SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 4, 2008
Timberland Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Washington 0-23333 91-1863696
--------------------------- ------------- -------------------
State or other jurisdiction Commission (I.R.S. Employer
Of incorporation File Number Identification No.)
624 Simpson Avenue, Hoquiam, Washington 98550
--------------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number (including area code) (360) 533-4747
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions.
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act(17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act(17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
--------------------------------------------------------
On November 4, 2008, Timberland Bancorp, Inc. issued its earnings release
for the quarter ended September 30, 2008. A copy of the earnings release is
attached hereto as Exhibit 99.1, which is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
--------------------------------------------
(d) Exhibits
99.1 Press Release of Timberland Bancorp, Inc. dated November 4, 2008
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
TIMBERLAND BANCORP,INC.
DATE: November 5, 2008 By:/s/Dean J. Brydon
-------------------------
Dean J. Brydon
Chief Financial Officer
Exhibit 99.1
Contact: Michael R. Sand,
President & CEO
Dean J. Brydon, CFO
(360) 533-4747
www.timberlandbank.com
----------------------
Timberland Bancorp Earns $1.35 Million in Fiscal Fourth Quarter 2008
HOQUIAM, WA--November 4, 2008 -- Timberland Bancorp, Inc. (NASDAQ:TSBK)
("Timberland"), the holding company for Timberland Bank ("Bank"), today
reported fiscal fourth quarter profits of $1.35 million, or $0.21 per diluted
share after a $1.50 million addition to its loan loss reserves, compared to
earnings of $2.16 million, or $0.32 per diluted share for the fiscal fourth
quarter of 2007. For the fiscal year ended September 30, 2008, Timberland
reported earnings of $4.01 million, or $0.61 per diluted share compared to
earnings of $8.16 million, or $1.17 per diluted share for the fiscal year
ended September 30, 2007. Profit for the year ended September 30, 2008
reflects the non-recurring charge of $2.59 million ($0.39 per diluted share)
taken in June as a result of the Company's withdrawal of its investment in the
AMF family of mutual funds. All per share data has been adjusted to reflect
the two-for-one stock split in the form of a 100% stock dividend paid on June
5, 2007.
Fiscal Fourth Quarter 2008 Highlights: (quarter ended September 30, 2008
compared to the quarter ended September 30, 2007)
-- Capital levels remain well above the regulatory threshold for a well
capitalized designation with a 13.62% total risk based capital ratio.
-- Net interest margin remained strong at 4.36% (an increase of 13 basis
points from prior quarter).
-- Non-interest income increased 30%.
-- Quarterly cash dividend of $0.11 per share announced on October 29,
2008. This represents the 43rd consecutive quarter that Timberland has
paid a cash dividend.
-- The loan portfolio increased 8% to $558 million from $515 million.
-- Total deposits increased 7% to $499 million from $467 million
-- Total assets increased 6% to $682 million from $645 million.
-- The one-to-four family speculative construction portfolio decreased by
16% from the prior quarter, accounting for only 5% of the total loan
portfolio.
"While the economic environment in our markets along Washington's coast
continue to be relatively stable, we are seeing considerable stress in some
parts of the Puget Sound market," said Michael R. Sand, President and CEO. "We
are continuing to monitor our loan portfolio and to work with builders who
have inventory on the market. At September 30th, speculative one-to-four
family residential construction loans represented only 5% of the Bank's loan
portfolio, residential land development loans represented 5% of the portfolio,
and condominium construction loans represented 6% of the portfolio. We are
making appropriate provisions to loan loss reserves in accordance with the
results of our loan loss reserve analysis. An article in the Wall Street
Journal on October 28, 2008 indicated that the Seattle Metro area was judged
to have an 8.8 month supply of home inventory on the market. This compares
quite favorably to many parts of the country some of which appear to have a
supply in excess of 15 months. The Bank's core business remains strong. We
continue to look for opportunities to prudently grow the loan portfolio, to
control operating costs and to reduce our interest expense. The recent news
that the Boeing machinist strike is settled is a welcome development for the
regional outlook, with more than 27,000 workers returning to work."
