EAGLE BANCORP INC (EGBN)

CIK: 0001050441. SIC: 6022 State Commercial Banks. Latest 10-K as of: 2026-03-09.

SIC breadcrumb: Finance, Insurance, And Real Estate > Depository Institutions > SIC 6022 State Commercial Banks

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1050441. Latest filing source: 0001050441-26-000021.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-09. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001050441.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001050441.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001050441-26-000066.

Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high. Filing date: 2026-05-07. Report date: 2026-03-31.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ("MD&A")

The following discussion provides information about the results of operations, financial condition, liquidity, asset quality, and capital resources of Eagle Bancorp, Inc. and its subsidiaries (collectively, the "Company") as of and for the periods indicated. The Company’s primary subsidiary is EagleBank (the "Bank"), and the Company’s other direct and indirect active subsidiaries are Bethesda Leasing, LLC, Eagle Insurance Services, LLC and Landroval Municipal Finance, Inc.

This discussion and analysis should be read in conjunction with the unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this report and the MD&A in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Form 10-K").

Caution About Forward-Looking Statements. This report contains forward-looking statements within the meaning of the Securities Exchange Act of 1934 (the "Exchange Act"), as amended. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning future events, business plans, objectives, our expected financial condition and asset quality, expected operating results and the assumptions upon which those statements are based. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements and are typically identified with words such as "may," "will," "can," "anticipates," "believes," "expects," "plans," "strategies," "outlook," "estimates," "potential," "assume," "probable," "possible," "continue," "should," "could," "would," "strive," "seeks," "deem," "projections," "forecast," "consider," "indicative," "uncertainty," "likely," "unlikely," "likelihood," "unknown," "attributable," "depends," "intends," "generally," "feel," "typically," "judgment," "subjective" and similar words or phrases.

For details on factors that could affect these expectations, see the risk factors and other cautionary language included in the Company's 2025 Form 10-K, and in other periodic and current reports filed by the Company with the Securities and Exchange Commission (the "SEC"). These forward-looking statements are based largely on our expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements. The Company's past results are not necessarily indicative of future performance, and nothing contained herein is meant to or should be considered and treated as earnings guidance of future performance projections. All information is as of the date of this report. Any forward-looking statements made by or on behalf of the Company speak only as to the date they are made. Except to the extent required by applicable law or regulation, the Company undertakes no obligation to revise or update publicly any forward-looking statement for any reason.

General

The Company is a growth-oriented, one-bank holding company headquartered in Bethesda, Maryland. The Company provides general commercial and consumer banking services through the Bank, its wholly owned banking subsidiary, a Maryland chartered bank which is a member of the Federal Reserve System (the "Federal Reserve Board", "Federal Reserve" or "FRB").

The Company was organized in October 1997 to be the holding company for the Bank. The Bank was organized in 1998 as an independent, community-oriented, full service banking alternative to the super regional financial institutions that dominate the Company’s primary market area. The Company’s philosophy is to provide superior, personalized service to its customers. The Company focuses on relationship banking, providing each customer with a number of services and becoming familiar with and addressing customer needs in a proactive, personalized fashion. The Bank currently has twelve branch offices (six in Suburban Maryland, three in Washington, D.C. and three in Northern Virginia), a principal corporate office, four lending centers and one operations center.

The Bank offers a broad range of commercial banking services to its business and professional clients, as well as full-service consumer banking services to individuals living and/or working primarily in the Bank's market area. The Bank emphasizes providing commercial banking services to sole proprietors, small and medium-sized businesses, non-profit organizations and associations, and investors living and working in and near the primary service area. These services include the usual deposit functions of commercial banks, including business and personal checking accounts, Negotiable Order of Withdrawal ("NOW") accounts, money market and savings accounts, business, construction, and commercial loans, consumer loans, and cash management services. The Bank is also active in

Eagle Bancorp, Inc First Quarter 2026 Form 10-Q                                  

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Table of Contents

Management's Discussion and Analysis | General

the origination of Small Business Administration ("SBA") loans. The Bank generally sells the guaranteed portion of the SBA loans in a transaction apart from the loan origination generating noninterest income from the gains on sale, as well as servicing income on the portion participated.

Bethesda Leasing, LLC, a subsidiary of the Bank, holds title to and manages other real estate owned ("OREO") assets. 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.

Critical Accounting Policies and Estimates

The Company's Consolidated Financial Statements are prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") and follow general practices within the banking industry. Application of these principles requires management to make estimates, assumptions, and judgments that affect the amounts reported in the financial statements and accompanying notes. These estimates, assumptions and judgments are based on information available as of the date of the Consolidated Financial Statements; accordingly, as this information changes, the Consolidated Financial Statements could reflect different estimates, assumptions, and judgments. Certain policies have a greater reliance on the use of estimates, assumptions and judgments and, as such, have a greater possibility of producing results that could be materially different than originally reported. Estimates, assumptions, and judgments are necessary when assets and liabilities are required to be recorded at fair value, when a decline in the value of an asset not carried on the financial statements at fair value warrants an impairment write-down or a valuation reserve to be established, or when an asset or liability needs to be recorded contingent upon a future event. Carrying assets and liabilities at fair value inherently results in more financial statement volatility. 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 2025 Form 10-K and "Note 1 – Summary of Significant Accounting Policies" to the Consolidated Financial Statements included in this report. There have been no significant changes to the Company's accounting policies as disclosed in the Company's 2025 Form 10-K.

Allowance for Credit Losses and Provision for Unfunded Commitments

A consequence of lending activities is that we incur credit losses, so we record an allowance for credit losses (the "ACL") with respect to loan receivables and a reserve for unfunded commitments (the "RUC") as estimates of those losses. The amount of the ACL on loans is based on management's assessment of current expected credit losses ("CECL") in the portfolio.

The amount of such losses will vary depending upon the risk characteristics of the loan portfolio as affected by economic conditions such as changes in interest rates, the financial performance of borrowers and regional unemployment rates, which management estimates by using a national forecast and estimating a regional adjustment based on historical differences between the two.

Management has significant discretion in making the judgments inherent in the determination of the provisions for credit loss, the ACL and the RUC. Our determination of these amounts requires significant reliance on estimates and significant judgment as to the amount and timing of expected future cash flows on loans, significant reliance on historical loss rates on homogenous portfolios, consideration of our quantitative and qualitative evaluation of economic factors and the reliance on our reasonable and supportable forecasts.

We estimate the ACL on loans using a quantitative model that uses a probability of default ("PD") / Loss Given Default ("LGD") cash flow method with an exposure at default ("EAD") model to estimate expected credit losses for our loan segments. The modeling of expected prepayment speeds is based on historical internal data and adjustments to account for loan-specific risk characteristics after pooling our loan portfolio based on similar risk characteristics.

Eagle Bancorp, Inc First Quarter 2026 Form 10-Q                                  

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Management's Discussion and Analysis | Critical Accounting Policies and Estimates

The Company uses regression analysis of historical internal and peer data provided by a third-party service provider (as Company loss data alone is insufficient) to determine suitable loss drivers to utilize when modeling lifetime PD and LGD. This analysis also determines how expected PD will react to forecasted levels of the loss drivers. During 2024, management enhanced the cash flow model to incorporate additional macroeconomic variables. The four economic variables selected, national unemployment (original variable used), Commercial Real Estate ("CRE") Price Index, House Price Index and Gross Domestic Product ("GDP"), 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.

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

The RUC represents the expected credit losses on off-balance sheet commitments such as unfunded commitments to extend credit and standby letters of credit. The RUC is determined by estimating future draws and applying the expected loss rates on those draws.

The ACL also includes an amount for inherent risks not reflected in the historical analyses. Relevant factors reflected in the qualitative component of the reserve 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 i

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-03-09. Report date: 2025-12-31.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ("MD&A")

The following discussion provides information about the results of operations, financial condition, liquidity, asset quality, and capital resources of the Company as of and for the periods indicated. The Company’s primary subsidiary is the Bank, and the Company’s other direct and indirect active subsidiaries are Bethesda Leasing, LLC, Eagle Insurance Services, LLC and Landroval Municipal Finance, Inc.

This discussion and analysis should be read in conjunction with the audited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this report.

We have omitted discussion of the earliest of the three years covered by our consolidated financial statements presented in this report as that disclosure is included in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission ("SEC") on February 27, 2025. You can reference the discussion and analysis of our results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2024 in "Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations" within that report.

Caution About Forward Looking Statements. This report contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. These forward looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements and are typically identified with words such as "may," "will," "can," "anticipates," "believes," "expects," "plans," "outlook," "estimates," "potential," "assume," "probable," "possible," "continue," "should," "could," "would," "strive," "seeks," "deem," "projections," "forecast," "consider," "indicative," "uncertainty," "likely," "unlikely," "likelihood," "unknown," "attributable," "depends," "intends," "generally," "feel," "typically," "judgment," "subjective" and similar words or phrases. These forward looking statements are based largely on our expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward looking statements.

The following factors, among others, could cause our financial performance to differ materially from that expressed in such forward looking statements:

•Changes in the general economic, political, social and health conditions, including the macroeconomic and other challenges and uncertainties resulting from the effects of pandemics and natural disasters;

•The timely development of competitive new products and services and the acceptance of these products and services by new and existing customers;

•The willingness of customers to substitute competitors’ products and services for our products and services;

•Our management of liquidity risks in our operations, including, but not limited to, risks related to customer deposits, deposits in excess of the Federal Deposit Insurance Corporation ("FDIC") insurance coverage limits, access to capital markets and securities and market values;

•The effect of acquisitions we may make, including, without limitation, the failure to achieve the expected revenue growth and/or expense savings from such acquisitions;

•Our management of risks inherent in our real estate loan portfolio, and the risk of a prolonged downturn in the real estate market, which could impair the value of, and our ability to sell, properties which stand as collateral for loans we make;

•The growth and profitability of noninterest or fee income being less than expected;

•Changes in the level of our nonperforming assets and charge-offs;

•Changes in consumer spending and savings habits;

•The impact of climate change or government action and societal responses to climate change;

•Difficulty recruiting or retaining successful bankers, executive officers or other key personnel;

•Changing bank regulatory conditions, policies or programs, whether arising as new legislation or regulatory initiatives, that could lead to restrictions on activities of banks generally, or our subsidiary bank in particular,

Eagle Bancorp, Inc 2025 Form 10-K                                 

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Management's Discussion and Analysis

more restrictive regulatory capital requirements, increased costs, including deposit insurance premiums, regulation or prohibition of certain income producing activities or changes in the secondary market for loans and other products;

•The impact of changes in financial services policies, laws and regulations, including laws, regulations and policies concerning taxes, banking, securities and insurance and the application thereof by regulatory bodies;

•The effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System ("Federal Reserve Board," "Federal Reserve" or "FRB"), inflation, interest rate, market and monetary fluctuations;

•Results of examinations of us by our regulators, including the possibility that our regulators may, among other things, require us to increase our allowance for credit losses, to write-down assets, to hold more capital or to incur costs to remediate supervisory findings;

•The effects or impact of any litigation, governmental investigations and proceedings, including enforcement proceedings and any possibly resulting fines, judgments, expenses or restrictions on our business activities;

•Unanticipated regulatory or judicial proceedings;

•The effect of changes in accounting policies and practices, as may be adopted from time-to-time by bank regulatory agencies, the SEC, the Public Company Accounting Oversight Board ("PCAOB") or the Financial Accounting Standards Board ("FASB");

•Cybersecurity breaches, threats, and cyber-fraud that cause the Bank to sustain financial losses;

•Technological and social media changes;

•Our management of risks inherent in the use of statistical and quantitative data and modeling;

•The strength of the United States economy, in general, and the strength of the local economies in which we conduct operations;

•Changes in trade, immigration, fiscal and monetary policies;

•Political uncertainty in the United States, changes in government spending and workforce and their effects on the economy of the Washington, D.C. metropolitan area;

•Geopolitical conditions, including acts or threats of terrorism, actions taken by the United States or other governments in response to acts or threats of terrorism and/or military conflicts, which could impact business and economic conditions in the United States and abroad; and

•The factors discussed under the caption "Risk Factors" in this report.

If one or more of the factors affecting our forward looking information and statements proves incorrect, then our actual results, performance or achievements could differ materially from those expressed in, or implied by, forward looking information and statements contained in this report. No undue reliance should be placed on our forward looking information and statements. We will not update the forward looking statements to reflect actual results or changes in the factors affecting the forward looking statements.

General

The Company provides general commercial and consumer banking services through the Bank, its wholly owned banking subsidiary, a Maryland chartered bank which is a member of the Federal Reserve. The Company was organized in October 1997 and to be the holding company for the Bank. The Bank was organized in 1998 as an independent, community oriented, full service banking alternative to the super regional financial institutions, which dominate the Company’s primary market area.

The Company’s philosophy is to provide superior, personalized service to its customers. The Company focuses on relationship banking, providing each customer with a number of services and becoming familiar with and addressing customer needs in a proactive, personalized fashion. The Bank currently has twelve branch offices (six in Suburban Maryland, three in Washington, D.C. and three in Northern Virginia), a principal corporate office, four lending centers (two are co-located with branches and one co-located in the principal corporate office) and one operations center. Refer to the "Business" section above, which describes in detail the various banking services offered.

General economic, political, social and health conditions affect financial markets, and therefore, our business. Although the economy experienced higher levels of inflation in the recent past, the inflationary pressure continued to subside during 2025 and the Federal Reserve decreased interest rates three times for a total of 75 basis points. Fiscal and monetary policies have a direct and indirect impact on the level and volatility of interest rates, liquidity of financial markets, the availability and cost of capital, and market conditions of financing. Actual real U.S. GDP

Eagle Bancorp, Inc 2025 Form 10-K                                 

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Management's Discussion and Analysis | General

growth for 2025 was 2.2%, compared to 2.8% growth in 2024, as the economy continues to grow despite continuing to experience the effects of inflationary pressures and higher interest rates which were raised in 2022 and 2023. Unemployment increased through 2025 as the U.S. unemployment rate ended the year at 4.4%, up from 4.1% at the end of 2024.

Longer-term U.S. interest rates slightly increased in 2025, with the ten year U.S. Treasury rate averaging 4.29% in 2025 as compared to 4.21% in 2024. The yield curve steepened in 2025 as short-term rates decreased due to Federal Reserve rate cuts while long-term rates increased compared to 2024.

We believe the Company’s primary market, the Washington, D.C. metropolitan area, continues to exhibit resilience relative to other parts of the country despite the volatility in the current economic environment. The Washington, D.C. metropolitan area maintains a diverse economy which includes the public sector, a large healthcare component, substantial business services and a highly educated work force. The private sector, in particular, the Leisure and Hospitality sector has seen some recovery in recent years following the adverse effects of the pandemic. The multi-family commercial real estate leasing sector, notwithstanding increased supply of units in the Bank’s market area, has held up relatively well, particularly for well-located close-in projects. While commercial real estate ("CRE") office properties continue to experience challenges and we recognized losses in that sector in 2025, the Company has remained focused on monitoring this sector and working with borrowers in order to mitigate further credit losses within our loan portfolio. Overall, we believe commercial real estate values have generally decreased and we continue to be cautious of the cap rates at which such assets are trading, resulting in conservative valuations.

As of December 31, 2025, the Company had total assets of approximately $10.5 billion, total loans held for investment of $7.3 billion and total deposits of $9.1 billion. We have remained cognizant of the volatility in our industry, capital markets and interest rate markets. Loan balances decreased in the CRE segments in 2025 while we saw increases in our commercial and owner-occupied commercial real estate loans portfolio. Additionally, we experienced changes in our funding mix as increases in interest-bearing deposits offset a decrease in noninterest-bearing deposits. The yield on earning assets decreased in 2025. During the year ended December 31, 2025, the yield on earning assets decreased by 34 basis points (from 5.65% to 5.31%) while cost of funds decreased 42 basis points (from 3.59% to 3.17%).

The Company’s capital position remained strong in 2025 as a result of its strong retained earnings position, despite the impact of the increased loan provision and resulting 2025 net loss. The Company paid a quarterly dividend in each quarter of 2025; however, the quarterly cash dividend amount was reduced to $0.01 in the fourth quarter of 2025 to preserve capital as the Company addresses asset quality matters.

The Company believes its strategy of remaining growth-oriented, retaining talented staff and maintaining focus on seeking quality lending and deposit relationships will inure to the benefit of the organization's success. Additionally, the Company believes this strategy of relationship building has fostered future growth opportunities, as the Company’s reputation in the marketplace remains strong.

Critical Accounting Policies and Estimates

The Company's Consolidated Financial Statements are prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") and follow general practices within the banking industry. Application of these principles requires management to make estimates, assumptions, and judgments that affect the amounts reported in the financial statements and accompanying notes. These estimates, assumptions and judgments are based on information available as of the date of the Consolidated Financial Statements; accordingly, as this information changes, the Consolidated Financial Statements could reflect different estimates, assumptions, and judgments. Certain policies have a greater reliance on the use of estimates, assumptions and judgments and, as such, have a greater possibility of producing results that could be materially different than originally reported. Estimates, assumptions, and judgments are necessary when assets and liabilities are required to be recorded at fair value, when a decline in the value of an asset not carried on the financial statements at fair value warrants an impairment write-down or a valuation reserve to be established, or when an asset or liability needs to be recorded contingent upon a future event. Carrying assets and liabilities at fair value inherently results in more financial statement volatility.

Eagle Bancorp, Inc 2025 Form 10-K                                 

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Management's Discussion and Analysis | Critical Accounting Policies and Estimates

Allowance for Credit Losses and Provision for Unfunded Commitments

A consequence of lending activities is that we incur credit losses, so we record an allowance for credit losses (the "ACL") with respect to loan receivables and a reserve for unfunded commitments (the "RUC") as estimates of those losses. The amount of the ACL on loans is based on management's assessment of current expected credit losses ("CECL") in the portfolio.

The amount of such losses will vary depending upon the risk characteristics of the loan portfolio as affected by economic conditions such as changes in interest rates, the financial performance of borrowers and regional unemployment rates, which management estimates by using a national forecast and estimating a regional adjustment based on historical differences between the two.

Management has significant discretion in making the judgments inherent in the determination of the provisions for credit loss, the ACL and the RUC. Our determination of these amounts requires significant reliance on estimates and significant judgment as to the amount and timing of expected future cash flows on loans, significant reliance on historical loss rates on homogenous portfolios, consideration of our quantitative and qualitative evaluation of economic factors and the reliance on our reasonable and supportable forecasts.

We estimate the ACL on loans using a quantitative model that uses a probability of default ("PD") / Loss Given Default ("LGD") cash flow method with an exposure at default ("EAD") model to estimate expected credit losses for our loan segments. The modeling of expected prepayment speeds is based on historical internal data and adjustments to account for loan-specific risk characteristics after pooling our loan portfolio based on similar risk characteristics.

The Company uses regression analysis of historical internal and peer data provided by a third-party service provider (as Company loss data alone is insufficient) to determine suitable loss drivers to utilize when modeling lifetime PD and LGD. This analysis also determines how expected PD will react to forecasted levels of the loss drivers. During 2024, management enhanced the cash flow model to incorporate additional macroeconomic variables. The four economic variables selected, national unemployment (original variable used), Commercial Real Estate ("CRE") Price Index, House Price Index and Gross Domestic Product ("GDP"), 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.

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

The RUC represents the expected credit losses on off-balance sheet commitments such as unfunded commitments to extend credit and standby letters of credit. The RUC is determined by estimating future draws and applying the expected loss rates on those draws.

The ACL also includes an amount for inherent risks not reflected in the historical analyses. Relevant factors reflected in the qualitative component of the reserve 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.

Management has developed an analytical process to monitor the adequacy of the ACL. Our methodology for determining our ACL was developed utilizing, among other factors, the guidance from federal banking regulatory agencies and relevant available information from internal and external sources and relating to past events, current conditions and reasonable and supportable forecasts. The process is being continually enhanced and refined based on periodic reviews. Material changes to these and other relevant factors may result in greater volatility to the reserve for credit losses, and therefore, greater volatility to our reported earnings. See "Note 1 – Summary of Significant Accounting Policies", "Note 3 – Investment Securities" and "Note 4 – Loans and Allowance for Credit Losses" to the Consolidated Financial Statements, and the “Provision for Credit Losses” and "Allowance for Credit Losses" sections below for more information on the provision for credit losses and ACL for the loan portfolio.

Eagle Bancorp, Inc 2025 Form 10-K                                 

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Management's Discussion and Analysis | Selected Financial Data

Selected Financial Data

The following discussion is intended to assist in understanding the financial condition and results of operations of the Company as of and for the year ended December 31, 2025. The information contained in this section should be read together with the December 31, 2025 audited Consolidated Financial Statements and the accompanying Notes included in "Item 8. Financial Statements and Supplementary Data" of this Form 10-K.

This section of this Form 10-K generally discusses 2025 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company’s Form 10-K for the fiscal year ended December 31, 2024.

As of December 31,

(dollars in thousands)

2025

2024

Consolidated Balance Sheets:

Securities - available-for-sale

$

976,770 

$

1,267,404 

Securities - held-to-maturity

854,780 

938,647 

Loans held for sale

90,650 

— 

Loans held for investment

7,280,459 

7,934,888 

Allowance for credit losses

(159,604)

(114,390)

Total assets

10,497,203 

11,129,508 

Deposits

9,133,606 

9,131,078 

Other short-term borrowings

— 

490,000 

Long-term borrowings

76,428 

76,108 

Total liabilities

9,365,920 

9,903,447

Total shareholders’ equity

1,131,283 

1,226,061

For the Year Ended December 31,

(dollars in thousands except per share data)

2025

2024

2023

Consolidated Statements of Operations:

Interest income

$

604,482 

$

687,563 

$

625,327 

Interest expense

334,595 

398,875 

334,781 

Provision for credit losses

293,097 

66,360 

31,536 

Noninterest income

29,308 

19,939 

21,536 

Goodwill impairment

— 

104,168 

— 

Noninterest expense (including goodwill impairment)

200,655 

274,634 

153,293 

Income (loss) before income tax expense

(196,184)

(30,240)

127,520 

Income tax expense 

(58,132)

16,795 

26,986 

Net income (loss) 

(138,052)

(47,035)

100,534 

Cash dividends declared

15,314 

32,117 

54,293 

Total net revenue (1)

299,195 

308,627

312,082

Per Common Share Data:

Net income (loss), basic

$

(4.55)

$

(1.56)

$

3.31

Net income (loss), diluted

(4.55)

(1.56)

3.31

Dividends declared

0.505 

1.07

1.80

Book value

37.26 

40.60

42.58

Common shares outstanding

30,359,632 

30,202,003

29,925,612

Weighted average common shares outstanding, basic

30,347,121 

30,157,051

30,345,504

Weighted average common shares outstanding, diluted

30,347,121 

30,157,051

30,393,100

Eagle Bancorp, Inc 2025 Form 10-K                                 

41

Table of Contents

Management's Discussion and Analysis | Selected Financial Data

For the Year Ended December 31,

2025

2024

2023

Ratios:

Net interest margin

2.37 

%

2.37 

%

2.53 

%

Efficiency ratio (2)

67.06 

%

88.99 

%

49.12 

%

Return on average assets 

(1.16)

%

(0.38)

%

0.84 

%

Return on average common equity 

(11.47)

%

(3.77)

%

8.11 

%

CET1 capital (to risk weighted assets)

13.07 

%

14.63 

%

13.90 

%

Total capital (to risk weighted assets)

14.33 

%

15.86 

%

14.79 

%

Tier 1 capital (to risk weighted assets)

13.07 

%

14.63 

%

13.90 

%

Tier 1 capital (to average assets)

9.72 

%

10.74 

%

10.73 

%

Dividend payout ratio

(11.09)

%

(68.28)

%

54.00 

%

As of December 31,

(dollars in thousands)

2025

2024

Asset Quality:

Nonperforming assets and loans 90+ past due(3)

$

108,956 

$

211,449

Nonperforming assets and loans 90+ past due to total assets

1.04 

%

1.90 

%

Nonperforming loans to total loans

1.47 

%

2.63 

%

Allowance for credit losses to loans

2.19 

%

1.44 

%

Allowance for credit losses to nonperforming loans

149.31 

%

54.81 

%

For the Year Ended December 31,

(dollars in thousands)

2025

2024

2023

Asset Quality Activity:

Net charge-offs

$

248,178 

$

38,555 

$

18,850 

Net charge-offs to average loans

3.22 

%

0.48 

%

0.24 

%

(1)Total net revenue calculated as net interest income plus noninterest income.

(2)Computed by dividing noninterest expense by total net revenue.

(3)Excludes HFS loans.

Use of Non-GAAP Financial Measures

Management uses non-GAAP measures because they provide information to investors about the underlying operational performance and trends of the Company. These disclosures should not be considered in isolation or as a substitute for results determined in accordance with GAAP and are not necessarily comparable to non-GAAP performance measures which may be presented by other bank holding companies. Management compensates for these limitations by providing detailed reconciliations between GAAP information and the non-GAAP financial measures.

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

For the Year Ended December 31,

(dollars in thousands except per share data)

2025

2024

2023

Pre-provision net revenue:

Net interest income

$

269,887 

$

288,688 

$

290,546 

Noninterest income

29,308 

19,939 

21,536 

Total net revenue

299,195 

308,627 

312,082 

Less: Noninterest expense

(200,655)

(274,634)

(153,293)

Pre-provision net revenue

$

98,540 

$

33,993 

$

158,789 

Eagle Bancorp, Inc 2025 Form 10-K                                 

42

Table of Contents

Management's Discussion and Analysis | Results of Operations

Results of Operations

Summary of Consolidated Statements of Operations

This section discusses our condensed consolidated results of operations and should be read together with our consolidated financial statements and the accompanying notes.

For the Year Ended December 31,

(dollars in thousands)

2025

2024

Change

Net Interest Income

$

269,887 

$

288,688 

$

(18,801)

Less: Provision for (Reversal of) Credit Losses

293,097 

66,360 

226,737 

Less: Provision for (Reversal of) Credit Losses for Unfunded Commitments

1,627 

(2,127)

3,754 

Net Interest Income After Provision for (Reversal of) Credit Losses

(24,837)

224,455 

(249,292)

Noninterest income

29,308 

19,939 

9,369 

Noninterest expense

200,655 

274,634 

(73,979)

Income (Loss) Before Income Tax Expense

(196,184)

(30,240)

(165,944)

Income Tax Expense (Benefit)

(58,132)

16,795 

(74,927)

Net Income (Loss)

$

(138,052)

$

(47,035)

$

(91,017)

Net loss for the year ended December 31, 2025, compared to the same period in 2024, was primarily due to higher provision for credit losses, partially offset by the corresponding income tax benefit and lower noninterest expense. See respective subsections below for the primary drivers of change and further discussion on net interest income, provision for credit losses, noninterest income, noninterest expenses, and income tax expenses.

When the impact of the provision is excluded, pre-provision net revenue ("PPNR"), a non-GAAP measure, was $98.5 million for the year ended December 31, 2025, as compared to $34.0 million for the same period in 2024. The increase was primarily due to lower noninterest expenses in the current period driven by the recognition of one-time goodwill impairment of $104.2 million during 2024 which resulted in higher noninterest expense in the prior period. For further discussion of drivers for this change, see the "Noninterest Expense" section below.

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

The efficiency ratio, which measures the ratio of noninterest expense to total net revenue (the sum of net interest income and noninterest income), was 67.06% for 2025 compared to 88.99% for 2024. This improvement was primarily due to lower noninterest expenses in the current period driven by the recognition of one-time goodwill impairment of $104.2 million during 2024 which resulted in higher noninterest expense in the prior period.

Net interest margin, which measures net interest income as a percentage of earning assets, was flat at 2.37% for the year ended December 31, 2025 compared to 2.37% for the same period in 2024. For further information on the components and drivers of these changes, see the "Net Interest Income and Net Interest Margin" section below.

Loans, which generally have higher yields than securities and other earning assets, represented 68% and 66% of average earning assets for years ended December 31, 2025 and 2024, respectively. Refer to the "Loan Portfolio" below for further discussion on loans.

Average investment securities for year ended December 31, 2025 were 18.3% of average earning assets compared to 20.2% for the same period in 2024. Interest-bearing deposits with other banks represented 14.0% and 14.1% of average earning assets for years ended December 31, 2025 and 2024, respectively. Refer to the "Investment Securities and Short-Term Investments" section below for further discussion on investment securities.

The ratio of common equity to total assets decreased to 10.78% as of December 31, 2025, compared to 11.02% as of December 31, 2024. For December 31, 2025, the return (loss) on average assets ("ROAA") was (1.16)%, compared to (0.38)% for the same period in 2024. Total shareholders’ equity was $1.13 billion as of December 31, 2025, compared to $1.23 billion as of December 31, 2024, a decrease of 8%. The return (loss) on average common equity for December 31, 2025 was (11.47)%, compared to (3.77)% for the same period in 2024. All these decreases were primarily driven by higher credit losses in 2025.

