Eagle Bancorp, Inc. · NASDAQ:EGBN
Eagle Bancorp — Sterne Agee Financial Institutions Investor Conference 2015
56 slides from Eagle Bancorp's conference presentation, Feb 12, 2015
Slide 1: Sterne Agee Financial Institutions Investor Conference
* @EAGLE BANCORP INC. Sterne Agee Financial Institutions Investor Conference February 11-13, 2015 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 22 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 — 4.42% for Q4 2014 Strong Asset Quality — NPA’s 0.68% at 12/31/14 Net Charge Offs to Average Loans(annualized) — 0.17% for 2014 Driven by Long-Term, Deep Customer Relationships Demonstrate
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 28 7 Robert P. Pincus ‘Vice Chairman a 7 Susan G. Riel Sr. EVP & COO - EagkBank 39 7 James H. Langmead EVP & Chief Financial Officer - Eagle Bancorp & Eagl'Bank 44 10
Slide 6: Summary Statistics — December 31, 2014
| Summary Statistics — December 31, 2014 ‘Total Assets: $5.2 bil ‘Total Loans: $4.3 billion ‘Total Deposits: $4.3 billion ‘Tangible Common Equi $439.0 million (1) ‘Tangible Book Value per Common Shai $14.56 (1) Shares Outstanding: 30,139,396 SBLF Preferred: (1% Dividend Rate, until January, 2016) $7
Slide 7: EGBN - Financial Indicators — Regional Peer Analysis
EGBN - Financial Indicators — Regional Peer Analysis Regional EGBN Peers (1) y Ratios (at oF for the quart December 31 4Q2012 492013 4Q20142) __4Q2014 = Net Interest Margin 431% 4.40% = 4.42% 3.46% = Efficiency Ratio 49.82% 50.03% 48.71% 66.64% = Non-Interest Income/Total Revenue 14.85% 10.01% 9.30%
Slide 8: Financial Indicators — Local Peer Analysis
Financial Indicators — Local Peer Analysis EGBN Peers Loan Growth (December 31, 2013 - December 31, 2014) «= Commercial & Industrial 32.0% 24.9% = Commercial Real Estate 50.6% 32.3% = Construction & Development 39.9% 56.8% = Total Loans 46.4% 35.4% Deposit Growth (December 31, 2013 - December 31, 20
Slide 9: EagleBank Locations
EagleBank Locations Loudoun County faictax Canty “Ay zs : Branch Totals as of 12/31/14, Ballston Branch expected to close in 2015
Slide 10: Enhanced Deposit Market Share in Region
| Enhanced Deposit Market Share in Region Local 30-Jun-13 30-Jun-14 ‘Annual 2014 Rank — Rank Company Name Branches Balance Balance Growth Market Share 1 Wells Fargo & Co 165 $ 23760,182 $ 25191,935 599% 15.45% 2 Bank of America 165 21404120 24.478,686 14.36% 15.01% 3 Capital One 186 22128708 22,338,
Slide 11: Washington Metropolitan Area Primary Sub-Markets
| Washington Metropolitan Area Primary Sub-Markets Population Total Number of (Actual) Employment ses Anne Arundel, Maryland 548,625 259,394 20,430 Prince George's, Maryland 871,533 379,628 28,057 Howard, Maryland 297,571 156,997 11,530] Frederick, Maryland 238,502 114,734 9,478| Charles, Maryland 1
Slide 12: Consistent Balance Sheet Growth
Millions of Dollars Consist $5,500 9 $5,0004 43004 4000 4 3,500 4 $3,000 4 82,5004 til ent Balance Sheet Growth Total Assets (Peer CAGR: 3.7%] (Peer CAGR: 3.7%] 09Q4 1OQl 10Q2 10Q3 10Q4 HIQL HQ 11Q3 11QI 12Q1 1292 1293 12QH_ 13QI BQ 13Q3 13Q MQ MQ MB 14QI i) (0) Rezional pers includes pul traded com
Slide 13: Consistently Improving Efficiency Ratio
Consistently Improving Efficiency Ratio 65% 60%: 50% 45.7% 40%: (0994101 109210931094 11Q111Q211Q311Q412Q112Q212Q312Q413Q1 1321393 1394 14Q114Q214Q3 1494 (4) Data for Q2, Q3, Qt 2014 onan operating basis, net of merge elated expenses.
Slide 14: Consistent Increases in Operating Leverage
Consistent Increases in Operating Leverage $50,000 yh Zz 20000 CE $30,000 a CAGR 49.7% $20,000 | $10,000 30 LE ELE PELL EO LE PERE E PRE —#—Revenue ($000s) —s-=Non-Int Expense ($000s) (Data for Q2,Q8, Q4 2014 onan operating basis, net of merge elated expenses Bb
Slide 15: Consistent Net Income Growth
Consistent Net Income Growth Net Income Available to Common Ml TARP Dividend O SBLF Dividend esta s14727 314,000 813,000 312,000 11,000 10,000 39,000 38,000 $7,000 ‘Thousands of Dollars $6,000 35.000 84.000 83.000 82.000 $1,000 so QE 10QL 10Q2_10G3 10QH QL QZ 11s 11QF 12Q1 12@2_ 1203 Qt 13Q113Q2_ 3G
Slide 16: Geographic Detail of Loan Portfolio
Geographic Detail of Loan Portfolio Maryland Prince Geonge's 843 38688 441173570 29345 S 8411386 2,207 8592 321,003 7.4% Other MD 52.814 32,719 44d 326,174 64785 31,849 14569 6.902 11,384 545,580 12.7% 36,969 43,061 20893 21,020 : 260 4101 139,609 Prince Wiliam. 12,552 16,926 06 = 4822-3443 5,096 28
Slide 17: Geographic Detail of CRE — Construction
| Geographic Detail of CRE — Construction Maryland Prince George's 1,648 27,531 3615 999 Other VA 2,994 11,472 935 1,402 442 - - 15,835 33,080 5.1% Other USA $ GIN S - $ 358 = $ 959 $ 483 $ = S = $ 7898 12% Total $ 204,143 $ 116,100 $ 87,507 $ 62,216 $ 50,552 $ 43,690 $ 40,036 $ 50,769 $ 655,013 100
Slide 18: Geographic Detail of CRE- Income Producing
Geographic Detail of CRE- Income Producing Maryland Prince George's 41,362 27,697 15,795 10,539 9,853 19,221 27,306 21,797 121,719 47,549 (24,988 18,846 19,124 35,590 Prinee William Other VA 148 6,248 2,226 Other USA $ 17169 $ 13,423 $ - $ 9038 $ 303 $ 8407 $ 2,279 Total $ 414,552 $ 299,268 $229,438
Slide 19: EGBN — CRE Risk Management
EGBN — CRE Risk Management Executive & Board Level Oversight of Approval Process Disciplined Underwriting Robust Portfolio Management Stress Testing of Portfolio Quarterly Independent Credit Review Dedicated Special Assets Team
Slide 20: EGBN - Credit Quality Trends
EGBN - Credit Quality Trends (Dollars Values in Thousands) 30-89 Days Past Due Nonperforming Assets: 90 or More Days Past Due ‘Nonacerual ‘otal Nonperforming Loans (NPLs) Other Real Estate Owned (OREO) ‘Total Nonperforming Assets Performing Restructured Loans (IDRs) NPAs/Assets NPAs+TDRs/Assets Rese
Slide 21: EGBN- Consistent Asset Quality
| EGBN- Consistent Asset Quality Total Loans ($000s) (Dollar Values in Thousands) ss0 20 sagen a8 $50 2009 $133,671 1.50% 0.42% sad 2010 $276,189 1.53% 0.35% 50 a 2011 1.27% sis ig 2012 037% si bil 2013 090% 023% sso HE HHH oi us 2014 68% 017% ee Mae he Sp Dace Mes he Sp ee Mae er Sep Dee Mes hor Se
Slide 22: Balanced Loan and Deposit Growth
Balanced Loan and Deposit Growth $4,500,000,000 $4,000,000,000 $3,500,000,000 + $3,000,000,000 $2,500,000,000 $2,000,000,000 $1,500,000,000 $1,000,000,000 $500,000,000 so + = Total Loans Total Deposits 21
Slide 23: Deposit Composition
Deposit Composition (Betta Vales in Thess) Deposit Type %of %of %of Balance Total Balance Total Balance Total % Noninterest Beating, 5 849,408 26.3% $1,056,559 29.9% $1,175,799 27.3% 38.4% Interest Bearing Transaction 118,580 3.7% 161,886 143,628 3.3% 21.1% Core Savings & Money Market (1) 1,583,751
Slide 24: Superior Relationships/Net Interest Margin
Superior Relationships/Net Interest Margin 5.25% 475 g 3 4424 % 425% ao i z 3.75% 3.468
Slide 25: Conservative Securities Portfolio
| Conservative Securities Portfolio (Dato hte sends) Us Goverment Ageney Secuttes aan 40 19% Mortgage backed Secnites = SEs ano ute 2sie ase Munkipal Bonds i693 4ss0 Bry Other Equity Investments 396 2 0% “Total Secuses =a Sige a Tore Us Goverment Agency Secusties 2306 sis 9001 102% Morteage Backed S
Slide 26: Capital Strength
Capital Strength (Dollars Values 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 Equity Tier 1 (CETD Ratio ‘Tangible Common Equity Ratio @) s s 3,504,928 S 3,771,503 S
Slide 27: 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 28: 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 29: EagleBank Growth Strategy
EagleBank Growth Strategy = Integrate Virginia Heritage Bank Acquisition Profitability * Pricing discipline to sustain Net Interest Margin * Diligent expense control to maintain Efficiency Ratio = Maintain Credit Quality Emphasis on Organic Growth * Only 2.56% deposit market share in DC Metro Area a
Slide 30: EGBN Stock Price Performance
| EGBWN Stock Price Performance Total Return Performance 480 + Engle Boner In a NASDAG Sock Market Index(U.S. Companies) 4 4 NASDAG Bank Index a + s8P500 3 2 H 200 2 160 - 100 50 1213109 128110 varstint 12312 wens reine Stock Price Performance 1 Year 3 Year 5 Year EGBN 16.0% 168.7% 273.1% NASDAQ Sto
Slide 31: EGBN Relative Valuation
| EGBN Relative Valuation Trailing P/E Ratio 50 40 EGBN — SNLNat'l Avg KBW Regional SNLMid-Atl_ NASDAQ Russell 3000 S&P 500, Bank Avg, Avg, Source: SNL Chart and calculations as of close January 30, 2015.
Slide 32: Nationally Recognized Financial Performance
Nationally Recognized Financial Performance SANDLER O'NEILL + PARTNERS " -/0p Investment Idea” Recommendation 2012 = “Sm-All Stars” Designation 2011, 2013 & 2014 = Designated as a “Grower” Bank 2012 = Honor Roll of Community Banks 2010-2013 = Ranked among Top 50 Best Performing Community Banks in th
Slide 33: Highly Regarded by Bank Rating Firms
| Highly Regarded by Bank Rating Firms FIRM Analyze the Future BAUERFINANCIAL, INC VERIBANC BANK RATING BBB+ 283/300 Jolototok: Green - *** 32
Slide 34: Market Information — Washington, DC MSA
Market Information —Washington, DC MSA = Population a Sth largest market in the U.S. = Employment a 18,900 new jobs created in last year a Average annual job creation is 28,800 over last decade 6.2 Million 3.1 Million a Unemployment rate of 4.5% vs. US average of 5.8% (Nov. 2014) = Gross Regional Pr
Slide 35: Unemployment Rate - Largest US Markets
Unemployment Rate - Largest US Markets November, 2014 ReRononrnanero 34 Source: BLS, Not Seasonally Adjusted
Slide 36: 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 % 30 2p2 20 5 10 + | o03,75,8% a fiiiil — 354 3 343 4 4 o Wille: Wlillteat in ATL FRAIL TTTII Tt Reese q 4 4g -10 ; -20 16 0 SESESSESSES FEPSES SEPSES SS PSES
Slide 37: Greater Washington Economy
Greater Washington Economy [Git Contin Subarket J Other Federat International 13.7% 49% Hospitality Federat Procurement Assodations 163% ‘Suburban Maryland 28.0% Non Local Business other 89% Northern Virgil Local Business Gross Regional Product $449 Billion Note: Other includes Health Care/Education
Slide 38: Appendices
Appendices 37
Slide 39: Loan Portfolio Trends
Loan Portfolio Trends (Deas tas te Thesands) Loan Type Balance _% of Total Balance _% of Total Balance _% of Total % Commercial and Industrial $694,350 23.6% $798,489 23.3% = $ 916,226 21.2% 32.0% (Owner Occupied 317,491 10.8%, 337,422 9.8% 461,581 10.7% 45.4% (Owner Occupied-Comst 34,659 1.2% 41,84
Slide 40: Loan Portfolio Composition
| Loan Portfolio Composition Total Gross Loans: $4.3 Billion ‘Note: At December 31, 2014 39
Slide 41: Diversified Commercial Real Estate Portfolio
| Diversified Commercial Real Estate Portfolio Total : $655.0 Million Total : $1.7 Billion ‘Note: At December 31, 2014 40
Slide 42: Loan Portfolio by Risk Rating
Loan Portfolio by Risk Rating Dollar Values in Thousands) aa 1000 - Prime s 14,803 2000 - Exwellent 270,980, 3000 - Good 1557055 4000 - Acceptable 1694386 5000 - Acceptable with Risk 665,523 6000- Watch 6038 7000 - Special Mention 18306 8000 - Substandard 45308 9000 Doubrfil . 9999 - Loss = Periodic
Slide 43: Geographic Detail of NPA's
Geographic Detail of NPA’s (Dollar Values in Thousands) Maryland Montgomery ««$«2H$ SF s DS OS - S - S$ 1HS 19 $199 S$ - $1999 Prince Geons’'s : 92 = 480 : - Bee Ss 808 486 1294 Oller MD 606 rs § = B 98 704 : 704 WashingionDC 3,202 2 : hoos 3088 - ns 7802 550613308 Virginia Ayana B 2 E 5 : : 8 2 B F
Slide 44: Moderate Interest Rate Risk Position
| Moderate Interest Rate Risk Position ‘Source: FTN Quarterly IRR Report 8
Slide 45: Acquisition Strategy & History
Acquisition Strategy & History = Significant Due Diligence precedes any Offer to Acquire = Accretive Transactions are always the Goal = Acquisition # 1 - Fidelity & Trust Bank, completed August 31, 2008 = Potential Acquisition of Alliance Bankshares announced July, 2011. Discontinued November, 2011.
Slide 46: 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 Execut
Slide 47: 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 previou
Slide 48: Experienced Management Team
Experienced Management Team Charles C. Brockett, EVP & Director of Operations Mr. Brockett joined EagleBank in October of 2014 though our merger with Virginia Heritage Bank where he had served as Chief Financial Officer since 2005 and Chief Operating Officer since 2010 and was also a Director. Prior
Slide 49: Experienced Management Team
Experienced Management Team Steve Reeder, EVP, Chief Deposit Officer Mr. Reeder, Executive Vice President and Chief Deposit Officer, joined EagleBank in February 2014. Previously, he held a similar leadership position at Virginia Commerce Bank for over eight years. Prior to that, Mr. Reeder was a Se
Slide 50: Historical Balance Sheet
Historical Balance Sheet B] spss 3533 49
Slide 51: Historical Quarterly Balance Sheet
Historical Quarterly Balance Sheet
Slide 52: Historical Income Statement
| Historical Income Statement (Dollar Values in Thousands, except per share data) Total Interest Income Total Interest Expense Net Interest Income Loan Loss Provision Service Charges on Deposits GGain/Loas on Sale of Loans Gain/Loas on Sale of Securitios BOLI Revere (Other Noninterest Income ‘Total
Slide 53: Historical Quarterly Income Statement
| Historical Quarterly Income Statement 2 Towonds, xippr Bae data) Growth Growth some 4Q20I Mar2013__Jon2013__Sep2013__Dec2015__Mar2014__Jun2014__Sep20i4__Dectd__4Q0015__ 302014 “Toa intr tee S39 $ 3798S SGM Fangs] Sang SMT STS S SoH TIN Total inteest peace sau 3a aol 298 aw a gas as ass sus ‘Net In
Slide 54: GAAP Reconciliation (Unaudited)
GAAP Reconciliation (Unaudited) (dollars in thousands except per share data) Common 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 Total assets Less: Intangible assets T
Slide 55: GAAP Reconciliation (Unaudited)
GAAP Reconcation (auatod (Gotan thousands cept pershare data) ‘Adbisiments tone income open Mergerelted expense, net of tx Operating exming® arnings per weighted werage common share, ble ‘Aaissrents to earings per weighted average conan share basic ‘operating samtips Peroni verape conan shay, basic
Slide 56: GAAP Reconciliation Footnotes
GAAP Reconciliation Footnotes (1) The reported figure includes the effect of $4.7 million and $3.2 million of merger related expenses ($3.5 million and $2.2 million net of tax) for the twelve and three months ended December 31, 2014. As the magnitude of the merger expenses distorts the operational r
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