Eagle Bancorp Montana, Inc. · NASDAQ:EBMT
Eagle Bancorp Montana — Debt Investor Presentation (January 2022)
47 slides from Eagle Bancorp Montana's debt investor presentation, Jan 24, 2022
Slide 1: Private Placement Offering Subordinated Notes
January 2022 Eagle Bancorp Montana, Inc. ( NASDAQGM: EBMT ) Private Placement Offering Subordinated Notes CONFIDENTIAL
Slide 2: Notice to Recipients
Notice to Recipients 2 This confidential presentation (this “Presentation”) has been prepared solely for general informational purposes by Eagle Ban cor p Montana, Inc. ("Eagle," the “Company,” the “holding company,” “we” or “our”), a financial holding company under the Bank Holding Company Act, and
Slide 3: Offering Disclaimer
Offering Disclaimer This Presentation has been prepared based on information regarding operations of the Company and the Bank, as well as informa tio n from public sources. The information in this Presentation is confidential and may not be reproduced or redistributed, passed on or divulged, directl
Slide 4: Table of Contents
Table of Contents Executive Summary 5 I EBMT’s Acquisition of First Community Bancorp, Inc. 14 II Experienced Management Team 19 III Assets Highlights 21 IV Liabilities Highlights 30 V Capital Highlights 34 VI Income Statement Highlights 37 VII 4 Appendix 43 VIII
Slide 5: I. Executive Summary
I. Executive Summary 5
Slide 6: Terms of the Offered Securities
Terms of the Offered Securities 6 Issuer: Eagle Bancorp Montana, Inc., the financial holding company of Opportunity Bank of Montana (the "Bank") Market / Ticker Symbol: NASDAQGM: EBMT Security: Fixed - to - Floating Rate Subordinated Debt Principal Amount : $40 million Offering Type: Regulation D Pr
Slide 7: Opportunity Bank of Montana Overview
Opportunity Bank of Montana Overview Source: S&P Capital IQ, Company - provided documents, EBMT Q3’21 Earnings Release (1) One office is a deposit production office only (2) See page 47 for non - GAAP reconciliation information Note: EBMT financial metrics for 2016 to 2021 Note: Franchise Map includ
Slide 8: Principal Markets Overview
8 Principal Markets Overview Source: (1) realtor.com, (2) S&P Capital IQ, (3) U.S. Bureau of Labor Statistics, (4) livability.com, (5) mthightech.org, (6) ne ws.mt.gov, (7) bigskyresort.com, (8) fred.stlouisfed.org Helena | Bozeman | Billings MSA MSA Market Overview Billings MSA 0.0 50.0 100.0 150.0
Slide 9: Investment Highlights
Investment Highlights Source: S&P Capital IQ, Company - provided documents, EBMT Form 8 - K, FDIC Note: Bank - level financial metrics shown; financial information pro forma the acquisition is provided by the Company and not pub licly reported (1) Net non - interest expense defined as non - interest
Slide 10: Pro Forma Regulatory Capital
$157,229 $10,000 $15,000 $5,000 $12,200 $157,229 $15,000 $5,000 $40,000 $12,200 Common Equity Tier 1 Capital Senior Debt Existing Sub Debt Trust Preferred New Sub Debt ALLL Pro Forma Bank Level Pro Forma Regulatory Capital 09/30/21 Common Equity Before Adjustments 218,978$ Less: Goodwill & Intangibl
Slide 11: Debt Service Coverage Ratio
Debt Service Coverage Ratio 11 ($ in thousands) Interest Coverage 2020Y Q3' 21 YTD Ann. 2022 Projected Consolidated Pre-Tax Earnings Consolidated Pre-Tax Income 28,440 22,564 25,604 Debt Expense (1) 1,690 1,557 1,674 A Pre-Tax Earnings Before BHC Debt Interest Expense 30,130 24,121 27,278 BHC Debt I
Slide 12: Opportunity Bank of Montana Risk Analysis – Q3 '21 PT Score
Opportunity Bank of Montana Risk Analysis – Q3 ’21 PT Score TM Source: Performance Trust PT Score TM Note: PT Score TM Overview using September 30, 2021 financial data Note : PT Score Ρ is a proprietary risk assessment system created using numerous call report based ratios selected by Performance Tr
Slide 13: Relative Risk Analysis – PT Score Pro Forma
Relative Risk Analysis – PT Score TM Pro Forma Source: Performance Trust PT Score TM Note: PT Score TM using September 30, 2021 financial data Note: The PT Score TM Simulator does not consider realized gain on the sale of loans in the 2022 and 2023 earnings composite score projections. As this is a
Slide 14: II. EBMT's Acquisition of First Community Bancorp, Inc.