Eagle Bancorp, Inc 2025 Form 10-K                                 

43

Table of Contents

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

Net Interest Income and Net Interest Margin

Net interest income is the difference between interest income on earning assets and the cost of funds supporting those assets. Earning assets are composed primarily of loans, investment securities and interest-bearing deposits with other banks and other short term investments. The cost of funds represents interest expense on deposits, customer repurchase agreements and other borrowings, which consist primarily of federal funds purchased, advances from secured financing arrangements, including the Federal Home Loan Bank of Atlanta ("FHLB") and Discount Window, and senior notes. Noninterest-bearing deposits and capital are other components representing funding sources. Changes in the volume and mix of assets and funding sources, along with the changes in yields earned and rates paid, determine changes in net interest income.

The table below presents the average balances and rates of the major categories of the Company's assets and liabilities. Included in the tables are measurements of interest rate spread and margin. Interest rate spread is the difference (expressed as a percentage) between the interest rate earned on earning assets less the interest rate paid on interest-bearing liabilities. While the interest rate spread provides a quick comparison of earnings rates versus cost of funds, management believes that margin, together with net interest income, provides a better measurement of performance. The net interest margin (as compared to net interest spread) includes the effect of noninterest-bearing sources in its calculation. Net interest margin is net interest income expressed as a percentage of average earning assets.

Eagle Bancorp, Inc 2025 Form 10-K                                 

44

Table of Contents

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

Eagle Bancorp, Inc.

Consolidated Average Balances, Interest Yields And Rates (Unaudited)

For the Year Ended December 31,

2025

2024

2023

(dollars in thousands)

Average

Balance

Interest

Average

Yield /

Rate

Average

Balance

Interest

Average

Yield /

Rate

Average

Balance

Interest

Average

Yield /

Rate

Assets

Interest earning assets:

Interest-bearing deposits with other banks and other short-term investments

$

1,555,653 

$

66,356 

4.27 

%

$

1,717,180 

$

89,203 

5.19 

%

$

1,024,319 

$

52,587 

5.13 

%

Loans held for sale

43,061 

2,299 

5.34 

%

3,241 

101 

3.12 

%

1,212 

73 

6.02 

%

Loans (1) (2)

7,713,886 

492,508 

6.38 

%

7,997,653 

548,288 

6.86 

%

7,815,832 

518,007 

6.63 

%

Investment securities available-for-sale (2)

1,184,313 

24,716 

2.09 

%

1,473,095 

28,774 

1.95 

%

1,584,239 

32,074 

2.02 

%

Investment securities held-to-maturity

900,764 

19,242 

2.14 

%

983,309 

21,197 

2.16 

%

1,057,445 

22,586 

2.14 

%

Total interest earning assets

11,397,677 

605,121 

5.31 

%

12,174,478 

687,563 

5.65 

%

11,483,047 

625,327 

5.45 

%

Noninterest earning assets

653,920 

449,904 

501,722 

Less: allowance for credit losses

(152,154)

(104,020)

(79,218)

Total noninterest earning assets

501,766 

345,884 

422,504 

Total Assets

$

11,899,443 

$

12,520,362 

$

11,905,551 

Liabilities and Shareholders’ Equity

Interest-bearing liabilities:

Interest-bearing transaction

$

1,405,552 

$

42,097 

3.00 

%

$

1,700,301 

$

60,573 

3.56 

%

$

1,459,795 

$

46,140 

3.16 

%

Savings and money market

3,714,262 

125,609 

3.38 

%

3,411,971 

139,539 

4.09 

%

3,176,203 

132,374 

4.17 

%

Time deposits

3,199,611 

146,949 

4.59 

%

2,432,713 

120,309 

4.95 

%

1,774,184 

79,030 

4.45 

%

Total interest-bearing deposits

8,319,425 

314,655 

3.78 

%

7,544,985 

320,421 

4.25 

%

6,410,182 

257,544 

4.02 

%

Customer repurchase agreements and federal funds purchased

25,710 

764 

2.97 

%

37,872 

1,271 

3.36 

%

36,663 

1,218 

3.32 

%

Derivative collateral liability

11,676 

639 

5.47 

%

— 

— 

— 

%

— 

— 

— 

%

Other short-term borrowings

228,357 

11,086 

4.85 

%

1,476,550 

72,386 

4.90 

%

1,521,160 

73,253 

4.82 

%

Long-term borrowings

76,276 

8,090 

10.61 

%

66,321 

4,797 

7.23 

%

69,861 

2,766 

3.96 

%

Total interest-bearing liabilities

8,661,444 

335,234 

3.87 

%

9,125,728 

398,875 

4.37 

%

8,037,866 

334,781 

4.17 

%

Noninterest-bearing liabilities:

Noninterest-bearing demand

1,898,067 

1,987,886 

2,508,687 

Other liabilities

135,871 

160,580 

118,880 

Total noninterest-bearing liabilities

2,033,938 

2,148,466 

2,627,567 

Shareholders’ equity

1,204,061 

1,246,168 

1,240,118 

Total Liabilities and Shareholders’ Equity

$

11,899,443 

$

12,520,362 

$

11,905,551 

Net interest income

$

269,887 

$

288,688 

$

290,546 

Net interest spread

1.44 

%

1.28 

%

1.28 

%

Net interest margin

2.37 

%

2.37 

%

2.53 

%

Cost of funds

3.17 

%

3.59 

%

3.17 

%

(1)Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $15.1 million, $17.2 million and $16.7 million for the years ended 2025, 2024 and 2023, respectively.

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

Eagle Bancorp, Inc 2025 Form 10-K                                 

45

Table of Contents

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

Net interest income decreased in 2025 compared to 2024, primarily due to a larger decrease in interest-earning assets compared to interest-bearing liabilities. Additionally, average loan yields and interest bearing deposits with other banks and short term investments yields were lower in 2025 compared to the prior year, partially offset by lower rates on interest-bearing liabilities.

Net interest margin remained flat in 2025 compared to 2024. The cost of funds on interest-bearing liabilities decreased by 42 basis points from 3.59% for 2024 to 3.17% for 2025, while the yield on interest-earning assets had a decrease of 34 basis points from 5.65% for 2024 to 5.31% for 2025.

Rate/Volume Analysis of Net Interest Income

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

Year Ended December 31, 2025 Compared with

Year Ended December 31, 2024

Year Ended December 31, 2024 Compared with

Year Ended December 31, 2023

(dollars in thousands)

Change

Due to

Volume

Change

Due to

Rate

Total

Increase

(Decrease)

Change

Due to

Volume

Change

Due to

Rate

Total

Increase

(Decrease)

Interest earned on:

Interest-bearing deposits with other banks and other short-term investments

$

(8,391)

$

(14,456)

$

(22,847)

$

35,662 

$

954 

$

36,616 

Loans held for sale

1,241 

957 

2,198 

122 

(94)

28 

Loans

(19,454)

(36,326)

(55,780)

12,049 

18,232 

30,281 

Investment securities available-for sale

(5,641)

1,583 

(4,058)

(2,250)

(1,050)

(3,300)

Investment securities held-to-maturity

(1,779)

(176)

(1,955)

(1,583)

194 

(1,389)

Total interest income

(34,024)

(48,418)

(82,442)

44,000 

18,236 

62,236 

Interest paid on:

Interest-bearing transaction

(10,500)

(7,975)

(18,475)

7,602 

6,831 

14,433 

Savings and money market

12,363 

(26,293)

(13,930)

9,826 

(2,661)

7,165 

Time deposits

37,927 

(11,286)

26,641 

29,334 

11,945 

41,279 

Customer repurchase agreements

(408)

(98)

(506)

40 

13 

53 

Derivative collateral liability

639 

— 

639 

— 

— 

— 

Other short-term borrowings

(61,191)

(108)

(61,299)

(2,148)

1,281 

(867)

Long-term borrowings

720 

2,573 

3,293 

(140)

2,171 

2,031 

Total interest expense

(20,450)

(43,187)

(63,637)

44,514 

19,580 

64,094 

Net interest income

$

(13,574)

$

(5,231)

$

(18,805)

$

(514)

$

(1,344)

$

(1,858)

Eagle Bancorp, Inc 2025 Form 10-K                                 

46

Table of Contents

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

Provision for Credit Losses

The provision for credit losses represents the amount of expense charged to current earnings to record the ACL on loans and the ACL on HTM investment securities. The amount of the ACL on loans is based on management's assessment of current expected credit losses in the portfolio. Those factors include historical losses based on internal and peer data, economic conditions and trends, the value and adequacy of collateral, volume and mix of the portfolio, performance of the portfolio, and internal loan processes of the Company.

The table below presents a breakdown of the current provision for credit losses included in our Consolidated Statements of Operations.

For the Year Ended December 31,

(dollars in thousands)

2025

2024

2023

Provision for (reversal of) credit losses - loans

$

293,392 

$

67,005 

$

30,346 

Provision for (reversal of) credit losses - HTM debt securities

(295)

(645)

1,190 

Total Provision for credit losses

$

293,097 

$

66,360 

$

31,536 

Net charge offs in ACL

$

(248,178)

$

(38,555)

$

(18,850)

The change in the provision for credit losses on the loan portfolio for the December 31, 2025 was primarily attributable to the replenishment of the reserve following net charge-offs, as reported in the table above, and an increase in the qualitative reserve for CRE office loans ("office overlay").

Net charge-offs of $248.2 million during 2025 represented 3.22% of average loans held for investment, an increase from net charge-offs of $38.6 million in 2024, which represented 0.48% of average loans held for investment. During 2025, we began executing on a revised strategy for resolving criticized and classified loans with the goal of accelerating dispositions and reducing asset quality risk. In furtherance of this strategy, we obtained updated valuations in 2025 on the underlying collateral for certain loans and incorporated new information about borrower performance. Updated valuations obtained during the year reflected the rapidly changing commercial real estate market in the D.C. metro area, in many cases showing substantial declines. This information resulted in significant charge offs during 2025, primarily on office loans and other real estate loans with underlying office exposure and to a lesser extent on land, multifamily, and senior living loans.

Additionally, certain loans were transferred to loans held-for-sale ("HFS") in 2025, which resulted in additional charge-offs to record those loans at their fair value at the time of transfer. Total charge-offs in 2025 related to loans that were transferred to HFS or sold during 2025 were $176.5 million. We believe our actions in 2025 reflect a disciplined approach to credit risk management that incorporates updated market and borrower data into our loss estimates.

The office overlay increased in 2025 relative to 2024, impacted by updated assumptions associated with the PD and LGD rates as well as downward risk rating migration, as further discussed in the "Allowance for Credit Losses" section below. Although loans were transferred to held-for-sale, reducing the CRE office loan population, the resulting charge-offs on those loans informed higher loss factors on the remaining loans addressed by the office overlay, contributing to its elevated level for 2025. The increase in the office overlay for 2025 reflects management’s assessment of continued uncertainty in the CRE market, particularly within the office sector, as well as potential lag effects from interest-rate sensitivity, valuation declines, and refinancing risk. Management continues to monitor trends, including occupancy, capitalization rates, and market liquidity, across key metropolitan areas and may adjust qualitative reserves further as these factors evolve.

The ACL coverage ratio remains within management’s target range and reflects the current asset quality profile, though further provision expense may be required if collateral values or borrower performance continue to deteriorate.

The provision for credit losses for the held-to-maturity securities portfolio was recorded primarily on several corporate bonds. During the year ended December 31, 2025, there was a reversal of provision for credit losses of $295 thousand for the held-to-maturity securities portfolio, compared to a reversal of provision expense of $645 thousand for the year ended December 31, 2024.

The provision for credit losses for unfunded commitments is presented separately on the Consolidated Statements of Operations. This provision considers the probability that unfunded commitments will fund, among other factors.

Eagle Bancorp, Inc 2025 Form 10-K                                 

47

Table of Contents

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

There was a provision expense of $1.6 million for the year ended December 31, 2025, compared to a reversal of provision of $2.1 million for the year ended December 31, 2024, primarily due to higher unfunded commitments in our commercial and industrial portfolio during the current period.

Refer to the discussion under "Critical Accounting Policies and Estimates" above and in "Note 1 – Summary of Significant Accounting Policies" to the Consolidated Financial Statements for an overview of the methodology management employs on a quarterly basis to assess the adequacy of the allowance and the provisions charged to expense. Also, refer to the table in the "Allowance for Credit Losses" section which reflects activity in the ACL.

Noninterest Income

Noninterest income includes service charges on deposits, gain/(loss) on sale of investment securities and loans, income from Bank-Owned Life Insurance ("BOLI") and other income. The table below summarizes the comparative noninterest income.

For the Year Ended December 31,

(dollars in thousands)

2025

2024

Dollar Change

Percent Change

Service charges on deposits

$

7,127 

$

6,843 

$

284 

4 

%

Gain (loss) on sale of loans

(4,687)

57 

(4,744)

N/A

Net gain (loss) on sale of investment securities

(3,823)

14 

(3,837)

N/A

Increase in the cash surrender value of bank-owned life insurance

20,372 

2,885 

17,487 

606 

%

Other income

10,319 

10,140 

179 

2 

%

Total

$

29,308 

$

19,939 

$

9,369 

47 

%

The increase in total noninterest income in 2025 as compared to 2024 was primarily due to increases in the cash surrender value of BOLI investments in 2025 driven by additional BOLI investment of $200 million made in the first quarter of 2025, partially offset by elevated losses on the sale of HFS loans and AFS securities.

Noninterest Expense

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

For the Year Ended December 31,

(dollars in thousands)

2025

2024

Dollar Change

Percent Change

Salaries and employee benefits

$

87,859 

$

87,768 

$

91 

— 

%

Premises and equipment expenses

12,027 

11,382 

645 

6 

%

Marketing and advertising

5,016 

5,449 

(433)

(8)

%

Data processing

16,574 

14,093 

2,481 

18 

%

Legal, accounting and professional fees

10,168 

9,286 

882 

9 

%

FDIC insurance

31,413 

29,009 

2,404 

8 

%

Goodwill impairment

— 

104,168 

(104,168)

(100)

%

Legal contingency

10,000 

— 

10,000 

100 

%

Other expenses

27,598 

13,479 

14,119 

105 

%

Total

$

200,655 

$

274,634 

$

(73,979)

(27)

%

The decrease in total noninterest expense for 2025 as compared to 2024, was primarily due to no goodwill impairment during the current period, partially offset by elevated other expenses driven by disposition costs associated with the sale of certain HFS loans and further valuation adjustment on the remaining HFS portfolio during the fourth quarter of 2025. Additionally, a legal contingency of $10 million was recognized in 2025 for an outstanding legal matter. See "Note 19 – Commitments and Contingent Liabilities" for further details.

The major components of other expenses include regulatory assessment fees, director compensation, real estate taxes, and insurance expenses. Additionally, other expenses were elevated for the current period primarily due to $6.3 million in disposition costs related to HFS loan sales and $8.4 million in valuation adjustment on the remaining HFS portfolio.

Eagle Bancorp, Inc 2025 Form 10-K                                 

48

Table of Contents

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

As a percentage of average assets, total noninterest expense was 1.69% for the year ended December 31, 2025 as compared to 2.19% in 2024, primarily due to no goodwill impairment during the current period.

Income Tax Expense

For the December 31, 2025, income tax benefit was $58.1 million, compared to income tax expense of $16.8 million for the December 31, 2024. The switch from income tax expense in 2024 to income tax benefit in 2025 was primarily due to a pre-tax loss of $196.2 million in 2025.

The effective tax rate for the year ended December 31, 2025 was 29.63%. The effective tax rate represents the percentage of income tax benefit against the pre-tax loss in 2025. The effective tax rate for 2025 varies from the 21% statutory rate primarily due to the tax benefit from the solar investment tax credits purchased at discount, low-income housing tax credit equity investment, tax-exempt interest income and tax-exempt income from the increase in the cash surrender value of BOLI.

Balance Sheet Analysis

Overview

This section discusses our condensed consolidated balance sheets and should be read together with our consolidated financial statements and the accompanying notes.

As of

December 31, 2025

December 31, 2024

Change

Assets

Cash and cash equivalents (1)

$

695,693 

$

633,480 

$

62,213 

Investment securities (2)

1,831,550 

2,206,051 

(374,501)

Loans held for sale

90,650 

— 

90,650 

Loans held for investment, at amortized cost

7,280,459 

7,934,888 

(654,429)

Less: Allowance for credit losses

(159,604)

(114,390)

(45,214)

Loans held for investment, net of allowance

7,120,855 

7,820,498 

(699,643)

Deferred income taxes

132,330 

91,472 

40,858 

Bank-owned life insurance

335,177 

115,806 

219,371 

Other assets (3)

$

290,948 

$

262,201 

$

28,747 

Total Assets

$

10,497,203 

$

11,129,508 

$

(632,305)

Liabilities and Shareholders’ Equity

Liabilities

Deposits:

Noninterest-bearing demand

$

1,433,952 

$

1,544,403 

$

(110,451)

Interest-bearing transaction

1,038,154 

1,211,791 

(173,637)

Savings and money market

3,624,813 

3,599,221 

25,592 

Time deposits

3,036,687 

2,775,663 

261,024 

Total deposits

9,133,606 

9,131,078 

2,528 

Customer repurchase agreements

— 

33,157 

(33,157)

Borrowings

76,428 

566,108 

(489,680)

Other liabilities (4)

155,886 

173,104 

(17,218)

Total Liabilities

9,365,920 

9,903,447 

(537,527)

Total Shareholders’ Equity

1,131,283 

1,226,061 

(94,778)

Total Liabilities and Shareholders’ Equity

$

10,497,203 

$

11,129,508 

$

(632,305)

(1)Consists of cash and due from banks, interest-bearing deposits with banks, and other short-term investments.

(2)Consists of available-for-sale securities at fair value and held-to-maturity securities, net of allowance for credit losses.

(3)Consists of Federal Reserve and Federal Home Loan Bank stock, premises and equipment, right-of-use assets, other real estate owned, and other assets.

(4)Consists of operating lease liabilities, reserve for unfunded commitments and other liabilities.

See respective subsections below for the primary drivers of change and further discussion on investment securities, loans, allowance for credit losses, other earning asset, deposits and other borrowings.

Eagle Bancorp, Inc 2025 Form 10-K                                 

49

Table of Contents

Management's Discussion and Analysis | Balance Sheet Analysis

The decrease in total assets as of December 31, 2025 from December 31, 2024 was primarily due to declines in securities and loans balances from sales, maturities/liquidations and paydowns. This decrease in total assets was partially offset by additional BOLI investment during the year.

Investment securities, net of the allowance for credit losses, were $1.8 billion as of December 31, 2025 as compared to $2.2 billion as of December 31, 2024, a 17% decrease, primarily driven by maturities and paydowns on both AFS and HTM securities, and sales of AFS securities. The Bank does not currently plan to reinvest these proceeds back into the investment securities portfolio. Refer to the "Investment Securities and Short-Term Investments" section below for further discussion on investment securities.

Loans held for investment ("HFI") decreased by $654.4 million (from $7.9 billion as of December 31, 2024 to $7.3 billion as of December 31, 2025) while HFS loans increased by $90.7 million. Refer to the "Loan Portfolio", "Loan Maturity" and other loans-related sections below for further discussion on loans.

Total shareholders’ equity as of December 31, 2025 was $1.13 billion as compared to $1.23 billion as of December 31, 2024, a 8% decrease. The decrease in shareholders’ equity in 2025 was primarily due to net loss from operations of $138.1 million, and payment of cash dividends of $15.3 million, offset by $52.3 million in other comprehensive income. The ratio of common equity to total assets was 10.78% as of December 31, 2025 as compared to 11.02% as of December 31, 2024. Book value per share was $37.26 as of December 31, 2025, a 8.23% decrease from $40.60 as of December 31, 2024.

In order to be considered well-capitalized, the Bank must have a common equity tier one capital ("CET1") risk based capital ratio of 6.5%, a Tier 1 risk-based ratio of 8.0%, a total risk-based capital ratio of 10.0% and a leverage ratio of 5.0%. The Company and the Bank exceeded all these requirements and satisfy the capital conservation buffer of 2.5% of CET1 capital as of December 31, 2025. Failure to maintain the required capital conservation buffer would limit the ability of the Company and the Bank to pay dividends, repurchase shares or pay discretionary bonuses.

The Company's capital ratios remain substantially in excess of regulatory minimums and buffer requirements. The total risk based capital ratio was 14.33% as of December 31, 2025, as compared to 15.86% as of December 31, 2024. The CET1 risk based capital ratio was 13.07% as of December 31, 2025, as compared to 14.63% as of December 31, 2024. The tier 1 risk based capital ratio was 13.07% as of December 31, 2025, as compared to 14.63% as of December 31, 2024. The tier 1 leverage ratio was 9.72% as of December 31, 2025, as compared to 10.74% as of December 31, 2024. Refer to "Capital Resources and Adequacy" section below for further discussion on our capital.

Investment Securities and Short-Term Investments

This section and "Note 3 – Investment Securities" to the Consolidated Financial Statements provide additional information regarding the Company’s investment securities categorized as "available-for-sale" or AFS and as "held-to-maturity" or HTM. The Company classifies its investment securities as either AFS or HTM. The AFS classification requires that investment securities be recorded at fair value with any difference between the fair value and amortized cost (the purchase price adjusted by any discount accretion or premium amortization) reported as a component of shareholders’ equity (accumulated other comprehensive income (loss)), net of deferred income taxes, while securities classified as HTM are recorded and presented at their amortized cost.

Eagle Bancorp, Inc 2025 Form 10-K                                 

50

Table of Contents

Management's Discussion and Analysis | Balance Sheet Analysis | Investment Securities and Short-Term Investments

The tables below provide information regarding the composition of the investment securities portfolio at the dates indicated. As of December 31, 2025, the investment portfolio balances for both AFS securities at fair value and HTM securities at amortized cost basis decreased as compared to December 31, 2024, and the composition of the portfolios changed, as displayed in the tables below.

As of

December 31, 2025

December 31, 2024

(dollars in thousands)

Fair Value

Percent of Total

Average Duration (in years)

Fair Value

Percent of Total

Average Duration (in years)

Investment securities available-for-sale:

U.S. treasury bonds

$

— 

— 

%

—

$

24,776 

2 

%

—

U.S. agency securities

337,708 

35 

%

2.5

558,535 

44 

%

2.5

Residential mortgage-backed securities

562,504 

57 

%

3.8

625,316

49 

%

4.0

Commercial mortgage-backed securities

66,545 

7 

%

3.8

48,945 

4 

%

4.0

Municipal bonds

8,046 

1 

%

5.3

8,014

1 

%

6.0

Corporate bonds

1,967 

— 

%

5.1

1,818

— 

%

5.6

Total

$

976,770 

100 

%

$

1,267,404 

100 

%

As of

December 31, 2025

December 31, 2024

(dollars in thousands)

Amortized Cost

Percent of Total

Average Duration (in years)

Amortized Cost

Percent of Total

Average Duration (in years)

Investment securities held-to-maturity:

Residential mortgage-backed securities

$

544,402 

64 

%

5.1

$

605,904 

65 

%

5.4

Commercial mortgage-backed securities

85,760 

10 

%

5.1

88,575 

9 

%

5.4

Municipal bonds

106,875 

12 

%

6.3

114,060

12 

%

6.7

Corporate bonds

118,773 

14 

%

3.7

131,414 

14 

%

4.3

Total

855,810 

100 

%

939,953 

100 

%

Allowance for credit losses

(1,030)

(1,306)

Total held-to-maturity securities, net of ACL

$

854,780 

$

938,647 

As of December 31, 2025, the AFS investment portfolio decreased by 23% and HTM investment portfolio decreased by 9%, as compared to December 31, 2024, primarily driven by maturities and paydowns on both AFS and HTM securities, and sales of AFS securities. The investment portfolio is managed to achieve goals related to liquidity, income, interest rate risk management and to provide collateral for repurchase agreements and borrowings from the FHLB and FRB discount window.

The Company had a net unrealized loss in AFS securities of $78.6 million with a deferred tax asset of $19.3 million as of December 31, 2025, as compared to a net unrealized loss in AFS securities of $141.5 million with a deferred tax asset of $34.8 million as of December 31, 2024 driven by lower market interest rates and securities approaching maturity.

As of December 31, 2025 and 2024, the Company had $38.5 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.

As of December 31, 2025, there was no single issuer of securities owned by the Company with a book or fair value exceeding 10% of the Company’s shareholders’ equity, other than the U.S. Government, U.S. agencies and U.S. Government-sponsored enterprises.

Eagle Bancorp, Inc 2025 Form 10-K                                 

51

Table of Contents

Management's Discussion and Analysis | Balance Sheet Analysis | Investment Securities and Short-Term Investments

As of December 31, 2025, $66.5 million of corporate bonds were subordinated debt from other financial institutions. Corporate bonds generally, and subordinated debt in particular, pose credit risk such that if any of these issuers were to enter bankruptcy or insolvency proceedings, we could experience losses that may be material to operating results and our financial condition. We may also experience increases in provisions for credit losses, adversely affecting our earnings, if the creditworthiness of the issuers declines, whether due to idiosyncratic factors, economic conditions generally or other unforeseen factors or events.

The following tables provide information, on an amortized cost basis, for AFS and HTM portfolios regarding the expected maturity and weighted-average yield of the investment portfolio as of December 31, 2025. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Yields on tax exempt securities have not been calculated on a tax equivalent basis.

One Year or Less

After One Year

Through Five Years

After Five Years

Through Ten Years

After Ten Years

Total

(dollars in thousands)

Amortized

Cost

Weighted

Average

Yield

Amortized

Cost

Weighted

Average

Yield

Amortized

Cost

Weighted

Average

Yield

Amortized

Cost

Weighted

Average

Yield

Amortized

Cost

Weighted

Average

Yield

Available-for-sale:

U.S. agency securities

$

58,374 

1.57 

%

$

224,088 

1.69 

%

$

62,720 

1.75 

%

$

10,067 

1.25 

%

$

355,249 

1.67 

%

Residential mortgage-backed securities

55 

1.88 

%

3,659 

1.93 

%

163,073 

1.46 

%

453,753 

1.95 

%

620,540 

1.82 

%

Commercial mortgage-backed securities

9,507 

1.22 

%

8,290 

3.19 

%

47,467 

3.65 

%

3,667 

3.86 

%

68,931 

3.27 

%

Municipal bonds

— 

— 

%

— 

— 

%

— 

— 

%

8,426 

2.67 

%

8,426 

2.67 

%

Corporate bonds

— 

— 

%

— 

— 

%

2,000 

5.50 

%

— 

— 

2,000 

5.50 

%

Total

$

67,936 

1.52 

%

$

236,037 

1.75 

%

$

275,260 

1.93 

%

$

475,913 

1.96 

%

$

1,055,146 

1.88 

%

One Year or Less

After One Year

Through Five Years

After Five Years

Through Ten Years

After Ten Years

Total

(dollars in thousands)

Amortized

Cost

Weighted

Average

Yield

Amortized

Cost

Weighted

Average

Yield

Amortized

Cost

Weighted

Average

Yield

Amortized

Cost

Weighted

Average

Yield

Amortized

Cost

Weighted

Average

Yield

Held-to-maturity:

Residential mortgage-backed securities

$

13 

2.88 

%

$

1,370 

2.92 

%

$

13,059 

2.29 

%

$

529,960 

2.64 

%

$

544,402 

2.63 

%

Commercial mortgage-backed securities

— 

— 

%

28,263 

2.72 

%

20,455 

2.44 

%

37,042 

2.63 

%

85,760 

2.61 

%

Municipal bonds

— 

— 

%

14,366 

3.06 

%

41,434 

3.23 

%

51,075 

3.41 

%

106,875 

3.29 

%

Corporate bonds

4,897 

4.26 

%

56,657 

3.67 

%

57,219 

3.89 

%

— 

— 

%

118,773 

3.80 

%

Total

$

4,910 

4.26 

%

$

100,656 

3.31 

%

$

132,167 

3.30 

%

$

618,077 

2.70 

%

855,810 

2.88 

%

Allowance for credit losses

(1,030)

Total held-to-maturity securities, net of ACL

$

854,780 

Interest-bearing deposits with banks and other short-term investments primarily consist of liquid assets held at the Federal Reserve to meet general liquidity needs of the Company. Interest-bearing deposits with banks and other short-term investments were $684.0 million as of December 31, 2025, as compared to $619.0 million as of December 31, 2024, an increase of $65.0 million or 10%, primarily due to an increase in deposits at the Federal Reserve.

Eagle Bancorp, Inc 2025 Form 10-K                                 

52

Table of Contents

Management's Discussion and Analysis | Balance Sheet Analysis | Loan Portfolio

Loan Portfolio

In its lending activities, the Company seeks to develop and expand relationships with clients whose businesses and individual banking needs will grow with the Bank. We believe superior customer service, local decision making and accelerated turnaround time from application to closing are significant factors in growing the loan portfolio and meeting the lending needs in the markets served, while maintaining sound asset quality.

Loans held for investment were $7.3 billion as of December 31, 2025, as compared to $7.9 billion as of December 31, 2024, a decrease of $654.4 million or 8.2%. During the year ended December 31, 2025, certain loans, primarily income producing commercial real estate loans, were reclassified from HFI to HFS loans. This reclassification resulted in net charge-offs of $132.3 million in order to bring the loans to the lower of cost or fair value of $201.4 million at the time of transfer. During the twelve months ended December 31, 2025, seven HFS loans were sold, resulting in a loss of $4.7 million. There were $90.7 million in loans held for sale as of December 31, 2025 and none as of December 31, 2024.

The loan portfolio mix continues to evolve as the Bank has experienced a reduction in income producing commercial real estate loans and owner-occupied construction loans, offset by increases in commercial and owner-occupied commercial real estate loans. These shifts reflect our strategic focus on reshaping the portfolio toward relationship-driven commercial lending and asset classes aligned with our long-term risk-adjusted return objectives.

Market rates in 2025 for our new loan originations on average have been fairly consistent with the market rates at the end of 2024, even though short-term interest rates decreased. In 2025 the Federal Reserve adjusted short-term interest rates downwards three times for a total decrease of 75 basis points. We continue to see opportunities for growth in the commercial lending market and our processes for evaluating these opportunities are designed to ensure they are subject to reasonable underwriting standards, including appropriate cash flow necessary to support debt service. Following origination, we continue to monitor our borrowers' business plans and assess primary and alternative sources for loan repayment and, if necessary, obtain collateral or additional collateral to mitigate credit loss in the event of default.

The Bank has a large portion of its loan portfolio related to real estate, with 80% consisting of commercial real estate and real estate construction loans as of December 31, 2025. Non-owner occupied commercial real estate and commercial and residential construction represented 57% of the loan portfolio while the remaining 23% is represented by the "owner occupied - commercial real estate" and "construction - C&I (owner occupied)" loans.

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

As of

 December 31, 2025

December 31, 2024

(dollars in thousands)

Amount

%

Amount

%

Commercial

$

1,338,486 

18 

%

$

1,183,628 

15 

%

Income producing - commercial real estate

3,350,718 

46 

%

4,064,846 

51 

%

Owner occupied - commercial real estate

1,602,124 

22 

%

1,269,669 

16 

%

Real estate mortgage - residential

37,100 

1 

%

50,535 

1 

%

Construction - commercial and residential

795,400 

11 

%

1,210,763 

15 

%

Construction - C&I (owner occupied)

108,468 

1 

%

103,259 

1 

%

Home equity

47,448 

1 

%

51,130 

1 

%

Other consumer

715 

— 

%

1,058 

— 

%

Total loans

7,280,459 

100 

%

7,934,888 

100 

%

Less: allowance for credit losses

(159,604)

(114,390)

Loans, net(1)

$

7,120,855 

$

7,820,498 

(1)Excludes accrued interest receivable of $35.9 million and $42.9 million as of December 31, 2025 and December 31, 2024, respectively, which is recorded in other assets.

As noted above, a significant portion of the loan portfolio consists of commercial, construction and commercial real estate loans, primarily in the Washington, D.C. metropolitan area and is secured by real estate or other collateral in that market. While our basic market is the Washington, D.C. metropolitan area, the Bank has made loans outside that market where the borrower or its key decision makers have a meaningful relationship with the Bank and generally operate in or are based in our market. Although all of these loans are made to a diversified pool of unrelated borrowers across numerous businesses, adverse developments in the real estate market could continue

Eagle Bancorp, Inc 2025 Form 10-K                                 

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Table of Contents

Management's Discussion and Analysis | Balance Sheet Analysis | Loan Portfolio

to have an adverse impact on this portfolio of loans and the Company’s earnings and financial position. Management believes that the commercial real estate concentration risk is mitigated by diversification among the types and characteristics of real estate collateral properties, sound underwriting practices and ongoing portfolio monitoring and market analysis.

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

The chart below displays our loan portfolio, as a percentage of total amortized cost, by geographic concentration.

Washington, D.C.

Washington's Maryland Suburbs

Northern Virginia

Other Maryland

Other Locations

As part of its lending strategy, the Company maintains a substantial portfolio of CRE loans, with $5.7 billion and $6.5 billion, or 78.3% and 81.5% of total loans, of amortized cost outstanding as of December 31, 2025 and December 31, 2024, respectively. Management meets regularly in order to monitor its existing CRE loan portfolio and to evaluate the pipeline for CRE loan investment. Income producing CRE loans collateralized by office properties comprised approximately $576.1 million and $862.2 million, or 7.9% and 10.9% of total loans, as of December 31, 2025 and December 31, 2024, respectively.

Office loans within Washington, D.C., Washington's Maryland Suburbs and Northern Virginia were $545.8 million and $795.0 million, or 7.5% and 10.0% of total loans, as of December 31, 2025 and December 31, 2024, respectively.

The chart below displays the geographic concentration of income producing - CRE office loans in our loan portfolio, as percentage of total principal balance.

Central business district of Washington, D.C.

Washington, D.C. (outside of the central business district)

Washington's Maryland Suburbs

Northern Virginia

Eagle Bancorp, Inc 2025 Form 10-K                                 

54

Table of Contents

Management's Discussion and Analysis | Balance Sheet Analysis | Loan Portfolio

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

As of December 31, 2025

Maryland

Virginia

(dollars in thousands)

Washington, D.C.

Washington, D.C. Suburbs

Other

Northern Virginia

Other

Other

Total

Percent of Total

Collateral Type:

Hotel & motel

$

135,227

$

75,189

$

91,009

$

95,570

$

—

$

20,757

$

417,752

13 

%

Industrial

849

64,377

39,572

34,684

10,516

—

149,998

4 

%

Mixed use

209,200

43,346

3,000

6,737

20,721

4,883

287,887

9 

%

Multifamily

347,618

191,638

302

201,824

135,216

48,052

924,650

28 

%

Office

136,645

177,185

4,524

232,889

25,836

—

577,079

17 

%

Retail

61,371

63,178

55,068

44,484

48,536

2,462

275,099

8 

%

Single / 1-4 Family & Res. Condo

62,521

1,975

1,860

6,890

6,329

3,991

83,566

2 

%

Other(1)

204,717

168,972

12,143

223,494

5,913

25,433

640,672

19 

%

Total

$

1,158,148

$

785,860

$

207,478

$

846,572

$

253,067

$

105,578

$

3,356,703

100 

%

Percent of total

35%

23%

6%

25%

8%

3%

100%

Percent of Principal by Loan Size:

Less than $1 million

2 

%

2 

%

2 

%

2 

%

2 

%

2 

%

$1 million to $5 million

10 

%

11 

%

18 

%

8 

%

6 

%

16 

%

$5 million to $10 million

7 

%

7 

%

17 

%

5 

%

10 

%

35 

%

$10 million to $25 million

16 

%

11 

%

28 

%

34 

%

31 

%

12 

%

$25 million to $50 million

41 

%

32 

%

35 

%

34 

%

31 

%

34 

%

Greater than $50 million

24 

%

37 

%

— 

%

17 

%

20 

%

1 

%

Total

100 

%

100 

%

100 

%

100 

%

100 

%

100 

%

(1)Primarily includes commercial real estate loans with land, storage, and healthcare collateral.

As of December 31, 2025 and December 31, 2024, $107.9 million and $287.0 million, respectively, of principal of CRE loans collateralized by office properties were criticized or classified.

The table below displays income producing - commercial real estate loans, at principal, that are criticized or classified by collateral type.

As of

December 31, 2025

December 31, 2024

(dollars in thousands)

Special Mention

Substandard

Total

Special Mention

Substandard

Total

Hotel & motel

$

6,275 

$

— 

$

6,275 

$

— 

$

— 

$

— 

Industrial

2,697 

— 

2,697 

5,000 

— 

5,000 

Mixed use

50,299 

69,797 

120,096 

— 

8,764 

8,764 

Multifamily

43,201 

132,419 

175,620 

51,539 

21,202 

72,741 

Office

23,705 

84,185 

107,890 

126,736 

160,229 

286,965 

Retail

— 

12,424 

12,424 

3,518 

1,803 

5,321 

Single / 1-4 Family & Res. Condo

— 

5,747 

5,747 

— 

1,810 

1,810 

Other

59,838 

69,119 

128,957 

— 

84,835 

84,835 

Total

$

186,015 

$

373,691 

$

559,706 

$

186,793 

$

278,643 

$

465,111 

The Company has executed balance sheet optimization actions to reduce commercial real estate loan concentration, including actions to reduce exposure to short- and intermediate-term valuation risk in the office portfolio. These steps reflect our strategic focus on improving portfolio resilience and risk-adjusted returns. While we remain disciplined in evaluating additional opportunities to further address concentration and valuation risk, future decisions or actions, if made or taken, could continue to result in elevated credit costs and may materially impact our results in the periods in which such decisions or actions are made or executed. There can be no assurance that any additional initiatives will be undertaken or, if pursued or undertaken, will achieve their intended results.

Eagle Bancorp, Inc 2025 Form 10-K                                 

55

Table of Contents

Management's Discussion and Analysis | Balance Sheet Analysis | Loan Portfolio

The federal banking regulators have issued guidance for those institutions which are deemed to have concentrations in commercial real estate lending. Pursuant to the supervisory criteria contained in the guidance for identifying institutions with a potential commercial real estate concentration risk, institutions which have (1) total reported loans for construction, land development and other land acquisitions which represent 100% or more of an institution’s total risk-based capital; or (2) total commercial real estate loans representing 300% or more of the institution’s total risk-based capital and the institution’s commercial real estate loan portfolio has increased 50% or more during the prior 36 months are identified as having potential commercial real estate concentration risk. Institutions which are deemed to have concentrations in commercial real estate lending are expected to employ heightened levels of risk management with respect to their commercial real estate portfolios and may be required to hold higher levels of capital.

As of December 31, 2025, non-owner occupied commercial real estate loans (including construction, land and land development loans) represented 336.6% of consolidated risk based capital. Even though we saw a decline in that segment over the past 36 months of 9.1% compared to the threshold laid out in the regulatory guidance of 50% growth, we continue to expect the heightened supervisory expectations to continue to apply to us given the federal banking regulators' general focus on commercial real estate exposures at banks. Construction, land and land development loans represented 92.1% of consolidated risk based capital. Management has extensive experience in commercial real estate lending and has implemented and continues to maintain risk management procedures and underwriting criteria with respect to its commercial real estate portfolio designed to address the risks inherent in that asset class. Loan monitoring practices include but are not limited to periodic stress testing analysis to evaluate changes to cash flows, owing to interest rate increases and declines in net operating income. Nevertheless, we may be required to maintain higher levels of capital as a result of our commercial real estate concentrations, which could require us to raise additional capital, increasing our funding costs or diluting our shareholders, or take other action to retain capital, adversely affecting shareholder returns. The Company seeks to manage the risks relating to commercial real estate and its capital adequacy through the development and implementation of its Capital Policy and Capital Plan, the preparation of pro-forma projections including stress testing and the development of internal minimum targets for regulatory capital ratios that are subject to approval by the Board of Directors (the "Board") and in excess of well capitalized ratio requirements.

The Company monitors industry and collateral concentrations to avoid loan exposures to a large group of similar industries or similar collateral. An industry for this purpose is defined as a group of businesses that are engaged in similar activities and have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions.

Certain directors and executive officers have had loan transactions with the Company. Such loans were made in the ordinary course of the Company’s lending business; were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with third parties; and, in the opinion of management, did not involve more than the normal risk of collectability or present other unfavorable features. Refer to "Note 4 – Loans and Allowance for Credit Losses" to the Consolidated Financial Statements for further detail regarding related party loans.

Eagle Bancorp, Inc 2025 Form 10-K                                 

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Table of Contents

Management's Discussion and Analysis | Balance Sheet Analysis | Loan Maturity

Loan Maturity

The table below sets forth the time to contractual maturity of the loan portfolio. Loans are shown in the period based on final contractual maturity. Demand loans, having no contractual maturity, and overdrafts are reported as due in one year or less.

As of December 31, 2025

(dollars in thousands)

Total

One Year or Less

Over One Year to Five Years

Over Five Years to Fifteen Years

Over Fifteen Years

Commercial

$

1,338,486 

$

364,688 

$

839,995 

$

131,228 

$

2,575 

Income producing - commercial real estate (1)

3,350,718 

1,742,098 

1,434,780 

173,840 

— 

Owner occupied - commercial real estate

1,602,124 

196,592 

647,820 

470,321 

287,391 

Real estate mortgage - residential

37,100 

8,938 

19,673 

825 

7,664 

Construction - commercial and residential

795,400 

650,519 

115,262 

— 

29,619 

Construction - C&I (owner occupied)

108,468 

1,749 

41,740 

9,139 

55,840 

Home equity

47,448 

1,736 

90 

1,929 

43,693 

Other consumer

715 

460 

156 

14 

85 

Total loans

$

7,280,459 

$

2,966,780 

$

3,099,516 

$

787,296 

$

426,867 

Loans with:

Predetermined fixed interest rate

Commercial

$

185,292 

$

60,519 

$

84,394 

$

40,379 

$

— 

Income producing - commercial real estate (1)

1,559,388 

518,756 

918,574 

122,058 

— 

Owner occupied - commercial real estate

610,464 

174,961 

231,170 

148,204 

56,129 

Real estate mortgage - residential

34,625 

7,794 

19,673 

508 

6,650 

Construction - commercial and residential

29,614 

6,891 

22,723 

— 

— 

Construction - C&I (owner occupied)

6,595 

— 

2,892 

3,703 

— 

Home equity

304 

173 

— 

131 

— 

Other consumer

166 

— 

156 

— 

10 

Total loans

$

2,426,448 

$

769,094 

$

1,279,582 

$

314,983 

$

62,789 

Floating or adjustable interest rate

Commercial

$

1,153,194 

$

304,169 

$

755,601 

$

90,849 

$

2,575 

Income producing - commercial real estate (1)

1,791,330 

1,223,342 

516,206 

51,782 

— 

Owner occupied - commercial real estate

991,660 

21,631 

416,650 

322,117 

231,262 

Real estate mortgage - residential

2,475 

1,144 

— 

317 

1,014 

Construction - commercial and residential

765,786 

643,628 

92,539 

— 

29,619 

Construction - C&I (owner occupied)

101,873 

1,749 

38,848 

5,436 

55,840 

Home equity

47,144 

1,563 

90 

1,798 

43,693 

Other consumer

549 

460 

— 

14 

75 

Total loans

$

4,854,011 

$

2,197,686 

$

1,819,934 

$

472,313 

$

364,078 

(1)Income producing CRE office loans with total principal of $577.1 million and multifamily loans with total principal of $924.7 million as of December 31, 2025 are included within income producing - commercial real estate. The charts below represent their maturities schedules.

