Equibles

10-Q

Eagle Bancorp Montana, Inc. (EBMT)

10-Q 2025-05-08 For: 2025-03-31
View Original
Added on April 06, 2026

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐ 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 registrant 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) (Zip code)

(406) 442-3080

(Registrant's telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

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 ☒ 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 ☒ 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       ☒
Non-accelerated filer       ☐ Smaller reporting company   ☒
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 ☒

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 7,952,177 shares outstanding

As of April 30, 2025

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Statements of Financial Condition as of March 31, 2025 and December 31, 2024 1
Condensed Consolidated Statements of Income for the three months ended March 31, 2025 and 2024 3
Condensed Consolidated Statements of Comprehensive Incomefor the three ended March 31 2025 and 2024 5
Condensed Consolidated Statements of Changes in Shareholders' Equity for the three months ended March 31, 2025 and 2024 6
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024 7
Notes to Condensed Consolidated Financial Statements (Unaudited) 9
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 26
Item 3. Quantitative and Qualitative Disclosures About Market Risk 38
Item 4. Controls and Procedures 38
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 39
Item 1A. Risk Factors 39
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 39
Item 3. Defaults Upon Senior Securities 39
Item 4. Mine Safety Disclosures 39
Item 5. Other Information 39
Item 6. Exhibits 40
Signatures 41

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

Cautionary 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 (“OBMT” or 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, capital requirements and liquidity requirements;
● local, regional, national and international economic conditions or macroeconomic instability (including any economic slowdown or recession, inflation, interest rate changes, credit loss trends, unemployment, changes in housing or securities markets, or other factors) and the impact of the same on Eagle and its customers;
--- ---
● volatility, disruption, or uncertainty in national and international financial markets, including as a result of geopolitical developments;
--- ---
● the effects of any U.S. federal government shutdown, closures or significant staff reductions in agencies regulating or otherwise impacting Eagle's business;
● the impact of any new regulatory, policy, or enforcement developments resulting from the change in U.S. presidential administration, including the implementation of tariffs and other protectionist trade policies, including any reciprocal tariffs by foreign countries;
● competition among depository and other traditional and non-traditional financial service providers;
● risks related to the concentration of our business in Montana, including risks associated with 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 or reduces loan demand;
--- ---
● our ability to attract deposits and other sources of funding or liquidity;
--- ---
● volatility in Eagle's stock price due to investor sentiment and perception of the banking industry;
● the possibility that future credit losses may be higher than currently expected due to changes in economic assumptions, customer behavior, adverse developments with respect to U.S. or global economic conditions and other uncertainties, including the impact of supply chain disruptions, inflationary pressures and labor shortages on economic conditions and our business;
● an inability to access capital markets or maintain deposits or borrowing costs;
● our ability to assess and monitor the effect of evolving uses of artificial intelligence on our business and operations;
● our ability to navigate differing environmental, social, governmental, and sustainability concerns among governmental administrations, our stakeholders, and other activists that may arise from our business activities;
● changes or volatility in the securities markets that lead to impairment in the value of our investment securities and goodwill;
--- ---
● our ability to implement our growth strategy, including identifying and consummating suitable acquisitions, raising additional capital to finance such transactions, entering new markets, possible failures in realizing the anticipated benefits from such acquisitions and an inability of our personnel, systems and infrastructure to keep pace with such growth;
--- ---
● unforeseen events, such as pandemics or natural disasters, and any governmental or societal responses thereto;
--- ---
● the effect of acquisitions we may make, if any, including, without limitation, the failure to achieve expected revenue growth and/or expense savings from such acquisitions;
● potential impairment on the goodwill we have recorded or may record in connection with business acquisitions;
--- ---
● our ability to enter new markets successfully and capitalize on growth opportunities;
--- ---
● the need to retain capital for strategic or regulatory reasons;
● 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;
● our ability to implement new technologies and maintain secure and reliable technology systems;
--- ---
● 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;
--- ---
● 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 the 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 the Part II, Item 1A, “Risk Factors” and Part I, Item 2, “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, 2024, 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.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Dollars in Thousands, Except for Per Share Data)

(Unaudited)

December 31,
2024
ASSETS:
Cash and due from banks 21,360 $ 29,824
Interest-bearing deposits in banks 1,445 1,735
Total cash and cash equivalents 22,805 31,559
Securities available-for-sale, at fair value (amortized cost of 317,370 at March 31, 2025 and 319,939 at December 31, 2024) 291,661 292,590
Federal Home Loan Bank ("FHLB") stock 7,101 7,778
Federal Reserve Bank ("FRB") stock 4,131 4,131
Mortgage loans held-for-sale, at fair value 6,223 13,368
Loans receivable, net of allowance for credit losses of 16,720 at March 31, 2025 and 16,850 at December 31, 2024 1,506,788 1,503,796
Accrued interest and dividends receivable 13,271 12,890
Mortgage servicing rights, net 15,282 15,376
Assets held-for-sale, at cost 960 960
Premises and equipment, net 101,759 101,540
Cash surrender value of life insurance, net 53,573 53,232
Goodwill 34,740 34,740
Core deposit intangible, net 4,181 4,499
Deferred tax asset, net 9,960 10,364
Other assets 15,981 16,267
Total assets 2,088,416 $ 2,103,090

All values are in US Dollars.

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

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Continued)

(Dollars in Thousands, Except for Per Share Data)

(Unaudited)

December 31,
2024
LIABILITIES: **** ****
Deposit accounts:
Noninterest-bearing 411,272 $ 419,211
Interest-bearing 1,278,694 1,262,017
Total deposits 1,689,966 1,681,228
Accrued expenses and other liabilities 36,739 47,018
FHLB advances and other borrowings 124,952 140,930
Other long-term debt:
Principal amount 60,155 60,155
Unamortized debt issuance costs (969 ) (1,006 )
Total other long-term debt, net 59,186 59,149
Total liabilities 1,910,843 1,928,325
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; 20,000,000 shares authorized; 8,507,429 shares issued at March 31, 2025 and December 31, 2024; 7,977,177 shares outstanding at March 31, 2025 and 8,027,177 shares outstanding December 31, 2024) 85 85
Additional paid-in capital 108,451 108,334
Unallocated common stock held by Employee Stock Ownership Plan ("ESOP") (3,867 ) (4,011 )
Treasury stock, at cost (530,252 shares at March 31, 2025 and 480,252 shares at December 31, 2024) (11,517 ) (10,761 )
Retained earnings 103,366 101,264
Accumulated other comprehensive loss, net of tax (18,945 ) (20,146 )
Total shareholders' equity 177,573 174,765
Total liabilities and shareholders' equity 2,088,416 $ 2,103,090

All values are in US Dollars.

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

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Dollars in Thousands, Except for Per Share Data)

(Unaudited)

Three Months Ended
March 31,
2025 2024
INTEREST AND DIVIDEND INCOME: ****
Interest and fees on loans $ 23,320 $ 21,942
Securities available-for-sale 2,451 2,724
FHLB and FRB dividends 260 247
Other interest income 38 29
Total interest and dividend income 26,069 24,942
INTEREST EXPENSE: ****
Deposits 6,871 6,548
FHLB advances and other borrowings 1,626 2,497
Other long-term debt 670 683
Total interest expense 9,167 9,728
NET INTEREST INCOME 16,902 15,214
Provision (recapture) for credit losses 42 (135 )
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 16,860 15,349
NONINTEREST INCOME: ****
Service charges on deposit accounts 389 400
Mortgage banking, net 2,125 2,177
Interchange and ATM fees 593 563
Appreciation in cash surrender value of life insurance 350 288
Other noninterest income 559 524
Total noninterest income $ 4,016 $ 3,952

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

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Continued)

(Dollars in Thousands, Except for Per Share Data)

(Unaudited)

Three Months Ended
March 31,
2025 2024
NONINTEREST EXPENSE:
Salaries and employee benefits $ 9,664 $ 9,718
Occupancy and equipment expense 2,302 2,099
Data processing 1,330 1,525
Software subscriptions 658 528
Advertising 232 253
Amortization 320 369
Loan costs 372 398
Federal Deposit Insurance Corporation ("FDIC") insurance premiums 231 299
Professional and examination fees 520 484
Other noninterest expense 1,377 1,360
Total noninterest expense 17,006 17,033
INCOME BEFORE PROVISION FOR INCOME TAXES 3,870 2,268
Provision for income taxes 631 370
NET INCOME $ 3,239 $ 1,898
BASIC EARNINGS PER COMMON SHARE $ 0.41 $ 0.24
DILUTED EARNINGS PER COMMON SHARE $ 0.41 $ 0.24

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

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in Thousands)

(Unaudited)

Three Months Ended
March 31,
2025 2024
NET INCOME $ 3,239 $ 1,898
OTHER ITEMS OF COMPREHENSIVE INCOME (LOSS) BEFORE TAX: **** ****
Change in fair value of investment securities available-for-sale 1,640 (1,790 )
Total other comprehensive income (loss) 1,640 (1,790 )
Income tax (provision) benefit related to securities available-for-sale (439 ) 472
COMPREHENSIVE INCOME $ 4,440 $ 580

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

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

For the three months ended March 31, 2025 and 2024

(Dollars in Thousands, Except for Per Share Data)

(Unaudited)

**** **** **** **** ACCUMULATED ****
ADDITIONAL UNALLOCATED **** **** OTHER ****
COMMON PAID-IN ESOP TREASURY RETAINED COMPREHENSIVE ****
STOCK CAPITAL SHARES STOCK EARNINGS (LOSS) INCOME TOTAL
Balance at January 1, 2025 - $ 85 $ 108,334 $ (4,010 ) $ (10,762 ) $ 101,264 $ (20,146 ) $ 174,765
Net income - - - - 3,239 - 3,239
Other comprehensive income - - - - - - 1,201 1,201
Dividends paid (0.1425 per share) - - - - - (1,137 ) - (1,137 )
Stock compensation expense - - 163 - - - - 163
ESOP shares allocated (5,997 shares) - - (46 ) 143 - - - 97
Treasury stock purchased (50,000 shares at 15.11 average cost per share) - - - - (755 ) - - (755 )
Balance at March 31, 2025 - $ 85 $ 108,451 $ (3,867 ) $ (11,517 ) $ 103,366 $ (18,945 ) $ 177,573
Balance at January 1, 2024 - $ 85 $ 108,819 $ (4,583 ) $ (11,124 ) $ 96,021 $ (19,945 ) $ 169,273
Net income - - - - - 1,898 - 1,898
Other comprehensive loss - - - - - - (1,318 ) (1,318 )
Dividends paid (0.1400 per share) - - - - - (1,122 ) - (1,122 )
Stock compensation expense - - 135 - - - - 135
ESOP shares allocated (5,997 shares) - - (61 ) 143 - - - 82
Balance at March 31, 2024 - $ 85 $ 108,893 $ (4,440 ) $ (11,124 ) $ 96,797 $ (21,263 ) $ 168,948

All values are in US Dollars.

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

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

(Unaudited)

Three Months Ended
March 31,
2025 2024
CASH FLOWS FROM OPERATING ACTIVITIES: **** ****
Net income $ 3,239 $ 1,898
Adjustments to reconcile net income to net cash provided by operating activities:
Provision (recapture) for credit losses 42 (135 )
Depreciation 1,287 1,288
Net amortization of investment securities premiums and discounts 170 243
Amortization of mortgage servicing rights 365 367
Amortization of right-of-use assets 119 131
Amortization of core deposit intangibles 320 369
Compensation expense related to restricted stock awards 163 135
ESOP compensation expense for allocated shares 97 82
Net gain on sale of loans (1,349 ) (1,414 )
Originations of loans held-for-sale (35,557 ) (41,965 )
Proceeds from sales of loans held-for-sale 43,780 44,947
Net appreciation in cash surrender value of life insurance (332 ) (288 )
Net change in:
Accrued interest and dividends receivable (381 ) 447
Other assets 382 2,477
Accrued expenses and other liabilities (10,461 ) (1,462 )
Net cash provided by operating activities 1,884 7,120
CASH FLOWS FROM INVESTING ACTIVITIES: **** ****
Activity in available-for-sale securities:
Maturities, principal payments and calls 5,327 5,042
Purchases (3,023 ) -
FHLB stock redeemed 677 742
Loan origination and principal collection, net (2,865 ) (12,839 )
Purchases of premises and equipment, net (1,622 ) (4,778 )
Net cash used in investing activities (1,506 ) (11,833 )

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

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Dollars in Thousands)

(Unaudited)

Three Months Ended
March 31,
2025 2024
CASH FLOWS FROM FINANCING ACTIVITIES: **** ****
Net increase in deposits $ 8,738 $ 404
Net short-term payments from FHLB and other borrowings (4,728 ) (18,197 )
Advances on long-term FHLB and other borrowings 10,000 20,000
Payments on long-term FHLB and other borrowings (21,250 ) -
Purchase of treasury stock (755 ) -
Dividends paid (1,137 ) (1,122 )
Net cash (used in) provided by financing activities (9,132 ) 1,085
NET DECREASE IN CASH AND CASH EQUIVALENTS (8,754 ) (3,628 )
CASH AND CASH EQUIVALENTS, beginning of period 31,559 24,545
CASH AND CASH EQUIVALENTS, end of period $ 22,805 $ 20,917
SUPPLEMENTAL CASH FLOW INFORMATION: **** ****
Cash paid during the period for interest $ 11,471 $ 10,185
NONCASH OPERATING, INVESTING AND FINANCING ACTIVITIES: **** ****
Increase (decrease) in fair value of securities available-for-sale $ 1,640 $ (1,790 )
Mortgage servicing rights recognized 271 252
Loans transferred to real estate and other assets acquired in foreclosure 5 -
Right-of-use assets obtained in exchange for lease liabilities 3 -

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

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Eagle Bancorp Montana, Inc. (“Eagle” or the “Company”), is a Delaware corporation that holds 100% of the capital stock of Opportunity Bank of Montana (“OBMT” or 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.

Eagle Bancorp Statutory Trust I (the "Trust") was established in September 2005 and is owned 100% by Eagle.

In September 2021, the Company entered into an Agreement and Plan of Merger ("Merger Agreement") with First Community Bancorp, Inc. ("FCB"), a Montana corporation, and FCB's wholly-owned subsidiary, First Community Bank, a Montana chartered commercial bank. The Merger Agreement provided that, upon the terms and subject to the conditions set forth in the Merger Agreement, FCB would merge with and into Eagle, with Eagle continuing as the surviving corporation. The merger closed on April 30, 2022. First Community Bank operated nine branches in Ashland, Culbertson, Froid, Glasgow, Helena, Hinsdale, Three Forks and Wolf Point, Montana.

In March 2021, the Bank established a subsidiary, Opportunity Housing Fund, LLC ("OHF"), to invest in Low-Income Housing Tax Credit ("LIHTC") projects. The LIHTC program is designed to encourage capital investment in construction and rehabilitation of low-income housing. Tax credits are allowable over a 10-year period. Amortizing investments in LIHTC projects are included in other assets on the consolidated statements of financial condition and totaled $6,563,000 and $7,644,000 as of March 31, 2025 and December 31, 2024, respectively. Outstanding funding obligations for LIHTC projects are included in accrued expenses and other liabilities on the condensed consolidated financial statements of condition and totaled $215,000 as of March 31, 2025 and December 31, 2024.

On January 1, 2020, the Company acquired Western Holding Company of Wolf Point, ("WHC"), a Montana corporation, and WHC's wholly-owned subsidiary, Western Bank of Wolf Point ("WB"), a Montana chartered commercial bank. The acquisition included one branch in Wolf Point, Montana. In addition, Western Financial Services, Inc. ("WFS") was acquired through the WHC merger. In December 2023, WFS changed its name to Opportunity Financial Services, Inc. ("OFS"). OFS facilitates deferred payment contracts for customers that produce agricultural products. The revenue from these contracts is accounted for in accordance with ASC Topic 606. The Company is considered an agent in these contracts, as: (i) the Company facilitates payment from customer to supplier, (ii) the Company does not take inventory of commodities as they are delivered by supplier to the customer, (iii) pricing of commodities is determined by the market, (iv) consideration on deferred payment contracts is insignificant to the Company and (v) the Company’s exposure to credit risk is minimal. Revenue is recognized net of expenses and reported in other noninterest income in the financial statements. Commodity sales income and the corresponding commodity sales expense were $2,314,000 and $2,800,000 for the three months ended March 31, 2025 and 2024, respectively, for a net impact of $0. Outstanding deferred contracts payable are included in accrued expenses and other liabilities on the condensed consolidated financial statements of condition and totaled $10,314,000 as of March 31, 2025 and $17,792,000 as of December 31, 2024.

The Bank is headquartered in Helena, Montana, and has additional branches in Ashland, Big Timber, Billings, Bozeman, Butte, Choteau, Culbertson, Denton, Dutton, Froid, Glasgow, Great Falls, Hamilton, Hinsdale, Livingston, Missoula, Sheridan, Three Forks, Townsend, Twin Bridges, Winifred and Wolf Point, Montana. 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 currently has 30 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.

Basis of Financial Statement Presentation and Use of Estimates

The accompanying unaudited condensed 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 condensed 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, 2024, as filed with the SEC on March 14, 2025. 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, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025or any other period. In preparing condensed consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the condensed consolidated statement of financial condition and reported amounts of revenues and expenses during the reporting period. Actual results could differ from estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for credit losses ("ACL"), mortgage servicing rights, the fair value of financial instruments, the valuation of goodwill and deferred tax assets and liabilities.

Principles of Consolidation

The condensed consolidated financial statements include Eagle, the Bank, OHF, Eagle Bancorp Statutory Trust I (the “Trust”) and OFS. All significant intercompany transactions and balances have been eliminated in consolidation.

Reclassifications

Certain prior period amounts were reclassified to conform to the presentation for 2025. These reclassifications had no impact on net income or shareholders’ equity.

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NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued

Subsequent Events

The Company has evaluated events and transactions subsequent to March 31, 2025 for recognition and/or disclosure.

During April 2025, the Company purchased 25,000 shares at an average price of $16.34 under its repurchase plan. See Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds for additional information regarding the repurchase plan.

Goodwill

Goodwill is recorded upon completion of a business combination as the difference between the purchase price and the fair value of net identifiable assets acquired. Subsequent to initial recognition, the Company tests goodwill for impairment annually as of October 31, or more often if events or circumstances, such as adverse changes in the business climate indicate there may be impairment. A goodwill impairment test is performed by comparing the fair value of the reporting unit with its carrying value.  An impairment charge is recorded for the amount by which thy carrying amount exceeds the reporting unit’s fair value. For goodwill considerations the Company is a single reporting unit.

During the quarter ended September 30, 2024, Management performed a quantitative goodwill impairment test with assistance from a third-party valuation specialist. The interim determination was primarily driven by a revision in the Company’s earnings outlook in comparison to budget. A weighted average of both the market and income approaches was used in valuing the reporting unit’s fair value. The interim goodwill impairment assessment as of August 31, 2024 concluded that goodwill was not impaired. Our quantitative annual impairment test as of October 31, 2024 also did not result in impairment.

Segment Reporting

Management considers operations to be aggregated in one operating segment, as well as one reportable segment. The Company operates as one line of business (community banking) by providing a similar base of commercial and retail customers with comparable product and service offerings throughout our Montana markets. The Company adopted ASU No. 2023-07, Segment Reporting (Topic 280) during the year ended December 31, 2024. The President/Chief Executive Officer (“CEO”) serves as the Company’s chief operating decision maker (“CODM”).

The CODM is responsible for assessing performance and allocating operating and capital expenditure resources. The CODM regularly assesses the performance of the single operating and reporting segment based on consolidated net income. The CODM reviews expenses at a level consistent with those reported in the Company’s consolidated statements of income. All significant expense categories are reflected in the consolidated statements of income. The measure of segment assets is reflected in the consolidated statements of financial condition as total assets.

Recently Adopted Accounting Pronouncements

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) which provides temporary optional expedients to ease the financial reporting burdens of the expected market transition from London Interbank Offered Rate (“LIBOR”) to an alternative reference rate such as Secured Overnight Financing Rate ("SOFR"). In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848), which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. ASU No. 2021-01 was effective upon issuance and generally can be applied through December 31, 2024. The Company has reviewed all of its LIBOR based products and all products have been adjusted to another index as LIBOR ceased to be published after June 30, 2023. ASU No. 2021-01 did not have a significant impact on the Company's consolidated financial statements.

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The updated accounting guidance requires expanded reportable segment disclosures, primarily related to significant segment expenses which are regularly provided to the company's chief operating decision maker. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within annual periods beginning after December 15, 2024. Retrospective application is required. The Company adopted the updated guidance during the year ended December 31, 2024 and it did not have a significant impact on the Company's financial statement disclosures as the Company has a single reportable segment.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The updated accounting guidance requires enhanced income tax disclosures, including the disaggregation of existing disclosures related to the tax rate reconciliation and income taxes paid. This ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The amendments should be applied on a prospective basis, but retrospective application is permitted. The amendments in this ASU became effective for the Company on January 1, 2025 and did not have a significant impact on the Company’s financial position, results of operations, or liquidity.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This update requires that public companies disclose details about specific expenses such as employee compensation, depreciation, amortization, depletion, and inventory purchases. This ASU is effective for annual reporting periods beginning after December 15, 2026 with early adoption permitted. The Company is currently evaluating the effect the ASU will have on its consolidated financial statements and related disclosures.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 2. INVESTMENT SECURITIES

The amortized cost and fair values of securities, together with unrealized gains and losses, were as follows:

March 31, 2025 December 31, 2024
Gross Gross
Amortized Unrealized Fair Amortized Unrealized Fair
Cost Gains (Losses) ACL Value Cost Gains (Losses) ACL Value
(In Thousands)
Available-for-Sale: **** ****
U.S. government and agency obligations $ 4,977 $ 78 $ (146 ) $ - $ 4,909 $ 5,298 $ 85 $ (188 ) $ - $ 5,195
U.S. treasury obligations 52,614 - (4,877 ) - 47,737 52,592 - (5,679 ) - 46,913
Municipal obligations 129,111 1 (13,450 ) - 115,662 131,109 1 (13,233 ) - 117,877
Corporate obligations 3,250 - (104 ) - 3,146 4,249 - (87 ) - 4,162
Mortgage-backed securities 29,355 30 (1,312 ) - 28,073 29,867 21 (1,653 ) - 28,235
Collateralized mortgage obligations 90,759 21 (6,024 ) - 84,756 89,313 11 (6,701 ) - 82,623
Asset-backed securities 7,304 74 - - 7,378 7,511 83 (9 ) - 7,585
Total $ 317,370 $ 204 $ (25,913 ) $ - $ 291,661 $ 319,939 $ 201 $ (27,550 ) $ - $ 292,590

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 2.

INVESTMENT SECURITIES

– continued

There was no sales activity for available-for-sale securities during the three months ended March 31, 2025 or 2024.

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

March 31, 2025
Amortized Fair
Cost Value
(In Thousands)
Due in one year or less $ 6,464 $ 6,442
Due from one to five years 34,414 31,990
Due from five to ten years 84,235 73,960
Due after ten years 72,143 66,440
197,256 178,832
Mortgage-backed securities 29,355 28,073
Collateralized mortgage obligations 90,759 84,756
Total $ 317,370 $ 291,661

As of  March 31, 2025 and December 31, 2024, securities with a fair value of $21,026,000 and $22,892,000, 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, 2025
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 obligations $ - $ - $ 1,777 $ (146 )
U.S. treasury obligations - - 47,736 (4,877 )
Municipal obligations 10,758 (483 ) 104,349 (12,967 )
Corporate obligations - - 3,146 (104 )
Mortgage-backed securities and collateralized mortgage obligations 7,923 (69 ) 84,972 (7,267 )
Asset-backed securities 1,743 - 210 -
Total $ 20,424 $ (552 ) $ 242,190 $ (25,361 )

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 2.

INVESTMENT SECURITIES

– continued

December 31, 2024
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 obligations $ - $ - $ 1,749 $ (188 )
U.S. treasury obligations - - 46,914 (5,679 )
Municipal obligations 14,678 (261 ) 102,521 (12,972 )
Corporate obligations - - 4,163 (87 )
Mortgage-backed securities and collateralized mortgage obligations 10,984 (188 ) 85,392 (8,166 )
Asset-backed securities 1,993 (9 ) - -
Total $ 27,655 $ (458 ) $ 240,739 $ (27,092 )

As of  March 31, 2025 and December 31, 2024, there were, respectively, 280 and 284 securities in unrealized loss positions. Based on analysis of available-for-sale debt securities with unrealized losses as of March 31, 2025, the Company determined the decline in value was unrelated to credit losses and was primarily caused by changes in interest rates and market spreads subsequent to the initial purchase of the securities. Management does not intend to sell and the Company is not likely to be required to sell these securities prior to maturity. As a result, no ACL was recorded on available-for-sale securities at March 31, 2025 and  December 31, 2024. As part of this determination, consideration was given to the extent to which fair value was less than amortized cost, adverse security ratings by a rating agency and other factors.

NOTE 3. LOANS RECEIVABLE

Loans receivable consisted of the following:

March 31, December 31,
2025 2024
(In Thousands)
Real estate loans:
Residential 1-4 family $ 195,207 $ 199,422
Commercial real estate 929,828 916,783
Other loans:
Home equity 100,665 97,543
Consumer 26,978 28,513
Commercial 270,830 278,385
Total 1,523,508 1,520,646
Allowance for credit losses (16,720 ) (16,850 )
Total loans, net $ 1,506,788 $ 1,503,796

Included in the above are loans guaranteed by U.S. government agencies totaling

$15,667,000

and $16,309,000 at March 31, 2025 and  December 31, 2024, respectively.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3.

LOANS RECEIVABLE

– continued

The following table provides allowance for credit losses activity for the three months ended March 31, 2025.

Residential Commercial Home
1-4 Family Real Estate Equity Consumer Commercial Total
(In Thousands)
Allowance for credit losses on loans:
Beginning balance, January 1, 2025 $ 1,911 $ 10,907 $ 553 $ 245 $ 3,234 $ 16,850
Charge-offs - - - (6 ) - (6 )
Recoveries - 2 - 1 1 4
Recapture (7 ) (79 ) (2 ) (1 ) (39 ) (128 )
Total ending allowance balance, March 31, 2025 $ 1,893 $ 10,847 $ 549 $ 239 $ 3,192 $ 16,720

The following table provides allowance for credit losses activity for the three months ended March 31, 2024.

Residential Commercial Home
1-4 Family Real Estate Equity Consumer Commercial Total
(In Thousands)
Allowance for credit losses on loans:
Beginning balance, January 1, 2024 $ 1,866 $ 10,691 $ 540 $ 304 $ 3,039 $ 16,440
Charge-offs - - - (1 ) - (1 )
Recoveries - 3 - 1 62 66
Recapture (8 ) (61 ) (2 ) - (24 ) (95 )
Total ending allowance balance, March 31, 2024 $ 1,858 $ 10,633 $ 538 $ 304 $ 3,077 $ 16,410

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3.

LOANS RECEIVABLE

– continued

Internal classification of the loan portfolio by amortized cost and based on year originated was as follows:

March 31, 2025
2025 2024 2023 2022 2021 Prior Revolving Loans Total Loans
(In Thousands)
RESIDENTIAL 1-4 FAMILY
Pass $ 1,980 $ 20,399 $ 25,286 $ 31,394 $ 20,231 $ 47,106 $ 2,017 $ 148,413
Special Mention - - - 623 - - - 623
Substandard - - - 98 - 565 663
Total Residential 1-4 family 1,980 20,399 25,286 32,115 20,231 47,671 2,017 149,699
Current-period gross charge-offs - - - - - - - -
RESIDENTIAL 1-4 FAMILY CONSTRUCTION
Pass 4,075 20,163 4,117 16,901 - - 51 45,307
Substandard - - 201 - - - - 201
Total Residential 1-4 family construction 4,075 20,163 4,318 16,901 - - 51 45,508
Current-period gross charge-offs - - - - - - - -
COMMERCIAL REAL ESTATE
Pass 9,398 50,075 58,142 195,618 127,822 177,930 33,281 652,266
Special Mention - 6,304 260 447 - - 2,956 9,967
Substandard - - 490 - 463 3,079 - 4,032
Total Commercial real estate 9,398 56,379 58,892 196,065 128,285 181,009 36,237 666,265
Current-period gross charge-offs - - - - - - - -
COMMERCIAL CONSTRUCTION AND DEVELOPMENT
Pass 6,191 33,037 21,028 21,412 9,208 13,221 5,044 109,141
Substandard - - - - - 966 - 966
Total Commercial construction and development 6,191 33,037 21,028 21,412 9,208 14,187 5,044 110,107
Current-period gross charge-offs - - - - - - - -
FARMLAND
Pass 11,508 20,545 17,567 29,695 18,675 50,800 2,183 150,973
Special Mention - - 332 798 205 566 - 1,901
Substandard - 188 - - - 348 46 582
Total Farmland 11,508 20,733 17,899 30,493 18,880 51,714 2,229 153,456
Current-period gross charge-offs - - - - - - - -
HOME EQUITY
Pass 1,174 984 1,306 3,167 350 2,585 90,544 100,110
Special Mention - - - - - 22 157 179
Substandard - - - - 42 83 251 376
Total Home Equity 1,174 984 1,306 3,167 392 2,690 90,952 100,665
Current-period gross charge-offs - - - - - - - -
CONSUMER
Pass 2,706 8,763 6,403 3,946 1,402 1,485 2,114 26,819
Special Mention - 1 25 - - - 11 37
Substandard - 16 66 22 - 18 - 122
Total Consumer 2,706 8,780 6,494 3,968 1,402 1,503 2,125 26,978
Current-period gross charge-offs - 3 - - - - 3 6
COMMERCIAL
Pass 1,747 28,331 23,487 17,109 14,973 21,783 29,802 137,232
Special Mention - - 470 273 - - 250 993
Substandard - 1,173 41 6 15 204 4 1,443
Total Commercial 1,747 29,504 23,998 17,388 14,988 21,987 30,056 139,668
Current-period gross charge-offs - - - - - - - -
AGRICULTURAL
Pass 7,797 32,468 15,769 7,839 3,742 3,531 53,535 124,681
Special Mention - 2910 1,674 - - 215 1,193 5,992
Substandard - - - - - 489 - 489
Total Agricultural 7,797 35,378 17,443 7,839 3,742 4,235 54,728 131,162
Current-period gross charge-offs - - - - - - - -
TOTAL LOANS
Pass $ 46,576 $ 214,765 $ 173,105 $ 327,081 $ 196,403 $ 318,441 $ 218,571 $ 1,494,942
Special Mention - 9,215 2,761 2,141 205 803 4,567 138,381
Substandard - 1,377 798 126 520 5,752 301 8,874
Total $ 46,576 $ 225,357 $ 176,664 $ 329,348 $ 197,128 $ 324,996 $ 223,439 $ 1,523,508

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NOTE 3.

LOANS RECEIVABLE

– continued

December 31, 2024
2024 2023 2022 2021 2020 Prior Revolving Loans Total Loans
(In Thousands)
RESIDENTIAL 1-4 FAMILY
Pass $ 19,197 $ 26,976 $ 31,265 $ 20,658 $ 13,509 $ 34,913 $ 6,004 $ 152,522
Special Mention - - 623 - - - - 623
Substandard - - - - - 576 - 576
Total Residential 1-4 family 19,197 26,976 31,888 20,658 13,509 35,489 6,004 153,721
Current-period gross charge-offs - - - - - 11 - 11
RESIDENTIAL 1-4 FAMILY CONSTRUCTION
Pass 20,593 5,526 18,621 - - - - 44,740
Substandard - 204 - 757 - - - 961
Total Residential 1-4 family construction 20,593 5,730 18,621 757 - - - 45,701
Current-period gross charge-offs - - - - - - - -
COMMERCIAL REAL ESTATE
Pass 49,084 59,172 184,072 130,274 47,481 132,838 38,937 641,858
Special Mention - 260 - - - - - 260
Substandard - 490 - 463 - 2,891 - 3,844
Total Commercial real estate 49,084 59,922 184,072 130,737 47,481 135,729 38,937 645,962
Current-period gross charge-offs - - - - - - - -
COMMERCIAL CONSTRUCTION AND DEVELOPMENT
Pass 37,265 21,430 35,323 9,628 5,033 8,676 5,451 122,806
Substandard - - 438 - 2 965 - 1,405
Total Commercial construction and development 37,265 21,430 35,761 9,628 5,035 9,641 5,451 124,211
Current-period gross charge-offs - - - - - - - -
FARMLAND
Pass 21,543 18,083 29,983 18,991 20,076 33,721 2,323 144,720
Special Mention - 342 813 205 - 220 - 1,580
Substandard 188 - - - 65 57 - 310
Total Farmland 21,731 18,425 30,796 19,196 20,141 33,998 2,323 146,610
Current-period gross charge-offs - - - - - - - -
HOME EQUITY
Pass 1,031 1,438 3,248 362 483 2,234 88,230 97,026
Special Mention - - - - - 22 93 115
Substandard - - - 43 - 89 270 402
Total Home Equity 1,031 1,438 3,248 405 483 2,345 88,593 97,543
Current-period gross charge-offs - - - - - - - -
CONSUMER
Pass 10,828 7,580 4,547 1,666 961 798 2,001 28,381
Special Mention - 8 - - - - - 8
Substandard - 66 19 - 24 14 1 124
Total Consumer 10,828 7,654 4,566 1,666 985 812 2,002 28,513
Current-period gross charge-offs - 23 15 5 1 15 6 65
COMMERCIAL
Pass 29,540 25,748 19,189 15,851 17,617 6,208 27,839 141,992
Special Mention - 127 95 - - - 370 592
Substandard 1,192 41 6 22 - 190 4 1,455
Total Commercial 30,732 25,916 19,290 15,873 17,617 6,398 28,213 144,039
Current-period gross charge-offs - - - - - 10 - 10
AGRICULTURAL
Pass 39,001 21,690 9,014 4,215 3,143 1,608 52,494 131,165
Special Mention 1,811 159 15 - - 37 596
Substandard - - - - 1 515 47 563
Total Agricultural 40,812 21,849 9,029 4,215 3,144 2,160 53,137 134,346
Current-period gross charge-offs - - - - - - - -
TOTAL LOANS
Pass 228,082 187,643 335,262 201,645 108,303 220,996 223,279 1,505,210
Special Mention 1,811 896 1,546 205 - 279 1,059 5,796
Substandard 1,380 801 463 1,285 92 5,297 322 9,640
Total $ 231,273 $ 189,340 $ 337,271 $ 203,135 $ 108,395 $ 226,572 $ 224,660 $ 1,520,646

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3.

