Eagle Bancorp, Inc. Announces Net Income for Fourth Quarter 2021 of $41.6 Million or $1.30 Per Share and Full Year 2021 Earnings of $176.7 Million or $5.53 Per Share

BETHESDA, Md., Jan. 19, 2022 (GLOBE NEWSWIRE) — Eagle Bancorp, Inc. (the “Company”) (NASDAQ: EGBN), the parent company of EagleBank (the “Bank”), today announced net income of $41.6 million for the fourth quarter of 2021, compared to net income of $38.9 million for the fourth quarter of 2020, a 7.0% increase. Net income per basic and diluted common share was $1.30 for the fourth quarter of 2021, compared to $1.21 for the fourth quarter of 2020.

The increase in earnings is largely due to the release of reserves from the allowance for credit losses and higher level of earning assets, and to a lesser degree from higher FHA fee income and a reduction in FDIC expenses. These improvements were partially offset by higher accruals for salary and benefits, lower gain on sale of loans and lower net interest income. Earnings for the fourth quarter of 2021 included a net reversal of $7.0 million from the allowance for credit losses on loans and the reserve for unfunded commitments, as compared to the fourth quarter of 2020, which included a net provision of $5.3 million.

Net income for the year ended December 31, 2021, was $176.7 million, compared to $132.2 million for the year ended December 31, 2020, a 33.6% increase. Net income per basic and diluted common share for the year ended December 31, 2021 was $5.53 and $5.52, respectively, compared to $4.09 for both basic and diluted common shares, for the year ended December 31, 2020.

Fourth Quarter 2021 Highlights

  • Income Statement

    • Net income of $41.6 million

    • Net reversal of $7.0 million (which includes a reversal to the reserve for unfunded commitments of $632 thousand)

    • Net interest margin of 2.55%

    • Return on average assets (“ROAA”) of 1.32%

    • Return on average common equity (“ROACE”) of 12.30%

    • Return on average tangible common equity (“ROATCE”) of 13.35%1

    • Efficiency ratio of 44.3%

  • Balance Sheet

    • Total assets of $11.8 billion

    • Total loans (excluding loans held for sale) were $7.1 billion, up 3.1% from the prior quarter end

    • Loans (excluding PPP of $51.1 million) were $7.0 billion, up 3.4% from the prior quarter end2

    • Book value per share of $42.28, up 8.3% from a year ago

    • Tangible book value per share of $38.97, up 9.0% from a year ago3

    • Total risk based capital ratio of 16.15%

    • Annualized net charge-off ratio to average loans of 0.07%

    • Nonperforming assets (“NPAs”) to total assets of 0.26%

    • Allowance for credit losses to total loans of 1.06%

  • Other events

    • Announced a cash dividend of $0.40 per share

    • Repurchased a total of 13,175 in 2021 at an average price of $51.75 per share

CEO Commentary

Susan G. Riel, President and Chief Executive Officer of Eagle Bancorp, Inc., commented, “We ended the year strong with record full year earnings, meaningful loan growth during the fourth quarter and a level of asset quality and improving economic factors, that led to another reversal from the allowance for credit losses. Earnings for the year were $176.7 million or $5.52 per diluted share. Loans, on a linked quarter basis, were up $215 million or 3.1%. In regards to asset quality, NPAs were 0.26% of assets at quarter end and annualized net charge offs for the quarter were 0.07%.

“The loan growth during the quarter was encouraging, even as payoffs and paydowns remained high. We saw significant contributions from both our CRE and C&I teams, particularly in December. The largest net increase was in owner occupied CRE loans, followed by commercial loans and income producing CRE. Construction loans also increased, but was mostly offset by completed projects.

“Our other lending teams also did well. The FHA team ended the year strong with a fourth quarter that resulted in trade premiums, origination fees and mortgage servicing rights income of $2.5 million. The mortgage team also did well with locked loans in the fourth quarter of $163 million.

“With unfunded commitments of $2 billion at year end, as more opportunities arise, our total risk-based capital of 16.15%, gives us room to continue to grow the loan portfolio.”

Ms. Riel continued, “We continue to be a leader among our peers with an efficiency ratio of 44.3%, a key component of which, is our branch light strategy. This year we closed three branches, all of which had expiring leases and clients who can be served from other northern Virginia branches and through digital channels. The most recent closure was of our Reston location in December, reducing our branch count to 17 and raising our average deposits per branch to $587 million.

