EBMT Eagle Bancorp Montana Inc

Eagle Bancorp Montana, Inc. (NASDAQ: EBMT), (the “Company,” “Eagle”), the holding company of Opportunity Bank of Montana (the “Bank”), today reported net income of $1.7 million, or $0.22 per diluted share, in the second quarter of 2024, compared to $1.9 million, or $0.24 per diluted share, in the preceding quarter, and $2.0 million, or $0.26 per diluted share, in the second quarter of 2023. In the first six months of 2024, net income was $3.6 million, or $0.46 per diluted share, compared to $5.3 million, or $0.67 per diluted share, in the first six months of 2023.

Eagle’s board of directors increased its quarterly cash dividend to $0.1425 per share on July 22, 2024. The dividend will be payable September 6, 2024, to shareholders of record August 16, 2024. The current dividend represents an annualized yield of 4.27% based on recent market prices.

“We produced solid second quarter results, fueled by disciplined loan growth, pristine credit quality metrics and net interest margin expansion, compared to the previous quarter,” said Laura F. Clark, President and CEO. “We continue to attract high quality loans, achieving loan growth of 6.8% year-over-year, even in the current rate environment. Additionally, the increase in loan yields more than offset the increase in funding costs, contributing to net interest margin expansion for the second consecutive quarter. We are one of three publicly traded financial institutions based in Montana, and with our strong deposit franchise and healthy capital levels we are well positioned to continue to grow in our markets.”

Second Quarter 2024 Highlights (at or for the three-month period ended June 30, 2024, except where noted):

• Net income was $1.7 million, or $0.22 per diluted share, in the second quarter of 2024, compared to $1.9 million, or $0.24 per diluted share, in the preceding quarter, and $2.0 million, or $0.26 per diluted share, in the second quarter a year ago.
• Net interest margin (“NIM”) was 3.41% in the second quarter of 2024, an eight basis point improvement compared to 3.33% in the preceding quarter, and a six basis point contraction compared to 3.47% in the second quarter a year ago.
• Revenues (net interest income before the provision for credit losses, plus noninterest income) were $19.9 million in the second quarter of 2024, compared to $19.2 million in the preceding quarter and $21.5 million in the second quarter a year ago.
• The accretion of the loan purchase discount into loan interest income from acquisitions was $304,000 in the second quarter of 2024, compared to accretion on purchased loans from acquisitions of $118,000 in the preceding quarter.
• Total loans increased 6.8% to $1.52 billion, at June 30, 2024, compared to $1.42 billion a year earlier, and increased 1.3% compared to $1.50 billion at March 31, 2024.
• Total deposits increased 2.6% to $1.62 billion at June 30, 2024, compared to $1.58 billion a year earlier, and decreased 1.0% compared to $1.64 billion at March 31, 2024.
• The allowance for credit losses represented 1.11% of portfolio loans and 330.8% of nonperforming loans at June 30, 2024, compared to 1.09% of portfolio loans and 156.7% of nonperforming loans at June 30, 2023.
• The Company’s available borrowing capacity was approximately $374.5 million at June 30, 2024.

				June 30, 2024
(Dollars in thousands)				Borrowings Outstanding		Remaining Borrowing Capacity
Federal Home Loan Bank advances				$	195,050	$	245,326
Federal Reserve Bank discount window					-		29,222
Federal Reserve Bank Term Funding Program					20,000		-
Correspondent bank lines of credit					-		100,000
Total				$	215,050	$	374,548

• The Company paid a quarterly cash dividend in the second quarter of $0.14 per share on June 7, 2024, to shareholders of record May 17, 2024.

Balance Sheet Results

Eagle’s total assets increased 3.7% to $2.10 billion at June 30, 2024, compared to $2.02 billion a year ago, and increased 1.1% compared to $2.08 billion three months earlier. The investment securities portfolio totaled $306.9 million at June 30, 2024, compared to $326.0 million a year ago, and $311.2 million at March 31, 2024.

Eagle originated $60.6 million in new residential mortgages during the quarter and sold $53.2 million in residential mortgages, with an average gross margin on sale of mortgage loans of approximately 3.01%. This production compares to residential mortgage originations of $50.4 million in the preceding quarter with sales of $43.6 million and an average gross margin on sale of mortgage loans of approximately 3.25%. Mortgage volumes remain low as rates have continued to be elevated relative to rates on existing mortgages.

Total loans increased $96.0 million, or 6.8%, compared to a year ago, and $20.4 million, or 1.3%, from three months earlier. Commercial real estate loans increased 8.6% to $627.3 million at June 30, 2024, compared to $577.7 million a year earlier. Commercial real estate loans were comprised of 67.1% non-owner occupied and 32.9% owner occupied at June 30, 2024. Agricultural and farmland loans increased 6.4% to $279.5 million at June 30, 2024, compared to $262.8 million a year earlier, as the Company continues to build expertise in agricultural lending. Residential mortgage loans increased 17.7% to $157.1 million, compared to $133.4 million a year earlier. Commercial loans increased 11.3% to $143.6 million, compared to $129.1 million a year ago. Commercial construction and development loans decreased 13.3% to $137.4 million, compared to $158.5 million a year ago. Home equity loans increased 16.0% to $93.2 million, residential construction loans increased 1.4% to $50.2 million, and consumer loans decreased 3.1% to $29.1 million, compared to a year ago.

“Our deposit mix continues to shift towards higher yielding deposits due to the higher interest rate environment. However, the increase in our overall cost of deposits has slowed, and we anticipate deposit rates will continue to stabilize over the next several quarters,” said Miranda Spaulding, CFO.

Total deposits increased 2.6% to $1.62 billion at June 30, 2024, compared to $1.58 billion at June 30, 2023, and decreased 1.0% compared to $1.64 billion at March 31, 2024. Noninterest-bearing checking accounts represented 24.7%, interest-bearing checking accounts represented 13.0%, savings accounts represented 13.6%, money market accounts comprised 22.2% and time certificates of deposit made up 26.5% of the total deposit portfolio at June 30, 2024. Time certificates of deposit include $26.2 million in brokered certificates at June 30, 2024, compared to $15.1 million at June 30, 2023, and $50.0 million at March 31, 2024. The average cost of total deposits was 1.70% in the second quarter of 2024, compared to 1.62% in the preceding quarter and 1.05% in the second quarter of 2023. The estimated amount of uninsured deposits at both June 30, 2024 and March 31, 2024, was approximately $284.0 million, or 17% of total deposits.

Shareholders’ equity was $170.2 million at June 30, 2024, compared to $162.7 million a year earlier and $168.9 million three months earlier. Book value per share was $21.23 at June 30, 2024, compared to $20.37 a year earlier and $21.07 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 $16.25 at June 30, 2024, compared to $15.19 a year earlier and $16.05 three months earlier.  

Operating Results

“Our NIM expanded eight basis points during the second quarter compared to the preceding quarter, boosted by growth and higher yields on interest earning assets in addition to a slowdown in cost of funds expansion,” said Clark. “We anticipate continued improvement in our cost of funds as we continue through this rate cycle.”

Eagle’s NIM was 3.41% in the second quarter of 2024, compared to 3.33% in the preceding quarter, and a six basis-point contraction compared to 3.47% in the second quarter a year ago. The interest accretion on acquired loans totaled $304,000 and resulted in a seven basis-point increase in the NIM during the second quarter of 2024, compared to $118,000 and a three basis-point increase in the NIM during the preceding quarter. Funding costs for the second quarter of 2024 were 2.78%, compared to 2.67% in the first quarter of 2024 and 2.06% in the second quarter of 2023. Average yields on interest earning assets for the second quarter of 2024 increased to 5.64%, compared to 5.47% in the first quarter of 2024 and 5.06% in the second quarter a year ago. For the first six months of 2024, the NIM was 3.37% compared to 3.66% for the first six months of 2023.

Net interest income, before the provision for credit losses, increased 2.7% to $15.6 million in the second quarter of 2024, compared to $15.2 million in the first quarter of 2024, and increased 2.4% compared to $15.3 million in the second quarter of 2023. Year-to-date, net interest income decreased 2.7% to $30.8 million, compared to $31.7 million in the same period one year earlier.

