Eagle Bancorp (EGBN) delivers strong loan growth while containing expenses, and the company has posted positive results in the last few quarters, leading Christopher Marinac, Managing Principal and Director of Research at FIG Partners, to estimate a possible above-average premium for the stock for price to tangible book as well as a price to earnings basis.
“From my standpoint, one of the best growing companies in the country has been Eagle Bancorp. The company has had a very nice consecutive string of positive earnings surprises, including fourth quarter announced last week. The company, I think, is still well-positioned to grow and produce a healthy return on tangible common equity over 13% in 2013,” Marinac said.
Marinac says revenues are outpacing expenses at EGBN, causing efficiency ratios to go down and earnings and returns to go up. He says the bank’s conscious decision not to engage in M&A and focusing on operations makes it capable of surprising Street estimates yet again.
“It’s a perfect example of a company who made a strategic decision not to do M&A, and by virtue of not doing M&A they’re keeping their overhead very low and they’re getting a fair amount of operating leverage, which in plain English means that your expenses are growing a lot slower than your revenues,” Marinac said.
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