News: $TSBK – Timberland Bancorp EPS Increases 46% to $1.17 for Fiscal Year 2015

Operating Revenue Increases, Non-Interest Income Increases and Net Loans Outstanding Increases
Announces $0.07 Regular Dividend and $0.05 Special Dividend

HOQUIAM, Wash., Nov. 2, 2015 (GLOBE NEWSWIRE) — Timberland Bancorp, Inc. (NASDAQ:TSBK) (“Timberland” or “the Company”) today reported that solid loan growth and improved asset quality contributed to record fourth quarter profits. The Company recorded net income of $2.96 million and $8.29 million, respectively, for the quarter and fiscal year ended September 30, 2015.

Net income per diluted common share increased 83% to $0.42 for the quarter ended September 30, 2015 from $0.23 for the comparable quarter one year ago and increased 35% from $0.31 for the quarter immediately prior. Earnings per diluted common share for the fiscal year just ended increased 46% to $1.17 from $0.80 for the fiscal year ended September 30, 2014.

Timberland’s Board of Directors declared a $0.07 per common share quarterly cash dividend payable on November 30, 2015 to shareholders of record on November 16, 2015. The Company’s Board of Directors also declared a special one-time dividend of $0.05 per share payable on November 30, 2015 to shareholders of record on November 16, 2015.

“The Company recorded solid core earnings during the September quarter which were increased by approximately $0.14 per share from a loan loss reserve recapture,” stated Michael R. Sand, President and CEO. “A significant reduction in non-performing assets this quarter, combined with a net recovery of $982,000 and the release of a $1.29 million impairment within the loan loss reserve, moved the reserve into an overfunded position. As a result, the Company recorded a loan loss reserve recapture of $1.53 million (approximately $1.0 million after tax) for the quarter. The Company continues to increase operating revenues and net loans outstanding and has increased net income to shareholders annually for five consecutive years. The Company’s assets increased to $816 million which represents the first time its fiscal year-end assets have exceeded $800 million. We are pleased with the year over year improvement in the Company’s already solid financial metrics.”

Fiscal Year 2015 Highlights (at or for the period ended September 30, 2015, compared to September 30, 2014, or June 30, 2015):

  • Earnings per diluted common share for fiscal year 2015 increased 46% to $1.17 from $0.80 for fiscal year 2014;
  • Earnings per diluted common share increased 83% to $0.42 from $0.23 for the comparable quarter one year ago and increased 35% from $0.31 per diluted common share for the quarter ended June 30, 2015;
  • Return on average equity was 13.47% for the current quarter and 9.70% for fiscal year 2015;
  • Return on average assets was 1.47% for the current quarter and 1.07% for fiscal year 2015;
  • Non-performing assets decreased 32% year-over-year and 20% from the prior quarter;
  • Total delinquent loans decreased 47% year-over-year and 33% from the prior quarter;
  • Recorded a net loan loss recovery of $982,000 for the current quarter and $1.02 million for fiscal year 2015;
  • Non-interest income increased 12% year-over-year;
  • Total deposits increased 10% year-over-year and 4% from the prior quarter;
  • Net loans increased 7% year-over-year and 2% from the prior quarter;
  • Tangible book value per common share increased to $11.95 at September 30, 2015 from $10.94 at September 30, 2014.

Capital Ratios and Asset Quality

Timberland Bancorp remains well capitalized with a total risk-based capital ratio of 15.16%, a Tier 1 leverage capital ratio of 10.64% and a tangible capital to tangible assets ratio of 10.31% at September 30, 2015.

Timberland recorded a $1.53 million loan loss reserve recapture (which added approximately $0.14 to diluted earnings per share) during the quarter ended September 30, 2015 as asset quality continued to improve. During the fourth fiscal quarter the Bank had a $982,000 net recovery on loans previously charged off. The Bank also had a $1.29 million decrease in the portion of the allowance for loan losses allocated to specific impairments due to the resolution of two significant non-accrual loans. The non-performing assets to total assets ratio improved to 1.84% at September 30, 2015 from 2.36% three months earlier and 2.94% one year ago. The allowance for loan losses was 1.61% of loans receivable at September 30, 2015.

Total delinquent loans (past due 30 days or more) and non-accrual loans decreased 33% to $7.2 million at September 30, 2015, from $10.8 million at June 30, 2015 and decreased 47% from $13.7 million one year ago. Non-accrual loans decreased 34% to $6.0 million at September 30, 2015 from $9.1 million at June 30, 2015 and decreased 45% from $10.9 million at September 30, 2014.

NON-ACCRUAL LOANS September 30, 2015   June 30, 2015   September 30, 2014
($ in thousands) Amount   Quantity   Amount   Quantity   Amount   Quantity
                       
Mortgage Loans:                      
One- to four-family $ 2,368   16   $ 3,141   17    $ 4,376   21
Multi-family   760   1   760   1    —  
Commercial 1,016   2   462   2    1,468   1
Construction   —     157   1    —  
Land   1,558   5   4,200   5    4,564   8
Total mortgage loans    5,702   24   8,720   26   10,408   30
                       
Consumer Loans:                      
Home equity and second mortgage 303   4   374   6    498   6
Other 35   1   36   1    3   1
Total consumer loans 338   5   410   7    501   7
Total loans $ 6,040   29   $  9,130   33   $  10,909   37

Other real estate owned (“OREO”) and other repossessed assets decreased 14% to $7.9 million at September 30, 2015, from $9.1 million at September 30, 2014 and decreased 3% from $8.1 million at June 30, 2015.  At September 30, 2015, the OREO portfolio consisted of 34 individual properties and one other repossessed asset. During the quarter ended September 30, 2015, three OREO properties totaling $606,000 were sold for a net gain of $1,000.

OREO and OTHER
REPOSSESSED ASSETS

September 30, 2015
 
June 30, 2015
 
September 30, 2014
($ in thousands) Amount   Quantity   Amount   Quantity   Amount   Quantity
                       
One- to four-family $ 2,868   11   $ 2,434   8    $ 2,904   14
Multi-family  —         142   1
Commercial 1,568   3   2,041   4    2,209   4
Land 3,351   20   3,521   21    3,837   21
Mobile home 67   1   67   1    —  
Total $ 7,854   35   $  8,063   34   $  9,092   40

Balance Sheet Management

Total assets increased by $26.0 million, or 3%, to $815.8 million at September 30, 2015, from $789.8 million at June 30, 2015. The increase was primarily due to a $16.1 million increase in cash and cash equivalents and a $9.1 million increase in net loans receivable. The increase in total assets was funded primarily by a $24.2 million increase in total deposits.

Liquidity as measured by cash and cash equivalents, CDs held for investment and available for sale investments securities was 19.6% of total liabilities at September 30, 2015, compared to 17.7% at June 30, 2015, and 16.8% one year ago. 

Net loans receivable increased $9.1 million, or 2%, to $607.3 million at September 30, 2015, from $598.2 million at June 30, 2015. The increase was primarily due to an $8.5 million increase in one-to four-family loans, a $1.7 million increase in multi-family loans, a $1.2 million increase in construction and land development loans and a $4.2 million decrease in the undisbursed portion of construction loans in process. These increases to net loans receivable were partially offset by a $2.5 million decrease in commercial business loans, a $2.2 million decrease in commercial mortgage loans, a $1.4 million decrease in land loans and a $925,000 decrease in consumer loans. 

LOAN PORTFOLIO            
  September 30, 2015 June 30, 2015 September 30, 2014
($ in thousands) Amount Percent Amount Percent Amount Percent
             
Mortgage loans:            
One- to four-family $119,715 18% $111,184 17% $98,534 16%
Multi-family 52,322 8 50,587 8 46,206 8
Commercial 291,216 43 293,438 44 294,354 48
Construction and land development 110,920 16 109,678 16 68,479 11
Land 26,140 4 27,495 4 29,589 5
Total mortgage loans 600,313 89 592,382 89 537,162 88
             
Consumer loans:            
Home equity and second mortgage 34,157 5 35,040 5 34,921 6
Other 4,669 1 4,711 1 4,699 1
Total consumer loans 38,826 6 39,751 6 39,620 7
             
