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Eagle Bancorp Is a Solid Organic Growth Play

Eagle Bancorp raised $5.6 million in common equity during the second quarter, at an average price of $15.94 a share, as part of the company's strategy to raise $40 million in common equity "at-the-market," or ATM, which Marinac says means less dilution for shareholders than a traditional offering would mean.

The analyst says that "this is incremental capital" for the company as it expands organically, and that stretching out the capital raise and selling the shares at market price, the company hopes to sell the new shares at between $17 and $18 a share, rather than in the $15 range, which would have been necessary if Eagle had raised the capital all at once through a secondary offering earlier this year.

After Eagle Bancorp released its second-quarter results in July, Marinac said "We think there is plenty of fundamental support for EGBN shares to increase in value even as the ATM equity raise continues for another 12 months ahead (or longer)."

Eagle Bancorp's shares closed at $17.16 Monday, returning 18% year-to-date, following a 1% return during 2011.

The shares trade for 1.5 times their reported June 30 tangible book value of $11.15, and for 11 times the consensus 2013 earnings estimate of $1.58, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is $1.50.

Marinac's price target for Eagle Bancorp's shares is $21.25, and he estimates the company will earn $1.70 a share during 2013.

EGBN Chart EGBN data by YCharts

Interested in more on Eagle Bancorp? See TheStreet Ratings' report card for this stock.

-- Written by Philip van Doorn in Jupiter, Fla.

>Contact by Email.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
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