HELENA, Mont., July 28, 2014 (GLOBE NEWSWIRE) -- Eagle Bancorp Montana, Inc. (Nasdaq:EBMT), (the "Company," "Eagle"), the holding company of American Federal Savings Bank, today reported it earned $862,000, or $0.21 per diluted share, in its fourth fiscal quarter ended June 30, 2014, compared to $108,000, or $0.03 per diluted share in the preceding quarter and $684,000, or $0.17 per diluted share, in the fourth quarter a year ago. For all of fiscal 2014, Eagle's net income was $2.1 million, or $0.53 per diluted share, compared to $2.0 million, or $0.50 per diluted share, in fiscal 2013.
"Our 2014 operating results reflect our strong asset quality, improving net interest income and growing asset base," said Peter J. Johnson, President and CEO. "The steady economy in Montana has increased loan demand from local business customers, and demand for mortgage loans continues to be strong across most markets in the state."
The Company also announced its board of directors has increased its regular quarterly cash dividend to $0.075 per share from $0.0725 per share. The dividend will be payable September 5, 2014 to shareholders of record August 15, 2014.
Fourth Quarter Fiscal 2014 Highlights
- Net income was $862,000, or $0.21 per diluted share.
- Fourth quarter net interest margin was 3.32% compared to 3.29% three months earlier.
- Total loans increased 5.9% to $276.1 million at June 30, 2014, compared to $260.8 million three months earlier and increased 27.4% compared to $216.7 million a year earlier.
- Commercial loans increased 58.0%, compared to a year ago, to $34.4 million.
- Total deposits increased 2.2% to $427.1 million compared to $417.8 million a year earlier.
- Nonperforming assets remain at a low level and totaled only $980,000, or 0.18% of total assets at June 30, 2014, compared to $1.01 million, or 0.21% of total assets three months earlier and $1.3 million, or 0.26% of total assets a year ago.
- Nonperforming loans (NPLs) decreased 15.6% to $522,000 at June 30, 2014, compared to $618,000 three months earlier and decreased 32.5% compared to $773,000 a year ago.
- Capital ratios remain strong with a Tier 1 leverage ratio of 9.60% at June 30, 2014.
- Declared a regular quarterly cash dividend of $0.075 per share.
Balance Sheet Results
Total assets increased 5.6% to $539.1 million at June 30, 2014, compared to $510.5 million a year earlier.
"Loan activity has seen a steady increase these past few quarters, particularly during the fourth quarter where we saw every loan category increase compared to a year ago," said Johnson. "The majority of the increase continues to be in commercial real estate, commercial loans and residential loans, which are loan categories that we continue to focus on." Total loans increased 5.9% to $276.1 million at June 30, 2014, compared to $260.8 million three months earlier and increased 27.4% compared to $216.7 million a year earlier.
"The residential mortgage business is robust and continues to be a profitable market for Eagle," added Johnson. "During the fourth quarter we originated $53.7 million in new residential mortgages, excluding construction loans, and sold $42.4 million in residential mortgages. This compares to residential mortgage originations of $34.9 million in the preceding quarter with sales of $34.0 million. Our gross margin on sale of mortgage loans was approximately 2.6% for all of fiscal 2014 and 2.9% for the fourth quarter."
Commercial real estate loans increased 23.7% to $92.0 million at June 30, 2014, compared to $74.4 million a year earlier, while residential mortgage loans increased 31.0% to $92.3 million compared to $70.5 million a year earlier. Commercial loans increased 58.0% to $34.4 million and home equity loans increased 6.2% to $37.9 million, compared to a year ago.
Eagle's total deposits increased 2.2% to $427.1 million at June 30, 2014, compared to $417.8 million a year earlier, but were down compared to $438.8 million at March 31, 2014. Checking and money market accounts represent 50.2%, savings accounts represent 14.2%, and CDs comprise 35.6% of the total deposit portfolio at June 30, 2014.
Shareholders' equity was $51.7 million at June 30, 2014, compared to $49.2 million a year ago. Tangible book value was $11.22 per share at June 30, 2014, an increase compared to $10.62 per share at June 30, 2013. The year-over-year increase was attributable principally to increases in the fair value of the investment portfolio that were caused by lower interest rates.
