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): July 22, 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 July 22, 2008, Timberland Bancorp, Inc. issued its earnings release
for the quarter ended June 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 July 22, 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: July 23, 2008 By:/s/Dean J. Brydon
--------------------------
Dean J. Brydon
Chief Financial Officer
Exhibit 99.1
Timberland Bancorp, Inc.
Contact: Michael R. Sand,
President & CEO
Dean J. Brydon, CFO
(360) 533-4747
www.timberlandbank.com
----------------------
Timberland Bancorp Announces Fiscal Third Quarter 2008 Results
HOQUIAM, WA--Jul 22, 2008 -- Timberland Bancorp, Inc. (TSBK News)
("Timberland"), the holding company for Timberland Bank ("Bank"), today
reported core operating earnings of $2.05 million, or $0.31 per diluted share
for the fiscal third quarter ended June 30, 2008, exclusive of the previously
announced non-recurring impairment charge of $2.82 million ($2.59 million
after tax) resulting from the withdrawal of its investment in the AMF family
of mutual funds. The non-recurring impairment charge of $0.39 per diluted
share resulted in a net loss of $0.08 per diluted shares for the fiscal third
quarter. In the fiscal second quarter ended March 31, 2008, Timberland earned
$1.59 million, or $0.24 per diluted share and in the quarter ended June 30,
2007, it earned $2.14 million, or $0.31 per diluted share. Timberland's non-
performing assets to total assets ratio was 1.55% at June 30, 2008. 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 Third Quarter 2008 Highlights: (quarter ended June 30, 2008 compared to
the quarter ended June 30, 2007)
* Core earnings per diluted share were $0.31.
* Capital levels remain strong with an 11.3% equity-to-assets ratio
and a 10.3% tangible-equity-to-assets ratio.
* Non-interest income (exclusive of the non-recurring impairment charge)
increased 29%.
* Quarterly cash dividend of $0.11 per share announced on July 8, 2008.
This represents the 42nd consecutive quarter that Timberland will have
paid a cash dividend.
* The loan portfolio increased 12% to $557 million from $497 million.
* Total assets increased 6% to $664 million from $624 million.
* Timberland consistently earns top honors for strong performance and
financial stability.
* In April 2008, SNL Financial, a leading bank research firm,
released their 2007 performance ratings of the nation's 100
largest thrifts. Timberland Bancorp, Inc. ranked seventh
overall in the nation.
* Timberland Bank also earned a five-star "Superior" rating from
Bauer Financial.
"Operationally our third quarter performance reflects the underlying strength
of our franchise," said Michael R. Sand, President and Chief Executive
Officer.
Operating Results
Fiscal third quarter revenue (net interest income before provision for loan
losses plus non-interest income), excluding the non-recurring impairment
charge, increased 3% to $8.4 million compared with $8.2 million in the like
quarter one year ago. Solid growth in fee income more than offset marginally
lower net interest income. Net interest income before the provision for loan
losses decreased 2% to $6.5 million from $6.7 million compared to the like
quarter one year ago with interest and dividend income decreasing 4% and
interest expense decreasing 7%. Fiscal year to date core operating revenue
increased 5% to $25.1 million from $23.8 million in the first nine months one
year ago with net interest income up 3% and non-interest income increasing
13%. During this challenging interest rate environment, Timberland's net
interest margin remained solid at 4.23%, a reduction of 21 basis points from
the 4.44% reported for the quarter ended March 31, 2008. The 25 basis point
interest rate cut by the Federal Reserve at the end of April 2008 combined
with a full quarter's impact from the 200 basis points in cuts during the
quarter ended March 31, 2008 compressed margins during the current quarter.
The reversal of interest on loans placed on non-accrual status during the
quarter accounted for eight basis points of the 21 basis point decrease in the
net interest margin. The Company's net interest margin was 4.67% for the same
quarter one year ago. Year to date, Timberland's net interest margin was 4.42%
compared to 4.72% one year ago.
In the third fiscal quarter Timberland made a provision of $500,000 to its
allowance for loan losses. This represented a decrease of $200,000 from the
provision made in the quarter immediately prior and an increase of $240,000 as
compared to the like quarter in the prior fiscal year. Net charge-offs for the
quarter ended June 30, 2008 totaled $121,000. Timberland's Safety
Timberland Q3 Earnings
July 22, 2008
Page 2
and Soundness Regulatory examination was conducted and concluded in mid May.
Timberland's annual independent third party loan review was also conducted and
concluded in May.
During the quarter Timberland recognized a non-recurring impairment charge of
$2.82 million on its investment in the AMF family of mutual funds. Due to a
continuing decline in the net asset value ("NAV") of the funds primarily as a
result of uncertainty in spreads in the bond market for mortgage-related
securities and downgrades to a small percentage of the underlying securities,
Timberland determined that the funds should be classified as "other than
temporarily impaired." "Subsequently, we elected to redeem our $29.1 million
mutual fund investment and received both cash and the underlying securities
from the redemption," said Sand. Only $317,000 were cash charges and the
remaining $2.5 million were non-cash charges to income. It is currently
anticipated that a portion of the non-cash charge will be partially offset in
each subsequent quarter as principal payments are made to the underlying
securities. The redemption of the mutual funds resulted in a capital loss
which can only be deducted for tax purposes to the extent that capital gains
are realized within a three year carry back period and a five year carry
forward period. Timberland has estimated that it will have $679,000 in capital
gains during the allowable tax period to offset the capital loss. The after
tax impact of the non-recurring impairment charge is $2.59 million, or $0.39
per diluted share.
Non-interest income (excluding the non-recurring impairment charge) increased
29% to $1.93 million for the third quarter from $1.50 million for the third
quarter of fiscal 2007, primarily due to increased service charges on deposits
and increased income from loan sales (gain on sale of loans and servicing
income on loans sold). "Our operating income continues to build as we
introduce new products and services to our customers. The success of the
automated overdraft decisioning system implemented during the quarter
increased fee income," said Sand. The increased income from loan sales was
primarily a result of an increase in the dollar value of residential mortgage
loans sold in the secondary market during the quarter. The sale of fixed rate
one-to-four family mortgage loans totaled $16.0 million for the third quarter
of fiscal 2008 compared to $7.8 million for the same period one year prior.
Timberland's total operating (non-interest) expenses increased by $158,000 to
$4.92 million for the third quarter from $4.76 million for the third quarter
of fiscal 2007 primarily due to a $60,000 increase in salaries and employee
benefits expense, a $49,000 increase in deposit related expenses, a $38,000
increase in advertising expenses and smaller increases in several other
categories. The increased salary and benefit expense was primarily the result
of annual salary adjustments (effective October 1, 2007). The increased
deposit related expenses were primarily a result of expenses associated with
several new deposit related programs. The increased advertising expenses were
primarily attributable to marketing costs designed to gather new deposits.
Partially offsetting these increased expenses was a $38,000 decrease in
premises and equipment expense as compared to the like quarter one year ago.
The decrease in premises and equipment expense was primarily due to the sale
of a building that previously served as a branch facility. The gain on the
sale of the building resulted in a $123,000 decrease to premises and equipment
expenses during the quarter. Timberland's efficiency ratio (exclusive of the
non-recurring impairment charge) was 58.36% for the quarter ended June 30,
2008 compared to 58.35% for the quarter ended June 30, 2007.
Asset Quality
The non-performing assets ("NPAs") to total assets ratio was 1.55% at June 30,
2008, with $121,000 in net charge-offs during the quarter. The allowance for
loan losses totaled $7.1 million at June 30, 2008, or 1.26% of loans
receivable and 75% of non-performing loans. The allowance for loan losses was
$6.7 million, or 1.21% of loans receivable and $4.5 million, or 0.90% of loans
receivable at March 31, 2008 and June 30, 2007, respectively.
