Timberland Bancorp, Inc. (NASDAQ: TSBK) (“Timberland” or “the
Company”), the holding company for Timberland Bank (the “Bank”),
today reported that net income increased 15% to $27.12 million for
the fiscal year ended September 30, 2023 from $23.60 million for
the fiscal year ended September 30, 2022. Earnings per diluted
common share (“EPS”) increased 17% to $3.29 for the 2023 fiscal
year from $2.82 for the 2022 fiscal year.
Timberland also announced quarterly net income of $6.64 million,
or $0.81 per diluted common share, for the quarter ended September
30, 2023. This compares to net income of $6.31 million, or $0.77
per diluted common share, for the preceding quarter and $7.05
million, or $0.85 per diluted common share, for the comparable
quarter one year ago.
“For fiscal 2023, Timberland generated increases in both net
income and earnings per share, which were up 15% and 17%,
respectively, compared to fiscal 2022,” stated Dean Brydon, Chief
Executive Officer. “Further, net income and EPS for the
current quarter increased 5% compared to the prior quarter, driven
by continued growth in the loan portfolio. As a result of the
Company’s strong earnings and capital position, Timberland’s Board
of Directors announced a quarterly cash dividend of $0.23 per
share, payable on November 27, 2023, to shareholders of record on
November 13, 2023. This represents the 44th consecutive quarter
Timberland will have paid a cash dividend.”
“Credit quality metrics continue to perform well, with
non-performing assets at just 9 basis points at fiscal year-end,”
Brydon continued. “Loan origination volumes remained steady and net
loans receivable grew by nearly $42 million during the quarter. Due
primarily to loan portfolio growth, a $522,000 provision for loan
losses was booked for the quarter. While the possibility of
continued economic headwinds and an industry-wide negative credit
cycle still exist, we remain optimistic regarding the overall
strength of our loan portfolio and the markets that we operate
in.”
“Net interest margin remained strong at 3.85% for the quarter,
just 9 basis points lower than the prior quarter’s margin and 21
basis points higher compared to the year ago quarter,” said
Jonathan Fischer, President and Chief Operating Officer. “Total
deposits increased $8 million during the quarter, as we continued
to see customers moving funds from Checking and Savings accounts
into Certificate of Deposits to gain higher yields. We anticipate
additional margin compression going forward as funding costs
continue to trend upward. While we are fortunate to have loyal
customers, we will continue to work hard to retain rate sensitive
customer deposits.”
Earnings and Balance Sheet Highlights (at or
for the periods ended September 30, 2023, compared to September 30,
2022, or June 30, 2023):
Earnings Highlights:
- EPS increased 5% to $0.81 for the current quarter from $0.77
for the preceding quarter and decreased 5% from $0.85 for the
comparable quarter one year ago; EPS for fiscal year 2023 increased
17% to $3.29 from $2.82 for fiscal year 2022;
- Net income increased 5% to $6.64 million for the current
quarter from $6.31 million for the preceding quarter and decreased
6% from $7.05 million for the comparable quarter one year ago; Net
income increased 15% to $27.12 million for fiscal year 2023 from
$23.60 million for fiscal year 2022;
- Return on average equity (“ROE”) and return on average assets
(“ROA”) for the current quarter were 11.52% and 1.45%,
respectively;
- Net interest margin (“NIM”) for the current quarter compressed
to 3.85% from 3.94% for the preceding quarter and expanded from
3.64% for the comparable quarter one year ago; and
- The efficiency ratio for the current quarter was 55.52%
compared to 56.01% for the preceding quarter and 52.72% for the
comparable quarter one year ago.
Balance Sheet Highlights:
- Total assets increased 2% from the prior quarter and decreased
1% year-over-year;
- Net loans receivable increased 3% from the prior quarter and
increased 15% year-over-year;
- Total deposits increased 1% from the prior quarter and
decreased 4% year-over-year;
- Total shareholders’ equity increased 2% from the prior quarter
and increased 7% year-over-year;
- Non-performing assets to total assets ratio improved to 0.09%
from 0.12% one year ago;
- Book and tangible book (non-GAAP) values per common share
increased to $28.76 and $26.81, respectively, at September 30,
2023; and
- Liquidity (both on-balance sheet and off-balance sheet)
remained strong at September 30, 2023 with only $35 million in
borrowings and additional secured borrowing line capacity of $680
million available through the FHLB and the Federal Reserve.
Operating Results
Operating revenue (net interest income before the
provision for loan losses plus non-interest income) for the current
quarter increased 1% to $19.76 million from $19.51 million for the
preceding quarter and increased 3% from $19.26 million for the
comparable quarter one year ago. The increase in operating revenue
compared to the preceding quarter was primarily due to increased
interest income from loans and overnight funds, which were
partially offset by an increase in total interest expense.
Operating revenue increased 16% to $79.50 million for the 2023
fiscal year from $68.46 million for the 2022 fiscal year, primarily
due to increased interest income from loans, overnight funds, and
investment securities, which were partially offset by an increase
in total interest expense and a decrease in gain on sales of loans.
The increased interest income in these categories was primarily a
result of increased short-term market interest rates and the
deployment of liquidity into higher-yielding loans and investment
securities.
Net interest income increased $197,000, or 1%, to
$16.83 million for the current quarter from $16.63 million for the
preceding quarter and increased $568,000, or 3%, from $16.26
million for the comparable quarter one year ago. The increase in
net interest income compared to the preceding quarter was primarily
due to a $59.53 million increase in average interest-earning assets
and an increase in the weighted average yield on total
interest-earning assets to 4.94% from 4.72% from the preceding
quarter. Partially offsetting the increase in interest income was
an increase in the weighted average cost of interest-bearing
liabilities to 1.69% from 1.22% for the preceding quarter.
Timberland’s NIM for the current quarter compressed to 3.85% from
3.94% for the preceding quarter and expanded from 3.64% for the
comparable quarter one year ago. The
NIM for the current quarter was increased by approximately two
basis points due to the accretion of $11,000 of the fair value
discount on loans acquired in the South Sound Acquisition and the
collection of $92,000 in pre-payment penalties, non-accrual
interest, and late fees. The NIM for the preceding quarter was
increased by approximately three basis points due to the accretion
of $22,000 of the fair value discount on loans acquired in the
South Sound Acquisition and the collection of $87,000 in
pre-payment penalties, non-accrual interest and late fees. The NIM
for the comparable quarter one year ago was increased by
approximately three basis points due to the accretion of $28,000 of
the fair value discount on loans acquired in the South Sound
Acquisition and the collection of $91,000 in pre-payment penalties,
non-accrual interest and late fees. Net interest income for the
2023 fiscal year increased $12.53 million, or 22%, to $68.36
million from $55.83 million for the 2022 fiscal year. Timberland’s
net interest margin for the 2023 fiscal year expanded to 3.95% from
3.16% for the 2022 fiscal year.
U.S. Small Business Administration (“SBA”) PPP
loans contribute to interest income through the 1.00% interest rate
earned on outstanding loan balances and also through the accretion
of loan origination fees into interest income over the life of each
PPP loan. At September 30, 2023, Timberland had SBA PPP deferred
loan origination fees of $16,000 remaining to be accreted into
interest income over the remaining life of the loans. The following
table details the interest income recognized from SBA PPP
loans:
|
SBA PPP Loan Income ($ in thousands) |
|
|
Three Months Ended |
|
|
Sept. 30, 2023 |
|
June 30, 2023 |
|
Sept. 30, 2022 |
|
Interest income |
$ |
1 |
|
$ |
1 |
|
$ |
3 |
|
Loan origination fee accretion |
|
3 |
|
|
2 |
|
|
10 |
|
Total SBA PPP loan income |
$ |
4 |
|
$ |
3 |
|
$ |
13 |
|
|
Year Ended |
|
|
Sept. 30, 2023 |
|
Sept. 30, 2022 |
|
Interest income |
$ |
6 |
|
$ |
114 |
|
Loan origination fee accretion |
|
26 |
|
|
1,792 |
|
Total SBA PPP loan income |
$ |
32 |
|
$ |
1,906 |
A $522,000 provision for loan losses was recorded
for the quarter ended September 30, 2023, primarily due to loan
portfolio growth. This compares to a $610,000 provision for loans
losses for the preceding quarter and a $270,000 provision for loan
losses for the comparable quarter one year ago. The provisions for
loan losses totaled $2.13 million for the 2023 fiscal year compared
to provisions for loan losses of $270,000 for the 2022 fiscal
year.
Non-interest income increased $49,000 or 2%, to
$2.92 million for the current quarter from $2.88 million for the
preceding quarter and decreased $72,000, or 2%, from $3.00 million
for the comparable quarter one year ago. The increase in
non-interest income compared to the preceding quarter was primarily
due to an $80,000 increase in BOLI net earnings (as a result of a
death benefit claim) and a $45,000 increase in service charges on
deposits and smaller increases in several other categories. These
increases were partially offset by a $95,000 decrease in gain on
sale of investment securities.
Non-interest income for the 2023 fiscal year decreased $1.48
million, or 12%, to $11.14 million from $12.62 million for the 2022
fiscal year, primarily due to a $1.27 million decrease in gain on
sales of loans as the dollar amount of fixed-rate one-to
four-family loans originated and sold decreased as demand slowed
and a larger portion of single family loan originations were
retained in the portfolio rather than being sold.
Total operating (non-interest) expenses for the
current quarter increased slightly (less than 1%) to $10.97 million
from $10.93 million for the preceding quarter and increased
$813,000, or 8%, from $10.15 million for the comparable quarter one
year ago. The increase in operating
expenses compared to the preceding quarter was primarily due to a
$56,000 increase in advertising expense and smaller increases in
several other expense categories. These increases were partially
offset by a $104,000 decrease in salaries and employee benefits
(primarily due to fewer employees) and smaller decreases in several
other expense categories. The
efficiency ratio for the current quarter was 55.52% compared to
56.01% for the preceding quarter and 52.72% for the comparable
quarter one year ago.
For the 2023 fiscal year, total operating expenses
increased 12% to $43.37 million from $38.63 million for the 2022
fiscal year. The increase in operating expenses was primarily due
to a $2.75 million increase in salaries and employee benefits, an
$826,000 increase in data processing and telecommunications
expense, and smaller increases in several other expense categories.
The increase in salaries and benefits was primarily due to wage
inflation related adjustments and the increase in data processing
and telecommunication expense was primarily due to the addition of
several technology products and increased processing volumes. The
efficiency ratio for fiscal year 2023 improved to 54.56% from
56.42% for fiscal year 2022.
The provision for income taxes for the current
quarter decreased $42,000, or 3%, to $1.62 million from $1.67
million for the preceding quarter, primarily due to a higher
percentage of non-taxable income and tax adjustments from the
exercise of stock options.
Timberland’s effective income tax rate was 19.6% for the quarter
ended September 30, 2023 compared to 20.9% for the quarter ended
June 30, 2023 and 20.2% for the quarter ended September 30,
2022. Timberland’s effective income
tax rate was 20.2% for both the 2023 fiscal year and the 2022
fiscal year.
Balance Sheet Management
Total assets increased $32.19 million, or 2%, during the quarter
to $1.84 billion at September 30, 2023 from $1.81 billion at June
30, 2023 and decreased $20.23 million, or 1%, from $1.86 billion
one year ago. The increase during the current quarter was primarily
due to a $41.66 million increase in net loans receivable which was
partially offset by an $8.68 million decrease in investment
securities and CDs held for investment. The quarterly increase in
assets was primarily funded by FHLB borrowings and increased
deposits.
Liquidity
Timberland has continued to maintain a strong liquidity position
(both on-balance sheet and off-balance sheet) while deploying
overnight funds into loans during the past year. Liquidity, as
measured by the sum of cash and cash equivalents, CDs held for
investment, and available for sale investment securities, was 11.6%
of total liabilities at September 30, 2023, compared to 12.1% at
June 30, 2023, and 23.2% one year ago. Timberland had secured
borrowing line capacity of $680 million available through the FHLB
and the Federal Reserve at September 30, 2023. With a strong and
diversified deposit base, only 19% of Timberland’s deposits were
uninsured or uncollateralized at September 30, 2023. (Note: This
calculation excludes public deposits that are fully
collateralized.)
Loans
Net loans receivable increased $41.66 million, or 3%, during the
quarter to $1.30 billion at September 30, 2023 from $1.26 billion
at June 30, 2023. This increase was primarily due to a $23.95
million increase in one- to four-family loans, a $15.40 million
increase in multi-family loans, an $11.25 million increase in
commercial real estate loans, and smaller increases in several
other loan categories. These increases to net loans receivable were
partially offset by a $7.76 million decrease in construction and
land development loans and smaller decreases in several other loan
categories.
Net loan receivable increased $169.88 million, or 15%, during
the fiscal year to $1.30 billion at September 30, 2023 from $1.13
billion at September 30, 2022. This increase was primarily due to a
$77.11 million increase in one- to four-family loans, a $32.15
million increase in multi-family loans, a $31.62 million increase
in commercial real estate loans, an $18.23 million increase in
construction and land development loans, a $10.76 million increase
in commercial business loans and smaller changes in other
categories.
|
Loan Portfolio |
|
($ in thousands) |
| |
| |
September 30, 2023 |
|
June 30, 2023 |
|
September 30, 2022 |
| |
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
| Mortgage loans: |
|
|
|
|
|
|
|
|
|
|
|
|
One- to four-family (a) |
$ |
253,227 |
|
|
18% |
|
$ |
229,274 |
|
|
17% |
|
$ |
176,116 |
|
|
14% |
|
Multi-family |
|
127,176 |
|
|
9 |
|
|
111,777 |
|
|
8 |
|
|
95,025 |
|
|
8 |
|
Commercial |
|
568,265 |
|
|
40 |
|
|
557,015 |
|
|
40 |
|
|
536,650 |
|
|
43 |
|
Construction - custom and |
|
|
|
|
|
|
|
|
|
|
|
|
owner/builder |
|
129,699 |
|
|
9 |
|
|
136,595 |
|
|
10 |
|
|
119,240 |
|
|
9 |
|
Construction - speculative one-to four-family |
|
17,099 |
|
|
1 |
|
|
12,522 |
|
|
1 |
|
|
12,254 |
|
|
1 |
|
Construction - commercial |
|
51,064 |
|
|
4 |
|
|
42,657 |
|
|
3 |
|
|
40,364 |
|
|
3 |
|
Construction - multi-family |
|
57,140 |
|
|
4 |
|
|
73,859 |
|
|
5 |
|
|
64,480 |
|
|
5 |
|
Construction - land |
|
|
|
|
|
|
|
|
|
|
|
|
development |
|
18,841 |
|
|
1 |
|
|
15,968 |
|
|
1 |
|
|
19,280 |
|
|
2 |
| Land |
|
26,726 |
|
|
2 |
|
|
25,908 |
|
|
2 |
|
|
26,854 |
|
|
2 |
|
Total mortgage loans |
|
1,249,237 |
|
|
88 |
|
|
1,205,575 |
|
|
87 |
|
|
1,090,263 |
|
|
87 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consumer loans: |
|
|
|
|
|
|
|
|
|
|
|
|
Home equity and second |
|
|
|
|
|
|
|
|
|
|
|
|
mortgage |
|
38,281 |
|
|
3 |
|
|
40,008 |
|
|
3 |
|
|
35,187 |
|
|
3 |
|
Other |
|
2,772 |
|
|
-- |
|
|
2,469 |
|
|
-- |
|
|
2,128 |
|
|
-- |
|
Total consumer loans |
|
41,053 |
|
|
3 |
|
|
42,477 |
|
|
3 |
|
|
37,315 |
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Commercial loans: |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial business loans |
|
135,802 |
|
|
9 |
|
|
137,114 |
|
|
10 |
|
|
125,039 |
|
|
10 |
|
SBA PPP loans |
|
466 |
|
|
-- |
|
|
519 |
|
|
-- |
|
|
1,001 |
|
|
-- |
|
Total commercial loans |
|
136,268 |
|
|
9 |
|
|
137,633 |
|
|
10 |
|
|
126,040 |
|
|
10 |
| Total loans |
|
1,426,558 |
|
|
100% |
|
|
1,385,685 |
|
|
100% |
|
|
1,253,618 |
|
|
100% |
| Less: |
|
|
|
|
|
|
|
|
|
|
|
|
Undisbursed portion of |
|
|
|
|
|
|
|
|
|
|
|
|
construction loans in |
|
|
|
|
|
|
|
|
|
|
|
|
process |
|
(103,194 |
) |
|
|
|
|
(104,774 |
) |
|
|
|
|
(103,168 |
) |
|
|
|
Deferred loan origination |
|
|
|
|
|
|
|
|
|
|
|
|
fees |
|
(5,242 |
) |
|
|
|
|
(4,957 |
) |
|
|
|
|
(4,321 |
) |
|
|
|
Allowance for loan losses |
|
(15,817 |
) |
|
|
|
|
(15,307 |
) |
|
|
|
|
(13,703 |
) |
|
|
|
Total loans receivable, net |
$ |
1,302,305 |
|
|
|
|
$ |
1,260,647 |
|
|
|
|
$ |
1,132,426 |
|
|
|
_______________________(a) Does not include
one- to four-family loans held for sale totaling $400, $0, and $748
at September 30, 2023, June 30, 2023, and September 30, 2022,
respectively.