Commercial business loans 33,763 5 36,288 5 30,559 5
Total loans 672,902 100% 668,421 100% 607,341 100%
Less:            
Undisbursed portion of construction loans in process (53,457)   (57,674)   (29,416)  
Deferred loan origination fees (2,193)   (2,069)   (1,746)  
Allowance for loan losses (9,924)   (10,467)   (10,427)  
Total loans receivable, net $607,328   $598,211   $565,752  
           
CONSTRUCTION LOAN COMPOSITION          
  September 30, 2015 June 30, 2015 September 30, 2014
    Percent   Percent   Percent
    of Loan   of Loan   of Loan
($ in thousands) Amount Portfolio Amount Portfolio Amount Portfolio
             
Custom and owner / builder $62,954 9% $62,579 9% $59,752 10%
Speculative one- to four-Family 6,668 1 5,205 1 2,577
Commercial real estate 20,728 3 18,924 3 3,310 1
Multi-family (including condominium) 20,570 3 22,970 3 2,840
Land development
Total construction loans $110,920 16% $109,678 16% $68,479 11%

Timberland originated $65.97 million in loans during the quarter ended September 30, 2015, compared to $101.3 million for the preceding quarter and $60.4 million for the comparable quarter one year ago. 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. During the quarter ended September 30, 2015, fixed-rate one- to four-family mortgage loans totaling $16.4 million were sold compared to $16.5 million for the preceding quarter and $10.0 million for the comparable quarter one year ago.

Timberland’s investment securities decreased slightly during the quarter to $9.3 million at September 30, 2015, from $9.4 million at June 30, 2015, primarily due to scheduled amortization.

DEPOSIT BREAKDOWN            
($ in thousands)            
  September 30, 2015 June 30, 2015 September 30, 2014
  Amount Percent Amount Percent Amount Percent
Non-interest bearing $141,388 21% $122,133 19% $106,417 17%
N.O.W. checking 180,628 27 168,773 26 160,748 26
Savings 110,315 16 104,774 16 95,665 16
Money market 84,026 12 94,529 14 88,999 14
Money market – brokered 8,450 1 8,521 1
Certificates of deposit under $100 84,824 12 87,590 13 95,333 16
Certificates of deposit $100 and over 66,085 10 65,202 10 64,762 10
Certificates of deposit – brokered 3,196 1 3,196 1 3,192 1
Total deposits $678,912 100% $654,718 100% $615,116 100%

Total deposits increased $24.2 million, or 4%, to $678.9 million at September 30, 2015, from $654.7 million at June 30, 2015. The increase was primarily due to a $19.3 million increase in non-interest bearing account balances, an $11.9 million increase in N.O.W. checking account balances and a $5.5 million increase in savings account balances.  These increases were partially offset by a $10.6 million decrease in money market account balances and a $1.9 million decrease in certificates of deposit account balances.  

Shareholders’ Equity

Total shareholders’ equity increased $1.90 million to $89.19 million at September 30, 2015, from $87.29 million at June 30, 2015. The increase in shareholders’ equity was primarily due to net income of $2.96 million for the quarter, which was partially offset by share repurchases of $709,000 and dividend payments of $494,000 to shareholders. Book value per share increased to $12.76 and tangible book value per share increased to $11.95 at September 30, 2015.

During the quarter, Timberland repurchased 64,788 shares of its common stock for $709,000 (an average price of $10.94 per share). Timberland had 287,893 shares remaining to be purchased on its existing stock repurchase plan at September 30, 2015.

Operating Results

Operating revenue (net interest income before provision for loan losses, plus non-interest income excluding other than temporary impairment (“OTTI”) charges and gains or losses on sale of investments) increased 2% to $9.70 million for the current quarter from $9.51 million for the preceding quarter and 10% from $8.81 million for the comparable quarter one year ago.  For fiscal year 2015, operating revenue increased 7% to $36.77 million from $34.42 million for fiscal year 2014.

