Breaking Down Eagle Bancorp, Inc. (EGBN) Financial Health: Key Insights for Investors

If you are looking at Eagle Bancorp, Inc. (EGBN), the headline number for the third quarter of 2025 is a sharp shock: a net loss of $67.5 million, or $2.22 per share, which definitely demands a closer look at the underlying credit quality. This loss isn't from a failing core business-Net Interest Income (NII) was still a solid $68.2 million-but rather from the bank's proactive, and painful, move to clear out problem loans, especially those tied to the beleaguered office real estate sector. The real story is the massive hit to the Provision for Credit Losses (money set aside for expected loan defaults), which clocked in at $113.2 million, alongside substantial net charge-offs (loans written off as uncollectible) of $140.8 million for the quarter. Still, the core capital position remains strong, with a Common Equity Tier 1 (CET1) ratio-a key measure of a bank's ability to absorb losses-at a robust 13.58%, well above regulatory minimums. The question now is whether this aggressive write-down is the one-time clearing of the decks or a sign of deeper trouble ahead.

Revenue Analysis

You need to know where Eagle Bancorp, Inc. (EGBN)'s money is actually coming from, especially now. The direct takeaway is that while core Net Interest Income is stabilizing, noninterest revenue took a sharp, planned hit in Q3 2025, showing the cost of cleaning up the balance sheet.

For a bank like Eagle Bancorp, Inc., the revenue picture is essentially split into two parts: Net Interest Income (NII) and Noninterest Income. NII is the lifeblood-what the bank earns from loans and investments minus what it pays out on deposits and borrowings. In the third quarter of 2025 (Q3 2025), NII was the dominant segment, clocking in at $68.2 million. The bank's core focus remains commercial and consumer lending in the Washington D.C. metro area, which drives the bulk of this interest revenue. If you want to dive into the strategic lens driving this, check out the Mission Statement, Vision, & Core Values of Eagle Bancorp, Inc. (EGBN).

Here's the quick math on the segment contribution for Q3 2025, showing just how much NII carries the load:

• Net Interest Income: Approximately 96.5% of total revenue.
• Noninterest Income: Approximately 3.5% of total revenue.

Noninterest income, which includes service charges and other fees, was only $2.5 million in Q3 2025. That's a tiny slice, but it's where the most volatile changes happened this quarter, and that's what we need to watch.

Year-over-Year Revenue Trends

The immediate trend is challenging. For the third quarter of 2025, total revenue actually fell by 5.1% compared to the same quarter a year ago. Honestly, this isn't a surprise given the broader pressures on regional banks and the bank's own credit quality clean-up. Looking back, the annual revenue for 2024 was $244.39 million, which was a 12.97% decrease from 2023. That's a clear deceleration. Still, analysts are projecting a brighter future, with a full-year 2025 revenue estimate sitting around $292.78 million, and some forecasts even projecting a future revenue growth rate of 42% per year, but that's a forecast, not a fact, and it hinges on the successful execution of their risk remediation strategy.

To be fair, the company is defintely focused on building up its core business, which you see in the growth of its Commercial and Industrial (C&I) loan portfolio. This C&I portfolio increased by $105 million in Q3 2025, which is a positive sign for future NII. That's the core franchise showing resilience.

Significant Near-Term Revenue Changes

The most significant change in Q3 2025 was the sharp drop in Noninterest Income, which decreased by $3.9 million from the prior quarter. This wasn't a failure of the core fee business, but a deliberate move to de-risk the balance sheet. The decline was primarily driven by two specific, non-recurring actions:

• A $3.6 million loss on the sale of two loans.
• A $2.0 million loss on the sale of investment securities.

These losses were taken to reduce higher-cost brokered funding and address asset quality challenges, particularly in the office portfolio. It's a painful but necessary step to stabilize the foundation. On the flip side, Net Interest Income actually saw a small sequential increase of $383 thousand from Q2 to Q3 2025, mostly because the cost of funding-what they pay on deposits-declined, which is a good sign for the net interest margin (NIM).

Here is a quick look at the quarterly revenue components for 2025:

Q1 2025 NII is calculated as $65.6M total revenue minus $4.1M noninterest income.

Finance: Track the Q4 2025 noninterest income release closely to confirm if these asset sales were a one-time event or a continuing trend in the balance sheet clean-up.

Profitability Metrics

You need a clear picture of Eagle Bancorp, Inc. (EGBN)'s core earnings power, and the recent numbers show a sharp break from historical performance, driven by significant credit provisions. The direct takeaway is that while the core lending spread (Net Interest Margin) is holding up, massive credit costs have pushed the company into a deep net loss, making current profitability metrics highly negative.

