EXHIBIT 99.1
Eagle Bancorp Montana Earns $876,000 in First Quarter; Declares Regular Quarterly Cash Dividend
HELENA, Mont., Oct. 26, 2010 (GLOBE NEWSWIRE) -- Eagle Bancorp Montana, Inc. (Nasdaq:EBMT), (the "Company," "Eagle"), the holding company of American Federal Savings Bank, today reported it earned $876,000, or $0.22 per diluted share, for the first fiscal quarter ended September 30, 2010, compared to $844,000, or $0.18 per diluted share, for the first quarter a year ago. All per share data has been adjusted to reflect the April 5, 2010 stock conversion.
The Company also announced its board of directors has declared a quarterly cash dividend $0.07 per share, to be paid November 26, 2010 to shareholders of record on November 5, 2010.
"For the first quarter we had solid net interest income growth, reflecting a reduction in deposit costs and strong mortgage refinance activity. We also continue to grow the balance sheet with total assets, net loans and total deposits all increasing at September 30, 2010 compared to a year ago," stated Pete Johnson, President and Chief Executive Officer. "Despite the current economic environment we are optimistic that the strength of our franchise and our healthy capital position will provide the foundation for future opportunities."
First Quarter 2011 Highlights
- Net income was $876,000, or $0.22 per diluted share.
- Net loans increased 5.6% to $178.2 million year-over-year, with a 35.9% increase in commercial real estate loans compared to a year ago.
- Total deposits increased by 4.6% compared to a year ago with core deposits up 11.5%.
- The efficiency ratio was 67.3% for the quarter.
- Nonperforming loans totaled $1.9 million, or 1.07% of total loans.
- Capital ratios remain strong with a Tier 1 leverage ratio of 17.1%.
- Declared regular quarterly cash dividend of $0.07 per share.
Balance Sheet Results
Total assets increased 10% to $330.8 million at September 30, 2010, compared with $300.7 million at September 30, 2009. Net loans increased 5.6% to $178.2 million at September 30, 2010 compared with $168.2 million a year earlier.
"During the quarter we closed on a $12.1 million commercial real estate loan that has a USDA Rural Development guarantee of 90%. This new loan represents a large portion of the loan growth during the quarter," said Johnson. "We have historically emphasized real estate lending and over 88% of the portfolio is secured by real estate, both residential and commercial. We continue to work on our strategy of diversifying our loan portfolio away from residential real estate and towards a focus in commercial and commercial real estate loans." Residential mortgage loans decreased 2.5% from the prior year to $74.8 million, while commercial loans increased 15.8% to $8.4 million and commercial real estate loans increased 35.9% to $52.7 million compared to a year ago.
Total deposits increased 4.6% to $204.0 million at September 30, 2010 compared to $195.1 million a year earlier. Checking and money market accounts represent 43.0% of total deposits, savings accounts make up 15.8% of total deposits, and CDs comprise 41.2 % of the total deposit portfolio.
Due primarily to the April 2010 stock offering and conversion, shareholder equity increased 78.7% to $54.4 million, compared to $30.4 million a year ago. Book value per share was $13.29 per share at September 30, 2010 compared to $7.45 per share (on a converted basis) at September 30, 2009.
Credit Quality
Nonperforming loans (NPLs) were $1.9 million, or 1.07% of total loans at September 30, 2010, compared to $2.4 million, or 1.42% of total loans, three months earlier, and $1.4 million, or 0.84% of total loans, a year ago. Other real estate owned (OREO) and other repossessed assets were $1.2 million at September 30, 2010 compared to $618,000 three months earlier and $158,000 at September 30, 2009. "The increase in OREO during the quarter was primarily a result of the normal progression of loans through the credit and foreclosure cycle," said Clint Morrison, SVP and CFO. "The OREO balance consists primarily of residential and commercial real estate."
Nonperforming assets (NPAs), consisting of nonperforming loans, other real estate owned (OREO) and other repossessed assets, and loans delinquent 90 days or more, were $3.2 million, or 0.95% of total assets, at September 30, 2010, compared to $3.0 million, or 0.94% of total assets in the preceding quarter, and $1.6 million, or 0.52% of assets a year ago.
