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Eagle Bancorp Montana Earns $1.4 Million in 4Q18 and $5.0 Million in 2018; Declares Regular Quarterly Cash Dividend to $0.0925 per Share

HELENA, Mont., Jan. 29, 2019 (GLOBE NEWSWIRE) -- Eagle Bancorp Montana, Inc. (EBMT), (the “Company,” “Eagle”), the holding company of Opportunity Bank of Montana, today reported net income was $1.4 million, or $0.26 per diluted share, in the fourth quarter of 2018 compared to $1.6 million, or $0.30 per diluted share, in the third quarter of 2018.  In the fourth quarter of 2017, following a writedown of its deferred tax asset, as a result of the Tax Cuts and Job Act, which resulted in an additional tax expense of $715,000, or $0.15 per diluted share, net income was $553,000, or $0.11 per diluted share.  There was $582,000 in acquisition-related expenses in the fourth quarter of 2018, compared to $222,000 in the preceding quarter and $400,000 in the fourth quarter a year ago.

For the full year 2018, net income increased to $5.0 million, or $0.91 per diluted share, compared to $4.1 million, or $0.99 per diluted share, in 2017.  There were $1.2 million in acquisition-related costs in 2018, compared to $676,000 in 2017.

Additionally, Eagle’s board of directors declared a regular quarterly cash dividend of $0.0925 per share.  The dividend will be payable March 1, 2019 to shareholders of record February 8, 2019.  The current annualized yield is 2.15% based on recent market prices.

“Our 2018 results were highlighted by strong net interest income, robust balance sheet expansion and the successful integration of our Ruby Valley Bank acquisition, which is providing a great opportunity for revenue growth,” said Peter J. Johnson, President and CEO.  “Additionally, we completed our acquisition of Big Muddy Bancorp earlier this month.  This transaction further solidifies us as the fourth-largest, Montana-based bank and provides us a unique opportunity to expand our market presence and lending activities. While costs associated with the acquisition integration will be higher than normal over the next few quarters, we expect expenses to return to more normalized levels in the second half of 2019 and expect the merger to be immediately accretive to earnings per share.”

On January 1, 2019, Eagle completed its previously announced acquisition of Big Muddy Bancorp, Inc. and its wholly owned subsidiary, The State Bank of Townsend, located in Townsend, Montana, in a transaction valued at $16.4 million.  Eagle acquired four State Bank of Townsend retail bank branches and approximately $108 million in assets, $92 million in deposits and $92 million in gross loans based on Big Muddy Bancorp’s September 30, 2018, financial statements. 

The Ruby Valley Bank acquisition, which was completed during the first quarter of 2018, added approximately $94 million in assets, $82 million in deposits and $55 million in gross loans.

Fourth Quarter 2018 Highlights (at or for the three-month period ended December 31, 2018, except where noted)

  • Net income was $1.4 million, or $0.26 per diluted share.
  • Purchase discount on loans from the Ruby Valley Bank portfolio was $1.8 million at January 31, 2018, (the “acquisition date”) of which $1.2 million remains as of December 31, 2018.
  • The accretion of the loan purchase discount into loan interest income from the Ruby Valley Bank transaction was $64,000 in the fourth quarter, compared to $100,000 in the preceding quarter.
  • Net interest margin was 3.95% in the fourth quarter, which was unchanged compared to the preceding quarter and a 20-basis point improvement compared to 3.75% in the fourth quarter a year ago.
  • Revenues (net interest income before the provision for loan losses, plus non-interest income) increased 16.3% to $11.4 million, compared to $9.8 million in the fourth quarter a year ago.
  • Total loans increased 20.2% to $616.9 million at December 31, 2018, compared to $513.2 million a year.
  • Commercial real estate loans increased 31.8% to $256.8 million at December 31, 2018, compared to $194.8 million a year earlier. 
  • Total deposits increased 20.4% to $626.6 million at December 31, 2018, compared to $520.6 million a year ago.
  • Capital ratios remain well capitalized with a tangible common shareholders’ equity ratio of 9.66% at December 31, 2018.
  • Declared quarterly cash dividend of $0.0925 per share.
  • Excluding tax effected acquisition costs, non-GAAP earnings per diluted share were $0.36 for the fourth quarter and $1.09 for 2018.

