Attached files
Exhibit 99.1
Timberland Bancorp, Inc.
Contact: Michael R. Sand,
President & CEO
Dean J. Brydon, CFO
(360) 533-4747
www.timberlandbank.com
Timberland Bancorp Reports Fiscal Third Quarter 2011 Results
HOQUIAM, WA July 26, 2011- Timberland Bancorp, Inc. (NASDAQ: TSBK)
("Timberland" or "the Company") today reported a net loss of $(1.28 million)
for its fiscal third quarter ended June 30, 2011 and net income of $1.16
million for the fiscal year to date. The quarter's net loss to common
shareholders after adjusting for the preferred stock dividend and the
preferred stock discount accretion was $(1.55 million), or $(0.23) per diluted
common share. This compares to net income to common shareholders of $819,000,
or $0.12 per diluted common share for the quarter ended March 31, 2011 and net
income to common shareholders of $543,000, or $0.08 per diluted common share
for the quarter ended June 30, 2010.
Timberland earned $1.16 million for the first nine months of fiscal 2011
compared to a net loss of $(2.15 million) for the same period in the prior
fiscal year. Net income available to shareholders for the first nine months of
fiscal 2011 after the preferred stock dividend and discount accretion was
$370,000, or $0.05 per diluted common share, compared to a loss of $(2.93
million), or $(0.44) per diluted common share, in the like period one year
ago.
Fiscal Third Quarter 2011 Highlights (at or for the period ended June 30,
2011, compared to June 30, 2010, or March 31, 2011):
* Capital levels remain very strong: Total Risk Based Capital of 16.60%;
Tier 1 Leverage
* Capital Ratio of 11.01%; Tangible Capital to Tangible Assets Ratio of
11.01%, all solidly above well capitalized levels;
* Net interest margin remained strong at 3.76%;
* Year-to-date net income of $1.16 million compared to a net loss of
$(2.15 million) for the same period one year ago;
* Total delinquent loans (past due 30 days or more) and non-accrual
loans decreased 15% to $45.0 million from $52.8 million at March 31,
2011;
* Fiscal year to date net charge-offs decreased 59.5% compared to the
same fiscal quarters in the prior year
"For the quarter ended June 30, 2011, Timberland provisioned $3.4 million to
its allowance for loan losses. The majority of this amount was due to three
appraisal updates involving the security for two lending relationships," said
Michael R. Sand, President and CEO. "A provision of $2.15 million was
established for a mini-storage facility. Of this amount, $704,000 represents
an impairment that we expect to recover as occupancy increases." Timberland
also recorded an expense of $137,000 for the quarter due to the valuation of
its mortgage servicing rights portfolio. "We expect to recover $187,000 from
future valuations of the mortgage servicing rights portfolio as rates rise,"
Sand also stated. "While the residual effects of the recession continue to
impact business loan demand we are starting to see good lending opportunities
in our market areas. We continue to market to strong borrowers with solid
collateral and strong business enterprises and continued generating strong
core operating revenues this quarter."
Capital Ratios and Asset Quality
Timberland Bancorp remains very well capitalized with a total risk-based
capital ratio of 16.60%, a Tier 1 leverage capital ratio of 11.01% and a
tangible capital to tangible assets ratio of 11.01% at June 30, 2011.
Timberland provisioned $3.40 million to its loan loss allowance during the
quarter ended June 30, 2011. The provision was primarily the result of
receiving updated appraisals reflecting decreased valuations for three
properties involving two borrowing relationships. Net charge-offs, however,
declined for the quarter by 48% to $3.41 million compared to $6.54 million for
the comparable quarter one year prior. Non-accrual loans decreased to $21.5
million at June 30, 2011 from $23.7 million at March 31, 2011 and were
comprised of 63 loans and 52 credit relationships. By category: 47% of
non-accrual loans are secured by land and land development properties; 27% are
secured by commercial properties; 11% are secured by residential properties;
11% are secured by residential construction projects; 3% are secured by
commercial real estate
Timberland Q2 Earnings
July 26, 2011
Page 2
construction projects, and 1% of non-accrual loans are secured by consumer
assets. The loan loss allowance of $11.8 million represented 2.21% of loans
receivable and loans held for sale at June 30, 2011. Total delinquent loans
(past due 30 days or more) and non-accrual loans declined 15% to $45.0 million
at June 30, 2011 compared to $52.8 million at March 31, 2011. The
non-performing assets ("NPAs") to total assets ratio was 5.53% at June 30,
2011 compared to 5.04% at March 31, 2011 and 5.28% at June 30, 2010.
