BETHESDA, Md., April 23 /PRNewswire-FirstCall/ -- Eagle Bancorp,
Inc. (NASDAQ:EGBN), the parent company of EagleBank (the "Bank"),
today announced net income of $1.7 million for the quarter ended
March 31, 2007, compared to $2.0 million for the first quarter of
2006, a decrease of 15%. On a per-share basis, the Company earned
$0.18 per basic share and $0.17 per diluted share for 2007, as
compared to $0.21 per basic share and $0.20 per diluted share for
2006. Per share earnings have been adjusted for the 1.3 for 1 share
stock split paid on July 5, 2006. (Logo:
http://www.newscom.com/cgi-bin/prnh/20050927/EAGLEBANKLOGO) During
the first quarter of 2007 the Company experienced average loan
growth of 17% and average deposit growth of 11% as compared to the
first quarter 2006. Despite a challenging interest rate
environment, the Company maintained a net interest margin of 4.41%
for the first quarter of 2007, which management feels compares
favorably to its peers. Nevertheless, the Company's net interest
income in the first quarter of 2007 as compared to the first
quarter of 2006 was adversely impacted by a decline in the net
interest margin from 5.01% in the first quarter of 2006 to 4.41%
for the first quarter of 2007. "Like many banks in our marketplace,
raising funds in core deposits has been challenging, and the bank
has had to rely more on higher cost certificates of deposit as a
funding source for loan and investment growth over the past several
quarters," said Ronald D. Paul, President and CEO of Eagle Bancorp.
Comparing balances at March 31, 2007, the Company's total assets
amounted to $776 million, versus $695 million at March 31, 2006, a
12% increase; while total deposits amounted to $632 million at
March 31, 2007, representing an 11% increase over deposits of $571
million at March 31, 2006; total loans increased to $637 million at
March 31, 2007 from $552 million at March 31, 2006, a 15% increase,
and total stockholders' equity amounted to $74 million at March 31,
2007, versus $67 million at March 31, 2006, an 11% increase. For
the quarter ended March 31, 2007, the Company reported an
annualized return on average assets of 0.88% as compared to 1.20%
for the same period of 2006. The annualized return on average
equity was 9.23% for the quarter ended March 31, 2007, as compared
to 12.08% for the same period of 2006; both profitability ratios
reflecting a weaker net interest margin in the first quarter of
2007 as compared to 2006. The ratio of average equity to average
assets was 9.59% and 9.93% for quarters ended March 31, 2007 and
2006, respectively. For the quarter ended March 31, 2007 interest
income increased 22%, while interest expense grew by 71% compared
to the first quarter of 2006, owing primarily to a higher cost of
deposit funding and higher levels of purchased funds to support
growth. Net interest income showed an increase of 2% on growth in
average earning assets of 15% and a 60 basis point decline in the
net interest margin. During the first quarter of 2007 the Company's
provision for loan losses amounted to $303 thousand as compared to
$115 thousand for the first quarter of 2006, largely as a result of
loan growth, and in part due to higher levels of net-charge offs in
the first quarter of 2007 as compared to the first quarter of 2006.
The Company recorded a partial charge-off in the amount of $350
thousand associated with a problem commercial lending relationship
originally identified and provisioned for in the third quarter of
2006. This credit is expected to be fully resolved later in 2007.
Management believes the current reserve balance for this
relationship is adequate. In total, the ratio of net charge-offs to
average loans was .26% for the first quarter of 2007 (.04%
excluding the problem relationship identified above) as compared to
.01% for the first quarter of 2006. The continued management of a
quality loan portfolio remains a key objective of the Company.
