Timberland Bancorp, Inc. (NASDAQ: TSBK) (“Timberland” or “the
Company”), the holding company for Timberland Bank (the “Bank”),
today reported net income of $6.31 million, or $0.77 per diluted
common share, for the quarter ended June 30, 2023. This compares to
net income of $5.74 million, or $0.69 per diluted common share for
the comparable quarter one year ago and $6.66 million, or $0.80 per
diluted common share, for the preceding quarter.
For the first nine months of fiscal 2023, Timberland’s net
income increased 24% to $20.48 million, or $2.47 per diluted common
share, compared to $16.55 million, or $1.97 per diluted common
share for the first nine months of fiscal 2022.
“Timberland’s third fiscal quarter produced strong financial
results, with net income and EPS increasing 10% and 12%,
respectively, compared to the year ago quarter,” stated Dean
Brydon, Chief Executive Officer. “Strong quarterly loan portfolio
growth of 4% in conjunction with a higher interest rate environment
compared to a year ago contributed to our solid quarterly and
year-to-date results. As a result of the Company’s strong earnings
and capital position, Timberland’s Board of Directors announced a
quarterly cash dividend of $0.23 per share, payable on August 25,
2023, to shareholders of record on August 11, 2023. This represents
the 43rd consecutive quarter Timberland will have paid a cash
dividend. In addition, the Company also announced the adoption of a
new stock repurchase program. Under the new repurchase program,
Timberland may repurchase up to 5% of the outstanding shares, or
404,708 shares. The new stock repurchase program replaces our
existing stock repurchase program, which had 74,212 shares
available to be repurchased.”
“Asset quality metrics remain excellent, with quarter end
non-performing assets at 9 basis points of total assets,” Brydon
continued. “Loan origination volumes remained steady and net loans
receivable grew by $50 million during the quarter. Due primarily to
loan portfolio growth, a $610,000 provision for loan losses was
made for the quarter. At the same time, both on-balance sheet and
off-balance sheet liquidity remained strong with only $15 million
in borrowings at June 30, 2023 and additional secured borrowing
line capacity of $691 million available through the Federal Home
Loan Bank (“FHLB”) and the Federal Reserve.”
“Net interest margin remained strong at 3.94% for the quarter,
just 5 basis points lower than the prior quarter’s margin and 83
basis points higher compared to the year ago quarter,” said
Jonathan Fischer, President and Chief Operating Officer. “Deposit
growth and pricing was competitive during the quarter, and we have
not been immune to the effects of the Federal Reserve’s tightening
monetary policy. As anticipated, funding costs increased during the
quarter as we continue to increase short-term deposit rates to
retain rate sensitive customer deposits. We added $38 million in
brokered deposits and saw a slight increase in total deposits
during the quarter.”
Earnings and Balance Sheet Highlights (at or
for the periods ended June 30, 2023, compared to June 30, 2022, or
March 31, 2023):
Earnings Highlights:
- Earnings per diluted common share (“EPS”) increased 12% to
$0.77 for the current quarter from $0.69 for the comparable quarter
one year ago and decreased 4% from $0.80 for the preceding quarter;
EPS for the first nine months of fiscal 2023 increased 25% to $2.47
from $1.97 for the first nine months of fiscal 2022;
- Net income increased 10% to $6.31 million for the current
quarter from $5.74 million for the comparable quarter one year ago
and decreased 5% from $6.66 million for the preceding quarter; Net
income increased 24% to $20.48 million for the first nine months of
fiscal 2023 from $16.55 million for the first nine months of fiscal
2022;
- Return on average equity (“ROE”) and return on average assets
(“ROA”) for the current quarter were 11.07% and 1.42%,
respectively;
- Net interest margin (“NIM”) for the current quarter expanded to
3.94% from 3.11% for the comparable quarter one year ago and
compressed from 3.99% for the preceding quarter; and
- The efficiency ratio for the current quarter was 56.01%
compared to 57.80% for the comparable quarter one year ago and
55.31% for the preceding quarter.
Balance Sheet
Highlights:
- Total assets decreased 4% year-over-year and increased 1% from
the prior quarter;
- Net loans receivable increased 16% year-over-year and 4% from
the prior quarter;
- Total deposits decreased 7% year-over-year and increased
slightly (less than 1%) from the prior quarter;
- Total shareholders’ equity increased 7% year-over-year and 1%
from the prior quarter;
- Non-performing assets to total assets ratio improved to 0.09%
from 0.13% one year ago;
- Book and tangible book (non-GAAP) values per common share
increased to $28.32 and $26.36, respectively, at June 30, 2023;
and
- Liquidity (both on-balance sheet and off-balance sheet)
remained strong at June 30, 2023 with only $15 million in
borrowings and additional secured borrowing line capacity of $691
million available through the FHLB and the Federal Reserve.
Operating Results
Operating revenue (net interest income before the
provision for loan losses plus non-interest income) for the current
quarter increased 14% to $19.51 million from $17.08 million for the
comparable quarter one year ago and decreased 1% from $19.79
million for the preceding quarter. The decrease in operating
revenue compared to the preceding quarter was primarily due to a
decrease in net interest income as funding costs increased at a
greater pace than interest income increased. Operating revenue
increased by 21% to $59.74 million for the first nine months of
fiscal 2023 from $49.20 million for the first nine months of fiscal
2022, primarily due to increased interest income from loans,
overnight funds, and investment securities, which were partially
offset by an increase in total interest expense and a decrease in
gain on sales of loans. The increased interest income in these
categories was primarily a result of increased short-term market
interest rates and the continued deployment of liquidity into
higher-yielding loans and investment securities.
Net interest income increased $2.65 million, or
19%, to $16.63 million for the current quarter from $13.98 million
for the comparable quarter one year ago and decreased $517,000 or
3%, from $17.15 million for the preceding quarter. The decrease in
net interest income compared to the preceding quarter was primarily
due to increased funding costs and a decrease in average
interest-earning assets. The weighted average cost of total
interest-bearing liabilities increased to 1.22% for the current
quarter from 0.84% for the preceding quarter as market interest
rates increased. Partially offsetting the increase in interest
expense was an increase in the weighted average yield on total
interest-earning assets to 4.72% for the current quarter from 4.51%
for the preceding quarter. Total average interest-earning assets
decreased by $31.71 million, or 2%, to $1.69 billion for the
current quarter from $1.72 billion for the preceding
quarter. Timberland’s NIM for the current quarter compressed
to 3.94% from 3.99% for the preceding quarter and expanded from
3.11% for the comparable quarter one year ago. The NIM for the
current quarter was increased by approximately three basis points
due to the accretion of $22,000 of the fair value discount on loans
acquired in the South Sound Acquisition and the collection of
$87,000 in pre-payment penalties, non-accrual interest, and late
fees. The NIM for the preceding quarter was increased by
approximately three basis points due to the accretion of $15,000 of
the fair value discount on loans acquired in the South Sound
Acquisition and the collection of $99,000 in pre-payment penalties,
non-accrual interest and late fees. The NIM for the comparable
quarter one year ago 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. Net interest income for the first nine months of fiscal 2023
increased $11.96 million, or 30%, to $51.53 million from $39.57
million for the first nine months of fiscal 2022. Timberland’s net
interest margin for the first nine months of fiscal 2023 expanded
to 3.99% from 2.99% for the first nine months of fiscal 2022.
