Eagle Bancorp Inc (EGBN) 2024 Q4 法說會逐字稿

Good day. And thank you for standing by. Welcome to the Eagle Bancorp Inc fourth quarter and year end 2024 earnings conference call.

再會。感謝您的支持。歡迎參加 Eagle Bancorp Inc 2024 年第四季和年終收益電話會議。

(Operator Instructions) Please be advised that today's conference is being recorded.

（操作員指示）請注意，今天的會議正在錄音。

I would now like to hand the conference over to your speaker today. Eric Newell, Chief Financial Officer of Eagle Bancorp. Please go ahead.

現在，我想將會議移交給今天的發言人。Eric Newell，Eagle Bancorp 財務長。請繼續。

Good morning. This is Eric Newell, Chief Financial Officer of Eagle Bancorp. Before we begin the presentation, I would like to remind everyone that some of the comments made during our call today are forward-looking statements.

早安.我是 Eagle Bancorp 的財務長 Eric Newell。在我們開始簡報之前，我想提醒大家，今天電話會議中發表的一些評論是前瞻性的陳述。

We cannot make any promises about future performance and caution you not to place undue reliance on these forward-looking statements.

我們無法對未來的表現做出任何承諾，並提醒您不要過度依賴這些前瞻性陳述。

Our form 10-K for the 2023 fiscal year and current reports on form eight K including the earnings presentation slides identify risk factors that could cause the company's actual results to differ materially from those reflected in any forward-looking statements made this morning, which speak only as of today.

我們的 2023 財年 10-K 表和 8K 表上的當前報告（包括收益簡報投影片）確定了一些風險因素，這些因素可能導致公司的實際結果與今天上午發表的任何前瞻性聲明中反映的結果存在重大差異，這些聲明僅代表今天的觀點。

Eagle Bancorp does not undertake to update any forward-looking statements as a result of new information or future events or developments unless required by law.

除非法律要求，否則 Eagle Bancorp 不承諾根據新資訊或未來事件或發展更新任何前瞻性聲明。

This morning's commentary will include non-GAAP financial information. The earnings release which is posted in the investor relations section of our website and filed with the SEC contains reconciliations of this information to the most directly comparable GAAP information.

今天早上的評論將包括非公認會計準則財務資訊。我們網站的投資者關係部分發布並向美國證券交易委員會提交的收益報告包含此資訊與最直接可比較的 GAAP 資訊的對帳。

Our periodic reports are available from the company online at our website or on the S ECs website. With me today is our President and CEO Susan Real Kevin Gahan and Jan Williams. I'd like to now turn it over to Susan.

我們的定期報告可從公司網站或美國證券交易委員會網站上線上取得。今天與我在一起的有我們的總裁兼執行長 Susan Real Kevin Gahan 和 Jan Williams。現在我想把它交給蘇珊。

Thank you, Eric. Good morning, everyone. Last night, we reported net income of $15.3 million for the quarter. This result reflects our our proactive approach to navigating valuation risk particularly through an increased provision for credit losses. As part of the effort, we moved a $74.9 million office loan to nonaccrual status due to a new appraisal. This loan continues to make contractual payments and the property's improving fundamentals gives us cautious optimism as we manage through this challenging environment.

謝謝你，埃里克。大家早安。昨晚，我們報告本季淨收入為 1530 萬美元。這一結果反映了我們積極主動地應對估值風險的方法，特別是透過增加信用損失準備金。作為這項努力的一部分，我們根據新的評估將 7,490 萬美元的辦公室貸款轉為不計息狀態。這筆貸款繼續按照合約支付，而房地產基本面的改善使我們在應對這一充滿挑戰的環境時保持謹慎樂觀的態度。

Our team remains focused on executing a disciplined strategy that positions Eagle Bank and our clients for long term success. Even amid evolving market dynamics, the enhanced loan disclosures introduced last quarter, reflect our commitment to transparency, helping stakeholders better understand the risk we see and how we are addressing them.

我們的團隊始終專注於執行嚴謹的策略，幫助 Eagle Bank 和我們的客戶獲得長期成功。即使在不斷變化的市場動態中，上季推出的加強貸款揭露也反映了我們對透明度的承諾，幫助利害關係人更好地了解我們看到的風險以及我們如何應對這些風險。

Looking back on 2024 we made significant progress toward building a foundation for sustainable growth. We strengthened our C&I team to deepen relationships and grow deposits and fee income. Key components of our profitability strategy. Fourth quarter, deposit growth of $all590.2 millionowed us to fully repay $1 billion in bank term funding program debt. A testament to our strength, the strength of our balance sheet and liquidity management.

回顧2024年，我們在建立永續成長基礎方面取得了重大進展。我們加強了我們的 C&I 團隊，以加深關係並增加存款和費用收入。我們的獲利策略的關鍵組成部分。第四季度，存款增加了5.902億美元，使我們能夠全額償還10億美元的銀行定期融資計畫債務。證明了我們的實力、資產負債表和流動性管理的實力。

As we look ahead, our geographic presence in the DMV, our role as a top local commercial lender and our deep, deeply rooted relationship. First values create a strong competitive advantage. These qualities enable us to adapt to change and deliver solutions that build trust and long term value for our clients. The entire team is energized by the progress we've made and the opportunities ahead with the groundwork laid in 2024. We are confident in our ability to execute on our strategic goals and deliver results for our shareholders. With that, I will turn things over to Jan.

