EBMT posts higher Q3 earnings; debt redeemed post-quarter
Eagle Bancorp Montana, Inc. reported quarterly results for the three months ended September 30, 2025. Net income was $3,630 (vs. $2,709 a year ago) and basic EPS was $0.47 (vs. $0.35). Net interest income rose to $18,688 (from $15,802) with a provision for credit losses of $62. Noninterest income was $4,717 and noninterest expense was $18,387. Comprehensive income was $6,718.
On the balance sheet (dollars in thousands), total assets were $2,119,806. Loans receivable, net, were $1,540,031 and total deposits were $1,752,179. FHLB advances and other borrowings declined to $79,167. Shareholders’ equity increased to $186,486. The company paid a dividend of $0.1450 per share and purchased 75,000 treasury shares at an average cost of $15.52 during the nine-month period.
Subsequent to quarter-end, on October 1, 2025, the company redeemed all outstanding 5.50% subordinated notes due July 1, 2030, with an aggregate principal amount of $15,000,000, financed by a $15,000,000 secured line of credit bearing a variable rate equal to 0.50% below the prime rate.
Positive
- None.
Negative
- None.
Insights
Earnings improved; funding mix and leverage actions noted.
EBMT delivered higher profitability year over year: net income was
Balance sheet data (dollars in thousands) show deposits at
A subsequent event changes liability structure: the company redeemed
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
| | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _____ to _____.
Commission file number
Eagle Bancorp Montana, Inc.
(Exact name of registrant as specified in its charter)
| | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) (Zip code)
(
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | |
| Non-accelerated filer ☐ | Smaller reporting company |
|
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (defined in Rule 12b-2 of the Exchange Act). Yes
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:
| Common stock, par value $0.01 per share | |
As of October 31, 2025
EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
| PART I. |
FINANCIAL INFORMATION |
PAGE |
|
|
|
|
|
|
| Item 1. |
Financial Statements (Unaudited) |
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Financial Condition as of September 30, 2025 and December 31, 2024 |
1 |
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2025 and 2024 |
3 |
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2025 and 2024 |
5 |
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Changes in Shareholders' Equity for the three and nine months ended September 30, 2025 and 2024 |
6 |
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 |
7 |
|
|
|
|
|
|
|
|
Notes to Condensed Consolidated Financial Statements (Unaudited) | 9 |
|
|
|
|
|
|
| Item 2. |
Management's Discussion and Analysis of Financial Condition and Results of Operations |
25 |
|
|
|
|
|
|
| Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
39 |
|
|
|
|
|
|
| Item 4. |
Controls and Procedures |
39 |
|
|
|
|
|
|
| PART II. |
OTHER INFORMATION |
|
|
| Item 1. |
Legal Proceedings |
40 |
|
| Item 1A. | Risk Factors | 40 | |
| Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
40 |
|
| Item 3. |
Defaults Upon Senior Securities |
40 |
|
| Item 4. |
Mine Safety Disclosures |
40 |
|
| Item 5. |
Other Information |
40 |
|
| Item 6. |
Exhibits |
41 |
|
|
|
|
|
|
| Signatures |
42 |
||
EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
Cautionary Note Regarding Forward-Looking Statements
This report includes “forward-looking statements” within the meaning and protections of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as “may,” “will,” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “plan,” “project,” “could,” “intend,” “target” and other similar words and expressions of the future. 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 the management of Eagle Bancorp Montana, Inc. (“Eagle” or the “Company”) and Opportunity Bank of Montana (“OBMT” or the “Bank”), Eagle’s wholly-owned subsidiary, 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.
The following factors, among others, could cause the Company’s actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:
| ● |
changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees, capital requirements and liquidity requirements; |
| ● |
local, regional, national and international economic conditions or macroeconomic instability (including any economic slowdown or recession, inflation, interest rate changes, credit loss trends, unemployment, changes in housing or securities markets, or other factors) and the impact of the same on Eagle and its customers; |
| ● | volatility, disruption, or uncertainty in national and international financial markets, including as a result of geopolitical developments; | |
| ● | the effects of the current U.S. federal government shutdown, closures or significant staff reductions in agencies regulating or otherwise impacting Eagle's business; | |
| ● | the direct or indirect impact of any new regulatory, policy, or enforcement developments resulting from the policies or actions of the current U.S. presidential administration, including the implementation of tariffs and other protectionist trade policies, including any reciprocal tariffs by foreign countries, and any uncertainties related thereto; | |
| ● |
competition among depository and other traditional and non-traditional financial service providers; |
| ● |
risks related to the concentration of our business in Montana, including risks associated with changes in the prices, values and sales volume of residential and commercial real estate in Montana; |
| ● |
inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments or reduces loan demand; |
| ● |
our ability to attract deposits and other sources of funding or liquidity; |
|
| ● | possible changes in governmental monetary and fiscal policies, or any leadership changes of those determining such policies; | |
| ● | volatility in Eagle's stock price due to investor sentiment and perception of the banking industry; | |
| ● | the possibility that future credit losses may be higher than currently expected due to changes in economic assumptions, customer behavior, adverse developments with respect to U.S. or global economic conditions and other uncertainties, including the impact of supply chain disruptions, inflationary pressures and labor shortages on economic conditions and our business; | |
| ● | an inability to access capital markets or maintain deposits or borrowing costs; | |
| ● | our ability to assess and monitor the effect of evolving uses of artificial intelligence on our business and operations; | |
| ● | our ability to navigate differing environmental, social, governmental, and sustainability concerns among governmental administrations, our stakeholders, and other activists that may arise from our business activities; |
| ● |
changes or volatility in the securities markets that lead to impairment in the value of our investment securities and goodwill; |
| ● |
our ability to implement our growth strategy, including identifying and consummating suitable acquisitions, raising additional capital to finance such transactions, entering new markets, possible failures in realizing the anticipated benefits from such acquisitions and an inability of our personnel, systems and infrastructure to keep pace with such growth; |
| ● | limitations on Eagle's ability to receive dividends from its subsidiaries; | |
| ● | unforeseen events, such as pandemics or natural disasters, and any governmental or societal responses thereto; | |
| ● |
the effect of acquisitions we may make, if any, including, without limitation, the failure to achieve expected revenue growth and/or expense savings from such acquisitions; |
| ● |
potential impairment on the goodwill we have recorded or may record in connection with business acquisitions; |
| ● | our ability to enter new markets successfully and capitalize on growth opportunities; | |
| ● | the need to retain capital for strategic or regulatory reasons; | |
| ● | changes in consumer spending, borrowing and savings habits; | |
| ● |
our ability to continue to increase and manage our commercial and residential real estate, multi-family and commercial business loans; |
| ● | our ability to implement new technologies and maintain secure and reliable technology systems; | |
| ● |
our ability to develop and maintain secure and reliable information technology systems, effectively defend ourselves against cyberattacks, or recover from breaches to our cybersecurity infrastructure; |
| ● |
the failure of assumptions underlying the establishment of allowance for possible loan losses and other estimates; |
| ● |
changes in the financial performance and/or condition of our borrowers and their ability to repay their loans when due; and |
| ● |
the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Securities and Exchange Commission, the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters. |
Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. For a further list and description of various risks, relevant factors and uncertainties that could cause future results or events to differ materially from those expressed or implied in our forward-looking statements, see the Part II, Item 1A, “Risk Factors” and Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections contained elsewhere in this report, as well as our Annual Report on Form 10-K for the year ended December 31, 2024, any subsequent Reports on Form 10-Q and Form 8-K, and other filings with the SEC. We do not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur, or of which we hereafter become aware.
EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in Thousands, Except for Per Share Data)
(Unaudited)
| September 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| ASSETS: | ||||||||
| Cash and due from banks | $ | $ | ||||||
| Interest-bearing deposits in banks | ||||||||
| Total cash and cash equivalents | ||||||||
| Securities available-for-sale, at fair value (amortized cost of $299,963 at September 30, 2025 and $319,939 at December 31, 2024) | ||||||||
| Federal Home Loan Bank ("FHLB") stock | ||||||||
| Federal Reserve Bank ("FRB") stock | ||||||||
| Mortgage loans held-for-sale, at fair value | ||||||||
| Loans receivable, net of allowance for credit losses of $17,740 at September 30, 2025 and $16,850 at December 31, 2024 | ||||||||
| Accrued interest and dividends receivable | ||||||||
| Mortgage servicing rights, net | ||||||||
| Assets held-for-sale, at cost | ||||||||
| Premises and equipment, net | ||||||||
| Cash surrender value of life insurance, net | ||||||||
| Goodwill | ||||||||
| Core deposit intangible, net | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Continued)
(Dollars in Thousands, Except for Per Share Data)
(Unaudited)
| September 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| LIABILITIES: | ||||||||
| Deposit accounts: | ||||||||
| Noninterest-bearing | $ | $ | ||||||
| Interest-bearing | ||||||||
| Total deposits | ||||||||
| Accrued expenses and other liabilities | ||||||||
| FHLB advances and other borrowings | ||||||||
| Other long-term debt: | ||||||||
| Principal amount | ||||||||
| Unamortized debt issuance costs | ( | ) | ( | ) | ||||
| Total other long-term debt, net | ||||||||
| Total liabilities | ||||||||
| SHAREHOLDERS' EQUITY: | ||||||||
| Preferred stock (par value $0.01 per share; 1,000,000 shares authorized; no shares issued or outstanding) | ||||||||
| Common stock (par value $0.01 per share; 20,000,000 shares authorized; 8,507,429 shares issued at September 30, 2025 and December 31, 2024; 7,952,177 shares outstanding at September 30, 2025 and 8,027,177 shares outstanding December 31, 2024) | ||||||||
| Additional paid-in capital | ||||||||
| Unallocated common stock held by Employee Stock Ownership Plan ("ESOP") | ( | ) | ( | ) | ||||
| Treasury stock, at cost (555,252 shares at September 30, 2025 and 480,252 shares at December 31, 2024) | ( | ) | ( | ) | ||||
| Retained earnings | ||||||||
| Accumulated other comprehensive loss, net of tax | ( | ) | ( | ) | ||||
| Total shareholders' equity | ||||||||
| Total liabilities and shareholders' equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands, Except for Per Share Data)
(Unaudited)
| Three Months Ended |
Nine Months Ended |
|||||||||||||||
| September 30, |
September 30, |
|||||||||||||||
| 2025 |
2024 |
2025 |
2024 |
|||||||||||||
| INTEREST AND DIVIDEND INCOME: |
||||||||||||||||
| Interest and fees on loans |
$ | $ | $ | $ | ||||||||||||
| Securities available-for-sale |
||||||||||||||||
| FHLB and FRB dividends |
||||||||||||||||
| Other interest income |
||||||||||||||||
| Total interest and dividend income |
||||||||||||||||
| INTEREST EXPENSE: |
||||||||||||||||
| Deposits |
||||||||||||||||
| FHLB advances and other borrowings |
||||||||||||||||
| Other long-term debt |
||||||||||||||||
| Total interest expense |
||||||||||||||||
| NET INTEREST INCOME |
||||||||||||||||
| Provision for credit losses |
||||||||||||||||
| NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES |
||||||||||||||||
| NONINTEREST INCOME: |
||||||||||||||||
| Service charges on deposit accounts |
||||||||||||||||
| Mortgage banking, net |
||||||||||||||||
| Interchange and ATM fees |
||||||||||||||||
| Appreciation in cash surrender value of life insurance |
||||||||||||||||
| Other noninterest income |
||||||||||||||||
| Total noninterest income |
$ | $ | $ | $ | ||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Continued)
(Dollars in Thousands, Except for Per Share Data)
(Unaudited)
| Three Months Ended |
Nine Months Ended |
|||||||||||||||
| September 30, |
September 30, |
|||||||||||||||
| 2025 |
2024 |
2025 |
2024 |
|||||||||||||
| NONINTEREST EXPENSE: |
||||||||||||||||
| Salaries and employee benefits |
$ | $ | $ | $ | ||||||||||||
| Occupancy and equipment expense |
||||||||||||||||
| Data processing |
||||||||||||||||
| Software subscriptions |
||||||||||||||||
| Advertising |
||||||||||||||||
| Amortization |
||||||||||||||||
| Loan costs |
||||||||||||||||
| Federal Deposit Insurance Corporation ("FDIC") insurance premiums |
||||||||||||||||
| Professional and examination fees |
||||||||||||||||
| Other noninterest expense |
||||||||||||||||
| Total noninterest expense |
||||||||||||||||
| INCOME BEFORE PROVISION FOR INCOME TAXES |
||||||||||||||||
| Provision for income taxes |
||||||||||||||||
| NET INCOME |
$ | $ | $ | $ | ||||||||||||
| BASIC EARNINGS PER COMMON SHARE |
$ | $ | $ | $ | ||||||||||||
| DILUTED EARNINGS PER COMMON SHARE |
$ | $ | $ | $ | ||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in Thousands)
(Unaudited)
| Three Months Ended |
Nine Months Ended |
|||||||||||||||
| September 30, |
September 30, |
|||||||||||||||
| 2025 |
2024 |
2025 |
2024 |
|||||||||||||
| NET INCOME |
$ | $ | $ | $ | ||||||||||||
| OTHER ITEMS OF COMPREHENSIVE INCOME (LOSS) BEFORE TAX: |
||||||||||||||||
| Change in fair value of investment securities available-for-sale |
||||||||||||||||
| Total other comprehensive income |
||||||||||||||||
| Income tax provision related to securities available-for-sale |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| COMPREHENSIVE INCOME |
$ | $ | $ | $ | ||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
For the three and nine months ended September 30, 2025 and 2024
(Dollars in Thousands, Except for Per Share Data)
(Unaudited)
| ACCUMULATED | ||||||||||||||||||||||||||||||||
| ADDITIONAL | UNALLOCATED | OTHER | ||||||||||||||||||||||||||||||
| PREFERRED | COMMON | PAID-IN | ESOP | TREASURY | RETAINED | COMPREHENSIVE | ||||||||||||||||||||||||||
| STOCK | STOCK | CAPITAL | SHARES | STOCK | EARNINGS | (LOSS) INCOME | TOTAL | |||||||||||||||||||||||||
| Balance at July 1, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||
| Net income | ||||||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | ||||||||||||||||||||||||||||||||
| Dividends paid ($0.1450 per share) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Stock compensation expense | ||||||||||||||||||||||||||||||||
| ESOP shares allocated (5,997 shares) | ( | ) | ||||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||
| Balance at July 1, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||
| Net income | ||||||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | ||||||||||||||||||||||||||||||||
| Dividends paid ($0.1425 per share) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Stock compensation expense | ||||||||||||||||||||||||||||||||
| ESOP shares allocated (5,997 shares) | ( | ) | ||||||||||||||||||||||||||||||
| Balance at September 30, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||
| Balance at January 1, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||
| Net income | ||||||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | ||||||||||||||||||||||||||||||||
| Dividends paid ($0.4300 per share) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Stock compensation expense | ||||||||||||||||||||||||||||||||
| ESOP shares allocated (17,991 shares) | ( | ) | ||||||||||||||||||||||||||||||
| Treasury stock purchased (75,000 shares at $15.52 average cost per share) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||
| Balance at January 1, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||
| Net income | ||||||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | ||||||||||||||||||||||||||||||||
| Dividends paid ($0.4225 per share) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Stock compensation expense | ||||||||||||||||||||||||||||||||
| ESOP shares allocated (17,991 shares) | ( | ) | ||||||||||||||||||||||||||||||
| Balance at September 30, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
| Nine Months Ended |
||||||||
| September 30, |
||||||||
| 2025 |
2024 |
|||||||
| As Restated | ||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
| Net income |
$ | $ | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Provision for credit losses |
||||||||
| Depreciation |
||||||||
| Net amortization of investment securities premiums and discounts |
||||||||
| Amortization of mortgage servicing rights |
||||||||
| Amortization of right-of-use assets |
||||||||
| Amortization of core deposit intangibles |
||||||||
| Compensation expense related to restricted stock awards |
||||||||
| ESOP compensation expense for allocated shares |
||||||||
| Net gain on sale of loans |
( |
) | ( |
) | ||||
| Originations of loans held-for-sale |
( |
) | ( |
) | ||||
| Proceeds from sales of loans held-for-sale |
||||||||
| Net gain on sale/disposal of premises and equipment |
( |
) | ||||||
| Net appreciation in cash surrender value of life insurance |
( |
) | ( |
) | ||||
| Net change in: |
||||||||
| Accrued interest and dividends receivable |
( |
) | ( |
) | ||||
| Other assets |
( |
) | ||||||
| Accrued expenses and other liabilities |
( |
) | ||||||
| Net cash provided by operating activities |
||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
| Activity in available-for-sale securities: |
||||||||
| Maturities, principal payments and calls |
||||||||
| Purchases |
( |
) | ||||||
| FHLB stock redeemed (purchased) |
( |
) | ||||||
| Loan origination and principal collection, net |
( |
) | ( |
) | ||||
| (Purchase) proceeds from bank owned life insurance |
( |
) | ||||||
| Insurance proceeds related to premises and equipment |
||||||||
| Proceeds from sale of real estate and other repossessed assets acquired in settlement of loans |
||||||||
| Proceeds from sale of premises and equipment |
||||||||
| Purchases of premises and equipment, net |
( |
) | ( |
) | ||||
| Net cash used in investing activities |
$ | ( |
) | $ | ( |
) | ||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Dollars in Thousands)
(Unaudited)
| Nine Months Ended |
||||||||
| September 30, |
||||||||
| 2025 |
2024 |
|||||||
| As Restated | ||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
| Net increase in deposits |
$ | $ | ||||||
| Net short-term advances (payments) from FHLB and other borrowings |
( |
) | ||||||
| Advances on long-term FHLB and other borrowings |
||||||||
| Payments on long-term FHLB and other borrowings |
( |
) | ( |
) | ||||
| Purchase of treasury stock |
( |
) | ||||||
| Dividends paid |
( |
) | ( |
) | ||||
| Net cash provided by financing activities |
||||||||
| NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS |
( |
) | ||||||
| CASH AND CASH EQUIVALENTS, beginning of period |
||||||||
| CASH AND CASH EQUIVALENTS, end of period |
$ | $ | ||||||
| SUPPLEMENTAL CASH FLOW INFORMATION: |
||||||||
| Cash paid during the period for interest |
$ | $ | ||||||
| Cash paid during the period for income taxes, net of refund |
||||||||
| NONCASH OPERATING, INVESTING AND FINANCING ACTIVITIES: |
||||||||
| Increase in fair value of securities available-for-sale |
$ | $ | ||||||
| Mortgage servicing rights recognized |
||||||||
| Loans transferred to real estate and other assets acquired in foreclosure |
||||||||
| Right-of-use assets obtained (used) in exchange for lease liabilities |
( |
) | ||||||
| Decrease in commitments to invest in Low-Income Housing Tax Credit projects |
( |
) | ( |
) | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Eagle Bancorp Montana, Inc. (“Eagle” or the “Company”), is a Delaware corporation that holds
Eagle Bancorp Statutory Trust I (the "Trust") was established in September 2005 and is owned
In September 2021, the Company entered into an Agreement and Plan of Merger ("Merger Agreement") with First Community Bancorp, Inc. ("FCB"), a Montana corporation, and FCB's wholly-owned subsidiary, First Community Bank, a Montana chartered commercial bank. The Merger Agreement provided that, upon the terms and subject to the conditions set forth in the Merger Agreement, FCB would merge with and into Eagle, with Eagle continuing as the surviving corporation. The merger closed on April 30, 2022. First Community Bank operated nine branches in Ashland, Culbertson, Froid, Glasgow, Helena, Hinsdale, Three Forks and Wolf Point, Montana.
