Eagle Bancorp Montana Earns $1.7 Million, or $0.22 per Diluted Share, in the Second Quarter of 2024; Increases Quarterly Cash Dividend to $0.1425 Per Share

HELENA, Mont., July 23, 2024 (GLOBE NEWSWIRE) — Eagle Bancorp Montana, Inc. (NASDAQ: EBMT), (the “Company,” “Eagle”), the holding company of Opportunity Bank of Montana (the “Bank”), today reported net income of $1.7 million, or $0.22 per diluted share, in the second quarter of 2024, compared to $1.9 million, or $0.24 per diluted share, in the preceding quarter, and $2.0 million, or $0.26 per diluted share, in the second quarter of 2023. In the first six months of 2024, net income was $3.6 million, or $0.46 per diluted share, compared to $5.3 million, or $0.67 per diluted share, in the first six months of 2023.

Eagle’s board of directors increased its quarterly cash dividend to $0.1425 per share on July 22, 2024. The dividend will be payable September 6, 2024, to shareholders of record August 16, 2024. The current dividend represents an annualized yield of 4.27% based on recent market prices.

“We produced solid second quarter results, fueled by disciplined loan growth, pristine credit quality metrics and net interest margin expansion, compared to the previous quarter,” said Laura F. Clark, President and CEO. “We continue to attract high quality loans, achieving loan growth of 6.8% year-over-year, even in the current rate environment. Additionally, the increase in loan yields more than offset the increase in funding costs, contributing to net interest margin expansion for the second consecutive quarter. We are one of three publicly traded financial institutions based in Montana, and with our strong deposit franchise and healthy capital levels we are well positioned to continue to grow in our markets.”

Second Quarter 2024 Highlights (at or for the three-month period ended June 30, 2024, except where noted):

  • Net income was $1.7 million, or $0.22 per diluted share, in the second quarter of 2024, compared to $1.9 million, or $0.24 per diluted share, in the preceding quarter, and $2.0 million, or $0.26 per diluted share, in the second quarter a year ago.
  • Net interest margin (“NIM”) was 3.41% in the second quarter of 2024, an eight basis point improvement compared to 3.33% in the preceding quarter, and a six basis point contraction compared to 3.47% in the second quarter a year ago.
  • Revenues (net interest income before the provision for credit losses, plus noninterest income) were $19.9 million in the second quarter of 2024, compared to $19.2 million in the preceding quarter and $21.5 million in the second quarter a year ago.
  • The accretion of the loan purchase discount into loan interest income from acquisitions was $304,000 in the second quarter of 2024, compared to accretion on purchased loans from acquisitions of $118,000 in the preceding quarter.
  • Total loans increased 6.8% to $1.52 billion, at June 30, 2024, compared to $1.42 billion a year earlier, and increased 1.3% compared to $1.50 billion at March 31, 2024.
  • Total deposits increased 2.6% to $1.62 billion at June 30, 2024, compared to $1.58 billion a year earlier, and decreased 1.0% compared to $1.64 billion at March 31, 2024.
  • The allowance for credit losses represented 1.11% of portfolio loans and 330.8% of nonperforming loans at June 30, 2024, compared to 1.09% of portfolio loans and 156.7% of nonperforming loans at June 30, 2023.
  • The Company’s available borrowing capacity was approximately $374.5 million at June 30, 2024.
        June 30, 2024  
(Dollars in thousands)     Borrowings Outstanding Remaining Borrowing
Capacity
 
Federal Home Loan Bank advances $ 195,050 $ 245,326  
Federal Reserve Bank discount window     29,222  
Federal Reserve Bank Term Funding Program         20,000    
Correspondent bank lines of credit     100,000  
Total       $ 215,050 $ 374,548  
             
  • The Company paid a quarterly cash dividend in the second quarter of $0.14 per share on June 7, 2024, to shareholders of record May 17, 2024.

