Timberland Bancorp, Inc. (NASDAQ: TSBK) (“Timberland” or “the
Company”), the holding company for Timberland Bank (the “Bank”),
today reported net income of $5.33 million, or $0.63 per diluted
common share, for the quarter ended March 31, 2022. This compares
to net income of $5.49 million, or $0.65 per diluted common share,
for the preceding quarter and $7.25 million, or $0.86 per diluted
common share, for the comparable quarter one year ago.
For the first six months of fiscal 2022, Timberland earned
$10.81 million, or $1.28 per diluted common share, compared to
$14.54 million or $1.73 per diluted common share for the first six
months of fiscal 2021.
Timberland’s Board of Directors declared a quarterly cash
dividend to shareholders of $0.22 per share, payable on May 27,
2022, to shareholders of record on May 13, 2022.
“We are pleased to report strong growth during the past
quarter,” stated Michael Sand, CEO. “Net loans receivable,
excluding Paycheck Protection Program loans (“PPP”), increased 5.7%
(22.8% annualized) primarily due to increases in commercial real
estate and commercial business loans originated within our western
Washington market footprint. We continue to see opportunities
for loan originations within our local markets and are pleased to
observe reduced prepayment activity which has allowed loan
originations to be more additive to net loans receivable.”
“In addition to using excess liquidity to fund loan growth, we
also deployed funds into short and moderate duration investments to
supplement interest income,” said Sand. “The Bank continues
to be positioned to benefit from Federal Reserve actions to
increase interest rates and we anticipate continued opportunities
to invest excess liquidity during the next several quarters as the
Fed begins reducing its balance sheet in conjunction with
anticipated rate increases.”
Second Fiscal Quarter 2022 Earnings and Balance Sheet
Highlights (at or for the period ended March 31, 2022,
compared to March 31, 2021, or December 31, 2021):
Earnings Highlights:
- Net income was $5.33 million for the current quarter compared
to $5.49 million for the preceding quarter and $7.25 million for
the comparable quarter one year ago; EPS was $0.63 for the current
quarter compared to $0.65 for the preceding quarter and $0.86 for
the comparable quarter one year ago;
- Net income was $10.81 million for the first six months of
fiscal 2022 compared to $14.54 million for the first six months of
fiscal 2021; EPS was $1.28 for the first six months of fiscal 2022
compared to $1.73 for the first six months of fiscal 2021;
- Return on average equity (“ROE”) and return on average assets
(“ROA”) for the current quarter were 10.10% and 1.16%,
respectively;
- Net interest margin (“NIM”) was 2.95% for the current quarter
compared to 2.92% for the preceding quarter and 3.21% for the
comparable quarter one year ago; and
- The efficiency ratio was 58.42% for the current quarter
compared to 57.40% for the preceding quarter and 48.99% for the
comparable quarter one year ago.
Balance Sheet Highlights:
- Total assets increased 10% year-over-year and 3% from the prior
quarter;
- Total deposits increased 12% year-over-year and 3% from the
prior quarter;
- Net loans receivable (excluding SBA PPP loans) increased 15%
year-over-year and 6% from the prior quarter;
- Net loans receivable (including SBA PPP loans) increased 4%
from the prior quarter;
- Non-performing assets to total assets ratio improved to 0.16%
from 0.17% at December 31, 2021; and
- Book and tangible book (non-GAAP) values per common share
increased to $25.56 and $23.60, respectively, at March 31,
2022.
Operating Results
Operating revenue (net interest income before the
provision for loan losses plus non-interest income) decreased 1% to
$15.98 million for the first fiscal quarter from $16.14 million for
the preceding quarter and decreased 8% from $17.45 million for the
comparable quarter one year ago. The decrease in operating revenue
compared to the preceding quarter was primarily due to a $259,000
decrease in PPP loan income and a $247,000 decrease in gain on
sales of loans. Operating revenue decreased 8% to $32.11 million
for the first six months of fiscal 2022 from $35.04 million for the
comparable period one year ago, primarily due to a $2.68 million
decrease in gain on sales of loans and a $1.15 million decrease in
PPP loan income.
Net interest income increased 2% to $12.89 million
for the current quarter from $12.70 million for the preceding
quarter and increased 3% from $12.57 million for the comparable
quarter one year ago. Timberland’s NIM
for the current quarter was 2.95% compared to 2.92% for the
preceding quarter and 3.21% for the comparable quarter one year
ago. The NIM for the current 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 preceding quarter was increased by approximately four basis
points due to the accretion of $57,000 of the fair value discount
on loans acquired in the South Sound Acquisition and the collection
of $114,000 in pre-payment penalties, non-accrual interest and late
fees. The NIM for the comparable quarter one year ago was increased
by approximately six basis points due to the accretion of $86,000
of the fair value discount on loans acquired in the South Sound
Acquisition and the collection of $129,000 in pre-payment
penalties, non-accrual interest and late fees. Net interest income
was $25.59 million for both the first six months of fiscal 2022 and
fiscal 2021. Timberland’s net interest margin for the first six
months of fiscal 2022 was 2.93% compared to 3.34% for the first six
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 March 31, 2022, Timberland had SBA PPP
deferred loan origination fees of $199,000 remaining to be accreted
into interest income over the remaining life of the loans. The
following table details the interest income recognized from SBA PPP
loans:
SBA PPP Loan Income($ in thousands) Three Months
Ended |
|
March 31, 2022 |
|
Dec. 31, 2021 |
|
March 31, 2021 |
Interest income |
$ |
31 |
|
$ |
71 |
|
$ |
306 |
Loan origination fee accretion |
|
708 |
|
|
927 |
|
|
1,143 |
Total SBA PPP loan income |
$ |
739 |
|
$ |
998 |
|
$ |
1,449 |
|
|
|
|
|
|
No provision for loan losses was made during the
quarters ended March 31, 2022, December 31, 2021, and March 31,
2021.
Non-interest income decreased 10% to $3.08 million
for the current quarter from $3.44 million for the preceding
quarter and decreased 37% from $4.89 million for the comparable
quarter one year ago. The decrease in non-interest income compared
to the preceding quarter was primarily due to a $247,000 decrease
in gain on sales of loans, a $119,000 decrease in the valuation
recovery on loan servicing rights, and smaller decreases in several
other categories. These decreases were
partially offset by a $101,000 increase in service charges on
deposits. The year-over-year decrease in non-interest income was
primarily due to a $1.34 million decrease in gain on sales of loans
and a $438,000 decrease in the valuation recovery on loan servicing
rights. The decrease in gain on sales of loans was primarily due to
a decrease in the dollar amount of fixed-rate one- to four-family
loans originated and sold during the current quarter (as refinance
demand slowed) and a decrease in the average pricing margin
compared to the same period last year. Fiscal year-to-date
non-interest income decreased 31% to $6.53 million from $9.45
million for the first six months of fiscal 2021, primarily due to a
$2.68 million decrease in gain on sales of loans.
