STOCK TITAN

Timberland Bancorp Announces Third Fiscal Quarter Earnings

Rhea-AI Impact
(Low)
Rhea-AI Sentiment
(Neutral)
Tags
Rhea-AI Summary

Timberland Bancorp reported a net income of $5.74 million or $0.69 per share for Q3 2022, reflecting an 8% increase from the prior quarter but a decline from $7.02 million a year earlier. For the first nine months, net income was $16.55 million, down from $21.57 million year-over-year. The total asset value grew by 1% to $1.89 billion, with deposits rising by 9% year-over-year. A quarterly cash dividend of $0.22 was announced, payable on August 26, 2022.

Positive
  • Quarterly net income grew 8% from Q2 2022.
  • Loan portfolio increased by 5.7% during the quarter.
  • NIM improved to 3.11% from 2.95% in Q2 2022.
Negative
  • Year-over-year net income decreased from $7.02 million to $5.74 million.
  • Operating revenue decreased 2% from Q3 2021.
  • Total operating expenses increased 15% year-over-year.
  • Third Fiscal Quarter Net Income of $5.74 Million
  • Quarterly Return on Average Equity of 10.80%
  • Loan Portfolio (Excluding PPP Loans) Increased 5.7% During Quarter
  • Announces $0.22 Quarterly Cash Dividend

HOQUIAM, Wash., July 26, 2022 (GLOBE NEWSWIRE) -- Timberland Bancorp, Inc. (NASDAQ: TSBK) (“Timberland” or “the Company”), the holding company for Timberland Bank (the “Bank”), today reported net income of $5.74 million, or $0.69 per diluted common share, for the quarter ended June 30, 2022. This compares to net income of $5.33 million, or $0.63 per diluted common share, for the preceding quarter and $7.02 million, or $0.83 per diluted common share, for the comparable quarter one year ago.

For the first nine months of fiscal 2022, Timberland earned $16.55 million, or $1.97 per diluted common share, compared to $21.57 million or $2.55 per diluted common share for the first nine months of fiscal 2021.

Timberland’s Board of Directors declared a quarterly cash dividend to shareholders of $0.22 per share, payable on August 26, 2022, to shareholders of record on August 12, 2022.

“Timberland generated strong fiscal third quarter financial results,” stated Michael Sand, CEO. “Compared to the prior quarter, net income and earnings per share increased 8% and 10%, respectively, largely on the strength of continued solid loan growth and higher interest rates. This quarter we experienced continued strong loan growth, with net loans receivable, excluding Paycheck Protection Program (“PPP”) loans, increasing 5.7%, or 22.8% on an annualized basis. Loan growth was primarily due to increases in multi-family, commercial business, commercial real estate and residential mortgage loans originated within our western Washington market footprint. Increased interest income from the larger loan portfolio more than offset the quarter’s $584,000 decrease in income from the soon to be completely forgiven PPP loan portfolio.”

“Our net interest margin expanded 16 basis points compared to the prior quarter, benefitting from the recent interest rate increases enacted by the Federal Reserve,” added Dean Brydon, President and CFO. “This expansion was a result of deploying excess liquidity to fund loan growth, and from investing in short and moderate duration investments to supplement interest income. The Company continues to be well positioned to benefit from additional Federal Reserve actions to increase interest rates, and we anticipate additional opportunities to invest excess liquidity during the next several quarters.”

Third Fiscal Quarter 2022 Earnings and Balance Sheet Highlights (at or for the period ended June 30, 2022, compared to June 30, 2021, or March 31, 2022):
  
    Earnings Highlights:

  • Net income was $5.74 million for the current quarter compared to $5.33 million for the preceding quarter and $7.02 million for the comparable quarter one year ago; Earnings per diluted common share (“EPS”) was $0.69 for the current quarter compared to $0.63 for the preceding quarter and $0.83 for the comparable quarter one year ago;
  • Net income was $16.55 million for the first nine months of fiscal 2022 compared to $21.57 million for the first nine months of fiscal 2021; EPS was $1.97 for the first nine months of fiscal 2022 compared to $2.55 for the first nine months of fiscal 2021;
  • Return on average equity (“ROE”) and return on average assets (“ROA”) for the current quarter were 10.80% and 1.22%, respectively;
  • Net interest margin (“NIM”) was 3.11% for the current quarter compared to 2.95% for the preceding quarter and 3.22% for the comparable quarter one year ago; and
  • The efficiency ratio was 57.80% for the current quarter compared to 58.42% for the preceding quarter and 49.43% for the comparable quarter one year ago.

   Balance Sheet Highlights:

  • Total assets increased 8% year-over-year and 1% from the prior quarter;
  • Total deposits increased 9% year-over-year and increased slightly (less than 1%) from the prior quarter;
  • Net loans receivable (excluding SBA PPP loans) increased 19.9% year-over-year and 5.7% from the prior quarter;
  • Net loans receivable (including SBA PPP loans) increased 5.2% from the prior quarter;
  • Non-performing assets to total assets ratio improved to 0.13% from 0.16% at March 31, 2022;
  • Total shareholders’ equity increased $2.05 million, or 1%, to $214.32 million, from $212.27 million at March 31, 2022; and
  • Book and tangible book (non-GAAP) values per common share increased to $25.98 and $24.02, respectively, at June 30, 2022.

Operating Results

Operating revenue (net interest income before the provision for loan losses plus non-interest income) increased 7% to $17.08 million for the third fiscal quarter from $15.98 million for the preceding quarter and decreased 2% from $17.34 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 investment securities and interest bearing deposits in banks. Increased interest income from growth in the loan portfolio more than offset a $584,000 decrease in SBA PPP loan income.   Operating revenue decreased 6% to $49.20 million for the first nine months of fiscal 2022 from $52.46 million for the comparable period one year ago, primarily due to a decrease in mortgage banking revenue.

Net interest income increased 8% to $13.98 million for the current quarter from $12.89 million for the preceding quarter and increased 6% from $13.16 million for the comparable quarter one year ago.   Timberland’s NIM for the current quarter was 3.11% compared to 2.95% for the preceding quarter and 3.22% for the comparable quarter one year ago.   The NIM for the current quarter was increased by approximately five basis points due to the accretion of $63,000 of the fair value discount on loans acquired in the South Sound Acquisition and the collection of $147,000 in pre-payment penalties, non-accrual interest, and late fees. The NIM for the preceding quarter was increased by approximately six basis points due to the accretion of $34,000 of the fair value discount on loans acquired in the South Sound Acquisition and the collection of $246,000 in pre-payment penalties, non-accrual interest and late fees. The NIM for the comparable quarter one year ago was increased by approximately 13 basis points due to the accretion of $84,000 of the fair value discount on loans acquired in the South Sound Acquisition and the collection of $443,000 in pre-payment penalties, non-accrual interest and late fees. Net interest income increased 2% to $39.57 million for the first nine months of fiscal 2022 from $38.75 million for the first nine months of fiscal 2021. Timberland’s net interest margin for the first nine months of fiscal 2022 was 2.99% compared to 3.30% for the first nine months of fiscal 2021.

U.S. Small Business Administration (“SBA”) PPP loans contributed 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 June 30, 2022, Timberland had SBA PPP deferred loan origination fees of $52,000 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
 June 30, 2022 March 31, 2022 June 30, 2021
Interest income$9 $      31    $                293
Loan origination fee accretion 146  708  1,296
Total SBA PPP loan income$           155 $                739 $                   1,589
      
 Nine Months Ended
 June 30, 2022   June 30, 2021
Interest income$111   $893
Loan origination fee accretion 1,782    3,583
Total SBA PPP loan income$             1,893   $                   4,476
      

No provision for loan losses was made during the quarters ended June 30, 2022, March 31, 2022, and June 30, 2021.

Non-interest income increased 1% to $3.10 million for the current quarter from $3.08 million for the preceding quarter and decreased 27% from $4.27 million for the comparable quarter one year ago. The increase in non-interest income compared to the preceding quarter was primarily due to a $98,000 increase in ATM and debit card interchange transaction fees and smaller increases in several other categories.   These increases were partially offset by a $158,000 decrease in gain on sales of loans. The quarterly year-over-year decrease in non-interest income was primarily due to a $1.35 million decrease in gain on sales of loans, which was partially offset by a $179,000 reduction in the valuation allowance on loan servicing rights. Fiscal year-to-date non-interest income decreased 30% to $9.63 million from $13.71 million for the first nine months of fiscal 2021, primarily due to a $4.03 million decrease in gain on sales of loans.   The decrease in gain on sales of loans for the three and nine month periods ended June 30, 2022 was primarily due to decreases in the dollar amount of fixed-rate one- to four-family loans originated and sold (as refinance demand slowed) and decreases in the average pricing margin compared to the same periods last year.