“For our shareholders, we remain focused on increasing value and returning cash through dividends and share repurchases. At the end of the quarter, our board declared a dividend of $0.40 per share, bringing our total dividends for the year to $1.40 per share, or $38.9 million. Additionally, in December, our board approved the adoption of a new share repurchase program for 2022.

“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 $78.2 million for the fourth quarter of 2021, down from $81.4 million for the fourth quarter of 2020. The decline in net interest income was driven by the decline in loans (versus the same period in the prior year) and a lower rate environment, partially offset by a 12.04% increase in average earning assets.

    Net interest income was $324.5 million for the year ended December 31, 2021, up from $321.6 million for the year ended December 31, 2020.

  • Net interest margin was 2.55% for the fourth quarter of 2021, as compared to 2.98% for the fourth quarter of 2020. The decrease in margin from a year ago primarily reflects a lower rate environment as well as significantly higher cash balances from strong deposit inflows which led to higher average earning assets. In the fourth quarter of 2021, a concerted effort was made to deploy more cash into the investment portfolio (as discussed in the Balance Sheet section).

    Net interest margin was 2.81% for the year ended December 31, 2021, as compared to 3.19% for the year ended December 31, 2020.

(Dollars in thousands)

Three Months Ended
December 31,

Year Ended
December 31,

2021

2020

2021

2020

Net interest margin, adjusted:

Net interest income (GAAP)

$

78,186

$

81,417

$

324,514

$

321,562

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

Adjusted net interest income (non-GAAP)

$

78,186

$

81,417

$

321,160

$

321,562

Average interest earning assets (GAAP)

$

12,180,872

$

10,872,259

$

11,516,495

$

10,872,239

Net interest margin (GAAP)

2.55

%

2.98

%

2.81

%

3.19

%

Adjusted Net interest margin (non-GAAP)

2.55

%

2.98

%

2.79

%

3.19

%

  • Adjusted pre-provision net revenue (“Adjusted PPNR”),4 a non-GAAP measure, was $49.5 million for the fourth quarter of 2021, compared to $56.3 million the fourth quarter of 2020. As a percent of average assets, adjusted PPNR for the fourth quarter of 2021 was 1.56%, down from 2.01% for the fourth quarter of 2020. This decline in Adjusted PPNR to average assets was primarily a result of higher noninterest expenses and higher average assets.

    Adjusted pre-provision net revenue was $212.4 million for the year ended December 31, 2021, compared to $223.1 million for the year ended December 31, 2020.

(Dollars in thousands)

Three Months Ended
December 31,

Year Ended
December 31,

2021

2020

2021

2020

Adjusted net interest income (non-GAAP)

$

78,186

$

81,417

$

321,160

$

321,562

Noninterest income (GAAP)

10,574

9,887

40,385

45,696

Noninterest expense (GAAP)

(39,309

)

(35,008

)

(149,165

)

(144,162

)

Adjusted PPNR (non-GAAP)

$

49,451

$

56,296

$

212,380

$

223,096

Average Assets (GAAP)

$

12,538,597

$

11,141,826

$

11,836,735

$

10,349,963

Adjusted PPNR to Average Assets (non-GAAP)

1.56

%

2.01

%

1.79

%

2.16

%

  • Provision for credit losses on loans was a reversal of $6.4 million for the fourth quarter of 2021, compared to a provision of $4.9 million for the fourth quarter of 2020. The reversal was primarily driven by improvements in the economic environment and related adjustments to the quantitative components of the CECL model, as well as, improvements in asset quality.

    Provision for credit losses was a reversal of $20.8 million for the year ended December 31, 2021, as compared to a provision of $45.6 million for the year ended December 31, 2020.

  • Provision for unfunded commitments was a reversal of $632 thousand for the fourth quarter of 2021, compared to a provision of $406 thousand for the fourth quarter of 2020. The reversal was primarily driven by the funding of available credit, reducing unfunded commitments in the fourth quarter of 2021.

    Provision for unfunded commitments was a reversal of $1.1 million for the year ended December 31, 2021, compared to a provision of $1.4 million for the year ended December 31, 2020.

  • Noninterest income was $10.6 million for the fourth quarter of 2021, as compared to $9.9 million for the fourth quarter 2020, a 6.9% increase. The increase was driven by FHA multi-family income associated with trade premiums, origination fees and mortgage servicing rights of $2.5 million and gains on sale of investment securities of $906 thousand, which more than offset the lower gain on sale of loans. Residential mortgage loan locked commitments were $163.0 million for the fourth quarter of 2021, compared to $427.5 million for the fourth quarter of 2020.

    Noninterest income was $40.4 million for the year ended December 31, 2021, compared to $45.7 million for the year ended December 31, 2020.

Noninterest expenses were $149.2 million for the year ended December 31, 2021, compared to $144.2 million for the year ended December 31, 2020.

  • Efficiency ratio5 was 44.3% for the fourth quarter of 2021 compared to 38.3% for the fourth quarter of 2020. The efficiency ratio increase was driven by lower net interest income and higher noninterest expenses (see Noninterest Expense section) in the fourth quarter of 2021 in comparison to the fourth quarter of 2020.

    The efficiency ratio was 40.9% for the year ended December 31, 2021, compared to 39.3% for the year ended December 31, 2020.

  • Effective income tax rate for the fourth quarter ended 2021 was 26.3%, compared to 23.7% in the fourth quarter of 2020. This change is the result of the provision to tax return true-up process which took place in the fourth quarter each year.

    Effective income tax rate for the year ended December 31, 2021 and 2020 was 25.7% and 24.9%, respectively.

Balance Sheet

  • Total assets at December 31, 2021 were $11.8 billion, up 6.6% 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 and fourth quarters of 2021.

  • Investment portfolio had a balance of $2.6 billion at December 31, 2021, up 128% from a year ago. More than half of the increase came in the fourth quarter of 2021 as investments increased by $836.7 million over the third quarter of 2021. Investments made during the fourth quarter of 2021 were primarily agency mortgage backed securities and agency bonds.

  • Total loans (excluding loans held for sale) were $7.1 billion as of December 31, 2021, a decrease of 9.0% from a year ago. A portion of the decrease was driven by PPP loan forgiveness and, in the second quarter of 2021, the sale of PPP loans. Excluding PPP loans, loans were $7.0 billion at December 31, 2021, a decrease of 4.0% from the prior year-end.6

(Dollars in thousands)

December 31,
2021

September 30,
2021

June 30, 2021

December 31,
2020

Total loans, excluding loans held for sale (GAAP)

$

7,065,598

$

6,850,863

$

7,259,558

$

7,760,212

Less: PPP loans (non-GAAP)

(51,105

)

(67,311

)

(238,041

)

(454,771

)

Total loans, excluding loans held for sale and PPP loans (non-GAAP)

$

7,014,493

$

6,783,552

$

7,021,517

$

7,305,441

On a linked quarter basis, total loans (excluding loans held for sale and PPP loans) at December 31, 2021, increased by $230.9 million, or 3.4%, from the prior quarter end as originations and advances exceeded payoffs and paydowns7.

The yield on the loan portfolio was 4.45% for the fourth quarter of 2021 as compared to 4.50% for the fourth quarter of 2020. The adjusted loan yield, which excludes PPP, was 4.46% for the fourth quarter of 2020, down from 4.62%, for the fourth quarter of 2020 as higher yielding loans repriced, paid-off or paid-down, and the yield on recent originations and advances reflect current market rates.8

The yield on the loan portfolio was 4.62% for the year ended December 31, 2021 as compared to 4.66% for the year ended December 31, 2020.

Three Months Ended December 31,

(Dollars in thousands)

2021

2020

Average
Balance

Interest

Average
Yield/Rate

Average
Balance

Interest

Average
Yield/Rate

Loan Yields, Adjusted

Loan yield (GAAP)

$

6,890,414

$

77,283

4.45

%

$

7,896,324

$

89,356

4.50

%

Less: PPP interest income (non-GAAP)9

(56,298

)

(430

)

3.03

%

(456,415

)

(2,931

)

2.55

%

Adjusted loan yield (non-GAAP)

$

6,834,116

$

76,853

4.46

%

$

7,439,909

$

86,425

4.62

%

Year Ended December 31,

(Dollars in thousands)

