Eagle Bancorp
Annual Report 2011

Plain-text annual report

The ArT of Banking P e oPl e . P As s i o n . P e r f o r mAn c e . 2011 AnnuAl rePor T Ronald Paul, Chairman & Chief Executive Officer (right), and Robert Pincus, Vice Chairman (left), in front of eagle sculpture at EagleBank Bethesda Headquarters and Branch. EaglEBank Mission statEMEnt eagleBank is committed to providing quality financial services and successful solutions that consistently achieve a high degree of customer satisfaction. We will differentiate our company from other institutions by developing long-term client relationships, providing superior customer service, creating stockholder value, supporting and enhancing our community, and encouraging the growth and well-being of our employees. We are dedicated to growing our position as the leading community bank for businesses of all sizes in our market, through the respect and recognition we have earned for our banking knowledge, lending expertise, local decision-making, relationship continuity, business ethics, and corporate citizenship. Cover: Artwork at EagleBank 2001 K Street Branch, Washington, DC. to our sharEholdErs We are extremely pleased to provide you with this annual report assets of 0.97%, improved from 0.86% in 2010 and a return on on the performance of eagle Bancorp, inc. for 2011, which was average equity of 11.71%, improved from 8.74% in 2010. The net another very successful year. The company continued its growth interest margin remains very favorable when compared to industry in earnings, level of assets, loans and deposits, all to record standards. The strong margin combined with the growth in our loan levels and, most importantly, growth in the number and strength portfolio produced a 29% increase in net interest income for the of our customer relationships. We are proud of our consistently year, as compared to 2010. Throughout 2011, eagleBank was able improving performance over the last several years, especially when to maintain its loan yields while reducing its cost of funds. This we recognize that the continued success of the Bank has been is due to our favorable deposit mix and is another benefit of the achieved during an extended period of economic stress for both growth and composition of our core deposit base. the banking industry and the national economy. A significant highlight of the financial performance for the year for the year 2011, our net profit available to the common 2011 was the increase in noninterest income of 46% over 2010. shareholders was $23.0 million, resulting in earnings per share of The major driver of this was the success of the residential $1.14. This represented a 50% increase over the 2010 level of real estate lending Division, which has produced tremendous $0.77 per share and the level has more than doubled as compared increases in loan volume over the last two years. eagleBank made to the 2009 earnings per share of $0.55. We are also very pleased the strategic decision to significantly increase this business line to note that the trend of quarterly earnings was positive throughout two years ago, and has improved loan production from $91 million the year. The fourth quarter, with net profit available to common in 2009 to $461 million in 2010 to $864 million for 2011. shareholders of $7.0 million, was the 12th consecutive quarter of Gains on the sale of these loans saw a 117% increase for the increasing, record earnings. reflecting the balance, quality and year. The Division originates loans throughout our market area consistency of our performance, the Bank achieved continued and these loans are pre-sold to recognized investors, with price growth in all aspects of our business and ended the year with lock commitments to minimize any risk. in addition, the Bank saw assets over $2.8 billion. our loan portfolio grew 23% during the increases in the referral of insurance products during the year and year to $2.1 billion and deposits increased 39% to a level of $2.4 growing interest in its investment advisory referral services. Total billion. We are extremely pleased with this growth in deposits as noninterest income comprised 12% of total revenue for the year it signifies the increase in numbers and depth of our customer 2011, an increase from 10.7% in 2010. relationships. more and more customers are choosing to bank with eagleBank, a community bank which provides outstanding service, consistent, sound response to the legitimate credit needs of our customers, access to decision makers in senior management and commitment to our community. in July, the company took a major step to improving our capital strength, which is critical to a growing company. following careful study, the company placed $56.6 million of preferred stock under the small Business lending fund (“sBlf”) program. With the proceeds, we repaid the remaining balance of the obligation our financial strength is grounded in our sound asset allocation due under the Troubled Asset relief capital Purchase Program and the credit quality of our loan portfolio. At year end, our non- (“TArP”) and thus realized a net increase of $33.4 million of performing assets were a very reasonable 1.27% of total assets Tier 1 capital. Due to our commitment to and proven track record and net charge-offs in 2011 were modest at 0.32% of average in originating qualifying small business loans, the company was loans. Profitability indicators for the company for the year were all eligible for the lowest possible dividend rate of 1% on the sBlf strong with a net interest margin of 3.99%, a return on average funds from the inception of the program, well below the 5% 2 dividend rate on the TArP funds. Therefore, our participation in to our network there. in february 2012, we opened our newest the sBlf program provided the benefits of increased capital levels branch