UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 WASHINGTON,
D.C. 20549
 
 FORM
10-Q
 
 x
                  QUARTERLY
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the quarterly period ended September 30,
2009
   ̈
                  TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the transition period from _____ to
_____.
 
 Commission
file number 0-29687
 
 Eagle
Bancorp
 (Exact
name of small business issuer as specified in its charter)
  United
      States
              81-0531318(State
      or other jurisdiction of incorporation or organization)
              (I.R.S.
      Employer Identification No.)
  1400
Prospect Avenue, Helena, MT 59601
 (Address
of principal executive offices)
  (406)
442-3080
 (Issuer's
telephone number)
  Website
address:www.americanfederalsavingsbank.com
 
 Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.     Yes xNo  ̈
 
 Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).   Yes
 ̈No  ̈
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.
 Large
      accelerated filer
               ̈
              Accelerated
      filer       ̈Non-accelerated
      filer
               ̈
              Smaller
      reporting company     x(Do
      not check if smallerreporting
      company)
 
 Indicate
by check mark whether the registrant is a shell company (defined in Rule 12b-2
of the Exchange Act).   Yes  ̈No x
 
 APPLICABLE
ONLY TO CORPORATE ISSUERS
  Indicate
the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
  Common
      stock, par value $0.01 per share
              1,074,507  shares
      outstanding
 As of
November 10, 2009
  
  EAGLE
BANCORP AND SUBSIDIARY
 
 TABLE OF
CONTENTS
 
 PAGEPART I.
                                                      
                                                      FINANCIAL
      INFORMATIONItem1.
                                                      Financial
      StatementsConsolidated
      Statements of Financial Condition as of September 30, 2009
                                                      
                                                      
                                                      1
      and 2(unaudited)
      and June 30, 2009Consolidated
      Statements of Income for the three months ended September
    30,
                                                      
                                                      
                                                      3
      and 42009
      and 2008 (unaudited)Consolidated
      Statements of Changes in Stockholders' Equity for the
three
                                                      
                                                      
                                                      5months
      ended September 30, 2009 and 2008 (unaudited)Consolidated
      Statements of Cash Flows for the three months ended
                                                      
                                                      
                                                      6
      and 7September
      30, 2009 and 2008 (unaudited)Notes
      to Consolidated Financial Statements
                                                      
                                                      
                                                      8
      to 15Item
      2.
                                                      Management's
      Discussion and Analysis of Financial Condition and Results of Operations
                                                      
                                                      
                                                      16
      to 19Item
      3.
                                                      Quantitative
      and Qualitative Disclosures About Market Risk
                                                      
                                                      
                                                      20Item
      4.
                                                      Controls
      and Procedures
                                                      
                                                      
                                                      21PART II.
                                                      OTHER INFORMATIONItem
      1.
                                                      Legal
      Proceedings
                                                      
                                                      
                                                      22Item
      1A.
                                                      
                                                      Risk
      FactorsItem
      2.
                                                      Unregistered
      Sales of Equity Securities and Use of Proceeds
                                                      
                                                      
                                                      22Item
      3.
                                                      Defaults
      Upon Senior Securities
                                                      
                                                      
                                                      22Item
      4.
                                                      Submission
      of Matters to a Vote of Security Holders
                                                      
                                                      
                                                      23Item
      5.
                                                      Other
      Information
                                                      
                                                      
                                                      23Item
      6.
                                                      Exhibits
                                                      
                                                      
                                                      23Signatures
                                                      
                                                      
                                                      
                                                      
                                                      24Exhibit
      31.1Exhibit
      31.2Exhibit
      32.1
  
  EAGLE
BANCORP AND SUBSIDIARY
 
 CONSOLIDATED
STATEMENTS OF FINANCIAL CONDITION
 (Dollars
in Thousands, Except for Per Share Data)
 
 September
      30,
                  
                  
                  June
      30,2009
                  
                  
                  2009(Unaudited)
                  
                  
                  (Audited)ASSETSCash
      and due from banks
                  
                  $
                  3,687
                  
                  
                  $
                  2,487Interest-bearing
      deposits with banks
                  
                  
                  944
                  
                  
                  
                  224Federal
      funds sold
                  
                  
                  3,211
                  
                  
                  
                  3,617Total
      cash and cash equivalents
                  
                  
                  7,842
                  
                  
                  
                  6,328Securities
      available-for-sale, at market value
                  
                  
                  92,100
                  
                  
                  
                  82,263Securities
      held-to-maturity, at cost
                  
                  
                  265
                  
                  
                  
                  375Preferred
      stock, at market value
                  
                  
                  108
                  
                  
                  
                  25Federal
      Home Loan Bank stock, at cost
                  
                  
                  2,000
                  
                  
                  
                  2,000Investment
      in Eagle Bancorp Statutory Trust I
                  
                  
                  155
                  
                  
                  
                  155Mortgage
      loans held-for-sale
                  
                  
                  3,494
                  
                  
                  
                  5,349Loans
      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
                  
                  
                  
                  167,197Accrued
      interest and dividends receivable
                  
                  
                  1,540
                  
                  
                  
                  1,399Mortgage
      servicing rights, net
                  
                  
                  2,315
                  
                  
                  
                  2,208Premises
      and equipment, net
                  
                  
                  15,371
                  
                  
                  
                  13,761Cash
      surrender value of life insurance
                  
                  
                  6,544
                  
                  
                  
                  6,496Real
      estate acquired in settlement of loans, net of allowance for
      losses
                  
                  
                  158
                  
                  
                  
                  -Other
      assets
                  
                  
                  603
                  
                  
                  
                  2,153Total
      assets
                  
                  $
                  300,680
                  
                  
                  $
                  289,709
 
 See
accompanying notes to consolidated financial statements.
  -
1-
  EAGLE
BANCORP AND SUBSIDIARY
 
 CONSOLIDATED
STATEMENTS OF FINANCIAL CONDITION (Continued)
 (Dollars
in Thousands, Except for Per Share Data)
  September
      30,
                      
                      
                      June
      30,2009
                      
                      
                      2009(Unaudited)
                      
                      
                      (Audited)LIABILITIESDeposit
      accounts:Noninterest
      bearing
                      
                      $
                      18,902
                      
                      
                      $
                      15,002Interest
      bearing
                      
                      
                      176,178
                      
                      
                      
                      172,197Total
      deposits
                      
                      
                      195,080
                      
                      
                      
                      187,199Accrued
      expenses and other liabilities
                      
                      
                      3,379
                      
                      
                      
                      2,507Federal
      funds purchased
                      
                      
                      -
                      
                      
                      
                      -FHLB
      advances and other borrowings
                      
                      
                      66,639
                      
                      
                      
                      67,056Subordinated
      debentures
                      
                      
                      5,155
                      
                      
                      
                      5,155Total
      liabilities
                      
                      
                      270,253
                      
                      
                      
                      261,917EQUITYPreferred
      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
                      
                      
                      
                      12Additional
      paid-in capital
                      
                      
                      4,589
                      
                      
                      
                      4,564Unallocated
      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
                      
                      
                      
                      28,850Accumulated
      other comprehensive gain (loss)
                      
                      
                      1,308
                      
                      
                      
                      (582
                      )Total
      equity
                      
                      
                      30,427
                      
                      
                      
                      27,792Total
      liabilities and equity
                      
                      $
                      300,680
                      
                      
                      $
                      289,709
 
 See
accompanying notes to consolidated financial statements.
  -
2-
  EAGLE
BANCORP AND SUBSIDIARY
 
 QUARTERLY
CONSOLIDATED STATEMENTS OF INCOME
 (Dollars
in Thousands, Except for Per Share Data)
 
 Three
      Months EndedSeptember 30,2009
                  
                  
                  2008(Unaudited)Interest
      and Dividend Income:Interest
      and fees on loans
                  
                  $
                  2,708
                  
                  
                  $
                  2,837Securities
      available for sale
                  
                  
                  1,004
                  
                  
                  
                  963Securities
      held to maturity
                  
                  
                  4
                  
                  
                  
                  5Interest
      on deposits with banks
                  
                  
                  8
                  
                  
                  
                  4FHLB
      dividends
                  
                  
                  -
                  
                  
                  
                  7Total
      interest and dividend income
                  
                  
                  3,724
                  
                  
                  
                  3,816Interest
      Expense:Deposits
                  
                  
                  611
                  
                  
                  
                  862FHLB
      advances & other borrowings
                  
                  
                  655
                  
                  
                  
                  643Subordinated
      debentures
                  
                  
                  75
                  
                  
                  
                  75Total
      interest expense
                  
                  
                  1,341
                  
                  
                  
                  1,580Net
      Interest Income
                  
                  
                  2,383
                  
                  
                  
