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Eagle Bancorp, Inc. Announces Record Earnings Representing a 16% Increase for the Full Year 2016 and a 15% Increase in Net Income for the Fourth Quarter 2016

Company Release - 1/18/2017 4:15 PM ET

BETHESDA, Md., Jan. 18, 2017 (GLOBE NEWSWIRE) -- Eagle Bancorp, Inc. (the “Company”) (NASDAQ:EGBN), the parent company of EagleBank, today announced record quarterly net income of $25.7 million for the three months ended December 31, 2016, a 15% increase over the $22.3 million net income for the three months ended December 31, 2015. 

Eagle Bancorp, Inc. Logo


Net income per basic common share for the three months ended December 31, 2016 was $0.76 compared to $0.67 for the same period in 2015, a 13% increase. Net income per diluted common share for the three months ended December 31, 2016 was $0.75 compared to $0.65 for the same period in 2015, a 15% increase.

For the year ended December 31, 2016, the Company’s net income was $97.7 million, a 16% increase over the $84.2 million for the year ended December 31, 2015. Net income available to common shareholders was $97.7 million ($2.91 per basic common share and $2.86 per diluted common share), as compared to $83.6 million ($2.54 per basic common share and $2.50 per diluted common share) for the same period in 2015, a 15% increase per basic share and a 14% increase per diluted share.

“We are very pleased to report a continued 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 32 consecutive quarters dating back to the first quarter of 2009.  This strong financial performance has resulted from a combination of steady balance sheet growth, revenue growth, solid asset quality, and favorable operating leverage.” Loan balances increased 4% in the fourth quarter and deposit balances increased 3%.  Mr. Paul added, “A lower net interest margin in the fourth quarter (3.96% versus 4.11% in the third quarter 2016) was due substantially to higher average liquidity as average deposit growth in the fourth quarter exceeded average loan growth by about $275 million. The loan pipeline remains strong, and the yield on the loan portfolio in the fourth quarter was 3 basis points higher at 5.11% versus 5.08% for the third quarter, as the Company continues to demonstrate discipline in its loan pricing. Additionally, our favorable credit quality improved even more in the fourth quarter as we recorded net recoveries of $97 thousand for the latest three months and the level of nonperforming assets was just 0.30% of total assets at December 31, 2016. Mr. Paul further added, “that the Company’s operating efficiency, another key driver of financial performance remained quite strong in the fourth quarter, as noninterest expense growth was 3% while total revenue increased by 4%, which further improved the efficiency ratio to 40.22% for the most recent quarter.”             

The Company’s financial performance in the fourth quarter of 2016 as compared to the fourth quarter in 2015 was highlighted by growth in average total loans of 15% and by growth in average total deposits of 17%. Total revenue increased 7% in the fourth quarter of 2016 over 2015 and increased 4% over the third quarter of 2016. Noninterest expenses increased 4% for the fourth quarter 2016 over 2015 and 3% over the third quarter of 2016.  For the fourth quarter in 2016, the efficiency ratio was 40.22%, as compared to 40.54% in the third quarter of 2016 and 41.47% for the fourth quarter in 2015. Mr. Paul added, “The Company remains committed to cost management measures and strong productivity.”

The annualized return on average assets (“ROAA”) was 1.46% for the fourth quarter in 2016 and 1.52% for the twelve months ended December 31, 2016. The annualized return on average common equity (“ROACE”) was 12.26% for the fourth quarter in 2016 and 12.27% for the year ended December 31, 2016.

For the full year 2016, loans grew 14% and averaged 16% higher. For the full year 2016, deposits increased 11% and averaged 14% higher. For the full year 2016, total revenue increased by 10% while total noninterest expenses increased 4%.  

For the fourth quarter of 2016, the net interest margin was 3.96%, as compared to 4.11% for the third quarter of 2016 and 4.38% for the fourth quarter of 2015. As noted above, the higher average liquidity position in the fourth quarter was the most significant factor in the quarterly net interest margin decline of 15 basis points. In addition to stronger average deposit growth over loan growth in the fourth quarter (8% versus 3%), the sub-debt raise in late July at a cost of 5.00% has negatively impacted the net interest margin in the fourth quarter by 18 basis points.

