EGBN - Earnings call transcript Q4 2017

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Operator

Good day, ladies and gentlemen, and welcome to the Eagle Bancorp Fourth Quarter 2017 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Charles Levingston, Chief Financial Officer. Please go ahead.

Charles Levingston

Thank you. Good morning. Chief of Levingston, Bancorp. Charles is Financial Eagle Officer This

be like presentation, everyone made Before may the would during forward-looking to call comments we begin the I remind statements. of that this considered some

XX-K results Form and certain to on factors differ Form quarterly X-K cause could on XX-Q for year, current fiscal Our our XXXX the reports that Form reports identify the company's actual statements morning. as those materially result developments. update any The this company in made to or does projected information from any new statements forward-looking a of events or undertake not forward-looking future

growth available any Our while performance periodic that guidance. would earnings, is it reports markets online the not are are website. sheet to or like from we website think the establish good, the I and SEC with policy on the continued our margin company's that you or to balance our remind or company for prospects

Ron CEO like and Paul, to Chairman I Now, introduce would the Bancorp. Eagle of

Ron Paul

morning, year New regarding the Good and for morning. call the quarter fourth call Charles. Happy for the XXXX. earnings like full Thank in and Year. to you joining you our results everybody, this Thanks, of welcome to us I'd

Jan morning. Williams to the addition us on this In Charles, with call is

of We both I'm and discuss year in our and of all activities quarter successful. for financial which very for the will XXXX, be extremely questions full later the results available were call. pleased to the fourth

the the will a on will my not operating DTA earnings required Jobs of our earnings, and and tax complicated, fundamental for describing in of adjustment the ignore know, DTA performance performance. enactment truer the late by our picture asset while adjustment, Cuts periods give you Tax as of focus impact both which Therefore, deferred I As but the known December adjustment, comments is Act.

that questions We will X, short previous take and any Accordingly, that responded call. December we statements. the during to not online, this by matter XXXX seller stand have regarding anonymous post surfaced Internet we our already

are this morning speak about to exceptional the here company's We financial performance.

we year, record earnings. For both of operating produced levels the quarter the and

we operating is the dating for of the net of XXth quarter, quarter XXXX. operating record This net consecutive which fourth a For increase increasing earned quarter back to is million over operating of income our the XX% $XX.X fourth income, XXXX. earnings

are have a the quarter first earnings fourth through earnings per million XXXX of The operating to XXXX X% also of We excited million. the over comprised operating broken for increase third $XX.X time the operating of level quarter for quarter. $XX the of earnings

million. leverage, our quarter GAAP indicated earnings the fourth increase over XXXX the of of last press for discrete fully share included the a critical a a charge our strong and to size all ultimately million margin diluted focus fully of be one-time the will in earnings revenue the per the than earnings or line of quarter and release operating monitor growth in growth, control $X.XX reached quarter. night, for one earnings rather operating always X% were again change At diluted attributable a for and quarter As basis, organic and ratio the earnings in for operating the are interest our net quarter superior increase basis, we we strong On improvements earnings on $X.XX in quarter performance which of pre-provisioned of measure share income, continued quality. $X.XX panel, the fourth consistent for diluted XXXX from share for per once sheet record quarter-to-quarter. the consistent were On This XXXX. GAAP per including basis per balanced adjustment. in an share $X.XX, loan of per indices, a XX% of already the an for an and $XX.X operating our DTA EagleBank, of level XXXX. earnings issued strong the $XX.X The basis, over These discipline were impact of On in the earnings diluted manage pretax result the GAAP of asset share. third fourth our growth top the dials balance and

operating the Operating diluted and For million. per earnings GAAP the diluted full the $X.XX a represents for total XX% XXXX, share XXXX earnings share million per XXXX. achieved year of fully an were for $X.XX basis over XX% income the earnings increase an XXXX. of the we year a of were increase of operating operating diluted basis per basis, $X.XX, full $XXX.X fully On XXXX. This earnings over record share for $XX.X of for on

As XXXX we tax of impact law a reduction be real rate all beyond. forward for and effective know, the the going will in the tax new

or As Charles earnings. make call, states on at guidance forward-looking each any statements establish don't any beginning the of we earnings future generally

I case, the it be company is form our the this that in the new, three the earned $XX.X charge in million based of XXXX. We pleased quarters to that to we shareholders the However, on federal that of back we estimate lower took appropriate say that flow the DTA adjustment rate. are benefit the will first within with and think will tax

will drop historic to for XX%. about and rate tax just that from effective going our XXXX expect levels forward, We

