Eagle Bancorp(US:EGBN)2021-08-08 16:00Financial Performance - Net income for Q2 2021 was $48.0 million, a 66% increase from $28.9 million in Q2 2020, with earnings per share rising to $1.50 from $0.90, a 67% increase [256]. - Total revenue for Q2 2021 was $95.6 million, up from $93.9 million in Q2 2020, driven by net interest income of $84.6 million, which increased from $81.4 million [258]. - The annualized return on average assets (ROAA) for Q2 2021 was 1.68%, compared to 1.12% in Q2 2020, while return on average common equity (ROACE) increased to 14.92% from 9.84% [271]. - The efficiency ratio for Q2 2021 was 37.14%, slightly improved from 37.18% in Q2 2020, indicating effective cost management [264]. - The provision for credit losses decreased to a reversal of $6.2 million for the six months ended June 30, 2021, compared to a provision of $34.0 million for the same period in 2020, primarily due to an improved macroeconomic outlook [280]. - Total noninterest income increased to $21.5 million for the six months ended June 30, 2021, a 20% increase from $18.0 million in the same period in 2020 [281]. Loan and Credit Quality - As of June 30, 2021, the outstanding balance of Paycheck Protection Program (PPP) loans was $238.0 million through 537 business loans, with an average yield of 6.13% for the first six months of 2021 [237]. - The Company sold a total of $169.8 million of PPP loans during the second quarter of 2021, recognizing $4.7 million in accelerated interest income from these sales [237]. - Total loans decreased by 6.5% from $7.8 billion at December 31, 2020, to $7.3 billion at June 30, 2021, with average loans down 3.6% year-over-year [278]. - The Company recorded a negative provision for credit losses for the three months ended June 30, 2021, due to improving economic forecasts and credit quality [242]. - Nonperforming assets totaled $54.5 million at June 30, 2021, representing 0.50% of total assets, down from $65.9 million or 0.59% of total assets at December 31, 2020 [316]. - Total nonperforming loans amounted to $49.5 million at June 30, 2021, which is 0.68% of total loans, compared to $60.9 million or 0.79% of total loans at December 31, 2020 [324]. Deposits and Funding - Average deposits increased by 18.2% for the first six months of 2021 compared to the same period in 2020, despite total deposits being 1.9% lower than at December 31, 2020 [278]. - Total deposits decreased to $9.0 billion as of June 30, 2021, from $9.2 billion at December 31, 2020 [357]. - Noninterest bearing demand deposits grew to $3,175,419 million, compared to $2,566,348 million in the previous year [299]. - The cost of funds decreased to 0.37% from 0.65% year-over-year [299]. Investment Portfolio - The investment portfolio increased by 46.0% to $1.7 billion as of June 30, 2021, due to cash deployment from deposit inflows [355]. - The duration of the investment portfolio increased to 4.3 years at June 30, 2021, from 3.2 years at December 31, 2020 [394]. - The net unrealized gain before income tax on the investment portfolio was $6.7 million at June 30, 2021, down from $21.8 million at June 30, 2020 [397]. Risk Management - The Company has implemented heightened risk management procedures for its commercial real estate portfolio, including periodic stress testing [420]. - The company continues to monitor its concentration in commercial real estate lending to remain compliant with federal guidance [420]. - The Company continues to monitor early signs of deterioration in borrowers' financial conditions to mitigate risk effectively [317]. Capital and Shareholder Returns - The ratio of common equity to total assets increased to 11.92% at June 30, 2021, from 11.16% at December 31, 2020, due to earnings of $91.5 million [289]. - The total risk-based capital ratio improved to 17.98% as of June 30, 2021, up from 17.04% at December 31, 2020 [359]. - The Company initiated a repurchase program allowing for the repurchase of up to 1,588,848 shares, with 1,466 shares repurchased in Q1 2021 for $62,000 [424]. - A quarterly cash dividend of $0.35 per share was announced on June 30, 2021, payable on August 2, 2021 [425].