Timberland Bancorp, Inc. (NASDAQ: TSBK) (“Timberland” or “the
Company”), the holding company for Timberland Bank (the “Bank”),
today reported that net income increased 13% to $7.02 million for
the quarter ended June 30, 2021 from $6.21 million for the
comparable quarter one year ago, which quarter was affected by a
$1.00 million ($790,000 after income taxes) provision to the loan
loss reserves, and decreased $227,000, or 3%, from $7.25 million
for the preceding quarter. Earnings per diluted common share
(“EPS”) increased 12% to $0.83 for the current quarter from $0.74
for the comparable quarter one year ago and decreased 3% from $0.86
for the preceding quarter.
For the first nine months of fiscal 2021, Timberland earned a
record $21.57 million, or $2.55 per diluted common share, a 20%
increase in net income and EPS from $17.91 million, or $2.12 per
diluted common share for the first nine months of fiscal 2020,
which nine month period was affected by a $3.20 million ($2.53
million after income taxes) provision to the loan loss
reserves.
Timberland’s Board of Directors declared a quarterly cash
dividend to shareholders of $0.21 per common share and a special
cash dividend of $0.10 per common share. Both dividends are payable
on August 27, 2021, to shareholders of record on August 13,
2021.
“We are pleased to report strong quarterly net income and record
profitability for the first nine months of fiscal 2021,” stated
Michael Sand, President and CEO. “Paycheck Protection Program
(“PPP”) loan proceeds and federal stimulus payments contributed to
strong deposit growth of $204.11 million during the past twelve
months including $40.79 million during the quarter just ended. The
15% increase in deposits year-over-year has increased the Bank’s
liquidity significantly above normal levels. Net loans outstanding,
net of PPP loans, increased this quarter at an annualized rate of
6% and we continue to be encouraged by the increased business
activity we are seeing in our
markets.”
“Staff continues to be diligently and successfully engaged in
the task of filing SBA loan forgiveness applications for businesses
in our communities that obtained PPP financing through Timberland
Bank. During the quarter ended June 30, 2021, PPP loans were
reduced by $42.54 million and $95.63 million of PPP loans remained
on the Bank’s balance sheet at quarter end. Timberland participated
in the origination of PPP loans during every phase of the program
and originated $192.43 million of PPP loans for existing as well as
new clients.”
“Timberland’s Board is also pleased to have announced today the
appointment of Parul Bhandari to Timberland’s Board of Directors.
During the past few years Timberland has sought to acquire
directors with strong technology backgrounds and Ms. Bhandari is
the third Director with significant experience and expertise in the
technology sector to join Timberland’s Board. She brings to
Timberland 20 plus years of experience scaling businesses through
data, cloud and AI powered digital transformation. Ms. Bhandari
leads the Partner Strategy for the Worldwide Media and
Communications Industry group at Microsoft. Additional background
information is included in a separate press release published
today. With Ms. Bhandari’s appointment, Timberland now has eight
independent directors, equally balanced between men and women. We
look forward to Ms. Bhandari’s participation and counsel as a
member of Timberland’s Board of
Directors.”
Third Fiscal Quarter 2021 Earnings and Balance Sheet
Highlights (at or for the period ended June 30, 2021,
compared to March 31, 2021 or June 30, 2020):
Earnings Highlights:
- Net income increased 13% to $7.02 million for the current
quarter from $6.21 million for the comparable quarter one year ago
and decreased 3% from $7.25 million for the preceding quarter;
- EPS increased 12% to $0.83 for the current quarter from $0.74
for the comparable quarter one year ago and decreased 3% from $0.86
for the preceding quarter;
- Net income increased 20% to $21.57 million for the first nine
months of fiscal 2021 from $17.91 million for the first nine months
of fiscal 2020;
- EPS increased 20% to $2.55 for the first nine months of fiscal
2021 from $2.12 for the first nine months of fiscal 2020;
- Return on average equity (“ROE”) and return on average assets
(“ROA”) for the current quarter were 14.02% and 1.63%,
respectively;
- Net interest margin (“NIM”) was 3.22% for the current quarter
compared to 3.21% for the preceding quarter and 3.63% for the
comparable quarter one year ago; and
- The efficiency ratio was relatively stable at 49.43% for the
current quarter compared to 48.99% for the preceding quarter and
49.96% for the comparable quarter one year ago.
Balance Sheet Highlights:
- Total assets increased 14% year-over-year and 2% from the prior
quarter;
- Total deposits increased 15% year-over-year and 3% from the
prior quarter;
- Net loans receivable (including SBA PPP loans) decreased 1%
year-over-year and decreased 3% from the prior quarter;
- Net loans receivable (excluding SBA PPP loans) increased 2%
year-over-year and increased 2% from the prior quarter;
- Non-performing assets to total assets ratio improved to 0.14%;
and
- Book and tangible book (non-GAAP) values per common share
increased to $24.36 and $22.39, respectively, at June 30,
2021.
Operating Results
Operating revenue (net interest income before the
provision for loan losses plus non-interest income) increased 1% to
$17.42 million for the current quarter from $17.34 million for the
comparable quarter one year ago and decreased slightly from $17.45
million for the preceding quarter. Operating revenue increased 3%
to $52.46 million for the first nine months of fiscal 2021 from
$50.84 million for the comparable period one year ago.
Net interest income increased 5% to $13.16 million
for the current quarter from $12.48 million for the comparable
quarter one year ago and increased 5% from $12.57 million for the
preceding quarter. Timberland’s NIM
for the current quarter was 3.22% compared to 3.21% for the
preceding quarter and 3.63% for the comparable quarter one year
ago. NIM compression over the past
year has largely been a result of the low interest rate environment
and an increase in the level of liquidity held in overnight funds.
The NIM for the current quarter was increased by approximately 13
basis points due to the accretion of $84,000 of the fair value
discount on loans acquired in the South Sound Acquisition and the
collection of $443,000 in pre-payment penalties, non-accrual
interest, and late fees. The NIM for the preceding 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
comparable quarter one year ago was increased by approximately ten
basis points due to the accretion of $170,000 of the fair value
discount on loans acquired in the South Sound Acquisition and the
collection of $177,000 in pre-payment penalties, non-accrual
interest and late fees.
U.S. Small Business Administration (“SBA”) PPP
loans contribute to interest income through the 1.00% interest rate
earned on outstanding loan balances and also through the accretion
of loan origination fees into interest income over the life of each
PPP loan. At June 30, 2021, Timberland had SBA PPP deferred loan
origination fees of $3.31 million remaining to be accreted into
interest income over the remaining life of the loans. The following
table details the interest income recognized from SBA PPP
loans:
SBA PPP Loan Income($ in thousands) |
|
Three Months Ended |
|
June 30, 2021 |
|
March 31, 2021 |
|
June 30, 2020 |
Interest income |
$ |
293 |
|
|
$ |
306 |
|
|
$ |
240 |
|
Loan origination fee accretion |
|
1,296 |
|
|
|
1,143 |
|
|
|
443 |
|
Total SBA PPP loan income |
$ |
1,589 |
|
|
$ |
1,449 |
|
|
$ |
683 |
|
|
|
|
|
|
|
Net interest income increased 1% to $38.75 million
for the first nine months of fiscal 2021 from $38.36 million for
the first nine months of fiscal 2020. Timberland’s net interest
margin for the first nine months of fiscal 2021 was 3.30%, compared
to 4.08% for the first nine months of fiscal 2020.
No provision for loan losses was made during the
current and preceding quarter, compared to a $1.00 million
($790,000 after income taxes) provision for loan losses for the
comparable quarter one year ago. No provision for loan losses was
made during the nine months ended June 30, 2021 compared to a $3.20
million ($2.53 million after income taxes) provision for loan
losses for the nine months ended June 30, 2020.
Non-interest income decreased 12% to $4.27 million
for the current quarter from $4.86 million for the comparable
quarter one year ago and decreased 13% from $4.89 million for the
preceding quarter. The decrease in non-interest income compared to
the preceding quarter was primarily due to a $179,000 valuation
allowance on loan servicing rights for the current quarter
(compared to a $438,000 valuation recovery on servicing rights for
the preceding quarter) and a $151,000 decrease in gain on sales of
loans. These decreases were partially offset by a $126,000 increase
in ATM and debit card interchange transaction fees. The valuation
allowance on loan servicing rights was primarily due to an increase
in projected mortgage prepayment speeds due to declines in mortgage
interest rates during the quarter. The increase in ATM and debit
card interchange transaction fee income was primarily due to
increased debit card activity. The decrease in gain on sales of
loans compared to the prior quarter was primarily due to a decrease
in the average pricing spread on loans sold during the current
quarter. Fiscal year-to-date non-interest income increased 10% to
$13.71 million from $12.47 million for the first nine months of
fiscal 2020.
Total operating expenses for the current quarter
increased 1% to $8.61 million from $8.55 million for the preceding
quarter and decreased 1% from $8.66 million for the comparable
quarter one year ago. The increase in
operating expenses compared to the preceding quarter was primarily
due to an $81,000 increase in professional fees, a $73,000 increase
in OREO expense, a $58,000 increase in loan administration
expenses, a $44,000 increase in deposit operations expense and
smaller increases in several other expense categories. These
increases were partially offset by a $224,000 decrease in salaries
and employee benefit expense and smaller decreases in several other
expense categories. The efficiency
ratio for the current quarter was 49.43% compared to 48.99% for the
preceding quarter and 49.96% for the comparable quarter one year
ago. Fiscal year-to-date operating
expenses increased 1% to $25.57 million from $25.32 million for the
first nine months of fiscal 2020. The efficiency ratio for the
first nine months of fiscal 2021 improved to 48.75% from 49.81% for
the first nine months of fiscal 2020.
The provision for income taxes for the current quarter increased
$135,000 to $1.79 million from $1.65 million for the preceding
quarter, primarily due to a $143,000 decrease in the tax benefit
from stock option dispositions. Timberland’s effective
income tax rate was 20.3% for the quarter ended June 30, 2021
compared to 18.6% for the quarter ended March 31, 2021. The fiscal
year-to-date provision for income taxes increased $916,000 to $5.32
million for the first nine months of fiscal 2021 from $4.40 million
for the first nine months of fiscal 2020, primarily due to higher
income before income taxes. Timberland’s effective income tax rate
for the nine month periods ended June 30, 2021 and 2020 was
19.8%.
Balance Sheet Management
Total assets increased $41.22 million, or 2%, to $1.74 billion
at June 30, 2021 from $1.70 billion at March 31, 2021.
The increase was primarily due to a $70.38 million increase in
total cash and cash equivalents and a $5.70 million net increase in
investment securities and CDs held for investment, and smaller
increases in several other categories. This increase was partially
offset by a $29.12 million decrease in net loans receivable (due to
SBA PPP loan payoffs). Excluding SBA PPP loans, net loans
receivable increased during the current quarter at an annualized
rate of 6%. The increase in total assets was funded primarily by an
increase in total deposits and by retained net income.
Loans
Primarily as a result of the successful processing of SBA PPP
loan forgiveness applications totaling $42.54 million, net loans
receivable decreased $29.12 million, or 3%, to $1.002 billion at
June 30, 2021 from $1.031 billion at March 31, 2021. The decrease
in SBA PPP loans was partially offset by a $6.25 million increase
in commercial business loans, a $6.02 million increase in
construction and land development loans and smaller increases in
several other categories.
|
Loan Portfolio($ in
thousands) |
|
|
|
|
|
|
|
June 30, 2021 |
|
March 31, 2021 |
|
June 30, 2020 |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
Mortgage loans: |
|
|
|
|
|
|
|
|
|
|
|
One- to four-family (a) |
$ |
119,173 |
|
|
11 |
% |
|
$ |
117,184 |
|
|
10 |
% |
|
$ |
120,514 |
|
|
11 |
% |
Multi-family |
|
94,756 |
|
|
9 |
|
|
|
92,435 |
|
|
8 |
|
|
|
79,468 |
|
|
7 |
|
Commercial |
|
458,889 |
|
|
41 |
|
|
|
461,966 |
|
|
40 |
|
|
|
455,454 |
|
|
40 |
|
Construction - custom and owner/builder |
|
105,484 |
|
|
9 |
|
|
|
105,305 |
|
|
9 |
|
|
|
134,709 |
|
|
12 |
|
Construction - speculative one-to four-family |
|
18,038 |
|
|
2 |
|
|
|
17,289 |
|
|
2 |
|
|
|
12,136 |
|
|
1 |
|
Construction - commercial |
|
43,879 |
|
|
4 |
|
|
|
42,340 |
|
|
4 |
|
|
|
33,166 |
|
|
3 |
|
Construction - multi-family |
|
45,624 |
|
|
4 |
|
|
|
44,266 |
|
|
4 |
|
|
|
27,449 |
|
|
2 |
|
Construction - land |
|
|
|
|
|
|
|
|
|
|
|
Development |
|
4,434 |
|
|
-- |
|
|
|
2,238 |
|
|
-- |
|
|
|
6,132 |
|
|
1 |
|
Land |
|
18,289 |
|
|
2 |
|
|
|
19,041 |
|
|
2 |
|
|
|
27,009 |
|
|
3 |
|
Total mortgage loans |
|
908,566 |
|
|
82 |
|
|
|
902,064 |
|
|
79 |
|
|
|
896,037 |
|
|
80 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer loans: |
|
|
|
|
|
|
|
|
|
|
|
Home equity and second mortgage |
|
31,891 |
|
|
3 |
|
|
|
32,026 |
|
|
3 |
|
|
|
34,405 |
|
|
3 |
|
Other |
|
2,725 |
|
|
-- |
|
|
|
2,756 |
|
|
-- |
|
|
|
3,552 |
|
|
-- |
|
Total consumer loans |
|
34,616 |
|
|
3 |
|
|
|
34,782 |
|
|
3 |
|
|
|
37,957 |
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans: |
|
|
|
|
|
|
|
|
|
|
|
Commercial business loans |
|
72,890 |
|
|
6 |
|
|
|
66,645 |
|
|
6 |
|
|
|
71,586 |
|
|
6 |
|
SBA PPP loans |
|
95,633 |
|
|
9 |
|
|
|
138,175 |
|
|
12 |
|
|
|
122,581 |
|
|
11 |
|
Total commercial loans |
|
168,523 |
|
|
15 |
|
|
|
204,820 |
|
|
18 |
|
|
|
194,167 |
|
|
17 |
|
Total loans |
|
1,111,705 |
|
|
100 |
% |
|
|
1,141,666 |
|
|
100 |
% |
|
|
1,128,161 |
|
|
100 |
% |
Less: |
|
|
|
|
|
|
|
|
|
|
|
Undisbursed portion of construction loans in process |
|
(90,332 |
) |
|
|
|
|
(90,550 |
) |
|
|
|
|
(95,785 |
) |
|
|
Deferred loan origination fees |
|
(6,339 |
) |
|
|
|
|
(6,999 |
) |
|
|
|
|
(6,723 |
) |
|
|
Allowance for loan losses |
|
(13,469 |
) |
|
|
|
|
(13,434 |
) |
|
|
|
|
(12,894 |
) |
|
|
Total loans receivable, net |
$ |
1,001,565 |
|
|
|
|
$ |
1,030,683 |
|
|
|
|
$ |
1,012,759 |
|
|
|
_______________________(a) Does not include
one- to four-family loans held for sale totaling $3,359, $8,455 and
$9,837 at June 30, 2021, March 31, 2021 and June 30, 2020,
respectively.
