Eagle Bancorp, Inc. Announces Record Earnings For The Fourth Quarter Of 2012, With Full Year 2012 Earnings Up 44%

BETHESDA, Md., Jan. 23, 2013 (GLOBE NEWSWIRE) -- Eagle Bancorp, Inc. (the "Company") (Nasdaq:EGBN), the parent company of EagleBank, today announced record quarterly net income of $10.2 million for the quarter ended December 31, 2012, a 42% increase over the $7.2 million net income for the quarter ended December 31, 2011. Net income available to common shareholders for the quarter ended December 31, 2012 increased 43% to $10.1 million ($0.44 per basic common share and $0.43 per diluted common share), as compared to $7.0 million ($0.35 per basic and diluted common share) for the same three month period in 2011.

For the year ended December 31, 2012, the Company's net income was $35.3 million, a 44% increase over the $24.6 million for the year ended December 31, 2011. Net income available to common shareholders increased 51% to $34.7 million ($1.65 per basic common share and $1.61 per diluted common share), as compared to $23.0 million ($1.16 per basic common share and $1.14 per diluted common share) for the year ended December 31, 2011.

"We are very pleased to report another quarter of record earnings, highlighted by strong, balanced and consistent financial performance, substantially higher total revenue from net interest income and noninterest income, continued favorable asset quality trends and substantial capital growth," noted Ronald D. Paul, Chairman and Chief Executive Officer of Eagle Bancorp, Inc. The Company's earnings have now increased in each quarter since the fourth quarter of 2008. Mr. Paul added, "For the fourth quarter of 2012, the Company continued its trend of achieving growth in both average loans and deposits, maintaining a strong net interest margin, and accomplishing enhanced levels of noninterest revenue, primarily from higher levels of residential mortgage refinancing activity. Additional liquidity was added to the balance sheet in the fourth quarter to address potential risk from expiration of the TAG deposit insurance program and normal year end activity. The Company also maintained favorable operating cost management as measured by both the Efficiency Ratio and the level of Noninterest Expenses to Average Assets. For the fourth quarter of 2012, average loan balances grew 4% as compared to the third quarter of 2012, while average deposit balances were 7% higher. The net interest margin remained strong at 4.31% for the fourth quarter of 2012, in spite of substantially higher balance sheet liquidity. Total revenue (net interest income plus noninterest income) was $40.8 million for the fourth quarter of 2012, 7% higher than the third quarter of 2012 and 27% higher than the same quarter one year ago."

At December 31, 2012, total assets were $3.41 billion, compared to $2.83 billion at December 31, 2011, a 20% increase. As compared to September 30, 2012, total assets at December 31, 2012 increased by $433 million, a 15% increase. Total loans (excluding loans held for sale) were $2.49 billion at December 31, 2012 compared to $2.06 billion at December 31, 2011, a 21% increase. As compared to September 30, 2012, total loans at December 31, 2012 increased by $95 million, a 4% increase. Total deposits were $2.90 billion at December 31, 2012, compared to deposits of $2.39 billion at December 31, 2011, a 21% increase. As compared to September 30, 2012, total deposits at December 31, 2012 increased by $382 million, a 15% increase, which included $127 million in broker deposits. Loans held for sale amounted to $226.9 million at December 31, 2012 as compared to $176.8 million at December 31, 2011, a 28% increase. As compared to September 30, 2012 loans held for sale increased by $56 million, a 33% increase. The investment portfolio totaled $299.8 million at December 31, 2012, a 5% decrease from the $313.8 million balance at December 31, 2011. As compared to September 30, 2012, the investment portfolio at December 31, 2012 increased by $3.5 million, a 1% increase. Total borrowed funds (excluding customer repurchase agreements) were $39.3 million at December 31, 2012 compared to $49.3 million at December 31, 2011, a 20% decrease. As compared to September 30, 2012, total borrowed funds at December 31, 2012 decreased by $10 million, a 20% decrease due to the early payoff of Federal Home Loan Bank ("FHLB") advances.

Total shareholders' equity increased to $350.0 million at December 31, 2012, compared to $266.7 million and $324.4 million at December 31, 2011 and September 30, 2012, respectively. In late October 2012, the Company announced completion of a $35 million At the Market Stock Offering (which commenced May 1, 2012), as well as completion of an additional $10 million Underwritten Offering. In total, the Company sold an aggregate of 2,604,086 shares of common stock at an average weighted price of $17.31 per share, for aggregate net proceeds of $43.6 million.

The Company's capital position remains substantially in excess of regulatory requirements for well capitalized status, with a total risk based capital ratio of 12.19% at December 31, 2012, as compared to a total risk based capital ratio of 11.84% at December 31, 2011. The combination of strong earnings over the twelve months ended December 31, 2012, the At the Market and Underwritten Offering capital raises noted above and issuances under stock options and employee stock purchase plans have enabled the Company to increase regulatory capital ratios, while continuing substantial balance sheet growth. In addition, the tangible common equity ratio (tangible common equity to tangible assets) increased to 8.50% at December 31, 2012, from 7.29% at December 31, 2011. As compared to September 30, 2012, the tangible common equity ratio declined by 38 basis points due to substantial growth in total assets in the fourth quarter of 2012.

