Timberland Bancorp, Inc. (NASDAQ: TSBK) (“Timberland” or “the
Company”) today reported that net income increased 44% to $7.25
million for the quarter ended March 31, 2021 from $5.05 million for
the comparable quarter one year ago, which quarter was affected by
a $2.00 million ($1.58 million after income taxes) provision to the
loan loss reserves, and decreased slightly from $7.29 million for
the preceding quarter. Earnings per diluted common share (“EPS”)
increased 43% to $0.86 for the current quarter from $0.60 for the
comparable quarter one year ago and decreased 1% from $0.87 for the
preceding quarter.
For the first six months of fiscal 2021, Timberland earned a
record $14.54 million, or $1.73 per diluted common share, a 24%
increase in net income and a 25% increase in EPS from $11.70
million, or $1.38 per diluted common share for the first six months
of fiscal 2020, which six month period was affected by a $2.20
million ($1.74 million after income taxes) to the loan loss
reserves.
Timberland’s Board of Directors declared a quarterly cash
dividend to shareholders of $0.21 per common share payable on May
28, 2021, to shareholders of record on May 14, 2021.
“We are pleased to report strong financial metrics for the
recently concluded quarter and, for the first six months of fiscal
2021, record Company profitability,” stated Michael Sand, President
and CEO. “Paycheck Protection Program (“PPP”) loan proceeds and
federal stimulus payments contributed to strong deposit growth of
$106.7 million for the quarter and $356.2 million during the past
twelve months. The 32% increase in deposits year-over-year has
increased the Bank’s liquidity significantly beyond the level we
would normally hold. While loan originations have been strong we
have chosen to sell most fixed-rate conforming mortgage loans in
this extended low-rate interest environment and have been subject
to prepayment activity typically expected during a period of lower
interest rates. Given Federal Reserve Chairman Powell’s recent
assertion that tapering would begin well before the Fed raises the
overnight rate, we anticipate generally rising interest rates, a
slowing of prepayment activity and fixed income investment
opportunities more palatable than have been available during the
past year. We are encouraged by the level of increased business
activity in our markets and the increased activity we are seeing in
our loan pipeline.”
“Our focus since the onslaught of the pandemic has been to
support the businesses and their employees in our communities. To
this end, staff has worked diligently throughout these difficult
times to originate new PPP loans and to also file applications for
PPP loan forgiveness,” said Sand. “During the quarter, we
originated $58.70 million in PPP loans under the new round of PPP.
This new round of funding offers assistance to companies that did
not receive PPP funding last calendar year and also makes available
additional loans targeted at hard hit businesses that previously
obtained a PPP loan and need further assistance. We continue to
actively submit forgiveness requests in support of our clients that
received PPP loans in 2020, with nearly all forgiveness applicants
obtaining full forgiveness from the Small Business Administration
(“SBA”). With state mandated phased COVID guidelines allowing
businesses in Washington State to move towards more normal
operations and a robust vaccine rollout, we are encouraged by the
potential for hard hit individuals and businesses to begin
recovering financially during the remainder of the year.”
“To provide needed support to businesses in our communities, we
continue to work with COVID affected borrowers to appropriately
defer loans and provide them with the much-needed economic relief,”
added Sand. “At March 31, 2021, we had eight loans remaining in a
deferred payment status representing approximately 1.3% of net
loans outstanding.” Five of the remaining deferred loans are
receiving interest payments monthly.”
Second Fiscal Quarter 2021 Earnings and Balance Sheet
Highlights (at or for the period ended March 31, 2021,
compared to December 31, 2020 or March 31, 2020):
Earnings Highlights:
- Net income increased 44% to $7.25 million for the current
quarter from $5.05 million for the comparable quarter one year ago
and decreased 1% from $7.29 million for the preceding quarter; EPS
increased 43% to $0.86 for the current quarter from $0.60 for the
comparable quarter one year ago and decreased 1% from $0.87 for the
preceding quarter;
- Net income increased 24% to $14.54 million for the first six
months of fiscal 2021 from $11.70 million for the first six months
of fiscal 2020; EPS increased 25% to $1.73 for the first six months
of fiscal 2021 from $1.38 for the first six months of fiscal
2020;
- Return on average equity (“ROE”) and return on average assets
(“ROA”) for the current quarter were 14.89% and 1.75%,
respectively;
- Net interest margin was 3.21% for the current quarter compared
to 3.48% for the preceding quarter and 4.27% for the comparable
quarter one year ago; and
- The efficiency ratio was 48.99% for the current quarter
compared to 47.83% for the preceding quarter and 50.04% for the
comparable quarter one year ago.
Balance Sheet Highlights:
- Total assets increased 28% year-over-year and 7% from the prior
quarter;
- Total deposits increased 32% year-over-year and 8% from the
prior quarter;
- Net loans receivable increased 14% year-over-year and 2% from
the prior quarter;
- Non-performing assets to total assets ratio improved to 0.16%;
and
- Book and tangible book (non-GAAP) values per common share
increased to $23.75 and $21.76, respectively, at March 31,
2021.
Operating Results
Operating revenue (net interest income before the
provision for loan losses plus non-interest income) increased 5% to
$17.46 million for the current quarter from $16.56 million for the
comparable quarter one year ago and decreased 1% from $17.58
million for the preceding quarter. Operating revenue increased 5%
to $35.04 million for the first six months of fiscal 2021 from
$33.50 million for the comparable period one year ago.
Net interest income decreased 4% to $12.57 million
for the current quarter from $13.02 million for the preceding
quarter and decreased 2% from $12.88 million for the comparable
quarter one year ago. Timberland’s net
interest margin (“NIM”) for the current quarter was 3.21% compared
to 3.48% for the preceding quarter and 4.27% for the comparable
quarter one year ago. NIM compression
has largely been a result of the low interest rate environment and
an increase in the level of liquidity being held in overnight
funds. The NIM for the current quarter was increased by
approximately six basis points due to the accretion of $86,000 of
the fair value discount on loans acquired in the South Sound
Acquisition and the collection of $129,000 in pre-payment
penalties, non-accrual interest, and late fees. The NIM for the
preceding quarter was increased by approximately nine basis points
due to the accretion of $120,000 of the fair value discount on
loans acquired in the South Sound Acquisition and the collection of
$196,000 in pre-payment penalties, non-accrual interest and late
fees. The NIM for the comparable quarter one year ago was increased
by approximately 15 basis points due to the accretion of $107,000
of the fair value discount on loans acquired in the South Sound
Acquisition and the collection of $320,000 in pre-payment
penalties, non-accrual interest and late
fees. Also affecting the net interest
income comparisons are PPP loans, which have a 1.00% interest rate
and associated loan origination fees, which are accreted into
interest income over the life of each loan. During the quarter
ended March 31, 2021, Timberland recorded interest income of
$306,000 on PPP loans and accreted PPP loan origination fees of
$1.14 million into income. During the
quarter ended December 31, 2020, Timberland recorded interest
income of $295,000 on PPP loans and accreted PPP loan origination
fees of $1.14 million into income. At
March 31, 2021, Timberland had PPP deferred loan origination fees
of $3.86 million remaining to be accreted into interest income
during the remaining life of the loans. Net interest income
decreased 1% to $25.59 million for the first six months of fiscal
2021 from $25.88 million for the first six months of fiscal 2020.
Timberland’s net interest margin for the first six months of fiscal
2021 was 3.34% compared to 4.35% for the first six months of fiscal
2020.
No provision for loan losses was made during the
current and preceding quarter compared to a $2.00 million provision
for loan losses for the comparable quarter one year ago.
