EGBN

EAGLE BANCORP INC

NASDAQ · FINANCIALS · STATE COMMERCIAL BANKS

33.29

−0.39 −1.16%

USD · close Oct 26

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MKT CAP $1BP/E —DIV YIELD 0.60%FCF YIELD 5.21%REV TTM —NET INCOME −$48.3MNET CASH $559.4M52W 15.80 – 33.68SEC XBRL · TTM TO Invalid Date

How EGBN rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

34%

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Added

415

new sentences

Dropped

445

sentences removed

Length

−706

words, now 36,247

New in FY2025

Our rate risk modeling showed minimal net interest margin expansion in an increased interest rate environment while showing moderate net interest margin compression in a declining interest rate environment.
The model's prediction in a rising rate environment is the result of increases in both interest income on variable and adjustable rate loans and interest expense on its deposit liabilities, based on our funding needs, market conditions and certain contractual obligations but with no changes in the mix of assets or liabilities or the spreads we are able to earn.
The opposite is true in a falling interest rate environment as decreases in both interest income on variable and adjustable rate loans and interest expense on deposit liabilities drive modest margin compression.
The model also assumes a stable interest rate environment after the programmed changes in the yields, which assumes repricing of assets and liabilities as scheduled in a stable environment, which may be quite different than real world conditions.
For the analysis presented below, as of December 31, 2025, the change in interest rates on interest-bearing deposits was less than the change in market interest rates with a floor of 0 basis points.
The Bank also has deposits with contractual rate terms that mean these deposits will change 100 basis points for every 100 basis points change in market rates.
Thus, the overall measure of the correlation between all deposit costs and market rate changes is less than 100%.
The Company previously utilized the assumption for its analysis as of December 31, 2024 that all deposit rates changed 100 basis point for a 100 basis point change in market rates.
As quantified in the table below, the Company’s analysis as of December 31, 2025 shows the effect on net interest income over the next 12 months, as well as the effect on the economic value of equity when interest rates are shocked up and down 100, 200, 300 and 400 basis points.
As of December 31, 2025, the repricing duration of (a) the investment portfolio was 3.8 years, (b) the loan portfolio 0.8 years, (c) the interest-bearing deposit portfolio was 1.2 years, and (d) the borrowed funds portfolio was 3.1 years.
Management's Discussion and Analysis | Quantitative and Qualitative Disclosures About Market Risk The table below displays the result of the simulation analysis on the asset and liability balances.
As of December 31, 2025 Net Interest Income Economic Value of Equity Change in interest rates (basis points) Percentage change in 12-month Policy limits Percentage change in 12-month Policy limits +400 1.7% (25)% 4.1% (32)% +300 1.1% (20)% 3.1% (25)% +200 0.6% (15)% 2.1% (20)% +100 0.2% (8)% 1.1% (10)% — — — — — (100) (2.4)% (8)% (1.9)% (10)% (200) (5.6)% (15)% (4.2)% (20)% (300) (9.0)% (20)% (7.7)% (25)% (400) (10.4)% (25)% (15.3)% (32)% The decrease in 12-month net interest income of 2.4% given a 100 basis point decrease in market interest rates as of December 31, 2025 compared to a increase of 0.9% for the same period in 2024.
In contrast to 2024, primarily due to modeling enhancements and balance sheet composition changes, our analysis shows that we will experience an increase in our economic value of equity and in net interest income with an increase in interest rates.
The changes in net interest income and the economic value of equity in higher, and lower, interest rate shock scenarios as of December 31, 2025 are not believed to be excessive and are within policy limits.
As part of the Company’s ongoing enhancement of the simulation analysis, the Company has been making updates to its model to incorporate, among other things, improvements to certain assumptions, as well as assumptions related to deposits.
The difference in the results of the simulation analysis between the fourth quarter of 2025 and the third quarter of 2025 is attributable to these model updates.
Certain shortcomings are inherent in the method of analysis presented in the foregoing table.
Further, the earnings simulation model does not take into account factors such as future balance sheet growth, changes in product mix, changes in yield curve relationships, the various rate indexes do not move in parallel (e.g., SOFR, Fed Funds), hedging activities we might take and changing product spreads that could mitigate or exacerbate any potential beneficial or adverse impact of changes in interest rates.
Another key factor to consider is the behavior of our deposit portfolio.
In higher rate scenarios, any customer activity resulting in the replacement of low-cost or noninterest-bearing deposits with higher cost deposits or market-based funding would reduce the assumed benefit of those deposits.
The projected impact on net interest income in the table above also assumes a static non-maturity deposit beta which may not be an accurate predictor of actual deposit rate changes realized in scenarios of smaller and/or non-parallel interest rate movements.
Management's Discussion and Analysis | Quantitative and Qualitative Disclosures About Market Risk Each of the above analyses may not, on its own, be an accurate indicator of how our net interest income or economic value of equity will be affected by current and future changes in interest rates.
Interest Rate and Balance Sheet Risk Management Management actively monitors the Company’s exposure to interest rate risk arising from the composition and duration profile of its balance sheet.
Our objective is to maintain a stable and predictable earnings and capital profile by mitigating the impact of interest‑rate volatility on both net interest income and the economic value of equity.
Consistent with this objective, the Company employs a macro balance sheet hedging program designed to manage interest rate risk at the portfolio level rather than through instrument‑specific hedges.
In 2025, the Company reinitiated the use of derivative instruments to hedge macro interest rate risk.
This decision reflects management’s reassessment of the Company’s asset‑liability profile.
Management determined that reestablishing a macro hedging program was prudent to mitigate potential variability in earnings and capital arising from interest‑rate movements.
Hedging Strategy and Risk Management Framework Our macro hedging approach incorporates derivatives — primarily interest rate swaps — to align the interest‑rate sensitivity of assets and liabilities with the Company’s risk appetite.
Macro hedging enables management to address exposures that evolve dynamically as new assets and liabilities are originated and existing positions mature, consistent with regulatory expectations that hedging strategies reflect material trends and uncertainties affecting future performance.
GAAP, the Company applies the hedge accounting framework under ASC 815, as amended by ASU 2017‑12, which expands the range of permissible hedging strategies and enhances the alignment between accounting outcomes and risk management activities.
The Company designates qualifying hedges where appropriate and evaluates hedge effectiveness in accordance with ASC 815’s criteria.
Refer to "Note 8 – Derivatives and Hedging Activities" to the Consolidated Financial Statements for further discussion on the Company's derivative instruments and hedging activities.
Financial Statements and Supplementary Data ITEM 8.
(the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements").
We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework: (2013) issued by COSO.
A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable Report of Independent Registered Public Accounting Firm assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

