Timberland Bancorp’s First Fiscal Quarter Earnings Per Share Increases 12% to $0.87
Timberland Bancorp (NASDAQ: TSBK) reported a 10% increase in net income to $7.29 million for Q1 2021, with EPS rising 12% to $0.87. The company announced a 5% increase in the quarterly cash dividend to $0.21 per share and a special dividend of $0.10. Key metrics included a return on average equity of 15.39% and a return on average assets of 1.84%. Total assets rose 25% year-over-year, while total deposits increased by 27%. These results reflect robust financial performance despite challenges posed by COVID-19, with a focus on supporting local businesses through PPP loans.
- Net income rose 10% to $7.29 million.
- EPS increased 12% to $0.87.
- 5% increase in quarterly cash dividend to $0.21.
- Special dividend of $0.10 declared.
- Return on average equity at 15.39%.
- Return on average assets at 1.84%.
- Total assets increased 25% year-over-year.
- Total deposits increased 27% year-over-year.
- Net loans receivable decreased slightly from the prior quarter.
- Non-interest income decreased 3% from the preceding quarter.
Announces a
- First Fiscal Quarter Net Income Increases
10% to$7.29 Million - Quarterly Return on Average Assets of
1.84% - Quarterly Return on Average Equity of
15.39%
HOQUIAM, Wash., Jan. 25, 2021 (GLOBE NEWSWIRE) -- Timberland Bancorp, Inc. (NASDAQ: TSBK) (“Timberland” or “the Company”) today reported net income increased
Timberland’s Board of Directors announced a
“We are pleased to report record quarterly income and continued strong financial metrics for our first fiscal quarter,” stated Michael Sand, President and CEO. “We are encouraged the vast majority of our borrowers are effectively managing through a difficult economy over which COVID-19 continues to cast a shadow. We are also encouraged by the possibility of vaccine availability during the next several months and the potential for hard hit individuals and businesses to begin recovering financially from very challenging circumstances.”
“In support of businesses and their employees in our communities, staff members have worked diligently to process and file Paycheck Protection Program (“PPP”) applications for forgiveness,” said Sand. During the quarter, PPP loan balances decreased
“During the quarter we continued to work with COVID-19 affected borrowers to appropriately defer loans to provide them with economic relief. We have found the number of deferral requests to be modest. At December 31, 2020 we had 12 loans remaining in a deferred payment status representing approximately
First Fiscal Quarter 2021 Earnings and Balance Sheet Highlights (at or for the period ended December 31, 2020, compared to December 31, 2019 or September 30, 2020):
Earnings Highlights:
- Net income increased to
$7.29 million for the current quarter from$6.36 million for the preceding quarter and$6.65 million for the comparable quarter one year ago; EPS increased to$0.87 for the current quarter from$0.76 for the preceding quarter and$0.78 for the comparable quarter one year ago; - Return on average equity (“ROE”) and return on average assets (“ROA”) for the current quarter were
15.39% and1.84% , respectively; - Net interest margin was
3.48% for the current quarter compared to3.44% for the preceding quarter and4.43% for the comparable quarter one year ago; and - The efficiency ratio improved to
47.83% from50.73% for the preceding quarter and49.43% for the comparable quarter one year ago.
Balance Sheet Highlights:
- Total assets increased
25% year-over-year and1% from the prior quarter; - Total deposits increased
27% year-over-year and1% from the prior quarter; - Net loans receivable increased
10% year-over-year and decreased slightly from the prior quarter; - Non-performing assets to total assets improved to
0.19% ; and - Book and tangible book (non-GAAP) values per common share increased to
$23.24 and$21.24 , respectively, at December 31, 2020.
