Eagle Bancorp, Inc. Announces $15.6 Million In Earnings With A Continuing Trend Of Record Operating Earnings Of $30.2 Million For The Fourth Quarter 2017

BETHESDA, Md., Jan. 17, 2018 (GLOBE NEWSWIRE) -- Eagle Bancorp, Inc. (the "Company") (NASDAQ:EGBN), the parent company of EagleBank, today announced quarterly net income of $15.6 million ($30.2 million on an operating basis) for the three months ended December 31, 2017, a 39% decrease on a net income basis (and a 17% increase on an operating basis) over the $25.7 million net income for the three months ended December 31, 2016. Quarterly income on an operating basis continued a 36 quarter trend of record earnings.

For the fourth quarter and full year 2017, operating earnings exclude one time charges to reduce the carrying value of deferred tax assets by $14.6 million, required as a result of the reduction in corporate income tax rates to 21% in the Tax Cuts and Jobs act of 2017 ("Tax Reform"). Tax Reform was enacted in late December and is further discussed below. Where appropriate, parenthetical references refer to operating earnings, which the Company believes are more relevant comparisons to prior period results of operations. Reconciliations of GAAP earnings to operating earnings are contained in the tables that follow.

Net income for the three months ended December 31, 2017 was $0.46 per basic and $0.45 per diluted common share ($0.88 per basic and diluted common share on an operating basis), as compared to $0.76 per basic common share and $0.75 per diluted common share for the same period in 2016.

For the year ended December 31, 2017, the Company's net income was $100.2 million ($114.8 million on an operating basis), a 3% increase (18% increase on an operating basis) over the $97.7 million for the year ended December 31, 2016.

Net income was $2.94 per basic common share and $2.92 per diluted common share for the year ended December 31, 2017 ($3.36 per basic common share and $3.35 per diluted common share on an operating basis), as compared to $2.91 per basic common share and $2.86 per diluted common share for 2016.

"We are very pleased to report a continued trend of balanced and consistently strong financial performance," noted Ronald D. Paul, Chairman and Chief Executive Officer of Eagle Bancorp, Inc. "Our net income in the fourth quarter (excluding the adjustment reflecting the impact of Tax Reform) represents 36 consecutive quarters of increasing operating earnings dating back to the first quarter of 2009. This strong financial performance has resulted from a combination of steady average balance sheet growth and related revenue growth, coupled with a strong net interest margin. Additionally, we have sustained very solid asset quality over an extended period along with favorable operating leverage." Loan balances increased 5% in the fourth quarter while deposit balances decreased by 1% from September 30, 2017. Mr. Paul added, "While we experienced declines in deposit balances late in 2017, we consider average balances more indicative of our growth performance, since maintaining favorable averages translates to improved revenue. During the fourth quarter of 2017, average deposits increased 5% over the third quarter and average loans increased 4%. Average growth in our balance sheet combined with a continuing favorable net interest margin contributed to revenue growth increases of 15% in the fourth quarter 2017 over the fourth quarter of 2016 and by 8% over the third quarter of 2017. For the full year 2017 over 2016, revenue growth was 10%. The net interest margin in the fourth quarter was stable at 4.13% and favorable as compared to peer banking companies. The loan pipeline remains strong, and the yield on the loan portfolio in the fourth quarter was 2 basis points higher at 5.21% versus 5.19% for the third quarter, as the Company's loan portfolio yield continues to benefit from both higher general market interest rates and disciplined loan pricing. Importantly, our credit quality remained very strong in the fourth quarter as the level of nonperforming assets was just 0.19% of total assets at December 31, 2017. Mr. Paul added, "the Company's operating efficiency, another key driver of financial performance, improved even further in the fourth quarter from  a strong position. Noninterest expense  in the fourth quarter of 2017 was less than 1% over the same period in 2016 while total revenue increased by 15% resulting in a continued favorable efficiency ratio." For the fourth quarter in 2017, the efficiency ratio was 35.12%, as compared to 37.49% in the third quarter of 2017 and 40.22% for the fourth quarter of 2016. Mr. Paul added, "The Company remains committed to cost management measures and strong productivity."

Pre-tax, pre-provision income was $55.1 million for the fourth quarter of 2017 a 24% increase over $44.3 million for the fourth quarter of 2016 and a 12% increase over the $49.2 million for the third quarter of 2017.

The annualized return on average assets ("ROAA") was 0.82% (1.60% on an operating basis) for the fourth quarter of 2017 and 1.41% (1.62% on an operating basis) for the twelve months ended December 31, 2017. The annualized return on average common equity ("ROACE") was 6.49% (12.57% on an operating basis) for the fourth quarter of 2017 and 11.06% (12.67% on an operating basis) for the year ended December 31, 2017.

For the full year 2017, loans grew 13% and averaged 11% higher. For the full year 2017, deposits increased 2% and averaged 8% higher. For the full year 2017, total revenue increased by 10% while total noninterest expenses increased 3%.

Pre-tax, pre-provision income was $194.7 million for the full year 2017 as compared to $170.4 million for the full year 2016, a 14% increase.

For the fourth quarter of 2017, the net interest margin was 4.13%, as compared to 4.14% for the third quarter of 2017 and 3.95% for the fourth quarter of 2016. The average liquidity position was higher in the fourth quarter due to higher average deposit growth than loan growth and contributed to the 1 basis point decline in the net interest margin quarter over quarter.

For the full year of 2017, the net interest margin was 4.15% as compared to 4.16% for the year ended December 31, 2016. Higher short and intermediate term market interest rates during 2017 resulted in higher yields on loans and investments and higher funding costs. These interest rate moves also validated the Company's strategy of balanced interest rate risk management. Mr. Paul noted, "In the current environment, the Company has continued its emphasis on disciplined pricing for both new loans and funding sources, which has resulted in the Company maintaining a superior net interest margin."

Asset quality measures improved further in the fourth quarter of 2017 from an already solid position. At December 31, 2017, the Company's nonperforming loans amounted to $13.2 million (0.21% of total loans) as compared to $16.6 million (0.27% of total loans) at September 30, 2017 and $17.9 million (0.31% of total loans) at December 31, 2016. Nonperforming assets amounted to $14.6 million (0.19% of total assets) at December 31, 2017 compared to $18.0 million (0.24% of total assets) at September 30, 2017 and $20.6 million (0.30% of total assets) at December 31, 2016. For the year of 2017, the Company recorded net charge-offs of $3.3 million (0.06% of average loans), as compared to net charge-offs of $4.9 million (0.09% of average loans) for the year of 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 December 31, 2017 allowance for credit losses, at 1.01% of total loans (excluding loans held for sale), is adequate to absorb potential credit losses within the loan portfolio as of the end of the year. The allowance for credit losses was 1.03% of total loans at September 30, 2017 and 1.04% at December 31, 2016. The allowance for credit losses represented 489% of nonperforming loans at December 31, 2017.

Total assets at December 31, 2017 were $7.48 billion, a 1% increase as compared to $7.39 billion at September 30, 2017, and a 9% increase as compared to $6.89 billion at December 31, 2016. Total loans (excluding loans held for sale) were $6.41 billion at December 31, 2017, a 5% increase as compared to $6.08 billion at September 30, 2017, and a 13% increase as compared to $5.68 billion at December 31, 2016. Loans held for sale amounted to $25.1 million at December 31, 2017 as compared to $26.0 million at September 30, 2017, a 3% decrease, and $51.6 million at December 31, 2016, a 51% decrease. The investment portfolio totaled $589.3 million at December 31, 2017, a 6% increase from the $556.0 million balance at September 30, 2017. As compared to December 31, 2016, the investment portfolio at December 31, 2017 increased by $51.2 million or 10%.

Total deposits at December 31, 2017 were $5.85 billion, compared to deposits of $5.91 billion at September 30, 2017, a 1% decrease, and deposits of $5.72 billion at December 31, 2016, a 2% increase. Total borrowed funds (excluding customer repurchase agreements) were $541.9 million at December 31, 2017, $416.8 million at September 30, 2017 and $216.5 million at December 31, 2016.

Total shareholders' equity at December 31, 2017 increased 2%, to $950.4 million, compared to $934.0 million at September 30, 2017, and increased 13%, from $842.8 million at December 31, 2016. Growth in retained earnings has enhanced the Company's capital position well in excess of regulatory requirements for well capitalized status. The total risk based capital ratio was 15.02% at December 31, 2017, as compared to 15.30% at September 30, 2017, and 14.89% at December 31, 2016. In addition, the tangible common equity ratio was 11.45% at December 31, 2017, compared to 11.35% at September 30, 2017 and 10.84% at December 31, 2016.

Referring to the impact of the new corporate income tax law as highlighted above; while the Company's earnings beginning in 2018 will benefit from the lower corporate income tax marginal rates in the new legislation (The Tax Cuts and Jobs Act), companies are required to revalue their deferred tax positions at December 31, 2017 at the lower federal income tax rates. Since the new law was enacted on December 22, 2017, this revaluation is accounted for in the fourth quarter of 2017 through adjustments to Income tax expense on the Consolidated Statements of Income. The Company's net deferred tax asset position revaluation is attributable primarily to the timing difference created by the allowance for loan losses being  deductible at the lower U.S. corporate income tax rate beginning in 2018, as opposed to the higher rates in effect through December 31, 2017.

This adjustment increased Income tax expense for the fourth quarter of 2017 and full year 2017 by $14.6 million ($0.42 per basic and $0.43 per diluted share). As a result of reduced rates, the Company expects to incur substantially reduced income tax expense in future periods. Excluding the discrete adjustment for deferred tax assets, the effective tax rate in the fourth quarter of 2017 was 40.8%. The higher effective rate was due to the annual reconciliation of tax accounts following completion and filing of the 2016 income tax returns.    

Analysis of the three months ended December 31, 2017 compared to December 31, 2016

For the three months ended December 31, 2017, the Company reported an annualized ROAA of 0.82% (1.60% on an operating basis) as compared to 1.46% for the three months ended December 31, 2016. The annualized ROACE for the three months ended December 31, 2017 was 6.49% (12.57% on an operating basis), as compared to 12.26% for the three months ended December 31, 2016. 

