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Eagle Bancorp, Inc. Announces Another Quarter of Record Earnings With Second Quarter 2018 Net Income up 34% Over 2017

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BETHESDA, Md., July 18, 2018 (GLOBE NEWSWIRE) -- Eagle Bancorp, Inc. (the "Company") (NASDAQ:EGBN), the parent company of EagleBank, today announced record quarterly net income of $37.3 million for the three months ended June 30, 2018, a 34% increase over the $27.8 million net income for the three months ended June 30, 2017. Net income per basic common share for the three months ended June 30, 2018 was $1.09 compared to $0.81 for the same period in 2017, a 35% increase. Net income per diluted common share for the three months ended June 30, 2018 was $1.08 compared to $0.81 for the same period in 2017, a 33% increase. 

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For the six months ended June 30, 2018, the Company's net income was $73.0 million, a 33% increase over the $54.8 million of net income for the same period in 2017. Net income per basic common share for the six months ended June 30, 2018 was $2.13 compared to $1.61 for the same period in 2017, a 32% increase. Net income per diluted common share for the six months ended June 30, 2018 was $2.12 compared to $1.60 for the same period in 2017, a 32% increase.

"We are very pleased to report another quarter of favorable earnings, which continued to exhibit positive trends of balance sheet growth, revenue growth, solid asset quality and favorable operating leverage," noted Ronald D. Paul, Chairman and Chief Executive Officer of Eagle Bancorp, Inc. Mr. Paul continued, "The Company's assets ended the quarter at $7.88 billion, representing 9% growth over the second quarter of 2017 and total shareholders' equity exceeded $1.00 billion for the first time.  Second quarter 2018 earnings resulted in a return on average assets of 1.92%, return on average common equity ("ROACE") of 14.93% and a return on average tangible common equity ("ROATCE") of 16.71%." Mr. Paul added "Our financial results in the second quarter continue to exhibit balanced and consistent performance."

While the lower effective tax rate of 25.1% for the second quarter of 2018 resulting from the Tax Act signed in December 2017 contributed to higher net earnings, on a pre-tax basis, second quarter earnings in 2018 increased 10% over the second quarter in 2017 and increased 4% over the first quarter of 2018. 

The Company's performance in the second quarter of 2018 as compared to the second quarter of 2017 was highlighted by 11% growth in both average total loans and average total deposits, by a relatively stable net interest margin of 4.15% as compared to 4.16% and by 9% growth in total revenue to $83.8 million. Mr. Paul noted that the Company continues to focus more on growth of average balances year over year and quarter over quarter since that measure relates more directly to income statement results. Comparing average balances in the second quarter of 2018 versus the first quarter of 2018, average loan growth was 2% and average deposit growth was 3%.

Mr. Paul added, "In the second quarter of 2018, period end total loans growth was a modest 1% over March 31, 2018, while total deposits increased 2% over March 31, 2018. New loans settled in the second quarter of 2018 were similar to the first quarter of 2018, which had a 3% growth rate, however, substantial loan payoffs and delays in new loan fundings occurred in the second quarter which restrained net loan growth. The total of unfunded loan commitments remains stable over the last six quarters at approximately $2.4 billion. The Company continues to emphasize strategies focusing on achieving core deposit growth. Significantly, the mix of noninterest deposits to total deposits averaged 33% in the second quarter of 2018 as compared to 32% in the second quarter of 2017. Since spread earnings are the key element of our revenue, we remain focused on our net interest margin, which has been stable as market rates and related deposit rates have continued to increase."  

The net interest margin was 4.15% for the second quarter of 2018, down one basis point from the second quarter of 2017 and down two basis points from the first quarter of 2018. Mr. Paul noted, "While we are seeing a higher cost of funds, we are also experiencing higher loan yields, in part due to rate adjustments in our predominately variable and adjustable rate loan portfolio." The Company's net interest income increased 12% in the second quarter of 2018 over 2017 as the Company has continued its emphasis on disciplined pricing for both new loans and funding sources. The Company believes that it has a superior net interest margin compared to peers, but it is also focused on all factors that contribute to Earnings Per Share ("EPS") growth.

For the first six months of 2018, total loans grew 4% over December 31, 2017, and averaged 12% higher for the first six months of 2018 as compared to the first six months of 2017. At June 30, 2018, total deposits were 7% higher than deposits at December 31, 2017, and averaged 10% higher for the first six months of 2018 compared with the first six months of 2017.

Total revenue (net interest income plus noninterest income) for the second quarter of 2018 was $83.8 million, or 9% above the $76.7 million of total revenue earned for the second quarter of 2017 and was 3% higher than the $81.1 million of revenue earned in the first quarter of 2018. For the six month periods ended June 30, total revenue was $164.9 million for 2018, as compared to $149.7 million in 2017, a 10% increase.  

