Eagle Bancorp, Inc. · NASDAQ:EGBN
Eagle Bancorp — Q3 2024 Earnings Presentation
43 slides from Eagle Bancorp's earnings presentation, Oct 23, 2024
Slide 1: 3rd Quarter 2024 Earnings Presentation
3rd Quarter 2024 Earnings Presentation EagleBankCorp.com October 23, 2024 Scan for digital version
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: Attractive Washington DC Footprint
Attractive Washington DC Footprint 3 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 educat
Slide 4: Eagle at a Glance
Eagle at a Glance 4 Total Assets $11.3 billion Total Loans $8 .0 billion Total Deposits $8 . 5 billion Tangible Common Equity $1. 2 billion Shares Outstanding (at close September 30, 2024) 30,173,200 Market Capitalization (at close October 22, 2024) $697 million Tangible Book Value per Common Share
Slide 5: Quarter highlights: capital, asset quality, efficiency
5 NOTE: Data at or for the quarter ended September 30, 2024 1 - Please refer to the Non-GAAP reconciliation in the appendix. 2 - Include cash and cash equivalents. • Best-in-Class Capital Levels and Clean Asset Quality o CET1 Ratio = 14.54% Top quartile of all bank holding companies with $10 billion
Slide 6: Strategies Driving Growth and PPNR
1.98% 1.66% 1.63% 1.44% 1.37% 1.31% 1.27% 1.15% 1.14% 1.13% 1.03% 0.99% 0.94% 0.93% 0.90% 0.82% 0.62% 0.36% Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 EGBN Peer 10 Peer 11 Peer 12 Peer 13 Peer 14 Peer 15 Peer 16 Peer 17 Operating PPNR / Avg Assets1 Improving Operating Pre-Provisi
Slide 7: Key Strategic Objectives
Key Strategic Objectives 7 • Proactive Management of Office and Multi-family Portfolios o Continue to have expert teams regularly assess exposures and relationship managers proactively reach out to clients well in advance of maturities to achieve results beneficial to both the Bank and the borrower.
Slide 8: Eagle – Capital Levels vs. Peers
8.9% 7.2% 6.8% 6.4% 6.2% 5.8% 4.2% 4.0% 3.4% 3.0% 2.9% 2.9% 2.6% 1.8% 1.8% 1.7% 1.4% 1.3% Peer 1 EGBN Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Peer 12 Peer 13 Peer 14 Peer 15 Peer 16 Peer 17 Excess CET1 + ACL / Total Loans Eagle – Capital Levels vs. Peers 8 1-Please re
Slide 9: Eagle – Liquidity Position vs. Peers
72% 72% 74% 28% 28% 26% $8,501 $8,267 $8,541 3/31/2024 6/30/2024 9/30/2024 ($ in m ill io n s) Insured Deposit Exposure Trend Insured Uninsured 31.9% 28.7% 24.7% 23.9% 22.4% 17.8% 15.9% 15.0% 13.3% 12.1% 6.1% 4.9% 3.9% 3.8% 2.9% 2.0% 1.8% 1.1% Peer 1 Peer 2 Peer 3 EGBN Peer 4 Peer 5 Peer 6 Peer 7 Pe
Slide 10: Performance Measures
Performance Measures 10 1-Please refer to the Non-GAAP reconciliation and footnotes in the appendices. Operating PPNR/Average Assets and returns are annualized. For the periods above, return on average common equity 8.80% (2023Q3), 6.48% (2023Q4) (0.11)% (2024Q1), (26.60)% (2024Q2), and 7.22% (2024Q
Slide 11: Net Interest Income
Net Interest Income 11 NII Increase and NIM Decline Net Interest Income • Interest income increased $4.1 million quarter over quarter as higher cash balances resulted in higher interest income. • Interest expense increased $3.6 million due to higher average interest-bearing deposits and higher rates
Slide 12: Operating Net Income – Summary
Operating Net Income – Summary 12 Operating Net Income Drivers Net interest income Net interest income up $0.5 million, primarily driven by an increase in the average balances of deposits held with other banks. Provision for Credit Losses (“PCL”) The increase in the provision quarter over quarter re
Slide 13: 2024 & 2025 Outlook
2024 & 2025 Outlook 13 1 – The forecasted increase is based off 2023 figures for the same measure 2 – The forecasted increase is based off forecasted 2024 figures for the same measure 3 – The effective tax rate is forecasted on an operating basis excluding the loss associated with the goodwill impai
