Timberland Bancorp’s Fiscal Fourth Quarter Net Income Increases 23%
Timberland Bancorp reported a net income of $7.05 million ($0.85 per share) for Q4 2022, marking a 23% increase from Q3 2022. The quarterly return on average assets rose to 1.51%, and the net interest margin expanded by 53 basis points to 3.64%. Year-over-year, net loans increased by 22%, excluding PPP loans. A quarterly cash dividend of $0.22 and a special cash dividend of $0.10 were announced, payable on November 25, 2022. Despite a slight outflow in deposits, asset quality remains strong, with non-performing assets at just 0.12% of total assets.
- Quarterly EPS increased 23% to $0.85 from $0.69 in Q3 2022.
- Net interest margin expanded by 53 basis points to 3.64%.
- Loan portfolio increased by 22% YoY, excluding PPP loans.
- Quarterly cash dividend of $0.22 per share and special cash dividend of $0.10 per share announced.
- Total deposits decreased by 2% from the preceding quarter.
- Operating expenses increased 3% quarter-over-quarter.
- Quarterly EPS Increases
23% to$0.85 from$0.69 for the Preceding Quarter - Quarterly Return on Average Assets Increases to
1.51% - Quarterly Return on Average Equity Increases to
13.06% - Quarterly Net Interest Margin Expands 53 Basis Points to
3.64% - Loan Portfolio (Excluding PPP Loans) Increased
22% Year-Over-Year - Announces a
$0.22 Quarterly Cash Dividend and a$0.10 Special Cash Dividend
HOQUIAM, Wash., Oct. 31, 2022 (GLOBE NEWSWIRE) -- Timberland Bancorp, Inc. (NASDAQ: TSBK) (“Timberland” or “the Company”), the holding company for Timberland Bank (the “Bank”), today reported net income of
Timberland also reported net income of
Timberland’s Board of Directors declared a quarterly cash dividend to shareholders of
“We are pleased to report strong fiscal fourth quarter results,” stated Michael Sand, CEO. “Continued growth in the loan and investment portfolios and a Fed orchestrated higher rate environment combined to significantly increase Company revenue and profitability relative to the prior quarter. “Our decision to build liquidity during the mid and post pandemic periods while patiently awaiting higher interest rates is now proving beneficial to the Company’s earnings profile. As noted throughout this release, key financial metrics moved sharply higher this quarter and tangible book value per share continued its upward trajectory.”
“Asset quality continues to be strong with no charge-offs recorded during the quarter and non-performing assets reported at 12 basis points of total assets at quarter end,” added Sand. “The tangible common equity to tangible assets ratio, a non-GAAP ratio, reached
“The 53 basis point expansion in the net interest margin helped increase net income and earnings per share by
“In addition to the regular quarterly cash dividend, Timberland’s Board of Directors also declared a one-time special cash dividend of
Earnings and Balance Sheet Highlights (at or for the periods ended September 30, 2022, compared to September 30, 2021, or June 30, 2022):
Earnings Highlights:
- Earnings per diluted common share (“EPS”) increased
23% to$0.85 for the current quarter from$0.69 for the preceding quarter and increased20% from$0.71 for the comparable quarter one year ago; - Net income increased
23% to$7.05 million for the current quarter from$5.74 million for the preceding quarter and increased17% from$6.02 million for the comparable quarter one year ago; - Return on average equity (“ROE”) and return on average assets (“ROA”) for the current quarter were
13.06% and1.51% , respectively; ROE and ROA for the 2022 fiscal year were11.14% and1.27% , respectively; - Net interest margin (“NIM”) for the current quarter improved to
3.64% from3.11% for the preceding quarter and3.13% for the comparable quarter one year ago; and - The efficiency ratio for the current quarter improved to
52.72% from57.80% for the preceding quarter and54.45% for the comparable quarter one year ago.
Balance Sheet Highlights:
- Total assets increased
4% year-over-year and decreased1% from the prior quarter; - Total deposits increased
4% year-over-year and decreased2% from the prior quarter; - Net loans receivable (excluding SBA PPP loans) increased
22% year-over-year and4% from the prior quarter; - Net loans receivable (including SBA PPP loans) increased
17% year-over-year and4% from the prior quarter; - Non-performing assets to total assets ratio improved to
0.12% from0.18% one year ago; - Total shareholders’ equity increased
6% to$218.57 million , from$206.90 million at September 30, 2021; and - Book and tangible book (non-GAAP) values per common share increased to
$26.58 and$24.63 , respectively, at September 30, 2022.