Net interest income increased 12% for the three months ended December 31, 2017 over the same period in 2016 ($75.4 million versus $67.0 million), resulting from growth in average earning assets of 7% and an 18 basis point expansion of the net interest margin. The net interest margin was 4.13% for the three months ended December 31, 2017, as compared to 3.95% for the three months ended December 31, 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 to a 5.21% yield for the fourth quarter of 2017 has been a significant factor in its overall profitability.

The provision for credit losses was $4.1 million for the three months ended December 31, 2017 as compared to $2.1 million for the three months ended December 31, 2016. The higher provisioning in the fourth quarter of 2017, as compared to the fourth quarter of 2016, is primarily due to higher loan growth ($327.3 million vs. $196.0 million) and higher net charge-offs. Net charge-offs of $2.3 million in the fourth quarter of 2017 represented an annualized 0.15% of average loans, excluding loans held for sale, as compared to a net recovery of $97 thousand, or an annualized 0.01% of average loans, excluding loans held for sale, in the fourth quarter of 2016. Net charge-offs in the fourth quarter of 2017 were attributable primarily to net charge-offs in construction - commercial and residential ($2.1 million).

Noninterest income for the three months ended December 31, 2017 increased to $9.5 million from $7.0 million for the three months ended December 31, 2016, due substantially to a $1.2 million nonrecurring adjustment to a tax credit investment resulting from the reversal of excess write downs in prior years. The FHA business unit generated  income of $948 thousand on the origination, securitization, servicing and sale of FHA Multifamily-Backed GNMA securities in the fourth quarter of 2017. The residential mortgage unit had  lower sales  and  resulting gains on the sale of these loans in the fourth quarter of 2017 (gains of $2.3 million for the fourth quarter of 2017 versus $3.1 million for the same period in 2016). Residential mortgage loans closed were $136 million for the fourth quarter in 2017 versus $241 million for the fourth quarter of 2016. There was no income related to FHA Multifamily-Backed GNMA securities in the fourth quarter of 2016. The SBA business unit generated  $893 thousand in revenue during the fourth quarter of 2017 compared to $356 thousand for the same period in 2016 from sales of the guaranteed portion on SBA loans. There were no gains or losses on investment transactions in the fourth quarter of 2017 as compared to a modest gain of $71 thousand in the fourth quarter of 2016.      

The efficiency ratio, which measures the ratio of noninterest expense to total revenue, was 35.12% for the fourth quarter of 2017, as compared to 40.22% for the fourth quarter of 2016. Noninterest expenses totaled $29.8 million for the three months ended December 31, 2017, as compared to $29.8 million for the three months ended December 31, 2016. Salaries and employee benefits expenses decreased  $1.2 million in the fourth quarter of 2017 as compared to  the fourth quarter of 2016, due to lower stock based and incentive compensation accruals and lower health care costs, partially offset by higher salaries.  Premises and equipment expenses increased by $320 thousand primarily due to rent and other occupancy cost increases as well as cost increases associated with the expansion of our IT infrastructure. Marketing and advertising expenses increased $278 thousand primarily due to costs associated with digital and print advertising and sponsorships. Data processing costs increased by $132 thousand primarily due to increased vendor fees. Legal, accounting, and professional fees increased by $686 thousand due substantially to consulting services, a portion of which relates to recent short-sale stock activity.

The effective tax rate was substantially higher (69.5%) for the fourth quarter 2017 as compared to 39.0% for the same period in 2016 due primarily to tax rate changes earlier discussed ($14.6 million deferred tax asset adjustment through tax expense). Excluding this charge, the effective tax rate for the fourth quarter was 40.8%, elevated from prior quarters due to annual tax account reconciliation as earlier discussed.

Analysis of the year ended December 31, 2017 compared to December 31, 2016

For the year ended December 31, 2017, the Company reported an annualized ROAA of 1.41% (1.62% on an operating basis) as compared to 1.52% for the year ended December 31, 2016. The annualized ROACE for the year ended December 31, 2017 was 11.06% (12.67% on an operating basis), as compared to 12.27% for the year ended December 31, 2016.

Net interest income increased 10% for the year ended December 31, 2017 over the same period in 2016 ($283.9 million versus $258.2 million), resulting from growth in average earning assets of 10%. The net interest margin was 4.15% for the year ended December 31, 2017 as compared to 4.16% 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 5.17% for the full year of 2017 has been a significant factor in its overall profitability. Additionally, the percentage of average noninterest bearing deposits to total deposits was 33% for the full year of 2017 versus 30% for the same period in 2016.

The provision for credit losses was $9.0 million for the year ended December 31, 2017 as compared to $11.3 million for the year ended December 31, 2016. The lower provisioning during 2017, as compared to 2016, is due to lower net-charge-offs. Net charge-offs of $3.3 million during 2017 represented an annualized 0.06% of average loans, excluding loans held for sale, as compared to $4.9 million or an annualized 0.09% of average loans, excluding loans held for sale, in 2016. Net charge-offs during 2017 were attributable primarily to construction - commercial and residential ($1.7 million) and commercial real estate loans ($1.4 million).

