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What changed in Eagle Bancorp Montana, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Eagle Bancorp Montana, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+247 added−230 removedSource: 10-K (2025-03-14) vs 10-K (2024-03-06)

Top changes in Eagle Bancorp Montana, Inc.'s 2024 10-K

247 paragraphs added · 230 removed · 201 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

64 edited+6 added−11 removed111 unchanged
Biggest changeOther loans must be approved at our main offices as disclosed below. Loan consultants or loan brokers are generally not utilized for either residential or commercial lending activities. After receiving a loan application from a prospective borrower, a credit report and verifications are obtained to confirm specific information relating to the loan applicant’s employment, income and credit standing.
Biggest changeOur branch managers and loan officers located at our headquarters and in branches, have authority to approve certain types of loans when presented with a completed application. Other loans must be approved at our main offices as disclosed below. Loan consultants or loan brokers are generally not utilized for either residential or commercial lending activities.
ITEM 1. DESCRIPTION OF BUSINESS. Overview Eagle Bancorp Montana, Inc. (“Eagle” or the “Company”), a Delaware corporation, is a bank holding company registered under the Bank Holding Company Act of 1956 that holds 100% of the capital stock of Opportunity Bank of Montana (the “Bank”), formerly American Federal Savings Bank (“AFSB”).
ITEM 1. DESCRIPTION OF BUSINESS. Overview Eagle Bancorp Montana, Inc. (“Eagle” or the “Company”), is a Delaware corporation, and a bank holding company registered under the Bank Holding Company Act of 1956 that holds 100% of the capital stock of Opportunity Bank of Montana (the “Bank”), formerly American Federal Savings Bank (“AFSB”).
The rules adopted by the Securities and Exchange Commission under the Sarbanes-Oxley Act have several requirements, including having these officers certify that: they are responsible for establishing, maintaining and regularly evaluating the effectiveness of our internal control over financial reporting; they have made certain disclosures to our auditors and the audit committee of the board of directors about our internal control over financial reporting; and they have included information in our quarterly and annual reports about their evaluation and whether there have been changes in our internal control over financial reporting or in other factors that could materially affect internal control over financial reporting. 13 Table of Contents
The rules adopted by the Securities and Exchange Commission under the Sarbanes-Oxley Act have several requirements, including having these officers certify that: they are responsible for establishing, maintaining and regularly evaluating the effectiveness of our internal control over financial reporting; they have made certain disclosures to our auditors and the audit committee of the board of directors about our internal control over financial reporting; and they have included information in our quarterly and annual reports about their evaluation and whether there have been changes in our internal control over financial reporting or in other factors that could materially affect internal control over financial reporting. 10 Table of Contents
We generally require title insurance on first mortgage loans and fire and casualty insurance on all properties securing loans, which insurance must be maintained during the entire term of the loan. 6 Table of Contents Loan Commitments We generally provide commitments to fund fixed and adjustable-rate single-family mortgage loans for periods up to 60 days at a specified term and interest rate, and other loan categories for shorter time periods.
We generally require title insurance on first mortgage loans and fire and casualty insurance on all properties securing loans, which insurance must be maintained during the entire term of the loan. 5 Table of Contents Loan Commitments We generally provide commitments to fund fixed and adjustable-rate single-family mortgage loans for periods up to 60 days at a specified term and interest rate, and other loan categories for shorter time periods.
The contents on or accessible through our website are not incorporated into this report. Recent Events Acquisitions As a continuing part of its growth strategy, the Company intends to enhance its market share in Montana through organic growth and opportunistic acquisitions. Potential acquisitions are periodically evaluated by the Company's Merger and Acquisition Committee.
The contents on or accessible through our website are not incorporated into this report. Acquisitions As a continuing part of its growth strategy, the Company intends to enhance its market share in Montana through organic growth and opportunistic acquisitions. Potential acquisitions are periodically evaluated by the Company's Merger and Acquisition Committee.
Assessments paid to the FDIC by the Bank and other banking institutions are used to fund the FDIC’s Federal Deposit Insurance Fund. 10 Table of Contents Insurance of Accounts and Regulation by the FDIC As insurer of deposits in banks, the FDIC imposes deposit insurance premiums and is authorized to conduct examinations of and to require reporting by FDIC-insured institutions.
Assessments paid to the FDIC by the Bank and other banking institutions are used to fund the FDIC’s Federal Deposit Insurance Fund. 8 Table of Contents Insurance of Accounts and Regulation by the FDIC As insurer of deposits in banks, the FDIC imposes deposit insurance premiums and is authorized to conduct examinations of and to require reporting by FDIC-insured institutions.
At December 31, 2023 , we were in compliance with these regulations. Holding Company Regulation General Eagle is a bank holding company subject to regulatory oversight of the FRB. Eagle is required to register and file reports with the FRB and is subject to regulation and examination by the FRB.
At December 31, 2024 , we were in compliance with these regulations. Holding Company Regulation General Eagle is a bank holding company subject to regulatory oversight of the FRB. Eagle is required to register and file reports with the FRB and is subject to regulation and examination by the FRB.
As of December 31, 2023 , commercial real estate and commercial business loans constituted approximately 78.64% of total loans; ● Continue to emphasize the attraction and retention of core deposits; ● Seek opportunities where presented to acquire other institutions or expand our branch network through opening new branches and/or loan production offices; ● Maintain our strong asset quality; and ● Operate as a community-oriented financial institution that offers a broad array of financial products and services with focus on the customer experience.
As of December 31, 2024 , commercial real estate and commercial business loans constituted approximately 78.60% of total loans; ● Continue to emphasize the attraction and retention of core deposits; ● Seek opportunities where presented to acquire other institutions or expand our branch network through opening new branches and/or loan production offices; ● Maintain our strong asset quality; and ● Operate as a community-oriented financial institution that offers a broad array of financial products and services with focus on the customer experience.
Loans to One Borrower Under Montana law, commercial banks such as the Ba nk, are subject to certain exemptions and are allowed to select the Office of the Comptroller of the Currency (“OCC”) formula used to determine limits on credit concentrations to single borrowers to an amount equal to 15.0% of the institution’s total capital.
Loans to One Borrower Under Montana law, commercial banks such as the Bank, are subject to certain exemptions and are allowed to select the Office of the Comptroller of the Currency (“OCC”) formula used to determine limits on credit concentrations to single borrowers to an amount equal to 15.0% of the institution’s total capital.
Employees may also take 12 hours of paid time off per calendar year during normal working hours for individual volunteer efforts. R egulation Set forth below is a brief description of certain laws and regulations applicable to Eagle and the Bank.
Employees may also take 12 hours of paid time off per calendar year during normal working hours for individual volunteer efforts. 7 Table of Contents R egulation Set forth below is a brief description of certain laws and regulations applicable to Eagle and the Bank.
The total consideration paid was $18.93 million and included cash consideration of $9.90 million and common stock issued of $9.03 million. 2 Table of Contents Business Strategy Our principal strategy is to continue our profitability through building a diversified loan portfolio and operating the Bank as a full-service community bank that offers both retail and commercial loan and deposit products in all of its markets.
The total consideration paid was $18.93 million and included cash consideration of $9.90 million and common stock issued of $9.03 millio Business Strategy Our principal strategy is to continue our profitability through building a diversified loan portfolio and operating the Bank as a full-service community bank that offers both retail and commercial loan and deposit products in all of its markets.
Our principal market areas can be characterized as markets with moderately increasing incomes, relatively low unemployment, increasing wealth (particularly in the growing resort areas such as Bozeman) and moderate population growth. Lending Activities General The Bank originates residential 1-4 family loans held for investment and originated for sale in the secondary market.
Our principal market areas can be characterized as markets with moderately increasing incomes, relatively low unemployment, increasing wealth (particularly in the growing resort areas such as Bozeman) and moderate population growth. 3 Table of Contents Lending Activities General The Bank originates residential 1-4 family loans held for investment and originated for sale in the secondary market.
Loan and investment securities principal payments are a relatively stable source of funds, while loan prepayments and deposit inflows are significantly influenced by general interest rates and financial market conditions. 7 Table of Contents Deposits We offer a variety of deposit accounts.
Loan and investment securities principal payments are a relatively stable source of funds, while loan prepayments and deposit inflows are significantly influenced by general interest rates and financial market conditions. Deposits We offer a variety of deposit accounts.
Other loan related fee income for late charges and other ancillary fees we re $1.38 million a nd $1.01 million for the years ended December 31, 2023 and 2022, respectively. Residential 1-4 Family Loans The Bank originates residential 1-4 family mortgage loans secured by property located in the Bank’s market areas.
Other loan related fee income for late charges and other ancillary fees we re $1.30 million a nd $1.38 million for the years ended December 31, 2024 and 2023, respectively. Residential 1-4 Family Loans The Bank originates residential 1-4 family mortgage loans secured by property located in the Bank’s market areas.
Opportunity Bank of Montana is committed to providing equal employment opportunity and maintaining an environment that encourages appropriate conduct among all persons and fosters respect for and inclusion of individuals with diverse perspectives, work experiences, lifestyles, and cultures.
Employees and Human Capital Resources Opportunity Bank of Montana is committed to providing equal employment opportunity and maintaining an environment that encourages appropriate conduct among all persons and fosters respect for and inclusion of individuals with diverse perspectives, work experiences, lifestyles, and cultures.
Eagle, as a bank holding company, is required to file certain reports with, and is subject to examination by, and must otherwise comply with the rules and regulations of the FRB. Eagle is also subject to the rules and regulations of the Securities and Exchange Commission (“SEC”) under the federal securities laws.
Eagle, as a bank holding company, is required to file certain reports with, and is subject to examination by, and must otherwise comply with the rules and regulations of the FRB. Eagle is also subject to the rules and regulations of the Securities and Exchange Commission (“SEC”) under the federal securities laws. See Holding Company Regulation section below.
Fees generated from mortgage loan servicing generally consist of collecting mortgage payments, maintaining escrow accounts, disbursing payments to investors and foreclosure processing for loans held by others. Mortgage loan servicing fees w ere $5.09 mi llion and $4.84 million for the years ended December 31, 2023 and 2022, respectively.
Fees generated from mortgage loan servicing generally consist of collecting mortgage payments, maintaining escrow accounts, disbursing payments to investors and foreclosure processing for loans held by others. Mortgage loan servicing fees w ere $5.11 mi llion and $5.09 million for the years ended December 31, 2024 and 2023, respectively.
At December 31, 2023, the Bank's balance of 1-4 family mortgage loans was $156.58 million or 10.55% of total loans. The Bank generally originates residential 1-4 family mortgage loans in amounts of up to 80.0% of the lesser of the appraised value or the selling price of the mortgaged property without requiring private mortgage insurance.
At December 31, 2024, the Bank's balance of 1-4 family mortgage loans was $153.72 million or 10.11% of total loans. The Bank generally originates residential 1-4 family mortgage loans in amounts of up to 80.0% of the lesser of the appraised value or the selling price of the mortgaged property without requiring private mortgage insurance.
Farmland loans accounted for $142.59 million or 9.61% of the Bank’s total loan portfolio at December 31, 2023. Home Equity Loans The Bank also originates home equity loans. These loans are secured by the borrowers’ primary residence, but are typically subject to a prior lien, which may or may not be held by the Bank.
Farmland loans accounted for $146.61 million or 9.64% of the Bank’s total loan portfolio at December 31, 2024. 4 Table of Contents Home Equity Loans The Bank also originates home equity loans. These loans are secured by the borrowers’ primary residence, but are typically subject to a prior lien, which may or may not be held by the Bank.
The total amount of loans in process of origination for sale into the secondary market with interest rate lock commitments was $15.67 million as of December 31, 2023.
The total amount of loans in process of origination for sale into the secondary market with interest rate lock commitments was $10.16 million as of December 31, 2024.
As of December 31, 2023, consumer loans totaled $30.13 million or 2.03% of the Bank’s total loan portfolio. These loans consist primarily of auto loans, RV loans, boat loans, personal loans and credit lines and deposit account loans. Consumer loans are originated in the Bank’s market areas and generally have maturities of up to 7 years.
As of December 31, 2024, consumer loans totaled $28.51 million or 1.88% of the Bank’s total loan portfolio. These loans consist primarily of auto loans, RV loans, boat loans, personal loans and credit lines and deposit account loans. Consumer loans are originated in the Bank’s market areas and generally have maturities of up to 7 years.
If approved, these terms and conditions include the amount of the loan, interest rate basis, amortization term, a brief description of real estate to be mortgaged, tax escrow and the notice of requirement of insurance coverage to be maintained.
Loan applicants are promptly notified of the decision by a letter setting forth the terms and conditions of the decision. If approved, these terms and conditions include the amount of the loan, interest rate basis, amortization term, a brief description of real estate to be mortgaged, tax escrow and the notice of requirement of insurance coverage to be maintained.
Calculation of all types of regulatory capital is subject to deductions and adjustments specified in the regulations. 11 Table of Contents In determining the amount of risk-weighted assets for purposes of calculating risk-based capital ratios, all assets, including certain off-balance sheet assets (e.g., recourse obligations, direct credit substitutes, residual interests) are multiplied by a risk weight factor assigned by the regulations based on the risks believed inherent in the type of asset.
In determining the amount of risk-weighted assets for purposes of calculating risk-based capital ratios, all assets, including certain off-balance sheet assets (e.g., recourse obligations, direct credit substitutes, residual interests) are multiplied by a risk weight factor assigned by the regulations based on the risks believed inherent in the type of asset.
At December 31, 2023, $86.93 million or 5.86% of our total loans were home equity loans. Borrowers may use the proceeds from the Bank’s home equity loans for many purposes, including home improvement, debt consolidation or other purchasing needs.
At December 31, 2024, $97.54 million or 6.41% of our total loans were home equity loans. Borrowers may use the proceeds from the Bank’s home equity loans for many purposes, including home improvement, debt consolidation or other purchasing needs.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Prompt Corrective Action Federal law establishes a prompt corrective action framework to resolve the problems of undercapitalized depository institutions. The Federal Reserve has adopted regulations to implement the prompt corrective action legislation.
The Bank’s actual capital ratios are set out in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Prompt Corrective Action Federal law establishes a prompt corrective action framework to resolve the problems of undercapitalized depository institutions. The Federal Reserve has adopted regulations to implement the prompt corrective action legislation.
Agricultural operating loans are generally secured with equipment, cattle, crops or other non-real property and at times the underlying real property. Commercial business loans of this nature usually involve greater credit risk than residential 1-4 family loans.
Such loans may be structured as unsecured lines of credit or may be secured by inventory, accounts receivable or other business assets. Agricultural operating loans are generally secured with equipment, cattle, crops or other non-real property and at times the underlying real property. Commercial business loans of this nature usually involve greater credit risk than residential 1-4 family loans.
Interest rates on deposits are set by senior management, based on a number of factors, including: projected cash flow; a current survey of a selected group of competitors’ rates for similar products; external data which may influence interest rates; investment opportunities and loan demand; and scheduled certificate maturities and loan and investment repayments.
Interest rates on deposits are set by senior management, based on a number of factors, including: projected cash flow; a current survey of a selected group of competitors’ rates for similar products; external data which may influence interest rates; investment opportunities and loan demand; and scheduled certificate maturities and loan and investment repayments. 6 Table of Contents Borrowings Deposits are the primary source of funds for our lending and investment activities and for general business purposes.
This consisted of six loans: five commercial real estate loans each secured by a single property and one construction loan secured by a single property. The first commercial real estate loan had a principal balance of $1.45 million at December 31, 2023 .
This consisted of seven loans: four commercial real estate loans each secured by a single property, two commercial loans secured by equipment and one construction loan secured by a single property. The first commercial real estate loan had a principal balance of $1.35 million at December 31, 2024 .
