Eagle Bancorp, Inc. Announces Second Quarter 2024 Results

Distributed by Globe Newswire
24th July 2024

Eagle grows Common Equity Tier 1 Capital and Tier 1 Capital leverage ratio to 13.9% and 10.6%, respectively

BETHESDA, Md., July 24, 2024 (GLOBE NEWSWIRE) — Eagle Bancorp, Inc. (NASDAQ: EGBN), (“Eagle”, “the Company”, “we”, “us”, “our”), the Bethesda-based parent company of EagleBank (the “Bank”), reported its unaudited results for the second quarter ended June 30, 2024.

Eagle recorded a $104.2 million impairment in the value of goodwill and a resulting net loss of $83.8 million or $2.78 per share for the second quarter 2024. The goodwill impairment does not impact our cash, liquidity ratios, core operating performance, or regulatory capital ratios. Operating net income¹, adjusted to exclude the impairment charge on goodwill, was $20.4 million or $0.67 per diluted share. We increased the Tier 1 capital leverage ratio to 10.6% and continue to grow the number of core deposit relationships.

“The Company’s operating results materially improved from the first quarter due to a normalization of charge-offs from our loan portfolio. We continue to execute on our strategic plan as evidenced by initiatives such as the addition of the Expatriate Banking Services Division and the continued success of our digital banking channel driving our objective of further diversification of deposits and reducing the use of wholesale funding sources” said Susan G. Riel, President and Chief Executive Officer of the Company.

Ms. Riel continued, “I’m encouraged by our team’s continued resilience, consistently upholding our brand and community role while serving as trusted partners to our customers. I am excited about EagleBank’s future prospects and its capacity to support our communities and customers for years ahead.”

Eric R. Newell, Chief Financial Officer of the Company said, “While the Company experienced a net loss on a GAAP basis due to the impairment charge on goodwill, operating performance significantly improved from last quarter evidenced by operating net income¹ increasing $20.7 million to $20.4 million in the second quarter. We continued to build our reserve for credit losses, with coverage to total held for investment loans at 1.33% increasing 8 basis points from last quarter. Common equity tier one capital increased to 13.9% and our tangible common equity¹ ratio exceeds 10%. Our efforts remain laser focused on the continued implementation of our strategic objectives².”

Ms. Riel added, “I thank all of our employees for their hard work and dedication. Additionally, we remain committed to a culture of respect, diversity and inclusion in both the workplace and the communities we serve.”

Second Quarter 2024 Highlights

The ACL as a percentage of total held for investment loans was 1.33% at quarter-end; up from 1.25% at the prior quarter-end. Performing office coverage³ was 4.05% at quarter-end; as compared to 3.67% at the prior quarter-end.
Non-performing assets increased $6.7 million as of June 30, 2024 and were 0.88% of total assets compared to 0.79% as of March 31, 2024 largely due to increases from construction and income producing commercial real estate loans.
Net charge-offs for the second quarter were 0.11% compared to 1.07% for the first quarter 2024. The decline in charge-offs reflects a charge-off in the first quarter that did not repeat in the second quarter.
The net interest margin (“NIM”) declined slightly to 2.40% for the second quarter 2024, compared to 2.43% for the prior quarter. While interest rates on earning assets remained stable, we saw costs on interest bearing liabilities increase 8 basis points driven by refinancing of maturing Bank Term Funding Program (“BTFP”) borrowings with Federal Home Loan Bank of Atlanta (“FHLB”) borrowings toward the end of the first quarter.
The Company declared a quarterly dividend of $0.45 per share.
At quarter-end, the common equity ratio, tangible common equity ratio, and common equity tier 1 capital (to risk-weighted assets) ratio were 10.35%, 10.35%, and 13.92%, respectively.
Loans at quarter-end were $8.0 billion, up $19.0 million, or 0.2%, from the prior quarter-end.
Deposits at quarter-end were $8.3 billion, down $234.1 million, or 2.8%, from the prior quarter-end. The decrease was primarily attributable to a decline in deposits from a third party payment processor related to the fluctuations in deposit levels resulting from its business, as well as a decline in public and brokered funding. Period end deposits have increased $549 million when compared to June 30, 2023.
Total estimated insured deposits at quarter-end were $6.0 billion, or 72.5% of deposits.
Total on-balance sheet liquidity and available capacity was $4.0 billion at quarter-end. Capacity was increased from the prior quarter as a result of pledging additional collateral to the FRB Discount window.