Total operating expenses for the current quarter
increased $69,000, or 1%, to $9.33 million from $9.26 million for
the preceding quarter and increased $782,000, or 9%, from $8.55
million for the comparable quarter one year
ago. The increase in operating
expenses compared to the preceding quarter was primarily due to a
$73,000 increase in professional fee expense and smaller increases
in several other expense categories. These increases were partially
offset by smaller decreases in several expense
categories. Fiscal year-to-date operating expenses increased
10% to $18.60 million from $16.96 million for the first six months
of fiscal 2021. The year-to-date increase in operating expenses 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 58.42% compared to 57.40% for the
preceding quarter and 48.99% for the comparable quarter one year
ago. The efficiency ratio for the first six months of fiscal 2022
was 57.91% compared to 48.41% for the first six months of fiscal
2022.
The provision for income taxes for the current quarter decreased
$73,000 to $1.32 million from $1.39 million for the preceding
quarter, primarily due to lower taxable income. Timberland’s
effective income tax rate was 19.8% for the quarter ended March 31,
2022 compared to 20.2% for the quarter ended December 31, 2021 and
18.6% for the quarter ended quarter ended March 31, 2021.
Timberland’s effective income tax rate was 20.0% for the first six
months of fiscal 2022 compared to 19.6% for the first six months of
fiscal 2021.
Balance Sheet Management
Total assets increased $46.20 million, or 3%, to $1.88 billion
at March 31, 2022 from $1.83 billion at December 31, 2021. The
quarter’s increase was primarily due to a $72.80 million increase
in investment securities and CDs held for investment, a $40.07
million increase in net loans receivable, and smaller increases in
several other categories. These increases were partially offset by
a $66.02 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 $40.07 million, or 4%, to $1.03
billion at March 31, 2022 from $994.01 million at December 31,
2021. This increase was primarily due to a $26.12 million increase
in commercial real estate loans, a $23.64 million increase in
commercial business loans (non-PPP), a $5.29 million decrease in
the undisbursed portion of construction loans in process, a $4.77
million increase in one- to four-family loans and smaller increases
in other loan categories. These increases to net loans receivable
were partially offset by a $15.46 million decrease in SBA PPP
loans, a $5.45 million decrease in construction loans, and smaller
decreases in several other loan categories.
Loan Portfolio($ in
thousands)
|
March 31, 2022 |
|
December 31, 2021 |
|
March 31, 2021 |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
Mortgage loans: |
|
|
|
|
|
|
|
|
|
|
|
One- to four-family (a) |
$ |
133,925 |
|
|
12 |
% |
|
$ |
129,151 |
|
|
12 |
% |
|
$ |
117,184 |
|
|
10 |
% |
Multi-family |
|
82,526 |
|
|
7 |
|
|
|
84,180 |
|
|
7 |
|
|
|
92,435 |
|
|
8 |
|
Commercial |
|
523,479 |
|
|
45 |
|
|
|
497,361 |
|
|
44 |
|
|
|
461,966 |
|
|
40 |
|
Construction - custom and |
|
|
|
|
|
|
|
|
|
|
|
owner/builder |
|
114,394 |
|
|
10 |
|
|
|
116,267 |
|
|
|
10 |
|
|
|
105,305 |
|
|
9 |
|
Construction - speculative one-to
four-family |
|
15,438 |
|
|
1 |
|
|
|
18,255 |
|
|
2 |
|
|
|
17,289 |
|
|
2 |
|
Construction - commercial |
|
35,416 |
|
|
3 |
|
|
|
42,611 |
|
|
4 |
|
|
|
42,340 |
|
|
4 |
|
Construction - multi-family |
|
64,141 |
|
|
6 |
|
|
|
54,710 |
|
|
5 |
|
|
|
44,266 |
|
|
4 |
|
Construction - land |
|
|
|
|
|
|
|
|
|
|
|
development |
|
10,687 |
|
|
1 |
|
|
|
13,680 |
|
|
1 |
|
|
|
2,238 |
|
|
-- |
|
Land |
|
22,192 |
|
|
2 |
|
|
|
18,568 |
|
|
2 |
|
|
|
19,041 |
|
|
2 |
|
Total mortgage loans |
|
1,002,198 |
|
|
87 |
|
|
|
974,783 |
|
|
87 |
|
|
|
902,064 |
|
|
79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer loans: |
|
|
|
|
|
|
|
|
|
|
|
Home equity and second |
|
|
|
|
|
|
|
|
|
|
|
mortgage |
|
32,980 |
|
|
3 |
|
|
|
34,375 |
|
|
3 |
|
|
|
32,026 |
|
|
3 |
|
Other |
|
2,277 |
|
|
-- |
|
|
|
2,462 |
|
|
-- |
|
|
|
2,756 |
|
|
-- |
|
Total consumer loans |
|
35,257 |
|
|
3 |
|
|
|
36,837 |
|
|
3 |
|
|
|
34,782 |
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans: |
|
|
|
|
|
|
|
|
|
|
|
Commercial business loans |
|
108,644 |
|
|
9 |
|
|
|
85,006 |
|
|
8 |
|
|
|
66,645 |
|
|
6 |
|
SBA PPP loans |
|
5,934 |
|
|
1 |
|
|
|
21,397 |
|
|
2 |
|
|
|
138,175 |
|
|
12 |
|
Total commercial loans |
|
114,578 |
|
|
10 |
|
|
|
106,403 |
|
|
10 |
|
|
|
204,820 |
|
|
18 |
|
Total loans |
|
1,152,033 |
|
|
100 |
% |
|
|
1,118,023 |
|
|
100 |
% |
|
|
1,141,666 |
|
|
100 |
% |
Less: |
|
|
|
|
|
|
|
|
|
|
|
Undisbursed portion of |
|
|
|
|
|
|
|
|
|
|
|
construction loans in |
|
|
|
|
|
|
|
|
|
|
|
process |
|
(100,719 |
) |
|
|
|
|
(106,009 |
) |
|
|
|
|
(90,550 |
) |
|
|
Deferred loan origination |
|
|
|
|
|
|
|
|
|
|
|
fees |
|
(3,801 |
) |
|
|
|
|
(4,539 |
) |
|
|
|
|
(6,999 |
) |
|
|
Allowance for loan losses |
|
(13,433 |
) |
|
|
|
|
(13,468 |
) |
|
|
|
|
(13,434 |
) |
|
|
Total loans receivable, net |
$ |
1,034,080 |
|
|
|
|
$ |
994,007 |
|
|
|
|
$ |
1,030,683 |
|
|
|
_______________________(a) Does not include
one- to four-family loans held for sale totaling $2,772, $3,700 and
$8,455 at March 31, 2022, December 31, 2021, and March 31, 2021,
respectively.
The following table provides a breakdown of commercial real
estate (“CRE”) mortgage loans by collateral type as of March 31,
2022:
CRE Loan Portfolio Breakdown by
Collateral
($ in thousands)
Collateral Type |
|
Amount |
|
Percentof CREPortfolio |
|
Percent ofTotal LoanPortfolio |
|
|
|
|
Industrial warehouse |
|
$ |
101,045 |
|
19 |
% |
|
9 |
% |
|
|
|
|
Office
buildings |
|
|
72,613 |
|
14 |
|
|
6 |
|
|
|
|
|
Medical/dental offices |
|
|
65,500 |
|
12 |
|
|
5 |
|
|
|
|
|
Other
retail buildings |
|
|
47,518 |
|
9 |
|
|
4 |
|
|
|
|
|
Restaurants |
|
|
29,532 |
|
6 |
|
|
3 |
|
|
|
|
|
Hotel/motel |
|
|
26,152 |
|
5 |
|
|
2 |
|
|
|
|
|
Mini-storage |
|
|
23,226 |
|
4 |
|
|
2 |
|
|
|
|
|
Convenience stores |
|
|
22,645 |
|
4 |
|
|
2 |
|
|
|
|
|
Nursing
homes |
|
|
18,591 |
|
4 |
|
|
2 |
|
|
|
|
|
Shopping
centers |
|
|
10,655 |
|
2 |
|
|
1 |
|
|
|
|
|
Churches |
|
|
8,173 |
|
2 |
|
|
1 |
|
|
|
|
|
Additional CRE |
|
|
97,829 |
|
19 |
|
|
8 |
|
|
|
|
|
Total CRE |
|
$ |
523,479 |
|
100 |
% |
|
45 |
% |
|
|
|
|
Timberland originated $130.41 million in loans during the
quarter ended March 31, 2022, compared to $167.15 million for the
comparable quarter one year ago and $178.84 million in loans for
the preceding quarter. 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 $16.88 million were sold
compared to $41.29 million for the comparable quarter one year ago
and $22.56 million for the preceding quarter. 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 $72.80
million, or 37%, to $269.55 million at March 31, 2022, from $196.75
million at December 31, 2021. The increase was primarily due to the
purchase of additional U.S Treasury securities, mortgage-backed
investment securities, and CDs held in other financial
institutions.
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 34.3%
of total liabilities at March 31, 2022, compared to 39.5% at
December 31, 2021, and 36.1% one year ago.
Deposits
Total deposits increased $49.80 million, or 3%, during the
current quarter to $1.66 billion at March 31, 2022, from $1.61
billion at December 31, 2021. The quarter’s increase consisted of a
$35.60 million increase in money market account balances, an $18.94
million increase in savings account balances, and a $1.97 million
increase in non-interest bearing account balances. These increases
were partially offset by a $5.51 million decrease in certificates
of deposit account balances and a $1.21 million decrease in NOW
checking account balances.
Deposit Breakdown($ in thousands) |
|
|
|
|
|
March 31, 2022 |
|
|
|
December 31, 2021 |
|
March 31, 2021 |
|
|
|
|
|
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
|
Non-interest-bearing demand |
|
$525,488 |
|
32 |
% |
|
$523,518 |
|
33 |
% |
|
$499,541 |
|
34 |
% |
|
|
NOW checking |
|
|
457,874 |
|
28 |
|
|
|
459,079 |
|
28 |
|
|
|
403,811 |
|
27 |
|
|
|
Savings |
|
|
288,361 |
|
18 |
|
|
|
269,423 |
|
17 |
|
|
|
250,736 |
|
17 |
|
|
|
Money market |
|
|
251,631 |
|
15 |
|
|
|
211,837 |
|
13 |
|
|
|
171,896 |
|
11 |
|
|
|
Money market – reciprocal |
|
|
6,426 |
|
-- |
|
|
|
10,619 |
|
1 |
|
|
|
13,094 |
|
1 |
|
|
|
Certificates of deposit under
$250 |
|
|
106,208 |
|
6 |
|
|
|
110,168 |
|
7 |
|
|
|
119,388 |
|
8 |
|
|
|
Certificates of deposit $250 and
over |
|
|
20,438 |
|
1 |
|
|
|
21,987 |
|
1 |
|
|
|
23,393 |
|
2 |
|
|
|
Total deposits |
|
$1,656,426 |
|
|
100 |
% |
|
$1,606,631 |
|
100 |
% |
|
|
$1,481,859 |
|
|
100 |
% |
|
Shareholders’ Equity and Capital
Ratios
Total shareholders’ equity increased $1.89 million, or 1%, to
$212.27 million at March 31, 2022, from $210.37 million at December
31, 2021. The increase in shareholders’ equity was primarily due to
net income of $5.33 million for the quarter, which was partially
offset by the payment of $1.84 million in dividends to shareholders
and the repurchase of 61,565 shares of common stock for $1.72
million (an average price of $27.88 per share).
Timberland had 322,169 shares available to be repurchased on its
existing stock repurchase plan at March 31, 2022.
Timberland remains well capitalized with a total
risk-based capital ratio of 20.75% and a Tier 1 leverage capital
ratio of 10.86% at March 31, 2022.
Asset Quality
Timberland’s non-performing assets to total assets
ratio was 0.16% at March 31, 2022, compared to 0.17% at December
31, 2021 and 0.16% one year ago. There were net charge-offs of
$35,000 for the current quarter compared to net charge-offs of
$1,000 for the preceding quarter and net recoveries of $2,000 for
the comparable quarter one year ago.
No provisions for loan losses were made during the quarters ended
March 31, 2022, December 31, 2021, and March 31, 2021.
Timberland has consistently worked with borrowers
affected by the COVID-19 pandemic by offering loan deferral and
forbearance plans during the pandemic.
Deferrals were primarily approved for 90-day periods with interest
continuing to accrue or with interest scheduled to be paid monthly.
All borrowers that were granted COVID-19 deferrals have resumed
making regular payments as of March 31, 2022.
The allowance for loan losses (“ALL”) as a
percentage of loans receivable was 1.28% at March 31, 2022,
compared to 1.29% one year ago and 1.34% at December 31, 2021. If
SBA PPP loans, which are 100% SBA guaranteed, are excluded, the ALL
to loans receivable (excluding SBA PPP loans) at March 31, 2022 was
1.29% (non-GAAP).
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 $358,000 at March
31, 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
1.33% (non-GAAP) at March 31, 2022.
The following table details the ALL as a percentage
of loans receivable:
|
|
March 31, |
|
Dec. 31, |
|
March 31, |
|
|
2022 |
|
2021 |
|
2021 |
ALL to loans receivable |
|
1.28 |
% |
|
1.34 |
% |
|
1.29 |
% |
ALL to loans receivable
(excluding SBA PPP loans) (non-GAAP) |
|
1.29 |
% |
|
1.37 |
% |
|
1.48 |
% |
ALL to loans receivable
(excluding SBA PPP loans and South Sound
Acquisition loans) (non-GAAP) |
|
1.33 |
% |
|
1.41 |
% |
|
1.56 |
% |
Total delinquent loans (past due 30 days or more)
and non-accrual loans decreased $290,000, or 9%, to $2.95 million
at March 31, 2022, from $3.24 million at December 31, 2021, and
decreased $982,000, or 25%, from $3.93 million one year ago.
Non-accrual loans decreased $202,000, or 7%, to $2.65 million at
March 31, 2022, from $2.85 million at December 31, 2021 and
increased $346,000, or 15%, from $2.31 million one year ago.
Non-Accrual Loans($ in
thousands)
|
March 31, 2022 |
|
December 31, 2021 |
|
March 31, 2021 |
|
Amount |
|
Quantity |
|
Amount |
|
Quantity |
|
Amount |
|
Quantity |
Mortgage loans: |
|
|
|
|
|
|
|
|
|
|
|
One- to four-family |
$578 |
|
3 |
|
$582 |
|
3 |
|
$415 |
|
2 |
Commercial |
|
671 |
|
3 |
|
|
675 |
|
2 |
|
|
643 |
|
2 |
Land |
|
723 |
|
4 |
|
|
676 |
|
3 |
|
|
173 |
|
2 |
Total mortgage loans |
|
1,972 |
|
10 |
|
|
1,933 |
|
8 |
|
|
1,231 |
|
6 |
|
|
|
|
|
|
|
|
|
|
|
|
Consumer loans |
|
|
|
|
|
|
|
|
|
|
|
Home equity and second |
|
|
|
|
|
|
|
|
|
|
|
mortgage |
|
269 |
|
2 |
|
|
456 |
|
4 |
|
|
539 |
|
6 |
Other |
|
5 |
|
1 |
|
|
5 |
|
1 |
|
|
8 |
|
1 |
Total consumer loans |
|
274 |
|
3 |
|
|
461 |
|
5 |
|
|
547 |
|
7 |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial business loans |
|
405 |
|
6 |
|
|
459 |
|
7 |
|
|
527 |
|
7 |
Total loans |
$2,651 |
|
19 |
|
$2,853 |
|
20 |
|
$2,305 |
|
20 |
OREO and other repossessed assets were $157,000 at
March 31, 2022, December 31, 2021 and March 31, 2021. At March 31,
2022, the OREO and other repossessed asset portfolio consisted of
three individual land parcels. No OREO properties were sold during
the quarter ended March 31, 2022.
OREO and Other Repossessed
Assets($ in thousands)
|
March 31, 2022 |
|
December 31, 2021 |
|
March 31, 2021 |
|
Amount |
|
Quantity |
|
Amount |
|
Quantity |
|
Amount |
|
Quantity |
Land |
$ |
157 |
|
3 |
|
$ |
157 |
|
3 |
|
$ |
157 |
|
3 |
Total |
$ |
157 |
|
3 |
|
$ |
157 |
|
3 |
|
$ |
157 |
|
3 |
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 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 24 branches (including its
main office in Hoquiam).
DisclaimerCertain 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.
TIMBERLAND
BANCORP INC. AND SUBSIDIARYCONSOLIDATED STATEMENTS
OF INCOME |
|
Three Months Ended |
($ in thousands,
except per share amounts) (unaudited) |
|
March 31, |
|
Dec. 31, |
|
March 31, |
|
|
2022 |
|
2021 |
|
2021 |
|
Interest and dividend income |
|
|
|
|
|
|
|
Loans receivable |
|
$ |
12,620 |
|
$ |
12,622 |
|
|
$ |
12,790 |
|
|
Investment securities |
|
|
590 |
|
|
405 |
|
|
|
284 |
|
|
Dividends from mutual funds, FHLB stock and other investments |
|
|
27 |
|
|
27 |
|
|
|
27 |
|
|
Interest
bearing deposits in banks |
|
|
283 |
|
|
288 |
|
|
|
259 |
|
|
Total interest and dividend income |
|
|
13,520 |
|
|
13,342 |
|
|
|
13,360 |
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
|
|
|
|
|
Deposits |
|
|
625 |
|
|
631 |
|
|
|
764 |
|
|
Borrowings |
|
|
2 |
|
|
15 |
|
|
|
29 |
|
|
Total interest expense |
|
|
627 |
|
|
646 |
|
