Attached files
Exhibit 99.1
Contact: Michael R. Sand,
President & CEO
Dean J. Brydon, CFO
(360) 533-4747
www.timberlandbank.com
Timberland Bancorp Earns $1.08 Million in Fiscal Second Quarter 2011
EPS Increased to $0.12; Total Risk Based Capital Increased to 16.7%;
NPA Ratio Improves
HOQUIAM, WA - April 26, 2011 -- Timberland Bancorp, Inc. (NASDAQ: TSBK)
("Timberland" or "the Company") today reported fiscal 2011 second quarter
earnings of $1.08 million. Net income available to common shareholders after
adjusting for the preferred stock dividend and the preferred stock discount
accretion was $819,000, or $0.12 per diluted common share. This compares to
net income to common shareholders of $1.10 million, or $0.16 per diluted
common share for the quarter ended December 31, 2010 and a net loss to common
shareholders of $(3.44 million), or $(0.51) per diluted common share for the
quarter ended March 31, 2010. Net income of $2.44 million was recorded for
the first half of fiscal year 2011 compared to a net loss of $(2.95 million)
for the same period in the prior fiscal year. Net income available to
shareholders for the first half of fiscal 2011 after the preferred stock
dividend and discount accretion was $1.92 million, or $0.28 per diluted common
share, compared to a loss of $(3.47 million), or $(0.52) per common share, in
the like period one year ago.
"Our profitability, operating efficiencies and capital strength all improved
in the first half of this fiscal year reflecting both the progress we have
made internally and the improving local economies in which we operate," said
Michael R. Sand, President and CEO. "Timberland's profitability for the first
half of its current fiscal year represents a substantial increase in operating
results compared to the prior year's comparable fiscal period. Previously
strong capital ratios have continued to strengthen as we continue to adjust
our asset mix and produce profitable quarters. During the most recent quarter
we were successful in profitably reducing our OREO assets by 20% and in
reducing our non-interest expense relative to both the quarter immediately
prior and the comparable quarter in the prior fiscal year." Net loans
outstanding grew during the quarter compared to the prior quarter in a
particularly competitive market. "We are encouraged by the positive economic
news in our primary markets and the addition of a well known and respected
commercial banker to our commercial banking group in the Puget Sound region,"
Sand also stated.
Fiscal Second Quarter 2011 Highlights (at or for the period ended March 31,
2011, compared to March 31, 2010, or December 31, 2010):
* Net income increased to $1.08 million from a net loss of $(3.18
million) one year ago;
* Earnings per common diluted share increased to $0.12 from a loss of
$(0.51) per diluted common share one year ago;
* Capital levels remain very strong: Total Risk Based Capital of 16.70%;
Tier 1 Leverage Capital Ratio of 11.37%; Tangible Capital to Tangible
Assets Ratio of 11.04%, all solidly above well capitalized levels;
* Net interest margin remained strong at 3.78%;
* Non-performing assets to total assets ratio decreased to 5.04% at March
31, 2011 from 5.87% at December 31, 2010 and from 6.66% at March 31,
2010;
* Speculative one- to four-family construction loans, multi-family
construction loans and land development loans now comprise less than
2.0% of the loan portfolio;
* Total construction and land development loans decreased 35%
year-over-year and now account for only 12% of total loans;
* Net charge-offs for the quarter decreased to $651,000; down 81%
year-over-year;
Capital Ratios and Asset Quality
Timberland Bancorp remains very well capitalized with a total risk-based
capital ratio of 16.70%, a Tier 1 leverage capital ratio of 11.37% and a
tangible capital to tangible assets ratio of 11.04% at March 31, 2011.
Timberland provisioned $700,000 to its loan loss allowance during the quarter
ended March 31, 2011. Net charge-offs for the quarter declined 81% to
$651,000 compared to $3.4 million for the comparable quarter one year prior.
Non-accrual loans
Timberland Q2 Earnings
April 26, 2011
Page 2
decreased to $23.7 million at March 31, 2011 from $26.2 million at December
31, 2010 and were comprised of 76 loans and 57 credit relationships. By
category: 48% of non-accrual loans are secured by land and land development
properties; 27% are secured by commercial properties; 16% are secured by
residential properties; 8% are secured by residential construction projects,
and 1% of non-accrual loans are secured by consumer assets. The loan loss
allowance of $11.8 million represented 2.19% of loans receivable and loans
held for sale at March 31, 2011. Total delinquent loans (past due 30 days or
more) and non-accrual loans were $52.8 million at March 31, 2011 compared to
$51.3 million one year ago and $42.9 million at December 31, 2010. The
non-performing assets ("NPAs") to total assets ratio improved to 5.04% at
March 31, 2011 compared to 5.87% at December 31, 2010 and 6.66% at March 31,
2010. Net charge-offs totaled $651,000 during the quarter ended March 31,
2011 as gross charge-offs of $806,000 were partially offset by recoveries of
$155,000.
"We continue to actively work with borrowers to restructure loans as
appropriate to facilitate positive long term outcomes," added Sand. "We
continue to believe that restructuring certain loans is likely to produce the
best possible outcome for the Bank and borrowers who have encountered
temporary financial setbacks."
Other real estate owned ("OREO") and other repossessed assets decreased by 20%
to $10.1 million at March 31, 2011 from $12.6 million at December 31, 2010.
At March 31, 2011 the OREO portfolio consisted of 32 individual properties and
four other repossessed assets. The properties consisted of two condominium
projects totaling $3.6 million, 19 land parcels totaling $2.7 million, six
single family homes totaling $1.6 million, three commercial real estate
properties totaling $1.2 million and two land development projects totaling
$1.0 million. During the quarter ended March 31, 2011 nine OREO properties
and one other repossessed asset totaling $2.49 million were sold for a net
gain of $533,000.
Balance Sheet Management
Total assets increased 3% to $743.9 million at March 31, 2011 from $722.5
million at December 31, 2010. The increase in total assets was primarily the
result of a $21.5 million increase in cash and cash equivalents and $3.5
million increase in net loans receivable. "We continue to build and maintain
a high level of liquidity, both on balance sheet and through off-balance sheet
sources," said Dean Brydon, Chief Financial Officer. Liquidity as measured by
cash and cash equivalents, CDs held for investment and available for sale
investments was 22.0% of total liabilities at March 31, 2011 compared to 19.5%
at December 31, 2010 and 16.5% one year ago.
Net loans receivable increased 1% to $527.2 million at March 31, 2011 from
$523.8 million at December 30, 2010. "The loan mix in our portfolio and the
risk profile of the portfolio continues to improve," said Brydon. "Overall,
we have reduced our total exposure to construction and land development loans
by 35% from one year ago and by 59% from two years ago." Timberland continues
to originate non-speculative owner / builder single family construction loans
and certain commercial real estate construction loans, but has dramatically
reduced its exposure to speculative residential construction loans.
