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Item 5. Market for Registrant’s Common Equity

2021-03-01 compared with 2020-03-02 · 62 added, 26 removed, 134 unchanged (40% of the section changed)

1 unchanged sentence

Market for Common Stock.

The Company’s common stock is listed for trading on the Nasdaq Capital Market under the symbol “EGBN.” Over the twelve month period ended December 31, 2019, the average daily trading volume amounted to approximately 236,138 shares, an increase from approximately 204,346 shares over the twelve month period ended December 31, 2018.

The Company’s common stock is listed for trading on the Nasdaq Capital Market under the symbol “EGBN.” Over the twelve month period ended December 31, 2020, the average daily trading volume amounted to approximately 166,811 shares, a decrease from approximately 236,138 shares over the twelve month period ended December 31, 2019.

No assurance can be given that a more active trading market will develop or can be maintained.

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In 1985, the Federal Reserve Board issued a policy statement on the payment of cash dividends by bank holding companies.

In the statement, the Federal Reserve Board expressed its view that a holding company experiencing earnings weaknesses should not pay cash dividends exceeding its net income, or which

could only be funded in ways that weaken the holding company’s financial health, such as by borrowing.

In the statement, the Federal Reserve Board expressed its view that a holding company experiencing earnings weaknesses should not pay cash dividends exceeding its net income, or which could only be funded in ways that weaken the holding company’s financial health, such as by borrowing.

As a depository institution, the deposits of which are insured by the FDIC, the Bank may not pay dividends or distribute any of its capital assets while it remains in default on any assessment due the FDIC.

The Bank currently is not in default under any of its obligations to the FDIC.

Table o f Contents

Issuer Repurchase of Common Stock.

Total Number of Shares

Maximum Number of

Purchased as Part

Shares that May Yet Be

Total Number of

Period Total Number of

Shares Purchased (3)(4)

Average Price Paid Per

Share Total Number of Shares

Purchased as Part

of Publicly Announced

Plan or Program Maximum Number of

Shares that May Yet Be

Purchased Under the

Shares Purchased (4)

Plan or Program

Plans or Programs (1) (2)

October 1-31, 2019

October 1-31, 2020 — n/a n/a 458,069

November 1-30, 2020 371,300 37.46 371,300 86,769

December 1-31, 2020 86,769 38.51 86,769 —

(1) In August 2019, the Company’s Board of Directors authorized the purchase of up to 1,715,547 shares of the Company’s common stock from the date of approval of the plan through December 31, 2019, subject to earlier termination by the Board of Directors (the “Repurchase Program”).

The Repurchase Program was announced by a press release dated August 9, 2019 and a Form 8-K filed on August 9, 2019.

Total 458,069 37.66 458,069 —

The program was announced by a press release dated August 9, 2019 and a Form 8-K filed on August 9, 2019.

On December 18, 2019, the Company’s Board of Directors extended and expanded the program, authorizing the purchase of up to an aggregate of 1,641,000 shares of the Company’s common stock (inclusive of shares remaining under the initial authorization), through December 31, 2020, subject to earlier termination by the Board of Directors (as extended, the “Repurchase Program”).

The extension of the program was announced by a press release dated December 18, 2019 and a Form 8-K filed on December 18, 2019.

Under the Repurchase Program, the Company may acquire its common stock in the open market or in privately negotiated transactions, including 10b5-1 plans.

The Repurchase Program may be modified, suspended or terminated by the Board of Directors at any time without notice.

No shares were purchased during the three months ended December 31, 2019 other than pursuant to the Repurchase Program.

(2) On December 18, 2019, the Company’s Board of Directors extended and expanded the Repurchase Program, authorizing the purchase of up to an aggregate of 1,641,000 shares of the Company’s common stock (inclusive of shares remaining under the initial authorization), through December 31, 2020, subject to earlier termination by the Board of Directors (the “Repurchase Program Extension”).

The Repurchase Program Extension was announced by a press release dated December 18, 2019 and a Form 8-K filed on December 18, 2019.

Under the Repurchase Program Extension, the Company may acquire its common stock in the open market or in privately negotiated transactions, including 10b5-1 plans.

The Repurchase Program Extension may be modified, suspended or terminated by the Board of Directors at any time without notice.

No shares were purchased during the three months ended December 31, 2019 under the Repurchase Program Extension.

We suspended our share repurchase program during the first quarter of 2020, but the suspension was lifted in the third quarter of 2020.

We did not repurchase any shares during the second and third quarters of 2020.

(2) On December 16, 2020, the Company's Board of Directors adopted a new share repurchase program to take effect starting January 1, 2021, after the expiration of the previous repurchase program on December 31, 2020.

The Board of Directors authorized the repurchase of 1,588,848 shares of common stock, or approximately 5% of the Company's outstanding shares of common stock, under the new repurchase program, which will expire on December 31, 2021, subject to earlier termination of the program by the Board of Directors.

The program was announced by a press release dated December 17, 2020 and a Form 8-K filed on December 17, 2020.

(3) Inclusive of shares remaining available for purchase under the “Repurchase Program”.

1 unchanged sentence

See Item 12 - Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters for “Securities Authorized for Issuance Under Equity Compensation Plans.”

Table o f Contents

Stock Price Performance.

3 unchanged sentences

stock markets.

Eagle Bancorp, Inc.

Period Ending

Index 12/31/2015 12/31/2016 12/31/2017 12/31/2018 12/31/2019 12/31/2020

Eagle Bancorp, Inc.

100.00 120.76 114.72 96.51 97.25 84.81

Nasdaq Composite Index 100.00 108.87 141.13 137.12 187.44 271.64

6 unchanged sentences

These non-GAAP financial measures are “tangible common equity,” “tangible book value per common share,” “efficiency ratio,” and “return on average common equity.” Management uses these non-GAAP measures in its analysis of our performance because it believes these measures are used as a measure of our performance by investors.

Table o f Contents

These disclosures should not be considered in isolation or as a substitute for results determined in accordance with GAAP, and are not necessarily comparable to non-GAAP performance measures which may be presented by other bank holding companies.

4 unchanged sentences

Balance Sheets - Period End

Securities $ 1,151,083 $ 843,363 $ 784,139 $ 589,268 $ 538,108

Loans held for sale 88,205 56,707 19,254 25,096 51,629

Loans 7,760,212 7,545,748 6,991,447 6,411,528 5,677,893

Allowance for credit losses 109,579 73,658 69,944 64,758 59,074

Intangible assets, net 105,114 104,739 105,766 107,212 107,419

Total assets 11,117,802 8,988,719 8,389,137 7,479,029 6,890,096

Deposits 9,189,203 7,224,391 6,974,285 5,853,984 5,716,114

Borrowings 568,077 498,667 247,709 618,466 285,390

Total liabilities 9,876,910 7,798,038 7,280,196 6,528,591 6,047,297

1 unchanged sentence

Tangible common equity (1)

Statements of Operations

1,135,778 1,085,942 1,003,175 843,226 735,380

Statements of Income

Interest income $ 389,986 $ 429,630 $ 393,286 $ 324,034 $ 285,805

5 unchanged sentences

Income tax expense (2)

43,928 53,848 51,932 85,504 61,395

Net income (2)

Preferred dividends

132,217 142,943 152,276 100,232 97,707

Cash dividends declared 28,330 22,332 — — —

Net income available to common shareholders (2)

132,217 142,943 152,276 100,232 97,707

Total Revenue (3)

435,682 349,744 339,579 313,259 285,449

Table o f Contents

Years Ended December 31,

2 unchanged sentences

Net income, basic (2)

$ 4.09 $ 4.18 $ 4.44 $ 2.94 $ 2.91

Net income, diluted (2)

4.09 4.18 4.42 2.92 2.86

Dividends declared 0.88 0.66 — — —

Book value (2)

39.05 35.82 32.25 27.80 24.77

Tangible book value (2) (4)

35.74 32.67 29.17 24.67 21.61

Common shares outstanding 31,779,663 33,241,496 34,387,919 34,185,163 34,023,850

3 unchanged sentences

Efficiency ratio (5)

39.25 % 39.99 % 37.31 % 37.84 % 40.29 %

Return on average assets (2)

1.28 % 1.61 % 1.91 % 1.41 % 1.52 %

Return on average common equity (2)

10.98 % 12.20 % 14.89 % 11.06 % 12.27 %

Return on average tangible common equity (2)

12.03 % 13.40 % 16.63 % 12.54 % 14.19 %

CET1 capital (to risk weighted assets) 13.49 % 12.87 % 12.49 % 11.23 % 10.80 %

14 unchanged sentences

(2) The reported figure for 2017 includes one-time charges to reduce the carrying value of net deferred tax assets by $14.6 million, required as a result of the reduction in corporate income tax rates to 21% in the 2017 Tax Act.

As the magnitude of the net deferred tax asset revaluation distorts the operational results of the Company, we present in the GAAP reconciliation below the effect of the net deferred tax asset revaluation during the year ended December 31, 2017.

We believe this information is important to enable shareholders and other interested parties to assess the core operational performance of the Company.

As the magnitude of the net deferred tax asset revaluation distorts the operational results of the Company, we present in the GAAP reconciliation below this table that show the effect of the net deferred tax asset revaluation during the year ended December 31, 2017.

We believe the information below is important to enable shareholders and other interested parties to assess the core operational performance of the Company.

(3) Total revenue calculated as net interest income plus noninterest income

1 unchanged sentence

(5) Computed by dividing noninterest expense by the sum of net interest income and noninterest income.

Non-GAAP Reconciliation

Years Ended December 31,

Table o f Contents

The following table details our Non-GAAP to GAAP reconciliation for the years 2016 through 2020.

Non-GAAP Reconciliation Years Ended December 31,

(dollars in thousands except per share data) 2020 2019 2018 2017 2016

5 unchanged sentences

Tangible book value per common share $ 35.74 $ 32.67 $ 29.17 $ 24.67 $ 21.61

Total assets $ 11,117,802 $ 8,988,719 $ 8,389,137 $ 7,479,029 $ 6,890,096

Intangible assets (105,114) (104,739) (105,766) (107,212) (107,419)

4 unchanged sentences

Average tangible common equity $ 1,099,438 $ 1,066,884 $ 915,836 $ 799,052 $ 689,193

Net Income $ 132,217 $ 142,943 $ 152,276 $ 100,232 $ 97,707

Average tangible common equity $ 1,099,438 $ 1,066,884 $ 915,836 $ 799,052 $ 689,193

Return on Average Tangible Common Equity 12.03 % 13.40 % 16.63 % 12.54 % 14.18 %

The below table shows 2017 without deferred tax asset revaluation.

Year Ended December 31, 2017 (1)

(dollars in thousands except per share data)

(dollars in thousands except per share data) GAAP Change Non-GAAP

Income Statements:

Income tax expense 85,504 (14,588) 70,916

Net income $ 100,232 (14,588) $ 114,820

Earnings Per Common Share

Basic $ 2.94 $ 0.43 $ 3.36

Diluted $ 2.92 $ 0.42 $ 3.35

Performance Ratios:

1 unchanged sentence

Return on average common equity 11.06 % 12.67 %

(1) Presented here only.

Not included in the Selected Financial Data table above.

Table o f Contents

As of December 31, 2017

GAAP Change Non-GAAP

Deferred income taxes 28,770 14,588 43,358

Total Assets $ 7,479,029 $ 14,588 $ 7,493,617

Shareholders’ Equity

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity