Eagle Bancorp, Inc. Announces Second Quarter 2025 Results and Cash Dividend
BETHESDA, Md., July 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 second quarter ended June 30, 2025.
Eagle reported a net loss of $69.8 million or $2.30 per share for the second quarter 2025, compared to net income of $1.7 million or $0.06 per diluted share during the first quarter. The $71.5 million decrease in net income from the prior quarter is primarily due to a $111.9 million increase in provision expense. In the quarter, net interest income increased $2.1 million, noninterest income decreased $1.8 million, and noninterest expenses decreased $2.0 million.
Pre-provision net revenue ("PPNR")1 in the second quarter was $30.7 million compared to $28.4 million for the prior quarter reflecting expansion of the net interest margin.
"Our core profitability improvement this quarter, evident in the growth of pre-provision net revenue, expansion of core deposits, and reduced reliance on wholesale and brokered funding, reflects our disciplined execution of our strategic plan," said Susan G. Riel, Chair, President, and Chief Executive Officer of the Company. "We continue to work on building a stronger balance sheet that will contribute to long-term, sustainable performance."
Our second quarter reflects the execution of our previously communicated strategy to resolve challenged loans and address related valuation pressures in the office portfolio.
"This quarter's credit costs reflect decisive actions we are taking to address risk in our loan portfolio. While the charge is significant, it is aligned with our ongoing strategy and reflects our judgement to remediate credit exposures thoughtfully and deliberately. We view this quarter's loss as a necessary and measured outcome of our risk remediation strategy. The resulting impact of these decisions is difficult, yet represents necessary steps in our objective to drive long-term value creation for shareholders," added Ms. Riel.
Eric R. Newell, Chief Financial Officer of the Company said, "This quarter, the credit loss reserve coverage rose to 2.38% of total loans, up 75 basis points from last quarter. This reserve build reflects our ongoing and continued proactive approach to address credit risk in our loan portfolio and our expectation that remediation activity will continue over the coming quarters. Our capital position remains strong, with common equity tier one capital at 14.0% and our tangible common equity1 ratio exceeding 10%. We will continue to evaluate capital allocation decisions, in alignment with our objectives of maintaining long-term franchise value."
Additionally, the Company is announcing today a cash dividend in the amount of $0.165 per share. The cash dividend will be payable on August 29, 2025 to shareholders of record on August 8, 2025.
Second Quarter of 2025 Key Elements
The Company announces today the declaration of a common stock dividend of $0.165 per share.
The ACL as a percentage of total loans was 2.38% at quarter-end; up from 1.63% at the prior quarter-end. Performing office coverage2 was 11.54% at quarter-end; as compared to 5.78% at the prior quarter-end.
Nonperforming assets increased by $26.0 million to $228.9 million as of June 30, 2025, representing 2.16% of total assets, compared to 1.79% as of March 31, 2025. During the quarter, nonperforming loan inflows totaled $222.8 million, primarily driven by office and land properties, including a $33.6 million data center loan backed by office collateral and a $9.1 million life sciences office loan. Reductions of $182.8 million reflected charge-offs, loans moved to held for sale, and restructuring activity.
Substandard and special mention loans totaled $875.4 million at June 30, 2025, compared to $774.9 million in the prior quarter.
Annualized quarterly net charge-offs for the second quarter were 4.22% compared to 0.57% for the first quarter of 2025.
The net interest margin ("NIM") increased to 2.37% for the second quarter of 2025, compared to 2.28% for the prior quarter, primarily driven by the paydown of average borrowings and reduced funding costs on money market accounts and other borrowings.
At quarter-end, the common equity ratio, tangible common equity ratio1, and common equity tier 1 capital (to risk-weighted assets) ratio were 11.18%, 11.18%, and 14.01%, respectively.
Total estimated insured deposits remained stable at quarter-end to $6.8 billion, representing 75.0% of deposits, compared to $6.9 billion, or 74.7% in the prior quarter.
Total on-balance sheet liquidity and available capacity was $4.8 billion, compared to $2.3 billion in uninsured deposits, resulting in a coverage ratio of over 200%.
Income Statement
Net interest income was $67.8 million for the second quarter of 2025, compared to $65.6 million for the prior quarter. The increase in net interest income for the quarter was primarily driven by lower funding costs on savings and money market accounts, a reduction in average short-term borrowings, and the benefit of one additional day in the quarter. These benefits were partially offset by lower yields on loans and a higher mix of time deposits. Both interest income and interest expense declined during the quarter, reflecting the impact of lower market rates.
Provision for credit losses was $138.2 million for the second quarter of 2025, compared to $26.3 million for the prior quarter. The increase was primarily driven by higher office-related reserves and expected exit strategies. Net charge-offs totaled $83.9 million, up from $11.2 million in the first quarter. The reserve for unfunded commitments totaled $1.8 million, driven primarily by higher unfunded commitments in our commercial and industrial portfolio. This compared to a reversal for unfunded commitments in the prior quarter of $0.3 million.
Noninterest income was $6.4 million for the second quarter of 2025, compared to $8.2 million for the prior quarter. The primary driver for the decrease was a $1.9 million loss on a trade executed to reposition the investment portfolio into higher-yielding assets.
Noninterest expense was $43.5 million for the second quarter of 2025, compared to $45.5 million for the prior quarter. The decrease over the comparative quarter was primarily due to decreased legal, accounting, and professional fees.
Loans and Funding
Total loans were $7.7 billion at June 30, 2025, down 2.8% from the prior quarter-end. The decrease in total loans was primarily driven by declines in income-producing real estate loans, partially offset by an increase in commercial and industrial loans.
Total deposits at quarter-end were $9.1 billion, down $157.7 million, or 1.7%, from the prior quarter-end. The decrease was primarily driven by lower balances in brokered savings and money market accounts. Period end deposits have increased $852.3 million when compared to the prior year comparable period end of June 30, 2024.
Other short-term borrowings were $50.0 million at June 30, 2025, representing an 89.8% decrease from the prior quarter-end. The decline was driven by the pay down of FHLB borrowings, funded by cash and core deposit growth.
Asset Quality
Allowance for credit losses was 2.38% of total loans held for investment at June 30, 2025, compared to 1.63% at the prior quarter-end. Performing office coverage was 11.54% at quarter-end; as compared to 5.78% at the prior quarter-end.
Net charge-offs were $83.9 million for the quarter compared to $11.2 million in the first quarter of 2025.
Nonperforming assets were $228.9 million at June 30, 2025.
NPAs as a percentage of assets were 2.16% at June 30, 2025, compared to 1.79% at the prior quarter-end. At June 30, 2025, other real estate owned consisted of five properties with an aggregate carrying value of $2.5 million.
Loans 30-89 days past due were $34.7 million at June 30, 2025, compared to $83.0 million at the prior quarter-end.
Capital
Total shareholders' equity was $1.2 billion at June 30, 2025, down 4.8% from the prior quarter-end. The decrease in shareholders' equity of $59.8 million was primarily due to quarterly losses that reduced capital. This was partially offset by an increase in the fair market value of the available-for-sale investment portfolio.
Book value per share and tangible book value per share3 were $39.03 and $39.03, down 4.8% 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 June 30, 2025 as compared to the three months ended March 31, 2025 and June 30, 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, opportunity, belonging, 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 second quarter of 2025 financial results on Thursday, July 24, 2025 at 10:00 a.m. Eastern Time.
The listen-only webcast can be accessed at:
https://edge.media-server.com/mmc/p/yiqohzt3/
For analysts who wish to participate in the conference call, please register at the following URL:https://register-conf.media-server.com/register/BI6d1c218e6b0143a6903a372200e40cc7
A replay of the conference call will be available on the Company's website through Thursday, August 7, 2025: 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," "strategy," "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 reductions in the size of the federal government workforce; changes in government spending; the proposal, announcement or imposition of tariffs; volatility in interest rates and interest rate policy; inflation levels; 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, 2024 and in other periodic and current reports filed with the SEC, including the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2025. 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
June 30,
March 31,
June 30,
2025
2025
2024
Interest Income
Interest and fees on loans
$
125,223
$
126,136
$
137,616
Interest and dividends on investment securities
11,436
11,912
12,405
Interest on balances with other banks and short-term investments
14,760
15,803
19,568
Interest on federal funds sold
24
27
142
Total interest income
151,443
153,878
169,731
Interest Expense
Interest on deposits
78,912
77,211
76,846
Interest on customer repurchase agreements
250
260
330
Interest on other short-term borrowings
2,489
8,733
21,202
Interest on long-term borrowings
2,016
2,025
—
Total interest expense
83,667
88,229
98,378
Net Interest Income
67,776
65,649
119,910
Provision for Credit Losses
138,159
26,255
8,959
Provision (Reversal) for Credit Losses for Unfunded Commitments
1,759
(297
)
608
Net Interest Income After Provision for Credit Losses
(72,142
)
39,691
110,343
Noninterest Income
Service charges on deposits
1,771
1,743
1,653
Gain on sale of loans
—
—
37
Net gain on sale of investment securities
(1,854
)
4
3
Increase in cash surrender value of bank-owned life insurance
5,161
4,282
709
Other income
1,336
2,178
2,930
Total noninterest income
6,414
8,207
5,332
Noninterest Expense
Salaries and employee benefits
21,940
21,968
21,770
Premises and equipment expenses
3,019
3,203
2,894
Marketing and advertising
1,144
1,371
1,662
Data processing
4,293
3,978
3,495
Legal, accounting and professional fees
1,550
3,122
2,705
FDIC insurance
8,077
8,962
5,917
Goodwill impairment
—
—
104,168
Other expenses
3,447
2,847
3,880
Total noninterest expense
43,470
45,451
146,491
Income (Loss) Before Income Tax Expense
(109,198
)
2,447
(79,373
)
Income Tax Expense
(39,423
)
772
4,429
Net (Loss) Income
$
(69,775
)
$
1,675
$
(83,802
)
(Loss) Earnings Per Common Share
Basic
$
(2.30
)
$
0.06
$
(2.78
)
Diluted
$
(2.30
)
$
0.06
$
(2.78
)
Eagle Bancorp, Inc.