LOANS RECEIVABLE

– continued

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

March 31, 2025
Loans Past Due and Still Accruing
90 Days Nonaccrual Nonaccrual
30-89 Days and Loans with Loans with Current Total
Past Due Greater Total no ACL ACL Loans Loans
(In Thousands)
Real estate loans:
Residential 1-4 family $ 394 $ 623 $ 1,017 $ 429 $ - $ 148,253 $ 149,699
Residential 1-4 family construction 1,328 - 1,328 201 - 43,979 45,508
Commercial real estate 397 953 1,350 453 - 664,462 666,265
Commercial construction and development 34 965 999 1 - 109,107 110,107
Farmland - - - 425 - 153,031 153,456
Other loans:
Home equity 486 - 486 385 - 99,793 100,665
Consumer 195 - 195 83 38 26,663 26,978
Commercial 457 97 554 193 4 138,917 139,668
Agricultural 215 - 215 489 - 130,458 131,162
Total $ 3,506 $ 2,638 $ 6,144 $ 2,659 $ 42 $ 1,514,663 $ 1,523,508
December 31, 2024
--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Loans Past Due and Still Accruing
90 Days Nonaccrual Nonaccrual
30-89 Days and Loans with Loans with Current Total
Past Due Greater Total no ACL ACL Loans Loans
(In Thousands)
Real estate loans:
Residential 1-4 family $ 1,326 $ 623 $ 1,949 $ 469 $ - $ 151,303 $ 153,721
Residential 1-4 family construction - - - 961 - 44,740 45,701
Commercial real estate 5,739 - 5,739 268 - 639,955 645,962
Commercial construction and development 951 - 951 2 - 123,258 124,211
Farmland 54 - 54 190 - 146,366 146,610
Other loans:
Home equity 382 - 382 335 - 96,826 97,543
Consumer 195 - 195 98 23 28,197 28,513
Commercial 1,064 - 1,064 200 4 142,771 144,039
Agricultural 566 - 566 677 - 133,103 134,346
Total $ 10,277 $ 623 $ 10,900 $ 3,200 $ 27 $ 1,506,519 $ 1,520,646

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3. LOANS RECEIVABLE

– continued

Interest income recognized on nonaccrual loans for the three months ended March 31, 2025 and 2024 is considered insignificant. Interest payments received on a cash basis related to nonaccrual loans were $425,000 at March 31, 2025 and $522,000 at December 31, 2024.

The following tables presents the amortized cost basis of collateral-dependent loans by class of loans.

March 31, 2025
Real Estate Business Assets Other
(In Thousands)
Real estate loans:
Residential 1-4 family $ 871 $ - $ -
Residential 1-4 family construction 200 - -
Commercial real estate 1,316 230 -
Commercial construction and development 966 - -
Farmland 259 - -
Other loans:
Home equity 386 - -
Consumer - - 96
Commercial - 357 4
Agricultural 35 - -
Total $ 4,033 $ 587 $ 100
December 31, 2024
--- --- --- --- --- --- ---
Real Estate Business Assets Other
(In Thousands)
Real estate loans:
Residential 1-4 family $ 967 $ - $ -
Residential 1-4 family construction 961 - -
Commercial real estate 623 228 -
Commercial construction and development 772 - -
Farmland 108 - -
Other loans:
Home equity 216 - -
Consumer - - 104
Commercial - 220 4
Agricultural 37 244 -
Total $ 3,684 $ 692 $ 108

During the three months ended March 31, 2025, the Company modified four loans. The first loan was a home equity line of credit loan with an amortized cost basis of $45,000 or 0.04% of home equity loans by terming out the current 10-year term and extending to a 15-year term with a fixed interest rate. There was no forgiveness of principal, and the loan was current with its modified terms as of March 31, 2025. The second loan was a commercial real estate loan with an amortized cost basis of $209,000 or 0.03% of commercial real estate loans by extending the due date to seasonal from monthly and decreasing the interest rate. There was no forgiveness of principal, and the loan was current with its modified terms as of March 31, 2025. The third loan was an agricultural loan with an amortized cost basis of $96,000 or 0.07% of agricultural loans by extending the loan term 12 months. There was no forgiveness of principal, and the loan was current with its modified terms as of March 31, 2025. The fourth loan was an agricultural loan with an amortized cost basis of $156,000 or 0.12% of commercial real estate loans by extending the loan term 12 months. There was no forgiveness of principal, and the loan was current with its modified terms as of March 31, 2025.

During the three months ended March 31, 2024, the Company did not modify any loans.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 4. MORTGAGE SERVICING RIGHTS

The Company is servicing mortgage loans for the benefit of others which are not included in the condensed consolidated statements of financial condition and have unpaid principal balances of $2,007,025,000 and $2,016,242,000 at  March 31, 2025 and December 31, 2024, respectively. Servicing loans for others generally consists of collecting mortgage payments, maintaining escrow accounts, disbursing payments to investors and foreclosure processing. Mortgage loan servicing fees were $1,256,000 and $1,304,000 for the three months ended March 31, 2025 and 2024, respectively. These fees, net of amortization, are included in mortgage banking, net, which is a component of noninterest income on the condensed consolidated statements of income.

Custodial balances maintained in connection with the foregoing loan servicing are included in noninterest checking deposits and were $19,534,000 and $10,077,000 at  March 31, 2025 and December 31, 2024, respectively.

The following table is a summary of activity in mortgage servicing rights:

As of or For the
Three Months Ended
March 31,
2025 2024
(In Thousands)
Mortgage servicing rights:
Beginning balance $ 15,376 $ 15,853
Mortgage servicing rights capitalized 271 252
Amortization of mortgage servicing rights (365 ) (367 )
Ending balance $ 15,282 $ 15,738

The fair values of these mortgage servicing rights were $20,247,000 and $20,370,000 at  March 31, 2025 and December 31, 2024, respectively. The fair value of mortgage servicing rights was determined at loan level, depending on the interest rate and term of the specific loan, using the following valuation assumptions:

March 31, December 31,
2025 2024
Key assumptions:
Discount rate 12% 12%
Prepayment speed range 0 - 204% 0 - 209%
Weighted average prepayment speed 111% 110%

NOTE 5. DEPOSITS

Deposits are summarized as follows:

March 31, December 31,
2025 2024
(In Thousands)
Noninterest checking $ 411,272 $ 419,211
Interest-bearing checking 211,422 221,476
Savings 212,462 210,572
Money market 396,399 367,094
Time certificates of deposit 458,411 462,875
Total $ 1,689,966 $ 1,681,228

Time certificates of deposit include $6,151,000 and $0 of fixed rate brokered certificates at March 31, 2025 and December 31, 2024, respectively.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 6. OTHER LONG-TERM DEBT

Other long-term debt consisted of the following:

March 31, 2025 December 31, 2024
Unamortized Unamortized
Debt Debt
Principal Issuance Principal Issuance
Amount Costs Amount Costs
(In Thousands)
Subordinated debentures fixed at 5.50% to floating, due 2030 $ 15,000 $ (177 ) $ 15,000 $ (185 )
Subordinated debentures fixed at 3.50% to floating, due 2032 40,000 (792 ) 40,000 (821 )
Subordinated debentures variable at 3-Month SOFR plus 1.68%, due 2035 5,155 - 5,155 -
Total other long-term debt $ 60,155 $ (969 ) $ 60,155 $ (1,006 )

In January 2022, the Company completed the issuance of $40,000,000 in aggregate principal amount of subordinated notes due in 2032 in a private placement transaction to certain institutional accredited investors and qualified buyers. The notes bear interest at an annual fixed rate of 3.50% payable semi-annually. Starting February 1, 2027, interest will accrue at a floating rate per annum equal to a benchmark rate, which is expected to be three-month term Secured Overnight Financing Rate ("SOFR") plus a spread of 218.0 basis points, payable quarterly. The notes are subject to redemption at the option of the Company on or after February 1, 2027. The subordinated debentures qualify as Tier 2 capital for regulatory capital purposes.

In June 2020, the Company completed the issuance of $15,000,000 in aggregate principal amount of subordinated notes due in 2030 in a private placement transaction to certain qualified institutional accredited investors. The notes bear interest at an annual fixed rate of 5.50% payable semi-annually. Starting *July 1, 2025,*interest will accrue at a floating rate per annum equal to a benchmark rate, which is expected to be three-month term SOFR plus a spread of 509.0 basis points, payable quarterly. The notes are subject to redemption at the option of the Company on or after July 1, 2025. The subordinated debentures qualify as Tier 2 capital for regulatory capital purposes.

In September 2005, the Company completed the private placement of $5,155,000 in subordinated debentures to 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 three-month LIBOR plus 1.42% until June 30, 2023,

making the rate 6.20% as of December 31, 2023. In December of 2022, Governors of the Federal Reserve System adopted final rule 12 C.F.R. Part 253, Regulation Implementing the Adjustable Interest Rate (LIBOR) Act. Rule 253 identified SOFR-benchmark rates to replace LIBOR in certain financial contracts after June 30, 2023. As a result, the variable rate for interest payable converted to three-month CME Term SOFR plus 1.68% beginning during the quarter ended March 31, 2024. The rate was 5.97% as of March 31, 2025. 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. The subordinated debentures qualify as Tier 1 capital for regulatory purposes.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 7. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

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

Unrealized
(Losses) Gains
on Securities
Available-for-Sale
(In Thousands)
Balance, January 1, 2025 $ (20,146 )
Other comprehensive income, before reclassifications and income taxes 1,640
Amounts reclassified from accumulated other comprehensive loss, before income taxes -
Income tax provision (439 )
Total other comprehensive income 1,201
Balance, March 31, 2025 $ (18,945 )
Balance, January 1, 2024 $ (19,945 )
Other comprehensive loss, before reclassifications and income taxes (1,790 )
Amounts reclassified from accumulated other comprehensive loss, before income taxes -
Income tax benefit 472
Total other comprehensive loss (1,318 )
Balance, March 31, 2024 $ (21,263 )

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 8. EARNINGS PER COMMON SHARE

The computations of basic and diluted earnings per common share are as follows:

Three Months Ended
March 31,
2025 2024
(Dollars in Thousands, Except Per Share Data)
Basic weighted average shares outstanding 7,812,248 7,824,928
Dilutive effect of stock compensation 11,388 10,376
Diluted weighted average shares outstanding 7,823,636 7,835,304
Net income available to common shareholders $ 3,239 $ 1,898
Basic earnings per common share $ 0.41 $ 0.24
Diluted earnings per common share $ 0.41 $ 0.24
Restricted stock units excluded from the diluted average outstanding share calculation because their effect would be anti-dilutive 2,478 21,698

NOTE 9. DERIVATIVES AND HEDGING ACTIVITIES

The Company enters into commitments to originate and sell mortgage loans. The Bank uses derivatives to hedge the risk of changes in fair values of interest rate lock commitments and mortgage loans held-for-sale. An optimal amount of mortgage loans are sold directly into bulk commitments with investors at the time an interest rate is locked, other loans are sold on an individual best-efforts basis at the time an interest rate is locked, and the remaining balance of locked loans are hedged using To-Be-Announced (“TBA”) mortgage-backed securities or bulk mandatory forward loan sale commitments.

