GlobeNewswire Inc | Jul 22, 2020 04:15PM EDT

July 22, 2020

BETHESDA, Md., July 22, 2020 (GLOBE NEWSWIRE) -- Eagle Bancorp, Inc. (the Company) (NASDAQ: EGBN), the parent company of EagleBank (the Bank), today announced quarterly net income of $28.9 million for the three months ended June 30, 2020, a 23% decrease, as compared to $37.2 million net income for the three months ended June 30, 2019. Net income per basic and diluted common share for the three months ended June 30, 2020 was $0.90 compared to $1.08 for the same period in 2019. For the six months ended June 30, 2020, the Companys net income was $52.0 million, a 27% decrease from the $71.0 million of net income for the same period in 2019. Net income per basic common share for the six months ended June 30, 2020 was $1.60 compared to $2.06 for the same period in 2019. Net income per diluted common share for the six months ended June 30, 2020 was $1.60 compared to $2.05 for the same period in 2019.

Summary Financial Analysis

While the country at large experienced a very challenging environment in the second quarter of 2020 due to the COVID-19 pandemics extensive negative impacts to businesses and the economy in general, the banking industry faced significant related credit and interest rate challenges. In spite of these second quarter headwinds, we believe our Company has managed well, both in terms of our employee base staying healthy as well as staying in close contact with our many business relationships. As a result, we are pleased to report another quarter of overall favorable earnings, highlighted by continued growth in average loans and deposits, favorable operating leverage, and improved noninterest income, noted Susan G. Riel, President and Chief Executive Officer of Eagle Bancorp, Inc. Ms. Riel continued, The Companys assets ended the quarter at $9.8 billion, representing 13% growth over the second quarter of 2019. Second quarter 2020 earnings resulted in a return on average assets (ROAA) of 1.12%, return on average common equity (ROACE) of 9.84%, and a return on average tangible common equity (ROATCE) of 10.80%. A reconciliation of GAAP to non-GAAP financial measures is provided in the tables that accompany this document.

The Companys performance in the second quarter of 2020 as compared to the second quarter of 2019 was highlighted by growth in average total loans of 10%, growth in average total deposits of 23%, 7% growth in total revenue to $93.9 million, and a 5% increase in noninterest expenses, further improving our operating leverage and resulting in an improved efficiency ratio of 37.18% for the second quarter of 2020 versus 38.04% for the second quarter of 2019. The improved efficiency was due to strong noninterest income performance in the quarter. Additionally, the ratio of non-performing loans to total loans, while elevated in the second quarter 2020 over the first quarter, remained at reasonably normal levels at 0.74% given the credit concerns arising from the impact of COVID-19 related shutdowns. The evolution of the COVID-19 pandemic and related containment and relief measures will determine how the impacts will be reflected in our loan portfolio, including these measures, over time. Annualized net charge-offs to average loans for the second quarter 2020 was also elevated at 0.36% compared to 0.12% for the first quarter of 2020, primarily resulting from one large commercial loan relationship in the personal services industry. Ms. Riel noted, The Company continues to focus on changes in average loan and deposit balances quarter over quarter and year over year since those measures more directly impact income statement results. Comparing those balances in the second quarter of 2020 versus the first quarter of 2020, average loan growth was 4.8% and average deposits increased by 10.2%. Ms. Riel added, Approximately 90% of the average loan growth in the second quarter of 2020 over first quarter of 2020 was due to the Paycheck Protection Program (PPP) loans, as authorized by the Coronavirus Aid Relief and Economic Security Act (the CARES Act) passed by Congress in March 2020. At June 30, 2020, the Bank had loans outstanding of $456 million to just over 1,400 businesses under the PPP program.

In the second quarter 2020, as average U.S. Treasury rates in the two to five year area declined significantly by about 80-90 basis points and the average yield curve remained fairly flat, we experienced 23 basis points of net interest margin compression (from 3.49% to 3.26%) as compared to the first quarter of 2020. In addition, our cost of funds declined 41 basis points (from 1.06% to 0.65%), while the yield on earning assets declined by 64 basis points (from 4.55% to 3.91%). Substantially higher average liquidity in the second quarter compared to the first quarter of 2020 contributed to the net interest margin compression as average deposit growth outweighed average loan growth. Average liquidity for the second quarter was $1.1 billion versus $605 million for the first quarter of 2020. The yield on our substantial level of variable rate loans was negatively impacted by the much lower interest rate environment in the second quarter of 2020, including a 105 basis point decline in the average one-month LIBOR rate. A substantial portion of the variable rate loans portfolio has interest rate floors which cushioned the decline in loan yields.

Ms. Riel added, In the second quarter of 2020, period end total loan growth was 2.3% from March 31, 2020, while total deposits declined 2.5% from March 31, 2020. Excluding PPP loan balances at June 30, 2020 total loans decreased $276 million, or 3.5%, during the quarter. A portion of this decrease at June 30, 2020 relative to March 31, 2020 was the result of repayments on line of credit advances taken in an abundance of caution given the uncertainty surrounding the COVID-19 pandemic in the first quarter. While average deposits showed good growth throughout the second quarter, deposit balances declined sharply near quarter end, driven in part by clients attempting to capture favorable stock market performance in the latter half of June. New loans closed in the second quarter of 2020 were below average levels due substantially to the COVID-19 environment, while loan payoffs were close to average levels. Average unfunded loan commitments have remained stable over the last six quarters at approximately $2.2 billion. The Company continues to emphasize achieving core deposit growth and we continue to seek well-structured new loan opportunities. The mix of noninterest deposits to total deposits remained favorable and averaged 30% in the second quarter of 2020, consistent with the average in the second quarter of 2019.

The net interest margin was 3.26% for the second quarter of 2020, down 65 basis points from the second quarter of 2019. Ms. Riel noted, In addition to the current sharply lower interest rate environment as compared to 2019, there has been a lesser focus on higher risk and higher yielding construction lending and more attention towards strong commercial real estate credits secured by stabilized income producing properties. The yield on our loan portfolio was 4.63% for the second quarter of 2020 as compared to 5.61% for the second quarter of 2019 and 5.07% for the first quarter of 2020. The addition of the PPP loans at an average yield of 2.91% for the quarter negatively impacted the overall yield of the total loan portfolio by approximately seven basis points. The cost of funds was 0.65% for the second quarter of 2020 as compared to 1.30% for the second quarter of 2019 and 1.06% for the first quarter of 2020. Importantly, even considering the decline in the net interest margin, the Companys net interest income was stable in the second quarter of 2020 over 2019 as the Company has continued its pattern of average balance sheet growth while maintaining emphasis on disciplined pricing for both new loans and funding sources in the face of competitive pressures.

For the first six months of 2020 as compared to the first six months in 2019, average total loans increased 10% and average total deposits increased by 17%.

Total revenue (net interest income plus noninterest income) for the second quarter of 2020 was $93.9 million, or 7% above the $87.7 million of total revenue earned for the second quarter of 2019 and was 10% higher than the $85.2 million of revenue earned in the first quarter of 2020. For the six month periods ended June 30, 2020, total revenue was $179.1 million for 2020 as compared to $175.0 million in 2019, a 2% increase.

