Eagle Bancorp
Annual Report 2015

Plain-text annual report

Annual Report 2015 Larger than ever. But never too big. EagleBank’s growth provides expanded capabilities—with the same access to bank leadership for those we serve. Introduction In 2015, EagleBank continued its remarkable growth, reaching new levels of financial strength, market performance, and lending capabilities. We have achieved 28 consecutive quarters of record earnings and a record level of market capitalization. We are proud to be the DC area’s number-one community bank. And we’re even prouder of achieving that success not in spite of our local focus, but because of it. Our larger capabilities mean we can serve larger organizations and provide greater levels of assistance. But we’ll never forget that we’re a community bank. And community means people. We believe more than ever that good banking must be built on good relationships. Personal attention. The flexibility (as well as the capability) to deliver individualized solutions to business challenges. That’s how the whole community grows and prospers. Take our new alliance with George Mason University. The big headline was the name change of the Patriot Center to EagleBank Arena. But the big story is the deeper relationship being built between EagleBank and Mason students and faculty, in the form of scholarships, internships, lectures, and mentoring. Bringing EagleBank people into the classroom, and bringing students into the real world of community banking, in Northern Virginia and beyond. Together with Mason, EagleBank is nurturing the next generation of business leaders—one of the most important ways we can serve our community. Yes, EagleBank is now large enough to do more. But we’ll never outgrow that entrepreneurial spirit of personalized service. Always asking, “What can we do for you?” And always listening. EAGLEBANK ANNUAL REPORT 2015 5 Letter to the Shareholders To Our Shareholders The year 2015—when we celebrated our 17th anniversary— was another one filled with success and growth for Eagle Bancorp, Inc. A number of particular achievements coupled with our steady discipline and drive have positioned EagleBank, our principal subsidiary, to continue to take advantage of the strong foundation we have built. Our bank has more assets and a higher deposit market share in the Washington area than any other local community bank that was founded here. During 2015, we completed the seamless integration of Virginia Heritage Bank, with which we merged in October 2014. We added depth to our employee ranks with some valuable additions from VHB, expanded our market share, and retained VHB’s very valuable customer base. In March, we strengthened our capital position by raising $100 million in common equity, at favorable pricing, due to the tremendous demand for our stock. Later in the year, as planned, we redeemed all of the preferred stock associated with the Small Business Lending Fund. In May, we announced a historic alliance with George Mason University, a statement relationship evidencing our commitment to giving back to our community. As a result of the efforts of 400+ team members, EagleBank further solidified its position in 2015 as the leading local bank in the Washington, DC area: • Our assets exceed $6 billion • We made $686 million of net new loans to businesses and real estate projects • We generated $848 million in net new deposits • We hold the highest deposit market share of any local community bank • We are the largest—and the most profitable— bank headquartered in Maryland • Our credit quality remains outstanding; net charge- offs were only 0.17% of annual average loans and problem loans were only 0.26% of total loans • Our market capitalization exceeded $1.6 billion— 58% greater than a year ago For the year, net income was $84.2 million, an increase of 55% over 2014; earnings per share (diluted) were $2.50. This represented a record level of earnings for the seventh consecutive year. In fact, our efforts have resulted in record earnings for 28 quarters in a row, dating back to tumultuous 2008. Eagle Bancorp’s five-year compound growth rate on Earnings per Share (diluted) is 29%, and our Return on Average Assets for the year was 1.49%. We are most pleased with and proud of these indicators of profitability and success. They represent the continuation of a long, steady period of disciplined growth. We note that our success is not simply in one or two metrics, but across the board. Return on Average Tangible Common Equity was 14.69%. Total Shareholder Return for 2015 was 42%. With all of these accomplishments, our $5.2 billion deposit