Derivatives are accounted for as free-standing or economic derivatives and are measured at fair value. Derivatives are recorded as either other assets or other liabilities on the condensed consolidated statements of condition.

Derivatives are summarized as follows:

March 31, 2025 December 31, 2024
Notional Fair Value Notional Fair Value
Amount Asset Liability Amount Asset Liability
(In Thousands)
Interest rate lock commitments $ 11,946 $ - $ 28 $ 10,155 $ - $ 103
Forward TBA mortgage-backed securities 8,000 - 24 10,000 142 -
Mandatory forward commitments 2,750 - 1 - - -

Changes in the fair value of the derivatives are recorded in mortgage banking, net, within noninterest income on the condensed consolidated statements of income. Net losses of $93,000 were recorded for the three months ended March 31, 2025, compared to net losses of $22,000 for the three months ended March 31, 2024.

NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS

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.

Assets and liabilities that are measured at fair value are grouped in three levels within the fair value hierarchy based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.

The fair value hierarchy is as follows:

■ Level 1 Inputs – Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities.
■ Level 2 Inputs – Valuations are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuations for which all significant assumptions are observable or can be corroborated by observable market data.
--- ---
■ Level 3 Inputs – Valuations are based on unobservable inputs that may include significant management judgment and estimation.
--- ---

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 at the reporting date, is set forth below.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS

– continued

Available-for-Sale Securities – Securities classified as available-for-sale are reported at fair value utilizing Level 1 (nationally recognized securities exchanges) and Level 2 inputs. For level 2 securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include but is not limited to 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.

Loans Held-for-Sale – These loans are reported at fair value. Fair value is determined based on expected proceeds based on committed sales contracts and commitments of similar loans if not already committed and are considered Level 2 inputs.

Derivative Instruments – The fair value of the interest rate lock commitments, forward TBA mortgage-backed securities and mandatory forward commitments are estimated using quoted or published market prices for similar instruments and adjusted for factors such as pull-through rate assumptions based on historical information, where appropriate. Interest rate lock commitments are considered Level 3 inputs and forward TBA mortgage-backed securities and mandatory forward commitments are considered Level 2 inputs.

Collateral-Dependent Loans– Individually reviewed collateral-dependent loans are reported at the fair value of the underlying collateral less costs to sell. Collateral-dependent loans are considered Level 3 inputs. Collateral values are estimated using Level 3 inputs based on internally customized discounting criteria.

Real Estate and Other Repossessed Assets – Fair values are determined at the time the loan is foreclosed upon and the asset is transferred from loans. The value is based primarily on third party appraisals, less costs to sell and are considered Level 3 inputs for determining fair value. Repossessed assets are reviewed and evaluated periodically for additional impairment and adjusted accordingly.

Mortgage Servicing Rights ****** – The fair value of mortgage servicing rights are estimated using net present value of expected cash flows based on a third party model that incorporates industry assumptions and is adjusted for factors such as prepayment speeds and are considered Level 3 inputs.

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, 2025
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 obligations $ - $ 4,909 $ - $ 4,909
U.S. treasury obligations 47,737 - - 47,737
Municipal obligations - 115,662 - 115,662
Corporate obligations - 3,146 - 3,146
Mortgage-backed securities - 28,073 - 28,073
Collateralized mortgage obligations - 84,756 - 84,756
Asset-backed securities - 7,378 - 7,378
Loans held-for-sale - 6,223 - 6,223
Financial liabilities:
Forward TBA mortgage-backed securities - 24 - 24
Interest rate lock commitments - - 28 28
Mandatory forward commitments - 1 - 1
December 31, 2024
--- --- --- --- --- --- --- --- ---
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 obligations $ - $ 5,195 $ - $ 5,195
U.S. treasury obligations 46,913 - - 46,913
Municipal obligations - 117,877 - 117,877
Corporate obligations - 4,162 - 4,162
Mortgage-backed securities - 28,235 - 28,235
Collateralized mortgage obligations - 82,623 - 82,623
Asset-backed securities - 7,585 - 7,585
Loans held-for-sale - 13,368 - 13,368
Forward TBA mortgage-backed securities - 142 - 142
Financial liabilities:
Interest rate lock commitments - - 103 103

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS – continued

Certain financial assets may be measured at fair value on a nonrecurring basis. These assets are subject to fair value adjustments that result from the application of lower of cost or fair value accounting or write-downs of individual assets, such as impaired loans that are collateral-dependent, real estate and other repossessed assets and mortgage servicing rights.

The following table summarizes financial assets measured at fair value on a nonrecurring basis for which a nonrecurring change in fair value has been recorded during the reporting periods presented:

March 31, 2025
Level 1 Level 2 Level 3 Total Fair
Inputs Inputs Inputs Value
(In Thousands)
Collateral-dependent loans individually evaluated, net of ACL $ - $ - $ 104 $ 104
December 31, 2024
--- --- --- --- --- --- --- --- ---
Level 1 Level 2 Level 3 Total Fair
Inputs Inputs Inputs Value
(In Thousands)
Collateral-dependent loans individually evaluated, net of ACL $ - $ - $ 96 $ 96

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.

Principal Significant Range of
Valuation Unobservable Significant Input
Instrument Technique Inputs Values
Collateral-dependent loans individually evaluated Fair value of underlying collateral Discount applied to the obtained appraisal 10-30%
Real estate and other repossessed assets Fair value of collateral Discount applied to the obtained appraisal 10-30%
Interest rate lock commitments Internal pricing model Pull-through expectations 85-95%

The following tables provide a reconciliation of assets and liabilities measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the three months ended March 31, 2025.

Three Months Ended
March 31,
2025 2024
Interest Rate Lock Commitments
(In Thousands)
Beginning balance $ (103 ) $ 15
Purchases and issuances (18 ) (140 )
Sales and settlements 93 62
Ending balance $ (28 ) $ (63 )
Unrealized gains (losses) related to items held at end of period $ 75 $ (78 )

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS – continued

The tables below summarize the estimated fair values of financial instruments of the Company, whether or not recognized at fair value on the condensed consolidated statements of condition. The tables are followed by methods and assumptions that were used by the Company in estimating the fair value of the classes of financial instruments.

March 31, 2025
Total
Level 1 Level 2 Level 3 Estimated Carrying
Inputs Inputs Inputs Fair Value Amount
(In Thousands)
Financial assets:
Cash and cash equivalents $ 22,805 $ - $ - $ 22,805 $ 22,805
FHLB stock - 7,101 - 7,101 7,101
FRB stock - 4,131 - 4,131 4,131
Loans receivable, gross - - 1,483,592 1,483,592 1,523,508
Mortgage servicing rights - - 20,247 20,247 15,282
Financial liabilities:
Non-maturing interest-bearing deposits - 820,283 - 820,283 820,283
Time certificates of deposit - - 456,806 456,806 458,411
FHLB advances and other borrowings - - 125,102 125,102 124,952
Other long-term debt - - 58,679 58,679 60,155
December 31, 2024
--- --- --- --- --- --- --- --- --- --- ---
Total
Level 1 Level 2 Level 3 Estimated Carrying
Inputs Inputs Inputs Fair Value Amount
(In Thousands)
Financial assets:
Cash and cash equivalents $ 31,559 $ - $ - $ 31,559 $ 31,559
FHLB stock - 7,778 - 7,778 7,778
FRB stock - 4,131 - 4,131 4,131
Loans receivable, gross - - 1,466,511 1,466,511 1,520,646
Mortgage servicing rights - - 20,370 20,370 15,376
Financial liabilities:
Non-maturing interest-bearing deposits - 799,142 - 799,142 799,142
Time certificates of deposit - - 461,254 461,254 462,875
FHLB advances and other borrowings - - 141,057 141,057 140,930
Other long-term debt - - 58,024 58,024 60,155

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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

Introduction ****

Eagle Bancorp Montana, Inc. is a bank holding company registered under the Bank Holding Company Act, is incorporated under the laws of Delaware and headquartered in Helena, Montana. Its wholly-owned subsidiary, Opportunity Bank of Montana (the "Bank"), is a Montana-state-chartered bank that is a member of the Federal Reserve System.

This discussion and analysis provides information that management believes is necessary to understand Eagle's financial condition, changes in financial condition, results of operations, and cash flows for the three months ended March 31, 2025, as compared to 2024. The following should be read in conjunction with the Company's Consolidated Financial Statements, and accompanying Notes thereto, for the year ended December 31, 2024, included in Eagle's Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (SEC) on March 14, 2025, and in conjunction with the Condensed Consolidated Financial Statements, and accompanying Notes thereto, included in Part I - Item 1. Financial Statements. The results of operations for the three months ended March 31, 2025, are not necessarily indicative of the future results that may be attained for the entire year or other interim periods.

Executive Summary

The Company’s primary business activity is the ownership of the Bank. The Bank focuses on consumer, commercial, and agricultural lending. It engages in typical banking activities: acquiring deposits from local markets and originating loans and investing in securities. Our earnings depend primarily on our level of net interest income, which is the difference between interest earned on our interest-earning assets, consisting primarily of loans and investment securities, and the interest paid on interest-bearing liabilities, consisting primarily of deposits, borrowed funds, and trust-preferred securities. Net interest income is a function of our interest rate spread, which is the difference between the average yield earned on our interest-earning assets and the average rate paid on our interest-bearing liabilities, as well as a function of the average balance of interest-earning assets compared to interest-bearing liabilities. Also contributing to our earnings is noninterest income, which consists primarily of service charges and fees on loan and deposit products and services, net gains and losses on sale of assets, and mortgage loan service fees. Net interest income and noninterest income are offset by provisions for credit losses, general administrative and other expenses, including salaries and employee benefits and occupancy and equipment costs, as well as by state and federal income tax expense.

The Bank has focused on diversifying the loan portfolio over the past decade, adding commercial and agricultural loans to the strong mortgage lending proficiency. Loan originations represented by single-family residential mortgages enabled the Bank 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.). The Bank has grown the commercial loan portfolio in both real estate and non-real estate, and further added agricultural loans, which have a shorter term and slightly higher interest rate, through acquisitions. The purpose of diversification is to mitigate the Bank’s exposure to specific market segments, as well as to improve our ability to manage our interest rate spread. 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 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, and has recently been, adversely affected in periods of lower mortgage activity.

