Eagle Bancorp, Inc. (NASDAQ:EGBN) Q1 2024 Earnings Call Transcript

So, I think we are pretty bespoke in terms of the solutions that we come up with and the circumstances that we are working through.

Christopher Marinac: And as you are getting this collateral cash, you are not seeing defaults occur. So, it’s not as if you are triggering people throwing keys at you. I mean that seems to be a predominant message this morning.

Jan Williams: No. That, I think is a situation that banks don’t really want to be in. We are not property managers. And we are probably not very good at it. It’s not our business. So, having the borrowers staying with a chance to return some investment to their investors, I think is a good solution for everyone.

Christopher Marinac: Great. And then last question for me, just has to do with kind of the existing reserve on office. I mean if you have maturities as far out as 2028, does the reserve kind of have some loss content on that loan, even though it’s not in the near-term maturity wall?

Jan Williams: Well, it does in terms of the reserve methodology it will have a quantitative and a qualitative reserve. The additional overlay that we have been adding to the reserve is really more focused on loans that are on special mention or substandard where our additional reserves that we have added based on a probability of default analysis and a loss given default. So, I think that’s just part of our general CECL methodology. Eric, do you want to…?

Eric Newell: No. You got it. Yes. I mean I guess just to put a button on it, we are agnostic as to the maturities in – of the office loans when we are looking at it from a qualitative perspective, and we are really focused on that internal risk rating for probability of default, loss given default.

Christopher Marinac: No, that’s a good point. Great. Thank you for all the background we had, greatly appreciate it.

Eric Newell: Thank you.

Jan Williams: Thank you.

Operator: Thank you. This concludes the question-and-answer session. I would now like to turn it back to Susan Riel, President and CEO for closing remarks.

Susan Riel: We appreciate your questions and you taking the time to join us on the call. We look forward to meeting with you again next quarter. Thank you.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.