Total operating expenses for the current quarter increased $541,000, or 6%, to $9.87 million from $9.33 million for the preceding quarter and increased $1.26 million, or 15%, from $8.61 million for the comparable quarter one year ago.   The increase in operating expenses compared to the preceding quarter was primarily due to a $258,000 increase in professional fees expense and smaller increases in several other expense categories. These increases were partially offset by smaller decreases in several expense categories. The increase in professional fees expense was primarily due to higher legal and consulting fees.   Fiscal year-to-date operating expenses increased 11% to $28.47 million from $25.57 million for the first nine months of fiscal 2021.   The year-to-date increase in operating expenses was primarily due to a $1.66 million increase in salaries and employee benefits expense and a $498,000 increase in professional fees expense. The increase in salaries and employee benefits expense was primarily due to annual salary adjustments (effective October 1st) and the hiring of additional lending personnel. The efficiency ratio for the current quarter was 57.80% compared to 58.42% for the preceding quarter and 49.43% for the comparable quarter one year ago. The efficiency ratio for the first nine months of fiscal 2022 was 57.87% compared to 48.75% for the first nine months of fiscal 2021.

The provision for income taxes for the current quarter increased $156,000 to $1.47 million from $1.32 million for the preceding quarter, primarily due to higher taxable income.   Timberland’s effective income tax rate was 20.4% for the quarter ended June 30, 2022 compared to 19.8% for the quarter ended March 31, 2022 and 20.3% for the quarter ended quarter ended June 30, 2021.   Timberland’s effective income tax rate was 20.1% for the first nine months of fiscal 2022 compared to 19.8% for the first nine months of fiscal 2021.

Balance Sheet Management

Total assets increased $10.33 million, or 1%, to $1.89 billion at June 30, 2022 from $1.88 billion at March 31, 2022.   The quarter’s increase was primarily due to a $53.89 million increase in net loans receivable, a $28.55 million increase in investment securities and CDs held for investment, and smaller increases in several other categories. These increases were partially offset by a $70.15 million decrease in total cash and cash equivalents, and smaller decreases in several other categories. The increase in total assets was funded primarily by an increase in total deposits.

Loans

Net loans receivable increased $53.89 million, or 5%, to $1.09 billion at June 30, 2022 from $1.03 billion at March 31, 2022. This increase was primarily due to a $16.19 million increase in multi-family loans, a $14.18 million increase in commercial business loans (non-PPP), a $10.76 million increase in one- to four-family loans, an $8.69 million increase in commercial real estate loans, a $7.75 million increase in construction loans and smaller increases in several other loan categories. These increases to net loans receivable were partially offset by a $4.61 million decrease in SBA PPP loans and smaller decreases in several other loan categories.

Loan Portfolio
($ in thousands)

 June 30, 2022 March 31, 2022 June 30, 2021
 Amount Percent Amount Percent Amount Percent
Mortgage loans:           
One- to four-family (a)$144,682  12% $133,925  12% $119,173  11%
Multi-family 98,718  8   82,526  7   94,756  9 
Commercial 532,167  44   523,479  45   458,889  41 
Construction - custom and owner/builder 117,724  10   114,394 10   105,484  9 
Construction - speculative one-to four-family 13,954  1   15,438  1   18,038  2 
Construction - commercial 40,108  3   35,416  3   43,879  4 
Construction - multi-family 54,804  5   64,141  6   45,624  4 
Construction - land development 21,240  2   10,687  1   4,434  -- 
Land 24,490  2   22,192  2   18,289  2 
Total mortgage loans 1,047,887  87   1,002,198  87   908,566  82 
            
Consumer loans:           
Home equity and second mortgage 32,821  3   32,980  3   31,891  3 
Other 2,545  --   2,277  --   2,725  -- 
Total consumer loans 35,366  3   35,257  3   34,616  3 
            
Commercial loans:           
Commercial business loans 122,822  10   108,644  9   72,890  6 
SBA PPP loans 1,320  --   5,934  1   95,633  9 
Total commercial loans 124,142  10   114,578  10   168,523  15 
Total loans 1,207,395  100%  1,152,033  100%  1,111,705  100%
Less:           
Undisbursed portion of construction loans in process (102,044)    (100,719)    (90,332)  
Deferred loan origination fees (3,951)    (3,801)    (6,339)  
Allowance for loan losses (13,433)    (13,433)    (13,469)  
Total loans receivable, net$1,087,967    $1,034,080    $1,001,565   

_______________________
(a)   Does not include one- to four-family loans held for sale totaling $700, $2,772 and $3,359 at June 30, 2022, March 31, 2022, and June 30, 2021, respectively.  

