EagleBank: Eagle Bancorp, Inc. Announces First Quarter 2025 Results and Cash Dividend

BETHESDA, Md., April 23, 2025 (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 first quarter ended March 31, 2025.Eagle reported net income of $1.7 million or $0.06 per diluted share for the first quarter 2025, compared to net income of $15.3 million or $0.50 per diluted share during the fourth quarter. Pre-provision net revenue ("PPNR")1 in the first quarter was $28.4 million compared to $30.3 million for the prior quarter.The $13.6 million decrease in net income from the prior quarter is primarily due to a $14.1 million increase in provision expense, a $5.1 million decline in net interest income, and a $0.9 million increase in noninterest expenses. These factors were partially offset by a $4.1 million increase in noninterest income.Additionally, the Company is announcing today a cash dividend in the amount of $0.165 per share. The cash dividend will be payable on May 16, 2025 to shareholders of record on May 5, 2025."In the first quarter, we began to see tangible results from our strategic focus,'' said Susan G. Riel, Chair, President, and Chief Executive Officer of the Company. "We achieved solid period-end growth in our C&I portfolio, which increased by $109 million, or 4.3%, and total deposits grew by $146.2 million, or 1.6%. Both increases reflect the continued emphasis we've placed on these core areas of our business. We are encouraged by this early progress, and we remain focused on executing our strategy and positioning the Company to return to sustained profitability as we navigate this environment."Eric R. Newell, Chief Financial Officer of the Company said, "We grew deposits across both digital and branch channels in the first quarter, though a continued shift from noninterest bearing to interest bearing accounts pressured net interest margin. Valuation risk in our office portfolio remains a concern and was the primary driver of the provision for credit losses. The credit loss reserve coverage rose to 1.63% of total loans, up 19 basis points from last quarter. Our capital position remains strong, with common equity tier one capital at 14.6% and our tangible common equity1 ratio exceeding 10%. We will continue to evaluate capital allocation decisions, in alignment with long-term franchise value and our objective of capital accretion."Ms. Riel added, "I want to thank all our employees for their continued dedication and for helping to cultivate a culture grounded in respect, collaboration, and service - both within our organization and across the communities we serve."First Quarter 2025 Key ElementsThe Company announces today the declaration of a common stock dividend of $0.165 per share.The ACL as a percentage of total loans was 1.63% at quarter-end; up from 1.44% at the prior quarter-end. Performing office coverage2 was 5.78% at quarter-end; as compared to 3.81% at the prior quarter-end.Nonperforming assets decreased $8.5 million to $202.9 million as of March 31, 2025 and were 1.79% of total assets compared to 1.90% as of December 31, 2024. Inflows to non-performing loans in the quarter totaled $4.6 million offset by a reduction of $12.9 million. The reduction was predominantly associated with the $11.2 million nonperforming loans that were charged off during the quarter.Substandard loans increased $75.2 million to $501.6 million primarily reflecting continued stress within the office loan portfolio. Special mention loans increased $28.6 million to $273.4 million at March 31, 2025 as we proactively identified credits showing signs of potential weakness. These increases reflect our conservative credit risk management approach and the ongoing impact of the uncertain operating environment in the Washington DC metro area.Annualized quarterly net charge-offs for the first quarter were 0.57% compared to 0.48% for the fourth quarter 2024.The net interest margin ("NIM") decreased to 2.28% for the first quarter 2025, compared to 2.29% for the prior quarter, primarily due to an increase in the average mix of interest-bearing deposits versus noninterest bearing deposits in the first quarter versus the fourth quarter.At quarter-end, the common equity ratio, tangible common equity ratio1, and common equity tier 1 capital (to risk-weighted assets) ratio were 11.00%, 11.00%, and 14.61%, respectively.Total estimated insured deposits decreased at quarter-end to $6.9 billion, or 74.7% of deposits, compared to $7.0 billion, or 76.4% of deposits from the fourth quarter.Total on-balance sheet liquidity and available capacity was $4.8 billion, up $244.9 million from the prior quarter.Income StatementNet interest income was $65.6 million for the first quarter 2025, compared to $70.8 million for the prior quarter. The decrease in net interest income was primarily driven by two fewer days in the quarter, lower average interest bearing cash balances, lower rates on loans, and a higher average mix of interest bearing deposits. Both interest income and interest expense declined due to lower rates.Provision for credit losses was $26.3 million for the first quarter 2025, compared to $12.1 million for the prior quarter. The increase in the provision for the quarter is attributed predominately to the replenishment of the reserve following net charge-offs of $11.2 million and an increase in the qualitative overlay. The increase in the overlay relates to updated assumptions associated with the probability of default and probability of loss associated with commercial real estate office loans. Reserve for unfunded commitments was a reversal of $0.3 million due primarily to lower unfunded commitments in our construction portfolio. This compared to a reversal for unfunded commitments in the prior quarter of $1.6 million.Noninterest income was $8.2 million for the first quarter 2025, compared to $4.1 million for the prior quarter. The primary driver for the increase was an increase in income associated with a $200 million separate account BOLI transaction that was entered into in the first quarter.Noninterest expense was $45.5 million for the first quarter 2025, compared to $44.5 million for the prior quarter. The increase over the comparative quarters was primarily due to increased legal, accounting, and professional fees.Loans and FundingTotal loans were $7.9 billion at March 31, 2025, up 0.1% from the prior quarter-end. The increase in total loans was driven by an increase in owner occupied commercial real estate loans from the prior quarter-end, offset by a decrease in income producing commercial real estate loans.Total deposits at quarter-end were $9.3 billion, up $146.2 million, or 1.6%, from the prior quarter-end. The increase was primarily attributable to an increase in time deposit accounts. Period end deposits have increased $775.8 million when compared to prior year comparable period end of March 31, 2024.Other short-term borrowings were $0.5 billion at March 31, 2025, consistent with the prior quarter-end.Asset QualityAllowance for credit losses was 1.63% of total loans held for investment at March 31, 2025, compared to 1.44% at the prior quarter-end. Performing office coverage was 5.78% at quarter-end; as compared to 3.81% at the prior quarter-end.Net charge-offs were $11.2 million for the quarter compared to $9.5 million in the fourth quarter of 2024.Nonperforming assets were $202.9 million at March 31, 2025.NPAs as a percentage of assets were 1.79% at March 31, 2025, compared to 1.90% at the prior quarter-end. At March 31, 2025, other real estate owned consisted of four properties with an aggregate carrying value of $2.5 million. The decrease in NPAs was predominantly associated with charge-offs as previously noted.Loans 30-89 days past due were $83.0 million at March 31, 2025, compared to $26.8 million at the prior quarter-end.CapitalTotal shareholders' equity was $1.2 billion at March 31, 2025, up 1.5% from the prior quarter-end. The increase in shareholders' equity of $18.8 million was due to an increase in valuations of available-for-sale securities.Book value per share and tangible book value per share3 was $40.99 and $40.99, up 1.0% 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 March 31, 2025 as compared to the three months ended December 31, 2024 and March 31, 2024, 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, 2024, 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 first quarter 2025 financial results on Thursday, April 24, 2025 at 10:00 a.m. Eastern Time.The listen-only webcast can be accessed at:https://edge.media-server.com/mmc/p/ctj63jcb For analysts who wish to participate in the conference call, please register at the following URL:https://register-conf.media-server.com/register/BI971bee7d90814ddfa9d86f2a9d158184 A replay of the conference call will be available on the Company's website through Thursday, May 8, 2025: https://www.eaglebankcorp.com/ Forward-looking statements: This press release contains forward-looking statements within the meaning of the Securities Exchange