BETHESDA, Md., July 18 /PRNewswire-FirstCall/ -- Eagle Bancorp, Inc. (the
'Company') (Nasdaq: EGBN), the parent company of EagleBank, today announced
net income of $1.9 million ($0.19 per basic share and per diluted share) for
the three months ended June 30, 2008, compared to $2.0 million ($0.21 per
basic share and $0.20 per diluted share) for the three months ended June 30,
2007.
For the six months ended June 30, 2008, the Company earned $3.5 million
($0.36 per basic share and $0.35 per diluted share), as compared to $3.7
million ($0.38 per basic share and $0.37 cents per diluted share) for 2007, a
decline of 4%.
'At a time of substantial stress in our financial markets and instability
in many banks, we are extremely pleased to report consistent net income and
continued asset growth for Eagle Bancorp, Inc. for the second quarter of 2008.
Both Eagle Bancorp and EagleBank remain well capitalized,' noted Ronald D.
Paul, Chairman and CEO of Eagle Bancorp, Inc. 'In spite of a continuing
difficult interest rate environment, wherein the Federal Reserve has lowered
interest rates sharply to combat a weakening economic situation, the Company
improved an already strong net interest margin and sustained a long-term trend
of growth in the balance sheet' added Mr. Paul. Growth in average deposits,
other funding sources and loans, along with a slight expansion of the net
interest margin were the major drivers of the increase in net interest income
for the three months ended June 30, 2008 as compared to the same three month
period in 2007. Additionally, the level of Eagle Bancorp's non-performing
loans was stable at June 30, 2008, as compared to March 31, 2008.
For the three months ended June 30, 2008, the Company reported an
annualized return on average assets (ROAA) of 0.84% as compared to 0.77% for
the three months ended March 31, 2008 and 1.02% for the three months ended
June 30, 2007; while the annualized return on average equity (ROAE) for the
most recent quarter was 8.81%, as compared to 7.98% for the three months ended
March 31, 2008 and 10.50% for the three months ended June 30, 2007. The most
significant factors affecting these ratios have been changes in the net
interest margin and the contribution to the provision for credit losses
primarily as a result of loan growth.
Both lending and deposit activities showed growth for the three and six
months ended June 30, 2008 as compared to the same periods in 2007. For the
three months ended June 30, 2008, average loans increased 19% and for the six
months ended June 30, 2008, average loans increased 17%. For the three months
ended June 30, 2008, average deposits increased 9% and for the six months
ended June 30, 2008, average deposits increased 8%.
Net interest income increased 13% for the three months ended June 30, 2008
over 2007, as the effect of favorable balance sheet growth was partially
offset by a decline (11 basis points) in the net interest margin. For the
three months ended June 30, 2008, the net interest margin was 4.34% as
compared to 4.45% for the three months ended June 30, 2007. The Company's net
interest margin remains favorable to peer banking companies. The Company's net
interest margin for the second quarter of 2008 improved by 15 basis points (to
4.34%) over the net interest margin for the first quarter of 2008 of 4.19%, as
the cost of funds was managed aggressively.
The provision for credit losses was $814 thousand for the three months
ended June 30, 2008 as compared to $36 thousand for the three months ended
June 30, 2007. The higher provisioning in the second quarter of 2008 as
compared to the second quarter of 2007 is primarily attributable to higher
levels of loan growth in the second quarter of 2008 versus 2007, increases in
specific reserves for problem and potential problem loans, and higher levels
of net charge-offs in the second quarter of 2008 as compared to the second
quarter of 2007. The provision for credit losses was $1.5 million for the
first six months of 2008 as compared to $339 thousand in 2007. The higher
provisioning in the first six months of 2008 as compared to 2007 is
attributable to substantially higher levels of loan growth and to increases in
reserve allocations on classified credits.
At June 30, 2008 the allowance for credit losses represented 1.15% of
loans outstanding, unchanged from the allowance percentage at March 31, 2008.
The 1.15% allowance represents an increase as compared to 1.12% at December
31, 2007 and 1.11% at June 30, 2007. The higher allowance percentage at June
30, 2008 as compared to December 31, 2007 and June 30, 2007 relates primarily
to changes in the portfolio mix and higher reserve levels for problem loans
and potential problem loans.
