Eagle Bancorp, Inc. Announces Record Quarterly Earnings, With Annual Net Income Up 33%, and Loan Growth of 18%

company logo

BETHESDA, Md., Jan. 22, 2014 (GLOBE NEWSWIRE) -- Eagle Bancorp, Inc. (the "Company") (Nasdaq:EGBN), the parent company of EagleBank, today announced record quarterly net income of $12.0 million for the quarter ended December 31, 2013, an 18% increase over the $10.2 million net income for the quarter ended December 31, 2012. Net income available to common shareholders for the quarter ended December 31, 2013 increased 18% to $11.9 million ($0.46 per basic common share and $0.45 per diluted common share), as compared to $10.1 million ($0.40 per basic common share and $0.39 per diluted common share) for the same period in 2012.

For the year ended December 31, 2013, the Company's net income was $47.0 million, a 33% increase over the $35.3 million for the year ended December 31, 2012. Net income available to common shareholders was $46.4 million ($1.81 per basic common share and $1.76 per diluted common share), as compared to $34.7 million ($1.50 per basic common share and $1.46 per diluted common share) for the year ended December 31, 2012, a 34% increase. Per share amounts for all prior periods have been adjusted to reflect the 10% stock dividend distributed on June 14, 2013.

"We are extremely pleased to report another quarter of record earnings and continued strong and balanced financial performance" noted Ronald D. Paul, Chairman and Chief Executive Officer of Eagle Bancorp, Inc. "The Company's earnings have now increased in each quarter since the fourth quarter of 2008." Mr. Paul added "for the fourth quarter of 2013, the Company's performance was highlighted by growth in total loans and total deposits, an expanded net interest margin from an already favorable level, very strong asset quality trends in all respects and a continuation of the Company's strong cost management. The strong quarterly earnings added to an already solid capital base."

For the fourth quarter of 2013, total loans grew 5.3% and were 18.1% higher at December 31, 2013 than December 31, 2012. For the fourth quarter of 2013, total deposits grew 8.1% and were 11.3% higher at December 31, 2013 than December 31, 2012. The net interest margin was 4.40% for the fourth quarter, 9 basis points higher than both the third quarter of 2013 and the fourth quarter of 2012. Mr. Paul added, "The continuing emphasis on disciplined pricing for both new loans and funding sources has resulted in a more favorable net interest margin position at December 31, 2013."

The Company was able to grow its net interest income for the fourth quarter of 2013 at a substantial rate of 5% as compared to the third quarter in 2013 ($38.7 million versus $36.7 million) and effectively absorbed lower total noninterest earnings attributable primarily to lower levels of residential mortgage originations and sales.

Total revenue (net interest income plus noninterest income) for the fourth quarter of 2013 was $43.0 million or 3% above the third quarter 2013 amount ($41.9 million) and was 5% above the $40.8 million of total revenue earned for the fourth quarter of 2012. For the full year 2013, total revenue was $169.5 million as compared to $148.9 million in 2012, a 14% increase.

For the fourth quarter of 2013, revenue from residential mortgage banking net interest income and fees was 2.4% of total revenue versus 9.4% of total revenue for the fourth quarter of 2012. For the year of 2013, the Company produced 7.2% of total revenue from its residential mortgage division net interest income and fees, as compared to 8.8% of total revenue for the same period in 2012. The Company assesses its residential mortgage loan area on an ongoing basis in light of changes in market conditions, and adjusts the scope of the division accordingly. The Company continues to focus its activities on generating spread income, while also looking to residential mortgage banking as a component of the Company's ongoing growth.

Mr. Paul emphasized "that all asset quality measures showed improvement at year end 2013, as compared to both September 30, 2013 and December 31, 2012. The combination of lower levels of nonperforming loans and OREO, lower net charge-offs and consistent loan loss provisioning resulted in the allowance for loan losses ending December 31, 2013 at 1.39% of total loans and 166% of nonperforming loans."

Lastly, Mr. Paul noted that for the fourth quarter of 2013, the Company's operating cost management remained strong. The efficiency ratio was 50%, which reflects management's determined, continuous efforts to control costs while not inhibiting growth or our ability to service our customers. Mr. Paul further noted the favorable level of noninterest expenses to average assets of 2.39%. "We will continue to have strict oversight of costs, while maintaining an infrastructure that maximizes our ability to not just remain competitive, but to grow."

At December 31, 2013, total assets were $3.77 billion, compared to $3.41 billion at December 31, 2012, an 11% increase. As compared to September 30, 2013, total assets at December 31, 2013 increased by $266.6 million, or 8%. Total loans (excluding loans held for sale) were $2.95 billion at December 31, 2013 compared to $2.49 billion at December 31, 2012, an 18% increase. As compared to September 30, 2013, total loans at December 31, 2013 increased by $148.3 million, a 5% increase. Total deposits were $3.23 billion at December 31, 2013, compared to deposits of $2.90 billion at December 31, 2012, an 11% increase. As compared to September 30, 2013, total deposits at December 31, 2013 increased by $241.3 million, an 8% increase. The level of deposit gains in 2013 was impacted by a loss of $130.0 million of trustee deposits in March 2013 (earlier reported) related to the expiration of the TAG program. Loans held for sale amounted to $42.0 million at December 31, 2013 as compared to $226.9 million at December 31, 2012, an 82% decrease. As compared to September 30, 2013 loans held for sale increased by $3.0 million, a 7% increase.

The investment portfolio totaled $378.1 million at December 31, 2013, a 26% increase from the $299.8 million balance at December 31, 2012. As compared to September 30, 2013, the investment portfolio at December 31, 2013 increased by $22.3 million, a 6% increase. Total borrowed funds (excluding customer repurchase agreements) were $39.3 million at December 31, 2013, December 31, 2012 and September 30, 2013, respectively. Total shareholders' equity increased to $393.9 million at December 31, 2013, compared to $350.0 million and $382.1 million at December 31, 2012 and September 30, 2013, respectively, reflecting growth in retained earnings. The Company's capital position remains substantially in excess of regulatory requirements for well capitalized status, with a total risk based capital ratio of 13.02% at December 31, 2013, as compared to a total risk based capital ratio of 12.20% at December 31, 2012. In addition, the tangible common equity ratio (tangible common equity to tangible assets) increased to 8.86% at December 31, 2013, from 8.50% at December 31, 2012.

At December 31, 2013, the Company's nonperforming assets amounted to $33.9 million, representing 0.90% of total assets, compared to $38.8 million of nonperforming assets, or 1.11% of total assets at September 30, 2013 and $36.0 million of nonperforming assets, or 1.06% of total assets at December 31, 2012. Management continues to remain attentive to early 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 loan losses, at 1.39% of total loans (excluding loans held for sale) at December 31, 2013, is adequate to absorb potential credit losses within the loan portfolio at that date. The allowance for credit losses represented 166% of nonperforming loans at December 31, 2013, as compared to 144% at September 30, 2013 and 122% at December 31, 2012. The decrease in the allowance for credit losses as a percentage of total loans at December 31, 2013, as compared to September 30, 2013, from 1.42% to 1.39%, is due to increased loan growth, and overall improved credit quality in the loan portfolio at December 31, 2013.

Analysis of the three months ended December 31, 2013 compared to December 31, 2012

For the three months ended December 31, 2013, the Company reported an annualized return on average assets ("ROAA") of 1.33% as compared to 1.25% for the three months ended December 31, 2012. The annualized return on average common equity ("ROAE") for the quarter ended December 31, 2013 was 14.07%, as compared to 13.95% for the quarter ended December 31, 2012. The higher ROAA and ROAE ratios for fourth quarter of 2013 as compared to 2012 was due primarily to a combination of higher net interest margin, improved credit quality resulting in lower provision expense, and strong cost management.

Net interest income increased 11.4% for the three months ended December 31, 2013 over the same period in 2012, resulting from both growth in average earning assets of 8.8% and an expanded net interest margin for the three months ended December 31, 2013. The net interest margin was 4.40% as compared to 4.31% for the three months ended December 31, 2012. The Company believes its net interest margin remains favorable compared to peer banking companies and that its disciplined approach to managing its loan portfolio yield to 5.40% for the fourth quarter of 2013 has been a significant factor in its overall profitability.

The efficiency ratio, which measures the ratio of noninterest expense to total revenue, remained favorable at 50.03% for the fourth quarter of 2013, as compared to 49.82% for the fourth quarter of 2012. As a percentage of average assets, total noninterest expense improved to 2.39% for the fourth quarter of 2013 as compared to 2.49% for the same period in 2012. Noninterest expenses totaled $21.5 million for the three months ended December 31, 2013, as compared to $20.3 million for the three months ended December 31, 2012, a 6% increase. Cost increases for salaries and benefits were $595 thousand, due to staffing increases primarily as a result of growth since December 31, 2012 in commercial lending and branch personnel and merit and benefit cost increases. Premises and equipment expenses were $297 thousand higher, due to the cost of a new branch office and increases in leasing costs. Data processing expenses increased by $305 thousand due to system enhancements and increased customer transaction volume.