Income Statement

Net interest income was $71.4 million for the second quarter 2024, compared to $74.7 million for the prior quarter. The decrease in net interest income was primarily driven by a decrease in the average balances of deposits held with other banks offset by lower average interest bearing liabilities with a higher rate during the second quarter as compared to the first quarter.
Provision for credit losses was $9.0 million for the second quarter 2024, compared to $35.2 million for the prior quarter. The provision for the second quarter was driven by updates to the qualitative components of the CECL model. The decrease in the provision quarter over quarter reflects a higher provision in the first quarter due to a significant charge-off that did not repeat in the second quarter.
Noninterest income was $5.3 million for the second quarter 2024, compared to $3.6 million for the prior quarter. The primary driver for the increase related to other income associated with the sale of a small mortgage servicing rights portfolio related to the FHA Multifamily business.
Noninterest expense was $146.5 million for the second quarter 2024, compared to $40.0 million for the prior quarter. The increase over the comparative quarters was primarily due to a goodwill impairment charge of $104.2 million in the second quarter 2024. Excluding the goodwill impairment charge, our operating noninterest expense⁴ was $42.3 million for the second quarter 2024. Aside from the goodwill impairment charge, the increase was associated with other expenses lead by real estate taxes.

Loans and Funding

Total loans were $8.0 billion at June 30, 2024, up 0.2% from the prior quarter-end. The increase in total loans was driven by increased fundings of ongoing construction projects for commercial and residential properties, partially offset by a reduction in commercial loans from the prior quarter-end.
At June 30, 2024, income-producing commercial real estate loans secured by office properties other than owner-occupied properties were 11.3% of the total loan portfolio at principal, up from 11.2% at the prior quarter-end.

Total deposits were $8.3 billion at June 30, 2024, down 2.8% from the prior quarter-end. The decrease was primarily attributable to a decline in deposits from a third party payment processor related to the fluctuations in deposit levels resulting from its business, as well as declines in some public and brokered funding.
Borrowings were $1.7 billion at June 30, 2024, down 0.6% from the prior quarter-end.

Asset Quality

Allowance for credit losses was 1.33% of total loans at June 30, 2024, compared to 1.25% at the prior quarter-end. Performing office coverage was 4.05% at quarter-end; as compared to 3.67% at the prior quarter-end.
Net charge-offs were $2.3 million for the quarter compared to $21.4 million in the first quarter of 2024.
Nonperforming assets were $98.9 million at June 30, 2024.
- NPAs as a percentage of assets were 0.88% at June 30, 2024, compared to 0.79% at the prior quarter-end. At June 30, 2024, other real estate owned consisted of four properties with an aggregate carrying value of $773 thousand.
- Loans 30-89 days past due were $8.4 million at June 30, 2024, down from $31.1 million at the prior.

Capital

Total shareholders’ equity was $1.2 billion at June 30, 2024, down 7.1% from the prior quarter-end. The decrease in shareholders’ equity of $90.0 million was primarily due to a goodwill impairment charge of $104.2 million.
Book value per share was $38.75, down $2.97 from the prior quarter-end.
Tangible book value per share⁵ was $38.74, up $0.48 from the prior quarter-end.

Additional financial information: The financial information that follows provides more detail on the Company’s financial performance for the three months ended June 30, 2024 as compared to the three months ended March 31, 2024 and June 30, 2023, 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, 2023, and other reports filed with 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 twelve banking offices and four lending 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 second quarter 2024 financial results on Thursday, July 25, 2024 at 10:00 a.m. Eastern Time.

The listen-only webcast can be accessed at:

https://edge.media-server.com/mmc/p/psn698x6/
For analysts who wish to participate in the conference call, please register at the following URL:
https://register.vevent.com/register/BId373c2f4d3af4a28a271e79bee6e0bca

A replay of the conference call will be available on the Company’s website through 8/8/2024: https://www.eaglebankcorp.com/

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 volatility in interest rates and interest rate policy; the current inflationary environment; competitive factors) and other conditions (such as the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment regarding the stability and liquidity of banks), 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, 2023 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 Statements of Operations (Unaudited)
(Dollars in thousands, except per share data)

