Eagle Bancorp, Inc. · NASDAQ:EGBN
Eagle Bancorp — Sandler O'Neill + Partners East Coast Financial Services Conference 2014
58 slides from Eagle Bancorp's conference presentation, Nov 13, 2014
Slide 1: Sandler O'Neill East Coast Financial Services Conference
” @EAGLE BANCORP INC. Sandler O’Neill + Partners East Coast Financial Services Conference November 12 & 13, 2014 Ticker: EGBN www.eaglebankcorp.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 23 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 Superior Net Interest Margin — 4.45% for Q3 2014 Strong Asset Quality — NPA’s 0.92% at 9/30/14 Leading Local Community Bank Driven by Long-Term, Deep Customer Relationships Demonstrated Organic Growth Strategic Geograp
Slide 5: Experienced Senior Management Team
| Experienced Senior Management Team Name Title/Function Ronald D. Paul Chairman, President & CEO 27 16 Robert P. Pincus Vice Chairman 41 6 Susan G. Riel Sr. EVP & COO - EaglBank 38 16 James H. Langmead EVP & Chief Financial Officer - Eagle Bancorp & FagkBank B 9 Laurence E. Bensignor EVP & General
Slide 6: Summary Statistics — September 30, 2014
| Summary Statistics — september 30, 2014 EGBN vGRK Total Assets: $4.2 billion $951 million Total Loans: $3.4 billion $806 million ‘Total Deposits: $3.5 billion $748 million ‘Tangible Common Equity: $382.7 million (1) $90.9 mill ‘Tangible Book Value per Common Share: $14.71 (I) $15.03 SBLF Preferred
Slide 7: EGBN - Financial Indicators — Regional Peer Analysis
EGBN - Financial Indicators — Regional Peer Analysis Regional EGBN VoBK Peers (1) Key Ratios (at or for the quarter ended September 30) 3Q2012__3Q2013__ 3Q2014 302014 3Q2014 Net Interest Margin 4.44% 4.31% © 4.45% 3.63% 3.52% Efficiency Ratio 50.07% 51.68% 49.11% 57.15% 67.84% Non-Interest Income/To
Slide 8: Financial Indicators — Local Peer Analysis
Financial Indicators — Local Peer Analysis Loan Growth (September 30, 2013 - September 30, 2014) = Commercial & Industrial = Commercial Real Estate © Construction & Development © Total Loans Deposit Growth (September 30, 2013 - September 30, 2014) = Demand Deposits = Money Market Accounts © Certific
Slide 9: EagleBank Locations
EagleBank Locations Loudoun County Mont2\mery County Reston 1498 Aes Arlington =) Tyson's Comer Fairfax County Branch Tolls as of 11/7/14, Tysons Comer branch expected to close in QU 2014, Arlington Branch expected to lose in 2015
Slide 10: Enhanced Deposit Market Share in Region
| Enhanced Deposit Market Share in Region Local 30-Jun-13 30-Jun-14 ‘Annual 2014 Rank Rank Company Name Branches Balance Balance Growth Market Share 1 Wells Fargo & Co 166 $23,769,182 $ 25,191,935 599% 15.45% 2 Bankof America 16s 21,404,120 24,478,686 1436% 15.01% a Capital One 186 22128,708 2233837
Slide 11: Washington Metropolitan Area Primary Sub-Markets
| Washington Metropolitan Area Primary Sub-Markets al Number of Employment __Bi ses Anne Arundel, Maryland 548,625 259,394 20,430] Prince George's, Maryland 871,533 379,628 28,057] Howard, Maryland 297,571 156,997 11,530 Frederick, Maryland 238,502 114,734 9,478| Charles, Maryland 152,144 55,053 5,0
Slide 12: Consistent Balance Sheet Growth
