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Eagle Bancorp(EGBN) - 2025 Q2 - Quarterly Report

markdown [PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements of Eagle Bancorp, Inc. for the periods ended June 30, 2025, and December 31, 2024, including balance sheets, statements of operations, comprehensive income, changes in shareholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, specific financial instrument details, and other relevant disclosures [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202025%20and%20December%2031%2C%202024%20(unaudited)) Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :----------------------------------- | :------------ | :---------------- | :--------- | :--------- | | Total Assets | $10,601,331 | $11,129,508 | $(528,177) | -4.75% | | Cash and due from banks | $14,005 | $11,882 | $2,123 | 17.87% | | Interest-bearing deposits with banks and other short-term investments | $239,237 | $619,017 | $(379,780) | -61.35% | | Loans held for investment, net of allowance | $7,537,868 | $7,820,498 | $(282,630) | -3.61% | | Total Liabilities | $9,416,264 | $9,903,447 | $(487,183) | -4.92% | | Total Deposits | $9,119,607 | $9,131,078 | $(11,471) | -0.13% | | Total Shareholders' Equity | $1,185,067 | $1,226,061 | $(40,994) | -3.34% | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) Consolidated Statements of Operations (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :----------------------------------- | :----------- | :----------- | :--------- | :--------- | | Total interest income | $151,443 | $169,731 | $(18,288) | -10.77% | | Total interest expense | $83,667 | $98,378 | $(14,711) | -14.95% | | Net Interest Income | $67,776 | $71,353 | $(3,577) | -5.01% | | Provision for Credit Losses | $138,159 | $8,959 | $129,200 | 1442.13% | | Total noninterest income | $6,414 | $5,332 | $1,082 | 20.29% | | Total noninterest expense | $43,470 | $146,491 | $(103,021) | -70.32% | | Net Income (Loss) | $(69,775) | $(83,802) | $14,027 | -16.74% | | Basic Earnings (Loss) Per Common Share | $(2.30) | $(2.78) | $0.48 | -17.27% | Consolidated Statements of Operations (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :----------------------------------- | :----------- | :----------- | :--------- | :--------- | | Total interest income | $305,321 | $345,333 | $(40,012) | -11.59% | | Total interest expense | $171,896 | $199,282 | $(27,386) | -13.74% | | Net Interest Income | $133,425 | $146,051 | $(12,626) | -8.64% | | Provision for Credit Losses | $164,414 | $44,134 | $120,280 | 272.53% | | Total noninterest income | $14,621 | $8,921 | $5,700 | 63.90% | | Total noninterest expense | $88,921 | $186,488 | $(97,567) | -52.32% | | Net Income (Loss) | $(68,100) | $(84,140) | $16,040 | -19.06% | | Basic Earnings (Loss) Per Common Share | $(2.25) | $(2.79) | $0.54 | -19.35% | [Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) Consolidated Statements of Comprehensive Income (Loss) (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :----------------------------------- | :----------- | :----------- | :--------- | :--------- | | Net Income (Loss) | $(69,775) | $(83,802) | $14,027 | -16.74% | | Other comprehensive income (loss) | $12,574 | $4,925 | $7,649 | 155.32% | | Comprehensive Income (Loss) | $(57,201) | $(78,877) | $21,676 | -27.48% | Consolidated Statements of Comprehensive Income (Loss) (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :----------------------------------- | :----------- | :----------- | :--------- | :--------- | | Net Income (Loss) | $(68,100) | $(84,140) | $16,040 | -19.06% | | Other comprehensive income (loss) | $33,108 | $1,514 | $31,594 | 2086.79% | | Comprehensive Income (Loss) | $(34,992) | $(82,626) | $47,634 | -57.65% | [Consolidated Statements of Changes in Shareholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) Consolidated Statements of Changes in Shareholders' Equity (Six Months Ended June 30, in thousands) | Metric | As of June 30, 2025 | As of January 1, 2025 | Change ($) | Change (%) | | :----------------------------------- | :-------------------- | :-------------------- | :--------- | :--------- | | Total Shareholders' Equity | $1,185,067 | $1,226,061 | $(40,994) | -3.34% | | Net Income (Loss) | $(68,100) | N/A | N/A | N/A | | Other comprehensive income, net of tax | $33,108 | N/A | N/A | N/A | | Stock-based compensation expense | $3,797 | N/A | N/A | N/A | | Cash dividends declared | $(9,999) | N/A | N/A | N/A | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) Consolidated Statements of Cash Flows (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :----------------------------------- | :----------- | :----------- | :--------- | :--------- | | Net cash provided by operating activities | $14,564 | $58,093 | $(43,529) | -74.93% | | Net cash (used in) provided by investing activities | $80,274 | $30,944 | $49,330 | 159.42% | | Net cash provided by (used in) financing activities | $(470,985) | $(268,888) | $(202,097) | 75.17% | | Net Increase (Decrease) in Cash and Cash Equivalents | $(376,147) | $(179,851) | $(196,296) | 109.15% | | Cash and Cash Equivalents at End of Period | $257,333 | $542,833 | $(285,500) | -52.59% | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [Note 1 – Summary of Significant Accounting Policies](index=9&type=section&id=Note%201%20%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies) - The company conducts full-service community banking primarily in Northern Virginia, Suburban Maryland, and Washington, D.C., offering real estate, commercial, consumer lending, and traditional deposit services[26](index=26&type=chunk) - Investment securities are classified as available-for-sale (AFS) or held-to-maturity (HTM) based on management's intent and ability to hold them. AFS securities are carried at fair value, while HTM are at amortized cost[31](index=31&type=chunk)[32](index=32&type=chunk) - The Allowance for Credit Losses (ACL) for loans is a material estimate of expected credit losses, measured collectively for similar risk characteristics or individually for nonaccrual loans, using a PD/LGD cash flow method with economic variables like unemployment, CRE Price Index, House Price Index, and GDP[40](index=40&type=chunk)[41](index=41&type=chunk)[52](index=52&type=chunk) [Note 2 – Cash and Due from Banks](index=15&type=section&id=Note%202%20%E2%80%93%20Cash%20and%20Due%20from%20Banks) - The Bank maintained average daily balances of **$1.4 billion** at the Federal Reserve Bank of Richmond for the six months ended June 30, 2025, compared to **$1.7 billion** for the same period in 2024[74](index=74&type=chunk) [Note 3 – Investment Securities](index=15&type=section&id=Note%203%20%E2%80%93%20Investment%20Securities) Investment Securities (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :----------------------------------- | :------------ | :---------------- | :--------- | :--------- | | AFS Securities (Amortized Cost) | $1,271,179 | $1,408,935 | $(137,756) | -9.78% | | AFS Securities (Fair Value) | $1,170,489 | $1,267,404 | $(96,915) | -7.65% | | HTM Securities (Amortized Cost) | $898,084 | $939,953 | $(41,869) | -4.45% | | HTM Securities (Fair Value) | $799,136 | $820,382 | $(21,246) | -2.59% | | Total AFS Unrealized Losses | $(100,742) | $(141,545) | $40,803 | -28.83% | | Federal Reserve and FHLB stock | $30,613 | $51,763 | $(21,150) | -40.86% | - Unrealized losses on AFS securities as of June 30, 2025, were primarily due to changes in market interest rates and interest spread relationships, considered temporary, with recovery expected as securities approach maturity[83](index=83&type=chunk) [Note 4 – Loans and Allowance for Credit Losses](index=19&type=section&id=Note%204%20%E2%80%93%20Loans%20and%20Allowance%20for%20Credit%20Losses) Loans and Allowance for Credit Losses (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :----------------------------------- | :------------ | :---------------- | :--------- | :--------- | | Total loans held for investment | $7,721,664 | $7,934,888 | $(213,224) | -2.69% | | Allowance for credit losses | $(183,796) | $(114,390) | $(69,406) | 60.67% | | Net loans held for investment | $7,537,868 | $7,820,498 | $(282,630) | -3.61% | | Nonaccrual Loans | $226,420 | $208,706 | $17,714 | 8.49% | | Total Nonperforming Assets | $228,879 | $211,449 | $17,430 | 8.24% | ACL Activity (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :----------------------------------- | :----------- | :----------- | :--------- | :--------- | | Balance