BETHESDA, Md., Oct. 17 /PRNewswire-FirstCall/ -- Eagle Bancorp,
Inc. (the Company) (NASDAQ:EGBN), the parent company of EagleBank,
today announced net income of $5.9 million for the nine months
ended September 30, 2006, compared to $5.5 million for the first
nine months of 2005, an increase of 7%. On a per-share basis, the
Company earned $0.62 per basic share and $0.60 per diluted share
for 2006, as compared to $0.59 per basic share and $0.56 cents per
diluted share for 2005. Per share earnings have been adjusted for a
1.3 for 1 share stock split in the form of a stock dividend paid on
July 5, 2006. (Logo:
http://www.newscom.com/cgi-bin/prnh/20050927/EAGLEBANKLOGO ) For
the third quarter of 2006, the Company earned $1.9 million ($0.20
per basic share and $0.19 per diluted share), as compared to $2.3
million ($0.25 per basic share and $0.23 per diluted share) for the
third quarter of 2005, a 16% decrease. Lower third quarter earnings
in 2006 as compared to 2005, were primarily due to a decline in the
net interest margin, increased loan credit provision associated
with a specifically identified problem commercial relationship, and
higher noninterest expenses associated primarily with additional
personnel. "We are pleased to report increased earnings for Eagle
Bancorp for the first nine months of 2006," noted Ronald D. Paul,
President and CEO of Eagle Bancorp, Inc. "While balance sheet
growth in the quarter ended September 30 has slowed from historical
levels, and a challenging interest rate environment has resulted in
a declining net interest margin, the core business of Eagle Bancorp
remains strong. Also, in spite of increases in the level of loan
credit provision, which was due to weakness in one significant
borrowing relationship identified in the third quarter, overall
asset quality remains strong. The Company continues to make
investments in personnel, facilities and systems to support a
growing organization, while managing its overall costs, as measured
by the efficiency ratio, which while elevated, remains favorable to
peer banking companies," added Mr. Paul. EagleBank's ninth
community banking office in Chevy Chase, Maryland had its first
full quarter of operations in the third quarter of 2006. For the
nine months ended September 30, 2006, the Company reported an
annualized return on average assets (ROAA) of 1.13% as compared to
1.23% for the first nine months of 2005; while the annualized
return on average equity (ROAE) was 11.54%, as compared to 12.07%
for the same period in 2005. While both loans and average deposits
continued to grow in the third quarter of 2006, resulting in growth
in net interest income, the deposit base in the first nine months
of 2006 has shifted to more interest bearing deposits resulting in
higher funding costs. For the first nine months of 2006, net
interest income increased 15% over the same period for 2005 and for
the three months ended September 30, 2006, net interest income
increased 9% as compared to the third quarter of 2005. The net
interest margin was 4.88% as compared to 5.01% for the first nine
months in 2006 and was 4.81% for the third quarter of 2006.
Non-interest income for the first nine months of 2006 was $2.9
million compared to $3.2 million in the first nine months of 2005,
a decline of 8%. Excluding net securities gains of $85 thousand
during the first nine months of 2006 and $281 thousand during the
same period in 2005, noninterest income declined by 2% in the nine
month period. The decline was attributed primarily to lower amounts
of gains on the sale of SBA loans which amounted to $689 thousand
for the first nine months in 2006 as compared to $730 thousand for
the same period in 2005. Activity in SBA sales to secondary markets
can vary widely from period to period. EagleBank has been
recognized as the leading community bank SBA lender in its
marketplace and continued emphasis in this business is anticipated.