Millions of Dollars Consistent Balance Sheet Growth 43005 Total Assets 10004 83,3004 30004 82,5004 82,0004 Peer CAGR: 3.1%" $1,504 31,0004 sso 09Q3 09Q4 10Ql 10Q2 10Q3 10Q1 QI 12 1Q3 NQF QI 122 IQs 12Qd_13QI 13Q2 13Q3 13Q4 QI QZ 14Q3 2 (0) Regional pers includes publicly-traded commercial banks with
Slide 13: Improving Efficiency Ratio
Improving Efficiency Ratio 60% 35% 50% 49.1% 45% 40% (09Q309Q4 10Q1 10Q210Q3 1094 111 11Q211Q311Q4.12Q1 12Q212Q312Q4 13Q113Q2 13Q3 13Q414Q114Q214Q3 Data foe Q2, Q3 2014 on an operating bass et of merger related expenses,
Slide 14: Increasing Operating Leverage
Increasing Operating Leverage $40,000 ane a eal —___, mee ao CAGR 18.7% 520000 ——— $10,000 + SS » yO ND DP wD DS LEE ELLE LEE EERE EE PE ECR —#—Revenue ($0003) —th=Non-Int Expense ($0005) (4) Data for Q2, Q8 2014 on an operating basis net of merger related expenses
Slide 15: Consistent Net Income Growth
Consistent Net Income Growth [Net Income Available to Common Il TARP Dividend OSBLF Dividend 315,0009 14,086 14,0004 13,0004 12,0004 11,0004 10,0004 $9,000 8,000 s7,0004 cs ccs ccs | | 0993 09Qt_ IQ 10Q2 1093 10QI QI NG 11Q3 EH 12Q1 1292 1293 12Q1-1BQI 13Q_ Qs EE MQI HQ? 14Q3 ‘Thousands of Dollars 8
Slide 16: Geographic Detail of Loan Portfolio
Geographic Detail of Loan Portfolio = 7407) 3426728771387 20,015 5,203. 1,368,475, 81 309,159 9.0% 48489 17,851 4421 275,754 45,123 30,742 9,387 6,897 290 438.954— 12.8% Loudoun 31,217 1317 15220 : 69,989 Prinoe Wiliam 1,130 38,296 2,456 3,043 79,282 Other VA 10211 34957 33,269 13,000 8087 = 25861 3
Slide 17: Geographic Detail of CRE — Construction
Geographic Detail of CRE — Construction Prince George's 10,500 1,456 : : : 2966 = 5098 20,015. 4.0% Other MD . 3,625 6,191 1,648 : 6414 16,561 10,684 45,123 9.0% Virginia Loudoun 9,991 2,844 = 2,385 - - ~ * 15,220 3.0% Prince William 2,456 - - & = = = = 2,456 0.5% Other VA. 11,426 3,11 462 # 2,534 i
Slide 18: Geographic Detail of CRE - Income Producing
Geographic Detail of CRE- Income Producing Maryland Seorge' 48,193 14,069 21,756 9,920 10,623. 17,573 2 2821 «171387 12.4% 92,848 24,988 43,974 19,405 14,470 39,281 «13,927 26861 275,754 19.9% 4,621 - 10,120 9,091 4 22,82 3119 5,187 382 - - S381 3 2.5% Other USA $ 1165 $ + $ 7,886 $ - $F 9363 $ 5,79
Slide 19: EGBN — CRE Risk Management
EGBN — CRE Risk Management Executive Level & Board Oversight Disciplined Underwriting & Approval Process Robust Portfolio Management Stress Testing of Portfolio Quarterly Independent Credit Review Dedicated Special Assets Team
Slide 20: EGBN - Credit Quality Trends
EGBN - Credit Quality Trends (Dollars Values in Thousands) 30-89 Days Past Due Nonperforming Assets: 90 or More Days Past Due Nomacerual ‘Total Nonperforming Loans (NPL) Other Real Estate Owned (OREO) ‘Total Nonperforming Assets Performing Restructured Loans (TDRs) NPAs/Assets NPAs TDRs/ Assets Rese
Slide 21: EGBN- Consistent Asset Quality
EGBN- Consistent Asset Quality Total Loans ($000s) 0 am | oe st | ox 50 + 0 ie | | tu fino si Lig | a 5 $0 a om f) aL ay be pe Dees Mit dae Sp ie Me usp unite rere ose Mt loas 5} Ns) a) fa (Dollar Values in Thousands) 209 2010 2011 202 2013 993014 YTD Income Producing CRE Owner Occupied CRE Construc
Slide 22: Balanced Loan and Deposit Growth
Balanced Loan and Deposit Growth $3,500,000,000 $3,000,000,000 $2,500,000,000 +} $2,000,000,000 + $1,500,000,000 $1,000,000,000 $50,000,000 ‘Total Loans Total Deposits
Slide 23: Deposit Composition
Deposit Composition (Balas Vola in Thousands) Deposit Type %of %of %of Balance Total Balance Total Balance Total % Noninterest Bearing S 898,831 30.1% S$ _ 849,408 26.3% "$1,056,559 29.9% 17.5% Interest Bearing Transaction 104,004 3.5% 118,580 3.7% 161,886 4.6% 35.7% Core Savings & Money Market (1)
Slide 24: Superior Relationships/Net Interest Margin
Superior Relationships/Net Interest Margin 5.25% 475% 4.25% Net Interest Margin (%) 3.75% 3.25% 3 Si co re ee S@egsgegerg gees segs sss ss ‘Note Regional prs includes publicly-traded commercial banks with Asset between SI and $3 billion and headquartered in Washington, DC, Virginia, ‘West Virginia,
Slide 25: Conservative Securities Portfolio
| Conservative Securities Portfolio (Drltios Uaastn Fhassondy US Goverment Agency Secusites sis 9081 102% Mortgage Backed Securites - SEs Ls 5129 39.9% ‘Municipal Bonds 17,856 29.8% Other Equity Investments 309 01% “Total Securities Tee Tao. US Gavemment Agency Secusties 45640 8 ans Mortgage Backed
Slide 26: Capital Strength
Capital Strength (Dollars Values in Thousands) ‘Total Assets S 3,410,568 S$ 3,504,928 $ 3,771,503 S 3,803,952 S 3,914,444 S 4,169,181 Total Stockholders Equity S 369,390 S 382,100 S 393,863 S 410,382 S 426,821 S 442,614 Total Common Stockholders Equity S$ 312,790 S 325,500 S 337,263 S 353,782 $ 370,
Slide 27: Nationally Recognized Financial Performance
| Nationally Recognized Financial Performance = “Top Investment Idea” Recommendation 2012 SANDLER O'NEILL + PARTNERS = “Sm-All Stars” Designation 2011, 2013 & 2014 = Designated as a “Grower” Bank 2012 = Honor Roll of Community Banks 2010-2013 = Ranked among Top 50 Best Performing Community Banks in
Slide 28: Highly Regarded by Bank Rating Firms
| Highly Regarded by Bank Rating Firms FIRM BANK RATING KBRA BBB+ IDC 275/300 Analyze the Future BAUERFINANCIAL, INC Jotototok VE ANC VERIBANC Green - ***
Slide 29: Market Information — Washington, DC MSA
Market Information —Washington, DC MSA = Population 6.2 Million a Sth largest market in the U.S. = Employment 3.1 Million a 19,800 new jobs created in last year a Average annual job creation is 28,900 over last decade a Highest in net new job growth in the U.S. over last decade a Unemployment rate o
Slide 30: Unemployment Rate - Largest US Markets
| Unemployment Rate - Largest US Markets August, 2014 r rr nL La Roononwnnreo Source: BLS, Not Seasonally Adjusted
Slide 31: Average Sales Price Percent Change Washington MSA
Average Sales Price Percent Change Washington MSA All Housing Types Annual Change Annual Change by Month 2000 -2009 2010 2011 2012 2013 2014 % 30 22 20 10 +5 ll Er oes) im ara dl: Wiitaliill:eisi sida tls 7 TTT -10 = a -20 4 0 SSSES FSPSEE FEPSESE SEPSES FEPSESSEPIE Source: MRIS, GMU Center for Regi
Slide 32: Greater Washington Economy
Greater Washington Economy [isa eda Spending = 30% oF GRP] [Git Contin Subarket] Other Federal ‘International 7 4 Hospitality 3.68% Federal Procurement Assodiatlons Suburban Maryland Non-Local Business ‘Northern Virginia Local Business 18.0% 39.9% Gross Regional Product $449 Billion Note: Other incl
Slide 33: 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 Proactive Id
Slide 34: 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 = Significant Management and Board level reporting =
Slide 35: EagleBank Growth Strategy
EagleBank Growth Strategy = Integrate 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 2.56% deposit market share in DC Metro Area a
Slide 36: EGBN Stock Price Performance
| EGBN Stock Price Performance Price Change (%) 00 we - WW i | | F “i 5m An id vl a V eo es vy “0 ewe sal 2 2 zr z = zr z zr r z z z 8 $$ § § @ $ & §$ § 3 &F § 8 Stock Price Performance 1 Year 3 Year 5 Year EGBN 35.8% 184.9% 322.7% NASDAQ Bank Stock Index 8.4% 65.8% 66.7% S & P 500 Index, 14.9% 61.0
Slide 37: EGBN Relative Valuation
| EGBN Relative Valuation Trailing P/E Ratio 70 60 50 40 30 20 10 0 oad EGBN — SNLINat'l Avg KBW Regional SNLMid-Atl NASDAQ Russell 3000 S&P 500 Bank Avg Avg Source: SNL Chart and ealeulations as of elose October 31, 2014
Slide 38: Appendices
Appendices 37
Slide 39: Loan Portfolio Trends
Loan Portfolio Trends (Dili Vest hon) Loan Type Baknee _% of Total Babnce_ _% of Total Babnoe _%of Total % % Conmercialand Inhwtral $682,413, 24.4% — $694,350 23.6% $798,489 23.3% 17.0% 19.9% Owner Oceupied 334078 1.9% 317,491 337,422 98% 10 (Owner Oceupied-Corst 35,612 1.3% 34,659 41,846 1.2% 17.5%
Slide 40: Loan Portfolio Composition
| Loan Portfolio Composition Total Gross Loans: $3.4 Billion ‘Note: At September 30, 2014 39
Slide 41: Diversified Commercial Real Estate Portfolio
| Diversified Commercial Real Estate Portfolio Total : $501.7 Million Total : $1.4 Billion ‘Note: At September 30,2014 40
Slide 42: Loan Portfolio by Risk Rating
Loan Portfolio by Risk Rating (Dollar Values in Thousands) — iy 1000 Prime Ss 4609 $2935 01% = 2000- Exeellent 205,456 258867 73% = — 3000 - Good L12L184 1,400,172 408% 4000 - Acceptable 963310 1,220,481 35.6% 5000- Acceptable with Rsk 363,646 446,422 130% 6000- Watch, 46299 46331 13% 7000 - Special
Slide 43: Geographic Detail of NPA's
Geographic Detail of NPA’s Dollar Values in Thowsands) Maryland ‘Montgomery sms - $s - 8 - S$ os - $ + $ BSS - S46 Ss 8 $ 1m Prine George's = 2 2 337 : 419 ye P 1337 350 1,887 ther MD 701 : : x é . - 2 701 45 16 Washington DC 5.800 : 110342609 : ms 11679 1073 Virginia Asana B28 a : : © E 2461 261 Ai
Slide 44: Virginia Heritage Bank Overview - through September 30, 2014
Virginia Heritage Bank Overview - through september 30, 2014 = Growing community bank in Eagle’s target market © Six branches in Northern Virginia * Attractive demographic trends * Growing market of small and medium sized businesses = Exceptional asset quality = Outstanding organic growth * All grow
Slide 45: EGBN/VGBK - Combined Loan & Deposit Composition
