Eagle Bancorp, Inc. Announces Its 31st Consecutive Quarter of Record Earnings With Third Quarter 2016 Net Income Up 14% Over 2015

BETHESDA, Md., Oct. 19, 2016 (GLOBE NEWSWIRE) — Eagle Bancorp, Inc. (the “Company”) (NASDAQ:EGBN), the parent company of EagleBank, today announced record quarterly net income of $24.5 million for the three months ended September 30, 2016, a 14% increase over the $21.5 million net income for the three months ended September 30, 2015. Net income available to common shareholders for the three months ended September 30, 2016 increased 15% to $24.5 million as compared to $21.3 million for the same period in 2015.

Net income per basic common share for the three months ended September 30, 2016 was $0.73 compared to $0.64 for the same period in 2015, a 14% increase. Net income per diluted common share for the three months ended September 30, 2016 was $0.72 compared to $0.63 for the same period in 2015, a 14% increase.

For the nine months ended September 30, 2016, the Company’s net income was $72.0 million, a 17% increase over the $61.8 million for the nine months ended September 30, 2015. Net income available to common shareholders was $72.0 million ($2.14 per basic common share and $2.11 per diluted common share), as compared to $61.3 million ($1.88 per basic common share and $1.84 per diluted common share) for the same nine month period in 2015, a 14% increase per basic share and a 15% increase per diluted share.

“We are very pleased to report a continued quarterly trend of balanced and consistently strong financial performance,” noted Ronald D. Paul, Chairman and Chief Executive Officer of Eagle Bancorp, Inc. “Our net income has increased for 31 consecutive quarters dating back to the first quarter of 2009.  This strong financial performance has resulted from a combination of balance sheet growth, revenue growth, solid asset quality, and favorable operating leverage.” Mr. Paul added, “A lower level of net loan growth in the third quarter was due substantially to higher loan payoffs while loan originations and pipeline commitments remain very strong. Additionally, our regulatory capital levels were enhanced in July 2016 from an already well capitalized position as we completed the sale of $150 million in subordinated debt by our holding company. This raise, together with the strong quarter in deposit growth, served to both increase liquidity in the quarter and suppress earning asset yields. We estimate a 15 basis point negative impact on the net interest margin for the third quarter 2016 due to the $150 million sub-debt raise.” The raise was accomplished at a favorable cost of capital and will be deployed over time into higher yielding assets.          

The Company’s financial performance in the third quarter of 2016 as compared to 2015 was highlighted by growth in total loans of 1.5% for the third quarter 2016 over 2015 and 15% over the nine month period ended September 30, 2016 versus the prior year; by growth in total deposits of 4% for the quarter and 13% over the prior year; and by 9% growth in total revenue for the quarter and 10% over the prior year. For the third quarter in 2016, the efficiency ratio was 40.54%. Mr. Paul added, “at a time when the net interest margin of banks is being challenged by the continuing low interest rate environment, the Company remains committed to cost management measures and strong productivity. Noninterest expenses increased 5% in the third quarter 2016 over 2015 and increased 4% for the nine months ended September 30, 2016 over the prior year. The annualized return on average assets (“ROAA”) was 1.50% for the third quarter in 2016 and 1.54% for the nine months ended September 30, 2016. The annualized return on average common equity (“ROACE”) was 12.04% for the third quarter in 2016 and 12.27% for the nine months ended September 30, 2016.

Loan growth for the first nine months of 2016 was 10% and averaged 17% higher as compared to the first nine months of 2015. Deposit growth was 8% for the first nine months of 2016 and averaged 13% higher for the first nine months of 2016 compared with the first nine months of 2015.

The net interest margin was 4.11% for the third quarter of 2016, as compared to 4.23% for the third quarter of 2015. As noted above, the sub-debt raise negatively impacted the net interest margin in the third quarter of 2016 by 15 basis points. For the nine month period ended September 30, 2016, the net interest margin was 4.23% as compared to 4.32% for the nine months ended September 30, 2015. The sub-debt raise in July 2016 negatively impacted the net interest margin in the nine month period ending September 30, 2016 by six basis points. Mr. Paul noted, “the persistently low interest rate environment has continued to challenge bank spread earnings. In the current environment, the Company has continued its emphasis on disciplined pricing for both new loans and funding sources, which has resulted in the Company maintaining a superior net interest margin.”

Asset quality measures remained solid at September 30, 2016. Net charge-offs (annualized) were 0.14% of average loans for the third quarter of 2016, as compared to 0.16% of average loans for the third quarter of 2015. At September 30, 2016, the Company’s nonperforming loans amounted to $22.3 million (0.41% of total loans) as compared to $14.5 million (0.30% of total loans) at September 30, 2015 and $13.2 million (0.26% of total loans) at December 31, 2015. Nonperforming assets amounted to $27.5 million (0.41% of total assets) at September 30, 2016 compared to $24.4 million (0.41% of total assets) at September 30, 2015 and $19.1 million (0.31% of total assets) at December 31, 2015.

