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Eagle Bancorp, Inc. Announces Another Quarter of Record Earnings With Second Quarter 2017 Net Income up 15% Over 2016

Company Release - 7/19/2017 4:15 PM ET

BETHESDA, Md., July 19, 2017 (GLOBE NEWSWIRE) -- Eagle Bancorp, Inc. (the “Company”) (NASDAQ:EGBN), the parent company of EagleBank, today announced record quarterly net income of $27.8 million for the three months ended June 30, 2017, a 15% increase over the $24.1 million net income for the three months ended June 30, 2016. Net income per basic common share for the three months ended June 30, 2017 was $0.81 compared to $0.72 for the same period in 2016, a 13% increase. Net income per diluted common share for the three months ended June 30, 2017 was $0.81 compared to $0.71 for the same period in 2016, a 14% increase.

Eagle Bancorp, Inc. Logo


For the six months ended June 30, 2017, the Company’s net income was $54.8 million, a 15% increase over the $47.5 million for the same period in 2016. Net income per basic common share for the six months ended June 30, 2017 was $1.61 compared to $1.41 for the same period in 2016, a 14% increase. Net income per diluted common share for the six months ended June 30, 2017 was $1.60 compared to $1.39 for the same period in 2016, a 15% increase.

“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 34 consecutive quarters dating back to the first quarter of 2009. We are proud that this performance has been the result of a combination of balance sheet growth, revenue growth, solid asset quality, and improved operating leverage. We continued to benefit from growth in new loans even while anticipated loan maturities increased. Notwithstanding such payoffs, we are very pleased to report continued growth in earnings and earnings per share. Additionally, the new FHA Multifamily lending division is beginning to add revenue."

The Company’s financial performance for the six months ended June 30, 2017 as compared to June 30, 2016 was highlighted by:

  • growth in total loans of 11% over the prior year;
  • growth in total deposits of 10% over the prior year;
  • growth in total revenue of 7% for the first six months of 2017 over 2016;
  • a year-to-date annualized net charge-off ratio to average loans of 0.03%;
  • noninterest income contribution from our FHA Multifamily lending division;
  • further improvement in operating leverage from an already favorable position; and
  • a reduction in the efficiency ratio to 39.57% for the first six months of 2017.

Mr. Paul added, “At a time when the net interest margin of banks is being challenged by rising rates, the Company remains committed to cost management measures and strong productivity.” The strong second quarter earnings resulted in an annualized return on average assets (“ROAA”) of 1.60% and an annualized return on average common equity (“ROACE”) of 12.51%.

For the first six months of 2017, total loans grew 5% over December 31, 2016, and averaged 12% higher in the first six months of 2017 as compared to the first six months of 2016. Loan growth has moderated in the second quarter due to both our being more selective in new credit opportunities and due to higher levels of loan maturities as projects continue to perform well. At June 30, 2017, total deposits were 3% higher than deposits at December 31, 2016, while deposits averaged 9% higher for the first six months of 2017 compared with the first six months of 2016.

The net interest margin (“NIM”) was 4.16% for the second quarter of 2017 which was two basis points higher than first quarter of 2017. Mr. Paul noted, “We believe that our NIM remains favorable to peer banks. Importantly, we have been able to sustain attractive loan yields which were 5.14% for the second quarter, up one basis point from first quarter and up four basis points from second quarter in 2016. By achieving better loan yields, which is in part due to having a high percentage of variable rate loans that benefit from short term rate increases by the Federal Reserve, we are doing well in offsetting a higher cost of funds. The Company’s focus continues to be on all the factors that contribute to earnings per share growth, as opposed to dependence on any one factor.”

Total revenue (net interest income plus noninterest income) for the second quarter of 2017 was $76.7 million, or 7% above the $71.4 million of total revenue earned for the second quarter of 2016 and was 5% higher than the $73.0 million of revenue earned in the first quarter of 2017. For the six month periods, total revenue was $149.7 million for 2017, as compared to $140.3 million in 2016, a 7% increase.  

The primary driver of the Company’s revenue growth for the second quarter of 2017 as compared to the second quarter in 2016 was its net interest income growth of 9% ($69.7 million versus $63.8 million). Noninterest income (excluding investment gains) declined by 1% in the second quarter 2017 over 2016, due substantially to higher sales in 2016 of Small Business Administration (“SBA”) and residential mortgage loans and the resulting gains on the sale of these loans. The lower revenue associated with SBA and residential mortgage loan sales was effectively offset by income of $642 thousand (net of certain transaction expenses) on the origination, securitization, servicing and sale of FHA Multifamily-Backed Government National Mortgage Association (“GNMA”) securities.