Balance Sheet Results

Eagle’s total assets increased 3.7% to $2.10 billion at June 30, 2024, compared to $2.02 billion a year ago, and increased 1.1% compared to $2.08 billion three months earlier. The investment securities portfolio totaled $306.9 million at June 30, 2024, compared to $326.0 million a year ago, and $311.2 million at March 31, 2024.

Eagle originated $60.6 million in new residential mortgages during the quarter and sold $53.2 million in residential mortgages, with an average gross margin on sale of mortgage loans of approximately 3.01%. This production compares to residential mortgage originations of $50.4 million in the preceding quarter with sales of $43.6 million and an average gross margin on sale of mortgage loans of approximately 3.25%. Mortgage volumes remain low as rates have continued to be elevated relative to rates on existing mortgages.

Total loans increased $96.0 million, or 6.8%, compared to a year ago, and $20.4 million, or 1.3%, from three months earlier. Commercial real estate loans increased 8.6% to $627.3 million at June 30, 2024, compared to $577.7 million a year earlier. Commercial real estate loans were comprised of 67.1% non-owner occupied and 32.9% owner occupied at June 30, 2024. Agricultural and farmland loans increased 6.4% to $279.5 million at June 30, 2024, compared to $262.8 million a year earlier, as the Company continues to build expertise in agricultural lending. Residential mortgage loans increased 17.7% to $157.1 million, compared to $133.4 million a year earlier. Commercial loans increased 11.3% to $143.6 million, compared to $129.1 million a year ago. Commercial construction and development loans decreased 13.3% to $137.4 million, compared to $158.5 million a year ago. Home equity loans increased 16.0% to $93.2 million, residential construction loans increased 1.4% to $50.2 million, and consumer loans decreased 3.1% to $29.1 million, compared to a year ago.

“Our deposit mix continues to shift towards higher yielding deposits due to the higher interest rate environment. However, the increase in our overall cost of deposits has slowed, and we anticipate deposit rates will continue to stabilize over the next several quarters,” said Miranda Spaulding, CFO.

Total deposits increased 2.6% to $1.62 billion at June 30, 2024, compared to $1.58 billion at June 30, 2023, and decreased 1.0% compared to $1.64 billion at March 31, 2024. Noninterest-bearing checking accounts represented 24.7%, interest-bearing checking accounts represented 13.0%, savings accounts represented 13.6%, money market accounts comprised 22.2% and time certificates of deposit made up 26.5% of the total deposit portfolio at June 30, 2024. Time certificates of deposit include $26.2 million in brokered certificates at June 30, 2024, compared to $15.1 million at June 30, 2023, and $50.0 million at March 31, 2024. The average cost of total deposits was 1.70% in the second quarter of 2024, compared to 1.62% in the preceding quarter and 1.05% in the second quarter of 2023. The estimated amount of uninsured deposits at both June 30, 2024 and March 31, 2024, was approximately $284.0 million, or 17% of total deposits.

Shareholders’ equity was $170.2 million at June 30, 2024, compared to $162.7 million a year earlier and $168.9 million three months earlier. Book value per share was $21.23 at June 30, 2024, compared to $20.37 a year earlier and $21.07 three months earlier. Tangible book value per share, a non-GAAP financial measure calculated by dividing shareholders’ equity, less goodwill and core deposit intangible, by common shares outstanding, was $16.25 at June 30, 2024, compared to $15.19 a year earlier and $16.05 three months earlier.  

Operating Results

“Our NIM expanded eight basis points during the second quarter compared to the preceding quarter, boosted by growth and higher yields on interest earning assets in addition to a slowdown in cost of funds expansion,” said Clark. “We anticipate continued improvement in our cost of funds as we continue through this rate cycle.”