The following table provides a breakdown of commercial real estate (“CRE”) mortgage loans by collateral type as of June 30, 2022:


CRE Loan Portfolio Breakdown by Collateral
($ in thousands)





Collateral Type
 



Amount
 Percent of CRE Portfolio Percent of Total Loan Portfolio
Industrial warehouse $105,060 19% 9%
Medical/dental offices  71,874 14  6 
Office buildings  70,931 13  6 
Other retail buildings  45,894 9  4 
Restaurants  30,718 6  2 
Hotel/motel  25,915 5  2 
Mini-storage  24,846 5  2 
Convenience stores  21,844 4  2 
Nursing homes  18,504 3  1 
Mobile home parks  14,209 3  1 
Shopping centers  10,596 2  1 
Churches  8,097 1  1 
Additional CRE  83,679 16  7 
Total CRE $532,167 100% 44%

Timberland originated $128.90 million in loans during the quarter ended June 30, 2022, compared to $130.41 million for the preceding quarter and $146.60 million for the comparable quarter one year ago. Timberland continues to sell fixed-rate one- to four-family mortgage loans into the secondary market for asset-liability management purposes and to generate non-interest income. Timberland also periodically sells the guaranteed portion of SBA loans. During the current quarter, fixed-rate one- to four-family mortgage loans totaling $11.61 million were sold compared to $16.88 million for the preceding quarter and $41.06 million for the comparable quarter one year ago. The decrease in loans sold during the current quarter compared to the prior year was primarily due to a decrease in single-family refinance loans originated as mortgage refinance activity diminished.
        
Timberland’s investment securities and CDs held for investment increased $28.55 million, or 11%, to $298.10 million at June 30, 2022, from $269.55 million at March 31, 2022. The increase was primarily due to the purchase of additional U.S Treasury securities and mortgage-backed investment securities.

Timberland’s liquidity continues to remain strong. Liquidity, as measured by the sum of cash and cash equivalents, CDs held for investment, and available for sale investment securities, was 29.4% of total liabilities at June 30, 2022, compared to 34.3% at March 31, 2022, and 39.2% one year ago.  

Deposits

Total deposits increased $7.69 million during the current quarter to $1.664 billion at June 30, 2022, from $1.656 billion at March 31, 2022. The quarter’s increase consisted of a $16.34 million increase in NOW checking account balances and a $2.39 million increase in non-interest account balances. These increases were partially offset by an $8.77 million decrease in savings account balances, a $1.07 million decrease in money market account balances and a $1.20 million decrease in certificates of deposit account balances.

Deposit Breakdown
($ in thousands)
 
  June 30, 2022  March 31, 2022 June 30, 2021  
  Amount Percent Amount Percent Amount Percent 
Non-interest-bearing demand $527,876    32% $525,488    32% $495,938    33% 
NOW checking 474,217 29  457,874 28  429,950 28  
Savings 279,592 17  288,361 18  255,103 17  
Money market 251,451 15  251,631 15  189,443 12  
Money market – reciprocal 5,533 --  6,426 --  12,253  
Certificates of deposit under $250 102,752  106,208  115,782  
Certificates of deposit $250 and over 22,693  20,438  24,183  
    Total deposits $1,664,114 100% $1,656,426
  100% $1,522,652 100% 

 

Shareholders’ Equity and Capital Ratios

Total shareholders’ equity increased $2.05 million, or 1%, to $214.32 million at June 30, 2022, from $212.27 million at March 31, 2022. The increase in shareholders’ equity was primarily due to net income of $5.74 million for the quarter, which was partially offset by the payment of $1.83 million in dividends to shareholders, the repurchase of 58,678 shares of common stock for $1.50 million (an average price of $25.60 per share), and a $458,000 increase in the Company’s accumulated other comprehensive loss.   Timberland had 263,491 shares available to be repurchased in accordance with the terms of its existing stock repurchase plan at June 30, 2022.

Timberland remains well capitalized with a total risk-based capital ratio of 19.82%, a Tier 1 leverage capital ratio of 10.72%, and a tangible common equity to tangible assets ratio (non-GAAP) of 10.59% at June 30, 2022.

Asset Quality

Timberland’s non-performing assets to total assets ratio improved to 0.13% at June 30, 2022, from 0.16% at March 31, 2022 and 0.14% one year ago. There were no net charge-offs for the current quarter compared to net charge-offs of $35,000 for the preceding quarter and net recoveries of $35,000 for the comparable quarter one year ago. No provisions for loan losses were made during the quarters ended June 30, 2022, March 31, 2022, and June 30, 2021.

The allowance for loan losses (“ALL”) as a percentage of loans receivable was 1.22% at June 30, 2022, compared to 1.28% at March 31, 2022 and 1.33% 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 $295,000 at June 30, 2022. 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 1.25% (non-GAAP) at June 30, 2022.