In addition, banks are prohibited from lending to any affiliate that is engaged in activities that are not permissible for bank holding companies and no bank may purchase the securities of any affiliate other than a subsidiary.
Collateral in specified amounts must be provided by affiliates in order to receive loans from an institution. In addition, banks are prohibited from lending to any affiliate that is engaged in activities that are not permissible for bank holding companies and no bank may purchase the securities of any affiliate other than a subsidiary.
As of December 31, 2023 , the principal balance on the second commercial real estate loan was $705,000. The third commercial real estate loan had a principal balance of $3.80 million as of December 31, 2023 . However, another bank is 50.0% participating in this loan for $3.80 million.
As of December 31, 2024 , the principal balance on the second commercial real estate loan was $1.38 million. The third commercial real estate loan had a principal balance of $11.02 million as of December 31, 2024 . However, another bank is 50.0% participating in this loan for $5.51 million.
Institutions that have not exercised the AOCI opt-out have AOCI incorporated into common equity Tier 1 capital (including unrealized gains and losses on available-for-sale-securities). The Bank exercised its AOCI opt-out election.
Institutions that have not exercised the AOCI opt-out have AOCI incorporated into common equity Tier 1 capital (including unrealized gains and losses on available-for-sale-securities). The Bank exercised its AOCI opt-out election. Calculation of all types of regulatory capital is subject to deductions and adjustments specified in the regulations.
At December 31, 2023, the Bank ha d $2.07 billi on in residential 1-4 family mortgage loans a nd $134.65 million in other loan categories sold with servicing retained. The Bank does not ordinarily purchase home mortgage loans from other financial institutions.
At December 31, 2024, the Bank ha d $2.02 billion in residential 1-4 family mortgage loans and $152.14 million in other loan categories sold with servicing retained. The Bank does not ordinarily purchase home mortgage loans from other financial institutions.
Additionally, current guidance from the FRB provides, among other things, that dividends per share on the Company’s common stock generally should not exceed earnings per common share, measured over the previous four fiscal quarters.
Additionally, current guidance from the FRB provides, among other things, that dividends per share on the Company’s common stock generally should not exceed earnings per common share, measured over the previous four fiscal quarters. Federal regulations also limit banks’ ability to issue dividends by imposing a capital conservation buffer requirement.
The Federal Reserve may also take any one of a number of discretionary supervisory actions against undercapitalized institutions, including the issuance of a capital directive and the replacement of senior executive officers and directors. The Bank was classified as “well-capitalized” under the prompt corrective action framework as of December 31, 2023.
The Federal Reserve may also take any one of a number of discretionary supervisory actions against undercapitalized institutions, including the issuance of a capital directive and the replacement of senior executive officers and directors.
Market Areas We conduct business through our headquarters in Helena, Montana, in addition to 27 oth er full-service branches located in Ashland, Big Timber, Billings, Bozeman, Butte, Choteau, Culbertson, Denton, Dutton, Froid, Glasgow, Great Falls, Hamilton, Helena, Hinsdale, Livingston, Missoula, Sheridan, Three Forks, Townsend, Twin Bridges, Winifred and Wolf Point, Montana.
If we are unable to effectively integrate and manage acquired or merged businesses or attract significant new business through our branching efforts, our financial performance may be negatively affected. 2 Table of Contents Market Areas We conduct business through our headquarters in Helena, Montana, in addition to 28 oth er full-service branches located in Ashland, Big Timber, Billings, Bozeman, Butte, Choteau, Culbertson, Denton, Dutton, Froid, Glasgow, Great Falls, Hamilton, Helena, Hinsdale, Livingston, Missoula, Sheridan, Three Forks, Townsend, Twin Bridges, Winifred and Wolf Point, Montana.
Residential 1-4 family construction loans accounted for $43.43 million or 2.93% of the Bank’s total loan portfolio at December 31, 2023. 4 Table of Contents Commercial Real Estate Loans The Bank originates commercial real estate loans including loans on multi-family dwellings.
Residential 1-4 family construction loans accounted for $45.70 million or 3.01% of the Bank’s total loan portfolio at December 31, 2024. Commercial Real Estate Loans The Bank originates commercial real estate loans including loans on multi-family dwellings. Commercial real estate loans made up 42.48% of the Bank’s total loan portfolio, or $645.96 million at December 31, 2024 .
The following are subsidiaries of the Company: Opportunity Bank of Montana, Eagle Bancorp Statutory Trust I, Opportunity Financial Services, Inc., formerly Western Financial Services and Opportunity Housing Fund, LLC, which is a subsidiary of the Bank. Employees and Human Capital Resources As of December 31, 2023, we ha d 383 full-time employees and 24 pa rt-time employees.
The following are subsidiaries of the Company: Opportunity Bank of Montana, Eagle Bancorp Statutory Trust I, Opportunity Financial Services, Inc., formerly Western Financial Services, and Opportunity Housing Fund, LLC, which is a subsidiary of the Bank.
As of December 31, 2023 , the Bank’s limit to a single borrower was $32.84 million. Our largest aggregation of loans to one borrower was approxima tely $39.23 m illion at December 31, 2023. The total amount subject to the lending limit at December 31, 2023 was $30.40 million.
As of December 31, 2024 , the Bank’s limit to a single borrower was $34.40 million. Our largest aggregation of loans to one borrower was approximately $34.58 million at December 31, 2024 . The total amount subject to the lending limit at December 31, 2024 was $18.99 million.
We believe our commitment to living out our core values, actively prioritizing concern for our employees’ well-being, supporting our employees’ career goals, offering competitive wages and providing valuable benefits aids in retention of our top-performing employees. We promote the health and wellness of our employees and strive to keep the employee portion of health care premiums to a minimum.
Retention and Benefits Employee retention helps us operate efficiently and achieve one of our business objectives, which is being a high-level service provider. We believe our commitment to living out our core values, actively prioritizing concern for our employees’ well-being, supporting our employees’ career goals, offering competitive wages and providing valuable benefits aids in retention of our top-performing employees.
The employees are not represented by a collective bargaining unit. We believe our relationship with our employees to be good. The Board of Directors oversees the strategic management of our human capital resources. The Human Resources Department's day-to-day responsibility is managing our human capital resources.
We believe our relationship with our employees to be good. The Company is led by a female CEO. The executive team is comprised of 5 females and 3 males. The Board of Directors oversees the strategic management of our human capital resources. The Human Resources Department's day-to-day responsibility is managing our human capital resources.
In addition, nearly all of our employees are shareholders of the Company through participation in our ESOP, which aligns employee and shareholder interests by providing stock ownership on a tax-deferred basis at no investment cost to our employees. 8 Table of Contents Growth and Development We believe that the success of our business is largely due to the quality of our employees, the development of each employee's full potential, and our ability to provide timely and satisfying recognition and rewards.
In addition, nearly all of our employees are shareholders of the Company through participation in our ESOP, which aligns employee and shareholder interests by providing stock ownership on a tax-deferred basis at no investment cost to our employees.
While the state’s population is approximately 1.12 million people, there are 45 credit unions in Montana as well as one state-chartered thrift institution and 35 commercial banks as of December 31, 2023.
As a result of unit banking, Montana has a significant number of independent financial institutions serving a single commun ity in a single location. While the state’s population is approximately 1.13 million people, there are 44 credit unions in Montana as well as one state-chartered thrift institution and 35 commercial banks as of December 31, 2024.
At December 31, 2023 , this loan is performing in accordance with its repayment terms. The Bank also lends funds for commercial construction and development. Commercial construction and development loans accounted for $158.13 million or 10.65% of the Bank’s total loan portfolio at December 31, 2023. In addition, the bank originates loans secured by farm and ranch real estate.
The Bank's share of the total outstanding loan at December 31, 2024 was $13.81 million and it is collateralized by commercial real estate located in Bozeman, Montana. At December 31, 2024 , this loan is performing in accordance with its repayment terms. The Bank also lends funds for commercial construction and development.
Commerci al real estate loans are typically made with fixed rates of interest and 5 to 15-year maturities. Upon maturity, the loan is repaid or the terms and conditions are renegotiated. Generally, all commercial real estate loans that we originate are secured by property located in the state of Montana and within the market areas of the Bank.
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. Commercial real estate loans are typically made with fixed rates of interest and 5 to 15-year maturities. Upon maturity, the loan is repaid or the terms and conditions are renegotiated.
Our results of operations may be significantly affected by our ability to effectively implement our business strategy including our plans for expansion through strategic acquisitions. If we are unable to effectively integrate and manage acquired or merged businesses or attract significant new business through our branching efforts, our financial performance may be negatively affected.
Our results of operations may be significantly affected by our ability to effectively implement our business strategy including our plans for expansion through strategic acquisitions.
See Holding Company Regulation section below. 9 Table of Contents Federal Regulation of Commercial Banks General Deposits in the Bank, a Montana state-chartered commercial bank, are insured by the FDIC. The bank has no branches in any other state.
Federal Regulation of Commercial Banks General Deposits in the Bank, a Montana state-chartered commercial bank, are insured by the FDIC. The bank has no branches in any other state. The Bank is subject to regulation and supervision by the Montana Department of Administration’s Banking and Financial Institutions Division and the FRB.
In addition, a bank may not pay cash dividends if that payment could reduce the amount of its capital below that necessary to meet minimum applicable regulatory capital requirements. The Bank is subject to Montana state law and, in certain circumstances, Montana law places limits or restrictions on a bank’s ability to declare and pay dividends.
The Bank is subject to Montana state law and, in certain circumstances, Montana law places limits or restrictions on a bank’s ability to declare and pay dividends.
The fourth commercial real estate loan had a principal balance of $11.25 million as of December 31, 2023 . The fifth commercial real estate loan had a principal balance of $8.17 million as of December 31, 2023 . The sixth construction loan had a principal balance of $5.02 million as of December 31, 2023 .
The fourth commercial real estate loan had a principal balance of $601,000 as of December 31, 2024 . The fifth commercial loan had a principal balance of $55,000 as of December 31, 2024 . The sixth commercial loan had a principal balance of $12,000 as of December 31, 2024 .
The term “affiliates” for these purposes generally means any company that controls or is under common control with an institution. Eagle and the Bank are separate and distinct legal entities. Eagle is an affiliate of the Bank. In general, transactions with affiliates must be on terms that are as favorable to the institution as comparable transactions with non-affiliates.
Eagle and the Bank are separate and distinct legal entities. Eagle is an affiliate of the Bank. In general, transactions with affiliates must be on terms that are as favorable to the institution as comparable transactions with non-affiliates. In addition, certain types of transactions, i.e . “covered transactions,” are restricted to an aggregate percentage of the institution’s capital.
The following table reflects our deposit market share and ranking by county: County Total Market Share Percentage (1) Deposit Market Share Rank (1) Broadwater, MT 100.00 % 1 Cascade, MT 0.91 9 Fergus, MT 6.35 5 Gallatin, MT 4.84 7 Lewis and Clark, MT 13.34 4 Madison, MT 36.27 2 Missoula, MT 1.81 9 Park, MT 8.83 5 Ravalli, MT 3.29 7 Roosevelt, MT 60.44 1 Rosebud, MT 8.29 3 Silver Bow, MT 11.00 4 Sweet Grass, MT 36.45 2 Teton, MT 18.15 2 Valley, MT 53.71 1 Yellowstone, MT 0.79 9 (1) Source: FDIC.gov-data as o f June 30, 2023. 3 Table of Contents Competition We face strong competition in our primary market areas for retail deposits and the origination of loans from both banks and non-bank competitors.
The following table reflects our deposit market share and ranking by county: County Total Market Share Percentage (1) Deposit Market Share Rank (1) Broadwater, MT 100.00 % 1 Cascade, MT 1.54 8 Fergus, MT 6.36 5 Gallatin, MT 4.68 8 Lewis and Clark, MT 14.93 3 Madison, MT 37.65 2 Missoula, MT 1.56 10 Park, MT 9.94 4 Ravalli, MT 3.22 6 Roosevelt, MT 49.60 2 Rosebud, MT 7.68 3 Silver Bow, MT 13.12 4 Sweet Grass, MT 40.22 1 Teton, MT 18.80 2 Valley, MT 51.52 1 Yellowstone, MT 1.10 7 (1) Source: FDIC.gov-data as o f June 30, 2024.
Agricultural production loans amounted to $125.30 million, or 8.44% of the Bank’s total loan portfolio at December 31, 2023. The Bank’s commercial business loans are traditional business loans and are not secured by real estate. Such loans may be structured as unsecured lines of credit or may be secured by inventory, accounts receivable or other business assets.
Commercial Loans Commercial business loans amounted to $144.04 million, or 9.47% of the Bank’s total loan portfolio at December 31, 2024 . Agricultural production loans amounted to $134.35 million, or 8.83% of the Bank’s total loan portfolio at December 31, 2024. The Bank’s commercial business loans are traditional business loans and are not secured by real estate.
The stability of the applicant’s monthly income may be determined by verification of gross monthly income from primary employment, and additionally from any verifiable secondary income.
The stability of the applicant’s monthly income may be determined by verification of gross monthly income from primary employment, and additionally from any verifiable secondary income. Creditworthiness of the applicant is of primary consideration; however, the underwriting process also includes a comparison of the value of the collateral in relation to the proposed loan amount.
Officers and branch managers are granted lending authority based on the nature of the loan and the managers’ level of experience. We have established a series of loan committees to approve any loans which may exceed the lending authority of particular officers or branch managers.
We have established a series of loan committees to approve any loans which may exceed the lending authority of particular officers or branch managers. Three Directors of the Board are required for approval of any loan, or aggregation of loans to a single borrower, that currently exceeds $7.50 million.
Limitations on Capital Distributions A principal source of the parent holding company’s cash is from dividends received from the Bank, which are subject to government regulation and limitation. Regulatory authorities may prohibit banks and bank holding companies from paying dividends in a manner that would constitute an unsafe or unsound banking practice.
Regulatory authorities may prohibit banks and bank holding companies from paying dividends in a manner that would constitute an unsafe or unsound banking practice. In addition, a bank may not pay cash dividends if that payment could reduce the amount of its capital below that necessary to meet minimum applicable regulatory capital requirements.
Federal regulations also limit banks’ ability to issue dividends by imposing a capital conservation buffer requirement. 12 Table of Contents Transactions with Affiliates The Bank’s authority to engage in transactions with “affiliates” is limited by regulations and by Sections 23A and 23B of the Federal Reserve Act as implemented by the FRB’s Regulation W.
Transactions with Affiliates The Bank’s authority to engage in transactions with “affiliates” is limited by regulations and by Sections 23A and 23B of the Federal Reserve Act as implemented by the FRB’s Regulation W. The term “affiliates” for these purposes generally means any company that controls or is under common control with an institution.
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 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.
The Bank currently has 29 full-service branc hes and 46 automated teller machines located in our market areas and we participate in the Money Pass® ATM network. The Bank also operated certain branches under the brand names Dutton State Bank, Farmers State Bank of Denton and The State Bank of Townsend.
The Bank currently has 30 full-service branc hes and 32 automated teller machines located in our market areas and we participate in the Money Pass® ATM network. We provide loan and deposit services to customers who are predominantly small businesses and individuals throughout Montana.
When required by our policies, an appraisal of the real estate intended to secure the proposed loan is undertaken by an independent fee appraiser. In connection with the loan approval process, our staff analyzes the loan applications and the property involved.
After receiving a loan application from a prospective borrower, a credit report and verifications are obtained to confirm specific information relating to the loan applicant’s employment, income and credit standing. When required by our policies, an appraisal of the real estate intended to secure the proposed loan is undertaken by an independent fee appraiser.
Historically, Montana was a unit banking state. This means that the ability of Montana state banks to create branches was either prohibited or significantly restricted. As a result of unit banking, Montana has a significant number of independent financial institutions serving a single commun ity in a single location.
Competition We face strong competition in our primary market areas for retail deposits and the origination of loans from both banks and non-bank competitors. Historically, Montana was a unit banking state. This means that the ability of Montana state banks to create branches was either prohibited or significantly restricted.
However, another bank is 50.0% participating in this loan for $5.02 million. At December 31, 2023 , these loans were performing in accordance with their terms. Th e Bank maintains the servicing for these loans. L oan Solicitation and Processing Our customary sources of mortgage loan applications include repeat customers, walk-ins and referrals from home builders and real estate brokers.
The seventh construction loan had a principal balance of $20.16 million as of December 31, 2024 . However, another bank is 50.0% participating in this loan for $10.08 million. At December 31, 2024 , these loans were performing in accordance with their terms. The Bank maintains the servicing for these loans.
We also advertise in local newspapers and on local radio and television. We currently have the ability to accept online mortgage loan applications through our website. Our branch managers and loan officers located at our headquarters and in branches, have authority to approve certain types of loans when presented with a completed application.
L oan Solicitation and Processing Our customary sources of mortgage loan applications include repeat customers, walk-ins and referrals from home builders and real estate brokers. We also advertise in local newspapers and on local radio and television. We currently have the ability to accept online mortgage loan applications through our website.
Embracing equal employment opportunity and the diversity and inclusion of our workforce helps the Bank achieve its mission and each of us to live our core values. Retention and Benefits Employee retention helps us operate efficiently and achieve one of our business objectives, which is being a high-level service provider.
Embracing equal employment opportunity and the diversity and inclusion of our workforce helps the Bank achieve its mission and each of us to live our core values. As of December 31, 2024, we ha d 372 full-time employees and 10 pa rt-time employees. The employees are not represented by a collective bargaining unit.
T he Bank's largest single commercial real estate loan at December 31, 2023 was originated by the Bank and participated 44.4% to two other banks in Montana, each being participated 22.2%. The Bank's share of the total outstanding loan at December 31, 2023 was $12.55 million and it is collateralized by commercial real estate located in Bozeman, Montana.
Generally, all commercial real estate loans that we originate are secured by property located in the state of Montana and within the market areas of the Bank. The Bank's largest single commercial real estate loan at December 31, 2024 was originated by the Bank and participated 44.10% to another bank in Alaska.
All employees are encouraged to stay at home or work from home if they are experiencing signs or symptoms of a possible illness. Community Involvement Employees are encouraged to become involved in their communities and are offered paid time off for participating in bank-sponsored events.
We actively support causes that are close to our hearts and demonstrate that being an integral part of our Montana communities means rolling up our sleeves and lending a hand wherever needed. Employees are encouraged to become involved in their communities and are offered paid time off for participating in bank-sponsored events.
Removed
Effective January 3, 2022, these branches were rebranded and are now only operating as Opportunity Bank of Montana. We provide loan and deposit services to customers who are predominantly small businesses and individuals throughout Montana.
Added
Commercial construction and development loans accounted for $124.21 million or 8.17% of the Bank’s total loan portfolio at December 31, 2024. In addition, the bank originates loans secured by farm and ranch real estate.
Removed
Commercial real estate loans made up 40.99% of the Bank’s total loan portfolio, or $608.69 million at December 31, 2023. 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.
Added
In connection with the loan approval process, our staff analyzes the loan applications and the property involved. Officers and branch managers are granted lending authority based on the nature of the loan and the managers’ level of experience.
Removed
Creditworthiness of the applicant is of primary consideration; however, the underwriting process also includes a comparison of the value of the collateral in relation to the proposed loan amount. 5 Table of Contents Commercial Loans Commercial business loans amounted to $132.71 million, or 8.94% of the Bank’s total loan portfolio at December 31, 2023.
Added
We promote the health and wellness of our employees and strive to keep the employee portion of health care premiums to a minimum.
Removed
Three Directors of the Board are required for approval of any loan, or aggregation of loans to a single borrower, that currently exceeds $7.50 million. Loan applicants are promptly notified of the decision by a letter setting forth the terms and conditions of the decision.
Added
Growth and Development We believe that the success of our business is largely due to the quality of our employees, the development of each employee's full potential, and our ability to provide timely and satisfying recognition and rewards.
Removed
Borrowings Deposits are the primary source of funds for our lending and investment activities and for general business purposes.
Added
All employees and their dependents have access to an employee assistance program which provides expert resources in support of employee family work/life services, emotional/physical well-being, financial and legal assistance. Community Involvement Providing a meaningful impact to our communities has always been a focus for our Company.
Removed
In February 2017, the Company completed the issuance, through a private placement, of $10.00 million aggregate principal amount of 5.75% fixed senior unsecured notes due in 2022. These notes were redeemed in February 2022 with proceeds from the subordinated notes issued in January 2022.
Added
The Bank was classified as “well-capitalized” under the prompt corrective action framework as of December 31, 2024. 9 Table of Contents Limitations on Capital Distributions A principal source of the parent holding company’s cash is from dividends received from the Bank, which are subject to government regulation and limitation.
Removed
All employees and their dependents have access to an employee assistance program which provides expert referrals and consultation in support of mental well-being. The COVID-19 pandemic presented a unique challenge with regard to maintaining employee safety while continuing successful operations.
Removed
Through teamwork and the adaptability of our management and staff, we were able to transition during the peak of the pandemic, over a short period of time, to rotational work schedules allowing employees to effectively work from remote locations and ensure a safely-distanced working environment for employees performing customer facing activities at branches.
Removed
The Bank is subject to regulation and supervision by the Montana Department of Administration’s Banking and Financial Institutions Division and the FRB.
Removed
The capital conservation buffer requirement was phased in beginning January 1, 2016 until fully implemented at 2.5% on January 1, 2019. The Bank’s actual capital ratios are set out in Item 7.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

24 edited+11 added−3 removed129 unchanged
Biggest changeThe departure of any member of our senior management team may adversely affect our operations. 17 Table of Contents We earn a significant portion of our noninterest income through sales of residential mortgages in the secondary market . We rely on the mortgage secondary market for some of our liquidity.
Biggest changeWe earn a significant portion of our noninterest income through sales of residential mortgages in the secondary market . We rely on the mortgage secondary market for some of our liquidity. Our mortgage banking activities provide a significant portion of our noninterest income. We originate and sell mortgage loans, inc luding $211.78 mil lion of mortgage loans sold during 2024.
New regulations, shift in customer behaviors, supply chain collapse or breakthrough technologies that accelerate the transition to a lower carbon economy may negatively affect certain sectors and borrowers in our loan portfolio, impacting their ability to timely repay their loans or decreasing the value of any collateral held by us. 15 Table of Contents The emergence or continuation of widespread health emergencies or pandemics could have a material adverse effect on our business, results of operations and financial condition, and such effects will depend on future developments, which are highly uncertain and are difficult to predict.
New regulations, shift in customer behaviors, supply chain collapse or breakthrough technologies that accelerate the transition to a lower carbon economy may negatively affect certain sectors and borrowers in our loan portfolio, impacting their ability to timely repay their loans or decreasing the value of any collateral held by us. 12 Table of Contents The emergence or continuation of widespread health emergencies or pandemics could have a material adverse effect on our business, results of operations and financial condition, and such effects will depend on future developments, which are highly uncertain and are difficult to predict.
These factors, as well as recent volatility in certain commodity prices could adversely impact the ability of those to whom we have made farmland and agricultural production loans to perform under the terms of their borrowing arrangements with us, which in turn could result in credit losses and adversely affect our business, financial condition and results of operations. 19 Table of Contents Consumers may decide not to use banks to complete their financial transactions.
These factors, as well as recent volatility in certain commodity prices could adversely impact the ability of those to whom we have made farmland and agricultural production loans to perform under the terms of their borrowing arrangements with us, which in turn could result in credit losses and adversely affect our business, financial condition and results of operations. 16 Table of Contents Consumers may decide not to use banks to complete their financial transactions.
Our results of operations depend substantially on our net interest income, which is the difference between the interest income we earn on our interest-earning assets, such as loans and securities, and the interest expense we pay on our interest-bearing liabilities, such as deposits, borrowings and trust preferred securities. 14 Table of Contents Changes in interest rates may also affect the average life of loans and mortgage-related securities.
Our results of operations depend substantially on our net interest income, which is the difference between the interest income we earn on our interest-earning assets, such as loans and securities, and the interest expense we pay on our interest-bearing liabilities, such as deposits, borrowings and trust preferred securities. 11 Table of Contents Changes in interest rates may also affect the average life of loans and mortgage-related securities.
If we are unable to successfully integrate the businesses we acquire, our business, financial condition and results of operations may be materially adversely affected. Failure to maintain effective internal control over financial reporting or disclosure controls and procedures could adversely affect our ability to report our financial condition and results of operations accurately and on a timely basis.
If we are unable to successfully integrate the businesses we acquire, our business, financial condition and results of operations may be materially adversely affected. 15 Table of Contents Failure to maintain effective internal control over financial reporting or disclosure controls and procedures could adversely affect our ability to report our financial condition and results of operations accurately and on a timely basis.
Our business and our financial condition and results of operations could be adversely affected by continued soundness concerns regarding financial institutions generally and our counterparties specifically and limitations resulting from further governmental action in an effort to stabilize or provide additional regulation of the financial system as impact of excessive deposit withdrawals.
Our business and our financial condition and results of operations could be adversely affected by continued soundness concerns regarding financial institutions generally and our counterparties specifically and limitations resulting from further governmental action in an effort to stabilize or provide additional regulation of the financial system as impact of excessive deposit withdrawals. 17 Table of Contents
A number of factors or combinations of factors could require us to conclude in one or more future reporting periods that an unrealized loss exists with respect to our investment securities portfolio that constitutes an impairment that is other than temporary, which could result in material losses to us.
We could record future losses on our securities portfolio. A number of factors or combinations of factors could require us to conclude in one or more future reporting periods that an unrealized loss exists with respect to our investment securities portfolio that constitutes an impairment that is other than temporary, which could result in material losses to us.
While we believe we will have the executive management resources and internal systems in place to successfully manage our future growth, there can be no assurance growth opportunities will be available or that we will successfully manage our growth. 18 Table of Contents We may be unsuccessful in integrating the operations of the business we have acquired or expect to acquire in the future.
While we believe we will have the executive management resources and internal systems in place to successfully manage our future growth, there can be no assurance growth opportunities will be available or that we will successfully manage our growth. We may be unsuccessful in integrating the operations of the business we have acquired or expect to acquire in the future.
In addition, the fair values of securities could decline if the overall economy and the financial condition of some of the issuers deteriorates and there is limited liquidity for these securities. Changes in our accounting policies or in accounting standards could materially affect how we report our financial condition and results of operations.
In addition, the fair values of securities could decline if the overall economy and the financial condition of some of the issuers deteriorates and there is limited liquidity for these securities. 13 Table of Contents Changes in our accounting policies or in accounting standards could materially affect how we report our financial condition and results of operations.
The aggregate cost of our FHLB common stock as of December 31, 2023 was $9.19 million. FHLB common stock is not a marketable security and can only be redeemed by the FHLB. FHLB’s may be subject to accounting rules and asset quality risks that could materially lower their regulatory capital.
The aggregate cost of our FHLB common stock as of December 31, 2024 was $7.78 million. FHLB common stock is not a marketable security and can only be redeemed by the FHLB. FHLB’s may be subject to accounting rules and asset quality risks that could materially lower their regulatory capital.
The combination of these impacts along with other impacts, could cause us to not have sufficient liquidity or capital. At December 31, 2023, our MSR asset had a fair value of $15.85 million. All income related to retained servicing, including changes in the value of the MSR asset, is included in noninterest income.
The combination of these impacts along with other impacts, could cause us to not have sufficient liquidity or capital. At December 31, 2024 , our MSR asset had a fair value of $15.38 mi llion. All income related to retained servicing, including changes in the value of the MSR asset, is included in noninterest income.
In addition, the limited purpose of some agricultural-related collateral affects credit risk because such collateral may have limited or no other uses to support values when loan repayment problems emerge.
Collateral securing these loans may be a illiquid. In addition, the limited purpose of some agricultural-related collateral affects credit risk because such collateral may have limited or no other uses to support values when loan repayment problems emerge.
There can be no assurance we will be able to continue paying dividends on our common stock at recent levels. We may not be able to continue paying quarterly dividends commensurate with recent levels given that the ability to pay dividends on our common stock depends on a variety of factors.
We may not be able to continue paying quarterly dividends commensurate with recent levels given that the ability to pay dividends on our common stock depends on a variety of factors.
Furthermore, because of the inherent limitations of any system of internal control over financial reporting, including the possibility of human error, the circumvention or overriding of controls and fraud, even effective internal controls may not prevent or detect all misstatements.
Furthermore, because of the inherent limitations of any system of internal control over financial reporting, including the possibility of human error, the circumvention or overriding of controls and fraud, even effective internal controls may not prevent or detect all misstatements. We have identified a material weakness in our internal control over financial reporting.
Our consolidated balance sheet at December 31, 2023 included goodwill of $34.74 million. We are required to test our goodwill for impairment on a periodic basis.
Our consolidated balance sheet at December 31, 2024 included goodw ill of $34.74 m illion. We are required to test our goodwill for impairment on a periodic basis.
Our success depends upon the continued employment of certain members of our senior management team. We also depend upon the continued employment of the individuals that manage several of our key functional areas.
Our success depends upon the continued employment of certain members of our senior management team. We also depend upon the continued employment of the individuals that manage several of our key functional areas. The departure of any member of our senior management team may adversely affect our operations.
If we are unable to continue to sell loans in the secondary market or we experience a period of low mortgage activity, our noninterest income as well as our ability to fund, and thus originate, additional mortgage loans may be adversely affected, which could have a material adverse effect on our business, financial condition or results of operations.
If we are unable to continue to sell loans in the secondary market or we experience a period of low mortgage activity, our noninterest income as well as our ability to fund, and thus originate, additional mortgage loans may be adversely affected, which could have a material adverse effect on our business, financial condition or results of operations. 14 Table of Contents There can be no assurance we will be able to continue paying dividends on our common stock at recent levels.
Fair value is determined as the present value of estimated future net servicing income, calculated based on a number of variables, including assumptions about the likelihood of prepayment by borrowers.
We measure and carry all of our residential MSR assets using the fair value measurement method. Fair value is determined as the present value of estimated future net servicing income, calculated based on a number of variables, including assumptions about the likelihood of prepayment by borrowers.
Consequently, we believe that there is a risk that our investment in FHLB of Des Moines common stock could be deemed impaired at some time in the future, and if this occurs, it would cause our earnings and shareholders’ equity to decrease by the amount of the impairment charge. 20 Table of Contents A continuation of recent turmoil in our industry, and responsive measures to manage it, could have an adverse effect on our financial position or results of operations.
Consequently, we believe that there is a risk that our investment in FHLB of Des Moines common stock could be deemed impaired at some time in the future, and if this occurs, it would cause our earnings and shareholders’ equity to decrease by the amount of the impairment charge.
Any increase in our allowance for credit losses or loan charge-offs as required by these regulatory authorities may have a material adverse effect on our results of operations or financial condition. 16 Table of Contents We could record future losses on our securities portfolio.
Bank regulators periodically review our allowance for credit losses and may require an increase to the provision for credit losses or further loan charge-offs. Any increase in our allowance for credit losses or loan charge-offs as required by these regulatory authorities may have a material adverse effect on our results of operations or financial condition.
Over the past year, several financial services institutions have failed or required outside liquidity support—in many cases, as a result of the inability of the institutions to obtain needed liquidity.
A continuation of recent turmoil in our industry, and responsive measures to manage it, could have an adverse effect on our financial position or results of operations. Over the past year, several financial services institutions have failed or required outside liquidity support—in many cases, as a result of the inability of the institutions to obtain needed liquidity.
Farmland and agriculture production lending presents unique credit risk. As of December 31, 2023, approximately 18.05% of our total gross loan portfolio was comprised of farmland and agricultural production loans. As of December 31, 2023, we had $267.89 million in farmland and agricultural production loans, including $142.59 million in farmland loans, and $125.30million in agricultural production loans.
Farmland and agriculture production lending presents unique credit risk. As of December 31, 2024 , approxima tely 18.48% of our total gross loan portfolio was comprised of farmland and agricultural production loans.
Changes in interest rates may change the value of our mortgage servicing rights portfolio, which may increase the volatility of our earnings . As a result of our mortgage servicing business, which we may expand in the future, we have a portfolio of mortgage servicing rights (“MSR”) assets.
As a result of our mortgage servicing business, which we may expand in the future, we have a portfolio of mortgage servicing rights (“MSR”) assets. An MSR is the right to service a mortgage loan - collect principal, interest and escrow amounts - for a fee.
Repayment of farmland and agricultural production loans depends primarily on the successful raising and feeding of livestock or planting and harvest of crops and marketing the harvested commodity. Collateral securing these loans may be a illiquid.
As of December 31, 2024 , we had $280.96 million in farmland and agricultural production loans, including $146.61 million in farmland loans, and $134.35 mil lion in agricultural production loans. Repayment of farmland and agricultural production loans depends primarily on the successful raising and feeding of livestock or planting and harvest of crops and marketing the harvested commodity.
Removed
Bank regulators periodically review our allowance for credit losses and may require an increase to the provision for credit losses or further loan charge-offs.
Added
Failure to remediate, improve and maintain the quality of internal control over financial reporting could result in material misstatements in our financial statements and could materially and adversely affect our ability to provide timely and accurate financial information about the Company, which could harm our reputation and share price.
Removed
Our mortgage banking activities provide a significant portion of our noninterest income. We originate and sell mortgage loans, including $344.31 m illion of mortgage loans sold during 2023.
Added
In March 2025, we identified control deficiencies involving classification of borrowings in the financing activities section of the statement of cash flows.
Removed
An MSR is the right to service a mortgage loan - collect principal, interest and escrow amounts - for a fee. We measure and carry all of our residential MSR assets using the fair value measurement method.
Added
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 are appropriately presented either on a net basis or a gross basis within the financing section of the statement of cash flows.
Added
Management concluded that these control deficiencies constituted a material weakness in our internal control over financial reporting, as the identified deficiencies could have had a direct or indirect impact on some of our financial reporting controls related to borrowings.
Added
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 a company’s annual or interim financial statements will not be prevented or detected on a timely basis.
Added
Management cannot be certain that other deficiencies or material weaknesses will not arise or be identified or that the Company will be able to correct and maintain adequate controls over financial processes and reporting in the future.
Added
Management, with oversight from the Audit Committee, is committed to maintaining a strong internal control environment, and has taken, and will continue to take, actions necessary to remediate the material weakness.
Added
The identified material weakness in our internal control over financial reporting will not be considered remediated until the remediated controls operate for a sufficient period of time and can be tested and concluded by management to be designed and operating effectively.
Added
We cannot provide any assurance that our remediation efforts will be successful or that our internal control over financial reporting will be effective as a result of these efforts. As we continue to evaluate operating effectiveness and monitor improvements to our internal control over financial reporting, we may take additional measures to address control deficiencies or modify our remediation efforts.
Added
Unsuccessful remediation efforts could result in material misstatements in, or restatements of, the Company’s financial statements, could cause the Company to fail to meet its reporting obligations and/or could cause investors to lose confidence in the Company’s reported financial information, which would adversely affect the trading price of the Company’s common stock and harm the Company’s reputation.
Added
In addition, such failures could result in violations of applicable securities laws, an inability to meet Nasdaq listing requirements, a default in covenants under the Company’s credit facilities, and/or exposure to lawsuits, investigations or other legal proceedings. Changes in interest rates may change the value of our mortgage servicing rights portfolio, which may increase the volatility of our earnings .

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−0 removed0 unchanged
Biggest changeOccupancy Type Locations Owned Leased Total Locations Ashland, Montana 1 - 1 Big Timber, Montana 1 - 1 Billings, Montana 3 - 3 Bozeman, Montana 2 1 3 Butte, Montana 1 - 1 Choteau, Montana 1 - 1 Culbertson, Montana 1 - 1 Denton, Montana 1 - 1 Dutton, Montana 1 - 1 Froid, Montana 1 - 1 Glasgow, Montana 1 - 1 Great Falls, Montana - 1 1 Hamilton, Montana 1 - 1 Helena, Montana 5 - 5 Hinsdale, Montana 1 - 1 Livingston, Montana 1 - 1 Missoula, Montana 1 1 2 Sheridan, Montana 1 - 1 Three Forks, Montana 1 - 1 Townsend, Montana 1 - 1 Twin Bridges, Montana 1 - 1 Winifred, Montana - 1 1 Wolf Point, Montana 1 - 1 Total 28 4 32 Management believes all locations are in good condition and meet the operating needs of the Company.
Biggest changeOccupancy Type Locations Owned Leased Total Locations Ashland, Montana 1 - 1 Big Timber, Montana 1 - 1 Billings, Montana 3 - 3 Bozeman, Montana 2 1 3 Butte, Montana 1 - 1 Choteau, Montana 1 - 1 Culbertson, Montana 1 - 1 Denton, Montana 1 - 1 Dutton, Montana 1 - 1 Froid, Montana 1 - 1 Glasgow, Montana 1 - 1 Great Falls, Montana - 1 1 Hamilton, Montana 1 - 1 Helena, Montana 5 - 5 Hinsdale, Montana 1 - 1 Livingston, Montana 1 - 1 Missoula, Montana 1 - 1 Sheridan, Montana 1 - 1 Three Forks, Montana 1 - 1 Townsend, Montana 1 - 1 Twin Bridges, Montana 1 - 1 Winifred, Montana - 1 1 Wolf Point, Montana 1 - 1 Total 28 3 31 Management believes all locations are in good condition and meet the operating needs of the Company.
For additional information regarding the Company's premises and equipment and lease obligation s, see Note 6 to th e Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data".
For additional information regarding the Company's premises and equipment and lease obligation s, see Note 5 to th e Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data".
ITEM 2. PROPERTIES. The Company's executive office is located at 1400 Prospect Avenue in Helena, Montana. The following table provides information on the Company's 32 properties as of December 31, 2023, including locations by city, as well as whether they are owned or leased.
ITEM 2. PROPERTIES. The Company's executive office is located at 1400 Prospect Avenue in Helena, Montana. The following table provides information on the Company's 31 properties as of December 31, 2024, including locations by city, as well as whether they are owned or leased.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

10 edited+2 added−0 removed3 unchanged
Biggest changeDuring 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.
Biggest changeNo shares were purchased during the third or fourth quarter of 2023, or during the first of second quarter of 2024 under this plan. The pl an expired on May 1, 2024. On April 21, 2022, Eagle's Board of Directors (the "Board") authorized the repurchase of up to 400,000 shares of its common stock.
Under the plan, shares maybe 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.
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 present and future dividend policy of our bank subsidiary is subject to the discretion of its Board. Our subsidiary bank is not obligated to pay dividends. On April 20, 2023, Eagle's Board of Directors authorized the repurchase of up to 400,000 shares of its common stock beginning May 1, 2023.
The present and future dividend policy of our bank subsidiary is subject to the discretion of its Board. Our subsidiary bank is not obligated to pay dividends. On April 18, 2024, Eagle's Board of Directors authorized the repurchase of up to 400,000 shares of its common stock beginning May 1, 2024.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Our common stock is traded on the Nasdaq Global Market under the symbol “EBMT.” At the close of business on December 31, 2023, there were 8,016,784 shares of common stock outstanding, held by approximately 970 shareholders of record.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Our common stock is traded on the Nasdaq Global Market under the symbol “EBMT.” At the close of business on December 31, 2024, there were 8,507,429 shares of common stock outstanding, held by approximately 939 shareholders of record.
The pl an expires on May 1, 2024 On April 21, 2022, Eagle's Board of Directors (the "Board") authorized the repurchase of up to 400,000 shares of its common stock. Under the plan, shares may be purchased by the Company on the open market or in privately negotiated transactions.
The pl an expires on May 1, 2025. On April 20, 2023, Eagle's Board of Directors authorized the repurchase of up to 400,000 shares of its common stock beginning May 1, 2023. Under the plan, shares may be purchased by the Company on the open market or in privately negotiated transactions.
The closing price of the common stock on December 31, 2023, was $15.79 per share.
The closing price of the common stock on December 31, 2024, was $15.33 per share.
The extent to which the company repurchases its shares and the timing of such repurchase will depend upon market conditions and other corporate considerations. During the second quarter of 2022, 5,000 shares were purchased under this plan at an average price of $19.75.
The extent to which the company repurchases its shares and the timing of such repurchase will depend 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.
During the third quarter of 2022, 99,517 shares were purchased under this plan at an average price of $19.45. During the fourth quarter of 2022, 6,608 shares were purchased under this plan at an average price of $18.80. No shares were purchased during the first quarter of 2023 under this plan. The plan expired on April 21, 2023.
During the second quarter of 2022, 5,000 shares were purchased under this plan at an average price of $19.75. During the third quarter of 2022, 99,517 shares were purchased under this plan at an average price of $19.45. During the fourth quarter of 2022, 6,608 shares were purchased under this plan at an average price of $18.80.
On July 22, 2021, the Board authorized the repurchase of up to 100,000 shares of its common stock. Under the plan, shares could be purchased by the Company on the open market or in privately negotiated transactions. The extent to which the company repurchased its shares and the timing of such repurchase depended upon market conditions and other corporate considerations.
Under the plan, shares may be purchased by the Company on the open market or in privately negotiated transactions. The extent to which the company repurchases its shares and the timing of such repurchase will depend upon market conditions and other corporate considerations.
No shares were purchased during the year ended December 31, 2021. However, during the first quarter of 2022, the Company purchased the total authorized amount of 100,000 shares at an average price of $22.71 per share. The plan expired on July 22, 2022. 24 Table of Contents ITEM 6. [RESERVED]
No shares were purchased during the first quarter of 2023 under this plan. The plan expired on April 21, 2023. 21 Table of Contents ITEM 6. [RESERVED]
Added
The following table summarized the Company's purchase of its common stock for the year ended December 31, 2024 under this plan.
Added
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 October 1, 2024 through October 31, 2024 - $ - - - November 1, 2024 through November 30, 2024 - - - - December 1, 2024 through December 31, 2024 25,000 16.74 25,000 375,000 Total 25,000 $ 16.74 25,000 During January 2025, the Company purchased 50,000 shares at an average price of $15.11 under its repurchase plan.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeITEM 6. [ RESERVED ] 25 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 25 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 43 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 43 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 43 ITEM 9A. CONTROLS AND PROCEDURES 44
Biggest changeITEM 6. [ RESERVED ] 22 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 22 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 37 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 37 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 37 ITEM 9A. CONTROLS AND PROCEDURES 38

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table includes the composition of the commercial real estate loan category: December 31, 2023 2022 (In Thousands) Non-owner occupied: Multifamily $ 86,980 $ 75,472 Industrial/warehouse 43,983 28,279 Office space 20,150 20,891 Lessors of nonresidential buildings 63,515 62,727 Hotels and other traveler accommodations 58,157 47,846 Construction and related industries 17,530 9,754 Wholesale and retail trade 14,575 12,589 Lessors of mini warehouses and self-storage units 13,959 11,255 Car washes 10,792 - Healthcare and social assistance 10,206 9,603 Lessors of other real estate property 9,778 10,782 Bars and restaurants 5,565 3,853 Other real estate rental and leasing 4,877 7,473 Other 54,556 45,956 Total CRE non-owner occupied 414,623 346,480 Owner occupied: Office space 40,657 36,457 Real estate leasing activities 28,998 28,140 Automotive related 22,241 23,974 Healthcare and social assistance 21,564 23,333 Bars and restaurants 14,954 12,500 Hospitality industry related 14,756 6,035 Wholesale and retail trade 13,861 4,138 Construction and related 11,840 9,123 Other 25,197 50,205 Total CRE owner occupied 194,068 193,905 Deferred loan fees - (1,315 ) Total commercial real estate $ 608,691 $ 539,070 (1) Deferred loan fees, net included in individual loan categories above for the year ended December 31, 2023.
Biggest changeLoans held-for-sale increased by $1.94 million, to $13.37 million at December 31, 2024 from $11.43 million at December 31, 2023 . 25 Table of Contents The following table includes the composition of the commercial real estate loan category: 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 37,876 25,253 63,129 9.77 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 Total commercial real estate $ 461,146 $ 184,816 $ 645,962 100.00 % December 31, 2023 (In Thousands) Non-Owner Occupied Owner Occupied Total Percent of Total CRE Automotive related $ - $ 22,241 $ 22,241 3.65 % Bars and restaurants 5,565 14,954 20,519 3.37 Car washes 10,792 - 10,792 1.77 Construction and related industries 17,530 11,840 29,370 4.83 Healthcare and social assistance 10,206 21,564 31,770 5.22 Hospitality industry related - 14,756 14,756 2.42 Hotels and other traveler accommodations 58,157 - 58,157 9.55 Industrial/warehouse 43,983 - 43,983 7.23 Lessors of mini warehouses and self-storage units 13,959 - 13,959 2.29 Lessors of nonresidential buildings 63,515 - 63,515 10.44 Lessors of other real estate property 9,778 - 9,778 1.61 Multifamily 86,980 - 86,980 14.29 Office space 20,150 40,657 60,807 9.99 Other 54,556 25,197 79,753 13.11 Other real estate rental and leasing 4,877 - 4,877 0.80 Real estate leasing activities - 28,998 28,998 4.76 Wholesale and retail trade 14,575 13,861 28,436 4.67 Total commercial real estate $ 414,623 $ 194,068 $ 608,691 100.00 % Commercial real estate loans made up $645.96 million or 42.5% of the Bank's total loan portfolio at December 31, 2024, compared to $608.69 million or 41.0% at December 31, 2023.
The significant inputs and assumptions for the income approach include projected earnings of the Company in future years for which there is inherent uncertainty and the discount rate. The sensitivity of a range of reasonable discount rates based on the current economic environment is considered.
The significant inputs and assumptions for the income approach include a discount rate and projected earnings of the Company in future years for which there is inherent uncertainty. The sensitivity of a range of reasonable discount rates based on the current economic environment is considered.
Our investment securities generally include U.S. government and agency obligations, U.S. treasury obligations, Small Business Administration pools, municipal securities, corporate obligations, mortgage-backed securities (“MBSs”), collateralized mortgage obligations (“CMOs”) and asset-backed securities (“ABSs”), all with varying characteristics as to rate, maturity and call provisions. There were no held-to-maturity investment securities included in the investment portfolio at December 31, 2023 or 2022.
Our investment securities generally include U.S. government and agency obligations, U.S. treasury obligations, Small Business Administration pools, municipal securities, corporate obligations, mortgage-backed securities (“MBSs”), collateralized mortgage obligations (“CMOs”) and asset-backed securities (“ABSs”), all with varying characteristics as to rate, maturity and call provisions. There were no held-to-maturity investment securities included in the investment portfolio at December 31, 2024 or 2023.
Collateral-dependent loans and nonperforming loans will generally be evaluated individually. 32 Table of Contents Management’s evaluation of classification of assets and adequacy of the allowance for credit losses is reviewed by the Board on a regular basis and by regulatory agencies as part of their examination process. We also utilize a third-party review as part of our loan classification process.
