Eagle Bancorp, Inc. · NASDAQ:EGBN
Eagle Bancorp — IPO Roadshow (March 2015)
47 slides from Eagle Bancorp's IPO roadshow presentation, Mar 2, 2015
Slide 1: Follow-on Offering of Common Shares, 1,900,000 Shares
Follow-on Offering of Common Shares 1,900,000 Shares March 2015 Ticker: EGBN www.eaglebankcorp.com
Slide 2: Forward Looking Statements
1 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 a
Slide 3: Offering Terms
2 Offering Terms Issuer: Eagle Bancorp, Inc. Type of Offering: Follow-on Public Offering Type of Security: Common Stock Ticker Symbol: EGBN Exchange: The NASDAQ Capital Market Shares Issued: 1,900,000 Common Shares Over-Allotment Option: 15% Use of Proceeds: General corporate purposes, including but
Slide 4: Company Overview
3 Company Overview Eagle Bancorp, Inc. is a growth-oriented community bank headquartered in Bethesda, Maryland Focused on the Washington, DC metropolitan area, with 22 branches (1) Commercially-oriented business model with deep relationships of loans, core deposits and related products #1 in deposit
Slide 5: Investment Highlights
4 Investment Highlights Focused on Profitability and Balanced Financial Performance Strong Net Interest Margin = 4.44% Clean Asset Quality: NPAs/Assets = 0.68% Low Charge-Off History: NCOs/Average Loans = 0.17% Driven by Long-Term, Deep Customer Relationships Demonstrated Consistent Organic Growth S
Slide 6: Experienced Senior Management Team
Experienced Senior Management Team Years Years in with Name Title/Function Banking EGBN Ronald D. Paul Chairman, President & CEO 28 17 Robert P. Pincus Vice Chairman 42 7 Susan G. Riel Sr. EVP & COO - EagleBank 39 17 James H. Langmead EVP & Chief Financial Officer - Eagle Bancorp & EagleBank 44 10 L
Slide 7: Summary Statistics
6 Summary Statistics NOTE: Data at December 31, 2014 unless otherwise noted. (1) Please refer to the Non-GAAP reconciliation and footnotes in the appendices on pages 34 - 36. Total Assets: $5.2 billion Total Loans: $4.3 billion Total Deposits: $4.3 billion Tangible Common Equity: $439.0 million (1)
Slide 8: EagleBank Branch Locations
EagleBank Branch Locations Bethesda Tyson's Corner Montgomery County Prince George’s County Fairfax County Loudoun County Washington, DC Reston Merrifield I-270 I-95 I-495 US 50 I-95 I-495 I-66 I-495 Branch System Virginia 10 Maryland 7 Washington, DC 5 Total 22 NOTE: Branch Totals as of December 31
Slide 9: Deposit Market Share
8 Deposit Market Share NOTE: Washington, D.C. Metro Area defined as: MD- Montgomery and Prince George's; DC - Washington DC; VA - Arlington, Alexandria, Fairfax, Fairfax (City), Falls Church, Loudon, Prince William, Manassas, Manassas Park. Data excludes: E*Trade whose deposits are substantially fro
Slide 10: Performance vs. Peer Group
Performance vs. Peer Group NOTE: (1) Please refer to the Peer Group shown on page 31. Key ratios represent the Peer Group median value for the period shown. (2) Operating data includes adjustments to eliminate merger related expenses associated with the acquisition of Virginia Heritage Bank. (3) The
Slide 11: Consistent Balance Sheet Growth
Consistent Balance Sheet Growth $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000 $5,500 Millions of Dollars 09Q4 10Q1 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4 12Q1 12Q2 12Q3 12Q4 13Q1 13Q2 13Q3 13Q4 14Q1 14Q2 14Q3 14Q4 Total Assets (1) Please refer to the Peer Group shown on page 31.
Slide 12: Consistent Net Income Growth
$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000 $11,000 $12,000 $13,000 $14,000 $15,000 Thousands of Dollars 09Q4 10Q1 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4 12Q1 12Q2 12Q3 12Q4 13Q1 13Q2 13Q3 13Q4 14Q1 14Q2 14Q3 14Q4 Net Income Available to Common TARP Dividend SBLF Dividend C
Slide 13: Net Interest Margin
Net Interest Margin NOTE: Please refer to the Peer Group shown on page 31. Represent Peer Group median values for the periods shown. 4.09% 3.99% 4.32% 4.30% 4.44% 4.00% 3.87% 3.86% 3.80% 3.83% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 2010 2011 2012 2013 2014 EGBN Peer Group 12
Slide 14: Yields and Cost of Funds
Yields and Cost of Funds NOTE: Please refer to the Peer Group shown on page 31. Represent Peer Group median values for the periods shown. SOURCE: SNL Financial 5.15% 4.80% 4.81% 4.67% 4.77% 5.06% 4.78% 4.43% 4.25% 4.10% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 5.50% 2010 2011 2012 2013 2014 Yield o
Slide 15: Tangible Book Value per Share
Tangible Book Value per Share $8.21 $9.38 $11.47 $12.89 $14.56 $0.00 $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 $16.00 2010 2011 2012 2013 2014 NOTE: Please refer to the Non-GAAP reconciliation and footnotes in the appendices on pages 32 - 34. 15
Slide 16: Consistent Increases in Operating Leverage
$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 Revenue ($000s) Non-Int Expense ($000s) Consistent Increases in Operating Leverage NOTE: Please refer to the Non-GAAP reconciliation and footnotes in the appendices on pages 33 - 34. Data for Q2, Q3, Q4 2014 are shown on an operating basis, net of m
Slide 17: Consistently Improving Efficiency Ratio
Consistently Improving Efficiency Ratio Note: Please refer to the Peer Group shown on page 31. Represent Peer Group median values for the periods shown. (1) See Non-GAAP reconciliation on pages 33 - 34. Source: SNL Financial 59% 56% 51% 50% 48% 59% 57% 60% 59% 56% 40% 45% 50% 55% 60% 65% 2010 2011 2
Slide 18: Moderate Interest Rate Risk Position
18 Moderate Interest Rate Risk Position Source: FTN Quarterly IRR Report (1) Note that net interest margin numbers are being shown net of deferred fees and costs. Both assets and liabilities remain short with repricing durations at 27 months on loans and 34 months on deposits Largely as a result of
Slide 19: Deposit Composition and Growth
(1) Core deposits include CDAR’s and ICS reciprocal deposits. Commercial focus drives growth of Noninterest Bearing Demand accounts Wholesale Deposits used to enhance favorable cost of funds, not a strategy to replace growth in core deposits Deposit Composition and Growth (Dollar Values in Thousands
Slide 20: Balanced Loan and Deposit Growth
Balanced Loan and Deposit Growth $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 $4.5 $ in Billions Total Loans Total Deposits 20 (1) Q3 2011 excludes the “settlement deposit.”
Slide 21: Detail of Loan Portfolio
Detail of Loan Portfolio NOTE: At December 31, 2014 Concentration in quality markets: Washington, DC, Montgomery County, Fairfax County Held for Sale residential mortgages not included (Dollar Values in Thousands) County C&I Owner Occupied CRE Owner Occupied Const. Income Producing CRE Construction
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 22
Slide 23: Credit Quality Trends
Credit Quality Trends (1) The Virginia Heritage Bank loan portfolio acquired was marked to fair value in accordance with purchase accounting. (Dollars Values in Thousands) At or for the Year Ended December 31, 2010 2011 2012 2013 2014 Gross Loans $1,675,500 $2,056,256 $2,493,095 $2,945,158 $4,312,39
Slide 24: Consistent Asset Quality
Consistent Asset Quality Total Loans ($mms) 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 Dec - 10 Mar- 11 Jun- 11 Sep- 11 Dec - 11 Mar- 12 Jun- 12 Sep- 12 Dec- 12 Mar- 13 Jun- 13 Sep- 13 Dec- 13 Mar- 14 Jun- 14 Sep- 14 D
Slide 25: Capital Strength
Capital Strength $70 million of 10 Year non-call 5.75% Subordinated Notes sold in August 2014 $10 million of Common Equity raised through an underwritten offering in October 2012 $35 million of Common Equity raised through an At the Market Offering during May through October 2012 $55 million of Comm
Slide 26: Key Success Factors
Key Success Factors Building and maintaining core relationships o Cross sales o Focus on key customers Maintenance of strong credit culture o Conservative underwriting criteria and loan policies o Disciplined committee approval and review process o Periodic loan and portfolio stress testing o Proact
Slide 27: Key Success Factors (continued)
