Eagle Bancorp
Annual Report 2013

Plain-text annual report

years. And counting. The entrepreneurial spirit in the service of community. 2013 Annual Report Banking is not just a business— it’s a relationship. One that’s always based on understanding and responding to the business needs of our customers. We established EagleBank in 1998 with that firm belief. So celebrating our fifteenth anniversary is about much more than marking a date; it’s about making a difference. Doing things that count. Because each customer’s success strengthens us all. That’s what community banking is all about. The wisdom of our approach is reflected in the strength of our numbers in 2013. With total assets over $3.7 billion, our stock price performance is its best ever. The fourth quarter was our twentieth consecutive quarter of increasing net income. And EagleBank ranks number one in deposit market share and total deposits among community banks based in the Washington Metropolitan Area. But the real story of our success over our first fifteen years isn’t in the numbers on a page. It’s in the page itself: the open-minded, open-ended blank page with which we begin every meeting with a customer. Creating solutions that make sense for each one, helping that customer along its individual path to success. That has been our passion, and our own path to success, for fifteen years. And counting. 2 | EAGLE BANCORP, INC. 2013 ANNUAL REPORT | ShaREhOldERS lEttER To Our Shareholders It’s hard to believe that Eagle Bancorp, Inc. and EagleBank have been serving metropolitan Washington for over 15 years. We opened our doors in 1998. It was the year Titanic won Best Picture, Tara Lapinski took gold in Nagano, and the Yankees swept the Padres. The world said hello to a startup named Google and goodbye to an icon named Frank Sinatra. The iPod, the iPhone, and the iPad were all still to come. And it was the year EagleBank commenced serving our customers, with a goal of returning personalized, community banking to our region. Fast forward to today. EagleBank is metropolitan Washington’s premier community bank. We lead the area community banks in loan growth; you’ll see our signs throughout the region. We hold more deposits than any other community bank in the area. We are recognized as a go-to bank—for deposits, for loans and for safety and soundness. EagleBank is large enough to meet customer needs while remaining small enough and nimble enough to satisfy customer needs. Go to a national or regional bank and they’ll point to their array of products and say pick the one you want, but only if it is on the shelf. We meet with you with a blank piece of paper and ask, “How can we help?” That attitude, that flexibility is what drives our growth. There were a dozen or so of us who comprised the initial staff of EagleBank. (Six are still with us!) Today, we are almost 400 strong, and we do mean strong. Our only merger has been with Fidelity & Trust Bank, in 2008. What a combination it has been. We were nearly $1.4 Billion in assets when we closed the merger. At year-end 2013, we were over $3.7 Billion in assets. And all of that growth has been organic, profitable growth. We did it the old fashioned way. We earned it. 2013 was, in many ways, one of milestone achievements and record performance for Eagle Bancorp, Inc.: Our assets ended 2013 at over $3.7 Billion Our net income reached $47 Million, reflecting 20 consecutive quarters of record earnings Our loans increased by 18%, to $2.9 Billion Our deposits were up 11%, to $3.2 Billion Our asset quality remains solid, with a coverage ratio of Reserves to Non-Performing Loans of 166% Our common stock price increased by 69%, and we issued a 10% stock dividend We opened our 18th branch in Old Town Alexandria, VA, as we celebrated our 15th Anniversary While we hold more deposits than any other metropolitan Washington community bank, our share of the deposit market is only 1.87%. In 2010, we had 1.14% of the market; that’s an increase of 73 basis points— and $1.3 Billion—in just three years. EagleBank has tremendous potential to continue to grow…in one of the country’s strongest regional economies. However, as we have mentioned in previous years’ letters, the Company is more concerned with consistent growth in profitability than with the size of its balance sheet. Eagle Bancorp had a 1.37% Return on Average Assets in 2013 and a 14.60% Return on Average Common Equity. Accordingly, we are again the most profitable bank headquartered in Maryland. The steadily rising net income—five consecutive years of increased, record-level earnings—is the result of successful performance across many indicators compared to national and local bank peers: an increase in earning assets, a superior Net Interest Margin, continued strong credit quality metrics and more effective expense management. The favorable Net Interest Margin was maintained through our disciplined approach to loan and deposit pricing. 1998 EagleBank opens for business with the Bethesda, Rockville, and Silver Spring, MD branches 1998 Eagle Bancorp, Inc. starts trading on NASDAQ under the symbol EGBN Ronald Paul, Chairman and CEO (right) Robert Pincus, Vice Chairman (left) 4 | EAGLE BANCORP, INC. 2013 ANNUAL REPORT | ShaREhOldERS lEttER Six-YEaR SummaRY | EAGLE BANCORP, INC. 2013 ANNUAL REPORT | 5 Asset quality—already strong—improved during 2013 to an even stronger position. We identify potential problems early, and then we address them aggressively. The Efficiency Ratio, the measure of non-interest expenses to total revenue, again improved, and compares favorably to peer banks. It takes less than fifty cents to generate a dollar of revenue. This accomplishment resulted from attentive management of operating expenses combined with revenue growth. We focus on efficiency and productivity, to prudently control expenses while at the same time maintaining the desired infrastructure. This allows us to offer the highest level of attention to our customers and the community, through qualified, motivated employees. In addition, we are proud of the advanced technologies we have harnessed to support state-of-the-art products and services. Our strong capital base is another key factor in our ability to continue to grow EagleBank. Your Board of Directors is committed to preserving a sound capital position, as demonstrated by the capital raising activities conducted in both 2011 and 2012. During 2013, the Company significantly improved its capital position through internally generated capital, with our record profitability contributing retained earnings at a faster pace than our asset growth. All of our capital ratios are considerably above the levels necessary to be considered “well capitalized.” The consistent, balanced performance of the Company has been well received by the financial community, including respected analysts and industry publications. We were ranked among the Top-30 community banks in the US in 2013, for the second consecutive year. The stock price increase of 69% during 2013 again outperformed industry and broader-market indices, as has been the case for the last three years and the last five years. The 10% stock dividend was well received by the market, as our shares are more liquid. During 2013, EagleBank furthered its strategic expansion into Northern Virginia. We continued to recruit high-quality commercial and real estate lenders with feet-on-the-ground experience. We are now the only community bank with a major presence in Suburban Maryland, Virginia, and Washington, DC. We maintain our emphasis on building relationships … on developing as well as strengthening customer bonds, throughout the region. Our differentiator: This is our hometown. Our decision makers are right here; headquarters is not in some far-away city. Metropolitan Washington is our only market. And we know it inside and out. EagleBank is proud, too, to play an active, vocal role in the community. Our directors, senior management and officers hold leadership roles in local business and charitable organizations. We continue to work closely with our elected officials at both the local and federal levels to foster government programs supportive of small business and our customer base. Both the Bank and the EagleBank Foundation consistently provide support to those in need in our community. 2013 marked our fifteenth anniversary, a milestone. From our initial three branches in one county, we now serve metropolitan Washington through 18 branches and three regional offices. In 1998, no one knew from online or mobile banking. Today, we—and our customers—take it for granted. We are excited about all that we have accomplished and what we will continue to do as the premier community bank in metropolitan Washington. In fact, we believe the best is yet to come. To all of our shareholders, directors, employees, and customers—and the community at large—thank you for your support of EagleBank. Fifteen years. And counting. Sincerely, Ronald D. Paul Chairman of the Board, President & Chief Executive Officer Robert P. Pincus Vice Chairman Six-Year Summary of Selected Financial Data I D N E D O R E P - T E E H S E C N A L A B ) a t a d e r a h s r e p t p e c x e s d n a s u o h t n s r a i l l o d ( F O T N E M E T A T S S N O I T A R E P O t p e c x e s d n a s u o h t n s r a i l l o d ( ) a t a d e r a h s r e p 2 A T A D E R A H S N O M M O C R E P S O I T A R Y T I L A U Q T E S S A 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 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 Net income, basic Net income, diluted Dividends declared Book value Tangible book value 3 Common shares outstanding Weighted average common shares outstanding Net interest margin Efficiency ratio 4 Return on average assets Return on average common equity Total capital (to risk weighted