Noninterest income for the year ended December 31, 2017 was $29.4 million as compared to $27.3 million for the year ended December 31, 2016, an 8% increase. This increase was primarily due to revenue associated with the origination, securitization, servicing, and sale of FHA Multifamily-Backed GNMA securities of $2.5 million together with a $1.2 million nonrecurring adjustment to a tax credit investment balance resulting from the reversal of excess write downs in prior years. These increases were partially offset by fewer sales and related gain on sales of both SBA loans ($808 thousand) and residential mortgage loans ($2.0 million). Noninterest income was $28.8 million for the year ended December 31, 2017, as compared to $26.1 million for the same period in 2016, excluding gains on sales of investment securities, an 11% increase.

Noninterest expenses totaled $118.6 million for the year ended December 31, 2017, as compared to $115.0 million for the year ended December 31, 2016, a 3% increase. Cost increases for salaries and benefits were modest due to new hires and merit increases, which were effectively offset by decreases in employee benefit costs due to the prior year acceleration of restricted stock awards, lower incentive compensation accruals and lower health care costs. Marketing and advertising increased by $600 thousand due primarily to increased digital and print advertising spend. Data processing increased by $473 thousand due primarily to increased vendor fees associated with higher volumes and rates. Legal, accounting and professional fees increased by $1.4 million primarily due to consulting services and enhanced IT risk management. Other expenses increased $614 thousand  due to numerous factors. For 2017, the efficiency ratio was 37.84% as compared to 40.29% for the same period in 2016.

The financial information which follows provides more detail on the Company's financial performance for the three and twelve months ended December 31, 2017 as compared to the three and twelve months ended December 31, 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 fourth quarter and year end 2017 financial results on Thursday, January 18, 2018 at 10:00 a.m. eastern savings time. The public is invited to listen to this conference call by dialing 1.877.303.6220, conference ID Code is 8159837, 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 1, 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, 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 December 31,   Twelve Months Ended December 31,  
    2017       2016       2017       2016    
Income Statements:                
Total interest income $   86,526     $   75,795     $   324,034     $   285,805    
Total interest expense     11,167         8,771         40,147         27,640    
Net interest income     75,359         67,024         283,887         258,165    
Provision for credit losses     4,087         2,112         8,971         11,331    
Net interest income after provision for credit losses     71,272         64,912         274,916         246,834    
Noninterest income (before investment gains)     9,496         6,943         28,831         26,090    
Gain on sale of investment securities     -          71         542         1,194    
Total noninterest income     9,496         7,014         29,373         27,284    
Total noninterest expense      29,803         29,780         118,552         115,016    
Income before income tax expense     50,965         42,146         185,737         159,102    
Income tax expense     35,396         16,429         85,505         61,395    
Net income $   15,569     $   25,717     $   100,232     $   97,707    
                 
Per Share Data:                
Earnings per weighted average common share, basic $   0.46     $   0.76     $   2.94     $   2.91    
Earnings per weighted average common share, diluted $   0.45     $   0.75     $   2.92     $   2.86    
Weighted average common shares outstanding, basic      34,179,793         33,650,963         34,138,536         33,587,254    
Weighted average common shares outstanding, diluted      34,334,873         34,233,940         34,320,639         34,181,616    
Actual shares outstanding at period end     34,185,163         34,023,850         34,185,163         34,023,850    
Book value per common share at period end  $   27.80     $   24.77     $   27.80     $   24.77    
Tangible book value per common share at period end (1) $   24.67     $   21.61     $   24.67     $   21.61    
                 
Performance Ratios (annualized):                
Return on average assets   0.82 %     1.46 %     1.41 %     1.52 %  
Return on average common equity   6.49 %     12.26 %     11.06 %     12.27 %  
Net interest margin   4.13 %     3.95 %     4.15 %     4.16 %  
Efficiency ratio (2)   35.12 %     40.22 %     37.84 %     40.29 %  
                 
Other Ratios:                
Allowance for credit losses to total loans (3)   1.01 %     1.04 %     1.01 %     1.04 %  
Allowance for credit losses to total nonperforming loans   489.20 %     330.49 %     489.20 %     330.49 %  
Nonperforming loans to total loans (3)   0.21 %     0.31 %     0.21 %     0.31 %  
Nonperforming assets to total assets   0.19 %     0.30 %     0.19 %     0.30 %  
Net charge-offs (annualized) to average loans (3)   0.15 %     -0.01 %     0.06 %     0.09 %  
Common equity to total assets   12.71 %     12.23 %     12.71 %     12.23 %  
Tier 1 capital (to average assets)   11.45 %     10.72 %     11.45 %     10.72 %  
Total capital (to risk weighted assets)   15.02 %     14.89 %     15.02 %     14.89 %  
Common equity tier 1 capital (to risk weighted assets)   11.24 %     10.80 %     11.24 %     10.80 %  
Tangible common equity ratio (1)   11.45 %     10.84 %     11.45 %     10.84 %  
                 