Collateral-dependent loans and nonperforming loans will generally be evaluated individually. 28 Table of Contents Management’s evaluation of classification of assets and adequacy of the allowance for credit losses is reviewed by the Board on a regular basis and by regulatory agencies as part of their examination process. We also utilize a third-party review as part of our loan classification process.
The presence of a high percentage of core deposits and, in particular, transaction accounts reflects in part due to our strategy to restructure our liabilities to more closely resemble the lower cost of liabilities of a commercial bank. However, a significant portion of our deposits is in certificate of deposit form and there was growth in this area during 2023.
The presence of a high percentage of core deposits and, in particular, transaction accounts reflects in part due to our strategy to restructure our liabilities to more closely resemble the lower cost of liabilities of a commercial bank. However, a significant portion of our deposits is in certificate of deposit form and there was growth in this area during 2024.
( 4 ) For purposes of this table, tax exempt income is not calculated on a tax equivalent basis. 38 Table of Contents Rate/Volume Analysis The following table presents the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities.
( 4 ) For purposes of this table, tax exempt income is not calculated on a tax equivalent basis. 32 Table of Contents Rate/Volume Analysis The following table presents the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities.
The Bank’s strong capital position helps to mitigate its interest rate risk exposure. As of December 31, 2023, the Company’s regulatory capital was in excess of all applicable regulatory requirements and is deemed “well capitalized” pursuant to State of Montana and FRB rules.
The Bank’s strong capital position helps to mitigate its interest rate risk exposure. As of December 31, 2024 , the Company’s regulatory capital was in excess of all applicable regulatory requirements and is deemed “well capitalized” pursuant to State of Montana and FRB rules.
Eagle also has a line of credit with a correspondent bank, which was increased from $10.00 million to $15.00 million as of October 30, 2023. There was no outstanding balance for this line of credit at December 31, 2023 or December 31, 2022.
Eagle also has a line of credit with a correspondent bank, which was increased from $10.00 million to $15.00 million as of October 30, 2023. There was no outstanding balance for this line of credit at December 31, 2024 or December 31, 2023 .
Such evaluation includes a review of all loans for which full collectability may not be reasonably assured and considers, among other matters: the estimated market value of the underlying collateral of problem loans; prior loss experience; economic conditions; and overall portfolio quality. Provisions for, or adjustments to, estimated losses are included in earnings in the period they are established.
Such evaluation includes a review of all loans for which full collectability may not be reasonably assured and considers, among other matters: the estimated market value of the underlying collateral of problem loans; prior loss experience; economic conditions; and overall portfolio quality. 29 Table of Contents Provisions for, or adjustments to, estimated losses are included in earnings in the period they are established.
See Note 4 to the Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data” for further information. Goodwill The excess of consideration paid over fair value of net assets acquired for acquisitions is recorded as goodwill.
See Note 3 to the Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data” for further information. Goodwill The excess of consideration paid over fair value of net assets acquired for acquisitions is recorded as goodwill.
The level and movement of interest rates impacts the Bank’s earnings as well. The Federal Open Market Committee increased the federal funds target rate to 4.50% during the year ended December 31, 2022. The rate increased to 5.50% during the year ended December 31, 2023.
The level and movement of interest rates impacts the Bank’s earnings as well. The Federal Open Market Committee increased the federal funds target rate to 5.50% during the year ended December 31, 2023.
The Company’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.
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.
“Basic surplus with FHLB” adds to “basic surplus” the additional borrowing capacity the Bank has with the FHLB of Des Moin es. The Bank exceeded those minimum ratios as of December 31, 2023 and 2022.
“Basic surplus with FHLB” adds to “basic surplus” the additional borrowing capacity the Bank has with the FHLB of Des Moin es. The Bank exceeded those minimum ratios as of December 31, 2024 and 2023.
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. 25 Table of Contents Fee income is also supplemented with fees generated from deposit accounts.
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. Fee income is also supplemented with fees generated from deposit accounts.
An impairment charge is recorded for the amount by which the carrying amount exceeds the reporting unit's fair value. A blend of both the market and income approaches is used in valuing the reporting unit’s fair value. Weightings are assigned to the approaches regarding fair value and the sensitivity of other weighting scenarios is considered.
An impairment charge is recorded for the amount by which the carrying amount exceeds the reporting unit's fair value. A weighted average of both the market and income approaches is used in valuing the reporting unit’s fair value. Weightings are assigned to the approaches regarding fair value and the sensitivity of other weighting scenarios is considered.
The following table includes average balances for statement of financial position 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 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 Bank’s management recognizes that fee income will also enable it to be less dependent on specialized lending and it maintains a significant loan serviced portfolio, which provides a steady source of fee income. As of December 31, 2023, we had mortgage servicing rights , net of $15.85 m illion compared to $15.41 million as of December 31, 2022.
The Bank’s management recognizes that fee income will also enable it to be less dependent on specialized lending and it maintains a significant loan serviced portfolio, which provides a steady source of fee income. As of December 31, 2024, we had mortgage servicing rights , net of $15.38 m illion compared to $15.85 million as of December 31, 2023.
Introduction The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") describes Eagle and its subsidiaries' results of operations for the year ended December 31, 2023 as compared to the year ended December 31, 2022, and also analyzes our financial condition as of December 31, 2023 as compared to December 31, 2022.
The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") describes Eagle and its subsidiaries' results of operations for the year ended December 31, 2024 as compared to the year ended December 31, 2023, and also analyzes our financial condition as of December 31, 2024 as compared to December 31, 2023.
Net cash provided by operating activities was lower for the year ended December 31, 2023 primarily due to changes in loans held-for-sale activity. Mortgage volumes have been impacted by the current interest rate environment.
Net cash provided by operating activities was higher for the year ended December 31, 2024 primarily due to changes in loans held-for-sale activity. Mortgage volumes have been impacted by the current interest rate environment.
All investment securities included in the investment portfolio are available-for-sale. Eagle also has interest-bearing deposits in other banks and federal funds sold, as well as stock in FHLB and FRB. FHLB stock was $9.19 million and $5.09 million at December 31, 2023 and 2022, respectively. FRB stock was $4.13 million for both at December 31, 2023 and 2022.
All investment securities included in the investment portfolio are available-for-sale. Eagle also has interest-bearing deposits in other banks and federal funds sold, as well as stock in FHLB and FRB. FHLB stock was $7.78 million and $9.19 million at December 31, 2024 and 2023, respectively. FRB stock was $4.13 million for both at December 31, 2024 and 2023.
The increase was due to FHLB advances and other borrowings being deployed to fund loan growth. The average rate paid on total borrowings also increased from 4.07% for the year ended December 31, 2022 , to 5.16% for the year ended December 31, 2023 due to FHLB advances and other borrowings.
The increase was due to FHLB advances and other borrowings being deployed to fund loan growth. The average rate paid on total borrowings also increased from 5.16% for the year ended December 31, 2023, to 5.18% for the year ended December 31, 2024.
Net cash used in investing activities for the year ended December 31, 2023, was impacted by loan originations being higher than loan pay-off and principal payments during the year. Loan origination and principal collection, net was $130.74 million for the year ended December 31, 2023. Pay-off activity has slowed with current interest rate levels.
Net cash used in investing activities for the year ended December 31, 2024, was impacted by loan originations being higher than loan pay-off and principal payments during the year. Loan origination and principal collection, net was $36.20 million for the year ended December 31, 2024. Pay-off activity has slowed with current interest rate levels.
Net cash used in the Company’s investing activities, which is primarily comprised of cash transactions related to activity in the loan portfolio and investment securities, was $108.21 million for the year ended December 31, 2023 compared to $235.04 million for the year ended December 31, 2022.
Net cash used in the Company’s investing activities, which is primarily comprised of cash transactions related to activity in the loan portfolio and investment securities, was $27.80 million for the year ended December 31, 2024 compared to $108.21 million for the year ended December 31, 2023.
Changes in Market EVE as a % Change from 0 Shock Interest Rates As of December 31, 2023 Board Policy (Basis Points) Projected EVE Limit Maximum % change: +400 -3.1% -40.0% +300 -1.9% -35.0% +200 -1.3% -30.0% +100 0.4% -20.0% 0 0.0% 0.0% -100 -3.1% -20.0% Off-Balance Sheet Arrangements As a financial services provider, we routinely are a party to various financial instruments with off-balance-sheet risks, such as commitments to extend credit and unused lines of credit.
Changes in Market EVE as a % Change from 0 Shock Interest Rates As of December 31, 2024 Board Policy (Basis Points) Projected EVE Limit Maximum % change: +300 2.2% -35.0% +200 1.7% -30.0% +100 1.5% -20.0% 0 0.0% 0.0% -100 -3.1% -20.0% -200 -7.9% -30.0% -300 -14.6% -35.0% Off-Balance Sheet Arrangements As a financial services provider, we routinely are a party to various financial instruments with off-balance-sheet risks, such as commitments to extend credit and unused lines of credit.
Changes in Market Rate Sensitivity Interest Rates As of December 31, 2023 Policy (Basis Points) Year 1 Year 2 Limits +200 -8.4% 6.3% -15.0% +100 -3.8% 9.0% -10.0% -100 4.0% 12.0% -10.0% -200 7.7% 12.6% -15.0% The following table discloses how the Bank’s economic value of equity (“EVE”) would react to interest rate changes.
Changes in Market Rate Sensitivity Policy Policy Interest Rates As of December 31, 2024 Limits Limits (Basis Points) Year 1 Year 2 Year 1 Year 2 +300 -7.8 % 6.9 % -15.0 % -20.0 % +200 -5.2 % 7.0 % -15.0 % -15.0 % +100 -2.3 % 7.8 % -10.0 % -10.0 % -100 1.3 % 5.3 % -10.0 % -10.0 % -200 2.4 % 2.5 % -15.0 % -15.0 % -300 3.9 % -0.2 % -15.0 % -20.0 % 36 Table of Contents The following table discloses how the Bank’s economic value of equity (“EVE”) would react to interest rate changes.
Net cash used in investing activities for the year ended December 31, 2022 was due in part to loan originations being higher than loan pay-off and principal payments during the year. Loan origination and principal collection, net was $234.26 million for the year ended December 31, 2022.
Net cash used in investing activities for the year ended December 31, 2023 was due in part to loan originations being higher than loan pay-off and principal payments during the year. Loan origination and principal collection, net was $130.74 million for the year ended December 31, 2023.
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.
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.
During the year ended December 31, 2023 , the Bank had one real estate owned and other repossessed asset. There were no subsequent write-downs on real estate owned or other repossessed assets during the year ended December 31, 2023.
During the year ended December 31, 2023, the Bank sold one real estate owned and other repossessed asset. There were no subsequent write-up on real estate owned and other repossessed assets during the year ended December 31, 2023.
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.
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.
Management monitors projected liquidity needs and determines the level desirable based in part on Eagle’s commitments to make loans and management’s assessment of Eagle’s ability to generate funds. The Bank's available borrowing capacity was approximately $398.50 milli on as of December 31, 2023 and $419.20 million as of December 31, 2022.
Management monitors projected liquidity needs and determines the level desirable based in part on Eagle’s commitments to make loans and management’s assessment of Eagle’s ability to generate funds. 34 Table of Contents The Bank's available borrowing capacity was approximately $404.0 milli on as of December 31, 2024 and $398.50 million as of December 31, 2023.
Interest accretion on purchased loans was $1.01 million for the year ended December 31, 2023 , which resulted in a 6 basis point increase in net interest margin compared to $1.56 million for the year ended December 31, 2022 , which resulted in a 10 basis point increase in net interest margin.
Interest accretion on purchased loans was $751,000 for the year ended December 31, 2024, which resulted in a 4 basis point increase in net interest margin, compared to $1.01 million for the year ended December 31, 2023, which resulted in a 6 basis point increase in net interest margin.
At December 31, 2023, w e had $16.44 mil lion in allowance for credit losses. At December 31, 2022, we had $14.00 million in allowance for loan losses.
At December 31, 2024, w e had $16.85 mil lion in allowance for credit losses. At December 31, 2023 , we had $16.44 million in allowance for loan losses.
The following table sets forth information regarding nonperforming assets: December 31, 2023 2022 2021 2020 2019 (Dollars in Thousands) Non-accrual loans Real estate loans: Residential 1-4 family $ 297 $ 483 $ 616 $ 684 $ 618 Residential 1-4 family construction 757 - 337 337 337 Commercial real estate 340 350 497 631 583 Commercial construction and development - - - 36 50 Farmland 3,716 143 989 2,245 323 Other loans: Home equity 182 96 100 94 78 Consumer 60 25 62 151 156 Commercial 27 44 516 537 750 Agricultural 3,016 1,059 1,718 1,542 499 Accruing loans delinquent 90 days or more Real estate loans: Residential 1-4 family - 330 - 34 4 Residential 1-4 family construction - - - 170 - Farmland 26 - - - - Other loans: Commercial - 746 - 6 - Agricultural - - - 182 1,805 Restructured loans - 4,502 2,224 1,824 247 Total nonperforming loans 8,421 7,778 7,059 8,473 5,450 Real estate owned and other repossessed property, net 5 - 4 25 26 Total nonperforming assets $ 8,426 $ 7,778 $ 7,063 $ 8,498 $ 5,476 Total nonperforming loans to total loans 0.57 % 0.57 % 0.76 % 1.00 % 0.70 % Total nonperforming loans to total assets 0.41 % 0.40 % 0.49 % 0.67 % 0.52 % Total nonaccrual loans to total loans 0.57 % 0.24 % 0.59 % 0.74 % 0.47 % Total nonperforming assets to total assets 0.41 % 0.40 % 0.49 % 0.68 % 0.52 % Nonaccrual loans as of December 31, 2023 and 2022 inclu de $1,681,000 and $694,000, respectively of acquired loans that deteriorated subsequent to the acquisition date.
The following table sets forth information regarding nonperforming assets: December 31, 2024 2023 2022 2021 2020 (Dollars in Thousands) Non-accrual loans Real estate loans: Residential 1-4 family $ 469 $ 297 $ 483 $ 616 $ 684 Residential 1-4 family construction 961 757 - 337 337 Commercial real estate 268 340 350 497 631 Commercial construction and development 2 - - - 36 Farmland 190 3,716 143 989 2,245 Other loans: Home equity 335 182 96 100 94 Consumer 121 60 25 62 151 Commercial 204 27 44 516 537 Agricultural 677 3,016 1,059 1,718 1,542 Accruing loans delinquent 90 days or more Real estate loans: Residential 1-4 family 623 - 330 - 34 Residential 1-4 family construction - - - - 170 Farmland - 26 - - - Other loans: Home equity - - - - - Commercial - - 746 - 6 Agricultural - - - - 182 Restructured loans - - 4,502 2,224 1,824 Total nonperforming loans 3,850 8,421 7,778 7,059 8,473 Real estate owned and other repossessed property, net 45 5 - 4 25 Total nonperforming assets $ 3,895 $ 8,426 $ 7,778 $ 7,063 $ 8,498 Total nonperforming loans to total loans 0.25 % 0.57 % 0.57 % 0.76 % 1.00 % Total nonperforming loans to total assets 0.18 % 0.41 % 0.40 % 0.49 % 0.67 % Total nonaccrual loans to total loans 0.21 % 0.57 % 0.24 % 0.59 % 0.74 % Total nonperforming assets to total assets 0.19 % 0.41 % 0.40 % 0.49 % 0.68 % Nonaccrual loans as of December 31, 2024 and 2023 inclu de $591,000 and $1,681,000, respectively of acquired loans that deteriorated subsequent to the acquisition date.
The weighted average rate for borrowings was 5.48% as of December 31, 2023, compared to 4.52% at December 31, 2022. Other Long-Term Debt.
The weighted average rate for borrowings was 4.72% as of December 31, 2024, compared to 5.48% at December 31, 2023. 31 Table of Contents Other Long-Term Debt.
