|Shares Out. (in M):||4||P/E||14.4x||11.3x|
|Market Cap (in $M):||46||P/FCF||14.4x||11.3x|
|Net Debt (in $M):||0||EBIT||0||0|
Eagle Bancorp of Montana (EBMT)
(Market Cap of $45.9M, including ESOP shares, at $11.25 per share as of February 18, 2011)
Eagle Bancorp Montana (EBMT) is a profitable bank, with minimal non-performing assets, in an attractive geographic area, that is selling at a 15% discount to tangible book value.
EBMT is a holding company for American Federal Savings Bank, which operates six branches out of Montana. EBMT offers traditional retail banking products including money market accounts, CD accounts, and checking/savings accounts. Its loan portfolio consists primarily of real estate (RE) loans, of which about 60% is 1-4 family residential RE loans and 22% commercial RE, 8% construction/land development, and the remainder a mix of commercial/industrial loans and personal loans. EBMT completed its second step conversion on April 5, 2010 to a fully publicly owned stock company where it raised $24.6 million at $10 per share. EBMT has total equity capital of $52.8 million and $332.9 million in total assets. Management has been looking to utilize the capital raised by making acquisitions and facilitating organic growth.
Favorable geographic area of operation - Relative to the rest of the nation, EBMT operates in a financially healthy region. Lewis and Clark County, where EBMT has the majority of its deposits, has an unemployment rate of 5.3%..
Healthy balance sheet and minimum asset issues - As of December 31, 2010, non-performing assets were only 1.16%. Management attributes this to conservative underwriting standards and the fact that Montana did not undergo boom/bust cycles.
Steady historical profitability - Despite having very low non-performing assets, the Bank has a steady history of profitability. For the five calendar years prior to the second step conversion, American Federal Savings Bank had an average ROE of 8.7%.
Making strategic acquisitions and organic growth (effective uses of cash)
As EBMT begins to deploy its excess capital it will be able to generate better EPS.