• Eagle Bancorp, Inc. Announces Net Income For Third Quarter 2023 Of $27.4 Million Or $0.91 Per Diluted Share

    ソース: Nasdaq GlobeNewswire / 25 10 2023 16:15:01   America/New_York

    BETHESDA, Md., Oct. 25, 2023 (GLOBE NEWSWIRE) -- Eagle Bancorp, Inc. (the "Company") (NASDAQ: EGBN), the parent company of EagleBank (the "Bank"), today announced net income of $27.4 million for the third quarter 2023, compared to net income of $28.7 million for the second quarter 2023 (the "prior quarter") and $37.3 million for the third quarter 2022 (the "year-ago quarter"). Net income (basic and diluted) was $0.91 per share for the third quarter 2023, compared to $0.94 per share for the prior quarter, and $1.16 per share for the year-ago quarter.

    The $1.3 million decrease in earnings from the prior quarter was attributable to several items including lower noninterest income as the prior quarter included nonrecurring recognition of income from a Small Business Investment Company ("SBIC") investment, lower net interest income as the cost of interest bearing liabilities outpaced income on interest-earning assets, and a reversal of $1.6 million of interest income because of a loan entering nonperforming status in the quarter.

    Susan G. Riel, President and Chief Executive Officer of the Company commented, "The Company's steady performance this quarter was the result of continued efforts of the EagleBank team to offer our customers the products and services they need to run their businesses. As a result, our earnings and margin, absent the reversal of interest income, continued to stabilize. Additionally, our funding mix improved with deposit inflows and paydowns of short-term debt, and our asset quality metrics and regulatory capital ratios remain strong.

    "The EagleBank team is working diligently to position the Company's balance sheet to enable appropriate diversification of assets and loans, and is building capabilities to drive core deposit growth. These strategies will position the Company for future sustainable growth and an enhanced earnings profile. I am excited about the future of EagleBank and its ability to serve our communities and customers through the successful execution of these strategies.   
      
    "We once again thank all of our employees for their commitment in serving the needs of our clients and communities. Additionally, we remain committed to a culture of respect, diversity and inclusion in both the workplace and the communities we serve."

    Third Quarter 2023 Highlights

    • The funding mix continued to improve as deposits at quarter-end were $8.4 billion, up $658 million, or 8.5%, from the prior quarter-end, and short-term borrowings declined $537 million, or 29.2%, ending at $1.3 billion. The increase in deposits was primarily from growth in savings and money market and time deposits. Brokered deposits were down $38 million, declining to 29.1% of deposits at quarter-end, from 32.1% a quarter ago. The decrease in borrowings was from repayment of all Federal Home Loan Bank ("FHLB") borrowings. Remaining short-term borrowings at quarter-end were entirely from the Bank Term Funding Program ("BTFP"), which remained unchanged from the prior quarter-end.
    • The net interest margin ("NIM") was 2.43% for the third quarter 2023, compared to 2.49% for the prior quarter. The reversal of $1.6 million of interest income, reduced the NIM by 6 basis points.
    • The Company declared a quarterly dividend of $0.45 per share.
    • At quarter-end, the common equity and tangible common equity ratios were 10.89% and 10.04%1, respectively.
    • Loans at quarter-end were $7.9 billion, up $150 million, or 1.9%, from the prior quarter-end. This was the eighth consecutive quarterly increase.
    • Nonperforming assets as a percentage of total assets was 0.64% and the net charge-off (annualized) for the quarter was 0.02% of average total loans.
    • The provision for credit losses was $5.6 million for the quarter, as compared to $5.2 million the prior quarter. The allowance for credit losses as a percent of total loans was 1.05% at quarter-end; up from 1.00% a quarter ago.
    • Total estimated uninsured deposits at September 30, 2023 were $2.5 billion2, or 29.6% of deposits.
    (Dollars in thousands, except per share data)As of or for the Three Months Ended Percent Change
     Sept. 30, June 30, Sept. 30, Q3-23 Q3-23
      2023   2023   2022  vs. Q2-23 vs. Q3-22
    Earnings and Per Share Data         
    Net Income$27,383  $28,692  $37,297  (4.6)% (26.6)%
    Earnings per common share (diluted)$0.91  $0.94  $1.16  (2.8)% (21.2)%
    Dividend per common share$0.45  $0.45  $0.45     
              
    Return Ratios         
    Return on average assets 0.91%  0.96%  1.29%    
    Return on average common equity 8.80%  9.24%  11.64%    
    Return on average tangible common equity1 9.61%  10.08%  12.67%    
    Net interest margin 2.43%  2.49%  3.02%    
    Efficiency ratio1 48.8%  47.2%  40.6%    
              
    Balance Sheet         
    Assets$11,164  $11,035  $10,713  1.2% 4.2%
    Loans$7,916  $7,767  $7,304  1.9% 8.4%
    Deposits$8,376  $7,718  $8,763  8.5% (4.4)%
    Borrowings$1,370  $1,907  $585  (28.2)% 134.3%
              