at beginning of period | $114,390 | $85,940 | $28,450 | 33.11% | | Total charge-offs | $(95,698) | $(24,115) | $(71,583) | 296.85% | | Total recoveries | $591 | $398 | $193 | 48.49% | | Net charge-offs | $(95,107) | $(23,717) | $(71,390) | 300.99% | | Provision for credit losses - loans | $164,513 | $44,078 | $120,435 | 273.23% | | Balance at end of period | $183,796 | $106,301 | $77,495 | 72.90% | - Charge-offs in the first half of 2025 were primarily driven by elevated losses in the office and land loan portfolios, including a data center loan with underlying office exposure, as well as assisted senior living and life sciences office properties, due to continued market deterioration and updated collateral valuations[241](index=241&type=chunk) [Note 5 – Leases](index=30&type=section&id=Note%205%20%E2%80%93%20Leases) Operating Lease Information (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :----------------------------------- | :------------ | :---------------- | :--------- | :--------- | | Right-of-use assets - operating leases | $31,202 | $18,494 | $12,708 | 68.72% | | Operating lease liabilities | $37,297 | $23,815 | $13,482 | 56.61% | | Weighted average lease term (years) | 9.13 | 6.78 | 2.35 | 34.66% | | Weighted average discount rate | 3.58% | 3.03% | 0.55% | 18.15% | - On January 1, 2025, the Company commenced a new lease for its future headquarters at 7500 Old Georgetown Road in Bethesda, MD, expiring on July 31, 2037[136](index=136&type=chunk) [Note 6 – Derivatives and Hedging Activities](index=31&type=section&id=Note%206%20%E2%80%93%20Derivatives%20and%20Hedging%20Activities) Derivative Instruments (in thousands) | Derivative Type | June 30, 2025 Fair Value (Asset) | December 31, 2024 Fair Value (Asset) | Change ($) | Change (%) | | :----------------------------------- | :------------------------------- | :----------------------------------- | :--------- | :--------- | | Derivatives designated as hedging instruments (Interest rate product) | $11 | $0 | $11 | N/A | | Derivatives not designated as hedging instruments (Interest rate product) | $27,556 | $31,592 | $(4,036) | -12.77% | | Total derivatives in an asset position | $27,567 | $31,592 | $(4,025) | -12.74% | | Derivative Type | June 30, 2025 Fair Value (Liability) | December 31, 2024 Fair Value (Liability) | Change ($) | Change (%) | | :----------------------------------- | :--------------------------------- | :------------------------------------- | :--------- | :--------- | | Derivatives not designated as hedging instruments (Interest rate product) | $24,590 | $29,110 | $(4,520) | -15.53% | - The company minimizes credit risk by entering into derivative contracts with large, stable financial institutions and monitors counterparty risk, posting **$1.7 million** cash collateral and holding **$11.9 million** on behalf of others as of June 30, 2025[147](index=147&type=chunk) [Note 7 – Deposits](index=34&type=section&id=Note%207%20%E2%80%93%20Deposits) Deposit Composition (in thousands) | Deposit Type | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :----------------------------------- | :------------ | :---------------- | :--------- | :--------- | | Noninterest-bearing demand | $1,532,132 | $1,544,403 | $(12,271) | -0.79% | | Interest-bearing transaction | $895,604 | $1,211,791 | $(316,187) | -26.09% | | Savings and money market | $3,267,630 | $3,599,221 | $(331,591) | -9.21% | | Time deposits | $3,424,241 | $2,775,663 | $648,578 | 23.30% | | Total Deposits | $9,119,607 | $9,131,078 | $(11,471) | -0.13% | - Total brokered deposits were **$3.5 billion** (**38%** of total deposits) as of June 30, 2025, down from **$4.0 billion** (**44%**) as of December 31, 2024[155](index=155&type=chunk) [Note 8 – Borrowings](index=35&type=section&id=Note%208%20%E2%80%93%20Borrowings) Borrowings Summary (in thousands) | Borrowing Type | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :----------------------------------- | :------------ | :---------------- | :--------- | :--------- | | Customer repurchase agreements | $23,442 | $33,157 | $(9,715) | -29.30% | | Other short-term borrowings (FHLB) | $50,000 | $490,000 | $(440,000) | -89.80% | | Long-term borrowings (Senior