For the full year of 2016, the net interest margin was 4.16% as compared to 4.33% for the year ended December 31, 2015. The sub-debt raise in July 2016 negatively impacted the net interest margin in the twelve month period ending December 31, 2016 by nine 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 improved further in the fourth quarter of 2016 from an already solid position. For the fourth quarter of 2016, the Company recorded a net recovery (annualized) of 0.01% of average loans, as compared to net charge-offs (annualized) of 0.18% of average loans for the fourth quarter of 2015. At December 31, 2016, the Company’s nonperforming loans amounted to $17.9 million (0.31% of total loans) as compared to $22.2 million (0.41% of total loans) at September 30, 2016 and $13.2 million (0.26% of total loans) at December 31, 2015. Nonperforming assets amounted to $20.6 million (0.30% of total assets) at December 31, 2016 compared to $27.5 million (0.41% of total assets) at September 30, 2016 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 December 31, 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 1.04% of total loans at September 30, 2016 and 1.05% at December 31, 2015. The allowance for credit losses represented 330% of nonperforming loans at December 31, 2016.

Total assets at December 31, 2016 were $6.89 billion, a 2% increase as compared to $6.76 billion at September 30, 2016, and a 13% increase as compared to $6.08 billion at December 31, 2015. Total loans (excluding loans held for sale) were $5.68 billion at December 31, 2016, a 4% increase as compared to $5.48 billion at September 30, 2016, and a 14% increase as compared to $5.00 billion at December 31, 2015. Loans held for sale amounted to $51.6 million at December 31, 2016 as compared to $78.1 million at September 30, 2016, a 34% decrease, and $47.5 million at December 31, 2015, a 9% increase. The investment portfolio totaled $538.1 million at December 31, 2016, a 25% increase from the $430.7 million balance at September 30, 2016. As compared to December 31, 2015, the investment portfolio at December 31, 2016 increased by $50.2 million or 10%.

Total deposits at December 31, 2016 were $5.72 billion, compared to deposits of $5.56 billion at September 30, 2016, a 3% increase, and deposits of $5.16 billion at December 31, 2015, an 11% increase. Total borrowed funds (excluding customer repurchase agreements) were $216.5 million at December 31, 2016, $266.4 million at September 30, 2016 and $68.9 million at December 31, 2015.

Total shareholders’ equity at December 31, 2016 increased 3%, to $842.8 million, compared to $815.6 million at September 30, 2016, and increased 14%, from $738.6 million at December 31, 2015. During the fourth quarter of 2016, 378,495 net shares were issued upon the exercise in full of the outstanding warrant. Increased retained earnings together with the $150 million of qualifying capital raised in a ten year sub-debt issue in July 2016 has enhanced the Company’s capital position well in excess of regulatory requirements for well capitalized status. The total risk based capital ratio was 14.89% at December 31, 2016, as compared to 15.05% at September 30, 2016, and 12.75% at December 31, 2015. In addition, the tangible common equity ratio was 10.84% at December 31, 2016, compared to 10.64% at September 30, 2016 and 10.56% at December 31, 2015.

Analysis of the three months ended December 31, 2016 compared to December 31, 2015

For the three months ended December 31, 2016, the Company reported an annualized ROAA of 1.46% as compared to 1.50% for the three months ended December 31, 2015. The annualized ROACE for the three months ended December 31, 2016 was 12.26%, as compared to 12.08% for the three months ended December 31, 2015.

Total revenue (net interest income plus noninterest income) for the fourth quarter of 2016 was $74.0 million, or 7% above the $69.1 million of total revenue earned for the fourth quarter of 2015 and was 4% higher than the $71.1 million of revenue earned in the third quarter of 2016.

Net interest income increased 7% for the three months ended December 31, 2016 over the same period in 2015 ($67.0 million versus $62.6 million). Growth in average earning assets was 19% and the net interest margin was 3.96% for the three months ended December 31, 2016, as compared to 4.38% for the three months ended December 31, 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 5.11% for the fourth quarter in 2016 has been a significant factor in its overall profitability.

