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 March 31, 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
--------------------------------
EAGLE BANCORP, INC.
------------------------------------------------------
(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.)
8101 Glenbrook Road, Bethesda, Maryland 20814
- --------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
(301) 986-1800
----------------------------------------------------
(Registrant's telephone number, including area code)
<TABLE>
<CAPTION>
<S> <C>
(Former name, former address and former fiscal year, if changed since last report)
- ----------------------------------------------------------------------------------
</TABLE>
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 No X
--- ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practical date.
As of March 31, 1998, registrant had outstanding no shares of Common
Stock.
<PAGE>
EAGLE BANCORP, INC.
FORM 10-QSB
INDEX
- --------------------------------------------------------------------------------
PART I - FINANCIAL INFORMATION PAGE
----
Item 1 - Financial Statements (Unaudited)
Balance Sheets - March 31, 1998
and December 31, 1997 1
Statements of Operations 2
Statements of Changes in Stockholders' Deficit 3
Statements of Cash Flows 4
Notes to Financial Statements 5 - 7
Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
PART II - OTHER INFORMATION 9 - 10
SIGNATURES 11
<PAGE>
PART I
Item 1
EAGLE BANCORP, INC.
(A Development Stage Company)
BALANCE SHEETS
MARCH 31, 1998 AND DECEMBER 31, 1997
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
---------- ------------
<S> <C> <C>
Cash and cash equivalents $10,111,309 $ 7,214
Leasehold improvements 24,140 -
Equipment - net 3,484 3,832
Deposits 23,750 -
----------- ----------
TOTAL ASSETS $10,162,683 $ 11,046
=========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
LIABILITIES:
Accounts payable and accrued expenses $ 25,941 $ 43,249
Common stock subscription funds 9,934,300 -
Payable to organizers 470,000 130,000
----------- ----------
Total liabilities 10,430,241 173,249
----------- ----------
STOCKHOLDERS' DEFICIT:
Common stock, $.01 par, 5,000,000 shares
authorized, no shares issued and outstanding - -
Preferred stock, $.01 par, 1,000,000 shares
authorized, no shares issued and outstanding - -
Surplus - -
Deficit (267,558) (162,203)
----------- ----------
Total stockholders' deficit (267,558) (162,203)
----------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
DEFICIT $10,162,683 $ 11,046
=========== ==========
</TABLE>
1
<PAGE>
EAGLE BANCORP, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Period from For the Period from
Three Months October 28, 1997 October 28, 1997
Ended (Date of Inception) (Date of Inception)
March 31, 1998 to December 31, 1997 to March 31, 1998
-------------- -------------------- -------------------
<S> <C> <C> <C>
REVENUES - Interest income $ 23,446 $ - $ 23,446
---------- ----------- ----------
EXPENSES:
Depreciation 348 348 696
Filing fees 1,356 18,354 19,710
Interest 5,082 1,056 6,138
Legal 13,888 77,892 91,780
Accounting 2,000 - 2,000
Payroll taxes and employee benefits 6,068 6,358 12,426
Salaries 66,696 51,912 118,608
Other 33,363 6,283 39,646
---------- ----------- ----------
Total expenses 128,801 162,203 291,004
---------- ----------- ----------
LOSS BEFORE INCOME TAX BENEFIT (105,355) (162,203) (267,558)
---------- ----------- ----------
INCOME TAX BENEFIT - - -
---------- ----------- ----------
NET LOSS $ (105,355) $ (162,203) $ (267,558)
========== =========== ==========
</TABLE>
2
<PAGE>
EAGLE BANCORP, INC.
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
<TABLE>
<CAPTION>
Common
Stock Surplus Deficit
------------ ---------- ---------
<S> <C> <C> <C>
BALANCES AT OCTOBER 28, 1997 $ - $ - $ -
Net loss - - (162,203)
---------- --------- ---------
BALANCES AT DECEMBER 31, 1997 - - (162,203)
Net loss - - (105,355)
----------- --------- ---------
BALANCES AT MARCH 31, 1998 $ - $ - $(267,558)
========== ========= =========
</TABLE>
3
<PAGE>
EAGLE BANCORP, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
For the Period from For the Period from
Three Months October 28, 1997 October 28, 1997
Ended (Date of Inception) (Date of Inception)
March 31, 1998 to December 31, 1997 to March 31, 1998
-------------- -------------------- -------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss $ (105,355) $(162,203) $ (267,558)
Adjustments to reconcile net loss to net
cash used by operating activities:
Depreciation 348 348 696
(Decrease) increase in accounts payable
and accrued expenses (17,308) 43,249 25,941
------------ ----------- -----------
Net cash used in operating activities (122,315) (118,606) (240,921)
------------ ----------- -----------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Acquisition of equipment - (4,180) (4,180)
Increase in leasehold improvements (24,140) - (24,140)
Increase in deposits (23,750) - (23,750)
------------ ----------- -----------
Net cash used in investing activities (47,890) (4,180) (52,070)
------------ ----------- -----------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Increase in payable to organizers 340,000 130,000 470,000
Increase in common stock subscription funds 9,934,300 - 9,934,300
------------ ----------- -----------
Net cash provided by financing activities 10,274,300 130,000 10,404,300
------------ ----------- -----------
NET INCREASE IN CASH AND
CASH EQUIVALENTS 10,104,095 7,214 10,111,309
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 7,214 - -
------------ ----------- -----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 10,111,309 $ 7,214 $10,111,309
============ =========== ===========
Supplemental cash flows information:
Interest payments $ - $ - $ -
============ =========== ===========
Income tax payments $ - $ - $ -
============ =========== ===========
</TABLE>
4
<PAGE>
EAGLE BANCORP, INC.
(A Development Stage Company)
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 three months
ended March 31, 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 prospectus
dated February 9, 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. It is intended
that the Company will purchase all the shares of common stock to be issued
by EagleBank (the "Bank"). An application to organize the Bank was filed
with the Maryland Department of Financial Regulation on December 5, 1997.
The Bank has not commenced operations and will not do so unless the public
offering of stock by the Company is completed and the Bank meets the
conditions of the Maryland Department of Financial Regulation to receive
its charter authorizing it to commence operations as a commercial bank, and
has obtained the approval of the FDIC to insure its deposit accounts.
3. DEVELOPMENT STAGE COMPANY
The Company is currently devoting substantially all of its efforts
establishing a new banking business and raising capital, accordingly, the
Company meets the criteria defined by Statement of Financial Accounting
Standards (SFAS) No. 7, "Accounting and Reporting by Development Stage
Enterprises."
4. 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. This accounting pronouncement shall apply to the Company when
and if common stock of the Company is issued. As of March 31, 1998, the
Company had no shares of common stock outstanding.
5
<PAGE>
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 December 15,
1997. Reclassification of financial statements for earlier periods provided
for comparative purposes is required. For the period from October 28, 1997
(date of inception) through March 31, 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.
5. 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.
6. COMMON STOCK SUBSCRIPTION FUNDS
As a result of the Company's prospectus dated February 9, 1998, the
Company, through an escrow agent, has been receiving subscriptions for the
Company's common stock. These funds are invested in U.S. Treasury bills and
repurchase agreements. If the Company or the Bank does not receive all
necessary regulatory approvals, the subscription funds will be returned to
the investors.
7. PAYABLE TO ORGANIZERS
Organizers of the Company have advanced an aggregate of $470,000 to pay
certain organization expenses (principally legal fees, filing fees and
salaries). These advances are to be repaid with interest at the prime rate
from the proceeds of the common stock offering at the time the Company
opens for business. One organizer has obtained a line of credit in the
amount of $350,000 for the purpose of funding additional expenses of the
Company through additional organizer advances. Organization expenses will
be expensed as incurred.
6
<PAGE>
8. 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.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
Eagle Bancorp, Inc. (the "Company") is a proposed bank holding company
which is, as of March 31, 1998, in the process of offering up to 1,200,000
shares of its common stock at a price of $10.00 per share (the "Offering").
As of March 31, 1998, the Company is devoting substantially all of its
efforts to establishing a new banking business and raising capital and is
therefore defined as a development stage company.
As of March 31, 1998, neither the Company nor the Bank has commenced
operations or engaged in any activities except those related to the
organization of the Company and the Bank and raising capital. Such limited
activities have been financed solely by advances, by certain organizers of
the Company. One organizer has obtained a $350,000 line of credit from an
unaffiliated bank, of which $225,000 has been drawn, for purposes of
financing additional advances. All advances will be repaid from the
proceeds of the Offering with interest at the prime rate, adjusted monthly.
If the Offering is not completed, no other person or entity is obligated to
repay the aggregate advances to the organizers. This temporary funding
source is expected to be sufficient to meet the Company's needs until the
sale of Shares pursuant to the Offering is completed.
It is anticipated that the Bank will incur approximately $1.49 million in
expenses 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 will
contract its data processing requirements to an outside vendor. The Company
had two full time employees at March 31, 1998, and expects to have twenty
five employees at the Bank level after all three planned branches have
opened.
SUBSCRIPTION FOR COMMON STOCK
As of March 31, 1998, the Company has received $9,934,300 in subscription
funds as a result of the Offering. These funds are invested in U.S.
Treasury bills and repurchase agreements. If the Company or Bank does not
receive all necessary regulatory approvals, the subscription funds will be
returned to the investors.
RESULTS OF OPERATIONS
The Company reported a net loss of $(105,355) for the quarter ended March
31, 1998. From date of inception to March 31, 1998 the Company reports a
cumulative loss of $(267,558). The loss is attributable primarily to
start-up costs associated with filing fees, legal fees and salary expenses.
The Company did earn $23,446 in interest income from the subscription funds
during the first quarter of 1998.
8
<PAGE>
EAGLE BANCORP, INC.
PART II - OTHER INFORMATION
Item 6 - Exhibits
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: April 28, 1998 By: /s/ Ronald D. Paul
------------------------- -----------------------------------------
Ronald D. Paul, President and Treasurer
(Principal Executive, Finaacial and
Accounting Officer)
10
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1
<CURRENCY> U.S DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1.000
<CASH> 10,111,309
<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> 10,162,683
<DEPOSITS> 0
<SHORT-TERM> 0
<LIABILITIES-OTHER> 10,430,241
<LONG-TERM> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITIES-AND-EQUITY> 10,162,683
<INTEREST-LOAN> 0
<INTEREST-INVEST> 0
<INTEREST-OTHER> 23,446
<INTEREST-TOTAL> 23,446
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 0
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 128,801
<INCOME-PRETAX> (105,355)
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (105,355)
<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>
