EAGLE BANCORP INC 10-Q

ITEM 1. FINANCIAL STATEMENTS EAGLE BANCORP, INC. Consolidated Balance Sheets (Unaudited) (dollars in thousands, except share and per share data) As of June 30, 2025 December 31, 2024 Assets Cash and due from banks $ 14,005 $ 11,882 Federal funds sold 4,091 2,581 Interest-bearing deposits with banks and other short-term investments 239,237 619,017 Investment securities available-for-sale (amortized cost of $ 1,271,179 and $ 1,408,935 , respectively, and allowance for credit losses of $ 0 and $ 22 , respectively) 1,170,489 1,267,404 Investment securities held-to-maturity, net of allowance for credit losses of $ 1,229 and $ 1,306 , respectively (fair value of $ 799,136 and $ 820,382 , respectively) 896,855 938,647 Federal Reserve and Federal Home Loan Bank stock 30,613 51,763 Loans held for sale 37,576 — Loans held for investment, at amortized cost 7,721,664 7,934,888 Less: Allowance for credit losses ( 183,796 ) ( 114,390 ) Loans held for investment, net of allowance 7,537,868 7,820,498 Premises and equipment, net 7,103 7,694 Right-of-use assets - operating leases 31,202 18,494 Deferred income taxes 80,731 91,472 Bank-owned life insurance 325,174 115,806 Intangible assets, net 9 16 Other real estate owned 2,459 2,743 Other assets 223,919 181,491 Total Assets $ 10,601,331 $ 11,129,508 Liabilities and Shareholders’ Equity Liabilities Deposits: Noninterest-bearing demand $ 1,532,132 $ 1,544,403 Interest-bearing transaction 895,604 1,211,791 Savings and money market 3,267,630 3,599,221 Time deposits 3,424,241 2,775,663 Total deposits 9,119,607 9,131,078 Customer repurchase agreements 23,442 33,157 Other short-term borrowings 50,000 490,000 Long-term borrowings 76,264 76,108 Operating lease liabilities 37,297 23,815 Reserve for unfunded commitments 4,925 3,463 Other liabilities 104,729 145,826 Total Liabilities 9,416,264 9,903,447 Shareholders’ Equity Common stock, par value 0.01 per share; shares authorized 100,000,000 , shares issued and outstanding 30,364,983 and 30,202,003 , respectively 300 298 Additional paid-in capital 388,927 384,932 Retained earnings 904,205 982,304 Accumulated other comprehensive income (loss) ( 108,365 ) ( 141,473 ) Total Shareholders’ Equity 1,185,067 1,226,061 Total Liabilities and Shareholders’ Equity $ 10,601,331 $ 11,129,508 See Notes to Consolidated Financial Statements. Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 3 Table of Contents EAGLE BANCORP, INC. Consolidated Statements of Operations (Unaudited) (dollars in thousands, except per share data) For the Three Months Ended June 30, For the Six Months Ended June 30, 2025 2024 2025 2024 Interest Income Interest and fees on loans $ 125,223 $ 137,616 $ 251,359 $ 275,610 Interest and dividends on investment securities 11,436 12,405 23,348 25,085 Interest on balances with other banks and short-term investments 14,760 19,568 30,563 44,430 Interest on federal funds sold 24 142 51 208 Total interest income 151,443 169,731 305,321 345,333 Interest Expense Interest on deposits 78,912 76,846 156,123 156,229 Interest on customer repurchase agreements 250 330 510 645 Interest on other short-term borrowings 2,489 21,202 11,222 42,408 Interest on long-term borrowings 2,016 — 4,041 — Total interest expense 83,667 98,378 171,896 199,282 Net Interest Income 67,776 71,353 133,425 146,051 Provision for (Reversal of) Credit Losses 138,159 8,959 164,414 44,134 Provision for (Reversal of) Credit Losses for Unfunded Commitments 1,759 608 1,462 1,064 Net Interest Income (Loss) After Provision for (Reversal of) Credit Losses ( 72,142 ) 61,786 ( 32,451 ) 100,853 Noninterest Income Service charges on deposits 1,771 1,653 3,514 3,352 Gain on sale of loans — 37 — 37 Net gain (loss) on sale of investment securities ( 1,854 ) 3 ( 1,850 ) 7 Increase in the cash surrender value of bank-owned life insurance 5,161 709 9,443 1,412 Other income 1,336 2,930 3,514 4,113 Total noninterest income 6,414 5,332 14,621 8,921 Noninterest Expense Salaries and employee benefits 21,940 21,770 43,908 43,496 Premises and equipment expenses 3,019 2,894 6,222 5,953 Marketing and advertising 1,144 1,662 2,515 2,521 Data processing 4,293 3,495 8,271 6,788 Legal, accounting and professional fees 1,550 2,705 4,672 5,212 FDIC insurance 8,077 5,917 17,039 12,329 Goodwill impairment — 104,168 — 104,168 Other expenses 3,447 3,880 6,294 6,021 Total noninterest expense 43,470 146,491 88,921 186,488 Income (Loss) Before Income Tax Expense ( 109,198 ) ( 79,373 ) ( 106,751 ) ( 76,714 ) Income Tax Expense ( 39,423 ) 4,429 ( 38,651 ) 7,426 Net Income (Loss) $ ( 69,775 ) $ ( 83,802 ) $ ( 68,100 ) $ ( 84,140 ) Earnings (Loss) Per Common Share Basic $ ( 2.30 ) $ ( 2.78 ) $ ( 2.25 ) $ ( 2.79 ) Diluted $ ( 2.30 ) $ ( 2.78 ) $ ( 2.25 ) $ ( 2.79 ) See Notes to Consolidated Financial Statements. Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 4 Table of Contents EAGLE BANCORP, INC. Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (dollars in thousands) For the Three Months Ended June 30, For the Six Months Ended June 30, 2025 2024 2025 2024 Net Income (Loss) $ ( 69,775 ) $ ( 83,802 ) $ ( 68,100 ) $ ( 84,140 ) Other comprehensive income (loss), net of tax: Unrealized gain (loss) on securities available-for-sale 10,241 3,629 29,594 ( 1,437 ) Reclassification adjustment for net (gain) loss included in net income (loss) 1,185 ( 2 ) 1,180 ( 6 ) Total unrealized gain (loss) on investment securities available-for-sale 11,426 3,627 30,774 ( 1,443 ) Amortization of unrealized loss on securities transferred to held-to-maturity 1,255 1,322 2,459 2,707 Unrealized gain (loss) on derivatives ( 107 ) ( 24 ) ( 125 ) 250 Other comprehensive income (loss) 12,574 4,925 33,108 1,514 Comprehensive Income (Loss) $ ( 57,201 ) $ ( 78,877 ) $ ( 34,992 ) $ ( 82,626 ) See Notes to Consolidated Financial Statements. Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 5 Table of Contents EAGLE BANCORP, INC. Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) (dollars in thousands, except share data) Common Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Shareholders’ Equity Shares Amount Balance as of April 1, 2025 30,368,843 $ 300 $ 386,535 $ 978,995 $ ( 120,939 ) $ 1,244,891 Net Income (Loss) — — — ( 69,775 ) — ( 69,775 ) Other comprehensive income, net of tax — — — — 12,574 12,574 Stock-based compensation expense — — 2,273 — — 2,273 Issuance of common stock under share-based compensation arrangements ( 9,518 ) — — — — — Issuance of common stock related to employee stock purchase plan 5,658 — 119 — — 119 Cash dividends declared ($ 0.165 per share) — — — ( 5,015 ) — ( 5,015 ) Balance as of June 30, 2025 30,364,983 $ 300 $ 388,927 $ 904,205 $ ( 108,365 ) $ 1,185,067 Balance as of April 1, 2024 30,185,732 $ 297 $ 377,334 $ 1,047,550 $ ( 165,768 ) $ 1,259,413 Net Income (Loss) — — — ( 83,802 ) — ( 83,802 ) Other comprehensive income, net of tax — — — — 4,925 4,925 Stock-based compensation expense — — 2,664 — — 2,664 Issuance of common stock under share-based compensation arrangements ( 11,371 ) — — — — — Issuance of common stock related to employee stock purchase plan 6,121 — 144 — — 144 Cash dividends declared ($ 0.450 per share) — — — ( 13,885 ) — ( 13,885 ) Balance as of June 30, 2024 30,180,482 $ 297 $ 380,142 $ 949,863 $ ( 160,843 ) $ 1,169,459 See Notes to Consolidated Financial Statements. Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 6 Table of Contents EAGLE BANCORP, INC. Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) (dollars in thousands, except share data) Common Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Shareholders’ Equity Shares Amount Balance as of January 1, 2025 30,202,003 $ 298 $ 384,932 $ 982,304 $ ( 141,473 ) $ 1,226,061 Net Income (Loss) — — — ( 68,100 ) — ( 68,100 ) Other comprehensive income, net of tax — — — — 33,108 33,108 Stock-based compensation expense — — 3,797 — — 3,797 Issuance of common stock under share-based compensation arrangements 153,718 2 ( 2 ) — — — Issuance of common stock related to employee stock purchase plan 9,262 — 200 — — 200 Cash dividends declared ( $ 0.165 per share) — — — ( 9,999 ) — ( 9,999 ) Balance as of June 30, 2025 30,364,983 $ 300 $ 388,927 $ 904,205 $ ( 108,365 ) $ 1,185,067 Balance as of January 1, 2024 29,925,612 $ 296 $ 374,888 $ 1,061,456 $ ( 162,357 ) $ 1,274,283 Net Income (Loss) — — — ( 84,140 ) — ( 84,140 ) Other comprehensive income, net of tax — — — — 1,514 1,514 Stock-based compensation expense — — 5,032 — — 5,032 Issuance of common stock under share-based compensation arrangements 244,989 1 ( 1 ) — — — Issuance of common stock related to employee stock purchase plan 9,881 — 223 — — 223 Cash dividends declared ($ 0.45 per share) — — — ( 27,453 ) — ( 27,453 ) Balance as of June 30, 2024 30,180,482 $ 297 $ 380,142 $ 949,863 $ ( 160,843 ) $ 1,169,459 See Notes to Consolidated Financial Statements. Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 7 Table of Contents EAGLE BANCORP, INC. Consolidated Statements of Cash Flows (Unaudited) (dollars in thousands) For the Six Months Ended June 30, 2025 2024 Cash Flows From Operating Activities: Net Income (loss) $ ( 68,100 ) $ ( 84,140 ) Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses 164,414 44,134 (Reversal of) provision for unfunded commitments 1,462 1,064 Goodwill impairment — 104,168 Depreciation and amortization 1,611 1,492 Gains on sale of loans — ( 37 ) Loss on mortgage servicing rights — ( 1,335 ) Securities premium amortization (discount accretion), net 2,288 2,798 Net gain on sale of other real estate owned ( 487 ) — Net increase in cash surrender value of bank owned life insurance ( 9,443 ) ( 1,412 ) Net (gain) loss on sale of investment securities 1,850 ( 7 ) Stock-based compensation expense 3,797 5,032 Decrease (increase) in other assets ( 42,346 ) 283 Increase (decrease) in other liabilities ( 40,482 ) ( 13,947 ) Net cash provided by operating activities 14,564 58,093 Cash Flows From Investing Activities: Purchases of available-for-sale investment securities ( 28,224 ) — Proceeds from maturities of available-for-sale securities 60,151 55,386 Proceeds from sale/call of available-for-sale securities 102,834 27,000 Proceeds from maturities of held-to-maturity securities 33,786 34,783 Proceeds from call of held-to-maturity securities 10,127 102 Purchases of Federal Reserve stock ( 121 ) ( 142 ) Proceeds from (purchases of) of Federal Home Loan Bank stock 21,272 ( 28,384 ) Proceeds from sale of mortgage servicing rights — 3,618 Net change in loans 80,541 ( 62,045 ) (Purchase) redemption of bank owned life insurance ( 200,000 ) — Proceeds from sale of other real estate owned 772 656 Purchase of premises and equipment ( 864 ) ( 30 ) Net cash (used in) provided by investing activities 80,274 30,944 Cash Flows From Financing Activities: Increase (decrease) in deposits ( 11,471 ) ( 540,691 ) (Decrease) increase in customer repurchase agreements ( 9,715 ) 8,633 Increase in short-term borrowings ( 440,000 ) 2,650,000 Net proceeds from long-term borrowings — ( 2,360,000 ) Proceeds from employee stock purchase plan 200 223 Cash dividends paid ( 9,999 ) ( 27,053 ) Net cash provided by (used in) financing activities ( 470,985 ) ( 268,888 ) Net Increase (Decrease) in Cash and Cash Equivalents ( 376,147 ) ( 179,851 ) Cash and Cash Equivalents at Beginning of Period 633,480 722,684 Cash and Cash Equivalents at End of Period $ 257,333 $ 542,833 Supplemental Cash Flows Information: Interest paid $ 175,450 $ 180,999 Income taxes paid 1,460 — Supplemental Non-Cash Disclosures: Initial recognition of operating lease right-of-use assets $ 15,838 $ — Transfer of loans held for investment to loans held for sale 37,576 5,000 Transfers from loans to other real estate owned — 400 See Notes to Consolidated Financial Statements. Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 8 Table of Contents Notes to Consolidated Financial Statements | Note 1 – Summary of Significant Accounting Policies EAGLE BANCORP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1 – Summary of Significant Accounting Policies Nature of Operations Eagle Bancorp, Inc. (the "Parent") and its subsidiaries (together with the Parent, the "Company"), through EagleBank (the "Bank"), conduct a full service community banking business, primarily in Northern Virginia, Suburban Maryland and Washington, D.C. The primary financial services offered by the Bank include real estate, commercial and consumer lending, as well as traditional deposit services. The Bank is also active in the origination of small business loans. The guaranteed portion of small business loans, guaranteed by the Small Business Administration ("SBA"), is typically sold to third party investors in a transaction apart from the loan’s origination. The Bank offers its products and services through twelve banking offices, four lending centers and various digital capabilities, including PC and smartphone-enabled banking services. Landroval Municipal Finance, Inc., a subsidiary of the Bank, focuses on lending to municipalities by buying debt on the public market as well as direct purchase issuance. Principles of Consolidation and Basis of Presentation The Consolidated Financial Statements include the accounts of Eagle Bancorp, Inc. and its subsidiaries with all significant intercompany transactions eliminated. EagleBank, a Maryland chartered commercial bank, is the Parent's principal subsidiary. The accounting and reporting policies of the Company conform to generally accepted accounting principles in the United States of America ("GAAP") and to general practices in the banking industry. The Consolidated Financial Statements and accompanying notes of the Company included herein are unaudited. The Consolidated Financial Statements reflect all adjustments, consisting of normal recurring adjustments, that in the opinion of management are necessary to present fairly the results for the periods presented. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). In addition to the accounting policies described below, 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 Form 10-K for the year ended December 31, 2024 ("2024 Form 10-K"). Certain reclassifications have been made to 2024 amounts previously reported to conform to the 2025 presentation. Reclassifications had no effect on net income (loss) or shareholders' equity. These statements should be read in conjunction with the audited Consolidated Financial Statements and related notes included in the Company's Annual Report on 2024 Form 10-K. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results may differ from those estimates and such differences could be material to the consolidated financial statements. The allowance for credit losses ("ACL") is a material estimate that is particularly susceptible to significant variance in the near-term. Investment Securities The Company recognizes acquired securities on the trade date. Investment securities comprise debt securities, which are classified depending on the Company's intent and ability to hold the securities to maturity. Debt securities are classified as available-for-sale ("AFS") when management may have the intent to sell them prior to maturity. Debt securities are classified as held-to-maturity ("HTM") and carried at amortized cost when management has the positive intent and ability to hold them to maturity. AFS securities are acquired as part of the Company’s asset/liability management strategy and may be sold in response to changes in interest rates, current market conditions, loan demand, changes in prepayment risk and other factors. AFS securities are carried at fair value, with unrealized gains or losses, other than impairment losses, being reported as accumulated other comprehensive income (loss), a separate component of shareholders’ equity, net of deferred income tax. Realized gains and losses, using the specific identification method, are included as a separate component of noninterest income in the Consolidated Statements of Operations. Premiums and discounts on investment securities are amortized/accreted to the earlier of call or maturity based on expected lives, which are adjusted based on prepayment assumptions and call optionality. Transfers of Investment Securities from Available-for-Sale to Held-to-Maturity Transfers of debt securities into the HTM category from the AFS category are made at amortized cost, net of unrealized gain or loss reported in accumulated other comprehensive income (loss) at the date of transfer. The unrealized holding gain or loss at Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 9 Table of Contents Notes to Consolidated Financial Statements | Note 1 – Summary of Significant Accounting Policies the date of transfer is retained in other comprehensive income (loss) and in the carrying value of the HTM securities. Such amounts are amortized over the remaining life of the security. There were no transfers during the periods presented. The Company does not intend to sell the HTM investments, and it is more likely than not that the Company will not have to sell the securities before recovery of its amortized cost basis, which may be at maturity. Loans The Company classifies loans in its portfolio as either held for investment ("HFI"), when management has the intent and ability to hold the loans for the foreseeable future or until maturity or payoff, or held for sale ("HFS"). HFS loans are reported at the lower of cost or fair value on the Consolidated Balance Sheets. HFI loans are stated at the principal amount outstanding, net of unamortized deferred costs and fees. Interest income on loans is recognized at the contractual rate on the principal amounts outstanding. It is the Company’s policy to discontinue the accrual of interest when circumstances indicate that collection is doubtful. Loan origination fees, net of direct loan origination costs, and commitment fees are deferred and amortized on the interest method over the term of the loan. Past due loans are placed on nonaccrual status when the contractual payment of principal or interest has become 90 days past due or there is a clear indication that the borrower's cash flow may not be sufficient to meet payments as they become due, even when the loan is currently performing. A loan may remain on accrual status if it is in the process of collection and is well secured. When a loan is placed on nonaccrual status, all previously accrued and unpaid interest is reversed through interest income. Interest income is subsequently recognized on a cash basis as long as the remaining book balance of the asset is deemed to be collectible. If collectability is questionable, then cash payments are applied to principal. A loan is placed back on accrual status when both principal and interest are current and it is probable that we will be able to collect all amounts due (both principal and interest) according to the terms of the loan agreement. Allowance for Credit Losses The table below presents a breakdown of the current provision for credit losses included in our Consolidated Statements of Operations. For the Three Months Ended June 30, For the Six Months Ended June 30, (dollars in thousands) 2025 2024 2025 2024 Provision for (reversal of) credit losses - loans $ 138,205 $ 8,904 $ 164,513 $ 44,078 Provision for (reversal of) credit losses - HTM debt securities ( 46 ) 55 ( 99 ) 56 Total Provision for credit losses $ 138,159 $ 8,959 $ 164,414 $ 44,134 Allowance for Credit Losses - Loans The ACL - Loans is an estimate of the expected credit losses in the HFI loans portfolio. The Company's ACL on its loan portfolio is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans. Loans, or portions thereof, are charged off against the allowance when they are deemed uncollectible. Expected recoveries are recorded to the extent they do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. The ACL - Loans is measured on a collective pool basis when similar risk characteristics are present. Reserves on loans that do not share similar risk characteristics are evaluated on an individual basis. Nonaccrual loans are specifically reviewed for loss potential and when deemed appropriate are assigned a reserve based on an individual evaluation. The remainder of the portfolio, representing all loans not evaluated individually for impairment, is pooled into portfolio segments by call report codes and a loan-level probability of default ("PD") / Loss Given Default ("LGD") cash flow method is applied using an exposure at default ("EAD") model. These historical loss rates are then modified to incorporate our reasonable and supportable forecast of future losses at the portfolio segment level, as well as any necessary qualitative adjustments. The Company uses regression analysis of historical internal and peer data provided by a third-party provider (as Company loss data is insufficient) to determine suitable credit loss drivers to utilize when modeling lifetime PD and LGD. This analysis also determines how expected PD will be impacted by different forecasted levels of the loss drivers. A similar process is employed to calculate a reserve assigned to off-balance sheet commitments, specifically unfunded loan commitments and letters of credit, and any needed reserve is recorded in reserve for unfunded commitments ("RUC") on the Consolidated Balance Sheets. For periods beyond which we are able to develop reasonable and supportable forecasts, we revert to the historical loss rate on a straight-line basis over a twelve-month period. For each of the loan segments listed below, the Company generates cash flow projections at the instrument level wherein payment expectations are adjusted for estimated prepayment speeds, PD rates and LGD rates. The modeling of expected prepayment speeds is based on historical internal data. EAD is based on each instrument's underlying amortization schedule in order to estimate the bank's expected credit loss exposure at the time of the borrower's potential default. Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 10 Table of Contents Notes to Consolidated Financial Statements | Note 1 – Summary of Significant Accounting Policies Portfolio segments are used to pool loans with similar risk characteristics and align with our methodology for measuring current expected credit losses ("CECL"). A summary of our primary portfolio segments is as follows: Commercial . The commercial loan portfolio comprises lines of credit and term loans for working capital, equipment and other business assets across a variety of industries. These loans are used for general corporate purposes including financing working capital, internal growth and acquisitions; and are generally secured by accounts receivable, inventory, equipment and other assets of our clients’ businesses. Income producing – commercial real estate . Income producing commercial real estate loans comprise permanent and bridge financing provided to professional real estate owners/managers of commercial and residential real estate projects and properties who generally have a demonstrated record of past success with similar properties. Collateral properties include apartment buildings, office buildings, hotels, mixed-use buildings, retail, data centers, warehouses, and shopping centers. The primary source of repayment on these loans is generally expected to come from lease or operation of the real property collateral. Income producing commercial real estate loans are impacted by fluctuations in collateral values, as well as rental demand and rates. Owner occupied – commercial real estate. The owner occupied commercial real estate portfolio comprises permanent financing provided to operating companies and their related entities for the purchase or refinance of real property wherein their business operates. Collateral properties include industrial property, office buildings, religious facilities, mixed-use property, healthcare and educational facilities. Real Estate Mortgage – Residential. Real estate mortgage residential loans comprise consumer mortgages for the purpose of purchasing or refinancing first lien real estate loans secured by primary-residence, second-home and rental residential real property. Construction – commercial and residential . The construction commercial and residential loan portfolio comprises loans made to builders and developers of commercial and residential property, for renovation, new construction and development projects. Collateral properties include apartment buildings, mixed-use properties, residential condominiums, single unit and 1-4 unit residential properties and office buildings. The primary source of repayment on these loans is expected to come from the sale, permanent financing or lease of the real property collateral. Construction loans are impacted by fluctuations in collateral values and the ability of the borrower or ultimate purchaser to obtain permanent financing. Construction – commercial and industrial ("C&I") (owner occupied) . The construction C&I (owner occupied) portfolio comprises loans to operating companies and their related entities for new construction or renovation of the real or leased property in which they operate. Generally, these loans contain provisions for conversion to an owner occupied commercial real estate loan or to a commercial loan after completion of construction. Collateral properties include industrial, healthcare, religious facilities, restaurants and office buildings. Home Equity . The home equity portfolio comprises consumer lines of credit and loans secured by subordinate liens on residential real property. Other Consumer . The other consumer portfolio comprises consumer loans not secured by real property, including personal lines of credit and loans, overdraft lines and vehicle loans. This category also includes other loan items such as overdrawn deposit accounts as well as loans and loan payments in process. The ACL also includes a qualitative adjustment for inherent risks not reflected in the historical quantitative analysis associated with the reasonable and supportable forecast. Relevant factors include, but are not limited to, concentrations of credit risk, appraisal risk from volatility in the market, changes in underwriting standards, experience and depth of lending staff and trends in delinquencies. While our methodology in establishing the reserve for credit losses attributes portions of the ACL and RUC to the commercial and consumer portfolio segments, the entire ACL and RUC is available to absorb credit losses expected in the total loan portfolio and total amount of unfunded credit commitments, respectively. Our model may reflect assumptions by management that are not covered by the qualitative and environmental factors, and we reevaluate all of its factors quarterly. The company uses four economic variables in its cash flow model: national unemployment, Commercial Real Estate ("CRE") Price Index, House Price Index and Gross Domestic Product ("GDP"), which are incorporated by utilizing a Loss Driver Analysis approach that factors in historical losses, including during the Great Recession, of regional peer banks and the Bank. The updated model incorporates a weighting of three economic scenarios; baseline, upside and downside. The scenarios cover the four economic forecast variables, with each segment of the portfolio linked to two of these variables, depending on the segment. The loss driver analysis is spread over a reasonable and supportable period of 18 months and reverts back to a historical loss rate over twelve months on a straight-line basis over the loan's remaining maturity. Management leverages economic projections from reputable and independent third parties to inform its loss driver forecasts over the forecast period. We have several pass credit grades that are assigned to loans based on varying levels of risk, ranging from loans that are secured by cash or marketable securities, to watch list loans that have all the characteristics of an acceptable credit risk but warrant more than the normal level of monitoring. Special mention loans are those that are currently protected by the sound Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 11 Table of Contents Notes to Consolidated Financial Statements | Note 1 – Summary of Significant Accounting Policies worth and paying capacity of the borrower, but that are potentially weak and constitute an additional credit risk. These loans have the potential to deteriorate to a substandard grade due to the existence of financial or administrative deficiencies. Substandard loans have a well-defined weakness or weaknesses that jeopardizes the liquidation of the debt. They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. Some substandard loans are inadequately protected by the sound worth and paying capacity of the borrower and of the collateral pledged and may be considered impaired. Substandard loans can be accruing or can be on nonaccrual depending on the circumstances of the individual loans. Loans graded as doubtful have all the weaknesses inherent in substandard loans with the added characteristics that the weaknesses make collection in full highly questionable and improbable. The possibility of loss is extremely high. All doubtful loans are accounted for on a nonaccrual basis. Classified loans is the aggregation of loans graded substandard and doubtful. The methodology used in the estimation of the ACL, which is performed at least quarterly, is designed to be dynamic and responsive to changes in portfolio credit quality and forecasted economic conditions. Changes are reflected in the pool-basis allowance and individually assessed loans as the collectability of classified loans is evaluated with new information. As our portfolio has matured, historical loss ratios have been closely monitored. The review of the appropriateness of the allowance is performed by executive management and presented to management committees and the Audit Committee of the Board of Directors ("Board"). The committees' reports to the Board are part of the Board's review on a quarterly basis of our consolidated financial statements. When management determines that foreclosure is probable, and for certain collateral-dependent loans where foreclosure is not considered probable, expected credit losses are based on the estimated fair value of the collateral adjusted for selling costs, when appropriate. A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals and modifications unless management has a reasonable expectation that a borrower will experience financial difficulty. We do not measure an ACL on accrued interest receivable balances because these balances are written off in a timely manner as a reduction to interest income when loans are placed on nonaccrual status. Collateral Dependent Financial Assets For collateral dependent loans for which the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the financial asset to be provided