HOQUIAM, Wash., Jan. 23, 2017 (GLOBE NEWSWIRE) -- Timberland Bancorp, Inc. (NASDAQ:TSBK) (“Timberland” or “the Company”) today reported net income of $3.15 million, or $0.43 per diluted common share, for its first fiscal quarter ended December 31, 2016. This compares to net income of $2.53 million, or $0.36 per diluted common share, for the quarter ended December 31, 2015, and net income of $2.70 million, or $0.38 per diluted common share for the preceding quarter ended September 30, 2016.
Timberland’s Board of Directors also announced a 22% increase in the quarterly cash dividend to shareholders to $0.11 per common share, payable on February 27, 2017, to shareholders of record on February 13, 2017.
“We are pleased with the ongoing strength of the Company’s financial metrics, as we continue to grow the balance sheet toward $1 billion in assets,” stated Michael R. Sand, President and CEO. “The December quarter’s net income and earnings per share were both record operating results for the Company and have provided a strong first fiscal quarter for us to build upon during the remainder of our current fiscal year. We expect rising interest rates to have a positive impact on the Company’s earnings this year as will the scheduled maturities of two high cost Federal Home Loan Bank borrowings this summer.”
First Fiscal Quarter 2017 Earnings and Balance Sheet Highlights (at or for the period ended December 31, 2016, compared to September 30, 2016, or December 31, 2015):
Earnings Highlights:
- Net income increased 24% to $3.15 million from $2.53 million for the comparable quarter one year ago;
- Earnings per diluted common share increased 19% to $0.43 from $0.36 for the comparable quarter one year ago;
- Return on average equity and return on average assets for the current quarter increased to 12.87% and 1.39%, respectively;
- Net interest margin improved to 3.91% from 3.77% for the preceding quarter;
- Operating revenue increased 13% from the comparable quarter one year ago; and
- Non-interest income increased 28% from the comparable quarter one year ago.
Balance Sheet Highlights:
- Total assets increased 10% year-over-year and 4% from the prior quarter;
- Net loans receivable increased 7% year-over-year and 1% from the prior quarter;
- Total deposits increased 13% year-over-year and 4% from the prior quarter;
- Other real estate owned (“OREO”) and other repossessed assets decreased 58% year-over-year and 21% from the prior quarter;
- Non-performing assets decreased 53% year-over-year and 18% from the prior quarter to 0.70% of total assets; and
- Book and tangible book values per common share increased to $14.32 and $13.51, respectively, at December 31, 2016.
Operating Results
Operating revenue (net interest income before provision for loan losses, plus non-interest income excluding other than temporary impairment (“OTTI”) charges on investment securities) increased 13% to $11.53 million for the current quarter from $10.23 million for the comparable quarter one year ago and increased 4% from $11.06 million for the preceding quarter.
Net interest income for the current quarter increased 8% to $8.31 million from $7.71 million for the comparable quarter one year ago and increased 6% from $7.81 million for the preceding quarter. The increased net interest income was primarily due to an increase in the average total interest-bearing assets and a reduction in the Federal Home Loan Bank (“FHLB”) borrowing expense during the quarter. Average total interest-bearing assets for the current quarter increased 10% to $849.73 million from $771.16 million for the comparable quarter one year ago and increased 3% from $828.00 million for the preceding quarter. The reduced interest expense for FHLB borrowings was primarily due to the prepayment of a $15.00 million FHLB borrowing on September 30, 2016, which reduced interest expense by approximately $54,000 per month during the quarter. During the preceding quarter, net interest income was reduced by a $138,000 pre-payment penalty incurred in connection with the prepayment of the $15.00 million FHLB borrowing. Two additional high-cost $15.00 million FHLB borrowings mature near the end of Timberland’s 2017 fiscal year.