The allowance for loan losses totaled 0.70% of total loans at September 30, 2010, compared to 0.64% of total loans at March 31, 2010, and 0.50% of total loans a year ago.
Operating Results
"Funding costs declined faster than asset yields resulting in margin increase during the quarter," said Morrison. The net interest margin was 3.59% in the first quarter of fiscal 2011 compared to 3.42% in the preceding quarter and 3.58% in the first quarter of fiscal 2010.
Net interest income before the provision for loan loss increased 11.5% to $2.7 million in the first quarter of fiscal 2011, compared to $2.4 million in the first quarter of fiscal 2010. Noninterest income increased 35.2% to $1.4 million in the first quarter of 2011, compared to $1.1 million in the first quarter a year ago. The increase was primarily due to the $387,000 increase in net gain on sale of loans to $827,000 in the first quarter of 2011 from $440,000 in the first quarter a year ago. "Refinancing activity picked up dramatically during the quarter as mortgage interest rates declined to new lows," said Morrison. "We continue to originate these loans then sell them in the secondary market."
Noninterest expense was $2.6 million in the first quarter of fiscal 2011, compared to $2.1 million in the first quarter a year ago. The increase reflects increased staffing needs and overhead costs associated with the opening of the Skyway branch in Helena, Montana in January 2009 and the Oak Street branch in Bozeman, Montana in October 2009.
Eagle's return on average equity (ROAE) was 6.52% in the first quarter compared to 11.72% in the first quarter a year ago. Return on average assets (ROAA) was 1.07% in the first quarter compared to 1.15% in the first quarter a year ago.
Capital Management
On April 5, 2010, the Company completed its second-step conversion from the partially-public mutual holding company structure to the fully publicly-owned stock holding company structure. As part of that transaction it also completed a related stock offering. Following the conversion and offering, Eagle Bancorp Montana became the stock holding company for American Federal Savings Bank, and both Eagle Financial MHC and Eagle Bancorp ceased to exist. The Company sold a total of 2,464,274 shares of common stock at a purchase price of $10.00 per share in the offering for gross proceeds of $24.6 million. Concurrent with the completion of the offering, shares of Eagle Bancorp common stock owned by the public were exchanged. Stockholders of Eagle Bancorp received 3.8 shares of the Eagle Bancorp Montana's common stock for each share of Eagle Bancorp common stock that they owned immediately prior to completion of the transaction.
Eagle Bancorp Montana continues to meet the well capitalized thresholds for regulatory purposes with a Tier 1 leverage ratio of 17.1% at September 30, 2010.
About the Company
Eagle Bancorp Montana, Inc. is the stock holding company of American Federal Savings Bank. American Federal Savings Bank was formed in 1922 and is headquartered in Helena, Montana. It has additional branches in Butte, Bozeman and Townsend. Eagle Bancorp Montana, Inc. commenced operations on April 5, 2010 following the conversion of Eagle Financial MHC and the sale of Eagle Bancorp Montana, Inc. Eagle's common stock trades 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," "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.
| Balance Sheet | | | |
| (Dollars in thousands, except per share data) | (Unaudited) | (Audited) | (Unaudited) |
| | September 30, | June 30, | September 30, |
| | 2010 | 2010 | 2009 |
| | | | |
| Assets: | | | |
| Cash and due from banks | $ 1,623 | $ 2,543 | $ 3,687 |
| Interest-bearing deposits with banks | 985 | 966 | 944 |
| Federal funds sold | -- | -- | 3,211 |
| Total cash and cash equivalents | 2,608 | 3,509 | 7,842 |
| Securities available-for-sale, at market value | 110,792 | 114,528 | 92,100 |
| Securities held-to-maturity, at cost | -- | 125 | 265 |
| Preferred stock - FASB ASC 825, at market value | -- | -- | 108 |
| FHLB stock, at cost | 2,003 | 2,003 | 2,000 |
| Investment in Eagle Bancorp Statutory Trust I | 155 | 155 | 155 |
| Loans held-for-sale | 8,347 | 7,695 | 3,494 |
| | | | |
| Loans: | | | |
| Residential mortgage (1-4 family) | 74,829 | 73,010 | 76,711 |
| Commercial loans | 8,389 | 9,452 | 7,244 |
| Commercial real estate | 52,667 | 41,677 | 38,761 |
| Construction loans | 4,922 | 7,016 | 6,119 |
| Consumer loans | 9,575 | 9,613 | 11,074 |
| Home equity | 29,132 | 29,795 | 28,836 |
| Unearned loan fees | (58) | 39 | 65 |
| Total loans | 179,456 | 170,602 | 168,810 |
| Allowance for loan losses | (1,250) | (1,100) | (625) |
| Net loans | 178,206 | 169,502 | 168,185 |
| Accrued interest and dividends receivable | 1,565 | 1,610 | 1,540 |
| Mortgage servicing rights, net | 2,380 | 2,337 | 2,315 |
| Premises and equipment, net | 15,726 | 15,848 | 15,371 |
| Cash surrender value of life insurance | 6,745 | 6,691 | 6,544 |
| Real estate and other assets acquired in settlement of loans, | |
| net of allowance for losses | 1,243 | 619 | 158 |
| Other assets | 1,036 | 1,117 | 603 |
| Total assets | $ 330,806 | $ 325,739 | $ 300,680 |
| | | | |
| Liabilities: | | | |
| Deposit accounts: | | | |
| Noninterest bearing | 19,464 | 18,376 | 18,902 |
| Interest bearing | 184,543 | 179,563 | 176,178 |
| Total deposits | 204,007 | 197,939 | 195,080 |
| Accrued expense and other liabilities | 4,367 | 2,989 | 3,379 |
| Federal funds purchased | 1,055 | -- | -- |
| FHLB advances and other borrowings | 61,972 | 67,224 | 66,639 |
| Subordinated debentures | 5,155 | 5,155 | 5,155 |
| Total liabilities | 276,556 | 273,307 | 270,253 |
| | | | |
| Shareholders' Equity: | | | |
| 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 at | |
| September 30, 2010 and June 30, 2010; | | |
| 9,000,000 authorized September 30, 2009; | | |
| 4,083,127 shares issued and outstanding at September 30, 2010 | |
| and June 30, 2010; | | | |
| 1,223,572 shares issued 1,074,507 outstanding at September 30, 2009 | 41 | 41 | 12 |
| Additional paid-in capital | 22,102 | 22,104 | 4,589 |
| Unallocated common stock held by employee stock ownership plan (ESOP) | (1,848) | (1,889) | (9) |
| Treasury stock, at cost (0, 0, and 149,065 shares | | |
| at September 30, 2010, June 30, 2010, and March 31, 2010, respectively) | -- | -- | (5,056) |
| Retained earnings | 31,242 | 30,652 | 29,583 |
| Accumulated other comprehensive gain | 2,713 | 1,524 | 1,308 |
| Total shareholders' equity | 54,250 | 52,432 | 30,427 |
| Total liabilities and shareholders' equity | 330,806 | 325,739 | 300,680 |
| | | | |
| Income Statement | | (Unaudited) | |
| (Dollars in thousands, except per share data) | Three Months Ended |
| | September 30 | June 30 | September 30 |
| | 2010 | 2010 | 2009 |
| Interest and dividend Income: | | | |
| Interest and fees on loans | $ 2,805 | $ 2,650 | $ 2,708 |
| Securities available-for-sale | 963 | 1,033 | 1,004 |
| Securities held-to-maturity | -- | 2 | 4 |
| Interest on deposits with banks | 4 | 5 | 8 |
| Total interest and dividend income | 3,772 | 3,690 | 3,724 |
| Interest Expense: | | | |
| Interest expense on deposits | 403 | 475 | 611 |
| Advances and other borrowings | 636 | 636 | 655 |
| Subordinated debentures | 75 | 75 | 75 |
| Total interest expense | 1,114 | 1,186 | 1,341 |
| Net interest income | 2,658 | 2,504 | 2,383 |
| Provision for loan losses | 283 | 259 | 135 |
| Net interest income after provision for loan losses | 2,375 | 2,245 | 2,248 |
| | | | |
| Noninterest income: | | | |
| Service charges on deposit accounts | 201 | 194 | 195 |
| Net gain on sale of loans | 827 | 301 | 440 |
| Mortgage loan servicing fees | 209 | 200 | 185 |
| Net gain on sale of available-for-sale securities | -- | 4 | -- |
| Net gain (loss) on preferred stock-FASB ASC 825 | -- | -- | 84 |
| Other income | 198 | 174 | 157 |
| Total noninterest income | 1,435 | 873 | 1,061 |
| | | | |
| Noninterest expense: | | | |
| Salaries and employee benefits | 1,161 | 1,213 | 1,099 |
| Occupancy and equipment expense | 326 | 340 | 219 |
| Data processing | 90 | 108 | 88 |
| Advertising | 124 | 99 | 106 |
| Amortization of mortgage servicing fees | 259 | 122 | 126 |
| Federal insurance premiums | 63 | 79 | 65 |
| Postage | 32 | 32 | 38 |
| Legal, accounting and examination fees | 97 | 82 | 75 |
| Consulting fees | 27 | 39 | 57 |
| ATM processing | 19 | 20 | 17 |
| Other | 367 | 255 | 213 |
| Total noninterest expense | 2,565 | 2,389 | 2,103 |
| | | | |
| Income before provision for income taxes | 1,245 | 729 | 1,206 |
| Provision for income taxes | 369 | 192 | 362 |
| Net income | $ 876 | $ 537 | $ 844 |
| | | | |
| Basic earnings per share* | $ 0.22 | $ 0.14 | $ 0.21 |
| Diluted Earnings per share* | $ 0.22 | $ 0.14 | $ 0.18 |
| Weighted average shares | | | |
| outstanding (basic EPS)* | 3,895,598 | 3,900,352 | 4,077,016 |
| Weighted average shares | | | |
| outstanding (diluted EPS)* | 3,895,598 | 3,925,251 | 4,642,300 |
| | | | |
| * for periods, June 30, 2010 and earlier, calculated on a converted basis using 3.8 to 1 exchange ratio |
| | | | |
| Financial Ratios and Other Data | | | |
| (Dollars in thousands, except per share data) | | |
| (Unaudited) | September 30, | June 30, | September 30, |
| | 2010 | 2010 | 2009 |
| Asset Quality: | | | |
| Nonaccrual loans, net | $ 1,915 | $ 2,402 | $ 1,239 |
| Loans 90 days past due | -- | 29 | 171 |
| Restructured loans | -- | -- | -- |
| Total nonperforming loans | 1,915 | 2,431 | 1,410 |
| Other real estate owned and other repossessed assets | 1,243 | 618 | 158 |
| Total nonperforming assets | $ 3,158 | $ 3,049 | $ 1,568 |
| Nonperforming loans / portfolio loans | 1.07% | 1.42% | 0.84% |
| Nonperforming assets / assets | 0.95% | 0.94% | 0.52% |
| Allowance for loan losses / portfolio loans | 0.70% | 0.64% | 0.50% |
| Allowance / nonperforming loans | 65.27% | 45.25% | 44.33% |
| Gross loan charge-offs for the quarter | $ 133 | $ 10 | $ 36 |
| Gross loan recoveries for the quarter | $ -- | $ 1 | $ 1 |
| Net loan charge-offs for the quarter | $ 133 | $ 9 | $ 35 |
| | | | |
| Capital Data (At quarter end): | | | |
| Book value per share ** | $ 13.29 | $ 12.84 | $ 7.45 |
| Shares outstanding ** | 4,083,127 | 4,083,127 | 4,083,127 |
| | | | |
| Profitability Ratios (For the quarter): | | | |
| Efficiency ratio* | 67.32% | 76.62% | 63.55% |
| Return on average assets | 1.07% | 0.66% | 1.15% |
| Return on average equity | 6.52% | 4.36% | 11.72% |
| Net interest margin | 3.59% | 3.42% | 3.58% |
| | | | |
| Profitability Ratios (Year-to-date): | | | |
| Efficiency ratio * | 67.32% | 71.21% | 63.55% |
| Return on average assets | 1.07% | 0.79% | 1.15% |
| Return on average equity | 6.52% | 6.84% | 11.72% |
| | | | |
| * 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. |
| ** For the period ended September 30, 2009, calculated using a 3.8 to 1.0 conversion ratio. |
CONTACT: Eagle Bancorp Montana, Inc.
Peter J. Johnson, President and CEO
(406) 457-4006
Clint J. Morrison, SVP and CFO
(406) 457-4007