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

Hello, everyone, and welcome to the 2025 Annual Shareholder Meeting for Eagle Bancorp, Inc. I would now like to introduce Eric Newell, Chief Financial Officer of Eagle Bancorp Inc. Go ahead.

Good morning. It's May 15 at 10:00 a.m. and I'd like to call the Eagle Bancorp 2025 Annual Shareholder Meeting to order. I'll be serving as your host for today's meeting, which is being recorded. [Operator Instructions] As always, it is our desire to hold a fair, transparent and informative annual meeting. During this meeting, you'll have the opportunity to submit questions by typing your questions into the chat pane of the control panel. You may submit questions any time during the meeting, and we will queue them up for Q&A session at the end of the meeting. We will make every effort to answer your questions, although we may summarize similar questions or decline to answer questions that as described in the company's proxy statement are out of order. The presentation contains forward-looking statements. For our most recent disclosures, please review our 10-K, 10-Q and related press releases, which can be found on our website at www.eaglebancorp.com. This presentation contains non-GAAP financial measures. Reconciliation of these measures can be found in our 2024 10-K or the March 31, 10-Q. Also speaking this morning are Susan Riel, our Chair, President and Chief Executive Officer; Rohini Ramanujam, our Inspector of Elections; and Jane Cornett, our Corporate Secretary. I would now like to introduce Rohini, our Inspector of Elections. 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.

Thank you, Eric, and good morning, everybody. If you are expecting any technical difficulties, please call 1(866)-612-8937, and someone will be able to help you. Also, I'd like to briefly explain to everyone how they will be able to vote during today's meeting. If you are eligible to vote at today's meeting, you should see the words questions/chat listed towards the bottom of the Go To webinar panel on your screen. There is an arrow to the left of questions/chat in the panel. If the arrow is pointed to the right, and 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 yet voted on the 4 proposals listed in the company's proxy statement or if you have voted on the 4 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 don't want to change your vote, then there is nothing further that you need to do. Once you have voted, you can ex out of 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. Also, after our President and CEO's remarks and after the question-and-answer session, I'll provide the preliminary totals on each proposal. The final tabulation report will be provided to the Corporate Secretary for attention in the official records of the company and will be disclosed in a 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're here today for the following purposes: one, to elect 8 directors to serve until the 2026 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, 2025; three, to approve a nonbinding advisory resolution approving the compensation of the company's named executive officers; and four, to approve the Eagle Bancorp, Inc. 2025 Equity Incentive Plan. It is now my pleasure to introduce Eagle Bancorp's Chair, President and Chief Executive Officer, Susan Riel. Thank you.

