EAGLE BANCORP INC

Overview

Total assets as of March 31, 2025 were $11.3 billion as compared to $11.1 billion as of December 31, 2024, a 2% increase. The increase in total assets from December 31, 2024 to March 31, 2025 was primarily driven by an increase in BOLI asset due to additional insurance coverage purchased in the current period. See "Other Earnings Assets" section below for further discussion on BOLI.

Total loans held for investment at amortized cost basis, the largest component of assets, were approximately $7.94 billion as of March 31, 2025, and remained relatively flat as compared to $7.93 billion as of December 31, 2024. There was $15.3 million in loans held for sale as of March 31, 2025 and none as of December 31, 2024. Refer to the "Loan Portfolio" section below for further discussion on loans.

Investment securities, at amortized cost net of the allowance for credit losses, were $2.25 billion as of March 31, 2025 as compared to $2.35 billion as of December 31, 2024, a $93.0 million or 4% decrease. This decrease was primarily driven by maturities and paydowns of investment securities.

In terms of funding, total deposits as of March 31, 2025 were $9.3 billion as compared to $9.1 billion as of December 31, 2024, an increase of 2%. Total borrowed funds (excluding customer repurchase agreements) were $566.2 million and $566.1 million as of March 31, 2025 and December 31, 2024, respectively. The components and drivers of the change are discussed in the "Deposits and Other Borrowings" section below.

Total shareholders’ equity as of March 31, 2025 was $1.24 billion as compared to $1.23 billion as of December 31, 2024, a 2% increase. The increase in shareholders’ equity in 2025 was primarily from the net income from operations, partially offset by payment of cash dividends. The ratio of common equity to total assets was 11.00% as of March 31, 2025 as compared to 11.02% as of December 31, 2024. Book value per share was $40.99 as of March 31, 2025, a 1.0% increase over $40.60 as of December 31, 2024.

In addition, the tangible common equity ratio was 11.00% as of March 31, 2025, compared to 11.02% as of December 31, 2024. Tangible book value per share was $40.99 as of March 31, 2025, a 1.0% increase from $40.59 as of December 31, 2024. Refer to the "Use of Non-GAAP Financial Measures" section for additional detail and a reconciliation of GAAP to non-GAAP financial measures.

In order to be considered well-capitalized, the Bank must have a 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 exceed all these requirements and satisfy the capital conservation buffer of 2.5% of CET1 capital. 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 15.86% as of March 31, 2025 and December 31, 2024. The common equity tier one capital ("CET1") risk based capital ratio was 14.61% as of March 31, 2025, as compared to 14.63% as of December 31, 2024. The tier 1 risk based capital ratio was 14.61% as of March 31, 2025, as compared to 14.63% as of December 31, 2024. The tier 1 leverage ratio was 11.11% as of March 31, 2025, as compared to 10.74% as of December 31, 2024.

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 have been significant factors in growing the loan portfolio and meeting the lending needs in the markets served, while maintaining sound asset quality.

Loans outstanding were $7.94 billion as of March 31, 2025, as compared to $7.93 billion as of December 31, 2024, an increase of $8.4 million or 0.1%. The loan portfolio mix continues to evolve as the Bank has experienced a reduction in commercial loans and owner-occupied construction loans, offset by increases in owner-occupied commercial real estate loans and fundings of ongoing construction projects for commercial and residential properties. Market rates year to date in 2025 for our new loan originations on average have been fairly consistent with the market rates at the end of 2024, since short-term interest rates remained unchanged in the first quarter of 2025. We continue to see opportunities for growth in the commercial lending market in our focused sectors; our processes for evaluating these opportunities are designed to ensure they are subject to reasonable underwriting standards, including appropriate collateral and 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 to mitigate credit loss in the event of default.

The Bank has a large portion of its loan portfolio related to real estate, with 83% consisting of commercial real estate and real estate construction loans as of March 31, 2025. Non-owner occupied commercial real estate represented 64% of the loan portfolio while the remaining 19% is represented by the "owner occupied-commercial real estate" and "construction–C&I (owner occupied)" loans.

