Eagle Bancorp, Inc. · NASDAQ:EGBN
Eagle Bancorp — Sandler O'Neill Investor Field Trip (September 2015)
50 slides from Eagle Bancorp's conference presentation, Sep 17, 2015
Slide 1: Presentation for Sandler O'Neill Investor Field Trip
” @EAGLE BANCORP INC. Presentation for Sandler O’Neill Investor Field Trip September 17, 2015 Ticker: EGBN OO ee
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation 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 Company operations and policies and
Slide 3: Company Overview
Company Overview = Eagle Bancorp, Inc. is a growth-oriented community bank headquartered in Bethesda, Maryland » Focused on the Washington, DC metropolitan area, with 22 branches “! = Commercially-oriented business model with deep relationships of loans, core deposits and related products = #1 in de
Slide 4: Investment Highlights
Investment Highlights = Focused on Profitability and Balanced Financial Performance = Strong Net Interest Margin = 4.33% = Clean Asset Quality: NPAs/Assets = 0.44% = Low Charge-Off History: NCOs/Average Loans = 0.21% * Driven by Long-Term, Deep Customer Relationships = Demonstrated Consistent Organi
Slide 5: Experienced Senior Management Team
‘Experienced Senior Management Team Years Years in with Name_ Title/Function Banki EGBN Ronald D. Paul ‘Chairman, President & CEO 28 7 Robert P. Pincus Vice Chairman 42 4 Susan G. Riel Sr. EVP & COO - EaglBank 39 7 James H. Langmead EVP & Chief Financial Officer - Eagle Bancorp & EaglBank 44 10 Laur
Slide 6: Summary Statistics
'Summary Statistics Total Assets: Total Loans: Total Deposits: Tangible Common Equity: Tangible Book Value per Common Share: Shares Outstanding (at close August 31, 2015) SBLE Preferred: (1% Dividend Rate, until January, 2016) Market Capitalization (at close August 31, 2015): Insider Ownership: Inst
Slide 7: EagleBank Branch Locations
EagleBank Branch Locations Loudoun County Reston < Washington, DC » Tyson's Comer Fairfax County NOTE: Branch Totals as of June 30, 2015, Ballston Branch expected to close in 2015 6
Slide 8: Deposit Market Share
Deposit Market Share (Dollars in thousands) Local ‘June 30, Tune 30, 2014 ‘Community 2013 2014 Market Rank Banks Company Name Branches Balance Balance Share 1 Wells Fargo & Co. 14 S2140491 $22,746,582 168% 2 Bank of America Comp. m 17,440,485 20,398,034 151% 3 Capital One Financial Comp. 134 2.049.9
Slide 9: Performance vs. Peer Group
Performance vs. Peer Group R: (at or for the quarter ended June 30) Net Interest Margin = Efficiency Ratio = NPAs + 90 Days Past Due/Total Assets ‘= Allowance Loan Losses/Gross Loans © Reserve/NPLs (Coverage Ratio) = Net Charge-Ofls to Average Loans (Annualized) ‘Tangible Common Equity/Tangible Asse
Slide 10: Consistent Balance Sheet Growth
Consistent Balance Sheet Growth $6,005 Total Assets a Ps cack: 135 | cee 5% 1oQz 1093 10Qt 11QI 11Q2 QF 1Q4_ 12Q1 1292 12Q3 1294 13Q1 13Q2_13Q3_13Q4 QI 14Q?_14QI_H4Q4 ISQI_ 15Q2 Millions of Dollars 2 3 L (Q) Highly Valued Per Group shown on page 30. Compound anual growth rate calculated off Peer Gro
Slide 11: Consistent Net Income Growth
| Consistent Net Income Growth Net Income Available to Common Bl TARP Dividend O SBLF Dividend s2a938 $21,000: 20,000. 319,000: 18,000. 17.000: $16,000: 315,000: $14,000: $13,000: $12,000: 11,000: 10,000: 39,000: $8,000: $7,000: $6,000: $5,000: $4,000: $3,000: $2,000: ‘Thousands of Dollars 1OQl 10Q3
Slide 12: Net Interest Margin
‘Net Interest Margin 5.00% 4.50% 4.00% 3.50% 3.00% 2.50% 2.00% 448% 4.45% 0% 3.89% 3.73% 441%. 4.33% 3.79% 3.719 2014Q2 20148 20144 MEGBN ®Peer Group 2015Q1 2015Q2 ued Peer Croup shown on page 30, Represent Peer ods shown
Slide 13: Yields and Cost of Funds
Yields and Cost of Funds Yield on Ave ge Earning Assets Yield on Loans 5.60% 53% 2O14Q2 —-2014QB_—--2014QA---201SQL_—-2015Q2 2O4Q2 —-2014Q3_-2014Q4_—2015Q EGBN Peer Group MEGBN Peer Group Cost of Funds 0.50% 0.42% 01% 0.41% .36rgmy 0363796 037% 50, ase | | 0.0% = ‘ 2 2014Q2 2014QB_-2014Q4_-201SQI. 2
Slide 14: Earnings per Share
Earnings per Share MEPS (Reported) EPS (Operating) $0.70 CAGR = 27! $0.61 $0.61 $0.60 E $0.55 $0.50 $0.50 $0.40 $0.30 $0.20 $0.10 $0.00 2014Q2 20143 2014Q4 2015Q1 2015 For Operating EPS in 2014, please refer tothe Non-GAAP reconciliation andfocinotes inthe appendices on pages 31-32,
Slide 15: Tangible Book Value per Share
Tangible Book Value per Share $20.00 3.65°% $18.00 nae nae 82 Stra $16.00 aa $14.71 $14.56 $14.00 $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $0.00 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 NOTE: Please refer tothe Non-GAAP reconciliation and footnotes in the appendices on pages 3-32 4
Slide 16: Consistent Increases in Operating Leverage
Consistent Increases in Operating Leverage $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 ssonm i ee $0 ee a a SHELL HE EK CK KK KH KK KH KK =f Revenue ($0003) =t=Non-Int Expense ($0005) NOTE: Please refer tothe Non-GAAP reconciliation and footnotes inthe appendices on pages 31-32. Data for Q2, Q3,
Slide 17: Consistently Improving Efficiency Ratio
Consistently Improving Efficiency Ratio 65% 4 60% 5% 56% uaa? 55% 55% 55% 50% 49% 4% 46% 45% 45% 40% 2014Q2 201493 20144 2015Q1 MEGBN Peer Group ‘Note: Highly Valued Peer Group shown on page 30. Represent Peer Group median values forthe ptids shown (1) See Non-GAAP resncliatonon pages 31 -32. (2) EG
Slide 18: Moderate Interest Rate Risk Position
Moderate Interest Rate Risk Position Interest Rate Risk Indicators Investments. Loans Deposits Borrowings Interest Rate Shock Analysis Net Interest income - Flat balance Sheet Net Interest income - + 100 basis point shock Percentage Change Net Interest income - + 200 basis point shock Percentage Cha
Slide 19: Deposit Composition and Growth
‘Deposit Composition and Growth (stan Vlas Showsande) Deposit Type %of %of %of Balance Total Balance Total Balance Total % Noninterest Bearing, S 945,485 28.1% $1,175,799 27.3% $1,370,590 28.4% 45.0% Interest Bearing Transaction 128,415 3.8% 143,628 33% 220,382 4.6% 11.6% Core Savings & Money Market
Slide 20: Balanced Loan and Deposit Growth
Balanced Loan and Deposit Growth $6.0 $5.0 | $4.0 $3.0 $ in Billions $2.0 $1.0 $0.0 oe i 6 a oe ke gl ae ae a Sl ous ae? ol? mTotal Loans = Total Deposits 2011 excludes the “settlement deposit.
Slide 21: Detail of Loan Portfolio
Detail of Loan Portfolio [ie ch I A SO ER See SE re SS 72,704 $3,386 2,737 183,272 27,425 7,906 2,486,485, 70 352,471 7.7% Other MD 61,740 32,030 4,387 362,467 -80,400-23,795 «12,757 6,397 284 584,257 12.8% Loudoun 36,167 54,227 22,382 ‘13,992 2,468 4,350 133,826 Prince Wiliam, 12,218 17,311 79816 4
Slide 22: CRE Risk Management
CRE Risk Management Executive & Board Level Oversight of Approval Process Disciplined Underwriting Proactive Portfolio Management Quarterly Stress Testing of Portfolio Quarterly Independent Credit Review Dedicated Special Assets Team 21
Slide 23: Credit Quality Trends
Credit Quality Trends (Dollars Values in Thousands) 30-89 Days Past Due ‘Nonperforming Assets: 90 or More Days Past Due Nonaccrual Total Nonperforming Loans (NPI) Other Real Estate Owned (OREO) ‘Total Nonperforming Assets Performing Restructured Loans (TDRs) NPAs/Assets NPAs#IDRs/Assets Reserves Res
Slide 24: Consistent Asset Quality
‘Consistent Asset Quality Total Loans (Smms) Dolla Vales in Thousands) 50 ey $50) Buy bad id 2010 $276189 1.53% 035% $3500 a so pn) 2011 $380,756 1.2% ss a soy , son ia 2012 $3689 1.06% 037% bn a8 ie 2013 $452,053 090% 023% sian re so ws 2014 $1,367,241 0.68% 017% QSYTD $238.08 0.4% 018% ne Sep ees
Slide 25: Capital Strength
Capital Strength (Dollars Values in Thousands) Total Assets S 3,803,952 S 3,914,444 S 4,169,181 S 5,247,880 S 5,500,340 S$ 5,753,803 Total Stockholders Equity S 410,382 S$ 426,821 S 442,614 S 620,759 $741,530 $765,061 ‘Total Common Stockholders Equity S$ 353,782 S 370,221 S$ 386,014. $548,859 S 669,
Slide 26: Key Success Factors
Key Success Factors = Building and maintaining core relationships © Cross sales » Focus on key customers = Maintenance of strong credit culture © Conservative underwriting criteria and loan policies « Disciplined committee approval and review process » Periodic loan and portfolio stress testing o Pr
Slide 27: Key Success Factors (continued)
Key Success Factors (continued) = Disciplined ALCO process = Maintained focus on areas of strength » Concentration on core geographic markets and products = Built the proper infrastructure to support the increased volume of business and regulation = Comprehensive Management and Board level reporting
Slide 28: EagleBank Growth Strategy
EagleBank Growth Strategy = Continue Integration of Virginia Heritage Bank Acquisition Profitability * Pricing discipline to sustain Net Interest Margin * Diligent expense control to maintain Efficiency Ratio Maintain Credit Quality Emphasis on Organic Growth * Only 3.1% deposit market share in DC M
Slide 29: EGBN Stock Price Performance
‘EGBN Stock Price Performance Total Return Performance 450.00 —eEngle Bancorp, Ine 400.00 + “9 nAs0A0 Bonk index eae AB NASDAA Stock Maret index (U.S. Companies) a s8P 500 300.00 250.00 + 200.00 130.00 100.00 5000 $312010 $1201 #312012 #312013, s312018 812015 Stock Price Performance 1 Year 3 Year 5
Slide 30: Appendices
| Appendices
Slide 31: Highly Valued Peer Group
Highly Valued Peer Group West NOTE: Peer Group includes al pubilyarded banks Na used when current data oO sions de with $2. billion o $7 billion in assets that rade at 200% of tangible book vale or hiher. Prior quarter or rir quater TM 3 SOURCE: SNL Financial asses ae defined loans real ette ovned a
Slide 32: Non-GAAP Reconciliation
‘Non-GAAP Reconciliation GAAP Reconciliation (Unaudited) dollars in thousands exept per share data) Six Months Bnded ‘Twelve Months Ended SixMonths Ended Sune 30,2015 December 31,2014 June 30,2014 Common shareholders! equity $ tS SRR S 370201 Less: Intangible assets (108.957) (108,908) G3) ‘Tangitte
Slide 33: Non-GAAP Reconciliation Footnotes
‘Non-GAAP Reconciliation Footnotes (1) Tangible common equity to tangible assets (the "tangible common equity ratio") and tangible book value per common share are non-GAAP financial measures derived from GAAP-based amounts. The Company calculates the tangible common equity ratio by excluding the bal
Slide 34: Market Information —Washington, DC MSA
Market Information —Washington, DC MSA = Population a Sth largest market in the U.S. = Employment a 73,500 new jobs created in last year 6.2 Million 3.2 Million a Employment growth driven by private sector, over 195,000 new private sector jobs created over last four years a Unemployment rate of 4.6%
Slide 35: Greater Washington Economy
Greater Washington Economy Other Federat Hospitality 3.68% Federal Procurement Assodiatlons Non-Local Business Local Business 39.9% District of Columbia Suburban Maryland ‘Northern Virginia 18.00 Gross Regional Product $449 Billion rge Mason University - Center for Regional Analysis
Slide 36: Loan Portfolio and Growth
Loan Portfolio and Growth (ltr Vest Ttoaaeds) Loan Type Babanoe Banoe _% of Total Balance _% of Total % Commercial and Industrial $726,611 22.2% —$ 916226 21.2% — $ 960,506 211% 32.2% 97% Owner Occupied 330,073 10.1% 461,581 10.7% 497,834 109% 508% 15.7% Owner Occupied-Const 38,368 1.2% 58,032 1.3%
Slide 37: Geographic Detail - Income Producing CRE
Geographic Detail - Income Producing CRE (ler Valen Toland) Single Redevel) Office! Mali- aid Mixed County Retail Condo Family Family Hotel Ue Industrial Other TOTAL _% of Total Maryland Montgomery SHG SI2810 300 S385 0 $2149 828 TAG $1666 8.7% Prince George's 44,906 7259 11387 9.604 wos 9713 R62 31