XXXX on we XXXX of were equity increased fourth Total XX% our in of profitability for for over quarter for of quality. improved return margin line XXXX XX.XX% the income loan assets are the for pleased entire XXXX, growth, noninterest an XXXX, revenue quarter strong fourth the of year interest increases driven a earnings XX.XX% the net fourth increasing The for expenses top the of revenue XXXX. basis of return full continued high common asset primarily the along and average while and year basis of leverage by year operating of were For X.XX% earnings the quarter by operating and by and X%. and continued with average as the up an noninterest levels operating evidenced X.X% growth, on continued both XXXX with and fueled very of favorable the quality and only

For as fourth fourth no was XX%, quarter noninterest compared increase Loan and fourth as quarter trend total had quarter the XXXX, of rose our the for during pretax pre-provision XXXX. over the the very fourth quarter, the while over grew pre-provision quarter fourth XX% expenses the by to of continue showed by income. revenue of we of quarter XXXX, Pretax anticipated. growth increasing we strong income

outstanding comprising rate. a or $XXX full XXXX million XX% was increased million of During loans X.X%. for the we growth the by $XXX quarter, Loan year growth

with short CRE continue maintain to pricing our in in we addition, in the strategy to our line nature pleased our pricing portfolio. portfolio income-producing the XXXX of fourth the that and quarter in fourth loans loan of of X.XX% during were C&I disciplined our loan In positions criteria. year, and loan to X.XX% fourth CRE of and our in general to third loan X.XX% construction targets due rise structure The in of rates very the a meet strategic with to quarter are note construction our the is which high-quality yield intermediate to and loans, and over improved last and short-term as loans, along quarter portfolio compared year. largest experience the portfolio last combination We improved demand term for loans. increases the The quarter on in and yield

been approved closed, the loans During of satisfied. higher and which draws previously to have did have fund loans. and These fourth been the quarter, contributions which are we levels equity on project construction the for

have to these fourth additional the anticipated, the loan we pricing As loan quarter. did balances yield the on improved for contribute

existing is our to loans nature remember ground-up We are that and to our D.C. not be are projects, It the in but of maintaining Washington, and standards important rehab maturities. or building our underwriting conversion generally pricing condo tend for short-term of an construction

have saw approach ratios. CRE the we remain loan that and level earlier some concentration the our to We of the managing with year. reflected in portfolio quarter in the factors the of comfortable same composition the ADC trends the Deposit the in our of business and of maintained loan fourth side disciplined

quarter Therefore, is in some is these do trend there in growth of steady a we they when XXXX, particular December some expenses as relationships, law. developed certain down and fluctuations we a third than caused saw important would liquidity lumpiness quarter fluctuations in to customer thus new general decreases in million Average deferring the higher flows, we other balanced time our point who feel of from see from but accelerate This we or larger XX to by over into it's at relationships to drew time. from levels the in profits look relationships XXXX their and for actually in normal by rather September was the some a over in transaction deposit point-to-point XX. X% the XXXX, the deposits balances benefit increased time. While $XXX tax customers average quarter have fourth decrease to

replace the maintain line our our wholesale deposits. used to FHLB funds net control margin. we all a of in cost interest more strategy our superior with advances of factors, expensive late execution and in Additionally, These quarter, continued ALCO to

fourth was from The X.XX% our have fourth Net of XX% contribute for Our third basis of X.XX%, point was year quarter continuing improved deposit XXXX X margin quarter in past XXXX. the the for attractive. mix net XX% down of the funds XXXX. the also X.XX%, and quarter for increased year deposits, point over of full which and million total XXXX $XXX only to DDA from margin balances comprised was X.XX% from the only of year cost remain basis down X interest of interest cost and or the funds. to favorable

in The portfolio well full Metropolitan most competition. the the average area We year of pricing. terms are competitive of in XXX in the loan Washington the yield country were stiff our XXXX. of nonbank on The among loan remains maintaining and deposit face for yields bank the

to pleased are points we points cost have to only to of fourth basis funds year increased, for that, average basis deposit that able were rates XX while an quarter. of and XX the the manage Given note we for our