At December 31, 2012, the Company's nonperforming assets amounted to $36.0 million, representing 1.06% of total assets, compared to $36.0 million of nonperforming assets, or 1.27% of total assets at December 31, 2011 and $37.3 million of nonperforming assets, or 1.25% of total assets at September 30, 2012. Management remains attentive to early signs of deterioration in borrowers' financial conditions and is proactive in taking the appropriate steps to mitigate risk. Furthermore, the Company is diligent in placing loans on nonaccrual status and believes, based on its loan portfolio risk analysis, that its allowance for loan losses, at 1.50% of total loans (excluding loans held for sale) at December 31, 2012, is adequate to absorb potential credit losses within the loan portfolio at that date. The allowance for credit losses represented 122% of nonperforming loans at December 31, 2012, as compared to 90% at December 31, 2011 and 110% at September 30, 2012, respectively. Included in nonperforming assets at December 31, 2012 were $5.3 million of other real estate owned ("OREO") as compared to $3.2 million at December 31, 2011 and $4.9 million at September 30, 2012.

Analysis of the three months ended December 31, 2012 compared to December 31, 2011

As reported in October 2011, EagleBank became the escrow depository in mid-September 2011 of approximately $620 million of noninterest bearing deposits resulting from a long term client relationship (the "settlement deposit"). The deposits, as expected, were substantially withdrawn in the fourth quarter of 2011. While this large and unusual transaction did not impact 2012 results, these funds contributed approximately $140 thousand to net earnings in the fourth quarter of 2011 and $170 thousand to earnings for the full year 2011 and significantly impacted a number of financial ratios and metrics. To allow for appropriate comparisons, we make certain parenthetical comments in this earnings press release, in order to compute the relevant non-GAAP ratios on a basis which excludes this large and unusual short-term transaction.

For the three months ended December 31, 2012, the Company reported an annualized return on average assets ("ROAA") of 1.25% as compared to 0.91% (1.03% excluding the effect of the settlement deposit) for the three months ended December 31, 2011. The annualized return on average common equity ("ROAE") for the quarter ended December 31, 2012 was 13.95%, as compared to 13.40% for the quarter ended December 31, 2011. The higher ROAA and ROAE ratios for the fourth quarter of 2012 as compared to 2011 are due to an expanded net interest margin and higher noninterest income.

Net interest income increased 23% for the three months ended December 31, 2012 over the same period in 2011, resulting from a combination of strong average balance sheet growth and net interest margin expansion, as the mix of earning assets shifted to higher yield assets and the cost of funds declined, as compared to the same quarter in 2011. As compared to the fourth quarter of 2011, average earning assets increased by 4% for the fourth quarter of 2012 (20% excluding the effect of the settlement deposit). For the three months ended December 31, 2012, the net interest margin was 4.31% as compared to 3.65% (4.16% excluding the effect of the settlement deposit) for the three months ended December 31, 2011. The Company's net interest margin remains favorable compared to peers.

The provision for credit losses was $4.1 million for the three months ended December 31, 2012 as compared to $2.8 million for the three months ended December 31, 2011. At December 31, 2012 the allowance for credit losses represented 1.50% of loans outstanding, as compared to 1.44% and 1.48% at December 31, 2011 and September 30, 2012, respectively. The allowance for credit losses represented 122% of nonperforming loans at December 31, 2012, as compared to 90% at December 31, 2011 and 110% at September 30, 2012, respectively. The higher provisioning in the fourth quarter of 2012, as compared to the fourth quarter of 2011, is due to change in loan mix, loan growth and higher net charge-offs. Net charge-offs of $2.2 million in the fourth quarter of 2012 represented 0.37% of average loans, excluding loans held for sale, as compared to $1.7 million or 0.34% of average loans, excluding loans held for sale, in the fourth quarter of 2011. Net charge-offs in the fourth quarter of 2012 were primarily attributable to commercial and industrial loans ($1.4 million), construction loans ($459 thousand), home equity and consumer loans ($195 thousand), and the unguaranteed portion of SBA loans ($111 thousand).

Noninterest income for the three months ended December 31, 2012 increased to $6.1 million from $3.9 million for the three months ended December 31, 2011, a 57% increase. This increase was due primarily to an increase of $1.9 million in gains on sales of residential mortgage loans in the fourth quarter of 2012 as compared to the fourth quarter of 2011, resulting from substantially higher volumes of residential mortgage refinancing activity. Other income increased $365 thousand in the fourth quarter of 2012 as compared to the fourth quarter of 2011, a 65% increase due substantially to loan fee income and ATM fees. Investment securities losses amounted to $75 thousand for the fourth quarter of 2012, as compared to no investment gains or losses for the fourth quarter of 2011. Excluding investment securities losses, total noninterest income was $6.1 million for the fourth quarter of 2012, as compared to $3.9 million for the fourth quarter of 2011, an increase of 59%.

