Eagle Bancorp (EGBN) Tops Q1 EPS by 18c, Revenues Beat

Eagle Bancorp (NASDAQ: EGBN) reported Q1 EPS of $1.36, $0.18 better than the analyst estimate of $1.18. Revenue for the quarter came in at $93.2 million versus the consensus estimate of $82.51 million.

• Net income per basic and diluted common share for the first quarter of 2021 was $1.36 compared to $0.70 for the first quarter of 2020, a 94% increase.

The increase in earnings is largely due to the first quarter of 2021 including a reversal of the provision for credit losses and significant gain on sale of residential mortgages, whereas the first quarter of 2020 included provisions for credit losses at the beginning of the COVID-19 pandemic, as well as, mark-to-market losses related to a hedge position on mortgage operations.

First Quarter 2021 Highlights

Income Statement

• Net income of $43.5 million
• Total revenue of $93.2 million (up 9.4% from a year ago)
• Reversal of allowance for credit losses of $2.4 million
• Net interest margin of 2.98%
• Return on average assets ("ROAA") of 1.53%
• Return on average common equity ("ROACE") of 14.05%
• Return on average tangible common equity ("ROATCE") of 15.33%1
• Efficiency ratio of 40.7%

Susan G. Riel, President and Chief Executive Officer of Eagle Bancorp, Inc. commented, "We ended the first quarter of 2021 with record net income, continued strengthening in asset quality and a high level of capital. Earnings included a reversal to the allowance for credit losses as our outlook on the economy has improved, and another large gain on sale of residential mortgages from our residential mortgage division, which continues to generate strong results. For the quarter, we generated net income of $43.5 million with an ROAA of 1.53%, ROACE of 14.05% and a ROATCE2 of 15.33%."

"These earnings continue to demonstrate balanced financial performance including our ability to manage an efficient bank and we remain a leader among our peers with an efficiency ratio for the quarter of 40.7%. As an example of our expense management, during the quarter we relocated two branches with expiring leases to better locations nearby and consolidated two back-office locations, also with expiring leases, into a single new location, saving about $460,000 annually in rental expenses."

"While loan demand remains challenged during the pandemic, our earnings continue to generate capital that we expect will enable us to hit the ground running when economic activity and business openings expand. We believe the Washington, D.C. area is one of the most resilient and strongest economies in the nation and we remain optimistic about the reopening of businesses, and the positive impact the government stimulus will have on the regional economy. At quarter end, our shareholders equity reached $1.26 billion and our total risk-based capital was 17.86%. This gives us the ability to originate loans for large commercial projects, as well as a lot of runway to grow the loan portfolio when economic conditions improve and more opportunities arise."

"For our shareholders, at the end of the quarter our board increased the dividend to $0.25 per share, our first increase since the dividend was re-instituted in the second quarter of 2019. We also authorized a new stock repurchase plan in December 2020."

"We once again thank all of our employees for their commitment and diligence in serving the needs of our clients and communities and following safe health practices. As we look toward summer with optimism, we remain focused on strong and balanced operating performance. We will continue to proactively manage any asset quality concerns while delivering best-in-class service to our customers. We will continue to exercise prudent oversight of expenses, while retaining an infrastructure that is competitive, supports our growth initiatives, and proactively enhances our risk management systems as we position ourselves for future growth.”

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

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