ebmt20250630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____.

Commission file number 1-34682

Eagle Bancorp Montana, Inc.

(Exact name of registrant as specified in its charter)

Delaware	27-1449820
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1400 Prospect Avenue, Helena, MT 59601

(Address of principal executive offices) (Zip code)

(406) 442-3080

(Registrant's telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☒
Non-accelerated filer ☐	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:

Common stock, par value $0.01 per share

7,952,177 shares outstanding

As of July 31, 2025

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

PART I.	FINANCIAL INFORMATION	PAGE

Item 1.	Financial Statements (Unaudited)

	Condensed Consolidated Statements of Financial Condition as of June 30, 2025 and December 31, 2024	1

	Condensed Consolidated Statements of Income for the three and six months ended June 30, 2025 and 2024	3

	Condensed Consolidated Statements of Comprehensive Income for the three and six ended June 30, 2025 and 2024	5

	Condensed Consolidated Statements of Changes in Shareholders' Equity for the three and six months ended June 30, 2025 and 2024	6

	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024	7

	Notes to Condensed Consolidated Financial Statements (Unaudited)	9

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	25

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39

Item 4.	Controls and Procedures	39

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Item 6.	Exhibits	41

Signatures		42

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

Cautionary Note Regarding Forward-Looking Statements

This report includes “forward-looking statements” within the meaning and protections of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as “may,” “will,” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “plan,” “project,” “could,” “intend,” “target” and other similar words and expressions of the future. These forward-looking statements include, but are not limited to:

●	statements of our goals, intentions and expectations;

●	statements regarding our business plans, prospects, growth and operating strategies;

●	statements regarding the asset quality of our loan and investment portfolios; and

●	estimates of our risks and future costs and benefits.

These forward-looking statements are based on current beliefs and expectations of the management of Eagle Bancorp Montana, Inc. (“Eagle” or the “Company”) and Opportunity Bank of Montana (“OBMT” or the “Bank”), Eagle’s wholly-owned subsidiary, and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.

The following factors, among others, could cause the Company’s actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

●

changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees, capital requirements and liquidity requirements;

●

local, regional, national and international economic conditions or macroeconomic instability (including any economic slowdown or recession, inflation, interest rate changes, credit loss trends, unemployment, changes in housing or securities markets, or other factors) and the impact of the same on Eagle and its customers;

	●	volatility, disruption, or uncertainty in national and international financial markets, including as a result of geopolitical developments;
	●	the effects of any U.S. federal government shutdown, closures or significant staff reductions in agencies regulating or otherwise impacting Eagle's business;
	●	the impact of any new regulatory, policy, or enforcement developments resulting from the change in U.S. presidential administration, including the implementation of tariffs and other protectionist trade policies, including any reciprocal tariffs by foreign countries;
	●	competition among depository and other traditional and non-traditional financial service providers;

●

risks related to the concentration of our business in Montana, including risks associated with changes in the prices, values and sales volume of residential and commercial real estate in Montana;

●

inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments or reduces loan demand;

	●	our ability to attract deposits and other sources of funding or liquidity;
	●	possible changes in governmental monetary and fiscal policies, or any leadership changes of those determining such policies;
	●	volatility in Eagle's stock price due to investor sentiment and perception of the banking industry;
	●	the possibility that future credit losses may be higher than currently expected due to changes in economic assumptions, customer behavior, adverse developments with respect to U.S. or global economic conditions and other uncertainties, including the impact of supply chain disruptions, inflationary pressures and labor shortages on economic conditions and our business;
	●	an inability to access capital markets or maintain deposits or borrowing costs;
	●	our ability to assess and monitor the effect of evolving uses of artificial intelligence on our business and operations;
	●	our ability to navigate differing environmental, social, governmental, and sustainability concerns among governmental administrations, our stakeholders, and other activists that may arise from our business activities;

●

changes or volatility in the securities markets that lead to impairment in the value of our investment securities and goodwill;

●

our ability to implement our growth strategy, including identifying and consummating suitable acquisitions, raising additional capital to finance such transactions, entering new markets, possible failures in realizing the anticipated benefits from such acquisitions and an inability of our personnel, systems and infrastructure to keep pace with such growth;

	●	unforeseen events, such as pandemics or natural disasters, and any governmental or societal responses thereto;
	●	the effect of acquisitions we may make, if any, including, without limitation, the failure to achieve expected revenue growth and/or expense savings from such acquisitions;

●

potential impairment on the goodwill we have recorded or may record in connection with business acquisitions;

	●	our ability to enter new markets successfully and capitalize on growth opportunities;
	●	the need to retain capital for strategic or regulatory reasons;
	●	changes in consumer spending, borrowing and savings habits;
	●	our ability to continue to increase and manage our commercial and residential real estate, multi-family and commercial business loans;

	●	our ability to implement new technologies and maintain secure and reliable technology systems;
	●	our ability to develop and maintain secure and reliable information technology systems, effectively defend ourselves against cyberattacks, or recover from breaches to our cybersecurity infrastructure;

●

the failure of assumptions underlying the establishment of allowance for possible loan losses and other estimates;

●

changes in the financial performance and/or condition of our borrowers and their ability to repay their loans when due; and

●

the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Securities and Exchange Commission, the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters.

Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. For a further list and description of various risks, relevant factors and uncertainties that could cause future results or events to differ materially from those expressed or implied in our forward-looking statements, see the Part II, Item 1A, “Risk Factors” and Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections contained elsewhere in this report, as well as our Annual Report on Form 10-K for the year ended December 31, 2024, any subsequent Reports on Form 10-Q and Form 8-K, and other filings with the SEC. We do not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur, or of which we hereafter become aware.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Dollars in Thousands, Except for Per Share Data)

(Unaudited)

	June 30,		December 31,
	2025		2024
ASSETS:
Cash and due from banks	$	25,701	$	29,824
Interest-bearing deposits in banks		1,183		1,735
Federal funds sold		44		-
Total cash and cash equivalents		26,928		31,559

Securities available-for-sale, at fair value (amortized cost of $309,257 at June 30, 2025 and $319,939 at December 31, 2024)		285,023		292,590
Federal Home Loan Bank ("FHLB") stock		7,000		7,778
Federal Reserve Bank ("FRB") stock		4,131		4,131
Mortgage loans held-for-sale, at fair value		13,651		13,368
Loans receivable, net of allowance for credit losses of $17,730 at June 30, 2025 and $16,850 at December 31, 2024		1,551,932		1,503,796
Accrued interest and dividends receivable		14,674		12,890
Mortgage servicing rights, net		15,120		15,376
Assets held-for-sale, at cost		703		960
Premises and equipment, net		100,909		101,540
Cash surrender value of life insurance, net		53,958		53,232
Goodwill		34,740		34,740
Core deposit intangible, net		3,885		4,499
Other assets		24,979		26,631

Total assets	$	2,137,633	$	2,103,090

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

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Continued)

(Dollars in Thousands, Except for Per Share Data)

(Unaudited)

	June 30,			December 31,
	2025			2024
LIABILITIES:
Deposit accounts:
Noninterest-bearing	$	417,324		$	419,211
Interest-bearing		1,320,601			1,262,017
Total deposits		1,737,925			1,681,228

Accrued expenses and other liabilities		40,439			47,018
FHLB advances and other borrowings		119,407			140,930
Other long-term debt:
Principal amount		60,155			60,155
Unamortized debt issuance costs		(931	)		(1,006	)
Total other long-term debt, net		59,224			59,149

Total liabilities		1,956,995			1,928,325

SHAREHOLDERS' EQUITY:
Preferred stock (par value $0.01 per share; 1,000,000 shares authorized; no shares issued or outstanding)		-			-
Common stock (par value $0.01 per share; 20,000,000 shares authorized; 8,507,429 shares issued at June 30, 2025 and December 31, 2024; 7,952,177 shares outstanding at June 30, 2025 and 8,027,177 shares outstanding December 31, 2024)		85			85
Additional paid-in capital		108,590			108,334
Unallocated common stock held by Employee Stock Ownership Plan ("ESOP")		(3,724	)		(4,010	)
Treasury stock, at cost (552,252 shares at June 30, 2025 and 480,252 shares at December 31, 2024)		(11,925	)		(10,762	)
Retained earnings		105,470			101,264
Accumulated other comprehensive loss, net of tax		(17,858	)		(20,146	)
Total shareholders' equity		180,638			174,765

Total liabilities and shareholders' equity	$	2,137,633		$	2,103,090

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

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Dollars in Thousands, Except for Per Share Data)

(Unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
INTEREST AND DIVIDEND INCOME:
Interest and fees on loans	$	24,442	$	22,782	$	47,762	$	44,724
Securities available-for-sale		2,397		2,631		4,848		5,355
FHLB and FRB dividends		236		264		496		511
Other interest income		75		145		113		174
Total interest and dividend income		27,150		25,822		53,219		50,764

INTEREST EXPENSE:
Deposits		6,877		6,884		13,748		13,432
FHLB advances and other borrowings		1,459		2,625		3,085		5,122
Other long-term debt		669		681		1,339		1,364
Total interest expense		9,005		10,190		18,172		19,918

NET INTEREST INCOME		18,145		15,632		35,047		30,846

Provision for credit losses		1,038		412		1,080		277

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		17,107		15,220		33,967		30,569

NONINTEREST INCOME:
Service charges on deposit accounts		393		428		782		828
Mortgage banking, net		2,926		2,417		5,051		4,594
Interchange and ATM fees		670		640		1,263		1,203
Appreciation in cash surrender value of life insurance		393		320		743		608
Other noninterest income		425		464		984		988
Total noninterest income	$	4,807	$	4,269	$	8,823	$	8,221

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

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Continued)

(Dollars in Thousands, Except for Per Share Data)

(Unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
NONINTEREST EXPENSE:
Salaries and employee benefits	$	10,645	$	10,273	$	20,309	$	19,991
Occupancy and equipment expense		2,230		2,104		4,532		4,203
Data processing		1,305		1,382		2,635		2,907
Software subscriptions		715		511		1,373		1,039
Advertising		280		316		512		569
Amortization		298		348		618		717
Loan costs		354		412		726		810
Federal Deposit Insurance Corporation ("FDIC") insurance premiums		257		284		488		583
Professional and examination fees		391		423		911		907
Other noninterest expense		1,451		1,254		2,828		2,614
Total noninterest expense		17,926		17,307		34,932		34,340

INCOME BEFORE PROVISION FOR INCOME TAXES		3,988		2,182		7,858		4,450

Provision for income taxes		751		444		1,382		814

NET INCOME	$	3,237	$	1,738	$	6,476	$	3,636

BASIC EARNINGS PER COMMON SHARE	$	0.42	$	0.22	$	0.83	$	0.46

DILUTED EARNINGS PER COMMON SHARE	$	0.41	$	0.22	$	0.83	$	0.46

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

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in Thousands)

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2025			2024			2025			2024

NET INCOME	$	3,237		$	1,738		$	6,476		$	3,636

OTHER ITEMS OF COMPREHENSIVE INCOME (LOSS) BEFORE TAX:
Change in fair value of investment securities available-for-sale		1,475			524			3,115			(1,265	)
Total other comprehensive income (loss)		1,475			524			3,115			(1,265	)

Income tax (provision) benefit related to securities available-for-sale		(388	)		(138	)		(827	)		333

COMPREHENSIVE INCOME	$	4,324		$	2,124		$	8,764		$	2,704

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

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

For the three and six months ended June 30, 2025 and 2024

(Dollars in Thousands, Except for Per Share Data)

(Unaudited)

																	*ACCUMULATED*
					*ADDITIONAL*			*UNALLOCATED*									*OTHER*
	*PREFERRED*		*COMMON*		*PAID-IN*			*ESOP*			*TREASURY*			*RETAINED*			*COMPREHENSIVE*
	*STOCK*		*STOCK*		*CAPITAL*			*SHARES*			*STOCK*			*EARNINGS*			*(LOSS) INCOME*			*TOTAL*

Balance at April 1, 2025	$	-	$	85	$	108,451		$	(3,867	)	$	(11,517	)	$	103,366		$	(18,945	)	$	177,573
Net income				-		-			-			-			3,237			-			3,237
Other comprehensive income		-		-		-			-			-			-			1,087			1,087
Dividends paid ($0.1425 per share)		-		-		-			-			-			(1,133	)		-			(1,133	)
Stock compensation expense		-		-		182			-			-			-			-			182
ESOP shares allocated (5,997 shares)		-		-		(43	)		143			-			-			-			100
Treasury stock purchased (25,000 shares at $16.34 average cost per share)		-		-		-			-			(408	)		-			-			(408	)
Balance at June 30, 2025	$	-	$	85	$	108,590		$	(3,724	)	$	(11,925	)	$	105,470		$	(17,858	)	$	180,638

Balance at April 1, 2024	$	-	$	85	$	108,893		$	(4,440	)	$	(11,124	)	$	96,797		$	(21,263	)	$	168,948
Net income		-		-		-			-			-			1,738			-			1,738
Other comprehensive income		-		-		-			-			-			-			386			386
Dividends paid ($0.1400 per share)		-		-		-			-			-			(1,122	)		-			(1,122	)
Stock compensation expense		-		-		135			-			-			-			-			135
ESOP shares allocated (5,997 shares)		-		-		(66	)		143			-			-			-			77
Balance at June 30, 2024	$	-	$	85	$	108,962		$	(4,297	)	$	(11,124	)	$	97,413		$	(20,877	)	$	170,162

Balance at January 1, 2025	$	-	$	85	$	108,334		$	(4,010	)	$	(10,762	)	$	101,264		$	(20,146	)	$	174,765
Net income		-		-		-			-			-			6,476			-			6,476
Other comprehensive income		-		-		-			-			-			-			2,288			2,288
Dividends paid ($0.2850 per share)		-		-		-			-			-			(2,270	)		-			(2,270	)
Stock compensation expense		-		-		345			-			-			-			-			345
ESOP shares allocated (11,994 shares)		-		-		(89	)		286			-			-			-			197
Treasury stock purchased (75,000 shares at $15.52 average cost per share)		-		-		-			-			(1,163	)		-						(1,163	)
Balance at June 30, 2025	$	-	$	85	$	108,590		$	(3,724	)	$	(11,925	)	$	105,470		$	(17,858	)	$	180,638

Balance at January 1, 2024	$	-	$	85	$	108,819		$	(4,583	)	$	(11,124	)	$	96,021		$	(19,945	)	$	169,273
Net income		-		-		-			-			-			3,636			-			3,636
Other comprehensive loss		-		-		-			-			-			-			(932	)		(932	)
Dividends paid ($0.2800 per share)		-		-		-			-			-			(2,244	)		-			(2,244	)
Stock compensation expense		-		-		270			-			-			-			-			270
ESOP shares allocated (11,994 shares)		-		-		(127	)		286			-			-			-			159
Balance at June 30, 2024	$	-	$	85	$	108,962		$	(4,297	)	$	(11,124	)	$	97,413		$	(20,877	)	$	170,162