Net interest income increased 1% to $7.03 million for the quarter ended September 30, 2015, from $6.98 million for the preceding quarter and increased 7% from $6.59 million for the comparable quarter one year ago.  Net interest income was higher during the quarter ended September 30, 2015, primarily due to an increased level of average loans and average interest-earning assets.  The net interest margin for the current quarter decreased to 3.76% from 3.88% for the preceding quarter and from 3.86% for the comparable quarter one year ago. The net interest margin for the preceding quarter was higher, in part, due to the collection of $159,000 of non-accrual interest, which increased the net interest margin for the quarter ended June 30, 2015 by approximately nine basis points.  For fiscal year 2015, net interest income increased 5% to $27.28 million from $25.92 million for fiscal year 2014.  Timberland’s net interest margin for year ended September 30, 2015 decreased to 3.80% from 3.84% for the year ended September 30, 2014.

Non-interest income increased 6% to $2.66 million for the quarter ended September 30, 2015, from $2.52 million in the preceding quarter, and increased 21% from $2.21 million for the comparable quarter one year ago. The increase in non-interest income compared to the preceding quarter was primarily due to an $81,000 increase in service charges on deposits and smaller increases in several other categories. For fiscal year 2015 non-interest income increased 12% to $9.52 million from $8.53 million for fiscal year 2014, primarily due to a $597,000 increase in gain on sale of loans and a $228,000 increase in ATM and debit card interchange transaction fees.

Total operating (non-interest) expenses increased 8% to $6.69 million for the fourth fiscal quarter from $6.22 million for the preceding quarter and increased 5% from $6.37 million for the comparable quarter one year ago. The increased expenses for the current quarter compared to the preceding quarter were primarily due to a $128,000 increase in salaries and employee benefits expense and a $108,000 increase in OREO and other repossessed asset expense.   Also impacting the comparison was a non-recurring gain on the sale of excess land during the preceding quarter which reduced total non-interest expenses by $299,000. For fiscal year 2015, total operating expenses were virtually unchanged at $25.84 million compared to $25.80 million for fiscal year 2014. 

The provision for income taxes increased $436,000 to $1.56 million for the quarter ended September 30, 2015, from $1.13 million for the preceding quarter, primarily due to increased income before income taxes.  The effective tax rate was 34.6% for the current quarter compared to 34.3% for the quarter ended June 30, 2015.  For fiscal year 2015, the provision for income taxes increased $1.39 million to $4.19 million from $2.80 million for fiscal year 2014, primarily due to higher income before taxes. The effective tax rate was 33.6% for fiscal year 2015 compared to 32.4% for fiscal year 2014.

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 22 branches (including its main office in Hoquiam).  

Disclaimer

Certain matters discussed in this press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact 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 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, including, but not limited to: 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 and 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; 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 Board of Governors of the Federal Reserve System 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 or 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, 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 the implementation of related rules and regulations; our ability to attract and retain deposits;  increases in premiums for deposit insurance; 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 workforce and potential associated charges; computer systems on which we depend could fail or experience a security breach; our ability to retain key members of our senior management team; costs and effects of litigation, including settlements and judgments; our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we may in the future acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto; 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, 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; 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 undertake no obligation to publicly update or revise any forward-looking statements included in this report 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. We caution readers not to place undue reliance on any forward-looking statements. We do not undertake and specifically disclaim any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. These risks could cause our actual results for fiscal 2016 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 operations and stock price performance.

TIMBERLAND BANCORP INC. AND SUBSIDIARY      
CONSOLIDATED STATEMENTS OF INCOME Three Months Ended
($ in thousands, except per share amounts) Sept. 30, June 30, Sept. 30,
(unaudited) 2015 2015 2014
Interest and dividend income      
Loans receivable $7,780 $7,756 $7,393
Investment securities 70 59 69
Dividends from mutual funds and Federal Home Loan Bank (“FHLB”) stock 10 7 6
Interest bearing deposits in banks 148 125 98
Total interest and dividend income 8,008 7,947 7,566
       
Interest expense      
Deposits 508 492 504
FHLB advances 475 471 474
Total interest expense 983 963 978
Net interest income 7,025 6,984 6,588
       
Recapture of loan losses (1,525)
Net interest income after recapture of loan losses 8,550 6,984 6,588
       
Non-interest income      
OTTI on investment securities, net (8) (4) (19)
Service charges on deposits 980 899 943
Gain on sale of loans, net 512 514 298
Bank owned life insurance (“BOLI”) net earnings 137 133 138
ATM and debit card interchange transaction fees 699 691 658
Other 342 290 189
Total non-interest income, net 2,662 2,523 2,207
       
