Eagle Bancorp, Inc. · NASDAQ:EGBN
Eagle Bancorp — Boenning & Scattergood Bank Forum (August 2014)
59 slides from Eagle Bancorp's conference presentation, Aug 12, 2014
Slide 1: Eagle Bancorp Inc. - Boenning & Scattergood Bank Forum
” @EAGLE BANCORP INC. Boenning & Scattergood Bank Forum August 12, 2014 Ticker: EGBN www.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 growth oriented community bank headquartered in Bethesda, Maryland = Focused on the Washington, DC metropolitan area, with 18 branches = Commercially oriented business model with deep relationships of loans, core deposits and related products = #1 in depos
Slide 4: Investment Highlights
Investment Highlights Focused on Profitability and Balanced Financial Performance Superior Net Interest Margin — 4.48% for Q2 2014 Strong Asset Quality — NPA’s 0.80% at 6/30/14 Leading Local Community Bank Driven by Long-Term, Deep Customer Relationships Demonstrated Organic Growth Strategic Geograp
Slide 5: Experienced Senior Management Team
| Experienced Senior Management Team Years Years in with Name Title/Function Bai EGBN Ronald D. Paul Chairman, President & CEO 27 16 Robert P. Pincus Vice Chairman 4 3 Susan G. Riel Sr. EVP & COO - FagkBank 38 16 James H. Langmead EVP & Chief Financial Officer - Eagle Bancorp & EagkBank 4B 9 Michael
Slide 6: Planned Acquisition of VGBK - Transaction Summary
Planned Acquisition of VGBK .- transaction Summary * Virginia Heritage Bank will be acquired and merged into EagleBank * Transaction value of $182.9 million or $29.00 per share + Fixed price within range of EGBN price of $29.00 to $35.50 = Above range exchange ratio and shares issued is fixed * Belo
Slide 7: Planned Acquisition of VGBK - Transaction Perspective
Planned Acquisition of VGBK. Transaction Perspective » VGBK is a high performing bank with strong credit quality * Solidifies Eagle as the largest community bank in the Washington D.C. metro area, with opportunity for continued growth in strong Norther Virginia market + Seasoned management with expa
Slide 8: Summary Statistics - June 30, 2014
Summary Statistics — tune 30, 2014 Total Assets: ‘Total Loans: ‘Total Deposits: ‘Tangible Common Equit ‘Tangible Book Value per Common Share: SBLF Preferred: (1% Dividend Rate, until December, 2015) Market Capitalization (at close July 31, 2014): Insider Ownership: Institutional Ownership: Member of
Slide 9: EGBN - Financial Indicators - Regional Peer Analysis
| EGBN - Financial Indicators — Regional Peer Analysis Regional EGBN Peers (1) Key Ratios (at or for the quarter ended June 30) 2Q2012__2Q2013__2Q2014 2Q2014 Net Interest Margin 439% 4.27% 4.48% 3.46% Efficiency Ratio 52.28% 49.33% 48.30% 68.00% Non-Interest Income’Total Revenue 12.53% 16.85% 8.32%
Slide 10: Financial Indicators - Local Peer Analysis
Financial Indicators — Local Peer Analysis Loan Growth (June 30, 2013 - June 30, 2014) = Commercial & Industrial = Commercial Real Estate = Construction & Development = Total Loans Deposit Growth (June 30, 2013 - June 30, 2014) =» Demand Deposits = Money Market Accounts = Certificates of Deposit Tot