Loan Balances - Period End (in thousands):                
Commercial and Industrial $   1,375,939     $   1,200,728     $   1,375,939     $   1,200,728    
Commercial real estate - owner occupied  $   755,444     $   640,870     $   755,444     $   640,870    
Commercial real estate - income producing $   3,047,095     $   2,509,517     $   3,047,095     $   2,509,517    
1-4 Family mortgage $   104,357     $   152,748     $   104,357     $   152,748    
Construction - commercial and residential $   973,141     $   932,531     $   973,141     $   932,531    
Construction - C&I (owner occupied) $   58,691     $   126,038     $   58,691     $   126,038    
Home equity $   93,264     $   105,096     $   93,264     $   105,096    
Other consumer  $   3,598     $   10,365     $   3,598     $   10,365    
                 
Average Balances (in thousands):                
Total assets $   7,487,740     $   6,984,492     $   7,089,241     $   6,436,774    
Total earning assets $   7,242,994     $   6,754,934     $   6,853,815     $   6,210,603    
Total loans $   6,207,505     $   5,591,790     $   5,939,985     $   5,338,716    
Total deposits $   6,101,727     $   5,796,516     $   5,787,665     $   5,369,261    
Total borrowings $   382,687     $   312,842     $   355,377     $   240,232    
Total shareholders' equity $   951,743     $   834,823     $   906,174     $   796,400    
                 

(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)          
  Year Ended     Year Ended  
  December 31, 2017     December 31, 2016  
Common shareholders' equity $   950,439       $   842,799    
Less: Intangible assets     (106,617 )         (107,419 )  
Tangible common equity $   843,822       $   735,380    
           
Book value per common share $   27.80       $   24.77    
Less: Intangible book value per common share     (3.12 )         (3.16 )  
Tangible book value per common share $   24.68       $   21.61    
           
Total assets $   7,475,925       $   6,890,096    
Less: Intangible assets     (107,212 )         (107,419 )  
Tangible assets $   7,368,713       $   6,782,677    
Tangible common equity ratio   11.45 %       10.84 %  
           

(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.                        
GAAP Reconciliation (Unaudited)                        
(dollars in thousands except per share data)        
  Three Months Ended December 31,   Twelve Months Ended December 31,  
  GAAP       Non-GAAP   GAAP       Non-GAAP  
    2017     Change     2017       2017     Change     2017    
Income Statements:                        
Income tax expense     35,396         (14,588 )       20,808         85,505         (14,588 )       70,917    
Net income $   15,569         14,588     $   30,157     $   100,232         14,588     $   114,820    
                         
Per Share Data:                        
Earnings per weighted average common share, basic $   0.46     $   0.42     $   0.88     $   2.94     $   0.42     $   3.36    
Earnings per weighted average common share, diluted $   0.45     $   0.43     $   0.88     $   2.92     $   0.43     $   3.35    
                         
Performance Ratios (annualized):                        
Return on average assets   0.82 %         1.60 %     1.41 %         1.62 %  
Return on average common equity   6.49 %         12.57 %     11.06 %         12.67 %  
                         
                         
  GAAP       Non-GAAP              
Assets December 31, 2017   Change   December 31, 2017              
Deferred income taxes     28,770         14,588         43,358                
  Total Assets $   7,475,925     $   14,588     $   7,490,513                
                         
Shareholders' Equity                        
Retained earnings      431,544         14,588         446,132                
Total Shareholders' Equity     950,439         14,588         965,027                
Total Liabilities and Shareholders' Equity $   7,475,925         14,588     $   7,490,513                
                         
         
  Three Months Ended December 31,   Twelve Months Ended December 31,  
  GAAP       Non-GAAP   GAAP       Non-GAAP  
Interest Income   2017     Change     2017       2017     Change     2017    
Income Tax Expense     35,396         (14,588 )       20,808         85,505         (14,588 )       70,917    
Net Income   $   15,569     $   14,588     $   30,157     $   100,232     $   14,588     $   114,820    
                         
Earnings Per Common Share                        
Basic $   0.46     $   0.42     $   0.88     $   2.94     $   0.42     $   3.36    
Diluted $   0.45     $   0.43     $   0.88     $   2.92     $   0.43     $   3.35    

           
Eagle Bancorp, Inc.          
Consolidated Balance Sheets (Unaudited)          
(dollars in thousands, except per share data)          
           
Assets December 31, 2017   September 30, 2017   December 31, 2016
Cash and due from banks $   7,445     $   8,246     $   8,076  
Federal funds sold     15,767         8,548         2,397  
Interest bearing deposits with banks and other short-term investments     167,261         432,156         357,690  
Investment securities available for sale, at fair value     589,268         556,026         538,108  
Federal Reserve and Federal Home Loan Bank stock     36,324         30,980         21,600  
Loans held for sale     25,096         25,980         51,629  
Loans      6,411,528         6,084,204         5,677,893  
Less allowance for credit losses     (64,758 )       (62,967 )       (59,074 )
Loans, net     6,346,770         6,021,237         5,618,819  
Premises and equipment, net     20,991         19,546         20,661  
Deferred income taxes     28,770         45,432         48,220  
Bank owned life insurance     60,947         61,238         60,130  
Intangible assets, net     107,212         107,150         107,419  
Other real estate owned     1,394         1,394         2,694  
Other assets     68,680         75,723         52,653  
  Total Assets $   7,475,925     $   7,393,656     $   6,890,096  
           
