UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
Form 8-K
_____________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event Reported): January 26, 2017
Eagle Bancorp Montana, Inc
(Exact Name of Registrant as Specified in Charter)
Delaware | 1-34682 | 27-1449820 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
1400 Prospect Ave., Helena, Montana 59601 |
(Address of Principal Executive Offices) (Zip Code) |
(406) 442-3080
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | ||
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
On January 26, 2017, Eagle Bancorp Montana, Inc. announced its results of operations for the quarter ended December 31, 2016. A copy of the press release dated January 26, 2017 is attached as Exhibit 99.1
Item 9.01. Financial Statements and Exhibits.
(d) ExhibitsExhibit No. Description 99.1 Eagle Bancorp press release issued January 26, 2017.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Eagle Bancorp Montana, Inc | ||
Date: January 26, 2017 | By: | /s/ Laura F. Clark |
Laura F. Clark | ||
Senior Vice President & CFO | ||
EXHIBIT 99.1
Eagle Bancorp Montana Earns $1.4 Million, or $0.37 per Diluted Share, in 4Q16 and Record Earnings of $5.1 Million, or $1.32 per Diluted Share, in 2016; Declares Regular Quarterly Cash Dividend of $0.08 per Share
HELENA, Mont., Jan. 26, 2017 (GLOBE NEWSWIRE) -- Eagle Bancorp Montana, Inc. (NASDAQ:EBMT), (the “Company,” “Eagle”), the holding company of Opportunity Bank of Montana, today reported net income increased 98.9% to $5.1 million, or $1.32 per diluted share, in 2016, compared to $2.6 million, or $0.67 per diluted share, in 2015. For the fourth quarter of 2016, net income increased 64.5% to $1.4 million, or $0.37 per diluted share, compared to $881,000, or $0.22 per diluted share, in the fourth quarter a year ago. In the preceding quarter, Eagle earned a record $1.8 million, or $0.46 per diluted share.
Eagle’s board of directors declared a regular quarterly cash dividend of $0.08 per share. The dividend will be payable March 3, 2017 to shareholders of record February 10, 2017. The current annualized yield is 1.63% at recent market prices.
“We achieved record 2016 earnings, along with strong fourth quarter earnings of $1.4 million,” said Peter J. Johnson, President and CEO. “We continue to produce solid loan and core deposit growth, which highlights our ability to deepen and grow customer relationships, as well as gain new customers and market share. With steady balance sheet growth and significant and ongoing improvements in revenue generation, we are continuing to produce and retain earnings while paying appropriate dividends to increase value for our shareholders.”
Fourth Quarter 2016 Highlights (at or for the three month period ended December 31, 2016, except where noted)
Balance Sheet Results
“The loan portfolio continues to expand, which is a reflection of the strong local economy and demand in our markets. The commercial real estate and C&I loan segments of our loan portfolio, in particular, continue to build momentum,” said Johnson. Total loans increased 1.0% to $466.2 million at December 31, 2016, compared to $461.5 million three months earlier and increased 14.5% compared to $407.3 million a year earlier.
Eagle originated $96.5 million in new residential mortgages during the quarter, excluding construction loans, and sold $90.6 million in residential mortgages, with an average gross margin on sale of mortgage loans of approximately 3.41%. This production compares to residential mortgage originations of $101.2 million in the preceding quarter with sales of $95.6 million.
Commercial real estate loans increased 28.0% to $214.9 million at December 31, 2016, compared to $167.9 million a year earlier, while residential mortgage loans decreased 4.1% to $113.3 million compared to $118.1 million a year earlier. Commercial loans increased 40.0% to $54.7 million, home equity loans increased 8.1% to $49.0 million and construction loans decreased 10.5% to $20.5 million, compared to a year ago.
Total deposits increased 6.1% to $512.8 million at December 31, 2016, compared to $483.2 million a year earlier but were down slightly compared to $515.3 million at September 30, 2016. As of year-end, checking and money market accounts represent 51.8%, savings accounts represent 16.0%, and CDs comprise 32.2% of the total deposit portfolio.
Eagle’s total assets increased 6.9% to $673.9 million at December 31, 2016, compared to $630.3 million a year earlier and decreased slightly compared to $674.5 million three months earlier. Shareholders’ equity was $59.5 million at December 31, 2016, compared to $60.0 million three months earlier and increased 7.2% compared to $55.5 million one year earlier. Tangible book value was $13.65 per share at December 31, 2016, compared to $13.91 per share at September 30, 2016, and $12.67 per share a year earlier.
Operating Results
“Our 2016 net interest margin improved eight basis points to 3.46% compared to 3.38% in 2015, primarily as a result of growing both in core deposits and loans,” Johnson said. Eagle’s net interest margin increased six basis point to 3.61% in the fourth quarter, compared to 3.55% in the preceding quarter and increased 20 basis point from 3.41% in the fourth quarter a year ago. For the full year, Eagle’s net interest margin was 3.46% compared to 3.38% in 2015. Funding costs for the fourth quarter were up two basis points while asset yields increased 22 basis points compared to a year ago. The investment securities portfolio decreased to $128.4 million at December 31, 2016, compared to $145.7 million a year ago, which had a slight positive impact on the average yields on earning assets.
Fourth quarter revenues increased 33.8% to $10.2 million compared to $7.6 million in the fourth quarter a year ago, and increased modestly compared to $10.1 million in the preceding quarter. For the year, revenues increased 23.5% to $36.8 million, compared to $29.8 million in 2015. Net interest income before the provision for loan loss increased 2.6% to $5.6 million in the fourth quarter compared to $5.4 million in the preceding quarter, and increased 14.3% compared to $4.9 million in the fourth quarter a year ago. For the year, net interest income increased 15.4% to $20.8 million, compared to $18.0 million in 2015.
Eagle’s noninterest income increased 70.8% to $4.6 million in the fourth quarter, compared to $2.7 million in the fourth quarter a year ago, but decreased modestly compared to $4.7 million in the preceding quarter. For the full year, noninterest income increased 36.0% to $16.0 million compared to $11.8 million in 2015. Mortgage servicing fees and net gain on sale of mortgage loans contributed to the growth. Fourth quarter noninterest expenses were $7.6 million, compared to $7.2 million in the preceding quarter and $6.4 million in the year ago quarter. Increased compensation due to additional loan production and year end benefit expenses contributed to the increase. In 2016, noninterest expense was up modestly to $28.0 million compared to $25.7 million in 2015.
Credit Quality
Eagle’s fourth quarter provision for loan losses was $452,000, compared to $472,000 in the preceding quarter and $343,000 in the fourth quarter a year ago. As of December 31, 2016, the allowance for loan losses represented 414.1% of nonperforming loans compared to 263.3% three months earlier and 139.3% a year earlier. Nonperforming loans (NPLs) were $1.2 million at the end of the year, which was down 34.8% compared to $1.8 million three months earlier, and down 54.8% compared to $2.5 million a year earlier.
Fourth quarter net charge-offs totaled $332,000, compared to $82,000 in the preceding quarter and $23,000 in the fourth quarter a year ago. The allowance for loan losses was $4.8 million, or 1.02% of total loans at December 31, 2016, compared to $4.7 million, or 1.01% of total loans at September 30, 2016, and $3.6 million, or 0.87% of total loans a year ago.
OREO and other repossessed assets was $825,000 at December 31, 2016, which was an increase compared to $513,000 at September 30, 2016. Nonperforming assets (NPAs), consisting of nonperforming loans, OREO and other repossessed assets, loans delinquent 90 days or more, and restructured loans, improved to $2.0 million at December 31, 2016, or 0.29% of total assets, compared to $2.3 million, or 0.34% of total assets three months earlier and $3.1 million, or 0.50% of total assets a year earlier.
Capital Management
Eagle Bancorp Montana continues to be well capitalized with the ratio of shareholders’ equity to tangible asset of 10.03% at December 31, 2016. (Shareholders’ equity, plus trust preferred securities and subordinated debt, less goodwill and core deposit intangible to tangible assets).
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.
Balance Sheet | ||||||||||||||
(Dollars in thousands, except per share data) | (Unaudited) | (Unaudited) | (Audited) | |||||||||||
December 31, | September 30, | December 31, | ||||||||||||
2016 | 2016 | 2015 | ||||||||||||
Assets: | ||||||||||||||
Cash and due from banks | $ | 6,531 | $ | 6,802 | $ | 6,468 | ||||||||
Interest-bearing deposits with banks | 787 | 1,029 | 970 | |||||||||||
Total cash and cash equivalents | 7,318 | 7,831 | 7,438 | |||||||||||
Securities available-for-sale, at market value | 128,436 | 133,754 | 145,738 | |||||||||||
FHLB stock, at cost | 4,012 | 3,870 | 3,397 | |||||||||||
FRB stock | 871 | 871 | 887 | |||||||||||
Investment in Eagle Bancorp Statutory Trust I | 155 | 155 | 155 | |||||||||||
Loans held-for-sale | 18,230 | 19,415 | 18,702 | |||||||||||
Loans: | ||||||||||||||
Residential mortgage (1-4 family) | 113,262 | 113,287 | 118,133 | |||||||||||
Commercial loans | 54,706 | 60,102 | 39,072 | |||||||||||
Commercial real estate | 214,927 | 205,819 | 167,930 | |||||||||||
Construction loans | 20,540 | 20,649 | 22,958 | |||||||||||
Consumer loans | 14,800 | 14,867 | 14,641 | |||||||||||
Home equity | 49,018 | 47,694 | 45,345 | |||||||||||
Unearned loan fees | (1,092 | ) | (919 | ) | (795 | ) | ||||||||
Total loans | 466,161 | 461,499 | 407,284 | |||||||||||
Allowance for loan losses | (4,770 | ) | (4,650 | ) | (3,550 | ) | ||||||||
Net loans | 461,391 | 456,849 | 403,734 | |||||||||||
Accrued interest and dividends receivable | 2,123 | 2,138 | 2,278 | |||||||||||
Mortgage servicing rights, net | 5,853 | 5,439 | 4,968 | |||||||||||
Premises and equipment, net | 19,393 | 19,543 | 18,217 | |||||||||||
Cash surrender value of life insurance | 14,095 | 13,996 | 12,514 | |||||||||||
Real estate and other assets acquired in settlement of loans, net | 825 | 513 | 595 | |||||||||||
Goodwill | 7,034 | 7,034 | 7,034 | |||||||||||
Core deposit intangible | 384 | 416 | 514 | |||||||||||
Other assets | 3,805 | 2,671 | 4,176 | |||||||||||
Total assets | $ | 673,925 | $ | 674,495 | $ | 630,347 | ||||||||
Liabilities: | ||||||||||||||
Deposit accounts: | ||||||||||||||
Noninterest bearing | 82,877 | 89,242 | 77,031 | |||||||||||
Interest bearing | 429,918 | 426,035 | 406,151 | |||||||||||
Total deposits | 512,795 | 515,277 | 483,182 | |||||||||||
Accrued expense and other liabilities | 4,291 | 5,363 | 4,050 | |||||||||||
FHLB advances and other borrowings | 82,413 | 78,855 | 72,716 | |||||||||||
Subordinated debentures, net | 14,970 | 14,965 | 14,949 | |||||||||||
Total liabilities | 614,469 | 614,460 | 574,897 | |||||||||||
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; | ||||||||||||||
4,083,127 shares issued; 3,811,409, 3,779,464, and 3,779,464 shares outstanding | ||||||||||||||
at December 31, 2016, September 30, 2016 and December 31, 2015, respectively) | 41 | 41 | 41 | |||||||||||
Additional paid-in capital | 22,366 | 22,184 | 22,152 | |||||||||||
Unallocated common stock held by employee stock ownership plan (ESOP) | (809 | ) | (850 | ) | (975 | ) | ||||||||
Treasury stock, at cost (271,718, 303,663 and 303,663 shares at | ||||||||||||||
December 31, 2016, September 30, 2016 and December 31, 2015, respectively) | (2,971 | ) | (3,321 | ) | (3,321 | ) | ||||||||
Retained earnings | 41,240 | 40,096 | 37,301 | |||||||||||
Accumulated other comprehensive (loss) income | (411 | ) | 1,885 | 252 | ||||||||||
Total shareholders' equity | 59,456 | 60,035 | 55,450 | |||||||||||
Total liabilities and shareholders' equity | $ | 673,925 | $ | 674,495 | $ | 630,347 | ||||||||
Income Statement | (Unaudited) | (Unaudited) | ||||||||||||||||||
(Dollars in thousands, except per share data) | Three Months Ended | Years Ended | ||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | |||||||||||||||||
2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
Interest and dividend Income: | ||||||||||||||||||||
Interest and fees on loans | $ | 5,589 | $ | 5,461 | $ | 4,725 | $ | 20,842 | $ | 17,332 | ||||||||||
Securities available-for-sale | 721 | 709 | 803 | 2,917 | 3,058 | |||||||||||||||
FRB and FHLB dividends | 39 | 37 | 42 | 142 | 67 | |||||||||||||||
Interest on deposits with banks | - | - | - | 1 | 1 | |||||||||||||||
Other interest income | 2 | 1 | - | 6 | 5 | |||||||||||||||
Total interest and dividend income | 6,351 | 6,208 | 5,570 | 23,908 | 20,463 | |||||||||||||||
Interest Expense: | ||||||||||||||||||||
Interest expense on deposits | 399 | 383 | 364 | 1,518 | 1,457 | |||||||||||||||
Advances and other borrowings | 193 | 209 | 149 | 815 | 550 | |||||||||||||||
Subordinated debentures | 198 | 195 | 191 | 782 | 445 | |||||||||||||||
Total interest expense | 790 | 787 | 704 | 3,115 | 2,452 | |||||||||||||||
Net interest income | 5,561 | 5,421 | 4,866 | 20,793 | 18,011 | |||||||||||||||
Loan loss provision | 452 | 472 | 343 | 1,833 | 1,303 | |||||||||||||||
Net interest income after loan loss provision | 5,109 | 4,949 | 4,523 | 18,960 | 16,708 | |||||||||||||||
Noninterest income: | ||||||||||||||||||||
Service charges on deposit accounts | 226 | 229 | 226 | 865 | 1,009 | |||||||||||||||
Net gain on sale of loans | 3,026 | 3,164 | 1,546 | 10,346 | 6,672 | |||||||||||||||
Mortgage loan servicing fees | 568 | 462 | 358 | 1,835 | 1,718 | |||||||||||||||
Wealth management income | 140 | 166 | 155 | 601 | 625 | |||||||||||||||
Interchange and ATM fees | 221 | 227 | 144 | 873 | 580 | |||||||||||||||
Appreciation in cash surrender value of life insurance | 126 | 133 | 111 | 484 | 426 | |||||||||||||||
Net gain on sale of available-for-sale securities | 55 | 110 | - | 249 | 234 | |||||||||||||||
Net (loss) gain on sale of OREO | - | (2 | ) | (4 | ) | 10 | (4 | ) | ||||||||||||
Net loss on fair value hedge | - | - | - | - | (93 | ) | ||||||||||||||
Other noninterest income | 237 | 200 | 156 | 727 | 594 | |||||||||||||||
Total noninterest income | 4,599 | 4,689 | 2,692 | 15,990 | 11,761 | |||||||||||||||
Noninterest expense: | ||||||||||||||||||||
Salaries and employee benefits | 4,503 | 4,177 | 3,672 | 16,286 | 14,350 | |||||||||||||||
Occupancy and equipment expense | 657 | 698 | 681 | 2,815 | 2,988 | |||||||||||||||
Data processing | 513 | 456 | 654 | 1,980 | 2,259 | |||||||||||||||
Advertising | 166 | 192 | 237 | 696 | 800 | |||||||||||||||
Amortization of mortgage servicing fees | 410 | 326 | 159 | 1,249 | 799 | |||||||||||||||
Amortization of core deposit intangible and tax credits | 110 | 112 | 115 | 445 | 432 | |||||||||||||||
Federal insurance premiums | 99 | 99 | 81 | 404 | 332 | |||||||||||||||
Postage | 46 | 60 | 29 | 194 | 181 | |||||||||||||||
Legal, accounting and examination fees | 115 | 120 | 105 | 394 | 520 | |||||||||||||||
Consulting fees | 41 | 44 | 53 | 202 | 576 | |||||||||||||||
Other noninterest expense | 966 | 875 | 615 | 3,354 | 2,489 | |||||||||||||||
Total noninterest expense | 7,626 | 7,159 | 6,401 | 28,019 | 25,726 | |||||||||||||||
Income before income taxes | 2,082 | 2,479 | 814 | 6,931 | 2,743 | |||||||||||||||
Income tax provision (benefit) | 633 | 707 | (67 | ) | 1,799 | 163 | ||||||||||||||
Net income | $ | 1,449 | $ | 1,772 | $ | 881 | $ | 5,132 | $ | 2,580 | ||||||||||
Basic earnings per share | $ | 0.39 | $ | 0.46 | $ | 0.23 | $ | 1.36 | $ | 0.68 | ||||||||||
Diluted earnings per share | $ | 0.37 | $ | 0.46 | $ | 0.22 | $ | 1.32 | $ | 0.67 | ||||||||||
Weighted average shares | ||||||||||||||||||||
outstanding (basic EPS) | 3,800,645 | 3,779,464 | 3,781,023 | 3,784,788 | 3,813,090 | |||||||||||||||
Weighted average shares | ||||||||||||||||||||
outstanding (diluted EPS) | 3,874,833 | 3,873,171 | 3,855,095 | 3,873,589 | 3,859,625 | |||||||||||||||
Financial Ratios and Other Data | |||||||||||
(Dollars in thousands, except per share data) | |||||||||||
(Unaudited) | December 31 | September 30, | December 31 | ||||||||
2016 | 2016 | 2015 | |||||||||
Asset Quality: | |||||||||||
Nonaccrual loans | $ | 614 | $ | 1,421 | $ | 2,030 | |||||
Loans 90 days past due | 495 | 301 | 472 | ||||||||
Restructured loans, net | 43 | 44 | 46 | ||||||||
Total nonperforming loans | 1,152 | 1,766 | 2,548 | ||||||||
Other real estate owned and other repossessed assets | 825 | 513 | 595 | ||||||||
Total nonperforming assets | $ | 1,977 | $ | 2,279 | $ | 3,143 | |||||
Nonperforming loans / portfolio loans | 0.25 | % | 0.25 | % | 0.63 | % | |||||
Nonperforming assets / assets | 0.29 | % | 0.34 | % | 0.50 | % | |||||
Allowance for loan losses / portfolio loans | 1.02 | % | 1.01 | % | 0.87 | % | |||||
Allowance / nonperforming loans | 414.06 | % | 263.31 | % | 139.32 | % | |||||
Gross loan charge-offs for the quarter | $ | 338 | $ | 83 | $ | 32 | |||||
Gross loan recoveries for the quarter | $ | 6 | $ | 1 | $ | 9 | |||||
Net loan charge-offs for the quarter | $ | 332 | $ | 82 | $ | 23 | |||||
Capital Data (At quarter end): | |||||||||||
Tangible book value per share | $ | 13.65 | $ | 13.91 | $ | 12.67 | |||||
Shares outstanding | 3,811,409 | 3,779,464 | 3,779,464 | ||||||||
Profitability Ratios (For the quarter): | |||||||||||
Efficiency ratio* | 73.98 | % | 69.70 | % | 83.17 | % | |||||
Return on average assets | 0.86 | % | 1.07 | % | 0.57 | % | |||||
Return on average equity | 9.57 | % | 11.82 | % | 6.39 | % | |||||
Net interest margin | 3.61 | % | 3.55 | % | 3.41 | % | |||||
Profitability Ratios (Year-to-date): | |||||||||||
Efficiency ratio * | 74.96 | % | 75.34 | % | 84.96 | % | |||||
Return on average assets | 0.78 | % | 0.76 | % | 0.44 | % | |||||
Return on average equity | 8.73 | % | 8.44 | % | 4.77 | % | |||||
Net interest margin | 3.46 | % | 3.40 | % | 3.38 | % | |||||
Other Information | |||||||||||
Average total assets for the quarter | $ | 670,469 | $ | 664,580 | $ | 621,808 | |||||
Average total assets year to date | $ | 654,811 | $ | 649,203 | $ | 583,658 | |||||
Average earning assets for the quarter | $ | 615,539 | $ | 611,055 | $ | 570,302 | |||||
Average earning assets year to date | $ | 601,824 | $ | 596,858 | $ | 533,261 | |||||
Average loans for the quarter ** | $ | 479,229 | $ | 471,437 | $ | 415,332 | |||||
Average loans year to date ** | $ | 456,808 | $ | 449,334 | $ | 374,849 | |||||
Average equity for the quarter | $ | 60,544 | $ | 59,958 | $ | 55,170 | |||||
Average equity year to date | $ | 58,754 | $ | 58,157 | $ | 54,051 | |||||
Average deposits for the quarter | $ | 515,771 | $ | 500,381 | $ | 478,559 | |||||
Average deposits year to date | $ | 498,224 | $ | 491,987 | $ | 465,276 | |||||
* 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