Eagle Bancorp, Inc. · NASDAQ:EGBN
Eagle Bancorp — Investor Presentation (June 2016)
51 slides from Eagle Bancorp's investor presentation, Jun 27, 2016
Slide 1: Investor Presentation June 2016
Ticker: EGBN www.eaglebankcorp.com Investor Presentation June , 2016
Slide 2: Forward Looking Statements
1 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
Slide 3: Company Overview
2 Company Overview ▪ Eagle Bancorp, Inc. is a growth - oriented community bank headquartered in Bethesda, Maryland ▪ Focused on the Washington, DC metropolitan area, with 21 branches ▪ Commercially - oriented business model with deep relationships of loans, core deposits and related products ▪ #1 in
Slide 4: Investment Highlights
3 Investment Highlights ▪ Focused on Profitability and Balanced Financial Performance ▪ Strong Net Interest Margin = 4.31% ▪ Clean Asset Quality: NPAs/Assets = 0.42% ▪ Low Charge - Off History: NCOs/Average Loans = 0.09% ▪ Driven by Long - Term, Deep Customer Relationships ▪ Demonstrated Consistent
Slide 5: Experienced Senior Management Team
Experienced Senior Management Team Years Years in with Name Title/Function Banking EGBN Ronald D. Paul Chairman, President & CEO 29 18 Robert P. Pincus Vice Chairman 43 8 Susan G. Riel Sr. EVP & COO - EagleBank 40 18 James H. Langmead EVP & Chief Financial Officer - Eagle Bancorp & EagleBank 45 11 L
Slide 6: Summary Statistics
5 Summary Statistics NOTE: Data at March 31, 2016 unless otherwise noted. (1) Please refer to the Non - GAAP reconciliation and footnotes in the appe ndices on pages 33 - 34. SBLF paid off on 11/2/2015. Total Assets: $6.1 billion Total Loans: $5.2 billion Total Deposits: $5.2 billion Tangible Common
Slide 7: EagleBank Branch Locations
EagleBank Branch Locations Bethesda Tyson's Corner Montgomery County Prince George’s County Fairfax County Loudoun County Washington, DC Reston N Merrifield I - 270 I - 95 I - 495 US 50 I - 95 I - 495 I - 66 I - 495 Branch System Virginia 9 Maryland 7 Washington, DC 5 Total 21 NOTE: Branch Totals as
Slide 8: Deposit Market Share
7 Deposit Market Share NOTE: Washington , D.C. Metro Area defined as: MD - Montgomery and Prince George's; DC - Washington DC; VA - Arlington, Alexandria, Fairfax, Fairfax (City), Falls Church, Loudo n, Prince William, Manassas, Manassas Park. Data excludes: E*Trade whose deposits are substantially
Slide 9: Performance vs. Peer Group
Performance vs. Peer Group NOTE: (1) Highly Valued Peer Group shown on page 32. Key ratios represent the Peer Group median value for the period shown. (2) Please refer to the Non - GAAP reconciliation and footnotes in the appendices on pages 33 - 34. * Change in 1Q2016 Return on Average Equity due t
Slide 10: Consistent Balance Sheet Growth
$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000 $5,500 $6,000 $6,500 Millions of Dollars 11Q1 11Q2 11Q3 11Q4 12Q1 12Q2 12Q3 12Q4 13Q1 13Q2 13Q3 13Q4 14Q1 14Q2 14Q3 14Q4 15Q1 15Q2 15Q3 15Q4 16Q1 Total Assets Consistent Balance Sheet Growth (1) Highly Valued Peer Group shown on
Slide 11: Consistent Net Income Growth
$4,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000 $11,000 $12,000 $13,000 $14,000 $15,000 $16,000 $17,000 $18,000 $19,000 $20,000 $21,000 $22,000 $23,000 $24,000 Thousands of Dollars 11Q1 11Q2 11Q3 11Q4 12Q1 12Q2 12Q3 12Q4 13Q1 13Q2 13Q3 13Q4 14Q1 14Q2 14Q3 14Q4 15Q1 15Q2 15Q3 15Q4 16Q1 Net Income A
Slide 12: Net Interest Margin
Net Interest Margin NOTE: Highly Valued Peer Group shown on page 32. Represent Peer Group median values for the periods shown. 11 4.41% 4.33% 4.23% 4.38% 4.31% 3.79% 3.72% 3.66% 3.62% 3.65% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 EGBN Peer Group
Slide 13: Yields and Cost of Funds
Yields and Cost of Funds NOTE: Highly Valued Peer Group shown on page 32. Represent Peer Group median values for the periods shown. SOURCE: SNL Financial 12 0.38% 0.37% 0.35% 0.33% 0.36% 0.37% 0.36% 0.36% 0.38% 0.33% 0.25% 0.50% 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 Cost of Funds EGBN Peer Group 4.79%
Slide 14: Earnings per Share
$0.61 $0.56 $0.58 $0.60 $0.62 $0.64 $0.66 $0.68 $0.70 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 Earnings per Share $0.68 13 $0.65 $0.63 $0.61 $0.61
Slide 15: Tangible Book Value per Share
$16.82 $17.46 $18.10 $18.83 $19.48 $15.00 $15.50 $16.00 $16.50 $17.00 $17.50 $18.00 $18.50 $19.00 $19.50 $20.00 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 Tangible Book Value per Share NOTE: Please refer to the Non - GAAP reconciliation and footnotes in the appendices on pages 33 - 34. 14
Slide 16: Consistent Increases in Operating Leverage
$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 Revenue ($000s) Non-Int Expense ($000s) Consistent Increases in Operating Leverage NOTE: P lease refer to the Non - GAAP reconciliation and footnotes in the appendices on pages 33 - 34. Data for Q2, Q3, Q4 2014 are shown on an operating basi
Slide 17: Consistently Improving Efficiency Ratio
Consistently Improving Efficiency Ratio Note: Highly Valued Peer Group shown on page 30. Represent P eer Group median values for the periods shown . (1) See Non - GAAP reconciliation on pages 33 - 34. Source: SNL Financial 16 45% 42% 42% 41% 41% 57% 54% 56% 56% 56% 40% 45% 50% 55% 60% 65% 2015Q1 201
Slide 18: Moderate Interest Rate Risk Position
17 Moderate Interest Rate Risk Position Source: FTN Quarterly IRR Report ▪ Both assets and liabilities remain short with repricing durations at 25 months on loans and 30 months on deposits ▪ A 100 bps shock increase would increase Net Interest Income by about $1.1 million or 0.4% on a static balance
Slide 19: Deposit Composition and Growth
(1) Core deposits include CDAR’s and ICS reciprocal deposits. Commercial focus drives growth of Noninterest Bearing Demand accounts Wholesale Deposits used to enhance favorable cost of funds, not a strategy to replace growth in core deposits Deposit Composition and Growth 18 (Dollar Values in Th
Slide 20: Balanced Loan and Deposit Growth
Balanced Loan and Deposit Growth 19 $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $ in Billions Total Loans Total Deposits
Slide 21: Detail of Loan Portfolio
Detail of Loan Portfolio NOTE: At March 31, 2016 Concentration in quality markets: Washington, DC, Montgomery County, Fairfax County Held for Sale residential mortgages not included 20 (Dollar Values in Thousands) County C&I Owner Occupied CRE Owner Occupied Const. Income Producing CRE Construct
Slide 22: CRE Risk Management
CRE Risk Management Executive & Board Level Oversight of Approval Process Disciplined Underwriting Proactive Portfolio Management Quarterly Stress Testing of Portfolio Quarterly Independent Credit Review Dedicated Special Assets Team 21
Slide 23: Credit Quality Trends
Credit Quality Trends 22 (Dollars Values in Thousands) 06/30/14 09/30/14 12/31/14 03/31/15 06/30/15 09/30/15 12/31/15 03/31/16 Nonperforming Assets: 90 or More Days Past Due -$ -$ -$ -$ -$ -$ -$ -$ Nonaccrual 22,507 29,343 22,443 19,572 14,871 14,467 13,240 21,928 Total Nonperforming Loans (NPLs) 22
Slide 24: Credit Quality Trends – CRE Concentration
Credit Quality Trends – CRE Concentration 23 (1) Peer group data is from the respective BHCPR group at the time of reporting . (2) Represents concentration as a percentage of holding company consolidated risk - based capital. * Denotes an acquisition completed during that year. (Dollars Values in Th
Slide 25: Credit Quality Trends – ADC Concentration
Credit Quality Trends – ADC Concentration 24 (1) Peer group data is from the respective BHCPR group at the time of reporting . (2) Represents concentration as a percentage of holding company consolidated risk - based capital. * Denotes an acquisition completed during that year. (Dollars Values in Th
Slide 26: Consistent Asset Quality
Consistent Asset Quality Total Loans ($mms) 25 Net Charge-Off History for the periods ended December 31, 2015 EGBN EGBN Loan Type 2 Year Avg. 3 Year Avg. Income Producing CRE 0.02% 0.03% Owner Occupied CRE 0.09% 0.06% Construction and Land 0.28% 0.28% Commercial & Industrial 0.36% 0.44% 0.0% 2.0% 4.
Slide 27: Capital Strength
Capital Strength $71.9 million of SBLF Preferred Stock redeemed in November 2015 $100 million of Common Equity raised through an underwritten offering in March 2015 $15.3 million of SBLF Preferred Stock assumed in October 2014. Dividend Rate is 1.0% $70 million of 10 Year non - call 5.75% Su
Slide 28: Key Success Factors
Key Success Factors Building and maintaining core relationships o Cross sales o Focus on key customers Maintenance of strong credit culture o Conservative underwriting criteria and loan policies o Disciplined committee approval and review process o Periodic loan and portfolio stress testing o Pr
Slide 29: Key Success Factors (continued)
Key Success Factors (continued) Disciplined ALCO process Maintained focus on areas of strength o Concentration on core geographic markets and products Built the proper infrastructure to support the increased volume of business and regulation Comprehensive Management and Board level reporting
Slide 30: EagleBank Growth Strategy
EagleBank Growth Strategy Profitability • Pricing discipline to sustain Net Interest Margin • Diligent expense control to maintain Efficiency Ratio Maintain Credit Quality • Enhanced monitoring of portfolio • Expanded stress testing Emphasis on Organic Growth • Only 3.0% deposit market share i
Slide 31: Stock Price Performance
Stock Price Performance 1 Year 3 Year 5 Year EGBN 29.4% 128.7% 347.0% NASDAQ Bank Stock Index 5.1% 34.1% 60.1% NASDAQ Stock Market Index (2.4%) 43.2% 74.5% S & P 500 Index (0.5%) 28.6% 55.9% EGBN Stock Price Performance SOURCE : SNL Financial, Chart and calculations as of close of trading on May 31,
Slide 32: Appendices
Appendices 31
Slide 33: Highly Valued Peer Group
Highly Valued Peer Group NOTE: Peer Group includes all publicly - traded banks Nationwide with $2.5 billion to $7.5 billion in assets that trade at 200% o f tangible book value or higher. Prior quarter or prior quarter LTM used when current data is unavailable. (1) Nonperforming assets are defined a
Slide 34: Non-GAAP Reconciliation
Non - GAAP Reconciliation 33 GAAP Reconciliation (Unaudited) (dollars in thousands except per share data) Three Months Ended Three Months Ended March 31, 2016 March 31, 2015 Common shareholders' equity 762,496$ 669,630$ Less: Intangible assets (108,268) (109,617) Tangible common equity 654,228$ 560,
Slide 35: Non-GAAP Reconciliation Footnotes
Non - GAAP Reconciliation Footnotes 34 (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 t
Slide 36: Market Information – Washington, DC MSA
35 Market Information – Washington, DC MSA Population 6.2 Million □ 5th largest market in the U.S. Employment 3.2 Million □ 68,500 new jobs created in last year □ Employment growth driven by private sector, over 295,000 new private sector jobs created over last five years □ Unemployment rate of
Slide 37: Greater Washington Economy
36 Other 8.9% Non-Local Business 10.6% Associations 2.2% Hospitality 3.6% International 4.9% Other Federal 13.7% Federal Procurement 16.3% Local Business 39.9% Greater Washington Economy NOTE: Other includes Health Care/Education and Media SOURCE: The Wall Street Journal, George Mason University - C
Slide 38: Loan Portfolio and Growth
Loan Portfolio and Growth 37 (Dollar Values in Thousands) Annual Growth Rate Year-to-Date (Annualized) Loan Type Balance % of Total Balance % of Total Balance % of Total % % Commercial and Industrial 933,714$ 21.0% 1,052,257$ 21.1% 1,060,046$ 20.6% 13.5% 3.0% Owner Occupied 493,003 11.1% 498,102 10.
Slide 39: Geographic Detail - Income Producing CRE
Geographic Detail - Income Producing CRE NOTE: At March 31, 2016 Focus in core sub - markets: Washington, DC, Montgomery County, Fairfax County 38 (Dollar Values in Thousands) Single Redevel./ Office/ Mixed Multi- & 1-4 County Retail Condo Use Family Single & 1-4 Family Hotel Industrial Other TOTA
Slide 40: Geographic Detail – Construction
Geographic Detail – Construction NOTE: At March 31, 2016 Focus in core sub - markets: Washington, DC, Montgomery County, Fairfax County Recognized expertise in Single Family and Condo construction lending Portfolio is diversified among collateral types 39 (Dollar Values in Thousands) Single &
Slide 41: Loan Portfolio by Risk Rating
Loan Portfolio by Risk Rating Periodic review of loan portfolio and risk ratings by independent, third - party credit review firm 40 (Dollar Values in Thousands) Loan Portfolio as of: % of % of Risk Rating Balance Loans Balance Loans 1000 - Prime $2,904 0.1% $2,983 0.1% 2000 - Excellent 270,810 6.
Slide 42: Conservative Securities Portfolio
Portfolio has $7.1 million of net unrealized gains at March 31, 2016 No holdings of GSE equities or bank Trust Preferred or bank Trust Preferred CDOs Average life of portfolio is 3.9 years Excludes Federal Reserve and Federal Home Loan Bank stock Conservative Securities Portfolio 41 (Dollar
Slide 43: Nationally Recognized Financial Performance
▪ “Top Investment Idea” Recommendation 2012 ▪ “Sm - All Stars” Designation 2011, 2013, 2014 & 2015 ▪ Designated as a “Challenger” Bank 2015 ▪ Honor Roll of Community Banks 2010 - 2015 ▪ Ronald D. Paul named East Coast Region Community Banker of the Year 2014 ▪ Community Bankers Cup Award 2012 - 2014
Slide 44: Highly Regarded by Bank Rating Firms
Highly Regarded by Bank Rating Firms FIRM BANK RATING 300/300 Green - *** B AUER F INANCIAL , I NC A - 43
Slide 45: Experienced Management Team
Experienced Management Team Ronald D. Paul, Chairman, President and CEO Mr. Paul, a founder of EagleBank, has served as Chairman since May 2008, and prior to that time was Vice Chairman and Chief Executive Officer since the organization of the Company. Since June 2006, he has served as Chief Executi
Slide 46: Experienced Management Team
Experienced Management Team Susan G. Riel, Senior EVP, Chief Operating Officer of EagleBank & EVP, Eagle Bancorp, Inc. Ms. Riel, Senior Executive Vice President - Chief Operating Officer of the Bank, and formerly Chief Administrative Officer. Ms.Riel has been with the bank for 16 years. She previous
Slide 47: Experienced Management Team
Experienced Management Team Laurence E. Bensignor, EVP & General Counsel, Eagle Bancorp, Inc. and EagleBank Mr. Bensignor joined the bank after 29 years in the legal and real estate industries in the Washington, DC area. For ten years, Mr. Bensignor served as Trustee of the Van Metre Family Trusts,
Slide 48: Historical Balance Sheet
47 Historical Balance Sheet (Dollar Values in Thousands) 2011 2012 2013 2014 2015 5 Year Compound Growth Rate 1 Year Growth Rate Assets Cash and Equivalents $232,411 $339,334 $306,960 $256,025 $298,363 38.7% 16.5% Securities Available for Sale 324,053 310,514 389,405 404,903 504,772 16.3% 24.7% Tota
Slide 49: Historical Quarterly Balance Sheet
48 Historical Quarterly Balance Sheet (1) Please refer to the Non - GAAP reconciliation and footnotes in the appendices on pages 33 - 34. (Dollar Values in Thousands) Jun 2014 Sep 2014 Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015 Mar 2016 Growth Rate 1Q2016 vs 1Q2015 Growth Rate 1Q2016 vs 4Q2015 Ass
Slide 50: Historical Income Statement
49 Historical Income Statement Data for 2014 on an operating basis, net of merger related expenses (Dollar Values in Thousands, except per share data) 2011 2012 2013 2014 2015 5 Year Compound Growth Rate 1 Year Growth Rate Total Interest Income 119,124$ 141,943$ 157,294$ 191,573$ 253,180$ 21.2% 32.2
Slide 51: Historical Quarterly Income Statement
50 Historical Quarterly Income Statement Data for Q2, Q3 and Q4 2014 on an operating basis, net of merger related expenses (Dollar Values in Thousands, except per share data) Jun 2014 Sep 2014 Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015 Mar 2016 Growth Rate 1Q2016 vs 1Q2015 Growth Rate 1Q2016 vs 4Q