notes) | $76,264 | $76,108 | $156 | 0.20% | | Total Net Borrowings Outstanding | $149,706 | $599,265 | $(449,559) | -75.02% | | Total Available Capacity | $3,118,267 | $2,674,916 | $443,351 | 16.57% | - The company completed an exchange offer for its **10.00%** senior unsecured debt (2029 Senior Notes) on January 16, 2025, with terms identical to the original notes but without transfer restrictions and registration rights[161](index=161&type=chunk) [Note 9 – Net Income (Loss) per Common Share](index=36&type=section&id=Note%209%20%E2%80%93%20Net%20Income%20(Loss)%20per%20Common%20Share) Earnings (Loss) Per Common Share | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Basic Net Income (Loss) per Common Share | $(2.30) | $(2.78) | $0.48 | -17.27% | | Diluted Net Income (Loss) per Common Share | $(2.30) | $(2.78) | $0.48 | -17.27% | | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Basic Net Income (Loss) per Common Share | $(2.25) | $(2.79) | $0.54 | -19.35% | | Diluted Net Income (Loss) per Common Share | $(2.25) | $(2.79) | $0.54 | -19.35% | [Note 10 – Other Comprehensive Income (Loss)](index=37&type=section&id=Note%2010%20%E2%80%93%20Other%20Comprehensive%20Income%20(Loss)) Other Comprehensive Income (Loss) (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Net unrealized gain (loss) on securities available-for-sale | $10,241 | $3,629 | $6,612 | 182.20% | | Other comprehensive income (loss) | $12,574 | $4,925 | $7,649 | 155.32% | | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Net unrealized gain (loss) on securities available-for-sale | $29,594 | $(1,437) | $31,031 | -2159.43% | | Other comprehensive income (loss) | $33,108 | $1,514 | $31,594 | 2086.79% | Accumulated Other Comprehensive Income (Loss) (in thousands) | AOCI Component | June 30, 2025 | June 30, 2024 | Change ($) | Change (%) | | :----------------------------------- | :------------ | :------------ | :--------- | :--------- | | Balance at end of period (Total AOCI) | $(108,365) | $(160,843) | $52,478 | -32.63% | [Note 11 – Fair Value Measurements](index=39&type=section&id=Note%2011%20%E2%80%93%20Fair%20Value%20Measurements) Recurring Fair Value Assets (Level 2, in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :----------------------------------- | :------------ | :---------------- | :--------- | :--------- | | Investment securities available-for-sale | $1,170,489 | $1,267,404 | $(96,915) | -7.65% | | Loans held for sale | $37,576 | $0 | $37,576 | N/A | | Interest rate product (asset) | $27,567 | $31,592 | $(4,025) | -12.74% | | Total recurring assets | $1,235,632 | $1,298,996 | $(63,364) | -4.88% | Nonrecurring Fair Value Assets (Level 3, in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :----------------------------------- | :------------ | :---------------- | :--------- | :--------- | | Individually assessed loans | $198,605 | $192,194 | $6,411 | 3.34% | | Other real estate owned | $2,459 | $2,743 | $(284) | -10.35% | | Total nonrecurring assets | $200,914 | $194,937 | $5,977 | 3.07% | [Note 12 – Segment Reporting](index=44&type=section&id=Note%2012%20%E2%80%93%20Segment%20Reporting) - The Company has one reporting unit, one operating segment, and consequently, a single reportable segment[191](index=191&type=chunk) - The Chief Executive Officer (CODM) evaluates financial performance by assessing revenue streams, significant expenses, and budget-to-actual results, with profitability determined only at the entity level[191](index=191&type=chunk) [Note 13 – Legal Contingencies](index=44&type=section&id=Note%2013%20%E2%80%93%20Legal%20Contingencies) - The company is cooperating with an ongoing investigation by the U.S. Attorney's Office for the Middle District of Pennsylvania regarding anti-money laundering controls (2011-2017) and a former customer's bank fraud[193](index=193&type=chunk) - Due to inherent uncertainty, the company is unable to reasonably estimate possible losses from the ongoing investigation[193](index=193&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, results of operations, liquidity, and capital resources, detailing its business model, critical accounting policies, and a comprehensive analysis of financial performance, balance sheet changes, commitments, liquidity management, and capital adequacy, including disclosures on market risk and the use of non-GAAP financial measures [General](index=45&type=section&id=General) - The Company provides general commercial and consumer banking services through EagleBank, its wholly owned banking subsidiary, primarily in Northern Virginia, Suburban Maryland, and Washington, D.C.