Eagle Bancorp, Inc. ("Eagle", the "Company") (NASDAQ: EGBN), the Bethesda-based holding company for EagleBank, one of the largest community banks in the Washington D.C. area, reported its unaudited results for the third quarter ended September 30, 2024.

Eagle reported net income of $21.8 million or $0.72 per share for the third quarter 2024, compared to a net loss of $83.8 million during the second quarter in which the Company recorded a $104.2 million impairment in the value of goodwill. Operating net income1 in the second quarter, adjusted to exclude the impairment charge on goodwill, was $20.4 million or $0.67 per share per diluted share. Pre-provision net revenue ("PPNR")1 in the third quarter was $35.2 million compared to a pre-provision net loss of $69.8 million for the prior quarter, or $34.4 million of PPNR when adjusted to exclude the impairment charge on goodwill1.

The $1.4 million increase in operating net income1 over the prior quarter is attributed to a positive variance of $2.2 million related to the change in provision for unfunded commitments; $1.6 million increase in non-interest income; and a $490 thousand increase in net interest income, offset by a $1.3 million increase in operating non-interest expense, adjusted to exclude the impairment charge on goodwill, and a $1.1 million increase in provision for credit losses.

"We continue to strategically position the Company for future growth as evidenced by actions taken during the quarter with the refinancing of our maturing subordinated debt and the recalibration of our common dividend strategy," said Susan G. Riel, President and Chief Executive Officer of the Company. "We announced the addition of Evelyn Lee to our senior leadership as our Chief Lending Officer for our commercial lending team. As a 25 year banker in the Washington D.C. market, I am excited about accomplishing our strategic goal of continuing to build out our commercial banker group and pursuing diversification of the loan portfolio and growing our relationship deposits," added Ms. Riel.

Eric R. Newell, Chief Financial Officer of the Company said, "Raising senior debt in the third quarter demonstrates the confidence debt investors have in our vision and the future of the Company. Operating performance was stable from last quarter evidenced by operating net income1 increasing $1.4 million to $21.8 million in the third quarter. We continued to build our reserve for credit losses, with coverage as a percentage of total held for investment loans at 1.40% increasing 7 basis points from last quarter. Common equity tier one capital increased to 14.5% and our tangible common equity1 ratio exceeds 10%."

Ms. Riel added, "I thank all of our employees for their hard work and their commitment to a culture of respect, diversity and inclusion in both the workplace and the communities we serve."

Third Quarter 2024 Highlights

  • The Company repaid $70 million of maturing subordinated debt and issued $77.7 million of 10% unsecured senior debt maturing September 30, 2029.
  • During the quarter, the Company announced a recalibration of the common stock dividend to $0.165 per share from $0.45 per share in the second quarter an action estimated to retain an additional $32 million of capital annually to meet growth and investment objectives.
  • The ACL as a percentage of total loans held for investment was 1.40% at quarter-end; up from 1.33% at the prior quarter-end. Performing office coverage2 was 4.55% at quarter-end; as compared to 4.05% at the prior quarter-end.
  • Nonperforming assets increased $38.2 million to $137.1 million as of September 30, 2024 and were 1.22% of total assets compared to 0.88% as of June 30, 2024. Inflows to non-performing loans in the quarter totaled $45.5 million offset by $9 million of outflows, of which $5 million was the loan held for sale at June 30, 2024 and an increase of other real estate owned of $2.0 million. The inflows were predominantly associated with $27.3 million in mixed use land loans and $17.9 million in an assisted living facility loan.
  • Substandard loans declined $17.0 million to $391.3 million and special mention loans increased $57.1 million to $365.0 million at September 30, 2024.
  • Net charge-offs for the third quarter were 0.26% compared to 0.11% for the second quarter 2024. Of the total $5.3 million of net charge offs in the quarter, $3.8 million is associated with a senior living property that has not stabilized.
  • The net interest margin ("NIM") decreased slightly to 2.37% for the third quarter 2024, compared to 2.40% for the prior quarter, primarily due to continued decline in average non-interest bearing deposits. Net interest income increased $490 thousand from the second quarter to $71.8 million in the third quarter.
  • At quarter-end, the common equity ratio, tangible common equity ratio1, and common equity tier 1 capital (to risk-weighted assets) ratio were 10.86%, 10.86%, and 14.54%, respectively.
  • Total estimated insured deposits at quarter-end were $6.4 billion, or 74.5% of deposits, stable from the second quarter total of 72.5% of deposits.
  • Total on-balance sheet liquidity and available capacity was $4.6 billion at quarter-end compared to $4.0 billion at June 30, 2024.

Income Statement

  • Net interest income was $71.8 million for the third quarter 2024, compared to $71.4 million for the prior quarter. The increase in net interest income was primarily driven by an increase in the average balances of deposits held with other banks and average loans partially offset by higher average interest-bearing deposits and higher rates paid on those deposits in the third quarter from the prior quarter.
  • Provision for credit losses was $10.1 million for the third quarter 2024, compared to $9.0 million for the prior quarter. The increase in the provision quarter over quarter reflects higher net charge-offs in the third quarter from the prior quarter. Reserve for unfunded commitments was a reversal of $1.6 million due to lower unfunded commitments in our construction portfolio. This compared to a reserve for unfunded commitments in the prior quarter of $0.6 million.
  • Noninterest income was $6.95 million for the third quarter 2024, compared to $5.33 million for the prior quarter. The primary driver for the increase was higher swap fee income.
  • Noninterest expense was $43.6 million for the third quarter 2024, compared to $146.5 million for the prior quarter. The decrease over the comparative quarters was primarily due to a goodwill impairment charge of $104.2 million in the second quarter 2024. When excluding the goodwill impairment charge, the increase quarter over quarter was associated with increased FDIC insurance expense.

Loans and Funding

  • Total loans were $8.0 billion at September 30, 2024, down 0.4% from the prior quarter-end. The decrease in total loans was driven by a reduction in commercial loans and income producing commercial real estate loans from the prior quarter-end, partially offset by increased fundings of ongoing construction projects for commercial and residential properties.At September 30, 2024, income-producing commercial real estate loans secured by office properties other than owner-occupied properties were 10.8% of the total loan portfolio, down from 11.3% at the prior quarter-end.
  • Total deposits at quarter-end were $8.5 billion, up $273.5 million, or 3.3%, from the prior quarter-end. The increase was primarily attributable to an increase in time deposits from the company's digital acquisition channel. Period end deposits have increased $165 million when compared to prior year comparable period end of September 30, 2023.
  • Other short-term borrowings were $1.2 billion at September 30, 2024, down 25.3% from the prior quarter-end as maturing FHLB borrowings were paid down with increased cash from deposits.

Asset Quality

  • Allowance for credit losses was 1.40% of total loans held for investment at September 30, 2024, compared to 1.33% at the prior quarter-end. Performing office coverage was 4.55% at quarter-end; as compared to 4.05% at the prior quarter-end.
  • Net charge-offs were $5.3 million for the quarter compared to $2.3 million in the second quarter of 2024.
  • Nonperforming assets were $137.1 million at September 30, 2024.
    • NPAs as a percentage of assets were 1.22% at September 30, 2024, compared to 0.88% at the prior quarter-end. At September 30, 2024, other real estate owned consisted of four properties with an aggregate carrying value of $2.7 million. The increase in NPAs was predominantly associated with $27.3 million in mixed use land loans and $17.9 million in an assisted living facility loan.
    • Loans 30-89 days past due were $56.3 million at September 30, 2024, compared to $8.4 million at the prior quarter-end. Of the total increase, $25 million was brought current subsequent to quarter-end.

Capital

  • Total shareholders' equity was $1.2 billion at September 30, 2024, up 4.8% from the prior quarter-end. The increase in shareholders' equity of $56.0 million was primarily due to increased valuations of available-for-sale securities and an increase in retained earnings.
  • Book value per share and Tangible book value per share3 was $40.61, up $1.86 from the prior quarter-end.

Additional financial information: The financial information that follows provides more detail on the Company's financial performance for the three months ended September 30, 2024 as compared to the three months ended June 30, 2024 and September 30, 2023, as well as eight quarters of trend data. Persons wishing additional information should refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2023, and other reports filed with the SEC.

About Eagle Bancorp: The Company is the holding company for EagleBank, which commenced operations in 1998. The Bank is headquartered in Bethesda, Maryland, and operates through twelve banking offices and four lending offices located in Suburban Maryland, Washington, D.C. and Northern Virginia. The Company focuses on building relationships with businesses, professionals and individuals in its marketplace, and is committed to a culture of respect, diversity, equity and inclusion in both its workplace and the communities in which it operates.

Conference call: Eagle Bancorp will host a conference call to discuss its third quarter 2024 financial results on Thursday, October 24, 2024 at 10:00 a.m. Eastern Time.

The listen-only webcast can be accessed at:

  • https://edge.media-server.com/mmc/p/79xpxyi2
  • For analysts who wish to participate in the conference call, please register at the following URL:https://register.vevent.com/register/BI6cdce3c45a9f49219ea94a6f7c9fa083
  • A replay of the conference call will be available on the Company's website through November 7, 2024: https://www.eaglebankcorp.com/

