This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Eagle Bancorp Is a Solid Organic Growth Play

NEW YORK (TheStreet) -- Eagle Bancorp (EGBN) of Bethesda, Md., is bucking the trend for many larger competitors, with strong organic growth and an expanding net interest margin.

FIG Partners analyst Christopher Marinac rates Eagle Bancorp "Outperform," and says "the company's fundamentals are doing great," and that "they are in the D.C. market place that is attractive, picking up the business from bigger banks," including Bank of America (BAC), Capital One Financial (COF), and PNC Financial Services Group (PNC).

Eagle Bancorp had $3.0 billion in total assets as of June 30, with 17 branches in Montgomery County, Md., Washington, and Arlington and Fairfax Counties in Virginia.

The company reported second-quarter earnings of $7.6 million, or 37 cents a share, increasing from $7.5 million, or 36 cents a share in the first quarter, and $4.9 million, or 24 cents a share, during the second quarter of 2011. The second-quarter return on average assets was 1.08%, and the return on average common equity was 13.52%, which are both good numbers in the current environment for banks.

Eagle Bancorp's net interest margin -- the difference between a bank's average yield on loans and investments and its average cost for deposits and borrowings -- expanded to 4.39%, from 4.11% the previous quarter and 4.32% a year earlier, which is an unusual showing for a bank, as long-term rates continue to decline. Marinac says that the company's margin success shows that it is not only acquiring new customers, it is "doing more business with the same customers," meaning that low-cost checking deposits grow, as the company expands its commercial real estate loan portfolio.

The company's total deposits grew 6% quarter-over-quarter and 30% from a year earlier, to $2.5 billion as of June 30. Meanwhile, coveted noninterest bearing demand deposits increased 12% sequentially and 77% year-over-year, to $773 million.

Total loans grew 6% during the second quarter and 19% year-over-year, to $2.3 billion as of June 30, with strong growth in commercial real estate loans, as well as in the company's smaller construction loan portfolio.

Commercial real estate made up 53% of total loans as of June 30, which could give some investors pause, since many of the banks that got in trouble during the real estate bubble that popped in 2008 were heavily concentrated in CRE, however, Marinac says that Eagle Bancorp has "had good credit quality all throughout the cycle," and that "they really never got big in construction, so the construction lending they have done has augmented" earnings.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,912.11 -70.48 -0.42%
S&P 500 1,969.95 -8.96 -0.45%
NASDAQ 4,442.6980 -2.2110 -0.05%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs