Eagle Bancorp and Virginia Heritage Bank Announce Merger Agreement

Eagle Bancorp and Virginia Heritage Bank Announce Merger Agreement

$182.9 Million Transaction Significantly Expands EagleBank's Northern Virginia
Presence Creates Community Bank With $4.7 Billion of Assets

BETHESDA, Md. and TYSONS CORNER, Va., June 9, 2014 (GLOBE NEWSWIRE) -- On June
9, 2014, Eagle Bancorp, Inc. ("Eagle") (Nasdaq:EGBN), the parent company of
EagleBank ("EagleBank"), and Virginia Heritage Bank ("VHB") (OTCQB:VGBK)
announced that they have entered into a definitive agreement (the "Agreement")
pursuant to which VHB will be merged into EagleBank, with EagleBank being the
surviving institution. The merger will accelerate Eagle's growth with the
addition of VHB's 6 branches, which are all located in the attractive Northern
Virginia market. At March 31, 2014, VHB had approximately $917.4 million in
assets, $715.8 million in net loans and $737.1 million in deposits.

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Virginia Heritage Bank Logo

Under the Agreement, as illustrated in the table below, each VHB shareholder
will be entitled to receive a combination of Eagle common stock and cash for
each share of VHB common stock they own. So long as the average closing price
of a share of Eagle common stock over a 20 trading day period ending five
trading days prior to closing (the "Eagle Average Price") is at least $29.00
and not more than $35.50, then each share of VHB common stock would be
converted into the right to receive shares of Eagle common stock having a
value, based on the Eagle Average Price, of $21.50 per share, and cash of
$7.50 per share, for aggregate consideration of $29.00 per share. If the Eagle
Average Price is higher than $35.50, then each share of VHB common stock would
be converted into 0.6056 shares of Eagle common stock, and the cash
consideration per share would increase above $7.50 as illustrated in the table
below. If the Eagle Average Price is less than $29.00, then, generally, each
share of VHB common stock would be converted into the right to receive $7.50
in cash and shares of Eagle common stock having a value equal to the Eagle
Average Price less $7.50.

Options to acquire VHB common stock will be assumed by Eagle and converted
into options to acquire shares of Eagle common stock.

Based on the closing price of Eagle common stock on June 6, 2014 of $32.92,
the Exchange Ratio would be 0.6531, and the aggregate value of the transaction
would be approximately $182.9 million, including the value of outstanding
options to acquire VHB common stock, but excluding the value of VHB's
preferred stock, or approximately 205.7% of VHB's book value and tangible book
value per common share and 18.1x VHB's trailing twelve month earnings
available to common shareholders, each as of March 31, 2014. Approximately
$45.1 million of the aggregate consideration would be payable in cash. The
Exchange Ratio and the value of the transaction at closing may be higher or
lower, depending on the change in the value of Eagle common stock. Eagle
expects that the transaction will be accretive to Eagle's earnings within
twelve months following the closing of the merger, and will result in modest
dilution to tangible book value, which is expected to be earned back within
four years.

The following table sets forth, for illustrative purposes only, the
consideration to be received in exchange for each share of VHB common stock,
and the approximate aggregate transaction value (including the value
attributable to in the money options) and shares issuable, at a range of Eagle
Average Prices.

                               of                    Aggregate      Eagle
Eagle   Exchange Total         Eagle   Cash          Transaction    Shares
Average Ratio    Consideration Common  Consideration Value          Issuable
Price            Per VHB Share Stock   Per VHB Share (including     (excluding
                               Per VHB               options)^1     options)^1
$25.00  0.7000   $25.00        $17.50  $7.50         $156.9 million 4,211,755
$26.00  0.7115   $26.00        $18.50  $7.50         $163.4 million 4,280,954
$27.00  0.7222   $27.00        $19.50  $7.50         $169.9 million 4,345,334
$28.00  0.7321   $28.00        $20.50  $7.50         $176.4 million 4,404,900
$29.00  0.7414   $29.00        $21.50  $7.50         $182.9 million 4,460,856
$30.00  0.7167   $29.00        $21.50  $7.50         $182.9 million 4,312,241
$31.00  0.6936   $29.00        $21.50  $7.50         $182.9 million 4,173,253
$32.00  0.6719   $29.00        $21.50  $7.50         $182.9 million 4,042,689
$32.92  0.6531   $29.00        $21.50  $7.50         $182.9 million 3,929,573
$33.00  0.6515   $29.00        $21.50  $7.50         $182.9 million 3,919,946
$34.00  0.6324   $29.00        $21.50  $7.50         $182.9 million 3,805,025
$35.00  0.6143   $29.00        $21.50  $7.50         $182.9 million 3,696,121
$35.50  0.6056   $29.00        $21.50  $7.50         $182.9 million 3,643,775
$36.00  0.6056   $29.41        $21.80  $7.61         $185.6 million 3,643,775
$37.00  0.6056   $30.23        $22.41  $7.82         $190.9 million 3,643,775
$38.00  0.6056   $31.04        $23.01  $8.03         $196.2 million 3,643,775
$39.00  0.6056   $31.86        $23.62  $8.24         $201.5 million 3,643,775
$40.00  0.6056   $32.68        $24.23  $8.45         $206.8 million 3,643,775

