Eagle Bancorp Inc.

10/23/2024 | Press release | Distributed by Public on 10/23/2024 14:50

Update: Eagle Bancorp, Inc. Announces Third Quarter 2024 Results

Update: Eagle Bancorp, Inc. Announces Third Quarter 2024 Results

Company Release - 10/23/2024 4:45 PM ET
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Eagle grows book value per share by $1.86; Common Equity Tier 1 Capital and Tier 1 Capital leverage ratio to 14.5% and 10.9%, respectively

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:

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.

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

EAGLE BANCORP, INC.
CONTACT:
Eric R. Newell
240.497.1796

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


Source: Eagle Bancorp, Inc.