- The Washington Times - Monday, February 14, 2005

Eagle Bank is continuing its expansion in the Washington area after opening its eighth branch and posting fourth-quarter results that more than doubled in a year.

In a city with plenty of the industry’s giants, the bank tries to appeal to customers as a local community bank.

“We understand the local customers; we understand the local real estate,” said Ron Paul, chairman of Eagle Bank.

The bank intends to use the 6,000 square-foot office it opened at 1425 K St. NW on Jan. 31 as a springboard for further business ventures in the District.

“It was purposely designed as a regional office to infiltrate the Washington, D.C., market,” Mr. Paul said.

He credits the bank’s growth to developing a simple business formula and sticking with it.

Loans for small to mid-size businesses and nonprofit organizations are the primary revenue source in Washington. Many of the organizations are located in the McPherson Square area, where the latest branch was opened.

“We have a concentration in real estate, the health care industry, accountants and attorneys, and a wide variety of commercial lending,” Mr. Paul said.

Eagle Bank is one of the region’s biggest providers of loans backed by the Small Business Administration.

Since it was founded in 1998, the bank has grown to $553 million in assets.

It started with one office at 7815 Woodmont Ave. in Bethesda and opened four more in suburban Maryland. The other branches in the District are located at 2001 K St. NW and at 1228 Connecticut Ave. NW in Dupont Circle.

A ninth branch, in Chevy Chase, is scheduled to open in January.

The bank’s fourth-quarter net income reached $1.8 million from $815,000 a year earlier.

EagleBank’s stock, which goes by EGBN, has risen steadily in the past few months.

It closed yesterday at $25.35 per share on the Nasdaq Stock Market, up 50 cents, or 2 percent, from the Friday close.

The bank operates with an 18-member board of directors. “It’s a large group, but many of us have been together for over 15 years,” Mr. Paul said. “There are people from all different walks of businesses, and it really gives us a diversified group to get out there and drum up business from. We’ve had a 40 percent growth in deposits and loans in 2004.”

Bill Boyan, of the national investment banking firm Sandler O’Neill & Partners, said EagleBank’s directors have used their real estate background to find properties for their branches at reasonable prices.

“Trying to find good branch locations at a reasonable price is very difficult right now,” Mr. Boyan said.

Lew Sosnowik, a bank analyst for the Bethesda financial firm Koonce Securities, said a planned acquisition of Riggs National Corp. by PNC Financial Services Group Inc. could benefit Eagle Bank.

From Sept. 30, 2003, to Dec. 31, 2004, deposits dropped from $4.04 billion to about $3 billion at Riggs Bank as the federal government mounted a prosecution against the bank for failing to report suspicious transactions of account holders and its board negotiated an acquisition with PNC.

Mr. Sosnowik predicts more customers will leave Riggs Bank.

“I think there are going to be major, major defections,” he said. “It would be more likely than not for Eagle Bank to get some of those defections.”


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