Liabilities and Shareholders' Equity          
Deposits:          
Noninterest bearing demand $   1,982,912     $   1,843,157     $   1,775,684  
Interest bearing transaction     420,417         429,247         289,122  
Savings and money market     2,621,146         2,818,871         2,902,560  
Time, $100,000 or more     515,682         482,325         464,842  
Other time     313,827         340,352         283,906  
Total deposits     5,853,984         5,913,952         5,716,114  
Customer repurchase agreements     76,561         73,569         68,876  
Other short-term borrowings     325,000         200,000         -   
Long-term borrowings     216,905         216,807         216,514  
Other liabilities     53,036         55,346         45,793  
Total liabilities     6,525,486         6,459,674         6,047,297  
           
Shareholders' Equity          
Common stock, par value $.01 per share; shares authorized 100,000,000, shares          
issued and outstanding 34,185,163, 34,174,009, and 34,023,850, respectively     340         340         338  
Additional paid in capital     520,304         518,616         513,531  
Retained earnings      431,544         415,975         331,311  
Accumulated other comprehensive loss      (1,749 )       (949 )       (2,381 )
Total Shareholders' Equity     950,439         933,982         842,799  
Total Liabilities and Shareholders' Equity $   7,475,925     $   7,393,656     $   6,890,096  
          `

Eagle Bancorp, Inc.                
Consolidated Statements of Income (Unaudited)                
(dollars in thousands, except per share data)                
         
  Three Months Ended December 31,   Twelve Months Ended December 31,  
Interest Income   2017     2016     2017     2016  
Interest and fees on loans $   81,967   $   72,486   $   308,510   $   274,488  
Interest and dividends on investment securities     3,360       2,508       12,214       9,629  
Interest on balances with other banks and short-term investments     1,174       798       3,258       1,654  
Interest on federal funds sold      25       3       52       34  
Total interest income     86,526       75,795       324,034       285,805  
Interest Expense                
Interest on deposits     7,820       5,736       27,286       19,248  
Interest on customer repurchase agreements      61       52       197       167  
Interest on other short-term borrowings     307       5       748       732  
Interest on long-term borrowings     2,979       2,978       11,916       7,493  
Total interest expense     11,167       8,771       40,147       27,640  
Net Interest Income       75,359       67,024       283,887       258,165  
Provision for Credit Losses     4,087       2,112       8,971       11,331  
Net Interest Income After Provision For Credit Losses     71,272       64,912       274,916       246,834  
                 
Noninterest Income                
Service charges on deposits     1,723       1,518       6,364       5,821  
Gain on sale of loans     2,536       3,099       9,276       11,564  
Gain on sale of investment securities     -        71       542       1,194  
Increase in the cash surrender value of  bank owned life insurance      358       383       1,466       1,554  
Other income     4,879       1,943       11,725       7,151  
Total noninterest income     9,496       7,014       29,373       27,284  
Noninterest Expense                
Salaries and employee benefits     16,678       17,853       67,129       67,010  
Premises and equipment expenses     4,019       3,699       15,632       15,118  
Marketing and advertising     1,222       944       4,095       3,495  
Data processing     2,163       2,031       8,220       7,747  
Legal, accounting and professional fees     1,514       828       5,053       3,673  
FDIC insurance     491       525       2,554       2,718  
Other expenses     3,716       3,900       15,869       15,255  
Total noninterest expense   29,803     29,780     118,552     115,016  
Income Before Income Tax Expense     50,965       42,146       185,737       159,102  
Income Tax Expense     35,396       16,429       85,505       61,395  
Net Income   $   15,569   $   25,717   $   100,232   $   97,707  
                 
Earnings Per Common Share                
Basic $   0.46   $   0.76   $   2.94   $   2.91  
Diluted $   0.45   $   0.75   $   2.92   $   2.86  
                 

Eagle Bancorp, Inc.
Consolidated Average Balances, Interest Yields And Rates (Unaudited)
(dollars in thousands)
               
  Three Months Ended December 31,
    2017       2016  
  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 $   381,339 $   1,175 1.22 %   $   601,356 $   798 0.53 %
Loans held for sale (1)     38,449     379 3.94 %       70,874     615 3.47 %
Loans (1) (2)       6,207,505     81,588 5.21 %       5,591,790     71,871 5.11 %
Investment securities available for sale (2)     603,550     3,360 2.21 %       487,730     2,508 2.05 %
Federal funds sold      12,151     25 0.82 %       3,184     3 0.37 %
  Total interest earning assets     7,242,994     86,527 4.74 %       6,754,934     75,795 4.46 %
               
Total noninterest earning assets     308,138           287,540    
Less: allowance for credit losses     63,392           57,982    
  Total noninterest earning assets     244,746           229,558    
  TOTAL ASSETS $   7,487,740       $   6,984,492    
               
LIABILITIES AND SHAREHOLDERS' EQUITY              
Interest bearing liabilities:              
Interest bearing transaction $   380,137 $   456 0.48 %   $   303,994 $   201 0.26 %
Savings and money market      2,923,750     5,113 0.69 %       2,941,919     3,715 0.50 %
Time deposits      811,484     2,251 1.10 %       786,782     1,820 0.92 %
  Total interest bearing deposits     4,115,371     7,820 0.75 %       4,032,695     5,736 0.57 %
Customer repurchase agreements     80,758     61 0.30 %       95,283     52 0.22 %
Other short-term borrowings     85,057     307 1.41 %       1,090     5 1.79 %
Long-term borrowings     216,872     2,979 5.38 %       216,469     2,978 5.38 %
  Total interest bearing liabilities     4,498,058     11,167 0.98 %       4,345,537     8,771 0.80 %
               
Noninterest bearing liabilities:              
Noninterest bearing demand      1,986,356           1,763,821    
Other liabilities     51,583           40,311    
  Total noninterest bearing liabilities     2,037,939           1,804,132    
               
Shareholders' Equity     951,743           834,823    
  TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $   7,487,740       $   6,984,492    
               
Net interest income   $   75,360       $   67,024  
Net interest spread     3.76 %       3.66 %
Net interest margin     4.13 %       3.95 %
Cost of funds     0.61 %       0.51 %
               
(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 $4.4 million
      for the three months ended December 31, 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)
               
  Years Ended December 31,
    2017       2016  
  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 $   313,296 $   3,258 1.04 %   $   341,574 $   1,654 0.45 %
Loans held for sale (1)     35,813     1,400 3.91 %       53,590     1,903 3.59 %
Loans (1) (2)       5,939,985     307,111 5.17 %       5,338,716     272,585 5.10 %
Investment securities available for sale (1)     557,049     12,214 2.19 %       468,773     9,629 2.06 %
Federal funds sold      7,672     52 0.68 %       7,950     34 0.43 %
  Total interest earning assets     6,853,815     324,035 4.73 %       6,210,603     285,805 4.65 %
               
Total noninterest earning assets     296,592           282,060    
Less: allowance for credit losses     61,166           55,889    
  Total noninterest earning assets     235,426           226,171    
  TOTAL ASSETS $   7,089,241       $   6,436,774    
               
LIABILITIES AND SHAREHOLDERS' EQUITY              
Interest bearing liabilities:              
Interest bearing transaction $   369,953 $   1,537 0.42 %   $   251,954 $   646 0.26 %
Savings and money market      2,739,776     17,284 0.63 %       2,728,347     12,038 0.44 %
Time deposits      799,816     8,465 1.06 %       769,801     6,564 0.85 %
  Total interest bearing deposits     3,909,545     27,286 0.70 %       3,750,102     19,248 0.51 %
Customer repurchase agreements     73,237     197 0.27 %       77,833     167 0.21 %
Other short-term borrowings     65,416     748 1.13 %       29,376     732 2.45 %
Long-term borrowings     216,724     11,916 5.42 %       133,023     7,493 5.54 %
  Total interest bearing liabilities     4,264,922     40,147 0.94 %       3,990,334     27,640 0.69 %
               
Noninterest bearing liabilities:              
Noninterest bearing demand      1,878,120           1,619,159    
Other liabilities     40,025           30,881    
  Total noninterest bearing liabilities        1,918,145           1,650,040    
               
Shareholders' equity     906,174           796,400    
  TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $   7,089,241       $   6,436,774    
               
Net interest income   $   283,888       $   258,165  
Net interest spread     3.79 %       3.91 %
Net interest margin     4.15 %       4.16 %
Cost of funds     0.58 %       0.44 %
               
(1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $18.1 million and $16.1 million
      for the years ended December 31, 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  
  December 31,   September 30,   June 30,   March 31,   December 31,   September 30,   June 30,   March 31,
Income Statements:   2017       2017       2017       2017       2016       2016       2016       2016  
Total interest income $   86,526     $   82,370     $   79,344     $   75,794     $   75,795     $   72,431     $   69,772     $   67,807  
Total interest expense     11,167         10,434         9,646         8,900         8,771         7,703         5,950         5,217  
Net interest income     75,359         71,936         69,698         66,894         67,024         64,728         63,822         62,590  
Provision for credit losses     4,087         1,921         1,566         1,397         2,112         2,288         3,888         3,043  
Net interest income after provision for credit losses     71,272         70,015         68,132         65,497         64,912         62,440         59,934         59,547  
  Noninterest income (before investment gains)     9,496         6,773         6,997         5,565         6,943         6,404         7,077         5,666  
  Gain on sale of investment securities     -          11         26         505         71         1         498         624  
Total noninterest income     9,496         6,784         7,023         6,070         7,014         6,405         7,575         6,290  
  Salaries and employee benefits     16,678         16,905         16,869         16,677         17,853         17,130         15,908         16,119  
  Premises and equipment      4,019         3,846         3,920         3,847         3,699         3,786         3,807         3,826  
  Marketing and advertising     1,222         732         1,247         894         944         857         920         774  
  Merger expenses     -          -          -          -          -          -          -          -   
  Other expenses     7,884         8,033         7,965         7,814         7,284         7,065         7,660         7,383  
Total noninterest expense     29,803         29,516         30,001         29,232         29,780         28,838         28,295         28,102  
Income before income tax expense     50,965         47,283         45,154         42,335         42,146         40,007         39,214         37,735  
Income tax expense     35,396         17,409         17,382         15,318         16,429         15,484         15,069         14,413  
Net income     15,569         29,874         27,772         27,017         25,717         24,523         24,145         23,322  
Preferred stock dividends      -          -          -          -          -          -          -          -   
Net income available to common shareholders $   15,569     $   29,874     $   27,772     $   27,017     $   25,717     $   24,523     $   24,145     $   23,322  
                               
