Eagle Bancorp, Inc. · NASDAQ:EGBN
Eagle Bancorp — Keefe, Bruyette & Woods Winter Financial Symposium 2016
51 slides from Eagle Bancorp's conference presentation, Feb 10, 2016
Slide 1: Keefe, Bruyette & Woods Winter Financial Symposium
” @EAGLE BANCORP INC. Keefe, Bruyette & Woods Winter Financial Symposium February 11-12, 2016 Ticker: EGBN www. = com
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 21 branches = Commercially-oriented business model with deep relationships of loans, core deposits and related products = #1 in depos
Slide 4: Investment Highlights
Investment Highlights = Focused on Profitability and Balanced Financial Performance = Strong Net Interest Margin = 4.38% = Clean Asset Quality: NPAs/Assets = 0.31% = Low Charge-Off History: NCOs/Average Loans = 0.18% * 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 29 18 Robert P. Pincus Viee Chairman, 43 8g Susan G. Riel Sr. EVP & COO - FagkBank 40 18 James H. Langmead EVP & Chief Financial Officer - Eagle Bancorp & EagkBank 45 ul L
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 January 29, 2016) Market Capitalization (at close January 29, 2016): Insider Ownership: Institutional Ownership: Member of Russell 2000 $5.0 bill
Slide 7: EagleBank Branch Locations
EagleBank Branch Locations Loudoun County Reston < Washington, DC » Tyson's Comer Fairfax County NOTE: Branch Totals as of December 31, 2015, 6
Slide 8: Deposit Market Share
Deposit Market Share ‘eal June 30, Tune 30, 2015 Community 2014 2015 Annual Markat fark Banks _Céimpany Nant Branches Balance Balance Growth Share 1 Wels Fargo & co. 14724030368 ©—=«29950359 hem 183% 2 Bank of Amerlea Corp. 14723315620 «27,684S1 165K «166% 3 capita One Fnancil Cor. 161 -21809.960«20
Slide 9: Performance vs. Peer Group
Performance vs. Peer Group Peer Group EGBN a) Key Ratios (at or for the quarter ended December 31) 4Q2013 4Q2014 (3) _4Q2015 4Q2015 © Net Interest Margin 4.40% 442% 4.38% 3.71% © Efficiency Ratio 50.03% 45.71% 41.47% 55.52% = NPAs +90 Days Past Due/Total Assets 0.90% 0.68%, 0.31% 0.45% = Allowance L
Slide 10: Consistent Balance Sheet Growth
Milions of Dollars Consistent Balance Sheet Growth $6,5009 Total Assets HOQH QE Qe Qs" NQH 12QI 1292123 12Q413QI13Q? 13Q3_ BOA MI 14Q2 Qs MQ! 15QI 15Q2 1593. 15QH (Q) Highly Valued Per Group shown on page 30. Compound anual growth rate calculated off Peer Group median valves forthe periods shown, 9
Slide 11: Consistent Net Income Growth
| Consistent Net Income Growth Net Income Available to Common Bl TARP Dividend O SBLF Dividend 22.8 $23,000 - $15,000: $14,000: 312,000: $11,000; $10,000: $9,000: $8,000 $7,000 $6,000 $5,000: 4,000 ‘Thousmnds of Dollars WOQH QI G2 11Q3 NE 12Q1 12Qz 123-291 BEI BQ? 13Qs_ BE! MOL MQ MQW Me! 1sQ1_15Q_1
Slide 12: Net Interest Margin
‘Net Interest Margin 5.00% 50% | 442% 441% 4308 433% 4.00% 3.73% wi 3.72% 3.50% 3.00% 2.50% 2.00% +— — ——4 — 201404 2015Q1 2015Q2 201598 201504 MEGBN Peer Group aud Peer Geoup shown on page 30. Represent Peer Group median values fe the
Slide 13: Yields and Cost of Funds
Yields and Cost of Funds Yield on Average Earning Assets 5.40% Yield on Loans 47% ar awe 5.29% 5.29% . 5.19% 5.20% 0696 101% sss 300. S700 4.82% “i 3.50% 4.80% 13% 4.62% % 3.00% 4.60% Ko 2.50% 2.00% 4.20% : 2014Q4 2015QI 2015Q2 -2015Q3 20154 2014Q4—-2015QI_ 20152-20153 MEGBN Peer Group MEGBN Peer Gr
Slide 14: Earnings per Share
Earnings per Share $0.70 $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 $0.00 $0.56 WEPS (Reported) EPS (Operating) 0.61 CAGR= 32.65% at $0.63 $0.65 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4
Slide 15: Tangible Book Value per Share
Tangible Book Value per Share 19.33% CAGR= $17.46 $20.00 $18.00 $1682 $16.00 $14.56 $14.00 $12.00 | $10.00 $8.00 $6.00 $4.00 $2.00 $0.00 $18.10 eles 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 NOTE: Please refer tothe Non-GAAP reconciliation and footnetsin the appendiceson pages 3-33, 4
Slide 16: Consistent Increases in Operating Leverage
Consistent Increases in Operating Leverage $70,000 $60,000 6% n $40,000 $30,000 $20,000 neni ee $10,000 $0 + SDD MS ’ LE EPE EPP EE ERE SORE CPOE ‘#Revenue ($0003) l=Non-Int Expense ($0005) NOTE: Please refer tothe Non-GAAP Data for Q2, Q3, Q42014 are shown oan appendices on pages 31-33.
Slide 17: Consistently Improving Efficiency Ratio
Consistently Improving Efficiency Ratio 65% 60% 4 55% 50% 5% Bll 56% 56% 55% ij 54% 46% 45% 42% 42% 1% 40% 201494 2015Q1 2015Q2 201593 2015Q4 MEGBN Peer Group Note: Highly Valued Peer Group shown on page 30. Represent Peer Group median values forthe ptiods shown. (1) See Non-GAAP reconciliation on p
Slide 18: Moderate Interest Rate Risk Position
Moderate Interest Rate Risk Position Interest Rate Risk Indicators __....and Trends Tmestments Loans Deposits Borrowings ‘Net Interest Income - Flat balance Sheet Net Interest Income - + 100 basis point shock Percentage Change Net Interest Income - + 200 basis point shock Percentage Change Net Inter
Slide 19: Deposit Composition and Growth
‘Deposit Composition and Growth (Sellas Vatus in Fhowsands) Deposit Type Noninterest Bearing Interest Bearing Transaction. Core Savings & Money Market (1) Core CD's (1) ‘Wholesale Money Market ‘Wholesale CD's ‘Total Deposits %of %of %of Balance ‘Total Balance ‘Total Balance ‘Total % $1,175,799 27.3%
Slide 20: Balanced Loan and Deposit Growth
Balanced Loan and Deposit Growth $6.0 $5.0 $4.0 $3.0 $ in Billions $2.0 $10 $0.0 - I ae ne Se ee a Eo oR oR Ss PF GO WT gph ge AA IH ge ge Qa HT ge” ge GOT WHT enh” ge? Total Loans _® Total Deposits
Slide 21: Detail of Loan Portfolio
Detail of Loan Portfolio Maryland Prince George's «66,973 51,142 7,782.«(174,597 «32,048 9.038 2442 2,309 228 346,559 6.9% Other MD 58,498 45,394 16,499 380,346 102,959 26,402 10,642 6,350 285 647,375 13.09 Virginia Loudoun 34923 45,72 = 19.915 13,949 783 2,387 3,423, 235 121,407 2.4% Prince Wiliam
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 Nomacerual ‘Total Nonperforming Loans (NPLs) Other Real Estate Owned (OREO) ‘Total Nonperforming Assets Performing Restructured Loans (TDRs) NPAs/Assets NPAs+IDRs/Assets Reserves Re
Slide 24: Consistent Asset Quality
Consistent Asset Quali Total Loans (Smms) ES) sm a Raa uBR ue HH imc Las(6] MASS) a 8 8 Sep De Mie ar Se Dae ee Sp Oe 8 2 (Dollar Values in Thousands) 2010 201 2012 2013 2014 2015 Income Producing CRE 8276189 9380,756 $1369 $452,063 $1,367,241 $685,969 ‘Owner Occupied CRE Construction and Land ‘Comm
Slide 25: Capital Strength
Capital Strength @ollars Valuesin Thousands) ‘Total Assets Total Stockholders Equity ‘Total Common Stockholders Equity Tier 1 Leverage Ratio Tier 1 Risk Based Capital Ratio Total Risk Based Capital Ratio Common Equity Tier 1 (CETD Ratio ‘Tangible Common Equity Ratio (1) S 4,169,181 S s s 442,614 S 3
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 Profitability * Pricing discipline to sustain Net Interest Margin » Diligent expense control to maintain Efficiency Ratio Maintain Credit Quality * Enhanced monitoring of portfolio * Expanded stress testing Emphasis on Organic Growth * Only 3.0% deposit market share in DC M
Slide 29: EGBN Stock Price Performance
‘EGBN Stock Price Performance 450.00, Total Return Performance —#-Eagle Bancorp, ine. -@- NASDAQ Bank Index 350.00 | -m™-NASDAQ Stock Market Index - (U.S. Companies) a S&P 500 300.00, 250.00 200.00 150.00 100,00 50.00 1/292011 1/29/2012 1/29/2013 17292014 1/292015 1/29/2016 Stock Price Performance 1
Slide 30: Appendices
| Appendices
Slide 31: Highly Valued Peer Group
Highly Valued Peer Group NOTE: Per rap neues al pubes Nand ih 2 bilon 87 ilin natal de nt 204 of ng bok rae ihe, Piquer err UeLTM 3 used when current dat asses ae defined loans real ette ovned assets asa pecent of total ase. c SOURCE: SNL Financial
Slide 32: Non-GAAP Reconciliation
Non-GAAP Reconciliation econo (Ort (Gots athonsands exept pe eae dt) Netincne te ae Fy aT ‘Agate tone income Merereted opens opertinael coo z = z ‘etincne me com sharers : sou 5 use ‘Adwrtmets to netincome velbeto conmonshrhadets Meermisled opener vel an ‘openting canines z mane z rar ‘ring pr veahe
Slide 33: Non-GAAP Reconciliation
Non-GAAP Reconciliation GAAP Reconciliation (Unaudited) (dollars in thousands except per share data) ‘Twelve Months Ended ‘Twelve Months Ended December 31,2015 December 31,2014 Common shareholders’ equity $ 738,601 $ 548,859 Less: Intangible assets (108,542) (109,908) Tangible common equity $ 630,05
Slide 34: Non-GAAP Reconciliation Footnotes
Non-GAAP Reconciliation Footnotes (1) The reported figure includes the effect of $4.7 million and $3.2 million of merger related expenses ($3.5 million and $2.2 million net of tax) for the twelve and three months ended December 31, 2014. As the magnitude of the merger expenses distorts the operation
Slide 35: Market Information —Washington, DC MSA
Market Information —Washington, DC MSA = Population a Sth largest market in the U.S. = Employment a 68,500 new jobs created in last year 6.2 Million 3.2 Million a Employment growth driven by private sector, over 295,000 new private sector jobs created over last five years a Unemployment rate of 4.1%
Slide 36: 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 37: Loan Portfolio and Growth
Loan Portfolio and Growth (Delton Vats is Fhawsends) Loan Type Baknee_ _% of Total Balinee_ _% of Total Baknee_ _% of Total Commercial and Industrial $916,226 21.2% — $1,007,659 21.1% $1,052,257 21.1% 14.8% Owner Occupied 461,581 10.7% 489,657 498,102 10.0% 7.9% Owner Occupied-Const. 58,032 B 60,487
Slide 38: Geographic Detail - Income Producing CRE
Geographic Detail - Income Producing CRE (Boller Values in Thousends) Single Redevel/ ——_Offiel Mixed cory Mali County Retail Condo We Hotel Family Family Industrial Other TOTAL _% of Total Maryland Montgomery SWS $072—SHS 4 S261 604 sto $30,946 $199,991 Pince George’ 42M 90 ssi 20,81 19739 11278 28
Slide 39: Geographic Detail — Construction
Geographic Detail — Construction Maryland Prince George's 4334 ° ° ° 826 Sen 0 13677 3208 «3.7% Other MD 503045863 0 4,130 1,618 2m. ° 6568 10298 120% Virginia Loudoun 13 0 13251 ° 0 ° 575 ° 13,919 Prince William 1,805 ° 2303 ° ° ° ° ° 4198 Other VA uz 379 18388 ° 304 ° 1.068 8 25,680 Other TSA 1,52
Slide 40: Loan Portfolio by Risk Rating
Loan Portfolio by Risk Rating (Dolla Values in Thousan 1000- Prime 2000- Hscellent 270580 63% 3000- Good 1,557,055 361% 4000- Acceptable 14386 39.3% 5000- Acceptable with Risk 65523 15.6 ‘600- Watch 46088 1.1% 7000 - Special Mention 18306 a. ‘8000-- Substandard 4508 11% 31516 06% ‘9000 - Doubtful a
Slide 41: Conservative Securities Portfolio
‘Conservative Securities Portfolio US Government Agency Securities $56,775 samt S277 $56975 Mortgage Backed Securites - GSEs 209,700 3160 207,241 Municipal Bonds Anat 3 nis3st ‘Comporate Bonds ‘ 152 14938 ‘Other Equity Investments 27 234 Total Securities Se Te ESAS) US Govemment Agency Securities $6
Slide 42: Nationally Recognized Financial Performance
‘Nationally Recognized Financial Performance = “Top Investment Idea” Recommendation 2012 SANDLER O'NEILL + PARTNERS = “Sm-All Stars” Designation 2011, 2013, 2014 & 2015 z = Designated as a “Challenger” Bank 2015 mis ® Honor Roll of Community Banks 2010-2013 Independent Community = Ronald D. Paul nam
Slide 43: Highly Regarded by Bank Rating Firms
‘Highly Regarded by Bank Rating Firms FIRM BANK RATING KBRA A- ==IDC 278/300 Analyze the Future BAUERFINANCIAL, INC Sotobotok
Slide 44: 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 45: 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 46: Experienced Management Team
Experienced Management Team Charles C. Brockett, EVP & Director of Operations Mr. 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 Director. Prior
Slide 47: 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 48: Historical Balance Sheet
Historical Balance Sheet 47
Slide 49: Historical Quarterly Balance Sheet
Historical Quarterly Balance Sheet (1) Please refer to the Non-GAAP recontiliation and foctnotes in the appendices on pages 31-33, 48
Slide 50: Historical Income Statement
| Historical Income Statement (Dollar Values n Thousands, except per share data) sYear Compound 1 Year Growth Growth 2011 2012 2013 2014 2015 __Rate Rate ‘Total Interest Incorne S$ 119,124 $141,983 $ 157294 $191,573 $253,180, ‘Total terest Expense 20077 Lala 12,504, 13.095, 19.238 [Net Interest Inco
Slide 51: Historical Quarterly Income Statement
| Historical (oller ess Thousand, excep per sar dat) “Toa terest nce ‘ToalInest Bese Nel terest cone Lom Lose Provision Savice Chanson Deposits Other Novintrs nee Total Nointeret Ineo Sais and Eployce Bens Premises an Equipment Expenses Marketingand Advetiing Daa Prcesing aga, Accountaigand Prosi Pe
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