Financial Reports 9-30-21

Eagle Financial Bancorp, Inc. Announces Cash Dividend and Third Quarter 2021 Results

CINCINNATI - October 27, 2021, Eagle Financial Bancorp, Inc. (the "Company") (OTCQB: EFBI), the holding company for EAGLE.bank, today announced that its Board of Directors declared a cash dividend of $0.05 per common share. The dividend will be paid on or about November 30, 2021, to stockholders of record as of the close of business on November 15, 2021.

The Company announced net income of $423,000, or $0.30 per common share on 1.4 million shares outstanding for the quarter ended September 30, 2021, as compared to $656,000 or $0.46 per common share on 1.4 million shares outstanding for the quarter ended September 30, 2020. The decline was largely driven by a $310,000 decrease in total non‐interest income, and an increase in total noninterest expense of $51,000, offset by a decrease of $65,000 in provision for loan losses, and a $72,000 reduction in income taxes.

The decrease in noninterest income for the three months ended September 30, 2021 was largely driven by a decrease of $460,000 in net gain on loan sales, offset by an increase other service charges and fee of $145,000, and an increase in BOLI income of $5,000.

Net income for the nine months ended September 30, 2021 decreased $347,000 to $983,000, or $0.69 per common share as compared to $1.3 million, or $0.91 per common share for the nine months ended September 30, 2020. The decline was largely driven by a $702,000, or 15.0% increase in total non‐interest expense, offset by a $238,000 decrease in provision for loan losses, and a $105,000 decrease in income taxes.

FINANCIAL HIGHLIGHTS

• Net income of $423,000 for the three months ended September 30, 2021 compared to $656,000 for the comparable period in 2020, representing a decrease of $233,000, or 35.5%.
• Net income of $983,000 for the nine months ended September 30, 2021 compared to $1.3 million for the comparable period in 2020, representing a decrease of $347,000, or 26.1%.
• Net income before taxes of $530,000 for the quarter ended September 30, 2021 compared to $835,000 for the comparable period in 2020, representing a decrease of $305,000, or 36.5%.
• Net income before taxes of $1.2 million for the nine months ended September 30, 2021 compared to $1.7 million for the comparable period in 2020, representing a decrease of $452,000, or 26.6%
• Non‐interest income of $3.7 million for the nine months ended September 30, 2021 compared to $3.6 million for the comparable period in 2020, representing an increase of $66,000, or 1.8%.
• Capital ratios of 15.2%, 17.2% and 18.0% for the Tier 1 Leverage ratio, Tier 1 Risked Based Capital ratio and Total Risked Based Capital ratio, respectively, at September 30, 2021.

Comparison of Financial Condition at September 30, 2021 and December 31, 2020

Total assets were $172.2 million at September 30, 2021, an increase of $11.7 million, or 7.3%, over the $160.4 million at December 31, 2020. The increase was primarily due to increases in cash and cash equivalents of $28.5 million, foreclosed real estate of $1.7 million, Federal Home Loan Bank ("FHLB") stock - at cost of $1.1 million, and interest‐bearing time deposits in other banks of $1.2 million, offset by a decrease in net loans of $12.2 million, and a decrease in loans held for sale of $9.5 million.

Net loans totaled $107.2 million at September 30, 2021, as compared to $119.4 million at December 31, 2020, a decrease of $12.2 million or 10.2%, primarily due to a $19.0 million decrease in SBA PPP loans. During the nine months ended September 30, 2021, we originated $129.4 million of loans, $108.4 million of which were one‐ to four‐family residential real estate loans, and sold $97.4 million of loans in the secondary market. During the nine months ended September 30, 2021, one‐ to four‐family residential real estate loans increased $3.0 million, or 5.0%, to $62.2 million, multi‐family loans decreased $142,000, or 10.5%, to $1.2 million, commercial real estate loans and land loans increased $6.9 million, or 32.8%, to $27.7 million, construction loans decreased $1.1 million, or 10.0%, to $9.6 million, home equity and other consumer loans decreased $1.2 million, or 17.4% to $5.9 million, and commercial loans increased $830,000, or 16.0% to $6.0 million, and SBA PPP loans decreased $19.0 million, or 92.9% to $1.4 million. Management continues to emphasize the origination of high‐quality loans for retention in the loan portfolio.

Deposits increased by $10.6 million, or 8.2%, to $139.0 million at September 30, 2021 from $128.4 million at December 31, 2020. Our core deposits, which are all deposits other than certificates of deposit, increased $9.1 million, or 10.6%, to $94.8 million at September 30, 2021 from $85.7 million at December 31, 2020. Certificates of deposit increased $1.5 million, or 3.4%, to $44.2 million at September 30, 2021 from $42.7 million at December 31, 2020. During the nine months ended September 30, 2021, management continued its strategy of pursuing growth in demand accounts and other lower cost core deposits. Management intends to continue its efforts to increase core deposits, with a special emphasis on growth in consumer and business demand deposits.

Shareholders' equity increased $986,000, or 3.4%, to $30.0 million at September 30, 2021 from $29.0 million at December 31, 2020. The increase resulted from net income of $983,000 during the nine months ended September 30, 2020, expense of $87,000 related to the ESOP shares committed to be released and expense of $184,000 related to stock‐based compensation, offset by a repurchase of common stock of $39,000 and dividends paid of $229,000.

EAGLE FINANCIAL BANCORP, INC.