The primary driver of the Companys revenue growth for the second quarter of 2020 as compared to the second quarter of 2019 was its noninterest income growth of 96% ($12.5 million versus $6.4 million), due substantially to revenue from our Federal Housing Administration (FHA) Multifamily business unit and increased originations and sales of residential mortgage loans and the resulting gains on the sale of these loans. While we are encouraged by the pipeline and current quarter contribution of the FHA Multifamily business, revenue from this business can be uneven quarter to quarter.

Asset quality measures remained solid at June 30, 2020. Net charge-offs (annualized) were 0.36% of average loans for the second quarter of 2020 (attributable mostly to a single credit), as compared to 0.08% of average loans for the second quarter of 2019. At June 30, 2020, the Companys nonperforming loans amounted to $59.0 million (0.74% of total loans) as compared to $37.4 million (0.51% of total loans) at June 30, 2019, and $48.7 million (0.65% of total loans) at December 31, 2019. Nonperforming assets amounted to $67.2 million (0.69% of total assets) at June 30, 2020 compared to $38.8 million (0.45% of total assets) at June 30, 2019 and $50.2 million (0.56% of total assets) at December 31, 2019. The evolution of the COVID-19 pandemic and related containment and relief measures will determine how the impacts will be reflected in our loan portfolio, including these measures, over time.

As discussed in the first quarter 2020 earnings release, the new accounting current expected credit loss (CECL) standard (ASC 326) was adopted by the Company in the first quarter of 2020. CECL requires a significant change in how banks assess credit risk and establish reserves for possible future loan losses. Two significant changes under the new standard are the requirement to establish loan loss reserves at loan origination considering the entire life of the loan and to estimate lifetime loss reserves by modeling a forecast that is impacted by economic assumptions.

Under the CECL standard and based on the January 1, 2020 effective date, the Company made an initial adjustment to the allowance for credit losses of $10.6 million along with $4.1 million to the reserve for unfunded commitments. This adjustment increased the ratio of the allowance to total loans from 0.98% at December 31, 2019 to 1.12% at January 1, 2020. Based on our ongoing risk analysis and modeling through March 31, 2020, under the CECL allowance methodology, the Company further increased the allowance for loan losses to 1.23%, which included the assessment of COVID-19 risks as of March 31, 2020. Based on our ongoing risk analysis and modeling through June 30, 2020, under the CECL allowance methodology, the Company further increased the allowance for loan losses to 1.36% of total loans, which reflects COVID-19 risks assessments and an updated unemployment forecast. The June unemployment forecast wasgenerally higherthan the March 2020 forecast. Management believes to the best of its knowledge that its allowance for credit losses, at 1.36% of total loans (excluding loans held for sale) at June 30, 2020, is adequate to absorb probable credit losses within the loan portfolio at that date. The dilution impact of the PPP loans was approximately eight basis points on the allowance for credit losses as a percentage of total loans as of June 30, 2020. As noted above and as discussed further below, uncertainty remains about the duration of the COVID-19 pandemic and its impacts, and although further significant negative impact may occur, the Company continues to monitor its loan portfolio and borrowers. Under the prior accounting standard known as the incurred loss model, the allowance for credit losses was 0.98% at both June 30, 2019 and December 31, 2019. The allowance for credit losses of $108.8 million at June 30, 2020 represented 185% of nonperforming loans at that date, as compared to a coverage ratio of 193% at June 30, 2019 and 151% at December 31, 2019.

The COVID-19 pandemic, which began in the U.S. in the first quarter of 2020 raised significant concerns in the outlook over bank credit quality, particularly in certain industries, as COVID-19 resulted in the closure or restriction of businesses across the region as stay-at-home orders were given in the various municipalities in which the Company operates. Among those industries most clearly impacted is the Accommodation and Food Service industry. Exposure to this industry (as shown in the chart below) represents 10.5% of the Banks loan portfolio as of June 30, 2020. Management is closely monitoring borrowers and remains attentive to signs of deterioration in borrowers financial conditions and is proactively taking steps to mitigate risk as appropriate, including placing loans on nonaccrual status. There remains uncertainty regarding the regions overall economic outlook given the lack of clarity over how long COVID-19 will continue to impact our region. Management has been working with customers on payment deferrals (generally 90 days) to assist client companies in managing through this crisis. These deferrals amounted to 708 notes and $1.63 billion at June 30, 2020 (20% of total loans) as compared to 32 notes representing $45 million in outstanding exposure as of March 31, 2020. Some of these deferrals may not have met the criteria for treatment under U.S. generally accepted accounting principles (GAAP) as troubled debt restructurings (TDR). Additionally, none of the deferrals are reflected in the Companys asset quality measures (i.e. non-performing loans) due to the provision of the CARES Act that permits U.S. financial institutions to temporarily suspend the U.S. GAAP requirements to treat such short-term loan modifications as TDR. These provisions have also been confirmed by interagency guidance issued by the federal banking agencies and confirmed with staff members of the Financial Accounting Standards Board.

The Companys productivity continued to be favorable in the second quarter, noted Ms. Riel. The efficiency ratio of 37.18% reflects managements ongoing efforts to maintain superior operating leverage. The annualized level of noninterest expenses as a percentage of average assets has declined to 1.36% in the second quarter of 2020 as compared to 1.55% in the second quarter of 2019. The Company continues to make investments in its infrastructure including IT systems and resources and online client services. Our goal is to maintain strong operating performance without inhibiting growth or negatively impacting our ability to service our customers. Ms. Riel further noted, We will continue to maintain strict oversight of expenses, while retaining an infrastructure to remain competitive, support our growth initiatives, and proactively enhance our risk management systems as we continue to grow.

COVID-19 Discussion Matters

Employee Matters:

Management continues to acknowledge the flexibility and engagement of our hard working employees during this crisis. As the COVID-19 pandemic has unfolded, the majority of our workforce transitioned quickly to remote access operations. Our information technology infrastructure continues to support our organization in working predominantly remotely as we continue to service the needs of our clients. While we continue to strive to have the majority of our employees operating from home, there are some functions that require a physical presence at our banking offices. While there has been no decision at this time to return more broadly to the workplace, we have established general guidelines for returning that include having employees maintain safe distances, staggered work schedules to limit the number of employees in a single location, more frequent cleaning of our facilities and other practices encouraging a safe working environment during this challenging time. Management remains connected to employees through periodic company-wide telephonic meetings and regular notifications and updates through both email and the Companys intranet.

Branch Hours:

Branch hours and availability which were modified in consideration of the safety of our employees and clients, were reinstated in the second quarter of 2020. All branches have been opened with advanced safety measures and are available during regular business hours to meet the needs of our clients.

The CARES Act:

Enacted March 27, 2020 the CARES Act included several provisions designed to provide relief to individuals and businesses as well as the banking system. Among the more significant components of this legislation for our Company was the creation of the $350 billion PPP, which was further expanded by Congress in the second quarter of 2020 to a total of $659 billion. Loans made under the PPP are fully guaranteed as to principal and interest by the Small Business Administration (SBA), whose guarantee is backed by the full faith and credit of the U.S. Government. PPP-covered loans also afford borrowers forgiveness up to the principal amount of the PPP-covered loan if the proceeds are used to retain workers and maintain payroll or make mortgage interest, lease and utility payments. The SBA will reimburse PPP lenders for any amount of a PPP-covered loan that is forgiven.

As an SBA preferred lender, the Bank actively participated in the PPP program, and at June 30, 2020 had an outstanding balance of PPP loans of $456 million to just over 1,400 businesses. The average rate on these loans is 1.00% and the average yield, which includes fee amortization, was 2.91% for the second quarter of 2020. The lower loan yield on these PPP loans negatively affected second quarter loan portfolio yields by seven basis points.

Loan Portfolio Exposures:

Industry areas of potential concern within the Loan Portfolio are presented below as of June 30, 2020:

Industry Principal Balance (in 000?s) % of Loan PortfolioAccommodation & Food Services $840,961^1 10.5%Retail Trade 106,544^2 1.3%

1 Includes $82,154 of PPP loans.2 Includes $13,498 of PPP loans. Concerns over exposures to the Accommodation and Food Service industry and retail are the most immediate at this time. Accommodation and Food Service exposure represents 10.5% of the Banks loan portfolio as of June 30, 2020 among 485 customers. Retail trade exposure represents 1.3% of the Banks loan portfolio. The Bank has ongoing extensive outreach to these customers and is assisting where necessary with PPP loans and payment deferrals or interest only periods in the short term while customers work with the Bank to develop longer term stabilization strategies as the landscape of the COVID-19 pandemic evolves. The uncertain duration and severity of the pandemic will likely impact future credit challenges in these areas.

The table below is collateral driven and shows exposures on loans secured by commercial real estate (CRE) by property type as of June 30, 2020. This table excludes loans disclosed in the industry table above.

Property Type Principal Balance (in 000?s) % of Loan PortfolioRestaurant $31,364 0.4%Hotel 35,815 0.4%Retail 405,918 5.1%

Although not evidenced at June 30, 2020, it is anticipated that some portion of the CRE loans secured by the above property types could be impacted by the tenancies associated with impacted industries. The Bank is working with CRE investor borrowers and monitoring rent collections as part of our portfolio management process.

Balance Sheet Analysis

Total assets at June 30, 2020 were $9.80 billion, a 13% increase as compared to $8.67 billion at June 30, 2019, and a 9% increase as compared to $8.99 billion at December 31, 2019. Total loans (excluding loans held for sale) were $8.02 billion at June 30, 2020, a 9% increase as compared to $7.39 billion at June 30, 2019, and a 6% increase as compared to $7.55 billion at December 31, 2019. Loans held for sale amounted to $68.4 million at June 30, 2020 as compared to $37.5 million at June 30, 2019, an 82% increase, and $56.7 million at December 31, 2019, a 21% increase. The investment portfolio totaled $772.4 million at June 30, 2020, a 4% increase from the $745.3 million balance at June 30, 2019. As compared to December 31, 2019, the investment portfolio at June 30, 2020 decreased by $71.0 million, or 8%.

Total deposits at June 30, 2020 were $7.94 billion, compared to deposits of $6.95 billion at June 30, 2019, a 14% increase, and a 10% increase compared to deposits of $7.22 billion at December 31, 2019. Total borrowed funds (excluding customer repurchase agreements) were $567.9 million at June 30, 2020, as compared to $442.5 million at June 30, 2019 and $467.7 million at December 31, 2019. We continue to work on expanding the breadth and depth of our existing relationships while we pursue building new relationships.

Total shareholders equity increased less than 1% to $1.19 billion at June 30, 2020 compared to $1.18 billion at June 30, 2019, and was stable as compared to $1.19 billion at December 31, 2019. The slight increase in shareholders equity at June 30, 2020 compared to the same period in 2019 was primarily the result of growth in retained earnings, $10.9 million in unrealized gains on AFS securities, and $7.4 million in additional paid in capital attributable to share based compensation, effectively offset by $99 million in stock repurchases, dividends declared of $28.9 million, and the day one CECL entry of $10.9 million net of taxes.

The Companys capital ratios remain substantially in excess of regulatory minimum and buffer requirements, with a total risk based capital ratio of 16.33% at June 30, 2020, as compared to 16.36% at June 30, 2019, and 16.20% at December 31, 2019, both common equity tier 1 (CET1) risk based capital and tier 1 risk based capital ratios of 12.79% at June 30, 2020, as compared to 12.87% at June 30, 2019, and 12.87% at December 31, 2019, a tier 1 leverage ratio of 10.63% at June 30, 2020, as compared to 12.66% at June 30, 2019, and 11.62% at December 31, 2019. The common equity ratio was 12.12% at June 30, 2020, compared to 13.66% at June 30, 2019 and 13.25% at December 31, 2019. Book value per share was $36.86 at June 30, 2020, a 7% increase over $34.30 at June 30, 2019. In addition, the tangible common equity ratio was 11.17% at June 30, 2020, compared to 12.60% at June 30, 2019 and 12.22% at December 31, 2019. Tangible book value per share was $33.62 at June 30, 2020, an 8% increase over $31.25 at June 30, 2019. A reconciliation of GAAP to non-GAAP financial measures is provided in the tables that accompany this document.

Detail Income Statement Analysis (2Q2020 versus 2Q2019)

Net interest income was $81.4 million for the three months ended June 30, 2020 and $81.3 million for the same period in 2019. The lack of growth was primarily the result of lesser average yields on loans (4.63% versus 5.61%) offset by growth in average earning assets of 21%. The net interest margin was 3.26% for the three months ended June 30, 2020, as compared to 3.91% for the three months ended June 30, 2019. The Company believes that its disciplined approach to managing the loan portfolio yield to 4.63% for the first three months of 2020 (as compared to 5.61% for the same period in 2019) has been a significant factor in its overall profitability.

The provision for credit losses was $19.7 million for the three months ended June 30, 2020 as compared to $3.6 million for the three months ended June 30, 2019. The higher provisioning in the second quarter of 2020, as compared to the second quarter of 2019, is primarily due to the implementation of the CECL accounting standard for loan loss allowances, including COVID-19 impacts and higher net charge-offs primarily related to COVID-19 effects. Net charge-offs of $7.1 million in the second quarter of 2020 represented an annualized 0.36% of average loans, excluding loans held for sale, as compared to $1.5 million, or an annualized 0.08% of average loans, excluding loans held for sale, in the second quarter of 2019. Net charge-offs in the second quarter of 2020 were attributable primarily to one commercial relationship to a personal services company that ceased business operations as a result of COVID-19.