assets) Tier 1 capital (to risk weighted assets) Tier 1 capital (to average assets) 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 Years Ended December 31 2013 2012 2011 2010 2009 2008 $ 389,405 $ 310,514 $ 324,053 $ 237,576 $ 245,644 $ 169,079 42,030 226,923 176,826 80,571 1,550 2,718 2,945,158 2,493,095 2,056,256 1,675,500 1,399,311 1,265,640 40,921 3,510 3,771,503 3,225,414 37,492 3,785 29,653 4,145 24,754 4,188 20,619 4,379 3,409,441 2,831,255 2,089,370 1,805,504 2,897,222 2,392,095 119,771 140,638 152,662 1,726,798 146,884 3,377,640 3,059,465 2,564,544 1,884,654 56,600 337,263 393,863 333,753 56,600 293,376 349,976 289,591 56,600 210,111 266,711 205,966 22,582 182,134 204,716 177,946 1,460,274 150,090 1,617,183 22,612 165,709 188,321 161,330 18,403 2,533 1,496,827 1,129,380 215,952 1,354,456 36,312 106,059 142,371 103,526 $ 157,294 $ 141,943 $ 119,124 $ 96,658 $ 84,338 $ 65,657 5 Year Growth Rate 18% 73% 18% 17% 7% 20% 23% -11% 20% 9% 26% 23% 26% 19% 12,504 9,602 24,716 84,579 75,325 28,318 47,007 566 46,441 14,414 16,190 21,364 76,531 56,172 20,883 35,289 566 34,723 $ 1.81 $ 1.50 $ 1.76 - 13.03 12.89 1.46 - 11.62 11.47 20,077 10,983 13,501 63,276 38,289 13,731 24,558 1,511 23,047 1.05 1.04 - 9.57 9.38 19,832 9,308 9,242 51,005 25,755 9,098 16,657 1,299 15,358 24,809 7,669 7,297 42,773 16,384 5,965 10,419 2,307 8,112 23,676 -12% 3,979 4,366 30,817 11,551 4,123 7,428 177 19% 41% 22% 46% 47% 45% 26% 7,251 45% $ 0.71 $ 0.50 $ 0.70 - 8.41 8.21 0.50 - 7.71 7.51 0.57 0.56 0.10 7.58 7.40 26% 26% 11% 12% 13% 25,885,863 25,250,378 21,948,128 21,670,426 21,487,649 13,985,791 25,726,062 23,135,886 21,819,087 21,613,450 16,107,623 12,712,226 15% 4.30% 49.90% 1.37% 14.60% 13.01% 11.53% 10.93% 4.32% 51.40% 1.18% 14.14% 12.20% 10.80% 10.44% 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% $ 33,927 $ 35,983 $ 36,019 $ 31,988 $ 27,131 $ 26,366 0.90% 1.39% 1.06% 1.50% 1.27% 1.44% 1.53% 1.48% 1.50% 1.47% 1.76% 1.45% 120.61% 104.19% 82.33% 77.39% 76.00% 69.80% Net charge-offs to average loans 0.23% 0.37% 0.32% 0.35% 0.42% $ 6,173 $ 8,351 $ 6,084 $ 5,173 $ 5,453 $ 1,123 0.12% 1999 EagleBank reaches $100 million in assets 1999 Eagle Bancorp, Inc. declares its first stock dividend 1 2 3 4 Tangible common shareholders’ equity, a non-GAAP financial measure, is defined as total common shareholders’ equity reduced by goodwill and other intangible assets. Presented giving retroactive effect to the 10% stock dividends paid on the common stock on June 14, 2013 and October 1, 2008. In July 2008, the Company discontinued the payment of its quarterly cash dividend. Tangible book value per common share, a non-GAAP financial measure, is defined as tangible common shareholders’ equity divided by total common shares outstanding. Computed by dividing noninterest expense by the sum of net interest income and noninterest income. 6 | EAGLE BANCORP, INC. 2013 ANNUAL REPORT | FinanCial PERFORmanCE FinanCial PERFORmanCE | EAGLE BANCORP, INC. 2013 ANNUAL REPORT | 7 Balanced Loan and Deposit Growth Net Income Available to Common Shareholders for Years Ending $3,500,000,000 3500000 $3,000,000,000 3000000 $2,500,000,000 2500000 $2,000,000,000 2000000 $1,500,000,000 1500000 $1,000,000,000 1000000 $500,000,000 500000 $0 0 Compound Annual Growth Rate – Total Loans: 39% Compound Annual Growth Rate – Total Deposits: 35% $50,000,000 50000 Compound Annual Growth Rate: 34% $40,000,000 40000 $30,000,000 30000 $20,000,000 20000 $10,000,000 10000 $0 0 -$10,000,000 -10000 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total Assets at Year End $4,000,000,000 4000000 Compound Annual Growth Rate: 33% $3,500,000,000 3500000 $3,000,000,000 3000000 $2,500,000,000 2500000 $2,000,000,000 2000000 $1,500,000,000 1500000 $1,000,000,000 1000000 $500,000,000 500000 $0 0 Total Return Performance Compound Annual Growth Rate Eagle Bancorp, Inc NASDAQ Composite Index NASDAQ Bank Index S&P 500 15 Years 10 Years 5 Years 3 Years 1 Year EGBN 18% 14% 42% 33% 69% 5% 5% 5% 9% 23% 18% 40% 1% 8% 15% 42% 7% 18% 16% 32% E U L A V X E D N I 1,200 1200 1,100 1,000 1000 900 800 800 700 600 600 500 400 400 300 200 200 100 0 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2000 The company reports net income in only its second full year in business 2000 EagleBank exceeds $150 million in assets m. luiS COnStRuCtiOn | EAGLE BANCORP, INC. 2013 ANNUAL REPORT | 9 MD We provided an $8.6 million line of credit that enabled the firm not only to keep going, but to continue growing. There when it counts. When a small business needs help most, a community bank has the most to offer— enabling fellow entrepreneurs to survive and thrive. Cidalia Luis-Akbar and Natalia Luis had guided M. Luis Construction through the recession. But then the sisters’ troubles began. The Maryland-based road construction company their parents started in 1985 had achieved great success. Looking to build on that success, in late 2010 the sisters invested millions in an asphalt manufacturing plant in Rockville, MD. In February 2011, a fire destroyed the company’s central operations hub, a loss worth several million dollars. Then the rains came. Over several months, record-setting rainfall throughout the region washed out construction schedules, greatly reducing M. Luis Construction’s revenues. As a result, the company’s relationship with a national bank ended—the bank that had been M. Luis’s lender of choice for over twenty-five years. That’s when we learned about the sisters’ predicament from a mutual friend. (At EagleBank, we’re all about relationships.) As entrepreneurs ourselves, we understand that all small-business owners face challenges. From time to time, unforeseen events will demand unconventional thinking and unusual flexibility. That’s par for the course. We also understand that, for small-business owners, timely access to money is what keeps the lights on. We met with the Luis sisters and recognized them as fellow entrepreneurs— passionate, capable, energetic people running a successful family business. People who had just hit a rough spot and needed a hand. So we were happy to do for M. Luis Construction what its national bank wouldn’t: We provided an $8.6 million line of credit that enabled the firm not only to keep going, but to continue growing. Others took notice. Last fall, President Obama invited the Luis sisters to the White House for an event celebrating the contributions small businesses make to the economy by creating jobs, improving infrastructure, and strengthening communities. The following month, the President visited M. Luis Construction’s Rockville facilities for another day of celebrating small-business success. Stories like that of the Luis sisters and M. Luis Construction are ones we never tire of hearing—or being a part of. Because we believe in the power and passion of entrepreneurs, and the difference only a community bank like EagleBank can make in their success. Cidalia luis-akbar (sitting) and natalia luis (standing) of m. luis Construction 2001 First Washington, DC branch opens at 2001 K Street, NW 2001 EagleBank makes the Top SBA Lenders list in the Washington Metro Area 2002 Shady Grove branch opens in Rockville, MD 2002 SBA names EagleBank a Preferred Lender VA We had proven that we could do deals the big banks wouldn’t do. 10 | EAGLE BANCORP, INC. 2013 ANNUAL REPORT | thE RaPPaPORt COmPaniES Growing by knowing. to achieve steady growth over the long term, a community bank’s greatest asset is knowing the area and the people it serves. “Objects in mirror are closer than they appear.” And a community bank that’s closer to the people can be bigger and more capable than one imagines. Just ask Gary Rappaport. The retail real estate firm he founded thirty years ago, The Rappaport Companies, has grown into one of the largest owners and managers of shopping centers in the Mid-Atlantic. That kind of growth, in that business, takes big financing. So, even though we’d known Gary for decades, we realized he probably thought his business had outgrown the capabilities of a local bank like ours. Then, a few years ago, he called us. He owned an older shopping center in serious need of redevelopment in order to reposition it to be more productive. But the place was so—let’s say “challenging”—that none of his usual big- name bankers would consider refinancing it. But we would. Because we know the Greater Washington market. We know where and when it makes sense to invest, and we could see beyond the shopping center’s problems to its potential. And we know Gary. So we sat down with Gary and a blank sheet of paper. “EagleBank works with people, not numbers on paper,” Gary said later. “They understood our vision and wanted to help us achieve it.” Together, we came up with a creative approach to his refinancing situation— one that involved dollar amounts that Gary had thought were beyond us. And suddenly, by enabling him to realize his plans for that center, Gary saw our community bank in a new light. First, we had shown that we’d grown big enough to do big deals just like the national and regional banks could do. Second, and more important, we had proven that we could do deals the big banks wouldn’t do. Precisely because we’re a community bank—with intimate local knowledge and banking expertise, combined with an entrepreneur’s agility and a belief in our borrower. Which are the very qualities that have fueled our steady growth these last fifteen years. “I work with many banks, both large and small,” Gary says, “and I can tell you that there is no better bank than EagleBank.” 2003 EagleBank welcomes its 100th employee 2003 Eagle Bancorp, Inc. raises $30 million in secondary stock offering 2004 Dupont Circle branch opens in Washington, DC 2004 EagleBank reaches $500 million in assets Gary Rappaport of the Rappaport Companies Whitman-WalkER hEalth | EAGLE BANCORP, INC. 2013 ANNUAL REPORT | 13 The business of community health care. DC to EagleBank, serving the community is much more than volunteering or donating. it’s an integral part of the business plan. One of the pleasures of being a community bank is knowing that our success results from helping other local businesses succeed. When we can help a nonprofit organization whose business is helping members of the community directly, the satisfaction is even greater. That’s why we are especially proud of our relationship with Whitman-Walker Health, an internationally recognized provider of health care to the DC-area gay, lesbian, bisexual, transgender, and broader communities, as well as those living with HIV. Established in 1978, Whitman-Walker Health has provided culturally competent, quality care for thousands, especially those who face barriers to health care access. As a nonprofit, the organization then known as Whitman-Walker Clinic focused on caring for its patients—many of whom were losing their battle with AIDS— leaving its financials in a less healthy state. While doing so much good, the organization had made some business decisions that in 2008 threatened its survival. Of course, the deteriorating economy in that year didn’t help. Corporate and private donations began to dry up just as Whitman-Walker Health faced long- term debt repayments in the millions of dollars. In need of a major infusion of capital, Whitman-Walker Health appealed to one of the nation’s big banks with which it had a long-standing relationship. The bank declined to even consider the loan request. A friend put us in touch with people at Whitman-Walker Health and we did what we always do: We sat down with them over a blank sheet of paper and asked, “How can we help?” Upon hearing the compassion and commitment to the community, we secured our relationship. We not only took care of the organization’s pressing need for cash; we also offered advice on its whole financial situation. We helped Whitman-Walker Health out of its immediate difficulties and set up a line of credit that continues to sustain its crucial services. And our expert advice is ongoing as well. A recent example: Whitman-Walker Health, now on firm financial ground, was looking to expand its operations into a new building in downtown DC. It so happened that one of our developer clients was constructing a building (for which we had provided the financing) and was looking for tenants. We put together a deal and helped two clients with a single transaction. When you’re headquartered in the community—when you’re really involved in the community as a daily part of your business—good things happen. We not only took care of the organization’s pressing need for cash; we also offered advice on its whole financial situation. don Blanchon of Whitman-Walker health 2005 McPherson Square branch opens in Washington, DC 2005 EagleBank Foundation hosts the First Annual Fight Against Breast Cancer Golf Classic 2006 Chevy Chase, MD branch opens 2006 EagleBank introduces banking program for nonprofit associations 14 | EAGLE BANCORP, INC. 2013 ANNUAL REPORT | COmmunitY Making a difference in the community. From elementary school to high school, inside the classroom and out, the people of EagleBank are committed to helping students in the Greater Washington area. One of the most important ways we really put the “community” in community bank is by helping students in Maryland, Virginia, and the District of Columbia. EverFi Program EagleBank partnered with EverFi, Inc., to bring a fun, web-based program that teaches critical financial skills to students at three Washington, DC high schools. The EverFi Financial Literacy course uses the latest in new-media technology to bring complex financial concepts to life. The program helps students become better-informed, more responsible citizens. Teaching Financial Skills EagleBank’s Merrifield office established a partnership with Lemon Road Elementary School in Falls Church, Virginia. EagleBank volunteers devote lunch hours to scheduled mentoring sessions with individual students, and also developed a financial literacy program for the classroom. Teacher for a Day EagleBank’s Treasurer spent a day in April sharing some first-hand banking knowledge with a group of very bright second-graders. The students at Bannockburn Elementary School in Bethesda, Maryland, joined in an interesting discussion on some of the basic principles of banking and finance. Back to School for All In August, EagleBank employees donated school supplies for families in need. Children’s Program Director Emma Kupferman of the District Alliance for Safe Housing (DASH) coordinated the campaign. DASH provides housing opportunities and support services for homeless families in Montgomery County, Maryland. Summer Reading Party EagleBank’s Helping Hands Volunteer group joined the Arlington Partnership for Affordable Housing again this year for a Kids’ Summer Reading Party. Naren Aryal, co-founder and CEO of Mascot Books in Herndon, Virginia, arranged a generous donation of children’s books. Our volunteers enjoyed collecting and sharing books with the young residents of Columbia Grove Apartments. Even more fun was playing, reading, and interacting with the kids. Annual Scholarship In cooperation with the Montgomery College Foundation, EagleBank once again awarded an annual scholarship to a student pursuing financial studies at Montgomery College, who will then move on to complete a degree at the Smith Business School at the Universities at Shady Grove. Congratulations to the 2013 winner, Neha Thanki. “ We are thankful to everyone for their continued support of our efforts to save more lives and help with the fight against this disease.” Ninth Annual EagleBank Foundation Golf Classic. On October 14, 2013, the ninth annual EagleBank Foundation Fight against Breast Cancer Golf Classic at the trump national Golf Club raised over $300,000. Proceeds from this event continue to support research and outreach programs through foundation partnerships with local hospitals and other organizations. Since the first golf tournament in 2005, the Foundation has raised over $1,650,000 to assist these organizations in their fight against breast cancer. in addition to providing vital support services, these funds enable ongoing research aimed at putting an end to breast cancer. “Our golf tournament is another one of the ways that we give back to our community,” said EagleBank Chairman and CEO Ron Paul. “We are thankful to everyone for their continued support of our efforts to save more lives and help with the fight against this disease.” Ronald Paul and donald Rogers, Chairman of EagleBank Foundation the Summer Reading Party June 26, 2013 2007 EagleBank receives a 100% rating in “overall performance” from Washington Consumer Checkbook 2007 Eagle Bancorp, Inc. announces agreement to acquire Fidelity & Trust Financial Corporation 2008 Georgetown, DC; Rollins Avenue, Rockville, MD; and Tysons Corner, VA branches open 2008 Inaugural EagleBank Bowl at RFK Stadium, Washington, DC, benefits the Wounded Warrior Project 16 | EAGLE BANCORP, INC. 2013 ANNUAL REPORT | OuR CuStOmERS Just a few of our valued customers. 2009 CEO Ron Paul wins the Greater Washington Entrepreneur of the Year Business Services award 2009 Park Potomac, MD branch opens 2009 Eagle Bancorp, Inc. raises $55 million in stock offering Steadily growing community. a few final thoughts on our first fifteen years. and our next. in spite of the rapid pace of technological change, fifteen years is not so long a time. it is, however, just long enough to gauge the soundness of a business plan, the wisdom of an operating philosophy. to separate the flush of initial enthusiasm from the true passion that sustains long-term growth. We have achieved fifteen years of steady growth by thinking like entrepreneurs. By putting ourselves in our clients’ shoes. By really knowing this market and understanding lending at all levels. and by being not just located in this community but involved in it, every single day. Our hope is that we will continue the same steady growth over the next fifteen years. Because that will mean we’ve helped more and more local businesses succeed. it will also mean we have maintained the passion and the focus that got us this far. 2010 EagleBank significantly expands its Residential Lending division 2010 EagleBank launches Eagle Insurance Services 2011 Ballston, VA; Rosslyn, VA; and Gallery Place, Washington, DC branches open 2011 EagleBank launches Investment Advisory Services 20 | EAGLE BANCORP, INC. 2013 ANNUAL REPORT | OFFiCERS OFFiCERS | EAGLE BANCORP, INC. 2013 ANNUAL REPORT | 21 BOARD OF DIRECTORS Ronald D. Paul* Chairman, President & Chief Executive Officer of Eagle Bancorp, inc.; Chairman & Chief Executive Officer of EagleBank; President of Ronald d. Paul Companies Robert P. Pincus* Vice Chairman of Eagle Bancorp, inc.; Vice Chairman of EagleBank EXECUTIVE OFFICERS Ronald D. Paul Chairman, President & Chief Executive Officer of Eagle Bancorp, inc.; Chairman & Chief Executive Officer of EagleBank Susan G. Riel Executive Vice President of Eagle Bancorp, inc. and Senior Executive Vice President & Chief Operating Officer of EagleBank John A. Bettini SVP/Relationship manager ii Andrew S. Bridge SVP/ Business development Officer ii Charles E. Brown SVP/director of Compliance Joseph L. Clarke SVP/Retail Banking manager Leslie M. Alperstein, Ph.D.* President & Chief Executive Officer of Washington analysis, llC Thomas D. Murphy President of Community Banking of EagleBank Mark A. Deitz SVP/Residential Real Estate lending area Sales manager Dudley C. Dworken* managing Partner of dworken associates, llC Steven L. Fanaroff** managing director of Fanaroff & Steppa, llC & Bedrock asset management Harvey M. Goodman* President of Goodman-Gable-Gould/ adjusters international Benson Klein, Esquire** Principal of Ward & klein, Chartered Susan Lacz** Principal & Chief Executive Officer of Ridgewells Catering Bruce H. Lee** President of lee development Group Norman R. Pozez* Chairman & Chief Executive Officer of uniwest Companies Donald R. Rogers, Esquire* Principal of Shulman, Rogers, Gandal, Pordy & Ecker, P.a. James A. Soltesz, P.E.** President & Chief Executive Officer of Soltesz, inc. Benjamin M. Soto, Esquire** President & Chief Executive Officer of Premium title & Escrow, llC Leland M. Weinstein* President of Syscom Services, inc 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. and Executive Vice President of EagleBank 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 Steven A. Reeder Executive Vice President and Chief deposit Officer of EagleBank Janice L. Williams, Esquire Executive Vice President & Chief Credit Officer of EagleBank EAGLEBANK OFFICERS Christopher J. Ewing EVP/deputy Chief Operating Officer Susan O. Kooker EVP/Chief Risk Officer Mark S. Merrill EVP/Finance Elizabeth A. Ferrenz SVP/director of Branch Operations Kai M. Hills SVP/Business development Officer i Scott S. Kinlaw SVP/Relationship manager ii Linda M. Lacy SVP/information technology manager Matthew B. Leydig SVP/Relationship manager ii Jodee Lichtenstein SVP/Special assets Group manager John C. McManus SVP/Business development Officer ii John S. Powell SVP/Sales and Sales Coaching manager Robin D. Powell SVP/Relationship manager ii Lisa J. Punt SVP/director of human Resources Ashley S. Reiser SVP/team leader/Commercial Real Estate lending John B. Richardson SVP/team leader/Commercial lending Ryan A. Riel SVP/team leader/Commercial Real Estate lending Alexis Santin SVP/director of treasury management Kenneth S. Scales SVP/Relationship manager ii Douglas L. Vigen SVP/team leader/Commercial Real Estate lending Terrence D. Weber SVP/Controller Derek T. Whitwer SVP/team leader/Commercial lending Jay R. Abrahams VP/Reporting & Planning manager Maria G. Acosta VP/Commercial deposit Services Officer ii M. Jacqueline Ames VP/Commercial deposit Officer i Mary L. Anderson VP/Business development Officer i Timothy A. Annett VP/Relationship manager ii Fahed T. Arekat VP/Branch Relationship manager i Nick F. Arena, Jr. VP/Relationship manager i Eileen F. Ascher VP/SBa loan Officer Shap A. Bashar VP/Senior mortgage Banker Andrea RC Berkeley VP/Relationship manager ii Laurent M. Berman VP/Senior mortgage Banker Michael A. Brooks VP/loan administration & Servicing manager Karen M. Bryan VP/Commercial deposit Services Officer ii Jenifer J. Bush VP/Relationship manager ii Deborah L. Cabala-Moshides VP/treasury management Officer Judy L. Callaway VP/Commercial deposit Services Officer ii Robin B. Cannon VP/Compensation & Salary administration manager Kim Ray EVP/Senior Operations Officer Susan J. Schumacher SVP/Commercial deposit Services manager Michele L. Capone VP/Workout, liquidation & Recovery Officer Roshan A. Alavi SVP/Residential Real Estate lending manager J. Mercedes Alvarez SVP/director of marketing Jessica L. Tencza SVP/team leader/Commercial lending Kevin B. Thomas SVP/director of internal audit *director of EagleBank and Eagle Bancorp, inc. **director of EagleBank only 2011 Eagle Bancorp, Inc. raises $56 million in capital from Small Business Lending Fund Terry L. Clarke VP/miS Project manager Jane E. Cornett VP/Corporate Secretary Vincent J. Curcio VP/Residential lending Production manager Lisa D’Ambrosio-Irons VP/Branch Relationship manager ii Clarice G. Lopes Ribeiro VP/Branch Relationship manager ii Linda A. Dawkins VP/Commercial deposit Officer ii Michael A. McCann VP/information Security Officer Youssouf M. Diallo VP/area manager Archisha A. Mehan VP/SBa team leader Lawrence H. Dunford VP/leadership & development director Courtney W. Michel VP/human Resources Officer Tsedenia Fikru VP/loan Servicing Production manager Barbara I. Millard VP/Branch Service manager ii P. Lucas Flynn VP/Credit analyst ii Timothy L. Foster VP/Branch manager iii Jill Friedrich VP/Relationship manager ii Calvin L. Garlic VP/Commercial Credit manager Joan M. Grant VP/Exceptions manager Yulissa Guerra-Reyes VP/Commercial deposit Officer i Timothy D. Hamilton VP/Relationship manager ii Paul L. Harsanyi VP/Senior mortgage Banker Jackie Ho VP/Credit analyst iii Paul R. Hornyak VP/Senior mortgage Banker Juan Jara VP/area manager Catherine C. Johnson VP/Relationship manager ii Glenn M. Johnson VP/Electronic applications & deposit Operations manager Charles A. Kapur VP/Branch Relationship manager ii Daniel T. Laurenzi VP/Relationship manager ii Charles D. Levingston VP/treasurer Deborah A. Levy VP/Senior mortgage Banker Susan M. Lewis VP/Project manager Andrew P. Lunenfeld VP/Senior mortgage Banker Raj Mahajan VP/Senior mortgage Banker Barbara B. Patterson VP/training & development manager Samantha S. Perry VP/Workout, liquidation & Recovery Officer Mehdi Pirzadeh VP/Senior mortgage Banker Leonid Rann VP/Relationship manager ii Ramon H. Royster VP/Credit analyst ii Wayne P. Schisler VP/Consumer loan manager Ryan G. Segars VP/Relationship manager ii Lynne K. Shaer VP/Senior assistant Controller Starla T. Shambourger VP/Construction loan administration Officer Janette S. Shaw VP/marketing & advertising manager Jenny A. Shtipelman VP/Relationship manager i Justin E. Silvers VP/Branch Relationship manager i Daniel G. Swanson VP/Relationship manager i Marshelle R. Taylor VP/aml/BSa Compliance manager Deborah B. Thompson VP/loan documentation manager Kenneth J. Van Valkenburgh VP/insurance Sales/ Eagle insurance Services Erin M. von Felden VP/Recruiting & Employee Relations manager Jane N. Willis VP/Credit analyst ii 2012 Merrifield and Reston, VA branches open; Northern Virginia Residential Lending Center opens 2012 American Banker magazine names CEO Ron Paul Community Banker of the Year 22 | EAGLE BANCORP, INC. 2013 ANNUAL REPORT | BRanCh lOCatiOnS Branch Locations MARYLAND Bethesda 7815 Woodmont avenue Bethesda, md 20814 240.497.2044 Chevy Chase 15 Wisconsin Circle Chevy Chase, md 20815 301.280.6800 Park Potomac 12505 Park Potomac avenue Potomac, md 20854 301.444.4520 Rockville 110 north Washington Street Rockville, md 20850 301.738.9600 Rollins Avenue 130 Rollins avenue Rockville, md 20852 301.287.8500 Shady Grove 9600 Blackwell Road Rockville, md 20850 301.762.3076 Silver Spring 8665-B Georgia avenue Silver Spring, md 20910 301.588.6700 VIRGINIA Ballston 4420 n. Fairfax drive arlington, Va 22203 571.319.4800 Merrifield 2905 district avenue Fairfax, Va 22031 571.319.4900 Old Town Alexandria 277 S. Washington Street alexandria, Va 22314 703.956.5075 Reston 12011 Sunset hills Road Reston, Va 20190 571.319.4848 Rosslyn 1919 n. lynn Street arlington, Va 22209 571.319.4855 Tysons Corner 8601 Westwood Center drive Vienna, Va 22182 703.485.8011 WASHINGTON, DC Dupont Circle 1228 Connecticut avenue, nW Washington, dC 20036 202.466.3161 Gallery Place 700 7th Street, nW Washington, dC 20001 202.628.7300 Georgetown 1044 Wisconsin avenue, nW Washington, dC 20007 202.481.7025 K Street 2001 k Street, nW Washington, dC 20006 202.296.6886 McPherson Square 1425 k Street, nW Washington, dC 20005 202.408.8411 OTHER OFFICES Commercial Deposit Services 2001 k Street, nW Suite 204 Washington, dC 20006 202.292.1630 Commercial Lending 7830 Old Georgetown Road Bethesda, md 20814 240.497.2049 2001 k Street, nW Suite 204 Washington, dC 20006 202.292.1624 11911 Freedom drive Suite 610 Reston, Va 20190 703.485.8031 Residential Real Estate Lending 12505 Park Potomac avenue Suite 510 Potomac, md 20854 301.738.7200 12011 Sunset hills Road Reston, Va 20190 571.319.4837 Eagle Insurance Services, LLC 7830 Old Georgetown Road Bethesda, md 20814 240.497.2061 Investment Advisory Services 7830 Old Georgetown Road Bethesda, md 20814 240.497.1788 MD Rockville 270 MONTGOMERY COUNTY 95 Potomac 495 Silver Spring Bethesda Reston Tysons Corner FAIRFAX COUNTY Merrifield NUMBER OF BRANCHES Maryland Virginia Washington, D.C. Total 7 6 5 18 Regional headquarters D.C. Rosslyn 66 ARLINGTON 295 VA 395 ALEXANDRIA 495 2012 Eagle Bancorp, Inc. raises $45 million in stock offerings 2013 Old Town Alexandria, VA branch opens 24 | EAGLE BANCORP, INC. 2013 ANNUAL REPORT | CORPORatE inFORmatiOn Eagle Bancorp, Inc. ANNUAL MEETING Bethesda Marriott Hotel 5151 Pooks hill Road Bethesda, md 20814 thursday, may 15, 2014, at 10:00 a.m. FORM 10-K the Company’s Form 10-k may be obtained, free of charge, by contacting: Jane E. Cornett VP/Corporate Secretary Eagle Bancorp, inc. 7830 Old Georgetown Road, third Floor Bethesda, md 20814 240.497.2041 jcornett@EagleBankCorp.com For more 2013 financial information about Eagle Bancorp, visit our investor Relations page at www.EagleBankCorp.com. STOCK EXCHANGE LISTING Common shares of Eagle Bancorp are traded on the naSdaQ Capital market under the symbol EGBn. TRANSFER AGENT AND REGISTRAR Computershare trust Company, n.a. P.O. Box 30170 College Station, tx 77842-3170 1.877.282.1168 www.computershare.com CORPORATE OFFICES 7830 Old Georgetown Road , third Floor Bethesda, md 20814 301.986.1800 INVESTOR RELATIONS Michael T. Flynn EVP/Chief Operating Officer Eagle Bancorp, inc. 7830 Old Georgetown Road, third Floor Bethesda, md 20814 240.497.2040 mflynn@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 EAGLEBANK member Federal deposit insurance Corporation Equal housing lender member Federal Reserve System member Federal home loan Bank of atlanta affirmative action/Equal Opportunity Employer ©2014 Eagle Bancorp, inc. 2013 EagleBank has largest deposit market share of any Washington area community bank 2013 EagleBank celebrates 15 years serving the community 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. EagleBankCorp.com 

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