Eagle Bancorp, Inc. · NASDAQ:EGBN
Eagle Bancorp — Investor Presentation (November 2021)
37 slides from Eagle Bancorp's investor presentation, Nov 9, 2021
Slide 1: Investor Presentation
Investor Presentation Ticker: EGBN EagleBankCorp.com November 2021
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 a
Slide 3: Experienced Senior Management Team
Experienced Senior Management Team 3 Susan Riel CEO & President, Eagle Bancorp & EagleBank 45 years in banking 24 years with EGBN Charles Levingston EVP & Chief Financial Officer, Eagle Bancorp & EagleBank 21 years in banking 9 years with EGBN Executive Vice President and Chief Financial Officer of
Slide 4: Experienced Senior Management Team
Experienced Senior Management Team 4 Joined EagleBank in June 2020 as the Chief Risk Officer. Prior to this, he was Managing Director for the Risk and Finance Advisory Practice in Deloitte’s Banking and Capital Markets Group, where he focused on the development of ERM and risk-category-specific gove
Slide 5: Board Focused on Vision and Oversight
Board Focused on Vision and Oversight 5 Norman Pozez Executive Chair - Board of Directors 13 years with EGBN Kathy Raffa Director, Chair - Audit Committee 6 years with EGBN Leslie Ludwig Director, Chair - Compensation Committee 4 years with EGBN Theresa LaPlaca Director, Chair - Risk Committee 2 yea
Slide 6: Summary Statistics
Summary Statistics 6 Total Assets $ billion Total Loans $ billion Total Deposits $ billion Tangible Common Equity $ billion Shares Outstanding 31,947,458 Market Capitalization $1.9 billion Tangible Book Value per Common Share $38.39 Institutional Ownership 77% Member of Russell 2000 yes Member of S&
Slide 7: Our Story
Our Story 7 *As of September 30, 2021. **Please refer to the Non-GAAP reconciliation and footnotes in the appendices. Note: TBVPS is adjusted for - 5:4 stock split 3/31/2000, 7:5 stock split 6/15/2001, 1.3:1 stock split 2/28/2005; 1.3:1 stock split 7/5/2006; 10% stock dividend 10/1/2008 and 10% stoc
Slide 8: Investment Rationale
Investment Rationale 8 Solid capitalization and conservative capital management Well-managed asset quality Above average peer returns (ROAA) Superior efficiency with limited branch network Recognized expertise in CRE, C&I and residential mortgage lending Strategically positioned in one of the most a
Slide 9: Current Year Highlights
Current Year Highlights 9 • Performance: – ROAA 1.56% / ROACE 13.98% / ROATCE 15.21%(1) (all YTD) – Includes reserves releases for credit losses of $14.4 million (YTD) • Shareholders: – Raised Quarterly Dividend to $0.40 (3Q 2021) / Dividend Yield 2.76%(2) / Payout Ratio 29% (3Q 2021) – Book value p
Slide 10: Attractive & Resilient Market
Attractive & Resilient Market 10 • Washington DC MSA – Market is the 6th largest in the U.S. – Population of 6.3 million with a projected annual growth rate of 0.8% through 2026 – Workforce of 3.4 million – 2021 median household income of $109,000 vs. $68,000 U.S. – Unemployment of 4.1% (Sept.) vs.
Slide 11: Limited Network of Offices
Limited Network of Offices 11 Branch Lending Offices Offices Virginia 7 1 Maryland 6 3 Washington, DC 5 1 Total 18 5
Slide 12: Local Leader in Deposit Share
Local Leader in Deposit Share 12 Note: Market includes Maryland counties of Montgomery and Prince George’s; Virginia counties of Alexandria, Arlington, Fairfax, Fairfax City, Falls Church, Loudoun, Manassas, Manassas Park and Prince William; and the District of Columbia. Data excludes Morgan Stanley
Slide 13: ESG - Social
ESG - Social 13 Affordable housing • 2nd quarter 2021, Eagle announced $81.2 million in fixed rate acquisition financing to support a key affordable housing project. Bradley Crossing LLC, controlled by the Housing Opportunities Commission of Montgomery County (HOC) • 2nd quarter 2021, construction l
Slide 14: Asset growth driven by deposits
$5,716 $5,854 $6,974 $7,224 $9,189 $9,668 2016Y 2017Y 2018Y 2019Y 2020Y 2021Q3 (in m ill io ns ) Deposits Asset growth driven by deposits 14 • Deposit growth has driven asset growth ‒ Deposits up 34% since end of 2019 ‒ Increased liquidity at the bank • Cost of funds ‒ Peaked in 2019 ‒ Down to 35 ba
Slide 15: Loans down, unfunded commitments up
Loans down, unfunded commitments up 15 • From 3/31/2021 to 9/30/2021 ‒ Unfunded commitments up $347 million ‒ Loans (ex PPP) down $178 million • Lending environment ‒ Both CRE and C&I teams are seeing increased deal flow in the market ‒ Taking a more competitive stance on credit spreads and on high
Slide 16: Solid capitalization
Solid capitalization 16 Note: Peers are depository institutions with assets from $7-$15 billion as of September 30, 2021 (excludes savings banks, thrifts and mutuals). Source: S&P Global Market Intelligence. Note: Tangible Common Equity is as of period end. • Capitalization ‒ Tangible common equity
Slide 17: Efficiency continues to be a strength
Efficiency continues to be a strength 17 • Efficiency much better than peers ‒ Focus on higher value business relationships ‒ Branches focused on commercial sub-markets ‒ Average deposits per branch of $537 million • Reductions to non-interest expense ‒ 2nd Q 2021: Closed Chantilly (VA) branch ‒ 3rd
Slide 18: Strong returns
Strong returns 18 • Returns ‒ Return on tangible common equity (non- GAAP) negatively impacted by a higher level of capitalization (TCE/TA 10.68% vs. 8.83% peer median) ‒ Return on average assets continues to outpace peers • PPNR / Average Assets ‒ Down to 1.88% in 2021 YTD on much higher average as
Slide 19: Tangible book builds, dividends increases
$21.61 $24.67 $29.17 $32.67 $35.74 $38.39 2016Y 2017Y 2018Y 2019Y 2020Y 2021Q3 Tangible Book Value Per Share Tangible book builds, dividends increases 19 • Tangible book ‒ TBVPS growth of 12.9% (CAGR) from end of 2016 through 9/30/2021 • Dividend ‒ Raised quarterly dividend to $0.40 per share ‒ Divi
Slide 20: Asset quality steady, reserves released
Asset quality steady, reserves released 20 *For the nine months ended September 30, 2021. **NPAs include loans 90 days past due and still accruing. Note: CECL adoption on January 1, 2020 led to an initial adjustment to the allowance for credit losses of $10.6 million. Charts for Allowance for Credit
Slide 21: Margin impacted by deposit inflows
21 Margin impacted by deposit inflows • Large deposit inflows in 2020 & 2021 lowered margins ‒ Asset mix changed as average loans to average deposits down to 71% (3Q 2021) ‒ In 3Q, average loans were $2.8 billion more than average deposits ‒ 3Q NIM (absent acceleration of interest expense from redem
Slide 22: Deposits remain elevated
Deposits remain elevated 22 *Core deposits include CDAR’s and ICS reciprocal deposits. **Average noninterest bearing deposits to average deposits is 34% for the third quarter of 2021. Note: Chart is as of period end. • Deposit philosophy ‒ Commercial focus drives growth of Noninterest Bearing Demand
Slide 23: Securities portfolio continues growth
Securities portfolio continues growth 23 • Accelerated pace of investments into securities ‒ Investments up $636 million in 2021 ‒ Weighted average duration moving up to 4.8 years *Includes allowance. Note: Charts are as of period end. Excludes Federal Reserve and Federal Home Loan bank stocks.