Balance Sheet Results

“While a majority of the year-over-year loan growth is due to the successful integration of our Ruby Valley Bank acquisition, organic loan production remains strong, increasing $20.3 million, or 3.4% during the fourth quarter,” said Johnson.  Total loans increased 20.2% to $616.9 million at December 31, 2018, compared to $513.2 million a year earlier and increased 3.4% compared to $596.6 million three months earlier.

Eagle originated $79.4 million in new residential mortgages during the quarter, excluding construction loans, and sold $74.7 million in residential mortgages, with an average gross margin on sale of mortgage loans of approximately 3.1%.  This production compares to residential mortgage originations of $86.6 million in the preceding quarter with sales of $83.5 million.

Commercial real estate loans increased 31.8% to $256.8 million at December 31, 2018, compared to $194.8 million a year earlier.  Residential mortgage loans increased 6.4% to $116.9 million, compared to $109.9 million a year earlier.  Commercial loans decreased 6.7% to 59.1 million, home equity loans decreased 1.0% to $52.2 million, construction and development loans increased 8.8% to $41.7 million, and residential construction loans increased 7.4% to $27.2 million compared to a year ago.  Agricultural and farmland loans increased 235.6% to $47.6 million at December 31, 2018, compared to $14.2 million a year earlier.

Total deposits were $626.6 million at December 31, 2018, a modest increase compared to $621.3 million at September 30, 2018, and a 20.4% increase compared to $520.6 million a year ago.  Checking and money market accounts represent 56.8%, savings accounts represent 17.3%, and CDs comprise 25.9% of the total deposit portfolio at December 31, 2018.

Eagle’s total assets increased 19.1% to $853.9 million at December 31, 2018, compared to $716.8 million a year ago, in large part due to the Ruby Valley Bank acquisition.  At September 30, 2018, total assets were $840.0 million.  Shareholders’ equity increased 3.1% to $94.8 million at December 31, 2018, compared to $92.0 million three months earlier and increased 13.4% compared to $83.6 million one year earlier.  Tangible book value was $14.82 per share at December 31, 2018, compared to $14.33 per share at September 30, 2018, and $15.22 per share a year earlier. 

Operating Results

“Our net interest margin remained unchanged compared to the preceding quarter, as rising loan yields were partially offset by higher rates on borrowed funds,” said Johnson.  “Additionally, the interest accretion on purchased loans totaled $64,000 and resulted in a three basis point increase in the NIM during the fourth quarter, compared to $100,000 and a five basis point increase in the NIM during the preceding quarter.”  Eagle’s net interest margin was 3.95% in the fourth quarter, the same as in the preceding quarter, and a 20-basis point improvement compared to 3.75% in the fourth quarter a year ago.  For the year, Eagle’s net interest margin was 3.96%, with eight basis points attributed to interest accretion on purchased loans, compared to 3.71% in 2017.  The investment securities portfolio increased to $142.2 million at December 31, 2018, compared to $132.0 million a year ago, which was offset with higher loan volume resulting in increased average yields on earning assets to 4.64% from 4.35% a year ago.

Eagle’s fourth quarter revenues increased modestly to $11.4 million, compared to $11.2 million in the preceding quarter and increased 16.3% when compared to $9.8 million in the fourth quarter a year ago.  For the year, revenues increased 13.0% to $43.1 million, compared to $38.1 million in 2017.  Net interest income before the provision for loan loss increased modestly to $7.6 million in the fourth quarter compared to $7.5 million in the preceding quarter and increased 21.8% compared to $6.2 million in the fourth quarter a year ago.  For the full year 2018, net interest income increased 25.1% to $29.7 million, compared to $23.8 million in 2017.

Noninterest income was $3.8 million in the fourth quarter, the same as in the preceding quarter, and increased 6.6% compared to $3.6 million in the fourth quarter a year ago.  For the year, noninterest income was $13.3 million, compared to $14.3 million in 2017.  The net gain on sale of mortgage loans totaled $2.3 million in both the fourth quarter and the preceding quarter.  The net gain on sale of mortgage loans was $2.1 million in the fourth quarter a year ago.

