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CORRECTING and REPLACING -- Eagle Bancorp, Inc.

Company Release - 1/16/2019 6:18 PM ET

BETHESDA, Md., Jan. 16, 2019 (GLOBE NEWSWIRE) -- In a release issued earlier today by Eagle Bancorp, Inc. (NASDAQ:EGBN), we are advised by the company that "$40.4 Million" in the headline should have been "$40.3 Million." The corrected release follows:

Eagle Bancorp, Inc. Logo


Eagle Bancorp, Inc. Announces Record Earnings With Net Income of $40.3 Million for the Fourth Quarter and $152.3 Million for the Full Year of 2018

Eagle Bancorp, Inc. (the “Company”) (NASDAQ:EGBN), the parent company of EagleBank, today announced quarterly net income of $40.3 million for the three months ended December 31, 2018, a 159% increase on a net income basis (34% increase on an operating basis) over the $15.6 million net income ($30.2 million on an operating basis) for the three months ended December 31, 2017.

For the year ended December 31, 2018, the Company’s net income was $152.3 million, a 52% increase (33% increase on an operating basis) over the $100.2 million ($114.8 million on an operating basis) for the year ended December 31, 2017.

In 2017, for the fourth quarter and full year, operating earnings exclude one time charges of $14.6 million ($0.42 per diluted common share), required as a result of the Tax Cuts and Jobs Act of 2017 (“Tax Reform”) enacted in late December 2017. Where appropriate, parenthetical references refer to operating earnings, which the Company believes are more relevant comparisons to current and historical period results of operations. Reconciliations of 2017 GAAP earnings to operating earnings are contained in the tables that follow.

Net income for the three months ended December 31, 2018 was $1.17 per basic and diluted common share as compared to $0.46 per basic common share and $0.45 per diluted common share ($0.88 per basic and diluted common share on an operating basis), for the same period in 2017, a 33% increase in diluted earnings per share (on an operating basis) for the fourth quarter of 2018 over 2017.

For the full year 2018, net income was $4.44 per basic common share and $4.42 per diluted common share as compared to $2.94 per basic common share and $2.92 per diluted common share ($3.36 per basic common share and $3.35 per diluted common share on an operating basis) for 2017, a 32% increase in diluted earnings per share (on an operating basis) for the full year of 2018 over 2017.

“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 in the fourth quarter represents ten years of quarterly increases in operating earnings dating back to the first quarter of 2009, a record of consistency rarely seen in public company financial performance. Our strong financial performance has resulted from a combination of steady average balance sheet growth, revenue growth, and very favorable operating leverage. Additionally, we have maintained solid asset quality over an extended period through disciplined risk management practices. These factors have combined to achieve a return on average assets of 1.90% for the fourth quarter of 2018, a return on average common equity of 14.82%, and a return on average tangible common equity ratio of 16.43%, while sustaining very strong capital levels.”

Mr. Paul added, “For the fourth quarter of 2018, we experienced very strong average deposit growth which was invested at lower market interest rates, resulting in above average liquidity. This liquidity, which was invested at short term market rates, contributed to a decline in the net interest margin to 3.97% for the fourth quarter from 4.14% in the third quarter of 2018. Average deposit balances increased 7.2% for the fourth quarter 2018 over the third quarter 2018. We attribute the significant average increase to seasonality, market conditions and our well developed customer relationships leading to success in gathering core deposits. Steady growth in loan balances continued, increasing 3.8% on average for the fourth quarter of 2018 over the third quarter of 2018. Period end to period end, loan balances increased 2.1%, for the fourth quarter 2018 while deposit balances increased a very strong 9.4%. The higher liquidity position in the fourth quarter resulted in an average loan to deposit ratio of 99% as compared to 102% for both the third quarter of 2018 and the fourth quarter of 2017.” Mr. Paul added, “We consider average balances more indicative of our growth performance, since maintaining favorable averages translates to improved revenue. Growth in our average balance sheet combined with a continuing favorable net interest margin contributed to revenue growth increases of 3.5% in the fourth quarter 2018 over the fourth quarter of 2017 and by 1.0% over the third quarter of 2018. Also contributing to the decreased net interest margin for the fourth quarter was a 9 basis point decline in the yield on the loan portfolio to 5.60% versus 5.69% for the third quarter, as the quarter saw substantial payoffs of higher yielding loans. Fourth quarter loan payoffs were the highest of any quarter in 2018, and were due substantially to above average sales of condominium units financed by the bank. These are projects that are performing well resulting in more rapid pay-downs of construction loans. Notwithstanding the payoff of higher yielding loans, the Company’s loan portfolio yield continues to benefit from both higher general market interest rates and disciplined loan pricing and we believe that the yield on our loan portfolio continues to be superior to peer bank returns. Importantly, our credit quality remained very strong in the fourth quarter as the level of nonperforming assets was just 0.21% of total assets at December 31, 2018 and the annualized level of net credit losses to average loans was 0.05%.” Mr. Paul added, “The Company’s operating efficiency, another key driver of our financial performance, remained favorable.” For the fourth quarter in 2018, the efficiency ratio was 36.1%, as compared to 36.4% in the third quarter of 2018, and was 37.3% for the full year 2018.

