Eagle Bancorp, Inc. · NASDAQ:EGBN
Eagle Bancorp — Sandler O'Neill + Partners East Coast Financial Services Conference 2018
48 slides from Eagle Bancorp's conference presentation, Nov 6, 2018
Slide 1: Sandler O'Neill + Partners East Coast Financial Services Conference
Sandler O’Neill + Partners East Coast Financial Services Conference November 6&7, 2018 Ticker: EGBN www.EagleBankCorp.com
Slide 2: Forward Looking Statements
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
Slide 3: Company Overview
Company Overview ▪ Eagle Bancorp, Inc. is a growth - oriented community bank focused on the Washington, DC metropolitan area ▪ Commercially - oriented business model with deep relationships of loans, core deposits and related products ▪ S treamlined network of 20 branches located in Northern Virgini
Slide 4: Investment Highlights
Investment Highlights ▪ Focused on Profitability and Balanced Financial Performance ▪ Strong Net Interest Margin = 4.14% ▪ DDA’s as a percentage of Deposit Mix = 32.29% ▪ Operating Leverage with streamlined branch system: Efficiency Ratio = 36.37% ▪ Clean Asset Quality: NPAs/Assets = 0.20% ▪ Low Cha
Slide 5: Experienced Senior Management Team
Experienced Senior Management Team 5 Years Years in with Name Title/Function Banking EGBN Ronald D. Paul Chairman, President & CEO 31 20 Susan G. Riel Sr. EVP & COO - EagleBank, EVP Eagle Bancorp 42 20 Charles D. Levingston EVP & Chief Financial Officer - Eagle Bancorp & EagleBank 18 7 Antonio F. Ma
Slide 6: Summary Statistics
Summary Statistics 6 Total Assets: $8.1 billion Total Loans: $6.8 billion Total Deposits: $6.4 billion Tangible Common Equity: $955.2 million (1) Tangible Book Value per Common Share: $27.84 (1) Shares Outstanding (at close October 31, 2018): 34,348,624 Market Capitalization (at close October 31, 20
Slide 7: EagleBank Branch Locations
EagleBank Branch Locations 7 Loudoun County Fairfax County I - 66 I - 495 I - 95 Alexandria Arlington I - 495 N US 50 Washington, DC Prince George’s County I - 495 I - 95 Montgomery County I - 270 Branch System Virginia 9 Maryland 6 Washington, DC 5 Total 20 NOTE: Branch total as of September 30, 20
Slide 8: Deposit Market Share
Deposit Market Share 8 (Dollar values in thousands) Washington, DC Metropolitan Area Local June 30, June 30, 2018 Community 2017 2018 Annual Market Rank Banks Company Name Branches Balance Balance Growth Share 1 Bank of America Corp. 153 31,960,708 36,020,840 12.7% 17.3% 2 Capital One Financial Corp
Slide 9: Performance Statistics
Performance Statistics 9 Peer Group (1) Key Ratios (at or for the period ended) 2013Y 2014Y 2015Y 2016Y 2017Y 2018Q1 2018Q2 2018Q3 2018Q2 ■ Net Interest Margin 4.30% 4.44% 4.33% 4.16%* 4.15% 4.17% 4.15% 4.14% 3.55% ■ Efficiency Ratio 49.90% 50.67% 42.49% 40.29% 37.84% 38.38% 38.55% 36.37% 61.60% ■ N
Slide 10: Consistent Balance Sheet Growth
Consistent Balance Sheet Growth 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 $7,000 $7,500 $8,000 $8,500 Millions of Dollars 13Q3 13Q4 14Q1 14Q2 14Q3 14Q4 15Q1 15Q2 15Q3 15Q4 16Q1 16Q2 16Q3 16Q4 17Q1 17Q2 17Q3 17Q4 18Q1 18Q2 18Q3 Total Assets $8,058
Slide 11: Consistent Net Income Growth
Consistent Net Income Growth 11 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 Thousands of Dollars 13Q3 13Q4 14Q1 14Q2 14Q3 14Q4 15Q1 15Q2 15Q3 15Q4 16Q1 16Q2 16Q3 16Q4 17Q1 17Q2 17Q3 17Q4 18Q1 18Q2 18Q3 Net Income Available to Common SBLF Dividend $38,948 NOTE: Virginia Heritage Ba
Slide 12: Earnings Per Share
$0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 EPS (Reported) EPS (Operating) $2.92 Earnings Per Share 12 $1.95 $1.76 $2.08 $2.50 $2.86 $3.35 $1.04 $1.08 $1.13 NOTE: There was a 10% stock dividend paid on the common stock on June 14, 2013 . Virginia Heritage Bank acquisition closed on October