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

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

(Unaudited)

	Six Months Ended
	June 30,
	2025			2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	6,476		$	3,636
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses		1,080			277
Depreciation		2,633			2,596
Net amortization of investment securities premiums and discounts		351			532
Amortization of mortgage servicing rights		882			838
Amortization of right-of-use assets		239			262
Amortization of core deposit intangibles		618			717
Compensation expense related to restricted stock awards		345			270
ESOP compensation expense for allocated shares		197			159
Net gain on sale of loans		(3,432	)		(3,014	)
Originations of loans held-for-sale		(98,554	)		(96,314	)
Proceeds from sales of loans held-for-sale		101,077			99,644
Net appreciation in cash surrender value of life insurance		(708	)		(608	)
Net change in:
Accrued interest and dividends receivable		(1,784	)		(710	)
Other assets		928			150
Accrued expenses and other liabilities		(6,717	)		1,951
Net cash provided by operating activities		3,631			10,386

CASH FLOWS FROM INVESTING ACTIVITIES:
Activity in available-for-sale securities:
Maturities, principal payments and calls		13,340			9,337
Purchases		(3,023	)		-
FHLB stock redeemed		778			(945	)
Loan origination and principal collection, net		(49,157	)		(32,945	)
Proceeds from sale of real estate and other repossessed assets acquired in settlement of loans		40			-
Proceeds from sale of premises and equipment		-			62
Purchases of premises and equipment, net		(1,981	)		(7,417	)
Net cash used in investing activities	$	(40,003	)	$	(31,908	)

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

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Dollars in Thousands)

(Unaudited)

	Six Months Ended
	June 30,
	2025			2024
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits	$	56,697		$	(16,330	)
Net short-term advances from FHLB and other borrowings		20,977			19,313
Advances on long-term FHLB and other borrowings		20,000			20,000
Payments on long-term FHLB and other borrowings		(62,500	)		-
Purchase of treasury stock		(1,163	)		-
Dividends paid		(2,270	)		(2,244	)
Net cash provided by financing activities		31,741			20,739

NET DECREASE IN CASH AND CASH EQUIVALENTS		(4,631	)		(783	)

CASH AND CASH EQUIVALENTS, beginning of period		31,559			24,545

CASH AND CASH EQUIVALENTS, end of period	$	26,928		$	23,762


SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for interest	$	19,858		$	18,817
Cash paid during the period for income taxes, net of refund		477			194

NONCASH OPERATING, INVESTING AND FINANCING ACTIVITIES:
Increase (decrease) in fair value of securities available-for-sale	$	3,115		$	(1,265	)
Mortgage servicing rights recognized		626			599
Loans transferred to real estate and other assets acquired in foreclosure		91			4
Right-of-use assets obtained (used) in exchange for lease liabilities		3			(151	)
Decrease in commitments to invest in Low-Income-Housing Tax Credit projects		(31	)		(2,390	)

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

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Eagle Bancorp Montana, Inc. (“Eagle” or the “Company”), is a Delaware corporation that holds 100% of the capital stock of Opportunity Bank of Montana (“OBMT” or the “Bank”), formerly American Federal Savings Bank (“AFSB”). The Bank was founded in 1922 as a Montana chartered building and loan association and has conducted operations and maintained its administrative office in Helena, Montana since that time. In 1975, the Bank adopted a federal thrift charter and in October 2014 converted to a Montana chartered commercial bank and became a member bank in the Federal Reserve System.

Eagle Bancorp Statutory Trust I (the "Trust") was established in September 2005 and is owned 100% by Eagle.

In September 2021, the Company entered into an Agreement and Plan of Merger ("Merger Agreement") with First Community Bancorp, Inc. ("FCB"), a Montana corporation, and FCB's wholly-owned subsidiary, First Community Bank, a Montana chartered commercial bank. The Merger Agreement provided that, upon the terms and subject to the conditions set forth in the Merger Agreement, FCB would merge with and into Eagle, with Eagle continuing as the surviving corporation. The merger closed on April 30, 2022. First Community Bank operated nine branches in Ashland, Culbertson, Froid, Glasgow, Helena, Hinsdale, Three Forks and Wolf Point, Montana.

In March 2021, the Bank established a subsidiary, Opportunity Housing Fund, LLC ("OHF"), to invest in Low-Income Housing Tax Credit ("LIHTC") projects. The LIHTC program is designed to encourage capital investment in construction and rehabilitation of low-income housing. Tax credits are allowable over a 10-year period. Amortizing investments in LIHTC projects are included in other assets on the consolidated statements of financial condition and totaled $6,345,000 and $6,759,000 as of June 30, 2025 and December 31, 2024, respectively. Outstanding funding obligations for LIHTC projects are included in accrued expenses and other liabilities on the condensed consolidated financial statements of condition and totaled $184,000 as of June 30, 2025 and $215,000 as of December 31, 2024.

On January 1, 2020, the Company acquired Western Holding Company of Wolf Point, ("WHC"), a Montana corporation, and WHC's wholly-owned subsidiary, Western Bank of Wolf Point ("WB"), a Montana chartered commercial bank. The acquisition included one branch in Wolf Point, Montana. In addition, Western Financial Services, Inc. ("WFS") was acquired through the WHC merger. In December 2023, WFS changed its name to Opportunity Financial Services, Inc. ("OFS"). OFS facilitates deferred payment contracts for customers that produce agricultural products. The revenue from these contracts is accounted for in accordance with ASC Topic 606. The Company is considered an agent in these contracts, as: (i) the Company facilitates payment from customer to supplier, (ii) the Company does not take inventory of commodities as they are delivered by supplier to the customer, (iii) pricing of commodities is determined by the market, (iv) consideration on deferred payment contracts is insignificant to the Company and (v) the Company’s exposure to credit risk is minimal. Revenue is recognized net of expenses and reported in other noninterest income in the financial statements. Commodity sales income and the corresponding commodity sales expense were $2,798,000 for the three months ended June 30, 2025 and $1,118,000 for the three months ended June 30, 2024, respectively, for a net impact of $0. Commodity sales income and the corresponding commodity sales expense were $5,112,000 for the six months ended June 30, 2025 and $3,918,000 for the six months ended June 30, 2024, respectively, for a net impact of $0. Outstanding deferred contracts payable are included in accrued expenses and other liabilities on the condensed consolidated financial statements of condition and totaled $13,133,000 as of June 30, 2025 and $17,792,000 as of December 31, 2024.

The Bank is headquartered in Helena, Montana, and has additional branches in Ashland, Big Timber, Billings, Bozeman, Butte, Choteau, Culbertson, Denton, Dutton, Froid, Glasgow, Great Falls, Hamilton, Hinsdale, Livingston, Missoula, Sheridan, Three Forks, Townsend, Twin Bridges, Winifred and Wolf Point, Montana. The Bank’s principal business is accepting deposits and, together with funds generated from operations and borrowings, investing in various types of loans and securities.

The Bank currently has 30 full-service branches. The Bank’s principal business is accepting deposits and, together with funds generated from operations and borrowings, investing in various types of loans and securities.

Basis of Financial Statement Presentation and Use of Estimates

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). It is recommended that these unaudited interim condensed consolidated financial statements be read in conjunction with the Company’s Annual Report on Form 10-K with all of the audited information and footnotes required by U.S. GAAP for complete financial statements for the year ended December 31, 2024, as filed with the SEC on March 14, 2025. In the opinion of management, all normal adjustments and recurring accruals considered necessary for a fair presentation of the financial position and results of operations for the periods presented have been included.

The results of operations for the six-month period ended June 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025 or any other period. In preparing condensed consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the condensed consolidated statement of financial condition and reported amounts of revenues and expenses during the reporting period. Actual results could differ from estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for credit losses ("ACL"), mortgage servicing rights, the fair value of financial instruments, the valuation of goodwill and deferred tax assets and liabilities.

Principles of Consolidation

The condensed consolidated financial statements include Eagle, the Bank, OHF, Eagle Bancorp Statutory Trust I (the “Trust”) and OFS. All significant intercompany transactions and balances have been eliminated in consolidation.

Reclassifications

Certain prior period amounts were reclassified to conform to the presentation for 2025. These reclassifications had no impact on net income or shareholders’ equity.

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Table of Contents

NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued

Subsequent Events

The Company has evaluated events and transactions subsequent to June 30, 2025 for recognition and/or disclosure.

On July 4, 2025, the President of the United States signed and enacted the “One Big Beautiful Bill Act” into law. Except for certain provisions, the Tax Act is effective for tax years beginning on or after January 1, 2025. The tax and spending legislation permanently extends key business tax breaks originally enacted under the 2017 Tax Cuts and Jobs Act. The Company is currently evaluating the impact the bill will have on income tax expense.

Goodwill

Goodwill is recorded upon completion of a business combination as the difference between the purchase price and the fair value of net identifiable assets acquired. Subsequent to initial recognition, the Company tests goodwill for impairment annually as of October 31, or more often if events or circumstances, such as adverse changes in the business climate indicate there may be impairment. A goodwill impairment test is performed by comparing the fair value of the reporting unit with its carrying value. An impairment charge is recorded for the amount by which thy carrying amount exceeds the reporting unit’s fair value. For goodwill considerations the Company is a single reporting unit.

During the quarter ended September 30, 2024, Management performed a quantitative goodwill impairment test with assistance from a third-party valuation specialist. The interim determination was primarily driven by a revision in the Company’s earnings outlook in comparison to budget. A weighted average of both the market and income approaches was used in valuing the reporting unit’s fair value. The interim goodwill impairment assessment as of August 31, 2024 concluded that goodwill was not impaired. Our quantitative annual impairment test as of October 31, 2024 also did not result in impairment.

Segment Reporting

Management considers operations to be aggregated in one operating segment, as well as one reportable segment. The Company operates as one line of business (community banking) by providing a similar base of commercial and retail customers with comparable product and service offerings throughout our Montana markets. The Company adopted ASU No. 2023-07, Segment Reporting (Topic 280) during the year ended December 31, 2024. The President/Chief Executive Officer (“CEO”) serves as the Company’s chief operating decision maker (“CODM”).

The CODM is responsible for assessing performance and allocating operating and capital expenditure resources. The CODM regularly assesses the performance of the single operating and reporting segment based on consolidated net income. The CODM reviews expenses at a level consistent with those reported in the Company’s consolidated statements of income. All significant expense categories are reflected in the consolidated statements of income. The measure of segment assets is reflected in the consolidated statements of financial condition as total assets.

Recently Adopted Accounting Pronouncements

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) which provides temporary optional expedients to ease the financial reporting burdens of the expected market transition from London Interbank Offered Rate (“LIBOR”) to an alternative reference rate such as Secured Overnight Financing Rate ("SOFR"). In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848), which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. ASU No. 2021-01 was effective upon issuance and generally can be applied through December 31, 2024. The Company has reviewed all of its LIBOR based products and all products have been adjusted to another index as LIBOR ceased to be published after June 30, 2023. ASU No. 2021-01 did not have a significant impact on the Company's consolidated financial statements.

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The updated accounting guidance requires expanded reportable segment disclosures, primarily related to significant segment expenses which are regularly provided to the company's chief operating decision maker. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within annual periods beginning after December 15, 2024. Retrospective application is required. The Company adopted the updated guidance during the year ended December 31, 2024 and it did not have a significant impact on the Company's financial statement disclosures as the Company has a single reportable segment.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The updated accounting guidance requires enhanced income tax disclosures, including the disaggregation of existing disclosures related to the tax rate reconciliation and income taxes paid. This ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The amendments should be applied on a prospective basis, but retrospective application is permitted. The amendments in this ASU became effective for the Company on January 1, 2025 and did not have a significant impact on the Company’s financial position, results of operations, or liquidity.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This update requires that public companies disclose details about specific expenses such as employee compensation, depreciation, amortization, depletion, and inventory purchases. This ASU is effective for annual reporting periods beginning after December 15, 2026 with early adoption permitted. In January 2025, the FASB issued ASU No. 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), which clarifies the effective date. This ASU is effective for annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the effect the ASU will have on its consolidated financial statements and related disclosures.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 2. INVESTMENT SECURITIES

The amortized cost and fair values of securities, together with unrealized gains and losses, were as follows:

	June 30, 2025											December 31, 2024
			Gross											Gross
	Amortized		Unrealized							Fair		Amortized		Unrealized							Fair
	Cost		Gains		(Losses)			ACL		Value		Cost		Gains		(Losses)			ACL		Value
	(In Thousands)
Available-for-Sale:
U.S. government and agency obligations	$	4,587	$	77	$	(115	)	$	-	$	4,549	$	5,298	$	85	$	(188	)	$	-	$	5,195
U.S. treasury obligations		48,632		-		(4,210	)		-		44,422		52,592		-		(5,679	)		-		46,913
Municipal obligations		128,187		1		(13,366	)		-		114,822		131,109		1		(13,233	)		-		117,877
Corporate obligations		3,250		-		(102	)		-		3,148		4,249		-		(87	)		-		4,162
Mortgage-backed securities		28,785		120		(1,199	)		-		27,706		29,867		21		(1,653	)		-		28,235
Collateralized mortgage obligations		88,693		53		(5,544	)		-		83,202		89,313		11		(6,701	)		-		82,623
Asset-backed securities		7,123		51		-			-		7,174		7,511		83		(9	)		-		7,585
Total	$	309,257	$	302	$	(24,536	)	$	-	$	285,023	$	319,939	$	201	$	(27,550	)	$	-	$	292,590

There was no sales activity for available-for-sale securities during the three or six months ended June 30, 2025 or 2024.

The amortized cost and fair value of securities by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	June 30, 2025
	Amortized		Fair
	Cost		Value
	(In Thousands)
Due in one year or less	$	2,475	$	2,457
Due from one to five years		38,189		35,842
Due from five to ten years		83,389		73,993
Due after ten years		67,726		61,823
		191,779		174,115
Mortgage-backed securities		28,785		27,706
Collateralized mortgage obligations		88,693		83,202
Total	$	309,257	$	285,023

As of June 30, 2025 and December 31, 2024, securities with a fair value of $19,765,000 and $22,892,000, respectively, were pledged to secure public deposits and for other purposes required or permitted by law.

