Eagle Bancorp Montana, Inc. 10-Q

ebmt20250630_10q.htm Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____. Commission file number 1-34682 Eagle Bancorp Montana, Inc. (Exact name of registrant as specified in its charter) Delaware 27-1449820 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 1400 Prospect Avenue , Helena , MT 59601 (Address of principal executive offices) (Zip code) ( 406 ) 442-3080 (Registrant's telephone number, including area code) Not Applicable (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐ Smaller reporting company ☒ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ APPLICABLE ONLY TO CORPORATE ISSUERS Indicate the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: Common stock, par value $0.01 per share 7,952,177 shares outstanding As of July 31, 2025 Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES TABLE OF CONTENTS PART I. FINANCIAL INFORMATION PAGE Item 1. Financial Statements (Unaudited) Condensed Consolidated Statements of Financial Condition as of June 30, 2025 and December 31, 2024 1 Condensed Consolidated Statements of Income for the three and six months ended June 30, 2025 and 2024 3 Condensed Consolidated Statements of Comprehensive Income for the three and six ended June 30, 2025 and 2024 5 Condensed Consolidated Statements of Changes in Shareholders' Equity for the three and six months ended June 30, 2025 and 2024 6 Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024 7 Notes to Condensed Consolidated Financial Statements (Unaudited) 9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 25 Item 3. Quantitative and Qualitative Disclosures About Market Risk 39 Item 4. Controls and Procedures 39 PART II. OTHER INFORMATION Item 1. Legal Proceedings 40 Item 1A. Risk Factors 40 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 40 Item 3. Defaults Upon Senior Securities 40 Item 4. Mine Safety Disclosures 40 Item 5. Other Information 40 Item 6. Exhibits 41 Signatures 42 Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES Cautionary Note Regarding Forward-Looking Statements This report includes “forward-looking statements” within the meaning and protections of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as “may,” “will,” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “plan,” “project,” “could,” “intend,” “target” and other similar words and expressions of the future. These forward-looking statements include, but are not limited to: ● statements of our goals, intentions and expectations; ● statements regarding our business plans, prospects, growth and operating strategies; ● statements regarding the asset quality of our loan and investment portfolios; and ● estimates of our risks and future costs and benefits. These forward-looking statements are based on current beliefs and expectations of the management of Eagle Bancorp Montana, Inc. (“Eagle” or the “Company”) and Opportunity Bank of Montana (“OBMT” or the “Bank”), Eagle’s wholly-owned subsidiary, and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. The following factors, among others, could cause the Company’s actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: ● changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees, capital requirements and liquidity requirements; ● local, regional, national and international economic conditions or macroeconomic instability (including any economic slowdown or recession, inflation, interest rate changes, credit loss trends, unemployment, changes in housing or securities markets, or other factors) and the impact of the same on Eagle and its customers; ● volatility, disruption, or uncertainty in national and international financial markets, including as a result of geopolitical developments; ● the effects of any U.S. federal government shutdown, closures or significant staff reductions in agencies regulating or otherwise impacting Eagle's business; ● the impact of any new regulatory, policy, or enforcement developments resulting from the change in U.S. presidential administration, including the implementation of tariffs and other protectionist trade policies, including any reciprocal tariffs by foreign countries; ● competition among depository and other traditional and non-traditional financial service providers; ● risks related to the concentration of our business in Montana, including risks associated with changes in the prices, values and sales volume of residential and commercial real estate in Montana; ● inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments or reduces loan demand; ● our ability to attract deposits and other sources of funding or liquidity; ● possible changes in governmental monetary and fiscal policies, or any leadership changes of those determining such policies; ● volatility in Eagle's stock price due to investor sentiment and perception of the banking industry; ● the possibility that future credit losses may be higher than currently expected due to changes in economic assumptions, customer behavior, adverse developments with respect to U.S. or global economic conditions and other uncertainties, including the impact of supply chain disruptions, inflationary pressures and labor shortages on economic conditions and our business; ● an inability to access capital markets or maintain deposits or borrowing costs; ● our ability to assess and monitor the effect of evolving uses of artificial intelligence on our business and operations; ● our ability to navigate differing environmental, social, governmental, and sustainability concerns among governmental administrations, our stakeholders, and other activists that may arise from our business activities; ● changes or volatility in the securities markets that lead to impairment in the value of our investment securities and goodwill; ● our ability to implement our growth strategy, including identifying and consummating suitable acquisitions, raising additional capital to finance such transactions, entering new markets, possible failures in realizing the anticipated benefits from such acquisitions and an inability of our personnel, systems and infrastructure to keep pace with such growth; ● unforeseen events, such as pandemics or natural disasters, and any governmental or societal responses thereto; ● the effect of acquisitions we may make, if any, including, without limitation, the failure to achieve expected revenue growth and/or expense savings from such acquisitions; ● potential impairment on the goodwill we have recorded or may record in connection with business acquisitions; ● our ability to enter new markets successfully and capitalize on growth opportunities; ● the need to retain capital for strategic or regulatory reasons; ● changes in consumer spending, borrowing and savings habits; ● our ability to continue to increase and manage our commercial and residential real estate, multi-family and commercial business loans; ● our ability to implement new technologies and maintain secure and reliable technology systems; ● our ability to develop and maintain secure and reliable information technology systems, effectively defend ourselves against cyberattacks, or recover from breaches to our cybersecurity infrastructure; ● the failure of assumptions underlying the establishment of allowance for possible loan losses and other estimates; ● changes in the financial performance and/or condition of our borrowers and their ability to repay their loans when due; and ● the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Securities and Exchange Commission, the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters. Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. For a further list and description of various risks, relevant factors and uncertainties that could cause future results or events to differ materially from those expressed or implied in our forward-looking statements, see the Part II, Item 1A, “Risk Factors” and Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections contained elsewhere in this report, as well as our Annual Report on Form 10-K for the year ended December 31, 2024, any subsequent Reports on Form 10-Q and Form 8-K, and other filings with the SEC. We do not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur, or of which we hereafter become aware. Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Dollars in Thousands, Except for Per Share Data) (Unaudited) June 30, December 31, 2025 2024 ASSETS: Cash and due from banks $ 25,701 $ 29,824 Interest-bearing deposits in banks 1,183 1,735 Federal funds sold 44 - Total cash and cash equivalents 26,928 31,559 Securities available-for-sale, at fair value (amortized cost of $ 309,257 at June 30, 2025 and $ 319,939 at December 31, 2024) 285,023 292,590 Federal Home Loan Bank ("FHLB") stock 7,000 7,778 Federal Reserve Bank ("FRB") stock 4,131 4,131 Mortgage loans held-for-sale, at fair value 13,651 13,368 Loans receivable, net of allowance for credit losses of $ 17,730 at June 30, 2025 and $ 16,850 at December 31, 2024 1,551,932 1,503,796 Accrued interest and dividends receivable 14,674 12,890 Mortgage servicing rights, net 15,120 15,376 Assets held-for-sale, at cost 703 960 Premises and equipment, net 100,909 101,540 Cash surrender value of life insurance, net 53,958 53,232 Goodwill 34,740 34,740 Core deposit intangible, net 3,885 4,499 Other assets 24,979 26,631 Total assets $ 2,137,633 $ 2,103,090 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. - 1 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Continued) (Dollars in Thousands, Except for Per Share Data) (Unaudited) June 30, December 31, 2025 2024 LIABILITIES: Deposit accounts: Noninterest-bearing $ 417,324 $ 419,211 Interest-bearing 1,320,601 1,262,017 Total deposits 1,737,925 1,681,228 Accrued expenses and other liabilities 40,439 47,018 FHLB advances and other borrowings 119,407 140,930 Other long-term debt: Principal amount 60,155 60,155 Unamortized debt issuance costs ( 931 ) ( 1,006 ) Total other long-term debt, net 59,224 59,149 Total liabilities 1,956,995 1,928,325 SHAREHOLDERS' EQUITY: Preferred stock (par value $ 0.01 per share; 1,000,000 shares authorized; no shares issued or outstanding) - - Common stock (par value $ 0.01 per share; 20,000,000 shares authorized; 8,507,429 shares issued at June 30, 2025 and December 31, 2024; 7,952,177 shares outstanding at June 30, 2025 and 8,027,177 shares outstanding December 31, 2024) 85 85 Additional paid-in capital 108,590 108,334 Unallocated common stock held by Employee Stock Ownership Plan ("ESOP") ( 3,724 ) ( 4,010 ) Treasury stock, at cost ( 552,252 shares at June 30, 2025 and 480,252 shares at December 31, 2024) ( 11,925 ) ( 10,762 ) Retained earnings 105,470 101,264 Accumulated other comprehensive loss, net of tax ( 17,858 ) ( 20,146 ) Total shareholders' equity 180,638 174,765 Total liabilities and shareholders' equity $ 2,137,633 $ 2,103,090 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. - 2 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Dollars in Thousands, Except for Per Share Data) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 INTEREST AND DIVIDEND INCOME: Interest and fees on loans $ 24,442 $ 22,782 $ 47,762 $ 44,724 Securities available-for-sale 2,397 2,631 4,848 5,355 FHLB and FRB dividends 236 264 496 511 Other interest income 75 145 113 174 Total interest and dividend income 27,150 25,822 53,219 50,764 INTEREST EXPENSE: Deposits 6,877 6,884 13,748 13,432 FHLB advances and other borrowings 1,459 2,625 3,085 5,122 Other long-term debt 669 681 1,339 1,364 Total interest expense 9,005 10,190 18,172 19,918 NET INTEREST INCOME 18,145 15,632 35,047 30,846 Provision for credit losses 1,038 412 1,080 277 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 17,107 15,220 33,967 30,569 NONINTEREST INCOME: Service charges on deposit accounts 393 428 782 828 Mortgage banking, net 2,926 2,417 5,051 4,594 Interchange and ATM fees 670 640 1,263 1,203 Appreciation in cash surrender value of life insurance 393 320 743 608 Other noninterest income 425 464 984 988 Total noninterest income $ 4,807 $ 4,269 $ 8,823 $ 8,221 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. - 3 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Continued) (Dollars in Thousands, Except for Per Share Data) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 NONINTEREST EXPENSE: Salaries and employee benefits $ 10,645 $ 10,273 $ 20,309 $ 19,991 Occupancy and equipment expense 2,230 2,104 4,532 4,203 Data processing 1,305 1,382 2,635 2,907 Software subscriptions 715 511 1,373 1,039 Advertising 280 316 512 569 Amortization 298 348 618 717 Loan costs 354 412 726 810 Federal Deposit Insurance Corporation ("FDIC") insurance premiums 257 284 488 583 Professional and examination fees 391 423 911 907 Other noninterest expense 1,451 1,254 2,828 2,614 Total noninterest expense 17,926 17,307 34,932 34,340 INCOME BEFORE PROVISION FOR INCOME TAXES 3,988 2,182 7,858 4,450 Provision for income taxes 751 444 1,382 814 NET INCOME $ 3,237 $ 1,738 $ 6,476 $ 3,636 BASIC EARNINGS PER COMMON SHARE $ 0.42 $ 0.22 $ 0.83 $ 0.46 DILUTED EARNINGS PER COMMON SHARE $ 0.41 $ 0.22 $ 0.83 $ 0.46 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. - 4 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Dollars in Thousands) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 NET INCOME $ 3,237 $ 1,738 $ 6,476 $ 3,636 OTHER ITEMS OF COMPREHENSIVE INCOME (LOSS) BEFORE TAX: Change in fair value of investment securities available-for-sale 1,475 524 3,115 ( 1,265 ) Total other comprehensive income (loss) 1,475 524 3,115 ( 1,265 ) Income tax (provision) benefit related to securities available-for-sale ( 388 ) ( 138 ) ( 827 ) 333 COMPREHENSIVE INCOME $ 4,324 $ 2,124 $ 8,764 $ 2,704 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. - 5 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES C ONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY For the three and six months ended June 30, 2025 and 2024 (Dollars in Thousands, Except for Per Share Data) (Unaudited) ACCUMULATED ADDITIONAL UNALLOCATED OTHER PREFERRED COMMON PAID-IN ESOP TREASURY RETAINED COMPREHENSIVE STOCK STOCK CAPITAL SHARES STOCK EARNINGS (LOSS) INCOME TOTAL Balance at April 1, 2025 $ - $ 85 $ 108,451 $ ( 3,867 ) $ ( 11,517 ) $ 103,366 $ ( 18,945 ) $ 177,573 Net income - - - - 3,237 - 3,237 Other comprehensive income - - - - - - 1,087 1,087 Dividends paid ($ 0.1425 per share) - - - - - ( 1,133 ) - ( 1,133 ) Stock compensation expense - - 182 - - - - 182 ESOP shares allocated ( 5,997 shares) - - ( 43 ) 143 - - - 100 Treasury stock purchased ( 25,000 shares at $ 16.34 average cost per share) - - - - ( 408 ) - - ( 408 ) Balance at June 30, 2025 $ - $ 85 $ 108,590 $ ( 3,724 ) $ ( 11,925 ) $ 105,470 $ ( 17,858 ) $ 180,638 Balance at April 1, 2024 $ - $ 85 $ 108,893 $ ( 4,440 ) $ ( 11,124 ) $ 96,797 $ ( 21,263 ) $ 168,948 Net income - - - - - 1,738 - 1,738 Other comprehensive income - - - - - - 386 386 Dividends paid ($ 0.1400 per share) - - - - - ( 1,122 ) - ( 1,122 ) Stock compensation expense - - 135 - - - - 135 ESOP shares allocated ( 5,997 shares) - - ( 66 ) 143 - - - 77 Balance at June 30, 2024 $ - $ 85 $ 108,962 $ ( 4,297 ) $ ( 11,124 ) $ 97,413 $ ( 20,877 ) $ 170,162 Balance at January 1, 2025 $ - $ 85 $ 108,334 $ ( 4,010 ) $ ( 10,762 ) $ 101,264 $ ( 20,146 ) $ 174,765 Net income - - - - - 6,476 - 6,476 Other comprehensive income - - - - - - 2,288 2,288 Dividends paid ($ 0.2850 per share) - - - - - ( 2,270 ) - ( 2,270 ) Stock compensation expense - - 345 - - - - 345 ESOP shares allocated ( 11,994 shares) - - ( 89 ) 286 - - - 197 Treasury stock purchased ( 75,000 shares at $ 15.52 average cost per share) - - - - ( 1,163 ) - ( 1,163 ) Balance at June 30, 2025 $ - $ 85 $ 108,590 $ ( 3,724 ) $ ( 11,925 ) $ 105,470 $ ( 17,858 ) $ 180,638 Balance at January 1, 2024 $ - $ 85 $ 108,819 $ ( 4,583 ) $ ( 11,124 ) $ 96,021 $ ( 19,945 ) $ 169,273 Net income - - - - - 3,636 - 3,636 Other comprehensive loss - - - - - - ( 932 ) ( 932 ) Dividends paid ($ 0.2800 per share) - - - - - ( 2,244 ) - ( 2,244 ) Stock compensation expense - - 270 - - - - 270 ESOP shares allocated ( 11,994 shares) - - ( 127 ) 286 - - - 159 Balance at June 30, 2024 $ - $ 85 $ 108,962 $ ( 4,297 ) $ ( 11,124 ) $ 97,413 $ ( 20,877 ) $ 170,162 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. - 6 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Thousands) (Unaudited) Six Months Ended June 30, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 6,476 $ 3,636 Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses 1,080 277 Depreciation 2,633 2,596 Net amortization of investment securities premiums and discounts 351 532 Amortization of mortgage servicing rights 882 838 Amortization of right-of-use assets 239 262 Amortization of core deposit intangibles 618 717 Compensation expense related to restricted stock awards 345 270 ESOP compensation expense for allocated shares 197 159 Net gain on sale of loans ( 3,432 ) ( 3,014 ) Originations of loans held-for-sale ( 98,554 ) ( 96,314 ) Proceeds from sales of loans held-for-sale 101,077 99,644 Net appreciation in cash surrender value of life insurance ( 708 ) ( 608 ) Net change in: Accrued interest and dividends receivable ( 1,784 ) ( 710 ) Other assets 928 150 Accrued expenses and other liabilities ( 6,717 ) 1,951 Net cash provided by operating activities 3,631 10,386 CASH FLOWS FROM INVESTING ACTIVITIES: Activity in available-for-sale securities: Maturities, principal payments and calls 13,340 9,337 Purchases ( 3,023 ) - FHLB stock redeemed 778 ( 945 ) Loan origination and principal collection, net ( 49,157 ) ( 32,945 ) Proceeds from sale of real estate and other repossessed assets acquired in settlement of loans 40 - Proceeds from sale of premises and equipment - 62 Purchases of premises and equipment, net ( 1,981 ) ( 7,417 ) Net cash used in investing activities $ ( 40,003 ) $ ( 31,908 ) The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. - 7 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (Dollars in Thousands) (Unaudited) Six Months Ended June 30, 2025 2024 CASH FLOWS FROM FINANCING ACTIVITIES: Net increase (decrease) in deposits $ 56,697 $ ( 16,330 ) Net short-term advances from FHLB and other borrowings 20,977 19,313 Advances on long-term FHLB and other borrowings 20,000 20,000 Payments on long-term FHLB and other borrowings ( 62,500 ) - Purchase of treasury stock ( 1,163 ) - Dividends paid ( 2,270 ) ( 2,244 ) Net cash provided by financing activities 31,741 20,739 NET DECREASE IN CASH AND CASH EQUIVALENTS ( 4,631 ) ( 783 ) CASH AND CASH EQUIVALENTS, beginning of period 31,559 24,545 CASH AND CASH EQUIVALENTS, end of period $ 26,928 $ 23,762 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid during the period for interest $ 19,858 $ 18,817 Cash paid during the period for income taxes, net of refund 477 194 NONCASH OPERATING, INVESTING AND FINANCING ACTIVITIES: Increase (decrease) in fair value of securities available-for-sale $ 3,115 $ ( 1,265 ) Mortgage servicing rights recognized 626 599 Loans transferred to real estate and other assets acquired in foreclosure 91 4 Right-of-use assets obtained (used) in exchange for lease liabilities 3 ( 151 ) Decrease in commitments to invest in Low-Income-Housing Tax Credit projects ( 31 ) ( 2,390 ) The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. - 8 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization Eagle Bancorp Montana, Inc. (“Eagle” or the “Company”), is a Delaware corporation that holds 100 % of the capital stock of Opportunity Bank of Montana (“OBMT” or the “Bank”), formerly American Federal Savings Bank (“AFSB”). The Bank was founded in 1922 as a Montana chartered building and loan association and has conducted operations and maintained its administrative office in Helena, Montana since that time. In 1975, the Bank adopted a federal thrift charter and in October 2014 converted to a Montana chartered commercial bank and became a member bank in the Federal Reserve System. Eagle Bancorp Statutory Trust I (the "Trust") was established in September 2005 and is owned 100 % by Eagle. In September 2021, the Company entered into an Agreement and Plan of Merger ("Merger Agreement") with First Community Bancorp, Inc. ("FCB"), a Montana corporation, and FCB's wholly-owned subsidiary, First Community Bank, a Montana chartered commercial bank. The Merger Agreement provided that, upon the terms and subject to the conditions set forth in the Merger Agreement, FCB would merge with and into Eagle, with Eagle continuing as the surviving corporation. The merger closed on April 30, 2022. First Community Bank operated nine branches in Ashland, Culbertson, Froid, Glasgow, Helena, Hinsdale, Three Forks and Wolf Point, Montana. In March 2021, the Bank established a subsidiary, Opportunity Housing Fund, LLC ("OHF"), to invest in Low-Income Housing Tax Credit ("LIHTC") projects. The LIHTC program is designed to encourage capital investment in construction and rehabilitation of low-income housing. Tax credits are allowable over a 10 -year period. Amortizing investments in LIHTC projects are included in other assets on the consolidated statements of financial condition and totaled $ 6,345,000 and $ 6,759,000 as of June 30, 2025 and December 31, 2024 , respectively. Outstanding funding obligations for LIHTC projects are included in accrued expenses and other liabilities on the condensed consolidated financial statements of condition and totaled $ 184,000 as of June 30, 2025 and $ 215,000 as of December 31, 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. The acquisition included one branch in Wolf Point, Montana. In addition, Western Financial Services, Inc. ("WFS") was acquired through the WHC merger. In December 2023, WFS changed its name to Opportunity Financial Services, Inc. ("OFS"). OFS facilitates deferred payment contracts for customers that produce agricultural products. The revenue from these contracts is accounted for in accordance with ASC Topic 606. The Company is considered an agent in these contracts, as: (i) the Company facilitates payment from customer to supplier, (ii) the Company does not take inventory of commodities as they are delivered by supplier to the customer, (iii) pricing of commodities is determined by the market, (iv) consideration on deferred payment contracts is insignificant to the Company and (v) the Company’s exposure to credit risk is minimal. Revenue is recognized net of expenses and reported in other noninterest income in the financial statements. Commodity sales income and the corresponding commodity sales expense were $ 2,798,000 for the three months ended June 30, 2025 and $ 1,118,000 for the three months ended June 30, 2024, respectively, for a net impact of $0. Commodity sales income and the corresponding commodity sales expense were $ 5,112,000 for the six months ended June 30, 2025 and $ 3,918,000 for the six months ended June 30, 2024, respectively, for a net impact of $0. Outstanding deferred contracts payable are included in accrued expenses and other liabilities on the condensed consolidated financial statements of condition and totaled $ 13,133,000 as of June 30, 2025 and $ 17,792,000 as of December 31, 2024. The Bank is headquartered in Helena, Montana, and has additional branches in Ashland, Big Timber, Billings, Bozeman, Butte, Choteau, Culbertson, Denton, Dutton, Froid, Glasgow, Great Falls, Hamilton, Hinsdale, Livingston, Missoula, Sheridan, Three Forks, Townsend, Twin Bridges, Winifred and Wolf Point, Montana. The Bank’s principal business is accepting deposits and, together with funds generated from operations and borrowings, investing in various types of loans and securities. The Bank currently has 30 full-service branches. The Bank’s principal business is accepting deposits and, together with funds generated from operations and borrowings, investing in various types of loans and securities. Basis of Financial Statement Presentation and Use of Estimates The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10 -Q and Article 10 of Regulation S- X as promulgated by the Securities and Exchange Commission (“SEC”). It is recommended that these unaudited interim condensed consolidated financial statements be read in conjunction with the Company’s Annual Report on Form 10 -K with all of the audited information and footnotes required by U.S. GAAP for complete financial statements for the year ended December 31, 2024 , as filed with the SEC on March 14, 2025. In the opinion of management, all normal adjustments and recurring accruals considered necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. The results of operations for the six -month period ended June 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025 or any other period. In preparing condensed consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the condensed consolidated statement of financial condition and reported amounts of revenues and expenses during the reporting period. Actual results could differ from estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for credit losses ("ACL"), mortgage servicing rights, the fair value of financial instruments, the valuation of goodwill and deferred tax assets and liabilities. Principles of Consolidation The condensed consolidated financial statements include Eagle, th e Bank, OHF, Eagle Bancorp Statutory Trust I (the “Trust”) and OFS. All significant intercompany transactions and balances have been eliminated in consolidation. Reclassifications Certain prior period amounts were reclassified to conform to the presentation for 2025 . These reclassifications had no impact on net income or shareholders’ equity. - 9 - Table of Contents NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued Subsequent Events The Company has evaluated events and transactions subsequent to June 30, 2025 for recognition and/or disclosure. On July 4, 2025, the President of the United States signed and enacted the “One Big Beautiful Bill Act” into law. Except for certain provisions, the Tax Act is effective for tax years beginning on or after January 1, 2025. The tax and spending legislation permanently extends key business tax breaks originally enacted under the 2017 Tax Cuts and Jobs Act. The Company is currently evaluating the impact the bill will have on income tax expense. Goodwill 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, 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 thy carrying amount exceeds the reporting unit’s fair value. For goodwill considerations the Company is a single reporting unit. 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. A weighted average of both the market and income approaches was used in valuing the reporting unit’s fair value. The interim goodwill impairment assessment as of August 31, 2024 concluded that goodwill was not impaired. Our quantitative annual impairment test as of October 31, 2024 also did not result in impairment. Segment Reporting 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 In March 2020, the FASB issued ASU No. 2020 - 04, Reference Rate Reform (Topic 848 ) which provides temporary optional expedients to ease the financial reporting burdens of the expected market transition from London Interbank Offered Rate (“LIBOR”) to an alternative reference rate such as Secured Overnight Financing Rate ("SOFR"). In January 2021, the FASB issued ASU No. 2021 - 01, Reference Rate Reform (Topic 848 ), which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. ASU No. 2021 - 01 was effective upon issuance and generally can be applied through December 31, 2024. The Company has reviewed all of its LIBOR based products and all products have been adjusted to another index as LIBOR ceased to be published after June 30, 2023. ASU No. 2021 - 01 did not have a significant impact on the Company's consolidated financial statements. In November 2023, the FASB issued ASU No. 2023 - 07, Segment Reporting (Topic 280 ): Improvements to Reportable Segment Disclosures. The updated accounting guidance requires expanded reportable segment disclosures, primarily related to significant segment expenses which are regularly provided to the company's chief operating decision maker. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within annual periods beginning after December 15, 2024. Retrospective application is required. 