HELENA, Mont., July 28, 2015 (GLOBE NEWSWIRE) -- Eagle Bancorp Montana, Inc. (NASDAQ:EBMT), (the "Company," "Eagle"), the holding company of Opportunity Bank of Montana, today reported net income more than doubled to $792,000, or $0.21 per diluted share, in the second quarter of 2015 from $386,000, or $0.10 per diluted share in the preceding quarter, reflecting strong loan growth and expanding net interest margin. In the second quarter a year ago Eagle's net income was $862,000, or $0.21 per diluted share, which included a $423,000 tax benefit. In the first six months of 2015, Eagle's earnings increased 21.4% to $1.2 million, or $0.30 per diluted share, compared to $970,000, or $0.24 per diluted share, in the first six months of 2014.
"We are capitalizing on Montana's economic strength, which is fueling demand for loans in all our markets," said Peter J. Johnson, President and CEO. "We generated another solid quarter of loan growth, with both commercial and residential projects contributing to portfolio expansion and producing strong revenues in both the second quarter and first half of the year. With the expanding loan portfolio generating strong yields, our net interest margin increased for both the quarter and the first half of the year."
Eagle's board of directors increased its regular quarterly cash dividend to $0.0775 per share, a 3.3% increase over its previous quarterly dividend. The dividend will be payable September 4, 2015 to shareholders of record August 14, 2015.
Second Quarter 2015 Highlights (at or for the three month period ended June 30, 2015, except where noted)
- Net income was $792,000, or $0.21 per diluted share in the second quarter, compared to $862,000, or $0.21 per diluted share in the second quarter a year ago.
- Revenues (net interest income before the provision for loan losses, plus non-interest income) increased 22.3% to $7.8 million compared to $6.4 million in the second quarter a year ago.
- Net interest margin improved 11 basis points to 3.46% in the second quarter, compared to 3.35% in the preceding quarter and increased 14 basis points when compared to 3.32% in the second quarter a year earlier.
- Total loans increased 6.5% to $358.4 million at June 30, 2015, compared to $336.4 million three months earlier and increased 29.8% compared to $276.1 million a year earlier.
- Commercial real estate loans increased 51.9% to $139.8 million and commercial loans increased 34.8% to $46.4 million, from a year ago.
- Total deposits increased 9.0% to $465.6 million, compared to $452.7 million in the previous quarter and $427.0 million a year earlier.
- Credit quality remained excellent with nonperforming assets at $1.2 million, or 0.21% of total assets at June 30, 2015, compared to $865,000, or 0.15% of total assets at March 31, 2015, and $980,000, or 0.18% of total assets a year ago.
- Capital ratios remain strong with a tangible shareholders equity ratio of 10.61% at June 30, 2015.
- Increased its regular quarterly cash dividend to $0.0775 per share, providing a 2.8% current yield at recent market prices.
Balance Sheet Results
"Loan activity is improving across all loan categories, particularly in commercial real estate, commercial loans and residential loans, and we expect this trend to continue throughout 2015," said Johnson. Total loans increased 6.5% to $358.4 million at June 30, 2015, compared to $336.4 million three months earlier and increased 29.8% compared to $276.1 million a year earlier.
"Mortgage lending continues to be robust in all of our markets, particularly in our Missoula market. As a result, we originated $65.5 million in new residential mortgages during the quarter, excluding construction loans, and sold $59.1 million in residential mortgages, with an average gross margin on sale of mortgage loans of approximately 2.85%. This production compares to residential mortgage originations of $57.6 million in the preceding quarter with sales of $54.7 million," noted Johnson.
Commercial real estate loans increased 51.9% to $139.8 million at June 30, 2015, compared to $92.0 million a year earlier, while residential mortgage loans increased 15.7% to $106.9 million compared to $92.3 million a year earlier. Commercial loans increased 34.8% to $46.4 million, home equity loans increased 8.1% to $40.9 million and construction loans increased 51.9% to $10.5 million, compared to a year ago.
Eagle's total deposits increased 9.0% to $465.6 million at June 30, 2015, compared to $427.0 million a year earlier and were up 2.8% compared to $452.7 million at March 31, 2015. As of June 30, 2015, checking and money market accounts represent 51.9%, savings accounts represent 14.2%, and CDs comprise 33.9% of the total deposit portfolio.
Total assets increased 8.2% to $583.4 million at June 30, 2015, compared to $539.1 million a year earlier, and increased 4.3% compared to $559.4 million three months earlier. Shareholders' equity improved to $53.7 million at June 30, 2015, compared to $51.7 million year ago, and was down slightly compared to $54.8 million three months earlier. Tangible book value was $12.05 per share at June 30, 2015, compared to $12.34 per share at March 31, 2015 and $11.22 per share a year earlier. The year-over-year increase continues to be a result of steady growth in earnings and increases in the fair value of the investment portfolio caused by lower interest rates.