For the full year 2018 over 2017, average deposit growth was 11%, average loan growth was 12%, revenue growth was 8.4% and noninterest expense growth was 6.9%. The net interest margin for 2018 was 4.10% as compared to 4.15% for the year 2017, well above peer banking companies. Period end to period end, loan growth in 2018 was 9% and deposit growth was 19%.

Comparing asset yields and cost of funds for the full year of 2018 to the full year 2017, loan yields were up 37 basis points (from 5.17% to 5.54%), yields on earning assets were up 36 basis points (from 4.73% to 5.09%) and the composite cost of funds was up 41 basis points (from 0.58% to 0.99%). Importantly, our funding costs, while up in 2018 over 2017, continue to benefit from the substantial level of average noninterest deposits as a percentage of average total deposits of 33.4% in 2018. Additionally, the significant portion of the loan portfolio being variable and adjustable rate in a rising rate environment tends to mitigate the effects of higher cost of funds. Mr. Paul added, “Given the more competitive interest rate environment in 2018 for both loan rates and funding costs, coupled with a flatter yield curve and the Federal Open Market Committee’s (“FOMC”) four short term rate increases, the Company believes management of the net interest margin has been disciplined and effective.”  

Pre-tax, pre-provision income was $56.1 million for the fourth quarter of 2018 a 2% increase over $55.1 million for the fourth quarter of 2017 and a 1% increase over the $55.3 million for the third quarter of 2018. Pre-tax, pre-provision income was $212.9 million for the full year 2018 as compared to $194.7 million for the full year 2017, a 9% increase.

The annualized return on average assets (“ROAA”) was 1.90% for the fourth quarter of 2018 as compared to 0.82% (1.60% on an operating basis) for the fourth quarter of 2017 and was 1.91% for the year 2018 as compared to 1.41% (1.62% on an operating basis) for the twelve months ended December 31, 2017. The annualized return on average tangible common equity (“ROATCE”) was 16.43% for the fourth quarter of 2018 as compared to 7.31% (14.17% on an operating basis) for the fourth quarter of 2017 and was 16.63% for the full year 2018 as compared to 12.54% (14.37% on an operating basis) for the year ended December 31, 2017.

Asset quality measures remained solid in the fourth quarter of 2018. At December 31, 2018, the Company’s nonperforming loans amounted to $16.3 million (0.23% of total loans) as compared to $15.1 million (0.22% of total loans) at September 30, 2018 and $13.2 million (0.21% of total loans) at December 31, 2017. Nonperforming assets amounted to $17.7 million (0.21% of total assets) at December 31, 2018 compared to $16.5 million (0.20% of total assets) at September 30, 2018 and $14.6 million (0.20% of total assets) at December 31, 2017. For the year of 2018, the Company recorded net charge-offs of $3.5 million (0.05% of average loans), as compared to net charge-offs of $3.3 million (0.06% of average loans) for the year of 2017.

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, 2018 allowance for credit losses, at 1.00% 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 year. The allowance for credit losses was 1.00% of total loans at December 31, 2018 and 1.01% at December 31, 2017. The allowance for credit losses represented 430% of nonperforming loans at December 31, 2018.

Total assets at December 31, 2018 were $8.39 billion, a 4% increase as compared to $8.06 billion at September 30, 2018, and a 12% increase as compared to $7.48 billion at December 31, 2017. Total loans (excluding loans held for sale) were $6.99 billion at December 31, 2018, a 2% increase as compared to $6.84 billion at September 30, 2018, and a 9% increase as compared to $6.41 billion at December 31, 2017. Loans held for sale amounted to $19.3 million at December 31, 2018 as compared to $18.7 million at September 30, 2018, a 3% increase, and $25.1 million at December 31, 2017, a 23% decrease. The investment portfolio totaled $784.1 million at December 31, 2018, a 9% increase from $722.7 million at September 30, 2018. As compared to December 31, 2017, the investment portfolio at December 31, 2018 increased by $194.9 million or 33%.

Total deposits at December 31, 2018 were $6.97 billion, compared to deposits of $6.37 billion at September 30, 2018, a 9% increase, and deposits of $5.85 billion at December 31, 2017, a 19% increase. Total borrowed funds (excluding customer repurchase agreements) were $217.3 million at December 31, 2018, $542.2 million at September 30, 2018 and $541.9 million at December 31, 2017, a $324.9 million decrease in the fourth quarter and a $324.6 million decrease during 2018.

Total shareholders’ equity at December 31, 2018 increased 4%, to $1.11 billion, compared to $1.06 billion at September 30, 2018, and increased 17%, from $950.4 million at December 31, 2017. Growth in retained earnings has enhanced the Company’s capital position well in excess of regulatory requirements for well capitalized status. The total risk based capital ratio was 16.07% at December 31, 2018, as compared to 15.74% at September 30, 2018, and 15.02% at December 31, 2017. In addition, the tangible common equity ratio was 12.11% at December 31, 2018, compared to 12.01% at September 30, 2018 and 11.44% at December 31, 2017.

While the Company’s earnings beginning in 2018 benefitted from the lower corporate federal income tax statutory rates resulting from Tax Reform, companies were required to revalue their deferred tax positions as of December 31, 2017 at these lower federal income tax rates. Since the new law was enacted on December 22, 2017, this revaluation was accounted for in the fourth quarter of 2017 through adjustments to income tax expense on the Consolidated Statements of Income. This adjustment increased income tax expense for the fourth quarter of 2017 and full year 2017 by $14.6 million ($0.43 per basic and $0.42 per diluted share). As a result of reduced rates, the Company incurred substantially reduced income tax expense in 2018.    

Analysis of the three months ended December 31, 2018 compared to December 31, 2017

Net interest income increased 8% for the three months ended December 31, 2018 over the same period in 2017 ($81.7 million versus $75.4 million), resulting from growth in average earning assets of 13% partially offset by a 16 basis point reduction of the net interest margin. The net interest margin was 3.97% for the three months ended December 31, 2018, as compared to 4.13% for the three months ended December 31, 2017. The Company believes its net interest margin remains favorable compared to peer banking companies and that its disciplined approach to managing the loan portfolio to a 5.60% yield for the fourth quarter of 2018 has been a significant factor in its overall profitability.

The provision for credit losses was $2.6 million for the three months ended December 31, 2018 as compared to $4.1 million for the three months ended December 31, 2017. The lower provisioning in the fourth quarter of 2018, as compared to the fourth quarter of 2017, is primarily due to lower loan growth ($146.8 million vs. $327.3 million) due to higher loan payoffs and lower net charge-offs. Net charge-offs of $844 thousand in the fourth quarter of 2018 represented an annualized 0.05% of average loans, excluding loans held for sale, as compared to net charge-offs of $2.3 million, or an annualized 0.15% of average loans, excluding loans held for sale, in the fourth quarter of 2017. Net charge-offs in the fourth quarter of 2018 were attributable primarily to commercial loans ($801 thousand).

Noninterest income for the three months ended December 31, 2018 decreased to $6.1 million from $9.5 million for the three months ended December 31, 2017, due substantially to a $1.2 million nonrecurring adjustment to a tax credit investment recorded in the fourth quarter of 2017 and a $354 thousand prepayment penalty associated with a single credit that was recorded during the fourth quarter of 2017. The FHA business unit generated income of $507 thousand on the origination, securitization, servicing and sale of FHA Multifamily-Backed GNMA securities in the fourth quarter of 2018 compared to $948 thousand for the same period in 2017. The residential mortgage unit had lower sales and resulting gains on the sale of these loans in the fourth quarter of 2018 (gains of $1.2 million for the fourth quarter of 2018 versus $1.6 million for the same period in 2017). Residential mortgage loans closed were $91 million for the fourth quarter in 2018 versus $136 million for the fourth quarter of 2017. The SBA business unit generated $167 thousand in revenue during the fourth quarter of 2018 from sales of the guaranteed portion on SBA loans compared to $893 thousand for the same period in 2017.  

The efficiency ratio, which measures the ratio of noninterest expense to total revenue, was 36.09% for the fourth quarter of 2018, as compared to 35.12% for the fourth quarter of 2017. Noninterest expenses totaled $31.7 million for the three months ended December 31, 2018, as compared to $29.8 million for the three months ended December 31, 2017. Salaries and employee benefits expenses decreased $771 thousand in the fourth quarter of 2018 as compared to the fourth quarter of 2017 due to lower incentive and stock based compensation accruals, partially offset by higher salaries. Legal, accounting, and professional fees increased by $946 thousand due substantially to advisory services associated with enhancing our risk management systems including corporate governance as we approach $10 billion in assets. Other expenses increased $965 thousand due primarily to higher broker fees and franchise taxes.

The effective income tax rate was substantially lower (24.7%) for the fourth quarter 2018 as compared to 69.5% for the same period in 2017 due primarily to the lower corporate federal tax rate of 21% in 2018 versus 35% in 2017 and a $14.6 million deferred tax asset adjustment to income tax expense during the fourth quarter of 2017 both as a result of Tax Reform.

Analysis of the year ended December 31, 2018 compared to December 31, 2017

Net interest income increased 12% for the year ended December 31, 2018 over the same period in 2017 ($317.0 million versus $283.9 million), resulting from growth in average earning assets of 13%. The net interest margin was 4.10% for the year ended December 31, 2018 as compared to 4.15% for the same period in 2017. 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 5.54% for the full year of 2018 has been a significant factor in its overall profitability. Additionally, the percentage of average noninterest bearing deposits to total deposits was 33.4% for the full year of 2018 versus 32.5% for the same period in 2017.

The provision for credit losses was $8.7 million for the year ended December 31, 2018 as compared to $9.0 million for the year ended December 31, 2017. The lower provisioning during 2018, as compared to 2017, is due to lower loan growth ($579.9 million versus $733.6 million) due to higher loan payoffs. Net charge-offs of $3.5 million during 2018 represented an annualized 0.05% of average loans, excluding loans held for sale, as compared to $3.3 million or an annualized 0.06% of average loans, excluding loans held for sale, in 2017. Net charge-offs during 2018 were attributable primarily to commercial loans ($3.2 million).