Management continues to remain attentive to any signs of deterioration in borrowers’ financial conditions and is proactive in taking the appropriate steps to mitigate risk. Furthermore, the Company is diligent in placing loans on nonaccrual status and believes, based on its loan portfolio risk analysis, that its September 30, 2016 allowance for credit losses, at 1.04% of total loans (excluding loans held for sale), is adequate to absorb potential credit losses within the loan portfolio as of the end of the quarter. The allowance for credit losses was 1.05% of total loans at both September 30, 2015 and December 31, 2015. The allowance for credit losses represented 255% of nonperforming loans at September 30, 2016.

“Total assets at September 30, 2016 were $6.76 billion, a 15% increase as compared to $5.89 billion at September 30, 2015, and an 11% increase as compared to $6.08 billion at December 31, 2015. Total loans (excluding loans held for sale) were $5.48 billion at September 30, 2016, a 15% increase as compared to $4.78 billion at September 30, 2015, and a 10% increase as compared to $5.00 billion at December 31, 2015. Loans held for sale amounted to $78.1 million at September 30, 2016 as compared to $35.7 million at September 30, 2015, a 119% increase, and $47.5 million at December 31, 2015, a 65% increase. The investment portfolio totaled $430.7 million at September 30, 2016, an 18% decrease from the $524.3 million balance at September 30, 2015. As compared to December 31, 2015, the investment portfolio at September 30, 2016 decreased by $57.2 million or 12%.

Total deposits at September 30, 2016 were $5.56 billion, compared to deposits of $4.93 billion at September 30, 2015, a 13% increase, and deposits of $5.16 billion at December 31, 2015, an 8% increase. Total borrowed funds (excluding customer repurchase agreements) were $266.4 million at September 30, 2016, $68.9 million at September 30, 2015 and $68.9 million at December 31, 2015.

Total shareholders’ equity at September 30, 2016 increased 4%, to $815.6 million, compared to $786.1 million at September 30, 2015, and increased 10%, from $738.6 million at December 31, 2015. The smaller increase in shareholders’ equity at September 30, 2016 compared to the same period in 2015 reflects increased retained earnings offset by the redemption during the fourth quarter of 2015 of all $71.9 million of the preferred stock issued under the Small Business Lending Fund (“SBLF”). The $150 million of qualifying capital raised in a ten year sub-debt issue in July 2016 enhanced the Company’s capital position well in excess of regulatory requirements for well capitalized status. The total risk based capital ratio was 15.05% at September 30, 2016, as compared to 13.80% at September 30, 2015, and 12.75% at December 31, 2015. In addition, the tangible common equity ratio was 10.64% at September 30, 2016, compared to 10.46% at September 30, 2015 and 10.56% at December 31, 2015.

Analysis of the three months ended September 30, 2016 compared to September 30, 2015

For the three months ended September 30, 2016, the Company reported an annualized ROAA of 1.50% as compared to 1.47% for the three months ended September 30, 2015. The annualized ROACE for the three months ended September 30, 2016 was 12.04%, as compared to 11.95% for the three months ended September 30, 2015. The higher ratios are due to higher earnings.

Total revenue (net interest income plus noninterest income) for the third quarter of 2016 was $71.1 million, or 9% above the $65.2 million of total revenue earned for the third quarter of 2015 and was only slightly less than the $71.4 million of revenue earned in the second quarter of 2016.

Net interest income increased 10% for the three months ended September 30, 2016 over the same period in 2015 ($64.7 million versus $59.1 million), resulting from growth in average earning assets of 13%. The net interest margin was 4.11% for the three months ended September 30, 2016, as compared to 4.23% for the three months ended September 30, 2015. The Company believes its net interest margin remains favorable compared to peer banking companies and that its disciplined approach to managing the loan portfolio yield to 5.08% for the third quarter in 2016 has been a significant factor in its overall profitability.

The provision for credit losses was $2.3 million for the three months ended September 30, 2016 as compared to $3.3 million for the three months ended September 30, 2015. The lower provisioning in the third quarter of 2016, as compared to the third quarter of 2015, is primarily due to lower loan growth, as loan growth of $78.5 million in the three months ended September 30, 2016 was lower than loan growth of $226.1 million in the same period in 2015, and to overall improved asset quality. Net charge-offs of $2.0 million in the third quarter of 2016 represented an annualized 0.14% of average loans, excluding loans held for sale, as compared to $1.9 million, or an annualized 0.16% of average loans, excluding loans held for sale, in the third quarter of 2015. Net charge-offs in the third quarter of 2016 were attributable primarily to investment-commercial real estate loans ($1.7 million).

Noninterest income for the three months ended September 30, 2016 increased to $6.4 million from $6.1 million for the three months ended September 30, 2015, a 5% increase. This increase was primarily due to higher net gains on sales of residential mortgage loans of $532 thousand. Residential mortgage loans closed were $276 million for the third quarter in 2016 versus $175 million for the third quarter of 2015.   

The efficiency ratio, which measures the ratio of noninterest expense to total revenue, was 40.54% for the third quarter of 2016, as compared to 42.04% for the third quarter of 2015. Noninterest expenses totaled $28.8 million for the three months ended September 30, 2016, as compared to $27.4 million for the three months ended September 30, 2015, a 5% increase. Cost increases for salaries and benefits were $1.7 million, due primarily to increased staff, merit increases and incentive compensation. Premises and equipment expenses were $188 thousand lower, due primarily to the closing of one branch office acquired in the merger, and transactions to reduce space in two additional offices. Marketing and advertising expense increased by $95 thousand primarily due to costs associated with digital and print advertising and sponsorships. Legal, accounting and professional fees decreased by $292 thousand primarily due to lower legal fees. FDIC insurance premium expense decreased by $165 thousand resulting from lower growth in total assets. Other expenses increased by $335 thousand primarily due to higher fees incurred to maintain OREO properties.

Analysis of the nine months ended September 30, 2016 compared to September 30, 2015

For the nine months ended September 30, 2016, the Company reported an annualized ROAA of 1.54% as compared to 1.49% for the nine months ended September 30, 2015. The annualized ROACE for the nine months ended September 30, 2016 was 12.27%, as compared to 12.41% for the nine months ended September 30, 2015, the lower ROACE due to the higher average capital position.

For the nine month periods ending September 30, total revenue was $211.4 million for 2016, as compared to $191.5 million in 2015, a 10% increase.  

Net interest income increased 12% for the nine months ended September 30, 2016 over the same period in 2015 ($191.1 million versus $171.4 million), resulting from growth in average earning assets of 14%. The net interest margin was 4.23% for the nine months ended September 30, 2016 as compared to 4.32% for the same period in 2015. The Company believes its net interest margin remains favorable compared to peer banking companies and that its disciplined approach to managing the loan portfolio yield to 5.10% for the first nine months in 2016 has been a significant factor in its overall profitability.

The provision for credit losses was $9.2 million for the nine months ended September 30, 2016 as compared to $10.0 million for the nine months ended September 30, 2015. The slightly lower provisioning in the first nine months of 2016, as compared to the first nine months of 2015, is due to lower charge-offs and to overall improved asset quality. Net charge-offs of $5.0 million in the first nine months of 2016 represented an annualized 0.13% of average loans, excluding loans held for sale, as compared to $5.8 million or an annualized 0.17% of average loans, excluding loans held for sale, in the first nine months of 2015. Net charge-offs in the first nine months of 2016 were attributable primarily to commercial ($2.7 million), investment-commercial real estate ($2.3 million), and consumer loans ($220 thousand) offset by a recovery of $207 thousand in construction-commercial and residential loans.

Noninterest income for the nine months ended September 30, 2016 was $20.3 million as compared to $20.1 million for the nine months ended September 30, 2015, a 1% increase. This increase was primarily due to an increase of $717 thousand in gains on SBA loan sales, a $712 thousand increase in other income, and an increase of $313 thousand in service charges on deposits offset by a decline of $2.0 million in gains on the sale of residential mortgage loans due to lower origination and sales volume. Residential mortgage loans closed were $622 million for the first nine months of 2016 versus $723 million for the first nine months of 2015.

Noninterest expenses totaled $85.2 million for the nine months ended September 30, 2016, as compared to $82.1 million for the nine months ended September 30, 2015, a 4% increase. Cost increases for salaries and benefits were $3.4 million, due primarily to increased staff, merit increases, and incentive compensation. Premises and equipment expenses were $637 thousand lower, primarily due to the closing of one branch acquired in the merger and to sublease arrangements. Marketing and advertising expense increased by $369 thousand primarily due to costs associated with digital and print advertising and sponsorships. Legal, accounting and professional fees decreased by $70 thousand primarily due to lower professional fees. Data processing expense increased $118 thousand primarily due to licensing agreements. FDIC insurance premium expense decreased by $155 thousand resulting from lower growth in total assets. For the first nine months of 2016, the efficiency ratio was 40.32% as compared to 42.86% for the same period in 2015.

The financial information which follows provides more detail on the Company’s financial performance for the nine and three months ended September 30, 2016 as compared to the nine and three months ended September 30, 2015 as well as providing eight quarters of trend data. Persons wishing additional information should refer to the Company’s Form 10-K for the year ended December 31, 2015 and other reports filed with the Securities and Exchange Commission (the “SEC”).

About Eagle Bancorp: The Company is the holding company for EagleBank, which commenced operations in 1998. The Bank is headquartered in Bethesda, Maryland, and operates through twenty-one branch offices, located in Montgomery County, Maryland, Washington, D.C. and Northern Virginia. The Company focuses on building relationships with businesses, professionals and individuals in its marketplace.

Conference Call: Eagle Bancorp will host a conference call to discuss its third quarter 2016 financial results on Thursday, October 20, 2016 at 10:00 a.m. eastern daylight time. The public is invited to listen to this conference call by dialing 1.877.303.6220, conference ID Code is 93565935, or by accessing the call on the Company’s website, www.EagleBankCorp.com. A replay of the conference call will be available on the Company’s website through November 3, 2016.

Forward-looking Statements: This press release contains forward-looking statements within the meaning of the Securities and Exchange Act of 1934, as amended, including statements of goals, intentions, and expectations as to future trends, plans, events or results of Company operations and policies and regarding general economic conditions. In some cases, forward-looking statements can be identified by use of words such as “may,” “will,” “anticipates,” “believes,” “expects,” “plans,” “estimates,” “potential,” “continue,” “should,” and similar words or phrases. These statements are based upon current and anticipated economic conditions, nationally and in the Company’s market, interest rates and interest rate policy, competitive factors, and other conditions which by their nature, are not susceptible to accurate forecast and are subject to significant uncertainty. Because of these uncertainties and the assumptions on which this discussion and the forward-looking statements are based, actual future operations and results in the future may differ materially from those indicated herein. For details on factors that could affect these expectations, see the risk factors and other cautionary language included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 and in other periodic and current reports filed with the SEC. Readers are cautioned against placing undue reliance on any such forward-looking statements. The Company’s past results are not necessarily indicative of future performance.

