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:

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:

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, ~~2020,~~2021, 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.

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

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

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

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

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

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

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

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See Note 2. Mergers and Acquisitions for additional information related to assets acquired and liabilities assumed in acquisitions.

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)

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.

In ~~September 2017,~~March 2021, the ~~Company entered into an Agreement~~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 ~~Plan~~rehabilitation of ~~Merger with TwinCo, Inc. ("TwinCo"),~~low-income housing. Tax credits are allowable over a ~~Montana corporation, and TwinCo’s wholly-owned subsidiary, Ruby Valley Bank, a Montana chartered commercial bank to acquire 100% of TwinCo’s equity voting interests. On~~ ~~January~~10-year period. During the year ended December 31, ~~2018,~~2021, ~~TwinCo merged with and into Eagle, with Eagle continuing as the surviving corporation. Ruby Valley Bank operated~~OHF made initial investments in two ~~branches~~LIHTC projects. Investments in ~~Madison County, Montana.~~LIHTC projects are included in other assets on the statement of financial condition and totaled $1,237,000 and $935,000 as of September 30, 2022 and December 31, 2021, respectively.

In ~~August 2018,~~ the Company entered into an Agreement and Plan of Merger with Big Muddy Bancorp, Inc. (“BMB”), a Montana corporation and BMB’s wholly-owned subsidiary, The State Bank of Townsend (“SBOT”), a Montana chartered commercial bank to acquire 100% of BMB’s equity voting interests. On ~~January 1, 2019,~~ ~~BMB merged with and into Eagle, with Eagle continuing as the surviving corporation. SBOT operated~~ ~~four~~ ~~branches in Townsend, Dutton, Denton and Choteau, Montana.~~

In ~~August 2019,~~September 2021, the Company entered into an Agreement and Plan of Merger ("Merger Agreement") with ~~Western Holding Company of Wolf Point (“WHC”~~First Community Bancorp, Inc. ("FCB"), a Montana corporation, and ~~WHC’s~~FCB's wholly-owned subsidiary, ~~Western~~First Community Bank, ~~of Wolf Point,~~ a Montana chartered commercial ~~bank (“WB”).~~bank. The Merger Agreement provided that, upon the terms and subject to the conditions set forth in the Merger Agreement, ~~WHC~~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.

On January 1, ~~2020.~~2020, ~~WB operated~~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. WFS facilitates deferred payment contracts for ~~Bank~~ customers that produce agricultural products.

The Bank currently hashas 2330 ~~full service~~ 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. The Bank also ~~operates~~operated certain branches under the names Dutton State Bank, Farmers State Bank of Denton and The State Bank of Townsend.

~~During~~ Effective ~~2021,~~January 2022, ~~the~~these branches were rebranded and are now only operating as Opportunity Bank established a subsidiary, Opportunity Housing Fund, LLC (“OHF”), to invest in Low-Income Housing Tax Credit (“LIHTC”) projects. OHF is owned 100% by OBMT. 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. During the~~ ~~three~~ ~~months ended~~ ~~September 30, 2021,~~ ~~OHF made initial investments in~~ ~~two~~ LIHTC projects. The Company has elected to apply the proportional amortization method of accounting for investments in LIHTC projects. The proportional amortization method allows the investor to amortize the cost of the investment in proportion to the tax credits and the amortization is recognized as a component of income tax expense. Investments in LIHTC projects are included in other assets on the statement of financial condition and totaled $935,000 as of ~~September 30, 2021.~~

~~The Company completed a modified "Dutch auction" tender offer (the "Tender Offer") in~~ ~~June 2021.~~ The Company accepted for purchase 250,000 shares of its common stock at a price of $24.00 per share. The aggregate purchase price for the shares purchased in the Tender Offer was approximately $6,279,000, including fees and expenses related to the Tender Offer. Therefore, the total price including fees and expenses was $25.12 per share.

~~The Company sold 251,256 shares of common stock to the Employee Stock Ownership Plan ("ESOP") at a price of $23.88 per share in~~ ~~June 2021.~~ ~~The shares were purchased from Eagle by the ESOP in exchange for a loan totaling $6,000,000. The loan has a~~ ~~ten-year term and bears interest at 3.00%. The shares held by the ESOP will be used for allocations to employees of the Company over a~~ ~~ten-year period.~~Montana.

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, ~~2020~~2021, as filed with the SEC on March ~~10, 2021.~~9, 2022. 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 nine-month period ended September 30, ~~2021~~2022 are not necessarily indicative of the results to be expected for the year ending December 31, ~~2021~~2022 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 loan losses, mortgage servicing rights, the fair value of financial instruments, the valuation of goodwill and deferred tax assets and liabilities.

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

Certain prior period amounts were reclassified to conform to the presentation for 2022. These reclassifications had no impact on net income or shareholders’ equity.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

~~Certain prior period amounts were reclassified to conform to the presentation for~~ ~~2021~~~~. These reclassifications had~~ no ~~impact on net income or shareholders’ equity.~~

~~The Company has evaluated events and transactions subsequent to~~ ~~September 30, 2021~~ ~~for recognition and/or disclosure.~~

On ~~October 1, 2021,~~ Eagle announced that it had reached an agreement to acquire First Community Bancorp, Inc., a Montana corporation (“FCB”) and its wholly-owned subsidiary, First Community Bank, a Montana chartered commercial bank. The agreement provides that, upon the terms and subject to the conditions set forth in the agreement, FCB will merge with and into Eagle, with Eagle continuing as the surviving corporation. The transaction is subject to the approvals of bank regulatory agencies, the shareholders of Eagle and FCB and other customary closing conditions. The acquisition is expected to close during the ~~fourth~~ ~~quarter of~~ ~~2021.~~

Effective ~~January 1, 2020,~~April 30, 2022 Eagle completed its previously announced merger with ~~WHC. At the effective time of the Merger, WHC merged with and into Eagle, with Eagle continuing as the surviving corporation.~~FCB. The acquisition closed after receipt of approvals from regulatory authorities, approval of ~~WHC~~FCB shareholders and the satisfaction of other closing conditions. The total consideration paid was ~~$14,967,000~~$38,577,000 and included cash consideration of ~~$6,500,000~~$10,226,000 and common stock issued of ~~$8,467,000.~~$28,351,000.

All of the assets acquired and liabilities assumed were recognized at their acquisition-date fair value, while transaction costs and restructuring costs associated with the business combinations were expensed as incurred. Determining the fair value of assets and liabilities is a complicated process involving significant ~~judgement~~judgment regarding methods and assumptions used to calculate estimated fair values. The excess of the acquisition consideration over the fair value of assets acquired and liabilities assumed, if any, is allocated to goodwill. The goodwill recorded is not deductible for federal income tax purposes.

The following table summarizes the fair values of the assets acquired and liabilities assumed, consideration paid and the resulting goodwill.

Goodwill recorded for the ~~WHC~~FCB acquisition during the three months ended ~~March 31, 2020~~June 30, 2022 was ~~$4,962,000.~~$13,942,000.

~~WHC~~FCB investments were written ~~up $425,000~~down an additional $4,559,000 to fair value on the date of acquisition based on market prices obtained from an independent third party.

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~~EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~

For acquisitions, the fair value analysis of the loan portfolios resulted in a valuation adjustment for each loan based on an amortization schedule of expected cash flow. Individual amortization schedules were used for each loan over a certain amount and those with specifically identified loss exposure. The remainder of the loans were grouped by type and risk rating into loan pools (based on loan type, fixed or variable interest rate, revolving or term payments and risk rating). Yield inputs for the amortization schedules included contractual interest rates, estimated prepayment speeds, liquidity adjustments and market yields. Credit inputs for the amortization schedules included probability of payment default, loss given default rates and individually identified loss exposure.

The total accretable discount on ~~WHC~~FCB acquired loans was ~~$1,166,000~~$5,416,000 as of ~~January 1, 2020.~~April 30, 2022. ~~During the year ended~~ ~~December 31, 2020~~~~, accretion of the loan discount was $560,000.~~ During the three and nine months ended September 30, ~~2021~~2022, accretion of the loan discount was ~~$42,000~~$333,000 and ~~$149,000, respectively. The~~$1,060,000, respectively. The remaining accretable loan discount was ~~$457,000~~$4,352,000 as of September 30, ~~2021~~2022. ~~One~~Three impaired ~~loan was~~loans were acquired through the ~~WHC~~FCB acquisition with an insignificant ~~balance~~balances as of ~~January 1, 2020.~~April 30, 2022.

Fair value adjustments ~~of $590,000 were~~ recorded for ~~WHC~~FCB related to premises and ~~equipment.~~equipment were insignificant overall. The Company used independent third party appraisals in the determination of the fair value of acquired ~~assets.~~properties.

Core deposit intangible assets of ~~$208,000~~$7,004,000 were recorded for ~~WHC~~FCB and are being amortized using an accelerated method over the estimated useful lives of the related deposits of 10 years from date of acquisition. For acquisitions, the core deposit intangible value is a function of the difference between the cost of the acquired core deposits and the alternative cost of funds. These cash flow streams were discounted to present value. The fair value of other deposit accounts acquired were valued by estimating future cash flows to be received or paid from individual or homogenous groups of assets and liabilities and then discounting those cash flows to a present value using rates of return that were available in financial markets for similar financial instruments on or near the acquisition date.

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

Direct costs related to the acquisition were expensed as incurred. ~~There were~~ 0The Company recorded acquisition costs ~~recorded~~ related to FCB of $103,000 and $2,296,000 during the ~~WHC acquisition~~three and nine months ended September 30, 2022, respectively, and $35,000 during both the three and nine months ended September 30, 2021~~. The Company recorded acquisition costs related to WHC of $157,000 during the year ended~~ ~~December 31, 2020~~. Acquisition costs included professional fees and data processing expenses incurred related to the acquisitions.

Operations of acquired entities have been included in the condensed consolidated financial statements since date of acquisition. The Company does not consider them as separate reporting segments and does not track the amount of revenues and net income attributable since acquisition. As such, it is impracticable to determine such amounts for the period from acquisition date through September 30, ~~2021~~2022.

The accompanying ~~condensed~~ consolidated statements of income include the results of operations of ~~WHC~~FCB since the April 30, 2022 acquisition date. The following table presents unaudited pro forma results of operations for the three and nine months ended September 30, 2021 as if the acquisition had occurred on January 1, ~~2020~~2021. ~~acquisition date.~~This pro forma information gives the effect to certain adjustments, including purchase accounting fair value adjustments and amortization of the core deposit intangible asset. The pro forma information does not necessarily reflect the results of operations that would have occurred had the Company purchased and assumed the assets and liabilities of FCB on January 1, 2021. Cost savings are also not reflected in the unaudited pro forma amounts for the three and nine months ended September 30, 2021.

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~~EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~

⁽¹⁾Significant assumptions utilized include the acquisition costs noted above and a 25.00% effective tax rate.

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

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

Proceeds from sale of ~~available-for-sale~~available-for sale securities and the associated ~~gross~~ realized gains and losses were as follows:

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.

As of September 30, ~~2021~~2022 and December 31, ~~2020~~2021, securities with a fair value of $~~22,259,000~~59,927,000 and ~~$19,716,000,~~$22,245,000, 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:

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3. INVESTMENT SECURITIES –– continued

	December 31, 2020										December 31, 2021
	Less Than 12 Months					12 Months or Longer					Less Than 12 Months					12 Months or Longer
			Gross					Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses			Value		Losses
	(In Thousands)										(In Thousands)
U.S. treasury obligations	$	0	$	0		$	0	$	0
U.S. government and agency obligations											$	-	$	-		$	-	$	-
U.S. Treasury obligations												19,301		(104	)		-		-
Municipal obligations		282		(1	)		0		0			17,973		(330	)		-		-
Corporate obligations		4,243		(7	)		0		0			2,982		(18	)		-		-
Mortgage-backed securities and collateralized mortgage obligations		3,180		(2	)		1,501		(5	)		50,002		(741	)		1,296		(12	)
Asset-backed securities												-		-			-		-
Total	$	7,705	$	(10	)	$	1,501	$	(5	)	$	90,258	$	(1,193	)	$	1,296	$	(12	)

Unrealized losses associated with investments are believed to be caused by changes in market interest rates or the widening of market spreads subsequent to the initial purchase of the securities and not due to concerns regarding the underlying credit of the issuers or the underlying collateral. The Company does not intend to sell the securities, and it is not likely to be required to sell these securities prior to maturity. Based on the Company's evaluation of these securities, 0no other-than-temporary impairment was recorded for the three months ended September 30, 2022 and 2021, respectively or the nine months ended September 30, 2022 and 2021, ~~or the year ended~~ ~~December 31, 2020~~.respectively. As of September 30, ~~2021~~2022 and December 31, ~~2020~~2021, there were, respectively, 25400 and 843 securities in unrealized loss positions that were considered to be temporarily impaired and therefore an impairment charge has not been recorded.

NOTE 4. LOANS RECEIVABLE

Loans receivable consisted of the following:

	September 30,			December 31,			September 30,			December 31,
	2021			2020			2022			2021
	(In Thousands)						(In Thousands)
Real estate loans:
Residential 1-4 family	$	142,921		$	157,092		$	195,265		$	146,815
Commercial real estate		522,953			447,867			781,843			569,976

Other loans:
Home equity		52,990			56,563			67,409			51,748
Consumer		18,940			20,168			27,703			18,455
Commercial		149,199			161,451			241,608			147,870

Total		887,003			843,141			1,313,828			934,864

Deferred loan fees, net		(2,098	)		(2,038	)		(1,674	)		(1,725	)
Allowance for loan losses		(12,200	)		(11,600	)		(13,850	)		(12,500	)
Total loans, net	$	872,705		$	829,503		$	1,298,304		$	920,639

~~Within~~Included in the ~~commercial real estate loan category~~ above ~~$10,459,000 and $11,084,000 was~~are loans guaranteed by ~~the United States Department of Agriculture Rural Development~~U.S. government agencies totaling $26,983,000 and $25,730,000 at September 30, ~~2021~~2022 and December 31, ~~2020~~2021, respectively. ~~Also within the loan categories above, $5,644,000 and $6,533,000 was guaranteed by the United States Department of Agriculture Farm Service Agency at~~ ~~September 30, 2021~~ ~~and~~ ~~December 31, 2020~~, respectively. In addition, within the commercial loan category above, $8,464,000 and $29,581,000 was guaranteed by the Small Business Administration ("SBA") under their Payroll Protection Program ("PPP") at ~~September 30, 2021~~ ~~and~~ ~~December 31, 2020~~~~, respectively. Deferred loan fees, net includes $605,000 and $613,000 of remaining deferred fees related to the PPP at~~ ~~September 30, 2021~~ ~~and~~ ~~December 31, 2020~~~~, respectively.~~

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 4. LOANS RECEIVABLE – continued

Allowance for loan losses activity was as follows:

	Residential		Commercial			Home											Residential		Commercial		Home
	1-4 Family		Real Estate			Equity		Consumer			Commercial			Total			1-4 Family		Real Estate		Equity			Consumer			Commercial			Total
	(In Thousands)																(In Thousands)
Allowance for loan losses:
Beginning Balance, July 1, 2021	$	1,544	$	7,127		$	522	$	363		$	2,344		$	11,900
Beginning balance, July 1, 2022																	$	1,643	$	8,337	$	507		$	361		$	2,477		$	13,325
Charge-offs		0		0			0		(4	)		0			(4	)		-		-		-			(6	)		-			(6	)
Recoveries		0		6			0		1			42			49			-		6		-			3			5			14
Provision		26		155			8		3			63			255			17		400		1			1			98			517
Ending balance, September 30, 2021	$	1,570	$	7,288		$	530	$	363		$	2,449		$	12,200
Ending balance, September 30, 2022																	$	1,660	$	8,743	$	508		$	359		$	2,580		$	13,850

Allowance for loan losses:
Beginning balance, January 1, 2021	$	1,506	$	6,951		$	515	$	364		$	2,264		$	11,600
Beginning balance, January 1, 2022																	$	1,596	$	7,470	$	533		$	365		$	2,536		$	12,500
Charge-offs		0		(35	)		0		(14	)		(6	)		(55	)		-		-		(32	)		(14	)		(299	)		(345	)
Recoveries		0		15			0		7			57			79			-		20		-			4			17			41
Provision		64		357			15		6			134			576			64		1,253		7			4			326			1,654
Ending balance, September 30, 2021	$	1,570	$	7,288		$	530	$	363		$	2,449		$	12,200
Ending balance, September 30, 2022																	$	1,660	$	8,743	$	508		$	359		$	2,580		$	13,850

Ending balance, September 30, 2021 allocated to loans individually evaluated for impairment	$	199	$	0		$	0	$	0		$	109		$	308
Ending balance, September 30, 2022 allocated to loans individually evaluated for impairment																	$	199	$	-	$	-		$	-		$	79		$	278

Ending balance, September 30, 2021 allocated to loans collectively evaluated for impairment	$	1,371	$	7,288		$	530	$	363		$	2,340		$	11,892
Ending balance, September 30, 2022 allocated to loans collectively evaluated for impairment																	$	1,461	$	8,743	$	508		$	359		$	2,501		$	13,572

Loans receivable:
Ending balance, September 30, 2021	$	142,921	$	522,953		$	52,990	$	18,940		$	149,199		$	887,003
Ending balance, September 30, 2022																	$	195,265	$	781,843	$	67,409		$	27,703		$	241,608		$	1,313,828

Ending balance, September 30, 2021 of loans individually evaluated for impairment	$	1,122	$	4,341		$	121	$	78		$	2,111		$	7,773
Ending balance, September 30, 2022 of loans individually evaluated for impairment																	$	687	$	1,173	$	97		$	34		$	1,655		$	3,646

Ending balance, September 30, 2021 of loans collectively evaluated for impairment	$	141,799	$	518,612		$	52,869	$	18,862		$	147,088		$	879,230
Ending balance, September 30, 2022 of loans collectively evaluated for impairment																	$	194,578	$	780,670	$	67,312		$	27,669		$	239,953		$	1,310,182

	Residential		Commercial			Home											Residential		Commercial			Home
	1-4 Family		Real Estate			Equity		Consumer			Commercial			Total			1-4 Family		Real Estate			Equity		Consumer			Commercial			Total
	(In Thousands)																(In Thousands)
Allowance for loan losses:
Beginning balance, July 1, 2020	$	1,369	$	6,096		$	491	$	371		$	2,173		$	10,500
Beginning balance, July 1, 2021																	$	1,544	$	7,127		$	522	$	363		$	2,344		$	11,900
Charge-offs		0		0			0		(14	)		(67	)		(81	)		-		-			-		(4	)		-			(4	)
Recoveries		0		2			0		2			23			27			-		6			-		1			42			49
Provision		92		623			13		9			117			854			26		155			8		3			63			255
Ending balance, September 30, 2020	$	1,461	$	6,721		$	504	$	368		$	2,246		$	11,300
Ending balance, September 30, 2021																	$	1,570	$	7,288		$	530	$	363		$	2,449		$	12,200

Allowance for loan losses:
Beginning balance, January 1, 2020	$	1,301	$	4,826		$	477	$	284		$	1,712		$	8,600
Beginning balance, January 1, 2021																	$	1,506	$	6,951		$	515	$	364		$	2,264		$	11,600
Charge-offs		0		(18	)		0		(25	)		(85	)		(128	)		-		(35	)		-		(14	)		(6	)		(55	)
Recoveries		0		10			0		13			54			77			-		15			-		7			57			79
Provision		160		1,903			27		96			565			2,751			64		357			15		6			134			576
Ending balance, September 30, 2020	$	1,461	$	6,721		$	504	$	368		$	2,246		$	11,300
Ending balance, September 30, 2021																	$	1,570	$	7,288		$	530	$	363		$	2,449		$	12,200

Ending balance, September 30, 2020 allocated to loans individually evaluated for impairment	$	296	$	0		$	0	$	0		$	0		$	296
Ending balance, September 30, 2021 allocated to loans individually evaluated for impairment																	$	199	$	-		$	-	$	-		$	109		$	308

Ending balance, September 30, 2020 allocated to loans collectively evaluated for impairment	$	1,165	$	6,721		$	504	$	368		$	2,246		$	11,004
Ending balance, September 30, 2021 allocated to loans collectively evaluated for impairment																	$	1,371	$	7,288		$	530	$	363		$	2,340		$	11,892

Loans receivable:
Ending balance, September 30, 2020	$	152,835	$	432,473		$	61,460	$	20,694		$	183,611		$	851,073
Ending balance, September 30, 2021																	$	142,921	$	522,953		$	52,990	$	18,940		$	149,199		$	887,003

Ending balance, September 30, 2020 of loans individually evaluated for impairment	$	1,128	$	3,998		$	115	$	163		$	2,118		$	7,522
Ending balance, September 30, 2021 of loans individually evaluated for impairment																	$	1,122	$	4,341		$	121	$	78		$	2,111		$	7,773

Ending balance, September 30, 2020 of loans collectively evaluated for impairment	$	151,707	$	428,475		$	61,345	$	20,531		$	181,493		$	843,551
Ending balance, September 30, 2021 of loans collectively evaluated for impairment																	$	141,799	$	518,612		$	52,869	$	18,862		$	147,088		$	879,230

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 4. LOANS RECEIVABLE – continued

Internal classification of the loan portfolio was as follows:

	September 30, 2021												September 30, 2022
			Special												Special
	Pass		Mention		Substandard		Doubtful		Loss		Total		Pass		Mention		Substandard		Doubtful		Loss		Total
	(In Thousands)												(In Thousands)
Real estate loans:
Residential 1-4 family	$	98,560	$	219	$	469	$	199	$	0	$	99,447	$	136,505	$	519	$	575	$	199	$	-	$	137,798
Residential 1-4 family construction		43,137		0		337		0		0		43,474		57,467		-		-		-		-		57,467
Commercial real estate		374,699		3,200		2,172		0		0		380,071		491,965		12,954		1,797		-		-		506,716
Commercial construction and development		78,058		0		0		0		0		78,058		144,247		1,053		-		-		-		145,300
Farmland		62,410		276		2,091		47		0		64,824		125,169		2,450		2,208		-		-		129,827
Other loans:
Home equity		52,559		264		167		0		0		52,990		67,295		-		114		-		-		67,409
Consumer		18,861		0		79		0		0		18,940		27,653		2		48		-		-		27,703
Commercial		94,057		954		543		0		0		95,554		129,004		1,113		850		8		-		130,975
Agricultural		51,691		387		1,512		55		0		53,645		107,536		610		2,378		109		-		110,633
Total	$	874,032	$	5,300	$	7,370	$	301	$	0	$	887,003	$	1,286,841	$	18,701	$	7,970	$	316	$	-	$	1,313,828

	December 31, 2020												December 31, 2021
			Special												Special
	Pass		Mention		Substandard		Doubtful		Loss		Total		Pass		Mention		Substandard		Doubtful		Loss		Total
	(In Thousands)												(In Thousands)
Real estate loans:
Residential 1-4 family	$	109,746	$	0	$	857		199	$	0	$	110,802	$	100,680	$	-	$	301		199	$	-	$	101,180
Residential 1-4 family construction		45,953		0		337		0		0		46,290		45,298		-		337		-		-		45,635
Commercial real estate		311,756		2,568		2,344		0		0		316,668		406,896		1,527		2,145		-		-		410,568
Commercial construction and development		65,231		14		36		0		0		65,281		92,403		-		-		-		-		92,403
Farmland		63,565		136		2,164		53		0		65,918		65,037		177		1,744		47		-		67,005
Other loans:
Home equity		56,177		274		112		0		0		56,563		51,614		-		134		-		-		51,748
Consumer		20,017		0		151		0		0		20,168		18,392		-		63		-		-		18,455
Commercial		107,810		829		570		0		0		109,209		100,881		130		524		-		-		101,535
Agricultural		50,371		355		1,395		121		0		52,242		44,550		332		1,444		9		-		46,335
Total	$	830,626	$	4,176	$	7,966	$	373	$	0	$	843,141	$	925,751	$	2,166	$	6,692	$	255	$	-	$	934,864

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~~EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~

~~NOTE~~ 4.~~LOANS RECEIVABLE~~ ~~– continued~~

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

	September 30, 2021												September 30, 2022
	Loans Past Due and Still Accruing												Loans Past Due and Still Accruing
			90 Days												90 Days
	30-89 Days		and				Nonaccrual		Current		Total		30-89 Days		and				Nonaccrual		Current		Total
	Past Due		Greater		Total		Loans		Loans		Loans		Past Due		Greater		Total		Loans		Loans		Loans
	(In Thousands)												(In Thousands)
Real estate loans:
Residential 1-4 family	$	2	$	0	$	2	$	785	$	98,660	$	99,447	$	452	$	-	$	452	$	687	$	136,659	$	137,798
Residential 1-4 family construction		0		0		0		337		43,137		43,474		149		-		149		-		57,318		57,467
Commercial real estate		241		0		241		507		379,323		380,071		76		-		76		403		506,237		506,716
Commercial construction and development		0		0		0		0		78,058		78,058		109		-		109		-		145,191		145,300
Farmland		38		0		38		2,273		62,513		64,824		31		-		31		770		129,026		129,827
Other loans:
Home equity		0		0		0		121		52,869		52,990		62		-		62		97		67,250		67,409
Consumer		67		0		67		78		18,795		18,940		121		-		121		34		27,548		27,703
Commercial		31		34		65		534		94,955		95,554		324		874		1,198		68		129,709		130,975
Agricultural		0		0		0		1,498		52,147		53,645		35		-		35		1,587		109,011		110,633
Total	$	379	$	34	$	413	$	6,133	$	880,457	$	887,003	$	1,359	$	874	$	2,233	$	3,646	$	1,307,949	$	1,313,828

December 31, 2020

Loans Past Due and Still Accruing

90 Days

30-89 Days

and

Nonaccrual

Current

Total

Past Due

Greater

Total

Loans

Loans

Loans

(In Thousands)

Real estate loans:

Residential 1-4 family
$ 693 $ 34 $ 727 $ 684 $ 109,391 $ 110,802
Residential 1-4 family construction
853 170 1,023 337 44,930 46,290
Commercial real estate
274 0 274 631 315,763 316,668
Commercial construction and development
0 0 0 36 65,245 65,281
Farmland
179 0 179 2,245 63,494 65,918
Other loans:

Home equity
53 0 53 111 56,399 56,563
Consumer
72 0 72 151 19,945 20,168
Commercial
553 �� 6 559 537 108,113 109,209
Agricultural
71 182 253 1,542 50,447 52,242
Total
$ 2,748 $ 392 $ 3,140 $ 6,274 $ 833,727 $ 843,141

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 4. LOANS RECEIVABLE – continued

	December 31, 2021
	Loans Past Due and Still Accruing
			90 Days
	30-89 Days		and				Nonaccrual		Current		Total
	Past Due		Greater		Total		Loans		Loans		Loans
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	21	$	-	$	21	$	616	$	100,543	$	101,180
Residential 1-4 family construction		-		-		-		337		45,298		45,635
Commercial real estate		788		-		788		497		409,283		410,568
Commercial construction and development		-		-		-		-		92,403		92,403
Farmland		61		-		61		1,630		65,314		67,005
Other loans:
Home equity		-		-		-		115		51,633		51,748
Consumer		55		-		55		62		18,338		18,455
Commercial		6		-		6		516		101,013		101,535
Agricultural		-		-		-		1,718		44,617		46,335
Total	$	931	$	-	$	931	$	5,491	$	928,442	$	934,864

The following tables include information regarding impaired loans.

	September 30, 2022
			Unpaid
	Recorded		Principal		Related
	Investment		Balance		Allowance
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	687	$	785	$	199
Residential 1-4 family construction		-		-		-
Commercial real estate		403		486		-
Commercial construction and development		-		-		-
Farmland		770		868		-
Other loans:
Home equity		97		122		-
Consumer		34		40		-
Commercial		68		124		-
Agricultural		1,587		1,686		79
Total	$	3,646	$	4,111	$	278

	December 31, 2021
			Unpaid
	Recorded		Principal		Related
	Investment		Balance		Allowance
	(In Thousands)
Real estate loans:
Residential 1-4 family	$	616	$	703	$	199
Residential 1-4 family construction		337		387		-
Commercial real estate		2,024		2,078		-
Commercial construction and development		-		-		-
Farmland		1,630		1,721		-
Other loans:
Home equity		115		139		-
Consumer		62		73		-
Commercial		516		639		101
Agricultural		1,759		1,862		300
Total	$	7,059	$	7,602	$	600

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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~~EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~

Interest income recognized on impaired loans for the three and nine months ended September 30, ~~2021~~2022 and ~~2020~~2021 is considered insignificant. Interest payments received on a cash basis related to impaired loans were $~~407,000~~406,000 and $~~327,000~~405,000 ~~for~~at September 30, ~~2021~~2022 and December 31, ~~2020~~2021, respectively.

As of September 30, ~~2021~~2022 and December 31, ~~2020~~2021, there were troubled debt restructured (“TDR”) loans of ~~$2,116,000~~$1,112,000 and ~~$1,824,000,~~$2,224,000, respectively.

During the three months ended September 30, 2022, there werenonew TDR loans. During the nine months ended September 30, 2022, there were two new TDR loans.The recorded investments for both agricultural loans at the time of restructure were $331,000 and $145,000. No charge-offs were incurred and the loans are on nonaccrual status.

