EX-99.1 2 exh_991.htm EXHIBIT 99.1 EdgarFiling

EXHIBIT 99.1

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       
AssetsDecember 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)     
      
AssetsDecember 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 BalanceInterestAverage
Yield/Rate		 Average BalanceInterestAverage
Yield/Rate
ASSETS       
Interest earning assets:       
Interest bearing deposits with other banks and other short-term investments$  381,339$  1,1751.22% $  601,356$  7980.53%
Loans held for sale (1)   38,449   3793.94%    70,874   6153.47%
Loans (1) (2)    6,207,505   81,5885.21%    5,591,790   71,8715.11%
Investment securities available for sale (2)   603,550   3,3602.21%    487,730   2,5082.05%
Federal funds sold    12,151   250.82%    3,184   30.37%
  Total interest earning assets   7,242,994   86,5274.74%    6,754,934   75,7954.46%
        
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$  4560.48% $  303,994$  2010.26%
Savings and money market    2,923,750   5,1130.69%    2,941,919   3,7150.50%
Time deposits    811,484   2,2511.10%    786,782   1,8200.92%
  Total interest bearing deposits   4,115,371   7,8200.75%    4,032,695   5,7360.57%
Customer repurchase agreements   80,758   610.30%    95,283   520.22%
Other short-term borrowings   85,057   3071.41%    1,090   51.79%
Long-term borrowings   216,872   2,9795.38%    216,469   2,9785.38%
  Total interest bearing liabilities   4,498,058   11,1670.98%    4,345,537   8,7710.80%
        
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		InterestAverage
Yield/Rate		 Average BalanceInterestAverage
Yield/Rate
ASSETS       
Interest earning assets:       
Interest bearing deposits with other banks and other short-term investments$  313,296$  3,2581.04% $  341,574$  1,6540.45%
Loans held for sale (1)   35,813   1,4003.91%    53,590   1,9033.59%
Loans (1) (2)    5,939,985   307,1115.17%    5,338,716   272,5855.10%
Investment securities available for sale (1)   557,049   12,2142.19%    468,773   9,6292.06%
Federal funds sold    7,672   520.68%    7,950   340.43%
  Total interest earning assets   6,853,815   324,0354.73%    6,210,603   285,8054.65%
        
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$  1,5370.42% $  251,954$  6460.26%
Savings and money market    2,739,776   17,2840.63%    2,728,347   12,0380.44%
Time deposits    799,816   8,4651.06%    769,801   6,5640.85%
  Total interest bearing deposits   3,909,545   27,2860.70%    3,750,102   19,2480.51%
Customer repurchase agreements   73,237   1970.27%    77,833   1670.21%
Other short-term borrowings   65,416   7481.13%    29,376   7322.45%
Long-term borrowings   216,724   11,9165.42%    133,023   7,4935.54%
  Total interest bearing liabilities   4,264,922   40,1470.94%    3,990,334   27,6400.69%
        
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. Flynn
301.986.1800