Eagle Bancorp, Inc. (the "Company") (NASDAQ: EGBN), the parent
company of EagleBank (the "Bank"), today announced net income of
$28.7 million for the second quarter 2023, compared to net income
of $24.2 million for the first quarter 2023 (the "prior
quarter") and $15.7 million for the second quarter 2022 (the
"year-ago quarter"). Net income (basic and diluted) was $0.94 per
share for the second quarter 2023, compared to $0.78 per share for
the prior quarter, and $0.49 per share for the year-ago quarter.
Net income for the year-ago quarter included one-time costs related
to the legal settlements associated with the previously disclosed
government investigations.
The $4.5 million increase in earnings from the
prior quarter was attributable to several items including income
from a Small Business Investment Company ("SBIC") investment, an
increase in swap fee income, lower noninterest expenses, a lower
provision for credit losses and a lower provision for unfunded
commitments. These improvements were partially offset by lower net
interest income as the cost of funding outpaced the increase in
yield on earning assets.
Second Quarter 2023
Highlights
-
The Company declared a quarterly dividend of $0.45 per share.
-
The Company repurchased 1,200,000 shares in the second quarter at
an average price of $24.48 per share.
-
Common equity and tangible common equity ratios at quarter-end were
11.05% and 10.21%1, respectively.
-
Nonperforming assets as a percent of assets was 0.28%. Net
charge-off for the quarter was $5.6 million, or
0.29%.
-
The provision for credit losses was $5.2 million for the quarter,
as compared to $6.2 million the prior quarter. The allowance for
credit losses as a percent of total loans was 1.00% down from 1.01%
a quarter ago.
-
Loans at quarter-end were $7.8 billion, up $29 million from the
prior quarter-end. This was the seventh consecutive quarterly
increase.
-
The funding mix changed as deposits at quarter-end were $7.7
billion, up $255 million from the prior quarter-end, and short-term
borrowings were $1.8 billion, down $277 million from the prior
quarter-end. The increase in deposits was primarily
from growth in brokered time deposits and the decrease in
borrowings was from repayment of Federal Home Loan Bank ("FHLB")
borrowings.
-
Total estimated uninsured deposits at June 30, 2023 were $2.3
billion, or 29.4% of deposits.
- The Company has implemented an expense
reduction plan. In the second quarter, two branches were closed
with an annual pre-tax cost savings in rental expense of $408
thousand. Early in the third quarter, the Company also implemented
a reduction-in-force that along with identified cost savings is
expected to generate cost savings of $2.4 million in the second
half of 2023 plus an additional reduction of $5.8 million in
2024.
(Dollars in thousands, except per share data) |
As of or for the Three Months Ended |
|
Percent Change |
|
June 30, |
|
March 31, |
|
June 30, |
|
Q2-23 |
|
Q2-23 |
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
vs. Q1-23 |
|
vs. Q2-22 |
Earnings and Per Share Data |
|
|
|
|
|
|
|
|
|
Net Income / (Loss) |
$28,692 |
|
|
$24,234 |
|
|
$15,696 |
|
|
18.4 |
% |
|
82.8 |
% |
Adjusted Net Income2 |
|
— |
|
|
|
— |
|
|
$38,570 |
|
|
— |
|
|
(25.6)% |
Earnings per share (diluted) |
$0.94 |
|
|
$0.78 |
|
|
$0.49 |
|
|
20.6 |
% |
|
91.9 |
% |
Adjusted earnings per share (diluted)2 |
|
— |
|
|
|
— |
|
|
$1.20 |
|
|
— |
|
|
(21.6)% |
Dividend per share |
$0.45 |
|
|
$0.45 |
|
|
$0.45 |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
Return ratios |
|
|
|
|
|
|
|
|
|
Return on average assets |
|
0.96 |
% |
|
|
0.86 |
% |
|
|
0.54 |
% |
|
— |
|
|
— |
|
Return on average common equity |
|
9.24 |
% |
|
|
7.92 |
% |
|
|
4.91 |
% |
|
— |
|
|
— |
|
Return on average tangible common equity2 |
|
10.08 |
% |
|
|
8.65 |
% |
|
|
5.35 |
% |
|
— |
|
|
— |
|
Net interest margin |
|
2.49 |
% |
|
|
2.77 |
% |
|
|
2.94 |
% |
|
— |
|
|
— |
|
Efficiency ratio2 |
|
47.2 |
% |
|
|
51.6 |
% |
|
|
66.6 |
% |
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet |
|
|
|
|
|
|
|
|
|
Assets |
$ |
11,035 |
|
|
$ |
11,089 |
|
|
$ |
10,942 |
|
|
(0.5)% |
|
0.9 |
% |
Loans |
$ |
7,767 |
|
|
$ |
7,738 |
|
|
$ |
7,155 |
|
|
0.4 |
% |
|
8.6 |
% |
Deposits |
$ |
7,718 |
|
|
$ |
7,463 |
|
|
$ |
9,172 |
|
|
3.4 |
% |
|
(15.8)% |
Borrowings |
$ |
1,907 |
|
|
$ |
2,184 |
|
|
$ |
350 |
|
|
(12.7)% |
|
445.2 |
% |
|
|
|
|
|
|
|
|
|
|
Book and Tangible Book |
|
|
|
|
|
|
|
|
|
Book value per share |
$ |
40.78 |
|
|
$ |
39.92 |
|
|
$ |
39.05 |
|
|
2.2 |
% |
|
4.4 |
% |
Tangible book per share2 |
$ |
37.29 |
|
|
$ |
36.57 |
|
|
$ |
35.80 |
|
|
2.0 |
% |
|
4.2 |
% |
|
|
|
|
|
|
|
|
|
|
Capital ratios |
|
|
|
|
|
|
|
|
|
Equity/assets |
|
11.05 |
% |
|
|
11.20 |
% |
|
|
11.45 |
% |
|
— |
|
|
— |
|
Tangible equity/assets |
|
10.21 |
% |
|
|
10.36 |
% |
|
|
10.60 |
% |
|
— |
|
|
— |
|
Total capital (to risk weighted assets) |
|
14.51 |
% |
|
|
14.74 |
% |
|
|
15.14 |
% |
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
Asset quality |
|
|
|
|
|
|
|
|
|
Allowance for credit losses to total loans |
|
1.00 |
% |
|
|
1.01 |
% |
|
|
1.02 |
% |
|
— |
|
|
— |
|
Nonperforming assets ("NPAs") to total assets |
|
0.28 |
% |
|
|
0.08 |
% |
|
|
0.19 |
% |
|
— |
|
|
— |
|
Net charge-off to average loans (annualized) |
|
0.29 |
% |
|
|
0.05 |
% |
|
(0.04)% |
|
— |
|
|
— |
|
CEO Commentary
Susan G. Riel, President and Chief Executive
Officer of Eagle Bancorp, Inc. commented, "While earnings
stabilized and were higher than the prior quarter, we remain
committed to improving results for our shareholders. During the
quarter, our deposits were up, borrowings decreased, and credit
metrics continue to remain strong. And, while rising rates
continued to put pressure on bank stocks, we used the opportunity
to repurchase shares at a historically low price relative to book
and tangible book values. Additionally, our regulatory capital
ratios remain strong."
"We are also mindful of continuing to remain a
highly efficient bank and in the first half of the year we took
action to save costs by closing three branches3 and ceasing the
origination of first lien residential mortgages as future prospects
for sufficient returns were low. Early in the third quarter, we
also made the difficult decision to implement a reduction-in-force
along with a strategic review of operating expenses."
"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."
Income Statement
- Net interest
income was $71.8 million for the second quarter 2023,
compared to $75.0 million for the prior quarter and
$82.9 million for the year-ago quarter. The decrease in net
interest income from the prior quarter was primarily driven by the
impact of higher interest rates paid on deposits and the full
impact of changes in the funding mix beginning late in the first
quarter of 2023. These changes included a higher level of
borrowings at rates higher than those of the deposits those
borrowings replaced, as well as a shift in noninterest bearing
deposit accounts to interest bearing deposit accounts. Although
higher interest rates benefited loan yields as variable rate loans
adjusted upward and new loans were added at current, higher rates,
the increase to interest income was less than the increase in
interest expense on average deposits and average borrowings.