Slide 14: Outlook Variables & Risks
Outlook Variables & Risks 14 Notes: Outlook 2024Y and 2025Y represents forward-looking statements and are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Please see “Forward Looking Statements” on page 2. Variables & RisksCo
Slide 15: Deposit Cost Analysis and Mix
3.14% 3.28% 3.36% 3.35% 3.40% 4.73% 4.61% 4.75% 5.07% 5.03% 4.30% 4.30% 4.37% 4.45% 4.47% 2023Q3 2023Q4 2024Q1 2024Q2 2024Q3 Cost Analysis Total Deposit Cost Borrowings Total IBL Cost Deposit Mix and Trend 15 Total Period End Deposits increased $165 million Year-over-Year CDs Savings & money market
Slide 16: Funding & Liquidity
85.7% 86.3% 83.3% 83.0% 86.4% 14.3% 13.7% 16.7% 17.0% 13.6% $9,772 $10,209 $10,208 $9,967 $9,889 2023Q3 2023Q4 2024Q1 2024Q2 2024Q3 in m ill io n s Deposits & Borrowings Deposits Borrowings (includes customer repos) Funding & Liquidity 16 Funding & Liquidity Summary Deposits Period end deposits were
Slide 17: Office Loans: Mix and Risk Rating Trend
5,423 4,049 2023Q3 2023Q4 2024Q1 2024Q2 2024Q3 134% 112% 106% 86% 79% 67% 61% 59% 59% 50% 50% 29% 26% 22% Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 EGBN Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Peer 12 Peer 13 Excess CET1+ACL/ Non-Owner Occupied Office Loans 17 As of September 30, 2024 Note: Proxy Peers
Slide 18: CRE Office - Maturity Schedule
$209 $8 $33 $29 $9 $308 $165 $105 2024 2025 Q1 2025 Q2 2025 Q3 2025 Q4 2026 2027 2028+ (i n m ill io n s) CRE Office - Maturity Schedule 18 1 - DSCR is calculated based on contractual principal and interest payments and only considers cash flow from primary sources of repayment. 2 – Includes one $53
Slide 19: Multi-Family - Maturity Schedule
$27 $9 $232 $73 $38 $153 $188 $154 2024 2025 Q1 2025 Q2 2025 Q3 2025 Q4 2026 2027 2028+ (i n m ill io n s) Inc Producing Multi-Family - Maturity Schedule 19 1 - DSCR is calculated based on contractual principal and interest payments and only considers cash flow from primary sources of repayment. Mul
Slide 20: Loan Mix and Trend
Loan Mix and Trend 20 Commercial Owner-Occupied CRE Construction – comm& residential. Home Equity Other Consumer Construction C&I (owner-occupied) Office Income producing CRE (excluding office if applicable)
Slide 21: Classified and Criticized Loans
$219 $336 $362 $408 $391 $158 $207 $265 $308 $365 $377 $543 $627 $716 $756 2023Q3 2023Q4 2024Q1 2024Q2 2024Q3 (i n m ill io n s) Substandard Special mention % of loans 21 Loan Type and Classification 1-Includes land. Quarter-over-Quarter Change Special Mention • C&I -$2.0 million • CRE +$59.1 millio
Slide 22: Asset Quality Metrics
0.64% 0.57% 0.79% 0.88% 1.22% 2023Q3 2023Q4 2024Q1 2024Q2 2024Q3 NPAs2 / Assets Asset Quality Metrics 22 1-Excludes loans held for sale. 2-Non-performing assets (“NPAs”) include loans 90 days past due and still accruing. Charts for Allowance for Credit Losses and NPAs are as of period end. Net Charg
Slide 23: Appendices
Appendices @EAGLE BANCORB INC. 23
Slide 24: Nonaccrual Loans
24 Nonaccrual Loans • How do loans end up on nonaccrual status? o Appraisal: For collateral dependent loans, new appraisals received as the loan approaches maturity below loan amount. Loans charged-down to 100% of new appraisal less estimated selling costs. Such loans could be receiving full P&I pay
Slide 25: Summary of Classified and Criticized Loans
25 Summary of Classified and Criticized Loans 1 – Loan collateral is a project that is either recently completed and in lease up, not yet stabilized, under development, or in process of conversion
Slide 26: Top Loans
26 Top 25 Loans 1 – Mixed collateral commercial real estate 2 – Construction in process Note: Data as of September 30, 2024
Slide 27: Total CRE Office Loan Portfolio
Total CRE Office Loan Portfolio (Excludes OOCRE & OO Construction) 27 Only 3 Office Loans with Substandard Risk Ratings are on Nonaccrual for a total balance of $65.8 million out of Total NPAs of $137.1 million. 1 – Loan risk grade categories: 1000 – Prime, 2000 – Excellent (“Excel.”), 3000 – Good,
Slide 28: Washington DC Office
Washington DC Office (Income Producing CRE & Construction) 28 • $220.9 Million Total Outstanding Balance o 10 Income Producing CRE = $217.3 million o 1 Income Producing Construction CRE loan = $3.6 million o 11 Total Washington DC Office Loans Median size = $13.2 million Average size = $20.1 mil
Slide 29: Multifamily Loan Portfolio
Multifamily Loan Portfolio 29 • Zero Multifamily Loans on Nonaccrual Status • 99 Total Multifamily Loans • $1.8 Billion in Outstanding Balances with Multifamily as Collateral o Median size = $7.3 million o Average size = $18.2 million • 93 Loans with $1.7 Billion in Balances with Average Risk Rating
Slide 30: Underwriting, Credit Management and Risk Mitigation
Underwriting, Credit Management and Risk Mitigation 30 • History of Solid Credit Metrics • Strong Underwriting and Portfolio Management Functions • Internal Annual Review on a Loan-by-Loan Basis • Quarterly Portfolio Stress Testing and Covenant Monitoring • Quarterly Independent 3rd Party Loan Revie
Slide 31: Credit Quality Since 1998
Credit Quality Since 1998 28.73% 12.44% 12.23% 10.32% 10.61% 40-12% 12.08% 40.58% 9.68% 9.43% 9.59% oars 204 lo. o.00% 9.02% 0.02% 0.01% 1 0.00% 0.0% goim 0.08% 0.03% 0.02% 0.00% 0.01% 19@8 1988 2000 2001 2002 2003 2004 2005 2006 2007 2008 2008 2010 2011 2012 2013 2014 2015 2016 2017 2018 2018 2020
Slide 32: CRE Construction Portfolio
CRE Construction Portfolio 32 • $1.18 Billion Total Outstanding Balance: o 82 CRE Ground Up Construction $1043.9 million o 32 CRE Renovation $132.4 million o 8 Consumer Construction $ 9.3 million o 122 Total Construction Loans Median size = $1.8 million Average size = $9.7 million • 119 Loans Ri
Slide 33: Hotel Loan Portfolio
Hotel Loan Portfolio 33 • Zero Hotel Loans on Nonaccrual Status • $413.7 Million in Outstanding Balances with Hotels as Collateral (Includes Construction CRE) o Median size = $11.0 million o Average size = $18.8 million • 22 Total Hotel Loans • 21 Loans with Average Risk Rating = Pass • 1 Criticized
Slide 34: Investment Portfolio
Investment Portfolio 34 Investment Portfolio Strategy • Portfolio positioned to manage liquidity and pledging needs • Cash flow projected principal only (rates unchanged): o Remainder of 2024 - $169 million o 2025 - $401 million • Total securities down $55 million from 6/30/2024 from principal paydo
Slide 35: Tangible Book Value Per Share
Tangible Book Value Per Share 35 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 3.5% and excluded was 6.6% for the period from December 31, 2020, through September 30, 2024. Book va
Slide 36: Loan Portfolio - Details
Loan Portfolio - Details 36 Note: Loan metrics not inclusive of deferrals, fees and other adjustments. Data as of September 30, 2024.
Slide 37: Loan Portfolio – Income Producing CRE
Loan Portfolio – Income Producing CRE 37 Note: Loan metrics not inclusive of deferrals, fees and other adjustments. Data as of September 30, 2024.
Slide 38: Loan Portfolio – CRE Construction
Loan Portfolio – CRE Construction 38 Note: Loan metrics not inclusive of deferrals, fees and other adjustments. Data as of September 30, 2024
Slide 39: Non-GAAP Reconciliation (unaudited)
39 Non-GAAP Reconciliation (unaudited)
Slide 40: Non-GAAP Reconciliation (unaudited)
40 Non-GAAP Reconciliation (unaudited)
Slide 41: Non-GAAP Reconciliation (unaudited)
41 Non-GAAP Reconciliation (unaudited)
Slide 42: Non-GAAP Reconciliation (unaudited)
42 Non-GAAP Reconciliation (unaudited)
Slide 43: Non-GAAP Reconciliation (unaudited)
43 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 equit