in reston. Additionally, we have identified and leased to support future growth and a reduced dividend rate compared a branch site in the merrifield area of fairfax county to open to what we had paid under TArP. At year end, the company had a this coming fall. A regional headquarters in reston will soon total risk based capital ratio of 11.84%, a Tier 1 risk based capital house lenders, mortgage originators and business development ratio of 10.33% and a Tier 1 leverage ratio of 8.21%. All three officers dedicated to serving the northern Virginia market. These ratios are substantially above the regulatory requirements to be new officers are representative of the investment that the Bank considered Well capitalized. continues to make in experienced community bankers. During the past year, we continued to invest and build the from branch staff to lenders, to operations and compliance capabilities of eagleBank in ways that contributed not only to specialists, the Bank continues to attract experienced qualified our success in 2011, but are the basis for continued strength individuals, who want to thrive in the eagleBank culture of and growth of the bank. effective and efficient use of technology customer service. We are honored to welcome the two newest has become critical in the banking industry, so in April of 2011, members of our senior management team, Virginia navas heine, we completed a major conversion of all of our transaction, executive Vice President & chief commercial lending officer, data processing and general ledger systems. The new systems and Antonio f. marquez, executive Vice President & chief real we installed significantly improved our operating and service estate lending officer, both of whom have extensive banking efficiency, enhanced product capability and provide the ongoing experience in the Washington metropolitan Area. Their addition to capacity to serve the Bank’s growth for many years to come. our team demonstrates our commitment to growth and building We are proud to note that, based on the performance of the company during the year, we have gained recognition from our loan portfolio, characterized by strong credit quality. Along with Ginny and Tony, we now have a team of 345 officers and employees dedicated to developing and strengthening our respected industry sources such as The American Banker and snl financial, who named eagleBank as one of the Top 75 best customer relationships. performing community banks in the united states. Also, based eagleBank is proud of our role and success as a community upon our proven record as an active lender with strong quality, bank. over the last several years, through the impact of a Bank management was recently invited to discuss our performance recession, we have been active lenders and have been a stimulus as the keynote speaker at the annual supervision and regulation to the local community. lending by community banks to small conference of the federal reserve Bank of richmond. businesses is critical to the economic health of our region, eagleBank continues to expand our branch network with the primary emphasis on northern Virginia. After acquiring the Gallery Place branch in downtown Washington, Dc in January 2011, we turned our focus to the Arlington market. our footprint there was established with the opening of branches in Ballston and rosslyn since 80% of new job creation is generated by small and start-up businesses. We have been active with our banking industry trade associations and with our elected officials to increase the awareness of the critical role that community banks play in their local economies across the country. during the 3rd Quarter of 2011. Both of these offices are in high Thank you to our clients, our shareholders, our staff and our density, commercially oriented neighborhoods. Given the dynamic community for supporting our efforts to strengthen and grow nature and size of the northern Virginia market, we are adding eagleBank. We look forward to building on our success in 2012. sincerely, ronald D. Paul chairman of the Board, President & chief executive officer robert P. Pincus Vice chairman six-YEar suMMar Y of sElEctEd financial data The following table shows selected historical consolidated financial data for eagle Bancorp (“the company”). it should be read in conjunction with the company’s audited consolidated financial statements appearing in our form 10-K. 3 5 Year Growth Rate 29% 141% 27% 32% 30% 31% 18% 30% 24% 30% 23% 19% 2% 44% 29% 24% 25% 24% 25% 23% 9% 9% 9% 8% 14% 14% (dollars in thousands except per-share data) 2011 2010 2009 2008 2007 2006 YEAR ENDED DECEMBER 31, Balance Sheet - PeRiod end securities loans held for sale loans Allowance for credit losses intangible assets, net Total assets Deposits Borrowings Total liabilities Preferred shareholders’ equity common shareholders’ equity Total shareholders’ equity Tangible common equity (1) Statement of oPeRationS interest income interest expense Provision for credit losses noninterest income noninterest expense income before taxes income tax expense net income Preferred dividends net income available to common shareholders PeR common ShaRe data (2) net income, basic net income, diluted Dividends declared Book value Tangible book value (3) common shares outstanding Weighted average common shares outstanding RatioS net interest margin (4) efficiency ratio (5) return on average assets (4) return on average common equity Total capital (to risk weighted assets) Tier 1 capital (to risk weighted assets) Tier 1 capital (to average assets) aSSet QualitY nonperforming assets and loans 90+ past due $ nonperforming assets and loans 90+ past due to total assets Allowance for credit losses to loans Allowance for credit losses to nonperforming assets net charge-offs net charge-offs to average loans $ 324,053 $ 237,576 $ 245,644 $ 169,079 $ 176,826 2,056,256 29,653 4,145 2,831,255 2,392,095 152,662 2,564,544 56,600 210,111 266,711 205,966 80,571 1,675,500 24,754 4,188 2,089,370 1,726,798 146,884 1,884,654 22,582 182,134 204,716 177,946 1,550 1,399,311 20,619 4,379 1,805,504 1,460,274 150,090 1,617,183 22,612 165,709 188,321 161,330 2,718 1,265,640 18,403 2,533 1,496,827 1,129,380 215,952 1,354,456 36,312 106,059 142,371 103,526 87,117 $ 2,177 716,677 8,037 236 846,400 630,936 128,408 765,234 - 81,166 81,166 80,930 91,140 2,157 625,773 7,373 255 773,451 628,515 68,064 700,535 - 72,916 72,916 72,661 $ 119,124 $ 20,077 10,983 13,501 63,276 38,289 13,731 24,558 1,511 23,047 96,658 $ 19,832 9,308 9,242 51,005 25,755 9,098 16,657 1,299 15,358 84,338 $ 24,809 7,669 7,297 42,773 16,384 5,965 10,419 2,307 8,112 65,657 $ 23,676 3,979 4,366 30,817 11,551 4,123 7,428 177 7,251 57,077 $ 23,729 1,643 5,186 24,921 11,970 4,269 7,701 - 7,701 50,318 17,880 1,745 3,846 21,824 12,715 4,690 8,025 - 8,025 $ 1.16 $ 1.14 - 10.53 10.32 19,952,844 19,835,534 0.78 $ 0.77 - 9.25 9.03 19,700,387 19,648,591 0.55 $ 0.55 - 8.48 8.26 19,534,226 14,643,294 0.63 $ 0.62 0.11 8.34 8.14 12,714,355 11,556,569 0.73 $ 0.71 0.22 7.59 7.57 10,693,447 10,531,236 0.77 0.74 0.21 6.99 6.97 10,425,870 10,373,080 3.99% 56.22% 0.97% 11.71% 11.84% 10.33% 8.21% 4.09% 59.26% 0.86% 8.74% 11.64% 9.91% 9.32% 3.85% 64.01% 0.65% 6.52% 13.57% 11.82% 10.29% 4.05% 66.49% 0.69% 8.04% 11.93% 9.78% 9.22% 4.37% 66.54% 0.96% 10.03% 11.21% 10.20% 9.46% 4.81% 60.15% 1.13% 11.63% 11.91% 10.82% 9.67% 36,019 $ 31,988 $ 27,131 $ 26,366 $ 5,324 $ 2,013 1.27% 1.44% 1.53% 1.48% 1.50% 1.47% 1.76% 1.45% 0.63% 1.12% 0.26% 1.18% 82.33% 77.39% 76.00% 69.80% 150.96% $ 6,084 $ 0.32% 5,172 $ 0.35% 5,454 $ 0.42% 1,123 $ 0.12% 979 $ 0.15% 366.27% 357 0.06% (1) Tangible common shareholders’ equity, a non-GAAP financial measure, is defined as total common shareholders’ equity reduced by goodwill and other intangible assets. (2) Presented giving retroactive effect to the 10% stock dividend paid on the common stock on October 1, 2008 and the stock splits in the form of 30% dividend on the common stock paid on July 5, 2006. In July 2008, the Company discontinued the payment of its quarterly cash dividend. (3) Tangible book value per common share, a non-GAAP financial measure, is defined as tangible common shareholders’ equity divided by total common shares outstanding. (4) The reported figure includes the effect of a $618 million deposit received on September 13, 2011 in connection with a class action settlement, which was disbursed by year end. The deposit was invested in excess reserves at the Federal Reserve Bank. (5) Computed by dividing noninterest expense by the sum of net interest income and noninterest income. art (ärt) n. 1. the human ability to create something or execute a plan; any craft, skill, profession, or its principles that display ingenuity and unusual perception At EagleBank, we define our art of banking by the basic principles of loyalty, trust, consistency, and commitment. We use knowledge, skill, and ingenuity to create solutions for customers and the community. Like a gifted artist, our passion is what drives us. Artwork, recreation of Van Gogh’s Starry Night using door knobs, levers, and back plates, at EagleBank client Union Hardware, Bethesda, MD. 5 The ArT of Banking P e oPl e . P As s i o n . P e r f o r mAn c e . The art of banking at eagleBank today is based on the same principles upon which the Bank was founded. We build relationships through local accessibility, market knowledge, and community involvement. We combine old-fashioned values with state-of-the-art systems and a full spectrum of products and services. As we practice our art, we remain dedicated to the people we employ and serve, the passion that inspires us, and the consistent performance that is our constant goal. in 2011, eagleBank continued the trend of record growth and profitability. During a time of stress and struggle for the banking industry, eagleBank achieved 12 consecutive quarters of increasing, record profits. in the past three years, the Bank also ascended from the eighth largest maryland-based bank to the second. Profits increased 47% over 2010, and total assets grew 36% to $2.83 billion. our ability to lend remained strong with a 23% increase in total loans. We experienced a 16% increase in new relationships, and the Bank’s deposits grew 39%. This remarkable performance is a result of sound banking principles that stress relationship building over risk taking, and rational growth over radical change. eagleBank presents an attractive alternative to small community banks that lack our lending capability and array of banking products, and large, often impersonal regional banks. our strong community ties and local market knowledge combined with the human and financial resources of a much larger financial institution, enables us to outperform our peers, increase market share, and respond quickly to customers’ needs. in 2011, we strengthened and expanded our presence in the three markets we serve. We opened a new branch in Washington, Dc and two new branches in northern Virginia while we also increased our customer base in maryland. As a valuable asset for business development and insight, we continued to augment and diversify our three eagleBank Advisory Boards with people who reflect varied interests and industries in their respective markets. To enhance our organic growth, in 2011 eagleBank completed a total system upgrade. We are now able to offer improved banking options, such as new Treasury services products to help customers master the art of cash management. With the Bank’s increased lending capability, we also refocused our efforts on eagle commercial Ventures, which provides mezzanine financing for real estate projects 6 in our market areas. in addition, we continued to grow the Bank’s fee-based income with our highly successful residential real estate lending Division, with eagle insurance services through The meltzer Group, and, now, with investment advisory services through Graystone consulting, a business of morgan stanley smith Barney. in 2011, we took the unprecedented step of appointing two chief lending officers to focus on their specialized areas of expertise: commercial real estate lending and commercial and industrial lending. These are areas of significant growth and profitability for the Bank, and it made sense to complement our increased financial resources with the strength and depth of our human resources. Just as art nurtures and inspires the human spirit, our art of banking and entrepreneurial spirit nurtures and inspires the community. eagleBank supports a bill introduced in 2011 that encourages the District of columbia government to deposit funds in local banks. The Bank is also a strong proponent of a maryland initiative urging municipalities to bank locally. By keeping the funds local, money stays in the community for reinvestment and loans to local businesses. our leadership in the movement to promote banking locally is mirrored by eagleBank’s leadership role in other civic or philanthropic efforts. Whether we are fighting deadly diseases or funding local cultural endeavors, we practice our art with passion and purpose. eagleBank’s commitment to customer service and corporate citizenship is an integral part of the Bank’s performance, growth, and success. in the corporate culture of eagleBank, recognizing and responding to customer needs is not a lost art. neither is framing customized solutions with products and services that are not one size fits all. As we have grown, our art of banking has not changed. it is still based on building relationships and earning the loyalty and respect of our customers, employees, shareholders, and community. Left and above: EagleBank Rosslyn Branch, Arlington, VA. EagleBank Executive Officers at EagleBank Lending Office, Bethesda, MD, (left to right) Laurence Bensignor, EVP/General Counsel; Susan Riel, Senior EVP/ Chief Operating Officer of EagleBank; Thomas Murphy, President of Community Banking; Michael Flynn, EVP/Chief Operating Officer of Eagle Bancorp; Ronald Paul, Chairman/Chief Executive Officer; Virginia Heine, EVP/Chief C&I Lending Officer; Janice Williams, EVP/Chief Credit Officer; James Langmead, EVP/Chief Financial Officer; Antonio Marquez, EVP/Chief CRE Lending Officer. 9 dEdicating our art to thE PEoPlE WE EMPloY & sErvE A late night call to eagleBank’s chairman requesting a loan for a business opportunity gets a response the next day. A lender goes into a customer meeting with a blank sheet of paper and without preconceived notions, ready to use expertise, insight, and ingenuity to meet the customer’s needs. A teller greets a customer by name, having built a banking relationship into a friendship. What distinguishes eagleBank from its competitors, is that, for us, banking is an art that is practiced across the board, by top management and by every employee. The dedication and loyalty that our employees share is evidenced by the fact that we have the lowest turnover among our peers. At eagleBank, your banker is not here today, gone tomorrow. We promote from within and welcome new talent who embrace our exacting standards. We also pride ourselves on placing the right people in the right position to both encourage their growth and the growth of the Bank. in addition to appointing two chief lenders to head our commercial real estate and commercial and industrial Divisions, in 2011, new bank officers assumed positions in other growth areas such as eagle insurance services and eagle commercial Ventures. more than 100 new employees joined the eagleBank team in 2011. These professionals bring their knowledge and skill to a leading community bank that values their contribution. Just as we are dedicated to the satisfaction of our employees, we dedicate our art to our customers and shareholders. in order to build shareholder value and better serve customers, we expanded our reach with new branches in key locations, increasing our network to 15 at year-end 2011. Joining our existing Tysons corner branch, we solidified our presence in northern Virginia by adding branches in Ballston and rosslyn followed by branches in reston (february 2012), merrifield (fall 2012), and other locations under consideration. The Bank’s new Gallery Place branch in Penn Quarter enhances our ability to serve customers in the nation’s capital. our seven maryland branches continue to add new relationships. local branches and quality products and services are the cornerstone of customer service at eagleBank. in 2011, our system conversion enabled us to offer new Treasury services products: Account reconciliation, cash concentration, card services, eDi reporting, and Ach Debit Authorization. These convenient services help customers manage their working capital more efficiently. 10 With our increased lending capability, we refocused our efforts on bridge and mezzanine financing which offers yet another solution for the loans that many companies need for their commercial projects. The Bank’s fee-based income continues to be a good source of revenue. our residential real estate lending Division is thriving in all of our market areas. in the past two years, the volume of closed loans has multiplied ten-fold, and generally each loan is pre-sold to an investor prior to loan closing with the borrower. eagle insurance services is now served by a new vice president, to facilitate the marketing of a wide range of business insurance products and services. Through a referral agreement with Graystone consulting, a business of morgan stanley smith Barney, we added investment advisory services to provide best-in-class wealth management expertise and a broad array of investment options. once again, in 2011, financial analysts, business publications, civic groups, and trade associations recognized both the Bank and senior managers for their exceptional performance and contribution to the area’s well being and economic health. receiving awards and recognition for our efforts speaks of our consistency and success in serving customers and the community. We are an accessible, locally based bank with the human and financial resources to respond quickly and creatively to our customers’ needs. This is our art and our driving force. Left: EagleBank client Ridgewells, Bethesda, MD, catered this unique event at Tipton Airport Hanger, MD. Below: EagleBank client Tiny Jewel Box, Washington, DC. 12 Practicing our art With Passion for thE coMMunitY eagleBank’s mission statement affirms that we differentiate ourselves by our leadership role in “supporting and enhancing our community.” We take our mission of corporate citizenship personally, whether it is our chairman initiating a blog to reach out to the community, branch managers teaching financial literacy to middle schoolers, or employees working hand-in-hand with customers for a variety of philanthropic causes. our passion in practicing our art of banking to benefit clients is mirrored by our passion for those whose artistic efforts enrich the experience of living and working in the Washington metropolitan Area. As we meet the banking needs of customers such as The shakespeare, howard, and olney Theaters, eagleBank also donates funds to local cultural endeavors including Arena stage, Babe ruth museum, imagination stage, The holocaust museum, strathmore, and the Bethesda Arts & entertainment District. fighting deadly diseases has always been a focus for eagleBank. The seventh Annual eagleBank foundation fight Breast cancer Golf classic was played at the Trump national Golf club in Potomac falls, Virginia on october 10th. Through the combined efforts of eagleBank, our employees, directors, customers, and the community, this sold-out event raised over $350,000 for organizations that treat, fight, and research this devastating disease. With our 2011 Golf classic, eagleBank’s total fundraising efforts to combat breast cancer have generated over $1.2 million. Left and above: Joseph Clarke, SVP/Branch Administration Manager, with 6th graders at Takoma Park Middle School, Silver Spring, MD, teaching financial literacy as part of the Junior Achievement of Greater Washington program, JA Economics for Success. EagleBank client United Negro College Fund, headquarters, Washington, DC; construction financed by EagleBank. 15 Another annual event, the ronald D. Paul companies Kidney Walk, was held on october 15 th. The 2011 event drew 700 participants and raised over $200,000 to benefit the treatment of kidney disease. With $13,000 in contributions, eagleBank’s team of 33 walkers placed first for the most funds raised. in 2011, eagleBank’s financial growth enabled the Bank to continue to support a variety of local charities. our beneficiaries include The Trust for the national mall, Dc central Kitchen, BesT Kids, fair chance, Boys & Girls clubs of America, habitat for humanity, the Juvenile Diabetes research foundation, and numerous other philanthropies. making our area a better place to live and work is a significant goal for eagleBank. in a difficult economy, employment numbers show that the increase in jobs comes from either small or start-up businesses. These businesses rely on the liquidity of local community banks to meet their lending needs. eagleBank is a leader in the independent community Bankers of America (icBA) “Go local” campaign that advocates banking locally. As a leader in this effort, we support a bill introduced to the District of columbia council in 2011 which states that for every dollar the local municipality puts into a community bank, the bank will put two dollars back into the community in loans. eagleBank is also an active proponent of a maryland bill that encourages state and local governments to place deposits in local banks. By providing part of the funding these institutions need to continue to lend to small businesses, municipalities work with banks to fuel the economy and create jobs. it is a win-win for everyone — local businesses, banks, consumers, and the area’s economic health. continuing our art & consistEnt PErforMancE eagleBank’s consistent performance and growth makes it possible for us to create new opportunities and take on new challenges. it also reinforces our commitment to do business as we always have . . . with passion, loyalty, and responsiveness. As we move further into our second decade, we look forward to growing our position as the area’s leading community bank and strengthening the bond with our customers, who are our financial partners. in our leadership role, we build trust and respect for the Bank as we endeavor to enrich our area’s economic health. We are proud of our solid relationships with customers, shareholders, employees, and the community. They are a result of our dedication to service and unparalleled financial expertise. using exceptional service and knowledge to create lasting relationships is an art — and it is what we do best. PErforMancE & achiEvEMEnts eaGleBank & eaGle BancoRP RecoGnized foR excePtional financial PeRfoRmance in 2011 • Named to the Class of 2011 “Sm-All Stars” by Sandler O’Neill + Partners as one of the top 25 best performing small cap banks and thrifts in the nation. • Ranked by the American Banker in the top 150 banks in the country for c&i loan activity and efficiency ratio. • Cited by Stifel Nicolaus as one of 23 community banks with stock rated as a “buy.” • Ranked by SNL Financial as 39 th among the 100 best performing community banks between $500 million