Eagle Bancorp Montana Earns $1.8 Million, or $0.24 per Diluted Share, in Second Quarter of 2022; Increases Quarterly Cash Dividend by 10% to $0.1375 per Share

HELENA, Mont., July 26, 2022 (GLOBE NEWSWIRE) -- Eagle Bancorp Montana, Inc. (NASDAQ:EBMT), (the "Company," "Eagle"), the holding company of Opportunity Bank of Montana (the "Bank"), today reported net income of $1.8 million, or $0.24 per diluted share, in the second quarter of 2022, compared to $2.2 million, or $0.34 per diluted share, in the preceding quarter, and $2.7 million, or $0.39 per diluted share, in the second quarter a year ago. Second quarter results were impacted by $1.9 million in acquisition costs associated with its merger of First Community Bancorp, Inc., and its subsidiary, First Community Bank ("First Community"). This compared to $317,000 in acquisition costs during the first quarter of 2022, and no acquisition costs in the second quarter a year ago. In the first six months of 2022, net income was $4.0 million, or $0.57 per diluted share, compared to $7.9 million, or $1.17 per diluted share, in the first six months of 2021.

Eagle's board of directors increased its quarterly cash dividend by 10% to $0.1375 per share on July 21, 2022. The dividend will be payable September 2, 2022 to shareholders of record August 12, 2022. The current dividend represents an annualized yield of 2.81% based on recent market prices.

"The highlight of the second quarter was completing the acquisition of First Community," said Peter J. Johnson, CEO. "In the transaction, we acquired nine branches and two mortgage loan production offices. In addition, we added approximately $370 million in assets, $321 million in deposits and $191 million in loans, substantially impacting our balance sheet for the second quarter of 2022. First Community is a highly experienced agriculture and commercial lender with a 130-year operating history in Montana and deep roots in the communities it serves. This merger complements our franchise and positions us well in key commercial and agricultural markets across Montana."

Eagle closed its acquisition of First Community on April 30, 2022 in a transaction valued at approximately $38.6 million. "The acquisition of First Community brings our total to four completed mergers within the last five years," said Laura F. Clark, President. "All four transactions further solidify our position as the fourth-largest Montana-based bank and provide us with a unique opportunity to expand our market presence and lending activities across the state."  

Second Quarter 2022 Highlights (at or for the three-month period ended June 30, 2022, except where noted):

• Net income was $1.8 million, or $0.24 per diluted share, in the second quarter of 2022, compared to $2.2 million, or $0.34 per diluted share, in the preceding quarter, and $2.7 million, or $0.39 per diluted share, in the second quarter a year ago.
• Net interest margin ("NIM") was 4.09% in the second quarter of 2022, compared to 3.64% in the preceding quarter, and 3.81% in the second quarter a year ago.
• Revenues (net interest income before the loan loss provision, plus noninterest income) increased 15.7% to $23.3 million in the second quarter of 2022, compared to $20.1 million in the preceding quarter and increased 3.0% compared to $22.6 million in the second quarter a year ago.  
• Purchase discount on loans from the First Community portfolio was $5.4 million at April 30, 2022 (the "acquisition date") of which $4.7 million remained as of June 30, 2022.
• Remaining purchase discount on loans from acquisitions prior to 2022 totaled $829,000 as of June 30, 2022.
• The accretion of the loan purchase discount into loan interest income from the First Community, and previous acquisitions, was $790,000 in the second quarter of 2022, compared to interest accretion on purchased loans from acquisitions of $108,000 in the preceding quarter.
• The allowance for loan losses represented 233.3% of nonperforming loans at June 30, 2022, compared to 135.6% a year earlier.
• Total loans increased 43.1% to $1.25 billion, at June 30, 2022, compared to $873.9 million a year earlier, and increased 30.5% compared to $958.7 million at March 31, 2022.
• Total deposits increased 44.2% to $1.65 billion at June 30, 2022, from $1.15 billion a year ago, and increased 30.0% compared to $1.27 billion at March 31, 2022.
• Paid a quarterly cash dividend during the second quarter of $0.125 per share on June 3, 2022 to shareholders of record May 13, 2022.

Balance Sheet Results

In large part due to the First Community acquisition, Eagle's total assets increased 39.8% to $1.90 billion at June 30, 2022, compared to $1.36 billion a year ago, and increased 27.4% from $1.49 billion three months earlier.

