Eagle Bancorp Montana(EBMT) - 2025 Q2 - Quarterly Results

Executive Summary & Key Highlights Second Quarter 2025 Financial Performance Eagle Bancorp Montana reported net income of $3.2 million, or $0.41 per diluted share, in Q2 2025, consistent with the preceding quarter but significantly higher than Q2 2024 Key Financial Metrics | Metric | Q2 2025 | Q1 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :----- | :------ | :------ | :------ | :------ | :------ | | Net Income ($M) | 3.2 | 3.2 | 1.7 | 6.5 | 3.6 | | Diluted EPS ($) | 0.41 | 0.41 | 0.22 | 0.83 | 0.46 | Dividend Declaration The board declared a quarterly cash dividend of $0.145 per share, representing an annualized yield of 3.32% - Quarterly Cash Dividend: $0.145 per share (declared July 24, 2025)[2] - Annualized Yield: 3.32% based on recent market prices[2] Management Commentary Management highlighted strong Q2 2025 results driven by loan and deposit growth, an expanding net interest margin, and moderated deposit pricing - CEO Laura F. Clark reported strong Q2 2025 financial results, marked by growth in both loans and deposits, and continued expansion in net interest margin[3] - CFO Miranda Spaulding noted a moderation in deposit pricing following rate cuts but remains cautious due to emerging inflationary pressures that could influence future interest rate policy[8] Detailed Operating Results Net Income and Earnings Per Share Net income for Q2 2025 was $3.2 million, or $0.41 per diluted share, matching the previous quarter but showing significant year-over-year growth Quarterly and YTD Performance | Metric | Q2 2025 | Q1 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :----- | :------ | :------ | :------ | :------ | :------ | | Net Income ($M) | 3.2 | 3.2 | 1.7 | 6.5 | 3.6 | | Diluted EPS ($) | 0.41 | 0.41 | 0.22 | 0.83 | 0.46 | Net Interest Margin (NIM) and Net Interest Income NIM expanded significantly to 3.91% in Q2 2025, driving a 16.1% year-over-year increase in net interest income Net Interest Margin (NIM) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | Change QoQ (bps) | Change YoY (bps) | | :----- | :------ | :------ | :------ | :--------------- | :--------------- | | NIM | 3.91% | 3.74% | 3.41% | +17 | +50 | Net Interest Income | Metric | Q2 2025 ($M) | Q1 2025 ($M) | Q2 2024 ($M) | Change QoQ | Change YoY | | :----- | :----------- | :----------- | :----------- | :--------- | :--------- | | Net Interest Income | 18.1 | 16.9 | 15.6 | +7.4% | +16.1% | - Average yields on interest-earning assets increased to 5.85% in Q2 2025, while funding costs decreased to 2.45%[12] Revenues Total revenues increased 9.7% quarter-over-quarter and 15.3% year-over-year to $23.0 million Quarterly Revenue Performance | Metric | Q2 2025 ($M) | Q1 2025 ($M) | Q2 2024 ($M) | Change QoQ | Change YoY | | :----- | :----------- | :----------- | :----------- | :--------- | :--------- | | Revenues | 23.0 | 20.9 | 19.9 | +9.7% | +15.3% | - Year-to-date revenues for 2025 were $43.9 million, a 12.3% increase compared to $39.1 million in the first six months of 2024[15] Noninterest Income Total noninterest income increased 19.7% quarter-over-quarter to $4.8 million, driven by higher net mortgage banking income Quarterly Noninterest Income | Metric | Q2 2025 ($M) | Q1 2025 ($M) | Q2 2024 ($M) | Change QoQ | Change YoY | | :----- | :----------- | :----------- | :----------- | :--------- | :--------- | | Noninterest Income | 4.8 | 4.0 | 4.3 | +19.7% | +12.6% | - Net mortgage banking income increased to $2.9 million in Q2 2025 from $2.1 million in Q1 2025, due to an increase in net gain on sale of mortgage loans[16] Noninterest Expense Noninterest expense increased 5.4% quarter-over-quarter to $17.9 million, mainly due to higher salaries and benefits from increased mortgage originations Quarterly Noninterest Expense | Metric | Q2 2025 ($M) | Q1 2025 ($M) | Q2 2024 ($M) | Change QoQ | Change YoY | | :----- | :----------- | :----------- | :----------- | :--------- | :--------- | | Noninterest Expense | 17.9 | 17.0 | 17.3 | +5.4% | +3.6% | - Higher salaries and employee benefits expense contributed to the quarter-over-quarter increase, driven by higher commissions from increased mortgage originations[17] Income Tax Expense Income tax expense for Q2 2025 was $751,000, resulting in an effective tax rate of 18.8% Quarterly Income Tax | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :----- | :------ | :------ | :------ | | Income Tax Expense ($K) | 751 | 631 | 444 | | Effective Tax Rate | 18.8% | 16.3% | 20.3% | - The effective tax rate was impacted by an increase in tax-exempt income and tax credits from investments in low-income housing projects[18] Performance Ratios Key performance ratios for Q2 2025 include a Return on Average Assets of 0.61% and a core efficiency ratio that improved to 76.80% Key Ratios | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :----- | :------ | :------ | :------ | | Return on average assets | 0.61% | 0.62% | 0.33% | | Return on average equity | 7.23% | 7.66% | 4.30% | | Yield on average interest earning assets | 5.85% | 5.76% | 5.64% | | Cost of funds | 2.45% | 2.54% | 2.78% | | Net interest margin | 3.91% | 3.74% | 3.41% | | Core efficiency ratio* | 76.80% | 79.77% | 85.22% | Balance Sheet Analysis Assets Total assets reached $2.14 billion at June 30, 2025, reflecting growth from both the prior quarter and the prior year Total Assets & Investment Securities Total assets grew to $2.14 billion, while the investment securities portfolio decreased to $285.0 million Asset Overview | Metric | June 30, 2025 ($B) | March 31, 2025 ($B) | June 30, 2024 ($B) | Change QoQ | Change YoY | | :----- | :----------------- | :------------------ | :----------------- | :--------- | :--------- | | Total Assets | 2.14 | 2.09 | 2.10 | +2.4% | +1.9% | | Investment Securities | 0.285 | 0.2917 | 0.3069 | -2.3% | -7.2% | Loans & Mortgage Originations Total loans grew to $1.57 billion, with notable increases in commercial real estate and agricultural loans Loan Portfolio | Metric | June 30, 2025 ($B) | March 31, 2025 ($B) | June 30, 2024 ($B) | Change QoQ | Change YoY | | :----- | :----------------- | :------------------ | :----------------- | :--------- | :--------- | | Total Loans | 1.57 | 1.52 | 1.52 | +3.0% | +3.4% | - Residential mortgage originations were $78.6 million in Q2 2025, with sales of $54.6 million and an average gross margin on sale of 3.81%[6] - Year-over-year, commercial real estate loans grew 7.6% and agricultural loans grew 13.5%, while commercial construction loans declined 26.5%[7] Liabilities Total deposits increased 7.4% year-over-year to $1.74 billion, while FHLB advances and other borrowings significantly decreased Deposits Total deposits grew to $1.74 billion, with a lower average cost of 1.62% in Q2 2025 Deposit Growth | Metric | June 30, 2025 ($B) | March 31, 2025 ($B) | June 30, 2024 ($B) | Change QoQ | Change YoY | | :----- | :----------------- | :------------------ | :----------------- | :--------- | :--------- | | Total Deposits | 1.74 | 1.69 | 1.62 | +2.8% | +7.4% | - The average cost of total deposits decreased to 1.62% in Q2 2025, down from 1.67% in Q1 2025 and 1.70% in Q2 2024[8] - Uninsured deposits were approximately $329.0 million, or 19% of total deposits, at June 30, 2025[8] Borrowings FHLB advances and other borrowings decreased 44.5% year-over-year to $119.4 million Borrowing Levels | Metric | June 30, 2025 ($M) | March 31, 2025 ($M) | June 30, 2024 ($M) | Change QoQ | Change YoY | | :----- | :----------------- | :------------------ | :----------------- | :--------- | :--------- | | FHLB Advances & Other Borrowings | 119.4 | 125.0 | 215.1 | -4.5% | -44.5% | - The