"While net income for the first quarter of 2007 was negatively
impacted by compression in our net interest margin, we are
encouraged with our continued growth in assets, loans and
deposits," remarked Mr. Paul. "We continue to focus on achieving a
more favorable deposit mix. The continuation of an interest rate
climate where short-term and longer-term rates are about equal
presents all banks with a very challenging environment to grow
revenues. Our confidence in our business plan and our continued
growth in loans and deposits support our efforts to continue to add
additional staff and facilities to our operations, resulting in
increases to noninterest expense. We are closely monitoring and
controlling overhead with a goal toward strong cost management, but
not at the expense of taking advantage of opportunities for meeting
growth objectives. Relationships with existing clients remains
strong as we continue to develop new quality banking relationships
in our primary marketplace of Montgomery County, Maryland and
Washington, D.C.," added Mr. Paul. Total noninterest income
increased from $840 thousand for the quarter ended March 31, 2006
to $998 thousand for the same period in 2007, a 19% increase, owing
primarily to increases in deposit transaction fees and gains from
the sale of residential mortgage and SBA loans. The Company
continues to maintain its emphasis on increasing noninterest income
through transaction and other fees, growth in residential mortgage
operations and SBA lending, and appropriate financing opportunities
with Eagle Commercial Ventures. Noninterest expenses amounted to
$6.0 million for the first quarter of 2007 as compared to $5.2
million for the same period of 2006, a 16% increase. The increase
in noninterest expenses was due substantially to a larger staff and
related personnel costs, a new branch opened in the second quarter
of 2006, additional office space, increases in data processing
costs and licensing fees and the new requirement that the Bank pay
deposit insurance premiums. Eagle Bancorp, Inc. paid dividends of
$0.06 per share and $0.05 per share for the quarters ended March
31, 2007 and 2006, respectively. The Summary of Financial
Information presented on the following pages provides more detail
of the Company's performance for the quarter ended March 31, 2007
as compared to 2006. Persons wishing additional information should
refer to the Company's Form 10K for the year ended December 31,
2006 filed with the Securities and Exchange Commission on March 13,
2007. 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 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. 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. Eagle Bancorp, Inc. Statements of Condition Highlights
March 31, December 31, March 31, (in thousands) 2007 2006 2006
Unaudited Audited Unaudited Assets Cash & due from banks
$16,470 $19,250 $16,689 Interest bearing deposits with banks and
other short term investments 4,573 4,855 1,718 Federal funds sold
19,701 9,727 31,630 Investment securities available for sale, at
fair value 74,216 91,140 69,954 Loans held for sale 2,531 2,157
3,010 Loans 637,356 625,773 552,375 Less: Allowance for credit
losses (7,263) (7,373) (6,085) Premises and equipment, net 7,380
6,954 5,852 Accrued interest, taxes, and other assets 21,224 20,968
19,423 Total Assets $776,188 $773,451 $694,566 Liabilities and
Stockholders' Equity Noninterest bearing deposits $130,664 $139,917
$149,778 Interest bearing transaction 58,801 66,596 66,309 Savings
and money market 177,717 159,778 140,697 Time, $100,000 or more
140,482 158,495 140,482 Other time 124,447 103,729 73,979 Total
deposits 632,111 628,515 571,245 Customer repurchase agreements and
federal funds purchased 35,043 38,064 31,549 Other borrowings
30,000 30,000 20,000 Other liabilities 4,574 3,956 4,531 Total
liabilities 701,728 700,535 627,325 Stockholders' equity 74,460
72,916 67,241 Total Liabilities and Stockholders' Equity $776,188
$773,451 $694,566 Eagle Bancorp, Inc. Statements of Income
Highlights (in thousands, except per share data) Three Months Ended
March 31, 2007 2006 (Unaudited) (Unaudited) Total interest income
$13,736 $11,224 Total interest expense 5,767 3,380 Net interest
income 7,969 7,844 Provision for credit losses 303 115 Net interest
income after provision for credit losses 7,666 7,729 Noninterest
income (before investment gains) 991 840 Investment gains (losses)
7 - Total noninterest income 998 840 Salaries and employee benefits
3,352 2,974 Premises and equipment expenses 1,208 869 Marketing and
advertising 91 119 Outside Data processing 262 228 Other expenses
1,135 1,033 Total noninterest expense 6,048 5,223 Income before
income tax expense 2,616 3,346 Income tax expense 934 1,363 Net
income $1,682 $1,983 Per Share Data: Earnings per share, basic (1)
$0.18 $0.21 Earnings per share, diluted (1) $0.17 $0.20 Shares
outstanding at period end 9,509,622 9,411,249 Weighted average
shares outstanding, basic (1) 9,488,567 9,378,444 Weighted average
shares outstanding, diluted (1) 9,816,711 9,793,495 Book value per
share at period end (1) $7.83 $7.14 Dividend per share $0.06 $0.05
Performance Ratios (annualized): Return on average assets 0.88%
1.20% Return on average equity 9.23% 12.08% Net interest margin
4.41% 5.01% Efficiency ratio (2) 67.44% 60.14% Other Ratios:
Allowance for credit losses to total loans 1.14% 1.10%
Non-performing loans to total loans 0.25% 1.13% Net charge-offs
(annualized) to average loans 0.26% 0.01% Average equity to average
assets 9.59% 9.93% Tier 1 leverage ratio 9.68% 10.12% Total risk
based capital ratio 12.03% 12.42% Average Balances (in thousands):
Total assets $770,880 $670,664 Total earning assets $732,529
$634,471 Total loans (3) $636,225 $545,594 Total deposits $616,492
$553,469 Total borrowings $76,577 $47,178 Total stockholders'
equity $73,890 $66,627 (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 (2) Computed by dividing noninterest
expense by the sum of net interest income and noninterest income
(3) Includes loans held for sale CONTACT: Ronald D. Paul
301.986.1800
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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