[199](index=199&type=chunk)[200](index=200&type=chunk) - The Bank emphasizes providing commercial banking services to sole proprietors, small and medium-sized businesses, non-profit organizations, associations, and investors, and is active in originating SBA loans[201](index=201&type=chunk) - The Company sold the remaining servicing rights to all multifamily FHA loans during 2024 but maintains licenses and is evaluating options for future activity in this business[203](index=203&type=chunk) [Critical Accounting Policies and Estimates](index=46&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - The Allowance for Credit Losses (ACL) and Reserve for Unfunded Commitments (RUC) are material estimates requiring significant judgment regarding the amount and timing of expected future cash flows, historical loss rates, and quantitative/qualitative evaluations of economic factors[208](index=208&type=chunk) - The ACL on loans is estimated using a quantitative model (PD/LGD cash flow with EAD) incorporating four economic variables: national unemployment, Commercial Real Estate (CRE) Price Index, House Price Index, and Gross Domestic Product (GDP), weighted across baseline, upside, and downside scenarios[209](index=209&type=chunk)[210](index=210&type=chunk) - Loans with evidence of credit deterioration are individually assessed, and the ACL includes a qualitative adjustment for inherent risks not reflected in historical quantitative analysis[211](index=211&type=chunk)[213](index=213&type=chunk) [Results of Operations](index=47&type=section&id=Results%20of%20Operations) Summary of Consolidated Statements of Operations (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :----------------------------------- | :----------- | :----------- | :--------- | :--------- | | Net Interest Income | $133,425 | $146,051 | $(12,626) | -8.64% | | Provision for Credit Losses | $164,414 | $44,134 | $120,280 | 272.53% | | Noninterest income | $14,621 | $8,921 | $5,700 | 63.90% | | Noninterest expense | $88,921 | $186,488 | $(97,567) | -52.32% | | Net Income (Loss) | $(68,100) | $(84,140) | $16,040 | -19.06% | Net Interest Margin and Cost of Funds (Six Months Ended June 30) | Metric | 2025 | 2024 | Change (bps) | | :----------------------------------- | :----------- | :----------- | :----------- | | Net interest margin | 2.33% | 2.42% | -9 bps | | Cost of funds (interest-bearing liabilities) | 3.26% | 3.60% | -34 bps | | Yield on interest-earning assets | 5.34% | 5.71% | -37 bps | - The efficiency ratio improved to **60.1%** for the six months ended June 30, 2025, from **120.3%** for the same period in 2024, primarily due to the absence of a **$104.2 million** goodwill impairment recognized in Q2 2024[216](index=216&type=chunk)[249](index=249&type=chunk) [Balance Sheet Analysis](index=54&type=section&id=Balance%20Sheet%20Analysis) Balance Sheet Overview (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :----------------------------------- | :------------ | :---------------- | :--------- | :--------- | | Total Assets | $10,601,331 | $11,129,508 | $(528,177) | -4.75% | | Loans held for investment (amortized cost) | $7,721,664 | $7,934,888 | $(213,224) | -2.69% | | Investment securities (amortized cost, net of ACL) | $2,168,034 | $2,346,051 | $(178,017) | -7.59% | | Total Deposits | $9,119,607 | $9,131,078 | $(11,471) | -0.13% | | Total Borrowed Funds (excl. customer repurchase) | $126,264 | $566,108 | $(439,844) | -77.69% | | Total Shareholders' Equity | $1,185,067 | $1,226,061 | $(40,994) | -3.34% | - The Allowance for Credit Losses (ACL) for loans increased by **$69.4 million** to **$183.8 million** as of June 30, 2025, representing **2.38%** of total loans, up from **1.44%** at December 31, 2024[277](index=277&type=chunk) - Nonperforming assets increased to **$228.9 million** (**2.16%** of total assets) as of June 30, 2025, from **$211.4 