Eagle Bancorp Montana Earns $3.2 Million, or $0.41 per Diluted Share, in the Second Quarter of 2025; Increases Quarterly Cash Dividend to $0.145 Per Share

HELENA, Mont., July 29, 2025 (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 $3.2 million, or $0.41 per diluted share, in the second quarter of 2025, compared to $3.2 million, or $0.41 per diluted share, in the preceding quarter, and $1.7 million, or $0.22 per diluted share, in the second quarter of 2024. In the first six months of 2025, net income increased to $6.5 million, or $0.83 per diluted share, compared to $3.6 million, or $0.46 per diluted share, in the first six months of 2024.

Eagle’s board of directors declared a quarterly cash dividend of $0.145 per share on July 24, 2025. The dividend will be payable September 5, 2025, to shareholders of record August 15, 2025. The current dividend represents an annualized yield of 3.32% based on recent market prices.

“We delivered strong financial results for the second quarter of 2025, marked by growth in both loans and deposits, as well as continued expansion in our net interest margin,” said Laura F. Clark, President and CEO. “Our efforts to strengthen the balance sheet and expand our community banking presence throughout Montana are yielding results, supported by a stable core deposit base and a diversified loan portfolio. Despite the ongoing impact of market volatility and interest rate fluctuations, we remain well-positioned within our markets to drive sustainable growth throughout the remainder of the year.”

Second Quarter 2025 Highlights (at or for the three-month period ended June 30, 2025, except where noted):

• Net income was $3.2 million, or $0.41 per diluted share, in the second quarter of 2025, which is consistent with the preceding quarter, and compared to $1.7 million, or $0.22 per diluted share, in the second quarter a year ago.

• Net interest margin (“NIM”) was 3.91% in the second quarter of 2025, a 17-basis point increase compared to 3.74% in the preceding quarter and a 50-basis point increase compared to the second quarter a year ago.

• Net interest income, before the provision for credit losses, increased 7.4% to $18.1 million in the second quarter of 2025, compared to $16.9 million in the first quarter of 2025, and increased 16.1% compared to $15.6 million in the second quarter of 2024.

• Revenues (net interest income before the provision for credit losses, plus noninterest income) increased 9.7% to $23.0 million in the second quarter of 2025, compared to $20.9 million in the preceding quarter and increased 15.3% compared to $19.9 million in the second quarter a year ago.

• Total loans increased 3.4% to $1.57 billion, at June 30, 2025, compared to $1.52 billion a year earlier, and increased 3.0% compared to $1.52 billion at March 31, 2025.

• The allowance for credit losses represented 1.13% of portfolio loans and 348.8% of nonperforming loans at June 30, 2025, compared to 1.11% of total portfolio loans and 330.8% of nonperforming loans at June 30, 2024, and compared to 1.10% of total portfolio loans and 313.2% of nonperforming loans at March 31, 2025.

• Total deposits increased $119.1 million or 7.4% to $1.74 billion at June 30, 2025, compared to a year earlier, and increased $48.0 million or 2.8%, compared to March 31, 2025.

• The Company’s available borrowing capacity was approximately $463.0 million at June 30, 2025, compared to $374.5 million at June 30, 2024, and $437.4 million at March 31, 2025.

• The Company repurchased 25,000 shares of the Company’s common stock in the second quarter at an average price of $16.34 per share.

• The Company paid a quarterly cash dividend in the second quarter of $0.1425 per share on June 6, 2025, to shareholders of record May 16, 2025.

Balance Sheet Results

Total assets were $2.14 billion at June 30, 2025, compared to $2.10 billion a year ago, and $2.09 billion three months earlier. The investment securities portfolio totaled $285.0 million at June 30, 2025, compared to $306.9 million a year ago, and $291.7 million at March 31, 2025.

Eagle originated $78.6 million in new residential mortgages during the quarter and sold $54.6 million in residential mortgages, with an average gross margin on sale of mortgage loans of approximately 3.81%. This production compares to residential mortgage originations of $43.2 million in the preceding quarter with sales of $42.8 million and an average gross margin on sale of mortgage loans of approximately 3.15%.

