EAGLE BANCORP INC

Summary of Consolidated Statements of Operations

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.

The efficiency ratio, which measures the ratio of noninterest expense to total net revenue (the sum of net interest income and noninterest income), was 58.6% and 60.1%, respectively, for three and six months ended June 30, 2025 compared to 191.0% and 120.3% for the same periods in 2024. The improvement over the 2024 efficiency ratios was primarily driven by the recognition of goodwill impairment of $104.2 million during the second quarter of 2024.

Loans, which generally have higher yields than securities and other earning assets, represented 69% and 66% of average earning assets for six months ended June 30, 2025 and 2024, respectively. For six months ended June 30, 2025, as compared to the same period in 2024, average loans, excluding loans held for sale, decreased by $58 million, or 1%, driven by payoffs and paydowns that outpaced originations and advances.

Average investment securities for six months ended June 30, 2025 were 19.1% of average earning assets compared to 20.6% for the same period in 2024. The combination of federal funds sold and interest-bearing deposits with other banks represented 12.0% and 13.7% of average earning assets for six months ended June 30, 2025 and 2024, respectively.

Net interest margin, which measures the difference between interest income and interest expense as a percentage of earning assets, was 2.37% and 2.33% for the three and six months ended June 30, 2025 compared to 2.40% and 2.42% for the same periods in 2024, a decrease of 3 and 9 basis points, respectively. For further information on the components and drivers of these changes, see the "Net Interest Income and Net Interest Margin" section below.

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 47

Table of Contents Management's Discussion and Analysis | Results of Operations |

The ratio of common equity to total assets increased to 11.18% as of June 30, 2025, compared to 11.02% as of December 31, 2024. For three and six months ended June 30, 2025, the return on average assets ("ROAA") was (2.33)% and (1.14)%, respectively, as compared to (2.73)% and (1.35)% for the same periods in 2024. Total shareholders’ equity was $1.19 billion as of June 30, 2025 as compared to $1.23 billion as of December 31, 2024, a decrease of 3%, driven by losses in the second quarter of 2025. The return on average common equity ("ROACE") for three and six months ended June 30, 2025 was (22.35)% and (11.01)% respectively, as compared to (26.67)% and (13.25)% for the same periods in 2024.

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.

Net interest income for the three months ended June 30, 2025 was $67.8 million compared to $71.4 million for the same period in 2024. The 5% decrease for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024 was primarily due to an increase in average deposits ($8.3 billion compared to $7.2 billion, respectively,) offset by a decrease in average deposit rates (3.80% compared to 4.31%, respectively,) a decrease in the level of other short term borrowings ($245.3 million compared to $1.7 billion, respectively) and a decrease in the interest rate paid on other short-term borrowings (3.86% compared to 5.07%, respectively.) Additionally, average loan balances ($7.9 billion compared to $8.0 billion, respectively) and yields (6.31% compared to 6.91%, respectively) were lower.

Net interest margin had a decrease of 3 basis points to 2.37% for the three months ended June 30, 2025 from 2.40% for the three months ended June 30, 2024. This decrease reflects the decrease in deposits and related cost of funds and the decrease in the yield on loans. The cost of funds on interest-bearing liabilities had a decrease of 44 basis points from 3.61% for the three months ended June 30, 2024 to 3.17% for the three months ended June 30, 2025, while the yield on interest-earning assets had an decrease of 42 basis points from 5.71% for the three months ended June 30, 2024 to 5.29% for the three months ended June 30, 2025.

Net interest income for the six months ended June 30, 2025 was $133.4 million compared to $146.1 million for the same period in 2024. The 9% decrease for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 was primarily due to an increase in average deposits ($8.2 billion compared to $7.3 billion, respectively,) offset by a decrease in average deposit rates (3.86% compared to 4.30%, respectively,) a decrease in the level of other short term borrowings ($446 million compared to $1.7 billion, respectively) and a decrease in the interest rate paid on other short-term borrowings (4.87% compared to 4.90%, respectively.) Additionally, average loan balances ($7.9 billion compared to $8.0 billion, respectively) and yields (6.38% compared to 6.93%, respectively) were lower.

Net interest margin had a decrease of 9 basis points to 2.33% for the six months ended June 30, 2025 from 2.42% for the six months ended June 30, 2024. This decrease reflects a decrease in the yield on loans, partially offset by the decreased cost of funds for deposits. The cost of funds on interest-bearing liabilities decreased by 34 basis points from 3.60% for the six months ended June 30, 2024 to 3.26% for the six months ended June 30, 2025, while the yield on interest-earning assets had a decrease of 37 basis points from 5.71% for the six months ended June 30, 2024 to 5.34% for the six months ended June 30, 2025.

Average loans held for investment were $7.9 billion for the six months ended June 30, 2025, compared to $8.0 billion for the same period in 2024. Average investment securities were $2.2 billion for the six months ended June 30, 2025, compared to $2.5 billion for the same period in 2024. Average interest-bearing deposits with other banks and other short term investments were $1.4 billion for the six months ended June 30, 2025 compared to $1.6 billion for the same period in 2024. Interest income on loans, the largest component of interest income on earning assets, had a yield of 6.38% for the six months ended June 30, 2025, compared to 6.93% for the same period in 2024, a decrease of 55 basis points.

Average interest-bearing deposits increased to $8.2 billion for the six months ended June 30, 2025 from $7.3 billion for the six months ended June 30, 2024, while average noninterest-bearing demand deposit decreased to $1.9 billion for the six months ended June 30, 2025 from $2.1 billion for the six months ended June 30, 2024.