The efficiency ratio, which measures the ratio of noninterest expense to total revenue, was 49.82% for the fourth quarter of 2012, as compared to 56.97% for the fourth quarter of 2011. Noninterest expenses were $20.3 million for the three months ended December 31, 2012, as compared to $18.3 million for the three months ended December 31, 2011, an 11% increase. Cost increases for salaries and benefits were $2.0 million, due to staffing increases primarily as a result of growth in residential lending, as well as additional commercial lending and branch personnel and merit and benefit cost increases, increases in incentive pay. Premises and equipment expenses were $288 thousand higher, due to the cost of new branch offices, a new commercial lending office, two new residential lending offices and normal increases in leasing costs.

Analysis of the twelve months ended December 31, 2012 compared to December 31, 2011

For the twelve months ended December 31, 2012, the Company reported an ROAA of 1.18% as compared to 0.97% (1.01% excluding the effect of the settlement deposit) for the twelve months of 2011, while the ROAE was 14.14% in 2012, as compared to 11.71% for the same twelve month period in 2011. The increase in these ratios was due to an expanded net interest margin, higher noninterest income and improved operating efficiency.

A lower dividend rate on preferred stock contributed approximately $945 thousand of the aggregate $11.7 million increase in earnings available to common shareholders for the twelve months ended December 31, 2012 as compared to the same period in 2011.

For the twelve months of 2012, net interest income increased 29% over the same period for 2011. This increase was attributed to both an increase in average earning assets of 19% and an increase in the net interest margin to 4.32% for the twelve months of 2012, as compared to 3.99% (4.17% excluding the effect of the settlement deposit) for the twelve months of 2011. The Company has been able to maintain its loan portfolio yields in 2012 close to 2011 levels due to loan pricing practices, and has experienced a significant increase in the mix of average loans held for sale, which has benefited earning asset yields, and has seen a reduction in its funding costs while maintaining a favorable deposit mix.

The provision for credit losses was $16.2 million for the twelve months of 2012 as compared to $11.0 million in 2011. The higher provisioning in 2012 as compared to 2011 is attributable to the change in loan mix, higher reserves for classified loans, loan growth, and higher net charge-offs in the twelve months of 2012 compared to 2011. For the twelve months ended December 31, 2012, net charge-offs totaled $8.4 million (0.37% of average loans) compared to $6.1 million (0.32% of average loans) for the twelve months ended December 31, 2011. Net charge-offs in the twelve months ended December 31, 2012 were primarily attributable to commercial and industrial loans ($3.1 million), construction loans ($2.5 million), commercial real estate loans ($1.2 million), home equity and consumer loans ($970 thousand), owner occupied real estate ($350 thousand) and the unguaranteed portion of SBA loans ($248 thousand).

Noninterest income for the twelve months of 2012 was $21.4 million compared to $13.5 million in 2011, an increase of 58%. This increase was due primarily to an $8.0 million increase in gains realized on the sale of residential mortgage loans. Service charges on deposit accounts increased $619 thousand in 2012 as compared to 2011, a 19% increase. Other noninterest income increased by $652 thousand primarily due to other loan income and ATM fees. Investment securities gains were $690 thousand for the twelve months in 2012 as compared to $1.4 million for the same period in 2011. A $529 thousand loss on the early extinguishment of debt was realized in 2012 due to restructuring of FHLB advances. Excluding investment securities gains and the loss on the early extinguishment of debt, total noninterest income was $21.2 million for the twelve months of 2012 as compared to $12.1 million for 2011, a 76% increase.

Noninterest expenses were $76.5 million for the twelve months of 2012, as compared to $63.3 million for 2011, a 21% increase. Cost increases for salaries and benefits were $9.2 million due to staffing increases primarily as a result of growth in residential lending, commercial lending and branch personnel and merit increases, incentive compensation and benefits increases. Premises and equipment expenses were $1.8 million higher due primarily to the cost of new branch offices, a new commercial lending office, two new residential lending offices and normal increases in leasing costs. Data processing costs increased by $861 thousand due to system enhancements and expanded customer transaction costs. Legal, accounting, and professional fees increases of $279 thousand were due substantially to higher professional fees, resolution of problem loans and related collection costs. FDIC insurance premiums were $106 thousand lower due to FDIC premium rate declines which took effect on April 1, 2011. Other expenses increased for the twelve months of 2012 versus 2011 by $1.1 million due substantially to increases in broker fees, other losses, and telephone. For the twelve months of 2012, the efficiency ratio improved to 51.40% as compared to 56.22% for the same period in 2011 and the ratio of noninterest expenses to average assets was 2.55% for the twelve months ended December 31, 2012 as compared to 2.51% for the same period in 2011.

At December 31, 2012, the Company had a total risk based capital ratio of 12.19%, a Tier 1 risk based capital ratio of 10.80%, and a Tier 1 leverage ratio of 10.44%, all measures substantially above the regulatory requirements for well capitalized status.

The financial information which follows provides more detail on the Company's financial performance for the twelve and three months ended December 31, 2012 as compared to the twelve and three months ended December 31, 2011, 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, 2011 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 seventeen full service branch offices, located in Montgomery County, Maryland; Washington, D.C.; and Arlington and Fairfax Counties, Virginia. The Company focuses on building relationships with businesses, professionals and individuals in its marketplace.

