×

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

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



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

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

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

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

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

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

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

For the full year of 2016, the net interest margin was 4.16% as compared to 4.33% for the year ended December 31, 2015. The sub-debt raise in July 2016 negatively impacted the net interest margin in the twelve month period ending December 31, 2016 by nine basis points. Mr. Paul noted, “The persistently low interest rate environment has continued to challenge bank spread earnings. In the current environment, the Company has continued its emphasis on disciplined pricing for both new loans and funding sources, which has resulted in the Company maintaining a superior net interest margin.”

Asset quality measures improved further in the fourth quarter of 2016 from an already solid position. For the fourth quarter of 2016, the Company recorded a net recovery (annualized) of 0.01% of average loans, as compared to net charge-offs (annualized) of 0.18% of average loans for the fourth quarter of 2015. At December 31, 2016, the Company’s nonperforming loans amounted to $17.9 million (0.31% of total loans) as compared to $22.2 million (0.41% of total loans) at September 30, 2016 and $13.2 million (0.26% of total loans) at December 31, 2015. Nonperforming assets amounted to $20.6 million (0.30% of total assets) at December 31, 2016 compared to $27.5 million (0.41% of total assets) at September 30, 2016 and $19.1 million (0.31% of total assets) at December 31, 2015.

Management continues to remain attentive to any signs of deterioration in borrowers’ financial conditions and is proactive in taking the appropriate steps to mitigate risk. Furthermore, the Company is diligent in placing loans on nonaccrual status and believes, based on its loan portfolio risk analysis, that its December 31, 2016 allowance for credit losses, at 1.04% of total loans (excluding loans held for sale), is adequate to absorb potential credit losses within the loan portfolio as of the end of the quarter. The allowance for credit losses was 1.04% of total loans at September 30, 2016 and 1.05% at December 31, 2015. The allowance for credit losses represented 330% of nonperforming loans at December 31, 2016.

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

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

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

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

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

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

Net interest income increased 7% for the three months ended December 31, 2016 over the same period in 2015 ($67.0 million versus $62.6 million). Growth in average earning assets was 19% and the net interest margin was 3.96% for the three months ended December 31, 2016, as compared to 4.38% for the three months ended December 31, 2015. The Company believes its net interest margin remains favorable compared to peer banking companies and that its disciplined approach to managing the loan portfolio yield to 5.11% for the fourth quarter in 2016 has been a significant factor in its overall profitability.

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

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

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

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

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

Net interest income increased 10% for the year ended December 31, 2016 over the same period in 2015 ($258.2 million versus $233.9 million). Growth in average earning assets was 15% and the net interest margin was 4.16% for the year ended December 31, 2016 as compared to 4.33% for the same period in 2015. The Company believes its net interest margin remains favorable compared to peer banking companies and that its disciplined approach to managing the loan portfolio yield to 5.11% for the year ended December 31, 2016 has been a significant factor in its overall profitability.

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

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

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

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

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

Conference Call: Eagle Bancorp will host a conference call to discuss its fourth quarter 2016 financial results on Thursday, January 19, 2017 at 10:00 a.m. eastern standard time. The public is invited to listen to this conference call by dialing 1.877.303.6220, conference ID Code is 46041015, or by accessing the call on the Company’s website, www.EagleBankCorp.com. A replay of the conference call will be available on the Company’s website through February 2, 2017.

