Eagle Bancorp Montana Earns $2.2 Million, or 0.28 per Diluted Share, in the Fourth Quarter of 2023 and $10.1 Million, or $1.29 per Diluted Share, for the Year 2023

Company Release - 1/23/2024
Declares Quarterly Cash Dividend of $0.14 Per Share

HELENA, Mont., Jan. 23, 2024 (GLOBE NEWSWIRE) -- Eagle Bancorp Montana, Inc. (NASDAQ: EBMT), (the “Company,” “Eagle”), the holding company of Opportunity Bank of Montana (the “Bank”), today reported net income of $2.2 million, or $0.28 per diluted share, in the fourth quarter of 2023, compared to $2.6 million, or $0.34 per diluted share, in the preceding quarter, and $3.6 million, or $0.47 per diluted share, in the fourth quarter of 2022. For the year 2023, net income was $10.1 million, or $1.29 per diluted share, compared to $10.7 million, or $1.45 per diluted share, in 2022.

Eagle’s board of directors declared a quarterly cash dividend to $0.14 per share on January 18, 2024. The dividend will be payable March 1, 2024 to shareholders of record February 9, 2024. The current dividend represents an annualized yield of 3.81% based on recent market prices.

“Our full year 2023 results reflect steady organic loan growth,” said Laura F. Clark, President and CEO. “We made efforts to attract high quality loans and were successful, achieving loan growth of 9.7% for the year. The total loan portfolio yield of 5.70% improved four basis points from the prior quarter. Additionally, we have maintained strong credit fundamentals, and our asset quality metrics continue to be solid. While the high interest rate environment continues to be a challenge, we are well positioned with a strong balance sheet to continue our steady growth in 2024.”

Fourth Quarter 2023 Highlights (at or for the three-month period ended December 31, 2023, except where noted):

  • Net income was $2.2 million, or $0.28 per diluted share, in the fourth quarter of 2023, compared to $2.6 million, or $0.34 per diluted share, in the preceding quarter, and $3.6 million, or $0.47 per diluted share, in the fourth quarter a year ago.
  • Net interest margin (“NIM”) was 3.32% in the fourth quarter of 2023, compared to 3.41% in the preceding quarter, and a 78 basis point contraction compared to 4.10% in the fourth quarter a year ago.
  • Revenues (net interest income before the provision for credit losses, plus noninterest income) were $21.0 million in the fourth quarter of 2023, compared to $21.6 million in the preceding quarter and $22.9 million in the fourth quarter a year ago.
  • The accretion of the loan purchase discount into loan interest income from acquisitions was $168,000 in the fourth quarter of 2023, compared to accretion on purchased loans from acquisitions of $175,000 in the preceding quarter.
  • Total loans increased 9.7% to $1.48 billion, at December 31, 2023, compared to $1.35 billion a year earlier, and changed minimally compared to September 30, 2023.
  • The allowance for credit losses represented 1.11% of portfolio loans and 196.0% of nonperforming loans at December 31, 2023. The allowance for loan losses represented 1.03% of portfolio loans and 180.0% of nonperforming loans at December 31, 2022.
  • The Company’s available borrowing capacity was approximately $398.5 million at December 31, 2023.
    December 31, 2023
  (Dollars in thousands) Borrowings Outstanding Remaining Borrowing Capacity
  Federal Home Loan Bank advances $ 175,737   $ 266,017
  Federal Reserve Bank discount window   -     32,472
  Correspondent bank lines of credit   -     100,000
  Total $ 175,737   $ 398,489
       
  • The Company paid a quarterly cash dividend in the fourth quarter of $0.14 per share on December 1, 2023 to shareholders of record November 10, 2023.

Balance Sheet Results

Eagle’s total assets increased 6.5% to $2.08 billion at December 31, 2023, compared to $1.95 billion a year ago, and increased 0.6% from $2.06 billion three months earlier. The investment securities portfolio totaled $318.3 million at December 31, 2023, compared to $349.5 million a year ago, and $308.8 million at September 30, 2023.

Eagle originated $92.0 million in new residential mortgages during the quarter and sold $26.2 million in residential mortgages, with an average gross margin on sale of mortgage loans of approximately 2.86%. This production compares to residential mortgage originations of $114.1 million in the preceding quarter with sales of $109.0 million and an average gross margin on sale of mortgage loans of approximately 3.29%.

Total loans increased $130.8 million, or 9.7%, compared to a year ago, and $8.7 million, or 0.6%, from three months earlier. Commercial real estate loans increased 12.9% to $608.7 million at December 31, 2023, compared to $539.1 million a year earlier. Agricultural and farmland loans increased 11.4% to $267.9 million at December 31, 2023, compared to $240.4 million a year earlier. We continue to build expertise in agricultural lending. Commercial construction and development loans increased 4.6% to $158.1 million, compared to $151.1 million a year ago. Residential mortgage loans increased 15.2% to $156.6 million, compared to $135.9 million a year earlier. Commercial loans increased 4.3% to $132.7 million, compared to $127.3 million a year ago. Home equity loans increased 17.0% to $86.9 million, residential construction loans decreased 27.3% to $43.4 million, and consumer loans increased 9.1% to $30.1 million, compared to a year ago.

Total deposits were $1.64 billion at December 31, 2023, which was unchanged compared to December 31, 2022, and a 1.2% increase compared to $1.62 billion at September 30, 2023. Noninterest-bearing checking accounts represented 25.6%, interest-bearing checking accounts represented 12.9%, savings accounts represented 14.1%, money market accounts comprised 20.2% and time certificates of deposit made up 27.2% of the total deposit portfolio at December 31, 2023. Time certificates of deposit include $72.4 million in brokered certificates at December 31, 2023, compared to none at December 31, 2022 and $40.0 million at September 30, 2023. The average cost of deposits was 1.49% in the fourth quarter of 2023, compared to 1.28% in the preceding quarter and 0.40% in the fourth quarter of 2022. The estimated amount of uninsured deposits at December 31, 2023 was $275.4 million, or 17% of total deposits, compared to $283.3 million, or 17% of total deposits, at September 30, 2023.

“Our deposit mix has leaned towards higher cost time deposits, while the increase in overall cost of deposits has slowed. We anticipate deposit rates will stabilize during the first half of 2024,” said Miranda Spaulding, CFO.

Shareholders’ equity was $169.3 million at December 31, 2023, compared to $158.4 million a year earlier and $157.3 million three months earlier. Book value per share was $21.11 at December 31, 2023, compared to $19.79 a year earlier and $19.69 three months earlier. Tangible book value per share, a non-GAAP financial measure calculated by dividing shareholders’ equity, less goodwill and core deposit intangible, by common shares outstanding, was $16.05 at December 31, 2023, compared to $14.52 a year earlier and $14.55 three months earlier.

Operating Results

“Our NIM contracted over the linked quarter as the increase in cost of funds continued to outpace the growth in yields on earning assets,” said Clark. “We anticipate funding costs to start to stabilize over the next several quarters.”

Eagle’s NIM was 3.32% in the fourth quarter of 2023, compared to 3.41% in the preceding quarter, and a 78 basis point contraction compared to 4.10% in the fourth quarter a year ago. The interest accretion on acquired loans totaled $168,000 and resulted in a four basis-point increase in the NIM during the fourth quarter of 2023, compared to $175,000 and a four basis-point increase in the NIM during the preceding quarter. Funding costs for the fourth quarter were 2.58%, compared to 2.37% in the third quarter of 2023. Funding costs were 0.85% in the fourth quarter of 2022. Average yields on interest earning assets for the fourth quarter of 2023 increased to 5.36%, compared to 5.27% in the third quarter of 2023 and 4.72% in the fourth quarter a year ago. For the year, the NIM was 3.51% compared to 4.03% for 2022.

Net interest income, before the provision for credit losses, decreased 2.5% to $15.2 million in the fourth quarter of 2023, compared to $15.6 million in the third quarter of 2023, and decreased 13.7% compared to $17.6 million in the fourth quarter of 2022. For the year 2023, net interest income decreased 1.3% to $62.5 million, compared to $63.3 million in 2022.

Fourth quarter revenues decreased 2.8% to $21.0 million, compared to $21.6 million in the preceding quarter and decreased 8.3% compared to $22.9 million in the fourth quarter a year ago. For the year, revenues were $85.2 million, compared to $89.5 million in 2022. The decrease compared to a year ago was largely due to lower volumes in mortgage banking activity.

