EGBN Eagle Bancorp Inc

Eagle Bancorp, Inc. Announces 59% Increase in Net Earnings for Full Year 2004 Over 2003 BETHESDA, Md., Jan. 19 /PRNewswire-FirstCall/ -- Eagle Bancorp, Inc. (NASDAQ:EGBN), the parent company of EagleBank, today announced net income of $5.1 million for the year ended December 31, 2004, compared to $3.2 million for the year ended December 31, 2003, an increase of 59%. On a per-share basis, the Company earned $0.94 per basic share and $0.90 per diluted share for 2004 as compared to $0.82 per basic share and $0.77 cents per diluted share for 2003. Comparisons in earnings per share between 2004 and 2003 are affected by an increase in the number of outstanding shares resulting from the issuance of approximately 2.4 million shares in August 2003. For the full year 2004, the Company reported a return on average assets (ROAA) of 1.04%. This is the first time the Company has reported a ROAA in excess of 1.00%. For the year 2003, the ROAA was .86%. Return on average equity was 9.16% for the full year 2004, as compared to 9.45% for 2003. This ratio was affected by the larger average capital base during 2004 resulting from the August 2003 issuance of shares. Average equity was 11.38% of average assets for 2004 as compared to 9.05% for 2003. Net earnings for the full year 2004 were positively affected by strong growth in loans and deposits, an improved net interest margin, continuing favorable asset quality and good growth in non-interest income revenues. For the fourth quarter of 2004, net income was $1.8 million ($0.34 per basic share and $0.32 per diluted share) as compared to $815 thousand ($0.15 per basic share and $0.15 per diluted share) for the same quarter in 2003, representing a 125% increase. A number of factors contributed to the very strong fourth quarter results, which contributed significantly to the Company's record earnings for the full year 2004. As anticipated by management, a problem credit of approximately $2.2 million was resolved in the fourth quarter with the loan being paid in full. This resolution allowed the Company to recognize approximately $200 thousand of pre-tax non-recurring income from the recovery of collection expenses advanced in prior periods, default interest and the recognition of late charges accumulated on the loan account. Both lending and deposit activity were strong in the fourth quarter, and permitted the Company's net interest income to benefit from increased volumes, in addition to the improved net interest margin discussed below. Non-interest income in the fourth quarter of 2004 was $1.3 million compared to $803 thousand in the fourth quarter of 2003. This increase was due primarily to increased amounts of gains on the sale of both SBA loans, where EagleBank is a leading lender in its marketplace, and increased amounts of gains on the sale of residential mortgage loans. These same factors together with increases in the amount of gains on the sale of investment securities represented the primary increases for the full year 2004 over 2003 in the noninterest income category. Throughout the year 2004, the Company has maintained a favorable net interest margin, and as expected, experienced an increased net interest margin as interest rates began to rise during 2004. For the year 2004, the Company's net interest margin improved to 4.36% compared to 4.14% for the year 2003. Deposit and loan growth were particularly strong in the fourth quarter, with deposits increasing 12%, compared to an increase for the full year 2004 of 38%, while loans increased 14% in the fourth quarter, compared to an increase for the full year 2004 of 31%. The Company was in part able to improve the net interest margin, through continued reliance on core deposits. A significant factor in the Company achieving its 2004 results is the quality of its assets. The quality of the loan portfolio has allowed management to moderate the provision for possible credit losses. The ratio of non-performing loan to total loans was just 0.03% at December 31, 2004 as compared to .21% at December 31, 2003 and the ratio of net loan losses to average loans was just 0.01% for the full year 2004 as compared to .10% for the year of 2003. The provision for loan losses was $675 thousand for the full year 2004 as compared to $1.2 million for the year of 2003. At December 31, 2004, the allowance for credit losses represented 1.02% of loans outstanding, as compared to 1.16% at December 31, 2003. The Company reported total assets at December 31, 2004 of $553 million compared to $443 million at December 31, 2003, a 25% increase. At December 31, 2004, total deposits amounted to $462 million, representing a 38% increase over deposits of $336 million at December 31, 2003, while total loans increased to $416 million at December 31, 2004 from $318 million at December 31, 2003, a 31% increase. "We are extremely pleased to report the strong performance of Eagle Bancorp in 2004," noted both Leonard Abel, Chairman and Ronald Paul, President and CEO of Eagle Bancorp, Inc. "We take particular pride in the quality of assets managed by the Company, which receives ongoing attention by management and the Board. The strong loan growth experienced in the fourth quarter of 2004 is continuing in the first quarter of 2005 and should contribute favorably to 2005 results." The Summary of Financial Information presented on the following pages provides more detail of the Company's performance for the year ended December 31, 2004 as compared to 2003. Persons wishing additional information should refer to the Company's Form 10K report to be filed with the Securities and Exchange Commission on or before March 15, 2005. Non-GAAP Presentations. This press release refers to the efficiency ratio which is computed by dividing noninterest expense by the sum of net interest income on a tax equivalent basis and noninterest income. This is a non-GAAP financial measure that we believe provides investors with important information regarding our operational efficiency. Comparison of our efficiency ratio with those of other companies may not be possible because other companies may calculate the efficiency ratio differently. The Company, in referring to its net income, is referring to income under accounting principles generally accepted in the United States, or "GAAP." 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. Statement of Condition Highlights December September December (in thousands) 31, 2004 30, 2004 31, 2003 Unaudited Unaudited Audited Assets Cash and cash equivalents $ 31,100 $ 50,116 $ 25,103 Interest bearing deposits with other banks 9,594 9,612 4,332 Federal funds sold 15,035 - - Investment securities available for sale 64,098 65,696 82,581 Loans held for sale 2,208 3,138 3,649 Loans 415,509 363,823 317,533 Less: Allowance for credit losses (4,240) (4,176) (3,680) Loans, net 411,269 359,647 313,853 Other assets 19,979 19,479 13,479 Total Assets $ 553,283 $ 507,688 $ 442,997 Liabilities and Stockholders' Equity Non interest bearing deposits $ 130,309 $ 113,730 $90,468 Interest bearing deposits 331,978 297,291 245,046 Total deposits 462,287 411,021 335,514 Federal funds purchased and securities sold under repurchase agreements 23,983 27,370 38,454 Other borrowings 6,333 11,443 14,588 Other liabilities 2,244 1,376 1,429 Total liabilities 494,897 451,210 389,985 Stockholders' equity 58,436 56,478 53,012 Total Liabilities and Stockholders' Equity $ 553,283 $ 507,688 $ 442,997 Eagle Bancorp, Inc. Statements of Income Highlights Twelve Months Ended Three Months Ended (in thousands) December 31, December 31, 2004 2003 2004 2003 (Unaudited) (Audited) (Unaudited)(Unaudited) Total interest income $ 24,195 $ 18,404 $ 7,060 $ 5,044 Total interest expense 4,328 3,953 1,200 905 Net interest income 19,867 14,451 5,860 4,139 Provision for credit losses 675 1,175 218 445 Noninterest income 3,858 2,936 1,254 803 Noninterest expense 15,057 11,094 3,971 3,174 Income before incomes taxes 7,993 5,118 2,925 1,323 Income tax expense 2,906 1,903 1,090 508 Net income $ 5,087 $ 3,215 $ 1,835 $ 815 Per Share Data: Earnings per share, basic $ 0.94 $ 0.82 $ 0.34 $ 0.15 Earnings per share, diluted 0.90 0.77 0.32 0.15 Shares outstanding at period end 5,421,730 5,359,303 5,421,730 5,359,303 Weighted average shares outstanding, basic 5,403,616 3,932,004 5,412,785 5,356,379 Weighted average shares outstanding, diluted 5,661,951 4,166,128 5,680,169 5,614,773 Book value per share at period end $ 10.78 $ 9.89 $ 10.78 $ 9.89 Eagle Bancorp, Inc. Financial Ratios and Average Balances Years Ended December 31, Performance Ratios: 2004 2003 (annualized) (Unaudited) (Audited) Return on average assets 1.04% 0.86% Return on average equity 9.16% 9.45% Net interest margin 4.35% 4.14% Efficiency ratio 64.00% 63.34% Other Ratios: Allowance for credit losses to total loans 1.02% 1.16% Non performing loans to total loans 0.03% 0.21% Net charge-offs (annualized) to average loans 0.01% 0.10% Average equity to average assets 11.38% 9.05% Tier 1 capital ratio 12.43% 15.30% Total capital ratio 13.33% 16.40% Average Balances: Assets $ 487,853 $ 375,802 Earning assets $ 455,979 $ 349,157 Loans $ 353,537 $ 266,811 Deposits $ 397,788 $ 292,953 Stockholders' equity $ 55,507 $ 34,028 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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