Eagle Bancorp, Inc. · NASDAQ:EGBN
Eagle Bancorp — Investor Presentation (March 2020)
52 slides from Eagle Bancorp's investor presentation, Mar 18, 2020
Slide 1: Investor Presentation March 2020
Investor Presentation March 2020 Ticker: EGBN E agle B ank C o r p . co m
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: Company Overview
Company Overview 3 • Eagle Bancorp, Inc. is a highly profitable community bank focused on the Washington, DC metropolitan area • Commercially - oriented business model with deep relationships of loans, core deposits and related products • Streamlined network of 20 branches and 2 lending offices loca
Slide 4: Summary Statistics
Summary Statistics Total Assets $ 9.0 b illi o n Total Loans $ 7.5 billion Total Deposits $ 7.2 billion Shares Outstanding (at close February 28, 2020) Market Capitalization (at close February 28, 2020) 32,955,296 $ 1.23 Billion Institutional Ownership 81 % Member of Russell 2000 yes Member of S&P S
Slide 5: Investment Rationale
Investment Rationale Highly profitable, with balanced financial performance Strategically positioned in the 5th largest regional economy in the U.S. Strong capital ratios NOTE: Financial data at or for the quarter ended December 31, 2019 5
Slide 6: Investment Rationale
Investment Rationale NOTE: Financial data at or for the quarter ended December 31, 2019 6 • Favorable Net Interest Margin | 3.49% • Operating Leverage with streamlined branch system: Efficiency Ratio | 39.71% • Clean Asset Quality: NPAs/Assets | 0.56% ; NCOs/Average Loans | 0.16% • DDAs as a percent
Slide 7: Performance Statistics
Performance Statistics 7 NOTE: (1) Bank Holding Company Performance Report Peer Group represents companies with consolidated assets between $3 billion and $10 billion. (2) Please refer to the Non - GAAP reconciliation and footnotes in the appendices on pages 35 - 40. * Data for 2017Y & 2019Q1 is sho
Slide 8: Experienced Senior Management Team
Experienced Senior Management Team Susan G. Riel CEO & President, Eagle Bancorp & EagleBank 43 years in banking 21 years with EGBN Antonio F. Marquez EVP, Eagle Bancorp; Senior EVP & President of Commercial Banking, EagleBank 34 years in banking 8 years with EGBN Charles D. L e v i ng st o n EVP & C
Slide 9: Board Focused on Vision and Oversight
Board Focused on Vision and Oversight Norman R . Pozez Chair - Board of Directors, Governance & Nominating Committee 11 years with EGBN Kathy A. Raffa Board Member, Chair - Audit Committee 4 years with EGBN Leslie Ludwig Board Member, Chair - Compensation Committee 3 years with EGBN Theresa G. LaPla
Slide 10: EagleBank Locations
2 9 5 4 9 5 95 4 9 5 4 9 5 2 7 0 39 5 66 66 Bethesda Lanham Chevy Chase T w i n b r oo k R oc k v i ll e Shady Grove Rosslyn Ballston Silver Spring M e rr i f i el d Alexandria Fairfax Tysons Corner R e s to n Dulles Town Center C h an t illy HQ RHQ RHQ MON T GOMERY COUNTY PRINCE GEORGE ’S COUNTY FA
Slide 11: Washington, DC Metropolitan Area Deposit Market Share
76 . 4 % Washington, DC Metropolitan Area Local Community June 30, 2018 June 30, 2019 Annual 2019 M a r k e t Deposit Market Share (Dollar values in thousands) B a l a n c e B a l a n c e G r o w t h R a n k B a n k s C o m p a n y N a m e B r a n c h e s 1 Bank of America Corp. 149 2 Capital One Fi
Slide 12: Consistent Balance Sheet Growth
Consistent Balance Sheet Growth Total Assets $9 , 50 0 $9 , 00 0 $8 , 50 0 $8 , 00 0 $7 , 50 0 $7 , 00 0 $6 , 50 0 $6 , 00 0 $5 , 50 0 $5 , 00 0 $4 , 50 0 $4 , 00 0 $3 , 50 0 $3 , 00 0 $2 , 50 0 $2 , 00 0 $1 , 50 0 $1 , 00 0 $500 $0 $8,989 NOTE: Virginia Heritage Bank acquisition closed on October 3
Slide 13: Net Income Trend
$45 , 00 0 $40 , 00 0 Net Income Available to Common SBLF Dividend Net Income Trend $35,456 NOTE: Virginia Heritage Bank acquisition closed on October 31, 2014. *Q4 2017 & Q1 2019 is shown on an adjusted basis. 13 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 14Q4 15Q1 15Q2 15Q3 15Q4 16Q1 1
Slide 14: Earnings Per Share
$ 5 . 0 0 $ 4 . 5 0 $ 4 . 0 0 $ 3 . 5 0 $ 3 . 0 0 $ 2 . 5 0 $ 2 . 0 0 $ 1 . 5 0 $ 1 . 0 0 $ 0 . 5 0 $ 0 . 0 0 2 0 1 4 Y 2 0 1 5 Y 2 0 1 6 Y 2 0 1 7 Y 2 0 1 8 Y 2 0 1 9 Y EPS (Reported) EPS (Operating) Earnings Per Share NOTE: Virginia Heritage Bank acquisition closed on October 31, 2014. EPS (Operat
Slide 15: Tangible Book Value per Share
$14 . 5 6 $18 . 8 3 $21 . 6 1 $24 . 6 7 $29 . 1 7 $32 . 6 7 $ 1 0 . 0 0 $ 5 . 0 0 $ 0 . 0 0 $ 1 5 . 0 0 $ 2 0 . 0 0 $ 2 5 . 0 0 $ 3 0 . 0 0 $ 3 5 . 0 0 2 0 1 4 Y 2 0 1 5 Y 2 0 1 6 Y 2 0 1 7 Y 2 0 1 8 Y 2 0 1 9 Y Tangible Book Value per Share NOTE: Please refer to the Non - GAAP reconciliation and fo
Slide 16: Net Interest Margin
Net Interest Margin NOTE: Bank Holding Company Performance Report Peer Group represents companies with consolidated assets between $3 billion and $10 billion. 4 . 16 % 4 . 15 % 4 . 10 % 4 . 02 % 3 . 91 % 3 . 72 % 3 . 49 % 3 . 48 % 3 . 53 % 3 . 58 % 3 . 54 % 3 . 55 % 3.54% 3.49% 2 . 0 0 % 2 . 5 0 % 3
Slide 17: Yields and Cost of Funds
4.69% 4 . 60 % 4.73% 5.09% 5.21% 5.21% 5.00% 3.93% 4.06% 4.38% 4.54% 4 . 57 % 4.57% 4.64% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 5.50% 2 0 1 5 Y 2 0 1 6 Y 2 0 1 7 Y 2 0 1 8 Y 2 0 1 9 Q 1 2019Q2 2 0 1 9 Q 3 2 0 1 9 Q 4 Yield on Average Earning Assets E G B N Peer Group 0 . 58 % 0 . 99 % 1 . 19 % 1
Slide 18: Moderate Interest Rate Risk Position
Moderate Interest Rate Risk Position • Both assets and liabilities remain short with repricing durations at 20 months on loans and 27 months on deposits • A 100 bps shock increase would increase Net Interest Income by about $16.4 million or 5.1% on a static balance sheet over a 12 month period Book
Slide 19: Consistent Increases in Operating Leverage
$ 9 0 , 0 0 0 $ 8 0 , 0 0 0 $ 7 0 , 0 0 0 $ 6 0 , 0 0 0 $ 5 0 , 0 0 0 $ 4 0 , 0 0 0 $ 3 0 , 0 0 0 $ 2 0 , 0 0 0 $ 1 0 , 0 0 0 $0 Consistent Increases in Operating Leverage Revenue ($000s) Non - Int Expense ($000s) NOTE: Please refer to the Non - GAAP reconciliation and footnotes in the appendices on
Slide 20: Superior Efficiency Ratio
42% 40% 40% 37% 37% 38% 38% 40% 65% 64% 62% 61% 63% 62% 61% 3 5 % 3 0 % 4 0 % 4 5 % 6 0 % 5 5 % 5 0 % 6 5 % 7 5 % 7 0 % 2 0 1 5 Y 2 0 1 6 Y 2 0 1 7 Y 2 0 1 9 Q 2 2 0 1 9 Q 3 2 0 1 9 Q 4 2 0 1 8 Y EGBN Superior Efficiency Ratio refer to the Non - GAAP reconciliation and footnotes in the appendices on
Slide 21: Deposit Composition and Growth
Deposit Composition and Growth • Commercial focus drives growth of Noninterest Bearing Demand accounts • Wholesale Deposits used to enhance cost of funds, not a strategy to replace growth in core deposits (1) Core deposits include CDAR’s and ICS reciprocal deposits. (Dollar Values in Thousands) As o
Slide 22: Detail of Loan Portfolio
Detail of Loan Portfolio • Concentration in quality markets: Washington, DC, Montgomery County, Fairfax County • Held for Sale residential mortgages not included NOTE : Data as of December 31, 2019 33 . 6 % 48 . 9 % 15 . 0 % (Dollar Value in Thousands) County C&I Owner O cc up i e d CRE Income P r o
Slide 23: Credit Quality Trends
Credit Quality Trends 23 (Dollar Values in Thousands) 2015Y 2016Y 2017Y 2018Y 2019Q1 2019Q2 2019 Q 3 2019Q4 Nonperforming Assets: Accruing Loans 90 or More Days Past Due $ - $ - $ - $ - $ - $ - $ 16,528 $ - Nonaccrual 13,239 17,875 13,238 16,277 40 , 261 37,408 41 , 122 48,730 Total Nonperforming Lo
Slide 24: Consistent Asset Quality
Consistent Asset Quality Total Loans ($mms) 0 . 0 % 2 . 0 % 4 . 0 % 6 . 0 % 8 . 0 % 1 0 . 0 % 1 2 . 0 % 1 4 . 0 % 1 6 . 0 % 1 8 . 0 % 2 0 . 0 % $0 $ 1 , 00 0 $ 2 , 00 0 $ 3 , 00 0 $ 4 , 00 0 $ 5 , 00 0 $ 6 , 00 0 $ 7 , 00 0 $ 8 , 00 0 Dec - Mar - Jun - Sep - Dec - Mar - Jun - Sep - Dec - Mar - Jun -
Slide 25: Strength in C&I Lending
Strength in C&I Lending 25 • At 20% of the Loan Portfolio, EagleBank has a much larger focus on C&I Lending than other local peer banks • C&I Loan Portfolio is predominantly variable rate loans • 14% Annual growth rate of Owner Occupied Loans, which are key to small and mid - market relationships •
Slide 26: CRE Risk Management
CRE Risk Management 26 • 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 27: CRE Concentration
CRE Concentration 27 (1) All peer group and other data is from the FR Y - 9C and Bank Holding Company Performance Report. Peer group data is based on the Company’s asset size at the time of reporting. (2) Represents CRE (excluding owner occupied) concentration as a percentage of EGBN consolidated ri
Slide 28: ADC Concentration
ADC Concentration 28 (1) All peer group and other data is from the FR Y - 9C and Bank Holding Company Performance Report. Peer group data is based on the Company’s asset size at the time of reporting. (2) Represents ADC concentration as a percentage of EGBN consolidated risk - based capital. (Dollar
Slide 29: Capital Management
Capital Management 29 • 482,300 shares repurchased in 4th Quarter 2019; Capital impact ($21.5) million • Dividend of $0.22 per share declared in 2 nd , 3 rd & 4th Quarter of 2019 • $150 million of 10 Year, 5 Year non - call, 5.00% Subordinated Notes sold in July 2016 • $100 million of Common Equity
Slide 30: Key Success Factors
Key Success Factors 30 • 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 – Portfolio is balanced among C&I, CRE and Con
Slide 31: Key Success Factors (continued)
Key Success factors (continued) 31 • Disciplined ALCO process • Maintained focus on areas of strength – Concentration on core geographic markets and products • Proper infrastructure to support the increased volume of business and regulation • Comprehensive Management and Board level reporting • Huma
Slide 32: EagleBank Growth Strategy
EagleBank Growth Strategy 32 • Profitability – Pricing discipline to sustain Net Interest Margin – Prudent expense management with streamlined branch system to maintain Efficiency Ratio • Sustain Credit Quality – Maintain balanced portfolio mix: C&I, CRE and Construction – Enhanced monitoring of ind
Slide 33: EGBN Total Return Performance
EGBN Total Return Performance SOURCE: SNL Financial, Chart and calculations as of close of trading on February 28, 2020 Total Return Performance 1 Year 3 Year 5 Year EGBN (36.8%) (39.9%) 0.8% NASDAQ Bank Stock Index (13.9%) (14.8%) 26.5% NASDAQ Stock Market Index 13.7% 47.1% 72.6% S & P 500 Index 6.
Slide 34: Appendices
Appendices QEAGLE BANCORBINC. 34
Slide 35: Non-GAAP Reconciliation
Non - GAAP Reconciliation GAAP Reconciliation (Unaudited) (dollars in thousands except per share data) March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 Common shareholders' equity $ 1,148,488 $ 1,184,582 $ 1,184,594 $ 1,190,681 Less: Intangible assets (105,466) (105,219) (104,915) (
Slide 36: Non-GAAP Reconciliation
Non - GAAP Reconciliation * Data for 2017 is shown on an operating basis. GAAP Reconciliation (Unaudited) (dollars in thousands except per share data) December 31, 2015 December 31, 2016 December 31, 2017* December 31, 2018 December 31, 2019 Common shareholders' equity $ 738,601 $ 842,799 $ 965,026
Slide 37: Non-GAAP Reconciliation
Non - GAAP Reconciliation Eagle Bancorp, Inc. GAAP Reconciliation (Unaudited) (dollars in thousands except per share data) Assets Deferred income taxes Total Assets Shareholders' Equity Retained earnings 431 , 54 4 14,588 446 , 13 2 Total Shareholders' Equity 950 , 43 8 14,588 965 , 02 6 Total Liabi
Slide 38: Non-GAAP Reconciliation
Non - GAAP Reconciliation Eagle Bancorp, Inc. GAAP Reconciliation (Unaudited) (dollars in thousands except per share data) Three M on ths Ended March 31 , 2 019 GAAP Change N on - G AA P Noninterest Expense Salaries and employee benefits 23 , 64 4 ( 6 , 153 ) 17 , 49 1 Total noninterest expense 38 ,
Slide 39: Non-GAAP Reconciliation
Non - GAAP Reconciliation (4) Nonperforming loans at September 30, 2019, includes a $16.5 million loan that was brought current shortly after quarter end. GAAP Reconciliation (Unaudited) (dollars in thousands except per share data) Three Months Ended Nine Months Ended Twelve Months Ended Three Month
Slide 40: Non-GAAP Reconciliation
Non - GAAP Reconciliation 40 ( 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 ba
Slide 41: Market Information – Washington, DC MSA
Market Information – Washington, DC MSA 41 • Population 6.2 Million – 6th largest market in the U.S. 3.4 Million • Employment – 52,000 new jobs created in 12 months ended October, 2019 – Employment growth driven by private sector, over 222,000 net new private sector jobs created over last five years
Slide 42: Greater Washington Economy
Greater Washington Economy Total Federal Spending = 30.9% of GRP GRP Contribution by Sub - market Education & Health Care 5.8% O t h e r 1.5% Non - Local Business 15.5% 2.7% A ss o c i a t i o n s 1.8% International Hospitality 3 . 8 % Other Federal 16 . 8 % Federal Procurement 14.1% Local Business
Slide 43: Loan Portfolio and Growth
Loan Portfolio and Growth (Dollar Values in Thousands) Annual Growth Rate As of December 31, 2018 As of September 30, 2019 As of December 31, 2019 Loan Type B a l a n ce % of Total Balance % of Total B a l a n ce % of Total % Commercial and Industrial $ 1,553,111 22 . 2% $ 1,466,862 19 . 4% $ 1,545,
Slide 44: Geographic Detail – Income Producing CRE
Geographic Detail – Income Producing CRE • Focus in core sub - markets: Washington, DC, Montgomery County, Fairfax County NOTE: Data as of December 31, 2019 (Dollar Value in Thousands County ) O ff i c e / C ondo Hotel Multi - F a mil y M i xe d Use R e d e v e l. / Retail Industrial S i ng l e & 1
Slide 45: Geographic Detail – Construction
Geographic Detail – Construction 45 • Focus in core sub - markets: Washington, DC, Montgomery County, Fairfax County • Recognized expertise in Single Family and Condo construction lending • Portfolio is diversified among collateral types NOTE: Data as of December 31, 2019 (Dollar Value in Thousands
Slide 46: Conservative Securities Portfolio
Conservative Securities Portfolio (Dollar Values in Thousands) US Government Agency Securities $180,228 $621 $1 , 05 5 $179,794 21 . 5 % Mortgage Backed Securites - GSEs 541,490 4 , 33 7 1 , 97 5 543 , 85 2 64 . 4 % Municipal Bonds 71 , 90 2 2 , 03 4 5 73 , 93 1 8 . 6 % Corporate Bonds 10 , 53 0 203
Slide 47: Nationally Recognized Financial Performance
Nationally Recognized Financial Performance • “Sm - All Stars” Designation 2011, 2013, 2014, 2015, 2016 & 2017 Independent Community Bankers of America • Member of KBW Bank Honor Roll 2010 - 2018 47 • Named as one of Top 100 Performing Community Banks 2018 • Community Bankers Cup Award 2012 - 2018
Slide 48: Highly Regarded by Bank Rating Firms
Highly Regarded by Bank Rating Firms FIRM BANK RATING A - 300/300 B AUER F INANCIAL , I NC Green - *** 48
Slide 49: Experienced Management Team
Experienced Management Team 49 Susan G. Riel, Chief Executive Officer & President Eagle Bancorp & EagleBank Ms. Riel, President - Chief Executive Officer of the Bank and Bancorp, and formerly Chief Operating Officer. Ms. Riel has been with the bank for 20 years. She previously served as Executive Vi
Slide 50: Experienced Management Team
Experienced Management Team 50 Lindsey S. Rheaume, EVP, Chief C&I Lending Officer Mr. Rheaume joined EagleBank as Chief C&I Lending Officer in December 2014 and has over 33 years of commercial lending, credit risk and managerial experience in the financial industry. Most recently, he served as relat
Slide 51: Historical Balance Sheet
Historical Balance Sheet 51 * Data for 2017 is shown on an operating basis. ( D o ll a r V a l ue s i n T hou s and s ) 2015Y Assets Cash and Equivalents $298,363 2016Y $368 , 16 3 2017 Y * $190 , 47 3 2018Y $321 , 86 4 2019Y $241 , 97 3 Rate (1.1%) Securities Available for Sale 504 , 77 2 559 , 70
Slide 52: Historical Income Statement
Historical Income Statement (Dollar Values in Thousands, except per share data) 5 Year C o m poun d Growth 2015Y 2016Y 2017Y* 2018Y 2019Y Rate Total Interest Income $ 253,180 $ 285,805 $ 324,034 $ 393,286 $ 429,630 17.5% Total Interest Expense 19 , 23 8 27,641 40,147 76,293 105,585 51.8% Net Interes