What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-08-07 compared with 2025-05-08 · 401 added, 305 removed, 545 unchanged (56% of the section changed)

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The Company’s primary subsidiary is EagleBank (the "Bank"), and the Company’s other direct and indirect active subsidiaries are Bethesda Leasing, LLC, Eagle Insurance Services, LLC and Landroval Municipal Finance, Inc.

This discussion and analysis should be read in conjunction with the unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this report and MD&A in the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

Caution About Forward-Looking Statements .

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Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements and are typically identified with words such as "may," "will," "can," "anticipates," "believes," "expects," "plans," "strategies," "outlook," "estimates," "potential," "assume," "probable," "possible," "continue," "should," "could," "would," "strive," "seeks," "deem," "projections," "forecast," "consider," "indicative," "uncertainty," "likely," "unlikely," "likelihood," "unknown," "attributable," "depends," "intends," "generally," "feel," "typically," "judgment," "subjective" and similar words or phrases.

For details on factors that could affect these expectations, see the risk factors contained in this report and the risk factors and other cautionary language included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, and in other periodic and current reports filed by the Company with the Securities and Exchange Commission ("SEC").

For details on factors that could affect these expectations, see the risk factors and other cautionary language included in the Company's 2024 Form 10-K, and in other periodic and current reports filed by the Company with the Securities and Exchange Commission ("SEC"), including the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2025.

These forward-looking statements are based largely on our expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control.

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The Company focuses on relationship banking, providing each customer with a number of services and becoming familiar with and addressing customer needs in a proactive, personalized fashion.

The Bank currently has a total of twelve branch offices (six in Suburban Maryland, three in Washington, D.C.

and three in Northern Virginia), a principal corporate office, four lending centers (two are co-located with branches and one co-located in the principal corporate office) and one operations center.

The Bank currently has a total of twelve branch offices (three in Suburban Maryland, three in Washington, D.C.

and six in Northern Virginia), a principal corporate office, four lending centers and one operations center.

The Bank offers a broad range of commercial banking services to its business and professional clients, as well as full-service consumer banking services to individuals living and/or working primarily in the Bank's market area.

The Bank emphasizes providing commercial banking services to sole proprietors, small and medium-sized businesses, non-profit organizations and associations, and investors living and working in and near the primary service area.

These services include the usual deposit functions of commercial banks, including business and personal checking accounts, "NOW" accounts and money market and savings accounts, business, construction, and commercial loans, consumer loans, and cash management services.

These services include the usual deposit functions of commercial banks, including business and personal checking accounts, Negotiable Order of Withdrawal ("NOW") accounts, money market and savings accounts, business, construction, and commercial loans, consumer loans, and cash management services.

The Bank is also active in the origination of Small Business Administration ("SBA") loans.

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The Company securitized these loans through the Government National Mortgage Association ("Ginnie Mae") MBS I program and sold the resulting securities in the open market to authorized dealers in the normal course of business and periodically bundled and sold the servicing rights.

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 45

Table of Contents Management's Discussion and Analysis | General

During the year ended December 31, 2024, the Company sold the remaining servicing rights to all multifamily FHA loans.

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Carrying assets and liabilities at fair value inherently results in more financial statement volatility.

The Company applies the accounting policies contained in Note 1 to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 and Note 1 to the Consolidated Financial Statements included in this report.

There have been no significant changes to the Company's accounting policies as disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

The Company applies the accounting policies contained in "Note 1 – Summary of Significant Accounting Policies" to the Consolidated Financial Statements included in the Company's Annual Report on 2024 Form 10-K and "Note 1 – Summary of Significant Accounting Policies" to the Consolidated Financial Statements included in this report.

There have been no significant changes to the Company's accounting policies as disclosed in the Company's Annual Report on 2024 Form 10-K.

Allowance for Credit Losses and Provision for Unfunded Commitments

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Loans that have evidence of credit deterioration are excluded from the loan segments subject to the quantitative model described above and are individually assessed.

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 46

Table of Contents Management's Discussion and Analysis | Critical Accounting Policies and Estimates

The RUC represents the expected credit losses on off-balance sheet commitments such as unfunded commitments to extend credit and standby letters of credit.

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Material changes to these and other relevant factors may result in greater volatility to the reserve for credit losses, and therefore, greater volatility to our reported earnings.

See Notes 1, 3 and 4 to the Consolidated Financial Statements, the “Provision for Credit Losses” and "Allowance for Credit Losses" sections below for more information on the provision for credit losses and ACL for the loan portfolio.

See "Note 1 – Summary of Significant Accounting Policies", "Note 3 – Investment Securities" and "Note 4 – Loans and Allowance for Credit Losses" to the Consolidated Financial Statements, and the “Provision for Credit Losses” and "Allowance for Credit Losses" sections below for more information on the provision for credit losses and ACL for the loan portfolio.

Results of Operations

Three Months Ended March 31, 2025 Compared with Three Months Ended March 31, 2024

Net income for the three months ended March 31, 2025 was $1.7 million, as compared to net loss of $0.3 million, for the same period in 2024.

This increase was primarily attributable to lower provision for credit losses and higher noninterest income, partially offset by lower net interest income and higher noninterest expense during the current period.

See the discussion below for more information on these drivers and the components of these changes.

Net interest income decreased to $65.6 million for three months ended March 31, 2025 compared to $74.7 million for the three months ended March 31, 2024.

The net interest margin, which measures the difference between interest income and interest expense as a percentage of earning assets, was 2.28% for three months ended March 31, 2025 and 2.43% for three months ended March 31, 2024, a decrease of 15 basis points.

Summary of Consolidated Statements of Operations

For the Three Months Ended June 30, For the Six Months Ended June 30,

2025 2024 Change 2025 2024 Change

Net Interest Income $ 67,776 $ 71,353 $ (3,577) $ 133,425 $ 146,051 $ (12,626)

Provision for (Reversal of) Credit Losses 138,159 8,959 129,200 164,414 44,134 120,280

Provision for (Reversal of) Credit Losses for Unfunded Commitments 1,759 608 1,151 1,462 1,064 398

Net Interest Income After Provision for (Reversal of) Credit Losses (72,142) 61,786 (133,928) (32,451) 100,853 (133,304)

Noninterest income 6,414 5,332 1,082 14,621 8,921 5,700

Noninterest expense 43,470 146,491 (103,021) 88,921 186,488 (97,567)

Income (Loss) Before Income Tax Expense (109,198) (79,373) (29,825) (106,751) (76,714) (30,037)

Income Tax Expense (39,423) 4,429 (43,852) (38,651) 7,426 (46,077)

Net Income (Loss) $ (69,775) $ (83,802) $ 14,027 $ (68,100) $ (84,140) $ 16,040

See respective subsections below for the primary drivers of change and further discussion on net interest income, provision for credit losses, noninterest income, noninterest expenses, and income tax expenses.

The efficiency ratio, which measures the ratio of noninterest expense to total net revenue (the sum of net interest income and noninterest income), was 58.6% and 60.1%, respectively, for three and six months ended June 30, 2025 compared to 191.0% and 120.3% for the same periods in 2024.

The improvement over the 2024 efficiency ratios was primarily driven by the recognition of goodwill impairment of $104.2 million during the second quarter of 2024.

Loans, which generally have higher yields than securities and other earning assets, represented 69% and 66% of average earning assets for six months ended June 30, 2025 and 2024, respectively.

For six months ended June 30, 2025, as compared to the same period in 2024, average loans, excluding loans held for sale, decreased by $58 million, or 1%, driven by payoffs and paydowns that outpaced originations and advances.

Average investment securities for six months ended June 30, 2025 were 19.1% of average earning assets compared to 20.6% for the same period in 2024.

The combination of federal funds sold and interest-bearing deposits with other banks represented 12.0% and 13.7% of average earning assets for six months ended June 30, 2025 and 2024, respectively.

Net interest margin, which measures the difference between interest income and interest expense as a percentage of earning assets, was 2.37% and 2.33% for the three and six months ended June 30, 2025 compared to 2.40% and 2.42% for the same periods in 2024, a decrease of 3 and 9 basis points, respectively.

For further information on the components and drivers of these changes, see the "Net Interest Income and Net Interest Margin" section below.

Total noninterest income in three months ended March 31, 2025 was $8.2 million, as compared to $3.6 million in three months ended March 31, 2024, a 129% increase, primarily driven by higher income from bank owned life insurance (“BOLI”) during the current period.

See "Other Earnings Assets" section below for further discussion on BOLI.

The provision for credit losses in the three months ended March 31, 2025 was $26.3 million as compared to $35.2 million in three months ended March 31, 2024.

For information on the components and drivers of these changes see "Provision for Credit Losses" section below.

Noninterest expenses in three months ended March 31, 2025 totaled $45.5 million, as compared to $40.0 million for the same period in 2024, a 14% increase.

The increase was primarily attributable to higher FDIC insurance assessments during the current period.

Additional details on these expenses and other noninterest expenses are provided in "Noninterest Expense" section below.

The efficiency ratio, which measures the ratio of noninterest expense to total net revenue (the sum of net interest income and non-interest income), was 61.54% for three months ended March 31, 2025 as compared to 51.09% for same period in 2024.

In terms of the average asset composition or mix, loans, which generally have higher yields than securities and other earning assets, represented 68% and 65% of average earning assets for three months ended March 31, 2025 and 2024, respectively.

For three months ended March 31, 2025, as compared to same period in 2024, average loans, excluding loans held for sale, decreased by $55.2 million, or 1%, driven by payoffs and paydowns that outpaced originations and advances.

Average investment securities for three months ended March 31, 2025 were 19% of average earning assets compared to 20% for same period in 2024.

The combination of federal funds sold and interest bearing deposits with other banks represented 12% and 15% of average earning assets for three months ended March 31, 2025 and 2024, respectively.

The ratio of common equity to total assets was relatively flat at 11.00% as of March 31, 2025, compared to 11.02% as of December 31, 2024.

For three months ended March 31, 2025, the return on average assets (“ROAA”) was 0.06%, as compared to (0.01)% for same period in 2024.

Total shareholders’ equity was $1.24 billion as of March 31, 2025 as compared to $1.23 billion as of December 31, 2024, an increase of 2%.

The return on average common equity (“ROACE”) for three months ended March 31, 2025 was 0.55% as compared to (0.11)% for same period in 2024.

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 47

Table of Contents Management's Discussion and Analysis | Results of Operations |

The ratio of common equity to total assets increased to 11.18% as of June 30, 2025, compared to 11.02% as of December 31, 2024.

For three and six months ended June 30, 2025, the return on average assets ("ROAA") was (2.33)% and (1.14)%, respectively, as compared to (2.73)% and (1.35)% for the same periods in 2024.

Total shareholders’ equity was $1.19 billion as of June 30, 2025 as compared to $1.23 billion as of December 31, 2024, a decrease of 3%, driven by losses in the second quarter of 2025.

The return on average common equity ("ROACE") for three and six months ended June 30, 2025 was (22.35)% and (11.01)% respectively, as compared to (26.67)% and (13.25)% for the same periods in 2024.

Net Interest Income and Net Interest Margin

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Changes in the volume and mix of assets and funding sources, along with the changes in yields earned and rates paid, determine changes in net interest income.

Net interest income for the three months ended March 31, 2025 was $65.6 million compared to $74.7 million for the same period in 2024.

The 12% decrease for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 was primarily due to increases in average deposits ($8.0 billion compared to $7.4 billion, respectively) offset by decreases in average deposit rates (3.91% compared to 4.29%, respectively), and by a decrease in the level of other short term borrowings ($682.2 million compared to $1.8 billion, respectively) partially offset by an increase in the interest rate paid on other short-term borrowings (5.19% compared to 4.75%, respectively).

Additionally, average loan balances ($7.9 billion compared to $8.0 billion, respectively) and yields (6.45% compared to 6.95%, respectively) were slightly lower.

Net interest margin decreased by 15 basis points to 2.28% in three months ended March 31, 2025 from 2.43% in three months ended March 31, 2024.

The decrease reflects the increase in deposits and related cost of funds and the decrease in the yield on loans.

The cost of funds on interest-bearing liabilities decreased 23 basis points from 3.58% in three months ended March 31, 2024 to 3.35% in three months ended March 31, 2025, while the yield on interest-earning assets decreased by 35 basis points from 5.71% in three months ended March 31, 2024 to 5.36% in three months ended March 31, 2025.

Average loans held for investment were $7.9 billion for the three months ended March 31, 2025, compared to $8.0 billion for the same period in 2024.

Average investment securities were $2.3 billion for the three months ended March 31, 2025, compared to $2.5 billion for the same period in 2024.

Average interest-bearing deposits with other banks and other short term investments were $1.4 billion for three months ended March 31, 2025 compared to $1.8 billion for the same period in 2024.

Interest income on loans, the largest component of interest income on earning assets, had a yield of 6.45% in three months ended March 31, 2025, compared to 6.95% in same period in 2024, a decrease of 50 basis points.

Average interest-bearing deposits increased from $7.4 billion in the three months ended March 31, 2024 to $8.0 billion in the three months ended March 31, 2025, while average noninterest bearing demand deposits decreased to $1.9 billion for the three months ended March 31, 2025 from $2.1 billion for the three months ended March 31, 2024.