In March 2021, the Bank established a subsidiary, Opportunity Housing Fund, LLC ("OHF"), to invest in Low-Income Housing Tax Credit ("LIHTC") projects. The LIHTC program is designed to encourage capital investment in construction and rehabilitation of low-income housing. Tax credits are allowable over a 10-year period. Amortizing investments in LIHTC projects are included in other assets on the consolidated statements of financial condition and totaled $
On January 1, 2020, the Company acquired Western Holding Company of Wolf Point, ("WHC"), a Montana corporation, and WHC's wholly-owned subsidiary, Western Bank of Wolf Point ("WB"), a Montana chartered commercial bank. The acquisition included one branch in Wolf Point, Montana. In addition, Western Financial Services, Inc. ("WFS") was acquired through the WHC merger. In December 2023, WFS changed its name to Opportunity Financial Services, Inc. ("OFS"). OFS facilitates deferred payment contracts for customers that produce agricultural products. The revenue from these contracts is accounted for in accordance with ASC Topic 606. The Company is considered an agent in these contracts, as: (i) the Company facilitates payment from customer to supplier, (ii) the Company does not take inventory of commodities as they are delivered by supplier to the customer, (iii) pricing of commodities is determined by the market, (iv) consideration on deferred payment contracts is insignificant to the Company and (v) the Company’s exposure to credit risk is minimal. Revenue is recognized net of expenses and reported in other noninterest income in the financial statements. Commodity sales income and the corresponding commodity sales expense were $
The Bank is headquartered in Helena, Montana, and has additional branches in Ashland, Big Timber, Billings, Bozeman, Butte, Choteau, Culbertson, Denton, Dutton, Froid, Glasgow, Great Falls, Hamilton, Hinsdale, Livingston, Missoula, Sheridan, Three Forks, Townsend, Twin Bridges, Winifred and Wolf Point, Montana. The Bank’s principal business is accepting deposits and, together with funds generated from operations and borrowings, investing in various types of loans and securities.
The Bank currently has 30 full-service branches. The Bank’s principal business is accepting deposits and, together with funds generated from operations and borrowings, investing in various types of loans and securities.
Basis of Financial Statement Presentation and Use of Estimates
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). It is recommended that these unaudited interim condensed consolidated financial statements be read in conjunction with the Company’s Annual Report on Form 10-K with all of the audited information and footnotes required by U.S. GAAP for complete financial statements for the year ended December 31, 2024, as filed with the SEC on March 14, 2025. In the opinion of management, all normal adjustments and recurring accruals considered necessary for a fair presentation of the financial position and results of operations for the periods presented have been included.
The results of operations for the nine-month period ended September 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025 or any other period. In preparing condensed consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the condensed consolidated statement of financial condition and reported amounts of revenues and expenses during the reporting period. Actual results could differ from estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for credit losses ("ACL"), mortgage servicing rights, the fair value of financial instruments, the valuation of goodwill and deferred tax assets and liabilities.
Principles of Consolidation
The condensed consolidated financial statements include Eagle, the Bank, OHF, Eagle Bancorp Statutory Trust I (the “Trust”) and OFS. All significant intercompany transactions and balances have been eliminated in consolidation.
Reclassifications
Certain prior period amounts were reclassified to conform to the presentation for 2025. These reclassifications had no impact on net income or shareholders’ equity.
NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
Subsequent Events
The Company has evaluated events and transactions subsequent to September 30, 2025 for recognition and/or disclosure.
On October 1, 2025, the Company redeemed all of its outstanding
Goodwill
Goodwill is recorded upon completion of a business combination as the difference between the purchase price and the fair value of net identifiable assets acquired. Subsequent to initial recognition, the Company tests goodwill for impairment annually as of October 31, or more often if events or circumstances, such as adverse changes in the business climate indicate there may be impairment. A goodwill impairment test is performed by comparing the fair value of the reporting unit with its carrying value. An impairment charge is recorded for the amount by which thy carrying amount exceeds the reporting unit’s fair value. For goodwill considerations the Company is a single reporting unit.
During the quarter ended September 30, 2024, Management performed a quantitative goodwill impairment test with assistance from a third-party valuation specialist. The interim determination was primarily driven by a revision in the Company’s earnings outlook in comparison to budget. A weighted average of both the market and income approaches was used in valuing the reporting unit’s fair value. The interim goodwill impairment assessment as of August 31, 2024 concluded that goodwill was not impaired. Our quantitative annual impairment test as of October 31, 2024 also did not result in impairment. Goodwill will be tested annually for 2025 as of October 31.
Segment Reporting
Management considers operations to be aggregated in one operating segment, as well as one reportable segment. The Company operates as one line of business (community banking) by providing a similar base of commercial and retail customers with comparable product and service offerings throughout our Montana markets. The Company adopted ASU No. 2023-07, Segment Reporting (Topic 280) during the year ended December 31, 2024. The President/Chief Executive Officer (“CEO”) serves as the Company’s chief operating decision maker (“CODM”).
The CODM is responsible for assessing performance and allocating operating and capital expenditure resources. The CODM regularly assesses the performance of the single operating and reporting segment based on consolidated net income. The CODM reviews expenses at a level consistent with those reported in the Company’s consolidated statements of income. All significant expense categories are reflected in the consolidated statements of income. The measure of segment assets is reflected in the consolidated statements of financial condition as total assets.
Recently Adopted Accounting Pronouncements
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) which provides temporary optional expedients to ease the financial reporting burdens of the expected market transition from London Interbank Offered Rate (“LIBOR”) to an alternative reference rate such as Secured Overnight Financing Rate ("SOFR"). In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848), which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. ASU No. 2021-01 was effective upon issuance and generally can be applied through December 31, 2024. The Company has reviewed all of its LIBOR based products and all products have been adjusted to another index as LIBOR ceased to be published after June 30, 2023. ASU No. 2021-01 did not have a significant impact on the Company's consolidated financial statements.
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The updated accounting guidance requires expanded reportable segment disclosures, primarily related to significant segment expenses which are regularly provided to the company's chief operating decision maker. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within annual periods beginning after December 15, 2024. Retrospective application is required. The Company adopted the updated guidance during the year ended December 31, 2024 and it did not have a significant impact on the Company's financial statement disclosures as the Company has a single reportable segment.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The updated accounting guidance requires enhanced income tax disclosures, including the disaggregation of existing disclosures related to the tax rate reconciliation and income taxes paid. This ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The amendments should be applied on a prospective basis, but retrospective application is permitted. The amendments in this ASU became effective for the Company on January 1, 2025 and did not have a significant impact on the Company’s financial position, results of operations, or liquidity.
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This update requires that public companies disclose details about specific expenses such as employee compensation, depreciation, amortization, depletion, and inventory purchases. This ASU is effective for annual reporting periods beginning after December 15, 2026 with early adoption permitted. In January 2025, the FASB issued ASU No. 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), which clarifies the effective date. This ASU is effective for annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the effect the ASU will have on its consolidated financial statements and related disclosures.
On July 4, 2025, the President of the United States signed and enacted the “One Big Beautiful Bill Act” into law. Except for certain provisions, the Tax Act is effective for tax years beginning on or after January 1, 2025. The tax and spending legislation permanently extends key business tax breaks originally enacted under the 2017 Tax Cuts and Jobs Act. The Company is currently evaluating the impact the bill will have on income tax expense.
EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 2. INVESTMENT SECURITIES
The amortized cost and fair values of securities, together with unrealized gains and losses, were as follows:
| September 30, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||||||
| Gross | Gross | |||||||||||||||||||||||||||||||||||||||
| Amortized | Unrealized | Fair | Amortized | Unrealized | Fair | |||||||||||||||||||||||||||||||||||
| Cost | Gains | (Losses) | ACL | Value | Cost | Gains | (Losses) | ACL | Value | |||||||||||||||||||||||||||||||
| (In Thousands) | ||||||||||||||||||||||||||||||||||||||||
| Available-for-Sale: | ||||||||||||||||||||||||||||||||||||||||
| U.S. government and agency obligations | $ | $ | $ | ( | ) | $ | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||
| U.S. treasury obligations | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Municipal obligations | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Corporate obligations | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Mortgage-backed securities | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Collateralized mortgage obligations | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Asset-backed securities | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | ( | ) | $ | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||
There was
The amortized cost and fair value of securities by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
| September 30, 2025 | ||||||||
| Amortized | Fair | |||||||
| Cost | Value | |||||||
| (In Thousands) | ||||||||
| Due in one year or less | $ | $ | ||||||
| Due from one to five years | ||||||||
| Due from five to ten years | ||||||||
| Due after ten years | ||||||||
| Mortgage-backed securities | ||||||||
| Collateralized mortgage obligations | ||||||||
| Total | $ | $ | ||||||
As of September 30, 2025 and December 31, 2024, securities with a fair value of $
The Company’s investment securities that have been in a continuous unrealized loss position for less than twelve months and those that have been in a continuous unrealized loss position for twelve or more months were as follows:
| September 30, 2025 | ||||||||||||||||
| Less Than 12 Months | 12 Months or Longer | |||||||||||||||
| Gross | Gross | |||||||||||||||
| Fair | Unrealized | Fair | Unrealized | |||||||||||||
| Value | Losses | Value | Losses | |||||||||||||
| (In Thousands) | ||||||||||||||||
| U.S. government and agency obligations | $ | $ | $ | $ | ( | ) | ||||||||||
| U.S. treasury obligations | ( | ) | ||||||||||||||
| Municipal obligations | ( | ) | ( | ) | ||||||||||||
| Corporate obligations | ( | ) | ||||||||||||||
| Mortgage-backed securities and collateralized mortgage obligations | ( | ) | ( | ) | ||||||||||||
| Asset-backed securities | ||||||||||||||||
| Total | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
NOTE 2. INVESTMENT SECURITIES – continued
| December 31, 2024 | ||||||||||||||||
| Less Than 12 Months | 12 Months or Longer | |||||||||||||||
| Gross | Gross | |||||||||||||||
| Fair | Unrealized | Fair | Unrealized | |||||||||||||
| Value | Losses | Value | Losses | |||||||||||||
| (In Thousands) | ||||||||||||||||
| U.S. government and agency obligations | $ | $ | $ | $ | ( | ) | ||||||||||
| U.S. treasury obligations | ( | ) | ||||||||||||||
| Municipal obligations | ( | ) | ( | ) | ||||||||||||
| Corporate obligations | ( | ) | ||||||||||||||
| Mortgage-backed securities and collateralized mortgage obligations | ( | ) | ( | ) | ||||||||||||
| Asset-backed securities | ( | ) | ||||||||||||||
| Total | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
As of September 30, 2025 and December 31, 2024, there were, respectively,
NOTE 3. LOANS RECEIVABLE
Loans receivable consisted of the following:
| September 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (In Thousands) | ||||||||
| Real estate loans: | ||||||||
| Residential 1-4 family | $ | $ | ||||||
| Commercial real estate | ||||||||
| Other loans: | ||||||||
| Home equity | ||||||||
| Consumer | ||||||||
| Commercial | ||||||||
| Total | ||||||||
| Allowance for credit losses | ( | ) | ( | ) | ||||
| Total loans, net | $ | $ | ||||||
Included in the above are loans guaranteed by U.S. government agencies totaling $
NOTE 3. LOANS RECEIVABLE – continued
The following table provides allowance for credit losses activity for the three months ended September 30, 2025.
| Residential | Commercial | Home | ||||||||||||||||||||||
| 1-4 Family | Real Estate | Equity | Consumer | Commercial | Total | |||||||||||||||||||
| (In Thousands) | ||||||||||||||||||||||||
| Allowance for credit losses on loans: | ||||||||||||||||||||||||
| Beginning balance, July 1, 2025 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Charge-offs | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Recoveries | ||||||||||||||||||||||||
| Provision | ||||||||||||||||||||||||
| Total ending allowance balance, September 30, 2025 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
The following table provides allowance for credit losses activity for the nine months ended September 30, 2025.
