Eagle Bancorp, Inc. · NASDAQ:EGBN
Eagle Bancorp — Investor Presentation (February 2012)
51 slides from Eagle Bancorp's investor presentation, February 2012
Slide 1: February 2012
February 2012 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 rapidly growing community bank headquartered in Bethesda, Maryland Focused on the Washington, DC metropolitan area, with 15 branches Commercially oriented business model with deep relationships of loans, core deposits and related products 2nd largest bank he
Slide 4: Attributes of EagleBank
Attributes of EagleBank Driven by Profitability - 12 Consecutive Quarters of Increasing Earnings Superior Net Interest Margin - 4.16% vs. Peer Average of 3.71% Strong Organic Growth Geographic Market Positioning Experienced and Dedicated Board and Management Team - 17% Insider Ownership Exceptional
Slide 5: Summary Statistics – December 31, 2011
Summary Statistics – December 31, 2011 Total Assets: $2.8 billion Total Loans: $2.1 billion Total Deposits: $2.4 billion Tangible Common Equity: $206.0 million (1) Tangible Book Value per Common Share: $10.32 (1) Shares Outstanding: 19,952,844 SBLF Preferred: $56.6 million Headquarters: Bethesda, Ma
Slide 6: History of Growth
History of Growth Founding members had extensive banking experience Commenced operations with three Maryland branches - July, 1998 Raised $46.5 million in initial and secondary subscription offerings - 1997* and 2003* Reached $500 million in assets in 2004 Private placement of $12.1 million of subor
Slide 7: EagleBank Locations
EagleBank Locations I-270 I-95 Loudoun County Montgomery County Reston * I-495 Bethesda * Prince George’s Tyson's Corner Washington, DC County Fairfax County US 50 Branch Locations I-66 Maryland Washington, DC 7 5 Merrifield Arlington * Virginia 3 15 I-495 In-Process 2 Alexandria Total 17 I-495 * Re
Slide 8: Nationally Recognized Financial Performance
Nationally Recognized Financial Performance 2012 “Top Investment Idea” Recommendation 2011 “Sm-All Stars” Designation Honor Roll of Community Banks 2010 Ranked 62nd among Best Performing Community Banks in the U.S. 2010 Top 150 banks in the Country for C&I Loan Activity and Efficiency Ratio in 2011
Slide 9: Highly Regarded by Bank Rating Agencies
Highly Regarded by Bank Rating Agencies FIRM RATING CATEGORY LEVEL 251/300 SUPERIOR Green - *** BEST BAUERFINANCIAL, INC BEST 8
Slide 10: Financial Indicators – Regional & National Peer Analysis
Financial Indicators – Regional & National Peer Analysis Regional EGBN EGBN Peers (1) Key Ratios (at or for the quarter ended) 12/31/2010 12/31/2011 12/31/2011 ■ Net Interest Margin (2) 4.18% 4.16% 3.71% ■ Efficiency Ratio 53.98% 56.97%* 66.13% ■ NPAs + 90 Days Past Due/Total Assets (2) 1.53% 1.27%
Slide 11: Financial Indicators – Local Peer Analysis
Financial Indicators – Local Peer Analysis EGBN Peers Loan Growth (December 31, 2010 - December 31, 2011) ■ Commercial & Industrial 15.4% 14.1% ■ Commercial Real Estate 19.3% 9.2% ■ Construction & Development 41.0% (5.2%) ■ Total Loans 22.7% 7.2% Deposit Growth (December 31, 2010 - December 31, 2011
Slide 12: Consistent Balance Sheet Growth
Consistent Balance Sheet Growth $3,000 Total Assets $2,750 $2,500 $2,250 $2,000 Millions of Dollars $1,750 $1,500 $1,250 $1,000 $750 $500 $250 $0 06Q4 07Q1 07Q2 07Q3 07Q4 08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q3 09Q4 10Q1 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4 (3) (2) (1) Regional peers includes publicly-trad
Slide 13: Consistent Net Income Growth
Consistent Net Income Growth Net Income Available to Common TARP Dividend SBLF Dividend $7,500 $7,174 $7,000 $6,500 $6,000 $5,500 Thousands of Dollars $5,000 $4,500 $4,000 $3,500 $3,000 $2,500 Peer CAGR: 0.2%¹ $2,000 $1,500 $1,000 06Q4 07Q1 07Q2 07Q3 07Q4 08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q3 09Q4 10Q1