The following table provides a breakdown of commercial real
estate (“CRE”) mortgage loans by collateral type as of September
30, 2023:
|
CRE Loan Portfolio Breakdown by Collateral |
|
($ in thousands) |
| |
|
Collateral Type |
|
Balance |
|
Percent of CRE Portfolio |
|
Percent of Total Loan Portfolio |
|
Average Balance Per Loan |
|
Non-Accrual |
|
Industrial warehouse |
|
$ |
115,804 |
|
20% |
|
8% |
|
$ |
1,135 |
|
$ |
195 |
| Medical/dental offices |
|
|
76,498 |
|
14 |
|
5 |
|
|
1,319 |
|
|
-- |
| Office buildings |
|
|
66,108 |
|
12 |
|
5 |
|
|
760 |
|
|
-- |
| Other retail buildings |
|
|
51,730 |
|
9 |
|
4 |
|
|
545 |
|
|
-- |
| Hotel/motels |
|
|
30,718 |
|
5 |
|
2 |
|
|
3,072 |
|
|
-- |
| Mini-storage |
|
|
27,750 |
|
5 |
|
2 |
|
|
1,156 |
|
|
-- |
| Restaurants |
|
|
27,640 |
|
5 |
|
2 |
|
|
564 |
|
|
-- |
| Gas stations/Conv. Stores |
|
|
21,588 |
|
4 |
|
1 |
|
|
939 |
|
|
-- |
| Nursing homes |
|
|
18,051 |
|
3 |
|
1 |
|
|
3,008 |
|
|
-- |
| Shopping centers |
|
|
10,790 |
|
2 |
|
1 |
|
|
2,158 |
|
|
-- |
| Mobile home parks |
|
|
9,696 |
|
2 |
|
1 |
|
|
510 |
|
|
-- |
| Churches |
|
|
7,253 |
|
1 |
|
1 |
|
|
484 |
|
|
-- |
| Additional CRE |
|
|
104,639 |
|
18 |
|
7 |
|
|
731 |
|
|
488 |
|
Total CRE |
|
$ |
568,265 |
|
100% |
|
40% |
|
$ |
893 |
|
$ |
683 |
Timberland originated $89.25 million in loans during the quarter
ended September 30, 2023, compared to $93.72 million for the
preceding quarter and $136.55 million for the comparable quarter
one year ago. Timberland continues to originate fixed-rate one- to
four-family mortgage loans, a portion of which are sold into the
secondary market for asset-liability management purposes and to
generate non-interest income. During the past year, a larger
percentage of single-family loan originations were retained in the
portfolio rather than being sold due to the increased yield
available on such loans. During the current quarter,
fixed-rate one- to four-family mortgage loans totaling $4.58
million were sold compared to $3.41 million for the preceding
quarter and $8.06 million for the comparable quarter one year
ago.
Investment
Securities Timberland’s
investment securities and CDs held for investment decreased $8.68
million, or 3%, to $327.99 million at September 30, 2023, from
$336.66 million at June 30, 2023. The decrease was primarily due to
maturities and scheduled amortization.
Investment securities and CDs held for investment decreased
$3.76 million, or 1%, during the fiscal year to $327.99 million at
September 30, 2023, from $331.75 million at September 30, 2022. The
decrease was primarily due to the sale of $8.86 million of
available for sale investment securities (for a gain of $95,000),
maturities and scheduled amortization, which were partially offset
by additional purchases during the first quarter of the fiscal
year.
Deposits
Total deposits increased $8.21 million, or 1%, during the
quarter to $1.56 billion at September 30, 2023, from $1.55 billion
at June 30, 2022. The quarter’s increase consisted of a $48.79
million increase in certificates of deposit balances and a $3.15
million increase in non-interest bearing deposit balances. These
increases were partially offset by a $19.40 million decrease in
money market account balances, a $13.29 million decrease in savings
account balances, and an $11.03 million decrease in NOW checking
account balances.
Total deposits decreased $71.24 million, or 4%, during the
fiscal year to $1.56 billion at September 30, 2023 from $1.63
billion at September 30, 2022. The decrease consisted of a $74.19
million decrease in non-interest bearing deposit balances, a $61.05
million decrease in NOW checking account balances, a $58.66 million
decrease in money market account balances and a $54.85 million
decrease in savings account balances. These decreases were
partially offset by a $177.52 million increase in certificate of
deposit balances (including $38.17 million in brokered
accounts).
|
Deposit Breakdown($ in thousands) |
|
|
| |
September 30, 2023 |
|
June 30, 2023 |
|
September 30, 2022 |
| |
Amount |
|
|
Percent |
|
Amount |
|
|
Percent |
|
Amount |
|
|
Percent |
|
Non-interest-bearing demand |
$ |
455,864 |
|
|
29% |
|
$ |
452,729 |
|
|
29% |
|
$ |
530,058 |
|
|
|
33% |
| NOW checking |
|
386,730 |
|
|
25 |
|
|
397,761 |
|
|
26 |
|
|
447,779 |
|
|
|
28 |
| Savings |
|
228,366 |
|
|
15 |
|
|
241,651 |
|
|
16 |
|
|
283,219 |
|
|
|
17 |
| Money market |
|
189,875 |
|
|
12 |
|
|
209,276 |
|
|
13 |
|
|
248,536 |
|
|
|
15 |
| Certificates of deposit under
$250 |
|
170,221 |
|
|
11 |
|
|
148,142 |
|
|
10 |
|
|
100,754 |
|
|
|
6 |
| Certificates of deposit $250
and over |
|
91,714 |
|
|
6 |
|
|
64,849 |
|
|
4 |
|
|
21,830 |
|
|
|
1 |
| Certificates of deposit –
brokered |
|
38,165 |
|
|
2 |
|
|
38,322 |
|
|
2 |
|
|
-- |
|
|
|
-- |
|
Total deposits |
$ |
1,560,935 |
|
|
100% |
|
$ |
1,552,730 |
|
|
100% |
|
$ |
1,632,176 |
|
|
|
100% |
Borrowings
Total borrowings increased to $35.00 million at September 30,
2023 from $15.00 million at June 30, 2023, as the Company utilized
borrowings to supplement on-balance sheet liquidity during the
current quarter. At September 30, 2023, the weighted average rate
on the borrowings was 4.87%.