Non-interest income increased 33% to $4.89 million
for the current quarter from $3.68 million for the comparable
quarter one year ago and increased 7% from $4.56 million for the
preceding quarter. The increase in non-interest income compared to
the preceding quarter was primarily due to a $438,000 valuation
recovery on servicing rights for the current quarter (compared to a
$236,000 valuation allowance on servicing rights for the preceding
quarter) and an $81,000 increase in ATM and debit card interchange
transaction fees. Partially offsetting these increases was a
$244,000 decrease in gain on sales of loans and a $114,000 decrease
in service charges on deposits. The recovery on servicing rights
was primarily due to a decrease in mortgage prepayment speeds as
mortgage interest rates increased during the quarter. The increase
in ATM and debit card interchange transaction fee income was
primarily due to increased volumes of debit card transactions. The
decrease in gain on sales of loans was primarily due to a decrease
in the dollar amount of fixed rate one- to four-family loans sold
during the current quarter and a decrease in the average pricing
spread. The decrease in service charges on deposits was primarily
due to a decrease in overdraft fee income. Fiscal year-to-date
non-interest income increased 24% to $9.45 million from $7.62
million for the first six months of fiscal 2020.
Total operating expenses for the current quarter
increased 2% to $8.55 million from $8.41 million for the preceding
quarter and increased 3% from $8.29 million for the comparable
quarter one year ago. The increase in
operating expenses compared to the preceding quarter was primarily
due to a $165,000 increase in salaries and employee benefits, a
$41,000 increase in premises and equipment and smaller increases in
several other categories. These increases were partially offset by
a $50,000 decrease in professional fees, a $42,000 decrease in OREO
expense and smaller decreases in several other expense
categories. The efficiency ratio for
the current quarter was 48.99% compared to 47.83% for the preceding
quarter and 50.04% for the comparable quarter one year
ago. Fiscal year-to-date operating
expenses increased 2% to $16.96 million from $16.66 million for the
first six months of fiscal 2020. The efficiency ratio for the first
six months of fiscal 2021 improved to 48.41% from 49.73% for the
first six months of fiscal 2020.
The provision for income taxes for the current quarter decreased
$231,000 to $1.65 million from $1.88 million for the preceding
quarter, primarily due to a $166,000 tax benefit from the
disposition of stock options and lower income before income
taxes. Timberland’s effective income tax rate was 18.6%
for the quarter ended March 31, 2021 compared to 20.5% for the
quarter ended December 31, 2020.
Balance Sheet Management
Total assets increased $110.84 million, or 7%, to $1.70 billion
at March 31, 2021 from $1.59 billion at December 31,
2020. The increase was primarily due to an $84.13
million increase in total cash and cash equivalents and a $23.37
million increase in net loans receivable, and smaller increases in
several other categories. The increase in total assets was funded
primarily by an increase in total deposits and by retained net
income.
Loans
Net loans receivable increased $23.37 million, or 2%, to $1.031
billion at March 31, 2021 from $1.007 billion at December 31, 2020.
The increase during the current quarter was primarily due to a
$34.71 million increase in PPP loan balances, and smaller increases
in several other categories. These increases were partially offset
by smaller decreases in several other categories.
Loan Portfolio($ in
thousands)
|
March 31, 2021 |
|
December 31, 2020 |
|
March 31, 2020 |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
Mortgage loans: |
|
|
|
|
|
|
|
|
|
|
|
One- to four-family (a) |
$ |
117,184 |
|
|
10 |
% |
|
$ |
115,613 |
|
|
10 |
% |
|
$ |
125,285 |
|
|
13 |
% |
Multi-family |
|
92,435 |
|
|
8 |
|
|
|
89,413 |
|
|
8 |
|
|
|
81,298 |
|
|
8 |
|
Commercial |
|
461,966 |
|
|
40 |
|
|
|
463,670 |
|
|
41 |
|
|
|
444,276 |
|
|
44 |
|
Construction - custom and owner/builder |
|
105,305 |
|
|
9 |
|
|
|
117,872 |
|
10 |
|
|
|
119,175 |
|
|
12 |
|
Construction - speculative one-to four-family |
|
17,289 |
|
|
2 |
|
|
|
20,291 |
|
|
2 |
|
|
|
14,679 |
|
|
1 |
|
Construction - commercial |
|
42,340 |
|
|
4 |
|
|
|
41,491 |
|
|
4 |
|
|
|
37,446 |
|
|
4 |
|
Construction - multi-family |
|
44,266 |
|
|
4 |
|
|
|
29,410 |
|
|
3 |
|
|
|
34,026 |
|
|
3 |
|
Construction - land development |
|
2,238 |
|
|
-- |
|
|
|
6,943 |
|
|
1 |
|
|
|
5,774 |
|
|
1 |
|
Land |
|
19,041 |
|
|
2 |
|
|
|
22,635 |
|
|
2 |
|
|
|
29,333 |
|
|
3 |
|
Total mortgage loans |
|
902,064 |
|
|
79 |
|
|
|
907,338 |
|
|
81 |
|
|
|
891,292 |
|
|
89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer loans: |
|
|
|
|
|
|
|
|
|
|
|
Home equity and second Mortgage |
|
32,026 |
|
|
3 |
|
|
|
35,446 |
|
|
3 |
|
|
|
38,972 |
|
|
4 |
|
Other |
|
2,756 |
|
|
-- |
|
|
|
2,979 |
|
|
-- |
|
|
|
3,829 |
|
|
-- |
|
Total consumer loans |
|
34,782 |
|
|
3 |
|
|
|
38,425 |
|
|
3 |
|
|
|
42,801 |
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans: |
|
|
|
|
|
|
|
|
|
|
|
Commercial business loans |
|
66,645 |
|
|
6 |
|
|
|
71,257 |
|
|
7 |
|
|
|
73,622 |
|
|
7 |
|
SBA PPP loans |
|
138,175 |
|
|
12 |
|
|
|
103,468 |
|
|
9 |
|
|
|
-- |
|
|
-- |
|
Total commercial loans |
|
204,820 |
|
|
18 |
|
|
|
174,725 |
|
|
16 |
|
|
|
73,622 |
|
|
7 |
|
Total loans |
|
1,141,666 |
|
|
100 |
% |
|
|
1,120,488 |
|
|
100 |
% |
|
|
1,007,715 |
|
|
100 |
% |
Less: |
|
|
|
|
|
|
|
|
|
|
|
Undisbursed portion of construction loans in process |
|
(90,550 |
) |
|
|
|
|
(94,298 |
) |
|
|
|
|
(85,474 |
) |
|
|
Deferred loan origination fees |
|
(6,999 |
) |
|
|
|
|
(5,449 |
) |
|
|
|
|
(2,694 |
) |
|
|
Allowance for loan losses |
|
(13,434 |
) |
|
|
|
|
(13,432 |
) |
|
|
|
|
(11,890 |
) |
|
|
Total loans receivable, net |
$ |
1,030,683 |
|
|
|
|
$ |
1,007,309 |
|
|
|
|
$ |
907,657 |
|
|
|
_______________________(a) Does not include
one- to four-family loans held for sale totaling $8,455, $10,871
and $5,798 at March 31, 2021, December 31, 2020 and March 31, 2020,
respectively.
The following table highlights eight commercial real estate
(“CRE”) segments generally presumed to have the potential to be
more adversely affected by work at home and COVID related social
distancing practices than other segments of the loan portfolio.
CRE Portfolio Breakdown by
Collateral($ in thousands)
Collateral Type |
|
Amount |
|
Percent of CRE Portfolio |
|
Percent of Total Loan Portfolio |
|
|
|
|
Office buildings |
|
$ |
74,067 |
|
16 |
% |
|
6 |
% |
|
|
|
|
Medical/dental offices |
|
|
64,081 |
|
14 |
|
|
6 |
|
|
|
|
|
Other retail buildings |
|
|
40,775 |
|
9 |
|
|
4 |
|
|
|
|
|
Hotels/motels |
|
|
26,481 |
|
6 |
|
|
2 |
|
|
|
|
|
Restaurants |
|
|
25,120 |
|
5 |
|
|
2 |
|
|
|
|
|
Nursing homes |
|
|
18,990 |
|
4 |
|
|
2 |
|
|
|
|
|
Shopping centers |
|
|
14,341 |
|
3 |
|
|
1 |
|
|
|
|
|
Churches |
|
|
12,214 |
|
3 |
|
|
1 |
|
|
|
|
|
Additional CRE |
|
|
185,897 |
|
40 |
|
|
16 |
|
|
|
|
|
Total CRE |
|
$ |
461,966 |
|
100 |
% |
|
40 |
% |
|
|
|
|
Within Timberland’s commercial business loan portfolio (non-CRE)
resides a segment of restaurant loans totaling $10.96 million in
outstanding balances at March 31, 2021. As additional security for
these loans, Timberland holds cash collateral of 25% of the
segment’s associated outstanding loan balances. Unless prior
arrangements are made, and Timberland consents, loans falling more
than four weeks delinquent are eligible for purchase from
Timberland’s portfolio in accordance with a Marketing and Servicing
Agreement in existence since March 6, 2014.