The following table highlights nine commercial real estate
(“CRE”) segments generally presumed to have the potential to be
more adversely affected by work at home and COVID related social
distancing practices than other segments of the loan portfolio.
|
CRE
Portfolio Breakdown by Collateral($ in thousands) |
|
|
|
|
|
|
|
Collateral Type |
|
Amount |
|
Percent of CRE Portfolio |
|
Percent of Total Loan Portfolio |
Office buildings |
|
$ |
74,439 |
|
|
16 |
% |
|
7 |
% |
Medical/dental offices |
|
|
55,775 |
|
|
12 |
|
|
5 |
|
Other retail buildings |
|
|
40,475 |
|
|
9 |
|
|
4 |
|
Hotels/motels |
|
|
26,271 |
|
|
6 |
|
|
2 |
|
Restaurants |
|
|
25,427 |
|
|
6 |
|
|
2 |
|
Nursing homes |
|
|
18,902 |
|
|
4 |
|
|
2 |
|
Shopping centers |
|
|
14,252 |
|
|
3 |
|
|
1 |
|
Churches |
|
|
13,131 |
|
|
3 |
|
|
1 |
|
Mini-Storage |
|
|
12,662 |
|
|
3 |
|
|
1 |
|
Additional CRE |
|
|
177,555 |
|
|
38 |
|
|
16 |
|
Total CRE |
|
$ |
458,889 |
|
|
100 |
% |
|
41 |
% |
|
|
|
|
|
|
|
|
|
|
|
Within Timberland’s commercial business loan portfolio (non-CRE)
resides a segment of restaurant loans totaling $7.40 million in
outstanding balances at June 30, 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 $146.60 million in loans (including $6.16
million of SBA PPP loans) during the quarter ended June 30, 2021,
compared to $250.01 million (including $122.58 million of SBA PPP
loans) for the comparable quarter one year ago and $167.15 million
(including $58.70 million of SBA PPP loans) 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 $41.06 million were sold
compared to $52.08 million for the comparable quarter one year ago
and $41.29 million for the preceding quarter.
Timberland’s investment securities and CDs held for investment
increased $5.70 million, or 4%, to $151.98 million at June 30,
2021, from $146.28 million at March 31, 2021. The increase was
primarily due to the purchase of additional mortgage-backed
investment securities and U.S. Treasury 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 39.2%
of total liabilities at June 30, 2021, compared to 36.1% at March
31, 2021, and 28.8% one year ago.
Deposits
Total deposits increased $40.79 million, or 3%, during the
current quarter to $1.52 billion at June 30, 2021, from $1.48
billion at March 31, 2021. The quarter’s increase consisted of a
$26.14 million increase in NOW checking account balances, a $16.71
million increase in money market account balances, and a $4.37
million increase in savings account balances. These increases were
partially offset by a $3.60 million decrease in
non-interest-bearing demand account balances and a $2.82 million
decrease in certificates of deposit account balances.
Deposit Breakdown($ in thousands) |
|
|
June 30, 2021 |
|
March 31, 2021 |
|
June 30, 2020 |
|
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
Non-interest-bearing demand |
|
$ |
495,938 |
|
|
33 |
% |
|
$ |
499,541 |
|
|
34 |
% |
|
$ |
427,102 |
|
|
32 |
% |
NOW checking |
|
|
429,950 |
|
|
28 |
|
|
|
403,811 |
|
|
27 |
|
|
|
352,999 |
|
|
27 |
|
Savings |
|
|
255,103 |
|
|
17 |
|
|
|
250,736 |
|
|
17 |
|
|
|
212,645 |
|
|
16 |
|
Money market |
|
|
189,443 |
|
|
12 |
|
|
|
171,896 |
|
|
11 |
|
|
|
150,611 |
|
|
12 |
|
Money market – reciprocal |
|
|
12,253 |
|
|
1 |
|
|
|
13,094 |
|
|
1 |
|
|
|
11,257 |
|
|
1 |
|
Certificates of deposit under
$250 |
|
|
115,782 |
|
|
7 |
|
|
|
119,388 |
|
|
8 |
|
|
|
131,980 |
|
|
10 |
|
Certificates of deposit $250 and
over |
|
|
24,183 |
|
|
2 |
|
|
|
23,393 |
|
|
2 |
|
|
|
31,946 |
|
|
2 |
|
Total deposits |
|
$ |
1,522,652 |
|
|
100 |
% |
|
$ |
1,481,859 |
|
|
100 |
% |
|
$ |
1,318,540 |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ Equity and Capital
Ratios
Total shareholders’ equity increased $4.95 million, or 2%, to
$203.49 million at June 30, 2021, from $198.54 million at March 31,
2021. The increase in shareholders’ equity was primarily due to net
income of $7.02 million for the quarter, which was partially offset
by the payment of $1.76 million in dividends to shareholders and
the repurchase of 16,688 shares of the Company’s common stock for
$469,000 (an average price of $28.08 per share). Timberland had
399,282 shares available to be repurchased on its existing stock
repurchase plan at June 30, 2021.
Timberland remains well capitalized with a total
risk-based capital ratio of 22.60% and a Tier 1 leverage capital
ratio of 11.03% at June 30, 2021.
Asset Quality and Loan
Deferrals
Timberland’s non-performing assets to total assets
ratio improved to 0.14% at June 30, 2021, from 0.31% one year ago
and 0.16% at March 31, 2021. There were net recoveries of $35,000
for the current quarter compared to net recoveries of $2,000 for
the preceding quarter and net recoveries of $4,000 for the
comparable quarter one year ago. No
provisions for loan losses were made during the current and
preceding quarter compared to a $1.00 million provision for loan
losses for the comparable quarter one year ago.
Timberland consistently worked with borrowers
affected by the COVID-19 pandemic by offering loan deferral and
forbearance plans during the pandemic.
One year ago, at June 30, 2020, Timberland had granted deferrals on
209 loans with balances aggregating to $135.83 million (13.4% of
net loans receivable). Deferrals were primarily approved for 90-day
periods with interest continuing to accrue or with interest
scheduled to be paid monthly. However, nearly all borrowers that
were granted deferrals have resumed making regular payments and as
of June 30, 2021, only one loan remained on deferral status. The
following table notes the single COVID-19 related loan still on
deferral status as of June 30, 2021. Interest is being paid monthly
on this loan.
|
COVID-19
Loan Modifications($ in thousands) |
|
|
|
|
|
Industry / Collateral Type |
|
Amount |
|
Percent ofNet LoansReceivable |
Hotel |
|
$ |
1,703 |
|
|
0.17 |
% |
|
|
|
|
|
|
|
|
The allowance for loan losses (“ALL”) as a
percentage of loans receivable was 1.33% at June 30, 2021, compared
to 1.26% one year ago and 1.29% at March 31, 2021. If SBA PPP
loans, which are 100% SBA guaranteed, are excluded, the ALL to
loans receivable (excluding SBA PPP loans) at June 30, 2021 was
1.46% (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 $499,000 at June
30, 2021. The allowance for loan losses to loans receivable
(excluding SBA PPP loan balances and the remaining aggregate
balance of the loans acquired in the South Sound Acquisition) was
1.53% (non-GAAP) at June 30, 2021.
The following table details the ALL as a percentage
of loans receivable:
|
|
June 30, |
|
March 31, |
|
June 30, |
|
|
2021 |
|
2021 |
|
2020 |
ALL to loans receivable |
|
1.33 |
% |
|
1.29 |
% |
|
1.26 |
% |
ALL to loans receivable
(excluding SBA PPP loans) (non-GAAP) |
|
1.46 |
% |
|
1.48 |
% |
|
1.43 |
% |
ALL to loans receivable
(excluding SBA PPP loans and South Sound Acquisition loans)
(non-GAAP) |
|
1.53 |
% |
|
1.56 |
% |
|
1.55 |
% |
Total delinquent loans (past due 30 days or more)
and non-accrual loans decreased $611,000, or 17%, to $2.94 million
at June 30, 2021, from $3.55 million one year ago, and decreased
$985,000, or 25%, from $3.93 million at March 31,
2021. Non-accrual loans decreased
$986,000, or 33%, to $2.03 million at June 30, 2021, from $3.02
million one year ago and decreased $276,000, or 12%, from $2.31
million at March 31, 2021
|
Non-Accrual Loans($ in thousands) |
|
|
|
|
|
|
|
June 30, 2021 |
|
March 31, 2021 |
|
June 30, 2020 |
|
Amount |
|
Quantity |
|
Amount |
|
Quantity |
|
Amount |
|
Quantity |
Mortgage loans: |
|
|
|
|
|
|
|
|
|
|
|
One- to four-family |
$411 |
|
|
2 |
|
$415 |
|
|
2 |
|
$927 |
|
|
5 |
Commercial |
|
373 |
|
|
1 |
|
|
643 |
|
|
2 |
|
|
875 |
|
|
3 |
Land |
|
169 |
|
|
2 |
|
|
173 |
|
|
2 |
|
|
185 |
|
|
2 |
Total mortgage loans |
|
953 |
|
|
5 |
|
|
1,231 |
|
|
6 |
|
|
1,987 |
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
Consumer loans |
|
|
|
|
|
|
|
|
|
|
|
Home equity and second |
|
|
|
|
|
|
|
|
|
|
|
Mortgage |
|
545 |
|
|
6 |
|
|
539 |
|
|
6 |
|
|
586 |
|
|
7 |
Other |
|
18 |
|
|
2 |
|
|
8 |
|
|
1 |
|
|
10 |
|
|
1 |
Total consumer loans |
|
563 |
|
|
8 |
|
|
547 |
|
|
7 |
|
|
596 |
|
|
8 |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial business loans |
|
513 |
|
|
7 |
|
|
527 |
|
|
7 |
|
|
432 |
|
|
6 |
Total loans |
$2,029 |
|
|
20 |
|
$2,305 |
|
|
20 |
|
$3,015 |
|
|
24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OREO and other repossessed assets decreased 89% to
$157,000 at June 30, 2021, from $1.47 million at June 30, 2020, and
remained unchanged from $157,000 at March 31, 2021. At June 30,
2021, the OREO and other repossessed asset portfolio consisted of
three individual land parcels. No OREO properties were sold during
the quarter ended June 30, 2021.
|
OREO and Other Repossessed Assets($ in
thousands) |
|
|
|
|
|
|
|
June 30, 2021 |
|
March 31, 2021 |
|
June 30, 2020 |
|
Amount |
|
Quantity |
|
Amount |
|
Quantity |
|
Amount |
|
Quantity |
Land |
$ |
157 |
|
|
3 |
|
$ |
157 |
|
|
3 |
|
$ |
1,466 |
|
|
8 |
Total |
$ |
157 |
|
|
3 |
|
$ |
157 |
|
|
3 |
|
$ |
1,466 |
|
|
8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of South Sound BankOn
October 1, 2018, the Company completed the acquisition of South
Sound Bank, a Washington-state chartered bank, headquartered in
Olympia, Washington (“South Sound Acquisition”). The Company
acquired 100% of the outstanding common stock of South Sound Bank,
and South Sound Bank was merged into Timberland Bank and the
Company. Pursuant to the terms of the merger agreement, South Sound
Bank shareholders received 0.746 of a share of the Company’s common
stock and $5.68825 in cash per share of South Sound Bank common
stock. The Company issued 904,826 shares of its common stock
(valued at $28,267,000 based on the Company’s closing stock price
on September 30, 2018 of $31.24 per share) and paid $6,903,000 in
cash in the transaction for total consideration paid of
$35,170,000.