Shareholders’ Equity and Capital
Ratios
Total shareholders’ equity increased $3.81 million, or 2%, to
$233.07 million at September 30, 2023, from $229.26 million at June
30, 2023. The increase in shareholders’ equity was primarily due to
net income of $6.64 million for the quarter and $164,000 from the
exercise of stock options, which was partially offset by the
payment of $1.86 million in dividends to shareholders, the
repurchase of 30,566 shares of common stock for $878,000 (an
average price of $28.74 per share), and a $340,000 increase in the
accumulated other comprehensive loss category for fair value
adjustments on available for sale investment
securities. Timberland had 374,142 shares available to
be repurchased in accordance with the terms of its existing stock
repurchase plan at September 30, 2023.
Timberland remains well capitalized with a total
risk-based capital ratio of 19.38%, a Tier 1 leverage capital ratio
of 12.10%, a tangible common equity to tangible assets ratio
(non-GAAP) of 11.91%, and a shareholders’ equity to total assets
ratio of 12.67% at September 30, 2023. Timberland’s held to
maturity investment securities were $270.22 million at September
30, 2023, with a net unrealized loss of $16.46 million (pre-tax).
Although not permitted by U.S. Generally Accepted Accounting
Principles (“GAAP”), including these unrealized losses in
accumulated other comprehensive income (loss) (“AOCI”) would result
in a ratio of shareholders’ equity to total assets of 12.04%,
compared to 12.67%, as reported.
Asset Quality
Timberland’s non-performing assets to total assets
ratio was 0.09% at September 30, 2023 compared to 0.09% at June 30,
2023 and 0.12% at September 30, 2022. There were net charge-offs of
$12,000 for the current quarter, compared to net charge-offs of
$1,000 for the preceding quarter and no charge-offs for the
comparable quarter one year ago. Due primarily to loan portfolio
growth, a $522,000 provision for loan losses was made for the
quarter ended September 30, 2023, a $610,000 provision for loan
losses was made for the quarter ended June 30, 2023 and a $270,000
provision for loan losses was made during the quarter ended
September 30, 2022.
The allowance for loan losses (“ALL”) as a
percentage of loans receivable was 1.20% at September 30, 2023,
compared to 1.20% at June 30, 2023 and 1.20% one year ago.
The ALL as a percentage of loans receivable is also
impacted by the loans acquired in the South Sound Acquisition.
Included in the recorded value of loans acquired in acquisitions
are net discounts which may reduce the need for an allowance for
loan losses on such loans because they are carried at an amount
below their outstanding principal balance. The initial recorded
value of loans acquired in the South Sound Acquisition was $123.62
million and the related fair value discount was $2.08 million, or
1.68% of the loans acquired. The remaining fair value discount on
loans acquired in the South Sound Acquisition was $192,000 at
September 30, 2023. The allowance for loan losses to loans
receivable (excluding SBA PPP loan balances and the remaining
aggregate balance of the loans acquired in the South Sound
Acquisition) was 1.21% (non-GAAP) at September 30, 2023.
Total delinquent loans (past due 30 days or more)
and non-accrual loans decreased $431,000 or 21%, to $1.67 million
at September 30, 2023, from $2.01 million one year ago, and
decreased $178,000, or 10%, from $1.84 million at June 30, 2023.
Non-accrual loans decreased $545,000, or 26%, to $1.51 million at
September 30, 2023, from $2.06 million one year ago, and decreased
$72,000, or 5%, from $1.59 million at June 30, 2023.
|
Non-Accrual Loans |
|
($ in thousands) |
| |
| |
September 30, 2023 |
|
June 30, 2023 |
|
September 30, 2022 |
| |
Amount |
|
Quantity |
|
Amount |
|
Quantity |
|
Amount |
|
Quantity |
| Mortgage loans: |
|
|
|
|
|
|
|
|
|
|
|
|
One- to four-family |
$ |
368 |
|
2 |
|
$ |
373 |
|
2 |
|
$ |
388 |
|
2 |
|
Commercial |
|
683 |
|
2 |
|
|
686 |
|
2 |
|
|
657 |
|
2 |
|
Land |
|
-- |
|
-- |
|
|
54 |
|
1 |
|
|
450 |
|
2 |
|
Total mortgage loans |
|
1,051 |
|
4 |
|
|
1,113 |
|
5 |
|
|
1,495 |
|
6 |
| |
|
|
|
|
|
|
|
|
|
|
|
| Consumer loans: |
|
|
|
|
|
|
|
|
|
|
|
|
Home equity and second |
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage |
|
177 |
|
1 |
|
|
184 |
|
1 |
|
|
252 |
|
2 |
|
Other |
|
-- |
|
1 |
|
|
-- |
|
1 |
|
|
3 |
|
1 |
|
Total consumer loans |
|
177 |
|
2 |
|
|
184 |
|
2 |
|
|
255 |
|
3 |
| |
|
|
|
|
|
|
|
|
|
|
|
| Commercial business loans |
|
286 |
|
5 |
|
|
289 |
|
4 |
|
|
309 |
|
6 |
| Total loans |
$ |
1,514 |
|
11 |
|
$ |
1,586 |
|
11 |
|
$ |
2,059 |
|
15 |
Acquisition of South Sound BankOn
October 1, 2018, the Company completed the acquisition of South
Sound Bank, a Washington-state chartered bank, headquartered in
Olympia, Washington (“South Sound Acquisition”). The Company
acquired 100% of the outstanding common stock of South Sound Bank,
and South Sound Bank was merged into Timberland Bank and the
Company. Pursuant to the terms of the merger agreement, South Sound
Bank shareholders received 0.746 of a share of the Company’s common
stock and $5.68825 in cash per share of South Sound Bank common
stock. The Company issued 904,826 shares of its common stock
(valued at $28,267,000 based on the Company’s closing stock price
on September 30, 2018 of $31.24 per share) and paid $6,903,000 in
cash in the transaction for total consideration paid of
$35,170,000.
About Timberland Bancorp, Inc. Timberland
Bancorp, Inc., a Washington corporation, is the holding company for
Timberland Bank. The Bank opened for business in 1915 and primarily
serves consumers and businesses across Grays Harbor, Thurston,
Pierce, King, Kitsap and Lewis counties, Washington with a full
range of lending and deposit services through its 23 branches
(including its main office in Hoquiam).
Disclaimer
Certain matters discussed in this press release may contain
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements relate
to our financial condition, results of operations, plans,
objectives, future performance or business. Forward-looking
statements are not statements of historical fact, are based on
certain assumptions and often include the words "believes,"
"expects," "anticipates," "estimates," "forecasts," "intends,"
"plans," "targets," "potentially," "probably," "projects,"
"outlook" or similar expressions or future or conditional verbs
such as "may," "will," "should," "would" and "could."
