HELENA, Mont., April 29, 2016 (GLOBE NEWSWIRE) -- Eagle Bancorp Montana, Inc. (NASDAQ:EBMT), (the “Company,” “Eagle”), the holding company of Opportunity Bank of Montana, today reported net income increased 113% to $823,000, or $0.21 per diluted share, in the first quarter of 2016, compared to $386,000, or $0.10 per diluted share, in the first quarter a year ago.  In the preceding quarter, Eagle earned $881,000, or $0.22 per diluted share. 

“We are pleased with the continuing improvements in our first quarter financial results with exceptional growth in our loan portfolio and solid growth in commercial loans,” said Peter J. Johnson, President and CEO.  “We will continue to focus our efforts on gathering core deposits, growing the loan portfolio and expanding our customer base across all of our markets in Montana.  Our bank and brand are well positioned to prosper in the coming year, supported by growing technology, manufacturing and tourism throughout the state.”

Eagle’s board of directors declared a regular quarterly cash dividend of $0.0775 per share.  The dividend will be payable June 3, 2016 to shareholders of record May 13, 2016. The current annualized yield is 2.51% at recent market prices.

First Quarter 2016 Highlights (at or for the three month period ended March 31, 2016, except where noted)

• Net income more than doubled to $823,000, or $0.21 per diluted share in the first quarter, compared to $386,000, or $0.10 per diluted share in the same period a year ago.
• Pretax profits increased 131% to $975,000 in the first quarter of 2016 from $422,000 in the year ago quarter and grew 19.8% from $814,000 the fourth quarter of 2015.
• Revenues (net interest income before the provision for loan losses, plus non-interest income) increased 12.2% to $8.0 million compared to $7.1 million in the same period a year ago. 
• Net interest margin improved 15 basis points to 3.50% in the first quarter, compared to 3.35% in the same period a year earlier.
• Total loans increased 25.7% to $422.9 million compared to $336.4 million a year earlier. 
• Commercial real estate loans increased 49.2% to $194.5 million at March 31, 2016, compared to $130.4 million a year earlier.
• Total deposits increased 9.00% to $494.2 million at March 31, 2016, from $453.4 million a year earlier.
• Capital ratios remain strong with a tangible shareholders equity ratio of 10.07% at March 31, 2016.
• Declared a quarterly cash dividend of $0.0775 per share, providing a 2.51% current yield at recent market prices.

Balance Sheet Results

Total loans increased 3.8% to $422.9 million at March 31, 2016, compared to $407.3 million three months earlier and increased 25.7% compared to $336.4 million a year earlier.  “Loan growth was steady during the quarter, although not as fast-paced as in previous quarters,” noted Johnson.  “Our loan pipeline is heavily concentrated in C&I and commercial real estate loans.”

Eagle originated $55.8 million in new residential mortgages during the quarter, excluding construction loans, and sold $52.1 million in residential mortgages, with an average gross margin on sale of mortgage loans of approximately 3.38%.  This production compares to residential mortgage originations of $63.5 million in the preceding quarter with sales of $54.1 million.

Commercial real estate loans increased 49.2% to $194.5 million at March 31, 2016, compared to $130.4 million a year earlier, while residential mortgage loans increased 7.5% to $113.4 million compared to $105.4 million a year earlier.  Home equity loans increased 12.6% to $45.4 million, commercial loans increased 10.1% to $40.6 million, and construction loans increased 52.0% to $15.7 million, compared to a year ago.  

Eagle’s total deposits increased 9.0% to $494.2 million at March 31, 2016, compared to $453.4 million a year earlier and were up 2.3% compared to $483.2 million at December 31, 2015.  As of the end of March, checking and money market accounts represent 54.3%, savings accounts represent 15.1%, and CDs comprise 30.6% of the total deposit portfolio.  

Total assets increased 14.9% to $643.0 million at March 31, 2016, compared to $559.4 million a year earlier, and increased 2.0% compared to $630.3 million three months earlier.  Shareholders’ equity improved to $56.7 million at March 31, 2016, compared to $55.5 million three months earlier and $54.8 million one year earlier.  Tangible book value was $13.01 per share at March 31, 2016, compared to $12.67 per share at December 31, 2015 and $12.34 per share a year earlier. 

Credit Quality

Eagle’s first quarter provision for loan losses was $450,000, compared to $343,000 in the preceding quarter and $322,000 in the first quarter a year ago.  As of March 31, 2016, the allowance for loan losses represented 168.7% of nonperforming loans compared to 139.3% three months earlier and 1,177.1% a year earlier.  At March 31, 2016 nonperforming loans (NPLs) were $2.3 million, compared to $2.5 million three months earlier, and $223,000 a year ago.   

Eagle’s net charge-offs totaled $60,000 in the first quarter, compared to $23,000 in the preceding quarter and $147,000 in the first quarter a year ago.  The allowance for loan losses was $3.9 million, or 0.93% of total loans at March 31, 2016, compared to $3.6 million, or 0.88% of total loans at December 31, 2015, and $2.6 million, or 0.78% of total loans a year ago.

OREO and other repossessed assets was $606,000 at March 31, 2016, which was up slightly compared to $595,000 at December 31, 2015.  Nonperforming assets (NPAs), consisting of nonperforming loans, OREO and other repossessed assets, loans delinquent 90 days or more, and restructured loans, were $2.9 million at March 31, 2016, or 0.46% of total assets, compared to $3.1 million, or 0.50% of total assets three months earlier and $865,000, or 0.15% of total assets a year earlier. 

Operating Results

Eagle’s first quarter revenues increased 5.5% to $8.0 million compared to $7.6 million in the preceding quarter and increased 12.2% compared to $7.1 million in the first quarter a year ago.  Net interest income before the provision for loan loss increased 4.7% to $5.1 million in the first quarter compared to $4.9 million in the preceding quarter and increased 20.6% compared to $4.2 million in the first quarter a year ago. 

“Our solid first quarter net interest margin was a result of our strong interest income growth, which has more than surpassed the additional interest expense from the subordinated debt issuance in the middle of 2015,” Johnson said.  Eagle’s net interest margin was 3.50% in the first quarter compared to 3.41% in the preceding quarter and 3.35% in the first quarter a year ago.  Funding costs for the quarter were up 13 basis points while asset yields increased 28 basis points compared to a year ago.  The investment securities portfolio decreased to $145.1 million at March 31, 2016, compared to $152.2 million a year ago, which increased average yields on earning asset balances moderately.  

Eagle’s noninterest income was $2.9 million in the first quarter, which was unchanged compared to the year ago quarter, and a 6.9% increase compared to $2.7 million in the preceding quarter. First quarter noninterest expenses were $6.5 million, compared to $6.4 million in both the preceding quarter and the year ago quarter. 

Capital Management

Eagle Bancorp Montana continues to be well capitalized with the ratio of shareholders’ equity to tangible asset of 10.07% at March 31, 2016.  (Shareholders’ equity, plus trust preferred securities and subordinated debt, less goodwill and core deposit intangible to tangible assets).

During the second quarter of 2015, Eagle issued $10.0 million in subordinated debt.  The subordinated notes were issued on June 19, 2015, bear a fixed rate of interest of 6.75% per annum, payable quarterly, and mature on June 19, 2025.  The net cash proceeds from the sale of the subordinated notes were $9.9 million, and the subordinated notes qualify as Tier 2 capital for regulatory purposes.  The net proceeds from the offering are being used for general corporate purposes, to support organic growth and fund acquisitions should appropriate opportunities arise.

About the Company

Eagle Bancorp Montana, Inc. is a bank holding company headquartered in Helena, Montana and is the holding company of Opportunity Bank, a community bank established in 1922 that serves consumers and small businesses in Southern Montana through 13 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 Select 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," "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, 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, either nationally or in our market areas, that are worse than expected; competition among depository and other financial institutions; loan demand or residential and commercial real estate values in Montana; 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; and other economic, governmental, competitive, regulatory and technological factors that may affect our operations. 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.

 

Balance Sheet
(Dollars in thousands, except per share data)						(Unaudited)			(Audited)			(Unaudited)
						March 31,			December 31,			March 31,
							2016			2015			2015
Assets:
	Cash and due from banks					$	5,620		$	6,468		$	3,506
	Interest-bearing deposits with banks						993			970			1,244
		Total cash and cash equivalents					6,613			7,438			4,750
	Securities available-for-sale, at market value						145,070			145,738			152,239
	FHLB stock, at cost						3,564			3,397			1,967
	FRB stock						871			887			641
	Investment in Eagle Bancorp Statutory Trust I						155			155			155
	Loans held-for-sale						18,284			18,702			17,021
	Loans:
		Residential mortgage (1-4 family)					113,364			118,133			105,428
		Commercial loans					40,614			39,072			36,877
		Commercial real estate					194,479			167,930			130,374
		Construction loans					15,673			22,958			10,313
		Consumer loans					14,229			14,641			13,664
		Home equity					45,404			45,345			40,312
		Unearned loan fees					(882	)		(795	)		(553	)
			Total loans				422,881			407,284			336,415
	Allowance for loan losses						(3,940	)		(3,550	)		(2,625	)
		Net loans					418,941			403,734			333,790
	Accrued interest and dividends receivable						2,213			2,278			2,146
	Mortgage servicing rights, net						4,988			4,968			4,271
	Premises and equipment, net						18,145			18,217			19,694
	Cash surrender value of life insurance						12,598			12,514			11,816
	Real estate and other assets acquired in settlement of loans, net						606			595			642
	Goodwill						7,034			7,034			7,034
	Core deposit intangible						481			514			625
	Other assets						3,408			4,176			2,574
		Total assets				$	642,971		$	630,347		$	559,365
Liabilities:
	Deposit accounts:
	Noninterest bearing						90,308			77,031			66,547
	Interest bearing						403,877			406,151			386,822
		Total deposits					494,185			483,182			453,369
	Accrued expense and other liabilities						5,933			4,050			3,380
	FHLB advances and other borrowings						71,204			72,716			42,640
	Subordinated debentures, net						14,954			14,949			5,155
		Total liabilities					586,276			574,897			504,544
Shareholders' Equity:
	Preferred stock (no par value; 1,000,000 shares authorized;
	none issued or outstanding)						-			-			-
	Common stock (par value  $0.01; 8,000,000 shares authorized;
	4,083,127 shares issued; 3,779,464, 3,779,464, and 3,822,981 shares outstanding
	at March 31, 2016, December 31, 2015 and March 31, 2015, respectively)						41			41			41
	Additional paid-in capital						22,157			22,152			22,126
	Unallocated common stock held by employee stock ownership plan (ESOP)						(933	)		(975	)		(1,099	)
	Treasury stock, at cost (303,663, 303,663 and 260,146 shares at
	March 31, 2016, December 31, 2015 and March 31, 2015, respectively)						(3,321	)		(3,321	)		(2,810	)
	Retained earnings						37,831			37,301			35,983
	Accumulated other comprehensive income						920			252			580
		Total shareholders' equity					56,695			55,450			54,821
		Total liabilities and shareholders' equity				$	642,971		$	630,347		$	559,365

 

