Slide 1: 1st Quarter 2024 Earnings Presentation
1st Quarter 2024 Earnings Presentation Scan for digital version April 24, 2024 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: Attractive Washington DC Footprint
Attractive Washington DC Footprint One-of-a-kind Market The Washington DC area represents a strong and stable economy bolstered by Federal government spending and related jobs insulating the region from the severity of potential economic downturns. Our market includes world-class centers of educatio
Slide 4: Eagle at a Glance
Eagle at a Glance Tangible Total Assets Total Loans Total Deposits Common Equity $ 11.6 8.0 8.5 1.2 $ $ $ billion billion billion billion 1 Shares Outstanding Market Capitalization Tangible Book Value (at close March 31, 2024) (at close April 23, 2024) per Common Share 2 1 30,185,732 $672 million $
Slide 5: Eagle is an attractive investment opportunity
Eagle is an attractive investment opportunity • Best-in-Class Regulatory Capital Levels o As of 12/31/2023, our CET1 ratio was in the top quartile of all bank holding companies with $10 billion in assets or more; our CET1 ratio as of 3/31/2024 was 13.80%. • Strong pre-provision, net revenue (“PPNR”)
Slide 6: Eagle – Capital Levels vs. Peers
Eagle – Capital Levels vs. Peers Strong Capital • Capital ratios are high relative to peers1 • Excess CET1 (over 9%) plus reserves provides a superior level of coverage when measured against our peers 1-Peers are those used in the proxy for the May 2024 annual meeting. Proxy Peers are AUB, BHLB, BRK
Slide 7: Eagle – Liquidity Position vs. Peers
Eagle – Liquidity Position vs. Peers Available Liquidity Cash and cash equivalents are high relative to peers. Cash equivalents combined with AFS securities provides a superior level of coverage when measured against our peers. Peers are those used in the proxy for the May 2024 annual meeting. Proxy
Slide 8: Performance Measures
Performance Measures 1-Please refer to the Non-GAAP reconciliation and footnotes in the appendices. PPNR/Average Assets and returns are annualized. See Non-GAAP reconciliation for calculation of annualized PPNR. For the periods above, return on average common equity was 7.92% (2023Q1), 9.24% (2023Q2
Slide 9: Net Interest Income
Net Interest Income NII Grows and NIM Remains Stable Net Interest Income • Interest income expanded $8.2 million quarter over quarter despite one fewer day due in large part to higher average earning assets as more cash was maintained throughout the quarter • Interest expense also increased $6.5 mil
Slide 10: Net Income – 1st Quarter Summary
Net Income – 1st Quarter Summary Net Income Drivers Net interest income Net interest income up $1.7 million, driven by higher balances and yields on both loans and cash balances Provision for Credit Losses (“PCL”) The provision on credit was higher primarily driven by an updated valuation for a CRE
Slide 11: 2024 Outlook
2024 Outlook 1Q 2024 Key Drivers Prior 2024 Outlook Current 2024 Outlook Actual Balance Sheet Average deposits $9,502 million Low single digit % increase Low single digit % increase Average loans $7,989 million Low single digit % increase Low single digit % increase Average earning assets $12,365 mi
Slide 12: 2024 Outlook Variables & Risks
2024 Outlook Variables & Risks To reach our 2024 outlook, we made many assumptions of variables and risks, including: Component Variables & Risks Economy & Rates • Business activity highly correlated to current and anticipated forward rates Clients • Credit quality and need for credit coupled with a
Slide 13: Strategies Driving Growth and PPNR
Strategies Driving Growth and PPNR Improving Pre-Provision Net Revenue (“PPNR”) • Enhance revenue opportunities through C&I and small business to improve fee income and deposits • Continue to focus on growing core deposits • Maintain pricing discipline on loan originations to promote revenue growth
Slide 14: Key Strategic Objectives
Key Strategic Objectives • Enhance Deposit Franchise o Focus on deposit growth through improved sales behaviors; focusing on net new relationship metrics; enhancing products set and services to better serve our customers. o Enhance our treasury management program by continued collaboration between T
Slide 15: Deposit Mix and Trend
Deposit Mix and Trend Total Deposits increased $1.03B Year-over-Year CDs Savings & money market Interest bearing transaction Noninterest bearing Cumulative Betas1 • Interest bearing deposits - 75% • Cost of funds – 63% 1 - For betas, the denominator is the change in the Average Effective Federal Fun
Slide 16: Funding & Liquidity
Funding & Liquidity Funding & Liquidity Summary Deposits Period end deposits were down $307 million for the quarter, primarily driven by an expected seasonality of tax payments. For the quarter, average deposits were up $30 million. The long-term strategy for deposits is to increase core deposits an
Slide 17: CRE Office Detail
CRE Office Detail As of March 31, 2024 As a % of CRE Office In Central Balance Avg. Size Business 1 Class Type (in millions) (in millions) Criticized District of DC Owner Occupied Office $145.1 $1.5 0% Income Producing Office 898.7 10.8 24% Total CRE Office $1,043.8 $5.8 24% Income Producing Office
Slide 18: CRE Office Detail (continued)
CRE Office Detail (continued) % of Non CRE Office Commentary Owner • Improving ACL coverage of office with Maturity Balance Occupied Cumulative Weighted Weighted Outstanding reserve build to 3.67% of performing CRE Year (in millions) Office % LTV DSCR1 Balance PSF Office vs. 1.91% the prior quarter
Slide 19: Loan Mix and Trend
Loan Mix and Trend Home Equity Other Consumer Construction C&I (owner-occupied) Construction – comm& residential. Owner-Occupied CRE Commercial Income producing CRE (excluding office if applicable) Office 19
Slide 20: Loan Type and Classification
Loan Type and Classification Loans by Type - 3/31/2024 Income Producing CRE by Type - 3/31/2024 $ in millions Balance % of $ in millions Balance % of Loans Income-producing - CRE $3,142 39% Office & Office Condo $899 11% Income-producing - CRE (Office) 899 11% Multifamily 804 10% Total income produc
Slide 21: Asset Quality Metrics
Asset Quality Metrics 1-Excludes loans held for sale. 2-Non-performing assets (“NPAs”) include loans 90 days past due and still accruing. Charts for Allowance for Credit Losses and NPAs are as of period end. Net Charge Offs (“NCO”) are annualized for periods of less than a year. 21
Slide 22: Appendices
Appendices ” @EAGLE BANCORB INC. 22
Slide 23: Investment Portfolio
Investment Portfolio Investment Portfolio Strategy • Portfolio positioned to manage liquidity and pledging needs • Cash flow projected principal only (rates unchanged): o Remainder of 2024 - $270 million o 2025 - $381 million • Total securities down $69 million from 12/31/2023 from principal paydown
Slide 24: Tangible Book Value Per Share
Tangible Book Value Per Share Per share data is as of period end. Please refer to Non-GAAP reconciliation and footnotes in the appendices. The CAGR for Book Value Per Share with AOCI included was 2.1% and excluded was 6.4% for the period from December 31, 2020, through March 31, 2024. Book values pe
Slide 25: Loan Portfolio – Details
Loan Portfolio – Details $ in millions Owner Income Owner Occupied Producing Occupied CRE Residential % of Location C&I CRE CRE Const. Construction Land Mortgage Consumer TOTAL Total Washington DC $496.0 $297.9 $1,307.1 $74.4 $250.5 $62.0 $34.0 $13.2 $2,535.1 31.8% Suburban Washington Montgomery 160
Slide 26: Loan Portfolio – Income Producing CRE
Loan Portfolio – Income Producing CRE $ in millions Single/1-4 Family & % of Total Location Hotel/ Motel Industrial Mixed Use Multifamily Office Retail Res. Condo Other TOTAL Loans Washington DC $138.3 $5.8 $265.4 $384.5 $211.1 $82.3 $73.7 $146.0 $1,307.1 16.4% Suburban Washington Montgomery - 24.2
Slide 27: Loan Portfolio – CRE Construction
Loan Portfolio – CRE Construction $ in millions % of Single & 1-4 Residential Total Location Family Multifamily Office Hotel/Motel Mixed Use Retail Condo Other TOTAL Loans Washington DC $14.5 $167.1 $0.0 $0.0 $29.0 $0.0 $10.9 $29.0 $250.5 3.1% Suburban Washington Montgomery 9.5 145.6 - - - - - 19.4
Slide 28: Non-GAAP Reconciliation (unaudited)
Non-GAAP Reconciliation (unaudited) $ in thousands, except per share data As of Period End As of Period End 2020Y 2021Y 2022Y 2023 Q1 2023 Q2 2023 Q3 2023 Q4 2024 Q1 Tangible common equity Common shareholders' equity $1,240,892 $1,350,775 $1,228,321 $1,241,958 $1,219,766 $1,215,884 $1,274,283 $1,259
Slide 29: Non-GAAP Reconciliation (unaudited)
Non-GAAP Reconciliation (unaudited) $ in thousands For the Quarter 2023 Q1 2023 Q2 2023 Q3 2023 Q4 2024 Q1 Efficiency Ratio Net interest income $75,024 $71,811 $70,719 $72,992 $74,698 Noninterest income 3,700 8,595 6,347 2,894 3,589 Revenue $78,724 $80,406 $77,066 $75,886 $78,287 Noninterest expense
Slide 30: Non-GAAP Reconciliation (unaudited)
Non-GAAP Reconciliation (unaudited) Tangible common equity to tangible assets (the "tangible common equity ratio"), tangible book value per common share, tangible book value per common share excluding accumulated other comprehensive income (“AOCI”), and the return on average tangible common equity a