long term – Flight 93 http://flight93.org/ Sat, 12 Mar 2022 10:14:43 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://flight93.org/wp-content/uploads/2021/07/icon-5-150x150.png long term – Flight 93 http://flight93.org/ 32 32 Cost of living crisis: You can cut your bills, but there may be pitfalls | consumer affairs https://flight93.org/cost-of-living-crisis-you-can-cut-your-bills-but-there-may-be-pitfalls-consumer-affairs/ Sat, 12 Mar 2022 07:00:00 +0000 https://flight93.org/cost-of-living-crisis-you-can-cut-your-bills-but-there-may-be-pitfalls-consumer-affairs/ As the cost of living crisis worsens, you may be evaluating your regular monthly expenses and looking for things you can reduce. If you’re lucky enough to be a homeowner, your biggest monthly expense will likely be your mortgage. But will your lender allow you to lower your payments if you explain that you are […]]]>

As the cost of living crisis worsens, you may be evaluating your regular monthly expenses and looking for things you can reduce.

If you’re lucky enough to be a homeowner, your biggest monthly expense will likely be your mortgage. But will your lender allow you to lower your payments if you explain that you are having difficulty? And how will this affect your credit report?

Also, if you have life insurance or a pension, can you pause your payments and what will be the consequences?

Take a break from your mortgage

According to UK Finance, the banking trade association, mortgage lenders should offer a “forbearance” to any customer who is in financial difficulty or unable to make their mortgage payments.

This could take the form of an authorized payment holiday, where your lender allows you to not pay your mortgage for a short period of time, usually up to three months. Alternatively, with your lender’s permission, you may be allowed to reduce your monthly repayments.

With your lender’s permission, you may be allowed to reduce your monthly mortgage payments. Photography: Altayb/Getty Images/iStockphoto

These arrangements come at a cost. Any payment holidays will be noted on your credit report, which could have repercussions the next time you want to borrow money – you might, for example, have to pay a higher interest rate. You’ll also have to repay anything you missed once you’re no longer in financial difficulty. Your mortgage will likely cost you a lot more in the long run.

“The big downside to payment holidays is that you end up with a bigger mortgage to manage when you start making payments again,” says David Hollingworth of mortgage broker L&C.

Every day you don’t reduce the original amount you owe, you’ll accrue interest on it. In addition, you will have to catch up on missing payments.

That means “you end up making a higher payment for the rest of the mortgage — because you have a bigger mortgage,” says Hollingworth.

Also, lenders are only likely to agree to a payment holiday if they think your situation is temporary and a short break will give you enough breathing room to get back on your feet. “They would want to be sure it was the right thing to do because it will cost you more in the long run,” he adds.

Cancellation of life insurance premiums

It may be possible to reduce your life insurance cover or take a short break in your payments, without this affecting your cover – but only if your insurer agrees.

LV= allows this – but you can only qualify if your policy (for income protection, critical illness or life insurance) has been in force for a year or more, you have a good payment history and that you are less than three months behind with monthly payments. premiums. You must declare that you have suffered a significant drop in your income or that your usual income has ceased. Payment suspension will only be offered for one month at a time, up to three months.

You are not obligated to make up missed premiums and your coverage will remain in place for the entire period of payment interruption. Thereafter, your bounties will revert to your normal level and you will not be able to request another break thereafter.

Your insurer, if not LV=, may take a different approach. “If you’re having trouble keeping up with your premium payments, the first thing to do is contact your insurer to see what they might suggest,” says Malcolm Tarling of the Association of British Insurers. “They can follow LV=’s example and say, ‘We can stop your bonuses and you can have a bonus holiday for a specific period of time.’ Or they may say you can reduce your premiums but you’ll have to take a corresponding reduction in the amount of coverage you have.

A hand turning the glowing metallic button with the text Insurance
Do you need to reduce the monthly cost of your life insurance? Photography: Andriy Popov/Alamy

AIG takes this second approach with customers who are experiencing financial difficulties. They will consider letting you reduce the monthly cost of your protection insurance for up to six months, but you won’t be able to take a full break from your payments. More importantly, during the period when you pay reduced premiums, the value of the coverage you receive will be reduced.

For example, it says a 33-year-old man with £250,000 of life cover, paying £21.86 a month, could reduce his payments to £4.17 a month for six months. However, the maximum that could be claimed during this six month period would only be £10,000.

In other words, in this scenario, an 80% reduction in the cost of the monthly policy would lead to a 96% reduction in the value of the cover and make your loved ones worse off by £240,000 if you died – while saving you just £17.69 per month. However, if £4.17 a month is all you can afford and you want to keep some sort of cover in place, this drastic step may be worth considering.

At the end of the six months, you can either keep your premium reduced or return it to your usual level, with no further underwriting required. You won’t be asked to cover the payment difference when your premiums return to normal, and for the full six-month period you’ll have access to AIG’s health and wellness assistance services 24/7 /7.

Reduce your pension contributions

You may also be considering reducing or stopping your pension contributions for a while. This may alleviate some of your short-term financial pressures, but it will reduce your retirement income.

“Staying in your pension and making regular contributions, if they’re affordable, is one of the best ways to protect your future,” says Eve Read, spokesperson for Nest, the nonprofit program set up by the government. to facilitate occupational pensions. “Especially if you’re saving into a company pension, like Nest, because your employer will be paying in cash, and you also get tax relief from the government – those extra contributions effectively double your investment.”

From April, the annual energy bill for an average household is expected to rise by £693 a year or £57.75 a month, according to Ofgem. If you are a basic rate taxpayer and you divert £57.75 per month from your pension contributions to your energy bill for a year, you will lose £14.45 in tax relief per month and £34.90 £ per month of employer contributions (assuming your employer contributes the minimum amount they can to your pension each month via automatic enrollment).

Cutting £693 a year from your pension will mean £1,284 less in your fund. If that money manages to grow by 5% a year until you retire, the long-term cost is even higher. Hargreaves Lansdown, an investment platform, estimates that a 40-year-old basic-rate taxpayer who cuts his pension payments in this way – cutting his contributions by just £57.75 a month for just one year – ​would end up £4,569 worse before age 67.

“It can be tempting to cut pension contributions when money is tight, but it’s important to remember that you’re losing more than your own contribution,” says Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown. “The tax relief and employer contribution give your pension a real boost and, together with long-term investment returns, can have a powerful impact on how much you’ll find back in retirement.

“If you find yourself in a position where you need to cut or stop your contributions, try to resume them as soon as possible.”

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EAGLE BANCORP MONTANA, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS. (Form 10-K) https://flight93.org/eagle-bancorp-montana-inc-managements-discussion-and-analysis-of-financial-position-and-results-of-operations-form-10-k/ Wed, 09 Mar 2022 18:11:04 +0000 https://flight93.org/eagle-bancorp-montana-inc-managements-discussion-and-analysis-of-financial-position-and-results-of-operations-form-10-k/ The following discussion and analysis of the financial condition and results of operations of Eagle is intended to help investors understand our company and our operations. The financial review is provided as a supplement to, and should be read in conjunction with the Consolidated Financial Statements and the related Notes included elsewhere in this report. […]]]>
The following discussion and analysis of the financial condition and results of
operations of Eagle is intended to help investors understand our company and our
operations. The financial review is provided as a supplement to, and should be
read in conjunction with the Consolidated Financial Statements and the related
Notes included elsewhere in this report.



Introduction



The following Management's Discussion and Analysis of Financial Condition and
Results of Operations ("MD&A") describes Eagle and its subsidiaries' results of
operations for the year ended December 31, 2021 as compared to the year ended
December 31, 2020, and also analyzes our financial condition as of December 31,
2021 as compared to December 31, 2020. Like most banking institutions, our
principal business consists of attracting deposits from the general public and
the business community and making loans secured by various types of collateral,
including real estate and other consumer assets. We are significantly affected
by prevailing economic conditions, particularly interest rates, as well as
government policies concerning, among other things, monetary and fiscal affairs,
housing and financial institutions and regulations regarding lending and other
operations, privacy and consumer disclosure. Attracting and maintaining deposits
is influenced by a number of factors, including interest rates paid on competing
investments offered by other financial and nonfinancial institutions, account
maturities, fee structures and levels of personal income and savings. Lending
activities are affected by the demand for funds and thus are influenced by
interest rates, the number and quality of lenders and regional economic
conditions. Sources of funds for lending activities include deposits,
borrowings, repayments on loans, cash flows from maturities of investment
securities and income provided from operations.



Our earnings depend primarily on our level of net interest income, which is the
difference between interest earned on our interest-earning assets, consisting
primarily of loans and investment securities, and the interest paid on
interest-bearing liabilities, consisting primarily of deposits, borrowed funds,
and trust-preferred securities. Net interest income is a function of our
interest rate spread, which is the difference between the average yield earned
on our interest-earning assets and the average rate paid on our interest-bearing
liabilities, as well as a function of the average balance of interest-earning
assets compared to interest-bearing liabilities. Also contributing to our
earnings is noninterest income, which consists primarily of service charges and
fees on loan and deposit products and services, net gains and losses on sale of
assets, and mortgage loan service fees. Net interest income and noninterest
income are offset by provisions for loan losses, general administrative and
other expenses, including salaries and employee benefits and occupancy and
equipment costs, as well as by state and federal income tax expense.



The Bank has 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 our portfolio, both real estate and non-real estate. We have made
significant progress in this initiative. As of December 31, 2021, commercial
real estate and commercial business loans represented 60.97% and 15.82% of the
total loan portfolio, respectively. The purpose of this diversification is to
mitigate our 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 maintains a significant loan serviced portfolio, which provides a steady
source of fee income. As of December 31, 2021, we had mortgage servicing rights,
net of $13.69 million compared to $10.11 million as of December 31, 2020. 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.



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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 deposit do not automatically
reprice as interest rates rise.



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 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.



Other than short term residential construction loans, we do not offer "interest
only" mortgage loans on residential 1-4 family properties (where the borrower
pays interest but no principal for an initial period, after which the loan
converts to a fully amortizing loan). We also do not offer loans that provide
for negative amortization of principal, such as "Option ARM" loans, where the
borrower can pay less than the interest owed on their loan, resulting in an
increased principal balance during the life of the loan. We do not offer
"subprime loans" (loans that generally target borrowers with weakened credit
histories typically characterized by payment delinquencies, previous
charge-offs, judgments, bankruptcies, or borrowers with questionable repayment
capacity as evidenced by low credit scores or high debt-burden ratios) or Alt-A
loans (traditionally defined as loans having less than full documentation).



The level and movement of interest rates impacts the Bank's earnings as well.
The Federal Open Market Committee decreased the federal funds target rate during
the year ended December 31, 2020 from 1.75% to 0.25%. The rate remained
at 0.25% during the year ended December 31, 2021. The rate reductions add
continued pressure on loan yields.





COVID-19



The Company's performance for the year ended December 31, 2021 was solid due to
higher loan production, record deposit generation and net interest income
growth. However, the Company also 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 closely monitoring borrowers and businesses serviced
and is providing debt service relief for those that have been impacted.



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 helped764 customers receive
$45.71 million in SBA PPP loans. The Bank has processed applications for PPP
loan forgiveness for customers, with759 loans representing over $45.31 million
now paid in full. The remaining five SBA PPP loans represent $402,000.



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, with514 loans
representing$15.45 million now paid in full. The remaining 132 PPP loans
represent$4.06 million.



While all industries have and will 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 loans as of December 31, 2021: hotels and lodging
(6.8%), health and social assistance (3.5%), bars and restaurants (2.7%),
casinos (0.8%) and nursing homes (0.4%). 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. During 2020, the
Montana Board of Investments ("MBOI") began offering 12-months of interest
payment assistance to qualified borrowers. As of December 31, 2021, there way
only one remaining loan modification for a nonresidential borrower representing
a loan for $6,000, compared to40 nonresidential borrowers representing $29.00
million, or 3.5% of gross loans excluding loans held-for-sale, as of December
31, 2020. The Bank qualified32 borrowers for the MBOI program
representing$27.25 million in loans, all of which had aged out of the program as
of the third quarter of 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 December 31, 2021 there
remain approximately 15 forbearances approved for residential mortgage loans,
all of which are sold and serviced. Utilization of credit lines were78.6% at
December 31, 2021 to 82.7% at December 31, 2020, which has declined slightly
compared to 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 December 31, 2021, our capital ratios, and our subsidiary bank's 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.



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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, 2021, our goodwill was not impaired. COVID-19 could cause a
further and sustained 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. At December 31, 2021
we had goodwill of $20.8 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.





Acquisitions


The Bank used growth through mergers or acquisitions, in addition to its organic growth strategy.


In January 2019, the Company acquired Big Muddy Bancorp, Inc. ("BMB"), a Montana
corporation, and BMB's wholly-owned subsidiary, The State Bank of Townsend, a
Montana chartered commercial bank ("SBOT"). SBOT operated four branches in
Townsend, Dutton, Denton and Choteau, Montana. The transaction provided an
opportunity to expand market presence and lending activities throughout the
state.



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. ("FCB"), a Montana corporation 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 $377 million of assets, $306 million of deposits
and $208 million in gross loans, based on September 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. As of March 9, 2022, the Company received approval of the
pending merger from the Montana Department of Banking and Financial
Institutions, and the shareholders of both Eagle and FCB have approved the
transaction. The Company is awaiting the approval of the Federal Reserve
Board. The acquisition is expected to close during the first quarter of 2022.
Upon approval, a Form 8-K will be filed to disclose the anticipated closing
date.







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Critical Accounting Policies



Certain accounting policies are important to the understanding of our financial
condition, since they require management to make difficult, complex or
subjective judgments, some of which may relate to matters that are inherently
uncertain. Estimates associated with these policies are susceptible to material
changes as a result of changes in facts and circumstances, including, but
without limitation, changes in interest rates, performance of the economy,
financial condition of borrowers and laws and regulations. The following are the
accounting policies we believe are critical.



Allowance for Loan Losses



We recognize that losses will be experienced on loans and that the risk of loss
will vary with, among other things, the type of loan, the creditworthiness of
the borrower, general economic conditions and the quality of the collateral for
the loan. We maintain an allowance for loan losses to absorb losses inherent in
the loan portfolio. The allowance for loan losses represents management's
estimate of probable losses based on all available information. This allowance
is based on management's evaluation of the collectability of the loan portfolio,
including past loan loss experience, known and inherent losses, information
about specific borrower situations and estimated collateral values, and current
economic conditions. The loan portfolio and other credit exposures are regularly
reviewed by management in its determination of the allowance for loan losses.
The methodology for assessing the appropriateness of the allowance includes a
review of historical losses, internal data including delinquencies among others,
industry data, and economic conditions.



In addition, as an integral part of their examination process, banking
regulators will periodically review our allowance for loan losses and may
require us to make additional provisions for estimated losses based upon
judgments different from those of management. Although management believes that
it uses the best information available to establish the allowance for loan
losses, future adjustments to the allowance for loan losses may be necessary and
results of operations could be adversely affected if circumstances differ
substantially from the assumptions used in making the determinations. Because
future events affecting borrowers and collateral cannot be predicted with
certainty, there can be no assurance that the existing allowance for loan losses
is adequate or that increases will not be necessary should the quality of loans
deteriorate as a result of the factors discussed previously. Any material
increase in the allowance for loan losses may adversely affect our financial
condition and results of operations. The allowance is based on information known
at the time of the review. Changes in factors underlying the assessment could
have a material impact on the amount of the allowance that is necessary and the
amount of provision to be charged against earnings. Such changes could impact
future results.


Good will and other intangible assets




The Company accounts for business combinations under the acquisition method of
accounting. The Company records assets acquired, including identifiable
intangible assets and liabilities assumed at their fair values as of the
acquisition date. Transaction costs related to the acquisition are expensed in
the period incurred. Results of operations of the acquired entity are included
in the consolidated statements of income from the date of acquisition. Any
measurement-period adjustments are recorded in the period the adjustment is
identified.



The excess of consideration paid over fair value of net assets acquired is
recorded as goodwill. Determining the fair value of assets acquired, including
identifiable intangible assets and liabilities assumed often requires
significant use of estimates and assumptions. This may involve estimates based
on third-party valuations, such as appraisals, or internal valuations based on
discounted cash flow analyses or other valuation techniques such as estimates of
attrition, inflation, asset growth rates, discount rates, multiples of earnings
or other relevant factors. Goodwill is not amortized, but is tested at least
annually for impairment.


Other intangible assets are assigned useful lives and are amortized. The determination of useful lives is subjective. See Note 7 to the Consolidated Financial Statements under “Item 8. Financial Statements and Supplementary Data” for more information.

The Company’s accounting policies and discussion of recent accounting pronouncements are included in note 1 to the consolidated financial statements under “Item 8. Financial statements and supplementary data”.

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Financial Condition


December 31, 2021 compared to December 31, 2020




Total assets were $1.44 billion at December 31, 2021, an increase of
$178.30 million, or 14.2% from $1.26 billion at December 31, 2020.Securities
available-for-sale increased by $108.31 million from $162.95 million at December
31, 2020. In addition, loans receivable, net increased by $91.14 million
from December 31, 2020. Total liabilities were $1.28 billion at December 31,
2021, an increase of $174.50 million, or 15.8%, from $1.10 billion at December
31, 2020. The increase was largely due to an increase in deposits
slightly offset by a reduction in FHLB advances and other borrowings. Total
deposits increased by $189.47 million from December 31, 2020. However, FHLB
advances and other borrowings decreased $12.07 million from December 31, 2020.
Total shareholders' equity increased by $3.79 million from December 31, 2020.



Financial Condition Details



Investment Activities



We maintain a portfolio of investment securities, classified as either
available-for-sale or held-to-maturity to enhance total return on investments.
Our investment securities generally include U.S. government and agency
obligations, U.S. treasury obligations, Small Business Administration pools,
municipal securities, corporate obligations, mortgage-backed securities
("MBSs"), collateralized mortgage obligations ("CMOs") and asset-backed
securities ("ABSs"), all with varying characteristics as to rate, maturity and
call provisions. There were no held-to-maturity investment securities included
in the investment portfolio at December 31, 2021 or 2020. All investment
securities included in the investment portfolio are available-for-sale. Eagle
also has interest-bearing deposits in other banks and federal funds sold, as
well as, stock in FHLB and FRB. FHLB stock was $1.70 million and $2.06 million
at December 31, 2021 and 2020, respectively. FRB stock was $2.97 million at
both December 31, 2021 and 2020.



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The following table summarizes investing activities:



                                                                                  December 31,
                                                   2021                               2020                               2019
                                                       Percentage of                      Percentage of                      Percentage of
                                       Fair Value          Total          Fair Value          Total          Fair Value          Total
                                                                             (Dollars in Thousands)
Securities available-for-sale:
U.S. government obligations           $      1,633              0.60 %   $      2,245              1.38 %   $        695              0.55 %
U.S. treasury obligations                   53,183             19.61            5,657              3.47           12,902             10.17
Municipal obligations                      123,667             45.58           99,088             60.81           52,222             41.17
Corporate obligations                        9,336              3.44           10,663              6.54            8,388              6.61
Mortgage-backed securities                  14,636              5.40            7,669              4.71            9,495              7.48
Collateralized mortgage obligations         63,067             23.25           31,189             19.14           33,334             26.27
Asset-backed securities                      5,740              2.12            6,435              3.95            9,839              7.75
Total securities available-for-sale   $    271,262            100.00 %   $    162,946            100.00 %   $    126,875            100.00 %



Securities available for sale have been $271.26 million at December 31, 2021an augmentation of $108.31 millioni.e. 66.5%, of $162.95 million at December 31, 2020. The increase was largely due to purchasing activity due to excess cash levels.




The following table sets forth information regarding fair values, weighted
average yields and maturities of investments. The yields have been computed on a
tax equivalent basis. Maturities are based on the final contractual payment
dates and do not reflect the impact of prepayments or early redemptions that may
occur.



                                                                                                                          December 31, 2021
                                            One Year or Less                  One to Five Years                 Five to Ten Years                  After Ten Years                       Total Investment Securities
                                                        Weighted                          Weighted                          Weighted                           Weighted                         Approximate         Weighted
                                      Fair Value      Average Yield    

Fair value Average return Fair value Average return Fair value Average return Fair value Market value Average return

                                                                                                                       (Dollars in Thousands)
Securities available-for-sale:
U.S. government obligations           $         -              0.00 %   $         -              0.00 %   $     1,633              2.07 %   $          -              0.00 %   $     1,633     $        1,633              2.07 %
U.S. treasury obligations                       -              0.00           5,457              2.76          47,726              0.01                -              0.00          53,183             53,183              0.02
Municipal obligations                         223              2.65           4,843              2.60          27,321              0.03           91,280              0.03         123,667            123,667              0.03
Corporate obligations                       3,003              2.31           3,008              1.18           3,325              0.05                -              0.00           9,336              9,336              0.03
Mortgage-backed securities                      -              0.00               -              0.00             212              0.02           14,424              0.01          14,636             14,636              0.01
Collateralized mortgage obligations             -              0.00           6,853              2.88               -              0.00           56,214              0.01          63,067             63,067              0.01
Asset-backed securities                         -              0.00               -              0.00               -              0.00            5,740              0.01           5,740              5,740              0.01
Total securities available-for-sale   $     3,226              2.33 %   $    20,161              1.78 %   $    80,217              1.13 %   $    167,658              2.09 %   $   271,262     $      271,262              2.07 %




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  Table of Contents



Lending Activities



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



                                                                                             December 31,
                                       2021                         2020                         2019                         2018                         2017
                                           Percent of                   Percent of                   Percent of                   Percent of                   Percent of
                              Amount         Total         Amount         Total         Amount         Total         Amount         Total         Amount         Total
                                                                                        (Dollars in thousands)
Real estate loans:
Residential 1-4 family (1)   $ 101,180          10.82 %   $ 110,802          13.14 %   $ 119,296          15.28 %   $ 116,939          18.92 %   $ 109,911          21.37 %
Residential 1-4 family
construction                    45,635           4.88        46,290           5.49        38,602           4.95        27,168           4.40        25,306           4.92
Total residential 1-4
family                         146,815          15.70       157,092          18.63       157,898          20.23       144,107          23.32       135,217          26.29

Commercial real estate         410,568          43.92       316,668          37.56       331,062          42.41       256,784          41.54       194,805          37.88
Commercial construction
and development                 92,403           9.88        65,281           7.74        52,670           6.75        41,739           6.75        38,351           7.46
Farmland                        67,005           7.17        65,918           7.82        50,293           6.44        29,915           4.84        11,627           2.26
Total commercial real
estate                         569,976          60.97       447,867          53.12       434,025          55.60       328,438          53.13       244,783          47.60

Total real estate loans        716,791          76.67       604,959          71.75       591,923          75.83       472,545          76.45       380,000          73.89

Other loans:
Home equity                     51,748           5.54        56,563           6.71        56,414           7.23        52,159           8.44        52,672          10.24
Consumer                        18,455           1.97        20,168           2.39        18,882           2.42        16,565           2.68        15,712           3.06

Commercial                     101,535          10.86       109,209          12.95        72,797           9.33        59,053           9.56        63,300          12.31
Agricultural                    46,335           4.96        52,242           6.20        40,522           5.19        17,709           2.87         2,563           0.50
Total commercial loans         147,870          15.82       161,451          19.15       113,319          14.52        76,762          12.43        65,863          12.81

Total other loans              218,073          23.33       238,182          28.25       188,615          24.17       145,486          23.55       134,247          26.11

Total loans                    934,864         100.00 %     843,141         100.00 %     780,538         100.00 %     618,031         100.00 %     514,247         100.00 %

Deferred loan fees              (1,725 )                     (2,038 )                     (1,303 )                     (1,098 )                     (1,093 )
Allowance for loan losses      (12,500 )                    (11,600 )                     (8,600 )                     (6,600 )                     (5,750 )

Total loans, net             $ 920,639                    $ 829,503                    $ 770,635                    $ 610,333                    $ 507,404



(1) Excluding loans held for sale

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Loans receivable, net increased $91.14 million to $920.64 million at December
31, 2021. The increase was largely driven by an increase in total commercial
real estate loans of $122.11 million. Construction projects were slow to start
in 2020 and early 2021 due to COVID-19 concerns and supply chain
issues. This increase was offset by decreases in total commercial
loans of $13.58 million, total residential 1- 4 family loans
of $10.27 million, home equity loans of $4.81 million and consumer loans
of $1.71 million.



Total loan originations were $1.56 billion for the year ended December 31, 2021.
Total residential 1-4 family originations were $1.14 billion, which includes
$1.04 billion of originations of loans held-for-sale. Total commercial real
estate originations were $274.40 million. Total commercial originations were
$110.58 million, which includes $19.51 million of SBA PPP loans. Home equity
loan originations totaled $25.59 million. Consumer loan originations totaled
$8.94 million. Loans held-for-sale decreased by $28.80 million, to
$25.82 million at December 31, 2021 from $54.62 million at December 31,
2020 after a robust refinancing period in 2020.



Loan Maturities. The following table sets forth the estimated maturity of the
loan portfolio of the Bank at December 31, 2021. Balances exclude deferred loan
fees and allowance for loan losses. Scheduled principal repayments of loans do
not necessarily reflect the actual life of such assets. The average life of a
loan is typically substantially less than its contractual terms because of
prepayments. In addition, due on sale clauses on loans generally give the Bank
the right to declare loans immediately due and payable in the event, among other
things, the borrower sells the real property, subject to the mortgage, and the
loan is not paid off. All mortgage loans are shown to be maturing based on the
date of the last payment required by the loan agreement, except as noted.



Loans with no declared due date, those with no payment due date, demand loans and loans that have reached maturity are presented as due within six months.



                                                   After One        After Five
                                    One Year      Year to Five       Years to
                                    or Less          Years         Fifteen Years      After Fifteen Years        Total

Total residential 1-4 families (1) $38,411 $13,739 $53,488 $

              41,177     $ 146,815
Total commercial real estate           48,846           48,016           333,732                   139,382       569,976
Home equity                             3,403           15,867            32,062                       416        51,748
Consumer                                  942           12,922             4,367                       224        18,455
Total Commercial                       45,024           52,147            49,483                     1,216       147,870
Total loans (1)                    $  136,626     $    142,691     $     473,132     $             182,415     $ 934,864



(1) Excluding loans held for sale





The following table includes loans by fixed or adjustable rates at December 31,
2021:



                                          Fixed        Adjustable        Total
                                                 (Dollars in Thousands)
Due after December 31, 2022:
Total residential 1-4 family (1)        $  52,669     $     55,735     $ 108,404
Total commercial real estate               27,368          493,762       521,130
Home equity                                43,605            4,740        48,345
Consumer                                   14,679            2,834        17,513
Total commercial                            1,176          101,670       102,846
Total due after December 31, 2022 (1)     139,497          658,741       792,238

Due in less than one year                  18,262          118,364       136,626

Total loans (1)                         $ 157,759     $    777,105     $ 934,864

Percent of total                            16.88 %          83.12 %      100.00 %



(1) Excluding loans held for sale

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Nonperforming Assets. 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 December 31, 2021 and 2020, the Bank had $4,000 and $25,000,
respectively, of real estate owned and other repossessed property.



The State of Montana placed a freeze on foreclosures on March 28, 2020.
Subsequently the State of Montana released the freeze effective May 24, 2020
with the exception of continued protections for those individuals deemed
vulnerable to the coronavirus. The Federal foreclosure moratorium that began
March 18, 2020 was later extended to July 31, 2021. On June 28, 2021, the
Consumer Financial Protection Bureau finalized a rule requiring loan servicers
to enhance their efforts to help homeowners affected by the COVID-19 pandemic.
As a result, servicers could not initiate a foreclosure until the borrower was
more than 120 days delinquent and were effectively prohibited from beginning the
foreclosure process before January 1, 2022. However, the Bank has had minimal
impact due to foreclosures affected by these freezes.



Loans are reviewed on a quarterly basis and are placed on nonaccrual status when
they are 90 days or more delinquent. Loans may be placed on nonaccrual status at
any time if, in the opinion of management, the collection of additional interest
is doubtful. Interest accrued and unpaid at the time a loan is placed on
nonaccrual status is charged against interest income. The interest on these
loans is accounted for on the cash-basis or cost-recovery method, until
qualifying for return to accrual. Loans are returned to accrual status when all
the principal and interest amounts contractually due are brought current and
future payments are reasonably assured. At December 31, 2021, the Bank had
$5.49 million ($4.89 million net of specific reserves for loan losses) of loans
that were nonperforming and held on nonaccrual status. At December 31, 2020, the
Bank had $6.27 million ($5.92 million net of specific reserves for loan losses)
of loans that were nonperforming and held on nonaccrual status.



The following table provides information regarding the Bank's delinquent loans:



                                                                December 31, 2021
                                         30-89 Days                                    90 Days and Greater
                                                       Percentage of                                       Percentage of
                           Number         Amount           Total           Number            Amount            Total
                                   (Dollars in Thousands)                            (Dollars in Thousands)
Loan type:
Real estate loans:
Residential 1-4 family            2     $       21              2.26 %             -       $         -              0.00 %
Commercial real estate            2            788             84.64               -                 -              0.00
Farmland                          2             61              6.55               -                 -              0.00
Other loans:
Consumer                         24             55              5.91               -                 -              0.00
Commercial                        1              6              0.64               -                 -              0.00
Total                            31     $      931            100.00 %             -       $         -              0.00 %




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The following table presents information on non-performing assets:



                                                                   December 31,
                                             2021         2020         2019         2018         2017
                                                              (Dollars in Thousands)
Non-accrual loans
Real estate loans:
Residential 1-4 family                     $    616     $    684     $    618     $    253     $    475
Residential 1-4 family construction             337          337          337          634            -
Commercial real estate                          497          631          583          432            -
Commercial construction and development           -           36           50           13            -
Farmland                                        989        2,245          323            -            -
Other loans:
Home equity                                     100           94           78          469          242
Consumer                                         62          151          156          127          153
Commercial                                      516          537          750          308          107
Agricultural                                  1,718        1,542          499           32            -
Accruing loans delinquent 90 days or
more
Real estate loans:
Residential 1-4 family                            -           34            4          130            -
Residential 1-4 family construction               -          170            -            -            -
Commercial real estate                            -            -            -        1,347            -
Other loans:
Home equity                                       -            -            -            -            -
Commercial                                        -            6            -            -            -
Agricultural                                      -          182        1,805            -            -
Restructured loans
Real estate loans:
Commercial real estate                        1,527        1,633            -            -            -
Commercial construction and development           -           14            -            -            -
Farmland                                        641            -          153            -            -
Other loans:
Home equity                                      15           17           20           22            -
Commercial                                        -            -           74            -            -
Agricultural                                     41          160            -            -            -
Total nonperforming loans                     7,059        8,473        5,450        3,767          977
Real estate owned and other repossessed
property, net                                     4           25           26          107          525
Total nonperforming assets                 $  7,063     $  8,498     $  

5,476 $3,874 $1,502


Total nonperforming loans to total loans       0.76 %       1.00 %       0.70 %       0.61 %       0.19 %
Total nonperforming loans to total
assets                                         0.49 %       0.67 %       0.52 %       0.44 %       0.14 %
Total nonaccrual loans to total loans          0.59 %       0.74 %       0.47 %       0.37 %       0.19 %
Total allowance for loan loss to
nonperforming loans                          177.08 %     136.91 %     157.80 %     175.21 %     588.54 %
Total nonperforming assets to total
assets                                         0.49 %       0.68 %       0.52 %       0.45 %       0.21 %



Loans not accrued at December 31, 2021 and 2020 include $492,000 and
$1.28 millionrespectively acquired loans that deteriorated after the acquisition date.




During the year ended December 31, 2021, the Bank sold three real estate owned
and other repossessed assets resulting in a net loss of $12,000. There was
one write-down on real estate owned and other repossessed assets for a loss of
$10,000 during the year ended December 31, 2021. During the year ended December
31, 2020, the Bank sold five real estate owned and other repossessed assets
resulting in a net loss of $9,000. There were no write-down on real estate owned
and other repossessed assets during the year ended December 31, 2020. During the
year ended December 31, 2021 and 2020, an insignificant amount of interest was
recorded on loans previously accounted for on a nonaccrual basis.



Management, in compliance with regulatory guidelines, conducts an internal loan
review program, whereby loans are placed or classified in categories depending
upon the level of risk of nonpayment or loss. These categories are special
mention, substandard, doubtful or loss. When a loan is classified as substandard
or doubtful, management is required to evaluate the loan for impairment and
establish an allowance for loan loss if deemed necessary. When management
classifies a loan as a loss asset, an allowance equaling up to 100.0% of the
loan balance is required to be established or the loan is required to be
charged-off. The allowance for loan losses is composed of an allowance for both
inherent risk associated with lending activities and specific problem assets.



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Management's evaluation of classification of assets and adequacy of the
allowance for loan losses is reviewed by the Board on a regular basis and by
regulatory agencies as part of their examination process. We also utilize a
third party review as part of our loan classification process. In addition, on
an annual basis or more often if needed, the Company formally reviews the
ratings of all commercial real estate, real estate construction, and commercial
business loans that have a principal balance of $750,000 or more.



The following table reflects our classified assets:



                                                             December 31, 2021
                                   Special
                                   Mention        Substandard       Doubtful         Loss          Total
                                                               (In Thousands)
Real estate loans:
Residential 1-4 family            $        -     $         301     $      199     $        -     $     500
Residential 1-4 family
construction                               -               337              -              -           337
Commercial real estate                 1,527             2,145              -              -         3,672
Commercial construction and
development                                -                 -              -              -             -
Farmland                                 177             1,744             47              -         1,968
Other loans:
Home equity                                -               134              -              -           134
Consumer                                   -                63              -              -            63
Commercial                               130               524              -              -           654
Agricultural                             332             1,444              9              -         1,785
Total loans                            2,166             6,692            255              -         9,113

Real estate owned/repossessed
property, net                                                                                            4

                                                                                                 $   9,117






                                                             December 31, 2020
                                   Special
                                   Mention        Substandard       Doubtful         Loss          Total
                                                               (In Thousands)
Real estate loans:
Residential 1-4 family            $        -     $         857     $      199     $        -     $   1,056
Residential 1-4 family
construction                               -               337              -              -           337
Commercial real estate                 2,568             2,344              -              -         4,912
Commercial construction and
development                               14                36              -              -            50
Farmland                                 136             2,164             53              -         2,353
Other loans:
Home equity                              274               112              -              -           386
Consumer                                   -               151              -              -           151
Commercial                               829               570              -              -         1,399
Agricultural                             355             1,395            121              -         1,871
Total loans                            4,176             7,966            373              -        12,515

Real estate owned/repossessed
property, net                                                                                           25

                                                                                                 $  12,540






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Allowance for Loan Losses. The Bank segregates its loan portfolio for loan
losses into the following broad categories: residential 1-4 family, commercial
real estate, home equity, consumer and commercial. The Bank provides for a
general allowance for losses inherent in the portfolio in the categories
referenced above. General loss percentages which are calculated based on
historical analyses and other factors such as volume and severity of
delinquencies, local and national economy, underwriting standards and other
factors. This portion of the allowance is calculated for inherent losses which
probably exist as of the evaluation date even though they might not have been
identified by the more objective processes used. This is due to the risk of
error and/or inherent imprecision in the process. This portion of the allowance
is subjective in nature and requires judgments based on qualitative factors
which do not lend themselves to exact mathematical calculations such as: trends
in delinquencies and nonaccruals; trends in volume; terms and portfolio mix; new
credit products; changes in lending policies and procedures; and changes in the
outlook for the local and national economy.



At least quarterly, the management of the Bank evaluates the need to establish
an allowance for losses on specific loans when a finding is made that a loss is
estimable and probable. Such evaluation includes a review of all loans for which
full collectability may not be reasonably assured and considers, among other
matters: the estimated market value of the underlying collateral of problem
loans; prior loss experience; economic conditions; and overall portfolio
quality.



Provisions for, or adjustments to, estimated losses are included in earnings in
the period they are established. At December 31, 2021, we had $12.50 million in
allowances for loan losses.



While we believe we have established our existing allowance for loan losses in
accordance with generally accepted accounting principles, there can be no
assurance that bank regulators, in reviewing our loan portfolio, will not
request that we significantly increase our allowance for loan losses, or that
general economic conditions, a deteriorating real estate market, or other
factors will not cause us to significantly increase our allowance for loan
losses, therefore negatively affecting our financial condition and earnings.



In originating loans, we recognize that credit losses will be experienced and
that the risk of loss will vary with, among other things, the type of loan being
made, the creditworthiness of the borrower over the term of the loan and, in the
case of a secured loan, the quality of the security for the loan.



It is our policy to review our loan portfolio, in accordance with regulatory classification procedures, at least quarterly.

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The following table includes information on the allowance for loan losses:



                                                                Years Ended
                                                                December 31,
                                                     2021           2020           2019
                                                           (Dollars in Thousands)

Beginning balance                                 $   11,600     $    8,600     $    6,600

Provision for loan losses                                861          3,130          2,627
Loans charged-off
Commercial real estate                                   (35 )          (18 )         (195 )
Home equity                                                -              -            (75 )
Consumer                                                 (16 )          (36 )          (78 )
Commercial                                                (6 )         (173 )         (380 )
Recoveries
Commercial real estate                                    21             12             17
Home equity                                                -              -              -
Consumer                                                   8             16             26
Commercial                                                67             69             58
Net loans charged-off                                     39           (130 )         (627 )

Ending balance                                    $   12,500     $   11,600     $    8,600

Allowance for loan losses to total loans
excluding loans held-for-sale                           1.34 %         1.38 %         1.10 %
Allowance for loan losses to total
nonperforming loans                                   177.08 %       136.91 %       157.80 %
Allowance for loan losses to nonaccrual loans         227.65 %       184.89 %       236.20 %
Net charge-offs to average loans outstanding
during the period                                       0.00 %         0.01 %         0.08 %



Net allocations to average outstanding loans for each loan category are considered insignificant for the periods presented in the table above.

The following table shows the breakdown of the allowance for loan losses by loan category and the percentage of loans in each category relative to total loans:



                                                                                                  December 31,
                                                    2021                                              2020                                              2019
                                              Percentage of          Loan                       Percentage of          Loan                      Percentage of          Loan
                                               Allowance to       Category to                    Allowance to       Category to                   Allowance to       Category to
                                 Amount      Total Allowance      Total Loans      Amount      Total Allowance      Total Loans     Amount      Total Allowance      Total Loans
                                                                                             (Dollars in Thousands)
Real estate loans:
Residential 1-4 family          $  1,596                12.77 %         15.70 %   $  1,506                12.98 %         18.63 %   $ 1,301                15.13 %         20.23 %
Commercial real estate             7,470                59.76           60.97        6,951                59.92           53.12       4,826                56.12            55.6
Total real estate loans            9,066                72.53           76.67        8,457                72.90           71.75       6,127                71.25           75.83

Other loans:
Home equity                          533                 4.26            5.54          515                 4.44            6.71         477                 5.55            7.23
Consumer                             365                 2.92            1.97          364                 3.14            2.39         284                 3.30            2.42
Commercial                         2,536                20.29           15.82        2,264                19.52           19.15       1,712                 19.9           14.52
Total other loans                  3,434                27.47           23.33        3,143                27.10           28.25       2,473                28.75           24.17

Total                           $ 12,500               100.00 %        100.00 %   $ 11,600               100.00 %        100.00 %   $ 8,600               100.00 %        100.00 %




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Deposits and other sources of funds




Deposits. Deposits are the Company's primary source of funds. Core deposits are
deposits that are more stable and somewhat less sensitive to rate changes. They
also represent a lower cost source of funds than rate sensitive, more volatile
accounts such as certificates of deposit. We believe that our core deposits are
checking, savings, money market and IRA accounts. Based on our historical
experience, we include IRA accounts funded by certificates of deposit as core
deposits because they exhibit the principal features of core deposits in that
they are stable and generally are not rate sensitive. Core deposits were $1.10
billion or 89.8% of the Bank's total deposits at December 31, 2021
($1.07 billion or 87.9% excluding IRA certificates of deposit). The presence of
a high percentage of core deposits and, in particular, transaction accounts
reflects in part our strategy to restructure our liabilities to more closely
resemble the lower cost liabilities of a commercial bank. However, a significant
portion of our deposits remains in certificate of deposit form. These
certificates of deposit, if they mature and are renewed at higher rates, would
result in an increase in our cost of funds.



The following table includes the deposit accounts and the associated weighted average interest rates for each category of deposits:



                                                                                              December 31,
                                                      2021                                         2020                                        2019
                                                                   Weighted                                     Weighted                                   Weighted
                                                     Percent       Average                        Percent       Average                      Percent       Average
                                      Amount        of Total         Rate          Amount        of Total         Rate         Amount       of Total         Rate
                                                                                         (Dollars in Thousands)
Noninterest checking                $   368,846         30.16 %         0.00 %   $   318,389         30.82 %         0.00 %   $ 200,035         24.72 %         0.00 %
Interest-bearing checking               203,410         16.64           0.02         160,614         15.55           0.02       116,397         14.39           0.03
Savings                                 223,069         18.25           0.06         179,868         17.41           0.06       126,991          15.7           0.08
Money market                            277,469          22.7           0.25         202,407         19.59           0.24       132,506         16.38           0.42
Total                                 1,072,794         87.75           0.08         861,278         83.37           0.07       575,929         71.19           0.12
Certificates of deposit accounts:
IRA certificates                         25,333          2.07           0.44          24,693          2.39           0.50        25,240          3.12           0.71
Brokered certificates                         -          0.00           0.00             495          0.05           1.35        10,180          1.26           2.13
Other certificates                      124,422         10.18           0.38         146,617         14.19           0.71       197,644         24.43           1.81
Total certificates of deposit           149,755         12.25           0.39         171,805         16.63           0.68       233,064         28.81           1.70
Total deposits                      $ 1,222,549        100.00 %         0.12 %   $ 1,033,083        100.00 %         0.18 %   $ 808,993        100.00 %         0.55 %




Deposits increased by $189.47 million, or 18.3%, to $1.22 billion at December
31, 2021 from $1.03 billion at December 31, 2020. Money market increased by
$75.06 million, noninterest checking increased by $50.46 million, savings
increased by $43.20 million, and interest-bearing checking increased by
$42.80 million. However, certificates of deposit decreased by $22.05 million.
The decrease was driven by a decrease in other certificates of $22.20 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.


AT December 31, 2021 and 2020, the Company held $444.89 million and $326.53 millionrespectively, in deposit accounts that have reached or exceeded the Federal Deposit Insurance Corporation (“FDIC”) requirements of $250,000 and bigger.




The following table shows the amount of certificates of deposit with balances of
$250,000 and greater by time remaining until maturity as of December 31, 2021:



                          Balance
                          $250,000
                        and Greater
                       (In Thousands)
3 months or less      $          3,853
Over 3 to 6 months               4,482
Over 6 to 12 months              8,391
Over 12 months                   7,746
Total                 $         24,472



Our depositors are primarily residents of the state of Montana.




Borrowings. Deposits are the primary source of funds for our lending and
investment activities and for general business purposes. However, as the need
arises, or in order to take advantage of funding opportunities, we also borrow
funds in the form of advances from FHLB of Des Moines to supplement our supply
of lendable funds and to meet deposit withdrawal requirements. In addition,
during the year ended December 31, 2020, the Bank utilized the FRB's Payroll
Protection Program Loan Funding ("PPPLF") facility as a partial source of
funding for its SBA PPP loans. The Bank has Federal funds lines of credit with
PCBB, PNC, TIB and UBB. Eagle has a line of credit with Bell Bank.



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The following table includes information related to FHLB of Des Moines and other
borrowings:



                                                               Years Ended
                                                               December 31,
                                                     2021         2020          2019
                                                          (Dollars in Thousands)
FHLB advances:
Average balance                                    $  9,410     $  61,252     $  97,000
Maximum balance at any month-end                     16,917        94,585   

123,512

Balance at period end                                 5,000        17,070   

88,350

Weighted average interest rate during the period 1.86% 1.84%

        2.41 %
Weighted average interest rate at period end           1.81 %        1.89 %        2.18 %

FRB's PPPLF facility:
Average balance                                    $      -     $  14,675     $       -
Maximum balance at any month-end                          -        24,065   

Balance at period end                                     -             -   

Weighted average interest rate during the period 0.00% 0.35%

        0.00 %
Weighted average interest rate at period end           0.00 %        0.00 %        0.00 %

Other:
Average balance                                    $    548     $     192     $   2,307
Maximum balance at any month-end                          -             -   

6,311

Balance at period end                                     -             -   

Weighted average interest rate during the period 0.43% 1.15%

        2.11 %
Weighted average interest rate at period end           0.00 %        0.00 %        0.00 %

Total borrowings:
Average balance                                    $  9,958     $  76,119     $  99,307
Maximum balance at any month-end                     16,917       105,820   

124,377

Balance at period end                                 5,000        17,070   

88,350

Weighted average interest rate during the period 1.86% 1.55%

        2.40 %
Weighted average interest rate at period end           1.81 %        1.89 %        2.18 %



Advances on FHLB and other borrowings decreased by $12.07 million for
$5.00 million at December 31, 2021 compared to $17.07 million at December 31, 2020. This decrease is due to maturities.




Other Long-Term Debt. The following table summarizes other long-term debt
activity:



                                                 December 31,                 December 31,
                                                     2021                         2020
                                              Net         Percent          Net         Percent
                                            Amount        of Total       Amount        of Total
                                                          (Dollars in Thousands)
Senior notes fixed at 5.75%, due 2022      $   9,996          33.47 %   $   9,952          33.41 %
Subordinated debentures fixed at 5.5% to
floating, due 2030                            14,718          49.27        14,684          49.29
Subordinated debentures variable, due
2035                                           5,155          17.26         5,155          17.30
Total other long-term debt, net            $  29,869         100.00 %   $  29,791         100.00 %



The total of other long-term debt was $29.87 million at December 31, 2021 compared to $29.79 million at December 31, 2020.

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Shareholders' Equity



Total shareholders' equity increased slightly by $3.79 million or 2.5%, to
$156.73 million at December 31, 2021 from $152.94 million at December 31, 2020.
The increase was impacted by net income of $14.42 million.
This increase was largely offset due to treasury stock purchased through the
Tender Offer of $6.28 million, dividends paid of $3.02 million and other
comprehensive loss of $2.36 million.





Net interest income analysis




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 statement of financial
position 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.



                             Year Ended December 31, 2021                Year Ended December 31, 2020                Year Ended December 31, 2019
                          Average        Interest                     Average        Interest                     Average        Interest
                           Daily           and          Yield/         Daily           and          Yield/         Daily           and          Yield/
                          Balance       Dividends      Cost(4)        Balance       Dividends      Cost(4)        Balance       Dividends      Cost(4)
                                                                            (Dollars in Thousands)
Assets:
Interest earning
assets:
Investment securities   $   215,978     $    4,238         1.96 %   $   166,577     $    3,742         2.24 %   $   135,904     $    3,672         2.70 %
FHLB and FRB stock            4,831            255         5.28           6,534            370         5.65           7,363            408         5.54
Loans receivable(1)         914,804         45,134         4.93         874,669         45,381         5.17         764,075         42,344         5.54
Other earning assets         74,102            120         0.16          44,771            161         0.36           5,030             87         1.73
Total interest
earning assets            1,209,715         49,747         4.11       1,092,551         49,654         4.54         912,372         46,511         5.10
Noninterest earning
assets                      147,534                                     127,339                                      97,645
Total assets            $ 1,357,249                                 $ 1,219,890                                 $ 1,010,017

Liabilities and
equity:
Interest-bearing
liabilities:
Deposit accounts:
Checking                $   190,645     $       47         0.02 %   $   151,745     $       58         0.04 %   $   116,424     $       44         0.04 %
Savings                     198,648            117         0.06         154,224            145         0.09         119,674             85         0.07
Money market                244,113            545         0.22         169,531            473         0.28         124,785            449         0.36
Certificates of
deposit                     158,959            765         0.48         213,696          2,938         1.37         212,370          3,315         1.56
Advances from FHLB
and other borrowings
including long-term
debt                         39,245          1,733         4.42         104,712          2,870         2.73         123,497          3,833         3.10
Total
interest-bearing
liabilities                 831,610          3,207         0.39         793,908          6,484         0.81         696,750          7,726         1.11
Noninterest checking        346,243                                     265,304                                     184,654
Other
noninterest-bearing
liabilities                  22,382                                      19,518                                      12,819
Total liabilities         1,200,235                                   1,078,730                                     894,223

Total equity                157,014                                     141,160                                     115,794

Total liabilities and
equity                  $ 1,357,249                                 $ 1,219,890                                 $ 1,010,017
Net interest
income/interest rate
spread(2)                               $   46,540         3.72 %                   $   43,170         3.73 %                   $   38,785         3.99 %

Net interest
margin(3)                                                  3.85 %                                      3.94 %                                      4.25 %
Total interest
earning assets to
interest-bearing
liabilities                                              145.47 %                                    137.62 %                                    130.95 %




(1)   Includes loans held-for-sale.

(2) The interest rate spread represents the difference between the average return on interest-bearing assets and the average rate on interest-bearing liabilities.

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

(4) For the purposes of this table, tax-exempt income is not calculated in tax equivalent.




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Rate/Volume Analysis



The following table presents 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.



                                           Year Ended December 31, 2021              Year Ended December 31, 2020
                                                        Due to                                    Due to
                                         Volume          Rate         Net         Volume           Rate         Net
                                                                       (In Thousands)
Interest earning assets:
Investment securities                  $    1,110      $   (614 )   $    496     $     829       $   (759 )   $     70
FHLB and FRB stock                            (96 )         (19 )       (115 )         (46 )            8          (38 )
Loans receivable(1)                         2,082        (2,329 )       (247 )       6,129         (3,092 )      3,037
Other earning assets                          105          (146 )        (41 )         687           (613 )         74
Total interest earning assets               3,201        (3,108 )         

93 7,599 (4,456) 3,143


Interest-bearing liabilities:
Checking                                       15           (26 )        (11 )          13              1           14
Savings                                        42           (70 )        (28 )          25             35           60
Money Market                                  208          (136 )         72           161           (137 )         24
Certificates of deposit                      (753 )      (1,420 )     (2,173 )          21           (398 )       (377 )

Advances from FHLB and other borrowings, including long-term debt (1,794 ) 657 (1,137 ) (583 ) (380 ) (963 ) Total interest-bearing liabilities (2,282 ) (995 ) (3,277 ) (363 ) (879 ) (1,242 )

Change in net interest income $5,483 ($2,113) $3,370 $7,962 ($3,577) $4,385




(1)   Includes loans held-for-sale.





Results of Operations



Comparison of operating results for the years ended December 31, 2021 and 2020




Net Income



Eagle's net income for the year ended December 31, 2021 was $14.42 million
compared to $21.21 million for the year ended December 31, 2020. The decrease of
$6.79 million was largely due to an increase in noninterest expense of
$13.50 million and a decrease in noninterest income of $1.30 million. These
changes were partially offset by an increase in net interest income after loan
loss provision of $5.64 million and a decrease in provision for income taxes of
$2.37 million. Basic and diluted earnings per share were both $2.17 for the year
ended December 31, 2021. Basic and diluted earnings per share were $3.12 and
$3.11, respectively, for the prior period.



Net Interest Income



Net interest income increased to $46.54 million for the year ended December 31,
2021, from $43.17 million for the year ended December 31, 2020. This increase of
$3.37 million, or 7.8%, was primarily the result of a decrease in interest
expense of $3.27 million.



Interest and Dividend Income



Interest and dividend income was $49.75 million for the year ended December 31,
2021, compared to $49.65 million for the year ended December 31, 2020, an
increase of $93,000, or 0.2%. Interest and fees on loans decreased to
$45.13 million for the year ended December 31, 2021 from $45.38 million for the
same period ended December 31, 2020. This slight decrease of $247,000, 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 24 basis points, from 5.17% to 4.93%. Interest
accretion on purchased loans was $579,000 for the year ended December 31,
2021,which resulted in a 5 basis point increase in net interest margin compared
to $1.55 million for the year ended December 31, 2020,which resulted in
a 14 basis point increase in net interest margin. Average balances for loans
receivable, including loans held-for-sale, for the year ended December 31,
2021 were $914.80 million, compared to $874.67 million of the prior year period.
This represents an increase of $40.13 million or 4.6% and was impacted by
organic growth and PPP funding. Interest and dividends on investment securities
available-for-sale increased by $496,000 or 13.3% period over period. Average
balances for investments increased to $215.98 million for the year ended
December 31, 2021, from $166.58 million for the year ended December 31, 2020.
Investments have increased in the current period due to excess liquidity.
However, average interest rates earned on investments decreased to 1.96% for the
year ended December 31, 2021 from 2.24% for the year ended December 31, 2020.







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Interest Expense



Total interest expense was $3.21 million for the year ended December 31, 2021,
decreasing from $6.48 million for the year ended December 31, 2020. The decrease
of $3.27 million, or 50.5%, was due to a decrease of $2.14 million in interest
expense on deposits and a net decrease of $1.13 million in interest expense on
total borrowings. The overall average rate on total deposits was 0.13% for the
year ended December 31, 2021 compared to 0.38% for the year ended December 31,
2020. However, the average balance for total deposits was $1.14 billion for the
year ended December 31, 2021 compared to $954.50 million for the year
ended December 31, 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 $104.71 million for the year ended December 31,
2020 to $39.25 million for the year ended December 31, 2021. However, the
average rate paid on total borrowings increased from 2.73% for the year ended
December 31, 2020 to 4.42% for the year ended December 31, 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 Bank recorded
$861,000 in loan loss provisions for the year ended December 31, 2021.
Management made 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 year ended December 31, 2021 when considering the COVID-19
pandemic. Loan loss provisions were $3.13 million for the year ended December
31, 2020, which included $1.40 million 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 outlook
worsens relative to the assumptions we utilized, our allowance for loan losses
will increase accordingly in future periods. Total nonperforming loans,
including restructured loans, net, was $7.06 million at December 31, 2021
compared to $8.47 million at December 31, 2020. The Bank had $4,000 in other
real estate owned and other repossessed assets at December 31, 2021 compared to
$25,000 at December 31, 2020.



Noninterest Income



Total noninterest income was $47.77 million for the year ended December 31,
2021, compared to $49.07 million for the year ended December 31, 2020. The
decrease of $1.30 million, or 2.6% was largely due to a decrease in a mortgage
banking, net of $1.01 million for the year ended December 31, 2021. Mortgage
banking, net includes the impact of fair value changes of loans held-for sale
and derivatives. The net change in fair value of loans held-for-sale and
derivatives was a loss of $5.44 million for the year ended December 31,
2021 compared to a gain of $5.97 million for the year ended December 31,
2020. Mortgage banking, net also includes net gain on sale of mortgage loans
which increased $9.70 million to $46.09 million for the year ended December 31,
2021 compared to $36.39 million for the year ended December 31, 2020. During the
year ended December 31, 2021, $1.06 billion residential mortgage loans were sold
compared to $874.72 million in the same period in the prior year. In addition,
gross margin on sale of mortgage loans for the year ended December 31, 2021 was
4.34% compared to 4.16% for the year ended  December 31, 2020.



Noninterest Expense



Noninterest expense was $74.17 million for the year ended December 31, 2021
compared to $60.67 million for the year ended December 31, 2020. The increase of
$13.50 million, or 22.3%, was largely driven by increased salaries and employee
benefits expense of $9.93 million. The increase in salaries expense is due in
part to higher commission-based compensation related to mortgage loan growth, as
well as overall increased staff levels. In addition, occupancy and equipment
expense increased $1.43 million due to office expansion and the corresponding
depreciation and amortization expense, as well as utilization and maintenance
costs. Other noninterest expense includes a recovery of $736,000 of
mortgage servicing rights incurred during the year ended December 31, 2021.
However, impairment expense on mortgage servicing rights of $792,000 was
recorded for the year ended December 31, 2020.



Provision for Income Taxes



Provision for income taxes was $4.86 million for the year ended December 31,
2021, compared to $7.23 million for the year ended December 31, 2020 due to
decreased income before provision for income taxes. The effective tax rate was
25.2% for the year ended December 31, 2021 compared to 25.4% for the prior year.



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Cash and capital resources



Liquidity



The Bank is required by regulation to maintain sufficient levels of liquidity
for safety and soundness purposes. Appropriate levels of liquidity will depend
upon the types of activities in which the company engages. For internal
reporting purposes, the Bank uses policy minimums of 1.0%, and 8.0% for "basic
surplus" and "basic surplus with FHLB" as internally defined. In general, the
"basic surplus" is a calculation of the ratio of unencumbered short-term assets
reduced by estimated percentages of CD maturities and other deposits that may
leave the Bank in the next 90 days divided by total assets. "Basic surplus with
FHLB" adds to "basic surplus" the additional borrowing capacity the Bank has
with the FHLB of Des Moines.The Bank exceeded those minimum ratios as of
December 31, 2021 and 2020.



The Company's primary sources of funds are deposits, repayment of loans and
mortgage-backed securities, maturities of investments, funds provided from
operations, advances from the FHLB of Des Moines and other borrowings. Scheduled
repayments of loans and mortgage-backed securities and maturities of investment
securities are generally predictable. However, other sources of funds, such as
deposit flows and loan prepayments, can be greatly influenced by the general
level of interest rates, economic conditions and competition. The Company uses
liquidity resources principally to fund existing and future loan commitments. It
also uses them to fund maturing certificates of deposit and demand deposit
withdrawals. In addition, the Bank uses liquidity resources 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 commitments to make loans and management's assessment of Eagle's ability
to generate funds.



Through the year ended December 31, 2021, liquidity levels remained strong, as a
result of PPP loan payoffs and deposit growth. A portion of the excess funds
was deployed into investment securities. Eagle utilized the FRB's PPPLF facility
as a partial source for its SBA PPP loans during the year ended December 31,
2020. However, as of December 31, 2020, Eagle had repaid all PPPLF borrowings.
The Company completed a $40.00 million subordinated debt offering in January
2022. A portion of the net proceeds were used to redeem $10.00 million of senior
notes due in February 2022. The Company closed a $15.00 million subordinated
debt offering in June of 2020, adding to borrowings. In July of 2020, $10.00
million in callable subordinated debt was paid off, reducing overall borrowings.



Comparison of cash flows for the years ended December 31, 2021 and 2020




Net cash provided by the Company's operating activities, which is primarily
comprised of cash transactions affecting net income, was $56.45 million for the
year ended December 31, 2021 compared to $2.12 million for the prior year. Net
cash provided by operating activities was higher for the year ended December 31,
2021 primarily due to changes in loans held-for-sale activity.



Net cash used in the Company's investing activities, which is primarily
comprised of cash transactions related to investment securities and activity in
the loan portfolio, was $232.92 million for the year ended December 31, 2021
compared to $22.04 million for the year ended December 31, 2020.
Available-for-sale securities purchases were $132.18 million during the year
ended December 31, 2021. Net cash used in investing activities for the year
ended December 31, 2021 was also impacted by loan originations being higher than
loan pay-off and principal payments during the year. Loan origination and
principal collection, net was $98.67 million for the year ended December 31,
2021.  Net cash used in investing activities for the year ended December 31,
2020 was due in part to loan originations being higher than loan pay-off and
principal payments during the year. Loan origination and principal collection,
net was $24.29 million for the year ended December 31, 2020. In addition,
purchases of premises and equipment, net was $20.64 million. Available-for-sale
securities purchases were $47.72 million during the year ended December 31,
2020. These uses of cash during the year ended December 31, 2020 were more than
offset by available-for-sale securities sales and maturities, principal payments
and calls of $64.44 million.



Net cash provided by the Company's financing activities was $168.10 million for
the year ended December 31, 2021 compared to $64.80 million for the year ended
December 31, 2020. Net cash provided by financing activities for the year ended
December 31, 2021 was largely impacted by a net increase in deposits of
$189.47 million. This was slightly offset by net payments on FHLB and other
borrowings of $12.07 million. Net cash provided by financing activities for the
year ended December 31, 2020 was impacted by a net increase in deposits of
$137.52 million. This was partially offset by net payment on FHLB and other
borrowings of $73.78 million.





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Capital Resources



At December 31, 2021, 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
8.90% compared to an increase of 15.0% at December 31, 2020. The Bank is within
the guidelines set forth by the Board of Directors for interest rate
sensitivity.



The Bank's Tier 1 leverage ratio, as measured under State of Montana and FRB
rules, decreased from 11.72% as of December 31, 2020 to 10.96% as of December
31, 2021. The Bank's strong capital position helps to mitigate its interest rate
risk exposure.



As of December 31, 2021, the Company's regulatory capital was in excess of all
applicable regulatory requirements and both are deemed "well capitalized"
pursuant to State of Montana and FRB rules. At December 31, 2021, the Bank's
total capital, Tier 1 capital, common equity Tier 1 capital and Tier 1 leverage
ratios amounted to 15.32%, 14.17%, 14.17% and 10.96%, respectively, compared to
regulatory requirements of 10.50%, 8.50%, 7.00% and 4.00%, respectively. At
December 31, 2021, Eagle's consolidated total capital, Tier 1 capital, common
equity Tier 1 capital and Tier 1 leverage ratios were 15.18%, 12.64%, 12.18% and
9,75%, respectively.


Impact of inflation and price changes




Our consolidated financial statements and the accompanying notes, which are
found in Item 8, have been prepared in accordance with generally accepted
accounting principles, which require the measurement of financial position and
operating results in terms of historical dollars without considering the change
in the relative purchasing power of money over time and due to inflation. The
impact of inflation is reflected in the increased cost of our operations.
Interest rates have a greater impact on our performance than do the general
levels of inflation. Interest rates do not necessarily move in the same
direction or to the same extent as the prices of goods and services.



Interest Rate Risk



Interest rate risk is the potential for loss of future earnings resulting from
adverse changes in the level of interest rates. Interest rate risk results from
several factors and could have a significant impact on the Company's net
interest income, which is the Company's primary source of net income. 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 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 in
interest rates of up to 200 basis points or by more than 10.0% given an
immediate decrease in interest rates of up to 100 basis points.



                                       41

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Contents




The following table includes the Banks's net interest income sensitivity
analysis.



Changes in Market        Rate Sensitivity
 Interest Rates      As of December 31, 2021     Policy
 (Basis Points)        Year 1         Year 2     Limits

      +200              4.2%           8.7%      -15.0%
      -100             -2.6%          -7.8%      -10.0%



The following table shows how the Bank’s Economic Value of Equity (“EVE”) would react to changes in interest rates.



Changes in Market         EVE as a % Change from 0 Shock
 Interest Rates     As of December 31, 2021     Board Policy
 (Basis Points)          Projected EVE              Limit
                                              Maximum % change:
      +400                   13.7%                 -40.0%
      +300                   11.7%                 -35.0%
      +200                   8.9%                  -30.0%
      +100                   5.4%                  -20.0%
        0                    0.0%                    0.0%
      -100                  -10.5%                 -20.0%



Off-balance sheet arrangements




As a financial services provider, we routinely are a party to various financial
instruments with off-balance-sheet risks, such as commitments to extend credit
and unused lines of credit. While these contractual obligations represent our
future cash requirements, a significant portion of commitments to extend credit
may expire without being drawn upon. Such commitments are subject to the same
credit policies and approval process accorded to loans we make.



The commitments are summarized as follows:



                                    December 31,
                                 2021          2020
                                   (In Thousands)

Credit commitments $252,485 $173,866
Letter of credit

                  4,129         2,647

© Edgar Online, source Previews

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FHA moves closer to offering 40-year loan modification https://flight93.org/fha-moves-closer-to-offering-40-year-loan-modification/ Thu, 24 Feb 2022 18:01:28 +0000 https://flight93.org/fha-moves-closer-to-offering-40-year-loan-modification/ the Federal Housing Administration (FHA) is working to expand the COVID-19 loss mitigation program to include the option of a 40-year loan modification with a partial claim, a recognition that some borrowers coming out of forbearance are still facing financial challenges. Julienne Joseph, Assistant Assistant Secretary in the Office of Single Family Housing for the […]]]>

the Federal Housing Administration (FHA) is working to expand the COVID-19 loss mitigation program to include the option of a 40-year loan modification with a partial claim, a recognition that some borrowers coming out of forbearance are still facing financial challenges.

Julienne Joseph, Assistant Assistant Secretary in the Office of Single Family Housing for the FHA at the US Department of Housing and Urban Development (HUD), said the government agency is “almost there” and “warming up” by offering the option to borrowers.

“As far as the 40-year partial claim goes, I would say probably within the next 60 days we will know more about what we can do about it,” Joseph said Wednesday at the 2022 conference and expo on Orlando MBA maintenance solutions. , Florida.

She added: ‘Of course we believe the clock is ticking, particularly as the national emergency has been extended. On February 18, President Biden extended the declaration of national emergency for the COVID-19 pandemic beyond March 1.

HUD did not immediately return a request for additional information about its plans.

In September, the FHA released a draft mortgage letter proposing a 40-year loan modification combined with a partial claim. The goal is to help borrowers achieve the targeted 25% reduction in the monthly principal and interest portion of their mortgage payments.

The FHA proposal only came after ginnie mae announced in June that it was preparing to introduce a new 40-year mortgage term for its issuers. Lenders and managers had previously expressed concern over the public company’s inability to buy long-term loans, a mortgage lobbyist told Housingwire.

“We have begun work to make this security product available because an extended term of up to 40 years can be a powerful tool in reducing monthly payment obligations in an effort to retain the home,” said Michael Drayne, vice-president. interim executive chairman of Ginnie Mae, in a statement.

Industry stakeholders have asked for more time to adjust to the change. In an October letter, the Housing Policy Council (HPC) and Mortgage Bankers Association (MBA) asked the FHA to delay implementing the new option until the first quarter of 2022. They also asked the government agency for a 90-day window to begin offering the loan modification.

“Demanding repairers implement a wide range of policy changes over the past few months has been difficult and we expect this to continue through the first quarter of 2022,” they said in a letter to the company. FHA.

The FHA is investigating the right place to offer the 40-year loan modification with partial claim in the loss mitigation “waterfall,” which provides levels of assistance to help borrowers pay their mortgage.

The new loan modification will likely be offered toward the end of this process because the FHA doesn’t want it to be too “intrusive,” according to Joseph. The option, which can help borrowers during the pandemic, could be part of the FHA’s standard amendment protocols.

Other government entities, such as Fannie Mae and Freddie Mac, already offer a loan modification term of 40 years. According to HUD’s website, its loan modification option extends the term of the mortgage to 360 months at a fixed interest rate.

The partial claim, however, allows arrears to be placed in a zero-interest subordinate lien against the property to be paid after the final mortgage payment, if the loan is refinanced or the property is sold, whichever comes first.

The 40-year loan modification with partial debt combines the two options. “It is for those who obviously have the most difficulty. They may have gone back to work, but their income is lower than before the pandemic,” a mortgage lobbyist who participated in discussions with the FHA told HousingWire.

According to the latest MBA data, 650,000 owners were in forbearance plans as of January 31. Renegotiated loans in Ginnie Mae’s portfolio fell three basis points from December to January, to 1.60% of repairers’ portfolio volume.

Over the past 19 months, MBA data revealed that 29.1% of total forbearance exits resulted in a loan deferral or partial claim. About 19% of these borrowers continued to pay during the forbearance period. However, 17% were borrowers who had not made their monthly payments and did not have a loss mitigation plan.

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PLYMOUTH INDUSTRIAL REIT, INC. : Change of Directors or Principal Officers, Financial Statements and Schedules (Form 8-K) https://flight93.org/plymouth-industrial-reit-inc-change-of-directors-or-principal-officers-financial-statements-and-schedules-form-8-k/ Wed, 23 Feb 2022 17:28:03 +0000 https://flight93.org/plymouth-industrial-reit-inc-change-of-directors-or-principal-officers-financial-statements-and-schedules-form-8-k/ Article 5.02 Departure of directors or certain officers; Election of directors; Appointment of certain leaders; Compensatory provisions of certain executives. (b) As previously announced in December 2021to February 23, 2022, Daniel C. Wright resigned as Executive Vice President and Chief Financial Officer of Plymouth Industrial REIT, Inc. (the company”). (c) On February 23, 2022, the […]]]>

Article 5.02 Departure of directors or certain officers; Election of directors; Appointment of certain leaders; Compensatory provisions of certain executives.

(b) As previously announced in December 2021to February 23, 2022, Daniel C. Wright resigned as Executive Vice President and Chief Financial Officer of
Plymouth Industrial REIT, Inc. (the company”).

(c) On February 23, 2022, the Board of Directors of the Company (the “Board”) appointed Antoine Saladinothe current senior vice president and chief accounting officer of the company, as executive vice president and chief financial officer of the company.

Mr Saladino48, has served as the company’s senior vice president and chief accounting officer since 2020. Previously, Mr Saladino served as chief accounting officer of New York City REIT and American Finance Trust, two publicly traded REITs, from 2017 to 2019 and vice president of finance and corporate controller of the High Companies from 2015 to 2017. Prior to the High Companies, Mr Saladino served as vice president of the Ryland Groupa publicly traded new home builder, and worked for Ernst & Young LLP in his real estate practice, focusing primarily on publicly traded REITs. Mr Saladino is a chartered accountant and obtained a bachelor of science from
California State Universityholder of a Master of Science in University of Virginiaand a master’s degree in business administration from the University of Chicago.

There are no family relations between Mr Saladino and any director, officer or person designated or chosen by the Company to become a director or officer of the Company. In addition, there were no transactions involving Mr Saladino this would require disclosure under Regulation SK 404(a).

The Company has entered into an employment contract with Mr Saladinoeffective February 23, 2022. As part of the employment contract, Mr Saladino reports directly to the Board. The initial term of the employment contract will end on December 31, 2024. On this date, and on each one-year anniversary subsequent to this date, the duration of the employment contract will be automatically extended by one year, unless terminated early.

As part of the employment contract, Mr Saladino will receive an annual base salary of $325,000, which may be increased at the discretion of the Board Compensation Committee. Besides, Mr Saladino will be eligible to receive a targeted annual discretionary cash bonus at 100% of his then-current annual base salary. The actual amount of such bonuses will be determined based on the achievement of applicable company and/or individual performance objectives, as determined by our Compensation Committee. In addition, beginning in calendar year 2020 and for the duration of his employment, Mr Saladino has been and will be eligible to receive an annual share award, as determined by our Compensation Committee in its sole discretion. Mr Saladino is also eligible to participate in the Company’s usual health, welfare and benefits plans and, subject to certain restrictions, health care benefits will be provided to him and his eligible dependents , at the sole expense of the Company. Mr Saladino will accumulate four weeks of paid vacation per year.

In accordance with the terms of the employment contract, if At Mr. Saladino’s employment is terminated by the Company without “cause”, by Mr Saladino for a “good reason” (each as defined in the applicable employment contract) or because the Company chooses not to renew the term of the employment contract, then, in addition to the accrued amounts, he will be entitled to receive this following :

      • An amount, payable over a 12-month period, equal to two times the sum of
        (1) Mr. Saladino's annual base salary then in effect, (2) the average
        annual bonus earned by Mr. Saladino for the two prior fiscal years
        (substituting target bonus in the average for any fiscal year not yet
        completed if fewer than two fiscal years have been completed) and (3)
        the average value of any annual equity awards(s) made to Mr. Saladino
        during the prior two fiscal years (excluding the initial grant of
        restricted stock described above, any award(s) granted pursuant to a
        multi-year, outperformance or long-term performance program and any
        other non-recurring awards), or if fewer than two years have elapsed,
        over such lesser number of years; and
      • accelerated vesting of all outstanding equity awards held by Mr.
        Saladino as of the termination date and Company-paid continuation
        healthcare coverage for 18 months after the termination date.





At Mr. Saladino’s the right to receive the severance payments and benefits described above is subject to the delivery and non-revocation by him of an effective general receipt in favor of the Company. The employment contract also contains customary confidentiality and non-solicitation clauses.

In the event of termination of employment due to death or disability, Mr Saladino or his estate will be entitled to accelerated vesting of all outstanding stock awards held by Mr Saladino from the date of termination, in addition to the accrued amounts. In addition, upon a change of control of the Company (as defined in the Company’s Second Amended and Restated Incentive Plan 2014), Mr Saladino will be entitled to accelerated vesting of all outstanding stock awards held by him on the date of the change of control. Further, under the contract of employment, to the extent that any change in control, payment or benefit would be subject to excise tax imposed in connection with Section 4999 of the Revenue Code 1986, as amended, such payments and/or benefits may be subject to a reduction of the “best salary cap” to the extent necessary for Mr Saladino receives the greater of (a) the net amount of payments and benefits in the event of a reduced change of control such that such payments and benefits will not be subject to excise tax and (b) the net amount of payments and benefits in the event of a change of control without such reduction.

The Company has entered into a change of control separation agreement with Mr Saladino (the “Change of Control Agreement”). The change of control agreement provides that in the event At Mr. Saladino’s his employment is terminated other than for “cause” or if he resigns for “cause” (each as defined in the change of control agreement) following a change of control of the Company (or before, but in anticipation of a change of control of the Company), Mr Saladino will be entitled to certain severance payments, consisting of: an amount equal to twice the sum of (l) At Mr. Saladino’s annual base salary then in effect, (2) the average annual bonus earned by Mr Saladino for the two previous fiscal years (replacing the target bonus in the average of any fiscal year not yet completed if less than two fiscal years have been completed) and (3) the average value of any annual stock award made to Mr Saladino in the prior two years, accelerated vesting of all outstanding equity awards held by Mr Saladino from the date of termination and continued medical coverage paid by the Company for 18 months after the date of termination. The term of the Change of Control Agreement is for three years and will be automatically renewed for additional one-year periods.

The foregoing are summaries of the material terms of At Mr. Saladino’s Employment Agreement and Change of Control Agreement and are subject in their entirety to the terms of the Employment Agreement and Change of Control Agreement, copies of which are filed respectively as Exhibit 10.1 and Exhibit 10.2 to this Current Report at Form 8-K and are incorporated herein by reference.

Item 9.01 Financial statements and supporting documents.

Exhibit No.   Description

   10.1         Employment Agreement with Anthony Saladino, dated as of February
              23, 2022

   10.2         Change in Control Severance Agreement with Anthony Saladino, dated
              as of December 12, 2021

© Edgar Online, source Previews

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Student loan repayment plan promises forgiveness but rarely delivers https://flight93.org/student-loan-repayment-plan-promises-forgiveness-but-rarely-delivers/ Sun, 06 Feb 2022 20:14:09 +0000 https://flight93.org/student-loan-repayment-plan-promises-forgiveness-but-rarely-delivers/ (NerdWallet) – Canceling student loans through income-contingent repayment sounds like the best of both worlds: a monthly payment matched to your salary that disappears – along with any remaining balance – after a certain number of years. Corn a new NerdWallet analysis finds that most borrowers will probably never see this debt forgiven, despite promising […]]]>

(NerdWallet) – Canceling student loans through income-contingent repayment sounds like the best of both worlds: a monthly payment matched to your salary that disappears – along with any remaining balance – after a certain number of years.

Corn a new NerdWallet analysis finds that most borrowers will probably never see this debt forgiven, despite promising to do just that.

Projections show that even when federal borrowers make these income-contingent payments each month, most will pay off their loans before they reach their forgiveness date, and those who get their debt forgiven will still rack up thousands in interest. and will have to pay a high tax. charged.

Although income-oriented plans are still the best choice for borrowers who have to reduce their monthly payments due to unemployment or who want to reduce them as a safety net, they are not a long-term strategy for paying down debt, especially for borrowers earning more than $30,000 per year.

Federal student loan repayments are set to resume May 2 after more than two years of pandemic forbearance. As millions of borrowers consider their best options for dealing with their debt, here’s how IDR could fit into their plans.

How is the income-based cashback discount supposed to work?

At the end of 2021, 33% of all federal student loan borrowers are enrolled in one of four income-based repayment plansaccording to federal data.

The IDR plan you are most likely to access is called Revised Pay As You Earn or REPAYE. It caps payments at 10% of your discretionary income and sets your new repayment term at 20 years for undergraduate debt or 25 years for those with graduate debt. If you haven’t repaid your debt at the end of your term, the rest is forgiven.

The IDR often reduces your monthly payment, but whether or not you see a forgiveness depends on your loan principal, interest rate, and income over time.

“We heard about the unaffordability of [IDR payments], but this is not the crucial point; it’s that promise that you won’t be stuck in a life of debt — that’s the piece that didn’t quite hit,” says Persis Yu, director of policy and general counsel at the Student Borrower Protection Center.

The National Consumer Law Center and the Student Borrower Protection Center reported in September 2021 that only 32 borrowers had ever obtained a discharge through IDR since the program’s inception in 1995. The majority of borrowers currently enrolled in the ‘IDR participate in the REPAYE plan, which was launched in December. 2015, and are not expected to be released until 2035, at the earliest.

Forgiveness is not feasible for most borrowers

NerdWallet’s projections, for the sake of consistency, do not take into account several circumstances that could derail or delay repayment, such as payment pauses, loss of income, stagnant wages, or the addition of the income of a spouse in calculating a borrower’s monthly payment.

Analysis:

  • Considers two debt levels, based on direct federal loan limits: $27,000 for undergraduates and $129,500 for those with undergraduate and undergraduate debt.
  • Considers nine potential starting salaries ranging from $20,000 to $100,000 and assumes annual salaries will increase 3% year over year.
  • Includes consolidated interest rates that reflect recent years’ rates that a borrower could reasonably have.
  • Measures the effect on federally taxed income for those who get loan forgiveness, using 2021 tax calculations.

The analysis shows that only two groups of borrowers – those with starting salaries of $20,000 and $30,000 – can expect to have their loans forgiven on $27,000 of debt. Additionally, the borrower with a starting salary of $20,000 would accrue $19,128 in interest and still pay $6,280 in income tax on the total canceled debt of $31,027. The borrower with a starting salary of $30,000 would accrue $15,164 in interest over time and only see $193 forgiven.

A borrower with a starting salary of $40,000 would pay off their loans in 149 months (about 12.4 years) while borrowers with a much higher starting salary of $100,000 would pay off their debt in 42 months – just three years and half.

Starting salary (3% increase per year) Months until loans are repaid Total the borrower pays
$40,000. 149. $35,286.
$50,000. 106. $33,021.
$60,000. 81. $31,324.
$70,000. 66. $31,044.
$80,000. 55. $30,123.
$90,000. 47. $29,303.
$100,000. 42. $30,275.

Low-income borrowers are most likely to benefit from the IDR rebate. However, there is strong evidence that this group of borrowers is not the ones signing up. A July 2020 study by Third Way, a nonpartisan think tank, found that those with very low incomes ($12,500 or less) are less likely to enroll, even though they benefit the most. The research also found that borrowers with more than $50,000 in student debt are most likely to enroll in IDR.

Daniel Collier, one of the study’s authors and assistant professor of higher education and adult education at the University of Memphis, says most people who can afford their payments on a traditional schedule can use reimbursement based on income for their financial security.

“Forgiveness isn’t as generous as people like to think,” Collier says. “Most people who could pay off their debts on a traditional time and in a traditional way are just buying insurance, really.”

Obtaining forgiveness is expensive

Even if you see your loans canceled, you’ll rack up a ton of interest along the way.

At the lowest-paying end, a borrower with a starting salary of $20,000 and $129,500 in student loans would see $237,338 forgiven in principal and interest, but accrue $132,457 in interest only over the course of his term. 25 year repayment period.

For a borrower with a starting salary of $50,000 and the same amount of debt, the amount of principal and interest forgiven would be $162,708, but the borrower would have accrued $167,205 in interest alone over time.

For those with a starting salary of $80,000, the borrower would only see $26,727 of their principal and interest forgiven, but will have accrued $140,601 in interest over time.

Borrowers could face a high tax burden

For now, any amount remitted through an income-tested refund is not considered taxable income by the federal government until the end of 2025. But if you reach the rebate after that time, you could face a costly downside: a high tax bill.

The amount forgiven is added to your total taxable income, which would increase the amount you owe the government. And it could push you into a higher tax bracket.

“Once you’re down the IDR rabbit hole, there’s no incentive to jump, but borrowers know there’s going to be this huge tax bomb in a few years and they’ll have to pay that bill as well,” says Collier.

A borrower with a starting salary of $40,000 and high debt, for example, would be pushed from the 22% tax bracket to the 32% tax bracket upon forgiveness, assuming distributions of today’s tax brackets. Without the forgiven amount, this borrower would pay $13,637 (in current dollars) on his income; with the pardon, they would pay an additional $21,237 in income tax.

You should always use the income-contingent rebate if you need it

Plug your loan information into Federal Student Aid loan simulator to get an idea of ​​what your monthly bills and costs might look like under an IDR plan. You can subscribe to an IDR plan at any time. You must recertify your earnings each year.

IDR may not offer effective forgiveness, but it is a safety net you should use when you:

  • You have a low income or you are unemployed (you may see a $0 payment).
  • Cannot afford payments on a standard 10-year plan.
  • You don’t want to suspend payments and accrue interest.
  • You have a high salary and want to pay off your debt quickly.
  • Pursue the cancellation of public service loans.

You should not use the income contingent rebate when you:

  • Can afford your monthly payments on a standard 10-year plan.
  • You want to avoid paying more over time.

You must recertify if you:

  • You want to stick with the income-based reimbursement.
  • See a drop in your income, at any time.
  • You want to continue to seek forgiveness via PSLF or IDR.

You will need to submit an application on studentaid.gov or use a paper form. The application and a demonstration of the process are available on the Federal Student Aid website. Until July 31, 2022, borrowers can self-report their income without submitting tax documentation when applying for an income-based refund. Your agent will notify you when your application is complete and let you know your new monthly amount.

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GCR Ratings Proposed Series 1 Bond Issue by Presco Plc up to N30 Billion https://flight93.org/gcr-ratings-proposed-series-1-bond-issue-by-presco-plc-up-to-n30-billion/ Sun, 06 Feb 2022 09:30:58 +0000 https://flight93.org/gcr-ratings-proposed-series-1-bond-issue-by-presco-plc-up-to-n30-billion/ Sunday 06 February 2021 / 08:00 / by GCR Ratings / Header Image Credit: Presco PLC GCR Ratings (“GCR”) has assigned a National Long Term Indicative Rating of A-(NG)(IR) to Presco Plc offered up to N30 billion of Series 1 senior unsecured bonds with the outlook seen as stable. *IR stands for indicative rating The […]]]>

Sunday 06 February 2021 / 08:00 / by GCR Ratings / Header Image Credit: Presco PLC

GCR Ratings (“GCR”) has assigned a National Long Term Indicative Rating of A-(NG)(IR) to Presco Plc offered up to N30 billion of Series 1 senior unsecured bonds with the outlook seen as stable.


*IR stands for indicative rating

The indicative rating assigned to the proposed N30 billion Series 1 senior unsecured bond reflects the long-term rating of the issuer, namely Presco Plc, one of Nigeria’s leading palm oil producers. GCR has assigned a nationwide long-term issuer rating of A-(NG) to issuer with a stable outlook in February 2022. The rating balances Presco’s robust earnings trajectory, moderate leverage and strong competitive position in Nigeria’s palm oil producing segment against the valuation weakest of its parent company, Siat NV Belgium (“Siat NV” or “the group”). (link to the issuer’s ARC)

Presco Plc is in the process of registering a N50 billion bond issuance program (“the programme”) with the Securities and Exchange Commission, with up to N30 billion to be issued in series bonds 1 under the program, with an expected duration of seven years, including a three-year moratorium on the principal amount from the date of issue. The Series 1 Bond will include a call option whereby the Issuer may choose to make early redemption of the Bonds, in whole or in part, at the expiry of a period of 48 months from the date issue pursuant to the provisions of the Series 1 Trust Indenture. Repayment of principal on the Series 1 Bond will be on an amortized basis, after the principal moratorium period or on call, while the coupon payment will accrue from the date of issue and will be due. and payable semi-annually in arrears, up to and including the maturity date.

The Series 1 Notes will be direct, unconditional, senior, unsubordinated and unsecured obligations of the Issuer and will rank past bet without any preference between them. Bonds also rank past bet with all other senior unsecured and unsubordinated obligations assumed by the Issuer other than those mandatorily preferred by law.

Being senior unsecured debt, the proposed Series 1 Notes will rank past bet with all other senior unsecured creditors of the Issuer. Thus, the Bonds will have the same national long-term rating as that granted to the Issuer. Consequently, any change in the long-term rating of the Issuer would impact the rating of the Bond.

The stable outlook reflects GCR’s view that Siat NV will maintain the recent return to profitability and stable cash flow and significantly reduce debt. GCR also expects Presco to continue to post strong revenue growth and solid margins, which should cushion the debt surge.

As Presco’s rating is currently constrained by its parent company, a rating upgrade is contingent on Siat NV’s strengthening financial condition, including 1) Siat NV’s ability to demonstrably sustain recent earnings improvements and net profits, 2) significantly reduce gross debt to more sustainable levels, 3) improve corporate governance deficiencies. This needs to be complemented by sound cash management at Presco such that 12-month cash coverage exceeds 2x and net debt to EBITDA moderates into the 1x-1.25x range.

A downgrade move could result from 1) failure to address Siat NV’s concerns and further weak earnings performance, 2) a significant increase in debt, whether at Presco or the Group.

Proshare Nigeria Pvt.  ltd.

Related News

1. Presco Plc will hold a board meeting on January 26, 2022

2. Presco Plc maintained its outperform rating when reviewing third quarter 2021 results

3. Review of Presco Q4’20 and Q1’21 results: strong outlook for FY21 2021 thanks to strong fundamentals

4. PRESCO Declares N5.3 Billion PAT in Audited 2020 Results and Proposes Final Dividend of N200,000; (SP:N72.00k)

5. Presco postpones board meeting to March 23, 2021

6. PRESCO notifies the date of the board meeting and the start of the closed period

seven. PRESCO reports N7bn PAT in fourth quarter 2020 results, (SP: N75.00k)

8. PRESCO notifies the date of the board meeting and the start of the closed period

9. Presco Plc Q3 2020 Unaudited Results – Cost Pressures Keep Profits Flat

ten. PRESCO Reports N5bn PAT in Third Quarter 2020 Results, (SP: N65.90k)

Proshare Nigeria Pvt.  ltd.

Proshare Nigeria Pvt.  ltd.

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ORPEA: Information on the financial conditions surrounding the departure of Mr. Yves Le Masne https://flight93.org/orpea-information-on-the-financial-conditions-surrounding-the-departure-of-mr-yves-le-masne/ Sun, 30 Jan 2022 21:52:00 +0000 https://flight93.org/orpea-information-on-the-financial-conditions-surrounding-the-departure-of-mr-yves-le-masne/ PUTEAUX, France–(BUSINESS WIRE)–Regulatory news: At its meeting of January 30, 2022, the Board of Directors set the financial conditions for the termination of Mr. Yves Le Masne’s duties as Chief Executive Officer of ORPEA (Paris:ORP), with effect from January 30, 2022. Fixed annual compensation Mr. Yves Le Masne will receive, pro rata temporis for the […]]]>

PUTEAUX, France–(BUSINESS WIRE)–Regulatory news:

At its meeting of January 30, 2022, the Board of Directors set the financial conditions for the termination of Mr. Yves Le Masne’s duties as Chief Executive Officer of ORPEA (Paris:ORP), with effect from January 30, 2022.

Fixed annual compensation

Mr. Yves Le Masne will receive, pro rata temporis for the period beginning on January 1, 2022 and ending on January 30, 2022, his fixed annual compensation (which is €760,000).

Annual premium payment

For 2021

Mr. Yves Le Masne’s annual bonus for the 2021 financial year will be determined, on the recommendation of the Appointments and Remuneration Committee, by the Board of Directors, which will approve the 2021 annual accounts, in accordance with the quantifiable and qualitative criteria set by the Board of Directors of April 22, 20211based on the Company’s performance in 2021.

The payment of Mr. Yves Le Masne’s total short-term bonus for 2021 is capped at 100% of his fixed annual compensation if the objective is achieved, with a maximum of 150% of this compensation in the event of outperformance.

The payment of this bonus will be subject to the prior approval of the General Meeting called in 2022 to approve the financial statements for the year ended December 31, 2021 (the “General Assembly 2022“).

For 2022

Given the departure date of Mr. Yves Le Masne, it has been decided that he will not be entitled to any short-term bonus for 2022.

Severance pay

An adjustment has been granted to Mr. Yves Le Masne so that he is entitled to an indemnity corresponding to 24 months of gross fixed annual compensation and bonuses (multiple of the average monthly compensation due and paid during the last two financial years), the exclusion of any exceptional and/or long-term compensation, in the event of termination of his duties as executive corporate officer2 and provided that the average of the bonuses paid for the last two financial years preceding that of the departure of the Chief Executive Officer is equal to or greater than 75% of the target bonus excluding exceptional compensation, this amount being reduced proportionally in the event of the average bonuses received during over the past two years have been between 50% and 75% of the target bonus, excluding exceptional compensation, and no benefit has been paid below a threshold of 50%.

This formula, approved annually by the General Meeting of shareholders since 2011, was approved for the last time as part of Mr. Yves Le Masne’s compensation policy for the 2021 financial year at the General Meeting of June 24 2021.

The Board of Directors has decided to defer its decision on the severance payment until the results of the independent evaluation initiated by the Board of Directors in accordance with the press release published on January 26, 2022.

Performance shares – Benefits of any kind

Mr. Yves Le Masne received 53,254 performance shares not yet vested on the date of termination of his duties under the 2019, 2020 and 2021 free share plans.

The Board of Directors has decided to postpone any decision likely to be taken in accordance with the compensation policy concerning a possible lifting of the condition of presence of said performance shares until the results of the above-mentioned independent assessment.

Mr. Yves Le Masne’s benefits in kind (unemployment insurance, company car and application of collective provident schemes and reimbursement of health expenses) will end on January 30, 2022, the date of termination of his duties.

Compensation of the Chairman and Chief Executive Officer

Mr. Philippe Charrier, Chairman of the Board of Directors, has been appointed Chief Executive Officer as of today.

The Board of Directors will determine, on the recommendation of the Appointments and Compensation Committee, the 2022 compensation policy applicable to the Chairman and Chief Executive Officer, consistent with the principles set out in the compensation policy for the Chief Executive Officer which was applicable to Mr. Yves Le Masne.

In accordance with the provisions of Articles L. 225-53 and L. 225-37-2 of the French Commercial Code and the recommendations of the AFEP-MEDEF Corporate Governance Code, these components of compensation will be published following a decision by the Board of Directors and will be submitted to the approval of the 2022 General Assembly.

About ORPEA (www.orpea-corp.com)

Created in 1989, ORPEA is one of the major world leaders in comprehensive dependency care, with a network of 1,156 establishments comprising 116,514 beds (including 26,359 under construction) in 23 countries, divided into 5 zones geographic:

– France Benelux: 586 establishments / 49,207 beds (including 5,672 under construction)

– Central Europe: 268 establishments / 28,419 beds (including 5,828 under construction)

– Eastern Europe: 142 establishments / 15,255 beds (including 4,101 under construction)

– Iberian Peninsula/Latin America: 158 establishments/23,108 beds (including 10,373 under construction)

– Rest of the world: 2 establishments/525 beds (including 385 under construction)

ORPEA is listed on Euronext Paris (ISIN code: FR0000184798) and is part of the SBF 120, STOXX 600 Europe, MSCI Small Cap Europe and CAC Mid 60 indices.


1 See description on page 215 of the 2020 Universal Registration Document.

2 See description on page 217 of the 2020 Universal Registration Document.

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Union budget 2022: the common man’s wish list https://flight93.org/union-budget-2022-the-common-mans-wish-list/ Sun, 30 Jan 2022 17:10:01 +0000 https://flight93.org/union-budget-2022-the-common-mans-wish-list/ The Union budget for the financial year 2022-23 will be presented as planned on February 1, 2022 by Finance Minister Nirmala Sitharaman. The common man (read as an honest taxpayer) believes that the government should bring some relief and bring joy into their lives through a benign budget. What are taxpayers’ expectations? Here’s the common […]]]>

The Union budget for the financial year 2022-23 will be presented as planned on February 1, 2022 by Finance Minister Nirmala Sitharaman. The common man (read as an honest taxpayer) believes that the government should bring some relief and bring joy into their lives through a benign budget. What are taxpayers’ expectations? Here’s the common man’s wish list:

Increase in standard deduction

The standard deduction for employees was reintroduced in the 2018-19 financial year after being abolished in the 2005-06 financial year. The salaried class and retirees could claim certain expenses for transportation, medicine, etc. The flat-rate deduction was introduced in place of the transport allowance and medical reimbursement which were abolished. The common man has had a torrid year with unexpected expenses due to the Covid-19 pandemic coupled with rising inflation. Hence, there is a need to increase the standard deduction from the current Rs. 50,000 to Rs. 1,000,000 and this will be high on the wish list of the common man.

Income tax exemption ceiling

This will always be high on the common man’s wish list and he will be praying more than ever for the finance minister to raise the exemption cap. Incidentally, the FM had introduced the new personal income tax regime in the 2020 budget and provided the option for individual taxpayers to choose one of the tax regimes. Since the tax exemption limit in both cases is Rs 2,50,000, the aam aadmi hopes that this will be raised to Rs 5,00,000. Although an increase in the exemption limit means a loss of revenue for the government, the taxpayer feels that the government can make up for the loss as GST recoveries have been strong so far.

Reduction of interest for late payment of withholding tax

Taxpayers with total tax payable of Rs 10,000 or more in a financial year must pay advance tax, which is the practice of “pay as you earn” instead of paying tax once at the end of the financial year. If the advance tax is not paid quarterly by June 15, September 15, December 15 and March 15 of the fiscal year, the taxpayer must pay a penalty of 12% per annum for any failure to pay withholding tax under article 234B of the IT law. The taxpayer expects the penalty interest to be either waived or at least halved to 6%.

Deduction under Section 80C

Individuals can claim a maximum deduction of Rs 1,50,000 under Section 80C by investing in schemes such as PPF, ELSS, Sukanya Samriddhi Yojana, NPS, Five Year Tax Savings Deposit, etc. The deduction also includes payment of life insurance premium, repayment of principal amount of home loans and tuition fees. The Rs 1.50,000 cap was last revised in the 2014-15 financial year and an upward revision is long overdue. This is a long pending request from the common man, and they hope the limit will be raised to at least Rs 2,50,000. Incidentally, the banks, through the Insolvency and Bankruptcy Act (IBA), have argued for a reduction in the duration of tax savings deposits from 5 years to three years to make this product more attractive and put them on par with mutual fund equity-linked savings schemes (ELSS).

Deduction under Section 80CCD(1B)

Individuals can claim a deduction of up to Rs 50,000 on the amount contributed to the National Pension Scheme (NPS) under Section 80CCD(1B). The deduction under Section 80CCD(1B) is in addition to the deduction allowed under Section 80C. The expectation is that since the government does not provide any social security unlike governments in Europe and the United States, it can at least provide some incentive for people saving today to build a retirement corpus. The common man expects this to be increased to Rs 1,00,000.

Taxability of cryptocurrencies

The cryptocurrency has had a remarkable year with Bitcoin crossing $65,000 in November 2021. While the government has clarified that it will not ban cryptocurrencies and will recognize them as assets but not currency, the common man hopes the government clears the air on crypto taxation.

Other concerns and expectations

There are others on the wish list, such as the reduction of long-term capital gains tax from 10% to 5%, as millions of new retail investors flocked to stock markets. Many others are waiting for the abolition of the dividend tax.

Fingers crossed and hope the budget brings joy.

(The author is a Chartered Financial Analyst (CFA) and a former banker and is currently at Manipal Academy of Banking, Bangalore)

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Investing Tools for Retail Investors to Create Streams of Fixed Income in 2022 https://flight93.org/investing-tools-for-retail-investors-to-create-streams-of-fixed-income-in-2022/ Thu, 27 Jan 2022 07:02:34 +0000 https://flight93.org/investing-tools-for-retail-investors-to-create-streams-of-fixed-income-in-2022/ Fixed income securities are sought after as the ideal investment path that offers portfolio diversification, flexibility and higher interest rates. With the massive rally in stock markets since March 2020 and high stock valuations, investors are looking for more investment opportunities. Fixed income securities are sought after as the ideal investment path that offers portfolio […]]]>

Fixed income securities are sought after as the ideal investment path that offers portfolio diversification, flexibility and higher interest rates.

With the massive rally in stock markets since March 2020 and high stock valuations, investors are looking for more investment opportunities.

Fixed income securities are sought after as the ideal investment path that offers portfolio diversification, flexibility and higher interest rates.

Investment tools beyond traditional fixed deposits;

Exchange Traded Funds (ETFs) track underlying asset classes such as stocks, fixed income, commodities, etc. By now, everyone is quite familiar with equity-linked ETFs that track the respective index or basket of stocks.

ETFs that invest in bonds and are traded on exchanges are relatively new to the investing community. Since bond ETFs are passive funds, they offer the combined benefits of liquidity, transparency and profitability. They track the underlying bond indices – PSUs, government or corporate bonds.

There are target-maturity bond ETFs that have maturities defined as three years, five years, or ten years. Investing in these fixed-maturity ETFs can help you achieve your medium- to long-term financial goals.

As their name suggests, MLDs are debt securities issued by legal entities whose returns are linked to the performance of the bond markets. Unlike vanilla bonds, MLDs pay no coupon before maturity. The repayment at maturity is made up of the repayment of principal and market-related returns. Gains on MLDs are taxed like equity. Long-term capital gains on securities held for more than one year are taxed at 10%.

MLDs are rated by credit rating agencies, which helps you know the creditworthiness of the borrower. Investing in highly rated debentures has the potential to generate higher returns.

MLDs are no longer an investment avenue accessible only to ultra HNIs. Your wealth manager can help you understand the nuances of MLDs, and you can invest starting with a minimum investment value as low as Rs 10,000.

  • Non-convertible debentures

NTMs are debt securities with a fixed maturity and a fixed interest rate that cannot be converted into shares. The interest payment frequency – monthly, quarterly, semi-annually or annually – is specified on issue. MNTs cannot be withdrawn prior to maturity; however, they can be sold on the secondary market.

DEMs can be secure or unsecure. The assets of the issuers secure secured NTMs and the entity is obligated to repay the amount borrowed. On the other hand, unsecured NTMs do not guarantee repayment of the principal amount in case the company goes bankrupt.

Investing in NTMs depends entirely on your risk appetite. You can opt for secured MNTs with high credit ratings if you have a low appetite for risk. It is important to note that NTMs can generate higher returns and are not risk-free or tax-exempt assets.

Corporate FDs are fixed term deposits offered by corporations and NBFCs. They offer higher interest rates compared to traditional FDs and savings accounts. Corporate FDs are rated by credit rating agencies that help you analyze their financial stability to repay lenders.

Corporate fixed deposits have the option to choose the term ranging from 12 months to 60 months. They are liquid as you can avail a loan against the FDs or get out in an emergency.

Cumulative fixed deposits have the power to accumulate as interest earned is reinvested over the term of the term. Non-cumulative DFs are a source of regular income. The interest payment frequency – monthly, quarterly or annually – can be chosen according to your income needs.

Floating Rate Indian Government Bonds

The Reserve Bank of India issues Indian government bonds when the government borrows money. They pay coupons at periodic intervals specified when issued. They can be purchased for long-term financial goals since they have a seven-year lock-in period. They are the safest for the risk averse investor as they offer capital protection and regular interest income. Since these issues fill up quickly and are available for a limited time, investors should keep an eye out for new issues.

Transition in interest rate scenario

All central banks have taken a dovish stance to help the world recover from the economic setbacks due to the outbreak of the pandemic. Lower interest rates increased market liquidity, leading to inflationary pressures. With demand picking up, central banks have started considering liquidity tightening measures in 2021.

Now that much of the population has been vaccinated and governments are better prepared to deal with the various mutations of the virus, it won’t be too far for central banks to start raising interest rates. Recent stock market volatility reflects expectations of rising interest rates. Now is a good time to diversify your fixed income portfolio to take advantage of the transition phase in 2022.

by, Anshul Gupta, co-founder of Wint Wealth

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EXCLUSIVE-Principal Financial nears sale of insurance units to Talcott Resolution -sources https://flight93.org/exclusive-principal-financial-nears-sale-of-insurance-units-to-talcott-resolution-sources/ Tue, 18 Jan 2022 16:55:08 +0000 https://flight93.org/exclusive-principal-financial-nears-sale-of-insurance-units-to-talcott-resolution-sources/ Band David French January 18 (Reuters) – Principal Insurer Financial Group Inc PFG.O is in advanced talks to sell two of its units, with capital reserves totaling $25 billion, to Talcott Resolution Life Insurance Co HLIACO.UL, according to people familiar with the matter. The deal would be the culmination of a strategic review that Principal […]]]>

Band David French

January 18 (Reuters)Principal Insurer Financial Group Inc PFG.O is in advanced talks to sell two of its units, with capital reserves totaling $25 billion, to Talcott Resolution Life Insurance Co HLIACO.UL, according to people familiar with the matter.

The deal would be the culmination of a strategic review that Principal launched last year after coming under pressure from activist investment firm Elliott Management Corp to shed its low-growth, high-growth businesses. capital intensity. Principal said he would use part of the proceeds to fund an increase in his stock buyback program.

A deal for Talcott to acquire Principal’s U.S. retail fixed annuity business and its universal life with secondary guarantees (ULSG) unit could be announced as early as this week, the sources said.

It is possible that negotiations could break down at the last minute, the sources added, requesting anonymity as the matter is confidential.

Talcott Resolution is owned by investment firm Sixth Street, which declined to comment. Principal Financial also declined to comment.

The price Talcott would pay could not be known, but the transaction is expected to generate significant benefits for Principal through a combination of sale proceeds, freed-up capital and other financial improvements.

By comparison, when Sixth Street agreed last year to acquire a fixed-index annuity business from Allianz ALVG.DE with $35 billion in reserves against it, the German insurer said the deal unlocked $4.1 billion in total value.

Main announced in June that it would sell fixed annuity and ULSG units to focus on its fastest growing pension, global asset management and US benefits and protection businesses. It also added, as part of its deal with Elliott, two independent directors to its board last year.

The annuity book had $18 billion in cash reserves at the end of March 2021, while the ULSG business had $7 billion in reserves, according to a company presentation to investors in June.

The presentation outlined plans to return between $1.5 billion and $1.7 billion in cash to shareholders in 2022 in the form of dividends and share buybacks, though those numbers would be higher after Talcott’s divestment, it said. the sources.

Buyout companies have been enthusiastic acquirers of such life insurance and annuity assets because they offer a large pool of long-term capital for their credit investments. Some, like Apollo Global Management Inc. APO.N and Blackstone Inc. BX.N, have dedicated insurance arms.

(Reporting by David French in New York; editing by Jonathan Oatis)

((davidj.french@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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