Forward-looking statements: This press release contains forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended, including statements of goals, intentions, and expectations as to future trends, plans, events or results of Company operations and policies and regarding general economic conditions. In some cases, forward-looking statements can be identified by use of words such as "may," "will," "can," "anticipates," "believes," "expects," "plans," "estimates," "potential," "continue," "should," "could," "strive," "feel" and similar words or phrases. These statements are based upon current and anticipated economic conditions, nationally and in the Company's market (including volatility in interest rates and interest rate policy; the current inflationary environment; competitive factors) and other conditions (such as the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment regarding the stability and liquidity of banks), which by their nature are not susceptible to accurate forecast and are subject to significant uncertainty. Because of these uncertainties and the assumptions on which this discussion and the forward-looking statements are based, actual future operations and results in the future may differ materially from those indicated herein. For details on factors that could affect these expectations, see the risk factors and other cautionary language included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 and in other periodic and current reports filed with the SEC. Readers are cautioned against placing undue reliance on any such forward-looking statements. The Company's past results are not necessarily indicative of future performance, and nothing contained herein is meant to or should be considered and treated as earnings guidance of future quarters' performance projections. All information is as of the date of this press release. Any forward-looking statements made by or on behalf of the Company speak only as to the date they are made. Except to the extent required by applicable law or regulation, the Company undertakes no obligation to revise or update publicly any forward-looking statement for any reason.

Eagle Bancorp, Inc.
Consolidated Statements of Operations (Unaudited)
(Dollars in thousands, except per share data)
           
  Three Months Ended
  September 30,   June 30,   September 30,
    2024       2024       2023  
Interest Income          
Interest and fees on loans $ 139,836     $ 137,616     $ 132,273  
Interest and dividends on investment securities   12,578       12,405       13,732  
Interest on balances with other banks and short-term investments   21,296       19,568       15,067  
Interest on federal funds sold   103       142       77  
Total interest income   173,813       169,731       161,149  
Interest Expense          
Interest on deposits   81,190       76,846       70,929  
Interest on customer repurchase agreements   332       330       311  
Interest on other short-term borrowings   20,448       21,202       18,152  
Interest on long-term borrowings $             1,038  
Total interest expense   101,970       98,378       90,430  
Net Interest Income   71,843       71,353       70,719  
Provision for Credit Losses   10,094       8,959       5,644  
Provision (Reversal) for Credit Losses for Unfunded Commitments   (1,593 )     608       (839 )
Net Interest Income After Provision for Credit Losses   63,342       61,786       65,914  
           
Noninterest Income          
Service charges on deposits   1,747       1,653       1,631  
Gain on sale of loans   20       37       (5 )
Net gain on sale of investment securities   3       3       5  
Increase in cash surrender value of bank-owned life insurance   731       709       669  
Other income   4,450       2,930       4,047  
Total noninterest income   6,951       5,332       6,347  
Noninterest Expense          
Salaries and employee benefits   21,675       21,770       21,549  
Premises and equipment expenses   2,794       2,894       3,095  
Marketing and advertising   1,588       1,662       768  
Data processing   3,435       3,495       3,194  
Legal, accounting and professional fees   3,433       2,705       2,162  
FDIC insurance   7,399       5,917       3,342  
Goodwill impairment         104,168        
Other expenses   3,290       3,880       3,523  
Total noninterest expense   43,614       146,491       37,633  
(Loss) Income Before Income Tax Expense   26,679       (79,373 )     34,628  
Income Tax Expense   4,864       4,429       7,245  
Net (Loss) Income $ 21,815     $ (83,802 )   $ 27,383  
           
(Loss) Earnings Per Common Share          
Basic $ 0.72     $ (2.78 )   $ 0.91  
Diluted $ 0.72     $ (2.78 )   $ 0.91  
                       

        

Eagle Bancorp, Inc.
Consolidated Balance Sheets (Unaudited)
(Dollars in thousands, except per share data)
  September 30,   June 30,   September 30,
    2024       2024       2023  
Assets          
Cash and due from banks $ 16,383     $ 10,803     $ 8,625  
Federal funds sold   9,610       5,802       13,611  
Interest-bearing deposits with banks and other short-term investments   584,491       526,228       235,819  
Investment securities available-for-sale at fair value (amortized cost of $1,550,038, $1,613,659, and $1,732,722, respectively, and allowance for credit losses of $17, $17 and $17, respectively)   1,433,006       1,584,435       1,474,945  
Investment securities held-to-maturity at amortized cost, net of allowance for credit losses of $1,237, $2,012 and $2,010, respectively (fair value of $868,425, $856,275 and $923,313, respectively)   961,925       982,955       1,032,485  
Federal Reserve and Federal Home Loan Bank stock   37,728       54,274       25,689  
Loans held for sale         5,000        
Loans   7,970,269       8,001,739       7,916,391  
Less: allowance for credit losses   (111,867 )     (106,301 )     (83,332 )
Loans, net   7,858,402       7,895,438       7,833,059  
Premises and equipment, net   8,291       8,788       11,216  
Operating lease right-of-use assets   15,167       16,250       20,151  
Deferred income taxes   74,381       86,236       98,987  
Bank-owned life insurance   115,064       114,333       112,234  
Goodwill and intangible assets, net   21       129       105,239  
Other real estate owned   2,743       773       1,487  
Other assets   167,840       174,396       190,667  
Total Assets $ 11,285,052     $ 11,465,840     $ 11,164,214  
Liabilities and Shareholders' Equity          
Liabilities          
Deposits:          
Noninterest-bearing demand $ 1,609,823     $ 1,693,955     $ 2,072,665  
Interest-bearing transaction   903,300       1,123,980       932,779  
Savings and money market   3,316,819       3,165,314       3,129,773  
Time deposits   2,710,908       2,284,099       2,241,089  
Total deposits   8,540,850       8,267,348       8,376,306  
Customer repurchase agreements   32,040       39,220       25,689  
Other short-term borrowings   1,240,000       1,659,979       1,300,001  
Long-term borrowings   75,812             69,887  
Operating lease liabilities   18,755       20,016       24,422  
Reserve for unfunded commitments   5,060       6,653       6,183  
Other liabilities   147,111       139,348       145,842  
Total Liabilities   10,059,628       10,132,564       9,948,330  
Shareholders' Equity          
Common stock, par value $0.01 per share; shares authorized 100,000,000, shares issued and outstanding 30,173,200 30,180,482, and 30,185,732, respectively   298       297       296  
Additional paid-in capital   382,284       380,142       372,394  
Retained earnings   967,019       949,863       1,054,699  
Accumulated other comprehensive loss   (124,177 )     (160,843 )     (211,505 )
Total Shareholders' Equity   1,225,424       1,169,459       1,215,884  
Total Liabilities and Shareholders' Equity $ 11,285,052     $ 11,302,023     $ 11,164,214  
                       