Average borrowings decreased from $1.8 billion in the three months ended March 31, 2024 to $0.8 billion in the three months ended March 31, 2025.

Net interest income for the three months ended June 30, 2025 was $67.8 million compared to $71.4 million for the same period in 2024.

The 5% decrease for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024 was primarily due to an increase in average deposits ($8.3 billion compared to $7.2 billion, respectively,) offset by a decrease in average deposit rates (3.80% compared to 4.31%, respectively,) a decrease in the level of other short term borrowings ($245.3 million compared to $1.7 billion, respectively) and a decrease in the interest rate paid on other short-term borrowings (3.86% compared to 5.07%, respectively.) Additionally, average loan balances ($7.9 billion compared to $8.0 billion, respectively) and yields (6.31% compared to 6.91%, respectively) were lower.

Net interest margin had a decrease of 3 basis points to 2.37% for the three months ended June 30, 2025 from 2.40% for the three months ended June 30, 2024.

This decrease reflects the decrease in deposits and related cost of funds and the decrease in the yield on loans.

The cost of funds on interest-bearing liabilities had a decrease of 44 basis points from 3.61% for the three months ended June 30, 2024 to 3.17% for the three months ended June 30, 2025, while the yield on interest-earning assets had an decrease of 42 basis points from 5.71% for the three months ended June 30, 2024 to 5.29% for the three months ended June 30, 2025.

Net interest income for the six months ended June 30, 2025 was $133.4 million compared to $146.1 million for the same period in 2024.

The 9% decrease for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 was primarily due to an increase in average deposits ($8.2 billion compared to $7.3 billion, respectively,) offset by a decrease in average deposit rates (3.86% compared to 4.30%, respectively,) a decrease in the level of other short term borrowings ($446 million compared to $1.7 billion, respectively) and a decrease in the interest rate paid on other short-term borrowings (4.87% compared to 4.90%, respectively.) Additionally, average loan balances ($7.9 billion compared to $8.0 billion, respectively) and yields (6.38% compared to 6.93%, respectively) were lower.

Net interest margin had a decrease of 9 basis points to 2.33% for the six months ended June 30, 2025 from 2.42% for the six months ended June 30, 2024.

This decrease reflects a decrease in the yield on loans, partially offset by the decreased cost of funds for deposits.

The cost of funds on interest-bearing liabilities decreased by 34 basis points from 3.60% for the six months ended June 30, 2024 to 3.26% for the six months ended June 30, 2025, while the yield on interest-earning assets had a decrease of 37 basis points from 5.71% for the six months ended June 30, 2024 to 5.34% for the six months ended June 30, 2025.

Average loans held for investment were $7.9 billion for the six months ended June 30, 2025, compared to $8.0 billion for the same period in 2024.

Average investment securities were $2.2 billion for the six months ended June 30, 2025, compared to $2.5 billion for the same period in 2024.

Average interest-bearing deposits with other banks and other short term investments were $1.4 billion for the six months ended June 30, 2025 compared to $1.6 billion for the same period in 2024.

Interest income on loans, the largest component of interest income on earning assets, had a yield of 6.38% for the six months ended June 30, 2025, compared to 6.93% for the same period in 2024, a decrease of 55 basis points.

Average interest-bearing deposits increased to $8.2 billion for the six months ended June 30, 2025 from $7.3 billion for the six months ended June 30, 2024, while average noninterest-bearing demand deposit decreased to $1.9 billion for the six months ended June 30, 2025 from $2.1 billion for the six months ended June 30, 2024.

Average borrowings had a decrease from $1.7 billion for the six months ended June 30, 2024 to $521.8 million for the six months ended June 30, 2025.

Refer to the "Deposits and Other Borrowings" section below for further discussion of deposits and borrowings.

The table below presents the average balances and rates of the major categories of the Company's assets and liabilities for the three months ended March 31, 2025 and 2024.

Included in the table are measurements of interest rate spread and margin.

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 48

Table of Contents Management's Discussion and Analysis | Results of Operations | Net Interest Income and Net Interest Margin

The tables below present the average balances and rates of the major categories of the Company's assets and liabilities.

Included in the tables are measurements of interest rate spread and margin.

Interest rate spread is the difference (expressed as a percentage) between the interest rate earned on earning assets less the interest rate paid on interest-bearing liabilities.

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(dollars in thousands)

Three Months Ended March 31,

For the Three Months Ended June 30,

Balance Interest Average

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Customer repurchase agreements and federal funds purchased 34,387 250 2.92 % 38,599 330 3.44 %

Derivative collateral liability 12,710 118 3.72 % — — — %

Other short-term borrowings 245,291 2,360 3.86 % 1,682,684 21,202 5.07 %

Long-term borrowings 76,236 2,016 10.61 % — — — %

Total interest-bearing liabilities 8,687,505 83,656 3.86 % 8,894,772 98,378 4.45 %

Noninterest-bearing liabilities:

Noninterest-bearing demand 1,907,214 2,051,777

Other liabilities 142,124 151,324

Total noninterest-bearing liabilities 2,049,338 2,203,101

Shareholders’ equity 1,252,252 1,263,627

Total Liabilities and Shareholders’ Equity $ 11,989,095 $ 12,361,500

Net interest income $ 67,776 $ 71,353

Net interest spread 1.43 % 1.26 %

Net interest margin 2.37 % 2.40 %

Cost of funds 3.17 % 3.61 %

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 49

Table of Contents Management's Discussion and Analysis | Results of Operations | Net Interest Income and Net Interest Margin

Eagle Bancorp, Inc.

Consolidated Average Balances, Interest Yields And Rates (Unaudited)

(dollars in thousands)

For the Six Months Ended June 30,

Balance Interest Average

Interest earning assets:

Interest-bearing deposits with other banks and other short-term investments $ 1,378,565 $ 30,563 4.47 % $ 1,648,389 $ 44,430 5.42 %

Loans held for sale 7,836 284 7.31 % 4,023 100 5.00 %

Loans (1) (2)

7,938,038 251,075 6.38 % 7,996,074 275,510 6.93 %

Investment securities available-for-sale (2)

1,277,335 13,349 2.11 % 1,497,680 14,295 1.92 %

Investment securities held-to-maturity 925,938 9,999 2.18 % 1,003,253 10,790 2.16 %

Federal funds sold 2,325 51 4.42 % 10,054 208 4.16 %

Total interest earning assets 11,530,037 305,321 5.34 % 12,159,473 345,333 5.71 %

Noninterest earning assets 616,889 509,855

allowance for credit losses 125,837 96,343

Total noninterest earning assets $ 491,052 413,512

Total assets $ 12,021,089 $ 12,572,985

Liabilities and Shareholders’ Equity

Interest-bearing liabilities:

Interest-bearing transaction $ 1,429,165 $ 19,890 2.81 % $ 1,735,144 $ 32,930 3.82 %

Savings and money market 3,571,459 62,023 3.50 % 3,372,195 69,381 4.14 %

Time deposits 3,160,661 74,210 4.73 % 2,201,506 53,918 4.93 %

Total interest-bearing deposits 8,161,285 156,123 3.86 % 7,308,845 156,229 4.30 %

Customer repurchase agreements and federal funds purchased 35,473 510 2.90 % 37,341 645 3.47 %

Derivative collateral liability 16,268 468 5.80 % — — — %

Other short-term borrowings 445,580 10,754 4.87 % 1,739,773 42,408 4.90 %

Long-term borrowings 76,191 4,041 10.70 % — — — %

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(1) Loans placed on nonaccrual status are included in average balances.

Net loan fees and late charges included in interest income on loans totaled $3.8 million and $5.1 million, for the three months ended March 31, 2025, and 2024, respectively.

Net loan fees and late charges included in interest income on loans totaled $3.6 million and $7.4 million for the three and six months ended 2025, respectively, and $4.8 million and $9.1 million for the three and six months ended 2024, respectively.

(2) Interest and fees on loans and investments exclude tax equivalent adjustments.

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 50

Table of Contents Management's Discussion and Analysis | Results of Operations | Net Interest Income and Net Interest Margin

Rate/Volume Analysis of Net Interest Income

The rate/volume table below presents the composition of the change in net interest income for the period indicated, as allocated between the change in net interest income due to changes in the volume of average earning assets and interest-bearing liabilities, and the changes in net interest income due to changes in interest rates.

Three Months Ended March 31, 2025 Compared with

Three Months Ended March 31, 2024

Three Months Ended June 30, 2025 Compared with

Three Months Ended June 30, 2024

Six Months Ended June 30, 2025 Compared with

Six Months Ended June 30, 2024

(dollars in thousands) Change

Volume Change

(Decrease) Change

Volume Change

Interest earned on:

Interest-bearing deposits with other banks and other short-term investments $ (1,065) $ (3,754) $ (4,819) $ (7,273) $ (6,594) $ (13,867)

Loans held for sale 92 92 184 95 89 184

Loans (1,046) (11,531) (12,577) (2,000) (22,435) (24,435)

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Investment securities held-to-maturity (415) 3 (412) (832) 41 (791)

Interest bearing bank deposits (5,355) (3,704) (9,059)

Federal funds sold (118) — (118) (160) 3 (157)

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Time deposits 14,194 (2,193) 12,001 23,491 (3,199) 20,292

Derivative Collateral Liability

118 — 118 468 — 468

Customer repurchase agreements (36) (44) (80) (32) (103) (135)

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Those factors include historical losses based on internal and peer data, economic conditions and trends, the value and adequacy of collateral, volume and mix of the portfolio, performance of the portfolio, and internal loan processes of the Company.

Refer to the discussion under “Critical Accounting Policies and Estimates” above and in Note 1 to the Consolidated Financial Statements for an overview of the methodology management employs on a quarterly basis to assess the adequacy of the allowance and the provisions charged to expense.

Refer to the discussion under "Critical Accounting Policies and Estimates" above and in "Note 1 – Summary of Significant Accounting Policies" to the Consolidated Financial Statements for an overview of the methodology management employs on a quarterly basis to assess the adequacy of the allowance and the provisions charged to expense.

Also, refer to the table in the "Allowance for Credit Losses" section which reflects activity in the ACL.

The provision for credit losses on loans for the three months ended March 31, 2025 was $26.3 million and there were $11.2 million of net charge offs in its ACL compared to $35.2 million and $21.4 million respectively, during the same period in 2024.

The change in the provision for credit losses on the loan portfolio for the three months ended March 31, 2025 was primarily attributable to the replenishment of the reserve following net charge-offs of $11.2 million, as mentioned above, and an increase in the qualitative overlay.

The increase in the overlay relates to updated assumptions associated with the probability of default and probability of loss associated with commercial real estate office loans.

For a discussion of the adverse effects changes in government spending and the size of the federal workforce have had on our loan portfolio and provision for credit losses, and the associated risks of future increases in our provision for credit losses from these or further such changes, see "Item 1A.

Risk Factors" below.

The provision for credit losses on loans for the second quarter of 2025 was $138.2 million and there were $83.9 million of net charge offs in the ACL compared to $8.9 million and $2.3 million, respectively, for the second quarter of 2024.

The provision for credit losses on loans for the first half of 2025 was $164.5 million and there were $95.1 million of net charge offs in the ACL compared to $44.1 million and $23.7 million, respectively, for the first half of 2024.

Net charge-offs of $95.1 million during the first half of 2025 represented 2.40% of average loans held for investment on an annualized basis, an increase from net charge-offs of $23.7 million during same period in 2024, which represented 0.59% of average loans held for investment on an annualized basis.

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 51

Table of Contents Management's Discussion and Analysis | Results of Operations | Provision for Credit Losses

The change in the provision for credit losses on the loan portfolio for the three and six months ended June 30, 2025 was primarily attributable to the replenishment of the reserve following net charge-offs of $95.1 million and an increase in the qualitative overlay.

Charge-offs during the first half of 2025 were driven by elevated losses in the office and land loan portfolios, including a data center loan with underlying office exposure, as well as charge-offs related to assisted senior living and life sciences office properties.

The increase in charge-offs was primarily driven by continued market deterioration and the receipt of new information regarding collateral valuations and borrower performance, particularly within the office sector.

During the second quarter of 2025, we updated our strategy for resolving criticized and classified loans with the goal of accelerating dispositions.

In furtherance of this strategy, we obtained updated valuations on the underlying collateral for certain loans that resulted in significant charge offs related to actual and expected dispositions.

The increase in the CRE office overlay relates to updated assumptions associated with the PD and LGD rates, as well as downward risk ratings migration as further discussed in the "Allowance for Credit Losses" section below.

The provision for credit losses for the held-to-maturity securities portfolio was recorded primarily on several corporate bonds.

During the three months ended March 31, 2025, there was a reversal of provision for credit losses of $54 thousand for the held-to-maturity securities portfolios, compared to a provision expense of $1 thousand for the three months ended March 31, 2024.

The provision for credit losses for unfunded commitments is presented separately on the Statement of Operations.

During the three and six months ended June 30, 2025, there was a reversal of provision for credit losses of $46 thousand and $99 thousand, respectively, for the held-to-maturity securities portfolios, compared to a provision expense of $55 thousand and $56 thousand, respectively, for the three and six months ended June 30, 2024.

The provision for credit losses for unfunded commitments is presented separately on the Consolidated Statements of Operations.

This provision considers the probability that unfunded commitments will fund, among other factors.

There was a reversal of $297 thousand in three months ended March 31, 2025, compared to a provision expense of $456 thousand in three months ended March 31, 2024, primarily due to lower unfunded commitments in our construction portfolio during the current period.

There was a provision expense of $1.8 million and $1.5 million, respectively, for the three and six months ended June 30, 2025, compared to $608 thousand and $1.1 million, respectively, for the three and six months ended June 30, 2024, primarily due to higher unfunded commitments in our commercial and industrial portfolio during the current period.

Noninterest Income

Noninterest income includes service charges on deposits, gain on sale of investment securities, income from BOLI and other income.

The following table summarizes the comparative noninterest income for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

(dollars in thousands) 2025 2024 Dollar Change Percent Change

Noninterest income includes service charges on deposits, gain/(loss) on sale of investment securities, income from BOLI and other income.

The table below summarizes the comparative noninterest income.

For the Three Months Ended June 30,

(dollars in thousands) 2025 2024 Dollar Change

Service charges on deposits $ 1,771 $ 1,653 $ 118

Net loss on sale of investment securities 4 4 — — %

Gain on sale of loans — 37 (37)

Net gain (loss) on sale of investment securities (1,854) 3 (1,857)

Increase in the cash surrender value of bank-owned life insurance 5,161 709 4,452

1 unchanged sentence

Total $ 6,414 $ 5,332 $ 1,082

Total noninterest income for the three months ended March 31, 2025 was $8.2 million as compared to $3.6 million for the three months ended March 31, 2024.

This 129% increase was primarily driven by a new BOLI investment of $200 million in the quarter ended March 31, 2025.

For the Six Months Ended June 30,

(dollars in thousands) 2025 2024 Dollar Change

Service charges on deposits $ 3,514 $ 3,352 $ 162

Gain on sale of loans — 37 (37)

Net gain (loss) on sale of investment securities (1,850) 7 (1,857)

Increase in the cash surrender value of bank-owned life insurance 9,443 1,412 8,031

Other income 3,514 4,113 (599)

Total $ 14,621 $ 8,921 $ 5,700

The increase in total noninterest income in the second quarter of 2025 compared to the second quarter of 2024 was primarily driven by continued non-interest income from a new BOLI investment of $200 million made in the first quarter of 2025, partially offset by $1.9 million loss on the sale of investment securities during the second quarter of 2025 and a reduction in other income primarily due to lower gains from the sale of mortgage servicing rights compared to 2024.

The increase in total noninterest income in the first half of 2025 as compared to the first half of 2024 was primarily driven by a new BOLI investment of $200 million in the first half of 2025, partially offset by $1.9 million loss on the sale of investment securities during the first half of 2025.

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 52

Table of Contents Management's Discussion and Analysis | Results of Operations | Noninterest Expense

Noninterest Expense

Total noninterest expense includes salaries and employee benefits, premises and equipment expenses, marketing and advertising, data processing, legal, accounting and professional fees, FDIC insurance assessments and other expenses.

The following table summarizes the comparative noninterest expense for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

The table below summarizes the comparative noninterest expense.

For the Three Months Ended June 30,

(dollars in thousands) 2025 2024 Dollar Change Percent Change

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FDIC insurance 8,077 5,917 2,160 37 %

Goodwill impairment — 104,168 (104,168) (100) %

Other expenses 3,447 3,880 (433) (11) %

Total $ 43,470 $ 146,491 $ (103,021) (70) %

Total noninterest expense was $45.5 million for the three months ended March 31, 2025, as compared to $40.0 million for the three months ended March 31, 2024.

This 14% increase was primarily due to higher FDIC deposit insurance assessments during the current period.

FDIC insurance expense was $9.0 million for the three months ended March 31, 2025 as compared to $6.4 million for same period in 2024, an increase of $2.5 million, or 40%.

For the Six Months Ended June 30,

(dollars in thousands) 2025 2024 Dollar Change Percent Change

Salaries and employee benefits $ 43,908 $ 43,496 $ 412 1 %

Premises and equipment expenses 6,222 5,953 269 5 %

Marketing and advertising 2,515 2,521 (6) — %

Data processing 8,271 6,788 1,483 22 %

Legal, accounting and professional fees 4,672 5,212 (540) (10) %

FDIC insurance 17,039 12,329 4,710 38 %

Goodwill impairment — 104,168 (104,168) (100) %

Other expenses 6,294 6,021 273 5 %

Total $ 88,921 $ 186,488 $ (97,567) (52) %

The decrease in total noninterest expense in the second quarter of 2025, as compared to the second quarter of 2024, was primarily due to the $104.2 million goodwill impairment recorded in the second quarter of 2024 and a $1.2 million decrease in legal, accounting and professional fees in the current period, offset by $2.2 million higher FDIC deposit insurance assessments.

The decrease in total noninterest expense in the first half of 2025 as compared to the first half of 2024 was primarily due to the $104.2 million 2024 goodwill impairment, partially offset by $4.7 million higher FDIC deposit insurance assessments and $1.5 million higher data processing costs during the first half of 2025.

The major components of other expenses include regulatory assessment fees, director compensation, real estate taxes, and insurance expenses.

Other expenses were $2.8 million for three months ended March 31, 2025 as compared to $2.1 million for same period in 2024, an increase of 33%.

The increase in three months ended March 31, 2025, as compared to 2024, was primarily due to an increase in real estate taxes.

The efficiency ratio, which measures the ratio of noninterest expense to total net revenue, was 61.54% for the three months ended March 31, 2025 as compared to 51.09% for the same period in 2024.

This increase in the efficiency ratio was primarily driven by higher FDIC insurance, as discussed above, and a decrease in net interest income .

As a percentage of average assets, total noninterest expense (annualized) was 1.52% for the three months ended March 31, 2025 as compared to 1.26% for the same period in 2024.

The increase for the three months ended March 31, 2025 as compared to the same period 2024 was primarily due to a decrease in average interest earning assets and an increase in FDIC assessment.

As a percentage of average assets, total noninterest expense (annualized) was 1.45% and 1.48% for the three and six months ended June 30, 2025 as compared to 4.8% and 3.0% for the same period in 2024.

These decreases for the three and six months ended June 30, 2025 as compared to the same period 2024 were primarily due to no goodwill impairment during the current period, partially offset by an increase in FDIC deposit insurance assessments.

Income Tax Expense

Income tax expense was $772 thousand for the three months ended March 31, 2025 as compared to $3.0 million for the three months ended March 31, 2024.

The decrease in the income tax provisions was primarily driven by a decrease in the pre-tax income, and lower tax expense related to the vesting of stock-based compensation.

The effective tax rate for the three months ended March 31, 2025 was 31.5%.

The effective tax rate for the first three months of 2025 varies from the 21% statutory rate primarily due to the tax expense related to the excess initial fair values of stock awards that were expensed compared to the fair market value at vesting, net with the tax benefit of tax-exempt interest income and tax-exempt income from the increase in the cash surrender value of BOLI.

For the three and six months ended June 30, 2025, income tax benefit was $39.4 million and $38.7 million, respectively, compared to income tax expense of $4.4 million and $7.4 million for the three and six months ended June 30, 2024, respectively.

The decrease in the income tax expense comparing to prior year was primarily due to a decrease in the pre-tax income during the first half of 2025, and the 2024 goodwill impairment that was not deductible for tax purposes.

The effective tax rate for the three and six months ended June 30, 2025 was 36.1% and 36.2%, respectively.

The effective tax rate for the first half of 2025 varies from the 21% statutory rate primarily due to the tax benefit from the low-income housing tax credit equity investment, tax-exempt interest income and tax-exempt income from the increase in the cash surrender value of BOLI.

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 53

Table of Contents Management's Discussion and Analysis | Balance Sheet Analysis

Balance Sheet Analysis

Total assets as of March 31, 2025 were $11.3 billion as compared to $11.1 billion as of December 31, 2024, a 2% increase.

The increase in total assets from December 31, 2024 to March 31, 2025 was primarily driven by an increase in BOLI asset due to additional insurance coverage purchased in the current period.

See "Other Earnings Assets" section below for further discussion on BOLI.

Total loans held for investment at amortized cost basis, the largest component of assets, were approximately $7.94 billion as of March 31, 2025, and remained relatively flat as compared to $7.93 billion as of December 31, 2024.

There was $15.3 million in loans held for sale as of March 31, 2025 and none as of December 31, 2024.

Total assets as of June 30, 2025 were $10.6 billion as compared to $11.1 billion as of December 31, 2024, a 5% decrease.

The decrease in total assets from December 31, 2024 to June 30, 2025 was primarily driven by a decrease of $379.8 million in interest-bearing deposits with banks and other short-term investments (from $619.0 million as of December 31, 2024 to $239.2 million as of June 30, 2025) which was a result of the Bank’s efforts to manage its liquidity position in a manner that has less of an adverse effect on its net interest margin during the current period.

Total loans held for investment at amortized cost basis, the largest component of assets, were approximately $7.7 billion as of June 30, 2025, as compared to $7.9 billion as of December 31, 2024.

There was $37.6 million in loans held for sale as of June 30, 2025 and none as of December 31, 2024.

Refer to the "Loan Portfolio" section below for further discussion on loans.

Investment securities, at amortized cost net of the allowance for credit losses, were $2.25 billion as of March 31, 2025 as compared to $2.35 billion as of December 31, 2024, a $93.0 million or 4% decrease.

This decrease was primarily driven by maturities and paydowns of investment securities.

In terms of funding, total deposits as of March 31, 2025 were $9.3 billion as compared to $9.1 billion as of December 31, 2024, an increase of 2%.

Total borrowed funds (excluding customer repurchase agreements) were $566.2 million and $566.1 million as of March 31, 2025 and December 31, 2024, respectively.

Investment securities, at amortized cost net of the allowance for credit losses, were $2.2 billion as of June 30, 2025 as compared to $2.3 billion as of December 31, 2024, an 8% decrease, primarily driven by sales, maturities and paydowns of investment securities.

The Bank does not plan to reinvest these proceeds back into the investment securities portfolio at this time.

In terms of funding, total deposits as of June 30, 2025 were $9.12 billion as compared to $9.13 billion as of December 31, 2024, a decrease of 0.1%.

Total borrowed funds (excluding customer repurchase agreements) were $126.3 million and $566.1 million as of June 30, 2025 and December 31, 2024, respectively.

The components and drivers of the change are discussed in the "Deposits and Other Borrowings" section below.

Total shareholders’ equity as of March 31, 2025 was $1.24 billion as compared to $1.23 billion as of December 31, 2024, a 2% increase.

The increase in shareholders’ equity in 2025 was primarily from the net income from operations, partially offset by payment of cash dividends.

The ratio of common equity to total assets was 11.00% as of March 31, 2025 as compared to 11.02% as of December 31, 2024.

Book value per share was $40.99 as of March 31, 2025, a 1.0% increase over $40.60 as of December 31, 2024.

In addition, the tangible common equity ratio was 11.00% as of March 31, 2025, compared to 11.02% as of December 31, 2024.

Tangible book value per share was $40.99 as of March 31, 2025, a 1.0% increase from $40.59 as of December 31, 2024.

Total shareholders’ equity as of June 30, 2025 was $1.19 billion as compared to $1.23 billion as of December 31, 2024, a 3% decrease.

The decrease in shareholders’ equity in 2025 was primarily from the net loss from operations of $68.1 million, and payment of cash dividends of $10.0 million.

The ratio of common equity to total assets was 11.18% as of June 30, 2025 as compared to 11.02% as of December 31, 2024.

Book value per share was $39.03 as of June 30, 2025, a 3.87% decrease from $40.60 as of December 31, 2024.

In addition, the tangible common equity ratio was 11.18% as of June 30, 2025, compared to 11.02% as of December 31, 2024.

Tangible book value per share was $39.03 as of June 30, 2025, a 3.84% decrease from $40.59 as of December 31, 2024.

Refer to the "Use of Non-GAAP Financial Measures" section for additional detail and a reconciliation of GAAP to non-GAAP financial measures.

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The Company's capital ratios remain substantially in excess of regulatory minimums and buffer requirements.

The total risk based capital ratio was 15.86% as of March 31, 2025 and December 31, 2024.

The common equity tier one capital ("CET1") risk based capital ratio was 14.61% as of March 31, 2025, as compared to 14.63% as of December 31, 2024.

The tier 1 risk based capital ratio was 14.61% as of March 31, 2025, as compared to 14.63% as of December 31, 2024.

The tier 1 leverage ratio was 11.11% as of March 31, 2025, as compared to 10.74% as of December 31, 2024.

The total risk based capital ratio was 15.27% as of June 30, 2025, as compared to 15.86% as of December 31, 2024.

The common equity tier one capital ("CET1") risk based capital ratio was 14.01% as of June 30, 2025, as compared to 14.63% as of December 31, 2024.

The tier 1 risk based capital ratio was 14.01% as of June 30, 2025, as compared to 14.63% as of December 31, 2024.

The tier 1 leverage ratio was 10.63% as of June 30, 2025, as compared to 10.74% as of December 31, 2024.

Loan Portfolio

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We believe superior customer service, local decision making and accelerated turnaround time from application to closing have been significant factors in growing the loan portfolio and meeting the lending needs in the markets served, while maintaining sound asset quality.

Loans outstanding were $7.94 billion as of March 31, 2025, as compared to $7.93 billion as of December 31, 2024, an increase of $8.4 million or 0.1%.

Loans outstanding were $7.7 billion as of June 30, 2025, as compared to $7.9 billion as of December 31, 2024, a decrease of $213.2 million or 2.7%.

The loan portfolio mix continues to evolve as the Bank has experienced a reduction in commercial loans and owner-occupied construction loans, offset by increases in owner-occupied commercial real estate loans and fundings of ongoing construction projects for commercial and residential properties.

Market rates year to date in 2025 for our new loan originations on average have been fairly consistent with the market rates at the end of 2024, since short-term interest rates remained unchanged in the first quarter of 2025.

We continue to see opportunities for growth in the commercial lending market in our focused sectors;

1 unchanged sentence

Following origination, we continue to monitor our borrowers' business plans and assess primary and alternative sources for loan repayment and, if necessary, obtain collateral to mitigate credit loss in the event of default.

The Bank has a large portion of its loan portfolio related to real estate, with 83% consisting of commercial real estate and real estate construction loans as of March 31, 2025.

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 54

Table of Contents Management's Discussion and Analysis | Balance Sheet Analysis | Loan Portfolio

The Bank has a large portion of its loan portfolio related to real estate, with 83% consisting of commercial real estate and real estate construction loans as of June 30, 2025.

Non-owner occupied commercial real estate represented 64% of the loan portfolio while the remaining 19% is represented by the "owner occupied - commercial real estate" and "construction - C&I (owner occupied)" loans.

Loans, net of amortized deferred fees and costs, as of March 31, 2025 and December 31, 2024 by major category are summarized below.

March 31, 2025

The table below presents loans, net of amortized deferred fees and costs by major category.

June 30, 2025

December 31, 2024

13 unchanged sentences

$ 7,537,868 $ 7,820,498

(1) Excludes accrued interest receivable of $41.9 million and $42.9 million as of March 31, 2025 and December 31, 2024, respectively, which is recorded in other assets.

(1) Excludes accrued interest receivable of $37.8 million and $42.9 million as of June 30, 2025 and December 31, 2024, respectively, which is recorded in other assets.

As noted above, a significant portion of the loan portfolio consists of commercial, construction and commercial real estate loans, primarily made in the Washington, D.C.

5 unchanged sentences

The Company's concentration in the Washington, D.C.

metro area, includes "Washington's Maryland Suburbs," which comprise Frederick, Prince George's and Montgomery counties and "Northern Virginia," which comprises Alexandria, Arlington, Falls Church, Fairfax, Loudoun and Prince William counties.

As of March 31, 2025, 31.1%, 26.9%, 23.1%, 6.1%, and 12.8% of the loan portfolio, as a percentage of total amortized cost, was concentrated in Washington D.C., Washington's Maryland Suburbs, Northern Virginia, other counties in Maryland and other locations in the United States, respectively.

metro area includes "Washington's Maryland Suburbs," which comprises Frederick, Prince George's and Montgomery counties, and "Northern Virginia," which comprises Alexandria, Arlington, Falls Church, Fairfax, Loudoun and Prince William counties.

As of June 30, 2025, 30.2%, 27.5%, 22.0%, 6.8%, and 13.5% of the loan portfolio, as a percentage of total amortized cost, was concentrated in Washington D.C., Washington's Maryland Suburbs, Northern Virginia, other counties in Maryland and other locations in the United States, respectively.

As of December 31, 2024, 31.3%, 27.4%, 23.9%, 5.8% and 11.6% of the loan portfolio, as a percentage of total amortized cost, was concentrated in Washington D.C., Washington's Maryland Suburbs, Northern Virginia, other counties in Maryland and other locations in the United States, respectively.

While we remain cautious with regard to CRE market conditions, principally office, the strength of the Washington D.C.

metro area in certain sectors, particularly multi-family commercial real estate and the housing market, continue to drive premiums for well-located properties.

As part of its lending strategy, the Company maintains a substantial portfolio of CRE loans, with $6.5 billion and $6.5 billion, or 81.8% and 81.5% of total loans, of amortized cost outstanding as of March 31, 2025 and December 31, 2024, respectively.

As part of its lending strategy, the Company maintains a substantial portfolio of CRE loans, with $6.3 billion and $6.5 billion, or 81.2% and 81.5% of total loans, of amortized cost outstanding as of June 30, 2025 and December 31, 2024, respectively.

Management meets regularly in order to monitor its existing CRE loan portfolio and to evaluate the pipeline for CRE loan investment.

Income producing CRE loans collateralized by office properties comprised approximately $847.7 million and $862.2 million, or 10.7% and 10.9% of total loans, as of March 31, 2025 and December 31, 2024, respectively.

Office loans within Washington D.C., Washington's Maryland Suburbs and Northern Virginia were $792.9 million and $795.0 million, or 10.0% and 10.0% of total loans, as of March 31, 2025 and December 31, 2024, respectively.

Income producing CRE loans collateralized by office properties comprised approximately $819.8 million and $862.2 million, or 10.6% and 10.9% of total loans, as of June 30, 2025 and December 31, 2024, respectively.

Office loans within Washington D.C., Washington's Maryland Suburbs and Northern Virginia were $766.5 million and $795.0 million, or 9.9% and 10.0% of total loans, as of June 30, 2025 and December 31, 2024, respectively.

As a percentage of total principal balance of income producing - CRE office loans, 37.8%, 34.6%, 12.7%, and 14.9% were located in Washington's Maryland Suburbs, Northern Virginia, the central business district of Washington D.C., and Washington, D.C.

(outside the central business district,) respectively, as of March 31, 2025.

The following table summarizes the Company's income producing - commercial real estate loans, at principal, by collateral location and type, as of March 31, 2025:

(dollars in thousands)

(outside the central business district,) respectively, as of June 30, 2025.

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 55

Table of Contents Management's Discussion and Analysis | Balance Sheet Analysis | Loan Portfolio

The table below summarizes the Company's income producing - commercial real estate loans, at principal, by collateral location and type.

As of June 30, 2025

Maryland Virginia

(dollars in thousands) Washington, D.C.

Washington, D.C.

Washington Suburbs

Northern Virginia

Percent of Total

Other Northern Virginia Other Other Total Percent of Total

Collateral Type:

Hotel & motel $ 136,308 $ 75,290 $ 101,500 $ 60,618 $ — $ 21,152 $ 394,868 10 %

$136,937 $75,367 $101,822 $60,223 $— $21,348 $ 395,697 11%

868 72,053 40,169 36,311 19,549 — 168,950 5%

280,673 43,185 371 54,335 25,647 4,954 409,165 10%

394,167 192,170 310 117,593 84,666 48,137 837,043 21%

217,505 327,144 4,229 249,765 50,625 — 849,268 21%

78,207 95,840 60,324 73,820 64,883 1,282 374,356 9%

Industrial 862 71,886 39,973 36,605 19,410 — 168,736 4 %

Mixed use 201,894 42,908 3,371 50,700 20,755 4,930 324,558 9 %

Multifamily 393,887 192,028 308 117,583 84,485 48,108 836,399 22 %

Office 226,683 306,016 4,204 235,128 49,176 — 821,207 22 %

Retail 68,732 64,230 59,889 73,458 64,703 1,276 332,288 9 %

Single / 1-4 Family & Res.

66,583 2,087 2,088 10,032 6,427 4,029 91,246 2%

179,710 175,491 28,280 418,377 8,366 38,899 849,123 21%

$1,354,650 $983,337 $237,593 $1,020,456 $260,163 $118,649 $3,974,848 100%

Condo 64,430 2,050 2,069 7,954 6,395 4,017 86,915 2 %

Other 184,190 171,152 28,221 383,905 8,233 35,674 811,375 22 %

Total $ 1,276,986 $ 925,560 $ 239,535 $ 965,951 $ 253,157 $ 115,157 $ 3,776,346 100 %

Percent of total 34% 25% 6% 26% 6% 3% 100%

34% 25% 6% 26% 6% 3% 100%

Percent of Principal by Loan Size:

Less than $1 million 2 % 2 % 2 % 1 % 2 % 2 %

2 % 2 % 2 % 1 % 2 % 2 %

$1 million to $5 million 10 % 10 % 21 % 7 % 9 % 14 %

9 % 10 % 21 % 8 % 11 % 16 %

$5 million to $10 million 6 % 7 % 21 % 5 % 13 % 32 %

7 % 7 % 21 % 5 % 13 % 31 %

$10 million to $25 million 19 % 13 % 25 % 37 % 40 % 20 %

20 % 13 % 25 % 37 % 39 % 20 %

$25 million to $50 million 46 % 27 % 31 % 43 % 36 % 32 %

46 % 29 % 31 % 37 % 35 % 31 %

Greater than $50 million 17 % 41 % — % 7 % — % — %

16 % 39 % — % 12 % — % — %

100 % 100 % 100 % 100 % 100 % 100 %

As of March 31, 2025 and December 31, 2024, $302.0 million and $287.0 million, respectively, of principal of CRE loans collateralized by office properties were criticized or classified.

Total 100 % 100 % 100 % 100 % 100 % 100 %

As of June 30, 2025 and December 31, 2024, $270.3 million and $287.0 million, respectively, of principal of CRE loans collateralized by office properties were criticized or classified.

The Company is exploring ways to optimize its balance sheet to reduce the Company’s commercial real estate loan concentration, including ways to reduce exposure to short- and intermediate-term valuation risks for its office loans.

There is no assurance that the Company will decide to seek to implement, or ultimately implement, any balance sheet optimization strategy, and any strategy the Company decides to pursue may not be successful.

In addition, future decisions the Company makes in connection with its balance sheet optimization efforts could result in higher credit costs and could also have a material impact

on our financial condition and results of operations in the period or periods any relevant decisions are made or strategies implemented.

In addition, future decisions the Company makes in connection with its balance sheet optimization efforts could continue to result in elevated credit costs and could also have a material impact on our financial condition and results of operations in the period or periods any relevant decisions are made or strategies implemented.

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 56

Table of Contents Management's Discussion and Analysis | Balance Sheet Analysis | Loan Maturity

Loan Maturity

The following table sets forth the time to contractual maturity of the loan portfolio as of March 31, 2025.

The table below sets forth the time to contractual maturity of the loan portfolio.

Loans are shown in the period based on final contractual maturity.

Demand loans, having no contractual maturity, and overdrafts are reported as due in one year or less.

March 31, 2025

(dollars in thousands) Total One Year or Less (1)

Over One Year to Five Years Over Five Years to Fifteen Years Over Fifteen Years

As of June 30, 2025

(dollars in thousands) Total One Year or Less Over One Year to Five Years Over Five Years to Fifteen Years Over Fifteen Years

Commercial $ 1,207,513 $ 444,460 $ 615,999 $ 144,186 $ 2,868

12 unchanged sentences

Total loans $ 7,721,664 $ 3,208,261 $ 3,372,979 $ 743,335 $ 397,089

(1) Income producing CRE office loans with total principal of $849.3 million and multifamily loans with total principal of $837.0 million as of March 31, 2025 are included within income producing - commercial real estate.

(1) Income producing CRE office loans with total principal of $821.2 million and multifamily loans with total principal of $836.4 million as of June 30, 2025 are included within income producing - commercial real estate.

The charts below represent their maturities schedules.

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Those factors include economic conditions and trends, the value and adequacy of collateral, volume and mix of the portfolio, performance of the portfolio and internal loan processes of the Company and Bank.

A full discussion of the accounting for ACL is contained in Note 1 to the Consolidated Financial Statements and activity in the ACL is contained in Note 4 to the Consolidated Financial Statements.

Also, refer to “Critical Accounting Policies and Estimates” above for further discussion of the methodology which management employs to maintain an adequate ACL, as well as the discussion under the caption “Provision for Credit Losses” above for a discussion of the Company's calculation of the provision for credit losses during the three months ended March 31, 2025 and 2024.

The ACL for loans as of March 31, 2025 was $129.5 million, which reflected a $15.1 million increase from $114.4 million as of December 31, 2024, reflecting a provision for credit losses of $26.3 million and $11.2 million in net charge-offs during the three months ended March 31, 2025.

Net charge-offs of $11.2 million during three months ended March 31, 2025 represented 0.57% of average loans held for investment, a decrease from net charge-offs of $21.4 million during same period in 2024, which represented 1.07% of average loans held for investment.

Net charge-offs during the three months ended March 31, 2025, included $11.0 million of charge offs on three CRE office lending relationships.

The ACL represented 1.63% of total loans as of March 31, 2025 as compared to 1.44% as of December 31, 2024.

As of March 31, 2025, the allowance represented 65% of nonperforming loans as compared to 55% as of December 31, 2024.

A full discussion of the accounting for ACL is contained in "Note 1 – Summary of Significant Accounting Policies" to the Consolidated Financial Statements and activity in the ACL is contained in "Note 4 – Loans and Allowance for Credit Losses" to the Consolidated Financial Statements.

