• Eagle Bancorp, Inc. Announces Record Net Income for First Quarter 2021 of $43.5 Million or $1.36 per Share

    ソース: Nasdaq GlobeNewswire / 21 4 2021 15:30:01   America/Chicago

    BETHESDA, Md., April 21, 2021 (GLOBE NEWSWIRE) -- Eagle Bancorp, Inc. (the “Company”) (NASDAQ: EGBN), the parent company of EagleBank (the “Bank”), today announced record net income of $43.5 million for the first quarter of 2021, as compared to $23.1 million net income for the first quarter of 2020, an 88% increase. Net income per basic and diluted common share for the first quarter of 2021 was $1.36 compared to $0.70 for the first quarter of 2020, a 94% increase. The increase in earnings is largely due to the first quarter of 2021 including a reversal of the provision for credit losses and significant gain on sale of residential mortgages, whereas the first quarter of 2020 included provisions for credit losses at the beginning of the COVID-19 pandemic, as well as, mark-to-market losses related to a hedge position on mortgage operations.

    First Quarter 2021 Highlights

    • Income Statement
      • Net income of $43.5 million
      • Total revenue of $93.2 million (up 9.4% from a year ago)
      • Reversal of allowance for credit losses of $2.4 million
      • Net interest margin of 2.98%
      • Return on average assets ("ROAA") of 1.53%
      • Return on average common equity ("ROACE") of 14.05%
      • Return on average tangible common equity ("ROATCE") of 15.33%1
      • Efficiency ratio of 40.7%
    • Balance Sheet
      • Assets of $11.1 billion
      • Book value per share of $39.45 (up 9.2% from a year ago)
      • Tangible book value per share of $36.16 (up 10.0% from a year ago)1
      • Total risk based capital ratio of 17.86%
      • Annualized net charge-off ratio to average loans of 0.27%
      • Nonperforming assets to total assets of 0.51%
      • Allowance for credit losses to total loans of 1.36%

    ____________________
    1     A reconciliation of non-GAAP financial measures to the nearest non-GAAP measure is provided in the tables that accompany this document.

    Susan G. Riel, President and Chief Executive Officer of Eagle Bancorp, Inc. commented, "We ended the first quarter of 2021 with record net income, continued strengthening in asset quality and a high level of capital. Earnings included a reversal to the allowance for credit losses as our outlook on the economy has improved, and another large gain on sale of residential mortgages from our residential mortgage division, which continues to generate strong results. For the quarter, we generated net income of $43.5 million with an ROAA of 1.53%, ROACE of 14.05% and a ROATCE2 of 15.33%."

    "These earnings continue to demonstrate balanced financial performance including our ability to manage an efficient bank and we remain a leader among our peers with an efficiency ratio for the quarter of 40.7%. As an example of our expense management, during the quarter we relocated two branches with expiring leases to better locations nearby and consolidated two back-office locations, also with expiring leases, into a single new location, saving about $460,000 annually in rental expenses."

    "While loan demand remains challenged during the pandemic, our earnings continue to generate capital that we expect will enable us to hit the ground running when economic activity and business openings expand. We believe the Washington, D.C. area is one of the most resilient and strongest economies in the nation and we remain optimistic about the reopening of businesses, and the positive impact the government stimulus will have on the regional economy. At quarter end, our shareholders equity reached $1.26 billion and our total risk-based capital was 17.86%. This gives us the ability to originate loans for large commercial projects, as well as a lot of runway to grow the loan portfolio when economic conditions improve and more opportunities arise."

    "For our shareholders, at the end of the quarter our board increased the dividend to $0.25 per share, our first increase since the dividend was re-instituted in the second quarter of 2019. We also authorized a new stock repurchase plan in December 2020."

    "We once again thank all of our employees for their commitment and diligence in serving the needs of our clients and communities and following safe health practices. As we look toward summer with optimism, we remain focused on strong and balanced operating performance. We will continue to proactively manage any asset quality concerns while delivering best-in-class service to our customers. We will continue to exercise prudent oversight of expenses, while retaining an infrastructure that is competitive, supports our growth initiatives, and proactively enhances our risk management systems as we position ourselves for future growth.”

    Income Statement

    • Net interest income was $82.7 million in the first quarter of 2021, up from $79.7 million in the first quarter of 2020. The increase of $3.0 million was primarily from a 22% increase in average earning assets partially offset by a reduction in net interest margin.

    • Net interest margin was 2.98% for the first quarter of 2021, as compared to 3.49% for the first quarter of 2020. The decrease in margin primarily reflects a lower rate environment, significantly higher cash balances from strong deposit inflows and lower rates on Paycheck Protection Program ("PPP") loans.
    • Pre-provision net revenue ("PPNR")3 was $55.3 million in the first quarter of 2021, up from $47.9 million in the first quarter of 2020. As a percent of average assets, PPNR in the first quarter of 2021 was 1.95%, down from 2.04% in the first quarter of 2020. This decline was a result of a 15.4% increase in PPNR being outpaced by a 21.9% increase in average assets.

    ____________________
    2     A reconciliation of non-GAAP financial measures to the nearest non-GAAP measure is provided in the tables that accompany this document.

    ($ in thousands)Three Months Ended
     March 31, 2021 March 31, 2020
    Net interest income (GAAP)$82,651   $79,744  
    Non-interest income (GAAP)10,587   5,470  
    Non-interest expense (GAAP)(37,987)  (37,347) 
    Pre-provision net revenue (non-GAAP)$55,251   $47,867  
        
    Average Assets (GAAP)$11,517,836   $9,447,663  
    PPNR to Average Assets (non-GAAP)1.95 % 2.04 %
            
    • Provision for credit losses resulted in a reversal of $2.4 million in the first quarter of 2021, as compared to a provision of $14.3 million for the first quarter 2020. The reversal was driven by the improved macroeconomic outlook, improvement of credits in the loan portfolio and a reduction in total loans.

    • Net charge-offs were $5.2 million in the first quarter of 2021 as compared to $2.2 million in the first quarter of 2020. On an annualized basis, this was 0.27% of average loans (excluding loans held for sale) in the first quarter of 2021, as compared 0.12% in the first quarter of 2020. Charge-offs in the first quarter of 2021 were mostly a variety of commercial C&I credits, which included two restaurants, one commercial real estate credit for a hotel and two Small Business Administration ("SBA") credits.

    • Noninterest income was $10.6 million in the first quarter of 2021, as compared to $5.5 million for the first quarter 2020, a 94% increase. The increase was primarily due to a substantially higher gain on the sale of loans of $5.2 million and a $911 thousand gain from the cancellation of an FHLB borrowing for the first quarter of 2021 as compared to $0.9 million for the first quarter of 2020 (which included $2.6 million in hedge and mark-to-market losses). Residential mortgage loan locked commitments were $303.3 million for the first quarter of 2021 as compared to $422.2 million for the first quarter of 2020.

    • Noninterest expenses were $38.0 million for the first quarter of 2021 as compared to $37.3 million for the first quarter 2020, a 2% increase. The major changes between the two quarters were as follows:

      • Salaries and employee benefits were up $4.0 million as the number of employees increased, the incentive bonus accruals based on economic outlook were higher in the first quarter of 2021 (due to the gradual reopening of the economy) than in the first quarter of 2020 (due to the onset of the COVID-19 pandemic) and an increase in share based compensation awards and vesting in 2021.
      • Legal, accounting and professional fees were down $4.0 million in the first quarter of 2021, as the first quarter of 2020 included elevated expenses from previously disclosed litigation.
      • FDIC expenses were up $1.0 million off a higher deposit base.
    • Efficiency ratio was 40.7% for the first quarter of 2021, an improvement from 43.8% for the first quarter of 2020. The improvement in the first quarter of 2021 over the first quarter of 2020 was from increases in noninterest income and net interest income, while non-interest expenses remained relatively flat.

    • Effective income tax rate for the first quarter of 2021 was 25.1% as compared to 26.5% for the first quarter of 2020. The decrease was due primarily to an increase in Low Income Housing Tax Credits in the first quarter of 2021.

    ____________________
    3 A reconciliation of non-GAAP financial measures to the nearest non-GAAP measure is provided in the table below.

    Balance Sheet

    • Total assets at March 31, 2021 were $11.1 billion, up less than 1% from the prior quarter-end and up 11.4% from a year ago. The increase in assets over assets from a year ago was primarily driven by deposit inflows in the second and third quarters of 2020.

    • Total loans (excluding loans held for sale) were $7.5 billion as of March 31, 2021, a decrease of 3.0% from the prior quarter end and a decrease of 4.0% from a year ago. If PPP loans were excluded, the balance was $7.0 billion4 at March 31, 2021, a decrease of 4.7% from the prior quarter end and a decrease of 11.2% from a year ago. We have continued to focus on serving our current loan clients and maintaining credit quality, over expanding the loan portfolio at lower rates and less favorable terms.

    ($ in thousands)March 31, 2021 December 31, 2020 March 31, 2020
          
    Total loans, excluding loans held for sale (GAAP)$7,526,689   7,760,212   7,840,873  
    Less: PPP loans(565,018)  (454,771)  $—  
    Total loans, excluding loans held for sale and PPP loans (Non-GAAP)$6,961,671   $7,305,441   $7,840,873  
     
    • Allowance for credit losses was 1.36% of gross loans, compared to 1.41% the prior quarter-end and 1.23% a year ago. Adjusted to exclude PPP loans, which are fully government guaranteed, the allowance for credit losses was 1.47%5, compared to 1.50% the prior quarter end and 1.23% a year ago. The reduction in the allowance for credit losses in the first quarter of 2021, is due to a provision reversal of $2.4 million and net charge-offs of $5.2 million.

    ____________________
    4 A reconciliation of GAAP to non-GAAP financial measures is provided below.
    5 A reconciliation of GAAP to non-GAAP financial measures is provided below.

    ($ in thousands)March 31, 2021 December 31, 2020 March 31, 2020
          
    Allowance for credit losses, adjusted     
    Allowance for credit losses$102,070   $109,579   $96,336  
          
    Total loans (GAAP)$7,526,689   $7,760,212   $7,840,873  
    Less: PPP loans(565,018)  (454,771)  —  
    Total loans excluding PPP loans (non-GAAP)$6,961,671   $7,305,441   $7,840,873  
          
    Allowance for credit losses to total loans (GAAP)1.36 % 1.41 % 1.23 %
    Allowance for credit losses to total loans excluding PPP loans (non-GAAP)1.47 % 1.50 % 1.23 %
                
    • Investment portfolio had a balance of $1.4 billion at March 31, 2021, up $218 million or 18.9% from the prior quarter end and up $510 million or 59.4% from a year ago. Investments made during the quarter were primarily 20 year, 2% agency mortgage backed securities and callable agency bonds. We continue to judiciously deploy excess liquidity in to the investment portfolio to achieve higher yields over cash alternatives.
    • Total deposits were $9.2 billion at March 31, 2021, up $9.6 million or 0.1% from the prior quarter end, and up $1.1 billion or 13.0% from a year ago. Deposit growth slowed in the first quarter of 2021 which allowed the Bank to reduce its excess liquidity as it deployed funds into the investment portfolio.

    • Total shareholders’ equity was $1.26 billion at March 31, 2021, up $19.9 million or 1.6% from the prior quarter end, and up $98.1 million or 8.4% from a year ago. In the first quarter of 2021, the increases in stockholders equity were partially offset by common dividends declared of $7.9 million and stock repurchases of $62 thousand.

      • Book value per share was $39.45, up 1.0% from the prior quarter end and up 9.2% from a year ago.
      • Tangible book value per share was $36.166, up 1.2% from the prior quarter end and up 10.0% from a year ago.

    • Capital ratios for the Company remain strong and substantially in excess of regulatory minimum requirements. Regulatory ratios based on risk based capital ratios continue to trend up, driven by strong earnings and declines in risk weighted assets, including relatively little change in outstanding loans. Tier 1 Capital which was adversely impacted by the increase in average assets, trended down.

    ____________________
    6 A reconciliation of non-GAAP financial measures to the nearest non-GAAP measure is provided in the tables that accompany this document.

     For the Company
     March 31, 2021 December 31, 2020 March 31, 2020 Well Capitalized Minimum
    Regulatory Ratios       
    Total Capital (to risk weighted assets)17.86% 17.04% 15.44% 10.00%
    Tier 1 Capital (to risk weighted assets)14.42% 13.49% 12.14% 8.00%
    Common Equity Tier 1 (to risk weighted assets)14.42% 13.49% 12.14% 6.50%
    Tier 1 Capital (to average assets)10.28% 10.31% 11.33% 5.00%
            
    Common Capital Ratios       
    Common Equity Ratio11.33% 11.16% 11.64% —%
    Tangible Common Equity Ratio10.48% 10.31% 10.70% —%
                

    Additional Commentary

    • Stock repurchase plan: In December 2020, the Board of Directors approved a new stock repurchase plan of up to 1,588,848 shares, or approximately 5% of shares outstanding, which commenced January 1, 2021. In the first quarter of 2021, the Company completed repurchases of 1,466 shares for $62,000 at an average cost of $42.46 per share under the Stock Repurchase Plan.

    • Increase in the dividend: On March 31, 2021, the Board of Directors declared a quarterly cash dividend of $0.25 per common share payable on May 3, 2021 to shareholders of record on April 21, 2021. This was an increase over the prior quarterly dividend of $0.22 per share that had been in place since the second quarter of 2019.

    • Deposit mix: The Company continues to emphasize achieving core deposit growth. The mix of average noninterest deposits to average total deposits remained favorable at 32% in the first quarter of 2021, as compared to 29% in the first quarter of 2020. In the first quarter of 2021, CDs with a total balance of $230.9 million with a weighted average rate of 1.69% matured. These CDs had weighted average term of 18 months at issuance.

    • Loans closed/payoffs: We continue to seek well structured new loan opportunities. Loan payoffs in the first quarter of 2021 continued at a level similar to the fourth quarter of 2020. With new loan closings down, total loan balances (excluding loans held for sale and PPP loans) fell $344 million from the prior quarter end. Unfunded commitments declined to $1.9 billion as of March 31, 2021 as compared to $2.1 billion a year ago.

