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                              December ______, 1999



Board of Directors
Eagle Bancorp
1400 Prospect Avenue
Helena, MT  59604

         Re:      Registration Statement Under the Securities Act of 1933

Board Members:

     This opinion is rendered in connection with the  Registration  Statement on
Form SB-2 to be filed with the  Securities  and  Exchange  Commission  under the
Securities Act of 1933 relating to the offer and sale of up to 1,010,059  shares
of common  stock,  par value  $0.01 per share  (the  "Common  Stock"),  of Eagle
Bancorp  (the  "Company"),  including  shares to be issued to  certain  employee
benefit plans of the Company and its subsidiary. The Common Stock is proposed to
be issued  pursuant to the Amended and Restated Plan of Mutual  Holding  Company
Reorganization  and Stock Issuance (the "Plan") of American Federal Savings Bank
(the "Bank") in connection with the Bank's  reorganization from a mutual savings
bank form of  organization  to a mutual  savings  bank  holding  company form of
organization,  whereby the Bank will  convert to the stock form of  organization
and become a wholly owned subsidiary of the Company. The mutual holding company,
Eagle Financial MHC (in  organization)  (the "MHC"),  will own a majority of the
shares of the  Company,  and a minority  of the shares of the  Company are to be
offered and sold to the public.  As special counsel to the Bank, the MHC and the
Company, we have reviewed the corporate proceedings relating to the Plan and the
Reorganization and such other legal matters as we



have deemed appropriate for the purpose of rendering this opinion.

     Based on the  foregoing,  we are of the  opinion  that the shares of Common
Stock  covered by the  aforesaid  Registration  Statement  will,  when issued in
accordance with the terms of the Plan against full payment therefor,  be validly
issued, fully paid, and non-assessable shares of common stock of the Company. We
assume no  obligation  to advise you of changes that may hereafter be brought to
our attention.

     We hereby  consent to the use of this  opinion and to the  reference to our
firm   appearing  in  the   Company's   Prospectus   under  the  headings   "The
Reorganization - Federal and State Tax Consequences of the  Reorganization"  and
"Legal and Tax Opinions." We also consent to any references to our legal opinion
referred to under the aforementioned headings in the Prospectus.

                                            Very truly yours,

                                            D R A F T

                                            Nixon Peabody LLP