Eagle Bancorp, Inc. · NASDAQ:EGBN
Eagle Bancorp — Q4 2024 Earnings Presentation
41 slides from Eagle Bancorp's earnings presentation, Jan 22, 2025
Slide 1: 4th Quarter 2024 Earnings Presentation
4th Quarter 2024 Earnings Presentation January 22, 2025 Scan for digital version EagleBankCorp.com
Slide 2: 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 operations and policies and
Slide 3: Attractive Washington DC Footprint
Attractive Washington DC Footprint 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 educatio
Slide 4: Eagle at a Glance
Eagle at a Glance Tangible Total Assets Total Loans Total Deposits Common Equity $ 11.1 7.9 9.1 1.2 $ $ $ billion billion billion billion 1 Shares Outstanding Market Capitalization Tangible Book Value (at close December 31, 2024) (at close January 21, 2024) per Common Share 2 30,202,003 $758 million
Slide 5: Eagle is an Attractive Investment Opportunity
Eagle is an Attractive Investment Opportunity • Best-in-Class Capital Levels o CET1 Ratio = 14.63% Top quartile of all bank holding companies with $10 billion in assets or more o TCE / TA¹ = 11.02% o ACL / Gross Loans = 1.44% and ACL / Performing Office Loans = 3.81% • Long-term Strategy to Improve
Slide 6: Strategies to Improve Profitability
Strategies to Improve Profitability Improving Return on Average Assets • Grow and deepen relationship deposits with a focus on franchise enhancement; allowing for reduction of high-cost wholesale and non-core funding • Maintain pricing discipline on loan originations to promote revenue growth • Cont
Slide 7: Eagle – Capital Levels vs. Peers
Eagle – Capital Levels vs. Peers Strong Capital • Capital ratios are high relative to peers • Excess CET1 (over 9%) plus reserves provides a superior level of coverage when measured against our peers CET1 Ratio Excess CET1 + ACL / Total Tangible Common Equity Loans / Tangible Assets1 Peer 1 15.8% EG
Slide 8: Eagle – Liquidity Position vs. Peers
Eagle – Liquidity Position vs. Peers Available Liquidity Cash Equivalents / Cash Equivalents + AFS Cash and cash equivalents are high Total Deposits Securities / Total Deposits relative to peers. Peer 1 Peer 1 31.9% 10.0% Cash equivalents combined with AFS Peer 2 8.4% Peer 2 28.8% securities provide
Slide 9: Performance Measures
Performance Measures Operating Return on Average Operating Return on Average Tangible Common Equity1 Assets1 7.08% 7.04% 7.22% 0.66% 0.70% 0.65% 4.94% 0.48% -0.11% -0.01% 2023Q4 2024Q1 2024Q2 2024Q3 2024Q4 2023Q4 2024Q1 2024Q2 2024Q3 2024Q4 Operating Efficiency Ratio1 Tangible Common Equity/Tangible
Slide 10: Net Interest Income & Margin
Net Interest Income Net Interest Income & Margin $100.0 9.00% NII Decrease and NIM Decline $80.0 $73.0 $74.7 $71.4 $71.8 $70.8 7.00% Net Interest Income $60.0 5.00% (in millions) • Interest income decreased $5.4 million quarter 2.45% 2.43% 2.40% 2.37% 2.29% $40.0 3.00% over quarter due to lower yiel
Slide 11: Net Income – Summary
Net Income – Summary Net Income Drivers Net interest income Net interest income down $1 million, primarily driven by $965 thousand interest income not recognized on a loan that migrated to nonaccrual during the quarter. While interest income declined due to lower rates on loans, there was a similar
Slide 12: 2025 Outlook
2025 Outlook Key Drivers 4Q 2024 Actual Prior 2025 Outlook Current 2025 Outlook1 Balance Sheet Average deposits $10,056 million 1-4% increase 1-4% increase Average loans $7,972 million 1-4% increase 2-5% increase Average earning assets $12,304 million Flat Flat Income Statement Net interest margin 2
Slide 13: Outlook Variables & Risks
Outlook Variables & Risks To reach our 2025 outlook, we made many assumptions of variables and risks, including: Component Variables & Risks Economy & Rates • Business activity highly correlated to current and anticipated forward rates Clients • Credit quality and need for credit coupled with a pote
Slide 14: Deposit Mix and Trend
Deposit Mix and Trend Total Period End Deposits increased $323 million Year-over-Year CDs Savings & money market Interest bearing transaction Noninterest bearing Cost Analysis 5.07% 5.03% 5.28% 4.61% 4.75% 4.30% 4.37% 4.45% 4.47% 4.20% 3.28% 3.36% 3.35% 3.40% 3.28% 2023Q4 2024Q1 2024Q2 2024Q3 2024Q4
Slide 15: Funding & Liquidity
Funding & Liquidity Deposits & Borrowings $10,209 $10,208 $9,967 $9,889 $9,730 Funding & Liquidity Summary 13.7% 16.7% 17.0% 13.6% 6.2% Deposits in millions Period end deposits were up $590 million for the 86.3% 83.3% 83.0% 86.4% 93.8% quarter, attributable to an increase in interest- bearing transa
Slide 16: Office Loan Portfolio Detail
Office Loan Portfolio Detail Inc Producing Office Holdings Declined $85 million Year-over-Year As of December 31, 2024 Excess CET1+ACL/ Non-Owner Occupied Office Loans Peer 1 141% Peer 2 127% Peer 3 105% Peer 4 90% Peer 5 86% EGBN 74% Peer 6 63% 1 - Class Type is determined based on the latest appra
Slide 17: Office Loan Portfolio: Income Producing Detail
Office Loan Portfolio: Income Producing Detail Commentary • Performing Office ACL coverage = 3.81% • Non-office CRE exhibiting limited internal risk rating migration • 74% of office portfolio maturities are beyond year-end 2025 • Limited exposure to Class B central business 1 - DSCR is calculated ba
Slide 18: Multifamily Loan Portfolio: Income Producing Detail
Multifamily Loan Portfolio: Income Producing Detail 1 - DSCR is calculated based on contractual principal and interest payments and only considers cash flow from primary sources of repayment. 18
Slide 19: Loan Mix and Trend
Loan Mix and Trend Home Equity Other Consumer Construction C&I (owner-occupied) Construction – comm& residential. Owner-Occupied CRE Commercial Income producing CRE (excluding office if applicable) Office 19
Slide 20: Loan Type and Classification
Loan Type and Classification Classified and Criticized Loans Quarter-over-Quarter Change 88% 85% 86% 82% 69% % performing Special Mention • C&I +$19.4 million 7.86% 8.95% 9.49% 8.46% • CRE -$139.5 million 6.81% • 100% of special mention loans were current as 12/31/24 $756 $716 $671 $627 Substandard
Slide 21: Asset Quality Metrics
Asset Quality Metrics Provision for Credit Losses Allowance for Credit Losses/ $35,175 Loans HFI 1.40% 1.44% 1.33% (in thousands) 1.25% 1.08% $14,490 $12,132 $8,959 $10,094 2023Q4 2024Q1 2024Q2 2024Q3 2024Q4 2023Q4 2024Q1 2024Q2 2024Q3 2024Q4 NCO / Average Loans1 NPAs2 / Assets 1.90% 1.07% 1.22% 0.6
Slide 22: Appendices
Appendices ” @EAGLE BANCORB INC. 22
Slide 23: Nonaccrual Loans
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 paymen
Slide 24: Summary of Classified and Criticized Loans
Summary of Classified and Criticized Loans 1 – When cash collateral is considered, latest LTV is 90% 2 – Loan collateral is a project that is either recently completed and in lease up, not yet stabilized, under development, or in process of conversion 24
Slide 25: Top 25 Loans
Top 25 Loans 1 – Mixed collateral commercial real estate 2 – Construction in process 3 – When cash collateral is considered, latest LTV is 90% Note: Data as of December 31, 2024 25
Slide 26: Total CRE Office Loan Portfolio (Excludes OOCRE & OO Construction)
Total CRE Office Loan Portfolio (Excludes OOCRE & OO Construction) 4 Office Loans with Substandard Risk Ratings are on Nonaccrual for a total balance of $139.7 million out of Total NPAs of $211.5 million. 1 – Loan risk grade categories: 1000 – Prime, 2000 – Excellent (“Excel.”), 3000 – Good, 4000 –
Slide 27: Washington DC Office (Income Producing CRE & Construction)
Washington DC Office (Income Producing CRE & Construction) • $224.2 Million Total Outstanding Balance o 11 Income Producing CRE = $220.6 million o 1 Income Producing Construction CRE loan = $3.6 million o 12 Total Washington DC Office Loans Median size = $12.6 million Average size = $18.7 millio
Slide 28: Multifamily Loan Portfolio
Multifamily Loan Portfolio • Zero Multifamily Loans on Nonaccrual Status • 93 Total Multifamily Loans • $1.8 Billion in Outstanding Balances with Multifamily as Collateral o Median size = $7.5 million o Average size = $19.8 million • 87 Loans with $1.7 Billion in Balances with Average Risk Rating =
Slide 29: Underwriting, Credit Management and Risk Mitigation
Underwriting, Credit Management and Risk Mitigation • History of Resiliency through Credit Cycles • 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 L
Slide 30: Credit Quality Since 1998
Credit Quality Since 1998 28.73% 12.08% 10.32% 40.61% 40.12% “nos 0.15% 4 r 34% b \ 0.02% 0.02% 0.01% iene 0.03% OO am 0.00% | - fo12 0. rfp. 7%] 0.00% r 0.00% 0.01% 9.04% 0.09% 0.03% 0.02% 0.01% 1998 1909 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Slide 31: CRE Construction Portfolio
CRE Construction Portfolio • $1.13 Billion Total Outstanding Balance: o 75 CRE Ground Up Construction $1,012.2 million o 18 CRE Renovation $116.8 million o 7 Consumer Construction $ 6.3 million o 100 Total Construction Loans Median size = $2.1 million Average size = $10.1 million • 97 Loans Risk
Slide 32: Hotel Loan Portfolio
Hotel Loan Portfolio • Zero Hotel Loans on Nonaccrual Status • $416.3 Million in Outstanding Balances with Hotels as Collateral (Includes Construction CRE) o Median size = $11.0 million o Average size = $18.9 million • 22 Loans with Average Risk Rating = Pass • 0 Criticized Loans 32
Slide 33: Investment Portfolio
Investment Portfolio Investment Portfolio Strategy • Portfolio positioned to manage liquidity and pledging needs • Cash flow projected principal only (rates unchanged): o 2025 - $386 million • Total securities down $164 million from 9/30/2024 from principal paydowns, maturities received. • Unencumbe
Slide 34: Tangible Book Value Per Share
Tangible Book Value Per Share Per share data is as of period end. Please refer to Non-GAAP reconciliation and footnotes in the appendices 34
Slide 35: Loan Portfolio - Details
Loan Portfolio - Details Note: Loan metrics not inclusive of deferrals, fees and other adjustments. Data as of September 30, 2024. 35
Slide 36: Loan Portfolio – Income Producing CRE
Loan Portfolio – Income Producing CRE Note: Loan metrics not inclusive of deferrals, fees and other adjustments. Data as of December 31, 2024. 36
Slide 37: Loan Portfolio – CRE Construction
Loan Portfolio – CRE Construction Note: Loan metrics not inclusive of deferrals, fees and other adjustments. Data as of December 31, 2024 37
Slide 38: Non-GAAP Reconciliation (unaudited)
Non-GAAP Reconciliation (unaudited) 38
Slide 39: Non-GAAP Reconciliation (unaudited)
Non-GAAP Reconciliation (unaudited) 39
Slide 40: Non-GAAP Reconciliation (unaudited)
Non-GAAP Reconciliation (unaudited) 40
Slide 41: Non-GAAP Reconciliation (unaudited)
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 equity a