During the three months ended September 30, 2021, there were two new TDR loans. The recorded investments for both farmland loans at the time of restructure were $391,000 and $70,000. ~~NaN~~No charge-offs were incurred and the loans are on nonaccrual status. During the nine months ended September 30, 2021, there were three new TDR loans. The recorded investments for the two farmland loans at time of restructure as stated above were $391,000 and $70,000. The recorded investment for the commercial real estate loan at time of restructure during the first quarter of 2021 was ~~$115,000~~.$115,000. The commercial real estate loan was paid off during the ~~three~~ ~~months ended~~ ~~September 30, 2021.~~

~~During the~~ ~~three~~nine months ended September 30, ~~2020~~2021~~, there were 0 new TDR loans. During~~.

There were no loans modified as TDR's that defaulted during the three months ended September 30, 2022. There were two farmland loans modified as TDRs that defaulted during the nine months ended September 30, ~~2020~~~~, there were~~ ~~three~~ new TDR loans. The recorded investments at the time of restructure were $94,000 for a commercial construction and development loan, $1,633,000 for a commercial real estate loan, and $160,000 for an agricultural loan. The commercial construction and development loan was paid off during the ~~nine~~ ~~months ended~~ ~~September 30, 2021~~~~. NaN charge-offs were incurred for the remaining loans and they are on accrual status. The recorded investments for the remaining loans at~~ ~~September 30, 2021~~ ~~were $1,561,000 and $79,000, respectively.~~

~~There were 0 loans modified as TDRs that defaulted during the~~ ~~three~~ ~~and~~ ~~nine~~ ~~months ended~~ ~~September 30, 2021~~2022 where the default occurred within 12 months of restructuring. A default for purposes of this disclosure is a TDR loan in which the borrower is 90 days past due or results in the foreclosure and repossession of the applicable collateral. The recorded investments for the farmland loans were $374,000 and $70,000at September 30, 2022 and the Company has initiated foreclosure on these loans.

As of September 30, ~~2021~~2022, the Company had 0no commitments to lend additional funds to loan customers whose terms had been modified in TDRs.

~~The Company has offered borrowers accommodations due to the impact from COVID-~~~~19,~~ ~~including~~ 90~~-day deferrals, interest only payments and forbearances, which are~~ ~~not~~ ~~considered TDRs as they met the criteria established in the Coronavirus Aid, Relief, and Economic~~ ~~Security Act ("CARES Act"). In addition, the Montana Board of Investments ("MBOI") offered~~ 12~~-months of interest payment assistance to qualified borrowers. As of~~ ~~September 30, 2021~~~~, remaining loan modifications for~~ ~~five~~ ~~nonresidential borrowers represented $98,000 in loans. As~~ of ~~December 31, 2020~~~~, loan modifications for 40 borrowers represented $28,994,000.~~

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~~EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~

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 ~~$1,748,096,000~~$1,992,699,000 and ~~$1,473,971,000~~$1,835,561,000 at September 30, ~~2021~~2022 and December 31, ~~2020~~2021, 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 ~~$1,060,000~~$1,225,000 and ~~$815,000~~$1,060,000 for the three months ended September 30, ~~2021~~2022 and ~~2020~~2021, respectively. Mortgage loan servicing fees ~~were~~were $3,581,000 and $2,984,000 ~~and $2,320,000~~ for the nine months ended September 30, ~~2021~~2022 and ~~2020~~2021~~.These~~, 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 ~~$20,947,000~~$18,000,000 and ~~$15,853,000~~$11,613,000 at September 30, ~~2021~~2022 and December 31, ~~2020~~2021, respectively.

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

Impairment expense on mortgage servicing rights was recorded during the year ended December 31, 2020 as a result of ~~$878,000~~increased prepayment speed assumptions. Recoveries of $14,000 and $702,000 were recorded during the three and nine months ended September 30, 2021, respectively. There was no recovery or impairment recorded during the three months ended September 30, 2022. However, a recovery of $56,000 was recorded during the nine months ended September 30, ~~2020,~~ 2022~~as a result of faster than expected prepayment speed assumptions. However, a recovery of $702,000 was recorded during the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2021.~~ ~~In addition, recoveries of $14,000 and $338,000 were recorded for the~~ ~~three~~ ~~months ended~~ ~~September 30, 2021~~ ~~and~~ ~~2020~~~~, respectively.~~. Recovery (impairment) of servicing rights is included in other noninterest expense on the condensed consolidated statements of income.

The fair values of these rights were ~~$13,666,000~~$19,303,000 and ~~$10,105,000~~$14,686,000 at September 30, ~~2021~~2022 and December 31, ~~2020~~2021, respectively. The fair value of servicing rights was determined at loan level, depending on the interest rate and term of the specific loan, using the following valuation assumptions:

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

~~Time certificates of deposit ("CDs") include~~$0 ~~and $495,000 related to fixed rate brokered CDs at~~ ~~September 30, 2021~~ ~~and~~ ~~December 31, 2020~~.

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. A portion of the net proceeds were used to redeem the $10,000,000 senior notes due in February 2022.

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 ~~will~~ 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 ~~Secured Overnight Financing Rate ("SOFR")~~SOFR plus a spread of 509.0 basis points, payable quarterly. 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 February 2017, the Company completed the issuance, through a private placement, of $10,000,000 aggregate principal amount of 5.75% fixed senior unsecured notes due in 2022. The interest ~~will be~~was paid semi-annually through maturity date. The notes ~~are~~were not subject to redemption at the option of the Company.

In ~~June 2015,~~ ~~the Company completed the issuance of $10,000,000 in aggregate principal amount of subordinated notes due in~~ ~~2025~~ ~~in a private placement transaction to an institutional accredited investor. The notes had an annual fixed interest rate of~~ ~~6.75%~~ ~~and interest was paid quarterly through redemption. The notes were subject to redemption at the option of the Company on or after~~ ~~June 19, 2020.~~ The notes were redeemed on ~~July 10, 2020.~~February 15, 2022.

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 ~~1.55%~~5.17% and ~~1.66%~~1.63% as of September 30, ~~2021~~2022 and December 31, ~~2020~~2021, respectively. 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)

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

There were 0no anti-dilutive shares at September 30, ~~2021~~2022 and December 31, ~~2020~~2021.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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.

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 gains of $209,000 and $373,000 were recorded for the three months ended September 30, 2022 and 2021, ~~compared to net gains of $2,961,000 for the~~ ~~three~~ ~~months ended~~ ~~September 30, 2020~~. respectively. Net losses ofof $282,000 and $1,953,000 were recorded for the nine months ended September 30, 2022 and 2021 ~~compared to net gains of $6,363,000 for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2020~~.

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.

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.

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 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.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Impaired Loans – Impaired loans are reported at the fair value of the underlying collateral if repayment is expected solely from the collateral or using a discounted cash flow if the loan is not collateral dependent. 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.

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~~EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~

~~NOTE~~ ~~11.~~ ~~FAIR VALUE OF FINANCIAL INSTRUMENTS~~ ~~– continued~~

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.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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:

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.

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 nine months ended September 30, ~~2021~~2022..

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

In ~~August 2018,~~ ~~the FASB issued ASU~~ ~~No.~~~~2018~~-~~13,~~ ~~Fair Value Measurement (Topic~~ ~~820~~~~) to remove disclosure requirements that~~ no longer are considered cost beneficial, modify/clarify specific requirements of certain disclosures and add disclosure requirements identified as relevant. The amendment became effective for the Company on ~~January 1, 2020~~ ~~and did~~ ~~not~~ ~~have a significant impact on the condensed consolidated financial statements.~~

In September 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The standard requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. The standard also requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. Additionally, the standard amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration.

In October 2019, the FASB amended the effective date of the standard. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. An entity will apply the amendments in this update through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach).

In February 2022, the FASB issued ASU No.2022-02, an update to ASU No.2016-13. The amendments in the update eliminate TDR recognition and measurement guidance. Instead, entities must evaluate whether the modification represents a new loan or a continuation of an existing loan. Existing disclosure requirements are enhanced and the new requirements are introduced related to certain modifications of receivables made to borrowers experiencing financial difficulty. In addition, for public business entities, the amendments in the update require that entities disclose current-period gross write-offs by year of origination for financing receivables. This information must be included in the vintage disclosures, which require an entity to disclose the amortized cost basis of financing receivables by credit-quality indicator and class of financing receivable by year of origination.

The Company believes the amendments in ~~this update~~these updates will have an impact on the Company’s condensed consolidated financial statements and is continuing to evaluate the significance of that ~~impact, even though the adoption date has been deferred.~~impact. In that regard, we have established a working group composed of individuals from the finance and credit administration areas of the Company. We have developed a current expected credit loss model and are ~~currently developing an implementation plan, including assessment of processes, segmentation of the loan portfolio and identifying and adding data fields necessary for analysis. The adoption of~~utilizing this ~~standard is likely to result in an increase in the~~model concurrently with our existing allowance for loan ~~and lease losses as a result of changing from an “incurred loss”~~loss model ~~to an “expected loss” model.~~during 2022. While we currently cannot reasonably estimate the impact of adopting this standard, we expect the impact will be influenced by the composition, characteristics and quality of our loan and securities portfolios, as well as the general economic conditions and forecasts as of the adoption date.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350) to amend and simplify current goodwill impairment testing to eliminate Step 2 from the current provisions. Under the new guidance, an entity should perform the goodwill impairment test by comparing the fair value of a reporting unit with its carrying value and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if a quantitative impairment test is necessary. The guidance is effective for the Company on January 1, 2023 and adoption of the standard is being evaluated to assess the impact on the Company’s condensed consolidated financial statements.

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 SOFR. The guidance was effective upon issuance and generally can be applied through December 31, 2022. The Company is currently evaluating this guidance to determine the date of adoption and the potential impact. 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, 2022. ASU No.2021-01 has not had and is not expected to have a significant impact on the Company's consolidated financial statements.

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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

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 nine months ended September 30, 2022, as compared to 2021. The following should be read in conjunction with the Company's Consolidated Financial Statements, and accompanying Notes thereto, for the year ended December 31, 2021, included in Eagle's Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (SEC) on March 9, 2022, and in conjunction with the Condensed Consolidated Financial Statements, and accompanying Notes thereto, included in Part I - Item 1. Financial Statements. The results of operations for the three and nine months ended September 30, 2022, are not necessarily indicative of the future results that may be attained for the entire year or other interim periods.

The Company’s primary business activity is the ownership of its wholly owned subsidiary, Opportunity Bank of Montana (the “Bank”). The Bank is a Montana chartered commercial bank that focuses on both consumer and commercial lending. It engages in typical banking activities: acquiring deposits from local markets and originating loans and investing in securities. The Bank’s primary component of earnings is its net interest margin (also called spread or margin), the difference between interest income and interest expense. The net interest margin is managed by management (through the pricing of its products and by the types of products offered and kept in portfolio), and is affected by changes in market interest rates. The Bank also generates noninterest income in the form of fee income and gain on sale of loans.

The Bank has a strong mortgage lending focus, with a large portion of its loan originations represented by single-family residential mortgages, which has enabled it 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 also focused on adding commercial loans to its portfolio, both real estate and non-real estate. We have made significant progress in this initiative. The purpose of this diversification is to mitigate the Bank’s dependence on the residential mortgage market, as well as to improve our ability to manage our interest rate spread. Recent acquisitions have added to our agricultural loans, which generally have shorter maturities and nominally higher interest rates. 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 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 the strategy is funding the growth of the statement of financial condition in an efficient manner. Though deposit growth has been steady, it may become more difficult to maintain due to significant competition 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 ~~changed~~held the federal funds target rate ~~from 1.75% to~~at 0.25% during the year ended December 31, ~~2020.~~2021. The rate ~~remained at 0.25% during~~increased to 3.25% during the nine months ended September 30, ~~2021. The rate reductions add continued pressure on loan yields.~~2022.

During 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. During the three months endedOn September 30, 2021, ~~OHF made initial investments~~the Company entered into an Agreement and Plan of Merger 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 transaction closed on April 30, 2022. In the transaction, Eagle acquired nine retail bank branches and two ~~LIHTC projects. Investments~~loan production offices in ~~LIHTC projects are~~Montana. The total consideration paid was $38.58 million and included ~~in other assets on the statement~~cash consideration of ~~financial condition~~$10.23 million and ~~totaled $935,000 as of September 30, 2021.~~

~~The Company completed a modified "Dutch auction" tender offer (the "Tender Offer") in June 2021. The Company accepted for purchase 250,000 shares of its~~ common stock ~~at a price~~issued of $24.00 per share. The aggregate purchase price for the shares purchased in the Tender Offer was approximately $6.28 million, including fees and expenses related to the Tender Offer. Therefore, the total price including fees and expenses was $25.12 per share.

The Company sold 251,256 shares of common stock to the Employee Stock Ownership Plan ("ESOP") at a price of $23.88 per share in June 2021. The shares were purchased from Eagle by the ESOP in exchange for a loan totaling $6.00 million. The loan has a ten-year term and bears interest at 3.00%. The shares held by the ESOP will be used for allocations to employees of the Company over a ten-year period.

The Company’s performance for the third quarter of 2021 extended the momentum from the previous quarters of 2021, generating solid earnings supported by net interest income growth and higher loan production. However, the Company continues to see the impact of the COVID-19 pandemic and its consequences on our Montana communities. The Bank remains focused on supporting our customers, communities and employees while prudently managing risk. The Bank is also still closely monitoring borrowers and businesses serviced and is pro$28.35 mi~~viding debt service relief for those that have been impacted.~~llion.

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

~~On March 27, 2020, Congress passed the~~ ~~Coronavirus Aid~~, Relief, and Economic Security Act (“CARES Act”) providing economic relief for the country, including the $349 billion Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) to fund short-term loans for small businesses. In April 2020, additional funding was approved for the PPP. Eagle began taking loan applications from its small business clients immediately after the program was implemented, and as of the close of the program, had helped 764 borrowers receive $45.71 million in SBA PPP loans. ~~The Bank has processed applications for PPP loan forgiveness for customers, with~~ ~~748 loans representing $45.21 million now paid in full. The remaining 16 PPP loans represent $496,000.~~

On December 27, 2020, the Consolidated Appropriations Act (“CAA”) was signed into law, providing new COVID-19 stimulus relief, and it included $284 billion allocated for another round of PPP lending, extending the program to March 31, 2021. On March 31, 2021, the program was extended to May 31, 2021. The program offered new PPP loans for companies that did not receive a PPP loan in 2020, and also “second draw” loans targeted at hard-hit businesses that have already spent their initial PPP proceeds. As of the close of the program, ~~Eagle supported 646 borrowers in receiving $19.51 million in new PPP funding. The Bank has processed applications for PPP loan forgiveness for customers, with~~ ~~389 loans representing $11.26 million now paid in full. The remaining 257 PPP loans represent $8.25 million.~~

While all industries have and may continue to experience adverse impacts as a result of the COVID-19 pandemic, we had exposures in the following impacted industries, as a percentage of gross loans excluding loans held-for-sale and PPP loans as of September 30, 2021: hotels and lodging (5.4%), health and social assistance (3.8%), bars and restaurants (2.8%), casinos (0.9%) and nursing homes (0.5%). The Bank continues to reach out to specific borrowers to assess the risks and understand their needs.

