10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 31, 2019
[   ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from _____ to _____.

Commission file number 1-34682

Eagle Bancorp Montana, Inc.

(Exact name of small business issuer as specified in its charter)

Delaware	27-1449820
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1400 Prospect Avenue, Helena, MT 59601

(Address of principal executive offices)

(406) 442-3080

(Issuer's telephone number)

Website address: www.opportunitybank.com

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes [X] No [   ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] No [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer     [   ]	Accelerated filer         [ X ]
Non-accelerated filer       [   ]	Smaller reporting company [X]
	Emerging growth company [   ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   [   ]

Indicate by check mark whether the registrant is a shell company (defined in Rule 12b-2 of the Exchange Act). Yes [   ] No [X]

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock par value $0.01 per share	EBMT	The Nasdaq Stock Market LLC

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:

Common stock, par value $0.01 per share 6,403,693 shares outstanding

As of May 9, 2019

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

PART I.	Financial Information	PAGE
Item 1.	Financial Statements (Unaudited)
	Consolidated Statements of Financial Condition as of March 31, 2019 and December 31, 2018	1
	Consolidated Statements of Income for the three months ended March 31, 2019 and 2018	3
	Consolidated Statements of Comprehensive Income for the three months ended March 31, 2019 and 2018	5
	Consolidated Statements of Changes in Shareholders' Equity for the three months ended March 31, 2019 and 2018	6
	Consolidated Statements of Cash Flows for the three months ended March 31, 2019 and 2018	7
	Notes to the Unaudited Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	47
Item 4.	Controls and Procedures	48
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	49
Item 1A.	Risk Factors	49
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	49
Item 3.	Defaults Upon Senior Securities	50
Item 4.	Mine Safety Disclosures	50
Item 5.	Other Information	50
Item 6.	Exhibits	50
Signatures		51

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

Note Regarding Forward-Looking Statements

This report includes “forward-looking statements” within the meaning and protections of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as “may,” “will,” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “plan,” “project,” “could,” “intend,” “target” and other similar words and expressions of the future. 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 the management of Eagle Bancorp Montana, Inc. (“Eagle” or the “Company”) and Opportunity Bank of Montana (the “Bank”), Eagle’s wholly-owned subsidiary, 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.

The following factors, among others, could cause the Company’s actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: 

● changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements;

● local, regional, national and international economic and market conditions and events and the impact they may have on us, our customers and our assets and liabilities;

● competition among depository and other financial institutions;

● changes in the prices, values and sales volume of residential and commercial real estate in Montana;

● inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments;

● our ability to attract deposits and other sources of funding or liquidity;

● changes or volatility in the securities markets;

● political developments, uncertainties or instability;

● our ability to enter new markets successfully and capitalize on growth opportunities;

● our ability to successfully perform due diligence and integrate acquired businesses including our recent acquisition of Big Muddy Bancorp, Inc.;

● changes in consumer spending, borrowing and savings habits;

● our ability to continue to increase and manage our commercial and residential real estate, multi-family and commercial business loans;

● possible impairments of securities held by us, including those issued by government entities and government sponsored enterprises;

● the level of future deposit insurance premium assessments;

● the costs or effects of mergers, acquisitions or dispositions we may make, whether we are able to obtain any required governmental approvals in connection with any such mergers, acquisitions or dispositions, and/or our ability to realize the contemplated financial or business benefits, including any anticipated cost savings or synergies, associated with any such mergers, acquisitions or dispositions, including the recent merger of The State Bank of Townsend with and into Opportunity Bank of Montana;

● our ability to develop and maintain secure and reliable information technology systems, effectively defend ourselves against cyberattacks, or recover from breaches to our cybersecurity infrastructure;

● the failure of assumptions underlying the establishment of allowance for possible loan losses and other estimates;

● the possibility of goodwill impairment charges in the future;

● changes in the financial performance and/or condition of our borrowers and their ability to repay their loans when due; and

● the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Securities and Exchange Commission, the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters.

Because of these and other uncertainties, our actual future results may be materially different from results indicated by these forward-looking statements. For a further list and description of various risks, relevant factors and uncertainties that could cause future results or events to differ materially from those expressed or implied in our forward-looking statements, see Item 1A, “Risk Factors” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections contained elsewhere in this report, as well as our Annual Report on Form 10-K for the year ended December 31, 2018, any subsequent Reports on Form 10-Q and Form 8-K, and other filings with the SEC. We do not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur, or of which we hereafter become aware.

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Dollars in Thousands, Except for Per Share Data)

(Unaudited)

	March 31,		December 31,
	2019		2018
ASSETS:
Cash due from banks	$	9,054	$	10,144
Interest bearing deposits in banks		2,225		1,057
Total cash and cash equivalents		11,279		11,201
Securities available-for-sale, at fair value		140,161		142,165
Federal Home Loan Bank stock		4,807		5,011
Federal Reserve Bank stock		2,040		2,033
Investment in Eagle Bancorp Statutory Trust I		155		155
Mortgage loans held-for-sale, at fair value		8,075		7,318
Loans receivable, net of deferred loan fees of $1,083 at March 31, 2019 and $1,098 at December 31, 2018 and allowance for loan losses of $7,100 at March 31, 2019 and $6,600 at December 31, 2018		720,920		610,333
Accrued interest and dividends receivable		5,005		3,479
Mortgage servicing rights, net		7,318		7,100
Premises and equipment, net		35,364		29,343
Cash surrender value of life insurance, net		23,564		20,545
Real estate and other repossessed assets acquired in settlement of loans, net		354		107
Goodwill		15,710		12,124
Core deposit intangible, net		3,311		1,498
Deferred tax asset, net		1,304		1,190
Other assets		236		301
Total assets	$	979,603	$	853,903

The accompanying notes are an integral part of these unaudited consolidated financial statements.

-1-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Continued)

(Dollars in Thousands, Except for Per Share Data)

(Unaudited)

	March 31,			December 31,
	2019			2018
LIABILITIES:
Deposit accounts:
Noninterest bearing	$	180,070		$	142,788
Interest bearing		560,975			483,823
Total deposits		741,045			626,611
Accrued expenses and other liabilities		9,061			5,388
Federal Home Loan Bank advances and other borrowings		92,313			102,222
Other long-term debt:
Principal amount		25,155			25,155
Unamortized debt issuance costs		(263	)		(279	)
Total other long-term debt less unamortized debt issuance costs		24,892			24,876
Total liabilities		867,311			759,097
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 per share; 8,000,000 shares authorized; 6,714,983 and 5,718,942 shares issued; 6,431,693 and 5,477,652 shares outstanding at March 31, 2019 and December 31, 2018, respectively)		67			57
Additional paid-in capital		68,506			52,051
Unallocated common stock held by Employee Stock Ownership Plan		(435	)		(477	)
Treasury stock, at cost		(3,372	)		(2,640	)
Retained earnings		47,512			46,926
Accumulated other comprehensive income (loss), net of tax		14			(1,111	)
Total shareholders' equity		112,292			94,806
Total liabilities and shareholders' equity	$	979,603		$	853,903

The accompanying notes are an integral part of these unaudited consolidated financial statements.

-2-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in Thousands, Except for Per Share Data)

(Unaudited)

	Three Months Ended
	March 31,
	2019			2018
INTEREST AND DIVIDEND INCOME:
Interest and fees on loans	$	10,048		$	6,872
Securities available-for-sale		958			989
Federal Home Loan Bank and Federal Reserve Bank dividends		95			79
Interest on deposits in banks		18			17
Other interest income		2			-
Total interest and dividend income		11,121			7,957
INTEREST EXPENSE:
Deposits		787			426
Federal Home Loan Bank advances and other borrowings		594			337
Long-term debt		365			347
Total interest expense		1,746			1,110
NET INTEREST INCOME		9,375			6,847
Loan loss provision		604			502
NET INTEREST INCOME AFTER LOAN LOSS PROVISION		8,771			6,345
NONINTEREST INCOME:
Service charges on deposit accounts		261			226
Net gain on sale of loans		2,599			1,439
Mortgage loan servicing fees		612			560
Wealth management income		112			132
Interchange and ATM fees		275			225
Appreciation in cash surrender value of life insurance		157			124
Net loss on sale of available-for-sale securities		(55	)		(105	)
Net loss on sale of real estate owned and other repossessed property		(37	)		(25	)
Other noninterest income		17			103
Total noninterest income		3,941			2,679

The accompanying notes are an integral part of these unaudited consolidated financial statements.

-3-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Continued)

(Dollars in Thousands, Except for Per Share Data)

(Unaudited)

	Three Months Ended
	March 31,
	2019		2018
NONINTEREST EXPENSE:
Salaries and employee benefits	$	5,992	$	4,909
Occupancy and equipment expense		1,034		828
Data processing		928		637
Advertising		268		278
Amortization of mortgage servicing rights		247		241
Amortization of core deposit intangible and tax credits		254		102
Loan costs		135		136
Federal insurance premiums		60		69
Postage		68		50
Legal, accounting and examination fees		274		142
Consulting fees		31		17
Acquisition costs		1,171		234
Other noninterest expense		806		681
Total noninterest expense		11,268		8,324
INCOME BEFORE INCOME TAXES		1,444		700
Income tax expense (includes ($67) and ($59) for the three months ended March 31, 2019 and 2018, respectively, related to income tax benefit from reclassification items)		261		127
NET INCOME	$	1,183	$	573
BASIC EARNINGS PER SHARE (EPS)	$	0.18	$	0.11
DILUTED EARNINGS PER SHARE (EPS)	$	0.18	$	0.11
WEIGHTED AVERAGE SHARES OUTSTANDING (BASIC EPS)		6,450,326		5,311,527
WEIGHTED AVERAGE SHARES OUTSTANDING (DILUTED EPS)		6,510,486		5,375,987

The accompanying notes are an integral part of these unaudited consolidated financial statements.

-4-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in Thousands)

(Unaudited)

	Three Months Ended
	March 31,
	2019			2018
NET INCOME	$	1,183		$	573
OTHER ITEMS OF COMPREHENSIVE INCOME (LOSS) BEFORE TAX:
Change in fair value of investment securities available-for-sale		1,486			(2,583	)
Reclassification for net realized losses on investment securities included in income		55			105
Change in fair value of loans held-for-sale		296			262
Reclassification for net realized gains on loans held-for-sale		(309	)		(325	)
Total other items of comprehensive income (loss)		1,528			(2,541	)
Income tax (expense) benefit related to:
Investment securities		(407	)		660
Loans held-for-sale		4			17
Total income tax (expense) benefit		(403	)		677
COMPREHENSIVE INCOME (LOSS)	$	2,308		$	(1,291	)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

-5-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

For the Three Months Ended March 31, 2019 and March 31, 2018

(Dollars in Thousands, Except for Per Share Data)

(Unaudited)

																ACCUMULATED
							UNALLOCATED									OTHER
	PREFERRED		COMMON		PAID-IN		ESOP			TREASURY			RETAINED			COMPREHENSIVE
	STOCK		STOCK		CAPITAL		SHARES			STOCK			EARNINGS			(LOSS) INCOME			TOTAL
Balance at January 1, 2019	$	-	$	57	$	52,051	$	(477	)	$	(2,640	)	$	46,926		$	(1,111	)	$	94,806
Net income														1,183						1,183
Other comprehensive income																	1,125			1,125
Dividends paid ($0.0925 per share)														(597	)					(597	)
Stock issued in connection with Big Muddy Bancorp, Inc. acquisition				10		16,425														16,435
Employee Stock Ownership Plan shares allocated or committed to be released for allocation (4,154 shares)						30		42												72
Treasury stock purchased (42,000 shares at $17.43 average cost per share)											(732	)								(732	)
Balance at March 31, 2019	$	-	$	67	$	68,506	$	(435	)	$	(3,372	)	$	47,512		$	14		$	112,292
Balance at January 1, 2018	$	-	$	53	$	42,780	$	(643	)	$	(2,826	)	$	43,939		$	313		$	83,616
Net income														573						573
Other comprehensive loss																	(1,864	)		(1,864	)
Dividends paid ($0.09 per share)														(492	)					(492	)
Stock issued in connection with TwinCo acquisition				4		9,026														9,030
Employee Stock Ownership Plan shares allocated or committed to be released for allocation (4,154 shares)						43		42												85
Balance at March 31, 2018	$	-	$	57	$	51,849	$	(601	)	$	(2,826	)	$	44,020		$	(1,551	)	$	90,948

The accompanying notes are an integral part of these unaudited consolidated financial statements.

-6-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

(Unaudited)

	Three Months Ended
	March 31,
	2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	1,183		$	573
Adjustments to reconcile net income to net cash provided by operating activities:
Loan loss provision		604			502
Depreciation		417			273
Net amortization of investment securities premiums and discounts		280			307
Amortization of mortgage servicing rights		247			241
Amortization of right of use assets		119			-
Amortization of core deposit intangible and tax credits		254			102
Deferred income tax (benefit) expense		(589	)		189
Net gain on sale of loans		(2,599	)		(1,439	)
Net loss on sale of available-for-sale securities		55			105
Net loss on sale of real estate owned and other repossessed assets		37			25
Net appreciation in cash surrender value of life insurance		(157	)		(116	)
Net change in:
Accrued interest and dividends receivable		(270	)		48
Loans held-for-sale		1,829			1,346
Other assets		353			10
Accrued expenses and other liabilities		(480	)		(59	)
Net cash provided by operating activities		1,283			2,107
CASH FLOWS FROM INVESTING ACTIVITIES:
Activity in available-for-sale securities:
Sales		3,900			25,994
Maturities, principal payments and calls		2,919			2,578
Purchases		(1,513	)		(27,107	)
Federal Home Loan Bank stock redeemed		468			493
Federal Reserve Bank stock purchased		(7	)		(554	)
Net cash received (paid) for acquisition		6,901			(4,243	)
Loan origination and principal collection, net		(22,583	)		827
Proceeds from bank owned life insurance		-			205
Proceeds from sale of real estate and other repossessed assets acquired in settlement of loans		70			-
Additions to premises and equipment		(1,850	)		(4,074	)
Net cash used in investing activities		(11,695	)		(5,881	)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

-7-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Dollars in Thousands)

(Unaudited)

	Three Months Ended
	March 31,
	2019			2018
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits	$	21,728		$	23,181
Net short-term payments on Federal Home Loan Bank and other borrowings		(11,047	)		(11,495	)
Long-term advances from Federal Home Loan Bank and other borrowings		18,000			-
Payments on long-term Federal Home Loan Bank and other borrowings		(16,862	)		(1,946	)
Purchase of treasury stock		(732	)		-
Dividends paid		(597	)		(492	)
Net cash provided by financing activities		10,490			9,248
NET INCREASE IN CASH AND CASH EQUIVALENTS		78			5,474
CASH AND CASH EQUIVALENTS, beginning of period		11,201			7,437
CASH AND CASH EQUIVALENTS, end of period	$	11,279		$	12,911
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for interest	$	1,613		$	1,229
Cash paid during the period for income taxes	$	-		$	-
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Increase (decrease) in fair value of securities available-for-sale	$	1,541		$	(2,478	)
Mortgage servicing rights recognized	$	465		$	276
Right of use assets obtained in exchange for lease liabilities	$	2,461		$	-
Loans transferred to real estate and other assets acquired in foreclosure	$	131		$	4
Stock issued in connection with acquisitions	$	16,435		$	9,030
Employee Stock Ownership Plan shares released	$	72		$	85

See Note 12. Mergers and Acquisitions for additional information related to assets acquired and liabilities assumed in acquisitions.

The accompanying notes are an integral part of these unaudited consolidated financial statements.

-8-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1. BASIS OF PRESENTATION

Nature of Operations

Eagle Bancorp Montana, Inc. (“Eagle” or “the Company”), is a Delaware corporation that holds 100.0% of the capital stock of Opportunity Bank of Montana (“the Bank”), formerly American Federal Savings Bank (“AFSB”). The Bank was founded in 1922 as a Montana-chartered building and loan association and has conducted operations and maintained its administrative office in Helena, Montana since that time. In 1975, the Bank adopted a federal thrift charter and in October 2014 converted to a Montana chartered commercial bank and became a member bank in the Federal Reserve System.

On August 21, 2018, Eagle entered into an Agreement and Plan of Merger with Big Muddy Bancorp, Inc. (“BMB”), a Montana corporation and BMB’s wholly-owned subsidiary, The State Bank of Townsend (“SBOT”), a Montana chartered commercial bank to acquire 100% of BMB’s equity voting interests. On January 1, 2019, BMB merged with and into Eagle, with Eagle continuing as the surviving corporation. SBOT operated four branches in Townsend, Dutton, Denton and Choteau, Montana.

The Bank currently has 22 full service branches. The Bank’s principal business is accepting deposits and, together with funds generated from operations and borrowings, investing in various types of loans and securities. The Bank also operates certain branches under the brand names Dutton State Bank, Farmers State Bank of Denton and The State Bank of Townsend.

Principles of Consolidation

The consolidated financial statements include Eagle, the Bank, Eagle Bancorp Statutory Trust I and AFSB NMTC Investment Fund, LLC. All significant intercompany transactions and balances have been eliminated in consolidation.

Consolidated Financial Statement Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). It is recommended that these unaudited interim consolidated financial statements be read in conjunction with the Company’s Annual Report on Form 10-K with all of the audited information and footnotes required by U.S. GAAP for complete financial statements for the year ended December 31, 2018, as filed with the SEC on March 12, 2019. In the opinion of management, all normal adjustments and recurring accruals considered necessary for a fair presentation of the financial position and results of operations for the periods presented have been included.

The results of operations for the three month period ended March 31, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or any other period.

The Company has evaluated events and transactions subsequent to March 31, 2019 for recognition and/or disclosure.

-9-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 2. INVESTMENT SECURITIES

Investment securities are summarized as follows:

	March 31, 2019									December 31, 2018
			Gross									Gross
	Amortized		Unrealized					Fair		Amortized		Unrealized					Fair
	Cost		Gains		(Losses)			Value		Cost		Gains		(Losses)			Value
	(In Thousands)
Available-for-Sale:
U.S. government and agency obligations	$	9,677	$	94	$	(25	)	$	9,746	$	9,333	$	58	$	(44	)	$	9,347
Municipal obligations		67,172		729		(345	)		67,556		69,024		244		(990	)		68,278
Corporate obligations		11,402		8		(129	)		11,281		11,411		8		(300	)		11,119
Mortgage-backed securities		17,896		75		(285	)		17,686		19,635		86		(373	)		19,348
Collateralized mortgage obligations		24,003		55		(294	)		23,764		24,229		6		(360	)		23,875
Asset-backed securities		10,287		1		(160	)		10,128		10,350		6		(158	)		10,198
Total	$	140,437	$	962	$	(1,238	)	$	140,161	$	143,982	$	408	$	(2,225	)	$	142,165

Proceeds from sales of available-for-sale securities and the associated gross realized gains and losses were as follows:

	Three Months Ended
	March 31,
	2019			2018
	(In Thousands)
Proceeds from sale of available-for-sale securities	$	3,900		$	25,994
Gross realized gain on sale of available-for-sale securities	$	11		$	-
Gross realized loss on sale of available-for-sale securities		(66	)		(105	)
Net realized loss on sale of available-for-sale securities	$	(55	)	$	(105	)

The amortized cost and fair value of securities by contractual maturity are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	March 31, 2019
	Amortized		Fair
	Cost		Value
	(In Thousands)
Due in one year or less	$	1,495	$	1,495
Due from one to five years		14,929		14,824
Due from five to ten years		14,547		14,751
Due after ten years		67,567		67,641
		98,538		98,711
Mortgage-backed securities		17,896		17,686
Collateralized mortgage obligations		24,003		23,764
Total	$	140,437	$	140,161

Maturities of securities do not reflect repricing opportunities present in adjustable rate securities.

-10-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 2. INVESTMENT SECURITIES – continued

At March 31, 2019 and December 31, 2018, securities with a fair value of $22,877,000 and $21,408,000, respectively were pledged to secure public deposits and for other purposes required or permitted by law.

The Company’s investment securities that have been in a continuous unrealized loss position for less than twelve months and those that have been in a continuous unrealized loss position for twelve or more months were as follows:

	March 31, 2019
	Less Than 12 Months					12 Months or Longer
			Gross					Gross
	Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses
	(In Thousands)
U.S. government and agency	$	1,762	$	(1	)	$	2,308	$	(24	)
Municipal obligations		476		(4	)		22,037		(341	)
Corporate obligations		2,964		(36	)		7,310		(93	)
Mortgage-backed securities and collateralized mortgage obligations		2,392		(25	)		25,292		(554	)
Asset-backed securities		3,873		(70	)		5,283		(90	)
Total	$	11,467	$	(136	)	$	62,230	$	(1,102	)

	December 31, 2018
	Less Than 12 Months					12 Months or Longer
			Gross					Gross
	Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses
U.S. government and agency	$	-	$	-		$	3,385	$	(44	)
Municipal obligations		17,887		(140	)		32,712		(850	)
Corporate obligations		2,890		(110	)		7,220		(190	)
Mortgage-backed securities and collateralized mortgage obligations		5,575		(98	)		22,559		(635	)
Asset-backed securities		8,200		(158	)		-		-
Total	$	34,552	$	(506	)	$	65,876	$	(1,719	)

Management evaluates securities for other-than-temporary impairment at least quarterly, and more frequently when economic or market concerns warrant such evaluation. The unrealized losses associated with these investments are believed to be caused by changing market conditions that are considered to be temporary and the Company does not intend to sell the securities, and it is not likely to be required to sell these securities prior to maturity. Based on the Company’s evaluation of these securities, no other-than-temporary impairment was recorded for the three months ended March 31, 2019, or 2018. As of March 31, 2019 and December 31, 2018, there were, respectively, 76 and 108 securities in unrealized loss positions that were considered to be temporarily impaired and therefore an impairment charge has not been recorded.

As of March 31, 2019, 42 U.S. government and agency securities and municipal obligations had unrealized losses with aggregate depreciation of approximately 1.37% from the Company’s amortized cost basis of these securities. At December 31, 2018, 74 U.S. government and agency securities and municipal obligations had unrealized losses with aggregate depreciation of approximately 1.88% from the Company’s amortized cost basis of these securities.

-11-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 2. INVESTMENT SECURITIES – continued

As of March 31, 2019, 11 corporate obligations had unrealized losses of approximately 1.24% from the Company’s amortized cost basis of these securities. At December 31, 2018, 11 corporate obligations had an unrealized loss with aggregate depreciation of approximately 2.88% from the Company's amortized cost basis of these securities. As management has the ability to hold debt securities until maturity, or for the foreseeable future, no declines are deemed to be other than temporary.

As of March 31, 2019, 19 mortgage-backed securities (“MBSs”) and collateralized mortgage obligations (“CMOs”) had unrealized losses with aggregate depreciation of approximately 2.05% from the Company’s amortized cost basis of these securities. At December 31, 2018, 19 MBSs and CMOs had unrealized losses with aggregate depreciation of approximately 2.54% from the Company’s amortized cost basis of these securities. Management’s analysis as of March 31, 2019 revealed no expected credit losses on the securities and therefore, declines are not deemed to be other than temporary.

As of March 31, 2019, 4 asset-backed securities (“ABSs”) had unrealized losses with aggregate depreciation of approximately 1.72% from the Company’s amortized cost basis of these securities. At December 31, 2018, 4 ABSs had unrealized losses with aggregate depreciation of approximately 1.89% from the Company’s amortized cost basis of these securities. Management’s analysis as of March 31, 2019 revealed no expected credit losses on the securities and therefore, declines are not deemed to be other than temporary.   

NOTE 3. LOANS RECEIVABLE

Loans receivable consisted of the following:

	March 31,			December 31,
	2019			2018
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	144,313		$	144,107
Commercial real estate		394,988			328,438
Other loans:
Home equity		54,637			52,159
Consumer		19,043			16,565
Commercial		116,122			76,762
Total		729,103			618,031
Deferred loan fees, net		(1,083	)		(1,098	)
Allowance for loan losses		(7,100	)		(6,600	)
Total loans, net	$	720,920		$	610,333

Within the commercial real estate loan category, $12,304,000 and $12,476,000 was guaranteed by the United States Department of Agriculture Rural Development, at March 31, 2019 and December 31, 2018, respectively. The commercial real estate category includes $5,945,000 and $2,575,000 of loans guaranteed by the United States Department of Agriculture Farm Service Agency at March 31, 2019 and December 31, 2018, respectively. The commercial category also includes $1,693,000 and $1,303,000 of loans guaranteed by the United States Department of Agriculture Farm Service Agency at March 31, 2019 and December 31, 2018, respectively. The United States Department of Agriculture Farm Service Agency guaranteed loans have increased as a result of recent acquisitions.

-12-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3. LOANS RECEIVABLE – continued

The following table includes information regarding nonperforming assets.

	March 31,			December 31,
	2019			2018
	(Dollars in Thousands)
Non-accrual loans	$	4,506		$	2,268
Accruing loans delinquent 90 days or more		788			1,477
Restructured loans, net		22			22
Total nonperforming loans		5,316			3,767
Real estate owned and other repossessed assets, net		354			107
Total nonperforming assets	$	5,670		$	3,874
Total nonperforming assets as a percentage of total assets		0.58	%		0.45	%
Allowance for loan losses	$	7,100		$	6,600
Percent of allowance for loan losses to nonperforming loans		133.56	%		175.21	%
Percent of allowance for loan losses to nonperforming assets		125.22	%		170.37	%

Allowance for loan losses activity was as follows:

	Residential		Commercial			Home
	1-4 Family		Real Estate			Equity		Consumer			Commercial			Total
	(In Thousands)
Allowance for loan losses:
Beginning balance, January 1, 2019	$	1,301	$	3,593		$	477	$	190		$	1,039		$	6,600
Charge-offs		-		(20	)		-		(9	)		(95	)		(124	)
Recoveries		-		6			-		6			8			20
Provision		-		344			-		10			250			604
Ending balance, March 31, 2019	$	1,301	$	3,923		$	477	$	197		$	1,202		$	7,100
Ending balance, March 31, 2019 allocated to loans individually evaluated for impairment	$	-	$	-		$	-	$	-		$	-		$	-
Ending balance, March 31, 2019 allocated to loans collectively evaluated for impairment	$	1,301	$	3,923		$	477	$	197		$	1,202		$	7,100
Loans receivable:
Ending balance, March 31, 2019	$	144,313	$	394,988		$	54,637	$	19,043		$	116,122		$	729,103
Ending balance, March 31, 2019 of loans individually evaluated for impairment	$	984	$	1,239		$	433	$	129		$	1,743		$	4,528
Ending balance, March 31, 2019 of loans collectively evaluated for impairment	$	143,329	$	393,749		$	54,204	$	18,914		$	114,379		$	724,575

-13-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3. LOANS RECEIVABLE - continued

	Residential		Commercial		Home
	1-4 Family		Real Estate		Equity			Consumer			Commercial			Total
	(In Thousands)
Allowance for loan losses:
Beginning balance, January 1, 2018	$	1,301	$	2,778	$	506		$	225		$	940		$	5,750
Charge-offs		-		-		(80	)		(27	)		(23	)		(130	)
Recoveries		-		3		1			2			2			8
Provision		-		421		-			-			81			502
Ending balance, March 31, 2018	$	1,301	$	3,202	$	427		$	200		$	1,000		$	6,130
Ending balance, March 31, 2018 allocated to loans individually evaluated for impairment	$	-	$	-	$	-		$	4		$	-		$	4
Ending balance, March 31, 2018 allocated to loans collectively evaluated for impairment	$	1,301	$	3,202	$	427		$	196		$	1,000		$	6,126
Loans receivable:
Ending balance, March 31, 2018	$	139,499	$	272,915	$	52,028		$	17,252		$	86,296		$	567,990
Ending balance, March 31, 2018 of loans individually evaluated for impairment	$	1,325	$	1,524	$	241		$	110		$	162		$	3,362
Ending balance, March 31, 2018 of loans collectively evaluated for impairment	$	138,174	$	271,391	$	51,787		$	17,142		$	86,134		$	564,628

-14-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3. LOANS RECEIVABLE - continued

Internal classification of the loan portfolio was as follows:

	March 31, 2019
			Special
	Pass		Mention		Substandard		Doubtful		Loss		Total
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	115,611	$	-	$	1,010	$	-	$	-	$	116,621
Residential 1-4 family construction		27,057		-		635		-		-		27,692
Commercial real estate		300,730		1,703		2,428		-		-		304,861
Commercial construction and development		44,998		-		-		-		-		44,998
Farmland		44,844		-		285		-		-		45,129
Other loans:
Home equity		54,204		-		433		-		-		54,637
Consumer		18,872		-		171		-		-		19,043
Commercial		72,876		228		833		-		-		73,937
Agricultural		40,591		-		1,594		-		-		42,185
Total	$	719,783	$	1,931	$	7,389	$	-	$	-	$	729,103

	December 31, 2018
			Special
	Pass		Mention		Substandard		Doubtful		Loss		Total
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	116,065	$	-	$	874	$	-	$	-	$	116,939
Residential 1-4 family construction		26,533		-		635		-		-		27,168
Commercial real estate		252,731		1,731		2,322		-		-		256,784
Commercial construction and development		41,726		-		13		-		-		41,739
Farmland		29,915		-		-		-		-		29,915
Other loans:
Home equity		51,668		-		491		-		-		52,159
Consumer		16,394		-		171		-		-		16,565
Commercial		57,778		950		244		81		-		59,053
Agricultural		17,305		-		404		-		-		17,709
Total	$	610,115	$	2,681	$	5,154	$	81	$	-	$	618,031

-15-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3. LOANS RECEIVABLE - continued

Credit risk profile based on payment activity of the loan portfolio was as follows. Nonperforming loans include non-accrual loans and accruing loans delinquent 90 days or more.

	March 31, 2019
			Restructured
	Performing		Loans		Nonperforming		Total
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	116,272	$	-	$	349	$	116,621
Residential 1-4 family construction		27,057		-		635		27,692
Commercial real estate		304,313		-		548		304,861
Commercial construction and development		44,998		-		-		44,998
Farmland		44,213		-		916		45,129
Other loans:
Home equity		54,204		22		411		54,637
Consumer		18,914		-		129		19,043
Commercial		73,119		-		818		73,937
Agricultural		40,697		-		1,488		42,185
Total	$	723,787	$	22	$	5,294	$	729,103

	December 31, 2018
			Restructured
	Performing		Loans		Nonperforming		Total
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	116,556	$	-	$	383	$	116,939
Residential 1-4 family construction		26,534		-		634		27,168
Commercial real estate		255,005		-		1,779		256,784
Commercial construction and development		41,726		-		13		41,739
Farmland		29,915		-		-		29,915
Other loans:
Home equity		51,668		22		469		52,159
Consumer		16,438		-		127		16,565
Commercial		58,745		-		308		59,053
Agricultural		17,677		-		32		17,709
Total	$	614,264	$	22	$	3,745	$	618,031

-16-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3. LOANS RECEIVABLE - continued

The following tables include information regarding delinquencies within the loan portfolio.

	March 31, 2019
	Loans Past Due and Still Accruing
			90 Days
	30-89 Days		and				Non-Accrual		Current		Total
	Past Due		Greater		Total		Loans		Loans		Loans
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	937	$	-	$	937	$	349	$	115,335	$	116,621
Residential 1-4 family construction				-		-		635		27,057		27,692
Commercial real estate		181		-		181		548		304,132		304,861
Commercial construction and development		25		-		25		-		44,973		44,998
Farmland		-		225		225		691		44,213		45,129
Other loans:
Home equity		225		-		225		433		53,979		54,637
Consumer		191		-		191		129		18,723		19,043
Commercial		257		-		257		818		72,862		73,937
Agricultural		257		563		820		925		40,440		42,185
Total	$	2,073	$	788	$	2,861	$	4,528	$	721,714	$	729,103

	December 31, 2018
	Loans Past Due and Still Accruing
			90 Days
	30-89 Days		and				Non-Accrual		Current		Total
	Past Due		Greater		Total		Loans		Loans		Loans
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	381	$	130	$	511	$	253	$	116,175	$	116,939
Residential 1-4 family construction		118		-		118		634		26,416		27,168
Commercial real estate		975		1,347		2,322		432		254,030		256,784
Commercial construction and development		9		-		9		13		41,717		41,739
Farmland		-		-		-		-		29,915		29,915
Other loans:
Home equity		39		-		39		491		51,629		52,159
Consumer		135		-		135		127		16,303		16,565
Commercial		284		-		284		308		58,461		59,053
Agricultural		91		-		91		32		17,586		17,709
Total	$	2,032	$	1,477	$	3,509	$	2,290	$	612,232	$	618,031

-17-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3. LOANS RECEIVABLE - continued

The following tables include information regarding impaired loans.

	March 31, 2019
			Unpaid
	Recorded		Principal		Related
	Investment		Balance		Allowance
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	349	$	376	$	-
Residential 1-4 family construction		635		685		-
Commercial real estate		548		681		-
Commercial construction and development		-		-		-
Farmland		691		728		-
Other loans:
Home equity		433		462		-
Consumer		129		138		-
Commercial		818		923		-
Agricultural		925		926		-
Total	$	4,528	$	4,919	$	-

	December 31, 2018
			Unpaid
	Recorded		Principal		Related
	Investment		Balance		Allowance
Real estate loans:
Residential 1-4 family	$	253	$	277	$	-
Residential 1-4 family construction		634		684		-
Commercial real estate		432		527		-
Commercial construction and development		13		26		-
Farmland		-		-		-
Other loans:
Home equity		491		522		-
Consumer		127		181		-
Commercial		308		310		-
Agricultural		32		32		-
Total	$	2,290	$	2,559	$	-

-18-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3. LOANS RECEIVABLE – continued

	Three Months Ended
	March 31,
	2019		2018
	Average Recorded Investment
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	301	$	672
Residential 1-4 family construction		634		228
Commercial real estate		490		762
Commercial construction and development		7		-
Farmland		346		-
Other loans:
Home equity		462		242
Consumer		128		131
Commercial		563		135
Agricultural		478		-
Total	$	3,409	$	2,170

Interest income recognized on impaired loans for the three months ended March 31, 2019 and 2018 is considered insignificant.

NOTE 4. TROUBLED DEBT RESTRUCTURINGS

A troubled debt restructured (“TDR”) loan is a loan in which the Bank grants a concession to the borrower that it would not otherwise consider, for reasons related to a borrower's financial difficulties. The loan terms which have been modified or restructured due to a borrower's financial difficulty, include but are not limited to a reduction in the stated interest rate; an extension of the maturity at an interest rate below current market rates; a reduction in the face amount of the debt; a reduction in the accrued interest; or re-aging, extensions, deferrals, renewals and rewrites or a combination of these modification methods.

The Company offers a variety of modifications to borrowers. The modification categories offered can generally be described in the following categories:

Rate Modification – A modification in which the interest rate is changed.

Term Modification – A modification in which the maturity date, timing of payments, or frequency of payments is changed.

Interest Only Modification – A modification in which the loan is converted to interest only payments for a period of time.

Payment Modification – A modification in which the dollar amount of the payment is changed, other than an interest only modification described above.

Combination Modification – Any other type of modification, including the use of multiple categories above.

During the year ended December 31, 2018, there was one new restructured loan. The recorded investment at time of restructure was $23,000 and no charge-off was incurred. The loan is a home equity loan and is on non-accrual status. The recorded investment was $22,000 at March 31, 2019 and December 31, 2018.

-19-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 4. TROUBLED DEBT RESTRUCTURINGS – continued

There were no loans modified as a troubled debt restructured loan that defaulted during the quarter ended March 31, 2019 where the default occurred within 12 months of restructuring. A default for purposes of this disclosure is a troubled debt restructured loan in which the borrower is 90 days past due or results in the foreclosure and repossession of the applicable collateral.

As of March 31, 2019, the Company had no commitments to lend additional funds to loan customers whose terms had been modified in trouble debt restructures.

NOTE 5. DEPOSITS

Deposits are summarized as follows:

	March 31,		December 31,
	2019		2018
	(In Thousands)
Noninterest checking	$	180,070	$	142,788
Interest bearing checking		111,437		105,115
Savings		124,992		108,234
Money market		122,110		108,050
Time certificates of deposit		202,436		162,424
Total	$	741,045	$	626,611

-20-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 6. OTHER LONG-TERM DEBT

Other long-term debt consisted of the following:

	March 31, 2019					December 31, 2018
			Unamortized					Unamortized
			Debt					Debt
	Principal		Issuance			Principal		Issuance
	Amount		Costs			Amount		Costs
	(In Thousands)
Senior notes fixed at 5.75%, due 2022	$	10,000	$	(125	)	$	10,000	$	(136	)
Subordinated debentures fixed at 6.75%, due 2025		10,000		(138	)		10,000		(143	)
Subordinated debentures variable at 3-Month Libor plus 1.42%, due 2035		5,155		-			5,155		-
Total other long-term debt	$	25,155	$	(263	)	$	25,155	$	(279	)

In February 2017, the Company completed the issuance, through a private placement, of $10,000,000 aggregate principal amount of 5.75% fixed senior unsecured notes due in 2022. The interest will be paid semi-annually through maturity date. The notes are not subject to redemption at the option of the Company.

In June 2015, the Company completed the issuance of $10,000,000 in aggregate principal amount of subordinated notes due in 2025 in a private placement transaction to an institutional accredited investor. The notes will bear interest at an annual fixed rate of 6.75% and interest will be paid quarterly through maturity date or earlier redemption.

In September 2005, the Company completed the private placement of $5,155,000 in subordinated debentures to Eagle Bancorp Statutory Trust I (“the Trust”). The Trust funded the purchase of the subordinated debentures through the sale of trust preferred securities to First Tennessee Bank, N.A. with a liquidation value of $5,155,000. Using interest payments made by the Company on the debentures, the Trust began paying quarterly dividends to preferred security holders in December 2005. The annual percentage rate of the interest payable on the subordinated debentures and distributions payable on the preferred securities was fixed at 6.02% until December 2010 then became variable at 3-Month LIBOR plus 1.42%, making the rate 4.020% and 4.228% as of March 31, 2019 and December 31, 2018, respectively. Dividends on the preferred securities are cumulative and the Trust may defer the payments for up to five years. The preferred securities mature in December 2035 unless the Company elects and obtains regulatory approval to accelerate the maturity date.

For the three months ended March 31, 2019 and 2018, interest expense on other long-term debt was $365,000 and $347,000, respectively.

NOTE 7. EARNINGS PER SHARE

Basic earnings per share for the three months ended March 31, 2019 was computed using 6,450,326 weighted average shares outstanding. Basic earnings per share for the three months ended March 31, 2018 was computed using 5,311,527 weighted average shares outstanding. Diluted earnings per share was computed using the treasury stock method by adjusting the number of shares outstanding by the shares purchased. The weighted average shares outstanding for the diluted earnings per share calculations was 6,510,486 for the three months ended March 31, 2019 and 5,375,987 for the three months ended March 31, 2018. There were no antidilutive shares for the three months ended March 31, 2019 or 2018.

-21-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 8. DIVIDENDS AND STOCK REPURCHASE PROGRAM

For the year ended December 31, 2018, Eagle paid dividends of $0.09 per share for the quarters ended March 31 and June 30, 2018. Eagle paid dividends of $0.0925 per share for the quarters ended September 30 and December 31, 2018. A dividend of $0.0925 per share was declared on January 24, 2019 and paid March 1, 2019 to shareholders of record on February 8, 2019. A dividend of $0.0925 per share was declared on April 18, 2019, payable on June 7, 2019 to shareholders of record on May 17, 2019.

On July 19, 2018, the Board authorized the repurchase of up to 100,000 shares of its common stock. 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. No shares were purchased under this plan during the year ended December 31, 2018. However, during the first quarter of 2019, 42,000 shares were purchased at an average price of $17.43 per share. In addition, 28,000 shares were purchased during April 2019 at an average price of $17.09 per share. The plan expires on July 19, 2019.

On July 20, 2017, the Board authorized the repurchase of up to 100,000 shares of its common stock. Under the plan, shares could be purchased by the Company on the open market or in privately negotiated transactions. No shares were purchased under this plan. The plan expired on July 20, 2018.

NOTE 9. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table includes information regarding the activity in accumulated other comprehensive income (loss).