Operating Results
Operating revenue (net interest income before the provision for loan losses plus non-interest income) for the current quarter increased
Net interest income increased
Net interest income for the 2022 fiscal year increased
U.S. Small Business Administration (“SBA”) PPP loans contributed to interest income through the
| SBA PPP Loan Income ($ in thousands) Three Months Ended | ||||||||
| Sept. 30, 2022 | June 30, 2022 | Sept. 30, 2021 | ||||||
| Interest income | $ | 3 | $ | 9 | $ | 167 | ||
| Loan origination fee accretion | 10 | 146 | 1,488 | |||||
| Total SBA PPP loan income | $ | 13 | $ | 155 | $ | 1,655 | ||
| Year Ended | ||||||||
| Sept. 30, 2022 | Sept. 30, 2021 | |||||||
| Interest income | $ | 114 | $ | 1,060 | ||||
| Loan origination fee accretion | 1,792 | 5,071 | ||||||
| Total SBA PPP loan income | $ | 1,906 | $ | 6,131 | ||||
A
Non-interest income decreased
Total operating (non-interest) expenses for the current quarter increased
The provision for income taxes for the current quarter increased
Balance Sheet Management
Total assets increased
Total assets decreased by
Loans
Net loans receivable increased
Net loans receivable increased
Loan Portfolio
($ in thousands)
| September 30, 2022 | June 30, 2022 | September 30, 2021 | |||||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||
| Mortgage loans: | |||||||||||||||||||||
| One- to four-family (a) | $ | 176,116 | 14 | % | $ | 144,682 | 12 | % | $ | 119,935 | 11 | % | |||||||||
| Multi-family | 95,025 | 8 | 98,718 | 8 | 87,563 | 8 | |||||||||||||||
| Commercial | 536,650 | 43 | 532,167 | 44 | 470,650 | 43 | |||||||||||||||
| Construction - custom and owner/builder | 119,240 | 9 | 117,724 | 10 | 109,152 | 10 | |||||||||||||||
| Construction - speculative one-to four-family | 12,254 | 1 | 13,954 | 1 | 17,813 | 2 | |||||||||||||||
| Construction - commercial | 40,364 | 3 | 40,108 | 3 | 43,365 | 4 | |||||||||||||||
| Construction - multi-family | 64,480 | 5 | 54,804 | 5 | 52,071 | 5 | |||||||||||||||
| Construction - land | |||||||||||||||||||||
| development | 19,280 | 2 | 21,240 | 2 | 10,804 | 1 | |||||||||||||||
| Land | 26,854 | 2 | 24,490 | 2 | 19,936 | 2 | |||||||||||||||
| Total mortgage loans | 1,090,263 | 87 | 1,047,887 | 87 | 931,289 | 86 | |||||||||||||||
| Consumer loans: | |||||||||||||||||||||
| Home equity and second mortgage | 35,187 | 3 | 32,821 | 3 | 32,988 | 3 | |||||||||||||||
| Other | 2,128 | -- | 2,545 | -- | 2,512 | -- | |||||||||||||||
| Total consumer loans | 37,315 | 3 | 35,366 | 3 | 35,500 | 3 | |||||||||||||||
| Commercial loans: | |||||||||||||||||||||
| Commercial business loans | 125,039 | 10 | 122,822 | 10 | 74,579 | 7 | |||||||||||||||
| SBA PPP loans | 1,001 | -- | 1,320 | -- | 40,922 | 4 | |||||||||||||||
| Total commercial loans | 126,040 | 10 | 124,142 | 10 | 115,501 | 11 | |||||||||||||||
| Total loans | 1,253,618 | 100 | % | 1,207,395 | 100 | % | 1,082,290 | 100 | % | ||||||||||||
| Less: | |||||||||||||||||||||
| Undisbursed portion of construction loans in process | (103,168 | ) | (102,044 | ) | (95,224 | ) | |||||||||||||||
| Deferred loan origination fees | (4,321 | ) | (3,951 | ) | (5,143 | ) | |||||||||||||||
| Allowance for loan losses | (13,703 | ) | (13,433 | ) | (13,469 | ) | |||||||||||||||
| Total loans receivable, net | $ | 1,132,426 | $ | 1,087,967 | $ | 968,454 | |||||||||||||||
_______________________
(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 September 30, 2022:
CRE Loan Portfolio Breakdown by Collateral
($ in thousands)
Collateral Type | Amount | Percent of CRE Portfolio | Percent of Total Loan Portfolio | ||||||
| Industrial warehouse | $ | 104,005 | 19 | % | 8 | % | |||
| Medical/dental offices | 76,706 | 14 | 6 | ||||||
| Office buildings | 69,805 | 13 | 6 | ||||||
| Other retail buildings | 46,516 | 9 | 4 | ||||||
| Restaurants | 29,394 | 6 | 2 | ||||||
| Hotel/motel | 25,676 | 5 | 2 | ||||||
| Mini-storage | 24,697 | 5 | 2 | ||||||
| Convenience stores | 22,850 | 4 | 2 | ||||||
| Nursing homes | 18,415 | 3 | 1 | ||||||
| Shopping centers | 10,537 | 2 | 1 | ||||||
| Mobile home parks | 10,454 | 2 | 1 | ||||||
| Churches | 8,006 | 1 | 1 | ||||||
| Additional CRE | 89,589 | 17 | 7 | ||||||
| Total CRE | $ | 536,650 | 100 | % | 43 | % | |||
Timberland originated
Timberland’s investment securities and CDs held for investment increased
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
Total deposits decreased
| Deposit Breakdown ($ in thousands) | ||||||||||||||||||||||||||||
| September 30, 2022 | June 30, 2022 | September 30, 2021 | ||||||||||||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | |||||||||||||||||||||||
| Non-interest-bearing demand | $ | 530,058 | 33 | % | $ | 527,876 | 32 | % | $ | 535,212 | 34 | % | ||||||||||||||||
| NOW checking | 447,779 | 28 | 474,217 | 29 | 430,097 | 27 | ||||||||||||||||||||||
| Savings | 283,219 | 17 | 279,592 | 17 | 260,689 | 17 | ||||||||||||||||||||||
| Money market | 243,919 | 15 | 251,451 | 15 | 199,045 | 13 | ||||||||||||||||||||||
| Money market – reciprocal | 4,617 | -- | 5,533 | -- | 11,383 | 1 | ||||||||||||||||||||||
| Certificates of deposit under | 100,754 | 6 | 102,752 | 6 | 112,348 | 7 | ||||||||||||||||||||||
| Certificates of deposit | 21,830 | 1 | 22,693 | 1 | 21,781 | 1 | ||||||||||||||||||||||
| Total deposits | $ | 1,632,176 | 100 | % | $ | 1,664,114 | 100 | % | $ | 1,570,555 | 100 | % | ||||||||||||||||
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 improved to
The allowance for loan losses (“ALL”) as a percentage of loans receivable was
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:
| Sept. 30, | June 30, | Sept. 30, | |||||||
| 2022 | 2022 | 2021 | |||||||
| ALL to loans receivable | 1.20 | % | 1.22 | % | 1.37 | % | |||
| ALL to loans receivable (excluding SBA PPP loans) (non-GAAP) | 1.20 | % | 1.22 | % | 1.43 | % | |||
| ALL to loans receivable (excluding SBA PPP loans and South Sound Acquisition loans) (non-GAAP) | 1.22 | % | 1.25 | % | 1.49 | % | |||
Total delinquent loans (past due 30 days or more) and non-accrual loans decreased
Non-Accrual Loans
($ in thousands)
| September 30, 2022 | June 30, 2022 | September 30, 2021 | ||||||||||||
| Amount | Quantity | Amount | Quantity | Amount | Quantity | |||||||||
| Mortgage loans: | ||||||||||||||
| One- to four-family | $ | 388 | 2 | $ | 393 | 2 | $ | 406 | 2 | |||||
| Commercial | 657 | 2 | 671 | 2 | 773 | 2 | ||||||||
| Land | 450 | 2 | 651 | 3 | 683 | 3 | ||||||||
| Total mortgage loans | 1,495 | 6 | 1,715 | 7 | 1,862 | 7 | ||||||||
| Consumer loans | ||||||||||||||
| Home equity and second mortgage | 252 | 2 | 260 | 2 | 516 | 5 | ||||||||
| Other | 3 | 1 | 4 | 1 | 17 | 2 | ||||||||
| Total consumer loans | 255 | 3 | 264 | 3 | 533 | 7 | ||||||||
| Commercial business loans | 309 | 6 | 312 | 6 | 459 | 6 | ||||||||
| Total loans | $ | 2,059 | 15 | $ | 2,291 | 16 | $ | 2,854 | 20 | |||||
At September 30, 2022 and June 30, 2022, the OREO and other repossessed asset portfolio consisted of two individual land parcels that have been written down to a book value of
OREO and Other Repossessed Assets
($ in thousands)
| Sept. 30, 2022 | June 30, 2022 | Sept. 30, 2021 | ||||||||||||
| Amount | Quantity | Amount | Quantity | Amount | Quantity | |||||||||
| Land | $ | -- | 2 | $ | -- | 2 | $ | 157 | 3 | |||||
| Total | $ | -- | 2 | $ | -- | 2 | $ | 157 | 3 | |||||
Acquisition of South Sound Bank
On October 1, 2018, the Company completed the acquisition of South Sound Bank, a Washington-state chartered bank, headquartered in Olympia, Washington (“South Sound Acquisition”). The Company acquired
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, plan, objectives, future performance or business. Forward-looking statements are not statements of historical fact, are based on certain assumptions and often include the words “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,” “plans,” “targets,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would” and “could.” Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, assumptions and statements about future economic performance. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause our actual results to differ materially from the results anticipated or implied by our forward-looking statements, including, but not limited to: the effect of the novel coronavirus of 2019 (“COVID-19”) pandemic, including the Company’s credit quality and business operations, as well as its impact on general economic and financial market conditions and other uncertainties resulting from the COVID-19 pandemic, such as the extent and duration of the impact on public health, the U.S. and global economies, and consumer and corporate customers, including economic activity, employment levels and market liquidity; the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs and changes in our allowance for loan losses and provision for loan losses that may be impacted by deterioration in the housing and commercial real estate markets which may lead to increased losses and non-performing assets in our loan portfolio, and may result in our allowance for loan losses not being adequate to cover actual losses, and require us to materially increase our loan loss reserves; changes in general economic conditions, either nationally or in our market areas; changes in the levels of general interest rates, and the relative differences between short and long term interest rates, deposit interest rates, our net interest margin and funding sources; uncertainty regarding the future of the London Interbank Offered Rate (“LIBOR”), and the potential transition away from LIBOR toward new interest rate benchmarks; fluctuations in the demand for loans, the number of unsold homes, land and other properties and fluctuations in real estate values in our market areas; secondary market conditions for loans and our ability to sell loans in the secondary market; results of examinations of us by the Federal Reserve and our bank subsidiary by the Federal Deposit Insurance Corporation, the Washington State Department of Financial Institutions, Division of Banks or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, institute a formal or informal enforcement action against us or our bank subsidiary which could require us to increase our allowance for loan losses, write-down assets, change our regulatory capital position or affect our ability to borrow funds or maintain or increase deposits or impose additional requirements or restrictions on us, any of which could adversely affect our liquidity and earnings; legislative or regulatory changes that adversely affect our business including changes in regulatory policies and principles, or the interpretation of regulatory capital or other rules including as a result of Basel III; the impact of the Dodd Frank Wall Street Reform and Consumer Protection Act and implementing regulations; our ability to attract and retain deposits; our ability to control operating costs and expenses; the use of estimates in determining fair value of certain of our assets, which estimates may prove to be incorrect and result in significant declines in valuation; difficulties in reducing risk associated with the loans on our consolidated balance sheet; staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our work force and potential associated charges; disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform several of our critical processing functions; our ability to retain key members of our senior management team; costs and effects of litigation, including settlements and judgments; our ability to implement our business strategies; our ability to manage loan delinquency rates; increased competitive pressures among financial services companies; changes in consumer spending, borrowing and savings habits; the availability of resources to address changes in laws, rules, or regulations or to respond to regulatory actions; our ability to pay dividends on our common and stock; adverse changes in the securities markets; inability of key third-party providers to perform their obligations to us; changes in accounting policies and practices, as may be adopted by the financial institution regulatory agencies or the Financial Accounting Standards Board (“FASB”), including additional guidance and interpretation on accounting issues and details of the implementation of new accounting methods; the economic impact of war or any terrorist activities; other economic, competitive, governmental, regulatory, and technological factors affecting our operations; pricing, products and services including the Coronavirus Aid, Relief, and Economic Security Act of 2020 (“CARES Act”), the Consolidated Appropriations Act, 2021 (“CAA”), and the American Rescue Plan Act of 2021; and other risks detailed in our reports filed with the Securities and Exchange Commission.
Any of the forward-looking statements that we make in this press release and in the other public statements we make are based upon management’s beliefs and assumptions at the time they are made. We do not undertake and specifically disclaim any obligation to publicly update or revise any forward-looking statements included in this report to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking statements discussed in this document might not occur and we caution readers not to place undue reliance on any forward-looking statements. These risks could cause our actual results for fiscal 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 SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME | Three Months Ended | ||||||||||
| ($ in thousands, except per share amounts) (unaudited) | Sept. 30, | June 30, | Sept. 30, | ||||||||
| 2022 | 2022 | 2021 | |||||||||
| Interest and dividend income | |||||||||||
| Loans receivable | $ | 13,454 | $ | 12,628 | $ | 13,132 | |||||
| Investment securities | 1,476 | 1,016 | 318 | ||||||||
| Dividends from mutual funds, FHLB stock and other investments | 40 | 25 | 28 | ||||||||
| Interest bearing deposits in banks | 2,048 | 958 | 301 | ||||||||
| Total interest and dividend income | 17,018 | 14,627 | 13,779 | ||||||||
| Interest expense | |||||||||||
| Deposits | 755 | 645 | 654 | ||||||||
| Borrowings | -- | -- | 15 | ||||||||
| Total interest expense | 755 | 645 | 669 | ||||||||
| Net interest income | 16,263 | 13,982 | 13,110 | ||||||||
| Provision for loan losses | 270 | -- | -- | ||||||||
| Net interest income after provision for loan losses | 15,993 | 13,982 | 13,110 | ||||||||
| Non-interest income | |||||||||||
| Service charges on deposits | 985 | 1,052 | 967 | ||||||||
| ATM and debit card interchange transaction fees | 1,341 | 1,345 | 1,329 | ||||||||
| Gain on sales of loans, net | 173 | 258 | 537 | ||||||||
| Bank owned life insurance (“BOLI”) net earnings | 157 | 151 | 152 | ||||||||
| Valuation recovery on loan servicing rights, net | -- | -- | 87 | ||||||||
| Recoveries on investment securities, net | 6 | 5 | 5 | ||||||||
| Other | 334 | 291 | 373 | ||||||||
| Total non-interest income, net | 2,996 | 3,102 | 3,450 | ||||||||
| Non-interest expense | |||||||||||
| Salaries and employee benefits | 5,210 | 5,243 | 4,805 | ||||||||
| Premises and equipment | 934 | 898 | 993 | ||||||||
| Advertising | 182 | 187 | 153 | ||||||||
| OREO and other repossessed assets, net | 1 | (2 | ) | 2 | |||||||
| ATM and debit card processing | 514 | 515 | 489 | ||||||||
| Postage and courier | 137 | 140 | 159 | ||||||||
| State and local taxes | 308 | 265 | 267 | ||||||||
| Professional fees | 574 | 580 | 331 | ||||||||
| FDIC insurance expense | 129 | 123 | 113 | ||||||||
| Loan administration and foreclosure | 128 | 180 | 153 | ||||||||
| Data processing and telecommunications | 739 | 698 | 642 | ||||||||
| Deposit operations | 358 | 316 | 273 | ||||||||
| Amortization of core deposit intangible (“CDI”) | 79 | 79 | 90 | ||||||||
| Other, net | 861 | 652 | 547 | ||||||||
| Total non-interest expense, net | 10,154 | 9,874 | 9,017 | ||||||||
| Income before income taxes | 8,835 | 7,210 | 7,543 | ||||||||
| Provision for income taxes | 1,786 | 1,472 | 1,525 | ||||||||
| Net income | $ | 7,049 | $ | 5,738 | $ | 6,018 | |||||
| Net income per common share: | |||||||||||
| Basic | $ | 0.86 | $ | 0.69 | $ | 0.72 | |||||
| Diluted | 0.85 | 0.69 | 0.71 | ||||||||
| Weighted average common shares outstanding: | |||||||||||
| Basic | 8,243,557 | 8,279,436 | 8,354,018 | ||||||||
| Diluted | 8,313,178 | 8,349,859 | 8,454,636 | ||||||||
| TIMBERLAND BANCORP INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME | Year Ended | ||||||||||
| ($ in thousands, except per share amounts) (unaudited) | Sept. 30, | Sept. 30, | |||||||||
| 2022 | 2021 | ||||||||||
| Interest and dividend income | |||||||||||
| Loans receivable | $ | 51,324 | $ | 52,539 | |||||||
| Investment securities | 3,488 | 1,195 | |||||||||
| Dividends from mutual funds, FHLB stock and other investments | 120 | 111 | |||||||||
| Interest bearing deposits in banks | 3,576 | 1,117 | |||||||||
| Total interest and dividend income | 58,508 | 54,962 | |||||||||
| Interest expense | |||||||||||
| Deposits | 2,657 | 3,013 | |||||||||
| Borrowings | 17 | 91 | |||||||||
| Total interest expense | 2,674 | 3,104 | |||||||||
| Net interest income | 55,834 | 51,858 | |||||||||
| Provision for loan losses | 270 | -- | |||||||||
| Net interest income after provision for loan losses | 55,564 | 51,858 | |||||||||
| Non-interest income | |||||||||||
| Service charges on deposits | 3,964 | 3,911 | |||||||||
| ATM and debit card interchange transaction fees | 5,210 | 5,084 | |||||||||
| Gain on sales of loans, net | 1,510 | 5,904 | |||||||||
| BOLI net earnings | 613 | 597 | |||||||||
| Valuation recovery on loan servicing rights, net | 119 | 110 | |||||||||
| Recoveries on investment securities, net | 22 | 20 | |||||||||
| Other | 1,186 | 1,535 | |||||||||
| Total non-interest income, net | 12,624 | 17,161 | |||||||||
| Non-interest expense | |||||||||||
| Salaries and employee benefits | 20,816 | 18,750 | |||||||||
| Premises and equipment | 3,749 | 3,942 | |||||||||
| Advertising | 695 | 625 | |||||||||
| OREO and other repossessed assets, net | (17 | ) | (87 | ) | |||||||
| ATM and debit card processing | 1,943 | 1,831 | |||||||||
| Postage and courier | 577 | 587 | |||||||||
| State and local taxes | 1,062 | 1,088 | |||||||||
| Professional fees | 1,747 | 1,006 | |||||||||
| FDIC insurance expense | 506 | 415 | |||||||||
| Loan administration and foreclosure | 508 | 471 | |||||||||
| Data processing and telecommunications | 2,719 | 2,510 | |||||||||
| Deposit operations | 1,235 | 1,091 | |||||||||
| Amortization of CDI | 316 | 361 | |||||||||
| Other, net | 2,770 | 2,001 | |||||||||
| Total non-interest expense, net | 38,626 | 34,591 | |||||||||
| Income before income taxes | 29,562 | 34,428 | |||||||||
| Provision for income taxes | 5,962 | 6,845 | |||||||||
| Net income | $ | 23,600 | $ | 27,583 | |||||||
| Net income per common share: | |||||||||||
| Basic | $ | 2.84 | $ | 3.31 | |||||||
| Diluted | 2.82 | 3.27 | |||||||||
| Weighted average common shares outstanding: | |||||||||||
| Basic | 8,304,002 | 8,340,983 | |||||||||
| Diluted | 8,383,335 | 8,444,333 | |||||||||
| TIMBERLAND BANCORP INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS | |||||||||||||
| ($ in thousands, except per share amounts) (unaudited) | Sept. 30, | June 30, | Sept. 30, | ||||||||||
| 2022 | 2022 | 2021 | |||||||||||
| Assets | |||||||||||||
| Cash and due from financial institutions | $ | 24,808 | $ | 23,610 | $ | 26,316 | |||||||
| Interest-bearing deposits in banks | 291,947 | 398,541 | 553,880 | ||||||||||
| Total cash and cash equivalents | 316,755 | 422,151 | 580,196 | ||||||||||
| Certificates of deposit (“CDs”) held for investment, at cost | 22,894 | 23,888 | 28,482 | ||||||||||
| Investment securities: | |||||||||||||
| Held to maturity, at amortized cost | 266,608 | 228,196 | 69,102 | ||||||||||
| Available for sale, at fair value | 41,415 | 45,141 | 63,176 | ||||||||||
| Investments in equity securities, at fair value | 835 | 872 | 955 | ||||||||||
| FHLB stock | 2,194 | 2,194 | 2,103 | ||||||||||
| Other investments, at cost | 3,000 | 3,000 | 3,000 | ||||||||||
| Loans held for sale | 748 | 700 | 3,217 | ||||||||||
| Loans receivable | 1,146,129 | 1,101,400 | 981,923 | ||||||||||
| Less: Allowance for loan losses | (13,703 | ) | (13,433 | ) | (13,469 | ) | |||||||
| Net loans receivable | 1,132,426 | 1,087,967 | 968,454 | ||||||||||
| Premises and equipment, net | 21,898 | 22,154 | 22,367 | ||||||||||
| OREO and other repossessed assets, net | -- | -- | 157 | ||||||||||
| BOLI | 22,806 | 22,649 | 22,193 | ||||||||||
| Accrued interest receivable | 4,483 | 4,319 | 3,745 | ||||||||||
| Goodwill | 15,131 | 15,131 | 15,131 | ||||||||||
| CDI | 948 | 1,027 | 1,264 | ||||||||||
| Loan servicing rights, net | 3,023 | 3,220 | 3,482 | ||||||||||
| Operating lease right-of-use assets | 1,980 | 2,051 | 2,283 | ||||||||||
| Other assets | 3,364 | 3,135 | 2,873 | ||||||||||
| Total assets | $ | 1,860,508 | $ | 1,887,795 | $ | 1,792,180 | |||||||
| Liabilities and shareholders’ equity | |||||||||||||
| Deposits: Non-interest-bearing demand | $ | 530,058 | $ | 527,876 | $ | 535,212 | |||||||
| Deposits: Interest-bearing | 1,102,118 | 1,136,238 | 1,035,343 | ||||||||||
| Total deposits | 1,632,176 | 1,664,114 | 1,570,555 | ||||||||||
| Operating lease liabilities | 2,066 | 2,135 | 2,359 | ||||||||||
| FHLB borrowings | -- | -- | 5,000 | ||||||||||
| Other liabilities and accrued expenses | 7,697 | 7,227 | 7,367 | ||||||||||
| Total liabilities | 1,641,939 | 1,673,476 | 1,585,281 | ||||||||||
| Shareholders’ equity | |||||||||||||
| Common stock, $.01 par value; 50,000,000 shares authorized; 8,221,952 shares issued and outstanding – September 30, 2022 8,249,448 shares issued and outstanding – June 30, 2022 8,355,469 shares issued and outstanding – September 30, 2021 | 38,751 | 39,585 | 42,673 | ||||||||||
| Retained earnings | 180,535 | 175,299 | 164,167 | ||||||||||
| Accumulated other comprehensive income (loss) | (717 | ) | (565 | ) | 59 | ||||||||
| Total shareholders’ equity | 218,569 | 214,319 | 206,899 | ||||||||||
| Total liabilities and shareholders’ equity | $ | 1,860,508 | $ | 1,887,795 | $ | 1,792,180 | |||||||
KEY FINANCIAL RATIOS AND DATA | Three Months Ended | |||||||||||
| ($ in thousands, except per share amounts) (unaudited) | Sept. 30, | June 30, | Sept. 30, | |||||||||
| 2022 | 2022 | 2021 | ||||||||||
| PERFORMANCE RATIOS: | ||||||||||||
| Return on average assets (a) | 1.51 | % | 1.22 | % | 1.36 | % | ||||||
| Return on average equity (a) | 13.06 | % | 10.80 | % | 11.77 | % | ||||||
| Net interest margin (a) | 3.64 | % | 3.11 | % | 3.13 | % | ||||||
| Efficiency ratio | 52.72 | % | 57.80 | % | 54.45 | % | ||||||
| Year Ended | ||||||||||||
| Sept. 30, | Sept. 30, | |||||||||||
| 2022 | 2021 | |||||||||||
| PERFORMANCE RATIOS: | ||||||||||||
| Return on average assets | 1.27 | % | 1.64 | % | ||||||||
| Return on average equity | 11.14 | % | 13.98 | % | ||||||||
| Net interest margin | 3.16 | % | 3.25 | % | ||||||||
| Efficiency ratio | 56.42 | % | 50.12 | % | ||||||||
| Three Months Ended | ||||||||||||
| Sept. 30, | June 30, | Sept. 30, | ||||||||||
| ASSET QUALITY RATIOS AND DATA: | 2022 | 2022 | 2021 | |||||||||
| Non-accrual loans | $ | 2,059 | $ | 2,291 | $ | 2,854 | ||||||
| Loans past due 90 days and still accruing | -- | -- | -- | |||||||||
| Non-performing investment securities | 106 | 114 | 159 | |||||||||
| OREO and other repossessed assets | -- | -- | 157 | |||||||||
| Total non-performing assets (b) | $ | 2,165 | $ | 2,405 | $ | 3,170 | ||||||
| Non-performing assets to total assets (b) | 0.12 | % | 0.13 | % | 0.18 | % | ||||||
| Net charge-offs (recoveries) during quarter | $ | -- | $ | -- | $ | -- | ||||||
| ALL to non-accrual loans, | 665.52 | % | 586.34 | % | 471.93 | % | ||||||
| ALL to loans receivable (c) | 1.20 | % | 1.22 | % | 1.37 | % | ||||||
| ALL to loans receivable (excluding SBA PPP loans) (d) (non-GAAP) | 1.20 | % | 1.22 | % | 1.43 | % | ||||||
| ALL to loans receivable (excluding SBA PPP loans and South Sound Acquisition loans) (d) (e) (non-GAAP) | 1.22 | % | 1.25 | % | 1.49 | % | ||||||
| Troubled debt restructured loans on accrual status (f) | $ | 2,472 | $ | 2,484 | $ | 2,371 | ||||||
| CAPITAL RATIOS: | ||||||||||||
| Tier 1 leverage capital | 11.03 | % | 10.72 | % | 10.97 | % | ||||||
| Tier 1 risk-based capital | 18.02 | % | 18.57 | % | 20.92 | % | ||||||
| Common equity Tier 1 risk-based capital | 18.02 | % | 18.57 | % | 20.92 | % | ||||||
| Total risk-based capital | 19.45 | % | 19.82 | % | 22.17 | % | ||||||
| Tangible common equity to tangible assets (non-GAAP) | 10.98 | % | 10.59 | % | 10.73 | % | ||||||
| BOOK VALUES: | ||||||||||||
| Book value per common share | $ | 26.58 | $ | 25.98 | $ | 24.76 | ||||||
| Tangible book value per common share (g) | 24.63 | 24.02 | 22.80 | |||||||||
________________________________________________
(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 | |||||||||||||||||||||||||
| September 30, 2022 | June 30, 2022 | September 30, 2021 | |||||||||||||||||||||||
| Amount | Rate | Amount | Rate | Amount | Rate | ||||||||||||||||||||
| Assets | |||||||||||||||||||||||||
| Loans receivable and loans held for sale | $ | 1,122,290 | 4.80 | % | $ | 1,072,933 | 4.71 | % | $ | 1,000,063 | 5.25 | % | |||||||||||||
| Investment securities and FHLB stock (1) | 287,841 | 2.11 | 263,595 | 1.58 | 125,627 | 1.10 | |||||||||||||||||||
| Interest-earning deposits in banks and CDs | 376,220 | 2.18 | 460,657 | 0.83 | 551,918 | 0.22 | |||||||||||||||||||
| Total interest-earning assets | 1,786,351 | 3.81 | 1,797,185 | 3.26 | 1,677,608 | 3.29 | |||||||||||||||||||
| Other assets | 83,922 | 85,470 | 86,838 | ||||||||||||||||||||||
| Total assets | $ | 1,870,273 | $ | 1,882,655 | $ | 1,764,446 | |||||||||||||||||||
| Liabilities and Shareholders’ Equity | |||||||||||||||||||||||||
| NOW checking accounts | $ | 454,161 | 0.18 | % | $ | 462,085 | 0.14 | % | $ | 421,095 | 0.13 | % | |||||||||||||
| Money market accounts | 252,699 | 0.37 | 258,240 | 0.30 | 202,435 | 0.29 | |||||||||||||||||||
| Savings accounts | 284,974 | 0.08 | 284,659 | 0.08 | 257,856 | 0.08 | |||||||||||||||||||
| Certificates of deposit accounts | 122,803 | 0.80 | 125,132 | 0.75 | 137,518 | 0.91 | |||||||||||||||||||
| Total interest-bearing deposits | 1,114,637 | 0.27 | 1,130,116 | 0.23 | 1,018,904 | 0.26 | |||||||||||||||||||
| Borrowings | -- | -- | -- | -- | 5,000 | 1.19 | |||||||||||||||||||
| Total interest-bearing liabilities | 1,114,637 | 0.27 | 1,130,116 | 0.23 | 1,023,904 | 0.26 | |||||||||||||||||||
| Non-interest-bearing demand deposits | 528,706 | 529,770 | 525,047 | ||||||||||||||||||||||
| Other liabilities | 11,078 | 10,170 | 10,991 | ||||||||||||||||||||||
| Shareholders’ equity | 215,852 | 212,599 | 204,504 | ||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 1,870,273 | $ | 1,882,655 | $ | 1,764,446 | |||||||||||||||||||
| Interest rate spread | 3.54 | % | 3.03 | % | 3.03 | % | |||||||||||||||||||
| Net interest margin (2) | 3.64 | % | 3.11 | % | 3.13 | % | |||||||||||||||||||
| Average interest-earning assets to average interest-bearing liabilities | 160.26 | % | 159.03 | % | 163.84 | % | |||||||||||||||||||
_____________________________________
(1) Includes other investments
(2) Net interest margin = annualized net interest income / average interest-earning assets
AVERAGE BALANCES, YIELDS, AND RATES
($ in thousands)
(unaudited)
| For the Year Ended | ||||||||||||||||
| September 30, 2022 | September 30, 2021 | |||||||||||||||
| Amount | Rate | Amount | Rate | |||||||||||||
| Assets | ||||||||||||||||
| Loans receivable and loans held for sale | $ | 1,055,635 | 4.86 | % | $ | 1,026,742 | 5.12 | % | ||||||||
| Investment securities and FHLB stock (1) | 230,871 | 1.56 | 109,317 | 1.19 | ||||||||||||
| Interest-earning deposits in banks and CDs | 482,162 | 0.74 | 459,145 | 0.25 | ||||||||||||
| Total interest-earning assets | 1,768,668 | 3.31 | 1,595,204 | 3.45 | ||||||||||||
| Other assets | 83,895 | 85,939 | ||||||||||||||
| Total assets | $ | 1,852,563 | $ | 1,681,143 | ||||||||||||
| Liabilities and Shareholders’ Equity | ||||||||||||||||
| NOW checking accounts | $ | 449,574 | 0.14 | % | $ | 402,430 | 0.15 | % | ||||||||
| Money market accounts | 244,498 | 0.31 | 186,489 | 0.30 | ||||||||||||
| Savings accounts | 278,025 | 0.08 | 242,598 | 0.08 | ||||||||||||
| Certificates of deposit accounts | 127,277 | 0.79 | 145,006 | 1.14 | ||||||||||||
| Total interest-bearing deposits | 1,099.374 | 0.24 | 976,523 | 0.31 | ||||||||||||
| Borrowings | 1,430 | 1.19 | 7,686 | 1.18 | ||||||||||||
| Total interest-bearing liabilities | 1,100,804 | 0.24 | 984,209 | 0.32 | ||||||||||||
| Non-interest-bearing demand deposits | 529,702 | 488,833 | ||||||||||||||
| Other liabilities | 10,224 | 10,816 | ||||||||||||||
| Shareholders’ equity | 211,833 | 197,285 | ||||||||||||||
| Total liabilities and shareholders’ equity | $ | 1,852,563 | $ | 1,681,143 | ||||||||||||
| Interest rate spread | 3.07 | % | 3.13 | % | ||||||||||||
| Net interest margin (2) | 3.16 | % | 3.25 | % | ||||||||||||
| Average interest-earning assets to average interest-bearing liabilities | 160.67 | % | 162.08 | % | ||||||||||||
_____________________________________
(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) | September 30, 2022 | June 30, 2022 | September 30, 2021 | |||||||||
| Shareholders’ equity | $ | 218,569 | $ | 214,319 | $ | 206,899 | ||||||
| Less goodwill and CDI | (16,079 | ) | (16,158 | ) | (16,395 | ) | ||||||
| Tangible common equity | $ | 202,490 | $ | 198,161 | $ | 190,504 | ||||||
| Total assets | $ | 1,860,508 | $ | 1,887,795 | $ | 1,792,180 | ||||||
| Less goodwill and CDI | (16,079 | ) | (16,158 | ) | (16,395 | ) | ||||||
| Tangible assets | $ | 1,844,429 | $ | 1,871,637 | $ | 1,775,785 | ||||||
| Contact: | Michael R. Sand, CEO |
| Dean J. Brydon, President & CFO | |
| (360) 533-4747 | |
| www.timberlandbank.com |
FAQ
What was Timberland Bancorp's quarterly EPS for Q4 2022?
How did Timberland Bancorp's net income change in Q4 2022?
What dividends did Timberland Bancorp declare for Q4 2022?
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What is the loan growth percentage for Timberland Bancorp year-over-year?