Also, refer to "Critical Accounting Policies and Estimates" above for further discussion of the methodology which management employs to maintain an adequate ACL, as well as "Provision for Credit Losses" above for a discussion of the Company's calculation of the provision for credit losses during the six months ended June 30, 2025 and 2024.

The ACL for loans as of June 30, 2025 was $183.8 million, which reflected an increase of $69.4 million from $114.4 million as of December 31, 2024.

The ACL represented 2.38% of total loans as of June 30, 2025 as compared to 1.44% as of December 31, 2024.

As of June 30, 2025, the allowance represented 81.17% of nonperforming loans as compared to 55% as of

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 57

Table of Contents Management's Discussion and Analysis | Balance Sheet Analysis | Allowance for Credit Losses

December 31, 2024.

The increase in the ACL for loans during the current period was primarily due to increased reserves for the Bank's CRE office overlay.

The overlay increased as charge-offs taken during the current period, and negative risk ratings migrations within the CRE office portfolio, were incorporated into the calculation.

Negative risk ratings migrations within the CRE office portfolio were primarily a result of continued market deterioration.

In addition, the ACL on individually assessed loans also increased as updated valuation information was received, primarily on loans that migrated to nonperforming status during the current period.

As part of its comprehensive loan review process, the Bank’s Risk Committee evaluates loans which are past due 30 days or more.

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The Company believes it has taken a prudent posture with respect to risk rating its loan portfolio.

As of March 31, 2025 and December 31, 2024, loans rated special mention had an amortized cost of $272.9 million and $244.8 million, respectively, and loans rated substandard had an amortized cost of $501.6 million and $426.4 million, respectively.

The increase in special mention loans was primarily attributable to additions in C&I loans and income producing - commercial real estate and commercial loans.

The increases in substandard loans were primarily attributable to additions in CRE loans, particularly in income producing - commercial real estate and owner-occupied - commercial real estate loans.

As of March 31, 2025, 100% and 51% of special mention and substandard loans, respectively, were current.

As of June 30, 2025 and December 31, 2024, loans rated special mention had an amortized cost of $173.3 million and $244.8 million, respectively, and loans rated substandard had an amortized cost of $702.1 million and $426.4 million, respectively.

The increase in substandard loans was primarily attributable to additions in CRE loans, particularly in income producing - commercial real estate.

As of June 30, 2025, 100% and 64% of special mention and substandard loans, respectively, were current.

Based upon their status as potential problem loans, loans risk rated special mention or substandard receive heightened scrutiny and ongoing intensive risk management.

Additionally, the Company's loan loss allowance methodology incorporates increased reserve factors for certain loans considered potential problem loans as compared to the general portfolio.

Management, being aware of the loan growth experienced by the Bank and the risks facing CRE, is intent on maintaining strong portfolio management and a strong risk rating process.

Management, being aware of the risks facing CRE, is intent on maintaining strong portfolio management and a strong risk rating process.

The Bank provides analysis of credit requests and the management of problem credits.

3 unchanged sentences

The loan portfolio analysis process is ongoing and proactive to support the Company's objective of maintaining a portfolio of quality credits and quickly identifying weaknesses before they become more severe.

As of March 31, 2025 and December 31, 2024, the Company's performing office coverage ratio, which calculates the ACL attributable to loans collateralized by performing office properties as a percentage of total loans, was 5.78% and 3.81%, respectively.

The following table sets forth activity in the allowance for credit losses:

Three Months Ended March 31,

As of June 30, 2025 and December 31, 2024, the Company's performing office coverage ratio, which calculates the ACL attributable to loans collateralized by performing office properties as a percentage of total loans, was 11.54% and 3.81%, respectively.

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 58

Table of Contents Management's Discussion and Analysis | Balance Sheet Analysis | Allowance for Credit Losses

The table below presents activity in the allowance for credit losses.

Six Months Ended June 30,

(dollars in thousands) 2025

Balance at beginning of period $ 114,390 $ 85,940

$ 114,390 $ 85,940

Commercial (968) (2,587)

5 unchanged sentences

Commercial 215 166

Income producing - commercial real estate 329 185

Owner occupied - commercial real estate 47 47

3 unchanged sentences

Balance at end of period $ 183,796 $ 106,301

$ 129,469 $ 99,684

Annualized ratio of net charge-offs to average loans outstanding during the period 2.40 % 0.59 %

0.57 % 1.07 %

The following table reflects the allocation of the ACL as of March 31, 2025 and December 31, 2024 by loan category and the percentage of allowance in each category.

The allocation of the allowance as of March 31, 2025 includes allowance for credit losses of $16.9 million against individually assessed loans of $201.0 million, as compared to allowance for credit losses of $17.1 million against individually assessed loans of $208.7 million as of December 31, 2024.

The table below displays the allocation of the ACL by loan category and the percentage of allowance in each category.

The allocation of the allowance as of June 30, 2025 includes the allowance for credit losses of $28.5 million against individually assessed loans of $227.0 million, as compared to allowance for credit losses of $17.1 million against individually assessed loans of $208.7 million as of December 31, 2024.

The allocation of the allowance to each category is not necessarily indicative of future losses or charge-offs and does not restrict the usage of the allowance to absorb losses in any category.

March 31, 2025

June 30, 2025

December 31, 2024

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Nonperforming Assets

The Company’s level of nonperforming assets, which is comprised of the amortized cost of loans delinquent 90 days or more, and nonaccrual loans, which includes the nonperforming portion of loan modifications, and the carrying value of other real estate owned ("OREO") totaled $202.9 million as of March 31, 2025, representing 1.79% of total assets, as compared to $211.4 million as of December 31, 2024, representing 1.90% of total assets.

The decrease is primarily due to the changes in nonperforming loans discussed below.

The Company had no accruing loans that were 90 days or more past due as of March 31, 2025 and December 31, 2024.

The Company’s level of nonperforming assets, which is comprised of the amortized cost of loans delinquent 90 days or more, and nonaccrual loans, which includes the nonperforming portion of loan modifications, and the carrying value of other real estate owned ("OREO"), totaled $228.9 million as of June 30, 2025, representing 2.16% of total assets, as compared to $211.4 million as of December 31, 2024, representing 1.90% of total assets.

The increase is primarily due to the changes in nonperforming loans discussed below.

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 59

Table of Contents Management's Discussion and Analysis | Balance Sheet Analysis | Nonperforming Assets

The Company had no accruing loans that were 90 days or more past due as of June 30, 2025 and December 31, 2024.

Management prioritizes remaining attentive to early signs of deterioration in borrowers’ financial conditions and to taking action designed to mitigate risk.

The Company places loans on nonaccrual status if it deems collection to be doubtful.

The Company believes, based on its loan portfolio risk analysis that its ACL at 1.63% of total loans as of March 31, 2025, is adequate to absorb expected credit losses within the loan portfolio at that date.

Total nonperforming loans had an amortized cost of $200.4 million as of March 31, 2025, representing 2.52% of total loans, compared to $208.7 million as of December 31, 2024, representing 2.63% of total loans.

The decrease was primarily from the charge offs on two income-producing commercial real estate loans and one owner-occupied commercial real estate loan.

The Company believes, based on its loan portfolio risk analysis that its ACL at 2.38% of total loans as of June 30, 2025, is adequate to absorb expected credit losses within the loan portfolio at that date.

Total nonperforming loans had an amortized cost of $226.4 million as of June 30, 2025, representing 2.93% of total loans, compared to $208.7 million as of December 31, 2024, representing 2.63% of total loans.

This increase was primarily driven by additions in office and land property categories within nonperforming loans.

The CECL standard allows for institutions to evaluate individual loans in the event that the asset does not share similar risk characteristics with its original segmentation.

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The allowance may be increased, adjustments may be made in the allocation of the allowance, or partial charge-offs may be taken to further write-down the carrying value of the loan.

During the three months ended March 31, 2025, the Bank modified 7 loans with a total amortized cost of $83.0 million as of March 31, 2025 (1.0% of the loan portfolio).

These loans received extended loan terms of between approximately seven to twenty-one months.

As of March 31, 2025, the payment status of four loans modified in the preceding twelve months, totaling $95.0 million of amortized cost basis, included two loans with an amortized cost basis of $10.6 million which were 30 to 89 days past due, and the other two loans with a total amortized cost basis of $84.4 million which were on nonaccrual status.

As of March 31, 2025, additional loans that were modified in the preceding twelve months which were performing under their modified terms totaled $228.9 million of amortized cost basis.

Management, from time-to-time and in the ordinary course of business, implements renewals, modifications, extensions and/or changes in terms of loans to borrowers who have the ability to repay on reasonable market-based terms, as circumstances may warrant, and therefore, such modifications are not considered to be loan restructurings to a borrower experiencing financial difficulty, as the accommodation of a borrower's request does not rise to the level of a concession if the modified transaction is at market rates and terms and/or the borrower is not experiencing financial difficulty.

(1) adverse weather conditions may create a short term cash flow issue for an otherwise profitable retail business which suggests a

temporary interest only period on an amortizing loan;

During the six months ended June 30, 2025, the Bank modified 24 loans with a total amortized cost of $200.1 million as of June 30, 2025 (2.6% of the loan portfolio).

These loans received extended loan terms of between approximately 3 to 36 months.

As of June 30, 2025, the payment status of ten loans modified in the preceding twelve months, totaling $279.7 million of amortized cost basis, included one loan with an amortized cost basis of $5.7 million which was 30 to 89 days past due, and the other nine loans with a total amortized cost basis of $79.5 million which were on nonaccrual status.

As of June 30, 2025, additional loans that were modified in the preceding twelve months which were performing under their modified terms totaled $194.5 million of amortized cost basis.

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 60

Table of Contents Management's Discussion and Analysis | Balance Sheet Analysis | Nonperforming Assets

difficulty, as the accommodation of a borrower's request does not rise to the level of a concession if the modified transaction is at market rates and terms and/or the borrower is not experiencing financial difficulty.

(1) adverse weather conditions may create a short term cash flow issue for an otherwise profitable retail business which suggests a temporary interest only period on an amortizing loan;

(2) there may be delays in absorption on a real estate project which reasonably suggests extension of the loan maturity at market terms;

or (3) there may be maturing loans to borrowers with demonstrated repayment ability who are not in a position at the time of maturity to obtain alternate long-term financing.

Included in nonperforming assets as of March 31, 2025 is OREO of $2.5 million, consisting of five foreclosed properties, compared to OREO of $2.7 million, consisting of five foreclosed properties as of December 31, 2024.

Included in nonperforming assets as of June 30, 2025 is OREO of $2.5 million, consisting of five foreclosed properties, compared to OREO of $2.7 million, consisting of five foreclosed properties as of December 31, 2024.

OREO properties are carried at the lower of cost or at fair value less estimated costs to sell.

1 unchanged sentence

Generally, the Company would obtain updated appraisals or evaluations where it has reason to believe, based upon market indications (such as comparable sales, a scenario in which the Company is considering legitimate offers below carrying value, broker indications and similar factors), that the current appraisal does not accurately reflect current value.

There were two OREO sales in three months ended March 31, 2025 and two in three months ended March 31, 2024, generating proceeds of $772 thousand and $656 thousand, respectively.

The following table shows the amounts of nonperforming assets, including loans at amortized cost and OREO at the lower of cost or fair value less estimated costs to sell, at the dates indicated:

(dollars in thousands) March 31, 2025 December 31, 2024

There were two OREO sales in six months ended June 30, 2025 and two in six months ended June 30, 2024, generating proceeds of $772 thousand and $656 thousand, respectively.

The table below presents the amounts of nonperforming assets, including loans at amortized cost and OREO at the lower of cost or fair value less estimated costs to sell.

(dollars in thousands) June 30, 2025 December 31, 2024

Nonaccrual Loans:

3 unchanged sentences

Real estate mortgage - residential 5,869 157

Construction - commercial and residential 19,488 —

Home equity 507 303

6 unchanged sentences

Significant variation in the amount of nonperforming loans may occur from period to period because the amount of nonperforming loans depends largely on the condition of a relatively small number of individual credits and borrowers relative to the total loan portfolio.

As of March 31, 2025, there were $501.6 million of substandard loans.

As of June 30, 2025, there were $702.1 million of substandard loans.

Based upon their status as potential problem loans, loans risk rated special mention or substandard receive heightened scrutiny and ongoing intensive risk management.

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The Company views BOLI as a long-term investment to help fund future benefit expenses.

As of March 31, 2025, the cash surrender value of BOLI totaled $320.1 million, compared to $115.8 million as of December 31, 2024.

The increase reflects earnings on the policies as well as additional BOLI purchased through premium payments made in the first quarter of 2025.

As of June 30, 2025, the cash surrender value of BOLI totaled $325.2 million, compared to $115.8 million as of December 31, 2024.

The increase reflects earnings on the policies as well as additional BOLI purchased through premium payments made in the first half of 2025.

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 61

Table of Contents Management's Discussion and Analysis | Balance Sheet Analysis | Deposits and Other Borrowings

Deposits and Other Borrowings

2 unchanged sentences

To meet funding needs during periods of high loan demand and seasonal variations in core deposits, the Bank regularly utilizes alternative funding sources such as secured borrowings from the FHLB, federal funds purchased lines of credit from correspondent banks and brokered deposits.

March 31, 2025

The table below presents the Bank’s deposit composition by balance and percentage.

