What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-03-14 compared with 2024-03-06 · 281 added, 326 removed, 1878 unchanged (24% of the section changed)

2 unchanged sentences

We conducted an evaluation under the supervision and with the participation of our management including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”) of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as amended, as of December 31, 2024, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to management to allow timely decisions regarding required disclosure.

Based on that evaluation, our CEO and CFO concluded that as of December 31, 2023, our disclosure controls and procedures were effective.

Based on that evaluation, our CEO and CFO concluded that as of December 31, 2024, our disclosure controls and procedures were not effective as of such date due to a material weakness in internal control over financial reporting as described below.

Management Annual Report on Internal Control over Financial Reporting

6 unchanged sentences

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024.

Based on this assessment, management concluded that, as of December 31, 2023, the Company’s internal control over financial reporting was effective.

Based on this assessment, management concluded that, as of December 31, 2024, the Company’s internal control over financial reporting was not effective.

In connection with the preparation of this Annual Report on Form 10-K, we identified a material weakness in internal control over financial reporting related to the design of controls over preparation 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.

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 the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The control deficiency created a reasonable possibility that a material misstatement to the consolidated financial statements would not be prevented or detected on a timely basis.

As a result, management believes that, as of December 31, 2024, our internal control over financial reporting was not effective.

The Company’s independent registered public accounting firm, Moss Adams LLP has issued an adverse audit report on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024, which appears in Item 8 of this Form 10-K.

Following identification of the material weakness and prior to filing this Annual Report on Form 10-K, we completed procedures to ensure borrowings were classified correctly on the statement of cash flows for the year ended December 31, 2024.

Based on these procedures, management believes that our consolidated financial statements included in this Form 10-K have been prepared in accordance with U.S.

Our CEO and CFO have certified that, based on their knowledge, the financial statements, and other financial information included in this Form 10-K, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this Form 10-K.

Moss Adams LLP has issued an unqualified opinion on our financial statements, which is included in Item 8 of this Form 10-K.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the quarter ended December 31, 2024 that have materially affected, or were reasonably likely to materially affect, the Company’s internal control over financial reporting.

Remediation Plan

As noted above, subsequent to December 31, 2024, we identified a material weakness in internal control related to the review of the classification of borrowings in the financing activities section of the statement of cash flows.

Management, with oversight from the Audit Committee, is implementing measures designed to ensure that the control deficiency contributing to the material weakness is remediated so that controls are designed, implemented and operating effectively.

The remediation action includes restructuring the design of control activities, including consideration of system impacts, surrounding the classification of borrowing activities in order to facilitate appropriate presentation in the financial statements.

We believe this action will remediate the material weakness.

The weakness will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

We expect that the remediation of this material weakness will be completed in 2025.

OTHER INFORMATION.

105 unchanged sentences

Clark, Eagle Bancorp Montana, Inc., and Opportunity Bank of Montana (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed on June 1, 2023).

Fourth Amendment to Salary Continuation Agreement between Opportunity Bank of Montana and Laura F.

Clark adopted October 17, 2024 (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed on October 22, 2024).

First Amendment to Salary Continuation Agreement between Opportunity Bank of Montana and Miranda J.

Spaulding adopted October 17, 2024 (incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed on October 22, 2024).

Third Amendment to Salary Continuation Agreement between Opportunity Bank of Montana and Dale F.

Field adopted October 17, 2024 (incorporated by reference to Exhibit 10.3 of our Current Report on Form 8-K filed on October 22, 2024).

Second Amendment to Salary Continuation Agreement between Opportunity Bank of Montana and Rachel R.

Amdahl adopted November 1, 2024 (incorporate by reference to Exhibit 10.4 of our Current Report on Form 10-Q filed on November 11,2024).

First Amendment to Salary Continuation Agreement between Opportunity Bank of Montana and Alana Binde adopted November 1, 2024 (incorporate by reference to Exhibit 10.5 of our Current Report on Form 10-Q filed on November 11,2024).

Second Amendment to Salary Continuation Agreement between Opportunity Bank of Montana and Chantelle Nash adopted November 1, 2024 (incorporate by reference to Exhibit 10.6 of our Current Report on Form 10-Q filed on November 11,2024).

First Amendment to Salary Continuation Agreement between Opportunity Bank of Montana and Mark O'Neill adopted November 1, 2024 (incorporate by reference to Exhibit 10.7 of our Current Report on Form 10-Q filed on November 11,2024).

First Amendment to Salary Continuation Agreement between Opportunity Bank of Montana and Patrick D.

Rensmon adopted November 1, 2024 (incorporate by reference to Exhibit 10.8 of our Current Report on Form 10-Q filed on November 11,2024).

Insider Trading Policies and Procedures.

Subsidiaries of Registrant.

9 unchanged sentences

Eagle Bancorp Montana, Inc.

Clawback Policy

Clawback Policy (incorporated by reference to Exhibit 97.1 of our Annual Report on Form 10-K filed on March 6, 2024).

The schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K.

37 unchanged sentences

March 14, 2025

/s/ Benjamin G.

March 6, 2024

/s/ Cynthia A.

8 unchanged sentences

AND SUBSIDIARIES

Report of Independent Registered Public Accounting Firm ( Moss Adams LLP , Everett, Washington , PCAOB ID:

Report of Independent Registered Public Accounting Firm ( Moss Adams LLP , Spokane, Washington , PCAOB ID:

Financial Statements

8 unchanged sentences

Eagle Bancorp Montana, Inc.

and Subsidiaries

Opinion on the Financial Statements

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated statements of financial condition of Eagle Bancorp Montana, Inc.

(and subsidiaries) (the “Company”) as of December 31, 2024 and 2023, 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 also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2024 and 2023, 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.

Also in our opinion, because of the effect of the material weakness identified below on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Annual Report on Internal Control over Financial Reporting included in Item 9A.

Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting 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.

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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.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements 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.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable basis for our opinions.

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 the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weakness has been identified and included in management’s assessment in Item 9A:

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.

We considered the material weakness in determining the nature, timing, and extent of audit tests applied in our audit of the Company’s consolidated financial statements as of and for the year ended December 31, 2024, and our opinion on such consolidated financial statements was not affected.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

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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:

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

Our audit procedures related to qualitative factors included the following, among others:

Testing the design, implementation, and operating effectiveness of controls relating to management’s calculation of the allowance for credit losses, including controls over the identification and assessment of the qualitative factors used.

Testing the methodology used in the ACL calculation and evaluating whether the qualitative factors used in the calculation are supported by management’s analysis, including testing the key underlying information utilized by management;

or by performing an independent analysis of significant assumptions;

Testing the mathematical accuracy of the ACL calculation and the application of the qualitative factors within the calculation;

Developing an independent expectation of the ACL using a combination of internal and external data and comparing the expected balance to the Company’s recorded amounts.

