Eagle Bancorp Montana Earns $3.2 Million, or $0.42 per Diluted Share, in the First Quarter of 2023; Declares Quarterly Cash Dividend of $0.1375 per Share and Renews Stock Repurchase Plan

HELENA, Mont., April 25, 2023 (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 $3.2 million, or $0.42 per diluted share, in the first quarter of 2023, compared to $3.6 million, or $0.47 per diluted share, in the preceding quarter, and $2.2 million, or $0.34 per diluted share, in the first quarter a year ago.

Eagle's board of directors declared a quarterly cash dividend of $0.1375 per share on April 20, 2023. The dividend will be payable June 2, 2023 to shareholders of record May 12, 2023. The current dividend represents an annualized yield of 3.97% based on recent market prices.

"We delivered strong first quarter 2023 earnings, despite the current challenges facing the banking industry," said Laura F. Clark, President and CEO. "First quarter loan growth totaled $23.7 million and was well diversified across our loan categories. Additionally, our acquisition of First Community Bank ("First Community"), which was completed during the second quarter of 2022, is contributing positively to operating results. The transaction was valued at approximately $38.6 million and added approximately $370 million in assets, $321 million in deposits and $191 million in loans. While our outlook for the remainder of 2023 remains cautious, and we anticipate a leaner loan pipeline as recessionary concerns continue and deposit pricing pressures persist, we are well positioned for stable growth in the year ahead."

On January 1, 2023, Eagle implemented the Current Expected Credit Losses ("CECL") standard, which resulted in a $700,000 increase to the allowance for credit losses and was offset in shareholders' equity and deferred tax assets.

First Quarter 2023 Highlights (at or for the three-month period ended March 31, 2023, except where noted):

• Net income was $3.2 million, or $0.42 per diluted share, in the first quarter of 2023, compared to $3.6 million, or $0.47 per diluted share, in the preceding quarter, and $2.2 million, or $0.34 per diluted share, in the first quarter a year ago.
• Net interest margin ("NIM") was 3.86% in the first quarter of 2023, compared to 4.10% in the preceding quarter, and 3.64% in the first quarter a year ago.
• Revenues (net interest income before the provision for credit losses, plus noninterest income) decreased 7.9% to $21.1 million in the first quarter of 2023, compared to $22.9 million in the preceding quarter and increased 8.5% compared to $19.5 million in the first quarter a year ago.  
• The Company recorded a discount on loans acquired from First Community of $5.4 million at April 30, 2022 of which $3.8 million remained as of March 31, 2023.
• The remaining discount on loans from acquisitions prior to 2022 totaled $671,000 as of March 31, 2023.
• The accretion of the loan purchase discount into loan interest income from acquisitions, was $354,000 in the first quarter of 2023, compared to accretion on purchased loans from acquisitions of $267,000 in the preceding quarter.
• The allowance for credit losses represented 1.09% of portfolio loans and 134.5% of nonperforming loans at March 31, 2023. The allowance for loan losses represented 1.32% and 202.9% of nonperforming loans at March 31, 2022.
• Total loans increased 43.7% to $1.38 billion, at March 31, 2023, compared to $958.7 million a year earlier, and increased 1.8% compared to $1.35 billion at December 31, 2022.
• Total deposits increased 26.5% to $1.61 billion at March 31, 2023, from $1.27 billion a year ago, and decreased 1.7% compared to $1.64 billion at December 31, 2022.
• Available borrowing capacity was approximately $367.1 million:

				March 31, 2023
(Dollars in thousands)				Borrowings Outstanding				Remaining Borrowing Capacity
Federal Home Loan Bank advances				$	122,530			$	249,100
Federal Reserve Bank discount window					-				33,000
Correspondent bank lines of credit					-				85,000
Total				$	122,530			$	367,100

• The Company paid a quarterly cash dividend in the first quarter of $0.1375 per share on March 3, 2023 to shareholders of record February 10, 2023.
  
  

Balance Sheet Results

Eagle's total assets increased 32.9% to $1.98 billion at March 31, 2023, compared to $1.49 billion a year ago, and increased 1.7% from $1.95 billion three months earlier. The year over year increase was impacted by the First Community acquisition that closed during the second quarter of 2022.