- Net
interest margin ("NIM") was 2.49% for the second quarter
2023, compared to 2.77% for the prior quarter and 2.94% for the
year-ago quarter. The decrease in margin from the prior quarter was
28 basis points. The NIM contraction was based on the cost of funds
increasing by 58 basis points, partially offset by the yield on
earning assets increasing 27 basis points.
- The yield on the
loan portfolio was 6.64% for the second quarter 2023, compared to
6.35% for the prior quarter and 4.51% for the year-ago quarter. The
increase of 29 basis points from the prior quarter was from
variable rate loans adjusting upward and from higher rates on newly
originated loans.
- The yield on
interest earning assets, which is inclusive of the yields on loans
and securities, was 5.44% for the second quarter 2023 compared to
5.17% for the prior quarter and 3.39% for the year-ago quarter. The
increase of 27 basis points from the prior quarter was from
variable rate loans adjusting upward, higher rates on newly
originated loans, and higher rates on short-term investments.
- The cost of
funds was 3.20% for second quarter 2023, compared to 2.62% for the
prior quarter and 0.49% for the year-ago quarter.4 The increase of
58 basis points from the prior quarter was primarily due to the
impact of higher interest rates paid on deposits and the full
impact of changes late in the first quarter of 2023 that included a
higher level of borrowings at rates higher than those of the
deposits the borrowings replaced along with a continued shift in
noninterest bearing deposit accounts to interest bearing deposit
accounts.
-
Pre-provision net revenue ("PPNR"),5 a non-GAAP
measure, was $42.4 million, or 1.43% of average assets for the
second quarter 2023, up from $38.1 million and 1.35%, respectively.
This increase from the prior quarter in both PPNR and PPNR as a
percent of average assets was primarily attributable to the
combined impact of the higher noninterest income and lower
noninterest expense outpacing the decline in net interest
income.
(Dollars in thousands) |
Three Months Ended |
|
Percent Change |
|
June 30, |
|
March 31, |
|
June 30, |
|
Q2-23 |
|
Q2-23 |
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
vs. Q1-23 |
|
vs. Q2-22 |
Net interest income |
$ |
71,811 |
|
|
$ |
75,024 |
|
|
$ |
82,918 |
|
|
(4.3)% |
|
(13.4)% |
Noninterest income |
|
8,595 |
|
|
|
3,700 |
|
|
|
5,564 |
|
|
132.3 |
% |
|
54.5 |
% |
Noninterest expense |
|
(37,978 |
) |
|
|
(40,584 |
) |
|
|
(58,962 |
) |
|
(6.4)% |
|
(35.6)% |
PPNR (non-GAAP) |
$ |
42,428 |
|
|
$ |
38,140 |
|
|
$ |
29,520 |
|
|
11.2 |
% |
|
43.7 |
% |
|
|
|
|
|
|
|
|
|
|
Average Assets |
$ |
11,960,111 |
|
|
$ |
11,426,056 |
|
|
$ |
11,701,679 |
|
|
4.7 |
% |
|
2.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
As a Percent of Average Assets |
|
Basis Point Change |
Net interest income |
|
2.41 |
% |
|
|
2.66 |
% |
|
|
2.81 |
% |
|
(25) bps |
|
(40) bps |
Noninterest income |
|
0.29 |
% |
|
|
0.13 |
% |
|
|
0.19 |
% |
|
16 bps |
|
10 bps |
Noninterest expense |
(1.27)% |
|
(1.44)% |
|
(2.00)% |
|
17 bps |
|
73 bps |
PPNR to Average Assets (non-GAAP) |
|
1.43 |
% |
|
|
1.35 |
% |
|
|
1.00 |
% |
|
8 bps |
|
43 bps |
- Provision for credit losses
on loans was $5.2 million for the second quarter 2023,
compared to $6.2 million for the prior quarter and $0.5 million for
the year-ago quarter. The decrease in the second quarter 2023
provision over the prior quarter was primarily driven by a lower
quantitative formula reserve partially offset by a higher reserve
based on the qualitative and environmental ("Q&E") portion of
the credit model. The decrease in quantitative reserves was
primarily driven by improvements in local unemployment data. The
increase in Q&E modeling was driven by a higher allowance for
commercial real estate office properties partially offset by a
lower allowance for accommodations and food services.
- Noninterest income
was $8.6 million for the second quarter 2023, as compared to $3.7
million for the prior quarter and $5.6 million for the year-ago
quarter. The primary driver for the increase in the second quarter
2023 from the prior quarter were income of $2.8 million from an
SBIC fund and an increase in swap fee income of $959 thousand.
-
Noninterest expense was $38.0 million for the
second quarter 2023 compared to $40.6 million for the prior quarter
and $59.0 million for the year-ago quarter. Noninterest expense was
down $2.6 million from the prior quarter, primarily due to the
prior quarter including higher compensation and legal expenses and
was down $21.0 million from the year-ago quarter which included a
large non-recurring expense related to legal settlements associated
with the previously disclosed government investigations.
Notable changes from the prior quarter were as
follows:
- Salaries and
employee benefits were $22.0 million, down $2.2 million from the
prior quarter. The decrease was primarily due to a reduction in the
annual incentive bonus accrual and payroll taxes from the prior
quarter.
- Legal,
accounting and professional fees were $2.6 million, down $605
thousand from the prior quarter. The decrease was primarily due to
lower legal expenses.
- FDIC insurance
was $2.6 million, up $1.1 million from the prior quarter. The
increase was primarily from higher assessment fees in 2023.
- Other expenses
were $3.3 million, down $1.3 million from the prior quarter. The
decrease was primarily due to the prior quarter including
compensation to the Company's Executive Chairman.
During the second quarter 2023, the Georgetown
branch (DC) and Chantilly branch (VA) were closed as their leases
were expiring. Associated unamortized costs included in the second
quarter was $240 thousand. This reduced our branch count to
thirteen, and the annualized pre-tax cost savings in rental expense
starting in the third quarter of 2023 will be approximately $408
thousand.
-
Efficiency ratio6 was 47.2% for the second quarter
2023, compared to 51.6% for the prior quarter. The improvement in
the efficiency ratio this quarter was primarily driven by higher
noninterest income (as a result of income from an SBIC fund and
swap fee income) and lower noninterest expense, which more than
offset the reduction in net interest income.
- Effective income tax
rate for the second quarter 2023 was 22.2%, compared to
22.1% for the prior quarter.
Balance Sheet
- Total assets were
$11.0 billion at June 30, 2023, down 0.5% from a quarter ago
and up 0.9% from a year ago. The decrease in assets from a quarter
ago was primarily from lower balances in investment securities,
partially offset by limited growth in loans. Loans-to-deposits was
101% at June 30, 2023, down from 104% a quarter ago.
- Investment securities
Available-for-Sale ("AFS") had a balance of $1.5 billion
at June 30, 2023, down 2.9% from a quarter ago and down 12.5%
from a year ago. The decrease from the prior quarter-end was
primarily from principal paydowns, maturities received and lower
carrying values on AFS securities. No new investments were
purchased during the second quarter of 2023.
- Investment securities
Held-to-Maturity ("HTM") had a balance of $1.1 billion at
June 30, 2023, down 1.9% from a quarter ago and down 7.7% from
a year ago. The decrease from the prior quarter-end was primarily
from principal paydowns and maturities received. No new investments
were purchased during the second quarter of 2023. Investment
securities HTM had a fair value that was $132 million less than
carrying value at quarter-end, compared to a difference of $112
million a quarter ago.