Credit Quality
Eagle's fourth quarter provision for loan losses was $168,000, compared to $128,000 in the preceding quarter and $140,000 in the fourth quarter a year ago. As of June 30, 2014, the allowance for loan losses represented 407.1% of nonperforming loans compared to 351.9% three months earlier and 258.7% a year earlier.
Net charge-offs were $218,000 in the fourth quarter compared to $73,000 in the preceding quarter and $40,000 in the fourth quarter a year ago. The allowance for loan losses was $2.1 million, or 0.79% of total loans at June 30, 2014, compared to $2.2 million, or 0.83% of total loans at March 31, 2014, and $2.0 million, or 0.92% of total loans a year ago.
Nonperforming loans (NPLs) decreased 15.6% to $522,000 at June 30, 2014, compared to $618,000 three months earlier, and decreased 32.5% compared to $773,000 a year ago. The decrease compared to the prior quarter end was principally due to charged off loans.
OREO and other repossessed assets remained unchanged at $458,000 at June 30, 2014 compared to three months earlier and decreased 16.7% compared to $550,000 a year earlier.
Nonperforming assets (NPAs), consisting of nonperforming loans, OREO and other repossessed assets, loans delinquent 90 days or more, and restructured loans, decreased 8.9% to $980,000 at June 30, 2014, compared to $1.1 million three months earlier, and decreased 25.9% when compared to $1.3 million a year ago.
Operating Results
Eagle's revenues (net interest income before the provision for loan losses, plus non-interest income) were $6.4 million in the fourth quarter, compared to $5.9 million in the preceding quarter and $7.0 million in the fourth quarter a year ago. In fiscal 2014, Eagle's revenues increased 10.5% to $25.3 million compared to $22.9 million in fiscal 2013. Net interest income before the provision for loan loss increased 4.7% to $4.00 million in the fourth quarter of fiscal 2014, compared to $3.8 million in the preceding quarter and increased 17.4% compared to $3.4 million in the fourth quarter a year ago. In fiscal 2014, net interest income increased 21.4% to $15.2 million compared to $12.6 million in fiscal 2013.
"Our net interest margin improved three basis points to 3.32% in the fourth quarter of fiscal 2014 compared to the preceding quarter and increased 39 basis points from the fourth quarter a year ago," said Johnson. The increase is in part due to the shift in our balance sheet from investments to loans." Funding costs for the fourth quarter of fiscal 2014 were unchanged while asset yields increased three basis points compared to the preceding quarter. The investment securities portfolio decreased to $189.6 million at June 30, 2014 compared to $219.0 million a year ago, which increased average yields on earning asset balances moderately. For all of fiscal 2014, Eagle's net interest margin was 3.27% compared to 3.23% in fiscal 2013.
Noninterest income increased to $2.4 million in the fourth quarter of fiscal year 2014 compared to $2.1 million in the preceding quarter but was down compared to $3.6 million in the fourth quarter a year ago. For the year, noninterest income was $10.0 million compared to $10.3 million in fiscal year 2013.
Eagle's fourth quarter net gain on the sale of loans was $1.2 million, compared to $836,000 in the preceding quarter and $1.9 million in the fourth quarter a year ago. "Our gain on sale of loans was down 37.9% compared to the fourth quarter a year ago when mortgage refinance activity was near its peak," said Johnson. "Montana's housing market continues to improve, and demand for residential mortgages remains healthy. While mortgage refinance activity is down, new home purchase activity has been active. We anticipate steady to improving markets for residential lending in most of our markets into 2015."
In the fourth quarter of fiscal 2014, noninterest expenses increased slightly to $5.7 million, compared to $5.7 million in the preceding quarter but were down 7.2% compared to $6.2 million in the fourth quarter a year ago. For the year, noninterest expense was $22.9 million compared to $20.9 million a year earlier.
Capital Management
Eagle Bancorp Montana continues to meet the well capitalized thresholds for regulatory purposes with a Tier 1 leverage ratio of 9.60% at June 30, 2014.
About the Company
Eagle Bancorp Montana, Inc. is a savings and loan holding company headquartered in Helena, Montana and is the holding company of American Federal Savings Bank, a community bank established in 1922 that serves consumers and small businesses in Southern Montana through 13 banking offices. Additional information is available on the bank's website at www.americanfederalsavingsbank.com. The shares of Eagle Bancorp Montana, Inc. are traded on the NASDAQ Global Select Market under the symbol "EBMT."
Forward Looking Statements
This release may contain certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and may be identified by the use of such words as "believe," "expect," "anticipate," "should," "planned," "estimated," and "potential." These forward-looking statements include, but are not limited to statements of our goals, intentions and expectations; statements regarding our business plans, prospects, growth and operating strategies; statements regarding the asset quality of our loan and investment portfolios; and estimates of our risks and future costs and benefits. These forward-looking statements are based on current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. These factors include, but are not limited to, changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements; general economic conditions, either nationally or in our market areas, that are worse than expected; competition among depository and other financial institutions; loan demand or residential and commercial real estate values in Montana; inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments; adverse changes in the securities markets; and other economic, governmental, competitive, regulatory and technological factors that may affect our operations. Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. All information set forth in this press release is current as of the date of this release and the company undertakes no duty or obligation to update this information.
| Balance Sheet | |||
| (Dollars in thousands, except per share data) | (Unaudited) | (Unaudited) | (Audited) |
| June 30, | March 31, | June 30, | |
| 2014 | 2014 | 2013 | |
| Assets: | |||
| Cash and due from banks | $ 6,208 | $ 6,278 | $ 3,776 |
| Interest-bearing deposits with banks | 611 | 3,013 | 2,385 |
| Federal funds sold | -- | -- | -- |
| Total cash and cash equivalents | 6,819 | 9,291 | 6,161 |
| Securities available-for-sale, at market value | 189,553 | 191,280 | 218,963 |
| FHLB stock, at cost | 1,878 | 1,878 | 1,931 |
| Investment in Eagle Bancorp Statutory Trust I | 155 | 155 | 155 |
| Loans held-for-sale | 17,245 | 9,405 | 20,807 |
| Loans: | |||
| Residential mortgage (1-4 family) | 92,321 | 88,507 | 70,453 |
| Commercial loans | 34,412 | 29,477 | 21,775 |
| Commercial real estate | 92,043 | 89,896 | 74,395 |
| Construction loans | 6,923 | 5,050 | 2,738 |
| Consumer loans | 12,964 | 12,299 | 11,773 |
| Home equity | 37,866 | 35,952 | 35,660 |
| Unearned loan fees | (413) | (414) | (117) |
| Total loans | 276,116 | 260,767 | 216,677 |
| Allowance for loan losses | (2,125) | (2,175) | (2,000) |
| Net loans | 273,991 | 258,592 | 214,677 |
| Accrued interest and dividends receivable | 2,429 | 2,219 | 2,387 |
| Mortgage servicing rights, net | 3,756 | 3,602 | 3,192 |
| Premises and equipment, net | 20,101 | 19,655 | 18,943 |
| Cash surrender value of life insurance | 11,082 | 11,004 | 10,869 |
| Real estate and other assets acquired in settlement of loans, net of allowance for losses | 458 | 458 | 550 |
| Goodwill | 7,034 | 7,034 | 6,890 |
| Core deposit intangible | 745 | 788 | 922 |
| Other assets | 3,862 | 4,470 | 4,087 |
| Total assets | $ 539,108 | $ 519,831 | $ 510,534 |
| Liabilities: | |||
| Deposit accounts: | |||
| Noninterest bearing | 58,432 | 59,889 | 52,972 |
| Interest bearing | 368,613 | 378,913 | 364,779 |
| Total deposits | 427,045 | 438,802 | 417,751 |
| Accrued expense and other liabilities | 3,749 | 3,164 | 3,535 |
| Federal funds purchased | -- | -- | -- |
| FHLB advances and other borrowings | 51,454 | 23,211 | 34,861 |
| Subordinated debentures | 5,155 | 5,155 | 5,155 |
| Total liabilities | 487,403 | 470,332 | 461,302 |
| 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; 3,916,233; 3,918,399; 3,898,685 outstanding at June 30, 2014, March 31, 2014 and June 30, 2013, respectively) | 41 | 41 | 41 |
| Additional paid-in capital | 22,123 | 22,120 | 22,109 |
| Unallocated common stock held by employee stock ownership plan (ESOP) | (1,224) | (1,265) | (1,390) |
| Treasury stock, at cost (166,894 shares at June 30, 2014 164,728 shares at March 31, 2014 and 184,442 shares at June 30, 2013) | (1,800) | (1,800) | (1,993) |
| Retained earnings | 34,824 | 34,246 | 33,849 |
| Accumulated other comprehensive (loss) gain | (2,259) | (3,843) | (3,384) |
| Total shareholders' equity | 51,705 | 49,499 | 49,232 |
| Total liabilities and shareholders' equity | $ 539,108 | $ 519,831 | $ 510,534 |
| Income Statement | (Unaudited) | (Unaudited) | |||
| (Dollars in thousands, except per share data) | Three Months Ended | Twelve Months Ended | |||
| June 30, | March 31, | June 30, | June 30, | June 30, | |
| 2014 | 2014 | 2013 | 2014 | 2013 | |
| Interest and dividend Income: | |||||
| Interest and fees on loans | $ 3,379 | $ 3,254 | $ 2,884 | $ 12,985 | $ 11,200 |
| Securities available-for-sale | 1,117 | 1,066 | 1,077 | 4,285 | 3,568 |
| Interest on deposits with banks | 3 | 1 | 1 | 8 | 27 |
| Total interest and dividend income | 4,499 | 4,321 | 3,962 | 17,278 | 14,795 |
| Interest Expense: | |||||
| Interest expense on deposits | 332 | 329 | 312 | 1,294 | 1,198 |
| Advances and other borrowings | 147 | 152 | 224 | 664 | 956 |
| Subordinated debentures | 21 | 21 | 21 | 84 | 90 |
| Total interest expense | 500 | 502 | 557 | 2,042 | 2,244 |
| Net interest income | 3,999 | 3,819 | 3,405 | 15,236 | 12,551 |
| Provision for loan losses | 168 | 128 | 140 | 608 | 678 |
| Net interest income after provision for loan losses | 3,831 | 3,691 | 3,265 | 14,628 | 11,873 |
| Noninterest income: | |||||
| Service charges on deposit accounts | 253 | 226 | 263 | 1,022 | 810 |
| Net gain on sale of loans | 1,196 | 836 | 1,925 | 4,586 | 5,417 |
| Mortgage loan servicing fees | 360 | 359 | 281 | 1,372 | 1,024 |
| Net gain on sale of available-for-sale securities | 41 | 196 | 484 | 1,073 | 1,261 |
| Net gain (loss) on sale of OREO | -- | -- | 6 | (50) | (26) |
| Net (loss) gain on fair value hedge | (62) | (72) | 96 | (63) | 204 |
| Other income | 563 | 578 | 494 | 2,101 | 1,624 |
| Total noninterest income | 2,351 | 2,123 | 3,549 | 10,041 | 10,314 |
| Noninterest expense: | |||||
| Salaries and employee benefits | 3,183 | 3,209 | 3,579 | 12,822 | 10,344 |
| Occupancy and equipment expense | 688 | 711 | 700 | 2,774 | 2,242 |
| Data processing | 481 | 458 | 474 | 1,870 | 1,326 |
| Advertising | 148 | 211 | 249 | 816 | 946 |
| Amortization of mortgage servicing fees | 164 | 132 | 186 | 630 | 752 |
| Amortization of core deposit intangible and tax credits | 105 | 105 | 167 | 427 | 360 |
| Federal insurance premiums | 19 | 84 | 90 | 271 | 264 |
| Postage | 43 | 40 | 39 | 175 | 138 |
| Legal, accounting and examination fees | 175 | 111 | 103 | 555 | 439 |
| Consulting fees | 218 | 164 | 58 | 537 | 133 |
| Acquisition costs | -- | -- | -- | -- | 1,920 |
| Provision for valuation loss on OREO | 10 | -- | 1 | 10 | 192 |
| Other expense | 509 | 474 | 544 | 2,021 | 1,808 |
| Total noninterest expense | 5,743 | 5,699 | 6,190 | 22,908 | 20,864 |
| Income before provision for income taxes | 439 | 115 | 624 | 1,761 | 1,323 |
| (Benefit) provision for income taxes | (423) | 7 | (60) | (350) | (650) |
| Net income | $ 862 | $ 108 | $ 684 | $ 2,111 | $ 1,973 |
| Basic earnings per share | $ 0.22 | $ 0.03 | $ 0.18 | $ 0.54 | $ 0.51 |
| Diluted earnings per share | $ 0.21 | $ 0.03 | $ 0.17 | $ 0.53 | $ 0.50 |
| Weighted average shares outstanding (basic EPS) | 3,916,233 | 3,918,399 | 3,898,685 | 3,910,320 | 3,892,042 |
| Weighted average shares outstanding (diluted EPS) | 3,971,036 | 3,973,202 | 3,977,542 | 3,974,316 | 3,977,561 |
| Financial Ratios and Other Data | ||||
| (Dollars in thousands, except per share data) | ||||
| (Unaudited) | June 30, | March 31, | December 31, | June 30, |
| 2014 | 2014 | 2013 | 2013 | |
| Asset Quality: | ||||
| Nonaccrual loans | $ 342 | $ 404 | $ 778 | $ 470 |
| Loans 90 days past due | -- | -- | -- | -- |
| Restructured loans, net | 180 | 214 | 214 | 303 |
| Total nonperforming loans | 522 | 618 | 992 | 773 |
| Other real estate owned and other repossessed assets, net | 458 | 458 | 419 | 550 |
| Total nonperforming assets | $ 980 | $ 1,076 | $ 1,411 | $ 1,323 |
| Nonperforming loans / portfolio loans | 0.19% | 0.24% | 0.40% | 0.36% |
| Nonperforming assets / assets | 0.18% | 0.21% | 0.27% | 0.26% |
| Allowance for loan losses / portfolio loans | 0.79% | 0.83% | 0.85% | 0.92% |
| Allowance / nonperforming loans | 407.09% | 351.94% | 213.71% | 258.73% |
| Gross loan charge-offs for the quarter | $ 236 | $ 74 | $ 24 | $ 42 |
| Gross loan recoveries for the quarter | $ 18 | $ 1 | $ 1 | $ 2 |
| Net loan charge-offs for the quarter | $ 218 | $ 73 | $ 23 | $ 40 |
| Capital Data (At quarter end): | ||||
| Tangible book value per share | $ 11.22 | $ 10.64 | $ 10.17 | $ 10.62 |
| Shares outstanding | 3,916,233 | 3,918,399 | 3,918,399 | 3,898,685 |
| Profitability Ratios (For the quarter): | ||||
| Efficiency ratio * | 88.79% | 93.39% | 87.13% | 85.97% |
| Return on average assets | 0.65% | 0.08% | 0.37% | 0.53% |
| Return on average equity | 6.81% | 0.88% | 3.87% | 5.14% |
| Net interest margin | 3.32% | 3.29% | 3.32% | 2.93% |
| Profitability Ratios (Year-to-date): | ||||
| Efficiency ratio * | 88.94% | 88.31% | 85.98% | 88.95% |
| Return on average assets | 0.41% | 0.33% | 0.45% | 0.46% |
| Return on average equity | 4.30% | 3.42% | 4.71% | 3.67% |
| Net interest margin | 3.27% | 3.25% | 3.23% | 3.23% |
| Other Information | ||||
| Average total assets for the quarter | $ 528,435 | $ 512,395 | $ 509,767 | $ 515,195 |
| Average total assets year to date | $ 515,472 | $ 511,001 | $ 510,294 | $ 432,065 |
| Average earning assets for the quarter | $ 481,715 | $ 464,796 | $ 458,480 | $ 465,599 |
| Average earning assets year to date | $ 466,057 | $ 460,691 | $ 458,615 | $ 389,087 |
| Average loans for the quarter ** | $ 281,557 | $ 262,579 | $ 254,597 | $ 231,828 |
| Average loans year to date ** | $ 260,825 | $ 253,914 | $ 249,582 | $ 208,638 |
| Average equity for the quarter | $ 50,627 | $ 49,018 | $ 49,021 | $ 53,188 |
| Average equity year to date | $ 49,136 | $ 48,651 | $ 48,434 | $ 53,786 |
| Average deposits for the quarter | $ 432,033 | $ 433,140 | $ 426,745 | $ 414,469 |
| Average deposits year to date | $ 428,676 | $ 427,395 | $ 424,522 | $ 334,133 |
| * The efficiency ratio is a non-GAAP ratio that is calculated by dividing non-interest expense, exclusive of intangible asset amortization, by the sum of net interest income and non-interest income. | ||||
| ** includes loans held for sale | ||||