Good day, ladies and gentlemen, and welcome to the Eagle Bancorp First Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions]. Please note today’s conference is being recorded. I would now like to hand the conference over to Jim Langmead, Chief Financial Officer. Please go ahead.

Thank you, and good morning, everyone. Before we begin the presentation, I’d like to remind you that some of the comments made during this call may be considered forward-looking statements. Our Form 10-K for the 2014 fiscal year, our quarterly reports on Form 10-Q and current reports on Forms 8-K identify certain factors that could cause the company’s actual results to differ materially from those projected in any forward-looking statements made this morning. The company does not undertake to update any forward-looking statements as a result of new information or future events or developments. Our periodic reports are available from the company or online on the company’s website or the SEC website. I’d also like to remind you that while we think that our prospects for continued growth and performance are good, it is our policy not to establish with the markets any earnings, margin or balance sheet guidance. Now, I’d like to introduce Ron Paul, the Chairman and Chief Executive Officer of Eagle Bancorp.

Thank you, Jim. I’d like to welcome all of you to our earnings call for the first quarter of 2015. We appreciate you calling in to join us this morning and your continued interest. In addition to Jim Langmead, also on the call this morning is our Chief Credit Officer Jan Williams. As usual Jan and Jim will be available later in the call for questions. We are very pleased to announce that for the first quarter Eagle Bank has once again achieved a record level of quarterly net income which was $19.4 million and which is a 55% increase over $12.5 million in the first quarter of 2014 and a 32% increase over the net income for the fourth quarter of 2014. This continuity of increasing record earnings is the result of our ability to consistently grow revenue and earning assets while controlling expenses and enhancing the company’s operating leverage. Top line revenue, which consists of net-interest income and non-interest income, increased 41% over the first quarter of 2014 and on a linked quarter basis we achieved 9% growth in revenue over the period ending December 31, 2014. The results from the first quarter also demonstrate the consistency of high quality performance for key measures such as net interest margin, credit quality and the efficiency ratio. Fully diluted earnings per share was $0.61 for the first quarter of 2015 which represented a 30% increase over diluted earnings share of $0.47 in the first quarter of 2014. The EPS for the first quarter did reflect the impact of the new shares issued in the common equity offering in March of 2015 which enhanced our capital position. As a result of much higher average equity, the return on average common equity was 13.24% for the first quarter of 2015 still favorable…

Thank you. [Operator Instructions]. Our first question comes from the line of Catherine Mealor from KBW.

Hi good morning everyone and congrats on a great quarter.

Thanks, Catherine.

Thanks, Catherine.

Can you give us any color into the margin and if their value accretion -- if your value accretion impacted the margin at all this quarter?

Catherine, the amortization of the fair value for the first quarter of the year was around $1.2 million to $1.3 million. My estimate is that it impacted the earning asset yields by about 10 basis points in the quarter.

Okay. And this all in the loan -- on loan.

Right. Really in the loan portfolio that was really where the most fair value there wasn't significant impacts in the deposit area. On which day that another factor that actually and that benefits the margin as we've said. But another factor that pulls it down is the mix of the indirect loan portfolio that we acquired from Virginia Heritage. That portfolio is not as high yielding as the CRE and the C&I portfolio. So when you put those factors together, I think that there is some offset to the accretion that's coming in. But overall I'd say the impact on our earning asset yields were let's call it 8 basis points to 10 basis points.

How do you think about that going forward? How quickly that should come down or do you think you should keep that level for then a year or so?

It's being amortized on a loan by loan basis. We’ve got it in the system and its based on the actual maturities of those loans and if there is refinancing that goes on there's an acceleration just as with the -- if we had a discounted loan we originated. So overall the portfolio that we acquired had a average maturity a little longer than Eagle's, Eagle's was around 44 months, 45 months VHP was close to 50 months. So we think that amortization is going to be one-off over a four, five year average life. And because they didn't have a substantial amount of long-term fixed rate loans as we did not they managed and they did not take any straight risk just as we have not done that.

Okay. It should be fairly steady over the next couple of quarters then.

I would say that's right. The hiccups you get have to do with prepayments that you don't anticipate. But generally I would expect that we would say let's call it $300,000, $400,000 a month of amortization.

Thank you. Our next question comes from the line of Scott Valentin from FBR Capital Markets.

Just regard to the gain on sold loans. I know you guys talked about those two components SBA and mortgage. I don't see the mortgage is pretty large this quarter and is consistent across the industry. But the mix also seem to emphasize refi, which I guess come with rates where they are that would be normal. Just wondering how should we think about that gain going forward, will origination volumes and sale volumes come down, if rates go up as the mix goes back to favor more purchase activity?

Well, Scott, I would say that we are at the peer point of the year where the activity continues to be pretty strong the spring and into the summer just seasonally for that business. We had a lot of loans locked in the month of March. So I would say that at least for the second quarter of the year our activity continues to look real strong but who knows what's going to happen with interest rates we know there is a high degree of sensitivity there with this product. But we're ahead of our plan. What happened in the first quarter was a little bit of a surprise to us. We originated $285 million with the loans. But right now the pipeline continues to look very strong I think the second quarter beyond that I don't want to comment.

Scott, the other thing to remember is that we continue to expand our relationship with the builders. So well we had a very slow first quarter because of weather. We hope that will continue to get strong. Secondly that the key to the -- in our opinion on the entire residential real estate group is making sure of the level of variable versus fixed cost. So that's something that I mentioned in the comments and we really do believe that would be strong part of balancing a slowdown or an increase.

Okay. That's true. And then, Ron, you mentioned I guess the basic growth I think you mentioned moderated in DC metro area and it's definitely several occupied submarket but also referenced maybe increased activity from CRE and C&I. I'm just wondering is that more seasonal increased activity or we actually starting to see signs may be of a improving kind of underlying economy in this area?

Scott, we just see our market share picking up dramatically because of again the concentration that we have in North Virginia which we believe to be just a huge opportunity for us. The boutique type projects that we've always been able to concentrate on and focus on and be able to succeed in. And obviously as we increase in our size the ability to do larger size deals is something that we have that opportunity on again cautiously but something that we continue to be able to capitalize on versus the smaller banks and be able to do that certainty of execution versus the larger banks. So the sweet spot that we're in I think is a just a very, very important part of our success today and going forward.

Okay. And one final question. You mentioned post equity raise the capital ratios are pretty strong. I know the SBLF you guys are going to repay in the fourth quarter. But how should we think about, and you're growing obviously loan book but M&A opportunities looks like Virginia Heritage was a very good deal, just want to know how you’re thinking about may be M&A going forward. Do you wait several quarters to integrate Virginia Heritages further or do you think there is opportunity now if the right property comes up?

Well again, we're always opportunistic, we know the marketplace very well, we know our competitors, we're all very friendly. But I would tell you that right now the opportunity that we see in Northern Virginia with what we have on our plate is something that is receiving all of our attention, plus the opportunity for us to expand just within the markets that we've been so successful in. So I'll never say never but right now we've got a lot on our plate that we believe that we’re going to capitalize on.

Thank you. [Operator Instructions]. Our next question comes from the line of Casey Orr from Sandler O'Neill.

I just had one follow-on question on the deposit growth in the quarter. Looks like there was a pretty sizable jump in retail time deposit in particular, what exactly was driving that?

Yes, Casey, good catch. We did have a special that we've since stopped, we had a two-year CD special at 1% that our Chief Deposit Officer had recommended and which we thought was pretty successful in giving us the opportunity to get new customers and to, and when at time when rates were very low and to cross sell them. We did achieve $50 million growth as a result of that campaign and I think that was the big issue that you're pointing to here.

That’s helpful. How long did that run and I guess what time period in the quarter?

It was for the first quarter. We agreed with it in an ALCO meeting and we just closed that out actually last Friday at our meeting we got there a $50 million goal and we just decided with our liquidity position and other opportunities that we have that we did not need to continue with the program. But it does give us a lot of other opportunities for customer relationships and cross sell and that's what we were after.

Great, answering that question. Thanks.

You're welcome.

Thank you. And I see no additional questions at this time. I would like to turn the conference back over to management for any closing comments.

I’d like to thank you all for attending the first quarter conference call and looking forward to speak to you again in three months and hope everybody enjoys this beautiful weather.

Thank you. Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program and you may now disconnect. Everyone have a good day.