Eagle Bancorp, Inc. · NASDAQ:EGBN
Eagle Bancorp — Investor Presentation (February 2021)
37 slides from Eagle Bancorp's investor presentation, Feb 9, 2021
Slide 1: Investor Presentation
Investor Presentation Ticker: EGBN EagleBankCorp.com February 2021
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: Experienced Senior Management Team
Experienced Senior Management Team 3 Susan Riel CEO & President, Eagle Bancorp & EagleBank 44 years in banking 23 years with EGBN Charles Levingston EVP & Chief Financial Officer, Eagle Bancorp & EagleBank 20 years in banking 9 years with EGBN Executive Vice President and Chief Financial Officer of
Slide 4: Experienced Senior Management Team (continued)
Experienced Senior Management Team 4 Joined EagleBank in June 2020 as the Chief Risk Officer. Prior to this, he was Managing Director for the Risk and Finance Advisory Practice in Deloitte’s Banking and Capital Markets Group, where he focused on the development of ERM and risk-category-specific gove
Slide 5: Board Focused on Vision and Oversight
Board Focused on Vision and Oversight 5 Norman Pozez Executive Chair - Board of Directors 12 years with EGBN Kathy Raffa Director, Chair - Audit Committee 5 years with EGBN Leslie Ludwig Director, Chair - Compensation Committee 4 years with EGBN Theresa LaPlaca Director, Chair - Risk Committee 1 yea
Slide 6: Summary Statistics
Summary Statistics 6 Total Assets $ billion Total Loans $ billion Total Deposits $ billion Tangible Common Equity $ billion Shares Outstanding (at close December 31, 2020) 31,779,663 Market Capitalization (at close February 5, 2021) $1.4 billion Tangible Book Value per Common Share $35.74 Institutio
Slide 7: Our Story
Our Story 7 *Please refer to the Non-GAAP reconciliation and footnotes in the appendices. Note: TBVPS is adjusted for - 5:4 stock split 3/31/2000, 7:5 stock split 6/15/2001, 1.3:1 stock split 2/28/2005; 1.3:1 stock split 7/5/2006; 10% stock dividend 10/1/2008 and 10% stock dividend 6/14/2013.
Slide 8: Investment Rationale
Investment Rationale 8 Solid capitalization and conservative capital management Well-managed asset quality Above average peer returns Superior efficiency with limited branch network Recognized expertise in CRE, C&I and residential mortgage lending Strategically positioned in one of the most attracti
Slide 9: Key Financial Metrics – 4th Quarter
Key Financial Metrics – 4th Quarter 9 • Solid Capital Ratios: – Tangible Common Equity(1) | 10.31% – Tier 1 Leverage | 10.31% – Total Risk Based Capital | 17.04% • Ample Reserves & Clean Asset Quality: – ACL/Loans | 1.41% – NPAs/Assets | 0.59% – NCOs/Average Loans | 0.28% • Strong Returns: – ROAA |
Slide 10: Attractive & Resilient Market
Attractive & Resilient Market 10 • Washington DC MSA – Market is the 6th largest in the U.S. – Population of 6 million with a projected annual growth rate of 4.05% – Workforce of 3.3 million – 2021 median household income of $109,000 vs. $68,000 U.S. – Unemployment of 5.7% in November down from 6.9%
Slide 11: Limited Network of Offices
295 495 95 495 495 270 395 66 66 Bethesda Lanham Chevy Chase Twinbrook Rockville Shady Grove Rosslyn Ballston Silver Spring Park Potomac Merrifield Alexandria Fairfax Tysons Corner Reston Dulles Town Center Chantilly HQ RHQ RHQ MONTGOMERY COUNTY PRINCE GEORGE’S COUNTY FAIRFAX COUNTY ARLINGTON COUNTY
Slide 12: Local Leader in Deposit Share
Local Leader in Deposit Share 12 Note: Market includes Maryland counties of Montgomery and Prince George’s; Virginia counties of Alexandria, Arlington, Fairfax, Fairfax City, Falls Church, Loudoun, Manassas, Manassas Park and Prince William; and the District of Columbia. Data excludes Morgan Stanley
Slide 13: Diversity, Inclusion and Involvement
Diversity, Inclusion and Involvement 13 • Diversity of Board & Senior Management – Board of 10 includes 4 women (including the CEO) and 2 men who identify as minorities – Senior Management of 7 includes 2 women and 1 man who identifies as a minority • Diversity & Inclusion Council established in 202
Slide 14: COVID-19 Update
COVID-19 Update 14 • 2020 – Adopted CECL and built reserves to 1.41% of loans – Maintained productivity working remotely – PPP loans to over 1,400 business with total balances of $456 million at the end of the 3rd quarter – Net charge-offs were 0.26% of average loans – Ended the year with NPAs/asset
Slide 15: Assets grow past $11 billion
$6,076 $6,890 $7,479 $8,389 $8,989 $11,118 2015Y 2016Y 2017Y 2018Y 2019Y 2020Y (in m ill io ns ) Assets $5,158 $5,716 $5,854 $6,974 $7,224 $9,189 2015Y 2016Y 2017Y 2018Y 2019Y 2020Y (in m ill io ns ) Deposits $455 $4,998 $5,678 $6,412 $6,991 $7,546 $7,760 2015Y 2016Y 2017Y 2018Y 2019Y 2020Y (in m il
Slide 16: Solid capitalization & growth of RBC
Solid capitalization & growth of RBC 16 Note: Peers are depository institutions with assets from $7-$15 billion as of December 31, 2020 (excludes savings banks, thrifts and mutuals). 2020Y is through the most recently reported quarter end. Source: S&P Global Market Intelligence. • Capitalization ‒ T
Slide 17: Efficiency continues to be a strength
Efficiency continues to be a strength 17 • Efficiency much better than peers ‒ Focus on higher value business relationships ‒ Branches focused on commercial sub-markets ‒ Average deposits per branch of $459 million • Efficiency Components ‒ Non interest income benefitted from large increase in asset
Slide 18: Strong earnings to close out 2020
Strong earnings to close out 2020 18 • Eagle had a strong finish to 2020 ‒ 3rd & 4th quarter earnings were two best linked quarters ever - $80.2 million ‒ ROAA of 1.57% (3Q) and 1.39% (4Q) • Returns on tangible common equity (non- GAAP) ‒ Impacted by higher level of capitalization (TCE/TA 10.31% vs.
Slide 19: Building tangible book value
$18.83 $21.61 $24.67 $29.17 $32.67 $35.74 2015Y 2016Y 2017Y 2018Y 2019Y 2020Y Tangible Book Value Per Share Building tangible book value 19 Note: Quarterly EPS are rounded and do not add to yearly total. Quarterly dividend began in the 2nd quarter of 2020 at $0.22 per share. • Tangible book continue
Slide 20: Asset quality remains strong
CECL Adopted 1.05% 1.04% 1.01% 1.00% 0.98% 1.23% 1.36% 1.40% 1.41% Allowance for Credit Losses / Loans 0.31% 0.30% 0.20% 0.21% 0.56% 0.56% 0.69% 0.62% 0.59% NPAs* / Assets CECL Adopted Asset quality remains strong 20 Note: CECL adoption on January 1, 2020 led to an initial adjustment to the allowanc
Slide 21: Margin impacted by deposit inflow
21 Margin impacted by deposit inflow • Margin decline driven by ‒ Deposit inflows which changed mix of earning assets ‒ PPP loans of $455 million with 1% coupon • Average loans to average assets ‒ Moved from low-to-mid-80s% to 70.9% with deposit inflows and lower demand for loans 4.33% 4.16% 4.15% 4
Slide 22: Yield on loans flat, deposit costs down
22 Yield on loans flat, deposit costs down • Yield on Loans ‒ PPP loans of $455 million at 1% coupon ‒ Continued focus on good credit and stable income producing CRE • Cost of funds ‒ Lowered deposit rates across the board by 5 basis points in mid-December 2020 ‒ Expect deposit costs to decrease fur
Slide 23: Deposits up $1 billion in the 4th quarter
Deposits up $1 billion in the 4th quarter 23 *Core deposits include CDAR’s and ICS reciprocal deposits. • Total Deposits $9.2 billion ‒ Up $2 billion in 2020 ‒ Up $1 billion in 4th quarter 2020 • Deposit philosophy ‒ Commercial focus drives growth of Noninterest Bearing Demand accounts ‒ Wholesale M
Slide 24: Securities Portfolio
Securities Portfolio 24 • Highlights ‒ $22.0 million net unrealized gains as of December 31, 2020 ‒ Average life of portfolio is 3.4 years ‒ Excludes Federal Reserve and Federal Home Loan Bank stock $ in thousands Gross Gross Allowance Estimated Amrt. Cost Amortized Unrealized Unrealized for Credit
Slide 25: Loan Mix
Loan Mix 25 • Loan commentary – C&I/Owner Occupied CRE at 31% of portfolio is more of a focus than other local banks – C&I Loan Portfolio is predominantly variable rate loans – Owner Occupied Loans are key to small and mid- market relationships – DDA Operating Accounts of C&I relationships are a cri
Slide 26: Loan Portfolio - Details
Loan Portfolio - Details 26 Note: Data as of December 31, 2020. $ in millions Location C&I Owner Occupied CRE Income Producing CRE Owner Occupied Const. CRE Construction Land Residential Mortgage Consumer PPP Total % of Total District of Columbia $346.8 $216.2 $1,164.6 $49.1 $528.1 $30.9 $36.1 $13.7
Slide 27: ADC & CRE Concentration
ADC & CRE Concentration 27 Note: ADC and CRE concentration ratios represents concentration as a percentage of consolidated risk-based capital. CRE excludes owner occupied. CRE Details ADC Details $ in millions 2019 Q4 2020 Q1 2020 Q2 2020 Q3 2020 Q4 Total CRE portfolio $4,731 $4,803 $4,741 $4,661 $4
Slide 28: COVID-19 Deferral Trend & Philosophy
COVID-19 Deferral Trend & Philosophy 28 • COVID-19 Task Force created to recognize and remediate risk in the loan portfolio ‒ 6 Senior Executives ‒ Jan Williams CCO is Chair • Migration ‒ To provide heightened visibility and oversight, all 2nd deferrals were added to the Watch list in the third quar
Slide 29: Mortgages, FHA & SBA
Mortgages, FHA & SBA 29 • Mortgages ‒ Locked loans in 2020 were $1.9 billion • FHA Multi-Family ‒ 5 dedicated FTE’s ‒ Group started in 2016 ‒ Revenue of almost $4 million in 2020 • SBA ‒ PPP loans to over 1,400 businesses with total balances of $456 million as of the end of the 3rd quarter ‒ Activel
Slide 30: Appendices
Appendices (EAGLE BANCORB INC. 30
Slide 31: Performance Statistics Summary
Performance Statistics Summary 31 Note: Peers are depository institutions with assets from $7-$15 billion as of December 31, 2020 (excludes savings banks, thrifts and mutuals). There were 45 depository institutions within that range as of December 31, 2020, and all were included in the peer group. S
Slide 32: Historical Balance Sheet
Historical Balance Sheet 32 $'s in thousands 2015Y 2016Y 2017Y 2018Y 2019Y 2020Y 5 Year Compound Growth Rate Assets Cash and Equivalents $298,363 $368,163 $190,473 $321,864 $241,973 $1,789,055 43.1% Securities Available for Sale 504,772 559,708 625,592 807,645 878,557 1,191,187 18.7% Total Cash and
Slide 33: Historical Income Statement
Historical Income Statement 33 $ in thousands, except per share data 2015Y 2016Y 2017Y 2018Y 2019Y 2020Y 5 Year Compound Growth Rate Total Interest Income $253,180 $285,805 $324,034 $393,286 $429,630 $389,986 9.0% Total Interest Expense 19,238 27,641 40,147 76,293 105,585 68,424 28.9% Net Interest I
Slide 34: Loan Portfolio – Income Producing CRE
Loan Portfolio – Income Producing CRE 34 Note: Data as of December 31, 2020 $ in millions Office Family & Hotel/ Mixed Multi- & Office Res. % of Location Motel Industrial Use Family Condo Retail Condo Other Total Total District of Columbia $186.5 $15.6 $342.1 $233.7 $115.7 $74.7 $86.6 $109.7 $1,164.
Slide 35: Loan Portfolio – CRE Construction
Loan Portfolio – CRE Construction 35 Note: Data as of December 31, 2020 $ in millions Office Single & Multi- & Office Hotel/ Mixed Residential % of Location 1-4 Family Family Condo Motel Use Retail Condo Other Total Total District of Columbia $37.9 $223.1 $79.9 $0.0 $119.7 $2.5 $50.3 $14.7 $528.1 65
Slide 36: Non-GAAP Reconciliation (unaudited)
36 Non-GAAP Reconciliation (unaudited) Note: Per share data is adjusted for - 5:4 stock split 3/31/2000, 7:5 stock split 6/15/2001, 1.3:1 stock split 2/28/2005; 1.3:1 stock split 7/5/2006; 10% stock dividend 10/1/2008 and 10% stock dividend 6/14/2013. $ in thousands, except per share data 2000Y 2010
Slide 37: Non-GAAP Reconciliation (unaudited)
37 Non-GAAP Reconciliation (unaudited) Note: Tangible common equity to tangible assets (the "tangible common equity ratio"), tangible book value per common share, annualized return on average tangible common equity, and pre-provision net revenue to average assets (“PPNR/AA”) are non-GAAP financial m
Eagle Bancorp — Investor Presentation (February 2021) on 6ix