The investment securities portfolio increased to $384.0 million at June 30, 2022, compared to $264.6 million at March 31, 2022, and $234.0 million at June 30, 2021.

"While a majority of the loan increase was due to the recent acquisition of First Community, organic loan growth was strong, increasing $101.4 million or 10.6% during the second quarter," said Clark.

Eagle originated $159.2 million in new residential mortgages during the quarter and sold $150.5 million in residential mortgages, with an average gross margin on sale of mortgage loans of approximately 3.47%. This production compares to residential mortgage originations of $177.5 million in the preceding quarter with sales of $172.1 million and an average gross margin on sale of mortgage loans of approximately 3.62%.

Commercial real estate loans increased 32.0% to $486.2 million at June 30, 2022, compared to $368.3 million a year earlier. Commercial construction and development loans increased 108.8% to $132.6 million, compared to $63.5 million a year ago. Agricultural and farmland loans increased 91.2% to $230.8 million at June 30, 2022, compared to $120.7 million a year earlier. Residential mortgage loans increased 30.5% to $132.4 million, compared to $101.4 million a year earlier. Commercial loans increased 19.1% to $128.5 million, compared to $107.9 million a year ago. Home equity loans increased 12.0% to $62.4 million, residential construction loans increased 34.0% to $53.9 million, and consumer loans increased 36.7% to $25.8 million, compared to a year ago.  

Total deposits increased 44.2% to $1.65 billion at June 30, 2022, compared to $1.15 billion at June 30, 2021, and increased 30.0% from $1.27 billion at March 31, 2022. Noninterest-bearing checking accounts represented 30.2%, interest-bearing checking accounts represented 16.1%, savings accounts represented 23.4%, money market accounts comprised 19.8% and time certificates of deposit made up 10.5% of the total deposit portfolio at June 30, 2022.

Shareholders' equity was $162.8 million at June 30, 2022, compared to $152.7 million a year earlier and $143.5 million three months earlier. Tangible book value was $14.82 per share, at June 30, 2022, compared to $19.17 per share a year earlier and $18.08 per share three months earlier.  

Operating Results

"Higher yields on interest earning assets contributed to NIM expansion during the second quarter," said Johnson. "With the recent rate increase enacted by the Federal Reserve in May and June 2022, we anticipate continued improvement in our NIM in future quarters, especially with the possibility of additional rate increases throughout the year."  

Eagle's NIM was 4.09% in the second quarter of 2022, compared to 3.64% in the preceding quarter, and 3.81% in the second quarter a year ago. The interest accretion on acquired loans totaled $790,000 and resulted in a 20 basis-point increase in the NIM during the second quarter of 2022, compared to $108,000 and a three basis-point increase in the NIM during the preceding quarter. Average yields on earning assets for the second quarter increased to 4.37% from 4.08% a year ago. For the first six months of 2022, the NIM was consistent with the prior year.

Eagle's second quarter revenues increased 15.7% to $23.3 million, compared to $20.1 million in the preceding quarter and increased 3.0% compared to $22.6 million in the second quarter a year ago. In the first six months of 2022, revenues were $43.4 million, compared to $47.2 million in the first six months of 2021. The decrease compared to the first six months a year ago was largely due to lower volumes in mortgage banking activity.

Net interest income, before the loan loss provision, increased 34.8% to $16.0 million in the second quarter, compared to $11.8 million in the first quarter of 2022, and increased 41.0% compared to $11.3 million in the second quarter of 2021. Year-to-date, net interest income increased 23.8% to $27.8 million, compared to $22.5 million in the same period one year earlier.

Eagle's total noninterest income decreased 11.5% to $7.3 million in the second quarter of 2022, compared to $8.3 million in the preceding quarter, and decreased 35.1% compared to $11.3 million in the second quarter a year ago. Net mortgage banking, the largest component of noninterest income, totaled $5.5 million in the second quarter of 2022, compared to $6.2 million in the preceding quarter and $9.9 million in the second quarter a year ago. These changes are largely driven by the reduced volumes in mortgage activity. In the first six months of 2022, noninterest income decreased 36.7% to $15.6 million, compared to $24.7 million in the first six months of 2021. Net mortgage banking revenue decreased 45.9% to $11.7 million in the first six months of 2022, compared to $21.7 million in the first six months of 2021. These decreases were driven by a decline in net gain on sale of mortgage loans.

Second quarter noninterest expense increased to $20.0 million, compared to $16.9 million in the preceding quarter and $19.0 million in the second quarter a year ago. Acquisition costs related to the merger with First Community totaled $1.9 million for the current quarter, compared to $317,000 in the prior quarter and no acquisition costs in the year ago quarter.   In the first six months of 2022, noninterest expense increased modestly to $37.0 million, compared to $36.3 million in the first six months of 2021. The decrease to salaries and employee benefits expense was offset by acquisition costs in the first six months of the year.

For the second quarter of 2022, the income tax provision totaled $634,000, for an effective tax rate of 26.4%, compared to $695,000 in the preceding quarter, and $893,000 in the second quarter of 2021.  

Credit Quality

The loan loss provision was $858,000 in the second quarter of 2022, compared to $279,000 in the preceding quarter and $22,000 in the second quarter a year ago. The increase in the loan loss provision was related to current quarter charge-offs, as well as loan growth.   The allowance for loan losses represented 233.3% of nonperforming loans at June 30, 2022, compared to 202.9% three months earlier and 135.6% a year earlier. Nonperforming loans decreased to $5.9 million at June 30, 2022, compared to $6.3 million at March 31, 2022, and $8.8 million a year earlier.

Eagle had $345,000 in other real estate owned and other repossessed assets on its books at June 30, 2022. This compared to $346,000 at March 31, 2022, and $6,000 at June 30, 2021.

Net loan charge-offs/recoveries totaled $233,000 in the second quarter of 2022, compared to net loan charge-offs of $79,000 in the preceding quarter and net loan charge-offs of $22,000 in the second quarter a year ago. The allowance for loan losses was $13.3 million, or 1.07% of total loans, at June 30, 2022, compared to $12.7 million, or 1.32% of total loans, at March 31, 2022, and $11.9 million, or 1.36% of total loans, a year ago.  

Capital Management

The ratio of tangible common shareholders' equity (shareholders' equity, less goodwill and core deposit intangible) to tangible assets (total assets, less goodwill and core deposit intangible) decreased from 8.24% at March 31, 2022 to 6.45% at June 30, 2022. Shareholders' equity increased due to stock issued for the First Community acquisition. However, the acquisition also increased goodwill and core deposit intangible. In addition, shareholders' equity was reduced due to an increase in accumulated other comprehensive loss related to securities available-for-sale. These unrealized losses were a result of increased interest rates. As of June 30, 2022, Eagle's regulatory capital was in excess of all applicable regulatory requirements and is deemed well capitalized.

About the Company

Eagle Bancorp Montana, Inc. is a bank holding company headquartered in Helena, Montana, and is the holding company of Opportunity Bank of Montana, a community bank established in 1922 that serves consumers and small businesses in Montana through 32 banking offices. Additional information is available on the Bank's website at www.opportunitybank.com. The shares of Eagle Bancorp Montana, Inc. are traded on the NASDAQ Global Market under the symbol "EBMT."

Forward Looking Statements

This release may contain certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and may be identified by the use of such words as "believe," "will" "expect," "anticipate," "should," "planned," "estimated," and "potential." These forward-looking statements include, but are not limited to statements of our goals, intentions and expectations; statements regarding our business plans, prospects, mergers, growth and operating strategies; statements regarding the current global COVID-19 pandemic, 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 our management 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. These factors include, but are not limited to, changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements; general economic conditions and political events, either nationally or in our market areas, that are worse than expected; the duration and impact of the COVID-19 pandemic, including but not limited to vaccine efficacy and immunization rates, new variants, steps taken by governmental and other authorities to contain, mitigate and combat the pandemic, adverse effects on our employees, customers and third-party service providers, the increase in cyberattacks in the current work-from-home environment, the ultimate extent of the impacts on our business, financial position, results of operations, liquidity and prospects, continued deterioration in general business and economic conditions could adversely affect our revenues and the values of our assets and liabilities, lead to a tightening of credit and increase stock price volatility, and potential impairment charges; competition among depository and other financial institutions; loan demand or residential and commercial real estate values in Montana; the concentration of our business in Montana; our ability to continue to increase and manage our commercial real estate, commercial business and agricultural loans; the costs and effects of legal, compliance and regulatory actions, changes and developments, including the initiation and resolution of legal proceedings (including any securities, bank operations, consumer or employee litigation); inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments; adverse changes in the securities markets; other economic, governmental, competitive, regulatory and technological factors that may affect our operations; cyber incidents, or theft or loss of Company or customer data or money; the effect of our recent acquisitions, including the failure to achieve expected revenue growth and/or expense savings, the failure to effectively integrate their operations, the outcome of any legal proceedings and the diversion of management time on issues related to the integration.

Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. All information set forth in this press release is current as of the date of this release and the company undertakes no duty or obligation to update this information.

Use of Non-GAAP Financial Measures

In addition to results presented in accordance with generally accepted accounting principles utilized in the United States, or GAAP, the Financial Ratios and Other Data contains non-GAAP financial measures. Non-GAAP disclosures include: 1) core efficiency ratio, 2) tangible book value per share, 3) tangible common equity to tangible assets, 4) earnings per diluted share, excluding acquisition costs and 5) return on average assets, excluding acquisition costs. The Company uses these non-GAAP financial measures to provide meaningful supplemental information regarding the Company's operational performance and to enhance investors' overall understanding of such financial performance. In particular, the use of tangible book value per share and tangible common equity to tangible assets is prevalent among banking regulators, investors and analysts.

The numerator for the core efficiency ratio is calculated by subtracting acquisition costs and intangible asset amortization from noninterest expense. Tangible assets and tangible common shareholders' equity are calculated by excluding intangible assets from assets and shareholders' equity, respectively. For these financial measures, our intangible assets consist of goodwill and core deposit intangible. Tangible book value per share is calculated by dividing tangible common shareholders' equity by the number of common shares outstanding. We believe that this measure is consistent with the capital treatment by our bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios and present this measure to facilitate the comparison of the quality and composition of our capital over time and in comparison, to our competitors.

Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Further, the non-GAAP financial measure of tangible book value per share should not be considered in isolation or as a substitute for book value per share or total shareholders' equity determined in accordance with GAAP, and may not be comparable to a similarly titled measure reported by other companies. Reconciliation of the GAAP and non-GAAP financial measures are presented below.

Balance Sheet
(Dollars in thousands, except per share data)				(Unaudited)
				June 30,			March 31,			June 30,
					2022			2022			2021
Assets:
	Cash and due from banks			$	18,821		$	17,516		$	19,013
	Interest bearing deposits in banks				17,608			62,697			36,869
	Federal funds sold				9,606			14,889			2,790
		Total cash and cash equivalents			46,035			95,102			58,672
	Securities available-for-sale				384,041			264,635			233,992
	Federal Home Loan Bank ("FHLB") stock				2,337			1,723			1,874
	Federal Reserve Bank ("FRB") stock				4,206			2,974			2,974
	Mortgage loans held-for-sale, at fair value				16,947			22,295			56,826
	Loans:
	Real estate loans:
	Residential 1-4 family				132,360			99,242			101,418
	Residential 1-4 family construction				53,869			40,968			40,203
	Commercial real estate				486,197			432,976			368,327
	Commercial construction and development				132,585			105,754			63,501
	Farmland				124,544			60,363			66,070
	Other loans:
	Home equity				62,445			53,828			55,739
	Consumer				25,775			18,834			18,859
	Commercial				128,467			98,471			107,850
	Agricultural				106,274			49,836			54,632
	Unearned loan fees				(1,564	)		(1,591	)		(2,669	)
		Total loans			1,250,952			958,681			873,930
	Allowance for loan losses				(13,325	)		(12,700	)		(11,900	)
		Net loans			1,237,627			945,981			862,030
	Accrued interest and dividends receivable				9,504			5,750			5,732
	Mortgage servicing rights, net				14,809			14,288			12,128
	Assets held-for-sale, at fair value				2,041			-			-
	Premises and equipment, net				76,581			69,536			65,627
	Cash surrender value of life insurance, net				45,563			36,681			28,084
	Goodwill				34,740			20,798			20,798
	Core deposit intangible, net				8,226			1,660			2,061
	Deferred tax asset, net				6,194			3,776			-
	Other assets				11,621			6,854			8,557
		Total assets		$	1,900,472		$	1,492,053		$	1,359,355
Liabilities:
	Deposit accounts:
	Noninterest bearing				498,834			371,818			349,017
	Interest bearing				1,152,999			898,758			796,585
		Total deposits			1,651,833			1,270,576			1,145,602
	Accrued expenses and other liabilities				22,332			18,968			21,254
	Deferred tax liability, net				-			-			625
	FHLB advances and other borrowings				4,500			-			9,300
	Other long-term debt, net				59,017			58,986			29,830
		Total liabilities			1,737,682			1,348,530			1,206,611
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; 20,000,000 shares authorized; 8,507,429, 7,110,833 and 7,110,833 shares issued; 8,086,407, 6,694,811 and 6,776,703 shares outstanding at June 30, 2022, March 31, 2022 and June 31, 2021, respectively				85			71			71
	Additional paid-in capital				109,410			80,960			80,820
	Unallocated common stock held by Employee Stock Ownership Plan				(5,443	)		(5,586	)		(6,061	)
	Treasury stock, at cost (421,022, 416,022 and 334,130 shares at June 30, 2022, March 31, 2022 and June 30, 2021, respectively)				(9,691	)		(9,592	)		(7,631	)
	Retained earnings				87,510			86,750			80,607
	Accumulated other comprehensive (loss) income, net of tax				(19,081	)		(9,080	)		4,938
		Total shareholders' equity			162,790			143,523			152,744
		Total liabilities and shareholders' equity		$	1,900,472		$	1,492,053		$	1,359,355