Loans, net of amortized deferred fees and costs, as of March 31, 2025 and December 31, 2024 by major category are summarized below.

(1)Excludes accrued interest receivable of $41.9 million and $42.9 million as of March 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 made 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 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 comprise Frederick, Prince George's and Montgomery counties and "Northern Virginia," which comprises Alexandria, Arlington, Falls Church, Fairfax, Loudoun and Prince William counties. As of March 31, 2025, 31.1%, 26.9%, 23.1%, 6.1%, and 12.8% of the loan portfolio, as a percentage of total amortized cost, was concentrated in Washington D.C., Washington's Maryland Suburbs, Northern Virginia, other counties in Maryland and other locations in the United States, respectively. As of December 31, 2024, 31.3%, 27.4%, 23.9%, 5.8% and 11.6% of the loan portfolio, as a percentage of total amortized cost, was concentrated in Washington D.C., Washington's Maryland Suburbs, Northern Virginia, other counties in Maryland and other locations in the United States, respectively. While we remain cautious with regard to CRE market conditions, principally office, the strength of the Washington D.C. metro area in certain sectors, particularly multi-family commercial real estate and the housing market, continue to drive premiums for well-located properties.

As part of its lending strategy, the Company maintains a substantial portfolio of CRE loans, with $6.5 billion and $6.5 billion, or 81.8% and 81.5% of total loans, of amortized cost outstanding as of March 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 $847.7 million and $862.2 million, or 10.7% and 10.9% of total loans, as of March 31, 2025 and December 31, 2024, respectively.

Office loans within Washington D.C., Washington's Maryland Suburbs and Northern Virginia were $792.9 million and $795.0 million, or 10.0% and 10.0% of total loans, as of March 31, 2025 and December 31, 2024, respectively. As a percentage of total principal balance of income producing - CRE office loans, 39.0%, 35.4%, 15.1%, and 10.5% were located in Washington's Maryland Suburbs, Northern Virginia, the central business district of Washington D.C., and Washington, D.C. (outside the central business district,) respectively, as of March 31, 2025.

The following table summarizes the Company's income producing - commercial real estate loans, at principal, by collateral location and type, as of March 31, 2025:

As of March 31, 2025 and December 31, 2024, $302.0 million and $287.0 million, respectively, of principal of CRE loans collateralized by office properties were criticized or classified.

The Company is exploring ways to optimize its balance sheet to reduce the Company’s commercial real estate loan concentration, including ways to reduce exposure to short- and intermediate-term valuation risks for its office loans. There is no assurance that the Company will decide to seek to implement, or ultimately implement, any balance sheet optimization strategy, and any strategy the Company decides to pursue may not be successful. In addition, future decisions the Company makes in connection with its balance sheet optimization efforts could result in higher credit costs and could also have a material impact on our financial condition and results of operations in the period or periods any relevant decisions are made or strategies implemented.

Loan Maturity

The following table sets forth the time to contractual maturity of the loan portfolio as of March 31, 2025. 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.

(1)Income producing CRE office loans with total principal of $849.3 million and multifamily loans with total principal of $837.0 million as of March 31, 2025 are included within income producing - commercial real estate. The charts below represent their maturities schedules.

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 to the Consolidated Financial Statements and activity in the ACL is contained in Note 4 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 the discussion under the caption “Provision for Credit Losses” above for a discussion of the Company's calculation of the provision for credit losses during the three months ended March 31, 2025 and 2024.