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, 2024.

5 unchanged sentences

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.

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

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 selection of peer data utilized in the market approach, and the relative weight assigned to the different valuation methodologies.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

Our audit procedures related to the methods and assumptions used in the goodwill impairment tests included the following, among others:

Testing the design, implementation, and operating effectiveness of controls relating to the methods and assumptions used in the Company’s goodwill impairment tests;

With the assistance of our valuation specialist, (1) testing the reasonableness of the methods and certain key assumptions used and (2) performing a shadow calculation to recreate the results of the valuation model;

Evaluating the relative weight assigned to the valuations indicated by the market and income approaches;

Validating the completeness, accuracy, and reliability of underlying data used in our analysis;

Evaluating the reasonableness of the assumptions utilized by management in the determination of the estimated projected cash flows used in the income approach and the reasonableness of the selection of peer data utilized in the market approach.

Validating the completeness, accuracy, and reliability of underlying data used in the Company’s analysis;

Evaluating the reasonableness of the assumptions utilized by the Company in the determination of the estimated projected cash flows used in the income approach and the reasonableness of the selection of peer data utilized in the market approach.

/s/ Moss Adams LLP

Everett, Washington

Spokane, Washington

March 14, 2025

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Mortgage loans held-for-sale, at fair value

13,368 11,432

Loans receivable, net of allowance for credit losses of $ 16,850 and $ 16,440 at December 31, 2024 and December 31, 2023, respectively

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15,376 15,853

Assets held-for-sale, at fair value

Assets held-for-sale, at cost

Premises and equipment, net

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16,267 19,089

$ 2,103,090 $ 2,075,666

Deposit accounts:

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$ 2,103,090 $ 2,075,666

(1) Allowance for credit losses at December 31, 2023;

allowance for loan losses at December 31, 2022.

The accompanying notes are an integral part of these consolidated financial statements.

7 unchanged sentences

Securities available-for-sale

10,428 11,376

FHLB and FRB dividends

3 unchanged sentences

INTEREST EXPENSE:

27,838 17,857

FHLB advances and other borrowings

1 unchanged sentence

Total interest expense

40,773 29,138

NET INTEREST INCOME

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Data processing

Software subscriptions

Federal Deposit Insurance Corporation ("FDIC") insurance premiums

Professional and examination fees

Acquisition costs

Other noninterest expense

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$ 1.24 $ 1.29

(1) Provision for credit losses for the year ended December 31, 2023;

provision for loan losses for the year ended December 31, 2022.

The accompanying notes are an integral part of these consolidated financial statements.

4 unchanged sentences

$ 9,778 $ 10,056

OTHER ITEMS OF COMPREHENSIVE INCOME (LOSS) BEFORE TAX:

OTHER ITEMS OF COMPREHENSIVE (LOSS) INCOME BEFORE TAX:

Change in fair value of investment securities available-for-sale

1 unchanged sentence

Reclassification for net realized losses on investment securities available-for-sale

Total other comprehensive income (loss)

8,704 ( 40,520 )

Income tax (provision) benefit related to securities available-for-sale

Total other comprehensive (loss) income

( 273 ) 8,704

COMPREHENSIVE INCOME (LOSS)

Income tax benefit (provision) related to securities available-for-sale

COMPREHENSIVE INCOME

$ 9,577 $ 16,468

9 unchanged sentences

- - - - - 9,778 - 9,778

Impact of the adoption of ASC 326 Credit Losses

( 1,616 ) ( 1,616 )

Other comprehensive income

Other comprehensive loss

- - - - - - ( 201 ) ( 201 )

14 unchanged sentences

- - - - - 10,056 - 10,056

Other comprehensive loss

Other comprehensive income

- - - - - - 6,412 6,412

Dividends paid ($ 0.525 per share)

Impact of the adoption of ASC 326 Credit Losses

- - - - - ( 1,616 ) - ( 1,616 )

Stock issued in connection with First Community Bancorp, Inc.

Dividends paid ($ 0.555 per share)

- - - - - ( 4,442 ) - ( 4,442 )

18 unchanged sentences

Provision for credit losses

Recovery of servicing rights

Net amortization of investment securities premiums and discounts

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ESOP compensation expense for allocated shares

Deferred income tax (benefit) provision

Deferred income tax benefit

( 529 ) ( 671 )

5 unchanged sentences

217,772 353,778

Net gain on sale of real estate owned and other repossessed assets

Net gain on sale/disposal of premises and equipment

( 61 ) ( 105 )

Net realized loss on sales of available-for-sale securities

Net appreciation in cash surrender value of life insurance

3 unchanged sentences

( 405 ) ( 1,201 )

516 ( 10,273 )

Accrued expenses and other liabilities

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( 10,980 ) ( 28,126 )

FHLB stock purchased

FHLB stock redeemed (purchased)

1,413 ( 4,102 )

FRB stock purchased

Net cash received from acquisitions

Loan origination and principal collection, net

( 36,204 ) ( 130,742 )

Proceeds (purchase) of bank owned life insurance

(Purchase) proceeds of bank owned life insurance

( 3,275 ) 1,230

6 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES:

Net (decrease) increase in deposits

Net increase (decrease) in deposits

46,033 ( 77 )

Net decrease in repurchase agreements

Net short-term advances from FHLB and other borrowings

Net short-term (payments) advances from FHLB and other borrowings

( 107,724 ) 91,343

Long-term advances from FHLB and other borrowings

Advances on long-term FHLB and other borrowings

135,000 15,000

Payments on long-term FHLB and other borrowings

Proceeds from issuance of subordinated debentures

Repayment of subordinated debentures

Payments for debt issuance costs

Purchase of treasury stock

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6,272 101,593

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

2,734 ( 39,623 )

NET INCREASE IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS, beginning of period

2 unchanged sentences

$ 31,559 $ 24,545

(1) Provision for credit losses for the year ended December 31, 2023;

provision for loan losses for the year ended December 31, 2022.

The accompanying notes are an integral part of these consolidated financial statements.

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Cash paid during the year for income taxes, net of refunds

Acquisitions:

Assets acquired, excluding cash

Liabilities assumed

NON-CASH OPERATING, INVESTING AND FINANCING ACTIVITIES:

Increase (decrease) in fair value of securities available-for-sale

(Decrease) increase in fair value of securities available-for-sale

$ ( 273 ) $ 8,704

Mortgage servicing rights recognized

Right-of-use assets obtained in exchange for lease liabilities

Right-of-use assets (used) obtained in exchange for lease liabilities

Loans transferred to real estate and other assets acquired in foreclosure

Stock issued in connection with acquisitions

Commitments to invest in Low-Income Housing Tax Credit projects

(Increase) decrease in commitments to invest in Low-Income Housing Tax Credit projects

( 2,445 ) 2,660

Cumulative effect adjustment to retained earnings due to the adoption of ASC 326 Credit Losses

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Outstanding funding obligations for LIHTC projects are included in other liabilities on the statement of financial condition and totaled $ 215,000 at December 31, 2024 .

The majority of these obligations are expected to be funded in 2024.

On January 1, 2020, the Company acquired Western Holding Company of Wolf Point (“WHC”), a Montana corporation, and WHC’s wholly-owned subsidiary, Western Bank of Wolf Point ("WB"), a Montana chartered commercial bank.

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Principles of Consolidation

The consolidated financial statements include Eagle, the Bank, the Trust, OFS and OHF.

The consolidated financial statements include Eagle, the Bank, Eagle Bancorp Statutory Trust I (the "Trust"), OFS and OHF.

All significant intercompany transactions and balances have been eliminated in consolidation.

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The Company has evaluated events and transactions subsequent to December 31, 2024 for recognition and/or disclosure.

During January 2025, the Company purchased 50,000 shares at an average price of $ 15.11 under its repurchase plan.

Capital Management and Regulatory Matters for additional information regarding the repurchase plan.

Significant Group Concentrations of Credit Risk

286 unchanged sentences

Goodwill is recorded upon completion of a business combination as the difference between the purchase price and the fair value of net identifiable assets acquired.

Subsequent to initial recognition, the Company tests goodwill for impairment annually as of October 31, or more often if events or circumstances change that indicate impairment may exist.

Subsequent to initial recognition, the Company tests goodwill for impairment annually as of October 31, or more often if events or circumstances, such as adverse changes in the business climate indicate there may be impairment.

A goodwill impairment test is performed by comparing the fair value of the reporting unit with its carrying value.

An impairment charge is recorded for the amount by which the carrying amount exceeds the reporting unit's fair value.

A blend of both the market and income approaches is used in valuing the reporting unit’s fair value.

For goodwill considerations the Company is a single reporting unit.

A weighted average of both the market and income approaches is used in valuing the reporting unit’s fair value.

Weightings are assigned to the approaches regarding fair value and the sensitivity of other weighting scenarios is considered.

3 unchanged sentences

The sensitivity of a range of reasonable discount rates based on the current economic environment is considered.

During the quarter ended September 30, 2023, Management determined that a triggering event had occurred because of a decrease in the Company's stock price and a revision in the earnings outlook in comparison to budget.

These conditions were primarily due to economic uncertainty and market volatility from the rising interest rate environment.

As a result, the Company performed an interim goodwill impairment assessment as of August 31, 2023, and concluded that goodwill was not impaired.

Our annual impairment tests as of October 31, 2023 and 2022 also did not result in impairment.

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.

7 unchanged sentences

Segment Reporting

While management monitors the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis.

Accordingly, all of the operations are considered by management to be aggregated in one reportable operating segment.

Management considers operations to be aggregated in one operating segment, as well as one reportable segment.

The Company operates as one line of business (community banking) by providing a similar base of commercial and retail customers with comparable product and service offerings throughout our Montana markets.

The Company adopted ASU No.

2023 - 07, Segment Reporting (Topic 280 ) during the year ended December 31, 2024.

The President/Chief Executive Officer (“CEO”) serves as the Company’s chief operating decision maker (“CODM”).

The CODM is responsible for assessing performance and allocating operating and capital expenditure resources.

The CODM regularly assesses the performance of the single operating and reporting segment based on consolidated net income.

The CODM reviews expenses at a level consistent with those reported in the Company’s consolidated statements of income.

All significant expense categories are reflected in the consolidated statements of income.

The measure of segment assets is reflected in the consolidated statements of financial condition as total assets.

Recently Adopted Accounting Pronouncements

On January 1, 2023, the Company adopted Accounting Standards Update ("ASU") No.

2017 - 04, Intangibles – Goodwill and Other (Topic 350 ) to amend and simplify current goodwill impairment testing to eliminate Step 2 from the current provisions.

In computing the implied fair value of goodwill under Step 2, an entity had to determine the fair value at the impairment testing date of its assets and liabilities as if they were acquired in a business combination.

Under the new guidance, an entity should perform the goodwill impairment test by comparing the fair value of a reporting unit with its carrying value and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value.

An entity still has the option to perform the qualitative assessment for a reporting unit to determine if a quantitative impairment test is necessary.

The adoption of ASU No.

2017 - 04 did not have a material impact on the consolidated financial statements.

Application of New Accounting Guidance Adopted in 2023

On January 1, 2023, the Company adopted ASU No.

2016 - 13, Financial Instruments – Credit Losses (Topic 326 ), intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations.

This guidance is commonly referred to as Current Expected Credit Losses ("CECL"), and the CECL model is based on expected credit losses rather than the model used for periods prior to January 1, 2023, which was based on incurred losses.

The allowance for credit losses is established for current expected credit losses on the Company's loan portfolio, including unfunded loan commitments, for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts.

Financial institutions and other organizations will now use forward-looking information to better estimate their credit losses.

The standard also requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio.

These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements.

Additionally, Topic 326 amends the accounting for credit losses on available-for-sale debt securities, requiring credit losses on available-for-sale debt securities to be presented as an allowance rather than a write-down for those securities management does not intend to sell or is not likely to be required to sell.

EAGLE BANCORP MONTANA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Organization and Summary of Significant Accounting Policies – continued

On January 1, 2023, the Company also adopted ASU No.

2022 - 02, Financial Instruments – Credit Losses (Topic 326 ), Troubled Debt Restructurings and Vintage Disclosures.

This guidance was an update to ASU No.

2016 - 13, and the Company adopted using the modified retrospective transition method.

The amendments in this update eliminated the accounting guidance for troubled debt restructure ("TDR") loans and enhanced the disclosure requirements for certain loan modifications of receivables made to borrowers experiencing financial difficulty.

The Company adopted Topic 326 using the modified retrospective basis with the cumulative effect of initially applying the amendments recognized in retained earnings.

Results for reporting periods beginning after January 1, 2023 are presented under ASC 326.

Results from periods prior to January 1, 2023 are presented using previously applicable U.S.

The adoption resulted in an increase of $ 700,000 to our allowance for credit losses ("ACL"), an increase of $ 1,500,000 to our allowance for unfunded loan commitments, and a net-of-tax cumulative effect adjustment of $ 1,616,000 to decrease the beginning balance of retained earnings.