2021

2020

Average
Balance

Interest

Average
Yield/Rate

Average
Balance

Interest

Average
Yield/Rate

Loan Yields, Adjusted

Loan yield (GAAP)

$

7,260,886

$

335,471

4.62

%

$

7,868,523

$

366,729

4.66

%

Less: PPP interest income (non-GAAP)9

(280,563

)

(17,004

)

6.06

%

(311,323

)

(8,076

)

2.59

%

Adjusted loan yield (non-GAAP)

$

6,980,323

$

318,467

4.56

%

$

7,557,200

$

358,653

4.75

%

  • Allowance for credit losses was 1.06% of total loans at December 31, 2021, and 1.41% a year ago. Adjusted to exclude PPP loans, which are fully government guaranteed, the allowance for credit losses was 1.07%, compared to 1.50% a year ago.10 The reduction in the allowance for credit losses as a percent of total loans for the year ended December 31, 2021 is due to a provision reversal of $20.8 million and net charge-offs of $13.3 million, which had a greater impact on the ratio than the decline in loans.

    Net charge-offs for the fourth quarter of 2021 were $1.2 million as compared to $5.5 million for fourth quarter of 2020. On an annualized basis, this was 0.07% of average loans (excluding loans held for sale) for the fourth quarter of 2021, as compared to 0.28% for the fourth quarter of 2020.

    Net charge-offs for 2021 were $13.3 million, which represented 0.18% of average loans, and for 2020 were $20.1 million, which represented 0.26% of average loans.

(Dollars in thousands)

December 31, 2021

September 30, 2021

December 31, 2020

Allowance for credit losses, adjusted

Allowance for credit losses (GAAP)

$

74,965

$

82,906

$

109,579

Total loans, excluding loans held for sale (GAAP)

$

7,065,598

$

6,850,863

$

7,760,212

Less: PPP loans (non-GAAP)

(51,105

)

(67,311

)

(454,771

)

Total loans excluding PPP loans (non-GAAP)

$

7,014,493

$

6,783,552

$

7,305,441

Allowance for credit losses to total loans (GAAP)

1.06

%

1.21

%

1.41

%

Allowance for credit losses to total loans excluding PPP loans (non-GAAP)

1.07

%

1.22

%

1.50

%

  • Total deposits were $10.0 billion at December 31, 2021, up 8.6% from a year ago. Most of the increase was in the second half of the year.

    While deposits are up significantly, the deposit mix and cost of funds remains favorable.

    • Average noninterest bearing deposits to average total deposits was 36.3% for the fourth quarter of 2021, as compared to 32.7% for the fourth quarter of 2020.

    • The cost of funds was 0.26% in the fourth quarter of 2021, as compared to 0.48% in the fourth quarter of 2020. A portion of the favorable decline is attributable to the redemption of $150 million of subordinated debt with a 5% rate on August 2, 2021.

  • Total shareholders’ equity was $1.35 billion at December 31, 2021, up 8.9% from a year ago. For the year ended December 31, 2021, increases in shareholders’ equity from earnings were partially offset by common dividends declared of $38.9 million and stock repurchases of $682 thousand.

    • Book value per share was $42.28, up 8.3% from a year ago.

    • Tangible book value per share was $38.9711, up 9.0% 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, supported by earnings. Capital ratios did experience some decline in the fourth quarter of 2021 as non-risk weighted cash was moved into risk-weighted securities and loans.

For the Company

December 31,
2021

September 30,
2021

December 31,
2020

Well
Capitalized
Minimum

Regulatory Ratios

Total Capital (to risk weighted assets)

16.15

%

16.59

%

17.04

%

10.00

%

Tier 1 Capital (to risk weighted assets)

15.02

%

15.33

%

13.49

%

8.00

%

Common Equity Tier 1 (to risk weighted assets)

15.02

%

15.33

%

13.49

%

6.50

%

Tier 1 Capital (to average assets)

10.19

%

10.58

%

10.31

%

5.00

%

Common Capital Ratios

Common Equity Ratio

11.40

%

11.49

%

11.16

%

%

Tangible Common Equity Ratio

10.60

%

10.68

%

10.31

%

%

Additional Commentary

  • Cost savings initiatives: The Bank continues to pursue its “branch light” strategy to improve efficiency while putting more emphasis on relationships and technology. After continued analysis of our branch structure, the Bank closed its Reston Branch in December 2021, as its lease is set to expire shortly. The annual cost savings in rent, common area maintenance and taxes is about $287 thousand.

  • Paycheck protection program: At December 31, 2021, the Bank had an outstanding balance of PPP loans of $51.1 million, down from $67.3 million at the prior quarter end. The remaining PPP loans were mostly originated in mid-2020.

  • COVID-19 and watch-rated loans: Beginning in the third quarter of 2020, all loans that received a second 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 six months of payments and sustained performance, they may be considered for removal as a watch-rated loan. Watch-rated loans at December 31, 2021 were $351 million (down from $509 million the prior quarter-end), of which $261 million (down from $415 million the prior quarter end) 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 $29.2 million, or 0.41%, of total loans at December 31, 2021, down from $31.2 million, or 0.46%, at the prior quarter end, and down from $60.9 million, or 0.79%, of total loans a year ago.

    • Nonperforming assets were $30.8 million, or 0.26%, of total assets at December 31, 2021, down from $36.4 million, or 0.31%, at the prior quarter end, and down from $65.9 million, or 0.59%, of total assets a year ago. At December 31, 2021, other real estate owned (“OREO”) was $1.6 million.

    • In November 2021, the bank sold one of its four OREO properties for a gain on $1.1 million. At December 31, 2021, the OREO properties had a carrying value of $1.6 million (comprising three properties), down from $5.1 million at the prior quarter end and down from $5.0 million a year ago.

  • Dividend: On November 17, 2021, the Board of Directors declared a quarterly cash dividend of $0.40 per common share payable on January 31, 2022 to shareholders of record on January 19, 2022.

  • Stock repurchase plan: The 2021 stock repurchase plan expired on December 31, 2021. Under this plan, the Company:

    • In the fourth quarter of 2021, repurchased 100 shares for $5,353 at an average cost of $53.53 per share.

    • In full-year 2021, repurchased 13,175 shares for $682,254 at an average cost of $51.78 per share.

      In December 2021, the Board of Directors approved a new stock repurchase plan for 2022 of up to 1,600,000 shares, or approximately 5% of shares outstanding.

Additional financial information: The financial information that follows provides more detail on the Company’s financial performance for the three months and year ended December 31, 2021 as compared to the three months and year ended December 31, 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, June 30, 2021 and September 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 seventeen 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 fourth quarter 2021 financial results on Thursday, January 20, 2022 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: 7254649, 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 February 3, 2022.

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 quarters ended March 31, 2021, June 30, 2021 and September 30, 2021, the Company’s upcoming Quarterly Report on Form 10-K for the year ended December 31, 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
December 31,

Year Ended
December 31,

2021

2020

2021

2020

Income Statements:

Total interest income

$

86,230

$

94,680

$

364,496

$

389,986

Total interest expense

8,044

13,263

39,982

68,424

Net interest income

78,186

81,417

324,514

321,562

Provision for credit losses

(6,412

)

4,917

(20,821

)

45,571

Provision for Unfunded Commitments

(632

)

406

(1,119

)

1,380

Net interest income after provision for credit losses

85,230

76,094

346,454

274,611

Noninterest income (before investment gain)

9,668

9,722

37,421

43,881

Gain (loss) on sale of investment securities

906

165

2,964

1,815

Total noninterest income

10,574

9,887

40,385

45,696

Total noninterest expense

39,309

35,008

149,165

144,162

Income before income tax expense

56,495

50,973

237,674

176,145

Income tax expense

14,875

12,081

60,983

43,928

Net income

$

41,620

$

38,892

$

176,691

$

132,217

Per Share Data:

Earnings per weighted average common share, basic

$

1.30

$

1.21

$

5.53

$

4.09

Earnings per weighted average common share, diluted

$

1.30

$

1.21

$

5.52

$

4.09

Weighted average common shares outstanding, basic

31,950,320

32,037,099

31,935,824

32,334,201

Weighted average common shares outstanding, diluted

32,030,998

32,075,175

32,003,090

32,383,021

Actual shares outstanding at period end

31,950,092

31,779,663

31,950,092

31,779,663

Book value per common share at period end

$

42.28

$

39.05

$

42.28

$

39.05

Tangible book value per common share at period end (1)