展望未來，我們在 DMV 的地理影響力、我們作為本地頂級商業貸款機構的角色以及我們深厚而根深蒂固的關係。首要的價值觀創造了強大的競爭優勢。這些品質使我們能夠適應變化並提供解決方案，為客戶建立信任和長期價值。我們所取得的進步以及 2024 年奠定的基礎所帶來的未來機會讓整個團隊充滿活力。我們有信心實現我們的策略目標並為股東帶來成果。說完這些，我會把事情交給 Jan。

Thank you, Susan.

謝謝你，蘇珊。

Our asset quality metrics were impacted by the migration of an office loan from special mention to nonapproval substandard in the fourth quarter while the office loan was cured in December because of our extension to September 2025. A new appraisal was obtained. The new appraisal showed a 44% decline in value since the date of the last appraisal in May of 2022 the borrower is cash flowing and continues to be current on payment.

我們的資產品質指標受到了第四季度一筆辦公大樓貸款從關注類轉為不予批准類次級的影響，而由於我們延長至 2025 年 9 月，這筆辦公大樓貸款已於 12 月得到解決。獲得了新的評估。新的評估顯示，自 2022 年 5 月上次評估以來，價值下降了 44%，借款人現金流充足，並繼續按時付款。

There are indications of improvement in the market. We've seen increases in leasing activity and positive net absorption in the fourth quarter of 2024 cash flow from properties and transactions are occurring at higher valuations than recent appraisals. At the same time, appraisals remain inherently backward looking and are heavily dependent on historical comparables. So an appraisal today may not fully capture current market trends as more market transactions occur.

有跡象顯示市場有所改善。我們看到 2024 年第四季的租賃活動和淨吸收量增加，來自房地產和交易的現金流的淨吸收量為正，估值高於最近的評估。同時，評估本質上仍然是回顧性的，並且嚴重依賴歷史可比性。因此，隨著市場交易的增多，今天的評估可能無法完全反映當前的市場趨勢。

We would anticipate less volatility and appraisals. Given the outcome of the appraisal, we individually evaluated the loan and took a charge off of $9 million, more than two thirds of which was already contained in the reserve. The loan was placed on nonaccrual. We believe the loan remains adequately reserved at this time, the balance of the loan is $74.9 million.

我們預計波動性和評估將會減少。根據評估結果，我們對貸款進行了單獨評估，並扣除了 900 萬美元，其中三分之二以上已包含在準備金中。該筆貸款被列為不計息貸款。我們相信目前貸款仍有足夠的儲備，貸款餘額為 7,490 萬美元。

Since late 2020. We've been sweeping cash flow and building reserves for build out on new leases and payment reserves. We continue to sweep excess cash flow and continue building additional reserves. Details about the loan are included on page 23 and 24 of our earnings debt net charge offs totaled $9.5 million in the fourth quarter resulting in 2024 charge offs of $38.6 million or 48 basis points. During the quarter, we upgraded two separate office loans that were previously special mention and substandard to pass for one of those loans. We worked with the borrower to secure a three year extension with three principal curtailments, putting the bank in a better position and allowing the borrower to continue exploring redevelopment of the property to multifamily.

自 2020 年底以來。我們一直在清理現金流並建立儲備金，以用於新租約和付款儲備金的建設。我們繼續清除多餘的現金流並繼續建立額外的儲備。有關貸款的詳細資訊包含在我們收益的第 23 頁和第 24 頁，第四季的債務淨沖銷總額為 950 萬美元，導致 2024 年的沖銷金額為 3860 萬美元或 48 個基點。在本季度，我們將兩筆先前被評為特別關注和不合格的辦公大樓貸款升級為其中一筆貸款。我們與借款人合作，獲得了為期三年的延期，其中包括三項本金削減，這使銀行處於更有利的地位，並允許借款人繼續探索將房產重新開發為多戶住宅。

On the other. We received a curtailment that resulted in a reduced loan to value of less than 70%. We also saw an upgrade in the quarter of a $46.3 million hotel loan from special mention to pass rated with improved operations.

另一方面。我們受到了削減，導致貸款價值減少不到 70%。我們也看到本季 4,630 萬美元的飯店貸款評級從特別提及提升至通過，並且營運狀況有所改善。

A multifamily loan of $30 million was upgraded from substandard to pass as a result of additional cash reserves sufficient to support a preplanned hud exit two C&I loans totaling $26.5 million were upgraded from substandard to special mention due to direct assignment of contract proceeds more than sufficient to repay the debt other downgrades. In addition to the office loan of $74.9 million in the quarter included a $36.8 million owner occupied industrial commercial real estate property, substandard loans increased $35.1 million during the fourth quarter to end at $426.4 million. Special mention decreased $120.2 million during the quarter to end at $244.8 million.

由於額外的現金儲備足以支持預先計劃的 HUD 退出，一筆 3000 萬美元的多戶家庭貸款從次級升級為通過；兩筆總額為 2650 萬美元的 C&I 貸款從次級升級為特別關注，原因是直接分配的合約收益足以償還其他降級的債務。除了本季 7,490 萬美元的辦公室貸款（包括 3,680 萬美元的自住工業商業房地產）外，次級貸款在第四季度增加了 3,510 萬美元，至 4.264 億美元。本季特別提名金額減少了 1.202 億美元，至 2.448 億美元。

This represents overall positive migration of our criticized and classified loans for the fourth quarter. We note in our disclosure on page 20 of our earnings presentation that 69% of our classified and criticized loans are performing following the migration of the aforementioned office loan to nonaccrual. During the fourth quarter. Nonperforming loans were $208.7 million at December 31st, an increase of $74.3 million from September 30th driven by the office loan. Nonperforming assets to total assets were 1.9%. An increase of 68 basis points from the prior quarter loans 30 to 89 days past due were $22 million at December 31st, decreasing from $56.3 million at September 30th. Eric.

這表明我們在第四季度受到批評和分類的貸款總體上出現了積極的轉變。我們在收益報告第 20 頁的揭露中指出，在上述辦公室貸款轉為不計息貸款後，69% 的分類和批評貸款均表現良好。在第四季。截至 12 月 31 日，不良貸款為 2.087 億美元，較 9 月 30 日增加 7,430 萬美元，主要原因是辦公室貸款。不良資產佔總資產的比率為1.9%。與上一季相比，逾期 30 至 89 天的貸款增加了 68 個基點，截至 12 月 31 日為 2,200 萬美元，低於 9 月 30 日的 5,630 萬美元。埃里克。

Thanks Jen.

謝謝 Jen。

We reported net income for the quarter following $15.3 million or $0.50 per diluted share. This compares to the prior quarter of $21.8 million or $0.72 per diluted share. Pretax income declined $6.9 million to $19.8 million. In the fourth quarter.

我們報告本季淨收入為 1,530 萬美元，即每股 0.50 美元。相比之下，上一季的利潤為 2,180 萬美元，即每股攤薄收益 0.72 美元。稅前收入下降 690 萬美元至 1,980 萬美元。在第四季。

The decline in net interest income, higher provision for credit losses, lower fee income and higher noninterest expenses contributed to the pretax decline.

淨利息收入下降、信用損失準備金增加、費用收入下降、非利息支出增加導致稅前利潤下降。

Taxes were largely unchanged from the fourth quarter despite lower pretax income due to return to provision adjustment and uncertain tax benefit representing $2.2 million of tax expense in the quarter. This was partially offset by a $1.7 million tax benefit from an investment tax credit purchased during the quarter. Our capital position remains strong.

儘管由於返回撥備調整和不確定的稅收優惠導致稅前收入下降，本季的稅收支出為 220 萬美元，但稅收與第四季度相比基本沒有變化。這部分被本季購買的投資稅收抵免所帶來的 170 萬美元稅收優惠所抵消。我們的資本狀況依然強勁。

Tier one leverage ratio decreased three basis points to 10.74%. As average assets increased slightly more than tier one capital quarter over quarter, common equity, tier one ratio increased 33 basis points to 14.63%.

一級槓桿率下降3個基點至10.74%。由於平均資產季增幅略高於一級資本，普通股權益、一級資本比率增加 33 個基點至 14.63%。

Tangible common equity ratio increased 16 basis points to 11.02% at quarter. End book value per share decreased a penny to $40.60 per share. As unrealized losses increased due to higher market rates at December 31 compared to the prior quarter. End on balance sheet and contingent liquidity also remains strong.

本季有形普通股權益比率增加 16 個基點至 11.02%。每股期末帳面價值下降一美分至每股 40.60 美元。由於12月31日的市場利率較上一季上升，導致未實現損失增加。資產負債表期末和或有流動性也保持強勁。

Average deposits have grown $585.1 million from a year ago at December 31 2023. A significant amount of this annual growth was achieved through our digital channel.

截至 2023 年 12 月 31 日，平均存款較去年同期成長了 5.851 億美元。這一年度成長很大一部分是透過我們的數位管道實現的。

Our one way broker deposits increased $234 million from the comparable 2023 period end due to contractual nonmaturity brokered funding funding relationships.

由於合約非到期經紀融資關係，我們的單向經紀存款較 2023 年同期末增加了 2.34 億美元。

We reduce brokered cds throughout the year and expect to resize our contractual nonmaturity brokered relationships in 2025 growth in deposits in the second half of 2024 facilitated our ability to fully pay off early. Our $1 billion of bank term funding program borrowings that were outstanding at September 30th insured deposits total 76% of our total deposits at the end of the quarter available liquidity from the federal home loan bank, federal reserve discount, window, cash and unencumbered securities totaled $4.6 billion net interest income before provision totaled totaled $70.8 million in the fourth quarter, decreasing from $71.8 million in the third quarter.

我們全年減少經紀 CDS，並預計在 2025 年調整我們的合約非到期經紀關係，2024 年下半年存款的成長促進了我們提前全額還款的能力。截至 9 月 30 日，我們的 10 億美元銀行定期融資計畫借款未償還，保險存款佔本季末總存款的 76%，來自聯邦住房貸款銀行、聯邦儲備貼現、窗口、現金和無抵押證券的可用流動資金總額為 46 億美元，撥備前淨利息收入在第四季度總計為 7,080 萬美元，低於第三季的 7180 萬美元。

Net interest income declined because of 369 165,000 reversal from interest income due to the migration to non accrual of the previously discussed office loan nim declined eight basis points from the third quarter to 2.29%.

淨利息收入下降是由於先前討論的辦公室貸款轉移至非應計項目導致的利息收入沖銷 369 165,000 ，淨利息收入較第三季度下降了 8 個基點，至 2.29%。

Generally, we saw interest income and interest expense decline proportionately to one another.

總體而言，我們看到利息收入和利息支出呈比例下降。

The shift in mix of average earning assets with a higher proportion of interest earning deposits was the largest contributor to the decline in them.