Timberland originated $167.15 million in loans (including $58.70
million of SBA PPP loans) during the quarter ended March 31, 2021,
compared to $100.47 million for the comparable quarter one year ago
and $156.57 million for the preceding quarter. Timberland continues
to sell fixed-rate one- to four-family mortgage loans into the
secondary market for asset-liability management purposes and to
generate non-interest income. Timberland also periodically sells
the guaranteed portion of SBA loans. During the current quarter,
fixed-rate one- to four-family mortgage loans totaling $41.29
million were sold compared to $27.49 million for the comparable
quarter one year ago and $43.84 million for the preceding quarter.
Timberland’s
investment securities and CDs held for investment increased $5.41
million, or 4%, to $146.28 million at March 31, 2021, from $140.87
million at December 31, 2020. The increase was primarily due to the
purchase of additional mortgage-backed investment securities and
was partially offset by CDs maturing during the quarter.
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 36.1%
of total liabilities at March 31, 2021, compared to 33.4% at
December 31, 2020, and 25.5% one year ago.
Deposits
Total deposits increased $106.74 million, or 8%, during the
current quarter to $1.48 billion at March 31, 2021, from $1.38
billion at December 31, 2020. The quarter’s increase consisted of a
$61.59 million increase in non-interest-bearing account balances, a
$23.78 million increase in savings account balances, a $16.65
million increase in NOW checking account balances and a $13.67
million in money market account balances. These increases were
partially offset by an $8.95 million decrease in certificates of
deposit account balances.
Deposit Breakdown($ in thousands) |
|
|
|
|
|
March 31, 2021 |
|
|
|
|
|
|
December 31, 2020 |
|
March 31, 2020 |
|
|
|
|
|
|
|
|
Amount |
|
|
|
Percent |
|
|
Amount |
|
Percent |
|
Amount |
|
|
Percent |
|
|
|
|
Non-interest-bearing demand |
|
$ |
499,541 |
|
34 |
% |
|
$ |
437,953 |
|
32 |
% |
|
$ |
316,328 |
|
28 |
% |
|
|
NOW checking |
|
|
403,811 |
|
27 |
|
|
|
387,158 |
|
28 |
|
|
|
308,165 |
|
27 |
|
|
|
Savings |
|
|
250,736 |
|
17 |
|
|
|
226,955 |
|
16 |
|
|
|
182,321 |
|
16 |
|
|
|
Money market |
|
|
171,896 |
|
11 |
|
|
|
158,928 |
|
12 |
|
|
|
133,839 |
|
12 |
|
|
|
Money market – reciprocal |
|
|
13,094 |
|
1 |
|
|
|
12,389 |
|
1 |
|
|
|
11,794 |
|
1 |
|
|
|
Certificates of deposit under
$250 |
|
|
119,388 |
|
8 |
|
|
|
124,789 |
|
9 |
|
|
|
138,906 |
|
13 |
|
|
|
Certificates of deposit $250 and
over |
|
|
23,393 |
|
2 |
|
|
|
26,944 |
|
2 |
|
|
|
31,088 |
|
3 |
|
|
|
Certificates of deposit –
brokered |
|
|
-- |
|
-- |
|
|
|
-- |
|
-- |
|
|
|
3,207 |
|
-- |
|
|
|
Total deposits |
|
$ |
1,481,859 |
|
|
|
100 |
% |
|
|
|
|
|
$ |
1,375,116 |
|
|
100 |
% |
|
|
|
$ |
1,125,648 |
|
|
|
100 |
% |
|
Shareholders’ Equity and Capital
Ratios
Total shareholders’ equity increased $5.22 million, or 3%, to
$198.54 million at March 31, 2021, from $193.33 million at December
31, 2020. The increase in shareholders’ equity was primarily due to
net income of $7.25 million for the quarter, which was partially
offset by the payment of $2.58 million in dividends to
shareholders. On February 24, 2021, the Company
announced a new stock repurchase program. Under the new repurchase
program, the Company may repurchase up to 5% of the Company’s
outstanding shares, or 415,970 shares. The new stock repurchase
program replaced the existing stock repurchase program, which had
141,952 shares available to be repurchased. There were no shares
repurchased during the quarter ended March 31, 2021.
Timberland remains well capitalized with a total
risk-based capital ratio of 20.72% and a Tier 1 leverage capital
ratio of 11.19% at March 31, 2021.
Asset Quality and Loan
Deferrals
Timberland’s non-performing assets to total assets
ratio improved to 0.16% at March 31, 2021 from 0.38% one year ago
and 0.19% at December 31, 2020. There were net recoveries of $2,000
for the current quarter compared to net recoveries of $18,000 for
the preceding quarter and net recoveries of $8,000 for the
comparable quarter one year ago. No
provisions for loan losses were made during the current and
preceding quarters compared to a $2.0 million provision for loan
losses for the comparable quarter one year ago.
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 $135.83 million (13.4% of
net loans receivable). However, the vast majority of borrowers that
were granted deferrals have resumed making regular payments and as
of March 31, 2021, only eight loans with balances totaling $12.88
million (1.3% of net loans receivable) remained on deferral status.
The following table details the COVID-19 loan modifications still
on deferral status as of March 31, 2021:
COVID-19 Loan
Modifications($ in thousands)
Industry / Collateral Type |
|
Amount |
|
Percent ofNet Loans Receivable |
Hotel |
|
$ |
8,789 |
|
0.85 |
% |
Industrial warehouse |
|
|
2,385 |
|
0.23 |
|
Construction – commercial
(hotel) |
|
|
1,517 |
|
0.15 |
|
Restaurant |
|
|
142 |
|
0.02 |
|
Entertainment facility |
|
|
33 |
|
-- |
|
Other consumer |
|
|
18 |
|
-- |
|
Total loan modifications |
|
$ |
12,884 |
|
1.25 |
% |
The allowance for loan losses (“ALL”) as a
percentage of loans receivable was 1.29% at March 31, 2021 compared
to 1.29% one year ago and 1.32% at December 31, 2020. If PPP loans,
which are 100% SBA guaranteed, are excluded, the ALL to loans
receivable (excluding PPP loans) at March 31, 2021 was 1.48%
(non-GAAP).
The ALL as a percentage of loans receivable is also
impacted by the loans acquired in the South Sound Acquisition.
Included in the recorded value of loans acquired in acquisitions
are net discounts which may reduce the need for an allowance for
loan losses on such loans because they are carried at an amount
below their outstanding principal balance. The initial recorded
value of loans acquired in the South Sound Acquisition was $123.62
million and the related fair value discount was $2.08 million, or
1.68% of the loans acquired. The remaining fair value discount on
loans acquired in the South Sound Acquisition was $583,000 at March
31, 2021. The allowance for loan losses to loans receivable
(excluding PPP loan balances and the remaining aggregate balance of
the loans acquired in the South Sound Acquisition) was 1.56%
(non-GAAP) at March 31, 2021.
