Eagle Bancorp (EGBN) as of March 31, 2026 presents a balance sheet under active credit stress, with liquidation recovery to equity materially impaired by the CRE office loan portfolio. Total assets are $9.95B against total liabilities of $8.81B, implying GAAP book equity of $1.15B. Under liquidation-value methodology, the recovery posture is structurally negative after haircuts. The dominant asset is the loan portfolio at $6.94B gross ($6.79B net of ACL), predominantly CRE-exposed. Applying a conservative bank-loan liquidation haircut of 60-75 cents on the dollar (reflecting CRE concentration, nonperforming loan migration, and distressed-sale dynamics) would reduce loan recovery well below face value. Nonperforming loans increased to $128.8M (1.86% of total loans) from $106.9M at December 31, 2025, with the ACL coverage ratio declining from 149% to 114%, signaling deteriorating protection. Q1 2026 net charge-offs were $25.9M, annualizing to 1.47% of average loans — more than double the Q1 2025 rate of 0.57%. An additional $55.2M of nonaccrual HFS loans were excluded from nonperforming assets but remain a contingent credit drag. Substandard loans declined to $447.6M from $514.5M (primarily due to HFS transfers), while special mention loans rose to $290.8M from $268.9M, indicating continued adverse migration. The ACL of $147.2M (2.12% of loans) is heavily concentrated in income-producing CRE at $88.2M (60% of total ACL). Office collateral represents 65% of the income-producing CRE ACL at $57.7M. The investment portfolio ($1.77B AFS + HTM amortized cost) carries an unrealized HTM loss of $85.1M pre-tax and AFS unrealized loss of $78.5M pre-tax; these losses do not affect regulatory capital directly but would be realized in a wind-down. BOLI at $339.8M carries recovery uncertainty (typically 70-90 cents depending on carrier credit). Liabilities are dominated by $8.59B in deposits — $2.9B of which are brokered (34% of total), a concentration that complicates orderly run-off in a stressed scenario. The $77.7M 10% senior unsecured notes (2029 maturity, carrying value $76.5M) stand ahead of equity. Operating lease obligations total $41.2M undiscounted and survive wind-up at face value. The MFFAIS CLV/LLV/OLV of $468M is the relevant recovery floor for equity — reflecting the structural deficit once loan haircuts, deposit run-off costs, and above-par liability settlement are modeled. Since the prior filing (the 2025 10-K as of December 31, 2025), the key deteriorations are: nonperforming loans up $21.9M, ACL coverage ratio down 35 percentage points, net charge-offs nearly doubling YoY on an annualized basis, and deposits declining $542M in a single quarter. The $10M legal contingency provision recorded as a 2025 year-end subsequent event (U.S. Attorney investigation) adds tail liability not fully visible in the balance sheet.
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