The adoption of this guidance did not have an impact on the Company's available-for-sale securities.

However, any subsequent estimated credit losses will be recognized through an allowance for credit losses associated with the applicable securities.

The Company finalized the adoption of ASC 326 as of January 1, 2023 as detailed in the following table:

January 1, 2023 As Reported Under Topic 326

January 1, 2023 Pre-Topic 326 Adoption

Impact of Topic 326 Adoption

Real estate loans:

Residential 1-4 family

$ 1,493 $ 1,472 $ 21

Commercial real estate

9,571 9,037 534

2,781 2,640 141

Allowance for credit losses on loans

$ 14,700 $ 14,000 $ 700

Allowance for credit losses on unfunded loan commitments

$ 1,500 $ - $ 1,500

Recently Issued Accounting Pronouncements

In March 2020 , the FASB issued ASU No.

7 unchanged sentences

In November 2023, the FASB issued ASU No.

2023 - 07, Segment Report (Topic 280 ):

2023 - 07, Segment Reporting (Topic 280 ):

Improvements to Reportable Segment Disclosures.

2 unchanged sentences

Retrospective application is required.

The Company is currently evaluating the effect the updated guidance will have on the Company's financial statement disclosures as the Company has a single reportable segment.

The Company adopted the updated guidance during the year ended December 31, 2024 and it did not have a significant impact on the Company's financial statement disclosures as the Company has a single reportable segment.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU No.

7 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Mergers and Acquisitions

Effective April 30, 2022, after receipt of regulatory approval, Eagle completed its previously announced merger with FCB.

The acquisition closed after receipt of approvals from regulatory authorities, approval of FCB shareholders and the satisfaction of other closing conditions.

The total consideration paid was $ 38,577,000 and included cash consideration of $ 10,226,000 and common stock issued of $ 28,351,000 .

All of the assets acquired and liabilities assumed were recognized at their acquisition-date fair value, while transaction costs associated with the business combination were expensed as incurred.

Determining the fair value of assets and liabilities is a complicated process involving significant judgment regarding methods and assumptions used to calculate estimated fair values.

The excess of the acquisition consideration over the fair value of assets acquired and liabilities assumed, if any, is allocated to goodwill.

The goodwill recorded is not deductible for federal income tax purposes.

The following table summarizes the fair values of the assets acquired and liabilities assumed, consideration paid and the resulting goodwill.

(In Thousands)

Assets acquired:

Cash and cash equivalents

Securities available-for-sale

Loans receivable

Premises and equipment

Cash surrender value of life insurance

Core deposit intangible

Total assets acquired

Liabilities assumed:

Accrued expenses and other liabilities

Other borrowings

Total liabilities assumed

Net assets acquired

Consideration paid:

Common stock issued ( 1,396,596 shares)

Total consideration paid

Goodwill resulting from acquisition

FCB investments were written down an additional $ 4,559,000 to fair value on the date of acquisition based on market prices obtained from an independent third -party.

For acquisitions, the fair value analysis of the loan portfolios resulted in a valuation adjustment for each loan based on an amortization schedule of expected cash flow.

Individual amortization schedules were used for each loan over a certain amount and those with specifically identified loss exposure.

The remainder of the loans were grouped by type and risk rating into loan pools (based on loans type, fixed or variable interest rate, revolving or term payments and risk rating).

Yield inputs for the amortization schedules included contractual interest rates, estimated prepayment speeds, liquidity adjustments and market yields.

Credit inputs for the amortization schedules included probability of payment default, loss given default rates and individually identified loss exposure.

The total accretable discount on FCB acquired loans was $ 5,416,000 as of April 30, 2022.

During the year ended December 31, 2023, accretion of the loan discount was $ 853,000 compared to $ 1,297,000 during the year ended December 31, 2022.

T he remaining accretable loan discount was $ 3,266,000 as of December 31, 2023.

Three impaired loans were acquired through the FCB acquisition with insignificant balances as of April 30, 2022.

EAGLE BANCORP MONTANA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Mergers and Acquisitions – continued

Fair value adjustments recorded for FCB related to premises and equipment were insignificant overall.

The Company used independent third -party appraisals in the determination of the fair value of acquired assets.

Core deposit intangible assets of $ 7,004,000 were recorded for FCB and are being amortized using an accelerated method over the estimated useful lives of the related deposits of 10 years from the date of acquisition.

Other Intangible Assets for more information.

For acquisitions, the core deposit intangible value is a function of the difference between the cost of the acquired core deposits and the alternative cost of funds.

These cash flow streams were discounted to present value.

The fair value of other deposit accounts acquired were valued by estimating future cash flows to be received or paid from individual or homogenous groups of assets and liabilities and then discounting those cash flows to a present value using rates of return that were available in financial markets for similar financial instruments on or near the acquisition date.

Direct costs related to the acquisitions were expensed as incurred.

The Company recorded no acquisition costs related to FCB d uring the year ended December 31, 2023.

The Company recorded acquisition costs related to FCB of $ 2,296,000 during the year ended December 31, 2022.

Acquisition costs included professional fees and data processing expenses incurred related to the acquisitions.

Operations of acquired entities have been included in the consolidated financial statements since date of acquisition.

The Company does not consider them as separate reporting segments and does not track the amount of revenues and net income attributable since acquisition.

As such, it is impracticable to determine such amounts for the period from acquisition date through December 31, 2023 .

Investment Securities

47 unchanged sentences

( 169 ) ( 291 )

Net realized gain on sale of available-for-sale securities

Net realized loss on sale of available-for-sale securities

$ ( 141 ) $ ( 222 )

76 unchanged sentences

1,520,646 1,484,489

Deferred loan fees, net (1)

Allowance for credit losses

2 unchanged sentences

$ 1,503,796 $ 1,468,049

(1) Deferred loan fees, net of $1,389 included in individual loan buckets above for the year ended December 31, 2023.

(2) Allowance for credit losses for the year ended December 31, 2023;

allowance for loan losses for the year ended December 31, 2022.

Included in the above are loans guaranteed by U.S.

3 unchanged sentences

Allowance for credit losses on loans:

Beginning balance, December 31, 2022, prior to adoption of ASC 326

$ 1,472 $ 9,037 $ 509 $ 342 $ 2,640 $ 14,000

Impact of adopting ASC 326

Beginning balance, January 1, 2024

$ 1,866 $ 10,691 $ 540 $ 304 $ 3,039 $ 16,440

8 unchanged sentences

Loans – continued

The following table provides allowance for loan losses activity for the year ended December 31, 2022.

The following table provides allowance for credit losses activity for the year ended December 31, 2023 .

(In Thousands)

Allowance for loan losses:

Balance, January 1, 2022

$ 1,596 $ 7,470 $ 533 $ 365 $ 2,536 $ 12,500

( 199 ) - ( 32 ) ( 31 ) ( 299 ) ( 561 )

4 30 - 4 22 60

71 1,537 8 4 381 2,001

Balance, December 31, 2022

Allowance for credit losses on loans:

Beginning balance, January 1, 2023, prior to adoption of ASC 326

$ 1,472 $ 9,037 $ 509 $ 342 $ 2,640 $ 14,000

Balance, December 31, 2022 allocated to loans individually evaluated for impairment

Impact of adopting ASC 326

21 534 3 1 141 700

Balance, December 31, 2022 allocated to loans collectively evaluated for impairment

- - - ( 50 ) ( 129 ) ( 179 )

Loans receivable:

Balance, December 31, 2022

195 23 13 3 19 253

Balance, December 31, 2022 of loans individually evaluated for impairment

178 1,097 15 8 368 1,666

Balance, December 31, 2022 of loans collectively evaluated for impairment

Total ending allowance balance, December 31, 2023

$ 1,866 $ 10,691 $ 540 $ 304 $ 3,039 $ 16,440

46 unchanged sentences

37,265 21,430 35,323 9,628 5,033 8,676 5,451 122,806

Special Mention

- - 438 - 2 965 - 1,405

4 unchanged sentences

21,543 18,083 29,983 18,991 20,076 33,721 2,323 144,720

Special Mention

- 342 813 205 - 220 - 1,580

188 - - - 65 57 - 310

Total Farmland

3 unchanged sentences

1,031 1,438 3,248 362 483 2,234 88,230 97,026

Special Mention

- - - - - 22 93 115

- - - 43 - 89 270 402

Total Home Equity

19 unchanged sentences

39,001 21,690 9,014 4,215 3,143 1,608 52,494 131,165

Special Mention

1,811 159 15 - - 37 596 2,618

- - - - 1 515 47 563

Total Agricultural

11 unchanged sentences

Loans – continued

Internal classification of the loan portfolio was as follows (prior to the adoption of ASU No.

December 31, 2023

Revolving Loans

(In Thousands)

Real estate loans:

RESIDENTIAL 1-4 FAMILY

$ 10,987 $ 15,696 $ 24,575 $ 38,738 $ 28,122 $ 30,938 $ 6,179 $ 155,235

Special Mention

- - - 940 - 228 - 1,168

- - - - - 175 - 175

Total Residential 1-4 family

10,987 15,696 24,575 39,678 28,122 31,341 6,179 156,578

Current-period gross charge-offs

- - - - - - - -

RESIDENTIAL 1-4 FAMILY CONSTRUCTION

- - 6,088 21,889 14,700 - - 42,677

- - 757 - - - - 757

Total Residential 1-4 family construction

- - 6,845 21,889 14,700 - - 43,434

Current-period gross charge-offs

- - - - - - - -

COMMERCIAL REAL ESTATE

55,820 50,408 141,407 154,941 63,174 103,620 31,122 600,492

Special Mention

2,593 1,948 493 1,512 1,314 - - 7,860

- - - - - 339 - 339

Total Commercial real estate

58,413 52,356 141,900 156,453 64,488 103,959 31,122 608,691

Current-period gross charge-offs

- - - - - - - -

COMMERCIAL CONSTRUCTION AND DEVELOPMENT

6,900 6,399 19,500 80,061 31,149 3,762 8,285 156,056

Special Mention

- - 441 511 134 990 - 2,076

Total Commercial construction and development

6,900 6,399 19,941 80,572 31,283 4,752 8,285 158,132

Current-period gross charge-offs

- - - - - - - -

1 unchanged sentence

483 65 - 407 - 787 - 1,742

Total Farmland

10,034 21,793 19,795 36,698 19,452 30,338 4,480 142,590

Current-period gross charge-offs

- - - - - - - -

621 565 376 3,630 1,736 2,398 77,409 86,735

- - - - - 107 90 197

Total Home Equity

621 565 376 3,630 1,736 2,505 77,499 86,932

Current-period gross charge-offs

- - - - - - - -

449 1,953 3,398 8,109 13,083 1,069 1,977 30,038

Special Mention

- - - 18 - - - 18

- 37 - 8 - 22 2 69

Total Consumer

449 1,990 3,398 8,135 13,083 1,091 1,979 30,125

Current-period gross charge-offs

1 - 28 2 16 4 - 51

2,834 20,496 22,804 23,581 31,661 6,354 21,914 129,644

Special Mention

- 25 33 109 - 98 2,741 3,006

- - 17 9 - 33 - 59

Total Commercial

2,834 20,521 22,854 23,699 31,661 6,485 24,655 132,709

Current-period gross charge-offs

- - 26 - - 8 - 34

1,473 5,818 7,241 16,856 40,176 1,517 50,461 123,542

427 55 435 282 - 557 - 1,756

Total Agricultural

1,900 5,873 7,676 17,138 40,176 2,074 50,461 125,298

Current-period gross charge-offs

- - - 1 - 93 - 94

88,635 123,063 245,184 384,096 243,253 179,209 201,827 1,465,267

Special Mention

2,593 1,973 967 3,090 1,448 1,316 2,741 14,128

910 157 1,209 706 - 2,020 92 5,094

$ 92,138 $ 125,193 $ 247,360 $ 387,892 $ 244,701 $ 182,545 $ 204,660 $ 1,484,489

The following tables include information regarding delinquencies within the loan portfolio.

35 unchanged sentences

$ 1,821 $ 26 $ 1,847 $ 6,577 $ 1,818 $ 1,474,247 $ 1,484,489

Interest income recognized on nonaccrual loans for the year ended December 31, 2023 was considered insignificant.

Interest payments received on a cash basis related to nonaccrual loans was $471,000 at December 31, 2023.

Interest income recognized on impaired loans for the year ended December 31, 2024 and 2023 was considered insignificant.

Interest payments received on a cash basis related to nonaccrual loans were $ 522,000 at December 31, 2024 and $ 471,000 at December 31, 2023.

EAGLE BANCORP MONTANA, INC.

12 unchanged sentences

$ 3,684 $ 692 $ 108

Prior to the implementation of ASU No.

2016 - 13, Financial Instruments – Credit Losses (Topic 326 ) on January 1, 2023, a loan was considered impaired when the Company determined it was probable that it would be unable to collect all amounts due to the contractual terms of the loan agreement, including scheduled interest payments.

Various factors determined impairment such as the financial condition of the borrower, value of the underlying collateral, and general economic conditions.

The implementation of ASU No.

2016 - 13 significantly changed disclosures related to loans and, as a result, certain disclosures are no longer required.

The following tables represent disclosures for the prior period that are no longer required as of January 1, 2023, but are included in this Form 10 -K since the Company is required to disclose comparative information.

The following table provides additional information on impaired loans with and without related allowance reserves at December 31, 2022:

December 31, 2023

Business Assets

(In Thousands)

5 unchanged sentences

$ 5,220 $ 2,765 $ 36

Commercial construction and development

754 866 - 1,192

107 133 - 111

184 232 35 350

1,535 1,633 115 1,647

$ 6,702 $ 7,176 $ 150 $ 6,881

Interest income recognized on impaired loans for the year ended December 31, 2022 was considered insignificant.

Interest payments received on a cash basis related to impaired loans was $ 415,000 at December 31, 2022 .

EAGLE BANCORP MONTANA, INC.

3 unchanged sentences

The Company offers modifications of loans to borrowers experiencing financial difficulty by providing principal forgiveness, interest rate reductions, term extensions, other than insignificant payment delays, or any combination of these.

During the year ended December 31, 2024 , the Company modified one commercial loan and two farmland loans.

The commercial loan was modified to allow for interest only payments for 6 months.

The loan had an amortized cost of $ 124,000 or 0.09 % of commercial loans at December 31, 2024 .

The first farmland loan was modified by extending the payment for seven months during the second quarter of 2024.

The loan paid off during the fourth quarter of 2024.

The second farmland loan was modified by consolidating debts and refinancing into a 15 -year loan with a variable interest rate adjustable every 5 years.

The loan had an amortized cost of $ 188,000 or 0.13 % of farmland loans at December 31, 2024 .

During the year ended December 31, 2023, the Company modified two commercial real estate loans.

3 unchanged sentences

The second loan was paid off during the year ended December 31, 2023.

There was no forgiveness of principal for either of the loans, and the remaining loan was considered current with its modified terms as of December 31, 2023.

Prior to the adoption of ASU No.

2022 - 02, during the year ended December 31, 2022 , there were eight new TDR loans.

Four of the eight loans were commercial real estate loans and the recorded investments at time of restructure were $ 471,000 , $ 1,552,000 , $ 812,000 and $ 429,000 .

No charge-offs were incurred, and the loans continue to be on accrual status.

Two of the loans were commercial loans.

The first commercial loan had a recorded investment at time of restructure of $ 6,000 and was paid off in the year ended December 31, 2023.

The second commercial loan had a recorded investment at time of restructure of $ 134,000 .

No charge-off was incurred and the loan continues to be on accrual status.

The remaining two loans were agricultural loans.

The first agricultural loan had a recorded investment at time of restructure of $ 145,000 and was paid off in the year ended December 31, 2023.

The second agricultural loan had a recorded investment at the time of restructure of $ 331,000 .

No charge-off was incurred and the loan is on accrual status.

There were two farmland loans modified as TDRs that defaulted during the year ended December 31, 2022 where the default occurred within 12 months of restructuring.

However, subsequent payments were made and the loans were no longer in default as of December 31, 2022.

There was no forgiveness of principal for either of the loans, and the remaining loan with its modified terms was in the 30 - 89 days past due category as of December 31, 2024.

Loans are granted to directors and officers of the Company in the ordinary course of business on substantially the same terms as those prevailing at the time for comparable transactions with other persons.

34 unchanged sentences

$ 15,376 $ 15,853

Valuation allowance:

Beginning balance

Recovery of mortgage servicing rights

Ending balance

Mortgage servicing rights, net

$ 15,853 $ 15,412

Recovery of servicing rights is included in other noninterest expense on the consolidated statements of income.

There were no valuation allowances during December 31, 2024 and 2023.

EAGLE BANCORP MONTANA, INC.

2 unchanged sentences

Mortg age Servicing Rights – continued

The fair values of these rights were $ 20,388,000 an d $ 19,288,000 at December 31, 2023 and 2022 , respectively.

The fair value of servicing rights was determined at loan level, depending on the interest rate and term of the specific loan, using the following valuation assumptions:

The fair values of these mortgage servicing rights were $ 20,370,000 and $ 20,388,000 at December 31, 2024 and 2023 , respectively.

The fair value of mortgage servicing rights was determined at loan level, depending on the interest rate and term of the specific loan, using the following valuation assumptions:

Key assumptions:

20 unchanged sentences

$ 101,540 $ 94,282

Depreciation expense was $ 3,934,000 a nd $ 3,576,000 for the years ended December 31, 2023 and 2022 , respectively.

Depreciation expense was $ 5,170,000 and $ 3,934,000 for the years ended December 31, 2024 and 2023 , respectively.

The Company leases locations under various operating lease agreements.

18 unchanged sentences

Total lease cost

$ 713 $ 2,501

The following table presents the maturities of lease liabilities at December 31, 2024 for future periods:

34 unchanged sentences

At December 31, 2024 and 2023 , the Company he ld $ 632,951,000 and $ 618,784,000 , respectively, in deposit accounts that met or exceeded the Federal Deposit Insurance Corporation (“FDIC”) requirements of $250,000 and greater.

Time certificates of deposits in clude $ 0 a nd $ 247,000 related to certificates covered by the Certificate of Deposit Account Registry Services ("CDARS") program at December 31, 2023 and 2022 , respectively.

Time certificates of deposit also include $ 72,168,000 and $ 0 of fixed rate brokered certificates at December 31, 2023 and 2022 , respectively.

Time certificates of deposit include $ 0 and $ 72,168,000 of fixed rate brokered certificates at December 31, 2024 and 2023 , respectively.

EAGLE BANCORP MONTANA, INC.

9 unchanged sentences

18,653 11,607

$ 27,838 $ 17,857

At December 31, 2024 and 2023 , the Company reclassified $ 252,000 and $ 242,000 , respectively, in overdrawn deposits as loans.

24 unchanged sentences

The Company did not utilize the program during 2023.

however, this is another available funding source.

In March of 2024, the Company accessed borrowings through the BTFP.

In September of 2024, the Company paid off the borrowings.

In addition, at December 31, 2024 , Eagle had a $ 15,000,000 line of credit with Bell Bank.

The line of credit is secured by Eagle's ownership of the Bank's stock.

The balance of this line of credit w as $ 0 at both December 31, 2023 and 2022.

The balance of this line of credit was $ 0 at both December 31, 2024 and 2023 .

Federal Funds Purchased

22 unchanged sentences

The notes bear interest at an annual fixed rate of 3.50 % payable semi-annually.

Starting February 1, 2027, interest will accrue at a floating rate per annum equal to a benchmark rate, which is expected to be three -month term SOFR plus a spread of 218.0 basis points, payable quarterly.

Starting February 1, 2027, interest will accrue at a floating rate per annum equal to a benchmark rate, which is expected to be three -month term Secured Overnight Financing Rate (" SOFR ") plus a spread of 218.0 basis points, payable quarterly.

The notes are subject to redemption at the option of the Company on or after February 1, 2027.

6 unchanged sentences

The subordinated debentures qualify as Tier 2 capital for regulatory capital purposes.

In February 2017, the Company completed the issuance, through a private placement, of $ 10,000,000 aggregate principal amount of 5.75% fixed senior unsecured notes which matured on February 15, 2022.

The interest was paid semi-annually through maturity date.

The notes were not subject to redemption at the option of the Company.

In September 2005, the Company completed the private placement of $ 5,155,000 in subordinated debentures to the Trust.

48 unchanged sentences

( 435 ) ( 512 )

( 94 ) ( 159 )

Total deferred income tax (benefit) provision

23 unchanged sentences

$ 10,364 $ 9,771

(1) Allowance for credit losses at December 31, 2023;

allowance for loan losses at December 31, 2022.

The Company believes, based upon the available evidence, that all deferred tax assets will be realized in the normal course of operati ons.

12 unchanged sentences

( 295 ) -2.59 ( 342 ) -2.93

Transaction costs

- 0.00 241 1.74

Income from bank-owned life insurance

8 unchanged sentences

The net investment performance is recognized in the statement of income as a component of income tax provision (benefit) .

Amortization of the investment in LIHTC projects was $ 870,000 for the year ended December 31, 2023.

The total federal tax credits expected to be received are $ 9,693,000 and will be claimed over an estimated 10 -year credit allowance period.

Amortization of the investment in LIHTC projects wa s $ 890,000 for the year ended December 31, 2024 and $ 870,000 for the year ended December 31, 2023 .

There is no non-income-tax related activity recognized from the investments in LIHTC projects.

Accumulated Other Comprehensive Income (Loss)

5 unchanged sentences

Balance, January 1, 2024

Other comprehensive income, before reclassifications and income taxes

Other comprehensive loss, before reclassifications and income taxes

Amounts reclassified from accumulated other comprehensive loss, before income taxes

Income tax provision

Total other comprehensive income

Income tax benefit

Total other comprehensive loss

Balance, December 31, 2024

Balance, January 1, 2023

Other comprehensive loss, before reclassifications and income taxes

Other comprehensive income, before reclassifications and income taxes

Amounts reclassified from accumulated other comprehensive income, before income taxes

Income tax benefit

Total other comprehensive loss

Income tax provision

Total other comprehensive income

Balance, December 31, 2023

16 unchanged sentences

$ 1.24 $ 1.29

Restricted stock units excluded from the diluted average outstanding share calculation

Restricted stock units excluded from the diluted average outstanding share calculation because their effect would be anti-dilutive

Capital Management and Regulatory Matters

14 unchanged sentences

There are no conditions or events since the notification that management believes have changed the Bank's category.

The Company's and the Bank’s actual capital amounts and ratios as of December 31, 2023 are presented in the table below and all of the ratios, with the exception of the Tier 1 capital to adjusted total average assets ratio, include the capital conservation buffer of 2.50%:

The Bank’s actual capital amounts and ratios as of December 31, 2024 are presented in the table below and all of the ratios, with the exception of the Tier 1 capital to adjusted total average assets ratio, include the capital conservation buffer of 2.50%:

Minimum Required

6 unchanged sentences

Total risk-based capital to risk weighted assets

$ 239,228 14.20 % $ 176,863 10.50 N/A N/A

$ 229,316 13.49 % $ 178,521 10.50 % $ 170,020 10.00 %

Tier 1 capital to risk weighted assets

166,498 9.88 143,175 8.50 N/A N/A

211,066 12.41 144,517 8.50 136,016 8.00

Common equity Tier 1 capital to risk weighted assets

161,498 9.59 117,909 7.00 N/A N/A

211,066 12.41 119,014 7.00 110,513 6.50

Tier 1 capital to adjusted total average assets

166,498 8.06 82,636 4.00 N/A N/A

211,066 10.07 83,861 4.00 104,826 5.00

13 unchanged sentences

$ 218,909 13.01 % $ 176,692 10.50 % $ 168,278 10.00 %

$ 163,560 10.50 %

202,905 13.04 163,444 10.50 155,661 10.00

Tier 1 capital to risk weighted assets

150,595 9.67 132,406 8.50 N/A N/A

201,179 11.96 143,037 8.50 134,623 8.00

Common equity Tier 1 capital to risk weighted assets

145,594 9.35 109,040 7.00 N/A N/A

201,179 11.96 117,795 7.00 109,381 6.50

Tier 1 capital to adjusted total average assets

150,595 7.78 77,422 4.00 N/A N/A

201,179 9.75 82,569 4.00 103,212 5.00

2 unchanged sentences

Dividends in excess of such amount require approval of the Division of Banking.

The Bank paid no dividends during the years ended December 31, 2023 and 2022 , respectively, to Eagle.

Eagle paid divide nds of $ 0.555 and $ 0.525 per share to its shareholders during the years ended December 31, 2023 and 2022 , respectively.

The Bank paid dividends of $ 3,700,000 to Eagle during the year ended December 31, 2024.

No dividends were paid to Eagle during the year ended December 31, 2023.

Eagle paid dividend s of $ 0.565 an d $ 0.555 per share to its shareholders during the years ended December 31, 2024 and 2023 , respectively.

Stock Repurchase Program

On April 18, 2024, Eagle's Board of Directors (the "Board") authorized the repurchase of up to 400,000 shares of its common stock beginning May 1, 2024.

Under the plan, shares may be purchased by the Company on the open market or in privately negotiated transactions.

The extent to which the company repurchases its shares and the timing of such repurchase will depend on market conditions and other corporate considerations.

No shares were purchased during the second or third quarter of 2024 under this plan.

During the fourth quarter of 2024, 25,000 shares were purchased under this plan at an average price of $ 16.74 .

The plan expires on May 1, 2025.

On April 20, 2023, Eagle's Board of Directors authorized the repurchase of up to 400,000 shares of its common stock beginning May 1, 2023.

3 unchanged sentences

No shares were purchased during the third or fourth quarter of 2023 under this plan.

The plan expires on May 1, 2024.

No shares were purchased during the first or second quarter of 2024 under this plan.

The plan expired on May 1, 2024.

On April 21, 2022, Eagle's Board of Directors (the "Board") authorized the repurchase of up to 400,000 shares of its common stock.

