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

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



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

“We are very pleased to report a continued quarterly trend of balanced and consistently strong financial performance,” noted Ronald D. Paul, Chairman and Chief Executive Officer of Eagle Bancorp, Inc. “Our net income has increased for 34 consecutive quarters dating back to the first quarter of 2009. We are proud that this performance has been the result of a combination of balance sheet growth, revenue growth, solid asset quality, and improved operating leverage. We continued to benefit from growth in new loans even while anticipated loan maturities increased. Notwithstanding such payoffs, we are very pleased to report continued growth in earnings and earnings per share. Additionally, the new FHA Multifamily lending division is beginning to add revenue."

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

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

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

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

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

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

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

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

Management continues to remain attentive to any signs of deterioration in borrowers’ financial conditions and is proactive in taking the appropriate steps to mitigate risk. Furthermore, the Company is diligent in placing loans on nonaccrual status and believes, based on its loan portfolio risk analysis, that its allowance for credit losses, at 1.02% of total loans (excluding loans held for sale) at June 30, 2017, is adequate to absorb potential credit losses within the loan portfolio at that date. The allowance for credit losses was 1.05% at June 30, 2016 and 1.04% of total loans at December 31, 2016. The allowance at June 30, 2017 for credit losses represented 356% of nonperforming loans, as compared to 264% at June 30, 2016 and 330% at December 31, 2016.

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

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

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

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

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

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

Net interest income increased 9% for the three months ended June 30, 2017 over the same period in 2016 ($69.7 million versus $63.8 million), resulting from growth in average earning assets of 13%. The net interest margin was 4.16% for the three months ended June 30, 2017, as compared to 4.30% for the three months ended June 30, 2016. The Company believes its net interest margin remains favorable compared to peer banking companies and that its disciplined approach to managing the loan portfolio yield to 5.14% for the second quarter in 2017 has been a significant factor in its overall profitability.

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

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

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

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

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

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

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

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

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

The financial information which follows provides more detail on the Company’s financial performance for the three and six months ended June 30, 2017 as compared to the three and six months ended June 30, 2016 as well as providing eight quarters of trend data. Persons wishing additional information should refer to the Company’s Form 10-K for the year ended December 31, 2016 and other reports filed with the Securities and Exchange Commission (the “SEC”).

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

Conference Call: Eagle Bancorp will host a conference call to discuss its second quarter 2017 financial results on Thursday, July 20, 2017 at 10:00 a.m. eastern daylight time. The public is invited to listen to this conference call by dialing 1.877.303.6220, conference ID Code is 47807241, or by accessing the call on the Company’s website, www.EagleBankCorp.com. A replay of the conference call will be available on the Company’s website through August 3, 2017.

Forward-looking Statements: This press release contains forward-looking statements within the meaning of the Securities and Exchange Act of 1934, as amended, including statements of goals, intentions, and expectations as to future trends, plans, events or results of Company operations and policies and regarding general economic conditions. In some cases, forward-looking statements can be identified by use of words such as “may,” “will,” “anticipates,” “believes,” “expects,” “plans,” “estimates,” “potential,” “continue,” “should,” and similar words or phrases. These statements are based upon current and anticipated economic conditions, nationally and in the Company’s market, interest rates and interest rate policy, competitive factors, and other conditions which by their nature, are not susceptible to accurate forecast and are subject to significant uncertainty. Because of these uncertainties and the assumptions on which this discussion and the forward-looking statements are based, actual future operations and results in the future may differ materially from those indicated herein. For details on factors that could affect these expectations, see the risk factors and other cautionary language included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 and in other periodic and current reports filed with the SEC. Readers are cautioned against placing undue reliance on any such forward-looking statements. The Company’s past results are not necessarily indicative of future performance.

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

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

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

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

(3) Excludes loans held for sale.