Asset quality measures remained solid at June 30, 2017. Net charge-offs (annualized) were 0.02% of average loans for the second quarter of 2017, as compared to 0.15% of average loans for the second quarter of 2016. At June 30, 2017, the Company’s nonperforming loans amounted to $17.1 million (0.29% of total loans) as compared to $21.4 million (0.40% of total loans) at June 30, 2016 and $17.9 million (0.31% of total loans) at December 31, 2016. Nonperforming assets amounted to $18.5 million (0.26% of total assets) at June 30, 2017 compared to $24.5 million (0.39% of total assets) at June 30, 2016 and $20.6 million (0.30% of total assets) at December 31, 2016.

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 allowance for credit losses, at 1.02% of total loans (excluding loans held for sale) at June 30, 2017, is adequate to absorb potential credit losses within the loan portfolio at that date. The allowance for credit losses was 1.05% at June 30, 2016 and 1.04% of total loans at December 31, 2016. The allowance at June 30, 2017 for credit losses represented 356% of nonperforming loans, as compared to 264% at June 30, 2016 and 330% at December 31, 2016.

“The Company’s productivity continued to improve in the second quarter,” noted Mr. Paul. The efficiency ratio of 39.10% reflects management’s ongoing efforts to maintain superior operating leverage. The annualized level of noninterest expenses as a percentage of average assets has declined to 1.72% in the second quarter of 2017 as compared to 1.83% in the second quarter of 2016. A relatively stable staff, capacity utilization, branch rationalization, a low level of problem assets, and leveraging of other fixed costs have been the major reasons for improved operating leverage. Additionally, the Company continues investments in IT systems and resources, including its online client services. Our goal is to improve operating performance without inhibiting growth or negatively impacting our ability to service our customers. Mr. Paul further noted, “We will continue to maintain strict oversight of expenses, while retaining an infrastructure to remain competitive, support our growth initiatives and manage risk.”

Total assets at June 30, 2017 were $7.24 billion, a 14% increase as compared to $6.37 billion at June 30, 2016, and a 5% increase as compared to $6.89 billion at December 31, 2016. Total loans (excluding loans held for sale) were $5.99 billion at June 30, 2017, an 11% increase as compared to $5.40 billion at June 30, 2016, and a 5% increase as compared to $5.68 billion at December 31, 2016. Loans held for sale amounted to $49.3 million at June 30, 2017 as compared to $59.3 million at June 30, 2016, a 17% decrease, and $51.6 million at December 31, 2016, a 5% decrease. The investment portfolio totaled $497.7 million at June 30, 2017, a 22% increase from the $409.5 million balance at June 30, 2016. As compared to December 31, 2016, the investment portfolio at June 30, 2017 decreased by $40.4 million or 8%.

Total deposits at June 30, 2017 were $5.87 billion, compared to deposits of $5.34 billion at June 30, 2016, a 10% increase, and deposits of $5.72 billion at December 31, 2016, a 3% increase. Total borrowed funds (excluding customer repurchase agreements) were $361.7 million at June 30, 2017, $119.0 million at June 30, 2016 and $216.5 million at December 31, 2016. We continue to work on expanding the breadth and depth of our existing relationships while we pursue building new relationships.

Total shareholders’ equity at June 30, 2017 increased 15%, to $902.7 million, compared to $788.6 million at June 30, 2016, and increased 7%, from $842.8 million at December 31, 2016. The Company’s capital position remains substantially in excess of regulatory requirements for well capitalized status, with a total risk based capital ratio of 15.13% at June 30, 2017, as compared to 12.73% at June 30, 2016, and 14.89% at December 31, 2016. In addition, the tangible common equity ratio was 11.15% at June 30, 2017, compared to 10.88% at June 30, 2016 and 10.84% at December 31, 2016.

Analysis of the three months ended June 30, 2017 compared to June 30, 2016

For the three months ended June 30, 2017, the Company reported an annualized ROAA of 1.60% as compared to 1.57% for the three months ended June 30, 2016. The annualized ROACE for the three months ended June 30, 2017 was 12.51%, as compared to 12.40% for the three months ended June 30, 2016. 