The following table details the ALL as a percentage
of loans receivable:
|
|
March 31, |
|
Dec. 31, |
|
March 31, |
|
|
2021 |
|
|
2020 |
|
|
2020 |
|
ALL to loans
receivable |
|
1.29 |
% |
|
1.32 |
% |
|
1.29 |
% |
ALL to loans receivable
(excluding PPP loans) (non-GAAP) |
|
1.48 |
% |
|
1.46 |
% |
|
1.29 |
% |
ALL to loans receivable
(excluding PPP loans and South Sound Acquisition loans)
(non-GAAP) |
|
1.56 |
% |
|
1.56 |
% |
|
1.42 |
% |
Total delinquent loans (past due 30 days or more)
and non-accrual loans increased $495,000, or 14%, to $3.93 million
at March 31, 2021, from $3.43 million one year ago, and increased
$1.11 million, or 39%, from $2.82 million at December 31,
2020. Non-accrual loans decreased
$911,000, or 28%, to $2.31 million at March 31, 2021 from $3.22
million one year ago and decreased $276,000, or 11%, from $2.58
million at December 31, 2020.
Non-Accrual Loans($ in
thousands)
|
March 31, 2021 |
|
December 31, 2020 |
|
March 31, 2020 |
|
Amount |
|
Quantity |
|
Amount |
|
Quantity |
|
Amount |
|
Quantity |
Mortgage loans: |
|
|
|
|
|
|
|
|
|
|
|
One- to four-family |
$ |
415 |
|
2 |
|
$ |
419 |
|
2 |
|
$ |
941 |
|
5 |
Commercial |
|
643 |
|
2 |
|
|
643 |
|
3 |
|
|
947 |
|
3 |
Land |
|
173 |
|
2 |
|
|
405 |
|
4 |
|
|
193 |
|
2 |
Total mortgage loans |
|
1,231 |
|
6 |
|
|
1,467 |
|
9 |
|
|
2,081 |
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
Consumer loans |
|
|
|
|
|
|
|
|
|
|
|
Home equity and second |
|
|
|
|
|
|
|
|
|
|
|
mortgage |
|
539 |
|
6 |
|
|
607 |
|
7 |
|
|
581 |
|
6 |
Other |
|
8 |
|
1 |
|
|
9 |
|
1 |
|
|
11 |
|
1 |
Total consumer loans |
|
547 |
|
7 |
|
|
616 |
|
8 |
|
|
592 |
|
7 |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial business loans |
|
527 |
|
7 |
|
|
498 |
|
8 |
|
|
543 |
|
8 |
Total loans |
$ |
2,305 |
|
20 |
|
$ |
2,581 |
|
25 |
|
$ |
3,216 |
|
25 |
OREO and other repossessed assets decreased 90% to
$157,000 at March 31, 2021, from $1.62 million at March 31, 2020,
and decreased 41% from $268,000 at December 31, 2020. At March 31,
2021, the OREO and other repossessed asset portfolio consisted of
three individual land parcels. During the quarter ended March 31,
2021, one OREO property was sold, resulting in a $71,000 gain.
OREO and Other Repossessed
Assets($ in thousands)
|
March 31, 2021 |
|
December 31, 2020 |
|
March 31, 2020 |
|
Amount |
|
Quantity |
|
Amount |
|
Quantity |
|
Amount |
|
Quantity |
Land |
$ |
157 |
|
3 |
|
$ |
268 |
|
4 |
|
$ |
1,623 |
|
10 |
Total |
$ |
157 |
|
3 |
|
$ |
268 |
|
4 |
|
$ |
1,623 |
|
10 |
Acquisition
of South Sound BankOn October 1, 2018, the Company
completed the acquisition of South Sound Bank, a Washington-state
chartered bank, headquartered in Olympia, Washington (“South Sound
Acquisition”). The Company acquired 100% of the outstanding common
stock of South Sound Bank, and South Sound Bank was merged into
Timberland Bank and the Company. Pursuant to the terms of the
merger agreement, South Sound Bank shareholders received 0.746 of a
share of the Company’s common stock and $5.68825 in cash per share
of South Sound Bank common stock. The Company issued 904,826 shares
of its common stock (valued at $28,267,000 based on the Company’s
closing stock price on September 30, 2018 of $31.24 per share) and
paid $6,903,000 in cash in the transaction for total consideration
paid of $35,170,000.
About Timberland Bancorp, Inc. Timberland
Bancorp, Inc., a Washington corporation, is the holding company for
Timberland Bank (“Bank”). The Bank opened for business in 1915 and
serves consumers and businesses across Grays Harbor, Thurston,
Pierce, King, Kitsap and Lewis counties, Washington with a full
range of lending and deposit services through its 24 branches
(including its main office in Hoquiam).
DisclaimerCertain matters discussed in this
press release may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
These statements relate to our financial condition, results of
operations, plan, objectives, future performance or business.
Forward-looking statements are not statements of historical fact,
are based on certain assumptions and often include the words
“believes,” “expects,” “anticipates,” “estimates,” “forecasts,”
“intends,” “plans,” “targets,” “potentially,” “probably,”
“projects,” “outlook” or similar expressions or future or
conditional verbs such as “may,” “will,” “should,” “would” and
“could.” Forward-looking statements include statements with respect
to our beliefs, plans, objectives, goals, expectations, assumptions
and statements about future economic performance. These
forward-looking statements are subject to known and unknown risks,
uncertainties and other factors that could cause our actual results
to differ materially from the results anticipated or implied by our
forward-looking statements, including, but not limited to: the
effect of the novel coronavirus of 2019 (“COVID-19”) pandemic,
including the Company’s credit quality and business operations, as
well as its impact on general economic and financial market
conditions and other uncertainties resulting from the COVID-19
pandemic, such as the extent and duration of the impact on public
health, the U.S. and global economies, and consumer and corporate
customers, including economic activity, employment levels and
market liquidity; the credit risks of lending activities, including
changes in the level and trend of loan delinquencies and write-offs
and changes in our allowance for loan losses and provision for loan
losses that may be impacted by deterioration in the housing and
commercial real estate markets which may lead to increased losses
and non-performing assets in our loan portfolio, and may result in
our allowance for loan losses not being adequate to cover actual
losses, and require us to materially increase our loan loss
reserves; changes in general economic conditions, either nationally
or in our market areas; changes in the levels of general interest
rates, and the relative differences between short and long term
interest rates, deposit interest rates, our net interest margin and
funding sources; uncertainty regarding the future of the London
Interbank Offered Rate (“LIBOR”), and the potential transition away
from LIBOR toward new interest rate benchmarks; fluctuations in the
demand for loans, the number of unsold homes, land and other
properties and fluctuations in real estate values in our market
areas; secondary market conditions for loans and our ability to
sell loans in the secondary market; results of examinations of us
by the Federal Reserve and our bank subsidiary by the Federal
Deposit Insurance Corporation, the Washington State Department of
Financial Institutions, Division of Banks or other regulatory
authorities, including the possibility that any such regulatory
authority may, among other things, institute a formal or informal
enforcement action against us or our bank subsidiary which could
require us to increase our allowance for loan losses, write-down
assets, change our regulatory capital position or affect our
ability to borrow funds or maintain or increase deposits or impose
additional requirements or restrictions on us, any of which could
adversely affect our liquidity and earnings; legislative or
regulatory changes that adversely affect our business including
changes in regulatory policies and principles, or the
interpretation of regulatory capital or other rules including as a
result of Basel III; the impact of the Dodd Frank Wall Street
Reform and Consumer Protection Act and implementing regulations;
our ability to attract and retain deposits; our ability to control
operating costs and expenses; the use of estimates in determining
fair value of certain of our assets, which estimates may prove to
be incorrect and result in significant declines in valuation;
difficulties in reducing risk associated with the loans on our
consolidated balance sheet; staffing fluctuations in response to
product demand or the implementation of corporate strategies that
affect our work force and potential associated charges;
disruptions, security breaches, or other adverse events, failures
or interruptions in, or attacks on, our information technology
systems or on the third-party vendors who perform several of our
critical processing functions; our ability to retain key members of
our senior management team; costs and effects of litigation,
including settlements and judgments; our ability to implement our
business strategies; our ability to manage loan delinquency rates;
increased competitive pressures among financial services companies;
changes in consumer spending, borrowing and savings habits; the
availability of resources to address changes in laws, rules, or
regulations or to respond to regulatory actions; our ability to pay
dividends on our common and stock; adverse changes in the
securities markets; inability of key third-party providers to
perform their obligations to us; changes in accounting policies and
practices, as may be adopted by the financial institution
regulatory agencies or the Financial Accounting Standards Board
(“FASB”), including additional guidance and interpretation on
accounting issues and details of the implementation of new
accounting methods; the economic impact of war or any terrorist
activities; other economic, competitive, governmental, regulatory,
and technological factors affecting our operations; pricing,
products and services including the Coronavirus Aid, Relief, and
Economic Security Act of 2020 (“CARES Act”), the Consolidated
Appropriations Act, 2021 (“CAA”), and the American Rescue Plan Act
of 2021; and other risks detailed in our reports filed with the
Securities and Exchange Commission.