                  2,236Loan
      loss provision
                  
                  
                  135
                  
                  
                  
                  -Net
      interest income after loan loss provision
                  
                  
                  2,248
                  
                  
                  
                  2,236Noninterest
      income:Service
      charges on deposit accounts
                  
                  
                  195
                  
                  
                  
                  190Net
      gain on sale of loans
                  
                  
                  440
                  
                  
                  
                  183Mortgage
      loan servicing fees
                  
                  
                  185
                  
                  
                  
                  140Net
      gain on sale of available for sale securities
                  
                  
                  -
                  
                  
                  
                  57Net
      gain (loss) on preferred stock
                  
                  
                  84
                  
                  
                  
                  (1,239
                  )Other
                  
                  
                  157
                  
                  
                  
                  165Total
      noninterest income
                  
                  
                  1,061
                  
                  
                  
                  (504
                  )
 
 See
accompanying notes to consolidated financial statements.
  -
3-
  EAGLE
BANCORP AND SUBSIDIARY
 
 QUARTERLY
CONSOLIDATED STATEMENTS OF INCOME (Continued)
 (Dollars
in Thousands, Except for Per Share Data)
 
 Three
      Months EndedSeptember 30,2009
                  
                  
                  2008(Unaudited)Noninterest
      expense:Salaries
      and employee benefits
                  
                  
                  1,099
                  
                  
                  
                  1,046Occupancy
      expense
                  
                  
                  156
                  
                  
                  
                  149Furniture
      and equipment depreciation
                  
                  
                  63
                  
                  
                  
                  67In-house
      computer expense
                  
                  
                  88
                  
                  
                  
                  73Advertising
                  
                  
                  106
                  
                  
                  
                  91Amortization
      of mortgage servicing rights
                  
                  
                  126
                  
                  
                  
                  71Federal
      insurance premiums
                  
                  
                  65
                  
                  
                  
                  7Postage
                  
                  
                  38
                  
                  
                  
                  33Legal,
      accounting, and examination fees
                  
                  
                  75
                  
                  
                  
                  48Consulting
      fees
                  
                  
                  57
                  
                  
                  
                  43ATM
      processing
                  
                  
                  17
                  
                  
                  
                  14Other
                  
                  
                  213
                  
                  
                  
                  207Total
      noninterest expense
                  
                  
                  2,103
                  
                  
                  
                  1,849Income
      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
                  
                  
                  
                  1,069,211Weighted
      average shares outstanding (diluted eps)
                  
                  
                  1,221,658
                  
                  
                  
                  1,217,058
 
 See
accompanying notes to consolidated financial statements.
  -
4-
 
 EAGLE
BANCORP AND SUBSIDIARY
 
 QUARTERLY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
 For the
Three Months Ended September 30, 2009 and 2008
 (Dollars
in Thousands, Except for Per Share Data)
  ACCUMULATEDADDITIONAL
                                                
                                                
                                                UNALLOCATED
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                OTHERPREFERRED
                                                
                                                
                                                COMMON
                                                
                                                
                                                PAID-IN
                                                
                                                
                                                ESOP
                                                
                                                
                                                TREASURY
                                                
                                                
                                                RETAINED
                                                
                                                
                                                COMPREHENSIVESTOCK
                                                
                                                
                                                STOCK
                                                
                                                
                                                CAPITAL
                                                
                                                
                                                SHARES
                                                
                                                
                                                STOCK
                                                
                                                
                                                EARNINGS
                                                
                                                
                                                INCOME(LOSS)
                                                
                                                
                                                TOTALBalance,
      June 30, 2008
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                12
                                                
                                                
                                                $
                                                4,487
                                                
                                                
                                                $
                                                (55
                                                )
                                                
                                                $
                                                (5,013
                                                )
                                                
                                                $
                                                27,025
                                                
                                                
                                                $
                                                (822
                                                )
                                                
                                                $
                                                25,634Net
      income
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                (100
                                                )
                                                
                                                
                                                -
                                                
                                                
                                                
                                                (100
                                                )Other
      comprehensive income
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                (1,134
                                                )
                                                
                                                
                                                (1,134
                                                )Total
      comprehensive income
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                (1,234
                                                )Dividends
      paid ($0.255 per share)
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                (109
                                                )
                                                
                                                
                                                
                                                
                                                
                                                
                                                (109
                                                )Treasury
      stock purchased (760 shares @ $27.00)
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                (21
                                                )
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                (21
                                                )FASB
      ASC 715 adjustment
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                (129
                                                )
                                                
                                                
                                                
                                                
                                                
                                                
                                                (129
                                                )ESOP
      shares allocated or committed to be released for allocation (1,150
      shares)
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                21
                                                
                                                
                                                
                                                9
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                30Balance,
      September 30, 2008
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                12
                                                
                                                
                                                $
                                                4,508
                                                
                                                
                                                $
                                                (46
                                                )
                                                
                                                $
                                                (5,034
                                                )
                                                
                                                $
                                                26,687
                                                
                                                
                                                $
                                                (1,956
                                                )
                                                
                                                $
                                                24,171Balance,
      June 30, 2009
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                12
                                                
                                                
                                                $
                                                4,564
                                                
                                                
                                                $
                                                (18
                                                )
                                                
                                                $
                                                (5,034
                                                )
                                                
                                                $
                                                28,850
                                                
                                                
                                                $
                                                (582
                                                )
                                                
                                                $
                                                27,792Net
      income
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                844
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                844Other
      comprehensive income
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                1,890
                                                
                                                
                                                
                                                1,890Total
      comprehensive income
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                2,734Dividends
      paid ($0.26 per share)
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                (111
                                                )
                                                
                                                
                                                
                                                
                                                
                                                
                                                (111
                                                )Treasury
      stock purchased (805 shares @ $28.25)
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                (22
                                                )
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                (22
                                                )ESOP
      shares allocated or committed to be released for allocation (1,150
      shares)
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                25
                                                
                                                
                                                
                                                9
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                34Balance,
      September 30, 2009
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                12
                                                
                                                
                                                $
                                                4,589
                                                
                                                
                                                $
                                                (9
                                                )
                                                
                                                $
                                                (5,056
                                                )
                                                
                                                $
                                                29,583
                                                
                                                
                                                $
                                                1,308
                                                
                                                
                                                $
                                                30,427
 
 See
accompanying notes to consolidated financial statements.
  -
5-
  EAGLE
BANCORP AND SUBSIDIARY
 
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 (Dollars
in Thousands, Except for Per Share Data)
 
 Three
      months endedSeptember
      30,2009
                  
                  
                  2008(Unaudited)CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      income
                  
                  $
                  844
                  
                  
                  $
                  (100
                  )Adjustments
      to reconcile net income to net cash from operating
    activitiesProvision
      for loan losses
                  
                  
                  135
                  
                  
                  
                  -Depreciation
                  
                  
                  122
                  
                  
                  
                  112Net
      amortization of marketable securities premium and
discounts
                  
                  
                  38
                  
                  
                  
                  50Amortization
      of capitalized mortgage servicing rights
                  
                  
                  126
                  
                  
                  
                  71Gain
      on sale of loans
                  
                  
                  (440
                  )
                  
                  
                  (183
                  )Net
      realized (gain) loss on sale of available-for-sale
    securities
                  
                  
                  -
                  
                  
                  
                  (57
                  )Increase
      in cash surrender value of life insurance
                  
                  
                  (48
                  )
                  
                  
                  (60
                  )Loss
      (Gain) investment securities, Preferred Stock
                  
                  
                  (84
                  )
                  
                  
                  1,239Change
      in assets and liabilities:(Increase)
      decrease in assets:Accrued
      interest and dividends receivable
                  
                  
                  (141
                  )
                  
                  
                  (67
                  )Loans
      held-for-sale
                  
                  
                  2,290
                  
                  
                  
                  280Other
      assets
                  
                  
                  1,556
                  
                  
                  
                  (552
                  )Increase
      (decrease) in liabilities:Accrued
      expenses and other liabilities
                  
                  
                  98
                  
                  
                  
                  1,038Net
      cash provided by operating activities
                  
                  
                  4,496
                  
                  
                  
                  1,771CASH
      FLOWS FROM INVESTING ACTIVITIES:Purchase
      of securities:Investment
      securities available-for-sale
                  
                  
                  (9,174
                  )
                  
                  
                  (8,152
                  )Proceeds
      from maturities, calls and principal payments:Investment
      securities held-to-maturity
                  
                  
                  110
                  
                  
                  
                  308Investment
      securities available-for-sale
                  
                  
                  2,003
                  
                  
                  
                  3,649FHLB
      Stock purchased
                  
                  
                  -
                  
                  
                  