About Timberland Bancorp, Inc. Timberland
Bancorp, Inc., a Washington corporation, is the holding company for
Timberland Bank. The Bank opened for business in 1915 and 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) |
|
June 30, |
|
March 31, |
|
June 30, |
(unaudited) |
|
2021 |
|
2021 |
|
2020 |
|
Interest and dividend
income |
|
|
|
|
|
|
|
Loans receivable |
|
$ |
13,298 |
|
|
$ |
12,790 |
|
|
$ |
12,871 |
|
|
Investment securities |
|
|
292 |
|
|
|
284 |
|
|
|
345 |
|
|
Dividends from mutual funds, FHLB
stock and other investments |
|
|
28 |
|
|
|
27 |
|
|
|
23 |
|
|
Interest bearing deposits in
banks |
|
|
247 |
|
|
|
259 |
|
|
|
429 |
|
|
Total interest and dividend income |
|
|
13,865 |
|
|
|
13,360 |
|
|
|
13,668 |
|
|
|
|
|
|
|
|
|
|
Interest
expense |
|
|
|
|
|
|
|
Deposits |
|
|
690 |
|
|
|
764 |
|
|
|
1,159 |
|
|
Borrowings |
|
|
18 |
|
|
|
29 |
|
|
|
29 |
|
|
Total interest expense |
|
|
708 |
|
|
|
793 |
|
|
|
1,188 |
|
|
Net interest income |
|
|
13,157 |
|
|
|
12,567 |
|
|
|
12,480 |
|
|
Provision for loan
losses |
|
|
-- |
|
|
|
-- |
|
|
|
1,000 |
|
|
Net interest income after provision for loan
losses |
|
|
13,157 |
|
|
|
12,567 |
|
|
|
11,480 |
|
|
|
|
|
|
|
|
|
|
Non-interest
income |
|
|
|
|
|
|
|
Service charges on deposits |
|
|
948 |
|
|
|
941 |
|
|
|
858 |
|
|
ATM and debit card interchange
transaction fees |
|
|
1,363 |
|
|
|
1,237 |
|
|
|
1,069 |
|
|
Gain on sales of loans, net |
|
|
1,607 |
|
|
|
1,758 |
|
|
|
2,141 |
|
|
Bank owned life insurance
(“BOLI”) net earnings |
|
|
150 |
|
|
|
146 |
|
|
|
148 |
|
|
Servicing income (expense) on
loans sold, net |
|
|
(9 |
) |
|
|
(10 |
) |
|
|
35 |
|
|
Valuation recovery (allowance) on
loan servicing rights, net |
|
|
(179 |
) |
|
|
438 |
|
|
|
-- |
|
|
Recoveries on investment
securities, net |
|
|
6 |
|
|
|
3 |
|
|
|
6 |
|
|
Other |
|
|
380 |
|
|
|
373 |
|
|
|
598 |
|
|
Total non-interest income, net |
|
|
4,266 |
|
|
|
4,886 |
|
|
|
4,855 |
|
|
|
|
|
|
|
|
|
|
Non-interest
expense |
|
|
|
|
|
|
|
Salaries and employee
benefits |
|
|
4,554 |
|
|
|
4,778 |
|
|
|
4,570 |
|
|
Premises and equipment |
|
|
995 |
|
|
|
998 |
|
|
|
1,077 |
|
|
Loss on disposition of premises
and equipment, net |
|
|
-- |
|
|
|
-- |
|
|
|
4 |
|
|
Advertising |
|
|
162 |
|
|
|
155 |
|
|
|
150 |
|
|
OREO and other repossessed
assets, net |
|
|
5 |
|
|
|
(68 |
) |
|
|
11 |
|
|
ATM and debit card
processing |
|
|
464 |
|
|
|
445 |
|
|
|
405 |
|
|
Postage and courier |
|
|
141 |
|
|
|
149 |
|
|
|
137 |
|
|
State and local taxes |
|
|
284 |
|
|
|
255 |
|
|
|
255 |
|
|
Professional fees |
|
|
262 |
|
|
|
181 |
|
|
|
286 |
|
|
FDIC insurance expense |
|
|
100 |
|
|
|
105 |
|
|
|
143 |
|
|
Loan administration and
foreclosure |
|
|
148 |
|
|
|
90 |
|
|
|
191 |
|
|
Data processing and
telecommunications |
|
|
627 |
|
|
|
634 |
|
|
|
603 |
|
|
Deposit operations |
|
|
289 |
|
|
|
245 |
|
|
|
245 |
|
|
Amortization of core deposit
intangible (“CDI”) |
|
|
90 |
|
|
|
91 |
|
|
|
101 |
|
|
Other, net |
|
|
492 |
|
|
|
493 |
|
|
|
483 |
|
|
Total non-interest expense, net |
|
|
8,613 |
|
|
|
8,551 |
|
|
|
8,661 |
|
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
|
8,810 |
|
|
|
8,902 |
|
|
|
7,674 |
|
|
Provision for income
taxes |
|
|
1,786 |
|
|
|
1,651 |
|
|
|
1,463 |
|
|
Net income |
|
$ |
7,024 |
|
|
$ |
7,251 |
|
|
$ |
6,211 |
|
|
|
|
|
|
|
|
|
|
Net income per common
share: |
|
|
|
|
|
|
|
Basic |
|
$ |
0.84 |
|
|
$ |
0.87 |
|
|
$ |
0.75 |
|
|
Diluted |
|
|
0.83 |
|
|
|
0.86 |
|
|
|
0.74 |
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
|
8,365,350 |
|
|
|
8,331,121 |
|
|
|
8,309,947 |
|
|
Diluted |
|
|
8,465,393 |
|
|
|
8,444,798 |
|
|
|
8,378,983 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TIMBERLAND
BANCORP INC. AND SUBSIDIARYCONSOLIDATED STATEMENTS
OF INCOME |
|
Nine Months Ended |
($ in thousands,
except per share amounts) |
|
June 30, |
|
|
|
June 30, |
(unaudited) |
|
2021 |
|
|
|
2020 |
|
Interest and dividend
income |
|
|
|
|
|
|
|
Loans receivable |
|
$ |
39,406 |
|
|
|
|
$ |
38,457 |
|
|
Investment securities |
|
|
877 |
|
|
|
|
|
1,274 |
|
|
Dividends from mutual funds, FHLB
stock and other investments |
|
|
83 |
|
|
|
|
|
95 |
|
|
Interest bearing deposits in
banks |
|
|
816 |
|
|
|
|
|
2,164 |
|
|
Total interest and dividend income |
|
|
41,182 |
|
|
|
|
|
41,990 |
|
|
|
|
|
|
|
|
|
|
Interest
expense |
|
|
|
|
|
|
|
Deposits |
|
|
2,358 |
|
|
|
|
|
3,591 |
|
|
Borrowings |
|
|
76 |
|
|
|
|
|
37 |
|
|
Total interest expense |
|
|
2,434 |
|
|
|
|
|
3,628 |
|
|
Net interest income |
|
|
38,748 |
|
|
|
|
|
38,362 |
|
|
Provision for loan
losses |
|
|
-- |
|
|
|
|
|
3,200 |
|
|
Net interest income after provision for loan
losses |
|
|
38,748 |
|
|
|
|
|
35,162 |
|
|
|
|
|
|
|
|
|
|
Non-interest
income |
|
|
|
|
|
|
|
Service charges on deposits |
|
|
2,943 |
|
|
|
|
|
3,136 |
|
|
ATM and debit card interchange
transaction fees |
|
|
3,755 |
|
|
|
|
|
3,178 |
|
|
Gain on sales of loans, net |
|
|
5,367 |
|
|
|
|
|
3,829 |
|
|
BOLI net earnings |
|
|
445 |
|
|
|
|
|
442 |
|
|
Servicing income (expense) on
loans sold, net |
|
|
(4 |
) |
|
|
|
|
171 |
|
|
Valuation recovery (allowance) on
loan servicing rights, net |
|
|
23 |
|
|
|
|
|
(23 |
) |
|
Recoveries on investment
securities, net |
|
|
14 |
|
|
|
|
|
113 |
|
|
Other |
|
|
1,168 |
|
|
|
|
|
1,627 |
|
|
Total non-interest income, net |
|
|
13,711 |
|
|
|
|
|
12,473 |
|
|
|
|
|
|
|
|
|
|
Non-interest
expense |
|
|
|
|
|
|
|
Salaries and employee
benefits |
|
|
13,944 |
|
|
|
|
|
13,913 |
|
|
Premises and equipment |
|
|
2,949 |
|
|
|
|
|
2,914 |
|
|
Gain on disposition of premises
and equipment, net |
|
|
-- |
|
|
|
|
|
(98 |
) |
|
Advertising |
|
|
472 |
|
|
|
|
|
493 |
|
|
OREO and other repossessed
assets, net |
|
|
(89 |
) |
|
|
|
|
60 |
|
|
ATM and debit card
processing |
|
|
1,341 |
|
|
|
|
|
1,203 |
|
|
Postage and courier |
|
|
428 |
|
|
|
|
|
416 |
|
|
State and local taxes |
|
|
822 |
|
|
|
|
|
705 |
|
|
Professional fees |
|
|
675 |
|
|
|
|
|
766 |
|
|
FDIC insurance expense
(credit) |
|
|
301 |
|
|
|
|
|
116 |
|
|
Loan administration and
foreclosure |
|
|
319 |
|
|
|
|
|
358 |
|
|
Data processing and
telecommunications |
|
|
1,868 |
|
|
|
|
|
1,702 |
|
|
Deposit operations |
|
|
818 |
|
|
|
|
|
836 |
|
|
Amortization of CDI |
|
|
271 |
|
|
|
|
|
304 |
|
|
Other, net |
|
|
1,455 |
|
|
|
|
|
1,631 |
|
|
Total non-interest expense, net |
|
|
25,574 |
|
|
|
|
|
25,319 |
|
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
|
26,885 |
|
|
|
|
|
22,316 |
|
|
Provision for income
taxes |
|
|
5,320 |
|
|
|
|
|
4,404 |
|
|
Net income |
|
$ |
21,565 |
|
|
|
|
$ |
17,912 |
|
|
|
|
|
|
|
|
|
|
Net income per common
share: |
|
|
|
|
|
|
|
Basic |
|
$ |
2.59 |
|
|
|
|
$ |
2.15 |
|
|
Diluted |
|
|
2.55 |
|
|
|
|
|
2.12 |
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
|
8,336,590 |
|
|
|
|
|
8,331,908 |
|
|
Diluted |
|
|
8,440,861 |
|
|
|
|
|
8,437,030 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TIMBERLAND
BANCORP INC. AND SUBSIDIARYCONSOLIDATED BALANCE
SHEETS |
|
($ in thousands,
except per share amounts) (unaudited) |
|
June 30, |
|
March 31, |
|
June 30, |
|
|
2021 |
|
2021 |
|
2020 |
Assets |
|
|
|
|
|
|
Cash and due from
financial institutions |
|
$ |
25,387 |
|
|
$ |
21,707 |
|
|
$ |
24,691 |
|
Interest-bearing
deposits in banks |
|
|
478,339 |
|
|
|
411,635 |
|
|
|
246,953 |
|
|
Total cash and cash equivalents |
|
|
503,726 |
|
|
|
433,342 |
|
|
|
271,644 |
|
|
|
|
|
|
|
|
|
Certificates of
deposit (“CDs”) held for investment, at cost |
|
|
31,218 |
|
|
|
39,674 |
|
|
|
72,014 |
|
Investment
securities: |
|
|
|
|
|
|
|
Held to maturity, at amortized
cost |
|
|
52,314 |
|
|
|
36,465 |
|
|
|
30,660 |
|
|
Available for sale, at fair
value |
|
|
67,491 |
|
|
|
69,184 |
|
|
|
41,914 |
|
Investments in equity
securities, at fair value |
|
|
960 |
|
|
|
957 |
|
|
|
977 |
|
FHLB stock |
|
|
2,103 |
|
|
|
2,303 |
|
|
|
1,922 |
|
Other investments, at
cost |
|
|
3,000 |
|
|
|
3,000 |
|
|
|
3,000 |
|
Loans held for
sale |
|
|
3,359 |
|
|
|
8,455 |
|
|
|
9,837 |
|
|
|
|
|
|
|
|
Loans receivable |
|
|
1,015,034 |
|
|
|
1,044,117 |
|
|
|
1,025,653 |
|
Less: Allowance for
loan losses |
|
|
(13,469 |
) |
|
|
(13,434 |
) |
|
|
(12,894 |
) |
|
Net loans receivable |
|
|
1,001,565 |
|
|
|
1,030,683 |
|
|
|
1,012,759 |
|
|
|
|
|
|
|
|
|
Premises and
equipment, net |
|
|
22,519 |
|
|
|
22,763 |
|
|
|
23,119 |
|
OREO and other
repossessed assets, net |
|
|
157 |
|
|
|
157 |
|
|
|
1,466 |
|
BOLI |
|
|
22,041 |
|
|
|
21,891 |
|
|
|
21,447 |
|
Accrued interest
receivable |
|
|
4,260 |
|
|
|
4,471 |
|
|
|
4,614 |
|
Goodwill |
|
|
15,131 |
|
|
|
15,131 |
|
|
|
15,131 |
|
CDI |
|
|
1,354 |
|
|
|
1,444 |
|
|
|
1,727 |
|
Loan servicing
rights, net |
|
|
3,548 |
|
|
|
3,604 |
|
|
|
3,073 |
|
Operating lease
right-of-use assets |
|
|
2,360 |
|
|
|
2,436 |
|
|
|
2,662 |
|
Other assets |
|
|
3,354 |
|
|
|
3,284 |
|
|
|
3,676 |
|
|
Total
assets |
|
$ |
1,740,460 |
|
|
$ |
1,699,244 |
|
|
$ |
1,521,642 |
|
|
|
|
|
|
|
|
|
Liabilities and shareholders’ equity |
|
|
|
|
|
|
Deposits:
Non-interest-bearing demand |
|
$ |
495,938 |
|
|
$ |
499,541 |
|
|
$ |
427,102 |
|
Deposits:
Interest-bearing |
|
|
1,026,714 |
|
|
|
982,318 |
|
|
|
891,438 |
|
|
Total deposits |
|
|
1,522,652 |
|
|
|
1,481,859 |
|
|
|
1,318,540 |
|
|
|
|
|
|
|
|
|
Operating lease
liabilities |
|
|
2,432 |
|
|
|
2,499 |
|
|
|
2,695 |
|
FHLB borrowings |
|
|
5,000 |
|
|
|
10,000 |
|
|
|
10,000 |
|
Other liabilities and
accrued expenses |
|
|
6,884 |
|
|
|
6,343 |
|
|
|
7,601 |
|
|
Total
liabilities |
|
|
1,536,968 |
|
|
|
1,500,701 |
|
|
|
1,338,836 |
|
|
|
|
|
|
|
|
Shareholders’ equity |
|
|
|
|
|
|
Common stock, $.01 par value; 50,000,000 shares
authorized;
8,353,969 shares issued and outstanding – June 30,
2021
8,361,457 shares issued and outstanding – March 31, 2021
8,310,793 shares issued and outstanding – June 30, 2020 |
|
|
42,624 |
|
|
|
42,949 |
|
|
|
42,352 |
|
Retained
earnings |
|
|
160,739 |
|
|
|
155,473 |
|
|
|
140,478 |
|
Accumulated other
comprehensive income (loss) |
|
|
129 |
|
|
|
121 |
|
|
|
(24 |
) |
|
Total shareholders’
equity |
|
|
203,492 |
|
|
|
198,543 |
|
|
|
182,806 |
|
|
Total liabilities and
shareholders’ equity |
|
$ |
1,740,460 |
|
|
$ |
1,699,244 |
|
|
$ |
1,521,642 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KEY FINANCIAL RATIOS AND
DATA |
|
Three Months Ended |
($ in thousands, except per share
amounts) (unaudited) |
|
June 30, |
|
March 31, |
|
June 30, |
|
|
2021 |
|
2021 |
|
2020 |
PERFORMANCE
RATIOS: |
|
|
|
|
|
|
Return on average assets (a) |
|
|
1.63 |
% |
|
|
1.75 |
% |
|
|
1.70 |
% |
Return on average equity (a) |
|
|
14.02 |
% |
|
|
14.89 |
% |
|
|
13.83 |
% |
Net interest margin (a) |
|
|
3.22 |
% |
|
|
3.21 |
% |
|
|
3.63 |
% |
Efficiency ratio |
|
|
49.43 |
% |
|
|
48.99 |
% |
|
|
49.96 |
% |
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
June 30, |
|
|
|
June 30, |
|
|
2021 |
|
|
|
2020 |
PERFORMANCE
RATIOS: |
|
|
|
|
|
|
Return on average assets (a) |
|
|
1.74 |
% |
|
|
|
|
1.79 |
% |
Return on average equity (a) |
|
|
14.76 |
% |
|
|
|
|
13.53 |
% |
Net interest margin (a) |
|
|
3.30 |
% |
|
|
|
|
4.08 |
% |
Efficiency ratio |
|
|
48.75 |
% |
|
|
|
|
49.81 |
% |
|
|
|
|
|
|
|
|
|
June 30, |
|
March 31, |
|
June 30, |
|
|
2021 |
|
2021 |
|
2020 |
ASSET QUALITY RATIOS AND DATA: |
|
|
|
|
|
|
Non-accrual loans |
|
$ |
2,029 |
|
|
$ |
2,305 |
|
|
$ |
3,015 |
|
Loans past due 90 days and still
accruing |
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
Non-performing investment
securities |
|
|
179 |
|
|
|
188 |
|
|
|
228 |
|
OREO and other repossessed
assets |
|
|
157 |
|
|
|
157 |
|
|
|
1,466 |
|
Total non-performing assets
(b) |
|
$ |
2,365 |
|
|
$ |
2,650 |
|
|
$ |
4,709 |
|
|
|
|
|
|
|
|
Non-performing assets to total
assets (b) |
|
|
0.14 |
% |
|
|
0.16 |
% |
|
|
0.31 |
% |
Net charge-offs (recoveries)
during quarter |
|
$ |
(35 |
) |
|
$ |
(2 |
) |
|
$ |
(4 |
) |
ALL to non-accrual loans |
|
|
664 |
% |
|
|
583 |
% |
|
|
428 |
% |
ALL to loans receivable (c) |
|
|
1.33 |
% |
|
|
1.29 |
% |
|
|
1.26 |
% |
ALL to loans receivable
(excluding SBA PPP loans) (d) (non-GAAP) |
|
|
1.46 |
% |
|
|
1.48 |
% |
|
|
1.43 |
% |
ALL to loans receivable
(excluding SBA PPP loans and South Sound Acquisition loans) (d) (e)
(non-GAAP) |
|
|
1.53 |
% |
|
|
1.56 |
% |
|
|
1.55 |
% |
Troubled debt restructured loans
on accrual status (f) |
|
$ |
2,380 |
|
|
$ |
2,864 |
|
|
$ |
2,876 |
|
|
|
|
|
|
|
|
CAPITAL RATIOS: |
|
|
|
|
|
|
Tier 1 leverage capital |
|
|
11.03 |
% |
|
|
11.19 |
% |
|
|
11.55 |
% |
Tier 1 risk-based capital |
|
|
21.34 |
% |
|
|
19.47 |
% |
|
|
19.39 |
% |
Common equity Tier 1 risk-based
capital |
|
|
21.34 |
% |
|
|
19.47 |
% |
|
|
19.39 |
% |
Total risk-based capital |
|
|
22.60 |
% |
|
|
20.72 |
% |
|
|
20.65 |
% |
Tangible common equity to
tangible assets (non-GAAP) |
|
|
10.85 |
% |
|
|
10.81 |
% |
|
|
11.03 |
% |
|
|
|
|
|
|
|
BOOK VALUES: |
|
|
|
|
|
|
Book value per common share |
|
$ |
24.36 |
|
|
$ |
23.75 |
|
|
$ |
22.00 |
|
Tangible book value per common
share (g) |
|
|
22.39 |
|
|
|
21.76 |
|
|
|
19.97 |
|
________________________________________________
(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
$95,633, $138,175 and $122,581 at June 30, 2021, March 31, 2021 and
June 30, 2020, respectively.(e) Does not include loans acquired in
the South Sound Acquisition totaling $40,622, $46,626 and $73,084
at June 30, 2021, March 31, 2021 and June 30, 2020,
respectively.(f) Does not include troubled debt restructured loans
totaling $187, $192 and $207 reported as non-accrual loans at June
30, 2021, March 31, 2021 and June 30, 2020, respectively. (g)
Tangible common equity divided by common shares outstanding
(non-GAAP).
|
AVERAGE
BALANCES, YIELDS, AND RATES - QUARTERLY ($ in
thousands)(unaudited) |
|
|
|
For the Three Months Ended |
|
June 30, 2021 |
|
March 31, 2021 |
|
June 30, 2020 |
|
Amount |
|
Rate |
|
Amount |
|
Rate |
|
Amount |
|
Rate |
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
Loans receivable and loans held for sale |
$ |
1,032,591 |
|
|
5.15 |
% |
|
$ |
1,044,476 |
|
|
4.90 |
% |
|
$ |
1,015,966 |
|
|
5.07 |
% |
Investment securities and FHLB
stock (1) |
|
115,839 |
|
|
1.10 |
|
|
|
101,675 |
|
|
1.23 |
|
|
|
81,086 |
|
|
1.82 |
|
Interest-earning deposits in
banks and CDs |
|
487,508 |
|
|
0.20 |
|
|
|
422,286 |
|
|
0.24 |
|
|
|
278,158 |
|
|
0.62 |
|
Total interest-earning assets |
|
1,635,938 |
|
|
3.39 |
|
|
|
1,568,437 |
|
|
3.41 |
|
|
|
1,375,210 |
|
|
3.97 |
|
Other assets |
|
87,638 |
|
|
|
|
|
85,203 |
|
|
|
|
|
87,905 |
|
|
|
Total assets |
$ |
1,723,576 |
|
|
|
|
$ |
1,653,640 |
|
|
|
|
$ |
1,463,115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
NOW checking accounts |
$ |
416,234 |
|
|
0.13 |
% |
|
$ |
394,612 |
|
|
0.16 |
% |
|
$ |
332,502 |
|
|
0.26 |
% |
Money market accounts |
|
196,187 |
|
|
0.29 |
|
|
|
178,768 |
|
|
0.30 |
|
|
|
156,537 |
|
|
0.47 |
|
Savings accounts |
|
253,147 |
|
|
0.08 |
|
|
|
236,504 |
|
|
0.08 |
|
|
|
199,054 |
|
|
0.11 |
|
Certificates of deposit
accounts |
|
141,301 |
|
|
1.02 |
|
|
|
146,065 |
|
|
1.19 |
|
|
|
168,368 |
|
|
1.68 |
|
Total interest-bearing deposits |
|
1,006,869 |
|
|
0.27 |
|
|
|
955,949 |
|
|
0.32 |
|
|
|
856,461 |
|
|
0.54 |
|
Borrowings |
|
5,769 |
|
|
1.25 |
|
|
|
10,003 |
|
|
1.17 |
|
|
|
10,000 |
|
|
1.17 |
|
Total interest-bearing liabilities |
|
1,012,638 |
|
|
0.28 |
|
|
|
965,952 |
|
|
0.33 |
|
|
|
866,461 |
|
|
0.55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing demand
deposits |
|
499,383 |
|
|
|
|
|
482,528 |
|
|
|
|
|
406,396 |
|
|
|
Other liabilities |
|
11,217 |
|
|
|
|
|
10,365 |
|
|
|
|
|
10,684 |
|
|
|
Shareholders’ equity |
|
200,338 |
|
|
|
|
|
194,795 |
|
|
|
|
|
179,574 |
|
|
|
Total liabilities and shareholders’ equity |
$ |
1,723,576 |
|
|
|
|
$ |
1,653,640 |
|
|
|
|
$ |
1,463,115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread |
|
|
3.11 |
% |
|
|
|
3.08 |
% |
|
|
|
3.42 |
% |
Net interest margin (2) |
|
|
3.22 |
% |
|
|
|
3.21 |
% |
|
|
|
3.63 |
% |
Average interest-earning assets to |
|
|
|
|
|
|
|
|
|
|
|
average interest-bearing liabilities |
|
161.55 |
% |
|
|
|
|
162.37 |
% |
|
|
|
|
158.72 |
% |
|
|
_____________________________________(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 Nine Months Ended |
|
June 30, 2021 |
|
June 30, 2020 |
|
Amount |
|
Rate |
|
Amount |
|
Rate |
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
Loans receivable and loans held for sale |
$ |
1,035,733 |
|
|
5.07 |
% |
|
$ |
949,822 |
|
|
5.40 |
% |
Investment securities and FHLB
stock (1) |
|
103,821 |
|
|
1.23 |
|
|
|
76,282 |
|
|
2.40 |
|
Interest-earning deposits in
banks and CDs |
|
427,881 |
|
|
0.25 |
|
|
|
226,129 |
|
|
1.28 |
|
Total interest-earning assets |
|
1,567,435 |
|
|
3.50 |
|
|
|
1,252,233 |
|
|
4.47 |
|
Other assets |
|
85,636 |
|
|
|
|
|
85,405 |
|
|
|
Total assets |
$ |
1,653,071 |
|
|
|
|
$ |
1,337,638 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders’ Equity |
|
|
|
|
|
|
|
NOW checking accounts |
$ |
396,140 |
|
|
0.16 |
% |
|
$ |
310,717 |
|
|
0.29 |
% |
Money market accounts |
|
181,115 |
|
|
0.30 |
|
|
|
144,663 |
|
|
0.54 |
|
Savings accounts |
|
237,456 |
|
|
0.08 |
|
|
|
184,076 |
|
|
0.10 |
|
Certificates of deposit
accounts |
|
147,530 |
|
|
1.20 |
|
|
|
168,148 |
|
|
1.75 |
|
Total interest-bearing deposits |
|
962,241 |
|
|
0.33 |
|
|
|
807,604 |
|
|
0.59 |
|
Borrowings |
|
8,592 |
|
|
1.17 |
|
|
|
4,234 |
|
|
1.17 |
|
Total interest-bearing liabilities |
|
970,833 |
|
|
0.34 |
|
|
|
811,838 |
|
|
0.60 |
|
|
|
|
|
|
|
|
|
Non-interest-bearing demand
deposits |
|
476,628 |
|
|
|
|
|
339,460 |
|
|
|
Other liabilities |
|
10,757 |
|
|
|
|
|
9,823 |
|
|
|
Shareholders’ equity |
|
194,853 |
|
|
|
|
|
176,517 |
|
|
|
Total liabilities and shareholders’ equity |
$ |
1,653,071 |
|
|
|
|
$ |
1,337,638 |
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread |
|
|
3.16 |
% |
|
|
|
3.87 |
% |
Net interest margin (2) |
|
|
3.30 |
% |
|
|
|
4.08 |
% |
Average interest-earning assets to |
|
|
|
|
|
|
|
average interest-bearing liabilities |
|
161.45 |
% |
|
|
|
|
154.25 |
% |
|
|
_____________________________________(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) |
|
June 30, 2021 |
|
March 31, 2021 |
|
June 30, 2020 |
|
|
|
|
|
|
|
Shareholders’ equity |
|
$ |
203,492 |
|
|
$ |
198,543 |
|
|
$ |
182,806 |
|
Less goodwill and CDI |
|
|
(16,485 |
) |
|
|
(16,575 |
) |
|
|
(16,858 |
) |
Tangible common equity |
|
$ |
187,007 |
|
|
$ |
181,968 |
|
|
$ |
165,948 |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,740,460 |
|
|
$ |
1,699,244 |
|
|
$ |
1,521,642 |
|
Less goodwill and CDI |
|
|
(16,485 |
) |
|
|
(16,575 |
) |
|
|
(16,858 |
) |
Tangible assets |
|
$ |
1,723,975 |
|
|
$ |
1,682,669 |
|
|
$ |
1,504,784 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contact: |
|
Michael R. Sand,President & CEODean J.
Brydon, CFO(360)
533-4747www.timberlandbank.com |
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