                 
Eagle Bancorp, Inc.                
Consolidated Financial Highlights (Unaudited)                
(dollars in thousands, except per share data)        
  Nine Months Ended September 30,   Three Months Ended September 30,  
    2016       2015       2016       2015    
Income Statements:                
Total interest income $   210,010     $   185,869     $   72,431     $   63,981    
Total interest expense     18,870         14,503         7,703         4,896    
Net interest income     191,140         171,366         64,728         59,085    
Provision for credit losses     9,219         10,043         2,288         3,262    
Net interest income after provision for credit losses     181,921         161,323         62,440         55,823    
Noninterest income (before investment gains
and extinguishment of debt)
    19,147         19,042         6,404         6,039    
Gain on sale of investment securities     1,123         2,224         1         60    
Loss on early extinguishment of debt     –          (1,130 )       –          –     
Total noninterest income     20,270         20,136         6,405         6,099    
Total noninterest expense      85,235         82,076         28,838         27,405    
Income before income tax expense     116,956         99,383         40,007         34,517    
Income tax expense     44,966         37,564         15,484         13,054    
Net income     71,990         61,819         24,523         21,463    
Preferred stock dividends      –          539         –          180    
Net income available to common shareholders $   71,990     $   61,280     $   24,523     $   21,283    
                 
Per Share Data:                
Earnings per weighted average common share, basic $   2.14     $   1.88     $   0.73     $   0.64    
Earnings per weighted average common share, diluted $   2.11     $   1.84     $   0.72     $   0.63    
Weighted average common shares outstanding, basic      33,565,863         32,625,379         33,590,183         33,400,973    
Weighted average common shares outstanding, diluted      34,161,890         33,277,542         34,187,171         34,026,412    
Actual shares outstanding at period end     33,590,880         33,405,510         33,590,880         33,405,510    
Book value per common share at period end  $   24.28     $   21.38     $   24.28     $   21.38    
Tangible book value per common share at period end (1) $   21.08     $   18.10     $   21.08     $   18.10    
                 
Performance Ratios (annualized):                
Return on average assets   1.54 %     1.49 %     1.50 %     1.47 %  
Return on average common equity   12.27 %     12.41 %     12.04 %     11.95 %  
Net interest margin   4.23 %     4.32 %     4.11 %     4.23 %  
Efficiency ratio (2)   40.32 %     42.86 %     40.54 %     42.04 %  
                 
Other Ratios:                
Allowance for credit losses to total loans (3)   1.04 %     1.05 %     1.04 %     1.05 %  
Allowance for credit losses to total nonperforming loans   255.29 %     347.82 %     255.29 %     347.82 %  
Nonperforming loans to total loans (3)   0.41 %     0.30 %     0.41 %     0.30 %  
Nonperforming assets to total assets   0.41 %     0.41 %     0.41 %     0.41 %  
Net charge-offs (annualized) to average loans (3)   0.13 %     0.17 %     0.14 %     0.16 %  
Common equity to total assets   12.06 %     12.13 %     12.06 %     12.13 %  
Tier 1 capital (to average assets)   11.12 %     11.96 %     11.12 %     11.96 %  
Total capital (to risk weighted assets)   15.05 %     13.80 %     15.05 %     13.80 %  
Common equity tier 1 capital (to risk weighted assets)   10.83 %     10.48 %     10.83 %     10.48 %  
Tangible common equity ratio (1)   10.64 %     10.46 %     10.64 %     10.46 %  
                 
Loan Balances – Period End (in thousands):                
Commercial and Industrial $   1,130,042     $   1,007,659     $   1,130,042     $   1,007,659    
Commercial real estate – owner occupied  $   590,427     $   489,657     $   590,427     $   489,657    
Commercial real estate – income producing  $   2,551,186     $   2,022,950     $   2,551,186     $   2,022,950    
1-4 Family mortgage $   154,439     $   147,720     $   154,439     $   147,720    
Construction – commercial and residential $   838,137     $   927,265     $   838,137     $   927,265    
Construction – C&I (owner occupied) $   104,676     $   60,487     $   104,676     $   60,487    
Home equity $   106,856     $   115,346     $   106,856     $   115,346    
Other consumer  $   6,212     $   5,881     $   6,212     $   5,881    
                 
Average Balances (in thousands):                
Total assets $   6,252,867     $   5,537,401     $   6,492,274     $   5,775,283    
Total earning assets $   6,026,357     $   5,307,848     $   6,264,531     $   5,545,398    
Total loans $   5,253,742     $   4,505,092     $   5,422,677     $   4,636,298    
Total deposits $   5,225,804     $   4,611,324     $   5,353,834     $   4,842,706    
Total borrowings $   215,851     $   167,926     $   300,083     $   128,015    
Total shareholders’ equity $   783,499     $   732,156     $   809,973     $   778,279    
                 