STATEMENTS OF CONDITION

September 30, 2021 (Unaudited) and December 31, 2020 (Audited)

(In Thousands)

Comparison of Operating Results for the Three Months Ended September 30, 2021 and September 30, 2020

General. Our net income for the three months ended September 30, 2021 was $423,000, compared to a net income of $656,000 for the three months ended September 30, 2020, a decrease of $233,000, or 35.5%. The decrease in net income was primarily due to a $310,000 decrease in noninterest income, and an increase in noninterest expense of $51,000, offset by a decrease in provision for loan losses of $65,000, and a decrease in provision for income taxes of $72,000.

Interest Income. Interest income decreased $99,000, or 7.8%, to $1.2 million for the three months ended September 30, 2021 from $1.3 million for the three months ended September 30, 2020. This decrease was primarily attributable to a $114,000 decrease in interest on loans, offset by an increase of $15,000 dividend income on FHLB stock and interest income on other interest earning deposits. The average balance of interest‐earning assets increased $14.7 million for the three months ended September 30, 2021, or 10.8%, from the average balance for the three months ended September 30, 2020, while the average

yield on interest‐earning assets decreased by 63 basis points to 3.09% for the three months ended September 30, 2021 from 3.72% for the three months ended September 30, 2020.

Interest Expense. Total interest expense decreased $90,000, or 37.0%, to $153,000 for the three months ended September 30, 2021 from $243,000 for the three months ended September 30, 2020. This decrease is primarily the result of a decrease in deposit interest rates for the three months ended September 30, 2021. The average balance of deposits for the three months ended September 30, 2021 increased by $11.4 million, or 9.7% from the average balance for the three months ended September 30, 2020, while the average cost of deposits decreased by 35 basis points to 0.48% for the three months ended September 30, 2021 from 0.83% for the three months ended September 30, 2020.

Net Interest Income. Net interest income decreased $9,000, or 0.9%, to $1.01 million for the three months ended September 30, 2021, compared to $1.02 million for the three months ended September 30, 2020. The decrease reflected a decrease in total interest and dividend income of $99,000, and a decrease in total interest expense of $90,000. Our net interest margin decreased to 2.69% for the three months ended September 30, 2021 from 3.00% for the three months ended September 30, 2020. Our net interest rate spread decreased to 2.61% for the three months ended September 30, 2021 from 2.89% for the three months ended September 30, 2020. The interest rate spread and net interest margin were impacted by continued low interest rates in the three months ended September 30, 2021.

Provision for Loan Losses. We recorded no provision for loan losses for the three months ended September 30, 2021, compared to $65,000 for the three months ended September 30, 2020. The allowance for loan losses was $1.2 million, or 1.02% of total loans, at September 30, 2021, compared to $1.4 million, or 1.04% of total loans, at December 31, 2020. Total nonperforming loans were $736,000 at September 30, 2021, compared to $3.0 million at December 31, 2020. Classified loans increased to $3.8 million at September 30, 2021, compared to $2.8 million at December 31, 2020. Total loans past due 30 days or more were $553,000 and $2.4 million at September 30, 2021 and December 31, 2020, respectively. Net recovery totaled $375 for the three months ended September 30, 2021, compared to $2,000 of net recovery for the three months ended September 30, 2020. The allowance for loan losses reflects the estimate we believe to be appropriate to cover incurred probable losses which were inherent in the loan portfolio at September 30, 2021 and 2020. While we believe the estimates and assumptions used in our determination of the adequacy of the allowance are reasonable, such estimates and assumptions could be proven incorrect in the future, and the actual amount of future provisions may exceed the amount of past provisions, and the increase in future provisions that may be required may adversely impact our financial condition and results of operations. In addition, bank regulatory agencies periodically review our allowance for loan losses and may require an increase in the provision for possible loan losses or the recognition of further loan charge‐offs, based on judgments different than those of management.

Non‐Interest Income. Non‐interest income decreased $310,000, or 19.3%, to $1.3 million for the three months ended September 30, 2021 from $1.6 million for the three months ended September 30, 2020. The increase was primarily due to a $460,000 decrease in the net gain on sale of loans during the three months ended September 30, 2021, offset by an increase in other service charges and fees of $145,000.

Non‐Interest Expense. Non‐interest expense increased $51,000, or 3.0%, to $1.8 million for the three months ended September 30, 2021, compared to $1.7 million for the three months ended September 30, 2020. The increase was primarily the result of an increase in compensation and employee benefits of $39,000, and an increase in data processing expense of $13,000.

Federal Income Taxes. Federal income taxes decreased by $72,000 to an income tax expense of $107,000 for the three months ended September 30, 2021, compared to an income tax expense of $179,000 for the three months ended September 30, 2020. The decrease in income tax expense for the three months ended September 30, 2020 was a direct result of the decrease in gain on loans sales and the resulting decrease in net income.

Comparison of Operating Results for the Nine Months Ended September 30, 2021 and September 30, 2020

General. Our net income for the nine months ended September 30, 2021 was $983,000, compared to a net income of $1.3 million for the nine months ended September 30, 2020, a decrease of $347,000, or 26.1%. The decrease in net income was primarily due to an increase in non‐interest expense of $702,000, offset by a decrease in provision for loan losses of $238,000, and a decrease in income tax expense of $105,000 for the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020.

Interest Income. Interest income decreased $360,000, or 9.3%, to $3.5 million for the nine months ended September 30, 2021 from $3.9 million for the nine months ended September 30, 2020. This decrease was attributable to a $311,000 decrease in interest income on loans receivable, and a decrease in interest income on other interest‐earning deposits of $66,000, offset by

Three and Nine Months Ended September 30, 2021 and 2020 (Unaudited) (In Thousands, except share and per share data)