- Total loans
(excluding loans held for sale) were $7.8 billion at June 30,
2023, up 0.4% from a quarter ago and up 8.6% from a year ago. The
increase in total loans from the prior quarter-end was driven by
growth in commercial real estate ("CRE") loans as period-end
balances for commercial & industrial loans and construction
loans for commercial and residential properties were down. At June
30, 2023, income-producing commercial real estate loans secured by
office properties other than owner-occupied properties ("CRE office
loans") were 12.6% of the total loan portfolio, and we did not have
any office construction loans (secured by offices outstanding). Our
CRE office loans are primarily located in the Washington DC market
with 24.1% in the District of Columbia, 33.0% in Washington's
Maryland suburbs, 34.9% in Northern Virginia, and 8.0% located
outside these markets.
(Dollars in thousands) |
June 30, 2023 |
|
March 31, 2023 |
|
June 30, 2022 |
|
Amount |
% |
|
Amount |
% |
|
Amount |
% |
Loan Balances - Period End: |
|
|
|
|
|
|
|
|
Commercial and Industrial |
$ |
1,431,284 |
18 |
% |
|
$ |
1,482,983 |
19 |
% |
|
$ |
1,394,835 |
20 |
% |
PPP loans |
|
649 |
— |
% |
|
|
709 |
— |
% |
|
|
8,977 |
— |
% |
Commercial real estate - income producing |
|
4,086,049 |
53 |
% |
|
|
3,970,903 |
51 |
% |
|
|
3,606,506 |
50 |
% |
Commercial real estate - owner occupied |
|
1,122,334 |
14 |
% |
|
|
1,095,699 |
14 |
% |
|
|
1,080,249 |
15 |
% |
1-4 Family mortgage |
|
76,596 |
1 |
% |
|
|
73,677 |
1 |
% |
|
|
72,793 |
1 |
% |
Construction - commercial and residential |
|
862,869 |
11 |
% |
|
|
948,877 |
13 |
% |
|
|
804,170 |
11 |
% |
Construction - C&I (owner occupied) |
|
132,843 |
2 |
% |
|
|
109,013 |
1 |
% |
|
|
129,717 |
2 |
% |
Home equity |
|
53,934 |
1 |
% |
|
|
53,829 |
1 |
% |
|
|
53,193 |
1 |
% |
Other consumer |
|
161 |
— |
% |
|
|
1,986 |
— |
% |
|
|
4,246 |
— |
% |
Total loans |
$ |
7,766,719 |
100 |
% |
|
$ |
7,737,676 |
100 |
% |
|
$ |
7,154,686 |
100 |
% |
-
Allowance for credit losses was 1.00% of total
loans at June 30, 2023, compared to 1.01% a quarter ago, and
1.02% a year ago. See commentary above in section "Provision for
Credit Losses on Loans." Net charge-off was $5.6 million for the
quarter, which as a percent of average loans (excluding loans held
for sale)7 was 0.29% for the second quarter 2023, compared to 0.05%
a quarter ago, and net recovery of 0.04% the year-ago quarter.
Charge-offs for the second quarter 2023 were primarily from two
office properties outside of the District of Columbia.
-
Nonperforming loans and assets were $29.2 million
and $30.7 million, respectively, at June 30, 2023.
- Nonperforming
loans ("NPLs") as a percent of loans were 0.38% at June 30,
2023, compared to 0.09% a quarter ago and 0.26% a year ago. The
increase from a quarter ago was primarily from one commercial
office note in Northern Virginia, of which a portion was charged
off during the second quarter of 2023.
- Nonperforming
assets ("NPAs") as a percent of assets were 0.28% at June 30,
2023, compared to 0.08% a quarter ago and 0.19% 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 $41.4 million at June 30, 2023, up from $15.7
million a quarter ago and $3.9 million a year ago. The increase
from the prior quarter was primarily from one multi-family credit
for $39.5 million.
(Dollars in thousands) |
Three Months Ended or As Of |
|
June 30, |
|
March 31, |
|
June 30, |
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
Asset Quality: |
|
|
|
|
|
Net charge-off (recovery) |
$ |
5,598 |
|
$ |
975 |
|
$ |
(674 |
) |
Nonperforming loans |
$ |
29,170 |
|
$ |
6,756 |
|
$ |
18,842 |
|
Other real estate owned |
$ |
1,487 |
|
$ |
1,962 |
|
$ |
1,487 |
|
Nonperforming assets |
$ |
30,657 |
|
$ |
8,718 |
|
$ |
20,329 |
|
- Total
deposits were $7.7 billion at June 30, 2023, up 3.4%
from a quarter ago and down 15.8% from a year ago. The increase
from the prior quarter-end was primarily attributable to an
increase in brokered time deposits. For the quarter, average
noninterest bearing deposits to average total deposits was 30.1%
for the second quarter 2023, down from 37.4% a quarter ago and down
from 37.9% for the year-ago quarter. The percentage decrease in the
second quarter 2023 reflected a lower level of noninterest bearing
deposits and a higher level of brokered time deposits. Total
estimated uninsured deposits at June 30, 2023 were $2.3
billion8, or 29.4% of deposits.
- Other
short-term borrowings were $1.8 billion at June 30,
2023, down from $2.1 billion a quarter ago, and up from $280
million a year ago. The decrease in borrowings of $277 million from
a quarter ago was primarily driven by the increase in deposits
which were used to pay down borrowings. During the quarter, FHLB
borrowings decreased by $777 million, while Bank Term Funding
Program ("BTFP") borrowings increased by $500 million.
- BTFP borrowings
were $1.3 billion at June 30, 2023 with a rate of 4.53% for a
term of up to one year from the date the proceeds were
borrowed.
- FHLB borrowings
were $537 million at June 30, 2023 with a floating rate, at an
average rate of 5.34% for terms that are either overnight or less
than three months.
Borrowings from the BTFP are secured by U.S.
Treasuries, agency debt and mortgage-backed securities as
collateral, and borrowings from the FHLB are secured by collateral
consisting of qualifying loans in the Bank's commercial mortgage,
residential mortgage and home equity loan portfolios as well as
qualifying securities.
The BTFP provides a source of liquidity in
addition to sources available from the FHLB and others. The Company
drew advances from the BTFP to optimize its funding mix taking into
account collateral terms and interest rates at the time the program
was accessed. As of June 30, 2023, the Company had aggregate
undrawn borrowing capacity of $1.84 billion, which includes $1.57
billion in additional aggregate capacity to borrow with the FHLB
and BTFP on assets that have been pledged and unencumbered
securities totaling approximately $0.27 billion available for
pledging to the FHLB or BTFP.
- Total
shareholders’ equity was $1.2 billion at June 30,
2023, down 1.8% from a quarter ago, and down 2.6% from a year ago.
The decrease in shareholders' equity of $22.2 million from the
prior quarter-end was primarily from share repurchases, dividends
declared and lower valuations of AFS securities, partially offset
by net income. Values for book and tangible book were up as share
repurchases, at prices below book and tangible book values, reduced
the number of shares outstanding in each of the past two quarters.
- Book value per
share was $40.78, up $0.86 from a quarter ago, and up $1.73 from a
year ago.
- Tangible book
value per share9 was $37.29, up $0.72 from a quarter ago, and up
$1.49 from a year ago.
-
Dividends: On June 29, 2023, the Board of
Directors declared a quarterly cash dividend of $0.45 per share
payable on July 28, 2023 to shareholders of record on
July 20, 2023.
- Stock
Repurchases: During the quarter, the Company repurchased
1,200,000 shares at an average price of $24.48 per share (including
commissions), totaling an aggregate of $29.4 million.