Income Statement										(Unaudited)
(Dollars in thousands, except per share data)							Three Months Ended
							March 31,			December 31,			March 31,
								2016			2015			2015
Interest and dividend Income:
	Interest and fees on loans						$	5,063		$	4,725		$	3,962
	Securities available-for-sale							747			803			759
	FRB and FHLB dividends							31			42			-
	Interest on deposits with banks							-			-			-
	Other interest income							3			-			3
		Total interest and dividend income						5,844			5,570			4,724
Interest Expense:
	Interest expense on deposits							355			364			337
	Advances and other borrowings							201			149			143
	Subordinated debentures							194			191			21
		Total interest expense						750			704			501
Net interest income								5,094			4,866			4,223
Loan loss provision								450			343			322
		Net interest income after loan loss provision						4,644			4,523			3,901
Noninterest income:
	Service charges on deposit accounts							199			226			223
	Net gain on sale of loans							1,718			1,546			1,631
	Mortgage loan servicing fees							346			358			415
	Wealth management income							136			155			185
	Interchange and ATM fees							202			144			126
	Appreciation in cash surrender value of life insurance							112			110			105
	Net gain on sale of available-for-sale securities							-			-			186
	Net loss on sale of OREO							-			(4	)		-
	Net loss on fair value hedge							-			-			(93	)
	Other noninterest income							166			157			104
		Total noninterest income						2,879			2,692			2,882
Noninterest expense:
	Salaries and employee benefits							3,690			3,672			3,379
	Occupancy and equipment expense							789			681			736
	Data processing							548			654			509
	Advertising							188			237			219
	Amortization of mortgage servicing fees							228			159			217
	Amortization of core deposit intangible and tax credits							112			115			100
	Federal insurance premiums							83			81			95
	Postage							54			29			46
	Legal, accounting and examination fees							98			105			156
	Consulting fees							83			53			240
	Other noninterest expense							675			615			664
		Total noninterest expense						6,548			6,401			6,361
Income before income taxes								975			814			422
Income tax provision (benefit)								152			(67	)		36
Net income							$	823		$	881		$	386
Basic earnings per share							$	0.22		$	0.23		$	0.10
Diluted earnings per share							$	0.21		$	0.22		$	0.10
Weighted average shares
	outstanding (basic EPS)							3,779,464			3,781,023			3,844,617
Weighted average shares
	outstanding (diluted EPS)							3,873,171			3,855,095			3,881,872

 

Financial Ratios and Other Data
(Dollars in thousands, except per share data)
(Unaudited)			March 31			December 31			March 31
				2016			2015			2015
Asset Quality:
	Nonaccrual loans		$	1,580		$	2,030		$	176
	Loans 90 days past due			710			472			-
	Restructured loans, net			45			46			47
		Total nonperforming loans		2,335			2,548			223
	Other real estate owned and other repossessed assets			606			595			642
		Total nonperforming assets	$	2,941		$	3,143		$	865
	Nonperforming loans / portfolio loans			0.55	%		0.63	%		0.07	%
	Nonperforming assets / assets			0.46	%		0.50	%		0.15	%
	Allowance for loan losses / portfolio loans			0.93	%		0.88	%		0.78	%
	Allowance / nonperforming loans			168.74	%		139.32	%		1177.13	%
	Gross loan charge-offs for the quarter		$	63		$	32		$	148
	Gross loan recoveries for the quarter		$	3		$	9		$	1
	Net loan charge-offs for the quarter		$	60		$	23		$	147
Capital Data (At quarter end):
	Tangible book value per share		$	13.01		$	12.67		$	12.34
	Shares outstanding			3,779,464			3,779,464			3,822,981
Profitability Ratios (For the quarter):
	Efficiency ratio*			80.72	%		83.17	%		88.12	%
	Return on average assets			0.52	%		0.57	%		0.28	%
	Return on average equity			5.80	%		6.39	%		2.82	%
	Net interest margin			3.50	%		3.41	%		3.35	%
Profitability Ratios (Year-to-date):
	Efficiency ratio *			80.72	%		84.96	%		88.12	%
	Return on average assets			0.52	%		0.44	%		0.28	%
	Return on average equity			5.80	%		4.77	%		2.82	%
	Net interest margin			3.50	%		3.38	%		3.35	%
Other Information
	Average total assets for the quarter		$	631,998		$	621,808		$	550,980
	Average total assets year to date		$	631,998		$	583,658		$	550,980
	Average earning assets for the quarter		$	581,594		$	570,302		$	503,894
	Average earning assets year to date		$	581,594		$	533,261		$	503,894
	Average loans for the quarter **		$	428,408		$	415,332		$	339,007
	Average loans year to date **		$	428,408		$	374,849		$	339,007
	Average equity for the quarter		$	56,767		$	55,170		$	54,847
	Average equity year to date		$	56,767		$	54,051		$	54,847
	Average deposits for the quarter		$	480,255		$	478,559		$	445,655
	Average deposits year to date		$	480,255		$	465,276		$	445,655
* The efficiency ratio is a non-GAAP ratio that is calculated by dividing non-interest expense, exclusive of
intangible asset amortization, by the sum of net interest income and non-interest income.
** includes loans held for sale

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