Eagle's second quarter revenues increased 9.3% to $7.8 million compared to $7.1 million in the preceding quarter and increased 22.3% compared to $6.4 million in the second quarter a year ago. Year-to-date revenues increased 21.0% to $14.9 million compared to $12.3 million in the first six months of 2014. Net interest income before the provision for loan loss increased 6.3% to $4.5 million in the second quarter compared to $4.2 million in the preceding quarter and increased 12.3% compared to $4.0 million in the second quarter a year ago.
"Our net interest margin improved during the quarter, largely due to improved yield on earning assets," said Johnson. Eagle's net interest margin improved 11 basis points to 3.46% in the second quarter compared to 3.35% in the preceding quarter and increased 14 basis points compared to 3.32% in the second quarter a year ago. Funding costs for the quarter were down one basis point while asset yields increased 13 basis points compared to a year ago. The investment securities portfolio decreased to $148.8 million at June 30, 2015, compared to $189.6 million a year ago, which increased average yields on earning asset balances moderately. In the first six months of the year, Eagle's net interest margin was 3.41% compared to 3.27% in the first six months a year earlier.
Noninterest income was $3.3 million in the second quarter which was a 13.6% increase compared to $2.9 million in the preceding quarter and a 39.3% increase compared to $2.4 million in the second quarter a year ago.
The increase was primarily due to both a $310,000 gain on sale of fixed assets resulting from the sale of a branch building as well as the net gain on the sale of loans, which increased 13.8% to $1.9 million, compared to $1.6 million in the preceding quarter and increased 55.2% compared to $1.2 million in the second quarter a year ago. "Montana's new home purchase activity continued its robust pace again this quarter, and the housing market continues to improve," said Johnson. Year-to-date, noninterest income increased 37.6% to $6.2 million compared to $4.5 million in the six month period a year earlier.
Second quarter noninterest expenses were $6.5 million compared to $6.4 million in the preceding quarter and $5.7 million in the second quarter one year ago. In the first six months of 2015, noninterest expense increased to $12.8 million compared to $11.4 million in the first six months of 2014. The year-over-year increase for both the quarter and year-to-date periods is primarily due to higher salary and employee benefits, part of which is attributed to commission-based compensation related to the robust loan growth.
"We increased our provision for loan losses again this quarter to keep pace with loan growth," noted Johnson. The provision for the second quarter was $328,000, compared to $322,000 in the preceding quarter and $168,000 in the second quarter a year ago. As of June 30, 2015, the allowance for loan losses represented 501.7% of nonperforming loans compared to 1,177.1% three months earlier and 407.1% a year earlier.
At June 30, 2015, nonperforming loans (NPLs) were $588,000, compared to $223,000 three months earlier, and $522,000 a year ago. Net charge-offs totaled $3,000 in the second quarter, compared to $147,000 in the preceding quarter and $218,000 in the second quarter a year ago. The allowance for loan losses was $3.0 million, or 0.82% of total loans at June 30, 2015, compared to $2.6 million, or 0.78% of total loans at March 31, 2015, and $2.2 million, or 0.79% of total loans a year ago.
OREO and other repossessed assets was $623,000 at June 30, 2015, which was down slightly compared to $642,000 at March 31, 2015. Nonperforming assets (NPAs), consisting of nonperforming loans, OREO and other repossessed assets, loans delinquent 90 days or more, and restructured loans, were $1.2 million at June 30, 2015, compared to $865,000 three months earlier, and $980,000 a year ago.
Eagle Bancorp Montana continues to be well capitalized with a shareholder equity to tangible asset ratio of 10.61% at June 30, 2015. (Shareholder equity, plus trust preferred securities and subordinated debt, less goodwill and core deposit intangible to tangible assets).
During the quarter, Eagle booked $10.0 million in subordinated debt. The subordinated notes were issued on June 19, 2015, bear a fixed rate of interest of 6.75% per annum, payable quarterly, and mature on June 19, 2025. The net cash proceeds from the sale of the subordinated notes were $9.9 million, and the subordinated notes are expected to qualify as Tier 2 capital for regulatory purposes. The net proceeds from the offering are expected to be used for general corporate purposes to support organic growth and fund acquisitions should appropriate opportunities arise.
"This gives us an opportunity to build out our business plan and meet the growing demand from our clients," said Johnson. "Subordinated notes are a very cost effective way to raise regulatory capital."
Eagle announced that its Board of Directors has authorized the repurchase of up to 100,000 shares of its common stock, representing approximately 2.6% of outstanding shares. Under the plan, shares may be purchased by the company on the open market or in privately negotiated transactions. The extent to which the company repurchases its shares and the timing of such repurchase will depend upon market conditions and other corporate considerations.
About the Company
Eagle Bancorp Montana, Inc. is a bank holding company headquartered in Helena, Montana and is the holding company of Opportunity Bank, a community bank established in 1922 that serves consumers and small businesses in Southern Montana through 13 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 Select 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," "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, 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, either nationally or in our market areas, that are worse than expected; competition among depository and other financial institutions; loan demand or residential and commercial real estate values in Montana; 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; and other economic, governmental, competitive, regulatory and technological factors that may affect our operations. 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.
|(Dollars in thousands, except per share data)||(Unaudited)||(Unaudited)||(Audited)|
|June 30, 2015||March 31, 2015||June 30, 2014|
|Cash and due from banks||$ 8,108||$ 3,506||$ 6,208|
|Interest-bearing deposits with banks||619||1,244||611|
|Federal funds sold||--||--||--|
|Total cash and cash equivalents||8,727||4,750||6,819|
|Securities available-for-sale, at market value||148,766||152,239||189,553|
|FHLB stock, at cost||2,326||1,967||1,878|
|Investment in Eagle Bancorp Statutory Trust I||155||155||155|
|Residential mortgage (1-4 family)||106,852||104,546||92,321|
|Commercial real estate||139,812||131,110||92,043|
|Unearned loan fees||(605)||(553)||(413)|
|Allowance for loan losses||(2,950)||(2,625)||(2,125)|
|Accrued interest and dividends receivable||2,337||2,146||2,429|
|Mortgage servicing rights, net||4,517||4,271||3,756|
|Premises and equipment, net||18,459||19,694||20,101|
|Cash surrender value of life insurance||11,898||11,816||11,082|
|Real estate and other assets acquired in settlement of loans, net||623||642||458|
|Core deposit intangible||588||625||745|
|Total assets||$ 583,367||$ 559,365||$ 539,108|
|Accrued expense and other liabilities||5,463||4,050||3,749|
|Federal funds purchased||--||--||--|
|FHLB advances and other borrowings||43,611||42,640||51,454|
|Subordinated debentures, net||15,005||5,155||5,155|
|Preferred stock (no par value; 1,000,000 shares authorized; none issued or outstanding)||--||--||--|
|Common stock (par value $0.01; 8,000,000 shares authorized; 4,083,127 shares issued; 3,822,981; 3,822,981; 3,916,233 outstanding at June 30, 2015, March 31, 2015 and June 30, 2014, respectively)||41||41||41|
|Additional paid-in capital||22,129||22,126||22,123|
|Unallocated common stock held by employee stock ownership plan (ESOP)||(1,057)||(1,099)||(1,224)|
|Treasury stock, at cost (260,146 shares at June 30, 2015, 260,146 shares at March 31, 2015 and 166,894 shares at June 30, 2014)||(2,810)||(2,810)||(1,800)|
|Accumulated other comprehensive (loss) income||(1,086)||580||(2,259)|
|Total shareholders' equity||53,707||54,821||51,705|
|Total liabilities and shareholders' equity||$ 583,367||$ 559,365||$ 539,108|
|(Dollars in thousands, except per share data)||Three Months Ended||Six Months Ended|
|June 30,||March 31,||June 30,||June 30,|
|Interest and dividend Income:|
|Interest and fees on loans||$ 4,255||$ 3,962||$ 3,379||$ 8,217||$ 6,633|
|FRB and FHLB dividends||20||--||--||20||--|
|Interest on deposits with banks||3||3||3||6||4|
|Total interest and dividend income||5,015||4,724||4,499||9,739||8,820|
|Interest expense on deposits||356||337||332||693||661|
|Advances and other borrowings||128||143||147||271||299|
|Total interest expense||526||501||500||1,027||1,002|
|Net interest income||4,489||4,223||3,999||8,712||7,818|
|Loan loss provision||328||322||168||650||296|
|Net interest income after loan loss provision||4,161||3,901||3,831||8,062||7,522|
|Service charges on deposit accounts||243||223||253||466||479|
|Net gain on sale of loans||1,856||1,631||1,196||3,487||2,032|
|Mortgage loan servicing fees||422||415||360||837||719|
|Net gain on sale of available-for-sale securities||48||186||41||234||237|
|Net loss on fair value hedge||--||(93)||(62)||(93)||(134)|
|Total noninterest income||3,275||2,882||2,351||6,157||4,474|
|Salaries and employee benefits||3,639||3,379||3,183||7,018||6,392|
|Occupancy and equipment expense||733||736||688||1,469||1,399|
|Amortization of mortgage servicing fees||205||217||164||422||296|
|Amortization of core deposit intangible and tax credits||101||100||105||201||210|
|Federal insurance premiums||73||95||19||168||103|
|Legal, accounting and examination fees||133||156||175||289||286|
|Write-down on OREO||--||--||10||--||10|
|Total noninterest expense||6,472||6,361||5,743||12,833||11,442|
|Income before income taxes||964||422||439||1,386||554|
|Income tax provision (benefit)||172||36||(423)||208||(416)|
|Net income||$ 792||$ 386||$ 862||$ 1,178||$ 970|
|Basic earnings per share||$ 0.21||$ 0.10||$ 0.22||$ 0.31||$ 0.25|
|Diluted earnings per share||$ 0.21||$ 0.10||$ 0.21||$ 0.30||$ 0.24|
|Weighted average shares outstanding (basic EPS)||3,822,981||3,844,617||3,916,233||3,833,739||3,916,233|
|Weighted average shares outstanding (diluted EPS)||3,860,236||3,881,872||3,971,036||3,870,994||3,971,036|
|Financial Ratios and Other Data|
|(Dollars in thousands, except per share data)|
|(Unaudited)||June 30||March 31||December 31||June 30|
|Nonaccrual loans||$ 541||$ 176||$ 962||$ 342|
|Loans 90 days past due||--||--||--||--|
|Restructured loans, net||47||47||48||180|
|Total nonperforming loans||588||223||1,010||522|
|Other real estate owned and other repossessed assets||623||642||637||458|
|Total nonperforming assets||$ 1,211||$ 865||$ 1,647||$ 980|
|Nonperforming loans / portfolio loans||0.16%||0.07%||0.32%||0.19%|
|Nonperforming assets / assets||0.21%||0.15%||0.29%||0.18%|
|Allowance for loan losses / portfolio loans||0.82%||0.78%||0.77%||0.79%|
|Allowance / nonperforming loans||501.70%||1,177.13%||242.57%||407.09%|
|Gross loan charge-offs for the quarter||$ 4||$ 148||$ 168||$ 236|
|Gross loan recoveries for the quarter||$ 1||$ 1||$ 18||$ 18|
|Net loan charge-offs for the quarter||$ 3||$ 147||$ 150||$ 218|
|Capital Data (At quarter end):|
|Tangible book value per share||$ 12.05||$ 12.34||$ 12.07||$ 11.22|
|Profitability Ratios (For the quarter):|
|Return on average assets||0.56%||0.28%||0.67%||0.31%|
|Return on average equity||5.96%||2.82%||6.92%||3.26%|
|Net interest margin||3.46%||3.35%||3.47%||3.32%|
|Profitability Ratios (Year-to-date):|
|Efficiency ratio *||84.96%||88.12%||86.10%||88.94%|
|Return on average assets||0.42%||0.28%||0.60%||0.32%|
|Return on average equity||4.39%||2.82%||6.20%||3.38%|
|Net interest margin||3.41%||3.35%||3.40%||3.27%|
|Average total assets for the quarter||$ 567,553||$ 550,980||$ 552,845||$ 528,435|
|Average total assets year to date||$ 559,524||$ 550,980||$ 550,447||$ 515,472|
|Average earning assets for the quarter||$ 518,291||$ 503,894||$ 506,380||$ 481,715|
|Average earning assets year to date||$ 511,356||$ 503,894||$ 503,927||$ 466,057|
|Average loans for the quarter **||$ 360,782||$ 339,007||$ 325,842||$ 281,557|
|Average loans year to date **||$ 349,895||$ 339,007||$ 315,316||$ 260,825|
|Average equity for the quarter||$ 53,193||$ 54,847||$ 53,414||$ 50,627|
|Average equity year to date||$ 53,642||$ 54,847||$ 52,971||$ 49,136|
|Average deposits for the quarter||$ 457,743||$ 445,655||$ 440,999||$ 432,033|
|Average deposits year to date||$ 451,931||$ 445,655||$ 438,751||$ 428,676|
|* The efficiency ratio is a non-GAAP ratio that is calculated by dividing non-interest expense, exclusive of intangible asset amortization, by the sum of net interest income and non-interest income.|
|** includes loans held for sale|
CONTACT: Peter J. Johnson, President and CEO (406) 457-4006 Laura F. Clark, SVP and CFO (406) 457-4007Source:Eagle Bancorp Montana, Inc.