The Eagle Bancorp, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6101

Conference Call: Eagle Bancorp will host a conference call to discuss the fourth quarter 2012 financial results on Thursday, January 24, 2013 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 86070079, 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 8, 2013.

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, 2011 and in other periodic and current reports filed with the SEC. Readers are cautioned against placing undue reliance on any such forward-looking statements. The Company's past results are not necessarily indicative of future performance.
         
Eagle Bancorp, Inc.        
Consolidated Financial Highlights (Unaudited)        
(dollars in thousands, except per share data)        
  Twelve Months Ended December 31, Three Months Ended December 31,
  2012 2011 2012 2011
Income Statements:        
Total interest income  $ 141,943  $ 119,124  $ 38,164  $ 33,091
Total interest expense  14,414  20,077  3,427  4,820
Net interest income  127,529  99,047  34,737  28,271
Provision for credit losses  16,190  10,983  4,139  2,765
Net interest income after provision for credit losses  111,339  88,064  30,598  25,506
Noninterest income (before investment gains/losses & extinguishment of debt)  21,203  12,056  6,135  3,864
Gain/(loss) on sale of investment securities  690  1,445  (75)  -- 
Loss on early extinguishment of debt  (529)  --   --   -- 
Total noninterest income  21,364  13,501  6,060  3,864
Total noninterest expense  76,531  63,276  20,325  18,307
Income before income tax expense  56,172  38,289  16,333  11,063
Income tax expense  20,883  13,731  6,135  3,889
Net income  35,289  24,558  10,198  7,174
Preferred stock dividends and discount accretion  566  1,511  141  142
Net income available to common shareholders  $ 34,723  $ 23,047  $ 10,057  $ 7,032
         
         
Per Share Data:        
Earnings per weighted average common share, basic  $ 1.65  $ 1.16  $ 0.44  $ 0.35
Earnings per weighted average common share, diluted  $ 1.61  $ 1.14  $ 0.43  $ 0.35
Weighted average common shares outstanding, basic  21,032,624  19,835,534  22,650,761  19,867,533
Weighted average common shares outstanding, diluted  21,585,286  20,287,812  23,274,203  20,281,294
Actual shares outstanding  22,954,889  19,952,844  22,954,889  19,952,844
Book value per common share at period end  $ 12.78  $ 10.53  $ 12.78  $ 10.53
Tangible book value per common share at period end (1)  $ 12.62  $ 10.32  $ 12.62  $ 10.32
         
Performance Ratios (annualized):        
Return on average assets (2) 1.18% 0.97% 1.25% 0.91%
Return on average common equity (2) 14.14% 11.71% 13.95% 13.40%
Net interest margin (2) 4.32% 3.99% 4.31% 3.65%
Efficiency ratio (3) 51.40% 56.22% 49.82% 56.97%
         
Other Ratios:        
Allowance for credit losses to total loans 1.50% 1.44% 1.50% 1.44%
Allowance for credit losses to total nonperforming loans 122.19% 90.42% 122.19% 90.42%
Nonperforming loans to total loans 1.23% 1.59% 1.23% 1.59%
Nonperforming assets to total assets (2) 1.06% 1.27% 1.06% 1.27%
Net charge-offs (annualized) to average loans 0.37% 0.32% 0.37% 0.34%
Common equity to total assets (2) 8.60% 7.42% 8.60% 7.42%
Tier 1 leverage ratio 10.44% 8.21% 10.44% 8.21%
Tier 1 risk based capital ratio 10.80% 10.33% 10.80% 10.33%
Total risk based capital ratio 12.19% 11.84% 12.19% 11.84%
Tangible common equity to tangible assets (1) (2) 8.50% 7.29% 8.50% 7.29%
         
Loan Balances - Period End (in thousands):        
Commercial and Industrial  $ 545,070  $ 478,886  $ 545,070  $ 478,886
Commercial real estate - owner occupied  $ 297,857  $ 250,174  $ 297,857  $ 250,174
Commercial real estate - income producing  $ 914,636  $ 756,643  $ 914,636  $ 756,643
1-4 Family mortgage  $ 61,871  $ 39,552  $ 61,871  $ 39,552
Construction - commercial and residential  $ 533,722  $ 395,267  $ 533,722  $ 395,267
Construction - C&I (owner occupied)  $ 28,808  $ 34,402  $ 28,808  $ 34,402
Home equity  $ 106,844  $ 97,103  $ 106,844  $ 97,103
Other consumer  $ 4,285  $ 4,227  $ 4,285  $ 4,227
         
Average Balances (in thousands):        
Total assets (2)  $ 2,997,994  $ 2,523,592  $ 3,247,498  $ 3,111,952
Total earning assets (2)  $ 2,953,417  $ 2,482,625  $ 3,203,462  $ 3,071,903
Total loans held for sale  $ 140,167  $ 63,198  $ 186,122  $ 177,116
Total loans  $ 2,281,027  $ 1,895,268  $ 2,442,418  $ 2,030,986
Total deposits (2)  $ 2,541,151  $ 2,113,517  $ 2,748,567  $ 2,652,707
Total borrowings  $ 143,542  $ 165,689  $ 137,525  $ 183,632
Total shareholders' equity  $ 302,234  $ 235,342  $ 343,401  $ 264,833

Use of Non-GAAP Financial Measures

The Company considers the following non-GAAP measurements useful for investors, regulators, management and others to evaluate capital adequacy and to compare against other financial institutions. The table below provides a reconciliation of these non-GAAP financial measures with financial measures defined by GAAP.

