit Officer; Lindsey Rheaume, [indiscernible] our Chief Commercial and Industrial Lending Officer; Ryan Riel, our Chief Real Estate Lending Officer; and Paul Saltzman, our Chief Legal Officer. Other critical members of our executive management team include Karen Buck, our Chief Administrative Officer; and Charles Levingston, our bank's Chief Financial Officer. Over the past quarter century, we have overcome many challenges and obstacles to become a successful business, and I want to take this moment to recognize the hard work and dedication of everyone who has contributed. Our success is even more remarkable when you consider the economic challenges we have faced. We have endured recessions, market fluctuations and a global pandemic that has disrupted our lives and businesses. Despite these challenges, we have managed to stay true to our relationship first mission, adapt to changes and continue to deliver quality services to our customers and community. Even in these trying times, we remain resilient and steadfast in these efforts. To elaborate, I'm proud to say that we have experienced year-over-year growth in our total assets, loans and deposits. As of March 31, 2024, our total deposits reached $8.5 billion, marking an increase of over $1 billion compared to the previous year. During the same period, our total assets grew to $11.6 billion, an increase exceeding $500 million. Additionally, total loans expanded to $8 billion, marking a rise of over $200 million. Furthermore, our capital levels remain best in class compared to our peers. Our common equity Tier 1 ratio at March 31 stood at 13.8%. Based on December 31 total capital ratios, our capital levels are in the top quartile of banks greater than $10 billion in total assets. Eagle from the start has been different from most other banks. Our branch-light strategy gives us a leaner structure and enables us to earn more for each dollar spent on overhead. This has given us a pure leading edge in efficiency that allows us to invest in growth. While we have maintained a prudent approach to capital preservation, we have also focused on executing on our new growth strategies. During previous earnings calls, I have mentioned our strategy to diversify our deposit portfolio and reduce our reliance on wholesale funding. To that end, late last year, we introduced our direct banking channel as a soft launch to both our local and non-local markets. The early results are promising. Over the last 6 months, we -- with our deposit promotion strategies, we've opened 558 new relationships through all our acquisition channels, including our new digital channel. Most of these customers are new to Eagle and our teams have been cross-selling these customers into other products to deepen the relationships. During the previous 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 C&I loans. This includes expanding the breadth and depth of services offered by our treasury management business to better support the growth of the C&I business. 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're continuing to cultivate new relationships in our charter school segment, positioning ourselves as a market leader in the process. Overall, we believe the [ ideals ] I mentioned earlier, superior capitalization, strong operating efficiency and new growth strategies will give us the opportunity to improve our results. In closing, I would like to express my deep gratitude to our shareholders, clients, employees and directors for their unwavering support over the past year. To our shareholders, I thank you for your continued investment in Eagle and your trust in our management team. Your support has enabled us to navigate through the challenges of the past few months and positioned ourselves for long-term success. To our clients, thank you for choosing our bank as your trusted financial partner. We are committed to providing you with the highest level of service [indiscernible] and we value your loyalty and trust. To our employees, I thank you for your hard work, dedication and resilience during this time. Your commitment to our customers and our bank has been unwavering and nothing short of remarkable. I am proud to work alongside each and every one of you. To my colleagues on the Board, thank you for your dedication and guidance. Your oversight, review and challenge of management's actions is critical to maintaining appropriate corporate governance as we strive to achieve our strategic objectives. As we look to the future, I am confident that we can build -- we can continue to build on our success and deliver value to all our stakeholders. This concludes my formal remarks. At this point, we would be glad to take questions. Please keep in mind, however, that we will limit our answers to information that the company has already disclosed to the market.

As a reminder, you can still submit questions through the Questions/Chat pane in the control panel. Seeing that there are no questions, this concludes the Q&A portion of the meeting. I hereby declare the polls closed. I'll now turn the floor over to Rohini, our Inspector of Elections.

Mr. Chairman, I'm pleased to report the following results, which include the voting till 11:59 p.m. yesterday, May 15, 2024, and reported to us by the tabulator, Alliance Advisors LLC. For Proposal 1, each of the 9 individuals nominated as directors received votes in favor of at least 97% of votes cast, therefore, they each are approved. For Proposal 2, ratification of the appointment of Crowe LLP as the company's independent registered public accounting firm, the percentages of votes cast were: In favor, 99.64%, opposed 0.21%, abstained 0.15%. This item is approved. For proposal 3, the nonbinding advisory resolution concerning executive compensation, the percentages of votes cast were: In favor, 93.81%, opposed 5.51%, abstained 0.68%. Thank you, Mr. Chairman. This concludes my report.

Thank you, Rohini and congratulations to those individual selected as directors of Eagle Bancorp, Inc. This concludes our 2024 Annual Meeting of Shareholders. Thank you for attending. The meeting is adjourned.