Management continues to focus on improving the Bank’s earnings. Management believes the Bank needs 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 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 this strategy is funding growth in an efficient manner. It may become more difficult to maintain deposit growth due to significant competition, the current conditions in the banking industry 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 decreased the federal funds target rate to 4.50% during the year ended December 31, 2024. The rate remained at 4.50% during the three months ended March 31, 2025.

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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, 2025 and December 31, 2024.

Total assets were $2.09 billion at March 31, 2025, a decrease of $14.67 million, or 0.7% from $2.10 billion at December 31, 2024. Loans receivable, net increased by $2.99 million or 0.2% from December 31, 2024. Securities available-for-sale decreased $930,000, or 0.3% from December 31, 2024. Total liabilities were $1.91 billion at March 31, 2025, a decrease of $17.49 million, or 0.9% from $1.93 billion at December 31, 2024. The decrease was largely due to a decrease in FHLB advances and other borrowings and offset by an increase in total deposits. Total borrowings decreased $15.94 million from December 31, 2024, and total deposits increased $8.74 million from December 31, 2024. Total shareholders’ equity increased $2.80 million, or 1.6% from December 31, 2024.

Financial Condition Details

Investment Activities

The following table summarizes investment activities:

March 31, December 31,
2025 2024
Fair Value Percentage of Total Fair Value Percentage of Total
(Dollars in Thousands)
Securities available-for-sale:
U.S. government and agency obligations $ 4,909 1.68 % $ 5,195 1.78 %
U.S. treasury obligations 47,737 16.37 46,913 16.03
Municipal obligations 115,662 39.65 117,877 40.29
Corporate obligations 3,146 1.08 4,162 1.42
Mortgage-backed securities 28,073 9.63 28,235 9.65
Collateralized mortgage obligations 84,756 29.06 82,623 28.24
Asset-backed securities 7,378 2.53 7,585 2.59
Total securities available-for-sale $ 291,661 100.00 % $ 292,590 100.00 %

Securities available-for-sale were $291.66 million at March 31, 2025, a decrease of $930,000, or 0.3%, from $292.59 million at December 31, 2024. The decrease was primarily due to maturity, principal payments and call activity of $5.33 million offset by a security purchase of $3.02 million and an increase in fair value of $1.64 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

Lending Activities

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

March 31, December 31,
2025 2024
Amount Percent of Total Amount Percent of Total
(Dollars in thousands)
Real estate loans:
Residential 1-4 family (1) $ 149,699 9.83 % $ 153,721 10.11 %
Residential 1-4 family construction 45,508 2.99 45,701 3.01
Total residential 1-4 family 195,207 12.82 199,422 13.12
Commercial real estate 666,265 43.72 645,962 42.48
Commercial construction and development 110,107 7.23 124,211 8.17
Farmland 153,456 10.07 146,610 9.64
Total commercial real estate 929,828 61.02 916,783 60.29
Total real estate loans 1,125,035 73.84 1,116,205 73.41
Other loans:
Home equity 100,665 6.61 97,543 6.41
Consumer 26,978 1.77 28,513 1.88
Commercial 139,668 9.17 144,039 9.47
Agricultural 131,162 8.61 134,346 8.83
Total commercial loans 270,830 17.78 278,385 18.30
Total other loans 398,473 26.16 404,441 26.59
Total loans 1,523,508 100.00 % 1,520,646 100.00 %
Allowance for credit losses (16,720 ) (16,850 )
Total loans, net $ 1,506,788 $ 1,503,796
^(1)^ Excludes loans held-for-sale.
--- ---

Loans receivable, net increased $2.99 million, or 0.2%, to $1.51 billion at March 31, 2025 from $1.50 billion at December 31, 2024. The increase was largely driven by an increase in total commercial real estate loans of $13.05 million in addition to an increase in home equity loans of $3.13 million. The increase was largely offset by a decrease of $7.56 million in commercial loans in additional to decreases in total residential loans of $4.21 million and a decrease of $1.53 million in consumer loans.

Total loan originations were $99.77 million for the three months ended March 31, 2025. Total residential 1-4 family originations were $43.19 million, which includes $35.56 million of loans held-for-sale originations. Total commercial real estate originations were $27.53 million. Total commercial originations were $20.26 million. Home equity loan originations totaled $6.02 million. Consumer loan originations totaled $2.77 million. Loans held-for-sale decreased by $7.15 million to $6.22 million at March 31, 2025 from $13.37 million at December 31, 2024.

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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

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 credit losses. Subsequent write-downs are recorded as a charge to operations. As of March 31, 2025 and December 31, 2024 there was $46,000 and $45,000, respectively, of real estate owned and other repossessed property.

The following table sets forth information regarding nonperforming assets:

March 31, December 31,
2025 2024
(Dollars in Thousands)
Nonaccrual loans
Real estate loans:
Residential 1-4 family $ 429 $ 469
Residential 1-4 family construction 201 961
Commercial real estate 453 268
Commercial construction and development 1 2
Farmland 425 190
Other loans:
Home equity 386 335
Consumer 120 121
Commercial 197 204
Agricultural 489 677
Accruing loans delinquent 90 days or more
Real estate loans:
Residential 1-4 family 623 623
Commercial real estate 953 -
Commercial construction and development 965 -
Other loans:
Commercial 97 -
Total nonperforming loans 5,339 3,850
Real estate owned and other repossessed property, net 46 45
Total nonperforming assets $ 5,385 $ 3,895
Total nonperforming loans to total loans 0.35 % 0.25 %
Total nonperforming loans to total assets 0.26 % 0.18 %
Total nonaccrual loans to total loans 0.18 % 0.21 %
Total nonperforming assets to total assets 0.26 % 0.19 %

Nonaccrual loans as of March 31, 2025 and December 31, 2024 include $583,000 and $591,000, respectively of acquired loans that deteriorated subsequent to the acquisition date.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

The following tables include the composition of the commercial real estate loan category:

March 31, 2025
(In Thousands) Non-Owner Occupied Owner Occupied Total Percent of Total CRE
Automotive related $ - $ 23,468 $ 23,468 3.52 %
Bars and restaurants 5,593 15,781 21,374 3.21
Car washes 990 - 990 0.15
Construction and related industries 18,541 13,927 32,468 4.87
Healthcare and social assistance 10,742 13,963 24,705 3.71
Hospitality industry related - 12,851 12,851 1.93
Hotels and other traveler accommodations 79,993 - 79,993 12.01
Industrial/warehouse 53,869 - 53,869 8.09
Lessors of mini warehouses and self-storage units 16,675 - 16,675 2.50
Lessors of nonresidential buildings 66,938 - 66,938 10.05
Lessors of other real estate property 30,428 - 30,428 4.57
Multifamily 117,347 - 117,347 17.61
Office space 22,220 38,638 60,858 9.13
Other real estate rental and leasing 6,429 - 6,429 0.96
Real estate leasing activities - 28,920 28,920 4.34
Wholesale and retail trade 12,279 12,577 24,856 3.73
Other 37,173 26,923 64,096 9.62
Total commercial real estate $ 479,217 $ 187,048 $ 666,265 100.00
December 31, 2024
--- --- --- --- --- --- --- --- --- ---
(In Thousands) Non-Owner Occupied Owner Occupied Total Percent of Total CRE
Automotive related $ - $ 23,738 $ 23,738 3.67 %
Bars and restaurants 5,030 15,912 20,942 3.24
Car washes 884 - 884 0.14
Construction and related industries 19,717 13,968 33,685 5.21
Healthcare and social assistance 10,483 13,907 24,390 3.78
Hospitality industry related - 13,764 13,764 2.13
Hotels and other traveler accommodations 66,702 - 66,702 10.33
Industrial/warehouse 51,168 - 51,168 7.92
Lessors of mini warehouses and self-storage units 16,682 - 16,682 2.58
Lessors of nonresidential buildings 67,782 - 67,782 10.49
Lessors of other real estate property 31,675 - 31,675 4.90
Multifamily 113,789 - 113,789 17.63
Office space 20,553 38,104 58,657 9.08
Other real estate rental and leasing 6,836 - 6,836 1.06
Real estate leasing activities - 27,465 27,465 4.25
Wholesale and retail trade 11,969 12,705 24,674 3.82
Other 37,876 25,253 63,129 9.77
Total commercial real estate $ 461,146 $ 184,816 $ 645,962 100.00

Commercial real estate loans made up $666.27 million or 43.7% of the Bank's total loan portfolio at March 31, 2025, compared to $645.96 million or 42.5% at December 31, 2024. The Bank's commercial real estate loans are primarily permanent loans secured by improved property such as office buildings, retail stores, commercial warehouses, and apartment buildings. The terms and conditions of each loan are tailored to the needs of the borrower and based on the financial strength of the project and any guarantors. Generally, commercial real estate loans originated by the Bank will not exceed 80.0% of the appraised value or the selling price of the property, whichever is less. The Bank's commercial real estate portfolio's average loan-to-value ratio range was 30% to 49% as of March 31, 2025.

The Bank's asset quality with respect to commercial real estate loans has remained strong despite recent economic and market conditions. The Bank has limited exposure in the office space sector, none of which is located in central business districts. Management believes that the Bank has implemented appropriate risk management practices, including regular and ongoing loan reviews, stress tests, and sensitivity analysis. Loan reviews include monitoring past due rates, non-performing trends, concentrations, loan to values, and other qualitative factors. The Bank's loan policy is robust and is updated annually or as needed to meet the risk mitigation and strategic goals of the bank.

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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,
2025 2024
Percent Percent
Amount of Total Amount of Total
(Dollars in Thousands)
Noninterest checking $ 411,272 24.33 % $ 419,211 24.94 %
Interest-bearing checking 211,422 12.51 221,476 13.17
Savings 212,462 12.57 210,572 12.52
Money market 396,399 23.46 367,094 21.83
Total 1,231,555 72.87 1,218,353 72.46
Certificates of deposit accounts:
IRA certificates 20,994 1.24 21,419 1.27
Brokered certificates 6,151 0.36 - 0.00
Other certificates 431,266 25.53 441,456 26.27
Total certificates of deposit 458,411 27.13 462,875 27.54
Total deposits $ 1,689,966 100.00 % $ 1,681,228 100.00 %

Deposits increased by $8.74 million, or 0.5%, from December 31, 2024 to March 31, 2025. Money market deposits increased $29.31 million, brokered certificates of deposit increased $6.15 million, and savings increased $1.89 million. These increases were partially offset by decreases in other certificates of deposit of $10.19 million, interest-bearing checking of $10.06 million, noninterest checking of $7.94 million, and IRA certificates of $425,000.

The estimated amount of uninsured deposits was approximately $309.0 million or 18% of total deposits at March 31, 2025 compared to approximately $323.0 million or 19% of total deposits at December 31, 2024.

The following table summarizes borrowing activity:

March 31, December 31,
2025 2024
Net Percent Net Percent
Amount of Total Amount of Total
(Dollars in Thousands)
FHLB advances and other borrowings $ 124,952 67.86 % $ 140,930 70.44 %
Other long-term debt:
Subordinated debentures fixed at 5.50% to floating, due 2030 14,823 8.05 14,815 7.40
Subordinated debentures fixed at 3.50% to floating, due 2032 39,208 21.29 39,179 19.58
Subordinated debentures variable, due 2035 5,155 2.80 5,155 2.58
Total other long-term debt 59,186 32.14 59,149 29.56
Total borrowings $ 184,138 100.00 % $ 200,079 100.00 %

Total borrowings decreased by $15.94 million, or 8.0%, to $184.14 million at March 31, 2025 from $200.08 million at December 31, 2024. The decrease is due to a decrease in FHLB advances and other borrowings.