Eagle’s fourth quarter noninterest expenses were $9.6 million compared to $9.1 million in the preceding quarter and $8.0 million in the fourth quarter a year ago.  Acquisition costs totaled $582,000 for the current quarter, compared to $222,000 for the preceding quarter and $400,000 in the fourth quarter one year ago.  For the year, noninterest expenses totaled $36.2 million, compared to $30.6 million in 2017. Acquisition costs totaled $1.2 million in 2018, compared to $676,000 in 2017.

For the full year 2018, income tax expense totaled $914,000, for an effective tax rate of 15.5%, compared to $2.1 million in 2017 which reflected a one-time increase in tax expense related to the 2017 Tax Cuts and Job Act.  For the fourth quarter of 2018, Eagle recorded $134,000 in income tax expense.

Credit Quality

“Our asset quality has remained very stable, with a gradual increase in our reserves,” noted Johnson.  The allowance for loan losses represented 175.2% of nonaccrual loans at December 31, 2018, compared to 370.9% three months earlier and 588.5% a year earlier.  The fourth quarter provision for loan losses was $260,000, compared to $194,000 in the preceding quarter and $294,000 in the fourth quarter a year ago. 

Total OREO and other repossessed assets improved to $107,000 at December 31, 2018, compared to $457,000 at September 30, 2018 and $525,000 at December 31, 2017.  Nonperforming assets (NPAs), consisting of nonaccrual loans, OREO and other repossessed assets, loans delinquent 90 days or more, and restructured loans, were $3.9 million at December 31, 2018, or 0.45% of total assets, compared to $2.2 million, or 0.26% of total assets three months earlier and $1.5 million, or 0.21% of total assets a year earlier. 

Nonperforming loans (NPLs) were $3.8 million at December 31, 2018, compared to $1.7 million at September 30, 2018, and $977,000 a year earlier. 

Eagle had net loan charge-offs of $11,000 in the fourth quarter of 2018.  This compares to net recoveries of $6,000 in the third quarter of 2018 and net charge-offs of $44,000 in the fourth quarter a year ago.  The allowance for loan losses was $6.6 million, or 1.07% of total loans at December 31, 2018, compared to $6.4 million, or 1.06% of total loans at September 30, 2018 and $5.8 million, or 1.12% of total loans a year ago.

Capital Management

Eagle Bancorp Montana continues to be well capitalized with the ratio of tangible common shareholders’ equity to tangible assets of 9.66% at December 31, 2018.  (Shareholders’ equity, less goodwill and core deposit intangible to tangible assets).

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 21 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 with Ruby Valley Bank and The State Bank of Townsend, 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 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; competition among depository and other financial institutions; loan demand or residential and commercial real estate values 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 and any litigation which we inherited from our January 2019 merger with The State Bank of Townsend); 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 acquisitions of Ruby Valley Bank and The State Bank of Townsend, including the failure to achieve expected revenue growth and/or expense savings, the failure to effectively integrate their operations 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.

Balance Sheet              
(Dollars in thousands, except per share data)     (Unaudited) (Unaudited) (Audited)
            December 31, September 30, December 31,
              2018     2018     2017  
                 