(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.

(2)   The reported GAAP figures below have been adjusted for the $620 million settlement deposit received in connection with a class action settlement September 13, 2011 and which was disbursed by year end 2011. In the interim, the deposit was invested in excess reserves at the Federal Reserve. As the magnitude of the deposit distorts the operational results of the Company, the GAAP reconciliation below and in the accompanying text certain performance ratios excluding the effect of this deposit. The settlement deposit resulted in approximately $254,000 and $326,000 of interest income and $140,000 and $170,000 of income, net of tax, during the three and twelve months periods ended December 31, 2011. The Company considers this information important to enable shareholders and other interested parties to assess the core operational performance of the Company.

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

     
GAAP Reconciliation (Unaudited)    
(dollars in thousands except per share data)    
  Twelve Months Ended Twelve Months Ended
  December 31, 2012 December 31, 2011
Common shareholders' equity  $ 293,376  $ 210,111
Less: Intangible assets  (3,785)  (4,145)
Tangible common equity  $ 289,591  $ 205,966
     
Book value per common share  $ 12.78  $ 10.53
Less: Intangible book value per common share  (0.16)  (0.21)
Tangible book value per common share  $ 12.62  $ 10.32
     
Total assets  $ 3,409,441  $ 2,831,255
Less: Intangible assets  (3,785)  (4,145)
Tangible assets  $ 3,405,656  $ 2,827,110
Tangible common equity ratio 8.50% 7.29%
             
GAAP Reconciliation (Unaudited)
(dollars in thousands except per share data)
             
  Three Months Ended December 31,
  2012 2011
  Average   Average Average   Average
  Balance Interest Yield/Rate Balance Interest Yield/Rate
             
Total earning assets  $ 3,203,462  $ 38,164 4.74%  $ 3,071,903  $ 33,091 4.27%
Less: settlement deposit  --  --  --  (396,710)  (254) (0.25%)
Adjusted earning assets  $ 3,203,462  $ 38,164 4.74%  $ 2,675,193  $ 32,837 4.87%
             
Total interest bearing liabilities  $ 2,032,596  $ 3,427 0.67%  $ 1,858,912  $ 4,820 1.03%
             
Adjusted interest spread     4.07%     3.84%
Adjusted interest margin     4.31%     4.16%
             
             
Change in average earning assets         Increase/(Decrease) Percentage
Total earning assets  $ 3,203,462      $ 3,071,903  $ 131,559 4.28%
Less: settlement deposit  --       (396,710)  --  
Adjusted earning assets  $ 3,203,462      $ 2,675,193  $ 528,269 19.75%
             
             
             
  Twelve Months Ended December 31,
  2012 2011
  Average   Average Average   Average
  Balance Interest Yield/Rate Balance Interest Yield/Rate
             
Total earning assets  $ 2,953,417  $ 141,943 4.81%  $ 2,482,625  $ 119,124 4.80%
Less: settlement deposit  --  --  --  (117,990)  (326) (0.28%)
Adjusted earning assets  $ 2,953,417  $ 141,943 4.81%  $ 2,364,635  $ 118,798 5.02%
             
Total interest bearing liabilities  $ 1,903,453  $ 14,414 0.76%  $ 1,679,855  $ 20,077 1.20%
             
Adjusted interest spread     4.05%     3.83%
Adjusted interest margin     4.32%     4.17%
             
             
             
  Twelve Months Ended December 31, Three Months Ended December 31,    
  2012 2011 2012 2011    
             
Net income  $ 35,289  $ 24,558  $ 10,198  $ 7,174    
Less: settlement deposit  --  (170)  --  (140)    
Adjusted net income  $ 35,289  $ 24,388  $ 10,198  $ 7,034    
             
Average total assets  $ 2,997,994  $ 2,523,592  $ 3,247,498  $ 3,111,952    
Less: settlement deposit  --  (117,990)  --  (396,710)    
Adjusted average total assets  $ 2,997,994  $ 2,405,602  $ 3,247,498  $ 2,715,242    
             
Adjusted return on average assets 1.18% 1.01% 1.25% 1.03%    
       
Eagle Bancorp, Inc.
Consolidated Balance Sheets (Unaudited)
(dollars in thousands, except per share data)
  December 31, 2012 September 30, 2012 December 31, 2011
Assets      
Cash and due from banks  $ 7,439  $ 6,780  $ 5,374
Federal funds sold  7,852  4,173  21,785
Interest bearing deposits with banks and other short-term investments  324,043  46,752  205,252
Investment securities available for sale, at fair value  299,820  296,363  313,811
Federal Reserve and Federal Home Loan Bank stock  10,694  12,031  10,242
Loans held for sale  226,923  171,241  176,826
Loans  2,493,095  2,397,669  2,056,256
Less allowance for credit losses  (37,492)  (35,582)  (29,653)
Loans, net  2,455,603  2,362,087  2,026,603
Premises and equipment, net  15,261  14,472  12,320
Deferred income taxes  19,128  16,413  14,673
Bank owned life insurance  14,135  14,036  13,743
Intangible assets, net  3,785  3,895  4,145
Other real estate owned  5,299  4,923  3,225
Other assets  19,459  23,022  23,256
Total Assets  $ 3,409,441  $ 2,976,188  $ 2,831,255
       
