A Great Combination
As you may have heard, EagleBancorp, Inc. entered into an agreement to acquire Alliance Bankshares Corporation. As part of the transaction, Alliance Bank will merge into EagleBank. Once merged, we envision being a $2.9 billion Washington area community bank.
Let me tell you a little about Alliance: It has six branches, in Fairfax, Arlington and Prince William Counties. Its asset size is $536 million. Total loans are $321 million and total deposits are $412 million. That makes for a 76% loan-to-deposit ratio. Alliance has a strong business with title companies and we look forward to incorporating them into our own title company business.
You all know the emphasis EagleBank has placed on building our footprint in Northern Virginia. We want to have a presence and leadership role there as we do in Montgomery County and the District of Columbia. Toward that end, we are planning to open three branches this year. This month we plan to open in Ballston. Rosslyn follows in September and we anticipate opening in Reston at the end of the year.
The merger with Alliance allows us to leap forward, to supplement our organic growth. The six branches add new locations in Fair Lakes, Annandale and Manassas Park and supplements EagleBank branches in Tysons Corner, Ballston and Reston.
Here’s the basic information regarding the deal: It is an all-stock transaction. The purchase price is below book value. Alliance’s loan portfolio is relatively clean. We structured the deal to try to account for those problems we see in their portfolio, and to adjust the purchase price for issues unrelated to credit. We expect the deal to close by the end of the year.
We project that the transaction will be accretive to earnings within the first year after the merger.
Obviously, we consider this very exciting news. We have always been opportunistic but disciplined. When this opportunity presented itself, we analyzed it extensively and made a deal that will makes us a stronger bank and further set us as the leader in Washington area community banks.
Eagle and Alliance share a common vision and culture for providing outstanding customer service, and always putting customer relationships first. We look forward to adding Alliance’s experienced, skilled bankers and branch network to EagleBank.
Just imagine a bank with over 20 branches in the area, nearly $3 billion in assets, and increased loan capacity. That’s going to be EagleBank!