Eagle Bancorp Montana Earns $2.7 Million, or $0.39 per Diluted Share, in Second Quarter of 2021; Increases Quarterly Cash Dividend by 28% to $0.125 per Share

Rhea-AI Summary

Eagle Bancorp Montana (NASDAQ: EBMT) reported a net income of $2.7 million or $0.39 per diluted share for Q2 2021, down from $5.7 million or $0.84 per diluted share the previous year.

The board increased the quarterly dividend by 28% to $0.125 per share, payable on September 3, 2021. Total loans rose 3.9% to $873.9 million, and deposits surged 19.9% to $1.15 billion.

Despite lower mortgage sales, the company remains confident in its growth prospects as economy recovers from COVID-19.

Positive

• Quarterly cash dividend increased by 28% to $0.125 per share.
• Total deposits increased by 19.9% to $1.15 billion.
• Total loans grew 3.9% to $873.9 million.
• Strong loan production both year-over-year and quarter-over-quarter.

Negative

• Net income decreased to $2.7 million from $5.7 million in Q2 2020.
• Net interest margin (NIM) fell to 3.81% from 3.97% in the previous quarter.
• Total revenues decreased to $22.6 million from $24.5 million in the preceding quarter.

HELENA, Mont., July 27, 2021 (GLOBE NEWSWIRE) -- Eagle Bancorp Montana, Inc. (NASDAQ: EBMT), (the “Company,” “Eagle”), the holding company of Opportunity Bank of Montana, today reported net income in the second quarter of 2021 of $2.7 million, or $0.39 per diluted share, compared to $5.7 million, or $0.84 per diluted share, in the second quarter a year ago, and $5.3 million, or $0.78 per diluted share, in the preceding quarter. Operating results for the second quarter of 2021 reflect lower contributions from gains on sales of mortgage loans compared to the preceding quarter. As expected, the robust mortgage activity from the prior year has begun to equalize.

Eagle’s board of directors increased its quarterly cash dividend by 28% to $0.125 per share on July 22, 2021. The dividend will be payable September 3, 2021 to shareholders of record August 13, 2021. The current annualized dividend yield is 2.18% based on recent market prices.

“We extended our momentum from the first quarter generating solid second quarter earnings, supported by net interest income growth and higher loan production both year-over-year and from the linked quarter,” said Peter J. Johnson, President and CEO. “Deposit balances hit record levels again this quarter, with second round SBA Paycheck Protection Program (PPP) loans and new client relationships contributing to strong quarterly deposit growth of $52.2 million. We continue to monitor our loan portfolio and asset quality metrics very closely, and believe that our reserve levels are sufficient to cover any potential loan losses stemming from the pandemic. As the vaccine rollout continues and COVID-19 restrictions lift in Montana, we remain well positioned for growth during the second half of the year.”

Second Quarter 2021 Highlights (at or for the three-month period ended June 30, 2021, except where noted)

• Net income of $2.7 million, or $0.39 per diluted share, in the second quarter of 2021, compared to $5.7 million, or $0.84 per diluted share, in the second quarter a year ago, and $5.3 million, or $0.78 per diluted share, in the preceding quarter.
• Net interest margin (“NIM”) was 3.81% in the second quarter of 2021, compared to 3.97% in the preceding quarter, and 3.85% in the second quarter a year ago.
• Revenues (net interest income before the provision for loan losses, plus non-interest income) were $22.6 million in the second quarter of 2021, compared to $24.5 million in the preceding quarter and $24.1 million in the second quarter a year ago.  
• Purchase discount on loans from the Western Bank of Wolf Point portfolio was $1.2 million at January 1, 2020, of which $499,000 remained as of June 30, 2021.
• Remaining purchase discount on loans from acquisitions prior to 2020 totaled $758,000 as of June 30, 2021.
• The accretion of the loan purchase discount into loan interest income from the Western Bank of Wolf Point, and previous acquisitions was $125,000 in the second quarter of 2021, compared to interest accretion on purchased loans from acquisitions of $189,000 in the preceding quarter.
• The allowance for loan losses represented 135.6% of nonperforming loans at June 30, 2021, compared to 124.6% a year earlier.
• Total loans increased 3.9% to $873.9 million at June 30, 2021, compared to $840.8 million a year earlier and 5.4% compared to $829.3 million in the previous quarter.
• Total deposits increased 19.9% to $1.15 billion at June 30, 2021, from $955.4 million a year ago.
• Eagle remained well capitalized with a tangible common shareholders’ equity ratio of 9.72% at June 30, 2021.
• Paid a quarterly cash dividend of $0.0975 per share on June 4, 2021 to shareholders of record May 14, 2021.
  