and $5 billion in assets and recognized as one of the nation’s top performers for two consecutive years. • Recognized as the 2 nd largest bank in Assets and market capitalization headquartered and operating in maryland—moving from 8th to 2nd place in only three years. • Attained the 3rd largest deposit market share of any locally based community bank in Washington, Dc metropolitan Area. • Received the District of Columbia Chamber of Commerce “2011 Economic impact Award.” eaGleBank BankeRS RecoGnized foR outStandinG achievement & SeRvice in 2011 • Ronald Paul, Chairman & Chief Executive Officer, recognized by Washingtonian Magazine in the January 2011 issue as a “2010 Washingtonian of the Year.” • Ronald Paul and Robert Pincus, Vice Chairman, received the “27 th Annual Achievement Award” presented by the District of columbia Building industry Association. • Ronald Paul, Robert Pincus, Thomas Murphy, President of Community Banking, and michael flynn, executive Vice President & chief operating officer of eagle Bancorp, as well as Bank officers John richardson, robin Powell, sydnee stein, and Barbara millard, nominated as 2011 Top Bankers by readers of SmartCEO. • Thomas Murphy elected to the Board of Directors of Community Services for Autistic Adults and children. • Joseph Clarke, Senior Vice President/Branch Administration Manager, elected to Junior Achievements’ montgomery county Advisory Board. • Ryan Riel, Senior Vice President/Group Leader/Commercial Real Estate Lending, appointed to the Board of Directors of the children’s inn at nih. • Deborah Shumaker, Senior Vice President/Director of Treasury Management, elected to the Board of Directors of Keen Greater Dc. consistEnt financial PErforMancE eagleBank’s sound financial performance is evidenced by the Bank’s consistent growth in both total assets and net income. As shown by the following tables, our art of banking enables us to outperform our peers with steady balance sheet growth and 12 consecutive quarters of increasing earnings. conSiStent Balance Sheet GRowth TOTAL ASSETS 9 . 6 % R 2 G A N C B G E P E E R C A G R 8 . 8 1 % 1 S R A L L O D F O S N O I L L I M $3,000 $2,750 $2,500 $2,250 $2,000 $1,750 $1,500 $1,250 $1,000 $750 $500 $250 $0 06Q4 07Q1 07Q2 07Q3 07Q4 08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q3 09Q4 10Q1 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4 conSiStent net income GRowth S R A L L O D F O S D N A S U O H T $7,500 $7,000 $6,500 $6,000 $5,500 $5,000 $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 Net Income Available to Common TARP Dividend SBLF Dividend $7,174 7 . 2 % R : 2 G A O M E C C T I N E N N B G E PEER CAGR: 0.2%1 06Q4 07Q1 07Q2 07Q3 07Q4 08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q3 09Q4 10Q1 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4 (1) regional peers includes publicly-traded commercial banks with assets between $1 and $5 billion and headquartered in Washington, Dc, Virginia, West Virginia, maryland, Pennsylvania and Delaware who reported total assets and net income or loss for all reporting periods shown above. Source: SNL Financial (2) cAGr = compound Annual Growth rate EaglEBank Branch locations Rockville I - 2 7 0 Montgomery County 5 9 I-4 Reston* 267 /DULLES TOLL ROAD Fairfax County - 6 6 I Tysons Corner Merrifield* V I R G I N I A Regional Headquarters In-Process M A R Y L A N D I-95 Prince George’s County I - 4 9 5 Silver Spring Bethesda Chevy Chase Arlington DC Washington U S - 5 0 Arlington County 5 9 I- 3 Prince George’s County Alexandria I - 4 9 5 7 maRYland 5 waShinGton, dc 3 viRGinia 2 in-PRoceSS 17 total 19 georgetown residential real Estate lending 1044 Wisconsin Avenue, nW 12505 Park Potomac Avenue Washington, Dc 20007 suite 510 Potomac, mD 20854 T: 301.738.7200 f: 301.444.4529 808 landmark Drive suite 221 Glen Burnie, mD 21061 T: 301.971.3344 f: 301.971.3335 12011 sunset hills road reston, VA 20190 T: 571.319.4837 f: 301.841.9831 Eagle insurance services, llc 7830 old Georgetown road Bethesda, mD 20814 T: 240.497.2061 f: 301.986.0680 investment advisory services 7815 Woodmont Avenue Bethesda, mD 20814 T: 240.497.1788 f: 301.841.9872 maRYland Bethesda viRGinia Ballston 7815 Woodmont Avenue 4420 n. fairfax Drive Bethesda, mD 20814 Arlington, VA 22203 T: 240.497.2044 f: 301.986.8529 T: 571.319.4800 f: 571.319.4808 chevy chase Merrifield 15 Wisconsin circle 2905 District Avenue chevy chase, mD 20815 fairfax, VA 22031 T: 301.280.6800 f: 301.280.6810 Opens Fall 2012 reston Park Potomac 12011 sunset hills road 12505 Park Potomac Avenue reston, VA 20190 Potomac, mD 20854 T: 301.444.4520 f: 301.444.4525 T: 571.319.4848 f: 571.319.4847 Opened February 2012 T: 202.481.7025 f: 202.298.6575 k street 2001 K street, nW Washington, Dc 20006 T: 202.296.6886 f: 202.296.0212 McPherson square 1425 K street, nW Washington, Dc 20005 T: 202.408.8411 f: 202.408.8644 rockville rosslyn otheR officeS 110 north Washington street 1919 n. lynn street rockville, mD 20850 Arlington, VA 22209 T: 301.738.9600 f: 301.738.1210 rollins avenue 130 rollins Avenue rockville, mD 20852 T: 301.287.8500 f: 301.468.5601 shady grove 9600 Blackwell road rockville, mD 20850 T: 301.762.3076 f: 301.762.2234 silver spring 8665-B Georgia Avenue silver spring, mD 20910 T: 301.588.6700 f: 301.589.5064 T: 571.319.4855 f: 571.319.4866 tysons corner commercial deposit services 2001 K street, nW suite 204 Washington, Dc 20006 T: 202.292.1630 8601 Westwood center Drive f: 202.292.1654 Vienna, VA 22182 T: 703.485.8011 f: 703.356.4951 waShinGton, dc dupont circle commercial lending 7830 old Georgetown road Bethesda, mD 20814 T: 240.497.2049 f: 301.718.8973 2001 K street, nW suite 204 1228 connecticut Avenue, nW Washington, Dc 20006 Washington, Dc 20036 T: 202.466.3161 f: 202.466.4931 gallery Place 700 7th street, nW Washington, Dc 20001 T: 202.628.7300 f: 202.628.6116 T: 202.292.1624 f: 202.292.1652 8601 Westwood center Drive Vienna, VA 22182 T: 703.485.8011 f: 703.356.4951 20 Board of dirEctors ronald d. Paul * chairman, President & chief executive officer of eagle Bancorp, inc. susan lacz ** Principal & chief executive officer of chairman, President & chief executive officer of eagleBank ridgewells caterers President of ronald D. Paul companies robert P. Pincus * Vice chairman of eagle Bancorp, inc. Vice chairman of eagleBank chairman of Blackstreet capital management & milestone merchant Partners, llc leslie M. alperstein, Ph.d. * President of Washington Analysis, llc Bruce h. lee ** President of lee Development Group norman r. Pozez * chairman & chief executive officer of uniwest companies thomas W. roberson ** Partner of montouri & roberson arthur h. Blitz, Esquire ** Principal of Paley, rothman, Goldstein, rosenberg, eig & cooper, chartered donald r. rogers, Esquire * Principal of shulman, rogers, Gandal, Pordy & ecker, P.A. dudley c. dworken * managing Partner, JDJ investments, llc steven l. fanaroff ** Vice President & chief financial officer of magruder holdings, inc. James a. soltesz, P.E. ** President & chief executive officer of loiederman soltesz Associates, inc. Benjamin M. soto, Esquire ** President & chief executive officer of Premium Title & escrow, llc harvey M. goodman * President of Goodman-Gable-Gould/Adjusters International leland M. Weinstein * President of syscom services, inc. neal r. gross * founder, chairman & chief executive officer of neal r. Gross & company Benson klein, Esquire ** Principal of Ward & Klein, chartered Eric h. West ** founding Principal of West, lane & schlager realty Advisors, llc * Director of eagleBank and eagle Bancorp, inc. ** Director of eagleBank only 21 EaglEBank advisor Y Boards eagleBank continues to grow thanks to our community banking strategy in which our Advisory Boards play a key role. The advice, experience, and business expertise of our Advisory Board members are invaluable resources for eagleBank. albert a. d’alessandro, chairman-All Advisory Boards financial solutions, llc diStRict of columBia adviSoRY BoaRd memBeRS John akridge, iv height Analytics donald Blanchon Whitman-Walker health christopher M. Brown Ackerman Brown law gregory J. casten oceanPro industries, lTD george chopivsky, iii simpson housing, l.P. lynda Ellis capitol concierge Zeid Masri silverhaze Partners, llc Barry n. dickstein Blackstreet capital management, llc Brad l. Mendelson, cPa, Mst mendelson & mendelson maRYland adviSoRY BoaRd memBeRS anthony a. cantalupo, Jr., Esquire The cantalupo law Group, PA Maureen West Mccarthy, cPa snyder cohn, Pc Jay a. Eichberg eichberg construction co. larry E. Walker The Walker Group Joann kay Kay Brothers management company Jeffrey E. Weintraub, cPa Goodman & company Marc Wertheimer, Esquire selzer Gurvitch rabin Wertheimer Polott & obecny, P.c. noRtheRn viRGinia adviSoRY BoaRd memBeRS douglas c. Boggs, Esquire Patton Boggs kristina Bouweiri reston limousine Enrico c. cecchi, Esquire iDi Group companies Matt curry curry’s Auto service susan M. gabay Bluestone capital Partners harry M. glazer, Esquire Kelley Drye & Warren, llP harry klaff Jones lang lasalle robert Malm Beaconcrest homes Wade tetsuka, cPa u.s. Transactions corp. richard c. thomas clark’s litho 22 ExEcutivE officErs ronald d. Paul * chairman of the Board, President & chief executive officer of eagle Bancorp, inc. and eagleBank susan g. riel * senior executive Vice President & chief operating officer of eagleBank thomas d. Murphy ** President of community Banking of eagleBank laurence E. Bensignor, Esquire * executive Vice President & General counsel of eagle Bancorp, inc. and eagleBank Michael t. flynn * executive Vice President & chief operating officer of eagle Bancorp, inc. virginia n. heine ** executive Vice President & chief commercial & industrial lending officer of eagleBank James h. langmead, cPa * executive Vice President & chief financial officer of eagle Bancorp, inc. and eagleBank antonio f. Marquez ** executive Vice President & chief commercial real estate lending officer of eagleBank Janice l. Williams, Esquire ** executive Vice President & chief credit officer of eagleBank * officer of eagleBank and eagle Bancorp, inc. ** officer of eagleBank only officErs robert r. hoffmann EVP/Chief Administrative Lending Officer Marian l. Egge SVP/Group Leader/Commercial Lending— Elaine B. rial SVP/Loan Services Manager susan o. kooker EVP/Chief Risk Officer kim ray EVP/Senior Operating Officer roshan a. alavi SVP/Manager of Residential Real Estate J. Mercedes alvarez SVP/Director of Marketing John a. Bettini SVP/Commercial Loan Officer II andrew s. Bridge SVP/Business Development Sales Manager Joseph l. clarke SVP/Branch Administration Manager thomas g. durrer SVP/Commercial Loan Officer II northern Virginia Elizabeth a. ferrenz SVP/Director of Customer Service John B. richardson SVP/Group Leader/Commercial Lending— Washington, Dc robert r. giraldi SVP/Group Leader/Commercial Lending— ryan a. riel SVP/Group Leader/Commercial Real Estate maryland Lending—Maryland/Washington, DC kai M. hills SVP/Business Development Officer susan J. schumacher SVP/Commercial Deposit Services Manager linda M. lacy SVP/Information Technology Manager deborah c. shumaker SVP/Director of Treasury Management Jodee lichtenstein SVP/Special Assets Group Manager kevin B. thomas SVP/Director of Internal Audit russell d. Mcnish SVP/Director of Human Resources douglas l. vigen SVP/Group Leader/Commercial Real Estate thomas a. Mee SVP/Group Leader/Commercial Real Estate Lending—Maryland/Washington, DC lending—northern Virginia terrence d. Weber SVP/Controller 23 Jay r. abrahams VP/Reporting & Planning Manager Youssouf M. diallo VP/Branch Manager II Barbara B. Patterson VP/Recruiting & Employee Relations Maria g. acosta VP/Commercial Deposit Services Officer II P. lucas flynn VP/Credit Analyst II allan l. acree VP/Commercial Real Estate Loan Officer II calvin l. garlic VP/Commercial Credit Manager M. Jacqueline ames VP/Business Development Officer Joan M. grant VP/Wire & Cash Room Manager timothy a. annett VP/Commercial Real Estate Loan Officer II sharon a. gray VP/Loan Servicing Manager Myron a. Ballard VP/Area Manager Yulissa guerra VP/Branch Manager II andrea rc Berkeley VP/Commercial Real Estate Loan Officer II timothy d. hamilton VP/Commercial Loan Officer II Brian l. Blonder VP/Residential Mortgage Production Jackie ho VP/Credit Analyst II Manager/Anne Arundel Michael a. Brooks VP/Regulatory Reporting Manager charles E. Brown VP/Director of Compliance trevor r. Brown VP/Area Manager karen M. Bryan VP/Commercial Deposit Services Officer II Judy l. callaway VP/Commercial Deposit Services Officer II Michele l. capone VP/Workout, Liquidation & Recovery Officer horacio chacon VP/Commercial Loan Officer II terry l. clarke VP/MIS Project Manager vincent J. curcio VP/Residential Mortgage Production Manager/Virginia Mark a. deitz VP/Residential Mortgage Production Manager/Park Potomac Michael l. devito VP/SBA Loan Officer glenn M. Johnson VP/Electronic Application Manager louise l. Johnson VP/Branch Manager II scott s. kinlaw VP/Commercial Loan Officer II lisa J. knapp VP/Commercial Loan Officer II charles d. levingston VP/Deputy Controller susan M. lewis VP/Project Manager Matthew B. leydig VP/Commercial Real Estate Loan Officer II W. randy Mcvey VP/Commercial Loan Officer courtney W. Michel VP/Human Resources Officer Barbara i. Millard VP/Branch Manager II shan Mohamed VP/Business Development Officer thomas s. olin VP/Commercial Real Estate Loan Officer II manager david a. Paxton VP/Branch Manager II robin d. Powell VP/Commercial Loan Officer II leonid rann VP/Commercial Loan Officer II alexis santin VP/Treasury Management Sales Manager kenneth s. scales VP/Commercial Loan Officer II ryan g. segars VP/Commercial Real Estate Loan Officer II lynne k. shaer VP/Senior Assistant Controller starla t. shambourger VP/Construction Loan Administration management officer Janette s. shaw VP/Marketing & Advertising Manager Jenny a. shtipelman VP/Business Development Officer catherine E. slepitza VP/Deposit Operations Manager kenneth a. sonner VP/Regional Residential Mortgage Production manager sydnee c. stein VP/Business Development Officer kenneth J. van valkenburgh VP/Insurance Sales/Eagle Insurance services Jane n. Willis VP/Credit Analyst II Bannon P. Wysocki VP/Business Development Officer corPoratE inforMation annual Meeting Bethesda marriott hotel 5151 Pooks hill road Bethesda, mD 20814 investor relations michael T. flynn eVP & chief operating officer eagle Bancorp, inc. Thursday, may 17, 2012, at 10:00 a.m. 7815 Woodmont Avenue form 10-k The company’s form 10-K may be obtained, free of charge, by contacting: Jane e. cornett corporate secretary eagle Bancorp, inc. 7815 Woodmont Avenue Bethesda, mD 20814 240.497.2041 jcornett@eaglebankcorp.com www.eaglebankcorp.com stock Exchange listing common shares of eagle Bancorp are traded on the nAsDAQ capital market Bethesda, mD 20814 240.497.2040 mflynn@eaglebankcorp.com www.eaglebankcorp.com counsel Buckleysandler llP 1250 24th street, nW suite 700 Washington, Dc 20037 independent accounting firm stegman & company 405 east Joppa road suite 100 Baltimore, mD 21286 under the symbol eGBn. member federal Deposit insurance corporation equal housing lender member federal reserve system member federal home loan Bank of Atlanta Affirmative Action/Equal Opportunity Employer ©2012 eagle Bancorp, inc. transfer agent and registrar computershare Trust company, n.A. P.o. Box 43078 Providence, ri 02940-3078 www.computershare.com corporate headquarters 7815 Woodmont Avenue Bethesda, mD 20814 301.986.1800 stock PErforMancE coMP arison Stock Price Performance. The following table compares the cumulative total return on a hypothetical investment of $100 in the company’s common stock on December 31, 2001 through December 31, 2011, with the hypothetical cumulative total return on the nAsDAQ Bank index and the s&P 500 for the comparable period, including reinvestment of dividends. 350 300 250 200 150 100 50 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 12/31/11 EAGLE BANCORP, INC. NASDAQ BANK INDEX S&P 500 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Eagle Bancorp, inc. 100.00 134.58 174.09 201.97 300.06 296.89 209.83 110.88 201.90 278.27 280.39 nasdaQ Bank index 100.00 106.95 142.29 161.73 158.61 180.53 144.58 113.44 94.95 108.39 97.01 s&P 500 100.00 77.90 100.24 111.15 116.61 135.03 142.45 89.75 113.50 130.59 133.35 Assuming $100 was invested on December 31, 2001 . o h t i l s ’ k r a l c : g n i t n i r P . ) y h p a r g o t o h P d e e r f : 0 1 e g a P , y h p a r g o t o h P l i s t a m l e a h c i m : 6 e g a P ( y h p a r g o t o h P t n u l B n o r : y h p a r g o t o h P . d n a l y r a m , a d s e h t e B , . c n i , p u o r G n g i s e D a l l e m o c : n g i s e D stephanie comella’s Art of Design eagleBank dedicates the 2011 Annual report to stephanie comella, our friend and the founder of comella Design Group, who died on July 4, 2011. since the beginning, stephanie and her firm have practiced their art of design to create eagleBank Annual reports that distinctively reflect our art of banking. in addition to contributing her talent to eagleBank’s marketing efforts, stephanie also gave generously of her time to the Annual eagleBank foundation fight Breast cancer Golf classic. As comella Design Group carries on stephanie’s and the Bank’s tradition of excellence with this year’s Annual report, we express our gratitude for her creativity, support, and friendship. www.eaglebankcorp.com eGBn-2011 

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