                  (166
                  )Proceeds
      from sales of investment securities available-for-sale
                  
                  
                  -
                  
                  
                  
                  4,062Net
      increase in loan receivable, excludes transfers to real estate acquired in
      settlement of loans
                  
                  
                  (1,519
                  )
                  
                  
                  (5,057
                  )Purchase
      of property and equipment
                  
                  
                  (1,732
                  )
                  
                  
                  (1,128
                  )Net
      cash used in investing activities
                  
                  
                  (10,312
                  )
                  
                  
                  (6,484
                  )
 
 See
accompanying notes to consolidated financial statements.
  -
6-
  EAGLE
BANCORP AND SUBSIDIARY
 
 CONSOLIDATED
STATEMENTS OF CASH FLOWS (Continued)
 (Dollars
in Thousands, Except for Per Share Data)
 
 Three
      months endedSeptember
      30,2009
                          
                          
                          2008(Unaudited)CASH
      FLOWS FROM FINANCING ACTIVITIES:Net
      increase in checking and savings accounts
                          
                          $
                          7,880
                          
                          
                          $
                          4,244Net
      decrease in federal funds
                          
                          
                          -
                          
                          
                          
                          (3,000
                          )Payments
      on FHLB advances
                          
                          
                          (417
                          )
                          
                          
                          (5,917
                          )FHLB
      advances
                          
                          
                          -
                          
                          
                          
                          9,613Purchase
      of Treasury Stock
                          
                          
                          (22
                          )
                          
                          
                          (21
                          )Dividends
      paid
                          
                          
                          (111
                          )
                          
                          
                          (109
                          )Net
      cash provided by financing activities
                          
                          
                          7,330
                          
                          
                          
                          4,810Net
      increase in cash
                          
                          
                          1,514
                          
                          
                          
                          97CASH
      AND CASH EQUIVALENTS, beginning of period
                          
                          
                          6,328
                          
                          
                          
                          4,090CASH
      AND CASH EQUIVALENTS, end of period
                          
                          $
                          7,842
                          
                          
                          $
                          4,187SUPPLEMENTAL
      CASH FLOW INFORMATION:Cash
      paid during the period for interest
                          
                          $
                          1,340
                          
                          
                          $
                          1,562Cash
      paid during the period for income taxes
                          
                          $
                          -
                          
                          
                          $
                          321NON-CASH
      INVESTING ACTIVITIES:(Increase)
      decrease in market value of securities available-for-sale
                          
                          $
                          (2,705
                          )
                          
                          $
                          1,587Mortgage
      servicing rights capitalized
                          
                          $
                          234
                          
                          
                          $
                          80
 
 See
accompanying notes to consolidated financial statements.
  -
7-
  EAGLE
BANCORP AND SUBSIDIARY
 
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 
 NOTE
1.BASIS OF
PRESENTATION
 
 The
accompanying unaudited consolidated financial statements have been prepared in
accordance with instructions for Form 10-Q.  Accordingly, they do not
include all of the information and footnotes required by accounting principles
generally accepted in the United States of America for complete financial
statements.  However, such information reflects all adjustments
(consisting of normal recurring adjustments) which are, in the opinion of
management, necessary for a fair presentation of results for the unaudited
interim periods.
 
 The
results of operations for the three month period ended September 30, 2009 are
not necessarily indicative of the results to be expected for the fiscal year
ending June 30, 2010 or any other period.  The unaudited consolidated
financial statements and notes presented herein should be read in conjunction
with the audited consolidated financial statements and related notes thereto
included in Eagle’s Annual Report on Form 10-K for the year ended June 30,
2009.
 
 The
Company evaluated subsequent events for potential recognition and/or disclosure
through November 12, 2009, the date the consolidated financial statements were
issued.
 
 NOTE
2.INVESTMENT
SECURITIES
 
 Investment
securities are summarized as follows:
 (Dollars
in thousands)
 
 September
      30, 2009
                              
                              
                              June
      30, 2009(Unaudited)
                              
                              
                              (Audited)GROSS
                              
                              
                              
                              
                              
                              
                              
                              
                              GROSSAMORTIZED
                              
                              
                              UNREALIZED
                              
                              
                              FAIR
                              
                              
                              AMORTIZED
                              
                              
                              UNREALIZED
                              
                              
                              FAIRCOST
                              
                              
                              GAINS/LOSSES
                              
                              
                              VALUE
                              
                              
                              COST
                              
                              
                              GAINS/LOSSES
                              
                              
                              VALUEAvailable-for-sale:U.S.
      government and  agency obligations
                              
                              $
                              4,919
                              
                              
                              $
                              11
                              
                              
                              $
                              4,930
                              
                              
                              $
                              3,893
                              
                              
                              $
                              (11
                              )
                              
                              $
                              3,882Municipal
      obligations
                              
                              
                              33,354
                              
                              
                              
                              682
                              
                              
                              
                              34,036
                              
                              
                              
                              29,747
                              
                              
                              
                              (854
                              )
                              
                              
                              28,893Corporate
      obligations
                              
                              
                              9,944
                              
                              
                              
                              93
                              
                              
                              
                              10,037
                              
                              
                              
                              9,963
                              
                              
                              
                              (470
                              )
                              
                              
                              9,493Mortgage-backed
      securities
                              
                              
                              7,737
                              
                              
                              
                              248
                              
                              
                              
                              7,985
                              
                              
                              
                              8,287
                              
                              
                              
                              157
                              
                              
                              
                              8,444Collateralized
      mortgage obligations
                              
                              
                              34,341
                              
                              
                              
                              771
                              
                              
                              
                              35,112
                              
                              
                              
                              31,274
                              
                              
                              
                              277
                              
                              
                              
                              31,551Total
                              
                              $
                              90,295
                              
                              
                              $
                              1,805
                              
                              
                              $
                              92,100
                              
                              
                              $
                              83,164
                              
                              
                              $
                              (901
                              )
                              
                              $
                              82,263Held-to-maturity:Municipal
      obligations
                              
                              $
                              265
                              
                              
                              $
                              6
                              
                              
                              $
                              271
                              
                              
                              $
                              375
                              
                              
                              $
                              9
                              
                              
                              $
                              384Total
                              
                              $
                              265
                              
                              
                              $
                              6
                              
                              
                              $
                              271
                              
                              
                              $
                              375
                              
                              
                              $
                              9
                              
                              
                              $
                              384Securities
      at fair value
      option:Preferred
      stock
                              
                              $
                              2,000
                              
                              
                              $
                              (1,892
                              )
                              
                              $
                              108
                              
                              
                              $
                              2,000
                              
                              
                              $
                              (1,975
                              )
                              
                              $
                              25Total
                              
                              $
                              2,000
                              
                              
                              $
                              (1,892
                              )
                              
                              $
                              108
                              
                              
                              $
                              2,000
                              
                              
                              $
                              (1,975
                              )
                              
                              $
                              25
  -
8-
  EAGLE
BANCORP AND SUBSIDIARY
 
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 
 NOTE
3.LOANS
RECEIVABLE
 
 Loans
receivable consist of the following:
 
 September
      30,
                  
                  
                  June
      30,2009
                  
                  
                  2009(Unaudited)
                  
                  
                  (Audited)(In
      thousands)First
      mortgage loans:Residential
      mortgage (1-4 family)
                  
                  $
                  76,711
                  
                  
                  $
                  79,216Commercial
      real estate
                  
                  
                  38,761
                  
                  
                  
                  36,713Real
      estate construction
                  
                  
                  6,119
                  
                  
                  
                  4,642Other
      loans:Home
      equity
                  
                  
                  28,836
                  
                  
                  
                  28,676Consumer
                  
                  
                  11,074
                  
                  
                  
                  10,835Commercial
                  
                  
                  7,244
                  
                  
                  
                  7,541Total
                  
                  
                  168,745
                  
                  
                  
                  167,623Less:  Allowance
      for loan losses
                  
                  
                  (625
                  )
                  
                  
                  (525
                  )Add:   Deferred
      loan expenses
                  
                  
                  65
                  
                  
                  
                  99Total
                  
                  $
                  168,185
                  
                  
                  $
                  167,197
 
 Loans,
net of related allowance for loan losses, on which the accrual of interest has
been discontinued were $1,251,000 and $990,000 at September 30, 2009 and June
30, 2009, respectively. Classified loans, including other real estate
owned, totaled $1,948,000 and $1,614,000 at September 30, 2009 and June 30,
2009, respectively.
 
 The
following is a summary of changes in the allowance for loan losses:
 
 Three
      months
                              
                              
                              Three
      months
                              
                              
                              Twelve
      monthsended
                              
                              
                              ended
                              
                              
                              endedSeptember
      30,
                              
                              
                              September
      30,
                              
                              
                              June
      30,2009
                              
                              
                              2008
                              
                              
                              2009(Unaudited)
                              
                              
                              (Unaudited)
                              
                              
                              (Audited)(In
      thousands)Balance,
      beginning of period
                              
                              $
                              525
                              
                              
                              $
                              300
                              
                              
                              $
                              300Reclassification
      to repossessed property reserve
                              
                              
                              -
                              
                              
                              
                              (3
                              )
                              
                              
                              -Provision
      charged to operations
                              
                              
                              135
                              
                              
                              
                              -
                              
                              
                              
                              257Charge-offs
                              
                              
                              (36
                              )
                              
                              
                              -
                              
                              
                              
                              (47
                              )Recoveries
                              
                              
                              1
                              
                              
                              
                              3
                              
                              
                              
                              15Balance,
      end of period
                              
                              $
                              625
                              
                              
                              $
                              300
                              
                              
                              $
                              525
  -
9-
  EAGLE
BANCORP AND SUBSIDIARY
 
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 
 NOTE
4.DEPOSITS
  Deposits
are summarized as follows (dollars in thousands):
  September
      30,
                  
                  
                  June
      30,2009
                  
                  
                  2009(Unaudited)
                  
                  
                  (Audited)(In
      thousands)Noninterest
      checking
                  
                  $
                  18,902
                  
                  
                  $
                  15,002Interest-bearing
      checking
                  
                  
                  34,784
                  
                  
                  
                  32,664Statement
      savings
                  
                  
                  26,979
                  
                  
                  
                  26,445Money
      market
                  
                  
                  26,730
                  
                  
                  
                  26,886Time
      certificates of deposit
                  
                  
                  87,685
                  
                  
                  
                  86,202Total
                  
                  $
                  195,080
                  
                  
                  $
                  187,199
 
 NOTE
5.EARNINGS
PER SHARE
 
 Basic
earnings per share for the three months ended September 30, 2009 is computed
using 1,072,899 weighted average shares outstanding.  Basic earnings
per share for the three months ended September 30, 2008 is computed using
1,069,211 weighted average shares outstanding.  Diluted earnings per
share is computed using the treasury stock method by adjusting the number of
shares outstanding by the shares purchased.   The weighted
average shares outstanding for the diluted earnings per share calculations are
1,221,658 for the three months ended September 30, 2009 and 1,217,058 for the
three months ended September 30, 2008.
 
 NOTE
6.DIVIDENDS
AND STOCK REPURCHASE PROGRAM
  For the
fiscal year ended June 30, 2009, Eagle has paid a dividend of $0.26 per share on
August 28, 2009.  Eagle declared a dividend of $0.26 per share on
October 22, 2009, to be paid December 4, 2009 to stockholders of record on
November 13, 2009.  Eagle Financial MHC, Eagle’s mutual holding
company, has waived the receipt of dividends on its 648,493 shares.
 
 At its
regular meeting of January 17, 2008, the Company’s Board of Directors also
announced a stock repurchase program for up to 28,750 shares.  This
represented approximately 6.7% of the outstanding common stock held by the
public.  The repurchased shares will be held as treasury stock and
will be held for general corporate purposes and/or issuance pursuant to Eagle’s
benefit plans.  As of November 10, 2009, 5,315 shares have been
purchased under this program.
  -
10-
  EAGLE
BANCORP AND SUBSIDIARY
 
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 
 NOTE 7. FAIR VALUE
DISCLOSURES
 
 Financial
Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)
820 defines fair value as the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market
participants. FASB ASC 825 allows the Company to elect to apply fair value
accounting for designated instruments to improve financial reporting and
mitigate volatility in reported earnings.  A fair value measurement
assumes that the transaction to sell the asset or transfer the liability occurs
in the principal market for the asset or liability or, in the absence of a
principal market, the most advantageous market for the asset or liability. The
price in the principal (or most advantageous) market used to measure the fair
value of the asset or liability shall not be adjusted for transaction costs. An
orderly transaction is a transaction that assumes exposure to the market for a
period prior to the measurement date to allow for marketing activities that are
usual and customary for transactions involving such assets and liabilities; it
is not a forced transaction. Market participants are buyers and sellers in the
principal market that are (i) independent, (ii) knowledgeable,
(iii) able to transact and (iv) willing to transact.
 
 FASB ASC
820 requires the use of valuation techniques that are consistent with the market
approach, the income approach and/or the cost approach. The market approach uses
prices and other relevant information generated by market transactions involving
identical or comparable assets and liabilities. The income approach uses
valuation techniques to convert future amounts, such as cash flows or earnings,
to a single present amount on a discounted basis. The cost approach is based on
the amount that currently would be required to replace the service capacity of
an asset (replacement costs). Valuation techniques should be consistently
applied. Inputs to valuation techniques refer to the assumptions that market
participants would use in pricing the asset or liability. Inputs may be
observable, meaning those that reflect the assumptions market participants would
use in pricing the asset or liability developed based on market data obtained
from independent sources, or unobservable, meaning those that reflect the
reporting entity’s own assumptions about the assumptions market participants
would use in pricing the asset or liability developed based on the best
information available in the circumstances. In that regard, FASB ASC 820
establishes a fair value hierarchy for valuation inputs that gives the highest
priority to quoted prices in active markets for identical assets or liabilities
and the lowest priority to unobservable inputs. The fair value hierarchy is as
follows:
 
 ·
              Level
      1 Inputs - Unadjusted quoted prices in active markets for identical assets
      or liabilities that the reporting entity has the ability to access at the
      measurement date.
 
 ·
              Level
      2 Inputs - Inputs other than quoted prices included in Level 1 that are
      observable for the asset or liability, either directly or indirectly.
      These include quoted prices for similar assets or liabilities in active
      markets, quoted prices for identical or similar assets or liabilities in
      markets that are not active, inputs other than quoted prices that are
      observable for the asset or liability (for example, interest rates,
      volatilities, prepayment speeds, loss severities, credit risks and default
      rates) or inputs that are derived principally from or corroborated by
      observable market data by correlation or other
  means.
 
 ·
              Level
      3 Inputs - Significant unobservable inputs that reflect an entity’s own
      assumptions that market participants would use in pricing the assets or
      liabilities.
 
 A
description of the valuation methodologies used for assets and liabilities
measured at fair value, as well as the general classification of such
instruments pursuant to the valuation hierarchy, is set forth
below.
 
 In
general, fair value is based upon quoted market prices, where available. If such
quoted market prices are not available, fair value is based upon internally
developed models that primarily use, as inputs, observable market-based
parameters. Valuation adjustments may be made to ensure that financial
instruments are recorded at fair value.
 
 While
management believes the Company’s valuation methodologies are appropriate and
consistent with other market participants, the use of different methodologies or
assumptions to determine the fair value of certain financial instruments could
result in a different estimate of fair value at the reporting date.
 
 Investment
Securities Available for Sale – Securities classified as available for sale are
reported at fair value utilizing Level 1 and Level 2 inputs. For these
securities, the Company obtains fair value measurements from an independent
pricing service. The fair value measurements consider observable data that may
include dealer quotes, market spreads, cash flows, the U. S. Treasury yield
curve, live trading levels, trade execution data, market consensus prepayments
speeds, credit information and the bond’s terms and conditions, among other
things.
  -
11-
  EAGLE
BANCORP AND SUBSIDIARY
 
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 
 Preferred
Stock – Fair Value Option – The Company elected in July 2007 to apply the fair
value option to its investment in Freddie Mac and Fannie Mae preferred
stock.  Freddie Mac and Fannie Mae preferred stock are reported at
fair value utilizing Level 2 inputs. For these securities, because there is no
active or liquid trading market, the Company obtains fair value measurements
from an independent pricing service. The fair value measurements consider
observable data that may include dealer quotes, market spreads, cash flows, the
U. S. Treasury yield curve, live trading levels, trade execution data, market
consensus prepayments speeds, credit information and the terms and conditions of
the stock, among other things.
 
 Loans
Held for Sale – These loans are reported at the lower of cost or fair value.
Fair value is determined based on expected proceeds based on sales contracts and
commitments and are considered Level 2 inputs.
 
 Impaired
Loans – Impaired loans are reported at the fair value of the underlying
collateral if repayment is expected solely from the collateral. Collateral
values are estimated using Level 3 inputs based on internally customized
discounting criteria.
 
 Mortgage
Servicing Rights – Fair values are estimated by stratifying the mortgage
servicing portfolio into groups of loans with similar financial characteristics,
such as loan type, interest rate, and expected maturity and are considered Level
2 inputs.  The Company obtains market survey data estimates and bid
quotations from secondary market investors who regularly purchase mortgage
servicing rights.  Assumptions regarding loan payoffs are determined
using historical information on segmented loan categories for nonspecific
borrowers.
 
 The
following table summarizes financial assets and financial liabilities measured
at fair value on a recurring basis as of September 30, 2009, segregated by
the level of the valuation inputs within the fair value hierarchy utilized to
measure fair value (dollars in thousands):
 
 Level
      1
                    
                    
                    Level
      2
                    
                    
                    Level
      3
                    
                    
                    Total
      FairInputs
                    
                    
                    Inputs
                    
                    
                    Inputs
                    
                    
                    Value(In
      thousands)Investment
      securities available-for-sale
                    
                    $
                    
                    
                    
                    $
                    92,100
                    
                    
                    $
                    
                    
                    
                    $
                    92,100Preferred
      stock
                    
                    
                    
                    
                    
                    
                    108
                    
                    
                    
                    
                    
                    
                    
                    108Loans
      held-for-sale
                    
                    
                    
                    
                    
                    
                    3,494
                    
                    
                    
                    
                    
                    
                    
                    3,494
 
 Certain
financial assets and financial liabilities are measured at fair value on a
nonrecurring basis; that is, the instruments are not measured at fair value on
an ongoing basis but are subject to fair value adjustments in certain
circumstances (for example, when there is evidence of
impairment).  The following table summarizes financial assets and
financial liabilities measured at fair value on a nonrecurring basis as of
September 30, 2009, segregated by the level of the valuation inputs within
the fair value hierarchy utilized to measure fair value (dollars in
thousands):
 
 Level
      1
                    
                    
                    Level
      2
                    
                    
                    Level
      3
                    
                    
                    Total
      FairInputs
                    
                    
                    Inputs
                    
                    
                    Inputs
                    
                    
                    Value(In
      thousands)Impaired
      loans
                    
                    $
                    
                    
                    
                    $
                    
                    
                    
                    $
                    3
                    
                    
                    $
                    3Mortgage
      servicing rights
                    
                    
                    
                    
                    
                    
                    2,315
                    
                    
                    
                    
                    
                    
                    
                    2,315
 
 As of
September 30, 2009, certain impaired loans were remeasured and reported at fair
value through a specific valuation allowance allocation of the allowance for
loan losses based upon the fair value of the underlying collateral. Impaired
loans with a carrying value of $3,175 were reduced by specific valuation
allowance allocations totaling $30,469 to a total reported fair value of $3,175
based on collateral valuations utilizing Level 3 valuation inputs.
 
 As of
September 30, 2009, mortgage servicing rights were remeasured and reported at
fair value through a valuation allowance based upon the fair value of the
calculated servicing rights. Servicing rights with a carrying value of
$2,315,000 were reduced by the valuation allowance totaling $0 to a total
reported fair value of $2,315,000 based on collateral valuations utilizing Level
2 valuation inputs.
  -
12-
  EAGLE
BANCORP AND SUBSIDIARY
 
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 
 Repossessed
assets, which are recorded at the lower of cost or market value, are measured
for impairment by comparing the carrying value with the current fair value of
the assets.  Repossessed assets, including other real estate
owned, had a carrying amount of $163,000, as of September 30,
2009.
 
 Those
financial instruments not subject to the initial implementation of FASB ASC 820
are required under FASB ASC 825 to have their fair value disclosed, both assets
and liabilities recognized and not recognized in the statement of financial
position, for which it is practicable to estimate fair value.  Below
is a table that summarizes the fair market values of all financial instruments
of the Company at September 30, 2009, and June 30, 2009, followed by methods and
assumptions that were used by the Company in estimating the fair value of the
classes of financial instruments not covered by FASB ASC 820.
 
 The
estimated fair value amounts of financial instruments have been determined by
the Company using available market information and appropriate valuation
methodologies.  However, considerable judgment is required to
interpret data to develop the estimates of fair value. Accordingly, the
estimates presented herein are not necessarily indicative of the amounts the
Company could realize in a current market exchange.  The use of
different market assumptions and/or estimation methodologies may have a material
effect on the estimated fair value amounts.
 
 September
      30,
                    
                    
                    June
      30,2009
                    
                    
                    2009(Unaudited)
                    
                    
                    (Audited)Estimated
                    
                    
                    
                    
                    
                    EstimatedCarrying
                    
                    
                    Fair
                    
                    
                    Carrying
                    
                    
                    Fair(Dollars
      in Thousands)
                    
                    Amount
                    
                    
                    Value
                    
                    
                    Amount
                    
                    
                    Value(In
      thousands)Financial
      Assets:Cash
      and cash equivalents
                    
                    $
                    7,842
                    
                    
                    $
                    7,842
                    
                    
                    $
                    6,328
                    
                    
                    $
                    6,328Securities
      held-to-maturity
                    
                    
                    265
                    
                    
                    
                    271
                    
                    
                    
                    375
                    
                    
                    
                    384FHLB
      stock
                    
                    
                    2,000
                    
                    
                    
                    2,000
                    
                    
                    
                    2,000
                    
                    
                    
                    2,000Loans
      receivable, net
                    
                    
                    168,185
                    
                    
                    
                    173,540
                    
                    
                    
                    167,197
                    
                    
                    
                    172,408Cash
      value of life insurance
                    
                    
                    6,544
                    
                    
                    
                    6,544
                    
                    
                    
                    6,496
                    
                    
                    
                    6,496Financial
      Liabilities:Deposits
                    
                    
                    107,395
                    
                    
                    
                    107,395
                    
                    
                    
                    100,997
                    
                    
                    
                    100,997Time
      certificates of deposit
                    
                    
                    87,685
                    
                    
                    
                    89,575
                    
                    
                    
                    86,202
                    
                    
                    
                    88,284Advances
      from the FHLB & other borrowings
                    
                    
                    66,639
                    
                    
                    
                    70,542
                    
                    
                    
                    67,056
                    
                    
                    
                    70,524Subordinated
      debentures
                    
                    
                    5,155
                    
                    
                    
                    3,718
                    
                    
                    
                    5,155
                    
                    
                    
                    3,899
 
 The
following methods and assumptions were used by the Company in estimating the
fair value of the following classes of financial instruments.
 
 Cash and interest-bearing
accounts – The carrying amounts approximate fair value due to the
relatively short period of time between the origination of these instruments and
their expected realization.
 
 Stock in the FHLB –The fair
value of stock in the FHLB approximates redemption value.
 
 Loans receivable –Fair
values are estimated by stratifying the loan portfolio into groups of loans with
similar financial characteristics.  Loans are segregated by type such
as real estate, commercial, and consumer, with each category further segmented
into fixed and adjustable rate interest terms.
 
 For
mortgage loans, the Company uses the secondary market rates in effect for loans
that have similar characteristics.  The fair value of other fixed rate
loans is calculated by discounting scheduled cash flows through the anticipated
maturities adjusted for prepayment estimates.  Adjustable interest
rate loans are assumed to approximate fair value because they generally reprice
within the short term.
 
 Fair
values are adjusted for credit risk based on assessment of risk identified with
specific loans, and risk adjustments on the remaining portfolio based on credit
loss experience.
  -
13-
  EAGLE
BANCORP AND SUBSIDIARY
 
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 
 Assumptions
regarding credit risk are determined based on management’s judgment using
specific borrower information, internal credit quality analysis, and historical
information on segmented loan categories for non-specific
borrowers.
 
 Cash surrender value of life
insurance–The carrying amount for
cash surrender value of life insurance approximates fair value as policies are
recorded at redemption value.
 
 Deposits and time certificates of
deposit – The fair value of deposits with no stated maturity, such as
checking, passbook, and money market, is equal to the amount payable on
demand.  The fair value of time certificates of deposit is based on
the discounted value of contractual cash flows.  The discount rate is
estimated using the rates currently offered for deposits of similar
maturities.
 
 Advances from the FHLB &
Subordinated Debentures – The fair value of the Company’s advances and
debentures are estimated using discounted cash flow analysis based on the
interest rate that would be effective September 30, 2009 and June 30, 2009,
respectively if the borrowings repriced according to their stated
terms.
 
 NOTE 8. RECENTLY ISSUED
PRONOUNCEMENTS
 
 GAAP Codification –On
July 1, 2009, the FASB’s GAAP Codification became effective as the sole
authoritative source of GAAP.  This codification reorganizes current
GAAP for non-governmental entities into a topical index to facilitate accounting
research and to provide users additional assurance that they have referenced all
related literature pertaining to a given topic.  Existing GAAP prior
to the Codification was not altered in the compilation of the GAAP
Codification.  The GAAP Codification encompasses all FASB Statements
of Financial Accounting Standards, Emerging Issues Task Force statements, FASB
Staff Positions, FASB Interpretations, FASB Derivative Implementation Guides,
American Institute of Certified Public Accountants Statement of Positions,
Accounting Principles Board Opinions and Accounting Research Bulletins along
with the remaining body of GAAP effective as of June 30,
2009.  Financial Statements issued for all interim and annual periods
ending after September 15, 2009, will need to reference accounting guidance
embodied in the Codification as opposed to referencing the previously
authoritative pronouncements.
 
 In
December 2007, the FASB issued ASC 810 to establish accounting and reporting
standards for the noncontrolling interest in a subsidiary and the
deconsolidation of a subsidiary; (b) changes the way the consolidated income
statement is presented; (c) establishes a single method of accounting for
changes in a parent’s ownership interest in a subsidiary that do not result in
deconsolidation; (d) requires that a parent recognize a gain or loss in net
income when a subsidiary is deconsolidated; and (e) requires expanded
disclosures in the consolidated financial statements that clearly identify and
distinguish between the interests of the parent’s owners and the interests of
the noncontrolling owners of a subsidiary.  The accounting provisions
of ASC 810 must be applied prospectively, but the presentation and disclosure
requirements must be applied retrospectively to provide comparability in the
financial statements.  Early adoption is prohibited.  ASC
810 is effective for fiscal years, and interim periods within those fiscal
years, beginning on or after December 15, 2008.  The Company is in the
process of determining the impact of adopting this new accounting principle on
its consolidated financial position, results of operations and cash
flows
 
 The FASB
recently issued ASC 805 that requires (a) a company to recognize the assets
acquired, the liabilities assumed, and any noncontrolling interest in the
acquiree at fair value as of the acquisition date; and (b) an acquirer in
preacquisition periods to expense all acquisition-related costs, among various
other modifications included in ASC 805.  ASC 805 requires that any
adjustments to an acquired entity’s deferred tax asset and liability balance
that occur after the measurement period be recorded as a component of income tax
expense.  This accounting treatment is required for business
combinations consummated before the effective date ASC 805 (non-prospective),
otherwise ASC 805 must be applied prospectively. The presentation and disclosure
requirements must be applied retrospectively to provide comparability in the
financial statements.  Early adoption is
prohibited.   ASC 805 is effective for fiscal years, and interim
periods within those fiscal years, beginning on or after December 15,
2008.  The impact of this standard is dependent upon the level of
future acquisitions.
 
 FASB ASC
815-10 requires companies to provide qualitative disclosures about the
objectives and strategies for using derivatives, quantitative data about the
fair value of gains and losses on derivative contracts, and details of
credit-risk-related contingent features in their hedged positions.  The
statement also requires companies to disclose more information about the
location and amounts of derivative instruments in financial statements; how
derivatives and related hedges are accounted for and how the hedges affect the
entity’s financial position, financial performance and cash
flows.  FASB ASC 815-10 is effective for periods beginning after
November 15, 2008.  The Company will comply with the disclosure
provisions of FASB ASC 815-10 to the extent it has entered into derivative
transactions in the year of adoption.
  -
14-
  EAGLE
BANCORP AND SUBSIDIARY
 
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 
 On
November 14, 2008, the Securities and Exchange Commission (“SEC”) issued its
long-anticipated proposed International Financial Reporting Standards (“IFRS”)
roadmap outlining milestones that, if achieved, could lead to mandatory
transition to IFRS for U.S. domestic registrants starting in
2014.  IFRS is a comprehensive series of accounting standards
published by the International Accounting Standards Board
(IASB).  Under the proposed roadmap, the Company could be required
through its parent company to prepare financial statements in accordance with
IFRS, and the SEC will make a determination in 2011 regarding the mandatory
adoption of IFRS for U.S. domestic registrants.  Management is
currently assessing the impact that this potential change would have on the
Company’s consolidated financial statements, and will continue to monitor the
development of the potential implementation of IFRS.
  -
15-
  EAGLE
BANCORP AND SUBSIDIARY
 
 MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 
 Item
2.  Management’s Discussion and Analysis of Financial Condition and
Results of Operations
 
 Note
Regarding Forward-Looking Statements
 
 This
report contains certain “forward-looking statements” about  Eagle
Bancorp (“Eagle” or the “Company”) for which it claims the protection of the
“safe harbor” provisions of the Private Securities Litigation Reform Act of
1995.  These forward-looking statements, which are included in
Management’s Discussion and Analysis, and elsewhere in this report, describe
future plans or strategies and include Eagle’s expectations of future financial
results.  The words “believe,” “expect,” “anticipate,” “estimate,”
“project,” and similar expressions are intended to identify forward-looking
statements but are not the exclusive means of identifying such
statements.  Eagle’s ability to predict results or the effect of
future plans or strategies or qualitative or quantitative changes based on
market risk is inherently uncertain.  Factors which could affect
actual results include, but are not limited to (i) change in general market
interest rates, (ii) the length and severity of current difficulties in the
national and local economies and the effects of federal and state government
efforts to address those difficulties; (iii) fluctuations in asset prices
including, but not limited to, stocks, bonds and real estate; (iv)
legislative/regulatory changes, (v) monetary and fiscal policies of the U.S.
Treasury and Federal Reserve, (vi) changes in the quality or composition of
Eagle’s loan and investment portfolios, (vii) demand for loan products, (viii)
deposit flows, (ix) competition, and (x) demand for financial services in
Eagle’s markets.  These factors should be considered in evaluating the
forward-looking statements.  You are cautioned not to place undue
reliance on these forward-looking statements which speak only as of their
dates.  The Company undertakes no obligation to update any
forward-looking statements in this report.
 
 Overview
 
 The
Company’s primary activity is its ownership of its wholly owned subsidiary,
American Federal Savings Bank (the “Bank”).  The Bank is a federally
chartered savings bank, engaging in typical banking
activities:  acquiring deposits from local markets and investing in
loans and investment securities.  The Bank’s primary component of
earnings is its net interest margin (also called spread or margin), the
difference between interest income and interest expense.  The net
interest margin is managed by management (through the pricing of its products
and by the types of products offered and kept in portfolio), and is affected by
moves in interest rates.  Noninterest income in the form of fee income
and gain on sale of loans adds to the Bank’s income.
 
 The Bank
has a strong mortgage lending focus, with the majority of its loans in
single-family residential mortgages.  This has enabled the Bank to
successfully market home equity loans, as well as a wide range of shorter term
consumer loans for various personal needs (automobiles, recreational vehicles,
etc.).  In recent years the Bank has also focused on adding commercial
loans to its portfolio, both real estate and non-real estate.  The
purpose of this diversification is to mitigate the Bank’s dependence on the
mortgage market, as well as to improve its ability to manage its
spread.  The Bank’s management recognizes that fee income will also
enable the Bank to be less dependent on specialized lending and the Bank now
maintains a significant loan serviced portfolio, which provides a steady source
of fee income.   The gain on sale of loans also provides
significant fee income in periods of high mortgage loan origination
volumes.  Fee income is also supplemented with fees generated from the
Bank’s deposit accounts.  The Bank has a high percentage of
non-maturity deposits, such as checking accounts and savings accounts, which
allows management flexibility in managing its spread.  Non-maturity
deposits do not automatically reprice as interest rates rise, as do certificates
of deposit.
 
 For the
past three years, management’s focus has been on improving the Bank’s core
earnings.  Core earnings can be described as income before taxes, with
the exclusion of gain on sale of loans and adjustments to the market value of
the Bank’s loan serviced portfolio.  Management believes that the Bank
will need to continue to focus on increasing net interest margin, other areas of
fee income, and control operating expenses to achieve earnings growth going
forward.  Management’s strategy of growing the bank’s loan portfolio
and deposit base is expected to help achieve these goals:  loans
typically earn higher rates of return than investments; a larger deposit base
will yield higher fee income; increasing the asset base will reduce the relative
impact of fixed operating costs.  The biggest challenge to
management’s strategy is funding the growth of the Bank’s balance sheet in an
efficient manner.  Deposit growth will be difficult to maintain due to
significant competition and higher cost wholesale funding (which is usually more
expensive than retail deposits) will likely be needed to supplement
it.  As did many financial institutions, the Bank invested in certain
securities that were impacted by the current financial
crisis.  Specifically, in the first quarter of the 2008 fiscal year,
the Company elected to apply FASB ASC 825 to certain preferred stock issued by
Freddie Mac and Fannie Mae.  FASB ASC 825 election had a significant
impact on earnings in the first quarter of the 2009 fiscal year, resulting in an
earnings charge for that period of $1.24 million.
 