    Book and Tangible Book         
    Book value per common share$40.64  $40.78  $38.02  (0.3)% 6.9%
    Tangible book per common share1$37.12  $37.29  $34.77  (0.5)% 6.8%
              
    Capital Ratios         
    Equity/assets 10.89%  11.05%  11.39%    
    Tangible equity/assets 10.04%  10.21%  10.52%    
    Total capital (to risk weighted assets) 14.54%  14.51%  15.60%    
              
    Asset Quality         
    Allowance for credit losses to total loans 1.05%  1.00%  1.04%    
    Nonperforming assets ("NPAs") to total assets 0.64%  0.28%  0.09%    
    Net charge-off to average loans (annualized) 0.02%  0.29%  —%    

    Income Statement

    • Net interest income was $70.7 million for the third quarter 2023, compared to $71.8 million for the prior quarter and $83.9 million for the year-ago quarter. The decrease in net interest income from the prior quarter was primarily driven by the continued shift of deposit balances by customers from noninterest bearing demand deposits to interest bearing accounts. Loan interest income increased despite the reversal of $1.6 million of interest income because of a loan entering nonperforming status in the quarter.
    • Net interest margin ("NIM") was 2.43% for the third quarter 2023, compared to 2.49% for the prior quarter and 3.02% for the year-ago quarter. The reversal of $1.6 million of interest income, reduced the NIM by 6 basis points.
      • The yield on the loan portfolio was 6.73% for the third quarter 2023, compared to 6.64% for the prior quarter and 5.10% for the year-ago quarter. The increase of 9 basis points from the prior quarter was from variable rate loans adjusting upward and from higher rates on newly originated loans, offset by the reversal of $1.6 million of interest income. The reversal of interest income reduced the yield on the loan portfolio by 8 basis points.
      • The cost of funds was 3.39% for third quarter 2023, compared to 3.20% for the prior quarter and 1.09% for the year-ago quarter.3 The increase of 19 basis points from the prior quarter was primarily due to the impact of higher interest rates paid on deposits along with a continued shift in noninterest bearing deposit accounts to interest bearing deposit accounts.
    • Pre-provision net revenue ("PPNR"),4 a non-GAAP measure, was $39.4 million, or 1.31% of average assets for the third quarter 2023, down from $42.4 million and 1.43%, respectively. This decrease from the prior quarter in both PPNR and PPNR as a percent of average assets was primarily attributable to the prior quarter including nonrecurring Small Business Investment Company ("SBIC") income in noninterest income.
    (Dollars in thousands)Three Months Ended Percent Change
     Sept. 30, June 30, Sept. 30, Q3-23 Q3-23
      2023   2023   2022  vs. Q2-23 vs. Q3-22
    Net interest income$70,719  $71,811  $83,897  (1.5)% (15.7)%
    Noninterest income 6,347   8,595   5,308  (26.2)% 19.6%
    Noninterest expense (37,633)  (37,978)  (36,206) (0.9)% 3.9%
    PPNR (non-GAAP)$39,433  $42,428  $52,999  (7.1)% (25.6)%
              
    Average Assets$11,942,905  $11,960,111  $11,431,110  (0.1)% 4.5%
              
     As a Percent of Average Assets Basis Point Change
    Net interest income 2.35%  2.41%  2.91% (6) bps (56) bps
    Noninterest income 0.21%  0.29%  0.18% (8) bps 3 bps
    Noninterest expense(1.25)% (1.27)% (1.26)% 2 bps 1 bps
    PPNR to Average Assets (non-GAAP) 1.31%  1.43%  1.83% (12) bps (52) bps
    • Provision for credit losses on loans was $5.6 million for the third quarter 2023, compared to $5.2 million for the prior quarter and $3.0 million for the year-ago quarter. The increase in the third quarter 2023 provision over the prior quarter was primarily driven by increases in qualitative reserves combined with a smaller increase in the quantitative reserve. The increase in qualitative reserves was driven by increases in early-stage past dues and perceived weakness in the commercial real estate ("CRE") market. The increase in quantitative reserve was primarily due to loan growth during the quarter, particularly in longer-life categories that carry corresponding higher reserves as well as slowing prepayment speeds in certain loan categories due to higher interest rates, partly offset by modest improvements in the unemployment forecast.
    • Noninterest income was $6.3 million for the third quarter 2023, as compared to $8.6 million for the prior quarter and $5.3 million for the year-ago quarter. The primary driver for the decrease in the third quarter 2023 from the prior quarter was the prior quarter included nonrecurring income of $2.8 million from an SBIC fund.
    • Noninterest expense was $37.6 million for the third quarter 2023 compared to $38.0 million for the prior quarter and $36.2 million for the year-ago quarter. Noninterest expense was down $345 thousand from the prior quarter, primarily due to lower overall expenses offset by higher FDIC fees, which were up $761 thousand from the prior quarter on higher assessment fees.
    • Efficiency ratio5 was 48.8% for the third quarter 2023, compared to 47.2% for the prior quarter.
    • Effective income tax rate for the third quarter 2023 was 20.9%, compared to 22.2% for the prior quarter. The decrease in the effective tax rate this quarter was primarily driven by a reduction in the permanent tax adjustment for compensation to covered employees.