Key Success Factors (continued) Disciplined ALCO process Maintained focus on areas of strength o 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 Human R
Slide 28: EagleBank Growth Strategy
EagleBank Growth Strategy Continue Integration of 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 3.1% deposit market share in DC Met
Slide 29: Stock Price Performance
50.00 100.00 150.00 200.00 250.00 300.00 350.00 400.00 2/27/2010 2/27/2011 2/27/2012 2/26/2013 2/26/2014 2/26/2015 Total Return Performance Eagle Bancorp, Inc. NASDAQ Bank Index NASDAQ Stock Market Index - (U.S. Companies) S&P 500 Stock Price Performance 1 Year 3 Year 5 Year EGBN 8.5% 149.5% 249.0%
Slide 30: Appendices
Appendices 30
Slide 31: Peer Group
Peer Group NOTE: Peer Group includes all publicly-traded banks Nationwide with $2.5 billion to $7.5 billion in assets that trade at 200% of tangible book value or higher. Prior quarter or prior quarter LTM used when current data is unavailable. (1) Nonperforming assets are defined as nonaccrual loan
Slide 32: Non-GAAP Reconciliation
Non-GAAP Reconciliation (Dollar Values in Thousands, except per share data) December 31, 2010 2011 2012 2013 2014 Common stockholders' equity 182,134 $ 210,111 $ 293,376 $ 337,263 $ 548,859 $ Less: Intangible assets (4,188) (4,145) (3,785) (3,510) (109,908) Tangible common equity 177,946 $ 205,966 $
Slide 33: GAAP Reconciliation (Unaudited)
GAAP Reconciliation (Unaudited) (dollars in thousands except per share data) Twelve Months Ended Three Months Ended December 31, 2014 December 31, 2014 Net income 54,258 $ 14,727 $ Adjustments to net income Merger-related expenses, net of tax 3,472 2,173 Operating net income 57,730 $ 16,900 $ Net in
Slide 34: Non-GAAP measure footnotes
(2) 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 balance of intangible assets from comm
Slide 35: Market Information – Washington, DC MSA
35 Market Information –Washington, DC MSA Population 6.2 Million 5th largest market in the U.S. Employment 3.1 Million 18,900 new jobs created in last year Employment growth driven by private sector, 179,000 new private sector jobs over last four years Unemployment rate of 4.5% vs. US average of 5.4
Slide 36: Greater Washington Economy
36 Other 8.9% Non-Local Business 10.6% Associations 2.2% Hospitality 3.6% International 4.9% Other Federal 13.7% Federal Procurement 16.3% Local Business 39.9% Greater Washington Economy NOTE: Other includes Health Care/Education and Media SOURCE: The Wall Street Journal, George Mason University - C
Slide 37: Loan Portfolio and Growth
Loan Portfolio and Growth (Dollar Values in Thousands) Annual Growth % of % of Organic Total Loan Portfolio by Type Balance Total Balance Total Growth Growth Commercial and Industrial $694,350 23.6% $916,226 21.2% $143,174 $221,876 Owner Occupied 317,491 10.8% 461,581 10.7% 114,676 144,090 Owner Occ
Slide 38: Geographic Detail - Income Producing CRE
Geographic Detail - Income Producing CRE NOTE: At December 31, 2014 Focus in core sub-markets: Washington, DC, Montgomery County, Fairfax County (Dollar Values in Thousands) Single Redevel./ Office Multi- & 1-4 Mixed County Retail Condo Fami ly Family Use Hotel Industrial Other TOTAL Maryland Montgo
Slide 39: Geographic Detail – Construction
Geographic Detail – Construction NOTE: At December 31, 2014 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 (Dollar Values in Thousands) Single & 1-4 Mult
Slide 40: Loan Portfolio by Risk Rating
Loan Portfolio by Risk Rating Periodic review of loan portfolio and risk ratings by independent, third-party credit review firm (Dollar Values in Thousands) Loan Portfolio as of: % of % of Risk Rating Balance Loans Balance Loans 1000 - Prime $2,447 0.1% $14,803 0.3% 2000 - Excellent 239,914 8.1% 270
Slide 41: Conservative Securities Portfolio
Portfolio has $4.4 million of net unrealized gains at December 31, 2014 No holdings of GSE equities or bank Trust Preferred or bank Trust Preferred CDOs Average life of portfolio is 4.0 years Excludes Federal Reserve and Federal Home Loan Bank stock No use of derivatives for hedging Conservative Sec
Slide 42: Nationally Recognized Financial Performance
“Top Investment Idea” Recommendation 2012 “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 the U.S. 2011, 2012 & 2013 Ronald D. Paul named East Coast Region Community Banker
Slide 43: Highly Regarded by Bank Rating Firms
Highly Regarded by Bank Rating Firms FIRM BANK RATING 283/300 Green - *** BAUERFINANCIAL, INC BBB+ 43
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 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 previous
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 W