XXXX. over of industry the last had Largest Noninterest tax the the ago. group noninterest related investment focus is million, a increase credit increase deposits on XXXX. XX% revenue income as quarter highlight saw being from from XX% maintained quarter made NIM a above income quarter years XX% bank was as DDAs contributions quarter deposits our at in of levels. third to benefit the generating a also were fourth continue We average average fourth during a X.XX%, a in over to and fourth XX% $X.X category growth increase year the nonrecurring items to several of At the significantly we DDA and peer and was XXXX level in to a of

The a was first the new investment. tax market of adjustment to $X.X a credit item million value

second interest gain from was to a related transitional investments credit. in a These development partnership of tax neighborhoods in estate after The enjoying separate unique Washington, reported projects real historic gain $XXX,XXX the D.C. sale two a

proud We investments. to involved are gain the projects in with our have these and on been pleased

as three securities. successful period, on a the FHA had the securitization, Multifamily-backed of generated servicing group and they FHA fourth and Our $XXX,XXX transactions quarter, during sale Mae closed the origination, Ginnie

that $XXX,XXX the about in SBA XXXX. and months million quarter-to-quarter. are revenue of the FHA XXXX. and revenue year, $XXX,XXX gains The lumpy was continues pleased after the for sale from place group became in saw excited for this startup fourth Total expenses, very for in group also SBA quarter opportunities to of are to We be The recognizing XXXX. commitments in fourth the the as from from we loans compared the vary business and quarter, fully preparation of line currently revenue and operational the XX $X.X

economy profitability quarter regional continues still our mortgage $X.X division. gain rising business fourth a rate the sale Regarding gross in upon overall the residential in residential lending of area, of in even product. feel market consistent from million Based The quality as on our the reasonable size quarter million mortgage level compared of with the D.C. metro last that to XXXX. residential we declined $X.X The to environment the loans of in the Washington achieve originators, in growth generate steady, can line. the a roster area we of to

that impact is makes to spending economy. overall current is in remain and minimal. XXXX government range same federal about business It local the trends the the that for will X%, XX% of in has administration regional only with forecast the rate been the of line economy that important up U.S. Our remember on growth of

jobs. new has year, XX,XXX private In sector government over the has grown fact, of net jobs, the employment X,XXX past the reduced as federal over by this level

For increase annual was was followed services, health the employment past for XX% business sector in professional education by in and the the The over year, above growth and year average area. the region care. largest

in the We increases at the in wharf also the due saw ball the Harbor development area sector area significant park to district. National further hospitality and in Maryland,

suburban For Northern time several years, the in we market compared on Virginia. EagleBank's very be Maryland in position and growth to as first greater to job D.C. strong. the saw continues

loan that to submarkets We measured ranking demand report. most area that see FDIC makes the in the bank headquartered continue our up across metropolitan various largest We the retained recent as in as varies the community Washington by deposits region.

We banking have a X% market, in philosophy the neutral position in share maintain tremendous of interest to rate a bank us we Consolidation provide to in the for sensitivity. only customers. growth. and remain local We have regard disciplined to relatively largest the potential continues and consistent continued continue the Xth practices and but have still to quality ALCO personnel our region, a arena entire so attract in opportunities

Our ALCO balanced. positioning remains well

variable Excluding loans sale, loans we ago, held position sensitive. is or are our XX% consistent slightly of percentage loans. a of is rate asset so in still loan adjustable year variable portfolio our rate The with for

reprices the rates. floors, within repricing days with the already above portfolio with loan are yielding loans As XX, the XX% we fixed-rate rates, and matures floor the including loans, total, in XX% portfolio rate basis In of reprices years of only XXXX, and first months, anticipate XX and in portfolio is within of next five Of of of portfolio our the their portfolio that December floor XX% duration point XX% three XX X% another XX% within or and increase the year. years. matures within another the pure the steep XX

decreased strong the At XX XXXX. as XX to at XXXX, improved XX, of XX December points quality December points basis and quarter condition. as XX, on of assets, December fourth to the the already a basis of percentage points from NPAs, bank For asset its total XXXX, XX, compared basis

For the in XXXX. points a of compared loans fourth fourth charge-offs to of as quarter, the quarter the net basis average company net XX recognized recovery of

losses points the lowest the of basis are net of XX-year annual improved full loans, total levels of of was were points basis charge-offs of allowance The XXXX. X.XX% XXXX, September For At December X.XX% of XXXX history year X of the points, at the we basis average at charge-offs and XX, level for have X.XX% from achieved at at charge-offs year just XX, XXXX loans, XX, EagleBank. in loan X for year for XXXX, December XXXX. the the X slightly decreased from among the

provision of growth XX.XX% during of for the The upon XX.XX% XXX%, the of that was from fourth consistently the The in level XXXX at total December for and we for XXXX XXXX. loans and based adequately XXXX is portfolio period the quarter nonperforming at growth the the basis Our efficiency improved coverage million applied assets reserved. fourth in nonperforming the $X with of the ratio XXXX. practices each to have $X.X XX, of was points loan and reserve and third of loan other XXXX portfolio, a the and has increase analysis in end XX of quarter during fourth the risk expense Due XX.XX%, fourth been improvement overall the methodology was are excellent computed component improve. at The the continues the factors. quarter quarter of in of we compared decline allowance factors. and nonperforming consistent environmental the of as various asset the period in quality believe our loans in of ratio fourth million to The quarter over and quarter loans to from provision

We in and of operating the was continue to ratio can disciplined XX.XX%, continue the expenses. on XXXX level The ratio is focus a leverage, indicator of noninterest the our full probably of management range good we efficiency year achieve. for that including

level focus run have we While operating expense not do rate. management, on we a continuously and leverage

and expenses certain saw we marketing, like processing XXXX, from vary During consulting data quarter-to-quarter.

we cost in IT we staffing quality monitor levels, and carefully operational to improve our continue our also While occupancy and to information security. invest systems

We continue to strategically positions. revenue-producing for recruit

improve and Tier have capital. always tangible common we ratio X current December we'll and Equity for infrastructure growth of opportunities to XX.XX% Due XXXX, pleased We XX.XX%. the At with now $X.X equity regulatory to new earlier, and but in law of market billion the I'd has and beyond significantly at capital successful bank. how consistent we very to We Washington In ratio company Common XX.XX% the ratio as in earnings. over the risk-based how XXXX, about XXXX I to will during of should a only mentioned try level benefit area. X% ratio have proper like a the share the say size capital of of continue are productivity, capital total to maintain still of The XX, our we $X.X have strengthened support higher billion, our summary, profitability, excited of we XXXX. position see improve as the of and the we tax XXXX. are Even Metropolitan our a

and concludes our balance in We our diligent to positioned our well XX-year remarks, are pleased to strength for we strategy. That at be execution build market our take my continue the relationships Accordingly, the commitment to knowledge questions time. this continue our community track of and through sheet. presence, our record, and success any formal of deep of

Operator

Our O'Neill. with from first is question Instructions] Whitman [Operator Sandler Casey

open. Your line is now

Casey Whitman

morning. Good

Charles Levingston

Casey. morning, Good

Ron Paul

Casey. morning, Good

Casey Whitman

quarter. Nice

from just there improvement expense for come guess, I on there you're to consolidations further branch ratio improvement, there is the guess, considering, do side down are now? to on efficiency revenue side? level are the improve. it further curious, think - to avenues or drive it just is I continues the the so First, still you going Are

Charles Levingston

that to Casey, some anomaly, an I the additional forward. of - at we have quarter, throughout that's expect, could been I look of able and line had of to additional more repeat had ratio as number bit you and what the think efficiency But as we an closer of drove down. year-over-year course that think look our hold to the a the on indicator some mid-XXs annualized probably going necessarily at headcount the fourth expenses didn't year that

Casey Whitman

are $XX And could ways need Helpful, I kind in few over the this build to what but for assets. around out years? your long-term then of you any expenses Okay. can thanks. thoughts know us you organically, institution to we're give what insight as crossing from next billion crossing that

Ron Paul

that Casey, are the on we've money over areas XX past of a there lot been months. spending

example, of analyzing. lot spending awful improve an that IT something As ERM years and is the area that entire on, we've initiated people lot we're bringing money upon of and spending lot We've continuing our an enhanced in significantly program two also about a certainly to ago that. a of time

is $XX to So then once But there are the big cross to be add. building will mark you relates as don't working infrastructure we that, certain expenses seen to we get remaining it to want will I to be that. a do clearly, number, that. might what billion the to as and Charles, know Congress what towards obviously,

Charles Levingston

and out, this, it ramping that $XX how going really, at there's of go And do look on associated are the peel and with still the said, on absorbing costs, too, by several depending at triggered ways with associated that onion Ron to are look the of billion we shakes dollars that well way threshold. those then as may the $XX - relieved the in way that legislation to billion, look ways. we we tried into and there But to are this, threshold. be little costs to different but $XX billion the trigger the at those this be up and we is the we've Yes, back

Ron Paul

spends in task a months We're that. about that have ago threshold. coalition about lot we of on X We that very talking that a together active talks billion the time put $XX focusing about mid-bank and force that's

good So, in we're $X be. to pretty billion. them And do I prudent matter $XX billion entrenched just $XX no will some things of the requirements or whether what it's billion, are as say,

very are those So on. very, active that things we're

Casey Whitman

you're And to the related guess Okay. just of elevated Can on there. for more were then just first, to upcoming in loans bucket? color quarter? then, tax timing you some now, off And charge the that was a us I loans give charge-offs the question a in Jan, this the decision reform? those just anyway if curious, nonaccrual

Jan Williams

the foreclosure. you Casey, specific loan, reforms. was no, see timing not established a We decision really and decline the for in level tax that's to a one the already on reserve. the marginal was related upcoming average of had why a It reserve particular

XXX. think from went I we to XXX

It's matter So timing of that land provisioned advance. a charge-off for development. was well just in our residential on

Casey Whitman

Great. someone Thanks on. else hop questions. I’ll for let my taking

Operator

is Our Stephens from Nicholas next question Austin with Inc.

is line open. now Your

Austin Nicholas

guys, my thank call. Hi taking for

increase my questions, that out looking up. it's have you answered guess, Casey and line? I the think of that employees of expanding now and terms growing in most geographically of can the business see or you at business production that maybe you revenue FHA do that really, but now maybe scale ramped what adding I How just business

Charles Levingston

still pipeline really FHA, strong will. kind FHA there you the on into of is our opportunities. Again, discussed our think extension if value remain that fit past, way chain, We The business the model does are as we've in of Sure. an robust. they that

as can thread the throughout during And So, a that's put these do financing processing, FHA we are for pipeline of robust to see process the pretty we on. added through XXXX. having cut their - the continual bridge XXXX, are on think we hands process we just that value laborious franchise extensive, continued - - just financing, extent of a and people's the hold that

Ron Paul

efficiency, we an imagine we can the customers we to that, to awful see of as how pricing we be have just One awful to some big to that lot CRE that were continue the other traction of we us by advantages for able that we've you there's of been believe our perform get able more to prove the the the the Also, is portfolio, part from remembering have. nature side transactions we've which have that of will that risk which opportunities such to we buildings short-term key in that closed, be under recent increase the is analysis that we side of process renovation be these believe the credit a FHA will well. have, fairly that this. able as - and An into a waiting quick flipped a

Austin Nicholas

Got up it. makes that. then And That sense. on just maybe following

Given inning on there as of properties D.C, of then, and And think there? the and are you continued What Eagle is kind kind a there we the opportunity the there in? maybe of in focus years really evolution about more rehab development for your renovation, what's of inner Or which is opportunity ground-up needs wheelhouse focus of to continued on be construction? D.C.? kind type come to point at inner

Ron Paul

Yes.

& the the building as as very feel a strongly, say, this is, things is is blocks projects a they're taking risk is It the opportunity Main Main. from locations, that's love and are they're that much have of brick, bones not we just couple the solid units, building. I the like a of an might perspective building existing many amenities ground-up this but have, the that away of anything, and credit them they're of larger-sized extraordinary, One great of we that

add $XX,XXX, gives they able to renovation I let's and are into a so we as be building, larger-sized move family. move the say, to with units in flexibility unit start that emphasize, to per talked to units, a of $XX,XXX, being the roommates, those continuing previously type also about that in. might millennial, of it might able So, we're want as put to They might might

that of So, do buildings XX-year-old to FHA flip completed. is opportunity does well really believe with there's XX, program a give renovation opportunity, do And that we there's that that enormous an us into would an again, that the after renovation. that extremely lot

Austin Nicholas

next maybe looks? any final how new we and sense. expect over just one or of that any come a consolidation should It question then, lot Or any makes that changes the Right. to on And online branches year?

Ron Paul

larger, the at to side any much juggling, believe not to smaller. We're the We side. some But any of IT substance. really No. the closing so deposits branching looking opening looking at really really in We're nothing as branches. opposed

Austin Nicholas

Understand. have. that’s Well, your for Thanks questions I time. all the

Operator

with next Joe Capital Merion Our question Gladue Group. from is

line now Your open. is

Joe Gladue

morning. Good

Ron Paul

Good morning, Joe.

Jan Williams

morning, Joe. Good

Joe Gladue

just outlook first, forward guess, for I'd in additional the December addition those? in and you rate think about do net think do to deposit going cut in hikes your be margin to there'll talk Where like I you betas the interest change much three - rate XXXX - with hike.

Charles Levingston

Joe, I we hikes rate would that feel those the pressure here to of say that were starting seen certainly we've recently.

- opportunities going earn the bit perk little a on a bit to to I more convexity little as with associated are hikes rate deposits. start is more likely think subsequent a there increase individuals up and to get that recognize

monitor continue you DDAs. strong going cost, funding of very saw to we're So, the to our bases

As help in cost to our continue to going the Ron XX% his comments, they're mentioned that fund. of

cost monitor need to of and to. appropriately we our funds point funding to the the So, adjust needs funding we'll our meet manage to them cost to rates manage continue and

Joe Gladue

there the quarter, And high level in loan Okay. on guess, had the a, believe been payoffs. side, usually third of I I loan

out Just normalized did regards in a quarter where fourth to of wondering, sort payoffs did or of stand normal that level, to sort with even level? the just more a

Ron Paul

talk loan, anything, we question, X-plus that we we about all a that, had of more in about that we the all we efficiency whether anticipated talk trends loan is and there certainly, lumpiness. we percent not quarter growth quarter-to-quarter. talk and comments, that quarter, a Yes, the need about whether an important we third more we indicated the deposit, great lumpiness in certainly the that Joe, With without fourth question, the side, spend whether time that's to is such focusing on saying

still is that, we double-digit low something over a again, quarter-by-quarter. over And growth So, be that a not loan believe we'll very trend, that to that's maintain. able

Joe Gladue

more tax guess, capital with last guess, the generating guys forward. would considerably question. going you I new And rate, be I

on Just capital are wondering capital to deployment. thoughts thoughts what shareholders? Any on your returning

Charles Levingston

mean, bit we've think equity I with the XX% a doing approach I an there. a We're operating capital average on high wait-and-see basis. the there's return little here bit in common with had on of still Joe, good the

that monitor - disrupt be continue uncertainty we're as really in are look stuffing on think and going with doing what as be to extra I pressures the some going what So, going banks may rates be around we competitive these of of loans they're think the pockets. some deposits at is to the to can cash, to other that we

that's where head's my kind of right now. So at

Ron Paul

as appreciation. Joe, And important these again, very be that such an base follow-up part be that certainly, at an is sleep going night. continued incredibly the the stock to that to through return not because assets answer hopefully, capital but And lets might we again, results strongly of that having everybody feel that, of of have just we type capital, strong a

Joe Gladue

you. Alright, That’s it from thank me.

Operator

And Dave FIG our from next question comes Bishop Partners. with

Your now line is open.

Dave Bishop

gentlemen. morning good Yes,

Just deposits related Act. this been first quarter in Tax there might any that anything it to Or the had that pay will be first question. planning to quarter looks or choose funding ratio two some loan for a flows related funding up XXX%? of some Reform to the a I the expect inflow fourth of inflated have forward like and that you there some like guess, up to just then sort expectations flows think some maybe deposit quarter, terms sounded strategy necessary in of maybe Do to So, maybe in deposit need of XXXX rate? there on that the artificially growth to line tax little see noise for following of Obviously, an do growth? close the growth? it you maybe maybe pulled impact bit questions. reduce inflows quarter to secondarily, And was loan-to-deposit

Charles Levingston

of. terms of were don't that could was before enacted impact in think Dave, pipeline being planning think that law and tax the in close I lot any there's enacted. or additional tax A to lending, those loans of the I there

Dave? a your result there. shoe remind some question, that on So, I'm again, sorry, was think the of other But - me I leather

Dave Bishop

Yes.

deposit it obviously… sounds of resumption And anticipating flows. like Just

Charles Levingston

realistic the Loan ratio the to Yes, loan ratio. deposit us. deposit XXXs low a for in think I expectation is seeing

we out loan-to-deposit that in high what I was saw a our anomaly. of - comments anticipated, little we year little higher ratio think XXX%. end than here, towards the mentioned a that you deposit was pointed an the and had of we XXX% again, saw Having as bit we XXX%,

Ron Paul

- that And has we NIM it's though, if with our that in alternative is lenders that item relationships And are in Obviously, is we're blend the able in say that we ability expanding fact deposits with our But cost talking existing I'm sorry, - is the always to energy the of see for. been that, in of have pleased the that and that forth XXs, our where in of sources have ability now so the and very and about so existing impressive XX% on as know that we've the the to high we been again, effort be have, which that, based we've add to most that, our ALCO we're high continued I a result been to funds, our of very CDOs DDAs. could I significant. funds previous of on wonderful. are lenders just, now that quarters, putting borrowers. been looking

Charles Levingston

the said, bit expected be to going considering deposits, those indicative more little as it's we've certainly, probably a average period. we've as oppose what of And to

Dave Bishop

that hear guess XXXX, Got to right it XX% back rate I then that expecting the And Did an somewhere it. I tax you're around is correct? turning for discussion. preamble effective

Charles Levingston

Yes. - no items Dave, apportionment, reform where elements state rate, longer certain tax deductible, consider rate and our rate. end other with the up, of the the certain of somewhere corporate our look tax some XX% around at we we are the when again, new estimating we tax

Dave Bishop

just back quarter it. about Got at so. making I that And to maybe XQ you I'm it. I apples-to-apples if know somewhere comparisons, was come sound front Does I the an noisy. or have XX.X% tax in XXXX, the know around right? number of an looking effective don't fourth rate you, sure have

Charles Levingston

when about That's some we of right. noise, Yes, for correct. the correct that's

Dave Bishop

banks, just in some market couple pullback greater CRE getting market? in there've maybe it, in deals. And larger-size the of I question, follow-up some the Is quarters, case a it. still past of the bit - Ron, Got larger little from the that power the been on the got pricing of maybe some know and D.C. one better there

Ron Paul

larger only a seeing us as opportunity but does the we the a definitely the really giving from having at period. - leg working we're the flavor pullback period I short you're the really have a Yes, the the up of focus that structure expiration project because get continue being and is a think, we maturities, flexibility on do managing to banks. with But that when exactly in it these you deals, also give of pretty not in the have a of area, shorter-term very short time, is portfolio XX-month us monitoring to on how

to able banks looked against, be as the many smaller So, have position we're for the that wonderful And to compete which enough in of some of of we're large you and larger-size at something you opportunity deals, be able opportunities. the in enough and nimble that we a seeing benefits if say, is to stack that those that, we're us. deals not both to do size

Dave Bishop

for it. Got color. Thank Great. you the

Ron Paul

you. Thank

Operator

KBW. Our next question with from is Catherine Mealor

line Your open. now is

Catherine Mealor

Good morning. Thanks.

Ron Paul

Good morning Catherine.

Jan Williams

Good morning Catherine.

Catherine Mealor

just this were one growth margin. year, my questions like deposit the higher loan-to-deposit you of manage can feels Most I ratio. It just Maybe will be should ask asked. on up the follow the then

you side, sense. to see think where But rate you're makes probably higher? your we'll betas, of able the and higher that, environment balance we against couple be with deposit how this basically to as start how portfolio do a think margins hikes higher yields the about quickly So, in fairly an deposit keep loan about, to how totally offset asset year, And which having reprice that betas the will flat? to

Charles Levingston

Yes.

of or rate. variable So, as our adjustable the nature Catherine, we've the is earlier and of loan got noted portfolio XX% our we book that certainly, fact short

loans out point those loans were their point, I'd Additionally, are - that were few previously, that we've this under through floors. we're of had floors. quite floors At those XX% - a

base in yield. the more past has an little I think it been going bit as in responsive, a see perhaps asset that's So, terms of to you're loan than

Catherine Mealor

Alright, helpful. That makes very great sense. Thanks, quarter.

Ron Paul

Thank you.

Charles Levingston

you, Thank Catherine.

Operator

to Paul, I'm no the showing now turn call Chairman remarks. questions. like I and back And to CEO Ron Thank further would you. for further any

Ron Paul

speaking Thank day. call, Have participating Thank to you, you in a the at and very looking the great everybody. for we're next quarter. again to you much, again, forward

Operator

you in gentlemen, participating thank conference. and Ladies today's for

great disconnect. have a all may day. You Everyone,

Eagle Bancorp (EGBN) 19 Jan 182017 Q4 Earnings call transcript