 

Loan Mix and Asset Quality(Dollars in thousands)
 
  September 30,   June 30,   September 30,
    2024       2024       2023  
  Amount %   Amount %   Amount %
Loan Balances - Period End:                
Commercial $ 1,154,349     14 %   $ 1,238,261     15 %   $ 1,418,760     18 %
PPP loans   348     %     407     %     588     %
Income producing - commercial real estate   4,155,120     52 %     4,217,525     53 %     4,147,301     52 %
Owner occupied - commercial real estate   1,276,240     16 %     1,263,714     16 %     1,182,959     15 %
Real estate mortgage - residential   57,223     1 %     61,338     1 %     76,511     1 %
Construction - commercial and residential   1,174,591     15 %     1,063,764     13 %     904,282     11 %
Construction - C&I (owner occupied)   100,662     1 %     99,526     1 %     129,616     2 %
Home equity   51,567     1 %     52,773     1 %     53,917     1 %
Other consumer   169     %     4,431     %     2,457     %
Total loans $ 7,970,269     100 %   $ 8,001,739     100 %   $ 7,916,391     100 %
                                         

 

  Three Months Ended or As Of
  September 30,   June 30,   September 30,
    2024       2024       2023  
Asset Quality:          
Net charge-offs $ 5,303     $ 2,285     $ 340  
Nonperforming loans $ 134,371     $ 98,169     $ 70,148  
Other real estate owned $ 2,743     $ 773     $ 1,757  
Nonperforming assets $ 137,114     $ 98,942     $ 71,905  
Special mention $ 364,983     $ 307,906     $ 158,182  
Substandard $ 391,301     $ 408,311     $ 219,001  
                       

 

Eagle Bancorp, Inc.
Consolidated Average Balances, Interest Yields And Rates vs. Prior Quarter (Unaudited)
(Dollars in thousands)
                       
  Three Months Ended
  September 30, 2024   June 30, 2024
  Average Balance   Interest   AverageYield/Rate   Average Balance   Interest   AverageYield/Rate
ASSETS                      
Interest earning assets:                      
Interest-bearing deposits with other banks and other short-term investments $ 1,577,464     $ 21,296       5.37 %   $ 1,455,007     $ 19,568       5.41 %
Loans held for sale (1)   4,936       1       0.08 %     8,045       100       5.00 %
Loans (1) (2) $ 8,026,524       139,835       6.93 %     8,003,206       137,516       6.91 %
Investment securities available-for-sale (2)   1,479,598       7,336       1.97 %     1,478,856       7,048       1.92 %
Investment securities held-to-maturity (2)   974,366       5,242       2.14 %     995,274       5,357       2.16 %
Federal funds sold   10,003       103       4.10 %     13,058       142       4.37 %
Total interest earning assets   12,072,891     $ 173,813       5.73 %     11,953,446     $ 169,731       5.71 %
Total noninterest earning assets   397,006               510,725          
Less: allowance for credit losses   (108,998 )             (102,671 )        
Total noninterest earning assets   288,008               408,054          
TOTAL ASSETS $ 12,360,899             $ 12,361,500          
                       