substantially through the sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the asset as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the net present value ("NPV") from the operation of the collateral. When repayment is expected to be from the sale of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the fair value of the underlying collateral less estimated cost to sell. The ACL may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the financial asset. Loan Modifications to Borrowers in Financial Difficulty The Company evaluates loan restructurings to determine if we have a loan modification and whether it results in a new loan or the continuation of the existing loan. Loan modifications to borrowers experiencing financial difficulty that result in a direct change in the timing or amount of contractual cash flows include situations where there are principal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions, and combinations of the listed modifications. A loan that is considered a modified loan may be subject to an individually-evaluated loan analysis if the commitment is $ 500 thousand or greater; otherwise, the restructured loan remains in the appropriate segment in the ACL model and associated provisions are adjusted based on changes in the discounted cash flows resulting from the modification of the restructured loan. Management strives to identify borrowers in financial difficulty early and work with them to modify their loan to more affordable terms before their loan reaches nonaccrual status, foreclosure or repossession of the collateral to minimize economic loss to the Company. Allowance for Credit Losses - AFS Securities For AFS debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either criteria is met, the security’s amortized cost basis is written down to fair value through income. For AFS debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 12 Table of Contents Notes to Consolidated Financial Statements | Note 1 – Summary of Significant Accounting Policies compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an ACL is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an ACL is recognized in other comprehensive income, as a non-credit-related impairment. The entire amount of an impairment loss is recognized in earnings (loss) only when: (1) the Company intends to sell the security; or (2) it is more likely than not that the Company will have to sell the security before recovery of its amortized cost basis; or (3) the Company does not expect to recover the entire amortized cost basis of the security. In all other situations, only the portion of the impairment loss representing the credit loss must be recognized in earnings (loss), with the remaining portion being recognized in other comprehensive income (loss), net of deferred taxes. Changes in the ACL are recorded as a provision for (or reversal of) credit losses. Losses are charged against the allowance when management believes the uncollectibility of an AFS security is confirmed or when either of the criteria regarding intent or requirement to sell is met. We have made a policy election to exclude accrued interest from the amortized cost basis of AFS debt securities and report accrued interest separately in accrued interest and other assets in the Consolidated Balance Sheets. AFS debt securities are placed on nonaccrual status when we no longer expect to receive all contractual amounts due, which is generally at 90 days past due. Accrued interest receivable is reversed against interest income when a security is placed on nonaccrual status. Accordingly, we do not recognize an allowance for credit loss against accrued interest receivable. Allowance for Credit Losses - HTM Securities The Company separately evaluates its HTM investment securities for any credit losses. The Company pools like securities and calculates expected credit losses through an estimate based on a security's credit rating, which is recognized as part of the ACL for HTM securities and included in the balance of HTM securities on the Consolidated Balance Sheets. If the Company determines that a security indicates evidence of deteriorated credit quality, the security is individually evaluated and a discounted cash flow analysis may be performed and compared to the amortized cost basis. Loan Commitments and Allowance for Credit Losses on Off-Balance Sheet Credit Exposures Financial instruments include off-balance sheet credit instruments such as commitments to make loans and commercial letters of credit issued to meet customer financing needs. The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded. The Company records a RUC on off-balance sheet credit exposures through a charge to provision for credit loss expense in the Company's Consolidated Statements of Operations. The RUC on off-balance sheet credit exposures is estimated by loan segment at each balance sheet date under the current expected credit loss model using the same methodologies as portfolio loans, taking into consideration the likelihood that funding will occur and is included in the RUC on the Company’s Consolidated Balance Sheets. Segment Reporting The Company has one reporting unit, one operating segment and, consequently, a single reportable segment. Refer to "Note 12 – Segment Reporting" for further details. New Authoritative Accounting Guidance Accounting Standards Pending Adoption ASU No. 2023-06, "Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative" ("ASU 2023-06") incorporates into the Accounting Standards Codification (ASC or Codification) several U.S. Securities and Exchange Commission ("SEC") disclosure requirements under Regulations S-K and S-X. The amendments in the ASU are intended to clarify or improve disclosure and presentation requirements of a variety of Codification Topics, allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC’s regulations. These requirements are similar to, but require additional information than, generally accepted accounting principles. These new updates modify the disclosure or presentation requirements of a variety of Topics in the Codification. Entities should apply the amendments in ASU 2023-06 prospectively. For entities subject to the SEC’s existing disclosure requirements and for entities that have to file or provide financial statements with or to the SEC for the purpose of selling or issuing securities that do not have contractual limits on transfer, the effective date for each amendment will be the date on which the SEC removes that related disclosure from its rules. As a result, the effective date will be different for each individual disclosure based on the effective date of the SEC’s deletion of the related disclosure. Early adoption is prohibited. For all other entities, the effective date will be two years later. Early adoption is permitted for these entities, but not before the provisions of the ASU become effective for entities subject to SEC’s regulation. The effective dates of the amendments are predicated on the SEC removing its related disclosure requirements from its regulations. However, if by June 30, 2027, the SEC has not removed the related Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 13 Table of Contents Notes to Consolidated Financial Statements | Note 1 – Summary of Significant Accounting Policies disclosure from its regulations, the amendments will be removed from the Codification and not become effective for any entity. We are currently in the process of evaluating this guidance. ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09"). The ASU requires additional income tax disclosures around effective tax rates and cash income taxes paid. ASU 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024. The new disclosure requirements around effective tax rates and cash income taxes paid only applies to year-end. There is no material impact to the interim disclosures. ASU No. 2024-01, "Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards" ("ASU 2024-01") clarifies how an entity determines whether a profits interest or similar award (hereafter a "profits interest award") is accounted for either (1) as a share-based payment arrangement, and therefore, within the scope of ASC 718 or (2) not a share-based payment arrangement and therefore within the scope of other guidance. ASU 2024-01 also improves the clarity and operation of the guidance in ASC 718-10-15-3. The guidance in ASU 2024-01 applies to all entities that issue profits interest awards as compensation to employees or non-employees in exchange for goods or services. For public business entities, the amendments are effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. For all other entities, the amendments are effective for annual periods beginning after December 15, 2025, and interim periods within those annual periods. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. If an entity adopts the amendments in an interim period, it should adopt them as of the beginning of the annual period that includes that interim period. The amendments should be applied (i) retrospectively to all prior periods presented in the financial statements or (ii) prospectively to profits interest and similar awards granted or modified on or after the date at which the entity first applies the amendments. If the amendments are applied prospectively, an entity is required to disclose the nature of and reason for the change in accounting principle. We have determined that the Company has not issued profits interests within the scope of this ASU. ASU No. 2024-02, "Codification Improvements—Amendments to Remove References to the Concepts Statements" ("ASU 2024-02") amends the Accounting Standard Codification (“Codification”) by removing references to various concepts statements. In most instances, the references are extraneous and not required to understand or apply the guidance. In other instances, the references were used in prior statements to provide guidance in certain topical areas. As stated in paragraph 105-10-05-3 of the Codification, FASB Concepts Statements are non-authoritative. These amendments will simplify the Codification which will further draw a distinction between authoritative and non-authoritative literature. The amendments are effective for public business entities for fiscal years beginning after December 15, 2024. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2025. Early application of the amendments is permitted for all entities, for any fiscal year or interim period for which financial statements have not yet been issued (or made available for issuance). If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period. An entity should apply the amendments using one of the following transition methods: (1) prospectively to all new transactions recognized on or after the date that the entity first applies the amendments, or (2) retrospectively to the beginning of the earliest comparative period presented in which the amendments were first applied. We have removed all references to the Concepts Statements in our public filings. ASU No. 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40); Disaggregation of Income Statement Expenses" ("ASU 2024-03") which requires disaggregated disclosure of income statement expenses for public business entities. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements at interim and annual reporting periods. ASU 2024-03 adds to ASC 220-40, requiring public business entities to disaggregate within the financial statement footnotes, in a tabular presentation, each relevant expense caption on the face of the income statement that includes any of the following natural expenses: (1) purchases of inventory, (2) employee compensation, (3) depreciation, (4) intangible asset amortization, and (5) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities or other types of depletion expenses. The tabular disclosure would also include certain other expenses, when applicable. ASU 2024-03 does not change or remove existing expense disclosure requirements; however, it may affect where that information appears in the footnotes to the financial statements. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this update should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this Update or (2) retrospectively to any or all prior periods presented in the financial statements. The company will expand its disclosures in the annual reporting period beginning after December 15, 2026 and interim reporting periods after to include disaggregated information related to the expenses required by the standard. Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 14 Table of Contents Notes to Consolidated Financial Statements | Note 2 – Cash and Due from Banks Note 2 – Cash and Due from Banks For the six months ended June 30, 2025 and 2024, the Bank maintained average daily balances at the Federal Reserve Bank of Richmond ("Federal Reserve Bank") of $ 1.4 billion and $ 1.7 billion, respectively, on which interest is paid. Additionally, the Bank maintains interest-bearing balances with the Federal Home Loan Bank of Atlanta ("FHLB") and noninterest-bearing balances with domestic correspondent banks to cover associated costs for services they provide to the Bank. Note 3 – Investment Securities The table below summarizes the Company's investment in AFS securities by major security type. As of June 30, 2025 (dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Estimated Fair Value U.S. agency securities $ 515,001 $ — $ ( 26,233 ) $ — $ 488,768 Residential mortgage-backed securities 670,486 52 ( 70,382 ) — 600,156 Commercial mortgage-backed securities 75,175 — ( 3,312 ) — 71,863 Municipal bonds 8,517 — ( 672 ) — 7,845 Corporate bonds 2,000 — ( 143 ) — 1,857 Total available-for-sale securities $ 1,271,179 $ 52 $ ( 100,742 ) $ — $ 1,170,489 As of December 31, 2024 U.S. treasury bonds $ 24,988 $ — $ ( 212 ) $ — $ 24,776 U.S. agency securities 600,277 — ( 41,742 ) — 558,535 Residential mortgage-backed securities 719,815 36 ( 94,535 ) — 625,316 Commercial mortgage-backed securities 53,248 — ( 4,303 ) — 48,945 Municipal bonds 8,607 — ( 593 ) — 8,014 Corporate bonds 2,000 — ( 160 ) ( 22 ) 1,818 Total available-for-sale securities $ 1,408,935 $ 36 $ ( 141,545 ) $ ( 22 ) $ 1,267,404 The table below summarizes the Company's investment in HTM securities by major security type. As of June 30, 2025 (dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Residential mortgage-backed securities $ 575,668 $ — $ ( 70,717 ) $ 504,951 Commercial mortgage-backed securities 87,025 — ( 10,382 ) 76,643 Municipal bonds 113,945 — ( 10,529 ) 103,416 Corporate bonds 121,446 7 ( 7,327 ) 114,126 Total 898,084 $ 7 $ ( 98,955 ) $ 799,136 Less: allowance for credit losses ( 1,229 ) Total held-to-maturity securities, net of ACL $ 896,855 As of December 31, 2024 Residential mortgage-backed securities $ 605,904 $ — $ ( 85,941 ) $ 519,963 Commercial mortgage-backed securities 88,575 — ( 13,069 ) 75,506 Municipal bonds 114,060 — ( 11,389 ) 102,671 Corporate bonds 131,414 — ( 9,172 ) 122,242 Total 939,953 $ — $ ( 119,571 ) $ 820,382 Less: allowance for credit losses ( 1,306 ) Total held-to-maturity securities, net of ACL $ 938,647 Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 15 Table of Contents Notes to Consolidated Financial Statements | Note 3 – Investment Securities In addition, as of June 30, 2025 and December 31, 2024, the Company held $ 30.6 million and $ 51.8 million in