Noninterest income for the year ended December 31, 2018 was $22.6 million as compared to $29.4 million for the year ended December 31, 2017, a 23% decrease. This decrease was primarily due to $2.1 million lower revenue on the origination, securitization, servicing, and sale of FHA Multifamily-Backed GNMA securities, a $1.2 million nonrecurring adjustment to a tax credit investment recorded in the fourth quarter of 2017, a $354 thousand prepayment penalty associated with a single credit that was recorded during the fourth quarter of 2017, $269 thousand of premium and servicing income recorded during 2017 resulting from the portfolio sale of $44.3 million in residential mortgages and HELOC’s out of the loan portfolio, $3.3 million lower gains on sale of loans, and $445 thousand lower gain on sale of investment securities. The FHA business unit generated income of $357 thousand on the origination, securitization, servicing and sale of FHA Multifamily-Backed GNMA securities for the full year 2018 compared to $2.5 million for the same period in 2017. The residential mortgage unit had $5.4 million of gains on the sale of loans for the full year of 2018 versus $7.8 million for the same period in 2017 resulting from fewer loan originations and subsequent loan sales. Residential mortgage loans closed were $424 million for the full year 2018 versus $608 million for the full year 2017. The SBA business unit generated $540 thousand in revenue from sales of the guaranteed portion on SBA loans for the full year 2018 compared to $1.5 million for the same period in 2017.

Noninterest expenses totaled $126.7 million for the year ended December 31, 2018, as compared to $118.6 million for the year ended December 31, 2017, a 7% increase. Data processing increased by $1.5 million due primarily to the costs of software and infrastructure investments. Legal, accounting and professional fees increased by $4.7 million due primarily to due diligence costs from independent consultants associated with the internet event late in 2017 as well as costs to enhance risk management systems, including corporate governance as we approach $10 billion in assets. For 2018, the efficiency ratio was 37.31% as compared to 37.84% for the same period in 2017.

The financial information which follows provides more detail on the Company’s financial performance for the three and twelve months ended December 31, 2018 as compared to the three and twelve months ended December 31, 2017 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, 2017 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 branch offices, located in Suburban 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 and year end 2018 financial results on Thursday, January 17, 2019 at 10:00 a.m. eastern time. The public is invited to listen to this conference call by dialing 1.877.303.6220, conference ID Code is 1481537, 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 January 31, 2019.

Forward-looking Statements: This press release contains forward-looking statements within the meaning of the Securities 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, 2017 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, Year Ended December 31,
  2018   2017   2018   2017 
Income Statements:       
Total interest income$105,581  $86,526  $393,286  $324,034 
Total interest expense 23,869   11,167   76,293   40,147 
Net interest income 81,712   75,359   316,993   283,887 
Provision for credit losses 2,600   4,087   8,660   8,971 
Net interest income after provision for credit losses 79,112   71,272   308,333   274,916 
Noninterest income (before investment gains) 6,060   9,496   22,489   28,830 
Gain on sale of investment securities 29   -   97   542 
Total noninterest income 6,089   9,496   22,586   29,372 
Total noninterest expense 31,687   29,803   126,711   118,552 
Income before income tax expense 53,514   50,965   204,208   185,736 
Income tax expense 13,197   35,396   51,932   85,504 
Net income$40,317  $15,569  $152,276  $100,232 
        
Per Share Data:       
Earnings per weighted average common share, basic$1.17  $0.46  $4.44  $2.94 
Earnings per weighted average common share, diluted$1.17  $0.45  $4.42  $2.92 
Weighted average common shares outstanding, basic 34,349,089   34,179,793   34,306,336   34,138,536 
Weighted average common shares outstanding, diluted 34,460,985   34,334,873   34,443,040   34,320,639 
Actual shares outstanding at period end 34,387,919   34,185,163   34,387,919   34,185,163 
Book value per common share at period end$32.25  $27.80  $32.25  $27.80 
Tangible book value per common share at period end (1)$29.17  $24.67  $29.17  $24.67 
        
Performance Ratios (annualized):       
Return on average assets 1.90%   0.82%   1.91%   1.41% 
Return on average common equity 14.82%   6.49%   14.89%   11.06% 
Return on average tangible common equity 16.43%   7.31%   16.63%   12.54% 
Net interest margin 3.97%   4.13%   4.10%   4.15% 
Efficiency ratio (2) 36.09%   35.12%   37.31%   37.84% 
        