For a bank, the closest analog to a traditional gross profit margin is the Net Interest Margin (NIM), which measures the spread between interest earned on assets (like loans) and interest paid on liabilities (like deposits). In the third quarter of 2025, Eagle Bancorp's NIM was 2.43%, an increase from 2.37% in the prior quarter. This slight rise suggests the core business of lending and deposit-taking is improving its efficiency in the current rate environment.

The operational efficiency story, however, is mixed once you look at non-interest expenses. We use Pre-Provision Net Revenue (PPNR) as a proxy for operating profit, as it shows performance before factoring in the volatile provision for credit losses. For Q3 2025, Eagle Bancorp reported PPNR of $28.8 million. Here's the quick math for the PPNR Margin (Operating Profit Margin proxy) based on total revenue of $70.7 million for the quarter:

• Q3 2025 PPNR Margin: 40.73%
• Q3 2025 Net Interest Income: $68.2 million
• Q3 2025 Noninterest Expense: $41.9 million

The real issue is the bottom line, or net profit. The company reported a net loss of $67.5 million for the third quarter of 2025. This translates to a Net Profit Margin of approximately -95.47%, a severe decline that reflects the substantial provision for credit losses of $113.2 million taken in the quarter. Honestly, that's a brutal number.

The trend in profitability over 2025 has been a dramatic slide into negative territory. Net income dropped from a positive $1.7 million in Q1 2025 to a net loss of $69.8 million in Q2 2025, improving slightly to a net loss of $67.5 million in Q3 2025. This volatility is defintely tied to the aggressive actions taken to address asset quality challenges, specifically within the commercial real estate (CRE) loan portfolio.

When you compare these figures to the industry, the contrast is stark. The average net profit margin for regional banks was around 24.89% as of Q2 2024. Eagle Bancorp's Q3 2025 Net Profit Margin of -95.47% is clearly an outlier, illustrating the depth of the credit-related issues the bank is working through. The focus on resolving asset quality challenges is evident in the annualized quarterly net charge-offs, which jumped to 7.36% in Q3 2025 from 4.22% in Q2 2025.

The operational efficiency, excluding credit costs, shows some resilience, but the high provision cost is the single factor dominating the net income line. For a deeper look at the market's reaction to these figures, you should read Exploring Eagle Bancorp, Inc. (EGBN) Investor Profile: Who's Buying and Why?

Debt vs. Equity Structure

For a bank like Eagle Bancorp, Inc. (EGBN), the Debt-to-Equity (D/E) ratio is a crucial measure of financial leverage, telling you how the company funds its assets. The direct takeaway here is that Eagle Bancorp, Inc. maintains a remarkably conservative leverage profile, but its credit rating has been recently pressured by asset quality issues.

As of the third quarter of 2025, Eagle Bancorp, Inc.'s D/E ratio stood at approximately 0.14. Here's the quick math: this is significantly lower than the average D/E ratio for US Regional Banks, which typically hovers around 0.5. This low figure means the company relies far more on shareholder equity-its own capital-than on external debt to finance its operations and assets. This conservative approach to leverage has historically provided a substantial capital cushion, with the Common Equity Tier 1 (CET1) capital ratio at 13.58% in Q3 2025, a level that has generally tracked 200 to 300 basis points above rated peer averages.

Looking at the debt side, the company's short-term debt management in 2025 shows a clear effort to de-risk. Specifically, other short-term borrowings were reduced to zero as of September 30, 2025, a paydown achieved by using excess cash from core deposit growth and asset sales. This is defintely a positive sign for near-term liquidity.

The long-term debt structure is relatively straightforward. The company has outstanding 10.00% Senior Notes Due 2029, a debt instrument that originated from a 2024 private placement of $77.7 million. In January 2025, Eagle Bancorp, Inc. completed an exchange offer, swapping approximately $73.5 million of the original notes for registered notes, which was a technical move to improve the securities' tradability for investors, not a new debt issuance.

Still, the market's view on this debt has shifted. In August 2025, KBRA downgraded the company's credit ratings, moving the senior unsecured debt to BBB- from BBB and the subordinated debt to BB+ from BBB-. This is a material risk factor, and the Negative Outlook signals that credit quality challenges-primarily stemming from the Washington, D.C. metro office loan portfolio-are weighing heavily on the company's financial standing, despite the low D/E ratio.

• Debt-to-Equity (Q3 2025): 0.14, indicating low leverage relative to the regional bank average of 0.5.
• Short-Term Debt: Reduced to zero at September 30, 2025.
• Credit Rating: Senior Unsecured Debt is BBB- with a Negative Outlook (August 2025).