Assets:              
  Cash and due from banks       $   10,144   $   7,889   $   5,517  
  Interest bearing deposits in banks           1,057       1,079       1,920  
    Total cash and cash equivalents       11,201       8,968       7,437  
  Securities available-for-sale, at market value         142,165       148,935       132,044  
  FHLB stock             5,011       4,617       4,086  
  FRB stock             2,033       2,033       1,465  
  Investment in Eagle Bancorp Statutory Trust I         155       155       155  
  Loans held-for-sale             7,318       8,747       8,949  
  Loans:              
    Real estate loans:              
    Residential 1-4 family           116,939       115,217       109,911  
    Residential 1-4 family construction         27,168       29,755       25,306  
    Commercial real estate           256,784       236,900       194,805  
    Commercial construction and development         41,739       36,339       38,351  
    Farmland             29,915       30,421       11,627  
    Other loans:              
    Home equity             52,159       53,342       52,672  
    Consumer             16,565       16,491       15,712  
    Commercial             59,053       60,407       63,300  
    Agricultural             17,709       18,849       2,563  
    Unearned loan fees           (1,098 )     (1,081 )     (1,093 )
    Total loans           616,933       596,640       513,154  
  Allowance for loan losses           (6,600 )     (6,350 )     (5,750 )
    Net loans           610,333       590,290       507,404  
  Accrued interest and dividends receivable         3,479       3,890       2,555  
  Mortgage servicing rights, net           7,100       6,947       6,578  
  Premises and equipment, net           29,343       28,600       21,958  
  Cash surrender value of life insurance         20,545       20,405       14,481  
  Real estate and other repossessed assets acquired in         
  settlement of loans, net           107       457       525  
  Goodwill             12,124       12,124       7,034  
  Core deposit intangible           1,498       1,599       273  
  Deferred tax asset, net           1,190       2,100       1,360  
  Other assets             301       100       478  
    Total assets       $   853,903   $   839,967   $   716,782  
                 
Liabilities:              
  Deposit accounts:              
  Noninterest bearing             142,788       142,351       99,799  
  Interest bearing             483,823       478,951       420,765  
    Total deposits         626,611       621,302       520,564  
  Accrued expense and other liabilities         5,388       6,082       4,822  
  FHLB advances and other borrowings         102,222       95,731       82,969  
  Other long-term debt, net           24,876       24,860       24,811  
    Total liabilities         759,097       747,975       633,166  
                 
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; 8,000,000 shares authorized;       
  5,718,942, 5,718,942  and 5,272,168 shares issued; 5,477,652,       
  5,460,452 and 5,013,678 shares outstanding at December 31, 2018,      
  September 30, 2018 and December 31, 2017, respectively)     57       57       53  
  Additional paid-in capital           52,051       51,927       42,780  
  Unallocated common stock held by Employee Stock Ownership Plan     (477 )     (518 )     (643 )
  Treasury stock, at cost (241,290, 258,490 and 258,490 shares at December      
  31, 2018, September 30, 2018 and December 31, 2017, respectively)     (2,640 )     (2,826 )     (2,826 )
  Retained earnings             46,926       45,989       43,939  
  Accumulated other comprehensive (loss) income       (1,111 )     (2,637 )     313  
    Total shareholders' equity        94,806       91,992       83,616  
    Total liabilities and shareholders' equity   $   853,903   $   839,967   $   716,782  
                 


Income Statement       (Unaudited)     (Audited)
(Dollars in thousands, except per share data)     Three Months Ended   Years Ended
              December 31, September 30, December 31,   December 31,
                2018     2018     2017       2018     2017  
Interest and dividend income:                
  Interest and fees on loans     $   7,965   $   7,701   $   6,554     $   30,400   $   24,776  
  Securities available-for-sale         1,022       1,036       762         4,068       2,898  
  FRB and FHLB dividends         89       80       46         322       170  
  Interest on deposits in banks         3       5       4         43       7  
  Other interest income         -       3       1         4       5  
    Total interest and dividend income         9,079       8,825       7,367         34,837       27,856  
Interest expense:                  
  Interest expense on deposits         602       534       411         2,056       1,553  
  FHLB advances and other borrowings         509       453       361         1,614       1,217  
  Other long-term debt         361       361       351         1,426       1,320  
    Total interest expense         1,472       1,348       1,123         5,096       4,090  
Net interest income           7,607       7,477       6,244         29,741       23,766  
Loan loss provision       260       194       294         980       1,228  
  Net interest income after loan loss provision       7,347       7,283       5,950         28,761       22,538  
             
Noninterest income:              
  Service charges on deposit accounts       262       241       233         943       954  
  Net gain on sale of loans       2,294       2,290       2,141         7,743       8,803  
  Mortgage loan servicing fees       597       575       546         2,295       2,127  
  Wealth management income         127       130       161         536       624  
  Interchange and ATM fees         276       270       208         1,042       856  
  Appreciation in cash surrender value of life insurance       173       166       125         609       500  
  Net (loss) gain on sale of available-for-sale securities       (74 )     (23 )     51         (187 )     37  
  Net gain (loss) on sale of real estate owned and other repossessed property     3       -       (4 )       (54 )     (29 )
  Other noninterest income       143       112       104         398       459  
  Total noninterest income       3,801       3,761       3,565         13,325       14,331  
             
