Executive Summary

Q3 2025 showed solid operating momentum: Revenues rose 2.0% sequentially and 12.6% YoY to $23.4M, while diluted EPS increased to $0.46 from $0.41 in Q2 and $0.34 in Q3 2024, supported by a 3 bps NIM expansion to 3.94% and stable funding costs .
Versus S&P Global consensus, EBMT delivered a large top-line beat but a slight EPS miss: Revenue $23.343M Actual vs $18.193M Consensus (beat) and EPS $0.46 Actual vs $0.473 Consensus (miss)*.
Balance sheet quality improved: deposits grew to $1.75B (+0.8% QoQ), FHLB/other borrowings declined to $79.2M (from $119.4M in Q2), and ACL coverage of NPLs increased to 430% as NPLs fell to $4.1M .
Dividend maintained at $0.145/share; management cited potential for further cost-of-funds improvement if rates continue to decline—supportive for NIM and earnings trajectory into 2026 .

What Went Well and What Went Wrong

What Went Well
- NIM expanded to 3.94% (+3 bps QoQ; +60 bps YoY) as higher asset yields and stable funding costs compounded earlier improvements .
- Revenue growth and mortgage banking resilience: revenues +2.0% QoQ/+12.6% YoY; net mortgage banking income steady QoQ at $2.9M and higher YoY .
- Balance sheet de-risking and capacity: FHLB/other borrowings cut to $79.2M (from $119.4M in Q2), deposits up $14.3M QoQ, and available borrowing capacity ~$508.4M .
- CEO: “benefited from stable funding costs, strong asset yields, and ongoing operational discipline” .
- CFO: “anticipate further improvement in our cost of funds if rates continue to decline” .
What Went Wrong
- Noninterest expense rose 2.6% QoQ to $18.4M; efficiency ratio (GAAP) remained elevated at 78.56% despite improvement YoY .
- Effective tax rate jumped to 26.8% (from 18.8% in Q2), lifting tax expense to $1.3M and muting flow-through to EPS .
- Total loans declined 0.8% QoQ to $1.56B, with softness in certain categories (e.g., residential construction and consumer YoY) despite YoY growth in commercial real estate and ag/farmland .

Financial Results

P&L summary

Metric	Q3 2024	Q2 2025	Q3 2025
Revenues ($USD Millions)	$20.8	$23.0	$23.4
Net Interest Income ($MM)	$15.802	$18.145	$18.688
Noninterest Income ($MM)	$4.983	$4.807	$4.717
Noninterest Expense ($MM)	$17.270	$17.926	$18.387
Provision for Credit Losses ($MM)	$0.277	$1.038	$0.062
Income Before Taxes ($MM)	$3.238	$3.988	$4.956
Income Tax Expense ($MM)	$0.529	$0.751	$1.326
Net Income ($MM)	$2.709	$3.237	$3.630
Diluted EPS ($)	$0.34	$0.41	$0.46
Effective Tax Rate (%)	16.3%	18.8%	26.8%

Performance/margins

Metric	Q3 2024	Q2 2025	Q3 2025
Net Interest Margin (%)	3.34%	3.91%	3.94%
Return on Avg Assets (%)	0.51%	0.61%	0.68%
Return on Avg Equity (%)	6.56%	7.23%	7.94%
Yield on Avg Earning Assets (%)	5.66%	5.85%	5.87%
Cost of Funds (%)	2.89%	2.45%	2.45%
Efficiency Ratio (GAAP, %)	83.09%	78.10%	78.56%
Core Efficiency Ratio (non-GAAP, %)	81.47%	76.80%	77.33%

Balance sheet and capital

Metric	Q3 2024	Q2 2025	Q3 2025
Total Loans ($MM)	$1,534.7	$1,569.7	$1,557.8
Total Deposits ($MM)	$1,650.5	$1,737.9	$1,752.2
FHLB + Other Borrowings ($MM)	$219.2	$119.4	$79.2
Uninsured Deposits (% of Total)	N/A	19%	19%
Book Value/Share ($)	$22.17	$22.72	$23.45
Tangible BV/Share ($)	$17.23	$17.86	$18.63
TCE / TA (%)	6.56%	6.77%	7.12%

Asset quality KPIs

Metric	Q3 2024	Q2 2025	Q3 2025
Nonperforming Loans ($MM)	$4.803	$5.083	$4.122
NPLs / Loans (%)	0.31%	0.32%	0.26%
ACL / Loans (%)	1.12%	1.13%	1.14%
ACL / NPLs (%)	356.65%	348.81%	430.37%
Net Charge-offs ($000)	$17	$48	$72

Guidance Changes

Metric	Period	Previous Guidance/Context	Current Guidance/Context	Change
Dividend per share	Q4 2025 payable Dec 5	$0.145 declared for Q2 payable Sep 5	$0.145 declared Oct 23; payable Dec 5	Maintained
Cost of funds	Near term	Moderating deposit pricing; expected improvement as CDs reprice	“Anticipate further improvement… if rates continue to decline”	Maintained (qualitative)
Effective tax rate	FY trend	YTD 17.6% through Q2	Q3 26.8% (quarter); YTD 21.1%	Increased
Capital/borrowings	Post-Q3 event	N/A	Redeemed $15.0M 5.50% sub notes on Oct 1, financed via line of credit	Executed action

Note: No quantitative revenue/margin/OpEx guidance issued in the quarter; commentary remains directional .

Earnings Call Themes & Trends

No earnings call transcript was available in our document set as of Nov 20, 2025; themes below reflect management commentary from Q1–Q3 press releases.

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 2025)	Trend
Cost of funds / rate path	Deposit pricing moderating post-2024 rate cuts; expecting further improvement as CDs reprice	Expect further improvement in cost of funds if rates continue to decline	Improving
Net interest margin	Q1 NIM 3.74% (+15 bps QoQ); Q2 NIM 3.91% (+17 bps QoQ)	NIM 3.94% (+3 bps QoQ)	Improving (moderating pace)
Mortgage banking	Q1 softer volumes; Q2 rebound (gain-on-sale up)	Steady QoQ at $2.9M; up YoY	Stable to improving YoY
Credit quality	ACL/NPLs >300%; NPLs ~5.1–5.3M in 1H25	NPLs fell to $4.1M; ACL/NPLs ~430%	Improving
Funding/capacity	Borrowing capacity ~$437M (Q1) → $463M (Q2)	Capacity ~$508M; borrowings down QoQ	Improving
Macro (tariffs/inflation)	Cautious on inflation/tariff risks impacting repricing assumptions	Repeat caution on inflation/tariffs shaping rate decisions	Persistent risk

Management Commentary

Strategic focus: “building a stronger balance sheet and growing our community banking footprint across Montana… backed by a resilient core deposit base and a well-diversified loan portfolio,” while maintaining “a healthy net interest margin” .
Funding outlook: “Higher yields on interest-earning assets, combined with stable funding costs, contributed to a three basis point increase in our net interest margin… anticipate further improvement in our cost of funds if rates continue to decline” .
Rate sensitivity and risks: “Rising inflation risks, including the possible effects of new tariffs and broader cost pressures, could shape future interest rate decisions and alter our current assumptions around repricing” .

Q&A Highlights

No earnings call transcript was available in our document set; therefore, Q&A themes and any guidance clarifications from a live call could not be assessed as of this writing.

Estimates Context

S&P Global consensus for Q3 2025: Revenue $18.19M*, EPS $0.473* (3 estimates for each). Actuals: Revenue $23.343M, EPS $0.46*; result = big top-line beat and slight EPS miss*.
Investor implication: mix of outsized revenue beat with modest EPS miss suggests higher expenses/taxes partially offset operating strength; consensus models likely lift revenue/NII and NIM assumptions, with tax rate and expense run-rate adjusted upward*.

Metric	Consensus (Q3 2025)	Actual (Q3 2025)	Surprise
Revenue	$18.19M*	$23.343M*	+$5.15M / +28%*
Diluted EPS	$0.473*	$0.46*	-$0.013 / -3%*

Company-reported revenue in the quarter was $23.4M (blended) .
Asterisked values are retrieved from S&P Global.

Key Takeaways for Investors

NIM expansion continues, aided by stable funding costs and asset yield strength; further cost-of-funds relief is plausible if rate cuts persist into 2026 .
Balance sheet progress (lower wholesale borrowings, higher deposits, improved TCE/TA) enhances resilience and earnings capacity into softer macro scenarios .
Credit metrics improved (lower NPLs, higher ACL/NPL coverage), limiting downside risk to earnings from reserve builds near term .
Expense discipline remains a lever; however, higher salaries/benefits and rising effective tax rate will shape EPS flow-through even as revenue grows .
With a large revenue beat but slight EPS miss versus consensus*, models should shift toward higher NII and NIM, counterbalanced by higher tax and modest opex growth*.
Dividend stability ($0.145/share) plus sub-debt redemption post-quarter supports capital flexibility and shareholder yield .
Watch deposit mix normalization and mortgage banking volumes; both will influence fee income and cost of funds trajectory amid macro (inflation/tariff) uncertainties .

Asterisked values are retrieved from S&P Global.

Citations:

Q3 2025 results, KPIs, and narrative: .
Q3 2025 standalone press release (duplicative financials and quotes): .
Q2 2025 press release (comparatives, trends): .
Q1 2025 press release (comparatives, trends): .

Eagle Bancorp Montana, Inc. (EBMT)·Q3 2025 Earnings Summary