The provision for credit losses was $2.1 million for the three months ended December 31, 2016 as compared to $4.6 million for the three months ended December 31, 2015. The lower provisioning in the fourth quarter of 2016, as compared to the fourth quarter of 2015, is primarily due to overall improved asset quality. Net recoveries of $97 thousand in the fourth quarter of 2016 represented an annualized 0.01% of average loans, excluding loans held for sale, as compared to $2.2 million of net charge-offs or an annualized 0.18% of average loans, excluding loans held for sale, in the fourth quarter of 2015. Net charge-offs in the fourth quarter of 2016 were attributable primarily to commercial loans ($814 thousand) offset by a recovery in investment-commercial real estate loans ($895 thousand).

Noninterest income for the three months ended December 31, 2016 increased to $7.0 million from $6.5 million for the three months ended December 31, 2015, an 8% increase. This increase was primarily due to higher net gains on sales of residential mortgage loans of $971 thousand. Residential mortgage loans closed were $241 million for the fourth quarter in 2016 versus $181 million for the fourth quarter of 2015.   

The efficiency ratio, which measures the ratio of noninterest expense to total revenue, was 40.22% for the fourth quarter of 2016, as compared to 41.47% for the fourth quarter of 2015. Noninterest expenses totaled $29.8 million for the three months ended December 31, 2016, as compared to $28.6 million for the three months ended December 31, 2015, a 4% increase. Cost increases for salaries and benefits were $1.9 million, due primarily to increased staff, merit increases and incentive compensation. Premises and equipment expenses were $271 thousand lower, due primarily to lower leasing expense as two branch offices were downsized and two leases expired. Marketing and advertising expense increased by $378 thousand primarily due to costs associated with digital and print advertising and sponsorships. FDIC insurance premium expense decreased by $281 thousand due to a change in the FDIC insurance premium formula for small institutions effective July 1, 2016. Other expenses decreased by $669 thousand primarily due to lower fees incurred to maintain OREO properties.

Analysis of the year ended December 31, 2016 compared to December 31, 2015

For the year ended December 31, 2016, the Company reported an annualized ROAA of 1.52% as compared to 1.49% for the year ended December 31, 2015. The annualized ROACE for the year ended December 31, 2016 was 12.27%, as compared to 12.32% for the year ended December 31, 2015. For the year ended December 31, 2016 total revenue was $285.4 million, as compared to $260.6 million for the same period in 2015, a 10% increase.  

Net interest income increased 10% for the year ended December 31, 2016 over the same period in 2015 ($258.2 million versus $233.9 million). Growth in average earning assets was 15% and the net interest margin was 4.16% for the year ended December 31, 2016 as compared to 4.33% 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 5.11% for the year ended December 31, 2016 has been a significant factor in its overall profitability.

The provision for credit losses was $11.3 million for the year ended December 31, 2016 as compared to $14.6 million for the year ended December 31, 2015. The lower provisioning for 2016 is due to lower net charge-offs and to overall improved asset quality. Net charge-offs of $4.9 million during 2016 represented an annualized 0.09% of average loans, excluding loans held for sale, as compared to $8.0 million or an annualized 0.17% of average loans, excluding loans held for sale, during 2015. Net charge-offs during 2016 were attributable primarily to commercial ($3.5 million) and investment-commercial real estate ($1.4 million).

Noninterest income for the year ended December 31, 2016 was $27.3 million as compared to $26.6 million for the year ended December 31, 2015, a 3% increase. This increase was primarily due to increased service charges on deposit accounts, increased gains on sale of SBA loans, and increased gains on sale of OREO.

Noninterest expenses totaled $115.0 million for the year ended December 31, 2016, as compared to $110.7 million for the year ended December 31, 2015, a 4% increase. Cost increases for salaries and benefits were $5.3 million, due primarily to increased staff, merit increases, and incentive compensation. Premises and equipment expenses were $908 thousand lower, due primarily to lower leasing expense as two branch offices were downsized and two locations were closed due to the leases expiring. Marketing and advertising expense increased by $747 thousand primarily due to costs associated with digital and print advertising and sponsorships. Data processing expense increased $214 thousand, while FDIC insurance premium expense decreased by $436 thousand due to a change in the FDIC insurance premium formula for small institutions effective July 1, 2016. For 2016, the efficiency ratio was 40.29% as compared to 42.49% for the same period in 2015.

