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Eagle Bancorp Announces Quarterly Earnings and Declares Quarterly Cash Dividend

(October 22, 2009)

HELENA, Mont., Oct. 22, 2009 (GLOBE NEWSWIRE) -- Eagle Bancorp ("Eagle") (OTCBB:EBMT), the stock holding company of American Federal Savings Bank (the "Bank"), reported a first quarter net income of $844,000, or $.79 per share ($.69 per share diluted), for the three months ended September 30, 2009, and declared a cash dividend of $0.26 per share. Earnings for the quarter increased $944,000 from the $100,000 loss for the quarter ended September 30, 2008.

The change in net income for the first quarter was mainly attributable to the adjustment of $84,000 to reflect the increase in fair value of those securities pursuant to SFAS 159, the Fair Value Option for Financial Assets and Liabilities. Under SFAS 159, the Company, in the first quarter of 2008, recognized a loss of $1.24 million on Freddie Mac and Fannie Mae preferred stock. The Company continues to hold these securities, and as a result, adjustments in the fair value will occur in future periods.

The Company continued to achieve favorable results with respect to loan quality in its markets, but noted that mortgage loan refinance activity has recently declined.

"We are pleased to report that our asset quality remains strong. Deposit growth was very good this quarter, which allowed us to realize savings on interest expense. Mortgage loan volume has decreased, as the amount of refinance activity has dropped significantly. This will result in lower gains on sale of loans in future quarters. Our core earnings performance remains very strong, however. We are also excited to announce the opening of our second office in Bozeman this month," said CEO Pete Johnson.


Net interest income increased $147,000, or 6.57%, to $2.38 million for the quarter ended September 30, 2009 from $2.24 million for the quarter ended September 30, 2008. Noninterest income increased $1.565 million, which, as discussed above, was due to a recovery in value of Fannie Mae and Freddie Mac preferred stock versus last year's loss in value. Eagle's tax provision was $379,000 higher in the current quarter. Eagle's annualized return on assets was 1.14% and its annualized return on equity was 11.60% for the quarter, compared with negative 0.14% and negative 1.61%, respectively, for the same quarter in 2008.

Total interest and dividend income decreased $92,000 to $3.7 million for the quarter ended September 30, 2009 from $3.8 million for the quarter ended September 30, 2008. This was due to a decrease in interest and fees on loans of $129,000 offset by an increase in interest and dividends on securities available-for-sale of $41,000. Lower funding costs caused total interest expense to decrease by $239,000 to $1.34 million for the quarter ended September 30, 2009 from $1.58 million for the quarter ended September 30, 2008. Interest expense on deposits decreased $251,000 and interest expense on Federal Home Loan Bank advances and other borrowings increased $12,000.

Total assets increased by $10.97 million, or 3.79%, to $300.68 million at September 30, 2009 from $289.71 million at June 30, 2009. Loans receivable increased $988,000, or 0.6%, to $168.19 million from $167.20 million. Loans held-for-sale decreased $1.86 million to $3.49 million from $5.35 million. Deposits increased $7.88 million, or 4.21%, to $195.08 million at September 30, 2009 from $187.20 million at June 30, 2009. Advances from the Federal Home Loan Bank and other borrowings decreased $417,000, or 0.62%, to $66.64 million from $67.06 million, while federal fund purchases remained at zero. Total stockholders' equity increased $2.64 million or 9.48%, to $30.43 million at September 30, 2009 from $27.79 million at June 30, 2009, as a result of the net income for the period of $844,000, an increase in accumulated other comprehensive gain of $1.89 million (mainly due to an increase in net unrealized gain on securities available-for-sale), as well as dividends paid and purchases of treasury stock.

Eagle's Board of Directors declared a quarterly cash dividend of $0.26 per share for the first quarter of Eagle's fiscal year. The dividend is payable December 4, 2009 to shareholders of record at the close of business on November 13, 2009.

American Federal Savings Bank was formed in 1922 and is headquartered in Helena, Montana. It has additional branches in Butte, Bozeman and Townsend. Eagle's common stock trades on the OTC Bulletin Board under the symbol "EBMT." Eagle is a subsidiary of Eagle Financial MHC, a federal mutual holding company formed in 2000, which owns approximately 60% of Eagle Bancorp's outstanding common stock.

This release may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Eagle intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of these safe harbor provisions.

Financial highlights for Eagle Bancorp follow.

EAGLE BANCORP AND SUBSIDIARY (consolidated) (Dollars in Thousands) September 30, June 30, 2009 2009 (Unaudited) (Audited) ASSETS Cash and due from banks $ 3,687 $ 2,487 Interest-bearing deposits with banks 944 224 Federal funds sold 3,211 3,617 ------------- ------------- Total cash and cash equivalents 7,842 6,328 Securities available-for-sale,at market value 92,100 82,263 Securities held-to-maturity, at cost 265 375 Preferred stock - SFAS 159, at market value 108 25 Federal Home Loan Bank stock, at cost 2,000 2,000 Investment in Eagle Bancorp Statutory Trust I 155 155 Mortgage loans held-for-sale 3,494 5,349 Loans receivable, net of deferred loan fees and allowance for loan losses of $625 at September 30, 2009 and $525 at June 30, 2009 168,185 167,197 Accrued interest and dividends receivable 1,540 1,399 Mortgage servicing rights, net 2,315 2,208 Premises and equipment, net 15,371 13,761 Cash surrender value of life insurance 6,544 6,496 Real estate acquired in settlement of loans, net of allowance for losses 158 -- Other assets 603 2,153 ------------- ------------- Total assets $ 300,680 $ 289,709 ============= ============= LIABILITIES Deposit accounts: Noninterest bearing 18,902 14,247 Interest bearing 176,178 172,952 ------------- ------------- Total deposits 195,080 187,199 Accrued expenses and other liabilities 3,379 2,507 Federal funds purchased -- -- FHLB advances and other borrowings 66,639 67,056 Subordinated debentures 5,155 5,155 ------------- ------------- Total liabilities 270,253 261,917 EQUITY Preferred stock (no par value, 1,000,000 shares authorized, none issued or outstanding) -- -- Common stock (par value $0.01 per share; 9,000,000 shares authorized; 1,223,572 shares issued; 1,074,507 and 1,075,312 shares outstanding at September 30, 2009 and June 30, 2009, respectively) 12 12 Additional paid-in capital 4,589 4,564 Unallocated common stock held by employee stock ownership plan ("ESOP") (9) (18) Treasury stock, at cost (149,065 and 148,260 shares at September 30, 2009 and June 30, 2009, respectively) (5,056) (5,034) Retained earnings 29,583 28,850 Accumulated other comprehensive gain (loss) 1,308 (582) ------------- ------------- Total equity 30,427 27,792 Total liabilities and equity $ 300,680 $ 289,709 ============= ============= EAGLE BANCORP AND SUBSIDIARY Consolidated Statements of Income For the Three Months Ended September 30, 2009 and 2008 (Dollars in Thousands, Except for Per Share Data) Three Months Ended Sept. 30 (unaudited) Sept. 30 ------------------------------- 2009 2008 ---------- ---------- Interest and Dividend Income: Interest and fees on loans $ 2,708 $ 2,837 Securities available for sale 1,004 963 Securities held to maturity 4 5 Interest on deposits with banks 8 4 FHLB dividends 0 7 ---------- ---------- Total interest and dividend income 3,724 3,816 ---------- ---------- Interest Expense: Deposits 611 862 FHLB advances & other borrowings 655 643 Subordinated debentures 75 75 ---------- ---------- Total interest expense 1,341 1,580 ---------- ---------- Net Interest Income 2,383 2,236 Loan loss provision 135 0 ---------- ---------- Net interest income after loan loss provision 2,248 2,236 ---------- ---------- Noninterest income: Service charges on deposit accounts 195 190 Net gain on sale of loans 440 183 Mortgage loan servicing fees 185 140 Net gain (loss) on sale of available for sale securities 0 57 Net gain(loss) on preferred stock - SFAS 159 84 (1,239) Other 157 165 ---------- ---------- Total noninterest income 1,061 (504) ---------- ---------- Noninterest expense: Salaries and employee benefits 1,099 1,046 Occupancy expense 156 149 Furniture and equipment depreciation 63 67 In-house computer expense 88 73 Advertising 106 91 Amortization of mortgage servicing rights 126 71 Federal insurance premiums 65 7 Postage 38 33 Legal,accounting, and examination fees 75 48 Consulting fees 57 43 ATM processing 17 14 Other 213 207 ---------- ---------- Total noninterest expense 2,103 1,849 ---------- ---------- Income before provision for income taxes 1,206 (117) ---------- ---------- Provision for income taxes 362 (17) ---------- ---------- Net income $ 844 $ (100) ========== ========== Basic earnings per common share $ 0.79 $ (0.09) ========== ========== Diluted earnings per common share $ 0.69 $ (0.08) ========== ========== Weighted average shares outstanding (basic eps) 1,072,899 1,069,211 ========== ========== Weighted average shares outstanding (diluted eps) 1,221,658 1,217,058 ========== ==========

CONTACT: Eagle Bancorp Peter J. Johnson, President and Chief Executive Officer (406) 457-4006 Clint J. Morrison, Senior Vice President and CFO (406) 457-4007


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