Timberland Bancorp Reports Second Fiscal Quarter Net Income of $5.71 Million
- Timberland reported a decrease in net income for the first six months of fiscal 2024 compared to the same period in fiscal 2023.
- The net interest margin compressed in the second quarter due to increasing costs of funds.
- Loan portfolio growth slowed, with construction loan balances declining during the quarter.
- Operating revenue decreased primarily due to an increase in funding costs and a decrease in non-interest income.
- Total deposits increased, with money market and certificates of deposit balances offsetting decreases in checking account balances.
- The efficiency ratio increased for the current quarter compared to the preceding quarter and the comparable quarter one year ago.
- Total assets, net loans receivable, total deposits, and total shareholders' equity all increased year-over-year.
- Non-performing assets to total assets ratio increased slightly compared to the previous quarter.
- Total delinquent loans and non-accrual loans increased from the previous quarter.
- Timberland remains well capitalized with strong liquidity and capital ratios.
- Net income decreased for the first six months of fiscal 2024 compared to the same period in fiscal 2023.
- Loan origination volumes slowed during the quarter.
- Operating revenue decreased due to increased funding costs.
- Efficiency ratio increased for the current quarter.
- Non-performing assets to total assets ratio increased slightly.
- Total delinquent loans and non-accrual loans increased from the previous quarter.
Insights
Timberland Bancorp's reported decrease in net income for the second fiscal quarter, standing at
Undoubtedly, the company's acknowledgment of increased deposit costs eating into margins is a critical factor for potential investment consideration. Despite the growth in net loans and deposits by
The stability in asset quality, as indicated by a mere
Investors should note the positive liquidity position with
The increase in operating expenses and the efficiency ratio now at
From a retail investor's standpoint, the key takeaway would be Timberland's ability to manage growth amidst economic pressure. The bank's strategic adjustments, specifically in its loan portfolio, along with stable asset quality and liquidity, are critical points signaling resilience. Nonetheless, the pressure on margins and increased operational costs may require strategic responses that investors should watch for in future financial disclosures.
- Quarterly EPS of
$0.70 - Quarterly Return on Average Assets of
1.22% - Quarterly Net Interest Margin of
3.48% - Net Loans Increased by
12% Year-Over-Year - Deposits Increased by
6% Year-Over-Year - Announces Quarterly Cash Dividend
HOQUIAM, Wash., April 23, 2024 (GLOBE NEWSWIRE) -- Timberland Bancorp, Inc. (NASDAQ: TSBK) (“Timberland” or “the Company”), the holding company for Timberland Bank (the “Bank”), today reported net income of
For the first six months of fiscal 2024, Timberland’s net income decreased
“Our second quarter of fiscal year 2024 operating results were highlighted by solid earnings, moderate growth in loans and deposits, and continued stable asset quality metrics,” stated Dean Brydon, Chief Executive Officer. “While second quarter earnings and performance metrics were strong, they were lower compared to the year ago quarter, which was near the highest point of our margin in this interest rate cycle before deposit cost increases began compressing margins.”
As a result of Timberland’s solid earnings and strong capital position, its Board of Directors announced a quarterly cash dividend to shareholders to
“Our loan portfolio continues to grow, but not at the robust pace we’ve experienced during the past two years,” Brydon continued. “Construction loan balances declined during the quarter, in part due to construction projects completing and being transferred to permanent loan categories. Although loan origination volumes slowed during the quarter, net loans receivable increased by
“The net interest margin was
Earnings and Balance Sheet Highlights (at or for the periods ended March 31, 2024, compared to March 31, 2023, or December 31, 2023):
Earnings Highlights:
- Earnings per diluted common share (“EPS”) decreased
9% to$0.70 for the current quarter from$0.77 for the preceding quarter and decreased13% from$0.80 for the comparable quarter one year ago; EPS for the first six months of fiscal 2024 decreased14% to$1.47 from$1.70 for the first six months of fiscal 2023; - Net income decreased
9% to$5.71 million for the current quarter from$6.30 million for the preceding quarter and decreased14% from$6.66 million for the comparable quarter one year ago; Net income decreased15% to$12.00 million for the first six months of fiscal 2024 compared to$14.17 million for the first six months of fiscal 2023; - Return on average equity (“ROE”) and return on average assets (“ROA”) for the current quarter were
9.67% and1.22% , respectively; - Net interest margin (“NIM”) for the current quarter compressed to
3.48% from3.60% for the preceding quarter and from3.99% for the comparable quarter one year ago; and - The efficiency ratio for the current quarter was
60.22% compared to56.50% for the preceding quarter and55.31% for the comparable quarter one year ago.
Balance Sheet Highlights:
- Total assets increased
1% from the prior quarter and increased7% year-over-year; - Net loans receivable increased
2% from the prior quarter and increased12% year-over-year; - Total deposits increased
1% from the prior quarter and increased6% year-over-year; - Total shareholders’ equity increased
1% from the prior quarter and increased5% year-over-year; - Non-performing assets to total assets ratio was
0.19% at March 31, 2024 compared to0.18% at December 31, 2023 and0.12% at March 31, 2023; - Book and tangible book (non-GAAP) values per common share increased to
$29.75 and$27.79 , respectively, at March 31, 2024; and - Liquidity (both on-balance sheet and off-balance sheet) remained strong at March 31, 2024 with only
$20 million in borrowings and additional secured borrowing line capacity of$707 million available through the Federal Home Loan Bank (“FHLB”) and the Federal Reserve.