Shareholders’ Equity

Total shareholders’ equity increased by $2.80 million, or 1.6%, to $177.57 million at March 31, 2025 from $174.77 million at December 31, 2024. The increase was primarily attributed to net income of $3.24 million and a decrease in unrealized losses of securities available for sale of $1.20 million. These were offset by dividends paid of $1.14 million and treasury stock repurchases of $755,000.

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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

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.

The following table includes average balances for financial condition items, as well as interest and dividends and average yields related to the average balances. All average balances are daily average balances. Nonaccrual 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,
2025 2024
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 $ 293,273 $ 2,451 3.39 % $ 314,129 $ 2,724 3.48 %
FHLB and FRB stock 11,816 260 8.92 13,323 247 7.44
Loans receivable^(1)^ 1,526,774 23,320 6.19 1,499,293 21,942 5.87
Other earning assets 3,347 38 4.60 3,571 29 3.26
Total interest-earning assets 1,835,210 26,069 5.76 1,830,316 24,942 5.47
Noninterest-earning assets 243,932 236,263
Total assets $ 2,079,142 $ 2,066,579
Liabilities and equity:
Interest-bearing liabilities:
Deposit accounts:
Checking $ 219,912 $ 97 0.18 % $ 220,026 $ 46 0.08 %
Savings 203,079 31 0.06 220,131 35 0.06
Money market 376,988 2,191 2.36 338,715 2,025 2.40
Certificates of deposit 465,718 4,552 3.96 439,932 4,442 4.05
FHLB advances and other borrowings 138,830 1,626 4.75 181,188 2,497 5.53
Other long-term debt 59,174 670 4.59 59,024 683 4.64
Total interest-bearing liabilities 1,463,701 9,167 2.54 1,459,016 9,728 2.67
Noninterest checking 405,652 406,966
Other noninterest-bearing liabilities 40,701 37,960
Total liabilities 1,910,054 1,903,942
Total equity 169,088 162,637
Total liabilities and equity $ 2,079,142 $ 2,066,579
Net interest income/interest rate spread^(2)^ $ 16,902 3.22 % $ 15,214 2.80 %
Net interest margin^(3)^ 3.74 % 3.33 %
Total interest-earning assets to interest-bearing liabilities 125.38 % 125.45 %
^(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 tables present 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,
2025 2024
Due to Due to
Volume Rate Net Volume Rate Net
(In Thousands)
Interest-earning assets:
Investment securities $ (181 ) $ (92 ) $ (273 ) $ (255 ) $ 136 $ (119 )
FHLB and FRB stock (28 ) 41 13 31 109 140
Loans receivable^(1)^ 402 976 1,378 1,720 2,485 4,205
Other earning assets (2 ) 11 9 7 1 8
Total interest-earning assets 191 936 1,127 1,503 2,731 4,234
Interest-bearing liabilities:
Checking - 51 51 (24 ) (116 ) (140 )
Savings (3 ) (1 ) (4 ) (5 ) 5 -
Money Market 229 (63 ) 166 (40 ) 1,119 1,079
Certificates of deposit 260 (150 ) 110 714 2,435 3,149
FHLB advances and other borrowings (584 ) (287 ) (871 ) 1,002 353 1,355
Other long-term debt 2 (15 ) (13 ) 2 3 5
Total interest-bearing liabilities (96 ) (465 ) (561 ) 1,649 3,799 5,448
Change in net interest income $ 287 $ 1,401 $ 1,688 $ (146 ) $ (1,068 ) $ (1,214 )
^(1)^Includes loans held-for-sale.
---
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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, 2025 and 2024

*Net Income.*Eagle’s net income for the three months ended March 31, 2025 was $3.24 million compared to $1.90 million for the three months ended March 31, 2024. The increase of $1.34 million was largely driven by an increase in net interest income after provision for credit losses of $1.51 million. For the current period, basic and diluted earnings per common share were both $0.41. Basic and diluted earnings per common share were both $0.24 for the three months ended March 31, 2024.

Net Interest Income. Net interest income increased to $16.90 million for the three months ended March 31, 2025, from $15.21 million for the three months ended March 31, 2024. The increase of $1.69 million, or 11.1%, was the result of an increase in interest and dividend income of $1.13 million and a decrease in interest expense of $561,000.

Interest and Dividend Income. Interest and dividend income was $26.07 million for the three months ended March 31, 2025, compared to $24.94 million for the three months ended March 31, 2024. The increase of $1.13 million, or 4.5%, was driven by interest and fees on loans, which increased to $23.32 million for the three months ended March 31, 2025, from $21.94 million for the three months ended March 31, 2024. The increase in interest and fees on loans was due to an increase in the average yield on loans, as well as an increase in the average balance of loans. The average interest rate earned on loans receivable increased by 32 basis points, from 5.87% for the three months ended March 31, 2024, to 6.19% for the current period. Interest accretion on purchased loans was $172,000 for the three months ended March 31, 2025, which resulted in a four basis point increase in net interest margin compared to $118,000 for the three months ended March 31, 2024, which resulted in a three basis point increase in net interest margin. Average balances for loans receivable, including loans held-for-sale, for the three months ended March 31, 2025 were $1.53 billion compared to $1.50 billion for the three months ended March 31, 2024. This represents an increase of $27.48 million, or 1.8% and was due to organic growth. Interest on investment securities available-for-sale decreased by $273,000 period over period, primarily due to the decrease in average balances for investments from $314.13 million for the three months ended March 31, 2024 to $293.27 million for the three months ended March 31, 2025. In addition, average interest rates earned on investments decreased from 3.48% for the three months ended March 31, 2024 to 3.39% for the three months ended March 31, 2025.

Interest Expense. Total interest expense was $9.17 million for the three months ended March 31, 2025, compared to $9.73 million for the three months ended March 31, 2024. The decrease of $561,000 was due to a net decrease of $884,000 in interest expense on total borrowings and partially offset by an increase of $323,000 in interest expense on deposits. The decrease in interest expense on total borrowings was driven by the average balance of FHLB advances and other borrowings decreasing from $181.19 million for the three months ended March 31, 2024, to $138.83 million for the three months ended March 31, 2025. The average rate paid on FHLB advances and other borrowings also decreased from 5.53% for the three months ended March 31, 2024, to 4.75% for the three months ended March 31, 2025. The average balance for total deposits was $1.67 billion for the three months ended March 31, 2025, compared to $1.63 billion for the three months ended March 31, 2024. The overall average rate on total deposits was also up slightly from 1.62% for the three months ended March 31, 2024, compared to 1.67% for the three months ended March 31, 2025.

Provision (Recapture) for Credit Losses. Provision for credit losses was $42,000 for the three months ended March 31, 2025, compared to a recapture in provision for credit losses of $135,000 for the three months ended March 31, 2024. The provision for credit losses for the three months ended March 31, 2025 included an increase in the provision for unfunded commitments of $170,000 and offset by a recapture in provision for credit losses on loans of $128,000.

Noninterest Income. Total noninterest income was $4.02 million for the three months ended March 31, 2025, compared to $3.95 million for the three months ended March 31, 2024. The increase of $64,000 or 1.8%, was primarily due to an increase in appreciation in cash surrender value of life insurance of $62,000 due to bank owned life insurance policies purchased in 2024. The increase was largely offset by a decrease in mortgage banking, net, of $52,000. Mortgage banking, net, includes net gain on sale of mortgage loans which decreased to $1.35 million for the three months ended March 31, 2025, compared to $1.41 million for the three months ended March 31, 2024. During the three months ended March 31, 2025, $42.80 million residential mortgage loans were sold compared to $43.56 million in the three months ended March 31, 2024. Mortgage volumes continued to be impacted by the interest rate environment. Gross margin levels decreased 10 basis points from 3.25% for the three months ended March 31, 2024, to 3.15% for the three months ended March 31, 2025.

Noninterest Expense. Noninterest expense was $17.01 million for the three months ended March 31, 2025, compared to $17.03 million for the three months ended March 31, 2024, a decrease of $27,000. Contract changes led to lower data processing expense which decreased 12.8% from $1.53 million for the three months ended March 31, 2024, compared to $1.33 million for the three months ended March 31, 2025. However, occupancy and equipment expense increased $203,000 due to maintenance expense and costs related to opening a new branch.

Provision for Income Taxes. Provision for income taxes was $631,000 for the three months ended March 31, 2025, compared to $370,000 for the three months ended March 31, 2024. The effective tax rate was 16.3% for the current and prior periods.

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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 by regulation to maintain sufficient levels of liquidity for safety and soundness purposes. 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 March 31, 2025 and December 31, 2024.

The Bank’s primary sources of funds are deposits, repayment of loans and mortgage-backed securities, maturities of investments, funds provided from operations, advances from the FHLB of Des Moines and other borrowings. Scheduled repayments of loans and mortgage-backed 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 Company uses liquidity resources principally to fund existing and future loan commitments. It also uses them to fund maturing certificates of deposit and demand deposit withdrawals, for investment purposes, to meet operating expenses and capital expenditures, for dividend payments and for stock repurchases to maintain adequate liquidity levels.

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 the Bank's commitments to make loans and management’s assessment of the Bank's ability to generate funds.

The Company's available borrowing capacity was approximately $437.40 million as of March 31, 2025 and $404.00 million as of December 31, 2024.

March 31, December 31,
2025 2024
Borrowings Remaining Borrowing Borrowings Remaining Borrowing
Outstanding Capacity Outstanding Capacity
(Dollars in Thousands)
Federal Home Loan Bank advances $ 124,952 $ 310,857 $ 140,930 $ 276,664
Federal Reserve Bank discount window - 26,509 - 27,349
Correspondent bank lines of credit - 100,000 - 100,000
Total $ 124,952 $ 437,366 $ 140,930 $ 404,013

During the first quarter of 2023, the FRB offered a new Bank Term Funding Program ("BTFP") for eligible depository institutions. The BTFP offered loans of up to one year in length to institutions pledging collateral eligible for purchase by FRB such as U.S. treasuries, agency securities, and mortgage-backed securities. These assets were valued at par. In March of 2024, the Company accessed borrowings through the BTFP. In September of 2024, the Company paid off the borrowings.

Brokered deposits are another source of funding the Bank may utilize from time to time. As of March 31, 2025, the Bank had $6.15 million in brokered certificates and $5.53 million in brokered money market deposits. As of December 31, 2024, the Bank had no brokered certificates and $5.57 million in brokered money market deposits. Policy limits for brokered deposits are set at 10% of assets.

In addition to bank level liquidity management, Eagle must manage liquidity at the parent company level for various operating needs, including the servicing of debt, the payment of dividends on our common stock, share repurchases, payment of general corporate expense, and potential capital infusions into subsidiaries. The primary source of liquidity for Eagle consists of dividends from the Bank, which is governed by certain rules and regulations of the Montana Division of Banking and Financial Institutions and the Federal Reserve, and access to capital markets. Eagle has a $15.00 million line of credit with a correspondent bank. There was no outstanding balance for this line of credit at March 31, 2025 or December 31, 2024. Eagle's ability to receive dividends from the Bank in future periods will depend on several factors, including, without limitation, the Bank's future profits, asset quality, liquidity, and overall condition. In addition, both the Montana Division of Banking and Financial Institutions and Federal Reserve may require approval to pay dividends, based on certain regulatory statutes and limitations.

