Eagle Bancorp Montana(EBMT) - 2024 Q2 - Quarterly Report

Financial Performance - Net interest income after provision for credit losses was $15,220 thousand for the three months ended June 30, 2024, up from $14,945 thousand for the same period in 2023, representing an increase of about 1.8%[14] - Net income for the three months ended June 30, 2024, was $1,738,000, a decrease of 13.8% compared to $2,015,000 for the same period in 2023[16] - Basic and diluted earnings per common share for the three months ended June 30, 2024, were both $0.22, compared to $0.26 for the same period in 2023, reflecting a decline of 15.4%[16] - Comprehensive income for the three months ended June 30, 2024, was $2,124,000, significantly higher than $817,000 for the same period in 2023[17] - For the six months ended June 30, 2024, net income was $3,636,000, down 30.8% from $5,257,000 for the same period in 2023[16] Income and Expenses - Total noninterest expense for the three months ended June 30, 2024, was $17,307,000, down 7.9% from $18,790,000 in the prior year[16] - Total noninterest income for the three months ended June 30, 2024, was $4,269 thousand, down from $6,204 thousand in the same period of 2023, a decrease of approximately 31.2%[14] - Interest expense on deposits increased to $6,884 thousand for the three months ended June 30, 2024, from $4,155 thousand in the prior year, an increase of approximately 65.5%[14] - Total interest expense surged to $19.92 million for the six months ended June 30, 2024, a significant increase of $8.63 million or 76.4% compared to $11.29 million in the same period of 2023[134] Assets and Liabilities - Total assets increased to $2,098,955 thousand as of June 30, 2024, compared to $2,075,666 thousand at December 31, 2023, reflecting a growth of approximately 1.1%[8] - Total liabilities rose to $1,928,793 thousand as of June 30, 2024, compared to $1,906,393 thousand at December 31, 2023, an increase of approximately 1.2%[11] - The company reported retained earnings of $97,413 thousand as of June 30, 2024, compared to $96,021 thousand at December 31, 2023, an increase of about 1.4%[12] - The company’s cash and cash equivalents totaled $23,762 thousand as of June 30, 2024, down from $24,545 thousand at December 31, 2023, a decrease of about 3.2%[8] Loans and Credit Losses - Total loans receivable as of June 30, 2024, amounted to $1,517,493,000, an increase from $1,484,489,000 as of December 31, 2023, representing a growth of approximately 2.0%[40] - Provision for credit losses increased to $412 thousand for the three months ended June 30, 2024, compared to $319 thousand in the same period of 2023, reflecting a rise of about 29.2%[14] - The allowance for credit losses increased to $16,830,000 as of June 30, 2024, compared to $16,440,000 at the end of 2023[40] - The provision for credit losses for the six months ended June 30, 2024, amounted to $422 million, compared to $327 million for the same period in 2023, reflecting a 29% increase[44] Deposits - Total deposits decreased to $1,618,865 thousand as of June 30, 2024, from $1,635,195 thousand at December 31, 2023, a decline of about 1.0%[11] - Net decrease in deposits was $16,330,000 for the six months ended June 30, 2024, compared to a decrease of $56,905,000 in the same period of 2023[23] - The estimated amount of uninsured deposits was approximately $284.00 million, or 18% of total deposits, as of June 30, 2024, compared to 17% at December 31, 2023[112] Investment Securities - The fair value of total investment securities was $306,869,000 as of June 30, 2024, down from $318,279,000 as of December 31, 2023, indicating a decrease of approximately 3.5%[35] - The company reported a change in fair value of investment securities available-for-sale of $524,000 for the three months ended June 30, 2024, compared to a loss of $1,624,000 in the same period last year[17] - The gross unrealized losses on investment securities totaled $28,611,000 as of June 30, 2024, compared to $27,689,000 at the end of 2023, reflecting an increase in losses[35] Interest Rate Risk Management - The company has established guidelines to manage interest rate risk, aiming to maintain or increase net interest income within acceptable risk levels[149] - The asset/liability committee is responsible for monitoring interest rate risk and is governed by policies reviewed and approved annually by the Board[149] - The company emphasizes the importance of sound risk management practices to measure, monitor, and control interest rate exposures[148] Market Conditions and Future Projections - The Federal Open Market Committee maintained the federal funds target rate at 5.50% during the six months ended June 30, 2024[94] - The company's net interest income is projected to decrease by no more than 15% over the next twelve months with an immediate interest rate change of up to 300 basis points[150] - A -300 basis point decrease in interest rates could lead to an increase of 11.3% in net interest income for year 1 and 10.5% for year 2[151]