Operating Results
Operating revenue (net interest income before the provision for credit losses plus non-interest income) for the current quarter decreased
Net interest income decreased
A
Non-interest income decreased
Total operating (non-interest) expenses for the current quarter increased
The provision for income taxes for the current quarter decreased
Balance Sheet Management
Total assets increased
Liquidity
Timberland has maintained a strong liquidity position (both on-balance sheet and off-balance sheet) while continuing to grow the loan portfolio. Liquidity, as measured by the sum of cash and cash equivalents, CDs held for investment, and available for sale investment securities, was
Loans
Net loans receivable increased
| Loan Portfolio ($ in thousands) | |||||||||||||||||||||||||
| March 31, 2024 | December 31, 2023 | March 31, 2023 | |||||||||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||||||
| Mortgage loans: | |||||||||||||||||||||||||
| One- to four-family (a) | $ | 276,433 | 19 | % | $ | 263,122 | 18 | % | $ | 216,639 | 16 | % | |||||||||||||
| Multi-family | 167,275 | 12 | 147,321 | 10 | 103,870 | 8 | |||||||||||||||||||
| Commercial | 577,373 | 40 | 579,038 | 40 | 547,876 | 41 | |||||||||||||||||||
| Construction - custom and owner/builder | 122,988 | 8 | 134,878 | 9 | 124,071 | 9 | |||||||||||||||||||
| Construction - speculative one-to four-family | 16,407 | 1 | 17,609 | 1 | 11,343 | 1 | |||||||||||||||||||
| Construction - commercial | 32,318 | 2 | 36,702 | 3 | 31,458 | 3 | |||||||||||||||||||
| Construction - multi-family | 36,795 | 3 | 57,019 | 4 | 83,051 | 6 | |||||||||||||||||||
| Construction - land development | 16,051 | 1 | 18,878 | 1 | 17,018 | 1 | |||||||||||||||||||
| Land | 31,821 | 2 | 28,697 | 2 | 24,520 | 2 | |||||||||||||||||||
| Total mortgage loans | 1,277,461 | 88 | 1,283,264 | 88 | 1,159,846 | 87 | |||||||||||||||||||
| Consumer loans: | |||||||||||||||||||||||||
| Home equity and second mortgage | 42,357 | 3 | 39,403 | 3 | 36,896 | 3 | |||||||||||||||||||
| Other | 2,925 | -- | 2,926 | -- | 2,283 | -- | |||||||||||||||||||
| Total consumer loans | 45,282 | 3 | 42,329 | 3 | 39,179 | 3 | |||||||||||||||||||
| Commercial loans: | |||||||||||||||||||||||||
| Commercial business loans | 135,505 | 9 | 136,942 | 9 | 129,306 | 10 | |||||||||||||||||||
| SBA PPP loans | 367 | -- | 423 | -- | 572 | -- | |||||||||||||||||||
| Total commercial loans | 135,872 | 9 | 137,365 | 9 | 129,878 | 10 | |||||||||||||||||||
| Total loans | 1,458,615 | 100 | % | 1,462,958 | 100 | % | 1,328,903 | 100 | % | ||||||||||||||||
| Less: | |||||||||||||||||||||||||
| Undisbursed portion of construction loans in process | (77,502 | ) | (104,683 | ) | (99,253 | ) | |||||||||||||||||||
| Deferred loan origination fees | (5,179 | ) | (5,337 | ) | (4,759 | ) | |||||||||||||||||||
| Allowance for credit losses | (16,818 | ) | (16,655 | ) | (14,698 | ) | |||||||||||||||||||
| Total loans receivable, net | $ | 1,359,116 | $ | 1,336,283 | $ | 1,210,193 | |||||||||||||||||||
_______________________
(a) Does not include one- to four-family loans held for sale totaling
The following table provides a breakdown of commercial real estate (“CRE”) mortgage loans by collateral type as of March 31, 2024:
| CRE Loan Portfolio Breakdown by Collateral ($ in thousands) | ||||||||||||||||||
| Collateral Type | Balance | Percent of CRE Portfolio | Percent of Total Loan Portfolio | Average Balance Per Loan | Non- Accrual | |||||||||||||
| Industrial warehouse | $ | 112,318 | 20 | % | 8 | % | $ | 1,123 | $ | 195 | ||||||||