Net interest income increased 9% for the three months ended June 30, 2017 over the same period in 2016 ($69.7 million versus $63.8 million), resulting from growth in average earning assets of 13%. The net interest margin was 4.16% for the three months ended June 30, 2017, as compared to 4.30% for the three months ended June 30, 2016. 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 5.14% for the second quarter in 2017 has been a significant factor in its overall profitability.

The provision for credit losses was $1.6 million for the three months ended June 30, 2017 as compared to $3.9 million for the three months ended June 30, 2016. The lower provisioning in the second quarter of 2017, as compared to the second quarter of 2016, is primarily due to lower loan growth, as net loans increased $160.1 million in the three months ended June 30, 2017, as compared to an increase of $247.6 million in the same period in 2016, and to overall improved asset quality. Net charge-offs of $366 thousand in the second quarter of 2017 represented an annualized 0.02% of average loans, excluding loans held for sale, as compared to $2.0 million, or an annualized 0.15% of average loans, excluding loans held for sale, in the second quarter of 2016. Net charge-offs in the second quarter of 2017 were attributable primarily to income producing - commercial real estate ($969 thousand) offset by recoveries in construction - commercial and residential ($343 thousand) and commercial and industrial loans ($254 thousand).

Noninterest income for the three months ended June 30, 2017 decreased to $7.0 million from $7.6 million for the three months ended June 30, 2016, due primarily to lesser net gains on the sale of investments ($26 thousand in 2017 versus $498 thousand in 2016), a decrease of $888 thousand in gains on the sale of SBA loans, a decrease in gains on sales of residential mortgages of $584 thousand, offset by revenue associated with the origination, securitization, servicing, and sale of FHA Multifamily-Backed GNMA securities of $642 thousand (net of certain transaction expenses), an increase in other miscellaneous income of $335 thousand, and an increase in other loan income of $137 thousand. Residential mortgage loans closed were $188 million for the second quarter in 2017 versus $214 million for the second quarter of 2016. Excluding gains on sales of investment securities, noninterest income was $7.0 million in the second quarter of 2017 as compared to $7.1 million for the second quarter of 2016, a decrease of 1%.     

The efficiency ratio, which measures the ratio of noninterest expense to total revenue, was 39.10% for the second quarter of 2017, as compared to 39.63% for the second quarter of 2016. Noninterest expenses totaled $30.0 million for the three months ended June 30, 2017, as compared to $28.3 million for the three months ended June 30, 2016, a 6% increase. Cost increases for salaries and benefits were $961 thousand, due primarily to increased staff, merit increases and incentive compensation. Marketing and advertising expense increased by $327 thousand primarily due to costs associated with expanded digital and print advertising. Legal, accounting and professional fees increased by $286 thousand primarily due to enhanced IT risk management.

Analysis of the six months ended June 30, 2017 compared to June 30, 2016

For the six months ended June 30, 2017, the Company reported an annualized ROAA of 1.61% as compared to 1.56% for the six months ended June 30, 2016. The annualized ROACE for the six months ended June 30, 2017 was 12.62%, as compared to 12.39% for the six months ended June 30, 2016. The higher ratios are due to increased earnings.

Net interest income increased 8% for the six months ended June 30, 2017 over the same period in 2016 ($136.6 million versus $126.4 million), resulting from growth in average earning assets of 12%. The net interest margin was 4.16% for the six months ended June 30, 2017 as compared to 4.30% for the same period in 2016. 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 5.13% for the first six months in 2017 has been a significant factor in its overall profitability. Additionally, the percentage of average noninterest bearing deposits to total deposits was 32% for the first six months in 2017 versus 30% for the same period in 2016.

The provision for credit losses was $3.0 million for the six months ended June 30, 2017 as compared to $6.9 million for the six months ended June 30, 2016. The lower provisioning in the first six months of 2017, as compared to the first six months of 2016, is due to lower loan growth, as net loans increased $307.1 million during the first six months of 2017, as compared to an increase of $405.1 million during the same period in 2016, and to overall improved asset quality. Net charge-offs of $989 thousand in the first six months of 2017 represented an annualized 0.03% of average loans, excluding loans held for sale, as compared to $3.1 million or an annualized 0.12% of average loans, excluding loans held for sale, in the first six months of 2016. Net charge-offs in the first six months of 2017 were attributable primarily to income producing - commercial real estate ($1.4 million) offset by recoveries in construction - commercial and residential ($346 thousand) and commercial and industrial loans ($131 thousand).

Noninterest income for the six months ended June 30, 2017 was $13.1 million as compared to $13.9 million for the six months ended June 30, 2016, a 6% decrease due primarily to lesser net gains on the sale of investments ($531 thousand in 2017 and $1.1 million in 2016), a decrease of $1.1 million in gains on the sale of SBA loans, offset by revenue associated with the origination, securitization, servicing, and sale of FHA Multifamily-Backed GNMA securities of $642 thousand (net of certain transaction expenses), and an increase in other miscellaneous income of $213 thousand. Excluding investment securities net gains, total noninterest income was $12.6 million for the six months ended June 30, 2017, as compared to $12.7 million for the same period in 2016, a 1% decrease.

Noninterest expenses totaled $59.2 million for the six months ended June 30, 2017, as compared to $56.4 million for the six months ended June 30, 2016, a 5% increase. Cost increases for salaries and benefits were $1.5 million, due primarily to increased staff and merit increases. Marketing and advertising expense increased by $447 thousand primarily due to costs associated with expanded digital and print advertising. Legal, accounting and professional fees increased by $225 thousand primarily due to enhanced IT risk management. Other expenses increased $740 thousand primarily due to higher broker fees.  For the first six months of 2017, the efficiency ratio was 39.57% as compared to 40.20% for the same period in 2016.

The financial information which follows provides more detail on the Company’s financial performance for the three and six months ended June 30, 2017 as compared to the three and six months ended June 30, 2016 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, 2016 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 second quarter 2017 financial results on Thursday, July 20, 2017 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 47807241, 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 August 3, 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, 2016 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 June 30, Six Months Ended June 30, 
  2017   2016   2017   2016  
Income Statements:        
Total interest income$  79,344  $  69,772  $  155,138  $  137,579  
Total interest expense   9,646     5,950     18,546     11,167  
Net interest income   69,698     63,822     136,592     126,412  
Provision for credit losses   1,566     3,888     2,963     6,931  
Net interest income after provision for credit losses   68,132     59,934     133,629     119,481  
Noninterest income (before investment gains)   6,997     7,077     12,562     12,743  
Gain on sale of investment securities   26     498     531     1,122  
Total noninterest income   7,023     7,575     13,093     13,865  
Total noninterest expense    30,001     28,295     59,233     56,397  
Income before income tax expense   45,154     39,214     87,489     76,949  
Income tax expense   17,382     15,069     32,700     29,482  
Net income$  27,772  $  24,145  $  54,789  $  47,467  
         
Per Share Data:        
Earnings per weighted average common share, basic$  0.81  $  0.72  $  1.61  $  1.41  
Earnings per weighted average common share, diluted$  0.81  $  0.71  $  1.60  $  1.39  
Weighted average common shares outstanding, basic    34,128,598     33,588,141     34,099,228     33,553,570  
Weighted average common shares outstanding, diluted    34,324,120     34,183,209     34,304,285     34,146,404  
Actual shares outstanding at period end   34,169,924     33,584,898     34,169,924     33,584,898  
Book value per common share at period end $  26.42  $  23.48  $  26.42  $  23.48  
Tangible book value per common share at period end (1)$  23.28  $  20.27  $  23.28  $  20.27  
         
Performance Ratios (annualized):        
Return on average assets 1.60%  1.57%  1.61%  1.56% 
Return on average common equity 12.51%  12.40%  12.62%  12.39% 
Net interest margin 4.16%  4.30%  4.16%  4.30% 
Efficiency ratio (2) 39.10%  39.63%  39.57%  40.20% 
         
Other Ratios:        
Allowance for credit losses to total loans (3) 1.02%  1.05%  1.02%  1.05% 
Allowance for credit losses to total nonperforming loans 356.00%  264.44%  356.00%  264.44% 
Nonperforming loans to total loans (3) 0.29%  0.40%  0.29%  0.40% 
Nonperforming assets to total assets 0.26%  0.39%  0.26%  0.39% 
Net charge-offs (annualized) to average loans (3) 0.02%  0.15%  0.03%  0.12% 
Common equity to total assets 12.46%  12.39%  12.46%  12.39% 
Tier 1 capital (to average assets) 11.61%  11.24%  11.61%  11.24% 
Total capital (to risk weighted assets) 15.13%  12.73%  15.13%  12.73% 
Common equity tier 1 capital (to risk weighted assets) 11.18%  10.74%  11.18%  10.74% 
Tangible common equity ratio (1) 11.15%  10.88%  11.15%  10.88% 
         
Loan Balances - Period End (in thousands):        
Commercial and Industrial$  1,319,736  $  1,140,863  $  1,319,736  $  1,140,863  
Commercial real estate - owner occupied $  660,066  $  584,358  $  660,066  $  584,358  
Commercial real estate - income producing$  2,596,230  $  2,461,581  $  2,596,230  $  2,461,581  
1-4 Family mortgage$  151,115  $  150,129  $  151,115  $  150,129  
Construction - commercial and residential$  1,034,902  $  847,268  $  1,034,902  $  847,268  
Construction - C&I (owner occupied)$  116,577  $  100,063  $  116,577  $  100,063  
Home equity$  103,671  $  110,697  $  103,671  $  110,697  
Other consumer $  2,734  $  8,470  $  2,734  $  8,470  
         
Average Balances (in thousands):        
Total assets$  6,959,994  $  6,191,164  $  6,866,597  $  6,131,848  
Total earning assets$  6,725,251  $  5,967,008  $  6,631,111  $  5,905,962  
Total loans$  5,895,174  $  5,266,305  $  5,800,742  $  5,168,346  
Total deposits$  5,660,119  $  5,178,501  $  5,607,552  $  5,161,086  
Total borrowings$  375,124  $  207,221  $  346,791  $  173,272  
Total shareholders’ equity$  890,498  $  783,318  $  875,223  $  770,117  
         

(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)      
 Six Months Ended Twelve Months Ended Six Months Ended 
 June 30, 2017 December 31, 2016 June 30, 2016 
Common shareholders' equity$  902,675  $  842,799  $  788,628  
Less: Intangible assets   (107,061)    (107,419)    (108,021) 
Tangible common equity$  795,614  $  735,380  $  680,607  
       
Book value per common share$  26.42  $  24.77  $  23.48  
Less: Intangible book value per common share   (3.14)    (3.16)    (3.21) 
Tangible book value per common share$  23.28  $  21.61  $  20.27  
       
Total assets$  7,244,527  $  6,890,096  $  6,365,320  
Less: Intangible assets   (107,061)    (107,419)    (108,021) 
Tangible assets$  7,137,466  $  6,782,677  $  6,257,299  
Tangible common equity ratio 11.15%  10.84%  10.88% 
       

(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)     
      
AssetsJune 30, 2017 December 31, 2016 June 30, 2016
Cash and due from banks$  10,948  $  10,285  $  11,013 
Federal funds sold   7,417     2,397     5,444 
Interest bearing deposits with banks and other short-term investments   429,336     355,481     230,041 
Investment securities available for sale, at fair value   497,672     538,108     409,512 
Federal Reserve and Federal Home Loan Bank stock   28,603     21,600     19,864 
Loans held for sale   49,327     51,629     59,323 
Loans    5,985,031     5,677,893     5,403,429 
Less allowance for credit losses   (61,047)    (59,074)    (56,536)
Loans, net   5,923,984     5,618,819     5,346,893 
Premises and equipment, net   20,153     20,661     18,209 
Deferred income taxes   46,294     48,220     41,321 
Bank owned life insurance   60,869     60,130     59,357 
Intangible assets, net   107,061     107,419     108,021 
Other real estate owned   1,394     2,694     3,152 
Other assets   61,469     52,653     53,170 
  Total Assets$  7,244,527  $  6,890,096  $  6,365,320 
      
Liabilities and Shareholders' Equity     
Deposits:     
Noninterest bearing demand$  1,851,437  $  1,775,684  $  1,631,732 
Interest bearing transaction   405,210     289,122     293,401 
Savings and money market   2,730,981     2,902,560     2,634,446 
Time, $100,000 or more   490,105     464,842     434,102 
Other time   389,964     283,906     342,307 
Total deposits   5,867,697     5,716,114     5,335,988 
Customer repurchase agreements   74,362     68,876     80,508 
Other short-term borrowings   145,000     -      50,000 
Long-term borrowings   216,710     216,514     68,989 
Other liabilities   38,083     45,793     41,207 
Total liabilities   6,341,852     6,047,297     5,576,692 
      
Shareholders' Equity     
Common stock, par value $.01 per share; shares authorized 100,000,000, shares     
issued and outstanding 34,169,924, 34,023,850, and 33,584,898, respectively   340     338     333 
Warrant   -      -      946 
Additional paid in capital   517,356     513,531     507,602 
Retained earnings    386,100     331,311     281,071 
Accumulated other comprehensive loss    (1,121)    (2,381)    (1,324)
Total Shareholders' Equity   902,675     842,799     788,628 
Total Liabilities and Shareholders' Equity$  7,244,527  $  6,890,096  $  6,365,320 