The primary driver of the Company's revenue growth for the second quarter of 2018 as compared to the second quarter of 2017 was its net interest income growth of 12% ($78.2 million versus $69.7 million). Noninterest income (excluding investment gains) declined by 21% in the second quarter 2018 over 2017 ($5.5 million versus $7.0 million), due substantially to lesser sales of Small Business Administration ("SBA") and residential mortgage loans and the resulting gains on the sale of these loans, and by lower revenue associated with the origination, securitization, servicing and sale of FHA Multifamily-Backed Government National Mortgage Association ("GNMA") securities. Mr. Paul added that "while these business lines do exhibit variations in revenue from quarter to quarter all three business units above are important to our long term continued success."  

Asset quality measures remained solid at June 30, 2018. Net charge-offs (annualized) were 0.05% of average loans for the second quarter of 2018, as compared to 0.02% of average loans for the second quarter of 2017. At June 30, 2018, the Company's nonperforming loans amounted to $10.9 million (0.16% of total loans) as compared to $17.1 million (0.29% of total loans) at June 30, 2017 and $13.2 million (0.21% of total loans) at December 31, 2017. Nonperforming assets amounted to $12.3 million (0.16% of total assets) at June 30, 2018 compared to $18.5 million (0.26% of total assets) at June 30, 2017 and $14.6 million (0.20% of total assets) at December 31, 2017.

Management continues to remain attentive to any signs of deterioration in borrowers' financial conditions and is proactive in taking the appropriate steps to mitigate risk. Furthermore, the Company is diligent in placing loans on nonaccrual status and believes, based on its loan portfolio risk analysis, that its allowance for credit losses, at 1.00% of total loans (excluding loans held for sale) at June 30, 2018, is adequate to absorb potential credit losses within the loan portfolio at that date. The allowance for credit losses was 1.02% at June 30, 2017 and 1.01% of total loans at December 31, 2017. The allowance at June 30, 2018 for credit losses represented 612% of nonperforming loans, as compared to 356% at June 30, 2017 and 489% at December 31, 2017.

"The Company's productivity continued to be very favorable in the second quarter," noted Mr. Paul. The efficiency ratio of 38.55% 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 1.66% in the second quarter of 2018 as compared to 1.72% in the second quarter of 2017. A 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. The Company continues to make investments in its infrastructure including IT systems and resources and 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, manage risk, and proactively enhance our risk management systems as we continue to grow."

Total assets at June 30, 2018 were $7.88 billion, a 9% increase as compared to $7.24 billion at June 30, 2017, and a 5% increase as compared to $7.48 billion at December 31, 2017. Total loans (excluding loans held for sale) were $6.65 billion at June 30, 2018, an 11% increase as compared to $5.99 billion at June 30, 2017, and a 4% increase as compared to $6.41 billion at December 31, 2017. Loans held for sale amounted to $30.5 million at June 30, 2018 as compared to $49.3 million at June 30, 2017, a 38% decrease, and $25.1 million at December 31, 2017, a 22% increase. The investment portfolio totaled $656.9 million at June 30, 2018, a 32% increase from the $497.7 million balance at June 30, 2017. As compared to December 31, 2017, the investment portfolio at June 30, 2018 increased by $67.6 million or 12%.

Total deposits at June 30, 2018 were $6.27 billion, compared to deposits of $5.87 billion at June 30, 2017, a 7% increase, and deposits of $5.85 billion at December 31, 2017, a 7% increase. Total borrowed funds (excluding customer repurchase agreements) were $517.1 million at June 30, 2018, $361.7 million at June 30, 2017 and $541.9 million at December 31, 2017. 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, 2018 increased 13%, to $1.02 billion, compared to $902.7 million at June 30, 2017, and increased 8%, from $950.4 million at December 31, 2017. The Company's capital position remains substantially in excess of regulatory requirements for well capitalized status, with a total risk based capital ratio of 15.59% at June 30, 2018, as compared to 15.13% at June 30, 2017, and 15.02% at December 31, 2017. In addition, the tangible common equity ratio was 11.79% at June 30, 2018, compared to 11.15% at June 30, 2017 and 11.44% at December 31, 2017.

Analysis of the three months ended June 30, 2018 compared to June 30, 2017

For the three months ended June 30, 2018, the Company reported an annualized ROAA of 1.92% as compared to 1.60% for the three months ended June 30, 2017. The annualized ROACE for the three months ended June 30, 2018 was 14.93% as compared to 12.51% for the three months ended June 30, 2017. The annualized ROATCE for the three months ended June 30, 2018 was 16.71% as compared to 14.22% for the three months ended June 30, 2017.

Net interest income increased 12% for the three months ended June 30, 2018 over the same period in 2017 ($78.2 million versus $69.7 million), resulting from growth in average earning assets of 12%. The net interest margin was 4.15% for the three months ended June 30, 2018, as compared to 4.16% for the three months ended June 30, 2017. The Company believes its current net interest margin remains favorable compared to peer banking companies and that its disciplined approach to managing the loan portfolio yield to 5.53% for the second quarter of 2018 (as compared to 5.14% for the same period in 2017) has been a significant factor in its overall profitability.

The provision for credit losses was $1.7 million for the three months ended June 30, 2018 as compared to $1.6 million for the three months ended June 30, 2017. Net charge-offs of $848 thousand in the second quarter of 2018 represented an annualized 0.05% of average loans, excluding loans held for sale, as compared to $367 thousand, or an annualized 0.02% of average loans, excluding loans held for sale, in the second quarter of 2017. Net charge-offs in the second quarter of 2018 were attributable primarily to commercial real estate loans ($479 thousand) and commercial loans ($385 thousand).

Noninterest income for the three months ended June 30, 2018 decreased to $5.6 million from $7.0 million for the three months ended June 30, 2017, a 21% decrease, due substantially to lower gains on the sale of residential mortgage loans ($1.7 million versus $2.5 million) resulting from lower volume as compared to 2017, and minimal revenue associated with the origination, securitization, servicing, and sale of FHA Multifamily-Backed GNMA securities as compared to $752 thousand during the second quarter of 2017. Residential mortgage loans closed were $126 million for the second quarter of 2018 versus $188 million for the second quarter of 2017.

The efficiency ratio, which measures the ratio of noninterest expense to total revenue, was 38.55% for the second quarter of 2018, as compared to 39.10% for the second quarter of 2017. Noninterest expenses totaled $32.3 million for the three months ended June 30, 2018, as compared to $30.0 million for the three months ended June 30, 2017, an 8% increase. Cost increases for salaries and benefits were $943 thousand, due primarily to merit increases and benefit costs. Data processing expense increased by $407 thousand due primarily to the costs of software and infrastructure investments. Legal, accounting and professional fees increased $882 thousand due to due diligence from independent consultants associated with the internet event late in 2017 and efforts to enhance our risk management systems.

Analysis of the six months ended June 30, 2018 compared to June 30, 2017

For the six months ended June 30, 2018, the Company reported an annualized ROAA of 1.91% as compared to 1.61% for the six months ended June 30, 2017. The annualized ROACE for the six months ended June 30, 2018 was 14.96% as compared to 12.62% for the six months ended June 30, 2017. The annualized ROATCE for the six months ended June 30, 2018 was 16.78% as compared to 14.38% for the six months ended June 30, 2017.

Net interest income increased 13% for the six months ended June 30, 2018 over the same period in 2017 ($154.0 million versus $136.6 million), resulting from growth in average earning assets of 13%. The net interest margin was 4.16% for both the six months ended June 30, 2018 and 2017. The Company believes its current net interest margin remains favorable compared to peer banking companies and that its disciplined approach to managing the loan portfolio yield to 5.42% for the first six months of 2018 (as compared to 5.15% for the same period in 2017) has been a significant factor in its overall profitability.

The provision for credit losses was $3.6 million for the six months ended June 30, 2018 as compared to $3.0 million for the six months ended June 30, 2017. The higher provisioning for the six months ended June 30, 2018, as compared to the same period in 2017, is due primarily to higher net charge-offs. Net charge-offs of $1.8 million for the six months ended June 30, 2018 represented an annualized 0.05% of average loans, excluding loans held for sale, as compared to $989 thousand, or an annualized 0.03% of average loans, excluding loans held for sale, in the first six months of 2017. Net charge-offs in the first six months of 2018 were attributable primarily to commercial loans ($1.4 million) and commercial real estate loans ($540 thousand) offset by a net recovery in consumer loans ($135 thousand).

Noninterest income for the six months ended June 30, 2018 decreased to $10.9 million from $13.1 million for the six months ended June 30, 2017, a 17% decrease, due substantially to lower gains on the sale of residential mortgage loans ($2.9 million versus $4.3 million) resulting from lower volume as compared to 2017, and minimal revenue associated with the origination, securitization, servicing, and sale of FHA Multifamily-Backed GNMA securities for the six months ended June 30, 2018 versus $752 thousand for the same period in 2017. Residential mortgage loans closed were $226 million for the six months ended June 30, 2018 versus $338 million for the same period in 2017.

Noninterest expenses totaled $63.4 million for the six months ended June 30, 2018, as compared to $59.2 million for the six months ended June 30, 2017, a 7% increase. Cost increases for salaries and benefits for the six months ended June 30, 2018 were $1.1 million, due primarily to merit increases and benefit costs. Data processing expense increased by $683 thousand due primarily to the costs of software and infrastructure investments. Legal, accounting and professional fees increased $2.9 million due to due diligence from independent consultants associated with the internet event late in 2017 and efforts to enhance our risk management systems. Other expenses decreased $1.1 million, due primarily to a net loss on the sale of OREO in the first quarter of 2017 ($361 thousand) and lower costs to maintain OREO properties ($276 thousand). For the first six months of 2018, the efficiency ratio was 38.47% as compared to 39.57% for the same period in 2017.