June 30, 2025

December 31, 2024

Balance Percentage

(dollars in thousands) Balance Percentage Balance Percentage

Noninterest-bearing demand $ 1,532,132 17 % $ 1,544,403 17 %

$ 1,607,826 17 % $ 1,544,403 17 %

Interest-bearing transaction 895,604 10 % 1,211,791 13 %

926,722 10 % 1,211,791 13 %

Savings and money market 3,267,630 36 % 3,599,221 39 %

3,558,919 39 % 3,599,221 39 %

Time deposits 3,424,241 37 % 2,775,663 31 %

3,183,801 34 % 2,775,663 31 %

$ 9,277,268 100 % $ 9,131,078 100 %

For the three months ended March 31, 2025, deposits were $9.3 billion as compared to $9.1 billion as of December 31, 2024, an increase of 2%.

The increase was primarily attributable to a $408.1 million increase in interest bearing time deposits, partially offset by a $285.1 million reduction in interest bearing transaction deposits.

These deposit changes were the result of growth in time deposits from the company's digital acquisition channel.

Noninterest bearing deposits increased $63.4 million or 4% to $1.6 billion as of March 31, 2025 as compared to $1.5 billion as of December 31, 2024, while interest bearing deposits decreased by $325.4 million, or 7%.

Within interest bearing deposits, money market and savings accounts collectively amounted to $3.56 billion as of March 31, 2025, or 38% of total deposits, as compared to $3.60 billion, or 39% of total deposits, as of December 31, 2024, a decrease of $40.3 million, or 1%.

No single depositor represented more than 10% of total deposits as of March 31, 2025.

The ten largest depositors not associated with brokered pass-through relationships represented approximately 18% of total deposits in the aggregate as of March 31, 2025.

Total $ 9,119,607 100 % $ 9,131,078 100 %

For the six months ended June 30, 2025, deposits remained relatively flat overall however the mix changed when compared to December 31, 2024.

These deposit changes were the result of growth in time deposits from the company's digital acquisition channel partially offsetting a decrease in interest-bearing transaction and savings and money market accounts.

No single depositor represented more than 10% of total deposits as of June 30, 2025.

The ten largest depositors not associated with brokered pass-through relationships represented approximately 16% of total deposits in the aggregate as of June 30, 2025.

The Company maintains a significant deposit relationship with a third-party payments processor, whose business results in deposit inflows and outflows on an ongoing basis, which contributes to variations in period end compared to average deposit balances.

The Bank accepts brokered time deposits, generally in denominations of less than $250 thousand, from a regional brokerage firm and other national brokerage networks, including IntraFi Network, LLC ("IntraFi").

Additionally, the Bank participates in the CDARS and the ICS products, which provide for reciprocal (“two-way”) transactions among banks facilitated by IntraFi for the purpose of maximizing FDIC insurance.

The Bank accepts brokered time deposits generally in denominations of less than $250 thousand from brokerage networks, including IntraFi Network, LLC ("IntraFi").

The Bank participates in IntraFi's CDARS and the ICS programs, which provide for reciprocal ("two-way") transactions among banks for the purpose of maximizing FDIC insurance.

ICS also allows for the sale of deposits into the IntraFi Network ("One-Way Sale") which provides FDIC insurance for the depositor without reciprocal deposits returned to the Bank.

1 unchanged sentence

The sale of ICS deposits allows the Bank to moderate the fluctuation of deposit balances.

As of March 31, 2025, the Bank sold de minimis deposits through the IntraFi One-Way Sale network.

The total of reciprocal deposits as of March 31, 2025 was $1.2 billion (13% of total deposits) as compared to $1.4 billion (16% of total deposits) as of December 31, 2024.

As of June 30, 2025, the Bank sold de minimis deposits through the IntraFi One-Way Sale network.

The total of reciprocal deposits as of June 30, 2025 was $1.3 billion (14% of total deposits) as compared to $1.4 billion (16% of total deposits) as of December 31, 2024.

These sources are believed by the Company to represent a reliable and cost efficient alternative funding source for the Bank, but there can be no assurance that they will continue to be adequate or appropriate to meet our liquidity needs.

The Bank also is able to obtain one way CDARS deposits and participates in IntraFi’s Insured Network Deposit Program ("IND").

The Bank had $872.1 million and $894.7 million of IND brokered deposits as of March 31, 2025 and December 31, 2024, respectively.

The Bank had $618.4 million and $894.7 million of IND brokered deposits as of June 30, 2025 and December 31, 2024, respectively.

However, to the extent that the condition or reputation of the Company or Bank deteriorates, or to the extent that there are significant changes in market interest rates which the Company and Bank do not elect to match, or if aggregate funding available to banks changes due to changes in the marketplace, we may experience an outflow of brokered deposits or difficulty with obtaining them in the future.

1 unchanged sentence

We have used brokered deposits and intend to continue to use brokered deposits as one of our funding sources to support future growth.

As of March 31, 2025, total brokered deposits were $3.8 billion, or 41.4% of total deposits, compared to $4.0 billion, or 44% as of December 31, 2024, These brokered deposits were comprised of savings, money market and other interest-bearing transaction accounts of $2.3 billion and $2.7 billion, and time deposits of $1.4 billion and $1.3 billion as of March 31, 2025 and December 31, 2024, respectively.

As of June 30, 2025, total brokered deposits were $3.5 billion, or 38% of total deposits, compared to $4.0 billion, or 44% as of December 31, 2024.

These brokered deposits were comprised of savings, money market and other interest-bearing transaction accounts of $2.1 billion and $2.7 billion, and time deposits of $1.2 billion and $1.3 billion as of June 30, 2025 and December 31, 2024, respectively.

The Company uses the Call Report definitions for regulatory reporting by the Bank to classify its deposits as brokered deposits.

As of March 31, 2025 and December 31, 2024, total deposits included estimated totals of $2.4 billion and $2.2 billion of uninsured deposits, which represented 25% and 24% of total deposits, respectively.

As an enhancement to the basic noninterest bearing demand deposit account, the Company offers a sweep account, or “customer repurchase agreement,” allowing qualifying businesses to earn interest on short-term excess funds, which are not suited for either a certificate of deposit or a money market account.

The balances in these accounts were $32.4 million as of March 31, 2025 compared to $33.2 million as of December 31, 2024.

Customer repurchase agreements are not deposits and are not insured by the FDIC, but are collateralized by U.S.

As of June 30, 2025 and December 31, 2024, total deposits included estimated totals of $2.3 billion and $2.2 billion of uninsured deposits, which represented 25% and 24% of total deposits, respectively.

The Company has offered a sweep account, or "customer repurchase agreement," allowing qualifying businesses to earn interest on short-term excess funds, which are not suited for either a certificate of deposit or a money market account.

The balances in these accounts were $23.4 million as of June 30, 2025 compared to $33.2 million as of December 31, 2024.

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 62

Table of Contents Management's Discussion and Analysis | Balance Sheet Analysis | Deposits and Other Borrowings

repurchase agreements are not deposits and are not insured by the FDIC, but are collateralized by U.S.

agency securities and/or U.S.

agency-backed MBS.

The Company had no outstanding balances under its federal funds lines of credit provided by correspondent banks (which are unsecured) as of March 31, 2025 and December 31, 2024.

As of March 31, 2025 and December 31, 2024, the Company had outstanding balances of $490.0 million of FHLB advances.

The Company had no outstanding balances under its federal funds lines of credit provided by correspondent banks (which are unsecured) as of June 30, 2025 and December 31, 2024.

As of June 30, 2025 and December 31, 2024, the Company had outstanding FHLB advances of $50.0 million and $490 million, respectively.

Outstanding FHLB advances are secured by collateral consisting of specifically pledged marketable investment securities, a blanket lien on qualifying loans in the Bank’s commercial mortgage, residential mortgage and home equity loan portfolios.

On September 30, 2024, the Company closed a private placement of its 10.00% senior unsecured debt totaling $77.7 million maturing on September 30, 2029 (the "2029 Senior Notes" or "Original Notes").

As of March 31, 2025, the carrying value of these 2029 Senior Notes was $76.2 million which reflected $1.5 million in unamortized deferred financing costs that are being amortized over the life of the 2029 Senior Notes.

In connection with the issuance of the 2029 Senior Notes, the Company also entered into a registration rights agreement dated September 30, 2024 with the purchasers of the 2029 Senior Notes (the “Registration Rights Agreement”).

Pursuant to the Registration Rights Agreement, the Company filed an exchange offer registration statement with the SEC to exchange the Senior Notes for substantially identical notes registered under the Securities Act (the "Exchange Notes").

As of June 30, 2025, the carrying value of these 2029 Senior Notes was $76.3 million which reflected $1.4 million in unamortized deferred financing costs that are being amortized over the life of the 2029 Senior Notes.

The terms of the Exchange Notes are identical to the terms of the Original Notes, except that the transfer restrictions and registration rights applicable to the Original Notes do not apply to the Exchange Notes.

1 unchanged sentence

Commitments and Contractual Obligations

Loan commitments outstanding and lines and letters of credit as of March 31, 2025 and December 31, 2024 were as follows:

(dollars in thousands) March 31, 2025

The table below displays the loan commitments outstanding and lines and letters of credit.

(dollars in thousands) June 30, 2025

December 31, 2024

21 unchanged sentences

The Bank has recourse against the customer for any amount it is required to pay to a third party under a letter of credit, and holds cash and or other collateral on those standby letters of credit for which collateral is deemed necessary.

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 63

Table of Contents Management's Discussion and Analysis | Liquidity Management

Liquidity Management

Liquidity is a measure of the Company’s and Bank’s ability to meet loan demand and to satisfy depositor withdrawal requirements in an orderly manner.

investments, maturities and sales of investment securities, income from operations and new core deposits into the Bank.

The Bank’s primary sources of liquidity consist of cash and cash balances due from correspondent banks, excess reserves at the Federal Reserve, loan repayments, federal funds sold and other short-term investments, maturities and sales of investment securities, income from operations and new core deposits into the Bank.

Approximately 57% of the Company's investment portfolio of debt securities is held in an available-for-sale status which allows for flexibility to generate cash from sales as needed to meet ongoing loan demand.

These securities can also be utilized as pledged assets that provide secondary liquidity through the form of additional available borrowings.

Investment securities that are classified as held-to-maturity can also be used as collateral to pledge against additional borrowings.

These sources of liquidity are considered primary and are supplemented by the ability of the Company and Bank to borrow funds or issue brokered deposits, which are termed secondary sources of liquidity.

The following table summarizes the Company's secondary sources of liquidity in use and available as of March 31, 2025:

(dollars in thousands)

Secondary Sources of Liquidity in Use

Secondary Sources of Remaining Liquidity Available

Investment securities that are classified as held-to-maturity can also be used as collateral to pledge against additional borrowings.

The table below summarizes the Company's secondary sources of liquidity in use and available.

(dollars in thousands) Secondary Sources of Liquidity in Use Secondary Sources of Remaining Liquidity Available

As of June 30, 2025

Unsecured brokered deposits (1)

1 unchanged sentence

FHLB secured borrowings 50,000 1,363,585

490,000 1,070,435

Discount window secured borrowings — 1,754,682

4 unchanged sentences

Investment securities — 270,511

$ 1,600,133 $ 5,580,938

(1) The available liquidity from the unsecured brokered deposits represents unsecured funds under one-way CDARS and ICS brokered deposits that would require then current market rates and be dependent on the availability of funds in those networks.

Total $ 966,106 $ 4,727,479

(1) The available liquidity from the unsecured brokered deposits represents unsecured funds under one-way CDARS, ICS, and other brokered deposits that would require then current market rates and be dependent on the availability of funds in those networks.

(2) Unpledged assets are comprised of unencumbered assets that could be liquidated or used as collateral to obtain additional liquidity through debt financing.

The funding mix has continued to change throughout the three months ended March 31, 2025.

Deposits were $9.3 billion and $9.1 billion as of March 31, 2025 and December 31, 2024, respectively.

The increase was primarily attributable to a $408.1 million increase in interest bearing time deposits, and a $63.4 million increase in noninterest bearing deposits, offset by a $285.1 million reduction in interest-bearing transaction accounts and a $40.3 million reduction in savings and money market accounts.

The growth in interest bearing deposits was driven by the increase in time deposits through the digital acquisition channel during the three months ended March 31, 2025, as discussed in "Deposits and Other Borrowings" above.

Short-term borrowings were $490.0 million as of March 31, 2025 and December 31, 2024.

Additionally, the Bank can purchase up to $145.0 million in federal funds on an unsecured basis from its correspondents, against which there were no amounts outstanding as of March 31, 2025 and can borrow unsecured funds under one-way CDARS and ICS brokered deposits in the amount of $1.1 billion, against which there was $82 million outstanding as of March 31, 2025.

As of March 31, 2025, the Bank also has custodial agreements with various broker-dealers through IntraFi's IND program which provided $812.0 million of brokered deposits.

As of March 31, 2025, the Bank was also eligible to draw advances from the FHLB up to $1.6 billion based on assets pledged as collateral to the FHLB, against which the Bank borrowed $490.0 million as of March 31, 2025.