Loans past due 90 days and still accruing increased to $4.9 million at June
30, 2011. One of the loans added to the category with a principal balance of
$1.8 million was brought current shortly after quarter end and the commercial
real estate collateral securing the loan is sold with an anticipated closing
date in Timberland's fourth fiscal quarter. Management believes that three
additional loans totaling $2.3 million retain a high probability of being
brought current during the Bank's fourth fiscal quarter or shortly thereafter.
Other real estate owned ("OREO") and other repossessed assets decreased 15.1%
to $11.0 million at June 30, 2011 from $13.0 million at June 30, 2010, and
increased from $10.1 million at March 31, 2011. At June 30, 2011 the OREO
portfolio consisted of 42 individual properties and four other repossessed
assets. The properties consisted of two condominium projects totaling $3.6
million, 24 land parcels totaling $2.7 million, 11 single family homes
totaling $2.4 million, three commercial real estate properties totaling $1.2
million and two land development projects totaling $1.0 million. During the
quarter ended June 30, 2011 nine OREO properties totaling $1.1 million were
sold for a net loss of $21,000.
Balance Sheet Management
Total assets decreased 1% to $735.0 million at June 30, 2011 from $743.9
million at March 31, 2011. The decrease in total assets was primarily the
result of a $5.9 million decrease in net loans receivable and a $4.7 million
decrease in cash and cash equivalents. Liquidity as measured by cash and cash
equivalents, CDs held for investment and available for sale investments was
21.6% of total liabilities at June 30, 2011 compared to 22.0% at March 31,
2011 and 18.9% one year ago.
Primarily as a result of decreases in land loan and one-to-four family home
loan balances, net loans receivable decreased 1% to $521.3 million at June 30,
2011 from $527.2 million at March 31, 2011. The Bank's land loan portfolio
decreased 13% to $50.2 million at June 30, 2011 from $57.6 million at March
31, 2011. The well diversified land portfolio consists of 405 loans on a
variety of land types including individual building lots, acreage, raw land
and commercially zoned properties. The average loan balance for the entire
land portfolio was approximately $124,000 at June 30, 2011.
LOAN PORTFOLIO
($ in thousands) June 30, 2011 March 31, 2011 June 30, 2010
Amount Percent Amount Percent Amount Percent
--------- ------- --------- ------- --------- -------
Mortgage Loans:
One-to four-
family $ 112,838 20% $ 115,193 21% $ 116,805 21%
Multi-family 31,058 6 29,724 5 33,127 6
Commercial 229,800 41 224,489 40 215,336 38
Construction
and land
development 68,017 12 65,325 12 66,248 12
Land 50,238 9 57,643 10 63,684 11
--------- ------- --------- ------- --------- -------
Total
mortgage
loans 491,951 88 492,374 88 495,200 88
Consumer Loans:
Home equity
and second
mortgage 36,991 7 37,478 7 39,215 7
Other 8,226 1 8,512 1 9,514 2
--------- ------- --------- ------- --------- -------
Total
consumer
loans 45,217 8 45,990 8 48,729 9
Commercial
business loans 20,621 4 19,605 4 18,114 3
--------- ------- --------- ------- --------- -------
Total loans 557,789 100% 557,969 100% 562,043 100%
======= ======= =======
Less:
Undisbursed
portion of
construction
loans in
process (22,713) (16,884) (15,780)
Deferred loan
origination
fees (1,988) (2,060) (2,232)
Allowance for
loan losses (11,790) (11,798) (10,900)
--------- --------- ---------
Total loans
receivable, net $ 521,298 $ 527,227 $ 533,131
========= ========= =========
Timberland Q2 Earnings
July 26, 2011
Page 3
"Construction loans represent a modest but important part of our loan
portfolio," Sand noted. "We have observed declining multi-family vacancy rates
and rising rents in our markets. In the third fiscal quarter we added $4.3
million in multi-family construction loans to our portfolio and increased our
commercial real estate construction loans by funding loans to construct
pre-leased medical office space."
CONSTRUCTION LOAN COMPOSITION
($ in thousands) June 30, 2011 March 31, 2011 June 30, 2010
Percent Percent Percent
of Loan of Loan of Loan
Amount Portfolio Amount Portfolio Amount Portfolio
-------- --------- -------- --------- -------- ---------
Custom and owner
/ builder $ 28,128 5% $ 29,375 5% $ 29,080 5%
Speculative one-
to four-family 3,028 1 3,013 1 5,071 1
Commercial real
estate 26,081 4 24,863 4 20,363 4
Multi-family
(including
condominium) 8,254 1 3,905 1 4,014 1
Land development 2,526 1 4,169 1 7,720 1
-------- --------- -------- --------- -------- ---------
Total
construction
loans $ 68,017 12% $ 65,325 12% $ 66,248 12%
======== ========= ======== ========= ======== =========
Timberland originated $35.7 million of loans during the quarter ended June 30,
2011 compared to $38.3 million for the preceding quarter and $36.5 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 June 30, 2011, $8.2 million of one-to-four family
fixed-rate mortgage loans were sold compared to $11.4 million for the
preceding quarter and $12.1 million for the quarter ended one year ago.
Timberland's mortgage-backed securities ("MBS") and other investments
decreased by $428,000 during the quarter to $12.0 million at June 30, 2011
from $12.4 million at March 31, 2011, primarily as a result of prepayments and
scheduled amortization. During the quarter ended June 30, 2011,
other-than-temporary-impairment ("OTTI") credit related write-downs and
realized losses of $165,000 were recorded on the private label mortgage-backed
securities that were acquired in the in-kind redemption from the AMF family of
mutual funds in June 2008. At June 30, 2011 the Bank's remaining private label
mortgage-backed securities portfolio had been reduced to $4.1 million from an
original acquired balance of $15.3 million.
DEPOSIT BREAKDOWN
($ in thousands)
June 30, 2011 March 31, 2011 June 30, 2010
Amount Percent Amount Percent Amount Percent
--------- ------- --------- ------- --------- -------
Non-interest
bearing $ 57,735 10% $ 58,957 10% $ 52,018 9%
N.O.W. checking 158,725 27 159,410 27 154,753 27
Savings 77,391 13 75,004 12 66,134 12
Money market 56,151 9 59,306 10 54,506 10
Certificates of
deposit under $100 146,037 25 148,978 25 148,864 26
Certificates of
deposit $100 and
over 93,459 16 95,508 16 91,710 16
Certificates of
deposit - brokered - - - - - - - - - - - -
--------- ------- --------- ------- --------- -------
Total deposits $ 589,498 100% $ 597,163 100% $ 567,985 100%
========= ======= ========= ======= ========= =======
Total deposits decreased 1% to $589.5 million at June 30, 2011, from $597.2
million at March 31, 2011 primarily as a result of a $5.0 million decrease in
CD account balances, a $3.2 million decrease in money market account balances,
a $1.2 million decrease in non-interest bearing account balances and a
$685,000 decrease in N.O.W. checking account balances. These decreases were
partially offset by a $2.4 million increase in a savings account balances.
Total shareholders' equity decreased $1.25 million to $86.33 million at June
30, 2011, from $87.58 million at March 31, 2011. The decrease in equity was
primarily a result of the net loss for the quarter. Timberland continues to
remain very well capitalized with a total risk based capital ratio of 16.60%
and a Tier 1 leverage capital of 11.01%. Book value per common share was $9.99
and tangible book value per common share was $9.13 at June 30, 2011.
Timberland Q2 Earnings
July 26, 2011
Page 4
Operating Results
Fiscal third quarter operating revenue (net interest income before provision
for loan losses, plus non-interest income excluding OTTI charges and valuation
allowances or recoveries on mortgage servicing rights ("MSRs")), increased to
$8.48 million from $8.29 million for the preceding quarter and from $8.46
million for the comparable quarter one year ago. Operating revenue increased
in the current quarter compared to the preceding quarter primarily due to an
increase in service charges on deposits and ATM transaction fees. For the
first nine months of fiscal 2011, operating revenue decreased slightly to
$25.55 million from $25.60 million for the first nine months of fiscal 2010
primarily due to a decrease in net interest income.
Net interest income increased to $6.41 million for the quarter ended June 30,
2011, from $6.35 million for the immediately prior quarter and from $6.39
million for the comparable quarter one year ago. The net interest margin for
the current quarter of 3.76% was relatively unchanged from the 3.78% margin
reported for the preceding quarter and declined from the 3.85% margin reported
for the comparable quarter one year ago. The net interest margin was reduced
by approximately eight basis points for the quarter ended June 30, 2011 by the
reversal of interest income on loans placed on non-accrual status during the
quarter. For the first nine months of fiscal 2011, net interest income
decreased 1% to $19.01 million from $19.23 million for the first nine months
of fiscal 2010. Timberland's net interest margin for the first nine months of
fiscal 2011 was 3.78% compared to 3.91% for the first nine months of fiscal
2010.
Timberland provisioned $3.40 million to its loan loss allowance for the
quarter ended June 30, 2011, compared to $700,000 in the preceding quarter and
$750,000 in the comparable quarter one year prior. For the first nine months
of fiscal 2011, the provision for loan losses decreased 41.5% to $5.00 million
compared to $8.55 million in the first nine months of fiscal 2010. Net
charge-offs for the quarter ended June 30, 2011 decreased 47.9% to $3.41
million compared to $6.54 million for the quarter ended June 30, 2010. Net
charge-offs were $651,000 for the quarter ended March 31, 2011. Fiscal year to
date, net charge-offs decreased 59.5% to $4.79 million compared to $11.82
million for the first nine months of fiscal 2010.
Non-interest income decreased to $1.76 million for the quarter ended June 30,
2011, from $2.11 million for the preceding quarter and from $1.94 million for
the comparable quarter one year ago. Non-interest income was reduced in the
current quarter by a $165,000 OTTI credit related write-down on private label
mortgage-backed securities and a $137,000 non-cash valuation allowance on the
Bank's mortgage servicing rights ("MSRs") asset. The valuation allowance on
the Bank's MSR asset was primarily a result of a decrease in mortgage interest
rates at June 30, 2011 relative to March 31, 2011. The decrease in mortgage
interest rates increased estimated mortgage prepayment speeds, shortened the
estimated average life of loans comprising the MSR asset and reduced the fair
value of the MSR asset. Year to date, non-interest income increased to $6.82
million from $4.34 million for the first nine months of fiscal 2010, primarily
due to a $1.69 million reduction in the OTTI charges recorded and a $703,000
MSR valuation allowance recovery.
Total operating (non-interest) expenses increased 10% to $6.78 million for the
third fiscal quarter from $6.18 million for the immediately prior quarter and
6% from $6.42 million for the comparable quarter one year ago. The increased
expenses for the current quarter compared to the preceding quarter were
primarily the result of recording a $490,000 increase in OREO related expenses
and an increase in foreclosure and loan administration expenses, which were
reflected in the other non-interest expense category. OREO related expenses
were lower in the preceding quarter primarily because a $533,000 gain on sale
of OREO properties was recorded which offset other OREO related expenses for
the quarter ended March 31, 2011. Year to date, operating expenses increased
4% to $19.34 million from $18.61 million for the first nine months of fiscal
2010, primarily as a result of increased salary and employee benefits expense,
increased foreclosure and loan administration expenses, and increased OREO
related expenses. These increases were partially offset by a reduction in FDIC
insurance expense and premises and equipment expense.
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).
Timberland Q2 Earnings
July 26, 2011
Page 5
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 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 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, 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, which could adversely affect our liquidity and earnings; our
compliance with regulatory enforcement actions, including regulatory memoranda
of understandings ("MOUs") to which we are subject; 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; our ability to attract and retain deposits; further 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 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; legislative or regulatory changes that adversely affect
our business including changes in regulatory policies and principles, the
interpretation of regulatory capital or other rules and any changes in the
rules applicable to institutions participating in the TARP Capital Purchase
Program; the availability of resources to address changes in laws, rules, or
regulations or to respond to regulatory actions; 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 2011 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 Q2 Earnings
July 26, 2011
Page 6
TIMBERLAND BANCORP INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended
($ in thousands, except per share
amounts) June 30, March 31, June 30,
(unaudited) 2011 2011 2010
---------- ---------- ----------
Interest and dividend income
Loans receivable $ 8,192 $ 8,240 $ 8,764
MBS and other investments 141 162 239
Dividends from mutual funds 8 8 9
Interest bearing deposits in banks 90 83 90
---------- ---------- ----------
Total interest and dividend income 8,431 8,493 9,102
---------- ---------- ----------
Interest expense
Deposits 1,463 1,591 1,950
FHLB advances and other borrowings 556 550 761
---------- ---------- ----------
Total interest expense 2,019 2,141 2,711
---------- ---------- ----------
Net interest income 6,412 6,352 6,391
Provision for loan losses 3,400 700 750
---------- ---------- ----------
Net interest income after provision
for loan losses 3,012 5,652 5,641
---------- ---------- ----------
Non-interest income
OTTI and realized losses on MBS and
other investments, net (165) (37) (152)
Service charges on deposits 993 898 1,066
Gain on sale of loans, net 247 266 238
Bank owned life insurance ("BOLI") net
earnings 121 118 120
Servicing income on loans sold 7 16 32
Valuation recovery (allowance) on
mortgage servicing rights ("MSRs") (137) 206 22
ATM transaction fees 515 458 439
Other 180 183 176
---------- ---------- ----------
Total non-interest income, net 1,761 2,108 1,941
---------- ---------- ----------
Non-interest expense
Salaries and employee benefits 3,150 3,115 3,117
Premises and equipment 667 675 717
Advertising 235 201 235
OREO and other repossessed assets
expense, net 496 6 373
ATM expenses 203 206 164
FDIC insurance 248 332 317
Insurance 56 89 154
Postage and courier 139 146 130
Amortization of core deposit intangible
("CDI") 42 42 48
State and local taxes 155 160 159
Professional fees 190 196 193
Other 1,201 1,010 815
---------- ---------- ----------
Total non-interest expense 6,782 6,178 6,422
---------- ---------- ----------
Income (loss) before income taxes (2,009) 1,582 1,160
Provision (benefit) for income taxes (729) 499 356
---------- ---------- ----------
Net income (loss) $ (1,280) $ 1,083 $ 804
---------- ---------- ----------
Preferred stock dividends $ (208) $ (208) $ (208)
Preferred stock discount accretion (57) (56) (53)
---------- ---------- ----------
Timberland Q2 Earnings
July 26, 2011
Page 7
Net income (loss) to common shareholders $ (1,545) $ 819 $ 543
========== ========== ==========
Net income (loss) per common share:
Basic $ (0.23) $ 0.12 $ 0.08
Diluted $ (0.23) $ 0.12 $ 0.08
Weighted average common shares
outstanding:
Basic 6,745,250 6,745,250 6,715,410
Diluted 6,745,250 6,745,250 6,715,410
Timberland Q2 Earnings
July 26, 2011
Page 8
TIMBERLAND BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS Nine Months Ended
($ in thousands, except per share) June 30, June 30,
(unaudited) 2011 2010
---------- ----------
Interest and dividend income
Loans receivable $ 24,966 $ 26,661
Investments and mortgage-backed securities 486 695
Dividends from mutual funds 23 27
Interest bearing deposits in banks 260 218
---------- ----------
Total interest and dividend income 25,735 27,601
Interest expense
Deposits 4,805 5,986
FHLB advances and other borrowings 1,835 2,387
---------- ----------
Total interest expense 6,640 8,373
---------- ----------
Net interest income 19,095 19,228
Provision for loan losses 5,000 8,545
---------- ----------
Net interest income after provision for loan
losses 14,095 10,683
---------- ----------
Non-interest income
OTTI and realized losses on MBS and other
investments, net (338) (2,045)
Gain on sale of MBS and other investments 79 - -
Service charges on deposits 2,875 3,218
Gain on sale of loans, net 1,214 987
BOLI net earnings 361 369
Servicing income (expense) on loans sold (13) 86
Valuation recovery on MSRs 703 - -
ATM transaction fees 1,384 1,187
Other 555 538
---------- ----------
Total non-interest income, net 6,820 4,340
---------- ----------
Non-interest expense
Salaries and employee benefits 9,393 9,019
Premises and equipment 2,036 2,120
Advertising 604 626
OREO and other repossessed assets expense, net 930 767
ATM expenses 583 490
FDIC insurance 919 1,323
Insurance 299 283
Postage and courier 400 400
Amortization of CDI 125 143
State and local taxes 475 453
Professional fees 567 561
Other 3,005 2,427
---------- ----------
Total non-interest expense 19,336 18,612
---------- ----------
Income (loss) before income taxes 1,579 (3,589)
Provision (benefit) for income taxes 417 (1,439)
---------- ----------
Net income (loss) $ 1,162 $ (2,150)
---------- ----------
Timberland Q2 Earnings
July 26, 2011
Page 9
Preferred stock dividends $ (624) $ (624)
Preferred stock discount accretion (168) (156)
---------- ----------
Net income (loss) to common shareholders $ 370 $ (2,930)
========== ==========
Net income (loss) per common share:
Basic $ 0.05 $ (0.44)
Diluted $ 0.05 $ (0.44)
Weighted average common shares outstanding:
Basic 6,745,250 6,713,103
Diluted 6,745,250 6,713,103
Timberland Q2 Earnings
July 26, 2011
Page 10
TIMBERLAND BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
($ in thousands, except per share amounts)
(unaudited) June 30, March 31, June 30,
2011 2011 2010
--------- --------- ---------
Assets
Cash and due from financial institutions $ 10,997 $ 11,126 $ 11,748
Interest-bearing deposits in other banks 103,306 107,871 83,507
--------- --------- ---------
Total cash and cash equivalents 114,303 118,997 95,255
--------- --------- ---------
Certificate of deposits ("CDs") held for
investment, at cost 18,087 17,430 15,188
Mortgage-backed securities and other
investments:
Held to maturity, at amortized cost 4,283 4,497 5,604
Available for sale, at fair value 7,679 7,893 11,578
FHLB stock 5,705 5,705 5,705
Loans receivable 532,322 537,856 542,577
Loans held for sale 766 1,169 1,454
Less: Allowance for loan losses (11,790) (11,798) (10,900)
--------- --------- ---------
Net loans receivable 521,298 527,227 533,131
--------- --------- ---------
Premises and equipment, net 16,981 17,106 17,529
OREO and other repossessed assets, net 10,996 10,140 12,957
BOLI 13,762 13,640 13,278
Accrued interest receivable 2,527 2,674 2,709
Goodwill 5,650 5,650 5,650
Core deposit intangible 439 481 612
Mortgage servicing rights, net 2,463 2,702 2,683
Prepaid FDIC insurance assessment 2,335 2,653 3,569
Other assets 8,510 7,063 6,970
--------- --------- ---------
Total assets $ 735,018 $ 743,858 $ 732,418
========= ========= =========
Liabilities and shareholders' equity
Deposits: Non-interest-bearing demand $ 57,735 $ 58,957 $ 52,018
Deposits: Interest-bearing 531,763 538,206 515,967
--------- --------- ---------
Total deposits 589,498 597,163 567,985
--------- --------- ---------
FHLB advances 55,000 55,000 75,000
Repurchase agreements 598 595 713
Other liabilities and accrued expenses 3,588 3,519 3,041
--------- --------- ---------
Total liabilities 648,684 656,277 646,739
--------- --------- ---------
Shareholders' equity
Preferred stock, $.01 par value; 1,000,000
shares authorized; 16,641 shares, Series
A, issued and outstanding
Series A shares: $1,000 per share
liquidation value 15,932 15,875 15,710
Common stock, $.01 par value; 50,000,000
shares authorized; 7,045,036 shares issued
and outstanding 10,463 10,410 10,373
Unearned shares- Employee Stock Ownership
Plan (2,049) (2,115) (2,313)
Retained earnings 62,609 64,153 62,641
Accumulated other comprehensive loss (621) (742) (732)
--------- --------- ---------
Total shareholders' equity 86,334 87,581 85,679
--------- --------- ---------
Total liabilities and shareholders'
equity $ 735,018 $ 743,858 $ 732,418
========= ========= =========
Timberland Q2 Earnings
July 26, 2011
Page 11
KEY FINANCIAL RATIOS AND DATA
($ in thousands, except per share amounts) (unaudited)
Three Months Ended
---------------------------------
June 30, March 31, June 30,
2011 2011 2010
--------- ---------- ---------
PERFORMANCE RATIOS:
Return (loss) on average assets (a) (0.69)% 0.59% 0.45%
Return (loss) on average equity (a) (5.83)% 5.00% 3.78%
Net interest margin (a) 3.76% 3.78% 3.85%
Efficiency ratio 82.98% 73.03% 77.08%
Nine Months Ended
---------------------------------
June 30, June 30,
2011 2010
--------- ---------
Return (loss) on average assets (a) 0.21% (0.40)%
Return (loss) on average equity (a) 1.79% (3.31)%
Net interest margin (a) 3.78% 3.91%
Efficiency ratio 74.61% 78.97%
June 30, March 31, June 30,
2011 2011 2010
--------- ---------- ---------
ASSET QUALITY RATIOS:
Non-accrual loans $ 21,545 $ 23,675 $ 21,031
Past due 90 days and still accruing 4,893 305 1,198
Non-performing investment securities 3,184 3,355 3,482
OREO and other repossessed assets 10,996 10,140 12,957
--------- ---------- ---------
Total non-performing assets (b) $ 40,618 $ 37,475 $ 38,668
========= ========== =========
Non-performing assets to total assets
(b) 5.53% 5.04% 5.28%
Net charge-offs during quarter $ 3,408 $ 651 $ 6,537
Allowance for loan losses to non-accrual
loans 55% 50% 52%
Allowance for loan losses to loans
receivable, net (c) 2.21% 2.19% 2.00%
Troubled debt restructured loans on
accrual status (d) $ 20,783 $ 22,447 $ 8,895
CAPITAL RATIOS:
Tier 1 leverage capital 11.01% 11.37% 11.15%
Tier 1 risk based capital 15.34% 15.44% 14.70%
Total risk based capital 16.60% 16.70% 15.96%
Tangible capital to tangible assets (e) 11.01% 11.04% 10.94%
BOOK VALUES:
Book value per common share $ 9.99 $ 10.18 $ 9.93
Tangible book value per common share (e) $ 9.13 $ 9.31 $ 9.04
----------------------------------------
(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 $4,956,
$4,671 and $5,464 reported as non-accrual loans at June 30, 2011, March
31, 2011 and June 30, 2010, respectively.
(e) Calculation subtracts goodwill and core deposit intangible from the
equity component and from assets.
Timberland Q2 Earnings
July 26, 2011
Page 12
AVERAGE BALANCE SHEETS: Three Months Ended
-----------------------------
June 30, March 31, June 30,
2011 2011 2010
--------- --------- ---------
Average total loans $ 537,858 $ 536,453 $ 552,055
Average total interest-earning assets
(a) 682,529 672,179 663,511
Average total assets 743,207 731,019 721,001
Average total interest-bearing
deposits 535,873 530,192 508,185
Average FHLB advances and other
borrowings 55,509 55,486 75,859
Average shareholders' equity 87,797 86,678 85,101
Nine Months Ended
-----------------------------
June 30, June 30,
2011 2010
--------- ---------
Average total loans $ 537,782 $ 558,586
Average total interest-earning assets
(a) 672,772 655,847
Average total assets 732,041 711,551
Average total interest-bearing
deposits 529,736 492,999
Average FHLB advances and other
borrowings 55,514 79,352
Average shareholders' equity 86,686 86,732
-------------------------------------
(a) Includes loans on non-accrual status