The key takeaway for you is that while the bank's low D/E ratio and strong capital ratios (like the 10.39% tangible common equity ratio) suggest a solid equity buffer against losses, the recent credit downgrade and Negative Outlook show that the quality of the assets being financed is the primary concern, not the quantity of the debt itself. To dive deeper into who is holding this equity and debt, you should check out Exploring Eagle Bancorp, Inc. (EGBN) Investor Profile: Who's Buying and Why?

Liquidity and Solvency

You're looking at Eagle Bancorp, Inc. (EGBN) and trying to gauge its immediate financial flexibility-its liquidity-especially given the current credit cycle. The direct takeaway is that while the bank's traditional liquidity ratios are low, which is typical for a bank, its core on-balance sheet liquidity and capital coverage are actually quite strong. This is a crucial distinction.

Current and Quick Ratios: A Bank's Context

For a commercial bank like Eagle Bancorp, Inc., the standard Current Ratio and Quick Ratio (acid-test ratio) are less meaningful than for a manufacturing firm. Banks intentionally hold most of their assets as loans, which are not considered current assets in the traditional sense, so these ratios will always look low. Still, for the third quarter of 2025 (Q3 2025), the reported Quick Ratio was approximately 0.1x, and the Current Ratio stood at about 0.36.

Here's the quick math: a low ratio doesn't signal an immediate crisis for a bank; it simply reflects the business model of holding long-term assets (loans) against short-term liabilities (deposits). What matters more is the available cash and borrowing capacity to cover any sudden withdrawals, which is why we look at the bank's total liquidity position.

• Quick Ratio (Q3 2025): 0.1x.
• Current Ratio (Q3 2025): 0.36.
• Total On-Balance Sheet Liquidity: $5.3 billion.

Working Capital and Credit Cleanup Trends

Instead of working capital, we analyze the bank's Pre-Provision Net Revenue (PPNR) against its credit losses. This shows the underlying operating strength before accounting for the necessary 'credit cleanup.' In Q3 2025, Eagle Bancorp, Inc. reported PPNR of $28.8 million. This figure is important because it's the engine that absorbs the credit risk. The bank is being defintely proactive, taking a substantial provision for credit losses of $113.2 million in Q3 2025, primarily tied to the office portfolio.

This aggressive provisioning is a deliberate move to de-risk the balance sheet, but it also drove the net loss for the quarter to $67.5 million. The impact is visible in the annualized quarterly net charge-offs, which jumped to 7.36%. This is a painful but necessary step to stabilize asset quality and is a key driver of the overall working capital trend-sacrificing near-term earnings to secure long-term stability.

Cash Flow Statements Overview

The cash flow picture for Eagle Bancorp, Inc. in 2025 reflects the strategic actions taken to manage its loan portfolio. While the full breakdown of cash flow from operations, investing, and financing for Q3 2025 isn't explicitly detailed in one number, the key activities tell the story:

• Operating Cash Flow: Impacted by the net loss of $67.5 million, but the core net interest income of $68.2 million remains a strong, positive cash driver.
• Investing Cash Flow: The company executed sales of assets, including a $2.0 million loss on the sale of investment securities and a $3.6 million loss on the sale of loans. These sales, while resulting in losses, generate cash and reposition the portfolio for better future performance.
• Financing Cash Flow: The decision to reduce the cash dividend to just $0.01 per share was a proactive step to conserve capital and preserve financial flexibility, not a reaction to capital inadequacy.

Liquidity Strengths and Near-Term Risks

The real strength of Eagle Bancorp, Inc.'s liquidity position lies in its capacity to meet its obligations. As of September 30, 2025, the bank had total on-balance sheet liquidity and available capacity of $5.3 billion. This is a massive buffer when compared to its uninsured deposits, which total $2.3 billion. The resulting coverage ratio is over 230%, meaning the bank has more than double the readily available funds needed to cover all its uninsured deposits. That's a very comfortable position.

The near-term risk remains the continued execution on the troubled Commercial Real Estate (CRE) portfolio. The high net charge-offs show the cleanup is underway, but any unexpected deterioration in the office market could require further large provisions, continuing to pressure earnings. For more on the bank's long-term vision, see Mission Statement, Vision, & Core Values of Eagle Bancorp, Inc. (EGBN).

Next Step: Portfolio Managers should model a stress test scenario where Q4 2025 net charge-offs remain above 5% to assess the impact on the tangible common equity ratio.

