HELENA, Mont., Jan. 17, 2008 (PRIME NEWSWIRE) -- Eagle Bancorp ("Eagle")(OTCBB:EBMT), the stock holding company of American Federal Savings Bank (the "Bank"), reported net income of $219,000, or $0.20 per share ($0.18 per share diluted), for the three months ended December 31, 2007, and declared a cash dividend of $0.24 per share. Earnings for the quarter decreased by 52.49% from the $461,000 earned for the quarter ended December 31, 2006. Earnings for the six month period ended December 31, 2007 were $683,000, or $0.64 per share ($0.56 per share diluted), a decrease of $200,000 or 22.65%, compared to $883,000 for the six month period ended December 31, 2006. "We are pleased with our growth in net interest income for this quarter and for the six month period ending December 31, 2007. Excluding the losses in market value on the preferred stock held in our investment portfolio, our financial performance has been strong," said CEO Pete Johnson.
The decrease in net income for the second quarter was the result of an increase in net interest income of $147,000, offset by a decrease in noninterest income of $323,000 and an increase in noninterest expense of $126,000. Eagle's tax provision was $60,000 lower in the current quarter.
Noninterest income decreased substantially due to a loss in market value on investments in certain preferred stock, issued by Fannie Mae and Freddie Mac. Under Statement of Financial Accounting Standard (SFAS) No. 159 Fair Value Option for Financial Assets and Financial Liabilities, a company elects fair value for the initial and subsequent measurement for certain financial assets and liabilities on a contract-by-contract basis and subsequent changes in fair value are recognized in earnings when incurred. For the quarter, the market value of Fannie Mae and Freddie Mac preferred stock, owned by Eagle, decreased $390,000 and is reflected in noninterest income. In recent months both agencies announced major write-downs of asset values during the quarter, which impacted their common equity prices as well. They also each issued new offerings of preferred stock to bolster their capital. These new issues have higher coupons than the preferred stock held by Eagle, which also contributed to the decline in the market value of the issues held by Eagle.
Eagle's annualized return on assets was 0.35% and its annualized return on equity was 3.50% for the quarter, compared with 0.78% and 7.79%, respectively, for the same quarter in 2006.
Total interest and dividend income increased $392,000 to $3,494,000 for the quarter ended December 31, 2007 from $3,102,000 for the quarter ended December 31, 2006. This was due primarily to an increase in interest and fees on loans of $373,000. Higher funding costs caused total interest expense to increase by $245,000 to $1.7 million for the quarter ended December 31, 2007 from $1.47 million for the quarter ended December 31, 2006. Interest expense on deposits increased $129,000 and interest expense on advances increased $116,000.
Earnings for the six month period ended December 31, 2007 were $683,000, or $0.64 per share ($0.56 per share diluted), a decrease of $200,000, or 22.65%, compared to $883,000, or $0.82 per share ($0.73 per share diluted) for the six month period ended December 31, 2006. The decrease in net income for the period was the result of an increase in net interest income of $202,000 offset by a decrease in noninterest income of $276,000 and an increase in noninterest expense of $178,000. Eagle's tax provision was $52,000 lower in the current period. Net interest income was higher as the yield on earning assets outpaced the interest costs of funding. The decrease in noninterest income was primarily attributable to the recognition of a decline in value of $431,000 on Fannie Mae and Freddie Mac preferred stock as described above. Noninterest expense increase was primarily due to an increase in salaries and employee benefits of $202,000 resulting from merit raises, inflationary costs, and a slightly larger staff. Eagle's annualized return on assets was 0.55% and its annualized return on equity was 5.55%, compared with 0.76% and 7.61% respectively for the same six-month period in 2006.
Total assets increased by $6.30 million, or 2.57%, to $250.99 million at December 31, 2007 from $244.69 million at June 30, 2007. Loans receivable increased $6.49 million, or 4.1%, to $164.63 million from $158.14 million. Loans held-for-sale decreased to $748 thousand from $1.18 million. Deposits decreased $4.64 million, or 2.58%, to $175.00 million at December 31, 2007 from $179.65 million at June 30, 2007. Advances from the Federal Home Loan Bank and other borrowings increased $13.7 million, or 45.67%, to $43.70 million from $30.0 million, while federal fund purchases decreased from $3.8 million to zero. Total stockholders' equity increased $1.05 million or 4.36%, to $25.14 million at December 31, 2007 from $24.09 million at June 30, 2007, as a result of the net income for the period of $683,000 and a decrease in accumulated other comprehensive loss of $771,000 (mainly due to a decrease in net unrealized loss on securities available-for-sale). These were partially offset by dividends paid and purchases of treasury stock.
Eagle's Board of Directors declared a quarterly cash dividend of $0.24 per share for the second quarter of Eagle's fiscal year. The dividend is payable February 8, 2008 to shareholders of record at the close of business on January 25, 2008.
Eagle also announced that the Board of Directors approved a repurchase program for the company's shares. The Board's action permits Eagle to acquire up to 28,750 shares of its common stock subject to market conditions. This represents approximately 6.7% of the outstanding common stock currently held by the public. Repurchases are authorized to be made from time to time in open market transactions as, in the opinion of management, market conditions warrant. The repurchased shares will be held as treasury stock and will be held for general corporate purposes and/or issuance pursuant to Eagle's benefit plans. The repurchase plan also allows for the possibility of unsolicited negotiated transactions or other types of purchases. No shares will be purchased from directors or officers of Eagle.
American Federal Savings Bank was formed in 1922 and is headquartered in Helena, Montana. It has additional branches in Butte, Bozeman and Townsend. Eagle's common stock trades on the OTC Bulletin Board under the symbol "EBMT." Eagle is a subsidiary of Eagle Financial MHC, a federal mutual holding company formed in 2000, which owns approximately 59% of Eagle Bancorp's outstanding common stock.
This release may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Eagle intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of these safe harbor provisions.
EAGLE BANCORP AND SUBSIDIARY
(consolidated)
(Dollars in Thousands)
December 31, June 30,
2007 2007
(Unaudited) (Audited)
ASSETS
Cash and due from banks 4,426 2,709
Interest-bearing deposits with banks 350 360
------- -------
Total cash and cash equivalents 4,776 3,069
Investment securities FAS 159, at market value 1,401 0
Investment securities available-for-sale, at
market value 61,280 64,774
Investment securities held-to-maturity, at cost 726 921
Investment in nonconsolidated subsidiary 155 155
Federal Home Loan Bank stock, at cost 1,315 1,315
Mortgage loans held-for-sale 748 1,175
Loans receivable, net of deferred loan fees
and allowance for loan losses of $515 at
December 31, 2007 and $518 at June 30, 2007 164,626 158,140
Accrued interest and dividends receivable 1,352 1,333
Mortgage servicing rights, net 1,651 1,628
Property and equipment, net 6,419 5,806
Cash surrender value of life insurance 6,165 5,764
Real estate acquired in settlement of loans,
net of allowance for losses 0 0
Other assets 372 606
------- -------
Total assets 250,986 244,686
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LIABILITIES
Deposit accounts:
Noninterest bearing 12,967 13,694
Interest bearing 162,037 165,953
------- -------
Total deposits 175,004 179,647
Federal Funds Purchased 0 3,800
Advances from Federal Home Loan Bank and
Other Borrowings 43,700 30,000
Long-Term Subordinated Debentures 5,155 5,155
Accrued expenses and other liabilities 1,988 1,996
------- -------
Total liabilities 225,847 220,598
EQUITY
Preferred stock (no par value, 1,000,000 shares
authorized, none issued or outstanding)
Common stock (par value $0.01 per share;
9,000,000 shares authorized; 1,223,572 shares
issued; 1,079,822 and 1,084,357 shares
outstanding at December 31, 2007 and
June 30, 2007, respectively) 12 12
Additional paid-in capital 4,441 4,387
Unallocated common stock held by employee stock
ownership plan ("ESOP") (74) (92)
Treasury stock, at cost (143,750 and 139,215
shares at December 31, 2007 and June 30, 2007,
respectively) (4,908) (4,759)
Retained earnings 25,805 25,448
Accumulated other comprehensive (loss) income (137) (908)
------- -------
Total equity 25,139 24,088
Total liabilities and equity 250,986 244,686
======= =======
EAGLE BANCORP AND SUBSIDIARY
Consolidated Statements of Income
(In Thousands, except for Per Share Data)
Three Months Ended Six Months Ended
December 31, December 31,
-------------------- --------------------
2007 2006 2007 2006
--------- --------- --------- ---------
Interest and Dividend
Income:
Interest and fees on loans $2,751 $2,378 $5,419 $4,689
Interest on deposits with
banks 27 16 34 28
Securities held-to-maturity 9 11 18 22
Securities available-for-
sale 704 696 1,426 1,356
FHLB Stock dividends 3 1 5 1
--------- --------- --------- ---------
Total interest and
dividend income 3,494 3,102 6,902 6,096
--------- --------- --------- ---------
Interest Expense:
Deposits 1,171 1,042 2,356 1,976
Advances and other
borrowings 471 355 910 686
Subordinated debentures 75 75 150 150
--------- --------- --------- ---------
Total interest expense 1,717 1,472 3,416 2,812
--------- --------- --------- ---------
Net Interest Income 1,777 1,630 3,486 3,284
Loan loss provision 0 0 0 0
--------- --------- --------- ---------
Net interest income after
loan loss provision 1,777 1,630 3,486 3,284
--------- --------- --------- ---------
Noninterest income:
Net gain on sale of loans 183 190 382 309
Demand deposit service
charges 190 128 356 263
Mortgage loan servicing
fees 137 133 270 271
Net gain on sale of
available-for-sale
securities 0 1 0 1
Net gain (loss) on
securities FAS 159 (390) (431)
Other 149 140 276 285
--------- --------- --------- ---------
Total noninterest income 269 592 853 1,129
--------- --------- --------- ---------
Noninterest expense:
Salaries and employee
benefits 1,008 914 1,954 1,752
Occupancy expenses 130 133 265 275
Furniture and equipment
depreciation 70 68 141 147
In-house computer expense 84 70 158 141
Marketing expense 70 60 133 153
Amortization of mtg
servicing fees 75 73 141 149
Federal insurance premiums 5 5 10 11
Postage 33 21 56 39
Legal,accounting, and
examination fees 65 66 121 124
Consulting fees 7 20 22 36
ATM processing 13 10 27 22
Other 227 221 427 428
--------- --------- --------- ---------
Total noninterest expense 1,787 1,661 3,455 3,277
--------- --------- --------- ---------
Income before provision
for income taxes 259 561 884 1,136
--------- --------- --------- ---------
Provision for income taxes 40 100 201 253
--------- --------- --------- ---------
Net income $219 $461 $683 $883
========= ========= ========= =========
Basic earnings per share $0.20 $0.43 $0.64 $0.82
========= ========= ========= =========
Diluted earnings per share $0.18 $0.38 $0.56 $0.73
========= ========= ========= =========
Weighted average shares
outstanding (basic eps) 1,070,862 1,072,540 1,071,651 1,073,100
========= ========= ========= =========
Weighted average shares
outstanding (diluted eps) 1,213,612 1,209,012 1,213,035 1,208,435
========= ========= ========= =========