The following table details the ALL as a percentage of loans receivable:

  June 30, March 31, June 30,
  2022 2022 2021 
ALL to loans receivable 1.22% 1.28% 1.33% 
ALL to loans receivable (excluding SBA PPP loans) (non-GAAP) 1.22% 1.29% 1.46% 
ALL to loans receivable (excluding SBA PPP loans and South Sound
Acquisition loans) (non-GAAP)
 1.25% 1.33% 1.53% 

Total delinquent loans (past due 30 days or more) and non-accrual loans decreased $414,000, or 14%, to $2.53 million at June 30, 2022, from $2.95 million at March 31, 2022, and decreased $410,000, or 14%, from $2.94 million one year ago. Non-accrual loans decreased $360,000, or 14%, to $2.29 million at June 30, 2022, from $2.65 million at March 31, 2022 and increased $262,000, or 13%, from $2.03 million one year ago.



Non-Accrual Loans
($ in thousands)

 June 30, 2022 March 31, 2022 June 30, 2021
 Amount Quantity Amount Quantity Amount Quantity
Mortgage loans:           
One- to four-family$393 2 $578 3 $411 2
Commercial 671 2  671 3  373 1
Land 651 3  723 4  169 2
Total mortgage loans 1,715 7  1,972 10  953 5
            
Consumer loans           
Home equity and second mortgage 260 2  269 2  545 6
Other 4 1  5 1  18 2
Total consumer loans 264 3  274 3  563 8
            
Commercial business loans 312 6  405 6  513 7
Total loans$2,291 16 $2,651 19 $2,029 20

        


At June 30, 2022, the OREO and other repossessed asset portfolio consisted of two individual land parcels that have been written down to a book value of $0. OREO and other repossessed assets were $157,000 at March 31, 2022 and June 30, 2021.      One OREO property was sold during the quarter ended June 30, 2022.

OREO and Other Repossessed Assets
($ in thousands)

 June 30, 2022 March 31, 2022 June 30, 2021
 Amount Quantity Amount Quantity Amount Quantity
Land$-- 2 $157 3 $157 3
Total$-- 2 $157 3 $157 3

        
Acquisition of South Sound Bank
On 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 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, plan, 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: the effect of the novel coronavirus of 2019 (“COVID-19”) pandemic, including the Company’s credit quality and business operations, as well as its impact on general economic and financial market conditions and other uncertainties resulting from the COVID-19 pandemic, such as the extent and duration of the impact on public health, the U.S. and global economies, and consumer and corporate customers, including economic activity, employment levels and market liquidity; the 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 assets in our loan portfolio, and 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 potential 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 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 regulatory policies and principles, or the interpretation of regulatory capital or other rules including as a result of Basel III; the impact of the Dodd Frank Wall Street Reform and Consumer Protection Act and implementing regulations; 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 risk associated with the loans on 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 and stock; adverse changes in the securities markets; 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 war or any terrorist activities; other economic, competitive, governmental, regulatory, and technological factors affecting our operations; pricing, products and services including the Coronavirus Aid, Relief, and Economic Security Act of 2020 (“CARES Act”), the Consolidated Appropriations Act, 2021 (“CAA”), and the American Rescue Plan Act of 2021; and other risks detailed in our reports filed with 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 report 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 2022 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.

Contact: Michael R. Sand, CEO
Dean J. Brydon, President & CFO                      
(360) 533-4747
www.timberlandbank.com



TIMBERLAND BANCORP INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
 Three Months Ended
($ in thousands, except per share amounts) (unaudited) June 30, March 31, June 30,
   2022   2022  2021 
 Interest and dividend income      
 Loans receivable $12,628  $12,620 $13,298 
 Investment securities  1,016   590  292 
 Dividends from mutual funds, FHLB stock and other investments  25   27  28 
 Interest bearing deposits in banks  958   283  247 
  Total interest and dividend income  14,627   13,520  13,865 
        
 Interest expense      
 Deposits  645   625  690 
 Borrowings  --   2  18 
  Total interest expense  645   627  708 
  Net interest income  13,982   12,893  13,157 
 Provision for loan losses  --   --  -- 
  Net interest income after provision for loan losses  13,982   12,893  13,157 
        
 Non-interest income      
 Service charges on deposits  1,052   1,014  948 
 ATM and debit card interchange transaction fees  1,345   1,247  1,363 
 Gain on sales of loans, net  258   416  1,607 
 Bank owned life insurance (“BOLI”) net earnings  151   152  150 
 Valuation allowance on loan servicing rights, net  --   --  (179) 
 Recoveries on investment securities, net  5   3  6 
 Other  291   251  371 
  Total non-interest income, net  3,102   3,083  4,266 
        
 Non-interest expense      
 Salaries and employee benefits  5,243   5,192  4,554 
 Premises and equipment  898   988  995 
 Advertising  187   161  162 
 OREO and other repossessed assets, net  (2)   2  5 
 ATM and debit card processing  515   450  464 
 Postage and courier  140   164  141 
 State and local taxes  265   235  284 
 Professional fees  580   322  262 
 FDIC insurance expense  123   126  100 
 Loan administration and foreclosure  180   96  148 
 Data processing and telecommunications  698   669  627 
 Deposit operations  316   262  289 
 Amortization of core deposit intangible (“CDI”)  79   79  90 
 Other, net  652   587  492 
  Total non-interest expense, net  9,874   9,333  8,613 
        
 Income before income taxes  7,210   6,643  8,810 
 Provision for income taxes  1,472   1,316  1,786 
  Net income $5,738  $5,327 $7,024 
        
 Net income per common share:      
 Basic $0.69  $0.64 $0.84 
 Diluted  0.69   0.63  0.83 
        
 Weighted average common shares outstanding:      
 Basic  8,279,436   8,337,407  8,365,350 
 Diluted  8,349,859   8,421,875  8,465,393
 



TIMBERLAND BANCORP INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
 Nine Months Ended
($ in thousands, except per share amounts) (unaudited) June 30,   June 30,
   2022     2021 
 Interest and dividend income      
 Loans receivable $37,870    $39,406 
 Investment securities  2,012     877 
 Dividends from mutual funds, FHLB stock and other investments  80     83 
 Interest bearing deposits in banks  1,528     816 
  Total interest and dividend income  41,490     41,182 
        
 Interest expense      
 Deposits  1,902     2,358 
 Borrowings  17     76 
  Total interest expense  1,919     2,434 
  Net interest income  39,571     38,748 
 Provision for loan losses  --     -- 
  Net interest income after provision for loan losses  39,571     38,748 
        
 Non-interest income      
 Service charges on deposits  2,979     2,943 
 ATM and debit card interchange transaction fees  3,868     3,755 
 Gain on sales of loans, net  1,337     5,367 
 BOLI net earnings  457     445 
 Valuation recovery on loan servicing rights, net  119     23 
 Recoveries on investment securities, net  16     14 
 Other  851     1,164 
  Total non-interest income, net  9,627     13,711 
        
 Non-interest expense      
 Salaries and employee benefits  15,606     13,944 
 Premises and equipment  2,814     2,949 
 Advertising  513     472 
 OREO and other repossessed assets, net  (18)     (89) 
 ATM and debit card processing  1,429     1,341 
 Postage and courier  440     428 
 State and local taxes  754     822 
 Professional fees  1,173     675 
 FDIC insurance expense  377     301 
 Loan administration and foreclosure  380     319 
 Data processing and telecommunications  1,980     1,868 
 Deposit operations  878     818 
 Amortization of CDI  237     271 
 Other, net  1,909     1,455 
  Total non-interest expense, net  28,472     25,574 
        
 Income before income taxes  20,726     26,885 
 Provision for income taxes  4,176     5,320 
  Net income $16,550    $21,565 
        
 Net income per common share:      
 Basic $1.99    $2.59 
 Diluted  1.97     2.55 
        
 Weighted average common shares outstanding:      
 Basic  8,324,371     8,336,590 
 Diluted  8,406,977     8,440,861
 



TIMBERLAND BANCORP INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
 
($ in thousands, except per share amounts) (unaudited) June 30, March 31, June 30,
   2022   2022   2021 
Assets      
Cash and due from financial institutions $23,610  $26,500  $25,387 
Interest-bearing deposits in banks  398,541   465,802   478,339 
 Total cash and cash equivalents  422,151   492,302   503,726 
        
Certificates of deposit (“CDs”) held for investment, at cost  23,888   28,619   31,218 
Investment securities:      
 Held to maturity, at amortized cost  228,196   189,405   52,314 
 Available for sale, at fair value  45,141   50,624   67,491 
Investments in equity securities, at fair value  872   902   960 
FHLB stock  2,194   2,194   2,103 
Other investments, at cost  3,000   3,000   3,000 
Loans held for sale  700   2,772   3,359 
       
Loans receivable  1,101,400   1,047,513   1,015,034 
Less: Allowance for loan losses  (13,433)   (13,433)   (13,469) 
 Net loans receivable  1,087,967   1,034,080   1,001,565 
        
Premises and equipment, net  22,154   21,878   22,519 
OREO and other repossessed assets, net  --   157   157 
BOLI  22,649   22,498   22,041 
Accrued interest receivable  4,319   3,927   4,260 
Goodwill  15,131   15,131   15,131 
CDI  1,027   1,106   1,354 
Loan servicing rights, net  3,220   3,390   3,548 
Operating lease right-of-use assets  2,051   2,129   2,360 
Other assets  3,135   3,356   3,354 
 Total assets $1,887,795  $1,877,470  $1,740,460 
        
