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, 2000
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 0-25923
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.)
7815 Woodmont Avenue, Bethesda, Maryland 20814
(Address of principal executive offices) (Zip Code)
(301) 986-1800
(Registrant's telephone number, including area code)
N/A
(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 7, 2000, the registrant had 2,062,474 shares of Common
Stock outstanding.
<PAGE>
Item 1 - Financial Statements
EAGLE BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
June 30, 2000 AND DECEMBER 31, 1999
ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
----------------- -----------------
<S> <C> <C>
Cash and due from banks $ 7,179,429 $ 3,831,763
Interest bearing deposits with other banks 200,000 -
Federal funds sold - 6,099,872
Investment securities available for sale 42,041,677 36,598,346
Loans (net of allowance for credit losses of $806,537 and
$579,037) 82,818,210 63,276,158
Premises and equipment, net 2,704,302 2,684,605
Other assets 1,237,062 727,575
----------------- -----------------
TOTAL ASSETS $ 136,180,680 $ 113,218,319
----------------- -----------------
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing demand $ 20,048,555 $ 16,240,731
Interest-bearing transaction accounts 15,627,460 11,990,458
Savings and money market 39,581,674 40,252,998
Time, $100,000 or more 27,924,887 13,094,189
Other time 9,758,047 9,412,671
----------------- -----------------
Total deposits 112,940,623 90,991,047
Customer repurchase agreements 7,941,507 7,982,910
Other short term borrowings 600,000 275,000
Other liabilities 555,483 294,543
----------------- -----------------
Total liabilities 122,037,613 99,543,500
----------------- -----------------
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value; 5,000,000 authorized,
2,062,474 and 1,650,000 issued and outstanding 20,625 16,500
Surplus 16,479,375 16,483,500
Accumulated deficit (2,004,794) (2,412,453)
Accumulated other comprehensive income (loss) (352,139) (412,728)
----------------- -----------------
Total stockholders' equity 14,143,067 13,674,819
----------------- -----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 136,180,680 $ 113,218,319
----------------- -----------------
</TABLE>
See notes to consolidated financial statements
2
<PAGE>
EAGLE BANCORP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX AND THREE MONTHS ENDED JUNE 30, 2000 and 1999
Three Months Three Months
<TABLE>
<CAPTION>
Six Months Ended Six Months Ended Three Months Ended Three Months Ended
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
------------------ ----------------- ------------------ ------------------
<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $ 3,229,366 $ 1,171,031 $ 1,787,359 $ 702,735
Taxable interest and dividends on investment
securities 1,174,159 731,557 625,681 352,597
Interest on federal funds and other
interest 183,175 144,624 74,511 69,697
------------------ ----------------- ------------------ ------------------
Total interest income 4,586,700 2,047,212 2,487,551 1,125,029
------------------ ----------------- ------------------ ------------------
INTEREST EXPENSE:
Interest on deposits 1,702,663 722,795 947,364 362,579
Interest on customer repurchase agreements 182,978 100,888 82,146 68,000
Interest on short-term borrowings 2,002 3,730 1,272 2,553
------------------ ----------------- ------------------ ------------------
Total interest expense 1,887,643 827,413 1,030,782 433,132
------------------ ----------------- ------------------ ------------------
NET INTEREST INCOME 2,699,057 1,219,799 1,456,769 691,597
PROVISION FOR CREDIT LOSSES 277,500 186,700 104,500 120,700
------------------ ----------------- ------------------ ------------------
NET INTEREST INCOME AFTER PROVISION FOR
CREDIT LOSSES 2,471,557 1,033,099 1,352,269 570,897
------------------ ----------------- ------------------ ------------------
NONINTEREST INCOME:
Service charges on deposit accounts 148,777 57,225 103,842 33,922
Other income 44,210 24,873 13,388 12,556
------------------ ----------------- ------------------ ------------------
Total noninterest income 192,987 82,098 117,230 46,478
------------------ ----------------- ------------------ ------------------
NONINTEREST EXPENSES:
Salaries and employee benefits 1,153,949 952,024 566,953 476,852
Premises and equipment expenses 418,858 345,558 222,236 182,992
Advertising 43,764 49,070 23,368 24,011
Office supplies 40,084 31,213 22,225 17,006
Outside data processing 112,686 62,263 67,798 37,746
Loss on sale of investment securities 65,632 - 65,632 -
Other expenses 421,912 335,424 221,166 177,804
------------------ ----------------- ------------------ ------------------
Total noninterest expenses 2,256,885 1,775,552 1,189,378 916,411
------------------ ----------------- ------------------ ------------------
NET INCOME (LOSS) BEFORE INCOME TAX BENEFIT 407,659 (660,355) 280,121 (299,036)
INCOME TAX BENEFIT - - - -
------------------ ----------------- ------------------ ------------------
NET INCOME (LOSS) $ 407,659 $ (660,355) $ 280,121 $ (299,036)
================== ================= ================== ==================
INCOME (LOSS) PER SHARE:
Basic $ 0.20 $ (0.32) $ 0.14 $ (0.14)
Diluted $ 0.20 $ (0.32) $ 0.14 $ (0.14)
</TABLE>
See notes to consolidated financial statements
3
<PAGE>
EAGLE BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 and 1999
<TABLE>
<CAPTION>
June 30, 2000 June 30, 1999
----------------- -----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 407,659 $ (660,355)
Adjustments to reconcile net income (loss) to
net cash used by operating activities:
Provision for credit losses 227,500 186,700
Depreciation and amortization 162,168 136,857
- -
Increase in other assets (509,487) (308,365)
Increase in other liabilities 260,940 89,443
----------------- -----------------
Net cash provided (used) by operating activities 548,780 (555,720)
----------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest bearing deposits with other banks $ (200,000) -
Purchases of available for sale investment securities (47,350,458) (41,642,782)
Proceeds from maturities of available for sale securities 41,967,716 37,109,540
Decrease in federal funds sold 6,099,872 396,648
Net increase in loans (19,769,552) (18,451,486)
Bank premises and equipment acquired (181,865) (313,870)
----------------- -----------------
Net cash (used) by investing activities (19,434,287) (22,901,950)
----------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in deposits 21,949,576 18,606,362
(Decrease) increase in customer repurchase (41,403) 6,733,978
Increase in federal funds purchase and other 325,000 100,000
----------------- -----------------
Net cash provided by financing activities 22,233,173 25,440,340
----------------- -----------------
NET INCREASE IN CASH 3,347,666 1,982,670
CASH AND DUE FROM BANKS AT BEGINNING OF PERIOD 3,831,763 1,292,006
----------------- -----------------
CASH AND DUE FROM BANKS AT END OF PERIOD $ 7,179,429 $ 3,274,676
----------------- -----------------
</TABLE>
See notes to consolidated financial statements
4
<PAGE>
EAGLE BANCORP, INC
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE SIX MONTHS
ENDING JUNE 30, 2000 AND 1999
<TABLE>
<CAPTION>
Accumulated
Other Total
Common Accumulated Comprehensive Stockholders'
Stock Surplus Deficit Income Equity
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balances at January 1, 1999 $ 16,500 $ 16,483,500 $(1,561,660) $ 11,155 $14,949,495
Net Loss 361,619 (361,619)
Other comprehensive income-
Unrealized loss on investment
Securities available for sale (72,071) (72,071)
-----------
Total other comprehensive loss (433,690)
-------- ------------ ----------- --------- -----------
Balances at June 30, 1999 $ 16,500 $ 16,483,500 $(1,923,279) $ (60,916) $13,782,491
-------- ------------ ----------- --------- -----------
Balances at January 1, 2000 $16,500 $16,483,500 $(2,412,453) $(412,728) $13,674,819
-----------
Net Income 407,659 407,659
Other comprehensive income-Unrealized
gain on investment securities available
for sale 60,589 60,589
-----------
Total other comprehensive income 468,248
Five for four stock split effected
in the form of a 25% stock dividend 4,125 (4,125)
-------- ------------ ----------- --------- -----------
Balances at June 30, 2000 $20,625 $16,479,375 $(2,004,794) $(352,139) $14,143,067
-------- ------------ ----------- --------- -----------
</TABLE>
5
<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 operation for the six months ended
June 30, 2000 are not necessarily indicative of the results of operations
to be expected for the remainder of the year.
2. NATURE OF BUSINESS
The Company, through its bank subsidiary, provides domestic financial
services primarily in Montgomery County, Maryland. The primary financial
services include real estate, commercial and consumer lending, as well as
traditional demand deposits and savings products.
3. INVESTMENT SECURITIES
Amortized cost and estimated market value of securities available - for -
sale are summarized as follows:
<TABLE>
<CAPTION>
June 30, 2000
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---- ----- ------ -----
<S> <C> <C> <C> <C>
U. S. Treasury securities $ 1,499,355 $ -- $ (4,035) $ 1,495,320
U. S. Government Agency securities 40,292,925 29,549 (365,644) 39,956,830
Federal Reserve Bank and
Federal Home Loan Bank stock 329,150 329,150
Other equity investments 272,386 42,024 54,033 260,377
------------ ------------ ------------- ------------
$ 42,393,816 $ 71,573 $ (423,712) $ 42,041,677
============ ============ ============= ============
<CAPTION>
December 30, 1999
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---- ----- ------ -----
<S> <C> <C> <C> <C>
U. S. Treasury securities $ 1,498,308 $ -- $ (3,933) $ 1,494,375
U. S. Government Agency securities 34,970,060 -- (403,304) 34,566,756
Federal Reserve Bank stock 271,100 -- -- 271,100
Other equity investments 271,606 43,546 49,037 266,115
------------ ------------ ------------ ------------
$ 37,011,074 $ 43,546 $ (358,200) $ 36,598,346
============ ============ ============= ============
</TABLE>
6
<PAGE>
4. 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
bases 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.
5. EARNINGS
Earnings per common share are computed by dividing net income (loss) by the
weighted average number of common shares outstanding during the period.
Diluted net income (loss) per common share is computed by dividing net
income (loss) by the weighted average number of common shares outstanding
during the period, including any potential dilutive common shares
outstanding, such as options and warrants. Earnings per share have been
restated to reflect a 25% stock dividend distributed March 31, 2000.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
This discussion and analysis provides an overview of the financial
condition and results of operations of Eagle Bancorp, Inc. ("Company") and
EagleBank ("Bank") for the six months ended June 30, 2000 and June 30,
1999.
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 policies
and 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. was incorporated under the general corporation laws of
the State of Maryland, on October 28, 1997, and is headquartered in
Bethesda, Maryland. The Company was formed to be the registered bank
holding company for EagleBank; its Maryland chartered commercial bank
subsidiary.
On July 20, 1998, having received the required approvals from the State of
Maryland and Federal Reserve System and been accepted for deposit insurance
by the FDIC, EagleBank opened its first office in Rockville, Maryland and
the Company became a bank holding company. The Company initially
capitalized the Bank with $7.75 million. Since its opening, the Bank has
established two branches in Silver Spring and its main office in Bethesda.
At June 30, 2000, the Company had made total capital contributions to the
Bank of $14.75 million. The Company monitors the Bank's growth and plans to
make additional contributions to the Bank's capital at such times, as it
deems necessary in order to maintain the Bank's capital at appropriate
levels. These contributions are from proceeds of the Company's original
offering which have been retained at the Company. In view of strong growth
at the Bank, discussed in this analysis, the Company made a capital
contribution in June sufficient to allow the Bank to maintain adequate
capital levels and to accommodate reasonable levels of anticipated further
growth.
FINANCIAL CONDITION
As of June 30, 2000, assets were $136.2 million and deposits and customer
repurchase agreements were $120.9 million, an increase from year end 1999
of 20.3% and 14.1% respectively. Management is pleased with the growth
experienced during the six months and the fact that it represents core
growth from a cross section of businesses targeted by the Bank. While the
Bank does not rely on or solicit brokered deposits, regulatory rules
require that $16 million of deposits at June 30, 2000 and $15 million of
deposits at December 31,1999 be classified as brokered deposits. The source
of these funds is a customer well known and with ties to the Bank and
management considers the relationship to be a core deposit relationship.
Loans increased $19.8 million for the six months as compared to year end
1999. This represents an increase of 30.9% for the period. Management is
pleased with the continued growth in the loan portfolio and the quality of
loans it has been able to consider.
At June 30, 2000, the Bank had federal funds purchased of $600 thousand, in
addition to $7.9 million in customer repurchase agreements. The purchase of
federal funds was consistent with the Bank's funds management policy and
was for short term funding of loans originated by the Bank. The Bank
anticipates the
8
<PAGE>
use of federal funds purchased and reverse repurchase agreements for funds
management purposes in addition to the sales of securities from the
investment portfolio.
RESULTS OF OPERATIONS
On a consolidated basis the Company recorded net income of $407,659 for the
six months ended June 30, 2000, as compared to a loss of $660,355 for the
six months ended June 30, 1999. The income for the quarter ended June 30,
2000 was $280,121, as compared to a loss of $299,036 for the quarter ended
June 30, 1999. Per share income was $0.20 for the six months and $0.14 for
the quarter ended June 30,2000 as compared to per share losses of $0.32 for
the six months ended June 30,1999 and $0.14 for the quarter ended June
30,1999. The reported income for the six months is the direct result of
strong deposit and loan growth and careful management of the Bank's cost of
funds.
As noted above, the Company ended the six months with deposits and customer
repurchase agreements at $120.9 million and increased lending activity
resulted in a net increase in loans, from year end, of $19.8 million. The
loan growth in the first six months continued to reflect management's
commitment to maintain a high quality portfolio, which returns reasonable
market rates. Growth in both deposits and loans were consistent with
management's expectations, however, management notes increasing competition
for both deposits and loans.
The Company and Bank plan to maintain the allowance for credit losses at an
adequate level and ended the six months with an allowance of 1.00% of its
outstanding loans adjusted for cash and marketable securities secured
loans. The Bank has adopted a loan allowance analysis process, which it
employs to assist in establishing the level of the allowance.
NET INTEREST INCOME
Net interest income is the difference between income on assets and the cost
of funds supporting those assets. Earning assets are composed primarily of
loans and investments; interest bearing deposits and customer repurchase
agreements and other borrowings make up the cost of funds. Noninterest
bearing deposits and capital are other components representing funding
sources. Changes in the volume and mix of assets and funding sources along
with the changes in yields earned and rates paid, determine changes in net
interest income.
The net interest income for the six months ended June 30, 2000, was
$2,699,057, as compared to $1,219,799 for the period ended June 30, 1999.
This improvement is a result of the growth in earning assets and to a
lesser degree the increase in interest rates initiated by the Federal
Reserve. Total interest income for the period ended June 30, 2000, was
$4,586,700 compared to $2,047,212 for the period ended June 30, 1999.
Total interest expense was $1,887,643 for the six months ended June 30,
2000 and $827,413 for the six months ended June 30, 1999. The increase, as
with the increase in interest income, reflects an increase in volume, the
growth of interest bearing deposits and customer repurchase agreements, and
to a lesser degree interest rates paid on deposits.
The following average balance, interest yields and rates, and net interest
margain table, reflects the improvement in spreads and margin, from the
first six months of 1999 to the first six months of 2000, as they were
impacted by the growth in earning assets and the change in mix from
investments to loans.
AVERAGE BALANCES, INTEREST YIELDS, AND RATES, AND NET INTEREST MARGIN
SIX MONTHS ENDED JUNE 30,
<TABLE>
<CAPTION>
2000 1999
---- ----
Average Average Average Average
Balance Interest Yield/Rate Balance Interest Yield/Rate
------- -------- ---------- ------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Interest earnings assets:
Loans $ 72,138,275 $3,229,366 9.00% $27,589,437 $1,171,031 8.54%
Investment securities 39,384,851 1,174,159 6.00% 28,630,647 731,577 5.14%
Federal funds sold and other
interest 6,234,829 183,175 5.91% 6,198,037 144,604 4.69%
------------ ---------- ---- ----------- ---------- ----
Total interest earning assets 117,757,955 4,586,700 7.83% 62,418,121 2,047,212 5.67%
------------ ---------- ----------- ----------
Total noninterest earning assets 7,860,269 5,298,647
Less: allowance for credit losses 672,696 230,834
------------ -----------
Total noninterest earning assets 7,187,573 5,067,813
------------ -----------
TOTAL ASSETS $124,945,528 $67,485,934
------------ -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest bearing liabilities:
NOW accounts 13,872,220 131,304 1.90% 8,386,655 68,776 1.65%
Savings and money market accounts 37,936,201 790,110 4.19% 18,566,004 352,310 3.82%
Certificates of deposit 31,438,950 781,249 5.00% 12,879,295 301,709 4.71%
Customer repurchase agreements 8,988,877 182,978 4.09% 4,921,286 100,888 4.12%
Short term borrowings 66,667 2,002 6.04% 128,571 3,730 5.83%
------------ ---------- ---- ----------- ---------- ----
Total ineterest bearing liabilities 92,302,915 1,887,643 4.11% 44,881,811 827,413 3.71%
------------ ---------- ----------- ---------- ----
Non interest bearing liabilities:
Non interest bearing deposits 18,164,819 7,283,536
Other liabilities 482,674 281,141
------------ -------
Total non interest bearing liabilities 18,647,493 7,564,677
---------
Stockholders equity 13,995,120 15,039,446
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $124,945,528 $ 67,485,934
------------ ------------
Net interest income $2,699,057 $ 1,219,799
---------- -----------
Net interest spread 3.72% 1.96%
Net interest margin 4.61% 3.93%
</TABLE>
ALLOWANCE AND PROVISION FOR CREDIT LOSSES
The provision for credit losses represents the expense recognized to fund
the allowance for credit losses. This amount is based on many factors,
which reflect management's assessment of the risk in its loan portfolio.
Those factors include economic conditions and trends, the value and
adequacy of collateral, volume and mix of the portfolio, performance of the
portfolio, and internal loan processes.
9
<PAGE>
At June 30, 2000, the allowance for credit losses was 1.00% of outstanding
loans excluding loans secured by cash and/or readily marketable securities.
The allowance has been established based principally on current economic
conditions, perceived asset quality, results of external loan reviews
and the Bank's internal allowance analysis process which includes analysis
of peer group loss experience. Given these considerations the allowance is
believed to be adequate. At June 30, there were no loans past due more
than thirty days and no debt had been restructured. For the six months
ended June 30, 2000, the Company made a provision for possible credit
losses of $277,500.
NONINTEREST INCOME
Noninterest income primarily represents deposit account service charges and
fees and noninterest loan fees. For the six months ended June 30, 2000
noninterest income amounted to $192,987, as compared to $82,098 for the
period ended June 30, 1999 the increase is reflective of the overall growth
of the Bank and its customer base. Management is continually seeking
sources of noninterest income and in late 1999 established a residential
construction/permanent loan function, which will generate fees, in addition
to interest, as loans are sold.
EagleCapital a division of the Bank has been formed to refer commercial
real estate loans beyond the abilities of the Bank, to brokers for a fee.
This activity is expected to add significantly to noninterest income.
NONINTEREST EXPENSE
Noninterest expense was $2,256,885 for the six month period ended June 30,
2000 compared to $1,775,552 for the period ended June 30, 1999. Principal
among noninterest expenses is emplyment costs which increased from $952,024
for the first six months of 1999 to $1,153,949 for the first six months of
2000. This increase reflects the growth of the Bank as it added one new
branch, new support personnel and a new lender
Included in June 30, 2000, noninterest expense is a loss on sale of
investment securities of $65,632. This loss was planned as management
elected to sell certain Bank securities and reinvest the proceeds in
higher yielding securities, of equal quality, thereby increasing the
overall portfolio yield. This strategy resulted in an increase in portfolio
income sufficient to offset the loss by December 31, 2000, and assure
higher yields for a period of one to two years beyond that date.
Management has made a concentrated effort to budget and monitor noninterest
expenses and believes it has established practices to control these
expenses while meeting the requirements of an aggressively growing bank.
LIQUIDITY
Liquidity is a measure of the Bank's ability to meet the demands required
for the funding of loans and to meet depositors requirements for use of
their funds. The Bank's sources of liquidity are made up of cash balances,
due from banks, federal funds sold and short term securities. There are
other sources of liquidity which at this time are not relied on by the
Bank but as the Bank matures those sources, such as Federal Home Loan Bank
advances, will also be considered for liquidity.
At June 30, 2000, the Bank's liquidity formula reported $20 million of
liquidity in excess of the amount which might be required to meet
projected and contingent needs.
CAPITAL
The following table shows the Company and Bank capital ratios and the
corresponding minimum regulatory requirements. As reflected in the table
the Company and Bank exceed all capital ratio requirements:
Capital ratios and minimum regulatory guidlines at June 30, 2000:
Minimum
Actual Guidelines
------ ----------
Total Risk-Based Capital:
Company 12.75% 8.00%
Bank 11.35% 8.00%
Tier 1 Risk-Based Capital:
Company 11.86% 4.00%
Bank 10.70% 4.00%
Leverage Ratio
Company 11.06% 8.00%
Bank 9.93% 8.00%
10
<PAGE>
PART II OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
None.
ITEM 2 CHANGES IN SECURITIES
Use of Proceeds. On February 9, 1998, the Company's
registration statement on Form SB-2 (No. 333-42083) relating to its
initial offering of common stock, $.01 par value, was declared
effective by the Securities and Exchange Commission, and the offering
commenced, on May 13, 1999, the Company's registration statement on
Form SB-2 (No. 333-51197), registering an additional 270,000 shares,
was declared effective. On June 22, 1998, the offering was terminated.
All of the 1,650,000 shares being offered having been sold at the
offering price of $10.00 per share. Aggregate expenses of the offering
were $100,413, resulting in net proceeds of the offering of
$16,399,587. No person or entity underwrote the Company's offering,
which was made through the efforts of the Company's organizing
directors and executive officers, with the limited assistance of Koonce
Securities, Inc. in order to comply with the securities laws of certain
of the states in which the shares were offered. Koonce received a fee
of $10,000 for its services in connection with the offering, and
reimbursement of $1,280 in out of pocket expenses.
During the Company's organizational period, certain directors
of the Company made advances to the Company which were repaid from the
proceeds of the offering, with an aggregate of $5,010 in interest,
representing interest at the prime rate, as adjusted on a monthly
basis. A portion of the loans was converted, without interest, into
payment for subscriptions for common stock in the offering.
An aggregate of $14,750,000 has been contributed through June
30, 2000 to the capital of the Bank for use in its lending and
investment activities. An aggregate of $3,054,000 has been expended by
the Bank in renovation, construction and equipping of its main office
and three branch offices. The remaining proceeds of the offering
retained by the Company are held in temporary investments pending
contribution to the Bank.
ITEM 3 DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the May 24, 2000, Annual Meeting of Shareholders the following
matters were submitted to a vote and approved:
(a) Election of six directors to serve a one year term ending on
the next Annual Meeting date:
Leonard L. Abel
Dudley C. Dworken
Eugene F. Ford, Sr.
William A. Koier
Ronald D. Paul
H. L. Ward
The named directors constitute the entire board of directors
and each was elected at the Annual Meeting.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
11
<PAGE>
(11) Statement Re: Computation of Per Share Earnings
(21) Subsidiaries of the Registrant
The only subsidiary of the registrant is EagleBank; a
Maryland chartered commercial banking company.
(27) Financial Data Schedule
(b) Reports on Form 8-K
None.
12
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
(11) Statement Re: Computation of Per Share Earnings
(21) Subsidiaries of the Registrant
The only subsidiary of the registrant is EagleBank; a
Maryland chartered commercial banking company.
(27) Financial Data Schedule
13
<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 14, 2000 By: /s/ Ronald D. Paul
---------------------------------------------
Ronald D. Paul, President
Date: August 14, 2000 By: /s/ Wilmer L. Tinley, Jr
--------------------------------------------
Wilmer L. Tinley, Senior Vice President, CFO
14