Operating Results
Operating revenue (net interest income before the provision for loan losses plus non-interest income) increased
Net interest income increased
No provision for loan losses was made during the current quarter compared to a
Non-interest income increased
Total operating expenses for the current quarter decreased
The provision for income taxes for the current quarter increased
Balance Sheet Management
Total assets increased
Loans
Net loans receivable decreased
Loan Portfolio
($ in thousands)
| December 31, 2020 | September 30, 2020 | December 31, 2019 | |||||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||
| Mortgage loans: | |||||||||||||||||||||
| One- to four-family (a) | $ | 115,613 | 10 | % | $ | 118,580 | 10 | % | $ | 129,373 | 13 | % | |||||||||
| Multi-family | 89,413 | 8 | 85,053 | 8 | 78,326 | 8 | |||||||||||||||
| Commercial | 463,670 | 41 | 453,574 | 40 | 439,024 | 44 | |||||||||||||||
| Construction - custom and | |||||||||||||||||||||
| owner/builder | 117,872 | 10 | 129,572 | 12 | 124,530 | 12 | |||||||||||||||
| Construction - speculative one-to four-family | 20,291 | 2 | 14,592 | 1 | 18,764 | 2 | |||||||||||||||
| Construction - commercial | 41,491 | 4 | 33,144 | 3 | 36,670 | 4 | |||||||||||||||
| Construction - multi-family | 29,410 | 3 | 34,476 | 3 | 33,290 | 3 | |||||||||||||||
| Construction - land | |||||||||||||||||||||
| development | 6,943 | 1 | 7,712 | 1 | 1,656 | -- | |||||||||||||||
| Land | 22,635 | 2 | 25,571 | 2 | 29,419 | 3 | |||||||||||||||
| Total mortgage loans | 907,338 | 81 | 902,274 | 80 | 891,052 | 89 | |||||||||||||||
| Consumer loans: | |||||||||||||||||||||
| Home equity and second | |||||||||||||||||||||
| Mortgage | 35,446 | 3 | 32,077 | 3 | 39,103 | 4 | |||||||||||||||
| Other | 2,979 | -- | 3,572 | -- | 4,093 | -- | |||||||||||||||
| Total consumer loans | 38,425 | 3 | 35,649 | 3 | 43,196 | 4 | |||||||||||||||
| Commercial loans: | |||||||||||||||||||||
| Commercial business loans | 71,257 | 7 | 69,540 | 6 | 73,790 | 7 | |||||||||||||||
| SBA PPP loans | 103,468 | 9 | 126,820 | 11 | -- | -- | |||||||||||||||
| Total commercial loans | 174,725 | 16 | 196,360 | 17 | 73,790 | 7 | |||||||||||||||
| Total loans | 1,120,488 | 100 | % | 1,134,283 | 100 | % | 1,008,038 | 100 | % | ||||||||||||
| Less: | |||||||||||||||||||||
| Undisbursed portion of | |||||||||||||||||||||
| construction loans in | |||||||||||||||||||||
| process | (94,298 | ) | (100,558 | ) | (82,172 | ) | |||||||||||||||
| Deferred loan origination | |||||||||||||||||||||
| fees | (5,449 | ) | (6,436 | ) | (2,834 | ) | |||||||||||||||
| Allowance for loan losses | (13,432 | ) | (13,414 | ) | (9,882 | ) | |||||||||||||||
| Total loans receivable, net | $ | 1,007,309 | $ | 1,013,875 | $ | 913,150 | |||||||||||||||
_______________________
(a) Does not include one- to four-family loans held for sale totaling
The following table highlights eight commercial real estate (“CRE”) segments generally presumed to have the potential to be more adversely affected by work at home and COVID related social distancing practices than other segments of the loan portfolio.