Eagle’s NIM was 3.41% in the second quarter of 2024, compared to 3.33% in the preceding quarter, and a six basis-point contraction compared to 3.47% in the second quarter a year ago. The interest accretion on acquired loans totaled $304,000 and resulted in a seven basis-point increase in the NIM during the second quarter of 2024, compared to $118,000 and a three basis-point increase in the NIM during the preceding quarter. Funding costs for the second quarter of 2024 were 2.78%, compared to 2.67% in the first quarter of 2024 and 2.06% in the second quarter of 2023. Average yields on interest earning assets for the second quarter of 2024 increased to 5.64%, compared to 5.47% in the first quarter of 2024 and 5.06% in the second quarter a year ago. For the first six months of 2024, the NIM was 3.37% compared to 3.66% for the first six months of 2023.

Net interest income, before the provision for credit losses, increased 2.7% to $15.6 million in the second quarter of 2024, compared to $15.2 million in the first quarter of 2024, and increased 2.4% compared to $15.3 million in the second quarter of 2023. Year-to-date, net interest income decreased 2.7% to $30.8 million, compared to $31.7 million in the same period one year earlier.

Revenues for the second quarter of 2024 increased 3.8% to $19.9 million, compared to $19.2 million in the preceding quarter and decreased 7.3% compared to $21.5 million in the second quarter a year ago. In the first six months of 2024, revenues were $39.1 million, compared to $42.6 million in the first six months of 2023. The decrease compared to the first six months a year ago was largely due to lower volumes in mortgage banking activity.

Total noninterest income increased 8.0% to $4.3 million in the second quarter of 2024, compared to $4.0 million in the preceding quarter, and decreased 31.2% compared to $6.2 million in the second quarter a year ago. Net mortgage banking income, the largest component of noninterest income, totaled $2.4 million in the second quarter of 2024, compared to $2.2 million in the preceding quarter and $3.9 million in the second quarter a year ago. This decrease compared to the second quarter a year ago was largely driven by a decline in net gain on sale of mortgage loans. This was impacted by mortgage margin compression and lower loan volumes. In the first six months of 2024, noninterest income decreased 24.4% to $8.2 million, compared to $10.9 million in the first six months of 2023. Net mortgage banking income decreased 33.6% to $4.6 million in the first six months of 2024, compared to $6.9 million in the first six months of 2023. These decreases were driven by a decline in net gain on sale of mortgage loans.

Eagle’s second quarter noninterest expense increased 1.6% to $17.3 million, compared to $17.0 million in the preceding quarter and decreased 7.9% compared to $18.8 million in the second quarter a year ago. Lower salaries and employee benefits contributed to the decrease compared to the year ago quarter. In the first six months of 2024, noninterest expense decreased 2.8% to $34.3 million, compared to $35.3 million in the first six months of 2023.

For the second quarter of 2024, the Company recorded an income tax expense of $444,000. This compared to an income tax expense of $370,000 in the preceding quarter and income tax expense of $344,000 in the second quarter of 2023. The effective tax rate for the second quarter of 2024 was 20.3%, compared to 14.6% for the second quarter of 2023. The year-to-date effective tax rate was 18.3% for 2024 compared to 20.9% for the same period in 2023.

Credit Quality

During the second quarter of 2024, Eagle recorded a provision for credit losses of $412,000. This compared to a $135,000 recapture to its provision for credit losses in the preceding quarter and a $319,000 provision for credit losses in the second quarter a year ago. The allowance for credit losses represented 330.8% of nonperforming loans at June 30, 2024, compared to 227.6% three months earlier and 156.7% a year earlier. Nonperforming loans were $5.1 million at June 30, 2024, $7.2 million at March 31, 2024, and $9.9 million a year earlier.

Net loan charge-offs totaled $2,000 in the second quarter of 2024, compared to net loan recoveries of $65,000 in the preceding quarter and net loan recoveries of $151,000 in the second quarter a year ago. The allowance for credit losses was $16.8 million, or 1.11% of total loans, at June 30, 2024, compared to $16.4 million, or 1.10% of total loans, at March 31, 2024, and $15.6 million, or 1.09% of total loans, a year ago.

Capital Management

The ratio of tangible common shareholders’ equity (shareholders’ equity, less goodwill and core deposit intangible) to tangible assets (total assets, less goodwill and core deposit intangible) was 6.33% at June 30, 2024, from 6.12% a year ago and 6.32% three months earlier. As of June 30, 2024, the Bank’s regulatory capital was in excess of all applicable regulatory requirements and is deemed well capitalized. The Bank’s Tier 1 capital to adjusted total average assets was 9.92% as of June 30, 2024.

About the Company

Eagle Bancorp Montana, Inc. is a bank holding company headquartered in Helena, Montana, and is the holding company of Opportunity Bank of Montana, a community bank established in 1922 that serves consumers and small businesses in Montana through 29 banking offices. Additional information is available on the Bank’s website at www.opportunitybank.com. The shares of Eagle Bancorp Montana, Inc. are traded on the NASDAQ Global Market under the symbol “EBMT.”

Forward Looking Statements

This release may contain certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and may be identified by the use of such words as “believe,” “will” “expect,” “anticipate,” “should,” “planned,” “estimated,” and “potential.” These forward-looking statements include, but are not limited to statements of our goals, intentions and expectations; statements regarding our business plans, prospects, mergers, growth and operating strategies; statements regarding the asset quality of our loan and investment portfolios; and estimates of our risks and future costs and benefits. These forward-looking statements are based on current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. These factors include, but are not limited to, changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements; general economic conditions and political events, either nationally or in our market areas, that are worse than expected including the ability of the U.S. Congress to increase the U.S. statutory debt limit, as needed, as well as the impact of the 2024 U.S. presidential election; the emergence or continuation of widespread health emergencies or pandemics including the magnitude and duration of the COVID-19 pandemic, including but not limited to vaccine efficacy and immunization rates, new variants, steps taken by governmental and other authorities to contain, mitigate and combat the pandemic, adverse effects on our employees, customers and third-party service providers, the increase in cyberattacks in the current work-from-home environment, the ultimate extent of the impacts on our business, financial position, results of operations, liquidity and prospects, continued deterioration in general business and economic conditions could adversely affect our revenues and the values of our assets and liabilities, lead to a tightening of credit and increase stock price volatility, and potential impairment charges; the impact of continuing adverse developments affecting the U.S. banking industry, including the associated impact of any regulatory changes or other mitigation efforts taken by governmental agencies in response thereto; 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. 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; competition among banks, financial holding companies and other traditional and non-traditional financial service providers; loan demand or residential and commercial real estate values in Montana; the concentration of our business in Montana; our ability to continue to increase and manage our commercial real estate, commercial business and agricultural loans; the costs and effects of legal, compliance and regulatory actions, changes and developments, including the initiation and resolution of legal proceedings (including any securities, bank operations, consumer or employee litigation); inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments; adverse changes in the securities markets that lead to impairment in the value of our investment securities and goodwill; other economic, governmental, competitive, regulatory and technological factors that may affect our operations; our ability to implement new technologies and maintain secure and reliable technology systems including those that involve the Bank’s third-party vendors and service providers; cyber incidents, or theft or loss of Company or customer data or money; our ability to appropriately address social, environmental, and sustainability concerns that may arise from our business activities; the effect of our recent or future acquisitions, including the failure to achieve expected revenue growth and/or expense savings, the failure to effectively integrate their operations, the outcome of any legal proceedings and the diversion of management time on issues related to the integration.

Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. All information set forth in this press release is current as of the date of this release and the company undertakes no duty or obligation to update this information.

Use of Non-GAAP Financial Measures

In addition to results presented in accordance with generally accepted accounting principles utilized in the United States, or GAAP, the Financial Ratios and Other Data contains non-GAAP financial measures. Non-GAAP financial measures include: 1) core efficiency ratio, 2) tangible book value per share and 3) tangible common equity to tangible assets. The Company uses these non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and performance trends, and to enhance investors’ overall understanding of such financial performance. In particular, the use of tangible book value per share and tangible common equity to tangible assets is prevalent among banking regulators, investors and analysts.

The numerator for the core efficiency ratio is calculated by subtracting acquisition costs and intangible asset amortization from noninterest expense. Tangible assets and tangible common shareholders’ equity are calculated by excluding intangible assets from assets and shareholders’ equity, respectively. For these financial measures, our intangible assets consist of goodwill and core deposit intangible. Tangible book value per share is calculated by dividing tangible common shareholders’ equity by the number of common shares outstanding. We believe that this measure is consistent with the capital treatment by our bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios and present this measure to facilitate the comparison of the quality and composition of our capital over time and in comparison, to our competitors.

Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. Further, the non-GAAP financial measure of tangible book value per share should not be considered in isolation or as a substitute for book value per share or total shareholders’ equity determined in accordance with GAAP, and may not be comparable to a similarly titled measure reported by other companies. Reconciliation of the GAAP and non-GAAP financial measures are presented below.

Balance Sheet                
(Dollars in thousands, except per share data)       (Unaudited)    
            June 30, March 31, June 30,  
              2024     2024     2023    
                   
Assets:                
  Cash and due from banks       $ 22,361   $ 19,479   $ 21,878    
  Interest bearing deposits in banks       1,401     1,438     1,116    
    Total cash and cash equivalents     23,762     20,917     22,994    
  Securities available-for-sale, at fair value       306,869     311,227     325,964    
  Federal Home Loan Bank (“FHLB”) stock       10,136     8,449     10,099    
  Federal Reserve Bank (“FRB”) stock       4,131     4,131     4,131    
  Mortgage loans held-for-sale, at fair value       10,518     9,612     22,381    
  Loans:                
     Real estate loans:              
        Residential 1-4 family         157,053     157,414     133,437    
        Residential 1-4 family construction       50,228     45,026     49,516    
        Commercial real estate         627,326     632,452     577,736    
        Commercial construction and development     137,427     147,740     158,519    
        Farmland           142,353     140,246     139,290    
     Other loans:                
        Home equity           93,213     90,418     80,333    
        Consumer           29,118     29,677     30,065    
        Commercial           143,641     137,640     129,084    
        Agricultural           137,134     116,775     123,503    
    Total loans         1,517,493     1,497,388     1,421,483    
  Allowance for credit losses         (16,830 )   (16,410 )   (15,560 )  
    Net loans         1,500,663     1,480,978     1,405,923    
  Accrued interest and dividends receivable       13,195     12,038     11,194    
  Mortgage servicing rights, net         15,614     15,738     15,501    
  Assets held for sale, at cost         257         323    
  Premises and equipment, net         98,397     97,643     88,760    
  Cash surrender value of life insurance, net       48,529     48,218     47,520    
  Goodwill           34,740     34,740     34,740    
  Core deposit intangible, net         5,168     5,514     6,648    
  Other assets           26,976     26,869     27,101    
    Total assets       $ 2,098,955   $ 2,076,074   $ 2,023,279    
                   
Liabilities:                
  Deposit accounts:                
        Noninterest bearing       $ 400,113   $ 408,781   $ 432,463    
        Interest bearing           1,218,752     1,226,818     1,145,904    
    Total deposits       1,618,865     1,635,599     1,578,367    
  Accrued expenses and other liabilities       35,804     34,950     32,002    
  FHLB advances and other borrowings       215,050     177,540     191,260    
  Other long-term debt, net         59,074     59,037     58,925    
    Total liabilities       1,928,793     1,907,126     1,860,554    
                   
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; 20,000,000 shares authorized;        
  8,507,429 shares issued; 8,016,784, 8,016,784 and 7,988,132        
  shares outstanding at June 30, 2024, March 31, 2024 and        
  June 30, 2023, respectively         85     85     85    
  Additional paid-in capital         108,962     108,893     109,345    
  Unallocated common stock held by Employee Stock Ownership Plan   (4,297 )   (4,440 )   (4,870 )  
  Treasury stock, at cost (490,645, 490,645 and 519,297 shares at        
  June 30, 2024, March 31, 2024 and June 30, 2023, respectively)   (11,124 )   (11,124 )   (11,574 )  
  Retained earnings           97,413     96,797     93,462    
  Accumulated other comprehensive loss, net of tax     (20,877 )   (21,263 )   (23,723 )  
    Total shareholders’ equity     170,162     168,948     162,725    
    Total liabilities and shareholders’ equity $ 2,098,955   $ 2,076,074   $ 2,023,279    
                   
Income Statement       (Unaudited)     (Unaudited)
(Dollars in thousands, except per share data)     Three Months Ended   Six Months Ended
              June 30, March 31, June 30,   June 30,
                2024   2024     2023     2024   2023  
Interest and dividend income:                
  Interest and fees on loans     $ 22,782 $ 21,942   $ 19,137   $ 44,724 $ 36,874  
  Securities available-for-sale       2,631   2,724     2,949     5,355   5,792  
  FRB and FHLB dividends       264   247     161     511   268  
  Other interest income       145   29     25     174   46  
    Total interest and dividend income       25,822   24,942     22,272     50,764   42,980  
Interest expense:                  
  Interest expense on deposits       6,884   6,548     4,155     13,432   6,615  
  FHLB advances and other borrowings       2,625   2,497     2,179     5,122   3,321  
  Other long-term debt       681   683     674     1,364   1,352  
    Total interest expense       10,190   9,728     7,008     19,918   11,288  
Net interest income         15,632   15,214     15,264     30,846   31,692  
Provision (recapture) for credit losses       412   (135 )   319     277   598  
    Net interest income after provision (recapture) for credit losses   15,220   15,349     14,945     30,569   31,094  
                         
Noninterest income:                
  Service charges on deposit accounts       428   400     527     828   866  
  Mortgage banking, net       2,417   2,177     3,864     4,594   6,914  
  Interchange and ATM fees       640   563     641     1,203   1,218  
  Appreciation in cash surrender value of life insurance     320   288     503     608   783  
  Net gain (loss) on sale of available-for-sale securities           2       (222 )
  Net gain on sale/disposal of premises and equipment     24       70     24   83  
  Other noninterest income       440   524     597     964   1,233  
    Total noninterest income       4,269   3,952     6,204     8,221   10,875  
                         
Noninterest expense:                
  Salaries and employee benefits       10,273   9,718     11,084     19,991   20,777  
  Occupancy and equipment expense       2,104   2,099     2,071     4,203   4,144  
  Data processing       1,382   1,525     1,572     2,907   2,784  
  Advertising         316   253     309     569   590  
  Amortization         348   369     397     717   815  
  Loan costs         412   398     464     810   909  
  FDIC insurance premiums       284   299     393     583   561  
  Professional and examination fees       423   484     592     907   1,076  
  Other noninterest expense       1,765   1,888     1,908     3,653   3,667  
    Total noninterest expense       17,307   17,033     18,790     34,340   35,323  
                         
Income before provision for income taxes       2,182   2,268     2,359     4,450   6,646  
Provision for income taxes       444   370     344     814   1,389  
Net income         $ 1,738 $ 1,898   $ 2,015   $ 3,636 $ 5,257  
                         
Basic earnings per common share     $ 0.22 $ 0.24   $ 0.26   $ 0.46 $ 0.67  
Diluted earnings per common share     $ 0.22 $ 0.24   $ 0.26   $ 0.46 $ 0.67  
                         
Basic weighted average shares outstanding       7,830,925   7,824,928     7,789,559     7,827,926   7,789,872  
                         
Diluted weighted average shares outstanding       7,845,272   7,835,304     7,793,410     7,840,288   7,792,937  
                         
ADDITIONAL FINANCIAL INFORMATION   (Unaudited)  
(Dollars in thousands, except per share data) Three or Six Months Ended
      June 30, March 31, June 30,
        2024     2024     2023  
           
Mortgage Banking Activity (For the quarter):      
  Net gain on sale of mortgage loans $ 1,600   $ 1,414   $ 2,757  
  Net change in fair value of loans held-for-sale and derivatives   12     (173 )   324  
  Mortgage servicing income, net   805     936     783  
    Mortgage banking, net $ 2,417   $ 2,177   $ 3,864  
           
Mortgage Banking Activity (Year-to-date):      
  Net gain on sale of mortgage loans $ 3,014     $ 4,960  
  Net change in fair value of loans held-for-sale and derivatives   (161 )     305  
  Mortgage servicing income, net   1,741       1,649  
    Mortgage banking, net $ 4,594     $ 6,914  
           
Performance Ratios (For the quarter):      
  Return on average assets   0.33 %   0.37 %   0.40 %
  Return on average equity   4.30 %   4.67 %   4.99 %
  Yield on average interest earning assets   5.64 %   5.47 %   5.06 %
  Cost of funds     2.78 %   2.67 %   2.06 %
  Net interest margin   3.41 %   3.33 %   3.47 %
  Core efficiency ratio*   85.22 %   86.95 %   85.68 %
           
Performance Ratios (Year-to-date):      
  Return on average assets   0.35 %     0.53 %
  Return on average equity   4.49 %     6.49 %
  Yield on average interest earning assets   5.55 %     4.96 %
  Cost of funds     2.73 %     1.71 %
  Net interest margin   3.37 %     3.66 %
  Core efficiency ratio*   86.06 %     81.07 %
           
* The core efficiency ratio is a non-GAAP ratio that is calculated by dividing non-interest expense, exclusive of acquisition
costs and intangible asset amortization, by the sum of net interest income and non-interest income.    
           
           
           
ADDITIONAL FINANCIAL INFORMATION      
(Dollars in thousands, except per share data)      
           
Asset Quality Ratios and Data: As of or for the Three Months Ended
      June 30, March 31, June 30,
        2024     2024     2023  
           
  Nonaccrual loans   $ 4,012   $ 5,231   $ 9,561  
  Loans 90 days past due and still accruing   1,076     1,979     369  
    Total nonperforming loans   5,088     7,210     9,930  
  Other real estate owned and other repossessed assets   4          
    Total nonperforming assets $ 5,092   $ 7,210   $ 9,930  
           
  Nonperforming loans / portfolio loans   0.34 %   0.48 %   0.70 %
  Nonperforming assets / assets   0.24 %   0.35 %   0.49 %
  Allowance for credit losses / portfolio loans   1.11 %   1.10 %   1.09 %
  Allowance for credit losses/ nonperforming loans   330.78 %   227.60 %   156.70 %
  Gross loan charge-offs for the quarter $ 12   $ 1   $ 55  
  Gross loan recoveries for the quarter $ 10   $ 66   $ 206  
  Net loan charge-offs (recoveries) for the quarter $ 2   $ (65 ) $ (151 )
           
           
      June 30, March 31, June 30,
        2024     2024     2023  
Capital Data (At quarter end):      
  Common shareholders’ equity (book value) per share $ 21.23   $ 21.07   $ 20.37  
  Tangible book value per share** $ 16.25   $ 16.05   $ 15.19  
  Shares outstanding   8,016,784     8,016,784     7,988,132  
  Tangible common equity to tangible assets***   6.33 %   6.32 %   6.12 %
           
Other Information:        
  Average investment securities for the quarter $ 306,207   $ 314,129   $ 343,634  
  Average investment securities year-to-date $ 310,168   $ 314,129   $ 344,330  
  Average loans for the quarter **** $ 1,513,313   $ 1,499,293   $ 1,407,316  
  Average loans year-to-date **** $ 1,506,303   $ 1,499,293   $ 1,387,153  
  Average earning assets for the quarter $ 1,837,418   $ 1,830,316   $ 1,766,706  
  Average earning assets year-to-date $ 1,833,867   $ 1,830,316   $ 1,745,870  
  Average total assets for the quarter $ 2,077,448   $ 2,066,579   $ 1,998,957  
  Average total assets year-to-date $ 2,072,013   $ 2,066,579   $ 1,973,167  
  Average deposits for the quarter $ 1,625,882   $ 1,625,770   $ 1,580,343  
  Average deposits year-to-date $ 1,625,826   $ 1,625,770   $ 1,592,879  
  Average equity for the quarter $ 161,533   $ 162,637   $ 161,534  
  Average equity year-to-date $ 162,084   $ 162,637   $ 161,910  
           
** The tangible book value per share is a non-GAAP ratio that is calculated by dividing shareholders’ equity,  
less goodwill and core deposit intangible, by common shares outstanding.      
*** The tangible common equity to tangible assets is a non-GAAP ratio that is calculated by dividing shareholders’  
equity, less goodwill and core deposit intangible, by total assets, less goodwill and core deposit intangible.  
**** Includes loans held for sale      
Reconciliation of Non-GAAP Financial Measures            
                       
Core Efficiency Ratio   (Unaudited)     (Unaudited)  
(Dollars in thousands) Three Months Ended   Six Months Ended  
          June 30, March 31, June 30,   June 30,  
            2024     2024     2023       2024     2023    
Calculation of Core Efficiency Ratio:              
  Noninterest expense $ 17,307   $ 17,033   $ 18,790     $ 34,340   $ 35,323    
  Intangible asset amortization   (348 )   (369 )   (397 )     (717 )   (815 )  
    Core efficiency ratio numerator   16,959     16,664     18,393       33,623     34,508    
                       
  Net interest income   15,632     15,214     15,264       30,846     31,692    
  Noninterest income   4,269     3,952     6,204       8,221     10,875    
    Core efficiency ratio denominator   19,901     19,166     21,468       39,067     42,567    
                       
  Core efficiency ratio (non-GAAP)   85.22 %   86.95 %   85.68 %     86.06 %   81.07 %  
                       
Tangible Book Value and Tangible Assets   (Unaudited)  
(Dollars in thousands, except per share data)   June 30, March 31, June 30,  
              2024     2024     2023    
Tangible Book Value:              
  Shareholders’ equity     $ 170,162   $ 168,948   $ 162,725    
  Goodwill and core deposit intangible, net     (39,908 )   (40,254 )   (41,388 )  
    Tangible common shareholders’ equity (non-GAAP) $ 130,254   $ 128,694   $ 121,337    
                   
  Common shares outstanding at end of period   8,016,784     8,016,784     7,988,132    
                   
  Common shareholders’ equity (book value) per share (GAAP) $ 21.23   $ 21.07   $ 20.37    
                   
  Tangible common shareholders’ equity (tangible book value)        
    per share (non-GAAP)     $ 16.25   $ 16.05   $ 15.19    
                   
Tangible Assets:              
  Total assets       $ 2,098,955   $ 2,076,074   $ 2,023,279    
  Goodwill and core deposit intangible, net     (39,908 )   (40,254 )   (41,388 )  
    Tangible assets (non-GAAP)   $ 2,059,047   $ 2,035,820   $ 1,981,891    
                   
  Tangible common shareholders’ equity to tangible assets        
    (non-GAAP)         6.33 %   6.32 %   6.12 %  
                   

    

Contacts:  Laura F. Clark, President and CEO
(406) 457-4007
Miranda J. Spaulding, SVP and CFO
(406) 441-5010   


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