Other Ratios:       
Allowance for credit losses to total loans (3) 1.00%   1.01%   1.00%   1.01% 
Allowance for credit losses to total nonperforming loans 429.72%   489.20%   429.72%   489.20% 
Nonperforming loans to total loans (3) 0.23%   0.21%   0.23%   0.21% 
Nonperforming assets to total assets 0.21%   0.20%   0.21%   0.20% 
Net charge-offs (annualized) to average loans (3) 0.05%   0.15%   0.05%   0.06% 
Common equity to total assets 13.22%   12.71%   13.22%   12.71% 
Tier 1 capital (to average assets) 12.08%   11.45%   12.08%   11.45% 
Total capital (to risk weighted assets) 16.07%   15.02%   16.07%   15.02% 
Common equity tier 1 capital (to risk weighted assets) 12.47%   11.23%   12.47%   11.23% 
Tangible common equity ratio (1) 12.11%   11.44%   12.11%   11.44% 
        
Loan Balances - Period End (in thousands):       
Commercial and Industrial$1,553,111  $1,375,939  $1,553,111  $1,375,939 
Commercial real estate - owner occupied$887,814  $755,444  $887,814  $755,444 
Commercial real estate - income producing$3,256,899  $3,047,094  $3,256,899  $3,047,094 
1-4 Family mortgage$106,418  $104,357  $106,418  $104,357 
Construction - commercial and residential$1,039,815  $973,141  $1,039,815  $973,141 
Construction - C&I (owner occupied)$57,797  $58,691  $57,797  $58,691 
Home equity$86,603  $93,264  $86,603  $93,264 
Other consumer$2,988  $3,598  $2,988  $3,598 
        
Average Balances (in thousands):       
Total assets$8,415,480  $7,487,624  $7,958,941  $7,089,211 
Total earning assets$8,171,010  $7,242,994  $7,726,401  $6,853,815 
Total loans$6,897,434  $6,207,505  $6,638,136  $5,939,985 
Total deposits$6,950,714  $6,101,727  $6,444,551  $5,787,665 
Total borrowings$342,637  $382,687  $453,581  $355,377 
Total shareholders’ equity$  1,079,622  $  951,727  $  1,022,642  $  906,169 

(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)   
 Year Ended Year Ended
 December 31, 2018 December 31, 2017
Common shareholders' equity$1,108,941  $950,438 
Less: Intangible assets (105,766)  (107,212)
Tangible common equity$1,003,175  $843,226 
    
Book value per common share$32.25  $27.80 
Less: Intangible book value per common share (3.08)  (3.13)
Tangible book value per common share$29.17  $24.67 
    
Total assets$8,389,137  $7,479,029 
Less: Intangible assets (105,766)  (107,212)
Tangible assets$8,283,371  $7,371,817 
Tangible common equity ratio 12.11%   11.44% 
    
Average common shareholders' equity$1,022,642  $906,169 
Less: Average intangible assets (106,806)  (107,117)
Average tangible common equity$915,836  $799,052 
    
Net Income Available to Common Shareholders$  152,276  $  100,232 
Average tangible common equity$  915,836  $  799,052 
Annualized Return on Average Tangible Common Equity (1) 16.63%   12.54% 
    

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

(3) Excludes loans held for sale.

           
 Three Months Ended December 31, Three Months Ended
September 30,
 Years Ended December 31,
  2018  2017  2018  2018  2017
Net income$40,317 $15,569 $38,948 $152,276 $100,232
Income Tax Expense 13,197  35,396  13,928  51,932  85,504
Provision for Credit Losses 2,600  4,087  2,441  8,660  8,971
Pre-Tax, Pre-Provision Income$56,114 $55,052 $55,317 $212,868 $194,707
          


Eagle Bancorp, Inc.           
GAAP Reconciliation (Unaudited)           
(dollars in thousands except per share data)   
 Three Months Ended December 31, 2017 Year Ended December 31, 2017
 GAAP Change Non-GAAP GAAP Change Non-GAAP
Income Statements:           
Income tax expense   35,395     (14,588)    20,807     85,504     (14,588)    70,916 
Net income$  15,569     14,588  $  30,157  $  100,232     14,588  $  114,820 
            
Earnings Per Common Share           
Earnings per weighted average common share, basic$  0.46  $  0.43  $  0.88  $  2.94  $  0.43  $  3.36 
Earnings per weighted average common share, diluted$  0.45  $  0.42  $  0.88  $  2.92  $  0.42  $  3.35 
            
Performance Ratios (annualized):           
Return on average assets 0.82%     1.60%   1.41%     1.62% 
Return on average common equity 6.49%     12.57%   11.06%     12.67% 
Return on average tangible common equity 7.31%     14.17%   12.54%     14.37% 
            
 As of December 31, 2017      
AssetsGAAP Change Non-GAAP      
Deferred income taxes   28,770     14,588     43,358       
Total Assets$  7,479,029  $  14,588  $  7,493,617       
            
Shareholders' Equity           
Retained earnings    431,544     14,588     446,132       
Total Shareholders' Equity   950,438     14,588     965,026       
Total Liabilities and Shareholders' Equity$  7,479,029     14,588  $  7,493,617       
            


Eagle Bancorp, Inc.     
Consolidated Balance Sheets (Unaudited)     
(dollars in thousands, except per share data)     
      
