Eagle Bancorp, Inc. · NASDAQ:EGBN
Eagle Bancorp — Q2 2024 Earnings Presentation
32 slides from Eagle Bancorp's earnings presentation, Jul 24, 2024
Slide 1: 2nd Quarter 2024 Earnings Presentation
2nd Quarter 2024 Earnings Presentation July 24, 2024 Scan for digital version 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: Attractive Washington DC Footprint
Attractive Washington DC Footprint One-of-a-kind Market The Washington DC area represents a strong and stable economy bolstered by Federal government spending and related jobs insulating the region from the severity of potential economic downturns. Our market includes world-class centers of educatio
Slide 4: Eagle at a Glance
Eagle at a Glance Tangible Total Assets Total Loans Total Deposits Common Equity $ 11.3 8.0 8.3 1.2 $ $ $ billion billion billion billion 1 Shares Outstanding Market Capitalization Tangible Book Value (at close June 30, 2024) (at close July 22, 2024) per Common Share 2 30,180,482 $671 million 38.74
Slide 5: Eagle is an attractive investment opportunity
Eagle is an attractive investment opportunity • Best-in-Class Regulatory Capital Levels o As of 3/31/2024, our CET1 ratio was in the top quartile of all bank holding companies with $10 billion in assets or more; our CET1 ratio as of 6/30/2024 was 13.92%. • Long-term strategy to improve operating pre
Slide 6: Strategies Driving Growth and PPNR
Strategies Driving Growth and PPNR Improving Operating Pre-Provision Net Revenue (“PPNR”) • Enhance revenue opportunities through C&I and small business to improve fee income and deposits • Continue to focus on growing core deposits • Maintain pricing discipline on loan originations to promote reven
Slide 7: Key Strategic Objectives
Key Strategic Objectives • Enhance Deposit Franchise o Focus on deposit growth through improved sales behaviors; focusing on net new relationship metrics; enhancing products set and services to better serve our customers. o Enhance our treasury management program by continued collaboration between T
Slide 8: Eagle – Capital Levels vs. Peers
Eagle – Capital Levels vs. Peers Strong Capital • Capital ratios are high relative to peers1 • Excess CET1 (over 9%) plus reserves provides a superior level of coverage when measured against our peers CET1 Ratio Excess CET1 + ACL / Total Tangible Common Equity Loans / Tangible Assets2 Peer 1 15.0% P
Slide 9: Eagle – Liquidity Position vs. Peers
Eagle – Liquidity Position vs. Peers Available Liquidity Cash Equivalents / Cash Equivalents + AFS Cash and cash equivalents are high Total Deposits Securities / Total Deposits relative to peers. Peer 1 12.1% Peer 2 29.1% Cash equivalents combined with AFS Peer 2 8.1% EGBN 25.4% securities provides
Slide 10: Performance Measures
Performance Measures Operating PPNR and Operating Operating Return on Average PPNR/Average Assets1 Tangible Common Equity1 $55 4.00% $42 10.08% 9.61% $45 $39 $39 $38 $34 3.00% (in millions) 7.08% 7.04% $35 $25 1.43% 2.00% 1.31% 1.25% 1.20% 1.12% $15 1.00% $5 -0.11% ($5) 2023 Q2 2023 Q3 2023 Q4 2024
Slide 11: Net Interest Income
Net Interest Income Net Interest Income & Margin NII and NIM Decline Slightly $100.0 9.00% $71.8 $70.7 $73.0 $74.7 $71.4 Net Interest Income $80.0 7.00% • Interest income declined $5.9 million quarter over $60.0 5.00% quarter as lower cash balances resulted in lower (in millions) 2.49% 2.43% 2.45% 2
Slide 12: Operating Net Income – Summary
Operating Net Income – Summary Operating Net Income Drivers Net interest income Net interest income down $3.3 million, driven by lower cash balances and higher yields on borrowings and time deposits Provision for Credit Losses (“PCL”) The provision on credit was lower primarily reflecting a charge-o
Slide 13: 2024 Outlook
2024 Outlook Key Drivers 2Q 2024 Actual Prior 2024 Outlook Current 2024 Outlook1 Balance Sheet Average deposits $9,225 million Low single digit % increase Low single digit % increase Average loans $8,003 million Low single digit % increase Low single digit % increase Average earning assets $11,953 m
Slide 14: 2024 Outlook Variables & Risks
2024 Outlook Variables & Risks To reach our 2024 outlook, we made many assumptions of variables and risks, including: Component Variables & Risks Economy & Rates • Business activity highly correlated to current and anticipated forward rates Clients • Credit quality and need for credit coupled with a
Slide 15: Deposit Mix and Trend
Deposit Mix and Trend Total Period End Deposits increased $549 million Year-over-Year CDs Savings & money market Interest bearing transaction Noninterest bearing Cost Analysis Cumulative Betas1 4.83% 4.84% 5.07% • Interest bearing deposits - 76% 4.73% 4.61% 4.75% • Cost of funds – 64% 4.22% 4.30% 4.
Slide 16: Funding & Liquidity
Funding & Liquidity Deposits & Borrowings $9,685 $9,662 $9,772 $10,209 $10,208 $9,967 Funding & Liquidity Summary 14.3% 13.7% 16.7% 17.0% 22.9% 20.1% Deposits in millions Period end deposits were down $234 million for the quarter, attributable to a decline in deposits 85.7% 86.3% 83.3% 83.0% 77.1% 7
Slide 17: CRE Office Detail
CRE Office Detail As of June 30, 2024 Excess CET1+ACL/ Non-Owner Occupied Office Loans2 Peer 1 128% Peer 2 119% Peer 3 108% Peer 4 89% Peer 5 84% Peer 6 78% Peer 7 63% EGBN 63% 1-Class Type is determined based on the latest appraisal designation Peer 8 55% Mix and Risk Rating Trend of Total Inc Prod
Slide 18: CRE Office Detail (continued)
CRE Office Detail (continued) CRE Office Commentary • Improving ACL coverage of office with reserve build to 4.05% of performing CRE Office vs. 3.67% the prior quarter • Non-office CRE exhibited limited internal risk rating migration • 60% of office portfolio maturities are beyond year-end 2025 • Li
Slide 19: Loan Mix and Trend
Loan Mix and Trend Home Equity Other Consumer Construction C&I (owner-occupied) Construction – comm& residential. Owner-Occupied CRE Commercial Income producing CRE (excluding office if applicable) Office 19
Slide 20: Loan Type and Classification
Loan Type and Classification Classified and Criticized Loans Quarter-over-Quarter Change 92% 81% 88% 85% 91% % performing Special Mention 8.95% • C&I -$8.5 million 6.81% 7.86% 4.83% 4.76% • CRE +$51 million $717 • 100% of special mention loans were current as 6/30/24 $627 $543 $308 Substandard (in m
Slide 21: Asset Quality Metrics
Asset Quality Metrics Provision for Credit Losses Allowance for Credit Losses/ $35,175 Loans HFI 1.33% 1.25% 1.08% (in thousands) 1.00% 1.05% $14,490 $8,959 $5,238 $5,644 2023Q2 2023Q3 2023Q4 2024Q1 2024Q2 2023Q2 2023Q3 2023Q4 2024Q1 2024Q2 NCO / Average Loans1 NPAs2 / Assets 1.07% 0.88% 0.79% 0.64%
Slide 22: Appendices
Appendices ” @EAGLE BANCORB INC. 22
Slide 23: Investment Portfolio
Investment Portfolio Investment Portfolio Strategy • Portfolio positioned to manage liquidity and pledging needs • Cash flow projected principal only (rates unchanged): o Remainder of 2024 - $218 million o 2025 - $386 million • Total securities down $42 million from 3/31/2024 from principal paydowns
Slide 24: Tangible Book Value Per Share
Tangible Book Value Per Share Per share data is as of period end. Please refer to Non-GAAP reconciliation and footnotes in the appendices. The CAGR for Book Value Per Share with AOCI included was 2.3% and excluded was 6.6% for the period from December 31, 2020, through June 30, 2024. Book values per
Slide 25: Loan Portfolio – Details
Loan Portfolio – Details Note: Data as of June 30, 2024. 25
Slide 26: Loan Portfolio – Income Producing CRE
Loan Portfolio – Income Producing CRE Note: Data as of June 30, 2024. 26
Slide 27: Loan Portfolio – CRE Construction
Loan Portfolio – CRE Construction Note: Data as of June 30, 2024. 27
Slide 28: Non-GAAP Reconciliation (unaudited)
Non-GAAP Reconciliation (unaudited) 28
Slide 29: Non-GAAP Reconciliation (unaudited)
Non-GAAP Reconciliation (unaudited) 29
Slide 30: Non-GAAP Reconciliation (unaudited)
Non-GAAP Reconciliation (unaudited) 30
Slide 31: Non-GAAP Reconciliation (unaudited)
Non-GAAP Reconciliation (unaudited) 31
Slide 32: Non-GAAP Reconciliation (unaudited)
Non-GAAP Reconciliation (unaudited) Tangible common equity to tangible assets (the "tangible common equity ratio"), tangible book value per common share, tangible book value per common share excluding accumulated other comprehensive income (“AOCI”), and the return on average tangible common equity a