EGBN Eagle Bancorp Inc

Eagle Bancorp, Inc. (the "Company") (NASDAQ: EGBN), the parent company of EagleBank (the "Bank"), today announced net income of $27.4 million for the third quarter 2023, compared to net income of $28.7 million for the second quarter 2023 (the "prior quarter") and $37.3 million for the third quarter 2022 (the "year-ago quarter"). Net income (basic and diluted) was $0.91 per share for the third quarter 2023, compared to $0.94 per share for the prior quarter, and $1.16 per share for the year-ago quarter.

The $1.3 million decrease in earnings from the prior quarter was attributable to several items including lower noninterest income as the prior quarter included nonrecurring recognition of income from a Small Business Investment Company ("SBIC") investment, lower net interest income as the cost of interest bearing liabilities outpaced income on interest-earning assets, and a reversal of $1.6 million of interest income because of a loan entering nonperforming status in the quarter.

Susan G. Riel, President and Chief Executive Officer of the Company commented, "The Company's steady performance this quarter was the result of continued efforts of the EagleBank team to offer our customers the products and services they need to run their businesses. As a result, our earnings and margin, absent the reversal of interest income, continued to stabilize. Additionally, our funding mix improved with deposit inflows and paydowns of short-term debt, and our asset quality metrics and regulatory capital ratios remain strong.

"The EagleBank team is working diligently to position the Company's balance sheet to enable appropriate diversification of assets and loans, and is building capabilities to drive core deposit growth. These strategies will position the Company for future sustainable growth and an enhanced earnings profile. I am excited about the future of EagleBank and its ability to serve our communities and customers through the successful execution of these strategies.       "We once again thank all of our employees for their commitment in serving the needs of our clients and communities. Additionally, we remain committed to a culture of respect, diversity and inclusion in both the workplace and the communities we serve."

Third Quarter 2023 Highlights

• The funding mix continued to improve as deposits at quarter-end were $8.4 billion, up $658 million, or 8.5%, from the prior quarter-end, and short-term borrowings declined $537 million, or 29.2%, ending at $1.3 billion. The increase in deposits was primarily from growth in savings and money market and time deposits. Brokered deposits were down $38 million, declining to 29.1% of deposits at quarter-end, from 32.1% a quarter ago. The decrease in borrowings was from repayment of all Federal Home Loan Bank ("FHLB") borrowings. Remaining short-term borrowings at quarter-end were entirely from the Bank Term Funding Program ("BTFP"), which remained unchanged from the prior quarter-end.
• The net interest margin ("NIM") was 2.43% for the third quarter 2023, compared to 2.49% for the prior quarter. The reversal of $1.6 million of interest income, reduced the NIM by 6 basis points.
• The Company declared a quarterly dividend of $0.45 per share.
• At quarter-end, the common equity and tangible common equity ratios were 10.89% and 10.04%1, respectively.
• Loans at quarter-end were $7.9 billion, up $150 million, or 1.9%, from the prior quarter-end. This was the eighth consecutive quarterly increase.
• Nonperforming assets as a percentage of total assets was 0.64% and the net charge-off (annualized) for the quarter was 0.02% of average total loans.
• The provision for credit losses was $5.6 million for the quarter, as compared to $5.2 million the prior quarter. The allowance for credit losses as a percent of total loans was 1.05% at quarter-end; up from 1.00% a quarter ago.
• Total estimated uninsured deposits at September 30, 2023 were $2.5 billion2, or 29.6% of deposits.

(Dollars in thousands, except per share data)	As of or for the Three Months Ended												Percent Change
	Sept. 30,				June 30,				Sept. 30,				Q3-23			Q3-23
		2023				2023				2022			vs. Q2-23			vs. Q3-22
Earnings and Per Share Data
Net Income	$	27,383			$	28,692			$	37,297			(4.6)%			(26.6)%
Earnings per common share (diluted)	$	0.91			$	0.94			$	1.16			(2.8)%			(21.2)%
Dividend per common share	$	0.45			$	0.45			$	0.45
Return Ratios
Return on average assets		0.91	%			0.96	%			1.29	%
Return on average common equity		8.80	%			9.24	%			11.64	%
Return on average tangible common equity1		9.61	%			10.08	%			12.67	%
Net interest margin		2.43	%			2.49	%			3.02	%
Efficiency ratio1		48.8	%			47.2	%			40.6	%
Balance Sheet
Assets	$	11,164			$	11,035			$	10,713			1.2	%		4.2	%
Loans	$	7,916			$	7,767			$	7,304			1.9	%		8.4	%
Deposits	$	8,376			$	7,718			$	8,763			8.5	%		(4.4)%
Borrowings	$	1,370			$	1,907			$	585			(28.2)%			134.3	%
Book and Tangible Book
Book value per common share	$	40.64			$	40.78			$	38.02			(0.3)%			6.9	%
Tangible book per common share1	$	37.12			$	37.29			$	34.77			(0.5)%			6.8	%
Capital Ratios
Equity/assets		10.89	%			11.05	%			11.39	%
Tangible equity/assets		10.04	%			10.21	%			10.52	%
Total capital (to risk weighted assets)		14.54	%			14.51	%			15.60	%
Asset Quality
Allowance for credit losses to total loans		1.05	%			1.00	%			1.04	%
Nonperforming assets ("NPAs") to total assets		0.64	%			0.28	%			0.09	%
Net charge-off to average loans (annualized)		0.02	%			0.29	%			—	%

