"If you can't build it, buy it" is giving way at many banks to "we're building it and buying it."

Bank M&A in past years has been marked by a desire to supplement sluggish lending. But many banks that recently reported impressive linked-quarter organic loan growth are also bullish on buying.

The stakes, however, are higher. The market has rewarded banks for organic growth, but that can quickly be eroded by a botched deal, an overpriced purchase or an acquisition that gets snared by regulators.

For these organic growth champions, a deal must be worth the gamble.

"The currencies are fragile, so if you're trading at a high multiple it can be risky to contemplate an acquisition where there are unknowns," said Mark Fitzgibbon, director of research at Sandler O'Neill. Banks with high multiples must "be much more disciplined in their approach and they have to build in more wiggle room to make sure it works out."

Bankers seem to get it; most say that they are buying with a specific goal in mind.

One example is Eagle Bancorp in Bethesda, Md. During the second quarter, the $3.9 billion-asset company's loans grew 7% from a quarter earlier. In June, the company agreed to buy the $917 million-asset Virginia Heritage Bank in Tysons Corner.

For Eagle, the deal fills a void it had in the greater Washington area, and it specifically provides experienced bankers who know how to succeed in the market, said Ronald D. Paul, the company's chairman and chief executive. Virginia Heritage posted 5% linked-quarter loan growth in the second quarter.

"We needed to bring in that kind of talent in northern Virginia," Paul said in an interview. "Having first-hand knowledge of the local market is so critical."

Overall, Eagle wants to organically grow by the size of a community bank each year, so acquisitions must be larger to get Paul's attention. "If this was a $400 million-asset bank, we wouldn't do it," he said.

"A $1 billion-asset bank adds to the franchise value of the company," he added. "When you're at $4 billion, buying a $1 billion bank, you can hit the ground running."

There are drawbacks to high-growth banks buying other high-growth banks. The expected earnings boost can be a tough sell to equity research analysts. Eagle, for instance, expects the $183 million deal to be nearly 5% accretive to 2015 earnings. Several analysts adjusted their 2015 estimates after the announcement, but not all of them gave Eagle full credit for its projections.

"We had pretty robust growth assumptions in the model already," said Chris Marinac, an analyst at FIG Partners. "I don't doubt that they can execute on the deal, but it made us wonder if we already have too much in our assumptions for 2015."

Other analysts say that, while the deal is attractive, Eagle is exposing itself to potential hazards. It could be delayed by regulators, or the integration process could steal attention from the organic growth engine.

"M&A is often the strategy when you can't execute," said Matthew Schultheis, an analyst at Boenning & Scattergood. "That's my issue. They are executing, so why take the risk?"

Eagle is not alone in its willingness to take on risk for the right opportunity. Banner Corp. in Walla Walla, Wash., grew linked-quarter loans by nearly 7%, yet, earlier this month, it agreed to buy Siuslaw Financial Group in Florence, Ore. (Banner's second-quarter loan growth included $88 million of loans it obtained through a small branch deal.)

Banner has also been looking for opportunities in Idaho, but a disciplined approach has cost it two deals as other banks agreed to pay for targets.

Western Alliance Bancorp. in Phoenix reported second-quarter loan growth of 6.1%. Its executives have been vocal about a desire to do deals, but they are also waiting for the company's stock to improve.

Puget Sound Bank in Bellevue, Wash., is eyeing acquisitions because it wants its stock to trade on a larger exchange, such as the Nasdaq. The $357 million-asset bank, which reported loan growth of nearly 9% in the quarter, has regularly grown its loan book by double digits annually.

Puget Sound's stock, which is traded over the counter, doesn't reflect an ability to generate loans, said Jim Mitchell, the company's chief executive.

"We have a nice organic growth trajectory, but we'd like to be a little bigger and faster for our shareholders," Mitchell said. "Trading over the counter doesn't deliver the multiples to the stock that some of the larger banks with the same fundamentals are getting."

The bank trades at a 125% of its tangible book value. Mitchell said he is looking to get into the $500 million to $1 billion-asset range so the company it can fit Nasdaq's listing requirements. Still, Mitchell said he wants to make sure a deal will not distract from the platform the bank has established.

"We don't have to make an acquisition, but if we do, we don't want to dilute what we've accomplished," Mitchell said. "We can't take our eyes off organic growth."

Though it is a delicate balancing act for bankers like Paul and Mitchell, Fitzgibbon said banks that are not producing loan growth have a much tougher road ahead as investors focus sharply on earnings.

"Banks with strong currencies would be foolish to not be on the lookout for deals, if they are growing or not," Fitzgibbon said. "But the ones who are not growing are the ones with the most pressure to do an acquisition."

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