Forward-looking statements include statements with respect to our
beliefs, plans, objectives, goals, expectations, assumptions and
statements about future economic performance. These
forward-looking statements are subject to known and unknown risks,
uncertainties and other factors that could cause our actual results
to differ materially from the results anticipated or implied by our
forward-looking statements, including, but not limited to:
potential adverse impacts to economic conditions in our local
market areas, other markets where the Company has lending
relationships, or other aspects of the Company's business
operations or financial markets, including, without limitation, as
a result of employment levels, labor shortages and the effects of
inflation, a potential recession or slowed economic growth caused
by increasing geopolitical instability (including wars, conflicts,
terrorist attacks, natural disasters, and other unexpected events
outside of our control), as well as increasing oil prices and
supply chain disruptions, and any governmental or societal
responses to novel coronavirus disease 2019 ("COVID-19") pandemic,
including the possibility of new COVID-19 variants; credit risks of
lending activities, including changes in the level and trend of
loan delinquencies and write-offs and changes in our allowance for
loan losses and provision for loan losses that may be impacted by
deterioration in the housing and commercial real estate markets
which may lead to increased losses and non-performing loans in our
loan portfolio may result in our allowance for loan losses not
being adequate to cover actual losses, and require us to materially
increase our loan loss reserves; changes in general economic
conditions, either nationally or in our market areas; changes in
the levels of general interest rates, and the relative differences
between short and long-term interest rates, deposit interest rates,
our net interest margin and funding sources; uncertainty regarding
the future of the London Interbank Offered Rate ("LIBOR"), and the
transition away from LIBOR toward new interest rate benchmarks;
fluctuations in the demand for loans, the number of unsold homes,
land and other properties and fluctuations in real estate values in
our market areas; secondary market conditions for loans and our
ability to sell loans in the secondary market; results of
examinations of us by the Federal Reserve and of our bank
subsidiary by the Federal Deposit Insurance Corporation, the
Washington State Department of Financial Institutions, Division of
Banks or other regulatory authorities, including the possibility
that any such regulatory authority may, among other things,
institute a formal or informal enforcement action against us or our
bank subsidiary which could require us to increase our allowance
for loan losses, write-down assets, change our regulatory capital
position or affect our ability to borrow funds or maintain or
increase deposits or impose additional requirements or restrictions
on us, any of which could adversely affect our liquidity and
earnings; legislative or regulatory changes that adversely affect
our business including changes in banking, securities and tax law,
in regulatory policies and principles, or the interpretation of
regulatory capital or other rules and including changes as a result
of COVID-19; our ability to attract and retain deposits; our
ability to control operating costs and expenses; the use of
estimates in determining fair value of certain of our assets, which
estimates may prove to be incorrect and result in significant
declines in valuation; difficulties in reducing risks associated
with the loans in our consolidated balance sheet; staffing
fluctuations in response to product demand or the implementation of
corporate strategies that affect our work force and potential
associated charges; disruptions, security breaches, or other
adverse events, failures or interruptions in, or attacks on, our
information technology systems or on the third-party vendors who
perform several of our critical processing functions; our ability
to retain key members of our senior management team; costs and
effects of litigation, including settlements and judgments; our
ability to implement our business strategies; our ability to manage
loan delinquency rates; increased competitive pressures among
financial services companies; changes in consumer spending,
borrowing and savings habits; the availability of resources to
address changes in laws, rules, or regulations or to respond to
regulatory actions; our ability to pay dividends on our common
stock; the quality and composition of our securities portfolio and
the impact if any adverse changes in the securities markets,
including on market liquidity; inability of key third-party
providers to perform their obligations to us; changes in accounting
policies and practices, as may be adopted by the financial
institution regulatory agencies or the Financial Accounting
Standards Board ("FASB"), including additional guidance and
interpretation on accounting issues and details of the
implementation of new accounting methods; the economic impact of
climate change, severe weather events, natural disasters,
pandemics, epidemics and other public health crises, acts of war or
terrorism, and other external events on our business; other
economic, competitive, governmental, regulatory, and technological
factors affecting our operations, pricing, products and services
and other risks described in our reports filed with or furnished to
the Securities and Exchange Commission.
Any of the forward-looking statements that we make in this press
release and in the other public statements we make are based upon
management's beliefs and assumptions at the time they are made. We
do not undertake and specifically disclaim any obligation to
publicly update or revise any forward-looking statements included
in this press release to reflect the occurrence of anticipated or
unanticipated events or circumstances after the date of such
statements or to update the reasons why actual results could differ
from those contained in such statements, whether as a result of new
information, future events or otherwise. In light of these risks,
uncertainties and assumptions, the forward-looking statements
discussed in this document might not occur and we caution readers
not to place undue reliance on any forward-looking statements.
These risks could cause our actual results for fiscal 2024 and
beyond to differ materially from those expressed in any
forward-looking statements by, or on behalf of, us, and could
negatively affect the Company's consolidated financial condition
and results of operations as well as its stock price
performance.
| TIMBERLAND BANCORP
INC. AND SUBSIDIARYCONSOLIDATED STATEMENTS OF
INCOME |
Three Months Ended |
| ($ in thousands, except per
share amounts) (unaudited) |
Sept. 30, |
|
June 30, |
|
Sept. 30, |
| |
2023 |
|
2023 |
|
2022 |
|
Interest and dividend income |
|
|
|
|
|
|
Loans receivable |
$ |
17,532 |
|
$ |
16,215 |
|
|
$ |
13,454 |
|
Investment securities |
|
2,326 |
|
|
2,384 |
|
|
|
1,476 |
|
Dividends from mutual funds, FHLB stock and other investments |
|
85 |
|
|
70 |
|
|
|
40 |
|
Interest bearing deposits in banks |
|
1,619 |
|
|
1,220 |
|
|
|
2,048 |
|
Total interest and dividend income |
|
21,562 |
|
|
19,889 |
|
|
|
17,018 |
| |
|
|
|
|
|
|
Interest expense |
|
|
|
|
|
|
Deposits |
|
4,574 |
|
|
3,123 |
|
|
|
755 |
|
Borrowings |
|
157 |
|
|
132 |
|
|
|
-- |
|
Total interest expense |
|
4,731 |
|
|
3,255 |
|
|
|
755 |
|
Net interest income |
|
16,831 |
|
|
16,634 |
|
|
|
16,263 |
|
Provision for loan losses |
|
522 |
|
|
610 |
|
|
|
270 |
|
Net interest income after provision for loan
losses |
|
16,309 |
|
|
16,024 |
|
|
|
15,993 |
| |
|
|
|
|
|
|
Non-interest income |
|
|
|
|
|
|
Service charges on deposits |
|
1,015 |
|
|
970 |
|
|
|
985 |
|
ATM and debit card interchange transaction fees |
|
1,333 |
|
|
1,335 |
|
|
|
1,341 |
|
Gain on sales of loans, net |
|
97 |
|
|
80 |
|
|
|
173 |
|
Bank owned life insurance (“BOLI”) net earnings |
|
237 |
|
|
157 |
|
|
|
157 |
|
Gain on sale of investment securities, net |
|
-- |
|
|
95 |
|
|
|
-- |
|
Recoveries on investment securities, net |
|
2 |
|
|
2 |
|
|
|
6 |
|
Other |
|
240 |
|
|
236 |
|
|
|
334 |
|
Total non-interest income, net |
|
2,924 |
|
|
2,875 |
|
|
|
2,996 |
| |
|
|
|
|
|
|
Non-interest expense |
|
|
|
|
|
|
Salaries and employee benefits |
|
5,756 |
|
|
5,860 |
|
|
|
5,210 |
|
Premises and equipment |
|
982 |
|
|
1,010 |
|
|
|
921 |
|
Loss (gain) on sale of premises and equipment, net |
|
12 |
|
|
(32 |
) |
|
|
13 |
|
Advertising |
|
235 |
|
|
179 |
|
|
|
182 |
|
OREO and other repossessed assets, net |
|
-- |
|
|
-- |
|
|
|
1 |
|
ATM and debit card processing |
|
524 |
|
|
491 |
|
|
|
514 |
|
Postage and courier |
|
135 |
|
|
128 |
|
|
|
137 |
|
State and local taxes |
|
325 |
|
|
297 |
|
|
|
308 |
|
Professional fees |
|
599 |
|
|
577 |
|
|
|
574 |
|
FDIC insurance expense |
|
194 |
|
|
191 |
|
|
|
129 |
|
Loan administration and foreclosure |
|
118 |
|
|
126 |
|
|
|
128 |
|
Data processing and telecommunications |
|
933 |
|
|
944 |
|
|
|
739 |
|
Deposit operations |
|
346 |
|
|
430 |
|
|
|
358 |
|
Amortization of core deposit intangible (“CDI”) |
|
68 |
|
|
68 |
|
|
|
79 |
|
Other, net |
|
740 |
|
|
658 |
|
|
|
861 |
|
Total non-interest expense, net |
|
10,967 |
|
|
10,927 |
|
|
|
10,154 |
| |
|
|
|
|
|
|
Income before income taxes |
|
8,266 |
|
|
7,972 |
|
|
|
8,835 |
|
Provision for income taxes |
|
1,624 |
|
|
1,666 |
|
|
|
1,786 |
|
Net income |
$ |
6,642 |
|
$ |
6,306 |
|
|
$ |
7,049 |
| |
|
|
|
|
|
|
Net income per common share: |
|
|
|
|
|
|
Basic |
$ |
0.82 |
|
$ |
0.77 |
|
|
$ |
0.86 |
|
Diluted |
|
0.81 |
|
|
0.77 |
|
|
|
0.85 |
| |
|
|
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
Basic |
|
8,094,719 |
|
|
8,156,831 |
|
|
|
8,243,557 |
|
Diluted |
|
8,156,497 |
|
|
8,213,975 |
|
|
|
8,313,178 |
| TIMBERLAND BANCORP
INC. AND SUBSIDIARYCONSOLIDATED STATEMENTS OF
INCOME |
Year Ended |
| ($ in thousands, except per
share amounts) (unaudited) |
Sept. 30, |
|
Sept. 30, |
| |
2023 |
|
2022 |
|
Interest and dividend income |
|
|
|
|
Loans receivable |
$ |
63,154 |
|
|
$ |
51,324 |
|
|
Investment securities |
|
9,384 |
|
|
|
3,488 |
|
|
Dividends from mutual funds, FHLB stock and other investments |
|
270 |
|
|
|
120 |
|
|
Interest bearing deposits in banks |
|
7,143 |
|
|
|
3,576 |
|
|
Total interest and dividend income |
|
79,951 |
|
|
|
58,508 |
|
| |
|
|
|
|
Interest expense |
|
|
|
|
Deposits |
|
11,302 |
|
|
|
2,657 |
|
|
Borrowings |
|
290 |
|
|
|
17 |
|
|
Total interest expense |
|
11,592 |
|
|
|
2,674 |
|
|
Net interest income |
|
68,359 |
|
|
|
55,834 |
|
|
Provision for loan losses |
|
2,132 |
|
|
|
270 |
|
|
Net interest income after provision for loan
losses |
|
66,227 |
|
|
|
55,564 |
|
| |
|
|
|
|
Non-interest income |
|
|
|
|
Service charges on deposits |
|
3,824 |
|
|
|
3,964 |
|
|
ATM and debit card interchange transaction fees |
|
5,194 |
|
|
|
5,210 |
|
|
Gain on sales of loans, net |
|
244 |
|
|
|
1,510 |
|
|
BOLI net earnings |
|
706 |
|
|
|
613 |
|
|
Valuation recovery on loan servicing rights, net |
|
-- |
|
|
|
119 |
|
|
Gain on sale of investment securities, net |
|
95 |
|
|
|
-- |
|
|
Recoveries on investment securities, net |
|
9 |
|
|
|
22 |
|
|
Other |
|
1,068 |
|
|
|
1,186 |
|
|
Total non-interest income, net |
|
11,140 |
|
|
|
12,624 |
|
| |
|
|
|
|
Non-interest expense |
|
|
|
|
Salaries and employee benefits |
|
23,562 |
|
|
|
20,816 |
|
|
Premises and equipment |
|
3,915 |
|
|
|
3,736 |
|
|
(Gain) loss on sales of premises and equipment, net |
|
(19 |
) |
|
|
13 |
|
|
Advertising |
|
786 |
|
|
|
695 |
|
|
OREO and other repossessed assets, net |
|
1 |
|
|
|
(17 |
) |
|
ATM and debit card processing |
|
1,987 |
|
|
|
1,943 |
|
|
Postage and courier |
|
532 |
|
|
|
577 |
|
|
State and local taxes |
|
1,219 |
|
|
|
1,062 |
|
|
Professional fees |
|
2,078 |
|
|
|
1,747 |
|
|
FDIC insurance expense |
|
711 |
|
|
|
506 |
|
|
Loan administration and foreclosure |
|
503 |
|
|
|
508 |
|
|
Data processing and telecommunications |
|
3,545 |
|
|
|
2,719 |
|
|
Deposit operations |
|
1,368 |
|
|
|
1,235 |
|
|
Amortization of CDI |
|
271 |
|
|
|
316 |
|
|
Other, net |
|
2,914 |
|
|
|
2,770 |
|
|
Total non-interest expense, net |
|
43,373 |
|
|
|
38,626 |
|
| |
|
|
|
|
Income before income taxes |
|
33,994 |
|
|
|
29,562 |
|
|
Provision for income taxes |
|
6,876 |
|
|
|
5,962 |
|
|
Net income |
$ |
27,118 |
|
|
$ |
23,600 |
|
| |
|
|
|
|
Net income per common share: |
|
|
|
|
Basic |
$ |
3.32 |
|
|
$ |
2.84 |
|
|
Diluted |
|
3.29 |
|
|
|
2.82 |
|
| |
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
|
Basic |
|
8,175,898 |
|
|
|
8,304,002 |
|
|
Diluted |
|
8,248,181 |
|
|
|
8,383,335 |
|
| TIMBERLAND
BANCORP INC. AND SUBSIDIARYCONSOLIDATED BALANCE
SHEETS |
|
| ($ in thousands,
except per share amounts) (unaudited) |
Sept. 30, |
|
June 30, |
|
Sept. 30, |
| |
2023 |
|
2023 |
|
2022 |
|
Assets |
|
|
|
|
|
| Cash and due from
