UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM 10-QSB
(MARK ONE)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from______ to______
Commission File Number 333-42083
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EAGLE BANCORP, INC.
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(Exact name of registrant as specified in its charter)
Maryland 52-2061461
- ------------------------------- --------------------
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7815 Woodmont Avenue, Bethesda, Maryland 20814
- ------------------------------------------ --------------
(Address of principal executive offices) (Zip Code)
(301) 986-1800
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(Registrant's telephone number, including area code)
------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes x No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practical date.
As of August 10, 1998, registrant had outstanding 1,650,000 shares of
Common Stock.
<PAGE>
EAGLE BANCORP, INC.
FORM 10-QSB
<TABLE>
<CAPTION>
INDEX
- ----------------------------------------------------------------------------------------------------------------
PART I - FINANCIAL INFORMATION PAGE
<S> <C>
Item 1 - Financial Statements (Unaudited)
Balance Sheets - June 30, 1998
and December 31, 1997 1
Statements of Operations - Three and Six Months Ended June 30, 1998 2
Statements of Cash Flows - Six Months Ended June 30, 1998 3
Notes to Financial Statements 4 - 5
Management's Discussion and Analysis of Financial Condition
and Results of Operations 6
PART II - OTHER INFORMATION 7 - 8
SIGNATURES 9
</TABLE>
<PAGE>
PART I
Item 1
EAGLE BANCORP, INC.
BALANCE SHEETS
JUNE 30, 1998 AND DECEMBER 31, 1997
ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
-------- ------------
<S> <C> <C>
Cash and cash equivalents $ 15,734,447 $ 7,214
Leasehold improvements 189,903 -
Equipment - net 656,168 3,832
Security deposits 30,826 -
Prepaid expenses 120,204 -
------------ ------------
TOTAL ASSETS $ 16,731,548 $ 11,046
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable and accrued expenses $ 637,685 $ 43,249
Payable to organizers - 130,000
------------ ------------
Total liabilities 637,685 173,249
------------ ------------
STOCKHOLDERS' EQUITY:
Common stock, $.01 par, 5,000,000 shares
authorized, 1,650,000 shares issued and
outstanding June 30, 1998 16,500 -
Surplus 16,483,500 -
Deficit (406,137) (162,203)
------------ ------------
Total stockholders' equity 16,093,863 (162,203)
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 16,731,548 $ 11,046
============ ============
</TABLE>
1
<PAGE>
EAGLE BANCORP, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Six Months Three Months
Ended Ended
June 30, 1998 June 30, 1998
------------- -------------
<S> <C> <C>
REVENUES - Interest income $ 204,061 $ 180,615
--------- ---------
EXPENSES:
Depreciation 1,896 1,548
Filing fees 4,688 3,332
Interest 15,699 10,617
Legal 64,562 50,674
Accounting 4,750 2,750
Payroll taxes and employee benefits 28,982 22,914
Salaries 191,072 124,376
Other 136,346 102,983
--------- ---------
Total expenses 447,995 319,194
--------- ---------
LOSS BEFORE INCOME TAX BENEFIT (243,934) (138,579)
INCOME TAX BENEFIT - -
--------- ---------
NET LOSS $(243,934) $(138,579)
========= =========
Earnings (loss) per share:
Basic $ - $ -
========= =========
Diluted $ - $ -
========= =========
</TABLE>
2
<PAGE>
EAGLE BANCORP, INC.
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (243,934)
Adjustments to reconcile net loss to net
cash used by operating activities:
Depreciation 1,896
Increase in accounts payable and accrued expenses 594,436
Increase in prepaid expenses (120,204)
-----------
Net cash provided by operating activities 232,194
-----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of equipment (654,232)
Acquisition of leasehold improvements (189,903)
Increase in security deposits (30,826)
-----------
Net cash used in investing activities (874,961)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in payable to organizers (130,000)
Issuance of common stock 16,500,000
Net cash provided by financing activities 16,370,000
-----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 15,727,233
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 7,214
-----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $15,734,447
===========
</TABLE>
3
<PAGE>
4
<PAGE>
EAGLE BANCORP, INC.
NOTES TO FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
General - The financial statements of Eagle Bancorp, Inc. (the Company)
included herein are unaudited; however, they reflect all adjustments
consisting only of normal recurring accruals that, in the opinion of
Management, are necessary to present fairly the results for the periods
presented. Certain information and note disclosures normally included in
financial statements prepared in accordance with Generally Accepted
Accounting Principles have been condensed or omitted pursuant to the rules
and regulations of the Securities and Exchange Commission. The Company
believes that the disclosures are adequate to make the information
presented not misleading. The results of operations for the six months
ended June 30, 1998, are not necessarily indicative of the results of
operations to be expected for the remainder of the year. It is suggested
that these financial statements be read in conjunction with the original
and supplemental prospectus dated February 9, 1998 and May 13, 1998.
2. NATURE OF BUSINESS
Eagle Bancorp, Inc. was incorporated on October 28, 1997 under the laws of
the State of Maryland to operate as a bank holding company. An application
to organize the Bank was filed with the Maryland Department of Financial
Regulation on December 5, 1997. As of June 30, 1998 EagleBank (the "Bank")
had received regulatory approvals to open for business subject to a
pre-opening review. The Company purchased all the outstanding shares of
common stock of the Bank on July 20, 1998. The opening of the first office
occurred on July 20, 1998 and the second office opened August 4, 1998.
3. NEW ACCOUNTING PRONOUNCEMENTS
Effective for periods ending after December 15, 1997, SFAS No. 128,
"Earnings Per Share," is applicable for computing and presenting earnings
per share (EPS) for entities, with publicly held common stock or potential
common stock. This statement simplifies the standards for computing EPS,
making them comparable to international EPS standards. It replaces the
presentation of primary EPS with a presentation of basic EPS. It also
requires dual presentation of basic and diluted EPS on the face of the
income statement for all entities with complex capital structures and
requires a reconciliation of the numerator and denominator of the basic EPS
computation to the numerator and denominator of the diluted EPS
computation.
Statement of Financial Accounting Standards No. 130, Reporting
Comprehensive Income, was issued in June 1997. This statement establishes
standards for disclosing comprehensive income and its components in a full
set of general-purpose financial statements. Comprehensive income is
defined as the change in equity from transactions and other events and
circumstances from nonowner sources. Comprehensive income includes net
income which is adjusted for items such as unrealized gains and losses on
certain investment securities and minimum pension liability adjustments.
This statement is effective for fiscal years beginning after
5
<PAGE>
December 15, 1997. Reclassification of financial statements for earlier
periods provided for comparative purposes is required. For the six-month
period through June 30, 1998, the Company had no components of other
comprehensive income.
Statement of Financial Accounting Standards No. 131, Disclosure about
Segments of an Enterprise and Related Information, was issued in June 1997.
This statement establishes standards for disclosing information about
operating segments in financial statements. Operating segments are
components of a business about which separate financial information is
available that is evaluated by management in deciding how to allocate
resources and in assessing performance. Management has not determined yet
whether additional disclosure will be necessary under the requirements of
SFAS No. 131. For year-end disclosure, this statement is effective for
fiscal years beginning after December 15, 1997. Interim reporting
disclosures would not be required in the first year of adoption, but would
begin the first quarter immediately after the first year of providing
year-end disclosures. For interim reporting, the preceding year's interim
information must be presented on a comparative basis.
4. CASH AND CASH EQUIVALENTS
The Company defines cash and cash equivalents as cash on hand and
short-term investments with original maturities of less than 90 days.
5. INCOME TAXES
The Company uses the liability method of accounting for income taxes as
required by SFAS No. 109, "Accounting for Income Taxes." Under the
liability method, deferred-tax assets and liabilities are determined based
on differences between the financial statement carrying amounts and the tax
basis of existing assets and liabilities (i.e., temporary differences) and
are measured at the enacted rates that will be in effect when these
differences reverse. Deferred income taxes will be recognized when it is
deemed more likely than not that the benefits of such deferred income taxes
will be realized, accordingly, no deferred income taxes or income tax
benefits have been recorded by the Company.
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Forward looking statements. This discussion contains forward looking
statements within the meaning of the Securities 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
policiesand regarding general economic conditions. 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
statement. The Company does not undertake to update any forward looking
statement to reflect occurrences or events which may not have been
anticipated as of the date of such statements.
GENERAL
Eagle Bancorp, Inc. (the "Company") is a proposed bank holding company,
which on June 9, 1998 completed its efforts to raise capital and closed
with in excess of $16,500,000. Subscriptions in excess of the maximum
amount acceptable under the original and supplemental prospectus, dated
February 9, 1998 and May 13, 1998, have been returned to the subscribers.
As of June 30, 1998, EagleBank (the "Bank") had received regulatory
approvals to open for business subject to a pre-opening review by the
Maryland Department of Financial Regulation. The opening of the first
office occurred on July 20, 1998 and a second office opened August 4, 1998.
With the opening of the first office, the Company became a bank holding
company with the purchase of 387,500 shares of Bank stock, capitalizing the
Bank at $7,750,000.
From the initial capitalization of the Company, loans and advances from
organizers and an unaffiliated bank were repaid in the amounts of $190,000
and $350,000.
It is currently anticipated that the Bank will invest approximately
$2,345,000 in leasehold improvements for its three planned offices and in
furniture, fixtures and equipment for such offices, including vaults,
teller equipment, computer work stations, furniture for the branch lobbies
and administrative offices, ATM units and other equipment. The Bank has
contracted its data processing requirements to an outside vendor.
RESULTS OF OPERATIONS
The Company reported net losses of $(138,579) and $(243,934) for the
quarter and six months ended June 30, 1998. The losses are attributable
primarily to start-up costs associated with filing fees, legal fees,
salaries, rents and other related expenses necessary to complete the
7
<PAGE>
offering and prepare the Bank to do business. The Company did earn $180,615
in interest income from the subscription funds during the quarter and
$204,061 for the six-month period.
It is expected that the Bank will have losses during its start-up period
and not break even for approximately eighteen months. Earnings from
investments by the Company of capital not invested in the Bank will
partially offset losses of the Bank and, on a consolidated basis,
break-even could be at an earlier time.
8
<PAGE>
EAGLE BANCORP, INC.
PART II - OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
None.
ITEM 2 CHANGES IN SECURITIES
None.
ITEM 3 DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
(27) Financial Data Schedule
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EAGLE BANCORP, INC.
Date: August 12, 1998 By: /s/ Ronald D. Paul
------------------------------------ ---------------------------------
Ronald D. Paul, President
Date: August 12, 1998 By: /s/ Wilmer L. Tinley
------------------------------------ ---------------------------------
Wilmer L. Tinley,
Chief Financial Officer
11
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<EXCHANGE-RATE> 1.000
<CASH> 15,734,447
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 0
<ALLOWANCE> 0
<TOTAL-ASSETS> 16,731,548
<DEPOSITS> 0
<SHORT-TERM> 0
<LIABILITIES-OTHER> 637,685
<LONG-TERM> 0
0
0
<COMMON> 16,500
<OTHER-SE> 16,077,363
<TOTAL-LIABILITIES-AND-EQUITY> 16,731,548
<INTEREST-LOAN> 0
<INTEREST-INVEST> 0
<INTEREST-OTHER> 204,061
<INTEREST-TOTAL> 204,061
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 15,699
<INTEREST-INCOME-NET> 188,362
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 432,296
<INCOME-PRETAX> (243,934)
<INCOME-PRE-EXTRAORDINARY> (243,934)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (243,934)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