CRE Portfolio Breakdown by Collateral
($ in thousands)
Collateral Type | Amount | Percent of CRE Portfolio | Percent of Total Loan Portfolio | ||||||||||
| Office buildings | $ | 76,817 | 17 | % | 7 | % | |||||||
| Medical/dental offices | 62,965 | 14 | 6 | ||||||||||
| Other retail buildings | 41,144 | 9 | 4 | ||||||||||
| Hotels/motels | 27,223 | 6 | 2 | ||||||||||
| Restaurants | 25,331 | 5 | 2 | ||||||||||
| Nursing homes | 19,088 | 4 | 2 | ||||||||||
| Shopping centers | 14,421 | 3 | 1 | ||||||||||
| Churches | 12,384 | 2 | 1 | ||||||||||
| Additional CRE | 184,297 | 40 | 16 | ||||||||||
| Total CRE | $ | 463,670 | 100 | % | 41 | % | |||||||
Within Timberland’s commercial business loan portfolio (non-CRE) resides a segment of restaurant loans totaling
Timberland originated
Timberland’s investment securities and CDs held for investment decreased
Timberland’s liquidity continues to remain strong. Liquidity, as measured by the sum of cash and cash equivalents, CDs held for investment, and available for sale investment securities, was
Deposits
Total deposits increased
| Deposit Breakdown ($ in thousands) | |||||||||||||||||||
| December 31, 2020 | September 30, 2020 | December 31, 2019 | |||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||
| Non-interest-bearing demand | |||||||||||||||||||
| NOW checking | 387,158 | 28 | 376,899 | 28 | 303,493 | 28 | |||||||||||||
| Savings | 226,955 | 16 | 219,869 | 16 | 175,610 | 16 | |||||||||||||
| Money market | 158,928 | 12 | 149,922 | 11 | 134,131 | 13 | |||||||||||||
| Money market – reciprocal | 12,389 | 1 | 11,303 | 1 | 8,159 | 1 | |||||||||||||
| Certificates of deposit under | 124,789 | 9 | 129,579 | 10 | 133,271 | 12 | |||||||||||||
| Certificates of deposit | 26,944 | 2 | 28,945 | 2 | 28,933 | 3 | |||||||||||||
| Certificates of deposit – brokered | -- | -- | -- | -- | 3,204 | -- | |||||||||||||
| Total deposits | |||||||||||||||||||
Shareholders’ Equity and Capital Ratios
Total shareholders’ equity increased
Timberland remains well capitalized with a total risk-based capital ratio of
Asset Quality and Loan Deferrals
Timberland’s non-performing assets to total assets ratio improved to
Timberland continues to work with borrowers affected by the COVID-19 pandemic with loan deferral and forbearance plans. As of June 30, 2020, Timberland had granted deferrals (primarily 90-day payment deferrals with interest continuing to accrue or be paid monthly) for loans with balances aggregating to
COVID-19 Loan Modifications
($ in thousands)
Industry / Collateral Type | Amount | Percent of Net Loans Receivable | ||||
| Hotel | $ | 7,086 | ||||
| Industrial warehouse | 2,631 | 0.26 | ||||
| Restaurant | 1,964 | 0.20 | ||||
| Construction – commercial (hotel) | 1,439 | 0.14 | ||||
| Church | 1,067 | 0.11 | ||||
| Entertainment facility | 184 | 0.02 | ||||
| Other consumer | 18 | -- | ||||
| Total loan modifications | $ | 14,389 | ||||
The allowance for loan losses (“ALL”) as a percentage of loans receivable increased to
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
The following table details the ALL as a percentage of loans receivable:
| Dec. 31, | Sept. 30, | Dec. 31, | |||||||
| 2020 | 2020 | 2019 | |||||||
| ALL to loans receivable | 1.32 | % | 1.31 | % | 1.07 | % | |||
| ALL to loans receivable (excluding PPP loans) (non-GAAP) | 1.46 | % | 1.49 | % | 1.07 | % | |||
| ALL to loans receivable (excluding PPP loans and South Sound Acquisition loans) (non-GAAP) | 1.56 | % | 1.60 | % | 1.18 | % | |||
Total delinquent loans (past due 30 days or more) and non-accrual loans decreased
Non-Accrual Loans
($ in thousands)
| December 31, 2020 | September 30, 2020 | December 31, 2019 | ||||||||||||
| Amount | Quantity | Amount | Quantity | Amount | Quantity | |||||||||
| Mortgage loans: | ||||||||||||||
| One- to four-family | $ | 419 | 2 | $ | 659 | 3 | $ | 942 | 4 | |||||
