EX-99 2 exh_991.htm EXHIBIT 99.1 exh_991.htm
Ticker: EGBN
www.eaglebankcorp.com
 FBR Capital Markets Fall Investor Conference
 
 November 30, 2010
 
 
 
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 and regarding general
economic conditions. In some cases, forward-looking statements can be identified by use of words
such as “may,” “will,” “anticipates,” “believes,” “expects,” “plans,” “estimates,” “potential,”
“continue,” “should,” and similar words or phrases. These statements are based upon current and
anticipated economic conditions, nationally and in the Company’s market, interest rates and
interest rate policy, competitive factors and other conditions which by their nature, are not
susceptible to accurate forecast and are subject to significant uncertainty. For details on factors
that could affect these expectations, see the risk factors and other cautionary language included in
the Company’s Annual Report on Form 10-K and other periodic and current reports filed with the
SEC. Because of these uncertainties and the assumptions on which this discussion and the
forward-looking statements are based, actual future operations and results in the future may differ
materially from those indicated herein. Readers are cautioned against placing undue reliance on
any such forward-looking statements. The Company’s past results are not necessarily indicative of
future performance. The Company does not undertake to publicly revise or update forward-
looking statements in this presentation to reflect events or circumstances that arise after the date
of this presentation, except as may be required under applicable law.
For further information on the Company please contact:     Michael T. Flynn
                                                                                     Executive Vice President
                                                                                     240-497-2040
                                                                                     mflynn@eaglebankcorp.com
 
 
 
2
Company Overview
Eagle Bancorp, Inc. is a rapidly growing commercial bank headquartered in
       Bethesda, Maryland
            o     $2.0 billion in assets, focused on Washington, DC Metro Area with 12 branches
            o     Commercially oriented business model with deep relationships on loan and deposit side
               of balance sheet
            o     2nd largest bank headquartered in Maryland by Assets and Market Capitalization
Positioned as an alternative solution between small community banks and regional /
       money center banks
            o      Growth oriented culture based on sales and service
            o      Provides customers with immediate access to senior management/decision-makers with
                local market knowledge
            o     Largest deposit market share in Washington, DC (proper) of any locally-based bank, and
                   5th largest locally-based bank in the Metro Area
            o     Quickly becoming the leading community bank in the Washington, DC Metro Area
Note: Financial data at September 30, 2010. Deposit market share data as of June 30, 2010.
 
 
 
3
History of Growth
Founding members had extensive banking experience
Raised $16.5 million in initial subscription offering - 1997*
Commenced operations with three Maryland branches - July, 1998
Second subscription offering raised $30 million - 2003*
Reached $500 million in assets in 2004
Private placement of $12.1 million of subordinated debt - August 2008 (Current balance $9.3 million)
Fidelity & Trust Financial Corporation (“F&T”) acquisition completed - August 31, 2008
$1.4 billion of assets upon completion of acquisition
Placed $38.2 million of TARP Preferred Stock - December, 2008 (Current balance $23.2 million)
$55 million common stock offering - September, 2009
Reached $2.0 billion in assets - September, 2010
*1997, 2003 and 2009 subscription offerings were over subscribed
 
 
 
4
Summary Statistics - September 30, 2010
 
 
 
5
 
 
EagleBank Locations
Tyson's Corner
Montgomery County
Prince George’s
County
Alexandria
Arlington
Fairfax County
Loudoun
County
Washington, DC
Resto
n
 
 
 
6
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 37,500
Highest in net new job growth in the U.S. over last decade
Washington DC Metro area has highest concentration of fastest
           growing private companies in U.S. (according to Inc. Magazine)
Gross Regional Product (GRP)                                                      $443 Billion
5th largest regional economy in the U.S.
5.3% CAGR in GRP over last 20 years
Federal Government Spending is 33.3% of GRP
Source: Greater Washington Initiative 2010 Regional Report
 
 
 
Largest US Markets, Job Change Aug ‘09 - Aug ‘10
(000s)
Washington + 20,500
Source: BLS Benchmark, GMU Center for Regional Analysis
7
 
 
 
Unemployment Rate - Largest US Markets
 May 2010
Source: BLS, Not Seasonally Adjusted
6.0
US 9.3 %
8
 
 
 
9
Greater Washington Economy
Note: Other includes Health/Education, Media
Source: George Mason University, Center for Regional Analysis
 
 
 
10
Note: Shaded companies in grey denote those companies headquartered outside of Washington, D.C. Metro Area. Data excludes: E*Trade and UNIFI Mutual Holding Company whose deposits are substantially from
outside of the defined market area.
Source: FDIC, as of June 30, 2010
 
 
 
11
Consistent Balance Sheet Growth
(1) Regional peers includes publicly-traded commercial banks with assets between $1 and $5 billion and headquartered in Washington, DC, Virginia, West Virginia, Maryland, Pennsylvania and
 Delaware who reported total assets at all reporting periods shown above.
Source: SNL Financial
 
 
 
12
Consistent Net Income Growth
Peer CAGR: 0.2%¹
(1) Regional peers includes publicly-traded commercial banks with assets between $1 and $5 billion and headquartered in Washington, DC, Virginia, West Virginia, Maryland, Pennsylvania and
 Delaware who reported net income or loss for all reporting periods shown above.
Source: SNL Financial
 $4,766
 
 
 
13
Financial Indicators - Regional Peer Analysis
Note: Regional peer data is average for publicly-traded commercial banks with Assets between $1 and $5 billion and headquartered in Washington, DC, Virginia, West Virginia, Maryland,
Pennsylvania and Delaware who reported at all reporting periods shown above.
Source: SNL Financial
 
 
 
14
Loan Portfolio Composition
Loan Portfolio by Type
Loan Portfolio by Location
Note: At September 30, 2010
Total Gross Loans: $1.5 Billion
 
 
 
15
Diversified Commercial Real Estate Loans
Construction Loans by Type
Income Producing CRE by Type
 
 
 
Average Sales Price Percent Change Washington MSA
All Housing Types
%
Source: MRIS, GMU Center for Regional Analysis
Annual Change                          Annual Change by Month
                             2007                      2008                      2009                   2010
16
 
 
 
New Condominium Inventory
Washington, DC
Current Inventory = 714 Units
2005
2006
2007
2008
2009
2010
Source: The Mayhood Co, October, 2010
17
 
 
 
18
 
 Asset Quality remains at a very strong level
 An adequate Allowance is being maintained
 
 
 
19
Loan Portfolio Trends
 Focus on reducing construction as a percentage of the overall portfolio
 Continued effort to grow C&I and Owner Occupied loans
 
 
 
 
20
 Commercial focus drives growth of Non-interest Bearing Demand accounts
 Taking business from regional/super-regional banks, but demanding relationship pricing
 Still have tremendous opportunity based on current market share in DC Metro Area
Deposit Composition Trends
 
 
 
21
Superior Relationships = Superior Net Interest Margin
Note: Regional peers includes publicly-traded commercial banks with Assets between $1 and $5 billion and headquartered in Washington, DC, Virginia,
 West Virginia, Maryland, Pennsylvania and Delaware who reported net interest margin for all periods shown above.
Source: SNL Financial
F&T closed August 31, 2008
 
 
 
22
Capital Strength
$12.1 million of Sub-debt raised in August, 2008, $2.9 million repaid in September, 2009
$38.2 million of TARP Preferred Stock placed in December, 2008, $15 million redeemed in
         December, 2009
$55.2 million raised through common stock offering in September, 2009
 
 
 
23
Looking Ahead
Focus on organic growth
                      o          Take advantage of dislocation in market
                      o          Hire seasoned lenders
                      o          Increase Northern Virginia footprint
                      o          Focus on relationships to increase deposit penetration
Profitability
                      o          Continued focus on Net Interest Margin
                      o          Grow noninterest components of revenue
                      o          Diligent expense control to improve Efficiency Ratio
                      o          Lower effective tax rate
                      o          Continued evaluation of redemption of remaining TARP funds
Potential acquisitions
Continued emphasis on credit quality
 
 
 
24
Why Invest in EGBN?
 Driven by Profitability
 Superior Net Interest Margin
 Emphasis on Core Deposits and Deep Relationship Banking
 Strong Organic Growth
 Geographic Market Positioning
 Experienced and Dedicated Board and Management Team - 17% Insider Ownership
 Exceptional Asset Quality Record
 Conservative Securities Portfolio
 Proven Ability to Execute Acquisitions
 
 
 
EGBN Stock Price Performance
Source: SNL Financial
25
Any Questions ?
 
 
 
26
Appendices
 
 
 
27
Pre-Tax, Pre-Provision Income
(1) Regional peers includes publicly-traded commercial banks with assets between $1 and $5 billion and headquartered in Washington, DC, Virginia, West Virginia, Maryland, Pennsylvania and Delaware
 who reported pre-tax pre-provision net revenues for all reporting periods shown above.
Source: SNL Financial
 
 
 
28
Geographic Detail of Loan Portfolio
Note: At September 30, 2010
Concentration in quality markets: Washington, DC, Montgomery County,
       Fairfax County
Low levels of exposure to markets hit hardest by real estate downturn
 
 
 
29
Loan Portfolio by Risk Rating
Loan portfolio and risk ratings reviewed by independent, third-party
       credit review quarterly
 
 
 
Geographic Detail of NPA’s
30
 
 
 
31
Commercial focus drives growth of Non-Interest Bearing Demand accounts
Taking market share from regional/super-regional banks, but demanding relationship
       pricing
Quickly becoming the leading community bank in Washington DC Metro Area
Deposit Composition
 
 
 
32
 Portfolio has $8.1 million of net unrealized gains at September 30, 2010
 No holdings of GSE equities or bank Trust Preferred or bank Trust Preferred CDOs
 Average life of portfolio is 3.2 years
 Excludes Federal Reserve and Federal Home Loan Bank stock
Conservative Securities Portfolio
 
 
 
EagleBank Deposit Market Share
33
 
 
 
34
Proven Acquisition Capabilities
Evaluated many acquisition opportunities in 12 year history and
     only pursued one transaction - F&T
Acquisition of F&T completed on August 31, 2008
System conversion successfully completed one week after close
Targeted expense savings achieved in methodical and thoughtful
     manner, without disrupting relationships with customers
Contributions from key F&T employees have been meaningful
     to relationship growth
Adopted best practices of both companies
 
 
 
35
Fidelity & Trust Acquisition
Strategic Matters:
 Strong cultural match
 Both institutions were growth oriented
 Both institutions were “high touch”
 Both institutions were “well connected” to community
Financial Matters:
 Stock-for-stock transaction - 1,638,031 shares issued
 Acquisition cost - $13.1 million
 Price to book value 83%
 
Business Matters:
 Additional six banking offices in Maryland, Washington, DC and Tysons Corner
 79 additional employees
 Total assets acquired:               $471 million
 Total loans acquired:                $361 million
 Total securities acquired:         $ 99 million
 Total deposits acquired:           $385 million
Note: F&T balance sheet data at August 31, 2008.
 
 
 
Minimal Impact from Dodd-Frank Regulatory
Reform
Increase in FDIC Limit to $250,000 is a plus
Revision to FDIC assessment base is a relative benefit to
     community banks
No impact on EagleBank from the Volker Rule
No direct impact on EagleBank from new derivatives rules.
     Impact on overall derivatives markets to be determined
Current organization structure is equipped to manage reporting
     requirements
Modest impact to Debit and Credit Card fees
New proxy rules are similar to prior experience from TARP
36
 
 
 
37
 
 
 
38
Experienced Management Team
 
 
 
Experienced Management Team
 
 
 
40
Experienced Management Team
 
 
 
41
 
 
 
42
Historical Quarterly Balance Sheet
 
 
 
43
 
 
 
44
 
 
 
GAAP Reconciliation
45
 
September 30,
December 31,
September 30,
December 31,
March 31,
June 30,
September 30,
(dollars in thousands except per share data)
2008
2008
2009
2009
2010
2010
2010
 
 
 
 
 
 
 
 
Common stockholders' equity
$ 100,593
$ 105,259
$ 164,975
$ 165,709
$ 170,016
$ 174,250
$ 179,764
Less: Intangible assets
 (2,863)
 (2,533)
 (4,447)
 (4,379)
 (4,347)
 (4,277)
 (4,242)
Tangible common equity
$ 97,730
$ 102,726
$ 160,528
$ 161,330
$ 165,669
$ 169,973
$ 175,522
 
 
 
 
 
 
 
 
Book value per common share
$ 7.93
$ 8.34
$ 8.46
$ 8.48
$ 8.66
$ 8.87
$ 9.14
Less: Intangible book value per common share
 (0.23)
 (0.27)
 (0.23)
 (0.22)
 (0.22)
 (0.22)
 (0.22)
Tangible book value per common share
$ 7.70
$ 8.07
$ 8.23
$ 8.26
$ 8.44
$ 8.65
$ 8.92
 
 
 
 
 
 
 
 
Total assets
$ 1,457,545
$ 1,496,827
$ 1,682,773
$ 1,805,504
$ 1,832,991
$ 1,937,265
$ 2,006,146
Less: Intangible assets
 (2,863)
 (2,533)
 (4,447)
 (4,379)
 (4,347)
 (4,277)
 (4,242)
Tangible assets
$ 1,454,682
$ 1,494,294
$ 1,678,326
$ 1,801,125
$ 1,828,644
$ 1,932,988
$ 2,001,904
 
 
 
 
 
 
 
 
Tangible common equity ratio
6.72%
6.87%
9.56%
8.96%
9.06%
8.79%
8.77%
 
 
 
 
 
 
 
 
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. We calculate tangible common equity to tangible assets by excluding the balance of intangible assets
common stockholders' equity and dividing by tangible assets. We calculate tangible book value per common share by dividing tangible common equity
by common shares outstanding, as compared to book value per common share, which we calculate by dividing common stockholders' equity by common
shares outstanding. We believe that this information is important to shareholders' as tangible equity is a measure that is consistent with the
calculation of capital for bank regulatory purposes, which excludes intangible assets from the calculation of risk based ratios.