Eagle Bancorp(EGBN) - 2025 Q4 - Annual Results

Financial Performance - Total assets reached $10.5 billion, total loans at $7.3 billion, and total deposits at $9.1 billion as of December 31, 2025[8] - Net interest income increased by $0.1 million quarter over quarter, while net interest margin decreased to 2.38% from 2.43% in the previous quarter[18] - Provision for credit losses was $15.5 million for Q4 2025, significantly down from $113.2 million in the prior quarter, with net charge-offs totaling $12.3 million[20] - Noninterest income rose by $9.7 million, driven by the absence of third-quarter losses and gains from SBIC investments[20] - The efficiency ratio improved to 63.72%, indicating a disciplined cost structure[10] - Average deposits decreased by $62.9 million for the quarter, reflecting lower balances in time deposit accounts[26] - Noninterest income is expected to grow by 15-25% in 2026, following a 20-30% growth in the previous quarter[22] - The net interest margin for 2026 is projected to be between 2.60% and 2.80%[22] - The effective tax rate is expected to be between 12-16% in 2026, down from 15-20%[22] - Tangible Book Value Per Share (TBVPS) as of December 31, 2025, is projected to be $37.59, reflecting a decrease due to net income and other adjustments[56] Liquidity and Capital Management - The company maintains $4.7 billion in combined on-balance sheet liquidity, significantly exceeding its $2.4 billion in uninsured deposits[10] - Available liquidity is over $4.7 billion, covering uninsured deposits of $2.4 billion by more than 199%[26] - The allowance for credit losses to loans held for investment is projected to be 2.19% for Q4 2025[30] - The company has positioned its portfolio to manage liquidity and pledging needs effectively[54] - Cash flow from the securities portfolio is utilized to pay down brokered funding[54] - The company considers tangible equity important for evaluating capital adequacy and comparing against other financial institutions[68] Strategic Initiatives - The strategy includes optimizing and diversifying loans and securities to drive sustainable growth, focusing on business relationships and C&I lending[12] - The company aims to redeploy $254 million from its investment portfolio into higher-yielding assets in 2026[18] - The company aims to increase core deposits and reduce reliance on wholesale funding as part of its long-term strategy[26] Loan and Securities Portfolio - Non-accrual loans decreased by $11.8 million during the fourth quarter, driven by paydowns on credit facilities[46] - The total CRE office loan portfolio has declined by $286.9 million year-over-year[34] - Total securities decreased by $124 million from September 30, 2025, due to principal paydowns, maturities, and called securities[54] - Unencumbered securities available for pledging amount to $1.29 billion[54] Performance Metrics - The efficiency ratio, a non-GAAP measure, is calculated by dividing GAAP non-interest expense by the sum of GAAP net interest income and GAAP non-interest income[68] - Adjusted PPNR excludes the impact of loan sales to provide a clearer view of core operating performance[68]