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Press release from Business Wire

Eagle Bancorp Montana, Inc. Receives Regulatory Approval to Acquire Montana Branches From Sterling Savings Bank

Monday, October 15, 2012

Eagle Bancorp Montana, Inc. Receives Regulatory Approval to Acquire Montana Branches From Sterling Savings Bank09:00 EDT Monday, October 15, 2012 HELENA, Mont. (Business Wire) -- Eagle Bancorp Montana, Inc. (NASDAQ: EBMT) and its wholly-owned subsidiary, American Federal Savings Bank (collectively “Eagle”) today announced the receipt of regulatory approval from the Office of the Comptroller of the Currency for the purchase of 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 also strengthens Eagle's mortgage origination franchise and adds a wealth management business headquartered in Bozeman. 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. “This transaction will double our branch network and increase our footprint across southern Montana, while entering the two largest markets in the state, Billings and Missoula. This transaction is, we believe, a positive one for our Company and its shareholders because it provides us with entry into new markets and permits the kind of growth, through a single transaction, that otherwise would take several years if we pursued a series of smaller transactions. We will become the sixth largest bank (in terms of deposits) headquartered in Montana. We are excited about the new customer base we will be working with and of course about the melding of Sterling's Montana staff with our own great employees,” said Peter J. Johnson, President and CEO of Eagle Bancorp Montana. 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 of approximately $500 million, total deposits in excess of $400 million, and a tangible common equity to tangible assets ratio of approximately 9%. The transaction is expected to be completed on or about November 30, 2012, subject to satisfaction of the closing conditions set forth in the Purchase and Assumption Agreement and other customary closing conditions. About Eagle Eagle Bancorp Montana, Inc. is a bank holding company headquartered in Helena, Montana and is the holding company of American Federal Savings Bank, a community bank established in 1922 that serves consumers and small businesses in Southcentral Montana through six banking offices. Additional information is available on the bank's website at www.americanfederalsavingsbank.com. The shares of Eagle Bancorp Montana, Inc. are traded on the NASDAQ Global Select Market under the symbol “EBMT.” This release shall not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction in which such solicitation would be unlawful. Forward-Looking StatementsThis release may contain certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and may be identified by the use of such words as "believe," "expect," "anticipate," "should," "planned," "estimated," and "potential." These forward-looking statements include, but are not limited to statements of our goals, intentions and expectations. These forward-looking statements are based on current beliefs and expectations of our management and are inherently subject to contingencies, many of which are beyond our control. Actual and anticipated future results may vary due to certain risks and uncertainties, including, without limitation;changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements; general economic conditions, either nationally or in our market areas, that are worse than expected; competition among depository and other financial institutions; loan demand or residential and commercial real estate values in Montana; inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments; adverse changes in the securities markets; and other economic, governmental, competitive, regulatory and technological factors that may affect our operations; our ability to successfully integrate acquired businesses and other risks or uncertainties detailed in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2012 and other periodic filings with the Securities and Exchange Commission and available at the SEC's website at http://www.sec.gov.We wish to caution you that these factors could affect our financial performance and could cause actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements.The Company undertakes no duty or obligation to update this information in the future. Eagle Bancorp Montana, Inc.Peter J. Johnson, 406-457-4006President and CEOClint J. Morrison, 406-457-4007SVP and CFO