The provision for credit losses was $2.5 million for the three months ended December 31, 2013 as compared to $4.1 million for the three months ended December 31, 2012. Net charge-offs of $1.3 million in the fourth quarter of 2013 represented 0.18% of average loans, excluding loans held for sale, as compared to $2.2 million or 0.37% of average loans, excluding loans held for sale, in the fourth quarter of 2012, a 43% dollar decline. Net charge-offs in the fourth quarter of 2013 were attributable primarily to commercial and industrial loans ($831 thousand), and commercial real estate loans ($375 thousand). The lower provisioning in the fourth quarter of 2013, as compared to the fourth quarter of 2012, is due to a combination of lower net charge-offs, and overall improved asset quality in the loan portfolio.

Noninterest income for the three months ended December 31, 2013 decreased to $4.3 million from $6.1 million for the three months ended December 31, 2012, a 29% decrease. This decrease was primarily due to lower gains on the sale of residential mortgage loans of $3.0 million, offset by a combination of an increase in service charges income of $221 thousand, higher income from Bank Owned Life Insurance of $202 thousand, higher loan fees and insurance income of $405 thousand, and higher income from sales of SBA loans of $148 thousand. There were $4 thousand of investment securities losses recorded for the fourth quarter of 2013, as compared to investment securities losses of $75 thousand for the fourth quarter of 2012. Excluding investment securities losses, total noninterest income was $4.3 million for the fourth quarter of 2013, as compared to $6.1 million for the fourth quarter of 2012, a decrease of 30%.

Analysis of the twelve months ended December 31, 2013 compared to December 31, 2012

For the twelve months ended December 31, 2013, the Company reported an ROAA of 1.37% as compared to 1.18% for the twelve months of 2012, while the ROAE was 14.60% in 2013, as compared to 14.14% for the same twelve month period in 2012. The higher ROAA and ROAE ratios for the twelve months of 2013 as compared to 2012 was primarily due to improved credit quality, lower provision expense, higher noninterest income, and strong cost management. Contributing to the growth in ROAA and ROAE was solid growth in net interest income and a favorable net interest margin.

For the year of 2013, net interest income increased 13.5% over the year of 2012. Average earning assets increased 14.1%, while the net interest margin was 4.30% for the year of 2013, as compared to 4.32% for the year of 2012. For the year of 2013, the Company was able to maintain a strong net interest margin due to disciplined loan pricing practices, and has been able to reduce its cost of funds, while maintaining a favorable deposit mix, largely resulting from ongoing efforts to increase and expand client relationships.

The efficiency ratio improved to 49.90% for the year of 2013 from 51.40% for 2012. As a percentage of average assets, total noninterest expenses improved to 2.46% for the year of 2013 from 2.55% for the year 2012. Total noninterest expenses increased 11% for the year 2013 to $84.6 million as compared to $76.5 million for 2012. Cost increases for salaries and benefits were $3.8 million, primarily due to merit increases, incentive compensation and benefits increases, and staffing increases resulting primarily from additional lending personnel. Premises and equipment expenses were $1.7 million higher due primarily to the cost of new branch offices and normal increases in leasing costs. Data processing costs increased by $1.5 million due to system enhancements and increased customer transaction expenses. Decreases in legal and professional fees of $804 thousand were due primarily to declines in costs related to problem loans. FDIC insurance premiums were $174 thousand higher due to growth in total assets. Other expenses increased for the first twelve months of 2013 versus 2012 by $1.8 million, due primarily to a nonrecurring expense and increased OREO related costs.

The provision for credit losses was $9.6 million for the year of 2013 as compared to $16.2 million in 2012. The lower provisioning is due to a combination of lower net charge-offs, a lower level of nonperforming loans and overall improvement in asset quality. For the year of 2013, net charge-offs totaled $6.2 million (0.23% of average loans) compared to $8.4 million (0.37% of average loans) for the year of 2012, a dollar decline of 26%. Net charge-offs in the year of 2013 were attributable to charge-offs of commercial and industrial loans ($3.5 million), construction loans ($1.3 million), the unguaranteed portion of SBA loans ($659 thousand), commercial real estate loans ($602 thousand) and home equity and consumer loans ($135 thousand).

Noninterest income for the year of 2013 was $24.7 million compared to $21.4 million in 2012, an increase of 15.7%. This increase was due primarily to a $1.7 million increase in gains realized on the sale of SBA loans, offset by a $1.0 million decrease in gains realized on the sale of residential loans, a $670 thousand increase on service charges on deposit accounts and a $1.9 million increase in other noninterest income due primarily to increased loan related fees and annuity income. Additionally, bank owned life insurance income increased $328 thousand due to new investments. Net investment gains were $19 thousand in 2013 and $690 thousand in 2012. A $529 thousand loss on the early extinguishment of debt was recorded in September of 2012 due to the restructuring of a Federal Home Loan Bank advance. Excluding investment securities gains and the loss on the early extinguishment of debt, total noninterest income was $24.7 million for the year of 2013, as compared to $21.2 million for 2012, a 17% increase, which represented 15% of total revenue for the year of 2013 as compared to 14% for the year of 2012.

The financial information which follows provides more detail on the Company's financial performance for the twelve and three months ended December 31, 2013 as compared to the twelve and three months ended December 31, 2012, 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, 2012 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 eighteen full service 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 the fourth quarter 2013 financial results on Thursday, January 23, 2014 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 30586191, 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 6, 2014.

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, 2012 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) Twelve Months Ended Three Months Ended
December 31, December 31,
2013 2012 2013 2012
Income Statements:
Total interest income $ 157,294 $ 141,943 $ 41,652 $ 38,164
Total interest expense 12,504 14,414 2,938 3,427
Net interest income 144,790 127,529 38,714 34,737
Provision for credit losses 9,602 16,190 2,508 4,139
Net interest income after provision for credit losses 135,188 111,339 36,206 30,598
Noninterest income (before investment gains & extinguisment of debt) 24,697 21,203 4,308 6,135
Gain on sale of investment securities 19 690 (4) (75)
Loss on early extinguishment of debt -- (529) -- --
Total noninterest income 24,716 21,364 4,304 6,060
Total noninterest expense 84,579 76,531 21,524 20,325
Income before income tax expense 75,325 56,172 18,986 16,333
Income tax expense 28,318 20,883 6,983 6,135
Net income 47,007 35,289 12,003 10,198
Preferred stock dividends and discount accretion 566 566 141 141
Net income available to common shareholders $ 46,441 $ 34,723 $ 11,862 $ 10,057
Per Share Data (1):
Earnings per weighted average common share, basic $ 1.81 $ 1.50 $ 0.46 $ 0.40
Earnings per weighted average common share, diluted $ 1.76 $ 1.46 $ 0.45 $ 0.39
Weighted average common shares outstanding, basic 25,726,062 23,135,886 25,835,054 24,915,837
Weighted average common shares outstanding, diluted 26,358,611 23,743,815 26,495,545 25,601,623
Actual shares outstanding 25,885,863 25,250,378 25,885,863 25,250,378
Book value per common share at period end $ 13.03 $ 11.62 $ 13.03 $ 11.62
Tangible book value per common share at period end (2) $ 12.89 $ 11.47 $ 12.89 $ 11.47
Performance Ratios (annualized):
Return on average assets 1.37% 1.18% 1.33% 1.25%
Return on average common equity 14.60% 14.14% 14.07% 13.95%
Net interest margin 4.30% 4.32% 4.40% 4.31%
Efficiency ratio (3) 49.90% 51.40% 50.03% 49.82%
Other Ratios:
Allowance for credit losses to total loans 1.39% 1.50% 1.39% 1.50%
Allowance for credit losses to total nonperforming loans 165.66% 122.19% 165.66% 122.19%
