EBMT 10-K & 10-Q changes, risk factors and insider trading
Eagle Bancorp Montana, Inc. · Nasdaq · State Commercial Banks · CIK 1478454 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Expectations around Environmental, Social and Governance practices, as well as climate change, and related legislative and regulatory initiatives may result in additional risk and operational changes and expenditures that could significantly impact our business.”
New heading “Natural disasters, geopolitical events, public health crises and other catastrophic events beyond our control could adversely affect us.”
New heading “The adoption of artificial intelligence tools by us and our third‑party vendors and service providers may increase the risk of errors, omissions, unfair treatment or fraudulent behavior by our employees, clients or counterparties, or other third parties.”
New heading “We rely on dividends from the Bank for most of our revenue.”
New heading “Eagle uses models for business planning purposes that may not adequately predict future results.”
New heading “We could be subject to changes in tax laws, regulations and interpretations or challenges to our income tax provision.”
Removed heading “We may be impacted by the retirement of London Interbank Offered Rate (“LIBOR”) as a reference rate.”
Removed heading “We are subject to physical and financial risks associated with climate change and other weather and natural disaster impacts.”
Removed heading “The emergence or continuation of widespread health emergencies or pandemics could have a material adverse effect on our business, results of operations and financial condition, and such effects will depend on future developments, which are highly uncertain and are difficult to predict.”
Removed heading “We have identified a material weakness in our internal control over financial reporting. Failure to remediate, improve and maintain the quality of internal control over financial reporting could result in material misstatements in our financial statements and could materially and adversely affect our ability to provide timely and accurate financial information about the Company, which could harm our reputation and share price.”
Largest changes
“Unsuccessful remediation efforts could result in material misstatements in, or restatements of, the Company’s financial statements, could cause the Company to fail to meet its reporting obligations and/or could cause investors to lose confidence in the Company’s reported financial information, which would adversely affect the trading price of the Company’s common stock and harm the Company’s reputation. …”see in full comparison
“We have identified a material weakness in our internal control over financial reporting. Failure to remediate, improve and maintain the quality of internal control over financial reporting could result in material misstatements in our financial statements and could materially and adversely affect our ability to provide timely and accurate financial information about the Company, which could harm our reputation and share price.”see in full comparison
“Our adoption of artificial intelligence, including generative artificial intelligence, machine learning and similar tools and technologies that collect, aggregate, analyze or generate data or other materials or content (collectively, “AI”), for limited internal use has increased our efficiency, and we expect to continue to adopt such tools as appropriate. In addition, we expect our third‑party vendors and service providers to increasingly develop and incorporate AI into their product offerings faster than we are able to do so independently. …”see in full comparison
“It is currently expected that, during 2026, the Federal Open Market Committee of the Federal Reserve (“FOMC”) will continue to closely monitor interest rates, in part to manage the rate of inflation to its preferred level. In the fourth quarter of 2025, the FOMC decreased the target range for the federal funds rate to a range of 3.50 percent to 3.75 percent, following a series of significant increases beginning in 2022. If the FOMC further alters the targeted federal funds rates, overall interest rates likely will continue to change, which may impact the entire national economy. …”see in full comparison
“The emergence or continuation of widespread health emergencies or pandemics could have a material adverse effect on our business, results of operations and financial condition, and such effects will depend on future developments, which are highly uncertain and are difficult to predict.”see in full comparison
“Expectations around Environmental, Social and Governance practices, as well as climate change, and related legislative and regulatory initiatives may result in additional risk and operational changes and expenditures that could significantly impact our business.”see in full comparison
Full comparison: every changed paragraph (37)
Additionally, financial markets may be adversely affected by the current or anticipated impact of military conflict, including the recent military actions in Iran and the Middle East, escalating military tension between Russia and Ukraine, the Middle East, terrorism and other geopolitical events.
Our success depends, to a certain extent, upon global, domestic and local economic and political conditions, as well as governmental monetary policies. Conditions such as changes in interest rates, money supply, levels of employment and other factors beyond our control may have a negative impact on economic activity. Any contraction of economic activity, including an economic recession, may adversely affect our asset quality, deposit levels and loan demand and, therefore, our earnings. In particular, interest rates are highly sensitive to many factors that are beyond our control, including global, domestic and local economic conditions and the policies of various governmental and regulatory agencies and, specifically, the Federal Reserve. Throughout 2023 the Federal Open Market Committee (“FOMC”) raised the target range for the federal funds rate on four separate occasions, citing inflationary pressures. The last Federal Funds Target rate change occurred on July 26, 2023, and the FOMC has since adopted a cautious approach as inflationary pressures have moderated but remain uncertain. Forecasts for 2024 indicate potential interest rate reductions, but persistent inflation may either delay reductions or may call for further rate increases by the FOMC.
It is currently expected that, during 2026, the Federal Open Market Committee of the Federal Reserve (“FOMC”) will continue to closely monitor interest rates, in part to manage the rate of inflation to its preferred level. In the fourth quarter of 2025, the FOMC decreased the target range for the federal funds rate to a range of 3.50 percent to 3.75 percent, following a series of significant increases beginning in 2022. If the FOMC further alters the targeted federal funds rates, overall interest rates likely will continue to change, which may impact the entire national economy. Changes in interest rates directly impact our net interest income and also may affect the demand for loans and the value of our fixed-rate investment securities. These effects from interest rate changes or from other sustained economic stress or a recession, among other matters, could have a material adverse effect on our business, financial condition, liquidity and results of operations.
The tightening of the Federal Reserve’s monetary policies, including increases in the target range for the federal funds rate as well as the conclusion of the Federal Reserve’s tapering of asset purchases, together with ongoing economic and geopolitical instability, increases the risk of an economic recession. Although forecasts have varied, the potential of slowing economic growth and persistent inflation could lead to the contraction of the U.S. gross domestic output in 2024. Any such downturn, especially domestically and in the regions in which we operate, may adversely affect our asset quality, deposit levels, loan demand and results of operations.
We may be impacted by the retirement of London Interbank Offered Rate (“LIBOR”) as a reference rate.
Many of our lending products, securities, derivatives, and other financial transactions utilize a benchmark rate, such as LIBOR, to determine the applicable interest rate or payment amount. The U.K. Financial Conduct Authority and the ICE Benchmark Administration have announced that the publication of the most commonly used U.S. Dollar LIBOR tenors will cease to be provided or cease to be representative after June 30, 2023. The publication of all other LIBOR settings ceased to be provided or ceased to be representative as of December 31, 2021. The Adjustable Interest Rate (LIBOR) Act (LIBOR Act), enacted in March 2022, provides a statutory framework to replace U. S. Dollar LIBOR with a benchmark rate based on the Secured Overnight Financing Rate (“SOFR”) for contracts governed by U.S. law that have no fallbacks or fallbacks that would require the use of a poll or LIBOR-based rate, and in December 2022, the FRB adopted rules which identify different SOFR-based replacement rates for derivative contracts, for cash instruments such as floating-rate notes and preferred stock, for consumer loans, for certain government-sponsored enterprise contracts and for certain asset-backed securities. We continue to monitor market developments and regulatory updates related to the cessation of LIBOR. As the transition from LIBOR is ongoing, there continues to be uncertainty as to the ultimate effect of the transition on the financial markets for LIBOR-linked financial instruments.
The discontinuation of a benchmark rate, changes in a benchmark rate, or changes in market perceptions of the acceptability of a benchmark rate, including LIBOR, could, among other things, adversely affect the value of and return on certain of our financial instruments or products, result in changes to our risk exposures, or require renegotiation of previous transactions. In addition, any such discontinuation or changes, whether actual or anticipated, could result in market volatility, increased compliance, legal and operational costs, and risks associated with customer disclosures and contract negotiations. Although the LIBOR Act includes safe harbors if the FRB-identified SOFR-based replacement rate is selected, these safe harbors are untested. As a result, and despite the enactment of the LIBOR Act, for the most commonly used U.S. Dollar LIBOR settings, the use or selection of a successor rate could also expose us to risks associated with disputes with customers and other market participants in connection with implementing LIBOR fallback provisions.
Expectations around Environmental, Social and Governance practices, as well as climate change, and related legislative and regulatory initiatives may result in additional risk and operational changes and expenditures that could significantly impact our business.
Companies are facing increased scrutiny from customers, regulators and other stakeholders with respect to their environmental, social and governance ("ESG") practices and disclosures. Institutional investors, and investor advocacy groups, in particular, are increasingly focused on these matters, and expectations in many of these areas can vary widely. For example, certain federal and state laws and regulations related to ESG issues may include provisions that conflict with other laws and regulations, which may increase our costs or limit our ability to conduct business in certain jurisdictions. In particular, there is an increasing number of anti‑ESG initiatives in the United States that may conflict with other regulatory requirements or our various stakeholders’ expectations. Such divergent, sometimes conflicting, views on ESG‑related matters increase the risk that any action or lack thereof by the Company on such matters will be perceived negatively by some stakeholders. In addition, increased ESG related compliance costs could result in increases to our overall operational costs. Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards, and fluctuations in or conflicts among these standards, could negatively impact our reputation, ability to do business with certain partners, and our stock price. New government regulations could also result in new or more stringent forms of ESG oversight and expanding mandatory and voluntary reporting, diligence, and disclosure.
We are subject to physical and financial risks associated with climate change and other weather and natural disaster impacts.
TheIn addition to regulatory and investor expectations on environmental matters in general, the current and anticipated effects of climate change are creatingcreating, for some stakeholders, an increasing level of concern for the state of the global environment. As a result, political and social attention to the issue of climate change has increased. In recent years, governments across the world have entered into international agreements to attempt to reduce global temperatures, in part by limiting greenhouse gas emissions. AlthoughIn the U.S.United rejoinedStates, the Paris Agreement, effective as of February 19, 2021, and the U.S. Congress,certain state legislatures and federal and state regulatory agencies have continued to proposeproposed and advanceadvanced numerous legislative and regulatory initiatives seeking to mitigate the effects of climate change, eachsome of which conflict with other state or federal initiatives or sentiments. In addition to the challenges of managing conflicting expectations of legislatures, agencies, and regulators with respect to climate change, measures designed to mitigate or bring awareness to climate change may result in the imposition of taxes and fees, the required purchase of emission credits, and the implementation of significant operational changes, each of which may require usthe Company to expend significant capital and incur compliance, operating, maintenance and remediation costs. Given the lack of empirical data on the credit and other financial risks posed by climate change, it is impossible to predict how climate change may impact our financial condition and operations; however, as a banking organization, the physical effects of climate change on the Bank may present certain unique risks.risks to the Company. For example, weather disasters, shifts in local climates and other disruptions related to climate change may adversely affect the value of real properties securing our loans, which could diminish the value of our loan portfolio. Such events may also cause reductions in regional and local economic activity that may have an adverse effect on our customers, which could limit our ability to raise and invest capital in these areas and communities, each of which could have a material adverse effect on our financial condition and results of operations.
Natural disasters, geopolitical events, public health crises and other catastrophic events beyond our control could adversely affect us.
Natural disasters such as hurricanes, floods, tornados, wildfires, extreme weather conditions and other acts of nature, geopolitical events such as the recent military actions in Iran and the Middle East, those involving civil unrest, changes in government regimes, terrorism or military conflict, pandemics and other public health crises, and other catastrophic events could adversely affect our business operations and those of our customers, counterparties and service providers, and cause substantial damage and loss to real and personal property, including damage to or destruction of mortgaged properties or our own banking facilities and offices. Natural disasters, geopolitical events, public health crises and other catastrophic events, or concerns about the occurrence of any such events, could impair our borrowers’ ability to service their loans, decrease the level and duration of deposits by customers, erode the value of loan collateral, including mortgaged properties, result in an increase in the amount of our non‑performing loans and a higher level of non‑performing assets, including real estate owned, net charge‑offs and provision for loan losses, lead to other operational difficulties and impair our ability to manage our business, which could materially and adversely affect our business, financial condition, results of operations and the value of our common stock. We also could be adversely affected if our key personnel or a significant number of our employees were to become unavailable due to a public health crisis (such as an outbreak of a contagious disease), natural disaster, war, act of terrorism, accident or other reason. Additionally, financial markets may be adversely affected by the current or anticipated impact of military conflict, acts of terrorism or other geopolitical events.
The physical risks of climate change include discrete events, such as flooding, hurricanes, tornadoes, and wildfires, and longer-term shifts in climate patterns, such as extreme heat, sea level rise, and more frequent and prolonged drought. Physical risks may alter the Company’s strategic direction in order to mitigate certain financial risks. Our operations are located in Montana and are susceptible to severe weather events including severe droughts, wildfires, floods, severe winter storms and tornadoes. Any of these, or any other severe weather event, could cause disruption to our operations and could have a material adverse effect on our overall business, results of operations or financial condition. We have taken certain preemptive measures that we believe will mitigate these adverse effects; however, such measures cannot prevent the disruption that a catastrophic drought, wildfire, tornado or other severe weather event could cause to the markets that we serve and any resulting adverse impact on our customers, such as hindering our borrowers’ ability to timely repay their loans, diminishing the value of any collateral held by us, interrupting supply chains, causing significant property damage, causing us to incur additional expense or resulting in a loss of revenue, and affecting the stability of our deposit base. The severity and impact of future droughts, wildfires, floods, tornadoes and other weather-related events are difficult to predict and may be exacerbated by global climate change. Such events may also cause reductions in regional and local economic activity that may have an adverse effect on our customers, which could limit our ability to raise and invest capital in these areas and communities, each of which could have a material adverse effect on our financial condition and results of operations.
Climate change may worsen the frequency and severity of future droughts, wildfires, floods, tornadoes and other extreme weather-related events that could cause disruption to our business and operations. Chronic results of climate change such as shifting weather patterns could also cause disruption to our business and operations. Climate change may also result in new and/or more stringent regulatory requirements for the Company, which could materially affect the Company’s results of operations by requiring the Company to take costly measures to comply with any new laws or regulations related to climate change that may be forthcoming. New regulations, shift in customer behaviors, supply chain collapse or breakthrough technologies that accelerate the transition to a lower carbon economy may negatively affect certain sectors and borrowers in our loan portfolio, impacting their ability to timely repay their loans or decreasing the value of any collateral held by us.
The emergence or continuation of widespread health emergencies or pandemics could have a material adverse effect on our business, results of operations and financial condition, and such effects will depend on future developments, which are highly uncertain and are difficult to predict.
Pandemics could adversely impact our workforce and operations and the operations of our borrowers, customers and business partners. As a result, we may experience financial losses due to a number of operational factors impacting us or our borrowers, customers or business partners. These factors may be prevalent for a significant period of time and may adversely affect our business, results of operations and financial condition even after an outbreak has subsided.
The extent to which an outbreak impacts our business, results of operations and financial condition will depend on future developments, which are highly uncertain and are difficult to predict, including, but not limited to, the duration and spread of the outbreak and its variants, its severity, the actions to contain the virus or treat its impact, the effectiveness of vaccination programs for the virus, vaccination rates, and how quickly and to what extent normal economic and operating conditions can resume. Even after an outbreak has subsided, we may continue to experience materially adverse impacts to our business as a result of the virus’s global economic impact, including the availability of credit, adverse impacts on our liquidity and any recession that has occurred or may occur in the future.
The adoption of artificial intelligence tools by us and our third‑party vendors and service providers may increase the risk of errors, omissions, unfair treatment or fraudulent behavior by our employees, clients or counterparties, or other third parties.
Our adoption of artificial intelligence, including generative artificial intelligence, machine learning and similar tools and technologies that collect, aggregate, analyze or generate data or other materials or content (collectively, “AI”), for limited internal use has increased our efficiency, and we expect to continue to adopt such tools as appropriate. In addition, we expect our third‑party vendors and service providers to increasingly develop and incorporate AI into their product offerings faster than we are able to do so independently. There are significant risks involved in utilizing AI and no assurance can be provided that our or our third‑party vendors’ or service providers’ use of AI will enhance our or our third‑party vendors’ or service providers’ products or services or produce the intended results. The adoption and incorporation of such tools can lead to concerns around safety and soundness, fair access to financial services, fair treatment of consumers and compliance with applicable laws and regulations. Such risk can result from models being poorly designed or faulty data being used, inadequate model testing or validation, narrow or limited human oversight, inadequate planning or due diligence, or inappropriate or controversial data practices by developers or end‑users, and other factors adversely affecting public opinion of AI and the acceptance of AI solutions. Furthermore, given the pace of rapid adoption of such tools by vendors and service providers, we may not be aware of the adoption of AI solutions prior to such tools being introduced into our environment. Failure to adequately manage AI risks can result in erroneous results and decisions based on misinformation, unwanted forms of bias, unauthorized access to sensitive, confidential, proprietary or personal information and violations of applicable laws and regulations, leading to operational inefficiencies, competitive harm, reputational harm, ethical challenges, legal liability, losses, fines and other adverse impacts on our business and financial results. If we do not have sufficient rights to use the data or other material or content on which the AI tools we use rely, or to use the output of such AI tools, we also may incur liability through the violation of applicable laws and regulations, third‑party intellectual property, privacy or other rights or contracts to which we are a party.
In addition, regulation of AI is rapidly evolving as federal and state legislators and regulators are increasingly focused on these powerful emerging technologies. The technologies underlying AI and its uses are subject to a variety of laws and regulations, including intellectual property, data privacy and cybersecurity, consumer protection, competition, equal opportunity and fair lending laws, and are expected to be subject to increased regulation and new laws or new applications of existing laws and regulations. AI is the subject of ongoing review by various U.S. governmental and regulatory agencies, and various U.S. states are applying, or are considering applying, existing laws and regulations to AI or are considering general legal frameworks for AI. We may not be able to anticipate how to respond to these rapidly evolving frameworks, and we may need to expend resources to adjust our operations or offerings. Moreover, because AI technology itself is highly complex and rapidly developing, it is not possible to predict all of the legal, operational or technological risks that may arise relating to the use of AI.
We rely on dividends from the Bank for most of our revenue.
Eagle is a separate and distinct legal entity from its subsidiaries. It receives substantially all of its revenue and cash flow (on a non‑consolidated basis) from dividends from the Bank. These dividends are the principal source of funds to pay dividends on the common stock and interest and principal on the Company’s debt. Various federal and state laws and regulations limit the amount of dividends that the Bank may pay to the Company. Also, the Company’s right to participate in a distribution of assets upon a subsidiary’s liquidation or reorganization is subject to the prior claims of the subsidiary’s creditors. In the event the Bank is unable to pay dividends to the Company, the Company may not be able to service debt, pay obligations or pay dividends on the Common Stock and its business, financial condition and results of operations may be materially adversely affected. Consequently, cash‑based activities, including further investments in the Bank or support of the Bank, could require borrowings or additional issuances of common or preferred stock.
We have identified a material weakness in our internal control over financial reporting. Failure to remediate, improve and maintain the quality of internal control over financial reporting could result in material misstatements in our financial statements and could materially and adversely affect our ability to provide timely and accurate financial information about the Company, which could harm our reputation and share price.
In March 2025, we identified control deficiencies involving classification of borrowings in the financing activities section of the statement of cash flows. Specifically, the Company’s controls were not designed at a sufficient level of precision to ensure the proper classification of borrowings as short-term or long-term so that the borrowings from and repayments to are appropriately presented either on a net basis or a gross basis within the financing section of the statement of cash flows. Management concluded that these control deficiencies constituted a material weakness in our internal control over financial reporting, as the identified deficiencies could have had a direct or indirect impact on some of our financial reporting controls related to borrowings.
A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management cannot be certain that other deficiencies or material weaknesses will not arise or be identified or that the Company will be able to correct and maintain adequate controls over financial processes and reporting in the future.
Management, with oversight from the Audit Committee, is committed to maintaining a strong internal control environment, and has taken, and will continue to take, actions necessary to remediate the material weakness. The identified material weakness in our internal control over financial reporting will not be considered remediated until the remediated controls operate for a sufficient period of time and can be tested and concluded by management to be designed and operating effectively. We cannot provide any assurance that our remediation efforts will be successful or that our internal control over financial reporting will be effective as a result of these efforts. As we continue to evaluate operating effectiveness and monitor improvements to our internal control over financial reporting, we may take additional measures to address control deficiencies or modify our remediation efforts.
Unsuccessful remediation efforts could result in material misstatements in, or restatements of, the Company’s financial statements, could cause the Company to fail to meet its reporting obligations and/or could cause investors to lose confidence in the Company’s reported financial information, which would adversely affect the trading price of the Company’s common stock and harm the Company’s reputation. In addition, such failures could result in violations of applicable securities laws, an inability to meet Nasdaq listing requirements, a default in covenants under the Company’s credit facilities, and/or exposure to lawsuits, investigations or other legal proceedings.
Current trends of risingWhile interest rates havebegan resultedto decline in anSeptember increased2025 valuationand the fair value of the MSR asset,asset howeverremains above its carrying value, one of the principal risks associated with MSR assets is that in a declining interest rate environment,environment they will likelymay lose a substantial portion of their value as a result of higher ‑than ‑anticipated prepayments. Moreover, if prepayments are greater than expected, the cash we receivereceived over the life of the mortgage loans would be reduced.
Another competitive factor is that the financial services market, including banking services, is undergoing rapid technological changes with frequent introductions of new technology‑driven products and services. The widespread adoption of new and emerging technologies, such as artificial intelligence and quantum computing, have the potential to further intensify competition and accelerate disruption in the financial services market. Our future success may depend, in part, on our ability to use technology competitively to provide products and services that provide convenience to customers and create additional efficiencies in our operations.
Competition with financial‑services technology companies, including those related to digital currencies or cryptocurrencies (including stablecoins), or technology companies partnering with financial‑services companies, may be particularly intense, due to, among other things, differing regulatory environments. For example, the Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025 ("GENIUS Act") provides a legal framework for stablecoins to be issued in the United States, which may lead to new and increased competition for funds that may have otherwise been, or currently are, deposits with banks, such as the Bank.
OverThe bank failures and related negative media attention in early 2023 generated significant market trading volatility among publicly traded bank holding companies and, in particular, regional, as well as community banks like the pastCompany. year,These severaldevelopments financialnegatively servicesimpacted institutions have failed or required outside liquidity support—in many cases, as a result of the inability of the institutions to obtain needed liquidity. The impact of this situation has led to risk of additional stress to other financial services institutions and the financial services industry generally as a result of increased lack ofcustomer confidence in theregional financialand sector.community U.S.banks regulatorsthat havewere takennot actionconsidered intoo an effortbig to strengthenfail, publicwhich confidenceprompted incustomers theto bankingmove system,uninsured includingdeposits theto creation of a new Bank Term Funding Program. There can be no assurancebanks that theseare actionsperceived willas stabilizetoo thebig financialto servicesfail. industryFurther, competition for deposits increased and financialavailable markets.yields Whilesimilarly weincreased, currentlycausing donon‑interest‑bearing not anticipate liquidity constraints of the kind that caused certain other financial services institutionsdeposits to failmove orto requireinterest‑bearing externaldeposits support,and constraintsoff‑balance sheet sweep accounts. Constraints on our liquidity could occur as a result of unanticipated deposit withdrawals because of market distress or our inability to access other sources of liquidity, including through the capital markets due to unforeseen market dislocations or interruptions. Moreover, some of our customers may become less willing to maintain deposits at the Bank because of broader market concerns with the level of insurance available on those deposits. Our business and our financial condition and results of operations could be adversely affected by continued soundness concerns regarding financial institutions generally and our counterparties specifically and limitations resulting from further governmental action in an effort to stabilize or provide additional regulation of the financial system as impact of excessive deposit withdrawals.
Eagle uses models for business planning purposes that may not adequately predict future results.
Eagle uses financial models to aid in its planning for various purposes including its capital and liquidity needs and other purposes. The models used may not accurately account for all variables, may fail to predict outcomes accurately and/or may overstate or understate certain effects. As a result, Eagle may not adequately prepare for future events and may suffer losses or other setbacks due to these failures.
Also, information Eagle provides to the public or to its regulators based on models could be inaccurate or misleading due to inadequate design or implementation. Decisions that its regulators make, including those related to capital distributions to its shareholders, could be affected adversely due to the perception that the models used to generate the relevant information are unreliable or inadequate.
We could be subject to changes in tax laws, regulations and interpretations or challenges to our income tax provision.
Any change in enacted tax laws, rules or regulatory or judicial interpretations, or any change in the pronouncements relating to accounting for income taxes, could adversely affect our effective tax rate, tax payments and results of operations. For example, in July 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, introducing significant tax changes. The OBBBA extends or makes permanent various tax provisions that were originally enacted in the 2017 Tax Cuts and Jobs Act and were set to expire at the end of 2025. The OBBBA features modified versions of individual and business tax relief proposals, and other new tax relief measures. In addition, it includes various revenue‑raising measures, including changes to certain Inflation Reduction Act clean energy tax credits and various limits on business and individual tax deductions, that are intended to offset part of the cost of the legislation. We are currently evaluating the impact of the OBBBA on our business and consolidated financial statements.
Management's Discussion & Analysis (MD&A)
New heading “Loan Commitments”
New heading “Investment Commitments”
Largest changes
“Eagle has a $15.00 million line of credit with a correspondent bank. The outstanding balance for this line of credit was $15.00 million at December 31, 2025 and $0 at December 31, 2024. The line of credit was used to finance the redemption payment for subordinated notes of $15.00 million. The line of credit has a two-year maturity and a variable interest rate equal to 0.50% below prime. The rate was 6.25% as of December 31, 2025.The draw is secured by the assets of the Company and includes certain financial covenants and negative covenants. …”see in full comparison
During the quarter ended September 30, 2024, management performed a quantitative goodwill impairment test with assistance from a third-party valuation specialist. The interim determination was primarily driven by a revision in the Company's earnings outlook in comparison to budget. The interim goodwill impairment assessment as of August 31, 2024 concluded that goodwill was not impaired. No interim goodwill impairment tests were performed in 2025. Our quantitative annual impairment tests as of October 31,see in full comparison20242025 and20232024 also did not result in impairment. However, changing economic conditions that may adversely affect the Company's performance, the fair value of its assets and liabilities, or its stock price could result in future impairment. Any resulting impairment loss could have a material adverse impact on the Company's financial condition and results of operations. Management will continue to monitor events that could influence this conclusion in the future.See Note 7 to the Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data” for further information.
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 corporatesee in full comparisonexpense,expenses, 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 also has a line of credit with a correspondent bank, which was increased from $10.00 million to $15.00 million as of October 30, 2023. There was no outstanding balance for this line of credit at December 31, 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.
During the year ended December 31, 2025, the Bank sold four real estate owned and other repossessed assets resulting in a net loss of $10,000. There were no subsequent write-downs on real estate owned or other repossessed assets during the year ended December 31, 2025. During the year ended December 31, 2024, the Bank sold two real estate owned and other repossessed assets resulting in a net loss of $6,000. There were no subsequent write-downs on real estate owned or other repossessed assets during the year ended December 31, 2024.see in full comparisonDuring the year ended December 31, 2023, the Bank sold one real estate owned and other repossessed asset. There were no subsequent write-up on real estate owned and other repossessed assets during the year ended December 31, 2023.
Total noninterest income was $18.67 million for the year ended December 31, 2025, compared to $17.78 million for the year ended December 31,see in full comparison2024,2024.comparedThe increase of $896,000, or 5.0%, was primarily due to$22.72anmillionincrease in mortgage banking, net of $531,000 for the year ended December 31,2023. The decrease of $4.94 million, or 21.7% was primarily due to a decrease in mortgage banking, net of $4.96 million for the year ended December 31, 2024.2025. Mortgage banking, net includes net gain on sale of mortgage loans whichdecreasedincreased$4.66$982,000 to $7.72 million for the year ended December 31, 2025, compared to $6.74 million for the year ended December 31,2024, compared to $11.40 million for the year ended December 31, 2023.2024. During the year ended December 31,2024,2025,$211.78$230.90 million residential mortgage loans were sold compared to$344.31$211.78 million in the prior year.In addition, grossGross margin on sale of mortgage loanshas compressed dueincreased toincreased competition and less volume. For the year ended December 31, 2024, gross margin was 3.18% compared to 3.31%3.34% for the year ended December 31,2023.2025, from 3.18% for the year ended December 31, 2024.
Full comparison: every changed paragraph (50)
The following discussion and analysis of the financial condition and results of operations of Eagle is intended to help investors understand our company and our operations. The financial review is provided as a supplement to,to and should be read in conjunction with the Consolidated Financial Statements and the related Notes included elsewhere in this report.
The level and movement of interest rates impacts the Bank’s earnings as well. The Federal Open Market Committee increaseddecreased the federal funds target rate to 5.50% during the year ended December 31, 2023. The rate decreased to 4.50% during the year ended December 31, 2024. The rate decreased to 3.75% during the year ended December 31, 2025.
Quarterly, an assessment is performed of the risks expected in the loan portfolio. A detailed review is conducted for significant loans identified as having weaknesses that do not share common risk characteristics with other loans. The methodology for determining the adequacy of the allowance for credit losses is considered a critical accounting policy by management due to its complexity and the high degree of judgment involved. The primary factors and assumptions considered include loan volume, credit ratings, delinquency status, prepayment speeds, weighted average lives, and other relevant available information from internal and external sources related to past events and historical loss experience. Management uses qualitative judgment to adjust loss rates to reflect management’s assessment of current economic conditions, along with reasonable and supportable forecasts. The allowance is based on information known at the time of the review. Changes in factors underlying the assessment for subsequent evaluations of the loan portfolio could have a material impact on the amount of the allowance that is necessary andto increase the amount of provision to be charged against earnings. See Note 3 to the Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data” for further information.
Goodwill
During the quarter ended September 30, 2024, management performed a quantitative goodwill impairment test with assistance from a third-party valuation specialist. The interim determination was primarily driven by a revision in the Company's earnings outlook in comparison to budget. The interim goodwill impairment assessment as of August 31, 2024 concluded that goodwill was not impaired. No interim goodwill impairment tests were performed in 2025. Our quantitative annual impairment tests as of October 31, 20242025 and 20232024 also did not result in impairment. However, changing economic conditions that may adversely affect the Company's performance, the fair value of its assets and liabilities, or its stock price could result in future impairment. Any resulting impairment loss could have a material adverse impact on the Company's financial condition and results of operations. Management will continue to monitor events that could influence this conclusion in the future. See Note 7 to the Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data” for further information.
Total assets were $2.11 billion at December 31, 2025, an increase of $3.28 million or 0.2% from $2.10 billion at December 31, 2024. Securities available-for-sale decreased by $10.90 million or 3.7% from December 31, 2024. Loans receivable, net decreased by $2.15 million or 0.1%, to $1.50 billion at December 31, 2025 from $1.50 billion at December 31, 2024. Total liabilities were $1.91 billion at December 31, 2025, a decrease of $13.78 million, or 0.7%, from $1.93 billion at December 31, 2024. Total deposits increased by $100.37 million or 6.0% to $1.78 billion from $1.68 billion at December 31, 2024. Total borrowings decreased $117.61 million to $82.47 million at December 31, 2025, from $200.08 million at December 31, 2024. Total shareholders’ equity increased by $17.04 million or 9.7% from December 31, 2024.
Total assets were$2.10 billion at December 31, 2024, an increase of $27.42 million, or 1.3% from $2.08 billion at December 31, 2023. Loans receivable, net increased by $35.75 million or 2.4%, to $1.50 billion at December 31, 2024 from $1.47 billion at December 31, 2023. However, securities available-for-sale decreased by $25.69 million or 8.1% from December 31, 2023. Total borrowings decreased $34.66 million to $200.08 million at December 31, 2024, from $234.74 million at December 31, 2023. Total liabilities were $1.93 billion at December 31, 2024, an increase of $21.94 million, or 1.2%, from $1.91 billion at December 31, 2023. Total deposits increased by $46.03 million or 2.8% to $1.68 billion from $1.64 billion at December 31, 2023. Total shareholders’ equity increased by $5.50 million or 3.2% from December 31, 2023.
We maintain a portfolio of investment securities, classified as either available-for-sale or held-to-maturity to enhance total return on investments. Our investment securities generally include U.S. government and agency obligations, U.S. treasury obligations, Small Business Administration pools, municipal securities, corporate obligations, mortgage-backed securities (“MBSs”), collateralized mortgage obligations (“CMOs”) and asset-backed securities (“ABSs”), all with varying characteristics as to rate, maturity and call provisions. There were no held-to-maturity investment securities included in the investment portfolio at December 31, 20242025 or 2023.2024. All investment securities included in the investment portfolio are available-for-sale. Eagle also has interest-bearing deposits in other banks and federal funds sold, as well as stock in FHLB and FRB. FHLB stock was $7.78$2.65 million and $9.19$7.78 million at December 31, 20242025 and 2023,2024, respectively. FRB stock was $4.13 million for both at December 31, 20242025 and 2023.2024.
Securities available-for-sale were $281.69 million at December 31, 2025, a decrease of $10.90 million, or 3.7%, from $292.59 million at December 31, 2024, a decrease of $25.69 million, or 8.1%, from $318.28 million at December 31, 2023.2024. The decrease was primarily due to sales of $14.12 million and maturity, principal payments and call activity of $21.45$27.12 million. These decreases weremillion partially offset by $10.98$7.04 million in investment purchases.purchases Inand addition,an unrealizedincrease lossesin onfair securitiesvalue increasedof from$9.88 prior year by $273,000.million.
The following table sets forth information regarding amortized costs, fair values, weighted average yields and maturities of investments. The yields have been computed on a tax equivalent basis. Maturities are based on the final contractual payment dates and do not reflect the impact of prepayments or early redemptions that may occur.
Loans receivable, net increaseddecreased $35.75$2.15 million, or 2.4%,0.1%, to $1.50 billion at December 31, 20242025 from $1.47$1.50 billion at December 31, 2023.2024. Total commercialresidential loans increaseddecreased $20.38$15.63 million, totaland consumer loans decreased $4.09 million. These decreases were largely offset by increases in home equity loans increasedof $10.61$10.53 million, total commercial loans of $5.50 million and total commercial real estate loans increasedof $7.37$2.06 million. These increases were slightly offset by decreases in consumer loans of $1.62 million and residential loans of $590,000.
Total loan originations were $607.73$614.74 million for the year ended December 31, 2024.2025. Total residential 1-4 family originations were $271.79$278.90 million, which includes $214.32$225.11 million of originations of loans held-for-sale. Total commercial originations were $155.11$154.29 million. Total commercial real estate originations were $135.55$136.33 million. Home equity loan originations totaled $31.63$32.65 million. Consumer loan originations totaled $13.65$12.57 million. Loans held-for-sale increaseddecreased by $1.94$5.92 million, to $7.45 million at December 31, 2025 from $13.37 million at December 31, 2024 from $11.43 million at December 31, 2023.2024.
Loan Maturities. The following table sets forth the estimated maturity of the loan portfolio of the Bank at December 31, 2024.2025. Balances exclude deferred loan fees and allowance for credit losses. Scheduled principal repayments of loans do not necessarily reflect the actual life of such assets. The average life of a loan is typically substantially less than its contractual terms because of prepayments. In addition, due on sale clauses on loans generally give the Bank the right to declare loans immediately due and payable in the event, among other things, the borrower sells the real property, subject to the mortgage, and the loan is not paid off. All mortgage loans are shown to be maturing based on the date of the last payment required by the loan agreement, except as noted.
Nonaccrual loans as of December 31, 20242025 and 20232024 include $591,000$460,000 and $1,681,000,$591,000, respectivelyrespectively, of acquired loans that deteriorated subsequent to the acquisition date.
During the year ended December 31, 2025, the Bank sold four real estate owned and other repossessed assets resulting in a net loss of $10,000. There were no subsequent write-downs on real estate owned or other repossessed assets during the year ended December 31, 2025. During the year ended December 31, 2024, the Bank sold two real estate owned and other repossessed assets resulting in a net loss of $6,000. There were no subsequent write-downs on real estate owned or other repossessed assets during the year ended December 31, 2024. During the year ended December 31, 2023, the Bank sold one real estate owned and other repossessed asset. There were no subsequent write-up on real estate owned and other repossessed assets during the year ended December 31, 2023.
Provisions for, or adjustments to, estimated losses are included in earnings in the period they are established. At December 31, 2025, we had $17.37 million in allowance for credit losses. At December 31, 2024, we had $16.85 million in allowance for credit losses. At December 31, 2023, we had $16.44 million in allowance for loan losses.
Net loan charge-offs for each loan category to average loans outstanding forduring eachthe loanperiod categoryincluding loans held-for-sale are considered insignificant for the periods presented in the table above.
Deposits. Deposits are the Company’s primary source of funds. Core deposits are deposits that are more stable and somewhat less sensitive to rate changes. They also represent a lower cost source of funds than rate sensitive, more volatile accounts such as certificates of deposit. We believe that our core deposits are checking, savings, money market and IRA accounts. Based on our historical experience, we include IRA accounts funded by certificates of deposit as core deposits because they exhibit the principal features of core deposits in that they are stable and generally are not rate sensitive. Core deposits were $1.24$1.34 billion or 73.7%75.2% of the Bank’s total deposits at December 31, 2024 ($1.22 billion or 72.5% excluding IRA certificates of deposit).2025. The presence of a high percentage of core depositsdeposits, and, in particular,particularly transaction accountsaccounts, reflects in part duecontinues to reflect our strategy to restructure our liabilities to more closely resemblealign with the lower ‑cost offunding liabilitiesprofile of a commercial bank. However,Although a significantmeaningful portion of our depositsfunding isremains in certificatecertificates of depositdeposit, form and there was growthbalances in this areacategory slightly decreased during 2024.2025. This shiftmodest to certificate of depositsdecline has addedeased tosome pressure on our overall cost of funds; however, certificates of deposit still represent a higher‑cost funding source and could continue to ininfluence theour future.cost structure going forward.
Overall deposits increased year over year by $100.37 million. Money markets increased $73.88 million and noninterest checking increased $32.97 million The remaining deposit accounts experienced slight decreases: Interest bearing checking decreased $2.99 million, savings decreased $2.78 million and money time certificates of deposit decreased $703,000.
Overall deposits increased year over year by $46.03 million. Certificates of deposits increased $18.49 million while savings decreased by $20.14 million. All other categories of deposits increased as follows: money market increased by $36.82 million, interest-bearing checking increased $10.38 million, and noninterest checking increased by $484,000. There was migration during the year from lower yielding deposit accounts to certificates of deposit as consumers shifted funds to higher yielding deposits.
Advances from FHLB and other borrowingsborrowings, including federal funds purchased, decreased by $34.81$102.9 million to $38.03 million at December 31, 2025 from $140.93 million at December 31, 2024 from $175.74 million at December 31, 2023.2024. The decrease was related to an increase in deposits. The weighted average rate for borrowings was 4.72% as of December 31, 2024, compared to 5.48%5.24% at December 31, 2023.2025, compared to 4.72% at December 31, 2024. The outstanding balance under the Bell Bank line of credit was $15.00 million at December 31, 2025.
On October 1, 2025, the Company redeemed all of the 5.50% fixed-to-floating rate subordinated notes due July 1, 2030, having an aggregate principal amount of $15.00 million. The Company utilized its line of credit with a correspondent bank to finance the redemption payment. The Company drew $15.00 million on the line of credit, which has a maturity of September 2, 2027, and has a variable interest rate equal to 0.50% below prime.
Total shareholders’ equity increased by $5.50$17.04 million or 3.2%,9.7%, to $191.81 million at December 31, 2025 from $174.77 million at December 31, 2024 from $169.27 million at December 31, 2023.2024. This increase was primarily the result of net income of $9.78$14.84 million and other comprehensive income of $7.27 million. ThisThese increaseincreases waswere partially offset by dividends paid of $4.54$4.58 million.
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 butand haveare been reflectedincluded in theloans tablereceivable 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.
(3) Net interest margin represents income before the provision for credit losses (for years ended December 31, 2024 and December 31, 2023) or provision for loan losses (for the year ended December 31, 2022) divided by average interest-earning assets.
Net Interest Margin ("NIM"). Net interest margin for the year ended December 31, 2025 was 3.92%, an increase of 50 basis points compared to December 31, 2024. The change in NIM reflects the increase in yields on interest-earning assets and the decrease in the average rate on interest-bearing liabilities.
The following compares the results of operations for the Years Ended December 31, 2025 and 2024.
Eagle’s net income for the year ended December 31, 20242025 was $9.78$14.84 millionmillion, compared to $10.06$9.78 million for the year ended December 31, 2023.2024. The decreaseincrease of $278,000$5.06 million, or 2.8%51.7%, was driven by a decrease in noninterest income of $4.94 million. This decrease was largely offset by decrease in noninterest expense of $2.78 million and an increase in net interest income after provision for credit losses of $8.80 million, partially offset by an increase in noninterest expense of $2.19 million and an increase in provision for income taxes of $2.45 million. Basic and diluted earnings per common share were both $1.90 million.for the year ended December 31, 2025. Basic and diluted earnings per common share were $1.25 and $1.24, respectively, for the year ended December 31, 2024. Basic and diluted earnings per common share were both $1.29 for the year ended December 31, 2023.
Net interest income increased slightlyto to$72.90 million for the year ended December 31, 2025, from $63.44 million for the year ended December 31, 2024, from $62.48 million for the year ended December 31, 2023.2024. This increase of $961,000,$9.46 million, or 1.5%,14.9%, was primarily the result of a decrease in interest expense of $5.26 million and an increase in interest and dividend income of $12.59 million largely offset by an increase in interest expense of $11.63$4.20 million.
Interest and dividend income was $108.41 million for the year ended December 31, 2025, compared to $104.21 million for the year ended December 31, 2024, comparedan increase of $4.20 million, or 4.0%. Interest and fees on loans increased to $91.62$97.60 million for the year ended December 31, 2023, an increase of $12.59 million, or 13.7%. Interest and fees on loans increased to $92.28 million for the year ended December 31, 20242025, from $79.42$92.28 million for the same period ended December 31, 2023.2024. This increase of $12.86$5.32 million, or 16.2%,5.8%, was due in part to an increase in the average yield ofon loans, as well as an increase in the average balances for loans. The average interest rate earned on loans receivable increased by 5124 basis points, from 5.53% for the year ended December 31, 2023, to 6.04% for the year ended December 31, 2024.2024, to 6.28% for the year ended December 31, 2025. Interest accretion on purchased loans was $1.15 million for the year ended December 31, 2025, which resulted in a six-basis point increase in net interest margin, compared to $751,000 for the year ended December 31, 2024, which resulted in a 4 basis point increase in net interest margin, compared to $1.01 million for the year ended December 31, 2023, which resulted in a 6 basisfour-basis point increase in net interest margin. In addition, average balances for loans receivable, including loans-held-for-sale, for the year ended December 31, 20242025 were $1.52$1.55 billion, compared to $1.44$1.52 billion for the year ended December 31, 2023.2024. This represents an increase of $86.71$29.70 million, or 6.00%1.95%, and was due to organic growth. Interest on investment securities available-for-sale decreased by $948,000$962,000, or 8.3%9.2%, period over period, primarily due to the decrease in average balances for investments from $328.53 million for the year ended December 31, 2023, to $306.54 million for the year ended December 31, 2024.2024, to $286.08 million for the year ended December 31, 2025. In addition, average interest rates earned on investments decreased from 3.46% for the year ended December 31, 2023, to 3.39% for the year ended December 31, 2024.2024, to 3.31% for the year ended December 31, 2025.
Total interest expense was $35.51 million for the year ended December 31, 2025, decreasing from $40.77 million for the year ended December 31, 2024. The decrease of $5.26 million was primarily due to a decrease of $5.20 million in interest expense on total borrowings. The decrease in interest expense on total borrowings was driven by the average balance of FHLB advances and other borrowings decreasing from $190.08 million for the year ended December 31, 2024, to $105.12 million for the year ended December 31, 2025. The average rate paid on FHLB advances and other borrowings also decreased from 5.36% for the year ended December 31, 2024, to 4.72% for the year ended December 31, 2025. Interest expense on deposits decreased minimally by $62,000 from December 31, 2024. The overall average rate on total deposits was 1.61% for the year ended December 31, 2025, compared to 1.70% for the year ended December 31, 2024. However, the average balances for total deposits were $1.72 billion for the year ended December 31, 2025, compared to $1.64 billion for the year ended December 31, 2024.
Total interest expense was $40.77 million for the year ended December 31, 2024, increasing from $29.14 million for the year ended December 31, 2023. The increase of $11.63 million was due to an increase of $9.98 million in interest expense on deposits and a net increase of $1.65 million in interest expense on total borrowings. The overall average rate on total deposits was 1.70% for the year ended December 31, 2024, compared to 1.11% for the year ended December 31, 2023. In addition, the average balance for total deposits was $1.64 billion for the year ended December 31, 2024, compared to $1.60 billion for the year ended December 31, 2023. The average balance for total borrowings increased from $218.60 million for the year ended December 31, 2023 to $249.16 million for the year ended December 31, 2024. The increase was due to FHLB advances and other borrowings being deployed to fund loan growth. The average rate paid on total borrowings also increased from 5.16% for the year ended December 31, 2023, to 5.18% for the year ended December 31, 2024.
Provision for credit losses was $1.18 million for the year ended December 31, 2025, compared to $518,000 for the year ended December 31, 2024, compared to $1.46 million in loan loss provisions for the year ended December 31, 2023.2024. The provision for credit losses for the year ended December 31, 20242025, includesincluded aan increase in the provision for credit losses on loans ofto $408,000$741,000 and aan increase in the provision for unfunded commitments ofto $110,000.$440,000.
Total noninterest income was $18.67 million for the year ended December 31, 2025, compared to $17.78 million for the year ended December 31, 2024,2024. comparedThe increase of $896,000, or 5.0%, was primarily due to $22.72an millionincrease in mortgage banking, net of $531,000 for the year ended December 31, 2023. The decrease of $4.94 million, or 21.7% was primarily due to a decrease in mortgage banking, net of $4.96 million for the year ended December 31, 2024.2025. Mortgage banking, net includes net gain on sale of mortgage loans which decreasedincreased $4.66$982,000 to $7.72 million for the year ended December 31, 2025, compared to $6.74 million for the year ended December 31, 2024, compared to $11.40 million for the year ended December 31, 2023.2024. During the year ended December 31, 2024,2025, $211.78$230.90 million residential mortgage loans were sold compared to $344.31$211.78 million in the prior year. In addition, grossGross margin on sale of mortgage loans has compressed dueincreased to increased competition and less volume. For the year ended December 31, 2024, gross margin was 3.18% compared to 3.31%3.34% for the year ended December 31, 2023.2025, from 3.18% for the year ended December 31, 2024.
Noninterest expense was $71.50 million for the year ended December 31, 2025, compared to $69.31 million for the year ended December 31, 2024, an increase of $2.19 million, or 3.2%. The primary driver of the increase was salaries and employee benefits, which increased $2.67 million, or 6.7%, to $42.39 million for the year ended December 31, 2025, compared to $39.72 million for the year ended December 31, 2024. Software subscriptions also increased $606,000 due to new system implementations. However, contract changes led to lower data processing expense which decreased $1.23 million.
Noninterest expense was $69.31 million for the year ended December 31, 2024, compared to $72.09 million for the year ended December 31, 2023, a decrease of $2.78 million, or 3.9%. The largest driver of the decrease was salaries and employee benefits, decreasing 7.6% or $3.25 million to $39.72 million for the year ended December 31, 2024 compared to $42.97 million for the year ended December 31, 2023. This decrease was due to fewer full-time employees in 2024, resulting in lower salaries and lower group health insurance costs. In addition, commissions paid decreased due to lower commissions paid on residential mortgage originations.
Provision for income taxes was $4.06 million for the year ended December 31, 2025, compared to $1.61 million for the year ended December 31, 2024,2024. comparedThe toeffective $1.60tax millionrate was 21.5% for the year ended December 31, 2023.2025, compared to 14.2% for the prior year. The effective tax rate wasincreased 14.2% foras the yearCompany's endedpretax Decemberearnings 31,have 2024increased comparedat toa 13.7%faster forpace the prior year and is due to the increase in proportion ofthan tax-exempt income compared to pretax earnings, as well as tax credits from investments in low-income housing tax projects.income.
During the first quarter of 2023, the FRB offered a new Bank Term Funding Program ("BTFP") for eligible depository institutions. The BTFP offersoffered 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 are valued at par. The Company did not utilize the program during 2023. In March of 2024, the Company accessed borrowings through the BTFP. In September of 2024, the Company paid off the borrowings.
Brokered deposits are another source of funding the Bank may utilize from time to time. As of December 31, 2025, the Bank had no brokered certificates and $3.21 million in brokered money market deposits. As of December 31, 2024, the Bank had no brokered certificates and $5.57 million in brokered money market deposits. As of December 31, 2023, the Bank had $72.17 million in brokered certificates and $5.28 million in brokered money market deposits. Policy limits for brokered deposits are set at 10% of assets.
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,expenses, 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 also has a line of credit with a correspondent bank, which was increased from $10.00 million to $15.00 million as of October 30, 2023. There was no outstanding balance for this line of credit at December 31, 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 has a $15.00 million line of credit with a correspondent bank. The outstanding balance for this line of credit was $15.00 million at December 31, 2025 and $0 at December 31, 2024. The line of credit was used to finance the redemption payment for subordinated notes of $15.00 million. The line of credit has a two-year maturity and a variable interest rate equal to 0.50% below prime. The rate was 6.25% as of December 31, 2025.The draw is secured by the assets of the Company and includes certain financial covenants and negative covenants. Outstanding draws on the line impact remaining borrowing capacity for the Company’s correspondent bank lines of credit included above.