    • Loan yields: In addition to the current sharply lower interest rate environment which continued from 2020, we have focused less on higher risk and higher yielding construction lending and more on strong commercial real estate credits secured by stabilized income producing properties.

      • The yield on the loan portfolio was 4.65% for the first quarter of 2021 as compared to 5.07% for the first quarter of 2020.
      • Loan yields, excluding lower yielding PPP loans, was 4.73%7 in the first quarter of 2021, as compared to 5.07% in the first quarter of 2020.

    ($ in thousands)Three Months Ended
     March 31, 2021 March 31, 2020
     Average Balance Interest Average
    Yield/Rate    		 Average Balance Interest Average
    Yield/Rate
    Loan Yields, Adjusted           
    Loan yield (GAAP)$7,726,716  $88,499  4.65% $7,650,993  $96,401  5.07%
    PPP Loan yield (non-GAAP) 516,317   4,452  3.50%  —   —  —%
    Loans yield, excluding PPP loans (non-GAAP) 7,210,399   84,047  4.73%  7,650,993   96,401  5.07%
     
    • Paycheck protection program: As a SBA preferred lender, the Bank actively participated in the PPP, and at March 31, 2021 had an outstanding balance of PPP loans of $565.0 million. During the first quarter of 2021, PPP originations were $192.7 million and the PPP loans balances forgiven were $82.9 million.

    • COVID-19 loan deferrals: At March 31, 2021, 58 notes were deferred with outstanding balances of $143.4 million, which was 1.9% of total loans.

    • Industry segments impacted by COVID-19: Industry segments which we believe may have heightened risk from the COVID-19 pandemic are as follows:

    ($ in thousands)March 31, 2021
     Principal Balance % of Total Loans
    Industry   
    Accommodation and Food Service$807,237  10.7%
    Retail Trade85,878  1.1%
        
    Commercial Real Estate exposure (not included above)  
    Restaurant42,386  0.6%
    Hotel26,255  0.3%
    Retail374,863  5.0%
    Total$1,336,619  17.8%
    • Nonperforming loans and assets: On a linked quarter basis, both non-performing loans and assets decreased.

      • Nonperforming loans were $52.3 million or 0.69% of total loans at March 31, 2021, down from $60.9 million or 0.79% at the prior quarter end, and up from $47.7 million or 0.61% of total loans a year ago.
      • Nonperforming assets were $57.3 million or 0.51% of total assets at March 31, 2021, down from $65.9 million or 0.59% at the prior quarter end, and up from $56.0 million or 0.56% of total assets a year ago. At March 31, 2021, other real estate owned was $5.0 million, unchanged from the prior quarter end.
    • Legal update: As previously disclosed by the Company, on December 24, 2020, by stipulation of the parties, the United States District Court for the Southern District of New York stayed the putative class action lawsuit filed against the Company and certain of its officers, its current and former President and Chief Executive Officer, its current and former Chief Financial Officer and its former General Counsel on behalf of persons who purchased or otherwise acquired Company securities between March 2, 2015 and July 17, 2019 (the “class”), pending a non-binding mediation that had been scheduled for April 13, 2021.

      Immediately following the non-binding mediation, the lead plaintiff, on behalf of the class, the Company and each of the other defendants continued a settlement dialogue and reached an agreement to settle the putative class action lawsuit, involving a total payment by the Company of $7.5 million in exchange for the release of all of the defendants from all alleged claims in the class action suit, without any admission or concession of wrongdoing by the Company or the other defendants. The agreement remains subject to final documentation, court approval and other customary conditions. The Company expects that the full amount of a final settlement will be paid by the Company’s insurance carriers under applicable insurance policies. There can be no assurance, however, that the agreement will be fully documented, receive court approval and/or meet all other conditions.

      On January 25, 2021, the Company entered into a settlement agreement with respect to a previously disclosed shareholder demand letter, covering substantially the same subject matters as the disclosed civil securities class action litigation pending in the United States District Court for the Southern District of New York (SDNY). As required by DC Superior Court administrative procedures, shareholder's counsel first filed a derivative action complaint against the individual directors and officers named in the demand letter, and the Company as nominal Defendant before filing the executed stipulation of settlement accompanied by the shareholder's brief in support of their unopposed motion to approve the settlement. Court approval of the stipulation of settlement remains pending a hearing currently scheduled for May 12, 2021.

      Although the Company believes the stipulation of settlement is in the best interests of the Company’s shareholders, there can be no assurance that the stipulation of settlement will be approved by the court.

    Additional financial information: The financial information that follows provides more detail on the Company’s financial performance for the three months ended March 31, 2021 as compared to the three months ended March 31, 2020, 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, 2020, and other reports filed with the Securities and Exchange Commission (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 twenty branch 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.