Timberland Q2 Earnings
April 26, 2011
Page 3
LOAN PORTFOLIO
($ in thousands) March 31, 2011 Dec. 31, 2010 March 31, 2010
Amount Percent Amount Percent Amount Percent
------- ------- ------ ------- ------ -------
Mortgage Loans:
One-to-four family $115,193 21% $116,631 21% $113,295 20%
Multi-family 29,724 5 29,419 5 33,236 6
Commercial 224,489 40 217,845 39 198,171 34
Construction and land
development 65,325 12 68,081 12 100,938 18
Land 57,643 10 58,334 11 63,856 11
-------- --- -------- --- -------- ---
Total mortgage loans 492,374 88 490,310 88 509,496 89
Consumer Loans:
Home equity and second
mortgage 37,478 7 37,239 7 39,303 7
Other 8,512 1 8,939 2 9,477 1
-------- --- -------- --- -------- ---
Total consumer loans 45,990 8 46,178 9 48,780 8
Commercial business loans 19,605 4 17,452 3 18,173 3
-------- --- -------- --- -------- ---
Total loans 557,969 100% 553,940 100% 576,449 100%
=== === ===
Less:
Undisbursed portion of
construction loans in process (16,884) (16,288) (18,824)
Deferred loan origination fees (2,060) (2,153) (2,286)
Allowance for loan losses (11,798) (11,749) (16,687)
-------- -------- --------
Total loans receivable, net $527,227 $523,750 $538,652
======== ======== ========
CONSTRUCTION LOAN COMPOSITION
($ in thousands) March 31, 2011 Dec. 31, 2010 March 31, 2010
Percent Percent Percent
of Loan of Loan of Loan
Amount Portfolio Amount Portfolio Amount Portfolio
------ --------- ------ --------- ------ ---------
Custom and owner / builder $29,375 5% $32,483 5% $ 29,101 5%
Speculative one- to four-family 3,013 1 3,469 1 10,070 2
Commercial real estate 24,863 4 23,869 4 40,369 7
Multi-family (including
condominium) 3,905 1 2,938 1 6,135 1
Land development 4,169 1 5,322 1 15,263 3
------- -- ------- -- -------- --
Total construction loans $65,325 12% $68,081 12% $100,938 18%
======= == ======= == ======== ==
Timberland's loan originations totaled $38.3 million for the quarter ended
March 31, 2011 compared to $49.1 million for the preceding quarter and $42.6
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 March 31, 2011, $11.4 million of one-to-four family
fixed-rate mortgage loans were sold on the secondary market compared to $26.9
million for the preceding quarter and $13.5 million for the quarter ended one
year ago.
The Bank's land loan portfolio decreased to $57.6 million at March 31, 2011
from $58.3 million at December 31, 2010. The portfolio consists of 428 loans
on a variety of land types including individual building lots, acreage, raw
land and commercially zoned properties. The average loan size for the entire
land portfolio was approximately $135,000 at March 31, 2011.
Timberland's mortgage-backed securities ("MBS") and other investments
decreased by $516,000 during the quarter to $12.4 million at March 31, 2011
from $12.9 million at December 31, 2010, primarily as a result of prepayments
and scheduled amortization. During the quarter ended March 31, 2011,
other-than-temporary-impairment ("OTTI") credit related write-downs and
realized losses of $37,000 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 March 31, 2011 the Bank's remaining private
label mortgage-backed securities portfolio had been reduced to $4.3 million
from an original acquired balance of $15.3 million.
Timberland Q2 Earnings
April 26, 2011
Page 4
DEPOSIT BREAKDOWN
($ in thousands)
March 31, 2011 Dec. 31, 2010 March 31, 2010
Amount Percent Amount Percent Amount Percent
------ ------- ------ ------- ------ -------
Non-interest
bearing $ 58,957 10% $ 51,519 9% $ 49,870 9%
N.O.W. checking 159,410 27 157,411 27 141,119 26
Savings 75,004 12 69,168 12 64,800 12
Money market 59,306 10 58,756 10 57,716 10
Certificates of
deposit under
$100 148,978 25 148,296 26 144,957 26
Certificates of
deposit $100
and over 95,508 16 92,244 16 89,262 16
Certificates of
deposit -
brokered - - - - - - - - 4,000 1
-------- --- -------- --- -------- ---
Total
deposits $597,163 100% $577,394 100% $551,724 100%
======== === ======== === ======== ===
Total deposits increased 3% to $597.2 million at March 31, 2011, from $577.4
million at December 31, 2010 primarily as a result of a $7.4 million increase
in non-interest bearing account balances, a $5.8 million increase in savings
account balances, a $3.9 million increase in CD account balances and a $2.0
million increase in N.O.W. checking account balances.
Total shareholders' equity increased $1.02 million to $87.58 million at March
31, 2011, from $86.56 million at December 31, 2010. The increase in equity
was primarily a result of net income for the quarter, net of accrued dividends
on preferred stock. Timberland continues to remain very well capitalized with
a total risk based capital ratio of 16.70% and a Tier 1 leverage capital of
11.37%. Book value per common share was $10.18 and tangible book value per
common share was $9.31 at March 31, 2011.