The net interest margin for the current quarter was 3.91% compared to 3.77% for the preceding quarter and 4.00% for the comparable quarter one year ago. The net interest margin for the current quarter was increased by approximately one basis point due to the collection of $21,000 of non-accrual interest. The net interest margin for the comparable quarter one year ago was increased by approximately 25 basis points due to the collection of $475,000 of non-accrual interest. The net interest margin for the preceding quarter was reduced by approximately five basis points (net), due to the $138,000 pre-payment penalty on the FHLB borrowing, which was partially offset by the collection of $38,000 of non-accrual interest.
Non-interest income increased 3% to $3.22 million for the quarter ended December 31, 2016, from $3.11 million for the preceding quarter, and increased 28% from $2.52 million for the comparable quarter one year ago. The increase in non-interest income for the current quarter compared to the preceding quarter was primarily due to an increase in gain on sale of loans, a decrease in OTTI charges on investment securities, and smaller increases in several other categories. These improvements to non-interest income were partially offset by a $273,000 decrease in ATM and debit card interchange transaction fee income. The increase in gain on sale of loans was primarily due to an increase in the dollar volume of fixed-rate one- to four-family loans sold during the current quarter. The decrease in ATM and debit card interchange transaction fees was primarily due to a one-time $262,000 incentive payment received from Timberland’s debit card issuer during the preceding quarter.
Total operating expenses for the current quarter decreased 2% to $6.81 million from $6.96 million for the preceding quarter and increased 5% from $6.48 million for the comparable quarter one year ago. The decreased expenses for the current quarter compared to the preceding quarter were primarily due to decreases in the premises and equipment, ATM and debit card processing and OREO and other repossessed assets categories. These decreases were partially offset by an increase in salaries and employee benefits expense. The efficiency ratio for the current quarter improved to 59.07% from 63.77% for the preceding quarter and 63.35% for the comparable quarter one year ago.
The provision for income taxes for the quarter ended December 31, 2016, increased to $1.57 million from $1.26 million for the preceding quarter, primarily due to higher pre-tax income. The effective tax rate was 33.3% for the current quarter compared to 31.7% for the quarter ended September 30, 2016.
Balance Sheet Management
Total assets increased 4% to $923.75 million at December 31, 2016 from $891.39 million at September 30, 2016. The increase was primarily due to a $26.53 million increase in cash and cash equivalents and a $5.99 million increase in net loans receivable. These increases were primarily funded by a $28.44 million increase in deposits during the quarter.
Liquidity, as measured by cash and cash equivalents, CDs held for investment and available for sale investments securities, was 23.1% of total liabilities at December 31, 2016, compared to 20.6% at September 30, 2016, and 19.5% one year ago.
Net loans receivable increased $5.99 million, or 1%, to $669.14 million at December 31, 2016, from $663.15 million at September 30, 2016. The increase was primarily due to a $10.97 million increase in commercial real estate loans, a $9.50 million increase in multi-family construction loans, a $3.24 million increase in custom and owner/builder one- to four-family construction loans, and a $925,000 increase in one- to four-family mortgage loans. These increases were partially offset by a $10.24 million decrease in multi-family mortgage loans, a $5.53 million increase in the amount of undisbursed construction loans in process, a $1.97 million decrease in speculative one- to four-family construction loans, and a $1.74 million decrease in consumer loans.