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

Eagle Bancorp, Inc.
Consolidated Financial Highlights (Unaudited)
(dollars in thousands, except per share data)
Three Months Ended December 31, Twelve Months Ended December 31,
2016 2015 2016 2015
Income Statements:
Total interest income$ 75,795 $ 67,311 $ 285,805 $ 253,180
Total interest expense 8,771 4,735 27,641 19,238
Net interest income 67,024 62,576 258,164 233,942
Provision for credit losses 2,112 4,595 11,331 14,638
Net interest income after provision for credit losses 64,912 57,981 246,833 219,304
Noninterest income (before investment gains and extinguishment of debt) 6,943 6,462 26,090 25,504
Gain on sale of investment securities 71 30 1,194 2,254
Loss on early extinguishment of debt - - - (1,130)
Total noninterest income 7,014 6,492 27,284 26,628
Total noninterest expense 29,780
28,640 115,015 110,716
Income before income tax expense 42,146 35,833 159,102 135,216
Income tax expense 16,429 13,485 61,395 51,049
Net income 25,717 22,348 97,707 84,167
Preferred stock dividends - 62 - 601
Net income available to common shareholders$ 25,717 $ 22,286 $ 97,707 $ 83,566
Per Share Data:
Earnings per weighted average common share, basic$ 0.76 $ 0.67 $ 2.91 $ 2.54
Earnings per weighted average common share, diluted$ 0.75 $ 0.65 $ 2.86 $ 2.50
Weighted average common shares outstanding, basic 33,650,963 33,462,937 33,587,254 32,836,449
Weighted average common shares outstanding, diluted 34,233,940 34,069,786 34,181,616 33,479,592
Actual shares outstanding at period end 34,023,850 33,467,893 34,023,850 33,467,893
Book value per common share at period end $ 24.77 $ 22.07 $ 24.77 $ 22.07
Tangible book value per common share at period end (1)$ 21.61 $ 18.83 $ 21.61 $ 18.83
Performance Ratios (annualized):
Return on average assets 1.46% 1.50% 1.52% 1.49%
Return on average common equity 12.26% 12.08% 12.27% 12.32%
Net interest margin 3.96% 4.38% 4.16% 4.33%
Efficiency ratio (2) 40.22
% 41.47% 40.29% 42.49%
Other Ratios:
Allowance for credit losses to total loans (3) 1.04% 1.05% 1.04% 1.05%
Allowance for credit losses to total nonperforming loans 330.49% 397.95% 330.49% 397.95%
Nonperforming loans to total loans (3) 0.31% 0.26% 0.31% 0.26%
Nonperforming assets to total assets 0.30% 0.31% 0.30% 0.31%
Net charge-offs (annualized) to average loans (3) (0.01%) 0.18% 0.09% 0.17%
Common equity to total assets 12.23% 12.16% 12.23% 12.16%
Tier 1 capital (to average assets) 10.72% 10.90% 10.72% 10.90%
Total capital (to risk weighted assets) 14.89% 12.75% 14.89% 12.75%
Common equity tier 1 capital (to risk weighted assets) 10.80% 10.68% 10.80% 10.68%
Tangible common equity ratio (1) 10.84% 10.56% 10.84% 10.56%
Loan Balances - Period End (in thousands):
Commercial and Industrial$ 1,200,728 $ 1,052,257 $ 1,200,728 $ 1,052,257
Commercial real estate - owner occupied $ 640,870 $ 498,103 $ 640,870 $ 498,103
Commercial real estate - income producing $ 2,509,518 $ 2,115,478 $ 2,509,518 $ 2,115,478
1-4 Family mortgage$ 152,748 $ 147,365 $ 152,748 $ 147,365
Construction - commercial and residential$ 932,531 $ 985,607 $ 932,531 $ 985,607
Construction - C&I (owner occupied)$ 126,038 $ 79,769 $ 126,038 $ 79,769
Home equity$ 105,096 $ 112,885 $ 105,096 $ 112,885
Other consumer $ 10,365 $ 6,904 $ 10,365 $ 6,904
Average Balances (in thousands):
Total assets$ 6,984,492 $ 5,907,022 $ 6,436,774 $ 5,630,567
Total earning assets$ 6,752,859 $ 5,675,730 $ 6,208,976 $ 5,400,574
Total loans$ 5,591,790 $ 4,859,391 $ 5,338,716 $ 4,594,395
Total deposits$ 5,796,516 $ 4,952,282 $ 5,369,261 $ 4,697,263
Total borrowings$ 312,842 $ 168,652 $ 240,232 $ 168,110
Total shareholders’ equity$ 834,823 $ 757,199 $ 796,400 $ 738,468

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

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

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

(3) Excludes loans held for sale.