| Residential | Commercial | Home | ||||||||||||||||||||||
| 1-4 Family | Real Estate | Equity | Consumer | Commercial | Total | |||||||||||||||||||
| (In Thousands) | ||||||||||||||||||||||||
| Allowance for credit losses on loans: | ||||||||||||||||||||||||
| Beginning balance, January 1, 2025 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Charge-offs | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Recoveries | ||||||||||||||||||||||||
| Provision | ||||||||||||||||||||||||
| Total ending allowance balance, September 30, 2025 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
The following table provides allowance for credit losses activity for the three months ended September 30, 2024.
| Residential | Commercial | Home | ||||||||||||||||||||||
| 1-4 Family | Real Estate | Equity | Consumer | Commercial | Total | |||||||||||||||||||
| (In Thousands) | ||||||||||||||||||||||||
| Allowance for credit losses on loans: | ||||||||||||||||||||||||
| Beginning balance, July 1, 2024 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Charge-offs | ( | ) | ( | ) | ||||||||||||||||||||
| Recoveries | ||||||||||||||||||||||||
| Provision | ||||||||||||||||||||||||
| Total ending allowance balance, September 30, 2024 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
The following table provides allowance for credit losses activity for the nine months ended September 30, 2024.
| Residential | Commercial | Home | ||||||||||||||||||||||
| 1-4 Family | Real Estate | Equity | Consumer | Commercial | Total | |||||||||||||||||||
| (In Thousands) | ||||||||||||||||||||||||
| Allowance for credit losses on loans: | ||||||||||||||||||||||||
| Beginning balance, January 1, 2024 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Charge-offs | ( | ) | ( | ) | ||||||||||||||||||||
| Recoveries | ||||||||||||||||||||||||
| Provision | ||||||||||||||||||||||||
| Total ending allowance balance, September 30, 2024 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
NOTE 3. LOANS RECEIVABLE – continued
Internal classification of the loan portfolio by amortized cost and based on year originated was as follows:
| September 30, 2025 | ||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Revolving Loans | Total Loans | |||||||||||||||||||||||||
| (In Thousands) | ||||||||||||||||||||||||||||||||
| RESIDENTIAL 1-4 FAMILY | ||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Total Residential 1-4 family | ||||||||||||||||||||||||||||||||
| Current-period gross charge-offs | ||||||||||||||||||||||||||||||||
| RESIDENTIAL 1-4 FAMILY CONSTRUCTION | ||||||||||||||||||||||||||||||||
| Pass | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Total Residential 1-4 family construction | ||||||||||||||||||||||||||||||||
| Current-period gross charge-offs | ||||||||||||||||||||||||||||||||
| COMMERCIAL REAL ESTATE | ||||||||||||||||||||||||||||||||
| Pass | ||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Total Commercial real estate | ||||||||||||||||||||||||||||||||
| Current-period gross charge-offs | ||||||||||||||||||||||||||||||||
| COMMERCIAL CONSTRUCTION AND DEVELOPMENT | ||||||||||||||||||||||||||||||||
| Pass | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Total Commercial construction and development | ||||||||||||||||||||||||||||||||
| Current-period gross charge-offs | ||||||||||||||||||||||||||||||||
| FARMLAND | ||||||||||||||||||||||||||||||||
| Pass | ||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Total Farmland | ||||||||||||||||||||||||||||||||
| Current-period gross charge-offs | ||||||||||||||||||||||||||||||||
| HOME EQUITY | ||||||||||||||||||||||||||||||||
| Pass | ||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Total Home Equity | ||||||||||||||||||||||||||||||||
| Current-period gross charge-offs | ||||||||||||||||||||||||||||||||
| CONSUMER | ||||||||||||||||||||||||||||||||
| Pass | ||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Total Consumer | ||||||||||||||||||||||||||||||||
| Current-period gross charge-offs | ||||||||||||||||||||||||||||||||
| COMMERCIAL | ||||||||||||||||||||||||||||||||
| Pass | ||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Total Commercial | ||||||||||||||||||||||||||||||||
| Current-period gross charge-offs | ||||||||||||||||||||||||||||||||
| AGRICULTURAL | ||||||||||||||||||||||||||||||||
| Pass | ||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Total Agricultural | ||||||||||||||||||||||||||||||||
| Current-period gross charge-offs | ||||||||||||||||||||||||||||||||
| TOTAL LOANS | ||||||||||||||||||||||||||||||||
| Pass | ||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 3. LOANS RECEIVABLE – continued
| December 31, 2024 | ||||||||||||||||||||||||||||||||
| 2024 | 2023 | 2022 | 2021 | 2020 | Prior | Revolving Loans | Total Loans | |||||||||||||||||||||||||
| (In Thousands) | ||||||||||||||||||||||||||||||||
| RESIDENTIAL 1-4 FAMILY | ||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Total Residential 1-4 family | ||||||||||||||||||||||||||||||||
| Current-period gross charge-offs | ||||||||||||||||||||||||||||||||
| RESIDENTIAL 1-4 FAMILY CONSTRUCTION | ||||||||||||||||||||||||||||||||
| Pass | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Total Residential 1-4 family construction | ||||||||||||||||||||||||||||||||
| Current-period gross charge-offs | ||||||||||||||||||||||||||||||||
| COMMERCIAL REAL ESTATE | ||||||||||||||||||||||||||||||||
| Pass | ||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Total Commercial real estate | ||||||||||||||||||||||||||||||||
| Current-period gross charge-offs | ||||||||||||||||||||||||||||||||
| COMMERCIAL CONSTRUCTION AND DEVELOPMENT | ||||||||||||||||||||||||||||||||
| Pass | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Total Commercial construction and development | ||||||||||||||||||||||||||||||||
| Current-period gross charge-offs | ||||||||||||||||||||||||||||||||
| FARMLAND | ||||||||||||||||||||||||||||||||
| Pass | ||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Total Farmland | ||||||||||||||||||||||||||||||||
| Current-period gross charge-offs | ||||||||||||||||||||||||||||||||
| HOME EQUITY | ||||||||||||||||||||||||||||||||
| Pass | ||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Total Home Equity | ||||||||||||||||||||||||||||||||
| Current-period gross charge-offs | ||||||||||||||||||||||||||||||||
| CONSUMER | ||||||||||||||||||||||||||||||||
| Pass | ||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Total Consumer | ||||||||||||||||||||||||||||||||
| Current-period gross charge-offs | ||||||||||||||||||||||||||||||||
| COMMERCIAL | ||||||||||||||||||||||||||||||||
| Pass | ||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Total Commercial | ||||||||||||||||||||||||||||||||
| Current-period gross charge-offs | ||||||||||||||||||||||||||||||||
| AGRICULTURAL | ||||||||||||||||||||||||||||||||
| Pass | ||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Total Agricultural | ||||||||||||||||||||||||||||||||
| Current-period gross charge-offs | ||||||||||||||||||||||||||||||||
| TOTAL LOANS | ||||||||||||||||||||||||||||||||
| Pass | ||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 3. LOANS RECEIVABLE – continued
The following tables include information regarding delinquencies within the loan portfolio.
| September 30, 2025 | ||||||||||||||||||||||||||||
| Loans Past Due and Still Accruing | ||||||||||||||||||||||||||||
| 90 Days | Nonaccrual | Nonaccrual | ||||||||||||||||||||||||||
| 30-89 Days | and | Loans with | Loans with | Current | Total | |||||||||||||||||||||||
| Past Due | Greater | Total | no ACL | ACL | Loans | Loans | ||||||||||||||||||||||
| (In Thousands) | ||||||||||||||||||||||||||||
| Real estate loans: | ||||||||||||||||||||||||||||
| Residential 1-4 family | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Residential 1-4 family construction | ||||||||||||||||||||||||||||
| Commercial real estate | ||||||||||||||||||||||||||||
| Commercial construction and development | ||||||||||||||||||||||||||||
| Farmland | ||||||||||||||||||||||||||||
| Other loans: | ||||||||||||||||||||||||||||
| Home equity | ||||||||||||||||||||||||||||
| Consumer | ||||||||||||||||||||||||||||
| Commercial | ||||||||||||||||||||||||||||
| Agricultural | ||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||||
| Loans Past Due and Still Accruing | ||||||||||||||||||||||||||||
| 90 Days | Nonaccrual | Nonaccrual | ||||||||||||||||||||||||||
| 30-89 Days | and | Loans with | Loans with | Current | Total | |||||||||||||||||||||||
| Past Due | Greater | Total | no ACL | ACL | Loans | Loans | ||||||||||||||||||||||
| (In Thousands) | ||||||||||||||||||||||||||||
| Real estate loans: | ||||||||||||||||||||||||||||
| Residential 1-4 family | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Residential 1-4 family construction | ||||||||||||||||||||||||||||
| Commercial real estate | ||||||||||||||||||||||||||||
| Commercial construction and development | ||||||||||||||||||||||||||||
| Farmland | ||||||||||||||||||||||||||||
| Other loans: | ||||||||||||||||||||||||||||
| Home equity | ||||||||||||||||||||||||||||
| Consumer | ||||||||||||||||||||||||||||
| Commercial | ||||||||||||||||||||||||||||
| Agricultural | ||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Interest income recognized on nonaccrual loans for the three and nine months ended September 30, 2025 and 2024 is considered insignificant. Interest payments received on a cash basis related to nonaccrual loans were $
The following tables present the amortized cost basis of collateral-dependent loans by class of loans.
| September 30, 2025 | ||||||||||||
| Real Estate | Business Assets | Other | ||||||||||
| (In Thousands) | ||||||||||||
| Real estate loans: | ||||||||||||
| Residential 1-4 family | $ | $ | $ | |||||||||
| Commercial real estate | ||||||||||||
| Commercial construction and development | ||||||||||||
| Farmland | ||||||||||||
| Other loans: | ||||||||||||
| Home equity | ||||||||||||
| Consumer | ||||||||||||
| Commercial | ||||||||||||
| Agricultural | ||||||||||||
| Total | $ | $ | $ | |||||||||
EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 3. LOANS RECEIVABLE – continued
| December 31, 2024 | ||||||||||||
| Real Estate | Business Assets | Other | ||||||||||
| (In Thousands) | ||||||||||||
| Real estate loans: | ||||||||||||
| Residential 1-4 family | $ | $ | $ | |||||||||
| Residential 1-4 family construction | ||||||||||||
| Commercial real estate | ||||||||||||
| Farmland | ||||||||||||
| Other loans: | ||||||||||||
| Home equity | ||||||||||||
| Consumer | ||||||||||||
| Commercial | ||||||||||||
| Agricultural | ||||||||||||
| Total | $ | $ | $ | |||||||||
The Company offers modifications of loans to borrowers experiencing financial difficulty by providing principal forgiveness, interest rate reductions, term extensions, other than insignificant payment delays, or any combination of these.
The following tables include the amortized cost basis at the end of the period of the loans modified to borrowers experiencing financial difficulty.
| As of or For the | ||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| September 30, 2025 | ||||||||||||||||||||
| Term Extension and Payment Deferral | Term Extension and Interest Rate Reduction | |||||||||||||||||||
| Amortized Cost Basis | Percent of Loan Category | Amortized Cost Basis | Percent of Loan Category | Total | ||||||||||||||||
| (Dollars in Thousands) | ||||||||||||||||||||
| Other loans: | ||||||||||||||||||||
| Home equity | % | % | ||||||||||||||||||
| Commercial | % | % | ||||||||||||||||||
| Total | $ | $ | $ | |||||||||||||||||
| As of or For the | ||||||||||||||||||||
| Nine Months Ended | ||||||||||||||||||||
| September 30, 2025 | ||||||||||||||||||||
| Term Extension and Payment Deferral | Term Extension and Interest Rate Reduction | |||||||||||||||||||
| Amortized Cost Basis | Percent of Loan Category | Amortized Cost Basis | Percent of Loan Category | Total | ||||||||||||||||
| (Dollars in Thousands) | ||||||||||||||||||||
| Real estate loans: | ||||||||||||||||||||
| Residential 1-4 family | $ | % | $ | % | $ | |||||||||||||||
| Commercial real estate | % | % | ||||||||||||||||||
| Other loans: | ||||||||||||||||||||
| Home equity | % | % | ||||||||||||||||||
| Commercial | % | % | ||||||||||||||||||
| Agricultural | % | % | ||||||||||||||||||
| Total | $ | $ | $ | |||||||||||||||||
During the three and nine months ended September 30, 2025, the Company modified four and ten loans, respectively.
During the three months ended September 30, 2024, the Company did not modify any loans.
During the nine months ended September 30, 2024, the Company modified one farmland loan by extending the payment for seven months. The loan had amortized cost of $
EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 4. MORTGAGE SERVICING RIGHTS
The Company is servicing mortgage loans for the benefit of others which are not included in the condensed consolidated statements of financial condition and have unpaid principal balances of $
Custodial balances maintained in connection with the foregoing loan servicing are included in noninterest checking deposits and were $
The following is a summary of activity in mortgage servicing rights:
| As of or For the | ||||||||
| Three Months Ended | ||||||||
| September 30, | ||||||||
| 2025 | 2024 | |||||||
| (In Thousands) | ||||||||
| Mortgage servicing rights: | ||||||||
| Beginning balance | $ | $ | ||||||
| Mortgage servicing rights capitalized | ||||||||
| Amortization of mortgage servicing rights | ( | ) | ( | ) | ||||
| Ending balance | $ | $ | ||||||
| As of or For the | ||||||||
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2025 | 2024 | |||||||
| (In Thousands) | ||||||||
| Mortgage servicing rights: | ||||||||
| Beginning balance | $ | $ | ||||||
| Mortgage servicing rights capitalized | ||||||||
| Amortization of mortgage servicing rights | ( | ) | ( | ) | ||||
| Ending balance | $ | $ | ||||||
The fair values of these mortgage servicing rights were $
| September 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Key assumptions: | ||||||||
| Discount rate | 12 | % | % | |||||
| Prepayment speed range | % | % | ||||||
| Weighted average prepayment speed | % | % | ||||||
NOTE 5. DEPOSITS
Deposits are summarized as follows:
| September 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (In Thousands) | ||||||||
| Noninterest checking | $ | $ | ||||||
| Interest-bearing checking | ||||||||
| Savings | ||||||||
| Money market | ||||||||
| Time certificates of deposit | ||||||||
| Total | $ | $ | ||||||
There were no brokered time certificates of deposit at September 30, 2025 and December 31, 2024.
EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 6. OTHER LONG-TERM DEBT
Other long-term debt consisted of the following:
| September 30, 2025 | December 31, 2024 | |||||||||||||||
| Unamortized | Unamortized | |||||||||||||||
| Debt | Debt | |||||||||||||||
| Principal | Issuance | Principal | Issuance | |||||||||||||
| Amount | Costs | Amount | Costs | |||||||||||||
| (In Thousands) | ||||||||||||||||
| Subordinated debentures fixed at 5.50% to floating effective July 1, 2025, due 2030 | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Subordinated debentures fixed at 3.50% to floating, due 2032 | ( | ) | ( | ) | ||||||||||||
| Subordinated debentures variable at 3-Month SOFR plus 1.68%, due 2035 | ||||||||||||||||
| Total other long-term debt | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
In January 2022, the Company completed the issuance of $
In June 2020, the Company completed the issuance of $
In September 2005, the Company completed the private placement of $
EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 7. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The following table includes information regarding the activity in accumulated other comprehensive income (loss).
| Unrealized | ||||
| (Losses) Gains | ||||
| on Securities | ||||
| Available-for-Sale | ||||
| (In Thousands) | ||||
| Balance, July 1, 2025 | $ | ( | ) | |
| Other comprehensive income, before reclassifications and income taxes | ||||
| Amounts reclassified from accumulated other comprehensive loss, before income taxes | ||||
| Income tax provision | ( | ) | ||
| Total other comprehensive income | ||||
| Balance, September 30, 2025 | $ | ( | ) | |
| Balance, July 1, 2024 | $ | ( | ) | |
| Other comprehensive income, before reclassifications and income taxes | ||||
| Amounts reclassified from accumulated other comprehensive loss, before income taxes | ||||
| Income tax provision | ( | ) | ||
| Total other comprehensive income | ||||
| Balance, September 30, 2024 | $ | ( | ) | |
| Balance, January 1, 2025 | $ | ( | ) | |
| Other comprehensive income, before reclassifications and income taxes | ||||
| Amounts reclassified from accumulated other comprehensive loss, before income taxes | ||||
| Income tax provision | ( | ) | ||
| Total other comprehensive income | ||||
| Balance, September 30, 2025 | $ | ( | ) | |
| Balance, January 1, 2024 | $ | ( | ) | |
| Other comprehensive income, before reclassifications and income taxes | ||||
| Amounts reclassified from accumulated other comprehensive loss, before income taxes | ||||
| Income tax provision | ( | ) | ||
| Total other comprehensive income | ||||
| Balance, September 30, 2024 | $ | ( | ) | |
EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 8. EARNINGS PER COMMON SHARE
The computations of basic and diluted earnings per common share are as follows:
| Three Months Ended |
Nine Months Ended |
|||||||||||||||
| September 30, |
September 30, |
|||||||||||||||
| 2025 |
2024 |
2025 |
2024 |
|||||||||||||
| (Dollars in Thousands, Except Per Share Data) |
||||||||||||||||
| Basic weighted average shares outstanding |
||||||||||||||||
| Dilutive effect of stock compensation |
||||||||||||||||
| Diluted weighted average shares outstanding |
||||||||||||||||
| Net income available to common shareholders |
$ | $ | $ | $ | ||||||||||||
| Basic earnings per common share |
$ | $ | $ | $ | ||||||||||||
| Diluted earnings per common share |
$ | $ | $ | $ | ||||||||||||
| Restricted stock units excluded from the diluted average outstanding share calculation because their effect would be anti-dilutive |
||||||||||||||||
NOTE 9. DERIVATIVES AND HEDGING ACTIVITIES
The Company enters into commitments to originate and sell mortgage loans. The Bank uses derivatives to hedge the risk of changes in fair values of interest rate lock commitments and mortgage loans held-for-sale. An optimal amount of mortgage loans are sold directly into bulk commitments with investors at the time an interest rate is locked, other loans are sold on an individual best-efforts basis at the time an interest rate is locked, and the remaining balance of locked loans are hedged using To-Be-Announced (“TBA”) mortgage-backed securities or bulk mandatory forward loan sale commitments.
Derivatives are accounted for as free-standing or economic derivatives and are measured at fair value. Derivatives are recorded as either other assets or other liabilities on the condensed consolidated statements of condition.
Derivatives are summarized as follows:
| September 30, 2025 |
December 31, 2024 |
|||||||||||||||||||||||
| Notional |
Fair Value |
Notional |
Fair Value |
|||||||||||||||||||||
| Amount |
Asset |
Liability |
Amount |
Asset |
Liability |
|||||||||||||||||||
| (In Thousands) |
||||||||||||||||||||||||
| Interest rate lock commitments |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Forward TBA mortgage-backed securities |
||||||||||||||||||||||||
Changes in the fair value of the derivatives are recorded in mortgage banking, net, within noninterest income on the condensed consolidated statements of income. Net gains of $
NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
Assets and liabilities that are measured at fair value are grouped in three levels within the fair value hierarchy based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.
The fair value hierarchy is as follows:
| ■ | Level 1 Inputs – Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities. |
| ■ | Level 2 Inputs – Valuations are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuations for which all significant assumptions are observable or can be corroborated by observable market data. |
| ■ | Level 3 Inputs – Valuations are based on unobservable inputs that may include significant management judgment and estimation. |
A description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy at the reporting date, is set forth below.
EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS – continued
Available-for-Sale Securities – Securities classified as available-for-sale are reported at fair value utilizing Level 1 (nationally recognized securities exchanges) and Level 2 inputs. For Level 2 inputs securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include but is not limited to dealer quotes, market spreads, cash flows, the U. S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayments speeds, credit information and the bond’s terms and conditions.
Loans Held-for-Sale – These loans are reported at fair value. Fair value is determined based on expected proceeds based on committed sales contracts and commitments of similar loans if not already committed and are considered Level 2 inputs.
Derivative Instruments – The fair value of the interest rate lock commitments, forward TBA mortgage-backed securities and mandatory forward commitments are estimated using quoted or published market prices for similar instruments and adjusted for factors such as pull-through rate assumptions based on historical information, where appropriate. Interest rate lock commitments are considered Level 3 inputs and forward TBA mortgage-backed securities and mandatory forward commitments are considered Level 2 inputs.
Collateral-Dependent Loans – Individually reviewed collateral-dependent loans are reported at the fair value of the underlying collateral less costs to sell. Collateral-dependent loans are considered Level 3 inputs. Collateral values are estimated using Level 3 inputs based on internally customized discounting criteria.
Real Estate and Other Repossessed Assets – Fair values are determined at the time the loan is foreclosed upon and the asset is transferred from loans. The value is based primarily on third party appraisals, less costs to sell and are considered Level 3 inputs for determining fair value. Repossessed assets are reviewed and evaluated periodically for additional impairment and adjusted accordingly.
Mortgage Servicing Rights – The fair value of mortgage servicing rights are estimated using net present value of expected cash flows based on a third party model that incorporates industry assumptions and is adjusted for factors such as prepayment speeds and are considered Level 3 inputs.
The following tables summarize financial assets and financial liabilities measured at fair value on a recurring basis, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value.
| September 30, 2025 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total Fair | |||||||||||||
| Inputs | Inputs | Inputs | Value | |||||||||||||
| (In Thousands) | ||||||||||||||||
| Financial assets: | ||||||||||||||||
| Available-for-sale securities: | ||||||||||||||||
| U.S. government and agency obligations | $ | $ | $ | $ | ||||||||||||
| U.S. treasury obligations | ||||||||||||||||
| Municipal obligations | ||||||||||||||||
| Corporate obligations | ||||||||||||||||
| Mortgage-backed securities | ||||||||||||||||
| Collateralized mortgage obligations | ||||||||||||||||
| Asset-backed securities | ||||||||||||||||
| Loans held-for-sale | ||||||||||||||||
| Forward TBA mortgage-backed securities | ||||||||||||||||
| Financial liabilities: | ||||||||||||||||
| Interest rate lock commitments | ||||||||||||||||
| December 31, 2024 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total Fair | |||||||||||||
| Inputs | Inputs | Inputs | Value | |||||||||||||
| (In Thousands) | ||||||||||||||||
| Financial assets: | ||||||||||||||||
| Available-for-sale securities: | ||||||||||||||||
| U.S. government and agency obligations | $ | $ | $ | $ | ||||||||||||
| U.S. treasury obligations | ||||||||||||||||
| Municipal obligations | ||||||||||||||||
| Corporate obligations | ||||||||||||||||
| Mortgage-backed securities | ||||||||||||||||
| Collateralized mortgage obligations | ||||||||||||||||
| Asset-backed securities | ||||||||||||||||
| Loans held-for-sale | ||||||||||||||||
| Forward TBA mortgage-backed securities | ||||||||||||||||
| Financial liabilities: | ||||||||||||||||
| Interest rate lock commitments | ||||||||||||||||
EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS – continued
Certain financial assets may be measured at fair value on a nonrecurring basis. These assets are subject to fair value adjustments that result from the application of lower of cost or fair value accounting or write-downs of individual assets, such as impaired loans that are collateral-dependent, real estate and other repossessed assets and mortgage servicing rights.
The following table summarizes financial assets measured at fair value on a nonrecurring basis for which a nonrecurring change in fair value has been recorded during the reporting periods presented:
| September 30, 2025 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total Fair | |||||||||||||
| Inputs | Inputs | Inputs | Value | |||||||||||||
| (In Thousands) | ||||||||||||||||
| Collateral-dependent loans individually evaluated, net of ACL | $ | $ | $ | $ | ||||||||||||
| December 31, 2024 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total Fair | |||||||||||||
| Inputs | Inputs | Inputs | Value | |||||||||||||
| (In Thousands) | ||||||||||||||||
| Collateral-dependent loans individually evaluated, net of ACL | $ | $ | $ | $ | ||||||||||||
The following table represents the Banks’s Level 3 financial assets and liabilities, the valuation techniques used to measure the fair value of those financial assets and liabilities, and the significant unobservable inputs and the ranges of values for those inputs.
| Principal | Significant | Range of | |||||
| Valuation | Unobservable | Significant Input | |||||
| Instrument | Technique | Inputs | Values | ||||
| Collateral-dependent loans individually evaluated | Fair value of underlying collateral | Discount applied to the obtained appraisal | | ||||
| Real estate and other repossessed assets | Fair value of collateral | Discount applied to the obtained appraisal | | ||||
| Interest rate lock commitments | Internal pricing model | Pull-through expectations | |
The following tables provide a reconciliation of assets and liabilities measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the three and nine months ended September 30, 2025.
| As of or For the | As of or For the | |||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Interest Rate Lock Commitments | Interest Rate Lock Commitments | |||||||||||||||
| (In Thousands) | (In Thousands) | |||||||||||||||
| Beginning balance | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
| Purchases and issuances | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Sales and settlements | ||||||||||||||||
| Ending balance | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Unrealized (losses) gains related to items held during the period | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||
EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS – continued
The tables below summarize the estimated fair values of financial instruments of the Company, whether or not recognized at fair value on the condensed consolidated statements of condition. The tables are followed by methods and assumptions that were used by the Company in estimating the fair value of the classes of financial instruments.
| September 30, 2025 | ||||||||||||||||||||
| Total | ||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Estimated | Carrying | ||||||||||||||||
| Inputs | Inputs | Inputs | Fair Value | Amount | ||||||||||||||||
| (In Thousands) | ||||||||||||||||||||
| Financial assets: | ||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | $ | |||||||||||||||
| FHLB stock | ||||||||||||||||||||
| FRB stock | ||||||||||||||||||||
| Loans receivable, gross | ||||||||||||||||||||
| Mortgage servicing rights | ||||||||||||||||||||
| Financial liabilities: | ||||||||||||||||||||
| Non-maturing interest-bearing deposits | ||||||||||||||||||||
| Time certificates of deposit | ||||||||||||||||||||
| FHLB advances and other borrowings | ||||||||||||||||||||
| Other long-term debt | ||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||
| Total | ||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Estimated | Carrying | ||||||||||||||||
| Inputs | Inputs | Inputs | Fair Value | Amount | ||||||||||||||||
| (In Thousands) | ||||||||||||||||||||
| Financial assets: | ||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | $ | |||||||||||||||
| FHLB stock | ||||||||||||||||||||
| FRB stock | ||||||||||||||||||||
| Loans receivable, gross | ||||||||||||||||||||
| Mortgage servicing rights | ||||||||||||||||||||
| Financial liabilities: | ||||||||||||||||||||
| Non-maturing interest-bearing deposits | ||||||||||||||||||||
| Time certificates of deposit | ||||||||||||||||||||
| FHLB advances and other borrowings | ||||||||||||||||||||
| Other long-term debt | ||||||||||||||||||||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Introduction
Eagle Bancorp Montana, Inc. is a bank holding company registered under the Bank Holding Company Act, is incorporated under the laws of Delaware and headquartered in Helena, Montana. Its wholly-owned subsidiary, Opportunity Bank of Montana (the "Bank"), is a Montana-state-chartered bank that is a member of the Federal Reserve System.
This discussion and analysis provides information that management believes is necessary to understand Eagle's financial condition, changes in financial condition, results of operations, and cash flows for the three and nine months ended September 30, 2025, as compared to the same period of 2024. The following should be read in conjunction with the Company's Consolidated Financial Statements, and accompanying Notes thereto, for the year ended December 31, 2024, included in Eagle's Annual Report on Form 10-K filed with the United States Securities and Exchange Commission ("SEC") on March 14, 2025, and in conjunction with the Condensed Consolidated Financial Statements, and accompanying Notes thereto, included in Part I - Item 1. Financial Statements of this report. The results of operations for the three and nine months ended September 30, 2025, are not necessarily indicative of the future results that may be attained for the entire year or other interim periods.
Executive Summary
The Company’s primary business activity is the ownership of the Bank. The Bank focuses on consumer, commercial, and agricultural lending. It engages in typical banking activities: acquiring deposits from local markets and originating loans and investing in securities. Our earnings depend primarily on our level of net interest income, which is the difference between interest earned on our interest-earning assets, consisting primarily of loans and investment securities, and the interest paid on interest-bearing liabilities, consisting primarily of deposits, borrowed funds, and trust-preferred securities. Net interest income is a function of our interest rate spread, which is the difference between the average yield earned on our interest-earning assets and the average rate paid on our interest-bearing liabilities, as well as a function of the average balance of interest-earning assets compared to interest-bearing liabilities. Also contributing to our earnings is noninterest income, which consists primarily of service charges and fees on loan and deposit products and services, net gains and losses on sale of assets, and mortgage loan service fees. Net interest income and noninterest income are offset by provisions for credit losses, general administrative and other expenses, including salaries and employee benefits and occupancy and equipment costs, as well as by state and federal income tax expense.
The Bank has focused on diversifying the loan portfolio over the past decade, adding commercial and agricultural loans to the strong mortgage lending proficiency. Loan originations represented by single-family residential mortgages enabled the Bank to successfully market home equity loans, as well as a wide range of shorter-term consumer loans for various personal needs (automobiles, recreational vehicles, etc.). The Bank has grown the commercial loan portfolio in both real estate and non-real estate, and further added agricultural loans, which have a shorter term and slightly higher interest rate, through acquisitions. The purpose of diversification is to mitigate the Bank’s exposure to specific market segments, as well as to improve our ability to manage our interest rate spread. This has provided additional interest income and improved interest rate sensitivity. The Bank’s management recognizes that fee income will also enable it to be less dependent on specialized lending and it now maintains a significant loan serviced portfolio which provides a steady source of fee income. Fee income is also supplemented with fees generated from deposit accounts. The Bank has a high percentage of non-maturity deposits, such as checking accounts and savings accounts, which allows management flexibility in managing its spread. Non-maturity deposits and certificates of deposits do not automatically reprice as interest rates rise. Gain on sale of loans also provides significant noninterest income in periods of high mortgage loan origination volumes. Such income will be, and has recently been, adversely affected in periods of lower mortgage activity.
Management continues to focus on improving the Bank’s earnings. Management believes the Bank needs to continue to concentrate on increasing net interest margin, other areas of fee income and control of operating expenses to achieve earnings growth going forward. Management’s strategy of growing the loan portfolio and deposit base is expected to help achieve these goals as follows: loans typically earn higher rates of return than investments; a larger deposit base should yield higher fee income; increasing the asset base will reduce the relative impact of fixed operating costs. The biggest challenge to this strategy is funding growth in an efficient manner. It may become more difficult to maintain deposit growth due to significant competition, the current conditions in the banking industry and possible reduced customer demand for deposits as customers may shift into other asset classes.
The level and movement of interest rates impacts the Bank’s earnings as well. The Federal Open Market Committee decreased the federal funds target rate to 4.50% during the year ended December 31, 2024. The rate was decreased to 4.25% during the nine months ended September 30, 2025.
Financial Condition
Comparisons of financial condition in this section are between September 30, 2025 and December 31, 2024.
Total assets were $2.12 billion at September 30, 2025, an increase of $16.72 million, or 0.8% from $2.10 billion at December 31, 2024. Loans receivable, net increased by $36.23 million, or 2.4% from December 31, 2024. However, securities available-for-sale decreased $12.67 million, or 4.3% from December 31, 2024. Total liabilities were $1.93 billion at September 30, 2025, an increase of $4.99 million, or 0.3% from $1.93 billion at December 31, 2024. The increase was largely due to an increase in total deposits, offset by a decrease in FHLB advances. Total deposits increased $70.95 million from December 31, 2024 and total borrowings decreased $61.65 million from December 31, 2024. Total shareholders’ equity increased $11.72 million, or 6.7% from December 31, 2024.
Financial Condition Details
Investment Activities
The following table summarizes investment activities:
| September 30, |
December 31, |
|||||||||||||||
| 2025 |
2024 |
|||||||||||||||
| Fair Value |
Percent of Total |
Fair Value |
Percent of Total |
|||||||||||||
| (Dollars in Thousands) |
||||||||||||||||
| Securities available-for-sale: |
||||||||||||||||
| U.S. government and agency obligations |
$ | 4,336 | 1.55 | % | $ | 5,195 | 1.78 | % | ||||||||
| U.S. treasury obligations |
44,865 | 16.03 | 46,913 | 16.03 | ||||||||||||
| Municipal obligations |
117,089 | 41.83 | 117,877 | 40.29 | ||||||||||||
| Corporate obligations |
1,966 | 0.70 | 4,162 | 1.42 | ||||||||||||
| Mortgage-backed securities |
27,083 | 9.68 | 28,235 | 9.65 | ||||||||||||
| Collateralized mortgage obligations |
77,600 | 27.72 | 82,623 | 28.24 | ||||||||||||
| Asset-backed securities |
6,981 | 2.49 | 7,585 | 2.59 | ||||||||||||
| Total securities available-for-sale |
$ | 279,920 | 100.00 | % | $ | 292,590 | 100.00 | % | ||||||||
Securities available-for-sale were $279.92 million at September 30, 2025, a decrease of $12.67 million, or 4.3% from $292.59 million at December 31, 2024. The decrease was primarily due to maturity, principal payments and call activity of $22.36 million offset by a security purchase of $3.02 million and an increase in fair value of $7.31 million.
Financial Condition – continued
Lending Activities
The following table includes the composition of the Bank’s loan portfolio by loan category:
| September 30, |
December 31, |
|||||||||||||||
| 2025 |
2024 |
|||||||||||||||
| Amount |
Percent of Total |
Amount |
Percent of Total |
|||||||||||||
| (Dollars in Thousands) |
||||||||||||||||
| Real estate loans: |
||||||||||||||||
| Residential 1-4 family (1) |
$ | 149,119 | 9.57 | % | $ | 153,721 | 10.11 | % | ||||||||
| Residential 1-4 family construction |
35,423 | 2.27 | 45,701 | 3.01 | ||||||||||||
| Total residential 1-4 family |
184,542 | 11.84 | 199,422 | 13.12 | ||||||||||||
| Commercial real estate |
670,403 | 43.04 | 645,962 | 42.48 | ||||||||||||
| Commercial construction and development |
113,455 | 7.28 | 124,211 | 8.17 | ||||||||||||
| Farmland |
159,279 | 10.22 | 146,610 | 9.64 | ||||||||||||
| Total commercial real estate |
943,137 | 60.54 | 916,783 | 60.29 | ||||||||||||
| Total real estate loans |
1,127,679 | 72.38 | 1,116,205 | 73.41 | ||||||||||||
| Other loans: |
||||||||||||||||
| Home equity |
106,648 | 6.85 | 97,543 | 6.41 | ||||||||||||
| Consumer |
25,558 | 1.64 | 28,513 | 1.88 | ||||||||||||
| Commercial |
143,029 | 9.18 | 144,039 | 9.47 | ||||||||||||
| Agricultural |
154,857 | 9.95 | 134,346 | 8.83 | ||||||||||||
| Total commercial loans |
297,886 | 19.13 | 278,385 | 18.30 | ||||||||||||
| Total other loans |
430,092 | 27.62 | 404,441 | 26.59 | ||||||||||||
| Total loans |
1,557,771 | 100.00 | % | 1,520,646 | 100.00 | % | ||||||||||
| Allowance for credit losses |
(17,740 | ) | (16,850 | ) | ||||||||||||
| Total loans, net |
$ | 1,540,031 | $ | 1,503,796 | ||||||||||||
|
|
(1) |
Excludes loans held-for-sale. |
Loans receivable, net increased $36.23 million, or 2.4%, to $1.54 billion at September 30, 2025 from $1.50 billion at December 31, 2024. The increase was largely driven by an increase in commercial real estate loans of $26.36 million, an increase in total commercial loans of $19.50 million and an increase of $9.11 million in home equity loans. The increases were slightly offset by a decrease of $14.88 million in total residential loans and a decrease of $2.95 million in consumer loans.
Total loan originations were $433.43 million for the nine months ended September 30, 2025. Total residential 1-4 family originations were $203.48 million, which includes $163.16 million of loans held-for-sale originations. Total commercial originations were $99.35 million. Total commercial real estate originations were $96.99 million. Home equity loan originations totaled $23.56 million. Consumer loan originations totaled $10.05 million. Loans held-for-sale decreased by $3.01 million to $10.36 million at September 30, 2025 from $13.37 million at December 31, 2024.
Financial Condition – continued
Lending Activities– continued
Generally, our collection procedures provide that when a loan is 15 or more days delinquent, the borrower is sent a past due notice. If the loan becomes 30 days delinquent, the borrower is sent a written delinquency notice requiring payment. If the delinquency continues, subsequent efforts are made to contact the delinquent borrower, including face to face meetings and counseling to resolve the delinquency. All collection actions are undertaken with the objective of compliance with the Fair Debt Collection Act.
For mortgage loans and home equity loans, if the borrower is unable to cure the delinquency or reach a payment agreement, we will institute foreclosure actions. If a foreclosure action is taken and the loan is not reinstated, paid in full or refinanced, the property is sold at judicial sale at which we may be the buyer if there are no adequate offers to satisfy the debt. Any property acquired as the result of foreclosure, or by deed in lieu of foreclosure, is classified as real estate owned until such time as it is sold or otherwise disposed of. When real estate owned is acquired, it is recorded at its fair market value less estimated selling costs. The initial recording of any loss is charged to the allowance for credit losses. Subsequent write-downs are recorded as a charge to operations. As of September 30, 2025 and December 31, 2024 there was $86,000 and $45,000, respectively, of real estate owned and other repossessed property.
The following table sets forth information regarding nonperforming assets:
| September 30, |
December 31, |
|||||||
| 2025 |
2024 |
|||||||
| (Dollars in Thousands) |
||||||||
| Nonaccrual loans |
||||||||
| Real estate loans: |
||||||||
| Residential 1-4 family |
$ | 341 | $ | 469 | ||||
| Residential 1-4 family construction |
- | 961 | ||||||
| Commercial real estate |
420 | 268 | ||||||
| Commercial construction and development |
1 | 2 | ||||||
| Farmland |
316 | 190 | ||||||
| Other loans: |
||||||||
| Home equity |
348 | 335 | ||||||
| Consumer |
172 | 121 | ||||||
| Commercial |
191 | 204 | ||||||
| Agricultural |
177 | 677 | ||||||
| Accruing loans delinquent 90 days or more |
||||||||
| Real estate loans: |
||||||||
| Residential 1-4 family |
874 | 623 | ||||||
| Farmland |
988 | - | ||||||
| Other loans: |
||||||||
| Commercial |
1 | - | ||||||
| Agricultural |
293 | - | ||||||
| Total nonperforming loans |
4,122 | 3,850 | ||||||
| Real estate owned and other repossessed property, net |
86 | 45 | ||||||
| Total nonperforming assets |
$ | 4,208 | $ | 3,895 | ||||
| Total nonperforming loans to total loans |
0.26 | % | 0.25 | % | ||||
| Total nonperforming loans to total assets |
0.19 | % | 0.18 | % | ||||
| Total nonaccrual loans to total loans |
0.13 | % | 0.21 | % | ||||
| Total nonperforming assets to total assets |
0.20 | % | 0.19 | % | ||||
Nonaccrual loans as of September 30, 2025 and December 31, 2024 include $470,000 and $591,000, respectively of acquired loans that deteriorated subsequent to the acquisition date.
The following tables include the composition of the commercial real estate loan category:
| September 30, 2025 |
||||||||||||||||
| Non-Owner Occupied |
Owner Occupied |
Total |
Percent of Total CRE |
|||||||||||||
| (Dollars In Thousands) | ||||||||||||||||
| Automotive related |
$ | - | $ | 23,301 | $ | 23,301 | 3.48 | % | ||||||||
| Bars and restaurants |
5,442 | 15,895 | 21,337 | 3.18 | ||||||||||||
| Car washes |
983 | - | 983 | 0.15 | ||||||||||||
| Construction and related industries |
15,189 | 15,665 | 30,854 | 4.60 | ||||||||||||
| Healthcare and social assistance |
9,798 | 13,806 | 23,604 | 3.52 | ||||||||||||
| Hospitality industry related |
- | 12,137 | 12,137 | 1.81 | ||||||||||||
| Hotels and other traveler accommodations |
80,618 | - | 80,618 | 12.03 | ||||||||||||
| Industrial/warehouse |
63,745 | - | 63,745 | 9.51 | ||||||||||||
| Lessors of mini warehouses and self-storage units |
19,108 | - | 19,108 | 2.85 | ||||||||||||
| Lessors of nonresidential buildings |
60,948 | - | 60,948 | 9.09 | ||||||||||||
| Lessors of other real estate property |
29,921 | - | 29,921 | 4.46 | ||||||||||||
| Multifamily |
121,031 | - | 121,031 | 18.06 | ||||||||||||
| Office space |
20,063 | 41,502 | 61,565 | 9.18 | ||||||||||||
| Other real estate rental and leasing |
6,262 | - | 6,262 | 0.93 | ||||||||||||
| Real estate leasing activities |
- | 29,487 | 29,487 | 4.40 | ||||||||||||
| Wholesale and retail trade |
7,767 | 12,878 | 20,645 | 3.08 | ||||||||||||
| Other |
42,031 | 22,826 | 64,857 | 9.67 | ||||||||||||
| Total commercial real estate |
$ | 482,906 | $ | 187,497 | $ | 670,403 | 100.00 | % | ||||||||
| December 31, 2024 |
||||||||||||||||
| Non-Owner Occupied |
Owner Occupied |
Total |
Percent of Total CRE |
|||||||||||||
| (Dollars In Thousands) |
||||||||||||||||
| Automotive related |
$ | - | $ | 23,738 | $ | 23,738 | 3.67 | % | ||||||||
| Bars and restaurants |
5,030 | 15,912 | 20,942 | 3.24 | ||||||||||||
| Car washes |
884 | - | 884 | 0.14 | ||||||||||||
| Construction and related industries |
19,717 | 13,968 | 33,685 | 5.21 | ||||||||||||
| Healthcare and social assistance |
10,483 | 13,907 | 24,390 | 3.78 | ||||||||||||
| Hospitality industry related |
- | 13,764 | 13,764 | 2.13 | ||||||||||||
| Hotels and other traveler accommodations |
66,702 | - | 66,702 | 10.33 | ||||||||||||
| Industrial/warehouse |
51,168 | - | 51,168 | 7.92 | ||||||||||||
| Lessors of mini warehouses and self-storage units |
16,682 | - | 16,682 | 2.58 | ||||||||||||
| Lessors of nonresidential buildings |
67,782 | - | 67,782 | 10.49 | ||||||||||||
| Lessors of other real estate property |
31,675 | - | 31,675 | 4.90 | ||||||||||||
| Multifamily |
113,789 | - | 113,789 | 17.63 | ||||||||||||
| Office space |
20,553 | 38,104 | 58,657 | 9.08 | ||||||||||||
| Other real estate rental and leasing |
6,836 | - | 6,836 | 1.06 | ||||||||||||
| Real estate leasing activities |
- | 27,465 | 27,465 | 4.25 | ||||||||||||
| Wholesale and retail trade |
11,969 | 12,705 | 24,674 | 3.82 | ||||||||||||
| Other |
37,876 | 25,253 | 63,129 | 9.77 | ||||||||||||
| Total commercial real estate |
$ | 461,146 | $ | 184,816 | $ | 645,962 | 100.00 | % | ||||||||
Commercial real estate loans made up $670.40 million or 43.0% of the Bank's total loan portfolio at September 30, 2025, compared to $645.96 million or 42.5% at December 31, 2024. The Bank's commercial real estate loans are primarily permanent loans secured by improved property such as office buildings, retail stores, commercial warehouses, and apartment buildings. The terms and conditions of each loan are tailored to the needs of the borrower and based on the financial strength of the project and any guarantors. Generally, commercial real estate loans originated by the Bank will not exceed 80.0% of the appraised value or the selling price of the property, whichever is less. The Bank's commercial real estate portfolio's average loan-to-value ratio range was 32% to 48% as of September 30, 2025.
The Bank's asset quality with respect to commercial real estate loans has remained strong despite recent economic and market conditions. The Bank has limited exposure in the office space sector, none of which is located in central business districts. Management believes that the Bank has implemented appropriate risk management practices, including regular and ongoing loan reviews, stress tests, and sensitivity analysis. Loan reviews include monitoring past due rates, non-performing trends, concentrations, loan to value ratios, and other qualitative factors. The Bank's loan policy is robust and is updated annually or as needed to meet the risk mitigation and strategic goals of the bank.
Financial Condition – continued
Deposits and Other Sources of Funds
The following table includes deposit accounts by category:
| September 30, |
December 31, |
|||||||||||||||
| 2025 |
2024 |
|||||||||||||||
| Percent |
Percent |
|||||||||||||||
| Amount |
of Total |
Amount |
of Total |
|||||||||||||
| (Dollars in Thousands) |
||||||||||||||||
| Noninterest checking |
$ | 429,064 | 24.49 | % | $ | 419,211 | 24.94 | % | ||||||||
| Interest-bearing checking |
215,128 | 12.28 | 221,476 | 13.17 | ||||||||||||
| Savings |
204,367 | 11.66 | 210,572 | 12.52 | ||||||||||||
| Money market |
450,787 | 25.73 | 367,094 | 21.83 | ||||||||||||
| Total |
1,299,346 | 74.16 | 1,218,353 | 72.46 | ||||||||||||
| Certificates of deposit accounts: |
||||||||||||||||
| IRA certificates |
21,150 | 1.21 | 21,419 | 1.27 | ||||||||||||
| Other certificates |
431,683 | 24.63 | 441,456 | 26.27 | ||||||||||||
| Total certificates of deposit |
452,833 | 25.84 | 462,875 | 27.54 | ||||||||||||
| Total deposits |
$ | 1,752,179 | 100.00 | % | $ | 1,681,228 | 100.00 | % | ||||||||
Deposits increased by $70.95 million, or 4.2%, from December 31, 2024 to September 30, 2025. Money market deposits increased by $83.70 million and noninterest checking increased by $9.85 million. These increases were partially offset by decreases in certificates of deposits of $10.05 million, interest-bearing checking of $6.35 million and savings of $6.20 million.
