Eagle Bancorp in Bethesda, Maryland, said it shuttered branches and implemented a new expense reduction plan that involves layoffs.
During the second quarter, the bank said in its earnings release Wednesday, "two branches were closed with an annual pre-tax cost savings in rental expense of $408,000." Then, early this quarter, the company "implemented a reduction-in-force" that is "expected to generate cost savings of $2.4 million in the second half of 2023, plus an additional reduction of $5.8 million in 2024."
The $11.1 billion-asset company said that it closed locations in the Georgetown neighborhood of Washington, D.C., and Chantilly, Virginia. It now has 13 branches.
The bank also stopped originating first lien residential mortgages, given high interest rates and weaker demand.
Susan Riel,
Like most banks, Eagle said its deposit costs jumped in the second quarter. High rates and intense competition following the failures of prominent regional banks have driven up funding expenses across the industry.
At the same time, lending activity is slowing and curbing interest income. Eagle said its second-quarter total loans were up just 0.4% from the prior quarter. Its net interest margin contracted 28 basis points during the second quarter to 2.49%.
Eagle reported net income of $28.7 million for the second quarter, up from $15.7 million a year earlier. Net income for the year-ago quarter, however, was lowered by one-time costs related to legal settlements associated with previously