(1) Tangible common equity to tangible assets (the “tangible common equity ratio”) and tangible book value per common share are non-GAAP financial measures derived from GAAP based amounts. The Company calculates the tangible common equity ratio by excluding the balance of intangible assets from common shareholders’ equity and dividing by tangible assets. The Company calculates tangible book value per common share by dividing tangible common equity by common shares outstanding, as compared to book value per common share, which the Company calculates by dividing common shareholders’ equity by common shares outstanding. The Company considers this information important to shareholders as tangible equity is a measure that is consistent with the calculation of capital for bank regulatory purposes, which excludes intangible assets from the calculation of risk based ratios and as such is useful for investors, regulators, management and others to evaluate capital adequacy and to compare against other financial institutions. The table below provides a reconciliation of these non-GAAP financial measures with financial measures defined by GAAP.

           
GAAP Reconciliation (Unaudited)          
(dollars in thousands except per share data)          
  Nine Months Ended   Twelve Months Ended   Nine Months Ended
  September 30, 2016   December 31, 2015   September 30, 2015
Common shareholders’ equity $   815,639     $   738,601     $   714,169  
Less: Intangible assets     (107,694 )       (108,542 )       (109,498 )
Tangible common equity $   707,945     $   630,059     $   604,671  
           
Book value per common share $   24.28     $   22.07     $   21.38  
Less: Intangible book value per common share     (3.20 )       (3.24 )       (3.28 )
Tangible book value per common share $   21.08     $   18.83     $   18.10  
           
Total assets $   6,762,132     $   6,075,577     (4 ) $   5,887,855  
Less: Intangible assets     (107,694 )       (108,542 )       (109,498 )
Tangible assets $   6,654,438     $   5,967,035     $   5,778,357  
Tangible common equity ratio   10.64 %     10.56 %     10.46 %
           

(2) Computed by dividing noninterest expense by the sum of net interest income and noninterest income.

(3) Excludes loans held for sale.

(4) As adjusted for debt issuance cost reclassification.

           
Eagle Bancorp, Inc.          
Consolidated Balance Sheets (Unaudited)          
(dollars in thousands, except per share data)          
           
Assets September 30, 2016   December 31, 2015   September 30, 2015
Cash and due from banks $   10,615     $   10,270     $   10,080  
Federal funds sold     5,262         3,791         4,076  
Interest bearing deposits with banks and other short-term investments     503,150         284,302         291,898  
Investment securities available for sale, at fair value     430,668         487,869         524,326  
Federal Reserve and Federal Home Loan Bank stock     19,920         16,903         16,865  
Loans held for sale     78,118         47,492         35,713  
Loans      5,481,975         4,998,368         4,776,965  
Less allowance for credit losses     (56,864 )       (52,687 )       (50,320 )
Loans, net     5,425,111         4,945,681         4,726,645  
Premises and equipment, net     19,370         18,254         17,070  
Deferred income taxes     41,065         40,311         35,426  
Bank owned life insurance     59,747         58,682         58,284  
Intangible assets, net     107,694         108,542         109,498  
Other real estate owned     5,194         5,852         9,952  
Other assets     56,218         47,628         48,022  
  Total Assets $   6,762,132     $   6,075,577     $   5,887,855  
           
Liabilities and Shareholders’ Equity          
Deposits:          
Noninterest bearing demand $   1,668,271     $   1,405,067     $   1,402,447  
Interest bearing transaction     297,973         178,797         207,716  
Savings and money market     2,802,519         2,835,325         2,514,310  
Time, $100,000 or more     452,015         406,570         439,248  
Other time     337,371         332,685         362,867  
Total deposits     5,558,149         5,158,444         4,926,588  
Customer repurchase agreements     71,642         72,356         64,893  
Other short-term borrowings     50,000         –          –   
Long-term borrowings     216,419         68,928         68,897  
Other liabilities     50,283         37,248         41,408  
Total liabilities     5,946,493         5,336,976         5,101,786  
           
Shareholders’ Equity          
           
Preferred stock, par value $.01 per share, shares authorized 1,000,000,          
Series B, $1,000 per share liquidation preference, shares issued and          
outstanding -0- at September 30, 2016 and December 31, 2015, and 56,600 at         
September 30, 2015;  Series C, $1,000 per share liquidation preference,          
shares issued and outstanding -0- at September 30, 2016 and December 31, 2015,         
and 15,300 at September 30, 2015     –          –          71,900  
Common stock, par value $.01 per share; shares authorized 100,000,000, shares          
issued and outstanding 33,590,880, 33,467,893 and 33,405,510 respectively      333         331         330  
Warrant     946         946         946  
Additional paid in capital     509,707         503,529         500,334  
Retained earnings      305,593         233,604         211,318  
Accumulated other comprehensive (loss) income      (940 )       191         1,241  
Total Shareholders’ Equity     815,639         738,601         786,069  
Total Liabilities and Shareholders’ Equity $   6,762,132     $   6,075,577     $   5,887,855  
           

Eagle Bancorp, Inc.              
Consolidated Statements of Operations (Unaudited)              
(dollars in thousands, except per share data)              
       
  Nine Months Ended September 30,   Three Months Ended September 30,
Interest Income   2016       2015       2016       2015  
Interest and fees on loans $   202,002     $   178,063     $   69,869     $   61,006  
Interest and dividends on investment securities     7,121         7,189         2,177         2,745  
Interest on balances with other banks and short-term investments     856         604         376         228  
Interest on federal funds sold      31         13         9         2  
Total interest income     210,010         185,869         72,431         63,981  
Interest Expense              
Interest on deposits     13,513         10,668         4,840         3,739  
Interest on customer repurchase agreements      115         94         39         33  
Interest on short-term borrowings     727         54         383         –   
Interest on long-term borrowings     4,515         3,687         2,441         1,124  
Total interest expense     18,870         14,503         7,703         4,896  
Net Interest Income      191,140         171,366         64,728         59,085  
Provision for Credit Losses     9,219         10,043         2,288         3,262  
Net Interest Income After Provision For Credit Losses     181,921         161,323         62,440         55,823  
               
Noninterest Income              
Service charges on deposits     4,303         3,990         1,431         1,374  
Gain on sale of loans     8,464         9,364         3,009         2,483  
Gain on sale of investment securities     1,123         2,224         1         60  
Loss on early extinguishment of debt     –          (1,130 )       –          –   
Increase in the cash surrender value of  bank owned life insurance      1,171         1,191         391         395  
Other income     5,209         4,497         1,573         1,787  
Total noninterest income     20,270         20,136         6,405         6,099  
Noninterest Expense              
Salaries and employee benefits     49,157         45,772         17,130         15,383  
Premises and equipment expenses     11,419         12,056         3,786         3,974  
Marketing and advertising     2,551         2,182         857         762  
Data processing     5,716         5,598         1,879         1,976  
Legal, accounting and professional fees     2,845         2,915         771         1,063  
FDIC insurance     2,193         2,348         629         794  
Merger expenses     –          139         –          2  
Other expenses     11,354         11,066         3,786         3,451  
Total noninterest expense   85,235       82,076       28,838       27,405  
Income Before Income Tax Expense     116,956         99,383         40,007         34,517  
Income Tax Expense     44,966         37,564         15,484         13,054  
Net Income      71,990         61,819         24,523         21,463  
Preferred Stock Dividends      –          539         –          180  
Net Income Available to Common Shareholders $   71,990     $   61,280     $   24,523     $   21,283  
               
Earnings Per Common Share              
Basic $   2.14     $   1.88     $   0.73     $   0.64  
Diluted $   2.11     $   1.84     $   0.72     $   0.63  
               

 

Eagle Bancorp, Inc.
Consolidated Average Balances, Interest Yields And Rates (Unaudited)
(dollars in thousands)
               
  Three Months Ended September 30,
    2016       2015  
  Average Balance Interest Average Yield/Rate   Average Balance Interest Average Yield/Rate
ASSETS              
Interest earning assets:              
Interest bearing deposits with other banks and other short-term investments $   336,741   $   376     0.44 %   $   375,341   $   228     0.24 %
Loans held for sale (1)     66,791       586     3.51 %       38,373       374     3.90 %
Loans (1) (2)      5,422,677       69,283     5.08 %       4,636,298       60,632     5.19 %
Investment securities available for sale (2)     429,207       2,177     2.02 %       491,800       2,745     2.21 %
Federal funds sold      9,115       9     0.39 %       3,586       2     0.22 %
  Total interest earning assets     6,264,531       72,431     4.60 %       5,545,398       63,981     4.58 %
               
Total noninterest earning assets     283,564             279,425      
Less: allowance for credit losses     55,821             49,540      
  Total noninterest earning assets     227,743             229,885      
  TOTAL ASSETS $   6,492,274         $   5,775,283      
               
LIABILITIES AND SHAREHOLDERS’ EQUITY              
Interest bearing liabilities:              
Interest bearing transaction $   269,230   $   193     0.29 %   $   202,885   $   97     0.19 %
Savings and money market      2,641,863       2,976     0.45 %       2,453,141       2,092     0.34 %
Time deposits      784,834       1,671     0.85 %       797,472       1,550     0.77 %
  Total interest bearing deposits     3,695,927       4,840     0.52 %       3,453,498       3,739     0.43 %
Customer repurchase agreements     73,749       39     0.21 %       56,624       33     0.23 %
Other short-term borrowings     50,013       383     3.00 %       3       –      
Long-term borrowings     176,321       2,441     5.42 %       71,388       1,124     6.16 %
  Total interest bearing liabilities     3,996,010       7,703     0.77 %       3,581,513       4,896     0.54 %
               
Noninterest bearing liabilities:              
Noninterest bearing demand      1,657,907             1,389,208      
Other liabilities     28,384             26,283      
  Total noninterest bearing liabilities     1,686,291             1,415,491      
               
Shareholders’ equity     809,973             778,279      
  TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $   6,492,274         $   5,775,283      
               
Net interest income   $   64,728         $   59,085    
Net interest spread       3.83 %         4.04 %
Net interest margin       4.11 %         4.23 %
Cost of funds       0.49 %         0.35 %
               
(1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $4.1 million and $3.2 million
  for the three months ended September 30, 2016 and 2015, respectively.
(2) Interest and fees on loans and investments exclude tax equivalent adjustments.             
               

