ebmt20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2024

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

For the transition period from _____ to _____.

Commission file number 1-34682

Eagle Bancorp Montana, Inc.

(Exact name of registrant as specified in its charter)

Delaware	27-1449820
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1400 Prospect Avenue, Helena, MT 59601

(Address of principal executive offices) (Zip code)

(406) 442-3080

(Registrant's telephone number, including area code)

Not Applicable

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:

Common stock, par value $0.01 per share

8,016,784 shares outstanding

As of July 31, 2024

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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PART I.	FINANCIAL INFORMATION	PAGE

Item 1.	Financial Statements (Unaudited)

	Condensed Consolidated Statements of Financial Condition as of June 30, 2024 and December 31, 2023	1

	Condensed Consolidated Statements of Income for the three months and six months ended June 30, 2024 and 2023	3

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months and six months ended June 30, 2024 and 2023	5

	Condensed Consolidated Statements of Changes in Shareholders' Equity for the three months and six months ended June 30, 2024 and 2023	6

	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023	7

	Notes to Condensed Consolidated Financial Statements (Unaudited)	9

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	25

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39

Item 4.	Controls and Procedures	39

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	41
Item 6.	Exhibits	41

Signatures		42

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

Cautionary Note Regarding Forward-Looking Statements

This report includes “forward-looking statements” within the meaning and protections of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as “may,” “will,” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “plan,” “project,” “could,” “intend,” “target” and other similar words and expressions of the future. These forward-looking statements include, but are not limited to:

●	statements of our goals, intentions and expectations;

●	statements regarding our business plans, prospects, growth and operating strategies;

●	statements regarding the asset quality of our loan and investment portfolios; and

●	estimates of our risks and future costs and benefits.

These forward-looking statements are based on current beliefs and expectations of the management of Eagle Bancorp Montana, Inc. (“Eagle” or the “Company”) and Opportunity Bank of Montana (“OBMT” or the “Bank”), Eagle’s wholly-owned subsidiary, and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.

The following factors, among others, could cause the Company’s actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

●

changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements;

	●	the emergence or continuation of widespread health emergencies or pandemics, including the magnitude and duration of the ongoing novel coronavirus, or COVID-19, and its impacts on the economies and communities we serve, which may likely have an adverse impact on our credit portfolio, goodwill, stock price, borrowers and the economy as a whole both globally and domestically;
	●	local, regional, national and international economic and market conditions and events, including the ability of the U.S. Congress to increase the U.S. statutory debt limit, as needed, as well as the impact of the 2024 U.S. presidential election, and the impact they may have on us, our customers and our assets and liabilities;

●

competition among depository and other traditional and non-traditional financial service providers;

●

risks related to the concentration of our business in Montana, including risks associated with changes in the prices, values and sales volume of residential and commercial real estate in Montana;

●

inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments or reduces loan demand;

	●	our ability to attract deposits and other sources of funding or liquidity;
	●	the impact of adverse developments affecting the U.S. banking industry, including bank failures and liquidity concerns, which could cause continued or worsening economic and market volatility, and regulatory responses thereto;
	●	the possibility that future credit losses may be higher than currently expected due to changes in economic assumptions, customer behavior, adverse developments with respect to U.S. or global economic conditions and other uncertainties, including the impact of supply chain disruptions, inflationary pressures and labor shortages on economic conditions and our business;
	●	an inability to access capital markets or maintain deposits or borrowing costs;
	●	uncertainty regarding the content, timing and impact of regulatory capital and liquidity requirements;
	●	the risks related to the transition and physical impacts of climate change;
	●	our ability to achieve environmental, social and governance goals and commitments or the impact of any changes in the Company’s sustainability strategy or commitments generally;

●

changes or volatility in the securities markets that lead to impairment in the value of our investment securities and goodwill;

●

our ability to implement our growth strategy, including identifying and consummating suitable acquisitions, raising additional capital to finance such transactions, entering new markets, possible failures in realizing the anticipated benefits from such acquisitions and an inability of our personnel, systems and infrastructure to keep pace with such growth;

●

the effect of acquisitions we may make, if any, including, without limitation, the failure to achieve expected revenue growth and/or expense savings from such acquisitions;

●

risks related to the integration of any businesses we have acquired or expect to acquire, including exposure to potential asset quality and credit quality risks and unknown or contingent liabilities, the time and costs associated with integrating systems, technology platforms, procedures and personnel;

●

potential impairment on the goodwill we have recorded or may record in connection with business acquisitions;

●

political developments, uncertainties or instability;

	●	our ability to enter new markets successfully and capitalize on growth opportunities;
	●	the need to retain capital for strategic or regulatory reasons;
	●	changes in consumer spending, borrowing and savings habits;
	●	our ability to continue to increase and manage our commercial and residential real estate, multi-family and commercial business loans;

●

the level of future deposit insurance premium assessments;

	●	our ability to implement new technologies and maintain secure and reliable technology systems;
	●	our ability to develop and maintain secure and reliable information technology systems, effectively defend ourselves against cyberattacks, or recover from breaches to our cybersecurity infrastructure;

●

the failure of assumptions underlying the establishment of allowance for possible loan losses and other estimates;

●

changes in the financial performance and/or condition of our borrowers and their ability to repay their loans when due; and

●

the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Securities and Exchange Commission, the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters.

Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. For a further list and description of various risks, relevant factors and uncertainties that could cause future results or events to differ materially from those expressed or implied in our forward-looking statements, see the Part II, Item 1A, “Risk Factors” and Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections contained elsewhere in this report, as well as our Annual Report on Form 10-K for the year ended December 31, 2023, any subsequent Reports on Form 10-Q and Form 8-K, and other filings with the SEC. We do not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur, or of which we hereafter become aware.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Dollars in Thousands, Except for Per Share Data)

(Unaudited)

	June 30,		December 31,
	2024		2023
ASSETS:
Cash and due from banks	$	22,361	$	23,243
Interest-bearing deposits in banks		1,401		1,302
Total cash and cash equivalents		23,762		24,545

Securities available-for-sale, at fair value (amortized cost of $335,210 at June 30, 2024 and $345,355 at December 31, 2023)		306,869		318,279
Federal Home Loan Bank ("FHLB") stock		10,136		9,191
Federal Reserve Bank ("FRB") stock		4,131		4,131
Mortgage loans held-for-sale, at fair value		10,518		11,432
Loans receivable, net of allowance for credit losses of $16,830 at June 30, 2024 and $16,440 at December 31, 2023		1,500,663		1,468,049
Accrued interest and dividends receivable		13,195		12,485
Mortgage servicing rights, net		15,614		15,853
Assets held-for-sale, at cost		257		-
Premises and equipment, net		98,397		94,282
Cash surrender value of life insurance, net		48,529		47,939
Goodwill		34,740		34,740
Core deposit intangible, net		5,168		5,880
Other assets		26,976		28,860

Total assets	$	2,098,955	$	2,075,666

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

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Continued)

(Dollars in Thousands, Except for Per Share Data)

(Unaudited)

	June 30,			December 31,
	2024			2023
LIABILITIES:
Deposit accounts:
Noninterest-bearing	$	400,113		$	418,727
Interest-bearing		1,218,752			1,216,468
Total deposits		1,618,865			1,635,195

Accrued expenses and other liabilities		35,804			36,462
FHLB advances and other borrowings		215,050			175,737
Other long-term debt:
Principal amount		60,155			60,155
Unamortized debt issuance costs		(1,081	)		(1,156	)
Total other long-term debt, net		59,074			58,999

Total liabilities		1,928,793			1,906,393

SHAREHOLDERS' EQUITY:
Preferred stock (par value $0.01 per share; 1,000,000 shares authorized; no shares issued or outstanding)		-			-
Common stock (par value $0.01 per share; 20,000,000 shares authorized; 8,507,429 shares issued at June 30, 2024 and December 31, 2023; 8,016,784 shares outstanding at June 30, 2024 and December 31, 2023)		85			85
Additional paid-in capital		108,962			108,819
Unallocated common stock held by Employee Stock Ownership Plan ("ESOP")		(4,297	)		(4,583	)
Treasury stock, at cost (490,645 shares at June 30, 2024 and December 31, 2023)		(11,124	)		(11,124	)
Retained earnings		97,413			96,021
Accumulated other comprehensive loss, net of tax		(20,877	)		(19,945	)
Total shareholders' equity		170,162			169,273

Total liabilities and shareholders' equity	$	2,098,955		$	2,075,666

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

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Dollars in Thousands, Except for Per Share Data)

(Unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
INTEREST AND DIVIDEND INCOME:
Interest and fees on loans	$	22,782	$	19,137	$	44,724	$	36,874
Securities available-for-sale		2,631		2,949		5,355		5,792
FHLB and FRB dividends		264		161		511		268
Other interest income		145		25		174		46
Total interest and dividend income		25,822		22,272		50,764		42,980

INTEREST EXPENSE:
Deposits		6,884		4,155		13,432		6,615
FHLB advances and other borrowings		2,625		2,179		5,122		3,321
Other long-term debt		681		674		1,364		1,352
Total interest expense		10,190		7,008		19,918		11,288

NET INTEREST INCOME		15,632		15,264		30,846		31,692

Provision for credit losses		412		319		277		598

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		15,220		14,945		30,569		31,094

NONINTEREST INCOME:
Service charges on deposit accounts		428		527		828		866
Mortgage banking, net		2,417		3,864		4,594		6,914
Interchange and ATM fees		640		641		1,203		1,218
Appreciation in cash surrender value of life insurance		320		503		608		783
Net gain (loss) on sale of available-for-sale securities		-		2		-		(222	)
Other noninterest income		464		667		988		1,316
Total noninterest income	$	4,269	$	6,204	$	8,221	$	10,875

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

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Continued)

(Dollars in Thousands, Except for Per Share Data)

(Unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
NONINTEREST EXPENSE:
Salaries and employee benefits	$	10,273	$	11,084	$	19,991	$	20,777
Occupancy and equipment expense		2,104		2,071		4,203		4,144
Data processing		1,382		1,572		2,907		2,784
Advertising		316		309		569		590
Amortization		348		397		717		815
Loan costs		412		464		810		909
Federal Deposit Insurance Corporation ("FDIC") insurance premiums		284		393		583		561
Professional and examination fees		423		592		907		1,076
Other noninterest expense		1,765		1,908		3,653		3,667
Total noninterest expense		17,307		18,790		34,340		35,323

INCOME BEFORE PROVISION FOR INCOME TAXES		2,182		2,359		4,450		6,646

Provision for income taxes		444		344		814		1,389

NET INCOME	$	1,738	$	2,015	$	3,636	$	5,257

BASIC EARNINGS PER COMMON SHARE	$	0.22	$	0.26	$	0.46	$	0.67

DILUTED EARNINGS PER COMMON SHARE	$	0.22	$	0.26	$	0.46	$	0.67

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

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Dollars in Thousands)

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023

NET INCOME	$	1,738		$	2,015		$	3,636		$	5,257

OTHER ITEMS OF COMPREHENSIVE INCOME (LOSS) BEFORE TAX:
Change in fair value of investment securities available-for-sale		524			(1,624	)		(1,265	)		3,353
Reclassification for net realized (gains) losses on investment securities available-for-sale		-			(2	)		-			222
Total other comprehensive income (loss)		524			(1,626	)		(1,265	)		3,575

Income tax (provision) benefit related to securities available-for-sale		(138	)		428			333			(941	)

COMPREHENSIVE INCOME	$	2,124		$	817		$	2,704		$	7,891

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

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

For the six months ended June 30, 2024 and 2023

(Dollars in Thousands, Except for Per Share Data)

(Unaudited)

																	*ACCUMULATED*
					*ADDITIONAL*			*UNALLOCATED*									*OTHER*
	*PREFERRED*		*COMMON*		*PAID-IN*			*ESOP*			*TREASURY*			*RETAINED*			*COMPREHENSIVE*
	*STOCK*		*STOCK*		*CAPITAL*			*SHARES*			*STOCK*			*EARNINGS*			*(LOSS) INCOME*			*TOTAL*

Balance at April 1, 2024	$	-	$	85	$	108,893		$	(4,440	)	$	(11,124	)	$	96,797		$	(21,263	)	$	168,948
Net income		-		-		-			-			-			1,738			-			1,738
Other comprehensive income		-		-		-			-			-			-			386			386
Dividends paid ($0.1400 per share)		-		-		-			-			-			(1,122	)		-			(1,122	)
Stock compensation expense		-		-		135			-			-			-			-			135
ESOP shares allocated (5,997 shares)		-		-		(66	)		143			-			-			-			77
Balance at June 30, 2024	$	-	$	85	$	108,962		$	(4,297	)	$	(11,124	)	$	97,413		$	(20,877	)	$	170,162