Any of the forward-looking statements that we make in this press
release and in the other public statements we make are based upon
management’s beliefs and assumptions at the time they are made. We
do not undertake and specifically disclaim any obligation to
publicly update or revise any forward-looking statements included
in this report to reflect the occurrence of anticipated or
unanticipated events or circumstances after the date of such
statements or to update the reasons why actual results could differ
from those contained in such statements, whether as a result of new
information, future events or otherwise. In light of these risks,
uncertainties and assumptions, the forward-looking statements
discussed in this document might not occur and we caution readers
not to place undue reliance on any forward-looking statements.
These risks could cause our actual results for fiscal 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 SUBSIDIARYCONSOLIDATED STATEMENTS
OF INCOME |
|
Three Months Ended |
($ in thousands,
except per share amounts) |
|
March 31, |
|
Dec. 31, |
|
March 31, |
(unaudited) |
|
|
2021 |
|
|
|
2020 |
|
|
|
2020 |
|
|
Interest and dividend
income |
|
|
|
|
|
|
|
Loans receivable |
|
$ |
12,791 |
|
|
$ |
13,318 |
|
|
$ |
12,823 |
|
|
Investment securities |
|
|
284 |
|
|
|
301 |
|
|
|
489 |
|
|
Dividends from mutual funds, FHLB
stock and other investments |
|
|
28 |
|
|
|
28 |
|
|
|
35 |
|
|
Interest bearing deposits in
banks |
|
|
258 |
|
|
|
310 |
|
|
|
784 |
|
|
Total interest and dividend income |
|
|
13,361 |
|
|
|
13,957 |
|
|
|
14,131 |
|
|
|
|
|
|
|
|
|
|
Interest
expense |
|
|
|
|
|
|
|
Deposits |
|
|
764 |
|
|
|
904 |
|
|
|
1,243 |
|
|
Borrowings |
|
|
29 |
|
|
|
29 |
|
|
|
8 |
|
|
Total interest expense |
|
|
793 |
|
|
|
933 |
|
|
|
1,251 |
|
|
Net interest income |
|
|
12,568 |
|
|
|
13,024 |
|
|
|
12,880 |
|
|
Provision for loan
losses |
|
|
-- |
|
|
|
-- |
|
|
|
2,000 |
|
|
Net interest income after provision for loan
losses |
|
|
12,568 |
|
|
|
13,024 |
|
|
|
10,880 |
|
|
|
|
|
|
|
|
|
|
Non-interest
income |
|
|
|
|
|
|
|
Service charges on deposits |
|
|
941 |
|
|
|
1,055 |
|
|
|
1,078 |
|
|
ATM and debit card interchange
transaction fees |
|
|
1,237 |
|
|
|
1,156 |
|
|
|
1,015 |
|
|
Gain on sales of loans, net |
|
|
1,758 |
|
|
|
2,002 |
|
|
|
736 |
|
|
Bank owned life insurance
(“BOLI”) net earnings |
|
|
146 |
|
|
|
149 |
|
|
|
147 |
|
|
Servicing income (expense) on
loans sold, net |
|
|
(10 |
) |
|
|
15 |
|
|
|
62 |
|
|
Valuation recovery (allowance) on
servicing rights, net |
|
|
438 |
|
|
|
(236 |
) |
|
|
-- |
|
|
Recoveries on investment
securities, net |
|
|
3 |
|
|
|
5 |
|
|
|
3 |
|
|
Other |
|
|
373 |
|
|
|
413 |
|
|
|
639 |
|
|
Total non-interest income, net |
|
|
4,886 |
|
|
|
4,559 |
|
|
|
3,680 |
|
|
|
|
|
|
|
|
|
|
Non-interest
expense |
|
|
|
|
|
|
|
Salaries and employee
benefits |
|
|
4,778 |
|
|
|
4,613 |
|
|
|
4,621 |
|
|
Premises and equipment |
|
|
998 |
|
|
|
957 |
|
|
|
943 |
|
|
Gain on disposition of premises
and equipment, net |
|
|
-- |
|
|
|
-- |
|
|
|
(3 |
) |
|
Advertising |
|
|
155 |
|
|
|
156 |
|
|
|
159 |
|
|
OREO and other repossessed
assets, net |
|
|
(68 |
) |
|
|
(26 |
) |
|
|
51 |
|
|
ATM and debit card
processing |
|
|
445 |
|
|
|
431 |
|
|
|
359 |
|
|
Postage and courier |
|
|
150 |
|
|
|
138 |
|
|
|
145 |
|
|
State and local taxes |
|
|
255 |
|
|
|
283 |
|
|
|
233 |
|
|
Professional fees |
|
|
181 |
|
|
|
231 |
|
|
|
210 |
|
|
FDIC insurance expense |
|
|
105 |
|
|
|
96 |
|
|
|
-- |
|
|
Loan administration and
foreclosure |
|
|
90 |
|
|
|
80 |
|
|
|
78 |
|
|
Data processing and
telecommunications |
|
|
635 |
|
|
|
606 |
|
|
|
515 |
|
|
Deposit operations |
|
|
245 |
|
|
|
284 |
|
|
|
274 |
|
|
Amortization of core deposit
intangible (“CDI”) |
|
|
90 |
|
|
|
90 |
|
|
|
102 |
|
|
Other, net |
|
|
492 |
|
|
|
471 |
|
|
|
599 |
|
|
Total non-interest expense, net |
|
|
8,551 |
|
|
|
8,410 |
|
|
|
8,286 |
|
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
|
8,903 |
|
|
|
9,173 |
|
|
|
6,274 |
|
|
Provision for income
taxes |
|
|
1,652 |
|
|
|
1,883 |
|
|
|
1,225 |
|
|
Net income |
|
$ |
7,251 |
|
|
$ |
7,290 |
|
|
$ |
5,049 |
|
|
|
|
|
|
|
|
|
|
Net income per common
share: |
|
|
|
|
|
|
|
Basic |
|
$ |
0.87 |
|
|
$ |
0.88 |
|
|
$ |
0.61 |
|
|
Diluted |
|
|
0.86 |
|
|
|
0.87 |
|
|
|
0.60 |
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
|
8,331,121 |
|
|
|
8,313,493 |
|
|
|
8,344,201 |
|
|
Diluted |
|
|
8,444,798 |
|
|
|
8,412,744 |
|
|
|
8,456,659 |
|
|
|
|
TIMBERLAND
BANCORP INC. AND SUBSIDIARYCONSOLIDATED STATEMENTS
OF INCOME |
|
Six Months Ended |
($ in thousands,
except per share amounts) |
|
March 31, |
|
|
|
March 31, |
(unaudited) |
|
|
2021 |
|
|
|
|
|
2020 |
|
|
Interest and dividend
income |
|
|
|
|
|
|
|
Loans receivable |
|
$ |
26,108 |
|
|
|
|
$ |
25,587 |
|
|
Investment securities |
|
|
585 |
|
|
|
|
|
928 |
|
|
Dividends from mutual funds, FHLB
stock and other investments |
|
|
55 |
|
|
|
|
|
72 |
|
|
Interest bearing deposits in
banks |
|
|
569 |
|
|
|
|
|
1,735 |
|
|
Total interest and dividend income |
|
|
27,317 |
|
|
|
|
|
28,322 |
|
|
|
|
|
|
|
|
|
|
Interest
expense |
|
|
|
|
|
|
|
Deposits |
|
|
1,668 |
|
|
|
|
|
2,432 |
|
|
Borrowings |
|
|
58 |
|
|
|
|
|
8 |
|
|
Total interest expense |
|
|
1,726 |
|
|
|
|
|
2,440 |
|
|
Net interest income |
|
|
25,591 |
|
|
|
|
|
25,882 |
|
|
Provision for loan
losses |
|
|
-- |
|
|
|
|
|
2,200 |
|
|
Net interest income after provision for loan
losses |
|
|
25,591 |
|
|
|
|
|
23,682 |
|
|
|
|
|
|
|
|
|
|
Non-interest
income |
|
|
|
|
|
|
|
Service charges on deposits |
|
|
1,996 |
|
|
|
|
|
2,278 |
|
|
ATM and debit card interchange
transaction fees |
|
|
2,393 |
|
|
|
|
|
2,109 |
|
|
Gain on sales of loans, net |
|
|
3,760 |
|
|
|
|
|
1,688 |
|
|
Bank owned life insurance
(“BOLI”) net earnings |
|
|
295 |
|
|
|
|
|
294 |
|
|
Servicing income on loans sold,
net |
|
|
5 |
|
|
|
|
|
136 |
|
|
Valuation recovery (allowance) on
servicing rights, net |
|
|
202 |
|
|
|
|
|
(23 |
) |
|
Recoveries on investment
securities, net |
|
|
8 |
|
|
|
|
|
106 |
|
|
Other |
|
|
786 |
|
|
|
|
|
1,030 |
|
|
Total non-interest income, net |
|
|
9,445 |
|
|
|
|
|
7,618 |
|
|
|
|
|
|
|
|
|
|
Non-interest
expense |
|
|
|
|
|
|
|
Salaries and employee
benefits |
|
|
9,391 |
|
|
|
|
|
9,343 |
|
|
Premises and equipment |
|
|
1,955 |
|
|
|
|
|
1,837 |
|
|
Gain on disposition of premises
and equipment, net |
|
|
-- |
|
|
|
|
|
(102 |
) |
|
Advertising |
|
|
311 |
|
|
|
|
|
342 |
|
|
OREO and other repossessed
assets, net |
|
|
(94 |
) |
|
|
|
|
50 |
|
|
ATM and debit card
processing |
|
|
876 |
|
|
|
|
|
799 |
|
|
Postage and courier |
|
|
287 |
|
|
|
|
|
279 |
|
|
State and local taxes |
|
|
538 |
|
|
|
|
|
449 |
|
|
Professional fees |
|
|
412 |
|
|
|
|
|
480 |
|
|
FDIC insurance expense
(credit) |
|
|
201 |
|
|
|
|
|
(27 |
) |
|
Loan administration and
foreclosure |
|
|
171 |
|
|
|
|
|
167 |
|
|
Data processing and
telecommunications |
|
|
1,240 |
|
|
|
|
|
1,099 |
|
|
Deposit operations |
|
|
529 |
|
|
|
|
|
591 |
|
|
Amortization of core deposit
intangible (“CDI”) |
|
|
180 |
|
|
|
|
|
203 |
|
|
Other, net |
|
|
964 |
|
|
|
|
|
1,149 |
|
|
Total non-interest expense, net |
|
|
16,961 |
|
|
|
|
|
16,659 |
|
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
|
18,075 |
|
|
|
|
|
14,641 |
|
|
Provision for income
taxes |
|
|
3,534 |
|
|
|
|
|
2,940 |
|
|
Net income |
|
$ |
14,541 |
|
|
|
|
$ |
11,701 |
|
|
|
|
|
|
|
|
|
|
Net income per common
share: |
|
|
|
|
|
|
|
Basic |
|
$ |
1.75 |
|
|
|
|
$ |
1.40 |
|
|
Diluted |
|
|
1.73 |
|
|
|
|
|
1.38 |
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
|
8,322,210 |
|
|
|
|
|
8,342,828 |
|
|
Diluted |
|
|
8,428,595 |
|
|
|
|
|
8,465,894 |
|
TIMBERLAND
BANCORP INC. AND SUBSIDIARYCONSOLIDATED BALANCE
SHEETS |
|
($ in thousands,
except per share amounts) (unaudited) |
|
March 31, |
|
Dec. 31, |
|
March 31, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2020 |
|
Assets |
|
|
|
|
|
|
Cash and due from
financial institutions |
|
$ |
21,707 |
|
|
$ |
24,226 |
|
|
$ |
22,862 |
|
Interest-bearing
deposits in banks |
|
|
411,635 |
|
|
|
325,987 |
|
|
|
145,286 |
|
|
Total cash and cash
equivalents |
|
|
433,342 |
|
|
|
350,213 |
|
|
|
168,148 |
|
|
|
|
|
|
|
|
|
Certificates of
deposit (“CDs”) held for investment, at cost |
|
|
39,674 |
|
|
|
49,629 |
|
|
|
82,472 |
|
Investment
securities: |
|
|
|
|
|
|
|
Held to maturity, at amortized
cost |
|
|
36,465 |
|
|
|
24,509 |
|
|
|
36,667 |
|
|
Available for sale, at fair
value |
|
|
69,184 |
|
|
|
65,762 |
|
|
|
41,470 |
|
Investments in equity
securities, at fair value |
|
|
957 |
|
|
|
974 |
|
|
|
969 |
|
FHLB stock |
|
|
2,303 |
|
|
|
1,922 |
|
|
|
1,922 |
|
Other investments, at
cost |
|
|
3,000 |
|
|
|
3,000 |
|
|
|
3,000 |
|
Loans held for
sale |
|
|
8,455 |
|
|
|
10,871 |
|
|
|
5,798 |
|
|
|
|
|
|
|
|
Loans receivable |
|
|
1,044,117 |
|
|
|
1,020,741 |
|
|
|
919,547 |
|
Less: Allowance for
loan losses |
|
|
(13,434 |
) |
|
|
(13,432 |
) |
|
|
(11,890 |
) |
|
Net loans receivable |
|
|
1,030,683 |
|
|
|
1,007,309 |
|
|
|
907,657 |
|
|
|
|
|
|
|
|
|
Premises and
equipment, net |
|
|
22,763 |
|
|
|
22,753 |
|
|
|
23,072 |
|
OREO and other
repossessed assets, net |
|
|
157 |
|
|
|
268 |
|
|
|
1,623 |
|
BOLI |
|
|
21,891 |
|
|
|
21,745 |
|
|
|
21,299 |
|
Accrued interest
receivable |
|
|
4,471 |
|
|
|
4,490 |
|
|
|
3,595 |
|
Goodwill |
|
|
15,131 |
|
|
|
15,131 |
|
|
|
15,131 |
|
CDI |
|
|
1,444 |
|
|
|
1,535 |
|
|
|
1,828 |
|
Servicing rights,
net |
|
|
3,604 |
|
|
|
3,036 |
|
|
|
2,724 |
|
Operating lease
right-of-use assets |
|
|
2,436 |
|
|
|
2,512 |
|
|
|
2,759 |
|
