Eagle Bancorp Montana Inc

To the Shareholders and the Board of Directors of

Eagle Bancorp Montana, Inc. and Subsidiaries

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of financial condition of Eagle Bancorp Montana, Inc. (and subsidiaries) (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2023 and 2022, and the consolidated results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Change in Accounting Principle

As discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for the allowance for credit losses as of January 1, 2023 due to the adoption of Accounting Standards Update No. 2016-13, which established Accounting Standards Codification Topic 326,Financial Instruments–* Credit Losses*.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated* financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide *a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

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Allowance for Credit Losses–*** Qualitative Factors***

As described in Note 4 to the consolidated financial statements, the Company’s allowance for credit losses (ACL) on loans was $16.4 million at December 31, 2023. The ACL on loans is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. The ACL on loans is measured on a collective pool basis when similar risk characteristics exist. The Company utilizes the Weighted Average Remaining Maturity (WARM) methodology, which applies historical loss rates over the estimated remaining life of each loan pool. Modeled expected losses are adjusted to reflect current economic conditions and reasonable and supportable forecasts through the use of quantitative models and qualitative factors. Loans considered to have different risk characteristics that do not fall within any pool are analyzed individually.

We identified management’s estimation of qualitative factors used to adjust the modeled expected losses as a critical audit matter. The estimation of these factors, based on management’s evaluation of available internal and external data, is subjective in nature and requires significant judgment by management. Auditing management’s judgments regarding the determination of qualitative factors applied to the ACL on loans involves a high degree of subjectivity.

The primary procedures we performed to address this critical audit matter included:

Goodwill Impairment

As described in Note 1 to the consolidated financial statements, the Company’s goodwill balance was $34.7 million as of December 31, 2023. The Company assesses goodwill for impairment annually, or more often if events or circumstances indicate there may be impairment. During the year ended December 31, 2023, the Company identified a triggering event and performed an interim impairment test as of August 31, 2023 in addition to its annual impairment test as of October 31, 2023. The impairment tests did not result in any goodwill impairment for the year ended December 31, 2023.

We identified the goodwill impairment tests performed during the period as a critical audit matter. The determination of the fair value of the Company’s reporting unit requires management to make significant assumptions that are subject to estimation uncertainty. The performance of audit procedures related to management’s estimates for the interim and annual impairment tests required extensive audit effort, including the use of personnel with specialized skill and knowledge pertaining to valuation techniques. Additionally, the evaluation of audit evidence of more sensitive assumptions required especially challenging and subjective auditor judgment, including those assumptions underlying the projections of future cash flows utilized in the income approach.

The primary procedures we performed to address this critical audit matter included:

/s/ Moss Adams LLP

Everett, Washington

March 6, 2024

We have served as the Company’s auditor since 2019.

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