base only represents a 3.0% market share. While that represents the largest market share of any Washington-area community bank, the runway ahead is tremendous. That growth opportunity drives us daily. Our $5.0 billion loan portfolio also makes us the market leader among local community banks. The net interest margin was highly favorable, at 4.33%. It’s no coincidence. We actively manage our asset- liability process. We are disciplined in pricing loans while at the same time focused on managing our deposit composition and cost of funds. Demand deposit accounts made up over 27% of total deposits, consistent with our past levels. Because the Bank maintains a relatively neutral asset-liability position, we are well positioned when a rise—or drop—in interest rates occurs. A bank’s success is not just measured in terms of the size of a loan portfolio, but of its quality. The exceptional credit quality of EagleBank’s loan portfolio continues to be one of our prime attributes. Our reserve position is quite strong, and our net charge-offs were only 0.17% of our annual average loans for the year. Having a low net charge-off ratio has been a constant for EagleBank for years. Keep in mind that our loan portfolio has grown $3.3 billion over the past five years, yet our net charge-offs generally remain flat. At year-end, our Coverage Ratio of Allowance for Loan Losses to Nonperforming Loans was quite strong, at 398%. EagleBank’s efficiency—the banking industry’s version of “What does it cost to earn a dollar?”—is particularly favorable. Our Efficiency Ratio in 2015 was only 42.49%, further evidence of the successful integration and efficiencies created as a result of the Robert P. Pincus, Vice Chairman (left) and Ronald D. Paul, Chairman & CEO 6 EAGLEBANK ANNUAL REPORT 2015 7 merger with Virginia Heritage Bank. The low ratio is the result of focused attention on operating leverage. Revenues increased substantially, while the cost to produce those revenues increased at a slower rate. The Company expects to continue to benefit from this level of efficiency. As an example, due to the ongoing reduction in customers walking into a branch, we closed two branches and are relocating two more to smaller-sized locations. Our investments in technology continue to facilitate an efficient operation. Yet none of the cost-saving efforts has caused us to sacrifice the essence of EagleBank—relationship-based banking. 2015 was a year when EagleBank saw the combined benefits of the VHB merger, an increased capital position, strong growth in loans and deposits, and disciplined management. We are well poised to build upon the strong foundation that was established over our first 17 years, and to propel us forward. As we continue to grow, we are able to capitalize on our strength and size while still offering our customers the one-on-one relationships to which they have become accustomed. We’re still a local bank, with decision makers right here in the area. We have keen knowledge of the market and its players, and customers and prospects have direct access to senior leaders of the Bank; we pride ourselves on our ability to execute. We will continue to build EagleBank the same way we arrived at this leadership position—by putting relationships F•I•R•S•T. FIRST is an acronym: Flexible. Involved. Responsive. Strong. Trusted. Customers know that we will work with their needs, not with prepackaged products on a shelf. They can brainstorm with Bank leadership, who remain involved as the relationship deepens and broadens. They can trust us to give them prompt answers. And they know they are dealing with a $6 billion bank, with capital well in excess of required levels and with a desire to grow loans, while never sacrificing credit quality. Not only do we support our customers, they help us too. We learn from them every day. It’s truly what a relationship should be. EagleBank is focused on everyday issues, from the ever-changing workforce to market dynamics to community needs. One major area of attention: cybersecurity concerns and enhancing technology to counter threats of computer hacking. We seek to educate our customers, to share with them best practices, in an effort to help them shore up their processes and systems. As a community bank, we never forget that we are part of the community. We have a history from day one of supporting local groups and causes. That commitment was never more evident than in May, when we announced a $6.6 million, 10-year support agreement with George Mason University, one of the area’s premier institutions of higher learning and the pride of Northern Virginia. Mason students are EagleBank scholars, and interns in our departments. Bank executives speak in classrooms and to student groups. We seek George Mason graduates who have an interest in Finance. And we support Mason Athletics. The school’s Patriot Center was rechristened EagleBank Arena as evidence of this great alliance. The state of your Company is sound and promising. The challenges ahead, while different from those we faced in our first 17 years, create the opportunity for Eagle Bancorp to excel, to propel us forward and to thrive. We never rest, always looking to grow our base and build upon the many relationships we have with customers, shareholders, vendors, employees, and the community. Thank you for your continued support. Sincerely, Ronald D. Paul Chairman of the Board President Chief Executive Officer Robert P. Pincus Vice Chairman Six-Year Summary of Selected Financial Data Financial Data 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 per share, basic Net income per share, diluted Book value Tangible book value 3 Common shares outstanding Weighted average common shares outstanding, basic Weighted average common shares outstanding, diluted Net interest margin Efficiency ratio 4 Return on average assets Return on average common equity CET1 capital (to risk weighted assets) 5 Total capital (to risk weighted assets) Tier 1 capital (to risk weighted assets) Tier 1 capital (to average assets) Tangible common equity ratio Nonperforming assets and loans 90+ past due Nonperforming assets and loans 90+ past due to total assets Nonperforming loans to total loans Allowance for credit losses to loans Allowance for credit losses to nonperforming loans Net charge-offs I D N E D O R E P - T E E H S E C N A L A B I S N O T A R E P O F O T N E M E T A T S 2 A T A D E R A H S N O M M O C R E P I S O T A R I Y T L A U Q T E S S A ) s d n a s u o h t n i s r a l l o d ( ) s d n a s u o h t n i s r a l l o d ( ) s d n a s u o h t n i s r a l l o d ( Years Ended December 31 2015 2014 2013 2012 2011 2010 $ 504,772 $ 404,903 $ 389,405 $ 310,514 $ 324,053 $ 237,576 47,492 44,317 42,030 226,923 176,826 80,571 4,998,368 4,312,399 2,945,158 2,493,095 2,056,256 1,675,500 52,687 108,542 46,075 109,908 40,921 3,510 37,492 3,785 29,653 4,145 24,754 4,188 6,076,649 5,247,880 3,771,503 3,409,441 2,831,255 2,089,370 5,158,444 4,310,768 3,225,414 2,897,222 2,392,095 1,726,798 142,356 280,420 119,771 140,638 152,662 146,884 5,338,048 4,627,121 3,377,640 3,059,465 2,564,544 1,884,654 Five-Year Compound Growth Rate 16% -10% 24% 16% 92% 24% 24% -1% 23% — 738,601 738,601 630,059 71,900 548,859 620,759 438,951 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 -100% 182,134 204,716 177,946 $ 253,180 $ 191,573 $ 157,294 $ 141,943 $ 119,124 $ 96,658 19,238 14,638 26,628 110,716 135,216 51,049 84,167 601 13,095 10,879 18,345 99,728 86,216 31,958 54,258 614 83,566 53,644 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 20,077 10,983 13,501 63,276 38,289 13,731 24,558 1,511 23,047 $ 2.54 $ 2.01 $ 1.81 $ 1.50 $ 1.05 $ 2.50 22.07 18.83 1.95 18.21 14.56 1.76 13.03 12.89 1.46 11.62 11.47 1.04 9.57 9.38 19,832 9,308 9,242 51,005 25,755 9,098 16,657 1,299 15,358 0.71 0.70 8.41 8.21 33,467,893 30,139,396 25,885,863 25,250,378 21,948,128 21,670,426 32,836,449 26,683,759 25,726,062 23,135,886 21,819,087 21,613,450 33,479,592 27,550,978 26,358,611 23,743,815 22,316,593 22,046,554 4.33% 42.49% 1.49% 12.32% 10.68% 12.75% 10.68% 10.90% 10.56% 4.44% 50.67% 1.31% 13.50% — 12.97% 10.39% 10.69% 8.54% 4.30% 49.90% 1.37% 14.60% — 13.01% 11.53% 10.93% 8.86% 4.32% 51.40% 1.18% 14.14% — 12.20% 10.80% 10.44% 8.50% 3.99% 56.22% 0.97% 11.71% — 11.84% 10.33% 8.21% 7.29% 4.09% 59.26% 0.86% 8.74% — 11.64% 9.91% 9.32% 8.53% $ 19,091 $ 35,667 $ 33,927 $ 35,983 $ 36,019 $ 31,988 0.31% 0.26% 1.05% 0.68% 0.52% 1.07% 0.90% 0.84% 1.39% 1.06% 1.23% 1.50% 1.27% 1.59% 1.44% 1.53% 1.51% 1.48% 397.95% 205.30% 165.66% 122.19% 90.42% 97.89% $ 8,026 $ 5,724 $ 6,173 $ 8,351 $ 6,084 $ 5,173 32% 29% 29% 21% -1% 9% 24% 17% 39% 41% 38% -14% 40% 29% 29% 21% 18% 9% 9% 9% 8 EAGLEBANK ANNUAL REPORT 2015 9 Net charge-offs to average loans 0.17% 0.17% 0.23% 0.37% 0.32% 0.35% 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 June 14, 2013. 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 Computed by dividing noninterest expense by the sum of net interest income and noninterest income. 5 Not applicable to fiscal years prior to 2015. Balanced Loan and Deposit Growth Net Income Available to Common Shareholders for Years Ending Financial Data $6,000,000,000 $5,000,000,000 $4,000,000,000 $3,000,000,000 $2,000,000,000 $1,000,000,000 $0 Compound Annual Growth Rate – Total Loans: 24% Compound Annual Growth Rate – Total Deposits: 24% $100,000,000 Compound Annual Growth Rate: 40% $80,000,000 $60,000,000 $40,000,000 $20,000,000 $0 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 Asset Quality Total Shareholder Return Performance Total Loans ($) Non Performing Assets as % of Total Assets Net Charge-Offs as % of Average Loans $5,000,000,000 $4,000,000,000 $3,000,000,000 $2,000,000,000 $1,000,000,000 $0 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% l e u a V x e d n I Compound Annual Growth Rate EGBN Eagle Bancorp, Inc. 31% NASDAQ Composite Index 15% S&P 500 13% NASDAQ Bank Index 11% 400 350 300 250 200 150 100 50 0 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 10 EAGLEBANK ANNUAL REPORT 2015 11 A new name, a new alliance. Renaming the Patriot Center means much more than changing signage—it’s a sign of our commitment to the community. EagleBank Arena Last spring, in one of the most significant developments of 2015 for EagleBank, the Patriot Center officially became EagleBank Arena. But the significance goes far beyond simply changing the name of the well-known sports and entertainment venue on the campus of George Mason University in Fairfax, VA. The new name is a highly visible sign of something much deeper: a long-term strategic alliance between EagleBank and the university for the benefit of Mason students and, ultimately, the entire DC area. “This is about a relationship between two great institutions that have a stake in the community,” said Ángel Cabrera, president of Mason. “It brings together the largest public research university in Virginia and the largest community bank in the National Capital Region.” As part of this new partnership, EagleBank will be sponsoring a series of business leadership development programs, including bank executives speaking to Mason students, faculty, and alumni. EagleBank and Mason also set up an annual intern/apprentice program, enabling qualified students to get invaluable hands-on experience in daily banking operations. Perhaps even more important is the establishment of scholarships to help business students fund their Mason education. By expanding opportunities to pursue business studies, mentoring students along the way, and greatly enhancing the employability of graduates, EagleBank and Mason are joining forces to invest in a new generation of entrepreneurs and business leaders. That works to benefit not only individuals, but also our community’s future job growth and continuing prosperity. For the area’s leading community bank, that’s the name of the game. From left to right: EagleBank/Mason scholarship recipients Jacquelyn Spalding, Abigail Rubemeyer; Ron Paul of EagleBank; scholarship recipients Gregg Hoffman, Jason Wong, May Abou Ghazaleh 12 EAGLEBANK ANNUAL REPORT 2015 13 Moore Cadillac Customized service comes standard. It all started over lunch. Joe Moore, president of Moore Cadillac in Chantilly, VA, was talking with a friend about his frustration with some of the national lenders he’d been dealing with. The friend invited Moore to lunch with another friend: Bob Pincus, vice chairman of EagleBank. “We had a great meeting,” says Moore. “And EagleBank has been a very flexible and responsive partner ever since. I have felt like a valued client—professionally and personally.” Customer Profiles An automobile dealership’s debt requirements are quite different from those of other types of businesses, according to Moore. And, unlike other local banks he had spoken with, EagleBank did not need any secondary lenders to fund his loan. “EagleBank was willing to listen, in order to understand our unique needs and the underlying value of the firm,” he says. “They were able to measure our risk profile from a very customized standpoint.” “I have felt like a valued client— professionally and personally.” —Joe Moore III, President, Moore Cadillac Although Moore Cadillac has only been an EagleBank customer for a little more than a year, Moore can already say: “EagleBank has given me the confidence that I have a partner who will stand by me. Any bank can produce a term sheet, but are they invested in their clients?” he says. “EagleBank truly supports and encourages business growth and success.” Large enough to know how. Our success allows us to do bigger things for bigger customers—with the same first-name approach as when we started. PN Hoffman Real team players. PN Hoffman is a real estate development company operating in a world of complicated, multi-pronged deals and fast closings. When ventures don’t conform to conventional solutions, creativity and long-term relationships are what the company values most. And that’s where EagleBank comes in. PN Hoffman has been working with EagleBank for 10 years now, benefiting from the latter’s local expertise. The leadership at EagleBank works with and understands the retail and multifamily markets and real estate neighborhoods and industry in Washington, DC. And, as EagleBank has grown and earned “big bank” strength, it has stayed true to its community roots, making it a valuable business partner. Beyond its wealth of local resources, EagleBank’s accessible local leadership is what truly makes it PN Hoffman’s bank of choice. “Every one of their staff members, all the way up to the chairman, is accessible,” says Monty Hoffman, Founder/ CEO of PN Hoffman. “The professionals we work with at EagleBank are helpful and share a sense of vesting in solving problems. This is critical to our fast-paced environment, especially in the real estate industry, where timing is everything. I see EagleBank as a critical partner and for that I look forward to more deals together.” “ From leadership to the entire team, each EagleBank representative becomes a part of our team.” —Monty Hoffman, Founder/CEO, PN Hoffman 14 EAGLEBANK ANNUAL REPORT 2015 15 EyebrowSmall enough to know you. As a community bank, we believe in the power of putting relationships first for all our customers, large and small. Customer Profiles Foulger-Pratt A matter of trust. For more than 50 years, Foulger-Pratt has been a leader in developing mixed-use, transit-oriented projects throughout the DC area. In such a capital-intensive business, the company naturally maintains relationships with a number of financial institutions, including some of the biggest national banks. But Foulger-Pratt has also been an EagleBank customer since the Bank’s inception in 1998. Because EagleBank offers a responsive attitude and a personal touch no national bank can. “Flexibility is what sets EagleBank apart,” says Cameron Pratt, CEO of Foulger-Pratt. “We’ve done some good work with national banks, but they can be rigid. The people at EagleBank are creative—and they can make decisions quickly,” he says. “It’s the difference between dealing with a bureaucracy versus dealing with a person you know and trust,” Pratt adds. That person, in this case, would be Ron Paul, chairman and CEO of EagleBank. “I can call Ron anytime,” says Pratt, whether to talk business or just to catch up over lunch. “And hardly a week goes by that I don’t run into Ron at a community event of some kind,” Pratt says. Such encounters foster an awareness that both men and both companies are working together to build a stronger community. “Flexibility is what sets EagleBank apart.” —Cameron Pratt, CEO, Foulger-Pratt “EagleBank has confidence in us,” says Pratt, “and Foulger-Pratt has confidence in EagleBank. There’s a mutual trust.” That makes for a mutually beneficial business relationship. Criterion Systems, Inc. Understanding success. Northern Virginia is well known as the home of numerous federal government contractors. One of the fastest growing over the last several years is Criterion Systems, Inc., a 100 percent employee-owned IT services company based in Vienna, VA. “EagleBank reflected a solid understanding of federal government contracting.” —Promod Sharma, President & CEO, Criterion Systems, Inc. The company has been growing at such a rate, in fact, that by early 2015 it had outgrown its bank. Criterion needed a bigger bank with greater capabilities—but it also needed a bank with a deep understanding of federal government contracting. EagleBank’s phenomenal growth and locally focused expertise made it the perfect fit. “As a small business, you want a bank that is flexible and creative,” says Promod Sharma, president and CEO of Criterion Systems. “We came to EagleBank for a line of credit,” he says, “and in a year we have already doubled it. Not every bank would do that.” EagleBank’s growing financial strength is important to Criterion’s continuing growth. “EagleBank is there for us,” says Sharma. “Our partnership is allowing us to go after bigger and bigger contracts,” he explains. Beyond its flexibility and financial capabilities, Sharma says, “EagleBank reflected a solid understanding of federal government contracting. Plus, they have been very easy to work with, responsive to every request,” he adds. As a result, he says with a laugh, “We may not be a small business much longer.” 16 EAGLEBANK ANNUAL REPORT 2015 17 Kioko Logistics Small business is a big deal. In 2014, when Rosemary Kioko was setting up a trucking company with the help of her father, she sought a small- business loan from the big-name national bank they had dealt with for years. That bank said no. “‘Too risky,’” Kioko recalls hearing. Fortunately, the Maryland Women’s Business Center suggested that Kioko contact EagleBank, one of the DC area’s biggest supporters of Small Business Administration efforts to help small businesses thrive— especially minority- and woman-owned ones. “EagleBank was a lifesaver.” —Rosemary Kioko, CEO, Kioko Logistics From the first meeting with EagleBank, Kioko was impressed. “It was amazing,” she says. “They really do take the time to get to know you—where your company is now, where you want to go. Then they come up with ideas you didn’t even know were possible.” “With our national bank, we got no personal attention, no guidance,” says Kioko, now CEO of Kioko Logistics. “All we got was a big ‘No.’ EagleBank was a lifesaver. Without them, I don’t know if we could have made it.” Besides enjoying the first-name basis of her new banking relationship, Kioko likes that EagleBank appreciates the vital importance of small businesses to the community. “When a small business like ours grows, it enables us to hire more workers—people from our neighborhood, or from across town,” says Kioko. “The whole community benefits.” Somerset Development Company Making it happen. Customer Profiles Somerset Development Company came to EagleBank with Matt Leydig, senior vice president, EagleBank, in 2010. After working with Matt and building a relationship, they were certain the transition to EagleBank would be smooth. However, the community-bank mentality with big-bank capabilities quickly became a huge asset for Somerset. One particular opportunity for the development company soon demonstrated that EagleBank was the financial partner for them. The Portner Project, an effort to preserve affordable housing in the DC metro area, was a complicated deal—the loan was large and it was tricky. “EagleBank was flexible in looking at the form of collateral in our initial working capital loan for our company,” says Nancy L. Hooff, one of the two founding principals of Somerset. “They were willing and able to analyze and work through the unique complexities of the Portner Place loan,” says Bill Whitman, development partner at Somerset. “EagleBank has a greater willingness to consider unique particulars of our transaction.” —Bill Whitman, Development Partner, Somerset Development Company But it wasn’t just the Bank’s capacity to handle such a large-scale loan that sealed the deal. Somerset and EagleBank were able to problem solve together in order to create a specialized solution to make the project happen—something that would have been a lot harder to do with a national bank. “Having a bank as responsive as EagleBank was a huge advantage during the Portner process. If we needed to talk to someone, we had them on the phone immediately and they would always help us find answers,” says Bill. “It’s that kind of openness that makes them—and us—so successful.” From left to right: William Whitman, development partner; Nancy L. Hooff, founding principal; James D. Campbell, founding principal 18 EAGLEBANK ANNUAL REPORT 2015 19 Properties and Locations 20 EAGLEBANK ANNUAL REPORT 2015 21 It takes a team. Anyone in business knows: You’re only as good as your people. Our Employees EagleBank’s continuing growth, success, leadership, and community spirit speak volumes about the high quality—and inspiring qualities—of our team. Every day, our employees put the human face on our mantra of “Relationships first.” Whatever their individual roles and responsibilities, our employees bring the passion that solves problems, the expertise that engenders confidence, and the friendliness that earns smiles. And not just during business hours: Our employees are generous with their time and talents in support of a wide variety of charities and community organizations. The EagleBank team now numbers over 425—and growing, just like the bank they represent. They know that EagleBank is a thriving, rewarding, and meaningful place to work, full of opportunities for personal and professional growth. Thanks to our team, EagleBank is a place of which we can all be proud. 22 EAGLEBANK ANNUAL REPORT 2015 23 Leadership Corporate Information Board of Directors Executive Officers Ronald D. Paul * Chairman, President & Chief Executive Officer of Eagle Bancorp, Inc.; Chairman & Chief Executive Officer of EagleBank; President of Ronald D. Paul Companies 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.; Senior Executive Vice President & Chief Operating Officer of EagleBank Laurence E. Bensignor, Esquire Executive Vice President & General Counsel of Eagle Bancorp, Inc. and EagleBank Charles C. Brockett, CPA Executive Vice President & Director of Operations 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 Lindsey S. Rheaume Executive Vice President & Chief Commercial & Industrial Lending Officer of EagleBank Janice L. Williams, Esquire Executive Vice President & Chief Credit Officer of EagleBank Robert P. Pincus * Vice Chairman of Eagle Bancorp, Inc.; Vice Chairman of EagleBank Leslie M. Alperstein, Ph.D. * President & Chief Executive Officer of Washington Analysis, LLC Thomas E. Burdette ** Managing Partner of Burdette Smith and Bish, LLC Joann Kay DiMeglio ** Principal of JKD Management, LLC Dudley C. Dworken * Principal of Dworken Associates, LLC Steven L. Fanaroff ** Managing Director of Fanaroff & Steppa, LLC & Bedrock Asset Management Harvey M. Goodman * President & Chief Executive Officer of Goodman-Gable-Gould/Adjusters International Benson Klein, Esquire ** Principal of Ward & Klein, Chartered Bruce H. Lee ** President & Chief Executive Officer of Lee Development Group Norman R. Pozez * Chairman & Chief Executive Officer of Uniwest Companies Kathy A. Raffa, CPA ** Vice President & Partner of Raffa, PC Donald R. Rogers, Esquire * Principal of Shulman Rogers Gandal Pordy & Ecker, PA 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 * Chief Executive Officer of Newbridge-Turing, LLC *Director of EagleBank and Eagle Bancorp, Inc. **Director of EagleBank only Annual Meeting Bethesda Marriott Hotel 5151 Pooks Hill Road Bethesda, MD 20814 Thursday, May 12, 2016, 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 Vice President & Corporate Secretary Eagle Bancorp, Inc. 7830 Old Georgetown Road, Third Floor Bethesda, MD 20814 240.497.2041 jcornett@EagleBankCorp.com For more 2015 financial information about Eagle Bancorp, visit our Investor Relations page at www.EagleBankCorp.com. Corporate Offices 7830 Old Georgetown Road, Third Floor Bethesda, MD 20814 301.986.1800 Investor Relations Michael T. Flynn 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 Stock Exchange Listing Common shares of Eagle Bancorp are traded on the NASDAQ Capital Market under the symbol EGBN. Independent Registered Accounting Firm Transfer Agent and Registrar Computershare Trust Company, NA P.O. Box 30170 College Station, TX 77842-3170 1.877.282.1168 www.computershare.com Stegman & Company * 809 Glen Eagles Court Suite 200 Baltimore, MD 21286 *To be admitted as partners and employees of Dixon Hughes Goodman effective June 2016. 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 ©2016 Eagle Bancorp, Inc. 24 EAGLEBANK ANNUAL REPORT 2015 25 Virginia Ballston 4420 N. Fairfax Drive Arlington, VA 22203 571.319.4800 Chantilly 13986 Metrotech Drive Chantilly, VA 20151 703.378.0010 Dulles Town Center 45745 Nokes Boulevard Sterling, VA 20166 703.230.1515 Fairfax 11166 Fairfax Boulevard Fairfax, VA 22030 703.359.4100 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 8245 Boone Boulevard Tysons Corner, VA 22182 703.752.9360 Other Offices Commercial Deposit Services 2001 K Street, NW Suite 150 Washington, DC 20006 202.292.1630 Commercial Lending 7830 Old Georgetown Road Bethesda, MD 20814 240.497.2049 2001 K Street, NW Suite 150 Washington, DC 20006 202.292.1624 8245 Boone Boulevard Suite 820 Tysons Corner, VA 22182 703.277.2200 FHA Multifamily Lending 8245 Boone Boulevard Suite 820 Tysons Corner, VA 22182 703.277.2200 Residential Real Estate Lending 6010 Executive Boulevard Suite 300 Rockville, MD 20852 301.738.7200 12011 Sunset Hills Road Reston, VA 20190 571.447.5356 8245 Boone Boulevard Suite 820 Tysons Corner, VA 22182 703.277.2200 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 Maryland Bethesda 7815 Woodmont Avenue Bethesda, MD 20814 240.497.2044 Chevy Chase 5480 Wisconsin Avenue Chevy Chase, MD 20815 301.280.6800 Opens Spring 2016 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 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 3143 N Street, NW Washington, DC 20007 202.481.7025 Opens Summer 2016 K Street 2001 K Street, NW Washington, DC 20006 202.296.6886 McPherson Square 1425 K Street, NW Washington, DC 20005 202.408.8411 Branch Locations MD Rockville Potomac 270 MONTGOMERY COUNTY 95 LOUDOUN COUNTY Sterling Reston Chantilly RHQ Tysons Corner FAIRFAX COUNTY Merrifield Fairfax VA Number of Branches Virginia Maryland Washington, DC Total 9 7 5 21 HQ Corporate Headquarters RHQ Regional Headquarters 495 HQ Silver Spring Bethesda DC RHQ Rosslyn 66 ARLINGTON 395 ALEXANDRIA 495 295 26 EAGLEBANK ANNUAL REPORT 2015 27 Golf Tournament Mission Statement Our Mission We have a mission to be the most respected and profitable community bank. To do this, we put relationships first to the delight of our customers, employees and shareholders and relentlessly deliver the most compelling service and value. EagleBank Foundation 2015 Fight Against Breast Cancer Golf Classic Raises Over $380,000 Our Values Proceeds from the 11th Annual EagleBank Foundation Fight Against Breast Cancer Golf Classic, held on October 12, 2015, at the Woodmont Country Club, support research and outreach programs through partnerships with these local hospitals and organizations: The Breast Cancer Research Foundation The Children’s Inn at The National Institutes of Health Critters for the Cure Hope Connections for Cancer Support Lolly’s Locks Primary Care Coalition of Montgomery County Providence Hospital Shady Grove Adventist Hospital Suburban Hospital Washington Hospital Center Since the first golf tournament in 2005, the Foundation has raised over $2,500,000 for the benefit of local hospitals and organizations in their fight against breast cancer. These funds have enabled hospitals and other cancer-focused organizations in our community to continue research and provide support services—all dedicated to ending breast cancer. “Breast cancer is an issue that touches nearly everyone—we all know someone who has been affected by this disease,” says Don Rogers of Shulman Rogers, a director of EagleBank and the chairman of the EagleBank Foundation. “We are so grateful for the tremendous generosity of our sponsors, players, contributors and volunteers, who, year after year, have helped make this tournament such a success. Their participation has been crucial in assisting us in accomplishing our fundraising goals. By providing this much-needed funding for research at these well deserving local hospitals and for patient care and support, we are hopeful that our efforts will play a role in the prevention and a cure for breast cancer in our lifetime.” “Raising public awareness for breast cancer is so critical,” says EagleBank’s chairman and CEO Ron Paul. “As a local, business bank, it is extremely important to us to be good corporate citizens—it is part of our daily mission. Our golf tournament is one way we give back to our community. The generous donations of individuals and corporations for these past 11 years—and the passion and hard work of our Committee members and everyone else involved in organizing this tournament— have enabled us to raise substantial funds to help fight the devastating effects that breast cancer has on all who are touched by it. We are thankful to everyone for their continued support of our efforts to save more lives and help with the fight against this disease.” 28 F L E X I B L E - We begin our relationships based on our time-tested tradition of listening to our customer, collaborating with colleagues and designing a comprehensive, creative solution that brings value to and appreciation from our customer. We enhance the relationship with empowered, ‘Yes, We Can’ service and live up to our strong belief that formulas don’t make good banking sense, relationships do. Be entrepreneurial—it is our differentiator. I N V O L V E D - We build our relationship by developing a rapport that is based on partnership, mutual respect and a desire to delight. We are unwavering in our commitment to the goals and growth of our customers, colleagues and community through volunteerism. We believe that doing the little extras and staying involved with our customer demonstrates our difference. R E S P O N S I V E - We shape our relationships by taking ownership for being ever- responsive, from beginning to end, day in and day out. We understand that reliable, accurate and time-sensitive communication is fundamental to preserving reputation and relationships, internally and externally. S T R O N G - We strengthen our relationships each time we are called upon for our expertise and know-how. We are committed to enhancing our professional knowledge in order to remain credible, current and strong partners with our customers, colleagues and community. Our history of sustaining a well-capitalized and profitable position emphasizes our strength and reinforces our relationships. T R U S T E D - We uphold our relationships with honesty, openness and reliability. We can be counted on to do “the right thing.” We understand that underlying a sound, long-lasting relationship is the essential element of trust. Trust can be lost in a moment, so we are vigilant in our actions and words. EagleBankCorp.com 

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