The financial information which follows provides more detail on the Company’s financial performance for the three and twelve months ended December 31, 2016 as compared to the three and twelve months ended December 31, 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 fourth quarter 2016 financial results on Thursday, January 19, 2017 at 10:00 a.m. eastern standard time. The public is invited to listen to this conference call by dialing 1.877.303.6220, conference ID Code is 46041015, 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 February 2, 2017.

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)   
 Three Months Ended December 31, Twelve Months Ended December 31,
  2016   2015   2016   2015 
Income Statements:       
Total interest income$  75,795  $  67,311  $  285,805  $  253,180 
Total interest expense   8,771     4,735     27,641     19,238 
Net interest income   67,024     62,576     258,164     233,942 
Provision for credit losses   2,112     4,595     11,331     14,638 
Net interest income after provision for credit losses   64,912     57,981     246,833     219,304 
Noninterest income (before investment gains and extinguishment of debt)   6,943     6,462     26,090     25,504 
Gain on sale of investment securities   71     30     1,194     2,254 
Loss on early extinguishment of debt   -      -      -      (1,130)
Total noninterest income   7,014     6,492     27,284     26,628 
Total noninterest expense  29,780
     28,640     115,015     110,716 
Income before income tax expense   42,146     35,833     159,102     135,216 
Income tax expense   16,429     13,485     61,395     51,049 
Net income   25,717     22,348     97,707     84,167 
Preferred stock dividends    -      62     -      601 
Net income available to common shareholders$  25,717  $  22,286  $  97,707  $  83,566 
        
Per Share Data:       
Earnings per weighted average common share, basic$  0.76  $  0.67  $  2.91  $  2.54 
Earnings per weighted average common share, diluted$  0.75  $  0.65  $  2.86  $  2.50 
Weighted average common shares outstanding, basic    33,650,963     33,462,937     33,587,254     32,836,449 
Weighted average common shares outstanding, diluted    34,233,940     34,069,786     34,181,616     33,479,592 
Actual shares outstanding at period end   34,023,850     33,467,893     34,023,850     33,467,893 
Book value per common share at period end $  24.77  $  22.07  $  24.77  $  22.07 
Tangible book value per common share at period end (1)$  21.61  $  18.83  $  21.61  $  18.83 
        
Performance Ratios (annualized):       
Return on average assets 1.46%  1.50%  1.52%  1.49%
Return on average common equity 12.26%  12.08%  12.27%  12.32%
Net interest margin 3.96%  4.38%  4.16%  4.33%
Efficiency ratio (2) 40.22
%  41.47%  40.29%  42.49%
        
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 330.49%  397.95%  330.49%  397.95%
Nonperforming loans to total loans (3) 0.31%  0.26%  0.31%  0.26%
Nonperforming assets to total assets 0.30%  0.31%  0.30%  0.31%
Net charge-offs (annualized) to average loans (3) (0.01%)  0.18%  0.09%  0.17%
Common equity to total assets 12.23%  12.16%  12.23%  12.16%
Tier 1 capital (to average assets) 10.72%  10.90%  10.72%  10.90%
Total capital (to risk weighted assets) 14.89%  12.75%  14.89%  12.75%
Common equity tier 1 capital (to risk weighted assets) 10.80%  10.68%  10.80%  10.68%
Tangible common equity ratio (1) 10.84%  10.56%  10.84%  10.56%
        
Loan Balances - Period End (in thousands):       
Commercial and Industrial$  1,200,728  $  1,052,257  $  1,200,728  $  1,052,257 
Commercial real estate - owner occupied $  640,870  $  498,103  $  640,870  $  498,103 
Commercial real estate - income producing $  2,509,518  $  2,115,478  $  2,509,518  $  2,115,478 
1-4 Family mortgage$  152,748  $  147,365  $  152,748  $  147,365 
Construction - commercial and residential$  932,531  $  985,607  $  932,531  $  985,607 
Construction - C&I (owner occupied)$  126,038  $  79,769  $  126,038  $  79,769 
Home equity$  105,096  $  112,885  $  105,096  $  112,885 
Other consumer $  10,365  $  6,904  $  10,365  $  6,904 
        
Average Balances (in thousands):       
Total assets$  6,984,492  $  5,907,022  $  6,436,774  $  5,630,567 
Total earning assets$  6,752,859  $  5,675,730  $  6,208,976  $  5,400,574 
Total loans$  5,591,790  $  4,859,391  $  5,338,716  $  4,594,395 
Total deposits$  5,796,516  $  4,952,282  $  5,369,261  $  4,697,263 
Total borrowings$  312,842  $  168,652  $  240,232  $  168,110 
Total shareholders’ equity$  834,823  $  757,199  $  796,400  $  738,468 

