Executive Summary

Q4 2024 GAAP diluted EPS was $0.50 on net income of $15.3M; operating revenue (net interest income + noninterest income) was $74.9M as NIM fell 8 bps q/q to 2.29% on higher average interest-bearing deposits at the Fed .
Deposits rose $590M q/q to $9.1B (76.4% insured), enabling full early repayment of $1.0B BTFP borrowings and lowering other short-term borrowings to $0.5B; on-balance sheet liquidity and available capacity remained robust at $4.6B .
Asset quality deteriorated as NPAs/Assets rose to 1.90% (from 1.22%) driven by moving a $74.9M office CRE loan to nonaccrual; net charge-offs increased to $9.5M (0.48% annualized), while ACL coverage rose to 1.44% of loans .
2025 guidance updated: NIM raised to 2.50–2.75% (from 2.40–2.60%), average deposits growth to 2–5% (from 1–4%), and noninterest expense growth to 3–5% (from 2–4%); management sees spread benefits from reinvesting ~$386M of investment cash flows into loans .
Cash dividend declared at $0.165 per share; potential stock catalysts include deposit mix improvements, visible NIM uplift, and continued de-risking of office CRE exposures .

What Went Well and What Went Wrong

What Went Well

Strong funding repositioning: Deposit growth of $590.2M enabled full early repayment of $1B BTFP and reduced other short-term borrowings to $0.5B; insured deposits rose to 76.4% .
Capital strength maintained: CET1 increased to 14.63% and tangible common equity ratio to 11.02%; book value per share held flat q/q at $40.60 .
Strategic progress on C&I and deposit initiatives: “We strengthened our C&I team… Fourth quarter deposit growth of $590.2 million allowed us to fully repay $1 billion in BTFP,” said CEO Susan Riel .

What Went Wrong

Asset quality headwinds: NPAs/Assets climbed to 1.90% on a $74.9M office loan migrating to nonaccrual; NCOs rose to $9.5M (0.48% annualized) .
Margin and revenue pressure: NIM declined to 2.29% and net interest income dipped $1.0M q/q; noninterest income fell $2.9M with lower swap fees .
Office CRE valuation risk: A new appraisal showed a 44% value decline vs May 2022; management took a $9M charge-off and moved the loan to nonaccrual despite ongoing contractual payments .

Financial Results

Metric	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Operating Revenue ($USD Millions)	$75.9	$76.7	$78.8	$74.9
Net Interest Income ($USD Millions)	$73.0	$71.4	$71.8	$70.8
Noninterest Income ($USD Millions)	$2.9	$5.3	$7.0	$4.1
Diluted EPS ($USD)	$0.67	$(2.78)	$0.72	$0.50
Net Interest Margin (%)	2.45%	2.40%	2.37%	2.29%
Efficiency Ratio (%)	48.9%	191.0% (impairment)	55.4%	59.5%

Note: Q2 2024 GAAP results include a $104.2M goodwill impairment; operating comparisons exclude this one-time charge where indicated .

Segment (Loan Mix) Breakdown (% of Total Loans)

Category	Q2 2024	Q3 2024	Q4 2024
Commercial	15%	14%	15%
Income Producing CRE	53%	52%	51%
Owner Occupied CRE	16%	16%	16%
Construction (Comm & Res)	13%	15%	15%
Resi Mortgage	1%	1%	1%
C&I Construction (OO)	1%	1%	1%
Home Equity	1%	1%	1%
Other Consumer	~0%	~0%	~0%

KPIs and Balance Sheet

KPI	Q2 2024	Q3 2024	Q4 2024
Deposits (Period End, $USD Billions)	$8.27	$8.54	$9.13
Insured Deposits (% of Deposits)	72.5%	74.5%	76.4%
Other Short-term Borrowings ($USD Billions)	$1.66	$1.24	$0.49
Liquidity + Capacity ($USD Billions)	$4.0	$4.6	$4.6
ACL / Loans (%)	1.33%	1.40%	1.44%
Nonperforming Loans ($USD Millions)	$98.2	$134.4	$208.7
NPAs / Assets (%)	0.88%	1.22%	1.90%
Net Charge-offs (Annualized, %)	0.11%	0.26%	0.48%
CET1 (%)	13.92%	14.54%	14.63%
TCE Ratio (%)	10.35%	10.86%	11.02%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Interest Margin	FY 2025	2.40%–2.60%	2.50%–2.75%	Raised
Average Deposits Growth	FY 2025	1%–4%	2%–5%	Raised
Average Loans Growth	FY 2025	Flat	Flat	Maintained
Average Earning Assets	FY 2025	Flat	Flat	Maintained
Noninterest Income Growth	FY 2025	3%–6%	Flat	Lowered
Noninterest Expense Growth	FY 2025	2%–4%	3%–5%	Raised
Period Effective Tax Rate	FY 2025	21%–23%	21%–23%	Maintained