 

Eagle Bancorp, Inc.       
Consolidated Statements of Income (Unaudited)       
(dollars in thousands, except per share data)       
    
 Three Months Ended June 30, Six Months Ended June 30,
Interest Income 2017 2016  2017  2016
Interest and fees on loans$  75,896 $  67,211 $  148,367 $  132,133
Interest and dividends on investment securities   2,827    2,356    5,660    4,944
Interest on balances with other banks and short-term investments   610    196    1,093    480
Interest on federal funds sold    11    9    18    22
Total interest income   79,344    69,772    155,138    137,579
Interest Expense       
Interest on deposits   6,403    4,530    12,233    8,673
Interest on customer repurchase agreements    40    39    78    76
Interest on other short-term borrowings   224    344    277    344
Interest on long-term borrowings   2,979    1,037    5,958    2,074
Total interest expense   9,646    5,950    18,546    11,167
Net Interest Income    69,698    63,822    136,592    126,412
Provision for Credit Losses   1,566    3,888    2,963    6,931
Net Interest Income After Provision For Credit Losses   68,132    59,934    133,629    119,481
        
Noninterest Income       
Service charges on deposits   1,543    1,424    3,015    2,872
Gain on sale of loans   2,519    3,992    4,567    5,455
Gain on sale of investment securities   26    498    531    1,122
Increase in the cash surrender value of  bank owned life insurance    372    390    739    780
Other income   2,563    1,271    4,241    3,636
Total noninterest income   7,023    7,575    13,093    13,865
Noninterest Expense       
Salaries and employee benefits   16,869    15,908    33,546    32,027
Premises and equipment expenses   3,920    3,807    7,767    7,633
Marketing and advertising   1,247    920    2,141    1,694
Data processing   1,997    1,823    4,038    3,837
Legal, accounting and professional fees   1,297    1,011    2,299    2,074
FDIC insurance   590    755    1,134    1,564
Other expenses   4,081    4,071    8,308    7,568
Total noninterest expense 30,001  28,295  59,233  56,397
Income Before Income Tax Expense   45,154    39,214    87,489    76,949
Income Tax Expense   17,382    15,069    32,700    29,482
Net Income $  27,772 $  24,145 $  54,789 $  47,467
        
Earnings Per Common Share       
Basic$  0.81 $  0.72 $  1.61 $  1.41
Diluted$  0.81 $  0.71 $  1.60 $  1.39

 

Eagle Bancorp, Inc.
Consolidated Average Balances, Interest Yields And Rates (Unaudited)
(dollars in thousands)
        
 Three Months Ended June 30,
  2017  2016
 Average BalanceInterestAverage Yield/Rate Average BalanceInterestAverage Yield/Rate
ASSETS       
Interest earning assets:       
Interest bearing deposits with other banks and other short-term investments$  264,319$  6100.93% $  184,821$  1960.43%
Loans held for sale (1)   38,165   3884.07%    47,111   4283.63%
Loans (1) (2)    5,895,174   75,5085.14%    5,266,305   66,7835.10%
Investment securities available for sale (2)   520,951   2,8272.18%    460,195   2,3562.06%
Federal funds sold    6,642   110.66%    8,576   90.42%
Total interest earning assets   6,725,251   79,3444.73%    5,967,008   69,7724.70%
        
Total noninterest earning assets   294,923      279,972  
Less: allowance for credit losses   60,180      55,816  
Total noninterest earning assets   234,743      224,156  
TOTAL ASSETS$  6,959,994   $  6,191,164  
        
LIABILITIES AND SHAREHOLDERS' EQUITY       
Interest bearing liabilities:       
Interest bearing transaction$  360,574$  3370.37% $  243,836$  1520.25%
Savings and money market    2,679,337   4,0970.61%    2,573,184   2,8280.44%
Time deposits    781,864   1,9691.01%    760,786   1,5500.82%
Total interest bearing deposits   3,821,775   6,4030.67%    3,577,806   4,5300.51%
Customer repurchase agreements   69,093   400.23%    71,767   390.22%
Other short-term borrowings   89,355   2240.99%    66,484   3442.05%
Long-term borrowings   216,676   2,9795.44%    68,970   1,0375.95%
Total interest bearing liabilities   4,196,899   9,6460.92%    3,785,027   5,9500.63%
        
Noninterest bearing liabilities:       
Noninterest bearing demand    1,838,344      1,600,695  
Other liabilities   34,253      22,124  
Total noninterest bearing liabilities   1,872,597      1,622,819  
        
Shareholders’ Equity   890,498      783,318  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$  6,959,994   $  6,191,164  
        
Net interest income $  69,698   $  63,822 
Net interest spread  3.81%   4.07%
Net interest margin  4.16%   4.30%
Cost of funds  0.57%   0.40%
        
(1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $4.3 million and $3.7 million
  for the three months ended June 30, 2017 and 2016, 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)
        
 Six Months Ended June 30,
  2017   2016 
 Average BalanceInterestAverage Yield/Rate Average BalanceInterestAverage Yield/Rate
ASSETS       
Interest earning assets:       
Interest bearing deposits with other banks and other short-term investments$  266,984$  1,0930.83% $  210,476$  4800.46%
Loans held for sale (1)   33,796   6703.96%    38,179   7013.67%
Loans (1) (2)    5,800,742   147,6975.13%    5,168,346   131,4325.11%
Investment securities available for sale (2)   523,566   5,6602.18%    479,191   4,9442.07%
Federal funds sold    6,023   180.60%    9,770   220.45%
Total interest earning assets   6,631,111   155,1384.72%    5,905,962   137,5794.68%
        
Total noninterest earning assets   295,232      280,752  
Less: allowance for credit losses   59,746      54,866  
Total noninterest earning assets   235,486      225,886  
TOTAL ASSETS$  6,866,597   $  6,131,848  
        
LIABILITIES AND SHAREHOLDERS' EQUITY       
Interest bearing liabilities:       
Interest bearing transaction$  345,986$  5750.34% $  216,916$  2520.23%
Savings and money market    2,684,900   7,9610.60%    2,664,106   5,3480.40%
Time deposits    759,942   3,6970.98%    753,618   3,0730.82%
Total interest bearing deposits   3,790,828   12,2330.65%    3,634,640   8,6730.48%
Customer repurchase agreements   69,359   780.23%    71,076   760.22%
Other short-term borrowings   60,808   2770.91%    33,242   3442.05%
Long-term borrowings   216,624   5,9585.47%    68,954   2,0745.95%
Total interest bearing liabilities   4,137,619   18,5460.90%    3,807,912   11,1670.59%
        
Noninterest bearing liabilities:       
Noninterest bearing demand    1,816,724      1,526,446  
Other liabilities   37,031      27,373  
Total noninterest bearing liabilities   1,853,755      1,553,819  
        
Shareholders’ equity   875,223      770,117  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$  6,866,597   $  6,131,848  
        
Net interest income $  136,592   $  126,412 
Net interest spread  3.82%   4.09%
Net interest margin  4.16%   4.30%
Cost of funds  0.56%   0.38%
        
(1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $8.2 million and $7.5 million
  for the six months ended June 30, 2017 and 2016, 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 
 June 30, March 31, December 31, September 30, June 30, March 31, December 31, September 30,
Income Statements: 2017   2017   2016   2016   2016   2016   2015   2015 
Total interest income$  79,344  $  75,794  $  75,795  $  72,431  $  69,772  $  67,807  $  67,311  $  63,981 
Total interest expense   9,646     8,900     8,771     7,703     5,950     5,217     4,735     4,896 
Net interest income   69,698     66,894     67,024     64,728     63,822     62,590     62,576     59,085 
Provision for credit losses   1,566     1,397     2,112     2,288     3,888     3,043     4,595     3,262 
Net interest income after provision for credit losses   68,132     65,497     64,912     62,440     59,934     59,547     57,981     55,823 
Noninterest income (before investment gains)   6,997     5,565     6,943     6,404     7,077     5,666     6,462     6,039 
Gain on sale of investment securities   26     505     71     1     498     624     30     60 
Total noninterest income   7,023     6,070     7,014     6,405     7,575     6,290     6,492     6,099 
Salaries and employee benefits   16,869     16,677     17,853     17,130     15,908     16,119     15,977     15,383 
Premises and equipment   3,920     3,847     3,699     3,786     3,807     3,826     3,970     3,974 
Marketing and advertising   1,247     894     944     857     920     774     566     762 
Merger expenses   -      -      -      -      -      -      2     2 
Other expenses   7,965     7,814     7,284     7,065     7,660     7,383     8,125     7,284 
Total noninterest expense   30,001     29,232     29,780     28,838     28,295     28,102     28,640     27,405 
Income before income tax expense   45,154     42,335     42,146     40,007     39,214     37,735     35,833     34,517 
Income tax expense   17,382     15,318     16,429     15,484     15,069     14,413     13,485     13,054 
Net income   27,772     27,017     25,717     24,523     24,145     23,322     22,348     21,463 
Preferred stock dividends    -      -      -      -      -      -      62     180 
Net income available to common shareholders$  27,772  $  27,017  $  25,717  $  24,523  $  24,145  $  23,322  $  22,286  $  21,283 
                