- 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 |
|
June 30, |
|
March 31, |
|
June 30, |
|
Capital |
|
202310 |
|
2023 |
|
2022 |
|
Requirements |
Regulatory Capital Ratios |
|
|
|
|
|
|
|
Total Capital (to risk weighted assets) |
14.51 |
% |
|
14.74 |
% |
|
15.14 |
% |
|
10.50 |
% |
Tier 1 Capital (to risk weighted assets) |
13.55 |
% |
|
13.75 |
% |
|
14.06 |
% |
|
8.50 |
% |
Common Equity Tier 1 (to risk weighted assets) |
13.55 |
% |
|
13.75 |
% |
|
14.06 |
% |
|
7.00 |
% |
Tier 1 Capital (to average assets) |
10.84 |
% |
|
11.42 |
% |
|
10.68 |
% |
|
4.00 |
% |
|
|
|
|
|
|
|
|
Common Capital Ratios |
|
|
|
|
|
|
|
Common Equity Ratio |
11.05 |
% |
|
11.20 |
% |
|
11.45 |
% |
|
— |
|
Tangible Common Equity Ratio8 |
10.21 |
% |
|
10.36 |
% |
|
10.60 |
% |
|
— |
|
Additional financial
information: The financial information that follows
provides more detail on the Company’s financial performance for the
three months ended June 30, 2023 as compared to the three
months ended March 31, 2023 and June 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 second quarter 2023
financial results on Thursday, July 27, 2023 at 10:00 a.m.
eastern time. The public is invited to listen to this call by
registering at the link
https://register.vevent.com/register/BI30f9a7927bd6415a9f57cd5c54b5bf55
or by accessing the call on the Company’s website,
www.EagleBankCorp.com. A replay of the conference call will be
available on the Company’s website through August 10,
2023.
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 ongoing challenges and
uncertainties relating to the continued evolution of COVID-19,
including its impact on our credit quality, asset and loan growth
and broader business operations; 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 Company completes its second 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 A reconciliation between this non-GAAP
financial measure and the nearest GAAP measure is provided in the
tables that accompany this document. Adjusted net income and
adjusted earnings per share (diluted) for the year ago quarter are
compared to GAAP net income and earnings per share for the second
quarter of 2023.3 Branches closed were Alexandria, VA (March 2023),
Georgetown, DC (May 2023) and Chantilly, VA (May 2023).4 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 14.5 A
reconciliation between this non-GAAP financial measure and the
nearest GAAP measure is provided in the table below. 6 A
reconciliation between this non-GAAP financial measure and the
nearest GAAP measure is provided in the tables that accompany this
document.7 Net charge-offs as a percent of average loans (excluding
loans held for sale) are shown on an annualized basis.8 Estimated
amount of uninsured deposits to be reported on line RCON5597 of
schedule RC-O in EagleBank's June 30, 2023 Call Report.9 A
reconciliation of non-GAAP financial measures to the nearest GAAP
measure is provided in the tables that accompany this document.10
Capital ratios for June 30, 2023 are subject to final filings
with the Federal Reserve.
GAAP Reconciliation (unaudited) |
(dollars in thousands, except per share data) |
|
|
|
|
|
|
|
June 30, |
|
March 31, |
|
June 30, |
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
Tangible equity and assets |
|
|
|
|
|
Common shareholders' equity |
$ |
1,219,766 |
|
|
$ |
1,241,958 |
|
|
$ |
1,252,720 |
|
Less: Intangible assets |
|
(104,220 |
) |
|
|
(104,226 |
) |
|
|
(104,257 |
) |
Tangible common equity |
$ |
1,115,546 |
|
|
$ |
1,137,732 |
|
|
$ |
1,148,463 |
|
|
|
|
|
|
|
Book value per common share |
$ |
40.78 |
|
|
$ |
39.92 |
|
|
$ |
39.05 |
|
Less: Intangible book value per common share |
|
(3.49 |
) |
|
|
(3.35 |
) |
|
|
(3.25 |
) |
Tangible book value per common share |
$ |
37.29 |
|
|
$ |
36.57 |
|
|
$ |
35.80 |
|
|
|
|
|
|
|
Shares outstanding period end |
|
29,912,082 |
|
|
|
31,111,647 |
|
|
|
32,081,241 |
|
|
|
|
|
|
|
Total assets |
$ |
11,034,741 |
|
|
$ |
11,088,867 |
|
|
$ |
10,941,655 |
|
Less: Intangible assets |
|
(104,220 |
) |
|
|
(104,226 |
) |
|
|
(104,257 |
) |
Tangible assets |
$ |
10,930,521 |
|
|
$ |
10,984,641 |
|
|
$ |
10,837,398 |
|
|
|
|
|
|
|
Tangible common equity ratio |
|
10.21 |
% |
|
|
10.36 |
% |
|
|
10.60 |
% |
|
|
|
|
|
|
|
Three Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
Average tangible common equity |
|
|
|
|
|
Average common shareholders' equity |
$ |
1,245,647 |
|
|
$ |
1,240,978 |
|
|
$ |
1,281,742 |
|
Less: Average intangible assets |
|
(104,224 |
) |
|
|
(104,231 |
) |
|
|
(104,246 |
) |
Average tangible common equity |
$ |
1,141,423 |
|
|
$ |
1,136,747 |
|
|
$ |
1,177,496 |
|
|
|
|
|
|
|
Return on Average Tangible Common Equity |
|
10.08 |
% |
|
|
8.65 |
% |
|
|
5.35 |
% |
|
|
|
|
|
|
Adjusted Efficiency |
|
|
|
|
|
Net interest income |
$ |
71,811 |
|
|
$ |
75,024 |
|
|
$ |
82,918 |
|
Noninterest income |
|
8,595 |
|
|
|
3,700 |
|
|
|
5,564 |
|
Operating revenue |
$ |
80,406 |
|
|
$ |
78,724 |
|
|
$ |
88,482 |
|
|
|
|
|
|
|
Noninterest expense |
$ |
37,978 |
|
|
$ |
40,584 |
|
|
$ |
58,962 |
|
Less: Penalty, disgorgement and prejudgment interest |
|
— |
|
|
|
— |
|
|
|
22,874 |
|
Adjusted noninterest expense |
$ |
37,978 |
|
|
$ |
40,584 |
|
|
$ |
36,088 |
|
|
|
|
|
|
|
Efficiency ratio |
|
47.2 |
% |
|
|
51.6 |
% |
|
|
66.6 |
% |
Adjusted efficiency ratio |
|
47.2 |
% |
|
|
51.6 |
% |
|
|
40.8 |
% |
GAAP Reconciliation (unaudited) |
(dollars in thousands, except per share data) |
|
|
|
|
|
|
|
Three Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
|
|
2023 |
|
|
2023 |
|
|
2022 |
Adjusted Net Income |
|
|
|
|
|
Net Income |
$ |
28,692 |
|
$ |
24,234 |
|
$ |
15,696 |
|
|
|
|
|
|
Income before income tax expense |
$ |
36,872 |
|
$ |
31,128 |
|
$ |
28,472 |
Reversal: Penalty, disgorgement & prejudgment interest |
|
— |
|
|
— |
|
|
22,874 |
Adjusted income before income tax expense |
|
36,872 |
|
|
31,128 |
|
|
51,346 |
Income tax expense(1) |
|
8,180 |
|
|
6,894 |
|
|
12,776 |
Adjusted net income |
$ |
28,692 |
|
$ |
24,234 |
|
$ |
38,570 |
|
|
|
|
|
|
Adjusted Earnings Per Share |
|
|
|
|
|
Earnings per share (diluted) |
$ |
0.94 |
|
$ |
0.78 |
|
$ |
0.49 |
Reversal: Penalty, disgorgement and prejudgment interest |
|
— |
|
|
— |
|
|
0.71 |
Adjusted earnings per share (diluted) |
$ |
0.94 |
|
$ |
0.78 |
|
$ |
1.20 |
|
|
|
|
|
|
Weighted average common shares outstanding, diluted |
|
30,505,468 |
|
|
31,180,346 |
|
|
32,142,427 |
(1) For the three months ended June 30, 2023, the
effective tax rate for the quarter was applied to the adjustment.
For the three months ended June 30, 2022, the adjustment was
non-taxable with no impact of the effective tax rate.
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 provides reconciliation 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.
Adjusted net income is a non-GAAP financial measure
calculated by reversing the penalty, disgorgement and prejudgment
interest (2nd quarter 2022) to net income. The Company considers
this information important to shareholders because it illustrates
net income excluding the impact of non-recurring items. The above
table provides reconciliation of these financial measures defined
by GAAP to non-GAAP financial measures.
