D.C.-area bank sees profits rise as new CEO seeks turnaround

• Key insight: Eagle Bank is showing signs of progress in reducing credit risk and improving profitability, but loan and deposit balances remain below year-ago levels as the bank invests in hiring to support future growth.
• Supporting data: Eagle's net income grew to $24.2 million in the third quarter, up from a net loss of $67.5 million a year prior.

Eagle Bancorp reported its biggest quarterly profit in three years, as new CEO Stephen Curley works to turn around a Washington, D.C,-area lender that racked up big losses last year.
The Bethesda-Maryland based bank, which has struggled with troubled office loans,

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posted third-quarter net income of $24.2 million, compared with a net loss of $67.5 million a year earlier.

Eagle saw the value of its criticized and classified loans fall by $448 million, or 41%, from a year earlier. But its nonperforming assets rose 24.5% from a year earlier to $166 million, largely because it moved a $56 million Maryland affordable multifamily loan relationship into nonperforming status. 

Curley, who was hired in May after previously working at Western Alliance Bancorp, said Thursday that the increase was partly driven by the bank's decision to address the maturing loan. Despite the rise in nonperforming assets, he said, the bank is making progress.

"When I step back from the individual metrics, I see a company well positioned with less credit risk, a strong capital base and a renewed capacity to grow," Curley said on the bank's earnings call. "Our job now is to convert that progress into stronger returns for our shareholders."

While continuing to address the bank's balance sheet remains a priority, Curley said he is also focused on hiring to support growth in deposits and loans. The bank announced the appointment of Corey Muñoz as chief people officer, a role that includes overseeing employee retention and recruitment.

"One of my priorities since arriving has been making sure we have the leadership and talent to execute against the opportunities we see across Eagle," Curley said. "We've also added experienced bankers tasked with bringing in new business and growing deposits and loans."

The nearly $10 billion-asset bank has increased hiring in Baltimore following its September announcement that it would expand its commercial banking business there, Curley said.

The hiring push has contributed to higher expenses. Noninterest expenses rose to $47.1 million from $41.9 million in the same period a year earlier, driven primarily by a $7 million increase in salaries and employee benefits.

"We're beginning to see the activity we expected from those investments, and expect that momentum to continue through the fourth quarter and well into 2027," Curley said.

But the bank's investments in future growth have yet to translate into higher loan and deposit balances.

Total loans, including loans held for sale, stood at $6.6 billion at the end of the third quarter, down from $7.3 billion a year earlier, largely because of a decline in income-producing real estate loans. Total deposits fell to $8 billion from $9.46 billion on Sept. 30, 2025.

The bank's provision for credit losses was $2.8 million, down from $113.2 million the year prior.

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Eagle's net interest margin, a measure of how much a bank earns on loans relative to what it pays for deposits and other funding, rose to 2.6% from 2.43% a year earlier. The improvement was driven largely by a shift in its funding mix, as it reduced its reliance on brokered deposits, which lowered funding costs.The bank said lower interest income from declining loan balances partially offset the improvement.

According to Eagle's forward guidance, it expects NIM to be in the range of 2.77% to 3.05% in 2027.

Eagle's earnings per share during the third quarter was 79 cents, easily beating the 37-cent consensus of analysis, according to S&P Capital IQ.

The last time Eagle posted exceeded its third-quarter 2026 net income was in the same period in 2023, when its profits totaled $27.4 million. In the last three years, Eagle has reported losses in four out of 12 quarters, including losses totaling more than $130 million in the second and third quarters of 2025.