				Unrealized
	Unrealized			(Losses) Gains
	Gains (Losses)			on Investment
	on Loans			Securities
	Held-for-Sale			Available-for-Sale			Total
Balance, January 1, 2019	$	227		$	(1,338	)	$	(1,111	)
Other comprehensive income, before reclassifications and income taxes		296			1,486			1,782
Amounts reclassified from accumulated other comprehensive income (loss), before income taxes		(309	)		55			(254	)
Income tax benefit (expense)		4			(407	)		(403	)
Total other comprehensive (loss) income		(9	)		1,134			1,125
Balance, March 31, 2019	$	218		$	(204	)	$	14
Balance, January 1, 2018	$	234		$	79		$	313
Other comprehensive income (loss), before reclassifications and income taxes		262			(2,583	)		(2,321	)
Amounts reclassified from accumulated other comprehensive income, before income taxes		(325	)		105			(220	)
Income tax benefit		17			660			677
Total other comprehensive loss		(46	)		(1,818	)		(1,864	)
Balance, March 31, 2018	$	188		$	(1,739	)	$	(1,551	)

-22-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 10. DERIVATIVES AND HEDGING ACTIVITIES

Interest Rate Lock and Forward Commitments

Outstanding derivative loan commitments expose the Company to the risk that the price of the loans arising from exercise of the loan commitment might decline from inception of the rate lock to funding of the loan due to increases in mortgage interest rates. If interest rates increase, the value of these loan commitments decreases. Conversely, if interest rates decrease, the value of these loan commitments increases. The Company also enters into forward commitments to hedge against adverse price or interest rate movements on loan commitments. The notional amount of forward commitments was $21,000,000 and $16,000,000 at March 31, 2019 and December 31, 2018, respectively The notional amount of interest rate lock commitments was $32,496,000 and $18,745,000 at March 31, 2019 and December 31, 2018, respectively. The fair value of such commitments was insignificant.

The Company has no other off-balance-sheet arrangements or transactions with unconsolidated, special purpose entities that would expose the Company to liability that is not reflected on the face of the financial statements.

NOTE 11. FAIR VALUE DISCLOSURES

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

There are three levels of inputs that may be used to measure fair values:

Level 1 Inputs – Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date, or convert to cash in the short term.

Level 2 Inputs – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (for example, interest rates, volatilities, prepayment speeds, loss severities, credit risks and default rates) or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 Inputs – Significant unobservable inputs that reflect an entity’s own assumptions that market participants would use in pricing the assets or liabilities.

A description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

Available-for-Sale Securities – Securities classified as available-for-sale are reported at fair value utilizing Level 1 and Level 2 inputs. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U. S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayments speeds, credit information and the bond’s terms and conditions, among other things.

-23-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 11. FAIR VALUE DISCLOSURES – continued

Impaired Loans – Impaired loans are reported at the fair value of the underlying collateral if repayment is expected solely from the collateral. Collateral values are estimated using Level 3 inputs based on internally customized discounting criteria.

Loans Held-for-Sale – These loans are reported at fair value. Fair value is determined based on expected proceeds based on sales contracts and commitments and are considered Level 2 inputs.

Repossessed Assets – Fair values are valued at the time the loan is foreclosed upon and the asset is transferred from loans. The value is based upon primary third party appraisals, less costs to sell. The appraisals are generally discounted based on management’s historical knowledge, changes in market conditions from the time of valuation, and/or management’s expertise and knowledge of the client and client’s business. Such discounts are typically significant and result in Level 3 classification of the inputs for determining fair value. Repossessed assets are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on same or similar factors above.

The following tables summarize financial assets and financial liabilities measured at fair value on a recurring basis, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value.

	March 31, 2019
	Level 1		Level 2		Level 3		Total Fair
	Inputs		Inputs		Inputs		Value
	(In Thousands)
Financial assets:
Available-for-sale securities
U.S. government and agency	$	-	$	9,746	$	-	$	9,746
Municipal obligations		-		67,556		-		67,556
Corporate obligations		-		11,281		-		11,281
Mortgage-backed securities		-		17,686		-		17,686
Collateralized mortgage obligations		-		23,764		-		23,764
Asset-backed securities		-		10,128		-		10,128
Loans held-for-sale		-		8,075		-		8,075

	December 31, 2018
	Level 1		Level 2		Level 3		Total Fair
	Inputs		Inputs		Inputs		Value
	(In Thousands)
Financial assets:
Available-for-sale securities
U.S. government and agency	$	-	$	9,347	$	-	$	9,347
Municipal obligations		-		68,278		-		68,278
Corporate obligations		-		11,119		-		11,119
Mortgage-backed securities		-		19,348		-		19,348
Collateralized mortgage obligations		-		23,875		-		23,875
Asset-backed securities		-		10,198		-		10,198
Loans held-for-sale		-		7,318		-		7,318

-24-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 11. FAIR VALUE DISCLOSURES - continued

Certain financial assets and financial liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).

The following table summarizes financial assets and financial liabilities measured at fair value on a nonrecurring basis, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

	March 31, 2019
	Level 1		Level 2		Level 3		Total Fair
	Inputs		Inputs		Inputs		Value
	(In Thousands)
Impaired loans	$	-	$	-	$	4,528	$	4,528
Repossessed assets		-		-		354		354

	December 31, 2018
	Level 1		Level 2		Level 3		Total Fair
	Inputs		Inputs		Inputs		Value
	(In Thousands)
Impaired loans	$	-	$	-	$	2,290	$	2,290
Repossessed assets		-		-		107		107

As of March 31, 2019, impaired loans with a carrying value of $4,528,000 were not reduced by specific valuation allowance allocations and therefore resulted in a total reported fair value of $4,528,000 based on collateral valuations utilizing Level 3 valuation inputs.

As of December 31, 2018, impaired loans with a carrying value of $2,290,000 were not reduced by specific valuation allowance allocations and therefore resulted in a total reported fair value of $2,290,000 based on collateral valuations utilizing Level 3 valuation inputs.

The following table represents the Banks’s Level 3 financial assets and liabilities, the valuation techniques used to measure the fair value of those financial assets and liabilities, and the significant unobservable inputs and the ranges of values for those inputs.

	Fair Value at				Principal		Significant		Range of
	March 31,		December 31,		Valuation		Unobservable		Signficant Input
Instrument	2019		2018		Technique		Inputs		Values
(Dollars In Thousands)
Impaired loans	$	4,528	$	2,290		Appraisal of collateral(1)		Appraisal adjustments		10	-	30%
Repossessed assets	$	354	$	107		Appraisal of collateral(1)(3)		Liquidation expenses(2)		10	-	30%

⁽¹⁾  Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable, less associated allowance.

⁽²⁾  Appraisals may be adjusted for qualitative factors such as economic conditions and estimated liquidation expenses. The range of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

⁽³⁾  Includes qualitative adjustments by management and estimated liquidation expenses.

-25-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 11. FAIR VALUE DISCLOSURES - continued

FASB ASC Topic 825 requires disclosure of the fair value of financial instruments, both assets and liabilities recognized and not recognized in the statement of financial position, for which it is practicable to estimate fair value. Below is a table that summarizes the fair market values of all financial instruments of the Company at March 31, 2019 and December 31, 2018, followed by methods and assumptions that were used by the Company in estimating the fair value of the classes of financial instruments.

Because broadly traded markets do not exist for most of the Company’s financial instruments, the fair value calculations attempt to incorporate the effect of current market conditions at a specific time. These determinations are subjective in nature, involve uncertainties and matters of significant judgment and do not include tax ramifications; therefore, the results cannot be determined with precision, substantiated by comparison to independent markets and may not be realized in an actual sale or immediate settlement of the instruments. There may be inherent weaknesses in any calculation technique, and changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results. For all of these reasons, the aggregation of the fair value calculations presented herein do not represent, and should not be construed to represent, the underlying value of the Company.

	March 31, 2019
							Total
	Level 1		Level 2		Level 3		Estimated		Carrying
	Inputs		Inputs		Inputs		Fair Value		Amount
	(In Thousands)
Financial assets:
Cash and cash equivalents	$	11,279	$	-	$	-	$	11,279	$	11,279
Federal Home Loan Bank stock		4,807		-		-		4,807		4,807
Federal Reserve Bank stock		2,040		-		-		2,040		2,040
Loans receivable, net		-		-		722,217		722,217		721,712
Accrued interest and dividends receivable		5,005		-		-		5,005		5,005
Mortgage servicing rights		-		-		8,630		8,630		7,318
Financial liabilities:
Non-maturing interest bearing deposits		-		358,539		-		358,539		358,539
Noninterest bearing deposits		180,070		-		-		180,070		180,070
Time certificates of deposit		-		-		201,019		201,019		202,436
Accrued expenses and other liabilities		9,061		-		-		9,061		9,061
Federal Home Loan Bank advances and other borrowings		-		-		92,175		92,175		92,313
Other long-term debt		-		-		24,294		24,294		25,155
Off-balance-sheet instruments		-
Forward delivery commitments		-		-		-		-		-
Commitments to extend credit		-		-		-		-		-
Rate lock commitments		-		-		-		-		-

-26-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 11. FAIR VALUE DISCLOSURES – continued

	December 31, 2018
							Total
	Level 1		Level 2		Level 3		Estimated		Carrying
	Inputs		Inputs		Inputs		Fair Value		Amount
	(In Thousands)
Financial assets:
Cash and cash equivalents	$	11,201	$	-	$	-	$	11,201	$	11,201
Federal Home Loan Bank stock		5,011		-		-		5,011		5,011
Federal Reserve Bank stock		2,033		-		-		2,033		2,033
Loans receivable, net		-		-		603,361		603,361		608,043
Accrued interest and dividends receivable		3,479		-		-		3,479		3,479
Mortgage servicing rights		-		-		8,670		8,670		7,100
Financial liabilities:
Non-maturing interest bearing deposits		-		321,399		-		321,399		321,399
Noninterest bearing deposits		142,788		-		-		142,788		142,788
Time certificates of deposit		-		-		160,735		160,735		162,424
Accrued expenses and other liabilities		5,388		-		-		5,388		5,388
Federal Home Loan Bank advances and other borrowings		-		-		101,885		101,885		102,222
Other long-term debt		-		-		24,002		24,002		25,155
Off-balance-sheet instruments		-
Forward delivery commitments		-		-		-		-		-
Commitments to extend credit		-		-		-		-		-
Rate lock commitments		-		-		-		-		-

The following methods and assumptions were used by the Company in estimating the fair value of the following classes of financial instruments. However, the Form 10-K for the year ended December 31, 2018 provides additional description of valuation methodologies used in estimating fair value of these financial instruments.

Cash, Interest Bearing Accounts, Accrued Interest and Dividend Receivable and Accrued Expenses and Other Liabilities – The carrying amounts approximate fair value due to the relatively short period of time between the origination of these instruments and their expected realization.

Stock in the Federal Home Loan Bank of Des Moines (“FHLB”) and Federal Reserve Bank (“FRB”) – The fair value of stock approximates redemption value.

Loans Receivable – Fair values are estimated by stratifying the loan portfolio into groups of loans with similar financial characteristics. Loans are segregated by type such as real estate, commercial, and consumer, with each category further segmented into fixed and adjustable rate interest terms. For mortgage loans, the Company uses the secondary market rates in effect for loans that have similar characteristics. The fair value of other fixed rate loans is calculated by discounting scheduled cash flows through the anticipated maturities adjusted for prepayment estimates. Adjustable interest rate loans are assumed to approximate fair value because they generally reprice within the short term.

Fair values are adjusted for credit risk based on assessment of risk identified with specific loans, and risk adjustments on the remaining portfolio based on credit loss experience.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 11. FAIR VALUE DISCLOSURES – continued

Mortgage Servicing Rights – the fair value of servicing rights was determined at loan level using a discount rate of 12.00% for all investor types and prepayment speeds ranging from 89.00% to 239.00% PSA (Public Securities Association prepayment model), depending on the interest rate and term of the specific loan. The weighted average prepayment speed was 113.00% PSA. Individual mortgage servicing rights values were capped at a maximum of 1.25% for all investor types.

Deposits and Time Certificates of Deposit – The fair value of deposits with no stated maturity, such as checking, passbook, and money market, is equal to the amount payable on demand. The fair value of time certificates of deposit is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar maturities.

Advances from the FHLB/Other Borrowings and Other Long-Term Debt – The fair value of the Company’s advances and debentures are estimated using discounted cash flow analysis based on the interest rate that would be effective March 31, 2019 and December 31, 2018, respectively if the borrowings repriced according to their stated terms.

Off-Balance-Sheet Instruments - Fair values for off-balance-sheet, credit-related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. The fair values of these financial instruments are considered insignificant. Additionally, those financial instruments have no carrying value.

NOTE 12. MERGERS AND ACQUISITIONS

Effective January 1, 2019, Eagle completed its previously announced merger with BMB, pursuant to an Agreement and Plan of Merger, dated as of August 21, 2018, by and among Eagle, Opportunity Bank of Montana, BMB and BMB’s wholly-owned subsidiary, SBOT, a Montana chartered commercial bank. BMB merged with and into Eagle, with Eagle continuing as the surviving corporation. SBOT operated four branches in Townsend, Dutton, Denton and Choteau, Montana. The transaction provided an opportunity to expand market presence and lending activities, throughout the state. The acquisition closed after receipt of approvals from regulatory authorities, approval of BMB shareholders and the satisfaction of other closing conditions. The total consideration paid was $16,436,000 and included cash consideration of $1,000 and common stock issued of $16,435,000.

On September 5, 2017, the Company entered into an Agreement and Plan of Merger with TwinCo, a Montana corporation, and TwinCo’s wholly-owned subsidiary, Ruby Valley Bank, a Montana chartered commercial bank to acquire 100% of TwinCo’s equity voting interests. The merger agreement provided that Ruby Valley Bank would merge with and into Opportunity Bank of Montana and that TwinCo would merge with and into the Company. Ruby Valley Bank operated 2 branches in Madison County, Montana. The transaction provided an opportunity to expand market presence and lending activities, particularly in agricultural lending. The acquisition closed January 31, 2018, after receipt of approvals from regulatory authorities, approval of TwinCo shareholders and the satisfaction of other closing conditions. The total consideration paid was $18,930,000 and included cash consideration of $9,900,000 and common stock issued of $9,030,000.

These transactions were accounted for under the acquisition method of accounting in accordance with FASB ASC 805, Business Combinations. In business combination transactions in which the consideration given is not in the form of cash (that is, in the form of non-cash assets, liabilities incurred, or equity interests issued), measurement of the acquisition consideration is based on the fair value of the consideration given or the fair value of the asset (or net assets) acquired, whichever is more clearly evident and, thus, a more reliable measure.

Under FASB ASC 805, all of the assets acquired and liabilities assumed in a business combination are recognized at acquisition at their acquisition-date fair value, while transaction costs and restructuring costs associated with the business combination are expensed as incurred. The excess of the acquisition consideration over the fair value of assets acquired and liabilities assumed, if any, is allocated to goodwill. Goodwill recorded in the acquisitions was accounted for in accordance with the authoritative business combination guidance. Accordingly, goodwill will not be amortized, but will be tested for impairment annually. The goodwill recorded is not deductible for federal income tax purposes.

-28-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 12. MERGERS AND ACQUISITIONS – continued

The assets acquired and liabilities assumed were recorded on the consolidated statement of financial condition at estimated fair value on acquisition date. The following table summarizes the fair values of the assets acquired and liabilities assumed, consideration paid and the resulting goodwill. Amounts are considered provisional due to the timing of the acquisition.

	BMB		TwinCo
	January 1,		January 31,
	2019		2018
	(In Thousands)
Assets acquired:
Cash and cash equivalents	$	6,902	$	5,657
Investment securities		2,096		30,728
Loans		89,204		55,057
Premises and equipment		2,246		1,605
Cash surrender value of life insurance		2,862		-
Other real estate owned		223		135
Core deposit intangible		1,988		1,609
Other assets		1,995		1,258
Total assets acquired	$	107,516	$	96,049
Liabilities assumed:
Deposits	$	92,706	$	82,190
Accrued expenses and other liabilities		1,960		19
Total liabilities assumed	$	94,666	$	82,209
Net assets acquired	$	12,850	$	13,840
Consideration paid:
Cash	$	1	$	9,900
Common stock issued (996,041 shares BMB and 446,774 shares TwinCo)		16,435		9,030
Total consideration paid	$	16,436	$	18,930
Goodwill resulting from acquisition	$	3,586	$	5,090

For both the BMB and TwinCo acquisitions, the fair value analysis of the loan portfolios resulted in a valuation adjustment for each loan based on an amortization schedule of expected cash flow. Individual amortization schedules were used for each loan over a certain amount and those with specifically identified loss exposure. The remainder of the loans were grouped by type and risk rating into loan pools (based on loans type, fixed or variable interest rate, revolving or term payments and risk rating). Yield inputs for the amortization schedules included contractual interest rates, estimated prepayment speeds, liquidity adjustments and market yields. Credit inputs for the amortization schedules included probability of payment default, loss given default rates and individually identified loss exposure.

-29-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 12. MERGERS AND ACQUISITIONS – continued

The total discount on BMB acquired loans was $2,813,000 as of January 1, 2019. During the quarter ended March 31, 2019, accretion of the loan discount was $439,000. The remaining loan discount was $2,374,000 as of March 31, 2019.

The total discount on TwinCo acquired loans was $1,834,000 as of January 31, 2018. During the quarter ended March 31, 2019, accretion of the loan discount was $81,000. During the year ended December 31, 2018, accretion of the loan discount was $589,000. The remaining loan discount was $1,164,000 as of March 31, 2019.

Four impaired loans were acquired through the BMB acquisition with a balance of $556,000 as of January 1, 2019. The balance of the loans as of March 31, 2019 was $544,000. Two impaired loans were acquired through the TwinCo acquisition with a balance of $1,188,000 as of January 31, 2018. The balance of the loans as of March 31, 2019 was $1,166,000. Acquired impaired loans are considered immaterial for separate disclosure in Note 3. Loans Receivable. The amounts recognized for loans have been determined provisionally due to the timing of the transaction.

Core deposit intangible assets of $1,988,000 were recorded for BMB and are being amortized using an accelerated method over the estimated useful lives of the related deposits of 10 years. The amounts recognized for deposits have been determined provisionally due to the timing of the transaction. Core deposit intangible assets of $1,609,000 were recorded for TwinCo and are being amortized using an accelerated method over the estimated useful lives of the related deposits of 10 years.

For both the BMB and TwinCo acquisition, the core deposit intangible value is a function of the difference between the cost of the acquired core deposits and the alternative cost of funds. These cash flow streams were discounted to present value. The fair value of other deposit accounts acquired were valued by estimating future cash flows to be received or paid from individual or homogenous groups of assets and liabilities and then discounting those cash flows to a present value using rates of return that were available in financial markets for similar financial instruments on or near the acquisition date.

Direct costs related to the acquisitions were expensed as incurred. The Company recorded acquisition costs related to BMB of $1,171,000 during the quarter ended March 31, 2019 and $804,000 during the year ended December 31, 2018. The Company recorded acquisition costs related to the TwinCo acquisition of $131,000 during the quarter ended June 30, 2018, $234,000 during the quarter ended March 31, 2018 and $676,000 during the year ended December 31, 2017. Acquisition costs included legal and professional fees and data processing expenses incurred related to the acquisitions.

Operations of BMB have been included in the consolidated financial statements since January 1, 2019. The Company does not consider BMB a separate reporting segment and does not track the amount of revenues and net income attributable to BMB since acquisition. As such, it is impracticable to determine such amounts for the period from January 1, 2019 through March 31, 2019.

Operations of TwinCo have been included in the consolidated financial statements since February 1, 2018. The Company does not consider TwinCo a separate reporting segment and does not track the amount of revenues and net income attributable to TwinCo since acquisition. As such, it is impracticable to determine such amounts for the period from February 1, 2018 through March 31, 2019.

-30-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 12. MERGERS AND ACQUISITIONS – continued

The accompanying consolidated statements of income include the results of operations of the BMB acquired entity since the January 1, 2019 acquisition date. The following table presents unaudited pro forma results of operations for the three months ended March 31, 2019 and 2018 as if the acquisition had occurred on January 1, 2018. This pro forma information gives effect to certain adjustments, including purchase accounting fair value adjustments and amortization of the core deposit intangible asset. The pro forma information does not necessarily reflect the results of operations that would have occurred had the Company purchased and assumed the assets and liabilities of BMB on January 1, 2018. Cost savings are also not reflected in the unaudited pro forma amounts for the three months ended March 31, 2019 and 2018.

	Three Months Ended
	March 31,
	2019		2018
	(In Thousands)
Pro forma net income1)
Net interest income after loan loss provision	$	8,771	$	7,520
Noninterest income		3,941		2,895
Noninterest expense		11,268		9,433
Income before income taxes1)		1,444		982
Income tax expense		289		197
Net income1)	$	1,155	$	785
Pro forma earnings per share1)
Basic earnings per share	$	0.18	$	0.21
Diluted earnings per share	$	0.18	$	0.20
Weighted average shares outstanding, basic		6,450,326		3,811,409
Weighted average shares outstanding, diluted		6,510,486		3,875,677

¹⁾ Significant assumptions utilized include the acquisition cost noted above, accretion of interest rate fair value adjustments and a 20% effective tax rate.

-31-

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 13. RECENT ACCOUNTING PRONOUNCEMENTS

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). This guidance is a comprehensive new revenue recognition standard that supersedes substantially all existing revenue recognition guidance. The new standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under existing guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. In July 2015, the FASB agreed to delay the effective date of the standard by one year. Therefore, the new standard was effective in the first quarter of 2018. The adoption of the standard in the first quarter of 2018 did not have a significant impact on our consolidated financial statements.

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities (Subtopic 825-10). The amendment has a number of provisions including the requirements that public business entities use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, a separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e. securities or loans receivables), and eliminating the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. The amendment was effective for annual and interim reporting periods beginning after December 15, 2017 and was adopted by the Company in the first quarter of 2018. Note 11. Fair Value Disclosures reflects the provisions of this pronouncement and did not have a significant impact on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) intended to improve financial reporting regarding leasing transactions. The new standard affects all companies and organizations that lease assets. The standard requires organizations to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases if the lease terms are more than 12 months. The guidance also requires qualitative and quantitative disclosures providing additional information about the amounts recorded in the financial statements. The amendments in this update were effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years and was adopted by the Company in the first quarter of 2019. The adoption of the standard did not have a significant impact on our consolidated financial statements. The Company’s operating leases primarily relate to branch locations. We currently lease six locations that are full-service branches and one mortgage lending branch. The leases expire on various dates through 2028. As a result of adopting the lease standard on January 1, 2019, the Company recorded right of use assets of $2,461,000 and corresponding lease liabilities. The right of use assets are included in premises and equipment, net and the lease liabilities are included in accrued expenses and other liabilities on the consolidated statement of financial condition.

In September 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The standard requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. The standard also requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. Additionally, the standard amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. 

The amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. All entities may adopt the amendments in this update earlier as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. An entity will apply the amendments in this update through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). 

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 13. RECENT ACCOUNTING PRONOUNCEMENTS – continued

The Company believes the amendments in this update will have an impact on the Company’s consolidated financial statements and is working to evaluate the significance of that impact. In that regard, we have established a working group under the direction of our Chief Financial Officer and Chief Credit Officer. The group is composed of individuals from the finance and credit administration areas of the Company. We are currently developing an implementation plan, including assessment of processes, segmentation of the loan portfolio and identifying and adding data fields necessary for analysis. The adoption of this standard is likely to result in an increase in the allowance for loan and lease losses as a result of changing from an “incurred loss” model to an “expected loss” model. While we currently cannot reasonably estimate the impact of adopting this standard, we expect the impact will be influenced by the composition, characteristics and quality of our loan and securities portfolios, as well as the general economic conditions and forecasts as of the adoption date.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350) to amend and simplify current goodwill impairment testing to eliminate Step 2 from the current provisions. Under the new guidance, an entity should perform the goodwill impairment test by comparing the fair value of a reporting unit with its carrying value and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if a quantitative impairment test is necessary. The guidance will be effective for the Company on January 1, 2020 and is not expected to have a significant impact on the Company’s consolidated financial statements.

In March 2017, the FASB issued ASU No. 2017-08, Receivables–Nonrefundable Fees and Other Costs (Subtopic 310-20) to shorten the amortization period for certain purchased callable debt securities held at a premium to the earliest call date. Currently, entities generally amortize the premium as a yield adjustment over the contractual life of the security. The guidance does not change the accounting for callable debt securities held at a discount. For public business entities, the guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The adoption of this standard in the first quarter of 2019 did not have a significant impact on our consolidated financial statements, as we typically do not invest in these types of securities.

NOTE 14. SUBSEQUENT EVENTS

As disclosed in our Form 8-K filed April 23, 2019, the number of authorized shares of common stock, $0.01 par value per share was increased from 8,000,000 shares to 20,000,000 shares.

In addition, See Note 8. Dividends and Stock Repurchase Program for subsequent event regarding repurchase of common stock during 2019.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

The Company’s primary business activity is the ownership of its wholly owned subsidiary, Opportunity Bank of Montana (the “Bank”). The Bank is a Montana chartered commercial bank that focuses on both consumer and commercial lending. It engages in typical banking activities: acquiring deposits from local markets and originating loans and investing in securities. Its deposits are insured by the Federal Deposit Insurance Corporation. The Bank’s primary component of earnings is its net interest margin (also called spread or margin), the difference between interest income and interest expense. The net interest margin is managed by management (through the pricing of its products and by the types of products offered and kept in portfolio), and is affected by changes in market interest rates. The Bank also generates noninterest income in the form of fee income and gain on sale of loans.

The Bank has a strong mortgage lending focus, with a large portion of its loan originations represented by single-family residential mortgages, which has enabled it to successfully market home equity loans, as well as a wide range of shorter term consumer loans for various personal needs (automobiles, recreational vehicles, etc.). In recent years, the Bank has also focused on adding commercial loans to its portfolio, both real estate and non-real estate. We have made significant progress in this initiative. The purpose of this diversification is to mitigate the Bank’s dependence on the residential mortgage market, as well as to improve its ability to manage its spread. Recent acquisitions have added to our agricultural loans, which generally have shorter maturities and nominally higher interest rates. This has provided additional interest income and improved interest rate sensitivity. The Bank’s management recognizes that fee income will also enable it to be less dependent on specialized lending and it now maintains a significant loan serviced portfolio which provides a steady source of fee income. Fee income is also supplemented with fees generated from the Bank’s deposit accounts. The Bank has a high percentage of non-maturity deposits, such as checking accounts and savings accounts, which allows management flexibility in managing its spread. Non-maturity deposits and certificates of deposits do not automatically reprice as interest rates rise. Gain on sale of loans also provides significant noninterest income in periods of high mortgage loan origination volumes. Such income will be adversely affected in periods of lower mortgage activity.    

Management continues to focus on improving the Bank’s core earnings. Core earnings can be described as income before taxes, with the exclusion of gain on sale of loans and adjustments to the market value of the Bank’s loan servicing portfolio. Management believes that the Bank will need to continue to concentrate on increasing net interest margin, other areas of fee income and control of operating expenses to achieve earnings growth going forward. Management’s strategy of growing the bank’s loan portfolio and deposit base is expected to help achieve these goals as follows: loans typically earn higher rates of return than investments; a larger deposit base should yield higher fee income; increasing the asset base will reduce the relative impact of fixed operating costs. The biggest challenge to the strategy is funding the growth of the Bank’s balance sheet in an efficient manner. Though deposit growth has been steady, it may become more difficult to maintain due to significant competition and possible reduced customer demand for deposits as customers may shift into other asset classes.

The level and movement of interest rates impacts the Bank’s earnings as well. The Federal Open Market Committee changed the federal funds target rate from 1.50% to 2.50% during the year ended December 31, 2018. The rate remained at 2.50% at March 31, 2019.

From time to time the Bank has considered growth through mergers or acquisition as an alternative to its strategy of organic growth. On September 5, 2017, the Company entered into an Agreement and Plan of Merger with TwinCo, a Montana corporation, and TwinCo’s wholly-owned subsidiary, Ruby Valley Bank, a Montana chartered commercial bank to acquire 100% of TwinCo’s equity voting interests. The merger agreement provided that Ruby Valley Bank would merge with and into Opportunity Bank of Montana and that TwinCo would merge with and into the Company. Ruby Valley Bank operated 2 branches in Madison County, Montana. The transaction provided an opportunity to expand market presence and lending activities, particularly in agricultural lending. The acquisition closed January 31, 2018, after receipt of approvals from regulatory authorities, approval of TwinCo shareholders and the satisfaction of other closing conditions. The total consideration paid was $18.93 million and included cash consideration of $9.90 million and common stock issued of $9.03 million.

Effective January 1, 2019, Eagle completed its previously announced merger with Big Muddy Bancorp, Inc. (“BMB”), pursuant to an Agreement and Plan of Merger, dated as of August 21, 2018, by and among Eagle, Opportunity Bank of Montana, BMB and BMB’s wholly-owned subsidiary, The State Bank of Townsend, a Montana chartered commercial bank. At the effective time of the Merger, BMB merged with and into Eagle, with Eagle continuing as the surviving corporation. The State Bank of Townsend operated four branches in Townsend, Dutton, Denton and Choteau, Montana. The transaction provided an opportunity to expand market presence and lending activities, throughout the state. The acquisition closed after receipt of approvals from regulatory authorities, approval of BMB shareholders and the satisfaction of other closing conditions. The total consideration paid was $16.44 million and it was primarily related to common stock issued. 

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Financial Condition

Comparisons of financial condition in this section are between March 31, 2019 and December 31, 2018.

Total assets were $979.60 million at March 31, 2019, an increase of $125.70 million, or 14.7%, from $853.90 million at December 31, 2018. The increase was largely due to the change in loans receivable significantly impacted by the acquisition of BMB. Loans receivable increased by $110.59 million, or 18.1%, to $720.92 million at March 31, 2019, from $610.33 million at December 31, 2018. Total liabilities were $867.31 million at March 31, 2019, an increase of $108.21 million, or 14.3%, from $759.10 million at December 31, 2018. The increase was mainly due to an increase in deposits largely due to the BMB acquisition. Total deposits increased by $114.44 million, or 18.3%, to $741.05 million at March 31, 2019, from $626.61 million at December 31, 2018.

Balance Sheet Details

Investment Activities

The following table summarizes investment activities:

	March 31,					December 31,
	2019					2018
	Fair Value		Percentage of Total			Fair Value		Percentage of Total
	(Dollars in Thousands)
Securities available-for-sale:
U.S. government and agency	$	9,746		6.53	%	$	9,347		6.22	%
Municipal obligations		67,556		45.27	%		68,278		45.44	%
Corporate obligations		11,281		7.56	%		11,119		7.40	%
Mortgage-backed securities		17,686		11.85	%		19,348		12.88	%
Collateralized mortgage obligations		23,764		15.92	%		23,875		15.89	%
Asset-backed securities		10,128		6.79	%		10,198		6.79	%
Total securities available-for-sale		140,161		93.92	%		142,165		94.62	%
Interest bearing deposits		2,225		1.49	%		1,057		0.70	%
FHLB capital stock, at cost		4,807		3.22	%		5,011		3.33	%
FRB capital stock, at cost		2,040		1.37	%		2,033		1.35	%
Total	$	149,233		100.00	%	$	150,266		100.00	%

Securities available-for-sale were $140.16 million at March, 31, 2019, a decrease of $2.01 million, or 1.4%, from $142.17 million at December 31, 2018. The largest decrease in securities available-for-sale was in mortgage-backed securities and it was due to principal payments.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Financial Condition – continued

Lending Activities

The following table includes the composition of the Bank’s loan portfolio by loan category:

	March 31,						December 31,
	2019						2018
	Amount			Percent of Total			Amount			Percent of Total
	(Dollars in thousands)
Real estate loans:
Residential 1-4 family (1)	$	116,621			16.00	%	$	116,939			18.92	%
Residential 1-4 family construction		27,692			3.80	%		27,168			4.40	%
Total residential 1-4 family		144,313			19.80	%		144,107			23.32	%
Commercial real estate		304,861			41.81	%		256,784			41.54	%
Commercial construction and development		44,998			6.17	%		41,739			6.75	%
Farmland		45,129			6.19	%		29,915			4.84	%
Total commercial real estate		394,988			54.17	%		328,438			53.13	%
Total real estate loans		539,301			73.97	%		472,545			76.45	%
Other loans:
Home equity		54,637			7.49	%		52,159			8.44	%
Consumer		19,043			2.61	%		16,565			2.68	%
Commercial		73,937			10.14	%		59,053			9.56	%
Agricultural		42,185			5.79	%		17,709			2.87	%
Total commercial loans		116,122			15.93	%		76,762			12.43	%
Total other loans		189,802			26.03	%		145,486			23.55	%
Total loans		729,103			100.00	%		618,031			100.00	%
Deferred loan fees		(1,083	)					(1,098	)
Allowance for loan losses		(7,100	)					(6,600	)
Total loans, net	$	720,920					$	610,333

⁽¹⁾ Excludes loans held-for-sale.

Loans receivable, net increased $110.59 million to $720.92 million at March 31, 2019 due largely the BMB acquisition. The BMB acquisition included $89.20 million of acquired loans. Excluding acquired loans, loans receivable increased by $21.39 million. Including acquired loans, total commercial real estate loans increased $66.55 million, total commercial loans increased $39.37 million, home equity loans increased $2.48 million, consumer loans increased $2.47 million and total residential loans increased $206,000. Total loan originations were $127.88 million for the three months ended March 31, 2019, with total residential 1-4 family accounting for $78.98 million of the total. Total commercial real estate originations were $31.09 million. Total commercial and home equity loan originations totaled $11.29 million and $4.37 million, respectively, for the same period. Consumer loan originations totaled $2.15 million. Loans held-for-sale increased by $757,000, to $8.08 million at March 31, 2019 from $7.32 million at December 31, 2018.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Financial Condition – continued

Lending Activities – continued

Nonperforming Assets. Generally, our collection procedures provide that when a loan is 15 or more days delinquent, the borrower is sent a past due notice. If the loan becomes 30 days delinquent, the borrower is sent a written delinquency notice requiring payment. If the delinquency continues, subsequent efforts are made to contact the delinquent borrower, including face to face meetings and counseling to resolve the delinquency. All collection actions are undertaken with the objective of compliance with the Fair Debt Collection Act.

For mortgage loans and home equity loans, if the borrower is unable to cure the delinquency or reach a payment agreement, we will institute foreclosure actions. If a foreclosure action is taken and the loan is not reinstated, paid in full or refinanced, the property is sold at judicial sale at which we may be the buyer if there are no adequate offers to satisfy the debt. Any property acquired as the result of foreclosure, or by deed in lieu of foreclosure, is classified as real estate owned until such time as it is sold or otherwise disposed of. When real estate owned is acquired, it is recorded at its fair market value less estimated selling costs. The initial recording of any loss is charged to the allowance for loan losses. Subsequent write-downs are recorded as a charge to operations. As of March 31, 2018, the Bank had $354,000 of real estate owned.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Financial Condition – continued

Lending Activities – continued

The following table sets forth information regarding nonperforming assets:

	March 31,			December 31,
	2019			2018
	(Dollars in Thousands)
Non-accrual loans
Real estate loans:
Residential 1-4 family	$	349		$	253
Residential 1-4 family construction		635			634
Commercial real estate		548			432
Commercial construction and development		-			13
Farmland		691			-
Other loans:
Home equity		411			469
Consumer		129			127
Commercial		818			308
Agricultural		925			32
Accruing loans delinquent 90 days or more
Real estate loans:
Residential 1-4 family		-			130
Commercial real estate		-			1,347
Farmland		225			-
Other loans:
Agricultural		563			-
Restructured loans:
Other loans:
Home equity		22			22
Total nonperforming loans		5,316			3,767
Real estate owned and other repossed property, net		354			107
Total nonperforming assets	$	5,670		$	3,874
Total nonperforming loans to total loans		0.73	%		0.61	%
Total nonperforming loans to total assets		0.54	%		0.44	%
Total allowance for loan loss to nonperforming loans		133.56	%		175.21	%
Total nonperforming assets to total assets		0.58	%		0.45	%

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Financial Condition – continued

Deposits and Other Sources of Funds

The following table includes deposit accounts by category:

	March 31,					December 31,
	2019					2018
			Percent					Percent
	Amount		of Total			Amount		of Total
	(Dollars in Thousands)
Noninterest checking	$	180,070		24.30	%	$	142,788		22.79	%
Interest bearing checking		111,437		15.04	%		105,115		16.78	%
Savings		124,992		16.87	%		108,234		17.27	%
Money market		122,110		16.48	%		108,050		17.24	%
Total		538,609		72.68	%		464,187		74.08	%
Certificates of deposit accounts:
IRA certificates		29,972		4.04	%		28,198		4.50	%
Brokered certificates		7,306		0.99	%		-		0.00	%
Other certificates		165,158		22.29	%		134,226		21.42	%
Total certificates of deposit		202,436		27.32	%		162,424		25.92	%
Total deposits	$	741,045		100.00	%	$	626,611		100.00	%

Deposits increased by $114.44 million, or 18.3%, to $741.05 million at March 31, 2019 from $626.61 million at December 31, 2018. The increase was largely due to increased deposits as a result of the BMB acquisition. Excluding acquired deposits, total deposits increased by $21.73 million. Including acquired deposits, certificates of deposit increased by $40.01 million, noninterest checking increased by $37.29 million, savings increased by $16.76 million, money market increased by $14.06 million and interest bearing checking increased by $6.32 million.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Financial Condition – continued

The following table summarizes borrowing activity:

	March 31,					December 31,
	2019					2018
	Net		Percent			Net		Percent
	Amount		of Total			Amount		of Total
	(Dollars in Thousands)
FHLB advances and other borrowings	$	92,313		78.76	%	$	102,222		80.43	%
Other long-term debt:
Senior notes fixed at 5.75%, due 2022		9,875		8.43	%		9,864		7.76	%
Subordinated debentures fixed at 6.75%, due 2025		9,862		8.41	%		9,857		7.76	%
Subordinated debentures variable, due 2035		5,155		4.40	%		5,155		4.05	%
Total other long-term debt		24,892		21.24	%		24,876		19.57	%
Total borrowings		117,205		100.00	%		127,098		100.00	%

FHLB advances and other borrowings decreased by $9.91 million, or 9.7%, to $92.31 million at March 31, 2019 from $102.22 million at December 31, 2018. The decreased borrowings are due in part to acquired deposits exceeding acquired loans.

Shareholders’ Equity

Total shareholders’ equity increased $17.48 million, or 18.4%, to $112.29 million at March 31, 2019 from $94.81 million at December 31, 2018. This was primarily the result of stock issued in connection with the BMB acquisition of $16.44 million. The increase was also due to net income of $1.18 million and other comprehensive income of $1.13 million. These increases were slightly offset by treasury stock purchased for $732,000 and dividends paid of $597,000.

Analysis of Net Interest Income

The Bank’s earnings have historically depended primarily upon net interest income, which is the difference between interest income earned on loans and investments and interest paid on deposits and any borrowed funds. It is the single largest component of Eagle’s operating income. Net interest income is affected by (i) the difference between rates of interest earned on loans and investments and rates paid on interest bearing deposits and borrowings (the “interest rate spread”) and (ii) the relative amounts of loans and investments and interest bearing deposits and borrowings.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Analysis of Net Interest Income – continued

The following table includes average balances for balance sheet items, as well as, interest and dividends and average yields related to the average balances. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances, but have been reflected in the table as loans carrying a zero yield. The yields include the effect of deferred fees and discounts and premiums that are amortized or accreted to interest income or expense.

	For the Three Months Ended March 31,
			2019							2018
	Average		Interest					Average		Interest
	Daily		and		Yield/			Daily		and		Yield/
	Balance		Dividends		Cost(4)			Balance		Dividends		Cost(4)
	(Dollars in Thousands)
Assets:
Interest earning assets:
Investment securities	$	140,801	$	958		2.76	%	$	151,316	$	989		2.65	%
FHLB and FRB stock		7,122		95		5.41	%		6,006		79		5.33	%
Loans receivable, net(1)		726,657		10,048		5.61	%		573,015		6,872		4.86	%
Other earning assets		4,092		20		1.98	%		5,665		17		1.22	%
Total interest earning assets		878,672		11,121		5.13	%		736,002		7,957		4.38	%
Noninterest earning assets		88,156							80,686
Total assets	$	966,828						$	816,688
Liabilities and equity:
Interest bearing liabilities:
Deposit accounts:
Checking	$	117,568	$	11		0.04	%	$	108,836	$	9		0.03	%
Savings		118,550		16		0.05	%		101,183		14		0.06	%
Money market		121,860		95		0.32	%		106,763		48		0.18	%
Certificates of deposit		195,667		665		1.38	%		162,237		355		0.89	%
Advances from FHLB and other borrowings including long-term debt		125,506		959		3.10	%		108,885		684		2.55	%
Total interest bearing liabilities		679,151		1,746		1.04	%		587,904		1,110		0.77	%
Noninterest checking		171,175							126,553
Other noninterest bearing liabilities		8,380							13,554
Total liabilities		858,706							728,011
Total equity		108,122							88,677
Total liabilities and equity	$	966,828						$	816,688
Net interest income/interest rate spread(2)			$	9,375		4.09	%			$	6,847		3.61	%
Net interest margin(3)						4.33	%						3.77	%
Total interest earning assets to interest bearing liabilities						129.38	%						125.19	%

⁽¹⁾ Includes loans held-for-sale.

⁽²⁾ Interest rate spread represents the difference between the average yield on interest earning assets and the average rate
on interest bearing liabilities.

⁽³⁾ Net interest margin represents income before the provision for loan losses divided by average interest earning assets.

⁽⁴⁾ For purposes of this table, tax exempt income is not calculated on a tax equivalent basis.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Rate/Volume Analysis

The following table presents the dollar amount of changes in interest income and interest expense for major components of interest earning assets and interest bearing liabilities. For each category of interest earning assets and interest bearing liabilities, information is provided on changes attributable to: (1) changes in volume multiplied by the old rate; (2) changes in rate, which are changes in rate multiplied by the old volume; and (3) changes not solely attributable to rate or volume, which have been allocated proportionately to the change due to volume and the change due to rate.

	For the Three Months Ended March 31,
	2019								2018
				Due to								Due to
	Volume			Rate		Net			Volume			Rate			Net
	(In Thousands)
Interest earning assets:
Investment securities	$	(69	)	$	38	$	(31	)	$	132		$	128		$	260
FHLB, FRB and Farmer Mac stock		15			1		16			19			20			39
Loans receivable, net		1,843			1,333		3,176			1,157			145			1,302
Other earning assets		(5	)		8		3			19			(3	)		16
Total interest earning assets		1,784			1,380		3,164			1,327			290			1,617
Interest bearing liabilities:
Checking, savings and money market accounts		12			39		51			7			23			30
Certificates of deposit		73			237		310			(4	)		20			16
Advances from FHLB and other borrowings including long-term debt		105			170		275			144			63			207
Total interest bearing liabilities		190			446		636			147			106			253
Change in net interest income	$	1,594		$	934	$	2,528		$	1,180		$	184		$	1,364

Results of Operations for the Three Months Ended March 31, 2019 and March 31, 2018

Net Income. Eagle’s net income for the three months ended March 31, 2019 was $1.18 million compared to $573,000 for the three months ended March 31, 2018. This increase of $610,000 was due to an increase in net interest income after loan loss provision of $2.42 million and an increase in noninterest income of $1.26 million. These increases were partially offset by an increase in noninterest expense of $2.95 million and an increase in income tax expense of $134,000. Basic and diluted earnings per share were both $0.18 for the current period. Basic and diluted earnings per share were both $0.11 per share for the prior year comparable period.

Net Interest Income. Net interest income increased to $9.38 million for the three months ended March 31, 2019, compared to $6.85 million for the same quarter in the prior year. This increase of $2.53 million, or 36.9%, was primarily the result of an increase in interest and dividend income of $3.16 million, slightly offset by an increase in interest expense of $636,000.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations for the Three Months Ended March 31, 2019 and March 31, 2018 – continued

Interest and Dividend Income. Interest and dividend income was $11.12 million for the three months ended March 31, 2019, compared to $7.96 million for the three months ended March 31, 2018, an increase of $3.16 million, or 39.7%. Interest and fees on loans increased to $10.05 million for the three months ended March 31, 2019 from $6.87 million for the three months ended March 31, 2018. This increase of $3.18 million, or 46.3%, was due to an increase in the average balance of loans, as well as an increase in the average yield of loans for the three months ended March 31, 2019. Average balances for loans receivable, net, including loans held-for-sale, for the three months ended March 31, 2019 were $726.66 million, compared to $573.02 million for the prior year period. This represents an increase of $153.64 million, or 26.8% and was largely impacted by the BMB acquisition and a full quarter impact of the TwinCo acquisition. The average interest rate earned on loans receivable increased by 75 basis points, from 4.86% for the three months ended March 31, 2018, to 5.61% for the three months ended March 31, 2019. Interest and dividends on investment securities available-for-sale decreased slightly by $31,000 or 3.1% for the three months ended March 31, 2019. Average balances for investments decreased to $140.80 million for the three months ended March 31, 2019, from $151.32 million for the three months ended March 31, 2018. However, average interest rates earned on investments increased slightly from 2.65% for the three months ended March 31, 2018, to 2.76% for the three months ended March 31, 2019.

Interest Expense. Total interest expense for the three months ended March 31, 2019 was $1.75 million compared to $1.11 million for the three months ended March 31, 2018. The increase of $636,000, or 57.3%, was due to an increase in interest expense on deposits, as well as an increase in interest expense on advances from FHLB and other borrowings including long-term debt. The average balance for total deposits was $724.82 million for the three months ended March 31, 2019 compared to $605.57 million for the three months ended March 31, 2018. This increase was due in part to the BMB acquisition and a full quarter impact of the TwinCo acquisition. The overall average rate on total deposits was 0.44% for the three months ended March 31, 2019 compared to 0.29% for the three months ended March 31, 2018. The average borrowing balance for advances from FHLB and other borrowings including long-term debt increased from $108.89 million for the three months ended March 31, 2018 to $125.51 million for the three months ended March 31, 2019. In addition, the average rate paid increased from 2.55% for the three months ended March 31, 2018, to 3.10% for the three months ended March 31, 2019.

Loan Loss Provision. Loan loss provisions are charged to earnings to maintain the total allowance for loan losses at a level considered adequate by management of the Bank, to provide for probable loan losses based on prior loss experience, volume and type of lending conducted by the Bank and past due loans in the portfolio. The Bank’s policies require a review of assets on a quarterly basis. The Bank classifies loans as well as other assets if warranted. While management believes it uses the best information available to make a determination with respect to the allowance for loan losses, it recognizes that future adjustments may be necessary. The Bank recorded $604,000 in loan loss provisions for the three months ended March 31, 2019 and $502,000 for the three months ended March 31, 2018. Management believes the level of total allowances is adequate. Total nonperforming loans, including restructured loans, net, was $5.32 million at March 31, 2019 compared to $3.77 million at December 31, 2018. The Bank has $354,000 in other real estate owned and other repossessed assets at March 31, 2019 compared to $107,000 at December 31, 2018.

Noninterest Income. Total noninterest income was $3.94 million for the three months ended March 31, 2019 compared to $2.68 million for the three months ended March 31, 2018. The increase of $1.26 million, or 47.0%, is largely due to an increase in net gain on sale of loans of $1.16 million. During the three months ended March 31, 2019, $72.32 million of mortgage loans were sold compared to $47.01 million for the three months ended March 31, 2018.

Noninterest Expense. Noninterest expense was $11.27 million for the three months ended March 31, 2019 compared to $8.32 million for the three months ended March 31, 2018. The increase of $2.95 million, or 35.5%, is largely due to an increase in salaries and employee benefits expenses of $1.08 million. The increase in salaries expense is due in part to higher commission-based compensation related to the continued loan growth in both commercial and mortgage lending activities as well as the TwinCo and BMB acquisitions. In addition, acquisition costs increased $937,000 due to the BMB acquisition.

Income Tax Expense. Income tax expense was $261,000 for the three months ended March 31, 2019, compared to $127,000 for the three months ended March 31, 2018. The effective tax rate for both periods was 18.1%.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Liquidity and Capital Resources

Liquidity

The Bank is required to maintain minimum levels of liquid assets as defined by the Montana Division of Banking and Federal Reserve Bank (“FRB”) regulations. The liquidity requirement is retained for safety and soundness purposes, and appropriate levels of liquidity will depend upon the types of activities in which the company engages. For internal reporting purposes, the Bank uses policy minimums of 1.0%, and 8.0% for “basic surplus” and “basic surplus with FHLB” as internally defined. In general, the “basic surplus” is a calculation of the ratio of unencumbered short-term assets reduced by estimated percentages of CD maturities and other deposits that may leave the Bank in the next 90 days divided by total assets. “Basic surplus with FHLB” adds to “basic surplus” the additional borrowing capacity the Bank has with the FHLB of Des Moines. The Bank exceeded those minimum ratios as of both March 31, 2019 and December 31, 2018.

The Bank’s primary sources of funds are deposits, repayment of loans and mortgage-backed and collateralized mortgage obligation securities, maturities of investments, funds provided from operations, and advances from the FHLB of Des Moines and other borrowings. Scheduled repayments of loans and mortgage-backed and collateralized mortgage obligation securities and maturities of investment securities are generally predictable. However, other sources of funds, such as deposit flows and loan prepayments, can be greatly influenced by the general level of interest rates, economic conditions and competition. The Bank uses liquidity resources principally to fund existing and future loan commitments. It also uses them to fund maturing certificates of deposit, demand deposit withdrawals and to invest in other loans and investments, maintain liquidity and meet operating expenses.

Liquidity may be adversely affected by unexpected deposit outflows, higher interest rates paid by competitors and similar matters. Management monitors projected liquidity needs and determines the level desirable, based in part on commitments to make loans and management’s assessment of the Bank’s ability to generate funds.

Capital Resources

As of March 31, 2019, the Bank’s internally determined measurement of sensitivity to interest rate movements as measured by a 200 basis point rise in interest rates scenario, increased the economic value of equity (“EVE”) by 6.5% compared to an increase of 2.3% as of December 31, 2018. The Bank is within the guidelines set forth by the Board of Directors for interest rate risk sensitivity in rising interest rate scenarios.

Beginning January 1, 2015, community banking organizations became subject to a new regulatory rule recently adopted by federal banking agencies (commonly referred to as Basel III). The new rule establishes a new regulatory capital framework that incorporates revisions to the Basel capital framework, strengthens the definition of regulatory capital, increases risk-based capital requirements, and amends the methodologies for determining risk-weighted assets. These changes are expected to increase the amount of capital required by community banking organizations. Basel III includes a multiyear transition period from January 1, 2015 through December 31, 2019.

The Bank’s Tier 1 leverage ratio, as measured under State of Montana and FRB rules, increased from 11.222% as of December 31, 2018 to 11.272% as of March 31, 2019. The Bank’s capital position helps to mitigate its interest rate risk exposure.

As of March 31, 2019, the Bank’s regulatory capital was in excess of all applicable regulatory requirements and the Bank is deemed “well capitalized” pursuant to State of Montana and FRB rules. At March 31, 2019, the Bank’s total capital, Tier 1 capital, common equity Tier 1 capital and Tier 1 leverage ratios were 15.320%, 14.352%, 14.352% and 11.272%, respectively, compared to regulatory requirements of 10.500%, 8.500%, 7.000% and 4.000%, respectively. All of these ratios with the exception of the Tier 1 leverage ratio include the capital conservation buffer of 2.500% phased-in beginning January 1, 2019.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Liquidity and Capital Resources – continued

Capital Resources – continued

	March 31, 2019
	(Unaudited)
	Dollar		% of
	Amount		Assets
	(Dollars in Thousands)
Total risk-based capital to risk weighted assets:
Actual capital level	$	112,400		15.320	%
Minimum required for capital adequacy Basel III phase-in schedule		77,037		10.500
Excess capital	$	35,363		4.820	%
Tier I capital to risk weighted assets:
Actual capital level	$	105,300		14.352	%
Minimum required for capital adequacy Basel III phase-in schedule		62,363		8.500
Excess capital	$	42,937		5.852	%
Common equity tier I capital to risk weighted assets:
Actual capital level	$	105,300		14.352	%
Minimum required for capital adequacy Basel III phase-in schedule		51,358		7.000
Excess capital	$	53,942		7.352	%
Tier I capital to adjusted total average assets:
Actual capital level	$	105,300		11.272	%
Minimum required for capital adequacy Basel III phase-in schedule		37,366		4.000
Excess capital	$	67,934		7.272	%

Interest Rate Risk

Interest rate risk is the potential for loss of future earnings resulting from adverse changes in the level of interest rates. Interest rate risk results from several factors and could have a significant impact on the Company’s net interest income, which is the Company primary source of net income. Net interest income is affected by changes in interest rates, the relationship between rates on interest bearing assets and liabilities, the impact of interest fluctuations on asset prepayments and the mix of interest bearing assets and liabilities.

Although interest rate risk is inherent in the banking industry, banks are expected to have sound risk management practices in place to measure, monitor and control interest rate exposures. The objective of interest rate risk management is to contain the risks associated with interest rate fluctuations. The process involves identification and management of the sensitivity of net interest income to changing interest rates.

The ongoing monitoring and management of this risk is an important component of the Company’s asset/liability committee, which is governed by policies established by the Company’s Board that are reviewed and approved annually. The Board delegates responsibility for carrying out the asset/liability management policies to the Bank’s asset/liability committee. In this capacity, the asset/liability committee develops guidelines and strategies impacting the Company’s asset/liability management related activities based upon estimated market risk sensitivity, policy limits and overall market interest rate levels and trends. The Company’s goal of its asset and liability management practices is to maintain or increase the level of net interest income within an acceptable level of interest rate risk. Our asset and liability policy and strategies are expected to continue as described so long as competitive and regulatory conditions in the financial institution industry and market interest rates continue as they have in recent years.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Interest Rate Risk – continued

The Bank has established acceptable levels of interest rate risk for an instantaneous and permanent shock in rates as follows: Projected net interest income over the next twelve months (i.e. year-1) will not be reduced by more than 15.0% given an immediate change in interest rates of up to 200 basis points (+ or -). Furthermore, projected net interest income over the subsequent twelve months (i.e. year-2) will not be reduced by more than 15.0%.

The following table includes the Bank’s net interest income sensitivity analysis.

Changes in Market	Rate Sensitivity
Interest Rates	As of March 31, 2019				Policy
(Basis Points)	Year 1		Year 2		Limits
+200		0.80%		1.19%		-15.00%
-200		-2.27%		-7.01%		-15.00%

Impact of Inflation and Changing Prices

Our financial statements and the accompanying notes have been prepared in accordance with generally accepted accounting principles, which require the measurement of financial position and operating results in terms of historical dollars without considering the change in the relative purchasing power of money over time and due to inflation. The impact of inflation is reflected in the increased cost of our operations. Interest rates have a greater impact on our performance than do the general levels of inflation. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Item 3. Quantitative and Qualitative Disclosures About Market Risk

This item has been omitted based on Eagle’s status as a smaller reporting company.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONTROLS AND PROCEDURES

Item 4. Controls and Procedures

As of the end of the period covered by this report, we conducted an evaluation under the supervision and with the participation of our management including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”) of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to management to allow timely decisions regarding required disclosure. Based on that evaluation, our CEO and CFO concluded that as of March 31, 2019, our disclosure controls and procedures were effective. During the last quarter, there were no changes in the Company’s internal control over financial reporting that have materially affected, or were reasonably likely to materially affect, the Company’s internal control over financial reporting.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

Part II - OTHER INFORMATION

Item 1. Legal Proceedings.

Neither the Company nor the Bank is involved in any pending legal proceeding other than non-material legal proceedings occurring in the ordinary course of business.

Item 1A. Risk Factors.

There have not been any material changes in the risk factors previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2018.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

On July 20, 2017, the Board authorized the repurchase of up to 100,000 shares of its common stock. Under the plan, shares could be purchased by the Company on the open market or in privately negotiated transactions. No shares were purchased under this plan. The plan expired on July 20, 2018.

On July 19, 2018, the Board authorized the repurchase of up to 100,000 shares of its common stock. 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. No shares were purchased under this plan during the year ended December 31, 2018. The plan expires on July 19, 2019.

The following table summarizes the Company’s purchase of its common stock for the three months ended March 31, 2019.

	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
January 1, 2019 through January 31, 2019		13,500	$	16.86		13,500		86,500
February 1, 2019 through February 28, 2019		22,500	$	17.87		22,500		64,000
March 1, 2019 through March 31, 2019		6,000	$	17.05		6,000		58,000
Total		42,000	$	17.43		42,000

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

Part II - OTHER INFORMATION (CONTINUED)

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibit Number	Description
3.1	Amended and Restated Certificate of Incorporation of Eagle Bancorp Montana, Inc. (incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K filed on February 23, 2010).
3.2	Certificate of Amendment to the Amended and Restated Certificate of Incorporation.
3.3	Bylaws of Eagle Bancorp Montana, Inc., amended as of August 20, 2015 (incorporated by reference to 3.1 of our Current Report on Form 8-K filed on August 25, 2015).
10.1	Salary Continuation Agreement between Opportunity Bank of Montana and Laura Clark (filed herewith).
10.2	Salary Continuation Agreement between Opportunity Bank of Montana and Dale Field (filed herewith).
10.3	Salary Continuation Agreement between Opportunity Bank of Montana and Chantelle Nash (filed herewith).
31.1	Certification by Peter J. Johnson, Chief Executive Officer, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 (a) of the Sarbanes-Oxley Act of 2002.
31.2	Certification by Laura F. Clark, Chief Financial Officer, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 (a) of the Sarbanes-Oxley Act of 2002.
32.1	Certification by Peter J. Johnson, Chief Executive Officer, and Laura F. Clark, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

SIGNATURES

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 thereunto duly authorized.

	EAGLE BANCORP MONTANA, INC.
Date: May 9, 2019	By:	/s/ Peter J. Johnson
		Peter J. Johnson
		President/CEO
Date: May 9, 2019	By:	/s/ Laura F. Clark
		Laura F. Clark
		Executive Vice President/CFO

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EX-3.2

Exhibit 3.2

EX-10.1

Exhibit 10.1

Salary continuation Agreement

This Salary Continuation Agreement (the “Agreement”), by and between Opportunity Bank of Montana, Located in Helena Montana (the “Employer”), and Laura Clark (the “Executive”), effective as of the 1st day of November, 2014, formalizes the agreements and understanding between the Employer and the Executive.

WITNESSETH:

WHEREAS, the Executive is employed by the Employer;

WHEREAS, the Employer recognizes the valuable services the Executive has performed for the Employer and wishes to encourage the Executive’s continued employment and to provide the Executive with additional incentive to achieve corporate objectives;

WHEREAS, the Employer wishes to provide the terms and conditions upon which the Employer shall pay additional retirement benefits to the Executive;

WHEREAS, the Employer and the Executive intend this Agreement shall at all times be administered and interpreted in compliance with Code Section 409A; and

WHEREAS, the Employer intends this Agreement shall at all times be administered and interpreted in such a manner as to constitute an unfunded nonqualified deferred compensation arrangement, maintained primarily to provide supplemental retirement benefits for the Executive, a member of select group of management or highly compensated employee of the Employer.

NOW THEREFORE, in consideration of the premises and of the mutual promises herein contained, the Employer and the Executive agree as follows:

ARTICLE 1

DEFINITIONS

For the purpose of this Agreement, the following phrases or terms shall have the indicated meanings:

1.1     “Accrued Benefit” means the dollar value of the liability that should be accrued by the Employer, under Generally Accepted Accounting Principles, for the Employer’s obligation to the Executive under this Agreement, calculated by applying Accounting Standards Codification 710-10 and the Discount Rate.

1.2     “Administrator” means the Board or its designee.

1.3     “Affiliate” means any business entity with whom the Employer would be considered a single employer under Section 414(b) and 414(c) of the Code. Such term shall be interpreted in a manner consistent with the definition of “service recipient” contained in Code Section 409A.

1.4     “Beneficiary” means the person or persons designated in writing by the Executive to receive benefits hereunder in the event of the Executive’s death.

1.5     “Board” means the Board of Directors of the Employer.

1.6     “Cause” means any of the following acts or circumstances: gross negligence or gross neglect of duties to the Employer; conviction of a felony or of a gross misdemeanor involving moral turpitude in connection with the Executive’s employment with the Employer; or fraud, disloyalty, dishonesty or willful violation of any law or significant Employer policy committed in connection with the Executive's employment and resulting in a material adverse effect on the Employer.

1.7     “Change in Control” means a change in the ownership or effective control of the Employer, or in the ownership of a substantial portion of the assets of the Employer, as such change is defined in Code Section 409A and regulations thereunder.

1.8     “Claimant” means a person who believes that he or she is being denied a benefit to which he or she is entitled hereunder.

1.9     “Code” means the Internal Revenue Code of 1986, as amended.

1.10     “Disability” means a condition of the Executive whereby the Executive either: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Employer. The Administrator will determine whether the Executive has incurred a Disability based on its own good faith determination and may require the Executive to submit to reasonable physical and mental examinations for this purpose. The Executive will also be deemed to have incurred a Disability if determined to be totally disabled by the Social Security Administration or in accordance with a disability insurance program, provided that the definition of disability applied under such disability insurance program complies with the initial sentence of this Section.

1.11     “Discount Rate” means the rate used by the Administrator for determining the Accrued Benefit. The initial Discount Rate is five per cent (5%). The Administrator may adjust the Discount Rate to maintain the rate within reasonable standards according to Generally Accepted Accounting Principles and applicable bank regulatory guidance.

1.12     “Early Retirement” means Separation from Service after Early Retirement Age and before Normal Retirement Age.

1.13     “Early Retirement Age” means the date the Executive attains age sixty (60) and completes twenty (20) Years of Service.

2

1.14     “Early Involuntary Termination” means a Separation from Service (other than a termination for Cause) prior to Early Retirement Age due to the independent exercise of the unilateral authority of the Employer to terminate the Executive’s employment, other than due to the Executive’s implicit or explicit request, where the Executive was willing and able to continue performing services.

1.15     “Effective Date” means November 1, 2014.

1.16     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

1.17     “Normal Retirement Age” means the date the Executive attains age sixty-five (65) and completes twenty (20) Years of Service.

1.18     “Plan Year” means each twelve (12) month period commencing on November 1 and ending on October 31 of each year. The initial Plan Year shall commence on the Effective Date and end on the following October 31.

1.19     “Schedule A” means the schedule attached hereto and made a part hereof. Schedule A shall be updated upon a change to any of the benefits described in Article 2 hereof.

1.20     “Separation from Service” means a termination of the Executive’s employment with the Employer and its Affiliates for reasons other than death or Disability. A Separation from Service may occur as of a specified date for purposes of the Agreement even if the Executive continues to provide some services for the Employer or its Affiliates after that date, provided that the facts and circumstances indicate that the Employer and the Executive reasonably anticipated at that date that either no further services would be performed after that date, or that the level of bona fide services the Executive would perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed over the immediately preceding thirty-six (36) month period (or the full period during which the Executive performed services for the Employer, if that is less than thirty-six (36) months). A Separation from Service will not be deemed to have occurred while the Executive is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six (6) months or, if longer, the period for which a statute or contract provides the Executive with the right to reemployment with the Employer. If the Executive’s leave exceeds six (6) months but the Executive is not entitled to reemployment under a statute or contract, the Executive incurs a Separation of Service on the next day following the expiration of such six (6) month period. In determining whether a Separation of Service occurs the Administrator shall take into account, among other things, the definition of “service recipient” and “employer” set forth in Treasury regulation §1.409A-1(h)(3). The Administrator shall have full and final authority, to determine conclusively whether a Separation from Service occurs, and the date of such Separation from Service.

3

1.21     “Specified Employee” means an individual that satisfies the definition of a “key employee” of the Employer as such term is defined in Code §416(i) (without regard to Code §416(i)(5)), provided that the stock of the Employer is publicly traded on an established securities market or otherwise, as defined in Code §1.897-1(m). If the Executive is a key employee at any time during the twelve (12) months ending on December 31, the Executive is a Specified Employee for the twelve (12) month period commencing on the first day of the following April.

1.22     “Year of Service” means the twelve (12) month period beginning on the Executive’s date of hire and any twelve (12) month anniversary thereof during the entirety of which the Executive is an employee of the Employer. Service with a subsidiary or other entity controlled by the Employer before the time such entity became a subsidiary shall not be considered “credited service.”

ARTICLE 2

PAYMENT OF BENEFITS

2.1     Normal Retirement Benefit. Upon Separation from Service after Normal Retirement Age, the Employer shall pay the Executive an annual benefit in the amount of Nine Thousand Five Hundred Dollars ($9,500) in lieu of any other benefit hereunder. The annual benefit will be paid in equal monthly installments commencing the month following Separation from Service and continuing until the Executive’s death.

2.2     Early Retirement Benefit. If Early Retirement occurs, the Employer shall pay the Executive the annual benefit shown on Schedule A for the Plan Year ending immediately prior to Separation from Service in lieu of any other benefit hereunder. The annual benefit will be paid in equal monthly installments commencing the month following Separation from Service and continuing until the Executive’s death.

2.3     Early Involuntary Termination Benefit. If Early Involuntary Termination occurs, the Employer shall pay the Executive the amount shown on Schedule A for the Plan Year ending immediately prior to Separation from Service in lieu of any other benefit hereunder. The annual benefit will be paid in equal monthly installments commencing the month following Separation from Service and continuing until the Executive’s death.

2.4     Disability Benefit. In the event the Executive suffers a Disability prior to Early Retirement Age the Employer shall pay the Executive the annual benefit shown on Schedule A for the Plan Year ending immediately prior to Disability in lieu of any other benefit hereunder. The annual benefit will be paid in equal monthly installments commencing the month following Disability and continuing until the Executive’s death.

2.5     Death Prior to Commencement of Benefit Payments. In the event the Executive dies prior to Separation from Service, the Employer shall pay the Beneficiary an annual benefit in the amount of Nine Thousand Five Hundred Dollars ($9,500) in lieu of any other benefit hereunder. The annual benefit will be paid in equal monthly installments commencing the month following the Executive’s death and continuing for fifteen (15) years.

4

2.6     Death Subsequent to Commencement of Benefit Payments. If the Executive dies after benefit distributions have begun and the Executive has received less than one hundred eighty (180) monthly benefit installments, the Beneficiary shall continue to receive the same amounts the Executive would have received at the same times the Executive would have received them until the sum of the number of installments to the Beneficiary and the Executive totals one hundred eighty (180).

2.7     Termination for Cause. If the Employer terminates the Executive’s employment for Cause, then the Executive shall not be entitled to any benefits under the terms of this Agreement.

2.8     Restriction on Commencement of Distributions.  Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a Specified Employee at the time of Separation from Service, the provisions of this Section shall govern all distributions hereunder. Distributions which would otherwise be made to the Executive due to Separation from Service shall not be made during the first six (6) months following Separation from Service. Rather, any distribution which would otherwise be paid to the Executive during such period shall be accumulated and paid to the Executive in a lump sum on the first day of the seventh month following Separation from Service, or if earlier, upon the Executive’s death. All subsequent distributions shall be paid as they would have had this Section not applied.

2.9     Acceleration of Payments. Except as specifically permitted herein, no acceleration of the time or schedule of any payment may be made hereunder. Notwithstanding the foregoing, payments may be accelerated, in accordance with the provisions of Treasury Regulation §1.409A-3(j)(4) in the following circumstances: (i) as a result of certain domestic relations orders; (ii) in compliance with ethics agreements with the federal government; (iii) in compliance with the ethics laws or conflicts of interest laws; (iv) in limited cashouts (but not in excess of the limit under Code §402(g)(1)(B)); (v) to pay employment-related taxes; or (vi) to pay any taxes that may become due at any time that the Agreement fails to meet the requirements of Code Section 409A.

2.10     Delays in Payment by Employer. A payment may be delayed to a date after the designated payment date under any of the circumstances described below, and the provision will not fail to meet the requirements of establishing a permissible payment event. The delay in the payment will not constitute a subsequent deferral election, so long as the Employer treats all payments to similarly situated Participants on a reasonably consistent basis.

(a)     Payments subject to Code Section 162(m). If the Employer reasonably anticipates that the Employer’s deduction with respect to any distribution under this Agreement would be limited or eliminated by application of Code Section 162(m), then to the extent deemed necessary by the Employer to ensure that the entire amount of any distribution from this Agreement is deductible, the Employer may delay payment of any amount that would otherwise be distributed under this Agreement. The delayed amounts shall be distributed to the Executive (or the Beneficiary in the event of the Executive’s death) at the earliest date the Employer reasonably anticipates that the deduction of the payment of the amount will not be limited or eliminated by application of Code Section 162(m).

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(b)     Payments that would violate Federal securities laws or other applicable law. A payment may be delayed where the Employer reasonably anticipates that the making of the payment will violate Federal securities laws or other applicable law provided that the payment is made at the earliest date at which the Employer reasonably anticipates that the making of the payment will not cause such violation. The making of a payment that would cause inclusion in gross income or the application of any penalty provision of the Internal Revenue Code is not treated as a violation of law.

(c)     Solvency. Notwithstanding the above, a payment may be delayed where the payment would jeopardize the ability of the Employer to continue as a going concern.

2.11     Treatment of Payment as Made on Designated Payment Date. Solely for purposes of determining compliance with Code Section 409A, any payment under this Agreement made after the required payment date shall be deemed made on the required payment date provided that such payment is made by the latest of: (i) the end of the calendar year in which the payment is due; (ii) the 15^th day of the third calendar month following the payment due date; (iii) if Employer cannot calculate the payment amount on account of administrative impracticality which is beyond the Executive’s control, the end of the first calendar year which payment calculation is practicable; and (iv) if Employer does not have sufficient funds to make the payment without jeopardizing the Employer’s solvency, in the first calendar year in which the Employer’s funds are sufficient to make the payment.

2.12     Facility of Payment. If a distribution is to be made to a minor, or to a person who is otherwise incompetent, then the Administrator may make such distribution: (i) to the legal guardian, or if none, to a parent of a minor payee with whom the payee maintains his or her residence; or (ii) to the conservator or administrator or, if none, to the person having custody of an incompetent payee. Any such distribution shall fully discharge the Employer and the Administrator from further liability on account thereof.

2.13     Excise Tax Limitation. Notwithstanding any provision of this Agreement to the contrary, if any benefit payment hereunder would be treated as an “excess parachute payment” under Code Section 280G, the Employer shall reduce such benefit payment to the extent necessary to avoid treating such benefit payment as an excess parachute payment. The Executive shall be entitled to only the reduced benefit and shall forfeit any amount over and above the reduced amount.

2.14     Changes in Form of Timing of Benefit Payments. The Employer and the Executive may, subject to the terms hereof, amend this Agreement to delay the timing or change the form of payments. Any such amendment:

(a)     must take effect not less than twelve (12) months after the amendment is made;

(b)     must, for benefits distributable due solely to the arrival of a specified date, or on account of Separation from Service or Change in Control, delay the commencement of distributions for a minimum of five (5) years from the date the first distribution was originally scheduled to be made;

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(c)     must, for benefits distributable due solely to the arrival of a specified date, be made not less than twelve (12) months before distribution is scheduled to begin; and

(d)     may not accelerate the time or schedule of any distribution.

ARTICLE 3

BENEFICIARIES

3.1     Designation of Beneficiaries. The Executive may designate any person to receive any benefits payable under the Agreement upon the Executive’s death, and the designation may be changed from time to time by the Executive by filing a new designation. Each designation will revoke all prior designations by the Executive, shall be in the form prescribed by the Administrator, and shall be effective only when filed in writing with the Administrator during the Executive’s lifetime. If the Executive names someone other than the Executive’s spouse as a Beneficiary, the Administrator may, in its sole discretion, determine that spousal consent is required to be provided in a form designated by the Administrator, executed by the Executive’s spouse and returned to the Administrator. The Executive’s beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently dissolved.

3.2     Absence of Beneficiary Designation. In the absence of a valid Beneficiary designation, or if, at the time any benefit payment is due to a Beneficiary, there is no living Beneficiary validly named by the Executive, the Employer shall pay the benefit payment to the Executive’s spouse. If the spouse is not living then the Employer shall pay the benefit payment to the Executive’s living descendants per stirpes, and if there no living descendants, to the Executive’s estate. In determining the existence or identity of anyone entitled to a benefit payment, the Employer may rely conclusively upon information supplied by the Executive’s personal representative, executor, or administrator.

ARTICLE 4

ADMINISTRATION

4.1     Administrator Duties. The Administrator shall be responsible for the management, operation, and administration of the Agreement. When making a determination or calculation, the Administrator shall be entitled to rely on information furnished by the Employer, Executive or Beneficiary. No provision of this Agreement shall be construed as imposing on the Administrator any fiduciary duty under ERISA or other law, or any duty similar to any fiduciary duty under ERISA or other law.

4.2     Administrator Authority. The Administrator shall enforce this Agreement in accordance with its terms, shall be charged with the general administration of this Agreement, and shall have all powers necessary to accomplish its purposes.

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4.3     Binding Effect of Decision. The decision or action of the Administrator with respect to any question arising out of or in connection with the administration, interpretation or application of this Agreement and the rules and regulations promulgated hereunder shall be final, conclusive and binding upon all persons having any interest in this Agreement.

4.4     Compensation, Expenses and Indemnity. The Administrator shall serve without compensation for services rendered hereunder. The Administrator is authorized at the expense of the Employer to employ such legal counsel and/or recordkeeper as it may deem advisable to assist in the performance of its duties hereunder. Expense and fees in connection with the administration of this Agreement shall be paid by the Employer.

4.5     Employer Information. The Employer shall supply full and timely information to the Administrator on all matters relating to the Executive’s compensation, death, Disability or Separation from Service, and such other information as the Administrator reasonably requires.

4.6     Termination of Participation. If the Administrator determines in good faith that the Executive no longer qualifies as a member of a select group of management or highly compensated employees, as determined in accordance with ERISA, the Administrator shall have the right, in its sole discretion, to cease further benefit accruals hereunder.

4.7     Compliance with Code Section 409A. The Employer and the Executive intend that the Agreement comply with the provisions of Code Section 409A to prevent the inclusion in gross income of any amounts deferred hereunder in a taxable year prior to the year in which amounts are actually paid to the Executive or Beneficiary. This Agreement shall be construed, administered and governed in a manner that affects such intent, and the Administrator shall not take any action that would be inconsistent therewith.

ARTICLE 5

Claims and Review Procedures

5.1     Claims Procedure. A Claimant who has not received benefits under this Agreement that he or she believes should be distributed shall make a claim for such benefits as follows.

(a)     Initiation – Written Claim. The Claimant initiates a claim by submitting to the Administrator a written claim for the benefits. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within sixty (60) days after such notice was received by the Claimant. All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the Claimant.

(b)     Timing of Administrator Response. The Administrator shall respond to such Claimant within ninety (90) days after receiving the claim. If the Administrator determines that special circumstances require additional time for processing the claim, the Administrator can extend the response period by an additional ninety (90) days by notifying the Claimant in writing, prior to the end of the initial ninety (90) day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Administrator expects to render its decision.

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(c)     Notice of Decision. If the Administrator denies part or all of the claim, the Administrator shall notify the Claimant in writing of such denial. The Administrator shall write the notification in a manner calculated to be understood by the Claimant. The notification shall set forth: (i) the specific reasons for the denial; (ii) a reference to the specific provisions of this Agreement on which the denial is based; (iii) a description of any additional information or material necessary for the Claimant to perfect the claim and an explanation of why it is needed; (iv) an explanation of this Agreement’s review procedures and the time limits applicable to such procedures; and (v) a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.

5.2     Review Procedure. If the Administrator denies part or all of the claim, the Claimant shall have the opportunity for a full and fair review by the Administrator of the denial as follows.

(a)     Initiation – Written Request. To initiate the review, the Claimant, within sixty (60) days after receiving the Administrator’s notice of denial, must file with the Administrator a written request for review.

(b)     Additional Submissions – Information Access. The Claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim. The Administrator shall also provide the Claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the Claimant’s claim for benefits.

(c)     Considerations on Review. In considering the review, the Administrator shall take into account all materials and information the Claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

(d)     Timing of Administrator Response. The Administrator shall respond in writing to such Claimant within sixty (60) days after receiving the request for review. If the Administrator determines that special circumstances require additional time for processing the claim, the Administrator can extend the response period by an additional sixty (60) days by notifying the Claimant in writing, prior to the end of the initial sixty (60) day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Administrator expects to render its decision.

(e)     Notice of Decision. The Administrator shall notify the Claimant in writing of its decision on review. The Administrator shall write the notification in a manner calculated to be understood by the Claimant. The notification shall set forth: (a) the specific reasons for the denial; (b) a reference to the specific provisions of this Agreement on which the denial is based; (c) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the Claimant’s claim for benefits; and (d) a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a).

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ARTICLE 6

AMENDMENT AND TERMINATION

6.1     Agreement Amendment Generally. Except as provided in Section 6.2, this Agreement may be amended only by a written agreement signed by both the Employer and the Executive.

6.2     Amendment to Insure Proper Characterization of Agreement. Notwithstanding anything in this Agreement to the contrary, the Agreement may be amended by the Employer at any time, if found necessary in the opinion of the Employer, i) to ensure that the Agreement is characterized as plan of deferred compensation maintained for a select group of management or highly compensated employees as described under ERISA, ii) to conform the Agreement to the requirements of any applicable law or iii) to comply with the written instructions of the Employer’s auditors or banking regulators.

6.3     Agreement Termination Generally. The Employer may terminate this Agreement at any time by providing written notice of such termination to the Executive. The benefit upon such termination shall be the Accrued Benefit as of the date of termination. Except as provided in Section 6.4, such termination shall not cause a distribution of benefits under this Agreement. Rather, benefit distributions will be made at the earliest distribution event permitted under Article 2.

6.4     Effect of Complete Termination. Notwithstanding anything to the contrary in Section 6.3, and subject to the requirements of Code Section 409A and Treasury Regulations §1.409A-3(j)(4)(ix), at certain times the Employer may completely terminate and liquidate the Agreement. In the event of such a complete termination, the Employer shall pay the Accrued Benefit to the Executive. Such complete termination of the Agreement shall occur only under the following circumstances and conditions.

(a)     Corporate Dissolution or Bankruptcy. The Employer may terminate and liquidate this Agreement within twelve (12) months of a corporate dissolution taxed under Code Section 331, or with the approval of a bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A), provided that all benefits paid under the Agreement are included in the Executive’s gross income in the latest of: (i) the calendar year which the termination occurs; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the payment is administratively practicable.

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(b)     Change in Control. The Employer may terminate and liquidate this Agreement by taking irrevocable action to terminate and liquidate within the thirty (30) days preceding or the twelve (12) months following a Change in Control. This Agreement will then be treated as terminated only if all substantially similar arrangements sponsored by the Employer which are treated as deferred under a single plan under Treasury Regulations §1.409A-1(c)(2) are terminated and liquidated with respect to each participant who experienced the Change in Control so that the Executive and any participants in any such similar arrangements are required to receive all amounts of compensation deferred under the terminated arrangements within twelve (12) months of the date the Employer takes the irrevocable action to terminate the arrangements.

(c)     Discretionary Termination. The Employer may terminate and liquidate this Agreement provided that: (i) the termination does not occur proximate to a downturn in the financial health of the Employer; (ii) all arrangements sponsored by the Employer and Affiliates that would be aggregated with any terminated arrangements under Treasury Regulations §1.409A-1(c) are terminated; (iii) no payments, other than payments that would be payable under the terms of this Agreement if the termination had not occurred, are made within twelve (12) months of the date the Employer takes the irrevocable action to terminate this Agreement; (iv) all payments are made within twenty-four (24) months following the date the Employer takes the irrevocable action to terminate and liquidate this Agreement; and (v) neither the Employer nor any of its Affiliates adopt a new arrangement that would be aggregated with any terminated arrangement under Treasury Regulations §1.409A-1(c) if the Executive participated in both arrangements, at any time within three (3) years following the date the Employer takes the irrevocable action to terminate this Agreement.

ARTICLE 7

MISCELLANEOUS

7.1     No Effect on Other Rights. This Agreement constitutes the entire agreement between the Employer and the Executive as to the subject matter hereof. No rights are granted to the Executive by virtue of this Agreement other than those specifically set forth herein. Nothing contained herein will confer upon the Executive the right to be retained in the service of the Employer nor limit the right of the Employer to discharge or otherwise deal with the Executive without regard to the existence hereof.

7.2     State Law. To the extent not governed by ERISA, the provisions of this Agreement shall be construed and interpreted according to the internal law of the State of Montana without regard to its conflicts of laws principles.

7.3     Validity. In case any provision of this Agreement shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Agreement shall be construed and enforced as if such illegal or invalid provision had never been inserted herein.

7.4     Nonassignability. Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner.

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7.5     Unsecured General Creditor Status. Payment to the Executive or any Beneficiary hereunder shall be made from assets which shall continue, for all purposes, to be part of the general, unrestricted assets of the Employer and no person shall have any interest in any such asset by virtue of any provision of this Agreement. The Employer’s obligation hereunder shall be an unfunded and unsecured promise to pay money in the future. In the event that the Employer purchases an insurance policy insuring the life of the Executive to recover the cost of providing benefits hereunder, neither the Executive nor the Beneficiary shall have any rights whatsoever in said policy or the proceeds therefrom.

7.6     Life Insurance. If the Employer chooses to obtain insurance on the life of the Executive in connection with its obligations under this Agreement, the Executive hereby agrees to take such physical examinations and to truthfully and completely supply such information as may be required by the Employer or the insurance company designated by the Employer.

7.7     Unclaimed Benefits. The Executive shall keep the Employer informed of the Executive’s current address and the current address of the Beneficiary. If the location of the Executive is not made known to the Employer within three years after the date upon which any payment of any benefits may first be made, the Employer shall delay payment of the Executive’s benefit payment(s) until the location of the Executive is made known to the Employer; however, the Employer shall only be obligated to hold such benefit payment(s) for the Executive until the expiration of three (3) years. Upon expiration of the three (3) year period, the Employer may discharge its obligation by payment to the Beneficiary. If the location of the Beneficiary is not made known to the Employer by the end of an additional two (2) month period following expiration of the three (3) year period, the Employer may discharge its obligation by payment to the Executive’s estate. If there is no estate in existence at such time or if such fact cannot be determined by the Employer, the Executive and Beneficiary shall thereupon forfeit all rights to any benefits provided under this Agreement.

7.8     Suicide or Misstatement. No benefit shall be distributed hereunder if the Executive commits suicide within two (2) years after the Effective Date, or if an insurance company which issued a life insurance policy covering the Executive and owned by the Employer denies coverage (i) for material misstatements of fact made by the Executive on an application for life insurance, or (ii) for any other reason.

7.9     Removal. Notwithstanding anything in this Agreement to the contrary, the Employer shall not distribute any benefit under this Agreement if the Executive is subject to a final removal or prohibition order issued pursuant to Section 8(e) of the Federal Deposit Insurance Act. Furthermore, any payments made to the Executive pursuant to this Agreement shall, if required, comply with 12 U.S.C. 1828, FDIC Regulation 12 CFR Part 359 and any other regulations or guidance promulgated thereunder.

7.10     Notice. Any notice, consent or demand required or permitted to be given to the Employer or Administrator under this Agreement shall be sufficient if in writing and hand-delivered or sent by registered or certified mail to the Employer’s principal business office. Any notice or filing required or permitted to be given to the Executive or Beneficiary under this Agreement shall be sufficient if in writing and hand-delivered or sent by mail to the last known address of the Executive or Beneficiary, as appropriate. Any notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark or on the receipt for registration or certification.

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7.11     Headings and Interpretation. Headings and sub-headings in this Agreement are inserted for reference and convenience only and shall not be deemed part of this Agreement. Wherever the fulfillment of the intent and purpose of this Agreement requires and the context will permit, the use of the masculine gender includes the feminine and use of the singular includes the plural.

7.12     Alternative Action. In the event it becomes impossible for the Employer or the Administrator to perform any act required by this Agreement due to regulatory or other constraints, the Employer or Administrator may perform such alternative act as most nearly carries out the intent and purpose of this Agreement and is in the best interests of the Employer, provided that such alternative act does not violate Code Section 409A.

7.13     Coordination with Other Benefits. The benefits provided for the Executive or the Beneficiary under this Agreement are in addition to any other benefits available to the Executive under any other plan or program for employees of the Employer. This Agreement shall supplement and shall not supersede, modify, or amend any other such plan or program except as may otherwise be expressly provided herein.

7.14     Inurement. This Agreement shall be binding upon and shall inure to the benefit of the Employer, its successor and assigns, and the Executive, the Executive’s successors, heirs, executors, administrators, and the Beneficiary.

7.15     Tax Withholding. The Employer may make such provisions and take such action as it deems necessary or appropriate for the withholding of any taxes which the Employer is required by any law or regulation to withhold in connection with any benefits under the Agreement. The Executive shall be responsible for the payment of all individual tax liabilities relating to any benefits paid hereunder.

7.16     Aggregation of Agreement. If the Employer offers other deferred compensation plans, this Agreement and those plans shall be treated as a single plan to the extent required under Code Section 409A.

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IN WITNESS WHEREOF, the Executive and a representative of the Employer have executed this Agreement document as indicated below:

Executive:	Employer:
/s/ Laura Clark	By:	/s/ Peter J. Johnson
Laura Clark	Its:

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Salary continuation Agreement

Beneficiary Designation

I, Laura Clark, designate the following as Beneficiary under this Agreement:

Primary
	%
	%
Contingent
	%
	%

I understand that I may change this beneficiary designation by delivering a new written designation to the Administrator, which shall be effective only upon receipt by the Administrator prior to my death. I further understand that the designation will be automatically revoked if the Beneficiary predeceases me or if I have named my spouse as Beneficiary and our marriage is subsequently dissolved.

Signature:     _______________________________          Date:     _______

SPOUSAL CONSENT (Required only if Administrator requests and someone other than spouse is named Beneficiary)

I consent to the beneficiary designation above. I also acknowledge that if I am named Beneficiary and my marriage is subsequently dissolved, the beneficiary designation will be automatically revoked.

Spouse Name:     _______________________________

Signature:     _______________________________     Date:           

Received by the Administrator this ________ day of ___________________, 20__

By:

Title:

EX-10.2

Exhibit 10.2

Salary continuation Agreement

This Salary Continuation Agreement (the “Agreement”), by and between Opportunity Bank of Montana, Located in Helena Montana (the “Employer”), and Dale Field (the “Executive”), effective as of the 1st day of November, 2014, formalizes the agreements and understanding between the Employer and the Executive.

WITNESSETH:

WHEREAS, the Executive is employed by the Employer;

WHEREAS, the Employer recognizes the valuable services the Executive has performed for the Employer and wishes to encourage the Executive’s continued employment and to provide the Executive with additional incentive to achieve corporate objectives;

WHEREAS, the Employer wishes to provide the terms and conditions upon which the Employer shall pay additional retirement benefits to the Executive;

WHEREAS, the Employer and the Executive intend this Agreement shall at all times be administered and interpreted in compliance with Code Section 409A; and

WHEREAS, the Employer intends this Agreement shall at all times be administered and interpreted in such a manner as to constitute an unfunded nonqualified deferred compensation arrangement, maintained primarily to provide supplemental retirement benefits for the Executive, a member of select group of management or highly compensated employee of the Employer.

NOW THEREFORE, in consideration of the premises and of the mutual promises herein contained, the Employer and the Executive agree as follows:

ARTICLE 1

DEFINITIONS

For the purpose of this Agreement, the following phrases or terms shall have the indicated meanings:

1.1     “Accrued Benefit” means the dollar value of the liability that should be accrued by the Employer, under Generally Accepted Accounting Principles, for the Employer’s obligation to the Executive under this Agreement, calculated by applying Accounting Standards Codification 710-10 and the Discount Rate.

1.2     “Administrator” means the Board or its designee.

1.3     “Affiliate” means any business entity with whom the Employer would be considered a single employer under Section 414(b) and 414(c) of the Code. Such term shall be interpreted in a manner consistent with the definition of “service recipient” contained in Code Section 409A.

1.4     “Beneficiary” means the person or persons designated in writing by the Executive to receive benefits hereunder in the event of the Executive’s death.

1.5     “Board” means the Board of Directors of the Employer.

1.6     “Cause” means any of the following acts or circumstances: gross negligence or gross neglect of duties to the Employer; conviction of a felony or of a gross misdemeanor involving moral turpitude in connection with the Executive’s employment with the Employer; or fraud, disloyalty, dishonesty or willful violation of any law or significant Employer policy committed in connection with the Executive's employment and resulting in a material adverse effect on the Employer.

1.7     “Change in Control” means a change in the ownership or effective control of the Employer, or in the ownership of a substantial portion of the assets of the Employer, as such change is defined in Code Section 409A and regulations thereunder.

1.8     “Claimant” means a person who believes that he or she is being denied a benefit to which he or she is entitled hereunder.

1.9     “Code” means the Internal Revenue Code of 1986, as amended.

1.10     “Disability” means a condition of the Executive whereby the Executive either: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Employer. The Administrator will determine whether the Executive has incurred a Disability based on its own good faith determination and may require the Executive to submit to reasonable physical and mental examinations for this purpose. The Executive will also be deemed to have incurred a Disability if determined to be totally disabled by the Social Security Administration or in accordance with a disability insurance program, provided that the definition of disability applied under such disability insurance program complies with the initial sentence of this Section.

1.11     “Discount Rate” means the rate used by the Administrator for determining the Accrued Benefit. The initial Discount Rate is five per cent (5%). The Administrator may adjust the Discount Rate to maintain the rate within reasonable standards according to Generally Accepted Accounting Principles and applicable bank regulatory guidance.

1.12     “Early Retirement” means Separation from Service after Early Retirement Age and before Normal Retirement Age.

1.13     “Early Retirement Age” means the date the Executive attains age sixty (60) and completes twenty (20) Years of Service.

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1.14     “Early Involuntary Termination” means a Separation from Service (other than a termination for Cause) prior to Early Retirement Age due to the independent exercise of the unilateral authority of the Employer to terminate the Executive’s employment, other than due to the Executive’s implicit or explicit request, where the Executive was willing and able to continue performing services.

1.15     “Effective Date” means November 1, 2014.

1.16     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

1.17     “Normal Retirement Age” means the date the Executive attains age sixty-five (65) and completes twenty (20) Years of Service.

1.18     “Plan Year” means each twelve (12) month period commencing on November 1 and ending on October 31 of each year. The initial Plan Year shall commence on the Effective Date and end on the following October 31.

1.19     “Schedule A” means the schedule attached hereto and made a part hereof. Schedule A shall be updated upon a change to any of the benefits described in Article 2 hereof.

1.20     “Separation from Service” means a termination of the Executive’s employment with the Employer and its Affiliates for reasons other than death or Disability. A Separation from Service may occur as of a specified date for purposes of the Agreement even if the Executive continues to provide some services for the Employer or its Affiliates after that date, provided that the facts and circumstances indicate that the Employer and the Executive reasonably anticipated at that date that either no further services would be performed after that date, or that the level of bona fide services the Executive would perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed over the immediately preceding thirty-six (36) month period (or the full period during which the Executive performed services for the Employer, if that is less than thirty-six (36) months). A Separation from Service will not be deemed to have occurred while the Executive is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six (6) months or, if longer, the period for which a statute or contract provides the Executive with the right to reemployment with the Employer. If the Executive’s leave exceeds six (6) months but the Executive is not entitled to reemployment under a statute or contract, the Executive incurs a Separation of Service on the next day following the expiration of such six (6) month period. In determining whether a Separation of Service occurs the Administrator shall take into account, among other things, the definition of “service recipient” and “employer” set forth in Treasury regulation §1.409A-1(h)(3). The Administrator shall have full and final authority, to determine conclusively whether a Separation from Service occurs, and the date of such Separation from Service.

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1.21     “Specified Employee” means an individual that satisfies the definition of a “key employee” of the Employer as such term is defined in Code §416(i) (without regard to Code §416(i)(5)), provided that the stock of the Employer is publicly traded on an established securities market or otherwise, as defined in Code §1.897-1(m). If the Executive is a key employee at any time during the twelve (12) months ending on December 31, the Executive is a Specified Employee for the twelve (12) month period commencing on the first day of the following April.

1.22     “Year of Service” means the twelve (12) month period beginning on the Executive’s date of hire and any twelve (12) month anniversary thereof during the entirety of which the Executive is an employee of the Employer. Service with a subsidiary or other entity controlled by the Employer before the time such entity became a subsidiary shall not be considered “credited service.”

ARTICLE 2

PAYMENT OF BENEFITS

2.1     Normal Retirement Benefit. Upon Separation from Service after Normal Retirement Age, the Employer shall pay the Executive an annual benefit in the amount of Fifty-Five Thousand Dollars ($55,000) in lieu of any other benefit hereunder. The annual benefit will be paid in equal monthly installments commencing the month following Separation from Service and continuing until the Executive’s death.

2.2     Early Retirement Benefit. If Early Retirement occurs, the Employer shall pay the Executive the annual benefit shown on Schedule A for the Plan Year ending immediately prior to Separation from Service in lieu of any other benefit hereunder. The annual benefit will be paid in equal monthly installments commencing the month following Separation from Service and continuing until the Executive’s death.

2.3     Early Involuntary Termination Benefit. If Early Involuntary Termination occurs, the Employer shall pay the Executive the amount shown on Schedule A for the Plan Year ending immediately prior to Separation from Service in lieu of any other benefit hereunder. The annual benefit will be paid in equal monthly installments commencing the month following Separation from Service and continuing until the Executive’s death.

2.4     Disability Benefit. In the event the Executive suffers a Disability prior to Early Retirement Age the Employer shall pay the Executive the annual benefit shown on Schedule A for the Plan Year ending immediately prior to Disability in lieu of any other benefit hereunder. The annual benefit will be paid in equal monthly installments commencing the month following Disability and continuing until the Executive’s death.

2.5     Death Prior to Commencement of Benefit Payments. In the event the Executive dies prior to Separation from Service, the Employer shall pay the Beneficiary an annual benefit in the amount of Fifty-Five Thousand Dollars ($55,000) in lieu of any other benefit hereunder. The annual benefit will be paid in equal monthly installments commencing the month following the Executive’s death and continuing for fifteen (15) years.

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2.6     Death Subsequent to Commencement of Benefit Payments. If the Executive dies after benefit distributions have begun and the Executive has received less than one hundred eighty (180) monthly benefit installments, the Beneficiary shall continue to receive the same amounts the Executive would have received at the same times the Executive would have received them until the sum of the number of installments to the Beneficiary and the Executive totals one hundred eighty (180).

2.7     Termination for Cause. If the Employer terminates the Executive’s employment for Cause, then the Executive shall not be entitled to any benefits under the terms of this Agreement.

2.8     Restriction on Commencement of Distributions.  Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a Specified Employee at the time of Separation from Service, the provisions of this Section shall govern all distributions hereunder. Distributions which would otherwise be made to the Executive due to Separation from Service shall not be made during the first six (6) months following Separation from Service. Rather, any distribution which would otherwise be paid to the Executive during such period shall be accumulated and paid to the Executive in a lump sum on the first day of the seventh month following Separation from Service, or if earlier, upon the Executive’s death. All subsequent distributions shall be paid as they would have had this Section not applied.

2.9     Acceleration of Payments. Except as specifically permitted herein, no acceleration of the time or schedule of any payment may be made hereunder. Notwithstanding the foregoing, payments may be accelerated, in accordance with the provisions of Treasury Regulation §1.409A-3(j)(4) in the following circumstances: (i) as a result of certain domestic relations orders; (ii) in compliance with ethics agreements with the federal government; (iii) in compliance with the ethics laws or conflicts of interest laws; (iv) in limited cashouts (but not in excess of the limit under Code §402(g)(1)(B)); (v) to pay employment-related taxes; or (vi) to pay any taxes that may become due at any time that the Agreement fails to meet the requirements of Code Section 409A.

2.10     Delays in Payment by Employer. A payment may be delayed to a date after the designated payment date under any of the circumstances described below, and the provision will not fail to meet the requirements of establishing a permissible payment event. The delay in the payment will not constitute a subsequent deferral election, so long as the Employer treats all payments to similarly situated Participants on a reasonably consistent basis.

(a)     Payments subject to Code Section 162(m). If the Employer reasonably anticipates that the Employer’s deduction with respect to any distribution under this Agreement would be limited or eliminated by application of Code Section 162(m), then to the extent deemed necessary by the Employer to ensure that the entire amount of any distribution from this Agreement is deductible, the Employer may delay payment of any amount that would otherwise be distributed under this Agreement. The delayed amounts shall be distributed to the Executive (or the Beneficiary in the event of the Executive’s death) at the earliest date the Employer reasonably anticipates that the deduction of the payment of the amount will not be limited or eliminated by application of Code Section 162(m).

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(b)     Payments that would violate Federal securities laws or other applicable law. A payment may be delayed where the Employer reasonably anticipates that the making of the payment will violate Federal securities laws or other applicable law provided that the payment is made at the earliest date at which the Employer reasonably anticipates that the making of the payment will not cause such violation. The making of a payment that would cause inclusion in gross income or the application of any penalty provision of the Internal Revenue Code is not treated as a violation of law.

(c)     Solvency. Notwithstanding the above, a payment may be delayed where the payment would jeopardize the ability of the Employer to continue as a going concern.

2.11     Treatment of Payment as Made on Designated Payment Date. Solely for purposes of determining compliance with Code Section 409A, any payment under this Agreement made after the required payment date shall be deemed made on the required payment date provided that such payment is made by the latest of: (i) the end of the calendar year in which the payment is due; (ii) the 15^th day of the third calendar month following the payment due date; (iii) if Employer cannot calculate the payment amount on account of administrative impracticality which is beyond the Executive’s control, the end of the first calendar year which payment calculation is practicable; and (iv) if Employer does not have sufficient funds to make the payment without jeopardizing the Employer’s solvency, in the first calendar year in which the Employer’s funds are sufficient to make the payment.

2.12     Facility of Payment. If a distribution is to be made to a minor, or to a person who is otherwise incompetent, then the Administrator may make such distribution: (i) to the legal guardian, or if none, to a parent of a minor payee with whom the payee maintains his or her residence; or (ii) to the conservator or administrator or, if none, to the person having custody of an incompetent payee. Any such distribution shall fully discharge the Employer and the Administrator from further liability on account thereof.

2.13     Excise Tax Limitation. Notwithstanding any provision of this Agreement to the contrary, if any benefit payment hereunder would be treated as an “excess parachute payment” under Code Section 280G, the Employer shall reduce such benefit payment to the extent necessary to avoid treating such benefit payment as an excess parachute payment. The Executive shall be entitled to only the reduced benefit and shall forfeit any amount over and above the reduced amount.

2.14     Changes in Form of Timing of Benefit Payments. The Employer and the Executive may, subject to the terms hereof, amend this Agreement to delay the timing or change the form of payments. Any such amendment:

(a)     must take effect not less than twelve (12) months after the amendment is made;

(b)     must, for benefits distributable due solely to the arrival of a specified date, or on account of Separation from Service or Change in Control, delay the commencement of distributions for a minimum of five (5) years from the date the first distribution was originally scheduled to be made;

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(c)     must, for benefits distributable due solely to the arrival of a specified date, be made not less than twelve (12) months before distribution is scheduled to begin; and

(d)     may not accelerate the time or schedule of any distribution.

ARTICLE 3

BENEFICIARIES

3.1     Designation of Beneficiaries. The Executive may designate any person to receive any benefits payable under the Agreement upon the Executive’s death, and the designation may be changed from time to time by the Executive by filing a new designation. Each designation will revoke all prior designations by the Executive, shall be in the form prescribed by the Administrator, and shall be effective only when filed in writing with the Administrator during the Executive’s lifetime. If the Executive names someone other than the Executive’s spouse as a Beneficiary, the Administrator may, in its sole discretion, determine that spousal consent is required to be provided in a form designated by the Administrator, executed by the Executive’s spouse and returned to the Administrator. The Executive’s beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently dissolved.

3.2     Absence of Beneficiary Designation. In the absence of a valid Beneficiary designation, or if, at the time any benefit payment is due to a Beneficiary, there is no living Beneficiary validly named by the Executive, the Employer shall pay the benefit payment to the Executive’s spouse. If the spouse is not living then the Employer shall pay the benefit payment to the Executive’s living descendants per stirpes, and if there no living descendants, to the Executive’s estate. In determining the existence or identity of anyone entitled to a benefit payment, the Employer may rely conclusively upon information supplied by the Executive’s personal representative, executor, or administrator.

ARTICLE 4

ADMINISTRATION

4.1     Administrator Duties. The Administrator shall be responsible for the management, operation, and administration of the Agreement. When making a determination or calculation, the Administrator shall be entitled to rely on information furnished by the Employer, Executive or Beneficiary. No provision of this Agreement shall be construed as imposing on the Administrator any fiduciary duty under ERISA or other law, or any duty similar to any fiduciary duty under ERISA or other law.

4.2     Administrator Authority. The Administrator shall enforce this Agreement in accordance with its terms, shall be charged with the general administration of this Agreement, and shall have all powers necessary to accomplish its purposes.

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4.3     Binding Effect of Decision. The decision or action of the Administrator with respect to any question arising out of or in connection with the administration, interpretation or application of this Agreement and the rules and regulations promulgated hereunder shall be final, conclusive and binding upon all persons having any interest in this Agreement.

4.4     Compensation, Expenses and Indemnity. The Administrator shall serve without compensation for services rendered hereunder. The Administrator is authorized at the expense of the Employer to employ such legal counsel and/or recordkeeper as it may deem advisable to assist in the performance of its duties hereunder. Expense and fees in connection with the administration of this Agreement shall be paid by the Employer.

4.5     Employer Information. The Employer shall supply full and timely information to the Administrator on all matters relating to the Executive’s compensation, death, Disability or Separation from Service, and such other information as the Administrator reasonably requires.

4.6     Termination of Participation. If the Administrator determines in good faith that the Executive no longer qualifies as a member of a select group of management or highly compensated employees, as determined in accordance with ERISA, the Administrator shall have the right, in its sole discretion, to cease further benefit accruals hereunder.

4.7     Compliance with Code Section 409A. The Employer and the Executive intend that the Agreement comply with the provisions of Code Section 409A to prevent the inclusion in gross income of any amounts deferred hereunder in a taxable year prior to the year in which amounts are actually paid to the Executive or Beneficiary. This Agreement shall be construed, administered and governed in a manner that affects such intent, and the Administrator shall not take any action that would be inconsistent therewith.

ARTICLE 5

Claims and Review Procedures

5.1     Claims Procedure. A Claimant who has not received benefits under this Agreement that he or she believes should be distributed shall make a claim for such benefits as follows.

(a)     Initiation – Written Claim. The Claimant initiates a claim by submitting to the Administrator a written claim for the benefits. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within sixty (60) days after such notice was received by the Claimant. All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the Claimant.

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(b)     Timing of Administrator Response. The Administrator shall respond to such Claimant within ninety (90) days after receiving the claim. If the Administrator determines that special circumstances require additional time for processing the claim, the Administrator can extend the response period by an additional ninety (90) days by notifying the Claimant in writing, prior to the end of the initial ninety (90) day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Administrator expects to render its decision.

(c)     Notice of Decision. If the Administrator denies part or all of the claim, the Administrator shall notify the Claimant in writing of such denial. The Administrator shall write the notification in a manner calculated to be understood by the Claimant. The notification shall set forth: (i) the specific reasons for the denial; (ii) a reference to the specific provisions of this Agreement on which the denial is based; (iii) a description of any additional information or material necessary for the Claimant to perfect the claim and an explanation of why it is needed; (iv) an explanation of this Agreement’s review procedures and the time limits applicable to such procedures; and (v) a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.

5.2     Review Procedure. If the Administrator denies part or all of the claim, the Claimant shall have the opportunity for a full and fair review by the Administrator of the denial as follows.

(a)     Initiation – Written Request. To initiate the review, the Claimant, within sixty (60) days after receiving the Administrator’s notice of denial, must file with the Administrator a written request for review.

(b)     Additional Submissions – Information Access. The Claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim. The Administrator shall also provide the Claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the Claimant’s claim for benefits.

(c)     Considerations on Review. In considering the review, the Administrator shall take into account all materials and information the Claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

(d)     Timing of Administrator Response. The Administrator shall respond in writing to such Claimant within sixty (60) days after receiving the request for review. If the Administrator determines that special circumstances require additional time for processing the claim, the Administrator can extend the response period by an additional sixty (60) days by notifying the Claimant in writing, prior to the end of the initial sixty (60) day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Administrator expects to render its decision.

(e)     Notice of Decision. The Administrator shall notify the Claimant in writing of its decision on review. The Administrator shall write the notification in a manner calculated to be understood by the Claimant. The notification shall set forth: (a) the specific reasons for the denial; (b) a reference to the specific provisions of this Agreement on which the denial is based; (c) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the Claimant’s claim for benefits; and (d) a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a).

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ARTICLE 6

AMENDMENT AND TERMINATION

6.1     Agreement Amendment Generally. Except as provided in Section 6.2, this Agreement may be amended only by a written agreement signed by both the Employer and the Executive.

6.2     Amendment to Insure Proper Characterization of Agreement. Notwithstanding anything in this Agreement to the contrary, the Agreement may be amended by the Employer at any time, if found necessary in the opinion of the Employer, i) to ensure that the Agreement is characterized as plan of deferred compensation maintained for a select group of management or highly compensated employees as described under ERISA, ii) to conform the Agreement to the requirements of any applicable law or iii) to comply with the written instructions of the Employer’s auditors or banking regulators.

6.3     Agreement Termination Generally. The Employer may terminate this Agreement at any time by providing written notice of such termination to the Executive. The benefit upon such termination shall be the Accrued Benefit as of the date of termination. Except as provided in Section 6.4, such termination shall not cause a distribution of benefits under this Agreement. Rather, benefit distributions will be made at the earliest distribution event permitted under Article 2.

6.4     Effect of Complete Termination. Notwithstanding anything to the contrary in Section 6.3, and subject to the requirements of Code Section 409A and Treasury Regulations §1.409A-3(j)(4)(ix), at certain times the Employer may completely terminate and liquidate the Agreement. In the event of such a complete termination, the Employer shall pay the Accrued Benefit to the Executive. Such complete termination of the Agreement shall occur only under the following circumstances and conditions.

(a)     Corporate Dissolution or Bankruptcy. The Employer may terminate and liquidate this Agreement within twelve (12) months of a corporate dissolution taxed under Code Section 331, or with the approval of a bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A), provided that all benefits paid under the Agreement are included in the Executive’s gross income in the latest of: (i) the calendar year which the termination occurs; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the payment is administratively practicable.

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(b)     Change in Control. The Employer may terminate and liquidate this Agreement by taking irrevocable action to terminate and liquidate within the thirty (30) days preceding or the twelve (12) months following a Change in Control. This Agreement will then be treated as terminated only if all substantially similar arrangements sponsored by the Employer which are treated as deferred under a single plan under Treasury Regulations §1.409A-1(c)(2) are terminated and liquidated with respect to each participant who experienced the Change in Control so that the Executive and any participants in any such similar arrangements are required to receive all amounts of compensation deferred under the terminated arrangements within twelve (12) months of the date the Employer takes the irrevocable action to terminate the arrangements.

(c)     Discretionary Termination. The Employer may terminate and liquidate this Agreement provided that: (i) the termination does not occur proximate to a downturn in the financial health of the Employer; (ii) all arrangements sponsored by the Employer and Affiliates that would be aggregated with any terminated arrangements under Treasury Regulations §1.409A-1(c) are terminated; (iii) no payments, other than payments that would be payable under the terms of this Agreement if the termination had not occurred, are made within twelve (12) months of the date the Employer takes the irrevocable action to terminate this Agreement; (iv) all payments are made within twenty-four (24) months following the date the Employer takes the irrevocable action to terminate and liquidate this Agreement; and (v) neither the Employer nor any of its Affiliates adopt a new arrangement that would be aggregated with any terminated arrangement under Treasury Regulations §1.409A-1(c) if the Executive participated in both arrangements, at any time within three (3) years following the date the Employer takes the irrevocable action to terminate this Agreement.

ARTICLE 7

MISCELLANEOUS

7.1     No Effect on Other Rights. This Agreement constitutes the entire agreement between the Employer and the Executive as to the subject matter hereof. No rights are granted to the Executive by virtue of this Agreement other than those specifically set forth herein. Nothing contained herein will confer upon the Executive the right to be retained in the service of the Employer nor limit the right of the Employer to discharge or otherwise deal with the Executive without regard to the existence hereof.

7.2     State Law. To the extent not governed by ERISA, the provisions of this Agreement shall be construed and interpreted according to the internal law of the State of Montana without regard to its conflicts of laws principles.

7.3     Validity. In case any provision of this Agreement shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Agreement shall be construed and enforced as if such illegal or invalid provision had never been inserted herein.

7.4     Nonassignability. Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner.

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7.5     Unsecured General Creditor Status. Payment to the Executive or any Beneficiary hereunder shall be made from assets which shall continue, for all purposes, to be part of the general, unrestricted assets of the Employer and no person shall have any interest in any such asset by virtue of any provision of this Agreement. The Employer’s obligation hereunder shall be an unfunded and unsecured promise to pay money in the future. In the event that the Employer purchases an insurance policy insuring the life of the Executive to recover the cost of providing benefits hereunder, neither the Executive nor the Beneficiary shall have any rights whatsoever in said policy or the proceeds therefrom.

7.6     Life Insurance. If the Employer chooses to obtain insurance on the life of the Executive in connection with its obligations under this Agreement, the Executive hereby agrees to take such physical examinations and to truthfully and completely supply such information as may be required by the Employer or the insurance company designated by the Employer.

7.7     Unclaimed Benefits. The Executive shall keep the Employer informed of the Executive’s current address and the current address of the Beneficiary. If the location of the Executive is not made known to the Employer within three years after the date upon which any payment of any benefits may first be made, the Employer shall delay payment of the Executive’s benefit payment(s) until the location of the Executive is made known to the Employer; however, the Employer shall only be obligated to hold such benefit payment(s) for the Executive until the expiration of three (3) years. Upon expiration of the three (3) year period, the Employer may discharge its obligation by payment to the Beneficiary. If the location of the Beneficiary is not made known to the Employer by the end of an additional two (2) month period following expiration of the three (3) year period, the Employer may discharge its obligation by payment to the Executive’s estate. If there is no estate in existence at such time or if such fact cannot be determined by the Employer, the Executive and Beneficiary shall thereupon forfeit all rights to any benefits provided under this Agreement.

7.8     Suicide or Misstatement. No benefit shall be distributed hereunder if the Executive commits suicide within two (2) years after the Effective Date, or if an insurance company which issued a life insurance policy covering the Executive and owned by the Employer denies coverage (i) for material misstatements of fact made by the Executive on an application for life insurance, or (ii) for any other reason.

7.9     Removal. Notwithstanding anything in this Agreement to the contrary, the Employer shall not distribute any benefit under this Agreement if the Executive is subject to a final removal or prohibition order issued pursuant to Section 8(e) of the Federal Deposit Insurance Act. Furthermore, any payments made to the Executive pursuant to this Agreement shall, if required, comply with 12 U.S.C. 1828, FDIC Regulation 12 CFR Part 359 and any other regulations or guidance promulgated thereunder.

7.10     Notice. Any notice, consent or demand required or permitted to be given to the Employer or Administrator under this Agreement shall be sufficient if in writing and hand-delivered or sent by registered or certified mail to the Employer’s principal business office. Any notice or filing required or permitted to be given to the Executive or Beneficiary under this Agreement shall be sufficient if in writing and hand-delivered or sent by mail to the last known address of the Executive or Beneficiary, as appropriate. Any notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark or on the receipt for registration or certification.

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7.11     Headings and Interpretation. Headings and sub-headings in this Agreement are inserted for reference and convenience only and shall not be deemed part of this Agreement. Wherever the fulfillment of the intent and purpose of this Agreement requires and the context will permit, the use of the masculine gender includes the feminine and use of the singular includes the plural.

7.12     Alternative Action. In the event it becomes impossible for the Employer or the Administrator to perform any act required by this Agreement due to regulatory or other constraints, the Employer or Administrator may perform such alternative act as most nearly carries out the intent and purpose of this Agreement and is in the best interests of the Employer, provided that such alternative act does not violate Code Section 409A.

7.13     Coordination with Other Benefits. The benefits provided for the Executive or the Beneficiary under this Agreement are in addition to any other benefits available to the Executive under any other plan or program for employees of the Employer. This Agreement shall supplement and shall not supersede, modify, or amend any other such plan or program except as may otherwise be expressly provided herein.

7.14     Inurement. This Agreement shall be binding upon and shall inure to the benefit of the Employer, its successor and assigns, and the Executive, the Executive’s successors, heirs, executors, administrators, and the Beneficiary.

7.15     Tax Withholding. The Employer may make such provisions and take such action as it deems necessary or appropriate for the withholding of any taxes which the Employer is required by any law or regulation to withhold in connection with any benefits under the Agreement. The Executive shall be responsible for the payment of all individual tax liabilities relating to any benefits paid hereunder.

7.16     Aggregation of Agreement. If the Employer offers other deferred compensation plans, this Agreement and those plans shall be treated as a single plan to the extent required under Code Section 409A.

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IN WITNESS WHEREOF, the Executive and a representative of the Employer have executed this Agreement document as indicated below:

Executive:	Employer:
/s/ Dale Field	By:	/s/ Peter J. Johnson
Dale Field	Its:

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Salary continuation Agreement

Beneficiary Designation

I, Dale Field, designate the following as Beneficiary under this Agreement:

Primary
	%
	%
Contingent
	%
	%

I understand that I may change this beneficiary designation by delivering a new written designation to the Administrator, which shall be effective only upon receipt by the Administrator prior to my death. I further understand that the designation will be automatically revoked if the Beneficiary predeceases me or if I have named my spouse as Beneficiary and our marriage is subsequently dissolved.

Signature:     _______________________________          Date:     _______

SPOUSAL CONSENT (Required only if Administrator requests and someone other than spouse is named Beneficiary)

I consent to the beneficiary designation above. I also acknowledge that if I am named Beneficiary and my marriage is subsequently dissolved, the beneficiary designation will be automatically revoked.

Spouse Name:     _______________________________

Signature:     _______________________________     Date:           

Received by the Administrator this ________ day of ___________________, 20__

By:

Title:

EX-10.3

Exhibit 10.3

Salary continuation Agreement

This Salary Continuation Agreement (the “Agreement”), by and between Opportunity Bank of Montana, Located in Helena Montana (the “Employer”), and Chantelle Nash (the “Executive”), effective as of the 1st day of November, 2014, formalizes the agreements and understanding between the Employer and the Executive.

WITNESSETH:

WHEREAS, the Executive is employed by the Employer;

WHEREAS, the Employer recognizes the valuable services the Executive has performed for the Employer and wishes to encourage the Executive’s continued employment and to provide the Executive with additional incentive to achieve corporate objectives;

WHEREAS, the Employer wishes to provide the terms and conditions upon which the Employer shall pay additional retirement benefits to the Executive;

WHEREAS, the Employer and the Executive intend this Agreement shall at all times be administered and interpreted in compliance with Code Section 409A; and

WHEREAS, the Employer intends this Agreement shall at all times be administered and interpreted in such a manner as to constitute an unfunded nonqualified deferred compensation arrangement, maintained primarily to provide supplemental retirement benefits for the Executive, a member of select group of management or highly compensated employee of the Employer.

NOW THEREFORE, in consideration of the premises and of the mutual promises herein contained, the Employer and the Executive agree as follows:

ARTICLE 1

DEFINITIONS

For the purpose of this Agreement, the following phrases or terms shall have the indicated meanings:

1.1     “Accrued Benefit” means the dollar value of the liability that should be accrued by the Employer, under Generally Accepted Accounting Principles, for the Employer’s obligation to the Executive under this Agreement, calculated by applying Accounting Standards Codification 710-10 and the Discount Rate.

1.2     “Administrator” means the Board or its designee.

1.3     “Affiliate” means any business entity with whom the Employer would be considered a single employer under Section 414(b) and 414(c) of the Code. Such term shall be interpreted in a manner consistent with the definition of “service recipient” contained in Code Section 409A.

1.4     “Beneficiary” means the person or persons designated in writing by the Executive to receive benefits hereunder in the event of the Executive’s death.

1.5     “Board” means the Board of Directors of the Employer.

1.6     “Cause” means any of the following acts or circumstances: gross negligence or gross neglect of duties to the Employer; conviction of a felony or of a gross misdemeanor involving moral turpitude in connection with the Executive’s employment with the Employer; or fraud, disloyalty, dishonesty or willful violation of any law or significant Employer policy committed in connection with the Executive's employment and resulting in a material adverse effect on the Employer.

1.7     “Change in Control” means a change in the ownership or effective control of the Employer, or in the ownership of a substantial portion of the assets of the Employer, as such change is defined in Code Section 409A and regulations thereunder.

1.8     “Claimant” means a person who believes that he or she is being denied a benefit to which he or she is entitled hereunder.

1.9     “Code” means the Internal Revenue Code of 1986, as amended.

1.10     “Disability” means a condition of the Executive whereby the Executive either: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Employer. The Administrator will determine whether the Executive has incurred a Disability based on its own good faith determination and may require the Executive to submit to reasonable physical and mental examinations for this purpose. The Executive will also be deemed to have incurred a Disability if determined to be totally disabled by the Social Security Administration or in accordance with a disability insurance program, provided that the definition of disability applied under such disability insurance program complies with the initial sentence of this Section.

1.11     “Discount Rate” means the rate used by the Administrator for determining the Accrued Benefit. The initial Discount Rate is five per cent (5%). The Administrator may adjust the Discount Rate to maintain the rate within reasonable standards according to Generally Accepted Accounting Principles and applicable bank regulatory guidance.

1.12     “Early Retirement” means Separation from Service after Early Retirement Age and before Normal Retirement Age.

1.13     “Early Retirement Age” means the date the Executive attains age sixty (60) and completes twenty (20) Years of Service.

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1.14     “Early Involuntary Termination” means a Separation from Service (other than a termination for Cause) prior to Early Retirement Age due to the independent exercise of the unilateral authority of the Employer to terminate the Executive’s employment, other than due to the Executive’s implicit or explicit request, where the Executive was willing and able to continue performing services.

1.15      “Effective Date” means November 1, 2014.

1.16     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

1.17     “Normal Retirement Age” means the date the Executive attains age sixty-five (65) and completes twenty (20) Years of Service.

1.18     “Plan Year” means each twelve (12) month period commencing on November 1 and ending on October 31 of each year. The initial Plan Year shall commence on the Effective Date and end on the following October 31.

1.19     “Schedule A” means the schedule attached hereto and made a part hereof. Schedule A shall be updated upon a change to any of the benefits described in Article 2 hereof.

1.20     “Separation from Service” means a termination of the Executive’s employment with the Employer and its Affiliates for reasons other than death or Disability. A Separation from Service may occur as of a specified date for purposes of the Agreement even if the Executive continues to provide some services for the Employer or its Affiliates after that date, provided that the facts and circumstances indicate that the Employer and the Executive reasonably anticipated at that date that either no further services would be performed after that date, or that the level of bona fide services the Executive would perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed over the immediately preceding thirty-six (36) month period (or the full period during which the Executive performed services for the Employer, if that is less than thirty-six (36) months). A Separation from Service will not be deemed to have occurred while the Executive is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six (6) months or, if longer, the period for which a statute or contract provides the Executive with the right to reemployment with the Employer. If the Executive’s leave exceeds six (6) months but the Executive is not entitled to reemployment under a statute or contract, the Executive incurs a Separation of Service on the next day following the expiration of such six (6) month period. In determining whether a Separation of Service occurs the Administrator shall take into account, among other things, the definition of “service recipient” and “employer” set forth in Treasury regulation §1.409A-1(h)(3). The Administrator shall have full and final authority, to determine conclusively whether a Separation from Service occurs, and the date of such Separation from Service.

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1.21     “Specified Employee” means an individual that satisfies the definition of a “key employee” of the Employer as such term is defined in Code §416(i) (without regard to Code §416(i)(5)), provided that the stock of the Employer is publicly traded on an established securities market or otherwise, as defined in Code §1.897-1(m). If the Executive is a key employee at any time during the twelve (12) months ending on December 31, the Executive is a Specified Employee for the twelve (12) month period commencing on the first day of the following April.

1.22     “Year of Service” means the twelve (12) month period beginning on the Executive’s date of hire and any twelve (12) month anniversary thereof during the entirety of which the Executive is an employee of the Employer. Service with a subsidiary or other entity controlled by the Employer before the time such entity became a subsidiary shall not be considered “credited service.”

ARTICLE 2

PAYMENT OF BENEFITS

2.1     Normal Retirement Benefit. Upon Separation from Service after Normal Retirement Age, the Employer shall pay the Executive an annual benefit in the amount of Forty-Two Thousand Dollars ($42,000) in lieu of any other benefit hereunder. The annual benefit will be paid in equal monthly installments commencing the month following Separation from Service and continuing until the Executive’s death.

2.2     Early Retirement Benefit. If Early Retirement occurs, the Employer shall pay the Executive the annual benefit shown on Schedule A for the Plan Year ending immediately prior to Separation from Service in lieu of any other benefit hereunder. The annual benefit will be paid in equal monthly installments commencing the month following Separation from Service and continuing until the Executive’s death.

2.3     Early Involuntary Termination Benefit. If Early Involuntary Termination occurs, the Employer shall pay the Executive the amount shown on Schedule A for the Plan Year ending immediately prior to Separation from Service in lieu of any other benefit hereunder. The annual benefit will be paid in equal monthly installments commencing the month following Separation from Service and continuing until the Executive’s death.

2.4     Disability Benefit. In the event the Executive suffers a Disability prior to Early Retirement Age the Employer shall pay the Executive the annual benefit shown on Schedule A for the Plan Year ending immediately prior to Disability in lieu of any other benefit hereunder. The annual benefit will be paid in equal monthly installments commencing the month following Disability and continuing until the Executive’s death.

2.5     Death Prior to Commencement of Benefit Payments. In the event the Executive dies prior to Separation from Service, the Employer shall pay the Beneficiary an annual benefit in the amount of Forty-Two Thousand Dollars ($42,000) in lieu of any other benefit hereunder. The annual benefit will be paid in equal monthly installments commencing the month following the Executive’s death and continuing for fifteen (15) years.

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2.6     Death Subsequent to Commencement of Benefit Payments. If the Executive dies after benefit distributions have begun and the Executive has received less than one hundred eighty (180) monthly benefit installments, the Beneficiary shall continue to receive the same amounts the Executive would have received at the same times the Executive would have received them until the sum of the number of installments to the Beneficiary and the Executive totals one hundred eighty (180).

2.7     Termination for Cause. If the Employer terminates the Executive’s employment for Cause, then the Executive shall not be entitled to any benefits under the terms of this Agreement.

2.8     Restriction on Commencement of Distributions.  Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a Specified Employee at the time of Separation from Service, the provisions of this Section shall govern all distributions hereunder. Distributions which would otherwise be made to the Executive due to Separation from Service shall not be made during the first six (6) months following Separation from Service. Rather, any distribution which would otherwise be paid to the Executive during such period shall be accumulated and paid to the Executive in a lump sum on the first day of the seventh month following Separation from Service, or if earlier, upon the Executive’s death. All subsequent distributions shall be paid as they would have had this Section not applied.

2.9     Acceleration of Payments. Except as specifically permitted herein, no acceleration of the time or schedule of any payment may be made hereunder. Notwithstanding the foregoing, payments may be accelerated, in accordance with the provisions of Treasury Regulation §1.409A-3(j)(4) in the following circumstances: (i) as a result of certain domestic relations orders; (ii) in compliance with ethics agreements with the federal government; (iii) in compliance with the ethics laws or conflicts of interest laws; (iv) in limited cashouts (but not in excess of the limit under Code §402(g)(1)(B)); (v) to pay employment-related taxes; or (vi) to pay any taxes that may become due at any time that the Agreement fails to meet the requirements of Code Section 409A.

2.10     Delays in Payment by Employer. A payment may be delayed to a date after the designated payment date under any of the circumstances described below, and the provision will not fail to meet the requirements of establishing a permissible payment event. The delay in the payment will not constitute a subsequent deferral election, so long as the Employer treats all payments to similarly situated Participants on a reasonably consistent basis.

(a)     Payments subject to Code Section 162(m). If the Employer reasonably anticipates that the Employer’s deduction with respect to any distribution under this Agreement would be limited or eliminated by application of Code Section 162(m), then to the extent deemed necessary by the Employer to ensure that the entire amount of any distribution from this Agreement is deductible, the Employer may delay payment of any amount that would otherwise be distributed under this Agreement. The delayed amounts shall be distributed to the Executive (or the Beneficiary in the event of the Executive’s death) at the earliest date the Employer reasonably anticipates that the deduction of the payment of the amount will not be limited or eliminated by application of Code Section 162(m).

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(b)     Payments that would violate Federal securities laws or other applicable law. A payment may be delayed where the Employer reasonably anticipates that the making of the payment will violate Federal securities laws or other applicable law provided that the payment is made at the earliest date at which the Employer reasonably anticipates that the making of the payment will not cause such violation. The making of a payment that would cause inclusion in gross income or the application of any penalty provision of the Internal Revenue Code is not treated as a violation of law.

(c)     Solvency. Notwithstanding the above, a payment may be delayed where the payment would jeopardize the ability of the Employer to continue as a going concern.

2.11     Treatment of Payment as Made on Designated Payment Date. Solely for purposes of determining compliance with Code Section 409A, any payment under this Agreement made after the required payment date shall be deemed made on the required payment date provided that such payment is made by the latest of: (i) the end of the calendar year in which the payment is due; (ii) the 15^th day of the third calendar month following the payment due date; (iii) if Employer cannot calculate the payment amount on account of administrative impracticality which is beyond the Executive’s control, the end of the first calendar year which payment calculation is practicable; and (iv) if Employer does not have sufficient funds to make the payment without jeopardizing the Employer’s solvency, in the first calendar year in which the Employer’s funds are sufficient to make the payment.

2.12     Facility of Payment. If a distribution is to be made to a minor, or to a person who is otherwise incompetent, then the Administrator may make such distribution: (i) to the legal guardian, or if none, to a parent of a minor payee with whom the payee maintains his or her residence; or (ii) to the conservator or administrator or, if none, to the person having custody of an incompetent payee. Any such distribution shall fully discharge the Employer and the Administrator from further liability on account thereof.

2.13     Excise Tax Limitation. Notwithstanding any provision of this Agreement to the contrary, if any benefit payment hereunder would be treated as an “excess parachute payment” under Code Section 280G, the Employer shall reduce such benefit payment to the extent necessary to avoid treating such benefit payment as an excess parachute payment. The Executive shall be entitled to only the reduced benefit and shall forfeit any amount over and above the reduced amount.

2.14     Changes in Form of Timing of Benefit Payments. The Employer and the Executive may, subject to the terms hereof, amend this Agreement to delay the timing or change the form of payments. Any such amendment:

(a)     must take effect not less than twelve (12) months after the amendment is made;

(b)     must, for benefits distributable due solely to the arrival of a specified date, or on account of Separation from Service or Change in Control, delay the commencement of distributions for a minimum of five (5) years from the date the first distribution was originally scheduled to be made;

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(c)     must, for benefits distributable due solely to the arrival of a specified date, be made not less than twelve (12) months before distribution is scheduled to begin; and

(d)     may not accelerate the time or schedule of any distribution.

ARTICLE 3

BENEFICIARIES

3.1     Designation of Beneficiaries. The Executive may designate any person to receive any benefits payable under the Agreement upon the Executive’s death, and the designation may be changed from time to time by the Executive by filing a new designation. Each designation will revoke all prior designations by the Executive, shall be in the form prescribed by the Administrator, and shall be effective only when filed in writing with the Administrator during the Executive’s lifetime. If the Executive names someone other than the Executive’s spouse as a Beneficiary, the Administrator may, in its sole discretion, determine that spousal consent is required to be provided in a form designated by the Administrator, executed by the Executive’s spouse and returned to the Administrator. The Executive’s beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently dissolved.

3.2     Absence of Beneficiary Designation. In the absence of a valid Beneficiary designation, or if, at the time any benefit payment is due to a Beneficiary, there is no living Beneficiary validly named by the Executive, the Employer shall pay the benefit payment to the Executive’s spouse. If the spouse is not living then the Employer shall pay the benefit payment to the Executive’s living descendants per stirpes, and if there no living descendants, to the Executive’s estate. In determining the existence or identity of anyone entitled to a benefit payment, the Employer may rely conclusively upon information supplied by the Executive’s personal representative, executor, or administrator.

ARTICLE 4

ADMINISTRATION

4.1     Administrator Duties. The Administrator shall be responsible for the management, operation, and administration of the Agreement. When making a determination or calculation, the Administrator shall be entitled to rely on information furnished by the Employer, Executive or Beneficiary. No provision of this Agreement shall be construed as imposing on the Administrator any fiduciary duty under ERISA or other law, or any duty similar to any fiduciary duty under ERISA or other law.

4.2     Administrator Authority. The Administrator shall enforce this Agreement in accordance with its terms, shall be charged with the general administration of this Agreement, and shall have all powers necessary to accomplish its purposes.

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4.3     Binding Effect of Decision. The decision or action of the Administrator with respect to any question arising out of or in connection with the administration, interpretation or application of this Agreement and the rules and regulations promulgated hereunder shall be final, conclusive and binding upon all persons having any interest in this Agreement.

4.4     Compensation, Expenses and Indemnity. The Administrator shall serve without compensation for services rendered hereunder. The Administrator is authorized at the expense of the Employer to employ such legal counsel and/or recordkeeper as it may deem advisable to assist in the performance of its duties hereunder. Expense and fees in connection with the administration of this Agreement shall be paid by the Employer.

4.5     Employer Information. The Employer shall supply full and timely information to the Administrator on all matters relating to the Executive’s compensation, death, Disability or Separation from Service, and such other information as the Administrator reasonably requires.

4.6     Termination of Participation. If the Administrator determines in good faith that the Executive no longer qualifies as a member of a select group of management or highly compensated employees, as determined in accordance with ERISA, the Administrator shall have the right, in its sole discretion, to cease further benefit accruals hereunder.

4.7     Compliance with Code Section 409A. The Employer and the Executive intend that the Agreement comply with the provisions of Code Section 409A to prevent the inclusion in gross income of any amounts deferred hereunder in a taxable year prior to the year in which amounts are actually paid to the Executive or Beneficiary. This Agreement shall be construed, administered and governed in a manner that affects such intent, and the Administrator shall not take any action that would be inconsistent therewith.

ARTICLE 5

Claims and Review Procedures

5.1     Claims Procedure. A Claimant who has not received benefits under this Agreement that he or she believes should be distributed shall make a claim for such benefits as follows.

(a)     Initiation – Written Claim. The Claimant initiates a claim by submitting to the Administrator a written claim for the benefits. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within sixty (60) days after such notice was received by the Claimant. All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the Claimant..

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(b)     Timing of Administrator Response. The Administrator shall respond to such Claimant within ninety (90) days after receiving the claim. If the Administrator determines that special circumstances require additional time for processing the claim, the Administrator can extend the response period by an additional ninety (90) days by notifying the Claimant in writing, prior to the end of the initial ninety (90) day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Administrator expects to render its decision.

(c)     Notice of Decision. If the Administrator denies part or all of the claim, the Administrator shall notify the Claimant in writing of such denial. The Administrator shall write the notification in a manner calculated to be understood by the Claimant. The notification shall set forth: (i) the specific reasons for the denial; (ii) a reference to the specific provisions of this Agreement on which the denial is based; (iii) a description of any additional information or material necessary for the Claimant to perfect the claim and an explanation of why it is needed; (iv) an explanation of this Agreement’s review procedures and the time limits applicable to such procedures; and (v) a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.

5.2     Review Procedure. If the Administrator denies part or all of the claim, the Claimant shall have the opportunity for a full and fair review by the Administrator of the denial as follows.

(a)     Initiation – Written Request. To initiate the review, the Claimant, within sixty (60) days after receiving the Administrator’s notice of denial, must file with the Administrator a written request for review.

(b)     Additional Submissions – Information Access. The Claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim. The Administrator shall also provide the Claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the Claimant’s claim for benefits.

(c)     Considerations on Review. In considering the review, the Administrator shall take into account all materials and information the Claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

(d)     Timing of Administrator Response. The Administrator shall respond in writing to such Claimant within sixty (60) days after receiving the request for review. If the Administrator determines that special circumstances require additional time for processing the claim, the Administrator can extend the response period by an additional sixty (60) days by notifying the Claimant in writing, prior to the end of the initial sixty (60) day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Administrator expects to render its decision.

(e)     Notice of Decision. The Administrator shall notify the Claimant in writing of its decision on review. The Administrator shall write the notification in a manner calculated to be understood by the Claimant. The notification shall set forth: (a) the specific reasons for the denial; (b) a reference to the specific provisions of this Agreement on which the denial is based; (c) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the Claimant’s claim for benefits; and (d) a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a).

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ARTICLE 6

AMENDMENT AND TERMINATION

6.1     Agreement Amendment Generally. Except as provided in Section 6.2, this Agreement may be amended only by a written agreement signed by both the Employer and the Executive.

6.2     Amendment to Insure Proper Characterization of Agreement. Notwithstanding anything in this Agreement to the contrary, the Agreement may be amended by the Employer at any time, if found necessary in the opinion of the Employer, i) to ensure that the Agreement is characterized as plan of deferred compensation maintained for a select group of management or highly compensated employees as described under ERISA, ii) to conform the Agreement to the requirements of any applicable law or iii) to comply with the written instructions of the Employer’s auditors or banking regulators.

6.3     Agreement Termination Generally. The Employer may terminate this Agreement at any time by providing written notice of such termination to the Executive. The benefit upon such termination shall be the Accrued Benefit as of the date of termination. Except as provided in Section 6.4, such termination shall not cause a distribution of benefits under this Agreement. Rather, benefit distributions will be made at the earliest distribution event permitted under Article 2.

6.4     Effect of Complete Termination. Notwithstanding anything to the contrary in Section 6.3, and subject to the requirements of Code Section 409A and Treasury Regulations §1.409A-3(j)(4)(ix), at certain times the Employer may completely terminate and liquidate the Agreement. In the event of such a complete termination, the Employer shall pay the Accrued Benefit to the Executive. Such complete termination of the Agreement shall occur only under the following circumstances and conditions.

(a)     Corporate Dissolution or Bankruptcy. The Employer may terminate and liquidate this Agreement within twelve (12) months of a corporate dissolution taxed under Code Section 331, or with the approval of a bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A), provided that all benefits paid under the Agreement are included in the Executive’s gross income in the latest of: (i) the calendar year which the termination occurs; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the payment is administratively practicable.

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(b)     Change in Control. The Employer may terminate and liquidate this Agreement by taking irrevocable action to terminate and liquidate within the thirty (30) days preceding or the twelve (12) months following a Change in Control. This Agreement will then be treated as terminated only if all substantially similar arrangements sponsored by the Employer which are treated as deferred under a single plan under Treasury Regulations §1.409A-1(c)(2) are terminated and liquidated with respect to each participant who experienced the Change in Control so that the Executive and any participants in any such similar arrangements are required to receive all amounts of compensation deferred under the terminated arrangements within twelve (12) months of the date the Employer takes the irrevocable action to terminate the arrangements.

(c)     Discretionary Termination. The Employer may terminate and liquidate this Agreement provided that: (i) the termination does not occur proximate to a downturn in the financial health of the Employer; (ii) all arrangements sponsored by the Employer and Affiliates that would be aggregated with any terminated arrangements under Treasury Regulations §1.409A-1(c) are terminated; (iii) no payments, other than payments that would be payable under the terms of this Agreement if the termination had not occurred, are made within twelve (12) months of the date the Employer takes the irrevocable action to terminate this Agreement; (iv) all payments are made within twenty-four (24) months following the date the Employer takes the irrevocable action to terminate and liquidate this Agreement; and (v) neither the Employer nor any of its Affiliates adopt a new arrangement that would be aggregated with any terminated arrangement under Treasury Regulations §1.409A-1(c) if the Executive participated in both arrangements, at any time within three (3) years following the date the Employer takes the irrevocable action to terminate this Agreement.

ARTICLE 7

MISCELLANEOUS

7.1     No Effect on Other Rights. This Agreement constitutes the entire agreement between the Employer and the Executive as to the subject matter hereof. No rights are granted to the Executive by virtue of this Agreement other than those specifically set forth herein. Nothing contained herein will confer upon the Executive the right to be retained in the service of the Employer nor limit the right of the Employer to discharge or otherwise deal with the Executive without regard to the existence hereof.

7.2     State Law. To the extent not governed by ERISA, the provisions of this Agreement shall be construed and interpreted according to the internal law of the State of Montana without regard to its conflicts of laws principles.

7.3     Validity. In case any provision of this Agreement shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Agreement shall be construed and enforced as if such illegal or invalid provision had never been inserted herein.

7.4     Nonassignability. Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner.

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7.5     Unsecured General Creditor Status. Payment to the Executive or any Beneficiary hereunder shall be made from assets which shall continue, for all purposes, to be part of the general, unrestricted assets of the Employer and no person shall have any interest in any such asset by virtue of any provision of this Agreement. The Employer’s obligation hereunder shall be an unfunded and unsecured promise to pay money in the future. In the event that the Employer purchases an insurance policy insuring the life of the Executive to recover the cost of providing benefits hereunder, neither the Executive nor the Beneficiary shall have any rights whatsoever in said policy or the proceeds therefrom.

7.6     Life Insurance. If the Employer chooses to obtain insurance on the life of the Executive in connection with its obligations under this Agreement, the Executive hereby agrees to take such physical examinations and to truthfully and completely supply such information as may be required by the Employer or the insurance company designated by the Employer.

7.7     Unclaimed Benefits. The Executive shall keep the Employer informed of the Executive’s current address and the current address of the Beneficiary. If the location of the Executive is not made known to the Employer within three years after the date upon which any payment of any benefits may first be made, the Employer shall delay payment of the Executive’s benefit payment(s) until the location of the Executive is made known to the Employer; however, the Employer shall only be obligated to hold such benefit payment(s) for the Executive until the expiration of three (3) years. Upon expiration of the three (3) year period, the Employer may discharge its obligation by payment to the Beneficiary. If the location of the Beneficiary is not made known to the Employer by the end of an additional two (2) month period following expiration of the three (3) year period, the Employer may discharge its obligation by payment to the Executive’s estate. If there is no estate in existence at such time or if such fact cannot be determined by the Employer, the Executive and Beneficiary shall thereupon forfeit all rights to any benefits provided under this Agreement.

7.8     Suicide or Misstatement. No benefit shall be distributed hereunder if the Executive commits suicide within two (2) years after the Effective Date, or if an insurance company which issued a life insurance policy covering the Executive and owned by the Employer denies coverage (i) for material misstatements of fact made by the Executive on an application for life insurance, or (ii) for any other reason.

7.9     Removal. Notwithstanding anything in this Agreement to the contrary, the Employer shall not distribute any benefit under this Agreement if the Executive is subject to a final removal or prohibition order issued pursuant to Section 8(e) of the Federal Deposit Insurance Act. Furthermore, any payments made to the Executive pursuant to this Agreement shall, if required, comply with 12 U.S.C. 1828, FDIC Regulation 12 CFR Part 359 and any other regulations or guidance promulgated thereunder.

7.10     Notice. Any notice, consent or demand required or permitted to be given to the Employer or Administrator under this Agreement shall be sufficient if in writing and hand-delivered or sent by registered or certified mail to the Employer’s principal business office. Any notice or filing required or permitted to be given to the Executive or Beneficiary under this Agreement shall be sufficient if in writing and hand-delivered or sent by mail to the last known address of the Executive or Beneficiary, as appropriate. Any notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark or on the receipt for registration or certification.

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7.11     Headings and Interpretation. Headings and sub-headings in this Agreement are inserted for reference and convenience only and shall not be deemed part of this Agreement. Wherever the fulfillment of the intent and purpose of this Agreement requires and the context will permit, the use of the masculine gender includes the feminine and use of the singular includes the plural.

7.12     Alternative Action. In the event it becomes impossible for the Employer or the Administrator to perform any act required by this Agreement due to regulatory or other constraints, the Employer or Administrator may perform such alternative act as most nearly carries out the intent and purpose of this Agreement and is in the best interests of the Employer, provided that such alternative act does not violate Code Section 409A.

7.13     Coordination with Other Benefits. The benefits provided for the Executive or the Beneficiary under this Agreement are in addition to any other benefits available to the Executive under any other plan or program for employees of the Employer. This Agreement shall supplement and shall not supersede, modify, or amend any other such plan or program except as may otherwise be expressly provided herein.

7.14     Inurement. This Agreement shall be binding upon and shall inure to the benefit of the Employer, its successor and assigns, and the Executive, the Executive’s successors, heirs, executors, administrators, and the Beneficiary.

7.15     Tax Withholding. The Employer may make such provisions and take such action as it deems necessary or appropriate for the withholding of any taxes which the Employer is required by any law or regulation to withhold in connection with any benefits under the Agreement. The Executive shall be responsible for the payment of all individual tax liabilities relating to any benefits paid hereunder.

7.16     Aggregation of Agreement. If the Employer offers other deferred compensation plans, this Agreement and those plans shall be treated as a single plan to the extent required under Code Section 409A.

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IN WITNESS WHEREOF, the Executive and a representative of the Employer have executed this Agreement document as indicated below:

Executive:	Employer:
/s/ Chantelle Nash	By:	/s/ Peter J. Johnson
Chantelle Nash	Its:

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Salary continuation Agreement

Beneficiary Designation

I, Chantelle Nash, designate the following as Beneficiary under this Agreement:

Primary
	%
	%
Contingent
	%
	%

I understand that I may change this beneficiary designation by delivering a new written designation to the Administrator, which shall be effective only upon receipt by the Administrator prior to my death. I further understand that the designation will be automatically revoked if the Beneficiary predeceases me or if I have named my spouse as Beneficiary and our marriage is subsequently dissolved.

Signature:     _______________________________          Date:     _______

SPOUSAL CONSENT (Required only if Administrator requests and someone other than spouse is named Beneficiary)

I consent to the beneficiary designation above. I also acknowledge that if I am named Beneficiary and my marriage is subsequently dissolved, the beneficiary designation will be automatically revoked.

Spouse Name:     _______________________________

Signature:     _______________________________     Date:             

Received by the Administrator this ________ day of ___________________, 20__

By:

Title:

EX-31.1

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

 Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) UNDER THE SECURITIES

EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302(a) OF THE

SARBANES-OXLEY ACT OF 2002

I, Peter J. Johnson certify that:

1. I have reviewed this quarterly report on Form 10-Q of Eagle Bancorp Montana, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent quarter (the registrant's fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 9, 2019
	/s/ Peter J. Johnson
	Peter J. Johnson
	Peter J. Johnson
	(Principal Executive Officer)

EX-31.2

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a) UNDER THE SECURITIES

EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302(a) OF THE

SARBANES-OXLEY ACT OF 2002

I, Laura F. Clark certify that:

1. I have reviewed this quarterly report on Form 10-Q of Eagle Bancorp Montana, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent quarter (the registrant's fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 9, 2019
	/s/ Laura F. Clark
	Laura F. Clark
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer)

EX-32.1

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Eagle Bancorp Montana, Inc. (the ‘Company’) on Form 10-Q for the period ended March 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the ‘Report’), we, Peter J. Johnson, Chief Executive Officer of the Company, and Laura F. Clark, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to the undersigned’s best knowledge and belief:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Peter J. Johnson	/s/ Laura F. Clark
Peter J. Johnson	Laura F. Clark
Chief Executive Officer	Chief Financial Officer and Principal Accounting Officer
(Principal Executive Officer)	(Principal Financial Officer)
May 9, 2019	May 9, 2019

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished to the Securities and Exchange Commission and shall not be considered filed as part of the Report.

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 09, 2019
Document Information [Line Items]
Entity Registrant Name	Eagle Bancorp Montana, Inc.
Entity Central Index Key	0001478454
Trading Symbol	ebmt
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Common Stock, Shares Outstanding (in shares)		6,403,693
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

Consolidated Statements of Financial Condition (Current Period Unaudited) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
ASSETS:
Cash due from banks	$ 9,054	$ 10,144
Interest bearing deposits in banks	2,225	1,057
Total cash and cash equivalents	11,279	11,201
Securities available-for-sale, at fair value	140,161	142,165
Federal Home Loan Bank stock	4,807	5,011
Federal Reserve Bank stock	2,040	2,033
Investment in Eagle Bancorp Statutory Trust I	155	155
Mortgage loans held-for-sale, at fair value	8,075	7,318
Loans receivable, net of deferred loan fees of $1,083 at March 31, 2019 and $1,098 at December 31, 2018 and allowance for loan losses of $7,100 at March 31, 2019 and $6,600 at December 31, 2018	720,920	610,333
Accrued interest and dividends receivable	5,005	3,479
Mortgage servicing rights, net	7,318	7,100
Premises and equipment, net	35,364	29,343
Cash surrender value of life insurance, net	23,564	20,545
Real estate and other repossessed assets acquired in settlement of loans, net	354	107
Goodwill	15,710	12,124
Core deposit intangible, net	3,311	1,498
Deferred tax asset, net	1,304	1,190
Other assets	236	301
Total assets	979,603	853,903
LIABILITIES:
Noninterest bearing	180,070	142,788
Interest bearing	560,975	483,823
Total deposits	741,045	626,611
Accrued expenses and other liabilities	9,061	5,388
Federal Home Loan Bank advances and other borrowings	92,313	102,222
Other long-term debt:
Principal amount	25,155	25,155
Unamortized debt issuance costs	(263)	(279)
Total other long-term debt less unamortized debt issuance costs	24,892	24,876
Total liabilities	867,311	759,097
SHAREHOLDERS' EQUITY:
Preferred stock (par value $0.01 per share; 1,000,000 shares authorized; no shares issued or outstanding)	0	0
Common stock (par value $0.01 per share; 8,000,000 shares authorized; 6,714,983 and 5,718,942 shares issued; 6,431,693 and 5,477,652 shares outstanding at March 31, 2019 and December 31, 2018, respectively)	67	57
Additional paid-in capital	68,506	52,051
Unallocated common stock held by Employee Stock Ownership Plan	(435)	(477)
Treasury stock, at cost	(3,372)	(2,640)
Retained earnings	47,512	46,926
Accumulated other comprehensive income (loss), net of tax	14	(1,111)
Total shareholders' equity	112,292	94,806
Total liabilities and shareholders' equity	$ 979,603	$ 853,903

XML

Consolidated Statements of Financial Condition (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Deferred loan fees	$ 1,083	$ 1,098
Allowance for loan losses	$ 7,100	$ 6,600
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	8,000,000	8,000,000
Common stock, shares issued (in shares)	6,714,983	5,718,942
Common stock, shares outstanding (in shares)	6,431,693	5,477,652

XML

Consolidated Statements of Income (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
INTEREST AND DIVIDEND INCOME:
Interest and fees on loans	$ 10,048,000	$ 6,872,000
Securities available-for-sale	958,000	989,000
Federal Home Loan Bank and Federal Reserve Bank dividends	95,000	79,000
Interest on deposits in banks	18,000	17,000
Other interest income	2,000
Total interest and dividend income	11,121,000	7,957,000
INTEREST EXPENSE:
Deposits	787,000	426,000
Federal Home Loan Bank advances and other borrowings	594,000	337,000
Long-term debt	365,000	347,000
Total interest expense	1,746,000	1,110,000
NET INTEREST INCOME	9,375,000	6,847,000
Loan loss provision	604,000	502,000
NET INTEREST INCOME AFTER LOAN LOSS PROVISION	8,771,000	6,345,000
NONINTEREST INCOME:
Net gain on sale of loans	2,599,000	1,439,000
Appreciation in cash surrender value of life insurance	157,000	124,000
Net loss on sale of available-for-sale securities	(55,000)	(105,000)
Net loss on sale of real estate owned and other repossessed property	(37,000)	(25,000)
Other noninterest income	17,000	103,000
Total noninterest income	3,941,000	2,679,000
NONINTEREST EXPENSE:
Salaries and employee benefits	5,992,000	4,909,000
Occupancy and equipment expense	1,034,000	828,000
Data processing	928,000	637,000
Advertising	268,000	278,000
Amortization of mortgage servicing rights	247,000	241,000
Amortization of core deposit intangible and tax credits	254,000	102,000
Loan costs	135,000	136,000
Federal insurance premiums	60,000	69,000
Postage	68,000	50,000
Legal, accounting and examination fees	274,000	142,000
Consulting fees	31,000	17,000
Acquisition costs	1,171,000	234,000
Other noninterest expense	806,000	681,000
Total noninterest expense	11,268,000	8,324,000
INCOME BEFORE INCOME TAXES	1,444,000	700,000
Income tax expense (includes ($67) and ($59) for the three months ended March 31, 2019 and 2018, respectively, related to income tax benefit from reclassification items)	261,000	127,000
NET INCOME	$ 1,183,000	$ 573,000
BASIC EARNINGS PER SHARE (EPS) (in dollars per share)	$ 0.18	$ 0.11
DILUTED EARNINGS PER SHARE (EPS) (in dollars per share)	$ 0.18	$ 0.11
WEIGHTED AVERAGE SHARES OUTSTANDING (BASIC EPS) (in shares)	6,450,326	5,311,527
WEIGHTED AVERAGE SHARES OUTSTANDING (DILUTED EPS) (in shares)	6,510,486	5,375,987
Deposit Account [Member]
NONINTEREST INCOME:
Noninterest income revenue	$ 261,000	$ 226,000
Bank Servicing [Member]
NONINTEREST INCOME:
Noninterest income revenue	612,000	560,000
Investment Advisory, Management and Administrative Service [Member]
NONINTEREST INCOME:
Noninterest income revenue	112,000	132,000
Debit Card [Member]
NONINTEREST INCOME:
Noninterest income revenue	$ 275,000	$ 225,000

XML

Consolidated Statements of Income (Unaudited) (Parentheticals) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Income tax expense, reclassification items	$ (67)	$ (59)

XML

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Net income	$ 1,183	$ 573
OTHER ITEMS OF COMPREHENSIVE INCOME (LOSS) BEFORE TAX:
Change in fair value of investment securities available-for-sale	1,486	(2,583)
Reclassification for net realized losses on investment securities included in income	55	105
Change in fair value of loans held-for-sale	296	262
Reclassification for net realized gains on loans held-for-sale	(309)	(325)
Total other items of comprehensive income (loss)	1,528	(2,541)
Income tax (expense) benefit related to:
Investment securities	(407)	660
Loans held-for-sale	4	17
Total income tax (expense) benefit	(403)	677
COMPREHENSIVE INCOME (LOSS)	$ 2,308	$ (1,291)

XML

Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Unallocated ESOP Shares [Member]	Treasury Stock [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Balance at Dec. 31, 2017		$ 53	$ 42,780	$ (643)	$ (2,826)	$ 43,939	$ 313	$ 83,616
Net income						573		573
Other comprehensive income (loss)							(1,864)	(1,864)
Dividends paid						(492)		(492)
Stock issued in connection with acquisition		4	9,026					9,030
Employee Stock Ownership Plan shares allocated or committed to be released for allocation			43	42				85
Balance at Mar. 31, 2018		57	51,849	(601)	(2,826)	44,020	(1,551)	90,948
Balance at Dec. 31, 2018		57	52,051	(477)	(2,640)	46,926	(1,111)	94,806
Net income						1,183		1,183
Other comprehensive income (loss)							1,125	1,125
Dividends paid						(597)		(597)
Stock issued in connection with acquisition		10	16,425					16,435
Employee Stock Ownership Plan shares allocated or committed to be released for allocation			30	42				72
Treasury stock purchased (42,000 shares at $17.43 average cost per share)					(732)			(732)
Balance at Mar. 31, 2019		$ 67	$ 68,506	$ (435)	$ (3,372)	$ 47,512	$ 14	$ 112,292

XML

Consolidated Statements of Changes in Shareholders' Equity (Unaudited) (Parentheticals) - $ / shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Unallocated ESOP Shares [Member]
ESOP shares allocated or committed to be released for allocation, shares (in shares)	4,154
Dividends paid, per share (in dollars per share)	$ 0.0925	$ 0.09
ESOP shares allocated or committed to be released for allocation, shares (in shares)		4,154
Treasury stock reissued, shares (in shares)	42,000
Treasury stock reissued, cost per share (in dollars per share)	$ 17.43

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 1,183	$ 573
Adjustments to reconcile net income to net cash provided by operating activities:
Loan loss provision	604	502
Depreciation	417	273
Net amortization of investment securities premiums and discounts	280	307
Amortization of mortgage servicing rights	247	241
Amortization of right of use assets	119
Amortization of core deposit intangible and tax credits	254	102
Deferred income tax (benefit) expense	(589)	189
Net gain on sale of loans	(2,599)	(1,439)
Net loss on sale of available-for-sale securities	55	105
Net loss on sale of real estate owned and other repossessed assets	37	25
Net appreciation in cash surrender value of life insurance	(157)	(116)
Net change in:
Accrued interest and dividends receivable	(270)	48
Loans held-for-sale	1,829	1,346
Other assets	353	10
Accrued expenses and other liabilities	(480)	(59)
Net cash provided by operating activities	1,283	2,107
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales	3,900	25,994
Maturities, principal payments and calls	2,919	2,578
Purchases	(1,513)	(27,107)
Federal Home Loan Bank stock redeemed	468	493
Federal Reserve Bank stock purchased	(7)	(554)
Net cash received (paid) for acquisition	6,901	(4,243)
Loan origination and principal collection, net	(22,583)	827
Proceeds from bank owned life insurance		205
Proceeds from sale of real estate and other repossessed assets acquired in settlement of loans	70
Additions to premises and equipment	(1,850)	(4,074)
Net cash used in investing activities	(11,695)	(5,881)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits	21,728	23,181
Net short-term payments on Federal Home Loan Bank and other borrowings	(11,047)	(11,495)
Long-term advances from Federal Home Loan Bank and other borrowings	18,000
Payments on long-term Federal Home Loan Bank and other borrowings	(16,862)	(1,946)
Purchase of treasury stock	(732)
Dividends paid	(597)	(492)
Net cash provided by financing activities	10,490	9,248
NET INCREASE IN CASH AND CASH EQUIVALENTS	78	5,474
CASH AND CASH EQUIVALENTS, beginning of period	11,201	7,437
CASH AND CASH EQUIVALENTS, end of period	11,279	12,911
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for interest	1,613	1,229
Cash paid during the period for income taxes
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Increase (decrease) in fair value of securities available-for-sale	1,541	(2,478)
Mortgage servicing rights recognized	465	276
Right of use assets obtained in exchange for lease liabilities	2,461
Loans transferred to real estate and other assets acquired in foreclosure	131	4
Stock issued in connection with acquisitions	16,435	9,030
Employee Stock Ownership Plan shares released	$ 72	$ 85

XML

Note 1 - Basis of Presentation

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

NOTE

1

.

BASIS OF PRESENTATION

Nature of Operations

Eagle Bancorp Montana, Inc. (“Eagle” or “the Company”), is a Delaware corporation that holds

100.0%

of the capital stock of Opportunity Bank of Montana (“the Bank”), formerly American Federal Savings Bank (“AFSB”). The Bank was founded in

1922

as a Montana-chartered building and loan association and has conducted operations and maintained its administrative office in Helena, Montana since that time. In

1975,

the Bank adopted a federal thrift charter and in

October 2014

converted to a Montana chartered commercial bank and became a member bank in the Federal Reserve System.

On

August 21, 2018,

Eagle entered into an Agreement and Plan of Merger with Big Muddy Bancorp, Inc. (“BMB”), a Montana corporation and BMB’s wholly-owned subsidiary, The State Bank of Townsend (“SBOT”), a Montana chartered commercial bank to acquire

100%

of BMB’s equity voting interests. On

January 1, 2019,

BMB merged with and into Eagle, with Eagle continuing as the surviving corporation. SBOT operated

four

branches in Townsend, Dutton, Denton and Choteau, Montana.

The Bank currently has

22

full service branches. The Bank’s principal business is accepting deposits and, together with funds generated from operations and borrowings, investing in various types of loans and securities. The Bank also operates certain branches under the brand names Dutton State Bank, Farmers State Bank of Denton and The State Bank of Townsend.

Principles of Consolidation

The consolidated financial statements include Eagle, the Bank, Eagle Bancorp Statutory Trust I and AFSB NMTC Investment Fund, LLC. All significant intercompany transactions and balances have been eliminated in consolidation.

Consolidated Financial Statement Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form

10

-Q and Article

10

of Regulation S-

X

as promulgated by the Securities and Exchange Commission (“SEC”). It is recommended that these unaudited interim consolidated financial statements be read in conjunction with the Company’s Annual Report on Form

10

-K with all of the audited information and footnotes required by U.S. GAAP for complete financial statements for the year ended

December 31, 2018,

as filed with the SEC on

March 12, 2019.

In the opinion of management, all normal adjustments and recurring accruals considered necessary for a fair presentation of the financial position and results of operations for the periods presented have been included.

The results of operations for the

three

month period ended

March 31, 2019

are

not

necessarily indicative of the results to be expected for the year ending

December 31, 2019

or any other period.

The Company has evaluated events and transactions subsequent to

March 31, 2019

for recognition and/or disclosure.

XML

Note 2 - Investment Securities

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

NOTE

2

.

INVESTMENT SECURITIES

Investment securities are summarized as follows:

	March 31, 2019									December 31, 2018
			Gross									Gross
	Amortized		Unrealized					Fair		Amortized		Unrealized					Fair
	Cost		Gains		(Losses)			Value		Cost		Gains		(Losses)			Value
	(In Thousands)
Available-for-Sale:
U.S. government and agency obligations	$	9,677	$	94	$	(25	)	$	9,746	$	9,333	$	58	$	(44	)	$	9,347
Municipal obligations		67,172		729		(345	)		67,556		69,024		244		(990	)		68,278
Corporate obligations		11,402		8		(129	)		11,281		11,411		8		(300	)		11,119
Mortgage-backed securities		17,896		75		(285	)		17,686		19,635		86		(373	)		19,348
Collateralized mortgage obligations		24,003		55		(294	)		23,764		24,229		6		(360	)		23,875
Asset-backed securities		10,287		1		(160	)		10,128		10,350		6		(158	)		10,198
Total	$	140,437	$	962	$	(1,238	)	$	140,161	$	143,982	$	408	$	(2,225	)	$	142,165

Proceeds from sales of available-for-sale securities and the associated gross realized gains and losses were as follows:

	Three Months Ended
	March 31,
	2019			2018
	(In Thousands)
Proceeds from sale of available-for-sale securities	$	3,900		$	25,994
Gross realized gain on sale of available-for-sale securities	$	11		$	-
Gross realized loss on sale of available-for-sale securities		(66	)		(105	)
Net realized loss on sale of available-for-sale securities	$	(55	)	$	(105	)

The amortized cost and fair value of securities by contractual maturity are shown below. Expected maturities

may

differ from contractual maturities because borrowers

may

have the right to call or prepay obligations with or without call or prepayment penalties.

	March 31, 2019
	Amortized		Fair
	Cost		Value
	(In Thousands)
Due in one year or less	$	1,495	$	1,495
Due from one to five years		14,929		14,824
Due from five to ten years		14,547		14,751
Due after ten years		67,567		67,641
		98,538		98,711
Mortgage-backed securities		17,896		17,686
Collateralized mortgage obligations		24,003		23,764
Total	$	140,437	$	140,161

Maturities of securities do

not

reflect repricing opportunities present in adjustable rate securities.

At

March 31, 2019

and

December 31, 2018,

securities with a fair value of

$22,877,000

and

$21,408,000,

respectively were pledged to secure public deposits and for other purposes required or permitted by law.

The Company’s investment securities that have been in a continuous unrealized loss position for less than

twelve

months and those that have been in a continuous unrealized loss position for

twelve

or more months were as follows:

	March 31, 2019
	Less Than 12 Months					12 Months or Longer
			Gross					Gross
	Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses
	(In Thousands)
U.S. government and agency	$	1,762	$	(1	)	$	2,308	$	(24	)
Municipal obligations		476		(4	)		22,037		(341	)
Corporate obligations		2,964		(36	)		7,310		(93	)
Mortgage-backed securities and collateralized mortgage obligations		2,392		(25	)		25,292		(554	)
Asset-backed securities		3,873		(70	)		5,283		(90	)
Total	$	11,467	$	(136	)	$	62,230	$	(1,102	)

	December 31, 2018
	Less Than 12 Months					12 Months or Longer
			Gross					Gross
	Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses
U.S. government and agency	$	-	$	-		$	3,385	$	(44	)
Municipal obligations		17,887		(140	)		32,712		(850	)
Corporate obligations		2,890		(110	)		7,220		(190	)
Mortgage-backed securities and collateralized mortgage obligations		5,575		(98	)		22,559		(635	)
Asset-backed securities		8,200		(158	)		-		-
Total	$	34,552	$	(506	)	$	65,876	$	(1,719	)

Management evaluates securities for other-than-temporary impairment at least quarterly, and more frequently when economic or market concerns warrant such evaluation. The unrealized losses associated with these investments are believed to be caused by changing market conditions that are considered to be temporary and the Company does

not

intend to sell the securities, and it is

not

likely to be required to sell these securities prior to maturity. Based on the Company’s evaluation of these securities,

no

other-than-temporary impairment was recorded for the

three

months ended

March 31, 2019,

or

2018.

As of

March 31, 2019

and

December 31, 2018,

there were, respectively,

76

and

108

securities in unrealized loss positions that were considered to be temporarily impaired and therefore an impairment charge has

not

been recorded.

As of

March 31, 2019,

42

U.S. government and agency securities and municipal obligations had unrealized losses with aggregate depreciation of approximately

1.37%

from the Company’s amortized cost basis of these securities. At

December 31, 2018,

74

U.S. government and agency securities and municipal obligations had unrealized losses with aggregate depreciation of approximately

1.88%

from the Company’s amortized cost basis of these securities.

As of

March 31, 2019,

11

corporate obligations had unrealized losses of approximately

1.24%

from the Company’s amortized cost basis of these securities. At

December 31, 2018,

11

corporate obligations had an unrealized loss with aggregate depreciation of approximately

2.88%

from the Company's amortized cost basis of these securities. As management has the ability to hold debt securities until maturity, or for the foreseeable future,

no

declines are deemed to be other than temporary.

As of

March 31, 2019,

19

mortgage-backed securities (“MBSs”) and collateralized mortgage obligations (“CMOs”) had unrealized losses with aggregate depreciation of approximately

2.05%

from the Company’s amortized cost basis of these securities. At

December 31, 2018,

19

MBSs and CMOs had unrealized losses with aggregate depreciation of approximately

2.54%

from the Company’s amortized cost basis of these securities. Management’s analysis as of

March 31, 2019

revealed

no

expected credit losses on the securities and therefore, declines are

not

deemed to be other than temporary.

As of

March 31, 2019,

4

asset-backed securities (“ABSs”) had unrealized losses with aggregate depreciation of approximately

1.72%

from the Company’s amortized cost basis of these securities. At

December 31, 2018,

4

ABSs had unrealized losses with aggregate depreciation of approximately

1.89%

from the Company’s amortized cost basis of these securities. Management’s analysis as of

March 31, 2019

revealed

no

expected credit losses on the securities and therefore, declines are

not

deemed to be other than temporary.   

XML

Note 3 - Loans Receivable

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

NOTE

3

.

LOANS RECEIVABLE

Loans receivable consisted of the following:

	March 31,			December 31,
	2019			2018
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	144,313		$	144,107
Commercial real estate		394,988			328,438
Other loans:
Home equity		54,637			52,159
Consumer		19,043			16,565
Commercial		116,122			76,762
Total		729,103			618,031
Deferred loan fees, net		(1,083	)		(1,098	)
Allowance for loan losses		(7,100	)		(6,600	)
Total loans, net	$	720,920		$	610,333

Within the commercial real estate loan category,

$12,304,000

and

$12,476,000

was guaranteed by the United States Department of Agriculture Rural Development, at

March 31, 2019

and

December 31, 2018,

respectively. The commercial real estate category includes

$5,945,000

and

$2,575,000

of loans guaranteed by the United States Department of Agriculture Farm Service Agency at

March 31, 2019

and

December 31, 2018,

respectively. The commercial category also includes

$1,693,000

and

$1,303,000

of loans guaranteed by the United States Department of Agriculture Farm Service Agency at

March 31, 2019

and

December 31, 2018,

respectively. The United States Department of Agriculture Farm Service Agency guaranteed loans have increased as a result of recent acquisitions.

The following table includes information regarding nonperforming assets.

	March 31,			December 31,
	2019			2018
	(Dollars in Thousands)
Non-accrual loans	$	4,506		$	2,268
Accruing loans delinquent 90 days or more		788			1,477
Restructured loans, net		22			22
Total nonperforming loans		5,316			3,767
Real estate owned and other repossessed assets, net		354			107
Total nonperforming assets	$	5,670		$	3,874
Total nonperforming assets as a percentage of total assets		0.58	%		0.45	%
Allowance for loan losses	$	7,100		$	6,600
Percent of allowance for loan losses to nonperforming loans		133.56	%		175.21	%
Percent of allowance for loan losses to nonperforming assets		125.22	%		170.37	%

Allowance for loan losses activity was as follows:

	Residential		Commercial			Home
	1-4 Family		Real Estate			Equity		Consumer			Commercial			Total
	(In Thousands)
Allowance for loan losses:
Beginning balance, January 1, 2019	$	1,301	$	3,593		$	477	$	190		$	1,039		$	6,600
Charge-offs		-		(20	)		-		(9	)		(95	)		(124	)
Recoveries		-		6			-		6			8			20
Provision		-		344			-		10			250			604
Ending balance, March 31, 2019	$	1,301	$	3,923		$	477	$	197		$	1,202		$	7,100
Ending balance, March 31, 2019 allocated to loans individually evaluated for impairment	$	-	$	-		$	-	$	-		$	-		$	-
Ending balance, March 31, 2019 allocated to loans collectively evaluated for impairment	$	1,301	$	3,923		$	477	$	197		$	1,202		$	7,100
Loans receivable:
Ending balance, March 31, 2019	$	144,313	$	394,988		$	54,637	$	19,043		$	116,122		$	729,103
Ending balance, March 31, 2019 of loans individually evaluated for impairment	$	984	$	1,239		$	433	$	129		$	1,743		$	4,528
Ending balance, March 31, 2019 of loans collectively evaluated for impairment	$	143,329	$	393,749		$	54,204	$	18,914		$	114,379		$	724,575

	Residential		Commercial		Home
	1-4 Family		Real Estate		Equity			Consumer			Commercial			Total
	(In Thousands)
Allowance for loan losses:
Beginning balance, January 1, 2018	$	1,301	$	2,778	$	506		$	225		$	940		$	5,750
Charge-offs		-		-		(80	)		(27	)		(23	)		(130	)
Recoveries		-		3		1			2			2			8
Provision		-		421		-			-			81			502
Ending balance, March 31, 2018	$	1,301	$	3,202	$	427		$	200		$	1,000		$	6,130
Ending balance, March 31, 2018 allocated to loans individually evaluated for impairment	$	-	$	-	$	-		$	4		$	-		$	4
Ending balance, March 31, 2018 allocated to loans collectively evaluated for impairment	$	1,301	$	3,202	$	427		$	196		$	1,000		$	6,126
Loans receivable:
Ending balance, March 31, 2018	$	139,499	$	272,915	$	52,028		$	17,252		$	86,296		$	567,990
Ending balance, March 31, 2018 of loans individually evaluated for impairment	$	1,325	$	1,524	$	241		$	110		$	162		$	3,362
Ending balance, March 31, 2018 of loans collectively evaluated for impairment	$	138,174	$	271,391	$	51,787		$	17,142		$	86,134		$	564,628

Internal classification of the loan portfolio was as follows:

	March 31, 2019
			Special
	Pass		Mention		Substandard		Doubtful		Loss		Total
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	115,611	$	-	$	1,010	$	-	$	-	$	116,621
Residential 1-4 family construction		27,057		-		635		-		-		27,692
Commercial real estate		300,730		1,703		2,428		-		-		304,861
Commercial construction and development		44,998		-		-		-		-		44,998
Farmland		44,844		-		285		-		-		45,129
Other loans:
Home equity		54,204		-		433		-		-		54,637
Consumer		18,872		-		171		-		-		19,043
Commercial		72,876		228		833		-		-		73,937
Agricultural		40,591		-		1,594		-		-		42,185
Total	$	719,783	$	1,931	$	7,389	$	-	$	-	$	729,103

	December 31, 2018
			Special
	Pass		Mention		Substandard		Doubtful		Loss		Total
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	116,065	$	-	$	874	$	-	$	-	$	116,939
Residential 1-4 family construction		26,533		-		635		-		-		27,168
Commercial real estate		252,731		1,731		2,322		-		-		256,784
Commercial construction and development		41,726		-		13		-		-		41,739
Farmland		29,915		-		-		-		-		29,915
Other loans:
Home equity		51,668		-		491		-		-		52,159
Consumer		16,394		-		171		-		-		16,565
Commercial		57,778		950		244		81		-		59,053
Agricultural		17,305		-		404		-		-		17,709
Total	$	610,115	$	2,681	$	5,154	$	81	$	-	$	618,031

Credit risk profile based on payment activity of the loan portfolio was as follows. Nonperforming loans include non-accrual loans and accruing loans delinquent

90

days or more.

	March 31, 2019
			Restructured
	Performing		Loans		Nonperforming		Total
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	116,272	$	-	$	349	$	116,621
Residential 1-4 family construction		27,057		-		635		27,692
Commercial real estate		304,313		-		548		304,861
Commercial construction and development		44,998		-		-		44,998
Farmland		44,213		-		916		45,129
Other loans:
Home equity		54,204		22		411		54,637
Consumer		18,914		-		129		19,043
Commercial		73,119		-		818		73,937
Agricultural		40,697		-		1,488		42,185
Total	$	723,787	$	22	$	5,294	$	729,103

	December 31, 2018
			Restructured
	Performing		Loans		Nonperforming		Total
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	116,556	$	-	$	383	$	116,939
Residential 1-4 family construction		26,534		-		634		27,168
Commercial real estate		255,005		-		1,779		256,784
Commercial construction and development		41,726		-		13		41,739
Farmland		29,915		-		-		29,915
Other loans:
Home equity		51,668		22		469		52,159
Consumer		16,438		-		127		16,565
Commercial		58,745		-		308		59,053
Agricultural		17,677		-		32		17,709
Total	$	614,264	$	22	$	3,745	$	618,031

The following tables include information regarding delinquencies within the loan portfolio.

	March 31, 2019
	Loans Past Due and Still Accruing
			90 Days
	30-89 Days		and				Non-Accrual		Current		Total
	Past Due		Greater		Total		Loans		Loans		Loans
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	937	$	-	$	937	$	349	$	115,335	$	116,621
Residential 1-4 family construction				-		-		635		27,057		27,692
Commercial real estate		181		-		181		548		304,132		304,861
Commercial construction and development		25		-		25		-		44,973		44,998
Farmland		-		225		225		691		44,213		45,129
Other loans:
Home equity		225		-		225		433		53,979		54,637
Consumer		191		-		191		129		18,723		19,043
Commercial		257		-		257		818		72,862		73,937
Agricultural		257		563		820		925		40,440		42,185
Total	$	2,073	$	788	$	2,861	$	4,528	$	721,714	$	729,103

	December 31, 2018
	Loans Past Due and Still Accruing
			90 Days
	30-89 Days		and				Non-Accrual		Current		Total
	Past Due		Greater		Total		Loans		Loans		Loans
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	381	$	130	$	511	$	253	$	116,175	$	116,939
Residential 1-4 family construction		118		-		118		634		26,416		27,168
Commercial real estate		975		1,347		2,322		432		254,030		256,784
Commercial construction and development		9		-		9		13		41,717		41,739
Farmland		-		-		-		-		29,915		29,915
Other loans:
Home equity		39		-		39		491		51,629		52,159
Consumer		135		-		135		127		16,303		16,565
Commercial		284		-		284		308		58,461		59,053
Agricultural		91		-		91		32		17,586		17,709
Total	$	2,032	$	1,477	$	3,509	$	2,290	$	612,232	$	618,031

The following tables include information regarding impaired loans.

	March 31, 2019
			Unpaid
	Recorded		Principal		Related
	Investment		Balance		Allowance
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	349	$	376	$	-
Residential 1-4 family construction		635		685		-
Commercial real estate		548		681		-
Commercial construction and development		-		-		-
Farmland		691		728		-
Other loans:
Home equity		433		462		-
Consumer		129		138		-
Commercial		818		923		-
Agricultural		925		926		-
Total	$	4,528	$	4,919	$	-

	December 31, 2018
			Unpaid
	Recorded		Principal		Related
	Investment		Balance		Allowance
Real estate loans:
Residential 1-4 family	$	253	$	277	$	-
Residential 1-4 family construction		634		684		-
Commercial real estate		432		527		-
Commercial construction and development		13		26		-
Farmland		-		-		-
Other loans:
Home equity		491		522		-
Consumer		127		181		-
Commercial		308		310		-
Agricultural		32		32		-
Total	$	2,290	$	2,559	$	-

	Three Months Ended
	March 31,
	2019		2018
	Average Recorded Investment
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	301	$	672
Residential 1-4 family construction		634		228
Commercial real estate		490		762
Commercial construction and development		7		-
Farmland		346		-
Other loans:
Home equity		462		242
Consumer		128		131
Commercial		563		135
Agricultural		478		-
Total	$	3,409	$	2,170

Interest income recognized on impaired loans for the

three

months ended

March 31, 2019

and

2018

is considered insignificant.

XML

Note 4 - Troubled Debt Restructurings

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Troubled Debt Restructurings [Text Block]

NOTE

4

.

TROUBLE

D

DEBT RESTRUCTURINGS

A troubled debt restructured (“TDR”) loan is a loan in which the Bank grants a concession to the borrower that it would

not

otherwise consider, for reasons related to a borrower's financial difficulties. The loan terms which have been modified or restructured due to a borrower's financial difficulty, include but are

not

limited to a reduction in the stated interest rate; an extension of the maturity at an interest rate below current market rates; a reduction in the face amount of the debt; a reduction in the accrued interest; or re-aging, extensions, deferrals, renewals and rewrites or a combination of these modification methods.

The Company offers a variety of modifications to borrowers. The modification categories offered can generally be described in the following categories:

Rate Modification

– A modification in which the interest rate is changed.

Term Modification

– A modification in which the maturity date, timing of payments, or frequency of payments is changed.

Interest Only Modification

– A modification in which the loan is converted to interest only payments for a period of time.

Payment Modification

– A modification in which the dollar amount of the payment is changed, other than an interest only modification described above.

Combination Modification

– Any other type of modification, including the use of multiple categories above.

During the year ended

December 31, 2018,

there was

one

new restructured loan. The recorded investment at time of restructure was

$23,000

and

no

charge-off was incurred. The loan is a home equity loan and is on non-accrual status. The recorded investment was

$22,000

at

March 31, 2019

and

December 31, 2018.

There were

no

loans modified as a troubled debt restructured loan that defaulted during the quarter ended

March 31, 2019

where the default occurred within

12

months of restructuring. A default for purposes of this disclosure is a troubled debt restructured loan in which the borrower is

90

days past due or results in the foreclosure and repossession of the applicable collateral.

As of

March 31, 2019,

the Company had

no

commitments to lend additional funds to loan customers whose terms had been modified in trouble debt restructures.

XML

Note 5 - Deposits

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Deposit Liabilities Disclosures [Text Block]

NOTE

5

.

DEPOSITS

Deposits are summarized as follows:

	March 31,		December 31,
	2019		2018
	(In Thousands)
Noninterest checking	$	180,070	$	142,788
Interest bearing checking		111,437		105,115
Savings		124,992		108,234
Money market		122,110		108,050
Time certificates of deposit		202,436		162,424
Total	$	741,045	$	626,611

XML

Note 6 - Other Long-term Debt

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Long-term Debt [Text Block]

NOTE

6

.

OTHER

LONG-TERM DEBT

Other long-term debt consisted of the following:

	March 31, 2019					December 31, 2018
			Unamortized					Unamortized
			Debt					Debt
	Principal		Issuance			Principal		Issuance
	Amount		Costs			Amount		Costs
	(In Thousands)
Senior notes fixed at 5.75%, due 2022	$	10,000	$	(125	)	$	10,000	$	(136	)
Subordinated debentures fixed at 6.75%, due 2025		10,000		(138	)		10,000		(143	)
Subordinated debentures variable at 3-Month Libor plus 1.42%, due 2035		5,155		-			5,155		-
Total other long-term debt	$	25,155	$	(263	)	$	25,155	$	(279	)

In

February 2017,

the Company completed the issuance, through a private placement, of

$10,000,000

aggregate principal amount of

5.75%

fixed senior unsecured notes due in

2022.

The interest will be paid semi-annually through maturity date. The notes are

not

subject to redemption at the option of the Company.

In

June 2015,

the Company completed the issuance of

$10,000,000

in aggregate principal amount of subordinated notes due in

2025

in a private placement transaction to an institutional accredited investor. The notes will bear interest at an annual fixed rate of

6.75%

and interest will be paid quarterly through maturity date or earlier redemption.

In

September 2005,

the Company completed the private placement of

$5,155,000

in subordinated debentures to Eagle Bancorp Statutory Trust I (“the Trust”). The Trust funded the purchase of the subordinated debentures through the sale of trust preferred securities to First Tennessee Bank, N.A. with a liquidation value of

$5,155,000.

Using interest payments made by the Company on the debentures, the Trust began paying quarterly dividends to preferred security holders in

December 2005.

The annual percentage rate of the interest payable on the subordinated debentures and distributions payable on the preferred securities was fixed at

6.02%

until

December 2010

then became variable at

3

-Month LIBOR plus

1.42%,

making the rate

4.020%

and

4.228%

as of

March 31, 2019

and

December 31, 2018,

respectively. Dividends on the preferred securities are cumulative and the Trust

may

defer the payments for up to

five

years. The preferred securities mature in

December 2035

unless the Company elects and obtains regulatory approval to accelerate the maturity date.

For the

three

months ended

March 31, 2019

and

2018,

interest expense on other long-term debt was

$365,000

and

$347,000,

respectively.

XML

Note 7 - Earnings Per Share

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Earnings Per Share [Text Block]

NOTE

7

.

EARNINGS PER SHARE

Basic earnings per share for the

three

months ended

March 31, 2019

was computed using

6,450,326

weighted average shares outstanding. Basic earnings per share for the

three

months ended

March 31, 2018

was computed using

5,311,527

weighted average shares outstanding. Diluted earnings per share was computed using the treasury stock method by adjusting the number of shares outstanding by the shares purchased. The weighted average shares outstanding for the diluted earnings per share calculations was

6,510,486

for the

three

months ended

March 31, 2019

and

5,375,987

for the

three

months ended

March 31, 2018.

There were

no

antidilutive shares for the

three

months ended

March 31, 2019

or

2018.

XML

Note 8 - Dividends and Stock Repurchase Program

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

NOTE

8

.

DIVIDENDS AND STOCK REPURCHASE PROGRAM

For the year ended

December 31, 2018,

Eagle paid dividends of

$0.09

per share for the quarters ended

March 31

and

June 30, 2018.

Eagle paid dividends of

$0.0925

per share for the quarters ended

September 30

and

December 31, 2018.

A dividend of

$0.0925

per share was declared on

January 24, 2019

and paid

March 1, 2019

to shareholders of record on

February 8, 2019.

A dividend of

$0.0925

per share was declared on

April 18, 2019,

payable on

June 7, 2019

to shareholders of record on

May 17, 2019.

On

July 19, 2018,

the Board authorized the repurchase of up to

100,000

shares of its common stock. 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.

No

shares were purchased under this plan during the year ended

December 31, 2018.

However, during the

first

quarter of

2019,

42,000

shares were purchased at an average price of

$17.43

per share. In addition,

28,000

shares were purchased during

April 2019

at an average price of

$17.09

per share. The plan expires on

July 19, 2019.

On

July 20, 2017,

the Board authorized the repurchase of up to

100,000

shares of its common stock. Under the plan, shares could be purchased by the Company on the open market or in privately negotiated transactions.

No

shares were purchased under this plan. The plan expired on

July 20, 2018.

XML

Note 9 - Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Comprehensive Income (Loss) Note [Text Block]

NOTE

9

.

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table includes information regarding the activity in accumulated other comprehensive income (loss).

				Unrealized
	Unrealized			(Losses) Gains
	Gains (Losses)			on Investment
	on Loans			Securities
	Held-for-Sale			Available-for-Sale			Total
Balance, January 1, 2019	$	227		$	(1,338	)	$	(1,111	)
Other comprehensive income, before reclassifications and income taxes		296			1,486			1,782
Amounts reclassified from accumulated other comprehensive income (loss), before income taxes		(309	)		55			(254	)
Income tax benefit (expense)		4			(407	)		(403	)
Total other comprehensive (loss) income		(9	)		1,134			1,125
Balance, March 31, 2019	$	218		$	(204	)	$	14
Balance, January 1, 2018	$	234		$	79		$	313
Other comprehensive income (loss), before reclassifications and income taxes		262			(2,583	)		(2,321	)
Amounts reclassified from accumulated other comprehensive income, before income taxes		(325	)		105			(220	)
Income tax benefit		17			660			677
Total other comprehensive loss		(46	)		(1,818	)		(1,864	)
Balance, March 31, 2018	$	188		$	(1,739	)	$	(1,551	)

XML

Note 10 - Derivatives and Hedging Activities

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

NOTE

10

.

DERIVATIVES AND HEDGING ACTIVITIES

Interest Rate Lock

and Forward

Commitments

Outstanding derivative loan commitments expose the Company to the risk that the price of the loans arising from exercise of the loan commitment might decline from inception of the rate lock to funding of the loan due to increases in mortgage interest rates. If interest rates increase, the value of these loan commitments decreases. Conversely, if interest rates decrease, the value of these loan commitments increases. The Company also enters into forward commitments to hedge against adverse price or interest rate movements on loan commitments. The notional amount of forward commitments was

$21,000,000

and

$16,000,000

at

March 31, 2019

and

December 31, 2018,

respectively The notional amount of interest rate lock commitments was

$32,496,000

and

$18,745,000

at

March 31, 2019

and

December 31, 2018,

respectively. The fair value of such commitments was insignificant.

The Company has

no

other off-balance-sheet arrangements or transactions with unconsolidated, special purpose entities that would expose the Company to liability that is

not

reflected on the face of the financial statements.

XML

Note 11 - Fair Value Disclosures

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Fair Value Measurement and Measurement Inputs, Recurring and Nonrecurring [Text Block]

NOTE

11

.

FAIR VALUE DISCLOSURES

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

There are

three

levels of inputs that

may

be used to measure fair values:

Level

1

Inputs

–

Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date, or convert to cash in the short term.

Level

2

Inputs

–

Inputs other than quoted prices included in Level

1

that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are

not

active, inputs other than quoted prices that are observable for the asset or liability (for example, interest rates, volatilities, prepayment speeds, loss severities, credit risks and default rates) or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level

3

Inputs

–

Significant unobservable inputs that reflect an entity’s own assumptions that market participants would use in pricing the assets or liabilities.

A description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

In general, fair value is based upon quoted market prices, where available. If such quoted market prices are

not

available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments

may

be made to ensure that financial instruments are recorded at fair value. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

Available-for-Sale Securities

– Securities classified as available-for-sale are reported at fair value utilizing Level

1

and Level

2

inputs. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that

may

include dealer quotes, market spreads, cash flows, the U. S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayments speeds, credit information and the bond’s terms and conditions, among other things.

Impaired Loans

– Impaired loans are reported at the fair value of the underlying collateral if repayment is expected solely from the collateral. Collateral values are estimated using Level

3

inputs based on internally customized discounting criteria.

Loans Held-for-

Sale

– These loans are reported at fair value. Fair value is determined based on expected proceeds based on sales contracts and commitments and are considered Level

2

inputs.

Repossessed Assets

– Fair values are valued at the time the loan is foreclosed upon and the asset is transferred from loans. The value is based upon primary

third

party appraisals, less costs to sell. The appraisals are generally discounted based on management’s historical knowledge, changes in market conditions from the time of valuation, and/or management’s expertise and knowledge of the client and client’s business. Such discounts are typically significant and result in Level

3

classification of the inputs for determining fair value. Repossessed assets are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on same or similar factors above.

The following tables summarize financial assets and financial liabilities measured at fair value on a recurring basis, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value.

	March 31, 2019
	Level 1		Level 2		Level 3		Total Fair
	Inputs		Inputs		Inputs		Value
	(In Thousands)
Financial assets:
Available-for-sale securities
U.S. government and agency	$	-	$	9,746	$	-	$	9,746
Municipal obligations		-		67,556		-		67,556
Corporate obligations		-		11,281		-		11,281
Mortgage-backed securities		-		17,686		-		17,686
Collateralized mortgage obligations		-		23,764		-		23,764
Asset-backed securities		-		10,128		-		10,128
Loans held-for-sale		-		8,075		-		8,075

	December 31, 2018
	Level 1		Level 2		Level 3		Total Fair
	Inputs		Inputs		Inputs		Value
	(In Thousands)
Financial assets:
Available-for-sale securities
U.S. government and agency	$	-	$	9,347	$	-	$	9,347
Municipal obligations		-		68,278		-		68,278
Corporate obligations		-		11,119		-		11,119
Mortgage-backed securities		-		19,348		-		19,348
Collateralized mortgage obligations		-		23,875		-		23,875
Asset-backed securities		-		10,198		-		10,198
Loans held-for-sale		-		7,318		-		7,318

Certain financial assets and financial liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are

not

measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).

The following table summarizes financial assets and financial liabilities measured at fair value on a nonrecurring basis, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

	March 31, 2019
	Level 1		Level 2		Level 3		Total Fair
	Inputs		Inputs		Inputs		Value
	(In Thousands)
Impaired loans	$	-	$	-	$	4,528	$	4,528
Repossessed assets		-		-		354		354

	December 31, 2018
	Level 1		Level 2		Level 3		Total Fair
	Inputs		Inputs		Inputs		Value
	(In Thousands)
Impaired loans	$	-	$	-	$	2,290	$	2,290
Repossessed assets		-		-		107		107

As of

March 31, 2019,

impaired loans with a carrying value of

$4,528,000

were

not

reduced by specific valuation allowance allocations and therefore resulted in a total reported fair value of

$4,528,000

based on collateral valuations utilizing Level

3

valuation inputs.

As of

December 31, 2018,

impaired loans with a carrying value of

$2,290,000

were

not

reduced by specific valuation allowance allocations and therefore resulted in a total reported fair value of

$2,290,000

based on collateral valuations utilizing Level

3

valuation inputs.

The following table represents the Banks’s Level

3

financial assets and liabilities, the valuation techniques used to measure the fair value of those financial assets and liabilities, and the significant unobservable inputs and the ranges of values for those inputs.

	Fair Value at				Principal		Significant		Range of
	March 31,		December 31,		Valuation		Unobservable		Signficant Input
Instrument	2019		2018		Technique		Inputs		Values
(Dollars In Thousands)
Impaired loans	$	4,528	$	2,290		Appraisal of collateral (1)		Appraisal adjustments		10	-	30%
Repossessed assets	$	354	$	107		Appraisal of collateral (1)(3)		Liquidation expenses (2)		10	-	30%

( 1 )   Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable, less associated allowance.

( 2 )   Appraisals may be adjusted for qualitative factors such as economic conditions and estimated liquidation expenses. The range of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

( 3 )   Includes qualitative adjustments by management and estimated liquidation expenses.

FASB ASC Topic

825

requires disclosure of the fair value of financial instruments, both assets and liabilities recognized and

not

recognized in the statement of financial position, for which it is practicable to estimate fair value. Below is a table that summarizes the fair market values of all financial instruments of the Company at

March 31, 2019

and

December 31, 2018,

followed by methods and assumptions that were used by the Company in estimating the fair value of the classes of financial instruments.

Because broadly traded markets do

not

exist for most of the Company’s financial instruments, the fair value calculations attempt to incorporate the effect of current market conditions at a specific time. These determinations are subjective in nature, involve uncertainties and matters of significant judgment and do

not

include tax ramifications; therefore, the results cannot be determined with precision, substantiated by comparison to independent markets and

may

not

be realized in an actual sale or immediate settlement of the instruments. There

may

be inherent weaknesses in any calculation technique, and changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results. For all of these reasons, the aggregation of the fair value calculations presented herein do

not

represent, and should

not

be construed to represent, the underlying value of the Company.

	March 31, 2019
							Total
	Level 1		Level 2		Level 3		Estimated		Carrying
	Inputs		Inputs		Inputs		Fair Value		Amount
	(In Thousands)
Financial assets:
Cash and cash equivalents	$	11,279	$	-	$	-	$	11,279	$	11,279
Federal Home Loan Bank stock		4,807		-		-		4,807		4,807
Federal Reserve Bank stock		2,040		-		-		2,040		2,040
Loans receivable, net		-		-		722,217		722,217		721,712
Accrued interest and dividends receivable		5,005		-		-		5,005		5,005
Mortgage servicing rights		-		-		8,630		8,630		7,318
Financial liabilities:
Non-maturing interest bearing deposits		-		358,539		-		358,539		358,539
Noninterest bearing deposits		180,070		-		-		180,070		180,070
Time certificates of deposit		-		-		201,019		201,019		202,436
Accrued expenses and other liabilities		9,061		-		-		9,061		9,061
Federal Home Loan Bank advances and other borrowings		-		-		92,175		92,175		92,313
Other long-term debt		-		-		24,294		24,294		25,155
Off-balance-sheet instruments		-
Forward delivery commitments		-		-		-		-		-
Commitments to extend credit		-		-		-		-		-
Rate lock commitments		-		-		-		-		-

	December 31, 2018
							Total
	Level 1		Level 2		Level 3		Estimated		Carrying
	Inputs		Inputs		Inputs		Fair Value		Amount
	(In Thousands)
Financial assets:
Cash and cash equivalents	$	11,201	$	-	$	-	$	11,201	$	11,201
Federal Home Loan Bank stock		5,011		-		-		5,011		5,011
Federal Reserve Bank stock		2,033		-		-		2,033		2,033
Loans receivable, net		-		-		603,361		603,361		608,043
Accrued interest and dividends receivable		3,479		-		-		3,479		3,479
Mortgage servicing rights		-		-		8,670		8,670		7,100
Financial liabilities:
Non-maturing interest bearing deposits		-		321,399		-		321,399		321,399
Noninterest bearing deposits		142,788		-		-		142,788		142,788
Time certificates of deposit		-		-		160,735		160,735		162,424
Accrued expenses and other liabilities		5,388		-		-		5,388		5,388
Federal Home Loan Bank advances and other borrowings		-		-		101,885		101,885		102,222
Other long-term debt		-		-		24,002		24,002		25,155
Off-balance-sheet instruments		-
Forward delivery commitments		-		-		-		-		-
Commitments to extend credit		-		-		-		-		-
Rate lock commitments		-		-		-		-		-

The following methods and assumptions were used by the Company in estimating the fair value of the following classes of financial instruments. However, the Form

10

-K for the year ended

December 31, 2018

provides additional description of valuation methodologies used in estimating fair value of these financial instruments.

Cash,

I

nterest

B

earing

A

ccounts,

A

ccrued

I

nterest and

D

ividend

R

eceivable and

A

ccrued

E

xpenses and

O

ther

L

iabilities

– The carrying amounts approximate fair value due to the relatively short period of time between the origination of these instruments and their expected realization.

Stock in the F

ederal Home

L

oan

B

ank of Des Moines (“FHLB”)

and F

ederal

R

eserve

B

ank (“FRB”)

– The fair value of stock approximates redemption value.

Loans

R

eceivable

– Fair values are estimated by stratifying the loan portfolio into groups of loans with similar financial characteristics. Loans are segregated by type such as real estate, commercial, and consumer, with each category further segmented into fixed and adjustable rate interest terms. For mortgage loans, the Company uses the secondary market rates in effect for loans that have similar characteristics. The fair value of other fixed rate loans is calculated by discounting scheduled cash flows through the anticipated maturities adjusted for prepayment estimates. Adjustable interest rate loans are assumed to approximate fair value because they generally reprice within the short term.

Fair values are adjusted for credit risk based on assessment of risk identified with specific loans, and risk adjustments on the remaining portfolio based on credit loss experience.

Mortgage

S

ervicing

R

ights

– the fair value of servicing rights was determined at loan level using a discount rate of

12.00%

for all investor types and prepayment speeds ranging from

89.00%

to

239.00%

PSA (Public Securities Association prepayment model), depending on the interest rate and term of the specific loan. The weighted average prepayment speed was

113.00%

PSA. Individual mortgage servicing rights values were capped at a maximum of

1.25%

for all investor types.

Deposits and Time C

ertificates of

D

eposit

– The fair value of deposits with

no

stated maturity, such as checking, passbook, and money market, is equal to the amount payable on demand. The fair value of time certificates of deposit is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar maturities.

Advances from the FHLB

/Other Borrowings

and

Other Long-Term

Deb

t

– The fair value of the Company’s advances and debentures are estimated using discounted cash flow analysis based on the interest rate that would be effective

March 31, 2019

and

December 31, 2018,

respectively if the borrowings repriced according to their stated terms.

Off-

B

alance-

S

heet

I

nstruments

- Fair values for off-balance-sheet, credit-related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. The fair values of these financial instruments are considered insignificant. Additionally, those financial instruments have

no

carrying value.

XML

Note 12 - Mergers and Acquisitions

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Business Combination Disclosure [Text Block]

NOTE

12

. MERGERS AND ACQUISITIONS

Effective

January 1, 2019,

Eagle completed its previously announced merger with BMB, pursuant to an Agreement and Plan of Merger, dated as of

August 21, 2018,

by and among Eagle, Opportunity Bank of Montana, BMB and BMB’s wholly-owned subsidiary, SBOT, a Montana chartered commercial bank. BMB merged with and into Eagle, with Eagle continuing as the surviving corporation. SBOT operated

four

branches in Townsend, Dutton, Denton and Choteau, Montana. The transaction provided an opportunity to expand market presence and lending activities, throughout the state. The acquisition closed after receipt of approvals from regulatory authorities, approval of BMB shareholders and the satisfaction of other closing conditions. The total consideration paid was

$16,436,000

and included cash consideration of

$1,000

and common stock issued of

$16,435,000.

On

September 5, 2017,

the Company entered into an Agreement and Plan of Merger with TwinCo, a Montana corporation, and TwinCo’s wholly-owned subsidiary, Ruby Valley Bank, a Montana chartered commercial bank to acquire

100%

of TwinCo’s equity voting interests. The merger agreement provided that Ruby Valley Bank would merge with and into Opportunity Bank of Montana and that TwinCo would merge with and into the Company. Ruby Valley Bank operated

2

branches in Madison County, Montana. The transaction provided an opportunity to expand market presence and lending activities, particularly in agricultural lending. The acquisition closed

January 31, 2018,

after receipt of approvals from regulatory authorities, approval of TwinCo shareholders and the satisfaction of other closing conditions. The total consideration paid was

$18,930,000

and included cash consideration of

$9,900,000

and common stock issued of

$9,030,000.

These transactions were accounted for under the acquisition method of accounting in accordance with FASB ASC

805,

Business Combinations. In business combination transactions in which the consideration given is

not

in the form of cash (that is, in the form of non-cash assets, liabilities incurred, or equity interests issued), measurement of the acquisition consideration is based on the fair value of the consideration given or the fair value of the asset (or net assets) acquired, whichever is more clearly evident and, thus, a more reliable measure.

Under FASB ASC

805,

all of the assets acquired and liabilities assumed in a business combination are recognized at acquisition at their acquisition-date fair value, while transaction costs and restructuring costs associated with the business combination are expensed as incurred. The excess of the acquisition consideration over the fair value of assets acquired and liabilities assumed, if any, is allocated to goodwill. Goodwill recorded in the acquisitions was accounted for in accordance with the authoritative business combination guidance. Accordingly, goodwill will

not

be amortized, but will be tested for impairment annually. The goodwill recorded is

not

deductible for federal income tax purposes.

The assets acquired and liabilities assumed were recorded on the consolidated statement of financial condition at estimated fair value on acquisition date. The following table summarizes the fair values of the assets acquired and liabilities assumed, consideration paid and the resulting goodwill. Amounts are considered provisional due to the timing of the acquisition.

	BMB		TwinCo
	January 1,		January 31,
	2019		2018
	(In Thousands)
Assets acquired:
Cash and cash equivalents	$	6,902	$	5,657
Investment securities		2,096		30,728
Loans		89,204		55,057
Premises and equipment		2,246		1,605
Cash surrender value of life insurance		2,862		-
Other real estate owned		223		135
Core deposit intangible		1,988		1,609
Other assets		1,995		1,258
Total assets acquired	$	107,516	$	96,049
Liabilities assumed:
Deposits	$	92,706	$	82,190
Accrued expenses and other liabilities		1,960		19
Total liabilities assumed	$	94,666	$	82,209
Net assets acquired	$	12,850	$	13,840
Consideration paid:
Cash	$	1	$	9,900
Common stock issued (996,041 shares BMB and 446,774 shares TwinCo)		16,435		9,030
Total consideration paid	$	16,436	$	18,930
Goodwill resulting from acquisition	$	3,586	$	5,090

For both the BMB and TwinCo acquisitions, the fair value analysis of the loan portfolios resulted in a valuation adjustment for each loan based on an amortization schedule of expected cash flow. Individual amortization schedules were used for each loan over a certain amount and those with specifically identified loss exposure. The remainder of the loans were grouped by type and risk rating into loan pools (based on loans type, fixed or variable interest rate, revolving or term payments and risk rating). Yield inputs for the amortization schedules included contractual interest rates, estimated prepayment speeds, liquidity adjustments and market yields. Credit inputs for the amortization schedules included probability of payment default, loss given default rates and individually identified loss exposure.

The total discount on BMB acquired loans was

$2,813,000

as of

January 1, 2019.

During the quarter ended

March 31, 2019,

accretion of the loan discount was

$439,000.

The remaining loan discount was

$2,374,000

as of

March 31, 2019.

The total discount on TwinCo acquired loans was

$1,834,000

as of

January 31, 2018.

During the quarter ended

March 31, 2019,

accretion of the loan discount was

$81,000.

During the year ended

December 31, 2018,

accretion of the loan discount was

$589,000.

The remaining loan discount was

$1,164,000

as of

March 31, 2019.

Four impaired loans were acquired through the BMB acquisition with a balance of

$556,000

as of

January 1, 2019.

The balance of the loans as of

March 31, 2019

was

$544,000.

Two impaired loans were acquired through the TwinCo acquisition with a balance of

$1,188,000

as of

January 31, 2018.

The balance of the loans as of

March 31, 2019

was

$1,166,000.

Acquired impaired loans are considered immaterial for separate disclosure in Note

3.

Loans Receivable. The amounts recognized for loans have been determined provisionally due to the timing of the transaction.

Core deposit intangible assets of

$1,988,000

were recorded for BMB and are being amortized using an accelerated method over the estimated useful lives of the related deposits of

10

years. The amounts recognized for deposits have been determined provisionally due to the timing of the transaction. Core deposit intangible assets of

$1,609,000

were recorded for TwinCo and are being amortized using an accelerated method over the estimated useful lives of the related deposits of

10

years.

For both the BMB and TwinCo acquisition, the core deposit intangible value is a function of the difference between the cost of the acquired core deposits and the alternative cost of funds. These cash flow streams were discounted to present value. The fair value of other deposit accounts acquired were valued by estimating future cash flows to be received or paid from individual or homogenous groups of assets and liabilities and then discounting those cash flows to a present value using rates of return that were available in financial markets for similar financial instruments on or near the acquisition date.

Direct costs related to the acquisitions were expensed as incurred. The Company recorded acquisition costs related to BMB of

$1,171,000

during the quarter ended

March 31, 2019

and

$804,000

during the year ended

December 31, 2018.

The Company recorded acquisition costs related to the TwinCo acquisition of

$131,000

during the quarter ended

June 30, 2018,

$234,000

during the quarter ended

March 31, 2018

and

$676,000

during the year ended

December 31, 2017.

Acquisition costs included legal and professional fees and data processing expenses incurred related to the acquisitions.

Operations of BMB have been included in the consolidated financial statements since

January 1, 2019.

The Company does

not

consider BMB a separate reporting segment and does

not

track the amount of revenues and net income attributable to BMB since acquisition. As such, it is impracticable to determine such amounts for the period from

January 1, 2019

through

March 

31,

2019.

Operations of TwinCo have been included in the consolidated financial statements since

February 1, 2018.

The Company does

not

consider TwinCo a separate reporting segment and does

not

track the amount of revenues and net income attributable to TwinCo since acquisition. As such, it is impracticable to determine such amounts for the period from

February 1, 2018

through

March 

31,

2019.

The accompanying consolidated statements of income include the results of operations of the BMB acquired entity since the

January 1, 2019

acquisition date. The following table presents unaudited pro forma results of operations for the

three

months ended

March 31, 2019

and

2018

as if the acquisition had occurred on

January 1, 2018.

This pro forma information gives effect to certain adjustments, including purchase accounting fair value adjustments and amortization of the core deposit intangible asset. The pro forma information does

not

necessarily reflect the results of operations that would have occurred had the Company purchased and assumed the assets and liabilities of BMB on

January 1, 2018.

Cost savings are also

not

reflected in the unaudited pro forma amounts for the

three

months ended

March 31, 2019

and

2018.

	Three Months Ended
	March 31,
	2019		2018
	(In Thousands)
Pro forma net income 1)
Net interest income after loan loss provision	$	8,771	$	7,520
Noninterest income		3,941		2,895
Noninterest expense		11,268		9,433
Income before income taxes 1)		1,444		982
Income tax expense		289		197
Net income 1)	$	1,155	$	785
Pro forma earnings per share 1)
Basic earnings per share	$	0.18	$	0.21
Diluted earnings per share	$	0.18	$	0.20
Weighted average shares outstanding, basic		6,450,326		3,811,409
Weighted average shares outstanding, diluted		6,510,486		3,875,677

1 ) Significant assumptions utilized include the acquisition cost noted above, accretion of interest rate fair value adjustments and a 20% effective tax rate.

XML

Note 13 - Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

NOTE

13

.

RECENT ACCOUNTING PRONOUNCEMENTS

In

May 2014,

the FASB issued ASU

No.

2014

-

09,

Revenue from Contracts with Customers (Topic

606

). This guidance is a comprehensive new revenue recognition standard that supersedes substantially all existing revenue recognition guidance. The new standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under existing guidance. These

may

include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. In

July 2015,

the FASB agreed to delay the effective date of the standard by

one

year. Therefore, the new standard was effective in the

first

quarter of

2018.

The adoption of the standard in the

first

quarter of

2018

did

not

have a significant impact on our consolidated financial statements.

In

January 2016,

the FASB issued ASU

No.

2016

-

01,

Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities (Subtopic

825

-

10

). The amendment has a number of provisions including the requirements that public business entities use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, a separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e. securities or loans receivables), and eliminating the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. The amendment was effective for annual and interim reporting periods beginning after

December 15, 2017

and was adopted by the Company in the

first

quarter of

2018.

Note

11.

Fair Value Disclosures reflects the provisions of this pronouncement and did

not

have a significant impact on our consolidated financial statements.

In

February 2016,

the FASB issued ASU

No.

2016

-

02,

Leases (Topic

842

) intended to improve financial reporting regarding leasing transactions. The new standard affects all companies and organizations that lease assets. The standard requires organizations to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases if the lease terms are more than

12

months. The guidance also requires qualitative and quantitative disclosures providing additional information about the amounts recorded in the financial statements. The amendments in this update were effective for fiscal years beginning after

December 15, 2018,

including interim periods within those fiscal years and was adopted by the Company in the

first

quarter of

2019.

The adoption of the standard did

not

have a significant impact on our consolidated financial statements. The Company’s operating leases primarily relate to branch locations. We currently lease

six

locations that are full-service branches and

one

mortgage lending branch. The leases expire on various dates through

2028.

As a result of adopting the lease standard on

January 1, 2019,

the Company recorded right of use assets of

$2,461,000

and corresponding lease liabilities. The right of use assets are included in premises and equipment, net and the lease liabilities are included in accrued expenses and other liabilities on the consolidated statement of financial condition.

In

September 2016,

the FASB issued ASU

No.

2016

-

13,

Financial Instruments – Credit Losses (Topic

326

) intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The standard requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. The standard also requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. Additionally, the standard amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. 

The amendments in this update are effective for fiscal years beginning after

December 15, 2019,

including interim periods within those fiscal years. All entities

may

adopt the amendments in this update earlier as of the fiscal years beginning after

December 15, 2018,

including interim periods within those fiscal years. An entity will apply the amendments in this update through a cumulative-effect adjustment to retained earnings as of the beginning of the

first

reporting period in which the guidance is effective (that is, a modified-retrospective approach). 

The Company believes the amendments in this update will have an impact on the Company’s consolidated financial statements and is working to evaluate the significance of that impact. In that regard, we have established a working group under the direction of our Chief Financial Officer and Chief Credit Officer. The group is composed of individuals from the finance and credit administration areas of the Company. We are currently developing an implementation plan, including assessment of processes, segmentation of the loan portfolio and identifying and adding data fields necessary for analysis. The adoption of this standard is likely to result in an increase in the allowance for loan and lease losses as a result of changing from an “incurred loss” model to an “expected loss” model. While we currently cannot reasonably estimate the impact of adopting this standard, we expect the impact will be influenced by the composition, characteristics and quality of our loan and securities portfolios, as well as the general economic conditions and forecasts as of the adoption date.

In

January 2017,

the FASB issued ASU

No.

2017

-

04,

Intangibles – Goodwill and Other (Topic

350

) to amend and simplify current goodwill impairment testing to eliminate Step

2

from the current provisions. Under the new guidance, an entity should perform the goodwill impairment test by comparing the fair value of a reporting unit with its carrying value and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if a quantitative impairment test is necessary. The guidance will be effective for the Company on

January 1, 2020

and is

not

expected to have a significant impact on the Company’s consolidated financial statements.

In

March 2017,

the FASB issued ASU

No.

2017

-

08,

Receivables–Nonrefundable Fees and Other Costs (Subtopic

310

-

20

) to shorten the amortization period for certain purchased callable debt securities held at a premium to the earliest call date. Currently, entities generally amortize the premium as a yield adjustment over the contractual life of the security. The guidance does

not

change the accounting for callable debt securities held at a discount. For public business entities, the guidance is effective for fiscal years beginning after

December 15, 2018,

and interim periods within those fiscal years. The adoption of this standard in the

first

quarter of

2019

did

not

have a significant impact on our consolidated financial statements, as we typically do

not

invest in these types of securities.

XML

Note 14 - Subsequent Events

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Subsequent Events [Text Block]

NOTE

14

. SUBSEQUENT EVENTS

As disclosed in our Form

8

-K filed

April 23, 2019,

the number of authorized shares of common stock,

$0.01

par value per share was increased from

8,000,000

shares to

20,000,000

shares.

In addition, See Note

8.

Dividends and Stock Repurchase Program for subsequent event regarding repurchase of common stock during

2019.

XML

Note 2 - Investment Securities (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Marketable Securities [Table Text Block]

	March 31, 2019									December 31, 2018
			Gross									Gross
	Amortized		Unrealized					Fair		Amortized		Unrealized					Fair
	Cost		Gains		(Losses)			Value		Cost		Gains		(Losses)			Value
	(In Thousands)
Available-for-Sale:
U.S. government and agency obligations	$	9,677	$	94	$	(25	)	$	9,746	$	9,333	$	58	$	(44	)	$	9,347
Municipal obligations		67,172		729		(345	)		67,556		69,024		244		(990	)		68,278
Corporate obligations		11,402		8		(129	)		11,281		11,411		8		(300	)		11,119
Mortgage-backed securities		17,896		75		(285	)		17,686		19,635		86		(373	)		19,348
Collateralized mortgage obligations		24,003		55		(294	)		23,764		24,229		6		(360	)		23,875
Asset-backed securities		10,287		1		(160	)		10,128		10,350		6		(158	)		10,198
Total	$	140,437	$	962	$	(1,238	)	$	140,161	$	143,982	$	408	$	(2,225	)	$	142,165

Schedule of Realized Gain (Loss) [Table Text Block]

	Three Months Ended
	March 31,
	2019			2018
	(In Thousands)
Proceeds from sale of available-for-sale securities	$	3,900		$	25,994
Gross realized gain on sale of available-for-sale securities	$	11		$	-
Gross realized loss on sale of available-for-sale securities		(66	)		(105	)
Net realized loss on sale of available-for-sale securities	$	(55	)	$	(105	)

Investments Classified by Contractual Maturity Date [Table Text Block]

	March 31, 2019
	Amortized		Fair
	Cost		Value
	(In Thousands)
Due in one year or less	$	1,495	$	1,495
Due from one to five years		14,929		14,824
Due from five to ten years		14,547		14,751
Due after ten years		67,567		67,641
		98,538		98,711
Mortgage-backed securities		17,896		17,686
Collateralized mortgage obligations		24,003		23,764
Total	$	140,437	$	140,161

Schedule of Unrealized Loss on Investments [Table Text Block]

	March 31, 2019
	Less Than 12 Months					12 Months or Longer
			Gross					Gross
	Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses
	(In Thousands)
U.S. government and agency	$	1,762	$	(1	)	$	2,308	$	(24	)
Municipal obligations		476		(4	)		22,037		(341	)
Corporate obligations		2,964		(36	)		7,310		(93	)
Mortgage-backed securities and collateralized mortgage obligations		2,392		(25	)		25,292		(554	)
Asset-backed securities		3,873		(70	)		5,283		(90	)
Total	$	11,467	$	(136	)	$	62,230	$	(1,102	)

	December 31, 2018
	Less Than 12 Months					12 Months or Longer
			Gross					Gross
	Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses
U.S. government and agency	$	-	$	-		$	3,385	$	(44	)
Municipal obligations		17,887		(140	)		32,712		(850	)
Corporate obligations		2,890		(110	)		7,220		(190	)
Mortgage-backed securities and collateralized mortgage obligations		5,575		(98	)		22,559		(635	)
Asset-backed securities		8,200		(158	)		-		-
Total	$	34,552	$	(506	)	$	65,876	$	(1,719	)

XML

Note 3 - Loans Receivable (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

	March 31,			December 31,
	2019			2018
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	144,313		$	144,107
Commercial real estate		394,988			328,438
Other loans:
Home equity		54,637			52,159
Consumer		19,043			16,565
Commercial		116,122			76,762
Total		729,103			618,031
Deferred loan fees, net		(1,083	)		(1,098	)
Allowance for loan losses		(7,100	)		(6,600	)
Total loans, net	$	720,920		$	610,333

Schedule of Information Regarding Non-performing Assets [Table Text Block]

	March 31,			December 31,
	2019			2018
	(Dollars in Thousands)
Non-accrual loans	$	4,506		$	2,268
Accruing loans delinquent 90 days or more		788			1,477
Restructured loans, net		22			22
Total nonperforming loans		5,316			3,767
Real estate owned and other repossessed assets, net		354			107
Total nonperforming assets	$	5,670		$	3,874
Total nonperforming assets as a percentage of total assets		0.58	%		0.45	%
Allowance for loan losses	$	7,100		$	6,600
Percent of allowance for loan losses to nonperforming loans		133.56	%		175.21	%
Percent of allowance for loan losses to nonperforming assets		125.22	%		170.37	%

Financing Receivable, Allowance for Credit Loss [Table Text Block]

	Residential		Commercial			Home
	1-4 Family		Real Estate			Equity		Consumer			Commercial			Total
	(In Thousands)
Allowance for loan losses:
Beginning balance, January 1, 2019	$	1,301	$	3,593		$	477	$	190		$	1,039		$	6,600
Charge-offs		-		(20	)		-		(9	)		(95	)		(124	)
Recoveries		-		6			-		6			8			20
Provision		-		344			-		10			250			604
Ending balance, March 31, 2019	$	1,301	$	3,923		$	477	$	197		$	1,202		$	7,100
Ending balance, March 31, 2019 allocated to loans individually evaluated for impairment	$	-	$	-		$	-	$	-		$	-		$	-
Ending balance, March 31, 2019 allocated to loans collectively evaluated for impairment	$	1,301	$	3,923		$	477	$	197		$	1,202		$	7,100
Loans receivable:
Ending balance, March 31, 2019	$	144,313	$	394,988		$	54,637	$	19,043		$	116,122		$	729,103
Ending balance, March 31, 2019 of loans individually evaluated for impairment	$	984	$	1,239		$	433	$	129		$	1,743		$	4,528
Ending balance, March 31, 2019 of loans collectively evaluated for impairment	$	143,329	$	393,749		$	54,204	$	18,914		$	114,379		$	724,575

	Residential		Commercial		Home
	1-4 Family		Real Estate		Equity			Consumer			Commercial			Total
	(In Thousands)
Allowance for loan losses:
Beginning balance, January 1, 2018	$	1,301	$	2,778	$	506		$	225		$	940		$	5,750
Charge-offs		-		-		(80	)		(27	)		(23	)		(130	)
Recoveries		-		3		1			2			2			8
Provision		-		421		-			-			81			502
Ending balance, March 31, 2018	$	1,301	$	3,202	$	427		$	200		$	1,000		$	6,130
Ending balance, March 31, 2018 allocated to loans individually evaluated for impairment	$	-	$	-	$	-		$	4		$	-		$	4
Ending balance, March 31, 2018 allocated to loans collectively evaluated for impairment	$	1,301	$	3,202	$	427		$	196		$	1,000		$	6,126
Loans receivable:
Ending balance, March 31, 2018	$	139,499	$	272,915	$	52,028		$	17,252		$	86,296		$	567,990
Ending balance, March 31, 2018 of loans individually evaluated for impairment	$	1,325	$	1,524	$	241		$	110		$	162		$	3,362
Ending balance, March 31, 2018 of loans collectively evaluated for impairment	$	138,174	$	271,391	$	51,787		$	17,142		$	86,134		$	564,628

Financing Receivable Credit Quality Indicators [Table Text Block]

	March 31, 2019
			Special
	Pass		Mention		Substandard		Doubtful		Loss		Total
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	115,611	$	-	$	1,010	$	-	$	-	$	116,621
Residential 1-4 family construction		27,057		-		635		-		-		27,692
Commercial real estate		300,730		1,703		2,428		-		-		304,861
Commercial construction and development		44,998		-		-		-		-		44,998
Farmland		44,844		-		285		-		-		45,129
Other loans:
Home equity		54,204		-		433		-		-		54,637
Consumer		18,872		-		171		-		-		19,043
Commercial		72,876		228		833		-		-		73,937
Agricultural		40,591		-		1,594		-		-		42,185
Total	$	719,783	$	1,931	$	7,389	$	-	$	-	$	729,103

	December 31, 2018
			Special
	Pass		Mention		Substandard		Doubtful		Loss		Total
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	116,065	$	-	$	874	$	-	$	-	$	116,939
Residential 1-4 family construction		26,533		-		635		-		-		27,168
Commercial real estate		252,731		1,731		2,322		-		-		256,784
Commercial construction and development		41,726		-		13		-		-		41,739
Farmland		29,915		-		-		-		-		29,915
Other loans:
Home equity		51,668		-		491		-		-		52,159
Consumer		16,394		-		171		-		-		16,565
Commercial		57,778		950		244		81		-		59,053
Agricultural		17,305		-		404		-		-		17,709
Total	$	610,115	$	2,681	$	5,154	$	81	$	-	$	618,031

	March 31, 2019
			Restructured
	Performing		Loans		Nonperforming		Total
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	116,272	$	-	$	349	$	116,621
Residential 1-4 family construction		27,057		-		635		27,692
Commercial real estate		304,313		-		548		304,861
Commercial construction and development		44,998		-		-		44,998
Farmland		44,213		-		916		45,129
Other loans:
Home equity		54,204		22		411		54,637
Consumer		18,914		-		129		19,043
Commercial		73,119		-		818		73,937
Agricultural		40,697		-		1,488		42,185
Total	$	723,787	$	22	$	5,294	$	729,103

	December 31, 2018
			Restructured
	Performing		Loans		Nonperforming		Total
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	116,556	$	-	$	383	$	116,939
Residential 1-4 family construction		26,534		-		634		27,168
Commercial real estate		255,005		-		1,779		256,784
Commercial construction and development		41,726		-		13		41,739
Farmland		29,915		-		-		29,915
Other loans:
Home equity		51,668		22		469		52,159
Consumer		16,438		-		127		16,565
Commercial		58,745		-		308		59,053
Agricultural		17,677		-		32		17,709
Total	$	614,264	$	22	$	3,745	$	618,031

Financing Receivable, Past Due [Table Text Block]

	March 31, 2019
	Loans Past Due and Still Accruing
			90 Days
	30-89 Days		and				Non-Accrual		Current		Total
	Past Due		Greater		Total		Loans		Loans		Loans
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	937	$	-	$	937	$	349	$	115,335	$	116,621
Residential 1-4 family construction				-		-		635		27,057		27,692
Commercial real estate		181		-		181		548		304,132		304,861
Commercial construction and development		25		-		25		-		44,973		44,998
Farmland		-		225		225		691		44,213		45,129
Other loans:
Home equity		225		-		225		433		53,979		54,637
Consumer		191		-		191		129		18,723		19,043
Commercial		257		-		257		818		72,862		73,937
Agricultural		257		563		820		925		40,440		42,185
Total	$	2,073	$	788	$	2,861	$	4,528	$	721,714	$	729,103

	December 31, 2018
	Loans Past Due and Still Accruing
			90 Days
	30-89 Days		and				Non-Accrual		Current		Total
	Past Due		Greater		Total		Loans		Loans		Loans
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	381	$	130	$	511	$	253	$	116,175	$	116,939
Residential 1-4 family construction		118		-		118		634		26,416		27,168
Commercial real estate		975		1,347		2,322		432		254,030		256,784
Commercial construction and development		9		-		9		13		41,717		41,739
Farmland		-		-		-		-		29,915		29,915
Other loans:
Home equity		39		-		39		491		51,629		52,159
Consumer		135		-		135		127		16,303		16,565
Commercial		284		-		284		308		58,461		59,053
Agricultural		91		-		91		32		17,586		17,709
Total	$	2,032	$	1,477	$	3,509	$	2,290	$	612,232	$	618,031

Impaired Financing Receivables [Table Text Block]

	March 31, 2019
			Unpaid
	Recorded		Principal		Related
	Investment		Balance		Allowance
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	349	$	376	$	-
Residential 1-4 family construction		635		685		-
Commercial real estate		548		681		-
Commercial construction and development		-		-		-
Farmland		691		728		-
Other loans:
Home equity		433		462		-
Consumer		129		138		-
Commercial		818		923		-
Agricultural		925		926		-
Total	$	4,528	$	4,919	$	-

	December 31, 2018
			Unpaid
	Recorded		Principal		Related
	Investment		Balance		Allowance
Real estate loans:
Residential 1-4 family	$	253	$	277	$	-
Residential 1-4 family construction		634		684		-
Commercial real estate		432		527		-
Commercial construction and development		13		26		-
Farmland		-		-		-
Other loans:
Home equity		491		522		-
Consumer		127		181		-
Commercial		308		310		-
Agricultural		32		32		-
Total	$	2,290	$	2,559	$	-

	Three Months Ended
	March 31,
	2019		2018
	Average Recorded Investment
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	301	$	672
Residential 1-4 family construction		634		228
Commercial real estate		490		762
Commercial construction and development		7		-
Farmland		346		-
Other loans:
Home equity		462		242
Consumer		128		131
Commercial		563		135
Agricultural		478		-
Total	$	3,409	$	2,170

XML

Note 5 - Deposits (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Deposit Liabilities, Type [Table Text Block]

	March 31,		December 31,
	2019		2018
	(In Thousands)
Noninterest checking	$	180,070	$	142,788
Interest bearing checking		111,437		105,115
Savings		124,992		108,234
Money market		122,110		108,050
Time certificates of deposit		202,436		162,424
Total	$	741,045	$	626,611

XML

Note 6 - Other Long-term Debt (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Long-term Debt Instruments [Table Text Block]

	March 31, 2019					December 31, 2018
			Unamortized					Unamortized
			Debt					Debt
	Principal		Issuance			Principal		Issuance
	Amount		Costs			Amount		Costs
	(In Thousands)
Senior notes fixed at 5.75%, due 2022	$	10,000	$	(125	)	$	10,000	$	(136	)
Subordinated debentures fixed at 6.75%, due 2025		10,000		(138	)		10,000		(143	)
Subordinated debentures variable at 3-Month Libor plus 1.42%, due 2035		5,155		-			5,155		-
Total other long-term debt	$	25,155	$	(263	)	$	25,155	$	(279	)

XML

Note 9 - Accumulated Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

				Unrealized
	Unrealized			(Losses) Gains
	Gains (Losses)			on Investment
	on Loans			Securities
	Held-for-Sale			Available-for-Sale			Total
Balance, January 1, 2019	$	227		$	(1,338	)	$	(1,111	)
Other comprehensive income, before reclassifications and income taxes		296			1,486			1,782
Amounts reclassified from accumulated other comprehensive income (loss), before income taxes		(309	)		55			(254	)
Income tax benefit (expense)		4			(407	)		(403	)
Total other comprehensive (loss) income		(9	)		1,134			1,125
Balance, March 31, 2019	$	218		$	(204	)	$	14
Balance, January 1, 2018	$	234		$	79		$	313
Other comprehensive income (loss), before reclassifications and income taxes		262			(2,583	)		(2,321	)
Amounts reclassified from accumulated other comprehensive income, before income taxes		(325	)		105			(220	)
Income tax benefit		17			660			677
Total other comprehensive loss		(46	)		(1,818	)		(1,864	)
Balance, March 31, 2018	$	188		$	(1,739	)	$	(1,551	)

XML

Note 11 - Fair Value Disclosures (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

	March 31, 2019
	Level 1		Level 2		Level 3		Total Fair
	Inputs		Inputs		Inputs		Value
	(In Thousands)
Financial assets:
Available-for-sale securities
U.S. government and agency	$	-	$	9,746	$	-	$	9,746
Municipal obligations		-		67,556		-		67,556
Corporate obligations		-		11,281		-		11,281
Mortgage-backed securities		-		17,686		-		17,686
Collateralized mortgage obligations		-		23,764		-		23,764
Asset-backed securities		-		10,128		-		10,128
Loans held-for-sale		-		8,075		-		8,075

	December 31, 2018
	Level 1		Level 2		Level 3		Total Fair
	Inputs		Inputs		Inputs		Value
	(In Thousands)
Financial assets:
Available-for-sale securities
U.S. government and agency	$	-	$	9,347	$	-	$	9,347
Municipal obligations		-		68,278		-		68,278
Corporate obligations		-		11,119		-		11,119
Mortgage-backed securities		-		19,348		-		19,348
Collateralized mortgage obligations		-		23,875		-		23,875
Asset-backed securities		-		10,198		-		10,198
Loans held-for-sale		-		7,318		-		7,318

Fair Value Measurements, Nonrecurring [Table Text Block]

	March 31, 2019
	Level 1		Level 2		Level 3		Total Fair
	Inputs		Inputs		Inputs		Value
	(In Thousands)
Impaired loans	$	-	$	-	$	4,528	$	4,528
Repossessed assets		-		-		354		354

	December 31, 2018
	Level 1		Level 2		Level 3		Total Fair
	Inputs		Inputs		Inputs		Value
	(In Thousands)
Impaired loans	$	-	$	-	$	2,290	$	2,290
Repossessed assets		-		-		107		107

Fair Value Measurement Inputs and Valuation Techniques [Table Text Block]

	Fair Value at				Principal		Significant		Range of
	March 31,		December 31,		Valuation		Unobservable		Signficant Input
Instrument	2019		2018		Technique		Inputs		Values
(Dollars In Thousands)
Impaired loans	$	4,528	$	2,290		Appraisal of collateral (1)		Appraisal adjustments		10	-	30%
Repossessed assets	$	354	$	107		Appraisal of collateral (1)(3)		Liquidation expenses (2)		10	-	30%

Fair Value, by Balance Sheet Grouping [Table Text Block]

	March 31, 2019
							Total
	Level 1		Level 2		Level 3		Estimated		Carrying
	Inputs		Inputs		Inputs		Fair Value		Amount
	(In Thousands)
Financial assets:
Cash and cash equivalents	$	11,279	$	-	$	-	$	11,279	$	11,279
Federal Home Loan Bank stock		4,807		-		-		4,807		4,807
Federal Reserve Bank stock		2,040		-		-		2,040		2,040
Loans receivable, net		-		-		722,217		722,217		721,712
Accrued interest and dividends receivable		5,005		-		-		5,005		5,005
Mortgage servicing rights		-		-		8,630		8,630		7,318
Financial liabilities:
Non-maturing interest bearing deposits		-		358,539		-		358,539		358,539
Noninterest bearing deposits		180,070		-		-		180,070		180,070
Time certificates of deposit		-		-		201,019		201,019		202,436
Accrued expenses and other liabilities		9,061		-		-		9,061		9,061
Federal Home Loan Bank advances and other borrowings		-		-		92,175		92,175		92,313
Other long-term debt		-		-		24,294		24,294		25,155
Off-balance-sheet instruments		-
Forward delivery commitments		-		-		-		-		-
Commitments to extend credit		-		-		-		-		-
Rate lock commitments		-		-		-		-		-

	December 31, 2018
							Total
	Level 1		Level 2		Level 3		Estimated		Carrying
	Inputs		Inputs		Inputs		Fair Value		Amount
	(In Thousands)
Financial assets:
Cash and cash equivalents	$	11,201	$	-	$	-	$	11,201	$	11,201
Federal Home Loan Bank stock		5,011		-		-		5,011		5,011
Federal Reserve Bank stock		2,033		-		-		2,033		2,033
Loans receivable, net		-		-		603,361		603,361		608,043
Accrued interest and dividends receivable		3,479		-		-		3,479		3,479
Mortgage servicing rights		-		-		8,670		8,670		7,100
Financial liabilities:
Non-maturing interest bearing deposits		-		321,399		-		321,399		321,399
Noninterest bearing deposits		142,788		-		-		142,788		142,788
Time certificates of deposit		-		-		160,735		160,735		162,424
Accrued expenses and other liabilities		5,388		-		-		5,388		5,388
Federal Home Loan Bank advances and other borrowings		-		-		101,885		101,885		102,222
Other long-term debt		-		-		24,002		24,002		25,155
Off-balance-sheet instruments		-
Forward delivery commitments		-		-		-		-		-
Commitments to extend credit		-		-		-		-		-
Rate lock commitments		-		-		-		-		-

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Note 12 - Mergers and Acquisitions (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

	BMB		TwinCo
	January 1,		January 31,
	2019		2018
	(In Thousands)
Assets acquired:
Cash and cash equivalents	$	6,902	$	5,657
Investment securities		2,096		30,728
Loans		89,204		55,057
Premises and equipment		2,246		1,605
Cash surrender value of life insurance		2,862		-
Other real estate owned		223		135
Core deposit intangible		1,988		1,609
Other assets		1,995		1,258
Total assets acquired	$	107,516	$	96,049
Liabilities assumed:
Deposits	$	92,706	$	82,190
Accrued expenses and other liabilities		1,960		19
Total liabilities assumed	$	94,666	$	82,209
Net assets acquired	$	12,850	$	13,840
Consideration paid:
Cash	$	1	$	9,900
Common stock issued (996,041 shares BMB and 446,774 shares TwinCo)		16,435		9,030
Total consideration paid	$	16,436	$	18,930
Goodwill resulting from acquisition	$	3,586	$	5,090

Business Acquisition, Pro Forma Information [Table Text Block]

	Three Months Ended
	March 31,
	2019		2018
	(In Thousands)
Pro forma net income 1)
Net interest income after loan loss provision	$	8,771	$	7,520
Noninterest income		3,941		2,895
Noninterest expense		11,268		9,433
Income before income taxes 1)		1,444		982
Income tax expense		289		197
Net income 1)	$	1,155	$	785
Pro forma earnings per share 1)
Basic earnings per share	$	0.18	$	0.21
Diluted earnings per share	$	0.18	$	0.20
Weighted average shares outstanding, basic		6,450,326		3,811,409
Weighted average shares outstanding, diluted		6,510,486		3,875,677

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Note 1 - Basis of Presentation (Details Textual)	Mar. 31, 2019	Jan. 01, 2019
Big Muddy Bancorp Acquisition [Member]
Business Acquisition, Percentage of Voting Interests Acquired		100.00%
Opportunity Bank of Montana [Member]
Noncontrolling Interest, Ownership Percentage by Parent	100.00%

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Note 2 - Investment Securities (Details Textual) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Pledged Financial Instruments, Not Separately Reported, Securities, Total	$ 22,877,000	$ 21,408,000
Other-than-temporary Impairment Loss, Debt Securities, Available-for-sale, Total	$ 0	$ 0
Debt Securities, Available-for-sale, Unrealized Loss Position, Number of Positions	76	108
US Government Agencies Debt Securities [Member]
Debt Securities, Available-for-sale, Unrealized Loss Position, Number of Positions	42	74
Debt Securities, Available for Sale, Continuous Unrealized Loss Position, Aggregate Depreciation from Amortized Cost Basis	1.37%	1.88%
Corporate Debt Securities [Member]
Debt Securities, Available-for-sale, Unrealized Loss Position, Number of Positions	11	11
Debt Securities, Available for Sale, Continuous Unrealized Loss Position, Aggregate Depreciation from Amortized Cost Basis	1.24%	2.88%
Mortgage-backed Securities and Collateralized Mortgage Obligations [Member]
Debt Securities, Available-for-sale, Unrealized Loss Position, Number of Positions	19	19
Debt Securities, Available for Sale, Continuous Unrealized Loss Position, Aggregate Depreciation from Amortized Cost Basis	2.05%	2.54%
Expected Credit Loss on Securities	$ 0
Asset-backed Securities [Member]
Debt Securities, Available-for-sale, Unrealized Loss Position, Number of Positions	4	4
Debt Securities, Available for Sale, Continuous Unrealized Loss Position, Aggregate Depreciation from Amortized Cost Basis	1.72%	1.89%
Expected Credit Loss on Securities	$ 0

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Note 2 - Investment Securities - Summary of Investment Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Securities available-for-sale, amortized cost	$ 140,437	$ 143,982
Securities available-for-sale, gross unrealized gains	962	408
Securities available-for-sale, gross unrealized losses	(1,238)	(2,225)
Securities available-for-sale, at fair value	140,161	142,165
US Government Agencies Debt Securities [Member]
Securities available-for-sale, amortized cost	9,677	9,333
Securities available-for-sale, gross unrealized gains	94	58
Securities available-for-sale, gross unrealized losses	(25)	(44)
Securities available-for-sale, at fair value	9,746	9,347
US States and Political Subdivisions Debt Securities [Member]
Securities available-for-sale, amortized cost	67,172	69,024
Securities available-for-sale, gross unrealized gains	729	244
Securities available-for-sale, gross unrealized losses	(345)	(990)
Securities available-for-sale, at fair value	67,556	68,278
Corporate Debt Securities [Member]
Securities available-for-sale, amortized cost	11,402	11,411
Securities available-for-sale, gross unrealized gains	8	8
Securities available-for-sale, gross unrealized losses	(129)	(300)
Securities available-for-sale, at fair value	11,281	11,119
Collateralized Mortgage Backed Securities [Member]
Securities available-for-sale, amortized cost	17,896	19,635
Securities available-for-sale, gross unrealized gains	75	86
Securities available-for-sale, gross unrealized losses	(285)	(373)
Securities available-for-sale, at fair value	17,686	19,348
Collateralized Mortgage Obligations [Member]
Securities available-for-sale, amortized cost	24,003	24,229
Securities available-for-sale, gross unrealized gains	55	6
Securities available-for-sale, gross unrealized losses	(294)	(360)
Securities available-for-sale, at fair value	23,764	23,875
Asset-backed Securities [Member]
Securities available-for-sale, amortized cost	10,287	10,350
Securities available-for-sale, gross unrealized gains	1	6
Securities available-for-sale, gross unrealized losses	(160)	(158)
Securities available-for-sale, at fair value	$ 10,128	$ 10,198

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Note 2 - Investment Securities - Proceeds From Sale of Available-for-sale Securities and the Associated Gross Realized Gains and Losses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Proceeds from sale of available-for-sale securities	$ 3,900	$ 25,994
Gross realized gain on sale of available-for-sale securities	11
Gross realized loss on sale of available-for-sale securities	(66)	(105)
Net realized loss on sale of available-for-sale securities	$ (55)	$ (105)

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Note 2 - Investment Securities - Amortized Cost and Fair Value of Securities by Contractual Maturity (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Available for sale securities, due in one year or less, amortized cost	$ 1,495
Available for sale securities, due in one year or less, fair value	1,495
Available for sale securities, due from one to five years, amortized cost	14,929
Available for sale securities, due from one to five years, fair value	14,824
Available for sale securities, due from five to ten years, amortized cost	14,547
Available for sale securities, due from five to ten years, fair value	14,751
Available for sale securities, due after ten years, amortized cost	67,567
Available for sale securities, due after ten years, fair value	67,641
Total available for sale securities debt maturities, amortized cost	98,538
Total available for sale securities, debt maturities, fair value	98,711
Securities available-for-sale, amortized cost	140,437	$ 143,982
Securities available-for-sale, at fair value	140,161	142,165
Collateralized Mortgage Backed Securities [Member]
Available for sale securities, without single maturity, amortized cost	17,896
Available for sale securities, without single maturity, fair value	17,686
Securities available-for-sale, amortized cost	17,896	19,635
Securities available-for-sale, at fair value	17,686	19,348
Collateralized Mortgage Obligations [Member]
Available for sale securities, without single maturity, amortized cost	24,003
Available for sale securities, without single maturity, fair value	23,764
Securities available-for-sale, amortized cost	24,003	24,229
Securities available-for-sale, at fair value	$ 23,764	$ 23,875

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Note 2 - Investment Securities - Investment Securities in a Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Available for sale debt securities, continuous unrealized loss position less than 12 months, fair value	$ 11,467	$ 34,552
Available for sale debt securities, continuous unrealized loss position less than 12 months, gross unrealized losses	(136)	(506)
Available for sale debt securities, continuous unrealized loss position for 12 months or longer, fair value	62,230	65,876
Available for sale debt securities, continuous unrealized loss position for 12 months or longer, gross unrealized losses	(1,102)	(1,719)
US Government Corporations and Agencies Securities [Member]
Available for sale debt securities, continuous unrealized loss position less than 12 months, fair value	1,762
Available for sale debt securities, continuous unrealized loss position less than 12 months, gross unrealized losses	(1)
Available for sale debt securities, continuous unrealized loss position for 12 months or longer, fair value	2,308	3,385
Available for sale debt securities, continuous unrealized loss position for 12 months or longer, gross unrealized losses	(24)	(44)
US States and Political Subdivisions Debt Securities [Member]
Available for sale debt securities, continuous unrealized loss position less than 12 months, fair value	476	17,887
Available for sale debt securities, continuous unrealized loss position less than 12 months, gross unrealized losses	(4)	(140)
Available for sale debt securities, continuous unrealized loss position for 12 months or longer, fair value	22,037	32,712
Available for sale debt securities, continuous unrealized loss position for 12 months or longer, gross unrealized losses	(341)	(850)
Corporate Debt Securities [Member]
Available for sale debt securities, continuous unrealized loss position less than 12 months, fair value	2,964	2,890
Available for sale debt securities, continuous unrealized loss position less than 12 months, gross unrealized losses	(36)	(110)
Available for sale debt securities, continuous unrealized loss position for 12 months or longer, fair value	7,310	7,220
Available for sale debt securities, continuous unrealized loss position for 12 months or longer, gross unrealized losses	(93)	(190)
Mortgage-backed Securities and Collateralized Mortgage Obligations [Member]
Available for sale debt securities, continuous unrealized loss position less than 12 months, fair value	2,392	5,575
Available for sale debt securities, continuous unrealized loss position less than 12 months, gross unrealized losses	(25)	(98)
Available for sale debt securities, continuous unrealized loss position for 12 months or longer, fair value	25,292	22,559
Available for sale debt securities, continuous unrealized loss position for 12 months or longer, gross unrealized losses	(554)	(635)
Asset-backed Securities [Member]
Available for sale debt securities, continuous unrealized loss position less than 12 months, fair value	3,873	8,200
Available for sale debt securities, continuous unrealized loss position less than 12 months, gross unrealized losses	(70)	(158)
Available for sale debt securities, continuous unrealized loss position for 12 months or longer, fair value	5,283
Available for sale debt securities, continuous unrealized loss position for 12 months or longer, gross unrealized losses	$ (90)

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Note 3 - Loans Receivable (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Debt Securities, Available-for-sale, Realized Gain (Loss), Total	$ (55,000)	$ (105,000)
Loans and Leases Receivable, Gross, Total	729,103,000	567,990,000	$ 618,031,000
Commercial Real Estate Portfolio Segment [Member]
Loans and Leases Receivable, Gross, Total	394,988,000	272,915,000	328,438,000
Commercial Real Estate Portfolio Segment [Member] | United States Department of Agriculture Rural Development [Member]
Debt Securities, Available-for-sale, Realized Gain (Loss), Total	12,304,000
Loans and Leases Receivable, Gross, Total			12,476,000
Loans and Leases Receivable, Gross, Carrying Amount, Covered	5,945,000		2,575,000
Commercial Portfolio Segment [Member]
Loans and Leases Receivable, Gross, Total	116,122,000	$ 86,296,000	76,762,000
Commercial Portfolio Segment [Member] | United States Department of Agriculture Rural Development [Member]
Loans and Leases Receivable, Gross, Carrying Amount, Covered	$ 1,693,000		$ 1,303,000

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Note 3 - Loans Receivable - Summary of Loans Receivable (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017
Loans receivable	$ 729,103	$ 618,031	$ 567,990
Deferred loan fees, net	(1,083)	(1,098)
Allowance for loan losses	(7,100)	(6,600)	(6,130)	$ (5,750)
Total loans, net	720,920	610,333
Residential Portfolio Segment [Member]
Loans receivable	144,313	144,107
Commercial Real Estate Portfolio Segment [Member]
Loans receivable	394,988	328,438	272,915
Allowance for loan losses	(3,923)	(3,593)	(3,202)	(2,778)
Home Equity Portfolio Segment [Member]
Loans receivable	54,637	52,159	52,028
Allowance for loan losses	(477)	(477)	(427)	(506)
Consumer Portfolio Segment [Member]
Loans receivable	19,043	16,565	17,252
Allowance for loan losses	(197)	(190)	(200)	(225)
Commercial Portfolio Segment [Member]
Loans receivable	116,122	76,762	86,296
Allowance for loan losses	$ (1,202)	$ (1,039)	$ (1,000)	$ (940)

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Note 3 - Loans Receivable - Nonperforming Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017
Non-accrual loans	$ 4,506	$ 2,268
Accruing loans delinquent 90 days or more	788	1,477
Restructured loans, net	22	22
Total nonperforming loans	5,316	3,767
Real estate and other repossessed assets acquired in settlement of loans, net	354	107
Total nonperforming assets	$ 5,670	$ 3,874
Total nonperforming assets as a percentage of total assets	0.58%	0.45%
Allowance for loan losses	$ 7,100	$ 6,600	$ 6,130	$ 5,750
Percent of allowance for loan losses to nonperforming loans	133.56%	175.21%
Percent of allowance for loan losses to nonperforming assets	125.22%	170.37%

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Note 3 - Loans Receivable - Allowance for Loan Losses Activity (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Allowance for loan losses, beginning balance	$ 6,600	$ 5,750
Charge-offs	(124)	(130)
Recoveries	20	8
Loan loss provision	604	502
Allowance for loan losses, ending balance	7,100	6,130
Allowance for loan losses, ending balance, allocated to loans individually evaluated for impairment		4
Allowance for loan losses, ending balance, allocated to loans collectively evaluated for impairment	7,100	6,126
Loans receivable, total	729,103	567,990
Loans receivable, ending balance, loans individually evaluated for impairment	4,528	3,362
Loans receivable, ending balance, loans collectively evaluated for impairment	724,575	564,628
One-to-Four Family Loans [Member]
Loans receivable, total		139,499
Residential Portfolio Segment [Member]
Loans receivable, total	144,313
Residential Portfolio Segment [Member] | One-to-Four Family Loans [Member]
Allowance for loan losses, beginning balance	1,301	1,301
Charge-offs	0	0
Recoveries	0	0
Loan loss provision	0
Allowance for loan losses, ending balance	1,301	1,301
Allowance for loan losses, ending balance, allocated to loans individually evaluated for impairment	0	0
Allowance for loan losses, ending balance, allocated to loans collectively evaluated for impairment	1,301	1,301
Loans receivable, total	116,621
Loans receivable, ending balance, loans individually evaluated for impairment	984	1,325
Loans receivable, ending balance, loans collectively evaluated for impairment	143,329	138,174
Commercial Real Estate Portfolio Segment [Member]
Allowance for loan losses, beginning balance	3,593	2,778
Charge-offs	(20)	0
Recoveries	6	3
Loan loss provision	344	421
Allowance for loan losses, ending balance	3,923	3,202
Allowance for loan losses, ending balance, allocated to loans individually evaluated for impairment	0	0
Allowance for loan losses, ending balance, allocated to loans collectively evaluated for impairment	3,923	3,202
Loans receivable, total	394,988	272,915
Loans receivable, ending balance, loans individually evaluated for impairment	1,239	1,524
Loans receivable, ending balance, loans collectively evaluated for impairment	393,749	271,391
Home Equity Portfolio Segment [Member]
Allowance for loan losses, beginning balance	477	506
Charge-offs		(80)
Recoveries		1
Loan loss provision
Allowance for loan losses, ending balance	477	427
Allowance for loan losses, ending balance, allocated to loans individually evaluated for impairment	0	0
Allowance for loan losses, ending balance, allocated to loans collectively evaluated for impairment	477	427
Loans receivable, total	54,637	52,028
Loans receivable, ending balance, loans individually evaluated for impairment	433	241
Loans receivable, ending balance, loans collectively evaluated for impairment	54,204	51,787
Consumer Portfolio Segment [Member]
Allowance for loan losses, beginning balance	190	225
Charge-offs	(9)	(27)
Recoveries	6	2
Loan loss provision	10
Allowance for loan losses, ending balance	197	200
Allowance for loan losses, ending balance, allocated to loans individually evaluated for impairment		4
Allowance for loan losses, ending balance, allocated to loans collectively evaluated for impairment	197	196
Loans receivable, total	19,043	17,252
Loans receivable, ending balance, loans individually evaluated for impairment	129	110
Loans receivable, ending balance, loans collectively evaluated for impairment	18,914	17,142
Commercial Portfolio Segment [Member]
Allowance for loan losses, beginning balance	1,039	940
Charge-offs	(95)	(23)
Recoveries	8	2
Loan loss provision	250	81
Allowance for loan losses, ending balance	1,202	1,000
Allowance for loan losses, ending balance, allocated to loans individually evaluated for impairment	0
Allowance for loan losses, ending balance, allocated to loans collectively evaluated for impairment	1,202	1,000
Loans receivable, total	116,122	86,296
Loans receivable, ending balance, loans individually evaluated for impairment	1,743	162
Loans receivable, ending balance, loans collectively evaluated for impairment	$ 114,379	$ 86,134

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Note 3 - Loans Receivable - Internal Classification of the Loan Portfolio (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018
Loans receivable	$ 729,103	$ 618,031	$ 567,990
Performing Financial Instruments [Member]
Loans receivable	723,787	614,264
Restructured Loans [Member]
Loans receivable	22	22
Nonperforming Financial Instruments [Member]
Loans receivable	5,294	3,745
One-to-Four Family Loans [Member]
Loans receivable			139,499
Residential Portfolio Segment [Member]
Loans receivable	144,313	144,107
Residential Portfolio Segment [Member] | One-to-Four Family Loans [Member]
Loans receivable	116,621	116,939
Residential Portfolio Segment [Member] | One-to-Four Family Loans [Member] | Performing Financial Instruments [Member]
Loans receivable	116,272	116,556
Residential Portfolio Segment [Member] | One-to-Four Family Loans [Member] | Restructured Loans [Member]
Loans receivable
Residential Portfolio Segment [Member] | One-to-Four Family Loans [Member] | Nonperforming Financial Instruments [Member]
Loans receivable	349	383
Residential Portfolio Segment [Member] | One-to-Four Family Construction [Member]
Loans receivable	27,692	27,168
Residential Portfolio Segment [Member] | One-to-Four Family Construction [Member] | Performing Financial Instruments [Member]
Loans receivable	27,057	26,534
Residential Portfolio Segment [Member] | One-to-Four Family Construction [Member] | Restructured Loans [Member]
Loans receivable
Residential Portfolio Segment [Member] | One-to-Four Family Construction [Member] | Nonperforming Financial Instruments [Member]
Loans receivable	635	634
Commercial Real Estate Portfolio Segment [Member]
Loans receivable	394,988	328,438	272,915
Commercial Real Estate Portfolio Segment [Member] | Commercial Real Estate Loan [Member]
Loans receivable	304,861	256,784
Commercial Real Estate Portfolio Segment [Member] | Commercial Real Estate Loan [Member] | Performing Financial Instruments [Member]
Loans receivable	304,313	255,005
Commercial Real Estate Portfolio Segment [Member] | Commercial Real Estate Loan [Member] | Restructured Loans [Member]
Loans receivable
Commercial Real Estate Portfolio Segment [Member] | Commercial Real Estate Loan [Member] | Nonperforming Financial Instruments [Member]
Loans receivable	548	1,779
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Loans receivable	44,998	41,739
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member] | Performing Financial Instruments [Member]
Loans receivable	44,998	41,726
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member] | Restructured Loans [Member]
Loans receivable
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member] | Nonperforming Financial Instruments [Member]
Loans receivable		13
Commercial Real Estate Portfolio Segment [Member] | Farmland Loan [Member]
Loans receivable	45,129	29,915
Commercial Real Estate Portfolio Segment [Member] | Farmland Loan [Member] | Performing Financial Instruments [Member]
Loans receivable	44,213	29,915
Commercial Real Estate Portfolio Segment [Member] | Farmland Loan [Member] | Restructured Loans [Member]
Loans receivable
Commercial Real Estate Portfolio Segment [Member] | Farmland Loan [Member] | Nonperforming Financial Instruments [Member]
Loans receivable	916
Home Equity Portfolio Segment [Member]
Loans receivable	54,637	52,159	52,028
Home Equity Portfolio Segment [Member] | Performing Financial Instruments [Member]
Loans receivable	54,204	51,668
Home Equity Portfolio Segment [Member] | Restructured Loans [Member]
Loans receivable	22	22
Home Equity Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Loans receivable	411	469
Consumer Portfolio Segment [Member]
Loans receivable	19,043	16,565	17,252
Consumer Portfolio Segment [Member] | Performing Financial Instruments [Member]
Loans receivable	18,914	16,438
Consumer Portfolio Segment [Member] | Restructured Loans [Member]
Loans receivable
Consumer Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Loans receivable	129	127
Commercial Portfolio Segment [Member]
Loans receivable	116,122	76,762	$ 86,296
Commercial Portfolio Segment [Member] | Commercial Loans [Member]
Loans receivable	73,937	59,053
Commercial Portfolio Segment [Member] | Commercial Loans [Member] | Performing Financial Instruments [Member]
Loans receivable	73,119	58,745
Commercial Portfolio Segment [Member] | Commercial Loans [Member] | Restructured Loans [Member]
Loans receivable
Commercial Portfolio Segment [Member] | Commercial Loans [Member] | Nonperforming Financial Instruments [Member]
Loans receivable	818	308
Commercial Portfolio Segment [Member] | Agricultural Loan [Member]
Loans receivable	42,185	17,709
Commercial Portfolio Segment [Member] | Agricultural Loan [Member] | Performing Financial Instruments [Member]
Loans receivable	40,697	17,677
Commercial Portfolio Segment [Member] | Agricultural Loan [Member] | Restructured Loans [Member]
Loans receivable
Commercial Portfolio Segment [Member] | Agricultural Loan [Member] | Nonperforming Financial Instruments [Member]
Loans receivable	1,488	32
Pass [Member]
Loans receivable	719,783	610,115
Pass [Member] | Residential Portfolio Segment [Member] | One-to-Four Family Loans [Member]
Loans receivable	115,611	116,065
Pass [Member] | Residential Portfolio Segment [Member] | One-to-Four Family Construction [Member]
Loans receivable	27,057	26,533
Pass [Member] | Commercial Real Estate Portfolio Segment [Member] | Commercial Real Estate Loan [Member]
Loans receivable	300,730	252,731
Pass [Member] | Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Loans receivable	44,998	41,726
Pass [Member] | Commercial Real Estate Portfolio Segment [Member] | Farmland Loan [Member]
Loans receivable	44,844	29,915
Pass [Member] | Home Equity Portfolio Segment [Member]
Loans receivable	54,204	51,668
Pass [Member] | Consumer Portfolio Segment [Member]
Loans receivable	18,872	16,394
Pass [Member] | Commercial Portfolio Segment [Member] | Commercial Loans [Member]
Loans receivable	72,876	57,778
Pass [Member] | Commercial Portfolio Segment [Member] | Agricultural Loan [Member]
Loans receivable	40,591	17,305
Special Mention [Member]
Loans receivable	1,931	2,681
Special Mention [Member] | Residential Portfolio Segment [Member] | One-to-Four Family Loans [Member]
Loans receivable	0	0
Special Mention [Member] | Residential Portfolio Segment [Member] | One-to-Four Family Construction [Member]
Loans receivable	0	0
Special Mention [Member] | Commercial Real Estate Portfolio Segment [Member] | Commercial Real Estate Loan [Member]
Loans receivable	1,703	1,731
Special Mention [Member] | Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Loans receivable	0	0
Special Mention [Member] | Commercial Real Estate Portfolio Segment [Member] | Farmland Loan [Member]
Loans receivable	0	0
Special Mention [Member] | Home Equity Portfolio Segment [Member]
Loans receivable	0	0
Special Mention [Member] | Consumer Portfolio Segment [Member]
Loans receivable	0	0
Special Mention [Member] | Commercial Portfolio Segment [Member] | Commercial Loans [Member]
Loans receivable	228	950
Special Mention [Member] | Commercial Portfolio Segment [Member] | Agricultural Loan [Member]
Loans receivable	0	0
Substandard [Member]
Loans receivable	7,389	5,154
Substandard [Member] | Residential Portfolio Segment [Member] | One-to-Four Family Loans [Member]
Loans receivable	1,010	874
Substandard [Member] | Residential Portfolio Segment [Member] | One-to-Four Family Construction [Member]
Loans receivable	635	635
Substandard [Member] | Commercial Real Estate Portfolio Segment [Member] | Commercial Real Estate Loan [Member]
Loans receivable	2,428	2,322
Substandard [Member] | Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Loans receivable		13
Substandard [Member] | Commercial Real Estate Portfolio Segment [Member] | Farmland Loan [Member]
Loans receivable	285	0
Substandard [Member] | Home Equity Portfolio Segment [Member]
Loans receivable	433	491
Substandard [Member] | Consumer Portfolio Segment [Member]
Loans receivable	171	171
Substandard [Member] | Commercial Portfolio Segment [Member] | Commercial Loans [Member]
Loans receivable	833	244
Substandard [Member] | Commercial Portfolio Segment [Member] | Agricultural Loan [Member]
Loans receivable	1,594	404
Doubtful [Member]
Loans receivable		81
Doubtful [Member] | Residential Portfolio Segment [Member] | One-to-Four Family Loans [Member]
Loans receivable	0	0
Doubtful [Member] | Residential Portfolio Segment [Member] | One-to-Four Family Construction [Member]
Loans receivable	0	0
Doubtful [Member] | Commercial Real Estate Portfolio Segment [Member] | Commercial Real Estate Loan [Member]
Loans receivable	0	0
Doubtful [Member] | Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Loans receivable	0	0
Doubtful [Member] | Commercial Real Estate Portfolio Segment [Member] | Farmland Loan [Member]
Loans receivable	0	0
Doubtful [Member] | Home Equity Portfolio Segment [Member]
Loans receivable	0	0
Doubtful [Member] | Consumer Portfolio Segment [Member]
Loans receivable	0	0
Doubtful [Member] | Commercial Portfolio Segment [Member] | Commercial Loans [Member]
Loans receivable		81
Doubtful [Member] | Commercial Portfolio Segment [Member] | Agricultural Loan [Member]
Loans receivable	0	0
Unlikely to be Collected Financing Receivable [Member]
Loans receivable	0
Unlikely to be Collected Financing Receivable [Member] | Residential Portfolio Segment [Member] | One-to-Four Family Loans [Member]
Loans receivable	0	0
Unlikely to be Collected Financing Receivable [Member] | Residential Portfolio Segment [Member] | One-to-Four Family Construction [Member]
Loans receivable	0	0
Unlikely to be Collected Financing Receivable [Member] | Commercial Real Estate Portfolio Segment [Member] | Commercial Real Estate Loan [Member]
Loans receivable	0	0
Unlikely to be Collected Financing Receivable [Member] | Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Loans receivable	0	0
Unlikely to be Collected Financing Receivable [Member] | Commercial Real Estate Portfolio Segment [Member] | Farmland Loan [Member]
Loans receivable	0	0
Unlikely to be Collected Financing Receivable [Member] | Home Equity Portfolio Segment [Member]
Loans receivable	0	0
Unlikely to be Collected Financing Receivable [Member] | Consumer Portfolio Segment [Member]
Loans receivable	0
Unlikely to be Collected Financing Receivable [Member] | Commercial Portfolio Segment [Member] | Commercial Loans [Member]
Loans receivable	0
Unlikely to be Collected Financing Receivable [Member] | Commercial Portfolio Segment [Member] | Agricultural Loan [Member]
Loans receivable	$ 0	$ 0

XML

Note 3 - Loans Receivable - Delinquencies Within the Loan Portfolio (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018
Past due	$ 2,861	$ 3,509
Non-accrual Loans	4,528	2,290
Current Loans	721,714	612,232
Loans receivable	729,103	618,031	$ 567,990
Financing Receivables, 30 to 89 Days Past Due [Member]
Past due	2,073	2,032
Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Past due	788	1,477
One-to-Four Family Loans [Member]
Loans receivable			139,499
Residential Portfolio Segment [Member]
Loans receivable	144,313	144,107
Residential Portfolio Segment [Member] | One-to-Four Family Loans [Member]
Past due	937	511
Non-accrual Loans	349	253
Current Loans	115,335	116,175
Loans receivable	116,621	116,939
Residential Portfolio Segment [Member] | One-to-Four Family Loans [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Past due	937	381
Residential Portfolio Segment [Member] | One-to-Four Family Loans [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Past due		130
Residential Portfolio Segment [Member] | One-to-Four Family Construction [Member]
Past due		118
Non-accrual Loans	635	634
Current Loans	27,057	26,416
Loans receivable	27,692	27,168
Residential Portfolio Segment [Member] | One-to-Four Family Construction [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Past due		118
Residential Portfolio Segment [Member] | One-to-Four Family Construction [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Past due
Commercial Real Estate Portfolio Segment [Member]
Loans receivable	394,988	328,438	272,915
Commercial Real Estate Portfolio Segment [Member] | Commercial Real Estate Loan [Member]
Past due	181	2,322
Non-accrual Loans	548	432
Current Loans	304,132	254,030
Loans receivable	304,861	256,784
Commercial Real Estate Portfolio Segment [Member] | Commercial Real Estate Loan [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Past due	181	975
Commercial Real Estate Portfolio Segment [Member] | Commercial Real Estate Loan [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Past due		1,347
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Past due	25	9
Non-accrual Loans		13
Current Loans	44,973	41,717
Loans receivable	44,998	41,739
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Past due	25	9
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Past due
Commercial Real Estate Portfolio Segment [Member] | Farmland Loan [Member]
Past due	225
Non-accrual Loans	691
Current Loans	44,213	29,915
Loans receivable	45,129	29,915
Commercial Real Estate Portfolio Segment [Member] | Farmland Loan [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Past due
Commercial Real Estate Portfolio Segment [Member] | Farmland Loan [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Past due	225
Home Equity Portfolio Segment [Member]
Past due	225	39
Non-accrual Loans	433	491
Current Loans	53,979	51,629
Loans receivable	54,637	52,159	52,028
Home Equity Portfolio Segment [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Past due	225	39
Home Equity Portfolio Segment [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Past due
Consumer Portfolio Segment [Member]
Past due	191	135
Non-accrual Loans	129	127
Current Loans	18,723	16,303
Loans receivable	19,043	16,565	17,252
Consumer Portfolio Segment [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Past due	191	135
Consumer Portfolio Segment [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Past due
Commercial Portfolio Segment [Member]
Loans receivable	116,122	76,762	$ 86,296
Commercial Portfolio Segment [Member] | Commercial Loans [Member]
Past due	257	284
Non-accrual Loans	818	308
Current Loans	72,862	58,461
Loans receivable	73,937	59,053
Commercial Portfolio Segment [Member] | Commercial Loans [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Past due	257	284
Commercial Portfolio Segment [Member] | Commercial Loans [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Past due	0	0
Commercial Portfolio Segment [Member] | Agricultural Loan [Member]
Past due	820	91
Non-accrual Loans	925	32
Current Loans	40,440	17,586
Loans receivable	42,185	17,709
Commercial Portfolio Segment [Member] | Agricultural Loan [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Past due	257	91
Commercial Portfolio Segment [Member] | Agricultural Loan [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Past due	$ 563

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Note 3 - Loans Receivable - Impaired Loans (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Recorded investment	$ 4,528		$ 2,290
Unpaid principal balance	4,919		2,559
Average recorded investment	3,409	$ 2,170
Residential Portfolio Segment [Member] | One-to-Four Family Loans [Member]
Recorded investment, with no related allowance	349		253
Unpaid principal balance, with no related allowance	376		277
Average recorded investment	301	672
Residential Portfolio Segment [Member] | One-to-Four Family Construction [Member]
Recorded investment, with no related allowance	635		634
Unpaid principal balance, with no related allowance	685		684
Average recorded investment	634	228
Commercial Real Estate Portfolio Segment [Member] | Commercial Real Estate Loan [Member]
Recorded investment, with no related allowance	548		432
Unpaid principal balance, with no related allowance	681		527
Average recorded investment	490	762
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Recorded investment, with no related allowance	0		13
Unpaid principal balance, with no related allowance	0		26
Average recorded investment	7
Commercial Real Estate Portfolio Segment [Member] | Farmland Loan [Member]
Recorded investment, with no related allowance	691		0
Unpaid principal balance, with no related allowance	728		0
Average recorded investment	346
Home Equity Portfolio Segment [Member]
Recorded investment, with no related allowance	433		491
Unpaid principal balance, with no related allowance	462		522
Average recorded investment	462	242
Consumer Portfolio Segment [Member]
Recorded investment, with no related allowance	129		127
Unpaid principal balance, with no related allowance	138		181
Average recorded investment	128	131
Commercial Portfolio Segment [Member] | Commercial Loans [Member]
Recorded investment, with no related allowance	818		308
Unpaid principal balance, with no related allowance	923		310
Average recorded investment	563	135
Commercial Portfolio Segment [Member] | Agricultural Loan [Member]
Recorded investment, with no related allowance	925		32
Unpaid principal balance, with no related allowance	926		$ 32
Average recorded investment	$ 478

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Note 4 - Troubled Debt Restructurings (Details Textual)	3 Months Ended	12 Months Ended
	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Mar. 31, 2018 USD ($)
Financing Receivable, Modifications, Number of Contracts		1
Financing Receivable, Troubled Debt Restructuring	$ 22,000	$ 23,000
Financing Receivables, Impaired, Troubled Debt Restructuring, Write-down		$ 0
Financing Receivable, Troubled Debt Restructuring, Subsequent Default	0
Financing Receivable, Troubled Debt Restructuring, Commitment to Lend	$ 0
Financing Receivable, Troubled Debt Restructuring, Recorded Investment			$ 22,000

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Note 5 - Deposits - Summary of Deposits (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Noninterest checking	$ 180,070	$ 142,788
Interest bearing checking	111,437	105,115
Savings	124,992	108,234
Money market	122,110	108,050
Time certificates of deposit	202,436	162,424
Total	$ 741,045	$ 626,611

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Note 6 - Other Long-term Debt (Details Textual) - USD ($)	1 Months Ended			3 Months Ended		12 Months Ended
	Feb. 28, 2017	Jun. 30, 2015	Dec. 31, 2010	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018	Sep. 30, 2005
Debt Instrument, Face Amount				$ 25,155,000		$ 25,155,000
Interest Expense, Long-term Debt, Total				$ 365,000	$ 347,000
First Tennessee Bank, N.A. [Member]
Temporary Equity, Liquidation Preference							$ 5,155,000
Trust Preferred Securities, Maximum Dividend Deferring Period						5 years
Eagle Bancorp Statutory Trust I [Member] | Subordinated Debt [Member]
Debt Instrument, Interest Rate, Stated Percentage							6.02%
Eagle Bancorp Statutory Trust I [Member] | Variable Interest Rate Subordinated Debentures Due in 2035 [Member]
Debt Instrument, Interest Rate, Effective Percentage				4.02%		4.228%
Eagle Bancorp Statutory Trust I [Member] | Variable Interest Rate Subordinated Debentures Due in 2035 [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate			1.42%
5.75% Senior Unsecured Notes Due February 15, 2022 [Member]
Debt Instrument, Face Amount	$ 10,000,000			$ 10,000,000		$ 10,000,000
Debt Instrument, Interest Rate, Stated Percentage	5.75%			5.75%		5.75%
Debt Instrument, Maturity Year	2022			2022		2022
6.75% Subordinated Notes Due in 2025 [Member]
Debt Instrument, Face Amount		$ 10,000,000		$ 10,000,000		$ 10,000,000
Debt Instrument, Interest Rate, Stated Percentage		6.75%		6.75%		6.75%
Debt Instrument, Maturity Year		2025		2025		2025
Eagle Bancorp Statutory Trust I [Member]
Subordinated Debt, Ending Balance							$ 5,155,000

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Note 6 - Other Long-term Debt - Summary of Other Long-term Debt (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018	Feb. 28, 2017	Jun. 30, 2015
Principal amount	$ 25,155,000	$ 25,155,000
Unamortized debt issuance costs	(263,000)	(279,000)
5.75% Senior Unsecured Notes Due February 15, 2022 [Member]
Principal amount	10,000,000	10,000,000	$ 10,000,000
Unamortized debt issuance costs	(125,000)	(136,000)
6.75% Subordinated Notes Due in 2025 [Member]
Principal amount	10,000,000	10,000,000		$ 10,000,000
Unamortized debt issuance costs	(138,000)	(143,000)
Variable Interest Rate Subordinated Debentures Due in 2035 [Member]
Principal amount	5,155,000	5,155,000
Unamortized debt issuance costs

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Note 6 - Other Long-term Debt - Summary of Other Long-term Debt (Details) (Parentheticals)	1 Months Ended		3 Months Ended	12 Months Ended
	Feb. 28, 2017	Jun. 30, 2015	Mar. 31, 2019	Dec. 31, 2018
5.75% Senior Unsecured Notes Due February 15, 2022 [Member]
Debt instrument, fixed interest rate	5.75%		5.75%	5.75%
Debt instrument, maturity year	2022		2022	2022
6.75% Subordinated Notes Due in 2025 [Member]
Debt instrument, fixed interest rate		6.75%	6.75%	6.75%
Debt instrument, maturity year		2025	2025	2025
Variable Interest Rate Subordinated Debentures Due in 2035 [Member]
Debt instrument, maturity year			2035	2035
Debt instrument, interest rate above LIBOR rate			1.42%	1.42%

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Note 7 - Earnings Per Share (Details Textual) - shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Weighted Average Number of Shares Outstanding, Basic, Total	6,450,326	5,311,527
Weighted Average Number of Shares Outstanding, Diluted, Total	6,510,486	5,375,987
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	0	0

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Note 8 - Dividends and Stock Repurchase Program (Details Textual) - $ / shares			1 Months Ended	3 Months Ended					12 Months Ended
	Apr. 18, 2019	Jan. 24, 2019	Apr. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2018	Jul. 20, 2018	Jul. 19, 2018	Jul. 20, 2017
Common Stock, Dividends, Per Share, Cash Paid				$ 0.0925			$ 0.09	$ 0.09
Common Stock, Dividends, Per Share, Declared	$ 0.0925	$ 0.0925			$ 0.0925	$ 0.0925
Stock Repurchase Program, Number of Shares Authorized to be Repurchased											100,000	100,000
Treasury Stock, Shares, Acquired			28,000	42,000					0	0
Stock Issued During Period Treasury Stock Reissued Average Cost Per Share			$ 17.09	$ 17.43

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Note 9 - Accumulated Other Comprehensive Income (Loss) - Activity in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Balance	$ 94,806	$ 83,616
Balance	112,292	90,948
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member]
Balance	227	234
Other comprehensive income (loss), before reclassifications and income taxes	296	262
Amounts reclassified from accumulated other comprehensive income (loss), before income taxes	(309)	(325)
Income tax benefit (expense)	4	17
Total other comprehensive (loss) income	(9)	(46)
Balance	218	188
AOCI, Accumulated Gain (Loss), Debt Securities, Available-for-sale, Parent [Member]
Balance	(1,338)	79
Other comprehensive income (loss), before reclassifications and income taxes	1,486	(2,583)
Amounts reclassified from accumulated other comprehensive income (loss), before income taxes	55	105
Income tax benefit (expense)	(407)	660
Total other comprehensive (loss) income	1,134	(1,818)
Balance	(204)	(1,739)
AOCI Attributable to Parent [Member]
Balance	(1,111)	313
Other comprehensive income (loss), before reclassifications and income taxes	1,782	(2,321)
Amounts reclassified from accumulated other comprehensive income (loss), before income taxes	(254)	(220)
Income tax benefit (expense)	(403)	677
Total other comprehensive (loss) income	1,125	(1,864)
Balance	$ 14	$ (1,551)

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Note 10 - Derivatives and Hedging Activities (Details Textual) - Designated as Hedging Instrument [Member] - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Interest Rate Forward Commitments [Member]
Derivative, Notional Amount	$ 21,000,000	$ 16,000,000
Interest Rate Lock Commitments [Member]
Derivative, Notional Amount	$ 32,496,000	$ 18,745,000

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Note 11 - Fair Value Disclosures (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018
Loans and Leases Receivable, Gross, Total	$ 729,103,000	$ 618,031,000	$ 567,990,000
Impaired Loans [Member]
Loans and Leases Receivable, Gross, Total	4,528,000	$ 2,290,000
Loans Receivable, Fair Value Disclosure	$ 4,528,000
Mortgage Servicing Rights [Member]
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value, Discount Rate	12.00%
Mortgage Servicing Rights [Member] | Minimum [Member]
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value, Prepayment Speed	89.00%
Mortgage Servicing Rights [Member] | Maximum [Member]
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value, Prepayment Speed	239.00%
Mortgage Servicing Rights [Member] | Maximum [Member] | Agency Investors [Member]
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value, Discount Rate	1.25%
Mortgage Servicing Rights [Member] | Weighted Average [Member]
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value, Prepayment Speed	113.00%

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Note 11 - Fair Value Disclosures - Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis (Details) - Fair Value, Recurring [Member] - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Loans held-for-sale	$ 8,075	$ 7,318
Fair Value, Inputs, Level 1 [Member]
Loans held-for-sale
Fair Value, Inputs, Level 2 [Member]
Loans held-for-sale	8,075	7,318
Fair Value, Inputs, Level 3 [Member]
Loans held-for-sale
US Government Agencies Debt Securities [Member]
Securities available-for-sale	9,746	9,347
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available-for-sale
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available-for-sale	9,746	9,347
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available-for-sale
US States and Political Subdivisions Debt Securities [Member]
Securities available-for-sale	67,556	68,278
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available-for-sale
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available-for-sale	67,556	68,278
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available-for-sale
Corporate Debt Securities [Member]
Securities available-for-sale	11,281	11,119
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available-for-sale
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available-for-sale	11,281	11,119
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available-for-sale
Collateralized Mortgage Backed Securities [Member]
Securities available-for-sale	17,686	19,348
Collateralized Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available-for-sale
Collateralized Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available-for-sale	17,686	19,348
Collateralized Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available-for-sale
Collateralized Mortgage Obligations [Member]
Securities available-for-sale	23,764	23,875
Collateralized Mortgage Obligations [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available-for-sale
Collateralized Mortgage Obligations [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available-for-sale	23,764	23,875
Collateralized Mortgage Obligations [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available-for-sale
Asset-backed Securities [Member]
Securities available-for-sale	10,128	10,198
Asset-backed Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available-for-sale
Asset-backed Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available-for-sale	10,128	10,198
Asset-backed Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available-for-sale

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Note 11 - Fair Value Disclosures - Financial Assets and Financial Liabilities Measured at Fair Value on a Nonrecurring Basis (Details) - Fair Value, Nonrecurring [Member] - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Impaired loans, fair value	$ 4,528	$ 2,290
Repossessed assets, fair value	354	107
Fair Value, Inputs, Level 1 [Member]
Impaired loans, fair value
Repossessed assets, fair value
Fair Value, Inputs, Level 2 [Member]
Impaired loans, fair value
Repossessed assets, fair value
Fair Value, Inputs, Level 3 [Member]
Impaired loans, fair value	4,528	2,290
Repossessed assets, fair value	$ 354	$ 107

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Note 11 - Fair Value Disclosures - Financial Assets and Liabilities, Valuation Techniques and Significant Unobservable Inputs (Details) $ in Thousands		Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Impaired Loans [Member]
Fair value	[1]	$ 4,528	$ 2,290
Impaired Loans [Member] | Minimum [Member] | Measurement Input, Discount Rate [Member]
impaired loans, discount rate		0.1
Impaired Loans [Member] | Maximum [Member] | Measurement Input, Discount Rate [Member]
impaired loans, discount rate		0.3
Repossessed Assets [Member]
Fair value	[1],[2],[3]	$ 354	$ 107
Repossessed Assets [Member] | Minimum [Member] | Measurement Input, Discount Rate [Member]
Repossessed assets, discount rate		0.1
Repossessed Assets [Member] | Maximum [Member] | Measurement Input, Discount Rate [Member]
Repossessed assets, discount rate		0.3

[1] Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable, less associated allowance.

[2] Appraisals may be adjusted for qualitative factors such as economic conditions and estimated liquidation expenses. The range of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

[3] Includes qualitative adjustments by management and estimated liquidation expenses.

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Note 11 - Fair Value Disclosures - Estimated Fair Value and Carrying Amounts of Financial Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Estimate of Fair Value Measurement [Member]
Financial assets:
Cash and cash equivalents	$ 11,279	$ 11,201
Federal Home Loan Bank stock	4,807	5,011
Federal Reserve Bank stock	2,040	2,033
Loans Receivable, Fair Value Disclosure	722,217	603,361
Accrued interest and dividends receivable	5,005	3,479
Mortgage servicing rights	8,630	8,670
Financial liabilities:
Non-maturing interest bearing deposits	358,539	321,399
Noninterest bearing deposits	180,070	142,788
Time certificates of deposit	201,019	160,735
Accrued expenses and other liabilities	9,061	5,388
Federal Home Loan Bank advances and other borrowings	92,175	101,885
Other long-term debt	24,294	24,002
Estimate of Fair Value Measurement [Member] | Forward Contracts [Member]
Financial liabilities:
Off-balance sheet instruments	0	0
Estimate of Fair Value Measurement [Member] | Commitments to Extend Credit [Member]
Financial liabilities:
Off-balance sheet instruments	0	0
Estimate of Fair Value Measurement [Member] | Interest Rate Lock Commitments [Member]
Financial liabilities:
Off-balance sheet instruments	0	0
Reported Value Measurement [Member]
Financial assets:
Cash and cash equivalents	11,279	11,201
Federal Home Loan Bank stock	4,807	5,011
Federal Reserve Bank stock	2,040	2,033
Loans Receivable, Fair Value Disclosure	721,712	608,043
Accrued interest and dividends receivable	5,005	3,479
Mortgage servicing rights	7,318	7,100
Financial liabilities:
Non-maturing interest bearing deposits	358,539	321,399
Noninterest bearing deposits	180,070	142,788
Time certificates of deposit	202,436	162,424
Accrued expenses and other liabilities	9,061	5,388
Federal Home Loan Bank advances and other borrowings	92,313	102,222
Other long-term debt	25,155	25,155
Reported Value Measurement [Member] | Forward Contracts [Member]
Financial liabilities:
Off-balance sheet instruments	0	0
Reported Value Measurement [Member] | Commitments to Extend Credit [Member]
Financial liabilities:
Off-balance sheet instruments	0	0
Reported Value Measurement [Member] | Interest Rate Lock Commitments [Member]
Financial liabilities:
Off-balance sheet instruments	0	0
Fair Value, Inputs, Level 1 [Member] | Estimate of Fair Value Measurement [Member]
Financial assets:
Cash and cash equivalents	11,279	11,201
Federal Home Loan Bank stock	4,807	5,011
Federal Reserve Bank stock	2,040	2,033
Loans Receivable, Fair Value Disclosure	0	0
Accrued interest and dividends receivable	5,005	3,479
Mortgage servicing rights	0	0
Financial liabilities:
Non-maturing interest bearing deposits	0	0
Noninterest bearing deposits	180,070	142,788
Time certificates of deposit	0	0
Accrued expenses and other liabilities	9,061	5,388
Federal Home Loan Bank advances and other borrowings	0	0
Other long-term debt	0	0
Fair Value, Inputs, Level 1 [Member] | Estimate of Fair Value Measurement [Member] | Forward Contracts [Member]
Financial liabilities:
Off-balance sheet instruments	0	0
Fair Value, Inputs, Level 1 [Member] | Estimate of Fair Value Measurement [Member] | Commitments to Extend Credit [Member]
Financial liabilities:
Off-balance sheet instruments	0	0
Fair Value, Inputs, Level 1 [Member] | Estimate of Fair Value Measurement [Member] | Interest Rate Lock Commitments [Member]
Financial liabilities:
Off-balance sheet instruments	0	0
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member]
Financial assets:
Cash and cash equivalents	0	0
Federal Home Loan Bank stock	0	0
Federal Reserve Bank stock	0	0
Loans Receivable, Fair Value Disclosure	0	0
Accrued interest and dividends receivable	0	0
Mortgage servicing rights	0	0
Financial liabilities:
Non-maturing interest bearing deposits	358,539	321,399
Noninterest bearing deposits	0	0
Time certificates of deposit	0	0
Accrued expenses and other liabilities	0	0
Federal Home Loan Bank advances and other borrowings	0	0
Other long-term debt	0	0
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | Forward Contracts [Member]
Financial liabilities:
Off-balance sheet instruments	0	0
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | Commitments to Extend Credit [Member]
Financial liabilities:
Off-balance sheet instruments	0	0
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | Interest Rate Lock Commitments [Member]
Financial liabilities:
Off-balance sheet instruments	0	0
Fair Value, Inputs, Level 3 [Member] | Estimate of Fair Value Measurement [Member]
Financial assets:
Cash and cash equivalents	0	0
Federal Home Loan Bank stock	0	0
Federal Reserve Bank stock	0	0
Loans Receivable, Fair Value Disclosure	722,217	603,361
Accrued interest and dividends receivable	0	0
Mortgage servicing rights	8,630	8,670
Financial liabilities:
Non-maturing interest bearing deposits	0	0
Noninterest bearing deposits	0	0
Time certificates of deposit	201,019	160,735
Accrued expenses and other liabilities	0	0
Federal Home Loan Bank advances and other borrowings	92,175	101,885
Other long-term debt	24,294	24,002
Fair Value, Inputs, Level 3 [Member] | Estimate of Fair Value Measurement [Member] | Forward Contracts [Member]
Financial liabilities:
Off-balance sheet instruments	0	0
Fair Value, Inputs, Level 3 [Member] | Estimate of Fair Value Measurement [Member] | Commitments to Extend Credit [Member]
Financial liabilities:
Off-balance sheet instruments	0	0
Fair Value, Inputs, Level 3 [Member] | Estimate of Fair Value Measurement [Member] | Interest Rate Lock Commitments [Member]
Financial liabilities:
Off-balance sheet instruments	$ 0	$ 0

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Note 12 - Mergers and Acquisitions (Details Textual)			1 Months Ended	3 Months Ended			12 Months Ended
	Jan. 01, 2019 USD ($)	Jan. 31, 2018 USD ($)	Jan. 31, 2018 USD ($)	Mar. 31, 2019 USD ($)	Jun. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Sep. 05, 2017
Loans and Leases Receivable, Gross, Total				$ 729,103,000		$ 567,990,000	$ 618,031,000
Finite-Lived Intangible Assets, Net, Ending Balance				3,311,000			1,498,000
Business Combination, Acquisition Related Costs				$ 1,171,000		234,000
Core Deposits [Member]
Finite-Lived Intangible Asset, Useful Life				10 years
Ruby Valley Bank [Member] | Madison County, Montana [Member]
Number of Bank Branches									2
Big Muddy Bancorp Acquisition [Member]
Business Combination, Consideration Transferred, Total	$ 16,436,000
Payments to Acquire Businesses, Gross	1,000
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable	$ 16,435,000
Business Acquisition, Percentage of Voting Interests Acquired	100.00%
Business Combination, Acquired Loans Discount	$ 2,813,000			$ 2,374,000
Business Combination, Accretion of Loan Discount				439,000
Business Acquisition, Impairment Loans	$ 556,000
Loans and Leases Receivable, Gross, Total				544,000
Business Combination, Acquisition Related Costs				$ 1,171,000			804,000
Effective Income Tax Rate Reconciliation, Percent, Total				20.00%
Big Muddy Bancorp Acquisition [Member] | Core Deposits [Member]
Finite-Lived Intangible Assets, Net, Ending Balance				$ 1,988,000
TwinCo Acquisition [Member]
Business Combination, Consideration Transferred, Total		$ 18,930,000
Payments to Acquire Businesses, Gross		9,900,000
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable		9,030,000
Business Acquisition, Percentage of Voting Interests Acquired									100.00%
Business Combination, Acquired Loans Discount		$ 1,834,000	$ 1,834,000	1,164,000
Business Combination, Accretion of Loan Discount				81,000			$ 589,000
Business Acquisition, Impairment Loans			$ 1,188,000
Loans and Leases Receivable, Gross, Total				1,166,000
Business Combination, Acquisition Related Costs					$ 131,000	$ 234,000		$ 676,000
TwinCo Acquisition [Member] | Core Deposits [Member]
Finite-Lived Intangible Assets, Net, Ending Balance				$ 1,609,000

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Note 12 - Mergers and Acquisitions - Assets Acquired and Liabilities Assumed (Details) - USD ($)	Jan. 01, 2019	Jan. 31, 2018	Mar. 31, 2019	Dec. 31, 2018
Goodwill			$ 15,710,000	$ 12,124,000
Big Muddy Bancorp Acquisition [Member]
Cash and cash equivalents	$ 6,902,000
Investment securities	2,096,000
Loans	89,204,000
Premises and equipment	2,246,000
Cash surrender value of life insurance	2,862,000
Other real estate owned	223,000
Core deposit intangible	1,988,000
Other assets	1,995,000
Total assets acquired	107,516,000
Deposits	92,706,000
Accrued expenses and other liabilities	1,960,000
Total liabilities assumed	94,666,000
Net assets acquired	12,850,000
Cash	1,000
Common stock issued (996,041 shares BMB and 446,774 shares TwinCo)	16,435,000
Total consideration paid	16,436,000
Goodwill	$ 3,586,000
TwinCo Acquisition [Member]
Cash and cash equivalents		$ 5,657,000
Investment securities		30,728,000
Loans		55,057,000
Premises and equipment		1,605,000
Cash surrender value of life insurance
Other real estate owned		135,000
Core deposit intangible		1,609,000
Other assets		1,258,000
Total assets acquired		96,049,000
Deposits		82,190,000
Accrued expenses and other liabilities		19,000
Total liabilities assumed		82,209,000
Net assets acquired		13,840,000
Cash		9,900,000
Common stock issued (996,041 shares BMB and 446,774 shares TwinCo)		9,030,000
Total consideration paid		18,930,000
Goodwill		$ 5,090,000

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Note 12 - Mergers and Acquisitions - Assets Acquired and Liabilities Assumed (Details) (Parentheticals) - shares	Jan. 01, 2019	Jan. 31, 2018
Big Muddy Bancorp Acquisition [Member]
Common stock issued, shares (in shares)	996,041
TwinCo Acquisition [Member]
Common stock issued, shares (in shares)		446,774

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Note 12 - Mergers and Acquisitions - Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended
		Mar. 31, 2019	Mar. 31, 2018
Net interest income after loan loss provision		$ 8,771	$ 6,345
Noninterest income		3,941	2,679
Noninterest expense		11,268	8,324
Income before income taxes1)		1,444	700
Income tax expense		261	127
Net income1)		$ 1,183	$ 573
Basic earnings per share (in dollars per share)		$ 0.18	$ 0.11
Diluted earnings per share (in dollars per share)		$ 0.18	$ 0.11
Weighted Average Number of Shares Outstanding, Basic, Total		6,450,326	5,311,527
Weighted Average Number of Shares Outstanding, Diluted, Total		6,510,486	5,375,987
TwinCo Acquisition [Member] | Pro Forma [Member]
Net interest income after loan loss provision	[1]	$ 8,771	$ 7,520
Noninterest income	[1]	3,941	2,895
Noninterest expense	[1]	11,268	9,433
Income before income taxes1)	[1]	1,444	982
Income tax expense	[1]	289	197
Net income1)	[1]	$ 1,155	$ 785
Basic earnings per share (in dollars per share)	[1]	$ 0.18	$ 0.21
Diluted earnings per share (in dollars per share)	[1]	$ 0.18	$ 0.20
Weighted Average Number of Shares Outstanding, Basic, Total	[1]	6,450,326	3,811,409
Weighted Average Number of Shares Outstanding, Diluted, Total	[1]	6,510,486	3,875,677

[1] Significant assumptions utilized include the acquisition cost noted above, accretion of interest rate fair value adjustments and a 20% effective tax rate.

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Note 13 - Recent Accounting Pronouncements (Details Textual) - Accounting Standards Update 2016-02 [Member]	Jan. 01, 2019 USD ($)
Operating Lease, Right-of-Use Asset	$ 2,461,000
Operating Lease, Liability, Total	$ 2,461,000

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Note 14 - Subsequent Events (Details Textual) - $ / shares	Apr. 23, 2019	Mar. 31, 2019	Dec. 31, 2018
Common Stock, Par or Stated Value Per Share		$ 0.01	$ 0.01
Common Stock, Shares Authorized		8,000,000	8,000,000
Subsequent Event [Member]
Common Stock, Par or Stated Value Per Share	$ 0.01
Common Stock, Shares Authorized	20,000,000