The investment securities portfolio totaled $349.4 million at March 31, 2023, compared to $264.6 million a year ago, and $349.5 million at December 31, 2022.

Eagle originated $69.6 million in new residential mortgages during the quarter and sold $62.4 million in residential mortgages, with an average gross margin on sale of mortgage loans of approximately 3.53%. This production compares to residential mortgage originations of $95.3 million in the preceding quarter with sales of $107.1 million and an average gross margin on sale of mortgage loans of approximately 2.77%.

Total loans increased $418.7 million or 43.7% compared to a year ago, and $23.7 million or 1.8% from three months earlier. Commercial real estate loans increased 26.0% to $545.6 million at March 31, 2023, compared to $433.0 million a year earlier. Agricultural and farmland loans increased 110.3% to $231.8 million at March 31, 2023, compared to $110.2 million a year earlier. Commercial construction and development loans increased 57.4% to $166.5 million, compared to $105.8 million a year ago. Residential mortgage loans increased 36.8% to $135.7 million, compared to $99.2 million a year earlier. Commercial loans increased 33.2% to $131.2 million, compared to $98.5 million a year ago. Home equity loans increased 45.3% to $78.2 million, residential construction loans increased 49.7% to $61.3 million, and consumer loans increased 53.0% to $28.8 million, compared to a year ago.

Total deposits increased 26.5% to $1.61 billion at March 31, 2023, compared to $1.27 billion at March 31, 2022, and decreased slightly by 1.7% from $1.64 billion at December 31, 2022. Noninterest-bearing checking accounts represented 28.6%, interest-bearing checking accounts represented 14.8%, savings accounts represented 16.1%, money market accounts comprised 20.8% and time certificates of deposit made up 19.7% of the total deposit portfolio at March 31, 2023. The average cost of deposits was 0.62% in the first quarter of 2023, compared to 0.40% in the preceding quarter and 0.10% in the first quarter of 2022.

Shareholders' equity was $164.1 million at March 31, 2023, compared to $143.5 million a year earlier and $158.4 million three months earlier. Book value per share was $20.50 at March 31, 2023, compared to $21.44 a year earlier and $19.79 three months earlier. Tangible book value per share, a non-GAAP financial measure calculated by dividing shareholders' equity, less goodwill and core deposit intangible, by common shares outstanding, was $15.28 at March 31, 2023, compared to $18.08 a year earlier and $14.52 three months earlier.  

Operating Results

"NIM expanded 22 basis points during the first quarter of 2023, compared to the first quarter a year ago, as we benefitted from interest rate increases enacted by the Federal Reserve which resulted in higher loan yields. However, higher funding costs led to a 24 basis point reduction in first quarter NIM compared to the preceding quarter," said Clark.

Eagle's NIM was 3.86% in the first quarter of 2023, compared to 4.10% in the preceding quarter, and 3.64% in the first quarter a year ago. The interest accretion on acquired loans totaled $354,000 and resulted in a eight basis-point increase in the NIM during the first quarter of 2023, compared to $267,000 and a six basis-point increase in the NIM during the preceding quarter. Average yields on interest earning assets for the first quarter increased to 4.87% from 4.72% in the fourth quarter of 2022 and 3.92% in the first quarter a year ago.

Eagle's first quarter revenues decreased 7.9% to $21.1 million, compared to $22.9 million in the preceding quarter and increased 8.5% compared to $19.5 million in the first quarter a year ago.

Net interest income, before the provision for credit losses, decreased 6.7% to $16.4 million in the first quarter, compared to $17.6 million in the fourth quarter of 2022, and increased 38.7% compared to $11.8 million in the first quarter of 2022.

Eagle's total noninterest income decreased 11.9% to $4.7 million in the first quarter of 2023, compared to $5.3 million in the preceding quarter, and decreased 38.6% compared to $7.6 million in the first quarter a year ago. Net mortgage banking, the largest component of noninterest income, totaled $3.1 million in the first quarter of 2023, compared to $3.3 million in the preceding quarter and $6.2 million in the first quarter a year ago.

First quarter noninterest expense decreased 8.9% to $16.5 million, compared to $18.2 million in the preceding quarter and increased 1.7% compared to $16.3 million in the first quarter a year ago.

For the first quarter of 2023, the income tax provision totaled $1.0 million, for an effective tax rate of 24.4%, compared to $787,000 for an effective tax rate of 17.8% in the preceding quarter, and $695,000, for an effective tax rate of 23.9% in the first quarter of 2022.

Credit Quality

Beginning January 1, 2023, the Company adopted Accounting Standards Update No. 2016-13, Financial Instruments – Credit Losses (Topic 326), which replaced the former "incurred loss" model for recognizing credit losses with an "expected loss" model referred to as the CECL model. Utilizing CECL may have an impact on our allowance for credit losses going forward and may result in a lack of comparability between 2023 and 2022 quarterly periods.

The provision for credit losses was $279,000 in the first quarter of 2023, compared to $347,000 in the preceding quarter and $279,000 in the first quarter a year ago. The allowance for credit losses represented 134.5% of nonperforming loans at March 31, 2023, compared to 180.0% three months earlier and 202.9% a year earlier. Nonperforming loans were $11.2 million at March 31, 2023, $7.8 million at December 31, 2022, and $6.3 million a year earlier.  

Eagle had no other real estate owned and other repossessed assets on its books at March 31, 2023, or at December 31, 2022. This compared to $346,000 at March 31, 2022.

Net loan recoveries totaled $21,000 in the first quarter of 2023, compared to net loan charge-offs of $197,000 in the preceding quarter and net loan charge-offs of $79,000 in the first quarter a year ago. The allowance for credit losses was $15.0 million, or 1.09% of total loans, at March 31, 2023, compared to $14.0 million, or 1.03% of total loans, at December 31, 2022, and $12.7 million, or 1.32% 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 to 6.30% at March 31, 2023 from 8.24% a year ago and increased from 6.10% three months earlier. Shareholders' equity has been impacted by an accumulated other comprehensive loss related to securities available-for-sale. These unrealized losses are primarily a result of rapid increases in interest rates. As of March 31, 2023, the Bank's regulatory capital was in excess of all applicable regulatory requirements and is deemed well capitalized. The Bank's Tier 1 capital to adjusted total average assets was 9.93% as of March 31, 2023.

Stock Repurchase Authority

Eagle announced that its Board of Directors has authorized the repurchase of up to 400,000 shares of its common stock beginning May 1, 2023, representing approximately 5.0% of outstanding shares. Under the plan, shares may be purchased by the company on the open market or in privately negotiated transactions. The extent to which the Company repurchases its shares and the timing of such repurchase will depend upon market conditions and other corporate considerations. The plan is expected to be in place for approximately 12 months, but may be suspended, terminated or modified by the Company's Board of Directors at any time. The plan does not obligate the Company to purchase any particular number of shares.