 

Eagle Bancorp, Inc.
Consolidated Average Balances, Interest Yields and Rates (Unaudited)
(dollars in thousands)
               
  Nine Months Ended September 30,
    2016       2015  
  Average Balance Interest Average Yield/Rate   Average Balance Interest Average Yield/Rate
ASSETS              
Interest earning assets:              
Interest bearing deposits with other banks and other short-term investments $   252,871   $   856     0.45 %   $   336,989   $   604     0.24 %
Loans held for sale (1)     47,786       1,288     3.59 %       45,863       1,288     3.74 %
Loans (1) (2)      5,253,742       200,714     5.10 %       4,505,092       176,775     5.25 %
Investment securities available for sale (2)     462,408       7,121     2.06 %       412,912       7,189     2.33 %
Federal funds sold      9,550       31     0.43 %       6,992       13     0.25 %
  Total interest earning assets     6,026,357       210,010     4.65 %       5,307,848       185,869     4.68 %
               
Total noninterest earning assets     281,697             277,793      
Less: allowance for credit losses     55,187             48,240      
  Total noninterest earning assets     226,510             229,553      
  TOTAL ASSETS $   6,252,867         $   5,537,401      
               
LIABILITIES AND SHAREHOLDERS’ EQUITY              
Interest bearing liabilities:              
Interest bearing transaction $   234,481   $   445     0.25 %   $   178,256   $   208     0.16 %
Savings and money market      2,656,638       8,324     0.42 %       2,379,643       6,066     0.34 %
Time deposits      764,099       4,744     0.83 %       778,375       4,394     0.75 %
  Total interest bearing deposits     3,655,218       13,513     0.49 %       3,336,274       10,668     0.43 %
Customer repurchase agreements     71,973       115     0.21 %       54,945       94     0.23 %
Other short-term borrowings     38,873       727     2.46 %       27,492       54     0.26 %
Long-term borrowings     105,005       4,515     5.65 %       85,489       3,687     5.69 %
  Total interest bearing liabilities     3,871,069       18,870     0.65 %       3,504,200       14,503     0.55 %
               
Noninterest bearing liabilities:              
Noninterest bearing demand      1,570,586             1,275,050      
Other liabilities     27,713             25,995      
  Total noninterest bearing liabilities     1,598,299             1,301,045      
               
Shareholders’ equity     783,499             732,156      
  TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $   6,252,867         $   5,537,401      
               
Net interest income   $   191,140         $   171,366    
Net interest spread       4.00 %         4.13 %
Net interest margin       4.23 %         4.32 %
Cost of funds       0.42 %         0.36 %
               
(1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $11.7 million and $8.9 million
  for the nine months ended September 30, 2016 and 2015, respectively.
(2) Interest and fees on loans and investments exclude tax equivalent adjustments.             

 

Eagle Bancorp, Inc. 
Statements of Income and Highlights Quarterly Trends (Unaudited) 
(dollars in thousands, except per share data) 
  Three Months Ended 
  September 30,   June 30,   March 31,   December 31,   September 30,   June 30,   March 31,   December 31,
Income Statements:   2016       2016       2016       2015       2015       2015       2015       2014  
Total interest income $   72,431     $   69,772     $   67,807     $   67,311     $   63,981     $   62,423     $   59,465     $   56,091  
Total interest expense     7,703         5,950         5,217         4,735         4,896         4,873         4,734         4,275  
Net interest income     64,728         63,822         62,590         62,576         59,085         57,550         54,731         51,816  
Provision for credit losses     2,288         3,888         3,043         4,595         3,262         3,471         3,310         3,700  
Net interest income after provision for credit losses     62,440         59,934         59,547         57,981         55,823         54,079         51,421         48,116  
  Noninterest income (before investment gains                              
  & extinguishment of debt)     6,404         7,077         5,666         6,462         6,039         6,233         6,770         5,298  
  Gain on sale of investment securities     1         498         624         30         60         –          2,164         12  
  Loss on early extinguishment of debt     –          –          –          –          –          –          (1,130 )       –   
Total noninterest income     6,405         7,575         6,290         6,492         6,099         6,233         7,804         5,310  
  Salaries and employee benefits     17,130         15,908         16,119         15,977         15,383         14,683         15,706         15,703  
  Premises and equipment      3,786         3,807         3,826         3,970         3,974         4,072         4,010         3,747  
  Marketing and advertising     857         920         774         566         762         735         685         578  
  Merger expenses     –          –          –          2         2         26         111         3,239  
  Other expenses     7,065         7,660         7,383         8,125         7,284         7,082         7,561         6,085  
Total noninterest expense     28,838         28,295         28,102         28,640         27,405         26,598         28,073         29,352  
Income before income tax expense     40,007         39,214         37,735         35,833         34,517         33,714         31,152         24,074  
Income tax expense     15,484         15,069         14,413         13,485         13,054         12,776         11,734         9,347  
Net income     24,523         24,145         23,322         22,348         21,463         20,938         19,418         14,727  
Preferred stock dividends      –          –          –          62         180         179         180         180  
Net income available to common shareholders $   24,523     $   24,145     $   23,322     $   22,286     $   21,283     $   20,759     $   19,238     $   14,547  
                               
