FOURTH QUARTER 2021 OF $41.6 MILLION OR $1.30 PER SHARE AND
FULL YEAR 2021 EARNINGS OF $176.7 MILLION OR $5.53 PER SHARE
BETHESDA, MD, Eagle Bancorp, Inc. (the “Company”) (NASDAQ: EGBN), the parent company of EagleBank (the “Bank”), today announced net income of $41.6 million for the fourth quarter of 2021, compared to net income of $38.9 million for the fourth quarter of 2020, a 7.0% increase. Net income per basic and diluted common share was $1.30 for the fourth quarter of 2021, compared to $1.21 for the fourth quarter of 2020.
The increase in earnings is largely due to the release of reserves from the allowance for credit losses and higher level of earning assets, and to a lesser degree from higher FHA fee income and a reduction in FDIC expenses. These improvements were partially offset by higher accruals for salary and benefits, lower gain on sale of loans and lower net interest income. Earnings for the fourth quarter of 2021 included a net reversal of $7.0 million from the allowance for credit losses on loans and the reserve for unfunded commitments, as compared to the fourth quarter of 2020, which included a net provision of $5.3 million.
Net income for the year ended December 31, 2021, was $176.7 million, compared to $132.2 million for the year ended December 31, 2020, a 33.6% increase. Net income per basic and diluted common share for the year ended December 31, 2021 was $5.53 and $5.52, respectively, compared to $4.09 for both basic and diluted common shares, for the year ended December 31, 2020.
Fourth Quarter 2021 Highlights
•Income Statement
◦Net income of $41.6 million
◦Net reversal of $7.0 million (which includes a reversal to the reserve for unfunded commitments of $632 thousand)
◦Net interest margin of 2.55%
◦Return on average assets ("ROAA") of 1.32%
◦Return on average common equity ("ROACE") of 12.30%
◦Return on average tangible common equity ("ROATCE") of 13.35%1
◦Efficiency ratio of 44.3%
1 A reconciliation between this non-GAAP financial measure and the nearest GAAP measure is provided in the tables that accompany this document.
1
•Balance Sheet
◦Total assets of $11.8 billion
◦Total loans (excluding loans held for sale) were $7.1 billion, up 3.1% from the prior quarter end
◦Loans (excluding PPP of $51.1 million) were $7.0 billion, up 3.4% from the prior quarter end2
◦Book value per share of $42.28, up 8.3% from a year ago
◦Tangible book value per share of $38.97, up 9.0% from a year ago3
◦Total risk based capital ratio of 16.15%
◦Annualized net charge-off ratio to average loans of 0.07%
◦Nonperforming assets ("NPAs") to total assets of 0.26%
◦Allowance for credit losses to total loans of 1.06%
•Other events
◦Announced a cash dividend of $0.40 per share
◦Repurchased a total of 13,175 in 2021 at an average price of $51.75 per share
CEO Commentary
Susan G. Riel, President and Chief Executive Officer of Eagle Bancorp, Inc. commented, "We ended the year strong with record full year earnings, meaningful loan growth during the fourth quarter and a level of asset quality and improving economic factors, that led to another reversal from the allowance for credit losses. Earnings for the year were $176.7 million or $5.52 per diluted share. Loans, on a linked quarter basis, were up $215 million or 3.1%. In regards to asset quality, NPAs were 0.26% of assets at quarter end and annualized net charge offs for the quarter were 0.07%."
"The loan growth during the quarter was encouraging, even as payoffs and paydowns remained high. We saw significant contributions from both our CRE and C&I teams, particularly in December. The largest net increase was in owner occupied CRE loans, followed by commercial loans and income producing CRE. Construction loans also increased, but was mostly offset by completed projects."
"Our other lending teams also did well. The FHA team ended the year strong with a fourth quarter that resulted in trade premiums, origination fees and mortgage servicing rights income of $2.5 million. The mortgage team also did well with locked loans in the fourth quarter of $163 million."
"With unfunded commitments of $2 billion at year end, as more opportunities arise, our total risk-based capital of 16.15%, gives us room to continue to grow the loan portfolio."
Ms. Riel continued, "We continue to be a leader among our peers with an efficiency ratio of 44.3%, a key component of which, is our branch light strategy. This year we closed three branches, all of which had expiring leases and clients who can be served from other northern Virginia branches and through digital channels. The most recent closure was of our Reston location in December, reducing our branch count to 17 and raising our average deposits per branch to $587 million.
2 A reconciliation between this non-GAAP financial measure and the nearest GAAP measure is provided in the table under the subsection, “Total Loans.”
3 A reconciliation between this non-GAAP financial measure and the nearest GAAP measure is provided in the tables that accompany this document.
2
"For our shareholders, we remain focused on increasing value and returning cash through dividends and share repurchases. At the end of the quarter, our board declared a dividend of $0.40 per share, bringing our total dividends for the year to $1.40 per share, or $38.9 million. Additionally, in December, our board approved the adoption of a new share repurchase program for 2022."
"We once again thank all of our employees for their commitment in serving the needs of our clients and communities. Additionally, we remain committed to a culture of respect, diversity and inclusion in both the workplace and the communities we serve."
Income Statement
•Net interest income was $78.2 million for the fourth quarter of 2021, down from $81.4 million for the fourth quarter of 2020. The decline in net interest income was driven by the decline in loans (versus the same period in the prior year) and a lower rate environment, partially offset by a 12.04% increase in average earning assets.
Net interest income was $324.5 million for the year ended December 31, 2021, up from $321.6 million for the year ended December 31, 2020.
•Net interest margin was 2.55% for the fourth quarter of 2021, as compared to 2.98% for the fourth quarter of 2020. The decrease in margin from a year ago primarily reflects a lower rate environment as well as significantly higher cash balances from strong deposit inflows which led to higher average earning assets. In the fourth quarter of 2021, a concerted effort was made to deploy more cash into the investment portfolio (as discussed in the Balance Sheet section).
Net interest margin was 2.81% for the year ended December 31, 2021, as compared to 3.19% for the year ended December 31, 2020.
(Dollars in thousands)
Three Months Ended December 31,
Year Ended December 31,
2021
2020
2021
2020
Net interest margin, adjusted:
Net interest income (GAAP)
$
78,186
$
81,417
$
324,514
$
321,562
Less: PPP accelerated net deferred fees and costs from sale (non-GAAP)
—
—
(4,667)
—
Add: Accelerated interest expense on redemption of sub-debt (non-GAAP)
—
—
1,313
—
Adjusted net interest income (non-GAAP)
$
78,186
$
81,417
$
321,160
$
321,562
Average interest earning assets (GAAP)
$
12,180,872
$
10,872,259
$
11,516,495
$
10,872,239
Net interest margin (GAAP)
2.55
%
2.98
%
2.81
%
3.19
%
Adjusted Net interest margin (non-GAAP)
2.55
%
2.98
%
2.79
%
3.19
%
•Adjusted pre-provision net revenue ("Adjusted PPNR"),4 a non-GAAP measure, was $49.5 million for the fourth quarter of 2021, compared to $56.3 million the fourth quarter of 2020. As a percent of average assets, adjusted PPNR for the fourth quarter of 2021 was 1.56%, down from 2.01% for the fourth quarter of 2020. This decline in Adjusted PPNR to average assets was primarily a result of higher noninterest expenses and higher average assets.
4 A reconciliation between this non-GAAP financial measure and the nearest GAAP measure is provided in the table below.
3
Adjusted pre-provision net revenue was $212.4 million for the year ended December 31, 2021, compared to $223.1 million for the year ended December 31, 2020.
(Dollars in thousands)
Three Months Ended December 31,
Year Ended December 31,
2021
2020
2021
2020
Adjusted net interest income (non-GAAP)
$
78,186
$
81,417
$
321,160
$
321,562
Noninterest income (GAAP)
10,574
9,887
40,385
45,696
Noninterest expense (GAAP)
(39,309)
(35,008)
(149,165)
(144,162)
Adjusted PPNR (non-GAAP)
$
49,451
$
56,296
$
212,380
$
223,096
Average Assets (GAAP)
$
12,538,597
$
11,141,826
$
11,836,735
$
10,349,963
Adjusted PPNR to Average Assets (non-GAAP)
1.56
%
2.01
%
1.79
%
2.16
%
•Provision for credit losses on loans was a reversal of $6.4 million for the fourth quarter of 2021, compared to a provision of $4.9 million for the fourth quarter of 2020. The reversal was primarily driven by improvements in the economic environment and related adjustments to the quantitative components of the CECL model, as well as, improvements in asset quality.
Provision for credit losses was a reversal of $20.8 million for the year ended December 31, 2021, as compared to a provision of $45.6 million for the year ended December 31, 2020.
•Provision for unfunded commitments was a reversal of $632 thousand for the fourth quarter of 2021, compared to a provision of $406 thousand for the fourth quarter of 2020. The reversal was primarily driven by the funding of available credit, reducing unfunded commitments in the fourth quarter of 2021.
Provision for unfunded commitments was a reversal of $1.1 million for the year ended December 31, 2021, compared to a provision of $1.4 million for the year ended December 31, 2020.
•Noninterest income was $10.6 million for the fourth quarter of 2021, as compared to $9.9 million for the fourth quarter 2020, a 6.9% increase. The increase was driven by FHA multi-family income associated with trade premiums, origination fees and mortgage servicing rights of $2.5 million and gains on sale of investment securities of $906 thousand, which more than offset the lower gain on sale of loans. Residential mortgage loan locked commitments were $163.0 million for the fourth quarter of 2021, compared to $427.5 million for the fourth quarter of 2020.
Noninterest income was $40.4 million for the year ended December 31, 2021, compared to $45.7 million for the year ended December 31, 2020.
•Noninterest expenses were $39.3 million for the fourth quarter 2021 compared to $35.0 million for the fourth quarter of 2020. The major changes between the fourth quarter of 2021 and the fourth quarter of 2020 were as follows:
◦Salaries and employee benefits were $24.6 million, up $4.5 million, as a result of higher incentive bonus accruals based on the Company performance and increases in share based compensation.
◦FDIC insurance expenses were $311 thousand, down $2.1 million. In the fourth quarter of 2021, with assets remaining over $10 billion for four consecutive quarters, the bank
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qualified as a large institution resulting in a lower FDIC assessment. Our assessments under the large bank methodology are about one-third of small bank methodology.
◦Legal, accounting and professional fees were $3.0 million, up $645 thousand.
Noninterest expenses were $149.2 million for the year ended December 31, 2021, compared to $144.2 million for the year ended December 31, 2020.
•Efficiency ratio5 was 44.3% for the fourth quarter of 2021 compared to 38.3% for the fourth quarter of 2020. The efficiency ratio increase was driven by lower net interest income and higher noninterest expenses (see Noninterest Expense section) in the fourth quarter of 2021 in comparison to the fourth quarter of 2020.
The efficiency ratio was 40.9% for the year ended December 31, 2021, compared to 39.3% for the year ended December 31, 2020.
•Effective income tax rate for the fourth quarter ended 2021 was 26.3%, compared to 23.7% in the fourth quarter of 2020. This change is the result of the provision to tax return true-up process which took place in the fourth quarter each year.
Effective income tax rate for the year ended December 31, 2021 and 2020 was 25.7% and 24.9%, respectively.
Balance Sheet
•Total assets at December 31, 2021 were $11.8 billion, up 6.6% from a year ago. The increase in assets from a year ago was primarily driven by increases to cash and investments as a result of large deposit inflows in the third and fourth quarters of 2021.
•Investment portfolio had a balance of $2.6 billion at December 31, 2021, up 128% from a year ago. More than half of the increase came in the fourth quarter of 2021 as investments increased by $836.7 million over the third quarter of 2021. Investments made during the fourth quarter of 2021 were primarily agency mortgage backed securities and agency bonds.
•Total loans (excluding loans held for sale) were $7.1 billion as of December 31, 2021, a decrease of 9.0% from a year ago. A portion of the decrease was driven by PPP loan forgiveness and, in the second quarter of 2021, the sale of PPP loans. Excluding PPP loans, loans were $7.0 billion at December 31, 2021, a decrease of 4.0% from the prior year-end.6
(Dollars in thousands)
December 31, 2021
September 30, 2021
June 30, 2021
December 31, 2020
Total loans, excluding loans held for sale (GAAP)
$
7,065,598
$
6,850,863
$
7,259,558
$
7,760,212
Less: PPP loans (non-GAAP)
(51,105)
(67,311)
(238,041)
(454,771)
Total loans, excluding loans held for sale and PPP loans (non-GAAP)
$
7,014,493
$
6,783,552
$
7,021,517
$
7,305,441
5 Noninterest expense divided by the sum of net interest income and noninterest income.
6 A reconciliation between these non-GAAP financial measures and the nearest GAAP measures is provided in the table below.
5
On a linked quarter basis, total loans (excluding loans held for sale and PPP loans) at December 31, 2021, increased by $230.9 million, or 3.4%, from the prior quarter end as originations and advances exceeded payoffs and paydowns7.
The yield on the loan portfolio was 4.45% for the fourth quarter of 2021 as compared to 4.50% for the fourth quarter of 2020. The adjusted loan yield, which excludes PPP, was 4.46% for the fourth quarter of 2020, down from 4.62%, for the fourth quarter of 2020 as higher yielding loans repriced, paid-off or paid-down, and the yield on recent originations and advances reflect current market rates.8
The yield on the loan portfolio was 4.62% for the year ended December 31, 2021 as compared to 4.66% for the year ended December 31, 2020.
Three Months Ended December 31,
(Dollars in thousands)
2021
2020
Average Balance
Interest
Average Yield/Rate
Average Balance
Interest
Average Yield/Rate
Loan Yields, Adjusted
Loan yield (GAAP)
$
6,890,414
$
77,283
4.45
%
$
7,896,324
$
89,356
4.50
%
Less: PPP interest income (non-GAAP)9
(56,298)
(430)
3.03
%
(456,415)
(2,931)
2.55
%
Adjusted loan yield (non-GAAP)
$
6,834,116
$
76,853
4.46
%
$
7,439,909
$
86,425
4.62
%
Year Ended December 31,
(Dollars in thousands)
2021
2020
Average Balance
Interest
Average Yield/Rate
Average Balance
Interest
Average Yield/Rate
Loan Yields, Adjusted
Loan yield (GAAP)
$
7,260,886
$
335,471
4.62
%
$
7,868,523
$
366,729
4.66
%
Less: PPP interest income (non-GAAP)9
(280,563)
(17,004)
6.06
%
(311,323)
(8,076)
2.59
%
Adjusted loan yield (non-GAAP)
$
6,980,323
$
318,467
4.56
%
$
7,557,200
$
358,653
4.75
%
•Allowance for credit losses was 1.06% of total loans at December 31, 2021, and 1.41% a year ago. Adjusted to exclude PPP loans, which are fully government guaranteed, the allowance for credit losses was 1.07%, compared to 1.50% a year ago.10 The reduction in the allowance for credit losses as a percent of total loans for the year ended December 31, 2021 is due to a provision reversal of $20.8 million and net charge-offs of $13.3 million, which had a greater impact on the ratio than the decline in loans.
Net charge-offs for the fourth quarter of 2021 were $1.2 million as compared to $5.5 million for fourth quarter of 2020. On an annualized basis, this was 0.07% of average loans (excluding loans held for sale) for the fourth quarter of 2021, as compared to 0.28% for the fourth quarter of 2020.
Net charge-offs for 2021 were $13.3 million, which represented 0.18% of average loans, and for 2020 were $20.1 million, which represented 0.26% of average loans.
7 A reconciliation between these non-GAAP financial measures and the nearest GAAP measures is provided in the table above.
8 A reconciliation between these non-GAAP financial measures and the nearest GAAP measures is provided in the table below.
9 Includes interest on PPP loans, accelerated net deferred fees and costs from PPP loan sale and accelerated interest income from forgiveness of PPP loans.
10 A reconciliation between these non-GAAP financial measures and the nearest GAAP measures is provided in the table below.
6
(Dollars in thousands)
December 31, 2021
September 30, 2021
December 31, 2020
Allowance for credit losses, adjusted
Allowance for credit losses (GAAP)
$
74,965
$
82,906
$
109,579
Total loans, excluding loans held for sale (GAAP)
$
7,065,598
$
6,850,863
$
7,760,212
Less: PPP loans (non-GAAP)
(51,105)
(67,311)
(454,771)
Total loans excluding PPP loans (non-GAAP)
$
7,014,493
$
6,783,552
7,305,441
Allowance for credit losses to total loans (GAAP)
1.06
%
1.21
%
1.41
%
Allowance for credit losses to total loans excluding PPP loans (non-GAAP)
1.07
%
1.22
%
1.50
%
•Total deposits were $10.0 billion at December 31, 2021, up 8.6% from a year ago. Most of the increase was in the second half of the year.
While deposits are up significantly, the deposit mix and cost of funds remains favorable.
◦Average noninterest bearing deposits to average total deposits was 36.3% for the fourth quarter of 2021, as compared to 32.7% for the fourth quarter of 2020.
◦The cost of funds was 0.26% in the fourth quarter of 2021, as compared to 0.48% in the fourth quarter of 2020. A portion of the favorable decline is attributable to the redemption of $150 million of subordinated debt with a 5% rate on August 2, 2021.
•Total shareholders’ equity was $1.35 billion at December 31, 2021, up 8.9% from a year ago. For the year ended December 31, 2021, increases in shareholders' equity from earnings were partially offset by common dividends declared of $38.9 million and stock repurchases of $682 thousand.
◦Book value per share was $42.28, up 8.3% from a year ago.
◦Tangible book value per share was $38.9711, up 9.0% from a year ago.
•Capital ratios for the Company remain strong and substantially in excess of regulatory minimum requirements. Regulatory ratios based on risk-based capital ratios continue to remain high, supported by earnings. Capital ratios did experience some decline in the fourth quarter of 2021 as non-risk weighted cash was moved into risk-weighted securities and loans.
11 A reconciliation of non-GAAP financial measures to the nearest non-GAAP measure is provided in the tables that accompany this document.
7
For the Company
December 31, 2021
September 30, 2021
December 31, 2020
Well Capitalized Minimum
Regulatory Ratios
Total Capital (to risk weighted assets)
16.15
%
16.59
%
17.04
%
10.00
%
Tier 1 Capital (to risk weighted assets)
15.02
%
15.33
%
13.49
%
8.00
%
Common Equity Tier 1 (to risk weighted assets)
15.02
%
15.33
%
13.49
%
6.50
%
Tier 1 Capital (to average assets)
10.19
%
10.58
%
10.31
%
5.00
%
Common Capital Ratios
Common Equity Ratio
11.40
%
11.49
%
11.16
%
—
%
Tangible Common Equity Ratio
10.60
%
10.68
%
10.31
%
—
%
Additional Commentary
•Cost savings initiatives: The Bank continues to pursue its "branch light" strategy to improve efficiency while putting more emphasis on relationships and technology. After continued analysis of our branch structure, the Bank closed its Reston Branch in December 2021, as its lease is set to expire shortly. The annual cost savings in rent, common area maintenance and taxes is about $287 thousand.
•Paycheck protection program: At December 31, 2021, the Bank had an outstanding balance of PPP loans of $51.1 million, down from $67.3 million at the prior quarter end. The remaining PPP loans were mostly originated in mid-2020.
•COVID-19 and watch-rated loans: Beginning in the third quarter of 2020, all loans that received a second COVID-19 deferral or payment modification were downgraded to a watch-rating if not already rated as such. This was done to raise the visibility of these loans within the loan portfolio. After these COVID-19 deferred or modified loans demonstrate six months of payments and sustained performance, they may be considered for removal as a watch-rated loan. Watch-rated loans at December 31, 2021 were $351 million (down from $509 million the prior quarter-end), of which $261 million (down from $415 million the prior quarter end) were loans that received a COVID-19 deferral or payment modification (includes loans that were upgraded to watch-rated).
•Nonperforming loans and assets: Both nonperforming loans and assets decreased on a linked quarter basis and year over year.
◦Nonperforming loans were $29.2 million, or 0.41%, of total loans at December 31, 2021, down from $31.2 million, or 0.46%, at the prior quarter end, and down from $60.9 million, or 0.79%, of total loans a year ago.
◦Nonperforming assets were $30.8 million, or 0.26%, of total assets at December 31, 2021, down from $36.4 million, or 0.31%, at the prior quarter end, and down from $65.9 million, or 0.59%, of total assets a year ago. At December 31, 2021, other real estate owned ("OREO") was $1.6 million.
◦In November 2021, the bank sold one of its four OREO properties for a gain on $1.1 million. At December 31, 2021, the OREO properties had a carrying value of $1.6 million (comprising three properties), down from $5.1 million at the prior quarter end and down from $5.0 million a year ago.
8
•Dividend: On November 17, 2021, the Board of Directors declared a quarterly cash dividend of $0.40 per common share payable on January 31, 2022 to shareholders of record on January 19, 2022.
•Stock repurchase plan: The 2021 stock repurchase plan expired on December 31, 2021. Under this plan, the Company:
◦In the fourth quarter of 2021, repurchased 100 shares for $5,353 at an average cost of $53.53 per share.
◦In full-year 2021, repurchased 13,175 shares for $682,254 at an average cost of $51.78 per share.
In December 2021, the Board of Directors approved a new stock repurchase plan for 2022 of up to 1,600,000 shares, or approximately 5% of shares outstanding.
Additional financial information: The financial information that follows provides more detail on the Company’s financial performance for the three months and year ended December 31, 2021 as compared to the three months and year ended December 31, 2020, as well as eight quarters of trend data. Persons wishing additional information should refer to the Company’s annual report on Form 10-K for the year ended December 31, 2020, quarterly reports on Form 10-Q for the quarters ended March 31, 2021, June 30, 2021 and September 30, 2021 and other reports filed with the Securities and Exchange Commission (the “SEC”).
About Eagle Bancorp: The Company is the holding company for EagleBank, which commenced operations in 1998. The Bank is headquartered in Bethesda, Maryland, and operates through seventeen branch offices, located in Suburban Maryland, Washington, D.C. and Northern Virginia. The Company focuses on building relationships with businesses, professionals and individuals in its marketplace, and is committed to a culture of respect, diversity, equity and inclusion in both its workplace and the communities in which it operates.
Conference call: Eagle Bancorp will host a conference call to discuss its fourth quarter 2021 financial results on Thursday, January 20, 2022 at 10:00 a.m. eastern time. The public is invited to listen to this conference call by dialing 1.877.303.6220, conference ID Code: 7254649, or by accessing the call on the Company’s website, www.EagleBankCorp.com. A replay of the conference call will be available on the Company’s website through February 3, 2022.
Forward-looking statements: This press release contains forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended, including statements of goals, intentions, and expectations as to future trends, plans, events or results of Company operations and policies and regarding general economic conditions. In some cases, forward-looking statements can be identified by use of words such as “may,” “will,” “can,” “anticipates,” “believes,” “expects,” “plans,” “estimates,” “potential,” “continue,” “should,” “could,” “strive,” “feel” and similar words or phrases. These statements are based upon current and anticipated economic conditions, nationally and in the Company’s market (including the macroeconomic and other challenges and uncertainties resulting from the COVID-19 pandemic, including on our credit quality, asset and loan growth and broader business operations), interest rates and interest rate policy, competitive factors, and other conditions which by their nature, are not susceptible to accurate forecast and are subject to significant uncertainty. Because of these uncertainties and the assumptions on which this discussion and the forward-looking statements are based, actual future operations and results in the future may differ materially from those indicated herein. For details on factors that could affect these
9
expectations, see the risk factors and other cautionary language included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, the Company's Quarterly Report on Form 10-Q for the quarters ended March 31, 2021, June 30, 2021 and September 30, 2021, the Company's upcoming Quarterly Report on Form 10-K for the year ended December 31, 2021, and in other periodic and current reports filed with the SEC. Readers are cautioned against placing undue reliance on any such forward-looking statements. The Company’s past results are not necessarily indicative of future performance, and nothing contained herein is meant to or should be considered and treated as earnings guidance of future quarters’ performance projections. All information is as of the date of this press release. Any forward-looking statements made by or on behalf of the Company speak only as to the date they are made. Except to the extent required by applicable law or regulation, the Company undertakes no obligation to revise or update publicly any forward-looking statement for any reason.
10
Eagle Bancorp, Inc.
Consolidated Financial Highlights (Unaudited)
(Dollars in thousands, except per share data)
Three Months Ended December 31,
Year Ended December 31,
2021
2020
2021
2020
Income Statements:
Total interest income
$
86,230
$
94,680
$
364,496
$
389,986
Total interest expense
8,044
13,263
39,982
68,424
Net interest income
78,186
81,417
324,514
321,562
Provision for credit losses
(6,412)
4,917
(20,821)
45,571
Provision for Unfunded Commitments
(632)
406
(1,119)
1,380
Net interest income after provision for credit losses
85,230
76,094
346,454
274,611
Noninterest income (before investment gain)
9,668
9,722
37,421
43,881
Gain (loss) on sale of investment securities
906
165
2,964
1,815
Total noninterest income
10,574
9,887
40,385
45,696
Total noninterest expense
39,309
35,008
149,165
144,162
Income before income tax expense
56,495
50,973
237,674
176,145
Income tax expense
14,875
12,081
60,983
43,928
Net income
$
41,620
$
38,892
$
176,691
$
132,217
Per Share Data:
Earnings per weighted average common share, basic
$
1.30
$
1.21
$
5.53
$
4.09
Earnings per weighted average common share, diluted
$
1.30
$
1.21
$
5.52
$
4.09
Weighted average common shares outstanding, basic
31,950,320
32,037,099
31,935,824
32,334,201
Weighted average common shares outstanding, diluted
32,030,998
32,075,175
32,003,090
32,383,021
Actual shares outstanding at period end
31,950,092
31,779,663
31,950,092
31,779,663
Book value per common share at period end
$
42.28
$
39.05
$
42.28
$
39.05
Tangible book value per common share at period end (1)
$
38.97
$
35.74
$
38.97
$
35.74
Dividend per common share
$
0.40
$
0.22
$
1.40
$
0.88
Performance Ratios (annualized):
Return on average assets
1.32
%
1.39
%
1.49
%
1.28
%
Return on average common equity
12.30
%
12.53
%
13.54
%
10.98
%
Return on average tangible common equity
13.35
%
13.69
%
14.73
%
12.03
%
Net interest margin
2.55
%
2.98
%
2.81
%
3.19
%
Efficiency ratio (2)
44.29
%
38.34
%
40.88
%
39.25
%
Other Ratios:
Allowance for credit losses to total loans (3)
1.06
%
1.41
%
1.06
%
1.41
%
Allowance for credit losses to total nonperforming loans
256.66
%
179.80
%
256.66
%
179.80
%
Nonperforming loans to total loans (3)
0.41
%
0.79
%
0.41
%
0.79
%
Nonperforming assets to total assets
0.26
%
0.59
%
0.26
%
0.59
%
Net charge-offs (annualized) to average loans (3)
0.07
%
0.28
%
0.18
%
0.26
%
Common equity to total assets
11.40
%
11.16
%
11.40
%
11.16
%
Tier 1 capital (to average assets)
10.19
%
10.31
%
10.19
%
10.31
%
Total capital (to risk weighted assets)
16.15
%
17.04
%
16.15
%
17.04
%
Common equity tier 1 capital (to risk weighted assets)
15.02
%
13.48
%
15.02
%
13.48
%
Tangible common equity ratio (1)
10.60
%
10.31
%
10.60
%
10.31
%
11
(continued)
Three Months Ended December 31,
Year Ended December 31,
2021
2020
2021
2020
Loan Balances - Period End (in thousands):
Commercial and Industrial
$
1,354,317
$
1,437,433
$
1,354,317
$
1,437,433
PPP loans
$
51,105
$
454,771
$
51,105
$
454,771
Commercial real estate - income producing
$
3,385,299
$
3,687,000
$
3,385,299
$
3,687,000
Commercial real estate - owner occupied
$
1,087,776
$
997,694
$
1,087,776
$
997,694
1-4 Family mortgage
$
73,966
$
76,592
$
73,966
$
76,592
Construction - commercial and residential
$
896,319
$
873,261
$
896,319
$
873,261
Construction - C&I (owner occupied)
$
159,579
$
158,905
$
159,579
$
158,905
Home equity
$
55,811
$
73,167
$
55,811
$
73,167
Other consumer
$
1,428
$
1,389
$
1,428
$
1,389
Average Balances (in thousands):
Total assets
$
12,538,596
$
11,141,826
$
11,836,735
$
10,349,963
Total earning assets
$
12,180,872
$
10,872,259
$
11,516,495
$
10,080,239
Total loans
$
6,890,414
$
7,896,324
$
7,260,886
$
7,868,523
Total deposits
$
10,670,205
$
9,227,733
$
9,940,577
$
8,502,022
Total borrowings
$
402,393
$
596,307
$
489,857
$
569,446
Total shareholders’ equity
$
1,342,525
$
1,235,174
$
1,304,902
$
1,204,341
(1) Tangible common equity to tangible assets (the "tangible common equity ratio"), tangible book value per common share, and the annualized return on average tangible common equity are non-GAAP financial measures derived from GAAP based amounts. The Company calculates the tangible common equity ratio by excluding the balance of intangible assets from common shareholders' equity and dividing by tangible assets. The Company calculates tangible book value per common share by dividing tangible common equity by common shares outstanding, as compared to book value per common share, which the Company calculates by dividing common shareholders' equity by common shares outstanding. The Company calculates the annualized return on average tangible common equity ratio by dividing net income available to common shareholders by average tangible common equity which is calculated by excluding the average balance of intangible assets from the average common shareholders’ equity. The Company considers this information important to shareholders as tangible equity is a measure that is consistent with the calculation of capital for bank regulatory purposes, which excludes intangible assets from the calculation of risk based ratios and as such is useful for investors, regulators, management and others to evaluate capital adequacy and to compare against other financial institutions. The table below provides reconciliation of financial measures defined by GAAP with non-GAAP financial measures.
(2) Computed by dividing noninterest expense by the sum of net interest income and noninterest income. The efficiency ratio measures a bank’s overhead as a percentage of its revenue.
(3) Excludes loans held for sale.
12
GAAP Reconciliation (Unaudited)
(Dollars in thousands except per share data)
Three Months Ended December 31,
Year Ended December 31,
2021
2020
4
2021
2020
Common shareholders' equity
$
1,350,775
$
1,240,892
Less: Intangible assets
(105,793)
(105,114)
Tangible common equity
$
1,244,982
$
1,135,778
Book value per common share
$
42.28
$
39.05
Less: Intangible book value per common share
(3.31)
(3.31)
Tangible book value per common share
$
38.97
$
35.74
Total assets
$
11,847,310
$
11,117,802
Less: Intangible assets
(105,793)
(105,114)
Tangible assets
$
11,741,517
$
11,012,688
Tangible common equity ratio
10.60
%
10.31
%
Average common shareholders' equity
$
1,342,525
$
1,235,173
$
1,304,902
$
1,204,341
Less: Average intangible assets
(105,565)
(105,131)
(105,256)
(104,903)
Average tangible common equity
$
1,236,960
$
1,130,042
$
1,199,646
$
1,099,438
Net Income Available to Common Shareholders
$
41,620
$
38,892
$
176,691
$
132,217
Annualized Return on Average Tangible Common Equity
13.35
%
13.69
%
14.73
%
12.03
%
Net interest income (GAAP)
$
78,186
$
81,417
$
324,514
$
321,562
Less: PPP accelerated net deferred fees and costs from sale (non-GAAP)
—
—
(4,667)
—
Add: Accelerated interest expense on redemption of sub-debt (non-GAAP)
—
—
1,313
—
Adjusted net interest income (non-GAAP)
$
78,186
$
81,417
$
321,160
$
321,562
Noninterest income (GAAP)
$
10,574
$
9,887
$
40,385
$
45,696
Adjusted operating revenue (non-GAAP)
$
88,760
$
91,304
$
361,545
367,258
Noninterest expense (GAAP)
$
39,309
$
35,008
$
149,165
$
144,162
Adjusted efficiency ratio (non-GAAP)
44.29
%
38.34
%
41.26
%
39.25
%
13
Eagle Bancorp, Inc.
Consolidated Balance Sheets (Unaudited)
(Dollars in thousands, except per share data)
Assets
December 31, 2021
September 30, 2021
December 31, 2020
Cash and due from banks
$
12,886
$
8,806
$
8,435
Federal funds sold
20,391
38,934
28,200
Interest bearing deposits with banks and other short-term investments
1,680,945
2,452,744
1,752,420
Investment securities available for sale (amortized cost of $2,642,665, $1,789,416, and $1,129,057, and allowance for credit losses of $620, $256 and $167 as of December 31, 2021, September 30, 2021 and December 31, 2020, respectively
2,623,408
1,786,659
1,151,083
Federal Reserve and Federal Home Loan Bank stock
34,153
34,093
40,104
Loans held for sale
47,218
53,413
88,205
Loans
7,065,598
6,850,863
7,760,212
Less allowance for credit losses
(74,965)
(82,906)
(109,579)
Loans, net
6,990,633
6,767,957
7,650,633
Premises and equipment, net
14,557
15,293
13,553
Operating lease right-of-use assets
30,555
30,080
25,237
Deferred income taxes
43,174
44,733
38,571
Bank owned life insurance
108,789
108,158
76,729
Intangible assets, net
105,793
105,103
105,114
Other real estate owned
1,635
5,135
4,987
Other assets
133,173
134,209
134,531
Total Assets
$
11,847,310
$
11,585,317
$
11,117,802
Liabilities and Shareholders' Equity
Deposits:
Noninterest bearing demand
$
3,277,956
$
2,836,418
$
2,809,334
Interest bearing transaction
777,255
812,410
756,923
Savings and money market
5,197,247
5,268,157
4,645,186
Time, $100,000 or more
327,651
347,937
546,173
Other time
401,431
403,566
431,587
Total deposits
9,981,540
9,668,488
9,189,203
Customer repurchase agreements
23,918
29,401
26,726
Other short-term borrowings
300,000
300,000
300,000
Long-term borrowings
69,670
69,639
268,077
Operating lease liabilities
35,501
34,345
28,022
Reserve for unfunded commitments
4,379
5,011
5,498
Other liabilities
81,527
146,736
59,384
Total liabilities
10,496,535
10,253,620
9,876,910
Shareholders' Equity
Common stock, par value $.01 per share; shares authorized 100,000,000, shares issued and outstanding 31,950,092, 31,947,458, and 31,779,663 respectively
316
316
315
Additional paid in capital
434,640
432,479
427,016
Retained earnings
930,061
901,218
798,061
Accumulated other comprehensive income (loss)
(14,242)
(2,316)
15,500
Total Shareholders' Equity
1,350,775
1,331,697
1,240,892
Total Liabilities and Shareholders' Equity
$
11,847,310
$
11,585,317
$
11,117,802
14
Eagle Bancorp, Inc.
Consolidated Statements of Income (Unaudited)
(Dollars in thousands, except per share data)
Three Months Ended December 31,
Year Ended December 31,
Interest Income
2021
2020
2021
2020
Interest and fees on loans
$
77,625
$
89,875
$
337,749
$
368,854
Interest and dividends on investment securities
7,327
4,301
23,205
18,440
Interest on balances with other banks and short-term investments
1,272
497
3,511
2,601
Interest on federal funds sold
6
7
31
91
Total interest income
86,230
94,680
364,496
389,986
Interest Expense
Interest on deposits
6,484
9,511
27,772
53,566
Interest on customer repurchase agreements
17
36
51
293
Interest on other short-term borrowings
506
506
2,008
1,869
Interest on long-term borrowings
1,037
3,210
10,151
12,696
Total interest expense
8,044
13,263
39,982
68,424
Net Interest Income
78,186
81,417
324,514
321,562
Provision for Credit Losses
(6,412)
4,917
(20,821)
45,571
Provision for Unfunded Commitments
(632)
406
(1,119)
1,380
Net Interest Income After Provision For Credit Losses
85,230
76,094
346,454
274,611
Noninterest Income
Service charges on deposits
1,259
988
4,562
4,416
Gain on sale of loans
2,057
5,840
14,045
22,089
Gain on sale of investment securities
906
165
2,964
1,815
Increase in the cash surrender value of bank owned life insurance
630
416
2,059
2,071
Other income
5,722
2,478
16,755
15,305
Total noninterest income
10,574
9,887
40,385
45,696
Noninterest Expense
Salaries and employee benefits
24,608
20,151
88,398
74,440
Premises and equipment expenses
3,755
3,301
14,876
15,715
Marketing and advertising
1,286
1,161
4,165
4,278
Data processing
3,258
2,747
11,709
10,702
Legal, accounting and professional fees
2,987
2,342
11,510
16,406
FDIC insurance
311
2,385
5,897
7,941
Other expenses
3,104
2,921
12,610
14,680
Total noninterest expense
39,309
35,008
149,165
144,162
Income Before Income Tax Expense
56,495
50,973
237,674
176,145
Income Tax Expense
14,875
12,081
60,983
43,928
Net Income
$
41,620
$
38,892
$
176,691
$
132,217
Earnings Per Common Share
Basic
$
1.30
$
1.21
$
5.53
$
4.09
Diluted
$
1.30
$
1.21
$
5.52
$
4.08
15
Eagle Bancorp, Inc.
Consolidated Average Balances, Interest Yields And Rates (Unaudited)
(Dollars in thousands)
Three Months Ended December 31,
2021
2020
Average Balance
Interest
Average Yield/Rate
Average Balance
Interest
Average Yield/Rate
ASSETS
Interest earning assets:
Interest bearing deposits with other banks and other short-term investments
$
3,124,657
$
1,272
0.16
%
$
1,752,046
$
497
0.11
%
Loans held for sale (1)
46,647
342
2.93
%
70,945
520
2.93
%
Loans (1) (2)
6,890,414
77,283
4.45
%
7,896,324
89,355
4.50
%
Investment securities available for sale (2)
2,088,907
7,327
1.39
%
1,122,078
4,301
1.52
%
Federal funds sold
30,247
6
0.08
%
30,866
7
0.10
%
Total interest earning assets
12,180,872
86,230
2.81
%
10,872,259
94,680
3.46
%
Total noninterest earning assets
440,613
378,406
Less: allowance for credit losses
82,889
108,839
Total noninterest earning assets
357,724
269,567
TOTAL ASSETS
$
12,538,596
$
11,141,826
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
Interest bearing transaction
$
803,027
$
392
0.19
%
$
772,056
$
511
0.26
%
Savings and money market
5,257,520
3,688
0.28
%
4,443,676
4,652
0.42
%
Time deposits
735,254
2,404
1.30
%
998,872
4,347
1.73
%
Total interest bearing deposits
6,795,801
6,484
0.38
%
6,214,604
9,510
0.61
%
Customer repurchase agreements
32,730
17
0.21
%
28,259
36
0.51
%
Other short-term borrowings
300,003
506
0.67
%
300,003
506
0.66
%
Long-term borrowings
69,660
1,037
5.96
%
268,045
3,211
4.69
%
Total interest bearing liabilities
7,198,194
8,044
0.44
%
6,810,911
13,263
0.77
%
Noninterest bearing liabilities:
Noninterest bearing demand
3,874,405
3,013,129
Other liabilities
123,472
82,612
Total noninterest bearing liabilities
3,997,877
3,095,741
Shareholders’ equity
1,342,525
1,235,174
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
12,538,596
$
11,141,826
Net interest income
$
78,186
$
81,417
Net interest spread
2.37
%
2.69
%
Net interest margin
2.55
%
2.98
%
Cost of funds
0.26
%
0.48
%
(1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $4.3 million and $6.2 million for the three months ended December 31, 2021 and 2020, respectively.
(2) Interest and fees on loans and investments exclude tax equivalent adjustments.
16
Eagle Bancorp, Inc.
Consolidated Average Balances, Interest Yields And Rates (Unaudited)
(Dollars in thousands)
Year Ended December 31,
2021
2020
Average Balance
Interest
Average Yield/Rate
Average Balance
Interest
Average Yield/Rate
ASSETS
Interest earning assets:
Interest bearing deposits with other banks and other short-term investments
$
2,499,377
$
3,511
0.14
%
$
1,181,591
$
2,601
0.22
%
Loans held for sale (1)
71,043
2,278
3.21
%
67,361
2,125
3.15
%
Loans (1) (2)
7,260,886
335,471
4.62
%
7,868,523
366,729
4.66
%
Investment securities available for sale (2)
1,653,522
23,205
1.40
%
929,983
18,440
1.98
%
Federal funds sold
31,667
31
0.10
%
32,781
91
0.28
%
Total interest earning assets
11,516,495
364,496
3.16
%
10,080,239
389,986
3.87
%
Total noninterest earning assets
416,492
371,345
Less: allowance for credit losses
96,252
101,621
Total noninterest earning assets
320,240
269,724
TOTAL ASSETS
$
11,836,735
$
10,349,963
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
Interest bearing transaction
$
814,999
$
1,609
0.20
%
$
783,568
$
3,190
0.41
%
Savings and money market
4,947,198
15,000
0.30
%
3,925,413
26,271
0.67
%
Time deposits
803,718
11,163
1.39
%
1,149,185
24,105
2.10
%
Total interest bearing deposits
6,565,915
27,772
0.42
%
5,858,166
53,566
0.91
%
Customer repurchase agreements
24,884
51
0.20
%
29,345
293
1.00
%
Other short-term borrowings
300,003
2,008
0.67
%
280,126
1,870
0.66
%
Long-term borrowings
164,970
10,151
6.15
%
259,975
12,696
4.80
%
Total interest bearing liabilities
7,055,772
39,982
0.57
%
6,427,612
68,425
1.06
%
Noninterest bearing liabilities:
Noninterest bearing demand
3,374,662
2,643,856
Other liabilities
101,399
74,154
Total noninterest bearing liabilities
3,476,061
2,718,010
Shareholders’ equity
1,304,902
1,204,341
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
11,836,735
$
10,349,963
Net interest income
$
324,514
$
321,561
Net interest spread
2.59
%
2.81
%
Net interest margin
2.81
%
3.19
%
Cost of funds
0.35
%
0.68
%
(1) Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $30.6 million and $22.3 million for the years ended December 31, 2021 and 2020, respectively.
(2) Interest and fees on loans and investments exclude tax equivalent adjustments.
17
Statements of Income and Highlights Quarterly Trends (Unaudited)
(Dollars in thousands, except per share data)
Three Months Ended
December 31,
September 30,
June 30,
March 31,
December 31,
September 30,
June 30,
March 31,
Income Statements:
2021
2021
2021
2021
2020
2020
2020
2020
Total interest income
$
86,230
$
89,152
$
94,920
$
94,194
$
94,680
$
93,833
$
97,672
$
103,801
Total interest expense
8,044
10,107
10,288
11,543
13,262
14,795
16,309
24,057
Net interest income
78,186
79,045
84,632
82,651
81,418
79,038
81,363
79,744
Provision for credit losses
(6,412)
(8,203)
(3,856)
(2,350)
4,917
6,607
19,737
14,310
Provision for unfunded commitments
(632)
716
(761)
(442)
406
(2,078)
940
2,112
Net interest income after provision for credit losses
85,230
86,532
89,249
85,443
76,095
74,509
60,686
63,322
Noninterest income (before investment gain (loss))
9,668
6,780
10,607
10,366
9,722
17,729
11,782
4,648
Gain on sale of investment securities
906
1,519
318
221
165
115
713
822
Total noninterest income
10,574
8,299
10,925
10,587
9,887
17,844
12,495
5,470
Salaries and employee benefits
24,608
22,145
19,876
21,769
20,151
19,388
17,104
17,797
Premises and equipment
3,755
3,859
3,644
3,618
3,301
5,125
3,468
3,821
Marketing and advertising
1,286
1,013
980
886
1,161
928
1,111
1,078
Other expenses
9,660
9,358
10,994
11,714
10,396
11,474
13,209
14,651
Total noninterest expense
39,309
36,375
35,494
37,987
35,009
36,915
34,892
37,347
Income before income tax expense
56,495
58,456
64,680
58,043
50,973
55,438
38,289
31,445
Income tax expense
14,875
14,847
16,687
14,574
12,081
14,092
9,433
8,322
Net income
41,620
43,609
47,993
43,469
38,892
41,346
28,856
23,123
Per Share Data:
Earnings per weighted average common share, basic
$
1.30
$
1.36
$
1.50
$
1.36
$
1.21
$
1.28
$
0.90
$
0.70
Earnings per weighted average common share, diluted
$
1.30
$
1.36
$
1.50
$
1.36
$
1.21
$
1.28
$
0.90
$
0.70
Weighted average common shares outstanding, basic
31,950
31,959
31,963
31,870
32,037
32,229
32,225
32,850
Weighted average common shares outstanding, diluted
32,031
32,031
32,025
31,923
32,075
32,251
32,241
32,876
Actual shares outstanding at period end
31,950,092
31,947,458
31,961,573
31,960,379
31,779,663
32,228,636
32,224,756
32,197,258
Book value per common share at period end
$
42.28
$
41.68
$
40.87
$
39.45
$
39.05
$
37.96
$
36.86
$
36.11
Tangible book value per common share at period end (1)
$
38.97
$
38.39
$
37.58
$
36.16
$
35.74
$
34.70
$
33.62
$
32.86
Dividend per common share
$
0.40
$
0.40
$
0.35
$
0.25
$
0.22
$
0.22
$
0.22
$
0.22
Performance Ratios (annualized):
Return on average assets
1.32
%
1.46
%
1.68
%
1.53
%
1.39
%
1.57
%
1.12
%
0.98
%
Return on average common equity
12.30
%
13.00
%
14.92
%
14.05
%
12.53
%
14.46
%
9.84
%
7.81
%
Return on average tangible common equity
13.35
%
14.11
%
16.25
%
15.33
%
13.69
%
15.93
%
10.80
%
8.56
%
Net interest margin
2.55
%
2.73
%
3.04
%
2.98
%
2.98
%
3.08
%
3.26
%
3.49
%
Efficiency ratio (2)
44.29
%
41.65
%
37.14
%
40.74
%
38.34
%
38.10
%
37.18
%
43.83
%
Other Ratios:
Allowance for credit losses to total loans (3)
1.06
%
1.21
%
1.28
%
1.36
%
1.41
%
1.40
%
1.36
%
1.23
%
Allowance for credit losses to total nonperforming loans
256.66
%
265.32
%
187.07
%
195.25
%
179.80
%
189.83
%
184.52
%
201.80
%
Nonperforming loans to total loans (3)
0.41
%
0.46
%
0.68
%
0.69
%
0.79
%
0.74
%
0.74
%
0.61
%
Nonperforming assets to total assets
0.26
%
0.31
%
0.50
%
0.51
%
0.59
%
0.62
%
0.69
%
0.56
%
Net charge-offs (annualized) to average loans (3)
0.07
%
0.08
%
0.30
%
0.27
%
0.28
%
0.26
%
0.36
%
0.12
%
Tier 1 capital (to average assets)
10.19
%
10.58
%
10.65
%
10.28
%
10.31
%
10.82
%
10.63
%
11.33
%
Total capital (to risk weighted assets)
16.15
%
16.59
%
17.98
%
17.86
%
17.04
%
16.72
%
16.26
%
15.44
%
Common equity tier 1 capital (to risk weighted assets)
15.02
%
15.33
%
14.67
%
14.42
%
13.49
%
13.19
%
12.80
%
12.14
%
Tangible common equity ratio (1)
10.60
%
10.68
%
11.07
%
10.48
%
10.31
%
11.18
%
11.17
%
10.70
%
Average Balances (in thousands):
Total assets
$
12,538,596
$
11,826,326
$
11,453,080
$
11,517,836
$
11,141,826
$
10,473,595
$
10,326,709
$
9,447,663
Total earning assets
$
12,180,872
$
11,486,280
$
11,152,933
$
11,236,440
$
10,872,259
$
10,205,939
$
10,056,500
$
9,176,174
Total loans
$
6,890,414
$
7,055,621
$
7,382,238
$
7,726,716
$
7,896,324
$
7,910,260
$
8,015,751
$
7,650,993
Total deposits
$
10,670,206
$
9,948,114
$
9,530,909
$
9,601,249
$
9,227,733
$
8,591,912
$
8,482,718
$
7,696,764
Total borrowings
$
402,393
$
448,697
$
536,926
$
573,750
$
596,307
$
596,472
$
598,463
$
485,948
Total shareholders’ equity
$
1,342,525
$
1,331,022
$
1,290,029
$
1,254,780
$
1,235,174
$
1,211,145
$
1,179,452
$
1,191,180
(1) Tangible common equity to tangible assets (the "tangible common equity ratio") and tangible book value per common share are non-GAAP financial measures derived from GAAP based amounts. The Company calculates the tangible common equity ratio by excluding the balance of intangible assets from common shareholders' equity and dividing by tangible assets. The Company calculates tangible book value per common share by dividing tangible common equity by common shares outstanding, as compared to book value per common share, which the Company calculates by dividing common shareholders' equity by common shares outstanding. The Company considers this information important to shareholders as tangible equity is a measure that is consistent with the calculation of capital for bank regulatory purposes, which excludes intangible assets from the calculation of risk based ratios and as such is useful for investors, regulators, management and others to evaluate capital adequacy and to compare against other financial institutions.
(2) Computed by dividing noninterest expense by the sum of net interest income and noninterest income.