Valuation Analysis

You're looking at Eagle Bancorp, Inc. (EGBN) and asking the core question: Is this stock a bargain, or is it a value trap? The answer, honestly, is that it's a deeply distressed value play right now, trading at a significant discount to its book value but with a negative earnings picture. The market is pricing in substantial risk, which is why the stock has plummeted.

The latest closing price for Eagle Bancorp, Inc. stock is around $16.75, as of mid-November 2025. This reflects a brutal year for shareholders, with the stock price having decreased by a staggering 42.25% over the last 12 months. The 52-week range tells the story: a high of $30.94 and a low of $15.03. That kind of volatility signals a major shift in the company's risk profile.

Decoding Valuation Multiples: P/E, P/B, and EV/EBITDA

When a bank like Eagle Bancorp, Inc. is struggling with asset quality and credit loss provisions, traditional valuation metrics get messy. You have to focus on the Price-to-Book ratio (P/B) because the Price-to-Earnings (P/E) is essentially useless right now.

• Price-to-Earnings (P/E) Ratio: The P/E ratio is currently negative, hovering around -4.30, because the company has reported a trailing twelve-month loss per share of -$3.96. You can't compare a negative P/E to the market average, so we set it aside.
• Price-to-Book (P/B) Ratio: This is the key metric for a bank. Eagle Bancorp, Inc.'s P/B ratio is extremely low, sitting between 0.43 and 0.46. Here's the quick math: with a Book Value per Share of $39.03 as of June 2025, the market is valuing the company's equity at less than half its stated book value. This signals the market believes a significant portion of the assets on the balance sheet are impaired or overvalued.
• Enterprise Value-to-EBITDA (EV/EBITDA): This ratio is also negative, similar to the P/E, given the recent net losses. For instance, the December 2024 reading was -28.7x. For a bank, this metric is less critical than P/B, but the negative figure confirms the operating challenges from 2025.

The P/B ratio is the one clean one-liner here: the stock is trading at a deep discount to its tangible assets.

Dividend and Analyst Sentiment

The dividend picture is equally cautious. While Eagle Bancorp, Inc. has maintained a dividend, it's been dramatically reduced. The annualized dividend is just $0.04 per share, resulting in a current dividend yield of approximately 0.24% to 0.25%. The dividend payout ratio is negative (e.g., -97% in late 2024), which means the company is paying the dividend out of capital, not earnings-a non-sustainable position until profitability returns.

Analyst consensus reflects the uncertainty. There isn't a clear 'Buy' or 'Sell' signal, but a fragmented view:

To be fair, the median 12-month price target is around $21.00, suggesting analysts see a significant rebound potential of over 25% from current levels, but the consensus rating is often 'Hold' or 'Reduce.' This is a classic 'show me' stock; analysts are waiting for tangible signs of asset quality stabilization before moving to a strong Buy rating.

What this estimate hides is the execution risk in de-risking the loan portfolio. The opportunity is clear-buying a dollar of book value for 45 cents-but the risk is that the book value itself continues to erode. For a more detailed look at the fundamental health of the bank, you can read more at Breaking Down Eagle Bancorp, Inc. (EGBN) Financial Health: Key Insights for Investors.

Action: Monitor the Q4 2025 earnings call for any changes in the provision for credit losses and nonperforming assets; that is the defintely the most important short-term catalyst.

Risk Factors

You're looking at Eagle Bancorp, Inc. (EGBN) and seeing a bank with a strong Washington D.C. area presence, but the recent financial reports tell a clear story of significant near-term credit risk. The direct takeaway is that while the bank's capital ratios remain solid, the concentration in Commercial Real Estate (CRE), especially the office segment, is the primary internal risk driving losses, and it's a headwind you cannot ignore.

The most immediate challenge is asset quality, which is deteriorating due to the broader market conditions. For the third quarter of 2025, Eagle Bancorp, Inc. reported a net loss of $67.5 million, or $2.22 per share, primarily driven by credit costs associated with managing this risk. The total criticized and classified loans-those showing a clear weakness-jumped to approximately $958.5 million in Q3 2025, up from $875.4 million in the prior quarter. This isn't just a number; it's a map of where future losses are likely to land.

The core issue is valuation stress in the office real estate market, a sector-specific risk that is hitting regional banks hard. This external pressure is compounded by the high interest rate environment, which makes debt service coverage (the ability of a property's cash flow to cover its loan payments) much tougher for borrowers. The annualized net charge-offs for Q3 2025 hit a sharp 7.36% of average loans, totaling $140.8 million for the quarter. This is a defintely high burn rate.