Adjusted earnings per share is a non-GAAP
financial measure calculated by dividing the penalty, disgorgement
and prejudgment interest (2nd quarter 2022) by weighted average
common shares outstanding (diluted) then adding the result to
earnings per share. The Company considers this information
important to shareholders because it illustrates earnings on a per
share basis excluding the impact of non-recurring items. The above
table provides reconciliation of these financial measures defined
by GAAP to non-GAAP financial measures.
Pre-provision net revenue 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 PPNR and PPNR to
Average Assets to the nearest GAAP measure.
Eagle Bancorp, Inc. |
Consolidated Balance Sheets (Unaudited) |
(Dollars in thousands, except per share data) |
|
June 30, |
|
March 31, |
|
June 30, |
Assets |
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
Cash and due from banks |
$ |
9,865 |
|
|
$ |
9,940 |
|
|
$ |
13,132 |
|
Federal funds sold |
|
3,981 |
|
|
|
3,746 |
|
|
|
42,697 |
|
Interest-bearing deposits with banks and other short-term
investments |
|
174,072 |
|
|
|
159,078 |
|
|
|
369,337 |
|
Investment securities available-for-sale at fair value (amortized
cost of $1,732,722, $1,763,371, and $1,897,985, net of allowance
for credit losses of $17, $31 and $18 as of June 30, 2023,
March 31, 2023 and June 30, 2022, respectively) |
|
1,535,589 |
|
|
|
1,582,185 |
|
|
|
1,755,254 |
|
Investment securities held-to-maturity at amortized cost, net of
allowance for credit losses of $2,010, $2,008 and $826 (fair value
of $923,313, $965,786 and $1,084,706, as of June 30, 2023,
March 31, 2023 and June 30, 2022, respectively) |
|
1,055,181 |
|
|
|
1,075,303 |
|
|
|
1,143,632 |
|
Federal Reserve and Federal Home Loan Bank stock |
|
46,199 |
|
|
|
79,134 |
|
|
|
33,990 |
|
Loans held for sale |
|
— |
|
|
|
6,488 |
|
|
|
13,814 |
|
Loans |
|
7,766,719 |
|
|
|
7,737,676 |
|
|
|
7,154,686 |
|
Less allowance for credit losses |
|
(78,029 |
) |
|
|
(78,377 |
) |
|
|
(72,665 |
) |
Loans, net |
|
7,688,690 |
|
|
|
7,659,299 |
|
|
|
7,082,021 |
|
Premises and equipment, net |
|
11,979 |
|
|
|
12,929 |
|
|
|
13,643 |
|
Operating lease right-of-use assets |
|
21,580 |
|
|
|
23,060 |
|
|
|
27,548 |
|
Deferred income taxes |
|
92,574 |
|
|
|
89,117 |
|
|
|
92,167 |
|
Bank-owned life insurance |
|
111,565 |
|
|
|
111,217 |
|
|
|
110,047 |
|
Goodwill and intangible assets, net |
|
104,220 |
|
|
|
104,226 |
|
|
|
104,257 |
|
Other real estate owned |
|
1,487 |
|
|
|
1,962 |
|
|
|
1,487 |
|
Other assets |
|
177,759 |
|
|
|
171,183 |
|
|
|
138,629 |
|
Total assets |
$ |
11,034,741 |
|
|
$ |
11,088,867 |
|
|
$ |
10,941,655 |
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
Deposits: |
|
|
|
|
|
Noninterest bearing demand |
$ |
2,010,353 |
|
|
$ |
2,247,706 |
|
|
$ |
2,831,934 |
|
Interest bearing transaction |
|
930,308 |
|
|
|
907,637 |
|
|
|
985,431 |
|
Savings and money market |
|
2,791,040 |
|
|
|
2,970,093 |
|
|
|
4,741,180 |
|
Time deposits |
|
1,986,426 |
|
|
|
1,337,805 |
|
|
|
613,073 |
|
Total deposits |
|
7,718,127 |
|
|
|
7,463,241 |
|
|
|
9,171,618 |
|
Customer repurchase agreements |
|
37,017 |
|
|
|
37,854 |
|
|
|
26,539 |
|
Other short-term borrowings |
|
1,836,759 |
|
|
|
2,113,801 |
|
|
|
280,000 |
|
Long-term borrowings |
|
69,856 |
|
|
|
69,825 |
|
|
|
69,732 |
|
Operating lease liabilities |
|
26,007 |
|
|
|
27,634 |
|
|
|
32,414 |
|
Reserve for unfunded commitments |
|
7,023 |
|
|
|
6,704 |
|
|
|
4,921 |
|
Other liabilities |
|
120,186 |
|
|
|
127,850 |
|
|
|
103,711 |
|
Total liabilities |
|
9,814,975 |
|
|
|
9,846,909 |
|
|
|
9,688,935 |
|
Shareholders' Equity |
|
|
|
|
|
Common stock, par value $.01 per share; shares authorized
100,000,000, shares issued and outstanding 29,912,082, 31,111,647,
and 32,081,241 respectively |
|
296 |
|
|
|
308 |
|
|
|
318 |
|
Additional paid in capital |
|
370,278 |
|
|
|
397,012 |
|
|
|
440,418 |
|
Retained earnings |
|
1,040,779 |
|
|
|
1,025,552 |
|
|
|
964,353 |
|
Accumulated other comprehensive loss |
|
(191,587 |
) |
|
|
(180,914 |
) |
|
|
(152,369 |
) |
Total Shareholders' Equity |
|
1,219,766 |
|
|
|
1,241,958 |
|
|
|
1,252,720 |
|
Total Liabilities and Shareholders' Equity |
$ |
11,034,741 |
|
|
$ |
11,088,867 |
|
|
$ |
10,941,655 |
|
Eagle Bancorp, Inc. |
Consolidated Statements of Income (Unaudited) |
(Dollars in thousands, except per share data) |
|
Three Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
|
|
2023 |
|
|
2023 |
|
|
|
2022 |
|
Interest Income |
|
|
|
|
|
Interest and fees on loans |
$ |
128,993 |
|
$ |
120,850 |
|
|
$ |
80,142 |
|
Interest and dividends on investment securities |
|
14,241 |
|
|
13,545 |
|
|
|
12,997 |
|
Interest on balances with other banks and short-term invest. |
|
13,229 |
|
|
5,774 |
|
|
|
2,451 |
|
Interest on federal funds sold |
|
47 |
|
|
78 |
|
|
|
45 |
|
Total interest income |
|
156,510 |
|
|
140,247 |
|
|
|
95,635 |
|
|
|
|
|
|
|
Interest Expense |
|
|
|
|
|
Interest on deposits |
|
59,422 |
|
|
48,954 |
|
|
|
11,538 |
|
Interest on customer repurchase agreements |
|
333 |
|
|
302 |
|
|
|
22 |
|
Interest on other short-term borrowings |
|
23,907 |
|
|
14,930 |
|
|
|
120 |
|