average cost of FHLB advances and other borrowings fell to 4.65% in Q2 2025 from 5.47% in Q2 2024[9] Shareholders' Equity Shareholders' equity increased to $180.6 million, with tangible book value per share rising 9.9% year-over-year Equity and Book Value | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | Change QoQ | Change YoY | | :----- | :----------------- | :------------------ | :----------------- | :--------- | :--------- | | Shareholders' Equity ($M) | 180.6 | 177.6 | 170.2 | +1.7% | +6.1% | | Book Value per Share ($) | 22.72 | 22.26 | 21.23 | +2.1% | +7.0% | | Tangible Book Value per Share ($) | 17.86 | 17.38 | 16.25 | +2.8% | +9.9% | - The Company repurchased 25,000 shares of common stock in Q2 at an average price of $16.34 per share[5] Credit Quality Credit Quality Overview The company recorded a $1.0 million provision for credit losses in Q2 2025, while nonperforming loans remained stable at $5.1 million Provision for Credit Losses | Metric | Q2 2025 ($K) | Q1 2025 ($K) | Q2 2024 ($K) | | :----- | :----------- | :----------- | :----------- | | Provision for Credit Losses | 1,038 | 42 | 412 | Key Credit Ratios | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :----- | :------------ | :------------- | :------------ | | Allowance for credit losses / portfolio loans | 1.13% | 1.10% | 1.11% | | Allowance for credit losses / nonperforming loans | 348.8% | 313.2% | 330.8% | | Nonperforming loans ($M) | 5.1 | 5.3 | 5.1 | | Net loan charge-offs ($K) | 48 | 2 | 2 | Capital Management Capital Management Overview The Bank remains well-capitalized, with a Tier 1 capital to adjusted total average assets ratio of 10.34% and an improved tangible equity ratio Capital Ratios | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :----- | :------------ | :------------- | :------------ | | Tier 1 capital to adjusted total average assets | 10.34% | N/A | N/A | | Tangible common equity to tangible assets | 6.77% | 6.77% | 6.33% | - As of June 30, 2025, the Bank's regulatory capital was in excess of all applicable regulatory requirements and is deemed well capitalized[20] Company Information & Disclosures About the Company Eagle Bancorp Montana, Inc is a bank holding company for Opportunity Bank of Montana, a community bank with 30 offices established in 1922 - Eagle Bancorp Montana, Inc is a bank holding company headquartered in Helena, Montana[22] - It is the holding company of Opportunity Bank of Montana, a community bank established in 1922 that serves consumers and small businesses through 30 banking offices[22] - The Company's shares are traded on the NASDAQ Global Market under the symbol "EBMT"[22] Forward-Looking Statements The release contains forward-looking statements subject to significant business, economic, and competitive uncertainties and contingencies - Forward-looking statements are identified by words such as "believe," "will," "expect," and "anticipate"[22] - These statements are subject to uncertainties including changes in regulations, economic conditions, interest rate fluctuations, and competition[22] - Actual future results may be materially different from the results indicated by these forward-looking statements[23] Use of Non-GAAP Financial Measures The company uses non-GAAP measures like core efficiency ratio and tangible book value to provide supplemental performance information - Non-GAAP financial measures used include: core efficiency ratio, tangible book value per share, and tangible common equity to tangible assets[24][25] - These measures provide supplemental information regarding operational performance and are prevalent among banking regulators, investors, and analysts[25] - Non-GAAP measures have inherent limitations, are not uniformly applied or audited, and may not be comparable to other companies' measures[27] Consolidated Financial Statements Balance Sheet (Table) Presents the consolidated balance sheet as of June 30, 2025, March 31, 2025, and June 30, 2024 (Dollars in thousands, except per share data) | Assets | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | 26,928 | 22,805 | 23,762 | | Securities available-for-sale, at fair value | 285,023 | 291,661 | 306,869 | | FHLB stock | 7,000 | 7,101 | 10,136 | | FRB stock | 4,131 | 4,131 | 4,131 | | Mortgage loans held-for-sale, at fair value | 13,651 | 6,223 | 10,518 | | Net loans | 1,551,932 | 1,506,788 | 1,500,663 | | Accrued interest and dividends receivable | 14,674 | 13,271 | 13,195 | | Mortgage servicing rights, net | 15,120 | 15,282 | 15,614 | | Premises and equipment, net | 100,909 | 101,759 | 98,397 | | Cash surrender value of life insurance, net | 53,958 | 53,573 | 48,529 | | Goodwill | 34,740 | 34,740 | 34,740 | | Core deposit intangible, net | 3,885 | 4,181 | 5,168 | | Other assets | 25,682 | 26,901 | 27,233 | | Total assets | 2,137,633 | 2,088,416 | 2,098,955 | | Liabilities | | | | | Total deposits | 1,737,925 | 1,689,966 | 1,618,865 | | Accrued expenses and other liabilities | 40,439 | 36,739 | 35,804 | | FHLB advances and other borrowings | 119,407 | 124,952 | 215,050 | | Other long-term debt, net | 59,224 | 59,186 | 59,074 | | Total liabilities | 1,956,995 | 1,910,843 | 1,928,793 | | Shareholders' Equity | | | | | Total shareholders' equity | 180,638 | 177,573 | 170,162 | | Total liabilities and shareholders' equity | 2,137,633 | 2,088,416 | 2,098,955 | Income Statement (Table) Presents the consolidated income statement for the three and six months ended June 30, 2025, and 2024 (Dollars in thousands, except per share data) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | | | 2025 | 2024 | 2025 | 2024 | | Total interest and dividend income | 27,150 | 25,822 | 53,219 | 50,764 | | Total interest expense | 9,005 | 10,190 | 18,172 | 19,918 | | Net interest income | 18,145 | 15,632 | 35,047 | 30,846 | | Provision for credit losses | 1,038 | 412 | 1,080 | 277 | | Net interest income after provision | 17,107 | 15,220 | 33,967 | 30,569 | | Total noninterest income | 4,807 | 4,269 | 8,823 | 8,221 | | Total noninterest expense | 17,926 | 17,307 | 34,932 | 34,340 | | Income before provision for income taxes | 3,988 | 2,182 | 7,858 | 4,450 | | Provision for income taxes | 751 | 444 | 1,382 | 814 | | Net income | 3,237 | 1,738 | 6,476 | 3,636 | | Diluted earnings per common share | 0.41 | 0.22 | 0.83 | 0.46 | Additional Financial Data Mortgage Banking Activity Details mortgage banking income components for quarterly and year-to-date periods Quarterly Mortgage Banking Income ($K) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :----- | :----------- | :----------- | :----------- | | Net gain on sale of mortgage loans | 2,083 | 1,349 | 1,600 | | Net change in fair value of loans held-for-sale and derivatives | 105 | (115) | 12 | | Mortgage servicing income, net | 738 | 891 | 805 | | Mortgage banking, net | 2,926 | 2,125 | 2,417 | YTD Mortgage Banking Income ($K) | Metric | 6M 2025 | 6M 2024 | | :----- | :----------- | :----------- | | Net gain on sale of mortgage loans | 3,432 | 3,014 | | Net change in fair value of loans held-for-sale and derivatives | (10) | (161) | | Mortgage servicing income, net | 1,629 | 1,741 | | Mortgage banking, net | 5,051 | 4,594 | Performance Ratios Provides a detailed breakdown of year-to-date performance ratios YTD Performance Ratios | Metric | 6M 2025 | 6M 2024 | | :----- | :------ | :------ | | Return on average assets | 0.62% | 0.35% | | Return on average equity | 7.27% | 4.49% | | Yield on average interest earning assets | 5.81% | 5.55% | | Cost of funds | 2.49% | 2.73% | | Net interest margin | 3.82% | 3.37% | | Core efficiency ratio* | 78.22% | 86.06% | Asset Quality Ratios and Data Presents key asset quality metrics, including nonperforming loans and allowance for credit losses ratios Asset Quality Metrics | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :----- | :------------ | :------------- | :------------ | | Total nonperforming loans ($K) | 5,083 | 5,339 | 5,088 | | Total nonperforming assets ($K) | 5,169 | 5,385 | 5,092 | | Nonperforming loans / portfolio loans | 0.32% | 0.35% | 0.34% | | Nonperforming assets / assets | 0.24% | 0.26% | 0.24% | | Allowance for credit losses / portfolio loans | 1.13% | 1.10% | 1.11% | | Allowance for credit losses/ nonperforming loans | 348.81% | 313.17% | 330.78% | | Net loan charge-offs for the quarter ($K) | 48 | 2 | 2 | Capital Data Provides quarter-end capital metrics such as tangible book value per share and shares outstanding Key Capital Metrics | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :----- | :------------ | :------------- | :------------ | | Common shareholders' equity (book value) per share ($) | 22.72 | 22.26 | 21.23 | | Tangible book value per share ($) | 17.86 | 17.38 | 16.25 | | Shares outstanding | 7,952,177 | 7,977,177 | 8,016,784 | | Tangible common equity to tangible assets | 6.77% | 6.77% | 6.33% | Other Information Includes average balances for key assets, liabilities, and equity for the quarter and year-to-date periods Quarterly Average Balances ($K) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :----- | :----------- | :----------- | :----------- | | Average investment securities | 287,707 | 293,273 | 306,207 | | Average loans | 1,554,756 | 1,526,774 | 1,513,313 | | Average earning assets | 1,862,024 | 1,835,210 | 1,837,418 | | Average total assets | 2,112,470 | 2,079,142 | 2,077,448 | | Average deposits | 1,706,261 | 1,671,349 | 1,625,882 | | Average equity | 179,104 | 169,088 | 161,533 | YTD Average Balances ($K) | Metric | 6M 2025 | 6M 2024 | | :----- | :----------- | :----------- | | Average investment securities | 290,490 | 310,168 | | Average loans | 1,540,765 | 1,506,303 | | Average earning assets | 1,848,617 | 1,833,867 | | Average total assets | 2,099,980 | 2,072,013 | | Average deposits | 1,688,826 | 1,625,826 | | Average equity | 178,249 | 162,084 | Reconciliation of Non-GAAP Financial Measures Efficiency Ratio Reconciliation Provides a reconciliation of the GAAP efficiency ratio to the non-GAAP core efficiency ratio Quarterly Efficiency Ratios | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :----- | :------ | :------ | :------ | | Efficiency ratio (GAAP) | 78.10% | 81.30% | 86.97% | | Core efficiency ratio (non-GAAP) | 76.80% | 79.77% | 85.22% | YTD Efficiency Ratios | Metric | 6M 2025 | 6M 2024 | | :----- | :------ | :------ | | Efficiency ratio (GAAP) | 79.63% | 87.90% | | Core efficiency ratio (non-GAAP) | 78.22% | 86.06% | Tangible Book Value and Tangible Assets Reconciliation Reconciles shareholders' equity to tangible common shareholders' equity and total assets to tangible assets Tangible Book Value Reconciliation ($K) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :----- | :----------------- | :------------------ | :----------------- | | Shareholders' equity | 180,638 | 177,573 | 170,162 | | Goodwill and core deposit intangible, net | (38,625) | (38,921) | (39,908) | | Tangible common shareholders' equity (non-GAAP) | 142,013 | 138,652 | 130,254 | | Tangible book value per share (non-GAAP) | 17.86 | 17.38 | 16.25 | Tangible Assets Reconciliation ($K) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :----- | :----------------- | :------------------ | :----------------- | | Total assets | 2,137,633 | 2,088,416 | 2,098,955 | | Goodwill and core deposit intangible, net | (38,625) | (38,921) | (39,908) | | Tangible assets (non-GAAP) | 2,099,008 | 2,049,495 | 2,059,047 | - Tangible common shareholders' equity to tangible assets (non-GAAP) was 6.77% at June 30, 2025, compared to 6.33% at June 30, 2024[37]