(RTTNews) - Friday, FBR Capital Markets initiated coverage of 10 small-cap banks focused in the Mid-Atlantic and Southeast. The initial coverage includes community banks in the Washington, D.C., metro market, as well as larger community banks having presence predominantly in Virginia, North Carolina, South Carolina, and Georgia.

The brokerage initiated coverage of First Citizens Bancshares Inc. (FCNCA: News ) stock with an Outperform rating and a price target of $205. Analyst Brett Scheiner finds First Citizens' to be a noteworthy opportunity given the company's size, health, and deft acquisition history. The analyst finds FCNCA attractive with limited downside at current valuation levels, with the opportunity for transformational growth as he moves through the later stages of this credit cycle.

The analyst anticipates that FCNCA' capital base will remain healthy through the cycle with year-end 2010 tangible common equity/tangible assets of 7.72%. While the company's current standalone earnings power is limited, with FCNCA trading at 1.10x estimated 2010 TBV, the analyst feels the risk-reward mix is well in investors' favor. The analyst estimates that First Citizens' management could acquire a $5 billion bank in an FDIC-assisted transaction without requiring additional funding.

The brokerage launched coverage of Eagle Bancorp, Inc. (EGBN: News ) stock with an Outperform rating and a price target of $12.50. Given EGBN's recent capital raise, the brokerage anticipates Eagle Bancorp evaluating strategic growth alternatives going forward through organic and branch acquisition opportunities.

Although the brokerage projects credit costs increasing in the coming quarters, albeit off a small base, Eagle Bancorp's current loan loss reserve of $19.9 million more than adequately covers its estimate of $13.9 million in charge-offs through 2010.
Brett Scheiner begin coverage of Cardinal Financial Corp. (CFNL: News ) stock with an Outperform rating and a price target of $10.50 per share. Given the outstanding credit quality at Cardinal Financial and its recent capital raise, the analyst is confident in the company's ability to prosper in the challenging economic environment.

The analyst said that the company's strong markets, capital base, growth potential, and low credit losses position Cardinal Financial among the best-performing community banks in the U.S. Given the strong economy in the Washington, D.C., metro area, FDIC-assisted acquisition opportunities will be limited in Cardinal Financial's markets of operation.

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