| Medical/dental offices | 81,335 | 14 | 6 | 1,291 | -- | |||||||||||||
| Office buildings | 71,518 | 12 | 5 | 777 | -- | |||||||||||||
| Other retail buildings | 51,422 | 9 | 3 | 547 | -- | |||||||||||||
| Mini-storage | 39,228 | 7 | 3 | 1,453 | -- | |||||||||||||
| Hotel/motel | 31,713 | 5 | 2 | 2,883 | -- | |||||||||||||
| Restaurants | 27,583 | 5 | 2 | 563 | -- | |||||||||||||
| Gas stations/conv. stores | 20,977 | 4 | 1 | 912 | -- | |||||||||||||
| Nursing homes | 18,630 | 3 | 1 | 2,329 | -- | |||||||||||||
| Mobile home parks | 10,869 | 2 | 1 | 494 | -- | |||||||||||||
| Shopping centers | 10,854 | 2 | 1 | 1,809 | -- | |||||||||||||
| Churches | 6,976 | 1 | 1 | 498 | -- | |||||||||||||
| Additional CRE | 93,950 | 16 | 6 | 706 | 954 | |||||||||||||
| Total CRE | $ | 577,373 | 100 | % | 40 | % | $ | 899 | $ | 1,149 | ||||||||
Timberland originated
Investment Securities
Timberland’s investment securities and CDs held for investment decreased
Deposits
Total deposits increased
| Deposit Breakdown ($ in thousands) | |||||||||||||||||||
| March 31, 2024 | December 31, 2023 | March 31, 2023 | |||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||
| Non-interest-bearing demand | 26 | % | 27 | % | 31 | % | |||||||||||||
| NOW checking | 336,621 | 20 | 389,463 | 24 | 403,463 | 26 | |||||||||||||
| Savings | 211,085 | 13 | 215,948 | 13 | 269,522 | 17 | |||||||||||||
| Money market | 311,994 | 19 | 269,686 | 17 | 210,390 | 14 | |||||||||||||
| Certificates of deposit under | 190,762 | 12 | 181,762 | 11 | 129,331 | 8 | |||||||||||||
| Certificates of deposit | 118,698 | 7 | 96,145 | 6 | 56,778 | 4 | |||||||||||||
| Certificates of deposit – brokered | 44,488 | 3 | 41,000 | 2 | -- | -- | |||||||||||||
| Total deposits | 100 | % | 100 | % | 100 | % | |||||||||||||
Borrowings
Total borrowings were
Shareholders’ Equity and Capital Ratios
Total shareholders’ equity increased
Timberland remains well capitalized with a total risk-based capital ratio of
Asset Quality
Timberland’s non-performing assets to total assets ratio was
Total delinquent loans (past due 30 days or more) and non-accrual loans increased
| Non-Accrual Loans ($ in thousands) | ||||||||||||||||||
| March 31, 2024 | December 31, 2023 | March 31, 2023 | ||||||||||||||||
| Amount | Quantity | Amount | Quantity | Amount | Quantity | |||||||||||||
| Mortgage loans: | ||||||||||||||||||
| One- to four-family | $ | 380 | 3 | $ | 602 | 4 | $ | 378 | 2 | |||||||||
| Commercial | 1,149 | 3 | 683 | 2 | 694 | 2 | ||||||||||||
| Construction – custom and owner/builder | 152 | 1 | 150 | 1 | -- | -- | ||||||||||||
| Land | -- | -- | -- | -- | 362 | 1 | ||||||||||||
| Total mortgage loans | 1,681 | 7 | 1,435 | 7 | 1,434 | 5 | ||||||||||||
| Consumer loans: | ||||||||||||||||||
| Home equity and second mortgage | 165 | 1 | 171 | 1 | 241 | 2 | ||||||||||||
| Other | -- | -- | -- | -- | 1 | 1 | ||||||||||||
| Total consumer loans | 165 | 1 | 171 | 1 | 242 | 3 | ||||||||||||
| Commercial business loans | 1,759 | 6 | 1,760 | 6 | 293 | 4 | ||||||||||||
| Total loans | $ | 3,605 | 14 | $ | 3,366 | 14 | $ | 1,969 | 12 | |||||||||
About Timberland Bancorp, Inc.
Timberland Bancorp, Inc., a Washington corporation, is the holding company for Timberland Bank. The Bank opened for business in 1915 and primarily serves consumers and businesses across Grays Harbor, Thurston, Pierce, King, Kitsap and Lewis counties, Washington with a full range of lending and deposit services through its 23 branches (including its main office in Hoquiam).