The ACL for loans as of March 31, 2025 was $129.5 million, which reflected a $15.1 million increase from $114.4 million as of December 31, 2024, reflecting a provision for credit losses of $26.3 million and $11.2 million in net charge-offs during the three months ended March 31, 2025. Net charge-offs of $11.2 million during three months ended March 31, 2025 represented 0.57% of average loans held for investment, a decrease from net charge-offs of $21.4 million during same period in 2024, which represented 1.07% of average loans held for investment. Net charge-offs during the three months ended March 31, 2025, included $11.0 million of charge offs on three CRE office lending relationships. The ACL represented 1.63% of total loans as of March 31, 2025 as compared to 1.44% as of December 31, 2024. As of March 31, 2025, the allowance represented 65% of nonperforming loans as compared to 55% as of December 31, 2024.

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.

The Company believes it has taken a prudent posture with respect to risk rating its loan portfolio. As of March 31, 2025 and December 31, 2024, loans rated special mention had an amortized cost of $272.9 million and $244.8 million, respectively, and loans rated substandard had an amortized cost of $501.6 million and $426.4 million, respectively. The increase in special mention loans was primarily attributable to additions in C&I loans and income producing - commercial real estate and commercial loans. The increases in substandard loans were primarily attributable to additions in CRE loans, particularly in income producing - commercial real estate and owner-occupied - commercial real estate loans. As of March 31, 2025, 100% and 51% of special mention and substandard loans, respectively, were current. 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.

Management, being aware of the loan growth experienced by the Bank and the risks facing CRE, is intent on maintaining strong portfolio management and a strong risk rating process. The Bank provides 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 CRE and construction loans (including those collateralized by office properties). These analyses include stress testing. 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.

As of March 31, 2025 and December 31, 2024, 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 5.78% and 3.81%, respectively.

The following table sets forth activity in the allowance for credit losses:

The following table reflects the allocation of the ACL as of March 31, 2025 and December 31, 2024 by loan category and the percentage of allowance in each category. The allocation of the allowance as of March 31, 2025 includes allowance for credit losses of $16.9 million against individually assessed loans of $201.0 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. 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.

Nonperforming Assets

The Company’s level of nonperforming assets, which is comprised of the amortized cost of loans delinquent 90 days or more, and nonaccrual loans, which includes the nonperforming portion of loan modifications, and the carrying value of other real estate owned ("OREO") totaled $202.9 million as of March 31, 2025, representing 1.79% of total assets, as compared to $211.4 million as of December 31, 2024, representing 1.90% of total assets. The decrease is primarily due to the changes in nonperforming loans discussed below.

The Company had no accruing loans that were 90 days or more past due as of March 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 1.63% of total loans as of March 31, 2025, is adequate to absorb expected credit losses within the loan portfolio at that date.

Total nonperforming loans had an amortized cost of $200.4 million as of March 31, 2025, representing 2.52% of total loans, compared to $208.7 million as of December 31, 2024, representing 2.63% of total loans. The decrease was primarily from the charge offs on two income-producing commercial real estate loans and one owner-occupied commercial real estate loan.

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, 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 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, all appraisals associated with individually assessed loans are updated on a not less than annual basis.

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 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 three months ended March 31, 2025, the Bank modified 7 loans with a total amortized cost of $83.0 million as of March 31, 2025 (1.0% of the loan portfolio). These loans received extended loan terms of between approximately sevento twenty-one months.

As of March 31, 2025, the payment status of four loans modified in the preceding twelve months, totaling $95.0 million of amortized cost basis, included two loans with an amortized cost basis of $10.6 million which were 30 to 89 days past due, and the other two loans with a total amortized cost basis of $84.4 million which were on nonaccrual status. As of March 31, 2025, additional loans that were modified in the preceding twelve months which were performing under their modified terms totaled $228.9 million of amortized cost basis.

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, as circumstances may warrant, and therefore, such modifications are not considered to be loan restructurings to a borrower experiencing financial difficulty, as the accommodation of a borrower's request does not rise to the level of a concession if the modified transaction is at market rates and terms and/or the borrower is 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 March 31, 2025 is OREO of $2.5 million, consisting of five 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.

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 would obtain 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 two OREO sales in three months ended March 31, 2025 and two in three months ended March 31, 2024, generating proceeds of $772 thousand and $656 thousand, respectively.

The following table shows 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, at the dates indicated:

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 March 31, 2025, there were $501.6 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 Bank-Owned Life Insurance ("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 March 31, 2025, the cash surrender value of BOLI totaled $320.1 million, compared to $115.8 million as of December 31, 2024. The increase reflects earnings on the policies as well as additional BOLI purchased through premium payments made in the first quarter of 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 and 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 regularly utilizes alternative funding sources such as secured borrowings from the FHLB, federal funds purchased lines of credit from correspondent banks and brokered deposits.

For the three months ended March 31, 2025, deposits were $9.3 billion as compared to $9.1 billion as of December 31, 2024, an increase of 2%. The increase was primarily attributable to a $408.1 million increase in interest bearing time deposits, partially offset by a $285.1 million reduction in interest bearing transaction deposits. These deposit changes were the result of growth in time deposits from the company's digital acquisition channel.

Noninterest bearing deposits increased $63.4 million or 4% to $1.6 billion as of March 31, 2025 as compared to $1.5 billion as of December 31, 2024, while interest bearing deposits decreased by $325.4 million, or 7%. Within interest bearing deposits, money market and savings accounts collectively amounted to $3.56 billion as of March 31, 2025, or 38% of total deposits, as compared to $3.60 billion, or 39% of total deposits, as of December 31, 2024, a decrease of $40.3 million, or 1%.

No single depositor represented more than 10% of total deposits as of March 31, 2025. The ten largest depositors not associated with brokered pass-through relationships represented approximately 18% of total deposits in the aggregate as of March 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 compared to average deposit balances.

The Bank accepts brokered time deposits, generally in denominations of less than $250 thousand, from a regional brokerage firm and other national brokerage networks, including IntraFi Network, LLC ("IntraFi"). Additionally, the Bank participates in the CDARS and the ICS products, which provide for reciprocal (“two-way”) transactions among banks facilitated by IntraFi for the purpose of maximizing 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 March 31, 2025, the Bank sold de minimis deposits through the IntraFi One-Way Sale network. The total of reciprocal deposits as of March 31, 2025 was $1.2 billion (13% 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 obtain one way CDARS deposits and participates in IntraFi’s Insured Network Deposit Program, (“IND”). The Bank had $872.1 million and $894.7 million of IND brokered deposits as of March 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.

We have used brokered deposits and intend to continue to use brokered deposits as one of our funding sources to support future growth. As of March 31, 2025, total brokered deposits were $3.8 billion, or 41.4% 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 $2.3 billion and $2.7 billion, and time deposits of $1.4 billion and $1.3 billion as of March 31, 2025 and December 31, 2024, respectively. The Company uses the Call Report definitions for regulatory reporting by the Bank to classify its deposits as brokered deposits. As of March 31, 2025 and December 31, 2024, total deposits included estimated totals of $2.4 billion and $2.2 billion of uninsured deposits, which represented 25% and 24% of total deposits, respectively.

As an enhancement to the basic noninterest bearing demand deposit account, the Company offers a sweep account, or “customer repurchase agreement,” allowing qualifying businesses to earn interest on short-term excess funds, which are not suited for either a certificate of deposit or a money market account. The balances in these accounts were $32.4 million as of March 31, 2025 compared to $33.2 million as of December 31, 2024. Customer repurchase agreements are not deposits and are not insured by the FDIC, but are collateralized by U.S. agency securities and/or U.S. agency backed MBS.

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

As of March 31, 2025 and December 31, 2024, the Company had outstanding balances of $490.0 million of FHLB advances. 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 March 31, 2025, the carrying value of these 2029 Senior Notes was $76.2 million which reflected $1.5 million in unamortized deferred financing costs that are being amortized over the life of the 2029 Senior Notes.

In connection with the issuance of the 2029 Senior Notes, the Company also entered into a registration rights agreement dated September 30, 2024 with the purchasers of the 2029 Senior Notes (the “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 (the "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.