平均收益資產結構的變化以及利息存款比例的提高是導致其下降的最大原因。

Of the $162.6 million of funded loan originations in the quarter, we had a weighted average rate of 7.68%.

在本季 1.626 億美元的貸款發放中，我們的加權平均利率為 7.68%。

This compares to $91.2 million of funded loan originations at a weighted average rate of 7.11% in the third quarter.

相較之下，第三季的貸款發放總額為 9,120 萬美元，加權平均利率為 7.11%。

Management has reduced rates paid on non maturity deposits due to declining interest rates following the decisions by the FOMC to ease the policy rate by 25 basis points each in November and December, we reduced rates on for nonmature deposits by a cumulative 50 basis points.

由於利率下降，管理層降低了非定期存款的利率。在聯邦公開市場委員會決定於11月和12月將政策利率降低25個基點之後，我們累計將非定期存款利率降低了50個基點。

This follows our actions taken to reduce nonmature deposit rates from the FOMC easing earlier in the fall, noninterest income decreased as the third quarter. Items such as the sale of MSRS income from SBIC investments as well as income from back to back swap transactions did not reoccur in the fourth quarter in early January management added to its bank owned life insurance policies which will increase the run rate of cash surrender value growth and related income starting in the first quarter, noninterest expense to $44.5 million increasing from $43.6 million in the previous quarter.

繼今年秋季早些時候聯邦公開市場委員會 (FOMC) 放鬆貨幣政策並降低非到期存款利率之後，第三季非利息收入有所下降。出售 SBIC 投資產生的 MSRS 收入以及背對背掉期交易收入等項目在 1 月初第四季度沒有再次出現，管理層增加了銀行擁有的人壽保險單，這將提高現金退保價值增長和相關收入的運行率，從第一季度開始，非利息支出從上一季的 4,360 萬美元增加到 4,450 萬美元。

Salaries and benefits increased due to a true up on severance for a departing employee and a higher compensation expense due to forfeitures of sharebased compensation in the third quarter which did not repeat in the fourth quarter.

薪資和福利增加，原因是離職員工的遣散費實際增加，以及第三季因沒收股權激勵而導致的薪資費用增加，而第四季並未出現這種情況。

Marketing and advertising declined because of lower spend on our digital channel, legal accounting and professional expenses declined and were offset by higher FD expenses in our quarterly investor debt release along with earnings. We updated our view on 2025. Our thoughts on period and growth of loans next year remain between two and 8% though the slide shows average growth earning asset growth is flat as we continue to take cash flows from our investment portfolio and reinvest in loans with our budgeting process completed management has a more precise view of the net interest margin.

行銷和廣告支出下降的原因是我們在數位管道上的支出減少，法律會計和專業費用下降，但被我們季度投資者債務釋放和收益中的 FD 費用增加所抵消。我們更新了對2025年的看法。我們對明年貸款期限和成長率的想法仍然在 2% 到 8% 之間，儘管幻燈片顯示平均成長收益資產成長率持平，因為我們繼續從投資組合中提取現金流並將其再投資於貸款，隨著預算流程的完成，管理層對淨息差有了更精確的了解。

As noted last quarter, there is an expected benefit from this repositioning of the investment portfolio and loan mix that is expected to enhance spread growing relationship deposits and reducing and optimizing the use of wholesale funding are also expected to contribute to spread. I'll turn it over to Kevin to discuss our ACL.

正如上個季度所指出的，投資組合和貸款組合的重新定位預計將帶來益處，即提高利差；增加關係存款以及減少和優化批發融資的使用預計也將有助於擴大利差。我將把話題轉交給凱文 (Kevin) 來討論我們的 ACL。

Thank you, Eric, as Jane mentioned, net charge offs increased $4.2 million from the third quarter to $9.5 million. We will continue to evaluate the sufficiency of our qualitative reserves to address market uncertainties. However, we currently expect that any future reserve increases will stem from specific reserves for individually assessed loans. Should there be a significant shift in economic expectations not accounted for in our qualitative reserves that would be reflected in the inputs we use to inform our model and that could result in increases in reserve reserves.

謝謝你，艾瑞克，正如簡所提到的，淨沖銷額從第三季增加了 420 萬美元，達到 950 萬美元。我們將繼續評估我們的定性儲備是否足以應對市場的不確定性。然而，我們目前預計未來任何準備金的增加都將源自於單獨評估貸款的專案準備金。如果經濟預期發生重大轉變而我們的定性儲備沒有考慮到這一點，那麼這將反映在我們用於告知模型的輸入中，並可能導致儲備增加。

Last quarter, we mentioned the future reserve bill if any would be driven by specific reserves from invi individually evaluated loans. This is in fact the driver of the allowance for credit losses during the quarter.

上個季度，我們提到，未來的準備金法案（如果有的話）將由來自單獨評估貸款的特定準備金推動。這實際上是本季信貸損失準備金的驅動因素。

In addition to specific reserves associated with the office loan discussed previously, we increased our specific reserves for an assisted living relationship, which is number three on our nonaccrual loan listing on page 23 of our investor deck.

除了前面討論過的與辦公室貸款相關的專項儲備之外，我們還增加了針對輔助生活關係的專項儲備，這是我們投資者演示文稿第 23 頁非應計貸款清單中的第三項。

The allowance for credit losses increased to $114 million at 1,231 representing coverage of total loans at 1.44% an increase of four bits from the prior quarter. The AC L coverage to, to performing office loans totals 3.81% at 1,231 down from 4.55% at 930 due to the reserves associated with the office loan following it into the individually evaluated specific reserves. Finally, we continue to believe that our reserves are adequate.