Capital Ratios and Asset Quality
Timberland remains well capitalized with total risk based capital of 13.62%,
equity to assets of 10.98% and tangible equity to assets of 10.00%. "While we
are well capitalized and have a strong capital base, we are evaluating the
opportunity to increase capital through the Treasury's TARP program to provide
for additional loan growth in accordance with the intent of the program," Sand
noted. "We are currently weighing the costs and benefits of participation."
The non-performing assets ("NPAs") to total assets ratio was 1.83% at
September 30, 2008, with $526,000 in net charge-offs during the quarter and
$648,000 in net charge-offs for the fiscal year. The allowance for loan losses
totaled $8.1 million at September 30, 2008, or 1.42% of loans receivable and
67% of non-performing loans. The allowance for loan losses was $7.1
Timberland Q4 Earnings
November 4, 2008
Page 2
million, or 1.26% of loans receivable and $4.8 million, or 0.92% of loans
receivable at June 30, 2008 and September 30, 2007, respectively.
Non-performing loans ("NPLs") increased to $11.99 million at September 30,
2008, and were comprised of 34 loans and 17 credit relationships. Included in
NPLs are 17 single family speculative loans totaling $5.4 million (of which
the largest has a balance of $408,000), a $3.1 million land development loan
in Kennewick, Washington, a $1.4 million participation interest in a land
development loan located in Clark County, Washington, seven individual lot
(land) loans totaling $726,000, one commercial real estate loan in Kitsap
County, Washington for $714,000, three single family home loans totaling
$300,000, three home equity consumer loans totaling $160,000 and one
commercial business loan for $250,000.
Loans with an aggregate balance of $316,000 that were non-performing at the
end of the prior quarter were brought current during the September quarter.
"We sold the property held at June 30, 2008 as other real estate owned
("OREO") for $970,000 and added a single residential property to OREO during
the quarter ended September 30, 2008," Sand stated. OREO and other repossessed
assets decreased to $511,000 at September 30, 2008 and consisted of one
single-family residence in Pierce County and two vehicles.
Balance Sheet Management
Total assets increased 11% on an annualized basis during the quarter to $681.9
million at September 30, 2008, and increased 6% from $644.8 million one year
ago. The increase in assets during the current quarter was a result of an
increase in liquid assets as cash equivalents increased to $42.9 million at
September 30, 2008 from $23.5 million at June 30, 2008.
LOAN PORTFOLIO
($ in thousands) Sept. 30, 2008 June 30, 2008 Sept. 30, 2007
Amount Percent Amount Percent Amount Percent
-------- ----- -------- ------ -------- -----
Mortgage Loans:
One-to-four family (1) $112,299 18% $105,791 17% $102,434 17%
Multi-family 25,927 4 37,465 6 35,157 6
Commercial 146,223 24 140,785 23 127,866 22
Construction and land
development 186,344 31 202,029 32 186,261 32
Land 60,701 10 56,489 9 60,706 10
-------- ----- -------- ----- -------- ----
Total mortgage loans 531,494 87 542,559 87 512,424 87
Consumer Loans:
Home equity and second
mortgage 48,690 8 46,771 7 47,269 8
Other 10,635 2 11,292 2 10,922 2
-------- ----- -------- ----- -------- ----
Total consumer loans 59,325 10 58,063 9 58,191 10
Commercial business loans 21,018 3 23,307 4 18,164 3
-------- ----- -------- ----- -------- ----
Total loans $611,837 100% $623,929 100% $588,779 100%
Less:
Undisbursed portion of
construction loans
in process (43,353) (57,335) (65,673)
Unearned income (2,747) (2,865) (2,968)
Allowance for loan
losses (8,050) (7,076) (4,797)
-------- -------- --------
Total loans receivable,
net $557,687 $556,653 $515,341
======== ======== ========
_____________________
(1) Includes loans held for sale
CONSTRUCTION LOAN COMPOSITION
($ in thousands)
Sept. 30, 2008 June 30, 2008 Sept. 30, 2007
Percent Percent Percent
of Loan of Loan of Loan
Amount Portfolio Amount Portfolio Amount Portfolio
------ -------- ------ -------- ------ --------
Custom and owner /
builder $ 47,168 8% $ 48,384 8 $ 52,375 9%
Speculative 30,895 5 36,979 6 43,012 7
Commercial real estate 39,620 7 47,215 8 40,998 7
Timberland Q4 Earnings
November 4, 2008
Page 3
Condominium 39,196 6 36,538 6 27,584 5
Multi-family 1,313 - 2,137 - - -
Land development 28,152 5 30,776 5 22,292 4
-------- -------- --------
Total construction
loans $186,344 $202,029 $186,261
Net loans receivable increased 8% year-over-year to $557.7 million at
September 30, 2008, from $515.3 million one year ago. During the quarter the
loan portfolio increased by $1.0 million as one-to-four family loans increased
by $6.5 million, commercial real estate loans increased by $5.4 million, land
loans increased by $4.2 million and consumer loans increased by $1.3 million.
These increases were partially offset by an $11.5 million decrease in
multi-family loans, a $2.3 million decrease in commercial business loans and a
$1.7 million decrease in construction and land development loans (net of the
undisbursed portion).
Loan originations decreased to $50.0 million for the quarter ended September
30, 2008 from $80.1 million for the quarter ended June 30, 2008 and from $66.3
million for the quarter ended September 30, 2007. The Bank continues to sell
fixed rate one-to four-family mortgage loans into the secondary market for
asset-liability management purposes. During the quarter ended September 30,
2008, fixed rate one-to four-family mortgage loan sales totaled $9.4 million.
Timberland's investment securities decreased by $2.2 million during the
quarter to $31.3 million at September 30, 2008 from $33.5 million at June 30,
2008, primarily as a result of regular amortization and prepayments on
mortgage-backed securities.
DEPOSIT BREAKDOWN
($ in thousands)
Sept. 30, 2008 June 30, 2008 Sept. 30, 2007
Amount Percent Amount Percent Amount Percent
------- ------- ------- ------- ------- -------
Non-interest bearing $ 51,955 11% $ 50,701 11% $ 54,962 12%
N.O.W. checking 90,468 18 90,476 19 80,372 17
Savings 56,391 11 58,604 12 56,412 12
Money market 70,379 14 48,082 10 48,068 10
Certificates of deposit
under $100 130,313 26 128,791 27 135,528 29
Certificates of deposit
$100 and over 73,107 15 77,343 16 67,316 15
Certificates of deposit
- brokered 25,959 5 25,937 5 24,077 5
-------- ----- -------- ----- -------- -----
Total deposits $498,572 100% $479,934 100% $466,735 100%
======== ===== ======== ===== ======== =====
Total deposits increased $18.7 million to $498.6 million at September 30, 2008
from $479.9 million at June 30, 2008 primarily as a result of a $22.3 million
increase in money market accounts and a $1.3 million increase in non-interest
bearing checking accounts. These increases were partially offset by a $2.7
million decrease in non-brokered certificates of deposit accounts and a $2.2
million decrease in savings accounts. The increase in money market accounts
was partially a result of a $10.5 million short-term deposit by a commercial
customer that was transferred from the deposit base into the Bank's
Certificate of Deposit Registry Service (CDARS) program in early October 2008.
Total shareholders' equity increased $66,000 to $74.84 million at September
30, 2008 from $74.78 million at June 30, 2008. The increase in shareholders'
equity was primarily due to net income of $1.35 million, which was partially
offset by cash dividends of $762,000 paid to shareholders and a $481,000
change in the accumulated other comprehensive loss category as a result of
market value declines in the Company's available for sale investment
portfolio.
