Eagle Bancorp Montana, Inc.

Previous wording

The Bank has a strong mortgage lending focus, with a large portion of its loan originations represented by single-family residential mortgages, which has enabled it to successfully market home equity loans, as well as a wide range of shorter-term consumer loans for various personal needs (automobiles, recreational vehicles, etc.). The Bank has also focused on adding commercial loans to our portfolio, both real estate and non-real estate. We have made significant progress in this initiative over the past decade. As of December 31, 2024, commercial real estate loans represented 60.3% of the total loan portfolio, including farmland loans representing 9.6% of the total loan portfolio. Commercial business loans represented 18.3% of the total loan portfolio, including agricultural loans representing 8.8% of the total loan portfolio. The purpose of this diversification is to mitigate our dependence on the residential mortgage market, as well as to improve our ability to manage our interest rate spread. Recent acquisitions have added to our agricultural loans, which generally have shorter maturities and nominally higher interest rates. This has provided additional interest income and improved interest rate sensitivity. The Bank’s management recognizes that fee income will also enable it to be less dependent on specialized lending and it maintains a significant loan serviced portfolio, which provides a steady source of fee income. As of December 31, 2024, we had mortgage servicing rights, net of $15.38 million compared to $15.85 million as of December 31, 2023. Gain on sale of loans also provides significant noninterest income in periods of high mortgage loan origination volumes. Such income will be, and has recently been, adversely affected in periods of lower mortgage activity.

Current wording

The Bank has a strong mortgage lending focus, with a large portion of its loan originations repres ented by single-family residential mortgages, which has enabled it to successfully market home equity loans, as well as a wide range of shorter-term consumer loans for various personal needs (automobiles, recreational vehicles, etc.). The Bank has also focused on adding commercial loans to our portfolio, both real estate and non-real estate. We have made significant progress in this initiative over the past decade. As of December 31, 2025, commercial real estate loans represented 60.5% of the total loan portfolio, including farmland loans representing 10.7% of the total loan portfolio. Commercial business loans represented 18.7% of the total loan portfolio, including agricultural loans representing 8.9% of the total loan portfolio. The purpose of this diversification is to mitigate our dependence on the residential mortgage market, as well as to improve our ability to manage our interest rate spread. Recent acquisitions have added to our agricultural loans, which generally have shorter maturities and nominally higher interest rates. This has provided additional interest income and improved interest rate sensitivity. The Bank’s management recognizes that fee income will also enable it to be less dependent on specialized lending and it maintains a significant loan serviced portfolio, which provides a steady source of fee income. As of December 31, 2025, we had mortgage servicing rights, net of $15.04 million compared to $15.38 million as of December 31, 2024. Gain on sale of loans also provides significant noninterest income in periods of high mortgage loan origination volumes. Such income will be, and has recently been, adversely affected in periods of lower mortgage activity.

Previous wording

The level and movement of interest rates impacts the Bank’s earnings as well. The Federal Open Market Committee increased 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.

Current wording

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 4.50% during the year ended December 31, 2024. The rate decreased to 3.75% during the year ended December 31, 2025.

Previous wording

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 and 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.

Current wording

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 to 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.

Previous wording

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. Our quantitative annual impairment tests as of October 31, 2024 and 2023 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.

Current wording

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, 2025 and 2024 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.

Previous wording

Total assets were$2.10 billion at December 31, 2024, anincreaseof$27.42 million, or 1.3% from $2.08 billion at December 31, 2023. Loans receivable, netincreased 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 decreasedby $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 billionat 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.

Current wording

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.

Previous wording

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, 2024 or 2023. 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 million and $9.19 million at December 31, 2024 and 2023, respectively. FRB stock was $4.13 million for both at December 31, 2024 and 2023.

Current wording

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, 2025 or 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 $2.65 million and $7.78 million at December 31, 2025 and 2024, respectively. FRB stock was $4.13 million at December 31, 2025 and 2024.

Previous wording

Securities available-for-sale were $292.59 million at December 31, 2024, a decrease of $25.69 million, or 8.1%, from $318.28 million at December 31, 2023. The decrease was due to sales of $14.12 million and maturity, principal payments and call activity of $21.45 million. These decreases were partially offset by $10.98 million in investment purchases. In addition, unrealized losses on securities increased from prior year by $273,000.

Current wording

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. The decrease was primarily due to maturity, principal payments and call activity of $27.12 million partially offset by $7.04 million in investment purchases and an increase in fair value of $9.88 million.

Previous wording

The following table sets forth information regarding 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.

Current wording

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.

Previous wording

Loans receivable, net increased$35.75 million, or 2.4%, to $1.50 billion at December 31, 2024 from $1.47 billion at December 31, 2023. Total commercial loans increased $20.38 million, total home equity loans increased $10.61 million, and total commercial real estate loans increased $7.37 million. These increases were slightly offset by decreases in consumer loans of $1.62 million and residential loans of $590,000.

Current wording

Loans receivable, net decreased$2.15 million, or 0.1%, to $1.50 billion at December 31, 2025 from $1.50 billion at December 31, 2024. Total residential loans decreased $15.63 million, and consumer loans decreased $4.09 million. These decreases were largely offset by increases in home equity loans of $10.53 million, total commercial loans of $5.50 million and total commercial real estate loans of $2.06 million.

Previous wording

Total loan originations were $607.73 million for the year ended December 31, 2024. Total residential 1-4 family originations were $271.79 million, which includes $214.32 million of originations of loans held-for-sale. Total commercial originations were $155.11 million. Total commercial real estate originations were $135.55 million. Home equity loan originations totaled $31.63 million. Consumer loan originations totaled $13.65 million. Loans held-for-sale increased by $1.94 million, to $13.37 million at December 31, 2024 from $11.43 million at December 31, 2023.

Current wording

Total loan originations were $614.74 million for the year ended December 31, 2025. Total residential 1-4 family originations were $278.90 million, which includes $225.11 million of originations of loans held-for-sale. Total commercial originations were $154.29 million. Total commercial real estate originations were $136.33 million. Home equity loan originations totaled $32.65 million. Consumer loan originations totaled $12.57 million. Loans held-for-sale decreased by $5.92 million, to $7.45 million at December 31, 2025 from $13.37 million at December 31, 2024.

Previous wording

Commercial real estate loans made up $645.96 million or 42.5% of the Bank's total loan portfolio at December 31, 2024, compared to $608.69 million or 41.0% at December 31, 2023. 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 26% to 51% as of December 31, 2024.

Current wording

Commercial real estate loans made up $635.97 million or 41.9% of the Bank's total loan portfolio at December 31, 2025, compared to $645.96 million or 42.5% at December 31, 2024. 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% to 48% as of December 31, 2025.

Previous wording

*Loan Maturities.*The following table sets forth the estimated maturity of the loan portfolio of the Bank at December 31, 2024. 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.

Current wording

*Loan Maturities.*The following table sets forth the estimated maturity of the loan portfolio of the Bank at December 31, 2025. Balances exclude 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.

Previous wording

Nonaccrual loans as of December 31, 2024 and 2023 include $591,000 and $1,681,000, respectively of acquired loans that deteriorated subsequent to the acquisition date.

Current wording

Nonaccrual loans as of December 31, 2025 and 2024 include $460,000 and $591,000, respectively, of acquired loans that deteriorated subsequent to the acquisition date.

Previous wording

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.

Current wording

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.

Previous wording

Provisions for, or adjustments to, estimated losses are included in earnings in the period they are established. 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.

Current wording

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.

Previous wording

Net charge-offs to average loans outstanding for each loan category are considered insignificant for the periods presented in the table above.

Current wording

Net loan charge-offs for each loan category to average loans outstanding during the period including loans held-for-sale are considered insignificant for the periods presented in the table above.

Previous wording

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 billion or 73.7% of the Bank’s total deposits at December 31, 2024 ($1.22 billion or 72.5%excluding IRA certificates of deposit). The presence of a high percentage of core deposits and, in particular, transaction accounts reflects in part due to our strategy to restructure our liabilities to more closely resemble the lower cost of liabilities of a commercial bank. However, a significant portion of our deposits is in certificate of deposit form and there was growth in this area during 2024. This shift to certificate of deposits has added to our overall cost of funds and could continue to in the future.

Current wording

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 $1.34 billion or 75.2% of the Bank’s total deposits at December 31, 2025. The high percentage of core deposits, particularly transaction accounts, continues to reflect our strategy to restructure our liabilities to more closely align with the lower‑cost funding profile of a commercial bank. Although a meaningful portion of our funding remains in certificates of deposit, balances in this category slightly decreased during 2025. This modest decline has eased some pressure on our overall cost of funds; however, certificates of deposit still represent a higher‑cost funding source and could continue to influence our cost structure going forward.

Previous wording

At December 31, 2024 and 2023, the Company held $632.95 million and $618.78 million, respectively, in deposit accounts that met or exceeded the Federal Deposit Insurance Corporation ("FDIC") requirements of $250,000 and greater. However, the estimated amount of uninsured deposits was approximately $323.12 million or 18.9% of total deposits at December 31, 2024 considering other factors such as joint accounts, deposits collateralized by Bank securities and deposit sharing programs like Intrafi Cash Service.

Current wording

At December 31, 2025 and 2024, the Company held $734.62 million and $632.95 million, respectively, in deposit accounts that met or exceeded the Federal Deposit Insurance Corporation ("FDIC") requirements of $250,000 and greater. However, the estimated amount of uninsured deposits was approximately $354.59 million or 19.5% of total deposits at December 31, 2025 considering other factors such as joint accounts, deposits collateralized by Bank securities and deposit sharing programs like Intrafi Cash Service.

Previous wording

Advances from FHLB and other borrowings decreased by $34.81 million to $140.93 million at December 31, 2024 from $175.74 million at December 31, 2023. 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% at December 31, 2023.

Current wording

Advances from FHLB and other borrowings, including federal funds purchased, decreased by $102.9 million to $38.03 million at December 31, 2025 from $140.93 million at December 31, 2024. The decrease was related to an increase in deposits. The weighted average rate for borrowings was 5.24% at December 31, 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.

Previous wording

Total other long-term debt was $59.15 million at December 31, 2024 compared to $59.00 million at December 31, 2023.

Current wording

Total other long-term debt was $44.45 million at December 31, 2025 compared to $59.15 million at December 31, 2024.

Previous wording

Total shareholders’ equity increased by $5.50 million or 3.2%, to $174.77 million at December 31, 2024 from $169.27 million at December 31, 2023. This increase was primarily the result of net income of $9.78 million. This increase was partially offset by dividends paid of $4.54 million.

Current wording

Total shareholders’ equity increased by $17.04 million or 9.7%, to $191.81 million at December 31, 2025 from $174.77 million at December 31, 2024. This increase was primarily the result of net income of $14.84 million and other comprehensive income of $7.27 million. These increases were partially offset by dividends paid of $4.58 million.

Previous wording

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 but have been reflected in the table 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.

Current wording

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 and are included in loans receivable 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.

Previous wording

(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.

Current wording

(3)Net interest margin represents income before the provision for credit losses divided by average interest-earning assets.

Previous wording

Eagle’s net income for the year ended December 31, 2024 was $9.78 million compared to $10.06 million for the year ended December 31, 2023. The decrease of $278,000 or 2.8% 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 $1.90 million. 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.

Current wording

Eagle’s net income for the year ended December 31, 2025 was $14.84 million, compared to $9.78 million for the year ended December 31, 2024. The increase of $5.06 million, or 51.7%, was driven by 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 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.

Previous wording

Net interest income increased slightly to $63.44 million for the year ended December 31, 2024, from $62.48 million for the year ended December 31, 2023. This increase of $961,000, or 1.5%, was primarily the result of an increase in interest and dividend income of $12.59 million largely offset by an increase in interest expense of $11.63 million.

Current wording

Net interest income increased to $72.90 million for the year ended December 31, 2025, from $63.44 million for the year ended December 31, 2024. This increase of $9.46 million, or 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 $4.20 million.

Previous wording

Interest and dividend income was $104.21 million for the year ended December 31, 2024, compared to $91.62 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, 2024 from $79.42 million for the same period ended December 31, 2023. This increase of $12.86 million, or 16.2%, was due in part to an increase in the average yield of loans. The average interest rate earned on loans receivable increased by 51 basis points, from 5.53% for the year ended December 31, 2023, to 6.04% for the year ended December 31, 2024. Interest accretion on purchased loans was $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 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, 2024 were $1.52 billion, compared to $1.44 billion for the year ended December 31, 2023. This represents an increase of $86.71 million, or 6.00% and was due to organic growth. Interest on investment securities available-for-sale decreased by $948,000 or 8.3% 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. 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.

Current wording

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, an increase of $4.20 million, or 4.0%. Interest and fees on loans increased to $97.60 million for the year ended December 31, 2025, from $92.28 million for the same period ended December 31, 2024. This increase of $5.32 million, or 5.8%, was due in part to an increase in the average yield on loans, as well as an increase in the average balances for loans. The average interest rate earned on loans receivable increased by 24 basis points, from 6.04% for the year ended December 31, 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 four-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, 2025 were $1.55 billion, compared to $1.52 billion for the year ended December 31, 2024. This represents an increase of $29.70 million, or 1.95%, and was due to organic growth. Interest on investment securities available-for-sale decreased by $962,000, or 9.2%, period over period, primarily due to the decrease in average balances for investments from $306.54 million for the year ended December 31, 2024, to $286.08 million for the year ended December 31, 2025. In addition, average interest rates earned on investments decreased from 3.39% for the year ended December 31, 2024, to 3.31% for the year ended December 31, 2025.

Previous wording

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.

Current wording

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.

Previous wording

Provision for credit losses was $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. The provision for credit losses for the year ended December 31, 2024 includes a provision for credit losses on loans of $408,000 and a provision for unfunded commitments of $110,000.

Current wording

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. The provision for credit losses for the year ended December 31, 2025, included an increase in the provision for credit losses on loans to $741,000 and an increase in the provision for unfunded commitments to $440,000.

Previous wording

Total noninterest income was $17.78 million for the year ended December 31, 2024, compared to $22.72 million 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. Mortgage banking, net includes net gain on sale of mortgage loans which decreased $4.66 million to $6.74 million for the year ended December 31, 2024, compared to $11.40 million for the year ended December 31, 2023. During the year ended December 31, 2024, $211.78 million residential mortgage loans were sold compared to $344.31 million in the prior year. In addition, gross margin on sale of mortgage loans has compressed due to increased competition and less volume. For the year ended December 31, 2024, gross margin was 3.18% compared to 3.31% for the year ended December 31, 2023.

Current wording

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. The increase of $896,000, or 5.0%, was primarily due to an increase in mortgage banking, net of $531,000 for the year ended December 31, 2025. Mortgage banking, net includes net gain on sale of mortgage loans which increased $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. During the year ended December 31, 2025, $230.90 million residential mortgage loans were sold compared to $211.78 million in the prior year. Gross margin on sale of mortgage loans increased to 3.34% for the year ended December 31, 2025, from 3.18% for the year ended December 31, 2024.

Previous wording

Provision for income taxes was $1.61 million for the year ended December 31, 2024, compared to $1.60 million for the year ended December 31, 2023. The effective tax rate was 14.2% for the year ended December 31, 2024 compared to 13.7% for the prior year and is due to the increase in proportion of tax-exempt income compared to pretax earnings, as well as tax credits from investments in low-income housing tax projects.

Current wording

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. The effective tax rate was 21.5% for the year ended December 31, 2025, compared to 14.2% for the prior year. The effective tax rate increased as the Company's pretax earnings have increased at a faster pace than tax-exempt income.

Previous wording

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 90 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 December 31, 2024 and 2023.

Current wording

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 December 31, 2025 and 2024.

Previous wording

The Bank's available borrowing capacity was approximately $404.0 million as of December 31, 2024 and $398.50 million as of December 31, 2023.

Current wording

The Bank's available borrowing capacity was approximately $601.00 million as of December 31, 2025 and $404.00 million as of December 31, 2024.

Previous wording

During the first quarter of 2023, the FRB offered a new Bank Term Funding Program ("BTFP") for eligible depository institutions. The BTFP offers 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.

Current wording

During the first quarter of 2023, the FRB offered a new Bank Term Funding Program ("BTFP") for eligible depository institutions. The BTFP offered 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.

Previous wording

Brokered deposits are another source of funding the Bank may utilize from time to time. 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.

Current wording

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. Policy limits for brokered deposits are set at 10% of assets.

Previous wording

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, 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.

Current wording

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 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.

Previous wording

Net cash provided by the Company’s operating activities, which is primarily comprised of cash transactions affecting net income, was $28.54 million for the year ended December 31, 2024 compared to $9.35 million for the prior year. Net cash provided by operating activities was higher for the year ended December 31, 2024 primarily due to changes in loans held-for-sale activity. Mortgage volumes have been impacted by the current interest rate environment.

Current wording

Net cash provided by the Company’s operating activities, which is primarily comprised of cash transactions affecting net income, was $33.13 million for the year ended December 31, 2025 compared to $28.54 million for the prior year. Net cash provided by operating activities was higher for the year ended December 31, 2025 primarily due to changes in loans held-for-sale activity.

Previous wording

Net cash used in the Company’s investing activities, which is primarily comprised of cash transactions related to activity in the loan portfolio and investment securities, was $27.80 million for the year ended December 31, 2024 compared to $108.21 million for the year ended December 31, 2023. 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.

Current wording

Net cash provided by 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, 2024. Net cash provided 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, 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.

Previous wording

Net cash provided by the Company’s financing activities was $6.27 million for the year ended December 31, 2024 compared to $101.59 million for the year ended December 31, 2023. Net cash provided by financing activities for the year ended December 31, 2024 was driven 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.

Current wording

Net cash used in 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, 2024. Net cash used in financing activities for the year ended December 31, 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 largely impacted by an increase in deposits of $46.03 million, largely offset by a decrease in borrowings of $34.81 million.

Previous wording

At December 31, 2024, 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% compared to a decrease of 1.3% at December 31, 2023. The Bank is within the guidelines set forth by the Board of Directors for interest rate sensitivity.

Current wording

At December 31, 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 3.4% compared to an increase of 1.7% at December 31, 2024. The Bank is within the guidelines set forth by the Board of Directors for interest rate sensitivity.

Previous wording

The Bank’s Tier 1 leverage ratio, as measured under State of Montana and FRB rules, increased from 9.75% as of December 31, 2023 to 10.07% as of December 31, 2024. The Bank’s strong capital position helps to mitigate its interest rate risk exposure.

Current wording

The Bank’s Tier 1 leverage ratio, as measured under State of Montana and FRB rules, increased from 10.07% as of December 31, 2024 to 10.62% as of December 31, 2025. The Bank’s strong capital position helps to mitigate its interest rate risk exposure.