LOAN PORTFOLIO
| ($ in thousands) | December 31, 2016 | September 30, 2016 | December 31, 2015 | |||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | |||||||||||||||
| Mortgage loans: | ||||||||||||||||||||
| One- to four-family (a) | $ | 119,485 | 16 | % | $ | 118,560 | 16 | % | $ | 117,203 | 17 | % | ||||||||
| Multi-family | 52,062 | 7 | 62,303 | 9 | 47,980 | 7 | ||||||||||||||
| Commercial | 323,496 | 44 | 312,525 | 43 | 295,595 | 43 | ||||||||||||||
| Construction - custom and owner/builder | 96,292 | 13 | 93,049 | 13 | 67,861 | 10 | ||||||||||||||
| Construction - speculative one-to four-family | 6,133 | 1 | 8,106 | 1 | 6,199 | 1 | ||||||||||||||
| Construction - commercial | 8,627 | 1 | 9,365 | 1 | 22,213 | 3 | ||||||||||||||
| Construction - multi-family | 22,092 | 3 | 12,590 | 2 | 20,570 | 3 | ||||||||||||||
| Land | 22,359 | 3 | 21,627 | 3 | 25,258 | 4 | ||||||||||||||
| Total mortgage loans | 650,546 | 88 | 638,125 | 88 | 602,879 | 88 | ||||||||||||||
| Consumer loans: | ||||||||||||||||||||
| Home equity and second mortgage | 37,602 | 5 | 39,727 | 5 | 36,057 | 5 | ||||||||||||||
| Other | 4,523 | 1 | 4,139 | 1 | 4,387 | 1 | ||||||||||||||
| Total consumer loans | 42,125 | 6 | 43,866 | 6 | 40,444 | 6 | ||||||||||||||
| Commercial business loans | 42,657 | 6 | 41,837 | 6 | 40,886 | 6 | ||||||||||||||
| Total loans | 735,328 | 100 | % | 723,828 | 100 | % | 684,209 | 100 | % | |||||||||||
| Less: | ||||||||||||||||||||
| Undisbursed portion of construction loans in process | (54,161 | ) | (48,627 | ) | (47,596 | ) | ||||||||||||||
| Deferred loan origination fees | (2,184 | ) | (2,229 | ) | (2,183 | ) | ||||||||||||||
| Allowance for loan losses | (9,843 | ) | (9,826 | ) | (9,889 | ) | ||||||||||||||
| Total loans receivable, net | $ | 669,140 | $ | 663,146 | $ | 624,541 | ||||||||||||||
_______________________
(a) Does not include one- to four-family loans held for sale totaling $2,008, $3,604 and $1,304 at December 31, 2016, September 30, 2016, and December 31, 2015, respectively.
Timberland originated $90.15 million in loans during the quarter ended December 31, 2016, compared to $53.76 million for the comparable quarter one year ago and $69.71 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 (on a much smaller volume) sells the guaranteed portion of U.S. Small Business Administration (“SBA”) loans. During the first quarter of fiscal 2017, fixed-rate one- to four-family mortgage loans and SBA loans totaling $24.20 million were sold compared to $12.62 million for the comparable quarter one year ago and $17.83 million for the preceding quarter.
Timberland’s investment securities decreased slightly during the quarter to $8.71 million at December 31, 2016, from $8.85 million at September 30, 2016, primarily due to scheduled amortization.
Premises and equipment increased by $1.66 million, or 10%, during the current quarter to $17.82 million at December 31, 2016, from $16.16 million at September 30, 2016. The increase was primarily a result of Timberland purchasing the building that it had been leasing for its Gig Harbor branch office for $1.84 million in December 2016.
| DEPOSIT BREAKDOWN ($ in thousands) | |||||||||||||||||||
| December 31, 2016 | September 30, 2016 | December 31, 2015 | |||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||
| Non-interest bearing demand | $ | 176,382 | 22 | % | $ | 172,283 | 23 | % | $ | 142,279 | 20 | % | |||||||
| NOW checking | 207,415 | 26 | 203,812 | 27 | 186,003 | 27 | |||||||||||||
| Savings | 131,124 | 17 | 123,474 | 16 | 110,475 | 16 | |||||||||||||
| Money market | 122,026 | 15 | 107,083 | 14 | 99,061 | 14 | |||||||||||||
| Money market – brokered | 6,912 | 1 | 6,908 | 1 | 7,153 | 1 | |||||||||||||
| Certificates of deposit under $100 | 76,951 | 10 | 78,284 | 10 | 83,618 | 12 | |||||||||||||
| Certificates of deposit $100 and over | 65,956 | 9 | 66,485 | 9 | 65,984 | 9 | |||||||||||||
| Certificates of deposit – brokered | 3,209 | -- | 3,205 | -- | 3,197 | 1 | |||||||||||||
| Total deposits | $ | 789,975 | 100 | % | $ | 761,534 | 100 | % | $ | 697,770 | 100 | % | |||||||
Total deposits increased $28.44 million, or 4%, during the current quarter to $789.98 million at December 31, 2016, from $761.53 million at September 30, 2016. The current quarter’s increase was primarily due to a $14.95 million increase in money market account balances, a $7.65 million increase in savings account balances, a $4.10 million increase in non-interest bearing demand account balances and a $3.60 million increase in negotiable order of withdrawal (“NOW”) checking account balances. These increases were partially offset by a $1.86 million decrease in certificates of deposit account balances.
Shareholders’ Equity
Total shareholders’ equity increased $2.80 million to $99.63 million at December 31, 2016, from $96.83 million at September 30, 2016. The increase in shareholders’ equity was primarily due to net income of $3.15 million for the quarter, which was partially offset by dividend payments of $625,000 to shareholders. For the quarter ended December 31, 2016, book value per share increased $0.37 to $14.32 and tangible book value per share increased $0.38 to $13.51. Timberland did not repurchase shares of its common stock during the quarter and, at December 31, 2016, had 221,893 shares authorized to be purchased in accordance with the terms of its existing stock repurchase plan.
Capital Ratios and Asset Quality
Timberland remains well capitalized with a total risk-based capital ratio of 16.39% and a Tier 1 leverage capital ratio of 10.60%.
There was no provision for loan losses made for the quarters ended December 31, 2016, September 30, 2016, and December 31, 2015. Timberland had a net recovery of $17,000 for the current quarter compared to net charge-offs of $15,000 for the preceding quarter and net charge-offs of $35,000 for the comparable quarter one year ago. The non-performing assets to total assets ratio improved to 0.70% at December 31, 2016, from 0.88% three months earlier and 1.63% one year ago. The allowance for loan losses was 1.45% of loans receivable at December 31, 2016.
Total delinquent loans (past due 30 days or more) and non-accrual loans decreased 25% to $4.06 million at December 31, 2016, from $5.48 million one year ago and increased 17% from $3.47 million at September 30, 2016. Non-accrual loans decreased 51% to $2.36 million at December 31, 2016, from $4.83 million one year ago and decreased 18% from $2.87 million at September 30, 2016.
| NON-ACCRUAL LOANS | December 31, 2016 | September 30, 2016 | December 31, 2015 | |||||||||||
| ($ in thousands) | Amount | Quantity | Amount | Quantity | Amount | Quantity | ||||||||
| Mortgage loans: | ||||||||||||||
| One- to four-family | $ | 846 | 7 | $ | 914 | 7 | $ | 2,694 | 17 | |||||
| Commercial | -- | -- | 612 | 1 | 1,184 | 3 | ||||||||
| Construction | 367 | 1 | 367 | 1 | -- | -- | ||||||||
| Land | 735 | 5 | 548 | 5 | 546 | 4 | ||||||||
| Total mortgage loans | 1,948 | 13 | 2,441 | 14 | 4,424 | 24 | ||||||||
| Consumer loans: | ||||||||||||||
| Home equity and second mortgage | 387 | 5 | 402 | 6 | 300 | 4 | ||||||||
| Other | 29 | 1 | 30 | 1 | 34 | 1 | ||||||||
| Total consumer loans | 416 | 6 | 432 | 7 | 334 | 5 | ||||||||
| Commercial business loans | -- | -- | -- | -- | 73 | 1 | ||||||||
| Total loans | $ | 2,364 | 19 | $ | 2,873 | 21 | $ | 4,831 | 30 | |||||
OREO and other repossessed assets decreased 58% to $3.25 million at December 31, 2016, from $7.67 million at December 31, 2015, and decreased 21% from $4.12 million at September 30, 2016. At December 31, 2016, the OREO and other repossessed asset portfolio consisted of 19 individual real estate properties and one mobile home. During the quarter ended December 31, 2016, four OREO properties totaling $893,000 were sold for a net gain of $3,000.