Non-interest expense      
Salaries and employee benefits 3,324 3,196 3,156
Premises and equipment 817 763 777
Gain on disposition of premises and equipment, net (299)
Advertising 249 169 206
OREO and other repossessed assets expense, net 301 193 215
ATM and debit card processing 292 336 304
Postage and courier 107 104 117
Amortization of core deposit intangible (“CDI”) 29
State and local taxes 135 189 118
Professional fees 223 207 202
FDIC insurance 144 142 157
Other insurance 33 28 37
Loan administration and foreclosure 62 88 79
Data processing and telecommunications 468 449 392
Deposit operations 197 220 190
Other 341 435 394
Total non-interest expense 6,693 6,220 6,373
       
Income before income taxes $4,519 $3,287 $2,422
Provision for income taxes 1,564 1,128 776
Net income 2,955 2,159 1,646
       
Preferred stock dividends
Preferred stock discount accretion
Net income to common shareholders $2,955 $2,159 $1,646
       
Net income per common share:      
Basic $0.43 $0.31 $0.24
Diluted 0.42 0.31 0.23
       
Weighted average common shares outstanding:      
Basic 6,896,941 6,902,067 6,859,457
Diluted 7,069,880 7,071,221 7,033,090
     
     
TIMBERLAND BANCORP INC. AND SUBSIDIARY    
CONSOLIDATED STATEMENTS OF INCOME Year Ended
($ in thousands, except per share amounts) Sept. 30, Sept. 30,
(unaudited) 2015 2014
Interest and dividend income    
Loans receivable $30,397 $29,205
Investment securities 249 259
Dividends from mutual funds and FHLB stock 31 27
Interest bearing deposits in banks 491 366
Total interest and dividend income 31,168 29,857
     
Interest expense    
Deposits 2,004 2,066
FHLB advances 1,886 1,873
Total interest expense 3,890 3,939
Net interest income 27,278 25,918
     
Recapture of loan losses (1,525)
Net interest income after recapture of loan losses 28,803 25,918
     
Non-interest income    
Recoveries (OTTI) on investment securities, net (13) 59
Gain (loss) on sale of investment securities, net 45 (32)
Service charges on deposits 3,615 3,738
Gain on sale of loans, net 1,610 1,013
BOLI net earnings 538 530
ATM and debit card interchange transaction fees 2,664 2,426
Other 1,063 796
Total non-interest income, net 9,522 8,530
     
Non-interest expense    
Salaries and employee benefits 13,200 13,294
Premises and equipment 3,056 2,878
Gain on disposition of premises and equipment, net (299) (7)
Advertising 779 742
OREO and other repossessed assets expense, net 918 1,010
ATM and debit card processing 1,221 1,096
Postage and courier 429 446
Amortization of CDI 3 116
State and local taxes 561 479
Professional fees 829 792
FDIC insurance 593 636
Other insurance 136 150
Loan administration and foreclosure 269 456
Data processing and telecommunications 1,767 1,450
Deposit operations 812 759
Other 1,567 1,501
Total non-interest expense 25,841 25,798
     
Income before income taxes $12,484 $8,650
Provision for income taxes 4,192 2,800
Net income 8,292 5,850
     
Preferred stock dividends (136)
Preferred stock discount accretion (70)
Net income to common shareholders $8,292 $5,644
     
Net income per common share:    
Basic $1.20 $0.82
Diluted 1.17 0.80
     
Weighted average common shares outstanding:    
Basic 6,897,270 6,856,730
Diluted 7,069,088 7,019,676
       
       
TIMBERLAND BANCORP INC. AND SUBSIDIARY      
CONSOLIDATED BALANCE SHEETS      
($ in thousands, except per share amounts) (unaudited) Sept. 30, June 30, Sept. 30,
  2015 2015 2014
Assets      
Cash and due from financial institutions $14,014 $13,800 $11,818
Interest-bearing deposits in banks 78,275 62,373 60,536
Total cash and cash equivalents 92,289 76,173 72,354
       