U.S. Small Business Administration (“SBA”) PPP
loans contribute to interest income through the 1.00% interest rate
earned on outstanding loan balances and also through the accretion
of loan origination fees into interest income over the life of each
PPP loan. At June 30, 2023, Timberland had SBA PPP deferred loan
origination fees of $19,000 remaining to be accreted into interest
income over the remaining life of the loans. The following table
details the interest income recognized from SBA PPP loans:
|
SBA PPP Loan Income($ in thousands) |
|
|
Three Months Ended |
|
|
June 30, 2023 |
|
March 31, 2023 |
|
June 30, 2022 |
|
Interest income |
$ |
1 |
|
$ |
1 |
|
$ |
9 |
|
Loan origination fee accretion |
|
2 |
|
|
4 |
|
|
146 |
|
Total SBA PPP loan income |
$ |
3 |
|
$ |
5 |
|
$ |
155 |
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
June 30, 2023 |
|
|
|
June 30, 2022 |
|
Interest income |
$ |
4 |
|
|
|
$ |
111 |
|
Loan origination fee accretion |
|
23 |
|
|
|
|
1,782 |
|
Total SBA PPP loan income |
$ |
27 |
|
|
|
$ |
1,893 |
|
|
|
|
|
|
|
A $610,000 provision for loan losses was recorded
for the quarter ended June 30, 2023. The
provision was made primarily due to loan portfolio growth. A
$475,000 provision for loans losses was recorded for the quarter
ended March 31, 2023. No provision for loan losses was made
during the quarter ended June 30, 2022.
Non-interest income increased $239,000 or 9%, to
$2.88 million for the current quarter from $2.64 million for the
preceding quarter and decreased $227,000, or 7%, from $3.10 million
for the comparable quarter one year ago. The increase in
non-interest income compared to the preceding quarter was primarily
due to a $95,000 gain on sale of investment securities, a $77,000
increase in service charges on deposits, a $60,000 increase in ATM
and debit card interchange transaction fees and smaller increases
in several other categories. Fiscal year-to-date non-interest
income decreased 15% to $8.22 million from $9.63 million for the
first nine months of fiscal 2022, primarily due to a $1.19 million
decrease in gain on sales of loans as the dollar amount of
fixed-rate one-to four-family loans originated and sold decreased
as demand slowed and a larger portion of single family loan
originations were retained in the portfolio rather than being
sold.
Total operating (non-interest) expenses for the
current quarter decreased slightly (less than 1%) to $10.93 million
from $10.94 million for the preceding quarter and increased $1.05
million, or 11%, from $9.87 million for the comparable quarter one
year ago. The decrease in operating expenses compared to the
preceding quarter was primarily due to a $186,000 decrease in
salaries and employee benefits (primarily due to fewer employees)
and smaller decreases in several other expense categories. These
decreases were partially offset by a $184,000 increase in deposit
operations expense (primarily due to an increase in unrecovered
overdrafts and fraud related expenses) and smaller increases in
several other expense categories. The efficiency ratio for the
current quarter was 56.01% compared to 55.31% for the preceding
quarter and 57.80% for the comparable quarter one year ago. Fiscal
year-to-date operating expenses increased 14% to $32.41 million
from $28.47 million for the first nine months of fiscal 2022. The
year-to-date increase in operating expenses was primarily due to a
$2.20 million increase in salaries and employee benefits, a
$632,000 increase in data processing and telecommunications
expense, and smaller increases in several other expense categories.
The efficiency ratio for the first nine months of fiscal 2023
improved to 54.24% from 57.87% for the first nine months of fiscal
2022.
The provision for income taxes for the current
quarter decreased $39,000, or 2%, to $1.67 million from $1.71
million for the preceding quarter, primarily due to lower taxable
income. Timberland’s effective income tax rate was 20.9% for
the quarter ended June 30, 2023 compared to 20.4% for the quarter
ended March 31, 2023 and 20.4% for the quarter ended June 30,
2022. Timberland’s effective income tax rate was 20.4% for the
first nine months of fiscal 2023 compared to 20.1% for the first
nine months of fiscal 2022.
Balance Sheet Management
Total assets increased $21.10 million, or 1%, during the quarter
to $1.81 billion at June 30, 2023 from $1.79 billion at March 31,
2023 and decreased $80.08 million, or 4%, from $1.89 billion one
year ago. The quarter’s increase was primarily due to a $50.45
million increase in net loans receivable which was partially offset
by a $17.10 million decrease in investment securities and CDs held
for investment and a $12.53 million decrease in total cash and cash
equivalents.
Liquidity
Timberland has continued to maintain a strong liquidity position
(both on-balance sheet and off-balance sheet) while deploying
overnight funds into loans and investment securities during the
past year. Liquidity, as measured by the sum of cash and cash
equivalents, CDs held for investment, and available for sale
investment securities, was 12.1% of total liabilities at June 30,
2023, compared to 14.0% at March 31, 2023, and 29.4% one year ago.
Timberland had secured borrowing line capacity of $691 million
available through the FHLB and the Federal Reserve at June 30,
2023. With a strong and diversified deposit base, only 21% of
Timberland’s deposits were uninsured (or uncollateralized) at June
30, 2023. (Note: The uninsured deposit calculation excludes public
deposits that are fully collateralized.)
Loans
Net loans receivable increased $50.45 million, or 4%, during the
quarter to $1.26 billion at June 30, 2023 from $1.21 billion at
March 30, 2023. This increase was primarily due to a $14.66 million
increase in construction and land development loans, a $12.64
million increase in one- to four-family loans, a $9.14 million
increase in commercial real estate loans, a $7.91 million increase
in multi-family loans, a $7.76 million increase in commercial
loans, and smaller increases in several other loan categories.
These increases to net loans receivable were partially offset by a
$5.52 million increase in the undisbursed portion of construction
loans in process and smaller decreases in several other loan
categories.
Loan Portfolio($ in
thousands)
| |
June 30, 2023 |
|
March 31, 2023 |
|
June 30, 2022 |
|
|
Amount |
|
|
Percent |
|
|
Amount |
|
|
Percent |
|
|
Amount |
|
|
Percent |
|
| Mortgage loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One- to four-family (a) |
$229,274 |
|
|
17 |
% |
|
$216,639 |
|
|
16 |
% |
|
$144,682 |
|
|
12 |
% |
|
Multi-family |
111,777 |
|
|
8 |
|
|
103,870 |
|
|
8 |
|
|
98,718 |
|
|
8 |
|
|
Commercial |
557,015 |
|
|
40 |
|
|
547,876 |
|
|
41 |
|
|
532,167 |
|
|
44 |
|
|
Construction - custom and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
owner/builder |
136,595 |
|
|
10 |
|
|
124,071 |
|
|
9 |
|
|
117,724 |
|
|
10 |
|
|
Construction - speculative |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
one-to four-family |
12,522 |
|
|
1 |
|
|
11,343 |
|
|
1 |
|
|
13,954 |
|
|
1 |
|
|
Construction - commercial |
42,657 |
|
|
3 |
|
|
31,458 |
|
|
3 |
|
|
40,108 |
|
|
3 |
|
|
Construction - multi-family |
73,859 |
|
|
5 |
|
|
83,051 |
|
|
6 |
|
|
54,804 |
|
|
5 |
|
|
Construction - land |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
development |
15,968 |
|
|
1 |
|
|
17,018 |
|
|
1 |
|
|
21,240 |
|
|
2 |
|
|
Land |
25,908 |
|
|
2 |
|
|
24,520 |
|
|
2 |
|
|
24,490 |
|
|
2 |
|
|
Total mortgage loans |
1,205,575 |
|
|
87 |
|
|
1,159,846 |
|
|
87 |
|
|
1,047,887 |
|
|
87 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consumer loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home equity and second |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
mortgage |
40,008 |
|
|
3 |
|
|
36,896 |
|
|
3 |
|
|
32,821 |
|
|
3 |
|
|
Other |
2,469 |
|
|
-- |
|
|
2,283 |
|
|
-- |
|
|
2,545 |
|
|
-- |
|
|
Total consumer loans |
42,477 |
|
|
3 |
|
|
39,179 |
|
|
3 |
|
|
35,366 |
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Commercial loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial business loans |
137,114 |
|
|
10 |
|
|
129,306 |
|
|
10 |
|
|
122,822 |
|
|
10 |
|
|
SBA PPP loans |
519 |
|
|
-- |
|
|
572 |
|
|
-- |
|
|
1,320 |
|
|
-- |
|
|
Total commercial loans |
137,633 |
|
|
10 |
|
|
129,878 |
|
|
10 |
|
|
124,142 |
|
|
10 |
|
| Total loans |
1,385,685 |
|
|
100 |
% |
|
1,328,903 |
|
|
100 |
% |
|
1,207,395 |
|
|
100 |
% |
| Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Undisbursed portion of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
construction loans in |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
process |
(104,774 |
) |
|
|
|
|
(99,253 |
) |
|
|
|
|
(102,044 |
) |
|
|
|
|
Deferred loan origination |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
fees |
(4,957 |
) |
|
|
|
|
(4,759 |
) |
|
|
|
|
(3,951 |
) |
|
|
|
|
Allowance for loan losses |
(15,307 |
) |
|
|
|
|
(14,698 |
) |
|
|
|
|
(13,433 |
) |
|
|
|
|
Total loans receivable, net |
$1,260,647 |
|
|
|
|
|
$1,210,193 |
|
|
|
|
|
$1,087,967 |
|
|
|
|
_______________________(a) Does not include one- to four-family
loans held for sale totaling $0, $200, and $700 at June 30, 2023,
March 31, 2023, and June 30, 2022, respectively.