Noninterest expense:              
  Salaries and employee benefits        5,406       5,123       4,530         20,899       17,880  
  Occupancy and equipment expense       812       880       665         3,355       2,734  
  Data processing       666       866       567         2,842       2,263  
  Advertising       287       295       253         1,158       966  
  Amortization of mortgage servicing fees       297       296       274         1,203       1,086  
  Amortization of core deposit intangible and tax credits       181       182       105         700       426  
  Loan costs       163       154       157         632       622  
  Federal insurance premiums       43       65       86         246       284  
  Postage       56       58       46         248       193  
  Legal, accounting and examination fees       209       121       183         656       575  
  Consulting fees       46       23       58         111       180  
  Acquisition costs       582       222       400         1,169       676  
  Write-down on real estate owned and other repossessed property       28       -        -          28       45  
  Other noninterest expense       794       767       698         2,943       2,708  
  Total noninterest expense       9,570       9,052       8,022         36,190       30,638  
             
Income before income taxes          1,578       1,992       1,493         5,896       6,231  
Income tax expense           134       360       940         914       2,128  
Net income         $   1,444   $   1,632   $   553     $   4,982   $   4,103  
             
Basic earnings per share     $   0.26   $   0.30   $   0.11     $   0.92   $   1.01  
Diluted earnings per share     $   0.26   $   0.30   $   0.11     $   0.91   $   0.99  
Weighted average shares              
  outstanding (basic EPS)       5,471,856       5,460,452       4,854,128         5,426,605       4,074,231  
Weighted average shares              
  outstanding (diluted EPS)       5,533,465       5,524,912       4,912,701         5,490,347       4,132,590  
             


ADDITIONAL FINANCIAL INFORMATION Three Months Ended  
(Dollars in thousands, except per share data) (Unaudited)     December 31, September 30, December 31,  
        2018     2018     2017    
Performance Ratios (For the quarter):        
  Return on average assets   0.68 %   0.79 %   0.31 %  
  Return on average equity   6.19 %   7.04 %   2.72 %  
  Net interest margin***   3.95 %   3.95 %   3.75 %  
  Core efficiency ratio*   77.20 %   76.95 %   76.63 %  
             
Performance Ratios (Year-to-date):        
  Return on average assets   0.60 %   0.57 %   0.59 %  
  Return on average equity   5.44 %   5.19 %   6.20 %  
  Net interest margin***   3.96 %   3.97 %   3.71 %  
  Core efficiency ratio*   79.69 %   80.59 %   77.53 %  
             
Asset Quality Ratios and Data: As of or for the Three Months Ended  
      December 31, September 30, December 31,  
        2018     2018     2017    
             
  Nonaccrual loans   $   2,268   $   1,556   $   977    
  Loans 90 days past due and still accruing     1,477       156       -    
  Restructured loans, net     22       -        -    
    Total nonperforming loans     3,767       1,712       977    
  Other real estate owned and other repossessed assets     107       457       525    
    Total nonperforming assets $   3,874   $   2,169   $   1,502    
             
  Nonperforming loans / portfolio loans   0.61 %   0.29 %   0.19 %  
  Nonperforming assets / assets   0.45 %   0.26 %   0.21 %  
  Allowance for loan losses / portfolio loans   1.07 %   1.06 %   1.12 %  
  Allowance / nonperforming loans   175.21 %   370.91 %   588.54 %  
  Gross loan charge-offs for the quarter $   22   $   14   $   53    
  Gross loan recoveries for the quarter $   11   $   20   $   9    
  Net loan charge-offs for the quarter $   11   $   (6 ) $   44    
             
Capital Data (At quarter end):        
  Tangible book value per share $   14.82   $   14.33   $   15.22    
  Shares outstanding   5,477,652     5,460,452     5,013,678    
  Tangible common equity to tangible assets   9.66 %   9.47 %   10.76 %  
             
Other Information:          
  Average total assets for the quarter $   845,267   $   830,875   $   715,425    
  Average total assets year to date $   829,186   $   823,826   $   696,983    
  Average earning assets for the quarter $   764,095   $   750,684   $   660,442    
  Average earning assets year to date $   750,127   $   745,470   $   641,141    
  Average loans for the quarter ** $   610,412   $   591,441   $   524,057    
  Average loans year to date ** $   590,059   $   583,274   $   507,980    
  Average equity for the quarter $   93,290   $   92,678   $   81,415    
  Average equity year to date $   91,527   $   90,939   $   66,200    
  Average deposits for the quarter $   624,327   $   615,544   $   523,866    
  Average deposits year to date $   617,182   $   614,800   $   518,638    
             
* 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.    
** includes loans held for sale        
*** Based on actual days. Previously calculated on a 360 day basis.        
             

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 our core efficiency ratio and tangible book value per share, which are non-GAAP financial measures.  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. 

Core Efficiency Ratio   (Unaudited)     (Unaudited)  
(Dollars in thousands, except per share data)     Three Months Ended   Years Ended  
          December 31, September 30, December 31,   December 31,  
            2018     2018     2017       2018     2017    
Calculation of Core Efficiency Ratio:              
  Noninterest expense $   9,570   $   9,052   $   8,022     $   36,190   $   30,638    
  Acquisition costs     (582 )     (222 )     (400 )       (1,169 )     (676 )  
  Intangible asset amortization     (181 )     (182 )     (105 )       (700 )     (426 )  
    Core efficiency ratio numerator     8,807       8,648       7,517         34,321       29,536    
                       
  Net interest income     7,607       7,477       6,244         29,741       23,766    
  Noninterest income     3,801       3,761       3,565         13,325       14,331    
    Core efficiency ratio denominator     11,408       11,238       9,809         43,066       38,097    
                       
  Core efficiency ratio    77.20 %   76.95 %   76.63 %     79.69 %   77.53 %  
                       


Tangible Book Value and Tangible Assets   (Unaudited)  
(Dollars in thousands, except per share data)   December 31, September 30, December 31,  
              2018     2018     2017    
Tangible Book Value:              
  Shareholders' equity     $   94,806   $   91,992   $   83,616    
  Goodwill and core deposit intangible, net       (13,622 )     (13,723 )     (7,307 )  
    Tangible common shareholders' equity   $   81,184   $   78,269   $   76,309    
                   
  Common shares outstanding at end of period       5,477,652       5,460,452       5,013,678    
                   
  Common shareholders' equity (book value) per share (GAAP) $   17.31   $   16.85   $   16.68    
                   
  Tangible common shareholders' equity (tangible book value)         
    per share (non-GAAP)     $   14.82   $   14.33   $   15.22    
                   
Tangible Assets:              
  Total assets       $   853,903   $   839,967   $   716,782    
  Goodwill and core deposit intangible, net       (13,622 )     (13,723 )     (7,307 )  
    Tangible assets (non-GAAP)   $   840,281   $   826,244   $   709,475    
                   
  Tangible common shareholders' equity to tangible assets        
    (non-GAAP)         9.66 %   9.47 %   10.76 %  
                   


Earnings Per Diluted Share   (Unaudited)   (Unaudited)  
(Dollars in thousands, except per share data) Three Months Ended   Year Ended  
          December 31,   December 31,  
            2018       2018    
                 
Net interest income after loan loss provision $   7,347     $   28,761    
Noninterest income         3,801         13,325    
                 
Noninterest expense         9,570         36,190    
  Acquisition costs         (582 )       (1,169 )  
Noninterest expense, excluding acquisition costs     8,988         35,021    
                 
Income before income taxes        2,160         7,065    
Income tax expense, excluding acquisition cost        
  related taxes         183         1,095    
Net Income, excluding acquisition costs $   1,977     $   5,970    
                 
Diluted earnings per share (GAAP)   $   0.26     $   0.91    
Diluted EPS, excluding acquisition          
  costs (non-GAAP)     $   0.36     $   1.09    
                 


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