LIABILITIES AND SHAREHOLDERS' EQUITY                    
Interest bearing liabilities:                      
Interest-bearing transaction $ 1,656,676     $ 14,596       3.51 %   $ 1,636,795     $ 16,100       3.96 %
Savings and money market   3,254,128       34,896       4.27 %     3,321,001       33,451       4.05 %
Time deposits   2,517,944       31,698       5.01 %     2,215,693       27,295       4.95 %
Total interest bearing deposits   7,428,748       81,190       4.35 %     7,173,489       76,846       4.31 %
Customer repurchase agreements   38,045       332       3.47 %     38,599       330       3.44 %
Other short-term borrowings   1,615,867       20,448       5.03 %     1,682,684       21,202       5.07 %
Long-term borrowings   824             %                 %
Total interest bearing liabilities   9,083,484     $ 101,970       4.47 %     8,894,772     $ 98,378       4.45 %
Noninterest bearing liabilities:                      
Noninterest bearing demand   1,915,666               2,051,777          
Other liabilities   160,272               151,324          
Total noninterest bearing liabilities   2,075,938               2,203,101          
Shareholders' equity   1,201,477               1,263,627          
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 12,360,899             $ 12,361,500          
Net interest income     $ 71,843             $ 71,353      
Net interest spread           1.26 %             1.26 %
Net interest margin           2.37 %             2.40 %
Cost of funds           3.69 %             3.61 %

(1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $3.9 million and $4.8 million for the three months ended September 30, 2024 and June 30, 2024, respectively.(2) Interest and fees on loans and investments exclude tax equivalent adjustments.

Eagle Bancorp, Inc.
Consolidated Average Balances, Interest Yields And Rates vs. Year Ago Quarter (Unaudited)
(Dollars in thousands)
                       
  Three Months Ended September 30,
    2024       2023  
  Average Balance   Interest   AverageYield/Rate   Average Balance   Interest   AverageYield/Rate
ASSETS                      
Interest earning assets:                      
Interest bearing deposits with other banks and other short-term investments $ 1,577,464     $ 21,296       5.37 %   $ 1,127,451     $ 15,067       5.30 %
Loans held for sale (1)   4,936       1       0.08 %                 %
Loans (1) (2)   8,026,524       139,835       6.93 %     7,795,144       132,273       6.73 %
Investment securities available-for-sale (2)   1,479,598       7,336       1.97 %     1,554,348       8,126       2.07 %
Investment securities held-to-maturity (2)   974,366       5,242       2.14 %     1,047,515       5,606       2.12 %
Federal funds sold   10,003       103       4.10 %     7,728       77       3.95 %
Total interest earning assets   12,072,891     $ 173,813       5.73 %     11,532,186     $ 161,149       5.54 %
Total noninterest earning assets   397,006               489,683          
Less: allowance for credit losses   (108,998 )             (78,964 )        
Total noninterest earning assets   288,008               410,719          
TOTAL ASSETS $ 12,360,899             $ 11,942,905          
                       
LIABILITIES AND SHAREHOLDERS' EQUITY                    
Interest bearing liabilities:                      
Interest bearing transaction $ 1,656,676     $ 14,596       3.51 %   $ 1,421,522     $ 12,785       3.57 %
Savings and money market   3,254,128       34,896       4.27 %     3,113,755       32,855       4.19 %
Time deposits   2,517,944       31,698       5.01 %     2,162,582       25,289       4.64 %
Total interest bearing deposits   7,428,748       81,190       4.35 %     6,697,859       70,929       4.20 %
Customer repurchase agreements   38,045       332       3.47 %     36,082       311       3.42 %
Other short-term borrowings   1,615,867       20,448       5.03 %     1,610,097       19,190       4.73 %
Long-term borrowings   824             %                 %
Total interest bearing liabilities   9,083,484     $ 101,970       4.47 %     8,344,038     $ 90,430       4.30 %
Noninterest bearing liabilities:                      
Noninterest bearing demand   1,915,666               2,248,782          
Other liabilities   160,272               114,923          
Total noninterest bearing liabilities   2,075,938               2,363,705          
Shareholders' equity   1,201,477               1,235,162          
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 12,360,899             $ 11,942,905          
Net interest income     $ 71,843             $ 70,719      
Net interest spread           1.26 %             1.24 %
Net interest margin           2.37 %             2.43 %
Cost of funds           3.69 %             3.39 %

(1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $3.9 million and $4.1 million for the three months ended September 30, 2024 and 2023, respectively.(2) Interest and fees on loans and investments exclude tax equivalent adjustments.

Eagle Bancorp, Inc.
Statements of Operations and Highlights Quarterly Trends (Unaudited)
(Dollars in thousands, except per share data)
                               