Slide 11: EagleBank / Virginia Heritage Bank Locations
EagleBank / Virginia Heritage Bank Locations County Loudoun ‘Amery County Reston ‘e a G as pe Arlington oy =e Fairfax County 10
Slide 12: Enhanced Deposit Market Share in Region
| Enhanced Deposit Market Share in Region Local 2013 eisor2012 ers0r2013 Annual Rank Rank Company Name Branches Balance Balance Growth 1 Wells Fargo & Co 160 $21,962.31 $23,769,182 82% 2 Capital One 194 28,788910 22,128,708 23.1%), 3 Bark of America 170 20233988 21,404,120 5.8% 4 Suirust 163 16,494,
Slide 13: Washington Metropolitan Area Primary Sub-Markets
| Washington Metropolitan Area Primary Sub-Markets fo Frederick, Maryland 238,502 114,734 9,478 Saint Mary's, Maryland 109,138 37,765 3,413 Favauler, Virginia e6.ess 223012606 Stafford, Virginia 132,927 38,580 3,283 Spotsylvania, Virginia 124,666 37,821 3,629] Source: SNL Financial, Greater Washingt
Slide 14: Consistent Balance Sheet Growth
Millions of Dollars Consistent Balance Sheet Growth $4,0005 Total Assets $3,504 3.0004 92,5004 82,0004 Peer CAGR: 3.2%" s1,s004 $1,004 ss00- 09Q2 09Q3 09Q4 10Q1 10Q2 10Q3 10Q4 11QI 11Q2 11Q3 1IQI 12Ql 12Q@? 12Q3 12QH_13QI 13Q2 1393 13Q4 QI 14Q2 @ (0) Reional pers includes pubil.traded commercial ban
Slide 15: Contribution from Non-Interest Income
Contribution from Non-Interest Income Sale of Loans & (09209Q309Q410Q110Q210Q310Q411Q111Q211Q311Q412Q112Q2 12Q312Q413Q113Q213Q313Q414Q114Q2
Slide 16: Consistent Net Income Growth
Consistent Net Income Growth BINet Income Available to Common TARP Dividend O SBLF Dividend $1294 513.0009 S 312.0004 si1,0004 10,0004 39.0004 33.0004 37.0004 36,0004 ‘Thousands of Dollars 35,0004 s4,0004 33,0004 32,0004 s1,0004 so+ 09Q2 0993 O9Qt 10QI 10Q2 10Q3 IOI NQI 11Q2 113 1H 1291 12Q2 1293 QI
Slide 17: Geographic Detail of Loan Portfolio
Geographic Detail of Loan Portfolio Prince George's 34,664 222 164,301 21,267 3,336 2030 2.837 9 297,731 9.1% Other MD 41554 17984 4384 234,136 42,249 32,620 88106851 300 394888 12.0% 25,14 E 05 : Tal 1,954 122612, 2468 4,450 583 751 2. Other VA 10389 3; $5191 11,505 15,416 410 1,137 . 3% Other USA
Slide 18: Geographic Detail of CRE - Construction
Geographic Detail of CRE — Construction 10,500 1,367 6,955 2445 21,267 4.2% : 2,928 6421 15,110 10,713 42,249 8,3% 10,636 3,184 2,3 . : 16,205, Prince Wiliam 2,468 . - : - - : 2468 0. Other VA, - 3,132 : - 3,164 - : 5,209 11,505 2.3% Other USA $+ $2059 $ 468 - S$ - S$ - S$ = 8 1457 $ 4,002 08% Total
Slide 19: Geographic Detail of CRE - Income Producing
Geographic Detail of CRE- Income Producing ey WEEE cee THER T_T se ee TERR vland heaomy «$s SMa S gam Se Suse SS 2a Sine Lee George's 40,404 22,080 18,285 9,979 7,977 17,196 26,653 21,727 164,301 12.6% Other MD 61,004 45,529 «25,161 :17,249 14082 39,381,789 24,941 234,136 18.0% Loudoun 3,360 4,653 2
Slide 20: EGBN - CRE Risk Management
EGBN — CRE Risk Management Executive Level & Board Oversight Disciplined Underwriting & Approval Process Robust Portfolio Management Stress Testing of Portfolio Quarterly Independent Credit Review Dedicated Special Assets Team
Slide 21: EGBN - Credit Quality Trends
EGBN - Credit Quality Trends 30-89 Days Past Due $ 41807 $ 19,927 $ 27,990 $ 18,253 $ 8,794 $ 17,143 $ 10,465 $ 19,222 Nonperforming Assets: 90 or More Days Past Due S$ - S$ - S$ - S$ - S$ - S$ - S$ - 8 - Nonacerual 32,423 30,684 __ 28,165 __ 23,507 __27.546___24,702__ 36,326 22.507 Total Nonperform
Slide 22: EGBN - Consistent Asset Quality
| EGBN- Consistent Asset Quality Total $3,500 $3,000 $2,500 $2,000 $1,500 $1,000, $500 $0 Loans ($000s) yowo2 — 20uaz,z01az,— 20132201402 MmETotal Loans —=NPAs/Assets —=Charge Offs 20.0% 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% (Dollar Values in Thousands) 2009 2010 2011 20 2013 6/30/1
Slide 23: Balanced Loan and Deposit Growth
Balanced Loan and Deposit Growth '$3,500,000,000 '$3,000,000,000 $2,500,000,000 $2,000,000,000 + '$1,500,000,000 ‘= Total Loans Total Deposits $1,000,000,000 $50,000,000 (1) QB2011 Deposits exclude the “settlement deposit”. (2) Ql 2013 “TAG” related deposit loss was $130 million oa
Slide 24: Deposit Composition
| Deposit Composition (Dates Volusia Thousands) Deposit Type %of %of %of Balance Total Balance Total Balance Total % Noninterest Bearing (1) S 767,808 26.6% $849,408 26.3% $945,485 28.1% 23.1% Interest Bearing ‘Transaction 107,013 3.7% 118,580 3.7% 128,415 3.8% 20.0% Core Savings & Money Market (2)
Slide 25: Superior Relationships/Net Interest Margin
Superior Relationships/Net Interest Margin 5.25% 4.75% 4.25% eer 3.75% a Net Interest Margin (%) 0 0 22009 32009 2@201 3201 ‘Note: Regional pore includes publicly-traded commercial banks with Asvet between SI and $5 billion and headquartered in Washington, DC, Virginia, ‘West Virginia, Maryland, Pen
Slide 26: Conservative Securities Portfolio
| Conservative Securities Portfolio Petes Lotus te Thess US Government Agency Secuities ns 9 Mortgage Backed Secustes - OSE ais 301 ‘Municipal Bonds a3i7 ‘sos Other Equity Investments - ° tal Securities = <a Sas US Government Agency Securities 148 47338 Mortgage Backed Securites - GSEs 675 agers ‘Mu
Slide 27: Capital Strength
| Capital Strength (Doltars Vatues in Thousands) Total Assets ‘Total Stockholders Equity ‘Total Common Stockholders Equity Tier 1 Leverage Ratio ‘Tier 1 Risk Based Capital Ratio ‘Total Risk Based Capital Ratio ‘Common Eq Tier 1 (CETD Ratio ‘Tangible Common Equity Ratio @) S 3,324,865 S 361,882 S 305
Slide 28: Nationally Recognized Financial Performance
Nationally Recognized Financial Performance SANDLER O'NEILL + PARTNERS " /0p Investment Idea” Recommendation 2012 = “Sm-All Stars” Designation 2011 & 2013 = Designated as a “Grower” Bank 2012 = Honor Roll of Community Banks 2010-2013 = Ranked among Top 50 Best Performing Community Banks in the U.S.
Slide 29: Highly Regarded by Bank Rating Firms
| Highly Regarded by Bank Rating Firms FIRM IDC Analyze the Future | VERIBANC = BAUERFINANCIAL, INC RATING 275/300 Green - ***
Slide 30: Market Information - Washington, DC MSA
Market Information —Washington, DC MSA = Population 6.2 Million a 5th largest market in the U.S = Employment 3.1 Million a 26,800 new jobs created in last year a Average annual job creation is 29,600 over last decade a Highest in net new job growth in the U.S. over last decade a Unemployment rate of
Slide 31: Unemployment Rate - Largest US Markets
Unemployment Rate- Largest US Markets May, 2014 30 Source: BLS, Not Seasonally Adjusted
Slide 32: Average Sales Price Percent Change Washington MSA
Average Sales Price Percent Change Washington MSA All Housing Types Annual Change Annual Change by Month 2000 -2009 2010 2011 2012 2013 2014 a PS 485455 4 1 t 39 aa arpa ATT FF 9 ; 22 q2 2 2522 0 Lill Pe eet uliull | TTT | AFF 0 ESEESSPOSES SSOSES SE PSES SES SESESS Source: MRIS, GMU Center for Regi
Slide 33: Greater Washington Economy
Greater Washington Economy Other Federal ‘International 7 4 Hospitalty Federal Procurement Assoditions Nom Local Business omer 89% Local Business 39.9% District of Columbia 24.0% Suburban Maryland ‘Northern Virginia Gross Regional Product $449 Billion Note: Other includes Health Car Source: The Wall
Slide 34: 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 Periodic Loan and Portfolio Stress Testing Pr
Slide 35: Key Success Factors (continued)
Key Success Factors (continued) = Disciplined ALCO process = Maintained focus on areas of strength » Concentration on core geographic markets and products = Built the proper infrastructure to support the increased volume of business and regulation = Significant Management and Board level reporting =
Slide 36: EagleBank Growth Strategy
EagleBank Growth Strategy Close and Integrate Virginia Heritage Bank Acquisition ° Targeting close in 4Q2014 Profitability * Pricing discipline to sustain Net Interest Margin * Diligent expense control to maintain Efficiency Ratio Maintain Credit Quality Emphasis on Organic Growth * Only 2.34% depos
Slide 37: EGBN Stock Price Performance
| EGBN Stock Price Performance Price Change (%) 0 iar R “ Ww Vt _ Pm ai Ay | pA oN . ll ake ee 3 2 & 8 $ § &§ & F & F FS Stock Price Performance 1 Year 3 Year 3 Year EGBN 26.8% 171.7% 311.2% NASDAQ Bank Stock Index. 5.4% 46.3% 49.6% S & P 500 Index 14.5% 49.4% 95.5% Source: SNL Financial, Bloomberg,
Slide 38: EGBN Relative Valuation
| EGBN Relative Valuation Trailing P/E Ratio 35 20 EGBN SNL Nat'l Avg KBW Regional SNLMid-Atl NASDAQ Russell 3000 S&P-500 Bank Avg Avg Source: SNL & KBW. Chat and ealeuations as ofelose March 31, 2014.
Slide 39: Appendices
Appendices
Slide 40: Loan Portfolio Trends
Loan Portfolio Trends (Din Vest Thats) Loan Type Babnee_ _% of Total Bakneo_ _% of Total Baknee_ _% of Total % Commercial and Industral $636,623 237% © $694,350 236% = $ 726611 22.2% 9.3% Owner Oceupied 311,335, 11.6% 317,491 330,073, 10.1% 6.0% 7.9% Owner Ocoupied-Const 28,807 11% 34,659 38,368 1.2
Slide 41: Loan Portfolio Composition
| Loan Portfolio Composition Total Gross Loans: $3.3 Billion ‘Note: At June 30, 2014 40
Slide 42: Diversified Commercial Real Estate Portfolio
| Diversified Commercial Real Estate Portfolio Total : $509.0 Million Total : $1.3 Billion ‘Note: At June 30, 2014 at
Slide 43: Loan Portfolio by Risk Rating
Loan Portfolio by Risk Rating 4000 - Acceptable 5000 - Acceptable with Risk: 6000- Watch 7000 - Special Mention 8000- Substandard 9000 - Doubtfil 9999-Loss 2,886 84% 250,696 380% 1395341 Mm 1139502 125% 397855 19% 39841 22% 16257 19% 35991 . 0.0% é Z 0.0% ; grave. songs. = Periodic review of loan po
Slide 44: Geographic Detail of NPA's
| Geographic Detail of NPA’s (Collar Vabws in Thousands) Maryland Motgomry = $ «17S s SS - $ OS - $ = S$ MBS = $1000 $ 8 $1085 Prine George's : 243 : 73 : 419 Mo 6 12 550 IL Other MD m 7 _ ° . 8 7 © . 810 181 991 Washington DC 4.813 . . 10s) 3388 : . 9.216 139410610 Virginia Alesana “ 2U18 : “ “ . -
Slide 45: Virginia Heritage Bank Overview - Through June 30, 2014
| Virginia Heritage Bank Overview - Through June 30, 2014 = Growing community bank in Eagle’s target market Six branches in Northern Virginia * Attractive demographic trends * Growing market of small and medium sized businesses = Exceptional asset quality = Outstanding organic growth * All growth ac
Slide 46: EGBN/VGBK - Combined Loan & Deposit Composition
EGBN/VGBK - Combined Loan & Deposit Composition Virginia Heritage Bank Combined ‘Consumer [Fotal Loans ($ millions): $756) [Total Loans (S millions)": S 4035 Virginia Heritage Bank Combined ‘Time > $100) 11% ‘Time > $100) 6% INOW & Other INOW & Other 4% 3% NOW & Other 4% [Teta Deposits Smilin) S776)
Slide 47: Moderate Interest Rate Risk Position
Moderate Interest Rate Risk Position ‘Source: FTN Quarterly IRR Report
Slide 48: Acquisition Strategy & History
Acquisition Strategy & History Significant Due Diligence precedes any Offer to Acquire Accretive Transactions are always the Goal Acquisition #1 (F&T completed on August 31, 2008) a System conversion successfully completed one week after close a Targeted expense savings achieved in methodical and th
Slide 49: 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. He also has served as Chairman of the Board o
Slide 50: Experienced Management Team
| Experienced Management Team Susan G. Riel, Senior EVP, Chief Operating Officer of EagleBank 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 13 years. She previously served as Executive V
Slide 51: Experienced Management Team
| Experienced Management Team AntonioF. Marquez, EVP, Chief Commercial Real Estate Lending Officer Mr. Marquez, Executive Vice President, recently joined EagleBank as the Chief Real Estate Lender. Prior to joining EagleBank, Mr. Marquez established the real estate lending franchise for HSBC for the
Slide 52: Experienced Management Team
| Experienced Management Team James HL EVP, Chief Financial Officer, Eagle rp, Inc. and Eé Mr. Langmead, Executive Vice President and Chief Financial Officer of the Company since January 2007, and Executive Vice President and Chief Financial Officer of the Bank since January 2005, previously served
Slide 53: Historical Balance Sheet
Historical Balance Sheet 52
Slide 54: Historical Quarterly Balance Sheet
Historical Quarterly Balance Sheet ano, ({) Please refer to the GAAP reconciliation and footnotes in the appendices on pages 56-57 33
Slide 55: Historical Income Statement
| Historical Income Statement (Dollar Values in Thousands, except per share data) 1 Year Growth 2009 2010 2011 2012 2013 __Rate Total Interest Income S 84338 $ 96,658 $ 119,124 $ 141943 $157,204 10.8% Total Interest Expense 24,800 19.832 20,077 Ladi 12304 _ 03.3%) [Net Interest Income 59,529 76,826
Slide 56: Historical Quarterly Income Statement
| Historical Quarterly Income Statement (otras Dousndy,excappr share dts) “Total ater ncome “otal nterat Expose [Neate lacome Lae Los Provision Service Chanson Deposits Gai.oss 0 Se of Lams ‘GatvLos oa Sl of Secures ‘Other Noninst acme “Total Noir Income Salis nd pee Bens Promises nd Equipment Bpens
Slide 57: GAAP Reconciliation
GAAP Reconciliation GAAP Reconciliation (Unaudited) (dollars in thousands except per share data) Commn shareholders’ equity Less: Intangible assets, Tangible common equity Book value per common share Less: Intangible book value per common share Tangible book value per common share Totalassets Less:
Slide 58: GAAP Reconciliation Footnotes
GAAP Reconciliation Footnotes (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
Slide 59: Notice to Virginia Heritage Shareholders
| Notice to Virginia Heritage Shareholders Notice to Virginia Heritage Shareholders ea ica solicitation of any vote or approval: In ‘Connection with the proposed acquisition of Virginia Heritage by the pany, the Company filed a registration statement on Form 5-4 (the Registration Statement") with th
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