|
|
793 |
|
|
Net interest income |
|
|
12,893 |
|
|
12,696 |
|
|
|
12,567 |
|
|
Provision for loan losses |
|
|
-- |
|
|
-- |
|
|
|
-- |
|
|
Net interest income after provision for loan
losses |
|
|
12,893 |
|
|
12,696 |
|
|
|
12,567 |
|
|
|
|
|
|
|
|
|
|
Non-interest income |
|
|
|
|
|
|
|
Service
charges on deposits |
|
|
1,014 |
|
|
913 |
|
|
|
941 |
|
|
ATM and
debit card interchange transaction fees |
|
|
1,247 |
|
|
1,277 |
|
|
|
1,237 |
|
|
Gain on
sales of loans, net |
|
|
416 |
|
|
663 |
|
|
|
1,758 |
|
|
Bank
owned life insurance (“BOLI”) net earnings |
|
|
152 |
|
|
154 |
|
|
|
146 |
|
|
Valuation recovery on loan servicing rights, net |
|
|
-- |
|
|
119 |
|
|
|
438 |
|
|
Recoveries on investment securities, net |
|
|
3 |
|
|
8 |
|
|
|
3 |
|
|
Other |
|
|
251 |
|
|
308 |
|
|
|
363 |
|
|
Total non-interest income, net |
|
|
3,083 |
|
|
3,442 |
|
|
|
4,886 |
|
|
|
|
|
|
|
|
|
|
Non-interest expense |
|
|
|
|
|
|
|
Salaries
and employee benefits |
|
|
5,192 |
|
|
5,171 |
|
|
|
4,778 |
|
|
Premises
and equipment |
|
|
988 |
|
|
928 |
|
|
|
998 |
|
|
Advertising |
|
|
161 |
|
|
166 |
|
|
|
155 |
|
|
OREO and
other repossessed assets, net |
|
|
2 |
|
|
(18 |
) |
|
|
(68 |
) |
|
ATM and
debit card processing |
|
|
450 |
|
|
464 |
|
|
|
445 |
|
|
Postage
and courier |
|
|
164 |
|
|
136 |
|
|
|
149 |
|
|
State
and local taxes |
|
|
235 |
|
|
255 |
|
|
|
255 |
|
|
Professional fees |
|
|
322 |
|
|
271 |
|
|
|
181 |
|
|
FDIC
insurance expense |
|
|
126 |
|
|
128 |
|
|
|
105 |
|
|
Loan
administration and foreclosure |
|
|
96 |
|
|
104 |
|
|
|
90 |
|
|
Data
processing and telecommunications |
|
|
669 |
|
|
613 |
|
|
|
634 |
|
|
Deposit
operations |
|
|
262 |
|
|
299 |
|
|
|
245 |
|
|
Amortization of core deposit intangible (“CDI”) |
|
|
79 |
|
|
79 |
|
|
|
91 |
|
|
Other,
net |
|
|
587 |
|
|
668 |
|
|
|
493 |
|
|
Total non-interest expense, net |
|
|
9,333 |
|
|
9,264 |
|
|
|
8,551 |
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
6,643 |
|
|
6,874 |
|
|
|
8,902 |
|
|
Provision for income taxes |
|
|
1,316 |
|
|
1,389 |
|
|
|
1,651 |
|
|
Net income |
|
$ |
5,327 |
|
$ |
5,485 |
|
|
$ |
7,251 |
|
|
|
|
|
|
|
|
|
|
Net income per common share: |
|
|
|
|
|
|
|
Basic |
|
$ |
0.64 |
|
$ |
0.66 |
|
|
$ |
0.87 |
|
|
Diluted |
|
|
0.63 |
|
|
0.65 |
|
|
|
0.86 |
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
|
8,337,407 |
|
|
8,356,066 |
|
|
|
8,331,121 |
|
|
Diluted |
|
|
8,421,875 |
|
|
8,448,900 |
|
|
|
8,444,798 |
|
TIMBERLAND
BANCORP INC. AND SUBSIDIARYCONSOLIDATED STATEMENTS
OF INCOME |
|
Six Months Ended |
($ in thousands,
except per share amounts) (unaudited) |
|
March 31, |
|
|
|
March 31, |
|
|
2022 |
|
|
|
2021 |
|
Interest and dividend income |
|
|
|
|
|
|
|
Loans receivable |
|
$ |
25,242 |
|
|
|
|
$ |
26,108 |
|
|
Investment securities |
|
|
996 |
|
|
|
|
|
585 |
|
|
Dividends from mutual funds, FHLB stock and other investments |
|
|
54 |
|
|
|
|
|
55 |
|
|
Interest
bearing deposits in banks |
|
|
571 |
|
|
|
|
|
569 |
|
|
Total interest and dividend income |
|
|
26,863 |
|
|
|
|
|
27,317 |
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
|
|
|
|
|
Deposits |
|
|
1,257 |
|
|
|
|
|
1,668 |
|
|
Borrowings |
|
|
17 |
|
|
|
|
|
58 |
|
|
Total interest expense |
|
|
1,274 |
|
|
|
|
|
1,726 |
|
|
Net interest income |
|
|
25,589 |
|
|
|
|
|
25,591 |
|
|
Provision for loan losses |
|
|
-- |
|
|
|
|
|
-- |
|
|
Net interest income after provision for loan
losses |
|
|
25,589 |
|
|
|
|
|
25,591 |
|
|
|
|
|
|
|
|
|
|
Non-interest income |
|
|
|
|
|
|
|
Service
charges on deposits |
|
|
1,927 |
|
|
|
|
|
1,996 |
|
|
ATM and
debit card interchange transaction fees |
|
|
2,523 |
|
|
|
|
|
2,393 |
|
|
Gain on
sales of loans, net |
|
|
1,079 |
|
|
|
|
|
3,760 |
|
|
Bank
owned life insurance (“BOLI”) net earnings |
|
|
305 |
|
|
|
|
|
295 |
|
|
Valuation recovery on loan servicing rights, net |
|
|
119 |
|
|
|
|
|
202 |
|
|
Recoveries on investment securities, net |
|
|
11 |
|
|
|
|
|
8 |
|
|
Other |
|
|
561 |
|
|
|
|
|
791 |
|
|
Total non-interest income, net |
|
|
6,525 |
|
|
|
|
|
9,445 |
|
|
|
|
|
|
|
|
|
|
Non-interest expense |
|
|
|
|
|
|
|
Salaries
and employee benefits |
|
|
10,363 |
|
|
|
|
|
9,391 |
|
|
Premises
and equipment |
|
|
1,916 |
|
|
|
|
|
1,955 |
|
|
Advertising |
|
|
327 |
|
|
|
|
|
311 |
|
|
OREO and
other repossessed assets, net |
|
|
(16 |
) |
|
|
|
|
(94 |
) |
|
ATM and
debit card processing |
|
|
914 |
|
|
|
|
|
876 |
|
|
Postage
and courier |
|
|
300 |
|
|
|
|
|
287 |
|
|
State
and local taxes |
|
|
489 |
|
|
|
|
|
538 |
|
|
Professional fees |
|
|
593 |
|
|
|
|
|
412 |
|
|
FDIC
insurance expense |
|
|
254 |
|
|
|
|
|
201 |
|
|
Loan
administration and foreclosure |
|
|
200 |
|
|
|
|
|
171 |
|
|
Data
processing and telecommunications |
|
|
1,282 |
|
|
|
|
|
1,240 |
|
|
Deposit
operations |
|
|
561 |
|
|
|
|
|
529 |
|
|
Amortization of CDI |
|
|
158 |
|
|
|
|
|
181 |
|
|
Other,
net |
|
|
1,256 |
|
|
|
|
|
963 |
|
|
Total non-interest expense, net |
|
|
18,597 |
|
|
|
|
|
16,961 |
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
13,517 |
|
|
|
|
|
18,075 |
|
|
Provision for income taxes |
|
|
2,705 |
|
|
|
|
|
3,534 |
|
|
Net income |
|
$ |
10,812 |
|
|
|
|
$ |
14,541 |
|
|
|
|
|
|
|
|
|
|
Net income per common share: |
|
|
|
|
|
|
|
Basic |
|
$ |
1.30 |
|
|
|
|
$ |
1.75 |
|
|
Diluted |
|
|
1.28 |
|
|
|
|
|
1.73 |
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
|
8,346,839 |
|
|
|
|
|
8,322,210 |
|
|
Diluted |
|
|
8,435,536 |
|
|
|
|
|
8,428,595 |
|
TIMBERLAND
BANCORP INC. AND SUBSIDIARYCONSOLIDATED BALANCE
SHEETS |
|
($ in thousands,
except per share amounts) (unaudited) |
|
March 31, |
|
Dec. 31, |
|
March 31, |
|
|
2022 |
|
2021 |
|
2021 |
Assets |
|
|
|
|
|
|
Cash and due from
financial institutions |
|
$ |
26,500 |
|
|
$ |
20,539 |
|
|
$ |
21,707 |
|
Interest-bearing
deposits in banks |
|
|
465,802 |
|
|
|
537,789 |
|
|
|
411,635 |
|
|
Total
cash and cash equivalents |
|
|
492,302 |
|
|
|
558,328 |
|
|
|
433,342 |
|
|
|
|
|
|
|
|
|
Certificates of
deposit (“CDs”) held for investment, at cost |
|
|
28,619 |
|
|
|
24,648 |
|
|
|
39,674 |
|
Investment
securities: |
|
|
|
|
|
|
|
Held to
maturity, at amortized cost |
|
|
189,405 |
|
|
|
114,600 |
|
|
|
36,465 |
|
|
Available for sale, at fair value |
|
|
50,624 |
|
|
|
56,552 |
|
|
|
69,184 |
|
Investments in
equity securities, at fair value |
|
|
902 |
|
|
|
946 |
|
|
|
957 |
|
FHLB stock |
|
|
2,194 |
|
|
|
2,103 |
|
|
|
2,303 |
|
Other investments,
at cost |
|
|
3,000 |
|
|
|
3,000 |
|
|
|
3,000 |
|
Loans held for
sale |
|
|
2,772 |
|
|
|
3,700 |
|
|
|
8,455 |
|
|
|
|
|
|
|
|
Loans
receivable |
|
|
1,047,513 |
|
|
|
1,007,475 |
|
|
|
1,044,117 |
|
Less: Allowance
for loan losses |
|
|
(13,433 |
) |
|
|
(13,468 |
) |
|
|
(13,434 |
) |
|
Net
loans receivable |
|
|
1,034,080 |
|
|
|
994,007 |
|
|
|
1,030,683 |
|
|
|
|
|
|
|
|
|
Premises and
equipment, net |
|
|
21,878 |
|
|
|
22,108 |
|
|
|
22,763 |
|
OREO and other
repossessed assets, net |
|
|
157 |
|
|
|
157 |
|
|
|
157 |
|
BOLI |
|
|
22,498 |
|
|
|
22,347 |
|
|
|
21,891 |
|
Accrued interest
receivable |
|
|
3,927 |
|
|
|
3,938 |
|
|
|
4,471 |
|
Goodwill |
|
|
15,131 |
|
|
|
15,131 |
|
|
|
15,131 |
|
CDI |
|
|
1,106 |
|
|
|
1,185 |
|
|
|
1,444 |
|
Loan servicing
rights, net |
|
|
3,390 |
|
|
|
3,524 |
|
|
|
3,604 |
|
Operating lease
right-of-use assets |
|
|
2,129 |
|
|
|
2,206 |
|
|
|
2,436 |
|
Other assets |
|
|
3,356 |
|
|
|
2,795 |
|
|
|
3,284 |
|
|
Total assets |
|
$ |
1,877,470 |
|
|
$ |
1,831,275 |
|
|
$ |
1,699,244 |
|
|
|
|
|
|
|
|
|
Liabilities and shareholders’ equity |
|
|
|
|
|
|
Deposits:
Non-interest-bearing demand |
|
$ |
525,488 |
|
|
$ |
523,518 |
|
|
$ |
499,541 |
|
Deposits:
Interest-bearing |
|
|
1,130,938 |
|
|
|
1,083,113 |
|
|
|
982,318 |
|
|
Total
deposits |
|
|
1,656,426 |
|
|
|
1,606,631 |
|
|
|
1,481,859 |
|
|
|
|
|
|
|
|
|
Operating lease
liabilities |
|
|
2,210 |
|
|
|
2,285 |
|
|
|
2,499 |
|
FHLB
borrowings |
|
|
-- |
|
|
|
5,000 |
|
|
|
10,000 |
|
Other liabilities
and accrued expenses |
|
|
6,565 |
|
|
|
6,984 |
|
|
|
6,343 |
|
|
Total liabilities |
|
|
1,665,201 |
|
|
|
1,620,900 |
|
|
|
1,500,701 |
|
|
|
|
|
|
|
|
Shareholders’ equity |
|
|
|
|
|
|
Common stock, $.01 par value; 50,000,000 shares
authorized;
8,305,826 shares issued and outstanding – March 31,
2022
8,348,821 shares issued and outstanding – December 31, 2021
8,361,457 shares issued and outstanding – March 31, 2021 |
|
|
40,988 |
|
|
|
42,436 |
|
|
|
42,949 |
|
Retained
earnings |
|
|
171,388 |
|
|
|
167,897 |
|
|
|
155,473 |
|
Accumulated other
comprehensive income (loss) |
|
|
(107 |
) |
|
|
42 |
|
|
|
121 |
|
|
Total shareholders’ equity |
|
|
212,269 |
|
|
|
210,375 |
|
|
|
198,543 |
|
|
Total liabilities and shareholders’ equity |
|
$ |
1,877,470 |
|
|
$ |
1,831,275 |
|
|
$ |
1,699,244 |
|
KEY FINANCIAL RATIOS AND DATA |
Three Months Ended |
($ in
thousands, except per share amounts) (unaudited) |
|
March 31, |
|
Dec. 31, |
|
March 31, |
|
|
2022 |
|
2021 |
|
2021 |
PERFORMANCE RATIOS: |
|
|
|
|
|
|
Return on average assets (a) |
|
|
1.16 |
% |
|
|
1.20 |
% |
|
|
1.75 |
% |
Return
on average equity (a) |
|
|
10.10 |
% |
|
|
10.55 |
% |
|
|
14.89 |
% |
Net
interest margin (a) |
|
|
2.95 |
% |
|
|
2.92 |
% |
|
|
3.21 |
% |
Efficiency ratio |
|
|
58.42 |
% |
|
|
57.40 |
% |
|
|
48.99 |
% |
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
March 31, |
|
|
|
March 31, |
|
|
2022 |
|
|
|
2021 |
PERFORMANCE RATIOS: |
|
|
1.18 |
% |
|
|
|
|
1.80 |
% |
Return
on average assets (a) |
|
|
10.33 |
% |
|
|
|
|
15.14 |
% |
Return
on average equity (a) |
|
|
2.93 |
% |
|
|
|
|
3.34 |
% |
Net
interest margin (a) |
|
|
57.91 |
% |
|
|
|
|
48.41 |
% |
Efficiency ratio |
|
|
|
|
|
|
|
|
March 31, |
|
Dec. 31, |
|
March 31, |
|
|
2022 |
|
2021 |
|
2021 |
ASSET QUALITY RATIOS AND DATA: |
|
|
|
|
|
|
Non-accrual loans |
|
$ |
2,651 |
|
|
$ |
2,853 |
|
|
$ |
2,305 |
|
Loans
past due 90 days and still accruing |
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
Non-performing investment securities |
|
|
127 |
|
|
|
140 |
|
|
|
188 |
|
OREO and
other repossessed assets |
|
|
157 |
|
|
|
157 |
|
|
|
157 |
|
Total
non-performing assets (b) |
|
$ |
2,935 |
|
|
$ |
3,150 |
|
|
$ |
2,650 |
|
|
|
|
|
|
|
|
Non-performing assets to total assets (b) |
|
|
0.16 |
% |
|
|
0.17 |
% |
|
|
0.16 |
% |
Net
charge-offs (recoveries) during quarter |
|
$ |
35 |
|
|
$ |
1 |
|
|
$ |
(2 |
) |
ALL to
non-accrual loans, |
|
|
507 |
% |
|
|
472 |
% |
|
|
583 |
% |
ALL to
loans receivable (c) |
|
|
1.28 |
% |
|
|
1.34 |
% |
|
|
1.29 |
% |
ALL to
loans receivable (excluding SBA PPP loans) (d) (non-GAAP) |
|
|
1.29 |
% |
|
|
1.37 |
% |
|
|
1.48 |
% |
ALL to
loans receivable (excluding SBA PPP loans and South Sound
Acquisition loans) (d) (e) (non-GAAP) |
|
|
1.33 |
% |
|
|
1.41 |
% |
|
|
1.56 |
% |
Troubled
debt restructured loans on accrual status (f) |
|
$ |
2,496 |
|
|
$ |
2,361 |
|
|
$ |
2,864 |
|
|
|
|
|
|
|
|
CAPITAL RATIOS: |
|
|
|
|
|
|
Tier 1
leverage capital |
|
|
10.86 |
% |
|
|
10.81 |
% |
|
|
11.19 |
% |
Tier 1
risk-based capital |
|
|
19.50 |
% |
|
|
20.24 |
% |
|
|
19.47 |
% |
Common
equity Tier 1 risk-based capital |
|
|
19.50 |
% |
|
|
20.24 |
% |
|
|
19.47 |
% |
Total risk-based capital |
|
|
20.75 |
% |
|
|
21.49 |
% |
|
|
20.72 |
% |
Tangible
common equity to tangible assets (non-GAAP) |
|
|
10.53 |
% |
|
|
10.69 |
% |
|
|
10.81 |
% |
|
|
|
|
|
|
|
BOOK VALUES: |
|
|
|
|
|
|
Book
value per common share |
|
$ |
25.56 |
|
|
$ |
25.20 |
|
|
$ |
23.75 |
|
Tangible
book value per common share (g) |
|
|
23.60 |
|
|
|
23.24 |
|
|
|
21.76 |
|
________________________________________________
(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 $5,934, $21,397 and $138,175 at March 31, 2022, December
31, 2021 and March 31, 2021, respectively.(e) Does not include
loans acquired in the South Sound Acquisition totaling $28,459,
$31,907 and $46,626 at March 31, 2022, December 31, 2021 and March
31, 2021, respectively.(f) Does not include troubled debt
restructured loans totaling $172, $177 and $192 reported as
non-accrual loans at March 31, 2022, December 31, 2021 and March
31, 2021, respectively. (g) Tangible common equity divided by
common shares outstanding
(non-GAAP).
AVERAGE BALANCES, YIELDS, AND RATES -
QUARTERLY ($ in thousands)(unaudited)
|
For the Three Months Ended |
|
|
March 31, 2022 |
|
December 31, 2021 |
|
March 31, 2021 |
|
|
Amount |
|
Rate |
|
Amount |
|
Rate |
|
Amount |
|
Rate |
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
Loans receivable and loans
held for sale |
$ |
1,029,582 |
|
|
4.90 |
% |
|
$ |
997,358 |
|
|
5.06 |
% |
|
$ |
1,044,476 |
|
|
4.90 |
% |
Investment securities and FHLB
stock (1) |
|
209,868 |
|
|
1.18 |
|
|
|
162,077 |
|
|
1.07 |
|
|
|
101,675 |
|
|
1.23 |
|
Interest-earning deposits in
banks and CDs |
|
510,211 |
|
|
0.22 |
|
|
|
580,337 |
|
|
0.20 |
|
|
|
422,286 |
|
|
0.24 |
|
Total interest-earning assets |
|
1,749,661 |
|
|
3.09 |
|
|
|
1,739,772 |
|
|
3.07 |
|
|
|
1,568,437 |
|
|
3.41 |
|
Other assets |
|
84,252 |
|
|
|
|
|
83,563 |
|
|
|
|
|
85,203 |
|
|
|
Total assets |
$ |
1,833,913 |
|
|
|
|
$ |
1,823,335 |
|
|
|
|
$ |
1,653,640 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
NOW checking accounts |
$ |
441,259 |
|
|
0.13 |
% |
|
$ |
440,744 |
|
|
0.13 |
% |
|
$ |
394,612 |
|
|
0.16 |
% |
Money market accounts |
|
244,250 |
|
|
0.29 |
|
|
|
222,945 |
|
|
0.29 |
|
|
|
178,768 |
|
|
0.30 |
|
Savings accounts |
|
277,888 |
|
|
0.08 |
|
|
|
264,651 |
|
|
0.08 |
|
|
|
236,504 |
|
|
0.08 |
|
Certificates of deposit
accounts |
|
128,588 |
|
|
0.80 |
|
|
|
132,590 |
|
|
0.83 |
|
|
|
146,065 |
|
|
1.19 |
|
Total interest-bearing deposits |
|
1,091,985 |
|
|
0.23 |
|
|
|
1,060,930 |
|
|
0.24 |
|
|
|
955,949 |
|
|
0.32 |
|
Borrowings |
|
677 |
|
|
1.18 |
|
|
|
5,000 |
|
|
1.20 |
|
|
|
10,003 |
|
|
1.17 |
|
Total interest-bearing liabilities |
|
1,092,662 |
|
|
0.23 |
|
|
|
1,065,930 |
|
|
0.24 |
|
|
|
965,952 |
|
|
0.33 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing demand
deposits |
|
521,284 |
|
|
|
|
|
538,865 |
|
|
|
|
|
482,528 |
|
|
|
Other liabilities |
|
9,072 |
|
|
|
|
|
10,567 |
|
|
|
|
|
10,365 |
|
|
|
Shareholders’ equity |
|
210,895 |
|
|
|
|
|
207,973 |
|
|
|
|
|
194,795 |
|
|
|
Total liabilities and shareholders’ equity |
$ |
1,833,913 |
|
|
|
|
$ |
1,823,335 |
|
|
|
|
$ |
1,653,640 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread |
|
|
2.86 |
% |
|
|
|
2.83 |
% |
|
|
|
3.08 |
% |
Net interest margin (2) |
|
|
2.95 |
% |
|
|
|
2.92 |
% |
|
|
|
3.21 |
% |
Average interest-earning assets to |
|
|
|
|
|
|
|
|
|
|
|
average interest-bearing liabilities |
|
160.13 |
% |
|
|
|
|
163.22 |
% |
|
|
|
|
162.37 |
% |
|
|
_____________________________________(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 Six Months Ended |
|
|
March 31, 2022 |
|
|
|
March 31, 2021 |
|
|
Amount |
|
Rate |
|
|
|
|
|
Amount |
|
Rate |
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
Loans receivable and loans
held for sale |
$ |
1,013,293 |
|
|
4.98 |
% |
|
|
|
|
|
$ |
1,037,304 |
|
|
5.03 |
% |
Investment securities and FHLB
stock (1) |
|
185,710 |
|
|
1.13 |
|
|
|
|
|
|
|
97,812 |
|
|
1.31 |
|
Interest-earning deposits in
banks and CDs |
|
545,651 |
|
|
0.21 |
|
|
|
|
|
|
|
398,067 |
|
|
0.29 |
|
Total interest-earning assets |
|
1,744,654 |
|
|
3.08 |
|
|
|
|
|
|
|
1,533,183 |
|
|
3.56 |
|
Other assets |
|
83,908 |
|
|
|
|
|
|
|
|
|
84,635 |
|
|
|
Total assets |
$ |
1,828,562 |
|
|
|
|
|
|
|
|
$ |
1,617,818 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
NOW checking accounts |
$ |
440,999 |
|
|
0.13 |
% |
|
|
|
|
|
$ |
386,093 |
|
|
0.17 |
% |
Money market accounts |
|
233,480 |
|
|
0.29 |
|
|
|
|
|
|
|
173,579 |
|
|
0.31 |
|
Savings accounts |
|
271,197 |
|
|
0.08 |
|
|
|
|
|
|
|
229,610 |
|
|
0.08 |
|
Certificates of deposit
accounts |
|
130,611 |
|
|
0.81 |
|
|
|
|
|
|
|
150,645 |
|
|
1.29 |
|
Total interest-bearing deposits |
|
1,076,287 |
|
|
0.23 |
|
|
|
|
|
|
|
939,927 |
|
|
0.36 |
|
Borrowings |
|
2,862 |
|
|
1.19 |
|
|
|
|
|
|
|
10,002 |
|
|
1.16 |
|
Total interest-bearing liabilities |
|
1,079,149 |
|
|
0.24 |
|
|
|
|
|
|
|
949,929 |
|
|
0.36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing demand
deposits |
|
530,171 |
|
|
|
|
|
|
|
|
|
465,251 |
|
|
|
Other liabilities |
|
9,824 |
|
|
|
|
|
|
|
|
|
10,528 |
|
|
|
Shareholders’ equity |
|
209,418 |
|
|
|
|
|
|
|
|
|
192,110 |
|
|
|
Total liabilities and shareholders’ equity |
$ |
1,828,562 |
|
|
|
|
|
|
|
|
$ |
1,617,818 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread |
|
|
2.84 |
% |
|
|
|
|
|
|
|
3.20 |
% |
Net interest margin (2) |
|
|
2.93 |
% |
|
|
|
|
|
|
|
3.34 |
% |
Average interest-earning assets to |
|
|
|
|
|
|
|
|
|
|
|
average interest-bearing liabilities |
|
161.67 |
% |
|
|
|
|
|
|
|
|
161.40 |
% |
|
|
_____________________________________(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 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) |
|
March 31, 2022 |
|
December 31, 2021 |
|
March 31, 2021 |
|
|
|
|
|
|
|
Shareholders’ equity |
|
$ |
212,269 |
|
|
$ |
210,375 |
|
|
$ |
198,543 |
|
Less
goodwill and CDI |
|
|
(16,237 |
) |
|
|
(16,316 |
) |
|
|
(16,575 |
) |
Tangible
common equity |
|
$ |
196,032 |
|
|
$ |
194,059 |
|
|
$ |
181,968 |
|
|
|
|
|
|
|
|
Total
assets |
|
$ |
1,877,470 |
|
|
$ |
1,831,275 |
|
|
$ |
1,699,244 |
|
Less
goodwill and CDI |
|
|
(16,237 |
) |
|
|
(16,316 |
) |
|
|
(16,575 |
) |
Tangible
assets |
|
$ |
1,861,233 |
|
|
$ |
1,814,959 |
|
|
$ |
1,682,669 |
|
Contact: |
Michael R. Sand,
CEODean J. Brydon, President &
CFO(360)
533-4747www.timberlandbank.com |
Timberland Bancorp (NASDAQ:TSBK)
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