What led the stock pressure: Eagle Bancorp, Inc. (NASDAQ: EGBN) stock slightly fell on January 17th pre market session as the company posted mixed result for the fourth quarter 2018. The company had reported the adjusted revenue growth of 35.9 percent to $81.71 million in the fourth quarter of FY 18, slightly missing the analysts’ estimates for revenue of $81.89 million. In 2017, for the fourth quarter and full year, operating earnings exclude one-time charges of $14.6 million ($0.42 per diluted common share), required as a result of the Tax Cuts and Jobs Act of 2017 (“Tax Reform”) enacted in late December 2017
Financials Preview: Eagle Bancorp, Inc. (the “Company”) (NASDAQ:EGBN), the parent company of EagleBank, today announced quarterly net income of $40.3 million for the three months ended December 31, 2018, a 159% increase on a net income basis (34% increase on an operating basis) over the $15.6 million net income ($30.2 million on an operating basis) for the three months ended December 31, 2017.
For the year ended December 31, 2018, the Company’s net income was $152.3 million, a 52% increase (33% increase on an operating basis) over the $100.2 million ($114.8 million on an operating basis) for the year ended December 31, 2017.
Moreover, the company experienced very strong average deposit growth which was invested at lower market interest rates, resulting in above average liquidity. This liquidity, which was invested at short term market rates, contributed to a decline in the net interest margin to 3.97% for the fourth quarter from 4.14% in the third quarter of 2018. Average deposit balances increased 7.2% for the fourth quarter 2018 over the third quarter 2018. The company attribute the significant average increase to seasonality, market conditions and the well developed customer relationships leading to success in gathering core deposits. Steady growth in loan balances continued, increasing 3.8% on average for the fourth quarter of 2018 over the third quarter of 2018. Period end to period end, loan balances increased 2.1%, for the fourth quarter 2018 while deposit balances increased a very strong 9.4%. The higher liquidity position in the fourth quarter resulted in an average loan to deposit ratio of 99% as compared to 102% for both the third quarter of 2018 and the fourth quarter of 2017. EGBN in the fourth quarter of FY 18 has reported the adjusted earnings per share of $1.17.