COVID-19 Preparations as of June 30, 2021:

• Industry Exposure: Eagle’s exposure, as a percentage of total loans, to some of the industries with business revenues dramatically impacted by the pandemic includes hotels and lodging (5.69%), health care and social assistance (3.77%), bars and restaurants (2.68%), casinos (0.95%), and nursing homes (0.47%).
• Loan Accommodations: The Bank has offered multiple accommodation options to its clients, including 90-day deferrals, interest only payments, and forbearances. As of June 30, 2021, remaining loan modifications for 28 nonresidential borrowers represented $17.5 million in loans or 2.00% of total loans, compared to 41 borrowers, representing $27.8 million or 3.36% of total loans, three months earlier. Approximately 86.08% of loans originally modified, or 287 borrowers, are now performing according to adapted loan agreements. The Montana Board of Investments (“MBOI”) offered 12-months of interest payment assistance to qualified borrowers. The Bank qualified 32 borrowers for the MBOI program representing $27.3 million in loans, of which $17.4 million is included in modification totals as of June 30, 2021. There are 21 forbearances remaining for residential mortgage loans, of which 19 are sold and serviced as of June 30, 2021. Utilization of credit lines were 80.2% at the end of the second quarter, compared to 81.6% at the end of the previous quarter, which aligns with historical usage rates.
• Small Business Administration (SBA) Paycheck Protection Program (PPP): Eagle began taking loan applications from its small business clients immediately after the program was implemented in April 2020, and as of the close of the program, Eagle had helped 764 of its customers receive $45.7 million in SBA PPP loans. Eagle has processed applications for PPP loan forgiveness for customers, with 682 loans, representing over $39.8 million now paid in full. The remaining 82 PPP loans represent $5.9 million.
  
  On December 27, 2020, the Consolidated Appropriations Act (“CAA”) was signed into law, providing new COVID-19 stimulus relief, and it included $284 billion allocated for another round of PPP lending. The program offered new PPP loans for companies that did not receive a PPP loan in 2020, and also “second draw” loans targeted at hard-hit businesses that had already spent their initial PPP proceeds. As of June 30, 2021, Eagle had supported 646 borrowers receive $19.5 million in second round PPP funding, with 142 loans, representing $2.8 million now paid in full.

• Loan Loss Provision: Management made the decision that due to the strength of the local economy, in conjunction with loan activity, no loan loss provision was necessary in the second quarter of 2021 when considering the COVID-19 pandemic.
• Deposit Accommodations: The Bank halted deposit fees associated with early withdrawal requests to assist depositors with funding needs.
• Liquidity Changes: Through the quarter ended June 30, 2021, the liquidity level has steadily increased, as a result of PPP loan payoffs and deposit growth.
  

Recent Events

During the second quarter 2021, the Company completed its modified “Dutch auction” tender offer (the “Tender Offer”) to purchase for cash up to $6,000,000 of shares of its common stock at a price per share not less than $24.00 and not greater than $26.25.

Because the Tender Offer was oversubscribed, shares were accepted from tendering stockholders on a pro rata basis so that the Company had accepted for purchase 250,000 shares of its common stock at a price of $24.00 per share.

The aggregate purchase price for the shares purchased in the Tender Offer was approximately $6,000,000, excluding fees and expenses relating to the Tender Offer. These shares represented approximately 3.7% of the shares outstanding.

Acquisitions

On January 1, 2020, Eagle completed its acquisition of Western Holding Company of Wolf Point, and its wholly owned subsidiary, Western Bank of Wolf Point, in a transaction valued at approximately $15.0 million. In the transaction, Eagle acquired one retail bank branch and approximately $104 million in assets, $87 million in deposits and $43 million in gross loans.

Balance Sheet Results

Eagle’s total assets increased 8.9% to $1.36 billion at June 30, 2021, compared to $1.25 billion a year ago, and increased 3.7% from $1.31 billion three months earlier.

Strong CRE and commercial construction activity more than offset PPP loan forgiveness, causing the loan portfolio to grow approximately 3.9% compared to a year ago and grow approximately 5.4% from the previous quarter.

Eagle originated $302.4 million in new residential mortgages during the quarter and sold $292.1 million in residential mortgages, with an average gross margin on sale of mortgage loans of approximately 3.59%. This production compares to residential mortgage originations of $271.4 million in the preceding quarter with sales of $260.5 million.

Commercial real estate loans increased 14.9% to $368.3 million at June 30, 2021, compared to $320.6 million a year earlier. Agricultural and farmland loans increased 2.8% to $120.7 million at June 30, 2021, compared to $117.4 million a year earlier. Commercial loans decreased 11.7% to $107.9 million, compared to $122.2 million a year ago, reflecting SBA PPP loan forgiveness during the current quarter. Residential mortgage loans decreased 9.4% to $101.4 million, compared to $112.0 million a year earlier. Commercial construction and development loans increased 18.9% to $63.5 million, home equity loans decreased 5.1% to $55.7 million, residential construction loans increased 3.4% to $40.2 million, and consumer loans decreased 6.8% to $18.9 million, compared to a year ago.  

Total deposits increased 19.9% to $1.15 billion at June 30, 2021, compared to $955.4 million at June 30, 2020, and increased 4.8% compared to $1.09 billion at March 31, 2021. Federal programs such as the PPP, stimulus checks and increased weekly unemployment benefits have boosted deposit balances. Noninterest-bearing checking accounts represent 30.5%, interest-bearing checking accounts represent 16.9%, savings accounts represent 17.7%, money market accounts comprise 21.2% and time certificates of deposit make up 13.7% of the total deposit portfolio, at June 30, 2021.

Shareholders’ equity increased 7.9% to $152.7 million at June 30, 2021, compared to $141.5 million a year earlier and decreased 2.0% compared to $155.8 million three months earlier. Tangible book value was $19.17 per share, at June 30, 2021, compared to $17.32 per share a year earlier and $19.60 per share three months earlier.  

Operating Results

“The continued low interest rate environment, coupled with lower yields on interest earning assets and increased short-term liquidity, continued to put pressure on our NIM during the second quarter. We are encouraged by our strong loan growth in the second quarter and expect to see continued growth in dollar net interest income,” said Johnson. Eagle’s NIM was 3.81% in the second quarter of 2021, compared to 3.97% in the preceding quarter, and 3.85% in the second quarter a year ago. The interest accretion on purchased loans totaled $125,000 and resulted in a four basis-point increase in the NIM during the second quarter, compared to $189,000 and a seven basis-point increase in the NIM during the preceding quarter. The investment securities portfolio increased to $234.0 million at June 30, 2021, compared to $180.3 million at March 31, 2021, and $174.5 million at June 30, 2020. Average yields on earning assets for the second quarter decreased to 4.08% from 4.48% a year ago. For the first six months of 2021, the NIM was 3.89%, compared to 3.95% for the first six months of 2020.

Eagle’s second quarter revenues were $22.6 million, compared to $24.5 million in the preceding quarter and $24.1 million in the second quarter a year ago. The quarterly decrease was primarily the result of lower gain on sale of mortgages.   In the first six months of 2021, revenues increased 9.9% to $47.2 million, compared to $42.9 million in the first six months of 2020.

Net interest income, before the loan loss provision, increased 1.7% to $11.3 million in the second quarter, compared to $11.1 million in the first quarter of 2021, and increased 8.7% compared to $10.4 million in the second quarter of 2020. Year-to-date, net interest income increased 7.5% to $22.5 million, compared to $20.9 million in the same period one year earlier.

Total noninterest income decreased to $11.3 million in the second quarter of 2021, compared to $13.4 million in the preceding quarter, and $13.7 million in the second quarter a year ago. Net mortgage banking totaled $9.9 million in the second quarter of 2021, compared to $11.8 million in the preceding quarter and $11.3 million in the second quarter a year ago. In the first six months of 2021, noninterest income increased 12.3% to $24.7 million, compared to $22.0 million in the first six months of 2020. Net mortgage banking increased 18.6% to $21.7 million in the first six months of 2021, compared to $18.3 million in the first six months of 2020.

Eagle’s second quarter noninterest expenses were $19.0 million, compared to $17.2 million in the preceding quarter and $15.1 million in the second quarter a year ago. In the first six months of 2021, noninterest expense increased to $36.3 million, compared to $28.0 million in the first six months of 2020. The increase for the second quarter and year-to-date is largely attributable to an increase in salary, commissions and employee benefits and processing expenses for PPP loans.

For the second quarter of 2021, the income tax provision totaled $893,000, for an effective tax rate of 25.0%, compared to $1.8 million in the preceding quarter and $2.0 million in the second quarter of 2020.

Credit Quality

The loan loss provision was $22,000 in the second quarter of 2021, compared to $299,000 in the preceding quarter and $1.2 million in the second quarter a year ago. The allowance for loan losses represented 135.6% of nonperforming loans at June 30, 2021, compared to 146.7% three months earlier and 124.6% a year earlier. Local economies continue to rebound and our loan quality has remained strong despite the impact of the COVID-19 pandemic. Nonperforming loans were $8.8 million at June 30, 2021, compared to $8.1 million at March 31, 2021, and $8.4 million a year earlier.

Eagle had $6,000 in other real estate owned (“OREO”) and other repossessed assets on its books at June 30, 2021. This compares to no OREO at March 31, 2021, and $57,000 in OREO at June 30, 2020.

Net loan charge-offs totaled $22,000 in the second quarter of 2021, compared to net loan recoveries of $1,000 in the preceding quarter and net loan recoveries of $23,000 in the second quarter a year ago. The allowance for loan losses was $11.9 million, or 1.36% of total loans, at June 30, 2021, compared to $11.9 million, or 1.43% of total loans, at March 31, 2021, and $10.5 million, or 1.25% of total loans, a year ago.  

Capital Management

Eagle Bancorp Montana, Inc. continues to be well capitalized with the ratio of tangible common shareholders’ equity to tangible assets of 9.72% as of June 30, 2021. (Shareholders’ equity, less goodwill and core deposit intangible to tangible assets).

Stock Repurchase

Eagle announced that its Board of Directors has authorized the repurchase of up to 100,000 shares of its common stock, representing approximately 1.5% of outstanding shares. Under the plan, shares may be purchased by the company on the open market or in privately negotiated transactions. The extent to which the company repurchases its shares and the timing of such repurchase will depend upon market conditions and other corporate considerations. The plan expires on July 22, 2022.

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 23 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 current global COVID-19 pandemic, 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 duration and impact of the COVID-19 pandemic, including but not limited to the efficiency of the vaccine rollout, 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; 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; other economic, governmental, competitive, regulatory and technological factors that may affect our operations; cyber incidents, or theft or loss of Company or customer data or money; the effect of our recent acquisitions, including the failure to achieve expected revenue growth and/or expense savings, the failure to effectively integrate their operations 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 disclosures 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 5) return on average assets, excluding acquisition costs. The Company uses these non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance 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. 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)
		June 30,			March 31,			June 30,
			2021			2021			2020
Assets:
	Cash and due from banks	$	19,013		$	17,199		$	12,555
	Interest bearing deposits in banks		36,869			87,165			11,028
	Federal funds sold		2,790			6,859			29,305
	Total cash and cash equivalents		58,672			111,223			52,888
	Securities available-for-sale		233,992			180,276			174,526
	FHLB stock		1,874			1,977			4,057
	FRB stock		2,974			2,974			2,601
	Mortgage loans held-for-sale, at fair value		56,826			60,609			57,715
	Loans:
	Real estate loans:
	Residential 1-4 family		101,418			100,948			111,954
	Residential 1-4 family construction		40,203			35,558			38,864
	Commercial real estate		368,327			329,772			320,634
	Commercial construction and development		63,501			66,718			53,388
	Farmland		66,070			67,592			58,609
	Other loans:
	Home equity		55,739			53,270			58,755
	Consumer		18,859			19,424			20,231
	Commercial		107,850			108,956			122,182
	Agricultural		54,632			49,642			58,823
	Unearned loan fees		(2,669	)		(2,541	)		(2,611	)
	Total loans		873,930			829,339			840,829
	Allowance for loan losses		(11,900	)		(11,900	)		(10,500	)
	Net loans		862,030			817,439			830,329
	Accrued interest and dividends receivable		5,732			5,451			6,075
	Mortgage servicing rights, net		12,128			11,320			8,334
	Premises and equipment, net		65,627			61,971			52,897
	Cash surrender value of life insurance, net		28,084			27,911			26,058
	Goodwill		20,798			20,798			20,798
	Core deposit intangible, net		2,061			2,202			2,669
	Other assets		8,557			7,270			9,487
	Total assets	$	1,359,355		$	1,311,421		$	1,248,434
Liabilities:
	Deposit accounts:
	Noninterest bearing		349,017			331,589			271,259
	Interest bearing		796,585			761,815			684,185
	Total deposits		1,145,602			1,093,404			955,444
	Accrued expenses and other liabilities		21,879			20,513			20,999
	FHLB advances and other borrowings		9,300			11,862			90,786
	Other long-term debt, net		29,830			29,811			39,676
	Total liabilities		1,206,611			1,155,590			1,106,905
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; 7,110,833 shares issued; 6,776,703, 6,775,447, and 6,817,602 shares outstanding at June 30, 2021, March 31, 2021 and June 30, 2020, respectively)		71			71			71
	Additional paid-in capital		80,820			77,744			77,506
	Unallocated common stock held by Employee Stock Ownership Plan		(6,061	)		(103	)		(227	)
	Treasury stock, at cost (334,130, 335,386 and 293,231 shares at June 30, 2021, March 31, 2021 and June 30, 2020, respectively)		(7,631	)		(4,423	)		(3,664	)
	Retained earnings		80,607			78,586			63,757
	Accumulated other comprehensive income, net of tax		4,938			3,956			4,086
	Total shareholders' equity		152,744			155,831			141,529
	Total liabilities and shareholders' equity	$	1,359,355		$	1,311,421		$	1,248,434