| Commercial | 643 | 3 | 858 | 4 | 736 | 3 | ||||||||
| Land | 405 | 4 | 394 | 3 | 198 | 2 | ||||||||
| Total mortgage loans | 1,467 | 9 | 1,911 | 10 | 1,876 | 9 | ||||||||
| Consumer loans | ||||||||||||||
| Home equity and second | ||||||||||||||
| mortgage | 607 | 7 | 555 | 6 | 581 | 6 | ||||||||
| Other | 9 | 1 | 9 | 1 | 12 | 1 | ||||||||
| Total consumer loans | 616 | 8 | 564 | 7 | 593 | 7 | ||||||||
| Commercial business loans | 498 | 8 | 430 | 6 | 601 | 9 | ||||||||
| Total loans | $ | 2,581 | 25 | $ | 2,905 | 23 | $ | 3,070 | 25 | |||||
OREO and other repossessed assets decreased
OREO and Other Repossessed Assets
($ in thousands)
| December 31, 2020 | September 30, 2020 | December 31, 2019 | ||||||||||||
| Amount | Quantity | Amount | Quantity | Amount | Quantity | |||||||||
| Land | $ | 268 | 4 | $ | 1,050 | 6 | $ | 1,659 | 11 | |||||
| Total | $ | 268 | 4 | $ | 1,050 | 6 | $ | 1,659 | 11 | |||||
Acquisition of South Sound Bank
On October 1, 2018, the Company completed the acquisition of South Sound Bank, a Washington-state chartered bank, headquartered in Olympia, Washington (“South Sound Acquisition”). The Company acquired
About Timberland Bancorp, Inc.
Timberland Bancorp, Inc., a Washington corporation, is the holding company for Timberland Bank (“Bank”). The Bank opened for business in 1915 and serves consumers and businesses across Grays Harbor, Thurston, Pierce, King, Kitsap and Lewis counties, Washington with a full range of lending and deposit services through its 24 branches (including its main office in Hoquiam).
Disclaimer
Certain matters discussed in this press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to our financial condition, results of operations, plan, objectives, future performance or business. Forward-looking statements are not statements of historical fact, are based on certain assumptions and often include the words “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,” “plans,” “targets,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would” and “could.” Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, assumptions and statements about future economic performance. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause our actual results to differ materially from the results anticipated or implied by our forward-looking statements, including, but not limited to: the effect of the novel coronavirus of 2019 (“COVID-19”) pandemic, including the Company’s credit quality and business operations, as well as its impact on general economic and financial market conditions and other uncertainties resulting from the COVID-19 pandemic, such as the extent and duration of the impact on public health, the U.S. and global economies, and consumer and corporate customers, including economic activity, employment levels and market liquidity; the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs and changes in our allowance for loan losses and provision for loan losses that may be impacted by deterioration in the housing and commercial real estate markets which may lead to increased losses and non-performing assets in our loan portfolio, and may result in our allowance for loan losses not being adequate to cover actual losses, and require us to materially increase our loan loss reserves; changes in general economic conditions, either nationally or in our market areas; changes in the levels of general interest rates, and the relative differences between short and long term interest rates, deposit interest rates, our net interest margin and funding sources; uncertainty regarding the future of the London Interbank Offered Rate (“LIBOR”), and the potential transition away from LIBOR toward new interest rate benchmarks; fluctuations in the demand for loans, the number of unsold homes, land and other properties and fluctuations in real estate values in our market areas; secondary market conditions for loans and our ability to sell loans in the secondary market; results of examinations of us by the Federal Reserve and our bank subsidiary by the Federal Deposit Insurance Corporation, the Washington State Department of Financial Institutions, Division of Banks or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, institute a formal or informal enforcement action against us or our bank subsidiary which could require us to increase our allowance for loan losses, write-down assets, change our regulatory capital position or affect our ability to borrow funds or maintain or increase deposits or impose additional requirements or restrictions on us, any of which could adversely affect our liquidity and earnings; legislative or regulatory changes that adversely affect our business including changes in regulatory policies and principles, or the interpretation of regulatory capital or other rules including as a result of Basel III; the impact of the Dodd Frank Wall Street Reform and Consumer Protection Act and implementing regulations; our ability to attract and retain deposits; our ability to control operating costs and expenses; the use of estimates in determining fair value of certain of our assets, which estimates may prove to be incorrect and result in significant declines in valuation; difficulties in reducing risk associated with the loans on our consolidated balance sheet; staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our work force and potential associated charges; disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform several of our critical processing functions; our ability to retain key members of our senior management team; costs and effects of litigation, including settlements and judgments; our ability to implement our business strategies; our ability to manage loan delinquency rates; increased competitive pressures among financial services companies; changes in consumer spending, borrowing and savings habits; the availability of resources to address changes in laws, rules, or regulations or to respond to regulatory actions; our ability to pay dividends on our common and stock; adverse changes in the securities markets; inability of key third-party providers to perform their obligations to us; changes in accounting policies and practices, as may be adopted by the financial institution regulatory agencies or the Financial Accounting Standards Board (“FASB”), including additional guidance and interpretation on accounting issues and details of the implementation of new accounting methods; the economic impact of war or any terrorist activities; other economic, competitive, governmental, regulatory, and technological factors affecting our operations; pricing, products and services including the Coronavirus Aid, Relief, and Economic Security Act of 2020 (“CARES Act”) and the Consolidated Appropriations Act, 2021 (“CAA”); and other risks detailed in our reports filed with the Securities and Exchange Commission.
Any of the forward-looking statements that we make in this press release and in the other public statements we make are based upon management’s beliefs and assumptions at the time they are made. We do not undertake and specifically disclaim any obligation to publicly update or revise any forward-looking statements included in this report to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking statements discussed in this document might not occur and we caution readers not to place undue reliance on any forward-looking statements. These risks could cause our actual results for fiscal 2021 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) | Dec. 31, | Sept. 30, | Dec. 31, | ||||||||||
| (unaudited) | 2020 | 2020 | 2019 | ||||||||||
| Interest and dividend income | |||||||||||||
| Loans receivable | |||||||||||||
| Investment securities | 301 | 305 | 439 | ||||||||||
| Dividends from mutual funds, FHLB stock and other investments | 28 | 33 | 37 | ||||||||||
| Interest bearing deposits in banks | 310 | 371 | 951 | ||||||||||
| Total interest and dividend income | 13,957 | 13,593 | 14,191 | ||||||||||
| Interest expense | |||||||||||||
| Deposits | 904 | 1,044 | 1,189 | ||||||||||
| Borrowings | 29 | 29 | -- | ||||||||||
| Total interest expense | 933 | 1,073 | 1,189 | ||||||||||
| Net interest income | 13,024 | 12,520 | 13,002 | ||||||||||
| Provision for loan losses | -- | 500 | 200 | ||||||||||
| Net interest income after provision for loan losses | 13,024 | 12,020 | 12,802 | ||||||||||
| Non-interest income | |||||||||||||
| Service charges on deposits | 1,055 | 1,011 | 1,200 | ||||||||||
| ATM and debit card interchange transaction fees | 1,156 | 1,200 | 1,094 | ||||||||||
| Gain on sales of loans, net | 2,002 | 2,149 | 953 | ||||||||||
| Bank owned life insurance (“BOLI”) net earnings | 149 | 149 | 147 | ||||||||||
| Servicing income on loans sold | 15 | 22 | 74 | ||||||||||
| Valuation allowance on servicing rights, net | (236) | (197) | (23) | ||||||||||
| Recoveries on investment securities, net | 5 | 7 | 103 | ||||||||||
| Other | 413 | 374 | 390 | ||||||||||
| Total non-interest income, net | 4,559 | 4,715 | 3,938 | ||||||||||
| Non-interest expense | |||||||||||||
| Salaries and employee benefits | 4,613 | 4,438 | 4,722 | ||||||||||
| Premises and equipment | 957 | 1,048 | 894 | ||||||||||
| Gain on disposition of premises and equipment, net | -- | -- | (99) | ||||||||||
| Advertising | 156 | 138 | 183 | ||||||||||
| OREO and other repossessed assets, net | (26) | 215 | (1) | ||||||||||
| ATM and debit card processing | 431 | 425 | 440 | ||||||||||
| Postage and courier | 138 | 152 | 135 | ||||||||||
| State and local taxes | 283 | 293 | 216 | ||||||||||
| Professional fees | 231 | 342 | 269 | ||||||||||
| FDIC insurance expense (credit) | 96 | 88 | (27) | ||||||||||
| Loan administration and foreclosure | 80 | 89 | 89 | ||||||||||
| Data processing and telecommunications | 606 | 583 | 584 | ||||||||||
| Deposit operations | 284 | 278 | 317 | ||||||||||
| Amortization of core deposit intangible (“CDI”) | 90 | 102 | 101 | ||||||||||
| Other, net | 471 | 552 | 550 | ||||||||||
| Total non-interest expense, net | 8,410 | 8,743 | 8,373 | ||||||||||
| Income before income taxes | 9,173 | 7,992 | 8,367 | ||||||||||
| Provision for income taxes | 1,883 | 1,635 | 1,715 | ||||||||||
| Net income | |||||||||||||
| Net income per common share: | |||||||||||||
| Basic | |||||||||||||
| Diluted | 0.87 | 0.76 | 0.78 | ||||||||||
| Weighted average common shares outstanding: | |||||||||||||
| Basic | 8,313,493 | 8,310,793 | 8,341,470 | ||||||||||
| Diluted | 8,412,744 | 8,379,170 | 8,475,029 | ||||||||||
| TIMBERLAND BANCORP INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS | |||||||||||||
| ($ in thousands, except per share amounts) (unaudited) | Dec. 31, | Sept. 30, | Dec. 31, | ||||||||||
| 2020 | 2020 | 2019 | |||||||||||
| Assets | |||||||||||||
| Cash and due from financial institutions | |||||||||||||
| Interest-bearing deposits in banks | 325,987 | 292,575 | 94,529 | ||||||||||
| Total cash and cash equivalents | 350,213 | 314,452 | 118,851 | ||||||||||
| Certificates of deposit (“CDs”) held for investment, at cost | 49,629 | 65,545 | 76,249 | ||||||||||
| Investment securities: | |||||||||||||
| Held to maturity, at amortized cost | 24,509 | 27,890 | 39,080 | ||||||||||
| Available for sale, at fair value | 65,762 | 57,907 | 37,873 | ||||||||||
| Investments in equity securities, at fair value | 974 | 977 | 953 | ||||||||||
| FHLB stock | 1,922 | 1,922 | 1,437 | ||||||||||
| Other investments, at cost | 3,000 | 3,000 | 3,000 | ||||||||||
| Loans held for sale | 10,871 | 4,509 | 5,420 | ||||||||||
| Loans receivable | 1,020,741 | 1,027,289 | 923,032 | ||||||||||
| Less: Allowance for loan losses | (13,432) | (13,414) | (9,882) | ||||||||||
| Net loans receivable | 1,007,309 | 1,013,875 | 913,150 | ||||||||||
| Premises and equipment, net | 22,753 | 23,035 | 22,588 | ||||||||||
| OREO and other repossessed assets, net | 268 | 1,050 | 1,659 | ||||||||||
| BOLI | 21,745 | 21,596 | 21,152 | ||||||||||
| Accrued interest receivable | 4,490 | 4,484 | 3,665 | ||||||||||
| Goodwill | 15,131 | 15,131 | 15,131 | ||||||||||
| CDI | 1,535 | 1,625 | 1,930 | ||||||||||
| Servicing rights, net | 3,036 | 3,095 | 2,599 | ||||||||||
| Operating lease right-of-use assets | 2,512 | 2,587 | 2,823 | ||||||||||
| Other assets | 2,746 | 3,298 | 2,982 | ||||||||||
| Total assets | |||||||||||||
| Liabilities and shareholders’ equity | |||||||||||||
| Deposits: Non-interest-bearing demand | |||||||||||||
| Deposits: Interest-bearing | 937,163 | 916,517 | 786,801 | ||||||||||
| Total deposits | 1,375,116 | 1,358,406 | 1,084,477 | ||||||||||
| Operating lease liabilities | 2,565 | 2,630 | 2,823 | ||||||||||
| FHLB borrowings | 10,000 | 10,000 | -- | ||||||||||
| Other liabilities and accrued expenses | 7,399 | 7,312 | 7,589 | ||||||||||
| Total liabilities | 1,395,080 | 1,378,348 | 1,094,889 | ||||||||||
| Shareholders’ equity | |||||||||||||
| Common stock, $.01 par value; 50,000,000 shares authorized; 8,317,793 shares issued and outstanding – December 31, 2020 8,310,793 shares issued and outstanding – September 30, 2020 8,346,394 shares issued and outstanding – December 31, 2019 | 42,480 | 42,396 | 43,246 | ||||||||||
| Retained earnings | 150,801 | 145,173 | 132,553 | ||||||||||
| Accumulated other comprehensive income (loss) | 44 | 61 | (146) | ||||||||||
| Total shareholders’ equity | 193,325 | 187,630 | 175,653 | ||||||||||
| Total liabilities and shareholders’ equity | |||||||||||||
| KEY FINANCIAL RATIOS AND DATA | Three Months Ended | |||||||||||
| ($ in thousands, except per share amounts) (unaudited) | Dec. 31, | Sept. 30, | Dec. 31, | |||||||||
| 2020 | 2020 | 2019 | ||||||||||
| PERFORMANCE RATIOS: | ||||||||||||
| Return on average assets (a) | ||||||||||||
| Return on average equity (a) | ||||||||||||
| Net interest margin (a) | ||||||||||||
| Efficiency ratio | ||||||||||||
| ASSET QUALITY RATIOS AND DATA: | ||||||||||||
| Non-accrual loans | ||||||||||||
| Loans past due 90 days and still accruing | -- | -- | -- | |||||||||
| Non-performing investment securities | 205 | 209 | 254 | |||||||||
| OREO and other repossessed assets | 268 | 1,050 | 1,659 | |||||||||
| Total non-performing assets (b) | ||||||||||||
| Non-performing assets to total assets (b) | ||||||||||||
| Net charge-offs (recoveries) during quarter | $ (18) | $ (20) | $ 8 | |||||||||
| ALL to non-accrual loans | ||||||||||||
| ALL to loans receivable (c) | ||||||||||||
| ALL to loans receivable (excluding PPP loans) (d) (non-GAAP) | ||||||||||||
| ALL to loans receivable (excluding PPP loans and South Sound Acquisition loans) (d) (e) (non-GAAP) | ||||||||||||
| Troubled debt restructured loans on accrual status (f) | ||||||||||||
| CAPITAL RATIOS: | ||||||||||||
| Tier 1 leverage capital | ||||||||||||
| Tier 1 risk-based capital | ||||||||||||
| Common equity Tier 1 risk-based capital | | |||||||||||
| Total risk-based capital | ||||||||||||
| Tangible common equity to tangible assets (non-GAAP) | ||||||||||||
| BOOK VALUES: | ||||||||||||
| Book value per common share | ||||||||||||
| Tangible book value per common share (g) | 21.24 | 20.56 | 19.00 | |||||||||
________________________________________________
(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
(e) Does not include loans acquired in the South Sound Acquisition totaling
(f) Does not include troubled debt restructured loans totaling
(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 | |||||||||||||||||||||
| December 31, 2020 | September 30, 2020 | December 31, 2019 | |||||||||||||||||||
| Amount | Rate | Amount | Rate | Amount | Rate | ||||||||||||||||