The financial information which follows provides more detail on the Company's financial performance for the three and six months ended June 30, 2018 as compared to the three and six months ended June 30, 2017 as well as providing eight quarters of trend data. Persons wishing additional information should refer to the Company's Form 10-K for the year ended December 31, 2017 and other reports filed with the Securities and Exchange Commission (the "SEC").

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

Conference Call: Eagle Bancorp will host a conference call to discuss its second quarter 2018 financial results on Thursday, July 19, 2018 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 5875946, 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 2, 2018.

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, 2017 and in other periodic and current reports filed with the SEC. Readers are cautioned against placing undue reliance on any such forward-looking statements. The Company's past results are not necessarily indicative of future performance.

Eagle Bancorp, Inc.              
Consolidated Financial Highlights (Unaudited)              
(dollars in thousands, except per share data)      
  Three Months Ended June 30,   Six Months Ended June 30,
    2018       2017       2018       2017  
Income Statements:              
Total interest income $ 96,296     $ 79,344     $ 185,345     $ 155,138  
Total interest expense   18,086       9,646       31,355       18,546  
Net interest income   78,210       69,698       153,990       136,592  
Provision for credit losses   1,650       1,566       3,619       2,963  
Net interest income after provision for credit losses   76,560       68,132       150,371       133,629  
Noninterest income (before investment gains)   5,526       6,997       10,788       12,562  
Gain on sale of investment securities   26       26       68       531  
Total noninterest income   5,552       7,023       10,856       13,093  
Total noninterest expense   32,289       30,001       63,410       59,233  
Income before income tax expense   49,823       45,154       97,817       87,489  
Income tax expense   12,528       17,382       24,807       32,700  
Net income $ 37,295     $ 27,772     $ 73,010     $ 54,789  
               
Per Share Data:              
Earnings per weighted average common share, basic $ 1.09     $ 0.81     $ 2.13     $ 1.61  
Earnings per weighted average common share, diluted $ 1.08     $ 0.81     $ 2.12     $ 1.60  
Weighted average common shares outstanding, basic   34,305,693       34,128,598       34,283,412       34,099,228  
Weighted average common shares outstanding, diluted   34,448,354       34,324,120       34,427,613       34,304,285  
Actual shares outstanding at period end   34,305,071       34,169,924       34,305,071       34,169,924  
Book value per common share at period end $ 29.82     $ 26.42     $ 29.82     $ 26.42  
Tangible book value per common share at period end (1) $ 26.71     $ 23.28     $ 26.71     $ 23.28  
               
Performance Ratios (annualized):              
Return on average assets   1.92%       1.60%       1.91%       1.61%  
Return on average common equity   14.93%       12.51%       14.96%       12.62%  
Return on average tangible common equity   16.71%       14.22%       16.78%       14.38%  
Net interest margin   4.15%       4.16%       4.16%       4.16%  
Efficiency ratio (2)   38.55%       39.10%       38.47%       39.57%  
               
Other Ratios:              
Allowance for credit losses to total loans (3)   1.00%       1.02%       1.00%       1.02%  
Allowance for credit losses to total nonperforming loans   612.42%       356.00%       612.42%       356.00%  
Nonperforming loans to total loans (3)   0.16%       0.29%       0.16%       0.29%  
Nonperforming assets to total assets   0.16%       0.26%       0.16%       0.26%  
Net charge-offs (annualized) to average loans (3)   0.05%       0.02%       0.05%       0.03%  
Common equity to total assets   12.98%       12.46%       12.98%       12.46%  
Tier 1 capital (to average assets)   11.97%       11.61%       11.97%       11.61%  
Total capital (to risk weighted assets)   15.59%       15.13%       15.59%       15.13%  
Common equity tier 1 capital (to risk weighted assets)   11.89%       11.18%       11.89%       11.18%  
Tangible common equity ratio (1)   11.79%       11.15%       11.79%       11.15%  
               
Loan Balances - Period End (in thousands):              
Commercial and Industrial $ 1,467,088     $ 1,319,736     $ 1,467,088     $ 1,319,736  
Commercial real estate - owner occupied $ 852,697     $ 660,066     $ 852,697     $ 660,066  
Commercial real estate - income producing $ 3,000,385     $ 2,596,230     $ 3,000,385     $ 2,596,230  
1-4 Family mortgage $ 103,415     $ 151,115     $ 103,415     $ 151,115  
Construction - commercial and residential $ 1,087,287     $ 1,034,902     $ 1,087,287     $ 1,034,902  
Construction - C&I (owner occupied) $ 48,480     $ 116,577     $ 48,480     $ 116,577  
Home equity $ 89,539     $ 103,671     $ 89,539     $ 103,671  
Other consumer $ 2,811     $ 2,734     $ 2,811     $ 2,734  
               
Average Balances (in thousands):              
Total assets $ 7,789,564     $ 6,959,994     $ 7,694,055     $ 6,866,597  
Total earning assets $ 7,558,138     $ 6,728,055     $ 7,466,348     $ 6,633,740  
Total loans $ 6,569,931     $ 5,895,174     $ 6,502,207     $ 5,800,742  
Total deposits $ 6,269,126     $ 5,660,119     $ 6,166,640     $ 5,607,552  
Total borrowings $ 485,729     $ 375,124     $ 504,444     $ 346,791  
Total shareholders' equity $ 1,002,091     $ 890,498     $ 984,436     $ 875,223  

(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 calculates return on average tangible common equity by dividing annualized year to date net income by tangible common equity. 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)                  
  Three Months Ended   Six Months Ended   Twelve Months Ended   Three Months Ended   Six Months Ended
  June 30, 2018   June 30, 2018   December 31, 2017   June 30, 2017   June 30, 2017
Common shareholders' equity     $ 1,023,137     $ 950,438         $ 902,675  
Less: Intangible assets       (106,820 )     (107,212 )         (107,061 )
Tangible common equity     $ 916,317     $ 843,226         $ 795,614  
                   
Book value per common share     $ 29.82     $ 27.80         $ 26.42  
Less: Intangible book value per common share       (3.11 )     (3.13 )         (3.14 )
Tangible book value per common share     $ 26.71     $ 24.67         $ 23.28  
                   
Total assets     $ 7,880,017     $ 7,479,029         $ 7,244,527  
Less: Intangible assets       (106,820 )     (107,212 )         (107,061 )
Tangible assets     $ 7,773,197     $ 7,371,817         $ 7,137,466  
Tangible common equity ratio       11.79%       11.44%           11.15%  
                   
Average common shareholders' equity $ 1,002,091     $ 984,436     $ 906,174     $ 890,501     $ 875,225  
Less: Average intangible assets   (106,955 )     (107,112 )     (107,117 )     (107,050 )     (107,153 )
Average tangible common equity $ 895,136     $ 877,324     $ 799,057     $ 783,450     $ 768,072  
                   
Net Income Available to Common Shareholders $ 37,295     $ 73,010     $ 100,232     $ 27,772     $ 54,789  
Average tangible common equity $ 895,136     $ 877,324     $ 799,057     $ 783,450     $ 768,072  
Annualized Return on Average Tangible Common Equity   16.71%       16.78%       12.54%       14.22%       14.38%  

(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)          
           
Assets June 30, 2018   December 31, 2017   June 30, 2017
Cash and due from banks $ 6,873     $ 7,445     $ 8,017  
Federal funds sold   9,251       15,767       7,417  
Interest bearing deposits with banks and other short-term investments   249,667       167,261       432,267  
Investment securities available for sale, at fair value   656,942       589,268       497,672  
Federal Reserve and Federal Home Loan Bank stock   35,875       36,324       28,603  
Loans held for sale   30,493       25,096       49,327  
Loans   6,651,704       6,411,528       5,985,031  
Less allowance for credit losses   (66,609 )     (64,758 )     (61,047 )
Loans, net   6,585,095       6,346,770       5,923,984  
Premises and equipment, net   19,055       20,991       20,153  
Deferred income taxes   30,562       28,770       46,294  
Bank owned life insurance   62,647       60,947       60,869  
Intangible assets, net   106,820       107,212       107,061  
Other real estate owned   1,394       1,394       1,394  
Other assets   85,343       71,784       61,469  
Total Assets $ 7,880,017     $ 7,479,029     $ 7,244,527  
           
Liabilities and Shareholders' Equity          
Deposits:          
Noninterest bearing demand $ 2,022,916     $ 1,982,912     $ 1,851,437  
Interest bearing transaction   435,484       420,417       405,210  
Savings and money market   2,658,768       2,621,146       2,730,981  
Time, $100,000 or more   675,528       515,682       490,105  
Other time   476,062       313,827       389,964  
Total deposits   6,268,758       5,853,984       5,867,697  
Customer repurchase agreements   29,135       76,561       74,362  
Other short-term borrowings   300,000       325,000       145,000  
Long-term borrowings   217,100       216,905       216,710  
Other liabilities   41,887       56,141       38,083  
Total liabilities   6,856,880       6,528,591       6,341,852  
           
Shareholders' Equity          
Common stock, par value $.01 per share; shares authorized 100,000,000, shares          
issued and outstanding 34,305,071, 34,185,163, and 34,169,924, respectively   341       340       340  
Additional paid in capital   524,176       520,304       517,356  
Retained earnings   505,229       431,544       386,100  
Accumulated other comprehensive loss   (6,609 )     (1,750 )     (1,121 )
Total Shareholders' Equity   1,023,137       950,438       902,675  
Total Liabilities and Shareholders' Equity $ 7,880,017     $ 7,479,029     $ 7,244,527  
           