  Three Months Ended
  September 30,   June 30,   March 31,   December 31,   September 30,   June 30,   March 31,   December 31,
Income Statements:   2024       2024       2024       2023       2023       2023       2023       2022  
Total interest income $ 173,813     $ 169,731     $ 175,602     $ 167,421     $ 161,149     $ 156,510     $ 140,247     $ 129,130  
Total interest expense   101,970       98,378       100,904       94,429       90,430       84,699       65,223       43,530  
Net interest income   71,843       71,353       74,698       72,992       70,719       71,811       75,024       85,600  
Provision (reversal) for credit losses   10,094       8,959       35,175       14,490       5,644       5,238       6,164       (464 )
Provision (reversal) for credit losses for unfunded commitments   (1,593 )     608       456       (594 )     (839 )     318       848       161  
Net interest income after provision for (reversal of) credit losses   63,342       61,786       39,067       59,096       65,914       66,255       68,012       85,903  
Noninterest income before investment gain (loss)   6,948       5,329       3,585       2,891       6,342       8,593       3,721       5,326  
Net gain (loss) on sale of investment securities   3       3       4       3       5       2       (21 )     3  
Total noninterest income   6,951       5,332       3,589       2,894       6,347       8,595       3,700       5,329  
Salaries and employee benefits   21,675       21,770       21,726       18,416       21,549       21,957       24,174       23,691  
Premises and equipment expenses   2,794       2,894       3,059       2,967       3,095       3,227       3,317       3,292  
Marketing and advertising   1,588       1,662       859       1,071       768       884       636       1,290  
Goodwill impairment         104,168                                      
Other expenses   17,557       15,997       14,353       14,644       12,221       11,910       12,457       10,645  
Total noninterest expense   43,614       146,491       39,997       37,098       37,633       37,978       40,584       38,918  
(Loss) income before income tax expense   26,679       (79,373 )     2,659       24,892       34,628       36,872       31,128       52,314  
Income tax expense   4,864       4,429       2,997       4,667       7,245       8,180       6,894       10,121  
Net (loss) income $ 21,815     $ (83,802 )   $ (338 )   $ 20,225     $ 27,383     $ 28,692     $ 24,234     $ 42,193  
Per Share Data:                              
(Loss) earnings per weighted average common share, basic $ 0.72     $ (2.78 )   $ (0.01 )   $ 0.68     $ 0.91     $ 0.94     $ 0.78     $ 1.32  
(Loss) earnings per weighted average common share, diluted $ 0.72     $ (2.78 )   $ (0.01 )   $ 0.67     $ 0.91     $ 0.94     $ 0.78     $ 1.32  
Weighted average common shares outstanding, basic   30,173,852       30,185,609       30,068,173       29,925,557       29,910,218       30,454,766       31,109,267       31,819,631  
Weighted average common shares outstanding, diluted   30,241,699       30,185,609       30,068,173       29,966,962       29,944,692       30,505,468       31,180,346       31,898,619  
Actual shares outstanding at period end   30,173,200       30,180,482       30,185,732       29,925,612       29,917,982       29,912,082       31,111,647       31,346,903  
Book value per common share at period end $ 40.61     $ 38.75     $ 41.72     $ 42.58     $ 40.64     $ 40.78     $ 39.92     $ 39.18  
Tangible book value per common share at period end (1) $ 40.61     $ 38.74     $ 38.26     $ 39.08     $ 37.12     $ 37.29     $ 36.57     $ 35.86  
Dividend per common share $ 0.165     $ 0.45     $ 0.45     $ 0.45     $ 0.45     $ 0.45     $ 0.45     $ 0.45  
Performance Ratios (annualized):                              
Return on average assets   0.70 %     (2.73 )%     (0.01 )%     0.65 %     0.91 %     0.96 %     0.86 %     1.49 %
Return on average common equity   7.22 %     (26.67 )%     (0.11 )%     6.48 %     8.80 %     9.24 %     7.92 %     13.57 %
Return on average tangible common equity (1)   7.22 %     (28.96 )%     (0.11 )%     7.08 %     9.61 %     10.08 %     8.65 %     14.82 %
Net interest margin   2.37 %     2.40 %     2.43 %     2.45 %     2.43 %     2.49 %     2.77 %     3.14 %
Efficiency ratio (2)   55.4 %     191.0 %     51.1 %     48.9 %     48.8 %     47.2 %     51.6 %     42.8 %
Other Ratios:                              
Allowance for credit losses to total loans (3)   1.40 %     1.33 %     1.25 %     1.08 %     1.05 %     1.00 %     1.01 %     0.97 %
Allowance for credit losses to total nonperforming loans   83 %     110 %     109 %     131 %     119 %     268 %     1,160 %     1,151 %
Nonperforming assets to total assets   1.22 %     0.88 %     0.79 %     0.57 %     0.64 %     0.28 %     0.08 %     0.08 %
Net charge-offs (recoveries) (annualized) to average total loans (3)   0.26 %     0.11 %     1.07 %     0.60 %     0.02 %     0.29 %     0.05 %     0.05 %
Tier 1 capital (to average assets)   10.94 %     10.58 %     10.26 %     10.73 %     10.96 %     10.84 %     11.42 %     11.63 %
Total capital (to risk weighted assets)   15.74 %     15.07 %     14.87 %     14.79 %     14.54 %     14.51 %     14.74 %     14.94 %
Common equity tier 1 capital (to risk weighted assets)   14.54 %     13.92 %     13.80 %     13.90 %     13.68 %     13.55 %     13.75 %     14.03 %
Tangible common equity ratio (1)   10.86 %     10.35 %     10.03 %     10.12 %     10.04 %     10.21 %     10.36 %     10.18 %
Average Balances (in thousands):                              
Total assets $ 12,360,899     $ 12,361,500     $ 12,784,470     $ 12,283,303     $ 11,942,905     $ 11,960,111     $ 11,426,056     $ 11,255,956  
Total earning assets $ 12,072,891     $ 11,953,446     $ 12,365,497     $ 11,837,722     $ 11,532,186     $ 11,546,050     $ 11,004,817     $ 10,829,703  
Total loans (3) $ 8,026,524     $ 8,003,206     $ 7,988,941     $ 7,963,074     $ 7,795,144     $ 7,790,555     $ 7,712,023     $ 7,379,198  
Total deposits $ 9,344,414     $ 9,225,266     $ 9,501,661     $ 9,471,369     $ 8,946,641     $ 8,514,938     $ 8,734,125     $ 9,524,139  
Total borrowings $ 1,654,736     $ 1,721,283     $ 1,832,947     $ 1,401,917     $ 1,646,179     $ 2,102,507     $ 1,359,463     $ 411,060  
Total shareholders' equity $ 1,201,477     $ 1,263,627     $ 1,289,656     $ 1,238,763     $ 1,235,162     $ 1,245,647     $ 1,240,978     $ 1,233,705  

(1) A reconciliation of non-GAAP financial measures to the nearest GAAP measure is provided in the tables that accompany this document. (2) Computed by dividing noninterest expense by the sum of net interest income and noninterest income.(3) Excludes loans held for sale.

GAAP Reconciliation to Non-GAAP Financial Measures (unaudited)
(dollars in thousands, except per share data)
           
  September 30,   June 30,   September 30,
    2024       2024       2023  
Tangible common equity          
Common shareholders' equity $ 1,225,424     $ 1,169,459     $ 1,215,884  
Less: Intangible assets   (21 )     (129 )     (105,239 )
Tangible common equity $ 1,225,403     $ 1,169,330     $ 1,110,645  
           
Tangible common equity ratio          
Total assets $ 11,285,052     $ 11,302,023     $ 11,164,214  
Less: Intangible assets   (21 )     (129 )     (105,239 )
Tangible assets $ 11,285,031     $ 11,301,894     $ 11,058,975  
           
Tangible common equity ratio   10.86 %     10.35 %     10.04 %
           
Per share calculations          
Book value per common share $ 40.61     $ 38.75     $ 40.64  
Less: Intangible book value per common share         (0.01 )     (3.52 )
Tangible book value per common share $ 40.61     $ 38.74     $ 37.12  
           
Shares outstanding at period end   30,173,200       30,180,482       29,917,982  
                       

 

    Three Months Ended
    September 30,   June 30,   September 30,
      2024       2024       2023  
Average tangible common equity            
Average common shareholders' equity   $ 1,201,477     $ 1,263,627     $ 1,235,162  
Less: Average intangible assets     (24 )     (99,827 )     (104,639 )
Average tangible common equity   $ 1,201,453     $ 1,163,800     $ 1,130,523  
             
Return on average tangible common equity            
Net (loss) income   $ 21,815     $ (83,802 )   $ 27,383  
Return on average tangible common equity     7.22 %   (28.96)%     9.61 %
             
Net (loss) income   $ 21,815     $ (83,802 )   $ 27,383  
Add back of goodwill impairment   $       104,168        
Operating net (loss) income (Non-GAAP)     21,815       20,366       27,383  
Operating Return on average tangible common equity (Non-GAAP)     7.22 %     7.04 %     9.61 %
             
Efficiency ratio            
Net interest income   $ 71,843     $ 71,353     $ 70,719  
Noninterest income     6,951       5,332       6,347  
Operating revenue   $ 78,794     $ 76,685     $ 77,066  
Noninterest expense   $ 43,614     $ 146,491     $ 37,633  
Add back of goodwill impairment           (104,168 )      
Operating Noninterest expense (Non-GAAP)     43,614       42,323       37,633  
             
Efficiency ratio     55.35 %     191.03 %     48.83 %
Operating Efficiency ratio (Non-GAAP)     55.35 %     55.19 %     48.83 %
             
Pre-provision net revenue            
Net interest income   $ 71,843     $ 71,353     $ 70,719  
Noninterest income     6,951       5,332       6,347  
Less: Noninterest expense     (43,614 )     (146,491 )     (37,633 )
Pre-provision net revenue   $ 35,180     $ (69,806 )   $ 39,433  
             
Pre-provision net revenue   $ 35,180     $ (69,806 )   $ 39,433  
Add back of goodwill impairment   $     $ 104,168     $  
Operating Pre-provision net revenue (Non-GAAP)   $ 35,180     $ 34,362     $ 39,433  
             