non-marketable equity securities, respectively, in a combination of Federal Reserve System ("Federal Reserve Board", "Federal Reserve" or "FRB") and FHLB stocks, which are required to be held for regulatory purposes. These securities cannot be disposed of other than through redemption by the issuer and, if redeemed, would be redeemed at the original cost. The securities are carried at cost, classified as restricted securities, and periodically evaluated for impairment based on ultimate recovery of par value. As of June 30, 2025 and December 31, 2024, the Company had $ 41.6 million and $ 44.8 million, respectively, of unamortized unrealized losses outstanding following the transfer of investment securities from AFS to HTM in 2022. These unrealized losses are included in accumulated other comprehensive loss and are amortized through interest income as a yield adjustment over the remaining term of the securities. Accrued interest receivable on investment securities totaled $ 6.2 million and $ 6.6 million as of June 30, 2025 and December 31, 2024, respectively. The accrued interest on investment securities is excluded from the amortized cost of the securities and is reported in other assets in the Consolidated Balance Sheets. The table below summarizes, by length of time, the Company's AFS securities that have been in a continuous unrealized loss position and HTM securities that have been in a continuous unrecognized loss position. Less than 12 Months 12 Months or Greater Total (dollars in thousands) Number of Securities Estimated Fair Value Unrealized Losses Estimated Fair Value Unrealized Losses Estimated Fair Value Unrealized Losses As of June 30, 2025 Investment securities available-for-sale: U.S. agency securities 64 $ — $ — $ 488,768 $ ( 26,233 ) $ 488,768 $ ( 26,233 ) Residential mortgage-backed securities 146 6,004 ( 15 ) 589,751 ( 70,367 ) 595,755 ( 70,382 ) Commercial mortgage-backed securities 13 28,057 ( 140 ) 43,806 ( 3,172 ) 71,863 ( 3,312 ) Municipal bonds 1 — — 7,845 ( 672 ) 7,845 ( 672 ) Corporate bonds 1 — — 1,857 ( 143 ) 1,857 ( 143 ) Total 225 $ 34,061 $ ( 155 ) $ 1,132,027 $ ( 100,587 ) $ 1,166,088 $ ( 100,742 ) Investment securities held-to-maturity: Residential mortgage-backed securities 137 $ — $ — $ 504,949 $ ( 70,717 ) $ 504,949 $ ( 70,717 ) Commercial mortgage-backed securities 15 — — 71,844 ( 10,382 ) 71,844 ( 10,382 ) Municipal bonds 33 — — 95,466 ( 10,529 ) 95,466 ( 10,529 ) Corporate bonds 29 1,942 ( 62 ) 111,184 ( 7,265 ) 113,126 ( 7,327 ) Total 214 $ 1,942 $ ( 62 ) $ 783,443 $ ( 98,893 ) $ 785,385 $ ( 98,955 ) Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 16 Table of Contents Notes to Consolidated Financial Statements | Note 3 – Investment Securities Less than 12 Months 12 Months or Greater Total (dollars in thousands) Number of Securities Estimated Fair Value Unrealized Losses Estimated Fair Value Unrealized Losses Estimated Fair Value Unrealized Losses As of December 31, 2024 Investment securities available-for-sale: U.S. treasury bonds 1 $ — $ — $ 24,776 $ ( 212 ) $ 24,776 $ ( 212 ) U.S. agency securities 71 2,300 ( 8 ) 556,235 ( 41,734 ) 558,535 ( 41,742 ) Residential mortgage-backed securities 148 7,530 ( 128 ) 616,392 ( 94,407 ) 623,922 ( 94,535 ) Commercial mortgage-backed securities 13 — — 48,945 ( 4,303 ) 48,945 ( 4,303 ) Municipal bonds 1 — — 8,014 ( 593 ) 8,014 ( 593 ) Corporate bonds 1 — — 1,818 ( 160 ) 1,818 ( 160 ) Total 235 $ 9,830 $ ( 136 ) $ 1,256,180 $ ( 141,409 ) $ 1,266,010 $ ( 141,545 ) Investment securities held-to-maturity: Residential mortgage-backed securities 140 $ — $ — $ 519,963 $ ( 85,941 ) $ 519,963 $ ( 85,941 ) Commercial mortgage-backed securities 16 — — 75,506 ( 13,069 ) 75,506 ( 13,069 ) Municipal bonds 36 4,026 ( 75 ) 98,645 ( 11,314 ) 102,671 ( 11,389 ) Corporate bonds 30 1,928 ( 77 ) 110,280 ( 9,095 ) 112,208 ( 9,172 ) Total 222 $ 5,954 $ ( 152 ) $ 804,394 $ ( 119,419 ) $ 810,348 $ ( 119,571 ) As of June 30, 2025, unrealized losses were generally attributable to changes in market interest rates and interest spread relationships subsequent to the dates the securities were originally purchased, and were considered to be temporary, and not due to credit quality concerns on the investment securities. The fair values of these securities are expected to recover as the securities approach their respective maturity dates. The Company does not intend to sell and it is likely that it will not be required to sell the securities prior to their anticipated recovery. The Company measures its AFS and HTM securities portfolios for current expected credit losses as part of its ACL analysis. For further information on provision for credit losses on AFS and HTM securities, see the Allowance for Credit Losses discussion in "Note 1 – Summary of Significant Accounting Policies". As of June 30, 2025 and December 31, 2024, the Company had an allowance for credit losses outstanding of zero and $ 22 thousand, respectively, on its AFS securities and $ 1.2 million and $ 1.3 million, respectively, on its HTM securities, each of which primarily comprise allowances for corporate bonds. Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 17 Table of Contents Notes to Consolidated Financial Statements | Note 3 – Investment Securities The table below summarizes the Company's investment in AFS securities and HTM securities by contractual maturity. Expected maturities for mortgage-backed securities ("MBS") will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. As of June 30, 2025 (dollars in thousands) Amortized Cost Estimated Fair Value Investment securities available-for-sale: Within one year $ 132,348 $ 131,057 One to five years 309,296 292,354 Five to ten years 64,840 58,623 Beyond ten years 19,034 16,436 Residential mortgage-backed securities 670,486 600,156 Commercial mortgage-backed securities 75,175 71,863 Less: allowance for credit losses — — Total investment securities available-for-sale 1,271,179 1,170,489 Investment securities held-to-maturity: Within one year 6,950 6,950 One to five years 70,009 68,381 Five to ten years 106,476 96,479 Beyond ten years 51,956 45,732 Residential mortgage-backed securities: 575,668 504,951 Commercial mortgage-backed securities 87,025 76,643 Less: allowance for credit losses ( 1,229 ) — Total investment securities held-to-maturity 896,855 799,136 Total $ 2,168,034 $ 1,969,625 The table below displays information about the sales and calls of our investment securities. For the Three Months Ended June 30, For the Six Months Ended June 30, (dollars in thousands) 2025 2024 2025 2024 Proceeds from sales and calls $ 62,909 $ 50 $ 112,961 $ 27,102 Gross realized gains from sales and calls 3 3 8 7 Gross realized losses from sales and calls 1,857 — 1,858 — As of June 30, 2025 and December 31, 2024, the book value of securities pledged as collateral for certain government deposits, securities sold under agreements to repurchase and certain lines of credit with correspondent banks was $ 620.6 million and $ 369.1 million, respectively, which were well in excess of required amounts in order to operationally provide significant reserve amounts for new business. As of June 30, 2025 and December 31, 2024, there were no holdings of securities of any one issuer, other than the U.S. Government and U.S. agency securities, which exceeded ten percent of shareholders’ equity. Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 18 Table of Contents Notes to Consolidated Financial Statements | Note 4 – Loans and Allowance for Credit Losses Note 4 – Loans and Allowance for Credit Losses The Bank makes loans to customers primarily in the Washington, D.C. metropolitan area and surrounding communities. A substantial portion of the Bank’s loan portfolio consists of loans to businesses secured by real estate and other business assets. The table below presents HFI Loans, net of unamortized net deferred fees, summarized by portfolio segment. As of June 30, 2025 December 31, 2024 (dollars in thousands) Amount % Amount % Commercial $ 1,207,512 15 % $ 1,183,341 15 % PPP loans 164 — % 287 — % Income producing - commercial real estate 3,768,884 48 % 4,064,846 51 % Owner occupied - commercial real estate 1,365,901 18 % 1,269,669 16 % Real estate mortgage - residential 45,921 1 % 50,535 1 % Construction - commercial and residential 1,211,728 16 % 1,210,763 15 % Construction - C&I (owner occupied) 69,554 1 % 103,259 1 % Home equity 49,224 1 % 51,130 1 % Other consumer 2,776 — % 1,058 — % Total loans 7,721,664 100 % 7,934,888 100 % Less: allowance for credit losses ( 183,796 ) ( 114,390 ) Net loans (1) $ 7,537,868 $ 7,820,498 (1) Excludes accrued interest receivable of $ 37.8 million and $ 42.9 million as of June 30, 2025 and December 31, 2024, respectively, which were recorded in other assets on the Consolidated Balance Sheets. Unamortized net deferred fees and costs were $ 18.4 million and $ 18.8 million as of June 30, 2025 and December 31, 2024, respectively. During the six months ended June 30, 2025, certain loans were reclassified from HFI to HFS loans with the mark-to-market value of $ 37.6 million as reported on the Consolidated Balance Sheets. As of June 30, 2025 and December 31, 2024, the Bank serviced $ 77.5 million and $ 63.7 million, respectively, of SBA loans and other loan participations, which are not reflected as loan balances on the Consolidated Balance Sheets. During the year ended December 31, 2024, the Company sold the remaining servicing rights to all FHA loans. Real estate loans are secured primarily by duly recorded first deeds of trust or mortgages. In some cases, the Bank may accept a recorded junior trust position. In general, borrowers will have a proven ability to build, lease, manage and/or sell a commercial or residential project and demonstrate satisfactory financial condition. Additionally, an equity contribution toward the project is customarily required. Construction loans require that the financial condition and experience of the general contractor and major subcontractors be satisfactory to the Bank. Guaranteed, fixed price contracts are required whenever appropriate, along with payment and performance bonds or completion bonds for larger scale projects. Loans intended for residential land acquisition, lot development and construction are made on the premise that the land: 1) is or will be developed for building sites for residential structures; and 2) will ultimately be utilized for construction or improvement of residential zoned real properties, including the creation of housing. Residential development and construction loans will finance projects such as single family subdivisions, planned unit developments, townhouses and condominiums. Residential land acquisition, development and construction ("ADC") loans generally are underwritten with a maximum term of 36 months, including extensions approved at origination. Commercial land acquisition and construction loans are secured by real property where loan funds will be used to acquire land and to construct or improve appropriately zoned real property for the creation of income producing or owner-occupied commercial properties. Borrowers are generally required to put equity into each project at levels determined by the appropriate approval authority. Commercial land acquisition and construction loans generally are underwritten with a maximum term of 24 months. Substantially all construction draw requests must be presented in writing on American Institute of Architects documents and certified either by the contractor, the borrower and/or the borrower’s architect. Each draw request shall also include the borrower’s soft cost breakdown certified by the borrower or their Chief Financial Officer. Prior to an advance, the Bank or its contractor inspects the project to determine that the work has been completed, to justify the draw requisition. Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 19 Table of Contents Notes to Consolidated Financial Statements | Note 4 – Loans and Allowance for Credit Losses Commercial permanent loans are generally secured by improved real property which is generating income in the normal course of operation. Debt service coverage, assuming stabilized occupancy, must be satisfactory to support a permanent loan. The debt service coverage ratio ("DSCR") is ordinarily at least 1.15 to 1.0. As part of the underwriting process, DSCRs are stress tested assuming a 200 basis point increase in interest rates from their current levels. Commercial permanent loans generally are underwritten with a term not greater than 10 years or the remaining useful life of the property, whichever is less. The preferred term is between five to seven years , with amortization to a maximum of 25 years. The Company’s loan portfolio includes ADC real estate loans including both investment and owner occupied projects. ADC loans amounted to $ 1.7 billion as of June 30, 2025. A portion of the ADC portfolio, both speculative and non-speculative, includes loan-funded interest reserves at origination. ADC loans that provide for the use of interest reserves represent approximately 55 % of the outstanding ADC loan portfolio as of June 30, 2025. The decision to establish a loan-funded interest reserve is made upon origination of the ADC loan and is based upon a number of factors considered during underwriting of the credit including: (1) the feasibility of the project; (2) the experience of the sponsor; (3) the creditworthiness of the borrower and guarantors; (4) borrower equity contribution; and (5) the level of collateral protection. When appropriate, an interest reserve provides an effective means of addressing the cash flow characteristics of a properly underwritten ADC loan. The Company does not significantly utilize interest reserves in other loan products. The Company recognizes that one of the risks inherent in the use of interest reserves is the potential masking of underlying problems with the project and/or the borrower’s ability to repay the loan. In order to mitigate this inherent risk, the Company employs a series of reporting and monitoring mechanisms on all ADC loans, whether or not an interest reserve is provided, including: (1) construction and development timelines which are monitored on an ongoing basis which track the progress of a given project to the timeline projected at origination; (2) a construction loan administration department independent of the lending function; (3) third party independent construction loan inspection reports; (4) monthly interest reserve monitoring reports detailing the balance of the interest reserves approved at origination and the days of interest carry represented by the reserve balances as compared to the then current anticipated time to completion and/or sale of speculative projects; and (5) quarterly commercial real estate construction meetings among senior Company management, which includes monitoring of current and projected real estate market conditions. If a project has not performed as expected, it is not the customary practice of the Company to increase loan funded interest reserves. The table below details activity in the ACL by portfolio segment. PPP loans are excluded from these tables since they do not carry an allowance for credit loss, as these loans are fully guaranteed as to principal and interest by the SBA, whose guarantee is backed by the full faith and credit of the U.S. Government. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories. Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 20 Table of Contents Notes to Consolidated Financial Statements | Note 4 – Loans and Allowance for Credit Losses (dollars in thousands) Commercial Income Producing - Commercial Real Estate Owner Occupied - Commercial Real Estate Real Estate Mortgage - Residential Construction -Commercial and Residential Construction - C&I (Owner Occupied) Home Equity Other Consumer Total For the Three Months Ended June 30, 2025 Allowance for credit losses: Balance at beginning of year $ 20,662 $ 61,937 $ 26,872 $ 670 $ 16,891 $ 1,680 $ 724 $ 33 $ 129,469 Loans charged-off ( 698 ) ( 68,025 ) ( 4,935 ) — ( 10,703 ) — — ( 31 ) ( 84,392 ) Recoveries of loans previously charged-off 162 329 23 — — — — — 514 Net loans (charged-off) and recovered ( 536 ) ( 67,696 ) ( 4,912 ) — ( 10,703 ) — — ( 31 ) ( 83,878 ) Provision for (reversal of) credit losses 8,829 99,965 5,222 144 19,801 3,889 308 47 138,205 Ending balance $ 28,955 $ 94,206 $ 27,182 $ 814 $ 25,989 $ 5,569 $ 1,032 $ 49 $ 183,796 For the Three Months Ended June 30, 2024 Allowance for credit losses: Balance at beginning of year $ 23,682 $ 45,937 $ 13,537 $ 893 $ 13,058 $ 1,929 $ 618 $ 30 $ 99,684 Loans charged-off ( 2,091 ) ( 386 ) — — — — — ( 69 ) ( 2,546 ) Recoveries of loans previously charged-off 50 185 24 — — — — — 259 Net loans (charged-off) and recovered ( 2,041 ) ( 201 ) 24 — — — — ( 69 ) ( 2,287 ) Provision for (reversal of) credit losses ( 630 ) 7,515 2,080 ( 143 ) 452 ( 498 ) 59 69 8,904 Ending balance $ 21,011 $ 53,251 $ 15,641 $ 750 $ 13,510 $ 1,431 $ 677 $ 30 $ 106,301 For the Six Months Ended June 30, 2025 Allowance for credit losses: Balance at beginning of year $ 19,390 $ 55,185 $ 22,654 $ 610 $ 14,585 $ 1,282 $ 653 $ 31 $ 114,390 Loans charged-off ( 968 ) ( 74,195 ) ( 9,797 ) — ( 10,703 ) — — ( 35 ) ( 95,698 ) Recoveries of loans previously charged-off 215 329 47 — — — — — 591 Net loans (charged-off) and recovered ( 753 ) ( 73,866 ) ( 9,750 ) — ( 10,703 ) — — ( 35 ) ( 95,107 ) Provision for (reversal of) credit losses 10,318 112,887 14,278 204 22,107 4,287 379 53 164,513 Ending balance $ 28,955 $ 94,206 $ 27,182 $ 814 $ 25,989 $ 5,569 $ 1,032 $ 49 $ 183,796 For the Six Months Ended June 30, 2024 Allowance for credit losses: Balance at beginning of year $ 17,824 $ 40,050 $ 14,333 $ 861 $ 10,198 $ 1,992 $ 657 $ 25 $ 85,940 Loans charged-off ( 2,587 ) ( 21,329 ) — — ( 129 ) — — ( 70 ) ( 24,115 ) Recoveries of loans previously charged-off 166 185 47 — — — — — 398 Net loans (charged-off) and recovered ( 2,421 ) ( 21,144 ) 47 — ( 129 ) — — ( 70 ) ( 23,717 ) Provision for (reversal of) credit losses 5,608 34,345 1,261 ( 111 ) 3,441 ( 561 ) 20 75 44,078 Ending balance $ 21,011 $ 53,251 $ 15,641 $ 750 $ 13,510 $ 1,431 $ 677 $ 30 $ 106,301 Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 21 Table of Contents Notes to Consolidated Financial Statements | Note 4 – Loans and Allowance for Credit Losses The table below presents the amortized cost basis of collateral-dependent HFI loans by portfolio segment. As of June 30, 2025 December 31, 2024 (dollars in thousands) Business/Other Assets Real Estate Business/Other Assets Real Estate Commercial $ 1,608 $ 2,526 $ 1,214 $ 1,125 Income-producing-commercial real estate 880 178,716 880 167,574 Owner occupied - commercial real estate — 17,525 — 37,746 Real estate mortgage- residential — 5,736 — — Construction - commercial and residential — 19,488 — — Home equity — 507 — 303 Total $ 2,488 $ 224,498 $ 2,094 $ 206,748 Credit Quality Indicators The Company uses several credit quality indicators to manage credit risk in an ongoing manner. The Company’s primary credit quality indicator is an internal credit risk rating system that categorizes loans into pass, special mention or classified categories. Credit risk ratings are applied individually to those classes of loans that have significant or unique credit characteristics that benefit from a case-by-case evaluation. These are typically loans to businesses or individuals in the classes which comprise the commercial portfolio segment. Groups of loans that are underwritten and structured using standardized criteria and characteristics, such as statistical models (e.g., credit scoring or payment performance), are typically risk rated and monitored collectively. These are typically loans to individuals in the classes which comprise the consumer portfolio segment. The following are the definitions of the Company’s credit quality indicators: Pass: Loans in all classes that comprise the commercial and consumer portfolio segments that are not adversely rated, are contractually current as to principal and interest and are otherwise in compliance with the contractual terms of the loan agreement. Management believes that there is a low likelihood of loss related to those loans that are considered pass. Special Mention: Loans in the classes that comprise the commercial portfolio segment that have potential weaknesses that deserve management’s close attention. If not addressed, these potential weaknesses may result in deterioration of the repayment prospects for the loan. The special mention credit quality indicator is not used for classes of loans that comprise the consumer portfolio segment. Management believes that there is a moderate likelihood of some loss related to those loans that are considered special mention. Classified (a) Substandard – Loans inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the company will sustain some loss if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard loans, does not have to exist in individual loans classified substandard. Classified (b) Doubtful – Loans that have all the weaknesses inherent in a loan classified substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors, which may work to the advantage and strengthening of the assets, its classification as an estimated loss is deferred until its more exact status may be determined. Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 22 Table of Contents Notes to Consolidated Financial Statements | Note 4 – Loans and Allowance for Credit Losses The Company's credit quality indicators are generally updated annually, however, credits rated "Special Mention" or below are reviewed more frequently. The table below presents the amortized cost basis of HFI loans by risk category, class and year of origination, along with any charge-offs that were recorded in the applicable loan segment, if applicable. (dollars in thousands) Prior 2021 2022 2023 2024 2025 Revolving Loans Amort. Cost Basis Revolving Loans Convert. to Term Total As of June 30, 2025 Commercial: Pass $ 143,121 $ 32,967 $ 43,524 $ 64,821 $ 102,890 $ 188,723 $ 530,157 $ 629 $ 1,106,832 Special Mention 9,772 379 16,611 996 — — 20,116 — 47,874 Substandard 23,932 1,932 11,028 356 — — 12,257 3,301 52,806 Total 176,825 35,278 71,163 66,173 102,890 188,723 562,530 3,930 1,207,512 YTD gross charge-offs ( 379 ) ( 218 ) — — — — ( 250 ) — ( 847 ) PPP loans: Pass — 164 — — — — — — 164 Income producing - commercial real estate: Pass 1,316,661 609,238 545,366 297,074 86,003 128,851 166,584 699 3,150,476 Special Mention 48,786 34,956 28,406 — — — — — 112,148 Substandard 377,483 51,815 76,712 — — — 250 — 506,260 Total 1,742,930 696,009 650,484 297,074 86,003 128,851 166,834 699 3,768,884 YTD gross charge-offs ( 40,985 ) — — — — — ( 10,500 ) — ( 51,485 ) Owner occupied - commercial real estate: Pass 608,681 133,056 36,543 106,009 122,315 78,517 178,345 — 1,263,466 Special Mention 9,693 — — — — — — 9,693 Substandard 88,010 3,183 1,083 466 — — — — 92,742 Total 706,384 136,239 37,626 106,475 122,315 78,517 178,345 — 1,365,901 YTD gross charge-offs ( 9,797 ) — — — — — — — ( 9,797 ) Real estate mortgage - residential: Pass 15,800 6,460 12,074 5,851 — — — — 40,185 Substandard 5,736 — — — — — — — 5,736 Total 21,536 6,460 12,074 5,851 — — — — 45,921 Construction - commercial and residential: Pass 45,105 140,501 599,196 238,460 10,763 1,284 127,775 997 1,164,081 Special Mention — 3,596 — — — — — — 3,596 Substandard 31,379 12,688 ( 16 ) — — — — — 44,051 Total 76,484 156,785 599,180 238,460 10,763 1,284 127,775 997 1,211,728 YTD gross charge-offs ( 10,703 ) — — — — — — — ( 10,703 ) Construction - C&I (owner occupied): Pass 34,196 79,778 ( 139,725 ) 38,060 34,785 8,969 812 12,679 69,554 Home equity Pass 1,707 35 114 — — — 46,099 736 48,691 Substandard 53 212 220 — — — 48 — 533 Total 1,760 247 334 — — — 46,147 736 49,224 Other consumer Pass — — — — 10 649 2,117 — 2,776 YTD gross charge-offs ( 3 ) — — — — — — ( 32 ) ( 35 ) Total Recorded Investment $ 2,760,115 $ 1,110,960 $ 1,231,136 $ 752,093 $ 356,766 $ 406,993 $ 1,084,560 $ 19,041 $ 7,721,664 Total YTD gross charge-offs $ ( 61,867 ) $ ( 218 ) $ — $ — $ — $ — $ ( 10,750 ) $ ( 32 ) $ ( 72,867 ) Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 23 Table of Contents Notes to Consolidated Financial Statements | Note 4 – Loans and Allowance for Credit Losses (dollars in thousands) Prior 2020 2021 2022 2023 2024 Revolving Loans Amort. Cost Basis Revolving Loans Convert. to Term Total As of December 31, 2024 Commercial: Pass $ 132,595 $ 26,775 $ 133,400 $ 110,439 $ 89,608 $ 104,927 $ 513,645 $ 4,394 $ 1,115,783 Special Mention 7,828 3,479 — — — — 18,384 — 29,691 Substandard 11,404 3,713 2,128 519 — — 12,223 7,880 37,867 Total 151,827 33,967 135,528 110,958 89,608 104,927 544,252 12,274 1,183,341 YTD gross charge-offs ( 4,350 ) — — — — — ( 506 ) ( 50 ) ( 4,906 ) PPP loans: Pass — — 287 — — — — — 287 Income producing - commercial real estate: Pass 1,442,246 176,268 626,527 680,822 276,731 151,535 216,363 29,243 3,599,735 Special Mention 74,251 91,643 — 20,600 — — — — 186,494 Substandard 266,309 1,808 — — — — 10,500 — 278,617 Total 1,782,806 269,719 626,527 701,422 276,731 151,535 226,863 29,243 4,064,846 YTD gross charge-offs ( 29,898 ) ( 386 ) — — — — — — ( 30,284 ) Owner occupied - commercial real estate: Pass 622,258 57,611 219,162 39,221 138,860 69,623 299 — 1,147,034 Special Mention 23,658 — — — — — — — 23,658 Substandard 96,634 1,248 — 1,095 — — — — 98,977 Total 742,550 58,859 219,162 40,316 138,860 69,623 299 — 1,269,669 YTD gross charge-offs ( 3,800 ) — — — — — — — ( 3,800 ) Real estate mortgage - residential: Pass 20,080 2,435 9,972 12,181 5,867 — — — 50,535 Total 20,080 2,435 9,972 12,181 5,867 — — — 50,535 Construction - commercial and residential: Pass 26,739 38,385 199,933 595,496 202,577 7,588 124,508 — 1,195,226 Special Mention — — 4,964 — — — — — 4,964 Substandard 5,683 — 4,890 — — — — — 10,573 Total 32,422 38,385 209,787 595,496 202,577 7,588 124,508 — 1,210,763 YTD gross charge-offs ( 129 ) — — — — — — — ( 129 ) Construction - C&I (owner occupied): Pass 6,063 24,632 — 36,544 8,458 26,730 832 — 103,259 Home equity: Pass 1,366 71 35 116 — — 48,443 765 50,796 Substandard 59 — 222 — — — 53 — 334 Total 1,425 71 257 116 — — 48,496 765 51,130 Other consumer: Pass 3 — — — — 49 1,006 — 1,058 YTD gross charge-offs ( 70 ) — — — — — ( 17 ) ( 1 ) ( 88 ) Total Recorded Investment $ 2,737,176 $ 428,068 $ 1,201,520 $ 1,497,033 $ 722,101 $ 360,452 $ 946,256 $ 42,282 $ 7,934,888 Total YTD gross charge-offs $ ( 38,247 ) $ ( 386 ) $ — $ — $ — $ — $ ( 523 ) $ ( 51 ) $ ( 39,207 ) Nonaccrual and Past Due Loans Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on nonaccrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on nonaccrual status whether or not such loans are considered past due. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 24 Table of Contents Notes to Consolidated Financial Statements | Note 4 – Loans and Allowance for Credit Losses The table below presents, by portfolio segment, information related to the amortized cost basis of nonaccrual HFI loans. As of June 30, 2025 December 31, 2024 (dollars in thousands) Nonaccrual with No Allowance for Credit Loss Nonaccrual with an Allowance for Credit Losses Total Nonaccrual Loans Nonaccrual with No Allowance for Credit Loss Nonaccrual with an Allowance for Credit Losses Total Nonaccrual Loans Commercial $ 2,990 $ 446 $ 3,436 $ 1,439 $ 609 $ 2,048 Income producing - commercial real estate 109,174 70,423 179,597 47,224 121,230 168,454 Owner occupied - commercial real estate 3,322 14,201 17,523 642 37,102 37,744 Real estate mortgage - residential 5,735 134 5,869 — 157 157 Construction- commercial and residential 4,851 14,637 19,488 — — — Home equity 507 — 507 303 — 303 Total (1) $ 126,579 $ 99,841 $ 226,420 $ 49,608 $ 159,098 $ 208,706 (1) Gross coupon interest income of $ 10.2 million, and $ 2.9 million would have been recorded for the six months ended June 30, 2025 and 2024 respectively, if nonaccrual loans shown above had been current and in accordance with their original terms, while interest actually recorded on such loans were $ 6.7 million, and none for the six months ended June 30, 2025 and 2024, respectively. See "Note 1 – Summary of Significant Accounting Policies" to the Consolidated Financial Statements for a description of the Company’s policy for placing loans on nonaccrual status. Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 25 Table of Contents Notes to Consolidated Financial Statements | Note 4 – Loans and Allowance for Credit Losses The table below presents, by portfolio segment, an aging analysis and the recorded investments in HFI loans past due. (dollars in thousands) Loans 30-59 Days Past Due Loans 60-89 Days Past Due Loans 90 Days or More Past Due Total Past Due Loans Current Loans Nonaccrual Loans Total Recorded Investment in Loans As of June 30, 2025 Commercial $ 258 $ 2,808 $ — $ 3,066 $ 1,201,010 $ 3,436 $ 1,207,512 PPP loans — — — — 164 — 164 Income producing - commercial real estate 28,058 1,069 — 29,127 3,560,160 179,597 3,768,884 Owner occupied - commercial real estate 2,058 375 — 2,433 1,345,945 17,523 1,365,901 Real estate mortgage – residential — — — — 40,052 5,869 45,921 Construction - commercial and residential — — — — 1,192,240 19,488 1,211,728 Construction - C&I (owner occupied) — — — — 69,554 — 69,554 Home equity 51 — — 51 48,666 507 49,224 Other consumer — — — — 2,776 — 2,776 Total $ 30,425 $ 4,252 $ — $ 34,677 $ 7,460,567 $ 226,420 $ 7,721,664 As of December 31, 2024 Commercial $ 5,121 $ 3,759 $ — $ 8,880 $ 1,172,413 $ 2,048 $ 1,183,341 PPP loans — — — — 287 — 287 Income producing - commercial real estate 13,804 — — 13,804 3,882,588 168,454 4,064,846 Owner occupied - commercial real estate 2,968 — — 2,968 1,228,957 37,744 1,269,669 Real estate mortgage – residential — — — — 50,378 157 50,535 Construction - commercial and residential — 1,031 — 1,031 1,209,732 — 1,210,763 Construction - C&I (owner occupied) — — — — 103,259 — 103,259 Home equity 52 — — 52 50,775 303 51,130 Other consumer 28 — — 28 1,030 — 1,058 Total $ 21,973 $ 4,790 $ — $ 26,763 $ 7,699,419 $ 208,706 $ 7,934,888 Loan Modifications for Borrowers Experiencing Financial Difficulty The Company evaluates all loan modifications according to the accounting guidance to determine if the modification results in a new loan or a continuation of the existing loan. Loan modifications to borrowers experiencing financial difficulties that result in a direct change in the timing or amount of contractual cash flows include situations where there is principal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions, and combinations of the listed modifications. Modifications with terms not as favorable to the Company as the terms for comparable loans to other customers with similar collection risk who are not refinancing or restructuring a loan with the Company and which have a direct impact on cash flows are considered modified loans to borrowers experiencing financial difficulty. The Company may offer various types of modifications when restructuring a loan. Commercial and industrial loans modified in a loan restructuring often involve temporary interest-only payments, term extensions, and converting revolving credit lines to term loans. Additional collateral, a co-borrower, or a guarantor is often requested. Commercial mortgage and construction loans modified in a loan restructuring often involve reducing the interest rate for the remaining term of the loan, extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk, or substituting or adding a new borrower or guarantor. Construction loans modified in a loan restructuring may also involve extending the interest-only payment period. Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 26 Table of Contents Notes to Consolidated Financial Statements | Note 4 – Loans and Allowance for Credit Losses Loans modified in a loan restructuring for the Company may have the financial effect of increasing the specific allowance associated with the loan. An allowance for consumer and commercial loans that have been modified in a loan restructuring is measured based on the present value of expected future cash flows discounted at the loan's effective interest rate, the loan's observable market price, or the estimated fair value of the collateral, less any selling costs, if the loan is collateral dependent. Management exercises significant judgment in developing these estimates. Commercial and consumer loans modified in a loan restructuring are closely monitored for delinquency as an early indicator of possible future default. If loans modified in a loan restructuring subsequently default, the Company evaluates the loan for possible further loss. 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. Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 27 Table of Contents Notes to Consolidated Financial Statements | Note 4 – Loans and Allowance for Credit Losses The table below presents the amortized cost basis and the financial effect of HFI loans modified for borrowers experiencing financial difficulty. (dollars in thousands) Term Extension Combination - Term Extension and Principal Payment Delay Combination - Principal Payment Delay and Interest Rate Reduction Combination - Term Extension, Principal Payment Delay and Interest Rate Reduction Total Percentage of Total Loan Type Weighted Average Term and Principal Payment Extension (1) Weighted Average Interest Rate Reduction (2) For the Three Months Ended June 30, 2025 Commercial $ 13,554 $ 10,490 $ — $ — $ 24,044 2.0 % 13 months — % Income producing - commercial real estate 4,070 103,593 — — 107,663 2.9 % 25 months — % Owner occupied - commercial real estate 12,711 — — — 12,711 0.9 % 4 months — % Real estate mortgage - residential — 5,736 — — 5,736 12.5 % 6 months — % Construction - commercial and residential 1,900 11,161 — — 13,061 1.1 % 8 months — % Total $ 32,235 $ 130,980 $ — $ — $ 163,215 For the Three Months Ended June 30, 2024 Commercial $ 36,303 $ — $ 7,896 $ — $ 44,199 3.6 % 6 months 1.63 % Income producing - commercial real estate 0 83,368 — 3,510 86,878 2.9 % 4 months 3.59 % Owner occupied - commercial real estate 876 — — — 876 0.1 % 12 months — % Construction - commercial and residential 0 11,012 — — 11,012 1.0 % 9 months — % Total $ 37,179 $ 94,380 $ 7,896 $ 3,510 $ 142,965 For the Six Months Ended June 30, 2025 Commercial $ 16,855 $ 10,490 $ — $ — $ 27,345 2.3 % 20 months — % Income producing - commercial real estate 4,070 137,203 — — 141,273 3.7 % 23 months — % Owner occupied - commercial real estate 12,711 — — — 12,711 0.9 % 4 months — % Real estate mortgage - residential — 5,736 — — 5,736 12.5 % 6 months — % Construction - commercial and residential 1,900 11,161 — — 13,061 1.1 % 8 months — % Total $ 35,536 $ 164,590 $ — $ — $ 200,126 For the Six Months Ended June 30, 2024 Commercial $ 36,303 $ — $ 7,896 $ — $ 44,199 3.6 % 8 months 1.63 % Income producing - commercial real estate — 119,252 — 3,510 122,762 2.9 % 4 months 3.59 % Owner occupied - commercial real estate 876 — — — 876 0.1 % 12 months — % Construction - commercial and residential — 11,012 — — 11,012 1.0 % 9 months — % Total $ 37,179 $ 130,264 $ 7,896 $ 3,510 $ 178,849 (1) For loans that received multiple modifications during the year, weighted average term and principal payment extensions were calculated based on the aggregate impact of the extensions received during the period. Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 28 Table of Contents Notes to Consolidated Financial Statements | Note 4 – Loans and Allowance for Credit Losses (2) The weighted average is calculated based on the total amortized cost of loans, at the year-end, that received interest rate reduction modifications during the year. The table below presents the performance of HFI loans modified during the prior twelve months for borrowers experiencing financial difficulty. June 30, 2025 Payment Status (Amortized Cost Basis) (dollars in thousands) Current 30-89 Days Past Due 90 Days or More Past Due Nonaccrual Commercial $ 43,093 $ — $ — $ 518 Income producing - commercial real estate 120,646 5,656 — 63,413 Owner occupied - commercial real estate 12,711 — — — Real estate mortgage - residential — 5,736 Construction - commercial and residential 18,083 — — 9,831 Construction - C&I (owner occupied) — — — — Total $ 194,533 $ 5,656 $ — $ 79,498 June 30, 2024 Payment Status (Amortized Cost Basis) (dollars in thousands) Current 30-89 Days Past Due 90 Days or More Past Due Nonaccrual Commercial $ 48,981 $ 3,447 $ — $ — Income producing - commercial real estate 120,954 — — 47,234 Owner occupied - commercial real estate 876 — — 19,130 Construction - commercial and residential 11,012 — — — Total $ 181,823 $ 3,447 $ — $ 66,364 The Company monitors loan payments on performing and nonperforming loans on an on-going basis to determine if a loan is considered to have a payment default. To determine the existence of a payment default, the Company analyzes the economic conditions that exist for each borrower and their ability to generate positive cash flow during a given loan's term. The table below presents the amortized cost basis of HFI loans that were experiencing payment default and were modified in the twelve months prior to that default for borrowers experiencing financial difficulty. June 30, 2025 Amortized Cost Basis (dollars in thousands) Term Extension Combination - Term Extension and Principal Payment Delay Combination - Term Extension, Principal Payment Delay and Interest Rate Reduction Commercial $ — $ 518 $ — Income producing - commercial real estate — 69,069 — Real estate mortgages - residential — 5,736 — Construction - commercial and residential — 9,831 — Total $ — $ 85,154 $ — Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 29 Table of Contents Notes to Consolidated Financial Statements | Note 4 – Loans and Allowance for Credit Losses June 30, 2024 Amortized Cost Basis (dollars in thousands) Term Extension Combination - Term Extension and Principal Payment Delay Combination - Term Extension, Principal Payment Delay and Interest Rate Reduction Commercial $ 3,447 $ — $ — Income producing - commercial real estate — 47,234 — Owner occupied - commercial real estate — 19,130 — Total $ 3,447 $ 66,364 $ — The Company individually evaluates nonaccrual loans when performing its CECL estimate to calculate the ACL. Additionally, the Company utilizes historical internal and third-party service provider sourced loss data in the determination of its PD/LGD rates applied in the calculation of its CECL estimate. Upon determination that a modified loan (or a portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is charged off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the ACL is adjusted by the same amount. Note 5 – Leases The Company accounts for leases in accordance with ASC Topic 842. A lease is defined as a contract that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Substantially all of the leases in which the Company is the lessee comprise real estate for branch offices, ATM locations and corporate office space. Substantially all of our leases are classified as operating leases and are included in operating lease right-of-use ("ROU") assets and operating lease liabilities in the Consolidated Balance Sheet. ROU assets represent our right to use an underlying asset for the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. In determining the present value of the lease payments, we use the implicit lease rate if available. If the implicit lease rate is not available, we use the incremental borrowing rate at commencement date. The incremental borrowing rate is the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment. As of June 30, 2025 and December 31, 2024, the Company had $ 31.2 million and $ 18.5 million of operating lease ROU assets respectively, and $ 37.3 million and $ 23.8 million of operating lease liabilities respectively, on the Company’s Consolidated Balance Sheets. The Company elects not to recognize ROU assets and operating lease liabilities arising from short-term leases, leases with initial terms of twelve months or less or equipment leases (deemed immaterial) on the Consolidated Balance Sheet. The leases contain options to extend or terminate the lease, which are recognized as part of the ROU assets and lease liabilities when an economic benefit to exercise the option exists and there is a 90 % probability that the Company will exercise the option. If these criteria are not met, the options are not included in our ROU assets and operating lease liabilities. As of June 30, 2025, our leases do not contain material residual value guarantees or impose restrictions or covenants related to dividends or the Company’s ability to incur additional financial obligations. On January 1, 2025, the Company commenced a new lease for its future headquarters at 7500 Old Georgetown Road in downtown Bethesda, MD. The lease expires on July 31, 2037. Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 30 Table of Contents Notes to Consolidated Financial Statements | Note 5 – Leases The tables below present lease costs and other lease information. For the Three Months Ended June 30, For the Six Months Ended June 30, (dollars in thousands) 2025 2024 2025 2024 Lease cost: Operating lease cost (cost resulting from lease payments) $ 1,893 $ 1,565 $ 3,785 $ 3,166 Variable lease cost (cost excluded from lease payments) 140 237 255 478 Sublease income — ( 10 ) — ( 40 ) Net lease cost $ 2,033 $ 1,792 $ 4,040 $ 3,604 Operating lease - operating cash flows (fixed payments) $ 1,512 $ 1,731 $ 3,011 $ 3,509 As of (dollars in thousands) June 30, 2025 December 31, 2024 Right-of-use assets - operating leases $ 31,202 $ 18,494 Operating lease liabilities $ 37,297 $ 23,815 Weighted average lease term - operating leases (in years) 9.13 6.78 Weighted average discount rate - operating leases 3.58 % 3.03 % The table below presents the future minimum payments for operating leases with initial or remaining terms of one year or more. (dollars in thousands) As of June 30, 2025 Twelve months ended: June 30, 2026 $ 5,022 June 30, 2027 4,831 June 30, 2028 4,918 June 30, 2029 4,693 June 30, 2030 4,102 Thereafter 21,357 Total future minimum lease payments 44,923 Amounts representing interest ( 7,626 ) Present value of net future minimum lease payments $ 37,297 Note 6 – Derivatives and Hedging Activities The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity and credit risk primarily by managing the amount, sources and duration of its assets and liabilities and the use of derivative financial instruments. Fair Value Hedges of Interest Rate Risk The Company during the quarter ended June 30, 2025 utilized interest rate swaps, accounted for as fair value hedges, to protect itself against adverse fluctuations in interest rates in fixed-rate available-for-sale securities. These swaps consisted of pay-fixed, receive-floating interest rate swaps used to hedge the designated benchmark interest rate. Assuming the hedging relationship qualifies as highly effective, adjustments will be made to record the hedging instrument at fair value on the balance sheet, with changes in fair value recognized in other comprehensive income (loss). Changes in fair value of the hedged item attributable to changes in the hedged risk will be reclassified out of other comprehensive income (loss) through interest income each period to offset changes in fair value of the hedging instrument, which are also recognized in interest income. Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 31 Table of Contents Notes to Consolidated Financial Statements | Note 6 – Derivatives and Hedging Activities Cash Flow Hedges of Interest Rate Risk The Company historically utilized interest rate swaptions, accounted for as cash flow hedges, to protect itself against adverse fluctuations in interest rates on a forecasted issuance of debt. During the year ended December 31, 2024, the Company terminated its interest rate swaption contracts and discontinued the associated hedging relationship. The unamortized amount in accumulated other comprehensive income (loss) related to those swaption contracts was reclassified as a reduction to interest expense. Interest Rate Products Interest rate derivatives not designated as hedges are not speculative and result from a service the Company provides to certain customers. The Company executes interest rate caps and swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting derivatives that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate derivatives associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings (loss). The Company entered into credit risk participation agreements ("RPAs") with institutional counterparties, under which the Company assumes its pro-rata share of the credit exposure associated with a borrower’s performance related to interest rate derivative contracts in exchange for a fee. The fair value of RPAs is calculated by determining the total expected asset or liability exposure of the derivatives to the borrowers and applying the borrowers’ credit spread to that exposure. 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. Credit Risk Related Contingent Features The Company has agreements with each of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. The Company is exposed to credit risk in the event of nonperformance by the interest rate derivative counterparty. The Company minimizes this risk by entering into derivative contracts with only large, stable financial institutions, and the Company has not experienced, and does not expect, any losses from counterparty nonperformance on the interest rate derivatives. The Company monitors counterparty risk in accordance with the provisions of ASC 815, "Derivatives and Hedging" . In addition, the interest rate derivative agreements contain language outlining collateral-pledging requirements for each counterparty. As of June 30, 2025, the Company had posted $ 1.7 million of cash collateral with other financial institutions and held $ 11.9 million of cash collateral on behalf of other financial institutions. The interest rate derivative agreements detail: 1) that collateral be posted when the market value exceeds certain threshold limits associated with the secured party's exposure; 2) if the Company defaults on any of its indebtedness (including default where repayment of the indebtedness has not been accelerated by the lender), then the Company could also be declared in default on its derivative obligations; and 3) if the Company fails to maintain its status as a well-capitalized institution then the counterparty could terminate the derivative positions and the Company would be required to settle its obligations under the agreements. Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 32 Table of Contents Notes to Consolidated Financial Statements | Note 6 – Derivatives and Hedging Activities The table below identifies the balance sheet category and fair value of the Company’s derivative instruments. The Company has a minimum collateral posting threshold with its derivative counterparty. If the Company had breached any provisions under the agreement as of June 30, 2025, it could have been required to settle its obligations under the agreement at the termination value. As of June 30, 2025 December 31, 2024 (dollars in thousands) Notional Amount Fair Value Balance Sheet Category Notional Amount Fair Value Balance Sheet Category Derivatives in an asset position: Derivatives designated as hedging instruments: Interest rate product $ 28,469 $ 11 Other Assets $ — $ — Other Assets Derivatives not designated as hedging instruments: Interest rate product 809,526 27,556 Other Assets 697,086 31,592 Other Assets Credit risk participation agreements 49,480 — Other Liabilities 49,480 — Other Liabilities Total 859,006 27,556 746,566 31,592 Total derivatives in an asset position $ 887,475 $ 27,567 $ 746,566 $ 31,592 Derivatives in a liability position: Derivatives not designated as hedging instruments: Interest rate product $ 809,526 $ 24,590 Other Liabilities $ 697,086 $ 29,110 Other Liabilities The table below presents the effect of the Company’s derivative financial instruments on the Consolidated Statements of Operations. Effect of Derivatives Not Designated as Hedging Instruments on the Consolidated Statements of Operations (dollars in thousands) Location of Gain or (Loss) Recognized in Income on Derivative Amount of Gain or (Loss) Recognized in Income on Derivatives For the Three Months Ended June 30, For the Six Months Ended June 30, 2025 2024 2025 2024 Derivatives Not Designated as Hedging Instruments under ASC 815-20: Interest rate products Other income / (expense) $ 566 $ 239 $ 560 $ 478 Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 33 Table of Contents Notes to Consolidated Financial Statements | Note 7 – Deposits Note 7 – Deposits The table below presents the Bank’s deposit composition. As of (dollars in thousands) June 30, 2025 December 31, 2024 Noninterest-bearing demand $ 1,532,132 $ 1,544,403 Interest-bearing transaction 895,604 1,211,791 Savings and money market 3,267,630 3,599,221 Time deposits 3,424,241 2,775,663 Total $ 9,119,607 $ 9,131,078 The table below represents the remaining maturity of time deposits. As of (dollars in thousands) June 30, 2025 December 31, 2024 2025 $ 1,631,289 $ 2,210,348 2026 1,230,598 513,984 2027 264,008 8,392 2028 123,283 10,556 2029 65,553 32,383 Thereafter 109,510 — Total $ 3,424,241 $ 2,775,663 The table below represents the time deposit accounts in excess of $250 thousand. As of (dollars in thousands) June 30, 2025 December 31, 2024 Three months or less $ 540,228 $ 189,817 More than three months through six months 292,140 387,849 More than six months through twelve months 541,474 710,021 Over twelve months 494,330 421,530 Total $ 1,868,172 $ 1,709,217 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. Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 34 Table of Contents Notes to Consolidated Financial Statements | Note 8 – Borrowings Note 8 – Borrowings The table below summarizes the Company’s borrowings, which include repurchase agreements with the Company’s customers and borrowings. (dollars in thousands) Borrowings - Principal Unamortized Deferred Issuance Costs Net Borrowings Outstanding Available Capacity (1) Maturity Dates Interest Rates (2) As of June 30, 2025 Customer repurchase agreements $ 23,442 $ — $ 23,442 $ — N/A 2.90 % Short-term borrowings: Secured borrowings: FHLB 50,000 — 50,000 1,363,585 July 11, 2025 4.40 % FRB: Discount window — — — 1,754,682 N/A N/A Total 50,000 — 50,000 3,118,267 Long-term borrowings: Senior notes 77,665 ( 1,401 ) 76,264 — September 30, 2029 10.00 % Total borrowings $ 151,107 $ ( 1,401 ) $ 149,706 $ 3,118,267 As of December 31, 2024 Customer repurchase agreements $ 33,157 $ — $ 33,157 $ — N/A 2.67 % Short-term borrowings: Secured borrowings: FHLB 490,000 — 490,000 874,270 Various 4.81 % FRB: Discount window — — — 1,800,646 N/A N/A Total 490,000 — 490,000 2,674,916 Long-term borrowings: Senior notes 77,665 ( 1,557 ) 76,108 — September 30, 2029 10.00 % Total borrowings $ 600,822 $ ( 1,557 ) $ 599,265 $ 2,674,916 (1) Available capacity on the Company's borrowings arrangements with the FHLB and the FRB comprise pledged collateral that has not been borrowed against. As of June 30, 2025, the Company had total additional undrawn borrowing capacity of approximately $ 3.4 billion, comprising unencumbered securities available to be pledged of approximately $ 0.3 billion and undrawn financing on pledged assets of $ 3.1 billion. (2) Represent the weighted average interest rate on customer repurchase agreements, borrowings outstanding and the coupon interest rate on the subordinated notes, which approximates the effective interest rate. The Company’s repurchase agreements operate on a rolling basis and do not contain contractual maturity dates. The contractual maturity dates on FHLB secured borrowings represent the maturity dates of current advances and are not evidence of a termination date on the line. There are no prepayment penalties nor unused commitment fees on any of the Company’s borrowing arrangements. Senior Notes 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 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. 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 ("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 ("Exchange 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. The Company completed the exchange offer on January 16, 2025. Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 35 Table of Contents Notes to Consolidated Financial Statements | Note 9 – Net Income (Loss) per Common Share Note 9 – Net Income (Loss) per Common Share The table below displays the calculation of net income (loss) per common share. For the Three Months Ended June 30, For the Six Months Ended June 30, (dollars and shares in thousands, except per share data) 2025 2024 2025 2024 Basic: Net income (loss) $ ( 69,775 ) $ ( 83,802 ) $ ( 68,100 ) $ ( 84,140 ) Average common shares outstanding 30,375 30,186 30,325 30,127 Basic net income (loss) per common share $ ( 2.30 ) $ ( 2.78 ) $ ( 2.25 ) $ ( 2.79 ) Diluted: Net income (loss) $ ( 69,775 ) $ ( 83,802 ) $ ( 68,100 ) $ ( 84,140 ) Average common shares outstanding 30,375 30,186 30,325 30,127 Average common shares outstanding-diluted 30,375 30,186 30,325 30,127 Diluted net income (loss) per common share (1) $ ( 2.30 ) $ ( 2.78 ) $ ( 2.25 ) $ ( 2.79 ) Anti-dilutive shares 136 48 136 54 (1) For periods ended with a net loss, anti-dilutive financial instruments have been excluded from the calculation of GAAP diluted earnings per share. Basic net income (loss) per share is computed by dividing income (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted net income (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the net income (loss) of the Company. The computation of diluted per share does not assume conversion or exercise of securities that would have an anti-dilutive effect on net income (loss) per share. Securities issued by the Company that could potentially dilute net income (loss) per share in future periods include stock options and restricted stock. To calculate diluted net income (loss) per share, the Company utilizes the Treasury Stock method which results in only an incremental number of shares added to shares outstanding during the period. Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 36 Table of Contents Notes to Consolidated Financial Statements | Note 10 – Other Comprehensive Income (Loss) Note 10 – Other Comprehensive Income (Loss) The table below presents the components of other comprehensive income (loss). (dollars in thousands) Before Tax Tax Effect Net of Tax For the Three Months Ended June 30, 2025 Net unrealized gain (loss) on securities available-for-sale $ 13,296 $ ( 3,055 ) $ 10,241 Reclassification adjustment for net gain (loss) included in net income (loss) 1,854 ( 669 ) 1,185 Total unrealized gain (loss) on securities available-for-sale 15,150 ( 3,724 ) 11,426 Amortization of unrealized gain (loss) on securities transferred to held-to-maturity 1,633 ( 378 ) 1,255 Net unrealized gain (loss) on derivatives ( 142 ) 35 ( 107 ) Other comprehensive income (loss) $ 16,641 $ ( 4,067 ) $ 12,574 For the Three Months Ended June 30, 2024 Net unrealized gain (loss) on securities available-for-sale $ 4,812 $ ( 1,183 ) $ 3,629 Reclassification adjustment for net gain (loss) included in net income (loss) ( 3 ) 1 ( 2 ) Total unrealized gain (loss) on securities available-for-sale 4,809 ( 1,182 ) 3,627 Amortization of unrealized gain (loss) on securities transferred to held-to-maturity 1,725 ( 403 ) 1,322 Net unrealized gain (loss) on derivatives ( 32 ) 8 ( 24 ) Total unrealized gain (loss) on derivatives ( 32 ) 8 ( 24 ) Other comprehensive income (loss) $ 6,502 $ ( 1,577 ) $ 4,925 For the Six Months Ended June 30, 2025 Net unrealized gain (loss) on securities available-for-sale $ 38,968 $ ( 9,374 ) $ 29,594 Reclassification adjustment for net gain (loss) included in net income (loss) 1,850 ( 670 ) 1,180 Total unrealized gain (loss) on securities available-for-sale 40,818 ( 10,044 ) 30,774 Amortization of unrealized gain (loss) on securities transferred to held-to-maturity 3,197 ( 738 ) 2,459 Net unrealized gain (loss) on derivatives ( 166 ) 41 ( 125 ) Other comprehensive income (loss) $ 43,849 $ ( 10,741 ) $ 33,108 For the Six Months Ended June 30, 2024 Net unrealized gain (loss) on securities available-for-sale $ ( 1,881 ) $ 444 $ ( 1,437 ) Reclassification adjustment for net gain (loss) included in net income (loss) ( 7 ) 1 ( 6 ) Total unrealized gain (loss) on securities available-for-sale ( 1,888 ) 445 ( 1,443 ) Amortization of unrealized gain (loss) on securities transferred to held-to-maturity 3,456 ( 749 ) 2,707 Net unrealized gain (loss) on derivatives 331 ( 81 ) 250 Other comprehensive income (loss) $ 1,899 $ ( 385 ) $ 1,514 Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 37 Table of Contents Notes to Consolidated Financial Statements | Note 10 – Other Comprehensive Income (Loss) The table below presents the changes in each component of accumulated other comprehensive income (loss), net of tax. (dollars in thousands) Available-for-Sale Securities Held-to-Maturity Securities Derivatives Accumulated Other Comprehensive Income (Loss) For the Three Months Ended June 30, 2025 Balance at beginning of period $ ( 87,504 ) $ ( 33,435 ) $ — $ ( 120,939 ) Other comprehensive income (loss) before reclassifications 10,241 — ( 107 ) 10,134 Amortization of unrealized loss on securities transferred to held-to-maturity — 1,255 — 1,255 Amounts reclassified from accumulated other comprehensive income (loss) 1,185 — — 1,185 Net other comprehensive income (loss) during period 11,426 1,255 ( 107 ) 12,574 Balance at end of period $ ( 76,078 ) $ ( 32,180 ) $ ( 107 ) $ ( 108,365 ) For the Three Months Ended June 30, 2024 Balance at beginning of period $ ( 127,316 ) $ ( 38,544 ) $ 92 $ ( 165,768 ) Other comprehensive income (loss) before reclassifications 3,629 — ( 24 ) 3,605 Amortization of unrealized loss on securities transferred to held-to-maturity — 1,322 — 1,322 Amounts reclassified from accumulated other comprehensive income (loss) ( 2 ) — — ( 2 ) Net other comprehensive income (loss) during period 3,627 1,322 ( 24 ) 4,925 Balance at end of period $ ( 123,689 ) $ ( 37,222 ) $ 68 $ ( 160,843 ) For the Six Months Ended June 30, 2025 Balance at beginning of period $ ( 106,852 ) $ ( 34,639 ) $ 18 $ ( 141,473 ) Other comprehensive income (loss) before reclassifications 29,594 — ( 125 ) 29,469 Amortization of unrealized loss on securities transferred to held-to-maturity — 2,459 — 2,459 Amounts reclassified from accumulated other comprehensive income (loss) 1,180 — — 1,180 Net other comprehensive income (loss) during period 30,774 2,459 ( 125 ) 33,108 Balance at end of period $ ( 76,078 ) $ ( 32,180 ) $ ( 107 ) $ ( 108,365 ) For the Six Months Ended June 30, 2024 Balance at beginning of period $ ( 122,246 ) $ ( 39,929 ) $ ( 182 ) $ ( 162,357 ) Other comprehensive income (loss) before reclassifications ( 1,437 ) — 250 ( 1,187 ) Amortization of unrealized loss on securities transferred to held-to-maturity — 2,707 — 2,707 Amounts reclassified from accumulated other comprehensive income (loss) ( 6 ) — — ( 6 ) Net other comprehensive income (loss) during period ( 1,443 ) 2,707 250 1,514 Balance at end of period $ ( 123,689 ) $ ( 37,222 ) $ 68 $ ( 160,843 ) Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 38 Table of Contents Notes to Consolidated Financial Statements | Note 10 – Other Comprehensive Income (Loss) The table below presents the amounts reclassified out of each component of accumulated other comprehensive income (loss). Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the Statement Where Net Income (Loss) is Presented For the Three Months Ended June 30, For the Six Months Ended June 30, (dollars in thousands) 2025 2024 2025 2024 Realized gain (loss) on sale of investment securities $ ( 1,854 ) $ 3 $ ( 1,850 ) $ 7 Net gain (loss) on sale of investment securities Income tax benefit (expense) 669 ( 1 ) 670 ( 1 ) Income tax expense Total $ ( 1,185 ) $ 2 $ ( 1,180 ) $ 6 Net Income (Loss) Note 11 – Fair Value Measurements The fair value of an asset or liability is the price that would be received to sell that asset or paid to transfer that liability in an orderly transaction occurring in the principal market (or most advantageous market in the absence of a principal market) for such asset or liability. In estimating fair value, the Company utilizes valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. Such valuation techniques are consistently applied. Inputs to valuation techniques include the assumptions that market participants would use in pricing an asset or liability. ASC 820, "Fair Value Measurements and Disclosures" , establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: Level 1 Quoted prices in active exchange markets for identical assets or liabilities. Level 2 Observable inputs other than Level 1 including quoted prices for similar assets or liabilities, quoted prices in less active markets or other observable inputs that can be corroborated by observable market data; also includes derivative contracts whose value is determined using a pricing model with observable market inputs or inputs that can be derived principally from or corroborated by observable market data. This category generally includes certain U.S. Government and agency securities, corporate debt securities, and derivative instruments. Level 3 Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation; also includes observable inputs for single dealer nonbinding quotes not corroborated by observable market data. This category generally includes certain private equity investments, retained interests from securitizations and certain collateralized debt obligations. Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 39 Table of Contents Notes to Consolidated Financial Statements | Note 11 – Fair Value Measurements Assets and Liabilities Recorded at Fair Value on a Recurring Basis The table below presents the recorded amount of assets and liabilities measured at fair value on a recurring basis. (dollars in thousands) Quoted Prices (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Total (Fair Value) As of June 30, 2025 Assets: Investment securities available-for-sale: U.S. agency securities $ — $ 488,768 $ — $ 488,768 Residential mortgage-backed securities — 600,156 — 600,156 Commercial mortgage-backed securities — 71,863 — 71,863 Municipal bonds — 7,845 — 7,845 Corporate bonds — 1,857 — 1,857 Loans held for sale — 37,576 — 37,576 Interest rate product — 27,567 — 27,567 Total assets measured at fair value on a recurring basis as of June 30, 2025 $ — $ 1,235,632 $ — $ 1,235,632 Liabilities: Interest rate product $ — $ 24,590 $ — $ 24,590 Total liabilities measured at fair value on a recurring basis as of June 30, 2025 $ — $ 24,590 $ — $ 24,590 As of December 31, 2024 Assets: Investment securities available-for-sale: U.S. treasury bonds $ — $ 24,776 $ — $ 24,776 U.S. agency securities — 558,535 — 558,535 Residential mortgage-backed securities — 625,316 — 625,316 Commercial mortgage-backed securities — 48,945 — 48,945 Municipal bonds — 8,014 — 8,014 Corporate bonds — 1,818 — 1,818 Interest rate product — 31,592 — 31,592 Total assets measured at fair value on a recurring basis as of December 31, 2024 $ — $ 1,298,996 $ — $ 1,298,996 Liabilities: Interest rate product $ — $ 29,110 $ — $ 29,110 Total liabilities measured at fair value on a recurring basis as of December 31, 2024 $ — $ 29,110 $ — $ 29,110 Investment securities available-for-sale: AFS securities are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair value is measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 2 securities includes certain U.S. treasury bonds, U.S. agency debt securities, MBS issued by Government Sponsored Entities and municipal bonds. Securities classified as Level 3 include securities in less liquid markets, for which the carrying amounts approximate the fair value. Credit risk participation agreements : The Company enters into RPAs with institutional counterparties, under which the Company assumes its pro-rata share of the credit exposure associated with a borrower’s performance related to interest rate derivative contracts. The fair value of RPAs is calculated by determining the total expected asset or liability exposure of the derivatives to the borrowers and applying the borrowers’ credit spread to that exposure. Total expected exposure incorporates Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 40 Table of Contents Notes to Consolidated Financial Statements | Note 11 – Fair Value Measurements both the current and potential future exposure of the derivatives, derived from using observable inputs, such as yield curves and volatilities. Accordingly, RPAs fall within Level 2. Interest rate derivatives: The Company entered into an interest rate derivative agreement with an institutional counterparty, under which the Company will receive cash if and when market rates exceed the derivatives' strike rate. The fair value of the derivative is calculated by determining the total expected asset or liability exposure of the derivatives. Total expected exposure incorporates both the current and potential future exposure of the derivative, derived from using observable inputs, such as yield curves and volatilities. Accordingly, the derivative falls within Level 2. Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis The Company measures certain assets at fair value on a nonrecurring basis and the following is a general description of the methods used to value such assets. Loans: The fair value of individually assessed loans is estimated using one of several methods, including the collateral value, market value of similar debt, enterprise value, liquidation value and discounted cash flows. Those individually assessed loans not requiring a specific allowance represent loans for which the fair value of expected repayments or collateral exceed the recorded investment in such loans. As of June 30, 2025, substantially all of the Company’s individually evaluated loans were evaluated based upon the fair value of the collateral. In accordance with ASC Topic 820, individually evaluated loans where an allowance is established based on the fair value of collateral, i.e., those that are collateral dependent, require classification in the fair value hierarchy. When the fair value of the collateral is based on an observable market price or a current appraised value, the Company records the loan as nonrecurring Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company records the loan as nonrecurring Level 3. Other real estate owned ("OREO") : OREO is initially recorded at fair value less estimated selling costs. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral, which the Company classifies as a Level 3 valuation. The table below presents a ssets measured at fair value on a nonrecurring basis. There were no liabilities measured at fair value on a non-recurring basis as of June 30, 2025 and December 31, 2024. (dollars in thousands) Quoted Prices (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Total (Fair Value) As of June 30, 2025 Individually assessed loans: Commercial $ — $ — $ 3,820 $ 3,820 Income producing - commercial real estate — — 156,531 156,531 Owner occupied - commercial real estate — — 15,025 15,025 Real estate mortgage - residential — — 5,736 5,736 Construction - commercial and residential — — 16,836 16,836 Consumer — — 507 507 Other real estate owned — — 2,459 2,459 Total assets measured at fair value on a nonrecurring basis as of June 30, 2025 $ — $ — $ 200,914 $ 200,914 Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 41 Table of Contents Notes to Consolidated Financial Statements | Note 11 – Fair Value Measurements (dollars in thousands) Quoted Prices (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Total (Fair Value) As of December 31, 2024 Individually assessed loans: Commercial $ — $ — $ 2,551 $ 2,551 Income producing - commercial real estate — — 158,956 158,956 Owner occupied - commercial real estate — — 30,384 30,384 Construction - commercial and residential — — 303 303 Other real estate owned — — 2,743 2,743 Total assets measured at fair value on a nonrecurring basis as of December 31, 2024 $ — $ — $ 194,937 $ 194,937 As shown in the table above, certain assets are measured at fair value on a nonrecurring basis in accordance with GAAP. Adjustments to the fair value of these assets usually result from the application of lower-of-cost-or-fair value accounting or write-downs of individual assets after they are evaluated for impairment. The primary assets accounted for at fair value on a nonrecurring basis are related to collateral-dependent loans that are individually assessed and other real estate owned. For the collateral-dependent loans and other real estate owned, the Company measures the fair value utilizing a market valuation approach, based on an appraisal conducted by an independent, licensed appraiser. Management may discount the value from the appraisal in determining the fair value if, based on its understanding of the market conditions, the collateral had been impaired below the appraised value (Level 3). For loans that are not collateral dependent, the Company uses an income approach, specifically, the discounted cash flow method. The continuing payments are discounted over the expected life at the loan’s original contract rate and include adjustments for risk of default. Fair Value of Financial Instruments The Company discloses fair value information about financial instruments for which it is practicable to estimate the value, whether or not such financial instruments are recognized on the balance sheet. Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation, and is best evidenced by quoted market price, if one exists. Quoted market prices, if available, are shown as estimates of fair value. Because no quoted market prices exist for a portion of the Company’s financial instruments, the fair value of such instruments has been derived based on management’s assumptions with respect to future economic conditions, the amount and timing of future cash flows and estimated discount rates. Different assumptions could significantly affect these estimates. Accordingly, the net realizable value could be materially different from the estimates presented below. In addition, the estimates are only indicative of individual financial instrument values, including in certain cases, the Company's estimation of exit pricing, and should not be considered an indication of the fair value of the Company taken as a whole. Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 42 Table of Contents Notes to Consolidated Financial Statements | Note 11 – Fair Value Measurements The table below presents the estimated fair values of the Company’s financial instruments. Fair Value Measurements (dollars in thousands) Carrying Value Fair Value Quoted Prices (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) As of June 30, 2025 Assets Cash and due from banks $ 14,005 $ 14,005 $ 14,005 $ — $ — Federal funds sold 4,091 4,091 — 4,091 — Interest-bearing deposits with other banks 239,237 239,237 — 239,237 — Investment securities available-for-sale 1,170,489 1,170,489 — 1,170,489 — Investment securities held-to-maturity 896,855 799,136 — 799,136 — Federal Reserve and Federal Home Loan Bank stock 30,613 N/A — — — Loans held for sale 37,576 37,576 — 37,576 — Loans held for investment 7,721,664 7,468,787 — — 7,468,787 Bank owned life insurance 325,174 325,174 — 325,174 — Annuity investment 12,229 12,229 — 12,229 — Interest rate product 27,567 27,567 — 27,567 — Accrued interest receivable 43,993 43,993 — 43,993 — Liabilities Noninterest-bearing deposits 1,532,132 1,532,132 — 1,532,132 — Interest-bearing deposits 4,163,234 4,163,234 — 4,163,234 — Time deposits 3,424,241 3,428,427 — 3,428,427 — Customer repurchase agreements 23,442 23,442 — 23,442 — Other short-term borrowings 50,000 50,000 — 50,000 — Long-term borrowings 76,264 79,607 — 79,607 — Interest rate product 24,590 24,590 — 24,590 — Accrued interest payable 13,681 13,681 — 13,681 — As of December 31, 2024 Assets Cash and due from banks $ 11,882 $ 11,882 $ 11,882 $ — $ — Federal funds sold 2,581 2,581 — 2,581 — Interest-bearing deposits with other banks 619,017 619,017 — 619,017 — Investment securities available-for-sale 1,267,404 1,267,404 — 1,267,404 — Investment securities held-to-maturity 938,647 820,382 — 820,382 — Federal Reserve and Federal Home Loan Bank stock 51,763 N/A — — — Loans held for investment 7,934,888 7,707,424 — — 7,707,424 Bank owned life insurance 115,806 115,806 — 115,806 — Annuity investment 12,656 12,656 — 12,656 — Interest rate product 31,592 31,592 — 31,592 — Accrued interest receivable 49,479 49,479 — 49,479 — Liabilities Noninterest-bearing deposits 1,544,403 1,544,403 — 1,544,403 — Interest-bearing deposits 4,811,012 4,811,012 — 4,811,012 — Time deposits 2,775,663 2,785,891 — 2,785,891 — Customer repurchase agreements 33,157 33,157 — 33,157 — Other short-term borrowings 490,000 490,000 — 490,000 — Long-term borrowings 76,108 82,916 — 82,916 — Interest rate product 29,110 29,110 — 29,110 — Accrued interest payable 17,844 17,844 — 17,844 — Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 43 Table of Contents Notes to Consolidated Financial Statements | Note 12 – Segment Reporting Note 12 – Segment Reporting The Company has one reporting unit, one operating segment and, consequently, a single reportable segment. The Chief Executive Officer, who is the Company’s chief operating decision maker ("CODM"), monitors revenue streams and other information provided about the company’s products and services offered, primarily banking operations. The information provided to the CODM is presented on an aggregated entity-level basis, which is consistent with the accompanying Consolidated Financial Statements presented in this Form 10-Q. The CODM evaluates the financial performance of the Company’s business by evaluating revenue streams, significant expenses, and budget to actual results in assessing operating results and in allocating resources, but profitability is only determined at the entity level. The CODM uses revenue streams to evaluate product pricing and significant expenses to assess performance and evaluate return on assets. The CODM uses consolidated net income to benchmark the company against its competitors. The benchmarking analysis coupled with monitoring of budget to actual results are used in assessing performance and allocating resources. Interest income and fees on loans, investments, and deposits provide the majority of revenues in the Company's operation. Interest expense, provisions for credit losses, and payroll provide the significant expenses in the Company's operations. All of the Company's income and expenses are included in the accompanying Consolidated Financial Statements presented in this Form 10-Q. All of the Company’s operations are domestic. Note 13 – Legal Contingencies From time to time, the Company and its subsidiaries are involved in various legal proceedings incidental to their business in the ordinary course, including matters in which damages in various amounts are claimed, as well as regulatory and governmental investigations and inquiries that could result in penalties, fines or other sanctions against the Company. Based on information currently available, the Company does not believe that the liabilities (if any) resulting from such matters will have a material effect on the financial position of the Company. However, considering inherent uncertainties involved in such matters, ongoing legal expenses or an adverse outcome in one or more of these matters could materially and adversely affect the Company's financial condition, results of operations or cash flows in any particular reporting period, as well as its reputation. Under ASC 450, the Company accrues for a loss contingency when the loss is probable and reasonably estimable. The Company discloses the matter if a material loss is at least reasonably possible. Under ASC 450, a loss contingency is "reasonably possible" if "the chance of the future event or events occurring is more than remote but less than likely", and a loss contingency is "remote" if "the chance of the future event or events occurring is slight." The Company is cooperating with an ongoing investigation by the U.S. Attorney’s Office for the Middle District of Pennsylvania into, among other things, the Company’s anti-money laundering controls between approximately 2011 and 2017 and the Company’s relationship with a former customer who pleaded guilty to a charge of bank fraud in 2020. Due to the inherent uncertainty in predicting the outcome of a pending investigation, we are unable to estimate reasonably possible losses, if any, resulting from this matter. Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 44 Table of Contents Management's Discussion and Analysis