Slide 38: Geographic Detail — Construction
| Geographic Detail — Construction ‘Maryland Prince Geome’s 488 0 0 0 0 6A55 436 12.646 WAS 3.6% Other MD 5.864 0 28688 36.459 ° 1349 Lots 5892 89.400 105% Virginia Loudoun 2037 11,955 0 o ° °o 0 0 1392 1.89 Prince William 1862 2419 ° ) 0 o o ° Al 06% Other VA 328 14738 870 ° 1,087 1,683, o 15,440 3
Slide 39: Loan Portfolio by Risk Rating
‘Loan Portfolio by Risk Rating 1000 Prime 2000 - cellent 250695 76% 3000 - Good 1395341 425% 4000- Acceptable 1,139,562 349% 5000 - Acceptable with Risk 301855 121% (6000- Watch 381 1.2% 51330 11% 7000 - Special Mention. 16257 05% 6101 01% '8000- Substandard 36991 11% 0939 0% 9000 - Doubtful - 00% -
Slide 40: Conservative Securities Portfolio
‘Conservative Securities Portfolio (Dollar Values in Thousands) $59,360 S637 soo $59,703 14.1% 256.196 1,517 2,050 235,663, wore 90,593 Zen ‘oa? 92,838 21.5% 15,100 = 7° 1s08 3.6% 396 os 464, 1% Sass So Soo SR 709 Too.0% US Govemment Agency Securities s9.434 8500 S10 $29,894 Mortgage Backed Securite
Slide 41: Nationally Recognized Financial Performance
‘Nationally Recognized Financial Performance SANDLER O'NEILL + PARTNERS " “20p Investment Idea” Recommendation 2012 = “Sm-All Stars” Designation 2011, 2013 & 2014 z = Designated as a “Challenger” Bank 2015 mis ® Honor Roll of Community Banks 2010-2013 Independent Community = Ronald D, Paul named Eas
Slide 42: Highly Regarded by Bank Rating Firms
‘Highly Regarded by Bank Rating Firms FIRM BANK RATING KBRA A- ==IDC 285/300 Analyze the Future BAUERFINANCIAL, INC Sotobotok
Slide 43: Experienced Management Team
Experienced Management Team Ronald D. Paul, Chairman, President and CEO Mr. Paul, a founder of EagleBank, has served as Chairman since May 2008, and prior to that time was Vice Chairman and Chief Executive Officer since the organization of the Company. Since June 2006, he has served as Chief Executi
Slide 44: Experienced Management Team
‘Experienced Management Team Susan G. Riel, Senior EVP, Chief Operating Officer of Ei & EVP, Eagle rp, Ine. Ms. Riel, Senior Executive Vice President - Chief Operating Officer of the Bank, and formerly Chief Administrative Officer. Ms.Riel has been with the bank for 16 years. She previously served a
Slide 45: Experienced Management Team
‘Experienced Management Team Charles C. Brockett, EVP & Director of Operations ae Brockett joined EagleBank in October of 2014 though our merger with Virginia Heritage Bank where he had served as Chief Financial Officer since 2005 and Chief Operating Officer since 2010 and was also a ior to his tenu
Slide 46: Experienced Management Team
Experienced Management Team Antonio F. Marquez, EVP, Chief Commercial Real Estate Lending Officer ‘Mr. Marquez, Executive Vice President, recently joined EagleBank as the Chief Real Estate Lender. Prior to joining EagleBank, Mr. Marquez established the real estate lending franchise for HSBC for the
Slide 47: Historical Balance Sheet
Historical Balance Sheet
Slide 48: Historical Quarterly Balance Sheet
Historical Quarterly Balance Sheet (4) Please refer to the Non-GAAP reconciliation and foctnotes in the appendices on pages 31-32 4
Slide 49: Historical Income Statement
| Historical Income Statement (Dollar Valuesin Thousands, except per share data) 1 Year Growth 2010 2011 2012 2013 2014 __ Rate ‘Total Interest Income S 96658 $119,124 $141,943 -§ 157,294 $191,873 21.8% Total Interest Expense 19.832 20,077 Lala 123504, 1309s __4.7% Net Interest Income 76,826 99.047
Slide 50: Historical Quarterly Income Statement
Historical Quarterly Income Statement (eller Yasin Thousands, exept pr sar dat) Growth Granth Rate Rate 292m ~ 2920188 Sep2013__Dee2013__Mar2014__Jun2014__Sep2014__Dec2014__Mar201s__Jun2m1s__292014__ 192018, ‘Tot Interest Income S397 S$ 41652 $ AEST] SUT SGI -S SOMES SDS 39M SHH Tat taest Bese Soni
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