The estimated amount of uninsured deposits was approximately $339.7 million or 19% of total deposits at September 30, 2025 compared to approximately $323.0 million or 19% of total deposits at December 31, 2024.
The following table summarizes borrowing activity:
| September 30, |
December 31, |
|||||||||||||||
| 2025 |
2024 |
|||||||||||||||
| Net |
Percent |
Net |
Percent |
|||||||||||||
| Amount |
of Total |
Amount |
of Total |
|||||||||||||
| (Dollars in Thousands) |
||||||||||||||||
| FHLB advances and other borrowings |
$ | 79,167 | 57.19 | % | $ | 140,930 | 70.44 | % | ||||||||
| Other long-term debt: |
||||||||||||||||
| Subordinated debentures fixed at 5.50% to floating effective July 1, 2025, due 2030 |
14,840 | 10.72 | 14,815 | 7.40 | ||||||||||||
| Subordinated debentures fixed at 3.50% to floating, due 2032 |
39,266 | 28.37 | 39,179 | 19.58 | ||||||||||||
| Subordinated debentures variable at 3-Month SOFR plus 1.68%, due 2035 |
5,155 | 3.72 | 5,155 | 2.58 | ||||||||||||
| Total other long-term debt |
59,261 | 42.81 | 59,149 | 29.56 | ||||||||||||
| Total borrowings |
$ | 138,428 | 100.00 | % | $ | 200,079 | 100.00 | % | ||||||||
Total borrowings decreased by $61.65 million, or 30.8%, to $138.43 million at September 30, 2025 from $200.08 million at December 31, 2024, due to a decrease in FHLB advances and other borrowings.
On October 1, 2025, the Company redeemed all of the 5.50% fixed-to-floating rate subordinated notes due July 1, 2030, having an aggregate principal amount of $15.00 million. The Company utilized its line of credit with a correspondent bank to finance the redemption payment. The Company has drawn $15.00 million on the line of credit, which has a two-year maturity and has a variable interest rate equal to 0.50% below the prime rate as published in the Wall Street Journal.
Shareholders’ Equity
Total shareholders’ equity increased by $11.72 million, or 6.7%, to $186.49 million at September 30, 2025 from $174.77 million at December 31, 2024. The increase was primarily attributed to net income of $10.11 million and a decrease in unrealized losses of securities available for sale of $5.38 million. These increases were partially offset by dividends paid of $3.42 million and treasury stock repurchases of $1.16 million.
Analysis of Net Interest Income
The Bank’s earnings have historically depended primarily upon net interest income, which is the difference between interest income earned on loans and investments and interest paid on deposits and any borrowed funds. It is the single largest component of Eagle’s operating income. Net interest income is affected by (i) the difference between rates of interest earned on loans and investments and rates paid on interest-bearing deposits and borrowings (the “interest rate spread”) and (ii) the relative amounts of loans and investments and interest-bearing deposits and borrowings.
The following table includes average balances for financial condition items, as well as interest and dividends and average yields related to the average balances. All average balances are daily average balances. Nonaccrual loans were included in the computation of average balances, but have been reflected in the table as loans carrying a zero yield. The yields include the effect of deferred fees and discounts and premiums that are amortized or accreted to interest income or expense.
| For the Three Months Ended September 30, |
||||||||||||||||||||||||
| 2025 |
2024 |
|||||||||||||||||||||||
| Average |
Interest |
Average |
Interest |
|||||||||||||||||||||
| Daily |
and |
Yield/ |
Daily |
and |
Yield/ |
|||||||||||||||||||
| Balance |
Dividends |
Cost(4) |
Balance |
Dividends |
Cost(4) |
|||||||||||||||||||
| (Dollars in Thousands) |
||||||||||||||||||||||||
| Assets: |
||||||||||||||||||||||||
| Interest-earning assets: |
||||||||||||||||||||||||
| Investment securities |
$ | 280,683 | $ | 2,322 | 3.28 | % | $ | 305,730 | $ | 2,598 | 3.37 | % | ||||||||||||
| FHLB and FRB stock |
10,233 | 225 | 8.72 | 14,909 | 266 | 7.08 | ||||||||||||||||||
| Loans receivable(1) |
1,581,510 | 25,213 | 6.32 | 1,547,246 | 23,802 | 6.10 | ||||||||||||||||||
| Other earning assets |
7,375 | 74 | 3.98 | 6,784 | 94 | 5.50 | ||||||||||||||||||
| Total interest-earning assets |
1,879,801 | 27,834 | 5.87 | 1,874,669 | 26,760 | 5.66 | ||||||||||||||||||
| Noninterest-earning assets |
251,514 | 242,170 | ||||||||||||||||||||||
| Total assets |
$ | 2,131,315 | $ | 2,116,839 | ||||||||||||||||||||
| Liabilities and equity: |
||||||||||||||||||||||||
| Interest-bearing liabilities: |
||||||||||||||||||||||||
| Deposit accounts: |
||||||||||||||||||||||||
| Checking |
$ | 219,932 | $ | 110 | 0.20 | % | $ | 212,451 | $ | 98 | 0.18 | % | ||||||||||||
| Savings |
196,886 | 31 | 0.06 | 208,199 | 33 | 0.06 | ||||||||||||||||||
| Money market |
450,622 | 2,842 | 2.50 | 359,018 | 2,326 | 2.57 | ||||||||||||||||||
| Certificates of deposit |
456,416 | 4,196 | 3.65 | 435,610 | 4,733 | 4.31 | ||||||||||||||||||
| FHLB advances and other borrowings |
99,266 | 1,144 | 4.57 | 228,467 | 3,084 | 5.36 | ||||||||||||||||||
| Other long-term debt |
59,242 | 823 | 5.51 | 59,099 | 684 | 4.59 | ||||||||||||||||||
| Total interest-bearing liabilities |
1,482,364 | 9,146 | 2.45 | 1,502,844 | 10,958 | 2.89 | ||||||||||||||||||
| Noninterest checking |
422,231 | 406,976 | ||||||||||||||||||||||
| Other noninterest-bearing liabilities |
43,898 | 41,857 | ||||||||||||||||||||||
| Total liabilities |
1,948,493 | 1,951,677 | ||||||||||||||||||||||
| Total equity |
182,822 | 165,162 | ||||||||||||||||||||||
| Total liabilities and equity |
$ | 2,131,315 | $ | 2,116,839 | ||||||||||||||||||||
| Net interest income/interest rate spread(2) |
$ | 18,688 | 3.42 | % | $ | 15,802 | 2.77 | % | ||||||||||||||||
| Net interest margin(3) |
3.94 | % | 3.34 | % | ||||||||||||||||||||
| Total interest-earning assets to interest-bearing liabilities |
126.81 | % | 124.74 | % | ||||||||||||||||||||
| (1) Includes loans held-for-sale. |
| (2) Interest rate spread represents the difference between the average yield on interest-earning assets and the average rate on interest-bearing liabilities. |
| (3) Net interest margin represents income before the provision for loan losses divided by average interest-earning assets. |
| (4) For purposes of this table, tax exempt income is not calculated on a tax equivalent basis. |
| For the Nine Months Ended September 30, |
||||||||||||||||||||||||
| 2025 |
2024 |
|||||||||||||||||||||||
| Average |
Interest |
Average |
Interest |
|||||||||||||||||||||
| Daily |
and |
Yield/ |
Daily |
and |
Yield/ |
|||||||||||||||||||
| Balance |
Dividends |
Cost(4) |
Balance |
Dividends |
Cost(4) |
|||||||||||||||||||
| (Dollars in Thousands) |
||||||||||||||||||||||||
| Assets: |
||||||||||||||||||||||||
| Interest-earning assets: |
||||||||||||||||||||||||
| Investment securities |
$ | 287,176 | $ | 7,170 | 3.34 | % | $ | 308,688 | $ | 7,953 | 3.43 | % | ||||||||||||
| FHLB and FRB stock |
11,126 | 721 | 8.66 | 13,825 | 777 | 7.49 | ||||||||||||||||||
| Loans receivable(1) |
1,554,547 | 72,975 | 6.28 | 1,519,951 | 68,526 | 6.01 | ||||||||||||||||||
| Other earning assets |
6,328 | 187 | 3.95 | 5,004 | 268 | 7.14 | ||||||||||||||||||
| Total interest-earning assets |
1,859,177 | 81,053 | 5.83 | 1,847,468 | 77,524 | 5.59 | ||||||||||||||||||
| Noninterest-earning assets |
250,277 | 239,483 | ||||||||||||||||||||||
| Total assets |
$ | 2,109,454 | $ | 2,086,951 | ||||||||||||||||||||
| Liabilities and equity: |
||||||||||||||||||||||||
| Interest-bearing liabilities: |
||||||||||||||||||||||||
| Deposit accounts: |
||||||||||||||||||||||||
| Checking |
$ | 219,903 | $ | 309 | 0.19 | % | $ | 217,158 | $ | 283 | 0.17 | % | ||||||||||||
| Savings |
200,494 | 93 | 0.06 | 214,763 | 102 | 0.06 | ||||||||||||||||||
| Money market |
414,284 | 7,549 | 2.44 | 348,695 | 6,495 | 2.48 | ||||||||||||||||||
| Certificates of deposit |
458,917 | 12,976 | 3.78 | 437,644 | 13,742 | 4.18 | ||||||||||||||||||
| FHLB advances and other borrowings |
121,145 | 4,229 | 4.67 | 200,667 | 8,206 | 5.45 | ||||||||||||||||||
| Other long-term debt |
59,203 | 2,162 | 4.88 | 59,062 | 2,048 | 4.62 | ||||||||||||||||||
| Total interest-bearing liabilities |
1,473,946 | 27,318 | 2.48 | 1,477,989 | 30,876 | 2.78 | ||||||||||||||||||
| Noninterest checking |
414,862 | 406,376 | ||||||||||||||||||||||
| Other noninterest-bearing liabilities |
40,947 | 39,480 | ||||||||||||||||||||||
| Total liabilities |
1,929,755 | 1,923,845 | ||||||||||||||||||||||
| Total equity |
179,699 | 163,106 | ||||||||||||||||||||||
| Total liabilities and equity |
$ | 2,109,454 | $ | 2,086,951 | ||||||||||||||||||||
| Net interest income/interest rate spread(2) |
$ | 53,735 | 3.35 | % | $ | 46,648 | 2.81 | % | ||||||||||||||||
| Net interest margin(3) |
3.86 | % | 3.36 | % | ||||||||||||||||||||
| Total interest-earning assets to interest-bearing liabilities |
126.14 | % | 125.00 | % | ||||||||||||||||||||
| (1) Includes loans held-for-sale. |
| (2) Interest rate spread represents the difference between the average yield on interest-earning assets and the average rate on interest-bearing liabilities. |
| (3) Net interest margin represents income before the provision for loan losses divided by average interest-earning assets. |
| (4) For purposes of this table, tax exempt income is not calculated on a tax equivalent basis. |
Net Interest Margin (NIM). Net interest margin for the three months ended September 30, 2025 was 3.94%, an increase of 60 basis points compared to September 30, 2024. For the nine months ended September 30, 2025, net interest margin was 3.86%, an increase of 50 basis points compared to the nine months ended September 30, 2024. The change in NIM reflects the increase in yields on interest-earning assets and the decrease in the average rate on interest-bearing liabilities.
Rate/Volume Analysis
The following tables present the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to: (1) changes in volume multiplied by the old rate; (2) changes in rate, which are changes in rate multiplied by the old volume; and (3) changes not solely attributable to rate or volume, which have been allocated proportionately to the change due to volume and the change due to rate.
| For the Three Months Ended September 30, |
||||||||||||||||||||||||
| 2025 |
2024 |
|||||||||||||||||||||||
| Due to |
Due to |
|||||||||||||||||||||||
| Volume |
Rate |
Net |
Volume |
Rate |
Net |
|||||||||||||||||||
| (In Thousands) |
||||||||||||||||||||||||
| Interest-earning assets: |
||||||||||||||||||||||||
| Investment securities |
$ | (213 | ) | $ | (63 | ) | $ | (276 | ) | $ | (119 | ) | $ | (77 | ) | $ | (196 | ) | ||||||
| FHLB and FRB stock |
(83 | ) | 42 | (41 | ) | 9 | 45 | 54 | ||||||||||||||||
| Loans receivable(1) |
527 | 884 | 1,411 | 1,008 | 1,726 | 2,734 | ||||||||||||||||||
| Other earning assets |
8 | (28 | ) | (20 | ) | 36 | 38 | 74 | ||||||||||||||||
| Total interest-earning assets |
239 | 835 | 1,074 | 934 | 1,732 | 2,666 | ||||||||||||||||||
| Interest-bearing liabilities: |
||||||||||||||||||||||||
| Checking |
3 | 9 | 12 | (6 | ) | 16 | 10 | |||||||||||||||||
| Savings |
(2 | ) | - | (2 | ) | (4 | ) | (1 | ) | (5 | ) | |||||||||||||
| Money Market |
593 | (77 | ) | 516 | 166 | 584 | 750 | |||||||||||||||||
| Certificates of deposit |
226 | (763 | ) | (537 | ) | 437 | 846 | 1,283 | ||||||||||||||||
| FHLB advances and other borrowings |
(1,744 | ) | (196 | ) | (1,940 | ) | 493 | (81 | ) | 412 | ||||||||||||||
| Other long-term debt |
2 | 137 | 139 | 2 | (1 | ) | 1 | |||||||||||||||||
| Total interest-bearing liabilities |
(922 | ) | (890 | ) | (1,812 | ) | 1,088 | 1,363 | 2,451 | |||||||||||||||
| Change in net interest income |
$ | 1,161 | $ | 1,725 | $ | 2,886 | $ | (154 | ) | $ | 369 | $ | 215 | |||||||||||
| For the Nine Months Ended September 30, |
||||||||||||||||||||||||
| 2025 |
2024 |
|||||||||||||||||||||||
| Due to |
Due to |
|||||||||||||||||||||||
| Volume |
Rate |
Net |
Volume |
Rate |
Net |
|||||||||||||||||||
| (In Thousands) |
||||||||||||||||||||||||
| Interest-earning assets: |
||||||||||||||||||||||||
| Investment securities |
$ | (554 | ) | $ | (229 | ) | $ | (783 | ) | $ | (696 | ) | $ | 63 | $ | (633 | ) | |||||||
| FHLB and FRB stock |
(152 | ) | 96 | (56 | ) | 46 | 251 | 297 | ||||||||||||||||
| Loans receivable(1) |
1,560 | 2,889 | 4,449 | 4,197 | 6,387 | 10,584 | ||||||||||||||||||
| Other earning assets |
71 | (152 | ) | (81 | ) | 63 | 139 | 202 | ||||||||||||||||
| Total interest-earning assets |
925 | 2,604 | 3,529 | 3,610 | 6,840 | 10,450 | ||||||||||||||||||
| Interest-bearing liabilities: |
||||||||||||||||||||||||
| Checking |
4 | 22 | 26 | (50 | ) | (205 | ) | (255 | ) | |||||||||||||||
| Savings |
(7 | ) | (2 | ) | (9 | ) | (13 | ) | 5 | (8 | ) | |||||||||||||
| Money Market |
1,222 | (168 | ) | 1,054 | 165 | 2,645 | 2,810 | |||||||||||||||||
| Certificates of deposit |
668 | (1,434 | ) | (766 | ) | 2,230 | 4,078 | 6,308 | ||||||||||||||||
| FHLB advances and other borrowings |
(3,252 | ) | (725 | ) | (3,977 | ) | 1,928 | 285 | 2,213 | |||||||||||||||
| Other long-term debt |
5 | 109 | 114 | 5 | 8 | 13 | ||||||||||||||||||
| Total interest-bearing liabilities |
(1,360 | ) | (2,198 | ) | (3,558 | ) | 4,265 | 6,816 | 11,081 | |||||||||||||||
| Change in net interest income |
$ | 2,285 | $ | 4,802 | $ | 7,087 | $ | (655 | ) | $ | 24 | $ | (631 | ) | ||||||||||
| (1) Includes loans held-for-sale. |
Results of Operations
The following compares the results of operations for the three months ended September 30, 2025 and 2024.
| Three Months Ended |
||||||||||||||||
| September 30, |
||||||||||||||||
| 2025 |
2024 |
Dollar Change |
Percent Change |
|||||||||||||
| (Dollars in Thousands) |
||||||||||||||||
| Interest and dividend income |
$ | 27,834 | $ | 26,760 | $ | 1,074 | 4.0 | % | ||||||||
| Interest expense |
9,146 | 10,958 | (1,812 | ) | -16.5 | |||||||||||
| Net interest income |
18,688 | 15,802 | 2,886 | 18.3 | ||||||||||||
| Provision for credit losses |
62 | 277 | (215 | ) | -77.6 | |||||||||||
| Net interest income after provision for credit losses |
18,626 | 15,525 | 3,101 | 20.0 | ||||||||||||
| Noninterest income |
4,717 | 4,983 | (266 | ) | -5.3 | |||||||||||
| Noninterest expense |
18,387 | 17,270 | 1,117 | 6.5 | ||||||||||||
| Provision for income taxes |
1,326 | 529 | 797 | 150.7 | ||||||||||||
| Net income |
$ | 3,630 | $ | 2,709 | $ | 921 | 34.0 | % | ||||||||
Net Income. Eagle’s net income for the three months ended September 30, 2025 was $3.63 million compared to $2.71 million for the three months ended September 30, 2024. The increase of $921,000 was due to an increase in net interest income after provision for credit losses of $3.10 million, partially offset by an increase in noninterest expense of $1.12 million and an increase in provision for income taxes of $797,000. For the current period, basic earnings per common share was $0.47 and diluted earnings per common share was $0.46. Basic earning per common share was $0.35 and diluted earnings per common share was $0.34 for the three months ended September 30, 2024.
Net Interest Income. Net interest income increased to $18.69 million for the three months ended September 30, 2025, from $15.80 million for the three months ended September 30, 2024. The increase of $2.89 million, or 18.3% was primarily the result of an increase in interest and dividend income of $1.07 million and a decrease in interest expense of $1.81 million.
Interest and Dividend Income. Interest and dividend income was $27.83 million for the three months ended September 30, 2025, compared to $26.76 million for the three months ended September 30, 2024. The increase of $1.07 million, or 4.0% was driven by interest and fees on loans, which increased to $25.21 million for the three months ended September 30, 2025, from $23.80 million for the three months ended September 30, 2024. The increase in interest and fees on loans was due to an increase in the average yield on loans, as well as an increase in the average balance of loans. The average interest rate earned on loans receivable increased by 22 basis points, from 6.10% for the three months ended September 30, 2024, to 6.32% for the current period. Interest accretion on purchased loans was $234,000 for the three months ended September 30, 2025, which resulted in a five basis point increase in net interest margin compared to $167,000 for the three months ended September 30, 2024, which resulted in a three basis point increase in net interest margin. Average balances for loans receivable, including loans held-for-sale, for the three months ended September 30, 2025 were $1.58 billion compared to $1.55 billion for the three months ended September 30, 2024. This represents an increase of $34.26 million, or 2.2% and was due to organic growth. Interest on investment securities available-for-sale decreased by $276,000 period over period due to a decrease in average balances for investments from $305.73 million for the three months ended September 30, 2024 to $280.68 million for the three months ended September 30, 2025. In addition, average interest rates earned on investments decreased from 3.37% for the three months ended September 30, 2024 to 3.28% for the three months ended September 30, 2025.
Interest Expense. Total interest expense was $9.15 million for the three months ended September 30, 2025, compared to $10.96 million for the three months ended September 30, 2024. The decrease of $1.81 million, or 16.5% was due to a net decrease of $1.80 million in interest expense on total borrowings. The decrease in interest expense on total borrowings was driven by the average balance of FHLB advances and other borrowings decreasing from $228.47 million for the three months ended September 30, 2024, to $99.27 million for the three months ended September 30, 2025. The average rate paid on FHLB advances and other borrowings also decreased from 5.36% for the three months ended September 30, 2024, to 4.57% for the three months ended September 30, 2025. The overall average rate on total deposits was also down from 1.76% for the three months ended September 30, 2024, compared to 1.63% for the three months ended September 30, 2025. However, the average balance for total deposits was $1.62 billion for the three months ended September 30, 2024, compared to $1.75 billion for the three months ended September 30, 2025.
Provision for Credit Losses. Provision for credit losses was $62,000 for the three months ended September 30, 2025, compared to $277,000 for the three months ended September 30, 2024. The provision for credit losses for the three months ended September 30, 2025, included a decrease in the provision for credit losses on loans to $82,000, offset slightly by a recapture of the provision for unfunded commitments of $20,000.
Noninterest Income. Total noninterest income was $4.72 million for the three months ended September 30, 2025, compared to $4.98 million for the three months ended September 30, 2024. The decrease of $266,000, or 5.3% was primarily due to a decrease in appreciation in cash surrender value of life insurance of $654,000 due to a death benefit for bank owned life insurance in 2024. The decrease was partially offset by an increase in mortgage banking, net, of $324,000. Mortgage banking, net, includes net gain on sale of mortgage loans which increased to $2.23 million for the three months ended September 30, 2025, compared to $1.69 million for the three months ended September 30, 2024. During the three months ended September 30, 2025, $68.26 million residential mortgage loans were sold compared to $51.02 million in the three months ended September 30, 2024. However, gross margin levels decreased slightly from 3.31% for the three months ended September 30, 2024, to 3.27% for the three months ended September 30, 2025.
Noninterest Expense. Noninterest expense was $18.39 million for the three months ended September 30, 2025, compared to $17.27 million for the three months ended September 30, 2024, an increase of $1.12 million, or 6.5%. The driver of the increase was salaries and employee benefits which increased $1.30 million.
Provision for Income Taxes. Provision for income taxes was $1.33 million for the three months ended September 30, 2025, compared to $529,000 for the three months ended September 30, 2024. The effective tax rate was 26.8% for the current period compared to 16.3% for the three months ended September 30, 2024. The effective tax rate has started to rise as the Company’s pretax earnings have increased at a faster pace than tax-exempt income.
The following compares the results of operations for the nine months ended September 30, 2025 and 2024.
| Nine Months Ended |
||||||||||||||||
| September 30, |
||||||||||||||||
| 2025 |
2024 |
Dollar Change |
Percent Change |
|||||||||||||
| (Dollars in Thousands) |
||||||||||||||||
| Interest and dividend income |
$ | 81,053 | $ | 77,524 | $ | 3,529 | 4.6 | % | ||||||||
| Interest expense |
27,318 | 30,876 | (3,558 | ) | -11.5 | |||||||||||
| Net interest income |
53,735 | 46,648 | 7,087 | 15.2 | ||||||||||||
| Provision for credit losses |
1,142 | 554 | 588 | 106.1 | ||||||||||||
| Net interest income after provision for credit losses |
52,593 | 46,094 | 6,499 | 14.1 | ||||||||||||
| Noninterest income |
13,540 | 13,204 | 336 | 2.5 | ||||||||||||
| Noninterest expense |
53,319 | 51,610 | 1,709 | 3.3 | ||||||||||||
| Provision for income taxes |
2,708 | 1,343 | 1,365 | 101.6 | ||||||||||||
| Net income |
$ | 10,106 | $ | 6,345 | $ | 3,761 | 59.3 | % | ||||||||
Net Income. Eagle’s net income for the nine months ended September 30, 2025 was $10.11 million compared to $6.35 million for the nine months ended September 30, 2024. The increase of $3.76 million was due to an increase in net interest income after provision for credit losses of $6.50 million, partially offset by an increase in noninterest expense of $1.71 million and an increase in provision for income taxes of $1.37 million. For the current period, basic earnings per common share was $1.30 and diluted earnings per common share was $1.29. Basic and diluted earnings per common share were both $0.81 for the nine months ended September 30, 2024.
Net Interest Income. Net interest income increased to $53.74 million for the nine months ended September 30, 2025, from $46.65 million for the nine months ended September 30, 2024. The increase of $7.09 million, or 15.2% was primarily the result of an increase in interest and dividend income of $3.53 million and a decrease in interest expense of $3.56 million.
Interest and Dividend Income. Interest and dividend income was $81.05 million for the nine months ended September 30, 2025, compared to $77.52 million for the nine months ended September 30, 2024. The increase of $3.53 million, or 4.6% was driven by interest and fees on loans, which increased to $72.98 million for the nine months ended September 30, 2025, from $68.53 million for the nine months ended September 30, 2024. The increase in interest and fees on loans was due to an increase in the average yield on loans, as well as an increase in the average balance of loans. The average interest rate earned on loans receivable increased by 27 basis points, from 6.01% for the nine months ended September 30, 2024, to 6.28% for the current period. Interest accretion on purchased loans was $1.01 million for the nine months ended September 30, 2025, which resulted in an seven basis point increase in net interest margin compared to $590,000 for the nine months ended September 30, 2024, which resulted in a four basis point increase in net interest margin. Average balances for loans receivable, including loans held-for-sale, for the nine months ended September 30, 2025 were $1.55 billion compared to $1.52 billion for the nine months ended September 30, 2024. This represents an increase of $34.60 million, or 2.3% and was due to organic growth. Interest on investment securities available-for-sale decreased by $783,000 period over period, due to the decrease in average balances for investments from $308.69 million for the nine months ended September 30, 2024 to $287.18 million for the nine months ended September 30, 2025. In addition, average interest rates earned on investments decreased from 3.43% for the nine months ended September 30, 2024, to 3.34% for the nine months ended September 30, 2025.
Interest Expense. Total interest expense was $27.32 million for the nine months ended September 30, 2025, compared to $30.88 million for the nine months ended September 30, 2024. The decrease of $3.56 million, or 11.5% was primarily due to a net decrease of $3.87 million in interest expense on total borrowings. The decrease in interest expense on total borrowings was driven by the average balance of FHLB advances and other borrowings decreasing from $200.67 million for the nine months ended September 30, 2024, to $121.15 million for the nine months ended September 30, 2025. The average rate paid on FHLB advances and other borrowings also decreased from 5.45% for the nine months ended September 30, 2024, to 4.67% for the nine months ended September 30, 2025. The overall average rate on total deposits was down from 1.69% for the nine months ended September 30, 2024, compared to 1.64% for the nine months ended September 30, 2025. However, the average balance for total deposits was $1.62 billion for the nine months ended September 30, 2024, compared to $1.71 billion for the nine months ended September 30, 2025.
Provision for Credit Losses. Provision for credit losses was $1.14 million for the nine months ended September 30, 2025, compared to $554,000 for the nine months ended September 30, 2024. The increase in the provision was largely driven by loan growth. The provision for credit losses for the nine months ended September 30, 2025, included an increase in the provision for credit losses on loans to $1.01 million and an increase in the provision for unfunded commitments to $130,000.
Noninterest Income. Total noninterest income was $13.54 million for the nine months ended September 30, 2025, compared to $13.20 million for the nine months ended September 30, 2024. The increase of $336,000, or 2.5% was primarily due to an increase in mortgage banking, net, of $781,000, partially offset by a decrease in appreciation in cash surrender value of life insurance of $519,000 due to a death benefit for bank owned life insurance in 2024. Mortgage banking, net, includes net gain on sale of mortgage loans which increased to $5.66 million for the nine months ended September 30, 2025, compared to $4.70 million for the nine months ended September 30, 2024. During the nine months ended September 30, 2025, $165.65 million residential mortgage loans were sold compared to $147.81 million in the nine months ended September 30, 2024. Gross margin levels increased from 3.18% for the nine months ended September 30, 2024, to 3.42% for the nine months ended September 30, 2025.
Noninterest Expense. Noninterest expense was $53.32 million for the nine months ended September 30, 2025, compared to $51.61 million for the nine months ended September 30, 2024, an increase of $1.71 million, or 3.3%. Salaries and employee benefits increased by $1.62 million. Software subscriptions also increased by $503,000 due to new system implementations. However, contract changes led to lower data processing expense which decreased $533,000.
Provision for Income Taxes. Provision for income taxes was $2.71million for the nine months ended September 30, 2025, compared to $1.34 million for the nine months ended September 30, 2024. The effective tax rate was 21.1% for the current period and 17.5% for the nine months ended September 30, 2024. The effective tax rate has started to rise as the Company’s pretax earnings have increased at a faster pace than tax-exempt income.
Liquidity and Capital Resources
Liquidity
The Bank is required by regulation to maintain sufficient levels of liquidity for safety and soundness purposes. Appropriate levels of liquidity will depend upon the types of activities in which the company engages. For internal reporting purposes, the Bank uses policy minimums of 1.0% and 8.0% for “basic surplus” and “basic surplus with FHLB” as internally defined. In general, the “basic surplus” is a calculation of the ratio of unencumbered short-term assets reduced by estimated percentages of CD maturities and other deposits that may leave the Bank in the next 90 days divided by total assets. “Basic surplus with FHLB” adds to “basic surplus” the additional borrowing capacity the Bank has with the FHLB of Des Moines. The Bank exceeded those minimum ratios as of September 30, 2025 and December 31, 2024.
The Bank’s primary sources of funds are deposits, repayment of loans and mortgage-backed securities, maturities of investments, funds provided from operations, advances from the FHLB of Des Moines and other borrowings. Scheduled repayments of loans and mortgage-backed securities and maturities of investment securities are generally predictable. However, other sources of funds, such as deposit flows and loan prepayments, can be greatly influenced by the general level of interest rates, economic conditions and competition. The Company uses liquidity resources principally to fund existing and future loan commitments. It also uses them to fund maturing certificates of deposit and demand deposit withdrawals, for investment purposes, to meet operating expenses and capital expenditures, for dividend payments and for stock repurchases to maintain adequate liquidity levels.
Liquidity may be adversely affected by unexpected deposit outflows, higher interest rates paid by competitors, and similar matters. Management monitors projected liquidity needs and determines the level desirable based in part on the Bank's commitments to make loans and management’s assessment of the Bank's ability to generate funds.
The Company's available borrowing capacity was approximately $508.00 million as of September 30, 2025 and $404.00 million as of December 31, 2024.
| September 30, |
December 31, |
|||||||||||||||
| 2025 |
2024 |
|||||||||||||||
| Borrowings |
Remaining Borrowing |
Borrowings |
Remaining Borrowing |
|||||||||||||
| Outstanding |
Capacity |
Outstanding |
Capacity |
|||||||||||||
| (In Thousands) |
||||||||||||||||
| Federal Home Loan Bank advances |
$ | 79,167 | $ | 384,334 | $ | 140,930 | $ | 276,664 | ||||||||
| Federal Reserve Bank discount window |
- | 24,083 | - | 27,349 | ||||||||||||
| Correspondent bank lines of credit |
- | 100,000 | - | 100,000 | ||||||||||||
| Total |
$ | 79,167 | $ | 508,417 | $ | 140,930 | $ | 404,013 | ||||||||
On October 1, 2025, the Company redeemed all of its outstanding 5.50% fixed-to-floating rate subordinated notes due July 1, 2030, having an aggregate principal amount of $15.00 million.
During the first quarter of 2023, the FRB offered a new Bank Term Funding Program ("BTFP") for eligible depository institutions. The BTFP offered loans of up to one year in length to institutions pledging collateral eligible for purchase by FRB such as U.S. treasuries, agency securities, and mortgage-backed securities. These assets were valued at par. In March of 2024, the Company accessed borrowings through the BTFP. In September of 2024, the Company paid off the borrowings.
Brokered deposits are another source of funding the Bank may utilize from time to time. As of September 30, 2025, the Bank had no brokered certificates and $5.53 million in brokered money market deposits. As of December 31, 2024, the Bank had no brokered certificates and $5.57 million in brokered money market deposits. Policy limits for brokered deposits are set at 10% of assets.
In addition to bank level liquidity management, Eagle must manage liquidity at the parent company level for various operating needs, including the servicing of debt, the payment of dividends on our common stock, share repurchases, payment of general corporate expense, and potential capital infusions into subsidiaries. The primary source of liquidity for Eagle consists of dividends from the Bank, which is governed by certain rules and regulations of the Montana Division of Banking and Financial Institutions and the Federal Reserve, and access to capital markets.
Eagle has a $15.00 million line of credit with a correspondent bank. There was no outstanding balance for this line of credit at September 30, 2025 or December 31, 2024. However, the Company utilized this line of credit on October 1, 2025 to finance the redemption payment for the subordinated notes of $15.00 million. The line of credit has a two-year maturity and a variable interest rate equal to 0.50% below the prime rate as published in the Wall Street Journal. The draw is secured by the assets of the Company and includes certain financial covenants and negative covenants. Outstanding draws on the line impact remaining borrowing capacity for the Company’s correspondent bank lines of credit included above
Eagle's ability to receive dividends from the Bank in future periods will depend on several factors, including, without limitation, the Bank's future profits, asset quality, liquidity, and overall condition. In addition, both the Montana Division of Banking and Financial Institutions and Federal Reserve may require approval to pay dividends, based on certain regulatory statutes and limitations.
Eagle presently believes that the sources of liquidity discussed above, including existing liquid funds on hand, are sufficient to meet its anticipated funding needs in the short and long term. However, if economic conditions were to significantly deteriorate, regulatory capital requirements for Eagle or the Bank were to increase as the result of regulatory directives or otherwise, or Eagle were to believe it is prudent to enhance current liquidity levels, then Eagle may seek additional liquidity from external sources.
Capital Resources
As of September 30, 2025, the Bank’s internally determined measurement of sensitivity to interest rate movements as measured by a 200-basis point rise in interest rates scenario, increased the economic value of equity (“EVE”) by 2.4% compared to an increase of 1.7% at December 31, 2024. A 200-basis point decrease in interest rates scenario decreased EVE by 8.3% compared to a decrease of 7.9% at December 31, 2024. The Bank is within the guidelines set forth by the Board of Directors for interest rate risk sensitivity in rising interest rate scenarios.
The Bank's regulatory capital was in excess of all applicable regulatory requirements and the Bank is deemed "well capitalized" pursuant to State of Montana and FRB rules as of September 30, 2025. The Bank's actual capital amounts and ratios as of September 30, 2025 are presented in the table below and all of the ratios, with the exception of the Tier 1 capital adjusted total average assets ratio, include the capital conservation buffer of 2.50%.
| Minimum |
||||||||||||||||||||||||
| To Be Well |
||||||||||||||||||||||||
| Minimum Required |
Capitalized Under |
|||||||||||||||||||||||
| for Capital Adequacy |
Prompt Corrective |
|||||||||||||||||||||||
| Actual |
Purposes |
Action Provisions |
||||||||||||||||||||||
| Amount |
Ratio |
Amount |
Ratio |
Amount |
Ratio |
|||||||||||||||||||
| (Dollars in Thousands) |
||||||||||||||||||||||||
| September 30, 2025: |
||||||||||||||||||||||||
| Total risk-based capital to risk weighted assets |
$ | 238,410 | 13.79 | % | $ | 181,583 | 10.50 | % | $ | 172,936 | 10.00 | % | ||||||||||||
| Tier 1 capital to risk weighted assets |
219,140 | 12.67 | 146,996 | 8.50 | 138,349 | 8.00 | ||||||||||||||||||
| Common equity Tier 1 capital to risk weighted assets |
219,140 | 12.67 | 121,055 | 7.00 | 112,408 | 6.50 | ||||||||||||||||||
| Tier 1 capital to adjusted total average assets |
219,140 | 10.35 | 84,673 | 4.00 | 105,842 | 5.00 | ||||||||||||||||||
| Minimum |
||||||||||||||||||||||||
| To Be Well |
||||||||||||||||||||||||
| Minimum Required |
Capitalized Under |
|||||||||||||||||||||||
| for Capital Adequacy |
Prompt Corrective |
|||||||||||||||||||||||
| Actual |
Purposes |
Action Provisions |
||||||||||||||||||||||
| Amount |
Ratio |
Amount |
Ratio |
Amount |
Ratio |
|||||||||||||||||||
| (Dollars in Thousands) |
||||||||||||||||||||||||
| December 31, 2024: |
||||||||||||||||||||||||
| Total risk-based capital to risk weighted assets |
$ | 229,316 | 13.49 | % | $ | 178,521 | 10.50 | % | $ | 170,020 | 10.00 | % | ||||||||||||
| Tier 1 capital to risk weighted assets |
211,066 | 12.41 | 144,517 | 8.50 | 136,016 | 8.00 | ||||||||||||||||||
| Common equity Tier 1 capital to risk weighted assets |
211,066 | 12.41 | 119,014 | 7.00 | 110,513 | 6.50 | ||||||||||||||||||
| Tier 1 capital to adjusted total average assets |
211,066 | 10.07 | 83,861 | 4.00 | 104,826 | 5.00 | ||||||||||||||||||
Impact of Inflation and Changing Prices
Our condensed consolidated financial statements and the accompanying notes, which are found in Part I, Item 1, have been prepared in accordance with generally accepted accounting principles, which require the measurement of financial position and operating results in terms of historical dollars without considering the change in the relative purchasing power of money over time and due to inflation. The impact of inflation is reflected in the increased cost of our operations. Interest rates have a greater impact on our performance than do the general levels of inflation. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services.
Interest Rate Risk
Interest rate risk is the potential for loss of future earnings resulting from adverse changes in the level of interest rates. Interest rate risk results from several factors and could have a significant impact on the Company’s net interest income, which is the Company's primary source of revenue. Net interest income is affected by changes in interest rates, the relationship between rates on interest-bearing assets and liabilities, the impact of interest rate fluctuations on asset prepayments and the mix of interest-bearing assets and liabilities.
Although interest rate risk is inherent in the banking industry, banks are expected to have sound risk management practices in place to measure, monitor and control interest rate exposures. The objective of interest rate risk management is to contain the risks associated with interest rate fluctuations. The process involves identification and management of the sensitivity of net interest income to changing interest rates.
The ongoing monitoring and management of this risk is an important component of the Company’s asset/liability committee, which is governed by policies established by the Company’s Board that are reviewed and approved annually. The Board delegates responsibility for carrying out the asset/liability management policies to the Bank’s asset/liability committee. In this capacity, the asset/liability committee develops guidelines and strategies impacting the Company’s asset/liability management related activities based upon estimated market risk sensitivity, policy limits and overall market interest rate levels and trends. The Company’s goal of its asset and liability management practices is to maintain or increase the level of net interest income within an acceptable level of interest rate risk.
The Bank has established acceptable levels of interest rate risk as follows for an instantaneous and permanent shock in rates: projected net interest income over the next twelve months (i.e. year-1) will not be reduced by more than 15.0% given an immediate increase or decrease in interest rates of up to 300 basis points, and the subsequent twelve months (i.e. year-2) will not be reduced by more than 20.0% given an immediate increase or decrease in interest rates of up to 300 basis points.
The following table includes the Bank’s net interest income sensitivity analysis.
| Changes in Market |
Rate Sensitivity |
Policy |
Policy |
|||||
| Interest Rates |
As of September 30, 2025 |
Limits |
Limits |
|||||
| (Basis Points) |
Year 1 |
Year 2 |
Year 1 |
Year 2 |
||||
| +300 | -4.9% | 4.4% | -15.0% | -20.0% | ||||
| +200 | -3.1% | 4.7% | -15.0% | -15.0% | ||||
| +100 | -1.4% | 5.3% | -10.0% | -10.0% | ||||
| -100 | 0.4% | 3.5% | -10.0% | -10.0% | ||||
| -200 | 0.7% | 1.3% | -15.0% | -15.0% | ||||
| -300 | 2.4% | 0.4% | -15.0% | -20.0% | ||||
The accounting and financial reporting policies of Eagle are in accordance with generally accepted accounting principles ("GAAP") and conform to the accounting and reporting guidelines prescribed by bank regulatory authorities. Eagle has identified certain of its accounting policies as “critical accounting policies,” consisting of those related to the allowance for credit losses and business combinations. In determining which accounting policies are critical in nature, Eagle has identified the policies that require significant judgment or involve complex estimates. It is management's practice to discuss critical accounting policies with the Board of Directors' Audit Committee on a periodic basis, including the development, selection, implementation, and disclosure of the critical accounting policies. The application of these policies has a significant impact on Eagle’s unaudited interim consolidated financial statements. Eagle’s financial results could differ significantly if different judgments or estimates are used in the application of these policies. All accounting policies described in "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 – Organization and Summary of Significant Accounting Policies" in Eagle’s 2024 Form 10-K should be reviewed for a greater understanding of how we record and report our financial performance. There have been no significant changes to the accounting policies, estimates, and assumptions, or the judgments affecting the application of these estimates and assumptions from those disclosed in Eagle’s 2024 Form 10-K, other than the following:
The excess of consideration paid over fair value of net assets acquired is recorded as goodwill. Goodwill is not amortized but is tested at least annually for impairment or more frequently if events occur or circumstances change that indicate impairment may exist. A goodwill impairment test is performed by comparing the fair value of the reporting unit with its carrying value. An impairment charge is recorded for the amount by which the carrying amount exceeds the reporting unit’s fair value. Estimating the fair value of the reporting unit requires the use of inputs and assumptions including projected earnings of the Company in future years for which there is inherent uncertainty.
During the quarter ended September 30, 2024, Management performed a quantitative goodwill impairment test with assistance from a third-party valuation specialist. The interim determination was primarily driven by a revision in the Company’s earnings outlook in comparison to budget. A weighted average of both the market and income approaches was used in valuing the reporting unit’s fair value. The interim goodwill impairment assessment as of August 31, 2024 concluded that goodwill was not impaired. Our quantitative annual impairment test as of October 31, 2024 also did not result in impairment. However, changing economic conditions that may adversely affect the Company's performance, the fair value of its assets and liabilities, or its stock price could result in future impairment. Any resulting impairment loss could have a material adverse impact on the Company’s financial condition and results of operations. Management will continue to monitor events that could influence this conclusion in the future and will perform its annual goodwill impairment test as of October 31, 2025.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
This item has been omitted based on Eagle’s status as a smaller reporting company.
Item 4. Controls and Procedures
As of the end of the period covered by this report, we conducted an evaluation under the supervision and with the participation of our management including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”) of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to management to allow timely decisions regarding required disclosure. Based on that evaluation, our CEO and CFO concluded that as of September 30, 2025, our disclosure controls and procedures were not effective as of such date due to ongoing remediation of a material weakness in internal control over financial reporting as of December 31, 2024 described below.
We identified a material weakness in internal control over financial reporting related to the design of controls over preparation of the statement of cash flows. Specifically, the Company’s controls were not designed at a sufficient level of precision to ensure the proper classification of borrowings as short-term or long-term so that the borrowings from and repayments to were appropriately presented either on a net basis or a gross basis within the financing section of the statement of cash flows. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. The control deficiency created a reasonable possibility that a material misstatement to the consolidated financial statements would not be prevented or detected on a timely basis.
Management, with oversight from the Audit Committee, has implemented and continues to implement measures designed to ensure that the control deficiency contributing to the material weakness is remediated so that controls are designed, implemented and operating effectively. The remediation action included restructuring the design of control activities, including consideration of system impacts, surrounding the classification of borrowing activities in order to facilitate appropriate presentation in the financial statements. We believe this action has remediated the material weakness.
Except as noted above, during the last quarter, there were no changes in the Company’s internal control over financial reporting that have materially affected, or were reasonably likely to materially affect, the Company’s internal control over financial reporting.
Part II - OTHER INFORMATION
| Item 1. |
Legal Proceedings. |
Neither the Company nor the Bank is involved in any pending legal proceeding other than non-material legal proceedings occurring in the ordinary course of business.
| Item 1A. |
Risk Factors |
There have not been any material changes in the risk factors previously disclosed in Part 1, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024.
| Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds. |
On April 20, 2023, the Board authorized the repurchase of up to 400,000 shares of its common stock beginning May 1, 2023. Under the plan, shares could be purchased by the Company on the open market or in privately negotiated transactions. The extent to which the company repurchased its shares and the timing of such repurchases depended on market conditions and other corporate considerations. During the second quarter of 2023, 17,901 shares were purchased under this plan at an average price of $12.89 per share. No shares were purchased during the third or fourth quarter of 2023 under this plan. No shares were purchased during the first or second quarter of 2024 under this plan.
| Item 3. |
Defaults Upon Senior Securities. |
Not applicable.
| Item 4. |
Mine Safety Disclosures |
Not applicable.
| Item 5. | Other Information. |
During the three months ended September 30, 2025, none of our directors or officers (as defined in Exchange Act Rule 16a-1(f)) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.
Part II - OTHER INFORMATION - continued
| Item 6. |
Exhibits. |
| Exhibit Number |
Description |
|
|
|
| 3.1 |
Amended and Restated Certificate of Incorporation of Eagle Bancorp Montana, Inc. (incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K filed on February 23, 2010). |
|
|
|
| 3.2 |
Certificate of Amendment to the Amended and Restated Certificate of Incorporation. (incorporated by reference to Exhibit 3.2 of our Quarterly Report on Form 10-Q filed on May 9, 2019). |
|
|
|
| 3.3 |
Bylaws of Eagle Bancorp Montana, Inc., amended as of August 20, 2015 (incorporated by reference to 3.1 of our Current Report on Form 8-K filed on August 25, 2015). |
| 31.1 |
Certification by Laura F. Clark, Chief Executive Officer, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 (a) of the Sarbanes-Oxley Act of 2002. |
|
|
|
| 31.2 |
Certification by Miranda J. Spaulding, Chief Financial Officer, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 (a) of the Sarbanes-Oxley Act of 2002. |
|
|
|
| 32.1 |
Certification by Laura F. Clark, Chief Executive Officer, and Miranda J. Spaulding, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
| 101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)(1) |
| 101.SCH |
Inline XBRL Taxonomy Extension Schema Document(1) |
|
|
|
| 101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document(1) |
|
|
|
| 101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document(1) |
|
|
|
| 101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document(1) |
|
|
|
| 101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document(1) |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
| (1) These interactive data files shall not be deemed filed for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, or Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under those sections. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
|
|
|
|
EAGLE BANCORP MONTANA, INC. |
|
|
|
|
|
| Date: November 5, 2025 |
By: |
/s/ Laura F. Clark |
|
|
Laura F. Clark | |
|
|
President/CEO |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Date: November 5, 2025 | By: |
/s/ Miranda J. Spaulding |
|
|
Miranda J. Spaulding |
|
|
|
SVP/CFO |
|
FAQ
How did EBMT’s Q3 2025 earnings compare year over year?
What were EBMT’s key interest income and expense metrics in Q3 2025?
What did EBMT report for deposits and loans at September 30, 2025?
Did EBMT make changes to its debt after quarter-end?
What was EBMT’s comprehensive income for Q3 2025?
What shareholder actions occurred during the period?
What was EBMT’s shareholders’ equity at quarter-end?