 The level
and movement of interest rates impacts the Bank’s earnings as
well.  The Federal Reserve’s Federal Open Market Committee (FOMC) did
not change the federal funds target rate during the quarter ended September 30,
2009.  As such it ended at 0.25%.
  -
16-
  EAGLE
BANCORP AND SUBSIDIARY
 
 MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 
 Comparison
of Financial Condition at September 30, 2009 and June 30, 2009
 
 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.  Total liabilities
increased by $8.34 million to $270.25 million at September 30, 2009, from
$261.92 million at June 30, 2009.  Total equity increased $2.64
million to $30.43 million at September 30, 2009, from $27.79 million at June 30,
2009.
 
 Loans
receivable increased $988,000, or 0.59%, to $168.19 million at September 30,
2009 from $167.20 million at June 30, 2009.  Commercial real estate
loans was the loan category with the largest increase, $2.05 million, while
residential mortgage loans decreased $2.51 million.  Real estate
construction loans also increased $1.48 million.  Most other loan
categories showed modest changes.  Total loan originations were $43.07
million for the three months ended September 30, 2009, with single family
mortgages accounting for $29.02 million of the
total.  Home equity and construction loan originations totaled $4.17
million and $2.5 million, respectively, for the same
period.  Commercial real estate and land loan originations totaled
$3.47 million.  Loans held-for-sale decreased to $3.49 million at
September 30, 2009, from $5.35 million at June 30, 2009.
 
 Deposits
grew $7.88 million, or 4.21%, to $195.08 million at September 30, 2009 from
$187.20 million at June 30, 2009.  Growth in certificates of deposit
and non-interest checking, interest-bearing checking accounts, and savings
accounts contributed to the increase in deposits. Money market accounts declined
slightly.  Advances from the Federal Home Loan Bank of Seattle
(“FHLB”) and other borrowings decreased $417,000, or 0.62%, to $66.64 million at
September 30, 2009 from $67.06 million at June 30, 2009.
 
 The
increase in total equity was the result of net income of $844,000 for the three
months ended September 30, 2009 and an increase in other comprehensive income of
$1.89 million (mainly due to an increase in net unrealized gain on securities
available-for-sale), offset by dividends paid, consisting of a $0.26 per share
regular cash dividend, and treasury stock purchases.
 
 Results
of Operations for the Three Months Ended September 30, 2009 and
2008
 
 Net
Income.  Eagle’s net income was $844,000 for the three months
ended September 30, 2009.  Because of its election to apply FASB ASC
825, Eagle had a net loss of $100,000 for the three months ended September 30,
2008, stemming primarily from a loss in value of Freddie Mac and Fannie Mae
preferred stock investments for which the FASB ASC 825 election was
applied.  The return to profitability in the first quarter of the 2010
fiscal year reflected the Company’s traditional core earnings and relatively
small recovery in value in the Company’s holdings of Fannie Mae and Freddie Mac
preferred stock of $84,000.  While the Company continues to hold these
securities, other value adjustments may occur in future periods under FASB ASC
825.  Eagle’s tax provision was $379,000 higher in the current
quarter.  Basic earnings per share were $0.79 for the current period,
compared to a negative ($0.09) for the previous year’s period.
 
 Net Interest
Income.  Net interest income increased to $2.383 million for
the quarter ended September 30, 2009, from $2.236 million for the quarter ended
September 30, 2008.  This increase of $147,000 was the result of a
decrease in interest expense of $239,000 partially offset by a decrease in
interest and dividend income of $92,000.
 
 Interest and Dividend
Income.  Total interest and dividend income was $3.724 million
for the quarter ended September 30, 2009, compared to $3.816 million for the
quarter ended September 30, 2008, representing a decrease of $92,000, or
2.41%.  Interest and fees on loans decreased to $2.708 million for the
three months ended September 30, 2009 from $2.837 million for the same period
ended September 30, 2008.  This decrease of $129,000, or 4.55%, was
due to the decrease in the average balances of loans receivable for the quarter
ended September 30, 2009.  Average balances for loans receivable, net,
for the quarter ended September 30, 2009 were $171.26 million, compared to
$174.37 million for the previous year.  This represents a decrease of
$3.11 million, or 1.78%.  The average interest rate earned on loans
receivable decreased by 18 basis points, from 6.50% at September 30, 2008 to
6.32% at September 30, 2009.  Interest and dividends on investment
securities available-for-sale (AFS) increased to $1.00 million for the quarter
ended September 30, 2009 from $963,000 for the same quarter last
year.  Average balances on investments increased to $84.98 million for
the quarter ended September 30, 2009, compared to $79.00 million for the quarter
ended September 30, 2008.  The average interest rate earned on
investments decreased to 4.74% from 4.91%.
  -
17-
  EAGLE
BANCORP AND SUBSIDIARY
 
 MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 
 Interest
Expense.  Total interest expense decreased to $1.341 million
for the quarter ended September 30, 2009, from $1.580 million for the quarter
ended September 30, 2008, a decrease of $239,000, or 15.13%.  Interest
on deposits decreased to $611,000 for the quarter ended September 30, 2009, from
$862,000 for the quarter ended September 30, 2008.  This decrease of
$251,000, or 29.12%, was the result of a decrease in average rates paid on
deposit accounts from 2.09% at September 30, 2008, to 1.40% at September 30,
2009.  All types of deposit products showed decreases in average rates
paid.  Average balances in interest-bearing deposit accounts increased
to $174.80 million for the quarter ended September 30, 2009, compared to $165.16
million for the same quarter in the previous year. The increase in the average
balance of FHLB and other borrowings resulted in an increase in interest paid on
borrowings to $655,000 in the current quarter compared to $643,000 in the
previous year’s quarter.  The average rate paid on borrowings
decreased from 4.21% for the quarter ended September 30, 2008 to 4.13% for the
quarter ended September 30, 2009.  The average rate paid on all
liabilities decreased 52 basis points from the quarter ended September 30, 2008
to the quarter ended September 30, 2009.
 
 Provision for Loan
Losses.  Provisions for loan losses are charged to earnings to
maintain the total allowance for loan losses at a level considered adequate by
Eagle’s subsidiary, the Bank, to provide for probable loan losses based on prior
loss experience, volume and type of lending conducted by the Bank, national and
local economic conditions, and past due loans in portfolio.  The
Bank’s policies require the review of assets on a quarterly
basis.  The Bank classifies loans as well as other assets if
warranted.  While the Bank believes it uses the best information
available to make a determination with respect to the allowance for loan losses,
it recognizes that future adjustments may be necessary.  A provision
of $135,000 was made for loan losses for the quarter ended September 30, 2009,
and none in the quarter ended September 30, 2008.  This is a
reflection of the continued strong asset quality of the Bank’s loan portfolio,
as non-performing loan ratios continue to be below peer
averages.  Total classified assets increased from $1.61 million at
June 30, 2009 to $1.95 million at September 30, 2009. At quarter end, the Bank
had $158,000 in other real estate owned and $5,000 in repossessed
property.
 
 Noninterest Income.Total
noninterest income increased to $1.061 million for the quarter ended September
30, 2009, from a negative $504,000 for the quarter ended September 30,
2008.  As noted above, the loss for the three months ended September
30, 2008 stemmed primarily from a loss in value of Freddie Mac and Fannie Mae
preferred stock investments for which the FASB ASC 825 election was
applied.  Income from the sale of loans increased to $440,000 from
$183,000 due to $17.62 million more in mortgage loan sales in the current period
versus last year’s period and a relatively small recovery in value in the
Company’s holdings of Fannie Mae and Freddie Mac preferred stock.
 
 Noninterest
Expense.  Noninterest expense increased by $254,000 or 13.74%
to $2.103 million for the quarter ended September 30, 2009, from $1.849 million
for the quarter ended September 30, 2008.  This increase was primarily
due to an increase in FDIC insurance premiums of $58,000 and an increase in
salaries and employee benefits of $53,000.  Other expense categories
showed minor changes.
 
 Income Tax
Expense/Benefit.  Eagle’s income tax expense was $362,000 for
the quarter ended September 30, 2009, compared to a benefit of $17,000 for the
quarter ended September 30, 2008.  The effective tax rate for the
quarter ended September 30, 2009 was 30.02% and was 14.53% for the quarter ended
September 30, 2008.
 