Disclaimer
Certain matters discussed in this press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to our financial condition, results of operations, plans, objectives, future performance or business. Forward-looking statements are not statements of historical fact, are based on certain assumptions and often include the words "believes," "expects," "anticipates," "estimates," "forecasts," "intends," "plans," "targets," "potentially," "probably," "projects," "outlook" or similar expressions or future or conditional verbs such as "may," "will," "should," "would" and "could." Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, assumptions and statements about future economic performance. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause our actual results to differ materially from the results anticipated or implied by our forward-looking statements, including, but not limited to: potential adverse impacts to economic conditions in our local market areas, other markets where the Company has lending relationships, or other aspects of the Company's business operations or financial markets, including, without limitation, as a result of employment levels, labor shortages and the effects of inflation, a potential recession or slowed economic growth caused by increasing geopolitical instability (including wars, conflicts, terrorist attacks, natural disasters, and other unexpected events outside of our control), as well as increasing oil prices and supply chain disruptions, and any governmental or societal responses to novel coronavirus disease 2019 ("COVID-19") pandemic, including the possibility of new COVID-19 variants; credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs and changes in our allowance for loan losses and provision for loan losses that may be impacted by deterioration in the housing and commercial real estate markets which may lead to increased losses and non-performing loans in our loan portfolio may result in our allowance for loan losses not being adequate to cover actual losses, and require us to materially increase our loan loss reserves; changes in general economic conditions, either nationally or in our market areas; changes in the levels of general interest rates, and the relative differences between short and long-term interest rates, deposit interest rates, our net interest margin and funding sources; uncertainty regarding the future of the London Interbank Offered Rate ("LIBOR"), and the transition away from LIBOR toward new interest rate benchmarks; fluctuations in the demand for loans, the number of unsold homes, land and other properties and fluctuations in real estate values in our market areas; secondary market conditions for loans and our ability to sell loans in the secondary market; results of examinations of us by the Federal Reserve and of our bank subsidiary by the Federal Deposit Insurance Corporation, the Washington State Department of Financial Institutions, Division of Banks or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, institute a formal or informal enforcement action against us or our bank subsidiary which could require us to increase our allowance for loan losses, write-down assets, change our regulatory capital position or affect our ability to borrow funds or maintain or increase deposits or impose additional requirements or restrictions on us, any of which could adversely affect our liquidity and earnings; legislative or regulatory changes that adversely affect our business including changes in banking, securities and tax law, in regulatory policies and principles, or the interpretation of regulatory capital or other rules and including changes as a result of COVID-19; our ability to attract and retain deposits; our ability to control operating costs and expenses; the use of estimates in determining fair value of certain of our assets, which estimates may prove to be incorrect and result in significant declines in valuation; difficulties in reducing risks associated with the loans in our consolidated balance sheet; staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our work force and potential associated charges; disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform several of our critical processing functions; our ability to retain key members of our senior management team; costs and effects of litigation, including settlements and judgments; our ability to implement our business strategies; our ability to manage loan delinquency rates; increased competitive pressures among financial services companies; changes in consumer spending, borrowing and savings habits; the availability of resources to address changes in laws, rules, or regulations or to respond to regulatory actions; our ability to pay dividends on our common stock; the quality and composition of our securities portfolio and the impact if any adverse changes in the securities markets, including on market liquidity; inability of key third-party providers to perform their obligations to us; changes in accounting policies and practices, as may be adopted by the financial institution regulatory agencies or the Financial Accounting Standards Board ("FASB"), including additional guidance and interpretation on accounting issues and details of the implementation of new accounting methods; the economic impact of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, and other external events on our business; other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services and other risks described in our reports filed with or furnished to the Securities and Exchange Commission.
Any of the forward-looking statements that we make in this press release and in the other public statements we make are based upon management's beliefs and assumptions at the time they are made. We do not undertake and specifically disclaim any obligation to publicly update or revise any forward-looking statements included in this press release to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking statements discussed in this document might not occur and we caution readers not to place undue reliance on any forward-looking statements. These risks could cause our actual results for fiscal 2024 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of, us, and could negatively affect the Company's consolidated financial condition and results of operations as well as its stock price performance.
| TIMBERLAND BANCORP INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME | Three Months Ended | ||||||||||||
| ($ in thousands, except per share amounts) (unaudited) | March 31, | Dec. 31, | March 31, | ||||||||||
| 2024 | 2023 | 2023 | |||||||||||
| Interest and dividend income | |||||||||||||
| Loans receivable | $ | 18,909 | $ | 18,395 | $ | 14,950 | |||||||
| Investment securities | 2,246 | 2,311 | 2,460 | ||||||||||
| Dividends from mutual funds, FHLB stock and other investments | 82 | 91 | 64 | ||||||||||
| Interest bearing deposits in banks | 1,919 | 1,699 | 1,913 | ||||||||||
| Total interest and dividend income | 23,156 | 22,496 | 19,387 | ||||||||||
| Interest expense | |||||||||||||
| Deposits | 7,301 | 6,143 | 2,236 | ||||||||||
| Borrowings | 220 | 349 | -- | ||||||||||
| Total interest expense | 7,521 | 6,492 | 2,236 | ||||||||||
| Net interest income | 15,635 | 16,004 | 17,151 | ||||||||||
| Provision for credit losses – loans | 166 | 379 | 475 | ||||||||||
| Provision for (recapture of ) credit losses – investment securities | 3 | (10 | ) | -- | |||||||||
| Recapture of credit losses - unfunded commitments | (88 | ) | (33 | ) | -- | ||||||||
| Net int. income after provision for (recapture of) credit losses | 15,554 | 15,668 | 16,676 | ||||||||||
| Non-interest income | |||||||||||||
| Service charges on deposits | 988 | 1,023 | 893 | ||||||||||
| ATM and debit card interchange transaction fees | 1,212 | 1,264 | 1,275 | ||||||||||
| Gain on sales of loans, net | 41 | 78 | 46 | ||||||||||
| Bank owned life insurance (“BOLI”) net earnings | 156 | 156 | 157 | ||||||||||
| Recoveries on investment securities, net | 2 | 5 | 2 | ||||||||||
| Other | 216 | 272 | 263 | ||||||||||
| Total non-interest income, net | 2,615 | 2,798 | 2,636 | ||||||||||
| Non-interest expense | |||||||||||||
| Salaries and employee benefits | 6,024 | 5,911 | 6,046 | ||||||||||
| Premises and equipment | 1,081 | 973 | 1,001 | ||||||||||
| Advertising | 159 | 186 | 178 | ||||||||||
| ATM and debit card processing | 601 | 615 | 489 | ||||||||||
| Postage and courier | 145 | 126 | 147 | ||||||||||
| State and local taxes | 325 | 319 | 298 | ||||||||||
| Professional fees | 319 | 253 | 473 | ||||||||||
| FDIC insurance expense | 206 | 210 | 202 | ||||||||||
| Loan administration and foreclosure | 134 | 105 | 138 | ||||||||||
| Technology and communication expense | 1,040 | 974 | 880 | ||||||||||
| Deposit operations | 324 | 320 | 246 | ||||||||||
| Amortization of core deposit intangible (“CDI”) | 57 | 56 | 67 | ||||||||||
| Other, net | 576 | 576 | 779 | ||||||||||
| Total non-interest expense, net | 10,991 | 10,624 | 10,944 | ||||||||||
| Income before income taxes | 7,178 | 7,842 | 8,368 | ||||||||||
| Provision for income taxes | 1,470 | 1,546 | 1,705 | ||||||||||
| Net income | $ | 5,708 | $ | 6,296 | $ | 6,663 | |||||||
| Net income per common share: | |||||||||||||
| Basic | $ | 0.71 | $ | 0.78 | $ | 0.81 | |||||||
| Diluted | 0.70 | 0.77 | 0.80 | ||||||||||
| Weighted average common shares outstanding: | |||||||||||||
| Basic | 8,081,924 | 8,114,209 | 8,220,532 | ||||||||||
| Diluted | 8,121,109 | 8,166,048 | 8,304,370 | ||||||||||
| TIMBERLAND BANCORP INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME | Six Months Ended | ||||||||||||
| ($ in thousands, except per share amounts) (unaudited) | March 31, | March 31, | |||||||||||
| 2024 | 2023 | ||||||||||||
| Interest and dividend income | |||||||||||||
| Loans receivable | $ | 37,304 | $ | 29,407 | |||||||||
| Investment securities | 4,556 | 4,674 | |||||||||||
| Dividends from mutual funds, FHLB stock and other investments | 173 | 115 | |||||||||||
| Interest bearing deposits in banks | 3,618 | 4,304 | |||||||||||
| Total interest and dividend income | 45,651 | 38,500 | |||||||||||
| Interest expense | |||||||||||||
| Deposits | 13,444 | 3,606 | |||||||||||
| Borrowings | 568 | -- | |||||||||||
| Total interest expense | 14,012 | 3,606 | |||||||||||
| Net interest income | 31,639 | 34,894 | |||||||||||
| Provision for credit losses – loans | 545 | 1,000 | |||||||||||
| Recapture of credit losses – investment securities | (7 | ) | -- | ||||||||||
| Recapture of credit losses - unfunded commitments | (121 | ) | -- | ||||||||||
| Net int. income after provision for (recapture of) credit losses | 31,222 | 33,894 | |||||||||||
| Non-interest income | |||||||||||||
| Service charges on deposits | 2,011 | 1,840 | |||||||||||
| ATM and debit card interchange transaction fees | 2,476 | 2,526 | |||||||||||
| Gain on sales of loans, net | 120 | 67 | |||||||||||
| Bank owned life insurance (“BOLI”) net earnings | 312 | 313 | |||||||||||
| Recoveries on investment securities, net | 7 | 5 | |||||||||||
| Other | 487 | 590 | |||||||||||
| Total non-interest income, net | 5,413 | 5,341 | |||||||||||
| Non-interest expense | |||||||||||||
| Salaries and employee benefits | 11,936 | 11,946 | |||||||||||
| Premises and equipment | 2,054 | 1,925 | |||||||||||
| Advertising | 345 | 372 | |||||||||||
| ATM and debit card processing | 1,216 | 972 | |||||||||||
| Postage and courier | 271 | 268 | |||||||||||
| State and local taxes | 644 | 597 | |||||||||||
| Professional fees | 572 | 902 | |||||||||||
| FDIC insurance expense | 416 | 326 | |||||||||||
| Loan administration and foreclosure | 239 | 259 | |||||||||||
| Technology and telecommunications | 2,014 | 1,668 | |||||||||||
| Deposit operations | 644 | 592 | |||||||||||
| Amortization of CDI | 113 | 135 | |||||||||||
| Other, net | 1,151 | 1,517 | |||||||||||
| Total non-interest expense, net | 21,615 | 21,479 | |||||||||||
| Income before income taxes | 15,020 | 17,756 | |||||||||||
| Provision for income taxes | 3,016 | 3,587 | |||||||||||
| Net income | $ | 12,004 | $ | 14,169 | |||||||||
| Net income per common share: | |||||||||||||
| Basic | $ | 1.48 | $ | 1.72 | |||||||||
| Diluted | 1.47 | 1.70 | |||||||||||
| Weighted average common shares outstanding: | |||||||||||||
| Basic | 8,098,155 | 8,226,467 | |||||||||||
| Diluted | 8,143,701 | 8,311,630 | |||||||||||
| TIMBERLAND BANCORP INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS | ||||||||||||
| ($ in thousands, except per share amounts) (unaudited) | March 31, | Dec. 31, | March 31, | |||||||||
| 2024 | 2023 | 2023 | ||||||||||
| Assets | ||||||||||||
| Cash and due from financial institutions | $ | 22,310 | $ | 28,656 | $ | 26,015 | ||||||
| Interest-bearing deposits in banks | 158,039 | 129,365 | 116,468 | |||||||||
| Total cash and cash equivalents | 180,349 | 158,021 | 142,483 | |||||||||
| Certificates of deposit (“CDs”) held for investment, at cost | 11,204 | 12,449 | 20,168 | |||||||||
| Investment securities: | ||||||||||||
| Held to maturity, at amortized cost (net of ACL – investment securities) | 211,818 | 266,085 | 277,911 | |||||||||
| Available for sale, at fair value | 61,746 | 40,446 | 54,838 | |||||||||
| Investments in equity securities, at fair value | 839 | 848 | 850 | |||||||||
| FHLB stock | 2,037 | 2,001 | 2,202 | |||||||||
| Other investments, at cost | 3,000 | 3,000 | 3,000 | |||||||||
| Loans held for sale | 1,311 | 1,425 | 200 | |||||||||
| Loans receivable | 1,375,934 | 1,352,938 | 1,224,891 | |||||||||
| Less: ACL – loans | (16,818 | ) | (16,655 | ) | (14,698 | ) | ||||||
| Net loans receivable | 1,359,116 | 1,336,283 | 1,210,193 | |||||||||
| Premises and equipment, net | 21,718 | 21,584 | 21,744 | |||||||||
| BOLI | 23,278 | 23,122 | 23,119 | |||||||||
| Accrued interest receivable | 7,108 | 6,731 | 5,295 | |||||||||
| Goodwill | 15,131 | 15,131 | 15,131 | |||||||||
| CDI | 564 | 621 | 813 | |||||||||
| Loan servicing rights, net | 1,717 | 1,925 | 2,535 | |||||||||
| Operating lease right-of-use assets | 1,624 | 1,698 | 1,844 | |||||||||
| Other assets | 4,674 | 3,745 | 4,292 | |||||||||
| Total assets | $ | 1,907,234 | $ | 1,895,115 | $ | 1,786,618 | ||||||
| Liabilities and shareholders’ equity | ||||||||||||
| Deposits: Non-interest-bearing demand | $ | 424,906 | $ | 433,065 | $ | 479,283 | ||||||
| Deposits: Interest-bearing | 1,213,648 | 1,194,004 | 1,069,484 | |||||||||
| Total deposits | 1,638,554 | 1,627,069 | 1,548,767 | |||||||||
| Operating lease liabilities | 1,723 | 1,796 | 1,935 | |||||||||
| FHLB borrowings | 20,000 | 20,000 | -- | |||||||||
| Other liabilities and accrued expenses | 8,278 | 8,881 | 8,255 | |||||||||
| Total liabilities | 1,668,555 | 1,657,746 | 1,558,957 | |||||||||
| Shareholders’ equity | ||||||||||||
| Common stock, $.01 par value; 50,000,000 shares authorized; 8,023,121 shares issued and outstanding – March 31, 2024 8,120,708 shares issued and outstanding – December 31, 2023 8,203,174 shares issued and outstanding – March 31, 2023 | 32,338 | 34,869 | 37,979 | |||||||||
| Retained earnings | 207,086 | 203,327 | 190,177 | |||||||||
| Accumulated other comprehensive loss | (745 | ) | (827 | ) | (495 | ) | ||||||
| Total shareholders’ equity | 238,679 | 237,369 | 227,661 | |||||||||
| Total liabilities and shareholders’ equity | $ | 1,907,234 | $ | 1,895,115 | $ | 1,786,618 | ||||||
| Three Months Ended | ||||||||||||
| PERFORMANCE RATIOS: | March 31, 2024 | Dec. 31, 2023 | March 31, 2023 | |||||||||
| Return on average assets (a) | 1.22 | % | 1.36 | % | 1.48 | % | ||||||
| Return on average equity (a) | 9.67 | % | 10.75 | % | 11.86 | % | ||||||
| Net interest margin (a) | 3.48 | % | 3.60 | % | 3.99 | % | ||||||
| Efficiency ratio | 60.22 | % | 56.50 | % | 55.31 | % | ||||||
| Six Months Ended | ||||||||||||
| PERFORMANCE RATIOS: | March 31, 2024 | March 31, 2023 | ||||||||||
| Return on average assets (a) | 1.28 | % | 1.55 | % | ||||||||
| Return on average equity (a) | 10.18 | % | 12.74 | % | ||||||||
| Net interest margin (a) | 3.53 | % | 4.02 | % | ||||||||
| Efficiency ratio | 58.34 | % | 53.38 | % | ||||||||
| Three Months Ended | ||||||||||||
| ASSET QUALITY RATIOS AND DATA: | March 31, 2024 | Dec. 31, 2023 | March 31, 2023 | |||||||||
| Non-accrual loans | $ | 3,605 | $ | 3,366 | $ | 1,969 | ||||||
| Loans past due 90 days and still accruing | -- | -- | -- | |||||||||
| Non-performing investment securities | 79 | 85 | 93 | |||||||||
| OREO and other repossessed assets | -- | -- | -- | |||||||||
| Total non-performing assets (b) | $ | 3,684 | $ | 3,451 | $ | 2,062 | ||||||
| Non-performing assets to total assets (b) | 0.19 | % | 0.18 | % | 0.12 | % | ||||||
| Net charge-offs (recoveries) during quarter | $ | 3 | $ | 2 | $ | 6 | ||||||
| Allowance for credit losses - loans to non-accrual loans, | 467 | % | 495 | % | 746 | % | ||||||
| Allowance for credit losses - loans to loans receivable (c) | 1.22 | % | 1.23 | % | 1.20 | % | ||||||
| CAPITAL RATIOS: | ||||||||||||
| Tier 1 leverage capital | 12.01 | % | 12.14 | % | 11.95 | % | ||||||
| Tier 1 risk-based capital | 18.08 | % | 18.22 | % | 18.16 | % | ||||||
| Common equity Tier 1 risk-based capital | 18.08 | % | 18.22 | % | 18.16 | % | ||||||
| Total risk-based capital | 19.33 | % | 19.50 | % | 19.41 | % | ||||||
| Tangible common equity to tangible assets (non-GAAP) | 11.79 | % | 11.79 | % | 11.96 | % | ||||||
| BOOK VALUES: | ||||||||||||
| Book value per common share | $ | 29.75 | $ | 29.23 | $ | 27.75 | ||||||
| Tangible book value per common share (d) | 27.79 | 27.29 | 25.81 | |||||||||
_____________________________________
(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.
(c) Does not include loans held for sale and is before the allowance for loan losses.
(d) 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, 2024 | December 31, 2023 | March 31, 2023 | ||||||||||||||||||
| Amount | Rate | Amount | Rate | Amount | Rate | |||||||||||||||
| Assets | ||||||||||||||||||||
| Loans receivable and loans held for sale | $ | 1,365,417 | 5.57 | % | $ | 1,332,971 | 5.52 | % | $ | 1,200,872 | 4.98 | % | ||||||||
| Investment securities and FHLB stock (1) | 298,003 | 3.14 | 317,164 | 3.03 | 340,317 | 2.97 | ||||||||||||||
| Interest-earning deposits in banks and CDs | 143,121 | 5.39 | 126,253 | 5.38 | 177,748 | 4.30 | ||||||||||||||
| Total interest-earning assets | 1,806,541 | 5.16 | 1,776,388 | 5.07 | 1,718,937 | 4.51 | ||||||||||||||
| Other assets | 81,337 | 81,612 | 84,072 | |||||||||||||||||
| Total assets | $ | 1,887,878 | $ | 1,858,000 | $ | 1,803,009 | ||||||||||||||
| Liabilities and Shareholders’ Equity | ||||||||||||||||||||
| NOW checking accounts | $ | 367,924 | 1.61 | % | $ | 376,682 | 1.51 | % | $ | 412,642 | 0.83 | % | ||||||||
| Money market accounts | 270,623 | 3.14 | 224,939 | 2.34 | 218,718 | 0.68 | ||||||||||||||
| Savings accounts | 214,233 | 0.23 | 220,042 | 0.22 | 274,877 | 0.14 | ||||||||||||||
| Certificates of deposit accounts | 295,202 | 4.16 | 268,628 | 3.97 | 170,547 | 2.22 | ||||||||||||||
| Brokered CDs | 40,402 | 5.40 | 42,725 | 5.38 | -- | -- | ||||||||||||||
| Total interest-bearing deposits | 1,188,384 | 2.47 | 1,133,016 | 2.18 | 1,076,784 | 0.84 | ||||||||||||||
| Borrowings | 20,001 | 4.42 | 28,804 | 4.81 | 6 | 5.43 | ||||||||||||||
| Total interest-bearing liabilities | 1,208,385 | 2.50 | 1,161,820 | 2.22 | 1,076,790 | 0.84 | ||||||||||||||
| Non-interest-bearing demand deposits | 431,826 | 450,027 | 492,294 | |||||||||||||||||
| Other liabilities | 10,182 | 11,878 | 9,136 | |||||||||||||||||
| Shareholders’ equity | 237,485 | 234,275 | 224,789 | |||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 1,887,878 | $ | 1,858,000 | $ | 1,803,009 | ||||||||||||||
| Interest rate spread | 2.66 | % | 2.85 | % | 3.67 | % | ||||||||||||||
| Net interest margin (2) | 3.48 | % | 3.60 | % | 3.99 | % | ||||||||||||||
| Average interest-earning assets to average interest-bearing liabilities | 149.50 | % | 152.90 | % | 159.64 | % | ||||||||||||||
_____________________________________
(1) Includes other investments
(2) Net interest margin = annualized net interest income / average interest-earning assets
| For the Six Months Ended | ||||||||||||||||||||
| March 31, 2024 | March 31, 2023 | |||||||||||||||||||
| Amount | Rate | Amount | Rate | |||||||||||||||||
| Assets | ||||||||||||||||||||
| Loans receivable and loans held for sale | $ | 1,349,105 | 5.53 | % | $ | 1,182,420 | 4.97 | % | ||||||||||||
| Investment securities and FHLB stock (1) | 307,636 | 3.08 | 332,815 | 2.88 | ||||||||||||||||
| Interest-earning deposits in banks and CDs | 134,643 | 5.37 | 222,569 | 3.87 | ||||||||||||||||
| Total interest-earning assets | 1,791,384 | 5.10 | 1,737,804 | 4.43 | ||||||||||||||||
| Other assets | 81,473 | 86,171 | ||||||||||||||||||
| Total assets | $ | 1,872,857 | $ | 1,823,975 | ||||||||||||||||
| Liabilities and Shareholders’ Equity | ||||||||||||||||||||
| NOW checking accounts | $ | 372,327 | 1.56 | % | $ | 426,345 | 0.63 | % | ||||||||||||
| Money market accounts | 247,656 | 2.78 | 229,185 | 0.60 | ||||||||||||||||
| Savings accounts | 217,153 | 0.23 | 277,382 | 0.13 | ||||||||||||||||
| Certificates of deposit accounts | 281,842 | 4.07 | 152,814 | 1.84 | ||||||||||||||||
| Brokered CDs | 41,570 | 5.39 | -- | -- | ||||||||||||||||
| Total interest-bearing deposits | 1,160,548 | 2.32 | 1,085,726 | 0.67 | ||||||||||||||||
| Borrowings | 24,427 | 4.65 | 3 | 5.43 | ||||||||||||||||
| Total interest-bearing liabilities | 1,184,975 | 2.37 | 1,085,729 | 0.67 | ||||||||||||||||
| Non-interest-bearing demand deposits | 440,976 | 505,949 | ||||||||||||||||||
| Other liabilities | 11,035 | 9,813 | ||||||||||||||||||
| Shareholders’ equity | 235,871 | 222,484 | ||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 1,872,857 | $ | 1,823,975 | ||||||||||||||||
| Interest rate spread | 2.73 | % | 3.76 | % | ||||||||||||||||
| Net interest margin (2) | 3.53 | % | 4.02 | % | ||||||||||||||||
| Average interest-earning assets to average interest-bearing liabilities | 151.17 | % | 160.06 | % | ||||||||||||||||
_____________________________________
(1) Includes other investments
(2) Net interest margin = annualized net interest income / average interest-earning assets
Non-GAAP Financial Measures
In addition to results presented in accordance with 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, 2024 | December 31, 2023 | March 31, 2023 | |||||||||
| Shareholders’ equity | $ | 238,679 | $ | 237,369 | $ | 227,661 | ||||||
| Less goodwill and CDI | (15,695 | ) | (15,752 | ) | (15,944 | ) | ||||||
| Tangible common equity | $ | 222,984 | $ | 221,617 | $ | 211,717 | ||||||
| Total assets | $ | 1,907,234 | $ | 1,895,115 | $ | 1,786,618 | ||||||
| Less goodwill and CDI | (15,695 | ) | (15,752 | ) | (15,944 | ) | ||||||
| Tangible assets | $ | 1,891,539 | $ | 1,879,363 | $ | 1,770,674 | ||||||
| Contact: | Dean J. Brydon, CEO |
| Jonathan A. Fischer, President & COO | |
| Marci A. Basich, CFO | |
| (360) 533-4747 | |
| www.timberlandbank.com |
FAQ
What was Timberland Bancorp's net income for the second fiscal quarter?
What was Timberland Bancorp's quarterly EPS?
By how much did net loans increase year-over-year?
What was the quarterly return on average assets?
How much did deposits increase year-over-year?
When is Timberland Bancorp's quarterly cash dividend payable?
What caused the decrease in net income for the first six months of fiscal 2024?
Why did the net interest margin compress in the second quarter?
How did the loan portfolio perform during the quarter?
What factors contributed to the decrease in operating revenue?
What led to the increase in total deposits?
Why did the efficiency ratio increase for the current quarter?
How did Timberland Bancorp's total assets change year-over-year?
What is the current non-performing assets to total assets ratio for Timberland Bancorp?
Were there any increases in delinquent loans and non-accrual loans compared to the previous quarter?