Income Statement

• Net interest income was $70.7 million for the third quarter 2023, compared to $71.8 million for the prior quarter and $83.9 million for the year-ago quarter. The decrease in net interest income from the prior quarter was primarily driven by the continued shift of deposit balances by customers from noninterest bearing demand deposits to interest bearing accounts. Loan interest income increased despite the reversal of $1.6 million of interest income because of a loan entering nonperforming status in the quarter.

• Net interest margin ("NIM") was 2.43% for the third quarter 2023, compared to 2.49% for the prior quarter and 3.02% for the year-ago quarter. The reversal of $1.6 million of interest income, reduced the NIM by 6 basis points.
  • The yield on the loan portfolio was 6.73% for the third quarter 2023, compared to 6.64% for the prior quarter and 5.10% for the year-ago quarter. The increase of 9 basis points from the prior quarter was from variable rate loans adjusting upward and from higher rates on newly originated loans, offset by the reversal of $1.6 million of interest income. The reversal of interest income reduced the yield on the loan portfolio by 8 basis points.
  • The cost of funds was 3.39% for third quarter 2023, compared to 3.20% for the prior quarter and 1.09% for the year-ago quarter.3 The increase of 19 basis points from the prior quarter was primarily due to the impact of higher interest rates paid on deposits along with a continued shift in noninterest bearing deposit accounts to interest bearing deposit accounts.
• Pre-provision net revenue ("PPNR"),4 a non-GAAP measure, was $39.4 million, or 1.31% of average assets for the third quarter 2023, down from $42.4 million and 1.43%, respectively. This decrease from the prior quarter in both PPNR and PPNR as a percent of average assets was primarily attributable to the prior quarter including nonrecurring Small Business Investment Company ("SBIC") income in noninterest income.

(Dollars in thousands)	Three Months Ended												Percent Change
	Sept. 30,				June 30,				Sept. 30,				Q3-23		Q3-23
		2023				2023				2022			vs. Q2-23		vs. Q3-22
Net interest income	$	70,719			$	71,811			$	83,897			(1.5)%		(15.7)%
Noninterest income		6,347				8,595				5,308			(26.2)%		19.6	%
Noninterest expense		(37,633	)			(37,978	)			(36,206	)		(0.9)%		3.9	%
PPNR (non-GAAP)	$	39,433			$	42,428			$	52,999			(7.1)%		(25.6)%
Average Assets	$	11,942,905			$	11,960,111			$	11,431,110			(0.1)%		4.5	%
	As a Percent of Average Assets												Basis Point Change
Net interest income		2.35	%			2.41	%			2.91	%		(6) bps		(56) bps
Noninterest income		0.21	%			0.29	%			0.18	%		(8) bps		3 bps
Noninterest expense	(1.25)%				(1.27)%				(1.26)%				2 bps		1 bps
PPNR to Average Assets (non-GAAP)		1.31	%			1.43	%			1.83	%		(12) bps		(52) bps

• Provision for credit losses on loans was $5.6 million for the third quarter 2023, compared to $5.2 million for the prior quarter and $3.0 million for the year-ago quarter. The increase in the third quarter 2023 provision over the prior quarter was primarily driven by increases in qualitative reserves combined with a smaller increase in the quantitative reserve. The increase in qualitative reserves was driven by increases in early-stage past dues and perceived weakness in the commercial real estate ("CRE") market. The increase in quantitative reserve was primarily due to loan growth during the quarter, particularly in longer-life categories that carry corresponding higher reserves as well as slowing prepayment speeds in certain loan categories due to higher interest rates, partly offset by modest improvements in the unemployment forecast.

• Noninterest income was $6.3 million for the third quarter 2023, as compared to $8.6 million for the prior quarter and $5.3 million for the year-ago quarter. The primary driver for the decrease in the third quarter 2023 from the prior quarter was the prior quarter included nonrecurring income of $2.8 million from an SBIC fund.

• Noninterest expense was $37.6 million for the third quarter 2023 compared to $38.0 million for the prior quarter and $36.2 million for the year-ago quarter. Noninterest expense was down $345 thousand from the prior quarter, primarily due to lower overall expenses offset by higher FDIC fees, which were up $761 thousand from the prior quarter on higher assessment fees.

• Efficiency ratio5 was 48.8% for the third quarter 2023, compared to 47.2% for the prior quarter.

• Effective income tax rate for the third quarter 2023 was 20.9%, compared to 22.2% for the prior quarter. The decrease in the effective tax rate this quarter was primarily driven by a reduction in the permanent tax adjustment for compensation to covered employees.