The Bank has offered multiple accommodation options to its clients, including 90-day deferrals, forbearances and interest only payments. In addition, the Montana Board of Investments ("MBOI") offered 12-months of interest payment assistance to qualified borrowers. As of September 30, 2021, remaining ~~loan modifications for five~~ ~~nonresidential borrowers represented $98,000 in loans, or 0.01% of gross loans excluding loans held-for-sale,~~ compared to 40 borrowers representing $29.00 million, or 3.5% of gross loans excluding loans held-for-sale, as of December 31, 2020. The Bank qualified approximately 32 borrowers for the MBOI program representing $27.25 million in loans, of which all have aged out of the program as of September 30, 2021. Only one loan in the hotel and lodging industry was approved in the MBOI loan program and was considered a troubled debt restructured (“TDR”) loan as of December 31, 2020, prior to aging out of the program. No other loans that had been modified related to COVID-19 were reported as TDR’s due to the CARES Act exemption. As of September 30, 2021, there remain approximately 11 forbearances approved for residential mortgage loans, of which all are sold and serviced. Utilization of credit lines were 76.4% at September 30, 2021 compared to 82.7% at December 31, 2020, which has declined slightly compared with historical usage rates.

Our fee income could still be reduced due to COVID-19. In keeping with guidance from regulators, we are actively working with COVID-19 affected customers to waive fees from a variety of sources, such as, but not limited to, insufficient funds and overdraft fees, early withdrawal fees, ATM fees, account maintenance fees, etc. These reductions in fees are thought, at this time, to be temporary in conjunction with the length of the expected COVID-19 related economic crisis. At this time, we are unable to project the materiality of such an impact, but recognize the breadth of the economic impact is likely to impact our fee income in future periods.

As of September 30, 2021, our capital ratios were in excess of all regulatory requirements. While we believe that we have sufficient capital to withstand an extended economic recession brought about by COVID-19, our reported and regulatory capital ratios could be adversely impacted by further credit losses. We rely on cash on hand as well as dividends from our subsidiary Bank to service our debt. If our capital deteriorates such that our subsidiary Bank is unable to pay dividends to us for an extended period of time, we may not be able to service our debt.

While certain valuation assumptions and judgments will change to account for pandemic-related circumstances such as widening credit spreads, we do not anticipate significant changes in methodology used to determine the fair value of assets measured in accordance with GAAP.

As of December 31, 2020, our goodwill was not impaired. COVID-19 could cause a decline in our stock price or the occurrence of what management would deem to be a triggering event that could, under certain circumstances, cause us to perform a goodwill impairment test and result in an impairment charge being recorded for that period. In the event that we conclude that all or a portion of our goodwill is impaired, a noncash charge for the amount of such impairment would be recorded to earnings. Such a charge would have no impact on tangible capital or regulatory capital. As of September 30, 2021 ~~we had goodwill of~~ ~~$20.80~~ ~~million.~~

The State of Montana ended their phased approach to reopening and lifted the state-wide mask mandate on February 12, 2021. On March 22, 2021, all of our lobbies opened while still requiring everyone to practice necessary safeguards. As of May 7, 2021, masks were no longer required for the Bank's branches, customers or vendors. The Company remains committed to assisting our customers and communities as the vaccine rollout continues and COVID-19 restrictions lift in Montana. Management is encouraging its employees to receive the COVID-19 vaccine.

The Bank has used growth through mergers or acquisition in addition to its strategy of organic growth. In January 2020, Eagle 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. In the transaction, Eagle acquired one retail bank branch in Wolf Point, Montana.

On October 1, 2021, Eagle announced that it had reached an agreement to acquire First Community Bancorp, Inc., a Montana corporation (“FCB”) and its wholly-owned subsidiary, First Community Bank, a Montana chartered commercial bank. The agreement provides that, upon the terms and subject to the conditions set forth in the agreement, FCB will merge with and into Eagle, with Eagle continuing as the surviving corporation. Upon completion of the transaction, Eagle will have an additional $374 million of assets, $307 million of deposits and $220 million in gross loans, based on June 30, 2021 information. Headquartered in Glasgow, Montana, FCB currently operates nine branches and two mortgage loan production offices. The transaction is subject to the approvals of bank regulatory agencies, the shareholders of Eagle and FCB and other customary closing conditions. The acquisition is expected to close during the fourth quarter of 2021.

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~~EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES~~

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

Comparisons of financial condition in this section are between September 30, ~~2021~~2022 and December 31, ~~2020.~~2021.

Total assets were ~~$1.41~~$1.92 billion at September 30, ~~2021,~~2022, an increase of $487.99 million, or 34.0% from $1.44 ~~increase~~ o~~f $149.29 million, or~~ ~~11.9% from $1.26~~ billion at December 31, ~~2020.~~2021 S~~ecurities available-for-sale increased~~ ~~by $77.08 million from December 31, 2020. Loans receivable, net~~ ~~increased~~ ~~by $43.21million from December 31, 2020.~~ ~~In addition, interest-bearing deposits in banks increased $23.88 million from December 31, 2020. Total liabilities were $1.25 billion at September 30, 2021, an~~ ~~increase of $145.70 million, or 13.2%,~~ ~~from $1.10 billion at December 31, 2020.~~. The increase was largely due to the change in loans receivable and securities available-for-sale which were impacted by the acquisition of FCB in April 2022. Loans receivable, net increased by $377.66 million from December 31, 2021. Securities available-for-sale increased by $80.69 million from December 31, 2021. Total liabilities were $1.77 billion at September 30, 2022, an increase of $493.45 million, or 38.6%, from $1.28 billion at December 31, 2021. The increase was mainly due to an increase in deposits ~~partially offset~~which was also impacted by ~~a reduction in FHLB advances and other borrowings.~~ the FCB acquisition. Total ~~deposi~~tsdeposits increased ~~by $161.47~~$451.70 million from December 31, ~~2020. However, FHLB advances~~2021 and ~~other~~total borrowings ~~decreased~~ ~~$12.07~~increased $39.78 million from December 31, ~~2020.~~2021. Total shareholders’ equity~~increased~~ b~~y $3.58~~ decreased $5.46 million or ~~2.3% fr~~3.5% from om December 31, ~~2020.~~2021.

Securities available-for-sale were ~~$240.03~~$351.95 million at September 30, ~~2021, a~~n2022, an increaseof ~~$77.08~~$80.69 million, or ~~47.3%~~29.7%, from ~~$162.95~~$271.26 million at December 31, ~~2020.~~ 2021. Securities were impacted by the FCB acquisition, which included acquired securities of $126.12 million. Excluding securities acquired, securities decreased by $45.43 million. The ~~increase~~decrease was ~~largely driven by purchase activity~~primarily due to ~~excess liquidity levels.~~unrealized losses at September 30, 2022 caused by recent increases in interest rates. In addition, the decrease was impacted by sales and maturity, principal payments and call activity, which were largely offset by purchases. Immediately following the acquisition, a restructure of FCB's portfolio was incurred to better align the acquired portfolio with Eagle's investment strategy.

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

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

Loans receivable, netnet increased ~~$43.21~~$377.66 million, or ~~5.2%~~41.0%, to ~~$872.71 million~~$1.30 billion at September 30, ~~2021~~2022 from ~~$829.50~~$920.64 million at December 31, ~~2020.~~2021. The increase was impacted by ~~an increase in~~the FCB acquisition, which included $190.89 million of acquired loans. Excluding acquired loans, loans receivable, net increased by $186.77 million. Including acquired loans, total commercial real estate ~~loans of~~ ~~$75.08 million.~~ ~~However, this was partially offset by decreases in~~loans increased $211.86 million, total commercial loans increased $93.74 million, total residential loans of ~~$14.17~~ ~~million, total commercial loans~~ of ~~$12.25~~increased $48.45 million, home equity loans ~~of $3.57~~increased $15.66 million, andand consumer loans ~~of $1.23~~increased $9.24 million.

Total loan originations were ~~$1.15 billion~~$880.15 million for the nine months ended September 30, ~~2021.~~2022. Total residential 1-4 family originations were ~~$877.07~~$521.14 million, which includes ~~$814.86~~$449.01 million of loans held-for-sale originations. Total commercial real estate originations were ~~$175.99~~$236.51 million. Total commercial originations were ~~$77.12 million which includes $19.51 million of SBA PPP loans.~~ $84.72 million. Home equity loan originations totaled ~~$16.57~~$26.19 million. Consumer loan originations totaled ~~$6.63~~$11.59 million. Loans ~~held-for-sal~~eheld-for-sale decreased by ~~$12.56~~$1.41 million to ~~$42.06~~$24.41 million at September 30, ~~2021~~2022 from ~~$54.62~~$25.82 million at December 31, ~~2020.~~2021.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

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 loan losses. Subsequent write-downs are recorded as a charge to operations. As of September 30, ~~2021~~2022 there was ~~$117,000~~ no real estate owned and other repossessed property. As of December 31, 2021, there was $4,000 of real estate owned and other repossessed property. A~~s of December 31, 2020, there was $25,000 of real estate owned and other repossessed property.~~

The State of Montana placed a freeze on foreclosures on March 28, 2020. Subsequently it released the freeze effective May 24, 2020 with the exception of continued protection for those individuals deemed vulnerable to the coronavirus. The Federal foreclosure moratorium that began March 18, 2020 was extended to June 30, 202~~1. However, the Bank has had minimal impact due to foreclosures affected by these freezes.~~

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~~EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES~~

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

Nonaccrual loans as of September 30, ~~2021~~2022 and December 31, ~~2020~~2021 include ~~$782,000 and $1.28 million,~~$603,000 and $492,000, respectively of acquired loans that deteriorated subsequent to the acquisition date.

As of September 30, 2021, loan modifications for five borrowers represented $98,000 in loans compared to 40 borrowers representing $29.00 million as of December 31, 2020. As of September 30, 2021 there are approximately 11 forbearances remaining for residential mortgage loans, of which 11 are sold and serviced.

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~~Deposits~~Deposits increased by ~~$161.47 million,~~$451.70 million, or ~~15.6%~~ 36.9%, to ~~$1.19~~$1.67 billion at September 30, ~~2021~~2022 from ~~$1.03~~$1.22 billion at December 31, ~~2020. Money marke~~2021t. The increase was impacted by the FCB acquisition. Excluding acquired deposits, total deposits increased by ~~$59.46~~$107.74 million. Including acquired deposits, noninterest checking increased by $138.18 million, ~~noninterest checki~~ngmoney market increased by ~~$48.74~~$121.18 million, ~~interest-bearing checking increased~~ ~~by $37.52 million, and savings increased~~ by ~~$34.03 million. However, certificates of deposit decreased by $18.27 million.~~ ~~The decrease in time~~ certificates of deposit ~~was driven~~increased by ~~a decrease in other certificates of~~$82.25 million, savings increased by $61.24 million, and interest-bearing checking increased by $~~18.69~~48.85 million. ~~Due to the continued low interest rate environment, some depositors have been compelled to move funds from other certificates to non-maturity deposits upon maturity.~~

Total borrowings ~~decreased~~increased by ~~$12.01~~ $39.78 million, or ~~25.6%~~114.1% to ~~$34.85 million~~$74.65 million at September 30, ~~2021~~2022 from ~~$46.86~~$34.87 million at ~~December~~December 31, ~~2020.~~2021. This ~~decrease~~increase is largely due to ~~a decrease~~an increase in other long-term debt of $29.18 million which primarily resulted from the issuance of $40.00 million of subordinated notes, slightly offset by the redemption of $10.00 million of senior notes. In addition, FHLB advances and other borrowings of ~~$12.07~~increased $10.60 million ~~due~~ to ~~maturities.~~ $15.60 million at September 30, 2022 compared to $5.00 million at December 31, 2021.

Total shareholders’ ~~equit~~equ~~y increased slightly~~ity decreased by ~~$3.58~~ $5.46 million, or ~~2.3%~~3.5%, to ~~$156.52 million~~$151.27 million at September 30, ~~2021~~2022 from ~~$152.94~~$156.73 million at December 31, ~~2020~~2021. The ~~increase~~decrease was ~~impacted by net income of $12.69 million. This increase was partially offset~~largely due to ~~treasury stock purchased through the tender offer for $6.28 million, dividends paid of $2.17 million and~~an increase in other comprehensive loss of ~~$1.35~~$34.37 million related to unrealized losses on securities available-for-sale. These unrealized losses were a result of increased interest rates. The decrease was largely offset by an increase of stock issued in connection with the FCB acquisition of $28.35 million.

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

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.

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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 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.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

Results of Operations for the Three Months Ended September 30, ~~2021~~2022 and ~~2020~~2021

Net Income. Eagle’s net income for the three months ended September 30, ~~2021~~2022 was ~~$4.75~~$3.09 million compared to ~~$6.38~~$4.75 million for the three months ended September 30, ~~2020.~~2021. The decrease of ~~$1.63~~$1.66 million was ~~largely~~ due to a decrease in noninterest income of $5.93 million and an increase in noninterest expense of ~~$2.45 million and a decrease in noninterest income of $1.62~~$1.86 million. These ~~changes~~decreases were ~~partially~~largely offset by an increase in net interest income after loan loss provision of ~~$1.86 million and a decrease in provision for income taxes of $587,000.~~$5.59 million. Basic and diluted earnings per share were both ~~$0.73~~$0.40 for the current period. Basic and diluted earnings per share were both ~~$0.94~~$0.73 for the prior year comparable period.

Net Interest Income. Net interest ~~inco~~meincome increased t~~o $12.03~~to $17.89 million for the three months ended September 30, ~~2021,~~2022, from ~~$10.78~~$12.03 million for the same quarter in the prior ~~year~~.year. The increase of ~~$1.25~~$5.86 million, or ~~11.6%~~48.7%, was primarily the result of ~~a decrease in interest expense of $785,000 and~~ an increase in interest and dividend income of ~~$468,000.~~$6.53 million.

Interest and Dividend Income. Interest and dividend income was $19.34 million for the three months ended September 30, 2022 compared to $12.81 million for the three months ended September 30, ~~2021 compared~~2021. Interest and fees on loans increased to ~~$12.34~~$16.67 million for the three months ended September 30, ~~2020. Interest and fees on loans increased slightly to~~2022 from $11.62 million for the three months ended September 30, ~~2021 from $11.34 million for the three months ended September 30, 2020.~~2021. This increase of ~~$279,000,~~$5.05 million, or ~~2.5%~~43.5%, was ~~largely~~ due to an increase in the average balance of loans, ~~for~~as well as an increase in the ~~quarter ended September 30, 2021.~~average yield on loans. Average balances for loans receivable, including loans held-for-sale, for the three months ended September 30, ~~2021~~2022 were ~~$926.75 million,~~$1.30 billion, compared to ~~$902.54~~$926.75 million for the prior year period. This represents an increase of ~~$24.21~~$374.61 million, or ~~2.7%~~40.4%. The increase was impacted by the FCB acquisition and organic loan growth. The average interest rate earned on loans receivable ~~decreased slightly~~also increased by 111 basis ~~point,~~points, from ~~4.98%~~4.97% for the three months ended September 30, ~~2020~~2021 to ~~4.97%~~5.08% for the current period. Interest accretion on purchased loans was $392,000 for the three months ended September 30, 2022 which resulted in a 9 basis point increase in net interest margin compared to $94,000 for the three months ended September 30, 2021 which resulted in a 3 basis point increase in net interest ~~margin compared to $468,000~~margin. The Small Business Administration’s Payroll Protection Program (“PPP”) fee income on loans was $27,000 for the three months ended September 30, ~~2020~~2022, which resulted in a 171 basis point increase in net interest margin compared to $701,000 for the three months ended September 30, 2021, which resulted in a 23 basis point increase in net interest margin. Interest on investment securities available-for-sale increased by ~~$220,000, or 25.2%~~$1.47 million period over period. Average balances for investments increased to $378.68 million for the three months ended September 30, 2022 from $233.88 million for the three months ended September 30, ~~2021,~~2021. The increase in average investment balances was largely driven by the FCB acquisition. Average interest rates earned on investments also increased to 2.68% for the three months ended September 30, 2022 from ~~$163.10~~1.86% for the three months ended September 30, 2021.

Interest Expense. Total interest expense was $1.46 million for the three months ended September 30, ~~2020. Investments have increased in the current period due~~2022 compared to ~~excess liquidity. However, average interest rates earned on investments decreased to 1.86% for the three months ended September 30, 2021 from 2.13% for the three months ended September 30, 2020.~~

~~Interest Expense.~~ ~~Total interest expense was~~ $776,000 for the three months ended September 30, ~~2021 compared~~2021. The increase of $679,000, or 87.5%, was largely due to ~~$1.56 million~~an increase of $367,000 in interest expense on deposits, as well as a net increase of $312,000 in interest expense on total borrowings. The average balance for total deposits was $1.66 billion for the three months ended September 30, ~~2020.~~2022 compared to $1.16 for the three months ended September 30, 2021. The ~~decrease of $785,000, or 50.3%,~~increase in average deposits balances was ~~due to a decrease in interest expense on deposits of $429,000, as well as a net decrease in interest expense on total borrowings of $356,000. The~~impacted by the FCB acquisition. In addition, the overall average rate on total deposits was up from 0.12% for the three months ended September 30, 2021 compared to ~~0.32%~~0.17% for the three months ended September 30, 2020. However, the average balance for total deposits was $1.16 billion for three months ended September 30, 2021 compared to $971.04 million for the three months ended September 30, 2020. Deposit balances have been impacted by PPP funding and economic stimulus. Due to the continued low interest rate environment though, some depositors have moved funds from certificates of deposit to other non-maturity deposit accounts that earn lower yields.2022. The average balance for total borrowings ~~decreased~~increased from ~~$108.43 million for the three months ended September 30, 2020 to~~ $38.02 million for the three months ended September 30, 2021 to $69.87 million for the three months ended September 30, 2022. The increase was impacted by the issuance of $40.00 million of subordinated notes in January 2022. A portion of the net proceeds were used to redeem $10.00 million of senior notes due ~~to increased liquidity levels.~~in February 2022. However, the average rate paid on total borrowings ~~increased~~decreased from ~~2.86% for the three months ended September 30, 2020, to~~ 4.45% for the three months ended September 30, ~~2021.~~2021, to 4.19% for the three months ended September 30, 2022. The ~~increase~~decrease in the average rate paid is due to the change in the mix of the outstanding borrowings.

~~Loan Loss Provision~~. Loan loss provisions are charged to earnings to maintain the total allowance for loan losses at a level considered adequate by the Bank to provide for probable loan losses based on prior loss experience, volume and type of lending we conduct and past due loans in portfolio. The Bank’s policies require the review of assets on a quarterly basis. The Bank classifies loans if warranted. While management believes it uses the best information available to make a determination with respect to the allowance for loan losses, it recognizes that future adjustments may be necessary. Using this methodology, the Bank recorded ~~$255,000~~ in loan loss provisions for the three months ended September 30, 2021. Management made the decision that due to the strength of the local economy, in conjunction with loan activity, no additional loan loss provision was necessary in the three months ended September 30, 2021 when considering the COVID-19 pandemic. Loan loss provisions were $854,000 for the three months ended September 30, 2020, which included $404,000 related to the potential impact of Covid-19. Management believes the level of total allowances is adequate to cover estimated losses inherent in the portfolio. However, if the economic forecast worsens relative to the assumptions we utilized, our allowance for credit losses will increase accordingly in future periods.

~~Noninterest Income.~~ ~~Total noninterest income was $13.35 million for the three months ended September 30, 2021, compared to $14.97 million for the three months ended September 30, 2020. The~~ decrease of $1.62 million was primarily driven by a decrease in mortgage banking, net of $1.64 million. Mortgage banking, net includes net gain on sale of mortgage loans which increased $402,000 compared to the same period in the prior year. During the three months ended September 30, 2021, $270.84 million residential mortgage loans were sold compared to $266.76 million in the same period in the prior year. Mortgage banking, net also includes the impact of changes in fair value of loans held-for-sale and derivatives. The net change in fair value of loans held-for-sale and derivatives was a loss of $35,000 for the three months ended September 30, 2021 compared to a gain of $2.24 million for the same period in the prior year.

~~Noninterest Expense.~~ Noninterest expense was $18.80 million for the three months ended September 30, 2021 compared to $16.35 million for the three months ended September 30, 2020. The increase of $2.45 million, or 15.0%, was impacted by an increase in salaries and employee benefits expense of $937,000 due to increased staff levels.

~~Provision for Income Taxes~~. Provision for income taxes was $1.58 million for the three months ended September 30, 2021, compared to $2.17 million for the three months ended September 30, 2020 due to decreased income before provision for income taxes. The effective tax rate for the three months ended September 30, 2021 was 25.0% compared to 25.4% for the three months ended September 30, 2020.

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~~EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES~~

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

~~Results of Operations for the Nine Months Ended~~ ~~September 30, 2021 and 2020~~

~~Net Income.~~ ~~Eagle’s net income for the~~ ~~nine months ended September 30, 2021~~ ~~was~~ ~~$12.69~~ ~~million compared to~~ ~~$16.04~~ ~~million for the~~ ~~nine months ended September 30, 2020. The~~ decrease of $3.35 million was impacted by an increase in noninterest expense of $10.72 million. This increase was partially offset by an increase in net interest income after loan loss provision of $4.99 million, an increase in noninterest income of $1.08 million and decrease in provision for income taxes of $1.30 million. Basic and diluted earnings per share were $1.90 and $1.89 for the current period, respectively. Basic earnings per share was $2.36 and diluted earnings per share was $2.35 for the prior period.

~~Net Interest Income.~~ Net interest income increased to $34.50 million for the nine months ended September 30, 2021, from $31.68 million for the same period in the prior year. The increase of $2.82 million, or 8.9%, was primarily the result of a decrease in interest expense of $2.99 million.

~~Interest and Dividend Income.~~ Interest and dividend income was $36.93 million for the nine months ended September 30, 2021, compared to $37.10 million for the nine months ended September 30, 2020, a decrease of $170,000. Interest and fees on loans decreased to $33.66 million for the nine months ended September 30, 2021 from $33.83 million for the nine months ended September 30, 2020. This slight decrease of $172,000, or 0.5%, was due to a decrease in the average yield of loans, largely offset by an increase in the average balance of loans. The average interest rate earned on loans receivable decreased by 21 basis points, from 5.18% to 4.97%. Interest accretion on purchased loans was $408,000 for the nine months ended September 30, 2021 which resulted in a 4 basis point increase in net interest margin compared to $1.38 million for the nine months ended September 30, 2020 which resulted in a 17 basis point increase in net interest margin. Average balances for loans receivable, including loans held-for-sale, for the nine months ended September 30, 2021 were $905.48 million, compared to $870.11 million for the prior year period. This represents an increase of $35.37 million, or 4.1% and was impacted by organic growth and PPP funding. Interest on investment securities available-for-sale increased by $136,000, or 4.8% period over period. Average balances for investments increased to $200.39 million for the nine months ended September 30, 2021, from $168.17 million for the nine months ended September 30, 2020. Investments have increased in the current period due to excess liquidity. However, average interest rates earned on investments decreased to 1.99% for the nine months ended September 30, 2021 from 2.26% for the nine months ended September 30, 2020.

~~Interest Expense.~~ Total interest expense was $2.44 million for the nine months ended September 30, 2021 compared to $5.43 million for the nine months ended September 30, 2020. The decrease of $2.99 million, or 55.1%, was due to a decrease of $1.94 million in interest expense on deposits and a net decrease of $1.05 million in interest expense on total borrowings. The overall average rate on total deposits was 0.13% for the nine months ended September 30, 2021 compared to 0.44% for the nine months ended September 30, 2020. However, the average balance for total deposits was $1.11 billion for nine months ended September 30, 2021 compared to $931.04 million for the nine months ended September 30, 2020. This increase was impacted by PPP funding and economic stimulus. Due to the continued low interest rate environment though, some depositors have moved funds from certificates of deposit to other non-maturity deposit accounts that earn lower yields. The average balance for total borrowings decreased from $115.86 million for the nine months ended September 30, 2020 to $40.70 million for the nine months ended September 30, 2021. However, the average rate paid on total borrowings increased from 2.72% for the nine months ended September 30, 2020, to 4.34% for the nine months ended September 30, 2021. The increase in the average rate paid is due to the change in the mix of the outstanding borrowings.

Loan Loss Provision. Loan loss provisions are charged to earnings to maintain the total allowance for loan losses at a level considered adequate by the Bank to provide for probable loan losses based on prior loss experience, volume and type of lending we conduct and past due loans in portfolio. The Bank’s policies require the review of assets on a quarterly basis. The Bank classifies loans if warranted. While management believes it uses the best information available to make a determination with respect to the allowance for loan losses, it recognizes that future adjustments may be necessary. ~~Using this methodology, the~~The Bank recorded ~~$576,000~~$517,000 in loan loss provisions for the ~~nine~~three months ended September 30, 2022 and $255,000 for the three months ended September 30, 2021. ~~Management made~~The increase in the ~~decision that due to the strength of the local economy, in conjunction with loan credit quality, no additional~~ loan loss provision was necessary in the nine months ended September 30, 2021 when considering the COVID-19 pandemic. Loan loss provisions were $2.75 million for the nine months ended September 30, 2020, which included $1.40 millionprimarily related to ~~the potential impact of COVID-19.~~loan growth. Management believes the level of total allowances is adequate to cover estimated losses inherent in the portfolio. However, if the economic ~~outlook~~forecast worsens relative to the assumptions we utilized, additional provisions will be necessary in future periods in order to increase our allowance for loan losses will increase accordingly in future periods. Total nonperforming loans, including restructured loans, net, was $7.81 million at September 30, 2021 compared to $8.47 million at December 31, 2020. The Bank had $117,000 in other real estate owned and other repossessed assets at September 30, 2021 compared to $25,000 at December 31, 2020.credit losses.

Noninterest Income. Total noninterest income was ~~$38.05~~$7.42 million for the ~~nine~~three months ended September 30, ~~2021,~~2022 compared to ~~$36.97~~$13.35 million for the ~~nine~~three months ended September 30, ~~2020.~~2021. The ~~increase~~decrease of ~~$1.08~~$5.93 million ~~or 2.9%, is largely due to an increase~~was primarily driven by a decrease in mortgage banking, net of ~~$1.76 million for the nine months ended September 30, 2021.~~$7.22 million. Mortgage banking, net includes net gain on sale of mortgage loans which ~~increased $11.83~~decreased $7.31 million ~~compared~~ to $4.19 million for the ~~same period in the prior year. During the nine~~three months ended September 30, ~~2021, $823.41~~2022 compared to $11.50 million for the three months ended September 30, 2021. This change reflects a mortgage market that is returning to more normal levels after record levels were reached in 2021. During the three months ended September 30, 2022, $121.26 million residential mortgage loans were sold compared to ~~$621.11~~$270.84 million in the same period in the prior year. In addition, gross margin on sale of mortgage loans for the three months ended September 30, 2022 was 3.46% compared to 4.25% for the three months ended September 30, 2021. The decrease in mortgage banking, net was slightly offset by an increase of $979,000 in other noninterest income which was $1.59 million for the three months ended September 30, 2022, compared to $608,000 for the three months ended September 30, 2021. Other noninterest income includes $1.17 million for the three months ended September 30, 2022, compared to $361,000 for the three months ended September 30, 2021 related to commodity sales income from Eagle's subsidiary, Western Financial Services ("WFS"). WFS facilitates deferred payment contracts for customers that produce agricultural products.

Noninterest Expense. Noninterest expense was $20.66 million for the three months ended September 30, 2022 compared to $18.80 million for the three months ended September 30, 2021, an increase of $1.86 million or 9.9%. The increase was largely impacted by an increase in other noninterest expense of $1.48 million incurred during the three months ended September 30, 2022. The commodity sales income for WFS mentioned above has a corresponding sales expense included in other noninterest expense of $1.17 million and $361,000 for the three months ended September 2022 and 2021, respectively. The increase in noninterest was partially offset by a decrease in salaries and employee benefits expense due to lower commissions paid on residential mortgage originations.

Provision for Income Taxes. Provision for income taxes was $1.03 million for the three months ended September 30, 2022, compared to $1.58 million for the three months ended September 30, 2021 due to decreased income before provision for income taxes. The effective tax rate was 25.0% for both the current and prior period.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

Net Income. Eagle’s net income for the nine months ended September 30, 2022 was $7.08 million compared to $12.69 million for the nine months ended September 30, 2021. The decrease of $5.61 million was primarily due to a decrease in noninterest income of $15.00 million. This decrease was largely offset by an increase in net interest income after loan loss provision of $10.13 million. Basic and diluted earnings per share were both $0.98 for the current period. Basic and diluted earnings per share were $1.90 and $1.89 for the prior year comparable period, respectively.

Net Interest Income. Net interest income increased to $45.70 million for the nine months ended September 30, 2022, from $34.50 million for the same period in the prior year. The increase of $11.20 million, or 32.50%, was primarily the result of an increase in interest and dividend income of $12.23 million.

Interest and Dividend Income. Interest and dividend income was $49.16 million for the nine months ended September 30, 2022 compared to $36.93 million for the nine months ended September 30, 2021. Interest and fees on loans increased to $42.93 million for the nine months ended September 30, 2022 from $33.66 million for the nine months ended September 30, 2021. This increase of $9.27 million, or 27.5%, was due to an increase in the average balance of loans. Average balances for loans receivable, including loans held-for-sale, for the nine months ended September 30, 2022 were $1.14 billion, compared to $905.48 million for the prior year period. This represents an increase of $238.98 million, or 26.4%. The increase was impacted by the FCB acquisition, as well as organic loan growth. The average interest rate earned on loans receivable increased 5 basis points, from 4.97% for the nine months ended September 30, 2021 to 5.02% for the current period. Interest accretion on purchased loans was $1.29 million for the nine months ended September 30, 2022 which resulted in a 11 basis point increase in net interest margin compared to $408,000 for the nine months ended September 30, 2021 which resulted in a 4 basis point increase in net interest margin. PPP fee income on loans was $283,000 for the nine months ended September 30, 2022, which resulted in a 3 basis point increase in net interest margin compared to $1.67 million for the nine months ended September 30, 2021 which resulted in a 19 basis point increase in net interest margin. Interest on investment securities available-for-sale increased by $2.87 million period over period. Average balances for investments increased to $332.95 million for the nine months ended September 30, 2022, from $200.39 million for the nine months ended September 30, 2021. The increase in average investment balances was largely driven by the FCB acquisition. Average interest rates earned on investments also increased to 2.35% for the nine months ended September 30, 2022 from 1.99% for the nine months ended September 30, 2021.

Interest Expense. Total interest expense was $3.46 million for the nine months ended September 30, 2022 compared to $2.44 million for the nine months ended September 30, 2021. The increase of $1.02 million, or 41.8%, was due to a net increase of $692,000 in interest expense on total borrowings. The average balance for total borrowings increased from $40.70 million for the nine months ended September 30, 2021 to $68.01 million for the nine months ended September 30, 2022. The increase was impacted by the issuance of $40.00 million of subordinated notes in January 2022. A portion of the net proceeds were used to redeem $10.00 million of senior notes due in February 2022. However, the average rate paid on total borrowings decreased from 4.34% for the nine months ended September 30, 2021, to 3.96% for the nine months ended September 30, 2022. The decrease in the average rate paid was due to the change in the mix of the outstanding borrowings. Interest expense on deposits increased $333,000, or 29.8% compared to prior year period. The average balance for total deposits was $1.47 billion for the nine months ended September 30, 2022 compared to $1.11 billion for the nine months ended September 30, 2021. The increase in avaerage deposit balances was impacted by the FCB acquisition. The overall average rate on total deposits was 0.13% for both the current and prior period.

Noninterest Income. Total noninterest income was $23.05 million for the nine months ended September 30, 2022 compared to $38.05 million for the nine months ended September 30, 2021. The decrease of $15.00 million was primarily driven by a decrease in mortgage banking, net of $17.18 million. Mortgage banking, net includes net gain on sale of mortgage loans which decreased $20.61 million to $15.65 million for the nine months ended September 30, 2022 compared to $36.26 million for the nine months ended September 30, 2021. This change reflects a mortgage market that is returning to more normal levels after record levels were reached in 2021. During the nine months ended September 30, 2022, $443.92 million residential mortgage loans were sold compared to $823.41 million in the same period in the prior year. In addition, gross margin on sale of mortgage loans for the nine months ended September 30, ~~2021~~2022 was ~~4.40%~~3.52% compared to ~~3.93%~~4.40% for the nine months ended September 30, ~~2020. Mortgage~~2021. There has been some margin compression due to increased competition. The decrease in mortgage banking, net ~~also includes the impact~~was slightly offset by an increase of ~~changes fair value of loans held-for-sale and derivatives. The net change~~$1.44 million in ~~fair value of loans held-for-sale and derivatives was a loss of $3.00~~other noninterest income to $3.24 million for the nine months ended September 30, ~~2021~~2022, compared to ~~a gain of $7.32~~$1.8 million for the ~~same period in~~nine months ended September 30, 2021. Other noninterest income includes WFS commodity sales income of $2.13 million for the nine months ended September 30, 2022, compared to $962,000 for the prior ~~year. The prior period also included a gain on sale of available-for-sale securities of $1.07 million compared to $11,000 in the current~~ period.

Noninterest Expense. Noninterest expense was $57.66 million for the nine months ended September 30, 2022 compared to $55.05 million for the nine months ended September 30, 2021, a slight increase of $2.61 million or 4.7%. The increase was impacted by an increase in other noninterest expense of $2.32 million. The commodity sales income in other noninterest income has a corresponding sales expense included in other noninterest expense of $2.13 million and $962,000 for the nine months ended September 30, 2022 and 2021, respectively. In addition, $2.30 million of acquisition costs were incurred during the nine months ended September 30, 2022 compared to ~~$44.33~~$35,000 for the same period in the prior period. These increases were largely offset by a decrease in salaries and employee benefits due to lower commissions paid on residential mortgage originations.

Provision for Income Taxes. Provision for income taxes was $2.36 million for the nine months ended September 30, ~~2020. Th~~e ~~increase of $10.72 million, or 24.2%, was largely driven by increased salaries and employee benefits expense of $8.82 million. The increase in salaries expense is due in part~~2022, compared to higher commission-based compensation related to mortgage loan growth, as well as overall increased staff levels. In addition, occupancy and equipment expense increased $1.07 million due to office expansion and the corresponding depreciation and amortization expense, as well as utilization and maintenance costs.

~~Provision for Income Taxes.~~ ~~Provision for income taxes was~~ $4.23 million for the nine months ended September 30, 2021 ~~compared~~due to ~~$5.53 million for the nine months ended September 30, 2020 due t~~o decreased income before provision for income taxes. The effective tax rate ~~for the nine months ended September 30, 2021~~ was 25.0% ~~compared to 25.6%~~ for both the ~~nine months ended September 30, 2020.~~current and prior period.

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

The Bank is required by regulation to maintain ~~minimum~~sufficient levels of ~~liquid assets as defined by the Montana Division of Banking and FRB regulations. The~~ liquidity ~~requirement is retained~~ for safety and soundness ~~purposes, and that appropriate~~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 ratiosas of September 30, ~~2021~~2022 and December 31, ~~2020.~~2021.

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. In addition, during the year ended December 31, 2021, the Company established a $10.00 million line of credit with a correspondent bank. 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 ~~Bank~~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. In addition, the Bank uses liquidity resources~~withdrawals, for investment purposes, to meet operating expenses and capital expenditures, for dividend payments and stock repurchases and 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 ~~Eagle’s~~the Bank's commitments to make loans and management’s assessment of ~~Eagle’s~~the Bank's ability to generate funds.

Through the nine months ended September 30, ~~2021~~,2022, liquidity levels have remained ~~strong, as~~strong. The Company completed a ~~result of PPP loan payoffs and deposit growth.~~$40.00 million subordinated debt offering in January 2022. A portion of the ~~excess funds was deployed into investment securities.~~ net proceeds were used to repay at maturity the $10.00 million of senior notes due in February 2022.

As of September 30, ~~2021,~~2022, 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 ~~25.6% compared~~5.20% compared to an increase of ~~15.0%~~8.90% at December 31, ~~2020.~~2021. 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~~Company's and 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 September 30, ~~2021.~~2022. The Company's and the Bank's ~~Tier I leverage ratio decreased slightly from 11.72% as of December 31, 2020 to~~ ~~11.25%~~actual capital amounts and ratios as of September 30, ~~2021, compared to a regulatory requirement~~2022 are presented in the table below and all of ~~4.00%. The Bank’s total capital, Tier 1 capital and common equity Tier 1 capital leverage ratios were 15.83%, 14.65% and 14.65%~~, ~~respectively, compared to regulatory requirements of 10.50%, 8.50% and 7.00%, respectively. All of these~~the ratios, with the exception of the Tier 1 ~~leverage~~capital adjusted total average assets ratio, include the capital conservation buffer of 2.50%. ~~The Bank’s capital position helps to mitigate its interest rate risk exposure.~~

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

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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

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 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~~Company's primary source of ~~net income.~~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 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. Our asset and liability policy and strategies are expected to continue as described so long as competitive and regulatory conditions in the financial institution industry and market interest rates continue as they have in recent years.

The Bank has established acceptable levels of interest rate risk as follows for an instantaneous and permanent shock in rates: ~~Projected~~projected net interest income over the next twelve months (i.e. year-1) and the subsequent twelve months (i.e. year-2) will not be reduced by more than 15.0% given an immediate increase or decrease in interest rates of up to 200 basis points or by more than 10.0% given an immediate increase or decrease in interest rates of up to 100 basis points.

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

- 3938 -

Table of Contents

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

Quantitative and Qualitative Disclosures About Market Risk

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

- 4039 -

Table of Contents

EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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 September 30, ~~2021,~~2022, our disclosure controls and procedures were effective. 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.

- 4140 -

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

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.

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, ~~2020~~2021 and any subsequently filed Quarterly Reports on Form 10-Q.

The Company sold 251,256 shares of common stock to the Employee Stock Ownership Plan at a price of $23.88 per share on June 23, 2021 pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Exchange Act of 1934, as amended. The shares were purchased from Eagle by the ESOP in exchange for a loan totaling $6.00 million. The loan has a ten-year term and bears interest at 3.00%.

On July 22, 2021, Eagle's Board authorized the repurchase of up to 100,000 shares of its common stock. 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 repurchases its shares and the timing of such repurchase will depend upon market conditions and other corporate considerations. ~~However, no~~No shares were purchased during the third or fourth quarter of 2021. However, during the first quarter of 2022, the Company repurchased the total authorized amount of 100,000 shares at an average price of $22.71 per share. The plan ~~expires~~expired on July 22, 2022.

On July 23, 2020, Eagle's Board authorized the repurchase of up to 100,000 shares of its common stock. 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 upon market conditions and other corporate considerations. During the third quarter of 2020, 41,337 shares were purchased under this plan at an average price of $15.75 per share. However, no shares were purchased during the fourth quarter of 2020 or during 2021. The plan expired on July 23, 2021.

On July 18, 2019, the Board authorized the repurchase of up to 100,000 shares of its common stock. 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 upon market conditions and other corporate considerations. No shares were purchased under this plan during the year ended December 31, 2019 or the first quarter of 2020. However, during the second quarter of 2020, 1,281 shares were purchased at an average price of $16.95 per share. In addition, during the third quarter of 2020, 20,158 shares were purchased at an average price of $15.60 per share. The plan expired on July 18, 2020.

- 4241 -

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EAGLE BANCORP MONTANA, INC. AND SUBSIDIARIES

- 4342 -

Table of Contents

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.

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

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

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock par value $0.01 per share	EBMT	Nasdaq Global Market

PART I.	FINANCIAL INFORMATION	PAGE

Item 1.	Financial Statements (Unaudited)

	Condensed Consolidated Statements of Financial Condition as of September 30, ~~2021~~2022 and December 31, ~~2020~~2021	1

	Condensed Consolidated Statements of Income for the three and nine months ended September 30, ~~2021~~2022 and ~~2020~~2021	3

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, ~~2021~~2022 and ~~2020~~2021	5

	Condensed Consolidated Statements of Changes in Shareholders' Equity for the three and nine months ended September 30, ~~2021~~2022 and ~~2020~~2021	6

	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, ~~2021~~2022 and ~~2020~~2021	7

	Notes to ~~the Unaudited~~ Condensed Consolidated Financial Statements (Unaudited)	9

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2726

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4039

Item 4.	Controls and Procedures	4140

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	4241
Item 1A.	Risk Factors	4241
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4241
Item 3.	Defaults Upon Senior Securities	4241
Item 4.	Mine Safety Disclosures	4241
Item 5.	Other Information	4342
Item 6.	Exhibits	4342

Signatures		4443

●	statements regarding the current global COVID-19 pandemic;
●	statements regarding the asset quality of our loan and investment portfolios; and

	●	the negative impacts and disruptions resulting from the ~~continuing outbreak of the~~ongoing novel coronavirus, or COVID-19, and the steps taken by governmental and other authorities to contain, mitigate and combat the pandemic, on the economies and communities we serve, which may likely have an adverse impact on our credit portfolio, goodwill, stock price, borrowers and the economy as a whole both globally and domestically;
	●	local, regional, national and international economic and market conditions and events and the impact they may have on us, our customers and our assets and liabilities;

	●	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;

	Three Months Ended				Nine Months Ended				Three Months Ended				Nine Months Ended
	September 30,				September 30,				September 30,				September 30,
	2021		2020		2021		2020		2022		2021		2022			2021
INTEREST AND DIVIDEND INCOME:
Interest and fees on loans	$	11,619	$	11,340	$	33,660	$	33,832	$	16,665	$	11,619	$	42,933		$	33,660
Securities available-for-sale		1,094		874		2,989		2,853		2,555		1,094		5,863			2,989
FHLB and FRB dividends		62		95		194		284		63		62		160			194
Other interest income		32		30		90		134		59		32		206			90
Total interest and dividend income		12,807		12,339		36,933		37,103		19,342		12,807		49,162			36,933

INTEREST EXPENSE:
Deposits		350		779		1,118		3,063		717		350		1,451			1,118
FHLB advances and other borrowings		37		261		152		1,066		136		37		157			152
Other long-term debt		389		521		1,168		1,296		602		389		1,855			1,168
Total interest expense		776		1,561		2,438		5,425		1,455		776		3,463			2,438

NET INTEREST INCOME		12,031		10,778		34,495		31,678		17,887		12,031		45,699			34,495

Loan loss provision		255		854		576		2,751		517		255		1,654			576

NET INTEREST INCOME AFTER LOAN LOSS PROVISION		11,776		9,924		33,919		28,927		17,370		11,776		44,045			33,919

NONINTEREST INCOME:
Service charges on deposit accounts		318		282		884		814		498		318		1,223			884
Mortgage banking, net		11,665		13,305		33,360		31,596		4,447		11,665		16,183			33,360
Interchange and ATM fees		570		407		1,489		1,123		594		570		1,668			1,489
Appreciation in cash surrender value of life insurance		181		160		512		480		291		181		748			512
Net gain on sale of available-for-sale securities		11		0		11		1,068
Net gain (loss) on sale of available-for-sale securities										-		11		(6	)		11
Other noninterest income		608		817		1,798		1,892		1,587		608		3,236			1,798
Total noninterest income		13,353		14,971		38,054		36,973	$	7,417	$	13,353	$	23,052		$	38,054

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2021			2020			2021			2020

NET INCOME	$	4,746		$	6,380		$	12,692		$	16,042

OTHER ITEMS OF COMPREHENSIVE (LOSS) INCOME BEFORE TAX:
Change in fair value of securities available-for-sale		(578	)		1,263			(1,818	)		6,074
Reclassification for net realized gains on investment securities available-for-sale		(11	)		0			(11	)		(1,068	)
Total other comprehensive (loss) income		(589	)		1,263			(1,829	)		5,006

Income tax benefit (provision) related to securities available-for-sale		155			(332	)		482			(1,318	)

COMPREHENSIVE INCOME	$	4,312		$	7,311		$	11,345		$	19,730

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

Balance at July 1, 2022																						$	-	$	85	$	109,410		$	(5,443	)	$	(9,691	)	$	87,510		$	(19,081	)	$	162,790
Net income																							-		-		-			-			-			3,092			-			3,092
Other comprehensive loss																							-		-		-			-			-			-			(11,793	)		(11,793	)
Dividends paid ($0.1375 per share)																							-		-		-			-			-			(1,100	)		-			(1,100	)
Stock compensation expense																							-		-		135			-			-			-			-			135
ESOP shares allocated (5,997 shares)																							-		-		(57	)		143			-			-			-			86
Treasury stock purchased (99,517 shares at $19.45 average cost per share)																							-		-		-			-			(1,936	)		-			-			(1,936	)
Balance at September 30, 2022																						$	-	$	85	$	109,488		$	(5,300	)	$	(11,627	)	$	89,502		$	(30,874	)	$	151,274

Balance at July 1, 2021	$	0	$	71	$	80,820	$	(6,061	)	$	(7,631	)	$	80,607		$	4,938		$	152,744		$	-	$	71	$	80,820		$	(6,061	)	$	(7,631	)	$	80,607		$	4,938		$	152,744
Net income		0		0		0		0			0			4,746			0			4,746			-		-		-			-			-			4,746			-			4,746
Other comprehensive loss		0		0		0		0			0			0			(434	)		(434	)		-		-		-			-			-			-			(434	)		(434	)
Dividends paid ($0.1250 per share)		0		0		0		0			0			(848	)		0			(848	)
Dividends paid ($0.1250 per share)																							-		-		-			-			-			(848	)		-			(848	)
Stock compensation expense		0		0		90		0			0			0			0			90			-		-		90			-			-			-			-			90
ESOP shares allocated (9,831 shares)		0		0		47		178			0			0			0			225
ESOP shares allocated (9,831) shares)																							-		-		47			178			-			-			-			225
Balance at September 30, 2021	$	0	$	71	$	80,957	$	(5,883	)	$	(7,631	)	$	84,505		$	4,504		$	156,523		$	-	$	71	$	80,957		$	(5,883	)	$	(7,631	)	$	84,505		$	4,504		$	156,523

Balance at July 1, 2020	$	0	$	71	$	77,506	$	(227	)	$	(3,664	)	$	63,757		$	4,086		$	141,529
Balance at January 1, 2022																						$	-	$	71	$	80,832		$	(5,729	)	$	(7,321	)	$	85,383		$	3,493		$	156,729
Net income		0		0		0		0			0			6,380			0			6,380			-		-		-			-			-			7,079			-			7,079
Other comprehensive income		0		0		0		0			0			0			931			931
Dividends paid ($0.0975 per share)		0		0		0		0			0			(659	)		0			(659	)
Other comprehensive loss																							-		-		-			-			-			-			(34,367	)		(34,367	)
Dividends paid ($0.3875 per share)																							-		-		-			-			-			(2,960	)		-			(2,960	)
Stock issued in connection with First Community Bancorp, Inc. acquisition																							-		14		28,337			-			-			-			-			28,351
Stock compensation expense		0		0		78		0			0			0			0			78			-		-		405			-			-			-			-			405
ESOP shares allocated (4,154 shares)		0		0		28		42			0			0			0			70
Treasury stock purchased (61,495 shares at $15.70 average cost per share)		0		0		0		0			(966	)		0			0			(966	)
Balance at September 30, 2020	$	0	$	71	$	77,612	$	(185	)	$	(4,630	)	$	69,478		$	5,017		$	147,363
ESOP shares allocated (17,991 shares)																							-		-		(86	)		429			-			-			-			343
Treasury stock purchased (204,517 shares at $21.05 average cost per share)																							-		-		-			-			(4,306	)		-			-			(4,306	)
Balance at September 30, 2022																						$	-	$	85	$	109,488		$	(5,300	)	$	(11,627	)	$	89,502		$	(30,874	)	$	151,274

Balance at January 1, 2021	$	0	$	71	$	77,602	$	(145	)	$	(4,423	)	$	73,982		$	5,851		$	152,938		$	-	$	71	$	77,602		$	(145	)	$	(4,423	)	$	73,982		$	5,851		$	152,938
Net income		0		0		0		0			0			12,692			0			12,692			-		-		-			-			-			12,692			-			12,692
Other comprehensive loss		0		0		0		0			0			0			(1,347	)		(1,347	)		-		-		-			-			-			-			(1,347	)		(1,347	)
Dividends paid ($0.3200 per share)		0		0		0		0			0			(2,169	)		0			(2,169	)
Dividends paid ($0.3200 per share)																							-		-		-			-			-			(2,169	)		-			(2,169	)
Stock compensation expense		0		0		270		0			0			0			0			270			-		-		270			-			-			-			-			270
ESOP shares allocated (18,139 shares)		0		0		156		262			0			0			0			418			-		-		156			262			-			-			-			418
Treasury stock purchased through tender offer (250,000 shares at $25.12 average cost per share)		0		0		0		0			(6,279	)		0			0			(6,279	)
Sale of shares to ESOP (251,256 shares at $23.88 average price per share)		0		0		2,929		(6,000	)		3,071			0			0			0
Treasury stock purchased through tender offer (250,000 shares at $25.12 average cost per share)																							-		-		-			-			(6,279	)		-			-			(6,279	)
Sale of shares to ESOP (251,256 shares at $23.88 average price per share)																							-				2,929			(6,000	)		3,071			-			-			-
Balance at September 30, 2021	$	0	$	71	$	80,957	$	(5,883	)	$	(7,631	)	$	84,505		$	4,504		$	156,523		$	-	$	71	$	80,957		$	(5,883	)	$	(7,631	)	$	84,505		$	4,504		$	156,523

Balance at January 1, 2020	$	0	$	67	$	68,826	$	(311	)	$	(3,643	)	$	55,391		$	1,329		$	121,659
Net income		0		0		0		0			0			16,042			0			16,042
Other comprehensive income		0		0		0		0			0			0			3,688			3,688
Dividends paid ($0.2875 per share)		0		0		0		0			0			(1,955	)		0			(1,955	)
Stock issued in connection with Western Holding Company of Wolf Point acquisition		0		4		8,463		0			0			0			0			8,467
Stock compensation expense		0		0		226		0			0			0			0			226
ESOP shares allocated (12,462 shares)		0		0		97		126			0			0			0			223
Treasury stock purchased (62,776 shares at $15.73 average cost per share)		0		0		0		0			(987	)		0			0			(987	)
Balance at September 30, 2020	$	0	$	71	$	77,612	$	(185	)	$	(4,630	)	$	69,478		$	5,017		$	147,363

	WHC		FCB
	January 1,		April 30,
	2020		2022
	(In Thousands)		(In Thousands)
Assets acquired:
Cash and cash equivalents	$	11,544	$	23,623
Securities available-for-sale		43,710		126,123
Loans receivable		43,424		190,894
Premises and equipment		740		6,393
Cash surrender value of life insurance		2,131		8,638
Core deposit intangible		208		7,004
Other assets		1,874		7,687
Total assets acquired	$	103,631	$	370,362

Liabilities assumed:
Deposits	$	86,572	$	321,107
Accrued expenses and other liabilities		4,554		1,767
Other borrowings		2,500		22,853
Total liabilities assumed	$	93,626	$	345,727

Net assets acquired	$	10,005	$	24,635

Consideration paid:
Cash	$	6,500	$	10,226
Common stock issued (395,850 shares)		8,467
Common stock issued (1,396,596 shares)				28,351
Total consideration paid	$	14,967	$	38,577

Goodwill resulting from acquisition	$	4,962	$	13,942

	September 30, 2021				September 30, 2022
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
	(In Thousands)				(In Thousands)

Due in one year or less	$	3,308	$	3,329	$	18,821	$	18,694
Due from one to five years		13,623		14,102		19,187		18,552
Due from five to ten years		47,815		48,703		90,566		78,291
Due after ten years		100,473		104,877		140,107		122,756
		165,219		171,011		268,681		238,293
Mortgage-backed securities		15,585		15,700		32,729		30,486
Collateralized mortgage obligations		53,117		53,322		92,450		83,170
Total	$	233,921	$	240,033	$	393,860	$	351,949

	September 30, 2021										September 30, 2022
	Less Than 12 Months					12 Months or Longer					Less Than 12 Months					12 Months or Longer
			Gross					Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses			Value		Losses
	(In Thousands)										(In Thousands)
U.S. treasury obligations	$	10,533	$	(12	)	$	0	$	0
U.S. government and agency obligations											$	1,739	$	(214	)	$	-	$	-
U.S. Treasury obligations												39,485		(4,861	)		16,584		(2,778	)
Municipal obligations		8,962		(114	)		0		0			152,894		(18,422	)		12,821		(3,957	)
Corporate obligations		0		0			0		0			6,026		(212	)		-		-
Mortgage-backed securities and collateralized mortgage obligations		33,706		(439	)		1,413		(8	)		80,102		(6,028	)		33,355		(5,496	)
Asset-backed securities												743		(4	)		-		-
Total	$	53,201	$	(565	)	$	1,413	$	(8	)	$	280,989	$	(29,741	)	$	62,760	$	(12,231	)

	As of or For the						As of or For the
	Three Months Ended						Three Months Ended
	September 30,						September 30,
	2021			2020			2022			2021
	(In Thousands)						(In Thousands)
Mortgage servicing rights:
Beginning balance	$	12,232		$	9,550		$	14,809		$	12,232
Mortgage servicing rights capitalized		1,662			1,700			924			1,662
Amortization of mortgage servicing rights		(863	)		(854	)		(592	)		(863	)
Ending balance	$	13,031		$	10,396		$	15,141		$	13,031
Valuation allowance:
Beginning balance	$	(104	)	$	(1,216	)	$	-		$	(104	)
Recovery of mortgage servicing rights		14			338			-			14
Ending balance	$	(90	)	$	(878	)	$	-		$	(90	)
Mortgage servicing rights, net	$	12,941		$	9,518		$	15,141		$	12,941

	Three Months Ended				Nine Months Ended				Three Months Ended				Nine Months Ended
	September 30,				September 30,				September 30,				September 30,
	2021		2020		2021		2020		2022		2021		2022		2021
NONINTEREST EXPENSE:
Salaries and employee benefits	$	12,262	$	11,325	$	37,093	$	28,274	$	11,699	$	12,262	$	33,511	$	37,093
Occupancy and equipment expense		1,665		1,280		4,746		3,677		1,946		1,665		5,441		4,746
Data processing		1,171		1,168		3,666		3,507		1,964		1,171		4,628		3,666
Advertising		326		208		850		624		464		326		1,052		850
Amortization of core deposit intangible		144		165		431		495		333		144		895		431
Loan costs		654		566		2,126		1,211		491		654		1,624		2,126
Federal Deposit Insurance Corporation ("FDIC") insurance premiums		81		75		243		147		93		81		330		243
Postage		93		76		302		260
Professional and examination fees		790		389		1,400		1,081		420		790		1,098		1,400
Acquisition costs		35		0		35		157		103		35		2,296		35
Other noninterest expense		1,579		1,093		4,158		4,893		3,151		1,672		6,783		4,460
Total noninterest expense		18,800		16,345		55,050		44,326		20,664		18,800		57,658		55,050

INCOME BEFORE PROVISION FOR INCOME TAXES		6,329		8,550		16,923		21,574		4,123		6,329		9,439		16,923

Provision for income taxes		1,583		2,170		4,231		5,532		1,031		1,583		2,360		4,231

NET INCOME	$	4,746	$	6,380	$	12,692	$	16,042	$	3,092	$	4,746	$	7,079	$	12,692

BASIC EARNINGS PER SHARE	$	0.73	$	0.94	$	1.90	$	2.36	$	0.40	$	0.73	$	0.98	$	1.90

DILUTED EARNINGS PER SHARE	$	0.73	$	0.94	$	1.89	$	2.35	$	0.40	$	0.73	$	0.98	$	1.89

	Unrealized
	Gains (Losses)
	on Securities
	Available-for-Sale
	(In Thousands)
Balance at July 1, 2021	$	4,938
Other comprehensive loss, before reclassifications and income taxes		(578	)
Amounts reclassified from accumulated other comprehensive income, before income taxes		(11	)
Income tax benefit		155
Total other comprehensive loss		(434	)
Balance at September 30, 2021	$	4,504

Balance at July 1, 2020	$	4,086
Other comprehensive income, before reclassifications and income taxes		1,263
Amounts reclassified from accumulated other comprehensive income, before income taxes		0
Income tax provision		(332	)
Total other comprehensive income		931
Balance at September 30, 2020	$	5,017

Balance at January 1, 2021	$	5,851
Other comprehensive loss, before reclassifications and income taxes		(1,818	)
Amounts reclassified from accumulated other comprehensive income, before income taxes		(11	)
Income tax benefit		482
Total other comprehensive loss		(1,347	)
Balance at September 30, 2021	$	4,504

Balance at January 1, 2020	$	1,329
Other comprehensive income, before reclassifications and income taxes		6,074
Amounts reclassified from accumulated other comprehensive income, before income taxes		(1,068	)
Income tax provision		(1,318	)
Total other comprehensive income		3,688
Balance at September 30, 2020	$	5,017

	Unrealized
	(Losses) Gains
	on Securities
	Available-for-Sale
	(In Thousands)
Balance, July 1, 2022	$	(19,081	)
Other comprehensive loss, before reclassifications and income taxes		(16,009	)
Amounts reclassified from accumulated other comprehensive loss, before income taxes		-
Income tax benefit		4,216
Total other comprehensive loss		(11,793	)
Balance, September 30, 2022	$	(30,874	)

Balance, July 1, 2021	$	4,938
Other comprehensive loss, before reclassifications and income taxes		(578	)
Amounts reclassified from accumulated other comprehensive income, before income taxes		(11	)
Income tax benefit		155
Total other comprehensive loss		(434	)
Balance, September 30, 2021	$	4,504

Balance, January 1, 2022	$	3,493
Other comprehensive loss, before reclassifications and income taxes		(46,657	)
Amounts reclassified from accumulated other comprehensive loss, before income taxes		6
Income tax benefit		12,284
Total other comprehensive loss		(34,367	)
Balance, September 30, 2022	$	(30,874	)

Balance, January 1, 2021	$	5,851
Other comprehensive loss, before reclassifications and income taxes		(1,818	)
Amounts reclassified from accumulated other comprehensive income, before income taxes		(11	)
Income tax benefit		482
Total other comprehensive loss		(1,347	)
Balance, September 30, 2021	$	4,504

	September 30, 2021								September 30, 2022
	Level 1		Level 2		Level 3		Total Fair		Level 1		Level 2		Level 3		Total Fair
	Inputs		Inputs		Inputs		Value		Inputs		Inputs		Inputs		Value
	(In Thousands)								(In Thousands)
Financial assets:
Available-for-sale securities:
Available-for-sale securities
U.S. government obligations	$	0	$	1,768	$	0	$	1,768	$	-	$	2,463	$	-	$	2,463
U.S. treasury obligations		33,751		0		0		33,751
U.S. Treasury obligations										56,069		-		-		56,069
Municipal obligations		0		118,861		0		118,861		-		168,882		-		168,882
Corporate obligations		0		10,716		0		10,716		-		7,029		-		7,029
Mortgage-backed securities		0		15,700		0		15,700		-		30,486		-		30,486
Collateralized mortgage obligations		0		53,322		0		53,322		-		83,170		-		83,170
Asset-backed securities		0		5,915		0		5,915		-		3,850		-		3,850
Loans held-for-sale		0		42,059		0		42,059		-		24,408		-		24,408
Forward TBA mortgage-backed securities										-		1,614		-		1,614
Financial liabilities:
Interest rate lock commitments		0		0		2,328		2,328		-		-		772		772
Forward TBA mortgage-backed securities		0		680		0		680

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

Impaired loans	Fair value of underlying collateral	Discount applied to the obtained appraisal	~~10 - 30%~~10-30%
Real estate and other repossessed assets	Fair value of collateral	Discount applied to the obtained appraisal	~~10 - 30%~~10-30%
Mortgage servicing rights	Discounted cash flows	Discount rate	~~10 - 15%~~10-15%
		Prepayment speeds	~~180 - 330%~~110-265%
Interest rate lock commitments	Internal pricing model	Pull-through expectations	~~85 - 95%~~80-95%

	September 30,					December 31,					September 30,					December 31,
	2021					2020					2022					2021
	Fair Value		Percentage of Total			Fair Value		Percentage of Total			Fair Value		Percentage of Total			Fair Value		Percentage of Total
	(Dollars in Thousands)										(Dollars in Thousands)
Securities available-for-sale:
U.S. government obligations	$	1,768		0.74	%	$	2,245		1.38	%	$	2,463		0.70	%	$	1,633		0.60	%
U.S. treasury obligations		33,751		14.06			5,657		3.47
U.S. Treasury obligations												56,069		15.93			53,183		19.61
Municipal obligations		118,861		49.53			99,088		60.81			168,882		47.99			123,667		45.58
Corporate obligations		10,716		4.46			10,663		6.54			7,029		2.00			9,336		3.44
Mortgage-backed securities		15,700		6.54			7,669		4.71			30,486		8.66			14,636		5.40
Collateralized mortgage obligations		53,322		22.21			31,189		19.14			83,170		23.63			63,067		23.25
Asset-backed securities		5,915		2.46			6,435		3.95			3,850		1.09			5,740		2.12
Total securities available-for-sale	$	240,033		100.00	%	$	162,946		100.00	%	$	351,949		100.00	%	$	271,262		100.00	%

	Three Months Ended September 30,															For the Three Months Ended September 30,
	2021								2020							2022							2021
	Average		Interest						Average		Interest					Average		Interest					Average		Interest
	Daily		and		Yield/				Daily		and		Yield/			Daily		and		Yield/			Daily		and		Yield/
	Balance		Dividends		Cost(4)				Balance		Dividends		Cost(4)			Balance		Dividends		Cost⁽⁴⁾			Balance		Dividends		Cost⁽⁴⁾
	(Dollars in Thousands)															(Dollars in Thousands)
Assets:
Interest-earning assets:
Securities available-for-sale	$	233,882	$	1,094		1.86	%		$	163,102	$	874		2.13	%
Investment securities																$	378,680	$	2,555		2.68	%	$	233,882	$	1,094		1.86	%
FHLB and FRB stock		4,812		62		5.11				6,299		95		5.98			6,932		63		3.61			4,812		62		5.11
Loans receivable⁽¹⁾		926,748		11,619		4.97				902,543		11,340		4.98			1,301,358		16,665		5.08			926,748		11,619		4.97
Other earning assets		68,058		32		0.19				43,662		30		0.27			12,057		59		1.94			68,058		32		0.19
Total interest-earning assets		1,233,500		12,807		4.12				1,115,606		12,339		4.39			1,699,027		19,342		4.52			1,233,500		12,807		4.12
Noninterest-earning assets		148,686								129,312							214,683							148,686
Total assets	$	1,382,186							$	1,244,918						$	1,913,710						$	1,382,186

Liabilities and equity:
Interest-bearing liabilities:
Deposit accounts:
Checking	$	197,245	$	12		0.02	%		$	157,542	$	13		0.03	%	$	261,426	$	68		0.10	%	$	197,245	$	12		0.02	%
Savings		204,223		30		0.06				160,118		33		0.08			318,322		25		0.03			204,223		30		0.06
Money market		254,019		146		0.23				176,276		102		0.23			369,216		307		0.33			254,019		146		0.23
Certificates of deposit		155,006		162		0.41				200,527		631		1.25			203,359		317		0.62			155,006		162		0.41
Advances from FHLB and other borrowings including long-term debt		38,022		426		4.45				108,427		782		2.86			69,870		738		4.19			38,022		426		4.45
Total interest-bearing liabilities		848,515		776		0.36				802,890		1,561		0.77			1,222,193		1,455		0.47			848,515		776		0.36
Noninterest checking		353,486								276,580		��					503,905							353,486
Other noninterest-bearing liabilities		23,107								21,840							23,020							23,107
Total liabilities		1,225,108								1,101,310							1,749,118							1,225,108

Total equity		157,078								143,608							164,592							157,078

Total liabilities and equity	$	1,382,186							$	1,244,918						$	1,913,710						$	1,382,186
Net interest income/interest rate spread⁽²⁾			$	12,031		3.76	%				$	10,778		3.62	%			$	17,887		4.05	%			$	12,031		3.76	%
								��
Net interest margin⁽³⁾						3.87	%							3.83	%						4.18	%						3.87	%
Total interest-earning assets to interest-bearing liabilities						145.37	%							138.95	%						139.01	%						145.37	%

	For the Nine Months Ended September 30,														For the Nine Months Ended September 30,
	2021							2020							2022							2021
	Average		Interest					Average		Interest					Average		Interest					Average		Interest
	Daily		and		Yield/			Daily		and		Yield/			Daily		and		Yield/			Daily		and		Yield/
	Balance		Dividends		Cost(4)			Balance		Dividends		Cost(4)			Balance		Dividends		Cost⁽⁴⁾			Balance		Dividends		Cost⁽⁴⁾
	(Dollars in Thousands)														(Dollars in Thousands)
Assets:
Interest-earning assets:
Securities available-for-sale	$	200,392	$	2,989		1.99	%	$	168,170	$	2,853		2.26	%
Investment securities															$	332,950	$	5,863		2.35	%	$	200,392	$	2,989		1.99	%
FHLB and FRB stock		4,880		194		5.32			6,934		284		5.46			5,827		160		3.67			4,880		194		5.32
Loans receivable⁽¹⁾		905,478		33,660		4.97			870,114		33,832		5.18			1,144,459		42,933		5.02			905,478		33,660		4.97
Other earning assets		77,264		90		0.16			34,309		134		0.52			44,456		206		0.62			77,264		90		0.16
Total interest-earning assets		1,188,014		36,933		4.16			1,079,527		37,103		4.58	%		1,527,692		49,162		4.30			1,188,014		36,933		4.16
Noninterest-earning assets		143,974							124,192							186,200							143,974
Total assets	$	1,331,988						$	1,203,719						$	1,713,892						$	1,331,988

Liabilities and equity:
Interest-bearing liabilities:
Deposit accounts:
Checking	$	185,496	$	34		0.02	%	$	147,054	$	47		0.04	%	$	238,032	$	106		0.06	%	$	185,496	$	34		0.02	%
Savings		193,943		86		0.06			149,129		118		0.11			268,244		94		0.05			193,943		86		0.06
Money market		234,188		381		0.22			160,477		362		0.30			348,568		759		0.29			234,188		381		0.22
Certificates of deposit		161,521		617		0.51			224,251		2,536		1.51			171,642		492		0.38			161,521		617		0.51
Advances from FHLB and other borrowings including long-term debt		40,703		1,320		4.34			115,861		2,362		2.72			68,012		2,012		3.96			40,703		1,320		4.34
Total interest-bearing liabilities		815,851		2,438		0.40			796,772		5,425		0.91	%		1,094,498		3,463		0.42			815,851		2,438		0.40
Noninterest checking		337,961							250,132							440,625							337,961
Other noninterest-bearing liabilities		21,560							18,935							22,698							21,560
Total liabilities		1,175,372							1,065,839							1,557,821							1,175,372

Total equity		156,616							137,880							156,071							156,616

Total liabilities and equity	$	1,331,988						$	1,203,719						$	1,713,892						$	1,331,988
Net interest income/interest rate spread⁽²⁾			$	34,495		3.76	%			$	31,678		3.67	%			$	45,699		3.88	%			$	34,495		3.76	%

Net interest margin⁽³⁾						3.88	%						3.91	%						4.00	%						3.88	%
Total interest-earning assets to interest-bearing liabilities						145.62	%						135.49	%						139.58	%						145.62	%

	Nine Months Ended September 30,
	2021									2020
				Due to									Due to
	Volume			Rate			Net			Volume			Rate			Net
	(In Thousands)
Interest earning assets:
Securities available-for-sale	$	547		$	(411	)	$	136		$	624		$	(573	)	$	51
FHLB and FRB stock		(84	)		(6	)		(90	)		(25	)		12			(13	)
Loans receivable⁽¹⁾		1,374			(1,546	)		(172	)		4,854			(2,400	)		2,454
Other earning assets		168			(212	)		(44	)		419			(340	)		79
Total interest earning assets		2,005			(2,175	)		(170	)		5,872			(3,301	)		2,571

Interest bearing liabilities:
Savings, money market and checking accounts		214			(240	)		(26	)		121			7			128
Certificates of deposit		(710	)		(1,209	)		(1,919	)		214			(12	)		202
Advances from FHLB and other borrowings including long-term debt		(1,532	)		490			(1,042	)		(351	)		(318	)		(669	)
Total interest bearing liabilities		(2,028	)		(959	)		(2,987	)		(16	)		(323	)		(339	)

Change in net interest income	$	4,033		$	(1,216	)	$	2,817		$	5,888		$	(2,978	)	$	2,910

	September 30, 2021
	(Unaudited)
	Dollar			% of
	Amount			Assets
	(Dollars in Thousands)
Total risk-based capital to risk weighted assets:
Actual capital level	$	163,492			15.83	%
Minimum required for capital adequacy purposes		108,438			10.50
Excess capital	$	55,054			5.33	%

Tier I capital to risk weighted assets:
Actual capital level	$	151,292			14.65	%
Minimum required for capital adequacy purposes		87,783			8.50
Excess capital	$	63,509			6.15	%

Common equity tier I capital to risk weighted assets:
Actual capital level	$	151,292			14.65	%
Minimum required for capital adequacy purposes		72,292			7.00
Excess capital	$	79,000			7.65	%

Tier I capital to adjusted total average assets:
Actual capital level	$	151,292			11.25	%
Minimum required for capital adequacy purposes		53,775	��		4.00
Excess capital	$	97,517			7.25	%

											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)
September 30, 2022:
Total risk-based capital to risk weighted assets
Consolidated	$	216,561		14.18	%	$	160,400		10.50	%		N/A		N/A
Bank		198,458		13.00			160,282		10.50			152,650		10.00

Tier 1 capital to risk weighted assets
Consolidated		147,711		9.67			129,848		8.50			N/A		N/A
Bank		184,608		12.09			129,752		8.50			122,120		8.00

Common equity Tier 1 capital to risk weighted assets
Consolidated		142,711		9.34			106,933		7.00			N/A		N/A
Bank		184,608		12.09			106,855		7.00			99,222		6.50

Tier 1 capital to adjusted total average assets
Consolidated		147,711		7.78			75,897		4.00			N/A		N/A
Bank		184,608		9.83			75,112		4.00			93,890		5.00


Changes in Market	Rate Sensitivity			Rate Sensitivity
Interest Rates	As of September 30, 2021		Policy	As of September 30, 2022		Policy
(Basis Points)	Year 1	Year 2	Limits	Year 1	Year 2	Limits

+200	6.7%	11.0%	-15.0%	1.0%	7.5%	-15.0%
+100				0.7%	5.1%	-10.0%
-100	-3.0%	-7.8%	-10.0%	-2.3%	-3.1%	-10.0%
-200				-6.3%	-11.1%	-15.0%

					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

July 1, 2022 through July 31, 2022		50,000	$	19.50		50,000		345,000

August 1, 2022 through August 31, 2022		44,477		19.41		44,477		300,523

September 1, 2022 through September 30, 2022		5,040		19.32		5,040		295,483

Total		99,517	$	19.45		99,517

Exhibit Number	Description

2.1	Agreement and Plan of Merger, dated as of September 30, 2021, by and among Eagle Bancorp Montana, Inc., Opportunity Bank of Montana, First Community Bancorp, Inc. and First Community Bank (incorporated by reference to Exhibit 2.1 of our Current Report on Form 8-K filed on October 1, 2021).

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	~~Salary Continuation~~Form of Change in Control Agreement between Opportunity Bank of Montana and ~~Alana Binde (filed herewith).~~

~~10.2~~	~~Second Amendment to Salary Continuation Agreement between Opportunity Bank of Montana and Dale Field, dated August 20, 2021 (filed herewith).~~

~~10.3~~	~~Second Amendment to the Salary Continuation Agreement between Opportunity Bank of Montana and Peter J. Johnson dated August 20, 2021~~executive officers (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed on ~~August 24, 2021)~~September 28, 2022).

10.2	Salary Continuation Agreement between Opportunity Bank of Montana and Miranda Spaulding (filed herewith).

31.1	Certification by Peter J. Johnson, 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 ~~Laura F. Clark,~~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 Peter J. Johnson, Chief Executive Officer, and ~~Laura F. Clark,~~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.


	EAGLE BANCORP MONTANA, INC.

Date: November 4~~, 2021~~ 9, 2022	By:	/s/ Peter J. Johnson
		Peter J. Johnson
		~~President/~~CEO



Date: November 4~~, 2021~~ 9, 2022	By:	/s/ ~~Laura F. Clark~~Miranda J. Spaulding
		~~Laura F. Clark~~Miranda J. Spaulding
		~~Executive Vice President/CFO/COO~~SVP/CFO