Eagle Bancorp, Inc. · NASDAQ:EGBN
Eagle Bancorp — Investor Presentation (June 2020)
51 slides from Eagle Bancorp's investor presentation, Jun 11, 2020
Slide 1: Investor Presentation June 2020
Investor Presentation June 2020 Ticker: EGBN 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: Company Overview
Company Overview • Eagle Bancorp, Inc. is a highly profitable community bank focused on the Washington, DC metropolitan area • Commercially-oriented business model with deep relationships of loans, core deposits and related products • Recognized expertise in CRE, C&I and residential mortgage lending
Slide 4: Summary Statistics
Summary Statistics Tangible Common Equity Total Assets Total Loans Total Deposits $10.0 $7.8 billion $8.1 billion $1.1 billion(1) Tangible Book Value per Common Share billion Shares Outstanding (at close May 29, 2020) 32,224,756 Institutional Ownership 81% Market Capitalization (at close May 29, 202
Slide 5: Investment Rationale
Investment Rationale Highly profitable, with balanced financial performance Strategically positioned in the 5th largest regional economy in the U.S. Strong capital ratios NOTE: Financial data at or for the quarter ended December 31, 2019 5
Slide 6: Investment Rationale
Investment Rationale • Favorable Net Interest Margin | 3.49% • Operating Leverage with streamlined branch system: Efficiency Ratio | 43.83% • Clean Asset Quality: NPAs/Assets | 0.56%; NCOs/Average Loans | 0.12% • DDAs as a percentage of Average Deposits | 29.45% • Cash Dividend: Yield | 1.81%; Divid
Slide 7: Performance Statistics
Performance Statistics EGBN Peer Group (1) 2015Y 2016Y 2017Y 2018Y 2019Y 2020Q1 2019Q4 Key Ratios (at or for the period ended) PROFITABILITY Net Interest Margin Efficiency Ratio Return on Average Assets Return on Average Tangible Common Equity 4.33% 42.49% 1.49% 14.69% 4.16% 40.29% 1.52% 14.19% 4.15
Slide 8: Experienced Senior Management Team
Experienced Senior Management Team Charles D. Levingston EVP & Chief Financial Officer, Eagle Bancorp & EagleBank 19 years in banking 8 years with EGBN Susan G. Riel CEO & President, Eagle Bancorp & EagleBank 43 years in banking 21 years with EGBN Antonio F. Marquez EVP, Eagle Bancorp; Senior EVP &
Slide 9: Board Focused on Vision and Oversight
Board Focused on Vision and Oversight Norman R. Pozez Executive Chair - Board of Directors 11 years with EGBN Kathy A. Raffa Director, Chair - Audit Committee 4 years with EGBN Leslie Ludwig Director, Chair - Compensation Committee 3 years with EGBN Theresa G. LaPlaca Lead Independent Director, Chai
Slide 10: EagleBank Locations
EagleBank Locations Branch Loan Office Corporate Headquarters Regional Headquarters Branch System Lending Office Shady Grove MD Park Potomac Virginia Maryland Washington, DC 9 6 5 Twinbrook 2 270 MONTGOMERY COUNTY LOUDOUN COUNTY Rockville Tot9a5 l 20 2 Dulles Town Center 495 HQ Silver Spring Bethesd
Slide 11: Deposit Market Share Local Community Banks
Deposit (Dollar values in thousands) Market Share Local Community Ba nks June 30, 2018 June 30, 2019 2019 Market Sha re Annual Ra nk Compa ny Na me Bra nche s Ba la nce Ba la nce Grow th 1 2 3 4 5 6 7 8 Bank of America Corp. Capital One Financial Corp. Wells Fargo & Co. SunTrust Banks Inc. BB&T Corp
Slide 12: Consistent Balance Sheet
Consistent Balance Sheet Total Assets Growth $10,500 $10,000 $9,500 $9,000 $8,500 $8,000 $7,500 $7,000 $6,500 $6,000 $5,500 $5,000 $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 $9,992 15Q1 15Q2 15Q3 15Q4 16Q1 16Q2 16Q3 16Q4 17Q1 17Q2 17Q3 17Q4* 18Q1 18Q2 18Q3 18Q4 19Q1 19Q2 19Q3 19
Slide 13: Net Income Trend
Net Income Trend Net Income Available to Common SBLF Dividend $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 15Q1 15Q2 15Q3 15Q4 16Q1 16Q2 16Q3 16Q4 17Q1 17Q2 17Q3 17Q4* 18Q1 18Q2 18Q3 18Q4 19Q1* 19Q2 19Q3 19Q4 20Q1 NOTE: *Q4 2017 & Q1 2019 is shown on an adjusted basis. 13 T
Slide 14: Earnings Per Share
Earnings Per Share EPS (Reported) EPS (Operating) $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 2015Y 2016Y 2017Y 2018Y 2019Y 2020Q1 NOTE: EPS for 2017 are shown on an adjusted basis.; Please refer to the Non-GAAP reconciliation and footnotes in the appendices on pages 35-39. 14
Slide 15: Tangible Book Value per Share
Tangible Book Value per Share $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 2015Y 2016Y 2017Y 2018Y 2019Y 2020YTD NOTE: Please refer to the Non-GAAP reconciliation and footnotes in the appendices on pages 35-39. 15 $32.67$32.86 $29.17 $24.67 $21.61 $18.83
Slide 16: Net Interest Margin
Net Interest Margin 4.50% 4.00% 3.50% 3.00% 2.50% 2.00% 2015Y 2016Y 2017Y 2018Y 2019Y 2020Q1 EGBN Peer Group NOTE: Bank Holding Company Performance Report Peer Group represents companies with consolidated assets between $3 billion and $10 billion. 16 4.33% 4.16% 4.15% 4.10% 3.49% 3.48% 3.53% 3.77% 3
Slide 17: Yields and Cost of Funds
Yields and Cost of Funds Yield on Average Earning Assets Yield on Loans 5.50% 7.00% 5.00% 6.0 0% 5.24% 5.17% 5.11% 4.50% 5.0 0% 4.00% 4.0 0% 3.50% 3.0 0% 3.00% 2.0 0% 2.50% 2.00% 1.0 0% 2015Y 2016Y 2017Y 2018Y 2019 2020Q1 20 15 Y 20 16 Y 20 17 Y 20 18 Y 20 19 Y 20 20 Q1 EGBN Peer Group EGBN Pee r Gr
Slide 18: Moderate Interest Rate Risk Position
Moderate Interest Rate Risk Position Book Value of Deposits Economic Value of Deposits Premium (Discount) in Deposits • Both assets and liabilities remain short with repricing durations at 19 months on loans and 33 months on deposits • A 100 bps shock increase would increase Net Interest Income by a
Slide 19: Operating Leverage
Operating Leverage $90,000 $80,000 $70,000 $6 0,00 0 $50,000 $40,000 $30,000 $2 0,00 0 $10,000 $0 Reven ue ($00 0s) Non-Int Expense ($000s) NOTE: Please refer to the Non-GAAP reconciliation and footnotes in the appendices on pages 35-39. Q4 2017 & Q1 2019 is shown on an adjusted basis. 19
Slide 20: Superior Efficiency Ratio
Superior Efficiency Ratio 75% 70% 65% 60% 55% 50% 45% 40% 40% 35% 30% 2015Y 2016Y 2017Y 2018Y 2019Y 2020Q1 EGBN Peer Group NOTE: Bank Holding Company Performance Report Peer Group represents companies with consolidated assets between $3 billion and $10 billion. 20 65% 64% 42% 40% 62% 61% 62% 40% 37%
Slide 21: Deposit Composition and Growth
Deposit Composition and Growth (Dollar Values in Thousands) Deposit Type % of Total % of Total % of Total Balance Balance Balance Noninterest Bearing $ 2,216,270 33.2% $ 2,064,367 28.6% $ 1,994,209 24.5% Interest Bearing Transaction 588,326 8.8% 863,856 12.0% 931,597 11.4% Core Savings & Money Marke
Slide 22: Detail of Loan Portfolio
Detail of Loan Portfolio Maryland Prince George's Baltimore Anne Arundel Frederick Howard Eastern Shore Charles Other MD 140,458 49,828 17,041 6,151 13,358 8,595 512 3,993 137,164 33,611 25,823 620 11,723 10,162 20,256 8,717 233,453 114,447 40,255 58,047 21,060 64,065 8,207 2,837 69,135 85,001 78,03
Slide 23: Credit Quality Trends
Credit Quality Trends (Dollar Values in Thousands) Nonperforming Assets: Accruing Loans 90 or More Days Past Due Nonaccrual Total Nonperforming Loans (NPLs) Other Real Estate Owned (OREO) Total Nonperforming Assets Performing Restructured Loans (TDRs) $ - $ - $ - $ - $ - $ - 13,239 17,875 13,238 16,
Slide 24: Consistent Asset Quality
Consistent Asset Quality Total Loans ($mms) (Dollar Values in Thousands) $8,000 20.0% 18.0% $7,000 16.0% 2016 $679,525 0.30% 0.09% $6,000 14.0% 2017 $733,635 0.20% 0.06% $5,000 12.0% 2018 $579,919 0.21% 0.05% $4,000 10.0% 2019 $554,301 0.56% 0.13% 8.0% $3,000 6.0% 2020 YTD $295,125 0.56% 0.12% $2,00
Slide 25: Strength in C&I Lending
Strength in C&I Lending • At 23% of the Loan Portfolio, EagleBank has a much larger focus on C&I Lending than other local peer 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 relation
Slide 26: CRE Risk Management
CRE Risk Management • Executive & Board Level Oversight Approval Process of • Disciplined Underwriting • Proactive Portfolio Management • Quarterly Stress Testing of CRE Portfolio • Quarterly Independent Credit Review • Dedicated Special Assets Team 26
Slide 27: CRE Concentration
CRE Concentration (Dollar Values in Thousands) Total CRE Portfolio (excl Own Occ) CRE/Total Loans (1) $ 2,978,550 59.59% $ 3,246,636 57.18% $ 3,900,263 60.83% $ 4,213,281 60.26% $ 4,731,296 62.70% $ 4,803,400 61.26% CRE Nonperforming Loans NPLs/Total CRE Peer NPLs/Total CRE (1) 0.53% 0.40% 0.33% 0.4
Slide 28: ADC Concentration
ADC Concentration (Dollar Values in Thousands) Total ADC Portfolio ADC/Total Loans (1) $ 909,654 18.20% $ 976,599 17.20% $ 1,413,922 22.05% $ 1,616,098 23.12% $1,609,647 21.33% $ 1,413,318 18.03% ADC Nonperforming Loans NPLs/Total ADC Peer NPLs/Total ADC (1) 0.63% 0.35% 0.21% 0.18% 0.18% Total Net C
Slide 29: Capital Management
Capital Management (Dollar Values in Thousands) Total Assets $ 6,075,577 $ 6,890,096 $ 7,493,617* $ 8,389,137 $ 8,988,719 $ 9,992,219 Total Common Stockholders' Equity $ 738,601 $ 842,799 $ 965,026* $ 1,108,941 $ 1,190,681 $ 1,162,778 Total Regulatory Capital $ 755,212 $ 1,016,713 $ 1,129,954 $ 1,29
Slide 30: Key Success Factors
Key Success Factors • Building and maintaining core relationships – Cross sales – Focus on key customers • Maintenance of strong credit culture – – – – – Conservative underwriting criteria and loan policies Disciplined committee approval and review process Portfolio is balanced among C&I, CRE and Co
Slide 31: Key Success Factors (continued)
Key Success factors (continued) • Disciplined ALCO process • Maintained focus on areas of strength – Concentration on core geographic markets and products • Proper infrastructure to support the increased volume of business and regulation • Comprehensive Management and Board level reporting • Human R
Slide 32: EagleBank Growth Strategy
EagleBank Growth Strategy – Pricing discipline to sustain Net Interest Margin – Prudent expense management with streamlined branch system to maintain Efficiency Ratio • Profitability • Sustain Credit Quality – – – Maintain balanced portfolio mix: C&I, CRE and Construction Enhanced monitoring of indi
Slide 33: EGBN Total Return Performance
EGBN Total Return Performance Total Return Performance 3 Year 1 Year 5 Year EGBN NASDAQ Bank Stock Index NASDAQ Stock Market Index S & P 500 Index SOURCE: SNL Financial, Chart and calculations as of close of trading on May 29, 2020 (39.6%) (22.4%) 23.2% 8.1% (41.0%) (22.5%) 51.0% 25.6% (15.8%) 1.0%
Slide 34: Appendices
Appendices 34 t EAGLE BANCORP, INC.
Slide 35: Non-GAAP Reconciliation
Non-GAAP Reconciliation GAAP Reconciliation (Unaudited) (dollars in thousands except per share data) June 30, 2019 Se pte mbe r 30, 2019 De ce mbe r 31, 2019 Ma rch 31, 2020 Common shareholders' equity Less: Intangible assets Tangible common equity $ 1,184,582 $ 1,184,594 $ 1,190,681 $ 1,162,778 (10
Slide 36: Non-GAAP Reconciliation
Non-GAAP Reconciliation GAAP Reconciliation (Unaudited) (dollars in thousands except per share data) De ce mbe r 31, 2015 De ce mbe r 31, 2016 De ce mbe r 31, 2017* De ce mbe r 31, 2018 De ce mbe r 31, 2019 Common shareholders' equity Less: Intangible assets Tangible common equity $ 738,601 $ 842,79
Slide 37: Non-GAAP Reconciliation
Non-GAAP Reconciliation Eagle Bancorp, Inc. GAAP Reconciliation (Unaudited) (dollars in thousands except per share data) Thre e Months Ende d De ce mbe r 31, 2017 Tw e lve Months Ende d De ce mbe r 31, 2017 GAAP Change Non-GAAP GAAP Change Non-GAAP Income Sta te me nts: Income tax expense Net income
Slide 38: Non-GAAP Reconciliation
Non-GAAP Reconciliation Eagle Bancorp, Inc. GAAP Reconciliation (Unaudited) (dollars in thousands except per share data) Thre e Months Ende d Ma rch 31, 2019 GAAP Cha nge Non-GAAP Noninterest Expense Salaries and employee benefits Total noninterest expense Income Before Income Tax Expense Income Tax
Slide 39: Non-GAAP Reconciliation
Non-GAAP Reconciliation (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 of int
Slide 40: Market Information
Market Information • Population – 6th largest market in the U.S. – Washington, DC MSA 6.2 Million • Employment 3.0 Million – – 303,000 jobs lost in March and April of 2020 Largest job losses by sector: Hospitality & Food Service, Retail Trades, Education & Health Services Unemployment rate of 9.9% v
Slide 41: Greater Washington Economy - 2019
Greater Washington Economy - 2019 Inte rnational Othe r Fe de ral Hos pitality 2.7% As s ociations Dis trict of Columbia 24.0% 3.8% 16.8% 1.8% Suburban Maryland 28.0% Fe de ral Procure me nt 14.1% Non-Local B us ine s s 15.5% Othe r 1.5% Education & He alth Care 5.8% Northe rn Virginia 48.0% Local B
Slide 42: Loan Portfolio and Growth
Loan Portfolio and Growth (Dollar Values in Thousands) Loan Type Balance % of Total Balance % of Total Balance % of Total % Commercial and Industrial $ 1,510,835 21.1% $ 1,545,906 20.5% $ 1,773,478 22.6% 17.4% Commercial Real Estate: Owner Occupied Income Producing CRE Bridge Financing Subtotal 990,
Slide 43: Geographic Detail – Income Producing CRE
Geographic Detail – Income Producing CRE Maryland Prince George's Baltimore Anne Arundel Frederick Eastern Shore Howard Charles Other MD 32,432 2,219 1,902 6,115 1,833 2,227 6,341 - 101,856 15,295 9,730 - 58,458 - - - 2,670 85,681 - 2,621 - - - 155 - 1,823 - - - - - 1,305 31,129 6,599 8,598 39,378 5
Slide 44: Geographic Detail – Construction
Geographic Detail – Construction Maryland Prince George's Baltimore Anne Arundel Frederick Eastern Shore Howard Charles Other MD - - - - - - - - - - 18,131 - - - - 1,755 - - - - - - - - 4,186 655 - - - 490 - - - - - - - - - - 12,097 - - - - - - - - - - - - - - - 19,672 3,916 - - - - - - 35,955 4,571
Slide 45: Conservative Securities Portfolio
Conservative Securities (Dollar Values in Thousands) Portfolio US Government Agency Securities Mortgage Backed Securites - GSEs Municipal Bonds Corporate Bonds US Treasury Other Equity Investments Total Securities $146,948 531,784 72,828 52,087 34,986 198 $1,527 16,110 2,760 969 13 - $716 506 - 72 -
Slide 46: Nationally Recognized Financial Performance
Nationally Recognized Financial Performance • “Sm-All Stars” Designation 2011, 2013, 2014, 2015, 2016 & 2017 • Member of KBW Bank Honor Roll 2010-2018 • Named as one of Top 100 Performing Community Banks 2018 • Community Bankers Cup Award 2012-2019 46 Independent Community Bankers of America
Slide 47: Highly Regarded by Bank Rating Firms
Highly Regarded by Bank Rating Firms FIRM BANK RATING A-300/300 BAUERFINANCIAL, INC Green - *** 47
Slide 48: Experienced Management Team
Experienced Management Team Susan G. Riel, Chief Executive Officer & President Eagle Bancorp & EagleBank Ms. Riel, President - Chief Executive Officer of the Bank and Bancorp, and formerly Chief Operating Officer. Ms. Riel has been with the bank for 20 years. She previously served as Executive Vice
Slide 49: Experienced Management Team
Experienced Management Team Lindsey S. Rheaume, EVP, Chief C&I Lending Officer Mr. Rheaume joined EagleBank as Chief C&I Lending Officer in December 2014 and has over 33 years of commercial lending, credit risk and managerial experience in the financial industry. Most recently, he served as relation
Slide 50: Historical Balance Sheet
Historical Balance Sheet 5 Year Compound Growth Rate 2015Y 2016Y 2017Y* 2018Y 2019Y 2020YTD (Dollar Values in Thousands) Assets Cas h and Equivalents Securities Available for Sale Total Cas h and Securities $298,363 504,772 $368,163 559,708 $190,473 625,592 $321,864 807,645 $241,973 878,557 (1.1%) 1
Slide 51: Historical Income Statement
Historical Income Statement (Dollar Values in Thousands, except per share data) 5 Year Compound Growth Rate 2015Y 2016Y 2017Y* 2018Y 2019Y 2020YTD 17.5% 51.8% Total Interes t Incom e Total Interes t Expens e Net Interes t Incom e $ 253,180 19,238 $ 285,805 27,641 $ 324,034 40,147 $ 393,286 76,293 $