Operating Results
Fiscal second 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")), was $8.29
million compared to $8.78 million for the immediately prior quarter and $8.45
million for the comparable quarter one year ago. Operating revenue was higher
in the immediately prior quarter primarily due to a higher level of gains on
sale of loans, a larger valuation recovery on MSRs and a gain on sale of
agency mortgage backed securities during the quarter ended December 31, 2010.
For the first six months of fiscal 2011, operating revenue decreased slightly
to $17.08 million from $17.13 million for the first six months of fiscal 2010
primarily due to a decrease in net interest income before provision for loan
losses.
Net interest income increased to $6.35 million for the quarter ended March 31,
2011, from $6.33 million for the immediately prior quarter and decreased from
$6.45 million for the comparable quarter one year ago. The net interest
margin for the current quarter of 3.78% was relatively unchanged from the
3.82% margin reported in the quarter immediately prior and declined from the
3.92% margin reported for the comparable quarter one year ago. The decrease
in net interest margin was primarily due to placing an increased level of
liquidity in overnight investments. The net interest margin was reduced by
approximately five basis points for the quarter ended March 31, 2011 by the
reversal of interest income on loans placed on non-accrual status during the
quarter. For the first six months of fiscal 2011, net interest income
decreased 1% to $12.68 million from $12.84 million for the first six months of
fiscal 2010. Timberland's net interest margin for the first six months of
fiscal 2011 was 3.80% compared to 3.94% for the first six months of fiscal
2010.
Timberland provisioned $700,000 to its loan loss allowance for the quarter
ended March 31, 2011, compared to $900,000 in the preceding quarter and $5.2
million in the comparable quarter one year prior. For the first six months of
fiscal 2011, the provision for loan losses totaled $1.6 million compared to
$7.8 million in the first six months of fiscal 2010. Net charge-offs for the
quarter ended March 31, 2011 totaled $651,000 compared to $415,000 for the
quarter ended December 31, 2010 and $3.44 million for the quarter ended March
31, 2010. Fiscal year to date, net charge-offs were $1.1 million compared to
$5.3 million for the first six months of fiscal 2010.
Non-interest income decreased to $2.11 million for the quarter ended March 31,
2011, from $2.95 million for the immediately prior quarter and increased from
$430,000 for the comparable quarter one year ago. Non-interest income was
higher in the immediately prior quarter primarily due to gains on sale of
loans, which were $435,000 higher in the quarter ended December 31, 2010 than
in the quarter ended March 31, 2011 and recording a $634,000 non-cash
valuation allowance recovery for the Bank's MSR asset during the quarter ended
December 31, 2010. The higher gains on sale of loans during the immediately
Timberland Q2 Earnings
April 26, 2011
Page 5
prior quarter were primarily due to a higher dollar amount of fixed rate
single family home loans sold into the secondary market due to increased
refinance activity facilitated by historically low mortgage rates. Timberland
recorded a valuation allowance recovery on the MSR asset of $206,000 during
the current quarter and has now recovered $840,000 of the $890,000 valuation
allowance recorded during the September 30, 2010 quarter. "With refinancing
activity diminishing towards the end of the first fiscal 2011 quarter, the
average life of loans comprising the MSR asset increased, and we have been
able to recover most of the valuation allowance over the last two quarters,"
said Brydon. Year to date, non-interest income increased to $5.06 million
from $2.40 million for the first six months of fiscal 2010, primarily due to a
reduction in the OTTI charges recorded and the MSR valuation allowance
recovery.
Total operating (non-interest) expenses decreased 3% to $6.18 million for the
second fiscal quarter from $6.38 million for the immediately prior quarter and
8% from $6.69 million for the comparable quarter one year ago. The decrease
in expenses compared to the immediately prior quarter was primarily due to a
$422,000 decrease in OREO related expenses. The decreased OREO related
expenses for the current quarter were primarily due to the sale of $2.49
million in OREO properties for a net gain of $533,000, which offset other OREO
related expenses incurred during the quarter. The decreased OREO expenses
were partially offset by increased foreclosure and loan administration related
expenses which are reflected in the other non-interest expense category. Year
to date, operating expenses increased 3% to $12.55 million from $12.19 million
for the first six months of fiscal 2010, primarily due to increased salary and
employee benefits expense, increased D&O insurance expense and increased
foreclosure and loan administration related expenses. Also affecting the
comparison was a change in the Bank's vacation accrual policy during the prior
year which reduced the salaries and employee benefits expense by $164,000 for
the six months ended March 31, 2010.
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 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
Timberland Q2 Earnings
April 26, 2011
Page 6
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
April 26, 2011
Page 7
TIMBERLAND BANCORP INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended
($ in thousands, except per share amounts) March 31, Dec. 31, March 31,
(unaudited) 2011 2010 2010
-------- -------- --------
Interest and dividend income
Loans receivable $8,240 $8,534 $8,832
MBS and other investments 162 182 239
Dividends from mutual funds 8 8 9
Interest bearing deposits in banks 83 87 77
------ ------ -------
Total interest and dividend income 8,493 8,811 9,157
------ ------ -------
Interest expense
Deposits 1,591 1,751 1,958
FHLB advances and other borrowings 550 729 753
------ ------ -------
Total interest expense 2,141 2,480 2,711
------ ------ -------
Net interest income 6,352 6,331 6,446
Provision for loan losses 700 900 5,195
------ ------ -------
Net interest income after provision
for loan losses 5,652 5,431 1,251
------ ------ -------
Non-interest income
OTTI on MBS and other investments, net (35) (136) (1,556)
Realized loss on MBS and other investments (2) - - (1)
Gain on sale of MBS and other investments - - 79 - -
Service charges on deposits 898 984 1,022
Gain on sale of loans, net 266 701 300
Bank owned life insurance ("BOLI") net
earnings 118 122 115
Servicing income (expense) on loans sold 16 (36) 25
Valuation recovery (allowance)
on mortgage servicing rights ("MSRs") 206 634 (22)
ATM transaction fees 458 411 386
Other 183 192 161
------ ------ -------
Total non-interest income, net 2,108 2,951 430
------ ------ -------
Non-interest expense
Salaries and employee benefits 3,115 3,127 2,921
Premises and equipment 675 694 702
Advertising 201 167 220
OREO and other repossessed assets
expense, net 6 428 344
ATM expenses 206 175 171
FDIC insurance 332 340 806
Insurance 89 154 109
Postage and courier 146 115 142
Amortization of core deposit intangible
("CDI") 42 42 48
State and local taxes 160 160 153
Professional fees 196 182 196
Other 1,010 792 880
------ ------ -------
Total non-interest expense 6,178 6,376 6,692
------ ------ -------
Income (loss) before income taxes 1,582 2,006 (5,011)
Provision (benefit) for income taxes 499 647 (1,833)
------ ------ -------
Net income (loss) $1,083 $1,359 $(3,178)
====== ====== =======
Preferred stock dividends $ (208) $ (208) $ (208)
Timberland Q2 Earnings
April 26, 2011
Page 8
Preferred stock discount accretion (56) (54) (52)
------ ------ -------
Net income (loss) to common shareholders $ 819 $1,097 $(3,438)
====== ====== =======
Net income (loss) per common share:
Basic $ 0.12 $ 0.16 $ (0.51)
Diluted $ 0.12 $ 0.16 $ (0.51)
Weighted average common shares outstanding:
Basic 6,745,250 6,745,250 6,713,958
Diluted 6,745,250 6,745,250 6,713,958
Timberland Q2 Earnings
April 26, 2011
Page 9
TIMBERLAND BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS Six Months Ended
($ in thousands, except per share) March 31, March 31,
(unaudited) 2011 2010
------- -------
Interest and dividend income
Loans receivable $16,774 $17,897
Investments and mortgage-backed securities 344 456
Dividends from mutual funds 16 18
Interest bearing deposits in banks 170 128
------- -------
Total interest and dividend income 17,304 18,499
Interest expense
Deposits 3,342 4,036
FHLB advances and other borrowings 1,279 1,626
------- -------
Total interest expense 4,621 5,662
------- -------
Net interest income 12,683 12,837
Provision for loan losses 1,600 7,795
------- -------
Net interest income after provision for