For the three months ended June 30, 2008, the Company recorded net charge-
offs of $393 thousand as compared to $11 thousand of net charge-offs for the
three months ended June 30, 2007. Net charge-offs in the second quarter of
2008 were attributable to charge-offs in consumer loans (38% of total), the
un-guaranteed portion of SBA Loans (32% of total), and non-real estate
commercial business loans (30% of total). For the six months ended June 30,
2008 net charge-offs totaled $418 thousand versus $424 thousand for the six
months ended June 30, 2007. Net charge-offs in the six months ended June 30,
2008 were attributable to charge-offs in consumer loans (39 % of total), the
un-guaranteed portion of SBA Loans (32% of total), and non-real estate
commercial business loans (29% of total).
The ratio of non-performing loans to total loans improved slightly from
1.54% ($11.7 million) at March 31, 2008 to 1.45% ($11.6 million) at June 30,
2008, a decline of $100 thousand. However, the ratio was elevated as compared
to December 31, 2007 of 0.74% ($5.3 million) and June 30, 2007 of 0.22% ($1.5
million). The increase in nonperforming loans at June 30, 2008 as compared
December 31, 2007 relates primarily to two commercial real estate loan
relationships which have experienced delays and/or cost overruns in the
construction and development processes. Management believes that the Company
is adequately reserved for these non performing commercial real estate-secured
loans.
Noninterest income for the three months ended June 30, 2008 decreased to
$970 thousand from $1.2 million for the three months ended June 30, 2007, a
19% decline. This decline was due to a lower volume of SBA and residential
mortgage loan sales activity, which activity is subject to significant
quarterly variances and no income from subordinate financing of real estate
projects in 2008 versus $227 thousand in the prior year. Income from
subordinated financing activities is subject to wide variances, as it is based
on the sales progress of a limited number of development projects.
Noninterest expenses were $6.5 million for the three months ended June 30,
2008, as compared to $6.2 million for the three months ended June 30, 2007, a
5% increase. The primary reasons for this increase were merit increases and
related personnel costs, increased broker fees, higher internet and license
agreement fees and increased legal, accounting and professional fees. The
efficiency ratio, which measures the level of non-interest expense to total
revenue improved to 63.96% for the three months ended June 30, 2008, as
compared to 66.33% for the three months ended June 30, 2007. While the Company
continues to make strategic investments in infrastructure, more attention to
overall cost management is being emphasized.
For the six months ended June 30, 2008, the Company reported an annualized
return on average assets (ROAA) of 0.81% as compared to 0.95% for the first
six months of 2007, while the annualized return on average equity (ROAE) was
8.40%, as compared to 9.88% for the same six month period in 2007. Declines in
these ratios were due to lower net interest margins, which factor is affecting
all financial institutions, and to higher levels of loan loss provisioning.
For the first six months of 2008, net interest income increased 10% over
the same period for 2007. As noted above, average loans increased 17% and
average deposits increased by 8%. The net interest margin was 4.26% as
compared to 4.43% for the first six months in 2007, as the effects of a steep
decline in market interest rates impacted the Company. However, as mentioned
above, the Company believes it has managed this significant decline in market
interest rates well and currently has a favorable net interest margin as
compared to peer banking companies.
Noninterest income for the first six months of 2008 was $1.9 million
compared to $2.2 million in the first six months of 2007, a decrease of 13%.
The decrease was attributed primarily to lower amounts of gains on the sale of
SBA and residential mortgage loans ($279 thousand versus $571 thousand) and no
income from subordinate financing of real estate projects in 2008 versus $227
thousand in the prior year.
Noninterest expenses were $12.7 million for the first six months of 2008,
as compared to $12.3 million for 2007, a modest 4% increase. The primary
reasons for this increase were merit increases, and related personnel cost
increases, increased broker fees, higher internet and license agreement fees
and increased legal, accounting and professional fees. The efficiency ratio
for the first six months of 2008 improved to 64.50% as compared to 66.88% for
the same period in 2007.
At June 30, 2008, total assets were $915.8 million compared to $813.0
million at June 30, 2007, a 13% increase. Total deposits amounted to $698.4
million, at June 30, 2008, a 7% increase over deposits of $650.5 million at
June 30, 2007, while total loans increased to $795.1 million at June 30, 2008,
from $659.2 million at June 30, 2007, a 21% increase. Total borrowed funds,
which include customer repurchase agreements, increased to $127.7 million at
June 30, 2008 from $82.6 million at June 30, 2007, a 55% increase. This
increase in part represents a heavier reliance on borrowed funds to meet loan
growth.
The Company paid a dividend of $0.06 per share for each of the first and
second quarters of 2008 and 2007.
The Summary of Financial Information presented on the following pages
provides more detail of the Company's performance for the six and three months
ended June 30, 2008 as compared to the six and three months ended June 30,
2007, as well as providing eight quarters of trend data. Persons wishing
additional information should refer to the Company's Form 10-K as amended, for
the year ended December 31, 2007 as filed with the Securities and Exchange
Commission (the 'SEC').
The Company is the holding company for EagleBank which commenced
operations in 1998. The Bank is headquartered in Bethesda, Maryland, and
conducts full service commercial banking services through nine offices,
located in Montgomery County, Maryland and Washington, D.C. The Company
focuses on building relationships with businesses, professionals and
individuals in its marketplace.
In December 2007, the Company announced the signing of a definitive
agreement to acquire Fidelity & Trust Financial Corporation, parent of
Fidelity & Trust Bank. At March 31, 2008, Fidelity & Trust Bank had $459
million of assets. Fidelity & Trust Bank operates six locations, with one in
Northern Virginia, three in Montgomery County, Maryland and two in the
District of Columbia. The transaction is subject to regulatory and shareholder
approvals and the satisfaction of other conditions, as set forth in the merger
agreement. The transaction is currently anticipated to be completed in the
third quarter of 2008.
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. 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.
ADDITIONAL INFORMATION ABOUT THE PROPOSED MERGER WITH FIDELITY & TRUST
Eagle Bancorp, Inc. will be filing a proxy statement/prospectus and other
relevant documents concerning the merger with the SEC. The proxy
statement/prospectus will be mailed to the shareholders of Eagle Bancorp and
Fidelity & Trust Financial Corporation. Investors and security holders of
Eagle Bancorp and Fidelity & Trust Financial Corporation are urged to read the
proxy statement/prospectus, the documents incorporated by reference in the
proxy statement/prospectus, the other documents filed with the SEC and the
other relevant materials when they become available because they will contain
important information about Eagle Bancorp, Fidelity & Trust Financial
Corporation and the Merger Agreement and the transactions contemplated by the
Merger Agreement. Investors will be able to obtain these documents free of
charge at the SEC's web site (http://www.sec.gov). In addition, documents
filed with the SEC by Eagle Bancorp, Inc. will be available free of charge
from Eagle Bancorp's Investor Relations at 301/986-1800, or from Eagle
Bancorp's website at www.eaglebankmd.com. The directors, executive officers,
and certain other members of management and employees of Eagle Bancorp and its
subsidiaries are participants in the solicitation of proxies in favor of the
issuance of shares pursuant to the merger from the shareholders of Eagle
Bancorp. Information about the directors and executive officers of Eagle
Bancorp is set forth in Eagle Bancorp's proxy statement for the 2008 annual
meeting of shareholders filed with the SEC on March 31, 2008. Additional
information regarding the interests of such participants will be included in
the proxy statement/prospectus and the other relevant documents filed with the
SEC when they become available.
Eagle Bancorp, Inc.
Statements of Financial Condition
(in thousands)
June 30, December 31, June 30,
2008 2007 2007
(Unaudited) (Audited) (Unaudited)
Assets
Cash and due from banks $18,565 $15,408 $24,899
Interest bearing deposits with banks
and other short term investments 1,391 4,490 4,383
Federal funds sold 63 244 28,146
Investment securities available for
sale, at fair value 79,585 87,117 72,449
Loans held for sale 1,484 2,177 2,854
Loans 795,102 716,677 659,233
Less: Allowance for credit losses (9,154) (8,037) (7,288)
Premises and equipment, net 6,561 6,701 7,158
Accrued interest and other assets 22,203 21,623 21,182
Total Assets $915,800 $846,400 $813,016
Liabilities and Stockholders' Equity
Noninterest bearing deposits $143,335 $142,477 $145,263
Interest bearing transaction 55,017 54,090 52,895
Savings and money market 187,275 177,081 180,415
Time, $100,000 or more 171,127 173,586 155,316
Other time 141,687 83,702 116,603
Total deposits 698,441 630,936 650,492
Customer repurchase agreements and
federal funds purchased 46,129 76,408 40,589
Other borrowings 81,581 52,000 42,000
Other liabilities 5,436 5,890 3,926
Total liabilities 831,587 765,234 737,007
Stockholders' equity 84,213 81,166 76,009
Total Liabilities and Stockholders'
Equity $915,800 $846,400 $813,016
Eagle Bancorp, Inc.