Balance at April 1, 2023	$	-	$	85	$	109,265		$	(5,013	)	$	(11,343	)	$	92,547		$	(22,525	)	$	163,016
Net income		-		-		-			-			-			2,015			-			2,015
Other comprehensive loss		-		-		-			-			-			-			(1,198	)		(1,198	)
Dividends paid ($0.1375 per share)		-		-		-			-			-			(1,100	)		-			(1,100	)
Stock compensation expense		-		-		144			-			-			-			-			144
ESOP shares allocated (5,997 shares)		-		-		(64	)		143			-			-			-			79
Treasury stock purchased (17,901 shares at $12.89 average cost per share)		-		-		-			-			(231	)		-			-			(231	)
Balance at June 30, 2023	$	-	$	85	$	109,345		$	(4,870	)	$	(11,574	)	$	93,462		$	(23,723	)	$	162,725

Balance at January 1, 2024	$	-	$	85	$	108,819		$	(4,583	)	$	(11,124	)	$	96,021		$	(19,945	)	$	169,273
Net income		-		-		-			-			-			3,636			-			3,636
Other comprehensive loss		-		-		-			-			-			-			(932	)		(932	)
Dividends paid ($0.2800 per share)		-		-		-			-			-			(2,244	)		-			(2,244	)
Stock compensation expense		-		-		270			-			-			-			-			270
ESOP shares allocated (11,994 shares)		-		-		(127	)		286			-			-			-			159
Balance at June 30, 2024	$	-	$	85	$	108,962		$	(4,297	)	$	(11,124	)	$	97,413		$	(20,877	)	$	170,162

Balance at January 1, 2023	$	-	$	85	$	109,164		$	(5,156	)	$	(11,343	)	$	92,023		$	(26,357	)	$	158,416
Net income		-		-		-			-			-			5,257			-			5,257
New credit standard (Topic 326) - impact in year of adoption		-		-		-			-			-			(1,616	)		-			(1,616	)
Other comprehensive income		-		-		-			-			-			-			2,634			2,634
Dividends paid ($0.275 per share)		-		-		-			-			-			(2,202	)		-			(2,202	)
Stock compensation expense		-		-		289			-			-			-			-			289
ESOP shares allocated (11,994 shares)		-		-		(108	)		286			-			-			-			178
Treasury stock purchased (17,901 shares at $12.89 average cost per share)		-		-		-			-			(231	)		-			-			(231	)
Balance at June 30, 2023	$	-	$	85	$	109,345		$	(4,870	)	$	(11,574	)	$	93,462		$	(23,723	)	$	162,725

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

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

(Unaudited)

	Six Months Ended
	June 30,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	3,636		$	5,257
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provision for credit losses		277			598
Depreciation		2,596			1,901
Net amortization of investment securities premiums and discounts		532			533
Amortization of mortgage servicing rights		838			886
Amortization of right-of-use assets		262			341
Amortization of core deposit intangibles		717			815
Compensation expense related to restricted stock awards		270			289
ESOP compensation expense for allocated shares		159			178
Net gain on sale of loans		(3,014	)		(4,960	)
Originations of loans held-for-sale		(96,314	)		(161,384	)
Proceeds from sales of loans held-for-sale		99,644			152,213
Net realized loss on sales of available-for-sale securities		-			222
Net appreciation in cash surrender value of life insurance		(608	)		(588	)
Net change in:
Accrued interest and dividends receivable		(710	)		90
Other assets		150			(4,768	)
Accrued expenses and other liabilities		1,951			(663	)
Net cash provided by (used in) operating activities		10,386			(9,040	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Activity in available-for-sale securities:
Sales		-			34,020
Maturities, principal payments and calls		9,337			20,265
Purchases		-			(28,126	)
FHLB stock redeemed		(945	)		(5,010	)
Loan origination and principal collection, net		(32,945	)		(68,608	)
Proceeds from bank owned life insurance		-			765
Proceeds from sale of premises and equipment		62			979
Purchases of premises and equipment, net		(7,417	)		(6,590	)
Net cash used in investing activities	$	(31,908	)	$	(52,305	)

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

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Dollars in Thousands)

(Unaudited)

	Six Months Ended
	June 30,
	2024			2023
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in deposits	$	(16,330	)	$	(56,905	)
Net short-term advances on FHLB and other borrowings		19,313			121,866
Advances on long-term FHLB and other borrowings		20,000			-
Purchase of treasury stock		-			(231	)
Dividends paid		(2,244	)		(2,202	)
Net cash provided by financing activities		20,739			62,528

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(783	)		1,183

CASH AND CASH EQUIVALENTS, beginning of period		24,545			21,811

CASH AND CASH EQUIVALENTS, end of period	$	23,762		$	22,994


SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for interest	$	18,817		$	8,612
Cash paid during the period for income taxes, net of refund		194			2,014

NONCASH OPERATING, INVESTING AND FINANCING ACTIVITIES:
(Decrease) increase in fair value of securities available-for-sale	$	(1,265	)	$	3,575
Mortgage servicing rights recognized		599			975
Loans transferred to real estate and other assets acquired in foreclosure		4			-
Right-of-use assets obtained in exchange for lease liabilities		(151	)		3
Commitments to invest in Low-Income Housing Tax Credit projects		(2,390	)		4,972
Cumulative effect adjustment to retained earnings due to adoption of Topic 326		-			(1,616	)

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

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Table of Contents

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Eagle Bancorp Montana, Inc. (“Eagle” or the “Company”), is a Delaware corporation that holds 100% of the capital stock of Opportunity Bank of Montana (“OBMT” or the “Bank”), formerly American Federal Savings Bank (“AFSB”). The Bank was founded in 1922 as a Montana chartered building and loan association and has conducted operations and maintained its administrative office in Helena, Montana since that time. In 1975, the Bank adopted a federal thrift charter and in October 2014 converted to a Montana chartered commercial bank and became a member bank in the Federal Reserve System.

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

In March 2021, the Bank established a subsidiary, Opportunity Housing Fund, LLC ("OHF"), to invest in Low-Income Housing Tax Credit ("LIHTC") projects. The LIHTC program is designed to encourage capital investment in construction and rehabilitation of low-income housing. Tax credits are allowable over a 10-year period. Amortizing investments in LIHTC projects are included in other assets on the consolidated statements of financial condition and totaled $7,250,000 and $7,644,000 as of June 30, 2024 and December 31, 2023, respectively. Outstanding funding obligations for LIHTC projects are included in accrued expenses and other liabilities on the condensed consolidated financial statements of condition and totaled $270,000 and $2,660,000 as of June 30, 2024 and December 31, 2023, respectively.

On January 1, 2020, the Company acquired Western Holding Company of Wolf Point, ("WHC"), a Montana corporation, and WHC's wholly-owned subsidiary, Western Bank of Wolf Point ("WB"), a Montana chartered commercial bank. The acquisition included one branch in Wolf Point, Montana. In addition, Western Financial Services, Inc. ("WFS") was acquired through the WHC merger. In December 2023, WFS changed its name to Opportunity Financial Services, Inc. ("OFS"). OFS facilitates deferred payment contracts for customers that produce agricultural products.

The Bank currently has 29 full-service branches. The Bank’s principal business is accepting deposits and, together with funds generated from operations and borrowings, investing in various types of loans and securities.

Basis of Financial Statement Presentation and Use of Estimates

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). It is recommended that these unaudited interim condensed consolidated financial statements be read in conjunction with the Company’s Annual Report on Form 10-K with all of the audited information and footnotes required by U.S. GAAP for complete financial statements for the year ended December 31, 2023, as filed with the SEC on March 6, 2024. In the opinion of management, all normal adjustments and recurring accruals considered necessary for a fair presentation of the financial position and results of operations for the periods presented have been included.

The results of operations for the six-month period ended June 30, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or any other period. In preparing condensed consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the condensed consolidated statement of financial condition and reported amounts of revenues and expenses during the reporting period. Actual results could differ from estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for credit losses ("ACL"), mortgage servicing rights, the fair value of financial instruments, the valuation of goodwill and deferred tax assets and liabilities.

Principles of Consolidation

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

Reclassifications

Certain prior period amounts were reclassified to conform to the presentation for 2024. These reclassifications had no impact on net income or shareholders’ equity.

Subsequent Events

The Company has evaluated events and transactions subsequent to June 30, 2024 for recognition and/or disclosure.

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

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

Recently Adopted Accounting Pronouncements

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

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU No. 2023-07, Segment Report (Topic 280): Improvements to Reportable Segment Disclosures. The updated accounting guidance requires expanded reportable segment disclosures, primarily related to significant segment expenses which are regularly provided to the company's chief operating decision maker. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within annual periods beginning after December 15, 2024. Retrospective application is required. The Company is currently evaluating the effect the updated guidance will have on the Company's financial statement disclosures as the Company has a single reportable segment.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The updated accounting guidance requires enhanced income tax disclosures, including the disaggregation of existing disclosures related to the tax rate reconciliation and income taxes paid. This ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effect the updated guidance will have on its consolidated financial statements and related disclosures.

NOTE 2. INVESTMENT SECURITIES

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

	June 30, 2024											December 31, 2023
			Gross											Gross
	Amortized		Unrealized							Fair		Amortized		Unrealized							Fair
	Cost		Gains		(Losses)			ACL		Value		Cost		Gains		(Losses)			ACL		Value
	(In Thousands)
Available-for-Sale:
U.S. government and agency obligations	$	5,598	$	97	$	(179	)	$	-	$	5,516	$	6,574	$	121	$	(152	)	$	-	$	6,543
U.S. Treasury obligations		52,549		-		(6,132	)		-		46,417		52,505		-		(5,690	)		-		46,815
Municipal obligations		147,434		71		(12,698	)		-		134,807		149,168		460		(11,678	)		-		137,950
Corporate obligations		4,247		-		(330	)		-		3,917		4,245		-		(340	)		-		3,905
Mortgage-backed securities		25,924		4		(1,552	)		-		24,376		28,426		-		(1,673	)		-		26,753
Collateralized mortgage obligations		91,017		-		(7,717	)		-		83,300		94,709		-		(8,141	)		-		86,568
Asset-backed securities		8,441		98		(3	)		-		8,536		9,728		32		(15	)		-		9,745
Total	$	335,210	$	270	$	(28,611	)	$	-	$	306,869	$	345,355	$	613	$	(27,689	)	$	-	$	318,279

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

NOTE 2. INVESTMENT SECURITIES – continued

Proceeds from sale of available-for sale securities and the associated realized gains and losses were as follows:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2024		2023			2024		2023
	(In Thousands)
Proceeds from sale of available-for-sale securities	$	-	$	11,247		$	-	$	34,020

Gross realized gain on sale of available-for-sale securities		-		49			-		69
Gross realized loss on sale of available-for-sale securities		-		(47	)		-		(291	)
Net realized gain (loss) on sale of available-for-sale securities	$	-	$	2		$	-	$	(222	)

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

	June 30, 2024
	Amortized		Fair
	Cost		Value
	(In Thousands)
Due in one year or less	$	8,901	$	8,766
Due from one to five years		36,397		33,021
Due from five to ten years		73,455		63,789
Due after ten years		99,516		93,617
		218,269		199,193
Mortgage-backed securities		25,924		24,376
Collateralized mortgage obligations		91,017		83,300
Total	$	335,210	$	306,869

As of June 30, 2024 and December 31, 2023, securities with a fair value of $39,611,000 and $23,076,000, respectively, were pledged to secure public deposits, Bank Term Funding Program borrowings through the Federal Reserve Bank, and for other purposes required or permitted by law.

The Company’s investment securities that have been in a continuous unrealized loss position for less than twelve months and those that have been in a continuous unrealized loss position for twelve or more months were as follows:

	June 30, 2024
	Less Than 12 Months					12 Months or Longer
			Gross					Gross
	Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses
	(In Thousands)
U.S. government and agency obligations	$	-	$	-		$	1,757	$	(179	)
U.S. Treasury obligations		-		-			46,416		(6,132	)
Municipal obligations		25,505		(349	)		100,953		(12,349	)
Corporate obligations		-		-			3,917		(330	)
Mortgage-backed securities and collateralized mortgage obligations		823		(2	)		103,591		(9,267	)
Asset-backed securities		277		(3	)		-		-
Total	$	26,605	$	(354	)	$	256,634	$	(28,257	)

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 2. INVESTMENT SECURITIES – continued

	December 31, 2023
	Less Than 12 Months					12 Months or Longer
			Gross					Gross
	Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses
	(In Thousands)
U.S. government and agency obligations	$	402	$	-		$	1,800	$	(152	)
U.S. Treasury obligations		-		-			46,816		(5,690	)
Municipal obligations		12,000		(63	)		91,869		(11,615	)
Corporate obligations		-		-			3,905		(340	)
Mortgage-backed securities and collateralized mortgage obligations		11,452		(156	)		101,869		(9,658	)
Asset-backed securities		2,521		(10	)		2,202		(5	)
Total	$	26,375	$	(229	)	$	248,461	$	(27,460	)

As of June 30, 2024 and December 31, 2023, there were, respectively, 296 and 286 securities in unrealized loss positions. Based on analysis of available-for-sale debt securities with unrealized losses as of June 30, 2024, the Company determined the decline in value was unrelated to credit losses and was primarily caused by changes in interest rates and market spreads subsequent to the initial purchase of the securities. Management does not intend to sell and the Company is not likely to be required to sell these securities prior to maturity. As a result, no ACL was recorded on available-for-sale securities at June 30, 2024 and December 31, 2023. As part of this determination, consideration was given to the extent to which fair value was less than amortized cost, adverse security ratings by a rating agency and other factors.

NOTE 3. LOANS RECEIVABLE

Loans receivable consisted of the following:

	June 30,			December 31,
	2024			2023
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	207,281		$	200,012
Commercial real estate		907,106			909,413

Other loans:
Home equity		93,213			86,932
Consumer		29,118			30,125
Commercial		280,775			258,007

Total		1,517,493			1,484,489

Allowance for credit losses		(16,830	)		(16,440	)
Total loans, net	$	1,500,663		$	1,468,049

Included in the above are loans guaranteed by U.S. government agencies totaling $18,899,000 and $23,215,000 at June 30, 2024 and December 31, 2023, respectively.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3. LOANS RECEIVABLE – continued

The following table provides allowance for credit losses activity for the three months ended June 30, 2024.

	Residential		Commercial		Home
	1-4 Family		Real Estate		Equity		Consumer			Commercial		Total
	(In Thousands)
Allowance for credit losses on loans:
Beginning balance, March 31, 2024	$	1,858	$	10,633	$	538	$	304		$	3,077	$	16,410
Charge-offs		-		-		-		(12	)		-		(12	)
Recoveries		-		7		-		1			2		10
Provision		40		292		16		2			72		422
Total ending allowance balance, June 30, 2024	$	1,898	$	10,932	$	554	$	295		$	3,151	$	16,830

The following table provides allowance for credit losses activity for the six months ended June 30, 2024.

	Residential		Commercial		Home
	1-4 Family		Real Estate		Equity		Consumer			Commercial		Total
	(In Thousands)
Allowance for credit losses on loans:
Beginning balance, December 31, 2023	$	1,866	$	10,691	$	540	$	304		$	3,039	$	16,440
Charge-offs		-		-		-		(13	)		-		(13	)
Recoveries		-		10		-		2			64		76
Provision		32		231		14		2			48		327
Total ending allowance balance, June 30, 2024	$	1,898	$	10,932	$	554	$	295		$	3,151	$	16,830

The following table provides allowance for credit losses activity for the three months ended June 30, 2023.

	Residential		Commercial		Home
	1-4 Family		Real Estate		Equity		Consumer			Commercial			Total
	(In Thousands)
Allowance for credit losses on loans:
Beginning balance, March 31, 2023	$	1,580	$	9,732	$	513	$	344		$	2,831		$	15,000
Charge-offs		-		-		-		(29	)		(26	)		(55	)
Recoveries		189		6		9		-			2			206
Provision		17		273		4		3			112			409
Total ending allowance balance, June 30, 2023	$	1,786	$	10,011	$	526	$	318		$	2,919		$	15,560

The following table provides allowance for credit losses activity for the six months ended June 30, 2023.

	Residential		Commercial		Home
	1-4 Family		Real Estate		Equity		Consumer			Commercial			Total
	(In Thousands)
Allowance for credit losses on loans:
Beginning balance, December 31, 2022, prior to adoption of ASC 326	$	1,472	$	9,037	$	509	$	342		$	2,640		$	14,000
Impact of adopting ASC 326		21		534		3		1			141			700
Charge-offs		-		-		-		(30	)		(26	)		(56	)
Recoveries		195		11		9		1			12			228
Provision		98		429		5		4			152			688
Total ending allowance balance, June 30, 2023	$	1,786	$	10,011	$	526	$	318		$	2,919		$	15,560

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3. LOANS RECEIVABLE – continued

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

	June 30, 2024
	2024		2023		2022		2021		2020		Prior		Revolving Loans		Total Loans
	(In Thousands)
RESIDENTIAL 1-4 FAMILY
Pass	$	12,624	$	26,366	$	35,339	$	22,006	$	14,291	$	38,815	$	6,538	$	155,979
Special Mention		-		-		690		-		-		-		-		690
Substandard		-		-		-		-		-		384		-		384
Total Residential 1-4 family		12,624		26,366		36,029		22,006		14,291		39,199		6,538		157,053
Current-period gross charge-offs		-		-		-		-		-		-		-		-
RESIDENTIAL 1-4 FAMILY CONSTRUCTION
Pass		10,329		17,782		20,386		974		-		-		-		49,471
Substandard		-		-		-		757		-		-		-		757
Total Residential 1-4 family construction		10,329		17,782		20,386		1,731		-		-		-		50,228
Current-period gross charge-offs		-		-		-		-		-		-		-		-
COMMERCIAL REAL ESTATE
Pass		22,030		63,315		167,783		133,908		47,244		145,672		37,010		616,962
Special Mention		-		-		1,487		-		1,802		-		-		3,289
Substandard		-		508		-		477		-		6,090		-		7,075
Total Commercial real estate		22,030		63,823		169,270		134,385		49,046		151,762		37,010		627,326
Current-period gross charge-offs		-		-		-		-		-		-		-		-
COMMERCIAL CONSTRUCTION AND DEVELOPMENT
Pass		7,958		29,194		65,850		11,730		5,607		10,221		4,938		135,498
Special Mention		-		-		502		-		-		-		-		502
Substandard		-		-		446		-		2		979		-		1,427
Total Commercial construction and development		7,958		29,194		66,798		11,730		5,609		11,200		4,938		137,427
Current-period gross charge-offs		-		-		-		-		-		-		-		-
FARMLAND
Pass		10,373		18,929		30,867		18,927		20,894		36,450		4,471		140,911
Special Mention		-		-		734		209		-		-		-		943
Substandard		-		-		-		214		65		220		-		499
Total Farmland		10,373		18,929		31,601		19,350		20,959		36,670		4,471		142,353
Current-period gross charge-offs		-		-		-		-		-		-		-		-
HOME EQUITY
Pass		570		1,634		3,367		364		542		2,615		83,339		92,431
Special Mention		-		-		-		-		-		-		98		98
Substandard		-		-		-		45		-		101		538		684
Total Home Equity		570		1,634		3,367		409		542		2,716		83,975		93,213
Current-period gross charge-offs		-		-		-		-		-		-		-		-
CONSUMER
Pass		5,810		10,046		6,075		2,453		1,412		1,074		2,140		29,010
Special Mention		-		-		15		-		-		-		-		15
Substandard		-		6		31		2		34		18		2		93
Total Consumer		5,810		10,052		6,121		2,455		1,446		1,092		2,142		29,118
Current-period gross charge-offs		-		6		-		3		-		-		3		12
COMMERCIAL
Pass		13,656		30,785		21,351		19,873		18,854		7,530		31,321		143,370
Substandard						8		31		86		142		4		271
Total Commercial		13,656		30,785		21,359		19,904		18,940		7,672		31,325		143,641
Current-period gross charge-offs		-		-		-		-		-		-		-		-
AGRICULTURAL
Pass		22,387		30,858		10,128		5,654		4,106		1,993		59,341		134,467
Special Mention		-		370		-		-		-		-		714		1,084
Substandard		-		143		43		-		-		515		882		1,583
Total Agricultural		22,387		31,371		10,171		5,654		4,106		2,508		60,937		137,134
Current-period gross charge-offs		-		-		-		-		-		-		-		-
TOTAL LOANS
Pass	$	105,737	$	228,909	$	361,146	$	215,889	$	112,950	$	244,370	$	229,098		1,498,099
Special Mention		-		370		3,428		209		1,802		-		812		6,621
Substandard		-		657		528		1,526		187		8,449		1,426		12,773
Doubtful		-		-		-		-		-		-		-		-
Total	$	105,737	$	229,936	$	365,102	$	217,624	$	114,939	$	252,819	$	231,336	$	1,517,493

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

NOTE 3. LOANS RECEIVABLE – continued

	December 31, 2023
	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total Loans
	(In Thousands)
RESIDENTIAL 1-4 FAMILY
Pass	$	10,987	$	15,696	$	24,575	$	38,738	$	28,122	$	30,938	$	6,179	$	155,235
Special Mention		-		-		-		940		-		228		-		1,168
Substandard		-		-		-		-		-		175		-		175
Total Residential 1-4 family		10,987		15,696		24,575		39,678		28,122		31,341		6,179		156,578
Current-period gross charge-offs		-		-		-		-		-		-		-		-
RESIDENTIAL 1-4 FAMILY CONSTRUCTION
Pass		-		-		6,088		21,889		14,700		-		-		42,677
Substandard		-		-		757		-		-		-		-		757
Total Residential 1-4 family construction		-		-		6,845		21,889		14,700		-		-		43,434
Current-period gross charge-offs		-		-		-		-		-		-		-		-
COMMERCIAL REAL ESTATE
Pass		55,820		50,408		141,407		154,941		63,174		103,620		31,122		600,492
Special Mention		2,593		1,948		493		1,512		1,314		-		-		7,860
Substandard		-		-		-		-		-		339		-		339
Total Commercial real estate		58,413		52,356		141,900		156,453		64,488		103,959		31,122		608,691
Current-period gross charge-offs		-		-		-		-		-		-		-		-
COMMERCIAL CONSTRUCTION AND DEVELOPMENT
Pass		6,900		6,399		19,500		80,061		31,149		3,762		8,285		156,056
Special Mention		-		-		441		511		134		990		-		2,076
Total Commercial construction and development		6,900		6,399		19,941		80,572		31,283		4,752		8,285		158,132
Current-period gross charge-offs		-		-		-		-		-		-		-		-
FARMLAND
Pass		9,551		21,728		19,795		36,291		19,452		29,551		4,480		140,848
Substandard		483		65		-		407		-		787		-		1,742
Total Farmland		10,034		21,793		19,795		36,698		19,452		30,338		4,480		142,590
Current-period gross charge-offs		-		-		-		-		-		-		-		-
HOME EQUITY
Pass		621		565		376		3,630		1,736		2,398		77,409		86,735
Substandard		-		-		-		-		-		107		90		197
Total Home Equity		621		565		376		3,630		1,736		2,505		77,499		86,932
Current-period gross charge-offs		-		-		-		-		-		-		-		-
CONSUMER
Pass		449		1,953		3,398		8,109		13,083		1,069		1,977		30,038
Special Mention		-		-		-		18		-		-		-		18
Substandard		-		37		-		8		-		22		2		69
Total Consumer		449		1,990		3,398		8,135		13,083		1,091		1,979		30,125
Current-period gross charge-offs		1		-		28		2		16		4		-		51
COMMERCIAL
Pass		2,834		20,496		22,804		23,581		31,661		6,354		21,914		129,644
Special Mention		-		25		33		109		-		98		2,741		3,006
Substandard		-		-		17		9		-		33		-		59
Total Commercial		2,834		20,521		22,854		23,699		31,661		6,485		24,655		132,709
Current-period gross charge-offs		-		-		26		-		-		8		-		34
AGRICULTURAL
Pass		1,473		5,818		7,241		16,856		40,176		1,517		50,461		123,542
Substandard		427		55		435		282		-		557		-		1,756
Total Agricultural		1,900		5,873		7,676		17,138		40,176		2,074		50,461		125,298
Current-period gross charge-offs		-		-		-		1		-		93		-		94
TOTAL LOANS
Pass		88,635		123,063		245,184		384,096		243,253		179,209		201,827		1,465,267
Special Mention		2,593		1,973		967		3,090		1,448		1,316		2,741		14,128
Substandard		910		157		1,209		706		-		2,020		92		5,094
Doubtful		-		-		-		-		-		-		-		-
Total	$	92,138	$	125,193	$	247,360	$	387,892	$	244,701	$	182,545	$	204,660	$	1,484,489

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

NOTE 3. LOANS RECEIVABLE – continued

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

	June 30, 2024
	Loans Past Due and Still Accruing

			90 Days				Nonaccrual		Nonaccrual
	30-89 Days		and				Loans with		Loans with		Current		Total
	Past Due		Greater		Total		no ACL		ACL		Loans		Loans
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	773	$	53	$	826	$	279	$	-	$	155,948	$	157,053
Residential 1-4 family construction		1,056		-		1,056		757		-		48,415		50,228
Commercial real estate		1,705		-		1,705		1,678		-		623,943		627,326
Commercial construction and development				-		-		2		-		137,425		137,427
Farmland		98		-		98		198		-		142,057		142,353
Other loans:
Home equity		624		-		624		308		-		92,281		93,213
Consumer		186		-		186		58		16		28,858		29,118
Commercial		285		100		385		25		21		143,210		143,641
Agricultural		185		923		1,108		670		-		135,356		137,134
Total	$	4,912	$	1,076	$	5,988	$	3,975	$	37	$	1,507,493	$	1,517,493

	December 31, 2023
	Loans Past Due and Still Accruing

			90 Days				Nonaccrual		Nonaccrual
	30-89 Days		and				Loans with		Loans with		Current		Total
	Past Due		Greater		Total		no ACL		ACL		Loans		Loans
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	305	$	-	$	305	$	297	$	-	$	155,976	$	156,578
Residential 1-4 family construction		-		-		-		757		-		42,677		43,434
Commercial real estate		697		-		697		340		-		607,654		608,691
Commercial construction and development		194		-		194		-		-		157,938		158,132
Farmland		404		26		430		1,982		1,734		138,444		142,590
Other loans:
Home equity		32		-		32		182		-		86,718		86,932
Consumer		115		-		115		45		15		29,950		30,125
Commercial		-		-		-		27		-		132,682		132,709
Agricultural		74		-		74		2,947		69		122,208		125,298
Total	$	1,821	$	26	$	1,847	$	6,577	$	1,818	$	1,474,247	$	1,484,489

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

NOTE 3. LOANS RECEIVABLE – continued

Interest income recognized on nonaccrual loans for the three and six months ended June 30, 2024 and 2023 is considered insignificant. Interest payments received on a cash basis related to nonaccrual loans were $430,000 at June 30, 2024 and $471,000 at December 31, 2023.

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

	June 30, 2024
	Real Estate		Business Assets		Other
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	130	$	-	$	-
Residential 1-4 family construction		757		-		-
Commercial real estate		38		1,638		-
Farmland		198		-		-
Other loans:
Home equity		575		-		-
Consumer		-		-		51
Commercial		-		88		4
Agricultural		-		1,228		-
Total	$	1,698	$	2,954	$	55

	December 31, 2023
	Real Estate		Business Assets		Other
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	264	$	-	$	-
Residential 1-4 family construction		757		-		-
Commercial real estate		39		300		-
Farmland		4,116		-		-
Other loans:
Home equity		44		-		-
Consumer		-		-		36
Commercial		-		-		-
Agricultural		-		2,465		-
Total	$	5,220	$	2,765	$	36

During the three and six months ended June 30, 2024, the Company modified one loan.

As of June 30, 2024, the Company modified one farmland loan by extending the payment for seven months. The load had amortized cost of $155,000 or 0.1% of farmland loans at June 30, 2024. There was no forgiveness of principal and the loan was current with its modified terms as of June 30, 2024.

As of June 30,2023, the Company modified one commercial real estate loan by consolidating two lines of credit and refinancing into one long term loan for ten years. The loan had amortized cost of $544,000 or 0.1% of commercial real estate loans at June 30, 2023. There was no forgiveness of principal and the loan was current with its modified terms as of June 30, 2024.

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

NOTE 4. MORTGAGE SERVICING RIGHTS

The Company is servicing mortgage loans for the benefit of others which are not included in the condensed consolidated statements of financial condition and have unpaid principal balances of $2,041,224,000 and $2,066,505,000 at June 30, 2024 and December 31, 2023, respectively. Servicing loans for others generally consists of collecting mortgage payments, maintaining escrow accounts, disbursing payments to investors and foreclosure processing. Mortgage loan servicing fees were $1,275,000 and $1,269,000 for the three months ended June 30, 2024 and 2023, respectively. Mortgage loan servicing fees were $2,579,000 and $2,535,000 for the six months ended June 30, 2024 and 2023, respectively. These fees, net of amortization, are included in mortgage banking, net, which is a component of noninterest income on the condensed consolidated statements of income.

Custodial balances maintained in connection with the foregoing loan servicing are included in noninterest checking deposits and were $9,571,000 and $8,539,000 at June 30, 2024 and December 31, 2023, respectively.

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

	As of or For the
	Three Months Ended
	June 30,
	2024			2023
	(In Thousands)
Mortgage servicing rights:
Beginning balance	$	15,738		$	15,875
Mortgage servicing rights capitalized		347			112
Amortization of mortgage servicing rights		(471	)		(486	)
Ending balance	$	15,614		$	15,501

	As of or For the
	Six Months Ended
	June 30,
	2024			2023
	(In Thousands)
Mortgage servicing rights:
Beginning balance	$	15,853		$	15,412
Mortgage servicing rights capitalized		599			975
Amortization of mortgage servicing rights		(838	)		(886	)
Ending balance	$	15,614		$	15,501

The fair values of these mortgage servicing rights were $20,581,000 and $20,388,000 at June 30, 2024 and December 31, 2023, respectively. The fair value of mortgage servicing rights was determined at loan level, depending on the interest rate and term of the specific loan, using the following valuation assumptions:

	June 30,	December 31,
	2024	2023
Key assumptions:
Discount rate	12%	12%
Prepayment speed range	94-719%	104 - 526%
Weighted average prepayment speed	109%	119%

NOTE 5. DEPOSITS

Deposits are summarized as follows:

	June 30,		December 31,
	2024		2023
	(In Thousands)
Noninterest checking	$	400,113	$	418,727
Interest-bearing checking		210,277		211,101
Savings		220,136		230,711
Money market		359,752		330,274
Time certificates of deposit		428,587		444,382
Total	$	1,618,865	$	1,635,195

Time certificates of deposit include $26,187,000 and $72,168,000 of fixed rate brokered certificates at June 30, 2024 and December 31, 2023, respectively.

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

NOTE 6. OTHER LONG-TERM DEBT

Other long-term debt consisted of the following:

	June 30, 2024					December 31, 2023
			Unamortized					Unamortized
			Debt					Debt
	Principal		Issuance			Principal		Issuance
	Amount		Costs			Amount		Costs
	(In Thousands)
Subordinated debentures fixed at 5.50% to floating, due 2030	$	15,000	$	(202	)	$	15,000	$	(219	)
Subordinated debentures fixed at 3.50% to floating, due 2032		40,000		(879	)		40,000		(937	)
Subordinated debentures variable at 3-Month SOFR plus 1.68%, due 2035		5,155		-			5,155		-
Total other long-term debt	$	60,155	$	(1,081	)	$	60,155	$	(1,156	)

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

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

In September 2005, the Company completed the private placement of $5,155,000 in subordinated debentures to the Trust. The Trust funded the purchase of the subordinated debentures through the sale of trust preferred securities to First Tennessee Bank, N.A. with a liquidation value of $5,155,000. Using interest payments made by the Company on the debentures, the Trust began paying quarterly dividends to preferred security holders in December 2005. The annual percentage rate of the interest payable on the subordinated debentures and distributions payable on the preferred securities was fixed at 6.02% until December 2010 then became variable at three-month LIBOR plus 1.42% until June 30, 2023, making the rate 6.20% as of December 31, 2023. In December of 2022, Governors of the Federal Reserve System adopted final rule 12 C.F.R. Part 253, Regulation Implementing the Adjustable Interest Rate (LIBOR) Act. Rule 253 identified SOFR-benchmark rates to replace LIBOR in certain financial contracts after June 30, 2023. As a result, the variable rate for interest payable converted to three-month CME Term SOFR plus 1.68% beginning during the quarter ended March 31, 2024. The rate was 7.01% as of June 30, 2024. Dividends on the preferred securities are cumulative and the Trust may defer the payments for up to five years. The preferred securities mature in December 2035 unless the Company elects and obtains regulatory approval to accelerate the maturity date. The subordinated debentures qualify as Tier 1 capital for regulatory purposes.

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

NOTE 7. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

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

	Unrealized
	(Losses) Gains
	on Securities
	Available-for-Sale
	(In Thousands)
Balance, April 1, 2024	$	(21,263	)
Other comprehensive income, before reclassifications and income taxes		524
Amounts reclassified from accumulated other comprehensive loss, before income taxes		-
Income tax provision		(138	)
Total other comprehensive income		386
Balance, June 30, 2024	$	(20,877	)

Balance, April 1, 2023	$	(22,525	)
Other comprehensive loss, before reclassifications and income taxes		(1,624	)
Amounts reclassified from accumulated other comprehensive loss, before income taxes		(2	)
Income tax benefit		428
Total other comprehensive loss		(1,198	)
Balance, June 30, 2023	$	(23,723	)

Balance, January 1, 2024	$	(19,945	)
Other comprehensive loss, before reclassifications and income taxes		(1,265	)
Amounts reclassified from accumulated other comprehensive loss, before income taxes		-
Income tax benefit		333
Total other comprehensive loss		(932	)
Balance, June 30, 2024	$	(20,877	)

Balance, January 1, 2023	$	(26,357	)
Other comprehensive income, before reclassifications and income taxes		3,353
Amounts reclassified from accumulated other comprehensive loss, before income taxes		222
Income tax provision		(941	)
Total other comprehensive income		2,634
Balance, June 30, 2023	$	(23,723	)

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

NOTE 8. EARNINGS PER COMMON SHARE

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
	(Dollars in Thousands, Except Per Share Data)
Basic weighted average shares outstanding		7,830,925		7,789,559		7,827,926		7,789,872
Dilutive effect of stock compensation		14,347		3,851		12,362		3,065
Diluted weighted average shares outstanding		7,845,272		7,793,410		7,840,288		7,792,937

Net income available to common shareholders	$	1,738	$	2,015	$	3,636	$	5,257

Basic earnings common per share	$	0.22	$	0.26	$	0.46	$	0.67

Diluted earnings per common share	$	0.22	$	0.26	$	0.46	$	0.67

Restricted stock units excluded from the diluted average outstanding share calculation because their effect would be anti-dilutive		21,698		24,545		15,544		18,046

NOTE 9. DERIVATIVES AND HEDGING ACTIVITIES

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

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

Derivatives are summarized as follows:

	June 30, 2024						December 31, 2023
	Notional		Fair Value				Notional		Fair Value
	Amount		Asset		Liability		Amount		Asset		Liability
	(In Thousands)
Interest rate lock commitments	$	14,098	$	-	$	91	$	15,670	$	15	$	-
Forward TBA mortgage-backed securities		9,000		-		36		12,000		-		75

Changes in the fair value of the derivatives are recorded in mortgage banking, net, within noninterest income on the condensed consolidated statements of income. Net losses of $45,000 were recorded for the three months ended June 30, 2024 compared to net gains of $211,000 for the three months ended June 30, 2023. Net losses of $67,000 were recorded for the six months ended June 30, 2024, compared to net gains of $94,000 for the six months ended June 30, 2023.

NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

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

The fair value hierarchy is as follows:

■	Level 1 Inputs – Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities.

■

Level 2 Inputs – Valuations are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuations for which all significant assumptions are observable or can be corroborated by observable market data.

■	Level 3 Inputs – Valuations are based on unobservable inputs that may include significant management judgment and estimation.

A description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy at the reporting date, is set forth below.

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

NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS – continued

Available-for-Sale Securities – Securities classified as available-for-sale are reported at fair value utilizing Level 1 (nationally recognized securities exchanges) and Level 2 inputs. For level 2 securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include but is not limited to dealer quotes, market spreads, cash flows, the U. S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayments speeds, credit information and the bond’s terms and conditions.

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

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

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

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

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

The following tables summarize financial assets and financial liabilities measured at fair value on a recurring basis, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value.

	June 30, 2024
	Level 1		Level 2		Level 3		Total Fair
	Inputs		Inputs		Inputs		Value
	(In Thousands)
Financial assets:
Available-for-sale securities
U.S. government and agency obligations	$	-	$	5,516	$	-	$	5,516
U.S. Treasury obligations		46,417		-		-		46,417
Municipal obligations		-		134,807		-		134,807
Corporate obligations		-		3,917		-		3,917
Mortgage-backed securities		-		24,376		-		24,376
Collateralized mortgage obligations		-		83,300		-		83,300
Asset-backed securities		-		8,536		-		8,536
Loans held-for-sale		-		10,518		-		10,518
Financial liabilities:
Forward TBA mortgage-backed securities		-		36		-		36
Interest rate lock commitments		-		-		91		91

	December 31, 2023
	Level 1		Level 2		Level 3		Total Fair
	Inputs		Inputs		Inputs		Value
	(In Thousands)
Financial assets:
Available-for-sale securities
U.S. government and agency obligations	$	-	$	6,543	$	-	$	6,543
U.S. Treasury obligations		46,815		-		-		46,815
Municipal obligations		-		137,950		-		137,950
Corporate obligations		-		3,905		-		3,905
Mortgage-backed securities		-		26,753		-		26,753
Collateralized mortgage obligations		-		86,568		-		86,568
Asset-backed securities		-		9,745		-		9,745
Loans held-for-sale		-		11,432		-		11,432
Interest rate lock commitments		-		-		15		15
Financial liabilities:
Forward TBA mortgage-backed securities		-		75		-		75

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

NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS – continued

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

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

	June 30, 2024
	Level 1		Level 2		Level 3		Total Fair
	Inputs		Inputs		Inputs		Value
	(In Thousands)
Collateral-dependent loans individually evaluated, net of ACL	$	-	$	-	$	122	$	122

	December 31, 2023
	Level 1		Level 2		Level 3		Total Fair
	Inputs		Inputs		Inputs		Value
	(In Thousands)
Collateral-dependent loans individually evaluated, net of ACL	$	-	$	-	$	1,782	$	1,782

The following table represents the Banks’s Level 3 financial assets and liabilities, the valuation techniques used to measure the fair value of those financial assets and liabilities, and the significant unobservable inputs and the ranges of values for those inputs.

	Principal	Significant	Range of
	Valuation	Unobservable	Significant Input
Instrument	Technique	Inputs	Values

Collateral-dependent loans individually evaluated	Fair value of underlying collateral	Discount applied to the obtained appraisal	10-30%
Real estate and other repossessed assets	Fair value of collateral	Discount applied to the obtained appraisal	10-30%
Interest rate lock commitments	Internal pricing model	Pull-through expectations	85-95%

The following tables provide a reconciliation of assets and liabilities measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the three months and six months ended June 30, 2024.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
	Interest Rate Lock Commitments						Interest Rate Lock Commitments
	(In Thousands)						(In Thousands)
Beginning balance	$	(63	)	$	130		$	15		$	(81	)
Purchases and issuances		(254	)		(186	)		(395	)		(150	)
Sales and settlements		226			(1	)		289			174
Ending balance	$	(91	)	$	(57	)	$	(91	)	$	(57	)
Unrealized (losses) gains related to items held at end of period	$	(28	)	$	(187	)	$	(106	)	$	24

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

NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS – continued

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

	June 30, 2024
							Total
	Level 1		Level 2		Level 3		Estimated		Carrying
	Inputs		Inputs		Inputs		Fair Value		Amount
	(In Thousands)
Financial assets:
Cash and cash equivalents	$	23,762	$	-	$	-	$	23,762	$	23,762
FHLB stock		-		10,136		-		10,136		10,136
FRB stock		-		4,131		-		4,131		4,131
Loans receivable, gross		-		-		1,452,848		1,452,848		1,517,493
Mortgage servicing rights		-		-		20,581		20,581		15,614
Financial liabilities:
Non-maturing interest-bearing deposits		-		790,165		-		790,165		790,165
Time certificates of deposit		-		-		425,844		425,844		428,587
FHLB advances and other borrowings		-		-		215,007		215,007		215,050
Other long-term debt		-		-		57,543		57,543		60,155

	December 31, 2023
							Total
	Level 1		Level 2		Level 3		Estimated		Carrying
	Inputs		Inputs		Inputs		Fair Value		Amount
	(In Thousands)
Financial assets:
Cash and cash equivalents	$	24,545	$	-	$	-	$	24,545	$	24,545
FHLB stock		-		9,191		-		9,191		9,191
FRB stock		-		4,131		-		4,131		4,131
Loans receivable, gross		-		-		1,416,203		1,416,203		1,484,489
Mortgage servicing rights		-		-		20,388		20,388		15,853
Financial liabilities:
Non-maturing interest-bearing deposits		-		772,086		-		772,086		772,086
Time certificates of deposit		-		-		441,939		441,939		444,382
FHLB advances and other borrowings		-		-		175,842		175,842		175,737
Other long-term debt		-		-		58,094		58,094		60,155

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Introduction

This discussion and analysis provides information that management believes is necessary to understand Eagle's financial condition, changes in financial condition, results of operations, and cash flows for the three and six months ended June 30, 2024, as compared to 2023. The following should be read in conjunction with the Company's Consolidated Financial Statements, and accompanying Notes thereto, for the year ended December 31, 2023, included in Eagle's Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (SEC) on March 6, 2024, and in conjunction with the Condensed Consolidated Financial Statements, and accompanying Notes thereto, included in Part I - Item 1. Financial Statements. The results of operations for the three and six months ended June 30, 2024, are not necessarily indicative of the future results that may be attained for the entire year or other interim periods.

Executive Summary

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

The Bank has focused on diversifying the loan portfolio over the past decade, adding commercial and agricultural loans to the strong mortgage lending proficiency. Loan originations represented by single-family residential mortgages enabled the Bank to successfully market home equity loans, as well as a wide range of shorter-term consumer loans for various personal needs (automobiles, recreational vehicles, etc.). The Bank has grown the commercial loan portfolio in both real estate and non-real estate, and further added agricultural loans, which have a shorter term and slightly higher interest rate, through acquisitions. The purpose of diversification is to mitigate the Bank’s exposure to specific market segments, as well as to improve our ability to manage our interest rate spread. This has provided additional interest income and improved interest rate sensitivity. The Bank’s management recognizes that fee income will also enable it to be less dependent on specialized lending and it now maintains a significant loan serviced portfolio which provides a steady source of fee income. Fee income is also supplemented with fees generated from deposit accounts. The Bank has a high percentage of non-maturity deposits, such as checking accounts and savings accounts, which allows management flexibility in managing its spread. Non-maturity deposits and certificates of deposits do not automatically reprice as interest rates rise. Gain on sale of loans also provides significant noninterest income in periods of high mortgage loan origination volumes. Such income will be, and has recently been, adversely affected in periods of lower mortgage activity.

Management continues to focus on improving the Bank’s earnings. Management believes the Bank needs to continue to concentrate on increasing net interest margin, other areas of fee income and control of operating expenses to achieve earnings growth going forward. Management’s strategy of growing the loan portfolio and deposit base is expected to help achieve these goals as follows: loans typically earn higher rates of return than investments; a larger deposit base should yield higher fee income; increasing the asset base will reduce the relative impact of fixed operating costs. The biggest challenge to this strategy is funding growth in an efficient manner. It may become more difficult to maintain deposit growth due to significant competition, the current conditions in the banking industry and possible reduced customer demand for deposits as customers may shift into other asset classes.

The level and movement of interest rates impacts the Bank’s earnings as well. The Federal Open Market Committee increased the federal funds target rate to 5.50% during the year ended December 31, 2023. The rate remained at 5.50% during the six months ended June 30, 2024.

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Table of Contents

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

Financial Condition

Comparisons of financial condition in this section are between June 30, 2024 and December 31, 2023.

Total assets were $2.10 billion at June 30, 2024, an increase of $23.29 million, or 1.1% from $2.08 billion at December 31, 2023. Loans receivable, net increased by $32.61 million from December 31, 2023. However, securities available-for-sale decreased $11.41 million, or 3.6% from December 31, 2023. Total liabilities were $1.93 billion at June 30, 2024, an increase of $22.40 million, or 1.2% from $1.91 billion at December 31, 2023. The increase was largely due to an increase in FHLB advances and other borrowings, partially offset by a reduction in deposits. Total borrowings increased $39.38 million from December 31, 2023, and total deposits decreased $16.33 million from December 31, 2023. Total shareholders’ equity increased $889,000 from December 31, 2023.

Financial Condition Details

Investment Activities

The following table summarizes investment activities:

	June 30,					December 31,
	2024					2023
	Fair Value		Percentage of Total			Fair Value		Percentage of Total
	(Dollars in Thousands)
Securities available-for-sale:
U.S. government and agency obligations	$	5,516		1.80	%	$	6,543		2.06	%
U.S. treasury obligations		46,417		15.13			46,815		14.71
Municipal obligations		134,807		43.92			137,950		43.33
Corporate obligations		3,917		1.28			3,905		1.23
Mortgage-backed securities		24,376		7.94			26,753		8.41
Collateralized mortgage obligations		83,300		27.15			86,568		27.20
Asset-backed securities		8,536		2.78			9,745		3.06
Total securities available-for-sale	$	306,869		100.00	%	$	318,279		100.00	%

Securities available-for-sale were $306.87 million at June 30, 2024, a decrease of $11.41 million, or 3.6%, from $318.28 million at December 31, 2023. The decrease was due to maturity, principal payments and call activity of $9.34 million and a decrease in fair value of $1.27 million.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

Financial Condition – continued

Lending Activities

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

	June 30,						December 31,
	2024						2023
	Amount			Percent of Total			Amount			Percent of Total
	(Dollars in thousands)
Real estate loans:
Residential 1-4 family ⁽¹⁾	$	157,053			10.35	%	$	156,578			10.55	%
Residential 1-4 family construction		50,228			3.31			43,434			2.93
Total residential 1-4 family		207,281			13.66			200,012			13.48

Commercial real estate		627,326			41.33			608,691			40.99
Commercial construction and development		137,427			9.06			158,132			10.65
Farmland		142,353			9.38			142,590			9.61
Total commercial real estate		907,106			59.77			909,413			61.25

Total real estate loans		1,114,387			73.43			1,109,425			74.73

Other loans:
Home equity		93,213			6.14			86,932			5.86
Consumer		29,118			1.92			30,125			2.03

Commercial		143,641			9.47			132,709			8.94
Agricultural		137,134			9.04			125,298			8.44
Total commercial loans		280,775			18.51			258,007			17.38

Total other loans		403,106			26.57			375,064			25.27

Total loans		1,517,493			100.00	%		1,484,489			100.00	%

Allowance for credit losses		(16,830	)					(16,440	)
Total loans, net	$	1,500,663					$	1,468,049

⁽¹⁾

Excludes loans held-for-sale.

Loans receivable, net increased $32.61 million, or 2.2%, to $1.50 billion at June 30, 2024 from $1.47 billion at December 31, 2023. The increase was largely driven by an increase in total commercial loans of $22.77 million in addition to increases in total residential loans of $7.27 million and home equity loans of $6.28 million. The increase was slightly offset by decreases in total commercial real estate loans of $2.30 million and consumer loans of $1.01 million.

Total loan originations were $251.56 million for the six months ended June 30, 2024. Total residential 1-4 family originations were $122.99 million, which includes $96.31 million of loans held-for-sale originations. Total commercial originations were $61.06 million. Total commercial real estate originations were $48.53 million. Home equity loan originations totaled $12.66 million. Consumer loan originations totaled $6.32 million. Loans held-for-sale decreased by $914,000 to $10.52 million at June 30, 2024 from $11.43 million at December 31, 2023.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

Financial Condition – continued

Lending Activities– continued

Generally, our collection procedures provide that when a loan is 15 or more days delinquent, the borrower is sent a past due notice. If the loan becomes 30 days delinquent, the borrower is sent a written delinquency notice requiring payment. If the delinquency continues, subsequent efforts are made to contact the delinquent borrower, including face to face meetings and counseling to resolve the delinquency. All collection actions are undertaken with the objective of compliance with the Fair Debt Collection Act.

For mortgage loans and home equity loans, if the borrower is unable to cure the delinquency or reach a payment agreement, we will institute foreclosure actions. If a foreclosure action is taken and the loan is not reinstated, paid in full or refinanced, the property is sold at judicial sale at which we may be the buyer if there are no adequate offers to satisfy the debt. Any property acquired as the result of foreclosure, or by deed in lieu of foreclosure, is classified as real estate owned until such time as it is sold or otherwise disposed of. When real estate owned is acquired, it is recorded at its fair market value less estimated selling costs. The initial recording of any loss is charged to the allowance for credit losses. Subsequent write-downs are recorded as a charge to operations. As of June 30, 2024 and December 31, 2023 there was $4,000 and $5,000 of real estate owned and other repossessed property.

The following table sets forth information regarding nonperforming assets:

	June 30,			December 31,
	2024			2023
	(Dollars in Thousands)
Nonaccrual loans
Real estate loans:
Residential 1-4 family	$	279		$	297
Residential 1-4 family construction		757			757
Commercial real estate		1,678			340
Commercial construction and development		2			-
Farmland		198			3,716
Other loans:
Home equity		308			182
Consumer		74			60
Commercial		46			27
Agricultural		670			3,016
Accruing loans delinquent 90 days or more
Real estate loans:
Residential 1-4 family		53			-
Farmland		-			26
Other loans:
Commercial		100			-
Agricultural		923			-
Total nonperforming loans		5,088			8,421
Real estate owned and other repossessed property, net		4			5
Total nonperforming assets	$	5,092		$	8,426

Total nonperforming loans to total loans		0.34	%		0.57	%
Total nonperforming loans to total assets		0.24	%		0.41	%
Total nonaccrual loans to total loans		0.26	%		0.57	%
Total nonperforming assets to total assets		0.24	%		0.41	%

Nonaccrual loans as of June 30, 2024 and December 31, 2023 include $1.86 million and $1.68 million, respectively of acquired loans that deteriorated subsequent to the acquisition date.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

The following table includes the composition of the commercial real estate loan category:

	June 30,		December 31,
	2024		2023
	(In Thousands)
Non-owner occupied:
Multifamily	$	90,161	$	86,980
Industrial/warehouse		41,166		43,983
Office space		20,556		20,150
Lessors of nonresidential buildings		65,243		63,515
Hotels and other traveler accommodations		56,515		58,157
Construction and related industries		22,942		17,530
Wholesale and retail trade		13,126		14,575
Lessors of mini warehouses and self-storage units		14,277		13,959
Car washes		10,401		10,792
Healthcare and social assistance		10,703		10,206
Lessors of other real estate property		30,154		9,778
Bars and restaurants		6,540		5,565
Other real estate rental and leasing		7,109		4,877
Other		31,939		54,556
Total CRE non-owner occupied		420,832		414,623

Owner occupied:
Office space		39,009		40,657
Real estate leasing activities		31,780		28,998
Automotive related		22,667		22,241
Healthcare and social assistance		20,561		21,564
Bars and restaurants		14,883		14,954
Hospitality industry related		16,940		14,756
Wholesale and retail trade		16,326		13,861
Construction and related		13,190		11,840
Other		31,138		25,197
Total CRE owner occupied		206,494		194,068
Total commercial real estate	$	627,326	$	608,691

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

Financial Condition – continued

Deposits and Other Sources of Funds

The following table includes deposit accounts by category:

	June 30,					December 31,
	2024					2023
			Percent					Percent
	Amount		of Total			Amount		of Total
	(Dollars in Thousands)
Noninterest checking	$	400,113		24.72	%	$	418,727		25.61	%
Interest-bearing checking		210,277		12.99			211,101		12.91
Savings		220,136		13.60			230,711		14.11
Money market		359,752		22.22			330,274		20.20
Total		1,190,278		73.53			1,190,813		72.83
Certificates of deposit accounts:
IRA certificates		22,454		1.39			22,960		1.40
Brokered certificates		26,187		1.62			72,168		4.41
Other certificates		379,946		23.46			349,254		21.36
Total certificates of deposit		428,587		26.47			444,382		27.17
Total deposits	$	1,618,865		100.00	%	$	1,635,195		100.00	%

Deposits decreased by $16.33 million, or 1.0%, from December 31, 2023 to June 30, 2024. Money market deposits increased by $29.48 million. Noninterest checking decreased by $18.61 million, total certificates of deposits decreased $15.80 million, savings decreased $10.58 million and interest-bearing checking decreased $824,000. Brokered certificates decreased by $45.98 million and IRA certificates decreased by $506,000. These decreases were offset by an increase in other certificates of deposits of $30.69 million.

The estimated amount of uninsured deposits was approximately $284.00 million or 18% of total deposits at June 30, 2024 compared to approximately $275.00 million or 17% of total deposits at December 31, 2023.

The following table summarizes borrowing activity:

	June 30,					December 31,
	2024					2023
	Net		Percent			Net		Percent
	Amount		of Total			Amount		of Total
	(Dollars in Thousands)
FHLB advances and other borrowings	$	215,050		78.45	%	$	175,737		74.87	%
Other long-term debt:
Subordinated debentures fixed at 5.50% to floating, due 2030		14,798		5.40			14,781		6.30
Subordinated debentures fixed at 3.50% to floating, due 2032		39,121		14.27			39,063		16.64
Subordinated debentures variable, due 2035		5,155		1.88			5,155		2.19
Total other long-term debt		59,074		21.55			58,999		25.13
Total borrowings	$	274,124		100.00	%	$	234,736		100.00	%

Total borrowings increased by $39.38 million, or 16.8%, to $274.12 million at June 30, 2024 from $234.74 million at December 31, 2023. The increase is due to an increase in FHLB advances and other borrowings and continues to be a source to help fund loan growth.

Shareholders’ Equity

Total shareholders’ equity increased by $889,000, or 0.5%, to $170.16 million at June 30, 2024 from $169.27 million at December 31, 2023. The increase was primarily attributed to net income of $3.64 million, offset by an increase in unrealized losses of securities available for sale of $932,000 and dividends paid of $2.24 million.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

Analysis of Net Interest Income

The Bank’s earnings have historically depended primarily upon net interest income, which is the difference between interest income earned on loans and investments and interest paid on deposits and any borrowed funds. It is the single largest component of Eagle’s operating income. Net interest income is affected by (i) the difference between rates of interest earned on loans and investments and rates paid on interest-bearing deposits and borrowings (the “interest rate spread”) and (ii) the relative amounts of loans and investments and interest-bearing deposits and borrowings.

The following table includes average balances for financial condition items, as well as interest and dividends and average yields related to the average balances. All average balances are daily average balances. Nonaccrual loans were included in the computation of average balances, but have been reflected in the table as loans carrying a zero yield. The yields include the effect of deferred fees and discounts and premiums that are amortized or accreted to interest income or expense.

	For the Three Months Ended June 30,
	2024							2023
	Average		Interest					Average		Interest
	Daily		and		Yield/			Daily		and		Yield/
	Balance		Dividends		Cost⁽⁴⁾			Balance		Dividends		Cost⁽⁴⁾
	(Dollars in Thousands)
Assets:
Interest-earning assets:
Investment securities	$	306,207	$	2,631		3.45	%	$	343,634	$	2,949		3.44	%
FHLB and FRB stock		13,243		264		8.00			13,181		161		4.90
Loans receivable⁽¹⁾		1,513,313		22,782		6.04			1,407,316		19,137		5.45
Other earning assets		4,655		145		12.49			2,575		25		3.89
Total interest-earning assets		1,837,418		25,822		5.64			1,766,706		22,272		5.06
Noninterest-earning assets		240,030							232,251
Total assets	$	2,077,448						$	1,998,957

Liabilities and equity:
Interest-bearing liabilities:
Deposit accounts:
Checking	$	218,995	$	139		0.25	%	$	238,149	$	264		0.44	%
Savings		215,959		34		0.06			241,096		37		0.06
Money market		348,351		2,145		2.47			322,912		1,163		1.44
Certificates of deposit		437,390		4,566		4.19			338,764		2,691		3.19
FHLB advances and other borrowings		192,346		2,625		5.47			164,992		2,179		5.30
Other long-term debt		59,062		681		4.62			58,912		674		4.59
Total interest-bearing liabilities		1,472,103		10,190		2.78			1,364,825		7,008		2.06
Noninterest checking		405,188							439,422
Other noninterest-bearing liabilities		38,624							33,176
Total liabilities		1,915,915							1,837,423

Total equity		161,533							161,534

Total liabilities and equity	$	2,077,448						$	1,998,957
Net interest income/interest rate spread⁽²⁾			$	15,632		2.86	%			$	15,264		3.00	%

Net interest margin⁽³⁾						3.41	%						3.47	%
Total interest-earning assets to interest-bearing liabilities						124.82	%						129.45	%

⁽¹⁾Includes loans held-for-sale.

⁽²⁾Interest rate spread represents the difference between the average yield on interest-earning assets and the average rate on interest-bearing liabilities.

⁽³⁾ Net interest margin represents income before the provision for loan losses divided by average interest-earning assets.

⁽⁴⁾For purposes of this table, tax exempt income is not calculated on a tax equivalent basis.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

	For the Six Months Ended June 30,
	2024							2023
	Average		Interest					Average		Interest
	Daily		and		Yield/			Daily		and		Yield/
	Balance		Dividends		Cost⁽⁴⁾			Balance		Dividends		Cost⁽⁴⁾
	(Dollars in Thousands)
Assets:
Interest-earning assets:
Investment securities	$	310,168	$	5,355		3.46	%	$	344,330	$	5,792		3.39	%
FHLB and FRB stock		13,283		511		7.72			11,750		268		4.60
Loans receivable⁽¹⁾		1,506,303		44,724		5.95			1,387,153		36,874		5.36
Other earning assets		4,113		174		8.48			2,637		46		3.52
Total interest-earning assets		1,833,867		50,764		5.55			1,745,870		42,980		4.96
Noninterest-earning assets		238,146							227,297
Total assets	$	2,072,013						$	1,973,167

Liabilities and equity:
Interest-bearing liabilities:
Deposit accounts:
Checking	$	219,511	$	185		0.17	%	$	245,368	$	450		0.37	%
Savings		218,045		69		0.06			250,280		72		0.06
Money market		343,533		4,170		2.43			338,239		2,109		1.26
Certificates of deposit		438,661		9,008		4.12			311,251		3,984		2.58
FHLB advances and other borrowings		186,767		5,122		5.50			130,948		3,321		5.11
Other long-term debt		59,043		1,364		4.63			58,893		1,352		4.63
Total interest-bearing liabilities		1,465,560		19,918		2.74			1,334,979		11,288		1.71
Noninterest checking		406,077							447,741
Other noninterest-bearing liabilities		38,292							28,537
Total liabilities		1,909,929							1,811,257

Total equity		162,084							161,910

Total liabilities and equity	$	2,072,013						$	1,973,167
Net interest income/interest rate spread⁽²⁾			$	30,846		2.82	%			$	31,692		3.25	%

Net interest margin⁽³⁾						3.37	%						3.66	%
Total interest-earning assets to interest-bearing liabilities						125.13	%						130.78	%

⁽¹⁾Includes loans held-for-sale.

⁽²⁾Interest rate spread represents the difference between the average yield on interest-earning assets and the average rate on interest-bearing liabilities.

⁽³⁾ Net interest margin represents income before the provision for loan losses divided by average interest-earning assets.

⁽⁴⁾For purposes of this table, tax exempt income is not calculated on a tax equivalent basis.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

Rate/Volume Analysis

The following tables present the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to: (1) changes in volume multiplied by the old rate; (2) changes in rate, which are changes in rate multiplied by the old volume; and (3) changes not solely attributable to rate or volume, which have been allocated proportionately to the change due to volume and the change due to rate.

	For the Three Months Ended June 30,
	2024									2023
				Due to									Due to
	Volume			Rate			Net			Volume			Rate			Net
	(In Thousands)
Interest-earning assets:
Investment securities	$	(321	)	$	3		$	(318	)	$	(20	)	$	958		$	938
FHLB and FRB stock		1			102			103			45			78			123
Loans receivable⁽¹⁾		1,441			2,204			3,645			3,209			1,033			4,242
Other earning assets		20			100			120			(103	)		20			(83	)
Total interest-earning assets		1,141			2,409			3,550			3,131			2,089			5,220

Interest-bearing liabilities:
Checking		(21	)		(104	)		(125	)		(1	)		240			239
Savings		(4	)		1			(3	)		(4	)		2			(2	)
Money Market		92			890			982			(40	)		944			904
Certificates of deposit		783			1,092			1,875			104			2,488			2,592
FHLB advances and other borrowings		361			85			446			314			1,850			2,164
Other long-term debt		2			5			7			(42	)		68			26
Total interest-bearing liabilities		1,213			1,969			3,182			331			5,592			5,923

Change in net interest income	$	(72	)	$	440		$	368		$	2,800		$	(3,503	)	$	(703	)

	For the Six Months Ended June 30,
	2024									2023
				Due to									Due to
	Volume			Rate			Net			Volume			Rate			Net
	(In Thousands)
Interest earning assets:
Investment securities	$	(575	)	$	138		$	(437	)	$	363		$	2,121		$	2,484
FHLB and FRB stock		34			209			243			119			52			171
Loans receivable⁽¹⁾		3,167			4,683			7,850			7,897			2,709			10,606
Other earning assets		26			102			128			(141	)		40			(101	)
Total interest earning assets		2,652			5,132			7,784			8,238			4,922			13,160

Interest bearing liabilities:
Checking		(47	)		(218	)		(265	)		3			409			412
Savings		(9	)		6			(3	)		2			1			3
Money Market		33			2,028			2,061			-			1,657			1,657
Certificates of deposit		1,631			3,393			5,024			175			3,634			3,809
FHLB advances and other borrowings		1,416			385			1,801			601			2,699			3,300
Other long-term debt		3			9			12			(76	)		175			99
Total interest bearing liabilities		3,027			5,603			8,630			705			8,575			9,280

Change in net interest income	$	(375	)	$	(471	)	$	(846	)	$	7,533		$	(3,653	)	$	3,880

⁽¹⁾Includes loans held-for-sale.

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Table of Contents

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

Results of Operations for the Three Months Ended June 30, 2024 and 2023

Net Income. Eagle’s net income for the three months ended June 30, 2024 was $1.74 million compared to $2.02 million for the three months ended June 30, 2023. The decrease of $277,000 was due to a decrease in noninterest income of $1.93 million and an increase in the provision for income taxes of $100,000. These were partially offset by a decrease in noninterest expense of $1.48 million and an increase in net interest income after provision for credit losses of $275,000. Basic and diluted earnings per common share were both $0.22 for the current period. Basic and diluted earnings per common share were both $0.26 for the prior year comparable period.

Net Interest Income. Net interest income increased to $15.63 million for the three months ended June 30, 2024, from $15.26 million for the same quarter in the prior year. The increase of $368,000, or 2.4%, was the result of an increase in interest and dividend income of $3.55 million largely offset by an increase in interest expense of $3.18 million.

Interest and Dividend Income. Interest and dividend income was $25.82 million for the three months ended June 30, 2024, compared to $22.27 million for the three months ended June 30, 2023. The increase of $3.55 million, or 15.9% was driven by interest and fees on loans, which increased to $22.78 million for the three months ended June 30, 2024, from $19.14 million for the three months ended June 30, 2023. The increase in interest and fees on loans was due to an increase in the average yield on loans, as well as an increase in the average balance of loans. The average interest rate earned on loans receivable increased by 59 basis points, from 5.45% for the three months ended June 30, 2023, to 6.04% for the current period. Interest accretion on purchased loans was $304,000 for the three months ended June 30, 2024, which resulted in a 7 basis point increase in net interest margin compared to $309,000 for the three months ended June 30, 2023, which also resulted in a 7 basis point increase in net interest margin. Average balances for loans receivable, including loans held-for-sale, for the three months ended June 30, 2024 were $1.51 billion compared to $1.41 billion for the prior year period. This represents an increase of $105.99 million, or 7.5% and was impacted by organic growth. Interest on investment securities available-for-sale decreased by $318,000 period over period, primarily due to the decrease in average balances for investments from $343.63 million for the three months ended June 30, 2023 to $306.21 million for the three months ended June 30, 2024.

Interest Expense. Total interest expense was $10.19 million for the three months ended June 30, 2024, compared to $7.01 million for the three months ended June 30, 2023. The increase of $3.18 million was due to an increase of $2.72 million in interest expense on deposits, as well as a net increase of $453,000 in interest expense on total borrowings. The overall average rate on total deposits was up from 1.05% for the three months ended June 30, 2023, compared to 1.70% for the three months ended June 30, 2024. In addition, the average balance for total deposits was $1.63 billion for the three months ended June 30, 2024, compared to $1.58 billion for the three months ended June 30, 2023. The increase in interest expense on total borrowings was driven by the average rate paid on FHLB advances and other borrowings, increasing from 5.30% for the three months ended June 30, 2023, to 5.47% for the three months ended June 30, 2024. In addition, the average balance of FHLB advances and other borrowings increased from $164.99 million for the three months ended June 30, 2023, to $192.35 million for the three months ended June 30, 2024. Short-term borrowings have increased to fund loan growth.

Provision for Credit Losses. Provision for credit losses was $412,000 for the three months ended June 30, 2024, compared to $319,000 in provision for credit losses for the three months ended June 30, 2023. The provision for credit losses for three months ended June 30, 2024 includes a provision for credit losses on loans of $422,000 and a decrease in the provision for unfunded commitments of $10,000.

Noninterest Income. Total noninterest income was $4.27 million for the three months ended June 30, 2024, compared to $6.20 million for the three months ended June 30, 2023. The decrease of $1.93 million, or 31.1%, was largely due to a decrease in mortgage banking, net, of $1.44 million. Mortgage banking, net, includes net gain on sale of mortgage loans which decreased to $1.60 million for the three months ended June 30, 2024, compared to $2.76 million for the three months ended June 30, 2023. During the three months ended June 30, 2024, $53.23 million residential mortgage loans were sold compared to $84.76 million in the same period in the prior year. Mortgage volumes continue to be impacted by the current interest rate environment. Gross margin levels decreased 24 basis points from 3.25% for the three months ended June 30, 2023, to 3.01% for the three months ended June 30, 2024.

Noninterest Expense. Noninterest expense was $17.31 million for the three months ended June 30, 2024, compared to $18.79 million for the three months ended June 30, 2023, a decrease of $1.48 million or 7.9%. The largest driver of the decrease was salaries and employee benefits, decreasing 7.3% from $11.08 million for the three months ended June 30, 2023, compared to $10.27 million for the three months ended June 30, 2024.

Provision for Income Taxes. Provision for income taxes was $444,000 for the three months ended June 30, 2024, compared to $344,000 for the three months ended June 30, 2023. The effective tax rate was 20.3% for the current period compared to 14.6% for the prior period.

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Table of Contents

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

Results of Operations for the Six Months Ended June 30, 2024 and 2023

Net Income. Eagle’s net income for the six months ended June 30, 2024 was $3.64 million compared to $5.26 million for the six months ended June 30, 2023. The decrease of $1.62 million was primarily due to a decrease in noninterest income of $2.66 million and a decrease in net interest income of $846,000. These decreases were partially offset by a decrease in noninterest expense of $983,000. Basic and diluted earnings per common share were both $0.46 for the current period. Basic and diluted earnings per common share were both $0.67 for the prior year comparable period.

Net Interest Income. Net interest income decreased to $30.85 million for the six months ended June 30, 2024, from $31.69 million for the six months ended June 30, 2023. The decrease of $846,000 was the result of an increase in interest expense of $8.63 million partially offset by an increase in interest and dividend income of $7.78 million.

Interest and Dividend Income. Interest and dividend income was $50.76 million for the six months ended June 30, 2024, compared to $42.98 million for the six months ended June 30, 2023. Interest and fees on loans increased to $44.72 million for the six months ended June 30, 2024, from $36.87 million for the six months ended June 30, 2023. This increase of $8.63 million, or 21.3%, was due to an increase in the average yield on loans and the average balance of loans. The average interest rate earned on loans receivable increased by 59 basis points from 5.36% for the six months ended June 30, 2023, to 5.95% for the six months ended June 30, 2024. Interest accretion on purchased loans was $423,000 for the six months ended June 30, 2024, which resulted in a 5 basis point increase in net interest margin, compared to $663,000 for the six months ended June 30, 2023, which resulted in an 8 basis point increase in net interest margin. Average balances for loans receivable, including loans held-for-sale, for the six months ended June 30, 2024 were $1.51 billion compared to $1.39 billion for the prior year period. This represents an increase of $119.15 million, or 8.6%, and was impacted by organic growth. Interest on investment securities available-for-sale decreased by $437,000 period over period. Average balances for investments decreased to $310.17 million for the six months ended June 30, 2024, from $344.33 million for the six months ended June 30, 2023. However, interest rates earned on investments increased to 3.46% for the six months ended June 30, 2024, from 3.39% for the six months ended June 30, 2023.

Interest Expense. Total interest expense was $19.92 million for the six months ended June 30, 2024, compared to $11.29 million for the six months ended June 30, 2023. The increase of $8.63 million, or 76.4%, was primarily due to an increase of $6.81 million in interest expense on deposits, in addition to a net increase of $1.81 million in interest expense on total borrowings. The overall average rate on total deposits was up from 0.84% for the six months ended June 30, 2023, compared to 1.66% for the six months ended June 30, 2024. In addition, the average balance for total deposits was $1.63 billion for the six months ended June 30, 2024, compared to $1.59 billion for the six months ended June 30, 2023. The increase in the interest expense on total borrowings was largely due to an increase in the average balance for FHLB advances and other borrowings, which increased to $186.77 million for the six months ended June 30, 2024, from $130.95 million for the six months ended June 30, 2023. Short-term borrowings have increased to fund loan growth. In addition, the average rate paid on FHLB advances and other borrowings increased from 5.11% for the six months ended June 30, 2023, to 5.50% for the six months ended June 30, 2024.

Provision for Credit Losses. Provision for credit losses was $277,000 for the six months ended June 30, 2024, compared to $598,000 for the six months ended June 30, 2023. The provision for credit losses for the six months ended June 30, 2024, includes a provision for credit losses on loans of $327,000 and a decrease in the provision for unfunded commitments of $50,000.

Noninterest Income. Total noninterest income was $8.22 million for the six months ended June 30, 2024, compared to $10.88 million for the six months ended June 30, 2023. The decrease of $2.66 million was primarily due to a decrease in mortgage banking, net of $2.32 million. Mortgage banking, net includes net gain on sale of mortgage loans which decreased to $3.01 million for the six months ended June 30, 2024, compared to $4.96 million for the six months ended June 30, 2023. During the six months ended June 30, 2024, $96.79 million residential mortgage loans were sold compared to $147.15 million in the same period in the prior year. Mortgage volumes have been impacted by the current interest rate environment. Gross margin levels decreased 26 basis points from 3.37% for the six months ended June 30, 2023, to 3.11% for the six months ended June 30, 2024.

Noninterest Expense. Noninterest expense was $34.34 million for the six months ended June 30, 2024, compared to $35.32 million for the six months ended June 30, 2023, a slight decrease of $983,000 or 2.8%. The decrease was primarily related to lower salaries and employee benefits, decreasing 3.8% from $20.78 million for the six months ended June 30, 2023, to $19.99 million for the six months ended June 30, 2024.

Provision for Income Taxes. Provision for income taxes was $814,000 for the six months ended June 30, 2024, compared to $1.39 million for the six months ended June 30, 2023, due to the increase in proportion of tax-exempt income compared to pretax earnings. In addition, the effective tax rate for the current period includes tax credits and other benefits related to investments in low-income housing tax credit projects. The year-to-date effective tax rate was 18.3% for the current period compared to 20.9% for same period in 2023.

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Table of Contents

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

Liquidity and Capital Resources

Liquidity

The Bank is required by regulation to maintain sufficient levels of liquidity for safety and soundness purposes. Appropriate levels of liquidity will depend upon the types of activities in which the company engages. For internal reporting purposes, the Bank uses policy minimums of 1.0% and 8.0% for “basic surplus” and “basic surplus with FHLB” as internally defined. In general, the “basic surplus” is a calculation of the ratio of unencumbered short-term assets reduced by estimated percentages of CD maturities and other deposits that may leave the Bank in the next 90 days divided by total assets. “Basic surplus with FHLB” adds to “basic surplus” the additional borrowing capacity the Bank has with the FHLB of Des Moines. The Bank exceeded those minimum ratios as of June 30, 2024 and December 31, 2023.