The Company’s investment securities that have been in a continuous unrealized loss position for less than twelve months and those that have been in a continuous unrealized loss position for twelve or more months were as follows:

	June 30, 2025
	Less Than 12 Months					12 Months or Longer
			Gross					Gross
	Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses
	(In Thousands)
U.S. government and agency obligations	$	-	$	-		$	1,815	$	(115	)
U.S. treasury obligations		-		-			44,422		(4,210	)
Municipal obligations		12,079		(725	)		102,187		(12,641	)
Corporate obligations		-		-			3,148		(102	)
Mortgage-backed securities and collateralized mortgage obligations		10,229		(106	)		78,931		(6,637	)
Asset-backed securities		-		-			200		-
Total	$	22,308	$	(831	)	$	230,703	$	(23,705	)

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 2. INVESTMENT SECURITIES – continued

	December 31, 2024
	Less Than 12 Months					12 Months or Longer
			Gross					Gross
	Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses
	(In Thousands)
U.S. government and agency obligations	$	-	$	-		$	1,749	$	(188	)
U.S. treasury obligations		-		-			46,914		(5,679	)
Municipal obligations		14,678		(261	)		102,521		(12,972	)
Corporate obligations		-		-			4,163		(87	)
Mortgage-backed securities and collateralized mortgage obligations		10,984		(188	)		85,392		(8,166	)
Asset-backed securities		1,993		(9	)		-		-
Total	$	27,655	$	(458	)	$	240,739	$	(27,092	)

As of June 30, 2025 and December 31, 2024, there were, respectively, 269 and 284 securities in unrealized loss positions. Based on analysis of available-for-sale debt securities with unrealized losses as of June 30, 2025, the Company determined the decline in value was unrelated to credit losses and was primarily caused by changes in interest rates and market spreads subsequent to the initial purchase of the securities. Management does not intend to sell and the Company is not likely to be required to sell these securities prior to maturity. As a result, no ACL was recorded on available-for-sale securities at June 30, 2025 and December 31, 2024. As part of this determination, consideration was given to the extent to which fair value was less than amortized cost, adverse security ratings by a rating agency and other factors.

NOTE 3. LOANS RECEIVABLE

Loans receivable consisted of the following:

	June 30,			December 31,
	2025			2024
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	194,289		$	199,422
Commercial real estate		938,451			916,783

Other loans:
Home equity		102,778			97,543
Consumer		26,658			28,513
Commercial		307,486			278,385

Total		1,569,662			1,520,646

Allowance for credit losses		(17,730	)		(16,850	)
Total loans, net	$	1,551,932		$	1,503,796

Included in the above are loans guaranteed by U.S. government agencies totaling $14,268,000 and $16,309,000 at June 30, 2025 and December 31, 2024, respectively.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3. LOANS RECEIVABLE – continued

The following table provides allowance for credit losses activity for the three months ended June 30, 2025.

	Residential		Commercial		Home
	1-4 Family		Real Estate		Equity			Consumer			Commercial		Total
	(In Thousands)
Allowance for credit losses on loans:
Beginning balance, April 1, 2025	$	1,904	$	10,830	$	551		$	239		$	3,196	$	16,720
Charge-offs		-		-		(27	)		(24	)		-		(51	)
Recoveries		-		3		-			-			-		3
Provision		101		589		15			7			346		1,058
Total ending allowance balance, June 30, 2025	$	2,005	$	11,422	$	539		$	222		$	3,542	$	17,730

The following table provides allowance for credit losses activity for the six months ended June 30, 2025.

	Residential		Commercial		Home
	1-4 Family		Real Estate		Equity			Consumer			Commercial		Total
	(In Thousands)
Allowance for credit losses on loans:
Beginning balance, January 1, 2025	$	1,911	$	10,907	$	553		$	245		$	3,234	$	16,850
Charge-offs		-		-		(27	)		(30	)		-		(57	)
Recoveries		-		5		-			1			1		7
Provision		94		510		13			6			307		930
Total ending allowance balance, June 30, 2025	$	2,005	$	11,422	$	539		$	222		$	3,542	$	17,730

The following table provides allowance for credit losses activity for the three months ended June 30, 2024.

	Residential		Commercial		Home
	1-4 Family		Real Estate		Equity		Consumer			Commercial		Total
	(In Thousands)
Allowance for credit losses on loans:
Beginning balance, April 1, 2024	$	1,858	$	10,633	$	538	$	304		$	3,077	$	16,410
Charge-offs		-		-		-		(12	)		-		(12	)
Recoveries		-		7		-		1			2		10
Provision		40		292		16		2			72		422
Total ending allowance balance, June 30, 2024	$	1,898	$	10,932	$	554	$	295		$	3,151	$	16,830

The following table provides allowance for credit losses activity for the six months ended June 30, 2024.

	Residential		Commercial		Home
	1-4 Family		Real Estate		Equity		Consumer			Commercial		Total
	(In Thousands)
Allowance for credit losses on loans:
Beginning balance, January 1, 2024	$	1,866	$	10,691	$	540	$	304		$	3,039	$	16,440
Charge-offs		-		-		-		(13	)		-		(13	)
Recoveries		-		10		-		2			64		76
Provision		32		231		14		2			48		327
Total ending allowance balance, June 30, 2024	$	1,898	$	10,932	$	554	$	295		$	3,151	$	16,830

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3. LOANS RECEIVABLE – continued

Internal classification of the loan portfolio by amortized cost and based on year originated was as follows:

	June 30, 2025
	2025		2024		2023		2022		2021		Prior		Revolving Loans		Total Loans
	(In Thousands)
RESIDENTIAL 1-4 FAMILY
Pass	$	5,533	$	19,078	$	23,871	$	30,650	$	19,450	$	45,135	$	1,949	$	145,666
Special Mention		-		-		-		625		-		-		-		625
Substandard		-		-		-		98		-		754		-		852
Total Residential 1-4 family		5,533		19,078		23,871		31,373		19,450		45,889		1,949		147,143
Current-period gross charge-offs		-		-		-		-		-		-		-		-
RESIDENTIAL 1-4 FAMILY CONSTRUCTION
Pass		14,272		15,114		2,357		12,239		-		-		1,836		45,818
Substandard		-		-		1,328		-		-		-				1,328
Total Residential 1-4 family construction		14,272		15,114		3,685		12,239		-		-		1,836		47,146
Current-period gross charge-offs		-		-		-		-		-		-		-		-
COMMERCIAL REAL ESTATE
Pass		20,023		57,674		67,294		188,080		123,911		164,408		39,941		661,331
Special Mention		-		-		259		435		-		-		2,921		3,615
Substandard		-		6,304		548		-		457		3,030		-		10,339
Total Commercial real estate		20,023		63,978		68,101		188,515		124,368		167,438		42,862		675,285
Current-period gross charge-offs		-		-		-		-		-		-		-		-
COMMERCIAL CONSTRUCTION AND DEVELOPMENT
Pass		14,242		27,729		9,123		20,844		8,539		12,666		6,884		100,027
Substandard		-		-		-		-		-		957		-		957
Total Commercial construction and development		14,242		27,729		9,123		20,844		8,539		13,623		6,884		100,984
Current-period gross charge-offs		-		-		-		-		-		-		-		-
FARMLAND
Pass		22,616		20,273		17,410		29,976		18,268		48,801		2,889		160,233
Special Mention		-		-		387		250		-		730		-		1,367
Substandard		-		188		-		-		-		348		46		582
Total Farmland		22,616		20,461		17,797		30,226		18,268		49,879		2,935		162,182
Current-period gross charge-offs		-		-		-		-		-		-		-		-
HOME EQUITY
Pass		1,244		1,241		1,099		2,983		333		2,418		93,026		102,344
Special Mention		-		-		-		-		-		22		129		151
Substandard		-		-		-		-		42		82		159		283
Total Home Equity		1,244		1,241		1,099		2,983		375		2,522		93,314		102,778
Current-period gross charge-offs		-		-		-		-		-		27		-		27
CONSUMER
Pass		5,680		7,496		5,436		3,335		1,132		1,062		2,298		26,439
Special Mention		-		1		24		-		-		-		19		44
Substandard		-		-		122		22		-		31		-		175
Total Consumer		5,680		7,497		5,582		3,357		1,132		1,093		2,317		26,658
Current-period gross charge-offs		-		10		-		7		-		-		13		30
COMMERCIAL
Pass		11,707		30,211		22,391		16,227		13,327		21,044		35,291		150,198
Special Mention		-		-		339		184		-		-		200		723
Substandard		-		1,152		41		5		15		197		4		1,414
Total Commercial		11,707		31,363		22,771		16,416		13,342		21,241		35,495		152,335
Current-period gross charge-offs		-		-		-		-		-		-		-		-
AGRICULTURAL
Pass		30,881		27,442		10,263		6,420		3,268		2,992		66,164		147,430
Special Mention		181		3,493		2,977		-		-		661		-		7,312
Substandard		-		-		-		-		-		409		-		409
Total Agricultural		31,062		30,935		13,240		6,420		3,268		4,062		66,164		155,151
Current-period gross charge-offs		-		-		-		-		-		-		-		-
TOTAL LOANS
Pass		126,198		206,258		159,244		310,754		188,228		298,526		250,278		1,539,486
Special Mention		181		3,494		3,986		1,494		-		1,413		3,269		13,837
Substandard		-		7,644		2,039		125		514		5,808		209		16,339
Total	$	126,379	$	217,396	$	165,269	$	312,373	$	188,742	$	305,747	$	253,756	$	1,569,662

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3. LOANS RECEIVABLE – continued

	December 31, 2024
	2024		2023		2022		2021		2020		Prior		Revolving Loans		Total Loans
	(In Thousands)
RESIDENTIAL 1-4 FAMILY
Pass	$	19,197	$	26,976	$	31,265	$	20,658	$	13,509	$	34,913	$	6,004	$	152,522
Special Mention		-		-		623		-		-		-		-		623
Substandard		-		-		-		-		-		576		-		576
Total Residential 1-4 family		19,197		26,976		31,888		20,658		13,509		35,489		6,004		153,721
Current-period gross charge-offs		-		-		-		-		-		11		-		11
RESIDENTIAL 1-4 FAMILY CONSTRUCTION
Pass		20,593		5,526		18,621		-		-		-		-		44,740
Substandard		-		204		-		757		-		-		-		961
Total Residential 1-4 family construction		20,593		5,730		18,621		757		-		-		-		45,701
Current-period gross charge-offs		-		-		-		-		-		-		-		-
COMMERCIAL REAL ESTATE
Pass		49,084		59,172		184,072		130,274		47,481		132,838		38,937		641,858
Special Mention		-		260		-		-		-		-		-		260
Substandard		-		490		-		463		-		2,891		-		3,844
Total Commercial real estate		49,084		59,922		184,072		130,737		47,481		135,729		38,937		645,962
Current-period gross charge-offs		-		-		-		-		-		-		-		-
COMMERCIAL CONSTRUCTION AND DEVELOPMENT
Pass		37,265		21,430		35,323		9,628		5,033		8,676		5,451		122,806
Substandard		-		-		438		-		2		965		-		1,405
Total Commercial construction and development		37,265		21,430		35,761		9,628		5,035		9,641		5,451		124,211
Current-period gross charge-offs		-		-		-		-		-		-		-		-
FARMLAND
Pass		21,543		18,083		29,983		18,991		20,076		33,721		2,323		144,720
Special Mention		-		342		813		205		-		220		-		1,580
Substandard		188		-		-		-		65		57		-		310
Total Farmland		21,731		18,425		30,796		19,196		20,141		33,998		2,323		146,610
Current-period gross charge-offs		-		-		-		-		-		-		-		-
HOME EQUITY
Pass		1,031		1,438		3,248		362		483		2,234		88,230		97,026
Special Mention		-		-		-		-		-		22		93		115
Substandard		-		-		-		43		-		89		270		402
Total Home Equity		1,031		1,438		3,248		405		483		2,345		88,593		97,543
Current-period gross charge-offs		-		-		-		-		-		-		-		-
CONSUMER
Pass		10,828		7,580		4,547		1,666		961		798		2,001		28,381
Special Mention		-		8		-		-		-		-		-		8
Substandard		-		66		19		-		24		14		1		124
Total Consumer		10,828		7,654		4,566		1,666		985		812		2,002		28,513
Current-period gross charge-offs		-		23		15		5		1		15		6		65
COMMERCIAL
Pass		29,540		25,748		19,189		15,851		17,617		6,208		27,839		141,992
Special Mention		-		127		95		-		-		-		370		592
Substandard		1,192		41		6		22		-		190		4		1,455
Total Commercial		30,732		25,916		19,290		15,873		17,617		6,398		28,213		144,039
Current-period gross charge-offs		-		-		-		-		-		10		-		10
AGRICULTURAL
Pass		39,001		21,690		9,014		4,215		3,143		1,608		52,494		131,165
Special Mention		1,811		159		15		-		-		37		596		2,618
Substandard		-		-		-		-		1		515		47		563
Total Agricultural		40,812		21,849		9,029		4,215		3,144		2,160		53,137		134,346
Current-period gross charge-offs		-		-		-		-		-		-		-		-
TOTAL LOANS
Pass		228,082		187,643		335,262		201,645		108,303		220,996		223,279		1,505,210
Special Mention		1,811		896		1,546		205		-		279		1,059		5,796
Substandard		1,380		801		463		1,285		92		5,297		322		9,640
Total	$	231,273	$	189,340	$	337,271	$	203,135	$	108,395	$	226,572	$	224,660	$	1,520,646

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3. LOANS RECEIVABLE – continued

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

	June 30, 2025
	Loans Past Due and Still Accruing

			90 Days				Nonaccrual		Nonaccrual
	30-89 Days		and				Loans with		Loans with		Current		Total
	Past Due		Greater		Total		no ACL		ACL		Loans		Loans
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	969	$	-	$	969	$	559	$	-	$	145,615	$	147,143
Residential 1-4 family construction		-		1,328		1,328		-		-		45,818		47,146
Commercial real estate		6,937		475		7,412		453		-		667,420		675,285
Commercial construction and development		439		762		1,201		1		-		99,782		100,984
Farmland		12		-		12		425		-		161,745		162,182
Other loans:
Home equity		509		-		509		222		-		102,047		102,778
Consumer		182		-		182		96		61		26,319		26,658
Commercial		421		61		482		193		4		151,656		152,335
Agricultural		13		34		47		409		-		154,695		155,151
Total	$	9,482	$	2,660	$	12,142	$	2,358	$	65	$	1,555,097	$	1,569,662

	December 31, 2024
	Loans Past Due and Still Accruing

			90 Days				Nonaccrual		Nonaccrual
	30-89 Days		and				Loans with		Loans with		Current		Total
	Past Due		Greater		Total		no ACL		ACL		Loans		Loans
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	1,326	$	623	$	1,949	$	469	$	-	$	151,303	$	153,721
Residential 1-4 family construction		-		-		-		961		-		44,740		45,701
Commercial real estate		5,739		-		5,739		268		-		639,955		645,962
Commercial construction and development		951		-		951		2		-		123,258		124,211
Farmland		54		-		54		190		-		146,366		146,610
Other loans:
Home equity		382		-		382		335		-		96,826		97,543
Consumer		195		-		195		98		23		28,197		28,513
Commercial		1,064		-		1,064		200		4		142,771		144,039
Agricultural		566		-		566		677		-		133,103		134,346
Total	$	10,277	$	623	$	10,900	$	3,200	$	27	$	1,506,519	$	1,520,646

Interest income recognized on nonaccrual loans for the three and six months ended June 30, 2025 and 2024 is considered insignificant. Interest payments received on a cash basis related to nonaccrual loans were $340,000 at June 30, 2025 and $522,000 at December 31, 2024.