Interest on long-term borrowings |
|
1,037 |
|
|
1,037 |
|
|
|
1,037 |
|
Total interest expense |
|
84,699 |
|
|
65,223 |
|
|
|
12,717 |
|
Net Interest Income |
|
71,811 |
|
|
75,024 |
|
|
|
82,918 |
|
Provision for Credit Losses |
|
5,238 |
|
|
6,164 |
|
|
|
495 |
|
Provision for Unfunded Commitments |
|
318 |
|
|
848 |
|
|
|
553 |
|
Net Interest Income After Provision For Credit
Losses |
|
66,255 |
|
|
68,012 |
|
|
|
81,870 |
|
|
|
|
|
|
|
Noninterest Income |
|
|
|
|
|
Service charges on deposits |
|
1,626 |
|
|
1,510 |
|
|
|
1,345 |
|
Gain on sale of loans |
|
95 |
|
|
305 |
|
|
|
855 |
|
Net gain (loss) on sale of investment securities |
|
2 |
|
|
(21 |
) |
|
|
(151 |
) |
Increase in cash surrender value of bank-owned life
insurance |
|
648 |
|
|
655 |
|
|
|
632 |
|
Other income |
|
6,224 |
|
|
1,251 |
|
|
|
2,883 |
|
Total noninterest income |
|
8,595 |
|
|
3,700 |
|
|
|
5,564 |
|
|
|
|
|
|
|
Noninterest Expense |
|
|
|
|
|
Salaries and employee benefits |
|
21,957 |
|
|
24,174 |
|
|
|
21,805 |
|
Premises and equipment expenses |
|
3,227 |
|
|
3,317 |
|
|
|
3,523 |
|
Marketing and advertising |
|
884 |
|
|
636 |
|
|
|
1,186 |
|
Data processing |
|
3,354 |
|
|
3,099 |
|
|
|
2,729 |
|
Legal, accounting and professional fees |
|
2,649 |
|
|
3,254 |
|
|
|
2,137 |
|
FDIC insurance |
|
2,581 |
|
|
1,486 |
|
|
|
906 |
|
Other expenses |
|
3,326 |
|
|
4,618 |
|
|
|
26,676 |
|
Total noninterest expense |
|
37,978 |
|
|
40,584 |
|
|
|
58,962 |
|
Income Before Income Tax Expense |
|
36,872 |
|
|
31,128 |
|
|
|
28,472 |
|
Income Tax Expense |
|
8,180 |
|
|
6,894 |
|
|
|
12,776 |
|
Net Income |
$ |
28,692 |
|
$ |
24,234 |
|
|
$ |
15,696 |
|
|
|
|
|
|
|
Earnings Per Common Share |
|
|
|
|
|
Basic |
$ |
0.94 |
|
$ |
0.78 |
|
|
$ |
0.49 |
|
Diluted |
$ |
0.94 |
|
$ |
0.78 |
|
|
$ |
0.49 |
|
Eagle Bancorp, Inc. |
Consolidated Average Balances, Interest Yields And Rates
vs. Prior Quarter (Unaudited) |
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
June 30, 2023 |
|
March 31, 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 |
$ |
1,053,961 |
|
$ |
13,229 |
|
5.03 |
% |
|
$ |
526,506 |
|
$ |
5,774 |
|
4.45 |
% |
Loans held for sale(1) |
|
813 |
|
|
13 |
|
6.40 |
% |
|
|
4,093 |
|
|
60 |
|
5.86 |
% |
Loans(1) (2) |
|
7,790,555 |
|
|
128,980 |
|
6.64 |
% |
|
|
7,712,023 |
|
|
120,790 |
|
6.35 |
% |
Investment securities available-for-sale(2) |
|
1,626,330 |
|
|
8,526 |
|
2.10 |
% |
|
|
1,660,258 |
|
|
7,811 |
|
1.91 |
% |
Investment securities held-to-maturity(2) |
|
1,068,755 |
|
|
5,715 |
|
2.14 |
% |
|
|
1,087,047 |
|
|
5,734 |
|
2.14 |
% |
Federal funds sold |
|
5,636 |
|
|
47 |
|
3.34 |
% |
|
|
14,890 |
|
|
78 |
|
2.12 |
% |
Total interest earning assets |
|
11,546,050 |
|
$ |
156,510 |
|
5.44 |
% |
|
|
11,004,817 |
|
$ |
140,247 |
|
5.17 |
% |
Total noninterest earning assets |
|
492,426 |
|
|
|
|
|
|
495,889 |
|
|
|
|
Less: allowance for credit losses |
|
78,365 |
|
|
|
|
|
|
74,650 |
|
|
|
|
Total noninterest earning assets |
|
414,061 |
|
|
|
|
|
|
421,239 |
|
|
|
|
TOTAL ASSETS |
$ |
11,960,111 |
|
|
|
|
|
$ |
11,426,056 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
Interest bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Interest bearing transaction |
$ |
1,312,710 |
|
$ |
10,640 |
|
3.25 |
% |
|
$ |
1,065,421 |
|
$ |
6,107 |
|
2.32 |
% |
Savings and money market |
|
2,967,678 |
|
|
30,861 |
|
4.17 |
% |
|
|
3,326,807 |
|
|
33,274 |
|
4.06 |
% |
Time deposits |
|
1,675,690 |
|
|
17,921 |
|
4.29 |
% |
|
|
1,078,227 |
|
|
9,573 |
|
3.60 |
% |
Total interest bearing deposits |
|
5,956,078 |
|
|
59,422 |
|
4.00 |
% |
|
|
5,470,455 |
|
|
48,954 |
|
3.63 |
% |
Customer repurchase agreements |
|
41,105 |
|
|
333 |
|
3.25 |
% |
|
|
38,257 |
|
|
302 |
|
3.20 |
% |
Other short-term borrowings |
|
1,991,557 |
|
|
23,907 |
|
4.80 |
% |
|
|
1,251,392 |
|
|
14,930 |
|
4.77 |
% |
Long-term borrowings |
|
69,845 |
|
|
1,037 |
|
5.94 |
% |
|
|
69,814 |
|
|
1,037 |
|
5.94 |
% |
Total interest bearing liabilities |
|
8,058,585 |
|
$ |
84,699 |
|
4.22 |
% |
|
|
6,829,918 |
|
$ |
65,223 |
|
3.87 |
% |
Noninterest bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Noninterest bearing demand |
|
2,558,860 |
|
|
|
|
|
|
3,263,670 |
|
|
|
|
Other liabilities |
|
97,019 |
|
|
|
|
|
|
91,490 |
|
|
|
|
Total noninterest bearing liabilities |
|
2,655,879 |
|
|
|
|
|
|
3,355,160 |
|
|
|
|
Shareholders’ equity |
|
1,245,647 |
|
|
|
|
|
|
1,240,978 |
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ |
11,960,111 |
|
|
|
|
|
$ |
11,426,056 |
|
|
|
|
Net interest income |
|
|
$ |
71,811 |
|
|
|
|
|
$ |
75,024 |
|
|
Net interest spread |
|
|
|
|
1.22 |
% |
|
|
|
|
|
1.30 |
% |
Net interest margin |
|
|
|
|
2.49 |
% |
|
|
|
|
|
2.77 |
% |
Cost of funds(3) |
|
|
|
|
3.20 |
% |
|
|
|
|
|
2.62 |
% |
(1) Loans placed on nonaccrual status are included
in average balances. Net loan fees and late charges included in
interest income on loans totaled $4.2 million and
$3.7 million for the three months ended June 30, 2023 and
March 31, 2023, 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. Under the current methodology, the cost of funds for fourth
quarter 2022 was 1.74% and for third quarter 2022 was 1.09%.