| OREO and OTHER REPOSSESSED ASSETS | December 31, 2016 | September 30, 2016 | December 31, 2015 | |||||||||||
| ($ in thousands) | Amount | Quantity | Amount | Quantity | Amount | Quantity | ||||||||
| One- to four-family | $ | 456 | 3 | $ | 1,071 | 5 | $ | 2,763 | 10 | |||||
| Commercial | 636 | 3 | 648 | 3 | 1,449 | 3 | ||||||||
| Land | 2,095 | 13 | 2,331 | 14 | 3,388 | 18 | ||||||||
| Mobile home | 67 | 1 | 67 | 1 | 67 | 1 | ||||||||
| Total | $ | 3,254 | 20 | $ | 4,117 | 23 | $ | 7,667 | 32 | |||||
Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles (“GAAP”), this press release contains certain non-GAAP financial measures. Timberland believes that certain non-GAAP financial measures provide investors with information useful in understanding the Company’s financial performance; however, readers of this report are urged to review these non-GAAP financial measures in conjunction with GAAP results as reported.
Financial measures that exclude intangible assets are non-GAAP measures. To provide investors with a broader understanding of capital adequacy, Timberland provides non-GAAP financial measures for tangible common equity, along with the GAAP measure. Tangible common equity is calculated as shareholders’ equity less goodwill. In addition, tangible assets are total assets less goodwill.
The following table provides a reconciliation of ending shareholders’ equity (GAAP) to ending tangible shareholders’ equity (non-GAAP), and ending total assets (GAAP) to ending tangible assets (non-GAAP).
| ($ in thousands) | December 31, 2016 | September 30, 2016 | December 31, 2015 | |||||||||
| Shareholders’ equity | $ | 99,634 | $ | 96,834 | $ | 91,051 | ||||||
| Less goodwill | (5,650 | ) | (5,650 | ) | (5,650 | ) | ||||||
| Tangible common equity | $ | 93,984 | $ | 91,184 | $ | 85,401 | ||||||
| Total assets | $ | 923,751 | $ | 891,388 | $ | 837,379 | ||||||
| Less goodwill | (5,650 | ) | (5,650 | ) | (5,650 | ) | ||||||
| Tangible assets | $ | 918,101 | $ | 885,738 | $ | 831,729 | ||||||
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 2017 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) | Dec. 31, | Sept. 30, | Dec. 31, | ||||||||
| (unaudited) | 2016 | 2016 | 2015 | ||||||||
| Interest and dividend income | |||||||||||
| Loans receivable | $ | 8,788 | $ | 8,588 | $ | 8,429 | |||||
| Investment securities | 70 | 74 | 69 | ||||||||
| Dividends from mutual funds and FHLB stock | 24 | 23 | 22 | ||||||||
| Interest bearing deposits in banks | 281 | 253 | 171 | ||||||||
| Total interest and dividend income | 9,163 | 8,938 | 8,691 | ||||||||
| Interest expense | |||||||||||
| Deposits | 543 | 521 | 504 | ||||||||
| FHLB borrowings | 307 | 611 | 477 | ||||||||
| Total interest expense | 850 | 1,132 | 981 | ||||||||
| Net interest income | 8,313 | 7,806 | 7,710 | ||||||||
| Provision for loan losses | -- | -- | -- | ||||||||
| Net interest income after provision for loan losses | 8,313 | 7,806 | 7,710 | ||||||||
| Non-interest income | |||||||||||
| OTTI on investment securities, net | -- | (140 | ) | -- | |||||||
| Service charges on deposits | 1,105 | 1,071 | 972 | ||||||||
| ATM and debit card interchange transaction fees | 800 | 1,073 | 700 | ||||||||
| Gain on sale of loans, net | 689 | 551 | 394 | ||||||||
| Bank owned life insurance (“BOLI”) net earnings | 137 | 141 | 136 | ||||||||
| Servicing income on loans sold | 97 | 86 | 65 | ||||||||