                               
Per Share Data:                              
Earnings per weighted average common share, basic $   0.73     $   0.72     $   0.70     $   0.67     $   0.64     $   0.62     $   0.62     $   0.51  
Earnings per weighted average common share, diluted  $   0.72     $   0.71     $   0.68     $   0.65     $   0.63     $   0.61     $   0.61     $   0.49  
Weighted average common shares outstanding, basic      33,590,183         33,588,141         33,518,998         33,462,937         33,400,973         33,367,476         31,082,715         28,777,778  
Weighted average common shares outstanding, diluted      34,187,171         34,183,209         34,104,237         34,069,786         34,026,412         33,997,989         31,776,323         29,632,685  
Actual shares outstanding     33,590,880         33,584,898         33,581,599         33,467,893         33,405,510         33,394,563         33,303,467         30,139,396  
Book value per common share at period end  $   24.28     $   23.48     $   22.71     $   22.07     $   21.38     $   20.76     $   20.11     $   18.21  
Tangible book value per common share at period end (1) $   21.08     $   20.27     $   19.48     $   18.83     $   18.10     $   17.46     $   16.82     $   14.56  
                               
Performance Ratios (annualized):                              
Return on average assets   1.50 %     1.57 %     1.54 %     1.50 %     1.47 %     1.51 %     1.49 %     1.21 %
Return on average common equity   12.04 %     12.40 %     12.39 %     12.08 %     11.95 %     12.18 %     13.24 %     11.67 %
Net interest margin   4.11 %     4.30 %     4.31 %     4.38 %     4.23 %     4.33 %     4.41 %     4.42 %
Efficiency ratio (2)   40.54 %     39.63 %     40.80 %     41.47 %     42.04 %     41.70 %     44.89 %     51.38 %
                               
Other Ratios:                              
Allowance for credit losses to total loans (3)   1.04 %     1.05 %     1.06 %     1.05 %     1.05 %     1.07 %     1.07 %     1.07 %
Nonperforming loans to total loans (3)   0.41 %     0.40 %     0.43 %     0.26 %     0.30 %     0.33 %     0.44 %     0.52 %
Allowance for credit losses to total nonperforming loans   255.29 %     264.44 %     249.03 %     397.95 %     347.82 %     328.98 %     244.12 %     205.30 %
Nonperforming assets to total assets   0.41 %     0.39 %     0.42 %     0.31 %     0.41 %     0.44 %     0.58 %     0.68 %
Net charge-offs (annualized) to average loans (3)   0.14 %     0.15 %     0.09 %     0.18 %     0.16 %     0.21 %     0.15 %     0.26 %
Tier 1 capital (to average assets)   11.12 %     11.24 %     11.01 %     10.90 %     11.96 %     12.03 %     12.19 %     10.69 %
Total capital (to risk weighted assets)   15.05 %     12.71 %     12.87 %     12.75 %     13.80 %     13.75 %     13.90 %     12.97 %
Common equity tier 1 capital (to risk weighted assets)   10.83 %     10.74 %     10.83 %     10.68 %     10.48 %     10.37 %     10.37 %   n/a
Tangible common equity ratio (1)   10.64 %     10.88 %     10.86 %     10.56 %     10.46 %     10.34 %     10.39 %     8.54 %
                               
Average Balances (in thousands):                              
Total assets $   6,492,274     $   6,191,164     $   6,072,533     $   5,907,023     $   5,775,283     $   5,561,069     $   5,270,301     $   4,844,409  
Total earning assets $   6,264,531     $   5,967,008     $   5,844,915     $   5,675,048     $   5,545,398     $   5,332,397     $   5,039,748     $   4,654,423  
Total loans $   5,422,677     $   5,266,305     $   5,070,386     $   4,859,391     $   4,636,298     $   4,499,871     $   4,376,248     $   3,993,020  
Total deposits $   5,353,834     $   5,178,501     $   5,143,670     $   4,952,282     $   4,842,706     $   4,655,234     $   4,330,403     $   4,025,900  
Total borrowings $   300,083     $   207,221     $   139,324     $   168,652     $   128,015     $   127,582     $   249,516     $   237,401  
Total shareholders’ equity $   809,973     $   783,318     $   756,916     $   757,199     $   778,279     $   755,541     $   661,364     $   561,467  
                               
(1) Tangible common equity to tangible assets (the “tangible common equity ratio”) and tangible book value per common share are non-GAAP financial measures derived from GAAP based amounts. The Company calculates the tangible common equity
ratio by excluding the balance of intangible assets from common shareholders’ equity and dividing by tangible assets. The Company calculates tangible book value per common share by dividing tangible common equity by common shares outstanding, 
as compared to book value per common share, which the Company calculates by dividing common shareholders’ equity by common shares outstanding. The Company considers this information important to shareholders as tangible equity is a measure
that is consistent with the calculation of capital for bank regulatory purposes, which excludes intangible assets from the calculation of risk based ratios and as such is useful for investors, regulators, management and others to evaluate capital adequacy
and to compare against other financial institutions.     
(2) Computed by dividing noninterest expense by the sum of net interest income and noninterest income.     
(3) Excludes loans held for sale.             
                               

 

CONTACT: EAGLE BANCORP, INC.
CONTACT:
Michael T. Flynn
301.986.1800
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