Average borrowings had a decrease from $1.7 billion for the six months ended June 30, 2024 to $521.8 million for the six months ended June 30, 2025. Refer to the "Deposits and Other Borrowings" section below for further discussion of deposits and borrowings.

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 48

The tables below present 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.

Consolidated Average Balances, Interest Yields And Rates (Unaudited)

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 49

Consolidated Average Balances, Interest Yields And Rates (Unaudited)

(1)Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $3.6 million and $7.4 million for the three and six months ended 2025, respectively, and $4.8 million and $9.1 million for the three and six months ended 2024, respectively.

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

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 50

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.

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.

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.

The provision for credit losses on loans for the second quarter of 2025 was $138.2 million and there were $83.9 million of net charge offs in the ACL compared to $8.9 million and $2.3 million, respectively, for the second quarter of 2024.

The provision for credit losses on loans for the first half of 2025 was $164.5 million and there were $95.1 million of net charge offs in the ACL compared to $44.1 million and $23.7 million, respectively, for the first half of 2024. Net charge-offs of $95.1 million during the first half of 2025 represented 2.40% of average loans held for investment on an annualized basis, an increase from net charge-offs of $23.7 million during same period in 2024, which represented 0.59% of average loans held for investment on an annualized basis.

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 51

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

The change in the provision for credit losses on the loan portfolio for the three and six months ended June 30, 2025 was primarily attributable to the replenishment of the reserve following net charge-offs of $95.1 million and an increase in the qualitative overlay.

Charge-offs during the first half of 2025 were driven by elevated losses in the office and land loan portfolios, including a data center loan with underlying office exposure, as well as charge-offs related to assisted senior living and life sciences office properties. The increase in charge-offs was primarily driven by continued market deterioration and the receipt of new information regarding collateral valuations and borrower performance, particularly within the office sector. During the second quarter of 2025, we updated our strategy for resolving criticized and classified loans with the goal of accelerating dispositions. In furtherance of this strategy, we obtained updated valuations on the underlying collateral for certain loans that resulted in significant charge offs related to actual and expected dispositions.

The increase in the CRE office overlay relates to updated assumptions associated with the PD and LGD rates, as well as downward risk ratings migration as further discussed in the "Allowance for Credit Losses" section below.

The provision for credit losses for the held-to-maturity securities portfolio was recorded primarily on several corporate bonds. During the three and six months ended June 30, 2025, there was a reversal of provision for credit losses of $46 thousand and $99 thousand, respectively, for the held-to-maturity securities portfolios, compared to a provision expense of $55 thousand and $56 thousand, respectively, for the three and six months ended June 30, 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. There was a provision expense of $1.8 million and $1.5 million, respectively, for the three and six months ended June 30, 2025, compared to $608 thousand and $1.1 million, respectively, for the three and six months ended June 30, 2024, primarily due to higher unfunded commitments in our commercial and industrial portfolio during the current period.

Noninterest Income

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

The increase in total noninterest income in the second quarter of 2025 compared to the second quarter of 2024 was primarily driven by continued non-interest income from a new BOLI investment of $200 million made in the first quarter of 2025, partially offset by $1.9 million loss on the sale of investment securities during the second quarter of 2025 and a reduction in other income primarily due to lower gains from the sale of mortgage servicing rights compared to 2024.

The increase in total noninterest income in the first half of 2025 as compared to the first half of 2024 was primarily driven by a new BOLI investment of $200 million in the first half of 2025, partially offset by $1.9 million loss on the sale of investment securities during the first half of 2025.

Eagle Bancorp, Inc Second Quarter 2025 Form 10-Q 52

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

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.

The decrease in total noninterest expense in the second quarter of 2025, as compared to the second quarter of 2024, was primarily due to the $104.2 million goodwill impairment recorded in the second quarter of 2024 and a $1.2 million decrease in legal, accounting and professional fees in the current period, offset by $2.2 million higher FDIC deposit insurance assessments. The decrease in total noninterest expense in the first half of 2025 as compared to the first half of 2024 was primarily due to the $104.2 million 2024 goodwill impairment, partially offset by $4.7 million higher FDIC deposit insurance assessments and $1.5 million higher data processing costs during the first half of 2025.

The major components of other expenses include regulatory assessment fees, director compensation, real estate taxes, and insurance expenses.

As a percentage of average assets, total noninterest expense (annualized) was 1.45% and 1.48% for the three and six months ended June 30, 2025 as compared to 4.8% and 3.0% for the same period in 2024. These decreases for the three and six months ended June 30, 2025 as compared to the same period 2024 were primarily due to no goodwill impairment during the current period, partially offset by an increase in FDIC deposit insurance assessments.

Income Tax Expense

For the three and six months ended June 30, 2025, income tax benefit was $39.4 million and $38.7 million, respectively, compared to income tax expense of $4.4 million and $7.4 million for the three and six months ended June 30, 2024, respectively. The decrease in the income tax expense comparing to prior year was primarily due to a decrease in the pre-tax income during the first half of 2025, and the 2024 goodwill impairment that was not deductible for tax purposes.

The effective tax rate for the three and six months ended June 30, 2025 was 36.1% and 36.2%, respectively. The effective tax rate for the first half of 2025 varies from the 21% statutory rate primarily due to the tax benefit from the 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.

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