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EB

EAGLE BANCORP INC (EGBN)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 EPS was $0.06 on net income of $1.7M, down from $0.50 in Q4 2024, driven by a $26.3M provision for credit losses, lower net interest income, and slightly higher noninterest expense .
  • Deposits grew $146.2M QoQ (+1.6%), C&I loans increased $109.1M (+4.3%), liquidity stood at $4.8B, and insured deposits were ~75%—supporting funding stability even as NIM edged down 1bp to 2.28% .
  • Guidance: NIM range reduced to 2.40–2.65% (from 2.50–2.75%); noninterest income growth raised to 35–40% (from flat), and effective tax rate lowered to 15–17% (from 21–23%)—primarily reflecting the $200M separate account BOLI and expected purchase tax credit impacts .
  • Catalyst watch: management may consider proactive office loan dispositions (loan sales/A/B structures) to reduce nonaccrual/substandard balances; treasury pricing changes, investment portfolio cash-flow reinvestment, and C&I-led relationship deposits are the near-term NIM levers .

What Went Well and What Went Wrong

What Went Well

  • Deposits and C&I momentum: period-end deposits +$146.2M QoQ; C&I portfolio +$109.1M QoQ—“tangible results from our strategic focus,” per CEO Susan Riel .
  • Noninterest income uplift: $8.2M vs $4.1M in Q4, driven by a $200M separate account BOLI; management updated 2025 outlook to 35–40% growth in noninterest income .
  • Capital/liquidity robust: CET1 14.61%, TCE/TA ~11%, liquidity and available capacity $4.8B; insured deposits ~75% with stable funding base .

Quote: “We remain focused on executing our strategy… and positioning the Company to return to sustained profitability” — Susan Riel .

What Went Wrong

  • Credit costs: provision for credit losses rose to $26.3M (vs $12.1M in Q4), with qualitative overlay increases on office and net charge-offs of $11.2M; loans 30–89 days past due rose to $83.0M .
  • Asset quality mix: substandard loans +$75.2M to $501.6M; special mention +$28.6M to $273.4M, reflecting office pressure amid DC market uncertainty .
  • Margin pressure and earnings: NIM declined to 2.28% (2.29% prior); EPS fell to $0.06 (from $0.50), driven by higher provision and lower NII .

Financial Results

Income Statement and EPS

MetricQ3 2024Q4 2024Q1 2025
Net Interest Income ($MM)$71.8 $70.8 $65.6
Provision for Credit Losses ($MM)$10.1 $12.1 $26.3
Noninterest Income ($MM)$7.0 $4.1 $8.2
Noninterest Expense ($MM)$43.6 $44.5 $45.5
Net Income ($MM)$21.8 $15.3 $1.7
Diluted EPS ($)$0.72 $0.50 $0.06

Key Ratios and Operating Metrics

MetricQ3 2024Q4 2024Q1 2025
Net Interest Margin (%)2.37 2.29 2.28
Efficiency Ratio (%)55.40 59.50 61.50
Return on Avg Assets (%)0.70 0.48 0.06
ROATCE (%)7.22 4.94 0.55
CET1 (%)14.30 14.63 14.61
TCE / TA (%)10.86 11.02 11.00
NPAs / Assets (%)1.22 1.90 1.79

Loan and Deposit Snapshot

CategoryQ1 2024 ($000)Q4 2024 ($000)Q1 2025 ($000)
Total Loans7,982,702 7,934,888 7,943,306
Income Producing CRE4,040,655 4,064,846 3,967,124
Owner-Occupied CRE1,185,582 1,269,669 1,403,668
C&I1,408,767 1,183,341 1,178,343
Construction (Comm/Res)1,082,556 1,210,763 1,210,788
Total Deposits8,501,439 9,131,078 9,277,268
Insured Deposits (% of total)74.7% (Q1 2025) 76.4% (Q4 2024) —

Asset Quality Details

MetricQ3 2024Q4 2024Q1 2025
Allowance for Credit Losses / Loans (%)1.40 1.44 1.63
Nonperforming Assets ($MM)$137.1$211.5 $202.9
Net Charge-offs ($MM)$5.3 $9.5 $11.2
Performing Office Coverage (%)4.55 3.81 5.78

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Interest MarginFY 20252.50%–2.75% 2.40%–2.65% Lowered
Noninterest Income GrowthFY 2025Flat 35–40% Raised
Effective Tax RateFY 202521–23% 15–17% Lowered
Noninterest Expense GrowthFY 20253–5% 3–5% Maintained
Average DepositsFY 2025+1–4% +1–4% Maintained
Average LoansFY 2025Flat Flat Maintained
Average Earning AssetsFY 2025Flat Flat Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 and Q4 2024)Current Period (Q1 2025)Trend
Office CRE valuation/reservesPerforming office ACL coverage 4.55%; office maturities cadence and appraisal-driven nonaccruals disclosed Overlay increase drove $13.9–$14.3M ACL uplift; performing office ACL coverage 5.78% Tightening reserves; caution persists
Liquidity/insured depositsLiquidity ~$4.6B; insured deposits ~76% in Q4 Liquidity $4.8B; insured ~74.7%; CFO highlights stable funding base Strong and improving
NIM trajectory/funding costsNIM down to 2.37% (Q3) and 2.29% (Q4); digital deposit costs discussed NIM 2.28%; pricing change on payment processing; investment cash flows to higher yields; relationship deposits to lower CoF Near-term stabilization; modest uplift expected
Noninterest income strategySwap fees volatility in Q4 BOLI drives outlook raise to 35–40% growth; treasury mgmt building Structural uplift
GovCon exposureMinimal prior disclosureModest ~$250M outstanding; some credits to special mention; DOJ/budget uncertainties monitored Watchful
Capital allocation/dividendDividend recalibrated prior year; CET1 >14.5% Dividend $0.165 declared; reassessing capital deployment vs forward earnings Balanced
Asset dispositionsNot emphasizedConsidering loan sales/A/B structures to reduce criticized assets More proactive stance

Management Commentary

  • “We updated our assumptions… for loans secured by office properties… which drove an increase in the qualitative overlay” — Kevin Geoghegan .
  • “Forecasted higher NIM for the remainder of the year is driven by lower funding costs… lower average borrowings and higher yields on earning assets” — Eric Newell .
  • “We will explore asset disposition strategies for office loans… This may result in higher near-term credit costs, but is aligned with our objective of reducing nonaccrual, criticized and classified loans” — Susan Riel .

Q&A Highlights

  • Office reserve methodology: annual reassessment of PD/LGD; ~18% ACL carried on substandard performing office loans; valuation assumptions reflect appraisals .
  • Margin drivers: payment processing pricing cuts, ~$300M securities cash flows redeployed, relationship deposit growth; forecast neutral to Fed rate path near term .
  • Deposit costs: scope to reduce as relationship deposits grow; digital channel reduces wholesale reliance and broadens customer base in DMV .
  • Asset resolution toolkit: loan sales, A/B structures on the table to reduce nonaccruals/substandards, case-by-case cost-benefit .
  • GovCon: modest exposure; some migration to special mention linked to contract cancellations and USAID-related pressures; active RM engagement .

Estimates Context

MetricQ3 2024Q4 2024Q1 2025
EPS Consensus Mean ($)0.44*0.49*0.53*
EPS Actual ($)0.72*0.50*0.06*
Revenue Consensus Mean ($)73.69M*74.67M*71.93M*
Revenue Actual ($)70.29M*64.33M*47.90M*
  • Q1 2025: EPS miss vs consensus (0.06 vs 0.53); revenue below consensus per S&P Global’s revenue definition (47.9M vs 71.9M). Q4 2024: slight EPS beat (0.50 vs 0.49). Q3 2024: EPS beat (0.72 vs 0.44) [GetEstimates].
  • Note: Eagle’s “operating revenue” (NII + noninterest income) was $73.9M in Q1 2025, which aligns more closely to typical bank revenue constructs and consensus ranges .
    Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Credit normalization in office will be the primary swing factor; reserve build and willingness to pursue dispositions suggest a path to de-risk albeit with potential near-term credit costs .
  • NIM outlook reset lower, but identified levers (pricing changes, reinvestment of ~$296M 2025 investment cash flows, C&I-driven deposits) should help stabilize margins into 2H 2025 .
  • Noninterest income trajectory has structurally improved (BOLI + treasury management), reducing earnings reliance on spread income in the near term .
  • Funding base is resilient (insured ~75%, liquidity $4.8B) and supports balance sheet flexibility as management reallocates capital and evaluates shareholder returns vs franchise accretion .
  • Watch asset quality metrics—past dues and criticized loans—as leading indicators for provisioning cadence; CFO flagged remediation of ~$22M past-due by end of April .
  • Tactical portfolio shifts (decline in income producing office CRE; rise in owner-occupied CRE) reflect risk posture and could aid overall credit profile over time .
  • Relationship wins (EB5 Capital $100M facility; SolaREIT syndication) reinforce the bank’s commercial franchise in the DMV and energy-adjacent niches .

Additional Q1 2025 Press Releases

  • EB5 Capital secured a $100M credit facility with EagleBank, doubling its prior line—supporting sponsors and deal execution .
  • SolaREIT expanded a revolver to $60M with AUB and EagleBank as syndicate participant—illustrating Eagle’s role in clean energy financing .

KPIs Table (Funding, Capital, Asset Quality)

KPIQ4 2024Q1 2025
Total Deposits ($MM)$9,131.1 $9,277.3
Insured Deposits (% of total)76.4% 74.7%
Liquidity + Borrowing Capacity ($MM)~$4,600 ~$4,800
CET1 (%)14.63 14.61
TCE / TA (%)11.02 11.00
ACL / Loans (%)1.44 1.63
NPAs / Assets (%)1.90 1.79
NIM (%)2.29 2.28
Dividend per share ($)$0.165 (declared Jan 22) $0.165 (declared Apr 23)

Segment/Portfolio Highlights

  • Income Producing CRE office balances fell YoY; performing office ACL coverage increased to 5.78%; office maturities mostly beyond YE25 .
  • Multifamily portfolio strong with zero nonaccruals; limited criticized exposure .
  • Construction portfolio largely pass-rated; adverse risk ratings remain contained .

Disclosures and Cross-References

  • Q1 earnings press release and detailed financials, dividend declaration, and performance metrics are per Form 8-K and exhibits .
  • Earnings call transcript provides qualitative context on reserves, margin drivers, and capital deployment –.
  • Prior quarters’ releases and decks support trend analysis (Q4 2024 press release; Q3 2024 8-K deck) – –.