Liabilities and Shareholders' Equity      
Liabilities      
Deposits:      
Noninterest bearing demand  $ 881,390  $ 796,654  $ 688,506
Interest bearing transaction  113,813  112,901  80,105
Savings and money market  1,374,869  1,180,894  1,068,370
Time, $100,000 or more  232,875  242,159  332,470
Other time  294,275  182,381  222,644
Total deposits  2,897,222  2,514,989  2,392,095
Customer repurchase agreements  101,338  75,368  103,362
Other short-term borrowings  --   10,000  -- 
Long-term borrowings  39,300  39,300  49,300
Other liabilities  21,605  12,132  19,787
Total liabilities  3,059,465  2,651,789  2,564,544
       
Shareholders' Equity      
Preferred stock, par value $.01 per share, shares authorized 1,000,000, Series B, $1,000 per share liquidation preference, shares issued and outstanding 56,600 at December 31, 2012, September 30, 2012 and December 31, 2011  56,600  56,600  56,600
Common stock, par value $.01 per share; shares authorized 50,000,000, shares issued and outstanding 22,954,889, 22,040,006 and 19,952,844, respectively  226  217  197
Warrant  946  946  946
Additional paid in capital  180,593  164,522  127,670
Retained earnings  106,146  96,088  76,423
Accumulated other comprehensive income  5,465  6,026  4,875
Total Shareholders' Equity  349,976  324,399  266,711
Total Liabilities and Shareholders' Equity  $ 3,409,441  $ 2,976,188  $ 2,831,255
         
Eagle Bancorp, Inc.
Consolidated Statements of Operations (Unaudited)
(dollars in thousands, except per share data)
         
  Twelve Months Ended December 31, Three Months Ended December 31,
Interest Income 2012 2011 2012 2011
Interest and fees on loans  $ 134,600  $ 112,320  $ 36,439  $ 31,307
Interest and dividends on investment securities  6,824  6,181  1,545  1,427
Interest on balances with other banks and short-term investments  475  513  177  341
Interest on federal funds sold  44  110  3  16
Total interest income  141,943  119,124  38,164  33,091
Interest Expense        
Interest on deposits  12,057  17,248  2,927  4,127
Interest on customer repurchase agreements  325  685  75  152
Interest on short-term borrowings  3  --   1  -- 
Interest on long-term borrowings  2,029  2,144  424  541
Total interest expense  14,414  20,077  3,427  4,820
Net Interest Income  127,529  99,047  34,737  28,271
Provision for Credit Losses  16,190  10,983  4,139  2,765
Net Interest Income After Provision For Credit Losses  111,339  88,064  30,598  25,506
         
Noninterest Income        
Service charges on deposits  3,937  3,318  1,035  1,017
Gain on sale of loans  13,942  6,057  4,075  2,185
Gain/(loss) on sale of investment securities  690  1,445  (75)  -- 
Loss on early extinguishment of debt  (529)  --   --   -- 
Increase in the cash surrender value of bank owned life insurance  392  401  98  100
Other income  2,932  2,280  927  562
Total noninterest income  21,364  13,501  6,060  3,864
Noninterest Expense        
Salaries and employee benefits  43,684  34,518  12,164  10,183
Premises and equipment expenses  10,218  8,371  2,677  2,389
Marketing and advertising  1,759  1,626  419  411
Data processing  4,415  3,554  1,142  1,077
Legal, accounting and professional fees  4,253  3,974  938  1,104
FDIC insurance  2,089  2,195  536  567
Other expenses  10,113  9,038  2,449  2,576
Total noninterest expense 76,531 63,276 20,325 18,307
Income Before Income Tax Expense  56,172  38,289  16,333  11,063
Income Tax Expense  20,883  13,731  6,135  3,889
Net Income  35,289  24,558  10,198  7,174
Preferred Stock Dividends and Discount Accretion  566  1,511  141  142
Net Income Available to Common Shareholders  $ 34,723  $ 23,047  $ 10,057  $ 7,032
         
Earnings Per Common Share        
Basic  $ 1.65  $ 1.16  $ 0.44  $ 0.35
Diluted  $ 1.61  $ 1.14  $ 0.43  $ 0.35
             
Eagle Bancorp, Inc.
Consolidated Average Balances, Interest Yields And Rates (Unaudited)
(dollars in thousands)
             
  Three Months Ended December 31,
  2012 2011
  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  $ 258,577  $ 177 0.27%  $ 539,924  $ 341 0.25%
Loans held for sale (1)  186,122  1,600 3.44%  177,116  1,724 3.89%
Loans (1) (2)  2,442,418  34,839 5.67%  2,030,986  29,583 5.78%
Investment securities available for sale (2)  310,851  1,545 1.98%  301,517  1,427 1.88%
Federal funds sold  5,494  3 0.22%  22,360  16 0.28%
Total interest earning assets  3,203,462  38,164 4.74%  3,071,903  33,091 4.27%
             
Total noninterest earning assets  80,580      68,745    
Less: allowance for credit losses  36,544      28,696    
Total noninterest earning assets  44,036      40,049    
TOTAL ASSETS  $ 3,247,498      $ 3,111,952    
             
LIABILITIES AND SHAREHOLDERS' EQUITY            
Interest bearing liabilities:            
Interest bearing transaction  $ 110,688  $ 93 0.33%  $ 73,577  $ 73 0.39%
Savings and money market  1,312,792  1,528 0.46%  1,031,079  2,085 0.80%
Time deposits  471,591  1,306 1.10%  570,624  1,969 1.37%
Total interest bearing deposits  1,895,071  2,927 0.61%  1,675,280  4,127 0.98%
Customer repurchase agreements  97,622  75 0.31%  134,332  152 0.45%
Other short-term borrowings  603  1  --   --  --  -- 
Long-term borrowings  39,300  424 4.22%  49,300  541 4.29%
Total interest bearing liabilities  2,032,596  3,427 0.67%  1,858,912  4,820 1.03%
             
Noninterest bearing liabilities:            
Noninterest bearing demand  853,496      977,427    
Other liabilities  18,005      10,780    
Total noninterest bearing liabilities  871,501      988,207    
             
Shareholders' equity  343,401      264,833    
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  $ 3,247,498      $ 3,111,952    
             
             
Net interest income    $ 34,737      $ 28,271  
Net interest spread     4.07%     3.24%
Net interest margin     4.31%     3.65%
             
(1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $1.7 million and $1.2 million for the three months ended December 31, 2012 and 2011, respectively.
(2) Interest and fees on loans and investments exclude tax equivalent adjustments.
             
Eagle Bancorp, Inc.
Consolidated Average Balances, Interest Yields and Rates (Unaudited)
(dollars in thousands)
             
  Twelve Months Ended December 31,
  2012 2011
  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  $ 186,157  $ 475 0.26%  $ 206,894  $ 513 0.25%
Loans held for sale (1)  140,167  4,945 3.53%  63,198  2,458 3.89%
Loans (1) (2)  2,281,027  129,655 5.68%  1,895,268  109,862 5.80%
Investment securities available for sale (2)  330,670  6,824 2.06%  266,758  6,181 2.32%
Federal funds sold  15,396  44 0.29%  50,507  110 0.22%
Total interest earning assets  2,953,417  141,943 4.81%  2,482,625  119,124 4.80%
             
Total noninterest earning assets  77,827      67,882    
Less: allowance for credit losses  33,250      26,915    
Total noninterest earning assets  44,577      40,967    
TOTAL ASSETS  $ 2,997,994      $ 2,523,592    
             
LIABILITIES AND SHAREHOLDERS' EQUITY            
Interest bearing liabilities:            
Interest bearing transaction  $ 94,848  $ 289 0.30%  $ 64,849  $ 236 0.36%
Savings and money market  1,183,402  5,946 0.50%  869,971  8,488 0.98%
Time deposits  481,661  5,822 1.21%  579,346  8,524 1.47%
Total interest bearing deposits  1,759,911  12,057 0.69%  1,514,166  17,248 1.14%
Customer repurchase agreements  96,141  325 0.34%  116,367  685 0.59%
Other short-term borrowings  697  3  --   22  --  --
Long-term borrowings  46,704  2,029 4.27%  49,300  2,144 4.35%
Total interest bearing liabilities  1,903,453  14,414 0.76%  1,679,855  20,077 1.20%
             
Noninterest bearing liabilities:            
Noninterest bearing demand  781,240      599,351    
Other liabilities  11,067      9,044    
Total noninterest bearing liabilities  792,307      608,395    
             
Shareholders' equity  302,234      235,342    
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  $ 2,997,994      $ 2,523,592    
             
             
Net interest income    $ 127,529      $ 99,047  
Net interest spread     4.05%     3.60%
Net interest margin     4.32%     3.99%
             