信貸損失準備金增加至 1.14 億美元，達到 1,231 億美元，佔總貸款覆蓋率 1.44%，較上一季增加 4 位。AC L 對正常辦公大樓貸款的覆蓋率總計為 3.81%，至 1,231，低於 930 時的 4.55%，原因是與辦公大樓貸款相關的準備金已進入單獨評估的專案準備金。最後，我們仍然相信我們的儲備是充足的。

I'll turn it over to Susan for a short wrap up.

我將把這個發言權交給蘇珊，讓她做一個簡單的總結。

Thanks Kevin.

謝謝凱文。

The team completed foundational actions last year to support our strategic goals growing and diversifying building relationship deposits and focusing on operational excellence. While it will take time to reach our our operational goals, we are beginning to see early successes that will drive results. At the same time, we remain focused on addressing asset quality concerns and mitigating valuation risk. As office loans approach maturity as a community focused bank, we take pride in being deeply connected to the communities. We serve this commitment sets us apart and positions Eagle Bank to thrive amid evolving market dynamics in the DMV.

團隊去年完成了基礎行動，以支持我們的策略目標，即發展和多樣化建立關係存款並專注於卓越營運。儘管實現我們的營運目標還需要時間，但我們已開始看到將推動成果的早期成功。同時，我們仍然致力於解決資產品質問題和降低估值風險。作為一家以社區為中心的銀行，隨著辦公室貸款即將到期，我們為與社區的緊密聯繫而感到自豪。我們履行這一承諾，使我們脫穎而出，並使 Eagle Bank 在 DMV 不斷變化的市場動態中蓬勃發展。

In closing, I want to thank our dedicated employees. Your hard work makes Eagle Bank a success and ensures we continue to deliver value to our customers and stakeholders. With that, we will now open things up for questions.

最後，我要感謝我們敬業的員工。您的辛勤工作使 Eagle Bank 取得了成功，並確保我們繼續為客戶和利害關係人提供價值。現在我們可以開始提問了。

(Operator Instructions) Justin Crowley with Piper Sandler.

（操作員指示）賈斯汀·克勞利 (Justin Crowley) 和派珀·桑德勒 (Piper Sandler)。

Hey, good morning everyone. I just want to hit on the office loan that got downgraded in the quarter. You know, obviously, reappraisal volatility has been an issue overall, but I maybe thought some of these class a buildings particularly in areas like Montgomery County were a bit more inflated from that risk. You know, does this situation change at all? How you're thinking about that sort of risk as you look across the portfolio outside what's in DC, central business district. And especially as we move through the year and get closer to some of these larger loans with 2026 maturities.

嘿，大家早安。我只是想談談本季評級被下調的辦公室貸款。你知道，顯然，重新評估的波動一直是一個總體問題，但我可能認為其中一些甲級建築，特別是在蒙哥馬利縣等地區，由於這種風險，其價格膨脹得有點厲害。你知道嗎，這種情況有改變嗎？當您審視華盛頓特區中央商務區以外的投資組合時，您是如何看待這種風險的。尤其是隨著時間的推移，我們越來越接近一些 2026 年到期的大額貸款。

Yeah, I think we are and have been focused on all office, whether suburban or central business district and the severity of the decline in face values is much more in the central business district and is ameliorated to a certain extent in the suburbs that said different appraisers have different perspective on appropriate cap rates, leasing rates, discount rates.

是的，我認為我們一直關注的是所有辦公室，無論是郊區還是中央商務區，面值下降的嚴重程度在中央商務區更為嚴重，而在郊區則得到一定程度的改善，不同的評估師對適當的資本化率、租賃率、折扣率有不同的看法。

It's for me personally, I was surprised to see a discount rate of 11% in a class, a suburban market with increased leasing activity. On the other hand, we can see that overall the time to stabilization has been reduced to the current leasing activity. You're looking at this particular property of a stabilized value of about 100 and $10 million So, that's in 2027.

就我個人而言，我很驚訝看到在租賃活動增加的郊區市場中折扣率達到 11％。另一方面，我們可以看到，總體而言，目前的租賃活動穩定時間已經縮短。您正在查看的這處特定房產的穩定價值約為 1 億至 1,000 萬美元，因此，這是在 2027 年。

So I think you're going to see changes as the pace of leasing increases or decreases in this particular class of building. I have cautious optimism that we are going to be in a position to continue. If you took a look at, there's one other similar property that you may have thought of. That's an office property of similar size that is also in Montgomery County and that is on our TOP25 list that we provided in our deck. That's number two on that list.

因此我認為，隨著這類建築的租賃速度增加或減少，你會看到變化。我謹慎樂觀地認為我們能夠繼續保持這種狀態。如果您看一下，您可能會想到另一個類似的屬性。這是一棟類似規模的辦公大樓，也位於蒙哥馬利縣，並且位於我們在簡報中提供的 TOP25 名單上。這是列表中第二個。

And that particular property was appraised in February of 2023. And compared to the May of 2022 appraisal on the property that we just placed into nonperforming status, there was a 44% drop in valuation the appraisal from May 22 until January of 2025 if you kind of extrapolate from there, and this would just be a ballpark swag and took 44% decline in appraised value on the office property that comes up for reappraisal in 2026. You'd be looking at a potential $3 million charge up.

該特定房產是在 2023 年 2 月進行估價的。與我們剛剛置於不良狀態的房產在 2022 年 5 月的估價相比，如果從那裡推斷，從 5 月 22 日到 2025 年 1 月的估價下降了 44%，這只是一個大概的估計，2026 年重新估價的辦公樓估價下降了 44%。您可能會面臨 300 萬美元的潛在費用。

So I don't think it's a staggering number. You may have different discounts that you're looking at and you may feel that different C grades apply and that, matter of judgment. But I think we're on top of these and continuing to work with borrowers. One of the things that really helped us on the property that became nonperforming was the fact that we had been sleeping cash flow for a significant period of time.

所以我不認為這是一個驚人的數字。您可能正在考慮不同的折扣，並且您可能認為適用不同的 C 等級，這取決於判斷。但我認為我們已經掌握了這些技巧並繼續與借款人合作。對於我們那些表現不佳的資產，有一件事對我們確實有幫助，那就是我們的現金流在相當長的時間內處於休眠狀態。

And that assisted us both in the collateral valuation and also in the ability to continue forward and fund any T I work that is necessary in connection with valueadd leasing. So I know there is T I work in progress right now on a particular new lease. I have cau cautious optimism on that front. Did that answer your question?

這不僅有助於我們進行抵押品估價，而且還幫助我們繼續進行與增值租賃相關的任何必要的 T I 工作並提供資金。所以我知道我現在正在進行一項關於特定新租約的工作。我對此持謹慎樂觀的態度。這回答了你的問題嗎？

Yeah. No, that's helpful. And just for, I guess just a little further detail, you noted just some of the improving fundamentals on that property that moved to nonaccrual this quarter. Can you unpack that just a little more just in terms of what the leasing activity activities look like or occupancy levels? And you know, maybe how that squares with the other loan that's currently on special mention that you had called out.

是的。不，這很有幫助。我想再詳細說一下，您注意到該房產的一些基本面有所改善，本季已轉為非應計項目。您能否從租賃活動或入住率的角度進一步解釋一下這個問題？您知道，也許這與您目前特別提到的其他貸款相符。

Well, I can tell you that the leasing activity has been fairly consistent over the last couple of years in that it's managed to sustain occupancy in a difficult market, but it's tipped up right now. And what we're seeing are reductions in concessions in addition to a more rapid lease up period to get stabilization. I think you've you know, at one point maybe two years ago in the summer, we were looking at $100 and $80 a foot T I allowances and not an eyebrow was raised at that. And now we're down around $95 a foot. So I think effective gross rents are increasing and we are also seeing more activity both in this property and in very similar proximate properties. So I have optimism on that.

嗯，我可以告訴你，過去幾年的租賃活動一直相當穩定，因為它在困難的市場中成功維持了入住率，但現在卻有所上升。我們看到，為了穩定局勢，除了縮短租賃期之外，還減少了優惠。我想你知道，大約兩年前的夏天，我們正在考慮每英尺 100 美元和 80 美元的補貼，但沒有人對此感到驚訝。現在每英尺價格下跌了約 95 美元。因此，我認為有效總租金正在增加，而且我們也看到該房產以及非常相似的鄰近房產的活動都在增加。因此我對此抱持樂觀態度。

Okay. Got it. And then I guess, somewhat relatedly, with the new administration in place. Now there have been some headlines in recent days describing, the potential for some large scale sales of federal government office space and canceling of leases, et cetera, which would of course, likely take some time to play out. But are you able to provide any detail on direct exposure to government office and then, I know it's early but just any preliminary thoughts on, the impact moves out of the GS A could potentially have on your book.

好的。知道了。然後我想，這在某種程度上與新政府的上任有關。最近幾天有一些頭條新聞描述了聯邦政府辦公空間大規模出售和取消租約等的可能性，當然，這可能需要一些時間才能實現。但是，您能否提供有關直接接觸政府辦公室的詳細資訊？然後，我知道現在還為時過早，但只是初步考慮一下，退出 GS A 可能會對您的帳簿產生什麼影響。

We have very little exposure to GSA. I think those properties that had large G A leases were for the most part in the C MD F market. Those are bigger properties. And at the time, I think GS A lease was thought to be as good as you could get on leasing that certainly has changed. At least the chatter around it has changed at this point, I do think it pulls two ways it appears the administration believes that the private sector can provide occupancy to the government less expensively than the government is providing it to itself and do a better job.

我們對 GSA 的接觸很少。我認為那些擁有大量 G A 租約的房產大部分位於 C MD F 市場。那些是更大的財產。當時，我認為 GS A 租賃被認為是租賃中最好的選擇，而這種情況肯定已經改變了。至少目前圍繞它的討論已經發生了變化，我確實認為它有兩種方式，政府似乎認為私營部門可以以比政府為自己提供的成本更低的成本為政府提供住房，而且做得更好。

I don't think it's a huge surprise that this administration would want to privatize that activity. So I would expect they would be trying to sell some properties some in this area, some across the country. I do think that means there's going to be more leasing as a result of the concurrent directive for federal employees to go back to the office, there has to be some place for them to go.

我認為本屆政府想要將這項活動私有化並不令人感到意外。因此我預計他們會嘗試出售一些該地區的房產或全國各地的房產。我確實認為，這意味著由於同時發出要求聯邦僱員返回辦公室的指令，租賃需求將會增加，必須有地方供他們去。

So there could be for properties that have significant floor plates available that are in the B plus A minus area, that might be something that could see an uptick with the federal government leasing. I do think the properties that they're contemplating selling appear to be B minus C plus properties and it will take a significant period. I think for those properties to be rehabbed and brought back to the market and just one person's thoughts on it.