    Balance Sheet

    • Total assets were $11.2 billion at September 30, 2023, up 1.2% from a quarter ago and up 4.2% from a year ago. The increase in assets from a quarter ago was primarily from an increase in loans and interest bearing deposits with banks and other short-term investments, offset by lower balances on investment securities.
    • Investment securities had a balance of $2.5 billion at September 30, 2023, down 3.2% from a quarter ago and down 9.3% from a year ago. The decrease from the prior quarter-end was primarily from principal paydowns, maturities received and lower fair values on AFS securities. No new investments were purchased during the third quarter of 2023.

      Investment securities held-to-maturity had a fair value that was $160 million less than carrying value at quarter-end, compared to a difference of $132 million a quarter ago. The decrease in fair values from the prior quarter-end were primarily from the impact of the increasing interest rate environment on market valuations.
    • Total loans (excluding loans held for sale) were $7.9 billion at September 30, 2023, up 1.9% from a quarter ago and up 8.4% from a year ago. The increase in total loans from the prior quarter-end was driven by growth in CRE loans (income producing and owner occupied) and construction loans for commercial and residential properties as period-end balances for commercial & industrial loans were down.

      At September 30, 2023, income-producing commercial real estate loans secured by office properties other than owner-occupied properties ("CRE office loans") were 12.0% of the total loan portfolio. Our CRE office loans are primarily located in the Washington DC market; with 24.5% in the District of Columbia, 33.9% in Washington's Maryland suburbs, 34.0% in Northern Virginia, and 7.6% located outside these markets.
    (Dollars in thousands)Sept. 30, 2023 June 30, 2023 Sept. 30, 2022
     Amount% Amount% Amount%
    Loan Balances - Period End:        
    Commercial and Industrial$1,418,76018% $1,431,28418% $1,415,99819%
    PPP loans 588—%  649—%  7,241—%
    Commercial real estate - income producing 4,147,30152%  4,086,04953%  3,668,72050%
    Commercial real estate - owner occupied 1,182,95915%  1,122,33414%  1,091,28315%
    1-4 Family mortgage 76,5111%  76,5961%  71,7311%
    Construction - commercial and residential 904,28211%  862,86911%  858,10012%
    Construction - C&I (owner occupied) 129,6162%  132,8432%  139,2382%
    Home equity 53,9171%  53,9341%  51,3961%
    Other consumer 2,457—%  161—%  791—%
    Total loans$7,916,391100% $7,766,719100% $7,304,498100%
    • Allowance for credit losses was 1.05% of total loans at September 30, 2023, compared to 1.00% a quarter ago, and 1.04% a year ago. See commentary above in section "Provision for Credit Losses on Loans."

      Net charge-off was $340 thousand for the quarter, which as a percent of average loans (excluding loans held for sale)6 was 0.02% for the third quarter 2023, compared to 0.29% a quarter ago, and net recovery of less than 0.01% the year-ago quarter. Charge-offs for the third quarter 2023 were related to three SBA loans.
    • Nonperforming loans and assets were $70.4 million and $71.9 million, respectively, at September 30, 2023.
      • Nonperforming loans ("NPLs") as a percent of loans were 0.89% at September 30, 2023, compared to 0.37% a quarter ago and 0.10% a year ago. The increase from a quarter ago was primarily from the addition of one multi-family credit in the District of Columbia.
      • Nonperforming assets ("NPAs") as a percent of assets were 0.64% at September 30, 2023, compared to 0.28% a quarter ago and 0.09% a year ago. The increase in NPAs from the prior quarter are related to the same NPL discussed above. At quarter end, other real estate owned consisted of three properties with an aggregate value of $1.5 million.
      • Loans 30-89 days late were $46.5 million at September 30, 2023, up from $41.0 million a quarter ago and $16.2 million a year ago. The increase from the prior quarter was primarily from one office property in northern Virginia and one assisted living facility in Maryland, offset by the migration of the multi-family credit to nonperforming.
    (Dollars in thousands)Three Months Ended or As Of
     Sept. 30, June 30, Sept. 30,
     2023 2023 2022
    Asset Quality:     
    Net charge-off (recovery)$340 $5,598 $(57)
    Nonperforming loans$70,418 $29,098 $7,601 
    Other real estate owned$1,487 $1,487 $1,962 
    Nonperforming assets$71,905 $30,585 $9,563 
    Special mention$158,182 $155,810 $106,672 
    Substandard$219,001 $219,045 $89,724 
    • Total deposits were $8.4 billion at September 30, 2023, up 8.5% from a quarter ago and down 4.4% from a year ago. The increase from the prior quarter-end was primarily attributable to an increase in savings/money market and time deposits. Brokered deposits were 29.1% of deposits at quarter-end, down from 32.1% a quarter ago. The decrease in brokered funds as a percent of deposits was from both the increase in total deposits and a decline in brokered demand deposits. The increase in deposits lowered the loan-to-deposit ratio to 95% at September 30, 2023, down from 101% a quarter ago.