Eagle presently believes that the sources of liquidity discussed above, including existing liquid funds on hand, are sufficient to meet its anticipated funding needs in the short and long term. However, if economic conditions were to significantly deteriorate, regulatory capital requirements for Eagle or the Bank were to increase as the result of regulatory directives or otherwise, or Eagle were to believe it is prudent to enhance current liquidity levels, then Eagle may seek additional liquidity from external sources.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

Capital Resources

As of March 31, 2025, 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 0.8% compared to an increase of 1.7% at December 31, 2024. A 200-basis point decrease in interest rates scenario decreased EVE by 7.3% compared to a decrease of 7.9% at December 31, 2024. The Bank is within the guidelines set forth by the Board of Directors for interest rate risk sensitivity in rising interest rate scenarios.

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 as of March 31, 2025. The Bank's actual capital amounts and ratios as of March 31, 2025 are presented in the table below and all of the ratios, with the exception of the Tier 1 capital adjusted total average assets ratio, include the capital conservation buffer of 2.50%.

Minimum
To Be Well
Minimum Required Capitalized Under
for Capital Adequacy Prompt Corrective
Actual Purposes Action Provisions
Amount Ratio Amount Ratio Amount Ratio
(Dollars in Thousands)
March 31, 2025: **** **** ****
Total risk-based capital to risk weighted assets $ 231,557 13.64 % $ 178,284 10.50 % $ 169,794 10.00 %
Tier 1 capital to risk weighted assets 213,267 12.56 144,325 8.50 135,835 8.00
Common equity Tier 1 capital to risk weighted assets 213,267 12.56 118,856 7.00 110,366 6.50
Tier 1 capital to adjusted total average assets 213,267 10.29 82,900 4.00 103,625 5.00
Minimum
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
To Be Well
Minimum Required Capitalized Under
for Capital Adequacy Prompt Corrective
Actual Purposes Action Provisions
Amount Ratio Amount Ratio Amount Ratio
(Dollars in Thousands)
December 31, 2024: **** **** ****
Total risk-based capital to risk weighted assets $ 229,316 13.49 % $ 178,521 10.50 % $ 170,020 10.00 %
Tier 1 capital to risk weighted assets 211,066 12.41 144,517 8.50 136,016 8.00
Common equity Tier 1 capital to risk weighted assets 211,066 12.41 119,014 7.00 110,513 6.50
Tier 1 capital to adjusted total average assets 211,066 10.07 83,861 4.00 104,826 5.00
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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

Impact of Inflation and Changing Prices

Our condensed consolidated financial statements and the accompanying notes, which are found in Part I, Item 1, 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.

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's primary source of revenue. Net interest income is affected by changes in interest rates, the relationship between rates on interest-bearing assets and liabilities, the impact of interest rate 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.

The Bank has established acceptable levels of interest rate risk as follows for an instantaneous and permanent shock in rates: 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 increase or decrease in interest rates of up to 300 basis points, and the subsequent twelve months (i.e. year-2) will not be reduced by more than 20.0% given an immediate increase or decrease in interest rates of up to 300 basis points.

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

Changes in Market Rate Sensitivity Policy Policy
Interest Rates As of March 31, 2025 Limits Limits
(Basis Points) Year 1 Year 2 Year 1 Year 2
+300 -8.7% 3.4% -15.0% -20.0%
+200 -5.8% 4.2% -15.0% -15.0%
+100 -2.6% 5.6% -10.0% -10.0%
-100 1.4% 4.4% -10.0% -10.0%
-200 2.4% 1.9% -15.0% -15.0%
-300 4.2% 0.0% -15.0% -20.0%

Critical Accounting Policies and Estimates

The accounting and financial reporting policies of Eagle are in accordance with generally accepted accounting principles ("GAAP") and conform to the accounting and reporting guidelines prescribed by bank regulatory authorities. Eagle has identified certain of its accounting policies as “critical accounting policies,” consisting of those related to the allowance for credit losses and business combinations. In determining which accounting policies are critical in nature, Eagle has identified the policies that require significant judgment or involve complex estimates. It is management's practice to discuss critical accounting policies with the Board of Directors' Audit Committee on a periodic basis, including the development, selection, implementation, and disclosure of the critical accounting policies. The application of these policies has a significant impact on Eagle’s unaudited interim consolidated financial statements. Eagle’s financial results could differ significantly if different judgments or estimates are used in the application of these policies. All accounting policies described in "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 – Organization and Summary of Significant Accounting Policies" in Eagle’s 2024 Form 10-K should be reviewed for a greater understanding of how we record and report our financial performance. There have been no significant changes to the accounting policies, estimates, and assumptions, or the judgments affecting the application of these estimates and assumptions from those disclosed in Eagle’s 2024 Form 10-K, other than the following:

The excess of consideration paid over fair value of net assets acquired is recorded as goodwill. Goodwill is not amortized but is tested at least annually for impairment or more frequently if events occur or circumstances change that indicate impairment may exist. A goodwill impairment test is performed by comparing the fair value of the reporting unit with its carrying value. An impairment charge is recorded for the amount by which the carrying amount exceeds the reporting unit’s fair value. Estimating the fair value of the reporting unit requires the use of inputs and assumptions including projected earnings of the Company in future years for which there is inherent uncertainty.

During the quarter ended September 30, 2024, Management performed a quantitative goodwill impairment test with assistance from a third-party valuation specialist. The interim determination was primarily driven by a revision in the Company’s earnings outlook in comparison to budget. A weighted average of both the market and income approaches was used in valuing the reporting unit’s fair value. The interim goodwill impairment assessment as of August 31, 2024 concluded that goodwill was not impaired. Our quantitative annual impairment test as of October 31, 2024 also did not result in impairment. However, changing economic conditions that may adversely affect the Company's performance, the fair value of its assets and liabilities, or its stock price could result in future impairment. Any resulting impairment loss could have a material adverse impact on the Company’s financial condition and results of operations. Management will continue to monitor events that could influence this conclusion in the future.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

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, 2025, our disclosure controls and procedures were not effective as of such date due to ongoing remediation of a material weakness in internal control over financial reporting as of December 31, 2024 described below.

We identified a material weakness in internal control over financial reporting related to the design of controls over preparation of the statement of cash flows. Specifically, the Company’s controls were not designed at a sufficient level of precision to ensure the proper classification of borrowings as short-term or long-term so that the borrowings from and repayments to were appropriately presented either on a net basis or a gross basis within the financing section of the statement of cash flows. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. The control deficiency created a reasonable possibility that a material misstatement to the consolidated financial statements would not be prevented or detected on a timely basis.

Management, with oversight from the Audit Committee, has implemented and continues to implement measures designed to ensure that the control deficiency contributing to the material weakness is remediated so that controls are designed, implemented and operating effectively. The remediation action includes restructuring the design of control activities, including consideration of system impacts, surrounding the classification of borrowing activities in order to facilitate appropriate presentation in the financial statements. We believe this action will remediate the material weakness. The weakness will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. The remediation of this material weakness is still in process.

Except as noted above, 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

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

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 1, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024.

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

On April 24, 2025, Eagle's Board of Directors (the "Board") authorized the repurchase of up to 400,000 shares of its common stock beginning May 1, 2025. 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 on market conditions and other corporate considerations. The plan expires on May 1, 2026.

On April 18, 2024, Eagle's Board of Directors (the "Board") authorized the repurchase of up to 400,000 shares of its common stock beginning May 1, 2024 (the "2024 Repurchase Plan"). Under the 2024 Repurchase 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 on market conditions and other corporate considerations. No shares were purchased during the second or third quarter of 2024 under the 2024 Repurchase Plan. During the fourth quarter of 2024, 25,000 shares were purchased under the 2024 Repurchase Plan at an average of $16.74.  The following table summarized the Company's purchase of its common stock for the three months ended March 31, 2025 under the 2024 Repurchase Plan.

Total Number Maximum
of Shares Number of
Purchased Shares that
Total as Part of May Yet Be
Number of Average Publicly Purchased
Shares Price Paid Announced Plans Under the Plans
Purchased Per Share or Programs or Programs
January 1, 2025 through January 31, 2025 50,000 $ 15.11 50,000 325,000
February 1, 2025 through February 28, 2025 - - - 325,000
March 1, 2025 through March 31, 2025 - - - 325,000
Total 50,000 $ 15.11 50,000

During April 2025, the Company purchased 25,000 shares at an average price of $16.34 per share under the 2024 Repurchase Plan. The 2024 Repurchase Plan expired on May 1, 2025.

On April 20, 2023, the Board authorized the repurchase of up to 400,000 shares of its common stock beginning May 1, 2023. Under the plan, shares could be purchased by the Company on the open market or in privately negotiated transactions. The extent to which the company repurchased its shares and the timing of such repurchases depended on market conditions and other corporate considerations. During the second quarter of 2023, 17,901 shares were purchased under this plan at an average price of $12.89. No shares were purchased during the third or fourth quarter of 2023 under this plan. No shares were purchased during the first or second quarter of 2024 under this plan.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information.

During the three months ended March 31, 2025, none of our directors or officers (as defined in Exchange Act Rule 16a-1(f)) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

  • 39 -

Table of Contents

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

Part II - OTHER INFORMATION - continued

Item 6. Exhibits. ****
Exhibit<br> <br>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. (incorporated by reference to Exhibit 3.2 of our Quarterly Report on Form 10-Q filed on May 9, 2019).
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).
31.1 Certification by Laura F. Clark, 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 Miranda J. Spaulding, 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 Laura F. Clark, Chief Executive Officer, and Miranda J. Spaulding, 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 Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)^(1)^
101.SCH Inline XBRL Taxonomy Extension Schema Document^(1)^
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document^(1)^
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document^(1)^
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document^(1)^
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document^(1)^
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
^(1)^ These interactive data files shall not be deemed filed for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, or Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under those sections.
  • 40 -

Table of Contents

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

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 8, 2025 By: /s/ Laura F. Clark
Laura F. Clark
President/CEO
Date: May 8, 2025 By: /s/ Miranda J. Spaulding
Miranda J. Spaulding
SVP/CFO
  • 41 -

ex_793669.htm

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, 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 8, 2025

/s/ Laura F. Clark
Laura F. Clark
Chief Executive Officer
(Principal Executive Officer)

ex_793670.htm

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, Miranda J. Spaulding 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 8, 2025

/s/ Miranda J. Spaulding
Miranda J. Spaulding
Senior Vice President, Chief Financial Officer<br><br> <br>(Principal Financial Officer)

ex_793671.htm

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, 2025, as filed with the Securities and Exchange Commission on the date hereof (the ‘Report’), we, Laura F. Clark, Chief Executive Officer of the Company, and Miranda J. Spaulding, 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/ Laura F. Clark /s/ Miranda J. Spaulding
--- ---
Laura F. Clark Miranda J. Spaulding
Chief Executive Officer<br><br> <br>(Principal Executive Officer)<br><br> <br>May 8, 2025 Chief Financial Officer and Principal Accounting Officer<br><br> <br>(Principal Financial Officer)<br><br> <br>May 8, 2025

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.

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