Operating Results
Fiscal fourth quarter revenue (net interest income before provision for loan
losses plus non-interest income), increased 7% to $8.9 million compared with
$8.3 million in the like quarter one year ago. The increase was a result of a
$462,000 increase in non-interest income and a $91,000 increase in net
interest income. Net interest income before the provision for loan losses
increased 1% to $6.8 million for the quarter ended September 30, 2008 from
$6.7 million compared to the like quarter one year ago with interest and
dividend income decreasing 6% and interest expense decreasing 16%. Fiscal 2008
core operating revenue (excluding the non-recurring impairment charge incurred
in June 2008) increased 6% to $33.9 million from $32.1 million in
Timberland Q4 Earnings
November 4, 2008
Page 4
fiscal 2007, with net interest income up 3% and non-interest income increasing
17%. During this challenging interest rate environment, Timberland's net
interest margin remained solid at 4.36% for the current quarter, an increase
of 13 basis points from the 4.23% reported for the quarter ended June 30, 2008
and a decrease of 24 basis points from the 4.60% reported for the quarter
ended September 30, 2007. For fiscal 2008 Timberland's net interest margin was
4.41% compared to 4.69% for fiscal 2007.
In the fourth fiscal quarter Timberland made a provision of $1.5 million to
its allowance for loan losses, up from $500,000 in the quarter immediately
prior and $270,000 in the like quarter in the prior fiscal year. Net
charge-offs for the quarter ended September 30, 2008 totaled $526,000,
compared to $121,000 in the immediately prior quarter and $2,000 in the like
quarter one year ago. Total net charge-offs in fiscal 2008 were $648,000
compared to $11,000 in fiscal 2007.
Non-interest income increased 30% to $2.0 million for the fourth fiscal
quarter from $1.6 million for the fourth quarter of fiscal 2007, primarily due
to increased service charges on deposits. "We continue to benefit from the
overdraft decisioning software installed this year," stated Sand. For fiscal
2008 non-interest income (excluding the non-recurring impairment charge
incurred in June 2008) increased 17% to $7.0 million from $6.0 million for
fiscal 2007.
Timberland's total operating (non-interest) expenses increased by $543,000 to
$5.40 million for the fourth fiscal quarter from $4.85 million for the fourth
quarter of fiscal 2007 primarily due to a $228,000 increase in salaries and
employee benefits expense, a $224,000 increase in deposit related expenses and
an $86,000 increase in professional fees. The increased salary and benefit
expense was primarily the result of annual salary adjustments (effective
October 1, 2007) and increased employee insurance expenses. The increased
deposit related expenses were primarily a result of expenses associated with
several new deposit related programs implemented during the year and an
increase in FDIC insurance expense recorded as the Bank's credit with the FDIC
was fully depleted during the quarter ended June 30, 2008. Timberland's fiscal
2008 total operating expenses increased 5% to $20.4 million from $19.5 million
for fiscal year 2007 primarily due to increased salaries and employee benefits
expense and increased deposit related expenses. Timberland's efficiency ratio
was 60.96% for the quarter ended September 30, 2008 compared to 58.47% for the
quarter ended September 30, 2007. Timberland's efficiency ratio (excluding the
non-recurring impairment charge) was 60.06% for the year ended September 30,
2008 compared to 60.54% for the year ended September 30, 2007.
About Timberland Bancorp, Inc.
Timberland Bancorp operates 21 branches in the state of Washington in Hoquiam,
Aberdeen, Ocean Shores, Montesano, Elma, Olympia, Lacey, Tumwater, Yelm,
Puyallup, Edgewood, Tacoma, Spanaway (Bethel Station), Gig Harbor, Poulsbo,
Silverdale, Auburn, Winlock, and Toledo.