The following tables present the amortized cost basis of collateral-dependent loans by class of loans.

	June 30, 2025
	Real Estate		Business Assets		Other
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	658	$	-	$	-
Residential 1-4 family construction		1,328		-		-
Commercial real estate		1,046		6,606		-
Commercial construction and development		957		-		-
Farmland		368		-		-
Other loans:
Home equity		198		-		-
Consumer		-		-		137
Commercial		-		276		4
Agricultural		34		157		-
Total	$	4,589	$	7,039	$	141

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3. LOANS RECEIVABLE – continued

	December 31, 2024
	Real Estate		Business Assets		Other
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	967	$	-	$	-
Residential 1-4 family construction		961		-		-
Commercial real estate		1,395		228		-
Farmland		108		-		-
Other loans:
Home equity		216		-		-
Consumer		-		-		104
Commercial		-		220		4
Agricultural		37		244		-
Total	$	3,684	$	692	$	108

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

The following tables include the amortized cost basis at the end of the period of the loans modified to borrowers experiencing financial difficulty.

	As of or For the
	Three Months Ended
	June 30, 2025
	Term Extension and Payment Deferral					Term Extension and Interest Rate Reduction
	Amortized Cost Basis		Percent of Loan Category			Amortized Cost Basis		Percent of Loan Category			Total
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	625		0.4	%	$	-		0.0	%	$	625
Farmland		108		0.1	%		-		0.0	%		108
Other loans:
Home equity		70		0.1	%		-		0.0	%		70
Agricultural		150		0.1	%		6		0.0	%		156
Total	$	953				$	6				$	959

	As of or For the
	Six Months Ended
	June 30, 2025
	Term Extension and Payment Deferral					Term Extension and Interest Rate Reduction
	Amortized Cost Basis		Percent of Loan Category			Amortized Cost Basis		Percent of Loan Category			Total
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	625		0.4	%	$	-		0.0	%	$	625
Commercial real estate		-		0.0	%		209		0.0	%		209
Farmland		108		0.1	%		-		0.0	%		108
Other loans:
Home equity		114		0.1	%		-		0.0	%		114
Agricultural		403		0.3	%		6		0.0	%		409
Total	$	1,250				$	215				$	1,465

During the three and six months ended June 30, 2024, the Company modified one loan.

As of June 30, 2024, the Company modified one farmland loan by extending the payment for seven months. The loan had amortized cost of $155,000 or 0.1% of farmland loans at June 30, 2024. The loan paid off during the fourth quarter of 2024.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 4. MORTGAGE SERVICING RIGHTS

The Company is servicing mortgage loans for the benefit of others which are not included in the condensed consolidated statements of financial condition and have unpaid principal balances of $1,986,957,000 and $2,016,242,000 at June 30, 2025 and December 31, 2024, respectively. Servicing loans for others generally consists of collecting mortgage payments, maintaining escrow accounts, disbursing payments to investors and foreclosure processing. Mortgage loan servicing fees were $1,255,000 and $1,275,000 for the three months ended June 30, 2025 and 2024, respectively. Mortgage loan servicing fees were $2,511,000 and $2,579,000 for the six months ended June 30,2025 and 2024, respectively. These fees, net of amortization, are included in mortgage banking, net, which is a component of noninterest income on the condensed consolidated statements of income.

Custodial balances maintained in connection with the foregoing loan servicing are included in noninterest checking deposits and were $14,069,000 and $10,077,000 at June 30, 2025 and December 31, 2024, respectively.

The following is a summary of activity in mortgage servicing rights:

	As of or For the
	Three Months Ended
	June 30,
	2025			2024
	(In Thousands)
Mortgage servicing rights:
Beginning balance	$	15,282		$	15,738
Mortgage servicing rights capitalized		355			347
Amortization of mortgage servicing rights		(517	)		(471	)
Ending balance	$	15,120		$	15,614

	As of or For the
	Six Months Ended
	June 30,
	2025			2024
	(In Thousands)
Mortgage servicing rights:
Beginning balance	$	15,376		$	15,853
Mortgage servicing rights capitalized		626			599
Amortization of mortgage servicing rights		(882	)		(838	)
Ending balance	$	15,120		$	15,614

The fair values of these mortgage servicing rights were $20,318,000 and $20,370,000 at June 30, 2025 and December 31, 2024, respectively. The fair value of mortgage servicing rights was determined at loan level, depending on the interest rate and term of the specific loan, using the following valuation assumptions:

	June 30,			December 31,
	2025			2024
Key assumptions:
Discount rate		12	%		12	%
Prepayment speed range		0 - 509	%		0 - 209	%
Weighted average prepayment speed		116	%		110	%

NOTE 5. DEPOSITS

Deposits are summarized as follows:

	June 30,		December 31,
	2025		2024
	(In Thousands)
Noninterest checking	$	417,324	$	419,211
Interest-bearing checking		205,021		221,476
Savings		205,596		210,572
Money market		450,685		367,094
Time certificates of deposit		459,299		462,875
Total	$	1,737,925	$	1,681,228

Time certificates of deposit include $1,425,000 and $0 of fixed rate brokered certificates at June 30, 2025 and December 31, 2024, respectively.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 6. OTHER LONG-TERM DEBT

Other long-term debt consisted of the following:

	June 30, 2025					December 31, 2024
			Unamortized					Unamortized
			Debt					Debt
	Principal		Issuance			Principal		Issuance
	Amount		Costs			Amount		Costs
	(In Thousands)
Subordinated debentures fixed at 5.50% to floating, due 2030	$	15,000	$	(168	)	$	15,000	$	(185	)
Subordinated debentures fixed at 3.50% to floating, due 2032		40,000		(763	)		40,000		(821	)
Subordinated debentures variable at 3-Month SOFR plus 1.68%, due 2035		5,155		-			5,155		-
Total other long-term debt	$	60,155	$	(931	)	$	60,155	$	(1,006	)

In January 2022, the Company completed the issuance of $40,000,000 in aggregate principal amount of subordinated notes due in 2032 in a private placement transaction to certain institutional accredited investors and qualified buyers. The notes bear interest at an annual fixed rate of 3.50% payable semi-annually. Starting February 1, 2027, interest will accrue at a floating rate per annum equal to a benchmark rate, which is expected to be three-month term Secured Overnight Financing Rate ("SOFR") plus a spread of 218.0 basis points, payable quarterly. The notes are subject to redemption at the option of the Company on or after February 1, 2027. The subordinated debentures qualify as Tier 2 capital for regulatory capital purposes.

In June 2020, the Company completed the issuance of $15,000,000 in aggregate principal amount of subordinated notes due in 2030 in a private placement transaction to certain qualified institutional accredited investors. The notes bear interest at an annual fixed rate of 5.50% payable semi-annually. Starting July 1, 2025, interest will accrue at a floating rate per annum equal to a benchmark rate, which is expected to be three-month term SOFR plus a spread of 509.0 basis points, payable quarterly. The floating rate was 9.39% as of July 1, 2025. The notes are subject to redemption at the option of the Company on or after July 1, 2025. The subordinated debentures qualify as Tier 2 capital for regulatory capital purposes.

In September 2005, the Company completed the private placement of $5,155,000 in subordinated debentures to the Trust. The Trust funded the purchase of the subordinated debentures through the sale of trust preferred securities to First Tennessee Bank, N.A. with a liquidation value of $5,155,000. Using interest payments made by the Company on the debentures, the Trust began paying quarterly dividends to preferred security holders in December 2005. The annual percentage rate of the interest payable on the subordinated debentures and distributions payable on the preferred securities was fixed at 6.02% until December 2010 then became variable at three-month LIBOR plus 1.42%, making the rate 6.20% as of December 31, 2023. In December of 2022, Governors of the Federal Reserve System adopted final rule 12 C.F.R. Part 253, Regulation Implementing the Adjustable Interest Rate (LIBOR) Act. Rule 253 identified SOFR-benchmark rates to replace LIBOR in certain financial contracts after June 30, 2023. As a result, the variable rate for interest payable converted to three-month CME Term SOFR plus 1.68% during the quarter ended March 31, 2024. The rate was 5.97% as of June 30, 2025. Dividends on the preferred securities are cumulative and the Trust may defer the payments for up to five years. The preferred securities mature in December 2035 unless the Company elects and obtains regulatory approval to accelerate the maturity date. The subordinated debentures qualify as Tier 1 capital for regulatory purposes.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 7. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table includes information regarding the activity in accumulated other comprehensive income (loss).

	Unrealized
	(Losses) Gains
	on Securities
	Available-for-Sale
	(In Thousands)
Balance, April 1, 2025	$	(18,945	)
Other comprehensive income, before reclassifications and income taxes		1,475
Amounts reclassified from accumulated other comprehensive loss, before income taxes		-
Income tax provision		(388	)
Total other comprehensive income		1,087
Balance, June 30, 2025	$	(17,858	)

Balance, April 1, 2024	$	(21,263	)
Other comprehensive income, before reclassifications and income taxes		524
Amounts reclassified from accumulated other comprehensive loss, before income taxes		-
Income tax provision		(138	)
Total other comprehensive income		386
Balance, June 30, 2024	$	(20,877	)

Balance, January 1, 2025	$	(20,146	)
Other comprehensive income, before reclassifications and income taxes		3,115
Amounts reclassified from accumulated other comprehensive loss, before income taxes		-
Income tax provision		(827	)
Total other comprehensive income		2,288
Balance, June 30, 2025	$	(17,858	)

Balance, January 1, 2024	$	(19,945	)
Other comprehensive loss, before reclassifications and income taxes		(1,265	)
Amounts reclassified from accumulated other comprehensive loss, before income taxes		-
Income tax benefit		333
Total other comprehensive loss		(932	)
Balance, June 30, 2024	$	(20,877	)

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Table of Contents

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 8. EARNINGS PER COMMON SHARE

The computations of basic and diluted earnings per common share are as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
	(Dollars in Thousands, Except Per Share Data)
Basic weighted average shares outstanding		7,791,320		7,830,925		7,801,726		7,827,926
Dilutive effect of stock compensation		21,336		14,347		17,387		12,362
Diluted weighted average shares outstanding		7,812,656		7,845,272		7,819,113		7,840,288

Net income available to common shareholders	$	3,237	$	1,738	$	6,476	$	3,636

Basic earnings per common share	$	0.42	$	0.22	$	0.83	$	0.46

Diluted earnings per common share	$	0.41	$	0.22	$	0.83	$	0.46

Restricted stock units excluded from the diluted average outstanding share calculation because their effect would be anti-dilutive		-		21,698		-		15,544

NOTE 9. DERIVATIVES AND HEDGING ACTIVITIES

The Company enters into commitments to originate and sell mortgage loans. The Bank uses derivatives to hedge the risk of changes in fair values of interest rate lock commitments and mortgage loans held-for-sale. An optimal amount of mortgage loans are sold directly into bulk commitments with investors at the time an interest rate is locked, other loans are sold on an individual best-efforts basis at the time an interest rate is locked, and the remaining balance of locked loans are hedged using To-Be-Announced (“TBA”) mortgage-backed securities or bulk mandatory forward loan sale commitments.

Derivatives are accounted for as free-standing or economic derivatives and are measured at fair value. Derivatives are recorded as either other assets or other liabilities on the condensed consolidated statements of condition.

Derivatives are summarized as follows:

	June 30, 2025						December 31, 2024
	Notional		Fair Value				Notional		Fair Value
	Amount		Asset		Liability		Amount		Asset		Liability
	(In Thousands)
Interest rate lock commitments	$	18,335	$	17	$	-	$	10,155	$	-	$	103
Forward TBA mortgage-backed securities		12,000		-		140		10,000		142		-

Changes in the fair value of the derivatives are recorded in mortgage banking, net, within noninterest income on the condensed consolidated statements of income. Net losses of $70,000 were recorded for the three months ended June 30, 2025, compared to net losses of $45,000 for the three months ended June 30, 2024. Net losses of $162,000 were recorded for the six months ended June 30, 2025, compared to net losses of $67,000 for the six months ended June 30, 2024.

NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

Assets and liabilities that are measured at fair value are grouped in three levels within the fair value hierarchy based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.

The fair value hierarchy is as follows:

■	Level 1 Inputs – Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities.

■

Level 2 Inputs – Valuations are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuations for which all significant assumptions are observable or can be corroborated by observable market data.

■	Level 3 Inputs – Valuations are based on unobservable inputs that may include significant management judgment and estimation.

A description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy at the reporting date, is set forth below.

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Table of Contents

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS – continued

Available-for-Sale Securities – Securities classified as available-for-sale are reported at fair value utilizing Level 1 (nationally recognized securities exchanges) and Level 2 inputs. For Level 2 inputs securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include but is not limited to dealer quotes, market spreads, cash flows, the U. S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayments speeds, credit information and the bond’s terms and conditions.

Loans Held-for-Sale – These loans are reported at fair value. Fair value is determined based on expected proceeds based on committed sales contracts and commitments of similar loans if not already committed and are considered Level 2 inputs.

Derivative Instruments – The fair value of the interest rate lock commitments, forward TBA mortgage-backed securities and mandatory forward commitments are estimated using quoted or published market prices for similar instruments and adjusted for factors such as pull-through rate assumptions based on historical information, where appropriate. Interest rate lock commitments are considered Level 3 inputs and forward TBA mortgage-backed securities and mandatory forward commitments are considered Level 2 inputs.

Collateral-Dependent Loans – Individually reviewed collateral-dependent loans are reported at the fair value of the underlying collateral less costs to sell. Collateral-dependent loans are considered Level 3 inputs. Collateral values are estimated using Level 3 inputs based on internally customized discounting criteria.

Real Estate and Other Repossessed Assets – Fair values are determined at the time the loan is foreclosed upon and the asset is transferred from loans. The value is based primarily on third party appraisals, less costs to sell and are considered Level 3 inputs for determining fair value. Repossessed assets are reviewed and evaluated periodically for additional impairment and adjusted accordingly.

