BETHESDA, Md. - Eagle Bancorp , Inc. (NASDAQ: NASDAQ:EGBN), the parent company of EagleBank, disclosed its unaudited financial results for the fourth quarter ending December 31, 2024. The Bethesda-based bank, currently valued at $744.47 million in market capitalization, reported a net income of $15.3 million or $0.50 per diluted share, a decrease from the $21.8 million or $0.72 per diluted share in the previous quarter. The company also announced a forthcoming cash dividend of $0.165 per share, payable on February 21, 2025, to shareholders on record as of February 7, 2025. According to InvestingPro analysis, the stock appears undervalued at its current price of $24.58, trading at just 0.61 times book value.
The decline in net income from the third quarter was primarily due to a $2.9 million drop in noninterest income, a $2.0 million increase in provision expense, a $1.0 million decrease in net interest income, and a $0.9 million rise in noninterest expenses. Susan G. Riel, President and CEO, acknowledged the past year’s significant changes and progress, including new senior management members and steps to reduce uncertainties. However, she noted that asset quality fell short of expectations, and valuation risk in the office portfolio remains a concern. InvestingPro data reveals that while the company faces current profitability challenges, analysts predict a return to profitability this year. For detailed analysis of Eagle Bancorp’s financial health and future prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
Eric R. Newell, the CFO, highlighted the repayment of $1 billion of Bank Term Funding Program debt and anticipated further benefits to funding costs in the first half of 2025. Despite an increase in non-accruals due to a specific $74.9 million commercial real estate office loan, total classified and criticized loans declined for the first time in recent quarters.
The bank’s net interest margin decreased to 2.29% in the fourth quarter from 2.37% in the previous quarter. The common equity tier 1 capital rose to 14.6%, and the tangible common equity ratio exceeded 10%. Total (EPA:TTEF) loans at the end of the quarter were $7.9 billion, a slight decrease from the previous quarter, while total deposits increased by 6.9% to $9.1 billion.
Eagle Bancorp’s asset quality showed an allowance for credit losses at 1.44% of total loans, up from 1.40% at the end of the prior quarter. Nonperforming assets increased to $211.5 million, constituting 1.90% of total assets compared to 1.22% as of September 30, 2024.
This report is based on a press release statement from Eagle Bancorp, Inc.
In other recent news, Eagle Bancorp Inc. posted a notable recovery in its third-quarter earnings, reporting a net income of $21.8 million, or $0.72 per diluted share. This followed the repayment of $70 million in subordinated debt and the raising of $77.7 million in unsecured senior debt. The bank also reported funded loan originations for the quarter totaling $91.2 million at a weighted average rate of 7.11%.
Piper Sandler responded to these developments by increasing the price target on shares of Eagle Bancorp from $27.00 to $29.00, while maintaining a Neutral rating. The firm cited the absence of major surprises in credit trends and no additional issues or losses related to office properties as contributing factors to this decision.
Looking ahead, Eagle Bancorp anticipates loan growth between 2% and 8% in 2025, with a strategic focus on improving the funding mix. The management aims to reduce CRE concentration closer to FDIC guidelines and plans to grow commercial and industrial lending and deposit generation.
Analysts from various firms have noted that the bank’s management is strategically focusing on asset quality, risk management, and future growth initiatives. Despite the current economic climate, Eagle Bancorp Inc. has demonstrated resilience in its financial performance, with over $4.5 billion available, indicating a strong liquidity position. These are among the recent developments at Eagle Bancorp.
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