因此，對於那些位於 B 加 A 減區域且擁有大量可用樓面面積的房產而言，聯邦政府租賃可能會出現上漲。我確實認為他們正在考慮出售的房產似乎是 B 減 C 以上的房產，而且這將需要相當長的時間。我認為對這些房產進行修復並重新投放市場只是一個人的想法。

Okay. That's helpful. And then, shifting gears a little, there's obviously a larger in market competitor who's involved in the you know, merger transaction right now. You know, to what extent has it already created some opportunity for you folks or you know, how do you think any dislocation could play out from your standpoint, whether that's new business or, or opportunity to add talent.

好的。這很有幫助。然後，稍微轉換話題，顯然現在有更大的市場競爭對手參與合併交易。你知道，它在多大程度上已經為你們創造了一些機會，或者你知道，從你的角度來看，你認為任何錯位會帶來什麼後果，無論是新業務還是增加人才的機會。

You, Susan, you want to take.

你，蘇珊，你想帶走。

We think it will bring opportunities for us. So we'll be the largest, community banker in this area. And we think that will be mean opportunities for us. Of course, there will be opportunities with people and you know, there are some shared customers that we already have, with them. So, we're, we're looking at it as a positive for us, Eric, you want to add anything.

我們認為這將為我們帶來機會。因此我們將成為該地區最大的社區銀行。我們認為這對我們來說將是一個重大機會。當然，我們會有與人合作的機會，你知道，我們已經與他們有一些共同的客戶。所以，我們認為這對我們來說是積極的，埃里克，你想添加什麼嗎？

There is a team that has mobilized to analyze where we share customers. If there's opportunities for us to get greater market or a greater wallet share of that shared customer, we think that there will be opportunities around milestones in that transaction when there's a legal close, when there's a conversion and we hope to be able to share our value proposition and deepen the relationships that we share, share customers with them as well as acquire new customers.

有一個團隊已經動員起來，分析我們在哪裡共享客戶。如果我們有機會獲得更大的市場或更大的共享客戶份額，我們認為，當法律結束、發生轉換時，交易中就會有機會實現里程碑，我們希望能夠分享我們的價值主張，加深我們之間的共享關係，與他們共享客戶，並獲得新客戶。

Okay, great. I appreciate the time this morning. Thank you.

好的，太好了。我很感激今天早上所花的時間。謝謝。

Katherine Miller with KVW.

KVW 的凱瑟琳·米勒。

Thanks. Good morning.

謝謝。早安.

Morning.

早晨。

Maybe just one back on credit as we think about your outlook for the reserve and, and you know, I know it's kind of hard to put a range on reserve bills and, and the charge off. But as you can see here today and you think about your potential exposure, would, would you expect to continue to see reserve bills throughout the course of 25 or do you think we're at a place today? It certainly was good to see less inflows of, of you know, substandard and special mission credits, which makes me feel like maybe we're at a, at a peak in our allowance. Just curious, your thoughts on that. Thank you.

當我們考慮你對儲備金的前景時，也許只是一次信用貸款，而且你知道，我知道很難對儲備金賬單和沖銷金額進行範圍設定。但是，正如您今天在這裡看到的，考慮到您的潛在風險，您是否預計在 25 天期間會繼續看到儲備票據，或者您認為我們今天處於一個位置？看到不合格和特殊任務信用流入減少確實是件好事，這讓我感覺我們的津貼可能正處於頂峰。只是好奇，你對此的看法。謝謝。

Yeah, in our budgeting process, we do not currently anticipate any reserve bill beyond what Kevin's comments talked about in the sense that if there's a an idiosyncratic issue with a credit that requires us to individually evaluate that loan there, there could be noise there. But we do, we feel that the office overlay that is a qualitative approach that we're addressing concerns as we see it for office, we feel that that is adequate at this point.

是的，在我們的預算過程中，我們目前不預期任何超出凱文評論所談論的儲備法案，因為如果信貸存在特殊問題，需要我們單獨評估該貸款，那麼可能會有噪音。但我們確實認為，辦公室覆蓋是一種定性方法，我們正在解決我們對辦公室所看到的問題，我們認為這在目前已經足夠了。

I believe last call, I put a range out on credit costs. I think it was 25 to 50 basis points for 2025. And we continue to expect that to be the range.

我相信最後一次，我對信用成本設定了一個範圍。我認為到 2025 年這個數字將會是 25 到 50 個基點。我們繼續預期該範圍。

And that's provisioning versus charge also, I guess maybe they're kind of in the same range.

這也是配置與收費的問題，我想也許它們處於同一範圍內。

Without the without.

無有。

Yeah, I look, I look at it as kind of the same thing because without a reserve build, you're kind of you're you're going in and out.

是的，我看，我認為這是同一件事，因為沒有儲備建設，你就像是進進出出。

Makes sense.

有道理。

But you know, thinking about what we achieved in '24. Actually in the last 18 months ending December 31, '24 I think at June 30th, our, our reserve was approximately 100 basis points to loans and now we're at 144 basis points to loans.

但你知道，想想我們在24年所取得的成就。實際上，在截至 24 年 12 月 31 日的過去 18 個月中，我認為在 6 月 30 日，我們的準備金與貸款的比率約為 100 個基點，而現在我們的準備金與貸款的比率為 144 個基點。

We've achieved a lot of build over that 18 months.