| Assets | |||||||||||||||||||||
| Loans receivable and loans held for sale | $ | 1,030,289 | 5.17 | % | $ | 1,031,689 | 5.00 | % | $ | 911,905 | 5.60 | % | |||||||||
| Investment securities and FHLB stock (1) | 94,033 | 1.40 | 84,756 | 1.59 | 65,949 | 2.89 | |||||||||||||||
| Interest-earning deposits in banks and CDs | 374,376 | 0.33 | 339,224 | 0.44 | 196,322 | 1.93 | |||||||||||||||
| Total interest-earning assets | 1,498,698 | 3.73 | 1,455,669 | 3.74 | 1,174,176 | 4.83 | |||||||||||||||
| Other assets | 84,077 | 87,140 | 83,405 | ||||||||||||||||||
| Total assets | $ | 1,582,775 | $ | 1,542,809 | $ | 1,257,581 | |||||||||||||||
| Liabilities and Shareholders’ Equity | |||||||||||||||||||||
| NOW checking accounts | $ | 377,760 | 0.19 | % | $ | 360,622 | 0.23 | % | $ | 296,402 | 0.30 | % | |||||||||
| Money market accounts | 168,503 | 0.33 | 159,951 | 0.38 | 133,755 | 0.56 | |||||||||||||||
| Savings accounts | 222,866 | 0.08 | 214,080 | 0.09 | 174,590 | 0.08 | |||||||||||||||
| Certificates of deposit accounts | 155,125 | 1.38 | 161,674 | 1.55 | 166,799 | 1.78 | |||||||||||||||
| Total interest-bearing deposits | 924,254 | 0.39 | 896,327 | 0.47 | 771,546 | 0.61 | |||||||||||||||
| Borrowings | 10,000 | 1.15 | 10,000 | 1.15 | -- | -- | |||||||||||||||
| Total interest-bearing liabilities | 934,254 | 0.40 | 906,327 | 0.47 | 771,546 | 0.61 | |||||||||||||||
| Non-interest-bearing demand deposits | 448,350 | 440,950 | 305,452 | ||||||||||||||||||
| Other liabilities | 10,687 | 10,966 | 7,825 | ||||||||||||||||||
| Shareholders’ equity | 189,484 | 184,566 | 172,758 | ||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 1,582,775 | $ | 1,542,809 | $ | 1,257,581 | |||||||||||||||
| Interest rate spread | 3.33 | % | 3.27 | % | 4.22 | % | |||||||||||||||
| Net interest margin (2) | 3.48 | % | 3.44 | % | 4.43 | % | |||||||||||||||
| Average interest-earning assets to | |||||||||||||||||||||
| average interest-bearing liabilities | 160.42 | % | 160.61 | % | 152.18 | % | |||||||||||||||
_____________________________________
(1) Includes other investments
(2) Net interest margin = annualized net interest income / average interest-earning assets
Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles (“GAAP”), this press release contains certain non-GAAP financial measures. Timberland believes that certain non-GAAP financial measures provide investors with information useful in understanding the Company’s financial performance; however, readers of this report are urged to review these non-GAAP financial measures in conjunction with GAAP results as reported.
Financial measures that exclude intangible assets are non-GAAP measures. To provide investors with a broader understanding of capital adequacy, Timberland provides non-GAAP financial measures for tangible common equity, along with the GAAP measure. Tangible common equity is calculated as shareholders’ equity less goodwill and CDI. In addition, tangible assets equal total assets less goodwill and CDI.
The following table provides a reconciliation of ending shareholders’ equity (GAAP) to ending tangible shareholders’ equity (non-GAAP) and ending total assets (GAAP) to ending tangible assets (non-GAAP).
| ($ in thousands) | December 31, 2020 | September 30, 2020 | December 31, 2019 | |||||||||
| Shareholders’ equity | $ | 193,325 | $ | 187,630 | $ | 175,653 | ||||||
| Less goodwill and CDI | (16,666 | ) | (16,756 | ) | (17,061 | ) | ||||||
| Tangible common equity | $ | 176,659 | $ | 170,874 | $ | 158,592 | ||||||
| Total assets | $ | 1,588,405 | $ | 1,565,978 | $ | 1,270,542 | ||||||
| Less goodwill and CDI | (16,666 | ) | (16,756 | ) | (17,061 | ) | ||||||
| Tangible assets | $ | 1,571,739 | $ | 1,549,222 | $ | 1,253,481 | ||||||
Contact: Michael R. Sand,
President & CEO
Dean J. Brydon, CFO
(360) 533-4747
www.timberlandbank.com
FAQ
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