Eagle Bancorp Montana(EBMT) - 2022 Q2 - Quarterly Report

Financial Performance - Net interest income for the three months ended June 30, 2022, was $15,967 thousand, compared to $11,325 thousand for the same period in 2021, reflecting an increase of 41.5%[24] - Net income for the three months ended June 30, 2022, was $1,771 thousand, down from $2,681 thousand in the same period of 2021, a decrease of 33.9%[26] - Basic earnings per share for the three months ended June 30, 2022, were $0.24, compared to $0.40 for the same period in 2021, a decline of 40%[26] - Comprehensive loss income for the six months ended June 30, 2022, was $(18,587,000), compared to $7,033,000 for the same period in 2021[28] - Net income for June 2022 was $3,987,000, a decrease of 50.2% compared to $7,946,000 in 2021[38] - Net income for the six months ended June 30, 2022, was $3.99 million, a decrease of $3.96 million compared to $7.95 million for the same period in 2021, largely due to a $9.06 million decrease in noninterest income[185] Asset and Liability Growth - Total assets increased to $1,900,472 thousand as of June 30, 2022, up from $1,435,926 thousand at December 31, 2021, representing a growth of approximately 32.3%[15] - Total deposits rose to $1,651,833 thousand as of June 30, 2022, compared to $1,222,549 thousand at December 31, 2021, marking an increase of 35.2%[19] - Total liabilities reached $1.74 billion at June 30, 2022, an increase of $458.48 million or 35.8% from $1.28 billion at December 31, 2021[149] - Total assets increased to $1.90 billion at June 30, 2022, up $464.54 million or 32.4% from $1.44 billion at December 31, 2021[149] Loan and Deposit Details - Total loans, net, reached $1,237,627,000 as of June 30, 2022, up from $920,639,000 at December 31, 2021, reflecting a growth of approximately 34.4%[77] - The allowance for loan losses increased to $13,325,000 as of June 30, 2022, compared to $12,500,000 at December 31, 2021[77] - The company reported $62,445,000 in home equity loans and $25,775,000 in consumer loans as of June 30, 2022, showing increases from $51,748,000 and $18,455,000 respectively at December 31, 2021[77] - Total deposits increased by $429.28 million, or 35.1%, to $1.65 billion at June 30, 2022, from $1.22 billion at December 31, 2021[161] Noninterest Income and Expenses - Noninterest income decreased to $7,342 thousand for the three months ended June 30, 2022, down from $11,308 thousand in the same period of 2021, a decline of 35.1%[26] - The company reported total noninterest expense of $20,046 thousand for the three months ended June 30, 2022, compared to $19,037 thousand in the same period of 2021, an increase of 5.3%[26] - Total noninterest income decreased to $7.34 million for the three months ended June 30, 2022, down from $11.31 million in the same period of 2021, primarily due to a $4.44 million decrease in mortgage banking[180] Acquisition and Goodwill - The company completed the acquisition of First Community Bancorp on April 30, 2022, for a total consideration of $38.58 million, including $10.23 million in cash and $28.35 million in common stock[141] - Goodwill increased to $34,740 thousand as of June 30, 2022, from $20,798 thousand at December 31, 2021, reflecting a growth of 67%[19] - Goodwill recorded from the FCB acquisition was provisionally $13,942,000, which is not deductible for federal income tax purposes[60] Capital and Equity - Total shareholders' equity increased by $6.06 million, or 3.9%, to $162.79 million at June 30, 2022, primarily due to stock issued in connection with the FCB acquisition[163] - The company has subordinated debentures with fixed interest rates of 5.50% and 3.50%, due in 2030 and 2032, respectively, qualifying as Tier 2 capital[99][98] Interest Rate and Risk Management - The interest rate spread for the three months ended June 30, 2022, was 3.98%[167] - Interest rate risk management aims to maintain or increase net interest income within acceptable levels of interest rate risk[206] - Projected net interest income sensitivity shows a -16.3% impact for a -200 basis points change in year two, slightly outside the policy limit of -15.0%[207] Securities and Investments - The total fair value of mortgage-backed securities and collateralized mortgage obligations was $101,532,000 with gross unrealized losses of $5,965,000 as of June 30, 2022[75] - The total unrealized losses for the company's investment securities amounted to $25,208,000 as of June 30, 2022, with a total fair value of $320,597,000[75] - The fair value of mortgage servicing rights was $18,398,000 as of June 30, 2022, compared to $14,686,000 at December 31, 2021[95] Tax and Regulatory Compliance - Provision for income taxes decreased to $1.33 million for the six months ended June 30, 2022, down from $2.65 million in the same period in 2021, due to decreased income[192] - The effective tax rate for the three months ended June 30, 2022, was 26.4%, compared to 25.0% for the same period in 2021[183]