Eagle would also assume the 15,300 shares of VHB's preferred stock which has
an aggregate liquidation preference of $15.3 million and was issued in
connection with the U.S. Treasury's Small Business Lending Fund Program.


^1 Based on 6,018,801 shares of VHB common stock issued and outstanding as of
May 31, 2014, and options outstanding as of May 31, 2014 to purchase 481,861
shares of VHB common stock at an average weighted exercise price of
approximately $11.64 per share.Excludes the value of VHB preferred stock.

In connection with the merger, David P. Summers, Chairman and CEO of VHB, will
be invited to join the Board of Directors of Eagle and EagleBank.

The merger is expected to close as early as the fourth quarter of 2014. The
Agreement has been unanimously approved by the boards of directors of both
Eagle and VHB and is subject to the approval by common shareholders of VHB,
the approval of the applicable bank regulatory authorities, and the
satisfaction or waiver of the conditions to closing and covenants of each
party contained in the Agreement.

The merger is not contingent on the raising of any additional capital.
However, in order to maintain the levels of capital which Eagle desires to
maintain as of the closing of the merger, which is expected to coincide with
the effectiveness of the new regulatory capital rules, and to support
continued operations, Eagle expects that it will seek to supplement its
capital prior to the closing of the merger through the sale of up to $55
million of subordinated debt.

Ronald D. Paul, Chairman and CEO of Eagle and EagleBank said, "We are
extremely excited about the proposed acquisition of VHB and the transformative
opportunities the combination creates for us in Northern Virginia. Both banks
are similar in that we share a culture of providing outstanding customer
service and putting customer relationships first, while never taking the eye
off the ball in terms of credit quality or enhancing shareholder value. We
look forward to serving VHB's customers with our portfolio of deposit, cash
management, and loan products tailored for small and medium-sized businesses,
real estate investors, law firms and other professional organizations. The
addition of VHB's team, combined with our own organic growth, gives EagleBank
the ability to be a major factor in this dynamic market, long one of our
principal objectives. We feel that VHB's customers will value our vision of
providing superior customer service, making credit available to eligible
borrowers, providing access to local leadership and decision makers, and our
commitment to the community which have resulted in Eagle becoming the premier
community banking organization in the D.C. metropolitan area."

David P. Summers, Chairman and CEO of VHB noted, "In 16 years EagleBank has
established itself as the leading community banking company serving the
Washington, D.C. metropolitan area. For our customers, partnership with Eagle
means access to additional products and services, greater convenience, a
significantly higher lending capacity, and an expanding, well-positioned
branch network. For our shareholders, taking the currency of a high performing
company translates into enhanced shareholder value. The alliance of our two
companies should prove a winning combination all around. I look forward to
working with Ron to continue the expansion of the combined franchise."

VHB was advised by Sandler O'Neill + Partners, L.P. as financial advisor, and
Holland & Knight LLP as legal counsel. Houlihan Lokey Capital, Inc. served as
financial advisor, and BuckleySandler LLP served as legal counsel, to Eagle.
Keefe, Bruyette & Woods, Inc. provided a fairness opinion to the Board of
Directors of Eagle.

Conference Call: Eagle Bancorp will host a conference call to discuss the
merger on Tuesday, June 10, 2014 at 11:00 a.m., eastern daylight time. The
public is invited to listen to this conference call by dialing 1.877.303.6220,
conference ID Code is 57975795, or by accessing the call on the Company's
website, www.eaglebankcorp.com. A replay of the conference call will be
available on the Company's website through June 25, 2014. An investor
presentation relating to the merger will be available in the Current Report on
Form 8-K to be filed with the Securities and Exchange Commission (the "SEC"),
and will also be posted on Eagle's website prior to the call.

About the Companies: Eagle Bancorp, Inc. is the holding company for EagleBank,
which commenced operations in 1998. EagleBank is headquartered in Bethesda,
Maryland, and conducts full service commercial banking through eighteen
offices, located in Montgomery County, Maryland, Washington, D.C. and Northern
Virginia. EagleBank focuses on building relationships with businesses,
professionals and individuals in its marketplace.

Virginia Heritage Bank is headquartered in Tysons Corner, Virginia. The Bank
has six full service offices in Arlington, Fairfax, Chantilly, Gainesville,
Tysons Corner and Sterling, Virginia. The Bank also has a mortgage division
located in Chantilly, Virginia.

Forward-looking Statements: This press release contains forward-looking
statements within the meaning of the Securities and Exchange Act of 1934, as
amended, including statements of goals, intentions, and expectations as to
future trends, plans, events or results of Eagle's operations and policies and
regarding general economic conditions. These forward-looking statements
include, but are not limited to, statements about (i) the benefits of the
merger between EagleBank and VHB and (ii) Eagle's and VHB's plans,
obligations, expectations and intentions. In some cases, forward-looking
statements can be identified by use of words such as "may," "will,"
"anticipates," "believes," "expects," "plans," "estimates," "potential,"
"continue," "should," and similar words or phrases. These statements are based
upon the beliefs of the respective managements of Eagle and VHB as to the
expected outcome of future events, current and anticipated economic
conditions, nationally and in the parties' market, and their impact on the
operations and assets of the parties, interest rates and interest rate policy,
competitive factors, judgments about the ability of the parties to
successfully consummate the merger and to integrate the operations of the two
companies, the expected growth opportunities or cost savings resulting from
the merger, which may not be fully realized or take longer than expected to
realize; the ability of the two companies to avoid customer dislocation or
runoff, and employee attrition, during the period leading up to and following
the merger, the timing of and any conditions to required regulatory approvals,
the demand for and pricing of subordinated debt or other securities, and other
conditions which by their nature, are not susceptible to accurate forecast and
are subject to significant uncertainty. Factors that could cause results and
outcomes to differ materially include, among others, the ability to obtain
required regulatory and shareholder approvals; the ability to complete the
merger as expected and within the expected timeframe; and the possibility that
one or more of the conditions to the completion of the merger may not be
satisfied. Because of these uncertainties and the assumptions on which this
discussion and the forward-looking statements are based, actual future
operations and results in the future may differ materially from those
indicated herein. Readers are cautioned against placing undue reliance on such
forward-looking statements. Past results are not necessarily indicative of
future performance. Eagle and VHB assume no obligation to revise, update, or
clarify forward-looking statements to reflect events or conditions after the
date of this release.


Eagle will file with the SEC, a registration statement on Form S-4 which will
include a prospectus regarding the shares of Eagle common stock to be issued
in the merger, and proxy statement for the meeting of VHB shareholders at
which approval of the Agreement will be voted upon. The combined proxy
statement/prospectus will be mailed to the shareholders of VHB. Investors and
security holders of Eagle and VHB are urged to read the proxy
statement/prospectus, the documents incorporated by reference in the proxy
statement/prospectus, the other documents filed with the SEC and the other
relevant materials when they become available, because they will contain
important information about Eagle, VHB, the merger and the transactions
contemplated by the merger. Investors will be able to obtain these documents
free of charge at the SEC's web site (http://www.sec.gov). In addition,
documents filed with the SEC by Eagle will be available free of charge from
Eagle's Investor Relations at (301) 986-1800, or on Eagle's website at
www.eaglebankcorp.com under the tab "Investor Relations" and then under the
heading "SEC Filings." Certain information regarding VHB may also be found on
VHB's website at www.vhbank.com.

Eagle, VHB and their respective directors, executive officers, and certain
other members of management and employees of Eagle, EagleBank and VHB may be
deemed to be participants in the solicitation of proxies from shareholders of
VHB in connection with the proposed merger. Information concerning the
interests of the persons who may be considered "participants" in the
solicitation will be set forth in the combined proxy statement/prospectus
relating to the merger and the other relevant documents filed with the SEC
when they become available. Information about the directors and executive
officers of Eagle is also set forth in Eagle's proxy statement for its 2014
annual meeting of shareholders filed with the SEC.

         Ronald D. Paul
         David P. Summers

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