The following table provides a breakdown of commercial real
estate (“CRE”) mortgage loans by collateral type as of June 30,
2023:
CRE Loan Portfolio Breakdown by
Collateral($ in thousands)
|
Collateral Type |
|
Amount |
|
Percent of CRE Portfolio |
|
Percent of Total Loan Portfolio |
|
Industrial warehouse |
|
$ |
111,548 |
|
20 |
% |
|
8 |
% |
| Medical/dental offices |
|
|
77,710 |
|
14 |
|
|
5 |
|
| Office buildings |
|
|
68,583 |
|
12 |
|
|
5 |
|
| Other retail buildings |
|
|
48,643 |
|
9 |
|
|
4 |
|
| Hotel/motel |
|
|
30,972 |
|
6 |
|
|
2 |
|
| Restaurants |
|
|
29,802 |
|
5 |
|
|
2 |
|
| Mini-storage |
|
|
27,964 |
|
5 |
|
|
2 |
|
| Gas station/convenience
stores |
|
|
20,478 |
|
4 |
|
|
1 |
|
| Nursing homes |
|
|
18,137 |
|
3 |
|
|
1 |
|
| Mobile home parks |
|
|
10,492 |
|
2 |
|
|
1 |
|
| Shopping centers |
|
|
10,353 |
|
2 |
|
|
1 |
|
| Churches |
|
|
7,507 |
|
1 |
|
|
1 |
|
| Additional CRE |
|
|
94,826 |
|
17 |
|
|
7 |
|
|
Total CRE |
|
$ |
557,015 |
|
100 |
% |
|
40 |
% |
Timberland originated $93.72 million in loans during the quarter
ended June 30, 2023, compared to $77.15 million for the preceding
quarter and $128.90 million for the comparable quarter one year
ago. Timberland continues to originate fixed-rate one- to
four-family mortgage loans, a portion of which are sold into the
secondary market for asset-liability management purposes and to
generate non-interest income. During the past twelve months, a
larger percentage of single-family loan originations were retained
in the portfolio rather than being sold due to the increased yield
available on such loans. During the current quarter, fixed-rate
one- to four-family mortgage loans totaling $3.41 million were sold
compared to $2.39 million for the preceding quarter and $11.61
million for the comparable quarter one year ago.
Investment Securities
Timberland’s investment securities and CDs held for investment
decreased $17.10 million, or 5%, to $336.66 million at June 30,
2023, from $353.77 million at March 31, 2023. The decrease was
primarily due to the sale of $8.86 million of available for sale
investment securities (for a gain of $95,000), maturities and
scheduled amortization.
Deposits
Total deposits increased $3.96 million during the quarter to
$1.55 billion at June 30, 2023, from $1.55 billion at March 31,
2022. The quarter’s increase consisted of a $65.20 million increase
in certificates of deposit balances (including an increase of
$38.32 million in brokered deposits). This increase was partially
offset by a $27.87 million decrease in savings account balance, a
$26.55 million decrease in non-interest bearing deposit balances,
$5.70 million decrease in NOW checking account balances, and a
$1.11 million decrease in money market account balances.
|
Deposit Breakdown($ in thousands) |
| |
June 30, 2023 |
|
March 31, 2023 |
|
June 30, 2022 |
|
|
Amount |
|
|
Percent |
|
|
Amount |
|
|
Percent |
|
|
|
Amount |
|
|
Percent |
|
| Non-interest-bearing
demand |
$452,729 |
|
|
29 |
% |
|
$479,283 |
|
|
31 |
% |
|
|
$527,876 |
|
|
32 |
% |
| NOW checking |
397,761 |
|
|
26 |
|
|
403,463 |
|
|
26 |
|
|
|
474,217 |
|
|
29 |
|
| Savings |
241,651 |
|
|
16 |
|
|
269,522 |
|
|
17 |
|
|
|
279,592 |
|
|
17 |
|
| Money market |
209,276 |
|
|
13 |
|
|
210,390 |
|
|
14 |
|
|
|
256,984 |
|
|
15 |
|
| Certificates of deposit under
$250 |
148,142 |
|
|
10 |
|
|
129,331 |
|
|
8 |
|
|
|
102,752 |
|
|
6 |
|
| Certificates of deposit $250
and over |
64,849 |
|
|
4 |
|
|
56,778 |
|
|
4 |
|
|
|
22,693 |
|
|
1 |
|
| Certificates of deposit –
brokered |
38,322 |
|
|
2 |
|
|
-- |
|
|
-- |
|
|
|
-- |
|
|
-- |
|
|
Total deposits |
$1,552,730 |
|
|
100 |
% |
|
$1,548,767 |
|
|
100 |
% |
|
|
$1,664,114 |
|
|
100 |
% |
Borrowings
Total borrowings increased to $15.00 million at June 30, 2023,
as the Company utilized borrowings to supplement on-balance sheet
liquidity during the current quarter. At June 30, 2023, the
borrowings consisted of three-year FHLB borrowings with a weighted
average rate of 3.95%.
Shareholders’ Equity and Capital
Ratios
Total shareholders’ equity increased $1.60 million, or 1%, to
$229.26 million at June 30, 2023, from $227.66 million at March 31,
2023. The increase in shareholders’ equity was primarily due to net
income of $6.31 million for the quarter and $17,000 from the
exercise of stock options, which was partially offset by the
payment of $1.88 million in dividends to shareholders and the
repurchase of 110,000 shares of common stock for $2.67 million (an
average price of $24.31 per share).
Timberland remains well capitalized with a total
risk-based capital ratio of 19.36%, a Tier 1 leverage capital ratio
of 12.27%, a tangible common equity to tangible assets ratio
(non-GAAP) of 11.91%, and a shareholders’ equity to total assets
ratio of 12.68% at June 30, 2023. Timberland’s held to maturity
investment securities were $275.05 million at June 30, 2023, with a
net unrealized loss of $14.59 million (pre-tax). Although not
permitted by U.S. Generally Accepted Accounting Principles
(“GAAP”), including these unrealized losses in accumulated other
comprehensive income (loss) (“AOCI”) would result in a ratio of
shareholders’ equity to total assets of 12.04%, compared to 12.68%,
as reported.
New Stock Repurchase Program
The Company announced a new stock repurchase program today.
Under the repurchase program, the Company may repurchase up to 5%
of the Company’s outstanding shares, or 404,708 shares. The new
stock repurchase program replaces the existing stock repurchase
program which had 74,212 shares available to be repurchased.
The repurchase program permits shares to be repurchased in open
market or private transactions, through block trades, and pursuant
to any trading plan that may be adopted in accordance with Rule
10b5-1 of the Securities and Exchange Commission (“SEC”).