Noninterest income for the three months ended June 30, 2020 increased to $12.5 million from $6.4 million for the three months ended June 30, 2019, a 96% increase. Service charges on deposits for the three months ended June 30, 2020 decreased to $942 thousand from $1.6 million for the three months ended June 30, 2019, a 41% decrease, due to lesser insufficient funds fees. Gain on sale of loans for the three months ended June 30, 2020 increased to $3.1 million from $1.9 million for the three months ended June 30, 2019, a 60% increase, due to higher gains on the sale of residential mortgage loans ($1.2 million). Other income for the three months ended June 30, 2020 increased to $6.9 million from $1.8 million for the three months ended June 30, 2019, a 277% increase, due substantially to higher gains associated with the origination, securitization, sale and servicing of FHA loans ($2.5 million), $1.4 million higher small business investment company (SBIC) income related to a Community Reinvestment Act (CRA) qualified investment fund, $921 thousand higher swap fee income, and $591 thousand higher prepayment fees. Net investment gains on sale were $713 thousand for the three months ended June 30, 2020 compared to $563 thousand for the same period in 2019. Residential mortgage loans closed were $308 million for the second quarter of 2020 versus $152 million for the second quarter of 2019.

Noninterest expenses increased 4.6% to $34.9 million for the three months ended June 30, 2020, as compared to $33.4 million for the three months ended June 30, 2019, due substantially to increased legal expenses partially offset by salaries and benefit accruals discussed below.

Salaries and employee benefits were $17.1 million for the three months ended June 30, 2020, as compared to $17.7 million for the same period in 2019, a decrease of $639 thousand or 4%.The decrease was primarily due to a lower accrual for incentive bonuses and the release of a portion of an accrual related to the charges for share based compensation awards for our former CEO and Chairman in the second quarter of 2020. The decrease was partially offset by higher salaries and increased headcount in the second quarter of 2020.

Legal, accounting and professional fees increased $1.2 million for the three months ended June 30, 2020 compared to the three months ended June 30, 2019. Legal fees and expenditures of $2.5 million for the second quarter of 2020 were primarily associated with previously disclosed ongoing governmental investigations and related subpoenas and document requests and our defense of the previously disclosed class action lawsuit. The amount of legal fees and expenditures for the quarter is net of expected insurance coverage where we believe we have a high likelihood of recovery pursuant to our D&O insurance policies, but does not include any offset for potential claims we may have in the future as to which recovery is impossible to predict at this time. The efficiency ratio was 37.18% for the second quarter of 2020, as compared to 38.04% for the second quarter of 2019.

FDIC expenses increased $854 thousand due to a higher assessment base resulting from growth in total assets.

The effective income tax rate for the second quarter of 2020 was 24.6% as compared to 26.6% for the second quarter of 2019. The decrease in the effective income tax rate largely relates to a significant decline in pre-tax income for the three months ended June 30, 2020 compared to the three months ended June 30, 2019 due to increased credit reserves significantly attributable to COVID-19, and a decrease in disallowed compensation deductions for key executives, mainly related to share based compensation awards and other compensation of our former CEO and Chairman who resigned in March 2019.

Detail Income Statement Analysis (Six Months 2020 versus Six Months 2019)

For the six months ended June 30, 2020, the Company reported an annualized ROAA of 1.06% as compared to 1.68% for the six months ended June 30, 2019. The annualized ROACE for the six months ended June 30, 2020 was 8.82% as compared to 12.47% for the six months ended June 30, 2019. The annualized ROATCE for the six months ended June 30, 2020 was 9.67% as compared to 13.73% for the six months ended June 30, 2019. A reconciliation of GAAP to non-GAAP financial measures is provided in the tables that accompany this document.

Net interest income decreased 1% for the six months ended June 30, 2020 over the same period in 2019 ($161.1 million versus $162.3 million), resulting primarily from net interest margin compression offset by growth in average earning assets of 16%. The net interest margin was 3.36% for the six months ended June 30, 2020, as compared to 3.97% for the six months ended June 30, 2019. The Company believes that its disciplined approach to managing the loan portfolio yield to 4.84% for the first six months of 2020 (as compared to 5.62% for the same period in 2019) has been a significant factor in its overall profitability.

The provision for credit losses was $34.0 million for the six months ended June 30, 2020 as compared to $7.0 million for the six months ended June 30, 2019. The higher provisioning for the six months ended June 30, 2020, as compared to the same period in 2019, is primarily due to the implementation of CECL and the impact of COVID-19 on our actual and expected future credit losses. Net charge-offs of $9.4 million for the six months ended June 30, 2020 represented an annualized 0.24% of average loans, excluding loans held for sale, as compared to $4.8 million, or an annualized 0.13% of average loans, excluding loans held for sale, in the first six months of 2019. Net charge-offs in the first six months of 2020 were attributable to commercial loans ($7.1 million) and commercial real estate loans ($2.3 million).

Noninterest income for the six months ended June 30, 2020 increased to $18.0 million from $12.7 million for the six months ended June 30, 2019, a 42% increase. Service charges on deposits for the six months ended June 30, 2020 decreased to $2.4 million from $3.3 million for the six months ended June 30, 2019, a 28% decrease, due to lesser insufficient funds fees. Gain on sale of loans for the six months ended June 30, 2020 increased to $4.0 million from $3.3 million for the six months ended June 30, 2019, a 22% increase, due to higher gains on the sale of residential mortgage loans ($718 thousand). Residential lending gains for the first six months of 2020 include $2.6 million in hedge and mark to market losses incurred during the first quarter of 2020 attributable to the Federal Reserves market actions negatively impacting mortgage backed securities pricing combined with sharp declines in servicing right valuations associated with investor uncertainty surrounding COVID-19. Other income for the six months ended June 30, 2020 increased to $8.8 million from $3.7 million for the six months ended June 30, 2019, a 137% increase due substantially to higher gains associated with the origination, securitization, sale and servicing of FHA loans ($2.5 million), $1.4 million higher SBIC income related to a CRA qualified investment fund, $1.1 million higher swap fee income, and $380 thousand higher prepayment fees. Net investment gains were $1.5 million for both the six months ended June 30, 2020 and 2019. Residential mortgage loans closed were $501 million for the first six months of 2020 versus $246 million for the first six months of 2019.

Noninterest expenses totaled $72.2 million for the six months ended June 30, 2020, as compared to $71.7 million for the six months ended June 30, 2019, a 1% increase due substantially to nonrecurring costs to salaries and benefits in the first quarter of 2019 related to the retirement of our former Chairman and CEO.

Salaries and employee benefits were $34.9 million for the six months ended June 30, 2020, as compared to $41.4 million for the same period in 2019, a decrease of $6.5 million or 16%.The decrease was primarily due to the $6.2 million of largely nonrecurring charges accrued in the first quarter of 2019 related to share based compensation awards and the resignation of our former CEO and Chairman in March 2019, as well as a lower accrual for incentive bonuses and the release of a portion of an accrual related to the charges for share based compensation awards for our former CEO and Chairman in the first half of 2020.The decrease was partially offset by higher salaries and increased headcount in the first half of 2020.

Legal, accounting and professional fees increased $6.5 million for the six months ended June 30, 2020 compared to the six months ended June 30, 2019. Legal fees and expenditures of $7.1 million for the first six months of 2020 were primarily associated with previously disclosed ongoing governmental investigations and related subpoenas and document requests and our defense of the previously disclosed class action lawsuit. The amount of legal fees and expenditures for the quarter is net of expected insurance coverage where we believe we have a high likelihood of recovery pursuant to our D&O insurance policies but does not include any offset for potential claims we may have in the future as to which recovery is impossible to predict at this time. For the first six months of 2020, the efficiency ratio was 40.34% as compared to 40.95% for the same period in 2019.

FDIC expenses increased $1.2 million (from $2.2 million to $3.4 million) due to a higher assessment base resulting from growth in total assets. Other expenses decreased $453 thousand, or 5%, due primarily to lower broker fees ($1.6 million) partially offset by $940 thousand higher other real estate owned (OREO) expense.

The effective income tax rate for the six months ended June 30, 2020 was 25.5% as compared to 26.3% for the six months ended June 30, 2019. The decrease in the effective income tax rate largely relates to a significant decline in pre-tax income for the six months ended June 30, 2020 compared to the six months ended June 30, 2019, and a decrease in disallowed compensation deductions for key executives, mainly related to share based compensation awards and other compensation of our former CEO and Chairman who resigned in March 2019. The decrease in the effective income tax rate was recorded in the second quarter of 2020 based on a reduced pre-tax income budget for the year due to increased credit reserves significantly attributable to COVID-19.

The financial information which follows provides more detail on the Companys financial performance for the three and six months ended June 30, 2020 as compared to the three and six months ended June 30, 2019, as well as providing eight quarters of trend data. Persons wishing additional information should refer to the Companys Form 10-K for the year ended December 31, 2019 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 twenty 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.

Conference Call: Eagle Bancorp will host a conference call to discuss its second quarter 2020 financial results on Thursday, July 23, 2020 at 10:00 a.m. eastern daylight time. The public is invited to listen to this conference call by dialing 1.877.303.6220, conference ID Code 3994462, or by accessing the call on the Companys website, www.EagleBankCorp.com.A replay of the conference call will be available on the Companys website through August 6, 2020.

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 Companys market (including the macroeconomic and other challenges and uncertainties resulting from the COVID-19 pandemic, including on our credit quality and 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 Companys Annual Report on Form 10-K for the year ended December 31, 2019, the Companys Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, the Companys upcoming Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, 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 Companys past results are not necessarily indicative of future performance. 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.ConsolidatedFinancial Highlights(Unaudited)(dollars inthousands, except pershare data) Three Months Ended June 30, Six Months June 30, 2020 2019 2020 2019 Income Statements:Totalinterest $ 97,672 $ 108,279 $ 201,473 $ 213,413 incomeTotalinterest 16,309 26,950 40,366 51,067 expenseNet interest 81,363 81,329 161,107 162,346 incomeProvision for 19,737 3,600 34,047 6,960 credit lossesProvision forUnfunded 940 - 3,052 - CommitmentsNet interestincome after 60,686 77,729 124,008 155,386 provision forcredit lossesNoninterestincome(before 11,782 5,797 16,430 11,176 investmentgain)Gain on saleof investment 713 563 1,535 1,475 securitiesTotalnoninterest 12,495 6,360 17,965 12,651 incomeTotalnoninterest 34,892 33,359 72,239 71,663 expenseIncome beforeincome tax 38,289 50,730 69,734 96,374 expenseIncome tax 9,433 13,487 17,755 25,382 expenseNet income $ 28,856 $ 37,243 $ 51,979 $ 70,992 Per Share Data:Earnings perweightedaverage $ 0.90 $ 1.08 $ 1.60 $ 2.06 common share,basicEarnings perweightedaverage $ 0.90 $ 1.08 $ 1.60 $ 2.05 common share,dilutedWeightedaveragecommon shares 32,224,695 34,540,152 32,537,402 34,510,625 outstanding,basicWeightedaveragecommon shares 32,240,825 34,565,253 32,560,742 34,549,412 outstanding,dilutedActual sharesoutstanding 32,224,756 34,539,853 32,224,756 34,539,853 at period endBook valueper common $ 36.86 $ 34.30 $ 36.86 $ 34.30 share atperiod endTangible bookvalue percommon share $ 33.62 $ 31.25 $ 33.62 $ 31.25 at period end(1)Dividend per $ 0.22 $ - $ 0.44 $ - common share PerformanceRatios (annualized):Return onaverage 1.12% 1.74% 1.06% 1.68% assetsReturn onaverage 9.84% 12.81% 8.82% 12.47% common equityReturn onaverage 10.80% 14.08% 9.67% 13.73% tangiblecommon equityNet interest 3.26% 3.91% 3.36% 3.97% marginEfficiency 37.18% 38.04% 40.34% 40.95% ratio (2) Other Ratios: Allowance forcredit losses 1.36% 0.98% 1.36% 0.98% to totalloans (3)Allowance forcredit lossesto total 184.52% 192.70% 184.52% 192.70% nonperformingloansNonperformingloans to 0.74% 0.51% 0.74% 0.51% total loans(3)Nonperformingassets to 0.69% 0.45% 0.69% 0.45% total assetsNetcharge-offs(annualized) 0.36% 0.08% 0.24% 0.13% to averageloans (3)Common equityto total 12.12% 13.66% 12.12% 13.66% assetsTier 1capital (to 10.63% 12.66% 10.63% 12.66% averageassets)Total capital(to risk 16.33% 16.36% 16.33% 16.36% weightedassets)Common equitytier 1capital (to 12.79% 12.87% 12.79% 12.87% risk weightedassets)Tangiblecommon equity 11.17% 12.60% 11.17% 12.60% ratio (1) Loan Balances- Period End (inthousands):Commercialand $ 1,607,056 $ 1,475,201 $ 1,607,056 $ 1,475,201 IndustrialPPP loans $ 456,476 $ - $ 456,476 $ - Commercialreal estate - $ 964,077 $ 970,850 $ 964,077 $ 970,850 owneroccupiedCommercialreal estate - $ 3,678,946 $ 3,666,815 $ 3,678,946 $ 3,666,815 incomeproducing1-4 Family $ 93,601 $ 105,191 $ 93,601 $ 105,191 mortgageConstruction- commercial $ 995,550 $ 1,012,789 $ 995,550 $ 1,012,789 andresidentialConstruction- C&I (owner $ 149,845 $ 76,324 $ 149,845 $ 76,324 occupied)Home equity $ 74,921 $ 83,447 $ 74,921 $ 83,447 Other $ 1,289 $ 1,998 $ 1,289 $ 1,998 consumer AverageBalances (in thousands):Total assets $ 10,326,709 $ 8,595,523 $ 9,887,186 $ 8,525,988 Total earning $ 10,056,500 $ 8,328,323 $ 9,616,337 $ 8,257,411 assetsTotal loans $ 8,015,751 $ 7,260,899 $ 7,833,372 $ 7,150,300 Total $ 8,482,718 $ 6,893,981 $ 8,089,741 $ 6,940,467 depositsTotal $ 598,463 $ 470,214 $ 542,206 $ 368,776 borrowingsTotalshareholders? $ 1,179,452 $ 1,166,487 $ 1,185,316 $ 1,147,782 equity

(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 a reconciliation of these non-GAAP financial measures with financial measures defined by GAAP.