AssetsDecember 31, 2018 September 30, 2018 December 31, 2017
Cash and due from banks$  6,773  $  4,459  $  7,445 
Federal funds sold   11,934     17,284     15,767 
Interest bearing deposits with banks and other short-term investments   303,157     162,734     167,261 
Investment securities available for sale, at fair value   784,139     722,674     589,268 
Federal Reserve and Federal Home Loan Bank stock   23,506     37,257     36,324 
Loans held for sale   19,254     18,728     25,096 
Loans   6,991,447     6,844,672     6,411,528 
Less allowance for credit losses   (69,944)    (68,189)    (64,758)
Loans, net   6,921,503     6,776,483     6,346,770 
Premises and equipment, net   16,851     17,457     20,991 
Deferred income taxes   33,027     35,196     28,770 
Bank owned life insurance   73,441     73,007     60,947 
Intangible assets, net   105,766     106,481     107,212 
Other real estate owned   1,394     1,394     1,394 
Other assets   88,392     84,701     71,784 
Total Assets$  8,389,137  $  8,057,855  $  7,479,029 
      
Liabilities and Shareholders' Equity     
Deposits:     
Noninterest bearing demand$  2,104,220  $  2,057,886  $  1,982,912 
Interest bearing transaction   593,107     459,455     420,417 
Savings and money market   2,949,559     2,573,258     2,621,146 
Time, $100,000 or more   801,957     758,152     515,682 
Other time   525,442     523,554     313,827 
Total deposits   6,974,285     6,372,305     5,853,984 
Customer repurchase agreements   30,413     36,446     76,561 
Other short-term borrowings   -      325,000     325,000 
Long-term borrowings   217,296     217,198     216,905 
Other liabilities   58,202     45,255     56,141 
Total liabilities   7,280,196     6,996,204     6,528,591 
      
Shareholders' Equity     
Common stock, par value $.01 per share; shares authorized 100,000,000, shares     
issued and outstanding 34,387,919, 34,308,473, and 34,185,163, respectively   342     341     340 
Additional paid in capital   528,380     526,423     520,304 
Retained earnings   584,494     544,177     431,544 
Accumulated other comprehensive loss   (4,275)    (9,290)    (1,750)
Total Shareholders' Equity   1,108,941     1,061,651     950,438 
Total Liabilities and Shareholders' Equity$  8,389,137  $  8,057,855  $  7,479,029 
     `


Eagle Bancorp, Inc.       
Consolidated Statements of Income (Unaudited)       
(dollars in thousands, except per share data)       
    
 Three Months Ended December 31, Years Ended December 31,
Interest Income 2018  2017  2018  2017
Interest and fees on loans$97,682 $81,967 $368,606 $308,510
Interest and dividends on investment securities 5,382  3,360  17,907  12,214
Interest on balances with other banks and short-term investments 2,464  1,174  6,616  3,258
Interest on federal funds sold 53  25  157  52
Total interest income 105,581  86,526  393,286  324,034
Interest Expense       
Interest on deposits 20,314  7,820  60,210  27,286
Interest on customer repurchase agreements 59  61  225  197
Interest on other short-term borrowings 517  307  3,942  748
Interest on long-term borrowings 2,979  2,979  11,916  11,916
Total interest expense 23,869  11,167  76,293  40,147
Net Interest Income  81,712  75,359  316,993  283,887
Provision for Credit Losses 2,600  4,087  8,660  8,971
Net Interest Income After Provision For Credit Losses 79,112  71,272  308,333  274,916
        
Noninterest Income       
Service charges on deposits 1,826  1,723  7,014  6,364
Gain on sale of loans 1,331  2,536  5,963  9,275
Gain on sale of investment securities 29  -  97  542
Increase in the cash surrender value of  bank owned life insurance 434  603  1,507  1,711
Other income 2,469  4,634  8,005  11,480
Total noninterest income 6,089  9,496  22,586  29,372
Noninterest Expense       
Salaries and employee benefits 15,907  16,678  67,734  67,129
Premises and equipment expenses 3,969  4,019  15,660  15,632
Marketing and advertising 1,147  1,222  4,566  4,095
Data processing 2,570  2,163  9,714  8,220
Legal, accounting and professional fees 2,460  1,514  9,742  5,053
FDIC insurance 953  491  3,512  2,554
Other expenses 4,681  3,716  15,783  15,869
Total noninterest expense 31,687  29,803  126,711  118,552
Income Before Income Tax Expense 53,514  50,965  204,208  185,736
Income Tax Expense 13,197  35,396  51,932  85,504
Net Income $40,317 $15,569 $152,276 $100,232
        
Earnings Per Common Share       
Basic$1.17 $0.46 $4.44 $2.94
Diluted$1.17 $0.45 $4.42 $2.92
        


Eagle Bancorp, Inc.
Consolidated Average Balances, Interest Yields And Rates (Unaudited)
(dollars in thousands)
        