    Conference call: Eagle Bancorp will host a conference call to discuss its first quarter 2021 financial results on Thursday, April 22, 2021 at 10:00 a.m. eastern time. The public is invited to listen to this conference call by dialing 1.877.303.6220, conference ID Code 1139926, or by accessing the call on the Company’s website, www.EagleBankCorp.com. A replay of the conference call will be available on the Company’s website through May 6, 2021.

    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 the macroeconomic and other challenges and uncertainties resulting from the COVID-19 pandemic, including on our credit quality, asset and loan growth and broader business operations), interest rates and interest rate policy, competitive factors, and other conditions 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, 2020, 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.

    ____________________
    7 A reconciliation of non-GAAP financial measures to the nearest non-GAAP measure is provided below.


    Eagle Bancorp, Inc.   
    Consolidated Financial Highlights (Unaudited)   
    (dollars in thousands, except per share data) 
     Three Months Ended
     March 31, 2021 March 31, 2020
    Income Statements:   
    Total interest income$94,194   $103,801 
    Total interest expense11,543   24,057 
    Net interest income82,651   79,744 
    Provision for credit losses(2,350)  14,310 
    Provision for Unfunded Commitments(442)  2,112 
    Net interest income after provision for credit losses85,443   63,322 
    Noninterest income (before investment gain)10,366   4,648 
    Gain (loss) on sale of investment securities221   822 
    Total noninterest income10,587   5,470 
    Total noninterest expense37,987   37,347 
    Income before income tax expense58,043   31,445 
    Income tax expense14,574   8,322 
    Net income$43,469   $23,123 
    Per Share Data:   
    Earnings per weighted average common share, basic$1.36   $0.70 
    Earnings per weighted average common share, diluted$1.36   $0.70 
    Weighted average common shares outstanding, basic31,869,655   32,850,112 
    Weighted average common shares outstanding, diluted31,922,940   32,875,508 
    Actual shares outstanding at period end31,960,379   32,197,258 
    Book value per common share at period end$39.45   $36.11 
    Tangible book value per common share at period end (1)$36.16   $32.86 
    Dividend per common share$0.25   $0.22 
    Performance Ratios (annualized):   
    Return on average assets1.53 % 0.98%
    Return on average common equity14.05 % 7.81%
    Return on average tangible common equity15.33 % 8.56%
    Net interest margin2.98 % 3.49%
    Efficiency ratio (2)40.74 % 43.83%
    Other Ratios:   
    Allowance for credit losses to total loans (3)1.36 % 1.23%
    Allowance for credit losses to total nonperforming loans195.25 % 201.80%
    Nonperforming loans to total loans (3)0.69 % 0.61%
    Nonperforming assets to total assets0.51 % 0.56%
    Net charge-offs (annualized) to average loans (3)0.27 % 0.12%
    Common equity to total assets11.33 % 11.64%
    Tier 1 capital (to average assets)10.28 % 11.33%
    Total capital (to risk weighted assets)17.86 % 15.44%
    Common equity tier 1 capital (to risk weighted assets)14.42 % 12.14%
    Tangible common equity ratio (1)10.48 % 10.70%
    Loan Balances - Period End (in thousands):   
    Commercial and Industrial$1,398,155   $1,773,478 
    PPP loans$565,018   $— 
        
    Commercial real estate - income producing$3,430,077   $3,827,024 
    Commercial real estate - owner occupied$1,012,457   $971,634 
    1-4 Family mortgage$71,209   $104,558 
    Construction - commercial and residential$829,481   $969,166 
    Construction - C&I (owner occupied)$152,240   $114,138 
    Home equity$67,167   $78,228 
    Other consumer$885   $2,647 
    Average Balances (in thousands):   
    Total assets$11,517,837   $9,447,663 
    Total earning assets$11,236,440   $9,176,174 
    Total loans$7,726,716   $7,650,993 
    Total deposits$9,601,249   $7,696,764 
    Total borrowings$573,750   $485,948 
    Total shareholders’ equity$1,254,780   $1,191,180 

    (1) Tangible common equity to tangible assets (the "tangible common equity ratio"), tangible book value per common share, and the 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 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 table below provides reconciliation of financial measures defined by GAAP with non-GAAP financial measures.
    (2) Computed by dividing noninterest expense by the sum of net interest income and noninterest income. The efficiency ratio measures a bank’s overhead as a percentage of its revenue.        
    (3) Excludes loans held for sale.