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

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

	June 30, 2025
	Level 1		Level 2		Level 3		Total Fair
	Inputs		Inputs		Inputs		Value
	(In Thousands)
Financial assets:
Available-for-sale securities:
U.S. government and agency obligations	$	-	$	4,549	$	-	$	4,549
U.S. treasury obligations		44,422		-		-		44,422
Municipal obligations		-		114,822		-		114,822
Corporate obligations		-		3,148		-		3,148
Mortgage-backed securities		-		27,706		-		27,706
Collateralized mortgage obligations		-		83,202		-		83,202
Asset-backed securities		-		7,174		-		7,174
Loans held-for-sale		-		13,651		-		13,651
Interest rate lock commitments		-		-		17		17
Financial liabilities:
Forward TBA mortgage-backed securities		-		140		-		140

	December 31, 2024
	Level 1		Level 2		Level 3		Total Fair
	Inputs		Inputs		Inputs		Value
	(In Thousands)
Financial assets:
Available-for-sale securities:
U.S. government and agency obligations	$	-	$	5,195	$	-	$	5,195
U.S. treasury obligations		46,913		-		-		46,913
Municipal obligations		-		117,877		-		117,877
Corporate obligations		-		4,162		-		4,162
Mortgage-backed securities		-		28,235		-		28,235
Collateralized mortgage obligations		-		82,623		-		82,623
Asset-backed securities		-		7,585		-		7,585
Loans held-for-sale		-		13,368		-		13,368
Forward TBA mortgage-backed securities		-		142		-		142
Financial liabilities:
Interest rate lock commitments		-		-		103		103

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS – continued

Certain financial assets may be measured at fair value on a nonrecurring basis. These assets are subject to fair value adjustments that result from the application of lower of cost or fair value accounting or write-downs of individual assets, such as impaired loans that are collateral-dependent, real estate and other repossessed assets and mortgage servicing rights.

The following table summarizes financial assets measured at fair value on a nonrecurring basis for which a nonrecurring change in fair value has been recorded during the reporting periods presented:

	June 30, 2025
	Level 1		Level 2		Level 3		Total Fair
	Inputs		Inputs		Inputs		Value
	(In Thousands)
Collateral-dependent loans individually evaluated, net of ACL	$	-	$	-	$	43	$	43

	December 31, 2024
	Level 1		Level 2		Level 3		Total Fair
	Inputs		Inputs		Inputs		Value
	(In Thousands)
Collateral-dependent loans individually evaluated, net of ACL	$	-	$	-	$	96	$	96

The following table represents the Banks’s Level 3 financial assets and liabilities, the valuation techniques used to measure the fair value of those financial assets and liabilities, and the significant unobservable inputs and the ranges of values for those inputs.

	Principal	Significant	Range of
	Valuation	Unobservable	Significant Input
Instrument	Technique	Inputs	Values

Collateral-dependent loans individually evaluated	Fair value of underlying collateral	Discount applied to the obtained appraisal	10 - 30%
Real estate and other repossessed assets	Fair value of collateral	Discount applied to the obtained appraisal	10 - 30%
Interest rate lock commitments	Internal pricing model	Pull-through expectations	85 - 96%

The following tables provide a reconciliation of assets and liabilities measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the three and six months ended June 30, 2025.

	As of or For the						As of or For the
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2025			2024			2025			2024
	Interest Rate Lock Commitments						Interest Rate Lock Commitments
	(In Thousands)						(In Thousands)
Beginning balance	$	(28	)	$	(63	)	$	(103	)	$	15
Purchases and issuances		(10	)		(254	)		(28	)		(395	)
Sales and settlements		55			226			148			289
Ending balance	$	17		$	(91	)	$	17		$	(91	)
Unrealized gains (losses) related to items held at end of period	$	45		$	(28	)	$	120		$	(106	)

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS – continued

The tables below summarize the estimated fair values of financial instruments of the Company, whether or not recognized at fair value on the condensed consolidated statements of condition. The tables are followed by methods and assumptions that were used by the Company in estimating the fair value of the classes of financial instruments.

	June 30, 2025
							Total
	Level 1		Level 2		Level 3		Estimated		Carrying
	Inputs		Inputs		Inputs		Fair Value		Amount
	(In Thousands)
Financial assets:
Cash and cash equivalents	$	26,928	$	-	$	-	$	26,928	$	26,928
FHLB stock		-		7,000		-		7,000		7,000
FRB stock		-		4,131		-		4,131		4,131
Loans receivable, gross		-		-		1,529,008		1,529,008		1,569,662
Mortgage servicing rights		-		-		20,318		20,318		15,120
Financial liabilities:
Non-maturing interest-bearing deposits		-		861,302		-		861,302		861,302
Time certificates of deposit		-		-		457,784		457,784		459,299
FHLB advances and other borrowings		-		-		119,491		119,491		119,407
Other long-term debt		-		-		59,031		59,031		60,155

	December 31, 2024
							Total
	Level 1		Level 2		Level 3		Estimated		Carrying
	Inputs		Inputs		Inputs		Fair Value		Amount
	(In Thousands)
Financial assets:
Cash and cash equivalents	$	31,559	$	-	$	-	$	31,559	$	31,559
FHLB stock		-		7,778		-		7,778		7,778
FRB stock		-		4,131		-		4,131		4,131
Loans receivable, gross		-		-		1,466,511		1,466,511		1,520,646
Mortgage servicing rights		-		-		20,370		20,370		15,376
Financial liabilities:
Non-maturing interest-bearing deposits		-		799,142		-		799,142		799,142
Time certificates of deposit		-		-		461,254		461,254		462,875
FHLB advances and other borrowings		-		-		141,057		141,057		140,930
Other long-term debt		-		-		58,024		58,024		60,155

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Introduction

Eagle Bancorp Montana, Inc. is a bank holding company registered under the Bank Holding Company Act, is incorporated under the laws of Delaware and headquartered in Helena, Montana. Its wholly-owned subsidiary, Opportunity Bank of Montana (the "Bank"), is a Montana-state-chartered bank that is a member of the Federal Reserve System.

This discussion and analysis provides information that management believes is necessary to understand Eagle's financial condition, changes in financial condition, results of operations, and cash flows for the three and six months ended June 30, 2025, as compared to 2024. The following should be read in conjunction with the Company's Consolidated Financial Statements, and accompanying Notes thereto, for the year ended December 31, 2024, included in Eagle's Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (SEC) on March 14, 2025, and in conjunction with the Condensed Consolidated Financial Statements, and accompanying Notes thereto, included in Part I - Item 1. Financial Statements of this report. The results of operations for the three and six months ended June 30, 2025, are not necessarily indicative of the future results that may be attained for the entire year or other interim periods.

Executive Summary

The Company’s primary business activity is the ownership of the Bank. The Bank focuses on consumer, commercial, and agricultural lending. It engages in typical banking activities: acquiring deposits from local markets and originating loans and investing in securities. Our earnings depend primarily on our level of net interest income, which is the difference between interest earned on our interest-earning assets, consisting primarily of loans and investment securities, and the interest paid on interest-bearing liabilities, consisting primarily of deposits, borrowed funds, and trust-preferred securities. Net interest income is a function of our interest rate spread, which is the difference between the average yield earned on our interest-earning assets and the average rate paid on our interest-bearing liabilities, as well as a function of the average balance of interest-earning assets compared to interest-bearing liabilities. Also contributing to our earnings is noninterest income, which consists primarily of service charges and fees on loan and deposit products and services, net gains and losses on sale of assets, and mortgage loan service fees. Net interest income and noninterest income are offset by provisions for credit losses, general administrative and other expenses, including salaries and employee benefits and occupancy and equipment costs, as well as by state and federal income tax expense.

The Bank has focused on diversifying the loan portfolio over the past decade, adding commercial and agricultural loans to the strong mortgage lending proficiency. Loan originations represented by single-family residential mortgages enabled the Bank to successfully market home equity loans, as well as a wide range of shorter-term consumer loans for various personal needs (automobiles, recreational vehicles, etc.). The Bank has grown the commercial loan portfolio in both real estate and non-real estate, and further added agricultural loans, which have a shorter term and slightly higher interest rate, through acquisitions. The purpose of diversification is to mitigate the Bank’s exposure to specific market segments, as well as to improve our ability to manage our interest rate spread. This has provided additional interest income and improved interest rate sensitivity. The Bank’s management recognizes that fee income will also enable it to be less dependent on specialized lending and it now maintains a significant loan serviced portfolio which provides a steady source of fee income. Fee income is also supplemented with fees generated from deposit accounts. The Bank has a high percentage of non-maturity deposits, such as checking accounts and savings accounts, which allows management flexibility in managing its spread. Non-maturity deposits and certificates of deposits do not automatically reprice as interest rates rise. Gain on sale of loans also provides significant noninterest income in periods of high mortgage loan origination volumes. Such income will be, and has recently been, adversely affected in periods of lower mortgage activity.

Management continues to focus on improving the Bank’s earnings. Management believes the Bank needs to continue to concentrate on increasing net interest margin, other areas of fee income and control of operating expenses to achieve earnings growth going forward. Management’s strategy of growing the loan portfolio and deposit base is expected to help achieve these goals as follows: loans typically earn higher rates of return than investments; a larger deposit base should yield higher fee income; increasing the asset base will reduce the relative impact of fixed operating costs. The biggest challenge to this strategy is funding growth in an efficient manner. It may become more difficult to maintain deposit growth due to significant competition, the current conditions in the banking industry and possible reduced customer demand for deposits as customers may shift into other asset classes.

The level and movement of interest rates impacts the Bank’s earnings as well. The Federal Open Market Committee decreased the federal funds target rate to 4.50% during the year ended December 31, 2024. The rate remained at 4.50% during the six months ended June 30, 2025.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Financial Condition

Comparisons of financial condition in this section are between June 30, 2025 and December 31, 2024.

Total assets were $2.14 billion at June 30, 2025, an increase of $34.54 million, or 1.6% from $2.10 billion at December 31, 2024. Loans receivable, net increased by $48.13 million or 3.2% from December 31, 2024. However, securities available-for-sale decreased $7.57 million, or 2.6% from December 31, 2024. Total liabilities were $1.96 billion at June 30, 2025, an increase of $28.67 million, or 1.5% from $1.93 billion at December 31, 2024. The increase was largely due to an increase in total deposits, offset by a decrease in FHLB advances. Total deposits increased $56.70 million from December 31, 2024 and total borrowings decreased $21.45 million from December 31, 2024. Total shareholders’ equity increased $5.87 million, or 3.4% from December 31, 2024.

Financial Condition Details

Investment Activities

The following table summarizes investment activities:

	June 30,					December 31,
	2025					2024
	Fair Value		Percent of Total			Fair Value		Percent of Total
	(Dollars in Thousands)
Securities available-for-sale:
U.S. government and agency obligations	$	4,549		1.60	%	$	5,195		1.78	%
U.S. treasury obligations		44,422		15.59			46,913		16.03
Municipal obligations		114,822		40.28			117,877		40.29
Corporate obligations		3,148		1.10			4,162		1.42
Mortgage-backed securities		27,706		9.72			28,235		9.65
Collateralized mortgage obligations		83,202		29.19			82,623		28.24
Asset-backed securities		7,174		2.52			7,585		2.59
Total securities available-for-sale	$	285,023		100.00	%	$	292,590		100.00	%

Securities available-for-sale were $285.02 million at June 30, 2025, a decrease of $7.57 million, or 2.6% from $292.59 million at December 31, 2024. The decrease was primarily due to maturity, principal payments and call activity of $13.34 million offset by a security purchase of $3.02 million and an increase in fair value of $3.12 million.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Financial Condition – continued

Lending Activities

The following table includes the composition of the Bank’s loan portfolio by loan category:

	June 30,						December 31,
	2025						2024
	Amount			Percent of Total			Amount			Percent of Total
	(Dollars in Thousands)
Real estate loans:
Residential 1-4 family ⁽¹⁾	$	147,143			9.37	%	$	153,721			10.11	%
Residential 1-4 family construction		47,146			3.00			45,701			3.01
Total residential 1-4 family		194,289			12.37			199,422			13.12

Commercial real estate		675,285			43.03			645,962			42.48
Commercial construction and development		100,984			6.43			124,211			8.17
Farmland		162,182			10.33			146,610			9.64
Total commercial real estate		938,451			59.79			916,783			60.29

Total real estate loans		1,132,740			72.16			1,116,205			73.41

Other loans:
Home equity		102,778			6.55			97,543			6.41
Consumer		26,658			1.70			28,513			1.88

Commercial		152,335			9.70			144,039			9.47
Agricultural		155,151			9.89			134,346			8.83
Total commercial loans		307,486			19.59			278,385			18.30

Total other loans		436,922			27.84			404,441			26.59

Total loans		1,569,662			100.00	%		1,520,646			100.00	%

Allowance for credit losses		(17,730	)					(16,850	)
Total loans, net	$	1,551,932					$	1,503,796

⁽¹⁾

Excludes loans held-for-sale.

Loans receivable, net increased $48.13 million, or 3.2%, to $1.55 billion at June 30, 2025 from $1.50 billion at December 31, 2024. The increase was largely driven by an increase in total commercial loans of $29.10 million, an increase in commercial real estate loans of $21.67 million and an increase of $5.24 million in home equity loans. The increases were slightly offset by a decrease of $5.13 million in total residential loans and a decrease of $1.85 million in consumer loans.

Total loan originations were $280.72 million for the six months ended June 30, 2025. Total residential 1-4 family originations were $121.76 million, which includes $98.55 million of loans held-for-sale originations. Total commercial originations were $76.48 million. Total commercial real estate originations were $60.97 million. Home equity loan originations totaled $14.68 million. Consumer loan originations totaled $6.83 million. Loans held-for-sale increased by $280,000 to $13.65 million at June 30, 2025 from $13.37 million at December 31, 2024.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Financial Condition – continued

Lending Activities– continued

Generally, our collection procedures provide that when a loan is 15 or more days delinquent, the borrower is sent a past due notice. If the loan becomes 30 days delinquent, the borrower is sent a written delinquency notice requiring payment. If the delinquency continues, subsequent efforts are made to contact the delinquent borrower, including face to face meetings and counseling to resolve the delinquency. All collection actions are undertaken with the objective of compliance with the Fair Debt Collection Act.

For mortgage loans and home equity loans, if the borrower is unable to cure the delinquency or reach a payment agreement, we will institute foreclosure actions. If a foreclosure action is taken and the loan is not reinstated, paid in full or refinanced, the property is sold at judicial sale at which we may be the buyer if there are no adequate offers to satisfy the debt. Any property acquired as the result of foreclosure, or by deed in lieu of foreclosure, is classified as real estate owned until such time as it is sold or otherwise disposed of. When real estate owned is acquired, it is recorded at its fair market value less estimated selling costs. The initial recording of any loss is charged to the allowance for credit losses. Subsequent write-downs are recorded as a charge to operations. As of June 30, 2025 and December 31, 2024 there was $86,000 and $45,000, respectively, of real estate owned and other repossessed property.

The following table sets forth information regarding nonperforming assets:

	June 30,			December 31,
	2025			2024
	(Dollars in Thousands)
Nonaccrual loans
Real estate loans:
Residential 1-4 family	$	559		$	469
Residential 1-4 family construction		-			961
Commercial real estate		453			268
Commercial construction and development		1			2
Farmland		425			190
Other loans:
Home equity		222			335
Consumer		157			121
Commercial		197			204
Agricultural		409			677
Accruing loans delinquent 90 days or more
Real estate loans:
Residential 1-4 family		-			623
Residential 1-4 family construction		1,328			-
Commercial real estate		475			-
Commercial construction and development		762			-
Other loans:
Commercial		61			-
Agricultural		34			-
Total nonperforming loans		5,083			3,850
Real estate owned and other repossessed property, net		86			45
Total nonperforming assets	$	5,169		$	3,895

Total nonperforming loans to total loans		0.32	%		0.25	%
Total nonperforming loans to total assets		0.24	%		0.18	%
Total nonaccrual loans to total loans		0.15	%		0.21	%
Total nonperforming assets to total assets		0.24	%		0.19	%

Nonaccrual loans as of June 30, 2025 and December 31, 2024 include $617,000 and $591,000, respectively of acquired loans that deteriorated subsequent to the acquisition date.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following tables include the composition of the commercial real estate loan category:

	June 30, 2025
	Non-Owner Occupied		Owner Occupied		Total		Percent of Total CRE
	(Dollars In Thousands)
Automotive related	$	-	$	23,477	$	23,477		3.48	%
Bars and restaurants		5,505		16,183		21,688		3.21
Car washes		987		-		987		0.15
Construction and related industries		23,040		12,738		35,778		5.30
Healthcare and social assistance		10,882		13,940		24,822		3.68
Hospitality industry related		-		13,342		13,342		1.98
Hotels and other traveler accommodations		81,134		-		81,134		12.01
Industrial/warehouse		64,398		-		64,398		9.54
Lessors of mini warehouses and self-storage units		20,263		-		20,263		3.00
Lessors of nonresidential buildings		60,041		-		60,041		8.89
Lessors of other real estate property		30,057		-		30,057		4.45
Multifamily		115,884		-		115,884		17.14
Office space		22,874		40,644		63,518		9.41
Other real estate rental and leasing		6,347		-		6,347		0.94
Real estate leasing activities		-		29,346		29,346		4.35
Wholesale and retail trade		11,988		14,256		26,244		3.89
Other		31,949		26,010		57,959		8.58
Total commercial real estate	$	485,349	$	189,936	$	675,285		100.00	%

	December 31, 2024
	Non-Owner Occupied		Owner Occupied		Total		Percent of Total CRE
	(Dollars In Thousands)
Automotive related	$	-	$	23,738	$	23,738		3.67	%
Bars and restaurants		5,030		15,912		20,942		3.24
Car washes		884		-		884		0.14
Construction and related industries		19,717		13,968		33,685		5.21
Healthcare and social assistance		10,483		13,907		24,390		3.78
Hospitality industry related		-		13,764		13,764		2.13
Hotels and other traveler accommodations		66,702		-		66,702		10.33
Industrial/warehouse		51,168		-		51,168		7.92
Lessors of mini warehouses and self-storage units		16,682		-		16,682		2.58
Lessors of nonresidential buildings		67,782		-		67,782		10.49
Lessors of other real estate property		31,675		-		31,675		4.90
Multifamily		113,789		-		113,789		17.63
Office space		20,553		38,104		58,657		9.08
Other real estate rental and leasing		6,836		-		6,836		1.06
Real estate leasing activities		-		27,465		27,465		4.25
Wholesale and retail trade		11,969		12,705		24,674		3.82
Other		37,876		25,253		63,129		9.77
Total commercial real estate	$	461,146	$	184,816	$	645,962		100.00	%

Commercial real estate loans made up $675.29 million or 43.0% of the Bank's total loan portfolio at June 30, 2025, compared to $645.96 million or 42.5% at December 31, 2024. The Bank's commercial real estate loans are primarily permanent loans secured by improved property such as office buildings, retail stores, commercial warehouses, and apartment buildings. The terms and conditions of each loan are tailored to the needs of the borrower and based on the financial strength of the project and any guarantors. Generally, commercial real estate loans originated by the Bank will not exceed 80.0% of the appraised value or the selling price of the property, whichever is less. The Bank's commercial real estate portfolio's average loan-to-value ratio range was 32% to 48% as of June 30, 2025.

The Bank's asset quality with respect to commercial real estate loans has remained strong despite recent economic and market conditions. The Bank has limited exposure in the office space sector, none of which is located in central business districts. Management believes that the Bank has implemented appropriate risk management practices, including regular and ongoing loan reviews, stress tests, and sensitivity analysis. Loan reviews include monitoring past due rates, non-performing trends, concentrations, loan to value ratios, and other qualitative factors. The Bank's loan policy is robust and is updated annually or as needed to meet the risk mitigation and strategic goals of the bank.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Financial Condition – continued

Deposits and Other Sources of Funds

The following table includes deposit accounts by category:

	June 30,					December 31,
	2025					2024
			Percent					Percent
	Amount		of Total			Amount		of Total
	(Dollars in Thousands)
Noninterest checking	$	417,324		24.01	%	$	419,211		24.94	%
Interest-bearing checking		205,021		11.80			221,476		13.17
Savings		205,596		11.82			210,572		12.52
Money market		450,685		25.92			367,094		21.83
Total		1,278,626		73.55			1,218,353		72.46
Certificates of deposit accounts:
IRA certificates		21,171		1.22			21,419		1.27
Brokered certificates		1,425		0.08			-		-
Other certificates		436,703		25.15			441,456		26.27
Total certificates of deposit		459,299		26.45			462,875		27.54
Total deposits	$	1,737,925		100.00	%	$	1,681,228		100.00	%

Deposits increased by $56.70 million, or 3.4%, from December 31, 2024 to June 30, 2025. Money market deposits increased $83.59 million. This increase was partially offset by decreases in interest-bearing checking of $16.46 million, savings of $4.98 million, certificates of deposit of $3.58 million and noninterest checking of $1.89 million.

The estimated amount of uninsured deposits was approximately $329.0 million or 19% of total deposits at June 30, 2025 compared to approximately $323.0 million or 19% of total deposits at December 31, 2024.

The following table summarizes borrowing activity:

	June 30,					December 31,
	2025					2024
	Net		Percent			Net		Percent
	Amount		of Total			Amount		of Total
	(Dollars in Thousands)
FHLB advances and other borrowings	$	119,407		66.85	%	$	140,930		70.44	%
Other long-term debt:
Subordinated debentures fixed at 5.50% to floating, due 2030		14,832		8.30			14,815		7.40
Subordinated debentures fixed at 3.50% to floating, due 2032		39,237		21.96			39,179		19.58
Subordinated debentures variable, due 2035		5,155		2.89			5,155		2.58
Total other long-term debt		59,224		33.15			59,149		29.56
Total borrowings	$	178,631		100.00	%	$	200,079		100.00	%

Total borrowings decreased by $21.45 million, or 10.7%, to $178.63 million at June 30, 2025 from $200.08 million at December 31, 2024, due to a decrease in FHLB advances and other borrowings.

Shareholders’ Equity

Total shareholders’ equity increased by $5.87 million, or 3.4%, to $180.64 million at June 30, 2025 from $174.77 million at December 31, 2024. The increase was primarily attributed to net income of $6.48 million and a decrease in unrealized losses of securities available for sale of $2.29 million. These increases were partially offset by dividends paid of $2.27 million and treasury stock repurchases of $1.16 million.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Analysis of Net Interest Income

The Bank’s earnings have historically depended primarily upon net interest income, which is the difference between interest income earned on loans and investments and interest paid on deposits and any borrowed funds. It is the single largest component of Eagle’s operating income. Net interest income is affected by (i) the difference between rates of interest earned on loans and investments and rates paid on interest-bearing deposits and borrowings (the “interest rate spread”) and (ii) the relative amounts of loans and investments and interest-bearing deposits and borrowings.

The following table includes average balances for financial condition items, as well as interest and dividends and average yields related to the average balances. All average balances are daily average balances. Nonaccrual loans were included in the computation of average balances, but have been reflected in the table as loans carrying a zero yield. The yields include the effect of deferred fees and discounts and premiums that are amortized or accreted to interest income or expense.

	For the Three Months Ended June 30,
	2025							2024
	Average		Interest					Average		Interest
	Daily		and		Yield/			Daily		and		Yield/
	Balance		Dividends		Cost(4)			Balance		Dividends		Cost(4)
	(Dollars in Thousands)
Assets:
Interest-earning assets:
Investment securities	$	287,707	$	2,397		3.34	%	$	306,207	$	2,631		3.45	%
FHLB and FRB stock		11,345		236		8.34			13,243		264		8.00
Loans receivable⁽¹⁾		1,554,756		24,442		6.31			1,513,313		22,782		6.04
Other earning assets		8,216		75		3.66			4,655		145		12.49
Total interest-earning assets		1,862,024		27,150		5.85			1,837,418		25,822		5.64
Noninterest-earning assets		250,446							240,030
Total assets	$	2,112,470						$	2,077,448

Liabilities and equity:
Interest-bearing liabilities:
Deposit accounts:
Checking	$	219,867	$	102		0.19	%	$	218,995	$	139		0.25	%
Savings		201,585		31		0.06			215,959		34		0.06
Money market		412,716		2,515		2.44			348,351		2,145		2.47
Certificates of deposit		454,719		4,229		3.73			437,390		4,566		4.19
FHLB advances and other borrowings		125,773		1,459		4.65			192,346		2,625		5.47
Other long-term debt		59,211		669		4.53			59,062		681		4.62
Total interest-bearing liabilities		1,473,871		9,005		2.45			1,472,103		10,190		2.78
Noninterest checking		417,374							405,188
Other noninterest-bearing liabilities		42,121							38,624
Total liabilities		1,933,366							1,915,915

Total equity		179,104							161,533

Total liabilities and equity	$	2,112,470						$	2,077,448
Net interest income/interest rate spread⁽²⁾			$	18,145		3.40	%			$	15,632		2.86	%

Net interest margin⁽³⁾						3.91	%						3.41	%
Total interest-earning assets to interest-bearing liabilities						126.34	%						124.82	%

⁽¹⁾Includes loans held-for-sale.

⁽²⁾Interest rate spread represents the difference between the average yield on interest-earning assets and the average rate on interest-bearing liabilities.

⁽³⁾ Net interest margin represents income before the provision for loan losses divided by average interest-earning assets.

⁽⁴⁾For purposes of this table, tax exempt income is not calculated on a tax equivalent basis.

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Table of Contents

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

	For the Six Months Ended June 30,
	2025							2024
	Average		Interest					Average		Interest
	Daily		and		Yield/			Daily		and		Yield/
	Balance		Dividends		Cost(4)			Balance		Dividends		Cost(4)
	(Dollars in Thousands)
Assets:
Interest-earning assets:
Investment securities	$	290,490	$	4,848		3.37	%	$	310,168	$	5,355		3.46	%
FHLB and FRB stock		11,580		496		8.64			13,283		511		7.72
Loans receivable⁽¹⁾		1,540,765		47,762		6.25			1,506,303		44,724		5.95
Other earning assets		5,782		113		3.94			4,113		174		8.48
Total interest-earning assets		1,848,617		53,219		5.81			1,833,867		50,764		5.55
Noninterest-earning assets		251,363							238,146
Total assets	$	2,099,980						$	2,072,013

Liabilities and equity:
Interest-bearing liabilities:
Deposit accounts:
Checking	$	219,889	$	198		0.18	%	$	219,511	$	185		0.17	%
Savings		202,332		62		0.06			218,045		69		0.06
Money market		394,852		4,708		2.40			343,533		4,170		2.43
Certificates of deposit		460,218		8,780		3.85			438,661		9,008		4.12
FHLB advances and other borrowings		132,302		3,085		4.70			186,767		5,122		5.50
Other long-term debt		59,192		1,339		4.56			59,043		1,364		4.63
Total interest-bearing liabilities		1,468,785		18,172		2.49			1,465,560		19,918		2.74
Noninterest checking		411,535							406,077
Other noninterest-bearing liabilities		41,411							38,292
Total liabilities		1,921,731							1,909,929

Total equity		178,249							162,084

Total liabilities and equity	$	2,099,980						$	2,072,013
Net interest income/interest rate spread⁽²⁾			$	35,047		3.32	%			$	30,846		2.82	%

Net interest margin⁽³⁾						3.82	%						3.37	%
Total interest-earning assets to interest-bearing liabilities						125.86	%						125.13	%

⁽¹⁾Includes loans held-for-sale.

⁽²⁾Interest rate spread represents the difference between the average yield on interest-earning assets and the average rate on interest-bearing liabilities.

⁽³⁾ Net interest margin represents income before the provision for loan losses divided by average interest-earning assets.

⁽⁴⁾For purposes of this table, tax exempt income is not calculated on a tax equivalent basis.

Net Interest Margin (NIM). Net interest margin for the three months ended June 30, 2025 was 3.91%, an increase of 50 basis points compared to June 30, 2024. For the six months ended June 30, 2025, net interest margin was 3.82%, an increase of 45 basis points compared to the six months ended June 30, 2024. The change in NIM reflects the increase in yields on interest-earning assets and the decrease in yield on interest-bearing liabilities.

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Table of Contents

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Rate/Volume Analysis

The following tables present the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to: (1) changes in volume multiplied by the old rate; (2) changes in rate, which are changes in rate multiplied by the old volume; and (3) changes not solely attributable to rate or volume, which have been allocated proportionately to the change due to volume and the change due to rate.

	For the Three Months Ended June 30,
	2025									2024
				Due to									Due to
	Volume			Rate			Net			Volume			Rate			Net
	(In Thousands)
Interest-earning assets:
Investment securities	$	(159	)	$	(75	)	$	(234	)	$	(321	)	$	3		$	(318	)
FHLB and FRB stock		(38	)		10			(28	)		1			102			103
Loans receivable⁽¹⁾		624			1,036			1,660			1,441			2,204			3,645
Other earning assets		111			(181	)		(70	)		20			100			120
Total interest-earning assets		538			790			1,328			1,141			2,409			3,550

Interest-bearing liabilities:
Checking		1			(38	)		(37	)		(21	)		(104	)		(125	)
Savings		(2	)		(1	)		(3	)		(4	)		1			(3	)
Money Market		396			(26	)		370			92			890			982
Certificates of deposit		181			(518	)		(337	)		783			1,092			1,875
FHLB advances and other borrowings		(909	)		(257	)		(1,166	)		361			85			446
Other long-term debt		2			(14	)		(12	)		2			5			7
Total interest-bearing liabilities		(331	)		(854	)		(1,185	)		1,213			1,969			3,182

Change in net interest income	$	869		$	1,644		$	2,513		$	(72	)	$	440		$	368

	For the Six Months Ended June 30,
	2025									2024
				Due to									Due to
	Volume			Rate			Net			Volume			Rate			Net
	(In Thousands)
Interest earning assets:
Investment securities	$	(340	)	$	(167	)	$	(507	)	$	(575	)	$	138		$	(437	)
FHLB and FRB stock		(66	)		51			(15	)		34			209			243
Loans receivable⁽¹⁾		1,023			2,015			3,038			3,167			4,683			7,850
Other earning assets		71			(132	)		(61	)		26			102			128
Total interest earning assets		688			1,767			2,455			2,652			5,132			7,784

Interest bearing liabilities:
Checking		-			13			13			(47	)		(218	)		(265	)
Savings		(5	)		(2	)		(7	)		(9	)		6			(3	)
Money Market		623			(85	)		538			33			2,028			2,061
Certificates of deposit		443			(671	)		(228	)		1,631			3,393			5,024
FHLB advances and other borrowings		(1,494	)		(543	)		(2,037	)		1,416			385			1,801
Other long-term debt		3			(28	)		(25	)		3			9			12
Total interest bearing liabilities		(430	)		(1,316	)		(1,746	)		3,027			5,603			8,630

Change in net interest income	$	1,118		$	3,083		$	4,201		$	(375	)	$	(471	)	$	(846	)

⁽¹⁾Includes loans held-for-sale.

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Table of Contents

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

The following compares the results of operations for the three months ended June 30, 2025 and 2024.

	Three Months Ended
	June 30,
	2025		2024		Dollar Change			Percent Change
	(Dollars in Thousands)
Interest and dividend income	$	27,150	$	25,822	$	1,328			5.1	%
Interest expense		9,005		10,190		(1,185	)		-11.6
Net interest income		18,145		15,632		2,513			16.1
Provision for credit losses		1,038		412		626			151.9
Net interest income after provision for credit losses		17,107		15,220		1,887			12.4

Noninterest income		4,807		4,269		538			12.6
Noninterest expense		17,926		17,307		619			3.6
Provision for income taxes		751		444		307			69.1
Net income	$	3,237	$	1,738	$	1,499			86.2	%

Net Income. Eagle’s net income for the three months ended June 30, 2025 was $3.24 million compared to $1.74 million for the three months ended June 30, 2024. The increase of $1.50 million was largely driven by an increase in net interest income after provision for credit losses of $1.89 million. For the current period, basic earnings per common share was $0.42 and diluted earnings per common share was $0.41. Basic and diluted earnings per common share were both $0.22 for the three months ended June 30, 2024.

Net Interest Income. Net interest income increased to $18.15 million for the three months ended June 30, 2025, from $15.63 million for the three months ended June 30, 2024. The increase of $2.51 million, or 16.1% was the result of an increase in interest and dividend income of $1.33 million and a decrease in interest expense of $1.19 million.

Interest and Dividend Income. Interest and dividend income was $27.15 million for the three months ended June 30, 2025, compared to $25.82 million for the three months ended June 30, 2024. The increase of $1.33 million, or 5.1% was driven by interest and fees on loans, which increased to $24.44 million for the three months ended June 30, 2025, from $22.78 million for the three months ended June 30, 2024. The increase in interest and fees on loans was due to an increase in the average yield on loans, as well as an increase in the average balance of loans. The average interest rate earned on loans receivable increased by 27 basis points, from 6.04% for the three months ended June 30, 2024, to 6.31% for the current period. Interest accretion on purchased loans was $607,000 for the three months ended June 30, 2025, which resulted in a 13 basis point increase in net interest margin compared to $304,000 for the three months ended June 30, 2024, which resulted in a seven basis point increase in net interest margin. Average balances for loans receivable, including loans held-for-sale, for the three months ended June 30, 2025 were $1.55 billion compared to $1.51 billion for the three months ended June 30, 2024. This represents an increase of $41.45 million, or 2.7% and was due to organic growth. Interest on investment securities available-for-sale decreased by $234,000 period over period due to a decrease in average balances for investments from $306.21 million for the three months ended June 30, 2024 to $287.71 million for the three months ended June 30, 2025. In addition, average interest rates earned on investments decreased from 3.45% for the three months ended June 30, 2024 to 3.34% for the three months ended June 30, 2025.

Interest Expense. Total interest expense was $9.01 million for the three months ended June 30, 2025, compared to $10.19 million for the three months ended June 30, 2024. The decrease of $1.19 million was due to a net decrease of $1.18 million in interest expense on total borrowings. The decrease in interest expense on total borrowings was driven by the average balance of FHLB advances and other borrowings decreasing from $192.35 million for the three months ended June 30, 2024, to $125.77 million for the three months ended June 30, 2025. The average rate paid on FHLB advances and other borrowings also decreased from 5.47% for the three months ended June 30, 2024, to 4.65% for the three months ended June 30, 2025. The overall average rate on total deposits was also down from 1.70% for the three months ended June 30, 2024, compared to 1.62% for the three months ended June 30, 2025. The average balance for total deposits was $1.71 billion for the three months ended June 30, 2025, compared to $1.63 billion for the three months ended June 30, 2024.

Provision for Credit Losses. Provision for credit losses was $1.04 million for the three months ended June 30, 2025, compared to $412,000 for the three months ended June 30, 2024. The provision for credit losses for the three months ended June 30, 2025, included an increase in the provision for credit losses on loans to $1.06 million, offset slightly by a recapture of the provision for unfunded commitments of $20,000.

Noninterest Income. Total noninterest income was $4.81 million for the three months ended June 30, 2025, compared to $4.27 million for the three months ended June 30, 2024. The increase of $538,000, or 12.6% was primarily due to an increase in mortgage banking, net, of $509,000. Mortgage banking, net, includes net gain on sale of mortgage loans which increased to $2.08 million for the three months ended June 30, 2025, compared to $1.60 million for the three months ended June 30, 2024. During the three months ended June 30, 2025, $54.60 million residential mortgage loans were sold compared to $53.23 million in the three months ended June 30, 2024. Gross margin levels increased from 3.01% for the three months ended June 30, 2024, to 3.81% for the three months ended June 30, 2025.

Noninterest Expense. Noninterest expense was $17.93 million for the three months ended June 30, 2025, compared to $17.31 million for the three months ended June 30, 2024, an increase of $619,000 or 3.6%.

Provision for Income Taxes. Provision for income taxes was $751,000 for the three months ended June 30, 2025, compared to $444,000 for the three months ended June 30, 2024. The effective tax rate was 18.8% for the current period compared to 20.3% for the three months ended June 30, 2024.

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Table of Contents

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following compares the results of operations for the six months ended June 30, 2025 and 2024.

	Six Months Ended
	June 30,
	2025		2024		Dollar Change			Percent Change
	(Dollars in Thousands)
Interest and dividend income	$	53,219	$	50,764	$	2,455			4.8	%
Interest expense		18,172		19,918		(1,746	)		-8.8
Net interest income		35,047		30,846		4,201			13.6
Provision for credit losses		1,080		277		803			289.9
Net interest income after provision for credit losses		33,967		30,569		3,398			11.1

Noninterest income		8,823		8,221		602			7.3
Noninterest expense		34,932		34,340		592			1.7
Provision for income taxes		1,382		814		568			69.8
Net income	$	6,476	$	3,636	$	2,840			78.1	%

Net Income. Eagle’s net income for the six months ended June 30, 2025 was $6.48 million compared to $3.64 million for the six months ended June 30, 2024. The increase of $2.84 million was largely driven by an increase in net interest income after provision for credit losses of $3.40 million. For the current period, basic and diluted earnings per common share were both $0.83. Basic and diluted earnings per common share were both $0.46 for the six months ended June 30, 2024.

Net Interest Income. Net interest income increased to $35.05 million for the six months ended June 30, 2025, from $30.85 million for the six months ended June 30, 2024. The increase of $4.20 million, or 13.6% was the result of an increase in interest and dividend income of $2.46 million and a decrease in interest expense of $1.75 million.

Interest and Dividend Income. Interest and dividend income was $53.22 million for the six months ended June 30, 2025, compared to $50.76 million for the six months ended June 30, 2024. The increase of $2.46 million, or 4.8% was driven by interest and fees on loans, which increased to $47.76 million for the six months ended June 30, 2025, from $44.72 million for the six months ended June 30, 2024. The increase in interest and fees on loans was due to an increase in the average yield on loans, as well as an increase in the average balance of loans. The average interest rate earned on loans receivable increased by 30 basis points, from 5.95% for the six months ended June 30, 2024, to 6.25% for the current period. Interest accretion on purchased loans was $779,000 for the six months ended June 30, 2025, which resulted in an eight basis point increase in net interest margin compared to $423,000 for the six months ended June 30, 2024, which resulted in a five basis point increase in net interest margin. Average balances for loans receivable, including loans held-for-sale, for the six months ended June 30, 2025 were $1.54 billion compared to $1.51 billion for the six months ended June 30, 2024. This represents an increase of $34.47 million, or 2.3% and was due to organic growth. Interest on investment securities available-for-sale decreased by $507,000 period over period, due to the decrease in average balances for investments from $310.17 million for the six months ended June 30, 2024 to $290.49 million for the six months ended June 30, 2025. In addition, average interest rates earned on investments decreased from 3.46% for the six months ended June 30, 2024, to 3.37% for the six months ended June 30, 2025.

Interest Expense. Total interest expense was $18.17 million for the six months ended June 30, 2025, compared to $19.92 million for the six months ended June 30, 2024. The decrease of $1.75 million, or 8.8% was primarily due to a net decrease of $2.05 million in interest expense on total borrowings. The decrease in interest expense on total borrowings was driven by the average balance of FHLB advances and other borrowings decreasing from $186.77 million for the six months ended June 30, 2024, to $132.30 million for the six months ended June 30, 2025. The average rate paid on FHLB advances and other borrowings also decreased from 5.50% for the six months ended June 30, 2024, to 4.70% for the six months ended June 30, 2025. The overall average rate on total deposits was down from 1.66% for the six months ended June 30, 2024, compared to 1.64% for the six months ended June 30, 2025. However, the average balance for total deposits was $1.69 billion for the six months ended June 30, 2025, compared to $1.63 billion for the six months ended June 30, 2024.

Provision for Credit Losses. Provision for credit losses was $1.08 million for the six months ended June 30, 2025, compared to $277,000 for the six months ended June 30, 2024. The increase in the provision was driven by loan growth. The provision for credit losses for the six months ended June 30, 2025, included an increase in the provision for credit losses on loans to $930,000 and an increase in the provision for unfunded commitments to $150,000.

Noninterest Income. Total noninterest income was $8.82 million for the six months ended June 30, 2025, compared to $8.22 million for the six months ended June 30, 2024. The increase of $602,000, or 7.3% was primarily due to an increase in mortgage banking, net, of $457,000 and an increase in appreciation in cash surrender value of life insurance of $135,000 due to bank owned life insurance policies purchased in 2024. Mortgage banking, net, includes net gain on sale of mortgage loans which increased to $3.43 million for the six months ended June 30, 2025, compared to $3.01 million for the six months ended June 30, 2024. During the six months ended June 30, 2025, $97.40 million residential mortgage loans were sold compared to $96.79 million in the six months ended June 30, 2024. Gross margin levels increased from 3.11% for the six months ended June 30, 2024, to 3.52% for the six months ended June 30, 2025.

Noninterest Expense. Noninterest expense was $34.93 million for the six months ended June 30, 2025, compared to $34.34 million for the six months ended June 30, 2024, an increase of $592,000 or 1.7%. Software subscriptions increased $334,000 due to implementing a new loan origination system. Occupancy and equipment expense increased $329,000 due to maintenance expense and costs related to opening a new branch. Salaries and employee benefits increased modestly by $318,000. However, contract changes led to lower data processing expense which decreased $272,000 and partially offset the increases.

Provision for Income Taxes. Provision for income taxes was $1.38 million for the six months ended June 30, 2025, compared to $814,000 for the six months ended June 30, 2024. The effective tax rate was 17.6% for the current period and 18.3% for the six months ended June 30, 2024. The effective tax rate has been impacted by an increase in the proportion of tax-exempt income compared to pretax earnings, as well as tax credits from investments in low-income housing tax credit projects.

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Table of Contents

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Liquidity and Capital Resources

Liquidity

The Bank is required by regulation to maintain sufficient levels of liquidity for safety and soundness purposes. Appropriate levels of liquidity will depend upon the types of activities in which the company engages. For internal reporting purposes, the Bank uses policy minimums of 1.0% and 8.0% for “basic surplus” and “basic surplus with FHLB” as internally defined. In general, the “basic surplus” is a calculation of the ratio of unencumbered short-term assets reduced by estimated percentages of CD maturities and other deposits that may leave the Bank in the next 90 days divided by total assets. “Basic surplus with FHLB” adds to “basic surplus” the additional borrowing capacity the Bank has with the FHLB of Des Moines. The Bank exceeded those minimum ratios as of June 30, 2025 and December 31, 2024.

The Bank’s primary sources of funds are deposits, repayment of loans and mortgage-backed securities, maturities of investments, funds provided from operations, advances from the FHLB of Des Moines and other borrowings. Scheduled repayments of loans and mortgage-backed securities and maturities of investment securities are generally predictable. However, other sources of funds, such as deposit flows and loan prepayments, can be greatly influenced by the general level of interest rates, economic conditions and competition. The Company uses liquidity resources principally to fund existing and future loan commitments. It also uses them to fund maturing certificates of deposit and demand deposit withdrawals, for investment purposes, to meet operating expenses and capital expenditures, for dividend payments and for stock repurchases to maintain adequate liquidity levels.

Liquidity may be adversely affected by unexpected deposit outflows, higher interest rates paid by competitors, and similar matters. Management monitors projected liquidity needs and determines the level desirable based in part on the Bank's commitments to make loans and management’s assessment of the Bank's ability to generate funds.

The Company's available borrowing capacity was approximately $463.00 million as of June 30, 2025 and $404.00 million as of December 31, 2024.

	June 30,				December 31,
	2025				2024
	Borrowings		Remaining Borrowing		Borrowings		Remaining Borrowing
	Outstanding		Capacity		Outstanding		Capacity
	(In Thousands)
Federal Home Loan Bank advances	$	119,407	$	338,172	$	140,930	$	276,664
Federal Reserve Bank discount window		-		24,854		-		27,349
Correspondent bank lines of credit		-		100,000		-		100,000
Total	$	119,407	$	463,026	$	140,930	$	404,013

During the first quarter of 2023, the FRB offered a new Bank Term Funding Program ("BTFP") for eligible depository institutions. The BTFP offered loans of up to one year in length to institutions pledging collateral eligible for purchase by FRB such as U.S. treasuries, agency securities, and mortgage-backed securities. These assets were valued at par. In March of 2024, the Company accessed borrowings through the BTFP. In September of 2024, the Company paid off the borrowings.

Brokered deposits are another source of funding the Bank may utilize from time to time. As of June 30, 2025, the Bank had $1.43 million in brokered certificates and $5.53 million in brokered money market deposits. As of December 31, 2024, the Bank had no brokered certificates and $5.57 million in brokered money market deposits. Policy limits for brokered deposits are set at 10% of assets.

In addition to bank level liquidity management, Eagle must manage liquidity at the parent company level for various operating needs, including the servicing of debt, the payment of dividends on our common stock, share repurchases, payment of general corporate expense, and potential capital infusions into subsidiaries. The primary source of liquidity for Eagle consists of dividends from the Bank, which is governed by certain rules and regulations of the Montana Division of Banking and Financial Institutions and the Federal Reserve, and access to capital markets. Eagle has a $15.00 million line of credit with a correspondent bank. There was no outstanding balance for this line of credit at June 30, 2025 or December 31, 2024. Eagle's ability to receive dividends from the Bank in future periods will depend on several factors, including, without limitation, the Bank's future profits, asset quality, liquidity, and overall condition. In addition, both the Montana Division of Banking and Financial Institutions and Federal Reserve may require approval to pay dividends, based on certain regulatory statutes and limitations.

Eagle presently believes that the sources of liquidity discussed above, including existing liquid funds on hand, are sufficient to meet its anticipated funding needs in the short and long term. However, if economic conditions were to significantly deteriorate, regulatory capital requirements for Eagle or the Bank were to increase as the result of regulatory directives or otherwise, or Eagle were to believe it is prudent to enhance current liquidity levels, then Eagle may seek additional liquidity from external sources.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Capital Resources

As of June 30, 2025, the Bank’s internally determined measurement of sensitivity to interest rate movements as measured by a 200-basis point rise in interest rates scenario, increased the economic value of equity (“EVE”) by 1.2% compared to an increase of 1.7% at December 31, 2024. A 200-basis point decrease in interest rates scenario decreased EVE by 6.9% compared to a decrease of 7.9% at December 31, 2024. The Bank is within the guidelines set forth by the Board of Directors for interest rate risk sensitivity in rising interest rate scenarios.

The Bank's regulatory capital was in excess of all applicable regulatory requirements and the Bank is deemed "well capitalized" pursuant to State of Montana and FRB rules as of June 30, 2025. The Bank's actual capital amounts and ratios as of June 30, 2025 are presented in the table below and all of the ratios, with the exception of the Tier 1 capital adjusted total average assets ratio, include the capital conservation buffer of 2.50%.

											Minimum
											To Be Well
						Minimum Required					Capitalized Under
						for Capital Adequacy					Prompt Corrective
	Actual					Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in Thousands)
June 30, 2025:
Total risk-based capital to risk weighted assets	$	236,129		13.51	%	$	183,457		10.50	%	$	174,721		10.00	%

Tier 1 capital to risk weighted assets		216,849		12.41			148,513		8.50			139,777		8.00

Common equity Tier 1 capital to risk weighted assets		216,849		12.41			122,305		7.00			113,569		6.50

Tier 1 capital to adjusted total average assets		216,849		10.34			83,917		4.00			104,896		5.00

											Minimum
											To Be Well
						Minimum Required					Capitalized Under
						for Capital Adequacy					Prompt Corrective
	Actual					Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in Thousands)
December 31, 2024:
Total risk-based capital to risk weighted assets	$	229,316		13.49	%	$	178,521		10.50	%	$	170,020		10.00	%

Tier 1 capital to risk weighted assets		211,066		12.41			144,517		8.50			136,016		8.00

Common equity Tier 1 capital to risk weighted assets		211,066		12.41			119,014		7.00			110,513		6.50

Tier 1 capital to adjusted total average assets		211,066		10.07			83,861		4.00			104,826		5.00

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Impact of Inflation and Changing Prices

Our condensed consolidated financial statements and the accompanying notes, which are found in Part I, Item 1, have been prepared in accordance with generally accepted accounting principles, which require the measurement of financial position and operating results in terms of historical dollars without considering the change in the relative purchasing power of money over time and due to inflation. The impact of inflation is reflected in the increased cost of our operations. Interest rates have a greater impact on our performance than do the general levels of inflation. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services.

Interest Rate Risk

Interest rate risk is the potential for loss of future earnings resulting from adverse changes in the level of interest rates. Interest rate risk results from several factors and could have a significant impact on the Company’s net interest income, which is the Company's primary source of revenue. Net interest income is affected by changes in interest rates, the relationship between rates on interest-bearing assets and liabilities, the impact of interest rate fluctuations on asset prepayments and the mix of interest-bearing assets and liabilities.

Although interest rate risk is inherent in the banking industry, banks are expected to have sound risk management practices in place to measure, monitor and control interest rate exposures. The objective of interest rate risk management is to contain the risks associated with interest rate fluctuations. The process involves identification and management of the sensitivity of net interest income to changing interest rates.

The ongoing monitoring and management of this risk is an important component of the Company’s asset/liability committee, which is governed by policies established by the Company’s Board that are reviewed and approved annually. The Board delegates responsibility for carrying out the asset/liability management policies to the Bank’s asset/liability committee. In this capacity, the asset/liability committee develops guidelines and strategies impacting the Company’s asset/liability management related activities based upon estimated market risk sensitivity, policy limits and overall market interest rate levels and trends. The Company’s goal of its asset and liability management practices is to maintain or increase the level of net interest income within an acceptable level of interest rate risk.

The Bank has established acceptable levels of interest rate risk as follows for an instantaneous and permanent shock in rates: projected net interest income over the next twelve months (i.e. year-1) will not be reduced by more than 15.0% given an immediate increase or decrease in interest rates of up to 300 basis points, and the subsequent twelve months (i.e. year-2) will not be reduced by more than 20.0% given an immediate increase or decrease in interest rates of up to 300 basis points.

The following table includes the Bank’s net interest income sensitivity analysis.


Changes in Market	Rate Sensitivity		Policy	Policy
Interest Rates	As of June 30, 2025		Limits	Limits
(Basis Points)	Year 1	Year 2	Year 1	Year 2

+300	-9.1%	2.8%	-15.0%	-20.0%
+200	-6.0%	3.8%	-15.0%	-15.0%
+100	-2.8%	5.1%	-10.0%	-10.0%
-100	1.8%	4.8%	-10.0%	-10.0%
-200	3.4%	3.2%	-15.0%	-15.0%
-300	5.9%	2.2%	-15.0%	-20.0%

Critical Accounting Policies and Estimates

The accounting and financial reporting policies of Eagle are in accordance with generally accepted accounting principles ("GAAP") and conform to the accounting and reporting guidelines prescribed by bank regulatory authorities. Eagle has identified certain of its accounting policies as “critical accounting policies,” consisting of those related to the allowance for credit losses and business combinations. In determining which accounting policies are critical in nature, Eagle has identified the policies that require significant judgment or involve complex estimates. It is management's practice to discuss critical accounting policies with the Board of Directors' Audit Committee on a periodic basis, including the development, selection, implementation, and disclosure of the critical accounting policies. The application of these policies has a significant impact on Eagle’s unaudited interim consolidated financial statements. Eagle’s financial results could differ significantly if different judgments or estimates are used in the application of these policies. All accounting policies described in "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 – Organization and Summary of Significant Accounting Policies" in Eagle’s 2024 Form 10-K should be reviewed for a greater understanding of how we record and report our financial performance. There have been no significant changes to the accounting policies, estimates, and assumptions, or the judgments affecting the application of these estimates and assumptions from those disclosed in Eagle’s 2024 Form 10-K, other than the following:

The excess of consideration paid over fair value of net assets acquired is recorded as goodwill. Goodwill is not amortized but is tested at least annually for impairment or more frequently if events occur or circumstances change that indicate impairment may exist. A goodwill impairment test is performed by comparing the fair value of the reporting unit with its carrying value. An impairment charge is recorded for the amount by which the carrying amount exceeds the reporting unit’s fair value. Estimating the fair value of the reporting unit requires the use of inputs and assumptions including projected earnings of the Company in future years for which there is inherent uncertainty.

During the quarter ended September 30, 2024, Management performed a quantitative goodwill impairment test with assistance from a third-party valuation specialist. The interim determination was primarily driven by a revision in the Company’s earnings outlook in comparison to budget. A weighted average of both the market and income approaches was used in valuing the reporting unit’s fair value. The interim goodwill impairment assessment as of August 31, 2024 concluded that goodwill was not impaired. Our quantitative annual impairment test as of October 31, 2024 also did not result in impairment. However, changing economic conditions that may adversely affect the Company's performance, the fair value of its assets and liabilities, or its stock price could result in future impairment. Any resulting impairment loss could have a material adverse impact on the Company’s financial condition and results of operations. Management will continue to monitor events that could influence this conclusion in the future.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Item 3. Quantitative and Qualitative Disclosures About Market Risk

This item has been omitted based on Eagle’s status as a smaller reporting company.

Item 4. Controls and Procedures

As of the end of the period covered by this report, we conducted an evaluation under the supervision and with the participation of our management including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”) of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to management to allow timely decisions regarding required disclosure. Based on that evaluation, our CEO and CFO concluded that as of June 30, 2025, our disclosure controls and procedures were not effective as of such date due to ongoing remediation of a material weakness in internal control over financial reporting as of December 31, 2024 described below.

We identified a material weakness in internal control over financial reporting related to the design of controls over preparation of the statement of cash flows. Specifically, the Company’s controls were not designed at a sufficient level of precision to ensure the proper classification of borrowings as short-term or long-term so that the borrowings from and repayments to were appropriately presented either on a net basis or a gross basis within the financing section of the statement of cash flows. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. The control deficiency created a reasonable possibility that a material misstatement to the consolidated financial statements would not be prevented or detected on a timely basis.

Management, with oversight from the Audit Committee, has implemented and continues to implement measures designed to ensure that the control deficiency contributing to the material weakness is remediated so that controls are designed, implemented and operating effectively. The remediation action includes restructuring the design of control activities, including consideration of system impacts, surrounding the classification of borrowing activities in order to facilitate appropriate presentation in the financial statements. We believe this action will remediate the material weakness. The weakness will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. The remediation of this material weakness is still in process.

Except as noted above, during the last quarter, there were no changes in the Company’s internal control over financial reporting that have materially affected, or were reasonably likely to materially affect, the Company’s internal control over financial reporting.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Part II - OTHER INFORMATION

Item 1.

Legal Proceedings.

Neither the Company nor the Bank is involved in any pending legal proceeding other than non-material legal proceedings occurring in the ordinary course of business.

Item 1A.

Risk Factors

There have not been any material changes in the risk factors previously disclosed in Part 1, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

On April 24, 2025, Eagle's Board of Directors (the "Board") authorized the repurchase of up to 400,000 shares of its common stock beginning May 1, 2025. Under the plan, shares may be purchased by the Company on the open market or in privately negotiated transactions. The extent to which the company repurchases its shares and the timing of such repurchase will depend on market conditions and other corporate considerations. The plan expires on May 1, 2026.

On April 18, 2024, Eagle's Board of Directors (the "Board") authorized the repurchase of up to 400,000 shares of its common stock beginning May 1, 2024 (the "2024 Repurchase Plan"). Under the 2024 Repurchase Plan, shares may be purchased by the Company on the open market or in privately negotiated transactions. The extent to which the company repurchases its shares and the timing of such repurchase will depend on market conditions and other corporate considerations. No shares were purchased during the second or third quarter of 2024 under this plan. During the fourth quarter of 2024, 25,000 shares were purchased under this plan at an average of $16.74. During the first quarter of 2025, 50,000 shares were purchased under this plan at an average price of $15.11. The following table summarized the Company's purchase of its common stock for the three months ended June 30, 2025 under this plan. The plan expired on May 1, 2025.

					Total Number		Maximum
					of Shares		Number of
					Purchased		Shares that
	Total				as Part of		May Yet Be
	Number of		Average		Publicly		Purchased
	Shares		Price Paid		Announced Plans		Under the Plans
	Purchased		Per Share		or Programs		or Programs

April 1, 2025 through April 30, 2025		25,000	$	16.34		25,000		300,000

May 1, 2025 through May 31, 2025		-		-		-		300,000

June 1, 2025 through June 30, 2025		-		-		-		300,000

Total		25,000	$	16.34		25,000

On April 20, 2023, the Board authorized the repurchase of up to 400,000 shares of its common stock beginning May 1, 2023. Under the plan, shares could be purchased by the Company on the open market or in privately negotiated transactions. The extent to which the company repurchased its shares and the timing of such repurchases depended on market conditions and other corporate considerations. During the second quarter of 2023, 17,901 shares were purchased under this plan at an average price of $12.89. No shares were purchased during the third or fourth quarter of 2023 under this plan. No shares were purchased during the first or second quarter of 2024 under this plan.

Item 3.

Defaults Upon Senior Securities.

Not applicable.

Item 4.

Mine Safety Disclosures

Not applicable.

Item 5.

Other Information.

During the three months ended June 30, 2025, none of our directors or officers (as defined in Exchange Act Rule 16a-1(f)) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Part II - OTHER INFORMATION - continued

Item 6.

Exhibits.

Exhibit Number	Description

3.1	Amended and Restated Certificate of Incorporation of Eagle Bancorp Montana, Inc. (incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K filed on February 23, 2010).

3.2	Certificate of Amendment to the Amended and Restated Certificate of Incorporation. (incorporated by reference to Exhibit 3.2 of our Quarterly Report on Form 10-Q filed on May 9, 2019).

3.3	Bylaws of Eagle Bancorp Montana, Inc., amended as of August 20, 2015 (incorporated by reference to 3.1 of our Current Report on Form 8-K filed on August 25, 2015).

10.1	2025 Stock Incentive Plan for Directors, Officers and Employees (incorporated by reference to Exhibit 10.1 of our Form S-8 Registration Statements filed on May 9, 2025)

31.1	Certification by Laura F. Clark, Chief Executive Officer, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 (a) of the Sarbanes-Oxley Act of 2002.

31.2	Certification by Miranda J. Spaulding, Chief Financial Officer, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 (a) of the Sarbanes-Oxley Act of 2002.

32.1	Certification by Laura F. Clark, Chief Executive Officer, and Miranda J. Spaulding, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)⁽¹⁾

101.SCH	Inline XBRL Taxonomy Extension Schema Document⁽¹⁾

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document⁽¹⁾

101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document⁽¹⁾

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document⁽¹⁾

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document⁽¹⁾

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

⁽¹⁾ These interactive data files shall not be deemed filed for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, or Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under those sections.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	EAGLE BANCORP MONTANA, INC.

Date: August 7, 2025	By:	/s/ Laura F. Clark
		Laura F. Clark
		President/CEO



Date: August 7, 2025	By:	/s/ Miranda J. Spaulding
		Miranda J. Spaulding
		SVP/CFO