(1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $5.4 million and $4.3 million for the twelve months ended December 31, 2012 and 2011, 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: 2012 2012 2012 2012 2011 2011 2011 2011
Total interest income  $ 38,164  $ 36,636  $ 34,575  $ 32,568  $ 33,091  $ 30,741  $ 28,996  $ 26,296
Total interest expense  3,427  3,328  3,561  4,098  4,820  5,365  5,102  4,790
Net interest income  34,737  33,308  31,014  28,470  28,271  25,376  23,894  21,506
Provision for credit losses  4,139  3,638  4,443  3,970  2,765  2,887  3,215  2,116
Net interest income after provision for credit losses  30,598  29,670  26,571  24,500  25,506  22,489  20,679  19,390
Noninterest income (before investment gains/losses & extinguishment of debt)  6,135  4,916  4,293  5,859  3,864  2,657  2,602  2,933
Gain/(loss) on sale of investment securities  (75)  464  148  153  --   854  591  -- 
Loss on early extinguishment of debt  --   (529)  --   --   --   --   --   -- 
Total noninterest income  6,060  4,851  4,441  6,012  3,864  3,511  3,193  2,933
Salaries and employee benefits  12,164  10,807  10,289  10,424  10,183  9,263  7,761  7,311
Premises and equipment  2,677  2,562  2,469  2,510  2,389  1,939  2,052  1,991
Marketing and advertising  419  497  557  286  411  234  747  234
Other expenses  5,065  5,241  5,222  5,342  5,324  4,287  4,373  4,777
Total noninterest expense  20,325  19,107  18,537  18,562  18,307  15,723  14,933  14,313
Income before income tax expense  16,333  15,414  12,475  11,950  11,063  10,277  8,939  8,010
Income tax expense  6,135  5,739  4,692  4,317  3,889  3,783  3,185  2,874
Net income  10,198  9,675  7,783  7,633  7,174  6,494  5,754  5,136
Preferred stock dividends and discount accretion  141  142  142  141  142  166  883  320
Net income available to common shareholders  $ 10,057  $ 9,533  $ 7,641  $ 7,492  $ 7,032  $ 6,328  $ 4,871  $ 4,816
                 
                 
Per Share Data:                
Earnings per weighted average common share, basic  $ 0.44  $ 0.45  $ 0.38  $ 0.37  $ 0.35  $ 0.32  $ 0.25  $ 0.24
Earnings per weighted average common share, diluted  $ 0.43  $ 0.44  $ 0.37  $ 0.36  $ 0.35  $ 0.31  $ 0.24  $ 0.24
Weighted average common shares outstanding, basic  22,650,761  21,052,773  20,297,996  20,110,948  19,919,434  19,867,533  20,050,894  19,716,814
Weighted average common shares outstanding, diluted  23,274,203  21,606,005  20,807,410  20,623,681  20,370,108  20,281,294  20,495,291  20,215,244
Actual shares outstanding  22,954,889  22,040,006  20,591,233  20,220,166  19,952,844  19,890,597  19,849,042  19,811,532
Book value per common share at period end  $ 12.78  $ 12.15  $ 11.35  $ 10.85  $ 10.53  $ 10.15  $ 9.76  $ 9.46
                 
Performance Ratios (annualized):                
Return on average assets 1.25% 1.27% 1.08% 1.08% 0.91% 1.00% 1.01% 0.98%
Return on average common equity 13.95% 15.20% 13.52% 13.80% 13.40% 12.55% 10.16% 10.49%
Net interest margin 4.31% 4.44% 4.39% 4.11% 3.65% 3.98% 4.32% 4.23%
Efficiency ratio (1) 49.82% 50.07% 52.28% 53.83% 56.97% 54.43% 55.13% 58.57%
                 
Other Ratios:                
Allowance for credit losses to total loans (2) 1.50% 1.48% 1.47% 1.46% 1.44% 1.41% 1.41% 1.43%
Nonperforming loans to total loans 1.23% 1.35% 1.42% 1.68% 1.59% 1.55% 1.60% 1.85%
Nonperforming assets to total assets 1.06% 1.25% 1.26% 1.41% 1.27% 1.07% 1.47% 1.68%
Net charge-offs (annualized) to average loans 0.37% 0.36% 0.40% 0.34% 0.34% 0.36% 0.28% 0.30%
Tier 1 leverage ratio 10.44% 10.36% 9.65% 9.33% 8.21% 9.61% 9.07% 9.44%
Tier 1 risk based capital ratio 10.80% 10.73% 10.09% 10.08% 10.33% 10.49% 9.64% 10.03%
Total risk based capital ratio 12.19% 12.21% 11.60% 11.59% 11.84% 12.11% 11.33% 11.75%
                 
Average Balances (in thousands):                
Total assets  $ 3,247,498  $ 3,022,584  $ 2,888,188  $ 2,830,693  $ 3,111,952  $ 2,569,970  $ 2,278,329  $ 2,122,677
Total earning assets  $ 3,203,462  $ 2,977,950  $ 2,844,491  $ 2,784,747  $ 3,071,903  $ 2,531,768  $ 2,220,137  $ 2,063,557
Total loans held for sale  $ 186,122  $ 158,011  $ 95,734  $ 120,098  $ 177,116  $ 35,320  $ 19,419  $ 19,532
Total loans  $ 2,442,418  $ 2,346,046  $ 2,246,644  $ 2,086,511  $ 2,030,986  $ 1,967,214  $ 1,864,722  $ 1,713,854
Total deposits  $ 2,748,567  $ 2,572,022  $ 2,447,985  $ 2,393,413  $ 2,652,707  $ 2,124,274  $ 1,902,837  $ 1,764,373
Total borrowings  $ 137,525  $ 132,955  $ 150,644  $ 153,227  $ 183,632  $ 184,874  $ 153,108  $ 140,456
Total stockholders' equity  $ 343,401  $ 306,072  $ 284,040  $ 274,923  $ 264,833  $ 251,916  $ 214,926  $ 208,833
                 
(1) Computed by dividing noninterest expense by the sum of net interest income and noninterest income.
(2) Excludes loans held for sale.
CONTACT: Michael T. Flynn         301.986.1800

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