Slide 14: Pre-Tax, Pre-Provision Income
Pre-Tax, Pre-Provision Income $13,828 $14,000 Quarterly Pre-Tax Pre-Provision Net Revenue $13,000 $12,000 $11,000 $10,000 $9,000 Millions of Dollars $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 06Q4 07Q1 07Q2 07Q3 07Q4 08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q3 09Q4 10Q1 10Q2 10Q3 10Q4 11Q1 11
Slide 15: Deposit Market Share
Deposit Market Share WASHINGTON, DC METROPOLITAN AREA (Dollar Values in Thousands) Local Headquarters Branches June 30,2010 June 30,2011 Annual 2011 Rank Rank Company Name City State in List Balance Balance Growth Market Share 1 Capital One McLean VA 209 $ 26,627,589 $ 22,912,447 -14.0% 16.30% 2 Wel
Slide 16: Geographic Detail of Loan Portfolio
Geographic Detail of Loan Portfolio (Dollar Values in Thousands) Owner Investment Residential Other County C&I Occupied CRE CRE Construction Land Mortgage Home Equity Consumer TOTAL % of Total Maryland Montgomery $ 182,981 $ 67,465 $ 166,663 $ 43,235 $ 13,610 $ 9,036 $ 63,478 $ 2,964 $ 549,432 26.7%
Slide 17: Diversified Commercial Real Estate Portfolio
Diversified Commercial Real Estate Portfolio Construction Loans by Type Investment CRE by Type UCC-1 Blanket Lien Unsecured Amusement/Entertainment Apt to Condo Conversion Assignment of RE Sec. Note UCC-1 Blanket Lien Unsecured Amusement/Entertainment Apt to Condo Conversion Assignment of RE Sec. No
Slide 18: Credit Quality Trends
Credit Quality Trends (Dollars Values in Thousands) As of As of As of As of As of As of As of As of Mar 2010 Jun 2010 Sep 2010 Dec 2010 Mar 2011 Jun 2011 Sep 2011 Dec 2011 30-89 Days Past Due $ 29,336 $ 31,259 $ 28,125 $ 31,495 $ 25,744 $ 25,727 $ 32,398 $ 28,131 Nonperforming Assets: 90 or More Day
Slide 19: Consistent Asset Quality
Consistent Asset Quality Total Loans $2,000,000,000 20.00% $1,500,000,000 Loan Average 15.00% Growth NPAs Charge-Offs (000's) 2008 $ 548,963 1.76% 0.12% $1,000,000,000 10.00% 2009 $ 133,671 1.50% 0.42% 2010 $ 276,189 1.53% 0.35% $500,000,000 5.00% 2011 $ 380,756 1.27% 0.32% $0 0.00% Total Loans ($)
Slide 20: Deposit Composition
Deposit Composition (Dollar Values in Thousands) As of December 31, 2010 As of September 31, 2011 (1) As of December 31, 2011 Deposit Type % of % of % of Balance Total Balance Total Balance Total Noninterest Bearing $ 400,291 23.2% $ 488,689 23.0% $ 688,506 28.8% Interest Bearing Transaction 61,771
Slide 21: Superior Relationships/Net Interest Margin
Superior Relationships/Net Interest Margin EGBN Peers 5.25% F&T closed August 31, 2008 4.75% Net Interest Margin (%) 4.25% 4.16% (1) 3.75% 3.71% 3.25% 4Q2006 1Q2007 2Q2007 3Q2007 4Q2007 1Q2008 2Q2008 3Q2008 4Q2008 1Q2009 2Q2009 3Q2009 4Q2009 1Q2010 2Q2010 3Q2010 4Q2010 1Q2011 2Q2011 3Q2011 4Q2011 No
Slide 22: Balanced Loan and Deposit Growth
Balanced Loan and Deposit Growth $2,500,000,000 $2,000,000,000 $1,500,000,000 Total Loans $1,000,000,000 Total Deposits $500,000,000 $0 (1) (1) Q3 2011 Deposits exclude the “settlement deposit” 21
Slide 23: Capital Strength
Capital Strength (Dollars Values in Thousands) September 30, December 31, March 31, June 30, September 30, December 31, 2010 2010 2011 2011 2011 2011 Total Assets $ 2,006,146 $ 2,089,370 $ 2,186,268 $ 2,353,716 $ 3,219,746 $ 2,831,255 Total Capital $ 202,301 $ 204,716 $ 210,119 $ 217,027 $ 258,463 $
Slide 24: Market Information – Washington, DC Metropolitan Statistical Area
Market Information –Washington, DC Metropolitan Statistical Area Population 6.2 Million 5th largest market in the U.S. Employment 2.9 Million Average annual job creation is 28,600 Highest in net new job growth in the U.S. over last decade Washington DC Metro area has highest concentration of fastest
Slide 25: Unemployment Rate - Largest US Markets
24 Unemployment Rate- Largest US Markets 8.5% US s ele ng sA Lo i t tro De i am Mi ta lan At December, 2011 g o ica d Ch klan a -O SF e l at t k Se r Yo w Ne t o n us hia Ho elp d ila Ph nix oe Ph s lla Da n Source: BLS, NOT Seasonally Adjusted sto on Bo ingt sh lis 5.8% Wa apo e nn Mi 14 12 10 8 6
Slide 26: Greater Washington Economy
Greater Washington Economy Total Federal Spending = 34.9% of GRP Other Federal International 15.7% 4.3% Hospitality 2.2% Associations 2.0% Federal Procurement Non-Local Business 19.2% 12.0% Other 8.0% Local Business 36.6% Note: Other includes Health/Education, Media 25 Source: George Mason Universit
Slide 27: Average Sales Price Percent Change Washington MSA
Average Sales Price Percent Change Washington MSA All Housing Types Annual Change Annual Change by Month 2008 2009 2010 2011 30 22 20 20 1414 11 9 89 10 6 66 65 7 54 3 4 4 4 2 221313 12 0 0 0 -1 -5 -4 -10 -9 -10-9 -7 -11 -12 -13 -13 -14 -16 -20 -17 -18 -18 -20 -23 -23 -24 -25 -26 -30 Source: MRIS, G
Slide 28: New Condominium Inventory
New Condominium Inventory Washington DC 6000 5000 4000 3000 2000 1000 0 2005 2006 2007 2008 2009 2010 2011 Current Inventory = 667 Units 3 Year Annual Average Sales = 3,065 Units All Inventory-Conversions and New Construction, Source: The Mayhood Co, October, 2011 27
Slide 29: Key Success Factors
Key Success Factors Building and maintaining core relationships Maintenance of strong credit culture o Conservative underwriting criteria and loan policies o Disciplined Committee Approval and Review Process o Limited Individual Authority o Periodic Loan and Portfolio Stress Testing o Asset Based Le
Slide 30: Key Success Factors (continued)
Key Success Factors (continued) 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 Significant Management and Board level reporting Human Resources o Team Building o
Slide 31: Looking Ahead
Looking Ahead Focus on organic growth o Take advantage of dislocation in market o Hire seasoned lenders o Focus on relationships to increase deposit penetration Profitability o Continued focus on Net Interest Margin o Diligent expense control to maintain Efficiency Ratio o Reduce effective tax rate
Slide 32: EGBN Stock Price Performance
EGBN Stock Price Performance Price Change (%) EGBN S&P 500 NASDAQ Bank 30.00 20.00 10.00 0.00 -10.00 -20.00 -30.00 -40.00 Feb-11 Mar-11 May-11 Jun-11 Jul-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Sep-11 Apr-11 Aug-11 Source: SNL Financial 31
Slide 33: Appendices
Appendices 32
Slide 34: Loan Portfolio Trends
Loan Portfolio Trends Annual Growth (Dollar Values in Thousands) As of December 31, 2010 As of September 30, 2011 As of December 31, 2011 Rate Loan Type Balance % of Total Balance % of Total Balance % of Total % Commercial and Industrial $ 421,552 25.2% $ 470,103 23.2% $ 478,886 23.3% 13.6% Commerci
Slide 35: Loan Portfolio Composition
Loan Portfolio Composition Loan Portfolio by Type Loan Portfolio by Location Home Equity Other USA 4.7% Other Consumer Prince William Other VA Land 3.9% 0.2% 1.1% 3.5% 6.2% Loudoun 1.9% Fairfax Montgomery C&I 5.9% 26.7% 23.3% Arlington 2.0% Construction 14.7% Alexandria 2.1% Residential Mortgage 1.9
Slide 36: Loan Portfolio by Risk Rating
Loan Portfolio by Risk Rating (Dollar Values in Thousands) Loan Portfolio as of: 12/31/2010 12/31/2011 8000 - Substandard 2.7% 9000 - Doubtful 0.0% 9999 - Loss 0.0% 1000 - Prime 0.5% Risk Rating Balance % of Loans Balance % of Loans 7000 - Special Mention 1.2% 2000 - Excellent 6.3% 1000 - Prime $ 7,
Slide 37: Geographic Detail of NPA’s
Geographic Detail of NPA’s (Dollar Values in Thousands) Owner Investment Residential Home Other TOTAL TOTAL County C&I Occupied CRE CRE Mortgage Construction Land Equity Consumer NPLs* OREO NPAs Maryland Montgomery $ 2,580 $ - $ 2,525 $ - $ 490 $ 535 $ 238 $ 8 $ 6,376 $ - $ 6,376 Prince George's - 2
Slide 38: Conservative Securities Portfolio
Conservative Securities Portfolio (Dollar Values in Thousands) December 31, 2011 Gross Gross Estimated Amrt. Cost Amortized Unrealized Unrealized Fair % of Total Security Type Cost Gain Losses Value Securities US Treasury Securities $ - $ - $ - $ - 0.00% US Government Agency Securities 102,283 1,547
Slide 39: 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) System conversion successfully completed one week after close Targeted expense savings achieved in methodical and though
Slide 40: Experienced Senior Management Team
Experienced Senior Management Team Years Years in with Name Title/Function Banking EGBN Ronald D. Paul Chairman, President & CEO 24 14 Robert P. Pincus Vice Chairman 39 4 Michael T. Flynn EVP & COO - Eagle Bancorp 41 8 Susan G. Riel Sr. EVP & COO - EagleBank 36 14 Thomas D. Murphy President - Commun
Slide 41: 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 of
Slide 42: 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 Vic
Slide 43: 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 Wa
Slide 44: Experienced Management Team
Experienced Management Team James H. Langmead, EVP, Chief Financial Officer, Eagle Bancorp, Inc. and EagleBank 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
Slide 45: Historical Balance Sheet
Historical Balance Sheet 5 Year Compound 1 Year Growth Growth (Dollar Values in Thousands) 2007 2008 2009 2010 2011 Rate Rate Assets Cash and Equivalents $20,142 $29,837 $117,687 $58,114 $232,411 47.0% 299.9% Securities Available for Sale 87,117 169,079 245,644 237,576 324,053 28.9% 36.4% Total Cash
Slide 46: Historical Quarterly Balance Sheet
Historical Quarterly Balance Sheet Growth Growth Rate Rate 4Q2011 vs 4Q2011 vs (Dollar Values in Thousands) Jun 2010 S ep 2010 Dec 2010 Mar 2011 Jun 2011 S ep 2011 Dec 2011 4Q2010 3Q2011 Assets Cash and Equivalents $121,718 $99,412 $58,114 $107,165 $87,234 $746,850 $232,411 299.9% (68.9%) Securities
Slide 47: Historical Income Statement
Historical Income Statement (Dollar Values in Thousands, except per share data) 1 Year Growth 2007 2008 2009 2010 2011 Rate Total Interest Income $ 57,077 $ 65,657 $ 84,338 $ 96,658 $ 119,124 23.2% Total Interest Expense 23,729 23,676 24,809 19,832 20,077 1.2% Net Interest Income 33,348 41,981 59,52
Slide 48: Historical Quarterly Income Statement
Historical Quarterly Income Statement (Dollar Values in Thousands, except per share data) Growth Growth Rate Rate 4Q2011 vs 4Q2011 vs Jun 2010 S ep 2010 Dec 2010 Mar 2011 Jun 2011 S ep 2011 Dec 2011 4Q2010 3Q2011 Total Interest Income $ 23,689 $ 24,421 $ 26,040 $ 26,296 $ 28,996 $ 30,741 $ 33,091 27
Slide 49: GAAP Reconciliation
GAAP Reconciliation GAAP Reconciliation (dollars in thousands except per share data) Twelve Months Ended December 31, 2011 2010 (Unaudited) (Unaudited) Common shareholders' equity $ 210,111 $ 182,134 Less : Intangible as sets (4,145) (4,188) Tangible common equity $ 205,966 $ 177,946 Book value per
Slide 50: GAAP Reconciliation
GAAP Reconciliation GAAP Reconciliation (dollars in thousands except per share data) Three Months Ended December 31, 2011 2010 Average Average Average Average Balance Interest Yield/Rate Balance Interest Yield/Rate Total interest earning assets $ 3,071,903 $ 33,091 4.27% $ 2,021,492 $ 26,040 5.11% L
Slide 51: GAAP Reconciliation Footnotes
GAAP Reconciliation Footnotes (1) The reported figure includes the effect of a $618 million deposit received on September 13, 2011 in connection with a class action settlement, which was disbursed by year end. The deposit was invested in excess reserves at the Federal Reserve. As the magnitude of th
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