GAAPReconciliation (Unaudited)(dollars inthousands except pershare data) Three Months Six Months Year Ended Three Months Six Months Ended Ended Ended Ended June 30, 2020 June 30, 2020 December 31, June 30, 2019 June 30, 2019 2019Commonshareholders' $ 1,187,895 $ 1,190,681 $ 1,184,582 equityLess:Intangible (104,651 ) (104,739 ) (105,219 )assetsTangible $ 1,083,244 $ 1,085,942 $ 1,079,363 common equity Book value per $ 36.86 $ 35.82 $ 34.30 common shareLess:Intangible (3.24 ) (3.15 ) (3.05 )book value percommon shareTangible bookvalue per $ 33.62 $ 32.67 $ 31.25 common share Total assets $ 9,799,670 $ 8,988,719 $ 8,670,003 Less:Intangible (104,651 ) (104,739 ) (105,219 )assetsTangible $ 9,695,019 $ 8,883,980 $ 8,564,784 assetsTangiblecommon equity 11.17% 12.22% 12.60% ratio Average commonshareholders' $ 1,179,452 $ 1,185,316 $ 1,172,051 $ 1,166,487 $ 1,147,782 equityLess: Averageintangible (104,672 ) (104,684 ) (105,167 ) (105,280 ) (105,430 )assetsAveragetangible $ 1,074,780 $ 1,080,632 $ 1,066,884 $ 1,061,206 $ 1,042,352 common equity Net IncomeAvailable to $ 28,856 $ 51,979 $ 142,943 $ 37,243 $ 70,992 CommonShareholdersAveragetangible $ 1,074,780 $ 1,080,632 $ 1,066,884 $ 1,061,206 $ 1,042,352 common equityAnnualizedReturn onAverage 10.80% 9.67% 13.40% 14.08% 13.73% TangibleCommon Equity

(2) Computed by dividing noninterest expense by the sum of net interest income and noninterest income. The efficiency ratio measures a banks overhead as a percentage of its revenue.

(3) Excludes loans held for sale.

Eagle Bancorp, Inc. Consolidated Balance Sheets (Unaudited)(dollars in thousands, except per share data) Assets June 30, 2020 December 31, June 30, 2019 2019Cash and due from banks $ 12,199 $ 7,539 $ 6,735 Federal funds sold 25,466 38,987 17,914 Interest bearing depositswith banks and other 598,377 195,447 171,985 short-term investmentsInvestment securitiesavailable for sale, atfair value (amortizedcost of $750,653,$839,192, and $740,187,and allowance for credit 772,394 843,363 745,343 losses of $138, $0, and$0, as of June 30, 2020,December 31, 2019 andJune 30, 2019,respectively).Federal Reserve andFederal Home Loan Bank 40,018 35,194 33,993 stockLoans held for sale 68,433 56,707 37,506 Loans 8,021,761 7,545,748 7,392,615 Less allowance for credit (108,796 ) (73,658 ) (72,086 )lossesLoans, net 7,912,965 7,472,090 7,320,529 Premises and equipment, 12,970 14,622 15,176 netOperating lease 25,368 27,372 28,214 right-of-use assetsDeferred income taxes 37,364 29,804 30,220 Bank owned life insurance 75,913 75,724 74,295 Intangible assets, net 104,651 104,739 105,219 Other real estate owned 8,237 1,487 1,394 Other assets 105,315 85,644 81,480 Total Assets $ 9,799,670 $ 8,988,719 $ 8,670,003 Liabilities and Shareholders' EquityDeposits: Noninterest bearing $ 2,416,058 $ 2,064,367 $ 1,873,902 demandInterest bearing 861,703 863,856 862,553 transactionSavings and money market 3,504,718 3,013,129 2,712,143 Time, $100,000 or more 527,870 663,987 801,469 Other time 625,623 619,052 699,825 Total deposits 7,935,972 7,224,391 6,949,892 Customer repurchase 31,198 30,980 31,669 agreementsOther short-term 300,000 250,000 225,000 borrowingsLong-term borrowings 267,882 217,687 217,491 Operating lease 27,137 29,959 31,659 liabilitiesReserve for unfunded 7,170 - - commitmentsOther liabilities 42,416 45,021 29,710 Total liabilities 8,611,775 7,798,038 7,485,421 Shareholders' Equity Common stock, par value$.01 per share; shares authorized 100,000,000,sharesissued and outstanding32,224,756, 33,241,496, 320 331 343 and 34,539,853,respectivelyAdditional paid in 440,934 482,286 532,585 capitalRetained earnings 731,973 705,105 647,887 Accumulated othercomprehensive income 14,668 2,959 3,767 (loss)Total Shareholders' 1,187,895 1,190,681 1,184,582 EquityTotal Liabilities and $ 9,799,670 $ 8,988,719 $ 8,670,003 Shareholders' Equity '

Eagle Bancorp, Inc. Consolidated Statements of Income (Unaudited)(dollars in thousands, except per share data) Three Months Ended June Six Months Ended June 30, 30,Interest Income 2020 2019 2020 2019Interest and fees on loans $ 92,928 $ 101,889 $ 189,683 $ 199,710Interest and dividends on 4,571 5,238 9,998 10,836investment securitiesInterest on balances withother banks and short-term 161 1,105 1,720 2,771investmentsInterest on federal funds 12 47 72 96soldTotal interest income 97,672 108,279 201,473 213,413Interest Expense Interest on deposits 12,514 22,461 33,060 43,361Interest on customer 86 75 173 173repurchase agreementsInterest on other 501 1,435 858 1,575short-term borrowingsInterest on long-term 3,208 2,979 6,275 5,958borrowingsTotal interest expense 16,309 26,950 40,366 51,067Net Interest Income 81,363 81,329 161,107 162,346Provision for Credit Losses 19,737 3,600 34,047 6,960Provision for Unfunded 940 - 3,052 -CommitmentsNet Interest Income After 60,686 77,729 124,008 155,386Provision For Credit Losses Noninterest Income Service charges on deposits 942 1,606 2,367 3,300Gain on sale of loans 3,079 1,923 4,023 3,311Gain on sale of investment 713 563 1,535 1,475securitiesIncrease in the cashsurrender value of bank 828 429 1,242 854owned life insuranceOther income 6,933 1,839 8,798 3,711Total noninterest income 12,495 6,360 17,965 12,651Noninterest Expense Salaries and employee 17,104 17,743 34,901 41,387benefitsPremises and equipment 3,468 3,652 7,289 7,504expensesMarketing and advertising 1,111 1,268 2,189 2,416Data processing 2,759 2,603 5,255 4,978Legal, accounting and 3,979 2,740 10,967 4,449professional feesFDIC insurance 1,980 1,126 3,404 2,242Other expenses 4,491 4,227 8,234 8,687Total noninterest expense 34,892 33,359 72,239 71,663Income Before Income Tax 38,289 50,730 69,734 96,374ExpenseIncome Tax Expense 9,433 13,487 17,755 25,382Net Income $ 28,856 $ 37,243 $ 51,979 $ 70,992 Earnings Per Common Share Basic $ 0.90 $ 1.08 $ 1.60 $ 2.06Diluted $ 0.90 $ 1.08 $ 1.60 $ 2.05

Eagle Bancorp, Inc.Consolidated Average Balances, Interest Yields And Rates (Unaudited)(dollars in thousands) Three Months Ended June 30, 2020 2019 Average Average Average Average Balance Interest Yield/ Balance Interest Yield/ Rate RateASSETS Interest earning assets:Interest bearingdeposits withother banks and $ 1,102,931 $ 161 0.06 % $ 209,096 $ 1,105 2.12 %other short-terminvestmentsLoans held for 80,227 686 3.42 % 34,760 349 4.02 %sale (1)Loans (1) (2) 8,015,751 92,242 4.63 % 7,260,899 101,540 5.61 %Investmentsecurities 821,340 4,571 2.24 % 803,207 5,238 2.62 %available forsale (2)Federal funds 36,251 12 0.13 % 20,361 47 0.93 %soldTotal interest 10,056,500 97,672 3.91 % 8,328,323 108,279 5.21 %earning assets Total noninterest 373,842 337,172 earning assetsLess: allowance 103,633 69,972 for credit lossesTotal noninterest 270,209 267,200 earning assetsTOTAL ASSETS $ 10,326,709 $ 8,595,523 LIABILITIES ANDSHAREHOLDERS' EQUITYInterest bearing liabilities:Interest bearing $ 801,508 $ 530 0.27 % $ 705,628 $ 1,197 0.68 %transactionSavings and money 3,914,916 5,608 0.58 % 2,628,255 12,279 1.87 %marketTime deposits 1,199,946 6,376 2.14 % 1,442,197 8,985 2.50 %Total interest 5,916,370 12,514 0.85 % 4,776,080 22,461 1.89 %bearing depositsCustomerrepurchase 30,611 86 1.13 % 33,248 75 0.90 %agreementsOther short-term 300,003 501 0.66 % 219,508 1,435 2.59 %borrowingsLong-term 267,849 3,208 4.74 % 217,458 2,979 5.42 %borrowingsTotal interestbearing 6,514,833 16,309 1.01 % 5,246,294 26,950 2.06 %liabilities Noninterestbearing liabilities:Noninterest 2,566,348 2,117,901 bearing demandOther liabilities 66,076 64,841 Total noninterestbearing 2,632,424 2,182,742 liabilities Shareholders? 1,179,452 1,166,487 EquityTOTAL LIABILITIESAND SHAREHOLDERS' $ 10,326,709 $ 8,595,523 EQUITY Net interest $ 81,363 $ 81,329 incomeNet interest 2.90 % 3.15 %spreadNet interest 3.26 % 3.91 %marginCost of funds 0.65 % 1.30 % (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 $4.7 millionfor the threemonths ended June30, 2020 and 2019,respectively.(2) Interest andfees on loans andinvestments exclude taxequivalentadjustments.

Eagle Bancorp, Inc.Consolidated Average Balances, Interest Yields and Rates (Unaudited)(dollars in thousands) Six Months Ended June 30, 2020 2019 Average Average Average Average Balance Interest Yield/ Balance Interest Yield/ Rate RateASSETS Interest earning assets:Interest bearingdeposits withother banks and $ 845,540 $ 1,720 0.41 % $ 254,804 $ 2,771 2.19 %other short-terminvestmentsLoans held for 59,488 1,040 3.50 % 26,386 550 4.17 %sale (1)Loans (1) (2) 7,833,372 188,643 4.84 % 7,150,300 199,160 5.62 %Investmentsecurities 844,503 9,998 2.38 % 806,858 10,836 2.71 %available forsale (1)Federal funds 33,434 72 0.43 % 19,063 96 1.02 %soldTotal interest 9,616,337 201,473 4.21 % 8,257,411 213,413 5.21 %earning assets Total noninterest 365,080 338,290 earning assetsLess: allowance 94,231 69,713 for credit lossesTotal noninterest 270,849 268,577 earning assetsTOTAL ASSETS $ 9,887,186 $ 8,525,988 LIABILITIES ANDSHAREHOLDERS' EQUITYInterest bearing liabilities:Interest bearing $ 803,321 $ 2,196 0.55 % $ 648,557 $ 2,378 0.74 %transactionSavings and money 3,626,437 16,690 0.93 % 2,709,950 24,242 1.80 %marketTime deposits 1,243,628 14,174 2.29 % 1,386,876 16,741 2.43 %Total interest 5,673,386 33,060 1.17 % 4,745,383 43,361 1.84 %bearing depositsCustomerrepurchase 30,310 173 1.15 % 30,536 173 1.14 %agreementsOther short-term 260,030 858 0.65 % 120,832 1,575 2.59 %borrowingsLong-term 251,866 6,275 4.93 % 217,408 5,958 5.45 %borrowingsTotal interestbearing 6,215,592 40,366 1.31 % 5,114,159 51,067 2.01 %liabilities Noninterestbearing liabilities:Noninterest 2,416,355 2,195,084 bearing demandOther liabilities 69,923 68,963 Total noninterestbearing 2,486,278 2,264,047 liabilities Shareholders? 1,185,316 1,147,782 equityTOTAL LIABILITIESAND SHAREHOLDERS' $ 9,887,186 $ 8,525,988 EQUITY Net interest $ 161,107 $ 162,346 incomeNet interest 2.90 % 3.20 %spreadNet interest 3.36 % 3.97 %marginCost of funds 0.85 % 1.24 % (1) Loans placed on nonaccrual status are included in average balances.Net loan fees and late charges included in interest income on loans totaled $10.7 million and $8.8 millionfor the sixmonths ended June30, 2020 and 2019,respectively.(2) Interest andfees on loans andinvestments exclude taxequivalentadjustments.

Eagle Bancorp, Inc. Statements of Income and Highlights Quarterly Trends (Unaudited)(dollars inthousands, except per share data) Three Months Ended June 30, March 31, December 31, September 30, June 30, March 31, December 31, September 30,Income Statements: 2020 2020 2019 2019 2019 2019 2018 2018 Total interest $ 97,672 $ 103,801 $ 107,183 $ 109,034 $ 108,279 $ 105,134 $ 105,581 $ 102,360 incomeTotal interest 16,309 24,057 26,473 28,045 26,950 24,117 23,869 21,069 expenseNet interest income 81,363 79,744 80,710 80,989 81,329 81,017 81,712 81,291 Provision for credit 19,737 14,310 2,945 3,186 3,600 3,360 2,600 2,441 lossesProvision for 940 2,112 - - - - - - Unfunded CommitmentsNet interest incomeafter provision for 60,686 63,322 77,765 77,803 77,729 77,657 79,112 78,850 credit lossesNoninterest income(before investment 11,782 4,648 6,845 6,161 5,797 5,379 6,060 5,640 gain (loss))Gain (Loss) on saleof investment 713 822 (111 ) 153 563 912 29 - securitiesTotal noninterest 12,495 5,470 6,734 6,314 6,360 6,291 6,089 5,640 incomeSalaries and 17,104 17,797 19,360 19,095 17,743 23,644 15,907 17,157 employee benefitsPremises and 3,468 3,821 3,380 3,503 3,652 3,852 3,969 3,889 equipmentMarketing and 1,111 1,078 1,200 1,210 1,268 1,148 1,147 1,191 advertisingOther expenses 13,209 14,651 10,786 9,665 10,696 9,660 10,664 9,377 Total noninterest 34,892 37,347 34,726 33,473 33,359 38,304 31,687 31,614 expenseIncome before income 38,289 31,445 49,773 50,644 50,730 45,644 53,514 52,876 tax expenseIncome tax expense 9,433 8,322 14,317 14,149 13,487 11,895 13,197 13,928 Net income 28,856 23,123 35,456 36,495 37,243 33,749 40,317 38,948 Per Share Data: Earnings perweighted average $ 0.90 $ 0.70 $ 1.06 $ 1.07 $ 1.08 $ 0.98 $ 1.17 $ 1.14 common share, basicEarnings perweighted average $ 0.90 $ 0.70 $ 1.06 $ 1.07 $ 1.08 $ 0.98 $ 1.17 $ 1.13 common share,dilutedWeighted averagecommon shares 32,224,695 32,850,112 33,468,572 34,232,890 34,540,152 34,480,772 34,349,089 34,308,684 outstanding, basicWeighted averagecommon shares 32,240,825 32,875,508 33,498,681 34,255,889 34,565,253 34,536,236 34,460,985 34,460,794 outstanding, dilutedActual sharesoutstanding at 32,224,756 32,197,258 33,241,496 33,720,522 34,539,853 34,537,193 34,387,919 34,308,473 period endBook value percommon share at $ 36.86 $ 36.11 $ 35.82 $ 35.13 $ 34.30 $ 33.25 $ 32.25 $ 30.94 period endTangible book valueper common share at $ 33.62 $ 32.86 $ 32.67 $ 32.02 $ 31.25 $ 30.20 $ 29.17 $ 27.84 period end (1)Dividend per common $ 0.22 $ 0.22 $ 0.22 $ 0.22 $ 0.22 $ - $ - $ - share Performance Ratios (annualized):Return on average 1.12% 0.98% 1.49% 1.62% 1.74% 1.62% 1.90% 1.93% assetsReturn on average 9.84% 7.81% 11.78% 12.09% 12.81% 12.12% 14.82% 14.85% common equityReturn on averagetangible common 10.80% 8.56% 12.91% 13.25% 14.08% 13.38% 16.43% 16.54% equityNet interest margin 3.26% 3.49% 3.49% 3.72% 3.91% 4.02% 3.97% 4.14% Efficiency ratio (2) 37.18% 43.83% 39.71% 38.34% 38.04% 43.87% 36.09% 36.37% Other Ratios: Allowance for creditlosses to total 1.36% 1.23% 0.98% 0.98% 0.98% 0.98% 1.00% 1.00% loans (3)Allowance for creditlosses to total 184.52% 201.80% 151.16% 127.87% 192.70% 173.72% 429.72% 452.28% nonperforming loans(4)Nonperforming loansto total loans (3) 0.74% 0.61% 0.65% 0.76% 0.51% 0.56% 0.23% 0.22% (4)Nonperforming assets 0.69% 0.56% 0.56% 0.66% 0.45% 0.50% 0.21% 0.20% to total assets (4)Net charge-offs(annualized) to 0.36% 0.12% 0.16% 0.08% 0.08% 0.19% 0.05% 0.05% average loans (3)Tier 1 capital (to 10.63% 11.33% 11.62% 12.19% 12.66% 12.49% 12.08% 12.13% average assets)Total capital (torisk weighted 16.33% 15.44% 16.20% 16.08% 16.36% 16.22% 16.08% 15.74% assets)Common equity tier 1capital (to risk 12.79% 12.14% 12.87% 12.76% 12.87% 12.69% 12.47% 12.11% weighted assets)Tangible common 11.17% 10.70% 12.22% 12.13% 12.60% 12.59% 12.11% 12.01% equity ratio (1) Average Balances (in thousands):Total assets $ 10,326,709 $ 9,447,663 $ 9,426,220 $ 8,923,406 $ 8,595,523 $ 8,455,680 $ 8,415,480 $ 8,023,535 Total earning assets $ 10,056,500 $ 9,176,174 $ 9,160,034 $ 8,655,196 $ 8,328,323 $ 8,185,711 $ 8,171,010 $ 7,793,422 Total loans $ 8,015,751 $ 7,650,993 $ 7,532,179 $ 7,492,816 $ 7,260,899 $ 7,038,472 $ 6,897,434 $ 6,646,264 Total deposits $ 8,482,718 $ 7,696,764 $ 7,716,973 $ 7,319,314 $ 6,893,981 $ 6,987,468 $ 6,950,714 $ 6,485,144 Total borrowings $ 598,463 $ 485,948 $ 449,432 $ 345,464 $ 470,214 $ 266,209 $ 342,637 $ 464,460 Total shareholders? $ 1,179,452 $ 1,191,180 $ 1,194,337 $ 1,197,513 $ 1,166,487 $ 1,128,869 $ 1,079,622 $ 1,040,826 equity (1) Tangible common equity to tangible assets (the "tangible common equityratio") and tangible book value per common share are non-GAAP financialmeasures derived from GAAP based amounts. The Company calculates the tangiblecommon equityratio by excluding the balance of intangible assets from common shareholders'equity and dividing by tangible assets. The Company calculates tangible bookvalue per common share by dividing tangible common equity by common sharesoutstanding,as compared to book value per common share, which the Company calculates bydividing common shareholders' equity by common shares outstanding. The Companyconsiders this information important to shareholders as tangible equity is ameasurethat is consistent with the calculation of capital for bank regulatorypurposes, which excludes intangible assets from the calculation of risk basedratios and as such is useful for investors, regulators, management and othersto evaluate capital adequacyand to compare against other financial institutions.(2) Computed by dividing noninterest expense by the sum of net interest incomeand noninterest income.(3) Excludes loans held for sale.(4) Nonperforming loans at September 30, 2019, includes a $16.5 million loanthat was brought current shortly after quarter end.

EAGLE BANCORP, INC.CONTACT:Michael T. Flynn301.986.1800