Liabilities and shareholders’ equity      
Deposits: Non-interest-bearing demand $527,876  $525,488  $495,938 
Deposits: Interest-bearing  1,136,238   1,130,938   1,026,714 
 Total deposits  1,664,114   1,656,426   1,522,652 
        
Operating lease liabilities  2,135   2,210   2,432 
FHLB borrowings  --   --   5,000 
Other liabilities and accrued expenses  7,227   6,565   6,884 
 Total liabilities  1,673,476   1,665,201   1,536,968 
       
Shareholders’ equity      
Common stock, $.01 par value; 50,000,000 shares authorized;
         8,249,448 shares issued and outstanding – June 30, 2022
         8,305,826 shares issued and outstanding – March 31, 2022
         8,353,969 shares issued and outstanding – June 30, 2021                    
  
39,585
   40,988   





42,624
 
Retained earnings  175,299   171,388   160,739 
Accumulated other comprehensive income (loss)  (565)   (107)   129 
 Total shareholders’ equity  214,319   212,269   203,492 
 Total liabilities and shareholders’ equity $1,887,795  $1,877,470  $1,740,460 




KEY FINANCIAL RATIOS AND DATA
Three Months Ended
($ in thousands, except per share amounts) (unaudited) June 30, March 31, June 30,
   2022   2022   2021 
PERFORMANCE RATIOS:      
Return on average assets (a)  1.22%   1.16%   1.63% 
Return on average equity (a)  10.80%   10.10%   14.02% 
Net interest margin (a)  3.11%   2.95%   3.22% 
Efficiency ratio  57.80%   58.42%   49.43% 
       
 Nine Months Ended
  June 30,   June 30,
   2022     2021 
PERFORMANCE RATIOS:      
Return on average assets (a)  1.19%     1.74% 
Return on average equity (a)  10.48%     14.76% 
Net interest margin (a)  2.99%     3.30% 
Efficiency ratio  57.87%
     48.75% 
 Three Months Ended
  June 30, March 31, June 30,
ASSET QUALITY RATIOS AND DATA:  2022   2022   2021 
Non-accrual loans $2,291  $2,651  $2,029 
Loans past due 90 days and still accruing  --   --   -- 
Non-performing investment securities  114   127   179 
OREO and other repossessed assets  --   157   157 
Total non-performing assets (b) $2,405  $2,935  $2,365 
       
Non-performing assets to total assets (b)  0.13%   0.16%   0.14% 
Net charge-offs (recoveries) during quarter $--  $35  $(35)
ALL to non-accrual loans,  586%   507%   664% 
ALL to loans receivable (c)  1.22%   1.28%   1.33% 
ALL to loans receivable (excluding SBA PPP loans) (d) (non-GAAP)  1.22%   1.29%   1.46% 
ALL to loans receivable (excluding SBA PPP loans and South Sound Acquisition loans) (d) (e) (non-GAAP)  1.25%   

1.33%
   

1.53%
 
Troubled debt restructured loans on accrual status (f) $2,484  $2,496  $2,380 
       
CAPITAL RATIOS:      
Tier 1 leverage capital  10.72%   10.86%   11.03% 
Tier 1 risk-based capital  18.57%   19.50%   21.34% 
Common equity Tier 1 risk-based capital  18.57%   19.50%   21.34% 
Total risk-based capital  19.82%   20.75%   22.60% 
Tangible common equity to tangible assets (non-GAAP)  10.59%   10.53%   10.85% 
       
BOOK VALUES:      
Book value per common share $25.98  $25.56  $24.36 
Tangible book value per common share (g)  24.02   23.60   22.39 

________________________________________________

(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 $1,320, $5,934 and $95,633 at June 30, 2022, March 31, 2022 and June 30, 2021, respectively.
(e) Does not include loans acquired in the South Sound Acquisition totaling $21,431, $28,549 and $40,622 at June 30, 2022, March 31, 2022 and June 30, 2021, respectively.
(f) Does not include troubled debt restructured loans totaling $158, $172 and $187 reported as non-accrual loans at June 30, 2022, March 31, 2022 and June 30, 2021, 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
 June 30, 2022March 31, 2022June 30, 2021
 Amount Rate Amount Rate Amount Rate
            
Assets           
Loans receivable and loans held for sale$1,072,933  4.71%  $1,029,582  4.90%  $1,032,591  5.15% 
Investment securities and FHLB stock (1) 263,595  1.58   209,868  1.18   115,839  1.10 
Interest-earning deposits in banks and CDs 460,657  0.83   510,211  0.22   487,508  0.20 
Total interest-earning assets 1,797,185  3.26   1,749,661  3.09   1,635,938  3.39 
Other assets 85,470     84,252     87,638   
Total assets$1,882,655    $1,833,913    $1,723,576   
            