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   2018     2017     2018     2017
Interest and fees on loans $ 90,924   $ 75,896   $ 175,354   $ 148,367
Interest and dividends on investment securities   4,058     2,827     7,650     5,660
Interest on balances with other banks and short-term investments   1,274     610     2,255     1,093
Interest on federal funds sold   40     11     86     18
Total interest income   96,296     79,344     185,345     155,138
Interest Expense              
Interest on deposits   14,048     6,403     23,177     12,233
Interest on customer repurchase agreements   62     40     112     78
Interest on other short-term borrowings   997     224     2,108     277
Interest on long-term borrowings   2,979     2,979     5,958     5,958
Total interest expense   18,086     9,646     31,355     18,546
Net Interest Income   78,210     69,698     153,990     136,592
Provision for Credit Losses   1,650     1,566     3,619     2,963
Net Interest Income After Provision For Credit Losses   76,560     68,132     150,371     133,629
               
Noninterest Income              
Service charges on deposits   1,760     1,543     3,374     3,015
Gain on sale of loans   1,675     2,519     3,198     4,567
Gain on sale of investment securities   26     26     68     531
Increase in the cash surrender value of  bank owned life insurance   356     372     700     739
Other income   1,735     2,563     3,516     4,241
Total noninterest income   5,552     7,023     10,856     13,093
Noninterest Expense              
Salaries and employee benefits   17,812     16,869     34,670     33,546
Premises and equipment expenses   3,873     3,920     7,802     7,767
Marketing and advertising   1,291     1,247     2,228     2,141
Data processing   2,404     1,997     4,721     4,038
Legal, accounting and professional fees   2,179     1,297     5,152     2,299
FDIC insurance   951     590     1,626     1,134
Other expenses   3,779     4,081     7,211     8,308
Total noninterest expense   32,289     30,001     63,410     59,233
Income Before Income Tax Expense   49,823     45,154     97,817     87,489
Income Tax Expense   12,528     17,382     24,807     32,700
Net Income $ 37,295   $ 27,772   $ 73,010   $ 54,789
               
Earnings Per Common Share              
Basic $ 1.09   $ 0.81   $ 2.13   $ 1.61
Diluted $ 1.08   $ 0.81   $ 2.12   $ 1.60


Eagle Bancorp, Inc.
Consolidated Average Balances, Interest Yields And Rates (Unaudited)
(dollars in thousands)
               
  Three Months Ended June 30,
    2018       2017  
  Average Balance Interest Average
Yield/Rate
  Average Balance Interest Average
Yield/Rate
ASSETS              
Interest earning assets:              
Interest bearing deposits with other banks and other short-term investments $ 302,991 $ 1,274 1.69 %   $ 267,123 $ 610 0.92 %
Loans held for sale (1)   25,621   291 4.54 %     38,165   388 4.07 %
Loans (1) (2)   6,569,931   90,633 5.53 %     5,895,174   75,508 5.14 %
Investment securities available for sale (2)   643,409   4,058 2.53 %     520,951   2,827 2.18 %
Federal funds sold   16,186   40 0.99 %     6,642   11 0.66 %
Total interest earning assets   7,558,138   96,296 5.11 %     6,728,055   79,344 4.73 %
               
Total noninterest earning assets   297,601         292,119    
Less: allowance for credit losses   66,175         60,180    
Total noninterest earning assets   231,426         231,939    
TOTAL ASSETS $ 7,789,564       $ 6,959,994    
               
LIABILITIES AND SHAREHOLDERS' EQUITY              
Interest bearing liabilities:              
Interest bearing transaction $ 444,842 $ 815 0.73 %   $ 360,574 $ 337 0.37 %
Savings and money market   2,647,910   8,546 1.29 %     2,679,337   4,097 0.61 %
Time deposits   1,123,330   4,687 1.67 %     781,864   1,969 1.01 %
Total interest bearing deposits   4,216,082   14,048 1.34 %     3,821,775   6,403 0.67 %
Customer repurchase agreements   38,438   62 0.65 %     69,093   40 0.23 %
Other short-term borrowings   230,223   997 1.71 %     89,355   224 0.99 %
Long-term borrowings   217,068   2,979 5.43 %     216,676   2,979 5.44 %
Total interest bearing liabilities   4,701,811   18,086 1.54 %     4,196,899   9,646 0.92 %
               
Noninterest bearing liabilities:              
Noninterest bearing demand   2,053,044         1,838,344    
Other liabilities   32,618         34,253    
Total noninterest bearing liabilities   2,085,662         1,872,597    
               
Shareholders' Equity   1,002,091         890,498    
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 7,789,564       $ 6,959,994    
               
Net interest income   $ 78,210       $ 69,698  
Net interest spread     3.57 %       3.81 %
Net interest margin     4.15 %       4.16 %
Cost of funds     0.96 %       0.57 %
               
(1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $5.2 million and $4.3 million for the three months ended June 30, 2018 and 2017, respectively.
(2) Interest and fees on loans and investments exclude tax equivalent adjustments.
               