Slide 13: Tangible Book Value per Share
Tangible Book Value per Share 13 $12.89 $14.56 $18.83 $21.61 $24.67 $27.84 $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 2013Y 2014Y 2015Y 2016Y 2017Y 2018YTD NOTE: P lease refer to the Non - GAAP reconciliation and footnotes in the appendices on pages 32 - 35. Virginia Heritage Bank acquisition cl
Slide 14: Net Interest Margin
Net Interest Margin 14 4.30% 4.44% 4.33% 4.16% 4.15% 4.17% 4.15% 4.14% 3.56% 3.58% 3.49% 3.48% 3.53% 3.54% 3.55% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 2013Y 2014Y 2015Y 2016Y 2017Y 2018Q1 2018Q2 2018Q3 EGBN Peer Group NOTE: Bank Holding Company Performance Report Peer Group represents companies
Slide 15: Yields and Cost of Funds
0.37% 0.33% 0.36% 0.44% 0.58% 0.73% 0.96% 1.07% 0.52% 0.45% 0.42% 0.44% 0.54% 0.65% 0.70% 0.00% 0.25% 0.50% 0.75% 1.00% 1.25% 2013Y 2014Y 2015Y 2016Y 2017Y 2018Q1 2018Q2 2018Q3 Cost of Funds EGBN Peer Group Yields and Cost of Funds 15 4.67% 4.77% 4.69% 4.60% 4.73% 4.90% 5.11% 5.21% 4.13% 4.06% 3.93%
Slide 16: Moderate Interest Rate Risk Position
Moderate Interest Rate Risk Position 16 (Dollar value in thousands) Interest Rate Indicators and Trends 2013Y 2014Y 2015Y 2016Y 2017Y 2018Q1 2018Q2 2018Q3 Repricing Duration of Assets and Liabilities (months) Investments 50 49 47 43 41 40 37 38 Loans 26 27 25 23 17 16 16 16 Deposits 32 34 32 27 26 2
Slide 17: Consistent Increases in Operating Leverage
Consistent Increases in Operating Leverage 17 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 Revenue ($000s) Non-Int Expense ($000s) NOTE: P lease refer to the Non - GAAP reconciliation and footnotes in the appendices on pages 32 - 35. Virginia Heritage Bank acquisition c
Slide 18: Consistently Improving Efficiency Ratio
Consistently Improving Efficiency Ratio 18 Note: Bank Holding Company Performance Report Peer Group represents companies with consolidated assets between $3 billion an d $ 10 billion. Virginia Heritage Bank acquisition closed on October 31, 2014. P lease refer to the Non - GAAP reconciliation and fo
Slide 19: Deposit Composition and Growth
Deposit Composition and Growth 19 (Dollar Values in Thousands) Deposit Type % of % of % of Balance Total Balance Total Balance Total Noninterest Bearing 1,843,157$ 31.2% 1,982,912$ 33.9% 2,057,886$ 32.3% Interest Bearing Transaction 429,247 7.3% 420,417 7.2% 459,455 7.2% Core Savings & Money Market
Slide 20: Detail of Loan Portfolio
Detail of Loan Portfolio 20 (Dollar Value in Thousands) County C&I Owner Occupied CRE Income Producing CRE CRE Bridge Financing Owner Occupied Const. CRE Construction Land Residential Mortgage Consumer TOTAL % of Total Maryland Montgomery 363,722$ 158,097$ 243,013$ 219,076$ 15,298$ 119,191$ 657$ 22,
Slide 21: Credit Quality Trends
Credit Quality Trends 21 (Dollar Values in Thousands) 2013Y 2014Y 2015Y 2016Y 2017Y 2018Q1 2018Q2 2018Q3 Nonperforming Assets: Accruing Loans 90 or More Days Past Due -$ -$ -$ -$ -$ -$ -$ -$ Nonaccrual 24,702 22,443 13,239 17,875 13,238 13,388 10,876 15,077 Total Nonperforming Loans (NPLs) 24,702$ 2
Slide 22: Consistent Asset Quality
Consistent Asset Quality 22 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 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 Sep- 14 Dec- 14 Mar- 15 Jun- 15 Sep- 15 Dec- 15 Mar- 16 Jun- 16 Sep- 16 Dec- 16 Mar- 17 Jun- 17 Sep- 17 Dec- 17 Mar- 18 Jun- 18 Sep- 18 Tota
Slide 23: Strength in C&I Lending
Strength in C&I Lending 23 At 22% of the Loan Portfolio, EagleBank has a much larger presence in C&I Lending than other local peer banks C&I Loan Portfolio is predominantly variable rate loans 29% Annual growth rate of Owner Occupied Loans, which are key to small and mid - market relationships