Slide 24: Loan growth still challenging
Loan growth still challenging 24 • Loan commentary – C&I/Owner Occupied CRE at 33.1% of portfolio is more of a focus 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 r
Slide 25: Loan Portfolio - Details
Loan Portfolio - Details 25 Note: Data as of September 30, 2021. $ in millions Location C&I Owner Occupied CRE Income Producing CRE Owner Occupied Const. CRE Construction Land Residential Mortgage Consumer TOTAL (ex PPP) % of Total (ex PPP) PPP Total Percent of Total District of Columbia $281.1 $246
Slide 26: ADC & CRE Concentration
ADC & CRE Concentration 26 Note: ADC and CRE concentration ratios represents concentration as a percentage of consolidated risk-based capital. CRE excludes owner occupied. Charts and data are as of period end. CRE Details ADC Details $ in millions 2020Y 2021 Q3 Total ADC portfolio $1,378 $1,412 ADC/
Slide 27: Loan Quality – COVID and Other Metrics
Loan Quality – COVID 19 and Other Metrics 27 • COVID-19 Migration ‒ Beginning in the third quarter of 2020, all loans receiving a second COVID-19 deferral or payment deferral were downgraded to a watch rating, if not already rated as such. ‒ This was done to raise the visibility of these loans withi
Slide 28: Mortgages, FHA & SBA
Mortgages, FHA & SBA 28 • Mortgages ‒ Locked loans in 2021 were $831 million ‒ 3Q 2021 about 45% re-fi ‒ 2Q 2021 about 55%-60% re-fi ‒ 1Q 2021 about 80% re-fi • FHA Multi-Family ‒ 5 dedicated FTE’s ‒ Group started in 2016 ‒ $3.2 million of trade premiums in 2021 YTD • SBA ‒ 9/30/2020 - Over 1,400 PP
Slide 29: Appendices
Appendices (EAGLE BANCORB INC. 29
Slide 30: Performance Statistics Summary
Performance Statistics Summary 30 Note: Peers are depository institutions with assets from $7-$15 billion as of September 30, 2021 (excludes savings banks, thrifts and mutuals). There were 50 depository institutions within that range as of November 4, 2021, and all were included in the peer group. S
Slide 31: Historical Balance Sheet
Historical Balance Sheet 31 $'s in thousands 12/31/2016 12/31/2017 12/31/2018 12/31/2019 12/31/2020 9/30/2021 Compound Growth Rate (4.75 years) Assets Cash and Equivalents $368,163 $190,473 $321,864 $241,973 $1,789,055 $2,500,484 49.7% Securities 559,708 625,592 807,645 878,557 1,191,187 1,820,752 2
Slide 32: Historical Income Statement
Historical Income Statement 32 *YTD is the nine months ended September 30, 2021. **Compounded growth rate uses 2016Y to the nine months ended September 30, 2021 annualized. $ in thousands, except per share data 2016Y 2017Y 2018Y 2019Y 2020Y 2021 YTD* Compound Growth Rate 2016 to YTD Annualized** Tot
Slide 33: Loan Portfolio – Income Producing CRE
Loan Portfolio – Income Producing CRE 33 Note: Data as of September 30, 2021 $ in millions Office Family & Hotel/ Mixed Multi- & Office Res. % of Location Motel Industrial Use Family Condo Retail Condo Other Total Total District of Columbia $184.8 $14.4 $263.2 $195.0 $106.1 $79.0 $78.6 $175.8 $1,096
Slide 34: Loan Portfolio – CRE Construction
Loan Portfolio – CRE Construction 34 Note: Data as of September 30, 2021 $ 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 $35.6 $205.6 $54.4 $0.0 $58.4 $3.9 $31.8 $15.5 $405.2 55
Slide 35: Non-GAAP Reconciliation (unaudited)
35 Non-GAAP Reconciliation (unaudited) Note: Per share data is adjusted for - 5:4 stock split 3/31/2000, 7:5 stock split 6/15/2001, 1.3:1 stock split 2/28/2005; 1.3:1 stock split 7/5/2006; 10% stock dividend 10/1/2008 and 10% stock dividend 6/14/2013. $ in thousands, except per share data 2000Y 2010
Slide 36: Non-GAAP Reconciliation (unaudited)
36 Non-GAAP Reconciliation (unaudited) $ in thousands 2016Y 2017Y 2018Y 2019Y 2020Y 2021 YTD** Efficiency Ratio Net interest income $258,165 $283,887 $316,993 $324,045 $321,652 $246,328 Noninterest income 27,284 29,372 22,586 25,699 45,696 29,811 Revenue $285,449 $313,259 $339,579 $349,744 $367,348
Slide 37: Non-GAAP Reconciliation (unaudited)
37 Non-GAAP Reconciliation (unaudited) Note: Tangible common equity to tangible assets (the "tangible common equity ratio"), tangible book value per common share, annualized return on average tangible common equity, and pre-provision net revenue to average assets (“PPNR/AA”) are non-GAAP financial m
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