(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)    
 Twelve Months Ended Twelve Months Ended 
 December 31, 2016 December 31, 2015 
Common shareholders' equity$  842,799  $  738,601  
Less: Intangible assets   (107,419)    (108,542) 
Tangible common equity$  735,380  $  630,059  
     
Book value per common share$  24.77  $  22.07  
Less: Intangible book value per common share     (3.16)    (3.24) 
Tangible book value per common share$  21.61  $  18.83  
     
Total assets$  6,890,097  $  6,075,577  
Less: Intangible assets   (107,419)    (108,542) 
Tangible assets$  6,782,678  $  5,967,035  
Tangible common equity ratio 10.84%  10.56% 
   

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

(3) Excludes loans held for sale.

Eagle Bancorp, Inc.     
Consolidated Balance Sheets (Unaudited)     
(dollars in thousands, except per share data)     
      
AssetsDecember 31, 2016 September 30, 2016 December 31, 2015
Cash and due from banks$10,285  $10,615  $10,270 
Federal funds sold 2,397   5,262   3,791 
Interest bearing deposits with banks and other short-term investments 355,481   503,150   284,302 
Investment securities available for sale, at fair value 538,108   430,668   487,869 
Federal Reserve and Federal Home Loan Bank stock 21,600   19,920   16,903 
Loans held for sale 51,629   78,118   47,492 
Loans 5,677,893   5,481,975   4,998,368 
Less allowance for credit losses (59,073)  (56,864)  (52,687)
Loans, net 5,618,820   5,425,111   4,945,681 
Premises and equipment, net 20,661   19,370   18,254 
Deferred income taxes 48,220   41,065   40,311 
Bank owned life insurance 60,130   59,747   58,682 
Intangible assets, net 107,419   107,694   108,542 
Other real estate owned 2,694   5,194   5,852 
Other assets 52,653   56,218   47,628 
Total Assets$6,890,097  $6,762,132  $6,075,577 
      
Liabilities and Shareholders' Equity     
Deposits:     
Noninterest bearing demand$1,775,684  $1,668,271  $1,405,067 
Interest bearing transaction 289,122   297,973   178,797 
Savings and money market 2,902,560   2,802,519   2,835,325 
Time, $100,000 or more 464,843   452,015   406,570 
Other time 283,906   337,371   332,685 
Total deposits 5,716,115   5,558,149   5,158,444 
Customer repurchase agreements 68,876   71,642   72,356 
Other short-term borrowings -   50,000   - 
Long-term borrowings 216,514   216,419   68,928 
Other liabilities 45,793   50,283   37,248 
Total liabilities 6,047,298   5,946,493   5,336,976 
      
Shareholders' Equity     
      
Common stock, par value $.01 per share; shares authorized 100,000,000, shares issued and outstanding 34,023,850, 33,590,880, and 33,467,893, respectively. 338   333   331 
Warrant -   946   946 
Additional paid in capital 513,531   509,706   503,529 
Retained earnings 331,311   305,594   233,604 
Accumulated other comprehensive (loss) income (2,381)  (940)  191 
Total Shareholders' Equity 842,799   815,639   738,601 
Total Liabilities and Shareholders' Equity$6,890,097  $6,762,132  $6,075,577 
      

 

Eagle Bancorp, Inc.       
Consolidated Statements of Operations (Unaudited)       
(dollars in thousands, except per share data)       
    
 Three Months Ended December 31, Twelve Months Ended December 31,
Interest Income 2016  2015  2016  2015 
Interest and fees on loans$  72,486 $  64,275 $  274,488 $  242,340 
Interest and dividends on investment securities   2,508    2,903    9,629    10,092 
Interest on balances with other banks and short-term investments   798    129    1,654    732 
Interest on federal funds sold    3    4    34    16 
Total interest income   75,795    67,311    285,805    253,180 
Interest Expense       
Interest on deposits   5,736    3,674    19,249    14,343 
Interest on customer repurchase agreements    52    39    167    132 
Interest on short-term borrowings   5    32    732    86 
Interest on long-term borrowings   2,978    990    7,493    4,677 
Total interest expense
   8,771    4,735    27,641    19,238 
Net Interest Income    67,024    62,576    258,164    233,942 
Provision for Credit Losses   2,112    4,595    11,331    14,638 
Net Interest Income After Provision For Credit Losses   64,912    57,981    246,833    219,304 
        
