HELENA, Mont., Jan. 26, 2017 (GLOBE NEWSWIRE) -- Eagle Bancorp Montana, Inc. (NASDAQ:EBMT), (the “Company,” “Eagle”), the holding company of Opportunity Bank of Montana, today reported net income increased 98.9% to $5.1 million, or $1.32 per diluted share, in 2016, compared to $2.6 million, or $0.67 per diluted share, in 2015.  For the fourth quarter of 2016, net income increased 64.5% to $1.4 million, or $0.37 per diluted share, compared to $881,000, or $0.22 per diluted share, in the fourth quarter a year ago.  In the preceding quarter, Eagle earned a record $1.8 million, or $0.46 per diluted share.

Eagle’s board of directors declared a regular quarterly cash dividend of $0.08 per share.  The dividend will be payable March 3, 2017 to shareholders of record February 10, 2017.  The current annualized yield is 1.63% at recent market prices.

“We achieved record 2016 earnings, along with strong fourth quarter earnings of $1.4 million,” said Peter J. Johnson, President and CEO.  “We continue to produce solid loan and core deposit growth, which highlights our ability to deepen and grow customer relationships, as well as gain new customers and market share.  With steady balance sheet growth and significant and ongoing improvements in revenue generation, we are continuing to produce and retain earnings while paying appropriate dividends to increase value for our shareholders.”

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

• Net income grew 64.5% to $1.4 million, or $0.37 per diluted share in the fourth quarter, compared to $881,000, or $0.22 per diluted share in the fourth quarter a year ago.
• Revenues (net interest income before the provision for loan losses, plus non-interest income) increased 34.4% to $10.2 million compared to $7.6 million in the same period a year ago.
• Net interest margin improved 20 basis points to 3.61% compared to a year ago.
• Total loans increased 14.5% to $466.2 million at December 31, 2016, compared to $407.3 million a year earlier.
• Commercial real estate loans increased 28.0% to $214.9 million, or 46.1% of total loans at December 31, 2016, compared to $167.9 million, or 41.2% of total loans a year earlier.
• Total deposits increased 6.1% to $512.8 million at December 31, 2016, from $483.2 million a year earlier.
• Capital ratios remain strong with a tangible shareholders equity ratio of 10.03% at December 31, 2016.
• Declared quarterly cash dividend to $0.08 per share, providing a 1.63% current yield at recent market prices.

Balance Sheet Results

“The loan portfolio continues to expand, which is a reflection of the strong local economy and demand in our markets.  The commercial real estate and C&I loan segments of our loan portfolio, in particular, continue to build momentum,” said Johnson.  Total loans increased 1.0% to $466.2 million at December 31, 2016, compared to $461.5 million three months earlier and increased 14.5% compared to $407.3 million a year earlier.

Eagle originated $96.5 million in new residential mortgages during the quarter, excluding construction loans, and sold $90.6 million in residential mortgages, with an average gross margin on sale of mortgage loans of approximately 3.41%.  This production compares to residential mortgage originations of $101.2 million in the preceding quarter with sales of $95.6 million.

Commercial real estate loans increased 28.0% to $214.9 million at December 31, 2016, compared to $167.9 million a year earlier, while residential mortgage loans decreased 4.1% to $113.3 million compared to $118.1 million a year earlier.  Commercial loans increased 40.0% to $54.7 million, home equity loans increased 8.1% to $49.0 million and construction loans decreased 10.5% to $20.5 million, compared to a year ago.

Total deposits increased 6.1% to $512.8 million at December 31, 2016, compared to $483.2 million a year earlier but were down slightly compared to $515.3 million at September 30, 2016.  As of year-end, checking and money market accounts represent 51.8%, savings accounts represent 16.0%, and CDs comprise 32.2% of the total deposit portfolio.

Eagle’s total assets increased 6.9% to $673.9 million at December 31, 2016, compared to $630.3 million a year earlier and decreased slightly compared to $674.5 million three months earlier.  Shareholders’ equity was $59.5 million at December 31, 2016, compared to $60.0 million three months earlier and increased 7.2% compared to $55.5 million one year earlier.  Tangible book value was $13.65 per share at December 31, 2016, compared to $13.91 per share at September 30, 2016, and $12.67 per share a year earlier.

Operating Results

“Our 2016 net interest margin improved eight basis points to 3.46% compared to 3.38% in 2015, primarily as a result of growing both in core deposits and loans,” Johnson said.  Eagle’s net interest margin increased six basis point to 3.61% in the fourth quarter, compared to 3.55% in the preceding quarter and increased 20 basis point from 3.41% in the fourth quarter a year ago.  For the full year, Eagle’s net interest margin was 3.46% compared to 3.38% in 2015.  Funding costs for the fourth quarter were up two basis points while asset yields increased 22 basis points compared to a year ago.  The investment securities portfolio decreased to $128.4 million at December 31, 2016, compared to $145.7 million a year ago, which had a slight positive impact on the average yields on earning assets.

Fourth quarter revenues increased 33.8% to $10.2 million compared to $7.6 million in the fourth quarter a year ago, and increased modestly compared to $10.1 million in the preceding quarter.  For the year, revenues increased 23.5% to $36.8 million, compared to $29.8 million in 2015.  Net interest income before the provision for loan loss increased 2.6% to $5.6 million in the fourth quarter compared to $5.4 million in the preceding quarter, and increased 14.3% compared to $4.9 million in the fourth quarter a year ago.  For the year, net interest income increased 15.4% to $20.8 million, compared to $18.0 million in 2015.

Eagle’s noninterest income increased 70.8% to $4.6 million in the fourth quarter, compared to $2.7 million in the fourth quarter a year ago, but decreased modestly compared to $4.7 million in the preceding quarter.  For the full year, noninterest income increased 36.0% to $16.0 million compared to $11.8 million in 2015.  Mortgage servicing fees and net gain on sale of mortgage loans contributed to the growth.  Fourth quarter noninterest expenses were $7.6 million, compared to $7.2 million in the preceding quarter and $6.4 million in the year ago quarter.  Increased compensation due to additional loan production and year end benefit expenses contributed to the increase.  In 2016, noninterest expense was up modestly to $28.0 million compared to $25.7 million in 2015.

Credit Quality

Eagle’s fourth quarter provision for loan losses was $452,000, compared to $472,000 in the preceding quarter and $343,000 in the fourth quarter a year ago.  As of December 31, 2016, the allowance for loan losses represented 414.1% of nonperforming loans compared to 263.3% three months earlier and 139.3% a year earlier.  Nonperforming loans (NPLs) were $1.2 million at the end of the year, which was down 34.8% compared to $1.8 million three months earlier, and down 54.8% compared to $2.5 million a year earlier.

Fourth quarter net charge-offs totaled $332,000, compared to $82,000 in the preceding quarter and $23,000 in the fourth quarter a year ago.  The allowance for loan losses was $4.8 million, or 1.02% of total loans at December 31, 2016, compared to $4.7 million, or 1.01% of total loans at September 30, 2016, and $3.6 million, or 0.87% of total loans a year ago.

OREO and other repossessed assets was $825,000 at December 31, 2016, which was an increase compared to $513,000 at September 30, 2016.  Nonperforming assets (NPAs), consisting of nonperforming loans, OREO and other repossessed assets, loans delinquent 90 days or more, and restructured loans, improved to $2.0 million at December 31, 2016, or 0.29% of total assets, compared to $2.3 million, or 0.34% of total assets three months earlier and $3.1 million, or 0.50% of total assets a year earlier.

Capital Management

Eagle Bancorp Montana continues to be well capitalized with the ratio of shareholders’ equity to tangible asset of 10.03% at December 31, 2016.  (Shareholders’ equity, plus trust preferred securities and subordinated debt, less goodwill and core deposit intangible to tangible assets).

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 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)			(Unaudited)			(Audited)
						December 31,			September 30,			December 31,
							2016			2016			2015
Assets:
	Cash and due from banks					$	6,531		$	6,802		$	6,468
	Interest-bearing deposits with banks						787			1,029			970
		Total cash and cash equivalents					7,318			7,831			7,438
	Securities available-for-sale, at market value						128,436			133,754			145,738
	FHLB stock, at cost						4,012			3,870			3,397
	FRB stock						871			871			887
	Investment in Eagle Bancorp Statutory Trust I						155			155			155
	Loans held-for-sale						18,230			19,415			18,702
	Loans:
		Residential mortgage (1-4 family)					113,262			113,287			118,133
		Commercial loans					54,706			60,102			39,072
		Commercial real estate					214,927			205,819			167,930
		Construction loans					20,540			20,649			22,958
		Consumer loans					14,800			14,867			14,641
		Home equity					49,018			47,694			45,345
		Unearned loan fees					(1,092	)		(919	)		(795	)
			Total loans				466,161			461,499			407,284
	Allowance for loan losses						(4,770	)		(4,650	)		(3,550	)
		Net loans					461,391			456,849			403,734
	Accrued interest and dividends receivable						2,123			2,138			2,278
	Mortgage servicing rights, net						5,853			5,439			4,968
	Premises and equipment, net						19,393			19,543			18,217
	Cash surrender value of life insurance						14,095			13,996			12,514
	Real estate and other assets acquired in settlement of loans, net						825			513			595
	Goodwill						7,034			7,034			7,034
	Core deposit intangible						384			416			514
	Other assets						3,805			2,671			4,176
		Total assets				$	673,925		$	674,495		$	630,347
Liabilities:
	Deposit accounts:
	Noninterest bearing						82,877			89,242			77,031
	Interest bearing						429,918			426,035			406,151
		Total deposits					512,795			515,277			483,182
	Accrued expense and other liabilities						4,291			5,363			4,050
	FHLB advances and other borrowings						82,413			78,855			72,716
	Subordinated debentures, net						14,970			14,965			14,949
		Total liabilities					614,469			614,460			574,897
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; 3,811,409, 3,779,464, and 3,779,464 shares outstanding
	at December 31, 2016, September 30, 2016 and December 31, 2015, respectively)						41			41			41
	Additional paid-in capital						22,366			22,184			22,152
	Unallocated common stock held by employee stock ownership plan (ESOP)						(809	)		(850	)		(975	)
	Treasury stock, at cost (271,718, 303,663 and 303,663 shares at
	December 31, 2016, September 30, 2016 and December 31, 2015, respectively)						(2,971	)		(3,321	)		(3,321	)
	Retained earnings						41,240			40,096			37,301
	Accumulated other comprehensive (loss) income						(411	)		1,885			252
		Total shareholders' equity					59,456			60,035			55,450
		Total liabilities and shareholders' equity				$	673,925		$	674,495		$	630,347

Income Statement									(Unaudited)							(Unaudited)
(Dollars in thousands, except per share data)							Three Months Ended									Years Ended
							December 31,		September 30,			December 31,				December 31,
								2016		2016			2015				2016		2015
Interest and dividend Income:
	Interest and fees on loans						$	5,589	$	5,461		$	4,725			$	20,842	$	17,332
	Securities available-for-sale							721		709			803				2,917		3,058
	FRB and FHLB dividends							39		37			42				142		67
	Interest on deposits with banks							-		-			-				1		1
	Other interest income							2		1			-				6		5
		Total interest and dividend income						6,351		6,208			5,570				23,908		20,463
Interest Expense:
	Interest expense on deposits							399		383			364				1,518		1,457
	Advances and other borrowings							193		209			149				815		550
	Subordinated debentures							198		195			191				782		445
		Total interest expense						790		787			704				3,115		2,452
Net interest income								5,561		5,421			4,866				20,793		18,011
Loan loss provision								452		472			343				1,833		1,303
		Net interest income after loan loss provision						5,109		4,949			4,523				18,960		16,708
Noninterest income:
	Service charges on deposit accounts							226		229			226				865		1,009
	Net gain on sale of loans							3,026		3,164			1,546				10,346		6,672
	Mortgage loan servicing fees							568		462			358				1,835		1,718
	Wealth management income							140		166			155				601		625
	Interchange and ATM fees							221		227			144				873		580
	Appreciation in cash surrender value of life insurance							126		133			111				484		426
	Net gain on sale of available-for-sale securities							55		110			-				249		234
	Net (loss) gain on sale of OREO							-		(2	)		(4	)			10		(4	)
	Net loss on fair value hedge							-		-			-				-		(93	)
	Other noninterest income							237		200			156				727		594
		Total noninterest income						4,599		4,689			2,692				15,990		11,761
Noninterest expense:
	Salaries and employee benefits							4,503		4,177			3,672				16,286		14,350
	Occupancy and equipment expense							657		698			681				2,815		2,988
	Data processing							513		456			654				1,980		2,259
	Advertising							166		192			237				696		800
	Amortization of mortgage servicing fees							410		326			159				1,249		799
	Amortization of core deposit intangible and tax credits							110		112			115				445		432
	Federal insurance premiums							99		99			81				404		332
	Postage							46		60			29				194		181
	Legal, accounting and examination fees							115		120			105				394		520
	Consulting fees							41		44			53				202		576
	Other noninterest expense							966		875			615				3,354		2,489
		Total noninterest expense						7,626		7,159			6,401				28,019		25,726
Income before income taxes								2,082		2,479			814				6,931		2,743
Income tax provision (benefit)								633		707			(67	)			1,799		163
Net income							$	1,449	$	1,772		$	881			$	5,132	$	2,580
Basic earnings per share							$	0.39	$	0.46		$	0.23			$	1.36	$	0.68
Diluted earnings per share							$	0.37	$	0.46		$	0.22			$	1.32	$	0.67
Weighted average shares
	outstanding (basic EPS)							3,800,645		3,779,464			3,781,023				3,784,788		3,813,090
Weighted average shares
	outstanding (diluted EPS)							3,874,833		3,873,171			3,855,095				3,873,589		3,859,625