Nonperforming loans to total loans 0.84% 1.23% 0.84% 1.23%
Nonperforming assets to total assets 0.90% 1.06% 0.90% 1.06%
Net charge-offs (annualized) to average loans 0.23% 0.37% 0.18% 0.37%
Common equity to total assets 8.94% 8.60% 8.94% 8.60%
Tier 1 leverage ratio 10.93% 10.44% 10.93% 10.44%
Tier 1 risk based capital ratio 11.53% 10.80% 11.53% 10.80%
Total risk based capital ratio 13.02% 12.20% 13.02% 12.20%
Tangible common equity to tangible assets (2) 8.86% 8.50% 8.86% 8.50%
Loan Balances - Period End (in thousands):
Commercial and Industrial $ 694,350 $ 545,070 $ 694,350 $ 545,070
Commercial real estate - owner occupied $ 317,491 $ 297,857 $ 317,491 $ 297,857
Commercial real estate - income producing $ 1,119,799 $ 914,638 $ 1,119,799 $ 914,638
1-4 Family mortgage $ 90,418 $ 61,871 $ 90,418 $ 61,871
Construction - commercial and residential $ 574,167 $ 533,722 $ 574,167 $ 533,722
Construction - C&I (owner occupied) $ 34,660 $ 28,808 $ 34,660 $ 28,808
Home equity $ 110,242 $ 106,844 $ 110,242 $ 106,844
Other consumer $ 4,031 $ 4,285 $ 4,031 $ 4,285
Average Balances (in thousands):
Total assets $ 3,439,103 $ 2,997,994 $ 3,576,715 $ 3,247,498
Total earning assets $ 3,370,466 $ 2,953,417 $ 3,485,546 $ 3,203,462
Total loans held for sale $ 90,161 $ 140,167 $ 27,767 $ 186,122
Total loans $ 2,644,892 $ 2,281,027 $ 2,867,955 $ 2,442,418
Total deposits $ 2,913,795 $ 2,541,151 $ 3,038,949 $ 2,748,567
Total borrowings $ 133,896 $ 143,542 $ 126,409 $ 137,525
Total shareholders' equity $ 374,703 $ 302,234 $ 391,036 $ 343,401
(1) Per share amounts and the number of outstanding shares have been adjusted to give effect to the 10% common stock dividend distributed on June 14, 2013.
(2) The Company considers the following non-GAAP measurements 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.
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.
GAAP Reconciliation (Unaudited)
(dollars in thousands except per share data)
December 31, 2013 December 31, 2012
Common shareholders' equity $ 337,263 $ 293,376
Less: Intangible assets (3,510) (3,785)
Tangible common equity $ 333,753 $ 289,591
Book value per common share $ 13.03 $ 11.62
Less: Intangible book value per common share (0.14) (0.15)
Tangible book value per common share $ 12.89 $ 11.47
Total assets $ 3,771,503 $ 3,409,441
Less: Intangible assets (3,510) (3,785)
Tangible assets $ 3,767,993 $ 3,405,656
Tangible common equity ratio 8.86% 8.50%
(3) Computed by dividing noninterest expense by the sum of net interest income and noninterest income.
Eagle Bancorp, Inc.
Consolidated Balance Sheets (Unaudited)
(dollars in thousands, except per share data)
Assets December 31, 2013 September 30, 2013 December 31, 2012
Cash and due from banks $ 9,577 $ 8,013 $ 7,439
Federal funds sold 5,695 3,844 7,852
Interest bearing deposits with banks and other short-term investments 291,688 208,522 324,043
Investment securities available for sale, at fair value 378,133 355,830 299,820
Federal Reserve and Federal Home Loan Bank stock 11,272 11,246 10,694
Loans held for sale 42,030 39,206 226,923
Loans 2,945,158 2,796,840 2,493,095
Less allowance for credit losses (40,921) (39,687) (37,492)
Loans, net 2,904,237 2,757,153 2,455,603
Premises and equipment, net 16,737 16,319 15,261
Deferred income taxes 28,949 25,982 19,128
Bank owned life insurance 39,738 29,555 14,135
Intangible assets, net 3,510 3,597 3,785
Other real estate owned 9,225 11,285 5,299
Other assets 30,712 34,376 19,459
Total Assets $ 3,771,503 $ 3,504,928 $ 3,409,441
Liabilities and Shareholders' Equity
Deposits:
Noninterest bearing demand $ 849,409 $ 898,831 $ 881,390
Interest bearing transaction 118,580 104,004 113,813
Savings and money market 1,811,088 1,538,630 1,374,869
Time, $100,000 or more 203,706 193,000 232,875
Other time 242,631 249,594 294,275
Total deposits 3,225,414 2,984,059 2,897,222
Customer repurchase agreements 80,471 82,266 101,338
Long-term borrowings 39,300 39,300 39,300
Other liabilities 32,455 17,203 21,605
Total liabilities 3,377,640 3,122,828 3,059,465
Shareholders' Equity
Preferred stock, par value $.01 per share, shares authorized 1,000,000, Series B, $1,000 per share liquidation preference, shares issued and outstanding 56,600 at December 31, 2013, September 30, 2013 and December 31, 2012 56,600 56,600 56,600
Common stock, par value $.01 per share; shares authorized 50,000,000, shares issued and outstanding 25,885,863, 25,799,220 and 22,954,889 respectively 253 252 226
Warrant 946 946 946
Additional paid in capital 242,990 241,131 180,593
Retained earnings 96,393 84,534 106,146
Accumulated other comprehensive (loss) income (3,319) (1,363) 5,465
Total Shareholders' Equity 393,863 382,100 349,976
Total Liabilities and Shareholders' Equity $ 3,771,503 $ 3,504,928 $ 3,409,441
Eagle Bancorp, Inc.
Consolidated Statements of Operations (Unaudited)
(dollars in thousands, except per share data)
Twelve Months Ended Three Months Ended
December 31, December 31,
Interest Income 2013 2012 2013 2012
Interest and fees on loans $ 148,801 $ 134,600 $ 39,322 $ 36,439
Interest and dividends on investment securities 7,792 6,824 2,203 1,545
Interest on balances with other banks and short-term investments 689 475 125 177
Interest on federal funds sold 12 44 2 3
Total interest income 157,294 141,943 41,652 38,164
Interest Expense
Interest on deposits 10,614 12,057 2,492 2,927
Interest on customer repurchase agreements 254 325 57 75
Interest on short-term borrowings -- 3 -- 1
Interest on long-term borrowings 1,636 2,029 389 424
Total interest expense 12,504 14,414 2,938 3,427
Net Interest Income 144,790 127,529 38,714 34,737
Provision for Credit Losses 9,602 16,190 2,508 4,139
Net Interest Income After Provision For Credit Losses 135,188 111,339 36,206 30,598
Noninterest Income
Service charges on deposits 4,607 3,937 1,256 1,035
Gain on sale of loans 14,578 13,942 1,223 4,075
Gain on sale of investment securities 19 690 (4) (75)
Loss on early extinguishment of debt -- (529) -- --
Increase in the cash surrender value of bank owned life insurance 720 392 300 98
Other income 4,792 2,932 1,529 927
Total noninterest income 24,716 21,364 4,304 6,060
Noninterest Expense
Salaries and employee benefits 47,481 43,684 12,759 12,164
Premises and equipment expenses 11,923 10,218 2,974 2,677
Marketing and advertising 1,686 1,759 519 419
Data processing 5,903 4,415 1,447 1,142
Legal, accounting and professional fees 3,449 4,253 863 938
FDIC insurance 2,263 2,089 483 536
Other expenses 11,874 10,113 2,479 2,449
Total noninterest expense 84,579 76,531 21,524 20,325
Income Before Income Tax Expense 75,325 56,172 18,986 16,333
Income Tax Expense 28,318 20,883 6,983 6,135
Net Income 47,007 35,289 12,003 10,198
Preferred Stock Dividends 566 566 141 141
Net Income Available to Common Shareholders $ 46,441 $ 34,723 $ 11,862 $ 10,057
Earnings Per Common Share (1)
Basic $ 1.81 $ 1.50 $ 0.46 $ 0.40
Diluted $ 1.76 $ 1.46 $ 0.45 $ 0.39
(1) Per share amounts have been adjusted to give effect to the 10% common stock dividend paid on June 14, 2013.
Eagle Bancorp, Inc.
Consolidated Average Balances, Interest Yields And Rates (Unaudited)
(dollars in thousands)
Three Months Ended December 31,
2013 2012
Average Average Average Average
Balance Interest Yield/Rate Balance Interest Yield/Rate
ASSETS
Interest earning assets:
Interest bearing deposits with other banks and other short-term investments $ 204,320 $ 125 0.24% $ 258,577 $ 177 0.27%
Loans held for sale (1) 27,767 282 4.06% 186,122 1,600 3.44%
Loans (1) (2) 2,867,955 39,039 5.40% 2,442,418 34,839 5.67%
Investment securities available for sale (2) 380,562 2,202 2.30% 310,851 1,545 1.98%
Federal funds sold 4,942 2 0.16% 5,494 3 0.22%
Total interest earning assets 3,485,546 41,650 4.74% 3,203,462 38,164 4.74%
Total noninterest earning assets 131,249 80,580
Less: allowance for credit losses 40,080 36,544
Total noninterest earning assets 91,169 44,036
TOTAL ASSETS $ 3,576,715 $ 3,247,498
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
Interest bearing transaction $ 104,466 $ 71 0.27% $ 110,688 $ 93 0.33%
Savings and money market 1,621,712 1,471 0.36% 1,312,792 1,528 0.46%
Time deposits 448,838 950 0.84% 471,591 1,306 1.10%
Total interest bearing deposits 2,175,016 2,492 0.45% 1,895,071 2,927 0.61%
Customer repurchase agreements 87,084 57 0.26% 97,622 75 0.31%
Other short-term borrowings 25 -- -- 603 1 --
Long-term borrowings 39,300 388 3.86% 39,300 424 4.22%
Total interest bearing liabilities 2,301,425 2,937 0.51% 2,032,596 3,427 0.67%
Noninterest bearing liabilities:
Noninterest bearing demand 863,933 853,496
Other liabilities 20,321 18,005
Total noninterest bearing liabilities 884,254 871,501
Shareholders' equity 391,036 343,401
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,576,715 $ 3,247,498
Net interest income $ 38,713 $ 34,737
Net interest spread 4.23% 4.07%
Net interest margin 4.40% 4.31%
(1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $2.3 million and $1.7 million for the three months ended December 31, 2013 and 2012, 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)
Twelve Months Ended December 31,
2013 2012
Average Average Average Average
Balance Interest Yield/Rate Balance Interest Yield/Rate
ASSETS
Interest earning assets:
Interest bearing deposits with other banks and other short-term investments $ 280,399 $ 689 0.25% $ 186,157 $ 475 0.26%
Loans held for sale (1) 90,161 3,140 4.64% 140,167 4,945 3.53%
Loans (1) (2) 2,644,892 145,660 5.51% 2,281,027 129,655 5.68%
Investment securities available for sale (2) 348,143 7,792 2.24% 330,670 6,824 2.06%
Federal funds sold 6,871 12 0.17% 15,396 44 0.29%
Total interest earning assets 3,370,466 157,293 4.67% 2,953,417 141,943 4.81%
Total noninterest earning assets 107,844 77,827
Less: allowance for credit losses 39,207 33,250
Total noninterest earning assets 68,637 44,577
TOTAL ASSETS $ 3,439,103 $ 2,997,994
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
Interest bearing transaction $ 103,763 $ 298 0.29% $ 94,848 $ 289 0.30%
Savings and money market 1,516,699 5,765 0.38% 1,183,402 5,946 0.50%
Time deposits 481,576 4,551 0.95% 481,661 5,822 1.21%
Total interest bearing deposits 2,102,038 10,614 0.50% 1,759,911 12,057 0.69%
Customer repurchase agreements 94,566 254 0.27% 96,141 325 0.34%
Other short-term borrowings 30 -- -- 697 3 --
Long-term borrowings 39,300 1,636 4.11% 46,704 2,029 4.27%
Total interest bearing liabilities 2,235,934 12,504 0.56% 1,903,453 14,414 0.76%
Noninterest bearing liabilities:
Noninterest bearing demand 811,757 781,240
Other liabilities 16,709 11,067
Total noninterest bearing liabilities 828,466 792,307
Shareholders' equity 374,703 302,234
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,439,103 $ 2,997,994
Net interest income $ 144,789 $ 127,529
Net interest spread 4.11% 4.05%
Net interest margin 4.30% 4.32%
(1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $7.9 million and $5.4 million for the twelve months ended December 31, 2013 and 2012, 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: 2013 2013 2013 2013 2012 2012 2012 2012
Total interest income $ 41,652 $ 39,724 $ 37,985 $ 37,933 $ 38,164 $ 36,636 $ 34,575 $ 32,568
Total interest expense 2,938 3,021 3,121 3,424 3,427 3,328 3,561 4,098
Net interest income 38,714 36,703 34,864 34,509 34,737 33,308 31,014 28,470
Provision for credit losses 2,508 1,372 2,357 3,365 4,139 3,638 4,443 3,970
Net interest income after provision for credit losses 36,206 35,331 32,507 31,144 30,598 29,670 26,571 24,500
Noninterest income (before investment gains/losses & extinguishment of debt) 4,308 5,236 7,065 8,088 6,135 4,916 4,293 5,859
