• Eagle Bancorp Montana Earns $3.6 Million, or $0.47 per Diluted Share, in Fourth Quarter of 2022; Earns $10.7 Million, or $1.45 per Diluted Share, for the Year 2022; Declares Quarterly Cash Dividend of $0.1375 per Share

    المصدر: Nasdaq GlobeNewswire / 26 يناير 2023 10:00:01   America/New_York

    HELENA, Mont., Jan. 26, 2023 (GLOBE NEWSWIRE) -- Eagle Bancorp Montana, Inc. (NASDAQ: EBMT), (the “Company,” “Eagle”), the holding company of Opportunity Bank of Montana (the “Bank”), today reported net income of $3.6 million, or $0.47 per diluted share, in the fourth quarter of 2022, compared to $3.1 million, or $0.40 per diluted share, in the preceding quarter, and $1.7 million, or $0.26 per diluted share, in the fourth quarter a year ago. For the year 2022, net income was $10.7 million, or $1.45 per diluted share, compared to $14.4 million, or $2.17 per diluted share, in 2021. Results for 2022 included $2.3 million in acquisition costs associated with the merger of First Community Bancorp, Inc., and its subsidiary, First Community Bank (“First Community”), compared to $761,000 in acquisition related expenses in 2021.

    Eagle’s board of directors declared a quarterly cash dividend of $0.1375 per share on January 19, 2023. The dividend will be payable March 3, 2023 to shareholders of record February 10, 2023. The current dividend represents an annualized yield of 3.24% based on recent market prices.

    “Eagle’s fourth quarter operating results reflect another quarter of growth in the loan portfolio and the resulting net interest margin expansion,” said Laura F. Clark, President and CEO. “Fourth quarter loan growth totaled $41.5 million and was well diversified across our loan categories. Additionally, our fourth quarter net interest margin improved year-over-year as we took advantage of interest rate increases enacted by the Federal Reserve. One of the highlights of 2022 was the acquisition of First Community, which was completed during the second quarter of 2022 and has already contributed nicely to operating results. I am excited about the opportunities this new market provides for continued long-term growth.”

    Eagle closed its acquisition of First Community on April 30, 2022, in a transaction valued at approximately $38.6 million. The acquisition added approximately $370 million in assets, $321 million in deposits and $191 million in loans.

    Fourth Quarter 2022 Highlights (at or for the three-month period ended December 31, 2022, except where noted):

    • Net income was $3.6 million, or $0.47 per diluted share, in the fourth quarter of 2022, compared to $3.1 million, or $0.40 per diluted share, in the preceding quarter, and $1.7 million, or $0.26 per diluted share, in the fourth quarter a year ago.
    • Net interest margin (“NIM”) was 4.10% in the fourth quarter of 2022, compared to 4.18% in the preceding quarter, and 3.75% in the fourth quarter a year ago.
    • Revenues (net interest income before the loan loss provision, plus noninterest income) decreased modestly to $25.1 million in the fourth quarter of 2022, compared to $25.3 million in the preceding quarter and increased 15.2% compared to $21.8 million in the fourth quarter a year ago.  
    • The Company recorded a discount on loans acquired from First Community of $5.4 million at April 30, 2022 of which $4.1 million remained as of December 31, 2022.
    • Remaining discount on loans from acquisitions prior to 2022 totaled $728,000 as of December 31, 2022.
    • The accretion of the loan purchase discount into loan interest income from the First Community, and previous acquisitions, was $267,000 in the fourth quarter of 2022, compared to accretion on purchased loans from acquisitions of $392,000 in the preceding quarter.
    • The allowance for loan losses represented 180.0% of nonperforming loans at December 31, 2022, compared to 177.1% a year earlier.
    • Total loans increased 45.1% to $1.35 billion, at December 31, 2022, compared to $933.1 million a year earlier, and increased 3.2% compared to $1.31 billion at September 30, 2022.
    • Total deposits increased 33.8% to $1.64 billion at December 31, 2022, from $1.22 billion a year ago, and decreased 2.3% compared to $1.67 billion at September 30, 2022.
    • The Company paid a quarterly cash dividend in the fourth quarter of $0.1375 per share on December 2, 2022 to shareholders of record November 10, 2022.

    Balance Sheet Results

    Eagle’s total assets increased 35.7% to $1.95 billion at December 31, 2022, compared to $1.44 billion a year ago, and increased 1.3% from $1.92 billion three months earlier. The year over year increase was primarily due to the First Community acquisition that closed during the second quarter of 2022.

    The investment securities portfolio totaled $349.5 million at December 31, 2022, compared to $271.3 million a year ago, and $351.9 million at September 30, 2022.

    Eagle originated $95.3 million in new residential mortgages during the quarter and sold $107.1 million in residential mortgages, with an average gross margin on sale of mortgage loans of approximately 2.77%. This production compares to residential mortgage originations of $142.0 million in the preceding quarter with sales of $121.3 million and an average gross margin on sale of mortgage loans of approximately 3.46%.

    Total loans increased $420.5 million or 45.1% compared to a year ago, and $41.5 million or 3.2% from three months earlier. Commercial real estate loans increased 31.3% to $539.1 million at December 31, 2022, compared to $410.6 million a year earlier. Agricultural and farmland loans increased 112.1% to $240.4 million at December 31, 2022, compared to $113.3 million a year earlier. Commercial construction and development loans increased 63.6% to $151.1 million, compared to $92.4 million a year ago. Residential mortgage loans increased 34.4% to $135.9 million, compared to $101.2 million a year earlier. Commercial loans increased 25.3% to $127.3 million, compared to $101.5 million a year ago. Home equity loans increased 43.5% to $74.3 million, residential construction loans increased 30.9% to $59.8 million, and consumer loans increased 49.6% to $27.6 million, compared to a year ago.

    Total deposits increased 33.8% to $1.64 billion at December 31, 2022, compared to $1.22 billion at December 31, 2021, and decreased 2.3% from $1.67 billion at September 30, 2022. Noninterest-bearing checking accounts represented 28.7%, interest-bearing checking accounts represented 15.5%, savings accounts represented 16.7%, money market accounts comprised 23.7% and time certificates of deposit made up 15.4% of the total deposit portfolio at December 31, 2022. The average cost of funds was 0.85% in the fourth quarter of 2022, compared to 0.47% in the preceding quarter and 0.35% in the fourth quarter of 2021.

    Shareholders’ equity was $158.4 million at December 31, 2022, compared to $156.7 million a year earlier and $151.3 million three months earlier. Book value per share was $19.79 at December 31, 2022, compared to $23.07 a year earlier and $18.94 three months earlier. Tangible book value per share, a non-GAAP financial measure calculated by dividing shareholders’ equity, less goodwill and core deposit intangible, by common shares outstanding, was $14.52 at December 31, 2022, compared to $19.74 a year earlier and $13.60 three months earlier.  

    Operating Results

    “Higher yields on interest earning assets contributed to NIM expanding 35 basis points during the fourth quarter of 2022, compared to the fourth quarter a year ago. Compared to the preceding quarter, NIM contracted eight basis points, largely due to an uptick in funding costs,” said Clark.

    Eagle’s NIM was 4.10% in the fourth quarter of 2022, compared to 4.18% in the preceding quarter, and 3.75% in the fourth quarter a year ago. The interest accretion on acquired loans totaled $267,000 and resulted in a six basis-point increase in the NIM during the fourth quarter of 2022, compared to $392,000 and a nine basis-point increase in the NIM during the preceding quarter. Average yields on interest earning assets for the fourth quarter increased to 4.72% from 3.99% a year ago. For the year, the NIM expanded 18 basis points to 4.03%, compared to the same period one year earlier.

    Eagle’s fourth quarter revenues decreased modestly to $25.1 million, compared to $25.3 million in the preceding quarter and increased 15.2% compared to $21.8 million in the fourth quarter a year ago. For the year, revenues were $93.8 million, compared to $94.3 million in 2021.

    Net interest income, before the loan loss provision, decreased 1.5% to $17.6 million in the fourth quarter, compared to $17.9 million in the third quarter of 2022, and increased 46.2% compared to $12.0 million in the fourth quarter of 2021. For the year, net interest income, before the loan loss provision, increased 36.0% to $63.3 million, compared to $46.5 million in 2021.

    Eagle’s total noninterest income was $7.4 million in the fourth quarter of 2022, which was unchanged compared to the preceding quarter, and a 23.3% decrease compared to $9.7 million in the fourth quarter a year ago. Net mortgage banking, the largest component of noninterest income, totaled $3.3 million in the fourth quarter of 2022, compared to $4.4 million in the preceding quarter and $7.7 million in the fourth quarter a year ago. Noninterest income includes $2.1 million for the fourth quarter of 2022, compared to $624,000 for the fourth quarter of 2021 related to commodity sales income from Eagle’s subsidiary Western Financial Services (“WFS”). WFS facilitates deferred payment contracts for customers that produce agricultural products. The corresponding commodity sales expense is included in noninterest expense. For the year 2022, noninterest income decreased 36.2% to $30.5 million, compared to $47.8 million in 2021. Net mortgage banking decreased 52.5% to $19.5 million in 2022, compared to $41.0 million in 2021. Decreases in net mortgage banking were largely driven by reduced mortgage volumes. Noninterest income includes $4.3 million for 2022, compared to $1.6 million for 2021 related to commodity sales income for WFS.

    Fourth quarter noninterest expense decreased 1.7% to $20.3 million, compared to $20.7 million in the preceding quarter and increased 6.2% compared to $19.1 million in the fourth quarter a year ago. Noninterest expense includes commodity sales expense for WFS of $2.1 million for the fourth quarter of 2022, compared to $624,000 for the fourth quarter of 2021. For the year, noninterest expense increased to $78.0 million, compared to $74.2 million in 2021. Salaries and employee benefits expense were down overall due to lower commissions for residential mortgage originations. However, acquisition costs were $2.3 million in 2022 compared to $761,000 in 2021. In addition, noninterest expense includes commodity sales expense for WFS of $4.3 million for 2022, compared to $1.6 million for 2021.

    For the fourth quarter of 2022, the income tax provision totaled $787,000, for an effective tax rate of 17.8%, compared to $1.0 million in the preceding quarter, and $632,000 in the fourth quarter of 2021.

    Credit Quality

    The loan loss provision was $347,000 in the fourth quarter of 2022, compared to $517,000 in the preceding quarter and $285,000 in the fourth quarter a year ago. The allowance for loan losses represented 180.0% of nonperforming loans at December 31, 2022, compared to 306.4% three months earlier and 177.1% a year earlier. Nonperforming loans were $7.8 million at December 31, 2022, compared to $4.5 million at September 30, 2022, and $7.1 million a year earlier.  

    Eagle had no other real estate owned and other repossessed assets on its books at December 31, 2022, or at September 30, 2022. This compared to $4,000 at December 31, 2021.

    Net loan charge-offs totaled $197,000 in the fourth quarter of 2022, compared to net loan recoveries of $8,000 in the preceding quarter and net loan recoveries of $15,000 in the fourth quarter a year ago. The allowance for loan losses was $14.0 million, or 1.03% of total loans, at December 31, 2022, compared to $13.9 million, or 1.06% of total loans, at September 30, 2022, and $12.5 million, or 1.34% of total loans, a year ago.  

    Capital Management

    The ratio of tangible common shareholders’ equity (shareholders’ equity, less goodwill and core deposit intangible) to tangible assets (total assets, less goodwill and core deposit intangible) decreased to 6.10% at December 31, 2022 from 9.49% a year ago and increased from 5.77% three months earlier. Shareholders’ equity has been impacted by an accumulated other comprehensive loss related to securities available-for-sale. These unrealized losses are primarily a result of rapid increases in interest rates. As of December 31, 2022, the Bank’s regulatory capital was in excess of all applicable regulatory requirements and is deemed well capitalized. The Bank’s Tier 1 capital to adjusted total average assets was 9.82% as of December 31, 2022.