loan losses 11,083 5,042
------- -------
Non-interest income
OTTI on MBS and other investments, net (171) (1,876)
Realized loss on MBS and other investments (2) (17)
Gain on sale of MBS and other investments 79 - -
Service charges on deposits 1,882 2,152
Gain on sale of loans, net 967 749
BOLI net earnings 240 249
Servicing income (expense) on loans sold (20) 54
Valuation recovery (allowance) on MSR's 840 (22)
ATM transaction fees 869 747
Other 376 363
------- -------
Total non-interest income, net 5,060 2,399
------- -------
Non-interest expense
Salaries and employee benefits 6,243 5,902
Premises and equipment 1,369 1,403
Advertising 368 392
OREO and other repossessed assets expense, net 434 395
ATM expenses 380 326
FDIC insurance 672 1,005
Insurance 243 129
Postage and courier 261 270
Amortization of CDI 83 95
State and local taxes 320 294
Professional fees 377 368
Other 1,804 1,611
------- -------
Total non-interest expense 12,554 12,190
------- -------
Income (loss) before income taxes 3,589 (4,749)
Provision (benefit) for income taxes 1,147 (1,795)
------- -------
Net income (loss) $ 2,442 $(2,954)
======= =======
Timberland Q2 Earnings
April 26, 2011
Page 10
Preferred stock dividends $ (416) $ (416)
Preferred stock discount accretion (110) (103)
------- -------
Net income (loss) to common shareholders $ 1,916 $(3,473)
======= =======
Net income (loss) per common share:
Basic $ 0.28 $ (0.52)
Diluted $ 0.28 $ (0.52)
Weighted average common shares outstanding:
Basic 6,745,250 6,711,950
Diluted 6,745,250 6,711,950
Timberland Q2 Earnings
April 26, 2011
Page 11
TIMBERLAND BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
($ in thousands, except per share amounts)
(unaudited) March 31, Dec. 31, March 31,
2011 2010 2010
-------- -------- --------
Assets
Cash and due from financial institutions $ 11,126 $ 8,955 $ 9,883
Interest-bearing deposits in other banks 107,871 88,516 65,574
-------- -------- --------
Total cash and cash equivalents 118,997 97,471 75,457
-------- -------- --------
Certificate of deposits ("CDs") held for
investment, at cost 17,430 18,501 18,108
Mortgage-backed securities and other
investments:
Held to maturity, at amortized cost 4,497 4,715 5,982
Available for sale, at fair value 7,893 8,191 12,225
FHLB stock 5,705 5,705 5,705
Loans receivable 537,856 533,646 554,880
Loans held for sale 1,169 1,853 459
Less: Allowance for loan losses (11,798) (11,749) (16,687)
-------- -------- --------
Net loans receivable 527,227 523,750 538,652
-------- -------- --------
Premises and equipment, net 17,106 17,237 17,751
OREO and other repossessed assets, net 10,140 12,612 13,477
BOLI 13,640 13,522 13,158
Accrued interest receivable 2,674 2,706 2,996
Goodwill 5,650 5,650 5,650
Core deposit intangible 481 522 659
Mortgage servicing rights, net 2,702 2,587 2,678
Prepaid FDIC insurance assessment 2,653 2,959 3,863
Other assets 7,063 6,357 8,415
-------- -------- --------
Total assets $743,858 $722,485 $724,776
======== ======== ========
Liabilities and shareholders' equity
Deposits: Non-interest-bearing demand $ 58,957 $ 51,519 $ 49,870
Deposits: Interest-bearing 538,206 525,875 501,854
-------- -------- --------
Total deposits 597,163 577,394 551,724
-------- -------- --------
FHLB advances 55,000 55,000 75,000
Federal Reserve Bank of San Francisco
borrowings -- -- 10,000
Repurchase agreements 595 642 445
Other liabilities and accrued expenses 3,519 2,887 2,738
-------- -------- --------
Total liabilities 656,277 635,923 639,907
-------- -------- --------
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 15,875 15,818 15,657
Common stock, $.01 par value; 50,000,000
shares authorized; 7,045,036 shares
issued and outstanding 10,410 10,389 10,357
Unearned shares-Employee Stock Ownership
Plan (2,115) (2,181) (2,379)
Retained earnings 64,153 63,335 62,098
Accumulated other comprehensive loss (742) (799) (864)
-------- -------- --------
Total shareholders' equity 87,581 86,562 84,869
-------- -------- --------
Total liabilities and shareholders'
equity $743,858 $722,485 $724,776
======== ======== ========
Timberland Q2 Earnings
April 26, 2011
Page 12
KEY FINANCIAL RATIOS AND DATA
($ in thousands, except per share amounts) (unaudited)
Three Months Ended
----------------------------------
March 31, Dec. 31, March 31,
2011 2010 2010
------- ------- --------
PERFORMANCE RATIOS:
Return (loss) on average assets (a) 0.59% 0.75% (1.78)%
Return (loss) on average equity (a) 5.00% 6.35% (14.56)%
Net interest margin (a) 3.78% 3.82% 3.93%
Efficiency ratio 73.03% 68.69% 97.32%
Six Months Ended
---------------------------------
March 31, March 31,
2011 2010
-------- --------
Return (loss) on average assets (a) 0.67% (0.84)%
Return (loss) on average equity (a) 5.67% (6.75)%
Net interest margin (a) 3.80% 3.94%
Efficiency ratio 70.75% 80.01%
March 31, Dec. 31, March 31,
2011 2010 2010
------- ------- --------
ASSET QUALITY RATIOS:
Non-accrual loans $23,675 $26,166 $26,351
Past due 90 days and still accruing 305 305 5,216
Non-performing investment securities 3,355 3,325 3,262
OREO and other repossessed assets 10,140 12,612 13,477
------- ------- -------
Total non-performing assets (b) $37,475 $42,408 $48,306
======= ======= =======
Non-performing assets to total assets (b) 5.04% 5.87% 6.66%
Net charge-offs during quarter $ 651 $ 415 $ 3,439
Allowance for loan losses to non-accrual
loans 50% 45% 63%
Allowance for loan losses to loans
receivable, net (c) 2.19% 2.19% 3.00%
Troubled debt restructured loans on
accrual status (d) $22,447 $ 8,841 $ 8,358
CAPITAL RATIOS:
Tier 1 leverage capital 11.37% 11.37% 11.27%
Tier 1 risk based capital 15.44% 15.28% 14.04%
Total risk based capital 16.70% 16.54% 15.31%
Tangible capital to tangible assets (e) 11.04% 11.22% 10.93%
BOOK VALUES:
Book value per common share $ 10.18 $ 10.04 $ 10.18
Tangible book value per common share (e) $ 9.31 $ 9.17 $ 9.26
------------
(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 $4,671, $6,756
and $10,265 reported as non-accrual loans at March 31, 2011, December 31,
2010 and March 31, 2010, respectively.
(e) Calculation subtracts goodwill and core deposit intangible from the equity
component and from assets.
Timberland Q2 Earnings
April 26, 2011
Page 13
AVERAGE BALANCE SHEETS: Three Months Ended
----------------------------------
March 31, Dec. 31, March 31,
2011 2010 2010
------- ------- --------
Average total loans $536,454 $539,007 $562,335
Average total interest-earning assets (a) 672,179 663,761 655,357
Average total assets 731,019 722,007 712,205
Average total interest-bearing deposits 530,192 523,221 496,148
Average FHLB advances and other borrowings 55,486 55,546 76,561
Average shareholders' equity 86,678 85,596 87,333
Six Months Ended
---------------------------------
March 31, March 31,
2011 2010
-------- --------
Average total loans $537,745 $561,851
Average total interest-earning assets (a) 667,895 652,020
Average total assets 726,458 706,827
Average total interest-bearing deposits 526,668 485,406
Average FHLB advances and other borrowings 55,516 81,099
Average shareholders' equity 86,131 87,547
__________________________________
---------------
(a) Includes loans on non-accrual status