 Liquidity,
Interest Rate Sensitivity and Capital Resources
 
 The
Company’s subsidiary, the Bank, is required to maintain minimum levels of liquid
assets as defined by the Office of Thrift Supervision (OTS)
regulations.  The OTS has eliminated the statutory requirement based
upon a percentage of deposits and short-term borrowings.  The OTS
states that the liquidity requirement is retained for safety and soundness
purposes, and that appropriate levels of liquidity will depend upon the types of
activities in which the company engages.  For internal reporting
purposes, the Bank uses policy minimums of 1.0%, and 8.0% for “basic surplus”
and “basic surplus with FHLB” as internally defined.  In general, the
“basic surplus” is a calculation of the ratio of unencumbered short-term assets
reduced by estimated percentages of CD maturities and other deposits that may
leave the Bank in the next 90 days divided by total assets.  “Basic
surplus with FHLB” adds to “basic surplus” the additional borrowing capacity the
Bank has with the FHLB.  The Bank exceeded those minimum ratios as of
both September 30, 2009 and 2008.
 
 The
Bank’s primary sources of funds are deposits, repayment of loans and
mortgage-backed securities, maturities of investments, funds provided from
operations, and advances from the FHLB.  Scheduled repayments of loans
and mortgage-backed securities and maturities of investment securities are
generally predictable.  However, other sources of funds, such as
deposit flows and loan prepayments, can be greatly influenced by the general
level of interest rates, economic conditions and competition.  The
Bank uses liquidity resources principally to fund existing and future loan
commitments.  It also uses them to fund maturing certificates of
deposit, demand deposit withdrawals and to invest in other loans and
investments, maintain liquidity, and meet operating expenses.
  -
18-
  EAGLE
BANCORP AND SUBSIDIARY
 
 MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 
 Liquidity
may be adversely affected by unexpected deposit outflows, higher interest rates
paid by competitors, and similar matters. Management monitors projected
liquidity needs and determines the level desirable, based in part on commitments
to make loans and management’s assessment of the bank’s ability to generate
funds.
 
 At June
30, 2009 (the most recent report available), the Bank’s measure of sensitivity
to interest rate movements, as measured by the OTS, slightly worsened from the
previous quarter.  The Bank’s capital ratio as measured by the OTS
decreased from the previous quarter.  The Bank’s strong capital
position mitigates its interest rate risk exposure.  The Bank is well
within the guidelines set forth by the Board of Directors for interest rate risk
sensitivity.
 
 As of
September 30, 2009, the Bank’s regulatory capital was in excess of all
applicable regulatory requirements.  At September 30, 2009, the Bank’s
tangible, core, and risk-based capital ratios amounted to 9.45%, 9.45, and
13.72%, respectively, compared to regulatory requirements of 1.5%, 3.0%, and
8.0%, respectively.  See the following table (dollars in
thousands):
 
 At
      September 30, 2009(Unaudited)Dollar
                      
                      
                      %
      ofAmount
                      
                      
                      AssetsTangible
      capital:Capital
      level
                      
                      
                      27,677
                      
                      
                      
                      9.45Requirement
                      
                      
                      4,391
                      
                      
                      
                      1.50Excess
                      
                      
                      23,286
                      
                      
                      
                      7.95Core
      capital:Capital
      level
                      
                      
                      27,677
                      
                      
                      
                      9.45Requirement
                      
                      
                      8,782
                      
                      
                      
                      3.00Excess
                      
                      
                      18,895
                      
                      
                      
                      6.45Risk-based
      capital:Capital
      level
                      
                      
                      28,272
                      
                      
                      
                      13.72Requirement
                      
                      
                      16,487
                      
                      
                      
                      8.00Excess
                      
                      
                      11,785
                      
                      
                      
                      5.72
 
 Impact
of Inflation and Changing Prices
 
 Our
financial statements and the accompanying notes have been prepared in accordance
with generally accepted accounting principles, which require the measurement of
financial position and operating results in terms of historical dollars without
considering the change in the relative purchasing power of money over time and
due to inflation.  The impact of inflation is reflected in the
increased cost of our operations.  Interest rates have a greater
impact on our performance than do the general levels of
inflation.  Interest rates do not necessarily move in the same
direction or to the same extent as the prices of goods and
services.
  -
19-
  EAGLE
BANCORP AND SUBSIDIARY
 
 QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
 Item
3.  Quantitative and Qualitative Disclosures About Market
Risk
 
 This item
has been omitted based on Eagle’s status as a smaller reporting
company.
  -
20-
  EAGLE
BANCORP AND SUBSIDIARY
 
 CONTROLS
AND PROCEDURES
 
 Item
4.  Controls and Procedures
 
 Based on
their evaluation, the Company’s Chief Executive Officer, Peter J. Johnson, and
Chief Financial Officer, Clint J. Morrison, have concluded the Company’s
disclosure controls and procedures are effective as of September 30, 2009 to
ensure that information required to be disclosed in the reports that the Company
files or submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission’s rules and forms.  During the last
fiscal quarter, there have been no changes in the Company’s internal control
over financial reporting that have materially affected, or are reasonably likely
to materially affect, the Company’s internal control over financial
reporting.
  -
21-
  EAGLE
BANCORP AND SUBSIDIARY
 
 Part
II - OTHER INFORMATION
 
 
 Item
      1.
              Legal
      Proceedings.
 
 Neither
the Company nor the Bank is involved in any pending legal proceeding other than
non-material legal proceedings occurring in the ordinary course of
business.
 
 Item
      1A.
              Risk
      Factors.
 
 This item
has been omitted based on Eagle’s status as a smaller reporting
company.
 
 Item
      2.
              Unregistered
      Sales of Equity Securities and Use of
Proceeds.
  The
following table summarizes the Company’s purchase of its common stock for the
three months ended September 30, 2009.
  (a)
                                              
                                              
                                              (b)
                                              
                                              
                                              (c)
                                              
                                              
                                              (d)Total
      Number
                                              
                                              
                                              Maximumof
      Shares
                                              
                                              
                                              Number
      ofPurchased
                                              
                                              
                                              Shares
      thatTotal
                                              
                                              
                                              
                                              
                                              
                                              as
      Part of
                                              
                                              
                                              May
      Yet BeNumber
      of
                                              
                                              
                                              Average
                                              
                                              
                                              Publicly
                                              
                                              
                                              PurchasedShares
                                              
                                              
                                              Price
      Paid
                                              
                                              
                                              Announced
      Plans
                                              
                                              
                                              Under
      the PlansPeriod
                                              
                                              Purchased*
                                              
                                              
                                              Per
      Share
                                              
                                              
                                              or
      Programs
                                              
                                              
                                              or
      ProgramsJuly
      1, 2009 through
                                              
                                              None
                                              
                                              
                                              
                                              N/A
                                              
                                              
                                              
                                              N/A
                                              
                                              
                                              
                                              24,240July
      31, 2009August
      1, 2009 though
                                              
                                              
                                              805
                                              
                                              
                                              $
                                              28.25
                                              
                                              
                                              
                                              805
                                              
                                              
                                              
                                              23,435August
      31, 2009September
      1, 2009 through
                                              
                                              None
                                              
                                              
                                              
                                              N/A
                                              
                                              
                                              
                                              N/A
                                              
                                              
                                              
                                              23,435September
      30, 2009Total
                                              
                                              
                                              805
                                              
                                              
                                              $
                                              28.25
                                              
                                              
                                              
                                              805
                                              
                                              
                                              
                                              23,435
 
 *The
Company publicly announced a stock repurchase program on January 17, 2008. The
Company was authorized to acquire up to 28,750 shares of common stock with the
price subject to market conditions. No expiration date was set for the
repurchase program. As of September 30, 2009, 5,315 shares had been repurchased
under this plan.
 
 Item
      3.
              Defaults
      Upon Senior Securities.
 
 Not
applicable.
  -
22-
  EAGLE
BANCORP AND SUBSIDIARY
 
 Part
II - OTHER INFORMATION (CONTINUED)
 
 Item
      4.
              Submission
      of Matters to a Vote of Security
Holders.
 
 Not
applicable
 
 Item
      5.
                Other
      Information.
  None.
 
 Item
      6.
              Exhibits.
 
 31.1
Certification by Peter J. Johnson, Chief Executive Officer, pursuant to Rule
13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to
Section 302 (a) of the Sarbanes-Oxley Act of 2002.
 
 31.2
Certification by Clint J. Morrison, Chief Financial Officer, pursuant to Rule
13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to
Section 302 (a) of the Sarbanes-Oxley Act of 2002.
 
 32.1
Certification by Peter J. Johnson, Chief Executive Officer, and Clint J.
Morrison, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
  -
23-
 
 EAGLE
BANCORP AND SUBSIDIARY
 
 SIGNATURES
 
 Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
 
 EAGLE
      BANCORPDate: 
      November 12, 2009
                      By:
                      /s/ Peter
      J. JohnsonPeter
      J. JohnsonPresident/CEODate: 
      November 12, 2009
                      By:
                      /s/ Clint
      J. MorrisonClint
      J. MorrisonSenior
      Vice
President/CFO
  -
24-