Eagle Bancorp, Inc 2025 Form 10-K                                 

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Table of Contents

Management's Discussion and Analysis | Balance Sheet Analysis | Loan Maturity

Allowance for Credit Losses

The ACL is an estimate based on many factors which reflect management’s assessment of the risk in the loan portfolio. Those factors include economic conditions and trends, the value and adequacy of collateral, volume and mix of the portfolio, performance of the portfolio and internal loan processes of the Company and Bank. A full discussion of the accounting for ACL is contained in "Note 1 – Summary of Significant Accounting Policies" to the Consolidated Financial Statements and activity in the ACL is contained in "Note 4 – Loans and Allowance for Credit Losses" to the Consolidated Financial Statements. Also, refer to "Critical Accounting Policies and Estimates" above for further discussion of the methodology which management employs to maintain an adequate ACL, as well as "Provision for Credit Losses" above for a discussion of the Company's calculation of the provision for credit losses during the years ended December 31, 2025 and 2024.

The ACL for loans as of December 31, 2025 was $159.6 million, which reflected a increase of $45.2 million from $114.4 million as of December 31, 2024, reflecting a provision for credit losses of $293.4 million and $248.2 million in net charge-offs during the year ended December 31, 2025. Net charge-offs of $248.2 million during the year ended December 31, 2025 represented 3.22% of average loans held for investment, an increase from net charge-offs of $38.6 million during same period in 2024, which represented 0.48% of average loans held for investment. The ACL represented 2.19% of total loans as of December 31, 2025 as compared to 1.44% as of December 31, 2024.

Management believes the ACL as of December 31, 2025 remains adequate to absorb estimated losses inherent in the portfolio following the loss recognition on high-risk loans concentrated in the commercial real estate office segment. The losses recognized in 2025 were primarily due to updated valuations on the underlying collateral for certain loans and the incorporation of new information about borrower performance. The updated valuations obtained during the year reflected the rapidly changing commercial real estate market in the D.C. metro area, in many cases showing substantial declines. This resulted in higher provisioning and an elevated rate of charge-offs during the year. As of December 31, 2025, the allowance represented 149% of nonperforming loans as compared to 55% as of December 31, 2024. The increase in the ACL for loans at December 31, 2025 compared to December 31, 2024, was primarily due to increased reserves related to the Bank's CRE office overlay. The overlay increased as charge-offs taken during the current period and negative risk rating migration within the CRE office portfolio were incorporated into the calculation. Negative risk rating migration within the CRE office portfolio during 2025 was primarily a result of continued market deterioration and the incorporation of new information about borrower performance. In addition, the ACL on individually assessed loans modestly increased as updated valuation information was received, primarily on loans that migrated to nonperforming status during the current period.

As part of its comprehensive loan review process, the Bank’s Risk Committee evaluates loans which are past due 30 days or more. The Committee makes an assessment of the conditions and circumstances surrounding delinquent and potential problem loans. The Bank’s loan policy requires that loans be placed on nonaccrual if they are 90 days past due or if their collection is deemed to be doubtful, unless they are well secured and in the process of collection. The Credit Administration department analyzes the status of development and construction projects, including sales activities and utilization of interest reserves in order to assess potential increased levels of risk which may require additional reserves.

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Table of Contents

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

As the loan portfolio and ACL review processes continue to evolve there may be changes to elements of the allowance and this may have an effect on the overall level of the allowance maintained. Management conducted sensitivity analysis on the CECL model by using Moody's upside and downside scenarios across the forecast period.

As of December 31, 2025 and 2024, the Company had $106.9 million and $208.7 million, respectively, of loans classified as nonperforming. Please refer to "Note 1 – Summary of Significant Accounting Policies" to the Consolidated Financial Statements under the caption "Loans" for a discussion of the Company’s policy regarding individual evaluation of loans to record a provision for expected credit losses. Please refer to the "Nonperforming Assets" section for a discussion of problem and potential problem assets.

As of December 31, 2025 and 2024, loans rated special mention had an amortized cost of $268.9 million and $244.8 million, respectively, and loans rated substandard had an amortized cost of $514.5 million and $426.4 million, respectively. The increase in substandard loans was primarily attributable to additions in CRE loans, particularly in income producing - commercial real estate as weaknesses in borrower performance were identified during our credit monitoring processes.

As of December 31, 2025, 99% and 79% of special mention and substandard loans, respectively, were current, with the remainder either 30 or more days past due or nonperforming. Based upon their status as potential problem loans, loans risk rated special mention or substandard receive heightened scrutiny. Additionally, the Company's credit loss allowance methodology incorporates increased reserve factors for office loans considered potential problem loans as compared to the general portfolio.

Management recognizes the risks inherent in the CRE portfolio and remains focused on maintaining disciplined portfolio management and a robust risk rating process. The Bank has implemented enhanced analytical procedures for evaluating credit requests, refined its risk rating framework, and strengthened ongoing monitoring of the loan portfolio and the adequacy of the ACL, particularly for CRE and construction loans, including those secured by office properties. These efforts include the use of stress testing analyses. Additionally, fair value assessments of loans acquired are included in our analytical procedures. The loan portfolio analysis process is ongoing and proactive to support the Company's objective of maintaining a portfolio of quality credits and quickly identifying weaknesses before they become more severe.

Portfolio management and the risk rating process are core parts of the Company’s credit risk management, including for commercial real estate loans. The Bank conducts analysis of credit requests and the management of problem credits. The Bank has developed and implemented analytical procedures for evaluating credit requests, has refined the Company’s risk rating system and has adopted enhanced monitoring of the loan portfolio and the adequacy of the ACL, in particular on its commercial real estate and construction loans (including those collateralized by office properties). These analyses include stress testing. The loan portfolio analysis process is ongoing and proactive to support the Company's objective of maintaining a portfolio of quality credits and quickly identifying weaknesses before they become more severe.

Eagle Bancorp, Inc 2025 Form 10-K                                 

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Table of Contents

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

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

For the Year Ended December 31,

(dollars in thousands)

2025

2024

Balance at beginning of period

$

114,390 

$

85,940 

Charge-offs:

Commercial

(2,410)

(4,906)

Income producing - commercial real estate

(205,661)

(30,284)

Owner occupied - commercial real estate

(22,238)

(3,800)

Construction - commercial and residential

(18,712)

(129)

Home equity

(206)

— 

Other consumer

(35)

(88)

Total charge-offs

(249,262)

(39,207)

Recoveries:

Commercial

666 

373 

Income producing - commercial real estate

332 

185 

Owner occupied - commercial real estate

86 

94 

Total recoveries

1,084 

652 

Net charge-offs

(248,178)

(38,555)

Provision for credit losses - loans

293,392 

67,005 

Balance at end of period

$

159,604 

$

114,390 

Ratio of net charge-offs to average loans outstanding during the period

3.22 

%

0.48 

%

The allocation of the allowance as of December 31, 2025 includes the allowance for credit losses of $19.6 million against individually assessed loans of $106.9 million, as compared to allowance for credit losses of $17.1 million against individually assessed loans of $208.7 million as of December 31, 2024. In addition, the Company's performing office coverage ratio, which calculates the ACL attributable to loans collateralized by performing office properties as a percentage of total loans, was 12.89% and 3.81% as of December 31, 2025 and 2024, respectively. The allocation of the allowance to each category is not necessarily indicative of future losses or charge-offs and does not restrict the usage of the allowance to absorb losses in any category. The Company has updated its allocation methodology to better reflect the ACL attributable to loan categories and collateral types. Conforming changes have been made to prior period amounts. These reclassifications had no effect on net income (loss) or shareholders' equity. The table below displays the allocation of the ACL by loan category and the percentage of allowance in each category.

As of

December 31, 2025

December 31, 2024

(dollars in thousands)

Amount

% of Total ACL

% of Total Loans

Amount

% of Total ACL

% of Total Loans

Commercial

$

26,607 

17 

%

18 

%

$

16,293 

14 

%

15 

%

Income producing - commercial real estate

98,707 

62 

%

46 

%

65,375 

57 

%

51 

%

Owner occupied - commercial real estate

20,719 

13 

%

22 

%

19,295 

17 

%

16 

%

Real estate mortgage - residential

339 

— 

%

1 

%

472 

— 

%

1 

%

Construction - commercial and residential

11,171 

7 

%

11 

%

11,333 

10 

%

15 

%

Construction - C&I (owner occupied)

1,515 

1 

%

1 

%

1,079 

1 

%

1 

%

Home equity

519 

— 

%

1 

%

515 

1 

%

1 

%

Other consumer

27 

— 

%

— 

%

28 

— 

%

— 

%

Total

$

159,604 

100 

%

100 

%

$

114,390 

100 

%

100 

%

Eagle Bancorp, Inc 2025 Form 10-K                                 

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

The table below displays the allocation of the ACL specific to income producing - commercial real estate loans by collateral type.

As of

December 31, 2025

December 31, 2024

(dollars in thousands)

Amount

Percentage

Amount

Percentage

Hotel & motel

$

3,934 

4 

%

$

3,294 

5 

%

Industrial

1,359 

1 

%

2,301 

4 

%

Mixed use

2,627 

3 

%

4,617 

7 

%

Multifamily

7,468 

8 

%

8,041 

12 

%

Office

71,364 

72 

%

38,040 

58 

%

Retail

2,791 

3 

%

4,658 

7 

%

Single / 1-4 Family & Res. Condo

885 

1 

%

987 

2 

%

Other

8,279 

8 

%

3,437 

5 

%

Total ACL - Income producing - commercial real estate loans

$

98,707 

100 

%

$

65,375 

100 

%

Nonperforming Assets

The Company’s nonperforming assets are comprised of the amortized cost of loans delinquent 90 days or more, and nonaccrual HFI loans, which includes the nonperforming portion of loan modifications, and the carrying value of other real estate owned ("OREO"). Nonperforming assets totaled $109.0 million as of December 31, 2025, representing 1.04% of total assets, as compared to $211.4 million as of December 31, 2024, representing 1.90% of total assets. The decrease was primarily due to charge offs of nonaccrual loans, including on loans transferred to HFS, and changes in nonperforming loans discussed below. As of December 31, 2025, nonaccrual HFS loans totaling $90.7 million were excluded from nonperforming assets since they are carried at the lower of cost or fair value and are not reflected in credit metrics.

The Company had no accruing loans that were 90 days or more past due as of December 31, 2025 and December 31, 2024. Management prioritizes remaining attentive to early signs of deterioration in borrowers’ financial conditions and to taking action designed to mitigate risk. The Company places loans on nonaccrual status if it deems collection to be doubtful. The Company believes, based on its loan portfolio risk analysis that its ACL at 2.19% of total loans as of December 31, 2025, is adequate to absorb expected credit losses within the loan portfolio at that date.

Total nonperforming loans had an amortized cost of $106.9 million as of December 31, 2025, representing 1.47% of total loans, compared to $208.7 million as of December 31, 2024, representing 2.63% of total loans. This decrease was primarily driven by the reduction of nonperforming loans in the income producing - commercial real estate category.

The CECL standard allows for institutions to evaluate individual loans in the event that the asset does not share similar risk characteristics with its original segmentation. This can occur due to credit deterioration, increased collateral dependency or other factors leading to impairment. In particular, the Company individually evaluates loans on nonaccrual status, though it may individually evaluate other loans or groups of loans as well if it determines they no longer share similar risk with their assigned segment. Reserves on individually assessed loans are determined by one of two methods: the fair value of collateral or the discounted cash flow. Fair value of collateral is used for loans determined to be collateral dependent, and the fair value represents the net realizable value of the collateral, adjusted for sales costs, commissions, senior liens, etc. Discounted cash flow is used on loans that are not collateral dependent where structural concessions have been made and continuing payments are expected. The continuing payments are discounted over the expected life at the loan’s original contract rate and include adjustments for risk of default.

Nonperforming assets include loans that the Company considers to be individually assessed. Individually assessed loans are defined as those as to which we believe it is probable that we will not collect all amounts due according to the contractual terms of the loan agreement. Loans that do not share risk characteristics consistent with similar loans are evaluated on an individual basis. For collateral dependent financial assets where 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

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Management's Discussion and Analysis | Balance Sheet Analysis | Nonperforming Assets

collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the 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.

Generally, collateral valuations associated with individually assessed loans are updated on not less than an annual basis. As part of our credit risk management process, we periodically reassess the value of collateral supporting commercial real estate loans, particularly in periods of market volatility. Normally, we obtain updated valuations when borrower performance suggests that repayment may become dependent on the underlying real estate and we determine that existing collateral values may not reflect current market conditions. This approach focuses on loans where cash flow coverage has deteriorated and where guarantor support appears uncertain or insufficient. In some cases when a loan is downgraded late in a quarter, a new valuation may not be obtained until the following quarter.

In evaluating whether a new valuation is warranted, we consider a range of factors, including trends in local property markets, changes in capitalization rates and lease terms, the availability and terms of financing for comparable properties, and observable shifts in supply-demand dynamics. We also assess property-specific factors such as deferred maintenance or improvements, zoning or regulatory changes, environmental matters, and other conditions that may materially influence value. Passage of time alone does not drive our valuation decisions; rather, we apply a judgment-based framework informed by current market data and asset-specific analysis.

The objectives of this process are to have our collateral estimates reflect current market conditions and to support timely and appropriate credit loss recognition as conditions evolve.

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. A loan that is considered a modified loan may be evaluated for disclosure if the commitment is $500 thousand or greater. Management strives to identify borrowers in financial difficulty early and may 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.

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

During the year ended December 31, 2025, the Bank modified 40 loans with a total amortized cost of $277.6 million as of December 31, 2025 (3.8% of the loan portfolio). These loans received extended loan terms of between approximately 4 to 36 months.

As of December 31, 2025, the payment status of 40 loans that were modified in the preceding twelve months, included 32 loans with a total amortized cost basis $232.0 million which were performing under their modified terms, 3 loans with a total amortized cost basis of $14.0 million which were 30-89 days past due and 5 loans with a total amortized cost basis of $31.6 million which were on nonaccrual status .

Management, from time-to-time and in the ordinary course of business, implements renewals, modifications, extensions and/or changes in terms of loans to borrowers who have the ability to repay on reasonable market-based terms and are not experiencing financial difficulty. For example: (1) adverse weather conditions may create a short term cash flow issue for an otherwise profitable retail business which suggests a temporary interest only period on an amortizing loan; (2) there may be delays in absorption on a real estate project which reasonably suggests extension of the loan maturity at market terms; or (3) there may be maturing loans to borrowers with demonstrated repayment ability who are not in a position at the time of maturity to obtain alternate long-term financing.

Included in nonperforming assets as of December 31, 2025 was OREO of $2.1 million, consisting of three foreclosed properties, compared to OREO of $2.7 million, consisting of five foreclosed properties as of December 31, 2024. OREO properties are carried at the lower of cost or at fair value less estimated costs to sell.

Eagle Bancorp, Inc 2025 Form 10-K                                 

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Management's Discussion and Analysis | Balance Sheet Analysis | Nonperforming Assets

It is the Company's policy to generally obtain third party appraisals prior to foreclosure and to obtain updated third party appraisals on OREO properties generally not less frequently than annually. Generally, the Company obtains updated appraisals or evaluations where it has reason to believe, based upon market indications (such as comparable sales, a scenario in which the Company is considering legitimate offers below carrying value, broker indications and similar factors), that the current appraisal does not accurately reflect current value. There were six OREO sales in the year ended December 31, 2025 and two in the year ended December 31, 2024, generating proceeds of $14.9 million and $656 thousand, respectively.

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

As of

(dollars in thousands)

December 31, 2025

December 31, 2024

Nonaccrual Loans:

Commercial

$

18,099 

$

2,048 

Income producing - commercial real estate

62,537 

168,454 

Owner occupied - commercial real estate

7,937 

37,744 

Real estate mortgage - residential

579 

157 

Construction - commercial and residential

17,394 

— 

Home equity

351 

303 

Total nonperforming loans(1)

106,897 

208,706 

Other real estate owned

2,059 

2,743 

Total nonperforming assets

$

108,956 

$

211,449 

Coverage ratio: allowance for credit losses to total nonperforming loans

149 

%

55 

%

Ratio of nonperforming loans to total loans

1.47 

%

2.63 

%

Ratio of nonperforming assets to total assets

1.04 

%

1.90 

%

(1)     Excludes nonaccrual HFS loans totaling $90.7 million and zero as of December 31, 2025 and December 31, 2024, respectively.

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

As of December 31, 2025, there were $514.5 million of substandard loans. Based upon their status as potential problem loans, loans risk rated special mention or substandard receive heightened scrutiny and ongoing intensive risk management. Additionally, the Company's loan loss allowance methodology incorporates increased reserve factors for certain loans considered potential problem loans as compared to the general portfolio.

Other Earning Assets

As part of its employee benefits and financing strategies, the Company has invested in BOLI policies. BOLI serves as a tax-efficient asset designed to offset the cost of employee benefit obligations. The Company views BOLI as a long-term investment to help fund future benefit expenses.

As of December 31, 2025, the cash surrender value of BOLI totaled $335.2 million, compared to $115.8 million as of December 31, 2024. The increase reflects an additional BOLI investment of $200 million made in the first quarter of 2025 through premium payments as well as earnings on the policies during 2025.

Deposits and Other Borrowings

The principal sources of funds for the Bank are core deposits, consisting of demand deposits, money market accounts, Negotiable Order of Withdrawal ("NOW") accounts, savings accounts, and certificates of deposits. The deposit base includes transaction accounts, time and savings accounts and accounts which customers use for cash management which provide the Bank with a source of fee income and cross-marketing opportunities, as well as an attractive source of lower cost funds. To meet funding needs during periods of high loan demand and seasonal variations in core deposits, the Bank utilizes alternative funding sources such as brokered deposits, secured borrowings from the FHLB, and federal funds purchased lines of credit from correspondent banks.

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

As of

December 31, 2025

December 31, 2024

(dollars in thousands)

Balance

Percentage

Balance

Percentage

Noninterest-bearing demand

$

1,433,952 

16 

%

$

1,544,403 

17 

%

Interest-bearing transaction

1,038,154 

11 

%

1,211,791 

13 

%

Savings and money market

3,624,813 

40 

%

3,599,221 

39 

%

Time deposits

3,036,687 

33 

%

2,775,663 

31 

%

Total

$

9,133,606 

100 

%

$

9,131,078 

100 

%

No single depositor represented more than 10% of total deposits as of December 31, 2025. The ten largest depositors not associated with brokered pass-through relationships represented approximately 18% of total deposits as of December 31, 2025. The Company maintains a significant deposit relationship with a third-party payments processor, whose business results in deposit inflows and outflows on an ongoing basis, which contributes to variations in period end balances compared to average deposit balances.

Average total deposits for the year ended December 31, 2025 were $10.2 billion, as compared to $9.5 billion for the same period in 2024, a 7% increase.

Time deposits were $3.0 billion as of December 31, 2025, which was 33% of deposits. This was an increase from $2.8 billion as of December 31, 2024, which was 31% of deposits. The increase in time deposits was primarily driven by growth in the Company's digital acquisition channel.

The table below summarizes time deposits in excess of $250 thousand by maturity.

As of

(dollars in thousands)

December 31, 2025

December 31, 2024

Three months or less

$

252,100 

$

189,817 

More than three months through six months

391,299 

387,849 

More than three months through twelve months

305,557 

710,021 

Over twelve months

521,701 

421,530 

Total

$

1,470,657 

$

1,709,217 

Time deposits with balances of $250 thousand or more represented 16% and 19% of total deposits as of December 31, 2025 and 2024, respectively. See "Note 9 – Deposits" to the Consolidated Financial Statements for additional information regarding the maturities of time deposits and the Average Balances Table in the "Net Interest Income and Net Interest Margin" section for the average rates paid on interest-bearing deposits.

The Bank offers brokered time deposits generally in denominations of less than $250 thousand from brokerage networks. The Bank participates in CDARS and the ICS programs within IntraFi Network, LLC ("IntraFi"), which provide for reciprocal ("two-way") transactions among banks to maximize FDIC insurance. ICS also allows for the sale of deposits into the IntraFi Network ("One-Way Sale") which provides FDIC insurance for the depositor without reciprocal deposits returned to the Bank. Deposits sold through the IntraFi One-Way Sale process are not included in the Bank’s deposit totals. The sale of ICS deposits allows the Bank to moderate the fluctuation of deposit balances. As of December 31, 2025, the Bank sold de minimis deposits through the IntraFi One-Way Sale network. The total of reciprocal deposits as of December 31, 2025 was $1.7 billion (19% of total deposits) as compared to $1.4 billion (16% of total deposits) as of December 31, 2024. These sources are believed by the Company to represent a reliable and cost efficient alternative funding source for the Bank, but there can be no assurance that they will continue to be adequate or appropriate to meet our liquidity needs. The Bank also is able to receive one way CDARS deposits and participates in IntraFi’s Insured Network Deposit Program ("IND"). The Bank had $385.7 million and $894.7 million of IND brokered deposits as of December 31, 2025 and December 31, 2024, respectively. However, to the extent that the condition or reputation of the Company or Bank deteriorates, or to the extent that there are significant changes in market interest rates which the Company and Bank do not elect to match, or if aggregate funding available to banks changes due to changes in the marketplace, we may experience an outflow of brokered deposits or difficulty with obtaining them in the future. In that event, we would be required to obtain alternate sources for funding, which may increase our cost of funds and negatively impact our net interest margin.

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We have used brokered deposits and intend to continue to use brokered deposits as one of our funding sources. As of December 31, 2025, total brokered deposits were $3.3 billion, or 36% of total deposits, compared to $4.0 billion, or 44% as of December 31, 2024. These brokered deposits were comprised of savings, money market and other interest-bearing transaction accounts of $2.4 billion and $2.7 billion, and time deposits of $0.8 billion and $1.3 billion as of December 31, 2025 and 2024, respectively. The Company uses the Call Report definitions for regulatory reporting by the Bank to classify its deposits as brokered deposits. As of December 31, 2025 and December 31, 2024, total deposits included estimated totals of $2.3 billion and $2.2 billion of uninsured deposits, which represented 25% and 24% of total deposits, respectively.

The decrease in noninterest bearing demand deposits was offset by the increase in time deposits during the year ended December 31, 2025, due to continued elevated interest rates in 2025. Average noninterest bearing deposits over total deposits for years ended December 31, 2025 and December 31, 2024 were 19% and 21%, respectively. The Bank also offers business NOW accounts and business savings accounts to accommodate those customers who may have excess short term cash to deploy in interest earning assets.

The Company used to offer a sweep account, or "customer repurchase agreement," allowing qualifying businesses to earn interest on short-term excess funds, which were not suited for either a certificate of deposit or a money market account. The Company discontinued this product offering in November 2025. The balances in these accounts were zero as of December 31, 2025 compared to $33.2 million as of December 31, 2024.

The Bank raises and renews time deposits through its branch network, for its public funds customers, and through brokered networks to meet the needs of its community of savers and as part of its interest rate risk management and liquidity planning.

The tables below summarize the Company's borrowings and activities on borrowings.

(dollars in thousands)

Borrowings - Principal

Unamortized Deferred Issuance Costs

Net Borrowings Outstanding

Interest Rates (1)

December 31, 2025

Customer repurchase agreements

$

— 

$

— 

$

— 

— 

%

Short-term borrowings:

FHLB secured borrowings

— 

— 

— 

— 

%

Long-term borrowings:

Senior notes

77,665 

(1,237)

76,428 

10.00 

%

Total

$

77,665 

$

(1,237)

$

76,428 

December 31, 2024

Customer repurchase agreements

$

33,157 

$

— 

$

33,157 

2.67 

%

Short-term borrowings:

FHLB secured borrowings

490,000 

— 

490,000 

4.81 

%

Long-term borrowings:

Senior notes

77,665 

(1,557)

76,108 

10.00 

%

Total

$

600,822 

$

(1,557)

$

599,265 

(1)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.

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Years Ended December 31,

2025

2024

(dollars in thousands)

Average Daily Balance (1)

Maximum Month-End Balance (1)

Average Daily Balance (1)

Maximum Month-End Balance (1)

Customer repurchase agreements and federal funds purchased

$

25,710 

$

40,049 

$

37,872 

$

44,454 

Short-term borrowings:

FHLB secured borrowings

$

228,357 

$

990,000 

$

373,544 

$

601,100 

FRB: BTFP secured borrowings

$

— 

$

— 

$

1,103,005 

$

1,800,000 

Subordinated notes, 5.75%

$

— 

$

— 

$

47,049 

$

70,000 

Long-term borrowings:

Senior notes

$

76,276 

$

76,428 

$

19,735 

$

77,665 

(1)The average daily balance and maximum month-end balance are calculated on the principal balance on the borrowings.

Outstanding short-term advances and borrowings are part of the overall asset liability strategy to support loan growth.

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

As of December 31, 2025, the Company had no outstanding balances in FHLB advances, compared to $490.0 million as of December 31, 2024. Outstanding FHLB advances are secured by collateral consisting of specifically pledged marketable investment securities, a blanket lien on qualifying loans in the Bank’s commercial mortgage, residential mortgage and home equity loan portfolios.

On September 30, 2024, the Company closed a private placement of its 10.00% senior unsecured debt totaling $77.7 million maturing on September 30, 2029 (the "2029 Senior Notes" or "Original Notes"). As of December 31, 2025 and 2024, the carrying value of these 2029 Senior Notes were $76.4 million and $76.1 million, respectively, which reflected $1.2 million and $1.6 million, respectively, 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.

Commitments and Contractual Obligations

The Company has various financial obligations, including contractual obligations and commitments that may require future cash payments. The table below shows details on these fixed and determinable obligations.

As of December 31, 2025

(dollars in thousands)

Within One

Year

One to

Three Years

Three to

Five Years

Over Five

Years

Total

Deposits without a stated maturity (1)

$

6,096,919 

$

— 

$

— 

$

— 

$

6,096,919 

Time deposits (1)

2,178,745 

656,190 

201,752 

— 

3,036,687 

Borrowed funds (2)

— 

— 

76,428 

— 

76,428 

Operating lease obligations

4,728 

9,801 

8,308 

19,415 

42,252 

Outside data processing (3)

6,887 

14,561 

— 

— 

21,448 

George Mason sponsorship (4)

700 

1,400 

1,412 

3,263 

6,775 

LIHTC investments (5)

11,811 

631 

314 

364 

13,120 

Total

$

8,299,790 

$

682,583 

$

288,214 

$

23,042 

$

9,293,629 

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(1)Excludes accrued interest payable as of December 31, 2025.

(2)Borrowed funds represent long-term borrowings.

(3)The Bank has outstanding obligations under its current core data processing contract that expires in June 2029.

(4)The Bank has the option of terminating the George Mason University ("George Mason") agreement at the end of contract year 15 (effective June 30, 2030). Should the Bank elect to exercise its right to terminate the George Mason contract, its contractual obligation would decrease by $3.6 million for the option period (years 16-20).

(5)Low Income Housing Tax Credits ("LIHTC") expected payments for unfunded affordable housing commitments.

The Company is party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers and to reduce its own exposure to fluctuations in interest rates. These financial instruments include commitments to extend credit and standby letters of credit. They involve, to varying degrees, elements of credit risk in excess of the amount recognized in the balance sheets. The contract or notional amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments.

Various commitments to extend credit are made in the normal course of banking business. Letters of credit are also issued for the benefit of customers. These commitments are subject to loan underwriting standards and geographic boundaries consistent with the Company’s loans outstanding.

Unfunded loan commitments are agreements whereby the Bank has made a commitment to lend to a customer as long as there is satisfaction of the terms or conditions established in the contract, and the borrower has accepted the commitment in writing. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee before the commitment period is extended. In many instances, borrowers are required to meet performance milestones in order to draw on a commitment as is the case in construction loans, or to have a required level of collateral in order to draw on a commitment as is the case in asset based lending credit facilities. Collateral obtained varies and may include certificates of deposit, accounts receivable, inventory, property and equipment, residential and CRE. Since commitments may expire without being drawn, the total commitment amount does not necessarily represent future cash requirements.

Unfunded lines of credit are agreements to lend to a customer as long as there is no violation of the terms or conditions established in the contract. Lines of credit generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since lines of credit may expire without being drawn, the total unfunded line of credit amount does not necessarily represent future cash requirements.

Letters of credit include standby and commercial letters of credit. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. Letters of credit are conditional commitments issued by the Bank to guarantee the performance by the Bank's customer to a third party. Standby letters of credit generally become payable upon the failure of the customer to perform according to the terms of the underlying contract with the third party. Standby letters of credit are generally not drawn. Commercial letters of credit are issued specifically to facilitate commerce and typically result in the commitment being drawn when the underlying transaction is consummated between the customer and a third party. The contractual amount of these letters of credit represents the maximum potential future payments guaranteed by the Bank. The Bank has recourse against the customer for any amount it is required to pay to a third party under a letter of credit, and holds cash and or other collateral on those standby letters of credit for which collateral is deemed necessary. As of December 31, 2025, approximately 69% of the dollar amount of standby letters of credit was collateralized.

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

(dollars in thousands)

2025

2024

Unfunded loan commitments

$

1,482,325 

$

1,318,133 

Unfunded lines of credit

79,232 

88,305 

Letters of credit

61,319 

69,051 

Total

$

1,622,876 

$

1,475,489 

Unfunded loan commitments increased by $164.2 million in 2025 compared to 2024, primarily due to new commercial and industrial loans commitments during the year as the Bank advanced its strategic goals.

The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. See "Note 18 – Financial Instruments with Off-Balance Sheet Risk" to the Consolidated Financial Statements for a summary list of loan commitments as of December 31, 2025 and 2024.

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In connection with deposit guarantees, the Bank collateralizes certain public funds using qualified investment securities.

With the exception of these off-balance sheet arrangements, the Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, capital expenditures or capital resources, that is material to investors.

Liquidity Management

Liquidity is a measure of the Company’s and Bank’s ability to meet loan demand and to satisfy depositor withdrawal requirements in an orderly manner. The Bank’s primary sources of liquidity consist of cash and cash balances due from correspondent banks, excess reserves at the Federal Reserve, loan repayments and other short-term investments, maturities and sales of investment securities, income from operations and new core deposits into the Bank. Approximately 53% of the Company's investment portfolio of debt securities is held as available-for-sale which allows flexibility to generate cash from sales as needed to meet ongoing cash needs. These securities can also be utilized as pledged assets that provide secondary liquidity through the form of additional available borrowings. These sources of liquidity are considered primary and are supplemented by the ability of the Company and Bank to borrow funds or issue brokered deposits, which are termed secondary sources of liquidity. Investment securities that are classified as held-to-maturity can also be used as collateral to pledge against additional borrowings.

The Company believes it maintains sufficient primary and secondary sources of liquidity to fund its operations. As of December 31, 2025, primary sources of liquidity were $1.7 billion, comprising interest-bearing deposits with other banks and other short-term investments and unencumbered AFS securities. Secondary sources of liquidity as of December 31, 2025 were $4.4 billion, which included the FHLB unused availability, other insured brokered deposit sweep programs, unpledged HTM securities, federal funds lines, and the FRB Discount Window. As of December 31, 2025, under the Company's liquidity formula, it had $6.1 billion of primary and secondary liquidity sources. Management believes the amount is adequate to meet current and projected funding needs.

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

As of

(dollars in thousands)

December 31, 2025

December 31, 2024

Primary sources of liquidity available:

Cash and cash equivalents(1)

$

695,693 

$

633,480 

Unencumbered AFS securities

973,791 

1,198,616 

Total primary sources of liquidity available

1,669,484 

1,832,096 

Secondary sources of liquidity available:(2)

Unsecured brokered deposits (3)

1,243,267 

1,308,598 

FHLB secured borrowings

1,349,351 

874,270 

FRB:

Discount window secured borrowings

1,373,872 

1,800,646 

Federal funds lines

145,000 

145,000 

Unpledged assets:

Interest-bearing deposits with banks

8,693 

21,406 

Unencumbered HTM securities

315,683 

1,280,156 

Total secondary sources of liquidity available

4,435,866 

5,430,076 

Total liquidity available

$

6,105,350 

$

7,262,172 

(1)Consists of cash and due from banks, interest-bearing deposits with banks, and other short-term investments.

(2)Secondary sources of liquidity in use was $592.1 million as of December 31, 2025 and $1.6 billion as of December 31, 2024.

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

Additionally, the Bank can purchase up to $145.0 million in federal funds on an unsecured basis from its correspondents, against which there were no amounts outstanding as of December 31, 2025 and can borrow

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unsecured funds under one-way CDARS and ICS brokered deposits in the amount of $1.1 billion, against which there was $38 million outstanding as of December 31, 2025. As of December 31, 2025, the Bank also has custodial agreements with various broker-dealers through IntraFi's IND program which provided $386.0 million of brokered deposits.

As of December 31, 2025, the Bank was also eligible to draw advances from the FHLB up to $1.3 billion based on assets pledged as collateral to the FHLB, against which the Bank borrowed none as of December 31, 2025.

The Bank may enter into repurchase agreements with broker-dealers provided adequate collateral exists. The Bank also has a back-up borrowing facility through the Discount Window at the Federal Reserve Bank of Richmond ("Federal Reserve Bank"). This facility, which can be used to borrow up to $1.4 billion, is collateralized with specific loan assets and investment securities pledged to the Federal Reserve Bank. It is anticipated that, except for periodic testing, this facility would be utilized for contingency funding only. There can be no assurance, however, that these alternative sources of liquidity will continue to be available or will be sufficient to meet our ongoing liquidity needs.

The Bank's aggregate borrowing capacity as of December 31, 2025 was $3.0 billion, which consists of $1.3 billion borrowing capacity from FHLB, $1.4 billion borrowing capacity from the Federal Reserve's Discount Window as discussed above, and $315.7 million of unencumbered HTM securities available to pledge to the FHLB or Discount Window.

The loss of deposits, including through disintermediation, is one of the primary risks to liquidity. Disintermediation occurs most commonly when rates rise and depositors withdraw deposits seeking higher rates in alternative savings and investment sources than the Bank may offer. The Bank regularly compares deposit interest rates and makes adjustments from time to time to ensure its interest rate offerings are competitive.

There is a risk that the cost of funds will increase significantly as the Bank competes for deposits or that some deposits would be lost if rates were to increase and the Bank elected not to remain competitive with its deposit rates. Under those conditions, the Bank believes that it is well positioned to use other sources of funds such as FHLB borrowings, brokered deposits, repurchase agreements and federal funds lines of credit to offset a decline in deposits in the short run, but the use of such sources may negatively impact net interest margin and earnings. The continuing elevated cost of funding has negatively impacted our net interest margin.

There can be no assurance that the mix of sources of funds available to us at any particular time in the future will be adequate to meet our future liquidity needs. The market for customer and brokered deposits is highly competitive and the risk of disintermediation is high, particularly in a high interest rate environment. Most of our noninterest-bearing deposits are operating deposits or compensating balances that are held in connection with lending relationships. The potential outflow of such deposits is a risk and may require the Bank to pay competitive rates of interest, which could significantly and negatively impact the Bank’s interest expense and net interest margin. Over the long-term, an adjustment in assets and change in business emphasis could compensate for a potential loss of deposits. The Bank also maintains a marketable investment portfolio to provide flexibility in the event of liquidity needs. The Asset Liability Committee ("ALCO") has adopted policy guidelines, which emphasize the importance of core deposits, adequate asset liquidity and a contingency funding plan.

Capital Resources and Adequacy

The assessment of capital adequacy depends on a number of factors such as asset quality and mix, liquidity, earnings performance, changing competitive conditions and economic forces, stress testing, regulatory measures and policy, as well as the overall level of growth and complexity of the balance sheet. The adequacy of the Company’s current and future capital needs is monitored by management on an ongoing basis. Management seeks to maintain a capital structure that will assure an adequate level of capital to support anticipated asset growth and to absorb potential losses.

The federal banking regulators have issued guidance for those institutions, which are deemed to have concentrations in commercial real estate lending. Pursuant to the supervisory criteria contained in the guidance for identifying institutions with a potential commercial real estate concentration risk, institutions which have total reported loans for construction, land development and other land acquisitions which represent 100% or more of an institution’s total risk-based capital; or total commercial real estate loans representing 300% or more of the institution’s total risk-based capital; or the institution’s commercial real estate loan portfolio has increased 50% or more during the prior 36 months are identified as having potential commercial real estate concentration risk. Institutions which are deemed to have concentrations in commercial real estate lending are expected to employ heightened levels of risk management with respect to their commercial real estate portfolios and may be required to hold higher levels of capital. The Company, like many community banks, has commercial real estate loans. Although

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

Construction, land and land development loans represented 92.1% of total capital as of December 31, 2025, which no longer exceeded the regulatory concentration threshold, compared to 122.6% as of December 31, 2024. As of December 31, 2025 the Company exceeded the total commercial real estate loans threshold as it represented 336.6% of total capital compared to 373.3% as of December 31, 2024. Management has extensive experience in commercial real estate lending, and has implemented and continues to maintain heightened risk management procedures and strong underwriting criteria with respect to its commercial real estate portfolio.

Loan monitoring practices include but are not limited to periodic stress testing analysis to evaluate changes to cash flows, owing to interest rate increases and declines in net operating income. Nevertheless, as our commercial real estate concentration fluctuates each quarter, we may be required to maintain higher levels of capital, which could require us to obtain additional capital and may adversely affect shareholder returns. The Company seeks to manage the risks relating to commercial real estate and its capital adequacy through the development and implementation of its Capital Policy and Capital Plan, the preparation of pro-forma projections including stress testing and the development of internal minimum targets for regulatory capital ratios that are subject to approval by the Board and in excess of well capitalized ratios.

The Company and the Bank are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and prompt corrective action regulations involve quantitative measures of assets, liabilities and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings and other factors and the regulators can lower classifications in certain cases. Failure to meet various capital requirements can initiate regulatory action that could have a direct material effect on the financial statements.

As of December 31, 2025, the capital position of the Company and its wholly owned subsidiary, the Bank, continue to exceed regulatory requirements and well-capitalized guidelines. The primary indicators relied on by bank regulators in measuring the capital position are four ratios as follows: Tier 1 risk-based capital ratio, Total risk-based capital ratio, the Leverage ratio and the CET1 ratio. Tier 1 capital consists of common and qualifying preferred shareholders’ equity less goodwill and other intangibles. Total risk-based capital consists of Tier 1 capital and the qualifying portion of the ACL. Risk-based capital ratios are calculated with reference to risk-weighted assets, which are prescribed by regulation. The measure of Tier 1 capital to average assets for the prior quarter is often referred to as the leverage ratio. The CET1 ratio is the Tier 1 capital ratio but excluding preferred stock.

The Prompt Corrective Action ("PCA") regulations provide five categories, including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized; however, these terms are not used to represent overall financial condition. If a bank is adequately capitalized, regulatory approval is required to, among other things, accept, renew or roll-over brokered deposits. If a bank is undercapitalized, capital distributions and growth and expansion are limited, and plans for capital restoration are required. If a bank is not well-capitalized, interest rate restrictions paid on deposits may apply.

The FRB and the FDIC have adopted the Basel III Rules implementing the Basel Committee on Banking Supervision's capital guidelines for U.S. banks. Under the Basel III Rules, the Company and Bank are required to maintain a CET1 ratio of 4.5% and a capital conservation buffer of 2.5% of risk-weighted assets, effectively resulting in a minimum CET1 ratio of 7.0%; a minimum ratio of Tier 1 capital to risk-weighted assets of 6.0%, or 8.5% with the fully phased in capital conservation buffer; a minimum total capital to risk-weighted assets ratio of 10.5% with the fully phased-in capital conservation buffer; and a minimum leverage ratio of 4.0%. The Basel III Rules also increased risk weights for certain assets and off-balance-sheet exposures. As of December 31, 2025, the Company and the Bank exceeded all these thresholds.

The ability of the Company to continue to grow is dependent on its earnings and those of the Bank, the ability to obtain additional funds for contribution to the Bank’s capital, through additional borrowings, through the sale of additional common stock or preferred stock or through the issuance of additional qualifying capital instruments, such as subordinated debt. The capital levels required to be maintained by the Company and Bank may be impacted as a result of the Bank’s concentrations in commercial real estate loans.

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

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

Company

Bank

Minimum Required

For Capital

Adequacy Purposes (1)

To Be Well

Capitalized

Under Prompt

Corrective Action

Regulations (2)

(dollars in thousands)

Actual

Amount

Ratio

Actual

Amount

Ratio

As of December 31, 2025

CET1 capital (to risk weighted assets)

$

1,170,352 

13.07 

%

$

1,190,094 

13.37 

%

7.00 

%

6.50 

%

Total capital (to risk weighted assets)

1,282,913 

14.33 

%

1,302,018 

14.63 

%

10.50 

%

10.00 

%

Tier 1 capital (to risk weighted assets)

1,170,352 

13.07 

%

1,190,094 

13.37 

%

8.50 

%

8.00 

%

Tier 1 capital (to average assets)

1,170,352 

9.72 

%

1,190,094 

9.92 

%

4.00 

%

5.00 

%

As of December 31, 2024

CET1 capital (to risk weighted assets)

$

1,369,643 

14.63 

%

$

1,373,857 

14.76 

%

7.00 

%

6.50 

%

Total capital (to risk weighted assets)

1,484,420 

15.86 

%

1,488,635 

16.00 

%

10.50 

%

10.00 

%

Tier 1 capital (to risk weighted assets)

1,369,643 

14.63 

%

1,373,857 

14.76 

%

8.50 

%

8.00 

%

Tier 1 capital (to average assets)

1,369,643 

10.74 

%

1,373,857 

10.82 

%

4.00 

%

5.00 

%

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

(2)Applies to the Bank only.

Federal bank and holding company regulations, as well as Maryland law, impose certain restrictions on capital distributions, including dividend payments and share repurchases by the Bank, as well as restricting extensions of credit and transfers of assets between the Bank and the Company. The Company announced a regular quarterly cash dividend on January 21, 2026 of $0.01 per share to shareholders of record on February 2, 2026, paid on February 13, 2026. The quarterly cash dividend amount was reduced to $0.01 in the fourth quarter of 2025 to preserve capital as the Company addresses asset quality matters.

Impact of Inflation and Changing Prices

The Consolidated Financial Statements and Notes thereto have been prepared in accordance with GAAP, which require the measurement of financial position and operating results in terms of historical dollars without considering the changes in the relative purchasing power of money over time due to inflation. The impact of inflation is reflected in the increased cost of operations. Unlike most industrial companies, nearly all of our assets and liabilities are monetary in nature. As a result, interest rates have a greater impact on our performance than do the effects of general levels of inflation. Interest rates do not necessarily move in the same direction or to the same extent as the price of goods or services.

New Authoritative Accounting Guidance

Refer to "Note 1 – Summary of Significant Accounting Policies" for New Authoritative Accounting Guidance and their expected impact on the Company’s Financial Statements.