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Gone since FY2024

The data is then subjected to a “shock test” which assumes a simultaneous change in interest rates up 100, 200, 300 and 400 basis points or down 100, 200 and 300 basis points, along the entire yield curve, but not below zero.
The results are analyzed as to the impact on net interest income, net income and the market equity over the next twelve and twenty-four month periods from December 31, 2024.
In addition to analysis of simultaneous changes in interest rates along the yield curve, an analysis of changes based on interest rate “ramps” is also performed.
Such analysis represents the impact of a more gradual change in interest rates, as well as yield curve shape changes.
For the analysis presented below, at December 31, 2024, the simulation assumes a 100 basis point change in interest rates on interest bearing deposits for each 100 basis point change in market interest rates in a decreasing interest rate shock scenario with a floor of 10 basis points and assumes a 100 basis point change in interest rates on interest bearing deposits for each 100 basis point change in market interest rates in an increasing interest rate shock scenario.
The Bank does have deposits with contractual rate terms which means these deposits will change 100 basis points for every 100 basis points change in market rates.
Thus, the overall measure of the correlation between deposit costs and market rate changes is modeled at 100%.
The Company utilized the same assumptions for its analysis at December 31, 2023.
As quantified in the table below, the Company’s analysis at December 31, 2024 shows a moderate effect on net interest income over the next 12 months, as well as a moderate effect on the economic value of equity when interest rates are shocked down 100, 200 and 300 basis points and up 100, 200, 300 and 400 basis points.
This moderate impact is due substantially to the significant level of variable rate and repriceable assets and liabilities and related shorter relative durations.
At December 31, 2024, the repricing duration of (a) the investment portfolio was 4.2 years, (b) the loan portfolio 0.9 years, (c) the interest bearing deposit portfolio was 0.2 years, and (d) the borrowed funds portfolio was 0.5 years.
The following table reflects the result of the simulation analysis on the December 31, 2024 asset and liability balances: Change in interest rates (basis points) Percentage change in 12-month net interest income Percentage change in 12-month net income Percentage change in economic value of equity +400 (2.9)% (6.3)% (14.1)% +300 (2.2)% (4.8)% (11.0)% +200 (1.5)% (3.3)% (7.6)% +100 (0.7)% (1.5)% (3.9)% — — — — (100) 0.9% 2.0% 5.0% (200) 1.7% 3.8% 9.6% (300) 0.3% 0.5% 10.9% The results of the simulation are within the relevant policy limits adopted by the Company for percentage change in net interest income.
For net interest income, the Company has adopted a policy limit of -10% for a 100 basis point change, -12% for a 200 basis point change, -18% for a 300 basis point change and -24% for a 400 basis point change.
For the economic value of equity, the Company has adopted a policy limit of -12% for a 100 basis point change, -15% for a 200 basis point change, -25% for a 300 basis point change and -30% for a 400 basis point change.
The increase in 12-month net interest income and net income of 0.9% and 2.0%, respectively, given a 100 basis point decrease in market interest rates at December 31, 2024 compares to (0.4)% and (0.9)%, respectively, for the same period in 2023.
The analysis at the end of 2024 consistent with the analysis at the end of 2023, showed that in an environment of increasing rates, income decreases.
The changes in net interest income, net income and the economic value of equity in higher interest rate shock scenarios at December 31, 2024 are not believed to be excessive and are within policy limits.
Table o f Contents Certain shortcomings are inherent in the method of analysis presented in the foregoing table.
Further, the earnings simulation model does not take into account factors such as future balance sheet growth, changes in product mix, changes in yield curve relationships, the various rate indexes do not move in parallel (e.g.
SOFR, Fed Funds), hedging activities we might take and changing product spreads that could mitigate any potential beneficial or adverse impact of changes in interest rates.
