Eagle Bancorp, Inc. Announces Third Quarter 2024 Results

Source: Nasdaq GlobeNewswire / 23 Oct 2024 16:15:01 America/New_York

BETHESDA, Md., Oct. 23, 2024 (GLOBE NEWSWIRE) -- 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		Average Yield/Rate			Average Balance			Interest		Average Yield/Rate
ASSETS
Interest earning assets:
Interest-bearing deposits with other banks and other short-term investments	$	1,577,464		$	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		Average Yield/Rate			Average Balance			Interest		Average Yield/Rate
ASSETS
Interest earning assets:
Interest bearing deposits with other banks and other short-term investments	$	1,577,464		$	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.
²Calculated 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. Newell
240.497.1796

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

Eagle Bancorp, Inc. Announces Third Quarter 2024 Results

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