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Eagle Bancorp Montana, Inc. Expands Franchise By Acquiring 7 Montana Branches From Sterling Savings Bank

Eagle Bancorp Montana, Inc. (NASDAQ: EBMT) and its wholly-owned subsidiary, American Federal Savings Bank (collectively “Eagle”), today announced the signing of a definitive agreement to purchase seven branch banking locations from Sterling Savings Bank, a wholly-owned subsidiary of Sterling Financial Corporation (NASDAQ: STSA). The transaction will expand Eagle’s franchise to 13 branches and extend its branch network throughout Southern Montana. In addition, the transaction strengthens Eagle’s mortgage origination franchise and adds a wealth management business headquartered in Bozeman.

Under the terms of the agreement, Eagle will acquire approximately $187 million of deposits for an estimated deposit premium of 3.88%, or approximately $7.3 million. Additionally, Eagle will receive approximately $44 million of pass-rated, performing loans. It is expected that the transaction will be immediately accretive to Eagle’s earnings per share.

“We are truly thrilled to be expanding our footprint with these branch locations. This transaction will provide our existing customers with added convenience and service and our new customers with the opportunity to enjoy the outstanding personalized service and commitment of a Montana-based community bank,” said Peter J. Johnson, President and CEO. Of the seven branches being acquired six are in new markets for Eagle, including two in Missoula, one in Billings, and one each in Hamilton, Livingston and Big Timber. The seventh is in Bozeman where Eagle already has a presence.

Upon completion of the transaction, Eagle expects to have total assets exceeding $500 million, total deposits in excess of $400 million, and a tangible common equity to tangible assets ratio of approximately 9%.

The sale is expected to be completed during the second quarter of Eagle’s fiscal 2013 and remains subject to customary regulatory approvals and other customary terms and conditions of sale.

Stifel Nicolaus Weisel acted as financial advisor to Eagle and Nixon Peabody LLP acted as legal advisor in the transaction. D.A. Davidson & Co. acted as financial advisor to Sterling Financial Corporation and Bingham McCutchen LLP acted as legal advisor.

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