Income Statement	(Unaudited)							(Unaudited)
(Dollars in thousands, except per share data)	Three Months Ended							Six Months Ended
	June 30,		March 31,		June 30,			June 30,
	2021		2021		2020			2021		2020
Interest and dividend income:
Interest and fees on loans	$	11,012	$	11,029	$	11,060		$	22,041	$	22,492
Securities available-for-sale		1,018		877		952			1,895		1,979
FRB and FHLB dividends		63		69		95			132		189
Other interest income		32		26		26			58		104
Total interest and dividend income		12,125		12,001		12,133			24,126		24,764
Interest expense:
Interest expense on deposits		366		402		945			768		2,284
FHLB advances and other borrowings		45		70		342			115		805
Other long-term debt		389		390		423			779		775
Total interest expense		800		862		1,710			1,662		3,864
Net interest income		11,325		11,139		10,423			22,464		20,900
Loan loss provision		22		299		1,227			321		1,897
Net interest income after loan loss provision		11,303		10,840		9,196			22,143		19,003
Noninterest income:
Service charges on deposit accounts		293		273		216			566		532
Mortgage banking, net		9,932		11,763		11,278			21,695		18,291
Interchange and ATM fees		494		425		379			919		716
Appreciation in cash surrender value of life insurance		173		158		160			331		320
Net gain on sale of available-for-sale securities		-		-		1,068			-		1,068
Other noninterest income		416		774		597			1,190		1,075
Total noninterest income		11,308		13,393		13,698			24,701		22,002
Noninterest expense:
Salaries and employee benefits		12,745		12,086		9,267			24,831		16,949
Occupancy and equipment expense		1,651		1,430		1,188			3,081		2,397
Data processing		1,198		1,297		1,089			2,495		2,339
Advertising		251		273		167			524		416
Amortization		143		144		166			287		330
Loan costs		750		722		398			1,472		645
FDIC insurance premiums		81		81		3			162		72
Postage		114		95		86			209		184
Professional and examination fees		328		282		407			610		692
Acquisition costs		-		-		29			-		157
Other noninterest expense		1,776		803		2,333			2,579		3,800
Total noninterest expense		19,037		17,213		15,133			36,250		27,981
Income before provision for income taxes		3,574		7,020		7,761			10,594		13,024
Provision for Income taxes		893		1,755		2,026			2,648		3,362
Net income	$	2,681	$	5,265	$	5,735		$	7,946	$	9,662
Basic earnings per share	$	0.40	$	0.78	$	0.84		$	1.17	$	1.42
Diluted earnings per share	$	0.39	$	0.78	$	0.84		$	1.17	$	1.41
Basic weighted average shares outstanding		6,775,557		6,775,447		6,818,494			6,775,503		6,818,688
Diluted weighted average shares outstanding		6,794,900		6,788,679		6,855,856			6,791,885		6,853,065

ADDITIONAL FINANCIAL INFORMATION				(Unaudited)
(Dollars in thousands, except per share data)	Three or Six Months Ended
	June 30,			March 31,			June 30,
		2021			2021			2020
Mortgage Banking Activity (For the quarter):
Net gain on sale of mortgage loans	$	10,481		$	14,277		$	7,920
Net change in fair value of loans held-for-sale and derivatives		(513	)		(2,456	)		3,703
Mortgage servicing income, net		(36	)		(58	)		(345	)
Mortgage banking, net	$	9,932		$	11,763		$	11,278
Mortgage Banking Activity (Year-to-date):
Net gain on sale of mortgage loans	$	24,758		$	14,277		$	13,331
Net change in fair value of loans held-for-sale and derivatives		(2,969	)		(2,456	)		5,077
Mortgage servicing income, net		(94	)		(58	)		(117	)
Mortgage banking, net	$	21,695		$	11,763		$	18,291
Performance Ratios (For the quarter):
Return on average assets		0.80	%		1.65	%		1.89	%
Return on average equity		6.84	%		13.50	%		16.66	%
Net interest margin		3.81	%		3.97	%		3.85	%
Core efficiency ratio*		83.48	%		69.58	%		61.93	%
Performance Ratios (Year-to-date):
Return on average assets		1.22	%		1.65	%		1.63	%
Return on average equity		10.16	%		13.50	%		14.31	%
Net interest margin		3.89	%		3.97	%		3.95	%
Core efficiency ratio*		76.25	%		69.58	%		64.09	%
Asset Quality Ratios and Data:	As of or for the Three Months Ended
	June 30,			March 31,			June 30,
		2021			2021			2020
Nonaccrual loans	$	5,467		$	5,657		$	5,632
Loans 90 days past due and still accruing		1,509			611			666
Restructured loans, net		1,803			1,843			2,132
Total nonperforming loans		8,779			8,111			8,430
Other real estate owned and other repossessed assets		6			-			57
Total nonperforming assets	$	8,785		$	8,111		$	8,487
Nonperforming loans / portfolio loans		1.00	%		0.98	%		1.00	%
Nonperforming assets / assets		0.65	%		0.62	%		0.68	%
Allowance for loan losses / portfolio loans		1.36	%		1.43	%		1.25	%
Allowance / nonperforming loans		135.55	%		146.71	%		124.56	%
Gross loan charge-offs for the quarter	$	33		$	18		$	11
Gross loan recoveries for the quarter	$	11		$	19		$	34
Net loan charge-offs (recoveries) for the quarter	$	22		$	(1	)	$	(23	)
				(Unaudited)
	June 30,			March 31,			June 30,
		2021			2021			2020
Capital Data (At quarter end):
Tangible book value per share**	$	19.17		$	19.60		$	17.32
Shares outstanding		6,776,703			6,775,447			6,817,602
Tangible common equity to tangible assets***		9.72	%		10.31	%		9.64	%
Other Information:
Average total assets for the quarter	$	1,337,040		$	1,276,965		$	1,214,876
Average total assets year-to-date	$	1,307,003		$	1,276,965		$	1,183,120
Average earning assets for the quarter	$	1,192,513		$	1,138,032		$	1,086,301
Average earning assets year-to-date	$	1,165,273		$	1,138,032		$	1,061,488
Average loans for the quarter ****	$	899,644		$	890,042		$	867,374
Average loans year-to-date ****	$	894,843		$	890,042		$	853,900
Average equity for the quarter	$	156,800		$	155,971		$	137,693
Average equity year-to-date	$	156,386		$	155,971		$	135,017
Average deposits for the quarter	$	1,120,826		$	1,054,782		$	931,656
Average deposits year-to-date	$	1,087,804		$	1,054,782		$	911,042
* 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.
** 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										Six Months Ended
	June 30,			March 31,			June 30,				June 30,
		2021			2021			2020				2021			2020
Calculation of Core Efficiency Ratio:
Noninterest expense	$	19,037		$	17,213		$	15,133			$	36,250		$	27,981
Acquisition costs		-			-			(29	)			-			(157	)
Intangible asset amortization		(143	)		(144	)		(166	)			(287	)		(330	)
Core efficiency ratio numerator		18,894			17,069			14,938				35,963			27,494
Net interest income		11,325			11,139			10,423				22,464			20,900
Noninterest income		11,308			13,393			13,698				24,701			22,002
Core efficiency ratio denominator		22,633			24,532			24,121				47,165			42,902
Core efficiency ratio (non-GAAP)		83.48	%		69.58	%		61.93	%			76.25	%		64.09	%

Tangible Book Value and Tangible Assets	(Unaudited)
(Dollars in thousands, except per share data)	June 30,			March 31,			June 30,
		2021			2021			2020
Tangible Book Value:
Shareholders' equity	$	152,744		$	155,831		$	141,529
Goodwill and core deposit intangible, net		(22,859	)		(23,000	)		(23,467	)
Tangible common shareholders' equity (non-GAAP)	$	129,885		$	132,831		$	118,062
Common shares outstanding at end of period		6,776,703			6,775,447			6,817,602
Common shareholders' equity (book value) per share (GAAP)	$	22.54		$	23.00		$	20.76
Tangible common shareholders' equity (tangible book value) per share (non-GAAP)	$	19.17		$	19.60		$	17.32
Tangible Assets:
Total assets	$	1,359,355		$	1,311,421		$	1,248,434
Goodwill and core deposit intangible, net		(22,859	)		(23,000	)		(23,467	)
Tangible assets (non-GAAP)	$	1,336,496		$	1,288,421		$	1,224,967
Tangible common shareholders' equity to tangible assets (non-GAAP)		9.72	%		10.31	%		9.64	%

Earnings Per Diluted Share, Excluding Acquisition Costs	(Unaudited)								(Unaudited)
(Dollars in thousands, except per share data)	Three Months Ended								Six Months Ended
	June 30,		March 31,		June 30,				June 30,
		2021		2021		2020				2021		2020
Net interest income after loan loss provision	$	11,303	$	10,840	$	9,196			$	22,143	$	19,003
Noninterest income		11,308		13,393		13,698				24,701		22,002
Noninterest expense		19,037		17,213		15,133				36,250		27,981
Acquisition costs		-		-		(29	)			-		(157	)
Noninterest expense, excluding acquisition costs (non-GAAP)		19,037		17,213		15,104				36,250		27,824
Income before income taxes		3,574		7,020		7,790				10,594		13,181
Provision for income taxes, excluding acquisition costs related taxes (non-GAAP)		893		1,755		2,034				2,648		3,403
Net Income, excluding acquisition costs (non-GAAP)	$	2,681	$	5,265	$	5,756			$	7,946	$	9,778
Diluted earnings per share (GAAP)	$	0.39	$	0.78	$	0.84			$	1.17	$	1.41
Diluted earnings per share, excluding acquisition costs (non-GAAP)	$	0.39	$	0.78	$	0.84			$	1.17	$	1.43

Return on Average Assets, Excluding Acquisition Costs	(Unaudited)
(Dollars in thousands)	June 30,			March 31,			June 30,
		2021			2021			2020
For the quarter:
Net income, excluding acquisition costs (non-GAAP)*	$	2,681		$	5,265		$	5,756
Average total assets quarter-to-date	$	1,337,040		$	1,276,965		$	1,214,876
Return on average assets, excluding acquisition costs (non-GAAP)		0.80	%		1.65	%		1.90	%
Year-to-date:
Net income, excluding acquisition costs (non-GAAP)*	$	7,946		$	5,265		$	9,778
Average total assets year-to-date	$	1,307,003		$	1,276,965		$	1,183,120
Return on average assets, excluding acquisition costs (non-GAAP)		1.22	%		1.65	%		1.65	%
* See Earnings Per Diluted Share, Excluding Acquisition Costs table for GAAP to non-GAAP reconciliation.

Contacts:		Peter J. Johnson, President and CEO (406) 457-4006 Laura F. Clark, EVP and CFO (406) 457-4007

FAQ

What was Eagle Bancorp Montana's net income for Q2 2021?

Eagle Bancorp Montana reported a net income of $2.7 million for Q2 2021.

What is the new dividend amount for Eagle Bancorp Montana?

The new dividend amount is $0.125 per share, reflecting a 28% increase.

When is the dividend payable for Eagle Bancorp Montana?

The dividend will be payable on September 3, 2021.

How did Eagle Bancorp Montana's total deposits change in Q2 2021?

Total deposits increased by 19.9% to $1.15 billion in Q2 2021.

What was the impact of mortgage loans on Eagle Bancorp Montana's revenues?

Revenues decreased to $22.6 million, primarily due to lower contributions from gains on mortgage loan sales.