HELENA, Mont., July 21, 2017 (GLOBE NEWSWIRE) -- Eagle Bancorp Montana, Inc. (NASDAQ:EBMT), (the “Company,” “Eagle”), the holding company of Opportunity Bank of Montana, today reported second quarter net income of $1.1 million, or $0.27 per diluted share, compared to $1.3 million, or $0.32 per diluted share, in the second quarter a year ago. In the preceding quarter, Eagle earned $763,000, or $0.20 per diluted share. In the first six months of 2017, net income was $1.8 million, or $0.47 per diluted share, compared to $1.9 million, or $0.49 per diluted share, in the first six months of 2016.
Eagle’s board of directors increased its regular quarterly cash dividend by 12.5% to $0.09 per share. The dividend will be payable September 1, 2017 to shareholders of record August 11, 2017. The current annualized yield is 1.76% at recent market prices.
“During the first half of 2017 we generated solid operating results while growing the loan portfolio and expanding our net interest margin,” said Peter J. Johnson, President and CEO. “We have both the infrastructure and banking teams in place to continue to grow and gain market share. We are pleased to be able to increase our quarterly cash dividend for over seventeen consecutive years.”
Second Quarter 2017 Highlights (at or for the three-month period ended June 30, 2017, except where noted)
- Net income grew 39.7% to $1.1 million, or $0.27 per diluted share in the second quarter, compared to $763,000, or $0.20 per diluted share in the preceding quarter, and was down compared to $1.3 million, or $0.32 per diluted share, in the second quarter of 2016.
- Net interest margin was 3.65%, which was up four basis points compared to the preceding quarter and a 34 basis point improvement compared to the second quarter a year ago.
- Revenues (net interest income before the provision for loan losses, plus non-interest income) increased 8.0% to $9.5 million compared to $8.7 million in the same period a year ago.
- Total loans increased 14.5% to $508.1 million at June 30, 2017, compared to $443.9 million a year earlier.
- Commercial real estate loans increased 22.5% to $246.0 million, or 48.4% of total loans at June 30, 2017, compared to $200.8 million, or 45.2% of total loans a year earlier.
- Capital ratios remain strong with a tangible shareholders’ equity ratio of 11.29% at June 30, 2017.
- Increased quarterly cash dividend by 12.5% to $0.09 per share.
Balance Sheet Results
“New loan originations were up during the quarter, and loan demand remains strong. We are benefiting from a healthy local economy and a seasoned lending team,” said Johnson. Total loans increased 3.9% to $508.1 million at June 30, 2017, compared to $488.9 million three months earlier and increased 14.5% compared to $443.9 million a year earlier.
Eagle originated $84.3 million in new residential mortgages during the quarter, excluding construction loans, and sold $73.3 million in residential mortgages, with an average gross margin on sale of mortgage loans of approximately 3.00%. This production compares to residential mortgage originations of $51.7 million in the preceding quarter with sales of $56.6 million.
Commercial real estate loans increased 22.5% to $246.0 million at June 30, 2017, compared to $200.8 million a year earlier, while residential mortgage loans decreased 4.6% to $110.9 million compared to $116.2 million a year earlier. Commercial loans increased 18.9% to $58.2 million, home equity loans increased 3.0% to $49.3 million and construction loans increased 79.7% to $29.4 million, compared to a year ago.
Eagle’s total deposits increased modestly to $514.3 million at June 30, 2017, compared to $508.9 million a year earlier but decreased compared to $526.3 million at March 31, 2017. As of quarter-end, checking and money market accounts represent 53.8%, savings accounts represent 17.2%, and CDs comprise 29.0% of the total deposit portfolio.
Total assets increased 7.1% to $710.2 million at June 30, 2017, compared to $663.3 million a year earlier and increased 3.9% compared to $683.7 million three months earlier. Shareholders’ equity increased 3.5% to $62.1 million at June 30, 2017, compared to $60.0 million three months earlier and increased 5.3% compared to $59.0 million one year earlier. Tangible book value was $14.37 per share at June 30, 2017, compared to $13.81 per share at March 31, 2017, and $13.63 per share a year earlier.
“Our net interest margin improved four basis points compared to the preceding quarter and expanded 34 basis points compared to the year ago quarter, largely due to profitable loan growth,” Johnson said. Eagle’s net interest margin was 3.65% in the second quarter, compared to 3.61% in the preceding quarter, and 3.31% in the second quarter a year ago. Year-to-date, Eagle’s net interest margin improved 30 basis points to 3.63% compared to 3.33% in the first six months of 2016. Funding costs for the second quarter were up 12 basis points while asset yields were up 46 basis points compared to a year ago. The investment securities portfolio decreased to $123.2 million at June 30, 2017, compared to $140.4 million a year ago, which had a positive impact on the average yields on earning assets.
Eagle’s second quarter revenues increased to $9.5 million, compared to $8.7 million in both the preceding quarter and the second quarter a year ago. Year-to-date, revenues increased 9.9% to $18.1 million compared to $16.5 million in the first six months of 2016. Net interest income before the provision for loan loss increased 19.0% to $5.9 million in the second quarter compared to $4.9 million in the second quarter one year ago, and increased 7.2% compared to $5.5 million in the preceding quarter. In the first six months of the year, net interest income increased 15.8% to $11.4 million, compared to $9.8 million in the first six months of 2016.
Noninterest income decreased 6.2% to $3.6 million in the second quarter, compared to $3.8 million in the second quarter a year ago, but increased 11.3% compared to $3.2 million in the preceding quarter. The net gain on sale of mortgage loans totaled $2.3 million in the second quarter, compared to $1.8 million in the preceding quarter and $2.4 million in the second quarter a year ago. In the first six months of 2017, noninterest income increased modestly to $6.8 million compared to $6.7 million in the first six months one year ago.
Second quarter noninterest expenses were $7.6 million, compared to $7.4 million in the preceding quarter and $6.7 million in the year ago quarter. Year-to-date, noninterest expenses totaled $15.1 million compared to $13.2 million in the same period a year earlier. Higher compensation expenses contributed to the majority of the year-over-year increase.
Second quarter provision for loan losses was $302,000, compared to $301,000 in the preceding quarter and $459,000 in the second quarter a year ago. The allowance for loan losses represented 309.2% of nonperforming loans at June 30, 2017, compared to 300.1% three months earlier and 196.0% a year earlier.
Nonperforming loans (NPLs) were $1.7 million at the end of the second quarter, which was unchanged compared to three months earlier, and down 22.2% compared to $2.2 million a year earlier.
Eagle’s net charge-offs were $152,000 in the second quarter, compared to net loan recoveries of $4,000 in the preceding quarter and net charge-offs of $139,000 in the second quarter a year ago. The allowance for loan losses was $5.2 million, or 1.03% of total loans at June 30, 2017, compared to $5.1 million, or 1.04% of total loans at March 31, 2017 and $4.3 million, or 0.96% of total loans a year ago.
Total OREO and other repossessed assets was $493,000 at June 30, 2017, compared to $668,000 at March 31, 2017 and $565,000 a year ago. Nonperforming assets (NPAs), consisting of nonperforming loans, OREO and other repossessed assets, loans delinquent 90 days or more, and restructured loans, were $2.2 million at June 30, 2017 or 0.31% of total assets, compared to $2.4 million, or 0.35% of total assets three months earlier and $2.7 million, or 0.41% of total assets a year earlier.
Eagle Bancorp Montana continues to be well capitalized with the ratio of shareholders’ equity to tangible asset of 11.29% at June 30, 2017. (Shareholders’ equity, plus trust preferred securities, subordinated debt and senior debt, less goodwill and core deposit intangible to tangible assets).
On February 13, 2017, the Company completed the issuance of $10 million of senior unsecured debt. The net proceeds of $9.8 million was used as capital contribution to its bank subsidiary to support growth.
