Eagle Bancorp Montana, Inc., is a Delaware corporation that holds 100.0% of
the capital stock of Opportunity Bank of Montana (“the Bank”), formerly
American Federal Savings Bank (“AFSB”). In 2014, the Board of Directors
(“the Board”) determined that it was in the Company’s best
interests to adopt a Montana community bank charter and the Company applied
to the State of Montana to form an interim bank for the purpose of facilitating
the conversion of AFSB from a federally chartered savings bank to a Montana-chartered
commercial bank. Upon receiving required approvals of the Montana Division of
Banking and Financial Institutions and the federal banking agencies for the
conversion, the conversion became effective on October 14, 2014. Concurrent
with the conversion, the Bank applied, and was approved, for membership in the
Federal Reserve System of the Board of Governors. In connection with the conversion,
AFSB changed its name to Opportunity Bank of Montana. As a result of the conversion,
the Bank is now regulated by the Montana Division of Banking and Financial Institutions.
As a Federal Reserve Board (“FRB”) member bank, its primary federal
regulator is the FRB, and the Company is a registered bank holding company regulated
by the FRB.
The Bank was founded in 1922 as a Montana-chartered building and loan association
and has conducted operations in Helena since that time. In 1975, the Bank adopted
a federal thrift charter and in October 2014 converted to a Montana-chartered
commercial bank. On November 30, 2012, the Company completed a significant transaction
with Sterling Financial Corporation (“Sterling”) of Spokane, Washington
in which the Company purchased all of Sterling’s retail bank branches
in Montana. As a result of this transaction, the Bank’s assets grew to
over $500 million and the retail branch network grew from six to 13 full service
branches, with six branches in new markets. The acquisition also included the
addition of a wealth management division with over $100 million in managed assets
and a mortgage banking operation that has increased opportunities for additional
origination and fee income. The Bank currently has 15 automated teller machines
located in our market areas and we participate in the Money Pass® ATM network.
As of December 31, 2015, the Bank was the 7th largest commercial bank headquartered
in Montana in terms of deposits.
The Bank has equity investments in Certified Development Entities which have
received allocations of New Markets Tax Credits (“NMTC”). Administered
by the Community Development Financial Institutions Fund of the U.S. Department
of the Treasury, the NMTC program is aimed at stimulating economic and community
development and job creation in low-income communities.
The Company’s principal strategy is to manage its principal asset, the
Bank, in a profitable manner. The Company seeks to continue profitable operations
through building a diversified loan portfolio and positioning the Bank as a
full-service community bank that offers both retail and commercial loan and
deposit products in all of its markets. We believe that this focus will enable
us to continue to grow our franchise, while maintaining our commitment to customer
service, high asset quality, and sustained net earnings.
The Bank primarily originates residential mortgages (1-4 family) and, commercial
real estate loans, real estate construction loans, home equity loans, consumer
loans and commercial loans. Commercial real estate loans include loans on multi-family
dwellings, loans on nonresidential property and loans on developed and undeveloped
land. Home equity loans include loans secured by the borrower’s primary
residence. Typically, the property securing such loans is subject to a prior
lien. Consumer loans consist of loans secured by collateral other than real
estate, such as automobiles, recreational vehicles and boats. Personal loans
and lines of credit are made on deposits held by the Bank and on an unsecured
basis. Commercial business loans consist of business loans and lines of credit
on a secured and unsecured basis.
State-chartered commercial banks such as the Bank have the authority to invest
in various types of investment securities, including United States Treasury
obligations, securities of various Federal agencies (including securities collateralized
by mortgages), certificates of deposits of insured banks and savings institutions,
municipal securities, corporate debt securities and loans to other banking institutions.
Eagle maintains liquid assets that may be invested in specified short-term
securities and other investments. Liquidity levels may be increased or decreased
depending on the yields on investment alternatives. They may also be increased
based on management’s judgment as to the attractiveness of yields available
in relation to other opportunities. Liquidity levels can also change based on
management’s expectation of future yield levels, as well as management’s
projections as to the short-term demand for funds to be used in the Bank’s
loan origination and other activities. Eagle maintains an investment securities
portfolio and a mortgage-backed securities (“MBSs”) portfolio as
part of its investment portfolio
