- Key insight: Eagle Bancorp announced that CEO Susan Riel will retire next year, and the Bethesda, Maryland-based lender is embarking on a search for her successor.
- What’s at stake: The bank, which has recorded big losses in recent quarters as a result of exposure to problematic loans on troubled office buildings, is attempting a turnaround.
- Forward look: Riel, who helped found Eagle in the 1990s, said she’ll decide whether to stay on the board after the next CEO has been named.
A beleaguered community bank based in the Washington, D.C., area said Monday that it will replace its CEO next year following a search to recruit her successor.
Susan Riel, who helped found Eagle Bancorp in 1998, will retire as president and CEO in 2026, the bank announced. She will keep her spot on the board, at least for now, but will give up her chair role.
“I think it’s the right time for the bank and for me,” Riel, 76, told American Banker.
The Bethesda, Maryland-based bank has struggled over the past few years as its outsized commercial real estate portfolio took beating after beating; both from the pandemic and the shift toward work-from-home culture, which hurt occupancy rates at many office buildings, and from the rapid rise of interest rates, making existing loans uncompetitive and difficult to offload.
Under the bank’s new succession plan, the chair role will be filled immediately by James Soltesz, who had been serving as lead independent director. Riel will remain in the CEO job until her successor is hired, which Eagle expects to happen sometime next year.
Eagle, which had $10.8 billion of assets as of Sept. 30, has engaged an executive search firm to assist with the recruitment process and the evaluation of candidates.
The board’s governance and nominating committee — whose members are all independent directors — will be leading the CEO search, according to Riel. Both internal and external candidates will be considered, she said.
Riel’s son Ryan is senior executive vice president at Eagle Bancorp and chief real estate lending officer at its EagleBank subsidiary. He could be one of the internal candidates for the CEO job if the board decides he should be considered, Susan Riel said. “I will not have any involvement in that,” she added.
As for her own future as a director, Riel said that she’s “not a strong believer” in having the previous CEO continue to serve on the board after the successor arrives. “That decision will be made later on,” she said.
Eagle announced in September that it was adding
The bank has been racking up large losses as it works through its asset quality problems. Its $69.8 million loss in the second quarter was followed by a $67.5 million loss in the three months that ended on Sept. 30. Eagle’s stock is down some 33% year-to-date.
During the third quarter, a firm hired by Eagle performed an independent credit review, covering 85% of the bank’s commercial real estate and commercial & industrial portfolios, according to the bank.
Some 88% of Eagle’s loans were classified as performing in the third quarter, up from 69% in the fourth quarter of last year. “Ideally, the large majority of office pain has now been taken,” Piper Sandler analysts wrote in an Oct. 26 research note.
On Monday, Riel said that the bank’s strategy, which includes growing its C&I lending business, is working.
“We feel like we’ve put things in place, we’ve dealt with the problems we have, and we should be in a position to move forward in a much more positive way than we have been,” she said.
Catherine Leffert contributed to this report.