BETHESDA, Md., April 24, 2024 (GLOBE NEWSWIRE) -- Eagle Bancorp, Inc. (the "Company") (NASDAQ:EGBN), the parent company of EagleBank (the "Bank"), today announced a net loss of $338 thousand for the first quarter 2024, compared to net income of $20.2 million for the fourth quarter 2023 (the "prior quarter"). Net loss was $(0.01) per share (diluted) for the first quarter 2024, compared to net income of $0.67 per share (diluted) for the prior quarter. Pre-provision net revenue ("PPNR")1, a non-GAAP financial measure, was $38.3 million for the first quarter 2024, compared to $38.8 million for the prior quarter. The $20.6 million decrease from earnings in the prior quarter was attributable to a $20.7 million increase in provision for credit losses, due primarily to an updated valuation for a commercial real estate ("CRE") office property collateralizing a lending relationship that was partially charged-off in the first quarter 2024. The provision for credit losses was $35.2 million for the first quarter 2024, comprising the impact of the updated valuation and an increase in the office allowance for credit losses ("ACL") coverage ratio. Susan G. Riel, President and Chief Executive Officer of the Company, commented, "Our results for the quarter showcased the strong fundamentals of our business, evidenced by the stability in our pre-provision net revenue, our growing reserve for credit losses, and our strong capital levels. The quarter showcased the progress we are making towards achieving our strategic objectives of enhancing the diversification of our deposits, growing the commercial lending team, and proactively managing our office portfolio." Ms. Riel continued, "I am pleased that we are being proactive in addressing our challenges while always maintaining a trusted brand and franchise in our community. I am excited about the prospects of EagleBank and its ability to serve our communities and customers for years to come." Eric R. Newell, Chief Financial Officer of the Company said, "Our operational performance remained stable over the last twelve months, and we are proud to have increased our deposits by over $1.0 billion and our loans by over $245.0 million over the last year. With these solid operating results, and our strong capital position evidenced by our common equity and tangible common equity1 ratios exceeding 10%, we are well positioned to continue executing on our strategic priorities." Ms. Riel added, "The EagleBank team continues to serve our customers and communities, showing tenacity and commitment through a challenging operating environment. I thank all of our employees for their hard work and dedication. Additionally, we remain committed to a Relationship First culture of respect, diversity and inclusion in both the workplace and the communities we serve." First Quarter 2024 Highlights Net loss was $338 thousand for the first quarter 2024, compared to net income of $20.2 million in the prior quarter, with PPNR of $38.3 million for the first quarter 2024, compared to $38.8 million for the prior quarter. The ACL as a percentage of total loans was 1.25% at quarter-end; up from 1.08% at the prior quarter-end. Performing office coverage2 was 3.67% at quarter-end; as compared to 1.91% at the prior quarter-end. The net interest margin ("NIM") remained steady at 2.43% for the first quarter 2024, compared to 2.45% for the prior quarter. The Company declared a quarterly dividend of $0.45 per share. At quarter-end, the common equity ratio, tangible common equity ratio, and common equity tier 1 capital (to risk-weighted assets) ratio were 10.85%, 10.03%, and 13.80%, respectively. Loans at quarter-end were $8.0 billion, up $14.0 million, or 0.2%, from the prior quarter-end. Deposits at quarter-end were $8.5 billion, down $306.6 million, or 3.5%, from the prior quarter-end. The decrease was primarily attributable to anticipated seasonality in deposits from tax payments. Deposits have increased over $1.0 billion as compared to March 31, 2023. Total estimated insured deposits at quarter-end were $6.2 billion, or 72.4% of deposits. Total on-balance sheet liquidity and available capacity was $2.9 billion at quarter-end. Income Statement Net interest income was $74.7 million for the first quarter 2024, compared to $73.0 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 yields on the loan portfolio. Provision for credit losses was $35.2 million for the first quarter 2024, compared to $14.5 million for the prior quarter. The increase in the provision was primarily driven by an updated valuation for a CRE office property collateralizing a lending relationship that was partially charged off in the first quarter 2024 due to an updated appraisal. In addition, there was an increase in the provision primarily attributable to the increase in the office ACL coverage ratio. Noninterest income was $3.6 million for the first quarter 2024, compared to $2.9 million for the prior quarter. The primary driver for the increase was market value adjustments on our derivative book. Noninterest expense was $40.0 million for the first quarter 2024, compared to $37.1 million for the prior quarter. The increase over the comparative quarters was primarily due to increased salaries and employee benefits expenses in connection with first quarter seasonality and related payroll tax increases in the first quarter 2024, along with higher Federal Deposit Insurance Corporation ("FDIC") fees. Loans and Funding Total loans were $8.0 billion at March 31, 2024, up 0.2% from the prior quarter-end. The increase in total loans was driven by increased fundings of ongoing construction projects for commercial and residential properties, partially offset by a reduction in CRE loans from quarter-end to the prior quarter-end.At March 31, 2024, income-producing commercial real estate loans secured by office properties other than owner-occupied properties were 11.2% of the total loan portfolio at principal, down from 11.9% at the prior quarter-end. Total deposits were $8.5 billion at March 31, 2024, down 3.5% from the prior quarter-end. The decrease was primarily attributable to seasonality in deposits from tax payments. Borrowings were $1.7 billion at March 31, 2024, up 21.9% from the prior quarter-end due primarily to net fundings on the Company's secured borrowing lines. Asset Quality Allowance for credit losses was 1.25% of total loans at March 31, 2024, compared to 1.08% at the prior quarter-end. Performing office coverage was 3.67% at quarter-end; as compared to 1.91% at the prior quarter-end.Net charge-offs were $21.4 million for the quarter. Nonperforming assets were $92.3 million at March 31, 2024. NPAs as a percentage of assets were 0.79% at March 31, 2024, compared to 0.57% at the prior quarter-end. At March 31, 2024, other real estate owned consisted of four properties with an aggregate carrying value of $773 thousand. Loans 30-89 days past due were $31.1 million at March 31, 2024, up from $13.6 million at the prior quarter-end attributed to two relationships; one has since been brought current and the other as posing a limited risk of loss. Capital Total shareholders' equity was $1.3 billion at March 31, 2024, down 1.2% from the prior quarter-end. The decrease in shareholders' equity of $14.9 million was primarily from reduced valuations of available-for-sale securities and a decline in retained earnings. Book value per share was $41.72, down $0.86 from the prior quarter-end. Tangible book value per share1 was $38.26, down $0.82 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, 2024 as compared to the three months ended December 31, 2023 and March 31, 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 first quarter 2024 financial results on Thursday, April 25, 2024 at 10:00 a.m. Eastern Time. The listen-only webcast can be accessed at: https://edge.media-server.com/mmc/p/ubgqftw2/ For analysts who wish to participate in the conference call, please register at the following URL:https://register.vevent.com/register/BI92527acbd31b4c4fbe973b59797f475f A replay of the conference call will be available on the Company's website through May 9, 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 high 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   March 31,   December 31,   March 31,     2024       2023       2023   Interest Income           Interest and fees on loans $ 137,994     $ 135,964     $ 120,850   Interest and dividends on investment securities   12,680       13,142       13,545   Interest on balances with other banks and short-term investments   24,862       18,230       5,774   Interest on federal funds sold   66       85       78   Total interest income   175,602       167,421       140,247   Interest Expense           Interest on deposits   79,383       78,239       48,954   Interest on customer repurchase agreements   315       272       302   Interest on borrowings   21,206       15,918       15,967   Total interest expense   100,904       94,429       65,223   Net Interest Income   74,698       72,992       75,024   Provision for Credit Losses   35,175       14,490       6,164   Provision for (Reversal of) Credit Losses for Unfunded Commitments   456       (594 )     848   Net Interest Income After Provision For (Reversal of) Credit Losses   39,067       59,096       68,012               Noninterest Income           Service charges on deposits   1,699       1,688       1,510   Gain on sale of loans   —       23       305   Net gain (loss) on sale of investment securities   4       3       (21 ) Increase in cash surrender value of bank-owned life insurance   703       687       655   Other income   1,183       493       1,251   Total noninterest income   3,589       2,894       3,700   Noninterest Expense           Salaries and employee benefits   21,726       18,416       24,174   Premises and equipment expenses   3,059       2,967       3,317   Marketing and advertising   859       1,071       636   Data processing   3,293       3,436       3,099   Legal, accounting and professional fees   2,507       2,722       3,254   FDIC insurance   6,412       4,444       1,486   Other expenses   2,141       4,042       4,618   Total noninterest expense   39,997       37,098       40,584   Income Before Income Tax Expense   2,659       24,892       31,128   Income Tax Expense   2,997       4,667       6,894   Net (Loss) Income $ (338 )   $ 20,225     $ 24,234               (Loss) Earnings Per Common Share           Basic $ (0.01 )   $ 0.68     $ 0.78   Diluted $ (0.01 )   $ 0.67     $ 0.78     Eagle Bancorp, Inc. Consolidated Balance Sheets (Unaudited) (Dollars in thousands, except per share data)   March 31,   December 31,   March 31,     2024       2023       2023   Assets           Cash and due from banks $ 10,076     $ 9,047     $ 9,940   Federal funds sold   11,343       3,740       3,746   Interest-bearing deposits with banks and other short-term investments   696,453       709,897       159,078   Investment securities available-for-sale at fair value (amortized cost of $1,613,659, $1,668,316, and $1,763,371, respectively, and allowance for credit losses of $17, $17 and $31, respectively)   1,445,034       1,506,388       1,582,185   Investment securities held-to-maturity at amortized cost, net of allowance for credit losses of $1,957, $1,956 and $2,008, respectively (fair value of $878,159, $901,582 and $965,786, respectively)   1,000,732       1,015,737       1,075,303   Federal Reserve and Federal Home Loan Bank stock   54,678       25,748       79,134   Loans held for sale   —       —       6,488   Loans   7,982,702       7,968,695       7,737,676   Less: allowance for credit losses   (99,684 )     (85,940 )     (78,377 ) Loans, net   7,883,018       7,882,755       7,659,299   Premises and equipment, net   9,504       10,189       12,929   Operating lease right-of-use assets   17,679       19,129       23,060   Deferred income taxes   87,813       86,620       89,117   Bank-owned life insurance   113,624       112,921       111,217   Goodwill and intangible assets, net   104,611       104,925       104,226   Other real estate owned   773       1,108       1,962   Other assets   177,310       176,334       171,183   Total Assets $ 11,612,648     $ 11,664,538     $ 11,088,867   Liabilities and Shareholders' Equity           Liabilities           Deposits:           Noninterest-bearing demand $ 1,835,524     $ 2,279,081     $ 2,247,706   Interest-bearing transaction   1,207,566       997,448       907,637   Savings and money market   3,235,391       3,314,043       2,970,093   Time deposits   2,222,958       2,217,467       1,337,805   Total deposits   8,501,439       8,808,039       7,463,241   Customer repurchase agreements   37,059       30,587       37,854   Borrowings   1,669,948       1,369,918       2,183,626   Operating lease liabilities   21,611       23,238       27,634   Reserve for unfunded commitments   6,045       5,590       6,704   Other liabilities   117,133       152,883       127,850   Total Liabilities   10,353,235       10,390,255       9,846,909   Shareholders' Equity           Common stock, par value $0.01 per share; shares authorized 100,000,000, shares issued and outstanding 30,185,732, 29,925,612, and 31,111,647, respectively   297       296       308   Additional paid-in capital   377,334       374,888       397,012   Retained earnings   1,047,550       1,061,456       1,025,552   Accumulated other comprehensive loss   (165,768 )     (162,357 )     (180,914 ) Total Shareholders' Equity   1,259,413       1,274,283       1,241,958   Total Liabilities and Shareholders' Equity $ 11,612,648     $ 11,664,538     $ 11,088,867     Loan Mix and Asset Quality(Dollars in thousands)     March 31,   December 31,   March 31,     2024       2023       2023     Amount %   Amount %   Amount % Loan Balances - Period End:                 Commercial $ 1,408,767 18 %   $ 1,473,766 18 %   $ 1,482,983 19 % PPP loans   467 — %     528 — %     709 — % Income producing - commercial real estate   4,040,655 50 %     4,094,614 51 %     3,970,903 51 % Owner occupied - commercial real estate   1,185,582 15 %     1,172,239 15 %     1,095,699 14 % Real estate mortgage - residential   72,087 1 %     73,396 1 %     73,677 1 % Construction - commercial and residential   1,082,556 13 %     969,766 12 %     948,877 13 % Construction - C&I (owner occupied)   138,379 2 %     132,021 2 %     109,013 1 % Home equity   53,251 1 %     51,964 1 %     53,829 1 % Other consumer   958 — %     401 — %     1,986 — % Total loans $ 7,982,702 100 %   $ 7,968,695 100 %   $ 7,737,676 100 %     Three Months Ended or As Of   March 31,   December 31,   March 31,     2024     2023     2023 Asset Quality:           Net charge-offs $ 21,430   $ 11,936   $ 975 Nonperforming loans $ 91,491   $ 65,524   $ 6,757 Other real estate owned $ 773   $ 1,108   $ 1,962 Nonperforming assets