	Three Months Ended
	June 30,			March 31,			June 30,
		2024			2024			2023
Interest Income
Interest and fees on loans	$	137,616		$	137,994		$	128,993
Interest and dividends on investment securities		12,405			12,680			14,241
Interest on balances with other banks and short-term investments		19,568			24,862			13,229
Interest on federal funds sold		142			66			47
Total interest income		169,731			175,602			156,510
Interest Expense
Interest on deposits		76,846			79,383			59,422
Interest on customer repurchase agreements		330			315			333
Interest on borrowings		21,202			21,206			24,944
Total interest expense		98,378			100,904			84,699
Net Interest Income		71,353			74,698			71,811
Provision for Credit Losses		8,959			35,175			5,238
Provision for Credit Losses for Unfunded Commitments		608			456			318
Net Interest Income After Provision for Credit Losses		61,786			39,067			66,255

Noninterest Income
Service charges on deposits		1,653			1,699			1,626
Gain on sale of loans		37			—			95
Net gain on sale of investment securities		3			4			2
Increase in cash surrender value of bank-owned life insurance		709			703			648
Other income		2,930			1,183			6,224
Total noninterest income		5,332			3,589			8,595
Noninterest Expense
Salaries and employee benefits		21,770			21,726			21,957
Premises and equipment expenses		2,894			3,059			3,227
Marketing and advertising		1,662			859			884
Data processing		3,495			3,293			3,354
Legal, accounting and professional fees		2,705			2,507			2,649
FDIC insurance		5,917			6,412			2,581
Goodwill impairment		104,168			—			—
Other expenses		3,880			2,141			3,326
Total noninterest expense		146,491			39,997			37,978
(Loss) Income Before Income Tax Expense		(79,373	)		2,659			36,872
Income Tax Expense		4,429			2,997			8,180
Net (Loss) Income	$	(83,802	)	$	(338	)	$	28,692

(Loss) Earnings Per Common Share
Basic	$	(2.78	)	$	(0.01	)	$	0.94
Diluted	$	(2.78	)	$	(0.01	)	$	0.94


Eagle Bancorp, Inc.
Consolidated Balance Sheets (Unaudited)
(Dollars in thousands, except per share data)
	June 30,			March 31,			June 30,
		2024			2024			2023
Assets
Cash and due from banks	$	10,803		$	10,076		$	9,865
Federal funds sold		5,802			11,343			3,981
Interest-bearing deposits with banks and other short-term investments		526,228			696,453			174,072
Investment securities available-for-sale at fair value (amortized cost of $1,584,435, $1,613,659, and $1,732,722, respectively, and allowance for credit losses of $17, $17 and $17, respectively)		1,420,618			1,445,034			1,535,589
Investment securities held-to-maturity at amortized cost, net of allowance for credit losses of $2,012, $1,957 and $2,010, respectively (fair value of $856,275, $878,159 and $923,313, respectively)		982,955			1,000,732			1,055,181
Federal Reserve and Federal Home Loan Bank stock		54,274			54,678			46,199
Loans held for sale		5,000			—			—
Loans		8,001,739			7,982,702			7,766,719
Less: allowance for credit losses		(106,301	)		(99,684	)		(78,029	)
Loans, net		7,895,438			7,883,018			7,688,690
Premises and equipment, net		8,788			9,504			11,979
Operating lease right-of-use assets		16,250			17,679			21,580
Deferred income taxes		86,236			87,813			92,574
Bank-owned life insurance		114,333			113,624			111,565
Goodwill and intangible assets, net		129			104,611			104,220
Other real estate owned		773			773			1,487
Other assets		174,396			177,310			177,759
Total Assets	$	11,302,023		$	11,612,648		$	11,034,741
Liabilities and Shareholders’ Equity
Liabilities
Deposits:
Noninterest-bearing demand	$	1,693,955		$	1,835,524		$	2,010,353
Interest-bearing transaction		1,123,980			1,207,566			930,308
Savings and money market		3,165,314			3,235,391			2,791,040
Time deposits		2,284,099			2,222,958			1,986,426
Total deposits		8,267,348			8,501,439			7,718,127
Customer repurchase agreements		39,220			37,059			37,017
Borrowings		1,659,979			1,669,948			1,906,615
Operating lease liabilities		20,016			21,611			26,007
Reserve for unfunded commitments		6,653			6,045			7,023
Other liabilities		139,348			117,133			120,186
Total Liabilities		10,132,564			10,353,235			9,814,975
Shareholders’ Equity
Common stock, par value $0.01 per share; shares authorized 100,000,000, shares issued and outstanding 30,180,482, 30,185,732, and 29,912,082, respectively		297			297			296
Additional paid-in capital		380,142			377,334			370,278
Retained earnings		949,863			1,047,550			1,040,779
Accumulated other comprehensive loss		(160,843	)		(165,768	)		(191,587	)
Total Shareholders’ Equity		1,169,459			1,259,413			1,219,766
Total Liabilities and Shareholders’ Equity	$	11,302,023		$	11,612,648		$	11,034,741


Loan Mix and Asset Quality (Dollars in thousands)

	June 30,				March 31,				June 30,
		2024				2024				2023
	Amount		%		Amount		%		Amount		%
Loan Balances – Period End:
Commercial	$	1,238,261	15	%	$	1,473,766	18	%	$	1,431,284	18	%
PPP loans		407	—	%		528	—	%		649	—	%
Income producing – commercial real estate		4,217,525	53	%		4,094,614	51	%		4,086,049	53	%
Owner occupied – commercial real estate		1,263,714	16	%		1,172,239	15	%		1,122,334	14	%
Real estate mortgage – residential		61,338	1	%		73,396	1	%		76,596	1	%
Construction – commercial and residential		1,063,764	13	%		969,766	12	%		862,869	11	%
Construction – C&I (owner occupied)		99,526	1	%		132,021	2	%		132,843	2	%
Home equity		52,773	1	%		51,964	1	%		53,934	1	%
Other consumer		4,431	—	%		401	—	%		161	—	%
Total loans	$	8,001,739	100	%	$	7,968,695	100	%	$	7,766,719	100	%

	Three Months Ended or As Of
	June 30,		March 31,		June 30,
		2024		2024		2023
Asset Quality:
Net charge-offs	$	2,285	$	21,430	$	5,598
Nonperforming loans	$	98,169	$	91,491	$	29,098
Other real estate owned	$	773	$	773	$	1,487
Nonperforming assets	$	98,942	$	92,264	$	30,585
Special mention	$	307,906	$	265,348	$	155,810
Substandard	$	408,311	$	361,776	$	219,045


Eagle Bancorp, Inc.
Consolidated Average Balances, Interest Yields And Rates vs. Prior Quarter (Unaudited)
(Dollars in thousands)

	Three Months Ended
	June 30, 2024							March 31, 2024
	Average Balance			Interest		Average Yield/Rate		Average Balance			Interest		Average Yield/Rate
ASSETS
Interest earning assets:
Interest-bearing deposits with other banks and other short-term investments	$	1,455,007		$	19,568	5.41	%	$	1,841,771		$	24,862	5.43	%
Loans held for sale ⁽¹⁾		8,045			100	5.00	%		—			—	—	%
Loans ^{(1) (2)}	$	8,003,206			137,516	6.91	%		7,988,941			137,994	6.95	%
Investment securities available-for-sale ⁽²⁾		1,478,856			7,048	1.92	%		1,516,503			7,247	1.92	%
Investment securities held-to-maturity ⁽²⁾		995,274			5,357	2.16	%		1,011,231			5,433	2.16	%
Federal funds sold		13,058			142	4.37	%		7,051			66	3.76	%
Total interest earning assets		11,953,446		$	169,731	5.71	%		12,365,497		$	175,602	5.71	%
Total noninterest earning assets		510,725							508,987
Less: allowance for credit losses		(102,671	)						(90,014	)
Total noninterest earning assets		408,054							418,973
TOTAL ASSETS	$	12,361,500						$	12,784,470

LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest bearing liabilities:
Interest-bearing transaction	$	1,636,795		$	16,100	3.96	%	$	1,833,493		$	16,830	3.69	%
Savings and money market		3,321,001			33,451	4.05	%		3,423,388			35,930	4.22	%
Time deposits		2,215,693			27,295	4.95	%		2,187,320			26,623	4.90	%
Total interest bearing deposits		7,173,489			76,846	4.31	%		7,444,201			79,383	4.29	%
Customer repurchase agreements		38,599			330	3.44	%		36,084			315	3.51	%
Borrowings		1,682,684			21,202	5.07	%		1,796,863			21,206	4.75	%
Total interest bearing liabilities		8,894,772		$	98,378	4.45	%		9,277,148		$	100,904	4.37	%
Noninterest bearing liabilities:
Noninterest bearing demand		2,051,777							2,057,460
Other liabilities		151,324							160,206
Total noninterest bearing liabilities		2,203,101							2,217,666
Shareholders’ equity		1,263,627							1,289,656
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	12,361,500						$	12,784,470
Net interest income				$	71,353						$	74,698
Net interest spread						1.26	%						1.34	%
Net interest margin						2.40	%						2.43	%
Cost of funds						3.61	%						3.58	%

(1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $4.8 million and $5.1 million for the three months ended June 30, 2024 and March 31, 2024, respectively.
(2) Interest and fees on loans and investments exclude tax equivalent adjustments.


Eagle Bancorp, Inc.
Consolidated Average Balances, Interest Yields And Rates vs. Year Ago Quarter (Unaudited)
(Dollars in thousands)

	Three Months Ended June 30,
		2024							2023
	Average Balance			Interest		Average Yield/Rate		Average Balance			Interest		Average Yield/Rate
ASSETS
Interest earning assets:
Interest bearing deposits with other banks and other short-term investments	$	1,455,007		$	19,568	5.41	%	$	1,053,961		$	13,229	5.03	%
Loans held for sale ⁽¹⁾		8,045			100	5.00	%		813			13	6.40	%
Loans ^{(1) (2)}		8,003,206			137,516	6.91	%		7,790,555			128,980	6.64	%
Investment securities available-for-sale ⁽²⁾		1,478,856			7,048	1.92	%		1,626,330			8,526	2.10	%
Investment securities held-to-maturity ⁽²⁾		995,274			5,357	2.16	%		1,068,755			5,715	2.14	%
Federal funds sold		13,058			142	4.37	%		5,636			47	3.34	%
Total interest earning assets		11,953,446		$	169,731	5.71	%		11,546,050		$	156,510	5.44	%
Total noninterest earning assets		510,725							492,426
Less: allowance for credit losses		(102,671	)						(78,365	)
Total noninterest earning assets		408,054							414,061
TOTAL ASSETS	$	12,361,500						$	11,960,111

LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest bearing liabilities:
Interest bearing transaction	$	1,636,795		$	16,100	3.96	%	$	1,312,710		$	10,640	3.25	%
Savings and money market		3,321,001			33,451	4.05	%		2,967,678			30,861	4.17	%
Time deposits		2,215,693			27,295	4.95	%		1,675,690			17,921	4.29	%
Total interest bearing deposits		7,173,489			76,846	4.31	%		5,956,078			59,422	4.00	%
Customer repurchase agreements		38,599			330	3.44	%		41,105			333	3.25	%
Borrowings		1,682,684			21,202	5.07	%		2,061,402			24,944	4.85	%
Total interest bearing liabilities		8,894,772		$	98,378	4.45	%		8,058,585		$	84,699	4.22	%
Noninterest bearing liabilities:
Noninterest bearing demand		2,051,777							2,558,860
Other liabilities		151,324							97,019
Total noninterest bearing liabilities		2,203,101							2,655,879
Shareholders’ equity		1,263,627							1,245,647
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	12,361,500						$	11,960,111
Net interest income				$	71,353						$	71,811
Net interest spread						1.26	%						1.22	%
Net interest margin						2.40	%						2.49	%
Cost of funds						3.61	%						3.20	%

(1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $4.8 million and $7.9 million for the three months ended June 30, 2024 and 2023, respectively.
(2) Interest and fees on loans and investments exclude tax equivalent adjustments.


Eagle Bancorp, Inc.
Statements of Operations and Highlights Quarterly Trends (Unaudited)
(Dollars in thousands, except per share data)

	Three Months Ended
Income Statements:	June 30,			March 31,			December 31,			September 30,			June 30,			March 31,			December 31,			September 30,
Income Statements:		2024			2024			2023			2023			2023			2023			2022			2022
Total interest income	$	169,731		$	175,602		$	167,421		$	161,149		$	156,510		$	140,247		$	129,130		$	111,527
Total interest expense		98,378			100,904			94,429			90,430			84,699			65,223			43,530			27,630
Net interest income		71,353			74,698			72,992			70,719			71,811			75,024			85,600			83,897
Provision for (reversal of) credit losses		8,959			35,175			14,490			5,644			5,238			6,164			(464	)		3,022
Provision for (reversal of) credit losses for unfunded commitments		608			456			(594	)		(839	)		318			848			161			774
Net interest income after provision for (reversal of) credit losses		61,786			39,067			59,096			65,914			66,255			68,012			85,903			80,101
Noninterest income before investment gain (loss)		5,329			3,585			2,891			6,342			8,593			3,721			5,326			5,304
Net gain (loss) on sale of investment securities		3			4			3			5			2			(21	)		3			4
Total noninterest income		5,332			3,589			2,894			6,347			8,595			3,700			5,329			5,308
Salaries and employee benefits		21,770			21,726			18,416			21,549			21,957			24,174			23,691			21,538
Premises and equipment expenses		2,894			3,059			2,967			3,095			3,227			3,317			3,292			3,275
Marketing and advertising		1,662			859			1,071			768			884			636			1,290			1,181
Goodwill impairment		104,168			—			—			—			—			—			—			—
Other expenses		15,997			14,353			14,644			12,221			11,910			12,457			10,645			10,212
Total noninterest expense		146,491			39,997			37,098			37,633			37,978			40,584			38,918			36,206
(Loss) income before income tax expense		(79,373	)		2,659			24,892			34,628			36,872			31,128			52,314			49,203
Income tax expense		4,429			2,997			4,667			7,245			8,180			6,894			10,121			11,906
Net (loss) income	$	(83,802	)	$	(338	)	$	20,225		$	27,383		$	28,692		$	24,234		$	42,193		$	37,297
Per Share Data:
(Loss) earnings per weighted average common share, basic	$	(2.78	)	$	(0.01	)	$	0.68		$	0.91		$	0.94		$	0.78		$	1.32		$	1.16
(Loss) earnings per weighted average common share, diluted	$	(2.78	)	$	(0.01	)	$	0.67		$	0.91		$	0.94		$	0.78		$	1.32		$	1.16
Weighted average common shares outstanding, basic		30,185,609			30,068,173			29,925,557			29,910,218			30,454,766			31,109,267			31,819,631			32,084,464
Weighted average common shares outstanding, diluted		30,185,609			30,068,173			29,966,962			29,944,692			30,505,468			31,180,346			31,898,619			32,155,678
Actual shares outstanding at period end		30,180,482			30,185,732			29,925,612			29,917,982			29,912,082			31,111,647			31,346,903			32,082,321
Book value per common share at period end	$	38.75		$	41.72		$	42.58		$	40.64		$	40.78		$	39.92		$	39.18		$	38.02
Tangible book value per common share at period end ⁽¹⁾	$	38.74		$	38.26		$	39.08		$	37.12		$	37.29		$	36.57		$	35.86		$	34.77
Dividend per common share	$	0.45		$	0.45		$	0.45		$	0.45		$	0.45		$	0.45		$	0.45		$	0.45
Performance Ratios (annualized):
Return on average assets	(2.73)%			(0.01)%				0.65	%		0.91	%		0.96	%		0.86	%		1.49	%		1.29	%
Return on average common equity	(26.67)%			(0.11)%				6.48	%		8.80	%		9.24	%		7.92	%		13.57	%		11.64	%
Return on average tangible common equity ⁽¹⁾	(28.96)%			(0.11)%				7.08	%		9.61	%		10.08	%		8.65	%		14.82	%		12.67	%
Net interest margin		2.40	%		2.43	%		2.45	%		2.43	%		2.49	%		2.77	%		3.14	%		3.02	%
Efficiency ratio ⁽²⁾		191.0	%		51.1	%		48.9	%		48.8	%		47.2	%		51.6	%		42.8	%		40.6	%
Other Ratios:
Allowance for credit losses to total loans ⁽³⁾		1.33	%		1.25	%		1.08	%		1.05	%		1.00	%		1.01	%		0.97	%		1.04	%
Allowance for credit losses to total nonperforming loans		110	%		109	%		131	%		119	%		268	%		1,160	%		1,151	%		997	%
Nonperforming assets to total assets		0.88	%		0.79	%		0.57	%		0.64	%		0.28	%		0.08	%		0.08	%		0.09	%
Net charge-offs (recoveries) (annualized) to average total loans ⁽³⁾		0.11	%		1.07	%		0.60	%		0.02	%		0.29	%		0.05	%		0.05	%		—	%
Tier 1 capital (to average assets)		10.58	%		10.26	%		10.73	%		10.96	%		10.84	%		11.42	%		11.63	%		11.55	%
Total capital (to risk weighted assets)		15.07	%		14.87	%		14.79	%		14.54	%		14.51	%		14.74	%		14.94	%		15.60	%
Common equity tier 1 capital (to risk weighted assets)		13.92	%		13.80	%		13.90	%		13.68	%		13.55	%		13.75	%		14.03	%		14.64	%
Tangible common equity ratio ⁽¹⁾		10.35	%		10.03	%		10.12	%		10.04	%		10.21	%		10.36	%		10.18	%		10.52	%
Average Balances (in thousands):
Total assets	$	12,361,500		$	12,784,470		$	12,283,303		$	11,942,905		$	11,960,111		$	11,426,056		$	11,255,956		$	11,431,110
Total earning assets	$	11,953,446		$	12,365,497		$	11,837,722		$	11,532,186		$	11,546,050		$	11,004,817		$	10,829,703		$	11,030,670
Total loans ⁽³⁾	$	8,003,206		$	7,988,941		$	7,963,074		$	7,795,144		$	7,790,555		$	7,712,023		$	7,379,198		$	7,282,589
Total deposits	$	9,225,266		$	9,501,661		$	9,471,369		$	8,946,641		$	8,514,938		$	8,734,125		$	9,524,139		$	9,907,497
Total borrowings	$	1,721,283		$	1,832,947		$	1,401,917		$	1,646,179		$	2,102,507		$	1,359,463		$	411,060		$	158,001
Total shareholders’ equity	$	1,263,627		$	1,289,656		$	1,238,763		$	1,235,162		$	1,245,647		$	1,240,978		$	1,233,705		$	1,271,753

(1)   A reconciliation of non-GAAP financial measures to the nearest GAAP measure is provided in the tables that accompany this document.
(2)   Computed by dividing noninterest expense by the sum of net interest income and noninterest income.
(3)   Excludes loans held for sale.


GAAP Reconciliation to Non-GAAP Financial Measures (unaudited)
(dollars in thousands, except per share data)

	June 30,			March 31,			June 30,
		2024			2024			2023
Tangible common equity
Common shareholders’ equity	$	1,169,459		$	1,259,413		$	1,219,766
Less: Intangible assets		(129	)		(104,611	)		(104,220	)
Tangible common equity	$	1,169,330		$	1,154,802		$	1,115,546

Tangible common equity ratio
Total assets	$	11,302,023		$	11,612,648		$	11,034,741
Less: Intangible assets		(129	)		(104,611	)		(104,220	)
Tangible assets	$	11,301,894		$	11,508,037		$	10,930,521

Tangible common equity ratio		10.35	%		10.03	%		10.21	%

Per share calculations
Book value per common share	$	38.75		$	41.72		$	40.78
Less: Intangible book value per common share		(0.01	)		(3.46	)		(3.49	)
Tangible book value per common share	$	38.74		$	38.26		$	37.29

Shares outstanding at period end		30,180,482			30,185,732			29,912,082

	Three Months Ended
	June 30,			March 31,			June 30,
		2024			2024			2023
Average tangible common equity
Average common shareholders’ equity	$	1,263,627		$	1,289,656		$	1,245,647
Less: Average intangible assets		(99,827	)		(104,718	)		(104,224	)
Average tangible common equity	$	1,163,800		$	1,184,938		$	1,141,423

Return on average tangible common equity
Net (loss) income	$	(83,802	)	$	(338	)	$	28,692
Return on average tangible common equity	(28.96)%			(0.11)%				10.08	%

Net (loss) income	$	(83,802	)	$	(338	)	$	28,692
Add back of goodwill impairment		104,168			—			—
Operating net (loss) income (Non-GAAP)	$	20,366		$	(338	)	$	28,692
Operating Return on average tangible common equity (Non-GAAP)		7.04	%	(0.11)%				10.08	%

Efficiency ratio
Net interest income	$	71,353		$	74,698		$	71,811
Noninterest income		5,332			3,589			8,595
Operating revenue	$	76,685		$	78,287		$	80,406
Noninterest expense	$	146,491		$	39,997		$	37,978
Add back of goodwill impairment		(104,168	)		—			—
Operating Noninterest expense (Non-GAAP)		42,323			39,997			37,978

Efficiency ratio		191.03	%		51.09	%		47.23	%
Operating Efficiency ratio (Non-GAAP)		55.19	%		51.09	%		47.23	%

Pre-provision net revenue
Net interest income	$	71,353		$	74,698		$	71,811
Noninterest income		5,332			3,589			8,595
Less: Noninterest expense		(146,491	)		(39,997	)		(37,978	)
Pre-provision net revenue	$	(69,806	)	$	38,290		$	42,428

Pre-provision net revenue	$	(69,806	)	$	38,290		$	42,428
Add back of goodwill impairment	$	104,168		$	—		$	—
Operating Pre-provision net revenue (Non-GAAP)	$	34,362		$	38,290		$	42,428

Tangible common equity, tangible common equity to tangible assets (the “tangible common equity ratio”), tangible book value per common share, average tangible common equity, annualized return on average tangible common equity, and the operating 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, or tangible common 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 calculates the operating annualized return on average tangible common equity ratio by dividing operating net income available to common shareholders, which adds back the goodwill impairment, 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 the significant impact of the goodwill impairment is a one-time event that obscures the operating performance of the company. Further related to other measures, 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 efficiency ratio is a non-GAAP measure calculated by dividing GAAP noninterest expense by the sum of GAAP net interest income and GAAP noninterest income. The efficiency ratio measures a bank’s overhead as a percentage of its revenue. The Company believes that reporting the non-GAAP efficiency ratio more closely measures its effectiveness of controlling operational activities. Further, the operating efficiency ratio is measured by dividing non-GAAP noninterest expense, which excludes the goodwill impairment, by the sum of GAAP net interest income and GAAP noninterest income. The Company considers this information important to shareholders as the significant impact of the goodwill impairment is a one-time event that obscures the operating performance of the company.

Pre-provision net revenue is a non-GAAP financial measure calculated by subtracting noninterest expenses from the sum of net interest income and noninterest income. The Company considers this information important to shareholders because it illustrates revenue excluding the impact of provisions and reversals to the allowance for credit losses on loans. Operating pre-provision net revenue is a non-GAAP financial measure calculated by subtracting noninterest expenses with the impact of the goodwill impairment added back from the sum of net interest income and noninterest income. The Company considers this information important to shareholders as the significant impact of the goodwill impairment is a one-time event that obscures the operating performance of the company.

	June 30,			March 31,			June 30,
		2024			2024			2023
Net (loss) income	$	(83,802	)	$	(338	)	$	28,692
Add back of goodwill impairment		104,168			—			—
Operating Net (loss) income (Non-GAAP)	$	20,366		$	(338	)	$	28,692

(Loss) earnings per share (diluted)⁶	$	(2.78	)	$	(0.01	)	$	0.94
Add back of goodwill impairment per share (diluted)		3.45			—			—
Operating earnings (loss) per share (diluted) (Non-GAAP)	$	0.67		$	(0.01	)	$	0.94

Operating net (loss) income and operating (loss) earnings per share (diluted) are non-GAAP financial measures derived from GAAP based amounts. The Company calculates operating net (loss) income by excluding from net (loss) income the one-time goodwill impairment of $104.2 million. During the second quarter of 2024, the Company performed an annual impairment test as a result of management’s evaluation of current economic conditions, and concluded that goodwill had become impaired, which resulted in an impairment charge of $104.2 million to reduce the carrying value of the Company’s goodwill to zero. The Company calculates operating earnings (loss) per share (diluted) by dividing the one-time goodwill impairment of $104.2 million by the weighted average shares outstanding (diluted) for the three and six months ended June 30, 2024. The Company considers this information important to shareholders because operating net (loss) income and operating (loss) earnings per share (diluted) provides investors insight into how Company earnings changed exclusive of the impairment charge to allow investors to better compare the Company’s performance against historical periods. The table above provides a reconciliation of operating net income (loss) and operating earnings (loss) per share (diluted) to the nearest GAAP measure.

^¹ A reconciliation of non-GAAP financial measures and the nearest GAAP measures is provided in the GAAP Reconciliation to Non-GAAP Financial Measure that accompany this document.
^² Refer to the 2nd Quarter 2024 Earnings Presentation that accompanies this release for further detail on the strategic objectives of the Company.
^³ Calculated as the ACL attributable to loans collateralized by performing office properties as a percentage of total loans.
^⁴ A reconciliation of non-GAAP financial measures and the nearest GAAP measures is provided in the GAAP Reconciliation to Non-GAAP Financial Measure that accompany this document.
^⁵ A reconciliation of non-GAAP financial measures and the nearest GAAP measures is provided in the GAAP Reconciliation to Non-GAAP Financial Measure that accompany this document.
^⁶ For periods ended with a net loss, anti-dilutive financial instruments have been excluded from the calculation of GAAP diluted EPS. Operating diluted EPS calculations include the impact of outstanding equity-based awards for all periods.