Ticker: EGBN
www.eaglebankcorp.com
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.
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 inBethesda, 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
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
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
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 experienceRaised $16.5 million in initial subscription offering - 1997*Commenced operations with three Maryland branches - July, 1998Second subscription offering raised $30 million - 2003*Reached $500 million in assets in 2004Private 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 acquisitionPlaced $38.2 million of TARP Preferred Stock - December, 2008 (Current balance $23.2 million)$55 million common stock offering - September, 2009Reached $2.0 billion in assets - September, 2010*1997, 2003 and 2009 subscription offerings were over subscribed
4
Summary Statistics - September 30, 2010
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EagleBank Locations
Tyson's Corner
Montgomery County
Prince George’s
County
County
Alexandria
Arlington
Fairfax County
Loudoun
County
County
Washington, DC
Resto
n
n
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Market Information -Washington, DC
Metropolitan Statistical Area
Metropolitan Statistical Area
Population 6.2 Million
5th largest market in the U.S.Employment 2.9 MillionAverage annual job creation is 37,500Highest in net new job growth in the U.S. over last decadeWashington DC Metro area has highest concentration of fastest growing private companies in U.S. (according to Inc. Magazine)
Gross Regional Product (GRP) $443 Billion5th largest regional economy in the U.S.5.3% CAGR in GRP over last 20 yearsFederal Government Spending is 33.3% of GRPSource: 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
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
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.
outside of the defined market area.
Source: FDIC, as of June 30, 2010
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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.
Delaware who reported total assets at all reporting periods shown above.
Source: SNL Financial
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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.
Delaware who reported net income or loss for all reporting periods shown above.
Source: SNL Financial
$4,766
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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
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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
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
Washington, DC
Current Inventory = 714 Units
2005
2006
2007
2008
2009
2010
Source: The Mayhood Co, October, 2010
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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 AreaDeposit 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.
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
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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 inDecember, 2009
$55.2 million raised through common stock offering in September, 2009
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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 acquisitionsContinued emphasis on credit quality
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Why Invest in EGBN?
Driven by ProfitabilitySuperior Net Interest MarginEmphasis on Core Deposits and Deep Relationship BankingStrong Organic GrowthGeographic Market PositioningExperienced and Dedicated Board and Management Team - 17% Insider OwnershipExceptional Asset Quality RecordConservative Securities PortfolioProven Ability to Execute Acquisitions
EGBN Stock Price Performance
Source: SNL Financial
25
Any Questions ?
26
Appendices
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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.
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-partycredit review quarterly
Geographic Detail of NPA’s
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31
Commercial focus drives growth of Non-Interest Bearing Demand accountsTaking market share from regional/super-regional banks, but demanding relationshippricing
Quickly becoming the leading community bank in Washington DC Metro AreaDeposit 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 stockConservative Securities Portfolio
EagleBank Deposit Market Share
33
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Proven Acquisition Capabilities
Evaluated many acquisition opportunities in 12 year history andonly pursued one transaction - F&T
Acquisition of F&T completed on August 31, 2008System conversion successfully completed one week after closeTargeted expense savings achieved in methodical and thoughtfulmanner, without disrupting relationships with customers
Contributions from key F&T employees have been meaningfulto 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 communityFinancial 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 millionNote: F&T balance sheet data at August 31, 2008.
Minimal Impact from Dodd-Frank Regulatory
Reform
Reform
Increase in FDIC Limit to $250,000 is a plusRevision to FDIC assessment base is a relative benefit tocommunity banks
No impact on EagleBank from the Volker RuleNo direct impact on EagleBank from new derivatives rules.Impact on overall derivatives markets to be determined
Current organization structure is equipped to manage reportingrequirements
Modest impact to Debit and Credit Card feesNew proxy rules are similar to prior experience from TARP36
37
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Experienced Management Team
Experienced Management Team
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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. | |||||||