II. EBMT’s Acquisition of First Community Bancorp, Inc. 14
Slide 15: Eagle's Acquisition of First Community Bancorp, Inc.
Eagle’s Acquisition of First Community Bancorp, Inc. Source: EBMT Form 8 - K, EBMT Form S - 4, S&P Capital IQ Note: No assurances can be given that the acquisition will be completed (1) Bank - level financial metrics derived from Bank call reports (2) Based on EBMT closing price of $22.25 as of Sept
Slide 16: Pro Forma Loan & Deposit Composition
Pro Forma Loan & Deposit Composition Source: S&P Capital IQ, EBMT Form 8 - K, Company - provided financials Note: Financial information as of September 30, 2021 16 Deposits Loans Pro Forma $927M $212M $1.1B Total Loans Total Loans Total Loans Loans ($000) Loans ($000) Loans ($000) 1-4 Family Residen
Slide 17: First Community Bank Risk Analysis – Q3 '21 PT Score
First Community Bank Risk Analysis – Q3 ’21 PT Score TM Source: Performance Trust PT Score TM Note: PT Score TM Overview using September 30, 2021 financial data Note : PT Score Ρ is a proprietary risk assessment system created using numerous call report based ratios selected by Performance Trust . P
Slide 18: An Expanding Franchise
An Expanding Franchise Source: EBMT Form 8 - K, S&P Capital IQ Note: EBMT Non - Acquired Assets shown Note: Bank - level financial information for acquired companies and branches at closing or most recent quarter 18 $200 $213 $238 $251 $287 $306 $333 $332 $516 $560 $630 $674 $717 – $200 $400 $600 $8
Slide 19: III. Experienced Management Team
III. Experienced Management Team 19
Slide 20: Experienced Management Team
Experienced Management Team Source: Company - provided biographies 20 Peter J. Johnson – President, CEO & Director Peter J . Johnson has served as President and CEO of the Company since December 2009 . He has also served as President of the Bank since July 2007 and CEO since November 2007 . Prior to
Slide 21: IV. Assets Highlights
IV. Assets Highlights 21
Slide 22: Measured Bank Balance Sheet Growth
$521 $628 $809 $1,038 $1,198 – $400 $800 $1,200 $1,600 2017Y 2018Y 2019Y 2020Y Q3'21 $522 $624 $805 $895 $927 – $300 $600 $900 $1,200 2017Y 2018Y 2019Y 2020Y Q3'21 $92 $106 $130 $169 $177 – $60 $120 $180 $240 2017Y 2018Y 2019Y 2020Y Q3'21 $702 $844 $1,039 $1,246 $1,401 – $400 $800 $1,200 $1,600 2017
Slide 23: Investment Portfolio Composition & Performance
Investment Portfolio Composition & Performance Portfolio Management Statistics Asset Class Breakdown • The securities portfolio largely consists of state & municipality and residential mortgage - backed securities • Historical investment portfolio total returns (1) : • 1 year: 1.17%, 80 th percentil
Slide 24: Loan Portfolio Diversification & Growth
$522 $624 $805 $895 $927 $- $300 $600 $900 $1,200 2017Y 2018Y 2019Y 2020Y Q3'21 Loan Portfolio Diversification & Growth Source: S&P Capital IQ, Company - provided documents Note: *Assumes increase in Total Risk - Based Capital of $5mm (1) Total CRE (Ex owner - occupied) includes Non Owner - Occupied
Slide 25: Historical Bank Loan Composition & Yields
Historical Bank Loan Composition & Yields Source: S&P Capital IQ Note: 9/30/2021 yields for the nine months ended September 30, 2021 Opportunity Bank of Montana Loan Composition Since 2017 12/31/2017 12/31/2018 12/31/2019 12/31/2020 09/30/2021 Loan Composition Balance % of Total Balance % of Total B