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

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

Eagle Bancorp, Inc.
Consolidated Average Balances, Interest Yields And Rates (Unaudited)
(dollars in thousands)
Three Months Ended December 31,
2016 2015
Average BalanceInterestAverage
Yield/Rate
Average BalanceInterestAverage
Yield/Rate
ASSETS
Interest earning assets:
Interest bearing deposits with other banks and other short-term investments$599,281$7980.53% $225,346$1290.23%
Loans held for sale (1) 70,874 6153.47% 40,587 3833.77%
Loans (1) (2) 5,591,790 71,8715.11% 4,859,391 63,8925.22%
Investment securities available for sale (2) 487,730 2,5082.05% 544,129 2,9032.12%
Federal funds sold 3,184 30.37% 6,277 40.19%
Total interest earning assets 6,752,859 75,7954.47% 5,675,730 67,3114.71%
Total noninterest earning assets 289,615 281,800
Less: allowance for credit losses 57,982 50,508
Total noninterest earning assets 231,633 231,292
TOTAL ASSETS$6,984,492 $5,907,022
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
Interest bearing transaction$303,994$2010.26% $195,167$830.17%
Savings and money market 2,941,919 3,7150.50% 2,560,727 2,1180.33%
Time deposits 786,782 1,8200.92% 764,761 1,4730.76%
Total interest bearing deposits 4,032,695 5,7360.57% 3,520,655 3,6740.41%
Customer repurchase agreements 95,283 520.22% 71,591 390.21%
Other short-term borrowings 1,090 51.79% 28,154 320.00%
Long-term borrowings 216,469 2,9785.38% 68,907 9905.62%
Total interest bearing liabilities 4,345,537 8,7710.80% 3,689,307 4,7350.51%
Noninterest bearing liabilities:
Noninterest bearing demand 1,763,821 1,431,627
Other liabilities 40,311 28,889
Total noninterest bearing liabilities 1,804,132 1,460,516
Shareholders’ equity 834,823 757,199
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$6,984,492 $5,907,022
Net interest income $67,024 $62,576
Net interest spread 3.67% 4.20%
Net interest margin 3.96% 4.38%
Cost of funds 0.51% 0.33%
(1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $4.4 million and $3.8 million for the three months ended December 31, 2016 and 2015, respectively.
(2) Interest and fees on loans and investments exclude tax equivalent adjustments.


Eagle Bancorp, Inc.
Consolidated Average Balances, Interest Yields and Rates (Unaudited)
(dollars in thousands)
Years Ended December 31,
2016 2015
Average BalanceInterestAverage
Yield/Rate
Average BalanceInterestAverage
Yield/Rate
ASSETS
Interest earning assets:
Interest bearing deposits with other banks and other short-term investments$339,947$1,6540.49% $308,848$7320.24%
Loans held for sale (1) 53,590 1,9033.55% 44,533 1,6713.75%
Loans (1) (2) 5,338,716 272,5855.11% 4,594,395 240,6695.24%
Investment securities available for sale (2) 468,773 9,6292.05% 445,986 10,0922.26%
Federal funds sold 7,950 340.43% 6,812 160.23%
Total interest earning assets 6,208,976 285,8054.60% 5,400,574 253,1804.69%
Total noninterest earning assets 283,687 278,804
Less: allowance for credit losses 55,889
48,811
Total noninterest earning assets 227,798 229,993
TOTAL ASSETS$6,436,774 $5,630,567
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
Interest bearing transaction$251,954$6460.26% $182,518$2910.16%
Savings and money market 2,728,347 12,0390.44% 2,425,286 8,1850.34%
Time deposits 769,801 6,5640.85% 774,943 5,8670.76%
Total interest bearing deposits 3,750,102 19,2490.51% 3,382,747 14,3430.42%
Customer repurchase agreements 77,833 1670.21% 59,141 1320.22%
Other short-term borrowings 29,376 7322.45% 27,659 860.31%
Long-term borrowings 133,023 7,4935.54% 81,310 4,6775.67%
Total interest bearing liabilities 3,990,334 27,6410.69% 3,550,857 19,2380.54%
Noninterest bearing liabilities:
Noninterest bearing demand 1,619,159 1,314,516
Other liabilities 30,881 26,726
Total noninterest bearing liabilities 1,650,040 1,341,242
Shareholders’ equity 796,400 738,468
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$6,436,774 $5,630,567
Net interest income $258,164 $233,942
Net interest spread 3.91% 4.15%
Net interest margin 4.16% 4.33%
Cost of funds 0.44% 0.36%
(1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $16.1 million and $12.6 million for the years ended December 31, 2016 and 2015, respectively.
(2) Interest and fees on loans and investments exclude tax equivalent adjustments.


Eagle Bancorp, Inc.
Statements of Income and Highlights Quarterly Trends (Unaudited)
(dollars in thousands, except per share data)
Three Months Ended
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Income Statements: 2016 2016 2016 2016 2015 2015 2015 2015
Total interest income$75,795 $72,431 $69,772 $67,807 $67,311 $63,981 $62,423 $59,465
Total interest expense 8,771 7,703 5,950 5,217 4,735 4,896 4,873 4,734
Net interest income 67,024 64,728 63,822 62,590 62,576 59,085 57,550 54,731
Provision for credit losses 2,112 2,288 3,888 3,043 4,595 3,262 3,471 3,310
Net interest income after provision for credit losses 64,912 62,440 59,934 59,547 57,981 55,823 54,079 51,421
Noninterest income (before investment gains & extinguishment of debt) 6,943 6,404 7,077 5,666 6,462 6,039 6,233 6,770
Gain on sale of investment securities 71 1 498 624 30 60 - 2,164
Loss on early extinguishment of debt - - - - - - - (1,130)
Total noninterest income 7,014 6,405 7,575 6,290 6,492 6,099 6,233 7,804
Salaries and employee benefits 17,853 17,130 15,908 16,119 15,977 15,383 14,683 15,706
Premises and equipment 4 3,786 3,807 3,826 3,970 3,974 4,072 4,010
Marketing and advertising 944 857 920 774 566 762 735 685
Merger expenses - - - - 2 2 26 111
Other expenses 7,284 7,065 7,660 7,383 8,125 7,284 7,082 7,561
Total noninterest expense 29,780
28,838 28,295 28,102 28,640 27,405 26,598 28,073
Income before income tax expense 42,146
40,007 39,214 37,735 35,833 34,517 33,714 31,152
Income tax expense 16,429 15,484 15,069 14,413 13,485 13,054 12,776 11,734
Net income 25,717 24,523 24,145 23,322 22,348 21,463 20,938 19,418
Preferred stock dividends - - - - 62 180 179 180
Net income available to common shareholders$25,717 $24,523 $24,145 $23,322 $22,286 $21,283 $20,759 $19,238
Per Share Data:
Earnings per weighted average common share, basic$0.76 $0.73 $0.72 $0.70 $0.67 $0.64 $0.62 $0.62
Earnings per weighted average common share, diluted$0.75 $0.72 $0.71 $0.68 $0.65 $0.63 $0.61 $0.61
Weighted average common shares outstanding, basic 33,650,963 33,590,183 33,588,141 33,518,998 33,462,937 33,400,973 33,367,476 31,082,715
Weighted average common shares outstanding, diluted 34,233,940 34,187,171 34,183,209 34,104,237 34,069,786 34,026,412 33,997,989 31,776,323
Actual shares outstanding 34,023,850 33,590,880 33,584,898 33,581,599 33,467,893 33,405,510 33,394,563 33,303,467
Book value per common share at period end$24.77 $24.28 $23.48 $22.71 $22.07 $21.38 $20.76 $20.11
Tangible book value per common share at period end (1)$21.61 $21.08 $20.27 $19.48 $18.83 $18.10 $17.46 $16.82
Performance Ratios (annualized):
Return on average assets 1.46% 1.50% 1.57% 1.54% 1.50% 1.47% 1.51% 1.49%
Return on average common equity 12.26% 12.04% 12.40% 12.39% 12.08% 11.95% 12.18% 13.24%
Net interest margin 3.96% 4.11% 4.30% 4.31% 4.38% 4.23% 4.33% 4.41%
