HELENA, Montana, Oct. 25, 2011 (GLOBE NEWSWIRE) -- Eagle Bancorp Montana, Inc. (Nasdaq:EBMT), (the "Company," "Eagle"), the holding company of American Federal Savings Bank, today reported it earned $428,000, or $0.11 per diluted share, in the first fiscal quarter ended September 30, 2011, compared to $876,000, or $0.22 per diluted share, in the first quarter a year ago.
The Company also announced its board of directors has declared a regular quarterly cash dividend of $0.07125 per share, to be paid November 25 to shareholders of record on November 4, 2011.
"The first quarter provided further evidence of the progress we are making in implementing our strategies to strengthen our banking franchise," stated Pete Johnson, President and Chief Executive Officer. "We have improved our core business by continuing to change the composition of our deposit portfolio, growing non-interest bearing and other core deposit balances, while strengthening our balance sheet liquidity and capital base and effectively managing controllable operating expenses. We are in an excellent position for future growth and are exploring all growth opportunities in the markets that we serve."
First Quarter Fiscal 2011 Highlights
- Net income was $428,000 or $0.11 per diluted share.
- Net interest margin remained strong at 3.66%.
- Nonperforming assets were $6.5 million, or 1.94% of total assets.
- Nonperforming loans totaled $5.2 million, or 2.77% of total loans.
- Net loans increased 4.50% to $186.2 million at 9/30/11, compared to $178.2 million a year earlier.
- Commercial real estate loans increased 25.1% year-over-year to $65.9 million and now comprise 35.1% of the total loan portfolio.
- Total deposits increased 4.71% year-over-year to $213.6 million.
- Capital ratios remain strong with a Tier 1 leverage ratio of 16.54%.
- Declared regular quarterly cash dividend of $0.07125 per share.
Balance Sheet Results
"The loan growth during the quarter was modest, with most of the increase coming from the commercial real estate portfolio," said Johnson. Total loans increased 4.50% to $187.8 million at September 30, 2011 compared to $179.5 million a year earlier. Commercial real estate loans increased 25.1% to $65.9 million compared to $52.7 million a year earlier, while residential mortgage loans decreased 8.2% from the prior year to $68.7 million. Commercial loans increased 47.1% to $12.3 million and home equity loans decreased 4.94% to $27.7 million compared to a year ago.
Total assets were $335.9 million at September 30, 2011, compared to $330.8 million a year earlier. Total deposits increased 4.71% to $213.6 million at September 30, 2011 compared to $204.0 million a year earlier. Checking and money market accounts represent 43.6% of total deposits, savings accounts represent 17.5% of total deposits, and CDs make up 38.9% of the total deposit portfolio.
Shareholders' equity was $53.4 million at September 30, 2011, compared to $54.3 million a year ago and book value per share was $13.63 per share at September 30, 2011 compared to $13.29 per share a year earlier.
Credit Quality
"During the first quarter two loans totaling approximately $2.2 million were placed on nonaccrual status," said Clint Morrison, SVP and CFO. "While we are disappointed with the increase in total nonperforming loans we view these two loans as isolated incidents and are not reflective of the overall quality of the loan portfolio."
Nonperforming loans (NPLs) were $5.2 million, or 2.77% of total loans at September 30, 2011, compared to $2.9 million, or 1.57% of total loans, three months earlier, and $2.1 million, or 1.19% of total loans, a year ago. Other real estate owned (OREO) and other repossessed assets were $1.3 million at September 30, 2011 compared to $1.2 million three months earlier and $1.2 million at September 30, 2010.
Nonperforming assets (NPAs), consisting of nonperforming loans, OREO and other repossessed assets, and loans delinquent 90 days or more, totaled $6.5 million, or 1.94% of total assets, at September 30, 2011, compared to $4.1 million, or 1.24% of total assets in the preceding quarter, and $3.4 million, or 1.19% of total assets, a year ago.
The first quarter provision for loan losses was $258,000, and Eagle recorded net charge-offs of $508,000. The provision for loan losses was $155,000 in the preceding quarter and $283,000 in the first quarter a year ago. The allowance for loan losses now stands at $1.55 million, or 0.83% of total loans at June 30, 2011, compared to $1.80 million, or 0.96% of total loans at June 30, 2011, and $1.25 million, or 0.70% of total loans a year ago.
Operating Results
"The decrease in the net interest margin from the preceding quarter was primarily due to a higher balance of cash and liquid assets," said Morrison. "We are actively seeking growth and investment opportunities, as a way to deploy these low yielding assets." The net interest margin was 3.66% in the first quarter of fiscal 2012, compared to 3.71% in the preceding quarter and 3.59% in the first quarter a year ago. Funding costs for the first quarter of 2012 decreased four basis points compared to the previous quarter while asset yields decreased nine basis points compared to the previous quarter.
Net interest income before the provision for loan loss increased 3.80% to $2.8 million in the first quarter of fiscal 2012, compared to $2.7 million in the first quarter a year ago. Primarily due to the net loss of $330,000 Eagle sustained in a fair value hedge and decreased gain on sale of loans, noninterest income was $569,000 in the first quarter of 2012, compared to $1.4 million in the first quarter a year ago. "The net gain on sale of loans was $236,000 in the first quarter of fiscal 2012 compared to $827,000 in the first quarter a year ago, when mortgage loan activity was at a peak and we were successful at selling these loans in the secondary market," said Morrison. "As loan refinance activity has started to slow, the net gain on sale of loans has returned to more normalized levels."
Excluding the net loss on the fair value hedge, total noninterest income for the first quarter of fiscal 2012 would have been $899,000.
In the first quarter of fiscal 2012 noninterest expense was $2.5 million, compared to $2.7 million in the preceding quarter and $2.6 million in the first quarter a year ago.
Eagle's first quarter return on average equity (ROAE) was 3.22% compared to 6.52% for the first quarter a year ago. Return on average assets (ROAA) was 0.51% in the first quarter compared to 1.07% in the first quarter a year ago.
Capital Management
Eagle Bancorp Montana continues to meet the well capitalized thresholds for regulatory purposes with a Tier 1 leverage ratio of 16.54% at September 30, 2011.
About the Company
Eagle Bancorp Montana, Inc. is the stock holding company of American Federal Savings Bank. American Federal Savings Bank was formed in 1922 and is headquartered in Helena, Montana. It has additional branches in Butte, Bozeman and Townsend. Eagle Bancorp Montana, Inc. commenced operations on April 5, 2010 following the conversion of Eagle Financial MHC and the sale of Eagle Bancorp Montana, Inc. Eagle's common stock trades on the NASDAQ Global Market under the symbol "EBMT."
Forward Looking Statements –
This release may contain certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and may be identified by the use of such words as "believe," "expect," "anticipate," "should," "planned," "estimated," and "potential." These forward-looking statements include, but are not limited to statements of our goals, intentions and expectations; statements regarding our business plans, prospects, growth and operating strategies; statements regarding the asset quality of our loan and investment portfolios; and estimates of our risks and future costs and benefits. These forward-looking statements are based on current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. These factors include, but are not limited to, changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements; general economic conditions, either nationally or in our market areas, that are worse than expected; competition among depository and other financial institutions; loan demand or residential and commercial real estate values in Montana; inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments; adverse changes in the securities markets; and other economic, governmental, competitive, regulatory and technological factors that may affect our operations. Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements.
Balance Sheet | |||
(Dollars in thousands, except per share data) | (Unaudited) | (audited) | (Unaudited) |
September 30, | June 30, | September 30, | |
2011 | 2011 | 2010 | |
Assets: | |||
Cash and due from banks | $ 3,444 | $ 2,703 | $ 1,623 |
Interest-bearing deposits with banks | 2,159 | 1,837 | 985 |
Federal funds sold | 5,000 | 5,000 | -- |
Total cash and cash equivalents | 10,603 | 9,540 | 2,608 |
Securities available-for-sale, at market value | 102,888 | 102,700 | 110,792 |
FHLB stock, at cost | 2,003 | 2,003 | 2,003 |
Investment in Eagle Bancorp Statutory Trust I | 155 | 155 | 155 |
Loans held-for-sale | 3,160 | 1,784 | 8,347 |
Loans: | |||
Residential mortgage (1-4 family) | 68,680 | 70,003 | 74,829 |
Commercial loans | 12,343 | 10,564 | 8,389 |
Commercial real estate | 65,893 | 64,701 | 52,667 |
Construction loans | 4,277 | 5,020 | 4,922 |
Consumer loans | 9,057 | 9,343 | 9,575 |
Home equity | 27,694 | 27,816 | 29,132 |
Unearned loan fees | (157) | (176) | (58) |
Total loans | 187,787 | 187,271 | 179,456 |
Allowance for loan losses | (1,550) | (1,800) | (1,250) |
Net loans | 186,237 | 185,471 | 178,206 |
Accrued interest and dividends receivable | 1,548 | 1,558 | 1,565 |
Mortgage servicing rights, net | 2,133 | 2,142 | 2,380 |
Premises and equipment, net | 16,017 | 16,151 | 15,726 |
Cash surrender value of life insurance | 8,955 | 6,900 | 6,745 |
Real estate and other assets acquired in settlement of loans, | |||
net of allowance for losses | 1,303 | 1,181 | 1,243 |
Other assets | 906 | 1,508 | 1,036 |
Total assets | $ 335,908 | $ 331,093 | $ 330,806 |
Liabilities: | |||
Deposit accounts: | |||
Noninterest bearing | 21,650 | 19,027 | 19,464 |
Interest bearing | 191,970 | 190,159 | 184,543 |
Total deposits | 213,620 | 209,186 | 204,007 |
Accrued expense and other liabilities | 4,889 | 3,371 | 4,367 |
Federal funds purchased | -- | -- | 1,055 |
FHLB advances and other borrowings | 58,846 | 60,896 | 61,972 |
Subordinated debentures | 5,155 | 5,155 | 5,155 |
Total liabilities | 282,510 | 278,608 | 276,556 |
Shareholders' Equity: | |||
Preferred stock (no par value, 1,000,000 shares authorized, | |||
none issued or outstanding) | -- | -- | -- |
Common stock (par value $0.01; 8,000,000 shares authorized; | |||
4,083,127 shares issued; 3,901,487; 3,918,687; and 4,083,127 outstanding | |||
at September 30, 2011, June 30, 2011 and September 30, 2010, respectively | 41 | 41 | 41 |
Additional paid-in capital | 22,112 | 22,110 | 22,102 |
Unallocated common stock held by employee stock ownership plan (ESOP) | (1,681) | (1,722) | (1,848) |
Treasury stock, at cost | |||
(181,640, 164,440, and 0 shares | |||
at September 30, 2011, June 30, 2011, and September 30, 2010, respectively) | (1,981) | (1,796) | -- |
Retained earnings | 32,068 | 31,918 | 31,242 |
Accumulated other comprehensive gain | 2,839 | 1,934 | 2,713 |
Total shareholders' equity | 53,398 | 52,485 | 54,250 |
Total liabilities and shareholders' equity | $ 335,908 | $ 331,093 | 330,806 |
Income Statement | (Unaudited) | ||
(Dollars in thousands, except per share data) | Three Months Ended | ||
September 30 | June 30 | September 30 | |
2011 | 2011 | 2010 | |
Interest and dividend Income: | |||
Interest and fees on loans | $ 2,775 | $ 2,785 | $ 2,805 |
Securities available-for-sale | 872 | 899 | 963 |
Interest on deposits with banks | 6 | 6 | 4 |
Total interest and dividend income | 3,653 | 3,690 | 3,772 |
Interest Expense: | |||
Interest expense on deposits | 289 | 302 | 403 |
Advances and other borrowings | 583 | 593 | 636 |
Subordinated debentures | 22 | 22 | 75 |
Total interest expense | 894 | 917 | 1,114 |
Net interest income | 2,759 | 2,773 | 2,658 |
Provision for loan losses | 258 | 155 | 283 |
Net interest income after provision for loan losses | 2,501 | 2,618 | 2,375 |
Noninterest income: | |||
Service charges on deposit accounts | 190 | 180 | 201 |
Net gain on sale of loans | 236 | 225 | 827 |
Mortgage loan servicing fees | 228 | 227 | 209 |
Net gain on sale of available-for-sale securities | 57 | 19 | -- |
Net gain (loss) on fair value hedge -FASB ASC 815 | (330) | (39) | 15 |
Net gain (loss) on sale of OREO | -- | -- | -- |
Other income | 188 | 174 | 183 |
Total noninterest income | 569 | 786 | 1,435 |
Noninterest expense: | |||
Salaries and employee benefits | 1,167 | 1,208 | 1,161 |
Occupancy and equipment expense | 343 | 341 | 326 |
Data processing | 151 | 110 | 109 |
Advertising | 131 | 150 | 124 |
Amortization of mortgage servicing fees | 93 | 125 | 259 |
Federal insurance premiums | 30 | 64 | 63 |
Postage | 25 | 27 | 32 |
Legal, accounting and examination fees | 72 | 87 | 97 |
Consulting fees | 87 | 86 | 27 |
Provision for OREO valuation losses | -- | 140 | -- |
Other | 356 | 375 | 367 |
Total noninterest expense | 2,455 | 2,713 | 2,565 |
Income before provision for income taxes | 615 | 691 | 1,245 |
Provision for income taxes | 187 | 209 | 369 |
Net income | $ 428 | $ 482 | $ 876 |
Basic earnings per share | $ 0.11 | $ 0.12 | $ 0.22 |
Diluted Earnings per share | $ 0.11 | $ 0.12 | $ 0.22 |
Weighted average shares | |||
outstanding (basic EPS) | 3,739,610 | 3,869,139 | 3,895,598 |
Weighted average shares | |||
outstanding (diluted EPS) | 3,912,326 | 3,908,187 | 3,895,598 |
Financial Ratios and Other Data | ||||
(Dollars in thousands, except per share data) | ||||
(Unaudited) | September 30, | June 30, | September 30, | |
2011 | 2011 | 2010 | ||
Asset Quality: | ||||
Nonaccrual loans | $ 5,074 | $ 2,939 | $ 1,915 | |
Loans 90 days past due and accruing | -- | -- | -- | |
Restructured loans | 131 | -- | -- | |
Total nonperforming loans | 5,205 | 2,939 | 1,915 | |
Other real estate owned and other repossed assets, net | 1,303 | 1,181 | 1,243 | |
Total nonperforming assets | $ 6,508 | $ 4,120 | $ 3,158 | |
Nonperforming loans / portfolio loans | 2.77% | 1.57% | 1.07% | |
Nonperforming assets / assets | 1.94% | 1.24% | 0.95% | |
Allowance for loan losses / portfolio loans | 0.83% | 0.96% | 0.70% | |
Allowance / nonperforming loans | 29.78% | 61.25% | 65.27% | |
Gross loan charge-offs for the quarter | $ 510 | $ 9 | $ 133 | |
Gross loan recoveries for the quarter | $ 2 | $ 3 | $ -- | |
Net loan charge-offs for the quarter | $ 508 | $ 6 | $ 133 | |
Capital Data (At quarter end): | ||||
Book value per share | $ 13.63 | $ 13.39 | $ 13.29 | |
Shares outstanding | 3,901,487 | 3,918,687 | 4,083,127 | |
Profitability Ratios (For the quarter): | ||||
Efficiency ratio* | 70.75% | 73.26% | 67.32% | |
Return on average assets | 0.51% | 0.58% | 1.07% | |
Return on average equity | 3.22% | 3.81% | 6.52% | |
Net interest margin | 3.66% | 3.71% | 3.59% | |
Profitability Ratios (Year-to-date): | ||||
Efficiency ratio * | 70.75% | 68.98% | 67.32% | |
Return on average assets | 0.51% | 0.73% | 1.07% | |
Return on average equity | 3.22% | 4.50% | 6.52% | |
Net interest margin | 3.66% | 3.62% | 3.59% | |
* The efficiency ratio is a non-GAAP ratio that is calculated by dividing non-interest expense, exclusive of intangible asset amortization, by the sum of net interest income and non-interest income. |