    GAAP Reconciliation (Unaudited)
    (dollars in thousands except per share data)
     Three Months Ended
     March 31, 2021 March 31, 2020
    Common shareholders' equity$1,260,833   $1,162,777  
    Less: Intangible assets(105,179)  (104,695) 
    Tangible common equity$1,155,654   $1,058,082  
    Book value per common share$39.45   $36.11  
    Less: Intangible book value per common share(3.29)  (3.25) 
    Tangible book value per common share$36.16   $32.86  
    Total assets$11,127,864   $9,992,219  
    Less: Intangible assets(105,179)  (104,695) 
    Tangible assets$11,022,685   $9,887,524  
    Tangible common equity ratio10.48 % 10.70 %
    Average common shareholders' equity$1,254,780   $1,191,180  
    Less: Average intangible assets(105,164)  (104,697) 
    Average tangible common equity$1,149,616   $1,086,483  
    Net Income Available to Common Shareholders$43,469   $23,123  
    Annualized Return on Average Tangible Common Equity15.33 % 8.56 %


    Eagle Bancorp, Inc.
    Consolidated Balance Sheets (Unaudited)
    (dollars in thousands, except per share data)
    AssetsMarch 31, 2021 December 31, 2020 March 31, 2020
    Cash and due from banks$9,112   $8,435   $7,177  
    Federal funds sold25,785   28,200   28,277  
    Interest bearing deposits with banks and other short-term investments1,708,374   1,752,420   904,160  
    Investment securities available for sale (amortized cost of $1,365,139, $1,129,057, and $838,831, and allowance for credit losses of $78, $167, and $0, as of March 31, 2021, December 31, 2020 and March 31, 2020, respectively).1,369,107   1,151,083   858,916  
    Federal Reserve and Federal Home Loan Bank stock33,978   40,104   39,988  
    Loans held for sale142,196   88,205   60,036  
    Loans7,526,689   7,760,212   7,840,873  
    Less allowance for credit losses(102,070)  (109,579)  (96,336) 
    Loans, net7,424,619   7,650,633   7,744,537  
    Premises and equipment, net15,045   13,553   13,687  
    Operating lease right-of-use assets30,707   25,237   25,655  
    Deferred income taxes44,623   38,571   30,366  
    Bank owned life insurance77,119   76,729   76,139  
    Intangible assets, net105,179   105,114   104,695  
    Other real estate owned4,987   4,987   8,237  
    Other assets137,033   134,531   90,349  
    Total Assets$11,127,864   $11,117,802   $9,992,219  
          
    Liabilities and Shareholders' Equity     
    Deposits:     
    Noninterest bearing demand$2,594,334   $2,809,334   $1,994,209  
    Interest bearing transaction862,709   756,923   931,597  
    Savings and money market4,875,840   4,645,186   3,950,495  
    Time, $100,000 or more513,998   546,173   608,355  
    Other time351,963   431,587   656,912  
    Total deposits9,198,844   9,189,203   8,141,568  
    Customer repurchase agreements20,061   26,726   31,377  
    Other short-term borrowings300,000   300,000   300,000  
    Long-term borrowings218,175   268,077   267,784  
    Operating lease liabilities33,338   28,022   28,242  
    Reserve for unfunded commitments5,056   5,498   6,230  
    Other liabilities91,557   59,384   54,240  
    Total liabilities9,867,031   9,876,910   8,829,441  
    Shareholders' Equity     
    Common stock, par value $.01 per share; shares authorized 100,000,000, shares issued and outstanding 31,960,379, 31,779,663, and 32,197,258, respectively316   315   320  
    Additional paid in capital428,917   427,016   439,321  
    Retained earnings833,598   798,061   710,072  
    Accumulated other comprehensive income (loss)(1,998)  15,500   13,065  
    Total Shareholders' Equity1,260,833   1,240,892   1,162,778  
    Total Liabilities and Shareholders' Equity$11,127,864   $11,117,802   $9,992,219  


    Eagle Bancorp, Inc.
    Consolidated Statements of Income (Unaudited)
    (dollars in thousands, except per share data)
     Three Months Ended
    Interest IncomeMarch 31, 2021 March 31, 2020
    Interest and fees on loans$89,238   $96,755 
    Interest and dividends on investment securities4,395   5,427 
    Interest on balances with other banks and short-term investments553   1,559 
    Interest on federal funds sold8   60 
    Total interest income94,194   103,801 
    Interest Expense   
    Interest on deposits7,899   20,546 
    Interest on customer repurchase agreements11   87 
    Interest on other short-term borrowings495   357 
    Interest on long-term borrowings3,138   3,067 
    Total interest expense11,543   24,057 
    Net Interest Income82,651   79,744 
    Provision for Credit Losses(2,350)  14,310 
    Provision for Unfunded Commitments(442)  2,112 
    Net Interest Income After Provision For Credit Losses85,443   63,322 
    Noninterest Income   
    Service charges on deposits977   1,425 
    Gain on sale of loans5,178   944 
    Gain (loss) on sale of investment securities221   822 
    Increase in the cash surrender value of  bank owned life insurance389   414 
    Other income3,822   1,865 
    Total noninterest income10,587   5,470 
    Noninterest Expense   
    Salaries and employee benefits21,769   17,797 
    Premises and equipment expenses3,618   3,821 
    Marketing and advertising886   1,078 
    Data processing2,814   2,496 
    Legal, accounting and professional fees2,999   6,988 
    FDIC insurance2,428   1,424 
    Other expenses3,473   3,743 
    Total noninterest expense37,987   37,347 
    Income Before Income Tax Expense58,043   31,445 
    Income Tax Expense14,574   8,322 
    Net Income$43,469   $23,123 
    Earnings Per Common Share   
    Basic$1.36   $0.70 
    Diluted$1.36   $0.70 


    Eagle Bancorp, Inc.
    Consolidated Average Balances, Interest Yields And Rates (Unaudited)
    (dollars in thousands)
     Three Months Ended
     March 31, 2021 March 31, 2020
     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$2,103,679  $553  0.11% $588,148  $1,559  1.07%
    Loans held for sale (1)104,784  739  2.82% 38,749  354  3.65%
    Loans (1) (2)7,726,716  88,499  4.65% 7,650,993  96,401  5.07%
    Investment securities available for sale (2)1,268,952  4,395  1.40% 867,666  5,427  2.52%
    Federal funds sold32,309  8  0.10% 30,618  60  0.79%
    Total interest earning assets11,236,440  94,194  3.40% 9,176,174  103,801  4.55%
    Total noninterest earning assets390,775      356,317     
    Less: allowance for credit losses109,379      84,828     
    Total noninterest earning assets281,396      271,489     
    TOTAL ASSETS$11,517,836      $9,447,663     
    LIABILITIES AND SHAREHOLDERS' EQUITY           
    Interest bearing liabilities:           
    Interest bearing transaction$771,321  $427  0.22% $805,134  $1,666  0.83%
    Savings and money market4,839,348  3,970  0.33% 3,337,958  11,082  1.34%
    Time deposits921,208  3,503  1.54% 1,287,310  7,798  2.44%
    Total interest bearing deposits6,531,877  7,900  0.49% 5,430,402  20,546  1.52%
    Customer repurchase agreements20,615  11  0.22% 30,008  87  1.17%
    Other short-term borrowings300,003  495  0.66% 220,058  357  0.64%
    Long-term borrowings253,132  3,137  4.96% 235,882  3,067  5.14%
    Total interest bearing liabilities7,105,627  11,543  0.66% 5,916,350  24,057  1.64%
    Noninterest bearing liabilities:           
    Noninterest bearing demand3,069,372      2,266,362     
    Other liabilities88,057      73,771     
    Total noninterest bearing liabilities3,157,429      2,340,133     
    Shareholders’ Equity1,254,780      1,191,180     
    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$11,517,836      $9,447,663     
    Net interest income  $82,651      $79,744   
    Net interest spread    2.74%     2.91%
    Net interest margin    2.98%     3.49%
    Cost of funds    0.42%     1.06%

    (1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $7.8 million and $4.3 million for the three months ended March 31, 2021 and March 31, 2020, respectively.
    (2) Interest and fees on loans and investments exclude tax equivalent adjustments.


    Statements of Income and Highlights Quarterly Trends (Unaudited)
    (dollars in thousands, except per share data)
       Three Months Ended
     March 31, December 31, September 30, June 30, March 31, December 31, September 30, June 30,
    Income Statements:2021 2020 2020 2020 2020 2019 2019 2019
    Total interest income$94,194   $94,680  $93,833   $97,672  $103,801  $107,183   $109,034  $108,279 
    Total interest expense11,543   13,262  14,795   16,309  24,057  26,473   28,045  26,950 
    Net interest income82,651   81,418  79,038   81,363  79,744  80,710   80,989  81,329 
    Provision for credit losses(2,350)  4,917  6,607   19,737  14,310  2,945   3,186  3,600 
    Provision for unfunded commitments(442)  406  (2,078)  940  2,112  —   —  — 
    Net interest income after provision for credit losses85,443   76,095  74,509   60,686  63,322  77,765   77,803  77,729 
    Noninterest income (before investment gain (loss))10,366   9,722  17,729   11,782  4,648  6,845   6,161  5,797 
    Gain (loss) on sale of investment securities221   165  115   713  822  (111)  153  563 
    Total noninterest income10,587   9,887  17,844   12,495  5,470  6,734   6,314  6,360 
    Salaries and employee benefits21,769   20,151  19,388   17,104  17,797  19,360   19,095  17,743 
    Premises and equipment3,618   3,301  5,125   3,468  3,821  3,380   3,503  3,652 
    Marketing and advertising886   1,161  928   1,111  1,078  1,200   1,210  1,268 
    Other expenses11,714   10,396  11,474   13,209  14,651  10,786   9,665  10,696 
    Total noninterest expense37,987   35,009  36,915   34,892  37,347  34,726   33,473  33,359 
    Income before income tax expense58,043   50,973  55,438   38,289  31,445  49,773   50,644  50,730 
    Income tax expense14,574   12,081  14,092   9,433  8,322  14,317   14,149  13,487 
    Net income43,469   38,892  41,346   28,856  23,123  35,456   36,495  37,243 
    Per Share Data:               
    Earnings per weighted average common share, basic$1.36   $1.21  $1.28   $0.90  $0.70  $1.06   $1.07  $1.08 
    Earnings per weighted average common share, diluted$1.36   $1.21  $1.28   $0.90  $0.70  $1.06   $1.07  $1.08 
    Weighted average common shares outstanding, basic31,869,655   32,037,099  32,229,322   32,224,695  32,850,112  33,468,572   34,232,890  34,540,152 
    Weighted average common shares outstanding, diluted31,922,940   32,075,175  32,250,885   32,240,825  32,875,508  33,498,681   34,255,889  34,565,253 
    Actual shares outstanding at period end31,960,379   31,779,663  32,228,636   32,224,756  32,197,258  33,241,496   33,720,522  34,539,853 
    Book value per common share at period end$39.45   $39.05  $37.96   $36.86  $36.11  $35.82   $35.13  $34.30 
    Tangible book value per common share at period end (1)$36.16   $35.74  $34.70   $33.62  $32.86  $32.67   $32.02  $31.25 
    Dividend per common share$0.25   $0.22  $0.22   $0.22  $0.22  $0.22   $0.22  $0.22 
    Performance Ratios (annualized):               
    Return on average assets1.53 % 1.39% 1.57 % 1.12% 0.98% 1.49 % 1.62% 1.74%
    Return on average common equity14.05 % 12.53% 14.46 % 9.84% 7.81% 11.78 % 12.09% 12.81%
    Return on average tangible common equity15.33 % 13.69% 15.93 % 10.80% 8.56% 12.91 % 13.25% 14.08%
    Net interest margin2.98 % 2.98% 3.08 % 3.26% 3.49% 3.49 % 3.72% 3.91%
    Efficiency ratio (2)40.74 % 38.34% 38.10  % 37.18% 43.83% 39.71 % 38.34% 38.04%
    Other Ratios:               
    Allowance for credit losses to total loans (3)1.36 % 1.41% 1.40 % 1.36% 1.23% 0.98 % 0.98% 0.98%
    Allowance for credit losses to total nonperforming loans195.25 % 179.80% 189.83 % 184.52% 201.80% 151.16 % 127.87% 192.70%
    Nonperforming loans to total loans (3)0.69 % 0.79% 0.74 % 0.74% 0.61% 0.65 % 0.76% 0.51%
    Nonperforming assets to total assets0.51 % 0.59% 0.62 % 0.69% 0.56% 0.56 % 0.66% 0.45%
    Net charge-offs (annualized) to average loans (3)0.27 % 0.28% 0.26 % 0.36% 0.12% 0.16 % 0.08% 0.08%
    Tier 1 capital (to average assets)10.28 % 10.31% 10.82 % 10.63% 11.33% 11.62 % 12.19% 12.66%
    Total capital (to risk weighted assets)17.86 % 17.04% 16.72 % 16.33% 15.44% 16.20 % 16.08% 16.36%
    Common equity tier 1 capital (to risk weighted assets)14.42 % 13.49% 13.19 % 12.79% 12.14% 12.87 % 12.76% 12.87%
    Tangible common equity ratio (1)10.48 % 10.31% 11.18 % 11.17% 10.70% 12.22 % 12.13% 12.60%
    Average Balances (in thousands):               
    Total assets$11,517,836   $11,141,826  $10,473,595   $10,326,709  $9,447,663  $9,426,220   $8,923,406  $8,595,523 
    Total earning assets$11,236,440   $10,872,259  $10,205,939   $10,056,500  $9,176,174  $9,160,034   $8,655,196  $8,328,323 
    Total loans$7,726,716   $7,896,324  $7,910,260   $8,015,751  $7,650,993  $7,532,179   $7,492,816  $7,260,899 
    Total deposits$9,601,249   $9,227,733  $8,591,912   $8,482,718  $7,696,764  $7,716,973   $7,319,314  $6,893,981 
    Total borrowings$573,750   $596,307  $596,472   $598,463  $485,948  $449,432   $345,464  $470,214 
    Total shareholders’ equity$1,254,780   $1,235,174  $1,211,145   $1,179,452  $1,191,180  $1,194,337   $1,197,513  $1,166,487 

    (1) Tangible common equity to tangible assets (the "tangible common equity ratio") and tangible book value per common share 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 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.
    (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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