Another key factor to consider is the behavior of our deposit portfolio in the baseline forecast and in alternate interest rate scenarios set out in the table above is a key assumption in our projected estimates of net interest income.
In higher rate scenarios, any customer activity resulting in the replacement of low-cost or noninterest-bearing deposits with higher-yielding deposits or market-based funding would reduce the assumed benefit of those deposits.
The projected impact on net interest income in the table above also assumes a "through-the-cycle" non-maturity deposit beta which may not be an accurate predictor of actual deposit rate changes realized in scenarios of smaller and/or non-parallel interest rate movements.
Each of the above analyses may not, on its own, be an accurate indicator of how our net interest income will be affected by current and future changes in interest rates.
For example, although certain assets and liabilities may have similar maturities or periods of repricing, they may react to different degrees to changes in market interest rates.
Interest rates on certain types of assets and liabilities fluctuate in advance of changes in general market rates, while interest rates on other types may lag behind changes in general market rates.
The ability of many borrowers to service their debts also may decrease during periods of rising interest rates.
(the "Company") as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements").
We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework: (2013) issued by COSO.
A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Table o f Contents Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Allowance and Provision for Credit Losses on Loans The allowance for credit losses (the “ACL”) is an accounting estimate of the expected credit losses in the HFI loans portfolio over the life of an exposure (or pool of exposures).
Our audit procedures to address the critical audit matter included: Testing of internal controls over: • The Company’s significant model assumptions and judgments, reasonable and supportable forecasts, and information systems. • The Company’s preparation and review of the allowance for credit losses calculation, including the relevance and reliability of data used as the basis for adjustments related to the qualitative factors, the development and reasonableness of qualitative adjustments, and the mathematical accuracy and appropriateness of the overall calculation. • The completeness and accuracy of historical inputs, loan data used in the development of the PD and LGD assumptions, and the use of third-party data in the computation.
Table o f Contents Substantively testing management’s estimate, which included: • Assessing the reasonableness of assumptions and judgments related to the PD and LGD rates, with the assistance of our valuation specialists, by comparing the resulting historical loss experience to a group of the Company’s peers. • Evaluating the reasonableness of management’s judgments in the selection and application of reasonable and supportable forecasts of economic variables. • Evaluating management’s process for developing the qualitative factors, including evaluating management’s judgments and assumptions for reasonableness. • Assessing the relevance and reliability of data used to develop qualitative factors. • Evaluating the mathematical accuracy of the PD and LGD rates on a pooled loan level with the assistance of valuation specialists, including the completeness and accuracy of loan data used in the model. /s/ Crowe LLP We have served as the Company's auditor since 2021.
February 27, 2025 Table o f Contents EAGLE BANCORP, INC.
Consolidated Balance Sheets (dollars in thousands, except share and per share data) December 31, 2024 December 31, 2023 Assets Cash and due from banks $ 11,882 $ 9,047 Federal funds sold 2,581 3,740 Interest-bearing deposits with banks and other short-term investments 619,017 709,897 Investment securities available-for-sale (amortized cost of $ 1,408,935 and $ 1,668,316 , respectively, and allowance for credit losses of $ 22 and $ 17 , respectively) 1,267,404 1,506,388 Investment securities held-to-maturity, net of allowance for credit losses of $ 1,306 and $ 1,956 , respectively (fair value of $ 820,382 and $ 901,582 , respectively) 938,647 1,015,737 Federal Reserve and Federal Home Loan Bank stock 51,763 25,748 Loans held for investment, at amortized cost 7,934,888 7,968,695 Less allowance for credit losses ( 114,390 ) ( 85,940 ) Loans held for investment, net of allowance 7,820,498 7,882,755 Premises and equipment, net 7,694 10,189 Right-of-use assets - operating leases 18,494 19,129 Deferred income taxes 91,472 86,620 Bank-owned life insurance 115,806 112,921 Goodwill and other intangible assets, net 16 104,925 Other real estate owned 2,743 1,108 Other assets 181,491 176,334 Total Assets $ 11,129,508 $ 11,664,538 Liabilities and Shareholders’ Equity Liabilities Deposits: Noninterest-bearing demand $ 1,544,403 $ 2,279,081 Interest-bearing transaction 1,211,791 997,448 Savings and money market 3,599,221 3,314,043 Time deposits 2,775,663 2,217,467 Total deposits 9,131,078 8,808,039 Customer repurchase agreements 33,157 30,587 Other short-term borrowings 490,000 1,369,918 Long-term borrowings 76,108 — Operating lease liabilities 23,815 23,238 Reserve for unfunded commitments 3,463 5,590 Other liabilities 145,826 152,883 Total Liabilities 9,903,447 10,390,255 Shareholders’ Equity Common stock, par value $ 0.01 per share; shares authorized 100,000,000 , shares issued and outstanding 30,202,003 and 29,925,612 , respectively 298 296 Additional paid-in capital 384,932 374,888 Retained earnings 982,304 1,061,456 Accumulated other comprehensive income (loss) ( 141,473 ) ( 162,357 ) Total Shareholders’ Equity 1,226,061 1,274,283 Total Liabilities and Shareholders’ Equity $ 11,129,508 $ 11,664,538 See Notes to Consolidated Financial Statements.
Consolidated Statements of Operations Years Ended December 31, (dollars in thousands, except per share data) 2024 2023 2022 Interest Income Interest and fees on loans $ 548,389 $ 518,080 $ 358,967 Interest and dividends on investment securities 49,971 54,660 51,481 Interest on balances with other banks and short-term investments 88,770 52,300 13,304 Interest on federal funds sold 433 287 861 Total interest income 687,563 625,327 424,613 Interest Expense Interest on deposits 320,421 257,544 83,261 Interest on customer repurchase agreements 1,271 1,218 356 Interest on other short-term borrowings 72,386 73,253 3,980 Interest on long-term borrowings 4,797 2,766 4,149 Total interest expense 398,875 334,781 91,746 Net Interest Income 288,688 290,546 332,867 Provision for (Reversal of) Credit Losses 66,360 31,536 266 Provision for (Reversal of) Credit Losses for Unfunded Commitments ( 2,127 ) ( 267 ) 1,477 Net Interest Income After Provision for (Reversal of) Credit Losses 224,455 259,277 331,124 Noninterest Income Service charges on deposits 6,843 6,455 5,399 Gain on sale of loans 57 418 3,702 Net gain (loss) on sale of investment securities 14 ( 11 ) ( 169 ) Increase in the cash surrender value of bank-owned life insurance 2,885 2,659 2,547 Other income 10,140 12,015 12,175 Total noninterest income 19,939 21,536 23,654 Noninterest Expense Salaries and employee benefits 87,768 86,096 84,053 Premises and equipment expenses 11,382 12,606 13,218 Marketing and advertising 5,449 3,359 4,721 Data processing 14,093 13,083 12,171 Legal, accounting and professional fees 9,286 10,787 8,583 FDIC insurance 29,009 11,853 4,969 SEC/FRB penalties — — 22,977 Goodwill impairment 104,168 — — Other expenses 13,479 15,509 14,406 Total noninterest expense 274,634 153,293 165,098 Income (Loss) Before Income Tax Expense ( 30,240 ) 127,520 189,680 Income Tax Expense 16,795 26,986 48,750 Net Income (Loss) $ ( 47,035 ) $ 100,534 $ 140,930 Earnings (Loss) Per Common Share Basic $ ( 1.56 ) $ 3.31 $ 4.40 Diluted $ ( 1.56 ) $ 3.31 $ 4.39 See Notes to Consolidated Financial Statements.
Consolidated Statements of Comprehensive Income (Loss) Years Ended December 31, (dollars in thousands) 2024 2023 2022 Net Income (Loss) $ ( 47,035 ) $ 100,534 $ 140,930 Other comprehensive income (loss), net of tax: Unrealized gain (loss) on securities available-for-sale 15,406 32,519 ( 140,926 ) Reclassification adjustment for net (gains) losses included in net income (loss) ( 12 ) 8 111 Total unrealized gain (loss) on investment securities available-for-sale 15,394 32,527 ( 140,815 ) Unrealized loss on securities transferred to held-to-maturity — — ( 49,095 ) Amortization of unrealized loss on securities transferred to held-to-maturity 5,290 4,805 4,361 Total unrealized gain (loss) on investment securities held-to-maturity 5,290 4,805 ( 44,734 ) Unrealized gain (loss) on derivatives 200 ( 182 ) 284 Other comprehensive income (loss) 20,884 37,150 ( 185,265 ) Comprehensive Income (Loss) $ ( 26,151 ) $ 137,684 $ ( 44,335 ) See Notes to Consolidated Financial Statements.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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