The BTFP offers 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 are valued at par. The Company did not utilize the program during 2023; however, this is another available funding source.
The BTFP offers 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 are valued at par. The Company did not utilize the program during 2023. In March of 2024, the Company accessed borrowings through the BTFP.
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) and the subsequent twelve months (i.e. year-2) will not be reduced by more than 15.0% given an immediate increase or decrease in interest rates of up to 200 basis points or by more than 10.0% given an immediate increase or decrease in interest rates of up to 100 basis points. 42 Table of Contents The following table includes the Bank's net interest income sensitivity analysis.
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 20.0% given an immediate increase or decrease in interest rates of up to 400 basis points, and the subsequent twelve months (i.e. year-2) will not be reduced by more than 25.0% given an immediate increase or decrease in interest rates of up to 400 basis points.
In addition, the average balance for total deposits was $1.60 billion for the year ended December 31, 2023, compared to $1.51 billion for the year ended December 31, 2022. The average balance for total borrowings increased from $74.43 million for the year ended December 31, 2022 to $218.60 million for the year ended December 31, 2023 .
In addition, the average balance for total deposits was $1.64 billion for the year ended December 31, 2024, compared to $1.60 billion for the year ended December 31, 2023. The average balance for total borrowings increased from $218.60 million for the year ended December 31, 2023 to $249.16 million for the year ended December 31, 2024.
December 31, December 31, 2023 2022 Borrowings Remaining Borrowing Borrowings Remaining Borrowing Outstanding Capacity Outstanding Capacity (Dollars in Thousands) Federal Home Loan Bank advances $ 175,737 $ 266,017 $ 69,394 $ 296,200 Federal Reserve Bank discount window - 32,472 - 38,000 Correspondent bank lines of credit - 100,000 - 85,000 Total $ 175,737 $ 398,489 $ 69,394 $ 419,200 During the first quarter of 2023, the FRB offered a new Bank Term Funding Program ("BTFP") for eligible depository institutions.
December 31, December 31, 2024 2023 Borrowings Remaining Borrowing Borrowings Remaining Borrowing Outstanding Capacity Outstanding Capacity (Dollars in Thousands) Federal Home Loan Bank advances $ 140,930 $ 276,664 $ 175,737 $ 266,017 Federal Reserve Bank discount window - 27,349 - 32,472 Correspondent bank lines of credit - 100,000 - 100,000 Total $ 140,930 $ 404,013 $ 175,737 $ 398,489 During the first quarter of 2023, the FRB offered a new Bank Term Funding Program ("BTFP") for eligible depository institutions.
The following table summarizes other long-term debt activity: December 31, December 31, 2023 2022 Net Percent Net Percent Amount of Total Amount of Total (Dollars in Thousands) Subordinated debentures fixed at 5.50% to floating, due 2030 $ 14,781 $ 25.05 $ 14,751 $ 25.07 Subordinated debentures fixed at 3.50% to floating, due 2032 39,063 66.21 38,938 66.17 Subordinated debentures variable at 3-Month Secured Overnight Financing Rate plus 1.68%, due 2035 5,155 8.74 5,155 8.76 Total other long-term debt, net $ 58,999 100.00 % $ 58,844 100.00 % Total other long-term de bt was $59.00 million at December 31, 2023 compared t o $58.84 million at December 31, 2022.
The following table summarizes other long-term debt activity: December 31, December 31, 2024 2023 Net Percent Net Percent Amount of Total Amount of Total (Dollars in Thousands) Subordinated debentures fixed at 5.50% to floating, due 2030 $ 14,815 $ 25.05 $ 14,781 $ 25.05 Subordinated debentures fixed at 3.50% to floating, due 2032 39,179 66.24 39,063 66.21 Subordinated debentures variable at 3-Month SOFR plus 1.68%, due 2035 5,155 8.71 5,155 8.74 Total other long-term debt, net $ 59,149 100.00 % $ 58,999 100.00 % Total other long-term de bt was $59.15 million at December 31, 2024 compared t o $59.00 million at December 31, 2023 .
The following table presents allocation of the allowance for credit losses by loan category and the percentage of loans in each category to total loans: December 31, 2023 2022 2021 Amount Percentage of Allowance to Total Allowance Loan Category to Total Loans Amount Percentage of Allowance to Total Allowance Loan Category to Total Loans Amount Percentage of Allowance to Total Allowance Loan Category to Total Loans (Dollars in Thousands) Real estate loans: Residential 1-4 family $ 1,866 11.35 % 13.48 % $ 1,472 10.51 % 14.44 % $ 1,596 12.77 % 15.70 % Commercial real estate 10,691 65.03 61.25 9,037 64.55 60.97 7,470 59.76 60.97 Total real estate loans 12,557 76.38 74.73 10,509 75.06 75.41 9,066 72.53 76.67 Other loans: Home equity 540 3.28 5.86 509 3.64 5.48 533 4.26 5.54 Consumer 304 1.85 2.03 342 2.44 2.04 365 2.92 1.97 Commercial 3,039 18.49 17.38 2,640 18.86 17.07 2,536 20.29 15.82 Total other loans 3,883 23.62 25.27 3,491 24.94 24.59 3,434 27.47 23.33 Total $ 16,440 100.00 % 100.00 % $ 14,000 100.00 % 100.00 % $ 12,500 100.00 % 100.00 % 35 Table of Contents Deposits and Other Sources of Funds Deposits .
The following table presents allocation of the allowance for credit losses by loan category and the percentage of loans in each category to total loans: December 31, 2024 2023 2022 Amount Percentage of Allowance to Total Allowance Loan Category to Total Loans Amount Percentage of Allowance to Total Allowance Loan Category to Total Loans Amount Percentage of Allowance to Total Allowance Loan Category to Total Loans (Dollars in Thousands) Real estate loans: Residential 1-4 family $ 1,911 11.34 % 13.12 % $ 1,866 11.35 % 13.48 % $ 1,472 10.51 % 14.44 % Commercial real estate 10,907 64.74 60.29 10,691 65.03 61.25 9,037 64.55 60.97 Total real estate loans 12,818 76.08 73.41 12,557 76.38 74.73 10,509 75.06 75.41 Other loans: Home equity 553 3.28 6.41 540 3.28 5.86 509 3.64 5.48 Consumer 245 1.45 1.88 304 1.85 2.03 342 2.44 2.04 Commercial 3,234 19.19 18.30 3,039 18.49 17.38 2,640 18.86 17.07 Total other loans 4,032 23.92 26.59 3,883 23.62 25.27 3,491 24.94 24.59 Total $ 16,850 100.00 % 100.00 % $ 16,440 100.00 % 100.00 % $ 14,000 100.00 % 100.00 % 30 Table of Contents Deposits and Other Sources of Funds Deposits .
The Bank is within the guidelines set forth by the Board of Directors for interest rate sensitivity. The Bank’s Tier 1 leverage ratio, as measured under State of Montana and FRB ru les, decreased from 9.82% as of December 31, 2022 to 9.75% a s of December 31, 2023.
The Bank is within the guidelines set forth by the Board of Directors for interest rate sensitivity. The Bank’s Tier 1 leverage ratio, as measured under State of Montana and FRB rules, increased from 9.75% as of December 31, 2023 to 10.07% as of December 31, 2024 .
However, the estimated amount of uninsured deposits was approximately $275.00 million or 17% of total deposits at December 31, 2023 considering other factors su ch as joint accounts, deposits collateralized by Bank securities and deposit sharing programs like Intrafi Cash Service.
However, the estimated amount of uninsured deposits was approximately $323.12 million or 18.9% of total deposits at December 31, 2024 considering other factors such as joint accounts, deposits collateralized by Bank securities and deposit sharing programs like Intrafi Cash Service.
Available-for-sale securities sales and maturities, principal payments and calls were $66.72 million for the year ended December 31, 2023. A portion of the proceeds were used to purchase additional available-for-sale securities totaling $28.13 million.
Available-for-sale securities sales and maturities, principal payments and calls were $35.27 million for the year ended December 31, 2024. A portion of the proceeds were used to purchase additional available-for-sale securities totaling $10.98 million.
At December 31, 2023, the Bank’s total capital, Tier 1 capital, common equity Tier 1 capital and Tier 1 leverage ratios amounted to 13.01%, 11.96%, 11.96% and 9.75%, respectively, compared to regulatory requirements of 10.50%, 8.50%, 7.00% and 4.00%, respectively.
At December 31, 2024 , the Bank’s total capital, Tier 1 capital, common equity Tier 1 capital and Tier 1 leverage ratios amounted to 13.49%, 12.41%, 12.41% and 10.07%, respectively, compared to regulatory requirements of 10.50%, 8.50%, 7.00% and 4.00%, respectively.
It is our policy to review our loan portfolio, in accordance with regulatory classification procedures, on at least a quarterly basis. 34 Table of Contents The following table includes information for allowance for credit losses: Years Ended December 31, 2023 2022 2021 (Dollars in Thousands) Beginning balance $ 14,000 $ 12,500 $ 11,600 Impact of adopting ASC 326 700 - - Provision for credit losses 1,666 2,001 861 Charge-offs Residential 1-4 Family - (199 ) - Commercial real estate - - (35 ) Home equity - (32 ) - Consumer (50 ) (31 ) (16 ) Commercial (129 ) (299 ) (6 ) Recoveries Residential 1-4 Family 195 4 - Commercial real estate 23 30 21 Home equity 13 - - Consumer 3 4 8 Commercial 19 22 67 Net loan charge-offs (recoveries) 74 (501 ) 39 Ending balance $ 16,440 $ 14,000 $ 12,500 Allowance for credit losses to total loans excluding loans held-for-sale 1.11 % 1.03 % 1.34 % Allowance for credit losses to total nonperforming loans 195.23 % 179.99 % 177.08 % Allowance for credit losses to nonaccrual loans 249.96 % 424.50 % 199.23 % Net charge-offs (recoveries) to average loans outstanding during the period 0.01 % -0.04 % 0.00 % Net charge-offs to average loans outstanding for each loan category are considered insignificant for the periods presented in the table above.
The following table includes information for allowance for credit losses: Years Ended December 31, 2024 2023 2022 (Dollars in Thousands) Beginning balance $ 16,440 $ 14,000 $ 12,500 Impact of adopting ASC 326 - 700 - Provision for credit losses 408 1,666 2,001 Charge-offs Residential 1-4 Family (11 ) - (199 ) Commercial real estate - - - Home equity - - (32 ) Consumer (65 ) (50 ) (31 ) Commercial (10 ) (129 ) (299 ) Recoveries Residential 1-4 Family - 195 4 Commercial real estate 18 23 30 Home equity - 13 - Consumer 3 3 4 Commercial 67 19 22 Net loan charge-offs (recoveries) 2 74 (501 ) Ending balance $ 16,850 $ 16,440 $ 14,000 Allowance for credit losses to total loans excluding loans held-for-sale 1.11 % 1.11 % 1.03 % Allowance for credit losses to total nonperforming loans 437.66 % 195.23 % 179.99 % Allowance for credit losses to nonaccrual loans 526.56 % 249.96 % 424.50 % Net charge-offs (recoveries) to average loans outstanding during the period 0.00 % 0.01 % -0.04 % Net charge-offs to average loans outstanding for each loan category are considered insignificant for the periods presented in the table above.
The decrease was due to sales of $34.02 million and maturity, principal payments and call activity of $32.70 million. These decreases were partially offset by $28.13 million in investment purchases. In addition, unrealized losses on securities improved from prior year, decreasing by $8.70 million. The following table sets forth information regarding fair values, weighted average yields and maturities of investments.
The decrease was due to sales of $14.12 million and maturity, principal payments and call activity of $21.45 million. These decreases were partially offset by $10.98 million in investment purchases. In addition, unrealized losses on securities increased from prior year by $273,000. The following table sets forth information regarding fair values, weighted average yields and maturities of investments.
In addition, the average interest rate earned on loans receivable increased by 48 basis points, from 5.05% for the year ended December 31, 2022, to 5.53% for the year ended December 31, 2023.
The average interest rate earned on loans receivable increased by 51 basis points, from 5.53% for the year ended December 31, 2023, to 6.04% for the year ended December 31, 2024.
( 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 credit losses (for year ended December 31, 2023) or provision for loan losses (for the year ended December 31, 2022) divided by average interest-earning assets.
( 3 ) Net interest margin represents income before the provision for credit losses (for years ended December 31, 2024 and December 31, 2023) or provision for loan losses (for the year ended December 31, 2022) divided by average interest-earning assets.
Mortgage banking, net includes net gain on sale of mortgage loans which decreased $ 7.21 million to $11.40 million for the year ended December 31, 2023 , compared to $18.61 million for the year ended December 31, 2022 .
Mortgage banking, net includes net gain on sale of mortgage loans which decreased $4.66 million to $6.74 million for the year ended December 31, 2024 , compared to $11.40 million for the year ended December 31, 2023 .
The following table summarizes investment activities: December 31, 2023 2022 2021 Fair Value Percentage of Total Fair Value Percentage of Total Fair Value Percentage of Total (Dollars in Thousands) Securities available-for-sale: U.S. government and agency obligations $ 6,543 2.06 % $ 2,390 0.68 % $ 1,633 0.60 % U.S. treasury obligations 46,815 14.71 % 51,951 14.86 53,183 19.61 Municipal obligations 137,950 43.33 % 172,849 49.47 123,667 45.58 Corporate obligations 3,905 1.23 % 6,990 2.00 9,336 3.44 Mortgage-backed securities 26,753 8.41 % 29,653 8.48 14,636 5.40 Collateralized mortgage obligations 86,568 27.20 % 82,131 23.50 63,067 23.25 Asset-backed securities 9,745 3.06 % 3,531 1.01 5,740 2.12 Total securities available-for-sale $ 318,279 100.00 % $ 349,495 100.00 % $ 271,262 100.00 % Securities available-for-sale were $318.28 million at December 31, 2023, a decrease o f $31.22 million, or 8.9%, from $ 349.50 mill ion at December 31, 2022.
The following table summarizes investment activities: December 31, 2024 2023 2022 Fair Value Percentage of Total Fair Value Percentage of Total Fair Value Percentage of Total (Dollars in Thousands) Securities available-for-sale: U.S. government and agency obligations $ 5,195 1.78 % $ 6,543 2.06 % $ 2,390 0.68 % U.S. treasury obligations 46,913 16.03 % 46,815 14.71 51,951 14.86 Municipal obligations 117,877 40.29 % 137,950 43.33 172,849 49.47 Corporate obligations 4,162 1.42 % 3,905 1.23 6,990 2.00 Mortgage-backed securities 28,235 9.65 % 26,753 8.41 29,653 8.48 Collateralized mortgage obligations 82,623 28.24 % 86,568 27.20 82,131 23.50 Asset-backed securities 7,585 2.59 % 9,745 3.06 3,531 1.01 Total securities available-for-sale $ 292,590 100.00 % $ 318,279 100.00 % $ 349,495 100.00 % Securities available-for-sale were $292.59 million at December 31, 2024, a decrease o f $25.69 million, or 8.1%, from $318.28 million at December 31, 2023.
December 31, 2023 One Year or Less One to Five Years Five to Ten Years After Ten Years Total Investment Securities Fair Value Weighted Average Yield Fair Value Weighted Average Yield Fair Value Weighted Average Yield Fair Value Weighted Average Yield Fair Value Approximate Market Value Weighted Average Yield (Dollars in Thousands) Securities available-for-sale: U.S. government and agency obligations $ - 0.00 % $ - 0.00 % $ 4,298 5.02 % $ 2,245 7.49 % $ 6,543 $ 6,543 5.86 % U.S. treasury obligations - 0.00 31,001 1.45 15,814 1.66 - 0.00 46,815 46,815 1.52 Municipal obligations 2,546 3.19 7,710 2.77 38,809 2.72 88,885 3.13 137,950 137,950 2.93 Corporate obligations - 0.00 975 3.00 2,930 4.99 - 0.00 3,905 3,905 4.49 Mortgage-backed securities 505 3.03 3,052 3.29 3,145 3.37 20,051 4.51 26,753 26,753 4.21 Collateralized mortgage obligations 4,084 2.74 5,347 3.97 763 2.93 76,374 3.89 86,568 86,568 3.84 Asset-backed securities - 0.00 - 0.00 - 0.00 9,745 6.65 9,745 9,745 6.65 Total securities available-for-sale $ 7,135 2.92 % $ 48,085 2.09 % $ 65,759 2.43 % $ 197,300 3.70 % $ 318,279 $ 318,279 3.27 % 28 Table of Contents Lending Activities The following table includes the composition of the Bank’s loan portfolio by loan category: December 31, 2023 2022 2021 2020 2019 Amount Percent of Total Amount Percent of Total Amount Percent of Total Amount Percent of Total Amount Percent of Total (Dollars in thousands) Real estate loans: Residential 1-4 family (1) $ 156,578 10.55 % $ 135,947 10.03 % $ 101,180 10.82 % $ 110,802 13.14 % $ 119,296 15.28 % Residential 1-4 family construction 43,434 2.93 59,756 4.41 45,635 4.88 46,290 5.49 38,602 4.95 Total residential 1-4 family 200,012 13.48 195,703 14.44 146,815 15.70 157,092 18.63 157,898 20.23 Commercial real estate 608,691 40.99 539,070 39.76 410,568 43.92 316,668 37.56 331,062 42.41 Commercial construction and development 158,132 10.65 151,145 11.15 92,403 9.88 65,281 7.74 52,670 6.75 Farmland 142,590 9.61 136,334 10.06 67,005 7.17 65,918 7.82 50,293 6.44 Total commercial real estate 909,413 61.25 826,549 60.97 569,976 60.97 447,867 53.12 434,025 55.60 Total real estate loans 1,109,425 74.73 1,022,252 75.41 716,791 76.67 604,959 71.75 591,923 75.83 Other loans: Home equity 86,932 5.86 74,271 5.48 51,748 5.54 56,563 6.71 56,414 7.23 Consumer 30,125 2.03 27,609 2.04 18,455 1.97 20,168 2.39 18,882 2.42 Commercial 132,709 8.94 127,255 9.39 101,535 10.86 109,209 12.95 72,797 9.33 Agricultural 125,298 8.44 104,036 7.68 46,355 4.96 52,242 6.20 40,522 5.19 Total commercial loans 258,007 17.38 231,291 17.07 147,870 15.82 161,451 19.15 113,319 14.52 Total other loans 375,064 25.27 333,171 24.59 218,073 23.33 238,182 28.25 188,615 24.17 Total loans 1,484,489 100.00 % 1,355,423 100.00 % 934,864 100.00 % 843,141 100.00 % 780,538 100.00 % Deferred loan fees (2) - (1,725 ) (1,725 ) (2,038 ) (1,303 ) Allowance for credit losses (3) (16,440 ) (14,000 ) (12,500 ) (11,600 ) (8,600 ) Total loans, net $ 1,468,049 $ 1,339,678 $ 920,639 $ 829,503 $ 770,635 (1) Excludes loans held-for-sale (2) Deferred loan fees, net included in individual loan buckets above for the year ended December 31, 2023.
December 31, 2024 One Year or Less One to Five Years Five to Ten Years After Ten Years Total Investment Securities Fair Value Weighted Average Yield Fair Value Weighted Average Yield Fair Value Weighted Average Yield Fair Value Weighted Average Yield Fair Value Approximate Market Value Weighted Average Yield (Dollars in Thousands) Securities available-for-sale: U.S. government and agency obligations $ - $ - $ 263 $ 6.28 $ 3,200 $ 4.76 $ 1,732 $ 6.98 $ 5,195 $ 5,195 5.57 % U.S. treasury obligations 4,932 2.79 26,394 1.34 15,587 $ 1.66 - $ - 46,913 46,913 1.60 Municipal obligations 2,590 2.85 5,627 3.41 50,335 $ 2.72 59,325 $ 3.22 117,877 117,877 2.81 Corporate obligations 998 3.00 - - 3,164 $ 4.98 - $ - 4,162 4,162 4.51 Mortgage-backed securities 34 3.40 2,166 3.33 2,499 $ 3.38 23,536 $ 4.39 28,235 28,235 4.21 Collateralized mortgage obligations 2,388 1.00 3,374 7.34 778 $ 3.12 76,083 $ 3.72 82,623 82,623 3.72 Asset-backed securities - - - - - - 7,585 $ 6.07 7,585 7,585 6.07 Total securities available-for-sale $ 10,942 2.43 % $ 37,824 2.33 % $ 75,563 2.71 % $ 168,261 3.78 % $ 292,590 $ 292,590 3.16 % 24 Table of Contents Lending Activities The following table includes the composition of the Bank’s loan portfolio by loan category: December 31, 2024 2023 2022 2021 2020 Amount Percent of Total Amount Percent of Total Amount Percent of Total Amount Percent of Total Amount Percent of Total (Dollars in thousands) Real estate loans: Residential 1-4 family (1) $ 153,721 10.11 % $ 156,578 10.55 % $ 135,947 10.03 % $ 101,180 10.82 % $ 110,802 13.14 % Residential 1-4 family construction 45,701 3.01 43,434 2.93 59,756 4.41 45,635 4.88 46,290 5.49 Total residential 1-4 family 199,422 13.12 200,012 13.48 195,703 14.44 146,815 15.70 157,092 18.63 Commercial real estate 645,962 42.48 608,691 40.99 539,070 39.76 410,568 43.92 316,668 37.56 Commercial construction and development 124,211 8.17 158,132 10.65 151,145 11.15 92,403 9.88 65,281 7.74 Farmland 146,610 9.64 142,590 9.61 136,334 10.06 67,005 7.17 65,918 7.82 Total commercial real estate 916,783 60.29 909,413 61.25 826,549 60.97 569,976 60.97 447,867 53.12 Total real estate loans 1,116,205 73.41 1,109,425 74.73 1,022,252 75.41 716,791 76.67 604,959 71.75 Other loans: Home equity 97,543 6.41 86,932 5.86 74,271 5.48 51,748 5.54 56,563 6.71 Consumer 28,513 1.88 30,125 2.03 27,609 2.04 18,455 1.97 20,168 2.39 Commercial 144,039 9.47 132,709 8.94 127,255 9.39 101,535 10.86 109,209 12.95 Agricultural 134,346 8.83 125,298 8.44 104,036 7.68 46,335 4.96 52,242 6.20 Total commercial loans 278,385 18.30 258,007 17.38 231,291 17.07 147,870 15.82 161,451 19.15 Total other loans 404,441 26.59 375,064 25.27 333,171 24.59 218,073 23.33 238,182 28.25 Total loans 1,520,646 100.00 % 1,484,489 100.00 % 1,355,423 100.00 % 934,864 100.00 % 843,141 100.00 % Deferred loan fees (2) - - (1,745 ) (1,725 ) (2,038 ) Allowance for credit losses (3) (16,850 ) (16,440 ) (14,000 ) (12,500 ) (11,600 ) Total loans, net $ 1,503,796 $ 1,468,049 $ 1,339,678 $ 920,639 $ 829,503 (1) Excludes loans held-for-sale.
The following table includes deposit accounts and associated weighted average interest rates for each category of deposits: December 31, 2023 2022 2021 Weighted Weighted Weighted Percent Average Percent Average Percent Average Amount of Total Rate Amount of Total Rate Amount of Total Rate (Dollars in Thousands) Noninterest checking $ 418,727 25.61 % 0.00 % $ 468,955 28.68 % 0.00 % $ 368,846 30.16 % 0.00 % Interest-bearing checking 211,101 12.91 0.05 252,922 15.47 0.11 203,410 16.64 0.02 Savings 230,711 14.11 0.06 273,790 16.74 0.06 223,069 18.25 0.06 Money market 330,274 20.20 1.66 387,947 23.7 1.12 277,469 22.7 0.25 Total 1,190,813 72.83 0.40 1,383,614 84.61 0.34 1,072,794 87.75 0.08 Certificates of deposit accounts: IRA certificates 22,960 1.40 0.75 24,907 1.52 0.48 25,333 2.07 0.44 Brokered certificates 72,168 4.41 5.28 - 0.00 0.00 - 0.00 0.00 Other certificates 349,254 21.36 4.04 226,751 13.87 1.51 134,422 10.18 0.38 Total certificates of deposit 444,382 27.17 4.08 251,658 15.39 1.41 149,755 12.25 0.39 Total deposits $ 1,635,195 100.00 % 1.45 % $ 1,635,272 100.00 % 0.50 % $ 1,222,549 100.00 % 0.12 % Overall depo sit s remained consistent year over year at $1.64 billion.
The following table includes deposit accounts and associated weighted average interest rates for each category of deposits: December 31, 2024 2023 2022 Weighted Weighted Weighted Percent Average Percent Average Percent Average Amount of Total Rate Amount of Total Rate Amount of Total Rate (Dollars in Thousands) Noninterest checking $ 419,211 24.94 % 0.00 % $ 418,727 25.61 % 0.00 % $ 468,955 28.68 % 0.00 % Interest-bearing checking 221,476 13.17 0.18 211,101 12.91 0.05 252,922 15.47 0.11 Savings 210,572 12.52 0.06 230,711 14.11 0.06 273,790 16.74 0.06 Money market 367,094 21.83 1.82 330,274 20.20 1.66 387,947 23.72 1.12 Total 1,218,353 72.46 0.47 1,190,813 72.83 0.40 1,383,614 84.61 0.34 Certificates of deposit accounts: IRA certificates 21,419 1.27 0.94 22,960 1.40 0.75 24,907 1.52 0.48 Brokered certificates - - 0.00 72,168 4.41 5.28 - 0.00 0.00 Other certificates 441,456 26.27 4.41 349,254 21.36 4.04 226,751 13.87 1.51 Total certificates of deposit 462,875 27.54 4.25 444,382 27.17 4.08 251,658 15.39 1.41 Total deposits $ 1,681,228 100.00 % 1.59 % $ 1,635,195 100.00 % 1.45 % $ 1,635,272 100.00 % 0.50 % Overall deposits increased year over year by $46.03 million.
Interest and fees on loans increased to $ 79.42 million for the year ended December 31, 2023 from $60.35 million for the same period ended December 31, 2022 . This increase of $19.07 million, or 31.6% , was due in part to an increase in the average balance of loans.
Interest and fees on loans increased to $92.28 million for the year ended December 31, 2024 from $79.42 million for the same period ended December 31, 2023. This increase of $12.86 million, or 16.2%, was due in part to an increase in the average yield of loans.
The increase of $22.99 million, was due to an increase of $14.74 million in interest expense on deposits and a net increase of $8.26 million in interest expense on total borrowings. The overall average rate on total deposits was 1.11% for the year ended December 31, 2023, compared to 0.21% for the year ended December 31, 2022.
The increase of $11.63 million was due to an increase of $9.98 million in interest expense on deposits and a net increase of $1.65 million in interest expense on total borrowings. The overall average rate on total deposits was 1.70% for the year ended December 31, 2024, compared to 1.11% for the year ended December 31, 2023.
Commitments are summarized as follows: December 31, 2023 2022 (In Thousands) Commitments to extend credit $ 271,552 $ 367,494 Letters of credit 9,457 10,563
Commitments are summarized as follows: December 31, 2024 2023 (In Thousands) Commitments to extend credit $ 267,623 $ 271,552 Letters of credit 7,409 9,457
Results of Operations Comparison of Operating Results for the Years Ended December 31, 2023 and 2022 Net Income Eagle’s net income for the year ended December 31, 2023 was $10.06 million compared to $10.70 million for the year ended December 31, 2022 . The decrease of $645,000 of 6.0% was driven by a decrease in noninterest income of $3.50 million.
Results of Operations Comparison of Operating Results for the Years Ended December 31, 2024 and 2023 Net Income Eagle’s net income for the year ended December 31, 2024 was $9.78 million compared to $10.06 million for the year ended December 31, 2023. The decrease of $278,000 or 2.8% was driven by a decrease in noninterest income of $4.94 million.
Year Ended December 31, 2023 Year Ended December 31, 2022 Year Ended December 31, 2021 Average Interest Average Interest Average Interest Daily and Yield/ Daily and Yield/ Daily and Yield/ Balance Dividends Cost (4) Balance Dividends Cost (4) Balance Dividends Cost (4) (Dollars in Thousands) Assets: Interest earning assets: Investment securities $ 328,533 $ 11,376 3.46 % $ 336,779 $ 8,579 2.55 % $ 215,978 $ 4,238 1.96 % FHLB and FRB stock 12,851 727 5.66 6,369 302 4.74 4,831 255 5.28 Loans receivable (1) 1,436,672 79,423 5.53 1,194,788 60,353 5.05 914,804 45,134 4.93 Other earning assets 2,671 89 3.33 34,170 228 0.67 74,102 120 0.16 Total interest earning assets 1,780,727 91,615 5.14 1,572,106 69,462 4.42 1,209,715 49,747 4.11 Noninterest earning assets 234,859 196,813 147,534 Total assets $ 2,015,586 $ 1,768,919 $ 1,357,249 Liabilities and equity: Interest-bearing liabilities: Deposit accounts: Checking $ 237,006 $ 595 0.25 % $ 244,208 $ 173 0.07 % $ 190,645 $ 47 0.02 % Savings 238,695 146 0.06 269,033 128 0.05 198,648 117 0.06 Money market 331,199 5,548 1.68 358,122 1,711 0.48 244,113 545 0.22 Certificates of deposit 357,573 11,568 3.24 188,954 1,112 0.59 158,959 765 0.48 FHLB advances and other borrowings 159,667 8,562 5.36 14,627 514 3.51 9,411 175 1.86 Other long-term debt 58,930 2,719 4.61 59,807 2,512 4.2 29,834 1,558 5.22 Total interest-bearing liabilities 1,383,070 29,138 2.11 1,134,751 6,150 0.54 831,610 3,207 0.39 Noninterest checking 439,388 453,841 346,243 Other noninterest-bearing liabilities 34,321 24,672 22,382 Total liabilities 1,856,779 1,613,264 1,200,235 Total equity 158,807 155,655 157,014 Total liabilities and equity $ 2,015,586 $ 1,768,919 $ 1,357,249 Net interest income/interest rate spread (2) $ 62,477 3.04 % $ 63,312 3.88 % $ 46,540 3.72 % Net interest margin (3) 3.51 % 4.03 % 3.85 % Total interest earning assets to interest-bearing liabilities 128.75 % 138.54 % 145.47 % (1) Includes loans held-for-sale.
Year Ended December 31, 2024 Year Ended December 31, 2023 Year Ended December 31, 2022 Average Interest Average Interest Average Interest Daily and Yield/ Daily and Yield/ Daily and Yield/ Balance Dividends Cost (4) Balance Dividends Cost (4) Balance Dividends Cost (4) (Dollars in Thousands) Assets: Interest earning assets: Investment securities $ 306,538 $ 10,428 3.39 % $ 328,533 $ 11,376 3.46 % $ 336,779 $ 8,579 2.55 % FHLB and FRB stock 13,535 1,085 7.99 12,851 727 5.66 6,369 302 4.74 Loans receivable (1) 1,523,384 92,282 6.04 1,436,672 79,423 5.53 1,194,788 60,353 5.05 Other earning assets 6,663 416 6.23 2,671 89 3.33 34,170 228 0.67 Total interest-earning assets 1,850,120 104,211 5.62 1,780,727 91,615 5.14 1,572,106 69,462 4.42 Noninterest-earning assets 241,931 234,859 196,813 Total assets $ 2,092,051 $ 2,015,586 $ 1,768,919 Liabilities and equity: Interest-bearing liabilities: Deposit accounts: Checking $ 218,175 $ 391 0.18 % $ 237,006 $ 595 0.25 % $ 244,208 $ 173 0.07 % Savings 212,221 134 0.06 238,695 146 0.06 269,033 128 0.05 Money market 350,431 8,660 2.46 331,199 5,548 1.68 358,122 1,711 0.48 Certificates of deposit 443,313 18,653 4.20 357,573 11,568 3.24 188,954 1,112 0.59 FHLB advances and other borrowings 190,082 10,211 5.36 159,667 8,562 5.36 14,627 514 3.51 Other long-term debt 59,080 2,724 4.60 58,930 2,719 4.61 59,807 2,512 4.2 Total interest-bearing liabilities 1,473,302 40,773 2.76 1,383,070 29,138 2.11 1,134,751 6,150 0.54 Noninterest checking 412,251 439,388 453,841 Other noninterest-bearing liabilities 41,907 34,321 24,672 Total liabilities 1,927,460 1,856,779 1,613,264 Total equity 164,591 158,807 155,655 Total liabilities and equity $ 2,092,051 $ 2,015,586 $ 1,768,919 Net interest income/interest rate spread (2) $ 63,438 2.86 % $ 62,477 3.04 % $ 63,312 3.88 % Net interest margin (3) 3.42 % 3.51 % 4.03 % Total interest earning assets to interest-bearing liabilities 125.58 % 128.75 % 138.54 % (1) Includes loans held-for-sale.
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.
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.
The following table shows the amount of certificates of deposit with balances of $250,000 and greater by time remaining until maturity as of December 31, 2023: Balance $250,000 and Greater (In Thousands) 3 months or less $ 104,172 Over 3 to 6 months 39,107 Over 6 to 12 months 33,343 Over 12 months 3,988 Total $ 180,610 Our depositors are primarily residents of the state of Montana. 36 Table of Contents Borrowings .
The following table shows the amount of certificates of deposit with balances of $250,000 and greater by time remaining until maturity as of December 31, 2024: Balance $250,000 and Greater (In Thousands) 3 months or less $ 74,271 Over 3 to 6 months 31,044 Over 6 to 12 months 35,109 Over 12 months 5,229 Total $ 145,653 Our depositors are primarily residents of the state of Montana.
The Bank has also focused on adding commercial loans to our portfolio, both real estate and non-real estate. We have made significant progress in this initiative over the past decade. As of December 31, 2023, commercial real estate and commercial business loans represen ted 61.25% and 17.39% o f the total loan portfolio, respectively.
The Bank has also focused on adding commercial loans to our portfolio, both real estate and non-real estate. We have made significant progress in this initiative over the past decade. As of December 31, 2024, commercial real estate loans represented 60.3% of the total loan portfolio, including farmland loans representing 9.6% of the total loan portfolio.
Provision for Credit Losses Provision for credit losses was $1.46 million for the year ended December 31, 2023, compared to $2.00 million in loan loss provisions, prior to the adoption of the Current Expected Credit Losses standard, for the year ended December 31, 2022.
Provision for Credit Losses Provision for credit losses was $518,000 for the year ended December 31, 2024, compared to $1.46 million in loan loss provisions for the year ended December 31, 2023.
Brokered deposits are another source of funding the Bank may utilize from time to time. As of December 31, 2023, the Bank had $72.17 million in brokered certificates and $5.3 million in brokered money market deposits. As of December 31, 2022, the Bank had no brokered certificates and $5.3 million in brokered money market deposits.
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 December 31, 2024, the Bank had no brokered certificates and $5.57 m illion in brokered money market deposits.
This de crease of $835,000 , or 1.3%, was primarily the result of an increase in interest expense of $22.99 million largely offset by an increase in interest and dividend income of $22.16 million.
This increase of $961,000, or 1.5%, was primarily the result of an increase in interest and dividend income of $12.59 million largely offset by an increase in interest expense of $11.63 million.
Interest and Dividend Income Interest and dividend income was $ 91.62 million for the year ended December 31, 2023 , compared to $69.46 million for the year ended December 31, 2022 , an increase of $22.16 million, or 31.9% .
Interest and Dividend Income Interest and dividend income was $104.21 million for the year ended December 31, 2024, compared to $91.62 million for the year ended December 31, 2023, an increase of $12.59 million, or 13.7%.
Deposits are the primary source of funds for our lending and investment activities and for general business purposes. However, as the need arises, or in order to take advantage of funding opportunities, we also borrow funds in the form of advances from FHLB of Des Moines to supplement our supply of lendable funds and to meet deposit withdrawal requirements.
However, as the need arises, or in order to take advantage of funding opportunities, we also borrow funds in the form of advances from FHLB of Des Moines to supplement our supply of lendable funds and to meet deposit withdrawal requirements. The Bank has Federal funds lines of credit with PCBB, PNC, TIB and UBB.
Noninterest Expense Noninterest expense was $ 72.09 million for the year ended December 31, 2023 , compared to $73.68 million for the year ended December 31, 2022 , a decrease of $1.59 million, or 2.2%.
For the year ended December 31, 2024, gross margin was 3.18% compared to 3.31% for the year ended December 31, 2023. Noninterest Expense Noninterest expense was $ 69.31 million for the year ended December 31, 2024 , compared to $72.09 million for the year ended December 31, 2023 , a decrease of $2.78 million, or 3.9%.
Financial Condition Details Investment Activities We maintain a portfolio of investment securities, classified as either available-for-sale or held-to-maturity to enhance total return on investments.
Total shareholders’ equ ity increased by $5.50 million or 3.2% from December 31, 2023. 23 Table of Contents Financial Condition Details Investment Activities We maintain a portfolio of investment securities, classified as either available-for-sale or held-to-maturity to enhance total return on investments.
L oans receivable, n et increased by $128.37 million or 9.6%, to $1.47 b illion at December 31, 2023 from $1.34 billion at December 31, 2022. However, securities available-for -sale decreased by $31.22 million or 8.9% fro m December 31, 2022. Total borrowings increased $106.50 million to $234.74 million at December 31, 2023, from $128.24 million at December 31, 2022.
L oans receivable, n et increased by $ 35.75 million or 2.4% , to $ 1.50 b illion at December 31, 2024 from $1.47 billion at December 31, 2023. However, securities available-for -sale decreased by $ 25.69 million or 8.1% fro m December 31, 2023.
Core deposits were $1.21 billion or 74.2% of the Bank’s total deposits at December 31, 2023 ($1.19 billion or 72.8% excluding IRA certificates of deposit).
Core deposits were $1.24 billion or 73.7% of the Bank’s total deposits at December 31, 2024 ($1.22 billion or 72.5% excluding IRA certificates of deposit).
The purpose of this diversification is to mitigate our dependence on the residential mortgage market, as well as to improve our ability to manage our interest rate spread. Recent acquisitions have added to our agricultural loans, which generally have shorter maturities and nominally higher interest rates. This has provided additional interest income and improved interest rate sensitivity.
Recent acquisitions have added to our agricultural loans, which generally have shorter maturities and nominally higher interest rates. This has provided additional interest income and improved interest rate sensitivity.
During the year ended December 31, 2022, the Bank sold three real estate owned and other repossessed assets resulting in a net gain of $185,000. There was one subsequent write-up on real estate owned and other repossessed assets for a gain of $18,000 during the year ended December 31, 2022.
During the year ended December 31, 2024 , the Bank sold two real estate owned and other repossessed assets resulting in a net loss of $6,000. There were no subsequent write-downs on real estate owned or other repossessed assets during the year ended December 31, 2024.
Capital Resources At December 31, 2023, the Bank’s internally determined measurement of sensitivity to interest rate movements as measured by a 200-basis point rise in interest rates scenario, decreased the economic value of equity (“EV E”) by 1.3% compared to an decrease of 12.6% a t December 31, 2022.
Controls and Procedures for additional information regarding this matter. 35 Table of Contents Capital Resources At December 31, 2024 , 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 1.7% compared to a decrease of 1.3% at December 31, 2023 .
Year Ended December 31, 2023 Year Ended December 31, 2022 Due to Due to Volume Rate Net Volume Rate Net (In Thousands) Interest earning assets: Investment securities $ (210 ) $ 3,007 $ 2,797 $ 2,370 $ 1,971 $ 4,341 FHLB and FRB stock 307 118 425 81 (34 ) 47 Loans receivable (1) 12,218 6,852 19,070 13,814 1,405 15,219 Other earning assets (210 ) 71 (139 ) (65 ) 173 108 Total interest earning assets 12,105 10,048 22,153 16,200 3,515 19,715 Interest-bearing liabilities: Checking (5) 427 422 13 113 126 Savings (14) 32 18 41 (30) 11 Money market (129) 3,966 3,837 255 911 1,166 Certificates of deposit 992 9,464 10,456 144 203 347 FHLB advances and other borrowings 5,097 2,951 8,048 97 242 339 Other long-term debt (37 ) 244 207 1,565 (611 ) 954 Total interest-bearing liabilities 5,904 17,084 22,988 2,115 828 2,943 Change in net interest income $ 6,201 $ (7,036 ) $ (835 ) $ 14,085 $ 2,687 $ 16,772 (1) Includes loans held-for-sale.
Year Ended December 31, 2024 Year Ended December 31, 2023 Due to Due to Volume Rate Net Volume Rate Net (In Thousands) Interest earning assets: Investment securities $ (762 ) $ (186 ) $ (948 ) $ (210 ) $ 3,007 $ 2,797 FHLB and FRB stock 39 319 358 307 118 425 Loans receivable (1) 4,794 8,065 12,859 12,218 6,852 19,070 Other earning assets 133 194 327 (210 ) 71 (139 ) Total interest earning assets 4,204 8,392 12,596 12,105 10,048 22,153 Interest-bearing liabilities: Checking (47) (157) (204) (5) 427 422 Savings (16) 4 (12) (14) 32 18 Money market 322 2,790 3,112 (129) 3,966 3,837 Certificates of deposit 2,774 4,311 7,085 992 9,464 10,456 FHLB advances and other borrowings 1,631 18 1,649 5,097 2,951 8,048 Other long-term debt 7 (2 ) 5 (37 ) 244 207 Total interest-bearing liabilities 4,671 6,964 11,635 5,904 17,084 22,988 Change in net interest income $ (467 ) $ 1,428 $ 961 $ 6,201 $ (7,036 ) $ (835 ) (1) Includes loans held-for-sale.
Average balances for loans receivable, including loans held-for-sale, for the year ended December 31, 2023 were $1.44 billion, compared to $1.19 billion for the year ended December 31, 2022. This represents an increase of $241.88 million, or 20.2%.
In addition, average balances for loans receivable, including loans-held-for-sale, for the year ended December 31, 2024 were $1.52 billion, compared to $1.44 billion for the year ended December 31, 2023. This represents an increase of $86.71 million, or 6.00% and was due to organic growth.
The financial review is provided as a supplement to, and should be read in conjunction with the Consolidated Financial Statements and the related Notes included elsewhere in this report.
The financial review is provided as a supplement to, and should be read in conjunction with the Consolidated Financial Statements and the related Notes included elsewhere in this report. 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.
In addition, available-for-sale securities purchases were $77.07 million during the year ended December 31, 2022, more than offset by available-for sale securities sales and maturities, principal payments and calls of $82.95 million. Investing activities was also impacted by net cash received from acquisitions of $13.40 million.
In addition, available-for-sale securities purchases were $28.13 million during the year ended December 31, 2023, more than offset by available-for sale securities sales and maturities, principal payments and calls of $66.72 million.
Management will continue to monitor events that could influence this conclusion in the future. See Note 2 and 7 to the Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data” for further information. The Company's accounting policies and discussion of recent accounting pronouncements is included in Note 1 to the Consolidated Financial Statements in "Item 8.
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. See Note 7 to the Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data” for further information.
Net cash provided by the Company’s financing activities was $101.59 million for the year ended December 31, 2023 compared to $153.51 million for the year ended December 31, 2022. Net cash provided by financing activities for the year ended December 31, 2023 was driven by borrowings of $106.34 million utilized to fund continued loan growth.
Net cash provided by financing activities for the year ended December 31, 2024 was driven by an increase in deposits of $46.03 million, largely offset by a decrease in borrowings of $34.81 million. Net cash provided by financing activities for the year ended December 31, 2023 was largely impacted by borrowings of $106.34 million utilized to fund continued loan growth.
In the transaction, Eagle acquired nine retail bank branches and two loan production offices in Montana. 26 Table of Contents 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.
The rate decreased to 4.50% during the year ended December 31, 2024. 22 Table of Contents 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.
The following table reflects our classified assets: December 31, 2023 Special Pass Mention Substandard Doubtful Total (In Thousands) Real estate loans: Residential 1-4 family $ 155,235 $ 1,168 $ 175 $ - $ 156,578 Residential 1-4 family construction 42,677 - 757 - 43,434 Commercial real estate 600,492 7,860 339 - 608,691 Commercial construction and development 156,056 2,076 - - 158,132 Farmland 140,848 - 1,742 - 142,590 Other loans: Home equity 86,735 - 197 - 86,932 Consumer 30,038 18 69 - 30,125 Commercial 129,644 3,006 59 - 132,709 Agricultural 123,542 - 1,756 - 125,298 Total loans 1,465,267 14,128 5,094 - 1,484,489 Real estate owned/repossessed property, net 5 $ 1,484,494 December 31, 2022 Special Mention Substandard Doubtful Loss Total (In Thousands) Real estate loans: Residential 1-4 family $ 515 $ 353 $ - $ - $ 868 Residential 1-4 family construction - - - - - Commercial real estate 16,833 1,732 - - 18,565 Commercial construction and development 1,044 - - - 1,044 Farmland 2,232 2,456 - - 4,688 Other loans: Home equity - 124 - - 124 Consumer 10 39 - - 49 Commercial 1,476 736 8 - 2,220 Agricultural 311 2,182 102 - 2,595 Total loans 22,421 7,622 110 - 30,153 Real estate owned/repossessed property, net - $ 30,153 33 Table of Contents Allowance for Credit Losses .
The following table reflects our classified assets: December 31, 2024 Special Pass Mention Substandard Doubtful Total (In Thousands) Real estate loans: Residential 1-4 family $ 152,522 $ 623 $ 576 $ - $ 153,721 Residential 1-4 family construction 44,740 - 961 - 45,701 Commercial real estate 641,858 260 3,844 - 645,962 Commercial construction and development 122,806 - 1,405 - 124,211 Farmland 144,720 1,580 310 - 146,610 Other loans: Home equity 97,026 115 402 - 97,543 Consumer 28,381 8 124 - 28,513 Commercial 141,992 592 1,455 - 144,039 Agricultural 131,165 2,618 563 - 134,346 Total loans 1,505,099 5,907 9,640 - 1,520,646 Real estate owned/repossessed property, net 45 $ 1,520,691 December 31, 2023 Special Pass Mention Substandard Doubtful Total (In Thousands) Real estate loans: Residential 1-4 family $ 155,235 $ 1,168 $ 175 $ - $ 156,578 Residential 1-4 family construction 42,677 - 757 - 43,434 Commercial real estate 600,492 7,860 339 - 608,691 Commercial construction and development 156,056 2,076 - - 158,132 Farmland 140,848 - 1,742 - 142,590 Other loans: Home equity 86,735 - 197 - 86,932 Consumer 30,038 18 69 - 30,125 Commercial 129,644 3,006 59 - 132,709 Agricultural 123,542 - 1,756 - 125,298 Total loans 1,465,267 14,128 5,094 - 1,484,489 Real estate owned/repossessed property, net 5 $ 1,484,494 Allowance for Credit Losses .

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