Slide 26: COVID-Modified Loan Update
COVID - 19 Modified Loan Update 26 Source: EBMT Q3’21 Earnings Release ▪ 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 (5.39%), health care and social assistance
Slide 27: Bank Loan Detail by Industry
Bank Loan Detail by Industry 27 Source: Company - provided Bank Industry Concentration Analysis as of September 30, 2021 Note: Total unimpaired capital of $163.5MM as of September 30, 2021 Industry Net Book Balance Total Exposure Balance % of Total Unimpaired Capital Exposure % of Total Unimpaired C
Slide 28: Bank Non-performing Assets Details
Farm 37% All Other Loans 24% 1 - 4 Family 15% C&I 9% Non - Owner Occ. CRE 8% Constr & Land Dev 5% Consumer 1% Bank Non - performing Assets Details Source: S&P Capital IQ Bank Non - Accrual Loans by Type Bank Commentary Asset Quality Detail as of September 30, 2021: • OREO / Assets of 0.01% • Accruin
Slide 29: Bank Asset Quality & Reserve Coverage Ratios
Bank Asset Quality & Reserve Coverage Ratios Source: S&P Capital IQ Note: “2021YTD” for the nine months ended September 30, 2021 (1) Total loans excludes PPP loans Loan Loss Reserves / NPLs NCOs / Avg. Loans Loan Loss Reserves / Total Loans NPAs / Assets 29 0.21% 0.28% 0.35% 0.65% 0.56% 0.00% 0.50%
Slide 30: V. Liabilities Highlights
V. Liabilities Highlights 30
Slide 31: Bank Deposit Growth & Composition
Bank Deposit Growth & Composition Source: S&P Capital IQ Note: Financial information as of September 30, 2021 Noninterest Bearing Deposits /Total Deposits (%) Bank Regulatory Deposit Composition 19.2% 22.8% 24.7% 30.7% 30.7% 0% 5% 10% 15% 20% 25% 30% 35% 2017Y 2018Y 2019Y 2020Y Q3'21 31 $1.2B $1.2B
Slide 32: Regional Deposit Information by MSA
Regional Deposit Information by MSA Source: S&P Capital IQ, FDIC deposit information as of June 30, 2021 Note: Deposit market share data does not include credit unions Helena, MT 2021 2021 2021 2021 Deposits Market Rank Institution (ST) Branches ($000s) Share (%) 1 Glacier Bancorp Inc. (MT) 6 570,73
Slide 33: Regional Deposit Information by MSA (Con't)
Regional Deposit Information by MSA ( Con’t ) Source: S&P Capital IQ, FDIC deposit information as of June 30, 2021 Note: Deposit market share data does not include credit unions Billings, MT 2021 2021 2021 2021 Deposits Market Rank Institution (ST) Branches ($000s)Share (%) 1 First Interstate BancSy
Slide 34: VI. Capital Highlights
VI. Capital Highlights 34
Slide 35: Bank Capital Ratios
11.13% 10.89% 10.90% 11.01% 11.95% 11.83% 10.73% 10.23% 9.02% 9.36% 12.96% 13.19% 8.47% 8.58% 8.62% 9.36% 9.23% 12.17% 11.22% 11.08% 11.72% 11.25% 19.14% 19.47% 20.42% 18.52% 18.77% 16.99% 15.34% 14.46% 12.88% 13.45% 19.59% 20.05% 15.91% 15.20% 13.59% 14.09% 14.05% 17.41% 16.02% 15.23% 16.71% 15.83%
Slide 36: Historical Bank Regulatory Capital Ratios
Historical Bank Regulatory Capital Ratios Source: S&P Capital IQ (1) 12 CFR † 324.403 (b)(1)( i ) Tier 1 Risk - Based Ratio CET1 Ratio Total Risk - Based Ratio Tier 1 Leverage Ratio 36 9.23% 12.17% 11.22% 11.08% 11.72% 11.25% 4.00% 8.00% 12.00% 16.00% 2016Y 2017Y 2018Y 2019Y 2020Y Q3'21 Well - Capit
Slide 37: VII. Income Statement Highlights
