EAGLE BANCORP INC

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.

The Company believes it maintains sufficient primary and secondary sources of liquidity to fund its operations. As of September 30, 2026, primary sources of liquidity were $2.1 billion, comprising interest-bearing deposits with other banks and other short-term investments and unencumbered securities. Secondary sources of liquidity as of September 30, 2026 were $2.6 billion, which included the FHLB and FRB unused availability. As of September 30, 2026, under the Company's liquidity formula, it had $4.7 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.

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

(2)Reduced by $151.6 million as of September 30, 2026 and $12.4 million as of December 31, 2025, respectively, due to the issuance of letters of credit.

As of September 30, 2026, the Bank was eligible to draw advances from the FHLB up to $1.5 billion based on assets pledged as collateral to the FHLB, against which the Bank has no borrowings as of September 30, 2026.

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 $1.2 billion, is collateralized with specific loan assets 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 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. Funding costs remain elevated relative to periods preceding the current rate cycle; however, they declined year over year and contributed to the increase in 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.