Certificates of deposit (“CDs”) held for investment, at cost 48,611 47,053 35,845
Investment securities:      
Held to maturity, at amortized cost 7,913 8,018 5,298
Available for sale, at fair value 1,392 1,401 2,857
FHLB stock 2,699 2,699 5,246
       
Loans receivable 614,201 604,843 575,280
Loans held for sale 3,051 3,835 899
Less: Allowance for loan losses (9,924) (10,467) (10,427)
Net loans receivable 607,328 598,211 565,752
       
Premises and equipment, net 16,854 17,083 17,679
OREO and other repossessed assets, net 7,854 8,063 9,092
BOLI 18,171 18,034 17,632
Accrued interest receivable 2,170 2,132 1,910
Goodwill 5,650 5,650 5,650
Core deposit intangible 3
Mortgage servicing rights, net 1,478 1,469 1,684
Other assets 3,406 3,801 4,563
Total assets $815,815 $789,787 $745,565
       
Liabilities and shareholders’ equity      
Deposits: Non-interest-bearing demand $141,388 $122,133 $106,417
Deposits: Interest-bearing 537,524 532,585 508,699
Total deposits 678,912 654,718 615,116
       
FHLB advances 45,000 45,000 45,000
Other liabilities and accrued expenses 2,716 2,779 2,671
Total liabilities 726,628 702,497 662,787
       
Shareholders’ equity      
Common stock, $.01 par value; 50,000,000 shares authorized;      
 7,047,336 shares issued and outstanding – September 30, 2014      
 7,053,636 shares issued and outstanding – June 30, 2015       
 6,988,848 shares issued and outstanding – September 30, 2015  10,293 10,948 10,773
Unearned shares- Employee Stock Ownership Plan (926) (992) (1,190)
Retained earnings 80,133 77,673 73,534
Accumulated other comprehensive loss (313) (339) (339)
Total shareholders’ equity 89,187 87,290 82,778
Total liabilities and shareholders’ equity $815,815 $789,787 $745,565
   
   
KEY FINANCIAL RATIOS AND DATA Three Months Ended
($ in thousands, except per share amounts) (unaudited) Sept. 30, June 30, Sept. 30,
  2015 2015 2014
       
PERFORMANCE RATIOS:      
Return on average assets (a) 1.47% 1.11% 0.88%
Return on average equity (a) 13.47% 10.03% 8.04%
Net interest margin (a) 3.76% 3.88% 3.86%
Efficiency ratio 69.09% 65.43% 72.46%
       
       
  Year Ended
  Sept. 30,   Sept. 30,
  2015   2014
PERFORMANCE RATIOS:      
Return on average assets 1.07%   0.79%
Return on average equity 9.70%   7.08%
Net interest margin 3.80%   3.84%
Efficiency ratio 70.22%   74.89%
       
  Sept. 30, June 30, Sept. 30,
  2015 2015 2014
ASSET QUALITY RATIOS AND DATA:      
Non-accrual loans $6,040 $9,130 $10,909
Loans past due 90 days and still accruing 151 488 812
Non-performing investment securities 932 979 1,101
OREO and other repossessed assets 7,854 8,063 9,092
Total non-performing assets (b) $14,977 $18,660 $21,914
       
       
Non-performing assets to total assets (b) 1.84% 2.36% 2.94%
Net charge-offs (recoveries) during quarter $(982) $(85) $136
Allowance for loan losses to non-accrual loans 164% 115% 96%
Allowance for loan losses to loans receivable (c) 1.61% 1.72% 1.81%
Troubled debt restructured loans on accrual status (d) $12,484 $12,392 $16,804
       
       
CAPITAL RATIOS:      
Tier 1 leverage capital 10.64% 10.77% 10.59%
Tier 1 risk-based capital 13.91% 13.76% 13.68%
Total risk-based capital 15.16% 15.01% 14.94%
Tangible capital to tangible assets (e) 10.31% 10.41% 10.42%
       
       
BOOK VALUES:      
Book value per common share $12.76 $12.38 $11.75
Tangible book value per common share (e) 11.95 11.57 10.94
       
__________________________________________________  
(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) Includes loans held for sale and is before the allowance for loan losses.
(d) Does not include troubled debt restructured loans totaling $1,233, $1,356 and $2,284 reported as non-accrual loans at September 30, 2015, June 30, 2015 and September 30, 2014, respectively.
(e) Calculation subtracts goodwill and core deposit intangible from the equity component and from assets.
 
