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
========== ==========