Gain/(loss) on sale of investment securities (4) -- -- 23 (75) 464 148 153
Loss on early extinguishment of debt -- -- -- -- -- (529) -- --
Total noninterest income 4,304 5,236 7,065 8,111 6,060 4,851 4,441 6,012
Salaries and employee benefits 12,759 12,187 11,335 11,200 12,164 10,807 10,289 10,424
Premises and equipment 2,974 3,222 2,927 2,800 2,677 2,562 2,469 2,510
Marketing and advertising 519 426 394 347 419 497 557 286
Other expenses 5,272 5,838 6,029 6,350 5,065 5,241 5,222 5,342
Total noninterest expense 21,524 21,673 20,685 20,697 20,325 19,107 18,537 18,562
Income before income tax expense 18,986 18,894 18,887 18,558 16,333 15,414 12,475 11,950
Income tax expense 6,983 7,137 7,212 6,986 6,135 5,739 4,692 4,317
Net income 12,003 11,757 11,675 11,572 10,198 9,675 7,783 7,633
Preferred stock dividends and discount accretion 141 142 142 141 141 142 142 141
Net income available to common shareholders $ 11,862 $ 11,615 $ 11,533 $ 11,431 $ 10,057 $ 9,533 $ 7,641 $ 7,492
Per Share Data (1):
Earnings per weighted average common share, basic $ 0.46 $ 0.45 $ 0.45 $ 0.45 $ 0.40 $ 0.41 $ 0.34 $ 0.34
Earnings per weighted average common share, diluted $ 0.45 $ 0.44 $ 0.44 $ 0.44 $ 0.39 $ 0.40 $ 0.33 $ 0.33
Weighted average common shares outstanding, basic 25,835,054 25,784,287 25,742,185 25,518,523 24,915,837 23,158,050 22,327,796 22,122,043
Weighted average common shares outstanding, diluted 26,495,545 26,426,093 26,334,355 26,222,041 25,601,623 23,766,606 22,888,151 22,686,049
Actual shares outstanding 25,885,863 25,799,220 25,764,542 25,728,162 25,250,378 24,244,007 22,650,356 22,242,183
Book value per common share at period end $ 13.03 $ 12.62 $ 12.14 $ 11.86 $ 11.62 $ 11.05 $ 10.32 $ 9.86
Performance Ratios (annualized):
Return on average assets 1.33% 1.35% 1.41% 1.39% 1.25% 1.27% 1.08% 1.08%
Return on average common equity 14.07% 14.37% 14.75% 15.29% 13.95% 15.20% 13.52% 13.80%
Net interest margin 4.40% 4.31% 4.27% 4.20% 4.31% 4.44% 4.39% 4.11%
Efficiency ratio (2) 50.03% 51.68% 49.33% 48.56% 49.82% 50.07% 52.28% 53.83%
Other Ratios:
Allowance for credit losses to total loans (3) 1.39% 1.42% 1.47% 1.52% 1.50% 1.48% 1.47% 1.46%
Nonperforming loans to total loans (3) 0.84% 0.98% 0.87% 1.11% 1.23% 1.35% 1.42% 1.68%
Nonperforming assets to total assets 0.90% 1.11% 1.05% 1.12% 1.06% 1.25% 1.26% 1.41%
Net charge-offs (annualized) to average loans (3) 0.18% 0.20% 0.24% 0.33% 0.37% 0.36% 0.40% 0.34%
Tier 1 leverage ratio 10.93% 10.89% 10.81% 10.39% 10.44% 10.36% 9.63% 9.33%
Tier 1 risk based capital ratio 11.53% 11.61% 11.12% 11.08% 10.80% 10.76% 10.02% 10.08%
Total risk based capital ratio 13.02% 13.12% 12.53% 12.50% 12.20% 12.24% 11.53% 11.59%
Average Balances (in thousands):
Total assets $ 3,576,715 $ 3,467,193 $ 3,331,677 $ 3,378,362 $ 3,247,498 $ 3,022,584 $ 2,888,188 $ 2,830,693
Total earning assets $ 3,485,546 $ 3,383,547 $ 3,279,034 $ 3,331,930 $ 3,203,462 $ 2,977,950 $ 2,844,491 $ 2,784,747
Total loans held for sale $ 27,767 $ 63,579 $ 91,781 $ 179,476 $ 186,122 $ 158,011 $ 95,734 $ 120,098
Total loans $ 2,867,955 $ 2,668,429 $ 2,557,811 $ 2,480,862 $ 2,442,418 $ 2,346,046 $ 2,246,644 $ 2,086,511
Total deposits $ 3,038,949 $ 2,939,705 $ 2,810,033 $ 2,864,305 $ 2,748,567 $ 2,572,022 $ 2,447,985 $ 2,393,413
Total borrowings $ 126,409 $ 136,590 $ 137,337 $ 135,315 $ 137,525 $ 132,955 $ 150,644 $ 153,227
Total stockholders' equity $ 391,036 $ 377,246 $ 370,302 $ 359,859 $ 343,401 $ 306,072 $ 284,040 $ 274,923
(1) Per share amounts and the number of outstanding shares have been adjusted to give effect to the 10% common stock dividend paid on June 14, 2013.
(2) Computed by dividing noninterest expense by the sum of net interest income and noninterest income.
(3) Excludes loans held for sale.

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

Source:Eagle Bancorp, Inc.