financial institutions |
$ |
25,390 |
|
|
$ |
28,308 |
|
|
$ |
24,808 |
|
| Interest-bearing
deposits in banks |
|
103,331 |
|
|
|
101,645 |
|
|
|
291,947 |
|
|
|
Total cash and cash equivalents |
|
128,721 |
|
|
|
129,953 |
|
|
|
316,755 |
|
| |
|
|
|
|
|
|
| Certificates of
deposit (“CDs”) held for investment, at cost |
|
15,188 |
|
|
|
16,931 |
|
|
|
22,894 |
|
| Investment
securities: |
|
|
|
|
|
| |
Held to maturity, at amortized cost |
|
270,218 |
|
|
|
275,053 |
|
|
|
266,608 |
|
| |
Available for sale, at fair value |
|
41,771 |
|
|
|
43,842 |
|
|
|
41,415 |
|
| Investments in
equity securities, at fair value |
|
811 |
|
|
|
837 |
|
|
|
835 |
|
| FHLB stock |
|
3,602 |
|
|
|
2,802 |
|
|
|
2,194 |
|
| Other investments,
at cost |
|
3,000 |
|
|
|
3,000 |
|
|
|
3,000 |
|
| Loans held for
sale |
|
400 |
|
|
|
-- |
|
|
|
748 |
|
| |
|
|
|
|
|
| Loans
receivable |
|
1,318,122 |
|
|
|
1,275,954 |
|
|
|
1,146,129 |
|
| Less: Allowance
for loan losses |
|
(15,817 |
) |
|
|
(15,307 |
) |
|
|
(13,703 |
) |
| |
Net loans receivable |
|
1,302,305 |
|
|
|
1,260,647 |
|
|
|
1,132,426 |
|
| |
|
|
|
|
|
|
| Premises and
equipment, net |
|
21,642 |
|
|
|
21,574 |
|
|
|
21,898 |
|
| BOLI |
|
22,966 |
|
|
|
23,276 |
|
|
|
22,806 |
|
| Accrued interest
receivable |
|
6,004 |
|
|
|
5,451 |
|
|
|
4,483 |
|
| Goodwill |
|
15,131 |
|
|
|
15,131 |
|
|
|
15,131 |
|
| CDI |
|
677 |
|
|
|
745 |
|
|
|
948 |
|
| Loan servicing
rights, net |
|
2,124 |
|
|
|
2,321 |
|
|
|
3,023 |
|
| Operating lease
right-of-use assets |
|
1,772 |
|
|
|
1,845 |
|
|
|
1,980 |
|
| Other assets |
|
3,573 |
|
|
|
4,305 |
|
|
|
3,364 |
|
| |
Total assets |
$ |
1,839,905 |
|
|
$ |
1,807,713 |
|
|
$ |
1,860,508 |
|
| |
|
|
|
|
|
|
|
Liabilities and shareholders’ equity |
|
|
|
|
|
| Deposits:
Non-interest-bearing demand |
$ |
455,864 |
|
|
$ |
452,729 |
|
|
$ |
530,058 |
|
| Deposits:
Interest-bearing |
|
1,105,071 |
|
|
|
1,100,001 |
|
|
|
1,102,118 |
|
| |
Total deposits |
|
1,560,935 |
|
|
|
1,552,730 |
|
|
|
1,632,176 |
|
| |
|
|
|
|
|
|
| Operating lease
liabilities |
|
1,867 |
|
|
|
1,939 |
|
|
|
2,066 |
|
| FHLB
borrowings |
|
35,000 |
|
|
|
15,000 |
|
|
|
-- |
|
| Other liabilities
and accrued expenses |
|
9,030 |
|
|
|
8,781 |
|
|
|
7,697 |
|
| |
Total liabilities |
|
1,606,832 |
|
|
|
1,578,450 |
|
|
|
1,641,939 |
|
|
|
|
|
|
|
|
|
Shareholders’ equity |
|
|
|
|
|
|
Common stock, $.01 par value; 50,000,000 shares authorized; |
|
|
|
|
|
|
8,105,338 shares issued and outstanding – September 30, 2023 |
|
|
|
|
|
|
8,094,174 shares issued and outstanding – June 30, 2023 |
|
|
|
|
|
|
8,221,952 shares issued and outstanding – September 30, 2022 |
|
34,771 |
|
|
|
35,401 |
|
|
|
38,751 |
|
| Retained
earnings |
|
199,386 |
|
|
|
194,606 |
|
|
|
180,535 |
|
| Accumulated other
comprehensive loss |
|
(1,084 |
) |
|
|
(744 |
) |
|
|
(717 |
) |
| |
Total shareholders’ equity |
|
233,073 |
|
|
|
229,263 |
|
|
|
218,569 |
|
| |
Total liabilities and shareholders’ equity |
$ |
1,839,905 |
|
|
$ |
1,807,713 |
|
|
$ |
1,860,508 |
|
| KEY FINANCIAL RATIOS AND
DATA ($ in
thousands, except per share amounts) (unaudited) |
|
| |
Three Months Ended |
| PERFORMANCE
RATIOS: |
Sept. 30, 2023 |
|
June 30, 2023 |
|
Sept. 30, 2022 |
|
Return on average assets (a) |
|
1.45% |
|
|
1.42% |
|
|
1.51% |
| Return on average equity (a) |
|
11.52% |
|
|
11.07% |
|
|
13.06% |
| Net interest margin (a) |
|
3.85% |
|
|
3.94% |
|
|
3.64% |
| Efficiency ratio |
|
55.52% |
|
|
56.01% |
|
|
52.72% |
| |
|
|
|
|
|
| |
Year Ended |
| PERFORMANCE
RATIOS: |
Sept. 30, 2023 |
|
|
|
Sept. 30, 2022 |
| Return on average assets (a) |
|
1.50% |
|
|
|
|
1.27% |
| Return on average equity (a) |
|
12.01% |
|
|
|
|
11.14% |
| Net interest margin (a) |
|
3.95% |
|
|
|
|
3.16% |
| Efficiency ratio |
|
54.56% |
|
|
|
|
56.42% |
| |
|
|
|
|
|
| |
At or for the Period Indicated |
| ASSET QUALITY RATIOS AND
DATA: |
Sept. 30, 2023 |
|
June 30, 2023 |
|
Sept. 30, 2022 |
| Non-accrual loans |
$ |
1,514 |
|
$ |
1,586 |
|
$ |
2,059 |
| Loans past due 90 days and still
accruing |
|
-- |
|
|
-- |
|
|
-- |
| Non-performing investment
securities |
|
82 |
|
|
87 |
|
|
106 |
| OREO and other repossessed
assets |
|
-- |
|
|
-- |
|
|
-- |
| Total non-performing assets
(b) |
$ |
1,596 |
|
$ |
1,673 |
|
$ |
2,165 |
| |
|
|
|
|
|
| Non-performing assets to total
assets (b) |
|
0.09% |
|
|
0.09% |
|
|
0.12% |
| Net charge-offs (recoveries)
during quarter |
$ |
12 |
|
$ |
1 |
|
$ |
-- |
| ALL to non-accrual loans, |
|
1,045% |
|
|
965% |
|
|
666% |
| ALL to loans receivable (c) |
|
1.20% |
|
|
1.20% |
|
|
1.20% |
| ALL to loans receivable
(excluding SBA PPP loans) (d) (non-GAAP) |
|
1.21% |
|
|
1.20% |
|
|
1.20% |
| ALL to loans receivable
(excluding SBA PPP loans and South Sound Acquisition loans) (d) (e)
(non-GAAP) |
|
1.21% |
|
|
1.21% |
|
|
1.22% |
| Troubled debt restructured loans
on accrual status (f) |
$ |
2,495 |
|
$ |
2,604 |
|
$ |
2,472 |
|
|
|
|
|
|
|
|
CAPITAL RATIOS: |
|
|
|
|
|
| Tier 1 leverage capital |
|
12.10% |
|
|
12.27% |
|
|
11.03% |
| Tier 1 risk-based capital |
|
18.13% |
|
|
18.11% |
|
|
18.02% |
| Common equity Tier 1 risk-based
capital |
|
18.13% |
|
|
18.11% |
|
|
18.02% |
|
Total risk-based capital |
|
19.38% |
|
|
19.36% |
|
|
19.45% |
| Tangible common equity to
tangible assets (non-GAAP) |
|
11.91% |
|
|
11.91% |
|
|
10.98% |
| |
|
|
|
|
|
|
BOOK VALUES: |
|
|
|
|
|
| Book value per common share |
$ |
28.76 |
|
$ |
28.32 |
|
$ |
26.58 |
| Tangible book value per common
share (g) |
|
26.81 |
|
|
26.36 |
|
|
24.63 |
________________________________________________
(a) Annualized(b) Non-performing assets include
non-accrual loans, loans past due 90 days and still accruing,
non-performing investment securities and OREO and other repossessed
assets. Troubled debt restructured loans on accrual status are not
included. (c) Does not include loans held for sale and is before
the allowance for loan losses.(d) Does not include PPP loans
totaling $466, $519 and $1,001 at September 30, 2023, June 30, 2023
and September 30, 2022, respectively.(e) Does not include loans
acquired in the South Sound Acquisition totaling $11,717, $13,043
and $19,042 at September 30, 2023, June 30, 2023 and September 30,
2022, respectively.(f) Does not include troubled debt restructured
loans totaling $0, $0 and $142 reported as non-accrual loans at
September 30, 2023, June 30, 2023 and September 30, 2022,
respectively. (g) Tangible common equity divided by common shares
outstanding
(non-GAAP). AVERAGE
BALANCES, YIELDS, AND RATES - QUARTERLY ($ in