AVERAGE BALANCES, YIELDS AND RATES – QUARTERLY
($ in thousands)
(unaudited)
             
  For the three months ended
  September 30, 2015 June 30, 2015 September 30, 2014
  Average
Balance
Average
Yield/Rate
Average
Balance
Average
Yield/Rate
Average
Balance
Average
Yield/Rate
Assets            
Loans  $ 612,383 5.08%  $ 600,740 5.16%  $ 570,995 5.18%
Investment securities  12,062 2.63%  12,276 2.15%  13,548 2.21%
Other interest-bearing assets  123,129 0.48%  107,295 0.47%  97,784 0.40%
Total interest-bearing assets  747,574 4.28%  720,311 4.41%  682,327 4.44%
Other assets  57,808    57,130    63,390  
Total assets  $ 805,382    $ 777,441    $ 745,717  
             
Liabilities and Shareholders’ Equity            
N.O.W. checking accounts  $ 171,764 0.27%  $ 167,003 0.27%  $ 158,604 0.27%
Money market accounts  101,204 0.31%  95,341 0.30%  93,094 0.26%
Savings accounts  107,250 0.05%  104,306 0.05%  95,013 0.05%
Certificates of deposit accounts  154,856 0.76%  158,990 0.74%  163,465 0.79%
Total interest-bearing deposits  535,074 0.38%  525,640 0.38%  510,176 0.39%
FHLB Advances  45,000 4.19%  45,000 4.20%  45,000 4.18%
Total interest-bearing liabilities  580,074 0.67%  570,640 0.68%  555,176 0.70%
             
Non-interest-bearing demand deposits  133,657    117,488    105,031  
Other liabilities  3,883    3,220    3,627  
Shareholders’ equity  87,768    86,093    81,883  
Total liabilities and shareholders’ equity  $ 805,382    $ 777,441    $ 745,717  
             
Net interest income and spread   3.61%   3.74%   3.74%
Net interest margin (1)   3.76%   3.88%   3.86%
Average interest-bearing assets to average interest-bearing liabilities 128.88%   126.23%   122.90%  
             
(1) Net interest margin = annualized net interest income / Average interest-bearing assets
 
AVERAGE BALANCES, YIELDS AND RATES – YEAR TO DATE
($ in thousands)
(unaudited)
         
  Year Ended
  September 30, 2015 September 30, 2014
  Average
Balance
Average
Yield/Rate
Average
Balance
Average
Yield/Rate
Assets        
Loans  $ 596,750 4.98%  $ 567,251 5.14%
Investment securities  12,360 2.27%  13,114 2.19%
Other interest-bearing assets  108,773 0.45%  95,110 0.38%
Total interest-bearing assets  717,883 4.34%  675,475 4.42%
Other assets  58,270    62,432  
Total assets  $ 776,153    $ 737,907  
         
Liabilities and Shareholders’ Equity        
N.O.W. checking accounts  $ 165,895 0.27%  $ 156,954 0.28%
Money market accounts  94,881 0.29%  94,894 0.26%
Savings accounts  102,303 0.05%  92,606 0.05%
Certificates of deposit accounts  159,815 0.77%  164,014 0.81%
Total interest-bearing deposits  522,894 0.39%  508,468 0.41%
FHLB Advances  45,000 4.19%  45,000 4.16%
Total interest-bearing liabilities  567,894 0.68%  553,468 0.71%
         
Non-interest-bearing demand deposits  119,599    98,454  
Other liabilities  3,208    3,367  
Shareholders’ equity  85,452    82,618  
Total liabilities and shareholders’ equity  $ 776,153    $ 737,907  
         
Net interest income and spread   3.66%   3.71%
Net interest margin (1)   3.80%   3.84%
Average interest-bearing assets to average interest-bearing liabilities 126.41%   122.04%  
         
(1) Net interest margin = annualized net interest income / Average interest-bearing assets
         
CONTACT: Michael R. Sand,
         President & CEO
         Dean J. Brydon, CFO
         (360) 533-4747
         www.timberlandbank.com

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