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

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

Eagle Bancorp, Inc.
Consolidated Average Balances, Interest Yields And Rates (Unaudited)
(dollars in thousands)
Three Months Ended June 30,
2017 2016
Average BalanceInterestAverage Yield/Rate Average BalanceInterestAverage Yield/Rate
ASSETS
Interest earning assets:
Interest bearing deposits with other banks and other short-term investments$ 264,319$ 6100.93% $ 184,821$ 1960.43%
Loans held for sale (1) 38,165 3884.07% 47,111 4283.63%
Loans (1) (2) 5,895,174 75,5085.14% 5,266,305 66,7835.10%
Investment securities available for sale (2) 520,951 2,8272.18% 460,195 2,3562.06%
Federal funds sold 6,642 110.66% 8,576 90.42%
Total interest earning assets 6,725,251 79,3444.73% 5,967,008 69,7724.70%
Total noninterest earning assets 294,923 279,972
Less: allowance for credit losses 60,180 55,816
Total noninterest earning assets 234,743 224,156
TOTAL ASSETS$ 6,959,994 $ 6,191,164
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
Interest bearing transaction$ 360,574$ 3370.37% $ 243,836$ 1520.25%
Savings and money market 2,679,337 4,0970.61% 2,573,184 2,8280.44%
Time deposits 781,864 1,9691.01% 760,786 1,5500.82%
Total interest bearing deposits 3,821,775 6,4030.67% 3,577,806 4,5300.51%
Customer repurchase agreements 69,093 400.23% 71,767 390.22%
Other short-term borrowings 89,355 2240.99% 66,484 3442.05%
Long-term borrowings 216,676 2,9795.44% 68,970 1,0375.95%
Total interest bearing liabilities 4,196,899 9,6460.92% 3,785,027 5,9500.63%
Noninterest bearing liabilities:
Noninterest bearing demand 1,838,344 1,600,695
Other liabilities 34,253 22,124
Total noninterest bearing liabilities 1,872,597 1,622,819
Shareholders’ Equity 890,498 783,318
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$ 6,959,994 $ 6,191,164
Net interest income $ 69,698 $ 63,822
Net interest spread 3.81% 4.07%
Net interest margin 4.16% 4.30%
Cost of funds 0.57% 0.40%
(1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $4.3 million and $3.7 million
for the three months ended June 30, 2017 and 2016, respectively.
(2) Interest and fees on loans and investments exclude tax equivalent adjustments.

Eagle Bancorp, Inc.
Consolidated Average Balances, Interest Yields and Rates (Unaudited)
(dollars in thousands)
Six Months Ended June 30,
2017 2016
Average BalanceInterestAverage Yield/Rate Average BalanceInterestAverage Yield/Rate
ASSETS
Interest earning assets:
Interest bearing deposits with other banks and other short-term investments$ 266,984$ 1,0930.83% $ 210,476$ 4800.46%
Loans held for sale (1) 33,796 6703.96% 38,179 7013.67%
Loans (1) (2) 5,800,742 147,6975.13% 5,168,346 131,4325.11%
Investment securities available for sale (2) 523,566 5,6602.18% 479,191 4,9442.07%
Federal funds sold 6,023 180.60% 9,770 220.45%
Total interest earning assets 6,631,111 155,1384.72% 5,905,962 137,5794.68%
Total noninterest earning assets 295,232 280,752
Less: allowance for credit losses 59,746 54,866
Total noninterest earning assets 235,486 225,886
TOTAL ASSETS$ 6,866,597 $ 6,131,848
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
Interest bearing transaction$ 345,986$ 5750.34% $ 216,916$ 2520.23%
Savings and money market 2,684,900 7,9610.60% 2,664,106 5,3480.40%
Time deposits 759,942 3,6970.98% 753,618 3,0730.82%
Total interest bearing deposits 3,790,828 12,2330.65% 3,634,640 8,6730.48%
Customer repurchase agreements 69,359 780.23% 71,076 760.22%
Other short-term borrowings 60,808 2770.91% 33,242 3442.05%
Long-term borrowings 216,624 5,9585.47% 68,954 2,0745.95%
Total interest bearing liabilities 4,137,619 18,5460.90% 3,807,912 11,1670.59%
Noninterest bearing liabilities:
Noninterest bearing demand 1,816,724 1,526,446
Other liabilities 37,031 27,373
Total noninterest bearing liabilities 1,853,755 1,553,819
Shareholders’ equity 875,223 770,117
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$ 6,866,597 $ 6,131,848
Net interest income $ 136,592 $ 126,412
Net interest spread 3.82% 4.09%
Net interest margin 4.16% 4.30%
Cost of funds 0.56% 0.38%
(1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $8.2 million and $7.5 million
for the six months ended June 30, 2017 and 2016, respectively.
(2) Interest and fees on loans and investments exclude tax equivalent adjustments.

Eagle Bancorp, Inc.
Statements of Income and Highlights Quarterly Trends (Unaudited)
(dollars in thousands, except per share data)
Three Months Ended
June 30, March 31, December 31, September 30, June 30, March 31, December 31, September 30,
Income Statements: 2017 2017 2016 2016 2016 2016 2015 2015
Total interest income$ 79,344 $ 75,794 $ 75,795 $ 72,431 $ 69,772 $ 67,807 $ 67,311 $ 63,981
Total interest expense 9,646 8,900 8,771 7,703 5,950 5,217 4,735 4,896
Net interest income 69,698 66,894 67,024 64,728 63,822 62,590 62,576 59,085
Provision for credit losses 1,566 1,397 2,112 2,288 3,888 3,043 4,595 3,262
Net interest income after provision for credit losses 68,132 65,497 64,912 62,440 59,934 59,547 57,981 55,823
Noninterest income (before investment gains) 6,997 5,565 6,943 6,404 7,077 5,666 6,462 6,039
Gain on sale of investment securities 26 505 71 1 498 624 30 60
Total noninterest income 7,023 6,070 7,014 6,405 7,575 6,290 6,492 6,099
Salaries and employee benefits 16,869 16,677 17,853 17,130 15,908 16,119 15,977 15,383
Premises and equipment 3,920 3,847 3,699 3,786 3,807 3,826 3,970 3,974
Marketing and advertising 1,247 894 944 857 920 774 566 762
Merger expenses - - - - - - 2 2
Other expenses 7,965 7,814 7,284 7,065 7,660 7,383 8,125 7,284
Total noninterest expense 30,001 29,232 29,780 28,838 28,295 28,102 28,640 27,405
Income before income tax expense 45,154 42,335 42,146 40,007 39,214 37,735 35,833 34,517
Income tax expense 17,382 15,318 16,429 15,484 15,069 14,413 13,485 13,054
Net income 27,772 27,017 25,717 24,523 24,145 23,322 22,348 21,463
Preferred stock dividends - - - - - - 62 180
Net income available to common shareholders$ 27,772 $ 27,017 $ 25,717 $ 24,523 $ 24,145 $ 23,322 $ 22,286 $ 21,283
Per Share Data:
Earnings per weighted average common share, basic$ 0.81 $ 0.79 $ 0.76 $ 0.73 $ 0.72 $ 0.70 $ 0.67 $ 0.64
Earnings per weighted average common share, diluted $ 0.81 $ 0.79 $ 0.75 $ 0.72 $ 0.71 $ 0.68 $ 0.65 $ 0.63
Weighted average common shares outstanding, basic 34,128,598 34,069,528 33,650,963 33,590,183 33,588,141 33,518,998 33,462,937 33,400,973
Weighted average common shares outstanding, diluted 34,324,120 34,284,316 34,233,940 34,187,171 34,183,209 34,104,237 34,069,786 34,026,412
Actual shares outstanding at period end 34,169,924 34,110,056 34,023,850 33,590,880 33,584,898 33,581,599 33,467,893 33,405,510
Book value per common share at period end $ 26.42 $ 25.59 $ 24.77 $ 24.28 $ 23.48 $ 22.71 $ 22.07 $ 21.38
Tangible book value per common share at period end (1)$ 23.28 $ 22.45 $ 21.61 $ 21.08 $ 20.27 $ 19.48 $ 18.83 $ 18.10
Performance Ratios (annualized):
Return on average assets 1.60% 1.62% 1.46% 1.50% 1.57% 1.54% 1.50% 1.47%
Return on average common equity 12.51% 12.74% 12.26% 12.04% 12.40% 12.39% 12.08% 11.95%
Net interest margin 4.16% 4.14% 3.96% 4.11% 4.30% 4.31% 4.38% 4.23%