| Other | 388 | 327 | 251 | ||||||||
| Total non-interest income, net | 3,216 | 3,109 | 2,518 | ||||||||
| Non-interest expense | |||||||||||
| Salaries and employee benefits | 3,680 | 3,589 | 3,471 | ||||||||
| Premises and equipment | 755 | 831 | 760 | ||||||||
| Advertising | 162 | 163 | 205 | ||||||||
| OREO and other repossessed assets, net | 30 | 101 | 244 | ||||||||
| ATM and debit card processing | 311 | 387 | 322 | ||||||||
| Postage and courier | 95 | 104 | 100 | ||||||||
| State and local taxes | 155 | 161 | 132 | ||||||||
| Professional fees | 201 | 208 | 130 | ||||||||
| FDIC insurance | 113 | 114 | 107 | ||||||||
| Other insurance | 33 | 33 | 32 | ||||||||
| Loan administration and foreclosure | 94 | 106 | 29 | ||||||||
| Data processing and telecommunications | 450 | 502 | 450 | ||||||||
| Deposit operations | 309 | 274 | 172 | ||||||||
| Other | 422 | 388 | 325 | ||||||||
| Total non-interest expense | 6,810 | 6,961 | 6,479 | ||||||||
| Three Months Ended | |||||||||||
| Dec. 31, | Sept. 30, | Dec. 31, | |||||||||
| 2016 | 2016 | 2015 | |||||||||
| Income before income taxes | $ | 4,719 | $ | 3,954 | $ | 3,749 | |||||
| Provision for income taxes | 1,572 | 1,255 | 1,221 | ||||||||
| Net income | $ | 3,147 | $ | 2,699 | $ | 2,528 | |||||
| Net income per common share: | |||||||||||
| Basic | $ | 0.46 | $ | 0.40 | $ | 0.37 | |||||
| Diluted | 0.43 | 0.38 | 0.36 | ||||||||
| Weighted average common shares outstanding: | |||||||||||
| Basic | 6,862,749 | 6,831,419 | 6,869,726 | ||||||||
| Diluted | 7,235,515 | 7,146,115 | 7,083,864 | ||||||||
| TIMBERLAND BANCORP INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS | |||||||||||||
| ($ in thousands, except per share amounts) (unaudited) | Dec. 31, | Sept. 30, | Dec. 31, | ||||||||||
| 2016 | 2016 | 2015 | |||||||||||
| Assets | |||||||||||||
| Cash and due from financial institutions | $ | 16,598 | $ | 16,686 | $ | 12,481 | |||||||
| Interest-bearing deposits in banks | 118,872 | 92,255 | 81,119 | ||||||||||
| Total cash and cash equivalents | 135,470 | 108,941 | 93,600 | ||||||||||
| Certificates of deposit (“CDs”) held for investment, at cost | 53,432 | 53,000 | 50,865 | ||||||||||
| Investment securities: | |||||||||||||
| Held to maturity, at amortized cost | 7,418 | 7,511 | 7,824 | ||||||||||
| Available for sale, at fair value | 1,288 | 1,342 | 1,362 | ||||||||||
| FHLB stock | 2,204 | 2,204 | 2,699 | ||||||||||
| Loans held for sale | 2,008 | 3,604 | 1,304 | ||||||||||
| Loans receivable | 678,983 | 672,972 | 634,430 | ||||||||||
| Less: Allowance for loan losses | (9,843 | ) | (9,826 | ) | (9,889 | ) | |||||||
| Net loans receivable | 669,140 | 663,146 | 624,541 | ||||||||||
| Premises and equipment, net | 17,816 | 16,159 | 16,589 | ||||||||||
| OREO and other repossessed assets, net | 3,254 | 4,117 | 7,667 | ||||||||||
| BOLI | 18,858 | 18,721 | 18,306 | ||||||||||
| Accrued interest receivable | 2,443 | 2,348 | 2,234 | ||||||||||
| Goodwill | 5,650 | 5,650 | 5,650 | ||||||||||
| Mortgage servicing rights, net | 1,706 | 1,573 | 1,475 | ||||||||||
| Other assets | 3,064 | 3,072 | 3,263 | ||||||||||
| Total assets | $ | 923,751 | $ | 891,388 | $ | 837,379 | |||||||
| Liabilities and shareholders’ equity | |||||||||||||
| Deposits: Non-interest-bearing demand | $ | 176,382 | $ | 172,283 | $ | 142,279 | |||||||
| Deposits: Interest-bearing | 613,593 | 589,251 | 555,491 | ||||||||||
| Total deposits | 789,975 | 761,534 | 697,770 | ||||||||||
| FHLB borrowings | 30,000 | 30,000 | 45,000 | ||||||||||
| Other liabilities and accrued expenses | 4,142 | 3,020 | 3,558 | ||||||||||
| Total liabilities | 824,117 | 794,554 | 746,328 | ||||||||||
| Shareholders’ equity | |||||||||||||
| Common stock, $.01 par value; 50,000,000 shares authorized; | |||||||||||||
| 6,994,148 shares issued and outstanding – December 31, 2015 | |||||||||||||
| 6,943,868 shares issued and outstanding – September 30, 2016 | |||||||||||||
| 6,956,568 shares issued and outstanding – December 31, 2016 | 10,188 | 9,961 | 10,402 | ||||||||||
| Unearned shares issued to Employee Stock Ownership Plan (“ESOP”) | (595 | ) | (661 | ) | (859 | ) | |||||||
| Retained earnings | 90,230 | 87,709 | 81,823 | ||||||||||
| Accumulated other comprehensive loss | (189 | ) | (175 | ) | (315 | ) | |||||||
| Total shareholders’ equity | 99,634 | 96,834 | 91,051 | ||||||||||
| Total liabilities and shareholders’ equity | $ | 923,751 | $ | 891,388 | $ | 837,379 | |||||||
| KEY FINANCIAL RATIOS AND DATA | Three Months Ended | |||||||||||
| ($ in thousands, except per share amounts) (unaudited) | Dec. 31, | Sept. 30, | Dec. 31, | |||||||||
| 2016 | 2016 | 2015 | ||||||||||
| PERFORMANCE RATIOS: | ||||||||||||
| Return on average assets (a) | 1.39 | % | 1.22 | % | 1.22 | % | ||||||
| Return on average equity (a) | 12.87 | % | 11.34 | % | 11.26 | % | ||||||
| Net interest margin (a) | 3.91 | % | 3.77 | % | 4.00 | % | ||||||
| Efficiency ratio | 59.07 | % | 63.77 | % | 63.35 | % | ||||||
| Dec. 31, | June 30, | Dec. 31, | ||||||||||
| 2016 | 2016 | 2015 | ||||||||||
| ASSET QUALITY RATIOS AND DATA: | ||||||||||||
| Non-accrual loans | $ | 2,364 | $ | 2,873 | $ | 4,831 | ||||||
| Loans past due 90 days and still accruing | 135 | 135 | 285 | |||||||||
| Non-performing investment securities | 681 | 734 | 891 | |||||||||
| OREO and other repossessed assets | 3,254 | 4,117 | 7,667 | |||||||||
| Total non-performing assets (b) | $ | 6,434 | $ | 7,859 | $ | 13,674 | ||||||
| Non-performing assets to total assets (b) | 0.70 | % | 0.88 | % | 1.63 | % | ||||||
| Net charge-offs (recoveries) during quarter | $ | (17 | ) | $ | 15 | $ | 35 | |||||
| Allowance for loan losses to non-accrual loans | 416 | % | 342 | % | 205 | % | ||||||
| Allowance for loan losses to loans receivable (c) | 1.45 | % | 1.46 | % | 1.56 | % | ||||||
| Troubled debt restructured loans on accrual status (d) | $ | 7,579 | $ | 7,629 | $ | 7,971 | ||||||
| CAPITAL RATIOS: | ||||||||||||
| Tier 1 leverage capital | 10.60 | % | 10.55 | % | 10.56 | % | ||||||
| Tier 1 risk-based capital | 15.13 | % | 14.75 | % | 13.91 | % | ||||||
| Common equity Tier 1 risk-based capital | 15.13 | % | 14.75 | % | 13.91 | % | ||||||
| Total risk-based capital | 16.39 | % | 16.01 | % | 15.17 | % | ||||||
| Tangible common equity to tangible assets (non-GAAP) | 10.24 | % | 10.29 | % | 10.27 | % | ||||||
| BOOK VALUES: | ||||||||||||
| Book value per common share | $ | 14.32 | $ | 13.95 | $ | 13.02 | ||||||
| Tangible book value per common share (e) | 13.51 | 13.13 | 12.21 | |||||||||
__________________________________________________
(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 troubled debt restructured loans totaling $404, $530 and $1,229 reported as non-accrual loans at December 31, 2016, September 30, 2016 and December 31, 2015, respectively.
(e) Tangible common equity divided by common shares outstanding (non-GAAP).
AVERAGE BALANCES, YIELDS, AND RATES - QUARTERLY
($ in thousands)
(unaudited)
| For the Three Months Ended | ||||||||||||||||||||
| December 31, 2016 | September 30, 2016 | December 31, 2015 | ||||||||||||||||||
| Amount | Rate | Amount | Rate | Amount | Rate | |||||||||||||||
| Assets | ||||||||||||||||||||
| Loans and loans held for sale | $ | 684,911 | 5.13 | % | $ | 669,661 | 5.13 | % | $ | 625,558 | 5.39 | % | ||||||||
| Investment securities and FHLB Stock | 10,989 | 3.42 | % | 11,726 | 3.31 | % | 11,955 | 3.04 | % | |||||||||||
| Interest bearing deposits and CD’s | 153,831 | 0.72 | % | 146,609 | 0.68 | % | 133,643 | 0.50 | % | |||||||||||
| Total interest-bearing assets | 849,731 | 4.31 | % | 827,996 | 4.32 | % | 771,156 | 4.51 | % | |||||||||||
| Other assets | 57,105 | 56,653 | 58,204 | |||||||||||||||||
| Total assets | 906,836 | 884,649 | 829,360 | |||||||||||||||||
| Liabilities and Shareholders’ Equity | ||||||||||||||||||||
| NOW checking accounts | $ | 202,385 | 0.23 | % | $ | 193,225 | 0.24 | % | $ | 179,611 | 0.25 | % | ||||||||
| Money market accounts | 120,311 | 0.32 | % | 107,410 | 0.31 | % | 104,377 | 0.30 | % | |||||||||||
| Savings accounts | 127,656 | 0.06 | % | 122,088 | 0.05 | % | 110,356 | 0.05 | % | |||||||||||
| Certificate of deposit accounts | 147,433 | 0.83 | % | 148,866 | 0.81 | % | 153,866 | 0.76 | % | |||||||||||
| Total interest-bearing deposits | 597,785 | 0.36 | % | 571,589 | 0.36 | % | 548,210 | 0.36 | % | |||||||||||
| FHLB borrowings | 30,000 | 4.07 | % | 44,837 | 5.42 | % | 45,000 | 4.21 | % | |||||||||||
| Total interest-bearing liabilities | 627,785 | 0.54 | % | 616,426 | 0.73 | % | 593,210 | 0.66 | % | |||||||||||
| Non-interest bearing demand deposits | 176,768 | 168,744 | 142,518 | |||||||||||||||||
| Other liabilities | 4,495 | 4,296 | 3,788 | |||||||||||||||||
| Shareholders’ equity | 97,788 | 95,183 | 89,844 | |||||||||||||||||
| Total liabilities and shareholders’ equity | 906,836 | 884,649 | 829,360 | |||||||||||||||||
| Interest rate spread | 3.77 | % | 3.59 | % | 3.85 | % | ||||||||||||||
| Net interest margin (1) | 3.91 | % | 3.77 | % | 4.00 | % | ||||||||||||||
| Average interest-bearing assets to | ||||||||||||||||||||
| Average interest bearing liabilities | 135.35 | % | 134.32 | % | 130.00 | % | ||||||||||||||
_____________________________________
(1) Net interest margin = annualized net interest income / average interest-bearing assets