Under the plan, shares may be purchased by the Company on the open market or in privately negotiated transactions.

The extent to which the company repurchases its shares and the timing of such repurchase will depend upon market conditions and other corporate considerations.

There were 288,875 shares available to be repurchased under this plan as of December 31, 2022.

The plan expired on April 21, 2023.

On July 22, 2021, the Board authorized the repurchase of up to 100,000 shares of its common stock.

Under the plan, shares could be purchased by the Company on the open market or in privately negotiated transactions.

The extent to which the company repurchased its shares and the timing of such repurchase depended upon market conditions and other corporate considerations.

No shares were purchased during the year ended December 31, 2021 under this plan.

The Company repurchased the total authorized amount of 100,000 shares during the first quarter of 2022.

The plan expired on July 22, 2022.

The extent to which the company repurchased its shares and the timing of such repurchases depended on market conditions and other corporate considerations.

During the second quarter of 2022, 5,000 shares were purchased under this plan at an average price of $ 19.75 .

During the third quarter of 2022, 99,517 shares were purchased under this plan at an average price of $ 19.45 .

During the fourth quarter of 2022, 6,608 shares were purchased under this plan at an average price of $ 18.80 .

No shares were purchased during the first or second quarter of 2023 under this plan.

The plan expired on April 21, 2023.

EAGLE BANCORP MONTANA, INC.

61 unchanged sentences

The number of shares of restricted stock available to award under this plan was 104,575 as of December 31, 2024 .

This plan also includes shares available to be awarded for stock options totaling 246,427 .

This plan also includes shares available to be awarded for stock options total ing 246,427 .

However, no stock options have been awarded under this plan.

45 unchanged sentences

Changes in the fair value of the derivatives are recorded in mortgage banking, net within noninterest income on the consolidated statements of income.

A net gain of $ 10,000 was recorded for the year ended December 31, 2023 compared to a net loss of $ 1,194,000 for the year ended December 31, 2022.

A net gain of $ 99,000 was recorded for the year ended December 31, 2024 compared to a net gain of $ 10,000 for the year ended December 31, 2023 .

Fair Value of Financial Instruments

24 unchanged sentences

Mortgage Servicing Rights – The fair value of mortgage servicing rights are estimated using present value of expected cash flows based on a third -party model that incorporated industry assumptions and is adjusted for factors such as prepayment speeds and are considered level 3 inputs.

EAGLE BANCORP MONTANA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Fair Value of Financial Instruments – continued

The following table summarizes financial assets and liabilities measured at fair value on a recurring basis, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

19 unchanged sentences

- 13,368 - 13,368

Interest rate lock commitments

Financial liabilities:

Forward TBA mortgage-backed securities

Financial liabilities:

Interest rate lock commitments

December 31, 2023

2 unchanged sentences

Available-for-sale securities

government obligations

government and agency obligations

$ - $ 6,543 $ - $ 6,543

13 unchanged sentences

- 11,432 - 11,432

Forward TBA mortgage-backed securities

Financial liabilities:

Interest rate lock commitments

Financial liabilities:

Forward TBA mortgage-backed securities

EAGLE BANCORP MONTANA, INC.

9 unchanged sentences

$ - $ - $ 96 $ 96

Mortgage servicing rights

December 31, 2023

(In Thousands)

Impaired loans (1)

$ - $ - $ 281 $ 281

Mortgage servicing rights

Collateral-dependent loans individually evaluated, net of ACL

$ - $ - $ 1,782 $ 1,782

( 1 ) The Company adopted ASC 326 as of January 1, 2023, under which the concept of impaired loans went away.

The comparable period presents impaired loans under previously applicable GAAP.

The following table represents the Bank's financial assets and liabilities measured at fair value on a recurring and nonrecurring basis, the valuation techniques used to measure the fair value of those assets and liabilities, and the significant unobservable inputs and the ranges of values for those inputs:

18 unchanged sentences

(In Thousands)

Balance, January 1, 2023

Beginning Balance

$ 15 $ ( 81 )

Purchases and issuances

Sales and settlements

( 644 ) ( 339 )

Balance, December 31, 2023

Sales and settlements

Ending Balance

$ ( 103 ) $ 15

Unrealized gains (losses) relating to items held at end of period

Unrealized (losses) gains related to items held at end of period

$ ( 118 ) $ 96

94 unchanged sentences

CASH FLOWS FROM INVESTING ACTIVITIES:

Cash paid for acquisitions, net of cash received

Cash contribution from Opportunity Bank of Montana

Activity in available-for-sale securities:

Maturities, principal payments and calls

Net cash provided by (used in) investing activities

5,072 ( 12,267 )

Net cash provided by investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of subordinated debentures

Repayment of subordinated debentures

Payments for debt issuance costs

ESOP payments and dividends

4 unchanged sentences

( 4,535 ) ( 4,442 )

Net cash (used in) provided by financing activities

Net cash used in financing activities

( 4,096 ) ( 3,857 )

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

NET DECREASE IN CASH AND CASH EQUIVALENTS

( 563 ) ( 2,612 )

2 unchanged sentences

$ 1,863 $ 2,426

Restatement of Interim Financial Information (UNAUDITED)

Restatement of Unaudited Condensed Statement of Cash Flows

In connection with the preparation of the consolidated statement of cash flows for the year ended December 31, 2024, the Company concluded the proper classification of borrowings as short-term or long-term was not properly presented within the statement of cash flows for the nine months ended September 30, 2024.

See below for a reconciliation from the previously reported amounts in the Company's Quarterly Reports on Form 10 -Q to the restated amounts for the nine months ended September 30, 2024.

The previously reported amounts are labeled "As Reported" in the table below.

The amounts labeled "Adjustments" represent the effects of this restatement.

The classification errors were isolated to the financing activities section of the statement of cash flows and had no impact on net cash provided by financing activities.

In addition, there was no impact to the unaudited condensed consolidated statement of condition, statement of income, statement of comprehensive income or statement of changes in shareholder’s equity for the same period.

Nine Months Ended September 30, 2024

(In Thousands)

CASH FLOWS FROM FINANCING ACTIVITIES:

Net increase in deposits

$ 15,317 $ - $ 15,317

Net short-term advances (payments) on FHLB and other borrowings

14,263 ( 55,000 ) ( 40,737 )

Advances on long-term FHLB and other borrowings

29,167 75,833 105,000

Payments on long-term FHLB and other borrowings

- ( 20,833 ) ( 20,833 )

Purchase of treasury stock

Dividends paid

( 3,387 ) - ( 3,387 )

Net cash provided by financing activities

$ 55,360 $ - $ 55,360

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures