Eagle Bancorp, Inc. · NASDAQ:EGBN
Eagle Bancorp — Investor Presentation (November 2020)
41 slides from Eagle Bancorp's investor presentation, Nov 10, 2020
Slide 1: Investor Presentation
Investor Presentation Ticker: EGBN EagleBankCorp.com November 2020
Slide 2: Forward Looking Statements
Forward Looking Statements 2 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
Slide 3: Experienced Senior Management Team
Experienced Senior Management Team 3 Susan G. Riel CEO & President, Eagle Bancorp & EagleBank 44 years in banking 22 years with EGBN Charles D. Levingston EVP & Chief Financial Officer, Eagle Bancorp & EagleBank 20 years in banking 9 years with EGBN Executive Vice President and Chief Financial Offic
Slide 4: Experienced Senior Management Team
Experienced Senior Management Team 4 Sam Pepper EVP & Chief Operations Officer, Eagle Bancorp & EagleBank 38 years in financial services 0.3 years with EGBN Joined EagleBank in June 2020 as the Chief Operations Officer. Prior to this, he was President and CEO of UFS Bancorp & Unibank for Savings, an
Slide 5: Experienced Senior Management Team
Experienced Senior Management Team 5 Lindsey S. Rheaume EVP, Eagle Bancorp; EVP & Chief Commercial & Industrial Lending Officer, EagleBank 35 years in banking 6 years with EGBN Antonio F. Marquez EVP, Eagle Bancorp; Senior EVP & President of Commercial Banking, EagleBank 35 years in banking 9 years
Slide 6: Board Focused on Vision and Oversight
Board Focused on Vision and Oversight 6 Norman R. Pozez Executive Chair - Board of Directors 11 years with EGBN Kathy A. Raffa Director Chair - Audit Committee 4 years with EGBN Leslie Ludwig Director Chair - Compensation Committee 3 years with EGBN Theresa G. LaPlaca Chair - Risk Committee 1 years
Slide 7: Summary Statistics
Summary Statistics 7 Total Assets $ 10.1 billion Total Loans $ 7 . 9 billion Total Deposits $ 8 .2 billion Tangible Common Equity $ 1 . 1 billion Shares Outstanding (at close September 30, 2020) 32,228,636 Market Capitalization (at close November 6, 2020) $ 944 million Tangible Book Value per Common
Slide 8: Investment Rationale
Investment Rationale 8 Solid capitalization and conservative capital management Well managed asset quality Above average peer returns Superior efficiency with limited branch network Recognized expertise in CRE, C&I and residential mortgage lending Strategically positioned in one of the most attracti
Slide 9: Nationally Recognized Financial Performance
Nationally Recognized Financial Performance 9 “Sm - All Stars” Designation 2011, 2013, 2014, 2015, 2016 & 2017 Member of KBW Bank Honor Roll 2010 - 2018 Named as one of Top 100 Performing Community Banks 2018 Community Bankers Cup Award 2012 - 2019 Highly Regarded by Bank Rating Firms A - 300/300 B
Slide 10: Key Financial Metrics – 3rd Quarter
Key Financial Metrics – 3 rd Quarter 10 • Strong Capital Ratios: – Tangible Common Equity (1) | 11.18% – Tier 1 Leverage | 10.82% – Total Risk Based Capital | 16.72% • Strong Reserves & Clean Asset Quality: – ACL/Loans | 1.40% – NPAs/Assets | 0.62% – NCOs/Average Loans | 0.26% • Above Peer Returns:
Slide 11: Attractive & Resilient Market
Attractive & Resilient Market 11 • Washington DC MSA – 6th largest market in the U.S. – Population of 6 million with a projected annual growth rate of 4.05% – Workforce of 3.3 million – Median household income of $109,000 vs. US median of $68,000 – Unemployment of 6.7% in September down from 6.9% in
Slide 12: Limited Network of Offices
295 495 95 495 495 270 395 66 66 Bethesda Lanham Chevy Chase Twinbrook Rockville Shady Grove Rosslyn Ballston Silver Spring Park Potomac Merrifield Alexandria Fairfax Tysons Corner Reston Dulles Town Center Chantilly HQ RHQ RHQ MONTGOMERY COUNTY PRINCE GEORGE’S COUNTY FAIRFAX COUNTY ARLINGTON COUNTY
Slide 13: Local Leader in Deposit Share
Local Leader in Deposit Share 13 NOTE: Market includes Maryland counties of Montgomery and Prince George’s; Virginia counties of Alexandria, Arlington, Fairfax, Fai rfa x City, Falls Church, Loudoun, Manassas, Manassas Park and Prince William; and the District of Columbia. Data excludes Morgan Stanl
Slide 14: COVID-Response
COVID - 19 Response 14 • Transitioned team members to remote work environment where possible • Initiated COVID - 19 safety protocols and enhanced safety measures • Supplied PPE to all staff • Enhanced analysis of deposit client profitability • Actively managing the excess liquidity • Further opportu
Slide 15: Meaningful Size in Major Market
$456 $4,998 $5,678 $6,412 $6,991 $7,546 $7,880 2015Y 2016Y 2017Y 2018Y 2019Y 2020Q3 (in millions) Loans HFI Loans PPP Loans $5,158 $5,716 $5,854 $6,974 $7,224 $8,179 2015Y 2016Y 2017Y 2018Y 2019Y 2020Q3 (in millions) Deposits $6,076 $6,890 $7,494 $8,389 $8,989 $10,106 2015Y 2016Y 2017Y* 2018Y 2019Y
Slide 16: Solid Capitalization
Solid Capitalization 16 NOTE: Peers are depository institutions with assets from $7 - $15 billion. Source: S&P Global Market Intelligence. *Please refer to the Non - GAAP reconciliation and footnotes in the appendices. • Capitalization ‒ Tangible common equity levels above peers ‒ Strong earnings co
Slide 17: Superior Efficiency
Superior Efficiency 17 • Efficiency much better than peers ‒ Focus on higher value business relationships ‒ Branches focused on commercial sub - markets ‒ A verage deposits per branch of $409 million • Expenses ‒ Disciplined expense management ‒ YTD expenses include investments in infrastructure/per
Slide 18: Strong Returns
Strong Returns 18 • 3 rd quarter of 2020 was record level of net income of $41.3 million ‒ Earnings continue to supplement capital • Returns on assets and tangible common equity (non - GAAP) ‒ ROAA above peer median ‒ ROATCE above peer median with higher level of capitalization ‒ Stable PPNR returns
Slide 19: Building Tangible Book Value
$18.83 $21.61 $24.67 $29.17 $32.67 $34.70 2015Y 2016Y 2017Y 2018Y 2019Y 2020Q3 Tangible Book Value Per Share Building Tangible Book Value 19 NOTE: Quarterly dividend began in the 2 nd quarter of 2020 at $0.22 per share. *Data for 2017 is shown on an operating basis. Please refer to the Non - GAAP re
Slide 20: Clean Asset Quality
CECL Adopted 1.05% 1.04% 1.01% 1.00% 0.98% 1.23% 1.36% 1.40% 2015Y 2016Y 2017Y 2018Y 2019Y 2020Q1 2020Q2 2020Q3 Allowance for Credit Losses / Loans CECL Adopted Clean Asset Quality 20 NOTE: CECL adoption on January 1, 2020 led to an initial adjustment to the allowance for credit losses of $10.6 mill
Slide 21: Margin
21 Margin • Margin decline driven by ‒ PPP loans of $456 million with 1% coupon ‒ Deposit inflows which changed mix of earnings assets, coupled with a lower demand for loans • Average loans to average assets ‒ Moved from low - to - mid - 80s% to mid - 70s% with deposit inflows and lower demand for l
Slide 22: Yields and Costs of Funds
22 Yields and Costs of Funds • Yield on Loans ‒ PPP loans of $456 million at 1% coupon ‒ Reduced focus on higher yielding construction lending ‒ Competitive refinancing pressure when hitting rate floors • Cost of funds ‒ Room to lower deposit costs as higher priced CD funding rolls off ‒ Pricing com
Slide 23: Securities Portfolio
Securities Portfolio 23 $ in thousands Gross Gross Allowance Estimated Amrt. Cost Amortized Unrealized Unrealized for Credit Fair % of Total Security Type Cost Gain Losses Losses Value Securities US Government Agency Securities $130,313 $1,638 $665 $0 $131,286 13.6% Mortgage Backed Securites - GSEs
Slide 24: Deposits
Deposits 24 *Core deposits include CDAR’s and ICS reciprocal deposits. • Total Deposits $8.2 billion • Deposits YTD through 9/30/2020 ‒ Up $954 million ‒ $847 million flowed into money market and core savings ‒ $269 million of CDs rolled off • Deposit philosophy ‒ Commercial focus drives growth of N
Slide 25: Fee Income
Fee Income 25 • Mortgages ‒ Originations YTD through end of the 3 rd quarter were almost $1.1 billion • FHA Multi - Family ‒ 5 dedicated FTE’s ‒ Group started in 2016 • Other ‒ SBA ‒ Treasury and deposit services *1 st quarter of 2020 includes hedge and mark to market losses of $2.6 million $193 $30
Slide 26: Loans
Loans 26 • Loans of $7.9 billion • At 32% of the Loan Portfolio a much larger focus on C&I/Owner Occupied CRE than other local banks • C&I Loan Portfolio is predominantly variable rate loans • Owner Occupied Loans are key to small and mid - market relationships • DDA Operating Accounts of C&I relati
Slide 27: CRE Risk Management
CRE Risk Management 27 • Executive & Board Level Oversight of Approval Process • Disciplined Underwriting • Proactive Portfolio Management • Quarterly Stress Testing of CRE Portfolio • Quarterly Independent Credit Review • Dedicated Special Assets Team
Slide 28: Loan Portfolio - Details
Loan Portfolio - Details 28 NOTE : Data as of September 30, 2020 $ in millions Location C&I Owner Occupied CRE Income Producing CRE Owner Occupied Const. CRE Construction Land Residential Mortgage Consumer PPP Total % of Total District of Columbia $431.4 $217.6 $1,133.5 $48.3 $518.7 $24.6 $33.6 $16.
Slide 29: Loan Deferral Trend & Philosophy
Loan Deferral Trend & Philosophy 29 • 1 st deferral ‒ Proactively reached out to clients ‒ 90 day initial deferrals ‒ Some I/O, some P&I • 2 nd deferral ‒ Requires a path to full performance ‒ Requires a credit enhancement such as principal curtailment, additional collateral, increased guarantor sup
Slide 30: Loan Deferral Changes
Loan Deferral Changes 30 $ in millions Total Total Total Total Deferred % of Total Deferred % of Total Deferred % of Loan Type Loans Loans Loans Loans Loans Loans Loans Loans Loans Commercial and Industrial $1,607 $270 3.4% $1,525 $110 1.4% $1,554 $107 1.3% Commercial Real Estate Owner Occupied $964
Slide 31: Loan Deferral – Summary & Update
Loan Deferral – Summary & Update 31 Dollars in millions. Industry/ Collateral Type Total Loans Deferred Notes Deferred Interest Only Deferred Payment Total Deferred Loans % Loans Deferred Total Deferred Loans Secured by RE Wtd Avg LTV of RE Collateral Average Loan Size Hotels $532 17 $200 $187 $387
Slide 32: ADC and CRE Concentration
120% 96% 125% 125% 118% 105% 106% 100% 2015Y 2016Y 2017Y 2018Y 2019Y 2020Q1 2020Q2 2020Q3 ADC Concentration* ADC & CRE Concentration 32 *ADC and CRE concentration ratios represents concentration as a percentage of consolidated risk - based capital. **CRE excludes owner occupied. 394% 319% 345% 325%
Slide 33: Appendices
Appendices "(EAGLE BANCORP INC. 33
Slide 34: Performance Statistics Summary
Performance Statistics Summary 34 NOTE: The Peer group was changed from the FFIEC’s BHC peer report group “$3 - $10 billion” as EGBN assets are now approximately $1 0 billion the group no longer provides good comparable financial data. The next larger group is for BHC’s with assets of $10 billion an
Slide 35: Historical Balance Sheet
Historical Balance Sheet 35 *Data for 2017 is shown on an operating basis. **YTD is as of September 30, 2020. (Dollar Values in Thousands) 2015Y 2016Y 2017Y* 2018Y 2019Y 5 Year Compound Growth Rate 2020YTD** Assets Cash and Equivalents $298,363 $368,163 $190,473 $321,864 $241,973 (1.1%) $857,108 Sec
Slide 36: Historical Income Statement
Historical Income Statement 36 *Data for 2017 is shown on an operating basis. Please refer to the Non - GAAP reconciliation and footnotes in the appendices.. **YTD is for the nine months ended September 30, 2020. ($ Values in Thousands, except per share data) 2015Y 2016Y 2017Y* 2018Y 2019Y 5 Year Co
Slide 37: Loan Portfolio – Income Producing CRE
Loan Portfolio – Income Producing CRE 37 NOTE: Data as of September 30, 2020 $ in millions Office Family & Hotel/ Mixed Multi- & Office Res. % of Location Motel Industrial Use Family Condo Retail Condo Other Total Total District of Columbia $189.0 $15.7 $353.3 $197.0 $118.1 $74.4 $87.5 $98.6 $1,133.
Slide 38: Loan Portfolio – CRE Construction
Loan Portfolio – CRE Construction 38 NOTE: Data as of September 30, 2020 $ in millions Office Single & Multi- & Office Hotel/ Mixed Residential % of Location 1-4 Family Family Condo Motel Use Retail Condo Other Total Total District of Columbia $45.8 $210.3 $76.3 $0.0 $113.8 $2.1 $56.6 $13.8 $518.7 6
Slide 39: Non-GAAP Reconciliation (unaudited)
39 Non - GAAP Reconciliation (unaudited) *Data for 2017 is shown on an operating basis. Please refer to the Non - GAAP reconciliation and footnotes in the appendices.. ($ in thousands except per share data) 2015Y 2016Y 2017Y* 2018Y 2019Y 2020Q1 2020Q2 2020Q3 Common shareholders' equity $738,601 $842
Slide 40: Non-GAAP Reconciliation (unaudited)
Non - GAAP Reconciliation (unaudited) 40 ($ in thousands except per share data) GAAP Change Non-GAAP Income Statements Income tax expense $85,504 ($14,588) $70,916 Net income $100,232 $14,588 $114,820 Performance Ratios (annualized) Return on average assets 1.41% 1.62% Earnings Per Common Share Basi
Slide 41: Non-GAAP Reconciliation (unaudited)
41 Non - GAAP Reconciliation (unaudited) 1 Tangible common equity to tangible assets (the "tangible common equity ratio"), tangible book value per common share, and the a nnualized return on average tangible common equity are non - GAAP financial measures derived from GAAP based amounts. The Company
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