    About the Company

    Eagle Bancorp Montana, Inc. is a bank holding company headquartered in Helena, Montana, and is the holding company of Opportunity Bank of Montana, a community bank established in 1922 that serves consumers and small businesses in Montana through 32 banking offices. Additional information is available on the Bank’s website at www.opportunitybank.com. The shares of Eagle Bancorp Montana, Inc. are traded 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," “will” "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, mergers, growth and operating strategies; statements regarding the current global COVID-19 pandemic, 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 and political events, either nationally or in our market areas, that are worse than expected; the duration and impact of the COVID-19 pandemic, including but not limited to vaccine efficacy and immunization rates, new variants, steps taken by governmental and other authorities to contain, mitigate and combat the pandemic, adverse effects on our employees, customers and third-party service providers, the increase in cyberattacks in the current work-from-home environment, the ultimate extent of the impacts on our business, financial position, results of operations, liquidity and prospects, continued deterioration in general business and economic conditions could adversely affect our revenues and the values of our assets and liabilities, lead to a tightening of credit and increase stock price volatility, and potential impairment charges; competition among depository and other financial institutions; loan demand or residential and commercial real estate values in Montana; the concentration of our business in Montana; our ability to continue to increase and manage our commercial real estate, commercial business and agricultural loans; the costs and effects of legal, compliance and regulatory actions, changes and developments, including the initiation and resolution of legal proceedings (including any securities, bank operations, consumer or employee litigation); 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 that lead to impairment in the value of our investment securities and goodwill; other economic, governmental, competitive, regulatory and technological factors that may affect our operations; our ability to implement new technologies and maintain secure and reliable technology systems; cyber incidents, or theft or loss of Company or customer data or money; our ability to appropriately address social, environmental, and sustainability concerns that may arise from our business activities; the effect of our recent acquisitions, including the failure to achieve expected revenue growth and/or expense savings, the failure to effectively integrate their operations, the outcome of any legal proceedings and the diversion of management time on issues related to the integration.

    Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. All information set forth in this press release is current as of the date of this release and the company undertakes no duty or obligation to update this information.

    Use of Non-GAAP Financial Measures

    In addition to results presented in accordance with generally accepted accounting principles utilized in the United States, or GAAP, the Financial Ratios and Other Data contains non-GAAP financial measures. Non-GAAP disclosures include: 1) core efficiency ratio, 2) tangible book value per share, 3) tangible common equity to tangible assets, 4) earnings per diluted share, excluding acquisition costs and related taxes and 5) return on average assets, excluding acquisition costs and related taxes. The Company uses these non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and performance trends, and to enhance investors’ overall understanding of such financial performance. In particular, the use of tangible book value per share and tangible common equity to tangible assets is prevalent among banking regulators, investors and analysts.

    The numerator for the core efficiency ratio is calculated by subtracting acquisition costs and intangible asset amortization from noninterest expense. Tangible assets and tangible common shareholders’ equity are calculated by excluding intangible assets from assets and shareholders’ equity, respectively. For these financial measures, our intangible assets consist of goodwill and core deposit intangible. Tangible book value per share is calculated by dividing tangible common shareholders’ equity by the number of common shares outstanding. We believe that this measure is consistent with the capital treatment by our bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios and present this measure to facilitate the comparison of the quality and composition of our capital over time and in comparison, to our competitors.

    Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. Further, the non-GAAP financial measure of tangible book value per share should not be considered in isolation or as a substitute for book value per share or total shareholders’ equity determined in accordance with GAAP, and may not be comparable to a similarly titled measure reported by other companies. Reconciliation of the GAAP and non-GAAP financial measures are presented below.



    Balance Sheet       
    (Dollars in thousands, except per share data)  (Unaudited)
          December 31,September 30,December 31,
           2022  2022  2021 
             
    Assets:       
     Cash and due from banks   $19,321 $22,154 $10,938 
     Interest bearing deposits in banks   2,490  3,043  43,669 
     Federal funds sold     -  -  6,827 
     Total cash and cash equivalents   21,811  25,197  61,434 
     Securities available-for-sale    349,495  351,949  271,262 
     Federal Home Loan Bank ("FHLB") stock   5,089  2,939  1,702 
     Federal Reserve Bank ("FRB") stock   4,131  4,206  2,974 
     Mortgage loans held-for-sale, at fair value   8,250  24,408  25,819 
     Loans:       
        Real estate loans:      
           Residential 1-4 family    135,947  137,798  101,180 
           Residential 1-4 family construction   59,756  57,467  45,635 
           Commercial real estate    539,070  506,716  410,568 
           Commercial construction and development  151,145  145,300  92,403 
           Farmland     136,334  129,827  67,005 
        Other loans:       
           Home equity     74,271  67,409  51,748 
           Consumer     27,609  27,703  18,455 
           Commercial     127,255  130,975  101,535 
           Agricultural     104,036  110,633  46,335 
           Unearned loan fees    (1,745) (1,674) (1,725)
      Total loans     1,353,678  1,312,154  933,139 
     Allowance for loan losses    (14,000) (13,850) (12,500)
     Net loans     1,339,678  1,298,304  920,639 
     Accrued interest and dividends receivable   11,284  10,778  5,751 
     Mortgage servicing rights, net    15,412  15,141  13,693 
     Assets held-for-sale, at fair value   1,305  2,041  - 
     Premises and equipment, net    84,323  79,374  67,266 
     Cash surrender value of life insurance, net   47,724  45,845  36,474 
     Goodwill     34,740  34,740  20,798 
     Core deposit intangible, net    7,459  7,895  1,780 
     Other assets     17,683  21,103  6,334 
     Total assets    $1,948,384 $1,923,920 $1,435,926 
             
    Liabilities:       
     Deposit accounts:       
           Noninterest bearing    468,955  507,034  368,846 
           Interest bearing     1,166,317  1,167,216  853,703 
     Total deposits    1,635,272  1,674,250  1,222,549 
     Accrued expenses and other liabilities   26,458  23,748  21,779 
     FHLB advances and other borrowings   69,394  15,600  5,000 
     Other long-term debt, net    58,844  59,048  29,869 
     Total liabilities    1,789,968  1,772,646  1,279,197 
             
    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; 20,000,000 shares authorized;   
     8,507,429, 8,507,429 and 7,110,833 shares issued; 8,006,033,   
     7,986,890 and 6,794,811 shares outstanding at December 31, 2022,   
     September 30, 2022 and December, 2021, respectively 85  85  71 
     Additional paid-in capital    109,164  109,488  80,832 
     Unallocated common stock held by Employee Stock Ownership Plan (5,156) (5,300) (5,729)
     Treasury stock, at cost (501,396, 520,539, and 316,022 shares at   
     December 31, 2022, September 30, 2022 and December 31, 2021, respectively)     (11,343) (11,627) (7,321)
     Retained earnings     92,023  89,502  85,383 
     Accumulated other comprehensive (loss) income, net of tax (26,357) (30,874) 3,493 
     Total shareholders' equity   158,416  151,274  156,729 
     Total liabilities and shareholders' equity $1,948,384 $1,923,920 $1,435,926 
             



    Income Statement   (Unaudited)  (Unaudited)
    (Dollars in thousands, except per share data)  Three Months Ended Years Ended
           December 31,September 30,December 31, December 31,
            2022 2022 2021  2022 2021
    Interest and dividend income:        
     Interest and fees on loans  $17,420$16,665$11,474 $60,353$45,134
     Securities available-for-sale   2,716 2,555 1,249  8,579 4,238
     FRB and FHLB dividends   142 63 61  302 255
     Other interest income   22 59 30  228 120
      Total interest and dividend income   20,300 19,342 12,814  69,462 49,747
    Interest expense:         
     Interest expense on deposits   1,673 717 356  3,124 1,474
     FHLB advances and other borrowings   357 136 23  514 175
     Other long-term debt   657 602 390  2,512 1,558
      Total interest expense   2,687 1,455 769  6,150 3,207
    Net interest income    17,613 17,887 12,045  63,312 46,540
    Loan loss provision    347 517 285  2,001 861
      Net interest income after loan loss provision  17,266 17,370 11,760  61,311 45,679
                 