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. In December 2023, the FASB issued ASU No. 2023 - 09, Income Taxes (Topic 740 ): Improvements to Income Tax Disclosures. The updated accounting guidance requires enhanced income tax disclosures, including the disaggregation of existing disclosures related to the tax rate reconciliation and income taxes paid. This ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The amendments should be applied on a prospective basis, but retrospective application is permitted. The amendments in this ASU became effective for the Company on January 1, 2025 and did not have a significant impact on the Company’s financial position, results of operations, or liquidity. Recently Issued Accounting Pronouncements In November 2024, the FASB issued ASU No. 2024 - 03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220 - 40 ): Disaggregation of Income Statement Expenses. This update requires that public companies disclose details about specific expenses such as employee compensation, depreciation, amortization, depletion, and inventory purchases. This ASU is effective for annual reporting periods beginning after December 15, 2026 with early adoption permitted. In January 2025, the FASB issued ASU No. 2025 - 01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220 - 40 ), which clarifies the effective date. This ASU is effective for annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the effect the ASU will have on its consolidated financial statements and related disclosures. - 10 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 2. INVESTMENT SECURITIES The amortized cost and fair values of securities, together with unrealized gains and losses, were as follows: June 30, 2025 December 31, 2024 Gross Gross Amortized Unrealized Fair Amortized Unrealized Fair Cost Gains (Losses) ACL Value Cost Gains (Losses) ACL Value (In Thousands) Available-for-Sale: U.S. government and agency obligations $ 4,587 $ 77 $ ( 115 ) $ - $ 4,549 $ 5,298 $ 85 $ ( 188 ) $ - $ 5,195 U.S. treasury obligations 48,632 - ( 4,210 ) - 44,422 52,592 - ( 5,679 ) - 46,913 Municipal obligations 128,187 1 ( 13,366 ) - 114,822 131,109 1 ( 13,233 ) - 117,877 Corporate obligations 3,250 - ( 102 ) - 3,148 4,249 - ( 87 ) - 4,162 Mortgage-backed securities 28,785 120 ( 1,199 ) - 27,706 29,867 21 ( 1,653 ) - 28,235 Collateralized mortgage obligations 88,693 53 ( 5,544 ) - 83,202 89,313 11 ( 6,701 ) - 82,623 Asset-backed securities 7,123 51 - - 7,174 7,511 83 ( 9 ) - 7,585 Total $ 309,257 $ 302 $ ( 24,536 ) $ - $ 285,023 $ 319,939 $ 201 $ ( 27,550 ) $ - $ 292,590 There was no sales activity for available-for-sale securities during the three or six months ended June 30, 2025 or 2024. The amortized cost and fair value of securities by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. June 30, 2025 Amortized Fair Cost Value (In Thousands) Due in one year or less $ 2,475 $ 2,457 Due from one to five years 38,189 35,842 Due from five to ten years 83,389 73,993 Due after ten years 67,726 61,823 191,779 174,115 Mortgage-backed securities 28,785 27,706 Collateralized mortgage obligations 88,693 83,202 Total $ 309,257 $ 285,023 As of June 30, 2025 and December 31, 2024 , securities with a fair value of $ 19,765,000 and $ 22,892,000 , respectively, were pledged to secure public deposit s and for other purposes required or permitted by law. The Company’s investment securities that have been in a continuous unrealized loss position for less than twelve months and those that have been in a continuous unrealized loss position for twelve or more months were as follows: June 30, 2025 Less Than 12 Months 12 Months or Longer Gross Gross Fair Unrealized Fair Unrealized Value Losses Value Losses (In Thousands) U.S. government and agency obligations $ - $ - $ 1,815 $ ( 115 ) U.S. treasury obligations - - 44,422 ( 4,210 ) Municipal obligations 12,079 ( 725 ) 102,187 ( 12,641 ) Corporate obligations - - 3,148 ( 102 ) Mortgage-backed securities and collateralized mortgage obligations 10,229 ( 106 ) 78,931 ( 6,637 ) Asset-backed securities - - 200 - Total $ 22,308 $ ( 831 ) $ 230,703 $ ( 23,705 ) - 11 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 2. INVESTMENT SECURITIES – continued December 31, 2024 Less Than 12 Months 12 Months or Longer Gross Gross Fair Unrealized Fair Unrealized Value Losses Value Losses (In Thousands) U.S. government and agency obligations $ - $ - $ 1,749 $ ( 188 ) U.S. treasury obligations - - 46,914 ( 5,679 ) Municipal obligations 14,678 ( 261 ) 102,521 ( 12,972 ) Corporate obligations - - 4,163 ( 87 ) Mortgage-backed securities and collateralized mortgage obligations 10,984 ( 188 ) 85,392 ( 8,166 ) Asset-backed securities 1,993 ( 9 ) - - Total $ 27,655 $ ( 458 ) $ 240,739 $ ( 27,092 ) As of June 30, 2025 and December 31, 2024 , there were, respectively, 269 and 284 securities in unrealized loss positions. Based on analysis of available-for-sale debt securities with unrealized losses as of June 30, 2025 , the Company determined the decline in value was unrelated to credit losses and was primarily caused by changes in interest rates and market spreads subsequent to the initial purchase of the securities. Management does not intend to sell and the Company is not likely to be required to sell these securities prior to maturity. As a result, no ACL was recorded on available-for-sale securities at June 30, 2025 and December 31, 2024 . As part of this determination, consideration was given to the extent to which fair value was less than amortized cost, adverse security ratings by a rating agency and other factors. NOTE 3. LOANS RECEIVABLE Loans receivable consisted of the following: June 30, December 31, 2025 2024 (In Thousands) Real estate loans: Residential 1-4 family $ 194,289 $ 199,422 Commercial real estate 938,451 916,783 Other loans: Home equity 102,778 97,543 Consumer 26,658 28,513 Commercial 307,486 278,385 Total 1,569,662 1,520,646 Allowance for credit losses ( 17,730 ) ( 16,850 ) Total loans, net $ 1,551,932 $ 1,503,796 Included in the above are loans guaranteed by U.S. government agencies tota ling $ 14,268,000 a n d $ 16,309,000 at June 30, 2025 and December 31, 2024 , respectively. - 12 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 3. LOANS RECEIVABLE – continued The following table provides allowance for credit losses activity for the three months ended June 30, 2025 . Residential Commercial Home 1-4 Family Real Estate Equity Consumer Commercial Total (In Thousands) Allowance for credit losses on loans: Beginning balance, April 1, 2025 $ 1,904 $ 10,830 $ 551 $ 239 $ 3,196 $ 16,720 Charge-offs - - ( 27 ) ( 24 ) - ( 51 ) Recoveries - 3 - - - 3 Provision 101 589 15 7 346 1,058 Total ending allowance balance, June 30, 2025 $ 2,005 $ 11,422 $ 539 $ 222 $ 3,542 $ 17,730 The following table provides allowance for credit losses activity for the six months ended June 30, 2025 . Residential Commercial Home 1-4 Family Real Estate Equity Consumer Commercial Total (In Thousands) Allowance for credit losses on loans: Beginning balance, January 1, 2025 $ 1,911 $ 10,907 $ 553 $ 245 $ 3,234 $ 16,850 Charge-offs - - ( 27 ) ( 30 ) - ( 57 ) Recoveries - 5 - 1 1 7 Provision 94 510 13 6 307 930 Total ending allowance balance, June 30, 2025 $ 2,005 $ 11,422 $ 539 $ 222 $ 3,542 $ 17,730 The following table provides allowance for credit losses activity for the three months ended June 30, 2024 . Residential Commercial Home 1-4 Family Real Estate Equity Consumer Commercial Total (In Thousands) Allowance for credit losses on loans: Beginning balance, April 1, 2024 $ 1,858 $ 10,633 $ 538 $ 304 $ 3,077 $ 16,410 Charge-offs - - - ( 12 ) - ( 12 ) Recoveries - 7 - 1 2 10 Provision 40 292 16 2 72 422 Total ending allowance balance, June 30, 2024 $ 1,898 $ 10,932 $ 554 $ 295 $ 3,151 $ 16,830 The following table provides allowance for credit losses activity for the six months ended June 30, 2024 . Residential Commercial Home 1-4 Family Real Estate Equity Consumer Commercial Total (In Thousands) Allowance for credit losses on loans: Beginning balance, January 1, 2024 $ 1,866 $ 10,691 $ 540 $ 304 $ 3,039 $ 16,440 Charge-offs - - - ( 13 ) - ( 13 ) Recoveries - 10 - 2 64 76 Provision 32 231 14 2 48 327 Total ending allowance balance, June 30, 2024 $ 1,898 $ 10,932 $ 554 $ 295 $ 3,151 $ 16,830 - 13 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 3. LOANS RECEIVABLE – continued Internal classification of the loan portfolio by amortized cost and based on year originated was as follows: June 30, 2025 2025 2024 2023 2022 2021 Prior Revolving Loans Total Loans (In Thousands) RESIDENTIAL 1-4 FAMILY Pass $ 5,533 $ 19,078 $ 23,871 $ 30,650 $ 19,450 $ 45,135 $ 1,949 $ 145,666 Special Mention - - - 625 - - - 625 Substandard - - - 98 - 754 - 852 Total Residential 1-4 family 5,533 19,078 23,871 31,373 19,450 45,889 1,949 147,143 Current-period gross charge-offs - - - - - - - - RESIDENTIAL 1-4 FAMILY CONSTRUCTION Pass 14,272 15,114 2,357 12,239 - - 1,836 45,818 Substandard - - 1,328 - - - 1,328 Total Residential 1-4 family construction 14,272 15,114 3,685 12,239 - - 1,836 47,146 Current-period gross charge-offs - - - - - - - - COMMERCIAL REAL ESTATE Pass 20,023 57,674 67,294 188,080 123,911 164,408 39,941 661,331 Special Mention - - 259 435 - - 2,921 3,615 Substandard - 6,304 548 - 457 3,030 - 10,339 Total Commercial real estate 20,023 63,978 68,101 188,515 124,368 167,438 42,862 675,285 Current-period gross charge-offs - - - - - - - - COMMERCIAL CONSTRUCTION AND DEVELOPMENT Pass 14,242 27,729 9,123 20,844 8,539 12,666 6,884 100,027 Substandard - - - - - 957 - 957 Total Commercial construction and development 14,242 27,729 9,123 20,844 8,539 13,623 6,884 100,984 Current-period gross charge-offs - - - - - - - - FARMLAND Pass 22,616 20,273 17,410 29,976 18,268 48,801 2,889 160,233 Special Mention - - 387 250 - 730 - 1,367 Substandard - 188 - - - 348 46 582 Total Farmland 22,616 20,461 17,797 30,226 18,268 49,879 2,935 162,182 Current-period gross charge-offs - - - - - - - - HOME EQUITY Pass 1,244 1,241 1,099 2,983 333 2,418 93,026 102,344 Special Mention - - - - - 22 129 151 Substandard - - - - 42 82 159 283 Total Home Equity 1,244 1,241 1,099 2,983 375 2,522 93,314 102,778 Current-period gross charge-offs - - - - - 27 - 27 CONSUMER Pass 5,680 7,496 5,436 3,335 1,132 1,062 2,298 26,439 Special Mention - 1 24 - - - 19 44 Substandard - - 122 22 - 31 - 175 Total Consumer 5,680 7,497 5,582 3,357 1,132 1,093 2,317 26,658 Current-period gross charge-offs - 10 - 7 - - 13 30 COMMERCIAL Pass 11,707 30,211 22,391 16,227 13,327 21,044 35,291 150,198 Special Mention - - 339 184 - - 200 723 Substandard - 1,152 41 5 15 197 4 1,414 Total Commercial 11,707 31,363 22,771 16,416 13,342 21,241 35,495 152,335 Current-period gross charge-offs - - - - - - - - AGRICULTURAL Pass 30,881 27,442 10,263 6,420 3,268 2,992 66,164 147,430 Special Mention 181 3,493 2,977 - - 661 - 7,312 Substandard - - - - - 409 - 409 Total Agricultural 31,062 30,935 13,240 6,420 3,268 4,062 66,164 155,151 Current-period gross charge-offs - - - - - - - - TOTAL LOANS Pass 126,198 206,258 159,244 310,754 188,228 298,526 250,278 1,539,486 Special Mention 181 3,494 3,986 1,494 - 1,413 3,269 13,837 Substandard - 7,644 2,039 125 514 5,808 209 16,339 Total $ 126,379 $ 217,396 $ 165,269 $ 312,373 $ 188,742 $ 305,747 $ 253,756 $ 1,569,662 - 14 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 3. LOANS RECEIVABLE – continued December 31, 2024 2024 2023 2022 2021 2020 Prior Revolving Loans Total Loans (In Thousands) RESIDENTIAL 1-4 FAMILY Pass $ 19,197 $ 26,976 $ 31,265 $ 20,658 $ 13,509 $ 34,913 $ 6,004 $ 152,522 Special Mention - - 623 - - - - 623 Substandard - - - - - 576 - 576 Total Residential 1-4 family 19,197 26,976 31,888 20,658 13,509 35,489 6,004 153,721 Current-period gross charge-offs - - - - - 11 - 11 RESIDENTIAL 1-4 FAMILY CONSTRUCTION Pass 20,593 5,526 18,621 - - - - 44,740 Substandard - 204 - 757 - - - 961 Total Residential 1-4 family construction 20,593 5,730 18,621 757 - - - 45,701 Current-period gross charge-offs - - - - - - - - COMMERCIAL REAL ESTATE Pass 49,084 59,172 184,072 130,274 47,481 132,838 38,937 641,858 Special Mention - 260 - - - - - 260 Substandard - 490 - 463 - 2,891 - 3,844 Total Commercial real estate 49,084 59,922 184,072 130,737 47,481 135,729 38,937 645,962 Current-period gross charge-offs - - - - - - - - COMMERCIAL CONSTRUCTION AND DEVELOPMENT Pass 37,265 21,430 35,323 9,628 5,033 8,676 5,451 122,806 Substandard - - 438 - 2 965 - 1,405 Total Commercial construction and development 37,265 21,430 35,761 9,628 5,035 9,641 5,451 124,211 Current-period gross charge-offs - - - - - - - - FARMLAND Pass 21,543 18,083 29,983 18,991 20,076 33,721 2,323 144,720 Special Mention - 342 813 205 - 220 - 1,580 Substandard 188 - - - 65 57 - 310 Total Farmland 21,731 18,425 30,796 19,196 20,141 33,998 2,323 146,610 Current-period gross charge-offs - - - - - - - - HOME EQUITY Pass 1,031 1,438 3,248 362 483 2,234 88,230 97,026 Special Mention - - - - - 22 93 115 Substandard - - - 43 - 89 270 402 Total Home Equity 1,031 1,438 3,248 405 483 2,345 88,593 97,543 Current-period gross charge-offs - - - - - - - - CONSUMER Pass 10,828 7,580 4,547 1,666 961 798 2,001 28,381 Special Mention - 8 - - - - - 8 Substandard - 66 19 - 24 14 1 124 Total Consumer 10,828 7,654 4,566 1,666 985 812 2,002 28,513 Current-period gross charge-offs - 23 15 5 1 15 6 65 COMMERCIAL Pass 29,540 25,748 19,189 15,851 17,617 6,208 27,839 141,992 Special Mention - 127 95 - - - 370 592 Substandard 1,192 41 6 22 - 190 4 1,455 Total Commercial 30,732 25,916 19,290 15,873 17,617 6,398 28,213 144,039 Current-period gross charge-offs - - - - - 10 - 10 AGRICULTURAL Pass 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 Substandard - - - - 1 515 47 563 Total Agricultural 40,812 21,849 9,029 4,215 3,144 2,160 53,137 134,346 Current-period gross charge-offs - - - - - - - - TOTAL LOANS Pass 228,082 187,643 335,262 201,645 108,303 220,996 223,279 1,505,210 Special Mention 1,811 896 1,546 205 - 279 1,059 5,796 Substandard 1,380 801 463 1,285 92 5,297 322 9,640 Total $ 231,273 $ 189,340 $ 337,271 $ 203,135 $ 108,395 $ 226,572 $ 224,660 $ 1,520,646 - 15 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 3. LOANS RECEIVABLE – continued The following tables include information regarding delinquencies within the loan portfolio. June 30, 2025 Loans Past Due and Still Accruing 90 Days Nonaccrual Nonaccrual 30-89 Days and Loans with Loans with Current Total Past Due Greater Total no ACL ACL Loans Loans (In Thousands) Real estate loans: Residential 1-4 family $ 969 $ - $ 969 $ 559 $ - $ 145,615 $ 147,143 Residential 1-4 family construction - 1,328 1,328 - - 45,818 47,146 Commercial real estate 6,937 475 7,412 453 - 667,420 675,285 Commercial construction and development 439 762 1,201 1 - 99,782 100,984 Farmland 12 - 12 425 - 161,745 162,182 Other loans: Home equity 509 - 509 222 - 102,047 102,778 Consumer 182 - 182 96 61 26,319 26,658 Commercial 421 61 482 193 4 151,656 152,335 Agricultural 13 34 47 409 - 154,695 155,151 Total $ 9,482 $ 2,660 $ 12,142 $ 2,358 $ 65 $ 1,555,097 $ 1,569,662 December 31, 2024 Loans Past Due and Still Accruing 90 Days Nonaccrual Nonaccrual 30-89 Days and Loans with Loans with Current Total Past Due Greater Total no ACL ACL Loans Loans (In Thousands) Real estate loans: Residential 1-4 family $ 1,326 $ 623 $ 1,949 $ 469 $ - $ 151,303 $ 153,721 Residential 1-4 family construction - - - 961 - 44,740 45,701 Commercial real estate 5,739 - 5,739 268 - 639,955 645,962 Commercial construction and development 951 - 951 2 - 123,258 124,211 Farmland 54 - 54 190 - 146,366 146,610 Other loans: Home equity 382 - 382 335 - 96,826 97,543 Consumer 195 - 195 98 23 28,197 28,513 Commercial 1,064 - 1,064 200 4 142,771 144,039 Agricultural 566 - 566 677 - 133,103 134,346 Total $ 10,277 $ 623 $ 10,900 $ 3,200 $ 27 $ 1,506,519 $ 1,520,646 Interest income recognized on nonaccrual loans for the three and six months ended June 30, 2025 and 2024 is considered insignificant. In terest payments received on a cash basis related to nonaccrual loans w ere $ 340,000 a t June 30, 2025 and $ 522,000 at December 31, 2024 . The following tables present the amortized cost basis of collateral-dependent loans by class of loans. June 30, 2025 Real Estate Business Assets Other (In Thousands) Real estate loans: Residential 1-4 family $ 658 $ - $ - Residential 1-4 family construction 1,328 - - Commercial real estate 1,046 6,606 - Commercial construction and development 957 - - Farmland 368 - - Other loans: Home equity 198 - - Consumer - - 137 Commercial - 276 4 Agricultural 34 157 - Total $ 4,589 $ 7,039 $ 141 - 16 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 3. LOANS RECEIVABLE – continued December 31, 2024 Real Estate Business Assets Other (In Thousands) Real estate loans: Residential 1-4 family $ 967 $ - $ - Residential 1-4 family construction 961 - - Commercial real estate 1,395 228 - Farmland 108 - - Other loans: Home equity 216 - - Consumer - - 104 Commercial - 220 4 Agricultural 37 244 - Total $ 3,684 $ 692 $ 108 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. The following tables include the amortized cost basis at the end of the period of the loans modified to borrowers experiencing financial difficulty. As of or For the Three Months Ended June 30, 2025 Term Extension and Payment Deferral Term Extension and Interest Rate Reduction Amortized Cost Basis Percent of Loan Category Amortized Cost Basis Percent of Loan Category Total (In Thousands) Real estate loans: Residential 1-4 family $ 625 0.4 % $ - 0.0 % $ 625 Farmland 108 0.1 % - 0.0 % 108 Other loans: Home equity 70 0.1 % - 0.0 % 70 Agricultural 150 0.1 % 6 0.0 % 156 Total $ 953 $ 6 $ 959 As of or For the Six Months Ended June 30, 2025 Term Extension and Payment Deferral Term Extension and Interest Rate Reduction Amortized Cost Basis Percent of Loan Category Amortized Cost Basis Percent of Loan Category Total (In Thousands) Real estate loans: Residential 1-4 family $ 625 0.4 % $ - 0.0 % $ 625 Commercial real estate - 0.0 % 209 0.0 % 209 Farmland 108 0.1 % - 0.0 % 108 Other loans: Home equity 114 0.1 % - 0.0 % 114 Agricultural 403 0.3 % 6 0.0 % 409 Total $ 1,250 $ 215 $ 1,465 During the three and six months ended June 30, 2024, the Company modified one loan. As of June 30, 2024, the Company modified one farmland loan by extending the payment for seven months. The loan had amortized cost of $ 155,000 or 0.1 % of farmland loans at June 30, 2024. The loan paid off during the fourth quarter of 2024. - 17 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 4. MORTGAGE SERVICING RIGHTS The Company is servicing mortgage loans for the benefit of others which are not included in the condensed consolidated statements of financial condition and have unpaid principal balances of $ 1,986,957,000 and $ 2,016,242,000 at June 30, 2025 and December 31, 2024 , respectively. Servicing loans for others generally consists of collecting mortgage payments, maintaining escrow accounts, disbursing payments to investors and foreclosure processing. Mortgage loan servicing fees were $ 1,255,000 and $ 1,275,000 for the three months ended June 30, 2025 and 2024 , respectively. Mortgage loan servicing fees were $ 2,511,000 and $ 2,579,000 for the six months ended June 30,2025 and 2024, respectively. These fees, net of amortization, are included in mortgage banking, net, which is a component of noninterest inc ome on the condensed consolidated statements of income. Custodial balances maintained in connection with the foregoing loan servicing are included in noninterest checking deposits and were $ 14,069,000 and $ 10,077,000 at June 30, 2025 and December 31, 2024 , respectively. The following is a summary of activity in mortgage servicing rights: As of or For the Three Months Ended June 30, 2025 2024 (In Thousands) Mortgage servicing rights: Beginning balance $ 15,282 $ 15,738 Mortgage servicing rights capitalized 355 347 Amortization of mortgage servicing rights ( 517 ) ( 471 ) Ending balance $ 15,120 $ 15,614 As of or For the Six Months Ended June 30, 2025 2024 (In Thousands) Mortgage servicing rights: Beginning balance $ 15,376 $ 15,853 Mortgage servicing rights capitalized 626 599 Amortization of mortgage servicing rights ( 882 ) ( 838 ) Ending balance $ 15,120 $ 15,614 The fair values of these mortgage servicing rights were $ 20,318,000 and $ 20,370,000 at June 30, 2025 and December 31, 2024 , 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: June 30, December 31, 2025 2024 Key assumptions: Discount rate 12 % 12 % Prepayment speed range 0 - 509 % 0 - 209 % Weighted average prepayment speed 116 % 110 % NOTE 5. DEPOSITS Deposits are summarized as follows: June 30, December 31, 2025 2024 (In Thousands) Noninterest checking $ 417,324 $ 419,211 Interest-bearing checking 205,021 221,476 Savings 205,596 210,572 Money market 450,685 367,094 Time certificates of deposit 459,299 462,875 Total $ 1,737,925 $ 1,681,228 Time certificates of deposit includ e $ 1,425,000 a nd $ 0 of fixed rate brokered certificates at June 30, 2025 and December 31, 2024 , respectively. - 18 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 6. OTHER LONG-TERM DEBT Other long-term debt consisted of the following: June 30, 2025 December 31, 2024 Unamortized Unamortized Debt Debt Principal Issuance Principal Issuance Amount Costs Amount Costs (In Thousands) Subordinated debentures fixed at 5.50 % to floating, due 2030 $ 15,000 $ ( 168 ) $ 15,000 $ ( 185 ) Subordinated debentures fixed at 3.50 % to floating, due 2032 40,000 ( 763 ) 40,000 ( 821 ) Subordinated debentures variable at 3-Month SOFR plus 1.68 %, due 2035 5,155 - 5,155 - Total other long-term debt $ 60,155 $ ( 931 ) $ 60,155 $ ( 1,006 ) In January 2022, the Company completed the issuance of $ 40,000,000 in aggregate principal amount of subordinated notes due in 2032 in a private placement transaction to certain institutional accredited investors and qualified buyers. 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 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. The subordinated debentures qualify as Tier 2 capital for regulatory capital purposes. In June 2020, the Company completed the issuance of $ 15,000,000 in aggregate principal amount of subordinated notes due in 2030 in a private placement transaction to certain qualified institutional accredited investors. The notes bear interest at an annual fixed rate of 5.50 % payable semi-annually. Starting July 1, 2025, 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 509.0 basis points, payable quarterly. The floating rate was 9.39 % as of July 1, 2025. The notes are subject to redemption at the option of the Company on or after July 1, 2025. The subordinated debentures qualify as Tier 2 capital for regulatory capital purposes. In September 2005, the Company completed the private placement of $ 5,155,000 in subordinated debentures to the Trust. The Trust funded the purchase of the subordinated debentures through the sale of trust preferred securities to First Tennessee Bank, N.A. with a liquidation value of $ 5,155,000 . Using interest payments made by the Company on the debentures, the Trust began paying quarterly dividends to preferred security holders in December 2005. The annual percentage rate of the interest payable on the subordinated debentures and distributions payable on the preferred securities was fixed at 6.02% until December 2010 then became variable at three -month LIBOR plus 1.42%, making the rate 6.20 % as of December 31, 2023. In December of 2022, Governors of the Federal Reserve System adopted final rule 12 C.F.R. Part 253, Regulation Implementing the Adjustable Interest Rate (LIBOR) Act. Rule 253 identified SOFR-benchmark rates to replace LIBOR in certain financial contracts after June 30, 2023. As a result, the variable rate for interest payable converted to three -month CME Term SOFR plus 1.68 % during the quarter ended March 31, 2024. The rate was 5.97 % as of June 30, 2025. Dividends on the preferred securities are cumulative and the Trust may defer the payments for up to five years. The preferred securities mature in December 2035 unless the Company elects and obtains regulatory approval to accelerate the maturity date. The subordinated debentures qualify as Tier 1 capital for regulatory purposes. - 19 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 7. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following table includes information regarding the activity in accumulated other comprehensive income (loss). Unrealized (Losses) Gains on Securities Available-for-Sale (In Thousands) Balance, April 1, 2025 $ ( 18,945 ) Other comprehensive income, before reclassifications and income taxes 1,475 Amounts reclassified from accumulated other comprehensive loss, before income taxes - Income tax provision ( 388 ) Total other comprehensive income 1,087 Balance, June 30, 2025 $ ( 17,858 ) Balance, April 1, 2024 $ ( 21,263 ) Other comprehensive income, before reclassifications and income taxes 524 Amounts reclassified from accumulated other comprehensive loss, before income taxes - Income tax provision ( 138 ) Total other comprehensive income 386 Balance, June 30, 2024 $ ( 20,877 ) Balance, January 1, 2025 $ ( 20,146 ) Other comprehensive income, before reclassifications and income taxes 3,115 Amounts reclassified from accumulated other comprehensive loss, before income taxes - Income tax provision ( 827 ) Total other comprehensive income 2,288 Balance, June 30, 2025 $ ( 17,858 ) Balance, January 1, 2024 $ ( 19,945 ) Other comprehensive loss, before reclassifications and income taxes ( 1,265 ) Amounts reclassified from accumulated other comprehensive loss, before income taxes - Income tax benefit 333 Total other comprehensive loss ( 932 ) Balance, June 30, 2024 $ ( 20,877 ) - 20 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 8. EARNINGS PER COMMON SHARE The computations of basic and diluted earnings per common share are as follows: Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 (Dollars in Thousands, Except Per Share Data) Basic weighted average shares outstanding 7,791,320 7,830,925 7,801,726 7,827,926 Dilutive effect of stock compensation 21,336 14,347 17,387 12,362 Diluted weighted average shares outstanding 7,812,656 7,845,272 7,819,113 7,840,288 Net income available to common shareholders $ 3,237 $ 1,738 $ 6,476 $ 3,636 Basic earnings per common share $ 0.42 $ 0.22 $ 0.83 $ 0.46 Diluted earnings per common share $ 0.41 $ 0.22 $ 0.83 $ 0.46 Restricted stock units excluded from the diluted average outstanding share calculation because their effect would be anti-dilutive - 21,698 - 15,544 NOTE 9. DERIVATIVES AND HEDGING ACTIVITIES The Company enters into commitments to originate and sell mortgage loans. The Bank uses derivatives to hedge the risk of changes in fair values of interest rate lock commitments and mortgage loans held-for-sale. An optimal amount of mortgage loans are sold directly into bulk commitments with investors at the time an interest rate is locked, other loans are sold on an individual best-efforts basis at the time an interest rate is locked, and the remaining balance of locked loans are hedged using To-Be-Announced (“TBA”) mortgage-backed securities or bulk mandatory forward loan sale commitments. Derivatives are accounted for as free-standing or economic derivatives and are measured at fair value. Derivatives are recorded as either other assets or other liabilities on the condensed consolidated statements of condition. Derivatives are summarized as follows: June 30, 2025 December 31, 2024 Notional Fair Value Notional Fair Value Amount Asset Liability Amount Asset Liability (In Thousands) Interest rate lock commitments $ 18,335 $ 17 $ - $ 10,155 $ - $ 103 Forward TBA mortgage-backed securities 12,000 - 140 10,000 142 - Changes in the fair value of the derivatives are recorded in mortgage banking, net, within noninterest income on the condensed consolidated statements of inc ome . Net losses of $ 70,000 were recorded for the three months ended June 30, 2025, compared to net losses of $ 45,000 for the three months ended June 30, 2024. Net losses of $ 162,000 were recorded for the six months ended June 30, 2025 , compared to net losses of $ 67,000 for the six months ended June 30, 2024 . NOTE 10 . FAIR VALUE OF FINANCIAL INSTRUMENTS Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Assets and liabilities that are measured at fair value are grouped in three levels within the fair value hierarchy based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. The fair value hierarchy is as follows: ■ Level 1 Inputs – Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities. ■ Level 2 Inputs – Valuations are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuations for which all significant assumptions are observable or can be corroborated by observable market data. ■ Level 3 Inputs – Valuations are based on unobservable inputs that may include significant management judgment and estimation. A description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy at the reporting date, is set forth below. - 21 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS – continued Available-for-Sale Securities – Securities classified as available-for-sale are reported at fair value utilizing Level 1 (nationally recognized securities exchanges) and Level 2 inputs. For Level 2 inputs securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include but is not limited to dealer quotes, market spreads, cash flows, the U. S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayments speeds, credit information and the bond’s terms and conditions. Loans Held-for-Sale – These loans are reported at fair value. Fair value is determined based on expected proceeds based on committed sales contracts and commitments of similar loans if not already committed and are considered Level 2 inputs. Derivative Instruments – The fair value of the interest rate lock commitments, forward TBA mortgage-backed securities and mandatory forward commitments are estimated using quoted or published market prices for similar instruments and adjusted for factors such as pull-through rate assumptions based on historical information, where appropriate. Interest rate lock commitments are considered Level 3 inputs and forward TBA mortgage-backed securities and mandatory forward commitments are considered Level 2 inputs. Collateral-Dependent Loans – Individually reviewed collateral-dependent loans are reported at the fair value of the underlying collateral less costs to sell. Collateral-dependent loans are considered Level 3 inputs. Collateral values are estimated using Level 3 inputs based on internally customized discounting criteria. Real Estate and Other Repossessed Assets – Fair values are determined at the time the loan is foreclosed upon and the asset is transferred from loans. The value is based primarily on third party appraisals, less costs to sell and are considered Level 3 inputs for determining fair value. Repossessed assets are reviewed and evaluated periodically for additional impairment and adjusted accordingly. Mortgage Servicing Rights – The fair value of mortgage servicing rights are estimated using net present value of expected cash flows based on a third party model that incorporates industry assumptions and is adjusted for factors such as prepayment speeds and are considered Level 3 inputs. The following tables summarize financial assets and financial 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. June 30, 2025 Level 1 Level 2 Level 3 Total Fair Inputs Inputs Inputs Value (In Thousands) Financial assets: Available-for-sale securities: U.S. government and agency obligations $ - $ 4,549 $ - $ 4,549 U.S. treasury obligations 44,422 - - 44,422 Municipal obligations - 114,822 - 114,822 Corporate obligations - 3,148 - 3,148 Mortgage-backed securities - 27,706 - 27,706 Collateralized mortgage obligations - 83,202 - 83,202 Asset-backed securities - 7,174 - 7,174 Loans held-for-sale - 13,651 - 13,651 Interest rate lock commitments - - 17 17 Financial liabilities: Forward TBA mortgage-backed securities - 140 - 140 December 31, 2024 Level 1 Level 2 Level 3 Total Fair Inputs Inputs Inputs Value (In Thousands) Financial assets: Available-for-sale securities: U.S. government and agency obligations $ - $ 5,195 $ - $ 5,195 U.S. treasury obligations 46,913 - - 46,913 Municipal obligations - 117,877 - 117,877 Corporate obligations - 4,162 - 4,162 Mortgage-backed securities - 28,235 - 28,235 Collateralized mortgage obligations - 82,623 - 82,623 Asset-backed securities - 7,585 - 7,585 Loans held-for-sale - 13,368 - 13,368 Forward TBA mortgage-backed securities - 142 - 142 Financial liabilities: Interest rate lock commitments - - 103 103 - 22 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS – continued Certain financial assets may be measured at fair value on a nonrecurring basis. These assets are subject to fair value adjustments that result from the application of lower of cost or fair value accounting or write-downs of individual assets, such as impaired loans that are collateral-dependent, real estate and other repossessed assets and mortgage servicing rights. The following table summarizes financial assets measured at fair value on a nonrecurring basis for which a nonrecurring change in fair value has been recorded during the reporting periods presented: June 30, 2025 Level 1 Level 2 Level 3 Total Fair Inputs Inputs Inputs Value (In Thousands) Collateral-dependent loans individually evaluated, net of ACL $ - $ - $ 43 $ 43 December 31, 2024 Level 1 Level 2 Level 3 Total Fair Inputs Inputs Inputs Value (In Thousands) Collateral-dependent loans individually evaluated, net of ACL $ - $ - $ 96 $ 96 The following table represents the Banks’s Level 3 financial assets and liabilities, the valuation techniques used to measure the fair value of those financial assets and liabilities, and the significant unobservable inputs and the ranges of values for those inputs. Principal Significant Range of Valuation Unobservable Significant Input Instrument Technique Inputs Values Collateral-dependent loans individually evaluated Fair value of underlying collateral Discount applied to the obtained appraisal 10 - 30 % Real estate and other repossessed assets Fair value of collateral Discount applied to the obtained appraisal 10 - 30 % Interest rate lock commitments Internal pricing model Pull-through expectations 85 - 96 % The following tables provide a reconciliation of assets and liabilities measured at fair value using significant unobservable inputs (Level 3 ) on a recurring basis during the three and six months ended June 30, 2025 . As of or For the As of or For the Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 Interest Rate Lock Commitments Interest Rate Lock Commitments (In Thousands) (In Thousands) Beginning balance $ ( 28 ) $ ( 63 ) $ ( 103 ) $ 15 Purchases and issuances ( 10 ) ( 254 ) ( 28 ) ( 395 ) Sales and settlements 55 226 148 289 Ending balance $ 17 $ ( 91 ) $ 17 $ ( 91 ) Unrealized gains (losses) related to items held at end of period $ 45 $ ( 28 ) $ 120 $ ( 106 ) - 23 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS – continued The tables below summarize the estimated fair values of financial instruments of the Company, whether or not recognized at fair value on the condensed consolidated statements of condition. The tables are followed by methods and assumptions that were used by the Company in estimating the fair value of the classes of financial instruments. June 30, 2025 Total Level 1 Level 2 Level 3 Estimated Carrying Inputs Inputs Inputs Fair Value Amount (In Thousands) Financial assets: Cash and cash equivalents $ 26,928 $ - $ - $ 26,928 $ 26,928 FHLB stock - 7,000 - 7,000 7,000 FRB stock - 4,131 - 4,131 4,131 Loans receivable, gross - - 1,529,008 1,529,008 1,569,662 Mortgage servicing rights - - 20,318 20,318 15,120 Financial liabilities: Non-maturing interest-bearing deposits - 861,302 - 861,302 861,302 Time certificates of deposit - - 457,784 457,784 459,299 FHLB advances and other borrowings - - 119,491 119,491 119,407 Other long-term debt - - 59,031 59,031 60,155 December 31, 2024 Total Level 1 Level 2 Level 3 Estimated Carrying Inputs Inputs Inputs Fair Value Amount (In Thousands) Financial assets: Cash and cash equivalents $ 31,559 $ - $ - $ 31,559 $ 31,559 FHLB stock - 7,778 - 7,778 7,778 FRB stock - 4,131 - 4,131 4,131 Loans receivable, gross - - 1,466,511 1,466,511 1,520,646 Mortgage servicing rights - - 20,370 20,370 15,376 Financial liabilities: Non-maturing interest-bearing deposits - 799,142 - 799,142 799,142 Time certificates of deposit - - 461,254 461,254 462,875 FHLB advances and other borrowings - - 141,057 141,057 140,930 Other long-term debt - - 58,024 58,024 60,155 - 24 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Introduction Eagle Bancorp Montana, Inc. is a bank holding company registered under the Bank Holding Company Act, is incorporated under the laws of Delaware and headquartered in Helena, Montana. Its wholly-owned subsidiary, Opportunity Bank of Montana (the "Bank"), is a Montana-state-chartered bank that is a member of the Federal Reserve System. This discussion and analysis provides information that management believes is necessary to understand Eagle's financial condition, changes in financial condition, results of operations, and cash flows for the three and six months ended June 30, 2025, as compared to 2024. The following should be read in conjunction with the Company's Consolidated Financial Statements, and accompanying Notes thereto, for the year ended December 31, 2024, included in Eagle's Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (SEC) on March 14, 2025, and in conjunction with the Condensed Consolidated Financial Statements, and accompanying Notes thereto, included in Part I - Item 1. Financial Statements of this report. The results of operations for the three and six months ended June 30, 2025, are not necessarily indicative of the future results that may be attained for the entire year or other interim periods. Executive Summary The Company’s primary business activity is the ownership of the Bank. The Bank focuses on consumer, commercial, and agricultural lending. It engages in typical banking activities: acquiring deposits from local markets and originating loans and investing in securities. Our earnings depend primarily on our level of net interest income, which is the difference between interest earned on our interest-earning assets, consisting primarily of loans and investment securities, and the interest paid on interest-bearing liabilities, consisting primarily of deposits, borrowed funds, and trust-preferred securities. Net interest income is a function of our interest rate spread, which is the difference between the average yield earned on our interest-earning assets and the average rate paid on our interest-bearing liabilities, as well as a function of the average balance of interest-earning assets compared to interest-bearing liabilities. Also contributing to our earnings is noninterest income, which consists primarily of service charges and fees on loan and deposit products and services, net gains and losses on sale of assets, and mortgage loan service fees. Net interest income and noninterest income are offset by provisions for credit losses, general administrative and other expenses, including salaries and employee benefits and occupancy and equipment costs, as well as by state and federal income tax expense. The Bank has focused on diversifying the loan portfolio over the past decade, adding commercial and agricultural loans to the strong mortgage lending proficiency. Loan originations represented by single-family residential mortgages enabled the Bank 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 grown the commercial loan portfolio in both real estate and non-real estate, and further added agricultural loans, which have a shorter term and slightly higher interest rate, through acquisitions. The purpose of diversification is to mitigate the Bank’s exposure to specific market segments, as well as to improve our ability to manage our interest rate spread. 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 now maintains a significant loan serviced portfolio which provides a steady source of fee income. Fee income is also supplemented with fees generated from deposit accounts. The Bank has a high percentage of non-maturity deposits, such as checking accounts and savings accounts, which allows management flexibility in managing its spread. Non-maturity deposits and certificates of deposits do not automatically reprice as interest rates rise. 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. Management continues to focus on improving the Bank’s earnings. Management believes the Bank needs to continue to concentrate on increasing net interest margin, other areas of fee income and control of operating expenses to achieve earnings growth going forward. Management’s strategy of growing the loan portfolio and deposit base is expected to help achieve these goals as follows: loans typically earn higher rates of return than investments; a larger deposit base should yield higher fee income; increasing the asset base will reduce the relative impact of fixed operating costs. The biggest challenge to this strategy is funding growth in an efficient manner. It may become more difficult to maintain deposit growth due to significant competition, the current conditions in the banking industry and possible reduced customer demand for deposits as customers may shift into other asset classes. The level and movement of interest rates impacts the Bank’s earnings as well. The Federal Open Market Committee decreased the federal fund s target rate to 4.50% during the year ended December 31, 2024 . The rate remained at 4.50% du ring the six months ended June 30, 2025. - 25 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Financial Condition Comparisons of financial condition in this section are between June 30, 2025 and December 31, 2024. Total assets were $2.14 billion at June 30, 2025, an increase of $34.54 million, or 1.6% from $2.10 billion at December 31, 2024. Loans receivable, net increased by $48.13 million or 3.2% from December 31, 2024. However, securities available-for-sale decreased $7.57 million, or 2.6% from December 31, 2024. Total liabilities were $1.96 billion at June 30, 2025, an increase of $28.67 million, or 1.5% from $1.93 billion at December 31, 2024. The increase was largely due to an increase in total deposits, offset by a decrease in FHLB advances. Total deposits increased $56.70 million from December 31, 2024 and total borrowings decreased $21.45 million from December 31, 2024. Total shareholders’ equity increased $5.87 million, or 3.4% from December 31, 2024. Financial Condition Details Investment Activities The following table summarizes investment activities: June 30, December 31, 2025 2024 Fair Value Percent of Total Fair Value Percent of Total (Dollars in Thousands) Securities available-for-sale: U.S. government and agency obligations $ 4,549 1.60 % $ 5,195 1.78 % U.S. treasury obligations 44,422 15.59 46,913 16.03 Municipal obligations 114,822 40.28 117,877 40.29 Corporate obligations 3,148 1.10 4,162 1.42 Mortgage-backed securities 27,706 9.72 28,235 9.65 Collateralized mortgage obligations 83,202 29.19 82,623 28.24 Asset-backed securities 7,174 2.52 7,585 2.59 Total securities available-for-sale $ 285,023 100.00 % $ 292,590 100.00 % Securities available-for-sale were $285.02 million at June 30, 2025, a decrease of $7.57 million, or 2.6% from $292.59 million at December 31, 2024. The decrease was primarily due to maturity, principal payments and call activity of $13.34 million offset by a security purchase of $3.02 million and an increase in fair value of $3.12 million. - 26 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Financial Condition – continued Lending Activities The following table includes the composition of the Bank’s loan portfolio by loan category: June 30, December 31, 2025 2024 Amount Percent of Total Amount Percent of Total (Dollars in Thousands) Real estate loans: Residential 1-4 family (1) $ 147,143 9.37 % $ 153,721 10.11 % Residential 1-4 family construction 47,146 3.00 45,701 3.01 Total residential 1-4 family 194,289 12.37 199,422 13.12 Commercial real estate 675,285 43.03 645,962 42.48 Commercial construction and development 100,984 6.43 124,211 8.17 Farmland 162,182 10.33 146,610 9.64 Total commercial real estate 938,451 59.79 916,783 60.29 Total real estate loans 1,132,740 72.16 1,116,205 73.41 Other loans: Home equity 102,778 6.55 97,543 6.41 Consumer 26,658 1.70 28,513 1.88 Commercial 152,335 9.70 144,039 9.47 Agricultural 155,151 9.89 134,346 8.83 Total commercial loans 307,486 19.59 278,385 18.30 Total other loans 436,922 27.84 404,441 26.59 Total loans 1,569,662 100.00 % 1,520,646 100.00 % Allowance for credit losses (17,730 ) (16,850 ) Total loans, net $ 1,551,932 $ 1,503,796 (1) Excludes loans held-for-sale. Loans receivable, net increased $48.13 million , or 3.2%, to $1.55 billion at June 30, 2025 from $1.50 billion at December 31, 2024 . The increase was largely driven by an increase in total commercial loans of $29.10 million, an increase in commercial real estate loans of $21.67 million and an increase of $5.24 million in home equity loans. The increases were slightly offset by a decrease of $5.13 million in total residential loans and a decrease of $1.85 million in consumer loans. Total loan originations were $280.72 million for the six months ended June 30, 2025 . Total residential 1-4 family originations were $121.76 million, which includes $98.55 million of loans held-for-sale originations. Total commercial originations were $76.48 million. Total commercial real estate originations were $60.97 million. Home equity loan originations totaled $14.68 million. Consumer loan originations totaled $6.83 million. Loans held-for-sale increased by $280,000 to $13.65 million at June 30, 2025 from $13.37 million at December 31, 2024 . - 27 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Financial Condition – continued Lending Activities– continued Generally, our collection procedures provide that when a loan is 15 or more days delinquent, the borrower is sent a past due notice. If the loan becomes 30 days delinquent, the borrower is sent a written delinquency notice requiring payment. If the delinquency continues, subsequent efforts are made to contact the delinquent borrower, including face to face meetings and counseling to resolve the delinquency. All collection