Here's a quick snapshot of the key financial and operational risks and the company's response:

• Credit Risk: Office CRE valuation stress leading to high charge-offs.
• Operational Risk: Recent resignation of the Chief Credit Officer, Kevin Geoghegan, by year-end 2025, which can slow the pace of problem loan resolution during a critical period.
• Financial Risk: Revenue for Q3 2025 was $70.65 million, missing analyst forecasts and highlighting ongoing pressure on profitability.
• Market Risk: The stock's beta is high at 1.77, indicating significantly higher volatility than the overall market, which adds risk for equity investors.

To be fair, the bank is taking concrete steps to mitigate these risks. They've been executing a strategy to resolve asset quality challenges, including an independent review of their loan portfolio and supplemental internal analysis to reduce valuation risk in the office portfolio. This proactive stance led to a decrease in Nonperforming Assets (NPAs) to $133.3 million, or 1.23% of total assets, in Q3 2025, which is an improvement from the prior quarter's 2.16%. They also cut the common stock dividend to just $0.01 per share to preserve capital flexibility, a tough but necessary move.

The capital position remains a relative strength, which gives them a buffer to work through these issues. Their Common Equity Tier 1 (CET1) capital ratio stood at a healthy 13.58% as of September 30, 2025. This is the ultimate safety net. However, the ongoing challenges are clear, and you need to monitor the pace of non-performing loan inflows and the effectiveness of their office portfolio de-risking strategy. For a deeper dive into the bank's overall performance, you can read the full post here: Breaking Down Eagle Bancorp, Inc. (EGBN) Financial Health: Key Insights for Investors.

Growth Opportunities

You're looking at Eagle Bancorp, Inc. (EGBN) and seeing some deep credit issues, but you need to know if the underlying business can still grow. The short answer is yes, but it's a focused, deliberate growth, not a broad-based expansion. The core strategy is a pivot: aggressively cleaning up the balance sheet while pushing hard into higher-quality, relationship-driven commercial lending to build a more sustainable earnings base.

The biggest driver right now is the strategic shift toward Commercial and Industrial (C&I) lending, moving away from the stressed commercial real estate (CRE) office sector. In the second quarter of 2025, over two-thirds of their total loan originations were C&I loans. This is how they're diversifying the loan portfolio and reducing concentration risk. Plus, they're working hard to improve their funding mix, which is already showing results in a better Net Interest Margin (NIM).

Future Revenue and Earnings Outlook

Honestly, the near-term earnings picture is messy because of the credit cleanup. The company took significant provisions for credit losses (allowance for credit losses rose to $183 million in Q2 2025), primarily tied to the valuation risk in their office loan portfolio. This proactive, painful move is necessary to clear the deck for future profitability.

Despite the recent losses-a net loss of $67.5 million, or $2.22 per share, in Q3 2025-analysts still project a full-year 2025 revenue around $292.78 million. The real story is the underlying improvement in core operations, which you see in the Pre-Provision Net Revenue (PPNR). Adjusting for loan sale losses, PPNR was $32.3 million in Q3 2025, a sequential increase. That's the core operating engine getting stronger.

Strategic Initiatives and Competitive Edge

The strategic initiatives are all about shoring up the foundation and expanding the most profitable lines. They're not looking for a big acquisition; they're focusing on execution in their home market. They're defintely a trend-aware realist, seeing the long-term structural changes in the office sector and acting decisively.

The company's competitive advantage is simple but powerful: they are one of the largest community banks in the Washington D.C. metro area. This local market knowledge and deep relationship network is what fuels their C&I growth and helps them attract core deposits. They've reduced higher-cost broker deposits by $534 million year-to-date in Q3 2025, which is a huge win for margin improvement.

Here are the key strategic moves driving future growth:

• C&I Lending Expansion: Shifting the loan mix to less cyclical, relationship-based commercial and industrial credits.
• Funding Optimization: Increasing core deposits by $304.1 million in Q2 2025 to lower the overall cost of funds.
• Credit De-risking: Accelerating the resolution of problem loans to remove the drag on earnings and free up capital.
• Strong Capital Base: Maintaining a Common Equity Tier 1 (CET1) ratio of 13.58% and a Tangible Common Equity (TCE) to tangible assets of 10.39% in Q3 2025. This strong capital gives them the flexibility to absorb losses and still grow.

You can see a deeper dive into the ownership structure and market sentiment in Exploring Eagle Bancorp, Inc. (EGBN) Investor Profile: Who's Buying and Why?

What this estimate hides is the speed of the CRE recovery, which is the big risk. But the clear action is their pivot to C&I and deposit de-risking. They are building a better bank, even if the current numbers are ugly.