    Noninterest income:        
     Service charges on deposit accounts   445 498 329  1,668 1,213
     Mortgage banking, net   3,306 4,447 7,675  19,489 41,035
     Interchange and ATM fees   707 594 493  2,375 1,982
     Appreciation in cash surrender value of life insurance  287 291 209  1,035 721
     Commodity sales income   2,147 1,171 624  4,279 1,586
     Other noninterest income   555 416 385  1,653 1,232
      Total noninterest income   7,447 7,417 9,715  30,499 47,769
                 
    Noninterest expense:        
     Salaries and employee benefits   11,010 11,699 11,673  44,521 48,766
     Occupancy and equipment expense   2,160 1,946 1,702  7,601 6,448
     Data processing   1,367 1,964 1,369  5,995 5,035
     Advertising    367 464 426  1,419 1,276
     Amortization    439 333 142  1,334 573
     Loan costs    412 491 610  2,036 2,736
     FDIC insurance premiums   229 93 89  559 332
     Professional and examination fees   371 420 356  1,469 1,756
     Acquisition costs   - 103 726  2,296 761
     Commodity sales expense   2,147 1,171 624  4,279 1,586
     Other noninterest expense   1,802 1,980 1,399  6,453 4,897
      Total noninterest expense   20,304 20,664 19,116  77,962 74,166
                 
    Income before provision for income taxes   4,409 4,123 2,359  13,848 19,282
    Provision for income taxes   787 1,031 632  3,147 4,863
    Net income    $3,622$3,092$1,727 $10,701$14,419
                 
    Basic earnings per share  $0.47$0.40$0.26 $1.45$2.17
    Diluted earnings per share  $0.47$0.40$0.26 $1.45$2.17
                 
    Basic weighted average shares outstanding   7,776,145 7,793,485 6,543,192  7,376,275 6,653,935
                 
    Diluted weighted average shares outstanding   7,777,552 7,808,050 6,563,512  7,386,253 6,655,735
                 



    ADDITIONAL FINANCIAL INFORMATION (Unaudited) 
    (Dollars in thousands, except per share data)Three Months Ended or Years Ended
       December 31,September 30,December 31,
        2022  2022  2021 
          
    Mortgage Banking Activity (For the quarter):   
     Net gain on sale of mortgage loans$2,965 $4,192 $9,825 
     Net change in fair value of loans held-for-sale and derivatives (509) (378) (2,439)
     Mortgage servicing income, net 850  633  289 
      Mortgage banking, net$3,306 $4,447 $7,675 
          
    Mortgage Banking Activity (Year-to-date):   
     Net gain on sale of mortgage loans$18,610  $46,086 
     Net change in fair value of loans held-for-sale and derivatives (1,842)  (5,443)
     Mortgage servicing income, net 2,721   392 
      Mortgage banking, net$19,489  $41,035 
          
    Performance Ratios (For the quarter):   
     Return on average assets 0.75% 0.65% 0.48%
     Return on average equity 9.38% 7.51% 4.37%
     Yield on average interest earning assets 4.72% 4.52% 3.99%
     Cost of funds  0.85% 0.47% 0.35%
     Net interest margin 4.10% 4.18% 3.75%
     Core efficiency ratio* 79.27% 79.94% 83.86%
          
    Performance Ratios (Year-to-date):   
     Return on average assets 0.60%  1.06%
     Return on average equity 6.87%  9.18%
     Yield on average interest earning assets 4.42%  4.11%
     Cost of funds  0.54%  0.39%
     Net interest margin 4.03%  3.85%
     Core efficiency ratio* 79.24%  77.23%
          
    * The core efficiency ratio is a non-GAAP ratio that is calculated by dividing non-interest expense, exclusive of acquisition
    costs and intangible asset amortization, by the sum of net interest income and non-interest income.  
          
    ADDITIONAL FINANCIAL INFORMATION   
    (Dollars in thousands, except per share data)   
          
    Asset Quality Ratios and Data:As of or for the Three Months Ended
       December 31,September 30,December 31,
        2022  2022  2021 
          
     Nonaccrual loans $2,200 $2,534 $4,835 
     Loans 90 days past due and still accruing 1,076  874  - 
     Restructured loans, net 4,502  1,112  2,224 
      Total nonperforming loans 7,778  4,520  7,059 
     Other real estate owned and other repossessed assets -  -  4 
      Total nonperforming assets$7,778 $4,520 $7,063 
          
     Nonperforming loans / portfolio loans 0.57% 0.34% 0.76%
     Nonperforming assets / assets 0.40% 0.23% 0.49%
     Allowance for loan losses / portfolio loans 1.03% 1.06% 1.34%
     Allowance / nonperforming loans 179.99% 306.42% 177.08%
     Gross loan charge-offs for the quarter$216 $6 $2 
     Gross loan recoveries for the quarter$19 $14 $17 
     Net loan charge-offs (recoveries) for the quarter$197 $(8)$(15)
          
          
       December 31,September 30,December 31,
        2022  2022  2021 
    Capital Data (At quarter end):   
     Book value per share$19.79 $18.94 $23.07 
     Tangible book value per share**$14.52 $13.60 $19.74 
     Shares outstanding 8,006,033  7,986,890  6,794,811 
     Tangible common equity to tangible assets*** 6.10% 5.77% 9.49%
          
    Other Information:    
     Average investment securities for the quarter$348,267 $378,680 $262,736 
     Average investment securities year-to-date$336,779 $332,950 $215,978 
     Average loans for the quarter ****$1,345,776 $1,301,358 $942,783 
     Average loans year-to-date ****$1,194,788 $1,144,459 $914,804 
     Average earning assets for the quarter$1,705,349 $1,699,027 $1,274,817 
     Average earning assets year-to-date$1,572,106 $1,527,692 $1,209,715 
     Average total assets for the quarter$1,934,002 $1,913,710 $1,433,003 
     Average total assets year-to-date$1,768,919 $1,713,892 $1,357,249 
     Average deposits for the quarter$1,655,298 $1,656,228 $1,215,046 
     Average deposits year-to-date$1,514,158 $1,467,111 $1,138,608 
     Average equity for the quarter$154,409 $164,592 $158,208 
     Average equity year-to-date$155,655 $156,071 $157,014 
          
          
    ** The tangible book value per share is a non-GAAP ratio that is calculated by dividing shareholders' equity, 
    less goodwill and core deposit intangible, by common shares outstanding.   
    *** The tangible common equity to tangible assets is a non-GAAP ratio that is calculated by dividing shareholders' 
    equity, less goodwill and core deposit intangible, by total assets, less goodwill and core deposit intangible. 
    **** Includes loans held for sale   



    Reconciliation of Non-GAAP Financial Measures     
               
    Core Efficiency Ratio (Unaudited)  (Unaudited)
    (Dollars in thousands)Three Months Ended Years Ended
         December 31,September 30,December 31, December 31,
          2022  2022  2021   2022  2021 
    Calculation of Core Efficiency Ratio:      
     Noninterest expense$20,304 $20,664 $19,116  $77,962 $74,166 
     Acquisition costs -  (103) (726)  (2,296) (761)
     Intangible asset amortization (439) (333) (142)  (1,334) (573)
      Core efficiency ratio numerator 19,865  20,228  18,248   74,332  72,832 
               
     Net interest income 17,613  17,887  12,045   63,312  46,540 
     Noninterest income 7,447  7,417  9,715   30,499  47,769 
      Core efficiency ratio denominator 25,060  25,304  21,760   93,811  94,309 
               
     Core efficiency ratio (non-GAAP) 79.27% 79.94% 83.86%  79.24% 77.23%
               



    Tangible Book Value and Tangible Assets (Unaudited)
    (Dollars in thousands, except per share data) December 31,September 30,December 31,
           2022  2022  2021 
    Tangible Book Value:      
     Shareholders' equity  $158,416 $151,274 $156,729 
     Goodwill and core deposit intangible, net  (42,199) (42,635) (22,578)
      Tangible common shareholders' equity (non-GAAP)$116,217 $108,639 $134,151 
             
     Common shares outstanding at end of period 8,006,033  7,986,890  6,794,811 
             
     Common shareholders' equity (book value) per share (GAAP)$19.79 $18.94 $23.07 
             
     Tangible common shareholders' equity (tangible book value)   
      per share (non-GAAP)  $14.52 $13.60 $19.74 
             
    Tangible Assets:      
     Total assets   $1,948,384 $1,923,920 $1,435,926 
     Goodwill and core deposit intangible, net  (42,199) (42,635) (22,578)
      Tangible assets (non-GAAP) $1,906,185 $1,881,285 $1,413,348 
             
     Tangible common shareholders' equity to tangible assets   
      (non-GAAP)    6.10% 5.77% 9.49%
             



    Earnings Per Diluted Share, Excluding Acquisition Costs and Related Taxes    (Unaudited) (Unaudited)
    (Dollars in thousands, except per share data)Three Months Ended Years Ended
         December 31,September 30,December 31,December 31,
          2022 2022  2021   2022  2021 
               
    Net interest income after loan loss provision$17,266$17,370 $11,760  $61,311 $45,679 
    Noninterest income   7,447 7,417  9,715   30,499  47,769 
               
    Noninterest expense   20,304 20,664  19,116   77,962  74,166 
    Acquisition costs     - (103) (726)  (2,296) (761)
    Noninterest expense, excluding acquisition costs (non-GAAP) 20,304 20,561  18,390   75,666  73,405 
               
    Income before income taxes, excluding acquisition costs 4,409 4,226  3,085   16,144  20,043 
    Provision for income taxes, excluding acquisition costs      
    related taxes (non-GAAP)    787 1,057  827   3,669  5,055 
    Net Income, excluding acquisition costs and related taxes (non-GAAP)$3,622$3,169 $2,258  $12,475 $14,988 
               
    Diluted earnings per share (GAAP) $0.47$0.40 $0.26  $1.45 $2.17 
    Diluted earnings per share, excluding acquisition costs and related      
    taxes (non-GAAP)   $0.47$0.41 $0.34  $1.69 $2.25 
               



    Return on Average Assets, Excluding Acquisition Costs and Related Taxes(Unaudited) 
    (Dollars in thousands)  December 31,September 30,December 31,
          2022  2022  2021  
    For the quarter:      
     Net income, excluding acquisition costs and related taxes (non-GAAP)*$3,622 $3,169 $2,258  
     Average total assets quarter-to-date  $1,934,002 $1,913,710 $1,433,003  
     Return on average assets, excluding acquisition costs and related taxes (non-GAAP)    0.75% 0.66% 0.63% 
             
    Year-to-date:      
     Net income, excluding acquisition costs and related taxes (non-GAAP)*$12,475 $8,801 $14,988  
     Average total assets year-to-date  $1,768,919 $1,713,892 $1,357,249  
     Return on average assets, excluding acquisition costs and related taxes (non-GAAP)    0.71% 0.68% 1.10% 
             
    * See Earnings Per Diluted Share, Excluding Acquisition Costs and Related Taxes table for GAAP to non-GAAP reconciliation. 
             

     


    Contacts:  Laura F. Clark, President and CEO
       (406) 457-4007
       Miranda J. Spaulding, SVP and CFO
       (406) 441-5010


     


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