Revenues for the second quarter of 2024 increased 3.8% to $19.9 million, compared to $19.2 million in the preceding quarter and decreased 7.3% compared to $21.5 million in the second quarter a year ago. In the first six months of 2024, revenues were $39.1 million, compared to $42.6 million in the first six months of 2023. The decrease compared to the first six months a year ago was largely due to lower volumes in mortgage banking activity.

Total noninterest income increased 8.0% to $4.3 million in the second quarter of 2024, compared to $4.0 million in the preceding quarter, and decreased 31.2% compared to $6.2 million in the second quarter a year ago. Net mortgage banking income, the largest component of noninterest income, totaled $2.4 million in the second quarter of 2024, compared to $2.2 million in the preceding quarter and $3.9 million in the second quarter a year ago. This decrease compared to the second quarter a year ago was largely driven by a decline in net gain on sale of mortgage loans. This was impacted by mortgage margin compression and lower loan volumes. In the first six months of 2024, noninterest income decreased 24.4% to $8.2 million, compared to $10.9 million in the first six months of 2023. Net mortgage banking income decreased 33.6% to $4.6 million in the first six months of 2024, compared to $6.9 million in the first six months of 2023. These decreases were driven by a decline in net gain on sale of mortgage loans.

Eagle’s second quarter noninterest expense increased 1.6% to $17.3 million, compared to $17.0 million in the preceding quarter and decreased 7.9% compared to $18.8 million in the second quarter a year ago. Lower salaries and employee benefits contributed to the decrease compared to the year ago quarter. In the first six months of 2024, noninterest expense decreased 2.8% to $34.3 million, compared to $35.3 million in the first six months of 2023.

For the second quarter of 2024, the Company recorded an income tax expense of $444,000. This compared to an income tax expense of $370,000 in the preceding quarter and income tax expense of $344,000 in the second quarter of 2023. The effective tax rate for the second quarter of 2024 was 20.3%, compared to 14.6% for the second quarter of 2023. The year-to-date effective tax rate was 18.3% for 2024 compared to 20.9% for the same period in 2023.

Credit Quality

During the second quarter of 2024, Eagle recorded a provision for credit losses of $412,000. This compared to a $135,000 recapture to its provision for credit losses in the preceding quarter and a $319,000 provision for credit losses in the second quarter a year ago. The allowance for credit losses represented 330.8% of nonperforming loans at June 30, 2024, compared to 227.6% three months earlier and 156.7% a year earlier. Nonperforming loans were $5.1 million at June 30, 2024, $7.2 million at March 31, 2024, and $9.9 million a year earlier.

Net loan charge-offs totaled $2,000 in the second quarter of 2024, compared to net loan recoveries of $65,000 in the preceding quarter and net loan recoveries of $151,000 in the second quarter a year ago. The allowance for credit losses was $16.8 million, or 1.11% of total loans, at June 30, 2024, compared to $16.4 million, or 1.10% of total loans, at March 31, 2024, and $15.6 million, or 1.09% 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) was 6.33% at June 30, 2024, from 6.12% a year ago and 6.32% three months earlier. As of June 30, 2024, 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 9.92% as of June 30, 2024.

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 29 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 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 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; the emergence or continuation of widespread health emergencies or pandemics including the magnitude and duration 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; the impact of continuing adverse developments affecting the U.S. banking industry, including the associated impact of any regulatory changes or other mitigation efforts taken by governmental agencies in response 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. 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; competition among banks, financial holding companies and other traditional and non-traditional financial service providers; 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 including those that involve the Bank’s third-party vendors and service providers; 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 or future 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 financial measures include: 1) core efficiency ratio, 2) tangible book value per share and 3) tangible common equity to tangible assets. 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)
						June 30,			March 31,			June 30,
							2024			2024			2023
Assets:
	Cash and due from banks					$	22,361		$	19,479		$	21,878
	Interest bearing deposits in banks						1,401			1,438			1,116
		Total cash and cash equivalents					23,762			20,917			22,994
	Securities available-for-sale, at fair value						306,869			311,227			325,964
	Federal Home Loan Bank ("FHLB") stock						10,136			8,449			10,099
	Federal Reserve Bank ("FRB") stock						4,131			4,131			4,131
	Mortgage loans held-for-sale, at fair value						10,518			9,612			22,381
	Loans:
	Real estate loans:
	Residential 1-4 family						157,053			157,414			133,437
	Residential 1-4 family construction						50,228			45,026			49,516
	Commercial real estate						627,326			632,452			577,736
	Commercial construction and development						137,427			147,740			158,519
	Farmland						142,353			140,246			139,290
	Other loans:
	Home equity						93,213			90,418			80,333
	Consumer						29,118			29,677			30,065
	Commercial						143,641			137,640			129,084
	Agricultural						137,134			116,775			123,503
		Total loans					1,517,493			1,497,388			1,421,483
	Allowance for credit losses						(16,830	)		(16,410	)		(15,560	)
		Net loans					1,500,663			1,480,978			1,405,923
	Accrued interest and dividends receivable						13,195			12,038			11,194
	Mortgage servicing rights, net						15,614			15,738			15,501
	Assets held for sale, at cost						257			-			323
	Premises and equipment, net						98,397			97,643			88,760
	Cash surrender value of life insurance, net						48,529			48,218			47,520
	Goodwill						34,740			34,740			34,740
	Core deposit intangible, net						5,168			5,514			6,648
	Other assets						26,976			26,869			27,101
		Total assets				$	2,098,955		$	2,076,074		$	2,023,279
Liabilities:
	Deposit accounts:
	Noninterest bearing					$	400,113		$	408,781		$	432,463
	Interest bearing						1,218,752			1,226,818			1,145,904
		Total deposits					1,618,865			1,635,599			1,578,367
	Accrued expenses and other liabilities						35,804			34,950			32,002
	FHLB advances and other borrowings						215,050			177,540			191,260
	Other long-term debt, net						59,074			59,037			58,925
		Total liabilities					1,928,793			1,907,126			1,860,554
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 shares issued; 8,016,784, 8,016,784 and 7,988,132
	shares outstanding at June 30, 2024, March 31, 2024 and
	June 30, 2023, respectively						85			85			85
	Additional paid-in capital						108,962			108,893			109,345
	Unallocated common stock held by Employee Stock Ownership Plan						(4,297	)		(4,440	)		(4,870	)
	Treasury stock, at cost (490,645, 490,645 and 519,297 shares at
	June 30, 2024, March 31, 2024 and June 30, 2023, respectively)						(11,124	)		(11,124	)		(11,574	)
	Retained earnings						97,413			96,797			93,462
	Accumulated other comprehensive loss, net of tax						(20,877	)		(21,263	)		(23,723	)
		Total shareholders' equity					170,162			168,948			162,725
		Total liabilities and shareholders' equity				$	2,098,955		$	2,076,074		$	2,023,279

Income Statement									(Unaudited)						(Unaudited)
(Dollars in thousands, except per share data)							Three Months Ended								Six Months Ended
							June 30,		March 31,			June 30,			June 30,
								2024		2024			2023			2024		2023
Interest and dividend income:
	Interest and fees on loans						$	22,782	$	21,942		$	19,137		$	44,724	$	36,874
	Securities available-for-sale							2,631		2,724			2,949			5,355		5,792
	FRB and FHLB dividends							264		247			161			511		268
	Other interest income							145		29			25			174		46
		Total interest and dividend income						25,822		24,942			22,272			50,764		42,980
Interest expense:
	Interest expense on deposits							6,884		6,548			4,155			13,432		6,615
	FHLB advances and other borrowings							2,625		2,497			2,179			5,122		3,321
	Other long-term debt							681		683			674			1,364		1,352
		Total interest expense						10,190		9,728			7,008			19,918		11,288
Net interest income								15,632		15,214			15,264			30,846		31,692
Provision (recapture) for credit losses								412		(135	)		319			277		598
		Net interest income after provision (recapture) for credit losses						15,220		15,349			14,945			30,569		31,094
Noninterest income:
	Service charges on deposit accounts							428		400			527			828		866
	Mortgage banking, net							2,417		2,177			3,864			4,594		6,914
	Interchange and ATM fees							640		563			641			1,203		1,218
	Appreciation in cash surrender value of life insurance							320		288			503			608		783
	Net gain (loss) on sale of available-for-sale securities							-		-			2			-		(222	)
	Net gain on sale/disposal of premises and equipment							24		-			70			24		83
	Other noninterest income							440		524			597			964		1,233
		Total noninterest income						4,269		3,952			6,204			8,221		10,875
Noninterest expense:
	Salaries and employee benefits							10,273		9,718			11,084			19,991		20,777
	Occupancy and equipment expense							2,104		2,099			2,071			4,203		4,144
	Data processing							1,382		1,525			1,572			2,907		2,784
	Advertising							316		253			309			569		590
	Amortization							348		369			397			717		815
	Loan costs							412		398			464			810		909
	FDIC insurance premiums							284		299			393			583		561
	Professional and examination fees							423		484			592			907		1,076
	Other noninterest expense							1,765		1,888			1,908			3,653		3,667
		Total noninterest expense						17,307		17,033			18,790			34,340		35,323
Income before provision for income taxes								2,182		2,268			2,359			4,450		6,646
Provision for income taxes								444		370			344			814		1,389
Net income							$	1,738	$	1,898		$	2,015		$	3,636	$	5,257
Basic earnings per common share							$	0.22	$	0.24		$	0.26		$	0.46	$	0.67
Diluted earnings per common share							$	0.22	$	0.24		$	0.26		$	0.46	$	0.67
Basic weighted average shares outstanding								7,830,925		7,824,928			7,789,559			7,827,926		7,789,872
Diluted weighted average shares outstanding								7,845,272		7,835,304			7,793,410			7,840,288		7,792,937

ADDITIONAL FINANCIAL INFORMATION						(Unaudited)
(Dollars in thousands, except per share data)			Three or Six Months Ended
			June 30,			March 31,			June 30,
				2024			2024			2023
Mortgage Banking Activity (For the quarter):
	Net gain on sale of mortgage loans		$	1,600		$	1,414		$	2,757
	Net change in fair value of loans held-for-sale and derivatives			12			(173	)		324
	Mortgage servicing income, net			805			936			783
		Mortgage banking, net	$	2,417		$	2,177		$	3,864
Mortgage Banking Activity (Year-to-date):
	Net gain on sale of mortgage loans		$	3,014					$	4,960
	Net change in fair value of loans held-for-sale and derivatives			(161	)					305
	Mortgage servicing income, net			1,741						1,649
		Mortgage banking, net	$	4,594					$	6,914
Performance Ratios (For the quarter):
	Return on average assets			0.33	%		0.37	%		0.40	%
	Return on average equity			4.30	%		4.67	%		4.99	%
	Yield on average interest earning assets			5.64	%		5.47	%		5.06	%
	Cost of funds			2.78	%		2.67	%		2.06	%
	Net interest margin			3.41	%		3.33	%		3.47	%
	Core efficiency ratio*			85.22	%		86.95	%		85.68	%
Performance Ratios (Year-to-date):
	Return on average assets			0.35	%					0.53	%
	Return on average equity			4.49	%					6.49	%
	Yield on average interest earning assets			5.55	%					4.96	%
	Cost of funds			2.73	%					1.71	%
	Net interest margin			3.37	%					3.66	%
	Core efficiency ratio*			86.06	%					81.07	%
* 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
			June 30,			March 31,			June 30,
				2024			2024			2023
	Nonaccrual loans		$	4,012		$	5,231		$	9,561
	Loans 90 days past due and still accruing			1,076			1,979			369
		Total nonperforming loans		5,088			7,210			9,930
	Other real estate owned and other repossessed assets			4			-			-
		Total nonperforming assets	$	5,092		$	7,210		$	9,930
	Nonperforming loans / portfolio loans			0.34	%		0.48	%		0.70	%
	Nonperforming assets / assets			0.24	%		0.35	%		0.49	%
	Allowance for credit losses / portfolio loans			1.11	%		1.10	%		1.09	%
	Allowance for credit losses/ nonperforming loans			330.78	%		227.60	%		156.70	%
	Gross loan charge-offs for the quarter		$	12		$	1		$	55
	Gross loan recoveries for the quarter		$	10		$	66		$	206
	Net loan charge-offs (recoveries) for the quarter		$	2		$	(65	)	$	(151	)
			June 30,			March 31,			June 30,
				2024			2024			2023
Capital Data (At quarter end):
	Common shareholders' equity (book value) per share		$	21.23		$	21.07		$	20.37
	Tangible book value per share**		$	16.25		$	16.05		$	15.19
	Shares outstanding			8,016,784			8,016,784			7,988,132
	Tangible common equity to tangible assets***			6.33	%		6.32	%		6.12	%
Other Information:
	Average investment securities for the quarter		$	306,207		$	314,129		$	343,634
	Average investment securities year-to-date		$	310,168		$	314,129		$	344,330
	Average loans for the quarter ****		$	1,513,313		$	1,499,293		$	1,407,316
	Average loans year-to-date ****		$	1,506,303		$	1,499,293		$	1,387,153
	Average earning assets for the quarter		$	1,837,418		$	1,830,316		$	1,766,706
	Average earning assets year-to-date		$	1,833,867		$	1,830,316		$	1,745,870
	Average total assets for the quarter		$	2,077,448		$	2,066,579		$	1,998,957
	Average total assets year-to-date		$	2,072,013		$	2,066,579		$	1,973,167
	Average deposits for the quarter		$	1,625,882		$	1,625,770		$	1,580,343
	Average deposits year-to-date		$	1,625,826		$	1,625,770		$	1,592,879
	Average equity for the quarter		$	161,533		$	162,637		$	161,534
	Average equity year-to-date		$	162,084		$	162,637		$	161,910
** 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										Six Months Ended
					June 30,			March 31,			June 30,				June 30,
						2024			2024			2023				2024			2023
Calculation of Core Efficiency Ratio:
	Noninterest expense				$	17,307		$	17,033		$	18,790			$	34,340		$	35,323
	Intangible asset amortization					(348	)		(369	)		(397	)			(717	)		(815	)
		Core efficiency ratio numerator				16,959			16,664			18,393				33,623			34,508
	Net interest income					15,632			15,214			15,264				30,846			31,692
	Noninterest income					4,269			3,952			6,204				8,221			10,875
		Core efficiency ratio denominator				19,901			19,166			21,468				39,067			42,567
	Core efficiency ratio (non-GAAP)					85.22	%		86.95	%		85.68	%			86.06	%		81.07	%

Tangible Book Value and Tangible Assets						(Unaudited)
(Dollars in thousands, except per share data)						June 30,			March 31,			June 30,
							2024			2024			2023
Tangible Book Value:
	Shareholders' equity					$	170,162		$	168,948		$	162,725
	Goodwill and core deposit intangible, net						(39,908	)		(40,254	)		(41,388	)
		Tangible common shareholders' equity (non-GAAP)				$	130,254		$	128,694		$	121,337
	Common shares outstanding at end of period						8,016,784			8,016,784			7,988,132
	Common shareholders' equity (book value) per share (GAAP)					$	21.23		$	21.07		$	20.37
	Tangible common shareholders' equity (tangible book value)
		per share (non-GAAP)				$	16.25		$	16.05		$	15.19
Tangible Assets:
	Total assets					$	2,098,955		$	2,076,074		$	2,023,279
	Goodwill and core deposit intangible, net						(39,908	)		(40,254	)		(41,388	)
		Tangible assets (non-GAAP)				$	2,059,047		$	2,035,820		$	1,981,891
	Tangible common shareholders' equity to tangible assets
		(non-GAAP)					6.33	%		6.32	%		6.12	%

    

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