Slide 1: 3rd Quarter 2024 Earnings Presentation
3rd Quarter 2024 Earnings Presentation November 6, 2024 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 $ 11.3 8.0 8.5 1.2 $ $ $ billion billion billion billion 1 Shares Outstanding Market Capitalization Tangible Book Value (at close September 30, 2024) (at close October 22, 2024) per Common Share 2 30,173,200 $697 millio
Slide 5: Eagle is an Attractive Investment Opportunity
Eagle is an Attractive Investment Opportunity • Best-in-Class Capital Levels and Clean Asset Quality o CET1 Ratio = 14.30% Top quartile of all bank holding companies with $10 billion in assets or more o TCE / TA¹ = 10.86% o NPAs / Assets = 1.22% o ACL / Gross Loans = 1.40% and ACL / Performing Offic
Slide 6: Strategies Driving Growth and PPNR
Strategies Driving Growth and PPNR Improving Operating Pre-Provision Net Revenue (“PPNR”) • Enhance revenue opportunities through C&I and small business to improve fee income and deposits • Continue to focus on growing core deposits • Maintain pricing discipline on loan originations to promote reven
Slide 7: Key Strategic Objectives
Key Strategic Objectives • 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
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 Tangible Common Excess CET1 + ACL / Total Equity / Tangible Loans1 Peer 1 15.3% Assets1 P
Slide 9: Eagle – Liquidity Position vs. Peers
Eagle – Liquidity Position vs. Peers Cash Equivalents / Cash Equivalents + AFS Available Liquidity Total Deposits Securities / Total Deposits Cash and cash equivalents are high relative to peers. Peer 1 11.4% Peer 1 31.9% Peer 2 8.1% Cash equivalents combined with AFS Peer 2 28.7% securities provide
Slide 10: Performance Measures
Performance Measures Operating Return on Average Operating PPNR and Operating Tangible Common Equity1 PPNR/Average Assets1 $55 4.00% 9.61% $45 $39 $39 $38 $34 $35 3.00% 7.22% (in millions) 7.08% 7.04% $35 $25 2.00% 1.31% 1.25% 1.20% 1.12% 1.13% $15 1.00% $5 -0.11% ($5) 0.00% 2023Q3 2023Q4 2024Q1 202
Slide 11: Net Interest Income
Net Interest Income Net Interest Income & Margin $100.0 9.00% NII Increase and NIM Decline $80.0 $70.7 $73.0 $74.7 $71.4 $71.8 7.00% Net Interest Income $60.0 5.00% (in millions) • Interest income increased $4.1 million quarter over 2.43% 2.45% 2.43% 2.40% 2.37% $40.0 3.00% quarter as higher cash ba
Slide 12: Operating Net Income – Summary
Operating Net Income – Summary 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 refle
Slide 13: 2024 & 2025 Outlook
2024 & 2025 Outlook Key Drivers 3Q 2024 Actual Current 2024 Outlook1 Current 2025 Outlook2 Balance Sheet Average deposits $9,505 million Low single digit % increase 1-4% increase Average loans $8,026 million Low single digit % increase 1-4% increase Average earning assets $12,072 million Low single
Slide 14: Outlook Variables & Risks
Outlook Variables & Risks To reach our 2024 and 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 wi
Slide 15: Deposit Mix and Trend
Deposit Mix and Trend Total Period End Deposits increased $165 million Year-over-Year CDs Savings & money market Interest bearing transaction Noninterest bearing Cost Analysis Cumulative Betas1 4.73% 4.75% 5.07% 5.03% • Interest bearing deposits - 77% 4.61% • Cost of funds – 65% 4.30% 4.30% 4.37% 4.
Slide 16: Funding & Liquidity
Funding & Liquidity Deposits & Borrowings $10,209 $10,208 $9,772 $9,967 $9,889 Funding & Liquidity Summary 14.3% 13.7% 16.7% 17.0% 13.6% Deposits in millions Period end deposits were up $274 million for the 85.7% 86.3% 83.3% 83.0% 86.4% quarter, attributable to an increase in time deposits from the
Slide 17: Office Loan Portfolio Detail
Office Loan Portfolio Detail CRE Office Holdings Decline by $55M in Q3, from $1.03B in Q2 to $978.6M Excess CET1+ACL/ As of September 30, 2024 Non-Owner Occupied Office Loans Peer 1 134% Peer 2 112% Peer 3 106% Peer 4 86% Peer 5 79% EGBN 71% Peer 6 61% 1 - Class Type is determined based on the lates
Slide 18: Office Loan Portfolio: Income Producing Detail
Office Loan Portfolio: Income Producing Detail Commentary • Improving ACL coverage • Performing Office ACL coverage = 4.55% • Non-office CRE exhibiting limited internal risk rating migration • 67% of office portfolio maturities are beyond year-end 2025 1 - DSCR is calculated based on contractual pri
Slide 19: Multifamily Loan Portfolio: Income Producing Detail
Multifamily Loan Portfolio: Income Producing Detail Inc Producing Multi-Family - Maturity Schedule $232 (in millions) $188 $153 $154 $73 $38 $27 $9 2024 2025 Q1 2025 Q2 2025 Q3 2025 Q4 2026 2027 2028+ 1 - DSCR is calculated based on contractual principal and interest payments and only considers cash
Slide 20: 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 20
Slide 21: Loan Type and Classification
Loan Type and Classification Classified and Criticized Loans Quarter-over-Quarter Change 81% 88% 85% 86% 82% % performing Special Mention 9.49% • C&I -$2.0 million 8.95% 6.81% 7.86% • CRE +$59.1 million 4.76% $716 $756 • 100% of special mention loans were current as 9/30/24 $627 $543 Substandard $36
Slide 22: Asset Quality Metrics
Asset Quality Metrics Provision for Credit Losses Allowance for Credit Losses/ $35,175 Loans HFI 1.40% 1.33% 1.25% (in thousands) 1.05% 1.08% $14,490 $8,959 $10,094 $5,644 2023Q3 2023Q4 2024Q1 2024Q2 2024Q3 2023Q3 2023Q4 2024Q1 2024Q2 2024Q3 NCO / Average Loans1 NPAs2 / Assets 1.07% 1.22% 0.88% 0.60
Slide 23: Appendices
Appendices ” @EAGLE BANCORB INC. 23
Slide 24: 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 25: Summary of Classified and Criticized Loans
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 25
Slide 26: Top 25 Loans
Top 25 Loans 1 – Mixed collateral commercial real estate 2 – Construction in process Note: Data as of September 30, 2024 26
Slide 27: Total CRE Office Loan Portfolio (Excludes OOCRE & OO Construction)
Total CRE Office Loan Portfolio (Excludes OOCRE & OO Construction) 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, 400
Slide 28: Washington DC Office (Income Producing CRE & Construction)
Washington DC Office (Income Producing CRE & Construction) • $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 millio
Slide 29: Multifamily Loan Portfolio
Multifamily Loan Portfolio • 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 • 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 Reviews
Slide 31: Credit Quality Since 1998
Credit Quality Since 1998 28.73% ae ine 0.00% 9.02% 0.02% 0.01% ER — a L = 0.00% 0.01% go4% (9.09% 0.03% 0.02% 0.00% 0.01% 1998 19099 2000 2001 2002 2003 2004 2005 2006 2007 2008 2008 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Q3 mmm NPAs / Assets 9 ==eeeNCOs/AvgLoans
Slide 32: CRE Construction Portfolio
CRE Construction Portfolio • $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 Risk
Slide 33: Hotel Loan Portfolio
Hotel Loan Portfolio • 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 Lo
Slide 34: Investment Portfolio
Investment Portfolio 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 paydowns
Slide 35: 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. 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 value
Slide 36: Loan Portfolio - Details
Loan Portfolio - Details Note: Loan metrics not inclusive of deferrals, fees and other adjustments. Data as of September 30, 2024. 36
Slide 37: Loan Portfolio – Income Producing CRE
Loan Portfolio – Income Producing CRE Note: Loan metrics not inclusive of deferrals, fees and other adjustments. Data as of September 30, 2024. 37
Slide 38: Loan Portfolio – CRE Construction
Loan Portfolio – CRE Construction Note: Loan metrics not inclusive of deferrals, fees and other adjustments. Data as of September 30, 2024 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) 41
Slide 42: Non-GAAP Reconciliation (unaudited)
Non-GAAP Reconciliation (unaudited) 42
Slide 43: 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