Tangible common equity, tangible common equity to tangible assets (the "tangible common equity ratio"), tangible book value per common share, average tangible common equity, annualized return on average tangible common equity, and the operating annualized return on average tangible common equity are non-GAAP financial measures derived from GAAP based amounts. The Company calculates the tangible common equity ratio by excluding the balance of intangible assets from common shareholders' equity, or tangible common equity, and dividing by tangible assets. The Company calculates tangible book value per common share by dividing tangible common equity by common shares outstanding, as compared to book value per common share, which the Company calculates by dividing common shareholders' equity by common shares outstanding. The Company calculates the annualized return on average tangible common equity ratio by dividing net income available to common shareholders by average tangible common equity, which is calculated by excluding the average balance of intangible assets from the average common shareholders' equity. The Company calculates the operating annualized return on average tangible common equity ratio by dividing operating net income available to common shareholders, which adds back the goodwill impairment, by average tangible common equity, which is calculated by excluding the average balance of intangible assets from the average common shareholders' equity. The Company considers this information important to shareholders as the significant impact of the goodwill impairment is a one-time event that obscures the operating performance of the company. Further related to other measures, tangible equity is a measure that is consistent with the calculation of capital for bank regulatory purposes, which excludes intangible assets from the calculation of risk based ratios, and as such is useful for investors, regulators, management and others to evaluate capital adequacy and to compare against other financial institutions.

The efficiency ratio is a non-GAAP measure calculated by dividing GAAP noninterest expense by the sum of GAAP net interest income and GAAP noninterest income. The efficiency ratio measures a bank's overhead as a percentage of its revenue. The Company believes that reporting the non-GAAP efficiency ratio more closely measures its effectiveness of controlling operational activities. Further, the operating efficiency ratio is measured by dividing non-GAAP noninterest expense, which excludes the goodwill impairment, by the sum of GAAP net interest income and GAAP noninterest income. The Company considers this information important to shareholders as the significant impact of the goodwill impairment is a one-time event that obscures the operating performance of the company.

Pre-provision net revenue is a non-GAAP financial measure calculated by subtracting noninterest expenses from the sum of net interest income and noninterest income. The Company considers this information important to shareholders because it illustrates revenue excluding the impact of provisions and reversals to the allowance for credit losses on loans. Operating pre-provision net revenue is a non-GAAP financial measure calculated by subtracting noninterest expenses with the impact of the goodwill impairment added back from the sum of net interest income and noninterest income. The Company considers this information important to shareholders as the significant impact of the goodwill impairment is a one-time event that obscures the operating performance of the company.

    Three Months Ended
    September 30,   June 30,   September 30,
      2024       2024       2023  
Net (loss) income   $ 21,815     $ (83,802 )   $ 27,383  
Add back of goodwill impairment           104,168        
Operating Net (loss) income (Non-GAAP)   $ 21,815     $ 20,366     $ 27,383  
             
(Loss) earnings per share (diluted)4   $ 0.72     $ (2.78 )   $ 0.91  
Add back of goodwill impairment per share (diluted)           3.45        
Operating earnings (loss) per share (diluted) (Non-GAAP)   $ 0.72     $ 0.67     $ 0.91  
             

Operating net (loss) income and operating (loss) earnings per share (diluted) are non-GAAP financial measures derived from GAAP based amounts. The Company calculates operating net (loss) income by excluding from net (loss) income the one-time goodwill impairment of $104.2 million. During the second quarter of 2024, the Company performed an annual impairment test as a result of management's evaluation of current economic conditions, and concluded that goodwill had become impaired, which resulted in an impairment charge of $104.2 million to reduce the carrying value of the Company's goodwill to zero. The Company calculates operating earnings (loss) per share (diluted) by dividing the one-time goodwill impairment of $104.2 million by the weighted average shares outstanding (diluted) for the three and six months ended June 30, 2024. The Company considers this information important to shareholders because operating net (loss) income and operating (loss) earnings per share (diluted) provides investors insight into how Company earnings changed exclusive of the impairment charge to allow investors to better compare the Company's performance against historical periods. The table above provides a reconciliation of operating net income (loss) and operating earnings (loss) per share (diluted) to the nearest GAAP measure.

_______________1 A reconciliation of non-GAAP financial measures and the nearest GAAP measures is provided in the GAAP Reconciliation to Non-GAAP Financial Measure that accompany this document.2 Calculated as the ACL attributable to loans collateralized by performing office properties as a percentage of total loans.3 A reconciliation of non-GAAP financial measures and the nearest GAAP measures is provided in the GAAP Reconciliation to Non-GAAP Financial Measure that accompany this document.4 For periods ended with a net loss, anti-dilutive financial instruments have been excluded from the calculation of GAAP diluted EPS. Operating diluted EPS calculations include the impact of outstanding equity-based awards for all periods.

EAGLE BANCORP, INC. CONTACT:Eric R. Newell240.497.1796

For the September 30, 2024 Earnings Presentation, click http://ml.globenewswire.com/Resource/Download/d55e221f-6ef9-45bd-8784-011bf19dce58

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