BETHESDA, Md., Jan. 22, 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 fourth quarter ended December 31, 2024.
Eagle reported net income of $15.3 million or $0.50 per diluted share for the fourth quarter 2024, compared to net income of $21.8 million or $0.72 per diluted share during the third quarter. Pre-provision net revenue ("PPNR")1 in the fourth quarter was $30.3 million compared to $35.2 million for the prior quarter.
The $6.5 million decrease in net income from the prior quarter is attributed to a decline in noninterest income of $2.9 million associated with higher swap fees collected in the third quarter that did not reoccur in the fourth quarter; $2.0 million increase in provision expense; $1.0 million decrease in net interest income, and a $0.9 million increase in noninterest expenses.
Additionally, the Company is announcing today a cash dividend in the amount of $0.165 per share. The cash dividend will be payable on February 21, 2025 to shareholders of record on February 7, 2025.
"Last year was a transformative one for our Company, marked by significant changes and progress. We welcomed new members to senior management and strengthened our C&I team. We took steps to reduce uncertainties by replacing maturing subordinated debt, recalibrated our common stock dividend, and enhanced transparency around our commercial real estate portfolio," said Susan G. Riel, President and Chief Executive Officer of the Company. "Despite these foundational efforts, challenges remain. Asset quality fell short of expectations and valuation risk in our office portfolio continues to be a key concern. While we are proud of the groundwork laid last year, we are eager to build on these efforts and drive meaningful improvements in our profitability," added Ms. Riel.
Eric R. Newell, Chief Financial Officer of the Company said, "We successfully utilized excess liquidity and deposit growth to fully repay the $1 billion of Bank Term Funding Program debt that was outstanding at September 30. By prioritizing more effective use of wholesale funding and passing through short-term rate reductions to non-maturity deposits, we expect further benefits to funding costs in the first half of 2025. While non-accruals increased due to a $74.9 million commercial real estate office loan that was previously special mention and subsequently moved to non-accrual following a new appraisal, total classified and criticized loans declined last quarter for the first time since we began seeing migration tied to elevated office portfolio risk. The reserve for credit losses, with coverage as a percentage of total loans at 1.44%, increased 4 basis points from last quarter due in large part to the migration to nonaccrual of the previously special mention performing office loan. Our capital position remains strong, with common equity tier one capital increasing to 14.6% and our tangible common equity1 ratio exceeding 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."
Fourth Quarter 2024 Highlights
- The Company announces today a common stock dividend of $0.165 per share.
- The ACL as a percentage of total loans was 1.44% at quarter-end; up from 1.40% at the prior quarter-end. Performing office coverage2 was 3.81% at quarter-end; as compared to 4.55% at the prior quarter-end.
- Nonperforming assets increased $74.3 million to $211.5 million as of December 31, 2024 and were 1.90% of total assets compared to 1.22% as of September 30, 2024. Inflows to non-performing loans in the quarter totaled $75.3 million offset by $1.0 million of outflows. The inflows were predominantly associated with the $74.9 million commercial real estate office loan mentioned earlier.
- Substandard loans increased $34.7 million to $426.0 million and special mention loans decreased $120.2 million to $244.8 million at December 31, 2024.
- Annualized quarterly net charge-offs for the fourth quarter were 0.48% compared to 0.26% for the third quarter 2024.
- The net interest margin ("NIM") decreased to 2.29% for the fourth quarter 2024, compared to 2.37% for the prior quarter, primarily due to an increase in the average mix of interest-bearing deposits at the Federal Reserve Bank in the fourth quarter versus 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 11.02%, 11.02%, and 14.63%, respectively.
- Total estimated insured deposits at quarter-end were $7.0 billion, or 76.4% of deposits, an increase from the third quarter total of 74.5% of deposits.
- Total on-balance sheet liquidity and available capacity was $4.6 billion at quarter-end consistent with September 30, 2024.
- Net interest income was $70.8 million for the fourth quarter 2024, compared to $71.8 million for the prior quarter. The decrease in net interest income was primarily driven by $965 thousand interest income not recognized on a loan that migrated to nonaccrual during the quarter. While interest income declined due to lower rates on loans, there was a similar decline in interest expense from a reduction in rates on non-maturity deposits and a reduction in borrowings.
- Provision for credit losses was $12.1 million for the fourth quarter 2024, compared to $10.1 million for the prior quarter. The increase in the provision for the quarter is attributed predominately to a specific reserve established for the $74.9 million commercial real estate office loan mentioned earlier. Reserve for unfunded commitments was a reversal of $1.6 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 $4.1 million for the fourth quarter 2024, compared to $7.0 million for the prior quarter. The primary driver for the decrease was lower swap fee income.
- Noninterest expense was $44.5 million for the fourth quarter 2024, compared to $43.6 million for the prior quarter. The increase over the comparative quarters was primarily due to increased FDIC insurance expense.
- Total loans were $7.9 billion at December 31, 2024, down 0.4% from the prior quarter-end. The decrease in total loans was driven by a reduction in income producing commercial real estate loans from the prior quarter-end, partially offset by an increase in commercial and industrial loans and increased fundings of ongoing construction projects for commercial and residential properties.
- Total deposits at quarter-end were $9.1 billion, up $590.2 million, or 6.9%, from the prior quarter-end. The increase was primarily attributable to an increase in interest-bearing transaction and savings and money market accounts. Period end deposits have increased $323.0 million when compared to prior year comparable period end of December 31, 2023.
- Other short-term borrowings were $0.5 billion at December 31, 2024, down 60.5% from the prior quarter-end as BTFP borrowings were paid off with increased cash from deposits.
- Allowance for credit losses was 1.44% of total loans held for investment at December 31, 2024, compared to 1.40% at the prior quarter-end. Performing office coverage was 3.81% at quarter-end; as compared to 4.55% at the prior quarter-end.
- Net charge-offs were $9.5 million for the quarter compared to $5.3 million in the third quarter of 2024.
- Nonperforming assets were $211.5 million at December 31, 2024.
- NPAs as a percentage of assets were 1.90% at December 31, 2024, compared to 1.22% at the prior quarter-end. At December 31, 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 the previously mentioned $74.9 million commercial real estate office loan moving to non-accrual.
- Loans 30-89 days past due were $26.8 million at December 31, 2024, compared to $56.3 million at the prior quarter-end.
- Total shareholders' equity was $1.2 billion at December 31, 2024, up 0.1% from the prior quarter-end. The increase in shareholders' equity of $0.6 million was due to an increase in retained earnings offset by decreased valuations of available-for-sale securities.
- Book value per share and Tangible book value per share3 was $40.60 and $40.59, down 0.02% from the prior quarter-end.
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 fourth quarter 2024 financial results on Thursday, January 23, 2025 at 10:00 a.m. Eastern Time.
The listen-only webcast can be accessed at:
- https://edge.media-server.com/mmc/p/28kkw3ht/
- For analysts who wish to participate in the conference call, please register at the following URL:
- A replay of the conference call will be available on the Company's website through Thursday, February 6, 2025: https://www.eaglebankcorp.com/
| Eagle Bancorp, Inc. | |||||||||||
| Consolidated Statements of Operations (Unaudited) | |||||||||||
| (Dollars in thousands, except per share data) | |||||||||||
| Three Months Ended | |||||||||||
| December 31, | September 30, | December 31, | |||||||||
| 2024 | 2024 | 2023 | |||||||||
| Interest Income | |||||||||||
| Interest and fees on loans | $ | 132,943 | $ | 139,836 | $ | 135,964 | |||||
| Interest and dividends on investment securities | $ | 12,307 | $ | 12,578 | 13,142 | ||||||
| Interest on balances with other banks and short-term investments | $ | 23,045 | $ | 21,296 | 18,230 | ||||||
| Interest on federal funds sold | 122 | 103 | 85 | ||||||||
| Total interest income | $ | 168,417 | 173,813 | 167,421 | |||||||
| Interest Expense | |||||||||||
| Interest on deposits | $ | 83,002 | $ | 81,190 | 78,239 | ||||||
| Interest on customer repurchase agreements | $ | 294 | $ | 332 | 272 | ||||||
| Interest on other short-term borrowings | $ | 9,530 | $ | 20,448 | 15,918 | ||||||
| Interest on long-term borrowings | $ | 4,797 | $ | - | - | ||||||
| Total interest expense | $ | 97,623 | $ | 101,970 | 94,429 | ||||||
| Net Interest Income | 70,794 | 71,843 | 72,992 | ||||||||
| Provision for Credit Losses | $ | 12,132 | $ | 10,094 | 14,490 | ||||||
| Provision (Reversal) for Credit Losses for Unfunded Commitments | (1,598 | ) | (1,593 | ) | (594 | ) | |||||
| Net Interest Income After Provision for Credit Losses | 60,260 | 63,342 | 59,096 | ||||||||
| Noninterest Income | |||||||||||
| Service charges on deposits | $ | 1,744 | $ | 1,747 | 1,688 | ||||||
| Gain on sale of loans | $ | - | $ | 20 | 23 | ||||||
| Net gain on sale of investment securities | $ | 4 | $ | 3 | 3 | ||||||
| Increase in cash surrender value of bank-owned life insurance | $ | 742 | $ | 731 | 687 | ||||||
| Other income | $ | 1,577 | 4,450 | 493 | |||||||
| Total noninterest income | 4,067 | 6,951 | 2,894 | ||||||||
| Noninterest Expense | |||||||||||
| Salaries and employee benefits | $ | 22,597 | $ | 21,675 | 18,416 | ||||||
| Premises and equipment expenses | $ | 2,635 | $ | 2,794 | 2,967 | ||||||
| Marketing and advertising | $ | 1,340 | $ | 1,588 | 1,071 | ||||||
| Data processing | $ | 3,870 | $ | 3,435 | 3,436 | ||||||
| Legal, accounting and professional fees | $ | 641 | $ | 3,433 | 2,722 | ||||||
| FDIC insurance | $ | 9,281 | $ | 7,399 | 4,444 | ||||||
| Other expenses | $ | 4,168 | 3,290 | 4,042 | |||||||
| Total noninterest expense | 44,532 | 43,614 | 37,098 | ||||||||
| (Loss) Income Before Income Tax Expense | 19,795 | 26,679 | 24,892 | ||||||||
| Income Tax Expense | $ | 4,505 | $ | 4,864 | 4,667 | ||||||
| Net (Loss) Income | $ | 15,290 | $ | 21,815 | $ | 20,225 | |||||
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