Noninterest Income       
Service charges on deposits   1,518    1,407    5,821    5,397 
Gain on sale of loans   3,099    2,609    11,563    11,973 
Gain on sale of investment securities   71    30    1,194    2,254 
Loss on early extinguishment of debt   -     -     -     (1,130)
Increase in the cash surrender value of  bank owned life insurance    383    398    1,554    1,589 
Other income   1,943    2,048    7,152    6,545 
Total noninterest income   7,014    6,492    27,284    26,628 
Noninterest Expense       
Salaries and employee benefits   17,853    15,977    67,010    61,749 
Premises and equipment expenses   3,699    3,970    15,118    16,026 
Marketing and advertising   944    566    3,495    2,748 
Data processing   2,031    1,936    7,747    7,533 
Legal, accounting and professional fees   828    814    3,673    3,729 
FDIC insurance   525    806    2,718    3,154 
Merger expenses   -     2    -     141 
Other expenses   3,900    4,569    15,254    15,636 
Total noninterest expense 29,780  28,640  115,015  110,716 
Income Before Income Tax Expense   42,146    35,833    159,102    135,216 
Income Tax Expense   16,429    13,485    61,395    51,049 
Net Income    25,717    22,348    97,707    84,167 
Preferred Stock Dividends    -     62    -     601 
Net Income Available to Common Shareholders$  25,717 $  22,286 $  97,707 $  83,566 
        
Earnings Per Common Share       
Basic$  0.76 $  0.67 $  2.91 $  2.54 
Diluted$  0.75 $  0.65 $  2.86 $  2.50 
        

 

Eagle Bancorp, Inc.
Consolidated Average Balances, Interest Yields And Rates (Unaudited)
(dollars in thousands)
        
 Three Months Ended December 31,
  2016   2015 
 Average BalanceInterestAverage
Yield/Rate
 Average BalanceInterestAverage
Yield/Rate
ASSETS       
Interest earning assets:       
Interest bearing deposits with other banks and other short-term investments$599,281$7980.53% $225,346$1290.23%
Loans held for sale (1) 70,874 6153.47%  40,587 3833.77%
Loans (1) (2)  5,591,790 71,8715.11%  4,859,391 63,8925.22%
Investment securities available for sale (2) 487,730 2,5082.05%  544,129 2,9032.12%
Federal funds sold 3,184 30.37%  6,277 40.19%
Total interest earning assets 6,752,859 75,7954.47%  5,675,730 67,3114.71%
        
Total noninterest earning assets 289,615    281,800  
Less: allowance for credit losses 57,982    50,508  
Total noninterest earning assets 231,633    231,292  
TOTAL ASSETS$6,984,492   $5,907,022  
        
LIABILITIES AND SHAREHOLDERS' EQUITY       
Interest bearing liabilities:       
Interest bearing transaction$303,994$2010.26% $195,167$830.17%
Savings and money market 2,941,919 3,7150.50%  2,560,727 2,1180.33%
Time deposits 786,782 1,8200.92%  764,761 1,4730.76%
Total interest bearing deposits 4,032,695 5,7360.57%  3,520,655 3,6740.41%
Customer repurchase agreements 95,283 520.22%  71,591 390.21%
Other short-term borrowings 1,090 51.79%  28,154 320.00%
Long-term borrowings 216,469 2,9785.38%  68,907 9905.62%
Total interest bearing liabilities 4,345,537 8,7710.80%  3,689,307 4,7350.51%
        
Noninterest bearing liabilities:       
Noninterest bearing demand 1,763,821    1,431,627  
Other liabilities 40,311    28,889  
Total noninterest bearing liabilities 1,804,132    1,460,516  
        
Shareholders’ equity 834,823    757,199  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$6,984,492   $5,907,022  
        
Net interest income $67,024   $62,576 
Net interest spread  3.67%   4.20%
Net interest margin  3.96%   4.38%
Cost of funds  0.51%   0.33%
        
(1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $4.4 million and $3.8 million for the three months ended December 31, 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)
        
 Years Ended December 31,
  2016   2015 
 Average BalanceInterestAverage
Yield/Rate
 Average BalanceInterestAverage
Yield/Rate
ASSETS       
Interest earning assets:       
Interest bearing deposits with other banks and other short-term investments$339,947$1,6540.49% $308,848$7320.24%
Loans held for sale (1) 53,590 1,9033.55%  44,533 1,6713.75%
Loans (1) (2)  5,338,716 272,5855.11%  4,594,395 240,6695.24%
Investment securities available for sale (2) 468,773 9,6292.05%  445,986 10,0922.26%
Federal funds sold 7,950 340.43%  6,812 160.23%
Total interest earning assets 6,208,976 285,8054.60%  5,400,574 253,1804.69%
        
Total noninterest earning assets 283,687    278,804  
Less: allowance for credit losses 55,889
    48,811  
Total noninterest earning assets 227,798    229,993  
TOTAL ASSETS$6,436,774   $5,630,567  
        
LIABILITIES AND SHAREHOLDERS' EQUITY       
Interest bearing liabilities:       
Interest bearing transaction$251,954$6460.26% $182,518$2910.16%
Savings and money market 2,728,347 12,0390.44%  2,425,286 8,1850.34%
Time deposits 769,801 6,5640.85%  774,943 5,8670.76%
Total interest bearing deposits 3,750,102 19,2490.51%  3,382,747 14,3430.42%
Customer repurchase agreements 77,833 1670.21%  59,141 1320.22%
Other short-term borrowings 29,376 7322.45%  27,659 860.31%
Long-term borrowings 133,023 7,4935.54%  81,310 4,6775.67%
Total interest bearing liabilities 3,990,334 27,6410.69%  3,550,857 19,2380.54%
        
Noninterest bearing liabilities:       
Noninterest bearing demand 1,619,159    1,314,516  
Other liabilities 30,881    26,726  
Total noninterest bearing liabilities 1,650,040    1,341,242  
        
Shareholders’ equity 796,400    738,468  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$6,436,774   $5,630,567  
        
Net interest income $258,164   $233,942 
Net interest spread  3.91%   4.15%
Net interest margin  4.16%   4.33%
Cost of funds  0.44%   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 $16.1 million and $12.6 million for the years ended December 31, 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  
 December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31, 
Income Statements: 2016   2016   2016   2016   2015   2015   2015   2015  
Total interest income$75,795  $72,431  $69,772  $67,807  $67,311  $63,981  $62,423  $59,465  
Total interest expense 8,771   7,703   5,950   5,217   4,735   4,896   4,873   4,734  
Net interest income 67,024   64,728   63,822   62,590   62,576   59,085   57,550   54,731  
Provision for credit losses 2,112   2,288   3,888   3,043   4,595   3,262   3,471   3,310  
Net interest income after provision for credit losses 64,912   62,440   59,934   59,547   57,981   55,823   54,079   51,421  
Noninterest income (before investment gains & extinguishment of debt) 6,943   6,404   7,077   5,666   6,462   6,039   6,233   6,770  
Gain on sale of investment securities 71   1   498   624   30   60   -   2,164  
Loss on early extinguishment of debt -   -   -   -   -   -   -   (1,130) 
Total noninterest income 7,014   6,405   7,575   6,290   6,492   6,099   6,233   7,804  
Salaries and employee benefits 17,853   17,130   15,908   16,119   15,977   15,383   14,683   15,706  
Premises and equipment 4   3,786   3,807   3,826   3,970   3,974   4,072   4,010  
Marketing and advertising 944   857   920   774   566   762   735   685  
Merger expenses -   -   -   -   2   2   26   111  
Other expenses 7,284   7,065   7,660   7,383   8,125   7,284   7,082   7,561  
Total noninterest expense 29,780
   28,838   28,295   28,102   28,640   27,405   26,598   28,073  
Income before income tax expense 42,146
   40,007   39,214   37,735   35,833   34,517   33,714   31,152  
Income tax expense 16,429   15,484   15,069   14,413   13,485   13,054   12,776   11,734  
Net income 25,717   24,523   24,145   23,322   22,348   21,463   20,938   19,418  
Preferred stock dividends -   -   -   -   62   180   179   180  
Net income available to common shareholders$25,717  $24,523  $24,145  $23,322  $22,286  $21,283  $20,759  $19,238  
                 
                 
Per Share Data:                
Earnings per weighted average common share, basic$0.76  $0.73  $0.72  $0.70  $0.67  $0.64  $0.62  $0.62  
Earnings per weighted average common share, diluted$0.75  $0.72  $0.71  $0.68  $0.65  $0.63  $0.61  $0.61  
Weighted average common shares outstanding, basic 33,650,963   33,590,183   33,588,141   33,518,998   33,462,937   33,400,973   33,367,476   31,082,715  
Weighted average common shares outstanding, diluted 34,233,940   34,187,171   34,183,209   34,104,237   34,069,786   34,026,412   33,997,989   31,776,323  
Actual shares outstanding 34,023,850   33,590,880   33,584,898   33,581,599   33,467,893   33,405,510   33,394,563   33,303,467  
Book value per common share at period end$24.77  $24.28  $23.48  $22.71  $22.07  $21.38  $20.76  $20.11  
Tangible book value per common share at period end (1)$21.61  $21.08  $20.27  $19.48  $18.83  $18.10  $17.46  $16.82  
                 
Performance Ratios (annualized):                
Return on average assets 1.46%  1.50%  1.57%  1.54%  1.50%  1.47%  1.51%  1.49% 
Return on average common equity 12.26%  12.04%  12.40%  12.39%  12.08%  11.95%  12.18%  13.24% 
Net interest margin 3.96%  4.11%  4.30%  4.31%  4.38%  4.23%  4.33%  4.41% 
Efficiency ratio (2) 40.22
%  40.54%  39.63%  40.80%  41.47%  42.04%  41.70%  44.89% 
                 
Other Ratios:                
Allowance for credit losses to total loans (3) 1.04%  1.04%  1.05%  1.06%  1.05%  1.05%  1.07%  1.07% 
Nonperforming loans to total loans (3) 0.31%  0.41%  0.40%  0.43%  0.26%  0.30%  0.33%  0.44% 
Allowance for credit losses to total nonperforming loans 330.49%  255.29%  264.44%  249.03%  397.95%  347.82%  328.98%  244.12% 
Nonperforming assets to total assets 0.30%  0.41%  0.39%  0.42%  0.31%  0.41%  0.44%  0.58% 
Net charge-offs (annualized) to average loans (3) -0.01%  0.14%  0.15%  0.09%  0.18%  0.16%  0.21%  0.15% 
Tier 1 capital (to average assets) 10.72%  11.12%  11.24%  11.01%  10.90%  11.96%  12.03%  12.19% 
Total capital (to risk weighted assets) 14.89%  15.05%  12.71%  12.87%  12.75%  13.80%  13.75%  13.90% 
Common equity tier 1 capital (to risk weighted assets) 10.80%  10.83%  10.74%  10.83%  10.68%  10.48%  10.37%  10.37% 
Tangible common equity ratio (1) 10.84%  10.64%  10.88%  10.86%  10.56%  10.46%  10.34%  10.39% 
                 
Average Balances (in thousands):                
Total assets$6,984,492  $6,492,274  $6,191,164  $6,072,533  $5,907,022  $5,775,283  $5,561,069  $5,270,301  
Total earning assets$6,752,859  $6,264,531  $5,967,008  $5,844,915  $5,675,730  $5,545,398  $5,332,397  $5,039,748  
Total loans$5,591,790  $5,422,677  $5,266,305  $5,070,386  $4,859,391  $4,636,298  $4,499,871  $4,376,248  
Total deposits$5,796,516  $5,353,834  $5,178,501  $5,143,670  $4,952,282  $4,842,706  $4,655,234  $4,330,403  
Total borrowings$312,842  $300,083  $207,221  $139,324  $168,652  $128,015  $127,582  $249,516  
Total shareholders’ equity$834,823  $809,973  $783,318  $756,916  $757,199  $778,279  $755,541  $661,364  
                 
(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.                
EAGLE BANCORP, INC.
CONTACT:
Michael T. Flynn
301.986.1800

Source: Eagle Bancorp, Inc.