Net cash provided by the Company’s operating activities, which is primarily comprised of cash transactions affecting net income, was $28.54$33.13 million for the year ended December 31, 20242025 compared to $9.35$28.54 million for the prior year. Net cash provided by operating activities was higher for the year ended December 31, 20242025 primarily due to changes in loans held-for-sale activity. Mortgage volumes have been impacted by the current interest rate environment.
Net cash usedprovided inby the Company’s investing activities, which is primarily comprised of cash transactions related to activity in the loan portfolio and investment securities, was $21.96 million for the year ended December 31, 2025 compared to net cash used of $27.80 million for the year ended December 31, 20242024. comparedNet tocash $108.21provided by investing activities for the year ended December 31, 2025, was impacted by available-for-sale securities maturities, principal payments and calls of $27.12 million for the year ended December 31, 2023.2025 only partially offset by purchases of $7.04 million for the year ended December 31, 2025. In addition, loan pay-off and principal payments were higher than loan originations during the year. Loan origination and principal collection, net was $1.30 million for the year ended December 31, 2025. Net cash used in investing activities for the year ended December 31, 2024, was impacted by loan originations being higher than loan pay-off and principal payments during the year. Loan origination and principal collection, net was $36.20 million for the year ended December 31, 2024. Pay-off activity has slowed with current interest rate levels. Available-for-sale securities sales and maturities, principal payments and calls were $35.27 million for the year ended December 31, 2024. A portion of the proceeds were used to purchase additional available-for-sale securities totaling $10.98 million. Net cash used in investing activities for the year ended December 31, 2023 was due in part to loan originations being higher than loan pay-off and principal payments during the year. Loan origination and principal collection, net was $130.74 million for the year ended December 31, 2023. In addition, available-for-sale securities purchases were $28.13 million during the year ended December 31, 2023, more than offset by available-for sale securities sales and maturities, principal payments and calls of $66.72 million.
Net cash providedused byin the Company’s financing activities was $23.69 million for the year ended December 31, 2025 compared to net cash provided of $6.27 million for the year ended December 31, 20242024. comparedNet tocash $101.59used millionin financing activities for the year ended December 31, 2023.2025 was driven by a net decrease in borrowings of $117.91 million largely offset by an increase in deposits of $100.37 million. Net cash provided by financing activities for the year ended December 31, 2024 was drivenlargely impacted by an increase in deposits of $46.03 million, largely offset by a decrease in borrowings of $34.81 million. Net cash provided by financing activities for the year ended December 31, 2023 was largely impacted by borrowings of $106.34 million utilized to fund continued loan growth.
During the third quarter of 2024, net borrowing activity of $43.43 million was presented in the Form 10-Q statement of cash flows for the nine months ended September 30, 2024. The total amount for net borrowing activity was reported correctly; however, the specific borrowing line items in the cash flows from financing activities were incorrect. The borrowing activity was presented as follows: $14.26 million net short-term advances on FHLB and other borrowings, $29.17 million advances on long-term FHLB and other borrowings and no payments on long-term FHLB and other borrowings. The correct amounts are as follows: $40.74 million net short-term payments on FHLB and other borrowings, $105.00 million advances on long-term FHLB and other borrowings and $20.83 million payments on long-term FHLB and other borrowings. See ITEM 9A. Controls and Procedures for additional information regarding this matter.
At December 31, 2024,2025, the Bank’s internally determined measurement of sensitivity to interest rate movements as measured by a 200-basis point rise in interest rates scenario, increased the economic value of equity (“EVE”) by 1.7%3.4% compared to aan decreaseincrease of 1.3%1.7% at December 31, 2023.2024. The Bank is within the guidelines set forth by the Board of Directors for interest rate sensitivity.
Loan Commitments
CommitmentsLoan commitments are summarized as follows:
Investment Commitments
The Company entered into an investment agreement with a local non-profit on October 1, 2025. The investment is for a homebuyer assistance program in the state of Montana. The total commitment is $5.00 million and is expected to be drawn over a three-year period. The outstanding commitment was $5.00 million as of December 31, 2025.
What changed in the latest 10-Q
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, 2025.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
Largest changes
Interest and Dividend Income. Interest and dividend income wassee in full comparison$26.22$26.61 million for the three months endedMarchJune31,30, 2026, compared to$26.07$27.15 million for the three months endedMarchJune31,30, 2025,anaincreasedecrease of$153,000,$539,000, or0.6%.2.0%. Interest and fees on loansincreaseddecreased slightly to$23.57$24.09 million for the three months endedMarchJune31,30, 2026, from$23.32$24.44 million for the three months endedMarchJune31,30, 2025. Thisincreasedecrease of$250,000,$354,000, or1.1%,1.4%, was largely duein parttoanaincreasedecrease in the average yield on loans,withas well as marginally lower average loan balancesremaining relatively stable,period over period. The average interest rate earned on loans receivableincreaseddecreased byeightseven basis points, from6.19%6.31% for the three months endedMarchJune31,30, 2025, to6.27%6.24% for the current period. Interest accretion on purchased loans was$185,000$94,000 for the three months endedMarchJune31,30, 2026, which resulted in afour-basistwo-basis point increase in net interest margin compared to$172,000$607,000 for the three months endedMarchJune31,30, 2025, whichalsoresulted in afour-basis13-basis point increase in net interest margin. Average balances for loans receivable, including loans held-for-sale, remained relatively stable at$1.53$1.55 billion for the three months endedMarchJune31,30, 2026 and 2025.Interest on investment securities available-for-sale decreased by $236,000, or 9.6%, period over period, primarily due to the decrease in average balances for investments from $293.27 million for the three months ended March 31, 2025, to $280.55 million for the three months ended March 31, 2026. In addition, average interest rates earned on investments decreased from 3.39% for the three months ended March 31, 2025, to 3.20% for the three months ended March 31, 2026.
“Interest and Dividend Income. Interest and dividend income was $52.83 million for the six months ended June 30, 2026, compared to $53.22 million for the six months ended June 30, 2025, a slight decrease of $386,000, or 0.7%. Interest from investment securities available-for-sale decreased by $336,000, or 6.9%, period over period, due to a decrease in average balances for investments from $290.49 million for the six months ended June 30, 2025, to $281.19 million for the six months ended June 30, 2026. …”see in full comparison
“Noninterest Income. Total noninterest income was $4.88 million for the three months ended March 31, 2026, compared to $4.02 million for the three months ended March 31, 2025, an increase of $865,000, or 21.5%. This increase was primarily due to an increase of $490,000 in other noninterest income due to insurance proceeds of $484,000 received for the three months ended March 31,2026 due to smoke damage caused by a furnace fire and other damage from a windstorm. …”see in full comparison
“Noninterest Income. Total noninterest income was $9.90 million for the six months ended June 30, 2026, compared to $8.82 million for the six months ended June 30, 2025, an increase of $1.08 million, or 12.2%. This increase was largely due to an increase of $625,000 in other noninterest income for insurance proceeds of $488,000 received for the six months ended June 30, 2026, primarily related to smoke damage caused by a furnace fire and other damage from a windstorm. …”see in full comparison
“Interest Expense. Total interest expense was $14.99 million for the six months ended June 30, 2026, decreasing from $18.17 million for the six months ended June 30, 2025. The decrease of $3.18 million, or 17.5%, was primarily due to a decrease of $2.73 million in interest expense on total borrowings. The decrease in interest expense on total borrowings was driven by the average balance decreasing from $191.49 million for the six months ended June 30, 2025, to $74.65 million for the six months ended June 30, 2026. …”see in full comparison
Interest Expense. Total interest expense wassee in full comparison$7.52$7.47 million for the three months endedMarchJune31,30, 2026, decreasing from$9.17$9.01 million for the three months endedMarchJune31,30, 2025. The decrease of$1.65$1.53 million, or18.0%,17.0%, was primarily due to a decrease of$1.44$1.29 million in interest expense on total borrowings. The decrease in interest expense on total borrowings was driven by the average balanceof FHLB advances and other borrowingsdecreasing from$138.83$184.98 million for the three months endedMarchJune31,30, 2025, to$30.58$74.26 million for the three months endedMarchJune31,30, 2026. The average rate paidonalsoFHLB advances and other borrowings increaseddecreased from4.75%4.61% for the three months endedMarchJune31,30, 2025, to5.46%4.54% for the three months endedMarchJune31,30,2026 due to the payoff of lower-cost borrowings.2026. Interest expense on deposits decreasedminimallyby$210,000,$244,000, period over period. Theoverall average rate on total deposits was down from 1.67% for the three months ended March 31, 2025, compared to 1.52% for the three months ended March 31, 2026. However, theaverage balance for total deposits increased from$1.67$1.71 billion for the three months endedMarchJune31,30, 2025, to $1.78 billion for the three months endedMarchJune31,30, 2026. However, the overall rate on total deposits was down from 1.62% for the three months ended June 30, 2025, compared to 1.49% for the three months ended June 30, 2026.
Full comparison: every changed paragraph (43)
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 MarchJune 31,30, 2026, as compared to the same period of 2025. The following should be read in conjunction with the Company's Consolidated Financial Statements, and accompanying Notes thereto, for the year ended December 31, 2025, included in Eagle's Annual Report on Form 10-K filed with the United States Securities and Exchange Commission ("SEC") on March 9, 2026, and in conjunction with the Condensed Consolidated Financial Statements, and accompanying Notes thereto, included in Part I - Item 1. Financial Statements of this report. The results of operations for the three and six months ended MarchJune 31,30, 2026, are not necessarily indicative of the future results that may be attained for the entire year or other interim periods.
The level and movement of interest rates impacts the Bank’s earnings as well. The Federal Open Market Committee decreased the federal funds target rate to 3.75% during the year ended December 31, 2025. The rate remained at 3.75% during the threesix months ended MarchJune 31,30, 2026.
Comparisons of financial condition in this section are between MarchJune 31,30, 2026 and December 31, 2025.
Total assets were $2.09$2.13 billion at MarchJune 31,30, 2026, aan decreaseincrease of $14.52$19.48 million, or 0.7%,0.9%, from $2.11 billion at December 31, 2025. Loans receivable, net increased by $207,000$39.06 million from December 31, 2025. Securities available-for-sale decreasedincreased $6.81$3.98 million, or 2.4%,1.4%, from December 31, 2025. Total liabilities were $1.90$1.93 billion at MarchJune 31,30, 2026,2026 aan decreaseincrease of $15.66$13.89 million, or 0.8%,0.7%, from $1.91 billion at December 31, 2025. The decreaseincrease was largely due to a decrease in FHLB advances, offset by an increase in totalFHLB deposits.advances. Total borrowings decreasedincreased $11.32$14.14 million from December 31, 2025 and total deposits increased $4.48$8.61 million from December 31, 2025. Total shareholders’ equity increased $1.15$5.60 million, or 0.6%,2.9%, from December 31, 2025.
Securities available-for-sale were $274.89$285.68 million at MarchJune 31,30, 2026, aan decreaseincrease of $6.80$3.99 million, or 2.4%1.4%, from $281.69 million at December 31, 2025. The decreaseincrease was primarily due to maturity,purchasing activity of $15.19 million, which was partially offset by maturities, principal payments and call activity of $3.89 million and a decrease in fair value of $2.72$10.20 million.
Total loans, net increased $207,000 to $1.50 billion at March 31, 2026 from $1.50 billion at December 31, 2025. The increase was largely driven by an increase in total commercial real estate loans of $7.79 million, an increase in total residential loans of $4.99 million and an increase of $1.21 million in home equity loans. The increases were largely offset by a decrease of $12.45 million in total commercial loans and a decrease of $1.27 million in consumer loans.
Total loan originations were $170.95 million for the three months ended March 31, 2026. Total residential 1-4 family originations were $91.77 million, which includes $69.26 million of loans held-for-sale originations. Total commercial originations were $45.38 million. Total commercial real estate originations were $25.71 million. Home equity loan originations totaled $5.98 million. Consumer loan originations totaled $2.11 million. Loans held-for-sale increased by $2.45 million to $9.90 million at March 31, 2026 from $7.45 million at December 31, 2025.
Total loans increased $39.32 million to $1.56 billion at June 30, 2026 from $1.52 billion at December 31, 2025. The increase was attributable to increases in total commercial real estate loans of $21.67 million, total commercial loans of $14.48 million, total residential loans of $5.59 million, and home equity loans of $550,000. The increases were partially offset by a decrease of $2.97 million in consumer loans.
Total loan originations were $393.72 million for the six months ended June 30, 2026. Total residential 1-4 family originations were $187.24 million, which includes $147.29 million of loans held-for-sale originations. Total commercial originations were $114.70 million. Total commercial real estate originations were $69.29 million. Home equity loan originations totaled $17.52 million. Consumer loan originations totaled $4.97 million. Loans held-for-sale increased by $8.52 million to $15.97 million at June 30, 2026 from $7.45 million at December 31, 2025.
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 MarchJune 31,30, 2026 and December 31, 2025 there was $70,000 and $98,000, respectively, of real estate owned and other repossessed property.
Nonaccrual loans as of MarchJune 31,30, 2026 and December 31, 2025 include $721,000$715,000 and $460,000, respectively of acquired loans that deteriorated subsequent to the acquisition date.
Commercial real estate loans made up $667.69$684.38 millionmillion, or 43.9%43.9%, of the Bank's total loan portfolio at MarchJune 31,30, 2026, compared to $635.97 millionmillion, or 41.9%41.9%, at December 31, 2025. The Bank's commercial real estate loans are primarily permanent loans secured by improved property such as office buildings, retail stores, commercial warehouses, and apartment buildings. The terms and conditions of each loan are tailored to the needs of the borrower and based on the financial strength of the project and any guarantors. Generally, commercial real estate loans originated by the Bank will not exceed 80.0% of the appraised value or the selling price of the property, whichever is less. The Bank's commercial real estate portfolio's average loan-to-value ratio range was 32%31% to 48% by property type as of MarchJune 31,30, 2026.
Deposits increased by $4.48$8.61 million, or 0.3%,0.5%, from December 31, 2025 to MarchJune 31,30, 2026. TimeMoney market increased by $10.40 million, time certificates of deposit increased by $10.61$5.26 million,million and savings increased by $6.34 million and money market increased by $2.50$2.60 million. These increases were partially offset by decreases in interest-bearing checking of $5.73 million and noninterest checking of $14.61$3.92 million, and interest bearing checking of $371,000.million.
The Bank's estimated amount of uninsured deposits was $354.06$359.82 million, or 19.6%,19.9%, of totaldeposits depositsincluding accrued interest at MarchJune 31,30, 2026, compared to $354.59 million, or 19.5%, of total deposits at December 31, 2025.
Total borrowings decreasedincreased by $11.32$14.14 million, or 13.7%,17.1%, to $71.15$96.61 million at MarchJune 31,30, 2026 from $82.47 million at December 31, 2025, due to aan decreaseincrease in FHLB advances and other borrowings.
Total shareholders’ equity increased by $1.15$5.60 million, or 0.6%,2.9%, to $192.96$197.41 million at MarchJune 31,30, 2026 from $191.81 million at December 31, 2025. The increase was primarily attributed to net income of $3.98$7.70 million. The increase was largelypartially offset by an increase in unrealized losses of securities available for sale of $2.01 million and dividends paid of $1.16$2.31 million.million and other comprehensive loss, net of tax of $462,000.
Net Interest Margin ("NIM"). Net interest margin for the three months ended MarchJune 31,30, 2026 was 4.11%,4.15%, an increase of 3724 basis points compared to Marchthe 31,three months ended June 30, 2025. TheNet interest margin for the six months ended June 30, 2026 was 4.13%, an increase of 31 basis points compared to the six months ended June 30, 2025.The increase in NIM reflects lower funding costs and improved balance sheet leverage through a favorable funding mix and reduced borrowings, with stable yields on interest‑earning assets.
The following compares the results of operations for the three months ended MarchJune 31,30, 2026 and 2025.
Net Income. Eagle’s net income for the three months ended MarchJune 31,30, 2026, was $3.98$3.72 million, compared to $3.24 million for the three months ended MarchJune 31,30, 2025. The increase of $745,000$478,000 was due to an increase in net interest income after provision for credit losses of $1.56$1.69 million and an increase in noninterest income of $865,000.$210,000. These changes were partially offset by an increase in noninterest expense of $1.21$1.07 million and an increase in the provision for income taxes of $479,000.$354,000. For the current period, basic earnings per common share and diluted earnings per common share were both $0.51.$0.47. Basic earnings per common share and diluted earnings per common share were both$0.42 and $0.41 for the three months ended MarchJune 31,30, 2025.2025, respectively.
Net Interest Income. Net interest income increased to $18.70$19.14 million for the three months ended MarchJune 31,30, 2026, from $16.90$18.15 million for the three months ended MarchJune 31,30, 2025. The increase of $1.80 million,$993,000, or 10.7%,5.5%, was primarily the result of a decrease in interest expense of $1.65$1.53 million.million, partially offset by a decrease in interest and dividend income of $539,000.
Interest and Dividend Income. Interest and dividend income was $26.22$26.61 million for the three months ended MarchJune 31,30, 2026, compared to $26.07$27.15 million for the three months ended MarchJune 31,30, 2025, ana increasedecrease of $153,000,$539,000, or 0.6%.2.0%. Interest and fees on loans increaseddecreased slightly to $23.57$24.09 million for the three months ended MarchJune 31,30, 2026, from $23.32$24.44 million for the three months ended MarchJune 31,30, 2025. This increasedecrease of $250,000,$354,000, or 1.1%,1.4%, was largely due in part to ana increasedecrease in the average yield on loans, withas well as marginally lower average loan balances remaining relatively stable, period over period. The average interest rate earned on loans receivable increaseddecreased by eightseven basis points, from 6.19%6.31% for the three months ended MarchJune 31,30, 2025, to 6.27%6.24% for the current period. Interest accretion on purchased loans was $185,000$94,000 for the three months ended MarchJune 31,30, 2026, which resulted in a four-basistwo-basis point increase in net interest margin compared to $172,000$607,000 for the three months ended MarchJune 31,30, 2025, which also resulted in a four-basis13-basis point increase in net interest margin. Average balances for loans receivable, including loans held-for-sale, remained relatively stable at $1.53$1.55 billion for the three months ended MarchJune 31,30, 2026 and 2025. Interest on investment securities available-for-sale decreased by $236,000, or 9.6%, period over period, primarily due to the decrease in average balances for investments from $293.27 million for the three months ended March 31, 2025, to $280.55 million for the three months ended March 31, 2026. In addition, average interest rates earned on investments decreased from 3.39% for the three months ended March 31, 2025, to 3.20% for the three months ended March 31, 2026.
Interest Expense. Total interest expense was $7.52$7.47 million for the three months ended MarchJune 31,30, 2026, decreasing from $9.17$9.01 million for the three months ended MarchJune 31,30, 2025. The decrease of $1.65$1.53 million, or 18.0%,17.0%, was primarily due to a decrease of $1.44$1.29 million in interest expense on total borrowings. The decrease in interest expense on total borrowings was driven by the average balance of FHLB advances and other borrowings decreasing from $138.83$184.98 million for the three months ended MarchJune 31,30, 2025, to $30.58$74.26 million for the three months ended MarchJune 31,30, 2026. The average rate paid onalso FHLB advances and other borrowings increaseddecreased from 4.75%4.61% for the three months ended MarchJune 31,30, 2025, to 5.46%4.54% for the three months ended MarchJune 31,30, 2026 due to the payoff of lower-cost borrowings.2026. Interest expense on deposits decreased minimally by $210,000,$244,000, period over period. The overall average rate on total deposits was down from 1.67% for the three months ended March 31, 2025, compared to 1.52% for the three months ended March 31, 2026. However, the average balance for total deposits increased from $1.67$1.71 billion for the three months ended MarchJune 31,30, 2025, to $1.78 billion for the three months ended MarchJune 31,30, 2026. However, the overall rate on total deposits was down from 1.62% for the three months ended June 30, 2025, compared to 1.49% for the three months ended June 30, 2026.
Provision for Credit Losses. Provision for credit losses was $279,000$343,000 for the three months ended MarchJune 31,30, 2026, compared to $42,000$1.04 formillion the three months ended MarchJune 31,30, 2025. The provision for credit losses for the three months ended MarchJune 31,30, 2026, included an increase in the provision for credit losses on loans toof $109,000,$403,000 and unchangeda recapture of the provision for unfunded commitments of $170,000.$60,000. The higher provision for 2025 was largely due to loan growth.
Noninterest Income. Total noninterest income was $4.88 million for the three months ended March 31, 2026, compared to $4.02 million for the three months ended March 31, 2025, an increase of $865,000, or 21.5%. This increase was primarily due to an increase of $490,000 in other noninterest income due to insurance proceeds of $484,000 received for the three months ended March 31,2026 due to smoke damage caused by a furnace fire and other damage from a windstorm. In addition, mortgage banking, net increased $309,000 to $2.43 million for the three months ended March 31, 2026, from $2.13 million for the three months ended March 31, 2025. Mortgage banking, net, includes net gain on sale of mortgage loans, which increased to $1.68 million for the three months ended March 31, 2026, compared to $1.35 million for the three months ended March 31, 2025. During the three months ended March 31, 2026, $66.08 million residential mortgage loans were sold, compared to $42.80 million in the three months ended March 31, 2025. However, gross margin levels decreased from 3.15% for the three months ended March 31, 2025, to 2.54% for the three months ended March 31, 2026.
Noninterest Expense.Income. NoninterestTotal expensenoninterest income was $18.21$5.02 million for the three months ended MarchJune 31,30, 2026, compared to $17.01$4.81 million for the three months ended MarchJune 31,30, 2025, an increase of $1.21 million,$210,000, or 7.1%.4.4%. The driver of theThis increase was salariesprimarily anddue employeeto benefits,an whichincrease increasedof $1.15$135,000 million.in other noninterest income.
Noninterest Expense. Noninterest expense was $18.99 million for the three months ended June 30, 2026, compared to $17.93 million for the three months ended June 30, 2025, an increase of $1.07 million, or 5.9%. The driver of the increase was salaries and employee benefits, which increased $1.06 million. The largest components of the increase period over period were health insurance expense, which increased $521,000, and salaries expense, which increased $309,000.
Provision for Income Taxes. Provision for income taxes was $1.11 million for the three months ended MarchJune 31,30, 2026, compared to $631,000$751,000 for the three months ended MarchJune 31,30, 2025. The effective tax rate was 21.8%22.9% for the current period compared to 16.3%18.8% for the three months ended MarchJune 31,30, 2025. The effective tax rate has increased as the Company’s pretax earnings have increased at a faster pace than tax-exempt income.
The following compares the results of operations for the six months ended June 30, 2026 and 2025.
Net Income. Eagle’s net income for the six months ended June 30, 2026, was $7.70 million, compared to $6.48 million for the six months ended June 30, 2025. The increase of $1.22 million was due to an increase in net interest income after provision for credit losses of $3.25 million and an increase in noninterest income of $1.08 million. These changes were partially offset by an increase in noninterest expense of $2.27 million and an increase in the provision for income taxes of $833,000. For the current period, basic earnings per common share and diluted earnings per common share were both $0.98. Basic earnings per common share and diluted earnings per common share were both $0.83 for the six months ended June 30, 2025.
Net Interest Income. Net interest income increased to $37.84 million for the six months ended June 30, 2026, from $35.05 million for the six months ended June 30, 2025. The increase of $2.79 million, or 8.0%, was primarily the result of a decrease in interest expense of $3.18 million.
Interest and Dividend Income. Interest and dividend income was $52.83 million for the six months ended June 30, 2026, compared to $53.22 million for the six months ended June 30, 2025, a slight decrease of $386,000, or 0.7%. Interest from investment securities available-for-sale decreased by $336,000, or 6.9%, period over period, due to a decrease in average balances for investments from $290.49 million for the six months ended June 30, 2025, to $281.19 million for the six months ended June 30, 2026. In addition, average interest rates earned on investments decreased from 3.37% for the six months ended June 30, 2025, to 3.24% for the six months ended June 30, 2026. Interest and fees on loans decreased minimally to $47.66 million for the six months ended June 30, 2026, compared to $47.76 million for the six months ended June 30, 2025. Average loan balances and interest rates remain relatively consistent, period over period.
Interest Expense. Total interest expense was $14.99 million for the six months ended June 30, 2026, decreasing from $18.17 million for the six months ended June 30, 2025. The decrease of $3.18 million, or 17.5%, was primarily due to a decrease of $2.73 million in interest expense on total borrowings. The decrease in interest expense on total borrowings was driven by the average balance decreasing from $191.49 million for the six months ended June 30, 2025, to $74.65 million for the six months ended June 30, 2026. The average rate paid also decreased from 4.66% for the six months ended June 30, 2025, to 4.59% for the six months ended June 30, 2026. Interest expense on deposits decreased by $454,000, period over period. The average balance for total deposits increased from $1.69 billion for the six months ended June 30, 2025, to $1.78 billion for the six months ended June 30, 2026. However, the overall average rate on total deposits was down from 1.64% for the six months ended June 30, 2025, compared to 1.51% for the six months ended June 30, 2026.
Provision for Credit Losses. Provision for credit losses was $622,000 for the six months ended June 30, 2026, compared to $1.08 million for the six months ended June 30, 2025. The provision for credit losses for the six months ended June 30, 2026, included the provision for credit losses on loans of $512,000 and the provision for unfunded commitments of $110,000. The higher provision for 2025 was largely due to loan growth.
Noninterest Income. Total noninterest income was $9.90 million for the six months ended June 30, 2026, compared to $8.82 million for the six months ended June 30, 2025, an increase of $1.08 million, or 12.2%. This increase was largely due to an increase of $625,000 in other noninterest income for insurance proceeds of $488,000 received for the six months ended June 30, 2026, primarily related to smoke damage caused by a furnace fire and other damage from a windstorm. In addition, mortgage banking, net increased $303,000 to $5.35 million for the six months ended June 30, 2026, from $5.05 million for the six months ended June 30, 2025. Mortgage banking, net, includes net gain on sale of mortgage loans, which increased to $3.90 million for the six months ended June 30, 2026, compared to $3.43 million for the six months ended June 30, 2025. During the six months ended June 30, 2026, $138.59 million residential mortgage loans were sold, compared to $97.40 million in the six months ended June 30, 2025. However, gross margin levels decreased from 3.52% for the six months ended June 30, 2025, to 2.82% for the six months ended June 30, 2026.
Noninterest Expense. Noninterest expense was $37.20 million for the six months ended June 30, 2026, compared to $34.93 million for the six months ended June 30, 2025, an increase of $2.27 million, or 6.5%. The driver of the increase was salaries and employee benefits, which increased $2.22 million. The largest components of the increase period over period were health insurance expense, which increased $777,000, and commission expense, which increased $545,000 due to higher mortgage origination volumes.
Provision for Income Taxes. Provision for income taxes was $2.22 million for the six months ended June 30, 2026, compared to $1.38 million for the six months ended June 30, 2025. The effective tax rate was 22.3% for the current period compared to 17.6% for the six months ended June 30, 2025. The effective tax rate has increased as the Company’s pretax earnings increased at a faster pace than tax-exempt income.
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 30 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 MarchJune 31,30, 2026 and December 31, 2025.
The Company's available borrowing capacity was approximately $593.00$575.00 million as of MarchJune 31,30, 2026 and $601.00 million as of December 31, 2025.
Brokered deposits are another source of funding the Bank may utilize from time to time. As of MarchJune 31,30, 2026, the Bank had no brokered certificates and $2.02 million$6,000 in brokered money market deposits. As of December 31, 2025, the Bank had no brokered certificates and $3.21 million in brokered money market deposits. PolicyInternal policy limits for brokered deposits are set at 10% of assets.
Eagle has a $15.00 million line of credit with a correspondent bank. The outstanding balance for this line of credit was $15.00utilized millionduring at March 31, 2026 and December 31, 2025. The line of credit was used2025 to finance the redemption payment for subordinated notes of $15.00 million. The line of credit has a two-year maturity and a variable interest rate equal to 0.50% below prime. The outstanding balance for the line of credit was $13.00 million and $15.00 million at June 30, 2026 and December 31, 2025, respectively. The rate was 6.25% as of Marchboth June 30, 2026 and December 31, 2026.2025. TheDraws drawon isthe line of credit are secured by the assets of the Company and includes certain financial covenants and negative covenants. The Company is in compliance with the covenants under the line of credit. Outstanding draws on the line impact remaining borrowing capacity for the Company’s correspondent bank lines of credit included above.
As of MarchJune 31,30, 2026, the Bank’s internally determined measurement of sensitivity to interest rate movementsmovements, as measured by a 200-basis point rise in interest rates scenario, increased the economic value of equity (“EVE”) by 3.2%2.7%, compared to an increase of 3.4% at December 31, 2025. A 200-basis point decrease in interest rates scenario decreased EVE by 9.1%8.8%, compared to a decrease of 9.3% at December 31, 2025. 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 MarchJune 31,30, 2026. The Bank's actual capital amounts and ratios as of MarchJune 31,30, 2026 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%.
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.goodwill. 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 2025 Form 10-K, as filed with the SEC on March 9, 2026, 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 2025 Form 10-K.
EBMT insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 1 filing (1 insider, 1 trade date, 10,000 shares, about $228.3K). Net open-market shares: -10,000 (purchases minus sales); net value about -$228.3K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-05-08 | Walsh Kenneth M |
Open-market sale | 10,000 | $22.83 | $228.3K |
Well-known investors holding EBMT (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Renaissance Technologies | 2026-06-30 | 131,331 | $3.1M | 0.0% | Added 90% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 73,304 | $1.8M | 0.0% | Added 109% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 49,185 | $1.2M | 0.0% | Added 50% |
| Two Sigma Investments | 2026-06-30 | 23,053 | $551.7K | 0.0% | New position |
| Millennium Management (Israel Englander) | 2026-06-30 | 14,529 | $347.7K | 0.0% | Reduced 25% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 10,076 | $241.1K | 0.0% | New position |