The Bank’s primary sources of funds are deposits, repayment of loans and mortgage-backed securities, maturities of investments, funds provided from operations, advances from the FHLB of Des Moines and other borrowings. Scheduled repayments of loans and mortgage-backed securities and maturities of investment securities are generally predictable. However, other sources of funds, such as deposit flows and loan prepayments, can be greatly influenced by the general level of interest rates, economic conditions and competition. The Company uses liquidity resources principally to fund existing and future loan commitments. It also uses them to fund maturing certificates of deposit and demand deposit withdrawals, for investment purposes, to meet operating expenses and capital expenditures, for dividend payments and for stock repurchases to maintain adequate liquidity levels.

Liquidity may be adversely affected by unexpected deposit outflows, higher interest rates paid by competitors, and similar matters. Management monitors projected liquidity needs and determines the level desirable based in part on the Bank's commitments to make loans and management’s assessment of the Bank's ability to generate funds.

The Company's available borrowing capacity was approximately $374.55 million as of June 30, 2024 and $398.50 million as of December 31, 2023.

	June 30,				December 31,
	2024				2023
	Borrowings		Remaining Borrowing		Borrowings		Remaining Borrowing
	Outstanding		Capacity		Outstanding		Capacity
	(Dollars in Thousands)
Federal Home Loan Bank advances	$	195,050	$	245,326	$	175,737	$	266,017
Federal Reserve Bank discount window		-		29,222		-		32,472
Federal Reserve Bank Term Funding Program		20,000		-		-		-
Correspondent bank lines of credit		-		100,000		-		100,000
Total	$	215,050	$	374,548	$	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 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 will be valued at par. In March of 2024, the Company accessed borrowings through the BTFP.

In addition to bank level liquidity management, Eagle must manage liquidity at the parent company level for various operating needs, including the servicing of debt, the payment of dividends on our common stock, share repurchases, payment of general corporate expense, and potential capital infusions into subsidiaries. The primary source of liquidity for Eagle consists of dividends from the Bank, which is governed by certain rules and regulations of the Montana Division of Banking and Financial Institutions and the Federal Reserve, and access to capital markets. Eagle has a $15.00 million line of credit with a correspondent bank. There was no outstanding balance for this line of credit at June 30, 2024 or December 31, 2023. Eagle's ability to receive dividends from the Bank in future periods will depend on several factors, including, without limitation, the Bank's future profits, asset quality, liquidity, and overall condition. In addition, both the Montana Division of Banking and Financial Institutions and Federal Reserve may require approval to pay dividends, based on certain regulatory statutes and limitations.

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

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Table of Contents

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

Capital Resources

As of June 30, 2024, the Bank’s internally determined measurement of sensitivity to interest rate movements as measured by a 300 basis point rise in interest rates scenario, decreased the economic value of equity (“EVE”) by 1.4% compared to a decrease of 1.9% at December 31, 2023. A 300 basis point decrease in interest rates scenario, decreased EVE by 11.2% compared to a decrease of 18.2% at December 31, 2023. The Bank is within the guidelines set forth by the Board of Directors for interest rate risk sensitivity in rising interest rate scenarios.

The Bank's regulatory capital was in excess of all applicable regulatory requirements and the Bank is deemed "well capitalized" pursuant to State of Montana and FRB rules as of June 30, 2024. The Bank's actual capital amounts and ratios as of June 30, 2024 are presented in the table below and all of the ratios, with the exception of the Tier 1 capital adjusted total average assets ratio, include the capital conservation buffer of 2.50%.

											Minimum
											To Be Well
						Minimum Required					Capitalized Under
						for Capital Adequacy					Prompt Corrective
	Actual					Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in Thousands)
June 30, 2024:
Total risk-based capital to risk weighted assets	$	223,731		13.15	%	$	178,687		10.50	%	$	170,178		10.00	%

Tier 1 capital to risk weighted assets		205,661		12.09			144,651		8.50			136,142		8.00

Common equity Tier 1 capital to risk weighted assets		205,661		12.09			119,125		7.00			110,616		6.50

Tier 1 capital to adjusted total average assets		205,661		9.92			82,933		4.00			103,666		5.00

											Minimum
											To Be Well
						Minimum Required					Capitalized Under
						for Capital Adequacy					Prompt Corrective
	Actual					Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in Thousands)
December 31, 2023:
Total risk-based capital to risk weighted assets	$	218,909		13.01	%	$	176,692		10.50	%	$	168,278		10.00	%

Tier 1 capital to risk weighted assets		201,179		11.96			143,037		8.50			134,623		8.00

Common equity Tier 1 capital to risk weighted assets		201,179		11.96			117,795		7.00			109,381		6.50

Tier 1 capital to adjusted total average assets		201,179		9.75			82,569		4.00			103,212		5.00

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Table of Contents

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

Impact of Inflation and Changing Prices

Our condensed consolidated financial statements and the accompanying notes, which are found in Part I, Item 1, have been prepared in accordance with generally accepted accounting principles, which require the measurement of financial position and operating results in terms of historical dollars without considering the change in the relative purchasing power of money over time and due to inflation. The impact of inflation is reflected in the increased cost of our operations. Interest rates have a greater impact on our performance than do the general levels of inflation. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services.

Interest Rate Risk

Interest rate risk is the potential for loss of future earnings resulting from adverse changes in the level of interest rates. Interest rate risk results from several factors and could have a significant impact on the Company’s net interest income, which is the Company's primary source of revenue. Net interest income is affected by changes in interest rates, the relationship between rates on interest-bearing assets and liabilities, the impact of interest rate fluctuations on asset prepayments and the mix of interest-bearing assets and liabilities.

Although interest rate risk is inherent in the banking industry, banks are expected to have sound risk management practices in place to measure, monitor and control interest rate exposures. The objective of interest rate risk management is to contain the risks associated with interest rate fluctuations. The process involves identification and management of the sensitivity of net interest income to changing interest rates.

The ongoing monitoring and management of this risk is an important component of the Company’s asset/liability committee, which is governed by policies established by the Company’s Board that are reviewed and approved annually. The Board delegates responsibility for carrying out the asset/liability management policies to the Bank’s asset/liability committee. In this capacity, the asset/liability committee develops guidelines and strategies impacting the Company’s asset/liability management related activities based upon estimated market risk sensitivity, policy limits and overall market interest rate levels and trends. The Company’s goal of its asset and liability management practices is to maintain or increase the level of net interest income within an acceptable level of interest rate risk.

The Bank has established acceptable levels of interest rate risk as follows for an instantaneous and permanent shock in rates: projected net interest income over the next twelve months (i.e. year-1) will not be reduced by more than 15% given an immediate increase or decrease in interest rates of up to 300 basis points, and the subsequent twelve months (i.e. year-2) will not be reduced by more than 20.0% given an immediate increase or decrease in interest rates of up to 300 basis points.

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


Changes in Market	Rate Sensitivity		Policy	Policy
Interest Rates	As of June 30, 2024		Limits	Limits
(Basis Points)	Year 1	Year 2	Year 1	Year 2

+300	-12.2%	5.7%	-15.0%	-20.0%
+200	-8.1%	6.6%	-15.0%	-15.0%
+100	-3.6%	8.7%	-10.0%	-10.0%
-100	4.1%	10.7%	-10.0%	-10.0%
-200	8.0%	11.0%	-15.0%	-15.0%
-300	11.3%	10.5%	-15.0%	-20.0%

Critical Accounting Policies and Estimates

The accounting and financial reporting policies of Eagle are in accordance with generally accepted accounting principles ("GAAP") and conform to the accounting and reporting guidelines prescribed by bank regulatory authorities. Eagle has identified certain of its accounting policies as “critical accounting policies,” consisting of those related to the allowance for credit losses and business combinations. In determining which accounting policies are critical in nature, Eagle has identified the policies that require significant judgment or involve complex estimates. It is management's practice to discuss critical accounting policies with the Board of Directors' Audit Committee on a periodic basis, including the development, selection, implementation, and disclosure of the critical accounting policies. The application of these policies has a significant impact on Eagle’s unaudited interim consolidated financial statements. Eagle’s financial results could differ significantly if different judgments or estimates are used in the application of these policies. All accounting policies described in "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 – Organization and Summary of Significant Accounting Policies" in Eagle’s 2023 Form 10-K should be reviewed for a greater understanding of how we record and report our financial performance. There have been no significant changes to the accounting policies, estimates, and assumptions, or the judgments affecting the application of these estimates and assumptions from those disclosed in Eagle’s 2023 Form 10-K.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

Item 4. Controls and Procedures

As of the end of the period covered by this report, we conducted an evaluation under the supervision and with the participation of our management including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”) of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to management to allow timely decisions regarding required disclosure. Based on that evaluation, our CEO and CFO concluded that as of June 30, 2024, our disclosure controls and procedures were effective. During the last quarter, there were no changes in the Company’s internal control over financial reporting that have materially affected, or were reasonably likely to materially affect, the Company’s internal control over financial reporting.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

Part II - OTHER INFORMATION

Item 1.

Legal Proceedings.

Neither the Company nor the Bank is involved in any pending legal proceeding other than non-material legal proceedings occurring in the ordinary course of business.

Item 1A.

Risk Factors

There have not been any material changes in the risk factors previously disclosed in Part 1, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

On April 18, 2024, Eagle's Board of Directors (the "Board") authorized the repurchase of up to 400,000 shares of its common stock beginning May 1, 2024. 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. No shares were purchased during the second quarter of 2024 under this plan. The plan expires on May 1, 2025.

On April 20, 2023, the Board authorized the repurchase of up to 400,000 shares of its common stock beginning May 1, 2023. Under the plan, shares 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. During the second quarter of 2023, 17,901 shares were purchased under this plan at an average price of $12.89. No shares were purchased during the third or fourth quarter of 2023 under this plan. No shares were purchased during the first or second quarter of 2024 under this plan. The plan expired on May 1, 2024.

On April 21, 2022, the Board authorized the repurchase of up to 400,000 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 repurchases depended on 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. 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.

Item 3.

Defaults Upon Senior Securities.

Not applicable.

Item 4.

Mine Safety Disclosures

Not applicable.

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Table of Contents

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

Part II - OTHER INFORMATION - continued

Item 5.

Other Information.

During the three months ended June 30, 2024, none of our directors or officers (as defined in Exchange Act Rule 16a-1(f)) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

Item 6.

Exhibits.

Exhibit Number	Description

2.1	Agreement and Plan of Merger, dated as of September 30, 2021, by and among Eagle Bancorp Montana, Inc., Opportunity Bank of Montana, First Community Bancorp, Inc. and First Community Bank (incorporated by reference to Exhibit 2.1 of our Current Report on Form 8-K filed on October 1, 2021).

3.1	Amended and Restated Certificate of Incorporation of Eagle Bancorp Montana, Inc. (incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K filed on February 23, 2010).

3.2	Certificate of Amendment to the Amended and Restated Certificate of Incorporation. (incorporated by reference to Exhibit 3.2 of our Quarterly Report on Form 10-Q filed on May 9, 2019).

3.3	Bylaws of Eagle Bancorp Montana, Inc., amended as of August 20, 2015 (incorporated by reference to 3.1 of our Current Report on Form 8-K filed on August 25, 2015).

31.1	Certification by Laura F. Clark, Chief Executive Officer, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 (a) of the Sarbanes-Oxley Act of 2002.

31.2	Certification by Miranda J. Spaulding, Chief Financial Officer, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 (a) of the Sarbanes-Oxley Act of 2002.

32.1	Certification by Laura F. Clark, Chief Executive Officer, and Miranda J. Spaulding, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)⁽¹⁾

101.SCH	Inline XBRL Taxonomy Extension Schema Document⁽¹⁾

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document⁽¹⁾

101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document⁽¹⁾

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document⁽¹⁾

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document⁽¹⁾

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

⁽¹⁾ These interactive data files shall not be deemed filed for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, or Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under those sections.

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Table of Contents

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	EAGLE BANCORP MONTANA, INC.

Date: August 8, 2024	By:	/s/ Laura F. Clark
		Laura F. Clark
		President/CEO



Date: August 8, 2024	By:	/s/ Miranda J. Spaulding
		Miranda J. Spaulding
		SVP/CFO

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