Eagle Bancorp, Inc. · NASDAQ:EGBN
Eagle Bancorp — Investor Presentation (February 2022)
38 slides from Eagle Bancorp's investor presentation, Feb 15, 2022
Slide 1: Investor Presentation February 2022
Investor Presentation Ticker: EGBN EagleBankCorp.com February 2022
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 45 years in banking 24 years with EGBN Charles Levingston EVP & Chief Financial Officer, Eagle Bancorp & EagleBank 21 years in banking 10 years with EGBN Executive Vice President and Chief Financial Officer of
Slide 4: Experienced Senior Management Team
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 13 years with EGBN Kathy Raffa Director, Chair - Audit Committee 6 years with EGBN Leslie Ludwig Director, Chair - Compensation Committee 5 years with EGBN Theresa LaPlaca Director, Chair - Risk Committee 2 yea
Slide 6: Summary Statistics
Summary Statistics 6 Total Assets $ billion Total Loans $ billion Total Deposits $ billion Tangible Common Equity $ billion Shares Outstanding 31,950,092 Market Capitalization $1.9 billion Tangible Book Value per Common Share $38.97 Institutional Ownership 73% Member of Russell 2000 yes Member of S&
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 (ROAA) Superior efficiency with limited branch network Recognized expertise in CRE, C&I and residential mortgage lending Strategically positioned in one of the most a
Slide 9: 2021 Highlights
2021 Highlights 9 • Performance: – ROAA 1.49% / ROACE 13.54% / ROATCE 14.73%(1) – Includes releases from the allowance for credit losses of $20.8 million • Shareholders: – Earnings of $5.52 per diluted share – Dividends of $1.40 per share/ Dividend Yield 2.62%(2) / Payout Ratio 25% – Book value per
Slide 10: 4th Quarter 2021 Highlights
4th Quarter 2021 Highlights 10 • Loans: $7.1 billion – Loans (ex-PPP) increased by $231 million(1) with most of growth in December – Loan Yield (ex PPP) 4.46%(1) – NPAs-to-Assets 0.26% – Annualized NCO-to-Loans 0.07% • Unfunded Commitments: $2.0 billion • Investments: $2.6 billion – Investments incr
Slide 11: Attractive & Resilient Market
Attractive & Resilient Market 11 • Washington DC MSA – Market is the 6th largest in the U.S. – Population of 6.3 million with a projected annual growth rate of 0.6% through 2027 – Workforce of 3.3 million – 2020 median household income of $107,000 vs. $66,000 U.S. – Unemployment of 3.3% (Dec.) vs. N
Slide 12: Limited Network of Offices
Limited Network of Offices 12
Slide 13: Local Leader in Deposit Share
Local Leader in Deposit Share 13 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 14: ESG - Social
ESG - Social 14 DE&IC (January 2022) • Launched Employee Resource Group (ERG) Program to foster a diverse and inclusive workplace. • Launching of the Mentorship Program that formally pairs skilled, knowledgeable mentors with mentees who can learn from them through regular, ongoing interaction. Notab
Slide 15: Asset growth driven by deposits
$5,716 $5,854 $6,974 $7,224 $9,189 $9,982 2016Y 2017Y 2018Y 2019Y 2020Y 2021Y (in m ill io ns ) Deposits Asset growth driven by deposits 15 • Deposit growth has driven asset growth ‒ Deposits up 38% since end of 2019 ‒ Increased liquidity at the bank • Cost of funds ‒ Peaked in 2019 ‒ Down to 26 bas
Slide 16: Loan Growth in 4th quarter
Loan Growth in 4th quarter 16 • 4th quarter loan growth ‒ Took a more competitive stance on credit spreads and on high quality loan opportunities in the latter part of 2021 ‒ Loans (ex PPP) up $230.9 million, up 3.4% from the prior quarter ‒ Largest net increase was in owner occupied CRE loans, whic
Slide 17: Solid capitalization
Solid capitalization 17 Note: Peers are depository institutions with assets from $7-$15 billion as of September 30, 2021 (excludes savings banks, thrifts and mutuals). Source: S&P Global Market Intelligence. Note: Tangible Common Equity is as of period end. • Capitalization ‒ Tangible common equity
Slide 18: Efficiency continues to be a strength
Efficiency continues to be a strength 18 • Reductions to non-interest expense (2021Y) ‒ Closed 3 branches ‒ Relocated two branches with more advantageous lease terms ‒ Consolidated operations center to a single location • Reductions to interest expense (2021Y) ‒ Redeemed $150 million sub-debt (5%) N
Slide 19: Strong returns
Strong returns 19 • Returns ‒ Return on tangible common equity (non- GAAP) negatively impacted by a higher level of capitalization (TCE/TA 10.60% vs. 8.69% peer median) ‒ Return on average assets continues to outpace peers • PPNR / Average Assets ‒ PPNR relatively stable as average assets in 2021Y a
Slide 20: Tangible book builds, dividends increases
$21.61 $24.67 $29.17 $32.67 $35.74 $38.97 2016Y 2017Y 2018Y 2019Y 2020Y 2021Y Tangible Book Value Per Share Tangible book builds, dividends increases 20 • Tangible book ‒ TBVPS growth of 12.5% (CAGR) from 2016 to 2021 • Dividend ‒ Quarterly dividend to $0.40 per share ‒ Dividend yield of 2.62%(1) co
Slide 21: Asset quality steady, reserves released
0.30% 0.20% 0.21% 0.56% 0.59% 0.26% 2016Y 2017Y 2018Y 2019Y 2020Y 2021Y NPAs* / Assets Asset quality steady, reserves released 21 *NPAs include loans 90 days past due and still accruing. Note: CECL adoption on January 1, 2020 led to an initial adjustment to the allowance for credit losses of $10.6 m
Slide 22: Margin not fully impacted
22 Margin not fully impacted • Impacting the margin ‒ Loans increased by $230.9 million in the 4th quarter with most of the increase late in the quarter ‒ Investments increased by $836.7 million with most of the increase late in the quarter 4.16% 4.15% 4.10% 3.77% 3.19% 2.81% 2016Y 2017Y 2018Y 2019Y
Slide 23: Deposit mix – 33% non-interest bearing
Deposit mix – 33% non-interest bearing 23 *Core deposits include CDAR’s and ICS reciprocal deposits. **Average noninterest bearing deposits to average deposits is 34% for the third quarter of 2021. Note: Chart is as of period end. • Deposit philosophy ‒ Commercial focus drives growth of Noninterest
Slide 24: Securities portfolio – cash items reduced
Securities portfolio – cash items reduced 24 • Accelerated pace of investments into securities ‒ Investments up $836.7 million in 4th quarter ‒ Weighted average duration moved down to 4.1 years *Includes allowance for credit losses. Note: Charts are as of period end. Excludes Federal Reserve and Fed
Slide 25: Loan mix – 35% C&I and Own Occ. CRE
Loan mix – 35% C&I and Own Occ. CRE 25 • Loan commentary – C&I/Owner Occupied CRE at 34.6% 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
Slide 26: Loan Portfolio – Details
Loan Portfolio – Details 26 Note: Data as of December 31, 2021. $ in millions Location C&I Owner Occupied CRE Income Producing CRE Owner Occupied Const. CRE Construction Land Residential Mortgage Consumer TOTAL (ex PPP) % of Total (ex PPP) PPP Total Percent of Total District of Columbia $305.1 $283.
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. Charts and data are as of period end. CRE Details ADC Details $ in millions 2020Y 2021Y Total ADC portfolio $1,378 1,508$ ADC/
Slide 28: Loan Quality – COVID and Other Metrics
Loan Quality – COVID 19 and Other Metrics 28 • COVID-19 Migration ‒ Beginning in the third quarter of 2020, all loans receiving a second COVID-19 deferral or payment deferral were downgraded to a watch rating, if not already rated as such. ‒ This was done to raise the visibility of these loans withi
Slide 29: Mortgages & FHA
Mortgages & FHA 29 • Mortgages ‒ Locked loans in 2021 were $994 million ‒ 4Q 2021 about 58% re-fi • FHA Multi-Family ‒ Ended the year strong with the fourth quarter that resulted in trade premiums, origination fees and mortgage servicing rights income of $2.5 million. ‒ For the year, the total was $
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, 2021 (excludes savings banks, thrifts and mutuals). There were 51 depository institutions within that range as of December 31,, 2021, and all were included in the peer group.
Slide 32: Historical Balance Sheet
Historical Balance Sheet 32 $'s in thousands 12/31/2016 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 Compound Growth Rate 5 years Assets Cash and Equivalents $368,163 $190,473 $321,864 $241,973 $1,789,055 $1,714,222 36.0% Securities 559,708 625,592 807,645 878,557 1,191,187 2,657,561 36.6%
Slide 33: Historical Income Statement
Historical Income Statement 33 $ in thousands, except per share data 2016Y 2017Y 2018Y 2019Y 2020Y 2021Y Compound Growth Rate 5 years Total Interest Income $285,805 $324,034 $393,286 $429,630 $389,986 $364,496 5.0% Total Interest Expense 27,641 40,147 76,293 105,585 68,424 39,982 7.7% Net Interest I
Slide 34: Loan Portfolio – Income Producing CRE
Loan Portfolio – Income Producing CRE 34 Note: Data as of December 31, 2021. $ in millions Office Family & Hotel/ Mixed Multi- & Office Res. % of Location Motel Industrial Use Family Condo Retail Condo Other Total Total District of Columbia $184.6 $14.4 $192.3 $221.5 $167.5 $91.3 $85.3 $173.8 $1,130
Slide 35: Loan Portfolio – CRE Construction
Loan Portfolio – CRE Construction 35 Note: Data as of December 31, 2021. $ 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 $40.6 $224.4 $51.3 $0.0 $62.3 $1.9 $28.6 $11.3 $420.4 52
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) $ in thousands 2016Y 2017Y 2018Y 2019Y 2020Y 2021Y Efficiency Ratio Net interest income $258,165 $283,887 $316,993 $324,045 $321,652 $324,514 Noninterest income 27,284 29,372 22,586 25,699 45,696 40,385 Revenue $285,449 $313,259 $339,579 $349,744 $367,348 $364,
Slide 38: Non-GAAP Reconciliation (unaudited)
38 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
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