Other assets |
|
|
3,284 |
|
|
|
2,746 |
|
|
|
2,967 |
|
|
Total
assets |
|
$ |
1,699,244 |
|
|
$ |
1,588,405 |
|
|
$ |
1,323,101 |
|
|
|
|
|
|
|
|
|
Liabilities and shareholders’ equity |
|
|
|
|
|
|
Deposits:
Non-interest-bearing demand |
|
$ |
499,541 |
|
|
$ |
437,953 |
|
|
$ |
316,328 |
|
Deposits:
Interest-bearing |
|
|
982,318 |
|
|
|
937,163 |
|
|
|
809,320 |
|
|
Total deposits |
|
|
1,481,859 |
|
|
|
1,375,116 |
|
|
|
1,125,648 |
|
|
|
|
|
|
|
|
|
Operating lease
liabilities |
|
|
2,499 |
|
|
|
2,565 |
|
|
|
2,759 |
|
FHLB borrowings |
|
|
10,000 |
|
|
|
10,000 |
|
|
|
10,000 |
|
Other liabilities and
accrued expenses |
|
|
6,343 |
|
|
|
7,399 |
|
|
|
6,686 |
|
|
Total
liabilities |
|
|
1,500,701 |
|
|
|
1,395,080 |
|
|
|
1,145,093 |
|
|
|
|
|
|
|
|
Shareholders’ equity |
|
|
|
|
|
|
Common stock, $.01 par value; 50,000,000 shares
authorized;
8,361,457 shares issued and outstanding – March 31,
2021
8,317,793 shares issued and outstanding – December 31, 2020
8,309,193 shares issued and outstanding – March 31, 2020
|
|
|
42,949 |
|
|
|
42,480 |
|
|
|
42,258 |
|
Retained
earnings |
|
|
155,473 |
|
|
|
150,801 |
|
|
|
135,929 |
|
Accumulated other
comprehensive income (loss) |
|
|
121 |
|
|
|
44 |
|
|
|
(179 |
) |
|
Total shareholders’
equity |
|
|
198,543 |
|
|
|
193,325 |
|
|
|
178,008 |
|
|
Total liabilities and
shareholders’ equity |
|
$ |
1,699,244 |
|
|
$ |
1,588,405 |
|
|
$ |
1,323,101 |
|
KEY FINANCIAL RATIOS AND
DATA |
Three Months Ended |
($ in thousands, except per share
amounts) (unaudited) |
|
March 31, |
|
Dec 31, |
|
March 31, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2020 |
|
PERFORMANCE
RATIOS: |
|
|
|
|
|
|
Return on average assets (a) |
|
|
1.75 |
% |
|
|
1.84 |
% |
|
|
1.56 |
% |
Return on average equity (a) |
|
|
14.89 |
% |
|
|
15.39 |
% |
|
|
11.39 |
% |
Net interest margin (a) |
|
|
3.21 |
% |
|
|
3.48 |
% |
|
|
4.27 |
% |
Efficiency ratio |
|
|
48.99 |
% |
|
|
47.83 |
% |
|
|
50.04 |
% |
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
March 31, |
|
|
|
March 31, |
|
|
|
2021 |
|
|
|
|
|
2020 |
|
PERFORMANCE
RATIOS: |
|
|
|
|
|
|
Return on average assets (a) |
|
|
1.80 |
% |
|
|
|
|
1.84 |
% |
Return on average equity (a) |
|
|
15.14 |
% |
|
|
|
|
13.37 |
% |
Net interest margin (a) |
|
|
3.34 |
% |
|
|
|
|
4.35 |
% |
Efficiency ratio |
|
|
48.41 |
% |
|
|
|
|
49.73 |
% |
|
|
|
|
|
|
|
|
|
March 31, |
|
Dec 31, |
|
March 31, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2020 |
|
ASSET QUALITY RATIOS AND DATA: |
|
|
|
|
|
|
Non-accrual loans |
|
$ |
2,305 |
|
|
$ |
2,581 |
|
|
$ |
3,216 |
|
Loans past due 90 days and still
accruing |
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
Non-performing investment
securities |
|
|
188 |
|
|
|
205 |
|
|
|
238 |
|
OREO and other repossessed
assets |
|
|
157 |
|
|
|
268 |
|
|
|
1,623 |
|
Total non-performing assets
(b) |
|
$ |
2,650 |
|
|
$ |
3,054 |
|
|
$ |
5,077 |
|
|
|
|
|
|
|
|
Non-performing assets to total
assets (b) |
|
|
0.16 |
% |
|
|
0.19 |
% |
|
|
0.38 |
% |
Net charge-offs (recoveries)
during quarter |
|
$ |
(2 |
) |
|
$ |
(18 |
) |
|
$ |
(8 |
) |
ALL to non-accrual loans |
|
|
583 |
% |
|
|
520 |
% |
|
|
370 |
% |
ALL to loans receivable (c) |
|
|
1.29 |
% |
|
|
1.32 |
% |
|
|
1.29 |
% |
ALL to loans receivable
(excluding PPP loans) (d) (non-GAAP) |
|
|
1.48 |
% |
|
|
1.46 |
% |
|
|
1.29 |
% |
ALL to loans receivable
(excluding PPP loans and South Sound Acquisition loans) (d) (e)
(non-GAAP) |
|
|
1.56 |
% |
|
|
1.56 |
% |
|
|
1.42 |
% |
Troubled debt restructured loans
on accrual status (f) |
|
$ |
2,864 |
|
|
$ |
2,868 |
|
|
$ |
2,877 |
|
|
|
|
|
|
|
|
CAPITAL RATIOS: |
|
|
|
|
|
|
Tier 1 leverage capital |
|
|
11.19 |
% |
|
|
11.36 |
% |
|
|
12.75 |
% |
Tier 1 risk-based capital |
|
|
19.47 |
% |
|
|
20.23 |
% |
|
|
18.53 |
% |
Common equity Tier 1 risk-based
capital |
|
|
19.47 |
% |
|
|
20.23 |
% |
|
|
18.53 |
% |
Total risk-based capital |
|
|
20.72 |
% |
|
|
21.48 |
% |
|
|
19.78 |
% |
Tangible common equity to
tangible assets (non-GAAP) |
|
|
10.81 |
% |
|
|
11.24 |
% |
|
|
12.33 |
% |
|
|
|
|
|
|
|
BOOK VALUES: |
|
|
|
|
|
|
Book value per common share |
|
$ |
23.75 |
|
|
$ |
23.24 |
|
|
$ |
21.42 |
|
Tangible book value per common
share (g) |
|
|
21.76 |
|
|
|
21.24 |
|
|
|
19.38 |
|
________________________________________________
(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 $138,175, $103,468 and $0 at March 31, 2021, December 31,
2020 and March 31, 2020, respectively.(e) Does not include loans
acquired in the South Sound Acquisition totaling $46,626, $56,874
and $80,619 at March 31, 2021, December 31, 2020 and March 31,
2020, respectively.(f) Does not include troubled debt restructured
loans totaling $192, $197 and $343 reported as non-accrual loans at
March 31, 2021, December 31, 2020 and March 31, 2020, respectively.
(g) Tangible common equity divided by common shares outstanding
(non-GAAP). AVERAGE
BALANCES, YIELDS, AND RATES - QUARTERLY ($ in
thousands)(unaudited)
|
For the Three Months Ended |
|
March 31, 2021 |
December 31, 2020 |
March 31, 2020 |
|
Amount |
|
Rate |
|
Amount |
|
Rate |
|
Amount |
|
Rate |
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
Loans receivable and loans
held for sale |
$ |
1,044,476 |
|
|
4.90 |
% |
|
$ |
1,030,289 |
|
|
5.17 |
% |
|
$ |
922,011 |
|
|
5.56 |
% |
Investment securities and FHLB
stock (1) |
|
101,675 |
|
|
1.23 |
|
|
|
94,033 |
|
|
1.40 |
|
|
|
81,925 |
|
|
2.56 |
|
Interest-earning deposits in
banks and CDs |
|
422,286 |
|
|
0.24 |
|
|
|
374,376 |
|
|
0.33 |
|
|
|
203,936 |
|
|
1.54 |
|
Total interest-earning assets |
|
1,568,437 |
|
|
3.41 |
|
|
|
1,498,698 |
|
|
3.73 |
|
|
|
1,207,872 |
|
|
4.68 |
|
Other assets |
|
85,203 |
|
|
|
|
|
84,077 |
|
|
|
|
|
85,226 |
|
|
|
Total assets |
$ |
1,653,640 |
|
|
|
|
$ |
1,582,775 |
|
|
|
|
$ |
1,293,098 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
NOW checking accounts |
$ |
394,612 |
|
|
0.16 |
% |
|
$ |
377,760 |
|
|
0.19 |
% |
|
$ |
303,403 |
|
|
0.31 |
% |
Money market accounts |
|
178,768 |
|
|
0.30 |
|
|
|
168,503 |
|
|
0.33 |
|
|
|
143,817 |
|
|
0.58 |
|
Savings accounts |
|
236,504 |
|
|
0.08 |
|
|
|
222,866 |
|
|
0.08 |
|
|
|
178,688 |
|
|
0.12 |
|
Certificates of deposit
accounts |
|
146,065 |
|
|
1.19 |
|
|
|
155,125 |
|
|
1.38 |
|
|
|
169,293 |
|
|
1.78 |
|
Total interest-bearing deposits |
|
955,949 |
|
|
0.32 |
|
|
|
924,254 |
|
|
0.39 |
|
|
|
795,201 |
|
|
0.63 |
|
Borrowings |
|
10,003 |
|
|
1.17 |
|
|
|
10,000 |
|
|
1.15 |
|
|
|
2,747 |
|
|
1.17 |
|
Total interest-bearing liabilities |
|
965,952 |
|
|
0.33 |
|
|
|
934,254 |
|
|
0.40 |
|
|
|
797,948 |
|
|
0.63 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing demand
deposits |
|
482,528 |
|
|
|
|
|
448,350 |
|
|
|
|
|
306,907 |
|
|
|
Other liabilities |
|
10,365 |
|
|
|
|
|
10,687 |
|
|
|
|
|
10,982 |
|
|
|
Shareholders’ equity |
|
194,795 |
|
|
|
|
|
189,484 |
|
|
|
|
|
177,261 |
|
|
|
Total liabilities and shareholders’ equity |
$ |
1,653,640 |
|
|
|
|
$ |
1,582,775 |
|
|
|
|
$ |
1,293,098 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread |
|
|
3.08 |
% |
|
|
|
3.33 |
% |
|
|
|
4.05 |
% |
Net interest margin (2) |
|
|
3.21 |
% |
|
|
|
3.48 |
% |
|
|
|
4.27 |
% |
Average interest-earning assets to |
|
|
|
|
|
|
|
|
|
|
|
average interest-bearing liabilities |
|
162.37 |
% |
|
|
|
|
160.42 |
% |
|
|
|
|
151.37 |
% |
|
|
_____________________________________(1) Includes other
investments(2) Net interest margin = annualized net interest income
/ average interest-earning
assets
AVERAGE BALANCES, YIELDS, AND RATES –
YEAR-TO-DATE($ in thousands)(unaudited)
|
For the Six Months Ended |
|
March 31, 2021 |
|
|
|
March 31, 2020 |
|
Amount |
|
Rate |
|
|
|
|
|
Amount |
|
Rate |
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
Loans receivable and loans
held for sale |
$ |
1,037,304 |
|
|
5.03 |
% |
|
|
|
|
|
$ |
916,931 |
|
|
5.58 |
% |
Investment securities and FHLB
stock (1) |
|
97,812 |
|
|
1.31 |
|
|
|
|
|
|
|
73,893 |
|
|
2.71 |
|
Interest-earning deposits in
banks and CDs |
|
398,067 |
|
|
0.29 |
|
|
|
|
|
|
|
200,107 |
|
|
1.73 |
|
Total interest-earning assets |
|
1,533,183 |
|
|
3.56 |
|
|
|
|
|
|
|
1,190,931 |
|
|
4.76 |
|
Other assets |
|
84,635 |
|
|
|
|
|
|
|
|
|
84,311 |
|
|
|
Total assets |
$ |
1,617,818 |
|
|
|
|
|
|
|
|
$ |
1,275,242 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
NOW checking accounts |
$ |
386,093 |
|
|
0.17 |
% |
|
|
|
|
|
$ |
299,884 |
|
|
0.30 |
% |
Money market accounts |
|
173,579 |
|
|
0.31 |
|
|
|
|
|
|
|
138,758 |
|
|
0.57 |
|
Savings accounts |
|
229,610 |
|
|
0.08 |
|
|
|
|
|
|
|
176,628 |
|
|
0.10 |
|
Certificates of deposit
accounts |
|
150,645 |
|
|
1.29 |
|
|
|
|
|
|
|
168,039 |
|
|
1.78 |
|
Total interest-bearing deposits |
|
939,927 |
|
|
0.36 |
|
|
|
|
|
|
|
783,309 |
|
|
0.62 |
|
Borrowings |
|
10,002 |
|
|
1.16 |
|
|
|
|
|
|
|
1,367 |
|
|
1.17 |
|
Total interest-bearing liabilities |
|
949,929 |
|
|
0.36 |
|
|
|
|
|
|
|
784,676 |
|
|
0.62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing demand
deposits |
|
465,251 |
|
|
|
|
|
|
|
|
|
306,175 |
|
|
|
Other liabilities |
|
10,528 |
|
|
|
|
|
|
|
|
|
9,394 |
|
|
|
Shareholders’ equity |
|
192,110 |
|
|
|
|
|
|
|
|
|
174,997 |
|
|
|
Total liabilities and shareholders’ equity |
$ |
1,617,818 |
|
|
|
|
|
|
|
|
$ |
1,275,242 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread |
|
|
3.20 |
% |
|
|
|
|
|
|
|
4.14 |
% |
Net interest margin (2) |
|
|
3.34 |
% |
|
|
|
|
|
|
|
4.35 |
% |
Average interest-earning assets to |
|
|
|
|
|
|
|
|
|
|
|
average interest-bearing liabilities |
|
161.40 |
% |
|
|
|
|
|
|
|
|
151.77 |
% |
|
|
_____________________________________(1) Includes other
investments(2) Net interest margin = annualized net interest income
/ average interest-earning assets
Non-GAAP Financial MeasuresIn addition to
results presented in accordance with generally accepted accounting
principles (“GAAP”), this press release contains certain non-GAAP
financial measures. Timberland believes that certain non-GAAP
financial measures provide investors with information useful in
understanding the Company’s financial performance; however, readers
of this report are urged to review these non-GAAP financial
measures in conjunction with GAAP results as reported.
Financial measures that exclude intangible assets are non-GAAP
measures. To provide investors with a broader understanding of
capital adequacy, Timberland provides non-GAAP financial measures
for tangible common equity, along with the GAAP measure. Tangible
common equity is calculated as shareholders’ equity less goodwill
and CDI. In addition, tangible assets equal total assets less
goodwill and CDI.
The following table provides a reconciliation of ending
shareholders’ equity (GAAP) to ending tangible shareholders’ equity
(non-GAAP) and ending total assets (GAAP) to ending tangible assets
(non-GAAP).
($ in thousands) |
|
March 31, 2021 |
|
December 31, 2020 |
|
March 31, 2020 |
|
|
|
|
|
|
|
Shareholders’ equity |
|
$ |
198,543 |
|
|
$ |
193,325 |
|
|
$ |
178,008 |
|
Less goodwill and CDI |
|
|
(16,575 |
) |
|
|
(16,666 |
) |
|
|
(16,959 |
) |
Tangible common equity |
|
$ |
181,968 |
|
|
$ |
176,659 |
|
|
$ |
161,049 |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,699,244 |
|
|
$ |
1,588,405 |
|
|
$ |
1,323,101 |
|
Less goodwill and CDI |
|
|
(16,575 |
) |
|
|
(16,666 |
) |
|
|
(16,959 |
) |
Tangible assets |
|
$ |
1,682,669 |
|
|
$ |
1,571,739 |
|
|
$ |
1,306,142 |
|
Contact: Michael R. Sand,President &
CEODean J. Brydon, CFO
(360)
533-4747www.timberlandbank.com
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