 Three Months Ended December 31,
  2018   2017 
 Average BalanceInterestAverage
Yield/Rate
 Average BalanceInterestAverage
Yield/Rate
ASSETS       
Interest earning assets:       
Interest bearing deposits with other banks and other short-term investments$  459,139$  2,4642.13%  $  381,339$  1,1751.22% 
Loans held for sale (1)   21,457   2564.77%     38,449   3793.94% 
Loans (1) (2)    6,897,434   97,4265.60%     6,207,505   81,5885.21% 
Investment securities available for sale (2)   775,706   5,3822.75%     603,550   3,3602.21% 
Federal funds sold   17,274   531.22%     12,151   250.82% 
Total interest earning assets   8,171,010   105,5815.13%     7,242,994   86,5274.74% 
        
Total noninterest earning assets   313,614      308,022  
Less: allowance for credit losses   69,144      63,392  
Total noninterest earning assets   244,470      244,630  
TOTAL ASSETS$  8,415,480   $  7,487,624  
        
LIABILITIES AND SHAREHOLDERS' EQUITY       
Interest bearing liabilities:       
Interest bearing transaction$  539,764$  1,0960.81%  $  380,137$  4560.48% 
Savings and money market   2,754,480   11,6881.68%     2,923,750   5,1130.69% 
Time deposits   1,329,294   7,5302.25%     811,484   2,2511.10% 
Total interest bearing deposits   4,623,538   20,3141.74%     4,115,371   7,8200.75% 
Customer repurchase agreements   40,859   590.57%     80,758   610.30% 
Other short-term borrowings   84,515   5172.39%     85,057   3071.41% 
Long-term borrowings   217,263   2,9795.37%     216,872   2,9795.38% 
Total interest bearing liabilities   4,966,175   23,8691.91%     4,498,058   11,1670.98% 
        
Noninterest bearing liabilities:       
Noninterest bearing demand   2,327,176      1,986,356  
Other liabilities   42,507      51,483  
Total noninterest bearing liabilities   2,369,683      2,037,839  
        
Shareholders’ Equity   1,079,622      951,727  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$  8,415,480   $  7,487,624  
        
Net interest income $  81,712   $  75,360 
Net interest spread  3.22%    3.76% 
Net interest margin  3.97%    4.13% 
Cost of funds  1.16%    0.61% 
        
(1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $4.7 million and $5.2 million for the three months ended December 31, 2018 and 2017, 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)
        
 Year Ended December 31,
  2018   2017 
 Average BalanceInterestAverage
Yield/Rate
 Average BalanceInterestAverage
Yield/Rate
ASSETS       
Interest earning assets:       
Interest bearing deposits with other banks and other short-term investments$  356,017$  6,6161.86%  $  313,296$  3,2581.04% 
Loans held for sale (1)   23,877   1,0954.59%     35,813   1,4003.91% 
Loans (1) (2)    6,638,136   367,5115.54%     5,939,985   307,1105.17% 
Investment securities available for sale (1)   692,753   17,9072.58%     557,049   12,2142.19% 
Federal funds sold   15,618   1571.01%     7,672   520.68% 
Total interest earning assets   7,726,401   393,2865.09%     6,853,815   324,0344.73% 
        
Total noninterest earning assets   299,653      296,562  
Less: allowance for credit losses   67,113      61,166  
Total noninterest earning assets   232,540      235,396  
TOTAL ASSETS$  7,958,941   $  7,089,211  
        
LIABILITIES AND SHAREHOLDERS' EQUITY       
Interest bearing liabilities:       
Interest bearing transaction$  460,599$  3,3480.73%  $  369,953$  1,5370.42% 
Savings and money market   2,691,726   35,5341.32%     2,739,776   17,2840.63% 
Time deposits   1,141,795   21,3281.87%     799,816   8,4651.06% 
Total interest bearing deposits   4,294,120   60,2101.40%     3,909,545   27,2860.70% 
Customer repurchase agreements   44,333   2250.51%     73,237   1970.27% 
Other short-term borrowings   192,131   3,9422.02%     65,416   7481.13% 
Long-term borrowings   217,117   11,9165.41%     216,724   11,9165.42% 
Total interest bearing liabilities   4,747,701   76,2931.61%     4,264,922   40,1470.94% 
        
Noninterest bearing liabilities:       
Noninterest bearing demand   2,150,431      1,878,120  
Other liabilities   38,167      40,000  
Total noninterest bearing liabilities   2,188,598      1,918,120  
        
Shareholders’ equity   1,022,642      906,169  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$  7,958,941   $  7,089,211  
        
Net interest income $  316,993   $  283,887 
Net interest spread  3.48%    3.79% 
Net interest margin  4.10%    4.15% 
Cost of funds  0.99%    0.58% 
        