Consolidated Balance Sheets (Unaudited)
(Dollars in thousands, except per share data)
June 30,
March 31,
June 30,
2025
2025
2024
Assets
Cash and due from banks
$
14,005
$
12,516
$
10,803
Federal funds sold
4,091
2,968
5,802
Interest-bearing deposits with banks and other short-term investments
239,237
661,173
526,228
Investment securities available-for-sale at fair value (amortized cost of $1,271,179, $1,330,077, and $1,584,435 respectively, and allowance for credit losses of $—, $—, and $17, respectively)
1,170,489
1,214,237
1,420,618
Investment securities held-to-maturity at amortized cost, net of allowance for credit losses of $1,229, $1,275, and $2,012 respectively (fair value of $799,136, $820,530, and $856,275 respectively)
896,855
924,473
982,955
Federal Reserve and Federal Home Loan Bank stock
30,613
51,467
54,274
Loans held for sale
37,576
15,251
5,000
Loans
7,721,664
7,943,306
8,001,739
Less: allowance for credit losses
(183,796
)
(129,469
)
(106,301
)
Loans, net
7,537,868
7,813,837
7,895,438
Premises and equipment, net
7,103
7,079
8,788
Operating lease right-of-use assets
31,202
32,769
16,250
Deferred income taxes
80,731
84,798
86,236
Bank-owned life insurance
325,174
320,055
114,333
Intangible assets, net
9
11
129
Other real estate owned
2,459
2,459
773
Other assets
223,919
174,268
174,396
Total Assets
10,601,331
11,317,361
11,302,023
Liabilities and Shareholders' Equity
Liabilities
Deposits:
Noninterest-bearing demand
1,532,132
1,607,826
1,693,955
Interest-bearing transaction
895,604
926,722
1,123,980
Savings and money market
3,267,630
3,558,919
3,165,314
Time deposits
3,424,241
3,183,801
2,284,099
Total deposits
9,119,607
9,277,268
8,267,348
Customer repurchase agreements
23,442
32,357
39,220
Other short-term borrowings
50,000
490,000
1,659,979
Long-term borrowings
76,264
76,181
—
Operating lease liabilities
37,297
38,484
20,016
Reserve for unfunded commitments
4,925
3,166
6,653
Other liabilities
104,729
155,014
139,348
Total Liabilities
9,416,264
10,072,470
10,132,564
Shareholders' Equity
Common stock, par value $0.01 per share; shares authorized 100,000,000, shares issued and outstanding 30,364,983, 30,368,843, and 30,180,482 respectively
300
300
297
Additional paid-in capital
388,927
386,535
380,142
Retained earnings
904,205
978,995
949,863
Accumulated other comprehensive loss
(108,365
)
(120,939
)
(160,843
)
Total Shareholders' Equity
1,185,067
1,244,891
1,169,459
Total Liabilities and Shareholders' Equity
$
10,601,331
$
11,317,361
$
11,302,023
Loan Mix and Asset Quality
(Dollars in thousands)
June 30,
March 31,
June 30,
2025
2025
2024
Amount
%
Amount
%
Amount
%
Loan Balances - Period End:
Commercial
$
1,207,512
15
%
$
1,178,343
15
%
$
1,238,261
15
%
PPP loans
164
—
%
226
—
%
$
407
—
%
Income producing - commercial real estate
3,768,884
48
%
3,967,124
49
%
$
4,217,525
53
%
Owner occupied - commercial real estate
1,365,901
18
%
1,403,668
18
%
$
1,263,714
16
%
Real estate mortgage - residential
45,921
1
%
48,821
1
%
$
61,338
1
%
Construction - commercial and residential
1,211,728
16
%
1,210,788
15
%
$
1,063,764
13
%
Construction - C&I (owner occupied)
69,554
1
%
83,417
1
%
$
99,526
1
%
Home equity
49,224
1
%
50,121
1
%
$
52,773
1
%
Other consumer
2,776
—
%
798
—
%
$
4,431
—
%
Total loans
$
7,721,664
100
%
$
7,943,306
100
%
$
8,001,739
100
%
Three Months Ended or As Of
June 30,
March 31,
June 30,
2025
2025
2024
Asset Quality:
Nonperforming loans
$
226,420
$
200,447
$
98,169
Other real estate owned
2,459
2,459
773
Nonperforming assets
$
228,879
$
202,906
$
98,942
Net charge-offs
$
83,877
$
