HELENA, Mont., Oct. 16, 2008 (GLOBE NEWSWIRE) -- Eagle Bancorp ("Eagle")(OTCBB:EBMT), the stock holding company of American Federal Savings Bank (the "Bank"), reported a first quarter net loss of $100,000, or ($0.09) per share (($0.08) per share diluted), for the three months ended September 30, 2008, and declared a cash dividend of $0.255 per share. Earnings for the quarter decreased by 121.6% from the $464,000 earned for the quarter ended September 30, 2007.
The decrease in net income for the first quarter was the result of a loss in value in the Company's holdings of Fannie Mae and Freddie Mac preferred stock of $1.24 million. As noted in Mr. Johnson's President's letter to stockholders dated September 15, 2008 which accompanied Eagle's annual report for the year ended June 30, 2008, the Federal Housing Finance Agency working with the U.S. Treasury placed Fannie Mae and Freddie Mac in a conservatorship of unspecified duration and suspended the preferred stock dividend. These actions contributed to the steep decrease in value of the preferred shares since June 30, 2008. At September 30, 2008 the Company's holdings of Fannie Mae and Freddie Mac preferred stock was valued at $82,000. This represents the potential maximum exposure Eagle could incur in future periods if those securities become completely valueless. Excluding the recognition of losses on the preferred stock, the Company's net income for the quarter would have been approximately $767,000, or $.72 per share ($.63 per share diluted).
"The Company's losses for the quarter were due to unprecedented events required to stabilize housing markets and to allow Fannie Mae and Freddie Mac to continue to operate to support those markets while operating in a government run conservatorship. We regret that Eagle and hundreds of other banks that held Fannie Mae and Freddie Mac preferred stock were required to take large losses. However, from an overall operating standpoint, there were bright spots. Among these was our growth in deposits, our growth in net interest income, and our continued strong core earnings performance. We are also pleased that our asset quality remained very strong during a period when other parts of the country were experiencing economic difficulties. Our local economy also remains healthy," said CEO Pete Johnson.
Net interest income increased $527,000, or 30.84%, to $2.24 million for the quarter ended September 30, 2008 from $1.71 million for the quarter ended September 30, 2007, and noninterest income decreased $1.088 million or 186.3%. However, as discussed above, noninterest income would have increased by $110,000 or 17.6% had the accounting entries for losses in value in Fannie Mae and Freddie Mac not been needed in both periods. Eagle's tax provision was $178,000 lower in the current quarter. Eagle's annualized return on assets was negative 0.14% and its annualized return on equity was negative 1.61% for the quarter, compared with 0.75% and 7.58%, respectively, for the same quarter in 2007.
Total interest and dividend income increased $408,000 to $3.8 million for the quarter ended September 30, 2008 from $3.41 million for the quarter ended September 30, 2007. This was due to increases in both interest and fees on loans of $169,000 and interest and dividends on securities available-for-sale of $241,000. Lower funding costs caused total interest expense to decrease by $119,000 to $1.58 million for the quarter ended September 30, 2008 from $1.70 million for the quarter ended September 30, 2007. Interest expense on deposits decreased $323,000 and interest expense on advances increased $204,000.
Total assets increased by $4.13 million, or 1.48%, to $284.06 million at September 30, 2008 from $279.91 million at June 30, 2008. Loans receivable increased $10.98 million, or 6.5%, to $179.13 million from $168.15 million. Loans held-for-sale decreased $6.13 million to $1.24 million from $7.37 million. Deposits increased $4.24 million, or 2.37%, to $183.10 million at September 30, 2008 from $178.85 million at June 30, 2008. Advances from the Federal Home Loan Bank and other borrowings increased $3.70 million, or 5.67%, to $69.0 million from $65.22 million, while federal fund purchases decreased from $3.0 million to zero. Total stockholders' equity decreased $1.46 million or 5.71%, to $24.17 million at September 30, 2008 from $25.63 million at June 30, 2008, as a result of the net loss for the period of $100,000, an increase in accumulated other comprehensive loss of $1.13 million (mainly due to an increase in net unrealized loss on securities available-for-sale), as well as dividends paid and purchases of treasury stock.
Eagle's Board of Directors declared a quarterly cash dividend of $0.255 per share for the first quarter of Eagle's fiscal year. The dividend is payable November 21, 2008 to shareholders of record at the close of business on October 31, 2008.
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 60% 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.
Financial highlights for Eagle Bancorp follow.
EAGLE BANCORP AND SUBSIDIARY (consolidated) (Dollars in Thousands) September 30, 2008 June 30, 2008 (Unaudited) (Audited) ASSETS Cash and due from banks 2,380 3,541 Interest-bearing deposits with banks 1,807 549 -------- -------- Total cash and cash equivalents 4,187 4,090 Securities available-for-sale, at market value 77,278 78,417 Securities held-to-maturity, at cost 389 697 Preferred stock - SFAS 159, at market value 82 1,321 Federal Home Loan Bank stock, at cost 1,881 1,715 Investment in Eagle Bancorp Staturtory Trust I 155 155 Mortgage loans held-for-sale 1,239 7,370 Loans receivable, net of deferred loan fees and allowance for loan losses of $300 at September 30, 2008 and $300 at June 30, 2008 179,125 168,149 Accrued interest and dividends receivable 1,494 1,426 Mortgage servicing rights, net 1,661 1,652 Premises and equipment, net 9,097 8,080 Cash surrender value of life insurance 6,346 6,285 Real estate acquired in settlement of loans, net of allowance for losses -- -- Other assets 1,102 550 -------- -------- Total assets 284,036 279,907 ======== ======== LIABILITIES Deposit accounts: Noninterest bearing 15,178 14,617 Interest bearing 167,917 164,234 -------- -------- Total deposits 183,095 178,851 Accrued expenses and other liabilities 2,696 2,045 Federal funds purchased -- 3,000 FHLB advances and other borrowings 68,919 65,222 Subordinated debentures 5,155 5,155 -------- -------- Total liabilities 259,865 254,273 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; 1,075,312 and 1,076,072 shares outstanding at September 30, 2008 and June 30, 2008, respectively) 12 12 Additional paid-in capital 4,508 4,487 Unallocated common stock held by employee stock ownership plan ("ESOP") (46) (55) Treasury stock, at cost (148,260 and 147,500 shares at September 30, 2008 and June 30, 2008, respectively) (5,034) (5,013) Retained earnings 26,687 27,025 Accumulated other comprehensive loss (1,956) (822) -------- -------- Total equity 24,171 25,634 Total liabilities and equity 284,036 279,907 ======== ======== EAGLE BANCORP AND SUBSIDIARY Consolidated Statements of Income For the Three Months Ended September 30, 2008 and 2007 (Dollars in Thousands, Except for Per Share Data) Three Months Ended Sept. 30 (unaudited) Sept. 30 ------------------------ 2008 2007 ---------- ---------- Interest and Dividend Income: Interest and fees on loans 2,837 2,668 Securities available for sale 963 722 Securites held to maturity 5 9 Interest on deposits with banks 4 7 FHLB dividends 7 2 ---------- ---------- Total interest and dividend income 3,816 3,408 ---------- ---------- Interest Expense: Deposits 862 1,185 FHLB advances & other borrowings 643 439 Subordinated debentures 75 75 ---------- ---------- Total interest expense 1,580 1,699 ---------- ---------- Net Interest Income 2,236 1,709 Loan loss provision 0 0 ---------- ---------- Net interest income after loan loss provision 2,236 1,709 ---------- ---------- Noninterest income: Service charges on deposit accounts 190 166 Net gain on sale of loans 183 199 Mortgage loan servicing fees 140 133 Net gain (loss) on sale of available for sale securities 57 0 Net loss on preferred stock - SFAS 159 (1,239) (41) Other 165 127 ---------- ---------- Total noninterest income (504) 584 ---------- ---------- Noninterest expense: Salaries and employee benefits 1,046 946 Occupancy expense 149 135 Furniture and equipment depreciation 67 71 In-house computer expense 73 74 Advertising 91 63 Amortization of mortgage servicing rights 71 66 Federal insurance premiums 7 5 Postage 33 23 Legal,accounting, and examination fees 48 56 Consulting fees 43 15 ATM processing 14 14 Other 207 200 ---------- ---------- Total noninterest expense 1,849 1,668 ---------- ---------- Income before provision for income taxes (117) 625 ---------- ---------- Provision for income taxes (17) 161 ---------- ---------- Net income (100) 464 ========== ========== Basic earnings per common share (0.09) 0.43 ========== ========== Diluted earnings per common share (0.08) 0.38 ========== ========== Weighted average shares outstanding (basic eps) 1,069,211 1,072,441 ========== ========== Weighted average shares outstanding (diluted eps) 1,217,058 1,212,458 ========== ==========