                
Per Share Data:               
Earnings per weighted average common share, basic$  0.81  $  0.79  $  0.76  $  0.73  $  0.72  $  0.70  $  0.67  $  0.64 
Earnings per weighted average common share, diluted $  0.81  $  0.79  $  0.75  $  0.72  $  0.71  $  0.68  $  0.65  $  0.63 
Weighted average common shares outstanding, basic  34,128,598   34,069,528   33,650,963   33,590,183   33,588,141   33,518,998   33,462,937   33,400,973 
Weighted average common shares outstanding, diluted    34,324,120     34,284,316   34,233,940   34,187,171   34,183,209   34,104,237   34,069,786   34,026,412 
Actual shares outstanding at period end 34,169,924   34,110,056   34,023,850   33,590,880   33,584,898   33,581,599   33,467,893   33,405,510 
Book value per common share at period end $  26.42  $  25.59  $  24.77  $  24.28  $  23.48  $  22.71  $  22.07  $  21.38 
Tangible book value per common share at period end (1)$  23.28  $  22.45  $  21.61  $  21.08  $  20.27  $  19.48  $  18.83  $  18.10 
                
Performance Ratios (annualized):               
Return on average assets 1.60%  1.62%  1.46%  1.50%  1.57%  1.54%  1.50%  1.47%
Return on average common equity 12.51%  12.74%  12.26%  12.04%  12.40%  12.39%  12.08%  11.95%
Net interest margin 4.16%  4.14%  3.96%  4.11%  4.30%  4.31%  4.38%  4.23%
Efficiency ratio (2) 39.10%  40.06%  40.22%  40.54%  39.63%  40.80%  41.47%  42.04%
                
Other Ratios:               
Allowance for credit losses to total loans (3) 1.02%  1.03%  1.04%  1.04%  1.05%  1.06%  1.05%  1.05%
Allowance for credit losses to total nonperforming loans 356.00%  416.91%  330.49%  255.29%  264.44%  249.03%  397.95%  347.82%
Nonperforming loans to total loans (3) 0.29%  0.25%  0.31%  0.41%  0.40%  0.43%  0.26%  0.30%
Nonperforming assets to total assets 0.26%  0.22%  0.30%  0.41%  0.39%  0.42%  0.31%  0.41%
Net charge-offs (annualized) to average loans (3) 0.02%  0.04%  -0.01%  0.14%  0.15%  0.09%  0.18%  0.16%
Tier 1 capital (to average assets) 11.61%  11.51%  10.72%  11.12%  11.24%  11.01%  10.90%  11.96%
Total capital (to risk weighted assets) 15.13%  14.97%  14.89%  15.05%  12.71%  12.87%  12.75%  13.80%
Common equity tier 1 capital (to risk weighted assets) 11.18%  10.97%  10.80%  10.83%  10.74%  10.83%  10.68%  10.48%
Tangible common equity ratio (1) 11.15%  10.97%  10.84%  10.64%  10.88%  10.86%  10.56%  10.46%
                
Average Balances (in thousands):               
Total assets$  6,959,994  $6,772,164  $  6,984,492  $  6,492,274  $  6,191,164  $  6,072,533  $  5,907,022  $  5,775,283 
Total earning assets$  6,725,251  $  6,535,926  $  6,752,859  $  6,264,531  $  5,967,008  $  5,844,915  $  5,675,730  $  5,545,398 
Total loans$  5,895,174  $  5,705,261  $  5,591,790  $  5,422,677  $  5,266,305  $  5,070,386  $  4,859,391  $  4,636,298 
Total deposits$  5,660,119  $  5,554,402  $  5,796,516  $  5,353,834  $  5,178,501  $  5,143,670  $  4,952,282  $  4,842,706 
Total borrowings$  375,124  $  318,143  $  312,842  $  300,083  $  207,221  $  139,324  $  168,652  $  128,015 
Total shareholders’ equity$  890,498  $  859,779  $  834,823  $  809,973  $  783,318  $  756,916  $  757,199  $  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.
(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.