Eagle’s total noninterest income decreased 3.7% to $5.8 million in the fourth quarter of 2023, compared to $6.0 million in the preceding quarter, and increased 9.7% compared to $5.3 million in the fourth quarter a year ago. Net mortgage banking, the largest component of noninterest income, totaled $3.7 million in the fourth quarter of 2023, compared to $4.3 million in the preceding quarter and $3.3 million in the fourth quarter a year ago. For the year, noninterest income decreased 13.3% to $22.7 million, compared to $26.2 million in 2022. Net mortgage banking revenue decreased 23.2% to $15.0 million in 2023, compared to $19.5 million in 2022. These decreases were largely driven by a decline in net gain on sale of mortgage loans. This was impacted by lower loan volumes and margin compression.

Fourth quarter noninterest expense increased 5.7% to $18.9 million, compared to $17.9 million in the preceding quarter and increased 4.0% compared to $18.2 million in the fourth quarter a year ago. For the year, noninterest expense decreased 2.2% to $72.1 million, compared to $73.7 million in 2022. The decrease year-over-year was largely due to acquisition costs in 2022.

For the fourth quarter of 2023, the Company recorded an income tax benefit of $315,000, compared to an income tax provision of $524,000 in the preceding quarter and $787,000 in the fourth quarter of 2022. The effective tax rate for the year was 13.7%, compared to 22.7% for the same period in 2022. The anticipated effective tax rate for 2023 was lower due to the increase in proportion of tax-exempt income compared to the pretax earnings. In addition, during 2023 the Company recorded tax credits and other tax benefits related to investments in low income housing tax credit projects.

Credit Quality

Beginning January 1, 2023, the Company adopted Accounting Standards Update No. 2016-13, Financial Instruments – Credit Losses (Topic 326), which replaced the former “incurred loss” model for recognizing credit losses with an “expected loss” model referred to as the CECL model. The adoption resulted in a $700,000 increase to the allowance for credit losses, a $1.5 million increase to the allowance for unfunded loan commitments, and a net-of-tax cumulative effect adjustment of $1.6 million which decreased the beginning balance of retained earnings.

The provision for credit losses was $270,000 in the fourth quarter of 2023, compared to $588,000 in the preceding quarter and $347,000 in the fourth quarter a year ago. The allowance for credit losses represented 195.2% of nonperforming loans at December 31, 2023, compared to 209.3% three months earlier and 180.0% a year earlier. Nonperforming loans were $8.4 million at December 31, 2023, $7.8 million at September 30, 2023, and $7.8 million a year earlier.

Eagle had $5,000 of other real estate owned and other repossessed assets on its books at December 31, 2023. There was no other real estate owned and other repossessed assets at September 30, 2023 or December 31, 2022.

Net loan charge-offs totaled $10,000 in the fourth quarter of 2023, compared to net loan charge-offs of $108,000 in the preceding quarter and net loan charge-offs of $197,000 in the fourth quarter a year ago. The allowance for credit losses was $16.4 million, or 1.11% of total loans, at December 31, 2023, compared to $16.2 million, or 1.10% of total loans, at September 30, 2023, and $14.0 million, or 1.03% of total loans, a year ago. In addition, during

Capital Management

The ratio of tangible common shareholders’ equity (shareholders’ equity, less goodwill and core deposit intangible) to tangible assets (total assets, less goodwill and core deposit intangible) increased to 6.32% at December 31, 2023 from 6.10% a year ago and 5.75% three months earlier. Shareholders’ equity has been impacted by an accumulated other comprehensive loss related to securities available-for-sale, which resulted from unrealized losses primarily related to rapid increases in interest rates. The improvement for December 31, 2023 compared to the prior quarter was driven by the decline in interest rates on the intermediate to long end of the yield curve over the past quarter. As of December 31, 2023, the Bank’s regulatory capital was in excess of all applicable regulatory requirements and is deemed well capitalized. The Bank’s Tier 1 capital to adjusted total average assets was 9.78% as of December 31, 2023.

About the Company

Eagle Bancorp Montana, Inc. is a bank holding company headquartered in Helena, Montana, and is the holding company of Opportunity Bank of Montana, a community bank established in 1922 that serves consumers and small businesses in Montana through 29 banking offices. Additional information is available on the Bank’s website at www.opportunitybank.com. The shares of Eagle Bancorp Montana, Inc. are traded on the NASDAQ Global Market under the symbol “EBMT.”