(1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $19.6 million and $18.1 million for the years ended December 31, 2018 and 2017, 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: 2018   2018   2018   2018   2017   2017   2017   2017 
Total interest income$105,581  $102,360  $96,296  $89,049  $86,526  $82,370  $79,344  $75,794 
Total interest expense 23,869   21,069   18,086   13,269   11,167   10,434   9,646   8,900 
Net interest income 81,712   81,291   78,210   75,780   75,359   71,936   69,698   66,894 
Provision for credit losses 2,600   2,441   1,650   1,969   4,087   1,921   1,566   1,397 
Net interest income after provision for credit losses 79,112   78,850   76,560   73,811   71,272   70,015   68,132   65,497 
Noninterest income (before investment gains) 6,060   5,640   5,527   5,262   9,496   6,773   6,997   5,565 
Gain on sale of investment securities 29   -   26   42   -   11   26   505 
Total noninterest income 6,089   5,640   5,553   5,304   9,496   6,784   7,023   6,070 
Salaries and employee benefits 15,907   17,157   17,812   16,858   16,678   16,905   16,869   16,677 
Premises and equipment 3,969   3,889   3,873   3,929   4,019   3,846   3,920   3,847 
Marketing and advertising 1,147   1,191   1,291   937   1,222   732   1,247   894 
Other expenses 10,664   9,377   9,313   9,397   7,884   8,033   7,965   7,814 
Total noninterest expense 31,687   31,614   32,289   31,121   29,803   29,516   30,001   29,232 
Income before income tax expense 53,514   52,876   49,824   47,994   50,965   47,283   45,154   42,335 
Income tax expense 13,197   13,928   12,528   12,279   35,396   17,409   17,382   15,318 
Net income 40,317   38,948   37,296   35,715   15,569   29,874   27,772   27,017 
                
                
Per Share Data:               
Earnings per weighted average common share, basic$1.17  $1.14  $1.09  $1.04  $0.46  $0.87  $0.81  $0.79 
Earnings per weighted average common share, diluted$1.17  $1.13  $1.08  $1.04  $0.45  $0.87  $0.81  $0.79 
Weighted average common shares outstanding, basic 34,349,089   34,308,684   34,305,693   34,260,882   34,179,793   34,173,893   34,128,598   34,069,528 
Weighted average common shares outstanding, diluted 34,460,985   34,460,794   34,448,354   34,406,310   34,334,873   34,338,442   34,324,120   34,284,316 
Actual shares outstanding at period end 34,387,919   34,308,473   34,305,071   34,303,056   34,185,163   34,174,009   34,169,924   34,110,056 
Book value per common share at period end$32.25  $30.94  $29.82  $28.72  $27.80  $27.33  $26.42  $25.59 
Tangible book value per common share at period end (1)$29.17  $27.84  $26.71  $25.60  $24.67  $24.19  $23.28  $22.45 
                
Performance Ratios (annualized):               
Return on average assets 1.90%   1.93%   1.92%   1.91%   0.82%   1.66%   1.60%   1.62% 
Return on average common equity 14.82%   14.85%   14.93%   14.99%   6.49%   12.86%   12.51%   12.74% 
Return on average tangible common equity 16.43%   16.54%   16.71%   16.86%   7.31%   14.55%   14.22%   14.56% 
Net interest margin 3.97%   4.14%   4.15%   4.17%   4.13%   4.14%   4.16%   4.14% 
Efficiency ratio (2) 36.09%   36.37%   38.55%   38.38%   35.12%   37.49%   39.10%   40.06% 
                
Other Ratios:               
Allowance for credit losses to total loans (3) 1.00%   1.00%   1.00%   1.00%   1.01%   1.03%   1.02%   1.03% 
Allowance for credit losses to total nonperforming loans 429.72%   452.28%   612.42%   491.56%   489.20%   379.11%   356.00%   416.91% 
Nonperforming loans to total loans (3) 0.23%   0.22%   0.16%   0.20%   0.21%   0.27%   0.29%   0.25% 
Nonperforming assets to total assets 0.21%   0.20%   0.16%   0.19%   0.20%   0.24%   0.26%   0.22% 
Net charge-offs (annualized) to average loans (3) 0.05%   0.05%   0.05%   0.06%   0.15%   0.00%   0.02%   0.04% 
Tier 1 capital (to average assets) 12.08%   12.13%   11.97%   11.76%   11.45%   11.78%   11.61%   11.51% 
Total capital (to risk weighted assets) 16.07%   15.74%   15.59%   15.32%   15.02%   15.30%   15.13%   14.97% 
Common equity tier 1 capital (to risk weighted assets) 12.47%   12.11%   11.89%   11.57%   11.23%   11.40%   11.18%   10.97% 
Tangible common equity ratio (1) 12.11%   12.01%   11.79%   11.57%   11.44%   11.35%   11.15%   10.97% 
                
Average Balances (in thousands):               
Total assets$8,415,480  $8,023,535  $7,789,564  $7,597,485  $7,487,624  $7,128,769  $6,959,994  $6,772,164 
Total earning assets$8,171,010  $7,793,422  $7,558,138  $7,373,535  $7,242,994  $6,897,613  $6,728,055  $6,538,377 
Total loans$6,897,434  $6,646,264  $6,569,931  $6,433,730  $6,207,505  $5,946,411  $5,895,174  $5,705,261 
Total deposits$6,950,714  $6,485,144  $6,269,126  $6,063,017  $6,101,727  $5,827,953  $5,660,119  $5,554,402 
Total borrowings$342,637  $464,460  $485,729  $523,369  $382,687  $344,959  $375,124  $318,143 
Total shareholders’ equity$1,079,622  $1,040,826  $1,002,091  $966,585  $951,727  $921,493  $890,498  $859,779 
                
 
(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.