      For the quarter, average noninterest bearing deposits to average total deposits was 25.1% for the third quarter 2023, down from 30.1% a quarter ago and down from 38.4% for the year-ago quarter.

      Total estimated uninsured deposits at September 30, 2023 were $2.5 billion7, or 29.6% of deposits.
    • Other short-term borrowings were $1.3 billion at September 30, 2023, down from $1.8 billion a quarter ago, and up from $515 million a year ago. The decrease in borrowings of $537 million from a quarter ago was primarily driven by the pay down of all FHLB borrowings enabled by the increase in deposits. BTFP borrowings were $1.3 billion at September 30, 2023, unchanged from the prior quarter, with a rate of 4.53% for a term of up to one year from the date the proceeds were borrowed.

      As of September 30, 2023, the Company had aggregate available borrowing capacity of $2.3 billion, which includes $2.0 billion in additional aggregate capacity to borrow with the FHLB and BTFP on assets that have been pledged and unencumbered securities totaling approximately $270 million available for pledging to the FHLB or BTFP.
    • Total shareholders’ equity was $1.2 billion at September 30, 2023, down 0.3% from a quarter ago, and down 0.3% from a year ago. The decrease in shareholders' equity of $3.9 million from the prior quarter-end was primarily from lower valuations of AFS securities and dividends declared, partially offset by net income.
      • Book value per share was $40.64, down $0.14 from a quarter ago, and up $2.62 from a year ago.
      • Tangible book value per share8 was $37.12, down $0.17 from a quarter ago, and up $2.35 from a year ago.
    • Dividends: On September 27, 2023, the Board of Directors declared a quarterly cash dividend of $0.45 per share payable on October 31, 2023 to shareholders of record on October 20, 2023.
    • Stock Repurchases: There were no stock repurchases during the third quarter as the 2023 Stock Repurchase Plan was completed in the second quarter of 2023.
    • Capital ratios for the Company are in the table below. Regulatory capital ratios for the Company continue to be strong and in excess of the regulatory requirements (inclusive of applicable buffers).
     For the Company Regulatory
     Sept. 30, June 30, Sept. 30, Capital
     20239  2023  2022  Requirements
    Regulatory Capital Ratios       
    Total Capital (to risk weighted assets)14.54% 14.52% 15.60% 10.50%
    Tier 1 Capital (to risk weighted assets)13.68% 13.55% 14.64% 8.50%
    Common Equity Tier 1 (to risk weighted assets)13.68% 13.55% 14.64% 7.00%
    Tier 1 Capital (to average assets)10.96% 10.84% 11.55% 4.00%
            
    Common Capital Ratios       
    Common Equity Ratio10.89% 11.05% 11.39% — 
    Tangible Common Equity Ratio810.04% 10.21% 10.52% — 

    Additional financial information: The financial information that follows provides more detail on the Company’s financial performance for the three months ended September 30, 2023 as compared to the three months ended June 30, 2023 and September 30, 2022, 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, 2022, 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 thirteen 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 2023 financial results on Thursday, October 26, 2023 at 10:00 a.m. eastern time.

    The listen-only webcast can be accessed at:
    https://edge.media-server.com/mmc/p/iffrccgu/

    For analysts who wish to participate in the conference call, please register at the following URL:
    https://register.vevent.com/register/BIab5af7f55cc3442a8257605b6478c064

    A replay of the conference call will be available on the Company’s website through November 9, 2023:
    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 high 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, 2022 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. Information regarding the Company’s uninsured deposits consists of preliminary estimates, which are forward-looking statements and subject to change, possibly materially, as the Bank completes its third quarter 2023 Call Report. 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.

    1 A reconciliation between this non-GAAP financial measure and the nearest GAAP measure is provided in the tables that accompany this document.
    2 Estimated amount of uninsured deposits to be reported on line RCON5597 of schedule RC-O in the Bank's September 30, 2023 Call Report.
    3 Beginning in the second quarter of 2023, the Company revised its methodology for calculating cost of funds. Prior periods have been conformed to the current presentation. See footnote (3) on page 14.
    4 A reconciliation between this non-GAAP financial measure and the nearest GAAP measure is provided in the table below.
    5 A reconciliation between this non-GAAP financial measure and the nearest GAAP measure is provided in the tables that accompany this document.
    6 Net charge-offs as a percent of average loans (excluding loans held for sale) are shown on an annualized basis.
    7 Estimated amount of uninsured deposits to be reported on line RCON5597 of schedule RC-O in the Bank's September 30, 2023 Call Report.
    8 A reconciliation of non-GAAP financial measures to the nearest GAAP measure is provided in the tables that accompany this document.
    9 Capital ratios for September 30, 2023 are subject to final filings with the Federal Reserve.

    GAAP Reconciliation (unaudited)
    (dollars in thousands, except per share data)
          
     September 30, June 30, September 30,
      2023   2023   2022 
    Tangible equity and assets     
    Common shareholders' equity$1,215,884  $1,219,766  $1,219,771 
    Less: Intangible assets (105,239)  (104,220)  (104,240)
    Tangible common equity$1,110,645  $1,115,546  $1,115,531 
          
    Book value per common share$40.64  $40.78  $38.02 
    Less: Intangible book value per common share (3.52)  (3.49)  (3.25)
    Tangible book value per common share$37.12  $37.29  $34.77 
          
    Shares outstanding period end 29,917,982   29,912,082   32,082,321 
          
    Total assets$11,164,214  $11,034,741  $10,713,044 
    Less: Intangible assets (105,239)  (104,220)  (104,240)
    Tangible assets$11,058,975  $10,930,521  $10,608,804 
          
    Tangible common equity ratio 10.04%  10.21%  10.52%
          
     Three Months Ended
     September 30, June 30, September 30,
      2023   2023   2022 
    Average tangible common equity     
    Average common shareholders' equity$1,235,162  $1,245,647  $1,271,753 
    Less: Average intangible assets (104,639)  (104,224)  (104,253)
    Average tangible common equity$1,130,523  $1,141,423  $1,167,500 
          
    Return on Average Tangible Common Equity 9.61%  10.08%  12.67%
          
    Efficiency ratio     
    Net interest income$70,719  $71,811  $83,897 
    Noninterest income 6,347   8,595   5,308 
    Operating revenue$77,066  $80,406  $89,205 
          
    Noninterest expense$37,633  $37,978  $36,206 
          
    Efficiency ratio 48.8%  47.2%  40.6%
          

    GAAP Reconciliation - Notes

    Tangible common equity to tangible assets (the "tangible common equity ratio"), tangible book value per common share, average tangible common equity, and the 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 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 considers this information important to shareholders as 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 above tables provide reconciliations of these financial measures defined by GAAP with non-GAAP financial measures.

    Efficiency ratio is a non-GAAP measure calculated by dividing GAAP non-interest expense by the sum of GAAP net interest income and GAAP non-interest (loss) income. The Company believes that reporting the non-GAAP efficiency ratio more closely measures its effectiveness of controlling operational activities. The table above shows the calculation of the efficiency ratio from these GAAP measures.

    PPNR is a non-GAAP financial measure derived from GAAP based amounts. The Company calculates PPNR by subtracting noninterest expenses from the sum of net interest income and noninterest income. PPNR to Average Assets is calculated by dividing the PPNR amount by average assets to obtain a percentage. 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. The table in the "Income Statement" section of this earnings release provides a reconciliation of the nearest GAAP measure to PPNR and PPNR to Average Assets.

    Eagle Bancorp, Inc.
    Consolidated Balance Sheets (Unaudited)
    (Dollars in thousands, except per share data)
     September 30, June 30, September 30,
    Assets 2023   2023   2022 
    Cash and due from banks$8,625  $9,865  $27,235 
    Federal funds sold 13,611   3,981   69,809 
    Interest-bearing deposits with banks and other short-term investments 235,819   174,072   47,131 
    Investment securities available-for-sale at fair value (amortized cost of $1,700,233, $1,732,722, and $1,873,872, net of allowance for credit losses of $17, $17 and $18 as of September 30, 2023, June 30, 2023 and September 30, 2022, respectively) 1,474,945   1,535,589   1,649,753 
    Investment securities held-to-maturity at amortized cost, net of allowance for credit losses of $2,010, $2,010 and $802 (fair value of $872,710, $923,313 and $989,001, as of September 30, 2023, June 30, 2023 and September 30, 2022, respectively) 1,032,485   1,055,181   1,114,084 
    Federal Reserve and Federal Home Loan Bank stock 25,689   46,199   42,311 
    Loans held for sale —   —   9,387 
    Loans 7,916,391   7,766,719   7,304,498 
    Less allowance for credit losses (83,332)  (78,029)  (75,767)
    Loans, net 7,833,059   7,688,690   7,228,731 
    Premises and equipment, net 11,216   11,979   13,684 
    Operating lease right-of-use assets 20,151   21,580   26,022 
    Deferred income taxes 98,987   92,574   112,904 
    Bank-owned life insurance 112,234   111,565   110,678 
    Goodwill and intangible assets, net 105,239   104,220   104,240 
    Other real estate owned 1,487   1,487   1,962 
    Other assets 190,667   177,759   155,113 
    Total assets$11,164,214  $11,034,741  $10,713,044 
    Liabilities and Shareholders' Equity     
    Deposits:     
    Noninterest bearing demand$2,072,665  $2,010,353  $2,928,774 
    Interest bearing transaction 932,779   930,308   964,567 
    Savings and money market 3,129,773   2,791,040   4,220,768 
    Time deposits 2,241,089   1,986,426   649,241 
    Total deposits 8,376,306   7,718,127   8,763,350 
    Customer repurchase agreements 25,689   37,017   21,465 
    Other short-term borrowings 1,300,001   1,836,759   515,000 
    Long-term borrowings 69,887   69,856   69,763 
    Operating lease liabilities 24,422   26,007   30,837 
    Reserve for unfunded commitments 6,183   7,023   5,696 
    Other liabilities 145,842   120,186   87,162 
    Total liabilities 9,948,330   9,814,975   9,493,273 
    Shareholders' Equity     
    Common stock, par value $.01 per share; shares authorized 100,000,000, shares issued and outstanding 29,917,982, 29,912,082, and 32,082,321 respectively 296   296   318 
    Additional paid in capital 372,394   370,278   442,880 
    Retained earnings 1,054,699   1,040,779   987,212 
    Accumulated other comprehensive loss (211,505)  (191,587)  (210,639)
    Total Shareholders' Equity 1,215,884   1,219,766   1,219,771 
    Total Liabilities and Shareholders' Equity$11,164,214  $11,034,741  $10,713,044 


    Eagle Bancorp, Inc.
    Consolidated Statements of Income (Unaudited)
    (Dollars in thousands, except per share data)
     Three Months Ended
     September 30 June 30, September 30,
      2023  2023 2022
    Interest Income     
    Interest and fees on loans$132,273  $128,993 $93,744
    Interest and dividends on investment securities 13,732   14,241  13,463
    Interest on balances with other banks and short-term investments 15,067   13,229  4,100
    Interest on federal funds sold 77   47  220
    Total interest income 161,149   156,510  111,527
          
    Interest Expense     
    Interest on deposits 70,929   59,422  26,125
    Interest on customer repurchase agreements 311   333  55
    Interest on other short-term borrowings 18,152   23,907  412
    Interest on long-term borrowings 1,038   1,037  1,038
    Total interest expense 90,430   84,699  27,630
    Net Interest Income 70,719   71,811  83,897
    Provision for Credit Losses 5,644   5,238  3,022
    (Reversal of) Provision for Credit Losses for Unfunded Commitments (839)  318  774
    Net Interest Income After (Reversal of) Provision For Credit Losses 65,914   66,255  80,101
          
    Noninterest Income     
    Service charges on deposits 1,631   1,626  1,339
    (Loss) Gain on sale of loans (5)  95  821
    Net gain on sale of investment securities 5   2  4
    Increase in cash surrender value of bank-owned life insurance 669   648  631
    Other income 4,047   6,224  2,513
    Total noninterest income 6,347   8,595  5,308
          
    Noninterest Expense     
    Salaries and employee benefits 21,549   21,957  21,538
    Premises and equipment expenses 3,095   3,227  3,275
    Marketing and advertising 768   884  1,181
    Data processing 3,194   3,354  3,445
    Legal, accounting and professional fees 2,162   2,649  2,332
    FDIC insurance 3,342   2,581  1,287
    Other expenses 3,523   3,326  3,148
    Total noninterest expense 37,633   37,978  36,206
    Income Before Income Tax Expense 34,628   36,872  49,203
    Income Tax Expense 7,245   8,180  11,906
    Net Income$27,383  $28,692 $37,297
          
    Earnings Per Common Share     
    Basic$0.91  $0.94 $1.16
    Diluted$0.91  $0.94 $1.16


    Eagle Bancorp, Inc.
    Consolidated Average Balances, Interest Yields And Rates vs. Prior Quarter (Unaudited)
    (Dollars in thousands)
                
     Three Months Ended
     September 30, 2023 June 30, 2023
     Average
    Balance    		 Interest Average
    Yield/Rate    		 Average
    Balance    		 Interest Average
    Yield/Rate
    ASSETS           
    Interest earning assets:           
    Interest bearing deposits with other banks and other short-term investments$1,127,451 $15,067 5.30% $1,053,961 $13,229 5.03%
    Loans held for sale(1) —  — —%  813  13 6.41%
    Loans(1) (2) 7,795,144  132,273 6.73%  7,790,555  128,980 6.64%
    Investment securities available-for-sale(2) 1,554,348  8,126 2.07%  1,626,330  8,526 2.10%
    Investment securities held-to-maturity(2) 1,047,515  5,606 2.12%  1,068,755  5,715 2.14%
    Federal funds sold 7,728  77 3.95%  5,636  47 3.34%
    Total interest earning assets 11,532,186 $161,149 5.54%  11,546,050 $156,510 5.44%
    Total noninterest earning assets 489,683      492,426    
    Less: allowance for credit losses 78,964      78,365    
    Total noninterest earning assets 410,719      414,061    
    TOTAL ASSETS$11,942,905     $11,960,111    
                
    LIABILITIES AND SHAREHOLDERS' EQUITY          
    Interest bearing liabilities:           
    Interest bearing transaction$1,421,522 $12,785 3.57% $1,312,710 $10,640 3.25%
    Savings and money market 3,113,755  32,855 4.19%  2,967,678  30,861 4.17%
    Time deposits 2,162,582  25,289 4.64%  1,675,690  17,921 4.29%
    Total interest bearing deposits 6,697,859  70,929 4.20%  5,956,078  59,422 4.00%
    Customer repurchase agreements 36,082  311 3.42%  41,105  333 3.25%
    Other short-term borrowings 1,540,221  18,152 4.68%  1,991,557  23,907 4.81%
    Long-term borrowings 69,876  1,038 5.89%  69,845  1,037 5.96%
    Total interest bearing liabilities 8,344,038 $90,430 4.30%  8,058,585 $84,699 4.22%
    Noninterest bearing liabilities:           
    Noninterest bearing demand 2,248,782      2,558,860    
    Other liabilities 114,923      97,019    
    Total noninterest bearing liabilities 2,363,705      2,655,879    
    Shareholders’ equity 1,235,162      1,245,647    
    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$11,942,905     $11,960,111    
    Net interest income  $70,719     $71,811  
    Net interest spread    1.24%     1.22%
    Net interest margin    2.43%     2.49%
    Cost of funds    3.39%     3.20%

    (1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $4.1 million and $4.2 million for the three months ended September 30, 2023 and June 30, 2023, 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,
      2023   2022 
     Average
    Balance    		 Interest Average
    Yield/Rate    		 Average
    Balance    		 Interest Average
    Yield/Rate
    ASSETS           
    Interest earning assets:           
    Interest bearing deposits with other banks and other short-term investments$1,127,451 $15,067 5.30% $771,063 $4,100 2.11%
    Loans held for sale(1) —  — —%  11,586  150 5.14%
    Loans(1) (2) 7,795,144  132,273 6.73%  7,282,589  93,594 5.10%
    Investment securities available-for-sale(2) 1,554,348  8,126 2.07%  1,782,859  7,587 1.69%
    Investment securities held-to-maturity(2) 1,047,515  5,606 2.12%  1,128,943  5,876 2.06%
    Federal funds sold 7,728  77 3.95%  53,630  220 1.63%
    Total interest earning assets 11,532,186 $161,149 5.54%  11,030,670 $111,527 4.01%
    Total noninterest earning assets 489,683      475,581    
    Less: allowance for credit losses 78,964      75,141    
    Total noninterest earning assets 410,719      400,440    
    TOTAL ASSETS$11,942,905     $11,431,110    
                
    LIABILITIES AND SHAREHOLDERS' EQUITY          
    Interest bearing liabilities:           
    Interest bearing transaction$1,421,522 $12,785 3.57% $960,970 $1,891 0.78%
    Savings and money market 3,113,755  32,855 4.19%  4,504,216  21,711 1.91%
    Time deposits 2,162,582  25,289 4.64%  633,241  2,523 1.58%
    Total interest bearing deposits 6,697,859  70,929 4.20%  6,098,427  26,125 1.70%
    Customer repurchase agreements 36,082  311 3.42%  26,546  55 0.82%
    Other short-term borrowings 1,540,221  18,152 4.68%  61,703  412 2.65%
    Long-term borrowings 69,876  1,038 5.89%  69,752  1,038 5.90%
    Total interest bearing liabilities 8,344,038 $90,430 4.30%  6,256,428 $27,630 1.75%
    Noninterest bearing liabilities:           
    Noninterest bearing demand 2,248,782      3,809,070    
    Other liabilities 114,923      93,859    
    Total noninterest bearing liabilities 2,363,705      3,902,929    
    Shareholders’ equity 1,235,162      1,271,753    
    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$11,942,905     $11,431,110    
    Net interest income  $70,719     $83,897  
    Net interest spread    1.24%     2.26%
    Net interest margin    2.43%     3.02%
    Cost of funds(3)    3.39%     1.09%

    (1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $4.1 million and $3.4 million for the three months ended September 30, 2023 and September 30, 2022, respectively.
    (2) Interest and fees on loans and investments exclude tax equivalent adjustments.
    (3) Beginning in the second quarter of 2023, the Company revised its cost of funds methodology to use a daily average calculation where interest expense on interest bearing liabilities is divided by average interest bearing liabilities and average noninterest bearing deposits. Previously, the Company calculated the cost of funds as the difference between yield on earning assets and net interest margin.