actions are undertaken with the objective of compliance with the Fair Debt Collection Act. For mortgage loans and home equity loans, if the borrower is unable to cure the delinquency or reach a payment agreement, we will institute foreclosure actions. If a foreclosure action is taken and the loan is not reinstated, paid in full or refinanced, the property is sold at judicial sale at which we may be the buyer if there are no adequate offers to satisfy the debt. Any property acquired as the result of foreclosure, or by deed in lieu of foreclosure, is classified as real estate owned until such time as it is sold or otherwise disposed of. When real estate owned is acquired, it is recorded at its fair market value less estimated selling costs. The initial recording of any loss is charged to the allowance for credit lo sses. Subsequent write-downs are recorded as a charge to operations. As of June 30, 2025 and December 31, 2024 there was $86,000 and $45,000, respectively, of real estate owned and other repossessed property. The following table sets forth information regarding nonperforming assets: June 30, December 31, 2025 2024 (Dollars in Thousands) Nonaccrual loans Real estate loans: Residential 1-4 family $ 559 $ 469 Residential 1-4 family construction - 961 Commercial real estate 453 268 Commercial construction and development 1 2 Farmland 425 190 Other loans: Home equity 222 335 Consumer 157 121 Commercial 197 204 Agricultural 409 677 Accruing loans delinquent 90 days or more Real estate loans: Residential 1-4 family - 623 Residential 1-4 family construction 1,328 - Commercial real estate 475 - Commercial construction and development 762 - Other loans: Commercial 61 - Agricultural 34 - Total nonperforming loans 5,083 3,850 Real estate owned and other repossessed property, net 86 45 Total nonperforming assets $ 5,169 $ 3,895 Total nonperforming loans to total loans 0.32 % 0.25 % Total nonperforming loans to total assets 0.24 % 0.18 % Total nonaccrual loans to total loans 0.15 % 0.21 % Total nonperforming assets to total assets 0.24 % 0.19 % Nonaccrual loans as of June 30, 2025 and December 31, 2024 include $617,000 and $591,000, respectively of acquired loans that deteriorated subsequent to the acquisition date. - 28 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following tables include the composition of the commercial real estate loan category: June 30, 2025 Non-Owner Occupied Owner Occupied Total Percent of Total CRE (Dollars In Thousands) Automotive related $ - $ 23,477 $ 23,477 3.48 % Bars and restaurants 5,505 16,183 21,688 3.21 Car washes 987 - 987 0.15 Construction and related industries 23,040 12,738 35,778 5.30 Healthcare and social assistance 10,882 13,940 24,822 3.68 Hospitality industry related - 13,342 13,342 1.98 Hotels and other traveler accommodations 81,134 - 81,134 12.01 Industrial/warehouse 64,398 - 64,398 9.54 Lessors of mini warehouses and self-storage units 20,263 - 20,263 3.00 Lessors of nonresidential buildings 60,041 - 60,041 8.89 Lessors of other real estate property 30,057 - 30,057 4.45 Multifamily 115,884 - 115,884 17.14 Office space 22,874 40,644 63,518 9.41 Other real estate rental and leasing 6,347 - 6,347 0.94 Real estate leasing activities - 29,346 29,346 4.35 Wholesale and retail trade 11,988 14,256 26,244 3.89 Other 31,949 26,010 57,959 8.58 Total commercial real estate $ 485,349 $ 189,936 $ 675,285 100.00 % December 31, 2024 Non-Owner Occupied Owner Occupied Total Percent of Total CRE (Dollars In Thousands) Automotive related $ - $ 23,738 $ 23,738 3.67 % Bars and restaurants 5,030 15,912 20,942 3.24 Car washes 884 - 884 0.14 Construction and related industries 19,717 13,968 33,685 5.21 Healthcare and social assistance 10,483 13,907 24,390 3.78 Hospitality industry related - 13,764 13,764 2.13 Hotels and other traveler accommodations 66,702 - 66,702 10.33 Industrial/warehouse 51,168 - 51,168 7.92 Lessors of mini warehouses and self-storage units 16,682 - 16,682 2.58 Lessors of nonresidential buildings 67,782 - 67,782 10.49 Lessors of other real estate property 31,675 - 31,675 4.90 Multifamily 113,789 - 113,789 17.63 Office space 20,553 38,104 58,657 9.08 Other real estate rental and leasing 6,836 - 6,836 1.06 Real estate leasing activities - 27,465 27,465 4.25 Wholesale and retail trade 11,969 12,705 24,674 3.82 Other 37,876 25,253 63,129 9.77 Total commercial real estate $ 461,146 $ 184,816 $ 645,962 100.00 % Commercial real estate loans made up $675.29 million or 43.0% of the Bank's total loan portfolio at June 30, 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 June 30, 2025. The Bank's asset quality with respect to commercial real estate loans has remained strong despite recent economic and market conditions. The Bank has limited exposure in the office space sector, none of which is located in central business districts. Management believes that the Bank has implemented appropriate risk management practices, including regular and ongoing loan reviews, stress tests, and sensitivity analysis. Loan reviews include monitoring past due rates, non-performing trends, concentrations, loan to value ratios, and other qualitative factors. The Bank's loan policy is robust and is updated annually or as needed to meet the risk mitigation and strategic goals of the bank. - 29 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Financial Condition – continued Deposits and Other Sources of Funds The following table includes deposit accounts by category: June 30, December 31, 2025 2024 Percent Percent Amount of Total Amount of Total (Dollars in Thousands) Noninterest checking $ 417,324 24.01 % $ 419,211 24.94 % Interest-bearing checking 205,021 11.80 221,476 13.17 Savings 205,596 11.82 210,572 12.52 Money market 450,685 25.92 367,094 21.83 Total 1,278,626 73.55 1,218,353 72.46 Certificates of deposit accounts: IRA certificates 21,171 1.22 21,419 1.27 Brokered certificates 1,425 0.08 - - Other certificates 436,703 25.15 441,456 26.27 Total certificates of deposit 459,299 26.45 462,875 27.54 Total deposits $ 1,737,925 100.00 % $ 1,681,228 100.00 % Deposits increased by $56.70 million, or 3.4%, from December 31, 2024 to June 30, 2025. Money market deposits increased $83.59 million. This increase was partially offset by decreases in interest-bearing checking of $16.46 million, savings of $4.98 million, certificates of deposit o f $3.58 m illion and noninterest checking of $1.89 million. The estimated amount of uninsured deposits was approximately $329.0 million or 19% of total deposits at June 30, 2025 compared to approximately $323.0 million or 19% of total deposits at December 31, 2024 . The following table summarizes borrowing activity: June 30, December 31, 2025 2024 Net Percent Net Percent Amount of Total Amount of Total (Dollars in Thousands) FHLB advances and other borrowings $ 119,407 66.85 % $ 140,930 70.44 % Other long-term debt: Subordinated debentures fixed at 5.50% to floating, due 2030 14,832 8.30 14,815 7.40 Subordinated debentures fixed at 3.50% to floating, due 2032 39,237 21.96 39,179 19.58 Subordinated debentures variable, due 2035 5,155 2.89 5,155 2.58 Total other long-term debt 59,224 33.15 59,149 29.56 Total borrowings $ 178,631 100.00 % $ 200,079 100.00 % Total borrowings decreased by $21.45 million, or 10.7%, to $178.63 million at June 30, 2025 from $200.08 million at December 31, 2024, due to a decrease in FHLB advances and other borrowings. Shareholders’ Equity T otal shareholders’ equity increased by $5.87 million, or 3.4%, to $180.64 million at June 30, 2025 from $174.77 million at December 31, 2024 . The increase was primarily attributed to net income of $6.48 million and a decrease in unrealized losses of securities available for sale of $2.29 million. These increases were partially offset by dividends paid of $2.27 million and treasury stock repurchases of $1.16 million. - 30 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Analysis of Net Interest Income The Bank’s earnings have historically depended primarily upon net interest income, which is the difference between interest income earned on loans and investments and interest paid on deposits and any borrowed funds. It is the single largest component of Eagle’s operating income. Net interest income is affected by (i) the difference between rates of interest earned on loans and investments and rates paid on interest-bearing deposits and borrowings (the “interest rate spread”) and (ii) the relative amounts of loans and investments and interest-bearing deposits and borrowings. 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. For the Three Months Ended June 30, 2025 2024 Average Interest Average Interest Daily and Yield/ Daily and Yield/ Balance Dividends Cost(4) Balance Dividends Cost(4) (Dollars in Thousands) Assets: Interest-earning assets: Investment securities $ 287,707 $ 2,397 3.34 % $ 306,207 $ 2,631 3.45 % FHLB and FRB stock 11,345 236 8.34 13,243 264 8.00 Loans receivable (1) 1,554,756 24,442 6.31 1,513,313 22,782 6.04 Other earning assets 8,216 75 3.66 4,655 145 12.49 Total interest-earning assets 1,862,024 27,150 5.85 1,837,418 25,822 5.64 Noninterest-earning assets 250,446 240,030 Total assets $ 2,112,470 $ 2,077,448 Liabilities and equity: Interest-bearing liabilities: Deposit accounts: Checking $ 219,867 $ 102 0.19 % $ 218,995 $ 139 0.25 % Savings 201,585 31 0.06 215,959 34 0.06 Money market 412,716 2,515 2.44 348,351 2,145 2.47 Certificates of deposit 454,719 4,229 3.73 437,390 4,566 4.19 FHLB advances and other borrowings 125,773 1,459 4.65 192,346 2,625 5.47 Other long-term debt 59,211 669 4.53 59,062 681 4.62 Total interest-bearing liabilities 1,473,871 9,005 2.45 1,472,103 10,190 2.78 Noninterest checking 417,374 405,188 Other noninterest-bearing liabilities 42,121 38,624 Total liabilities 1,933,366 1,915,915 Total equity 179,104 161,533 Total liabilities and equity $ 2,112,470 $ 2,077,448 Net interest income/interest rate spread (2) $ 18,145 3.40 % $ 15,632 2.86 % Net interest margin (3) 3.91 % 3.41 % Total interest-earning assets to interest-bearing liabilities 126.34 % 124.82 % (1) Includes loans held-for-sale. (2) Interest rate spread represents the difference between the average yield on interest-earning assets and the average rate on interest-bearing liabilities. (3) Net interest margin represents income before the provision for loan losses divided by average interest-earning assets. (4) For purposes of this table, tax exempt income is not calculated on a tax equivalent basis. - 31 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS For the Six Months Ended June 30, 2025 2024 Average Interest Average Interest Daily and Yield/ Daily and Yield/ Balance Dividends Cost(4) Balance Dividends Cost(4) (Dollars in Thousands) Assets: Interest-earning assets: Investment securities $ 290,490 $ 4,848 3.37 % $ 310,168 $ 5,355 3.46 % FHLB and FRB stock 11,580 496 8.64 13,283 511 7.72 Loans receivable (1) 1,540,765 47,762 6.25 1,506,303 44,724 5.95 Other earning assets 5,782 113 3.94 4,113 174 8.48 Total interest-earning assets 1,848,617 53,219 5.81 1,833,867 50,764 5.55 Noninterest-earning assets 251,363 238,146 Total assets $ 2,099,980 $ 2,072,013 Liabilities and equity: Interest-bearing liabilities: Deposit accounts: Checking $ 219,889 $ 198 0.18 % $ 219,511 $ 185 0.17 % Savings 202,332 62 0.06 218,045 69 0.06 Money market 394,852 4,708 2.40 343,533 4,170 2.43 Certificates of deposit 460,218 8,780 3.85 438,661 9,008 4.12 FHLB advances and other borrowings 132,302 3,085 4.70 186,767 5,122 5.50 Other long-term debt 59,192 1,339 4.56 59,043 1,364 4.63 Total interest-bearing liabilities 1,468,785 18,172 2.49 1,465,560 19,918 2.74 Noninterest checking 411,535 406,077 Other noninterest-bearing liabilities 41,411 38,292 Total liabilities 1,921,731 1,909,929 Total equity 178,249 162,084 Total liabilities and equity $ 2,099,980 $ 2,072,013 Net interest income/interest rate spread (2) $ 35,047 3.32 % $ 30,846 2.82 % Net interest margin (3) 3.82 % 3.37 % Total interest-earning assets to interest-bearing liabilities 125.86 % 125.13 % (1) Includes loans held-for-sale. (2) Interest rate spread represents the difference between the average yield on interest-earning assets and the average rate on interest-bearing liabilities. (3) Net interest margin represents income before the provision for loan losses divided by average interest-earning assets. (4) For purposes of this table, tax exempt income is not calculated on a tax equivalent basis. Net Interest Margin (NIM). Net interest margin for the three months ended June 30, 2025 was 3.91%, an increase of 50 basis points compared to June 30, 2024. For the six months ended June 30, 2025, net interest margin was 3.82%, an increase of 45 basis points compared to the six months ended June 30, 2024. The change in NIM reflects the increase in yields on interest-earning assets and the decrease in yield on interest-bearing liabilities. - 32 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Rate/Volume Analysis The following tables present the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to: (1) changes in volume multiplied by the old rate; (2) changes in rate, which are changes in rate multiplied by the old volume; and (3) changes not solely attributable to rate or volume, which have been allocated proportionately to the change due to volume and the change due to rate. For the Three Months Ended June 30, 2025 2024 Due to Due to Volume Rate Net Volume Rate Net (In Thousands) Interest-earning assets: Investment securities $ (159 ) $ (75 ) $ (234 ) $ (321 ) $ 3 $ (318 ) FHLB and FRB stock (38 ) 10 (28 ) 1 102 103 Loans receivable (1) 624 1,036 1,660 1,441 2,204 3,645 Other earning assets 111 (181 ) (70 ) 20 100 120 Total interest-earning assets 538 790 1,328 1,141 2,409 3,550 Interest-bearing liabilities: Checking 1 (38 ) (37 ) (21 ) (104 ) (125 ) Savings (2 ) (1 ) (3 ) (4 ) 1 (3 ) Money Market 396 (26 ) 370 92 890 982 Certificates of deposit 181 (518 ) (337 ) 783 1,092 1,875 FHLB advances and other borrowings (909 ) (257 ) (1,166 ) 361 85 446 Other long-term debt 2 (14 ) (12 ) 2 5 7 Total interest-bearing liabilities (331 ) (854 ) (1,185 ) 1,213 1,969 3,182 Change in net interest income $ 869 $ 1,644 $ 2,513 $ (72 ) $ 440 $ 368 For the Six Months Ended June 30, 2025 2024 Due to Due to Volume Rate Net Volume Rate Net (In Thousands) Interest earning assets: Investment securities $ (340 ) $ (167 ) $ (507 ) $ (575 ) $ 138 $ (437 ) FHLB and FRB stock (66 ) 51 (15 ) 34 209 243 Loans receivable (1) 1,023 2,015 3,038 3,167 4,683 7,850 Other earning assets 71 (132 ) (61 ) 26 102 128 Total interest earning assets 688 1,767 2,455 2,652 5,132 7,784 Interest bearing liabilities: Checking - 13 13 (47 ) (218 ) (265 ) Savings (5 ) (2 ) (7 ) (9 ) 6 (3 ) Money Market 623 (85 ) 538 33 2,028 2,061 Certificates of deposit 443 (671 ) (228 ) 1,631 3,393 5,024 FHLB advances and other borrowings (1,494 ) (543 ) (2,037 ) 1,416 385 1,801 Other long-term debt 3 (28 ) (25 ) 3 9 12 Total interest bearing liabilities (430 ) (1,316 ) (1,746 ) 3,027 5,603 8,630 Change in net interest income $ 1,118 $ 3,083 $ 4,201 $ (375 ) $ (471 ) $ (846 ) (1) Includes loans held-for-sale. - 33 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations The following compares the results of operations for the three months ended June 30, 2025 and 2024. Three Months Ended June 30, 2025 2024 Dollar Change Percent Change (Dollars in Thousands) Interest and dividend income $ 27,150 $ 25,822 $ 1,328 5.1 % Interest expense 9,005 10,190 (1,185 ) -11.6 Net interest income 18,145 15,632 2,513 16.1 Provision for credit losses 1,038 412 626 151.9 Net interest income after provision for credit losses 17,107 15,220 1,887 12.4 Noninterest income 4,807 4,269 538 12.6 Noninterest expense 17,926 17,307 619 3.6 Provision for income taxes 751 444 307 69.1 Net income $ 3,237 $ 1,738 $ 1,499 86.2 % Net Income. Eagle’s net income for the three months ended June 30, 2025 was $3.24 million compared to $1.74 million for the three months ended June 30, 2024. The increase of $1.50 million was largely driven by an increase in net interest income after provision for credit losses of $1.89 million. For the current period, basic earnings per common share was $0.42 and diluted earnings per common share was $0.41. Basic and diluted earnings per common share were both $0.22 for the three months ended June 30, 2024. Net Interest Income. Net interest income increased to $18.15 million for the three months ended June 30, 2025, from $15.63 million for the three months ended June 30, 2024. The increase of $2.51 million, or 16.1% was the result of an increase in interest and dividend income of $1.33 million and a decrease in interest expense of $1.19 million. Interest and Dividend Income. Interest and dividend income was $27.15 million for the three months ended June 30, 2025, compared to $25.82 million for the three months ended June 30, 2024. The increase of $1.33 million, or 5.1% was driven by interest and fees on loans, which increased to $24.44 million for the three months ended June 30, 2025, from $22.78 million for the three months ended June 30, 2024. The increase in interest and fees on loans was due to an increase in the average yield on loans, as well as an increase in the average balance of loans. The average interest rate earned on loans receivable increased by 27 basis points, from 6.04% for the three months ended June 30, 2024, to 6.31% for the current period. Interest accretion on purchased loans was $607,000 for the three months ended June 30, 2025, which resulted in a 13 basis point increase in net interest margin compared to $304,000 for the three months ended June 30, 2024, which resulted in a seven basis point increase in net interest margin. Average balances for loans receivable, including loans held-for-sale, for the three months ended June 30, 2025 were $1.55 billion compared to $1.51 billion for the three months ended June 30, 2024. This represents an increase of $41.45 million, or 2.7% and was due to organic growth. Interest on investment securities available-for-sale decreased by $234,000 period over period due to a decrease in average balances for investments from $306.21 million for the three months ended June 30, 2024 to $287.71 million for the three months ended June 30, 2025. In addition, average interest rates earned on investments decreased from 3.45% for the three months ended June 30, 2024 to 3.34% for the three months ended June 30, 2025. Interest Expense. Total interest expense was $9.01 million for the three months ended June 30, 2025, compared to $10.19 million for the three months ended June 30, 2024. The decrease of $1.19 million was due to a net decrease of $1.18 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 $192.35 million for the three months ended June 30, 2024, to $125.77 million for the three months ended June 30, 2025. The average rate paid on FHLB advances and other borrowings also decreased from 5.47% for the three months ended June 30, 2024, to 4.65% for the three months ended June 30, 2025. The overall average rate on total deposits was also down from 1.70% for the three months ended June 30, 2024, compared to 1.62% for the three months ended June 30, 2025. The average balance for total deposits was $1.71 billion for the three months ended June 30, 2025, compared to $1.63 billion for the three months ended June 30, 2024. Provision for Credit Losses. Provision for credit losses was $1.04 million for the three months ended June 30, 2025, compared to $412,000 for the three months ended June 30, 2024. The provision for credit losses for the three months ended June 30, 2025, included an increase in the provision for credit losses on loans to $1.06 million, offset slightly by a recapture of the provision for unfunded commitments of $20,000. Noninterest Income. Total noninterest income was $4.81 million for the three months ended June 30, 2025, compared to $4.27 million for the three months ended June 30, 2024. The increase of $538,000, or 12.6% was primarily due to an increase in mortgage banking, net, of $509,000. Mortgage banking, net, includes net gain on sale of mortgage loans which increased to $2.08 million for the three months ended June 30, 2025, compared to $1.60 million for the three months ended June 30, 2024. During the three months ended June 30, 2025, $54.60 million residential mortgage loans were sold compared to $53.23 million in the three months ended June 30, 2024. Gross margin levels increased from 3.01% for the three months ended June 30, 2024, to 3.81% for the three months ended June 30, 2025. Noninterest Expense. Noninterest expense was $17.93 million for the three months ended June 30, 2025, compared to $17.31 million for the three months ended June 30, 2024, an increase of $619,000 or 3.6%. Provision for Income Taxes. Provision for income taxes was $751,000 for the three months ended June 30, 2025, compared to $444,000 for the three months ended June 30, 2024. The effective tax rate was 18.8% for the current period compared to 20.3% for the three months ended June 30, 2024. - 34 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following compares the results of operations for the six months ended June 30, 2025 and 2024. Six Months Ended June 30, 2025 2024 Dollar Change Percent Change (Dollars in Thousands) Interest and dividend income $ 53,219 $ 50,764 $ 2,455 4.8 % Interest expense 18,172 19,918 (1,746 ) -8.8 Net interest income 35,047 30,846 4,201 13.6 Provision for credit losses 1,080 277 803 289.9 Net interest income after provision for credit losses 33,967 30,569 3,398 11.1 Noninterest income 8,823 8,221 602 7.3 Noninterest expense 34,932 34,340 592 1.7 Provision for income taxes 1,382 814 568 69.8 Net income $ 6,476 $ 3,636 $ 2,840 78.1 % Net Income. Eagle’s net income for the six months ended June 30, 2025 was $6.48 million compared to $3.64 million for the six months ended June 30, 2024. The increase of $2.84 million was largely driven by an increase in net interest income after provision for credit losses of $3.40 million. For the current period, basic and diluted earnings per common share were both $0.83. Basic and diluted earnings per common share were both $0.46 for the six months ended June 30, 2024. Net Interest Income. Net interest income increased to $35.05 million for the six months ended June 30, 2025, from $30.85 million for the six months ended June 30, 2024. The increase of $4.20 million, or 13.6% was the result of an increase in interest and dividend income of $2.46 million and a decrease in interest expense of $1.75 million. Interest and Dividend Income. Interest and dividend income was $53.22 million for the six months ended June 30, 2025, compared to $50.76 million for the six months ended June 30, 2024. The increase of $2.46 million, or 4.8% was driven by interest and fees on loans, which increased to $47.76 million for the six months ended June 30, 2025, from $44.72 million for the six months ended June 30, 2024. The increase in interest and fees on loans was due to an increase in the average yield on loans, as well as an increase in the average balance of loans. The average interest rate earned on loans receivable increased by 30 basis points, from 5.95% for the six months ended June 30, 2024, to 6.25% for the current period. Interest accretion on purchased loans was $779,000 for the six months ended June 30, 2025, which resulted in an eight basis point increase in net interest margin compared to $423,000 for the six months ended June 30, 2024, which resulted in a five basis point increase in net interest margin. Average balances for loans receivable, including loans held-for-sale, for the six months ended June 30, 2025 were $1.54 billion compared to $1.51 billion for the six months ended June 30, 2024. This represents an increase of $34.47 million, or 2.3% and was due to organic growth. Interest on investment securities available-for-sale decreased by $507,000 period over period, due to the decrease in average balances for investments from $310.17 million for the six months ended June 30, 2024 to $290.49 million for the six months ended June 30, 2025. In addition, average interest rates earned on investments decreased from 3.46% for the six months ended June 30, 2024, to 3.37% for the six months ended June 30, 2025. Interest Expense. Total interest expense was $18.17 million for the six months ended June 30, 2025, compared to $19.92 million for the six months ended June 30, 2024. The decrease of $1.75 million, or 8.8% was primarily due to a net decrease of $2.05 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 $186.77 million for the six months ended June 30, 2024, to $132.30 million for the six months ended June 30, 2025. The average rate paid on FHLB advances and other borrowings also decreased from 5.50% for the six months ended June 30, 2024, to 4.70% for the six months ended June 30, 2025. The overall average rate on total deposits was down from 1.66% for the six months ended June 30, 2024, compared to 1.64% for the six months ended June 30, 2025. However, the average balance for total deposits was $1.69 billion for the six months ended June 30, 2025, compared to $1.63 billion for the six months ended June 30, 2024. Provision for Credit Losses. Provision for credit losses was $1.08 million for the six months ended June 30, 2025, compared to $277,000 for the six months ended June 30, 2024. The increase in the provision was driven by loan growth. The provision for credit losses for the six months ended June 30, 2025, included an increase in the provision for credit losses on loans to $930,000 and an increase in the provision for unfunded commitments to $150,000. Noninterest Income. Total noninterest income was $8.82 million for the six months ended June 30, 2025, compared to $8.22 million for the six months ended June 30, 2024. The increase of $602,000, or 7.3% was primarily due to an increase in mortgage banking, net, of $457,000 and an increase in appreciation in cash surrender value of life insurance of $135,000 due to bank owned life insurance policies purchased in 2024. Mortgage banking, net, includes net gain on sale of mortgage loans which increased to $3.43 million for the six months ended June 30, 2025, compared to $3.01 million for the six months ended June 30, 2024. During the six months ended June 30, 2025, $97.40 million residential mortgage loans were sold compared to $96.79 million in the six months ended June 30, 2024. Gross margin levels increased from 3.11% for the six months ended June 30, 2024, to 3.52% for the six months ended June 30, 2025. Noninterest Expense. Noninterest expense was $34.93 million for the six months ended June 30, 2025, compared to $34.34 million for the six months ended June 30, 2024, an increase of $592,000 or 1.7%. Software subscriptions increased $334,000 due to implementing a new loan origination system. Occupancy and equipment expense increased $329,000 due to maintenance expense and costs related to opening a new branch. Salaries and employee benefits increased modestly by $318,000. However, contract changes led to lower data processing expense which decreased $272,000 and partially offset the increases. Provision for Income Taxes. Provision for income taxes was $1.38 million for the six months ended June 30, 2025, compared to $814,000 for the six months ended June 30, 2024. The effective tax rate was 17.6% for the current period and 18.3% for the six months ended June 30, 2024. The effective tax rate has been impacted by an increase in the proportion of tax-exempt income compared to pretax earnings, as well as tax credits from investments in low-income housing tax credit projects. - 35 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources Liquidity 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 June 30, 2025 and December 31, 2024. The Bank’s primary sources of funds are deposits, repayment of loans and mortgage-backed securities, maturities of investments, funds provided from operations, advances from the FHLB of Des Moines and other borrowings. Scheduled repayments of loans and mortgage-backed securities and maturities of investment securities are generally predictable. However, other sources of funds, such as deposit flows and loan prepayments, can be greatly influenced by the general level of interest rates, economic conditions and competition. The Company uses liquidity resources principally to fund existing and future loan commitments. It also uses them to fund maturing certificates of deposit and demand deposit withdrawals, for investment purposes, to meet operating expenses and capital expenditures, for dividend payments and for stock repurchases to maintain adequate liquidity levels. Liquidity may be adversely affected by unexpected deposit outflows, higher interest rates paid by competitors, and similar matters. Management monitors projected liquidity needs and determines the level desirable based in part on the Bank's commitments to make loans and management’s assessment of the Bank's ability to generate funds. The Company's available borrowing capacity was approximately $463.00 million as of June 30, 2025 and $404.00 million as of December 31, 2024 . June 30, December 31, 2025 2024 Borrowings Remaining Borrowing Borrowings Remaining Borrowing Outstanding Capacity Outstanding Capacity (In Thousands) Federal Home Loan Bank advances $ 119,407 $ 338,172 $ 140,930 $ 276,664 Federal Reserve Bank discount window - 24,854 - 27,349 Correspondent bank lines of credit - 100,000 - 100,000 Total $ 119,407 $ 463,026 $ 140,930 $ 404,013 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 were valued at par. In March of 2024, the Company accessed borrowings through the BTFP. In September of 2024, the Company paid off the borrowings. Brokered deposits are another source of funding the Bank may utilize from time to time. As of June 30, 2025, the Bank had $1.43 million in brokered certificates and $5.53 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. 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 has a $15.00 million line of credit with a correspondent ban k. There was no outstanding balance for this line of credit at June 30, 2025 or December 31, 2024. Eagle's ability to receive dividends from the Bank in future periods will depend on several factors, including, without limitation, the Bank's future profits, asset quality, liquidity, and overall condition. In addition, both the Montana Division of Banking and Financial Institutions and Federal Reserve may require approval to pay dividends, based on certain regulatory statutes and limitations. Eagle presently believes that the sources of liquidity discussed above, including existing liquid funds on hand, are sufficient to meet its anticipated funding needs in the short and long term. However, if economic conditions were to significantly deteriorate, regulatory capital requirements for Eagle or the Bank were to increase as the result of regulatory directives or otherwise, or Eagle were to believe it is prudent to enhance current liquidity levels, then Eagle may seek additional liquidity from external sources. - 36 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Capital Resources As of June 30, 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”) b y 1.2% c ompared to an increase of 1.7% at December 31, 2024. A 200-basis point decrease in interest rates scenario decreased EVE by 6.9% compared to a decrease of 7.9% at December 31, 2024. The Bank is within the guidelines set forth by the Board of Directors for interest rate risk sensitivity in rising interest rate scenarios. The Bank's regulatory capital was in excess of all applicable regulatory requirements and the Bank is deemed "well capitalized" pursuant to State of Montana and FRB rules as of June 30, 2025 . The Bank's actual capital amounts and ratios as of June 30, 2025 are presented in the table below and all of the ratios, with the exception of the Tier 1 capital adjusted total average assets ratio, include the capital conservation buffer of 2.50%. Minimum To Be Well Minimum Required Capitalized Under for Capital Adequacy Prompt Corrective Actual Purposes Action Provisions Amount Ratio Amount Ratio Amount Ratio (Dollars in Thousands) June 30, 2025: Total risk-based capital to risk weighted assets $ 236,129 13.51 % $ 183,457 10.50 % $ 174,721 10.00 % Tier 1 capital to risk weighted assets 216,849 12.41 148,513 8.50 139,777 8.00 Common equity Tier 1 capital to risk weighted assets 216,849 12.41 122,305 7.00 113,569 6.50 Tier 1 capital to adjusted total average assets 216,849 10.34 83,917 4.00 104,896 5.00 Minimum To Be Well Minimum Required Capitalized Under for Capital Adequacy Prompt Corrective Actual Purposes Action Provisions Amount Ratio Amount Ratio Amount Ratio (Dollars in Thousands) December 31, 2024: Total risk-based capital to risk weighted assets $ 229,316 13.49 % $ 178,521 10.50 % $ 170,020 10.00 % Tier 1 capital to risk weighted assets 211,066 12.41 144,517 8.50 136,016 8.00 Common equity Tier 1 capital to risk weighted assets 211,066 12.41 119,014 7.00 110,513 6.50 Tier 1 capital to adjusted total average assets 211,066 10.07 83,861 4.00 104,826 5.00 - 37 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Impact of Inflation and Changing Prices Our condensed consolidated financial statements and the accompanying notes, which are found in Part I, Item 1, have been prepared in accordance with generally accepted accounting principles, which require the measurement of financial position and operating results in terms of historical dollars without considering the change in the relative purchasing power of money over time and due to inflation. The impact of inflation is reflected in the increased cost of our operations. Interest rates have a greater impact on our performance than do the general levels of inflation. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services. Interest Rate Risk Interest rate risk is the potential for loss of future earnings resulting from adverse changes in the level of interest rates. Interest rate risk results from several factors and could have a significant impact on the Company’s net interest income, which is the Company's primary source of revenue. Net interest income is affected by changes in interest rates, the relationship between rates on interest-bearing assets and liabilities, the impact of interest rate fluctuations on asset prepayments and the mix of interest-bearing assets and liabilities. Although interest rate risk is inherent in the banking industry, banks are expected to have sound risk management practices in place to measure, monitor and control interest rate exposures. The objective of interest rate risk management is to contain the risks associated with interest rate fluctuations. The process involves identification and management of the sensitivity of net interest income to changing interest rates. The ongoing monitoring and management of this risk is an important component of the Company’s asset/liability committee, which is governed by policies established by the Company’s Board that are reviewed and approved annually. The Board delegates responsibility for carrying out the asset/liability management policies to the Bank’s asset/liability committee. In this capacity, the asset/liability committee develops guidelines and strategies impacting the Company’s asset/liability management related activities based upon estimated market risk sensitivity, policy limits and overall market interest rate levels and trends. The Company’s goal of its asset and liability management practices is to maintain or increase the level of net interest income within an acceptable level of interest rate risk. The Bank has established acceptable levels of interest rate risk as follows for an instantaneous and permanent shock in rates: projected net interest income over the next twelve months (i.e. year-1) will not be reduced by more than 15.0% given an immediate increase or decrease in interest rates of up to 300 basis points, and the subsequent twelve months (i.e. year-2) will not be reduced by more than 20.0% given an immediate increase or decrease in interest rates of up to 300 basis points. The following table includes the Bank’s net interest income sensitivity analysis. Changes in Market Rate Sensitivity Policy Policy Interest Rates As of June 30, 2025 Limits Limits (Basis Points) Year 1 Year 2 Year 1 Year 2 +300 -9.1% 2.8% -15.0% -20.0% +200 -6.0% 3.8% -15.0% -15.0% +100 -2.8% 5.1% -10.0% -10.0% -100 1.8% 4.8% -10.0% -10.0% -200 3.4% 3.2% -15.0% -15.0% -300 5.9% 2.2% -15.0% -20.0% Critical Accounting Policies and Estimates The accounting and financial reporting policies of Eagle are in accordance with generally accepted accounting principles ("GAAP") and conform to the accounting and reporting guidelines prescribed by bank regulatory authorities. Eagle has identified certain of its accounting policies as “critical accounting policies,” consisting of those related to the allowance for credit losses and business combinations. In determining which accounting policies are critical in nature, Eagle has identified the policies that require significant judgment or involve complex estimates. It is management's practice to discuss critical accounting policies with the Board of Directors' Audit Committee on a periodic basis, including the development, selection, implementation, and disclosure of the critical accounting policies. The application of these policies has a significant impact on Eagle’s unaudited interim consolidated financial statements. Eagle’s financial results could differ significantly if different judgments or estimates are used in the application of these policies. All accounting policies described in "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 – Organization and Summary of Significant Accounting Policies" in Eagle’s 2024 Form 10-K should be reviewed for a greater understanding of how we record and report our financial performance. There have been no significant changes to the accounting policies, estimates, and assumptions, or the judgments affecting the application of these estimates and assumptions from those disclosed in Eagle’s 2024 Form 10-K, other than the following: The excess of consideration paid over fair value of net assets acquired is recorded as goodwill. Goodwill is not amortized but is tested at least annually for impairment or more frequently if events occur or circumstances change that indicate impairment may exist. 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. Estimating the fair value of the reporting unit requires the use of inputs and assumptions including projected earnings of the Company in future years for which there is inherent uncertainty. 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. A weighted average of both the market and income approaches was used in valuing the reporting unit’s fair value. The interim goodwill impairment assessment as of August 31, 2024 concluded that goodwill was not impaired. Our quantitative annual impairment test as of October 31, 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. - 38 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Item 3. Quantitative and Qualitative Disclosures About Market Risk This item has been omitted based on Eagle’s status as a smaller reporting company. Item 4. Controls and Procedures As of the end of the period covered by this report, 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, 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 June 30, 2025, our disclosure controls and procedures were not effective as of such date due to ongoing remediation of a material weakness in internal control over financial reporting as of December 31, 2024 described below. 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 were 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. Management, with oversight from the Audit Committee, has implemented and continues to implement 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. The remediation of this material weakness is still in process. Except as noted above, during the last quarter, there were no changes in the Company’s internal control over financial reporting that have materially affected, or were reasonably likely to materially affect, the Company’s internal control over financial reporting. - 39 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Part II - OTHER INFORMATION Item 1. Legal Proceedings. Neither the Company nor the Bank is involved in any pending legal proceeding other than non-material legal proceedings occurring in the ordinary course of business. Item 1A. Risk Factors There have not been any material changes in the risk factors previously disclosed in Part 1, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. On April 24, 2025, Eagle's Board of Directors (the "Board") authorized the repurchase of up to 400,000 shares of its common stock beginning May 1, 2025. 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. The plan expires on May 1, 2026. 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 (the "2024 Repurchase Plan"). Under the 2024 Repurchase 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 of $16.74. During the first quarter of 2025, 50,000 shares were purchased under this plan at an average price of $15.11. The following table summarized the Company's purchase of its common stock for the three months ended June 30, 2025 under this plan. The plan expired on May 1, 2025. Total Number Maximum of Shares Number of Purchased Shares that Total as Part of May Yet Be Number of Average Publicly Purchased Shares Price Paid Announced Plans Under the Plans Purchased Per Share or Programs or Programs April 1, 2025 through April 30, 2025 25,000 $ 16.34 25,000 300,000 May 1, 2025 through May 31, 2025 - - - 300,000 June 1, 2025 through June 30, 2025 - - - 300,000 Total 25,000 $ 16.34 25,000 On April 20, 2023, the Board authorized the repurchase of up to 400,000 shares of its common stock beginning May 1, 2023. 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 repurchases depended on market conditions and other corporate considerations. During the second quarter of 2023, 17,901 shares were purchased under this plan at an average price of $12.89. No shares were purchased during the third or fourth quarter of 2023 under this plan. No shares were purchased during the first or second quarter of 2024 under this plan. Item 3. Defaults Upon Senior Securities. Not applicable. Item 4. Mine Safety Disclosures Not applicable. Item 5. Other Information. During the three months ended June 30, 2025 , none of our directors or officers (as defined in Exchange Act Rule 16a - 1 (f)) adopted or terminated a “Rule 10b5 - 1 trading arrangement” or “non-Rule 10b5 - 1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K. - 40 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Part II - OTHER INFORMATION - continued Item 6. Exhibits. Exhibit Number Description 3.1 Amended and Restated Certificate of Incorporation of Eagle Bancorp Montana, Inc. (incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K filed on February 23, 2010). 3.2 Certificate of Amendment to the Amended and Restated Certificate of Incorporation. (incorporated by reference to Exhibit 3.2 of our Quarterly Report on Form 10-Q filed on May 9, 2019). 3.3 Bylaws of Eagle Bancorp Montana, Inc., amended as of August 20, 2015 (incorporated by reference to 3.1 of our Current Report on Form 8-K filed on August 25, 2015). 10.1 2025 Stock Incentive Plan for Directors, Officers and Employees (incorporated by reference to Exhibit 10.1 of our Form S-8 Registration Statements filed on May 9, 2025) 31.1 Certification by Laura F. Clark, Chief Executive Officer, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 (a) of the Sarbanes-Oxley Act of 2002. 31.2 Certification by Miranda J. Spaulding, Chief Financial Officer, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 (a) of the Sarbanes-Oxley Act of 2002. 32.1 Certification by Laura F. Clark, Chief Executive Officer, and Miranda J. Spaulding, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 101.INS Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) (1) 101.SCH Inline XBRL Taxonomy Extension Schema Document (1) 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document (1) 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document (1) 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document (1) 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document (1) 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) (1) These interactive data files shall not be deemed filed for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, or Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under those sections. - 41 - Table of Contents EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. EAGLE BANCORP MONTANA, INC. Date: August 7, 2025 By: /s/ Laura F. Clark Laura F. Clark President/CEO Date: August 7, 2025 By: /s/ Miranda J. Spaulding Miranda J. Spaulding SVP/CFO - 42 -