Eagle Bancorp, Inc.
Consolidated Average Balances, Interest Yields and Rates (Unaudited)
(dollars in thousands)
               
  Six Months Ended June 30,
    2018       2017  
  Average Balance Interest Average
Yield/Rate
  Average Balance Interest Average
Yield/Rate
ASSETS              
Interest earning assets:              
Interest bearing deposits with other banks and other short-term investments $ 292,772 $ 2,255 1.55 %   $ 269,613 $ 1,093 0.82 %
Loans held for sale (1)   25,293   565 4.47 %     33,796   670 3.96 %
Loans (1) (2)   6,502,207   174,789 5.42 %     5,800,742   147,697 5.15 %
Investment securities available for sale (1)   628,818   7,650 2.45 %     523,566   5,660 2.19 %
Federal funds sold   17,258   86 1.00 %     6,023   18 0.60 %
Total interest earning assets   7,466,348   185,345 5.01 %     6,633,740   155,138 4.73 %
               
Total noninterest earning assets   293,488         292,603    
Less: allowance for credit losses   65,781         59,746    
Total noninterest earning assets   227,707         232,857    
TOTAL ASSETS $ 7,694,055       $ 6,866,597    
               
LIABILITIES AND SHAREHOLDERS' EQUITY              
Interest bearing liabilities:              
Interest bearing transaction $ 409,066 $ 1,279 0.63 %   $ 345,986 $ 575 0.34 %
Savings and money market   2,708,480   14,210 1.06 %     2,684,900   7,961 0.60 %
Time deposits   1,006,356   7,688 1.54 %     759,942   3,697 0.98 %
Total interest bearing deposits   4,123,902   23,177 1.13 %     3,790,828   12,233 0.65 %
Customer repurchase agreements   53,158   112 0.42 %     69,359   78 0.23 %
Other short-term borrowings   234,267   2,108 1.79 %     60,808   277 0.91 %
Long-term borrowings   217,019   5,958 5.46 %     216,624   5,958 5.47 %
Total interest bearing liabilities   4,628,346   31,355 1.37 %     4,137,619   18,546 0.91 %
               
Noninterest bearing liabilities:              
Noninterest bearing demand   2,042,738         1,816,724    
Other liabilities   38,535         37,031    
Total noninterest bearing liabilities   2,081,273         1,853,755    
               
Shareholders' equity   984,436         875,223    
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 7,694,055       $ 6,866,597    
               
Net interest income   $ 153,990       $ 136,592  
Net interest spread     3.64 %       3.82 %
Net interest margin     4.16 %       4.16 %
Cost of funds     0.85 %       0.57 %
               
(1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $9.9 million and $8.2 million for the six months ended June 30, 2018 and 2017, respectively.
(2) Interest and fees on loans and investments exclude tax equivalent adjustments.


Eagle Bancorp, Inc.    
Statements of Income and Highlights Quarterly Trends (Unaudited)    
(dollars in thousands, except per share data)    
  Three Months Ended    
  June 30,   March 31,   December 31,   September 30,   June 30,   March 31,   December 31,   September 30,    
Income Statements:   2018       2018       2017       2017       2017       2017       2016       2016      
Total interest income $ 96,296     $ 89,049     $ 86,526     $ 82,370     $ 79,344     $ 75,794     $ 75,795     $ 72,431      
Total interest expense   18,086       13,269       11,167       10,434       9,646       8,900       8,771       7,703      
Net interest income   78,210       75,780       75,359       71,936       69,698       66,894       67,024       64,728      
Provision for credit losses   1,650       1,969       4,087       1,921       1,566       1,397       2,112       2,288      
Net interest income after provision for credit losses   76,560       73,811       71,272       70,015       68,132       65,497       64,912       62,440      
Noninterest income (before investment gains)   5,526       5,262       9,496       6,773       6,997       5,565       6,943       6,404      
Gain on sale of investment securities   26       42       -       11       26       505       71       1      
Total noninterest income   5,552       5,304       9,496       6,784       7,023       6,070       7,014       6,405      
Salaries and employee benefits   17,812       16,858       16,678       16,905       16,869       16,677       17,853       17,130      
Premises and equipment   3,873       3,929       4,019       3,846       3,920       3,847       3,699       3,786      
Marketing and advertising   1,291       937       1,222       732       1,247       894       944       857      
Other expenses   9,313       9,397       7,884       8,033       7,965       7,814       7,284       7,065      
Total noninterest expense   32,289       31,121       29,803       29,516       30,001       29,232       29,780       28,838      
Income before income tax expense   49,823       47,994       50,965       47,283       45,154       42,335       42,146       40,007      
Income tax expense   12,528       12,279       35,396       17,409       17,382       15,318       16,429       15,484      
Net income   37,295       35,715       15,569       29,874       27,772       27,017       25,717       24,523      
                                   
                                   
Per Share Data:                                  
Earnings per weighted average common share, basic $ 1.09     $ 1.04     $ 0.46     $ 0.87     $ 0.81     $ 0.79     $ 0.76     $ 0.73      
Earnings per weighted average common share, diluted $ 1.08     $ 1.04     $ 0.45     $ 0.87     $ 0.81     $ 0.79     $ 0.75     $ 0.72      
Weighted average common shares outstanding, basic   34,305,693       34,260,882       34,179,793       34,173,893       34,128,598       34,069,528       33,650,963       33,590,183      
Weighted average common shares outstanding, diluted   34,448,354       34,406,310       34,334,873       34,338,442       34,324,120       34,284,316       34,233,940       34,187,171      
Actual shares outstanding at period end   34,305,071       34,303,056       34,185,163       34,174,009       34,169,924       34,110,056       34,023,850       33,590,880      
Book value per common share at period end $ 29.82     $ 28.72     $ 27.80     $ 27.33     $ 26.42     $ 25.59     $ 24.77     $ 24.28      
Tangible book value per common share at period end (1) $ 26.71     $ 25.60     $ 24.67     $ 24.19     $ 23.28     $ 22.45     $ 21.61     $ 21.08      
                                   
Performance Ratios (annualized):                                  
Return on average assets   1.92%       1.91%       0.82%       1.66%       1.60%       1.62%       1.46%       1.50%      
Return on average common equity   14.93%       14.99%       6.49%       12.86%       12.51%       12.74%       12.26%       12.04%      
Return on average tangible common equity   16.71%       16.86%       7.31%       14.55%       14.22%       14.56%       14.07%       13.89%      
Net interest margin   4.15%       4.17%       4.13%       4.14%       4.16%       4.14%       3.95%       4.11%      
Efficiency ratio (2)   38.55%       38.38%       35.12%       37.49%       39.10%       40.06%       40.22%       40.54%      
                                   
Other Ratios:                                  
Allowance for credit losses to total loans (3)   1.00%       1.00%       1.01%       1.03%       1.02%       1.03%       1.04%       1.04%      
Allowance for credit losses to total nonperforming loans   612.42%       491.56%       489.20%       379.11%       356.00%       416.91%       330.49%       255.29%      
Nonperforming loans to total loans (3)   0.16%       0.20%       0.21%       0.27%       0.29%       0.25%       0.31%       0.41%      
Nonperforming assets to total assets   0.16%       0.19%       0.20%       0.24%       0.26%       0.22%       0.30%       0.41%      
Net charge-offs (annualized) to average loans (3)   0.05%       0.06%       0.15%       0.00%       0.02%       0.04%       -0.01 %     0.14%      
Tier 1 capital (to average assets)   11.97%       11.76%       11.45%       11.78%       11.61%       11.51%       10.72%       11.12%      
Total capital (to risk weighted assets)   15.59%       15.32%       15.02%       15.30%       15.13%       14.97%       14.89%       15.05%      
Common equity tier 1 capital (to risk weighted assets)   11.89%       11.57%       11.23%       11.40%       11.18%       10.97%       10.80%       10.83%      
Tangible common equity ratio (1)   11.79%       11.57%       11.44%       11.35%       11.15%       10.97%       10.84%       10.64%      
                                   
Average Balances (in thousands):                                  
Total assets $ 7,789,564     $ 7,597,485     $ 7,487,624     $ 7,128,769     $ 6,959,994     $ 6,772,164     $ 6,984,492     $ 6,492,274      
Total earning assets $ 7,558,138     $ 7,373,535     $ 7,242,994     $ 6,897,613     $ 6,728,055     $ 6,538,377     $ 6,754,935     $ 6,266,311      
Total loans $ 6,569,931     $ 6,433,730     $ 6,207,505     $ 5,946,411     $ 5,895,174     $ 5,705,261     $ 5,591,790     $ 5,422,677      
Total deposits $ 6,269,126     $ 6,063,017     $ 6,101,727     $ 5,827,953     $ 5,660,119     $ 5,554,402     $ 5,796,516     $ 5,353,834      
Total borrowings $ 485,729     $ 523,369     $ 382,687     $ 344,959     $ 375,124     $ 318,143     $ 312,842     $ 300,083      
Total shareholders' equity $ 1,002,091     $ 966,585     $ 951,727     $ 921,493     $ 890,498     $ 859,779     $ 834,823     $ 809,973      
                                   
(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

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