Eagle Bancorp, Inc. · NASDAQ:EGBN
Eagle Bancorp — IPO Roadshow (July 2016)
48 slides from Eagle Bancorp's IPO roadshow presentation, Jul 20, 2016
Slide 1: Disclaimer
1 This presentation has been prepared by Eagle Bancorp, Inc. (“Eagle” or the “Company”) solely for informational purposes based on information regarding its operations, as well as information from public sources. This presentation has been prepared to assist interested parties in making their own ev
Slide 2: Terms of Proposed Offering
Terms of Proposed Offering 2 Issuer: Eagle Bancorp, Inc. (“EGBN”) Security Type: [ ]% Fixed to Floating Rate Subordinated Notes Aggregate Principal Amount: $75 million Rating: BBB by Kroll Bond Rating Agency – Confirmed July 6, 2016 (Sub-Debt Holding Company Rating) Coupon: [ ]% during fixed rate pe
Slide 3: 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 20 branches Commercially-oriented business model with deep relationships of loans, core deposits and related products #1 in deposit mar
Slide 4: Investment Highlights
4 Investment Highlights Focused on Profitability and Balanced Financial Performance Strong Net Interest Margin = 4.30% Clean Asset Quality: NPAs/Assets = 0.39% Low Charge-Off History: NCOs/Average Loans = 0.15% Driven by Long-Term, Deep Customer Relationships Demonstrated Consistent Organic Growth S
Slide 5: Experienced Senior Management Team
Experienced Senior Management Team 5
Slide 6: EagleBank Branch Locations
EagleBank Branch Locations Montgomery County Prince George’s County Fairfax County Loudoun County Washington, DC N I-270 I-95 I-495 US 50 I-95 I-495 I-66 I-495 Branch System Virginia 9 Maryland 7 Washington, DC 4 Total 20 NOTE: Branch total as of June 30, 2016. Arlington Alexandria 7
Slide 7: 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 - Alexandria, Arlington, Fairfax, Fairfax (City), Falls Church, Loudoun, Manassas, Manassas Park, Prince William. Data excludes: E*Trade whose deposits are substantially fr
Slide 8: Performance Statistics
Performance Statistics NOTE: (1) Bank Holding Company Performance Report Peer Group represents companies with consolidated assets between $3 billion and $10 billion. Peer group 2016Q2 data not yet available. (2) Please refer to the Non-GAAP reconciliation and footnotes in the appendices on pages 34
Slide 9: Consistent Balance Sheet Growth
Consistent Balance Sheet Growth EGBN CAGR 22.0% NOTE: Virginia Heritage Bank acquisition closed on October 31, 2014. (1) Q3 2011 excludes the “settlement deposit.” (1) 10 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000 $5,500 $6,000 $6,500 Millions of Dollars 11Q2 11Q3 11Q4 12
Slide 10: Consistent Net Income Growth
Consistent Net Income Growth EGBN Net Income CAGR: 37.7% $24,145 11 NOTE: Virginia Heritage Bank acquisition closed on October 31, 2014. $4,500 $5,500 $6,500 $7,500 $8,500 $9,500 $10,500 $11,500 $12,500 $13,500 $14,500 $15,500 $16,500 $17,500 $18,500 $19,500 $20,500 $21,500 $22,500 $23,500 $24,500 T
Slide 11: 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. Peer group 2016Q2 data not yet available. Virginia Heritage Bank acquisition closed on October 31, 2014. 12
Slide 12: Yields and Cost of Funds
Yields and Cost of Funds NOTE: Bank Holding Company Performance Report Peer Group represents companies with consolidated assets between $3 billion and $10 billion. Peer group 2016Q2 data not yet available. Virginia Heritage Bank acquisition closed on October 31, 2014. 13
Slide 13: Earnings per Share
Earnings per Share 2011Y – 2015Y CAGR = 24.5% $2.50 14 $2.08 $1.76 $1.46 $1.04 NOTE: There was a 10% stock dividend paid on the common stock on June 14, 2013. Virginia Heritage Bank acquisition closed on October 31, 2014. EPS (Operating) for 2014 is net of merger related expenses; Please refer to th