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; the impact of adverse developments affecting the U.S. banking industry, including bank failures and liquidity concerns, which could cause continued or worsening economic and market volatility, and regulatory responses thereto; 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. 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; 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 that lead to impairment in the value of our investment securities and goodwill; other economic, governmental, competitive, regulatory and technological factors that may affect our operations; our ability to implement new technologies and maintain secure and reliable technology systems; cyber incidents, or theft or loss of Company or customer data or money; our ability to appropriately address social, environmental, and sustainability concerns that may arise from our business activities; 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 related taxes and 5) return on average assets, excluding acquisition costs and related taxes. The Company uses these non-GAAP financial measures to provide meaningful supplemental information regarding the Company's operational performance and performance trends, 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. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. 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)
				March 31,			December 31,			March, 31
					2023			2022			2022
Assets:
	Cash and due from banks			$	18,087		$	19,321		$	17,516
	Interest bearing deposits in banks				1,348			2,490			62,697
	Federal funds sold				-			-			14,889
		Total cash and cash equivalents			19,435			21,811			95,102
	Securities available-for-sale				349,423			349,495			264,635
	Federal Home Loan Bank ("FHLB") stock				7,360			5,089			1,723
	Federal Reserve Bank ("FRB") stock				4,131			4,131			2,974
	Mortgage loans held-for-sale, at fair value				9,927			8,250			22,295
	Loans:
	Real estate loans:
	Residential 1-4 family				135,714			135,947			99,242
	Residential 1-4 family construction				61,333			59,756			40,968
	Commercial real estate				545,631			539,070			432,976
	Commercial construction and development				166,461			151,145			105,754
	Farmland				139,283			136,334			60,363
	Other loans:
	Home equity				78,209			74,271			53,828
	Consumer				28,812			27,609			18,834
	Commercial				131,179			127,255			98,471
	Agricultural				92,471			104,036			49,836
	Unearned loan fees				(1,670	)		(1,745	)		(1,591	)
		Total loans			1,377,423			1,353,678			958,681
	Allowance for credit losses (1)				(15,000	)		(14,000	)		(12,700	)
		Net loans			1,362,423			1,339,678			945,981
	Accrued interest and dividends receivable				10,427			11,284			5,750
	Mortgage servicing rights, net				15,875			15,412			14,288
	Assets held-for-sale, at fair value				1,305			1,305			-
	Premises and equipment, net				86,614			84,323			69,536
	Cash surrender value of life insurance, net				47,985			47,724			36,681
	Goodwill				34,740			34,740			20,798
	Core deposit intangible, net				7,043			7,459			1,660
	Other assets				25,648			17,683			10,630
		Total assets		$	1,982,336		$	1,948,384		$	1,492,053
Liabilities:
	Deposit accounts:
	Noninterest bearing				460,195			468,955			371,818
	Interest bearing				1,147,343			1,166,317			898,758
		Total deposits			1,607,538			1,635,272			1,270,576
	Accrued expenses and other liabilities				29,265			26,458			18,968
	FHLB advances and other borrowings				122,530			69,394			-
	Other long-term debt, net				58,887			58,844			58,986
		Total liabilities			1,818,220			1,789,968			1,348,530
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, 8,507,429 and 7,110,833 shares issued; 8,006,033,
	8,006,033 and 6,694,811 shares outstanding at March 31, 2023,
	December 31, 2022 and March 31, 2022, respectively				85			85			71
	Additional paid-in capital				109,265			109,164			80,960
	Unallocated common stock held by Employee Stock Ownership Plan				(5,013	)		(5,156	)		(5,586	)
	Treasury stock, at cost (501,396, 501,396 and 416,022 shares at
	March 31, 2023, December 31, 2022 and March 31, 2022, respectively)				(11,343	)		(11,343	)		(9,592	)
	Retained earnings				93,647			92,023			86,750
	Accumulated other comprehensive loss, net of tax				(22,525	)		(26,357	)		(9,080	)
		Total shareholders' equity			164,116			158,416			143,523
		Total liabilities and shareholders' equity		$	1,982,336		$	1,948,384		$	1,492,053
(1) Allowance for credit losses on loans at March 31, 2023; allowance for loan losses for prior periods.

Income Statement				(Unaudited)
(Dollars in thousands, except per share data)				Three Months Ended
				March 31,			December 31,			March 31,
					2023			2022			2022
Interest and dividend income:
	Interest and fees on loans			$	17,737		$	17,420		$	11,373
	Securities available-for-sale				2,843			2,716			1,297
	FRB and FHLB dividends				107			142			59
	Other interest income				21			22			39
		Total interest and dividend income			20,708			20,300			12,768
Interest expense:
	Interest expense on deposits				2,460			1,673			312
	FHLB advances and other borrowings				1,142			357			6
	Other long-term debt				678			657			605
		Total interest expense			4,280			2,687			923
Net interest income					16,428			17,613			11,845
Provision for credit losses (1)					279			347			279
		Net interest income after provision for credit losses			16,149			17,266			11,566
Noninterest income:
	Service charges on deposit accounts				339			445			331
	Mortgage banking, net				3,050			3,306			6,245
	Interchange and ATM fees				577			707			453
	Appreciation in cash surrender value of life insurance				280			287			207
	Net loss on sale of available-for-sale securities				(224	)		-			-
	Other noninterest income				649			555			372
		Total noninterest income			4,671			5,300			7,608
Noninterest expense:
	Salaries and employee benefits				9,693			11,010			10,381
	Occupancy and equipment expense				2,073			2,160			1,678
	Data processing				1,212			1,367			1,251
	Advertising				281			367			285
	Amortization				418			439			122
	Loan costs				445			412			546
	FDIC insurance premiums				168			229			93
	Professional and examination fees				484			371			322
	Acquisition costs				-			-			317
	Other noninterest expense				1,759			1,802			1,268
		Total noninterest expense			16,533			18,157			16,263
Income before provision for income taxes					4,287			4,409			2,911
Provision for income taxes					1,045			787			695
Net income				$	3,242		$	3,622		$	2,216
Basic earnings per share				$	0.42		$	0.47		$	0.34
Diluted earnings per share				$	0.42		$	0.47		$	0.34
Basic weighted average shares outstanding					7,790,188			7,776,145			6,506,133
Diluted weighted average shares outstanding					7,792,467			7,777,552			6,518,847
(1) Provision for credit losses on loans for the quarter ended March 31, 2023; provision for loan losses for prior periods.

ADDITIONAL FINANCIAL INFORMATION						(Unaudited)
(Dollars in thousands, except per share data)			Three Months Ended
			March 31,			December 31,			March 31,
				2023			2022			2022
Mortgage Banking Activity (For the quarter):
	Net gain on sale of mortgage loans		$	2,203		$	2,965		$	6,233
	Net change in fair value of loans held-for-sale and derivatives			(19	)		(509	)		(535	)
	Mortgage servicing income, net			866			850			547
		Mortgage banking, net	$	3,050		$	3,306		$	6,245
Performance Ratios (For the quarter):
	Return on average assets			0.67	%		0.75	%		0.60	%
	Return on average equity			7.99	%		9.38	%		5.79	%
	Yield on average interest earning assets			4.87	%		4.72	%		3.92	%
	Cost of funds			1.33	%		0.85	%		0.40	%
	Net interest margin			3.86	%		4.10	%		3.64	%
	Core efficiency ratio*			76.38	%		77.33	%		81.34	%
* 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.
ADDITIONAL FINANCIAL INFORMATION
(Dollars in thousands, except per share data)
						(Unaudited)
Asset Quality Ratios and Data:			As of or for the Three Months Ended
			March 31,			December 31,			March 31,
				2023			2022			2022
	Nonaccrual loans		$	4,865		$	2,200		$	3,379
	Loans 90 days past due and still accruing			1,247			1,076			270
	Restructured loans, net			5,041			4,502			2,611
		Total nonperforming loans		11,153			7,778			6,260
	Other real estate owned and other repossessed assets			-			-			346
		Total nonperforming assets	$	11,153		$	7,778		$	6,606
	Nonperforming loans / portfolio loans			0.81	%		0.57	%		0.65	%
	Nonperforming assets / assets			0.56	%		0.40	%		0.44	%
	Allowance for credit losses / portfolio loans			1.09	%		1.03	%		1.32	%
	Allowance for credit losses/ nonperforming loans			134.49	%		179.99	%		202.88	%
	Gross loan charge-offs for the quarter		$	1		$	216		$	92
	Gross loan recoveries for the quarter		$	22		$	19		$	13
	Net loan (recoveries) charge-offs for the quarter		$	(21	)	$	197		$	79
			March 31,			December 31,			March 31,
				2023			2022			2022
Capital Data (At quarter end):
	Common shareholders' equity (book value) per share		$	20.50		$	19.79		$	21.44
	Tangible book value per share**		$	15.28		$	14.52		$	18.08
	Shares outstanding			8,006,033			8,006,033			6,694,811
	Tangible common equity to tangible assets***			6.30	%		6.10	%		8.24	%
Other Information:
	Average investment securities for the quarter		$	345,033		$	348,267		$	273,004
	Average investment securities year-to-date		$	345,033		$	336,779		$	273,004
	Average loans for the quarter ****		$	1,366,766		$	1,345,776		$	974,177
	Average loans year-to-date ****		$	1,366,766		$	1,194,788		$	974,177
	Average earning assets for the quarter		$	1,724,802		$	1,705,349		$	1,319,999
	Average earning assets year-to-date		$	1,724,802		$	1,572,106		$	1,319,999
	Average total assets for the quarter		$	1,947,086		$	1,934,002		$	1,475,049
	Average total assets year-to-date		$	1,947,086		$	1,768,919		$	1,475,049
	Average deposits for the quarter		$	1,605,566		$	1,655,298		$	1,237,341
	Average deposits year-to-date		$	1,605,566		$	1,514,158		$	1,237,341
	Average equity for the quarter		$	162,290		$	154,409		$	153,203
	Average equity year-to-date		$	162,290		$	155,655		$	153,203
** 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)
(Dollars in thousands)					Three Months Ended
					March 31,			December 31,			March 31,
						2023			2022			2022
Calculation of Core Efficiency Ratio:
	Noninterest expense				$	16,533		$	18,157		$	16,263
	Acquisition costs					-			-			(317	)
	Intangible asset amortization					(418	)		(439	)		(122	)
		Core efficiency ratio numerator				16,115			17,718			15,824
	Net interest income					16,428			17,613			11,845
	Noninterest income					4,671			5,300			7,608
		Core efficiency ratio denominator				21,099			22,913			19,453
	Core efficiency ratio (non-GAAP)					76.38	%		77.33	%		81.34	%

