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| 8-K - FORM 8-K FILING DOCUMENT - Eagle Bancorp Montana, Inc. | document.htm |
EXHIBIT 99.1
Eagle Bancorp Montana Earns $482,000 in Fourth Quarter and $2.4 Million in Fiscal Year 2011; Increases Regular Quarterly Cash Dividend
HELENA, Mont., July 26, 2011 (GLOBE NEWSWIRE) -- Eagle Bancorp Montana, Inc. (Nasdaq:EBMT), (the "Company," "Eagle"), the holding company of American Federal Savings Bank, today reported it earned $482,000, or $0.12 per diluted share, in the fourth fiscal quarter ended June 30, 2011, compared to $537,000, or $0.14 per diluted share, in the fourth quarter a year ago. For all of fiscal 2011, Eagle earned $2.4 million, or $0.62 per diluted share, compared to $2.4 million, or $0.54 per diluted share, a year ago. All per share data has been adjusted to reflect the additional shares issued in the April 5, 2010 stock conversion.
The Company also announced its board of directors has increased its quarterly cash dividend 1.8% to $0.07125 per share, to be paid August 26, 2011 to shareholders of record on August 05, 2011. This marks the eleventh consecutive year that Eagle has increased its quarterly cash dividend.
"We produced strong results for both the quarter and the fiscal year, demonstrating the strength of our banking strategy and our ability to prosper in challenging times," stated Pete Johnson, President and Chief Executive Officer. "We achieved our financial targets for the year by focusing on steady, incremental growth, delivering excellent service to our expanding customer base and maintaining solid asset quality. With our healthy capital levels we are in an excellent position for future growth."
Fourth Quarter Fiscal 2011 Highlights
- Net income was $482,000 or $0.12 per diluted share.
- Net interest margin remained steady at 3.71%.
- Nonperforming assets were $4.1 million, or 1.24% of total assets.
- Nonperforming loans totaled $2.9 million, or 1.57% of total loans.
- Net loans increased 9.42% to $185.5 million at 6/30/11, compared to $169.5 million a year earlier.
- Commercial real estate loans increased 55.2% year-over-year to $64.7 million and now comprise 34.5% of the total loan portfolio.
- Capital ratios remain strong with a Tier 1 leverage ratio of 16.78%.
- Declared regular quarterly cash dividend of $0.07125 per share.
Balance Sheet Results
Net loans increased 9.42% to $185.5 million at June 30, 2011 compared with $169.5 million a year earlier. The bulk of the net loan increase comes from the commercial real estate loan portfolio which increased 55.2% to $64.7 million compared to $41.7 million a year earlier. Residential mortgage loans decreased 4.12% from the prior year to $70.0 million, commercial loans increased 11.8% to $10.6 million and home equity loans decreased 6.64% to $27.8 million compared to a year ago.
Total assets were $331.1 million at June 30, 2011, compared with $325.7 million a year earlier. Total deposits increased 5.68% to $209.2 million at June 30, 2011 compared to $197.9 million a year earlier. Checking and money market accounts represent 42.0% of total deposits, savings accounts make up 17.6% of total deposits, and CDs comprise 40.4% of the total deposit portfolio.
Shareholders' equity was $52.5 million at June 30, 2011, compared to $52.4 million a year ago. Book value per share was $13.39 per share at June 30, 2011 compared to $12.84 per share a year earlier.
Credit Quality
"We are hopeful that this difficult credit cycle is subsiding as many of our problem credits are in the process of working through the collection and foreclosure cycle," said Clint Morrison, SVP and CFO. "While this process is taking longer than we would like, we remain optimistic as we are seeing a slowdown in the inflow of new problem loans."
Nonperforming loans (NPLs) were $2.9 million, or 1.57% of total loans at June 30, 2011, compared to $2.3 million, or 1.24% of total loans, three months earlier, and $2.8 million, or 1.65% of total loans, a year ago. Other real estate owned (OREO) and other repossessed assets were $1.2 million at June 30, 2011 compared to $1.3 million three months earlier and $619,000 at June 30, 2010.
Nonperforming assets (NPAs), consisting of nonperforming loans, other real estate owned (OREO) and other repossessed assets, and loans delinquent 90 days or more, totaled $4.1 million, or 1.24% of total assets, at June 30, 2011, compared to $3.7 million, or 1.09% of total assets in the preceding quarter, and $3.0 million, or 1.05% of total assets a year ago.
The fourth quarter provision for loan losses was $155,000, and Eagle recorded net charge-offs of $6,000. The provision for loan losses was $276,000 in the preceding quarter and $259,000 in the fourth quarter a year ago. The allowance for loan losses now stands at $1.80 million, or 0.96% of total loans at June 30, 2011, compared to $1.65 million, or 0.88% of total loans at March 31, 2011, and $1.10 million, or 0.64% of total loans a year ago.
Operating Results
"The reduced cost of funds made it possible for us to hold our net interest margin unchanged from the preceding quarter, despite asset yields also decreasing," said Morrison. The net interest margin was 3.71% in the fourth quarter of fiscal 2011 which was unchanged from the preceding quarter. The net interest margin was 3.42% in the fourth quarter of fiscal 2010. Funding costs for the fourth quarter of 2011 decreased seven basis points compared to the previous quarter while asset yields decreased six basis points compared to the previous quarter. For all of fiscal 2011, Eagle's net interest margin was 3.62%, a 10 basis point increase compared to 3.52% in fiscal 2010.
Net interest income before the provision for loan loss increased 10.7% to $2.8 million in the fourth quarter of fiscal 2011, compared to $2.5 million in the fourth quarter a year ago. For all of fiscal 2011, net interest income before the provision for loan losses increased 10.9% to $10.9 million, compared to $9.8 million a year earlier.
Noninterest income was $786,000 in the fourth quarter of 2011, compared to $873,000 in the fourth quarter a year ago. For the year, noninterest income increased 28.7% to $4.6 million, compared to $3.6 million in fiscal 2010.
"Over the past year, especially in the first half of fiscal 2011, we were successful originating mortgage loans and selling them in the secondary market. As a result, the net gain on sale of loans was $2.2 million in fiscal 2011, a $907,000 increase compared to $1.3 million in fiscal 2010. As loan refinance activity has started to slow, the net gain on sale of loans has returned to more normalized levels and was down slightly during the fourth quarter compared to the preceding quarter," said Morrison. The net gain on sale of loans was $225,000 in fourth quarter of 2011 compared to $301,000 in the fourth quarter a year ago.
For the fourth quarter of fiscal 2011 noninterest expense was $2.7 million, compared to $2.9 million in the preceding quarter and $2.4 million in the fourth quarter a year ago. For the year noninterest expense was up 20.1% to $11.1 million compared with $9.2 million in fiscal 2010. The increase in noninterest expense for the year was primarily due to amortizing and writing-off mortgage servicing rights which totaled $1.2 million for fiscal 2011, compared to $487,000 for fiscal 2010.
Eagle's fourth quarter return on average equity (ROAE) was 3.81% compared to 4.36% for the fourth quarter a year ago. Return on average assets (ROAA) was 0.58% in the fourth quarter compared to 0.66% in the fourth quarter a year ago. For fiscal 2011 the ROAE was 4.50% compared to 6.84% a year earlier and ROAA was 0.73% compared to 0.79% a year earlier.
Capital Management
On April 5, 2010, the Company completed its second-step conversion from the partially-public mutual holding company structure to the fully publicly-owned stock holding company structure. As part of that transaction it also completed a related stock offering. Following the conversion and offering, Eagle Bancorp Montana became the stock holding company for American Federal Savings Bank, and both Eagle Financial MHC and Eagle Bancorp ceased to exist. The Company sold a total of 2,464,274 shares of common stock at a purchase price of $10.00 per share in the offering for gross proceeds of $24.6 million. Concurrent with the completion of the offering, shares of Eagle Bancorp common stock owned by the public were exchanged. Stockholders of Eagle Bancorp received 3.8 shares of the Eagle Bancorp Montana's common stock for each share of Eagle Bancorp common stock that they owned immediately prior to completion of the transaction.
Eagle Bancorp Montana continues to meet the well capitalized thresholds for regulatory purposes with a Tier 1 leverage ratio of 16.78% at June 30, 2011.
About the Company
Eagle Bancorp Montana, Inc. is the stock holding company of American Federal Savings Bank. American Federal Savings Bank was formed in 1922 and is headquartered in Helena, Montana. It has additional branches in Butte, Bozeman and Townsend. Eagle Bancorp Montana, Inc. commenced operations on April 5, 2010 following the conversion of Eagle Financial MHC and the sale of Eagle Bancorp Montana, Inc. Eagle's common stock trades on the NASDAQ Global Market under the symbol "EBMT."
Forward Looking Statements –
This release may contain certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and may be identified by the use of such words as "believe," "expect," "anticipate," "should," "planned," "estimated," and "potential." These forward-looking statements include, but are not limited to statements of our goals, intentions and expectations; statements regarding our business plans, prospects, growth and operating strategies; statements regarding the asset quality of our loan and investment portfolios; and estimates of our risks and future costs and benefits. These forward-looking statements are based on current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. These factors include, but are not limited to, changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements; general economic conditions, either nationally or in our market areas, that are worse than expected; competition among depository and other financial institutions; loan demand or residential and commercial real estate values in Montana; inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments; adverse changes in the securities markets; and other economic, governmental, competitive, regulatory and technological factors that may affect our operations. Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements.
| Balance Sheet | |||||
| (Dollars in thousands, except per share data) | (Unaudited) | (Unaudited) | (audited) | ||
|
June 30, 2011 |
March 31, 2011 |
June 30, 2010 |
|||
| Assets: | |||||
| Cash and due from banks | $2,703 | $2,134 | $2,543 | ||
| Interest-bearing deposits with banks | 1,837 | 6,982 | 966 | ||
| Federal funds sold | 5,000 | 4,951 | -- | ||
| Total cash and cash equivalents | 9,540 | 14,067 | 3,509 | ||
| Securities available-for-sale, at market value | 102,700 | 101,702 | 114,528 | ||
| Securities held-to-maturity, at cost | -- | -- | 125 | ||
| FHLB stock, at cost | 2,003 | 2,003 | 2,003 | ||
| Investment in Eagle Bancorp Statutory Trust I | 155 | 155 | 155 | ||
| Loans held-for-sale | 1,784 | 926 | 7,695 | ||
| Loans: | |||||
| Residential mortgage (1-4 family) | 70,003 | 71,420 | 73,010 | ||
| Commercial loans | 10,564 | 10,640 | 9,452 | ||
| Commercial real estate | 64,701 | 63,630 | 41,677 | ||
| Construction loans | 5,020 | 4,799 | 7,016 | ||
| Consumer loans | 9,343 | 8,725 | 9,613 | ||
| Home equity | 27,816 | 28,493 | 29,795 | ||
| Unearned loan fees | (176) | (191) | 39 | ||
| Total loans | 187,271 | 187,516 | 170,602 | ||
| Allowance for loan losses | (1,800) | (1,650) | (1,100) | ||
| Net loans | 185,471 | 185,866 | 169,502 | ||
| Accrued interest and dividends receivable | 1,558 | 1,574 | 1,610 | ||
| Mortgage servicing rights, net | 2,142 | 2,173 | 2,337 | ||
| Premises and equipment, net | 16,151 | 15,993 | 15,848 | ||
| Cash surrender value of life insurance | 6,900 | 6,849 | 6,691 | ||
|
Real estate and other assets acquired in settlement of loans, net of allowance for losses |
1,181 | 1,321 | 619 | ||
| Other assets | 1,508 | 1,973 | 1,117 | ||
| Total assets | $331,093 | $334,602 | $325,739 | ||
| Liabilities: | |||||
| Deposit accounts: | |||||
| Noninterest bearing | 19,027 | 19,843 | 18,376 | ||
| Interest bearing | 190,159 | 190,833 | 179,563 | ||
| Total deposits | 209,186 | 210,676 | 197,939 | ||
| Accrued expense and other liabilities | 3,371 | 2,875 | 2,989 | ||
| Federal funds purchased | -- | -- | -- | ||
| FHLB advances and other borrowings | 60,896 | 62,946 | 67,224 | ||
| Subordinated debentures | 5,155 | 5,155 | 5,155 | ||
| Total liabilities | 278,608 | 281,652 | 273,307 | ||
| Shareholders' Equity: | |||||
|
Preferred stock (no par value, 1,000,000 shares authorized, none issued or outstanding) |
-- | -- | -- | ||
|
Common stock (par value $0.01; 8,000,000 shares authorized; 4,083,127 shares issued; 3,918,687 outstanding at June 30, 2011, 4,083,127 oustanding at March 31, 2011 and June 30, 2010 |
41 | 41 | 41 | ||
| Additional paid-in capital | 22,110 | 22,103 | 22,104 | ||
| Unallocated common stock held by employee stock ownership plan (ESOP) | (1,722) | (1,764) | (1,889) | ||
| Treasury stock, at cost (164,440 shares at June 30, 2011) | (1,796) | -- | -- | ||
| Retained earnings | 31,918 | 31,722 | 30,652 | ||
| Accumulated other comprehensive gain | 1,934 | 848 | 1,524 | ||
| Total shareholders' equity | 52,485 | 52,950 | 52,432 | ||
| Total liabilities and shareholders' equity | $331,093 | $334,602 | $325,739 | ||
| Income Statement | (Unaudited) | (Unaudited) | |||||||||
| (Dollars in thousands, except per share data) | Three Months Ended | Twelve Months Ended | |||||||||
| June 30 2011 | March 31 2011 | June 30 2010 | June 30 2011 | June 30 2010 | |||||||
| Interest and dividend Income: | |||||||||||
| Interest and fees on loans | $ 2,785 | $ 2,877 | $ 2,650 | $ 11,279 | $ 10,857 | ||||||
| Securities available-for-sale | 899 | 890 | 1,033 | 3,653 | 4,003 | ||||||
| Securities held-to-maturity | -- | -- | 2 | -- | 11 | ||||||
| Interest on deposits with banks | 6 | 6 | 5 | 21 | 27 | ||||||
| Total interest and dividend income | 3,690 | 3,773 | 3,690 | 14,953 | 14,898 | ||||||
| Interest Expense: | |||||||||||
| Interest expense on deposits | 302 | 326 | 475 | 1,392 | 2,161 | ||||||
| Advances and other borrowings | 593 | 626 | 636 | 2,502 | 2,635 | ||||||
| Subordinated debentures | 22 | 22 | 75 | 186 | 300 | ||||||
| Total interest expense | 917 | 974 | 1,186 | 4,080 | 5,096 | ||||||
| Net interest income | 2,773 | 2,799 | 2,504 | 10,873 | 9,802 | ||||||
| Provision for loan losses | 155 | 276 | 259 | 948 | 715 | ||||||
| Net interest income after provision for loan losses | 2,618 | 2,523 | 2,245 | 9,925 | 9,087 | ||||||
| Noninterest income: | |||||||||||
| Service charges on deposit accounts | 180 | 156 | 194 | 733 | 765 | ||||||
| Net gain on sale of loans | 225 | 333 | 301 | 2,187 | 1,280 | ||||||
| Mortgage loan servicing fees | 227 | 215 | 200 | 830 | 770 | ||||||
| Net gain on sale of available-for-sale securities | 19 | -- | 4 | 19 | 33 | ||||||
| Net gain (loss) on preferred stock-FASB ASC 825 | -- | -- | -- | -- | 84 | ||||||
| Net gain (loss) on sale of OREO | -- | (2) | -- | (2) | -- | ||||||
| Other income | 135 | 242 | 174 | 856 | 661 | ||||||
| Total noninterest income | 786 | 944 | 873 | 4,623 | 3,593 | ||||||
| Noninterest expense: | |||||||||||
| Salaries and employee benefits | 1,208 | 1,322 | 1,213 | 4,948 | 4,750 | ||||||
| Occupancy and equipment expense | 341 | 342 | 340 | 1,346 | 1,177 | ||||||
| Data processing | 95 | 198 | 108 | 504 | 407 | ||||||
| Advertising | 150 | 127 | 99 | 524 | 438 | ||||||
| Amortization of mortgage servicing fees | 125 | 334 | 122 | 1,158 | 487 | ||||||
| Federal insurance premiums | 64 | 66 | 79 | 257 | 275 | ||||||
| Postage | 27 | 26 | 32 | 123 | 144 | ||||||
| Legal, accounting and examination fees | 87 | 67 | 82 | 363 | 318 | ||||||
| Consulting fees | 86 | 36 | 39 | 180 | 170 | ||||||
| ATM processing | 15 | 15 | 20 | 64 | 69 | ||||||
| Provision for OREO valuation losses | 140 | -- | -- | 201 | -- | ||||||
| Other | 375 | 330 | 255 | 1,414 | 996 | ||||||
| Total noninterest expense | 2,713 | 2,863 | 2,389 | 11,082 | 9,231 | ||||||
| Income before provision for income taxes | 691 | 604 | 729 | 3,466 | 3,449 | ||||||
| Provision for income taxes | 209 | 196 | 192 | 1,056 | 1,035 | ||||||
| Net income | $ 482 | $ 408 | $ 537 | $ 2,410 | $ 2,414 | ||||||
| Basic earnings per share* | $ 0.12 | $ 0.10 | $ 0.14 | $ 0.62 | $ 0.60 | ||||||
| Diluted Earnings per share* | $ 0.12 | $ 0.10 | $ 0.14 | $ 0.62 | $ 0.54 | ||||||
| Weighted average shares | |||||||||||
| outstanding (basic EPS)* | 3,869,139 | 3,904,017 | 3,900,352 | 3,892,141 | 4,035,183 | ||||||
| Weighted average shares | |||||||||||
| outstanding (diluted EPS)* | 3,908,187 | 3,904,017 | 3,925,251 | 3,901,902 | 4,465,961 | ||||||
| * for periods, June 30, 2010 and earlier, calculated on a converted basis using 3.8 to 1 exchange ratio | |||||||||||
| Financial Ratios and Other Data | ||||
| (Dollars in thousands, except per share data) | ||||
| (Unaudited) | ||||
|
June 30, 2011 |
March 31, 2011 |
June 30, 2010 |
||
| Asset Quality: | ||||
| Nonaccrual loans | $ 2,939 | $ 2,331 | $ 2,782 | |
| Loans 90 days past due | -- | -- | 29 | |
| Restructured loans | -- | -- | -- | |
| Total nonperforming loans | 2,939 | 2,331 | 2,811 | |
| Other real estate owned and other repossed assets, net | 1,181 | 1,321 | 619 | |
| Total nonperforming assets | $ 4,120 | $ 3,652 | $ 3,430 | |
| Nonperforming loans / portfolio loans | 1.57% | 1.24% | 1.65% | |
| Nonperforming assets / assets | 1.24% | 1.09% | 1.05% | |
| Allowance for loan losses / portfolio loans | 0.96% | 0.88% | 0.64% | |
| Allowance / nonperforming loans | 61.25% | 70.79% | 39.13% | |
| Gross loan charge-offs for the quarter | $ 9 | $ 28 | $ 10 | |
| Gross loan recoveries for the quarter | $ 3 | $ -- | $ 1 | |
| Net loan charge-offs for the quarter | $ 6 | $ 28 | $ 9 | |
| Capital Data (At quarter end): | ||||
| Book value per share | $ 13.39 | $ 12.97 | $ 12.84 | |
| Shares outstanding | 3,918,687 | 4,083,127 | 4,083,127 | |
| Profitability Ratios (For the quarter): | ||||
| Efficiency ratio* | 73.26% | 73.64% | 67.92% | |
| Return on average assets | 0.58% | 0.49% | 0.66% | |
| Return on average equity | 3.81% | 3.08% | 4.36% | |
| Net interest margin | 3.71% | 3.71% | 3.42% | |
| Profitability Ratios (Year-to-date): | ||||
| Efficiency ratio * | 68.98% | 67.53% | 66.19% | |
| Return on average assets | 0.73% | 0.78% | 0.79% | |
| Return on average equity | 4.50% | 4.79% | 6.84% | |
| Net interest margin | 3.62% | 3.61% | 3.52% | |
|
* The efficiency ratio is a non-GAAP ratio that is calculated by dividing non-interest expense, exclusive of intangible asset amortization, by the sum of net interest income and non-interest income. |
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CONTACT: Peter J. Johnson, President and CEO
(406) 457-4006
Clint J. Morrison, SVP and CFO
(406) 457-4007