在過去的 18 個月裡，我們取得了許多成就。

And based on the information that we have today, we believe that that is adequate.

根據我們今天掌握的信息，我們認為這已經足夠了。

Okay, great.

好的，太好了。

And then on the outlook for the balance sheet, there's a big build in the balance sheet from the excess liquidity and deposit growth this quarter. And so I thought it was interesting that your guy for average earning assets was flat. I would think maybe you might see a little bit of the decline is that, as we just kind of some of that excess liquidity to work, but still we're coming from such a larger average earning asset base at the end of the year. Just curious your thoughts on that. As we kind of think about excess liquidity kind of into the bond book and into loan growth.

從資產負債表的前景來看，由於本季流動性過剩和存款成長，資產負債表大幅增加。因此，我認為有趣的是，你提到的平均收益資產保持不變。我想你可能會看到一點點下降，因為我們只是將一些過剩流動性投入運作，但到年底我們仍然來自如此大的平均收益資產基數。只是好奇你對此的想法。我們認為過剩流動性會進入債券帳簿和貸款成長。

We're not currently expecting any growth in the bond portfolio. And in fact, our goal is to get the percentage of the bond portfolio to assets into the 10s. I think Charles was saying around 15% and we're above that and that is one of the reasons why in our budgeting process, you can see that there was an improvement in our outlook on them for 2025 versus what we previously had disclosed in last quarter, you have about 385 million of cash flows that are currently earning us around 2% that are expected to go into the loan portfolio or even cash. In this case.

我們目前預期債券投資組合不會有任何成長。事實上，我們的目標是將債券投資組合佔資產的比例提高到 10%。我認為查爾斯說的是 15% 左右，而我們高於這個數字，這就是為什麼在我們的預算過程中，您可以看到我們對 2025 年的展望與我們上個季度披露的數字相比有所改善，目前大約有 3.85 億現金流為我們帶來 2% 左右的收益，預計這些現金將進入貸款組合甚至現金。在這種情況下。

I mean, that's not really what our goal is. We want to go into the loan portfolio which materially contributes to an increase in spread the comment about the average balance sheet. It is true that we had some excess cash on throughout the fourth quarter. We do have expectations that that would be utilized, better utilized into the loan portfolio as well in 2025.

我的意思是，這不是我們的真正目標。我們希望深入研究貸款組合，這對擴大平均資產負債表的評論範圍有實質的貢獻。我們在整個第四季度確實有一些剩餘現金。我們確實期望這些資金能在 2025 年得到利用，並且更能運用到貸款組合中。

And I've noticed that you've made a couple of new hires in the C&I line of business, any commentary there and just thoughts on your loan growth, how much of that's coming in C&I versus CRE.

我注意到你們在商業和工業 (C&I) 業務線上招募了幾名新員工，你們對此有何評論？對於你們的貸款成長，你們認為其中有多少來自商業和工業 (C&I) 業務，有多少來自商業房地產 (CRE) 業務？

We're, we're already seeing positive results from the changes that we've made in the C&I area with bringing Evelyn lee in as the head of the C&I group and with the strategic hires that we have made so far, we're seeing increased activity in that area in a very, very positive way.

我們已經看到了在商業和工業領域所做的變革的積極成果，包括聘請伊芙琳·李 (Evelyn Lee) 擔任商業和工業集團的負責人，以及我們迄今為止所做的戰略性聘用，我們看到該領域的活動以非常非常積極的方式增加。

In terms of growth, Catherine. Yeah, our CRE team is is seeing payoffs in the multi family space particularly, we saw some in the fourth quarter. I think we're expecting more in the first quarter. And I believe Ryan made a comment about some expected payoffs in the second quarter as well. And what that will allow us to do is we can opt to, depending on the pipelines, we can opt to work on any types of activity that the CRE might be seeing. And then also use some of that capacity to in terms of cash flows coming back to us and redeploy that in our C&I.

從成長方面來說，凱瑟琳。是的，我們的 CRE 團隊看到了多戶型住宅的回報，尤其是在第四季。我認為我們預計第一季會有更多成長。我相信瑞安也對第二季的一些預期收益發表了評論。這樣我們就可以根據管道選擇處理 CRE 可能看到的任何類型的活動。然後還可以使用其中的部分能力，將現金流轉回給我們，並將其重新部署到我們的 C&I 中。

Portfolio. We're really looking at our CRE concentration coming down too as a result of that, those payoffs.Which is a big focus of ours is reducing our CRE concentration ratio.

資料夾。我們確實在關注 CRE 集中度的下降，這也是這些回報的結果。我們的一個重點是降低 CRE 集中度比率。

Yes, for sure, for sure. Okay, great. Thank you very much. Appreciate it.

是的，當然，當然。好的，太好了。非常感謝。非常感謝。

Thanks, Katherine.

謝謝，凱瑟琳。

Thank you. I'm showing no further questions at this time. I would now like to turn it back to President and CEO Susan Riel for closing remarks.

謝謝。我目前沒有其他問題。現在我想請總裁兼執行長蘇珊·裡爾 (Susan Riel) 致最後總結。

I'd like to thank everyone for your questions and for you taking the time to join us today. We look forward to speaking with you again next quarter. Have a great day.

我想感謝大家的提問，也感謝大家今天抽空參加我們的節目。我們期待下個季度再次與您交談。祝你有美好的一天。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。