Eagle Bancorp (EGBN) Tops Q2 EPS by 16c, Revenues Beat

Eagle Bancorp (NASDAQ: EGBN) reported Q2 EPS of $0.90, $0.16 better than the analyst estimate of $0.74. Revenue for the quarter came in at $93.9 million versus the consensus estimate of $81.38 million.

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

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

For earnings history and earnings-related data on Eagle Bancorp (EGBN) click here.

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