Repurchases will be made at management’s discretion at prices
management considers to be attractive and in the best interest of
both the Company and its shareholders, subject to the availability
of stock, general market conditions, the trading price of the
stock, alternative uses for capital, and the Company’s financial
performance. Open market purchases will be conducted in accordance
with the limitations set forth in Rule 10b-18 of the SEC and other
applicable legal requirements. The repurchase program may be
suspended, terminated, or modified at any time for any reason,
including market conditions, the cost of repurchasing the shares,
the availability of alternative investment opportunities,
liquidity, and other factors deemed appropriate. These factors may
also affect the timing and amount of share repurchases. The
repurchase program does not obligate the Company to purchase any
particular number of shares.
Asset Quality
Timberland’s non-performing assets to total assets
ratio improved to 0.09% at June 30, 2023 from 0.12% at March 31,
2023 and 0.13% at June 30, 2022. There were net charge-offs of
$1,000 for the current quarter, compared to net charge-offs of
$6,000 for the preceding quarter and no charge-offs for the
comparable quarter one year ago. Due primarily to loan portfolio
growth, a $610,000 provision for loan losses was made for the
quarter ended June 30, 2023 and a $475,000 provision for loan
losses was made for the quarter ended March 31, 2023. No provision
for loan losses was made during the quarter ended June 30,
2022.
The allowance for loan losses (“ALL”) as a
percentage of loans receivable was 1.20% at June 30, 2023, compared
to 1.20% at March 31, 2023 and 1.22% 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 $203,000 at June
30, 2023. The allowance for loan losses to loans receivable
(excluding SBA PPP loan balances and the remaining aggregate
balance of the loans acquired in the South Sound Acquisition) was
1.21% (non-GAAP) at June 30, 2023.
The following table details the ALL as a percentage
of loans receivable:
| |
June 30, |
|
|
March 31, |
|
|
June 30, |
|
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
| ALL to loans receivable |
1.20 |
% |
|
1.20 |
% |
|
1.22 |
% |
| ALL to loans receivable
(excluding SBA PPP loans) (non-GAAP) |
1.20 |
% |
|
1.20 |
% |
|
1.22 |
% |
| ALL to loans receivable
(excluding SBA PPP loans and South Sound Acquisition loans)
(non-GAAP) |
1.21 |
% |
|
1.21 |
% |
|
1.25 |
% |
Total delinquent loans (past due 30 days or more)
and non-accrual loans decreased $689,000 or 27%, to $1.84 million
at June 30, 2023, from $2.53 million one year ago, and decreased
$348,000, or 16%, from $2.19 million at March 31, 2023. Non-accrual
loans decreased $705,000, or 31%, to $1.59 million at June 30,
2023, from $2.29 million one year ago, and decreased $383,000, or
19%, from $1.97 million at March 31, 2023.
Non-Accrual Loans($ in
thousands)
| |
June 30, 2023 |
|
March 31, 2023 |
|
June 30, 2022 |
| |
Amount |
|
Quantity |
|
Amount |
|
Quantity |
|
Amount |
|
Quantity |
| Mortgage loans: |
|
|
|
|
|
|
|
|
|
|
|
|
One- to four-family |
$373 |
|
2 |
|
$378 |
|
2 |
|
$393 |
|
2 |
|
Commercial |
|
686 |
|
2 |
|
|
694 |
|
2 |
|
|
671 |
|
2 |
|
Land |
|
54 |
|
1 |
|
|
362 |
|
1 |
|
|
651 |
|
3 |
|
Total mortgage loans |
|
1,113 |
|
5 |
|
|
1,434 |
|
5 |
|
|
1,715 |
|
7 |
| |
|
|
|
|
|
|
|
|
|
|
|
| Consumer loans: |
|
|
|
|
|
|
|
|
|
|
|
|
Home equity and second |
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage |
|
184 |
|
1 |
|
|
241 |
|
2 |
|
|
260 |
|
2 |
|
Other |
|
-- |
|
1 |
|
|
1 |
|
1 |
|
|
4 |
|
1 |
|
Total consumer loans |
|
184 |
|
2 |
|
|
242 |
|
3 |
|
|
264 |
|
3 |
| |
|
|
|
|
|
|
|
|
|
|
|
| Commercial business loans |
|
289 |
|
4 |
|
|
293 |
|
4 |
|
|
312 |
|
6 |
| Total loans |
$1,586 |
|
11 |
|
$1,969 |
|
12 |
|
$2,291 |
|
16 |
Acquisition of South Sound BankOn
October 1, 2018, the Company completed the acquisition of South
Sound Bank, a Washington-state chartered bank, headquartered in
Olympia, Washington (“South Sound Acquisition”). The Company
acquired 100% of the outstanding common stock of South Sound Bank,
and South Sound Bank was merged into Timberland Bank and the
Company. Pursuant to the terms of the merger agreement, South Sound
Bank shareholders received 0.746 of a share of the Company’s common
stock and $5.68825 in cash per share of South Sound Bank common
stock. The Company issued 904,826 shares of its common stock
(valued at $28,267,000 based on the Company’s closing stock price
on September 30, 2018 of $31.24 per share) and paid $6,903,000 in
cash in the transaction for total consideration paid of
$35,170,000.
About Timberland Bancorp, Inc. Timberland
Bancorp, Inc., a Washington corporation, is the holding company for
Timberland Bank. The Bank opened for business in 1915 and primarily
serves consumers and businesses across Grays Harbor, Thurston,
Pierce, King, Kitsap and Lewis counties, Washington with a full
range of lending and deposit services through its 23 branches
(including its main office in Hoquiam).
Disclaimer
Certain matters discussed in this press release may contain
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements relate
to our financial condition, results of operations, plans,
objectives, future performance or business. Forward-looking
statements are not statements of historical fact, are based on
certain assumptions and often include the words "believes,"
"expects," "anticipates," "estimates," "forecasts," "intends,"
"plans," "targets," "potentially," "probably," "projects,"
"outlook" or similar expressions or future or conditional verbs
such as "may," "will," "should," "would" and "could."
Forward-looking statements include statements with respect to our
beliefs, plans, objectives, goals, expectations, assumptions and
statements about future economic performance. These forward-looking
statements are subject to known and unknown risks, uncertainties
and other factors that could cause our actual results to differ
materially from the results anticipated or implied by our
forward-looking statements, including, but not limited to:
potential adverse impacts to economic conditions in our local
market areas, other markets where the Company has lending
relationships, or other aspects of the Company's business
operations or financial markets, including, without limitation, as
a result of employment levels, labor shortages and the effects of
inflation, a potential recession or slowed economic growth caused
by increasing political instability from acts of war including
Russia's invasion of Ukraine, as well as increasing oil prices and
supply chain disruptions, and any governmental or societal
responses to novel coronavirus disease 2019 ("COVID-19") pandemic,
including the possibility of new COVID-19 variants; credit risks of
lending activities, including changes in the level and trend of
loan delinquencies and write-offs and changes in our allowance for
loan losses and provision for loan losses that may be impacted by
deterioration in the housing and commercial real estate markets
which may lead to increased losses and non-performing loans in our
loan portfolio may result in our allowance for loan losses not
being adequate to cover actual losses, and require us to materially
increase our loan loss reserves; changes in general economic
conditions, either nationally or in our market areas; changes in
the levels of general interest rates, and the relative differences
between short and long-term interest rates, deposit interest rates,
our net interest margin and funding sources; uncertainty regarding
the future of the London Interbank Offered Rate ("LIBOR"), and the
transition away from LIBOR toward new interest rate benchmarks;
fluctuations in the demand for loans, the number of unsold homes,
land and other properties and fluctuations in real estate values in
our market areas; secondary market conditions for loans and our
ability to sell loans in the secondary market; results of
examinations of us by the Federal Reserve and of our bank
subsidiary by the Federal Deposit Insurance Corporation, the
Washington State Department of Financial Institutions, Division of
Banks or other regulatory authorities, including the possibility
that any such regulatory authority may, among other things,
institute a formal or informal enforcement action against us or our
bank subsidiary which could require us to increase our allowance
for loan losses, write-down assets, change our regulatory capital
position or affect our ability to borrow funds or maintain or
increase deposits or impose additional requirements or restrictions
on us, any of which could adversely affect our liquidity and
earnings; legislative or regulatory changes that adversely affect
our business including changes in banking, securities and tax law,
in regulatory policies and principles, or the interpretation of
regulatory capital or other rules and including changes as a result
of COVID-19; our ability to attract and retain deposits; our
ability to control operating costs and expenses; the use of
estimates in determining fair value of certain of our assets, which
estimates may prove to be incorrect and result in significant
declines in valuation; difficulties in reducing risks associated
with the loans in our consolidated balance sheet; staffing
fluctuations in response to product demand or the implementation of
corporate strategies that affect our work force and potential
associated charges; disruptions, security breaches, or other
adverse events, failures or interruptions in, or attacks on, our
information technology systems or on the third-party vendors who
perform several of our critical processing functions; our ability
to retain key members of our senior management team; costs and
effects of litigation, including settlements and judgments; our
ability to implement our business strategies; our ability to manage
loan delinquency rates; increased competitive pressures among
financial services companies; changes in consumer spending,
borrowing and savings habits; the availability of resources to
address changes in laws, rules, or regulations or to respond to
regulatory actions; our ability to pay dividends on our common
stock; the quality and composition of our securities portfolio and
the impact if any adverse changes in the securities markets,
including on market liquidity; inability of key third-party
providers to perform their obligations to us; changes in accounting
policies and practices, as may be adopted by the financial
institution regulatory agencies or the Financial Accounting
Standards Board ("FASB"), including additional guidance and
interpretation on accounting issues and details of the
implementation of new accounting methods; the economic impact of
climate change, severe weather events, natural disasters,
pandemics, epidemics and other public health crises, acts of war or
terrorism, and other external events on our business; other
economic, competitive, governmental, regulatory, and technological
factors affecting our operations, pricing, products and services
and other risks described in our reports filed with or furnished to
the Securities and Exchange Commission.
Any of the forward-looking statements that we make in this press
release and in the other public statements we make are based upon
management's beliefs and assumptions at the time they are made. We
do not undertake and specifically disclaim any obligation to
publicly update or revise any forward-looking statements included
in this press release to reflect the occurrence of anticipated or
unanticipated events or circumstances after the date of such
statements or to update the reasons why actual results could differ
from those contained in such statements, whether as a result of new
information, future events or otherwise. In light of these risks,
uncertainties and assumptions, the forward-looking statements
discussed in this document might not occur and we caution readers
not to place undue reliance on any forward-looking statements.
These risks could cause our actual results for fiscal 2023 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) |
June 30, |
|
March 31, |
|
June 30, |
| |
|
2023 |
|
|
|
2023 |
|
|
2022 |
|
| |
Interest and dividend
income |
|
|
|
|
|
|
|
Loans receivable |
$ |
16,215 |
|
|
$ |
14,950 |
|
$ |
12,628 |
|
| |
Investment securities |
|
2,384 |
|
|
|
2,460 |
|
|
1,016 |
|
| |
Dividends from mutual funds,
FHLB stock and other investments |
|
70 |
|
|
|
64 |
|
|
25 |
|
| |
Interest bearing deposits in
banks |
|
1,220 |
|
|
|
1,913 |
|
|
958 |
|
| |
Total interest and dividend income |
|
19,889 |
|
|
|
19,387 |
|
|
14,627 |
|
| |
|
|
|
|
|
|
| |
Interest
expense |
|
|
|
|
|
| |
Deposits |
|
3,123 |
|
|
|
2,236 |
|
|
645 |
|
| |
Borrowings |
|
132 |
|
|
|
-- |
|
|
-- |
|
| |
Total interest expense |
|
3,255 |
|
|
|
2,236 |
|
|
645 |
|
| |
Net interest income |
|
16,634 |
|
|
|
17,151 |
|
|
13,982 |
|
| |
Provision for loan
losses |
|
610 |
|
|
|
475 |
|
|
-- |
|
| |
Net interest income after provision for loan
losses |
|
16,024 |
|
|
|
16,676 |
|
|
13,982 |
|
| |
|
|
|
|
|
|
| |
Non-interest
income |
|
|
|
|
|
| |
Service charges on
deposits |
|
970 |
|
|
|
893 |
|
|
1,052 |
|
| |
ATM and debit card interchange
transaction fees |
|
1,335 |
|
|
|
1,275 |
|
|
1,345 |
|
| |
Gain on sales of loans,
net |
|
80 |
|
|
|
46 |
|
|
258 |
|
| |
Bank owned life insurance
(“BOLI”) net earnings |
|
157 |
|
|
|
157 |
|
|
151 |
|
| |
Gain on sale of investment
securities, net |
|
95 |
|
|
|
-- |
|
|
-- |
|
| |
Recoveries on investment
securities, net |
|
2 |
|
|
|
2 |
|
|
5 |
|
| |
Other |
|
236 |
|
|
|
263 |
|
|
291 |
|
| |
Total non-interest income, net |
|
2,875 |
|
|
|
2,636 |
|
|
3,102 |
|
| |
|
|
|
|
|
|
| |
Non-interest
expense |
|
|
|
|
|
| |
Salaries and employee
benefits |
|
5,860 |
|
|
|
6,046 |
|
|
5,243 |
|
| |
Premises and equipment |
|
1,010 |
|
|
|
1,001 |
|
|
904 |
|
| |
Gain on sale of premises and
equipment, net |
|
(32 |
) |
|
|
-- |
|
|
(6 |
) |
| |
Advertising |
|
179 |
|
|
|
178 |
|
|
187 |
|
| |
OREO and other repossessed
assets, net |
|
-- |
|
|
|
-- |
|
|
(2 |
) |
| |
ATM and debit card
processing |
|
491 |
|
|
|
489 |
|
|
515 |
|
| |
Postage and courier |
|
128 |
|
|
|
147 |
|
|
140 |
|
| |
State and local taxes |
|
297 |
|
|
|
298 |
|
|
265 |
|
| |
Professional fees |
|
577 |
|
|
|
473 |
|
|
580 |
|
| |
FDIC insurance expense |
|
191 |
|
|
|
202 |
|
|
123 |
|
| |
Loan administration and
foreclosure |
|
126 |
|
|
|
138 |
|
|
180 |
|
| |
Data processing and
telecommunications |
|
944 |
|
|
|
880 |
|
|
698 |
|
| |
Deposit operations |
|
430 |
|
|
|
246 |
|
|
316 |
|
| |
Amortization of core deposit
intangible (“CDI”) |
|
68 |
|
|
|
67 |
|
|
79 |
|
| |
Other, net |
|
658 |
|
|
|
779 |
|
|
652 |
|
| |
Total non-interest expense, net |
|
10,927 |
|
|
|
10,944 |
|
|
9,874 |
|
| |
|
|
|
|
|
|
| |
Income before income
taxes |
|
7,972 |
|
|
|
8,368 |
|
|
7,210 |
|
| |
Provision for income
taxes |
|
1,666 |
|
|
|
1,705 |
|
|
1,472 |
|
| |
Net income |
$ |
6,306 |
|
|
$ |
6,663 |
|
$ |
5,738 |
|
| |
|
|
|
|
|
|
| |
Net income per common
share: |
|
|
|
|
|
| |
Basic |
$ |
0.77 |
|
|
$ |
0.81 |
|
$ |
0.69 |
|
| |
Diluted |
|
0.77 |
|
|
|
0.80 |
|
|
0.69 |
|
| |
|
|
|
|
|
|
| |
Weighted average
common shares outstanding: |
|
|
|
|
|
| |
Basic |
|
8,156,831 |
|
|
|
8,220,532 |
|
|
8,279,436 |
|
| |
Diluted |
|
8,213,975 |
|
|
|
8,304,370 |
|
|
8,349,859 |
|
| TIMBERLAND
BANCORP INC. AND SUBSIDIARYCONSOLIDATED STATEMENTS
OF INCOME |
Nine Months Ended |
| ($ in thousands,
except per share amounts) (unaudited) |
June 30, |
|
June 30, |
| |
|
2023 |
|
|
|
2022 |
|
| |
Interest and dividend
income |
|
|
|
|
|
Loans receivable |
$ |
45,622 |
|
|
$ |
37,870 |
|
| |
Investment securities |
|
7,058 |
|
|
|