Slide 14: Tangible Book Value per Share
Tangible Book Value per Share 2011Y – 2016YTD CAGR = 18.7% NOTE: Please refer to the Non-GAAP reconciliation and footnotes in the appendices on pages 34- 37. Virginia Heritage Bank acquisition closed on October 31, 2014. 15
Slide 15: Consistent Increases in Operating Leverage
Consistent Increases in Operating Leverage CAGR 21.4% CAGR 13.6% NOTE: Please refer to the Non-GAAP reconciliation and footnotes in the appendices on pages 34 - 37. Virginia Heritage Bank acquisition closed on October 31, 2014. Data for Q2, Q3, Q4 2014 are shown on an operating basis, net of merger
Slide 16: Consistently Improving Efficiency Ratio
Consistently Improving Efficiency Ratio Note: Bank Holding Company Performance Report Peer Group represents companies with consolidated assets between $3 billion and $10 billion. Peer group 2016Q2 data not yet available. Virginia Heritage Bank acquisition closed on October 31, 2014. Please refer to
Slide 17: Moderate Interest Rate Risk Position
18 Moderate Interest Rate Risk Position Source: FTN Quarterly IRR Report. Virginia Heritage Bank acquisition closed on October 31, 2014. Both assets and liabilities remain short with repricing durations at 24 months on loans and 30 months on deposits A 100 bps shock increase would increase Net Inter
Slide 18: Deposit Composition and Growth
(1) Core deposits include CDAR’s and ICS reciprocal deposits. Commercial focus drives growth of Noninterest Bearing Demand accounts Wholesale Deposits used to enhance favorable cost of funds, not a strategy to replace growth in core deposits Deposit Composition and Growth 19
Slide 19: Balanced Loan and Deposit Growth
Balanced Loan and Deposit Growth 20 NOTE: Virginia Heritage Bank acquisition closed on October 31, 2014.
Slide 20: Detail of Loan Portfolio
Detail of Loan Portfolio NOTE: Data as of June 30, 2016 Concentration in quality markets: Washington, DC, Montgomery County, Fairfax County Held for Sale residential mortgages not included 21
Slide 21: Credit Quality Trends
Credit Quality Trends 22 NOTE: Virginia Heritage Bank acquisition closed on October 31, 2014.
Slide 22: Consistent Asset Quality
Consistent Asset Quality Total Loans ($mms) 23 Note: 2016 YTD data through June 30, 2016. Virginia Heritage Bank acquisition closed on October 31, 2014.
Slide 23: CRE Risk Management
CRE Risk Management 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 24
Slide 24: CRE Concentration
CRE Concentration 25 (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. Peer group 2016Q2 data not yet available. (2) Represents CRE (excluding owner occupied) concentration
Slide 25: ADC Concentration
ADC Concentration 26 (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. Peer group 2016Q2 data not yet available. (2) Represents ADC concentration as a percentage of EGBN co
Slide 26: Capital Strength
Capital Strength $100 million of Common Equity raised through an underwritten offering in March 2015 $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 t
Slide 27: Holding Company Liquidity
Holding Company Liquidity 28 As of June 30, 2016, EGBN had $64 million of cash and cash equivalents at the holding company level. EGBN maintains a committed holding company line of credit in the amount of $50.0 million with a regional bank. Currently nothing is outstanding on this LOC.
Slide 28: Ratio of Earnings to Fixed Charges and Preferred Dividends
Ratio of Earnings To Fixed Charges And Preferred Dividends 29 (1) Assumes 5% coupon on $75 million offering.
Slide 29: 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 identifi
Slide 30: 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 Comprehensive Management and Board level reporting Human Res
Slide 31: EagleBank Growth Strategy
EagleBank Growth Strategy Profitability Pricing discipline to sustain Net Interest Margin Diligent expense control to maintain Efficiency Ratio Maintain Credit Quality Enhanced monitoring of portfolio Expanded stress testing Emphasis on Organic Growth Only 3.0% deposit market share in DC Metro Area
Slide 32: EagleBank Growth Strategy
EagleBank Growth Strategy Profitability Pricing discipline to sustain Net Interest Margin Diligent expense control to maintain Efficiency Ratio Maintain Credit Quality Enhanced monitoring of portfolio Expanded stress testing Emphasis on Organic Growth Only 3.0% deposit market share in DC Metro Area
Slide 33: Non-GAAP Reconciliation
Non-GAAP Reconciliation 34
Slide 34: Non-GAAP Reconciliation
‘Non-GAAP GAAP Reconciliation (Guandted) (dollars in thousands exept per share data) Common sharchollen’ equity Less: Intangibleassts Tangle common equity Book value per common share Less Intangible book vale per common share Tangitle book rae pr common share Total asses Less: Intangibleassts Tangle
Slide 35: Non-GAAP Reconciliation
‘Non-GAAP Reconciliation GAAP Reconciition Cnandiecd (das in thousands exept per shar dt) (Connon sharboles' equity Less: laangbleases Tuagie common ety Book va percomm sae ess atangl bok ae prcoomoe share Tait tok ale comme share Toalasses Less laangble assets Tui ase Taagie common ety ratio Decene
Slide 36: Non-GAAP Reconciliation Footnotes
Non-GAAP Reconciliation Footnotes 37
Slide 37: Market Information – Washington, DC MSA
38 Market Information –Washington, DC MSA Population 6.2 Million 5th largest market in the U.S. Employment 3.2 Million 68,000 new jobs created in last year Employment growth driven by private sector, over 295,000 new private sector jobs created over last five years Unemployment rate of 3.6% vs. US a
Slide 38: Greater Washington Economy
39 Greater Washington Economy NOTE: Other includes Health Care/Education and Media SOURCE: The Wall Street Journal, George Mason University - Center for Regional Analysis Total Federal Spending = 30% of GRP GRP Contribution by Sub-market Gross Regional Product $449 Billion Other 8.9% Non-Local Busin
Slide 39: Greater Washington Economy
Greater Washington Economy Gross Regional Product $449 Billion
Slide 40: Geographic Detail - Income Producing CRE
Geographic Detail - Income Producing CRE NOTE: Data as of June 30, 2016 Focus in core sub-markets: Washington, DC, Montgomery County, Fairfax County 41
Slide 41: Geographic Detail – Construction
Geographic Detail – Construction NOTE: Data as of June 30, 2016 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 42
Slide 42: Conservative Securities Portfolio
Portfolio has $9.0 million of net unrealized gains at June 30, 2016 No holdings of GSE equities or bank Trust Preferred or bank Trust Preferred CDOs Average life of portfolio is 3.7 years Excludes Federal Reserve and Federal Home Loan Bank stock Conservative Securities Portfolio 43
Slide 43: Nationally Recognized Financial Performance
Designated as a “Challenger” Bank 2015 Honor Roll of Community Banks 2010-2015 Nationally Recognized Financial Performance Community Bankers Cup Award 2012-2014 Ronald D. Paul named East Coast Region Community Banker of the Year 2014 Independent Community Bankers of America 44 “Top Investment Idea”
Slide 44: Highly Regarded by Bank Rating Firms
Highly Regarded by Bank Rating Firms FIRM BANK RATING 300/300 Green - *** BauerFinancial, Inc A- 45
Slide 45: Experienced Management Team
Experienced Management Team 46 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 Exec
Slide 46: Experienced Management Team
Experienced Management Team 47 Janice L. Williams, EVP, Chief Credit Officer Ms. Williams, Executive Vice President and Chief Credit Officer of the Bank, has served the Bank as Credit Officer, Senior Credit Officer and Chief Credit Officer for the past 11 years. Prior to employment with the Bank, Ms
Slide 47: Historical Income Statement
49 Historical Income Statement Virginia Heritage Bank acquisition closed on October 31, 2014. Data for 2014 is shown on an operating basis, net of merger related expenses; Please refer to the Non-GAAP reconciliation and footnotes in the appendices on pages 34 - 37.
Slide 48: Historical Income Statement
| Historical Income Statement (Detar Vales m Thousands except per share date) Year ‘Comper Growth ‘Tota Interest Income S19.124 $4196 $ 157294 S I9LS7SS2sKI89 212% 137579 “Total Inert Expense 20077 vane 12508, 13095 19238 _ (06%) 1167 ‘Net Interest Income or an Taam Rare Sa 2 Tae2 {Loan Los Provisio