$

38.97

$

35.74

$

38.97

$

35.74

Dividend per common share

$

0.40

$

0.22

$

1.40

$

0.88

Performance Ratios (annualized):

Return on average assets

1.32

%

1.39

%

1.49

%

1.28

%

Return on average common equity

12.30

%

12.53

%

13.54

%

10.98

%

Return on average tangible common equity

13.35

%

13.69

%

14.73

%

12.03

%

Net interest margin

2.55

%

2.98

%

2.81

%

3.19

%

Efficiency ratio (2)

44.29

%

38.34

%

40.88

%

39.25

%

Other Ratios:

Allowance for credit losses to total loans (3)

1.06

%

1.41

%

1.06

%

1.41

%

Allowance for credit losses to total nonperforming loans

256.66

%

179.80

%

256.66

%

179.80

%

Nonperforming loans to total loans (3)

0.41

%

0.79

%

0.41

%

0.79

%

Nonperforming assets to total assets

0.26

%

0.59

%

0.26

%

0.59

%

Net charge-offs (annualized) to average loans (3)

0.07

%

0.28

%

0.18

%

0.26

%

Common equity to total assets

11.40

%

11.16

%

11.40

%

11.16

%

Tier 1 capital (to average assets)

10.19

%

10.31

%

10.19

%

10.31

%

Total capital (to risk weighted assets)

16.15

%

17.04

%

16.15

%

17.04

%

Common equity tier 1 capital (to risk weighted assets)

15.02

%

13.48

%

15.02

%

13.48

%

Tangible common equity ratio (1)

10.60

%

10.31

%

10.60

%

10.31

%

(continued)

Three Months Ended
December 31,

Year Ended
December 31,

2021

2020

2021

2020

Loan Balances – Period End (in thousands):

Commercial and Industrial

$

1,354,317

$

1,437,433

$

1,354,317

$

1,437,433

PPP loans

$

51,105

$

454,771

$

51,105

$

454,771

Commercial real estate – income producing

$

3,385,299

$

3,687,000

$

3,385,299

$

3,687,000

Commercial real estate – owner occupied

$

1,087,776

$

997,694

$

1,087,776

$

997,694

1-4 Family mortgage

$

73,966

$

76,592

$

73,966

$

76,592

Construction – commercial and residential

$

896,319

$

873,261

$

896,319

$

873,261

Construction – C&I (owner occupied)

$

159,579

$

158,905

$

159,579

$

158,905

Home equity

$

55,811

$

73,167

$

55,811

$

73,167

Other consumer

$

1,428

$

1,389

$

1,428

$

1,389

Average Balances (in thousands):

Total assets

$

12,538,596

$

11,141,826

$

11,836,735

$

10,349,963

Total earning assets

$

12,180,872

$

10,872,259

$

11,516,495

$

10,080,239

Total loans

$

6,890,414

$

7,896,324

$

7,260,886

$

7,868,523

Total deposits

$

10,670,205

$

9,227,733

$

9,940,577

$

8,502,022

Total borrowings

$

402,393

$

596,307

$

489,857

$

569,446

Total shareholders’ equity

$

1,342,525

$

1,235,174

$

1,304,902

$

1,204,341

(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
December 31,

Year Ended
December 31,

2021

2020

2021

2020

Common shareholders’ equity

$

1,350,775

$

1,240,892

Less: Intangible assets

(105,793

)

(105,114

)

Tangible common equity

$

1,244,982

$

1,135,778

Book value per common share

$

42.28

$

39.05

Less: Intangible book value per common share

(3.31

)

(3.31

)

Tangible book value per common share

$

38.97

$

35.74

Total assets

$

11,847,310

$

11,117,802

Less: Intangible assets

(105,793

)

(105,114

)

Tangible assets

$

11,741,517

$

11,012,688

Tangible common equity ratio

10.60

%

10.31

%

Average common shareholders’ equity

$

1,342,525

$

1,235,173

$

1,304,902

$

1,204,341

Less: Average intangible assets

(105,565

)

(105,131

)

(105,256

)

(104,903

)

Average tangible common equity

$

1,236,960

$

1,130,042

$

1,199,646

$

1,099,438

Net Income Available to Common Shareholders

$

41,620

$

38,892

$

176,691

$

132,217

Annualized Return on Average Tangible Common Equity

13.35

%

13.69

%

14.73

%

12.03

%

Net interest income (GAAP)

$

78,186

$

81,417

$

324,514

$

321,562

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

Adjusted net interest income (non-GAAP)

$

78,186

$

81,417

$

321,160

$

321,562

Noninterest income (GAAP)

$

10,574

$

9,887

$

40,385

$

45,696

Adjusted operating revenue (non-GAAP)

$

88,760

$

91,304

$

361,545

$

367,258

Noninterest expense (GAAP)

$

39,309

$

35,008

$

149,165

$

144,162

Adjusted efficiency ratio (non-GAAP)

44.29

%

38.34

%

41.26

%

39.25

%

Eagle Bancorp, Inc.

Consolidated Balance Sheets (Unaudited)

(Dollars in thousands, except per share data)

Assets

December 31,
2021

September 30,
2021

December 31,
2020

Cash and due from banks

$

12,886

$

8,806

$

8,435

Federal funds sold

20,391

38,934

28,200

Interest bearing deposits with banks and other short-term investments

1,680,945

2,452,744

1,752,420

Investment securities available for sale (amortized cost of $2,642,665, $1,789,416, and $1,129,057, and allowance for credit losses of $620, $256 and $167 as of December 31, 2021, September 30, 2021 and December 31, 2020, respectively

2,623,408

1,786,659

1,151,083

Federal Reserve and Federal Home Loan Bank stock

34,153

34,093

40,104

Loans held for sale

47,218

53,413

88,205

Loans

7,065,598

6,850,863

7,760,212

Less allowance for credit losses

(74,965

)

(82,906

)

(109,579

)

Loans, net

6,990,633

6,767,957

7,650,633

Premises and equipment, net

14,557

15,293

13,553

Operating lease right-of-use assets

30,555

30,080

25,237

Deferred income taxes

43,174

44,733

38,571

Bank owned life insurance

108,789

108,158

76,729

Intangible assets, net

105,793

105,103

105,114

Other real estate owned

1,635

5,135

4,987

Other assets

133,173

134,209

134,531

Total Assets

$

11,847,310

$

11,585,317

$

11,117,802

Liabilities and Shareholders’ Equity

Deposits:

Noninterest bearing demand

$

3,277,956

$

2,836,418

$

2,809,334

Interest bearing transaction

777,255

812,410

756,923

Savings and money market

5,197,247

5,268,157

4,645,186

Time, $100,000 or more

327,651

347,937

546,173

Other time

401,431

403,566

431,587

Total deposits

9,981,540

9,668,488

9,189,203

Customer repurchase agreements

23,918

29,401

26,726

Other short-term borrowings

300,000

300,000

300,000

Long-term borrowings

69,670

69,639

268,077

Operating lease liabilities

35,501

34,345

28,022

Reserve for unfunded commitments

4,379

5,011

5,498

Other liabilities

81,527

146,736

59,384

Total liabilities

10,496,535

10,253,620

9,876,910

Shareholders’ Equity

Common stock, par value $.01 per share; shares authorized 100,000,000, shares issued and outstanding 31,950,092, 31,947,458, and 31,779,663 respectively

316

316

315

Additional paid in capital

434,640

432,479

427,016

Retained earnings

930,061

901,218

798,061

Accumulated other comprehensive income (loss)

(14,242

)

(2,316

)

15,500

Total Shareholders’ Equity

1,350,775

1,331,697

1,240,892

Total Liabilities and Shareholders’ Equity

$

11,847,310

$

11,585,317

$

11,117,802

Eagle Bancorp, Inc.

Consolidated Statements of Income (Unaudited)

(Dollars in thousands, except per share data)

Three Months Ended
December 31,

Year Ended
December 31,

Interest Income

2021

2020

2021

2020

Interest and fees on loans

$

77,625

$

89,875

$

337,749

$

368,854

Interest and dividends on investment securities

7,327

4,301

23,205

18,440

Interest on balances with other banks and short-term investments

1,272

497

3,511

2,601

Interest on federal funds sold

6…

Source

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