Non-interest income for both the third quarter of 2006 and 2005 was
$1.2 million. Excluding net securities losses of $71 thousand
during the third quarter of 2006 and $269 thousand of net
investment gains during the third quarter in 2005, noninterest
income was $1.3 million in 2006 as compared to $1.0 million in
2005, the increase due to higher amounts of SBA gains in the
period. Investment securities sales are generally undertaken for
asset liability management purposes to better position the
portfolio for expected interest rates. Non-interest expenses were
$16.1 million for the first nine months of 2006, as compared to
$14.1 million for 2005, a 14% increase. The primary reasons for
this increase were increases in staff levels, and related personnel
cost increases, increased occupancy cost, due in part to new
banking offices, and higher data processing costs, director fees,
broker fees, software licensing fees and professional fees
associated with a larger organization. The efficiency ratio, which
measures the relationship of noninterest expenses to the sum of net
interest income and noninterest income was 59.65% for the first
nine months of 2006 as compared to 58.52% for the same period in
2005 and was 60.40% for the third quarter of 2006 as compared to
54.01% for the same period in 2005. These ratios increased due to
both a decline in the net interest margin in 2006 as compared to
2005 and higher levels of noninterest expenses. Non-interest
expenses were $5.7 million for the third quarter of 2006, as
compared to $4.7 million for 2005, a 20% increase, due
substantially to the same factors mentioned above for the nine
month period. The Company recorded net charge-offs of $356 thousand
for the first nine months of 2006 as compared to net charge-offs of
$55 thousand for the first nine months of 2005. The ratio of
non-performing loans to total loans was .34% at September 30, 2006
as compared to .04% at September 30, 2005 and .41% at June 30,
2006. The provision for credit loss was $1.4 million for the first
nine months of 2006 as compared to $1.3 million for the same period
in 2005, and was $711 thousand for the third quarter of 2006 as
compared to $424 thousand for the third quarter of 2005. The
increase in the provision in the third quarter of 2006 as compared
to 2005 was due to the identification of a problem commercial loan
relationship, where the Company believes collection in full is in
doubt. At September 30, 2006, the allowance for credit losses
represented 1.19% of loans outstanding, as compared to 1.09% at
September 30, 2005, and 1.10% at June 30, 2006. At September 30,
2006, total assets were $727.4 million compared to $647.0 million
at September 30, 2005, a 12% increase. Total deposits amounted to
$588.2 million at September 30, 2006, an 8% increase over deposits
of $545.6 million at September 30, 2005, while total loans
increased to $591.2 million at September 30, 2006, from $504.3
million at September 30, 2005, a 17% increase. Deposits declined in
the third quarter of 2006 due to a large short- term deposit that
occurred late in June. For the third quarter of 2006, average
deposits increased by about 1% from the second quarter of 2006.
Eagle Bancorp paid a regular quarterly cash dividend in each
quarter of 2006 and declared a 30% stock dividend in May 2006 which
was paid on July 5, 2006. All per share amounts have been adjusted
to give effect to this stock split in the form of a stock dividend.
The Summary of Financial Information presented on the following
pages provides more detail of the Company's performance for the
nine and three months ended September 30, 2006 as compared to 2005.
Persons wishing additional information should refer to the
Company's Form 10K for the year ended December 31, 2005 filed with
the Securities and Exchange Commission on March 16, 2006. Eagle
Bancorp 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
thru 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
July, the Company formed Eagle Commercial Ventures, LLC as a direct
subsidiary to provide subordinate financing for the acquisition,
development and construction of real estate projects, who's primary
