MIL-OSI: Eagle Bancorp, Inc. Announces Net Income for Third Quarter 2021 of $43.6 Million or $1.36 Per Share

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Source: GlobeNewswire (MIL-OSI)

BETHESDA, Md., Oct. 20, 2021 (GLOBE NEWSWIRE) — Eagle Bancorp, Inc. (the “Company”) (NASDAQ: EGBN), the parent company of EagleBank (the “Bank”), today announced net income of $43.6 million for the third quarter of 2021, compared to net income of $41.3 million for the third quarter of 2020, a 5.5% increase. Net income per basic and diluted common share was $1.36 for the third quarter of 2021, compared to $1.28 for the third quarter of 2020.

The increase in earnings is largely due to the release of reserves from the allowance for credit losses, partially offset by a reduction in mortgage fee income. Earnings for the third quarter of 2021 included a net reversal of $7.5 million from the allowance for credit losses on loans and the reserve for unfunded commitments, as compared to the third quarter of 2020, which included a net provision of $4.5 million for those two accounts.

Net income for the nine months ended September 30, 2021, was $135.1 million, compared to $93.3 million for the nine months ended September 30, 2020, a 45% increase. Net income per basic and diluted common share for the nine months ended September 30, 2021 was $4.23 and $4.22, respectively, compared to $2.88 for both basic and diluted for the nine months ended September 30, 2020.

Third Quarter 2021 Highlights

  • Income Statement
    • Net income of $43.6 million
    • Net reversal of $7.5 million (which includes an increase to the reserve for unfunded commitments of $716 thousand)
    • Net interest margin of 2.73%
    • Return on average assets (“ROAA”) of 1.46%
    • Return on average common equity (“ROACE”) of 13.00%
    • Return on average tangible common equity (“ROATCE”) of 14.11%1
    • Efficiency ratio of 41.7%
  • Balance Sheet
    • Total assets of $11.6 billion
    • Total loans (excluding loans held for sale) were $6.85 billion, down 5.6% from the prior quarter end
    • Loans (excluding PPP of $67.3 million) were $6.78 billion, down 3.4% from the prior quarter end2
    • Book value per share of $41.68, up 9.8% from a year ago
    • Tangible book value per share of $38.39, up 10.6% from a year ago3
    • Total risk based capital ratio of 16.59%
    • Annualized net charge-off ratio to average loans of 0.08%
    • Nonperforming assets to total assets of 0.31%
    • Allowance for credit losses to total loans of 1.21%
  • Other events
    • Announced an increase of the cash dividend to $0.40 per share, up 14% from $0.35 per share the prior quarter
    • Repurchased 11,609 shares during the third quarter at an average price of $52.94 per share

CEO Commentary

Susan G. Riel, President and Chief Executive Officer of Eagle Bancorp, Inc. commented, “We ended the third quarter of 2021 with earnings that were 1.46% of average assets, continued improvement in asset quality and a high level of capital. Earnings included a third consecutive reversal to the allowance for credit losses and another substantial gain on sale of residential mortgages.”

“While we remain a leader among our peers with an efficiency ratio of 41.7%, we continually seek out ways to control or reduce expenses. Early in the quarter, given the Bank’s robust capital levels, we redeemed $150 million of subordinated debt issued in 2016. Based on its rate of 5.00% in the second quarter of 2021, this translates into an annualized pre-tax cost savings of $7.5 million. Also this quarter, we closed our Dulles, Virginia branch as it had an expiring lease and our other northern Virginia branches allow us to continue serving these customers. This reduced our branch count to 18 and raised our average deposits per branch to $537 million. The combined annual pre-tax cost savings in rental expense will be about $187 thousand.

“The lending environment in the third quarter remained challenging. Our local market is strong and companies are flush with cash, which led to a lot of paydowns on existing credits, but it also helped push our nonperforming assets down to 0.31% of assets at quarter-end. Additionally, much of our lending efforts this past quarter did not register on the balance sheet as unfunded commitments increased by $280 million over the prior quarter.”

“At quarter end, our shareholders’ equity reached $1.3 billion and our total risk-based capital was 16.59%. As economic conditions continue to improve and more opportunities arise, our equity gives us the ability to originate loans for large commercial projects, as well as a lot of runway to grow the loan portfolio.”

“For our shareholders, at the end of the quarter our board increased the dividend to $0.40 per share, up from $0.35 per share in the previous quarter. With the increase, based on the closing stock price of $57.50 per share on September 30, 2021, the dividend yield was 2.78%. We were also active in making stock repurchases during the quarter.”

“We once again thank all of our employees for their commitment in serving the needs of our clients and communities. Additionally, we remain committed to a culture of respect, diversity and inclusion in both the workplace and the communities we serve.”

Income Statement

  • Net interest income was $79.0 million for the third quarter of 2021, unchanged from $79.0 million for the third quarter of 2020. While net interest income remained flat, we saw a 13% increase in average earning assets offset by a reduction in net interest margin when comparing the third quarter of 2021 to the same period of 2020. The redemption of $150 million of subordinated debt issued in 2016 on August 2, 2021, resulted in the one-time acceleration of deferred costs of $1.3 million, which were included in interest expense in the third quarter of 2021.

    Net interest income was $246.3 million for the nine months ended September 30, 2021, up from $240.1 million for the nine months ended September 30, 2020.

  • Net interest margin was 2.73% for the third quarter of 2021, as compared to 3.08% for the third quarter of 2020. Absent the accelerated interest expense on the redemption of $150 million of subordinated debt on August 2, 2021, the net interest margin would have been 2.78% for the third quarter of 2021.4 The decrease in margin primarily reflects a lower rate environment as well as significantly higher cash balances from strong deposit inflows.

    Net interest margin was 2.91% for the nine months ended September 30, 2021, as compared to 3.27% for the nine months ended September 30, 2020.

    Three Months Ended   Nine Months Ended
($ in thousands)   September 30, 2021   September 30, 2020   September 30, 2021   September 30, 2020
                 
Net interest margin, adjusted:                
Net interest income (GAAP)   $ 79,045     $ 79,037     $ 246,328     $ 240,145  
Less: PPP accelerated net deferred fees and costs from sale (non-GAAP)           (4,667 )    
Add: Accelerated interest expense on redemption of sub-debt (non-GAAP)   1,313         1,313      
Adjusted net interest income (non-GAAP)   $ 80,358     $ 79,037     $ 242,974     $ 240,145  
                 
Average interest earning assets (GAAP)   $ 11,486,280     $ 10,205,939     $ 11,292,799     $ 9,814,305  
                 
Net interest margin (GAAP)   2.73 %   3.08 %   2.91 %   3.27 %
Adjusted Net interest margin (non-GAAP)   2.78 %   3.08 %   2.88 %   3.27 %
  • Adjusted pre-provision net revenue (“Adjusted PPNR”),5 a non-GAAP measure, was $52.3 million for the third quarter of 2021, compared to $60.0 million the third quarter of 2020. As a percent of average assets, adjusted PPNR for the third quarter of 2021 was 1.75%, down from 2.28% for the third quarter of 2020. This decline in Adjusted PPNR to average assets was a result of lower noninterest income while average assets increased by 13%.

    Adjusted pre-provision net revenue was $162.9 million for the nine months ended September 30, 2021, compared to $166.8 million for the nine months ended September 30, 2020.

($ in thousands)   Three Months Ended   Nine Months Ended
    September 30, 2021   September 30, 2020   September 30, 2021   September 30, 2020
Adjusted net interest income (non-GAAP)   $ 80,358       $ 79,037       $ 242,974       $ 240,145    
Noninterest income (GAAP)   8,299       17,844       29,811       35,809    
Noninterest expense (GAAP)   (36,375 )     (36,915 )     (109,856 )     (109,154 )  
Adjusted PPNR (non-GAAP)   $ 52,282       $ 59,966       $ 162,929       $ 166,800    
                 
Average Assets (GAAP)   $ 11,826,326       $ 10,473,595       $ 11,600,210       $ 10,084,081    
Adjusted PPNR to Average Assets (non-GAAP)   1.75   %   2.28   %   1.88   %   2.21   %
  • Provision for credit losses on loans was a reversal of $8.2 million for the third quarter of 2021, compared to a provision of $6.6 million for the third quarter of 2020. The reversal was primarily driven by the decline in loans, improvement in credit quality, and improvements and adjustments in qualitative and environmental factors.

    Provision for credit losses was a reversal of $14.4 million for the nine months ended September 30, 2021, as compared to a provision of $40.7 million for the nine months ended September 30, 2020.

  • Provision for unfunded commitments was $716 thousand for the third quarter of 2021, compared to a reversal of $2.1 million for the third quarter of 2020. The provision increased as unfunded commitments were up $280 million from the prior quarter-end.

    Provision for unfunded commitments was a reversal of $487 thousand for the nine months ended September 30, 2021, as compared to a provision of $974 thousand for the nine months ended September 30, 2020.

  • Noninterest income was $8.3 million for the third quarter of 2021, as compared to $17.8 million for the third quarter 2020, a 53% decrease. The decrease was primarily due to lower mortgage volume in the third quarter of 2021 versus the historically high volume that occurred in the third quarter of 2020. In comparison to the prior quarter, residential mortgage volume was up slightly. Residential mortgage loan locked commitments were $279.8 million for the third quarter of 2021, $248.3 million for the second quarter of 2021, and $593.0 million for the third quarter of 2020.

    Noninterest income was $29.8 million for the nine months ended September 30, 2021, compared to $35.8 million for the nine months ended September 30, 2020.

  • Noninterest expenses were $36.4 million for the third quarter 2021 compared to $36.9 million for the third quarter of 2020. The major changes between the third quarter of 2021 and the third quarter of 2020 were as follows:
    • Salaries and employee benefits were $22.1 million, up $2.8 million, as a result of higher incentive bonus accruals based on the Company performance and increases in share based compensation.
    • Premises and equipment expenses were $3.9 million, down $1.3 million. The third quarter of 2020 included a $1.7 million adjustment which increased rent expense in accordance with ASC 842 on leases.
    • Legal, accounting and professional fees were $2.0 million, down $1.1 million. 

Noninterest expenses were $109.9 million for the nine months ended September 30, 2021, compared to $109.2 million for the nine months ended September 30, 2020.

  • Efficiency ratio6 was 41.7% for the third quarter of 2021 compared to 38.1% for the third quarter of 2020. The efficiency ratio increase was driven by lower mortgage fee income in the third quarter of 2021 in comparison to the record mortgage fee income reported in the third quarter of 2020.

    The efficiency ratio was 39.8% for the nine months ended September 30, 2021, compared to 39.6% for the nine months ended September 30, 2020.

  • Effective income tax rate for the third quarter ended 2021 and 2020 was 25.4%.

    Effective income tax rate for the nine months ended September 30, 2021 and 2020 was 25.4%.

Balance Sheet

  • Total assets at September 30, 2021 were $11.6 billion, up 4.2% from year-end and up 14.6% from a year ago. The increase in assets from a year ago was primarily driven by increases to cash and investments as a result of large deposit inflows in the third quarter of 2021 and the fourth quarter of 2020.
  • Investment portfolio had a balance of $1.8 billion at September 30, 2021, up 55.2% from year-end and up 82.8% from a year ago. We will continue to judiciously deploy accumulated excess liquidity into the investment portfolio to achieve higher yields over cash alternatives. Investments made during the third quarter of 2021 were primarily 20-year, 2% agency mortgage backed securities and treasury bonds.
  • Total loans (excluding loans held for sale) were $6.9 billion as of September 30, 2021, a decrease of 11.7% from year-end and a decrease of 13.1% from a year ago. A portion of the decrease was driven by PPP loan forgiveness and PPP loan sales in the second quarter of 2021. Excluding PPP loans, the loans were $6.8 billion at September 30, 2021, a decrease of 7.1% from year-end and a decrease of 8.6% from a year ago.7Over the past four quarters, with the exception of the second quarter of 2021 (excluding PPP), payoffs and paydowns have outpaced funded originations and advances. This was driven by the successful completion of projects, and, at the outset of the COVID-19 pandemic, our focus on serving existing loan clients and maintaining credit quality. More recently, in the third quarter of 2021, the decline in loans also has been influenced by the competition to refinance at lower rates with longer amortization periods, and excess liquidity at competing banks as well as many companies and construction project sponsors.
($ in thousands)   September 30, 2021   June 30, 2021   December 31, 2020   September 30, 2020
                 
Total loans, excluding loans held for sale (GAAP)   $ 6,850,863       $ 7,259,558       $ 7,760,212       $ 7,880,255    
Less: PPP loans (non-GAAP)   (67,311 )     (238,041 )     (454,771 )     (456,115 )  
Total loans, excluding loans held for sale and PPP loans (non-GAAP)   $ 6,783,552       $ 7,021,517       $ 7,305,441       $ 7,424,140    

On a linked quarter basis, total loans (excluding loans held for sale and PPP loans) at September 30, 2021, decreased by $238 million, or 3.4%, from the prior quarter end as payoffs and paydowns increased and exceeded originations and advances.

Also on a linked quarter basis, unfunded commitments (including unfunded rate locks on residential mortgages) were $2.37 billion as of September 30, 2021, up $280 million from the prior quarter-end. Excluding rate locks on unfunded residential mortgages, unfunded commitments were $2.23 billion as of September 30, 2021, up $253 million from the prior quarter end, an increase of 12.8%.

In regards to loan yields, the yield on the loan portfolio has benefited from prepayment penalties as loans have paid off and from accelerated interest income from PPP loan forgiveness.

  • The yield on the loan portfolio was 4.59% for the third quarter of 2021 as compared to 4.46% for the third quarter of 2020. Excluding PPP loans, the adjusted loan yield (a non-GAAP measure) was 4.54% for the third quarter of 2021, down from 4.59% for the third quarter of 2020.8
  • The yield on the loan portfolio was 4.67% for the nine months ended September 30, 2021 as compared to 4.71% for the nine months ended September 30, 2020.
  Three Months Ended
($ in thousands) September 30, 2021   September 30, 2020
  Average Balance   Interest   Average
Yield/Rate
  Average Balance   Interest   Average
Yield/Rate
Loan Yields, Adjusted                      
Loan yield (GAAP) $ 7,055,621       $ 81,540       4.59 %   $ 7,910,260       $ 88,730       4.46 %
Less: PPP interest income (non-GAAP)9 (140,676 )     (2,371 )     6.69 %   (457,107 )     (2,765 )     2.41 %
Adjusted loan yield (non-GAAP) $ 6,914,945       $ 79,169       4.54 %   $ 7,453,153       $ 85,965       4.59 %
  Nine Months Ended
($ in thousands) September 30, 2021   September 30, 2020
  Average Balance   Interest   Average
Yield/Rate
  Average Balance   Interest   Average
Yield/Rate
Loan Yields, Adjusted                      
Loan yield (GAAP) $ 7,385,733       $ 258,188       4.67 %   $ 7,859,188       $ 277,374       4.71 %
Less: PPP interest income (non-GAAP)9 (356,140 )     (16,574 )     6.22 %   (262,113 )     (5,145 )     2.62 %
Adjusted loan yield (non-GAAP) $ 7,029,593       $ 241,614       4.60 %   $ 7,597,075       $ 272,229       4.79 %
  • Allowance for credit losses was 1.21% of total loans at September 30, 2021, compared to 1.41% at year-end and 1.40% a year ago. Adjusted to exclude PPP loans, which are fully government guaranteed, the allowance for credit losses was 1.22%, compared to 1.50% at year-end and 1.48% a year ago.10 The reduction in the allowance for credit losses as a percent of total loans for the nine months ended September 30, 2021 is due to a provision reversal of $14.4 million and net charge-offs of $12.2 million, which had a greater impact on the ratio than the decline in loans.

    Net charge-offs for the third quarter of 2021 were $1.3 million as compared to $5.2 million for third quarter of 2020. On an annualized basis, this was 0.08% of average loans (excluding loans held for sale) for the third quarter of 2021, as compared to 0.26% for the third quarter of 2020.

($ in thousands)   September 30, 2021   December 31, 2020   September 30, 2020
Allowance for credit losses, adjusted            
Allowance for credit losses (GAAP)   $ 82,906       $ 109,579       $ 110,215    
             
Total loans, excluding loans held for sale (GAAP)   $ 6,850,863       $ 7,760,212       $ 7,880,255    
Less: PPP loans (non-GAAP)   (67,311 )     (454,771 )     (456,115 )  
Total loans excluding PPP loans (non-GAAP)   $ 6,783,552       7,305,441       7,424,140    
             
Allowance for credit losses to total loans (GAAP)   1.21   %   1.41   %   1.40   %
Allowance for credit losses to total loans excluding PPP loans (non-GAAP)   1.22   %   1.50   %   1.48   %
  • Total deposits were $9.7 billion at September 30, 2021, up 5.2% from the year-end, and up 18.2% from a year ago. With the exception of the second quarter of 2021, deposits have continued to flow into the Bank driving up the size of the balance sheet. At the end of the third quarter of 2021, deposits were up $649 million, over the prior quarter end.

    While deposits are up significantly, the deposit mix remains favorable. Average noninterest bearing deposits to average total deposits was 33.9% for the third quarter of 2021, as compared to 31.7% for the third quarter of 2020.

    In regards to deposit costs, in the third quarter of 2021, the Bank continued to see higher priced CDs runoff.
     

    • CDs with a total balance of $115 million and a weighted average rate of 0.44% matured in the third quarter of 2021. These CDs had a weighted average term of 12 months at issuance.
    • The cost of funds was 0.35% in the third quarter of 2021, as compared to 0.58% in the third quarter of 2020. The cost of funds for the third quarter of 2021 included the $1.3 million in accelerated interest expenses from the redemption of subordinated debt.
  • Total shareholders’ equity was $1.3 billion at September 30, 2021, up 7.3% from year-end, and up 8.9% from a year ago. For the nine months ended September 30, 2021, increases in shareholders’ equity from earnings were partially offset by common dividends declared of $31.9 million and stock repurchases of $677 thousand.
    • Book value per share was $41.68, up 6.7% from year-end and up 9.8% from a year ago.
    • Tangible book value per share was $38.3911, up 7.4% from year-end and up 10.6% from a year ago.
  • Capital ratios for the Company remain strong and substantially in excess of regulatory minimum requirements. Regulatory ratios based on risk based capital ratios continue to remain high or trend up, driven by strong earnings and relatively modest change in risk weighted assets.
    For the Company
    September 30,
2021
  December 31, 2020   September 30,
2020
  Well Capitalized Minimum
Regulatory Ratios                
Total Capital (to risk weighted assets)   16.59 %   17.04 %   16.72 %   10.00 %
Tier 1 Capital (to risk weighted assets)   15.33 %   13.49 %   13.19 %   8.00 %
Common Equity Tier 1 (to risk weighted assets)   15.33 %   13.49 %   13.19 %   6.50 %
Tier 1 Capital (to average assets)   10.58 %   10.31 %   10.82 %   5.00 %
                 
Common Capital Ratios                
Common Equity Ratio   11.49 %   11.16 %   12.11 %   %
Tangible Common Equity Ratio   10.68 %   10.31 %   11.18 %   %

Additional Commentary

  • Subordinated debt: On August 2, 2021, the Company redeemed $150 million of subordinated debt issued in 2016. In the second quarter of 2021, the rate on the debt was 5.00%, which translates into an annualized pre-tax cost savings of $7.5 million when redeemed. This redemption accelerated $1.3 million in deferred costs which were included in interest expense the third quarter of 2021.
  • Cost savings initiatives: The Bank continues to pursue its “branch light” strategy to improve efficiency while putting more emphasis on relationships and technology. After a full analysis of our branch structure, the Bank closed its Dulles Branch in September 2021 as its lease expired. The annual cost savings in rent, common area maintenance and taxes is about $187 thousand, and there was no write-off of leasehold improvements as all improvements had been fully amortized upon the expiration of the lease.

    All of the employees from the Dulles Branch have filled, or will be filling, vacant positions within the Company, reducing the need to hire additional personnel.

  • Paycheck protection program: At September 30, 2021, the Bank had an outstanding balance of PPP loans of $67.3 million. These loans were mostly originated in mid-2020, and we expect these loans to complete the forgiveness process over the next two quarters.
  • COVID-19 and watch-rated loans: Beginning in the third quarter of 2020, all loans that received a third COVID-19 deferral or payment modification were downgraded to a watch-rating if not already rated as such. This was done to raise the visibility of these loans within the loan portfolio. After these COVID-19 deferred or modified loans demonstrate nine months of payments and sustained performance, they may be considered for removal as a watch-rated loan. Watch-rated loans at September 30, 2021 were $509 million, of which $415 million were loans that received a COVID-19 deferral or payment modification (includes loans that were upgraded to watch-rated).
  • Nonperforming loans and assets: Both nonperforming loans and assets decreased on a linked quarter basis and year over year.
    • Nonperforming loans were $31.2 million or 0.46% of total loans at September 30, 2021, down from $49.5 million or 0.68% at the prior quarter end, and down from $58.1 million or 0.74% of total loans a year ago.
    • Nonperforming assets were $36.4 million or 0.31% of total assets at September 30, 2021, down from $54.5 million or 0.50% at the prior quarter end, and down from $63.0 million or 0.62% of total assets a year ago. At September 30, 2021, other real estate owned was $5.1 million.
  • Dividend: On September 29, 2021, the Board of Directors declared a quarterly cash dividend of $0.40 per common share payable on November 1, 2021 to shareholders of record on October 21, 2021. This represents a $0.05 per share increase over the prior quarterly dividend of $0.35 per share, and a $0.18 per share increase from the $0.22 per share dividend declared in the third quarter of 2020.
  • Stock repurchase plan: In December 2020, the Board of Directors approved a new stock repurchase plan of up to 1,588,848 shares, or approximately 5% of shares outstanding, which commenced January 1, 2021. In the third quarter of 2021, the Company completed repurchases of 11,609 shares for $614,609 at an average cost of $52.94 per share under the stock repurchase plan.

    For the year, and since the start of the 2021 stock repurchase plan, the Company has repurchased a total of 13,075 shares for $676,901 at an average cost of $51.77 per share.

  • Legal update: As previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, on January 25, 2021, the Company entered into a settlement agreement with respect to a previously disclosed shareholder demand letter, covering substantially the same subject matters as the disclosed civil securities class action litigation pending in the SDNY. The letter demanded that the Board undertake an investigation into the Board’s and management’s alleged violations of law and alleged breaches of fiduciary duties, and take appropriate actions following such investigation. On October 4, 2021, the DC Superior Court approved the settlement and dismissed the derivative action complaint. The Company has already begun executing on the terms of the settlement, including the payment of agreed-upon fees and expenses (which were fully covered by the Company’s D&O insurance policy).

    In connection with the previously disclosed investigation by the SEC, the Company’s discussions with the Staff have progressed, and the Company continues to engage with the Staff, including senior Staff members, about a potential resolution or settlement of the Staff’s investigation with respect to the Company. The Company is hopeful that these discussions will lead to a timely resolution of the investigation as it relates to the Company and any current employees and directors on a mutually agreeable basis, but there can be no assurance that will be the case. There also can be no assurance that this would result in resolution of any charges against former employees or directors, given the Staff’s ongoing review of the factual record. Any agreements reached by the Company with the Staff would be subject to approval by the Commission, and there can be no assurance that it would be approved. We are unable to predict the outcome of the investigation or these discussions or whether any potential resolution would have a material impact on the Company.

    The Company is also continuing discussions with the Staff of the Federal Reserve Board about a potential resolution or settlement of its investigation with respect to the Company. With respect to the other investigations described above, we are unable to predict their duration, scope or outcome.

    As previously disclosed, the Company maintains director and officer insurance policies (“D&O Insurance Policies”) that provide coverage for the legal defense costs related to certain of the above-described investigations and litigations. When claims are covered by D&O Insurance Policies, the Company records a corresponding receivable against the incurred legal defense cost expense subject to coverage under the D&O Insurance Policies and then eliminates the receivable and expense when the claim is paid. Subject to any new developments to the above-described investigations and litigations that may occur over the next few months, the Company currently believes there is a possibility that the applicable D&O Insurance Policies may be exhausted as early as the fourth quarter of this year. Once the D&O Insurance Policies are exhausted, the Company will be responsible for paying the defense costs associated with the above-described investigations and litigations for itself and on behalf of any current and former Officers and Directors entitled to indemnification from the Company. Since the commencement of the above-described matters in 2018 through September 30, 2021, the Company’s D&O Insurance carriers have advanced defense cost claims to the Company and its current and former directors and officers in an aggregate of approximately $10 million, excluding the cost of settlements. Because this aggregate amount does not reflect total expenses incurred and includes costs related to certain proceedings that have since settled, this number is not intended to be and should not be used as an estimate of defense costs going forward. The Company cannot predict with any certainty the amount of defense costs that the Company may incur in the future in connection with currently ongoing and any potential future investigations and legal proceedings, as they are dependent on various factors, many of which are outside of the Company’s control.

Additional financial information: The financial information that follows provides more detail on the Company’s financial performance for the three months ended September 30, 2021 as compared to the three months ended September 30, 2020, as well as eight quarters of trend data. Persons wishing additional information should refer to the Company’s annual report on Form 10-K for the year ended December 31, 2020, quarterly reports on Form 10-Q for the quarters ended March 31, 2021 and June 30, 2021 and other reports filed with the Securities and Exchange Commission (the “SEC”).

About Eagle Bancorp: The Company is the holding company for EagleBank, which commenced operations in 1998. The Bank is headquartered in Bethesda, Maryland, and operates through eighteen branch offices, located in Suburban Maryland, Washington, D.C. and Northern Virginia. The Company focuses on building relationships with businesses, professionals and individuals in its marketplace, and is committed to a culture of respect, diversity, equity and inclusion in both its workplace and the communities in which it operates.

Conference call: Eagle Bancorp will host a conference call to discuss its third quarter 2021 financial results on Thursday, October 21, 2021 at 10:00 a.m. eastern time. The public is invited to listen to this conference call by dialing 1.877.303.6220, conference ID Code: 5668029, or by accessing the call on the Company’s website, www.EagleBankCorp.com. A replay of the conference call will be available on the Company’s website through November 4, 2021.

Forward-looking statements: This press release contains forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended, including statements of goals, intentions, and expectations as to future trends, plans, events or results of Company operations and policies and regarding general economic conditions. In some cases, forward-looking statements can be identified by use of words such as “may,” “will,” “can,” “anticipates,” “believes,” “expects,” “plans,” “estimates,” “potential,” “continue,” “should,” “could,” “strive,” “feel” and similar words or phrases. These statements are based upon current and anticipated economic conditions, nationally and in the Company’s market (including the macroeconomic and other challenges and uncertainties resulting from the COVID-19 pandemic, including on our credit quality, asset and loan growth and broader business operations), interest rates and interest rate policy, competitive factors, and other conditions which by their nature, are not susceptible to accurate forecast and are subject to significant uncertainty. Because of these uncertainties and the assumptions on which this discussion and the forward-looking statements are based, actual future operations and results in the future may differ materially from those indicated herein. For details on factors that could affect these expectations, see the risk factors and other cautionary language included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 and June 30, 2021, the Company’s upcoming Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, and in other periodic and current reports filed with the SEC. Readers are cautioned against placing undue reliance on any such forward-looking statements. The Company’s past results are not necessarily indicative of future performance, and nothing contained herein is meant to or should be considered and treated as earnings guidance of future quarters’ performance projections. All information is as of the date of this press release. Any forward-looking statements made by or on behalf of the Company speak only as to the date they are made. Except to the extent required by applicable law or regulation, the Company undertakes no obligation to revise or update publicly any forward-looking statement for any reason.

Eagle Bancorp, Inc.
Consolidated Financial Highlights (Unaudited)
(dollars in thousands, except per share data)
  Three Months Ended September 30,   Nine Months Ended September 30,
  2021   2020   2021   2020
Income Statements:              
Total interest income $ 89,152       $ 93,833       $ 278,266       $ 295,306  
Total interest expense 10,107       14,795       31,938       55,161  
Net interest income 79,045       79,038       246,328       240,145  
Provision for credit losses (8,203 )     6,607       (14,409 )     40,654  
Provision for Unfunded Commitments 716       (2,078 )     (487 )     974  
Net interest income after provision for credit losses 86,532       74,509       261,224       198,517  
Noninterest income (before investment gain) 6,780       17,729       27,753       34,159  
Gain (loss) on sale of investment securities 1,519       115       2,058       1,650  
Total noninterest income 8,299       17,844       29,811       35,809  
Total noninterest expense 36,375       36,915       109,856       109,154  
Income before income tax expense 58,456       55,438       181,179       125,172  
Income tax expense 14,847       14,092       46,108       31,847  
Net income $ 43,609       $ 41,346       $ 135,071       $ 93,325  
Per Share Data:              
Earnings per weighted average common share, basic $ 1.36       $ 1.28       $ 4.23       $ 2.88  
Earnings per weighted average common share, diluted $ 1.36       $ 1.28       $ 4.22       $ 2.88  
Weighted average common shares outstanding, basic 31,959,357       32,229,322       31,930,939       32,433,963  
Weighted average common shares outstanding, diluted 32,030,527       32,250,885       31,993,337       32,458,100  
Actual shares outstanding at period end 31,947,458       32,228,636       31,947,458       32,228,636  
Book value per common share at period end $ 41.68       $ 37.96       $ 41.68       $ 37.96  
Tangible book value per common share at period end (1) $ 38.39       $ 34.70       $ 38.39       $ 34.70  
Dividend per common share $ 0.40       $ 0.22       $ 1.00       $ 0.66  
Performance Ratios (annualized):              
Return on average assets 1.46   %   1.57   %   1.56   %   1.24 %
Return on average common equity 13.00   %   14.46   %   13.98   %   10.44 %
Return on average tangible common equity 14.11   %   15.93   %   15.21   %   11.45 %
Net interest margin 2.73   %   3.08   %   2.91   %   3.27 %
Efficiency ratio (2) 41.65   %   38.10   %   39.78   %   39.56 %
Other Ratios:              
Allowance for credit losses to total loans (3) 1.21   %   1.40   %   1.21   %   1.40 %
Allowance for credit losses to total nonperforming loans 265.32   %   189.83   %   265.32   %   189.83 %
Nonperforming loans to total loans (3) 0.46   %   0.74   %   0.46   %   0.74 %
Nonperforming assets to total assets 0.31   %   0.62   %   0.31   %   0.62 %
Net charge-offs (annualized) to average loans (3) 0.08   %   0.26   %   0.22   %   0.25 %
Common equity to total assets 11.49   %   12.11   %   11.49   %   12.11 %
Tier 1 capital (to average assets) 10.58   %   10.82   %   10.58   %   10.82 %
Total capital (to risk weighted assets) 16.59   %   16.72   %   16.59   %   16.72 %
Common equity tier 1 capital (to risk weighted assets) 15.33   %   13.19   %   15.33   %   13.19 %
Tangible common equity ratio (1) 10.68   %   11.18   %   10.68   %   11.18 %
(continued)              
  Three Months Ended September 30,   Nine Months Ended September 30,
  2021   2020   2021   2020
Loan Balances – Period End (in thousands):              
Commercial and Industrial $ 1,289,215       $ 1,524,613       $ 1,289,215       $ 1,524,613  
PPP loans $ 67,311       $ 456,115       $ 67,311       $ 456,115  
Commercial real estate – income producing $ 3,337,303       $ 3,724,839       $ 3,337,303       $ 3,724,839  
Commercial real estate – owner occupied $ 977,617       $ 997,645       $ 977,617       $ 997,645  
1-4 Family mortgage $ 76,259       $ 82,385       $ 76,259       $ 82,385  
Construction – commercial and residential $ 824,133       $ 879,144       $ 824,133       $ 879,144  
Construction – C&I (owner occupied) $ 222,366       $ 140,357       $ 222,366       $ 140,357  
Home equity $ 55,527       $ 72,648       $ 55,527       $ 72,648  
Other consumer $ 1,132       $ 2,509       $ 1,132       $ 2,509  
Average Balances (in thousands):              
Total assets $ 11,826,326       $ 10,473,595       $ 11,600,210       $ 10,084,081  
Total earning assets $ 11,486,280       $ 10,205,939       $ 11,292,799       $ 9,814,305  
Total loans $ 7,055,621       $ 7,910,260       $ 7,385,733       $ 7,859,188  
Total deposits $ 9,948,114       $ 8,591,912       $ 9,694,694       $ 8,258,352  
Total borrowings $ 448,697       $ 596,472       $ 519,333       $ 560,427  
Total shareholders’ equity $ 1,331,022       $ 1,211,145       $ 1,292,223       $ 1,193,988  

(1) Tangible common equity to tangible assets (the “tangible common equity ratio”), tangible book value per common share, and the annualized return on average tangible common equity are non-GAAP financial measures derived from GAAP based amounts. The Company calculates the tangible common equity ratio by excluding the balance of intangible assets from common shareholders’ equity and dividing by tangible assets. The Company calculates tangible book value per common share by dividing tangible common equity by common shares outstanding, as compared to book value per common share, which the Company calculates by dividing common shareholders’ equity by common shares outstanding. The Company calculates the annualized return on average tangible common equity ratio by dividing net income available to common shareholders by average tangible common equity which is calculated by excluding the average balance of intangible assets from the average common shareholders’ equity. The Company considers this information important to shareholders as tangible equity is a measure that is consistent with the calculation of capital for bank regulatory purposes, which excludes intangible assets from the calculation of risk based ratios and as such is useful for investors, regulators, management and others to evaluate capital adequacy and to compare against other financial institutions. The table below provides reconciliation of financial measures defined by GAAP with non-GAAP financial measures.
(2) Computed by dividing noninterest expense by the sum of net interest income and noninterest income. The efficiency ratio measures a bank’s overhead as a percentage of its revenue. 
(3) Excludes loans held for sale.

GAAP Reconciliation (Unaudited)
(dollars in thousands except per share data)
  Three Months Ended   Nine Months Ended   Year Ended   Three Months Ended   Nine Months Ended
  September 30, 2021   September 30, 2021   December 31, 2020   September 30, 2020   September 30, 2020
Common shareholders’ equity     $ 1,331,697       $ 1,240,892           $ 1,223,402    
Less: Intangible assets     (105,103 )     (105,114 )         (105,165 )  
Tangible common equity     $ 1,226,594       $ 1,135,778           $ 1,118,237    
Book value per common share     $ 41.68       $ 39.05           $ 37.96    
Less: Intangible book value per common share     (3.29 )     (3.31 )         (3.26 )  
Tangible book value per common share     $ 38.39       $ 35.74           $ 34.70    
Total assets     $ 11,585,317       $ 11,117,802           $ 10,106,294    
Less: Intangible assets     (105,103 )     (105,114 )         (105,165 )  
Tangible assets     $ 11,480,214       $ 11,012,688           $ 10,001,129    
Tangible common equity ratio     10.68   %   10.31   %       11.18   %
Average common shareholders’ equity $ 1,331,022       $ 1,292,223       $ 1,204,341       $ 1,137,826       $ 1,193,988    
Less: Average intangible assets (105,126 )     (105,151 )     (104,903 )     (105,106 )     (104,826 )  
Average tangible common equity $ 1,225,896       $ 1,187,072       $ 1,099,438       $ 1,032,720       $ 1,089,162    
Net Income Available to Common Shareholders $ 43,609       $ 135,071       $ 132,217       $ 41,346       $ 93,325    
Annualized Return on Average Tangible Common Equity 14.11   %   15.21   %   12.03   %   15.93   %   11.45   %
Eagle Bancorp, Inc.
Consolidated Balance Sheets (Unaudited)
(dollars in thousands, except per share data)
Assets September 30, 2021   December 31, 2020   September 30, 2020
Cash and due from banks $ 8,806       $ 8,435       $ 7,559    
Federal funds sold 38,934       28,200       30,830    
Interest bearing deposits with banks and other short-term investments 2,452,744       1,752,420       818,719    
Investment securities available for sale (amortized cost of $1,789,416, $1,129,057, and $956,803, and allowance for credit losses of $256, $167 and $156 as of September 30, 2021, December 31, 2020 and September 30, 2020, respectively). 1,786,659       1,151,083       977,570    
Federal Reserve and Federal Home Loan Bank stock 34,093       40,104       40,061    
Loans held for sale 53,413       88,205       79,084    
Loans 6,850,863       7,760,212       7,880,255    
Less allowance for credit losses (82,906 )     (109,579 )     (110,215 )  
Loans, net 6,767,957       7,650,633       7,770,040    
Premises and equipment, net 15,293       13,553       12,204    
Operating lease right-of-use assets 30,080       25,237       27,180    
Deferred income taxes 44,733       38,571       36,363    
Bank owned life insurance 108,158       76,729       76,326    
Intangible assets, net 105,103       105,114       105,165    
Other real estate owned 5,135       4,987       4,987    
Other assets 134,209       134,531       120,206    
Total Assets $ 11,585,317       $ 11,117,802       $ 10,106,294    
           
Liabilities and Shareholders’ Equity          
Deposits:          
Noninterest bearing demand $ 2,836,418       $ 2,809,334       $ 2,384,108    
Interest bearing transaction 812,410       756,923       823,607    
Savings and money market 5,268,157       4,645,186       3,956,553    
Time, $100,000 or more 347,937       546,173       553,949    
Other time 403,566       431,587       460,568    
Total deposits 9,668,488       9,189,203       8,178,785    
Customer repurchase agreements 29,401       26,726       24,293    
Other short-term borrowings 300,000       300,000       300,000    
Long-term borrowings 69,639       268,077       267,980    
Operating lease liabilities 34,345       28,022       30,457    
Reserve for unfunded commitments 5,011       5,498       5,092    
Other liabilities 146,736       59,384       76,285    
Total liabilities 10,253,620       9,876,910       8,882,892    
Shareholders’ Equity          
Common stock, par value $.01 per share; shares authorized 100,000,000, shares issued and outstanding 31,947,458, 31,779,663, and 32,228,636 respectively 316       315       320    
Additional paid in capital 432,479       427,016       442,592    
Retained earnings 901,218       798,061       766,219    
Accumulated other comprehensive income (2,316 )     15,500       14,271    
Total Shareholders’ Equity 1,331,697       1,240,892       1,223,402    
Total Liabilities and Shareholders’ Equity $ 11,585,317       $ 11,117,802       $ 10,106,294    
Eagle Bancorp, Inc.
Consolidated Statements of Income (Unaudited)
(dollars in thousands, except per share data)
  Three Months Ended September 30,   Nine Months Ended September 30,
Interest Income 2021   2020   2021   2020
Interest and fees on loans $ 82,182       $ 89,296       $ 260,124       $ 278,979  
Interest and dividends on investment securities 5,877       4,141       15,878       14,139  
Interest on balances with other banks and short-term investments 1,083       384       2,239       2,104  
Interest on federal funds sold 10       12       25       84  
Total interest income 89,152       93,833       278,266       295,306  
Interest Expense              
Interest on deposits 6,590       10,995       21,288       44,055  
Interest on customer repurchase agreements 14       84       34       257  
Interest on other short-term borrowings 506       505       1,502       1,363  
Interest on long-term borrowings 2,997       3,211       9,114       9,486  
Total interest expense 10,107       14,795       31,938       55,161  
Net Interest Income 79,045       79,038       246,328       240,145  
Provision for Credit Losses (8,203 )     6,607       (14,409 )     40,654  
Provision for Unfunded Commitments 716       (2,078 )     (487 )     974  
Net Interest Income After Provision For Credit Losses 86,532       74,509       261,224       198,517  
Noninterest Income              
Service charges on deposits 1,204       1,061       3,303       3,428  
Gain on sale of loans 3,332       12,226       11,988       16,249  
Gain on sale of investment securities 1,519       115       2,058       1,650  
Increase in the cash surrender value of  bank owned life insurance 642       413       1,429       1,655  
Other income 1,602       4,029       11,033       12,827  
Total noninterest income 8,299       17,844       29,811       35,809  
Noninterest Expense              
Salaries and employee benefits 22,145       19,388       63,790       54,289  
Premises and equipment expenses 3,859       5,125       11,121       12,414  
Marketing and advertising 1,013       928       2,879       3,117  
Data processing 2,886       2,700       8,451       7,955  
Legal, accounting and professional fees 2,021       3,097       8,523       14,064  
FDIC insurance 1,549       2,152       5,586       5,556  
Other expenses 2,902       3,525       9,506       11,759  
Total noninterest expense 36,375       36,915       109,856       109,154  
Income Before Income Tax Expense 58,456       55,438       181,179       125,172  
Income Tax Expense 14,847       14,092       46,108       31,847  
Net Income $ 43,609       $ 41,346       $ 135,071       $ 93,325  
Earnings Per Common Share              
Basic $ 1.36       $ 1.28       $ 4.23       $ 2.88  
Diluted $ 1.36       $ 1.28       $ 4.22       $ 2.88  
Eagle Bancorp, Inc.
Consolidated Average Balances, Interest Yields And Rates (Unaudited)
(dollars in thousands)
  Three Months Ended
  September 30, 2021   September 30, 2020
  Average Balance   Interest   Average
Yield/Rate
  Average Balance   Interest   Average
Yield/Rate
ASSETS                      
Interest earning assets:                      
Interest bearing deposits with other banks and other short-term investments $ 2,668,265     $ 1,083     0.16 %   $ 1,275,932     $ 384     0.12 %
Loans held for sale (1) 56,866     642     4.52 %   79,354     567     2.86 %
Loans (1) (2) 7,055,621     81,540     4.59 %   7,910,260     88,730     4.46 %
Investment securities available for sale (2) 1,670,723     5,877     1.40 %   906,990     4,141     1.82 %
Federal funds sold 34,805     10     0.11 %   33,403     11     0.13 %
Total interest earning assets 11,486,280     89,152     3.08 %   10,205,939     93,833     3.66 %
Total noninterest earning assets 432,215             376,681          
Less: allowance for credit losses 92,169             109,025          
Total noninterest earning assets 340,046             267,656          
TOTAL ASSETS $ 11,826,326             $ 10,473,595          
LIABILITIES AND SHAREHOLDERS’ EQUITY                      
Interest bearing liabilities:                      
Interest bearing transaction $ 842,086     $ 402     0.19 %   $ 756,005     $ 483     0.25 %
Savings and money market 4,971,866     3,645     0.29 %   3,998,603     4,929     0.49 %
Time deposits 763,513     2,543     1.32 %   1,112,664     5,583     2.00 %
Total interest bearing deposits 6,577,465     6,590     0.40 %   5,867,272     10,995     0.75 %
Customer repurchase agreements 27,348     14     0.20 %   28,523     84     1.17 %
Other short-term borrowings 300,003     506     0.67 %   300,003     505     0.66 %
Long-term borrowings 121,346     2,997     9.88 %   267,946     3,211     4.69 %
Total interest bearing liabilities 7,026,162     10,107     0.57 %   6,463,744     14,795     0.91 %
Noninterest bearing liabilities:                      
Noninterest bearing demand 3,370,649             2,724,640          
Other liabilities 98,493             74,066          
Total noninterest bearing liabilities 3,469,142             2,798,706          
Shareholders’ Equity 1,331,022             1,211,145          
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 11,826,326             $ 10,473,595          
Net interest income     $ 79,045             $ 79,038      
Net interest spread         2.51 %           2.75 %
Net interest margin         2.73 %           3.08 %
Cost of funds         0.35 %           0.58 %

(1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $6.3 million and $5.4 million for the three months ended September 30, 2021 and September 30, 2020, respectively.
(2) Interest and fees on loans and investments exclude tax equivalent adjustments.

Eagle Bancorp, Inc.
Consolidated Average Balances, Interest Yields And Rates (Unaudited)
(dollars in thousands)
  Nine Months Ended
  September 30, 2021   September 30, 2020
  Average Balance   Interest   Average
Yield/Rate
  Average Balance   Interest   Average
Yield/Rate
ASSETS                      
Interest earning assets:                      
Interest bearing deposits with other banks and other short-term investments $ 2,288,660     $ 2,239     0.13 %   $ 990,051     $ 2,104     0.28 %
Loans held for sale (1) 79,264     1,936     3.26 %   66,158     1,605     3.23 %
Loans (1) (2) 7,385,733     258,188     4.67 %   7,859,188     277,374     4.71 %
Investment securities available for sale (2) 1,506,996     15,878     1.41 %   865,484     14,139     2.18 %
Federal funds sold 32,146     25     0.10 %   33,424     84     0.34 %
Total interest earning assets 11,292,799     278,266     3.29 %   9,814,305     295,306     4.02 %
Total noninterest earning assets 408,167             368,974          
Less: allowance for credit losses 100,756             99,198          
Total noninterest earning assets 307,411             269,776          
TOTAL ASSETS $ 11,600,210             $ 10,084,081          
LIABILITIES AND SHAREHOLDERS’ EQUITY                      
Interest bearing liabilities:                      
Interest bearing transaction $ 819,033     $ 1,217     0.20 %   $ 787,434     $ 2,679     0.45 %
Savings and money market 4,842,621     11,312     0.31 %   3,751,397     21,619     0.77 %
Time deposits 826,790     8,759     1.42 %   1,199,654     19,757     2.20 %
Total interest bearing deposits 6,488,444     21,288     0.44 %   5,738,485     44,055     1.03 %
Customer repurchase agreements 22,240     34     0.20 %   29,710     257     1.16 %
Other short-term borrowings 300,003     1,502     0.67 %   273,452     1,363     0.66 %
Long-term borrowings 197,090     9,114     6.17 %   257,265     9,486     4.84 %
Total interest bearing liabilities 7,007,777     31,938     0.61 %   6,298,912     55,161     1.17 %
Noninterest bearing liabilities:                      
Noninterest bearing demand 3,206,250             2,519,867          
Other liabilities 93,960             71,314          
Total noninterest bearing liabilities 3,300,210             2,591,181          
Shareholders’ Equity 1,292,223             1,193,988          
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 11,600,210             $ 10,084,081          
Net interest income     $ 246,328             $ 240,145      
Net interest spread         2.68 %           2.85 %
Net interest margin         2.91 %           3.27 %
Cost of funds         0.38 %           0.75 %

(1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $26.3 million and $16.1 million for the nine months ended September 30, 2021 and September 30, 2020, respectively.
(2) Interest and fees on loans and investments exclude tax equivalent adjustments.

Statements of Income and Highlights Quarterly Trends (Unaudited)
(dollars in thousands, except per share data)
  Three Months Ended
  September 30,   June 30,   March 31,   December 31,   September 30,   June 30,   March 31,   December 31,
Income Statements: 2021   2021   2021   2020   2020   2020   2020   2019
Total interest income $ 89,152       $ 94,920       $ 94,194       $ 94,680     $ 93,833       $ 97,672     $ 103,801     $ 107,183    
Total interest expense 10,107       10,288       11,543       13,262     14,795       16,309     24,057     26,473    
Net interest income 79,045       84,632       82,651       81,418     79,038       81,363     79,744     80,710    
Provision for credit losses (8,203 )     (3,856 )     (2,350 )     4,917     6,607       19,737     14,310     2,945    
Provision for unfunded commitments 716       (761 )     (442 )     406     (2,078 )     940     2,112        
Net interest income after provision for credit losses 86,532       89,249       85,443       76,095     74,509       60,686     63,322     77,765    
Noninterest income (before investment gain (loss)) 6,780       10,607       10,366       9,722     17,729       11,782     4,648     6,845    
Gain (loss) on sale of investment securities 1,519       318       221       165     115       713     822     (111 )  
Total noninterest income 8,299       10,925       10,587       9,887     17,844       12,495     5,470     6,734    
Salaries and employee benefits 22,145       19,876       21,769       20,151     19,388       17,104     17,797     19,360    
Premises and equipment 3,859       3,644       3,618       3,301     5,125       3,468     3,821     3,380    
Marketing and advertising 1,013       980       886       1,161     928       1,111     1,078     1,200    
Other expenses 9,358       10,994       11,714       10,396     11,474       13,209     14,651     10,786    
Total noninterest expense 36,375       35,494       37,987       35,009     36,915       34,892     37,347     34,726    
Income before income tax expense 58,456       64,680       58,043       50,973     55,438       38,289     31,445     49,773    
Income tax expense 14,847       16,687       14,574       12,081     14,092       9,433     8,322     14,317    
Net income 43,609       47,993       43,469       38,892     41,346       28,856     23,123     35,456    
Per Share Data:                              
Earnings per weighted average common share, basic $ 1.36       $ 1.50       $ 1.36       $ 1.21     $ 1.28       $ 0.90     $ 0.70     $ 1.06    
Earnings per weighted average common share, diluted $ 1.36       $ 1.50       $ 1.36       $ 1.21     $ 1.28       $ 0.90     $ 0.70     $ 1.06    
Weighted average common shares outstanding, basic 31,959,357       31,962,819       31,869,655       32,037,099     32,229,322       32,224,695     32,850,112     33,468,572    
Weighted average common shares outstanding, diluted 32,030,527       32,025,110       31,922,940       32,075,175     32,250,885       32,240,825     32,875,508     33,498,681    
Actual shares outstanding at period end 31,947,458       31,961,573       31,960,379       31,779,663     32,228,636       32,224,756     32,197,258     33,241,496    
Book value per common share at period end $ 41.68       $ 40.87       $ 39.45       $ 39.05     $ 37.96       $ 36.86     $ 36.11     $ 35.82    
Tangible book value per common share at period end (1) $ 38.39       $ 37.58       $ 36.16       $ 35.74     $ 34.70       $ 33.62     $ 32.86     $ 32.67    
Dividend per common share $ 0.40       $ 0.35       $ 0.25       $ 0.22     $ 0.22       $ 0.22     $ 0.22     $ 0.22    
Performance Ratios (annualized):                              
Return on average assets 1.46   %   1.68   %   1.53   %   1.39 %   1.57   %   1.12 %   0.98 %   1.49   %
Return on average common equity 13.00   %   14.92   %   14.05   %   12.53 %   14.46   %   9.84 %   7.81 %   11.78   %
Return on average tangible common equity 14.11   %   16.25   %   15.33   %   13.69 %   15.93   %   10.80 %   8.56 %   12.91   %
Net interest margin 2.73   %   3.04   %   2.98   %   2.98 %   3.08   %   3.26 %   3.49 %   3.49   %
Efficiency ratio (2) 41.65   %   37.14   %   40.74   %   38.34 %   38.10   %   37.18 %   43.83 %   39.71   %
Other Ratios:                              
Allowance for credit losses to total loans (3) 1.21   %   1.28   %   1.36   %   1.41 %   1.40   %   1.36 %   1.23 %   0.98   %
Allowance for credit losses to total nonperforming loans 265.32   %   187.07   %   195.25   %   179.80 %   189.83   %   184.52 %   201.80 %   151.16   %
Nonperforming loans to total loans (3) 0.46   %   0.68   %   0.69   %   0.79 %   0.74   %   0.74 %   0.61 %   0.65   %
Nonperforming assets to total assets 0.31   %   0.50   %   0.51   %   0.59 %   0.62   %   0.69 %   0.56 %   0.56   %
Net charge-offs (annualized) to average loans (3) 0.08   %   0.30   %   0.27   %   0.28 %   0.26   %   0.36 %   0.12 %   0.16   %
Tier 1 capital (to average assets) 10.58   %   10.65   %   10.28   %   10.31 %   10.82   %   10.63 %   11.33 %   11.62   %
Total capital (to risk weighted assets) 16.59   %   17.98   %   17.86   %   17.04 %   16.72   %   16.26 %   15.44 %   16.20   %
Common equity tier 1 capital (to risk weighted assets) 15.33   %   14.67   %   14.42   %   13.49 %   13.19   %   12.80 %   12.14 %   12.87   %
Tangible common equity ratio (1) 10.68   %   11.07   %   10.48   %   10.31 %   11.18   %   11.17 %   10.70 %   12.22   %
Average Balances (in thousands):                              
Total assets $ 11,826,326       $ 11,453,080       $ 11,517,836       $ 11,141,826     $ 10,473,595       $ 10,326,709     $ 9,447,663     $ 9,426,220    
Total earning assets $ 11,486,280       $ 11,152,933       $ 11,236,440       $ 10,872,259     $ 10,205,939       $ 10,056,500     $ 9,176,174     $ 9,160,034    
Total loans $ 7,055,621       $ 7,382,238       $ 7,726,716       $ 7,896,324     $ 7,910,260       $ 8,015,751     $ 7,650,993     $ 7,532,179    
Total deposits $ 9,948,114       $ 9,530,909       $ 9,601,249       $ 9,227,733     $ 8,591,912       $ 8,482,718     $ 7,696,764     $ 7,716,973    
Total borrowings $ 448,697       $ 536,926       $ 573,750       $ 596,307     $ 596,472       $ 598,463     $ 485,948     $ 449,432    
Total shareholders’ equity $ 1,331,022       $ 1,290,029       $ 1,254,780       $ 1,235,174     $ 1,211,145       $ 1,179,452     $ 1,191,180     $ 1,194,337    

(1) Tangible common equity to tangible assets (the “tangible common equity ratio”) and tangible book value per common share are non-GAAP financial measures derived from GAAP based amounts. The Company calculates the tangible common equity ratio by excluding the balance of intangible assets from common shareholders’ equity and dividing by tangible assets. The Company calculates tangible book value per common share by dividing tangible common equity by common shares outstanding, as compared to book value per common share, which the Company calculates by dividing common shareholders’ equity by common shares outstanding. The Company considers this information important to shareholders as tangible equity is a measure that is consistent with the calculation of capital for bank regulatory purposes, which excludes intangible assets from the calculation of risk based ratios and as such is useful for investors, regulators, management and others to evaluate capital adequacy and to compare against other financial institutions.
(2) Computed by dividing noninterest expense by the sum of net interest income and noninterest income.
(3) Excludes loans held for sale.


1 A reconciliation between this non-GAAP financial measure and the nearest GAAP measure is provided in the tables that accompany this document.
2 A reconciliation between this non-GAAP financial measure and the nearest GAAP measure is provided in the table under the subsection, “Total Loans.”
3 A reconciliation between this non-GAAP financial measure and the nearest GAAP measure is provided in the tables that accompany this document.
4 A reconciliation between this non-GAAP financial measure and the nearest GAAP measure is provided in the table below.
5 A reconciliation between this non-GAAP financial measure and the nearest GAAP measure is provided in the table below.
6 Noninterest expense divided by the sum of net interest income and noninterest income.
7 A reconciliation between these non-GAAP financial measures and the nearest GAAP measures is provided in the table below.
8 A reconciliation between these non-GAAP financial measures and the nearest GAAP measures is provided in the table below.
9 Includes interest on PPP loans, accelerated net deferred fees and costs from PPP loan sale and accelerated interest income from forgiveness of PPP loans.
10 A reconciliation between these non-GAAP financial measures and the nearest GAAP measures is provided in the table below.
11 A reconciliation of non-GAAP financial measures to the nearest non-GAAP measure is provided in the tables that accompany this document.

EAGLE BANCORP, INC
CONTACT:
David G. Danielson
240.552.9534

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