million** (**1.90%** of total assets) at December 31, 2024, primarily due to additions in office and land property categories within nonperforming loans[287](index=287&type=chunk)[289](index=289&type=chunk) [Commitments and Contractual Obligations](index=63&type=section&id=Commitments%20and%20Contractual%20Obligations) Loan Commitments and Lines of Credit (in thousands) | Commitment Type | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :----------------------------------- | :------------ | :---------------- | :--------- | :--------- | | Unfunded loan commitments | $1,391,648 | $1,318,133 | $73,515 | 5.58% | | Unfunded lines of credit | $88,857 | $88,305 | $552 | 0.62% | | Letters of credit | $60,223 | $69,051 | $(8,828) | -12.78% | | Total | $1,540,728 | $1,475,489 | $65,239 | 4.42% | - Commitments generally have fixed expiration dates or termination clauses and may require performance milestones or collateral, especially for construction loans and asset-based lending[319](index=319&type=chunk) [Liquidity Management](index=64&type=section&id=Liquidity%20Management) Secondary Sources of Liquidity (in thousands) | Secondary Liquidity Source | In Use (June 30, 2025) | Available (June 30, 2025) | | :----------------------------------- | :--------------------- | :------------------------ | | Unsecured brokered deposits | $892,664 | $1,180,754 | | FHLB secured borrowings | $50,000 | $1,363,585 | | FRB Discount window secured borrowings | $0 | $1,754,682 | | Federal funds lines | $0 | $145,000 | | Unpledged investment securities | $0 | $270,511 | | Total | $966,106 | $4,727,479 | - The Bank's aggregate borrowing capacity as of June 30, 2025, was **$3.4 billion**, including **$1.4 billion** from FHLB and **$1.8 billion** from the Federal Reserve's Discount Window on existing pledged assets, plus **$0.3 billion** in unencumbered securities[328](index=328&type=chunk)[329](index=329&type=chunk) - The company believes it maintains sufficient primary (**$1.5 billion**) and secondary (**$4.7 billion**) liquidity sources, totaling **$6.2 billion**, to fund its operations and meet current and projected funding needs[333](index=333&type=chunk) [Capital Resources and Adequacy](index=65&type=section&id=Capital%20Resources%20and%20Adequacy) Capital Ratios (as of June 30, 2025) | Capital Ratio | Company | Bank | Minimum Required For Capital Adequacy (1) | Well Capitalized Under Prompt Corrective Action (2) | | :----------------------------------- | :------ | :----- | :---------------------------------------- | :------------------------------------ | | CET1 capital (to risk weighted assets) | 14.01% | 14.23% | 7.00% | 6.50% | | Total capital (to risk weighted assets) | 15.27% | 15.49% | 10.50% | 10.00% | | Tier 1 capital (to risk weighted assets) | 14.01% | 14.23% | 8.50% | 8.00% | | Tier 1 capital (to average assets) | 10.63% | 10.78% | 4.00% | 5.00% | - The company continues to exceed the construction, land development, and other land acquisitions regulatory concentration threshold (**115.8%** of total capital) and maintains heightened risk management procedures for its commercial real estate portfolio[336](index=336&type=chunk) - The Company announced a regular quarterly cash dividend on July 23, 2025, of **$0.165** per share, payable on August 29, 2025[342](index=342&type=chunk) [Asset/Liability Management and Quantitative and Qualitative Disclosures about Market Risk](index=67&type=section&id=Asset%2FLiability%20Management%20and%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) - The loan portfolio's repricing duration was **10 months** as of June 30, 2025, with **65.6%** of total loans being variable or adjustable rate[350](index=350&type=chunk) Interest Rate Sensitivity Analysis (as of June 30, 2025) | Change in interest rates (basis points) | Percentage change in 12-month net interest income | Percentage change in economic value of equity | | :-------------------------------------- | :------------------------------------------------ | :-------------------------------------------- | | +400 | 13.3% | (5.4)% | | +300 | 10.0% | (4.1)% | | +200 | 6.7% | (2.7)% | | +100 | 3.4% | (1.2)% | | — | — | — | | (100) | (4.0)% | 1.6% | | (200) | (7.5)% | 2.1% | | (300) | (12.6)% | 0.3% | | (400) | (17.7)% | (6.8)% | - The net unrealized loss before income tax on the AFS securities portfolio was **$100.7 million** as of June 30, 2025, representing **7.92%** of the investment portfolio's book value[357](index=357&type=chunk) [Use of Non-GAAP Financial Measures](index=70&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) Non-GAAP Financial Measures (in thousands, except per share data) | Metric | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :----------------------------------- | :------------ | :---------------- | :--------- | :--------- | | Tangible common equity (Non-GAAP) | $1,185,058 | $1,226,045 | $(40,987) | -3.34% | | Tangible common equity ratio (Non-GAAP) | 11.18% | 11.02% | 0.16% | 1.45% | | Tangible book value per common share (Non-GAAP) | $39.03 | $40.59 | $(1.56) | -3.84% | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=71&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section refers to the "Asset/Liability Management and Quantitative and Qualitative Disclosures about Market Risk" section within Item 2 for detailed information on market risk - Refer to Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," under the caption "Asset/Liability Management and Quantitative and Qualitative Disclosures about Market Risk" for disclosures about market risk[378](index=378&type=chunk) [Item 4. Controls and Procedures](index=71&type=section&id=Item%204.%20Controls%20and%20Procedures) As of June 30, 2025, the company's management, including the CEO and CFO, concluded that disclosure controls and procedures were effective in providing reasonable assurance that required information is recorded, processed, summarized, and reported timely, with no material changes in internal control over financial reporting during the second quarter of 2025 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[379](index=379&type=chunk) - No material changes in internal control over financial reporting occurred during the second quarter of 2025[380](index=380&type=chunk) [PART II. OTHER INFORMATION](index=72&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=72&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 13 of the Notes to Consolidated Financial Statements for information on legal proceedings and contingencies - Refer to "Note 13 – Legal Contingencies" of the Notes to Consolidated Financial Statements for information on legal proceedings[383](index=383&type=chunk) [Item 1A. Risk Factors](index=72&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors from those previously disclosed in its Annual Report on Form 10-K for 2024 and Quarterly Report on Form 10-Q for Q1 2025 - No material changes to risk factors from those included in the Annual Report on 2024 Form 10-K and Quarterly Report on Form 10-Q for the quarter ended March 31, 2025[384](index=384&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=72&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report for the period - None[385](index=385&type=chunk) [Item 3. Defaults Upon Senior Securities](index=72&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities to report for the period - None[386](index=386&type=chunk) [Item 4. Mine Safety Disclosures](index=72&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not Applicable[387](index=387&type=chunk) [Item 5. Other Information](index=72&type=section&id=Item%205.%20Other%20Information) There is no other information to report for the period - None[388](index=388&type=chunk) [Item 6. Exhibits](index=73&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including indentures, certifications, and interactive data files - Exhibits include Indenture dated September 30, 2024, Form of 10.00% Senior Notes due 2029, Certifications of Susan G. Riel and Eric R. Newell, and Interactive data files (XBRL)[391](index=391&type=chunk) [SIGNATURES](index=74&type=section&id=SIGNATURES) The report was duly signed on August 7, 2025, by Susan G. Riel, Chair, President and CEO, and Eric R. Newell, Senior Executive Vice President and Chief Financial Officer of Eagle Bancorp, Inc - The report was signed on August 7, 2025, by Susan G. Riel (Chair, President and CEO) and Eric R. Newell (Senior Executive Vice President and CFO)[395](index=395&type=chunk)