    Eagle Bancorp, Inc.
    Statements of Income 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: 2023   2023   2023   2022   2022   2022   2022   2021 
    Total interest income$161,149  $156,510  $140,247  $129,130  $111,527  $95,635  $88,321  $86,230 
    Total interest expense 90,430   84,699   65,223   43,530   27,630   12,717   7,869   8,044 
    Net interest income 70,719   71,811   75,024   85,600   83,897   82,918   80,452   78,186 
    Provision for (reversal of) credit losses 5,644   5,238   6,164   (464)  3,022   495   (2,787)  (6,412)
    Provision for (reversal of) unfunded commitments (839)  318   848   161   774   553   (11)  (632)
    Net interest income after provision for credit losses 65,914   66,255   68,012   85,903   80,101   81,870   83,250   85,230 
    Noninterest income before investment gain (loss) 6,342   8,593   3,721   5,326   5,304   5,715   7,478   9,668 
    Net gain (loss) on sale of investment securities 5   2   (21)  3   4   (151)  (25)  906 
    Total noninterest income 6,347   8,595   3,700   5,329   5,308   5,564   7,453   10,574 
    Salaries and employee benefits 21,549   21,957   24,174   23,691   21,538   21,805   17,019   24,608 
    Premises and equipment 3,095   3,227   3,317   3,292   3,275   3,523   3,128   3,755 
    Marketing and advertising 768   884   636   1,290   1,181   1,186   1,064   1,286 
    Other expenses 12,221   11,910   12,457   10,645   10,212   32,448   9,801   9,660 
    Total noninterest expense 37,633   37,978   40,584   38,918   36,206   58,962   31,012   39,309 
    Income before income tax expense 34,628   36,872   31,128   52,314   49,203   28,472   59,691   56,495 
    Income tax expense 7,245   8,180   6,894   10,121   11,906   12,776   13,947   14,875 
    Net income$27,383  $28,692  $24,234  $42,193  $37,297  $15,696  $45,744  $41,620 
    Per Share Data:               
    Earnings per weighted average common share, basic$0.91  $0.94  $0.78  $1.32  $1.16  $0.49  $1.43  $1.30 
    Earnings per weighted average common share, diluted$0.91  $0.94  $0.78  $1.32  $1.16  $0.49  $1.42  $1.30 
    Weighted average common shares outstanding, basic 29,910,218   30,454,766   31,109,267   31,819,631   32,084,464   32,080,657   32,033,280   31,950,320 
    Weighted average common shares outstanding, diluted 29,944,692   30,505,468   31,180,346   31,898,619   32,155,678   32,142,427   32,110,099   32,030,998 
    Actual shares outstanding at period end 29,917,982   29,912,082   31,111,647   31,346,903   32,082,321   32,081,241   32,079,474   31,950,092 
    Book value per common share at period end$40.64  $40.78  $39.92  $39.18  $38.02  $39.05  $39.89  $42.28 
    Tangible book value per common share at period end(1)$37.12  $37.29  $36.57  $35.86  $34.77  $35.80  $36.64  $38.97 
    Dividend per common share$0.45  $0.45  $0.45  $0.45  $0.45  $0.45  $0.40  $0.40 
    Performance Ratios (annualized):               
    Return on average assets 0.91%  0.96%  0.86%  1.49%  1.29%  0.54%  1.46%  1.32%
    Return on average common equity 8.80%  9.24%  7.92%  13.57%  11.64%  4.91%  13.83%  12.30%
    Return on average tangible common equity(1) 9.61%  10.08%  8.65%  14.82%  12.67%  5.35%  14.99%  13.35%
    Net interest margin 2.43%  2.49%  2.77%  3.14%  3.02%  2.94%  2.65%  2.55%
    Efficiency ratio(2) 48.8%  47.2%  51.6%  42.8%  40.6%  66.6%  35.3%  44.3%
    Other Ratios:               
    Allowance for credit losses to total loans(3) 1.05%  1.00%  1.01%  0.97%  1.04%  1.02%  1.01%  1.06%
    Allowance for credit losses to total nonperforming loans 118%  268%  1,160%  1,151%  997%  386%  301%  257%
    Nonperforming loans to total loans(3) 0.89%  0.37%  0.09%  0.08%  0.10%  0.26%  0.33%  0.41%
    Nonperforming assets to total assets 0.64%  0.28%  0.08%  0.08%  0.09%  0.19%  0.23%  0.26%
    Net charge-off (recovery)(annualized) to average total loans(3) 0.02%  0.29%  0.05%  0.05%  —% (0.04)%  0.03%  0.07%
    Tier 1 capital (to average assets) 10.96%  10.84%  11.42%  11.63%  11.55%  10.68%  9.82%  10.19%
    Total capital (to risk weighted assets) 14.54%  14.51%  14.74%  14.94%  15.60%  15.14%  15.21%  15.74%
    Common equity tier 1 capital (to risk weighted assets) 13.68%  13.55%  13.75%  14.03%  14.64%  14.06%  14.12%  14.63%
    Tangible common equity ratio(1) 10.04%  10.21%  10.36%  10.18%  10.52%  10.60%  10.57%  10.60%
    Average Balances (in thousands):               
    Total assets$11,942,905  $11,960,111  $11,426,056  $11,255,956  $11,431,110  $11,701,679  $12,701,152  $12,538,596 
    Total earning assets$11,532,186  $11,546,050  $11,004,817  $10,829,703  $11,030,670  $11,300,267  $12,326,473  $12,180,872 
    Total loans(3)$7,795,144  $7,790,555  $7,712,023  $7,379,198  $7,282,589  $7,104,727  $7,053,701  $6,890,414 
    Total deposits$8,946,641  $8,514,938  $8,734,125  $9,524,139  $9,907,497  $10,184,886  $10,874,976  $10,670,206 
    Total borrowings$1,646,179  $2,102,507  $1,359,463  $411,060  $158,001  $152,583  $371,987  $402,393 
    Total shareholders’ equity$1,235,162  $1,245,647  $1,240,978  $1,233,705  $1,271,753  $1,281,742  $1,341,785  $1,342,525 

    (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.

    EAGLE BANCORP, INC.
    CONTACT:
    David G. Danielson
    240.552.9534

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