The Bank may enter into repurchase agreements as well as obtain additional borrowing capabilities from the FHLB provided adequate collateral exists to secure these lending relationships.

The funding mix has continued to change throughout the six months ended June 30, 2025.

Deposits were $9.12 billion and $9.13 billion as of June 30, 2025 and December 31, 2024, respectively.

The slight decrease of $11.5 million and funding mix change was primarily attributable to a $316.2 million reduction in interest-bearing transaction accounts and $331.6 million reduction in savings and money market accounts, offset by a $648.6 million increase in interest-bearing time deposits.

The growth in interest-bearing deposits was driven by the increase in time deposits through the digital acquisition channel during the six months ended June 30, 2025, as discussed in "Deposits and Other Borrowings" above.

Short-term borrowings were $50.0 million and $490.0 million as of June 30, 2025 and December 31, 2024.

Additionally, the Bank can purchase up to $145.0 million in federal funds on an unsecured basis from its correspondents, against which there were no amounts outstanding as of June 30, 2025 and can borrow unsecured funds under one-way CDARS and ICS brokered deposits in the amount of $1.1 billion, against which there was $97 million outstanding as of June 30, 2025.

As of June 30, 2025, the Bank also has custodial agreements with various broker-dealers through IntraFi's IND program which provided $618.0 million of brokered deposits.

As of June 30, 2025, the Bank was also eligible to draw advances from the FHLB up to $1.4 billion based on assets pledged as collateral to the FHLB, against which the Bank borrowed $50.0 million as of June 30, 2025.

The Bank may enter into repurchase agreements as well as obtain additional borrowing capabilities from certain broker-dealers provided adequate collateral exists to secure these lending relationships.

The Bank also has a back-up borrowing facility through the Discount Window at the Federal Reserve Bank of Richmond ("Federal Reserve Bank").

This facility, which can be used to borrow up to $1.8 billion, is collateralized with specific loan assets identified to the Federal Reserve Bank.

This facility, which can be used to borrow up to $1.8 billion, is collateralized with specific loan assets and investment securities identified to the Federal Reserve Bank.

It is anticipated that, except for periodic testing, this facility would be utilized for contingency funding only.

There can be no assurance, however, that these alternative sources of liquidity will continue to be available or will be sufficient to meet our ongoing liquidity needs.

In total, the Bank's aggregate borrowing capacity as of March 31, 2025 was $4.2 billion, which consists of $1.1 billion and $1.8 billion additional aggregate capacity to borrow from the FHLB and the Federal Reserve's Discount Window,

respectively, on existing pledged assets.

In total, the Bank's aggregate borrowing capacity as of June 30, 2025 was $3.4 billion, which consists of $1.4 billion and $1.8 billion additional aggregate capacity to borrow from the FHLB and the Federal Reserve's Discount Window, respectively, on

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 64

Table of Contents Management's Discussion and Analysis | Liquidity Management

existing pledged assets.

The Bank's aggregate borrowing capacity also includes unencumbered securities totaling approximately $0.3 billion available for pledging to the FHLB or Federal Reserve for additional borrowing capacity.

3 unchanged sentences

There is, however, a risk that the cost of funds will increase significantly as the Bank competes for deposits or that some deposits would be lost if rates were to increase and the Bank elected not to remain competitive with its deposit rates.

Under those conditions, the Bank believes that it is well positioned to use other sources of funds such as FHLB borrowings, brokered deposits, repurchase agreements and correspondent banks’ lines of credit to offset a decline in deposits in the short run, but the use of such sources may negatively impact our net interest margin and our earnings.

Under those conditions, the Bank believes that it is well positioned to use other sources of funds such as FHLB borrowings, brokered deposits, repurchase agreements and correspondent bank lines of credit to offset a decline in deposits in the short run, but the use of such sources may negatively impact net interest margin and earnings.

The continuing elevated cost of funding has negatively impacted our net interest margin.

2 unchanged sentences

Most of our noninterest-bearing deposits are operating deposits or compensating balances that are held in connection with lending relationships.

The potential outflow of such deposits is a risk unless we pay a more competitive rate of interest on them, which could significantly and negatively impact the Bank’s interest expense and net interest margin, as the transfer of some noninterest-bearing deposits to interest-bearing deposits did in 2025.

The potential outflow of such deposits is a risk unless competitive rates of interest are paid, which could significantly and negatively impact the Bank’s interest expense and net interest margin, as the transfer of some noninterest-bearing deposits to interest-bearing deposits did in 2025.

Over the long-term, an adjustment in assets and change in business emphasis could compensate for a potential loss of deposits.

2 unchanged sentences

The Company believes it maintains sufficient primary and secondary sources of liquidity to fund its operations.

During the three months ended March 31, 2025, average short term liquidity was $2.8 billion comprising interest bearing deposits with other banks and other short-term investments and AFS securities, which is above the Bank's average needs.

Secondary sources of liquidity as of March 31, 2025 were $5.6 billion, which include the FHLB, other insured brokered deposit sweep programs, unpledged securities, Fed funds lines, and the FRB Discount Window.

As of March 31, 2025, the Company held total securities available to be pledged with an estimated fair value of $1.3 billion.

As of March 31, 2025, under the Bank’s liquidity formula, it had $6.5 billion of primary and secondary liquidity sources.

As of June 30, 2025, primary sources of liquidity were $1.5 billion comprising interest-bearing deposits with other banks and other short-term investments and AFS securities.

Secondary sources of liquidity as of June 30, 2025 were $4.7 billion, which include the FHLB unused availability, other insured brokered deposit sweep programs, unpledged securities, Fed funds lines, and the FRB Discount Window.

As of June 30, 2025, under the Bank’s liquidity formula, it had $6.2 billion of primary and secondary liquidity sources.

Management believes the amount is adequate to meet current and projected funding needs.

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Although growth in that segment over the past 36 months at 12.9% did not exceed the 50% threshold laid out in the regulatory guidance, we expect the heightened supervisory expectations to continue to apply to us given the federal banking regulators’ general focus on commercial real estate exposures at banks.

As of March 31, 2025, the Company continued to exceed the construction, land development, and other land acquisitions regulatory concentration threshold, and we continue to monitor our concentration in commercial real estate lending and remain in compliance with the guidance issued by the federal banking regulators.

Construction, land and land development loans represent 119.61% of consolidated risk based capital.

Management has extensive experience in commercial real estate

lending, and has implemented and continues to maintain heightened risk management procedures and strong underwriting criteria with respect to its commercial real estate portfolio.

As of June 30, 2025, the Company continued to exceed the construction, land development, and other land acquisitions regulatory concentration threshold, and we continue to monitor our concentration in commercial real estate lending and remain in compliance with the guidance issued by the federal banking regulators.

Construction, land and land development loans represent 115.8% of total capital.

Management has extensive experience in commercial real estate lending, and has implemented and continues to maintain heightened risk management procedures and strong underwriting criteria with respect to its commercial real estate portfolio.

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 65

Table of Contents Management's Discussion and Analysis | Capital Resources and Adequacy

Loan monitoring practices include but are not limited to periodic stress testing analysis to evaluate changes to cash flows, owing to interest rate increases and declines in net operating income.

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Failure to meet various capital requirements can initiate regulatory action that could have a direct material effect on the financial statements.

As of March 31, 2025, the capital position of the Company and its wholly owned subsidiary, the Bank, continue to exceed regulatory requirements and well-capitalized guidelines.

As of June 30, 2025, the capital position of the Company and its wholly owned subsidiary, the Bank, continue to exceed regulatory requirements and well-capitalized guidelines.

The primary indicators relied on by bank regulators in measuring the capital position are four ratios as follows:

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The Basel III Rules also increased risk weights for certain assets and off-balance-sheet exposures.

As of March 31, 2025, the Company and the Bank exceeded all these thresholds.

The Company announced a regular quarterly cash dividend on April 23, 2025 of $0.165 per share to shareholders of record on May 5, 2025, to be paid on May 16, 2025.

As of June 30, 2025, the Company and the Bank exceeded all these thresholds.

The Company announced a regular quarterly cash dividend on July 23, 2025 of $0.165 per share to shareholders of record on August 8, 2025, to be paid on August 29, 2025.

The ability of the Company to continue to grow is dependent on its earnings and those of the Bank, the ability to obtain additional funds for contribution to the Bank’s capital, through additional borrowings, through the sale of additional common stock or preferred stock or through the issuance of additional qualifying capital instruments, such as subordinated debt.

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The Company’s capital ratios were all well in excess of requirements established by the Federal Reserve Board and the Bank’s capital ratios were in excess of those required to be classified as a "well capitalized" institution under the PCA provisions of the Federal Deposit Insurance Act.

The actual capital amounts and ratios for the Company and Bank as of March 31, 2025 and 2024 are presented in the table below:

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 66

Table of Contents Management's Discussion and Analysis | Capital Resources and Adequacy

The table below presents the actual capital amounts and ratios for the Company and Bank.

Company Bank Minimum Required

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Amount Ratio Actual

As of March 31, 2025

As of June 30, 2025

CET1 capital (to risk weighted assets) $ 1,293,315 14.01 % $ 1,305,995 14.23 % 7.00 % 6.50 %

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(1) The risk-based ratios reflect the minimum requirement plus the capital conservation buffer of 2.50%.

(2) Applies to Bank only

(2) Applies to the Bank only.

Federal bank and holding company regulations, as well as Maryland law, impose certain restrictions on capital distributions, including dividend payments and share repurchases by the Bank, as well as restricting extensions of credit and transfers of assets between the Bank and the Company.

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The Company, through its ALCO and ongoing financial management practices, monitors the interest rate environment in which it operates and adjusts the rates and maturities of its assets and liabilities to remain competitive and to achieve its overall financial objectives subject to established risk limits.

The loan portfolio remained relatively flat during the first quarter of 2025.

The re-pricing duration on the loan portfolio was 10 months as of March 31, 2025 and 11 months as of December 31, 2024, with fixed-rate loans amounting to 37.2% and 38.1% of total loans as of March 31, 2025 and December 31, 2024, respectively.

Variable and adjustable rate loans comprised 62.8% and 61.9% of total loans as of March 31, 2025 and December 31, 2024, respectively.

The loan portfolio decreased 2.7% during the first half of 2025.

The re-pricing duration on the loan portfolio was 10 months as of June 30, 2025 and 11 months as of December 31, 2024, with fixed-rate loans amounting to 34.4% and 38.1% of total loans as of June 30, 2025 and December 31, 2024, respectively.

Variable and adjustable rate loans comprised 65.6% and 61.9% of total loans as of June 30, 2025 and December 31, 2024, respectively.

Variable rate loans are generally indexed to the Secured Overnight Funding Rate ("SOFR") or the Wall Street Journal prime interest rate, while adjustable rate loans are indexed primarily to the five year U.S.

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The cash flows from the investment portfolio currently have not been reinvested in the investment portfolio.

As of March 31, 2025, the amortized cost less allowance of the investment portfolio decreased by $67.3 million, or 3.1%, as compared to the balance as of December 31, 2024.

Based on amortized cost basis, the percentage mix of municipal securities was 5.7% and 5.5% of total investments as of March 31, 2025 and December 31, 2024, respectively.

The portion of the portfolio invested in MBS was 63% and 62% as of March 31, 2025 and December 31, 2024, respectively.

As of June 30, 2025, the amortized cost less allowance of the investment portfolio decreased by $179.5 million, or 7.6%, as compared to the balance as of December 31, 2024.

Based on amortized cost basis, the percentage mix of municipal securities was 5.7% and 5.5% of total investments as of June 30, 2025 and December 31, 2024, respectively.

The portion of the portfolio invested in MBS was 65% and 62% as of June 30, 2025 and December 31, 2024, respectively.

The portion of the portfolio invested in U.S.

agency investments was 25% as of March 31, 2025 and 25% as of December 31, 2024.

Corporate bonds made up 6% and 6% of total investments as of March 31, 2025 and December 31, 2024, respectively.

treasury bonds were 0% and 1% of total investments as of March 31, 2025 and December 31, 2024, respectively.

The duration of the investment portfolio decreased to 4.1 years as of March 31, 2025 from 4.2 years as of December 31, 2024.

As of March 31, 2025, $79.3 million of corporate bonds were subordinated debt from other financial institutions.

agency investments was 24% as of June 30, 2025 and 25% as of December 31, 2024.

Corporate bonds made up 6% and 6% of total investments as of June 30,

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 67

Table of Contents Management's Discussion and Analysis | Asset/Liability Management and Quantitative and Qualitative Disclosures about Market Risk

2025 and December 31, 2024, respectively.

treasury bonds were 0% and 1% of total investments as of June 30, 2025 and December 31, 2024, respectively.

The duration of the investment portfolio decreased to 4.1 years as of June 30, 2025 from 4.2 years as of December 31, 2024.

As of June 30, 2025, $69.2 million of corporate bonds were subordinated debt from other financial institutions.

Corporate bonds generally, and subordinated debt in particular, pose credit risk such that if any of these issuers were to enter bankruptcy or insolvency proceedings, we could experience losses that may be material to operating results and our financial condition.

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Total expected exposure incorporates both the current and potential future exposure of the derivatives, derived from using observable inputs, such as yield curves and volatilities.

These derivatives are not designated as hedges, are not speculative and have an asset position with a notional value of $49.5 million as of March 31, 2025.

These derivatives are not designated as hedges, are not speculative and have an asset position with a notional value of $49.5 million as of June 30, 2025.

The changes in fair value for these contracts are recognized directly in earnings.

The duration of the deposit portfolio increased to 12 months as of March 31, 2025 from 11 months as of December 31, 2024.

The duration of the deposit portfolio increased to 16 months as of June 30, 2025 from 11 months as of December 31, 2024.

This increase is attributable to a shift in deposit mix, and modeling assumption updates.

The Company experienced a total deposit increase of $146.2 million for the three months ended March 31, 2025 as compared to a total loan increase of $8.4 million for the same period.

The funding mix changed throughout the three months ended March 31, 2025.

Deposits were $9.3 billion and $9.1 billion as of March 31, 2025 and December 31, 2024, respectively.

The increase in deposits was primarily attributable to a $408.1 million increase in time deposits, offset by a $285.1 million decrease in interest bearing transaction accounts.

The Company experienced a total deposit decrease of $11.5 million for the six months ended June 30, 2025 as compared to a total loan decrease of $213.2 million for the same period.

The funding mix changed throughout the six months ended June 30, 2025.

The slight decrease in deposits was primarily attributable to a $316.2 million decrease in interest-bearing transaction accounts and a $331.6 million decrease in Savings and money market accounts, mostly offset by a $648.6 million increase in time deposits.

Refer to the "Deposits and Other Borrowings" section above for further discussion of deposits and borrowings.

The net unrealized loss before income tax on the AFS securities portfolio was $115.9 million and $141.5 million as of March 31, 2025 and December 31, 2024, respectively.

As of March 31, 2025, the net unrealized loss position represented 8.71% of the investment portfolio's book value.

The net unrealized loss before income tax on the AFS securities portfolio was $100.7 million and $141.5 million as of June 30, 2025 and December 31, 2024, respectively.

As of June 30, 2025, the net unrealized loss position represented 7.92% of the investment portfolio's book value.

Management relies on the use of models in order to measure the expected future impact on interest income of various interest rate environments, as described above.

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however, they are also expected to delay the impact of increases to market rates on interest income until such floors have been exceeded.

In the first three months ended March 31, 2025, interest rate floors have not been relevant in the current interest rate environment since most variable rate loans are well above their floor rate.

The weighted average rate of the Company's variable rate loans decreased by approximately 7 basis poin ts from December 31, 2024 to March 31, 2025.

As of March 31, 2025, the Company had a portfolio of $3.0 billion of variable and adjustable rate loans that were subject to interest rate floors with a weighted average rate of 7.18%, which was a 6 bps decrease from December 31, 2024.

As of March 31, 2025, only $134.7 million or 1.69% of loans held by the Company were earning interest at their floor rate, as compared to $123.6 million or 1.56% as of December 31, 2024.

In the first six months ended June 30, 2025, interest rate floors have not been relevant in the current interest rate environment since most variable rate loans are well above their floor rate.

The weighted average rate of the Company's variable rate loans had a decrease of approximately 400 basis poin ts from December 31, 2024 to June 30, 2025.

As of June 30, 2025, the Company had a portfolio of $2.9 billion of variable and adjustable rate loans that were subject to interest rate floors with a weighted average rate of 7.20%, which was a 4 bps decrease from December 31, 2024.

As of June 30, 2025, only $122.1 million or 1.58% of loans held by the Company were earning interest at their floor rate, as compared to $123.6 million or 1.56% as of December 31, 2024.

The Company employs an earnings simulation model (immediate parallel shifts along the yield curve) on a quarterly basis to monitor its interest rate sensitivity and risk and to model its balance sheet cash flows and the related statement of operations effects in different interest rate scenarios.

The model utilizes current balance sheet data and attributes and is adjusted for assumptions as to investment maturities (including prepayments), loan prepayments, interest rates, deposit decay rates, and the level of noninterest income and noninterest expense.

Further discussion of the limitations of this analysis are listed below and in the risk factors and other cautionary language included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, and in other periodic and current reports filed by the Company with the SEC.

The data is then

subjected to a “shock test” which assumes a simultaneous change in interest rates up 100, 200, 300 and 400 basis points or down 100, 200, 300 and 400 basis points, along the entire yield curve, but not below zero.

The results are analyzed as to the impact on net interest income, net income and the market equity over the next twelve and twenty-four month periods from March 31, 2025.

In addition to analysis of simultaneous changes in interest rates along the yield curve, an analysis of changes based on interest rate “ramps” is also performed.

Such analysis represents the impact of a more gradual change in interest rates, as well as yield curve shape changes.

For the analysis presented below, as of March 31, 2025, the simulation assumes a 100 basis point change in interest rates on interest bearing deposits for each 100 basis point change in market interest rates in a decreasing interest rate shock scenario with a floor of 10 basis points and assumes a 100 basis point change in interest rates on interest bearing deposits for each 100 basis point change in market interest rates in an increasing interest rate shock scenario.

The Bank does have deposits with contractual rate terms which means these deposits will change 100 basis points for every 100 basis points change in market rates.

Further discussion of the limitations of this analysis are listed below and in the risk factors and other cautionary language

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 68

Table of Contents Management's Discussion and Analysis | Asset/Liability Management and Quantitative and Qualitative Disclosures about Market Risk

included in the Company's Annual Report on 2024 Form 10-K, and in other periodic and current reports filed by the Company with the SEC, including the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2025.

The data is then subjected to a "shock test" which assumes a simultaneous change in interest rates up 100, 200, 300 and 400 basis points or down 100, 200, 300 and 400 basis points, along the entire yield curve, but not below zero.

The results are analyzed as to the impact on net interest income over the next twelve and twenty-four month periods and the economic value of equity.

For the analysis presented below, as of June 30, 2025, the simulation assumes a 100 basis point change in interest rates on interest-bearing deposits for each 100 basis point change in market interest rates in a decreasing interest rate shock scenario with a floor of 0 basis points and assumes a 100 basis point change in interest rates on interest-bearing deposits for each 100 basis point change in market interest rates in an increasing interest rate shock scenario.

The Bank does have deposits with contractual rate terms that mean these deposits will change 100 basis points for every 100 basis points change in market rates.

Thus, the overall measure of the correlation between deposit costs and market rate changes is modeled at 100%.

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If this were to occur, the effects of a rising or declining interest rate environment may not be in accordance with management’s expectations.

As quantified in the table below, the Company’s analysis as of March 31, 2025 shows a moderate effect on net interest income over the next 12 months, as well as a moderate effect on the economic value of equity when interest rates are shocked down 100, 200, 300 and 400 basis points and up 100, 200, 300 and 400 basis points.

As quantified in the table below, the Company’s analysis as of June 30, 2025 shows a moderate effect on net interest income over the next 12 months, as well as a moderate effect on the economic value of equity when interest rates are shocked down 100, 200, 300 and 400 basis points and up 100, 200, 300 and 400 basis points.

This moderate impact is due substantially to the significant level of variable rate and repriceable assets and liabilities and related shorter relative durations.

As of March 31, 2025, the repricing duration of (a) the investment portfolio was 4.1 years, (b) the loan portfolio 0.9 years, (c) the interest bearing deposit portfolio was 0.3 years, and (d) the borrowed funds portfolio was 0.5 years.

The following table reflects the result of the simulation analysis on the March 31, 2025 asset and liability balances:

As of June 30, 2025, the repricing duration of (a) the investment portfolio was 4.1 years, (b) the loan portfolio 0.8 years, (c) the interest-bearing deposit portfolio was 0.7 years, and (d) the borrowed funds portfolio was 2.1 years.

The table below displays the result of the simulation analysis on the asset and liability balances as of June 30, 2025.

Change in interest

rates (basis points) Percentage change in 12-month net interest income

Percentage change in economic value of equity

rates (basis points) Percentage change in 12-month net interest income Percentage change in economic value of equity

+400 13.3% (5.4)%

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For the economic value of equity, the Company has adopted a policy limit of -12% for a 100 basis point change, -15% for a 200 basis point change, -25% for a 300 basis point change and -30% for a 400 basis point change.

The decrease in 12-month net interest income and net income of (0.7)% and (1.6)%, respectively, given a 100 basis point decrease in market interest rates as of March 31, 2025 compares to 0.1% and 0.2%, respectively, for the same period in 2024.

The analysis at the end of the first quarter of 2025 showed that in an environment of increasing rates, income increases.

This is a change from the end of 2024, which showed a decrease in income due to an increase in rates.

The primary drivers of this change are an increase in time deposits and not reinvesting cash flows from the investment portfolio which had resulted in the shortening of the overall asset duration.

The changes in net interest income, net income and the economic value of equity in higher interest rate shock scenarios as of March 31, 2025 are not believed to be excessive and are within policy limits.

The decrease in 12-month net interest income of 4.0% given a 100 basis point decrease in market interest rates as of June 30, 2025 compares to 0.1% for the same period in 2024.

As part of the Company’s ongoing enhancement of the simulation analysis, the Company has been making updates to its model to incorporate, among other things, improvements to certain assumptions, as well as assumptions related to deposits.

The difference in the results of the simulation analysis between the second quarter of 2025 and the first quarter of 2025 is attributable to these model updates.

Certain shortcomings are inherent in the method of analysis presented in the foregoing table.

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Finally, the ability of many borrowers to service their debt may decrease in the event of a significant interest rate increase.

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 69

Table of Contents Management's Discussion and Analysis | Asset/Liability Management and Quantitative and Qualitative Disclosures about Market Risk

While an instantaneous parallel shift in interest rates was used in this analysis to provide an estimate of exposure under these scenarios, we believe that a non-immediate parallel shifts in interest rates would have a more modest impact.

Further, the earnings simulation model does not take into account factors such as future balance sheet growth, changes in product mix, changes in yield curve relationships, the various rate indexes do not move in parallel (e.g.

SOFR, Fed Funds), hedging activities we might take and changing product spreads that could mitigate any potential beneficial or adverse impact of changes in interest rates.

Another key factor to consider is the behavior of our deposit portfolio in the baseline forecast and in alternate interest rate scenarios set out in the table above is a key assumption in our projected estimates of net interest income.

SOFR, Fed Funds), hedging activities we might take and changing product spreads that could mitigate or exacerbate any potential beneficial or adverse impact of changes in interest rates.

Another key factor to consider is the behavior of our deposit portfolio.

The projected impact on net interest income in the table above assumes no change in deposit portfolio size or mix from the baseline forecast in alternative rate environments.

In higher rate scenarios, any customer activity resulting in the replacement of low-cost or noninterest-bearing deposits with higher-yielding deposits or market-based funding would reduce the assumed benefit of those deposits.

The projected impact on net interest income in the table above also assumes a "through-the-cycle" non-maturity deposit beta which may not be an accurate predictor of actual deposit rate changes realized in scenarios of smaller and/or non-parallel interest rate movements.

In higher rate scenarios, any customer activity resulting in the replacement of low-cost or noninterest-bearing deposits with higher cost deposits or market-based funding would reduce the assumed benefit of those deposits.

The projected impact on net interest income in the table above also assumes a static non-maturity deposit beta which may not be an accurate predictor of actual deposit rate changes realized in scenarios of smaller and/or non-parallel interest rate movements.

Each of the above analyses may not, on its own, be an accurate indicator of how our net interest income will be affected by current and future changes in interest rates.

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In addition, the magnitude and duration of changes in interest rates may have a significant impact on net interest income.

For example, although certain assets and liabilities may have similar maturities or periods of repricing, they may react to different degrees to changes in market interest rates.

Interest rates on certain types of assets and liabilities fluctuate in advance of changes in general market rates, while interest rates on other types may lag behind changes in general market rates.

In addition, certain assets, such as adjustable-rate mortgage loans, have features (generally referred to as interest rate caps and floors) that limit changes in interest rates.

Prepayment and early withdrawal levels also could deviate significantly from those assumed in calculating the maturity of certain instruments.

The ability of many borrowers to service their debts also may decrease during periods of rising interest rates.

ALCO reviews each of the above interest rate sensitivity analyses along with several different interest rate scenarios as part of its responsibility to provide a satisfactory, consistent level of profitability within the framework of established liquidity, loan, investment, borrowing and capital policies.

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Management compensates for these limitations by providing detailed reconciliations between GAAP information and the non-GAAP financial measures.

The following tables reconcile the GAAP financial measures to the associated non-GAAP financial measures:

(dollars in thousands except per share data) March 31, 2025 December 31, 2024

The table below reconciles the GAAP financial measures to the associated non-GAAP financial measures.

(dollars in thousands except per share data) June 30, 2025 December 31, 2024

Tangible common equity:

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Tangible book value per common share (Non-GAAP) $ 39.03 $ 40.59

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 70

Table of Contents Quantitative and Qualitative Disclosures about Market Risk

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Please refer to Item 2 of this report, "Management's Discussion and Analysis of Financial Condition and Results of Operations," under the caption "Asset/Liability Management and Quantitative and Qualitative Disclosure about Market Risk."

Please refer to Item 2 of this report, "Management's Discussion and Analysis of Financial Condition and Results of Operations", under the caption "Asset/Liability Management and Quantitative and Qualitative Disclosures about Market Risk".

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis