Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-Q
x
|
QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF
1934
|
|
For
the quarterly period ended September 30,
2008
|
¨
|
TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT
|
|
For
the transition period from _____ to
_____.
|
Commission
file number 0-29687
Eagle
Bancorp
(Exact
name of small business issuer as specified in its charter)
United
States
|
|
81-0531318
|
(State
or other jurisdiction of incorporation or organization)
|
|
(I.R.S.
Employer Identification No.)
|
1400
Prospect Avenue, Helena, MT 59601
(Address
of principal executive offices)
(406)
442-3080
(Issuer's
telephone number)
Website
address:
www.americanfederalsavingsbank.com
Check
whether the issuer (1) filed all reports to be filed by Section 13 or 15(d)
of
the Exchange Act during the past 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
by a check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company.
See
the definitions of “large accelerated filer”, “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer ¨
|
Accelerated
filer ¨
|
Non-accelerated
filer ¨
|
Smaller
reporting company x
|
(Do
not check if smaller reporting company)
|
|
Indicate
by check mark whether the registrant is a shell company (defined in Rule
12b-2
of the Exchange Act). Yes ¨ No x
APPLICABLE
ONLY TO CORPORATE ISSUERS
State
the
number of shares outstanding of each of the issuer's classes of common equity,
as of the latest practicable date:
Common
stock, par value $0.01 per share
|
1,075,312
shares outstanding
|
As
of
November 10, 2008
EAGLE
BANCORP AND SUBSIDIARY
TABLE
OF
CONTENTS
|
|
PAGE
|
PART
I.
|
FINANCIAL
INFORMATION
|
|
|
|
|
Item
1.
|
Financial
Statements
|
|
|
|
|
|
Consolidated
Statements of Financial Condition as of September 30, 2008 (unaudited)
and
June 30, 2008
|
1
and 2
|
|
|
|
|
Consolidated
Statements of Income for the three months ended September 30, 2008
and
2007 (unaudited)
|
3
and 4
|
|
|
|
|
Consolidated
Statements of Changes in Stockholders' Equity for the three months
ended
September 30, 2008 and September 30, 2007(unaudited)
|
5
|
|
|
|
|
Consolidated
Statements of Cash Flows for the three months ended September 30,
2008 and
2007 (unaudited)
|
6
and 7
|
|
|
|
|
Notes
to Consolidated Financial Statements
|
8
to 15
|
|
|
|
Item
2.
|
Management's
Discussion and Analysis of Financial Condition or Plan of
Operations
|
16
to 20
|
|
|
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
21
|
|
|
|
Item
4.
|
Controls
and Procedures
|
22
|
|
|
|
PART
II.
|
OTHER
INFORMATION
|
|
|
|
|
|
Legal
Proceedings
|
23
|
Item
1A.
|
Risk
Factors
|
23
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
23
|
Item
3.
|
Defaults
Upon Senior Securities
|
23
|
Item
4.
|
Submission
of Matters to a Vote of Security-Holders
|
24
|
Item
5.
|
Other
Information
|
24
|
Item
6.
|
Exhibits
|
24
|
|
|
|
Signatures
|
|
25
|
|
|
|
Exhibit
31.1
|
|
|
|
|
|
Exhibit
31.2
|
|
|
|
|
|
Exhibit
32.1
|
|
|
EAGLE
BANCORP AND SUBSIDIARY
CONSOLIDATED
STATEMENTS OF FINANCIAL CONDITION
(Dollars
in Thousands, Except for Per Share Data)
|
|
September 30,
|
|
June 30,
|
|
|
|
2008
|
|
2008
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
ASSETS
|
|
|
|
|
|
|
|
Cash
and due from banks
|
|
$
|
2,380
|
|
$
|
3,541
|
|
Interest-bearing
deposits with banks
|
|
|
1,807
|
|
|
549549
|
|
Total
cash and cash equivalents
|
|
|
4,187
|
|
|
4,090
|
|
|
|
|
|
|
|
|
|
Preferred
stock - SFAS 159, at market value
|
|
|
82
|
|
|
1,321
|
|
Securities
available-for-sale, at market value
|
|
|
77,278
|
|
|
78,417
|
|
Securities
held-to-maturity, at cost (fair value approximates $399 at September
30,
2008 and
$708
at June 30, 2008)
|
|
|
389
|
|
|
697
|
|
Investment
in Eagle Bancorp Statutory Trust I
|
|
|
155
|
|
|
155
|
|
Federal
Home Loan Bank stock, at cost
|
|
|
1,881
|
|
|
1,715
|
|
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
|
|
Other
assets
|
|
|
1,102
|
|
|
550
|
|
Total
assets
|
|
$
|
284,036
|
|
$
|
279,907
|
|
See
accompanying notes to consolidated financial statements.
EAGLE
BANCORP AND SUBSIDIARY
CONSOLIDATED
STATEMENTS OF FINANCIAL CONDITION (Continued)
(Dollars
in Thousands, Except for Per Share Data)
|
|
September 30,
|
|
June 30,
|
|
|
|
2008
|
|
2008
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
Deposit
accounts:
|
|
|
|
|
|
|
|
Noninterest
bearing
|
|
$
|
15,178
|
|
$
|
14,617
|
|
Interest
bearing
|
|
|
167,917
|
|
|
164,234
|
|
Federal
funds purchased
|
|
|
-
|
|
|
3,000
|
|
Advances
from Federal Home Loan Bank and other borrowings
|
|
|
68,919
|
|
|
65,222
|
|
Subordinated
debentures
|
|
|
5,155
|
|
|
5,155
|
|
Accrued
expenses and other liabilities
|
|
|
2,696
|
|
|
2,045
|
|
Total
liabilities
|
|
|
259,865
|
|
|
254,273
|
|
Stockholders'
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 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
stockholders' equity
|
|
|
24,171
|
|
|
25,634
|
|
|
|
|
|
|
|
|
|
Total
liabilities and stockholders' equity
|
|
$
|
284,036
|
|
$
|
279,907
|
|
See
accompanying notes to consolidated financial statements.
EAGLE
BANCORP AND SUBSIDIARY
QUARTERLY
CONSOLIDATED STATEMENTS OF INCOME
(Dollars
in Thousands, Except for Per Share Data)
|
|
Three Months Ended
|
|
|
|
September 30,
|
|
|
|
2008
|
|
2007
|
|
|
|
(Unaudited)
|
|
Interest
and Dividend Income:
|
|
|
|
|
|
|
|
Interest
and fees on loans
|
|
$
|
2,837
|
|
$
|
2,668
|
|
Interest
on deposits with banks
|
|
|
4
|
|
|
7
|
|
Securities
held-to-maturity
|
|
|
5
|
|
|
9
|
|
Securities
available-for-sale
|
|
|
963
|
|
|
722
|
|
FHLB
dividends
|
|
|
7
|
|
|
2
|
|
Total
interest and dividend income
|
|
|
3,816
|
|
|
3,408
|
|
|
|
|
|
|
|
|
|
Interest
Expense:
|
|
|
|
|
|
|
|
Deposits
|
|
|
862
|
|
|
1,185
|
|
FHLB
advances and 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
|
|
|
-
|
|
|
-
|
|
Net
interest income after loan loss provision
|
|
|
2,236
|
|
|
1,709
|
|
|
|
|
|
|
|
|
|
Noninterest
income:
|
|
|
|
|
|
|
|
Net
gain on sale of loans
|
|
|
183
|
|
|
199
|
|
Service
charges on deposit accounts
|
|
|
190
|
|
|
166
|
|
Mortgage
loan servicing fees
|
|
|
140
|
|
|
133
|
|
Net
gain on sale of available-for-sale securities
|
|
|
57
|
|
|
-
|
|
Net
loss on preferred stock - SFAS 159
|
|
|
(1,239
|
)
|
|
(41
|
)
|
Other
|
|
|
165
|
|
|
127
|
|
Total
noninterest income
|
|
|
(504
|
)
|
|
584
|
|
See
accompanying notes to consolidated financial statements.
EAGLE
BANCORP AND SUBSIDIARY
QUARTERLY
CONSOLIDATED STATEMENTS OF INCOME (Continued)
(Dollars
in Thousands, Except for Per Share Data)
|
|
Three Months Ended
|
|
|
|
September 30,
|
|
|
|
2008
|
|
2007
|
|
|
|
(Unaudited)
|
|
Noninterest
expense:
|
|
|
|
|
|
|
|
Salaries
and employee benefits
|
|
|
1,046
|
|
|
946
|
|
Occupancy
expenses
|
|
|
149
|
|
|
135
|
|
Furniture
and equipment depreciation
|
|
|
67
|
|
|
71
|
|
In-house
computer expense
|
|
|
73
|
|
|
74
|
|
Advertising
expense
|
|
|
91
|
|
|
63
|
|
Amortization
of mortgage servicing fees
|
|
|
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
|
|
|
|
|
|
|
|
|
|
(Loss)
income before provision for income taxes
|
|
|
(117
|
)
|
|
625
|
|
|
|
|
|
|
|
|
|
(Benefit)
provision for income taxes
|
|
|
(17
|
)
|
|
161
|
|
|
|
|
|
|
|
|
|
Net
(Loss) income
|
|
$
|
(100
|
)
|
$
|
464
|
|
|
|
|
|
|
|
|
|
Basic
(loss) earnings per share
|
|
$
|
(0.09
|
)
|
$
|
0.43
|
|
|
|
|
|
|
|
|
|
Diluted
(loss) earnings per 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
|
|
See
accompanying notes to consolidated financial statements.
EAGLE
BANCORP AND SUBSIDIARY
QUARTERLY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
For
the
Three Months Ended September 30, 2008 and 2007
(Dollars
in Thousands, Except for Per Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ACCUMULATED
|
|
|
|
|
|
|
|
|
|
ADDITIONAL
|
|
UNALLOCATED
|
|
|
|
|
|
OTHER
|
|
|
|
|
|
PREFERRED
|
|
COMMON
|
|
PAID-IN
|
|
ESOP
|
|
TREASURY
|
|
RETAINED
|
|
COMPREHENSIVE
|
|
|
|
|
|
STOCK
|
|
STOCK
|
|
CAPITAL
|
|
SHARES
|
|
STOCK
|
|
EARNINGS
|
|
INCOME
|
|
TOTAL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
June 30, 2007
|
|
$
|
-
|
|
$
|
12
|
|
$
|
4,387
|
|
$
|
(92
|
)
|
$
|
(4,759
|
)
|
$
|
25,448
|
|
$
|
(908
|
)
|
$
|
24,088
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
464
|
|
|
-
|
|
|
464
|
|
Other
comprehensive income
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
556
|
|
|
556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
comprehensive income
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(1,020
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
paid ($.24 per share)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(105
|
)
|
|
-
|
|
|
(105
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Treasury
stock purchased ; (1,250 shares @ $33.00)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(42
|
)
|
|
-
|
|
|
-
|
|
|
(42
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FAS
159 Adjustment
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(103
|
)
|
|
|
|
|
(103
|
)
|
ESOP
shares allocated or committed to be released for allocation (1,150
shares)
|
|
|
-
|
|
|
-
|
|
|
27
|
|
|
10
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
September 30, 2007
|
|
$
|
-
|
|
$
|
12
|
|
$
|
4,414
|
|
$
|
(82
|
)
|
$
|
(4,801
|
)
|
$
|
25,704
|
|
$
|
(352
|
)
|
$
|
24,895
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
June 30, 2008
|
|
$
|
-
|
|
$
|
12
|
|
$
|
4,487
|
|
$
|
(55
|
)
|
$
|
(5,013
|
)
|
$
|
27,025
|
|
$
|
(822
|
)
|
$
|
25,634
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(100
|
)
|
|
-
|
|
|
(100
|
)
|
Other
comprehensive income
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(1,134
|
)
|
|
(1,134
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
comprehensive income
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(1,234
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
paid ($.255 per share)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(109
|
)
|
|
-
|
|
|
(109
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Treasury
stock purchased ; (760 shares @ $27.00)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(21
|
)
|
|
-
|
|
|
-
|
|
|
(21
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EITF
No. 06-4 & 06-10
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(129
|
)
|
|
|
|
|
(129
|
)
|
ESOP
shares allocated or committed to be released for allocation (1,150
shares)
|
|
|
-
|
|
|
-
|
|
|
21
|
|
|
9
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
September 30, 2008
|
|
$
|
-
|
|
$
|
12
|
|
$
|
4,508
|
|
$
|
(46
|
)
|
$
|
(5,034
|
)
|
$
|
26,687
|
|
$
|
(1,956
|
)
|
$
|
24,171
|
|
See
accompanying notes to consolidated financial statements.
EAGLE
BANCORP AND SUBSIDIARY
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Dollars
in Thousands, Except for Per Share Data)
|
|
Three Months Ended
|
|
|
|
September 30,
|
|
|
|
2008
|
|
2007
|
|
|
|
(Unaudited)
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Net
(loss) income
|
|
$
|
(100
|
)
|
$
|
464
|
|
Adjustments
to reconcile net income to net cash from operating
activities:
|
|
|
|
|
|
|
|
Loan
loss provision
|
|
|
-
|
|
|
|
|
Provision
for mortgage servicing rights valuation losses
|
|
|
-
|
|
|
|
|
Depreciation
|
|
|
112
|
|
|
116
|
|
Net
amortization of marketable securities premium and
discounts
|
|
|
50
|
|
|
64
|
|
Amortization
of capitalized mortgage servicing rights
|
|
|
71
|
|
|
66
|
|
Gain
on sale of loans
|
|
|
(183
|
)
|
|
(199
|
)
|
Loss
on sale of real estate owned
|
|
|
-
|
|
|
-
|
|
Net
realized loss (gain) on sale of available-for-sale
securities
|
|
|
(57
|
)
|
|
-
|
|
Increase
in cash surrender value of life insurance
|
|
|
(60
|
)
|
|
(49
|
)
|
Loss
on preferred stock - SFAS 159
|
|
|
1,239
|
|
|
41
|
|
Change
in assets and liabilities:
|
|
|
|
|
|
|
|
(Increase)
decrease in assets:
|
|
|
|
|
|
|
|
Accrued
interest and dividends receivable
|
|
|
(67
|
)
|
|
(3
|
)
|
Loans
held-for-sale
|
|
|
6,131
|
|
|
(1,327
|
)
|
Other
assets
|
|
|
(552
|
)
|
|
210
|
|
Increase
(decrease) in liabilities:
|
|
|
|
|
|
|
|
Accrued
expenses and other liabilities
|
|
|
1,038
|
|
|
372
|
|
Net
cash provided by (used in) operating activities
|
|
|
7,622
|
|
|
(245
|
)
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Purchase
of securities:
|
|
|
|
|
|
|
|
Investment
securities available-for-sale
|
|
|
(8,152
|
)
|
|
(1,858
|
)
|
Proceeds
from maturities, calls and principal payments:
|
|
|
|
|
|
|
|
Investment
securities held-to-maturity
|
|
|
308
|
|
|
173
|
|
Investment
securities available-for-sale
|
|
|
3,649
|
|
|
4,168
|
|
Proceeds
from sales of investment securities available-for-sale
|
|
|
4,062
|
|
|
-
|
|
FHLB
stock (purchased) redeemed
|
|
|
(166
|
)
|
|
-
|
|
Net
increase in loans receivable, excludes transfers to real estate
acquired
in settlement of loans
|
|
|
(10,908
|
)
|
|
(3,886
|
)
|
Purchase
of property and equipment
|
|
|
(1,128
|
)
|
|
(91
|
)
|
Net
cash used in investing activities
|
|
|
(12,335
|
)
|
|
(1,494
|
)
|
See
accompanying notes to consolidated financial statements.
EAGLE
BANCORP AND SUBSIDIARY
CONSOLIDATED
STATEMENTS OF CASH FLOWS (Continued)
(Dollars
in Thousands, Except for Per Share Data)
|
|
Three Months Ended
|
|
|
|
September 30,
|
|
|
|
2008
|
|
2007
|
|
|
|
(Unaudited)
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Net
(decrease) increase in checking and savings accounts
|
|
$
|
$4,244
|
|
$
|
$1,836
|
|
Net
decrease in federal funds
|
|
|
(3,000
|
)
|
|
(3,800
|
)
|
Payments
on FHLB advances and other borrowings
|
|
|
(5,917
|
)
|
|
(5,000
|
)
|
FHLB
advances and other borrowings
|
|
|
9,613
|
|
|
9,000
|
|
Purchase
of treasury stock
|
|
|
(21
|
)
|
|
(42
|
)
|
Dividends
paid
|
|
|
(109
|
)
|
|
(105
|
)
|
Net
cash provided by financing activities
|
|
|
4,810
|
|
|
1,889
|
|
|
|
|
|
|
|
|
|
Net
increase in cash and cash equivalents
|
|
|
97
|
|
|
150
|
|
|
|
|
|
|
|
|
|
CASH
AND CASH EQUIVALENTS, beginning of period
|
|
|
4,090
|
|
|
3,069
|
|
|
|
|
|
|
|
|
|
CASH
AND CASH EQUIVALENTS, end of period
|
|
$
|
4,187
|
|
$
|
3,219
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
CASH FLOW INFORMATION:
|
|
|
|
|
|
|
|
Cash
paid during the period for interest
|
|
$
|
1,562
|
|
$
|
1,640
|
|
|
|
|
|
|
|
|
|
Cash
paid during the period for income taxes
|
|
$
|
321
|
|
$
|
109
|
|
|
|
|
|
|
|
|
|
NON-CASH
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Decrease
(increase) in market value of securities
available-for-sale
|
|
$
|
1,587
|
|
$
|
(708
|
)
|
|
|
|
|
|
|
|
|
Mortgage
servicing rights capitalized
|
|
$
|
80
|
|
$
|
83
|
|
See
accompanying notes to consolidated financial statements.
EAGLE
BANCORP AND SUBSIDIARY
NOTES
TO
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE
1. BASIS
OF PRESENTATION
The
accompanying unaudited consolidated financial statements have been prepared
in
accordance with instructions for Form 10-Q. Accordingly, they do not include
all
of the information and footnotes required by accounting principles generally
accepted in the United States of America for complete financial statements.
However, such information reflects all adjustments (consisting of normal
recurring adjustments) which are, in the opinion of management, necessary
for a
fair presentation of results for the unaudited interim periods.
The
results of operations for the three month period ended September 30, 2008
are
not necessarily indicative of the results to be expected for the fiscal year
ending June 30, 2009 or any other period. The unaudited consolidated financial
statements and notes presented herein should be read in conjunction with
the
audited consolidated financial statements and related notes thereto included
in
Eagle’s Form 10-KSB dated June 30, 2008.
NOTE
2. INVESTMENT
SECURITIES
Investment
securities are summarized as follows:
(Dollars
in thousands)
|
|
September 30, 2008
|
|
June 30, 2008
|
|
|
|
AMORTIZED
COST
|
|
GROSS
UNREALIZED
GAINS/
(LOSSES)
|
|
FAIR
VALUE
|
|
AMORTIZED
COST
|
|
GROSS
UNREALIZED
GAINS/
(LOSSES)
|
|
FAIR
VALUE
|
|
Available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
government and agency obligations
|
|
$
|
2,217
|
|
$
|
(10
|
)
|
$
|
2,207
|
|
$
|
2,242
|
|
$
|
(10
|
)
|
$
|
2,232
|
|
Municipal
obligations
|
|
|
23,096
|
|
|
(1,527
|
)
|
|
21,569
|
|
|
22,790
|
|
|
(699
|
)
|
|
22,190
|
|
Corporate
obligations
|
|
|
12,802
|
|
|
(1,026
|
)
|
|
11,776
|
|
|
12,811
|
|
|
(89
|
)
|
|
12,722
|
|
Mortgage-backed
securities
|
|
|
10,174
|
|
|
95
|
|
|
10,269
|
|
|
13,135
|
|
|
(119
|
)
|
|
13,016
|
|
Collateralized
mortgage obligations
|
|
|
31,796
|
|
|
(339
|
)
|
|
31,457
|
|
|
28580
|
|
|
(356
|
)
|
|
28,224
|
|
Common
stock
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
82
|
|
|
(49
|
)
|
|
33
|
|
Total
|
|
$
|
80,085
|
|
$
|
(2,807
|
)
|
$
|
77,278
|
|
$
|
79,640
|
|
$
|
(1,233
|
)
|
$
|
78,417
|
|
Held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal
obligations
|
|
$
|
375
|
|
$
|
10
|
|
$
|
385
|
|
$
|
675
|
|
$
|
11
|
|
$
|
686
|
|
Mortgage-backed
securities
|
|
|
14
|
|
|
-
|
|
|
14
|
|
|
22
|
|
|
-
|
|
|
22
|
|
Total
|
|
$
|
389
|
|
$
|
10
|
|
$
|
399
|
|
$
|
697
|
|
$
|
11
|
|
$
|
708
|
|
Beginning
July 1, 2007 the Company elected to account for its preferred stock under
SFAS
No. 159 Fair
Value Option for Financial Assets and Financial Liabilities,
which
allows an entity the irrevocable option to elect fair value for the initial
and
subsequent measurement for certain financial assets and liabilities on a
contract-by-contract basis. Subsequent changes in fair value of these assets
are
recognized in earnings when incurred. The market value of preferred stock
was
$82,000 and $1,321,000 at September 30, 2008, and June 30, 2008, respectively,
resulting in a loss in value of $1,239,000 for the three month period ended
September 30, 2008 and is included in noninterest income.
EAGLE
BANCORP AND SUBSIDIARY
NOTES
TO
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE
3. LOANS
RECEIVABLE
Loans
receivable consist of the following:
|
|
September 30,
|
|
June 30,
|
|
|
|
2008
|
|
2008
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
(Dollars in Thousands)
|
|
First mortgage
loans:
|
|
|
|
|
|
|
|
Residential
mortgage (1-4 family)
|
|
$
|
90,038
|
|
$
|
86,751
|
|
Commercial
real estate
|
|
|
33,442
|
|
|
28,197
|
|
Real
estate construction
|
|
|
7,080
|
|
|
7,317
|
|
|
|
|
|
|
|
|
|
Other
loans:
|
|
|
|
|
|
|
|
Home
equity
|
|
|
29,433
|
|
|
28,034
|
|
Consumer
|
|
|
12,884
|
|
|
11,558
|
|
Commercial
|
|
|
6,463
|
|
|
6,502
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
179,340
|
|
|
168,359
|
|
|
|
|
|
|
|
|
|
Less:
Allowance for loan losses
|
|
|
(300
|
)
|
|
(300
|
)
|
Add:
Deferred loan fees, net
|
|
|
85
|
|
|
90
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
179,125
|
|
$
|
168,149
|
|
Loans,
net of related allowance for loan losses, on which the accrual of interest
has
been discontinued were $13 and $0 at September 30, 2008 and June 30, 2008,
respectively. Classified assets, including real estate owned, totaled $148
and
$106 at September 30, 2008 and June 30, 2008, respectively.
The
following is a summary of changes in the allowance for loan losses:
|
|
Three Months
Ended
|
|
Year Ended
|
|
|
|
September 30,
|
|
June 30,
|
|
|
|
2008
|
|
2008
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
(Dollars in Thousands)
|
|
Balance, beginning of period
|
|
$
|
300
|
|
$
|
518
|
|
Reclassification
to repossessed property reserve
|
|
|
(3
|
)
|
|
-
|
|
Provision
charged to operations
|
|
|
-
|
|
|
(175
|
)
|
Charge-offs
|
|
|
-
|
|
|
(54
|
)
|
Recoveries
|
|
|
3
|
|
|
11
|
|
Balance,
end of period
|
|
$
|
300
|
|
$
|
300
|
|
EAGLE
BANCORP AND SUBSIDIARY
NOTES
TO
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE
4. DEPOSITS
Deposits
are summarized as follows:
|
|
September 30,
|
|
June
30,
|
|
|
|
2008
|
|
2008
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
(Dollars
in Thousands)
|
|
Noninterest
checking
|
|
$
|
15,178
|
|
$
|
14,617
|
|
Interest-bearing
checking
|
|
|
32,611
|
|
|
30,720
|
|
Passbook
|
|
|
23,609
|
|
|
23,906
|
|
Money
market
|
|
|
26,190
|
|
|
25,275
|
|
Time
certificates of deposit
|
|
|
85,507
|
|
|
84,333
|
|
Total
|
|
$
|
183,095
|
|
$
|
178,851
|
|
NOTE
5. EARNINGS
PER SHARE
Basic
earnings per share for the three months ended September 30, 2008 is computed
using 1,069,211 weighted average shares outstanding. Basic earnings per share
for the three months ended September 30, 2007 is computed using 1,072,411
weighted average shares outstanding. Diluted earnings per share is computed
using the treasury stock method by adjusting the number of shares outstanding
by
the shares purchased. The weighted average shares outstanding for the diluted
earnings per share calculations are 1,217,058 for the three months ended
September 30, 2008 and 1,212,458 for the three months ended September 30, 2007.
NOTE
6. DIVIDENDS
AND STOCK REPURCHASE PROGRAM
This
fiscal year Eagle has paid a dividend of $0.255 per share on August 22, 2008.
A
dividend of $0.255 per share was declared on October 16, 2008, payable November
21, 2008 to stockholders of record on October 31, 2008. Eagle Financial MHC,
Eagle’s mutual holding company, has waived the receipt of dividends on its
648,493 shares.
At
their
regular meeting of January 17, 2008, the Company’s Board of Directors announced
a stock repurchase program for up to 28,750 shares. This represented
approximately 6.7% of the outstanding common stock held by the public. The
repurchased shares will be held as treasury stock and will be held for general
corporate purposes and/or issuance pursuant to Eagle’s benefit plans. 4,510
shares have been purchased under this program.
EAGLE
BANCORP AND SUBSIDIARY
NOTES
TO
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE
7. MORTGAGE
SERVICING RIGHTS
The
Bank
allocates its total cost in mortgage loans between mortgage servicing rights
and
loans, based upon their relative fair values, when loans are subsequently sold
or securitized, with the servicing rights retained. Fair values are generally
obtained from an independent third party. Impairment of mortgage servicing
rights is measured based upon the characteristics of the individual loans,
including note rate, term, underlying collateral, current market conditions,
and
estimates of net servicing income. If the carrying value of the mortgage
servicing rights exceeds the estimated fair market value, a valuation allowance
is established for any decline, which is viewed to be temporary. Charges to
the
valuation allowance are charged against or credited to mortgage servicing
income. Periodic independent valuations of the mortgage servicing rights are
performed. As a result of the most recent valuation, no temporary decline in
the
fair value was determined to have occurred, and no valuation allowance has
been
established. The following schedules show the activity in the mortgage servicing
rights and the valuation allowance.
(Dollar
amounts in thousands)
|
|
September
30,
|
|
June
30,
|
|
|
|
2008
|
|
2008
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
(Dollars
in Thousands)
|
|
Mortgage
Servicing Rights
|
|
|
|
|
|
|
|
Beginning
balance
|
|
$
|
1,652
|
|
$
|
1,628
|
|
Servicing
rights capitalized
|
|
|
80
|
|
|
337
|
|
Servicing
rights amortized
|
|
|
(71
|
)
|
|
(313
|
)
|
Ending
balance
|
|
|
1,661
|
|
|
1,652
|
|
|
|
|
|
|
|
|
|
Valuation
Allowance
|
|
|
|
|
|
|
|
Beginning
balance
|
|
|
-
|
|
|
-
|
|
Provision
|
|
|
(-
|
)
|
|
(-
|
)
|
Adjustments
|
|
|
-
|
|
|
-
|
|
Ending
balance
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Net
Mortgage Servicing Rights
|
|
$
|
1,661
|
|
$
|
1,652
|
|
NOTE
8. FAIR VALUE DISCLOSURES
SFAS
157
defines fair value as the price that would be received to sell an asset or
paid
to transfer a liability in an orderly transaction between market participants.
A
fair value measurement assumes that the transaction to sell the asset or
transfer the liability occurs in the principal market for the asset or liability
or, in the absence of a principal market, the most advantageous market for
the
asset or liability. The price in the principal (or most advantageous) market
used to measure the fair value of the asset or liability shall not be adjusted
for transaction costs. An orderly transaction is a transaction that assumes
exposure to the market for a period prior to the measurement date to allow
for
marketing activities that are usual and customary for transactions involving
such assets and liabilities; it is not a forced transaction. Market participants
are buyers and sellers in the principal market that are (i) independent,
(ii) knowledgeable, (iii) able to transact and (iv) willing to
transact.
SFAS
157
requires the use of valuation techniques that are consistent with the market
approach, the income approach and/or the cost approach. The market approach
uses
prices and other relevant information generated by market transactions involving
identical or comparable assets and liabilities. The income approach uses
valuation techniques to convert future amounts, such as cash flows or earnings,
to a single present amount on a discounted basis. The cost approach is based
on
the amount that currently would be required to replace the service capacity
of
an asset (replacement costs). Valuation techniques should be consistently
applied. Inputs to valuation techniques refer to the assumptions that market
participants would use in pricing the asset or liability. Inputs may be
observable, meaning those that reflect the assumptions market participants
would
use in pricing the asset or liability developed based on market data obtained
from independent sources, or unobservable, meaning those that reflect the
reporting entity’s own assumptions about the assumptions market participants
would use in pricing the asset or liability developed based on the best
information available in the circumstances. In that regard, SFAS 157 establishes
a fair value hierarchy for valuation inputs that gives the highest priority
to
quoted prices in active markets for identical assets or liabilities and the
lowest priority to unobservable inputs. The fair value hierarchy is as
follows:
EAGLE
BANCORP AND SUBSIDIARY
NOTES
TO
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE
8. FAIR VALUE DISCLOSURES - continued
|
·
|
Level
1 Inputs - Unadjusted quoted prices in active markets for identical
assets
or liabilities that the reporting entity has the ability to access
at the
measurement date.
|
|
·
|
Level
2 Inputs - Inputs other than quoted prices included in Level 1 that
are
observable for the asset or liability, either directly or indirectly.
These include quoted prices for similar assets or liabilities in
active
markets, quoted prices for identical or similar assets or liabilities
in
markets that are not active, inputs other than quoted prices that
are
observable for the asset or liability (for example, interest rates,
volatilities, prepayment speeds, loss severities, credit risks and
default
rates) or inputs that are derived principally from or corroborated
by
observable market data by correlation or other
means.
|
|
·
|
Level
3 Inputs - Significant unobservable inputs that reflect an entity’s own
assumptions that market participants would use in pricing the assets
or
liabilities.
|
A
description of the valuation methodologies used for assets and liabilities
measured at fair value, as well as the general classification of such
instruments pursuant to the valuation hierarchy, is set forth
below.
In
general, fair value is based upon quoted market prices, where available. If
such
quoted market prices are not available, fair value is based upon internally
developed models that primarily use, as inputs, observable market-based
parameters. Valuation adjustments may be made to ensure that financial
instruments are recorded at fair value.
While
management believes the Company’s valuation methodologies are appropriate and
consistent with other market participants, the use of different methodologies
or
assumptions to determine the fair value of certain financial instruments could
result in a different estimate of fair value at the reporting date.
Investment
Securities Available for Sale - Securities classified as available for sale
are
reported at fair value utilizing Level 1 and Level 2 inputs. For these
securities, the Company obtains fair value measurements from an independent
pricing service. The fair value measurements consider observable data that
may
include dealer quotes, market spreads, cash flows, the U. S. Treasury yield
curve, live trading levels, trade execution data, market consensus prepayments
speeds, credit information and the bond’s terms and conditions, among other
things.
Preferred
Stock - SFAS 159 - Freddie Mac and Fannie Mae preferred stock are reported
at
fair value utilizing Level 1 and Level 2 inputs. For these securities, the
Company obtains fair value measurements from an independent pricing service.
The
fair value measurements consider observable data that may include dealer quotes,
market spreads, cash flows, the U. S. Treasury yield curve, live trading levels,
trade execution data, market consensus prepayments speeds, credit information
and the bond’s terms and conditions, among other things.
Mortgage
Servicing Rights - These assets are reported at the lower of cost or fair value.
Fair values are estimated by stratifying the mortgage serving portfolio into
groups of loans with similar financial characteristics, such as loan type,
interest rate, and expected maturity. The Company obtains market survey data
estimates and bid quotations from secondary market investors who regularly
purchase mortgage servicing rights. Assumptions regarding loan payoffs are
determined using historical information on segmented loan categories for
nonspecific borrowers.
Loans
Held for Sale - These loans are reported at fair value. Fair value is determined
based on expected proceeds based on sales contracts and commitments and are
considered Level 2 inputs.
Real
Estate Owned - These assets are reported at the lower of the loan carrying
amount at foreclosure or fair value. Fair value is based on third party or
internally developed appraisals considering the assumptions in the valuation
and
is considered Level 2 or Level 3 inputs.
Impaired
Loans - Impaired loans are reported at the fair value of the underlying
collateral if repayment is expected solely from the collateral. Collateral
values are estimated using Level 3 inputs based on internally customized
discounting criteria.
The
following table summarizes financial assets and financial liabilities measured
at fair value on a recurring basis as of September 30, 2008, segregated by
the level of the valuation inputs within the fair value hierarchy utilized
to
measure fair value (dollars in thousands):
EAGLE
BANCORP AND SUBSIDIARY
NOTES
TO
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE
8. FAIR VALUE DISCLOSURES - continued
|
|
Level
1
|
|
Level
2
|
|
Level
3
|
|
Total
Fair
|
|
|
|
Inputs
|
|
Inputs
|
|
Inputs
|
|
Value
|
|
Investment
securities available for sale
|
|
$
|
-
|
|
$
|
77,278
|
|
$
|
-
|
|
$
|
77,278
|
|
Preferred
stock - SFAS 159
|
|
|
-
|
|
|
82
|
|
|
-
|
|
|
82
|
|
Mortgage
servicing rights
|
|
|
-
|
|
|
2,026
|
|
|
-
|
|
|
2,026
|
|
Loans
held for sale
|
|
|
-
|
|
|
1,239
|
|
|
-
|
|
|
1,239
|
|
Real
estate owned
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Impaired
loans
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Certain
financial assets and financial liabilities are measured at fair value on a
nonrecurring basis, that is, the instruments are not measured at fair value
on
an ongoing basis but are subject to fair value adjustments in certain
circumstances (for example, when there is evidence of impairment). Financial
assets and financial liabilities measured at fair value on a non-recurring
basis
were not significant at September 30, 2008.
NOTE
9. RECENTLY ISSUED PRONOUNCEMENTS
In
September 2006, the FASB's Emerging Issues Task Force issued EITF Issue No
06-4,
"Accounting for Deferred Compensation and Postretirement Benefit Aspects of
Endorsement Split Dollar Life Insurance Arrangements" ("EITF 06-4"). EITF 06-4
requires the recognition of a liability related to the postretirement benefits
covered by an endorsement split-dollar life insurance arrangement. The consensus
highlights that the employer (who is also the policyholder) has a liability
for
the benefit it is providing to its employee. As such, if the policyholder has
agreed to maintain the insurance policy in force for the employee's benefit
during his or her retirement, then the liability recognized during the
employee's active service period should be based on the future cost of insurance
to be incurred during the employee's retirement.
Alternatively,
if the policy holder has agreed to provide the employee with a death benefit,
then the liability for the future death benefit should be recognized by
following the guidance in SFAS No. 106 or Accounting Principles Board (APB)
Opinion No. 12, as appropriate. For transition, an entity can choose to apply
the guidance using either of the following approaches: (a) a change in
accounting principle through retrospective application to all periods presented
or (b) a change in accounting principle through a cumulative-effect adjustment
to the balance in retained earnings at the beginning of the year of adoption.
The disclosures are required in fiscal years beginning after December 15, 2007,
with early adoption permitted.
In
March
2007, the FASB ratified Emerging Issues Task Force Issue No. 06-10 "Accounting
for Collateral Assignment Split-Dollar Life Insurance Agreements" ("EITF
06-10"). EITF 06-10 provides guidance for determining a liability for the
postretirement benefit obligation as well as recognition and measurement of
the
associated asset on the basis of the terms of the collateral assignment
agreement. EITF 06-10 is effective for fiscal years beginning after December
15,
2007.
The
Company assessed the impact of EITF 06-4 and EITF 06-10 on its consolidated
financial position and results of operations and during the quarter ended
September 30, 2008 recorded a $129,000 liability and reduced retained earnings
by the same amount.
In
September 2006, the FASB issued SFAS No. 157, Fair
Value Measurements. SFAS
No.
157 establishes a framework for measuring fair value and expands disclosures
about fair value measurements. SFAS No. 157 clarifies the definition of exchange
price as the price between market participants in an orderly transaction to
sell
an asset or transfer a liability in the market in which the reporting entity
would transact for the asset or liability, that is, the principal or most
advantageous market for the asset or liability. The changes to current practice
resulting from the application of this statement relate to the definition of
fair value, the methods used to measure fair value, and the expanded disclosures
about fair value measurements. SFAS No. 157 is effective for fiscal years
beginning after November 15, 2007 and interim periods within those fiscal years.
The Company adopted SFAS No. 157 on July 1, 2008 and the adoption did not have
a
material effect on its financial position, results of operations or cash flows.
(See Note 8.)
EAGLE
BANCORP AND SUBSIDIARY
NOTES
TO
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE
9. RECENTLY ISSUED PRONOUNCEMENTS - continued
On
September 7, 2006, the Task Force reached a conclusion on Emerging Issues Task
Force No. 06-5, "Accounting for Purchases of Life Insurance - Determining the
Amount That Could Be Realized in Accordance with FASB Technical Bulletin No.
85-4, Accounting for Purchases of Life Insurance" ("EITF 06-5"). The scope
of
EITF 06-5 consists of six separate issues relating to accounting for life
insurance policies purchases by entities protecting against the loss of "key
persons." The six issues are clarifications of previously issued guidance on
FASB Technical Bulleting No. 85-4. EITF 06-5 is effective for fiscal years
beginning after December 15, 2006. The adoption of EITF 06-5 did not have a
material impact on the Company's consolidated financial statements.
In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option
for Financial Assets and Financial Liabilities”, which permits entities to
choose to measure many financial instruments and certain other items at fair
value. The objective of the new pronouncement is to improve financial reporting
by providing companies with the opportunity to mitigate volatility in reported
earnings caused by measuring related assets and liabilities differently without
having to apply complex hedge accounting provisions. SFAS No. 159 is
effective for the Bank July 1, 2007. See Note 2 for information on the impact
of
the adoption of this statement.
In
November 2007, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 109, “Written Loan Commitments Recorded at Fair Value Through
Earnings” (SAB 109). SAB No. 109 supersedes SAB 105, “Application of Accounting
Principles to Loan Commitments,” and indicates that the expected net future cash
flows related to the associated servicing of the loan should be included in
the
measurement of all written loan commitments that are accounted for at fair
value
through earnings. The guidance in SAB 109 is applied on a prospective basis
to
derivative loan commitments issued or modified in fiscal quarters beginning
after December 15, 2007. SAB 109 is not expected to have a material impact
on
the Company’s financial position, results of operations or cash flows.
In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements” - an amendment of ARB No. 51. SFAS No. 160
(a) amends ARB 51 to establish accounting and reporting standards for the
noncontrolling interest in a subsidiary and the deconsolidation of a subsidiary;
(b) changes the way the consolidated income statement is presented; (c)
establishes a single method of accounting for changes in a parent company’s
ownership interest in a subsidiary that do not result in deconsolidation; (d)
requires that a parent recognize a gain or loss in net income when a subsidiary
is deconsolidated; and (e) requires expanded disclosures in the consolidated
financial statements that clearly identify and distinguish between the interests
of the parent company’s owners and the interests of the noncontrolling owners of
a subsidiary. SFAS No. 160 must be applied prospectively but to apply the
presentation and disclosure requirements must be applied retrospectively to
provide comparability in the financial statements. Early adoption is prohibited.
SFAS No. 160 is effective for fiscal years, and interim periods within those
fiscal years, beginning on or after December 15, 2008. The Company is in the
process of determining the impact of adopting this new accounting principle
on
its consolidated financial position, results of operations and cash
flows.
In
December 2007, the FASB issued SFAS No. 141(R), “Business Combinations-a
replacement of FASB No. 141.” SFAS No. 141(R) requires (a) a company to
recognize the assets acquired, the liabilities assumed, and any noncontrolling
interest in the acquiree at fair value as of the acquisition date; and (b)
an
acquirer in preacquisition periods to expense all acquisition-related costs.
SFAS No. 141(R) requires that any adjustments to an acquired entity’s deferred
tax asset and liability balance that occur after the measurement period be
recorded as a component of income tax expense. This accounting treatment is
required for business combinations consummated before the effective date of
SFAS
No. 141(R) (non-prospective) otherwise SFAS No. 141(R) must be applied
prospectively. The presentation and disclosure requirements must be applied
retrospectively to provide comparability in the financial statements. Early
adoption is prohibited. SFAS No. 141(R) is effective for fiscal years, and
interim periods within those fiscal years, beginning on or after December 15,
2008. SFAS No. 141(R) is expected to have a significant impact on accounting
for
business combinations closing on or after January 1, 2009.
In
March
2008, the FASB issued SFAS No. 161, “Disclosures
about Derivative Instruments and Hedging Activities—an amendment of FASB
Statement No. 133” (“SFAS
No. 161”). SFAS No. 161 changes the disclosure requirements for derivative
instruments and hedging activities. Entities are required to provide enhanced
disclosures about (a) how and why an entity uses derivative instruments, (b)
how
derivative instruments and related hedged items are accounted for under
Statement 133 and its related interpretations, and (c) how derivative
instruments and related hedged items affect an entity’s financial position,
financial performance, and cash flows. The guidance in SFAS No. 161 is effective
for financial statements issued for fiscal years and interim periods beginning
after November 15, 2008, with early application encouraged. This Statement
encourages, but does not require, comparative disclosures for earlier periods
at
initial adoption. The Company is currently assessing the impact of SFAS No.
161.
EAGLE
BANCORP AND SUBSIDIARY
NOTES
TO
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE
9. RECENTLY ISSUED PRONOUNCEMENTS - continued
In
May
2008, the FASB issued SFAS No. 162, “The
Hierarchy of Generally Accepted Accounting Principles” (“SFAS
No. 162”). SFAS No. 162 identifies the sources of accounting principles and the
framework for selecting the principles used in the preparation of financial
statements that are presented in conformity with generally accepted accounting
principles. SFAS No. 162 is effective 60 days following approval by the
Securities and Exchange Commission of the Public Company Accounting Oversight
Board’s amendments to AU Section 411, “The
Meaning of Present Fairly in Conformity with Generally Accepted Accounting
Principles.”
The
adoption of SFAS No. 162 will not affect the consolidated financial
statements.
EAGLE
BANCORP AND SUBSIDIARY
MANAGEMENT
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
OPERATION
Note
Regarding Forward-Looking Statements
This
report contains certain “forward-looking statements.” Eagle Bancorp (“Eagle” or
the “Company”) desires to take advantage of the “safe harbor” provisions of the
Private Securities Litigation Reform Act of 1995 and is including this statement
for the express purpose of availing itself of the protections of the safe harbor
with respect to all such forward-looking statements. These forward-looking
statements, which are included in Management’s Discussion and Analysis, describe
future plans or strategies and include Eagle’s expectations of future financial
results. The words “believe,” “expect,” “anticipate,” “estimate,” “project,” and
similar expressions identify forward-looking statements. Eagle’s ability to
predict results or the effect of future plans or strategies or qualitative
or
quantitative changes based on market risk is inherently uncertain. Factors
which
could affect actual results but are not limited to include (i) change in general
market interest rates, (ii) general economic conditions, (iii) local economic
conditions, (iv) legislative/regulatory changes, (v) monetary and fiscal
policies of the U.S. Treasury and Federal Reserve, (vi) changes in the quality
or composition of Eagle’s loan and investment portfolios, (vii) demand for loan
products, (viii) deposit flows, (ix) competition, and (x) demand for financial
services in Eagle’s markets. These factors should be considered in evaluating
the forward-looking statements. You are cautioned not to place undue reliance
on
these forward-looking statements which speak only as of their
dates.
Overview
The
Company’s primary activity is its ownership of its wholly owned subsidiary,
American Federal Savings Bank (the “Bank”). The Bank is a federally chartered
savings bank, engaging in typical banking activities: acquiring deposits from
local markets and investing in loans and investment securities. The Bank’s
primary component of earnings is its net interest margin (also called spread
or
margin), the difference between interest income and interest expense. The net
interest margin is managed by management (through the pricing of its products
and by the types of products offered and kept in portfolio), and is affected
by
moves in interest rates. Noninterest income in the form of fee income and gain
on sale of loans adds to the Bank’s income.
The
Bank
has a strong mortgage lending focus, with the majority of its loans in
single-family residential mortgages. This has led to successfully marketing
home
equity loans to its customers, as well as a wide range of shorter term consumer
loans for various personal needs (automobiles, recreational vehicles, etc.).
In
recent years the Bank has focused on adding commercial loans to its portfolio,
both real estate and non-real estate. The purpose of this diversification is
to
mitigate the Bank’s dependence on the mortgage market, as well as to improve its
ability to manage its spread. The Bank’s management recognizes the need for
sources of fee income to complement its margin, and the Bank now maintains
a
significant loan serviced portfolio, which provides a steady source of fee
income. The gain on sale of loans also provides significant fee income in
periods of high mortgage loan origination volumes. Fee income is also
supplemented with fees generated from the Bank’s deposit accounts. The Bank has
a high percentage of non-maturity deposits, such as checking accounts and
savings accounts, which allows management flexibility in managing its spread.
Non-maturity deposits do not automatically reprice as interest rates rise,
as do
certificates of deposit.
For
the
past three years, management’s focus has been on improving the Bank’s core
earnings. Core earnings can be described as income before taxes, with the
exclusion of gain on sale of loans and adjustments to the market value of the
Bank’s loan serviced portfolio. Management believes that the Bank will need to
continue to focus on increasing net interest margin, other areas of fee income,
and control operating expenses to achieve earnings growth going forward.
Management’s strategy of growing the bank’s loan portfolio and deposit base is
expected to help achieve these goals: loans typically earn higher rates of
return than investments; a larger deposit base will yield higher fee income;
increasing the asset base will reduce the relative impact of fixed operating
costs. The biggest challenge to the strategy is funding the growth of the Bank’s
balance sheet in an efficient manner. Deposit growth will be difficult to
maintain due to fierce competition and wholesale funding (which is usually
more
expensive than retail deposits) will likely be needed to supplement
it.
The
level
and movement of interest rates impacts the Bank’s earnings as well. The Federal
Reserve’s Federal Open Market Committee (FOMC) did not change the federal funds
target rate during the quarter ended September 30, 2008. As such it ended at
2.00%. However, they did lower it by 50 basis points on October 8, 2008 and
again on October 29, 2008 making a new federal funds target rate of 1.00%.
As a
result short-term interest rates fell resulting in a more upward sloping yield
curve. If this continues, the Bank’s funding costs are likely to decrease and
provide for a larger net interest margin as its deposits are typically priced
relative to short-term rates, while the majority of its loan products are priced
relative to long-term rates. The Bank has continued to reinvest investment
proceeds in the loan portfolio, because as noted earlier, loans typically earn
higher rates of return than investments. Additionally, many of the Bank’s
investments which mature in the coming year are at low (below current market)
interest rates, affording an opportunity to reinvest the proceeds at the current
higher rates and increasing interest income in the coming
quarters.
EAGLE
BANCORP AND SUBSIDIARY
MANAGEMENT
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
OPERATION
Financial
Condition
Comparisons
in this section are for the three month period ended September 30,
2008.
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. Total liabilities increased by
$5.60 million to $259.87 million at September 30, 2008, from $254.27 million
at
June 30, 2008. Total equity decreased $1.46 million to $24.17 million at
September 30, 2008 from $25.63 million at June 30, 2008.
Loans
receivable increased $10.98 million, or 6.53%, to $179.13 million at September
30, 2008 from $168.15 million at June 30, 2008. Commercial Real Estate loans
were the loan category with the largest increase, $5.25 million, while real
estate construction loans decreased $237,000. Most other loan categories showed
modest increases. Total loan originations were $36.71 million for the three
months ended September 30, 2008, with single family mortgages accounting for
$17.98
million of the total. Home equity and construction loan originations totaled
$4.86 million and $1.93 million, respectively, for the same period. Commercial
real estate and land loan originations totaled $9.04 million. Loans
held-for-sale decreased to $1.24 million at September 30, 2008 from $7.37
million at June 30, 2008.
Deposits
grew $4.24 million, or 2.37%, to $183.10 million at September 30, 2008 from
$178.85 million at June 30, 2008. Growth in certificates of deposit and
non-interest checking, interest-bearing checking accounts, and money market
accounts contributed to the increase in deposits. Statement savings accounts
declined. As stated above in the Overview section, deposit growth is expected
to
continue to be difficult to achieve due to the fierce competition among
financial institutions in our markets. 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.
The
decline in total equity was the result of net loss for the three months of
$100,000 and an increase in other comprehensive loss of $1.13 million (mainly
due to an increase in net unrealized losses on securities available-for-sale),
as well as dividends paid of a $0.255 per share regular cash dividend and
treasury stock purchases.
Results
of Operations for the Three Months Ending September 30, 2008 and
2007
Net
Income.
Eagle’s
net loss was $100,000 for the three months ended September 30, 2008. Eagle’s net
income was $464,000 for the three months ended September 30, 2007. The decrease
of $564,000, or 121.6%, was due to 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. Eagle’s tax
provision was $178,000 lower in the current quarter. Basic earnings per share
were a negative $0.09 for the current period, compared to a positive $0.43
for
the previous year’s period.
Net
Interest Income.
Net
interest income increased to $2.236 million for the quarter ended September
30,
2008 from $1.709 million for the quarter ended September 30, 2007. This increase
of $527,000 was the result of an increase in interest and dividend income of
$408,000, and by a decrease in interest expense of $119,000.
Interest
and Dividend Income.
Total
interest and dividend income was $3.816 million for the quarter ended September
30, 2008, compared to $3.408 million for the quarter ended September 30, 2007,
representing an increase of $408,000, or 11.97%. Interest and fees on loans
increased to $2.837 million for the three months ended September 30, 2008 from
$2.668 million for the same period ended September 30, 2007. This increase
of
$169,000, or 6.33%, was due to the increase in the average balances of loans
receivable for the quarter ended September 30, 2008. Average balances for loans
receivable, net, for the quarter ended September 30, 2008 were $174.37 million,
compared to $162.68 million for the previous year. This represents an increase
of $11.69 million, or 7.19%. The average interest rate earned on loans
receivable decreased by 6 basis points, from 6.56% at September 30, 2007 to
6.50% at September 30, 2008. Interest and dividends on investment securities
available-for-sale (AFS) increased to $963,000 for the quarter ended September
30, 2008 from $722,000 for the same quarter last year. Average balances on
investments increased to $79.00 million for the quarter ended September 30,
2008, compared to $64.78 million for the quarter ended September 30, 2007.
The
average interest rate earned on investments increased to 4.91% from 4.53%.
EAGLE
BANCORP AND SUBSIDIARY
MANAGEMENT
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
OPERATION
Results
of Operations for the Three Months Ending September 30, 2008 and 2007 -
continued
Interest
Expense.
Total
interest expense decreased to $1.580 million for the quarter ended September
30,
2008, from $1.699 million for the quarter ended September 30, 2007, a decrease
of $119,000, or 7.00%. Interest on deposits decreased to $862,000 for the
quarter ended September 30, 2008, from $1.185 million for the quarter ended
September 30, 2007. This decrease of $323,000, or 27.26%, was the result of
a
decrease in average rates paid on deposit accounts from 2.86% at September
30,
2007 to 2.09% at September 30, 2008. Certificates of deposit and money market
accounts showed decreases in average rates paid while rates on checking accounts
slightly increased. The rate on statement savings accounts remained unchanged
at
0.65%. Average balances in interest-bearing deposit accounts decreased slightly
to $165.16 million for the quarter ended September 30, 2008, compared to $165.47
million for the same quarter in the previous year. The significant increase
in
the average balance of FHLB and other borrowings resulted in an increase in
interest paid on borrowings to $643,000 in the current quarter compared to
$439,000 in the previous year’s quarter. The average rate paid on borrowings
decreased from 5.09% last year to 4.21% this year. The average rate paid on
all
liabilities decreased 59 basis points from the quarter ended September 30,
2007
to the quarter ended September 30, 2008.
Provision
for Loan Losses.
Provisions for loan losses are charged to earnings to maintain the total
allowance for loan losses at a level considered adequate by Eagle’s subsidiary,
American Federal Savings Bank (the Bank), to provide for probable loan losses
based on prior loss experience, volume and type of lending conducted by the
Bank, national and local economic conditions, and past due loans in portfolio.
The Bank’s policies require the review of assets on a quarterly basis. The Bank
classifies loans as well as other assets if warranted. While the Bank believes
it uses the best information available to make a determination with respect
to
the allowance for loan losses, it recognizes that future adjustments may be
necessary. No provision was made for loan losses for either the quarter ended
September 30, 2008 or the quarter ended September 30, 2007. This is a reflection
of the continued strong asset quality of the Bank’s loan portfolio, as
non-performing loan ratios continue to be below peer averages. Total classified
assets increased slightly from $106,000 at June 30, 2008 to $148,000 at
September 30, 2008 and total less than 0.09% of the total loan portfolio. At
quarter end, the Bank had no other real estate owned.
Noninterest
Income. Total
noninterest income decreased to negative $504,000 for the quarter ended
September 30, 2008, from a positive $584,000 for the quarter ended September
30,
2007, a decrease of $1.088 million. This was the result of an adjustment of
$1.239 million to the valuation of the Company’s Fannie Mae and Freddie Mac
preferred stock, as described above, which is accounted for under Statement
of
Financial Accounting Standard (SFAS) No.159 Fair
Value Option for Financial Assets and Financial Liabilities.
Income
from sale of loans decreased to $183,000 from $199,000 due to $1.019 million
less in mortgage loan sales. Demand deposit service charges increased to
$190,000 from $166,000 due to increased overdraft fees. Other noninterest income
increased to $165,000 for the quarter ended September 30, 2008 from $127,000
for
the quarter ended September 30, 2007. The prior period had incurred a $24,000
decline in value of the $15 million notional amount ($32,000 contract amount)
interest rate cap originally purchased in February 2007, while the current
period did not.
Noninterest
Expense.
Noninterest expense increased by $181,000 or 10.85% to $1.849 million for the
quarter ended September 30, 2008, from $1.668 million for the quarter ended
September 30, 2007. This increase was primarily due to increases in salaries
and
employee benefits of $100,000, increases in advertising expense of $28,000,
and
occupancy expense of $14,000. Advertising expense was higher due to increased
promotion of checking products that occurred during the quarter ending September
30, 2008. Postage increased $10,000 as a result of higher postage costs along
with more promotional mailings. Consulting fees increased $28,000. This was
due
to engaging outside firms to assist the Bank with developing new checking
account products and target marketing. Other expense categories showed minor
changes.
Income
Tax Expense/Benefit.
Eagle’s
income tax benefit was $17,000 for the quarter ended September 30, 2008,
compared to an expense of $161,000 for the quarter ended September 30, 2007.
The
effective tax rate for the quarter ended September 30, 2008 was 14.53% and
was
25.76% for the quarter ended September 30, 2007.
EAGLE
BANCORP AND SUBSIDIARY
MANAGEMENT
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
OPERATION
Liquidity,
Interest Rate Sensitivity and Capital Resources
The
company’s subsidiary, American Federal Savings Bank (the Bank), is required to
maintain minimum levels of liquid assets as defined by the Office of Thrift
Supervision (OTS) regulations. The OTS has eliminated the statutory requirement
based upon a percentage of deposits and short-term borrowings. The OTS states
that the liquidity requirement is retained for safety and soundness purposes,
and that appropriate levels of liquidity will depend upon the types of
activities in which the company engages. For internal reporting purposes, the
Bank uses the previous regulatory definitions of liquidity. The Bank’s average
liquidity ratio was 6.87% and 8.83% for the months ended September 30, 2008
and
September 30, 2007, respectively.
The
Bank’s primary sources of funds are deposits, repayment of loans and
mortgage-backed securities, maturities of investments, funds provided from
operations, and advances from the Federal Home Loan Bank of Seattle. Scheduled
repayments of loans and mortgage-backed securities and maturities of investment
securities are generally predictable. However, other sources of funds, such
as
deposit flows and loan prepayments, can be greatly influenced by the general
level of interest rates, economic conditions and competition. The Bank uses
liquidity resources principally to fund existing and future loan commitments.
It
also uses them to fund maturing certificates of deposit, demand deposit
withdrawals and to invest in other loans and investments, maintain liquidity,
and meet operating expenses.
Liquidity
may be adversely affected by unexpected deposit outflows, higher interest rates
paid by competitors, and similar matters. Management monitors projected
liquidity needs and determines the level desirable, based in part on commitments
to make loans and management’s assessment of the bank’s ability to generate
funds.
At
June
30, 2008 (the most recent report available), the Bank’s measure of sensitivity
to interest rate movements, as measured by the OTS, worsened from the previous
quarter. The Bank’s capital ratio as measured by the OTS decreased from the
previous quarter. The Bank’s strong capital position mitigates its interest rate
risk exposure. The Bank is well within the guidelines set forth by the Board
of
Directors for interest rate risk sensitivity.
As
of
September 30, 2008, the Bank’s regulatory capital was in excess of all
applicable regulatory requirements. At September 30, 2008, the Bank’s tangible,
core, and risk-based capital ratios amounted to 8.88%, 8.88%, and 12.61%,
respectively, compared to regulatory requirements of 1.5%, 3.0%, and 8.0%,
respectively. See the following table (amounts in thousands):
|
|
(Unaudited)
|
|
|
|
At
September 30, 2008
|
|
|
|
|
|
For
Capital
|
|
|
|
|
|
Adequacy
|
|
|
|
Dollar
|
|
Purposes
|
|
|
|
Amount
|
|
% of Assets
|
|
Tangible
capital:
|
|
|
|
|
|
|
|
Capital
level
|
|
$
|
24,962
|
|
|
8.88
|
%
|
Requirement
|
|
|
4,218
|
|
|
1.50
|
|
Excess
|
|
$
|
20,744
|
|
|
7.38
|
%
|
Core
capital:
|
|
|
|
|
|
|
|
Capital
level
|
|
$
|
24,962
|
|
|
8.88
|
%
|
Requirement
|
|
|
8,435
|
|
|
3.00
|
|
Excess
|
|
$
|
16,527
|
|
|
5.88
|
%
|
Risk-based
capital:
|
|
|
|
|
|
|
|
Capital
level
|
|
$
|
25,229
|
|
|
12.61
|
%
|
Requirement
|
|
|
16,012
|
|
|
8.00
|
|
Excess
|
|
$
|
9,217
|
|
|
4.61
|
%
|
EAGLE
BANCORP AND SUBSIDIARY
MANAGEMENT
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
OPERATION
Impact
of Inflation and Changing Prices
Our
financial statements and the accompanying notes have been prepared in accordance
with generally accepted accounting principles, which require the measurement
of
financial position and operating results in terms of historical dollars without
considering the change in the relative purchasing power of money over time
and
due to inflation. The impact of inflation is reflected in the increased cost
of
our operations. Interest rates have a greater impact on our performance than
do
the general levels of inflation. Interest rates do not necessarily move in
the
same direction or to the same extent as the prices of goods and
services.
EAGLE
BANCORP AND SUBSIDIARY
QUANTITATIVE
AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
QUANTITATIVE
AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Not
applicable.
EAGLE
BANCORP AND SUBSIDIARY
CONTROLS AND PROCEDURES
CONTROLS
AND PROCEDURES
The
Company’s Chief Executive Officer, Peter J. Johnson, and Chief Financial
Officer, Clint J. Morrison, evaluated the effectiveness of the Company’s
disclosure controls and procedures (as defined in Exchange Act rules 13a-15(e)
and 15d-15(e)) as of September 30, 2008, and based on this review, have
concluded the Company’s disclosure controls and procedures are effective as of
September 30, 2008 to ensure that information required to be disclosed in the
reports that the Company files or submits under the Securities Exchange Act
of
1934 is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission’s rules and forms. During
the last fiscal quarter, there have been no significant changes in the Company’s
internal control over financial reporting (as defined in Exchange Act rules
13a-15(f) and 15d-15(f)) that have materially affected, or are reasonably likely
to materially affect, the Company’s internal control over financial
reporting.
EAGLE
BANCORP AND SUBSIDIARY
Part
II - OTHER INFORMATION
Item
1.
|
Legal
Proceedings.
|
Neither
the Company nor the Bank is involved in any pending legal proceeding other
than
non-material legal proceedings occurring in the ordinary course of
business.
Item
1A. Risk
Factors
Not
applicable.
Item
2.
|
Unregistered
Sales of Equity Securities Use of
Proceeds.
|
|
c) |
Small
Business Issuer Purchases of Equity Securities.
|
The
following table summarizes the Company’s purchase of its common stock for the
three months ended September 30, 2008.
|
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
|
|
|
|
|
|
Total
Number
|
|
Maximum
|
|
|
|
|
|
|
|
of
Shares
|
|
Number
of
|
|
|
|
|
|
|
|
Purchased
|
|
Shares
that
|
|
|
|
Total
|
|
|
|
as
Part of
|
|
May
Yet Be
|
|
|
|
Number
of
|
|
Average
|
|
Publicly
|
|
Purchased
|
|
|
|
Shares
|
|
Price Paid
|
|
Announced Plans
|
|
Under the Plans
|
|
Period
|
|
Purchased*
|
|
Per
Share
|
|
or
Programs
|
|
or
Programs
|
|
|
|
|
|
|
|
|
|
|
|
July
2008
|
|
|
None
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
07-01-08
to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
07-31-08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
August
2008
|
|
|
760
|
|
$
|
27.00
|
|
|
760
|
|
|
24,240
|
|
08-01-08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
08-31-08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
2008
|
|
|
None
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
09-01-08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
09-30-08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
760
|
|
$
|
27.00
|
|
|
760
|
|
|
24,240
|
|
*The
Company publicly announced a stock repurchase program on January 17, 2008.
The
Company was authorized to acquire up to 28,750 shares of common stock with
the
price subject to market conditions. No expiration date was set for the
repurchase program. As of September 30, 2008, 4,510 shares had been repurchased
under this plan.
Item
3.
|
Defaults
Upon Senior Securities.
|
Not
applicable.
EAGLE
BANCORP AND SUBSIDIARY
Part
II - OTHER INFORMATION (CONTINUED)
Item
4.
|
Submission
of Matters to a Vote of Security
Holders.
|
The
proxy
statement for the Annual Meeting of Stockholders was mailed on September 15,
2008. The following matters were voted on at the meeting held on October 16,
2008:
|
1. |
Election
of directors for three-year terms expiring in
2011:
|
|
|
For
|
|
Against
|
|
Larry
A. Dreyer
|
|
|
990,911
|
|
|
507
|
|
Lynn
E. Dickey
|
|
|
989,411
|
|
|
2,007
|
|
2. Ratification
of appointment of Davis, Kinard & Co., P.C. as auditors for the fiscal year
ended June 30, 2009:
For
|
|
Against
|
|
Abstain
|
|
988,703
|
|
|
115
|
|
|
2,600
|
|
None.
31.1
Certification by Peter J. Johnson, Chief Executive Officer, pursuant to Rule
13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to
Section 302 (a) of the Sarbanes-Oxley Act of 2002.
31.2
Certification by Clint J. Morrison, Chief Financial Officer, pursuant to Rule
13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to
Section 302 (a) of the Sarbanes-Oxley Act of 2002.
32.1
Certification by Peter J. Johnson, Chief Executive Officer, and Clint J.
Morrison, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
a. Reports
on Form 8-K
On
October 16, 2008, the registrant furnished under Item 2.02 of Form 8-K a press
release announcing its earnings for the first quarter of the 2009 fiscal
year.
EAGLE
BANCORP AND SUBSIDIARY
In
accordance with the requirements of the Exchange Act, the registrant caused
this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
|
EAGLE
BANCORP
|
|
|
|
Date:
November 12, 2008
|
By:
|
/s/ Peter
J. Johnson
|
|
|
Peter
J. Johnson
|
|
|
President/CEO
|
|
|
|
Date:
November 12, 2008
|
By:
|
/s/ Clint
J. Morrison
|
|
|
Clint
J. Morrison
|
|
|
Senior
Vice President/CFO
|