Good morning, everyone. 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, all of our employees and our many customers for the support given to us over the past year. The past several years have presented significant challenges for our industry. Banks across the sector have navigated a range of headwinds driven by macroeconomic uncertainty, regulatory shifts and evolving market dynamics, all of which have affected our operations and financial performance. Eagle Bank 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 am confident in our abilities. To our valued employees, thank you for your hard work, dedication and resilience. Your unwavering commitment to our customers and to one another has been truly inspiring, and I'm proud to work alongside such talented and mission-driven team. To our shareholders, we remain steadfast in our focus on delivering long-term value through responsible growth, disciplined risk management and prudent capital allocation. Your continued support is deeply appreciated as we navigate this dynamic environment together. As we move to Slide 7, I'd like to take a moment to recognize our Board of Directors. We're grateful for their leadership, strategic guidance and ongoing commitment to the company. The following directors are joining us virtually today, and I want to thank them for being part of this meeting. Joining us remotely are Matt Brockwell, Steven Freidkin, Theresa LaPlaca, Leslie Ludwig, Pete Matthews, Jim Soltesz and Ben Soto. Also, I'd like to take this opportunity to introduce the individuals who serve as executive officers of the holding company, formerly referred to as Section 16 officers. These leaders are responsible for driving our strategic priorities and ensuring operational excellence across the organization. Eric Newell, Chief Financial Officer; Ryan Riel, Chief Real Estate Lending Officer; Kevin Geoghegan, Chief Credit Officer; Evelyn Lee, Chief Commercial and Industrial Lending Officer; and Paul Salzman, Chief Legal Officer. Other critical members of our executive management team include Charles Levingston, Bank Chief Financial Officer; and Hetal Desai, Chief Risk 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. Even in these trying times, we remain resilient and steadfast in these efforts. To elaborate, I am proud to say that we have experienced year-over-year growth in our total deposits and tangible book value per share. As of March 31, 2025, our total deposits reached $9.3 billion, marking an increase of over $775 million compared to the previous year. Over the same time frame, our tangible book value per share was $40.99, representing an increase of over 7%. Furthermore, our capital levels remain best-in-class compared to our peers. Our common equity Tier 1 ratio at March 31 stood at 14.61%. Based on December 31 capital ratios, our capital levels are in the top quartile of banks greater than $10 billion in total assets. Eagle has been different from most other banks from the very beginning. Our branch-light strategy gives us a disciplined lean cost structure, enabling us to generate more earnings for every dollar spent on overhead. This approach has given us a peer leading edge in cost efficiency, allowing us to reinvest in growth and deliver strong sustainable value to our shareholders. While maintaining a prudent approach to capital preservation, Eagle has also proactively capitalized the strength of the D.C. metro market by executing a variety of profitability and growth strategies. During prior earnings calls, we have outlined our commitment to growing and diversifying our franchise, deepening relationship-based deposits and enhancing operational efficiency. I'm pleased to report that we continue to execute on those strategic priorities and the results are beginning to show. In the first quarter of 2025, our commercial lending platform delivered encouraging results with C&I loans growing by $109.1 million or 4.3% since year-end. The recent additions to our C&I team have settled in well, and we're already seeing the benefits through stronger market penetration and relationship expansion. This growth enhances franchise value and reinforces our position as the go-to community bank in the D.C. Metro area. On the deposit side, we achieved year-over-year growth of $776 million, driven largely by time deposits through both our branch and digital channels. This underscores our ability to attract funding across platforms and strengthen overall liquidity. Many of these customers are new to Eagle Bank, and we continue to pursue cross-selling opportunities to deepen relationships and expand wallet share. Additionally, we completed a $200 million separate account BOLI transaction in the first quarter of 2025. This initiative not only supports future employee benefit obligations through a tax advantaged structure, but is also expected to generate additional noninterest income and reduce our effective tax rate, delivering incremental value to shareholders. We remain focused on evaluating strategies to reduce CRE concentration, increasing fee income through greater deposit product penetration and evolving Eagle Bank's market positioning as a full-service commercial bank. Overall, we believe the combination of a robust affluent local market, superior capitalization, strong cost discipline and focused growth strategies position us well to continue improving our results. As we look to the future, I am confident that 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 in the market.

[Operator Instructions] No questions submitted. So 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. Chair, I'm pleased to report the following results, which include the voting through 11:59 p.m. yesterday, May 14, 2025, and reported to us by the tabulator Alliance Advisors LLC. For Proposal 1, each of the 8 individuals nominated as directors received votes in favor of at least 95% of the votes cast. Therefore, they each are approved. For Proposal 2, the ratification of the appointment of Crowe LLP as the company's independent registered public accounting firm. The percentages of the votes cast were in favor, 99.32%; opposed, 0.52%; 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, 81.37%; opposed, 17.99%; abstained, 0.64%. This item is approved. For Proposal 4, the 2025 Eagle Bancorp, Inc. equity incentive plan were in favor, 86.78%; opposed 12.42%; abstained 0.80%. This item is approved. Thank you, Ms. Chair. This concludes my report.

Thanks, Rohini, and congratulations to those individuals elected as directors of Eagle Bancorp, Inc. This concludes our 2025 Annual Meeting of Shareholders. Thank you for attending. This meeting is Adjourned.