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 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)|
|June 30,||March 31,||June 30,|
|Cash and due from banks||$||7,244||$||5,353||$||5,579|
|Interest-bearing deposits with banks||1,797||813||844|
|Total cash and cash equivalents||9,041||6,166||6,423|
|Securities available-for-sale, at market value||123,191||127,212||140,449|
|FHLB stock, at cost||4,841||3,344||3,735|
|Investment in Eagle Bancorp Statutory Trust I||155||155||155|
|Residential mortgage (1-4 family)||110,906||112,872||116,207|
|Commercial real estate||246,005||234,467||200,848|
|Unearned loan fees||(1,008||)||(1,036||)||(951||)|
|Allowance for loan losses||(5,225||)||(5,075||)||(4,260||)|
|Accrued interest and dividends receivable||2,174||2,101||2,274|
|Mortgage servicing rights, net||6,127||5,892||5,196|
|Premises and equipment, net||20,040||19,750||17,965|
|Cash surrender value of life insurance||14,289||14,191||14,683|
|Real estate and other assets acquired in settlement of loans, net||493||668||565|
|Core deposit intangible||328||356||449|
|Deferred tax asset, net||1,132||2,036||313|
|Accrued expense and other liabilities||4,867||4,309||5,000|
|FHLB advances and other borrowings||104,182||68,266||75,491|
|Long-term debt, net||24,778||24,782||14,959|
|Preferred stock (no par value; 1,000,000 shares authorized;|
|none issued or outstanding)||-||-||-|
|Common stock (par value $0.01; 8,000,000 shares authorized;|
|4,083,127 shares issued; 3,811,409, 3,811,409 and 3,779,464 shares outstanding|
|at June 30, 2017, March 31, 2017 and June 30, 2016, respectively)||41||41||41|
|Additional paid-in capital||22,444||22,407||22,168|
|Unallocated common stock held by employee stock ownership plan (ESOP)||(725||)||(767||)||(891||)|
|Treasury stock, at cost (271,718, 271,718 and 303,663 shares at|
|June 30, 2017, March 31, 2017 and June 30, 2016, respectively)||(2,971||)||(2,971||)||(3,321||)|
|Accumulated other comprehensive income (loss)||873||(374||)||2,381|
|Total shareholders' equity||62,122||60,035||59,004|
|Total liabilities and shareholders' equity||$||710,214||$||683,677||$||663,336|
|(Dollars in thousands, except per share data)||Three Months Ended||Years Ended|
|June 30,||March 31,||June 30,||June 30,|
|Interest and dividend Income:|
|Interest and fees on loans||$||6,174||$||5,570||$||4,955||$||11,744||$||9,792|
|FRB and FHLB dividends||36||40||35||76||66|
|Interest on deposits with banks||1||-||1||1||1|
|Other interest income||-||1||-||1||3|
|Total interest and dividend income||6,925||6,340||5,731||13,265||11,349|
|Interest expense on deposits||376||380||381||756||736|
|FHLB advances and other borrowings||322||205||212||527||413|
|Total interest expense||1,045||857||788||1,902||1,538|
|Net interest income||5,880||5,483||4,943||11,363||9,811|
|Loan loss provision||302||301||459||603||909|
|Net interest income after loan loss provision||5,578||5,182||4,484||10,760||8,902|
|Service charges on deposit accounts||239||232||211||471||410|
|Net gain on sale of loans||2,263||1,825||2,438||4,088||4,156|
|Mortgage loan servicing fees||509||547||442||1,056||805|
|Wealth management income||180||141||159||321||295|
|Interchange and ATM fees||228||206||223||434||425|
|Appreciation in cash surrender value of life insurance||126||124||113||250||225|
|Net (loss) gain on sale of available-for-sale securities||(14||)||-||84||(14||)||84|
|Net (loss) gain on sale of real estate owned and other repossessed property||(24||)||(1||)||12||(25||)||12|
|Other noninterest income||63||134||124||197||290|
|Total noninterest income||3,570||3,208||3,806||6,778||6,702|
|Salaries and employee benefits||4,586||4,433||3,916||9,019||7,606|
|Occupancy and equipment expense||672||717||671||1,389||1,460|
|Amortization of mortgage servicing fees||262||262||285||524||513|
|Amortization of core deposit intangible and tax credits||107||107||111||214||223|
|Federal insurance premiums||36||84||123||120||206|
|Legal, accounting and examination fees||200||85||61||285||159|
|Write-down on real estate owned and other repossessed property||9||36||-||45||-|
|Other noninterest expense||803||862||838||1,665||1,513|
|Total noninterest expense||7,620||7,439||6,686||15,059||13,234|
|Income before income taxes||1,528||951||1,604||2,479||2,370|
|Income tax provision||462||188||340||650||459|
|Basic earnings per share||$||0.28||$||0.20||$||0.34||$||0.48||$||0.51|
|Diluted earnings per share||$||0.27||$||0.20||$||0.32||$||0.47||$||0.49|
|Weighted average shares|
|outstanding (basic EPS)||3,811,409||3,811,409||3,779,464||3,811,409||3,779,464|
|Weighted average shares|
|outstanding (diluted EPS)||3,869,885||3,875,677||3,873,171||3,872,765||3,873,171|
|Financial Ratios and Other Data|
|(Dollars in thousands, except per share data)|
|(Unaudited)||June 30||March 31||June 30|
|Loans 90 days past due||79||998||89|
|Restructured loans, net||-||42||44|
|Total nonperforming loans||1,690||1,691||2,173|
|Other real estate owned and other repossessed assets||493||668||565|
|Total nonperforming assets||$||2,183||$||2,359||$||2,738|
|Nonperforming loans / portfolio loans||0.33||%||0.35||%||0.49||%|
|Nonperforming assets / assets||0.31||%||0.35||%||0.41||%|
|Allowance for loan losses / portfolio loans||1.03||%||1.04||%||0.96||%|
|Allowance / nonperforming loans||309.17||%||300.12||%||196.04||%|
|Gross loan charge-offs for the quarter||$||189||$||9||$||148|
|Gross loan recoveries for the quarter||$||37||$||13||$||9|
|Net loan charge-offs for the quarter||$||152||$||(4||)||$||139|
|Capital Data (At quarter end):|
|Tangible book value per share||$||14.37||$||13.81||$||13.63|
|Profitability Ratios (For the quarter):|
|Return on average assets||0.61||%||0.46||%||0.78||%|
|Return on average equity||6.97||%||5.19||%||8.76||%|
|Net interest margin||3.65||%||3.61||%||3.31||%|
|Profitability Ratios (Year-to-date):|
|Efficiency ratio *||81.83||%||84.36||%||78.79||%|
|Return on average assets||0.54||%||0.46||%||0.60||%|
|Return on average equity||6.10||%||5.19||%||6.68||%|
|Net interest margin||3.63||%||3.61||%||3.33||%|
|Average total assets for the quarter||$||700,682||$||662,541||$||649,585|
|Average total assets year to date||$||682,486||$||662,541||$||641,188|
|Average earning assets for the quarter||$||644,885||$||607,048||$||596,479|
|Average earning assets year to date||$||626,791||$||607,048||$||589,432|
|Average loans for the quarter **||$||512,138||$||474,439||$||448,158|
|Average loans year to date **||$||493,393||$||474,439||$||438,283|
|Average equity for the quarter||$||61,134||$||58,752||$||57,746|
|Average equity year to date||$||59,959||$||58,752||$||57,257|
|Average deposits for the quarter||$||512,736||$||515,851||$||493,879|
|Average deposits year to date||$||515,054||$||515,851||$||487,463|
|* 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|
Contacts: Peter J. Johnson, President and CEO (406) 457-4006 Laura F. Clark, SVP and CFO (406) 457-4007
Source:Eagle Bancorp Montana, Inc.