EGBN/VGBK - Combined Loan & Deposit Composition Virginia Heritage Bank te Bancorp, Ine. Combined Sew ‘Contueer ‘Connuner 3c o [Fetal Loans mitionsys S06] [Fetal oans minions): $3,433 ([Fotatoans mitions): $4738 Virginia Heritage Bank Eagle Bancorp, Ine Combined “Tine > S10, io 1) Exeludes loans held
Slide 46: Moderate Interest Rate Risk Position
| Moderate Interest Rate Risk Position ‘Source: FIN Quarterly IRR Report 45
Slide 47: Acquisition Strategy & History
Acquisition Strategy & History Significant Due Diligence precedes any Offer to Acquire Accretive Transactions are always the Goal Acquisition #1 (F&T completed on August 31, 2008) a System conversion successfully completed one week after close a Targeted expense savings achieved in methodical and th
Slide 48: 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 Execut
Slide 49: Experienced Management Team
Experienced Management Team Susan G. Riel, Senior EVP, Chief Operating Officer of EagleBank & EVP, Eagle Bancorp, Inc. ‘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 previou
Slide 50: 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 had served as Chief Financial Officer since 2005 and Chief Operating Officer since 2010 and was also a Director. Prior to
Slide 51: Experienced Management Team
Experienced Management Team Thomas D. Murphy, President, Community Banking Division Mr. Murphy is one of the founding officers of EagleBank and has been with the bank for 16 years and has served as President ~ Community Banking Division of the Bank since October, 2010. He served at Allegiance Bank f
Slide 52: Historical Balance Sheet
Historical Balance Sheet 51
Slide 53: Historical Quarterly Balance Sheet
Historical Quarterly Balance Sheet (4) Please refer to the GAAP reconciliation and footnotes in the appendices on pages 55-57. 52
Slide 54: Historical Income Statement
| Historical Income Statement (Dollar Values in Thousands, except per share data) 1 Year Growth 2009 2010 2011 2012 2013 __Rate Total Interest Income S$ 84338 $ 96.658 $ 119,124 157,204 10.8% Total Interest Expense 24,800 19.832 20,077 12504 _ 03.3%) [Net Interest Income 59,529 76,826 99,047 144,790
Slide 55: Historical Quarterly Income Statement
| Historical Quarterly Income Statement (Dole awe mDhsconde ec per shreds) Gewwih Growth sQ2018 6 SQ2014 oe2012__Mas2015_ Jun 2015 Sep 2018 _Dec2015__Mar2014 Mk _Sep2014__ S205, oi ‘Toantret come a a a ee ee ee cy Totallatrt Bxpese sar sat 3001 on 2739 wastes _ 18 ‘Net Iter Income Bare 345097 3486k
Slide 56: GAAP Reconciliation
GAAP Reconciliation GAAP Reconciliation (Unaudited) (Collars in thousands except pershare data) Nine Months Ended ‘Twelve Months Ended ‘Nine Months Ended September 30,2014 December 31,2013, September 30,2013 Common shareholders’ equity $ 386,014 $ 337,26 $ 325,500 Less: Intangible assets 332) 510) G
Slide 57: GAAP Reconciliation
| GAAP Reconciliation 56
Slide 58: GAAP Reconciliation Footnotes
| GAAP Reconciliation Footnotes (1) The reported figure includes the effect of $1.5 million and $885 thousand of merger related expenses ($1.3 million and $674 thousand net of tax) for the nine and three months ended September 30, 2014. As the magnitude of the merger expenses distorts the operationa
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