World News: 17:00 GMT Friday 21st April 2017. [Eagle Bancorp Montana, Inc. via Globe Newswire via SPi World News]
HELENA, Mont., April 21, 2017 (GLOBE NEWSWIRE) -- Eagle Bancorp Montana, Inc. (NASDAQ:EBMT), (the “Company,” “Eagle”), the holding company of Opportunity Bank of Montana, today reported first quarter net income increased 17.9% to $763,000, or $0.20 per diluted share, compared to $647,000, or $0.17 per diluted share, in the first quarter a year ago. In the preceding quarter, Eagle earned $1.4 million, or $0.37 per diluted share.
Eagle’s board of directors declared a regular quarterly cash dividend of $0.08 per share. The dividend will be payable June 2, 2017 to shareholders of record May 12, 2017. The current annualized yield is 1.77% at recent market prices.
“We started the year with another quarter of consistent profitability, supported by a stable net interest margin, strong loan and deposit growth, while maintaining asset quality,” said Peter J. Johnson, President and CEO. “Western Montana continues to benefit from a strong economy, and we are well positioned to grow the profitability of the bank and claim additional market share in our markets.”
“Loan demand remains robust, particularly in the commercial real estate and C&I loan segments. Our local economies are strong, and we expect the loan pipeline to continue to expand at this pace in the near future,” said Johnson. Total loans increased 4.9% to $488.9 million at March 31, 2017, compared to $466.2 million three months earlier and increased 15.6% compared to $422.9 million a year earlier.
Eagle originated $51.7 million in new residential mortgages during the quarter, excluding construction loans, and sold $56.6 million in residential mortgages, with an average gross margin on sale of mortgage loans of approximately 3.26%. This production compares to residential mortgage originations of $96.5 million in the preceding quarter with sales of $90.6 million.
Commercial real estate loans increased 20.6% to $234.5 million at March 31, 2017, compared to $194.5 million a year earlier, while residential mortgage loans decreased modestly to $112.9 million compared to $113.4 million a year earlier. Commercial loans increased 34.5% to $54.6 million, home equity loans increased 8.0% to $49.0 million and construction loans increased 53.9% to $24.1 million, compared to a year ago.
Total deposits increased 6.5% to $526.3 million at March 31, 2017, compared to $494.4 million a year earlier and increased 2.6% compared to $512.8 million at December 31, 2016. As of quarter-end, checking and money market accounts represent 53.8%, savings accounts represent 16.1%, and CDs comprise 30.1% of the total deposit portfolio.
Eagle’s total assets increased 6.3% to $683.7 million at March 31, 2017, compared to $643.0 million a year earlier and increased 1.4% compared to $673.9 million three months earlier. Shareholders’ equity increased modestly to $60.0 million at March 31, 2017, compared to $59.5 million three months earlier and increased 6.2% compared to $56.5 million one year earlier. Tangible book value was $13.81 per share at March 31, 2017, compared to $13.65 per share at December 31, 2016, and $12.97 per share a year earlier.
“The net interest margin remained unchanged from the preceding quarter, but increased significantly compared to the year ago quarter, largely due to the growth in interest earning assets over the past few months,” Johnson said. Eagle’s net interest margin was 3.61% in the first quarter, which was unchanged compared to the preceding quarter, and increased 26 basis points compared to 3.35% in the first quarter a year ago. Funding costs for the first quarter were up six basis points while asset yields were up 32 basis points compared to a year ago. The investment securities portfolio decreased to $127.2 million at March 31, 2017, compared to $145.1 million a year ago, which had a positive impact on the average yields on earning assets.
Eagle’s first quarter revenues increased 11.9% to $8.7 million compared to $7.8 million in the first quarter a year ago, but decreased compared to $10.2 million in the preceding quarter. Net interest income before the provision for loan loss increased 12.6% to $5.5 million in the first quarter compared to $4.9 million in the first quarter one year ago, and decreased modestly compared to $5.6 million in the preceding quarter.
Noninterest income increased 10.8% to $3.2 million in the first quarter, compared to $2.9 million in the first quarter a year ago, but decreased compared to $4.6 million in the preceding quarter. The net gain on sale of mortgage loans totaled $1.8 million in the first quarter, compared to $3.0 million in the preceding quarter and $1.7 million in the first quarter a year ago.
First quarter noninterest expenses were $7.4 million, compared to $7.6 million in the preceding quarter and $6.5 million in the year ago quarter. Higher compensation expenses contributed to the year-over-year increase.
Eagle’s first quarter provision for loan losses was $301,000, compared to $452,000 in the preceding quarter and $450,000 in the first quarter a year ago. The allowance for loan losses represented 300.1% of nonperforming loans at March 31, 2017, compared to 414.1% three months earlier and 168.7% a year earlier. Nonperforming loans (NPLs) were $1.7 million at the end of the first quarter, which was up compared to $1.2 million three months earlier, and down 27.6% compared to $2.3 million a year earlier.
Net loan recoveries were $4,000 in the first quarter, compared to net charge offs of $332,000 in the preceding quarter and net charge-offs of $60,000 in the first quarter a year ago. The allowance for loan losses was $5.1 million, or 1.04% of total loans at March 31, 2017, compared to $4.8 million, or 1.02% of total loans at December 31, 2016, and $3.9 million, or 0.93% of total loans a year ago.
Eagle’s total OREO and other repossessed assets was $668,000 at March 31, 2017, compared to $825,000 at December 31, 2016. Nonperforming assets (NPAs), consisting of nonperforming loans, OREO and other repossessed assets, loans delinquent 90 days or more, and restructured loans, were $2.4 million at March 31, 2017 or 0.35% of total assets, compared to $2.0 million, or 0.29% of total assets three months earlier and $2.9 million, or 0.46% of total assets a year earlier.
Eagle Bancorp Montana continues to be well capitalized with the ratio of shareholders’ equity to tangible asset of 11.42% at March 31, 2017. (Shareholders’ equity, plus trust preferred securities, subordinated debt and senior debt, less goodwill and core deposit intangible to tangible assets).
On February 13, 2017, the Company completed the issuance of $10 million of senior unsecured debt. The net proceeds of $9.8 million was used as capital contribution to its bank subsidiary to support both organic growth and opportunistic acquisitions should appropriate opportunities arise.
Eagle Bancorp Montana, Inc. is a bank holding company headquartered in Helena, Montana and is the holding company of Opportunity Bank, a community bank established in 1922 that serves consumers and small businesses in Montana through 13 banking offices. Additional information is available on the bank’s website at . The shares of Eagle Bancorp Montana, Inc. are traded on the NASDAQ Global Select Market under the symbol “EBMT.”
Peter J. Johnson, President and CEO
Laura F. Clark, SVP and CFO
Globe Newswire: 17:00 GMT Friday 21st April 2017
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