thousands)(unaudited)
| |
For the Three Months Ended |
| |
September 30, 2023 |
|
June 30, 2023 |
|
September 30, 2022 |
| |
Amount |
|
Rate |
|
Amount |
|
Rate |
|
Amount |
|
Rate |
| |
|
|
|
|
|
|
|
|
|
|
|
| Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Loans receivable and loans held for sale |
$ |
1,300,743 |
|
|
5.39% |
|
$ |
1,254,044 |
|
|
5.17% |
|
$ |
1,122,290 |
|
|
4.80% |
| Investment securities and FHLB
stock (1) |
|
322,122 |
|
|
2.99 |
|
|
331,385 |
|
|
2.96 |
|
|
287,841 |
|
|
2.11 |
| Interest-earning deposits in
banks and CDs |
|
123,894 |
|
|
5.23 |
|
|
101,798 |
|
|
4.79 |
|
|
376,220 |
|
|
2.18 |
|
Total interest-earning assets |
|
1,746,759 |
|
|
4.94 |
|
|
1,687,227 |
|
|
4.72 |
|
|
1,786,351 |
|
|
3.81 |
| Other assets |
|
84,191 |
|
|
|
|
|
84,255 |
|
|
|
|
|
83,922 |
|
|
|
|
Total assets |
$ |
1,830,950 |
|
|
|
|
$ |
1,771,482 |
|
|
|
|
$ |
1,870,273 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Liabilities and
Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
| NOW checking accounts |
$ |
390,787 |
|
|
1.27% |
|
$ |
387,426 |
|
|
1.02% |
|
$ |
454,161 |
|
|
0.18% |
| Money market accounts |
|
198,650 |
|
|
0.98 |
|
|
205,023 |
|
|
0.84 |
|
|
252,699 |
|
|
0.37 |
| Savings accounts |
|
234,094 |
|
|
0.21 |
|
|
255,463 |
|
|
0.19 |
|
|
284,974 |
|
|
0.08 |
| Certificates of deposit
accounts |
|
284,403 |
|
|
3.85 |
|
|
210,950 |
|
|
3.03 |
|
|
122,803 |
|
|
0.80 |
|
Total interest-bearing deposits |
|
1,107,934 |
|
|
1.66 |
|
|
1,058,862 |
|
|
1.18 |
|
|
1,114,637 |
|
|
0.27 |
| Borrowings |
|
15,435 |
|
|
4.04 |
|
|
12,255 |
|
|
4.32 |
|
|
-- |
|
|
-- |
|
Total interest-bearing liabilities |
|
1,123,369 |
|
|
1.69 |
|
|
1,071,117 |
|
|
1.22 |
|
|
1,114,637 |
|
|
0.27 |
| |
|
|
|
|
|
|
|
|
|
|
|
| Non-interest-bearing demand
deposits |
|
465,183 |
|
|
|
|
|
462,315 |
|
|
|
|
|
528,706 |
|
|
|
| Other liabilities |
|
11,873 |
|
|
|
|
|
10,199 |
|
|
|
|
|
11,078 |
|
|
|
| Shareholders’ equity |
|
230,525 |
|
|
|
|
|
227,851 |
|
|
|
|
|
215,852 |
|
|
|
|
Total liabilities and shareholders’ equity |
$ |
1,830,950 |
|
|
|
|
$ |
1,771,482 |
|
|
|
|
$ |
1,820,273 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread |
|
|
3.25% |
|
|
|
3.50% |
|
|
|
3.54% |
|
Net interest margin (2) |
|
|
3.85% |
|
|
|
3.94% |
|
|
|
3.64% |
|
Average interest-earning assets to |
|
|
|
|
|
|
|
|
|
|
|
|
average interest-bearing liabilities |
|
155.49 |
% |
|
|
|
|
157.52 |
% |
|
|
|
|
160.26 |
% |
|
|
_____________________________________(1) Includes other
investments(2) Net interest margin = annualized net interest income
/ average interest-earning
assets
| |
For the Year Ended |
| |
September 30, 2023 |
|
September 30, 2022 |
| |
Amount |
|
Rate |
|
Amount |
|
Rate |
| |
|
|
|
|
|
|
|
| Assets |
|
|
|
|
|
|
|
|
Loans receivable and loans held for sale |
$ |
1,230,101 |
|
|
5.13% |
|
$ |
1,055,635 |
|
|
4.86% |
| Investment securities and FHLB
stock (1) |
|
330,751 |
|
|
2.92 |
|
|
230,871 |
|
|
1.56 |
| Interest-earning deposits in
banks and CDs |
|
167,718 |
|
|
4.26 |
|
|
482,162 |
|
|
0.74 |
|
Total interest-earning assets |
|
1,728,570 |
|
|
4.63 |
|
|
1,768,668 |
|
|
3.31 |
| Other assets |
|
84,205 |
|
|
|
|
|
83,895 |
|
|
|
|
Total assets |
$ |
1,812,775 |
|
|
|
|
$ |
1,852,563 |
|
|
|
|
|
|
|
|
|
|
|
|
| Liabilities and
Shareholders’ Equity |
|
|
|
|
|
|
|
| NOW checking accounts |
$ |
407,679 |
|
|
0.87% |
|
$ |
449,574 |
|
|
0.14% |
| Money market accounts |
|
215,465 |
|
|
0.74 |
|
|
244,498 |
|
|
0.31 |
| Savings accounts |
|
261,006 |
|
|
0.16 |
|
|
278,025 |
|
|
0.08 |
| Certificates of deposit
accounts |
|
200,476 |
|
|
2.86 |
|
|
127,277 |
|
|
0.79 |
|
Total interest-bearing deposits |
|
1,084,626 |
|
|
1.04 |
|
|
1,099,374 |
|
|
0.24 |
| Borrowings |
|
6,948 |
|
|
4.17 |
|
|
1,430 |
|
|
1.19 |
|
Total interest-bearing liabilities |
|
1,091,574 |
|
|
1.06 |
|
|
1,100,804 |
|
|
0.24 |
| |
|
|
|
|
|
|
|
| Non-interest-bearing demand
deposits |
|
484,795 |
|
|
|
|
|
529,702 |
|
|
|
| Other liabilities |
|
10,557 |
|
|
|
|
|
10,224 |
|
|
|
| Shareholders’ equity |
|
225,849 |
|
|
|
|
|
211,833 |
|
|
|
|
Total liabilities and shareholders’ equity |
$ |
1,812,775 |
|
|
|
|
$ |
1,852,563 |
|
|
|
| |
|
|
|
|
|
|
|
|
Interest rate spread |
|
|
3.57% |
|
|
|
3.07% |
|
Net interest margin (2) |
|
|
3.95% |
|
|
|
3.16% |
|
Average interest-earning assets to |
|
|
|
|
|
|
|
|
average interest-bearing liabilities |
|
158.36 |
% |
|
|
|
|
160.67 |
% |
|
|
_____________________________________(1) Includes other
investments(2) Net interest margin = annualized net interest income
/ average interest-earning assets
Non-GAAP Financial MeasuresIn addition to
results presented in accordance with GAAP, this press release
contains certain non-GAAP financial measures. Timberland believes
that certain non-GAAP financial measures provide investors with
information useful in understanding the Company’s financial
performance; however, readers of this report are urged to review
these non-GAAP financial measures in conjunction with GAAP results
as reported.
Financial measures that exclude intangible assets are non-GAAP
measures. To provide investors with a broader understanding of
capital adequacy, Timberland provides non-GAAP financial measures
for tangible common equity, along with the GAAP measure. Tangible
common equity is calculated as shareholders’ equity less goodwill
and CDI. In addition, tangible assets equal total assets less
goodwill and CDI.
The following table provides a reconciliation of ending
shareholders’ equity (GAAP) to ending tangible shareholders’ equity
(non-GAAP) and ending total assets (GAAP) to ending tangible assets
(non-GAAP).
| ($ in thousands) |
September 30, 2023 |
|
June 30, 2023 |
|
September 30, 2022 |
| |
|
|
|
|
|
|
Shareholders’ equity |
$ |
233,073 |
|
|
$ |
229,263 |
|
|
$ |
218,569 |
|
| Less goodwill and CDI |
|
(15,808 |
) |
|
|
(15,876 |
) |
|
|
(16,079 |
) |
| Tangible common equity |
$ |
217,265 |
|
|
$ |
213,387 |
|
|
$ |
202,490 |
|
| |
|
|
|
|
|
| Total assets |
$ |
1,839,905 |
|
|
$ |
1,807,713 |
|
|
$ |
1,860,508 |
|
| Less goodwill and CDI |
|
(15,808 |
) |
|
|
(15,876 |
) |
|
|
(16,079 |
) |
| Tangible assets |
$ |
1,824,097 |
|
|
$ |
1,791,837 |
|
|
$ |
1,844,429 |
|
|
Contact: |
Dean
J. Brydon, CEO |
| |
Jonathan A. Fischer, President & COO |
| |
Marci A. Basich, CFO |
| |
(360) 533-4747 |
| |
www.timberlandbank.com |
Grafico Azioni Timberland Bancorp (NASDAQ:TSBK)
Storico
Da Ott 2024 a Nov 2024
Grafico Azioni Timberland Bancorp (NASDAQ:TSBK)
Storico
Da Nov 2023 a Nov 2024