Efficiency ratio (2) 39.10% 40.06% 40.22% 40.54% 39.63% 40.80% 41.47% 42.04%
Other Ratios:
Allowance for credit losses to total loans (3) 1.02% 1.03% 1.04% 1.04% 1.05% 1.06% 1.05% 1.05%
Allowance for credit losses to total nonperforming loans 356.00% 416.91% 330.49% 255.29% 264.44% 249.03% 397.95% 347.82%
Nonperforming loans to total loans (3) 0.29% 0.25% 0.31% 0.41% 0.40% 0.43% 0.26% 0.30%
Nonperforming assets to total assets 0.26% 0.22% 0.30% 0.41% 0.39% 0.42% 0.31% 0.41%
Net charge-offs (annualized) to average loans (3) 0.02% 0.04% -0.01% 0.14% 0.15% 0.09% 0.18% 0.16%
Tier 1 capital (to average assets) 11.61% 11.51% 10.72% 11.12% 11.24% 11.01% 10.90% 11.96%
Total capital (to risk weighted assets) 15.13% 14.97% 14.89% 15.05% 12.71% 12.87% 12.75% 13.80%
Common equity tier 1 capital (to risk weighted assets) 11.18% 10.97% 10.80% 10.83% 10.74% 10.83% 10.68% 10.48%
Tangible common equity ratio (1) 11.15% 10.97% 10.84% 10.64% 10.88% 10.86% 10.56% 10.46%
Average Balances (in thousands):
Total assets$ 6,959,994 $6,772,164 $ 6,984,492 $ 6,492,274 $ 6,191,164 $ 6,072,533 $ 5,907,022 $ 5,775,283
Total earning assets$ 6,725,251 $ 6,535,926 $ 6,752,859 $ 6,264,531 $ 5,967,008 $ 5,844,915 $ 5,675,730 $ 5,545,398
Total loans$ 5,895,174 $ 5,705,261 $ 5,591,790 $ 5,422,677 $ 5,266,305 $ 5,070,386 $ 4,859,391 $ 4,636,298
Total deposits$ 5,660,119 $ 5,554,402 $ 5,796,516 $ 5,353,834 $ 5,178,501 $ 5,143,670 $ 4,952,282 $ 4,842,706
Total borrowings$ 375,124 $ 318,143 $ 312,842 $ 300,083 $ 207,221 $ 139,324 $ 168,652 $ 128,015
Total shareholders’ equity$ 890,498 $ 859,779 $ 834,823 $ 809,973 $ 783,318 $ 756,916 $ 757,199 $ 778,279
(1) Tangible common equity to tangible assets (the "tangible common equity ratio") and tangible book value per common share are non-GAAP financial measures derived from GAAP based amounts. The Company calculates the tangible common equity ratio by excluding the balance of intangible assets from common shareholders' equity and dividing by tangible assets. The Company calculates tangible book value per common share by dividing tangible common equity by common shares outstanding, as compared to book value per common share, which the Company calculates by dividing common shareholders' equity by common shares outstanding. The Company considers this information important to shareholders as tangible equity is a measure that is consistent with the calculation of capital for bank regulatory purposes, which excludes intangible assets from the calculation of risk based ratios and as such is useful for investors, regulators, management and others to evaluate capital adequacy and to compare against other financial institutions.
(2) Computed by dividing noninterest expense by the sum of net interest income and noninterest income.
(3) Excludes loans held for sale.

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

Source:Eagle Bancorp, Inc.