Forward Looking Statements

This release may contain certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and may be identified by the use of such words as "believe," “will” "expect," "anticipate," "should," "planned," "estimated," and "potential." These forward-looking statements include, but are not limited to statements of our goals, intentions and expectations; statements regarding our business plans, prospects, mergers, growth and operating strategies; statements regarding the asset quality of our loan and investment portfolios; and estimates of our risks and future costs and benefits. These forward-looking statements are based on current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. These factors include, but are not limited to, changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements; general economic conditions and political events, either nationally or in our market areas, that are worse than expected; the emergence or continuation of widespread health emergencies or pandemics including the magnitude and duration of the COVID-19 pandemic, including but not limited to vaccine efficacy and immunization rates, new variants, steps taken by governmental and other authorities to contain, mitigate and combat the pandemic, adverse effects on our employees, customers and third-party service providers, the increase in cyberattacks in the current work-from-home environment, the ultimate extent of the impacts on our business, financial position, results of operations, liquidity and prospects, continued deterioration in general business and economic conditions could adversely affect our revenues and the values of our assets and liabilities, lead to a tightening of credit and increase stock price volatility, and potential impairment charges; the impact of adverse developments affecting the U.S. banking industry, including the associated impact of any continuing regulatory changes or other mitigation efforts taken by governmental agencies in bank failures and liquidity concerns, which could cause continued or worsening economic and market volatility, and regulatory response thereto; the possibility that future credit losses may be higher than currently expected due to changes in economic assumptions, customer behavior, adverse developments with respect to U.S. economic conditions and other uncertainties, including the impact of supply chain disruptions, inflationary pressures and labor shortages on economic conditions and our business; an inability to access capital markets or maintain deposits or borrowing costs; competition among depository and other financial institutions; loan demand or residential and commercial real estate values in Montana; the concentration of our business in Montana; our ability to continue to increase and manage our commercial real estate, commercial business and agricultural loans; the costs and effects of legal, compliance and regulatory actions, changes and developments, including the initiation and resolution of legal proceedings (including any securities, bank operations, consumer or employee litigation); inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments; adverse changes in the securities markets that lead to impairment in the value of our investment securities and goodwill; other economic, governmental, competitive, regulatory and technological factors that may affect our operations; our ability to implement new technologies and maintain secure and reliable technology systems including those that involve the Bank’s third-party vendors and service providers; cyber incidents, or theft or loss of Company or customer data or money; our ability to appropriately address social, environmental, and sustainability concerns that may arise from our business activities; the effect of our recent or future acquisitions, including the failure to achieve expected revenue growth and/or expense savings, the failure to effectively integrate their operations, the outcome of any legal proceedings and the diversion of management time on issues related to the integration.

Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. All information set forth in this press release is current as of the date of this release and the company undertakes no duty or obligation to update this information.

Use of Non-GAAP Financial Measures

In addition to results presented in accordance with generally accepted accounting principles utilized in the United States, or GAAP, the Financial Ratios and Other Data contains non-GAAP financial measures. Non-GAAP financial measures include: 1) core efficiency ratio, 2) tangible book value per share, 3) tangible common equity to tangible assets, 4) earnings per diluted share, excluding acquisition costs and related taxes and 5) return on average assets, excluding acquisition costs and related taxes. The Company uses these non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and performance trends, and to enhance investors’ overall understanding of such financial performance. In particular, the use of tangible book value per share and tangible common equity to tangible assets is prevalent among banking regulators, investors and analysts.

The numerator for the core efficiency ratio is calculated by subtracting acquisition costs and intangible asset amortization from noninterest expense. Tangible assets and tangible common shareholders’ equity are calculated by excluding intangible assets from assets and shareholders’ equity, respectively. For these financial measures, our intangible assets consist of goodwill and core deposit intangible. Tangible book value per share is calculated by dividing tangible common shareholders’ equity by the number of common shares outstanding. We believe that this measure is consistent with the capital treatment by our bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios and present this measure to facilitate the comparison of the quality and composition of our capital over time and in comparison, to our competitors.

Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. Further, the non-GAAP financial measure of tangible book value per share should not be considered in isolation or as a substitute for book value per share or total shareholders’ equity determined in accordance with GAAP, and may not be comparable to a similarly titled measure reported by other companies. Reconciliation of the GAAP and non-GAAP financial measures are presented below.

 

Balance Sheet
     
(Dollars in thousands, except per share data)   (Unaudited)  
      December 31, September 30, December 31,
        2023     2023     2022  
           
Assets:        
  Cash and due from banks $ 23,243   $ 19,743   $ 19,321  
  Interest bearing deposits in banks   1,302     1,040     2,490  
    Total cash and cash equivalents   24,545     20,783     21,811  
  Securities available-for-sale, at fair value   318,279     308,786     349,495  
  Federal Home Loan Bank ("FHLB") stock   9,191     10,438     5,089  
  Federal Reserve Bank ("FRB") stock   4,131     4,131     4,131  
  Mortgage loans held-for-sale, at fair value   11,432     17,880     8,250  
  Loans:       
  Real estate loans:      
  Residential 1-4 family   156,578     146,938     135,947  
  Residential 1-4 family construction   43,434     48,135     59,756  
  Commercial real estate   608,691     611,963     539,070  
  Commercial construction and development   158,132     151,614     151,145  
  Farmland    142,590     143,789     136,334  
  Other loans:       
  Home equity    86,932     83,221     74,271  
  Consumer    30,125     29,832     27,609  
  Commercial    132,709     129,952     127,255  
  Agricultural    125,298     130,329     104,036  
  Unearned loan fees (1)   -     -     (1,745 )
    Total loans   1,484,489     1,475,773     1,353,678  
  Allowance for credit losses (2)   (16,440 )   (16,230 )   (14,000 )
    Net loans   1,468,049     1,459,543     1,339,678  
  Accrued interest and dividends receivable   12,485     13,657     11,284  
  Mortgage servicing rights, net   15,853     15,738     15,412  
  Assets held-for-sale, at fair value   -     -     1,305  
  Premises and equipment, net   94,282     92,979     84,323  
  Cash surrender value of life insurance, net   47,939     47,647     47,724  
  Goodwill    34,740     34,740     34,740  
  Core deposit intangible, net   5,880     6,264     7,459  
  Other assets    28,860     30,478     17,683  
    Total assets $ 2,075,666   $ 2,063,064   $ 1,948,384  
           
Liabilities:        
  Deposit accounts:       
  Noninterest bearing   418,727     435,655     468,955  
  Interest bearing    1,216,468     1,179,823     1,166,317  
    Total deposits   1,635,195     1,615,478     1,635,272  
  Accrued expenses and other liabilities   36,462     31,597     26,458  
  FHLB advances and other borrowings   175,737     199,757     69,394  
  Other long-term debt, net   58,999     58,962     58,844  
    Total liabilities   1,906,393     1,905,794     1,789,968  
           
Shareholders' Equity:       
  Preferred stock (par value $0.01 per share; 1,000,000 shares      
  authorized; no shares issued or outstanding)   -     -     -  
  Common stock (par value $0.01; 20,000,000 shares authorized;      
  8,507,429 shares issued; 8,016,784, 7,988,132 and 8,006,033      
  shares outstanding at December 31, 2023, September 30, 2023, and      
  December 31, 2022, respectively   85     85     85  
  Additional paid-in capital   108,819     109,422     109,164  
  Unallocated common stock held by Employee Stock Ownership Plan   (4,583 )   (4,727 )   (5,156 )
  Treasury stock, at cost (490,645, 519,297 and 501,396 shares at      
  December 31, 2023, September 30, 2023 and December 31, 2022, respectively)    (11,124 )   (11,574 )   (11,343 )
  Retained earnings    96,021     94,979     92,023  
  Accumulated other comprehensive loss, net of tax   (19,945 )   (30,915 )   (26,357 )
    Total shareholders' equity   169,273     157,270     158,416  
    Total liabilities and shareholders' equity $ 2,075,666   $ 2,063,064   $ 1,948,384  
           
(1) Unearned loan fees are included in individual loan categories for December 31, 2023 and September 30, 2023.  
(2) Allowance for credit losses on loans at December 31, 2023 and September 30, 2023; allowance for loan losses for prior period.



Income Statement   (Unaudited)     (Unaudited)
(Dollars in thousands, except per share data) Three Months Ended   Years Ended
      December 31, September 30, December 31, December 31,
        2023     2023   2022     2023     2022  
Interest and dividend income:            
  Interest and fees on loans $ 21,481   $ 21,068 $ 17,420   $ 79,423   $ 60,353  
  Securities available-for-sale   2,790     2,794   2,716     11,376     8,579  
  FRB and FHLB dividends   247     212   142     727     302  
  Other interest income   23     20   22     89     228  
    Total interest and dividend income   24,541     24,094   20,300     91,615     69,462  
Interest expense:            
  Interest expense on deposits   6,090     5,152   1,673     17,857     3,124  
  FHLB advances and other borrowings   2,569     2,672   357     8,562     514  
  Other long-term debt   684     683   657     2,719     2,512  
    Total interest expense   9,343     8,507   2,687     29,138     6,150  
Net interest income   15,198     15,587   17,613     62,477     63,312  
Provision for credit losses (1)   270     588   347     1,456     2,001  
    Net interest income after provision for credit losses   14,928     14,999   17,266     61,021     61,311  
                 
Noninterest income:            
  Service charges on deposit accounts   444     447   445     1,757     1,668  
  Mortgage banking, net   3,718     4,338   3,306     14,970     19,489  
  Interchange and ATM fees   663     643   707     2,524     2,375  
  Appreciation in cash surrender value of life insurance   301     382   287     1,466     1,035  
  Net loss on sale of available-for-sale securities   -     -   -     (222 )   (6 )
  Other noninterest income   686     225   555     2,227     1,659  
    Total noninterest income   5,812     6,035   5,300     22,722     26,220  
                 
Noninterest expense:            
  Salaries and employee benefits   11,359     10,837   11,010     42,973     44,521  
  Occupancy and equipment expense   1,972     1,956   2,160     8,072     7,601  
  Data processing   1,673     1,486   1,367     5,943     5,995  
  Advertising   445     340   367     1,375     1,419  
  Amortization   386     386   439     1,587     1,334  
  Loan costs   461     517   412     1,887     2,036  
  FDIC insurance premiums   288     301   229     1,150     559  
  Professional and examination fees   438     408   371     1,922     1,469  
  Acquisition costs   -     -   -     -     2,296  
  Other noninterest expense   1,869     1,644   1,802     7,180     6,453  
    Total noninterest expense   18,891     17,875   18,157     72,089     73,683  
                 
Income before (benefit) provision for income taxes   1,849     3,159   4,409     11,654     13,848  
(Benefit) provision for income taxes   (315 )   524   787     1,598     3,147  
Net income $ 2,164   $ 2,635 $ 3,622   $ 10,056   $ 10,701  
                 
Basic earnings per share $ 0.28   $ 0.34 $ 0.47   $ 1.29   $ 1.45  
Diluted earnings per share $ 0.28   $ 0.34 $ 0.47   $ 1.29   $ 1.45  
                 
Basic weighted average shares outstanding   7,809,274     7,784,279   7,776,145     7,793,352     7,376,275  
                 
Diluted weighted average shares outstanding   7,815,022     7,791,966   7,777,552     7,798,244     7,386,253  
                 
(1) Provision for credit losses on loans for the quarter ended December 31, 2023 and September 30, 2023; provision for loan losses for prior periods.
                 



ADDITIONAL FINANCIAL INFORMATION   (Unaudited)  
(Dollars in thousands, except per share data) Three Months Ended or Years Ended
      December 31, September 30, December 31,
        2023     2023     2022  
           
Mortgage Banking Activity (For the quarter):      
  Net gain on sale of mortgage loans $ 2,845   $ 3,591   $ 2,965  
  Net change in fair value of loans held-for-sale and derivatives   (40 )   (71 )   (509 )
  Mortgage servicing income, net   913     818     850  
    Mortgage banking, net $ 3,718   $ 4,338   $ 3,306  
           
Mortgage Banking Activity (Year-to-date):      
  Net gain on sale of mortgage loans $ 11,396     $ 18,610  
  Net change in fair value of loans held-for-sale and derivatives   194       (1,842 )
  Mortgage servicing income, net   3,380       2,721  
    Mortgage banking, net $ 14,970     $ 19,489  
           
Performance Ratios (For the quarter):      
  Return on average assets   0.42 %   0.51 %   0.75 %
  Return on average equity   5.68 %   6.63 %   9.38 %
  Yield on average interest earning assets   5.36 %   5.27 %   4.72 %
  Cost of funds   2.58 %   2.37 %   0.85 %
  Net interest margin   3.32 %   3.41 %   4.10 %
  Core efficiency ratio*   88.08 %   80.89 %   77.33 %
           
Performance Ratios (Year-to-date):      
  Return on average assets   0.50 %     0.60 %
  Return on average equity   6.33 %     6.87 %
  Yield on average interest earning assets   5.14 %     4.42 %
  Cost of funds   2.11 %     0.54 %
  Net interest margin   3.51 %     4.03 %
  Core efficiency ratio*   82.75 %     78.24 %
           
* The core efficiency ratio is a non-GAAP ratio that is calculated by dividing non-interest expense, exclusive of acquisition
costs and intangible asset amortization, by the sum of net interest income and non-interest income.    
           
           
ADDITIONAL FINANCIAL INFORMATION      
(Dollars in thousands, except per share data)      
           
Asset Quality Ratios and Data: As of or for the Three Months Ended
      December 31, September 30, December 31,
        2023     2023     2022  
           
  Nonaccrual loans $ 8,395   $ 7,753   $ 2,200  
  Loans 90 days past due and still accruing   26     -     1,076  
  Restructured loans, net   -     -     4,502  
    Total nonperforming loans   8,421     7,753     7,778  
  Other real estate owned and other repossessed assets   5     -     -  
    Total nonperforming assets   8,426   $ 7,753   $ 7,778  
           
  Nonperforming loans / portfolio loans   0.57 %   0.53 %   0.57 %
  Nonperforming assets / assets   0.41 %   0.38 %   0.40 %
  Allowance for credit losses / portfolio loans   1.11 %   1.10 %   1.03 %
  Allowance for credit losses/ nonperforming loans   195.23 %   209.34 %   179.99 %
  Gross loan charge-offs for the quarter $ 11   $ 122   $ 216  
  Gross loan recoveries for the quarter $ 1   $ 14   $ 19  
  Net loan charge-offs for the quarter $ 10   $ 108   $ 197  
           
           
      December 31, September 30, December 31,
        2023     2023     2022  
Capital Data (At quarter end):      
  Common shareholders' equity (book value) per share $ 21.11   $ 19.69   $ 19.79  
  Tangible book value per share** $ 16.05   $ 14.55   $ 14.52  
  Shares outstanding   8,016,784     7,988,132     8,006,033  
  Tangible common equity to tangible assets***   6.32 %   5.75 %   6.10 %
           
Other Information:
     
  Average investment securities for the quarter $ 306,678   $ 319,308   $ 348,267  
  Average investment securities year-to-date $ 328,533   $ 335,898   $ 336,779  
  Average loans for the quarter **** $ 1,494,181   $ 1,476,584   $ 1,345,776  
  Average loans year-to-date **** $ 1,436,672   $ 1,417,291   $ 1,194,788  
  Average earning assets for the quarter $ 1,817,419   $ 1,812,610   $ 1,705,349  
  Average earning assets year-to-date $ 1,780,727   $ 1,768,361   $ 1,572,106  
  Average total assets for the quarter $ 2,062,267   $ 2,052,443   $ 1,934,002  
  Average total assets year-to-date $ 2,015,586   $ 1,999,864   $ 1,768,919  
  Average deposits for the quarter $ 1,626,598   $ 1,602,770   $ 1,655,298  
  Average deposits year-to-date $ 1,603,861   $ 1,596,201   $ 1,514,158  
  Average equity for the quarter $ 152,516   $ 158,933   $ 154,409  
  Average equity year-to-date $ 158,807   $ 160,917   $ 155,655  
           
           
           
** The tangible book value per share is a non-GAAP ratio that is calculated by dividing shareholders' equity,  
less goodwill and core deposit intangible, by common shares outstanding.      
*** The tangible common equity to tangible assets is a non-GAAP ratio that is calculated by dividing shareholders'  
equity, less goodwill and core deposit intangible, by total assets, less goodwill and core deposit intangible.  
**** Includes loans held for sale.      



Reconciliation of Non-GAAP Financial Measures          
                   
Core Efficiency Ratio   (Unaudited)     (Unaudited)
(Dollars in thousands) Three Months Ended   Years Ended
        December 31, September 30, December 31,   December 31,
          2023     2023     2022       2023     2022  
Calculation of Core Efficiency Ratio:            
  Noninterest expense $ 18,891   $ 17,875   $ 18,157     $ 72,089   $ 73,683  
  Acquisition costs   -     -     -       -     (2,296 )
  Intangible asset amortization   (386 )   (386 )   (439 )     (1,587 )   (1,334 )
    Core efficiency ratio numerator   18,505     17,489     17,718       70,502     70,053  
                   
  Net interest income   15,198     15,587     17,613       62,477     63,312  
  Noninterest income   5,812     6,035     5,300       22,722     26,220  
    Core efficiency ratio denominator   21,010     21,622     22,913       85,199     89,532  
                   
  Core efficiency ratio (non-GAAP)   88.08 %   80.89 %   77.33 %     82.75 %   78.24 %
                   



Tangible Book Value and Tangible Assets   (Unaudited)
(Dollars in thousands, except per share data)   December 31, September 30, December 31,
          2023     2023     2022  
Tangible Book Value:        
  Shareholders' equity   $ 169,273   $ 157,270   $ 158,416  
  Goodwill and core deposit intangible, net     (40,620 )   (41,004 )   (42,199 )
    Tangible common shareholders' equity (non-GAAP) $ 128,653   $ 116,266   $ 116,217  
             
  Common shares outstanding at end of period   8,016,784     7,988,132     8,006,033  
             
  Common shareholders' equity (book value) per share (GAAP) $ 21.11   $ 19.69   $ 19.79  
             
  Tangible common shareholders' equity (tangible book value)      
    per share (non-GAAP)   $ 16.05   $ 14.55   $ 14.52  
             
Tangible Assets:        
  Total assets   $ 2,075,666   $ 2,063,064   $ 1,948,384  
  Goodwill and core deposit intangible, net     (40,620 )   (41,004 )   (42,199 )
    Tangible assets (non-GAAP)   $ 2,035,046   $ 2,022,060   $ 1,906,185  
             
  Tangible common shareholders' equity to tangible assets      
    (non-GAAP)     6.32 %   5.75 %   6.10 %
             



Earnings Per Diluted Share, Excluding Acquisition Costs and Related Taxes (Unaudited)   (Unaudited)
(Dollars in thousands, except per share data) Three Months Ended   Years Ended
    December 31, September 30, December 31, December 31,
      2023     2023   2022     2023   2022  
               
Net interest income after provision for credit losses $ 14,928   $ 14,999 $ 17,266   $ 61,021 $ 61,311  
Noninterest income   5,812     6,035   5,300     22,722   26,220  
               
Noninterest expense   18,891     17,875   18,157     72,089   73,683  
  Acquisition costs   -     -   -     -   (2,296 )
Noninterest expense, excluding acquisition costs (non-GAAP)   18,891     17,875   18,157     72,089   71,387  
               
Income before (benefit) provision for income taxes, excluding acquisition costs   1,849     3,159   4,409     11,654   16,144  
(Benefit) provision for income taxes, excluding acquisition costs            
  related taxes (non-GAAP)   (315 )   524   787     1,598   3,669  
Net Income, excluding acquisition costs and related taxes (non-GAAP) $ 2,164   $ 2,635 $ 3,622   $ 10,056 $ 12,475  
               
Diluted earnings per share (GAAP) $ 0.28   $ 0.34 $ 0.47   $ 1.29 $ 1.45  
Diluted earnings per share, excluding acquisition costs and related            
  taxes (non-GAAP) $ 0.28   $ 0.34 $ 0.47   $ 1.29 $ 1.69  
               



Return on Average Assets, Excluding Acquisition Costs and Related Taxes (Unaudited)
(Dollars in thousands) December 31, September 30, December 31,
      2023     2023     2022  
For the quarter:      
  Net income, excluding acquisition costs and related taxes (non-GAAP)* $ 2,164   $ 2,635   $ 3,622  
  Average total assets quarter-to-date $ 2,062,267   $ 2,052,443   $ 1,934,002  
  Return on average assets, excluding acquisition costs and related taxes (non-GAAP)   0.42 %   0.51 %   0.75 %
         
Year-to-date:      
  Net income, excluding acquisition costs and related taxes (non-GAAP)* $ 10,056   $ 7,892   $ 12,475  
  Average total assets year-to-date $ 2,015,586   $ 1,999,864   $ 1,768,919  
  Return on average assets, excluding acquisition costs and related taxes (non-GAAP)   0.50 %   0.53 %   0.71 %
         
* See Earnings Per Diluted Share, Excluding Acquisition Costs and Related Taxes table for GAAP to non-GAAP reconciliation.
         

 

Contacts: Laura F. Clark, President and CEO
  (406) 457-4007
  Miranda J. Spaulding, SVP and CFO
  (406) 441-5010

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Source: Eagle Bancorp Montana, Inc.