Drivers: ~$386M investment cash flows expected to be reinvested at higher loan yields; deposit mix optimization and reduced wholesale funding anticipated to benefit spread .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024)	Previous Mentions (Q3 2024)	Current Period (Q4 2024)	Trend
Office CRE valuation risk	NPAs rose to 0.88%; performing office ACL 4.05%	NPAs 1.22% with mixed-use land and assisted living inflows; performing office ACL 4.55%	$74.9M office loan to nonaccrual; 44% appraisal decline vs May 2022; $9M charge-off; NPAs/Assets 1.90%	Elevated but managed; specific reserves driving ACL
Deposits and insured mix	Deposits down q/q to $8.27B; insured 72.5%	Deposits up to $8.54B; insured 74.5%	Deposits up to $9.13B; insured 76.4%; digital channel contributing	Improving
Wholesale funding and BTFP	Borrowings $1.66B	Borrowings $1.24B, paid down FHLB	Fully repaid $1.0B BTFP; other short-term borrowings $0.5B	De-risking
NIM and spread outlook	NIM 2.40% with funding cost pressure	NIM 2.37%	NIM 2.29%; guidance raised to 2.50–2.75% for 2025; reinvest cash flows to loans	Near-term pressure, medium-term uplift
C&I expansion	Strategic deposit diversification; Expat Banking Services	Senior debt raised; TCE >10%	New C&I leadership (Evelyn Lee); increased activity reported	Positive
Regulatory/politics (GSA)	—	—	Minimal GSA exposure; potential gov’t leasing demand shift	Neutral

Management Commentary

CEO Susan Riel: “Last year was a transformative one… We strengthened our C&I team… Fourth quarter deposit growth of $590.2 million allowed us to fully repay $1 billion of Bank Term Funding Program debt… challenges remain… valuation risk in our office portfolio continues to be a key concern” .
CFO Eric Newell: “We successfully utilized excess liquidity and deposit growth to fully repay the $1 billion of Bank Term Funding Program debt… expect further benefits to funding costs in the first half of 2025” .
Chief Credit Officer Janice Williams: “The new appraisal showed a 44% decline in value since May 2022… we took a charge-off of $9 million… The borrower is cash flowing and continues to be current on payments” .
EVP Kevin Geoghegan: “Any future reserve increases will stem from specific reserves for individually assessed loans… ACL coverage to loans at 1.44%” .

Q&A Highlights

Office CRE downgrade details: management surprised by 11% discount rate used in suburban Class A appraisal; sees improving leasing pace and reduced concessions (TI allowances down from ~$180/ft to ~$95/ft) supporting cautious optimism .
Federal/GSA exposure: minimal direct GSA exposure; potential privatization of federal occupancy could increase leasing demand in certain B+/A– properties over time .
Competitive landscape: local merger may create opportunities; EGBN mobilized to deepen shared customer relationships and acquire talent .
Reserves/credit cost outlook: office overlay (qualitative) seen adequate; planning for 2025 credit costs in a 25–50 bps range with specific reserves driving changes .
Balance sheet/NIM strategy: target bond portfolio into “teens” % of assets; ~$385–386M cash flows expected to move into loans, supporting spread expansion; average earning assets guide flat .

Estimates Context

Wall Street consensus (S&P Global) for Q4 2024 was unavailable at time of analysis due to SPGI rate limits; as a result, beat/miss vs estimates cannot be assessed here. We attempted to retrieve EPS and revenue consensus but were blocked by the provider’s daily limit [GetEstimates error].

Key Takeaways for Investors

Funding mix improved materially: deposit inflows and full early BTFP repayment reduce funding costs and interest rate sensitivity into H1 2025; watch deposit growth/insured mix sustainability .
Margin trajectory: near-term NIM pressure from asset mix, but 2025 guide raised; reinvestment of ~$386M securities cash flows into higher-yielding loans is a tangible spread lever .
Credit normalization path: office CRE remains the swing factor; specific reserves (not overlay builds) should drive ACL; monitor criticized/classified migration and additional reappraisals .
Asset quality watchpoints: NPAs/Assets at 1.90% and NCOs at 0.48% annualized—expect volatility tied to office maturities/appraisals; management is sweeping cash flow and securing extensions/curtailments .
Capital support: CET1 14.63% and TCE 11.02% provide buffer to navigate valuation risk and support growth; dividend sustained at $0.165 .
Strategic growth: C&I buildout and digital deposits are gaining traction; CRE concentration reduction expected via multifamily payoffs in early 2025 .
Trading implications: stock likely sensitive to incremental office valuation news, demonstrated NIM uplift, and further funding cost declines; monitor quarterly updates on deposit mix, reinvestment pacing, and credit costs .

EAGLE BANCORP INC (EGBN)·Q4 2024 Earnings Summary