                               
Per Share Data:                              
Earnings per weighted average common share, basic $   0.46     $   0.87     $   0.81     $   0.79     $   0.76     $   0.73     $   0.72     $   0.70  
Earnings per weighted average common share, diluted  $   0.45     $   0.87     $   0.81     $   0.79     $   0.75     $   0.72     $   0.71     $   0.68  
Weighted average common shares outstanding, basic   34,179,793       34,173,893       34,128,598       34,069,528       33,650,963       33,590,183       33,588,141       33,518,998  
Weighted average common shares outstanding, diluted   34,334,873       34,338,442       34,324,120       34,284,316       34,233,940       34,187,171       34,183,209       34,104,237  
Actual shares outstanding at period end   34,185,163       34,174,009       34,169,924       34,110,056       34,023,850       33,590,880       33,584,898       33,581,599  
Book value per common share at period end  $   27.80     $   27.33     $   26.42     $   25.59     $   24.77     $   24.28     $   23.48     $   22.71  
Tangible book value per common share at period end (1) $   24.67     $   24.19     $   23.28     $   22.45     $   21.61     $   21.08     $   20.27     $   19.48  
                               
Performance Ratios (annualized):                              
Return on average assets   0.82 %     1.66 %     1.60 %     1.62 %     1.46 %     1.50 %     1.57 %     1.54 %
Return on average common equity   6.49 %     12.86 %     12.51 %     12.74 %     12.26 %     12.04 %     12.40 %     12.39 %
Net interest margin   4.13 %     4.14 %     4.16 %     4.14 %     3.95 %     4.11 %     4.30 %     4.31 %
Efficiency ratio (2)   35.12 %     37.49 %     39.10 %     40.06 %     40.22 %     40.54 %     39.63 %     40.80 %
                               
Other Ratios:                              
Allowance for credit losses to total loans (3)   1.01 %     1.03 %     1.02 %     1.03 %     1.04 %     1.04 %     1.05 %     1.06 %
Allowance for credit losses to total nonperforming loans   489.20 %     379.11 %     356.00 %     416.91 %     330.49 %     255.29 %     264.44 %     249.03 %
Nonperforming loans to total loans (3)   0.21 %     0.27 %     0.29 %     0.25 %     0.31 %     0.41 %     0.40 %     0.43 %
Nonperforming assets to total assets   0.19 %     0.24 %     0.26 %     0.22 %     0.30 %     0.41 %     0.39 %     0.42 %
Net charge-offs (annualized) to average loans (3)   0.15 %     0.00 %     0.02 %     0.04 %     -0.01 %     0.14 %     0.15 %     0.09 %
Tier 1 capital (to average assets)   11.45 %     11.78 %     11.61 %     11.51 %     10.72 %     11.12 %     11.24 %     11.01 %
Total capital (to risk weighted assets)   15.02 %     15.30 %     15.13 %     14.97 %     14.89 %     15.05 %     12.71 %     12.87 %
Common equity tier 1 capital (to risk weighted assets)   11.24 %     11.40 %     11.18 %     10.97 %     10.80 %     10.83 %     10.74 %     10.83 %
Tangible common equity ratio (1)   11.45 %     11.35 %     11.15 %     10.97 %     10.84 %     10.64 %     10.88 %     10.86 %
                               
Average Balances (in thousands):                              
Total assets $   7,487,740     $   7,128,769     $   6,959,994     $   6,772,164     $   6,984,492     $   6,492,274     $   6,191,164     $   6,072,533  
Total earning assets $   7,242,994     $   6,897,613     $   6,728,055     $   6,538,377     $   6,754,935     $   6,266,311     $   5,968,488     $   5,846,081  
Total loans $   6,207,505     $   5,946,411     $   5,895,174     $   5,705,261     $   5,591,790     $   5,422,677     $   5,266,305     $   5,070,386  
Total deposits $   6,101,727     $   5,827,953     $   5,660,119     $   5,554,402     $   5,796,516     $   5,353,834     $   5,178,501     $   5,143,670  
Total borrowings $   382,687     $   344,959     $   375,124     $   318,143     $   312,842     $   300,083     $   207,221     $   139,324  
Total shareholders' equity $   951,743     $   921,493     $   890,498     $   859,779     $   834,823     $   809,973     $   783,318     $   756,916  
                               
(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. Flynn301.986.1800

Primary Logo

More from Press Releases

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

21st Century Fox Scoops Up Local News Stations

21st Century Fox Scoops Up Local News Stations

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Three-Part FREE Webinar Series

Three-Part FREE Webinar Series

March 24 Full-Day Course Offering: Professional Approach to Trading SPX

March 24 Full-Day Course Offering: Professional Approach to Trading SPX