Tangible Book Value and Tangible Assets				(Unaudited)
(Dollars in thousands, except per share data)				March 31,			December 31,			March 31,
					2023			2022			2022
Tangible Book Value:
	Shareholders' equity			$	164,116		$	158,416		$	143,523
	Goodwill and core deposit intangible, net				(41,783	)		(42,199	)		(22,458	)
		Tangible common shareholders' equity (non-GAAP)		$	122,333		$	116,217		$	121,065
	Common shares outstanding at end of period				8,006,033			8,006,033			6,694,811
	Common shareholders' equity (book value) per share (GAAP)			$	20.50		$	19.79		$	21.44
	Tangible common shareholders' equity (tangible book value)
		per share (non-GAAP)		$	15.28		$	14.52		$	18.08
Tangible Assets:
	Total assets			$	1,982,336		$	1,948,384		$	1,492,053
	Goodwill and core deposit intangible, net				(41,783	)		(42,199	)		(22,458	)
		Tangible assets (non-GAAP)		$	1,940,553		$	1,906,185		$	1,469,595
	Tangible common shareholders' equity to tangible assets
		(non-GAAP)			6.30	%		6.10	%		8.24	%

Earnings Per Diluted Share, Excluding Acquisition Costs and Related Taxes			(Unaudited)
(Dollars in thousands, except per share data)			Three Months Ended
			March 31,			December 31,			March 31,
				2023			2022			2022
Net interest income after provision for credit losses			$	16,149		$	17,266		$	11,566
Noninterest income				4,671			5,300			7,608
Noninterest expense				16,533			18,157			16,263
	Acquisition costs			-			-			(317	)
Noninterest expense, excluding acquisition costs (non-GAAP)				16,533			18,157			15,946
Income before income taxes, excluding acquisition costs				4,287			4,409			3,228
Provision for income taxes, excluding acquisition costs
	related taxes (non-GAAP)			1,045			787			771
Net Income, excluding acquisition costs and related taxes (non-GAAP)			$	3,242		$	3,622		$	2,457
Diluted earnings per share (GAAP)			$	0.42		$	0.47		$	0.34
Diluted earnings per share, excluding acquisition costs and related
	taxes (non-GAAP)		$	0.42		$	0.47		$	0.38

Return on Average Assets, Excluding Acquisition Costs and Related Taxes			(Unaudited)
(Dollars in thousands)			March 31,			December 31,			March 31,
				2023			2022			2022
For the quarter:
	Net income, excluding acquisition costs and related taxes (non-GAAP)*		$	3,242		$	3,622		$	2,457
	Average total assets quarter-to-date		$	1,947,086		$	1,934,002		$	1,475,049
	Return on average assets, excluding acquisition costs and related taxes (non-GAAP)			0.67	%		0.75	%		0.67	%
Year-to-date:
	Net income, excluding acquisition costs and related taxes (non-GAAP)*		$	3,242		$	12,475		$	2,457
	Average total assets year-to-date		$	1,947,086		$	1,768,919		$	1,475,049
	Return on average assets, excluding acquisition costs and related taxes (non-GAAP)			0.67	%		0.71	%		0.67	%
* See Earnings Per Diluted Share, Excluding Acquisition Costs and Related Taxes table for GAAP to non-GAAP reconciliation.

Contacts:         

Laura F. Clark, President and CEO

(406) 457-4007

Miranda J. Spaulding, SVP and CFO

(406) 441-5010