Balance Sheet

• Total assets were $11.2 billion at September 30, 2023, up 1.2% from a quarter ago and up 4.2% from a year ago. The increase in assets from a quarter ago was primarily from an increase in loans and interest bearing deposits with banks and other short-term investments, offset by lower balances on investment securities.

• Investment securities had a balance of $2.5 billion at September 30, 2023, down 3.2% from a quarter ago and down 9.3% from a year ago. The decrease from the prior quarter-end was primarily from principal paydowns, maturities received and lower fair values on AFS securities. No new investments were purchased during the third quarter of 2023. Investment securities held-to-maturity had a fair value that was $160 million less than carrying value at quarter-end, compared to a difference of $132 million a quarter ago. The decrease in fair values from the prior quarter-end were primarily from the impact of the increasing interest rate environment on market valuations.

• Total loans (excluding loans held for sale) were $7.9 billion at September 30, 2023, up 1.9% from a quarter ago and up 8.4% from a year ago. The increase in total loans from the prior quarter-end was driven by growth in CRE loans (income producing and owner occupied) and construction loans for commercial and residential properties as period-end balances for commercial & industrial loans were down. At September 30, 2023, income-producing commercial real estate loans secured by office properties other than owner-occupied properties ("CRE office loans") were 12.0% of the total loan portfolio. Our CRE office loans are primarily located in the Washington DC market; with 24.5% in the District of Columbia, 33.9% in Washington's Maryland suburbs, 34.0% in Northern Virginia, and 7.6% located outside these markets.

(Dollars in thousands)	Sept. 30, 2023					June 30, 2023					Sept. 30, 2022
	Amount		%			Amount		%			Amount		%
Loan Balances - Period End:
Commercial and Industrial	$	1,418,760	18	%		$	1,431,284	18	%		$	1,415,998	19	%
PPP loans		588	—	%			649	—	%			7,241	—	%
Commercial real estate - income producing		4,147,301	52	%			4,086,049	53	%			3,668,720	50	%
Commercial real estate - owner occupied		1,182,959	15	%			1,122,334	14	%			1,091,283	15	%
1-4 Family mortgage		76,511	1	%			76,596	1	%			71,731	1	%
Construction - commercial and residential		904,282	11	%			862,869	11	%			858,100	12	%
Construction - C&I (owner occupied)		129,616	2	%			132,843	2	%			139,238	2	%
Home equity		53,917	1	%			53,934	1	%			51,396	1	%
Other consumer		2,457	—	%			161	—	%			791	—	%
Total loans	$	7,916,391	100	%		$	7,766,719	100	%		$	7,304,498	100	%

• Allowance for credit losses was 1.05% of total loans at September 30, 2023, compared to 1.00% a quarter ago, and 1.04% a year ago. See commentary above in section "Provision for Credit Losses on Loans." Net charge-off was $340 thousand for the quarter, which as a percent of average loans (excluding loans held for sale)6 was 0.02% for the third quarter 2023, compared to 0.29% a quarter ago, and net recovery of less than 0.01% the year-ago quarter. Charge-offs for the third quarter 2023 were related to three SBA loans.

• Nonperforming loans and assets were $70.4 million and $71.9 million, respectively, at September 30, 2023.
  • Nonperforming loans ("NPLs") as a percent of loans were 0.89% at September 30, 2023, compared to 0.37% a quarter ago and 0.10% a year ago. The increase from a quarter ago was primarily from the addition of one multi-family credit in the District of Columbia.
  • Nonperforming assets ("NPAs") as a percent of assets were 0.64% at September 30, 2023, compared to 0.28% a quarter ago and 0.09% a year ago. The increase in NPAs from the prior quarter are related to the same NPL discussed above. At quarter end, other real estate owned consisted of three properties with an aggregate value of $1.5 million.
  • Loans 30-89 days late were $46.5 million at September 30, 2023, up from $41.0 million a quarter ago and $16.2 million a year ago. The increase from the prior quarter was primarily from one office property in northern Virginia and one assisted living facility in Maryland, offset by the migration of the multi-family credit to nonperforming.

(Dollars in thousands)	Three Months Ended or As Of
	Sept. 30,			June 30,			Sept. 30,
	2023			2023			2022
Asset Quality:
Net charge-off (recovery)	$	340		$	5,598		$	(57	)
Nonperforming loans	$	70,418		$	29,098		$	7,601
Other real estate owned	$	1,487		$	1,487		$	1,962
Nonperforming assets	$	71,905		$	30,585		$	9,563
Special mention	$	158,182		$	155,810		$	106,672
Substandard	$	219,001		$	219,045		$	89,724

• Total deposits were $8.4 billion at September 30, 2023, up 8.5% from a quarter ago and down 4.4% from a year ago. The increase from the prior quarter-end was primarily attributable to an increase in savings/money market and time deposits. Brokered deposits were 29.1% of deposits at quarter-end, down from 32.1% a quarter ago. The decrease in brokered funds as a percent of deposits was from both the increase in total deposits and a decline in brokered demand deposits. The increase in deposits lowered the loan-to-deposit ratio to 95% at September 30, 2023, down from 101% a quarter ago. For the quarter, average noninterest bearing deposits to average total deposits was 25.1% for the third quarter 2023, down from 30.1% a quarter ago and down from 38.4% for the year-ago quarter. Total estimated uninsured deposits at September 30, 2023 were $2.5 billion7, or 29.6% of deposits.

• Other short-term borrowings were $1.3 billion at September 30, 2023, down from $1.8 billion a quarter ago, and up from $515 million a year ago. The decrease in borrowings of $537 million from a quarter ago was primarily driven by the pay down of all FHLB borrowings enabled by the increase in deposits. BTFP borrowings were $1.3 billion at September 30, 2023, unchanged from the prior quarter, with a rate of 4.53% for a term of up to one year from the date the proceeds were borrowed. As of September 30, 2023, the Company had aggregate available borrowing capacity of $2.3 billion, which includes $2.0 billion in additional aggregate capacity to borrow with the FHLB and BTFP on assets that have been pledged and unencumbered securities totaling approximately $270 million available for pledging to the FHLB or BTFP.

• Total shareholders’ equity was $1.2 billion at September 30, 2023, down 0.3% from a quarter ago, and down 0.3% from a year ago. The decrease in shareholders' equity of $3.9 million from the prior quarter-end was primarily from lower valuations of AFS securities and dividends declared, partially offset by net income.
  • Book value per share was $40.64, down $0.14 from a quarter ago, and up $2.62 from a year ago.
  • Tangible book value per share8 was $37.12, down $0.17 from a quarter ago, and up $2.35 from a year ago.
• Dividends: On September 27, 2023, the Board of Directors declared a quarterly cash dividend of $0.45 per share payable on October 31, 2023 to shareholders of record on October 20, 2023.
• Stock Repurchases: There were no stock repurchases during the third quarter as the 2023 Stock Repurchase Plan was completed in the second quarter of 2023.
• Capital ratios for the Company are in the table below. Regulatory capital ratios for the Company continue to be strong and in excess of the regulatory requirements (inclusive of applicable buffers).

	For the Company									Regulatory
	Sept. 30,			June 30,			Sept. 30,			Capital
	20239			2023			2022			Requirements
Regulatory Capital Ratios
Total Capital (to risk weighted assets)	14.54	%		14.52	%		15.60	%		10.50	%
Tier 1 Capital (to risk weighted assets)	13.68	%		13.55	%		14.64	%		8.50	%
Common Equity Tier 1 (to risk weighted assets)	13.68	%		13.55	%		14.64	%		7.00	%
Tier 1 Capital (to average assets)	10.96	%		10.84	%		11.55	%		4.00	%
Common Capital Ratios
Common Equity Ratio	10.89	%		11.05	%		11.39	%		—
Tangible Common Equity Ratio8	10.04	%		10.21	%		10.52	%		—

Additional financial information: The financial information that follows provides more detail on the Company’s financial performance for the three months ended September 30, 2023 as compared to the three months ended June 30, 2023 and September 30, 2022, 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, 2022, 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 thirteen 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 2023 financial results on Thursday, October 26, 2023 at 10:00 a.m. eastern time.

The listen-only webcast can be accessed at:https://edge.media-server.com/mmc/p/iffrccgu/

For analysts who wish to participate in the conference call, please register at the following URL:https://register.vevent.com/register/BIab5af7f55cc3442a8257605b6478c064

A replay of the conference call will be available on the Company’s website through November 9, 2023: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, 2022 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. Information regarding the Company’s uninsured deposits consists of preliminary estimates, which are forward-looking statements and subject to change, possibly materially, as the Bank completes its third quarter 2023 Call Report. 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.

1 A reconciliation between this non-GAAP financial measure and the nearest GAAP measure is provided in the tables that accompany this document.2 Estimated amount of uninsured deposits to be reported on line RCON5597 of schedule RC-O in the Bank's September 30, 2023 Call Report.3 Beginning in the second quarter of 2023, the Company revised its methodology for calculating cost of funds. Prior periods have been conformed to the current presentation. See footnote (3) on page 14.4 A reconciliation between this non-GAAP financial measure and the nearest GAAP measure is provided in the table below. 5 A reconciliation between this non-GAAP financial measure and the nearest GAAP measure is provided in the tables that accompany this document.6 Net charge-offs as a percent of average loans (excluding loans held for sale) are shown on an annualized basis.7 Estimated amount of uninsured deposits to be reported on line RCON5597 of schedule RC-O in the Bank's September 30, 2023 Call Report.8 A reconciliation of non-GAAP financial measures to the nearest GAAP measure is provided in the tables that accompany this document.9 Capital ratios for September 30, 2023 are subject to final filings with the Federal Reserve.

GAAP Reconciliation (unaudited)
(dollars in thousands, except per share data)
	September 30,				June 30,				September 30,
		2023				2023				2022
Tangible equity and assets
Common shareholders' equity	$	1,215,884			$	1,219,766			$	1,219,771
Less: Intangible assets		(105,239	)			(104,220	)			(104,240	)
Tangible common equity	$	1,110,645			$	1,115,546			$	1,115,531
Book value per common share	$	40.64			$	40.78			$	38.02
Less: Intangible book value per common share		(3.52	)			(3.49	)			(3.25	)
Tangible book value per common share	$	37.12			$	37.29			$	34.77
Shares outstanding period end		29,917,982				29,912,082				32,082,321
Total assets	$	11,164,214			$	11,034,741			$	10,713,044
Less: Intangible assets		(105,239	)			(104,220	)			(104,240	)
Tangible assets	$	11,058,975			$	10,930,521			$	10,608,804
Tangible common equity ratio		10.04	%			10.21	%			10.52	%
	Three Months Ended
	September 30,				June 30,				September 30,
		2023				2023				2022
Average tangible common equity
Average common shareholders' equity	$	1,235,162			$	1,245,647			$	1,271,753
Less: Average intangible assets		(104,639	)			(104,224	)			(104,253	)
Average tangible common equity	$	1,130,523			$	1,141,423			$	1,167,500
Return on Average Tangible Common Equity		9.61	%			10.08	%			12.67	%
Efficiency ratio
Net interest income	$	70,719			$	71,811			$	83,897
Noninterest income		6,347				8,595				5,308
Operating revenue	$	77,066			$	80,406			$	89,205
Noninterest expense	$	37,633			$	37,978			$	36,206
Efficiency ratio		48.8	%			47.2	%			40.6	%

GAAP Reconciliation - Notes

Tangible common equity to tangible assets (the "tangible common equity ratio"), tangible book value per common share, average tangible common equity, and the 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 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 considers this information important to shareholders as 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 above tables provide reconciliations of these financial measures defined by GAAP with non-GAAP financial measures.

Efficiency ratio is a non-GAAP measure calculated by dividing GAAP non-interest expense by the sum of GAAP net interest income and GAAP non-interest (loss) income. The Company believes that reporting the non-GAAP efficiency ratio more closely measures its effectiveness of controlling operational activities. The table above shows the calculation of the efficiency ratio from these GAAP measures.

PPNR is a non-GAAP financial measure derived from GAAP based amounts. The Company calculates PPNR by subtracting noninterest expenses from the sum of net interest income and noninterest income. PPNR to Average Assets is calculated by dividing the PPNR amount by average assets to obtain a percentage. 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. The table in the "Income Statement" section of this earnings release provides a reconciliation of the nearest GAAP measure to PPNR and PPNR to Average Assets.

Eagle Bancorp, Inc.
Consolidated Balance Sheets (Unaudited)
(Dollars in thousands, except per share data)
	September 30,				June 30,				September 30,
Assets		2023				2023				2022
Cash and due from banks	$	8,625			$	9,865			$	27,235
Federal funds sold		13,611				3,981				69,809
Interest-bearing deposits with banks and other short-term investments		235,819				174,072				47,131
Investment securities available-for-sale at fair value (amortized cost of $1,700,233, $1,732,722, and $1,873,872, net of allowance for credit losses of $17, $17 and $18 as of September 30, 2023, June 30, 2023 and September 30, 2022, respectively)		1,474,945				1,535,589				1,649,753
Investment securities held-to-maturity at amortized cost, net of allowance for credit losses of $2,010, $2,010 and $802 (fair value of $872,710, $923,313 and $989,001, as of September 30, 2023, June 30, 2023 and September 30, 2022, respectively)		1,032,485				1,055,181				1,114,084
Federal Reserve and Federal Home Loan Bank stock		25,689				46,199				42,311
Loans held for sale		—				—				9,387
Loans		7,916,391				7,766,719				7,304,498
Less allowance for credit losses		(83,332	)			(78,029	)			(75,767	)
Loans, net		7,833,059				7,688,690				7,228,731
Premises and equipment, net		11,216				11,979				13,684
Operating lease right-of-use assets		20,151				21,580				26,022
Deferred income taxes		98,987				92,574				112,904
Bank-owned life insurance		112,234				111,565				110,678
Goodwill and intangible assets, net		105,239				104,220				104,240
Other real estate owned		1,487				1,487				1,962
Other assets		190,667				177,759				155,113
Total assets	$	11,164,214			$	11,034,741			$	10,713,044
Liabilities and Shareholders' Equity
Deposits:
Noninterest bearing demand	$	2,072,665			$	2,010,353			$	2,928,774
Interest bearing transaction		932,779				930,308				964,567
Savings and money market		3,129,773				2,791,040				4,220,768
Time deposits		2,241,089				1,986,426				649,241
Total deposits		8,376,306				7,718,127				8,763,350
Customer repurchase agreements		25,689				37,017				21,465
Other short-term borrowings		1,300,001				1,836,759				515,000
Long-term borrowings		69,887				69,856				69,763
Operating lease liabilities		24,422				26,007				30,837
Reserve for unfunded commitments		6,183				7,023				5,696
Other liabilities		145,842				120,186				87,162
Total liabilities		9,948,330				9,814,975				9,493,273
Shareholders' Equity
Common stock, par value $.01 per share; shares authorized 100,000,000, shares issued and outstanding 29,917,982, 29,912,082, and 32,082,321 respectively		296				296				318
Additional paid in capital		372,394				370,278				442,880
Retained earnings		1,054,699				1,040,779				987,212
Accumulated other comprehensive loss		(211,505	)			(191,587	)			(210,639	)
Total Shareholders' Equity		1,215,884				1,219,766				1,219,771
Total Liabilities and Shareholders' Equity	$	11,164,214			$	11,034,741			$	10,713,044

Eagle Bancorp, Inc.
Consolidated Statements of Income (Unaudited)
(Dollars in thousands, except per share data)
	Three Months Ended
	September 30				June 30,			September 30,
		2023			2023			2022
Interest Income
Interest and fees on loans	$	132,273			$	128,993		$	93,744
Interest and dividends on investment securities		13,732				14,241			13,463
Interest on balances with other banks and short-term investments		15,067				13,229			4,100
Interest on federal funds sold		77				47			220
Total interest income		161,149				156,510			111,527
Interest Expense
Interest on deposits		70,929				59,422			26,125
Interest on customer repurchase agreements		311				333			55
Interest on other short-term borrowings		18,152				23,907			412
Interest on long-term borrowings		1,038				1,037			1,038
Total interest expense		90,430				84,699			27,630
Net Interest Income		70,719				71,811			83,897
Provision for Credit Losses		5,644				5,238			3,022
(Reversal of) Provision for Credit Losses for Unfunded Commitments		(839	)			318			774
Net Interest Income After (Reversal of) Provision For Credit Losses		65,914				66,255			80,101
Noninterest Income
Service charges on deposits		1,631				1,626			1,339
(Loss) Gain on sale of loans		(5	)			95			821
Net gain on sale of investment securities		5				2			4
Increase in cash surrender value of bank-owned life insurance		669				648			631
Other income		4,047				6,224			2,513
Total noninterest income		6,347				8,595			5,308
Noninterest Expense
Salaries and employee benefits		21,549				21,957			21,538
Premises and equipment expenses		3,095				3,227			3,275
Marketing and advertising		768				884			1,181
Data processing		3,194				3,354			3,445
Legal, accounting and professional fees		2,162				2,649			2,332
FDIC insurance		3,342				2,581			1,287
Other expenses		3,523				3,326			3,148
Total noninterest expense		37,633				37,978			36,206
Income Before Income Tax Expense		34,628				36,872			49,203
Income Tax Expense		7,245				8,180			11,906
Net Income	$	27,383			$	28,692		$	37,297
Earnings Per Common Share
Basic	$	0.91			$	0.94		$	1.16
Diluted	$	0.91			$	0.94		$	1.16

Eagle Bancorp, Inc.
Consolidated Average Balances, Interest Yields And Rates vs. Prior Quarter (Unaudited)
(Dollars in thousands)
	Three Months Ended
	September 30, 2023									June 30, 2023
	Average Balance			Interest			AverageYield/Rate			Average Balance			Interest			AverageYield/Rate
ASSETS
Interest earning assets:
Interest bearing deposits with other banks and other short-term investments	$	1,127,451		$	15,067		5.30	%		$	1,053,961		$	13,229		5.03	%
Loans held for sale(1)		—			—		—	%			813			13		6.41	%
Loans(1) (2)		7,795,144			132,273		6.73	%			7,790,555			128,980		6.64	%
Investment securities available-for-sale(2)		1,554,348			8,126		2.07	%			1,626,330			8,526		2.10	%
Investment securities held-to-maturity(2)		1,047,515			5,606		2.12	%			1,068,755			5,715		2.14	%
Federal funds sold		7,728			77		3.95	%			5,636			47		3.34	%
Total interest earning assets		11,532,186		$	161,149		5.54	%			11,546,050		$	156,510		5.44	%
Total noninterest earning assets		489,683									492,426
Less: allowance for credit losses		78,964									78,365
Total noninterest earning assets		410,719									414,061
TOTAL ASSETS	$	11,942,905								$	11,960,111
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
Interest bearing transaction	$	1,421,522		$	12,785		3.57	%		$	1,312,710		$	10,640		3.25	%
Savings and money market		3,113,755			32,855		4.19	%			2,967,678			30,861		4.17	%
Time deposits		2,162,582			25,289		4.64	%			1,675,690			17,921		4.29	%
Total interest bearing deposits		6,697,859			70,929		4.20	%			5,956,078			59,422		4.00	%
Customer repurchase agreements		36,082			311		3.42	%			41,105			333		3.25	%
Other short-term borrowings		1,540,221			18,152		4.68	%			1,991,557			23,907		4.81	%
Long-term borrowings		69,876			1,038		5.89	%			69,845			1,037		5.96	%
Total interest bearing liabilities		8,344,038		$	90,430		4.30	%			8,058,585		$	84,699		4.22	%
Noninterest bearing liabilities:
Noninterest bearing demand		2,248,782									2,558,860
Other liabilities		114,923									97,019
Total noninterest bearing liabilities		2,363,705									2,655,879
Shareholders’ equity		1,235,162									1,245,647
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	11,942,905								$	11,960,111
Net interest income				$	70,719								$	71,811
Net interest spread							1.24	%								1.22	%
Net interest margin							2.43	%								2.49	%
Cost of funds							3.39	%								3.20	%

(1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $4.1 million and $4.2 million for the three months ended September 30, 2023 and June 30, 2023, 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,
		2023									2022
	Average Balance			Interest			AverageYield/Rate			Average Balance			Interest			AverageYield/Rate
ASSETS
Interest earning assets:
Interest bearing deposits with other banks and other short-term investments	$	1,127,451		$	15,067		5.30	%		$	771,063		$	4,100		2.11	%
Loans held for sale(1)		—			—		—	%			11,586			150		5.14	%
Loans(1) (2)		7,795,144			132,273		6.73	%			7,282,589			93,594		5.10	%
Investment securities available-for-sale(2)		1,554,348			8,126		2.07	%			1,782,859			7,587		1.69	%
Investment securities held-to-maturity(2)		1,047,515			5,606		2.12	%			1,128,943			5,876		2.06	%
Federal funds sold		7,728			77		3.95	%			53,630			220		1.63	%
Total interest earning assets		11,532,186		$	161,149		5.54	%			11,030,670		$	111,527		4.01	%
Total noninterest earning assets		489,683									475,581
Less: allowance for credit losses		78,964									75,141
Total noninterest earning assets		410,719									400,440
TOTAL ASSETS	$	11,942,905								$	11,431,110
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
Interest bearing transaction	$	1,421,522		$	12,785		3.57	%		$	960,970		$	1,891		0.78	%
Savings and money market		3,113,755			32,855		4.19	%			4,504,216			21,711		1.91	%
Time deposits		2,162,582			25,289		4.64	%			633,241			2,523		1.58	%
Total interest bearing deposits		6,697,859			70,929		4.20	%			6,098,427			26,125		1.70	%
Customer repurchase agreements		36,082			311		3.42	%			26,546			55		0.82	%
Other short-term borrowings		1,540,221			18,152		4.68	%			61,703			412		2.65	%
Long-term borrowings		69,876			1,038		5.89	%			69,752			1,038		5.90	%
Total interest bearing liabilities		8,344,038		$	90,430		4.30	%			6,256,428		$	27,630		1.75	%
Noninterest bearing liabilities:
Noninterest bearing demand		2,248,782									3,809,070
Other liabilities		114,923									93,859
Total noninterest bearing liabilities		2,363,705									3,902,929
Shareholders’ equity		1,235,162									1,271,753
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	11,942,905								$	11,431,110
Net interest income				$	70,719								$	83,897
Net interest spread							1.24	%								2.26	%
Net interest margin							2.43	%								3.02	%
Cost of funds(3)							3.39	%								1.09	%

(1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $4.1 million and $3.4 million for the three months ended September 30, 2023 and September 30, 2022, respectively.(2) Interest and fees on loans and investments exclude tax equivalent adjustments.(3) Beginning in the second quarter of 2023, the Company revised its cost of funds methodology to use a daily average calculation where interest expense on interest bearing liabilities is divided by average interest bearing liabilities and average noninterest bearing deposits. Previously, the Company calculated the cost of funds as the difference between yield on earning assets and net interest margin.

Eagle Bancorp, Inc.
Statements of Income 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:		2023				2023				2023				2022				2022				2022				2022				2021
Total interest income	$	161,149			$	156,510			$	140,247			$	129,130			$	111,527			$	95,635			$	88,321			$	86,230
Total interest expense		90,430				84,699				65,223				43,530				27,630				12,717				7,869				8,044
Net interest income		70,719				71,811				75,024				85,600				83,897				82,918				80,452				78,186
Provision for (reversal of) credit losses		5,644				5,238				6,164				(464	)			3,022				495				(2,787	)			(6,412	)
Provision for (reversal of) unfunded commitments		(839	)			318				848				161				774				553				(11	)			(632	)
Net interest income after provision for credit losses		65,914				66,255				68,012				85,903				80,101				81,870				83,250				85,230
Noninterest income before investment gain (loss)		6,342				8,593				3,721				5,326				5,304				5,715				7,478				9,668
Net gain (loss) on sale of investment securities		5				2				(21	)			3				4				(151	)			(25	)			906
Total noninterest income		6,347				8,595				3,700				5,329				5,308				5,564				7,453				10,574
Salaries and employee benefits		21,549				21,957				24,174				23,691				21,538				21,805				17,019				24,608
Premises and equipment		3,095				3,227				3,317				3,292				3,275				3,523				3,128				3,755
Marketing and advertising		768				884				636				1,290				1,181				1,186				1,064				1,286
Other expenses		12,221				11,910				12,457				10,645				10,212				32,448				9,801				9,660
Total noninterest expense		37,633				37,978				40,584				38,918				36,206				58,962				31,012				39,309
Income before income tax expense		34,628				36,872				31,128				52,314				49,203				28,472				59,691				56,495
Income tax expense		7,245				8,180				6,894				10,121				11,906				12,776				13,947				14,875
Net income	$	27,383			$	28,692			$	24,234			$	42,193			$	37,297			$	15,696			$	45,744			$	41,620
Per Share Data:
Earnings per weighted average common share, basic	$	0.91			$	0.94			$	0.78			$	1.32			$	1.16			$	0.49			$	1.43			$	1.30
Earnings per weighted average common share, diluted	$	0.91			$	0.94			$	0.78			$	1.32			$	1.16			$	0.49			$	1.42			$	1.30
Weighted average common shares outstanding, basic		29,910,218				30,454,766				31,109,267				31,819,631				32,084,464				32,080,657				32,033,280				31,950,320
Weighted average common shares outstanding, diluted		29,944,692				30,505,468				31,180,346				31,898,619				32,155,678				32,142,427				32,110,099				32,030,998
Actual shares outstanding at period end		29,917,982				29,912,082				31,111,647				31,346,903				32,082,321				32,081,241				32,079,474				31,950,092
Book value per common share at period end	$	40.64			$	40.78			$	39.92			$	39.18			$	38.02			$	39.05			$	39.89			$	42.28
Tangible book value per common share at period end(1)	$	37.12			$	37.29			$	36.57			$	35.86			$	34.77			$	35.80			$	36.64			$	38.97
Dividend per common share	$	0.45			$	0.45			$	0.45			$	0.45			$	0.45			$	0.45			$	0.40			$	0.40
Performance Ratios (annualized):
Return on average assets		0.91	%			0.96	%			0.86	%			1.49	%			1.29	%			0.54	%			1.46	%			1.32	%
Return on average common equity		8.80	%			9.24	%			7.92	%			13.57	%			11.64	%			4.91	%			13.83	%			12.30	%
Return on average tangible common equity(1)		9.61	%			10.08	%			8.65	%			14.82	%			12.67	%			5.35	%			14.99	%			13.35	%
Net interest margin		2.43	%			2.49	%			2.77	%			3.14	%			3.02	%			2.94	%			2.65	%			2.55	%
Efficiency ratio(2)		48.8	%			47.2	%			51.6	%			42.8	%			40.6	%			66.6	%			35.3	%			44.3	%
Other Ratios:
Allowance for credit losses to total loans(3)		1.05	%			1.00	%			1.01	%			0.97	%			1.04	%			1.02	%			1.01	%			1.06	%
Allowance for credit losses to total nonperforming loans		118	%			268	%			1,160	%			1,151	%			997	%			386	%			301	%			257	%
Nonperforming loans to total loans(3)		0.89	%			0.37	%			0.09	%			0.08	%			0.10	%			0.26	%			0.33	%			0.41	%
Nonperforming assets to total assets		0.64	%			0.28	%			0.08	%			0.08	%			0.09	%			0.19	%			0.23	%			0.26	%
Net charge-off (recovery)(annualized) to average total loans(3)		0.02	%			0.29	%			0.05	%			0.05	%			—	%		(0.04)%					0.03	%			0.07	%
Tier 1 capital (to average assets)		10.96	%			10.84	%			11.42	%			11.63	%			11.55	%			10.68	%			9.82	%			10.19	%
Total capital (to risk weighted assets)		14.54	%			14.51	%			14.74	%			14.94	%			15.60	%			15.14	%			15.21	%			15.74	%
Common equity tier 1 capital (to risk weighted assets)		13.68	%			13.55	%			13.75	%			14.03	%			14.64	%			14.06	%			14.12	%			14.63	%
Tangible common equity ratio(1)		10.04	%			10.21	%			10.36	%			10.18	%			10.52	%			10.60	%			10.57	%			10.60	%
Average Balances (in thousands):
Total assets	$	11,942,905			$	11,960,111			$	11,426,056			$	11,255,956			$	11,431,110			$	11,701,679			$	12,701,152			$	12,538,596
Total earning assets	$	11,532,186			$	11,546,050			$	11,004,817			$	10,829,703			$	11,030,670			$	11,300,267			$	12,326,473			$	12,180,872
Total loans(3)	$	7,795,144			$	7,790,555			$	7,712,023			$	7,379,198			$	7,282,589			$	7,104,727			$	7,053,701			$	6,890,414
Total deposits	$	8,946,641			$	8,514,938			$	8,734,125			$	9,524,139			$	9,907,497			$	10,184,886			$	10,874,976			$	10,670,206
Total borrowings	$	1,646,179			$	2,102,507			$	1,359,463			$	411,060			$	158,001			$	152,583			$	371,987			$	402,393
Total shareholders’ equity	$	1,235,162			$	1,245,647			$	1,240,978			$	1,233,705			$	1,271,753			$	1,281,742			$	1,341,785			$	1,342,525

(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.

EAGLE BANCORP, INC.

CONTACT:

David G. Danielson

240.552.9534