Total loans increased $52.2 million, or 3.4%, compared to a year ago, and increased $46.2 million, or 3.0%, from three months earlier. Commercial real estate loans increased 7.6% to $675.3 million at June 30, 2025, compared to $627.3 million a year earlier. Commercial real estate loans were comprised of 71.9% non-owner occupied and 28.1% owner occupied at June 30, 2025. Agricultural and farmland loans increased 13.5% to $317.3 million at June 30, 2025, compared to $279.5 million a year earlier. Residential mortgage loans decreased 6.3% to $147.1 million, compared to $157.1 million a year earlier. Commercial loans increased 6.1% to $152.3 million, compared to $143.6 million a year ago. Commercial construction and development loans decreased 26.5% to $101.0 million, compared to $137.4 million a year ago. Home equity loans increased 10.3% to $102.8 million, residential construction loans decreased 6.1% to $47.1 million, and consumer loans decreased 8.4% to $26.7 million, compared to a year ago.

"Over the past several quarters, our deposit mix has shifted toward higher-yielding deposit products, consistent with trends seen across the community banking sector in response to a sustained high interest rate environment. Following the rate cuts from the latter half of 2024, we have begun to see a moderation in deposit pricing. We anticipate this trend will continue as maturing certificates of deposit reprice at lower rates,” said Miranda Spaulding, CFO. “However, we remain cautious, as emerging inflationary pressures-including potential impacts from new tariffs and broader cost increases-could influence future interest rate policy and impact our current repricing expectations.”

Total deposits increased to $1.74 billion at June 30, 2025, compared to $1.62 billion at June 30, 2024, and $1.69 billion at March 31, 2025. Noninterest-bearing checking accounts represented 24.0%, interest-bearing checking accounts represented 11.8%, savings accounts represented 11.8%, money market accounts comprised 25.9% and time certificates of deposit made up 26.5% of the total deposit portfolio at June 30, 2025. Time certificates of deposit include $1.4 million in brokered certificates at June 30, 2025, compared to $26.2 million at June 30, 2024 and $6.2 million at March 31, 2025. The average cost of total deposits was 1.62% in the second quarter of 2025, compared to 1.67% in the preceding quarter and 1.70% in the second quarter of 2024. The estimated amount of uninsured deposits was approximately $329.0 million, or 19% of total deposits, at June 30, 2025, compared to $309.0 million, or 18% of total deposits, at March 31, 2025.

FHLB advances and other borrowings decreased to $119.4 million at June 30, 2025, compared to $215.1 million at June 30, 2024, and $125.0 million at March 31, 2025. The average cost of FHLB advances and other borrowings was 4.65% in the second quarter of 2025, compared to 4.75% in the preceding quarter and 5.47% in the second quarter of 2024.

Shareholders’ equity was $180.6 million at June 30, 2025, compared to $170.2 million a year earlier and $177.6 million three months earlier. Book value per share increased to $22.72 at June 30, 2025, compared to $21.23 a year earlier and $22.26 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, increased to $17.86 at June 30, 2025, compared to $16.25 a year earlier and $17.38 three months earlier.

Operating Results

“The combination of higher yields on interest-earning assets and a decline in our cost of funds led to a 17-basis point increase in our net interest margin this second quarter compared to the prior quarter. Given the current Fed rate environment, we expect further improvement in our funding costs moving forward,” said Spaulding.

Eagle’s NIM was 3.91% in the second quarter of 2025, a 17-basis point increase compared to 3.74% in the preceding quarter and a 50-basis point improvement compared to the second quarter a year ago. The interest accretion on acquired loans totaled $607,000 and resulted in a 13 basis-point increase in the NIM during the second quarter of 2025, compared to $172,000 and a four basis-point increase in the NIM during the preceding quarter. Average yields on interest earning assets for the second quarter of 2025 increased to 5.85%, compared to 5.76% in the first quarter of 2025 and 5.64% in the second quarter a year ago. Funding costs for the second quarter of 2025 were 2.45%, compared to 2.54% in the first quarter of 2025 and 2.78% in the second quarter of 2024. For the first six months of 2025, NIM expanded 45 basis points to 3.82% compared to 3.37% for the first six months of 2024.

Net interest income, before the provision for credit losses, increased 7.4% to $18.1 million in the second quarter of 2025, compared to $16.9 million in the first quarter of 2025, and increased 16.1% compared to $15.6 million in the second quarter of 2024. Year-to-date, net interest income increased 13.6% to $35.0 million, compared to $30.8 million in the same period one year earlier.

Revenues for the second quarter of 2025 increased 9.7% to $23.0 million, compared to $20.9 million in the preceding quarter and increased 15.3% compared to $19.9 million in the second quarter a year ago. In the first six months of 2025, revenues were $43.9 million, a 12.3% increase compared to $39.1 million in the first six months of 2024.

Total noninterest income increased 19.7% to $4.8 million in the second quarter of 2025, compared to $4.0 million in the preceding quarter, and increased 12.6% compared to $4.3 million in the second quarter a year ago. Net mortgage banking income, the largest component of noninterest income, totaled $2.9 million in the second quarter of 2025, compared to $2.1 million in the preceding quarter and $2.4 million in the second quarter a year ago. This increase compared to the preceding quarter was largely driven by an increase in net gain on sale of mortgage loans. In the first six months of 2025, noninterest income increased 7.3% to $8.8 million, compared to $8.2 million in the first six months of 2024. Net mortgage banking income increased 9.9% to $5.1 million in the first six months of 2025, compared to $4.6 million in the first six months of 2024.

Eagle’s second quarter noninterest expense was $17.9 million, an increase of 5.4% compared to $17.0 million in the preceding quarter and a 3.6% increase compared to $17.3 million in the second quarter a year ago. Higher salaries and employee benefits expense contributed to the quarter-over-quarter increase and was driven by an increase in commissions expense due to higher mortgage originations. In the first six months of 2025, noninterest expense increased 1.7% to $34.9 million, compared to $34.3 million in the first six months of 2024.

For the second quarter of 2025, the Company recorded income tax expense of $751,000. This compared to income tax expense of $631,000 in the preceding quarter and $444,000 in the second quarter of 2024. The effective tax rate for the second quarter of 2025 was 18.8%, compared to 16.3% for the first quarter of 2025 and 20.3% for the second quarter of 2024. The year-to-date effective tax rate was 17.6% for 2025 compared to 18.3% for the same period in 2024. The effective tax rate has been impacted by an increase in the proportion of tax-exempt income compared to pretax earnings, as well as tax credits from investments in low-income housing tax credit projects.

Credit Quality

During the second quarter of 2025, Eagle recorded a $1.0 million provision for credit losses. This compared to a $42,000 provision for credit losses in the preceding quarter and a $412,000 provision for credit losses in the second quarter a year ago. The allowance for credit losses represented 348.8% of nonperforming loans at June 30, 2025, compared to 313.2% three months earlier and 330.8% a year earlier. Nonperforming loans were $5.1 million at June 30, 2025, $5.3 million at March 31, 2025, and $5.1 million a year earlier. Net loan charge-offs totaled $48,000 in the second quarter of 2025, compared to net loan charge-offs of $2,000 in both the preceding quarter and in the second quarter a year ago. The allowance for credit losses was $17.7 million, or 1.13% of total loans, at June 30, 2025, compared to $16.7 million, or 1.10% of total loans, at March 31, 2025, and $16.8 million, or 1.11% of total loans, a year ago.

Capital Management

The Bank’s Tier 1 capital to adjusted total average assets was 10.34% as of June 30, 2025. 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) was 6.77% at June 30, 2025, up from 6.33% a year ago and unchanged compared to three months earlier. This ratio is a non-GAAP financial measure. For the most comparable GAAP financial measure, see “Reconciliation of Non-GAAP Financial Measures” below. As of June 30, 2025, the Bank’s regulatory capital was in excess of all applicable regulatory requirements and is deemed well capitalized.

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 30 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, expectations and anticipations; 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 steps taken by governmental and other authorities to contain, mitigate and combat such emergencies or pandemics; the impact of volatility in the U.S. banking industry, including the associated impact of any regulatory changes or other mitigation efforts taken by governmental agencies in response thereto; the impact of any new regulatory, policy or enforcement developments resulting from the change in U.S. presidential administration, including the implantation of tariffs and other protectionist trade policies; 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 banks, financial holding companies and other traditional and non-traditional financial service providers; 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; possible changes in governmental monetary and fiscal policies, or any leadership changes of those determining such policies; 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; the effects of any U.S. federal government shutdown, or closures or significant staff reductions in agencies regulating our business; our ability to navigate differing social, environmental, and sustainability concerns among governmental administrations, our stakeholders and other activists 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, this release, including 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 and 3) tangible common equity to tangible assets. The Company uses these non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance, performance trends and financial condition, 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. Eagle strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Reconciliation of the GAAP and non-GAAP financial measures are presented below.