Income Statement				(Unaudited)								(Unaudited)
(Dollars in thousands, except per share data)				Three Months Ended								Six Months Ended
				June 30,			March 31,		June 30,			June 30,
					2022			2022		2021			2022			2021
Interest and dividend income:
	Interest and fees on loans			$	14,895		$	11,373	$	11,012		$	26,268		$	22,041
	Securities available-for-sale				2,011			1,297		1,018			3,308			1,895
	FRB and FHLB dividends				38			59		63			97			132
	Other interest income				108			39		32			147			58
		Total interest and dividend income			17,052			12,768		12,125			29,820			24,126
Interest expense:
	Interest expense on deposits				422			312		366			734			768
	FHLB advances and other borrowings				15			6		45			21			115
	Other long-term debt				648			605		389			1,253			779
		Total interest expense			1,085			923		800			2,008			1,662
Net interest income					15,967			11,845		11,325			27,812			22,464
Loan loss provision					858			279		22			1,137			321
		Net interest income after loan loss provision			15,109			11,566		11,303			26,675			22,143
Noninterest income:
	Service charges on deposit accounts				394			331		293			725			566
	Mortgage banking, net				5,491			6,245		9,932			11,736			21,695
	Interchange and ATM fees				621			453		494			1,074			919
	Appreciation in cash surrender value of life insurance				250			207		173			457			331
	Net loss on sale of available-for-sale securities				(6	)		-		-			(6	)		-
	Other noninterest income				592			1,057		416			1,649			1,190
		Total noninterest income			7,342			8,293		11,308			15,635			24,701
Noninterest expense:
	Salaries and employee benefits				11,431			10,381		12,745			21,812			24,831
	Occupancy and equipment expense				1,817			1,678		1,651			3,495			3,081
	Data processing				1,413			1,251		1,198			2,664			2,495
	Advertising				303			285		251			588			524
	Amortization				440			122		143			562			287
	Loan costs				587			546		750			1,133			1,472
	FDIC insurance premiums				144			93		81			237			162
	Professional and examination fees				356			322		328			678			610
	Acquisition costs				1,876			317		-			2,193			-
	Other noninterest expense				1,679			1,953		1,890			3,632			2,788
		Total noninterest expense			20,046			16,948		19,037			36,994			36,250
Income before provision for income taxes					2,405			2,911		3,574			5,316			10,594
Provision for income taxes					634			695		893			1,329			2,648
Net income				$	1,771		$	2,216	$	2,681		$	3,987		$	7,946
Basic earnings per share				$	0.24		$	0.34	$	0.40		$	0.57		$	1.17
Diluted earnings per share				$	0.24		$	0.34	$	0.39		$	0.57		$	1.17
Basic weighted average shares outstanding					7,410,796			6,506,133		6,775,557			6,960,963			6,775,503
Diluted weighted average shares outstanding					7,422,022			6,518,847		6,794,900			6,973,233			6,791,885

ADDITIONAL FINANCIAL INFORMATION							(Unaudited)
(Dollars in thousands, except per share data)				Three or Six Months Ended
				June 30,			March 31,			June 30,
					2022			2022			2021
Mortgage Banking Activity (For the quarter):
	Net gain on sale of mortgage loans			$	5,219		$	6,233		$	10,481
	Net change in fair value of loans held-for-sale and derivatives			$	(419	)		(535	)	$	(513	)
	Mortgage servicing income (loss), net			$	691			547		$	(36	)
		Mortgage banking, net		$	5,491		$	6,245		$	9,932
Mortgage Banking Activity (Year-to-date):
	Net gain on sale of mortgage loans			$	11,452					$	24,758
	Net change in fair value of loans held-for-sale and derivatives				(954	)					(2,969	)
	Mortgage servicing income (loss), net				1,238						(94	)
		Mortgage banking, net		$	11,736					$	21,695
Performance Ratios (For the quarter):
	Return on average assets				0.40	%		0.60	%		0.80	%
	Return on average equity				4.71	%		5.79	%		6.84	%
	Net interest margin				4.09	%		3.64	%		3.81	%
	Core efficiency ratio*				76.07	%		81.98	%		83.48	%
Performance Ratios (Year-to-date):
	Return on average assets				0.49	%					1.22	%
	Return on average equity				5.25	%					10.16	%
	Net interest margin				3.89	%					3.89	%
	Core efficiency ratio*				78.81	%					76.25	%
Asset Quality Ratios and Data:				As of or for the Three Months Ended
				June 30,			March 31,			June 30,
					2022			2022			2021
	Nonaccrual loans			$	2,458		$	3,379		$	5,467
	Loans 90 days past due and still accruing				2,142			270			1,509
	Restructured loans, net				1,112			2,611			1,803
		Total nonperforming loans			5,712			6,260			8,779
	Other real estate owned and other repossessed assets				345			346			6
		Total nonperforming assets		$	6,057		$	6,606		$	8,785
	Nonperforming loans / portfolio loans				0.46	%		0.65	%		1.00	%
	Nonperforming assets / assets				0.32	%		0.44	%		0.65	%
	Allowance for loan losses / portfolio loans				1.07	%		1.32	%		1.36	%
	Allowance / nonperforming loans				233.28	%		202.88	%		135.55	%
	Gross loan charge-offs for the quarter			$	247		$	92		$	33
	Gross loan recoveries for the quarter			$	14		$	13		$	11
	Net loan charge-offs (recoveries) for the quarter			$	233		$	79		$	22
				June 30,			March 31,			June 30,
					2022			2022			2021
Capital Data (At quarter end):
	Tangible book value per share**			$	14.82		$	18.08		$	19.17
	Shares outstanding				8,086,407			6,694,811			6,776,703
	Tangible common equity to tangible assets***				6.45	%		8.24	%		9.72	%
Other Information:
	Average total assets for the quarter			$	1,752,916		$	1,475,049		$	1,337,040
	Average total assets year-to-date			$	1,614,746		$	1,475,049		$	1,307,003
	Average earning assets for the quarter			$	1,564,050		$	1,319,999		$	1,192,513
	Average earning assets year-to-date			$	1,442,703		$	1,319,999		$	1,165,273
	Average loans for the quarter ****			$	1,157,839		$	974,177		$	899,644
	Average loans year-to-date ****			$	1,066,515		$	974,177		$	894,843
	Average equity for the quarter			$	150,419		$	153,203		$	156,800
	Average equity year-to-date			$	151,841		$	153,203		$	156,386
	Average deposits for the quarter			$	1,507,765		$	1,237,341		$	1,120,826
	Average deposits year-to-date			$	1,373,270		$	1,237,341		$	1,087,804
* The core efficiency ratio is a non-GAAP ratio that is calculated by dividing non-interest expense, exclusive of acquisition costs and intangible asset amortization, by the sum of net interest income and non-interest income.
** The tangible book value per share is a non-GAAP ratio that is calculated by dividing shareholders' equity, less goodwill and core deposit intangible, by common shares outstanding.
*** The tangible common equity to tangible assets is a non-GAAP ratio that is calculated by dividing shareholders' equity, less goodwill and core deposit intangible, by total assets, less goodwill and core deposit intangible.
**** Includes loans held for sale

