Eagle Bancorp, Inc. · NASDAQ:EGBN
Eagle Bancorp — Investor Presentation (May 2018)
48 slides from Eagle Bancorp's investor presentation, May 11, 2018
Slide 1: Investor Presentation May 2018
Ticker: EGBN www.EagleBankCorp.com Investor Presentation May 2018
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
Slide 3: Company Overview
2 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
Slide 4: Investment Highlights
3 Investment Highlights ▪ Focused on Profitability and Balanced Financial Performance ▪ Strong Net Interest Margin = 4.17% ▪ Clean Asset Quality: NPAs/Assets = 0.19% ▪ Low Charge - Off History: NCOs/Average Loans = 0.06% ▪ Driven by Long - Term, Deep Customer Relationships ▪ Demonstrated Consistent
Slide 5: Experienced Senior Management Team
Experienced Senior Management Team 4 Years Years in with Name Title/Function Banking EGBN Ronald D. Paul Chairman, President & CEO 30 19 Susan G. Riel Sr. EVP & COO - EagleBank, EVP Eagle Bancorp 41 19 Charles D. Levingston EVP & Chief Financial Officer - Eagle Bancorp & EagleBank 17 6 Antonio F. Ma
Slide 6: Summary Statistics
5 Summary Statistics NOTE: Data as - of March 31, 2018 unless otherwise noted. (1) Please refer to the Non - GAAP reconciliation and footnotes in the a ppendices on pages 32 - 35. Total Assets: $7.7 billion Total Loans: $6.6 billion Total Deposits: $6.1 billion Tangible Common Equity: $878.1 million
Slide 7: 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 6 Washington, DC 5 Total 20 NOTE: Branch total as of March 31, 2018. Arlington Alexandria 6
Slide 8: Washington, DC Metropolitan Area Deposit Market Share
(Dollar values in thousands) Washington, DC Metropolitan Area Local June 30, June 30, 2017 Community 2016 2017 Annual Market Rank Banks Company Name Branches Balance Balance Growth Share 1 Bank of America Corp. 153 30,275,134 31,960,708 5.6% 16.1% 2 Wells Fargo & Co. 163 31,872,851 31,634,621 -0.7%
Slide 9: Performance Statistics
Performance Statistics NOTE: (1) Bank Holding Company Performance Report Peer Group represents companies with consolidated assets between $3 billion an d $10 billion. (2) Please refer to the Non - GAAP reconciliation and footnotes in the appendices on pages 32 - 35. * Impact of July 2016 Sub - Debt
Slide 10: 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 $6,000 $6,500 $7,000 $7,500 $8,000 Millions of Dollars 13Q1 13Q2 13Q3 13Q4 14Q1 14Q2 14Q3 14Q4 15Q1 15Q2 15Q3 15Q4 16Q1 16Q2 16Q3 16Q4 17Q1 17Q2 17Q3 17Q4 18Q1 Total Assets Consistent Balance Sheet Growth NOTE: Virginia He
Slide 11: Consistent Net Income Growth
$5,000 $7,500 $10,000 $12,500 $15,000 $17,500 $20,000 $22,500 $25,000 $27,500 $30,000 $32,500 $35,000 $37,500 Thousands of Dollars 13Q1 13Q2 13Q3 13Q4 14Q1 14Q2 14Q3 14Q4 15Q1 15Q2 15Q3 15Q4 16Q1 16Q2 16Q3 16Q4 17Q1 17Q2 17Q3 17Q4 18Q1 Net Income Available to Common SBLF Dividend Consistent Net Inco
Slide 12: Net Interest Margin
4.30% 4.44% 4.33% 4.16% 4.15% 4.17% 3.56% 3.58% 3.49% 3.48% 3.53% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 2013Y 2014Y 2015Y 2016Y 2017Y 2018Q1 EGBN Peer Group Net Interest Margin NOTE: Bank Holding Company Performance Report Peer Group represents companies with consolidated assets between $3 billi
Slide 13: Yields and Cost of Funds
0.37% 0.33% 0.36% 0.44% 0.58% 0.73% 0.52% 0.45% 0.42% 0.44% 0.54% 0.00% 0.25% 0.50% 0.75% 1.00% 2013Y 2014Y 2015Y 2016Y 2017Y 2018Q1 Cost of Funds EGBN Peer Group 4.67% 4.77% 4.69% 4.60% 4.73% 4.90% 4.13% 4.06% 3.93% 3.93% 4.06% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 5.50% 2013Y 2014Y 2015Y 2016Y
Slide 14: Earnings per Share
$2.92 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 2013Y 2014Y 2015Y 2016Y 2017Y 2018Q1 EPS (Reported) EPS (Operating) $2.92 Earnings per Share $2.50 13 $2.08 $1.76 NOTE: There was a 10% stock dividend paid on the common stock on June 14, 2013. Virginia Heritage Bank acquisition closed on O
Slide 15: Tangible Book Value per Share
$12.89 $14.56 $18.83 $21.61 $24.67 $25.60 $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 2013Y 2014Y 2015Y 2016Y 2017Y 2018YTD Tangible Book Value per Share NOTE: Please refer to the Non - GAAP reconciliation and footnotes in the appendices on pages 32 - 35. Virginia Heritage Bank acquisition closed
Slide 16: Consistent Increases in Operating Leverage
$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) Consistent Increases in Operating Leverage NOTE: P lease refer to the Non - GAAP reconciliation and footnotes in the appendices on pages 32 - 35. Virginia Heritage Bank acquisition clos
Slide 17: Consistently Improving Efficiency Ratio
Consistently Improving Efficiency Ratio 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 footn
Slide 18: Moderate Interest Rate Risk Position
17 Moderate Interest Rate Risk Position Virginia Heritage Bank acquisition closed on October 31, 2014. ▪ Both assets and liabilities remain short with repricing durations at 16 months on loans and 22 months on deposits ▪ A 100 bps shock increase would increase Net Interest Income by about $16.4 mill
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 18 (Dollar Values in Th
Slide 20: Consistent Loan and Deposit Growth
Consistent Loan and Deposit Growth 19 NOTE: Virginia Heritage Bank acquisition closed on October 31, 2014. $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 $ in Billions Total Loans Total Deposits
Slide 21: Detail of Loan Portfolio
Detail of Loan Portfolio NOTE: Data as of March 31, 2018 Concentration in quality markets: Washington, DC, Montgomery County, Fairfax County Held for Sale residential mortgages not included 20 (Dollar Value in Thousands) County C&I Owner Occupied CRE Income Producing CRE CRE Bridge Financing Own
Slide 22: Credit Quality Trends
Credit Quality Trends 21 NOTE: Virginia Heritage Bank acquisition closed on October 31, 2014. (Dollar Values in Thousands) 2013Y 2014Y 2015Y 2016Y 2017Y 2018Q1 Nonperforming Assets: Accruing Loans 90 or More Days Past Due -$ -$ -$ -$ -$ -$ Nonaccrual 24,702 22,443 13,239 17,875 13,238 13,388 Total N
Slide 23: Consistent Asset Quality
Consistent Asset Quality Total Loans ($mms) 22 Note: Virginia Heritage Bank acquisition closed on October 31, 2014. Net Charge-Off History for the periods ended December 31, 2017 EGBN EGBN Loan Type 2 Year Avg. 3 Year Avg. Income Producing CRE 0.06% 0.05% Owner Occupied CRE 0.00% 0.00% Construction
Slide 24: 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 23
Slide 25: CRE Concentration
CRE Concentration 24 (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 t he Company’s asset size at the time of reporting. (2) Represents CRE (excluding owner occupied) concentration as a percentage of EGBN consolidated r
Slide 26: ADC Concentration
ADC 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 t he Company’s asset size at the time of reporting. (2) Represents ADC concentration as a percentage of EGBN consolidated risk - based capital. (3) Ad
Slide 27: Capital Strength
Capital Strength $150 million of 10 Year, 5 Year non - call, 5.00% Subordinated Notes sold in July 2016 $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 $10 million of Common Equ
Slide 28: Key Success Factors
Key Success Factors Building and maintaining core relationships o Cross sales o Focus on key customers Maintenance of strong credit culture o Conservative underwriting criteria and loan policies o Disciplined committee approval and review process o Periodic loan and portfolio stress testing o Pr
Slide 29: Key Success Factors (continued)
Key Success Factors (continued) Disciplined ALCO process Maintained focus on areas of strength o Concentration on core geographic markets and products Built the proper infrastructure to support the increased volume of business and regulation Comprehensive Management and Board level reporting
Slide 30: EagleBank Growth Strategy
EagleBank Growth Strategy Profitability • Pricing discipline to sustain Net Interest Margin • Diligent expense control to maintain Efficiency Ratio Maintain Credit Quality • Enhanced monitoring of portfolio • Expanded stress testing Emphasis on Organic Growth • Only 3.00% deposit market share
Slide 31: Total Return Performance
Total Return Performance 1 Year 3 Year 5 Year EGBN (2.0%) 59.3% 179.2% NASDAQ Bank Stock Index 12.1% 54.4% 101.9% NASDAQ Stock Market Index 16.8% 43.0% 112.3% S & P 500 Index 11.1% 27.0% 65.8% EGBN Stock Price Performance SOURCE : SNL Financial, Chart and calculations as of close of trading on April
Slide 32: Appendices
Appendices 31
Slide 33: Non-GAAP Reconciliation
Non - GAAP Reconciliation 32 GAAP Reconciliation (Unaudited) (dollars in thousands except per share data) June 30, 2017 September 30, 2017 December 31, 2017 March 31, 2018 Common shareholders' equity 902,675$ 933,982$ 950,439$ 985,180$ Less: Intangible assets (107,061) (107,150) (106,617) (107,097)
Slide 34: Non-GAAP Reconciliation
Non - GAAP Reconciliation 33 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 34 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 Footnotes
Non - GAAP Reconciliation Footnotes 35 (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 t
Slide 37: Market Information – Washington, DC MSA
36 Market Information – Washington, DC MSA Population 6.2 Million □ 6th largest market in the U.S. Employment 3.3 Million □ 39,000 new jobs created in 12 months ended March 2018 □ Employment growth driven by private sector, over 215,000 net new private sector jobs created over last five years □
Slide 38: Greater Washington Economy
37 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, Stephen S. Fuller Institute
Slide 39: Loan Portfolio and Growth
Loan Portfolio and Growth 38 (Dollar Values in Thousands) Annual Growth Rate Loan Type Balance % of Total Balance % of Total Balance % of Total % Commercial and Industrial 1,235,832$ 21.2% 1,375,939$ 21.5% 1,426,042$ 21.6% 15.4% Commercial Real Estate: Owner Occupied 638,132 11.0% 755,444 11.8% 800,
Slide 40: Geographic Detail - Income Producing CRE
Geographic Detail - Income Producing CRE NOTE: Data as of March 31, 2018 Focus in core sub - markets: Washington, DC, Montgomery County, Fairfax County 39 (Dollar Value in Thousands) Single Office/ Redevel./ Mixed Multi- & 1-4 County Hotel Condo Retail Use Family Single & 1-4 Family Industrial Oth
Slide 41: Geographic Detail – Construction
Geographic Detail – Construction NOTE: Data as of March 31, 2018 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 40 (Dollar Value in Thousands) Si
Slide 42: Conservative Securities Portfolio
Portfolio has $12.1 million of net unrealized losses at March 31, 2018 No holdings of GSE equities or bank Trust Preferred or bank Trust Preferred CDOs Average life of portfolio is 3.8 years Excludes Federal Reserve and Federal Home Loan Bank stock Conservative Securities Portfolio 41 (Dolla
Slide 43: Nationally Recognized Financial Performance
▪ Designated as a “Challenger” Bank 2015 & 2016 ▪ Member of KBW Bank Honor Roll 2010 - 2017 Nationally Recognized Financial Performance ▪ Community Bankers Cup Award 2012 - 2017 ▪ Ronald D. Paul named East Coast Region Community Banker of the Year 2014 Independent Community Bankers of America 42 ▪ “
Slide 44: Highly Regarded by Bank Rating Firms
Highly Regarded by Bank Rating Firms FIRM BANK RATING 300/300 Green - *** B AUER F INANCIAL , I NC A - 43
Slide 45: Experienced Management Team
Experienced Management Team 44 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
Experienced Management Team 45 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 with the Bank,
Slide 47: Historical Balance Sheet
46 Historical Balance Sheet * Data for 2017 is shown on an operating basis. (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%) $204,853 Securities Available for Sale 389,405
Slide 48: Historical Income Statement
47 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; ** Data for 2017 is shown on an operating ba sis . P lease refer to the Non - GAAP reconciliation and footnotes in the appendi