financing would be done by EagleBank. 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. CONTACT: Ronald D. Paul, +1-301-986-1800 Eagle
Bancorp, Inc Statement of Condition Highlights Sept. 30, Dec. 31,
Sept. 30, (in thousands) 2006 2005 2005 Unaudited Audited Unaudited
Assets Cash and due from banks $18,989 $16,662 $17,639 Interest
bearing deposits with other banks and other short-term investments
3,833 11,231 12,015 Federal funds sold 3,953 6,103 30,051
Investment securities available for sale, at fair value 79,638
68,050 63,887 Loans held for sale 5,825 2,924 2,327 Loans 591,232
549,212 504,290 Less: allowance for credit losses (7,046) (5,985)
(5,496) Premises and equipment, net 7,122 5,774 5,744 Accrued
interest, taxes and other assets 23,821 18,281 16,562 Total Assets
$727,367 $672,252 $647,019 Liabilities and Stockholders' Equity Non
interest bearing deposits $143,963 $165,103 $140,554 Interest
bearing deposits 444,224 403,790 405,008 Total deposits 588,187
568,893 545,562 Customer repurchase agreements and federal funds
purchased 35,974 32,139 31,470 Other borrowings 25,000 - 4,000
Other liabilities 7,639 6,256 2,400 Total liabilities 656,800
607,288 583,432 Stockholders' equity 70,567 64,964 63,587 Total
Liabilities and Stockholders' Equity $727,367 $672,252 $647,019
Eagle Bancorp, Inc. Statements of Income Highlights (in thousands,
except per share data) Nine Months Ended Three Months Ended
September 30, September 30, 2006 2005 2006 2005
(Unaudited)(Unaudited)(Unaudited)(Unaudited) Total interest income
$36,470 $26,120 $13,033 $9,758 Total interest expense 12,414 5,184
4,818 2,242 Net interest income 24,056 20,936 8,215 7,516 Provision
for credit losses 1,418 1,311 711 424 Net interest income after
provision for credit losses 22,638 19,625 7,504 7,092 Noninterest
income (before investment gains) 2,816 2,884 1,287 970 Investment
gains (losses) 85 281 (71) 269 Total noninterest income 2,901 3,165
1,216 1,239 Salaries and employee benefits 9,053 7,695 3,104 2,461
Premises and equipment expenses 2,795 2,468 1,107 851 Advertising
366 344 102 137 Outside data processing 655 574 219 189 Other
expenses 3,212 3,024 1,164 1,091 Total noninterest expense 16,081
14,105 5,696 4,729 Income before income tax expense 9,458 8,685
3,024 3,602 Income tax expense 3,585 3,206 1,124 1,332 Net income
$5,873 $5,479 $1,900 $2,270 Per Share Data: Earnings per share,
basic (1) $0.62 $0.59 $0.20 $0.25 Earnings per share, diluted (1)
$0.60 $0.56 $0.19 $0.23 Shares outstanding at period end 9,425,733
7,174,343 9,425,733 7,174,343 Weighted average shares outstanding,
basic (1) 9,423,239 9,221,532 9,423,947 9,221,532 Weighted average
shares outstanding, diluted (1) 9,853,794 9,795,245 9,869,514
9,795,245 Book value per share at period end (1) $7.49 $6.82 $7.49
$6.82 (1) All periods adjusted to give retroactive effect to the
1.3 to 1 stock split in the form of a 30% stock dividend paid on
July 5, 2006 Eagle Bancorp, Inc. Performance Ratios (annualized):
Return on average assets 1.13% 1.23% 1.05% n/a Return on average
equity 11.54% 12.07% 10.84% n/a Net interest margin 4.88% 5.01%
4.81% n/a Efficiency ratio (2) 59.65% 58.52% 60.40% 54.01% Other
Ratios: Allowance for credit losses to total loans 1.19% 1.09%
1.19% 1.09% Non performing loans to total loans 0.34% 0.04% 0.34%
0.04% Net charge-offs (annualized) to average loans 0.08% -0.01%
-0.02% n/a Average equity to average assets 9.75% 10.22% 9.69% n/a
Tier 1 leverage ratio 11.03% 10.18% 11.03% 10.18% Total risk based
capital ratio 12.12% 12.57% 12.12% 12.57% Average Balances: Total
assets $697,549 $593,496 $717,481 n/a Total earning assets $659,582
$558,956 $678,225 n/a Total loans (3) $565,380 $463,576 $581,874
n/a Total deposits $575,071 $495,318 $589,597 n/a Total
stockholders' equity $68,026 $60,668 $69,537 n/a (2) Computed by
dividing noninterest expense by the sum of net interest income and
noninterest income (3) Includes loans held for sale
http://www.newscom.com/cgi-bin/prnh/20050927/EAGLEBANKLOGO
http://photoarchive.ap.org/ DATASOURCE: Eagle Bancorp, Inc.
CONTACT: Ronald D. Paul of Eagle Bancorp, Inc., +1-301-986-1800 Web
site: http://www.eaglebankmd.com/
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