VII. Income Statement Highlights 37
Slide 38: Bank Core Net Revenue Detail
Bank Core Net Revenue Detail Source: S&P Capital IQ Note: “2021YTD” for the nine months ended September 30, 2021 *2021YTD values shown on an annualized basis for comparative purposes. 38 $36,067 $38,203 $43,228 $63,745 $91,229 $96,837 $26,351 $28,368 $33,315 $43,327 $57,748 $71,247 $14,312 $12,973 $
Slide 39: Bank Net Interest Income & Net Interest Margin
Bank Net Interest Income & Net Interest Margin Source: S&P Capital IQ Note: “2021YTD” for the nine months ended September 30, 2021 *2021YTD NII and NIM values shown on an annualized basis for comparative purposes. $25,230 $31,193 $40,369 $45,088 $47,829 3.98% 4.23% 4.48% 4.22% 4.09% 0.00% 1.00% 2.00
Slide 40: Bank Profitability & Expense Controls
Bank Profitability & Expense Controls 73.0% 75.4% 67.1% 61.8% 74.0% 4.12% 4.07% 4.35% 4.83% 5.42% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 0.0% 15.0% 30.0% 45.0% 60.0% 75.0% 90.0% 2017Y 2018Y 2019Y 2020Y 2021YTD* Noninterest Expense / Avg. Assets Efficiency Ratio Efficiency Ratio Noninterest Expens
Slide 41: Bank Net Interest Margin vs. Net Noninterest Expense
Bank Net Interest Margin vs. Net Noninterest Expense Source: S&P Capital IQ 4.06% 4.13% 4.27% 4.15% 4.01% 4.10% 0.77% 0.39% 1.23% 1.19% 2.31% 1.56% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 Net Interest Margin Net Noninterest Expense /Avg. Assets Net NIE / AA = (N
Slide 42: Asset-Liability Management Profile
Asset - Liability Management Profile Source: Company - provided information; ALCO profile as of June 30, 2021 42 Net Interest Income Sensitivity Profile Interest Rate Scenario -100 Base 200 Net Interest Income Change - Year 1 -0.99% 0.00% 2.22% Net Interest Income Change - Year 2 -4.43% 0.00% 8.15%
Slide 43: VIII. Appendix
VIII. Appendix 43
Slide 44: Bank Regulatory Financial Highlights
Bank Regulatory Financial Highlights Source: S&P Capital IQ Note: Bank regulatory metrics shown 12/31/2017 For the Years Ended: For the Quarters Ended: 9/30/2021 12/31/2017 12/31/2018 12/31/2019 12/31/2020 9/30/2020 12/31/2020 3/31/2021 6/30/2021 9/30/2021 CAGR Balance Sheet Total Assets ($000) 701,
Slide 45: Historical Consolidated Balance Sheet
Historical Consolidated Balance Sheet Source: Audited financial statements for 2018 to 2020; Company - provided 2021 financials (unaudited) At December 31, At September 30, (dollars shown in thousands) 2018 2019 2020 2021 Assets Cash & due from banks 10,144$ 18,094$ 14,455$ 16,320$ Interest-bearing
Slide 46: Historical Consolidated Income Statement
Historical Consolidated Income Statement Source: Audited financial statements for 2018 to 2020; Company - provided 2021 financials (unaudited) 46 For the Nine Months Ended September 30, (dollars shown in thousands) 2018 2019 2020 2021 Total Interest Income 34,843$ 46,511$ 49,654$ 36,933$ Total Inter
Slide 47: Non-GAAP Financial Measures
Non - GAAP Financial Measures 47 At December 31, September 30, Consolidated Tangible Common Equity 2016 2017 2018 2019 2020 2021 Total Common Equity $59,456 $83,616 $94,806 $121,659 $152,938 $156,523 Total Intangible Assets 7,418 7,307 13,622 18,622 23,141 22,717 Tangible Common Equity 52,038 76,309
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