Efficiency ratio (2) 40.22
% 40.54% 39.63% 40.80% 41.47% 42.04% 41.70% 44.89%
Other Ratios:
Allowance for credit losses to total loans (3) 1.04% 1.04% 1.05% 1.06% 1.05% 1.05% 1.07% 1.07%
Nonperforming loans to total loans (3) 0.31% 0.41% 0.40% 0.43% 0.26% 0.30% 0.33% 0.44%
Allowance for credit losses to total nonperforming loans 330.49% 255.29% 264.44% 249.03% 397.95% 347.82% 328.98% 244.12%
Nonperforming assets to total assets 0.30% 0.41% 0.39% 0.42% 0.31% 0.41% 0.44% 0.58%
Net charge-offs (annualized) to average loans (3) -0.01% 0.14% 0.15% 0.09% 0.18% 0.16% 0.21% 0.15%
Tier 1 capital (to average assets) 10.72% 11.12% 11.24% 11.01% 10.90% 11.96% 12.03% 12.19%
Total capital (to risk weighted assets) 14.89% 15.05% 12.71% 12.87% 12.75% 13.80% 13.75% 13.90%
Common equity tier 1 capital (to risk weighted assets) 10.80% 10.83% 10.74% 10.83% 10.68% 10.48% 10.37% 10.37%
Tangible common equity ratio (1) 10.84% 10.64% 10.88% 10.86% 10.56% 10.46% 10.34% 10.39%
Average Balances (in thousands):
Total assets$6,984,492 $6,492,274 $6,191,164 $6,072,533 $5,907,022 $5,775,283 $5,561,069 $5,270,301
Total earning assets$6,752,859 $6,264,531 $5,967,008 $5,844,915 $5,675,730 $5,545,398 $5,332,397 $5,039,748
Total loans$5,591,790 $5,422,677 $5,266,305 $5,070,386 $4,859,391 $4,636,298 $4,499,871 $4,376,248
Total deposits$5,796,516 $5,353,834 $5,178,501 $5,143,670 $4,952,282 $4,842,706 $4,655,234 $4,330,403
Total borrowings$312,842 $300,083 $207,221 $139,324 $168,652 $128,015 $127,582 $249,516
Total shareholders’ equity$834,823 $809,973 $783,318 $756,916 $757,199 $778,279 $755,541 $661,364
(1) Tangible common equity to tangible assets (the "tangible common equity ratio") and tangible book value per common share are non-GAAP financial measures derived from GAAP based amounts. The Company calculates the tangible common equity ratio by excluding the balance of intangible assets from common shareholders' equity and dividing by tangible assets. The Company calculates tangible book value per common share by dividing tangible common equity by common shares outstanding, as compared to book value per common share, which the Company calculates by dividing common shareholders' equity by common shares outstanding. The Company considers this information important to shareholders as tangible equity is a measure that is consistent with the calculation of capital for bank regulatory purposes, which excludes intangible assets from the calculation of risk based ratios and as such is useful for investors, regulators, management and others to evaluate capital adequacy and to compare against other financial institutions.
(2) Computed by dividing noninterest expense by the sum of net interest income and noninterest income.
(3) Excludes loans held for sale.

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

Source:Eagle Bancorp, Inc.