Eagle Bancorp buys Virginia Heritage for $183 million

Eagle Bancorp plans to purchase Virginia Heritage Bank of Tysons Corner for an estimated $182.9 million, helping to extend the Bethesda-based bank’s reach into Northern Virginia.

The deal, announced Monday evening, is awaiting shareholder approval. It would add $917.4 million in assets for Eagle Bank, the area’s largest community bank with assets of $3.8 billion.

“We’ve always wanted to be a major player in all three jurisdictions,” Ronald D. Paul, chairman and chief executive of Eagle Bancorp, said of the District, Maryland and Virginia. “There is no better fit out there.”

Under the proposed agreement, Virginia Heritage shareholders would receive a combination of Eagle stock and cash. The deal is expected to close as early as the fourth quarter of this year.

“Strategically it’s a good fit,” said Matthew C. Schultheis, an analyst for Boenning & Scattergood, a firm that provides equity research, investment banking and other services. “The balance sheets seem to fit nicely together. There’s a lot of similarity in the loan mix.”

The deal would mark Eagle’s first acquisition since 2008,
when the company purchased Bethesda-based Fidelity & Trust Financial for $48.82 million. (A subsequent deal with Chantilly-based Alliance Bankshares for $31.2 million was called off in late 2011, with both parties citing irreconcilable differences.)

Eagle Bank, which opened in 1998, has grown rapidly in recent years as it expands its commercial lending operations. In the most recent quarter, Eagle posted a record $12.5 million in profits, driven by a 20 percent increase in total loans. Virginia Heritage, meanwhile, reported a 17 percent increase in lending.

“For our customers, partnership with Eagle means access to additional products and services, greater convenience, a significantly higher lending capacity, and
an expanding, well-positioned branch network,” David P. Summers, chairman and chief executive of Virginia Heritage, said in a statement.

Virginia Heritage has six branches in Northern Virginia, as well as a mortgage division in Chantilly. Paul said it was too early to tell whether Eagle Bank would merge or relocate some of the overlapping branches.

But, he added, the bank will continue to focus its efforts on commercial lending in the Washington area.

“We will be no different at $5 billion than we were at $2 billion,” he said. “We’re going to keep doing what we’re doing.”

Capital Business is The Post’s weekly publication focusing on the region’s business community. For more Washington business news, go to www.capbiz.biz.

Abha Bhattarai covers local retail, hospitality and banking for The Washington Post. She has previously written for The New York Times, The Wall Street Journal, Reuters and the St. Petersburg (Fla.) Times.
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