Statements of Income and Highlights
(in thousands, except per share data)
Six Months Ended Three Months Ended
June 30, June 30,
2008 2007 2008 2007
Income Statements (Unaudited)(Unaudited)(Unaudited)(Unaudited)
Total interest income $28,009 $27,843 $13,995 $14,107
Total interest expense 10,167 11,676 4,753 5,909
Net interest income 17,842 16,167 9,242 8,198
Provision for credit losses 1,534 339 814 36
Net interest income after
provision for credit losses 16,308 15,828 8,428 8,162
Noninterest income (before
investment gains) 1,900 2,187 970 1,196
Investment gains 10 7 - -
Total noninterest income 1,910 2,194 970 1,196
Salaries and employee
benefits 7,286 6,806 3,646 3,454
Premises and equipment
expenses 2,183 2,463 1,103 1,255
Marketing and advertising 195 222 114 131
Other expenses 3,076 2,789 1,669 1,391
Total noninterest expense 12,740 12,280 6,532 6,231
Income before income tax
expense 5,478 5,742 2,866 3,127
Income tax expense 1,972 2,082 1,011 1,149
Net income $3,506 $3,660 $1,855 $1,978
Per Share Data:
Earnings per weighted average
share, basic $0.36 $0.38 $0.19 $0.21
Earnings per weighted average
share, diluted $0.35 $0.37 $0.19 $0.20
Weighted average shares
outstanding, basic 9,807,371 9,510,788 9,833,506 9,532,765
Weighted average shares
outstanding, diluted 9,926,334 9,826,739 9,906,151 9,813,537
Actual shares outstanding 9,842,571 9,563,163 9,842,571 9,563,163
Book value per share at period
end $8.56 $7.95 $8.56 $7.95
Dividend per share $0.12 $0.12 $0.06 $0.06
Performance Ratios
(annualized):
Return on average assets 0.81% 0.95% 0.84% 1.02%
Return on average equity 8.40% 9.88% 8.81% 10.50%
Net interest margin 4.26% 4.43% 4.34% 4.45%
Efficiency ratio (1) 64.50% 66.88% 63.96% 66.33%
Other Ratios:
Allowance for credit losses to
total loans 1.15% 1.11% 1.15% 1.11%
Non-performing loans to total
loans 1.45% 0.22% 1.45% 0.22%
Net charge-offs (annualized)
to average loans 0.11% 0.13% 0.20% 0.01%
Average equity to average
assets 9.59% 9.65% 9.51% 9.70%
Tier 1 leverage ratio 9.60% 9.85% 9.60% 9.85%
Total risk based capital ratio 10.80% 11.87% 10.80% 11.87%
Average Balances
(in thousands):
Total assets $875,521 $774,688 $891,012 $778,454
Total earning assets $841,348 $735,531 $857,232 $738,501
Total loans (2) $750,768 $642,001 $770,034 $647,714
Total deposits $669,128 $620,474 $683,151 $624,413
Total borrowings $117,659 $75,758 $118,634 $74,948
Total stockholders' equity $83,954 $74,724 $84,708 $75,549
(1) Computed by dividing noninterest expense by the sum of net interest
income and noninterest income
(2) Includes loans held for sale
Eagle Bancorp, Inc.
Statements of Income and Highlights (Quarterly Trends)
(in thousands, except per share data) (Unaudited)
Three Months Ended
June 30, March 31, Dec. 31, Sept. 30,
Income Statements 2008 2008 2007 2007
Total interest income $13,995 $14,014 $14,879 $14,355
Total interest expense 4,753 5,414 6,036 6,017
Net interest income 9,242 8,600 8,843 8,338
Provision for credit losses 814 720 883 421
Net interest income after
provision for credit losses 8,428 7,880 7,960 7,917
Noninterest income (before
investment gains) 970 930 1,961 1,032
Investment gains (losses) - 10 (1) -
Total noninterest income 970 940 1,960 1,032
Salaries and employee
benefits 3,646 3,640 3,784 3,577
Premises and equipment
expenses 1,103 1,080 1,180 1,186
Marketing and advertising 114 81 109 134
Other expenses 1,669 1,407 1,395 1,276
Total noninterest expense 6,532 6,208 6,468 6,173
Income before income tax
expense 2,866 2,612 3,452 2,776
Income tax expense 1,011 961 1,166 1,021
Net income $1,855 $1,651 $2,286 $1,755
Per Share Data:
Earnings per weighted average
share, basic $0.19 $0.17 $0.24 $0.18
Earnings per weighted average
share, diluted $0.19 $0.17 $0.23 $0.18
Weighted average shares
outstanding, basic 9,833,506 9,781,237 9,689,422 9,580,790
Weighted average shares
outstanding, diluted 9,906,151 9,933,993 9,884,709 9,838,524
Actual shares outstanding 9,842,571 9,790,252 9,721,315 9,584,029
Book value per share at
period end $8.56 $8.53 $8.35 $8.15
Dividend per share $0.06 $0.06 $0.06 $0.06
Performance Ratios
(annualized):
Return on average assets 0.84% 0.77% 1.06% 0.88%
Return on average equity 8.81% 7.98% 11.33% 9.09%
Net interest margin 4.34% 4.19% 4.30% 4.34%
Efficiency ratio (1) 63.96% 65.07% 59.87% 65.88%
Other Ratios:
Allowance for credit losses to
total loans 1.15% 1.15% 1.12% 1.09%
Non-performing loans to total
loans 1.45% 1.54% 0.74% 0.82%
Net charge-offs (annualized)
to average loans 0.20% 0.01% 0.15% 0.18%
Average equity to average
assets 9.51% 9.67% 9.39% 9.69%
Tier 1 leverage ratio 9.60% 9.55% 9.46% 9.78%
Total risk based capital ratio 10.80% 10.95% 11.21% 11.90%
Average Balances
(in thousands):
Total assets $891,012 $860,030 $852,243 $799,382
Total earning assets $857,232 $825,463 $816,187 $761,646
Total loans (2) $770,034 $731,501 $687,030 $665,222
Total deposits $683,151 $655,105 $659,355 $636,573
Total borrowings $118,634 $116,684 $107,697 $80,952
Total stockholders' equity $84,708 $83,200 $80,058 $77,468
Three Months Ended
June 30, March 31, Dec. 31, Sept. 30,
Income Statements 2007 2007 2006 2006
Total interest income $14,107 $13,736 $13,848 $13,033
Total interest expense 5,909 5,767 5,466 4,818
Net interest income 8,198 7,969 8,382 8,215
Provision for credit losses 36 303 327 711
Net interest income after
provision for credit losses 8,162 7,666 8,055 7,504
Noninterest income (before
investment gains) 1,196 991 906 1,287
Investment gains (losses) - 7 39 (71)
Total noninterest income 1,196 998 945 1,216
Salaries and employee
benefits 3,454 3,352 3,177 3,104
Premises and equipment
expenses 1,255 1,208 1,040 1,107
Marketing and advertising 131 91 221 102
Other expenses 1,391 1,398 1,305 1,383
Total noninterest expense 6,231 6,049 5,743 5,696
Income before income tax
expense 3,127 2,615 3,257 3,024
Income tax expense 1,149 933 1,105 1,124
Net income $1,978 $1,682 $2,152 $1,900
Per Share Data:
Earnings per weighted average
share, basic $0.21 $0.18 $0.23 $0.20
Earnings per weighted average
share, diluted $0.20 $0.17 $0.22 $0.19
Weighted average shares
outstanding, basic 9,532,765 9,488,567 9,442,952 9,423,947
Weighted average shares
outstanding, diluted 9,813,537 9,816,711 9,842,928 9,869,514
Actual shares outstanding 9,563,163 9,509,622 9,478,064 9,425,733
Book value per share at
period end $7.95 $7.83 $7.69 $7.49
Dividend per share $0.06 $0.06 $0.06 $0.06
Performance Ratios
(annualized):
Return on average assets 1.02% 0.88% 1.13% 1.05%
Return on average equity 10.50% 9.23% 11.89% 10.84%
Net interest margin 4.45% 4.41% 4.63% 4.81%
Efficiency ratio (1) 66.33% 67.44% 61.57% 60.40%
Other Ratios:
Allowance for credit losses to
total loans 1.11% 1.14% 1.18% 1.19%
Non-performing loans to total
loans 0.22% 0.25% 0.32% 0.34%
Net charge-offs (annualized)
to average loans 0.01% 0.26% 0.00% (0.02%)
Average equity to average
assets 9.70% 9.59% 9.49% 9.69%
Tier 1 leverage ratio 9.85% 9.70% 9.67% 9.89%
Total risk based capital ratio 11.87% 12.00% 11.91% 12.13%
Average Balances
(in thousands):
Total assets $778,454 $770,880 $756,323 $717,481
Total earning assets $738,501 $732,529 $718,751 $678,225
Total loans (2) $647,714 $636,225 $606,934 $581,874
Total deposits $624,413 $616,492 $616,929 $589,597
Total borrowings $74,948 $76,577 $62,711 $53,837
Total stockholders' equity $75,549 $73,890 $71,784 $69,537
(1) Computed by dividing noninterest expense by the sum of net interest
income and noninterest income
(2) Includes loans held for sale
SOURCE Eagle Bancorp, Inc.