Reconciliation of Non-GAAP Financial Measures
Core Efficiency Ratio					(Unaudited)										(Unaudited)
(Dollars in thousands)					Three Months Ended										Six Months Ended
					June 30,			March 31,			June 30,				June 30,
						2022			2022			2021				2022			2021
Calculation of Core Efficiency Ratio:
	Noninterest expense				$	20,046		$	16,948		$	19,037			$	36,994		$	36,250
	Acquisition costs					(1,876	)		(317	)		-				(2,193	)		-
	Intangible asset amortization					(440	)		(122	)		(143	)			(562	)		(287	)
		Core efficiency ratio numerator				17,730			16,509			18,894				34,239			35,963
	Net interest income					15,967			11,845			11,325				27,812			22,464
	Noninterest income					7,342			8,293			11,308				15,635			24,701
		Core efficiency ratio denominator				23,309			20,138			22,633				43,447			47,165
	Core efficiency ratio (non-GAAP)					76.07	%		81.98	%		83.48	%			78.81	%		76.25	%

Tangible Book Value and Tangible Assets						(Unaudited)
(Dollars in thousands, except per share data)						June 30,			March 31,			June 30,
							2022			2022			2021
Tangible Book Value:
	Shareholders' equity					$	162,790		$	143,523		$	152,744
	Goodwill and core deposit intangible, net						(42,966	)		(22,458	)		(22,859	)
		Tangible common shareholders' equity (non-GAAP)				$	119,824		$	121,065		$	129,885
	Common shares outstanding at end of period						8,086,407			6,694,811			6,776,703
	Common shareholders' equity (book value) per share (GAAP)					$	20.13		$	21.44		$	22.54
	Tangible common shareholders' equity (tangible book value) per share (non-GAAP)					$	14.82		$	18.08		$	19.17
Tangible Assets:
	Total assets					$	1,900,472		$	1,492,053		$	1,359,355
	Goodwill and core deposit intangible, net						(42,966	)		(22,458	)		(22,859	)
		Tangible assets (non-GAAP)				$	1,857,506		$	1,469,595		$	1,336,496
	Tangible common shareholders' equity to tangible assets (non-GAAP)						6.45	%		8.24	%		9.72	%

Earnings Per Diluted Share, Excluding Acquisition Costs			(Unaudited)									(Unaudited)
(Dollars in thousands, except per share data)			Three Months Ended									Six Months Ended
			June 30,			March 31,			June 30,			June 30,
				2022			2022			2021			2022			2021
Net interest income after loan loss provision			$	15,109		$	11,566		$	11,303		$	26,675		$	22,143
Noninterest income				7,342			8,293			11,308			15,635			24,701
Noninterest expense				20,046			16,948			19,037			36,994			36,250
	Acquisition costs			(1,876	)		(317	)		-			(2,193	)		-
Noninterest expense, excluding acquisition costs (non-GAAP)				18,170			16,631			19,037			34,801			36,250
Income before income taxes				4,281			3,228			3,574			7,509			10,594
Provision for income taxes, excluding acquisition costs related taxes (non-GAAP)				1,129			771			893			1,877			2,648
Net Income, excluding acquisition costs (non-GAAP)			$	3,152		$	2,457		$	2,681		$	5,632		$	7,946
Diluted earnings per share (GAAP)			$	0.24		$	0.34		$	0.39		$	0.57		$	1.17
Diluted earnings per share, excluding acquisition costs (non-GAAP)			$	0.42		$	0.38		$	0.39		$	0.81		$	1.17

Return on Average Assets, Excluding Acquisition Costs			(Unaudited)
(Dollars in thousands)			June 30,			March 31,			June 30,
				2022			2022			2021
For the quarter:
	Net income, excluding acquisition costs (non-GAAP)*		$	3,152		$	2,457		$	2,681
	Average total assets quarter-to-date		$	1,752,916		$	1,475,049		$	1,337,040
	Return on average assets, excluding acquisition costs (non-GAAP)			0.72	%		0.67	%		0.80	%
Year-to-date:
	Net income, excluding acquisition costs (non-GAAP)*		$	5,632		$	2,457		$	7,946
	Average total assets year-to-date		$	1,614,746		$	1,475,049		$	1,307,003
	Return on average assets, excluding acquisition costs (non-GAAP)			0.70	%		0.67	%		1.22	%
* See Earnings Per Diluted Share, Excluding Acquisition Costs table for GAAP to non-GAAP reconciliation.

 

Contacts:		Peter J. Johnson, CEO
		(406) 457-4006
		Laura F. Clark, President
		(406) 457-4007