Timberland Q4 Earnings
November 4, 2008
Page 5
TIMBERLAND BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT Three Months Ended
($ in thousands, except per share) Sept. 30, June 30, Sept. 30,
(unaudited) 2008 2008 2007
---------- ---------- ----------
Interest and dividend income
Loans receivable $ 9,977 $ 9,825 $ 10,335
Investments and mortgage-backed
securities 439 235 344
Dividends from mutual funds and Federal
Home Loan Bank ("FHLB") stock 33 272 433
Federal funds sold 104 28 69
Interest bearing deposits in banks 14 8 16
---------- ---------- ----------
Total interest and dividend income 10,567 10,368 11,197
Interest expense
Deposits 2,609 2,703 3,180
FHLB advances 1,121 1,161 1,262
Other borrowings 2 4 11
---------- ---------- ----------
Total interest expense 3,732 3,868 4,453
---------- ---------- ----------
Net interest income 6,835 6,500 6,744
Provision for loan losses 1,500 500 270
---------- ---------- ----------
Net interest income after provision
for loan losses 5,335 6,000 6,474
Non-interest income
Service charges on deposits 1,201 948 715
Gain on sale of loans, net 68 127 106
Loss on redemption of mutual funds -- (2,822) --
Bank owned life insurance ("BOLI") net
earnings 126 121 120
Servicing income on loans sold 138 234 133
ATM transaction fees 321 329 307
Other 165 170 176
---------- ---------- ----------
Total non-interest income (loss) 2,019 (893) 1,557
Non-interest expense
Salaries and employee benefits 2,852 2,812 2,624
Premises and equipment 674 519 625
Advertising 218 228 274
Loss (gain) from other real estate
operations (4) -- 1
ATM expenses 150 136 143
Postage and courier 138 129 131
Amortization of core deposit intangible 62 62 71
State and local taxes 175 149 152
Professional fees 211 175 125
Other 921 709 708
---------- ---------- ----------
Total non-interest expense 5,397 4,919 4,854
Income before federal income taxes 1,957 188 3,177
Federal income taxes 607 734 1,022
---------- ---------- ----------
Net income (loss) $ 1,350 $ (546) $ 2,155
========== ========== ==========
Earnings (loss) per common share:
Basic $ 0.21 $ (0.08) $ 0.33
Diluted $ 0.21 $ (0.08) $ 0.32
Weighted average shares outstanding:
Basic 6,475,385 6,446,303 6,516,381
Diluted 6,570,492 6,524,818 6,690,048
Timberland Q4 Earnings
November 4, 2008
Page 6
TIMBERLAND BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT Year Ended
---------------------------------
($ in thousands, except per share) Non-GAAP* GAAP GAAP
(unaudited) Sept. 30, Sept. 30, Sept. 30,
2008 2008 2007
--------- --------- ---------
Interest and dividend income
Loans receivable $ 40,924 $ 40,924 $ 38,386
Investments and mortgage-backed
securities 1,064 1,064 1,529
Dividends from mutual funds and FHLB
stock 1,123 1,123 1,692
Federal funds sold 191 191 260
Interest bearing deposits in banks 36 36 77
--------- --------- ---------
Total interest and dividend income 43,338 43,338 41,944
Interest expense
Deposits 11,763 11,763 11,292
FHLB advances 4,628 4,628 4,437
Other borrowings 22 22 49
--------- --------- ---------
Total interest expense 16,413 16,413 15,778
--------- --------- ---------
Net interest income 26,925 26,925 26,166
Provision for loan losses 3,900 3,900 686
--------- --------- ---------
Net interest income after provision
for loan losses 23,025 23,025 25,480
Non-interest income
Service charges on deposits 3,493 3,493 2,776
Gain on sale of loans, net 432 432 356
Loss on redemption of mutual funds -- (2,822) --
BOLI net earnings 486 486 464
Servicing income on loans sold 669 669 505
ATM transaction fees 1,251 1,251 1,138
Other 669 669 723
--------- --------- ---------
Total non-interest income 7,000 4,178 5,962
Non-interest expense
Salaries and employee benefits 11,569 11,569 10,928
Premises and equipment 2,307 2,307 2,452
Advertising 897 897 843
Loss (gain) from other real estate
operations (3) (3) (13)
ATM expenses 576 576 497
Postage and courier 514 514 478
Amortization of core deposit intangible 249 249 285
State and local taxes 622 622 571
Professional fees 678 678 650
Other 2,965 2,965 2,760
--------- --------- ---------
Total non-interest expense 20,374 20,374 19,451
Income before federal income taxes 9,651 6,829 11,991
Federal income taxes 3,055 2,824 3,828
--------- --------- ---------
Net income $ 6,596 $ 4,005 $ 8,163
========= ========= =========
Earnings per common share:
Basic $ 1.02 $ 0.62 $ 1.20
Diluted $ 1.00 $ 0.61 $ 1.17
Weighted average shares outstanding:
Basic 6,475,385 6,475,385 6,775,822
Diluted 6,570,492 6,570,492 6,982,107
* Non-GAAP column excludes non-recurring loss on redemption of mutual
funds.
Timberland Q4 Earnings
November 4, 2008
Page 7
TIMBERLAND BANCORP, INC.
CONSOLIDATED BALANCE SHEET
($ in thousands) (unaudited) Sept. 30, June 30, Sept. 30,
Assets 2008 2008 2007
--------- --------- ---------
Cash and due from financial
institutions:
Non-interest bearing $ 14,013 $ 14,776 $ 10,813
Interest-bearing deposits in banks 3,431 3,196 2,082
Federal funds sold 25,430 5,565 3,775
--------- --------- ---------
42,874 23,537 16,670
Investments and mortgage-backed
securities:
Held to maturity 14,233 14,684 71
Available for sale 17,098 18,828 63,898
FHLB stock 5,705 5,705 5,705
--------- --------- ---------
37,036 39,217 69,674
Loans receivable 563,964 562,664 519,381
Loans held for sale 1,773 1,065 757
Less: Allowance for loan losses (8,050) (7,076) (4,797)
--------- --------- ---------
Net loans receivable 557,687 556,653 515,341
Accrued interest receivable 2,870 2,932 3,424
Premises and equipment 16,884 16,286 16,575
Other real estate owned ("OREO") and
other repossessed items 511 879 --
BOLI 12,902 12,775 12,415
Goodwill 5,650 5,650 5,650
Core deposit intangible 972 1,034 1,221
Mortgage servicing rights 1,306 1,277 1,051
Other assets 3,191 3,514 2,827
--------- --------- ---------
Total Assets $ 681,883 $ 663,754 $ 644,848
========= ========= =========
Liabilities and Shareholders' Equity
Non-interest-bearing deposits $ 51,955 $ 50,697 $ 54,962
Interest-bearing deposits 446,617 429,237 411,773
--------- --------- ---------
Total deposits 498,572 479,934 466,735
FHLB advances 104,628 104,645 99,697
Other borrowings: repurchase agreements 758 1,007 595
Other liabilities and accrued expenses 3,084 3,393 3,274
--------- --------- ---------
Total Liabilities 607,042 588,979 570,301
--------- --------- ---------
Shareholders' Equity
Common stock - $.01 par value; 50,000,000
shares authorized;
Sept. 30, 2008 - 6,967,579 shares
issued and outstanding
June 30, 2008 - 6,901,453 shares
issued and outstanding
Sept. 30, 2007 - 6,953,360 shares
issued and outstanding 70 69 70
Additional paid in capital 8,602 8,706 9,923
Unearned shares - Employee Stock
Ownership Plan (2,776) (2,842) (3,040)
Retained earnings 69,406 68,822 68,378
Accumulated other comprehensive income
(loss) (461) 20 (784)
--------- --------- ---------
Total Shareholders' Equity 74,841 74,775 74,547
--------- --------- ---------
Total Liabilities and Shareholders'
Equity $ 681,883 $ 663,754 $ 644,848
========= ========= =========
Timberland Q4 Earnings
November 4, 2008
Page 8
KEY FINANCIAL RATIOS AND DATA
($ in thousands, except per share amounts) (unaudited)
Three Months Ended
--------------------------------------------------
GAAP Core Results GAAP GAAP
Sept. 30, June 30, June 30, Sept. 30,
2008 2008(a) 2008 2007
-------- -------- -------- --------
PERFORMANCE RATIOS:
Return (loss) on
average assets (b) 0.80% 1.24% (0.33%) 1.36%
Return (loss) on
average equity (b) 7.22% 10.91% (2.91%) 11.66%
Net interest margin (b) 4.36% 4.23% 4.23% 4.60%
Efficiency ratio 60.96% 58.36% 87.73% 58.47%
Year Ended
------------------------------------
Core Results GAAP GAAP
Sept. 30, Sept. 30, Sept. 30,
2008(a) 2008 2007
-------- -------- --------
Return on average assets (b) 1.00% 0.61% 1.34%
Return on average equity (b) 8.81% 5.35% 10.67%
Net interest margin (b) 4.41% 4.41% 4.69%
Efficiency ratio 60.06% 65.50% 60.54%
Sept. 30, June 30, Sept. 30,
2008 2008 2007
-------- -------- --------
ASSET QUALITY RATIOS:
Non-performing loans $ 11,990 $ 9,391 $ 1,490
OREO and other repossessed assets 511 879 --
-------- -------- --------
Total non-performing assets $ 12,501 $ 10,270 $ 1,490
Non-performing assets to total assets 1.83% 1.55% 0.23%
Allowance for loan losses to
non-performing loans 67% 75% 322%
Restructured loans $ 272 $ -- $ --
CAPITAL RATIOS:
Tier 1 leverage capital 10.28% 10.41% 10.73%
Tier 1 risk based capital 12.37% 12.10% 12.73%
Total risk based capital 13.62% 13.35% 13.64%
Equity to assets 10.98% 11.27% 11.56%
Tangible equity to assets (e) 10.00% 10.26% 10.49%
Book value per share (c) $ 10.74 $ 10.83 $ 10.72
Book value per share (d) $ 11.34 $ 11.46 $ 11.39
Tangible book value per share (c) (e) $ 9.79 $ 9.87 $ 9.73
Tangible book value per share (d) (e) $ 10.34 $ 10.44 $ 10.34
(a) Calculation excludes non-recurring loss on redemption of mutual funds
that occurred during 6/30/2008 quarter
(b) Annualized
(c) Calculation includes ESOP shares not committed to be released
(d) Calculation excludes ESOP shares not committed to be released
(e) Calculation subtracts goodwill and core deposit intangible from the
equity component
Timberland Q4 Earnings
November 4, 2008
Page 9
AVERAGE BALANCE SHEET: Three Months Ended
-------------------------------
Sept. 30, June 30, Sept. 30,
2008 2008 2007
--------- --------- ---------
Average total loans $ 564,145 $ 560,515 $ 509,166
Average total interest earning assets 626,574 614,383 586,056
Average total assets 674,354 659,998 634,762
Average total interest bearing deposits 438,496 415,495 405,078
Average FHLB advances and other borrowings 106,074 110,903 96,442
Average shareholders' equity 74,803 74,956 73,916
Year Ended
-------------------------------
Sept. 30, Sept. 30,
2008 2007
--------- ---------
Average total loans $ 552,318 $ 477,029
Average total interest earning assets 611,135 558,298
Average total assets 658,221 607,781
Average total interest bearing deposits 419,338 387,505
Average FHLB advances and other borrowings 108,858 85,599
Average shareholders' equity 74,875 76,497
Disclaimer
This report contains certain "forward-looking statements." The Company desires
to take advantage of the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995 and is including this statement for the express
purpose of availing itself of the protection of such safe harbor with
forward-looking statements. These forward-looking statements may describe
future plans or strategies and include the Company's expectations of future
financial results. Forward-looking statements are subject to a number of risks
and uncertainties that might cause actual results to differ materially from
stated objectives. These risk factors include but are not limited to the
effect of interest rate changes, competition in the financial services market
for both deposits and loans as well as regional and general economic
conditions. The words "believe," "expect," "anticipate," "estimate,"
"project," and similar expressions identify forward-looking statements. The
Company's ability to predict results or the effect of future plans or
strategies is inherently uncertain and undue reliance should not be placed on
such statements.