Eagle Bancorp, Inc. |
Consolidated Average Balances, Interest Yields And Rates
vs. Year Ago Quarter (Unaudited) |
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 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 |
$ |
1,053,961 |
|
$ |
13,229 |
|
5.03 |
% |
|
$ |
1,193,253 |
|
$ |
2,451 |
|
0.82 |
% |
Loans held for sale(1) |
|
813 |
|
|
13 |
|
6.40 |
% |
|
|
16,342 |
|
|
179 |
|
4.38 |
% |
Loans(1) (2) |
|
7,790,555 |
|
|
128,980 |
|
6.64 |
% |
|
|
7,104,727 |
|
|
79,963 |
|
4.51 |
% |
Investment securities available-for-sale(2) |
|
1,626,330 |
|
|
8,526 |
|
2.10 |
% |
|
|
1,793,047 |
|
|
7,022 |
|
1.57 |
% |
Investment securities held-to-maturity(2) |
|
1,068,755 |
|
|
5,715 |
|
2.14 |
% |
|
|
1,157,308 |
|
|
5,975 |
|
2.07 |
% |
Federal funds sold |
|
5,636 |
|
|
47 |
|
3.34 |
% |
|
|
35,590 |
|
|
45 |
|
0.51 |
% |
Total interest earning assets |
|
11,546,050 |
|
$ |
156,510 |
|
5.44 |
% |
|
|
11,300,267 |
|
$ |
95,635 |
|
3.39 |
% |
Total noninterest earning assets |
|
492,426 |
|
|
|
|
|
|
474,336 |
|
|
|
|
Less: allowance for credit losses |
|
78,365 |
|
|
|
|
|
|
72,924 |
|
|
|
|
Total noninterest earning assets |
|
414,061 |
|
|
|
|
|
|
401,412 |
|
|
|
|
TOTAL ASSETS |
$ |
11,960,111 |
|
|
|
|
|
$ |
11,701,679 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
Interest bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Interest bearing transaction |
$ |
1,312,710 |
|
$ |
10,640 |
|
3.25 |
% |
|
$ |
856,388 |
|
$ |
630 |
|
0.30 |
% |
Savings and money market |
|
2,967,678 |
|
|
30,861 |
|
4.17 |
% |
|
|
4,810,047 |
|
|
8,772 |
|
0.73 |
% |
Time deposits |
|
1,675,690 |
|
|
17,921 |
|
4.29 |
% |
|
|
657,220 |
|
|
2,136 |
|
1.30 |
% |
Total interest bearing deposits |
|
5,956,078 |
|
|
59,422 |
|
4.00 |
% |
|
|
6,323,655 |
|
|
11,538 |
|
0.73 |
% |
Customer repurchase agreements |
|
41,105 |
|
|
333 |
|
3.25 |
% |
|
|
25,112 |
|
|
22 |
|
0.35 |
% |
Other short-term borrowings |
|
1,991,557 |
|
|
23,907 |
|
4.80 |
% |
|
|
57,750 |
|
|
120 |
|
0.83 |
% |
Long-term borrowings |
|
69,845 |
|
|
1,037 |
|
5.94 |
% |
|
|
69,721 |
|
|
1,037 |
|
5.95 |
% |
Total interest bearing liabilities |
|
8,058,585 |
|
$ |
84,699 |
|
4.22 |
% |
|
|
6,476,238 |
|
$ |
12,717 |
|
0.79 |
% |
Noninterest bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Noninterest bearing demand |
|
2,558,860 |
|
|
|
|
|
|
3,861,231 |
|
|
|
|
Other liabilities |
|
97,019 |
|
|
|
|
|
|
82,468 |
|
|
|
|
Total noninterest bearing liabilities |
|
2,655,879 |
|
|
|
|
|
|
3,943,699 |
|
|
|
|
Shareholders’ equity |
|
1,245,647 |
|
|
|
|
|
|
1,281,742 |
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ |
11,960,111 |
|
|
|
|
|
$ |
11,701,679 |
|
|
|
|
Net interest income |
|
|
$ |
71,811 |
|
|
|
|
|
$ |
82,918 |
|
|
Net interest spread |
|
|
|
|
1.22 |
% |
|
|
|
|
|
2.60 |
% |
Net interest margin |
|
|
|
|
2.49 |
% |
|
|
|
|
|
2.94 |
% |
Cost of funds(3) |
|
|
|
|
3.20 |
% |
|
|
|
|
|
0.49 |
% |
(1) Loans placed on nonaccrual status are included
in average balances. Net loan fees and late charges included in
interest income on loans totaled $4.2 million and
$4.3 million for the three months ended June 30, 2023 and
June 30, 2022, respectively.(2) Interest and fees on loans and
investments exclude tax equivalent adjustments.(3) Beginning in the
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 |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
Income Statements: |
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
Total interest income |
$ |
156,510 |
|
|
$ |
140,247 |
|
|
$ |
129,130 |
|
|
$ |
111,527 |
|
|
$ |
95,635 |
|
|
$ |
88,321 |
|
|
$ |
86,230 |
|
|
$ |
89,152 |
|
Total interest expense |
|
84,699 |
|
|
|
65,223 |
|
|
|
43,530 |
|
|
|
27,630 |
|
|
|
12,717 |
|
|
|
7,869 |
|
|
|
8,044 |
|
|
|
10,107 |
|
Net interest income |
|
71,811 |
|
|
|
75,024 |
|
|
|
85,600 |
|
|
|
83,897 |
|
|
|
82,918 |
|
|
|
80,452 |
|
|
|
78,186 |
|
|
|
79,045 |
|
Provision for (reversal of) credit losses |
|
5,238 |
|
|
|
6,164 |
|
|
|
(464 |
) |
|
|
3,022 |
|
|
|
495 |
|
|
|
(2,787 |
) |
|
|
(6,412 |
) |
|
|
(8,203 |
) |
Provision for (reversal of) unfunded commitments |
|
318 |
|
|
|
848 |
|
|
|
161 |
|
|
|
774 |
|
|
|
553 |
|
|
|
(11 |
) |
|
|
(632 |
) |
|
|
716 |
|
Net interest income after provision for credit losses |
|
66,255 |
|
|
|
68,012 |
|
|
|
85,903 |
|
|
|
80,101 |
|
|
|
81,870 |
|
|
|
83,250 |
|
|
|
85,230 |
|
|
|
86,532 |
|
Noninterest income before investment gain (loss) |
|
8,593 |
|
|
|
3,721 |
|
|
|
5,326 |
|
|
|
5,304 |
|
|
|
5,715 |
|
|
|
7,478 |
|
|
|
9,668 |
|
|
|
6,780 |
|
Net gain (loss) on sale of investment securities |
|
2 |
|
|
|
(21 |
) |
|
|
3 |
|
|
|
4 |
|
|
|
(151 |
) |
|
|
(25 |
) |
|
|
906 |
|
|
|
1,519 |
|
Total noninterest income |
|
8,595 |
|
|
|
3,700 |
|
|
|
5,329 |
|
|
|
5,308 |
|
|
|
5,564 |
|
|
|
7,453 |
|
|
|
10,574 |
|
|
|
8,299 |
|
Salaries and employee benefits |
|
21,957 |
|
|
|
24,174 |
|
|
|
23,691 |
|
|
|
21,538 |
|
|
|
21,805 |
|
|
|
17,019 |
|
|
|
24,608 |
|
|
|
22,145 |
|
Premises and equipment |
|
3,227 |
|
|
|
3,317 |
|
|
|
3,292 |
|
|
|
3,275 |
|
|
|
3,523 |
|
|
|
3,128 |
|
|
|
3,755 |
|
|
|
3,859 |
|
Marketing and advertising |
|
884 |
|
|
|
636 |
|
|
|
1,290 |
|
|
|
1,181 |
|
|
|
1,186 |
|
|
|
1,064 |
|
|
|
1,286 |
|
|
|
1,013 |
|
Other expenses |
|
11,910 |
|
|
|
12,457 |
|
|
|
10,645 |
|
|
|
10,212 |
|
|
|
32,448 |
|
|
|
9,801 |
|
|
|
9,660 |
|
|
|
9,358 |
|
Total noninterest expense |
|
37,978 |
|
|
|
40,584 |
|
|
|
38,918 |
|
|
|
36,206 |
|
|
|
58,962 |
|
|
|
31,012 |
|
|
|
39,309 |
|
|
|
36,375 |
|
Income before income tax expense |
|
36,872 |
|
|
|
31,128 |
|
|
|
52,314 |
|
|
|
49,203 |
|
|
|
28,472 |
|
|
|
59,691 |
|
|
|
56,495 |
|
|
|
58,456 |
|
Income tax expense |
|
8,180 |
|
|
|
6,894 |
|
|
|
10,121 |
|
|
|
11,906 |
|
|
|
12,776 |
|
|
|
13,947 |
|
|
|
14,875 |
|
|
|
14,847 |
|
Net income |
$ |
28,692 |
|
|
$ |
24,234 |
|
|
$ |
42,193 |
|
|
$ |
37,297 |
|
|
$ |
15,696 |
|
|
$ |
45,744 |
|
|
$ |
41,620 |
|
|
$ |
43,609 |
|
Per Share Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per weighted average common share, basic |
$ |
0.94 |
|
|
$ |
0.78 |
|
|
$ |
1.32 |
|
|
$ |
1.16 |
|
|
$ |
0.49 |
|
|
$ |
1.43 |
|
|
$ |
1.30 |
|
|
$ |
1.36 |
|
Earnings per weighted average common share, diluted |
$ |
0.94 |
|
|
$ |
0.78 |
|
|
$ |
1.32 |
|
|
$ |
1.16 |
|
|
$ |
0.49 |
|
|
$ |
1.42 |
|
|
$ |
1.30 |
|
|
$ |
1.36 |
|
Weighted average common shares outstanding, basic |
|
30,454,766 |
|
|
|
31,109,267 |
|
|
|
31,819,631 |
|
|
|
32,084,464 |
|
|
|
32,080,657 |
|
|
|
32,033,280 |
|
|
|
31,950,320 |
|
|
|
31,959,357 |
|
Weighted average common shares outstanding, diluted |
|
30,505,468 |
|
|
|
31,180,346 |
|
|
|
31,898,619 |
|
|
|
32,155,678 |
|
|
|
32,142,427 |
|
|
|
32,110,099 |
|
|
|
32,030,998 |
|
|
|
32,030,527 |
|
Actual shares outstanding at period end |
|
29,912,082 |
|
|
|
31,111,647 |
|
|
|
31,346,903 |
|
|
|
32,082,321 |
|
|
|
32,081,241 |
|
|
|
32,079,474 |
|
|
|
31,950,092 |
|
|
|
31,947,458 |
|
Book value per common share at period end |
$ |
40.78 |
|
|
$ |
39.92 |
|
|
$ |
39.18 |
|
|
$ |
38.02 |
|
|
$ |
39.05 |
|
|
$ |
39.89 |
|
|
$ |
42.28 |
|
|
$ |
41.68 |
|
Tangible book value per common share at period
end(1) |
$ |
37.29 |
|
|
$ |
36.57 |
|
|
$ |
35.86 |
|
|
$ |
34.77 |
|
|
$ |
35.80 |
|
|
$ |
36.64 |
|
|
$ |
38.97 |
|
|
$ |
38.39 |
|
Dividend per common share |
$ |
0.45 |
|
|
$ |
0.45 |
|
|
$ |
0.45 |
|
|
$ |
0.45 |
|
|
$ |
0.45 |
|
|
$ |
0.40 |
|
|
$ |
0.40 |
|
|
$ |
0.40 |
|
Performance Ratios (annualized): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets |
|
0.96 |
% |
|
|
0.86 |
% |
|
|
1.49 |
% |
|
|
1.29 |
% |
|
|
0.54 |
% |
|
|
1.46 |
% |
|
|
1.32 |
% |
|
|
1.46 |
% |
Return on average common equity |
|
9.24 |
% |
|
|
7.92 |
% |
|
|
13.57 |
% |
|
|
11.64 |
% |
|
|
4.91 |
% |
|
|
13.83 |
% |
|
|
12.30 |
% |
|
|
13.00 |
% |
Return on average tangible common equity(1) |
|
10.08 |
% |
|
|
8.65 |
% |
|
|
14.82 |
% |
|
|
12.67 |
% |
|
|
5.35 |
% |
|
|
14.99 |
% |
|
|
13.35 |
% |
|
|
14.11 |
% |
Net interest margin |
|
2.49 |
% |
|
|
2.77 |
% |
|
|
3.14 |
% |
|
|
3.02 |
% |
|
|
2.94 |
% |
|
|
2.65 |
% |
|
|
2.55 |
% |
|
|
2.73 |
% |
Efficiency ratio(2) |
|
47.2 |
% |
|
|
51.6 |
% |
|
|
42.8 |
% |
|
|
40.6 |
% |
|
|
66.6 |
% |
|
|
35.3 |
% |
|
|
44.3 |
% |
|
|
41.7 |
% |
Other Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit losses to total loans(3) |
|
1.00 |
% |
|
|
1.01 |
% |
|
|
0.97 |
% |
|
|
1.04 |
% |
|
|
1.02 |
% |
|
|
1.01 |
% |
|
|
1.06 |
% |
|
|
1.21 |
% |
Allowance for credit losses to total nonperforming loans |
|
268 |
% |
|
|
1,160 |
% |
|
|
1,151 |
% |
|
|
997 |
% |
|
|
386 |
% |
|
|
301 |
% |
|
|
257 |
% |
|
|
265 |
% |
Nonperforming loans to total loans(3) |
|
0.38 |
% |
|
|
0.09 |
% |
|
|
0.08 |
% |
|
|
0.10 |
% |
|
|
0.26 |
% |
|
|
0.33 |
% |
|
|
0.41 |
% |
|
|
0.46 |
% |
Nonperforming assets to total assets |
|
0.28 |
% |
|
|
0.08 |
% |
|
|
0.08 |
% |
|
|
0.09 |
% |
|
|
0.19 |
% |
|
|
0.23 |
% |
|
|
0.26 |
% |
|
|
0.31 |
% |
Net charge-off (recovery)(annualized) to average total
loans(3) |
|
0.29 |
% |
|
|
0.05 |
% |
|
|
0.05 |
% |
|
|
— |
% |
|
(0.04) % |
|
|
0.03 |
% |
|
|
0.07 |
% |
|
|
0.08 |
% |
Tier 1 capital (to average assets) |
|
10.84 |
% |
|
|
11.42 |
% |
|
|
11.63 |
% |
|
|
11.55 |
% |
|
|
10.68 |
% |
|
|
9.82 |
% |
|
|
10.19 |
% |
|
|
10.58 |
% |
Total capital (to risk weighted assets) |
|
14.51 |
% |
|
|
14.74 |
% |
|
|
14.94 |
% |
|
|
15.60 |
% |
|
|
15.14 |
% |
|
|
15.21 |
% |
|
|
15.74 |
% |
|
|
16.18 |
% |
Common equity tier 1 capital (to risk weighted assets) |
|
13.55 |
% |
|
|
13.75 |
% |
|
|
14.03 |
% |
|
|
14.64 |
% |
|
|
14.06 |
% |
|
|
14.12 |
% |
|
|
14.63 |
% |
|
|
14.95 |
% |
Tangible common equity ratio(1) |
|
10.21 |
% |
|
|
10.36 |
% |
|
|
10.18 |
% |
|
|
10.52 |
% |
|
|
10.60 |
% |
|
|
10.57 |
% |
|
|
10.60 |
% |
|
|
10.68 |
% |
Average Balances (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
$ |
11,960,111 |
|
|
$ |
11,426,056 |
|
|
$ |
11,255,956 |
|
|
$ |
11,431,110 |
|
|
$ |
11,701,679 |
|
|
$ |
12,701,152 |
|
|
$ |
12,538,596 |
|
|
$ |
11,826,326 |
|
Total earning assets |
$ |
11,546,050 |
|
|
$ |
11,004,817 |
|
|
$ |
10,829,703 |
|
|
$ |
11,030,670 |
|
|
$ |
11,300,267 |
|
|
$ |
12,326,473 |
|
|
$ |
12,180,872 |
|
|
$ |
11,486,280 |
|
Total loans(3) |
$ |
7,790,555 |
|
|
$ |
7,712,023 |
|
|
$ |
7,379,198 |
|
|
$ |
7,282,589 |
|
|
$ |
7,104,727 |
|
|
$ |
7,053,701 |
|
|
$ |
6,890,414 |
|
|
$ |
7,055,621 |
|
Total deposits |
$ |
8,514,938 |
|
|
$ |
8,734,125 |
|
|
$ |
9,524,139 |
|
|
$ |
9,907,497 |
|
|
$ |
10,184,886 |
|
|
$ |
10,874,976 |
|
|
$ |
10,670,206 |
|
|
$ |
9,948,114 |
|
Total borrowings |
$ |
2,102,507 |
|
|
$ |
1,359,463 |
|
|
$ |
411,060 |
|
|
$ |
158,001 |
|
|
$ |
152,583 |
|
|
$ |
371,987 |
|
|
$ |
402,393 |
|
|
$ |
448,697 |
|
Total shareholders’ equity |
$ |
1,245,647 |
|
|
$ |
1,240,978 |
|
|
$ |
1,233,705 |
|
|
$ |
1,271,753 |
|
|
$ |
1,281,742 |
|
|
$ |
1,341,785 |
|
|
$ |
1,342,525 |
|
|
$ |
1,331,022 |
|
(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 |
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