Yahoo Finance Eagle Bancorp Inc (EGBN) Q1 2024 Earnings Call Transcript Highlights: Navigating Challenges ...
Net Loss: $338,000 for the quarter.
Earnings Per Share: Loss of $0.01 per diluted share.
Provision for Credit Losses: $35.2 million for the quarter.
Net Charge-offs: $21.6 million.
Allowance for Credit Losses: Increased to $99.7 million from $85.9 million.
ACL Coverage to Total Loans: Increased to 1.25% from 1.08%.
Pre-Provision Net Revenue: $38.3 million, relatively flat compared to $38.8 million in the previous quarter.
Net Interest Income: $74.7 million, up from $73 million.
Net Interest Margin: 2.43%, a decline of two basis points.
Total Deposits: Average balance increased by $190 million; year-over-year increase of $1 billion or 14%.
Noninterest Expense: $40.2 million, up by $2.9 million from the previous quarter.
Loan Growth: Increase of $26 million, driven by construction loans.
Common Equity Tier 1 Ratio: 13.8% as of March 31.
Tangible Common Equity Ratio: 10.03% at quarter end.
Release Date: April 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you address the size of the one large office loan where you had to get a reappraisal and the specific amount of net charge-offs you took on it this quarter? A: (Janice Williams - Senior Executive Vice President, Chief Credit Officer of the Bank) The loan was CAD48 million, and we took a partial charge-off of about 20 million on it due to a significant decline in property value over a 15-month period.
Q: Was the aforementioned office loan already in special mention or substandard at year end? A: (Janice Williams - Senior Executive Vice President, Chief Credit Officer of the Bank) Yes, it was.
Q: Do you have other large loans of similar size in other markets? A: (Janice Williams - Senior Executive Vice President, Chief Credit Officer of the Bank) Yes, there are larger loans in Montgomery County and downtown Bethesda. However, we haven't seen the same level of issues as in the central business district.
Q: How much of the drop in noninterest-bearing this quarter would you attribute to seasonality? A: (Eric Newell - Executive Vice President and Chief Financial Officer) The majority of the drop at the period end was due to seasonal tax payments by our customers.
Q: Can you provide a range of where you feel the reserve ratio could go by the end of 2024? A: (Janice Williams - Senior Executive Vice President, Chief Credit Officer of the Bank) We forecast the ACL coverage at the end of 2024 to be between 1.35% and 1.45% of total loans. We estimate charge-offs for the remainder of the year to be between 20 and $40 million.
Q: What strategies are you employing to manage modified loans, especially in the office portfolio? A: (Susan Riel - President, Chief Executive Officer, Director) We are using a full menu of options including modifications, requiring paydowns, and instituting cash flow sweeps. We aim to minimize risk to the bank while providing avenues for borrowers to stay engaged in their investments.
Q: How often are you obtaining additional collateral or cash in loan deals? A: (Susan Riel - President, Chief Executive Officer, Director) We have successfully implemented cash flow sweeps and accumulated funding in several large deals, ensuring we have reserves not only for payments but also for retenanting properties.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