2,012 |
|
| |
Dividends from mutual funds,
FHLB stock and other investments |
|
185 |
|
|
|
80 |
|
| |
Interest bearing deposits in
banks |
|
5,524 |
|
|
|
1,528 |
|
| |
Total interest and dividend income |
|
58,389 |
|
|
|
41,490 |
|
| |
|
|
|
|
| |
Interest
expense |
|
|
|
| |
Deposits |
|
6,729 |
|
|
|
1,902 |
|
| |
Borrowings |
|
132 |
|
|
|
17 |
|
| |
Total interest expense |
|
6,861 |
|
|
|
1,919 |
|
| |
Net interest income |
|
51,528 |
|
|
|
39,571 |
|
| |
Provision for loan
losses |
|
1,610 |
|
|
|
-- |
|
| |
Net interest income after provision for loan
losses |
|
49,918 |
|
|
|
39,571 |
|
| |
|
|
|
|
| |
Non-interest
income |
|
|
|
| |
Service charges on
deposits |
|
2,810 |
|
|
|
2,979 |
|
| |
ATM and debit card interchange
transaction fees |
|
3,861 |
|
|
|
3,868 |
|
| |
Gain on sales of loans,
net |
|
147 |
|
|
|
1,337 |
|
| |
Bank owned life insurance
(“BOLI”) net earnings |
|
470 |
|
|
|
457 |
|
| |
Valuation recovery on loan
servicing rights, net |
|
-- |
|
|
|
119 |
|
| |
Gain on sale of investment
securities, net |
|
95 |
|
|
|
-- |
|
| |
Recoveries on investment
securities, net |
|
7 |
|
|
|
16 |
|
| |
Other |
|
826 |
|
|
|
851 |
|
| |
Total non-interest income, net |
|
8,216 |
|
|
|
9,627 |
|
| |
|
|
|
|
| |
|
|
|
|
| |
Salaries and employee
benefits |
|
17,806 |
|
|
|
15,606 |
|
| |
Premises and equipment |
|
2,935 |
|
|
|
2,814 |
|
| |
Gain on sales of premises and
equipment, net |
|
(32 |
) |
|
|
-- |
|
| |
Advertising |
|
551 |
|
|
|
513 |
|
| |
OREO and other repossessed
assets, net |
|
1 |
|
|
|
(18 |
) |
| |
ATM and debit card
processing |
|
1,463 |
|
|
|
1,429 |
|
| |
Postage and courier |
|
397 |
|
|
|
440 |
|
| |
State and local taxes |
|
894 |
|
|
|
754 |
|
| |
Professional fees |
|
1,479 |
|
|
|
1,173 |
|
| |
FDIC insurance expense |
|
517 |
|
|
|
377 |
|
| |
Loan administration and
foreclosure |
|
385 |
|
|
|
380 |
|
| |
Data processing and
telecommunications |
|
2,612 |
|
|
|
1,980 |
|
| |
Deposit operations |
|
1,022 |
|
|
|
878 |
|
| |
Amortization of CDI |
|
203 |
|
|
|
237 |
|
| |
Other, net |
|
2,173 |
|
|
|
1,909 |
|
| |
Total non-interest expense, net |
|
32,406 |
|
|
|
28,472 |
|
| |
|
|
|
|
| |
Income before income
taxes |
|
25,728 |
|
|
|
20,726 |
|
| |
Provision for income
taxes |
|
5,252 |
|
|
|
4,176 |
|
| |
Net income |
$ |
20,476 |
|
|
$ |
16,550 |
|
| |
|
|
|
|
| |
Net income per common
share: |
|
|
|
| |
Basic |
$ |
2.50 |
|
|
$ |
1.99 |
|
| |
Diluted |
|
2.47 |
|
|
|
1.97 |
|
| |
|
|
|
|
| |
Weighted average
common shares outstanding: |
|
|
|
| |
Basic |
|
8,203,255 |
|
|
|
8,324,371 |
|
| |
Diluted |
|
8,279,079 |
|
|
|
8,406,977 |
|
| TIMBERLAND
BANCORP INC. AND SUBSIDIARYCONSOLIDATED BALANCE
SHEETS |
|
| ($ in thousands,
except per share amounts) (unaudited) |
June 30, |
|
March 31, |
|
June 30, |
| |
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Assets |
|
|
|
|
|
| Cash and due from
financial institutions |
$ |
28,308 |
|
|
$ |
26,015 |
|
|
$ |
23,610 |
|
| Interest-bearing
deposits in banks |
|
101,645 |
|
|
|
116,468 |
|
|
|
398,541 |
|
|
|
Total cash and cash equivalents |
|
129,953 |
|
|
|
142,483 |
|
|
|
422,151 |
|
| |
|
|
|
|
|
|
| Certificates of
deposit (“CDs”) held for investment, at cost |
|
16,931 |
|
|
|
20,168 |
|
|
|
23,888 |
|
| Investment
securities: |
|
|
|
|
|
| |
Held to maturity, at amortized
cost |
|
275,053 |
|
|
|
277,911 |
|
|
|
228,196 |
|
| |
Available for sale, at fair
value |
|
43,842 |
|
|
|
54,838 |
|
|
|
45,141 |
|
| Investments in
equity securities, at fair value |
|
837 |
|
|
|
850 |
|
|
|
872 |
|
| FHLB stock |
|
2,802 |
|
|
|
2,202 |
|
|
|
2,194 |
|
| Other investments,
at cost |
|
3,000 |
|
|
|
3,000 |
|
|
|
3,000 |
|
| Loans held for
sale |
|
-- |
|
|
|
200 |
|
|
|
700 |
|
| |
|
|
|
|
|
| Loans
receivable |
|
1,275,954 |
|
|
|
1,224,891 |
|
|
|
1,101,400 |
|
| Less: Allowance
for loan losses |
|
(15,307 |
) |
|
|
(14,698 |
) |
|
|
(13,433 |
) |
| |
Net loans receivable |
|
1,260,647 |
|
|
|
1,210,193 |
|
|
|
1,087,967 |
|
| |
|
|
|
|
|
|
| Premises and
equipment, net |
|
21,574 |
|
|
|
21,744 |
|
|
|
22,154 |
|
| BOLI |
|
23,276 |
|
|
|
23,119 |
|
|
|
22,649 |
|
| Accrued interest
receivable |
|
5,451 |
|
|
|
5,295 |
|
|
|
4,319 |
|
| Goodwill |
|
15,131 |
|
|
|
15,131 |
|
|
|
15,131 |
|
| CDI |
|
745 |
|
|
|
813 |
|
|
|
1,027 |
|
| Loan servicing
rights, net |
|
2,321 |
|
|
|
2,535 |
|
|
|
3,220 |
|
| Operating lease
right-of-use assets |
|
1,845 |
|
|
|
1,844 |
|
|
|
2,051 |
|
| Other assets |
|
4,305 |
|
|
|
4,292 |
|
|
|
3,135 |
|
| |
Total
assets |
$ |
1,807,713 |
|
|
$ |
1,786,618 |
|
|
$ |
1,887,795 |
|
| |
|
|
|
|
|
|
|
Liabilities and shareholders’ equity |
|
|
|
|
|
| Deposits:
Non-interest-bearing demand |
$ |
452,729 |
|
|
$ |
479,283 |
|
|
$ |
527,876 |
|
| Deposits:
Interest-bearing |
|
1,100,001 |
|
|
|
1,069,484 |
|
|
|
1,136,238 |
|
| |
Total deposits |
|
1,552,730 |
|
|
|
1,548,767 |
|
|
|
1,664,114 |
|
| |
|
|
|
|
|
|
| Operating lease
liabilities |
|
1,939 |
|
|
|
1,935 |
|
|
|
2,135 |
|
| FHLB
borrowings |
|
15,000 |
|
|
|
-- |
|
|
|
-- |
|
| Other liabilities
and accrued expenses |
|
8,781 |
|
|
|
8,255 |
|
|
|
7,227 |
|
| |
Total
liabilities |
|
1,578,450 |
|
|
|
1,558,957 |
|
|
|
1,673,476 |
|
|
|
|
|
|
|
|
|
Shareholders’ equity |
|
|
|
|
|
|
Common stock, $.01 par value; 50,000,000 shares
authorized;
8,094,174 shares issued and outstanding – June 30,
2023
8,203,174 shares issued and outstanding – March 31,
2023
8,249,448 shares issued and outstanding – June 30, 2022 |
|
35,401 |
|
|
|
37,979 |
|
|
|
39,585 |
|
| Retained
earnings |
|
194,606 |
|
|
|
190,177 |
|
|
|
175,299 |
|
| Accumulated other
comprehensive loss |
|
(744 |
) |
|
|
(495 |
) |
|
|
(565 |
) |
| |
Total shareholders’
equity |
|
229,263 |
|
|
|
227,661 |
|
|
|
214,319 |
|
| |
Total liabilities and
shareholders’ equity |
$ |
1,807,713 |
|
|
$ |
1,786,618 |
|
|
$ |
1,887,795 |
|
| KEY FINANCIAL RATIOS
AND DATA |
Three Months Ended |
| ($ in thousands, except per
share amounts) (unaudited) |
June 30, |
|
March 31, |
|
June 30, |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
| PERFORMANCE
RATIOS: |
|
|
|
|
|
| Return on average assets
(a) |
|
1.42 |
% |
|
|
1.48 |
% |
|
|
1.22 |
% |
| Return on average equity
(a) |
|
11.07 |
% |
|
|
11.86 |
% |
|
|
10.80 |
% |
| Net interest margin (a) |
|
3.94 |
% |
|
|
3.99 |
% |
|
|
3.11 |
% |
| Efficiency ratio |
|
56.01 |
% |
|
|
55.31 |
% |
|
|
57.80 |
% |
| |
|
|
|
|
|
| |
Nine Months Ended |
| |
|
| |
June 30, |
|
|
|
June 30, |
| |
|
2023 |
|
|
|
|
|
2022 |
|
| PERFORMANCE
RATIOS: |
|
|
|
|
|
| Return on average assets
(a) |
|
1.51 |
% |
|
|
|
|
1.19 |
% |
| Return on average equity
(a) |
|
12.17 |
% |
|
|
|
|
10.48 |
% |
| Net interest margin (a) |
|
3.99 |
% |
|
|
|
|
2.99 |
% |
| Efficiency ratio |
|
54.24 |
% |
|
|
|
|
57.87 |
% |
| |
|
|
|
|
|
| ASSET QUALITY RATIOS
AND DATA: |
|
|
|
|
|
| Non-accrual loans |
$ |
1,586 |
|
|
$ |
1,969 |
|
|
$ |
2,291 |
|
| Loans past due 90 days and
still accruing |
|
-- |
|
|
|
-- |
|
|
|
-- |
|
| Non-performing investment
securities |
|
87 |
|
|
|
93 |
|
|
|
114 |
|
| OREO and other repossessed
assets |
|
-- |
|
|
|
-- |
|
|
|
-- |
|
| Total non-performing assets
(b) |
$ |
1,673 |
|
|
$ |
2,062 |
|
|
$ |
2,405 |
|
| |
|
|
|
|
|
| Non-performing assets to total
assets (b) |
|
0.09 |
% |
|
|
0.12 |
% |
|
|
0.13 |
% |
| Net charge-offs (recoveries)
during quarter |
$ |
1 |
|
|
$ |
6 |
|
|
$ |
-- |
|
| ALL to non-accrual loans, |
|
965.13 |
% |
|
|
746.47 |
% |
|
|
586.33 |
% |
| ALL to loans receivable
(c) |
|
1.20 |
% |
|
|
1.20 |
% |
|
|
1.22 |
% |
| ALL to loans receivable
(excluding SBA PPP loans) (d) (non-GAAP) |
|
1.20 |
% |
|
|
1.20 |
% |
|
|
1.22 |
% |
| ALL to loans receivable
(excluding SBA PPP loans and South Sound Acquisition loans) (d) (e)
(non-GAAP) |
|
1.21 |
% |
|
|
1.21 |
% |
|
|
1.25 |
% |
| Troubled debt restructured
loans on accrual status (f) |
$ |
2,604 |
|
|
$ |
2,550 |
|
|
$ |
2,484 |
|
|
|
|
|
|
|
|
|
CAPITAL RATIOS: |
|
|
|
|
|
| Tier 1 leverage capital |
|
12.27 |
% |
|
|
11.95 |
% |
|
|
10.72 |
% |
| Tier 1 risk-based capital |
|
18.11 |
% |
|
|
18.16 |
% |
|
|
18.57 |
% |
| Common equity Tier 1
risk-based capital |
|
18.11 |
% |
|
|
18.16 |
% |
|
|
18.57 |
% |
|
Total risk-based capital |
|
19.36 |
% |
|
|
19.41 |
% |
|
|
19.82 |
% |
| Tangible common equity to
tangible assets (non-GAAP) |
|
11.91 |
% |
|
|
11.96 |
% |
|
|
10.59 |
% |
| |
|
|
|
|
|
|
BOOK VALUES: |
|
|
|
|
|
| Book value per common
share |
$ |
28.32 |
|
|
$ |
27.75 |
|
|
$ |
25.98 |
|
| Tangible book value per common
share (g) |
|
26.36 |
|
|
|
25.81 |
|
|
|
24.02 |
|
________________________________________________
(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 $519, $572 and $1,320 at June 30, 2023, March 31, 2023 and
June 30, 2022, respectively.(e) Does not include loans acquired in
the South Sound Acquisition totaling $13,043, $13,917 and $21,431
at June 30, 2023, March 31, 2023 and June 30, 2022,
respectively.(f) Does not include troubled debt restructured loans
totaling $0, $50 and $158 reported as non-accrual loans at June 30,
2023, March 31, 2023 and June 30, 2022, respectively. (g) Tangible
common equity divided by common shares outstanding (non-GAAP).
AVERAGE BALANCES, YIELDS, AND RATES -
QUARTERLY ($ in thousands)(unaudited)
| |
For the Three Months Ended |
| |
June 30, 2023 |
|
March 31, 2023 |
|
June 30, 2022 |
|
|
|
Amount |
|
|
Rate |
|
|
|
Amount |
|
|
Rate |
|
|
|
Amount |
|
|
Rate |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loans receivable and loans
held for sale |
$ |
1,254,044 |
|
|
5.17 |
% |
|
$ |
1,200,872 |
|
|
4.98 |
% |
|
$ |
1,072,933 |
|
|
4.71 |
% |
| Investment securities and FHLB
stock (1) |
|
331,385 |
|
|
2.96 |
|
|
|
340,317 |
|
|
2.97 |
|
|
|
263,595 |
|
|
1.58 |
|
| Interest-earning deposits in
banks and CDs |
|
101,798 |
|
|
4.79 |
|
|
|
177,748 |
|
|
4.30 |
|
|
|
460,657 |
|
|
0.83 |
|
|
Total interest-earning assets |
|
1,687,227 |
|
|
4.72 |
|
|
|
1,718,937 |
|
|
4.51 |
|
|
|
1,797,185 |
|
|
3.26 |
|
| Other assets |
|
84,255 |
|
|
|
|
|
|
84,072 |
|
|
|
|
|
|
85,470 |
|
|
|
|
|
Total assets |
$ |
1,771,482 |
|
|
|
|
|
$ |
1,803,009 |
|
|
|
|
|
$ |
1,882,655 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Liabilities and
Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| NOW checking accounts |
$ |
387,426 |
|
|
1.02 |
% |
|
$ |
412,642 |
|
|
0.83 |
% |
|
$ |
462,085 |
|
|
0.14 |
% |
| Money market accounts |
|
205,023 |
|
|
0.84 |
|
|
|
218,718 |
|
|
0.68 |
|
|
|
258,240 |
|
|
0.30 |
|
| Savings accounts |
|
255,463 |
|
|
0.19 |
|
|
|
274,877 |
|
|
0.14 |
|
|
|
284,659 |
|
|
0.08 |
|
| Certificates of deposit
accounts |
|
210,950 |
|
|
3.03 |
|
|
|
170,547 |
|
|
2.22 |
|
|
|
125,132 |
|
|
0.75 |
|
|
Total interest-bearing deposits |
|
1,058,862 |
|
|
1.18 |
|
|
|
1,076,784 |
|
|
0.84 |
|
|
|
1,130,116 |
|
|
0.23 |
|
| Borrowings |
|
12,255 |
|
|
4.32 |
|
|
|
6 |
|
|
5.43 |
|
|
|
-- |
|
|
-- |
|
|
Total interest-bearing liabilities |
|
1,071,117 |
|
|
1.22 |
|
|
|
1,076,790 |
|
|
0.84 |
|
|
|
1,130,116 |
|
|
0.23 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Non-interest-bearing demand
deposits |
|
462,315 |
|
|
|
|
|
|
492,294 |
|
|
|
|
|
|
529,770 |
|
|
|
|
| Other liabilities |
|
10,199 |
|
|
|
|
|
|
9,136 |
|
|
|
|
|
|
10,170 |
|
|
|
|
| Shareholders’ equity |
|
227,851 |
|
|
|
|
|
|
224,789 |
|
|
|
|
|
|
212,599 |
|
|
|
|
|
Total liabilities and shareholders’ equity |
$ |
1,771,482 |
|
|
|
|
|
$ |
1,803,009 |
|
|
|
|
|
$ |
1,882,655 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread |
|
|
|
|
3.50 |
% |
|
|
|
|
|
3.67 |
% |
|
|
|
|
|
3.03 |
% |
|
Net interest margin (2) |
|
|
|
|
3.94 |
% |
|
|
|
|
|
3.99 |
% |
|
|
|
|
|
3.11 |
% |
|
Average interest-earning assets to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
average interest-bearing liabilities |
|
157.52 |
% |
|
|
|
|
|
159.64 |
% |
|
|
|
|
|
159.03 |
% |
|
|
|
_____________________________________(1) Includes other
investments(2) Net interest margin = annualized net interest income
/ average interest-earning assets
| |
For the Nine Months Ended |
|
|
June 30, 2023 |
|
June 30, 2022 |
|
|
|
Amount |
|
|
Rate |
|
|
|
Amount |
|
|
Rate |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loans receivable and loans
held for sale |
$ |
1,206,294 |
|
|
5.04 |
% |
|
$ |
1,033,173 |
|
|
4.89 |
% |
| Investment securities and FHLB
stock (1) |
|
333,659 |
|
|
2.89 |
|
|
|
211,671 |
|
|
1.32 |
|
| Interest-earning deposits in
banks and CDs |
|
182,312 |
|
|
4.04 |
|
|
|
517,323 |
|
|
0.39 |
|
|
Total interest-earning assets |
|
1,722,265 |
|
|
4.52 |
|
|
|
1,762,167 |
|
|
3.14 |
|
| Other assets |
|
84,167 |
|
|
|
|
|
|
84,426 |
|
|
|
|
|
Total assets |
$ |
1,806,432 |
|
|
|
|
|
$ |
1,846,593 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Liabilities and
Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
| NOW checking accounts |
$ |
413,372 |
|
|
0.75 |
% |
|
$ |
448,028 |
|
|
0.13 |
% |
| Money market accounts |
|
221,131 |
|
|
0.67 |
|
|
|
241,734 |
|
|
0.29 |
|
| Savings accounts |
|
270,076 |
|
|
0.15 |
|
|
|
275,684 |
|
|
0.08 |
|
| Certificates of deposit
accounts |
|
172,193 |
|
|
2.33 |
|
|
|
128,784 |
|
|
0.79 |
|
|
Total interest-bearing deposits |
|
1,076,772 |
|
|
0.84 |
|
|
|
1,094,230 |
|
|
0.23 |
|
| Borrowings |
|
4,087 |
|
|
4.32 |
|
|
|
1,909 |
|
|
1.19 |
|
|
Total interest-bearing liabilities |
|
1,080,859 |
|
|
0.85 |
|
|
|
1,096,139 |
|
|
0.23 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Non-interest-bearing demand
deposits |
|
491,404 |
|
|
|
|
|
|
530,038 |
|
|
|
|
| Other liabilities |
|
9,896 |
|
|
|
|
|
|
9,938 |
|
|
|
|
| Shareholders’ equity |
|
224,273 |
|
|
|
|
|
|
210,478 |
|
|
|
|
|
Total liabilities and shareholders’ equity |
$ |
1,806,432 |
|
|
|
|
|
$ |
1,846,593 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread |
|
|
|
|
3.67 |
% |
|
|
|
|
|
2.91 |
% |
|
Net interest margin (2) |
|
|
|
|
3.99 |
% |
|
|
|
|
|
2.99 |
% |
|
Average interest-earning assets to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
average interest-bearing liabilities |
|
159.34 |
% |
|
|
|
|
|
160.76 |
% |
|
|
|
_____________________________________(1) Includes other
investments(2) Net interest margin = annualized net interest income
/ average interest-earning assets
Non-GAAP Financial MeasuresIn addition to
results presented in accordance with GAAP, this press release
contains certain non-GAAP financial measures. Timberland believes
that certain non-GAAP financial measures provide investors with
information useful in understanding the Company’s financial
performance; however, readers of this report are urged to review
these non-GAAP financial measures in conjunction with GAAP results
as reported.
Financial measures that exclude intangible assets are non-GAAP
measures. To provide investors with a broader understanding of
capital adequacy, Timberland provides non-GAAP financial measures
for tangible common equity, along with the GAAP measure. Tangible
common equity is calculated as shareholders’ equity less goodwill
and CDI. In addition, tangible assets equal total assets less
goodwill and CDI.
The following table provides a reconciliation of ending
shareholders’ equity (GAAP) to ending tangible shareholders’ equity
(non-GAAP) and ending total assets (GAAP) to ending tangible assets
(non-GAAP).
|
($ in thousands) |
June 30, 2023 |
|
March 31, 2023 |
|
June 30, 2022 |
|
|
|
|
|
|
|
|
Shareholders’ equity |
$ |
229,263 |
|
|
$ |
227,661 |
|
|
$ |
214,319 |
|
|
Less goodwill and CDI |
|
(15,876 |
) |
|
|
(15,944 |
) |
|
|
(16,158 |
) |
|
Tangible common equity |
$ |
213,387 |
|
|
$ |
211,717 |
|
|
$ |
198,161 |
|
|
|
|
|
|
|
|
|
Total assets |
$ |
1,807,713 |
|
|
$ |
1,786,618 |
|
|
$ |
1,887,795 |
|
|
Less goodwill and CDI |
|
(15,876 |
) |
|
|
(15,944 |
) |
|
|
(16,158 |
) |
|
Tangible assets |
$ |
1,791,837 |
|
|
$ |
1,770,674 |
|
|
$ |
1,871,637 |
|
Contact:
Dean J. Brydon,
CEOJonathan A. Fischer, President &
COOMarci A. Basich, CFO(360)
533-4747www.timberlandbank.com
Timberland Bancorp (NASDAQ:TSBK)
Gráfica de Acción Histórica
De Oct 2024 a Nov 2024
Timberland Bancorp (NASDAQ:TSBK)
Gráfica de Acción Histórica
De Nov 2023 a Nov 2024