Financial Ratios and Other Data
(Dollars in thousands, except per share data)
(Unaudited)			December 31			September 30,			December 31
				2016			2016			2015
Asset Quality:
	Nonaccrual loans		$	614		$	1,421		$	2,030
	Loans 90 days past due			495			301			472
	Restructured loans, net			43			44			46
		Total nonperforming loans		1,152			1,766			2,548
	Other real estate owned and other repossessed assets			825			513			595
		Total nonperforming assets	$	1,977		$	2,279		$	3,143
	Nonperforming loans / portfolio loans			0.25	%		0.25	%		0.63	%
	Nonperforming assets / assets			0.29	%		0.34	%		0.50	%
	Allowance for loan losses / portfolio loans			1.02	%		1.01	%		0.87	%
	Allowance / nonperforming loans			414.06	%		263.31	%		139.32	%
	Gross loan charge-offs for the quarter		$	338		$	83		$	32
	Gross loan recoveries for the quarter		$	6		$	1		$	9
	Net loan charge-offs for the quarter		$	332		$	82		$	23
Capital Data (At quarter end):
	Tangible book value per share		$	13.65		$	13.91		$	12.67
	Shares outstanding			3,811,409			3,779,464			3,779,464
Profitability Ratios (For the quarter):
	Efficiency ratio*			73.98	%		69.70	%		83.17	%
	Return on average assets			0.86	%		1.07	%		0.57	%
	Return on average equity			9.57	%		11.82	%		6.39	%
	Net interest margin			3.61	%		3.55	%		3.41	%
Profitability Ratios (Year-to-date):
	Efficiency ratio *			74.96	%		75.34	%		84.96	%
	Return on average assets			0.78	%		0.76	%		0.44	%
	Return on average equity			8.73	%		8.44	%		4.77	%
	Net interest margin			3.46	%		3.40	%		3.38	%
Other Information
	Average total assets for the quarter		$	670,469		$	664,580		$	621,808
	Average total assets year to date		$	654,811		$	649,203		$	583,658
	Average earning assets for the quarter		$	615,539		$	611,055		$	570,302
	Average earning assets year to date		$	601,824		$	596,858		$	533,261
	Average loans for the quarter **		$	479,229		$	471,437		$	415,332
	Average loans year to date **		$	456,808		$	449,334		$	374,849
	Average equity for the quarter		$	60,544		$	59,958		$	55,170
	Average equity year to date		$	58,754		$	58,157		$	54,051
	Average deposits for the quarter		$	515,771		$	500,381		$	478,559
	Average deposits year to date		$	498,224		$	491,987		$	465,276
* 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