Slide 24: CRE Risk Management
CRE Risk Management 24 Executive & Board Level Oversight of Approval Process Disciplined Underwriting Proactive Portfolio Management Quarterly Stress Testing of CRE Portfolio Quarterly Independent Credit Review Dedicated Special Assets Team
Slide 25: CRE Concentration
CRE Concentration 25 (Dollar Values in Thousands) 2009Y 2010Y 2011Y 2012Y 2013Y 2014Y* 2015Y 2016Y 2017Y 2018Q1 2018Q2 2018Q3 Total CRE Portfolio (excl Own Occ) 820,442$ 909,058$ 1,147,897$ 1,431,984$ 1,660,266$ 2,453,662$ 2,978,550$ 3,246,636$ 3,900,263$ 4,035,641$ 4,030,675$ 4,148,521$ CRE/Total L
Slide 26: ADC Concentration
ADC Concentration 26 (Dollar Values in Thousands) 2009Y 2010Y 2011Y 2012Y 2013Y 2014Y* 2015Y 2016Y 2017Y 2018Q1 2018Q2 2018Q3 Total ADC Portfolio 252,494$ 327,718$ 448,470$ 539,069$ 628,880$ 798,241$ 909,654$ 976,599$ 1,413,922$ 1,433,297$ 1,413,671$ 1,456,154$ ADC/Total Loans (1) 18.00% 18.66% 18.6
Slide 27: Capital Strength
Capital Strength 27 (Dollar Values in Thousands) 2013Y 2014Y 2015Y 2016Y 2017Y 2018Q1 2018Q2 2018Q3 Total Assets 3,771,503$ 5,247,880$ 6,075,577$ 6,890,096$ $ 7,493,617* 7,698,060$ 7,880,017$ 8,057,855$ Total Common Stockholders' Equity 337,263$ 548,859$ 738,601$ 842,799$ $ 965,026* 985,180$ 1,023,1
Slide 28: Key Success Factors
Key Success Factors 28 ▪ 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 Portfolio is balanced among C&I, CRE and Con
Slide 29: Key Success Factors (continued)
Key Success factors (continued) 29 Disciplined ALCO process Maintained focus on areas of strength o Concentration on core geographic markets and products P roper infrastructure to support the increased volume of business and regulation Comprehensive Management and Board level reporting Hum
Slide 30: EagleBank Growth Strategy
EagleBank Growth Strategy 30 Profitability • Pricing discipline to sustain Net Interest Margin • Prudent expense management with streamlined branch system to maintain Efficiency Ratio Sustain Credit Quality • Maintain balanced portfolio mix: C&I, CRE and Construction • Enhanced monitoring of ind
Slide 31: EGBN Stock Price Performance
EGBN Stock Price Performance 31 Total Return Performance 1 Year 3 Year 5 Year EGBN (26.2%) 3.3% 85.9% NASDAQ Bank Stock Index (6.6%) 28.8% 52.1% NASDAQ Stock Market Index 8.6% 44.6% 86.4% S & P 500 Index 5.3% 30.4% 54.4% SOURCE: SNL Financial, Chart and calculations as of close of trading on October
Slide 32: Appendices
Appendices 32
Slide 33: Non-GAAP Reconciliation
Non - GAAP Reconciliation 33 GAAP Reconciliation (Unaudited) (dollars in thousands except per share data) December 31, 2017 March 31, 2018 June 30, 2018 September 30, 2018 Common shareholders' equity 950,438$ 985,180$ 1,023,137$ 1,061,651$ Less: Intangible assets (107,212) (107,097) (106,820) (106,4
Slide 34: Non-GAAP Reconciliation
Non - GAAP Reconciliation 34 GAAP Reconciliation (Unaudited) (dollars in thousands except per share data) December 31, 2013 December 31, 2014 December 31, 2015 December 31, 2016 December 31, 2017* Common shareholders' equity 337,263$ 548,859$ 738,601$ 842,799$ 965,026$ Less: Intangible assets (3,510
Slide 35: Non-GAAP Reconciliation
Non - GAAP Reconciliation 35 Eagle Bancorp, Inc. GAAP Reconciliation (Unaudited) (dollars in thousands except per share data) GAAP Change Non-GAAP GAAP Change Non-GAAP Income Statements: Income tax expense 35,395 (14,588) 20,807 85,504 (14,588) 70,916 Net income 15,569$ 14,588 30,157$ 100,232$ 14,58
Slide 36: Non-GAAP Reconciliation
Non - GAAP Reconciliation 36 (1) 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 o
Slide 37: Market Information – Washington, DC MSA
Market Information – Washington, DC MSA 37 Population 6.2 Million □ 6 th largest market in the U.S. Employment 3.3 Million □ 65,000 new jobs created in 12 months ended August, 2018 □ Employment growth driven by private sector, over 220,000 net new private sector jobs created over last five years
Slide 38: Greater Washington Economy
Greater Washington Economy 38 Total Federal Spending = 30% of GRP GRP Contribution by Sub - market 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% Suburban Maryland 28.0% District of Columbia
Slide 39: Loan Portfolio and Growth
Loan Portfolio and Growth 39 (Dollar Values in Thousands) Annual Growth Rate Loan Type Balance % of Total Balance % of Total Balance % of Total % Commercial and Industrial 1,244,184$ 20.4% 1,375,939$ 21.5% 1,493,577$ 21.8% 20.0% Commercial Real Estate: Owner Occupied 749,580 12.3% 755,444 11.8% 863,
Slide 40: Geographic Detail – Income Producing CRE
Geographic Detail – Income Producing CRE 40 (Dollar Value in Thousands) Single Office/ Redevel./ Mixed & 1-4 Multi- County Hotel Condo Retail Use Single & 1-4 Family Family Industrial Other TOTAL % of Total Maryland Montgomery 14,105$ 53,488$ 24,916$ 86,512$ 10,723$ 19,198$ 15,272$ 18,799$ 243,013$
Slide 41: Geographic Detail – Construction
Geographic Detail – Construction 41 (Dollar Value in Thousands) Single Residential & 1-4 Multi- Mixed County Condo Single & 1-4 Family Family Office Use Hotel Retail Other TOTAL % of Total Maryland Montgomery 28,898$ 54,208$ -$ 19,491$ -$ -$ -$ 16,594$ 119,191$ 12.1% Prince George's - 4,098 26,986 -
Slide 42: Conservative Securities Portfolio
Conservative Securities Portfolio 42 (Dollar Values in Thousands) September 30, 2018 Gross Gross Estimated Amrt. Cost Amortized Unrealized Unrealized Fair % of Total Security Type Cost Gain Losses Value Securities US Government Agency Securities $236,853 $0 $6,528 $230,325 31.9% Mortgage Backed Secu
Slide 43: Nationally Recognized Financial Performance
Nationally Recognized Financial Performance 43 ▪ “Top Investment Idea” Recommendation 2012 ▪ “Sm - All Stars” Designation 2011, 2013, 2014, 2015, 2016 & 2017 ▪ Designated as a “Challenger” Bank 2015 & 2016 ▪ Member of KBW Bank Honor Roll 2010 - 2018 ▪ Ronald D. Paul named East Coast Region Community
Slide 44: Highly Regarded by Bank Rating Firms
Highly Regarded by Bank Rating Firms 44 FIRM BANK RATING B AUER F INANCIAL , I NC A - 300/300 Green - ***
Slide 45: Experienced Management Team
Experienced Management Team 45 R onald 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 E xec utive Officer since the organization of the Company. Since June 2006, he has served as Chief E
Slide 46: Experienced Management Team (continued)
Experienced Management Team (continued) 46 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 Cr edi t Officer and Chief Credit Officer for the past 11 years. Prior to employment wit
Slide 47: Historical Balance Sheet
Historical Balance Sheet 47 (Dollar Values in Thousands) 2013Y 2014Y 2015Y 2016Y 2017Y* 5 Year Compound Growth Rate 2018YTD Assets Cash and Equivalents $306,960 $256,025 $298,363 $368,163 $190,473 (10.9%) $184,477 Securities Available for Sale 389,405 404,903 504,772 559,708 625,592 15.0% 759,931 To
Slide 48: Historical Income Statement
Historical Income Statement 48 (Dollar Values in Thousands, except per share data) 2013Y 2014Y* 2015Y 2016Y 2017Y** 5 Year Compound Growth Rate 2018YTD Total Interest Income 157,294$ 191,573$ 253,180$ 285,805$ 324,034$ 17.9% 287,705$ Total Interest Expense 12,504 13,095 19,238 27,641 40,147 22.7% 52
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