Liabilities and Shareholders’ Equity           
NOW checking accounts$462,085  0.14%  $441,259  0.13%  $416,234  0.13% 
Money market accounts 258,240  0.30   244,250  0.29   196,187  0.29 
Savings accounts 284,659  0.08   277,888  0.08   253,147  0.08 
Certificates of deposit accounts 125,132  0.75   128,588  0.80   141,301  1.02 
Total interest-bearing deposits 1,130,116  0.23   1,091,985  0.23   1,006,869  0.27 
Borrowings --  --   677  1.18   5,769  1.25 
Total interest-bearing liabilities 1,130,116  0.23   1,092,662  0.23   1,012,638  0.28 
            
Non-interest-bearing demand deposits 529,770     521,284     499,383   
Other liabilities 10,170     9,072     11,217   
Shareholders’ equity 212,599     210,895     200,338   
Total liabilities and shareholders’ equity$1,882,655    $1,833,913    $1,723,576   
            
Interest rate spread  3.03%    2.86%    3.11% 
Net interest margin (2)  3.11%    2.95%    3.22% 
Average interest-earning assets to average interest-bearing liabilities 159.03%     160.13%     161.55%   

           _____________________________________
(1) Includes other investments
(2) Net interest margin = annualized net interest income /
      average interest-earning assets
        


AVERAGE BALANCES, YIELDS, AND RATES
($ in thousands)
(unaudited)

 For the Nine Months Ended
 June 30, 2022  June 30, 2021
 Amount Rate     Amount Rate
            
Assets           
Loans receivable and loans held for sale$1,033,173  4.89%     $1,035,733  5.07%
Investment securities and FHLB stock (1) 211,671  1.32       103,821  1.23 
Interest-earning deposits in banks and CDs 517,323  0.39       427,881  0.25 
Total interest-earning assets 1,762,167  3.14       1,567,435  3.50 
Other assets 84,426         85,636   
Total assets$1,846,593        $1,653,071   
            
Liabilities and Shareholders’ Equity           
NOW checking accounts$448,028  0.13%     $396,140  0.16%
Money market accounts 241,734  0.29       181,115  0.30 
Savings accounts 275,684  0.08       237,456  0.08 
Certificates of deposit accounts 128,784  0.79       147,530  1.20 
Total interest-bearing deposits 1,094,230  0.23       962,241  0.33 
Borrowings 1,909  1.19       8,592  1.17 
Total interest-bearing liabilities 1,096,139  0.23       970,833  0.34 
            
Non-interest-bearing demand deposits 530,038         476,628   
Other liabilities 9,938         10,757   
Shareholders’ equity 210,478         194,853   
Total liabilities and shareholders’ equity$1,846,593        $1,653,071   
            
Interest rate spread  2.91%       3.16%
Net interest margin (2)  2.99%       3.30%
Average interest-earning assets to average interest-bearing liabilities 160.76%        161.45%  

_____________________________________
(1) Includes other investments
(2) Net interest margin = annualized net interest income / average interest-earning assets



Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles (“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) June 30, 2022 March 31, 2022 June 30, 2021
       
Shareholders’ equity $214,319  $212,269  $203,492 
Less goodwill and CDI  (16,158)   (16,237)   (16,485) 
Tangible common equity $198,161  $196,032  $187,007 
       
Total assets $1,887,795  $1,877,470  $1,740,460 
Less goodwill and CDI  (16,158)   (16,237)   (16,485) 
Tangible assets $1,871,637  $1,861,233  $1,723,975 

FAQ

What are Timberland Bancorp's Q3 2022 earnings results?

Timberland Bancorp reported a net income of $5.74 million for Q3 2022.

How did Timberland Bancorp's net interest margin change in Q3 2022?

The net interest margin increased to 3.11% in Q3 2022, up from 2.95% in the previous quarter.

What is the dividend payout date for Timberland Bancorp?

The quarterly cash dividend of $0.22 is payable on August 26, 2022.

How much did Timberland Bancorp's loan portfolio increase in Q3 2022?

Excluding PPP loans, Timberland Bancorp's loan portfolio increased by 5.7% during Q3 2022.

Timberland Bancorp Inc

NASDAQ:TSBK

TSBK Rankings

TSBK Latest News

TSBK Stock Data

230.33M
7.97M
9.55%
64.61%
0.42%
Banks - Regional
Savings Institutions, Not Federally Chartered
Link
United States of America
HOQUIAM