Finance

Eagle Bancorp Profit Rebounds on Lower Credit Provision

The Tip Desk · November 8, 2026 · 4 min read

Net income was $24.2 million, or $0.79 a share, as the provision fell to $2.8 million and the net interest margin reached 2.60%.

Eagle Bancorp, Inc. (EGBN), the Bethesda-based holding company for EagleBank, reported net income of $24.2 million, or $0.79 a share, for the third quarter ended September 30, 2026, compared with $6.9 million, or $0.23 a share, in the second quarter. The $17.3 million increase was primarily due to an $18.6 million lower provision for credit losses.

The provision fell to $2.8 million from $21.4 million, reversing the prior quarter’s $8.1 million increase from $13.4 million. The company said the decrease reflected the adequacy of reserves after efforts to resolve problem loan assets. Annualized net charge-offs moderated to 0.25% from 2.78%, after the second-quarter rate had risen from 1.46% in the first quarter, as disposition activity on classified assets declined.

Pre-provision net revenue declined to $23.8 million from $29.1 million, reversing the prior quarter’s $1.4 million improvement from $27.7 million. Net interest income fell $1.0 million to $61.3 million, a second consecutive quarterly decline after a $1.3 million drop in the second quarter. Noninterest income decreased $1.2 million to $9.6 million, primarily because there were no gains on sale of loans versus a $2.3 million gain in the prior quarter, partially offset by $1.1 million higher swap fee income. Noninterest expense increased $3.1 million to $47.1 million, reversing the prior quarter’s $4.7 million decline, as salaries and employee benefits rose $4.9 million on $1.5 million of accelerated stock awards, $1.5 million of higher headcount salaries, and $1.3 million of annual incentives, partially offset by a $2.1 million reduction in FDIC insurance expense.

The net interest margin expanded 8 basis points to 2.60% from 2.52%, a larger sequential expansion than the 5 basis points in the prior quarter, as reduced brokered-deposit usage lowered cost of funds, partially offset by lower interest income from declining loan balances. Average loans declined to $6.52 billion from $6.89 billion. Period-end total loans including held for sale were $6.6 billion, down 1.4% from the prior quarter-end, driven by declines in income-producing real estate loans, partially offset by purchases of residential mortgage real estate loans. Total deposits were $8.0 billion, down $151.1 million, or 1.8%, from the prior quarter-end, with brokered deposits down $348.0 million.

Non-performing assets increased $52.9 million to $166.0 million, or 1.75% of assets, from $113.1 million, or 1.17%, reversing the prior quarter’s $17.7 million decline. During the quarter, non-performing loan inflows totaled $73.7 million, 76.0% of which resulted from a single loan migration. Reductions of $18.8 million primarily reflected pay-offs and underlying collateral liquidations. Substandard and special mention loans including held for sale fell to $648.4 million from $759.6 million. Performing office coverage dropped to 4.86% from 7.22% as the CRE office portfolio shrank and asset-quality indicators improved. The CRE concentration ratio declined to 245.8% from 267.6%; ADC concentration fell to 62.2% from 66.2%. The allowance for credit losses was 1.84% of total loans held for investment.

Total C&I loans including owner-occupied increased $536.5 million, or 19.54%, year-over-year, and period-end C&I deposits grew $111.1 million, or 6.43%. The company said the deposit growth reflected continued development of banking relationships.

The common equity tier 1 capital ratio rose to 14.99% from 14.58%; the tangible common equity ratio was 12.24%. Total shareholders’ equity was $1.2 billion, up 0.7% from the prior quarter-end. Book value and tangible book value per share were $38.00. The company declared a $0.01 per share cash dividend, payable November 17, 2026.

President and Chief Executive Officer Steve Curley said criticized and classified loans declined, net charge-offs moderated, funding costs improved, and total commercial deposits grew sequentially. He said the increase in nonperforming assets, driven primarily by one significant relationship, means asset-quality work is not complete. The company said it established a commercial banking presence in Baltimore, added leaders to its commercial real estate business, and appointed a new Chief People Officer.

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