Non-performing loans increased by $3.0 million during the quarter to $9.4
million at June 30, 2008, and were comprised of 31 loans including 16 single
family speculative loans totaling $5.6 million (of which the largest has a
balance of $522,000), a $1.8 million participation interest in a land
development loan located in Clark County, eight land loans totaling $933,000,
one commercial real estate loan for $717,000, three home equity consumer loans
totaling $233,000, one single family home loan for $101,000 and one commercial
business loan for $14,000. These non-performing loans represent 13 credit
relationships. The increase in non-performing loans as compared to the quarter
immediately prior was attributable to seven credit relationships which are
discussed below.
1. The largest of these seven relationships is with a long-time builder
of Timberland's that has five single family speculative loans, four
land loans each zoned for the construction of one single family
dwelling and one home equity loan outstanding for an aggregate
total of $2.57 million. The collateral for all these loans except
the home equity loan is located in rural Thurston County.
Timberland Q3 Earnings
July 22, 2008
Page 3
2. Another builder has two loans totaling $605,000 that are secured by
single family speculative homes in Pierce County.
3. A commercial real estate loan of $717,000 is secured by a medical
office building in Kitsap County. The assessed value of the
collateral is $1.02 million and the property is currently listed
for sale at $1.24 million.
4. A loan of $101,000 is well secured by a house with an assessed value
of $166,000. The collateral is located in Kitsap County.
5. A loan of $78,000 is partially secured by a building lot. The borrower
is an owner builder that is involved in personal litigation which has
prevented him from building on the lot. The collateral is located in
Grays Harbor County.
6. A loan of $31,000 is secured by a residential building lot in Grays
Harbor County with an assessed value of $50,000.
7. A $14,000 loan is secured by a lift truck.
Loans with an aggregate balance of $173,000 that were non-performing at the
end of the prior quarter were brought current during the quarter ended June
30, 2008 and one loan was transferred to other real estate owned ("OREO").
OREO increased to $879,000 at June 30, 2008 and consisted of one single-family
residence in Pierce County. Balance Sheet Management Total assets increased
6% on an annualized basis during the quarter to $663.8 million at June 30,
2008, and increased 6% from $624.1 million one year ago primarily due to loan
portfolio growth.
LOAN PORTFOLIO
($ in thousands)
June 30, 2008 March 31, 2008 June 30, 2007
Amount Percent Amount Percent Amount Percent
-------- -------- -------- -------- -------- --------
Mortgage Loans:
One-to-four
family (1) $105,791 17% $108,117 18% $103,883 18%
Multi-family 37,465 6 37,932 6 31,719 6
Commercial 140,785 23 136,112 22 128,118 22
Construction
and land
development 202,029 32 197,384 32 181,157 32
Land 56,489 9 55,158 9 53,794 9
-------- -------- -------- -------- -------- --------
Total mortgage
loans 542,559 87 534,703 87 498,671 87
Consumer Loans:
Home equity and
second
mortgage 46,771 7 47,003 8 44,347 8
Other 11,292 2 10,888 2 11,735 2
-------- -------- -------- -------- -------- --------
58,063 9 57,891 10 56,082 10
Commercial
business loans 23,307 4 20,177 3 16,625 3
-------- -------- -------- -------- -------- --------
Total loans $623,929 100% $612,771 100% $571,378 100%
Less:
Undisbursed
portion of
construction
loans in
process (57,335) (55,447) (66,598)
Unearned income (2,865) (2,782) (2,921)
Allowance for
loan losses (7,076) (6,697) (4,529)
-------- -------- --------
Total loans
receivable,
net $556,653 $547,845 $497,330
======== ======== ========
_____________________
(1) Includes loans held for sale
CONSTRUCTION LOAN COMPOSITION
($ in thousands)
June 30, 2008 March 31, 2008 June 30, 2007
Amount Percent Amount Percent Amount Percent
-------- -------- -------- -------- -------- --------
Custom and
owner /
builder $ 48,384 24% $ 46,311 23% $ 48,894 27%
Speculative 36,979 18 42,582 22 43,655 24
Commercial
real estate 66,846 33 56,964 29 50,729 28
Multi-family 19,044 10 21,941 11 19,801 11
Land
development 30,776 15 29,586 15 18,078 10
-------- -------- -------- -------- -------- --------
Total
construction
loans $202,029 100% $197,384 100% $181,157 100%
Net loans receivable increased 12% year-over-year to $556.7 million at June
30, 2008, from $497.3 million one year ago. During the quarter the loan
portfolio increased by $8.8 million as commercial real estate loans increased
by $4.7 million, commercial business loans increased by $3.1 million,
construction and land development loans (net of the undisbursed portion)
increased by $2.8 million and land loans increased by $1.3 million. These
increases were partially offset by a $2.3 million
Timberland Q3 Earnings
July 22, 2008
Page 4
decrease in one-to four-family mortgage loans and a $467,000 decrease in
multi-family mortgage loans. The Bank's speculative construction portfolio
decreased by 13% from the
prior quarter.
Loan originations increased 36% to $80.1 million for the quarter ended June
30, 2008 from $59.0 million for the quarter ended March 31, 2008 and from
$66.4 million for the quarter ended June 30, 2007. The Bank participated out
$14.5 million of its loan production during the quarter and continues to sell
fixed rate one-to four-family mortgage loans into the secondary market for
asset-liability management purposes. During the quarter ended June 30, 2008,
fixed rate one-to four-family mortgage loan sales totaled $16.0 million.
Timberland's investment securities decreased by $9.4 million during the
quarter to $33.5 million at June 30, 2008 from $42.9 million at March 31, 2008
primarily due to the redemption of mutual funds held with the AMF family of
mutual funds. During the quarter Timberland redeemed $29.1 million in mutual
funds and received $22.2 million in underlying securities and $6.9 million in
cash. The investment securities balance also decreased during the quarter as a
result of regular amortization and prepayments on mortgage-backed securities.
DEPOSIT BREAKDOWN
($ in thousands)
June 30, 2008 March 31, 2008 June 30, 2007
Amount Percent Amount Percent Amount Percent
-------- ------- -------- ------- -------- -------
Non-interest bearing $ 50,701 11% $ 50,068 11% $ 50,580 12%
N.O.W. checking 90,476 19 88,350 19 80,290 18
Savings 58,604 12 57,212 12 59,558 14
Money market 48,082 10 47,244 10 46,446 11
Certificates of deposit
under $100 128,791 27 137,529 29 131,803 30
Certificates of deposit
$100 and over 77,343 16 74,376 16 64,837 15
Certificates of deposit
- brokered 25,937 5 15,058 3 -- --
-------- --- -------- --- -------- ---
Total deposits $479,934 100% $469,837 100% $433,514 100%
======== === ======== === ======== ===
Total deposits increased $10.1 million to $479.9 million at June 30, 2008 from
$469.8 million at March 31, 2008 primarily due to a $10.9 million increase in
brokered deposit accounts, a $2.1 million increase in N.O.W. checking
accounts, a $1.4 million increase in savings accounts, an $838,000 increase in
money market accounts and a $633,000 increase in non-interest bearing
accounts. These increases were partially offset by a $5.8 million decrease in
certificates of deposit accounts. Brokered deposits remain a very limited
portion of the Bank's funding sources.
Total shareholders' equity decreased $67,000 to $74.78 million at June 30,
2008 from $74.84 million at March 31, 2008. The reduction in shareholders'
equity was primarily due to cash dividends of $758,000 paid to shareholders
and a net loss of $546,000 resulting from the non-recurring impairment charge
noted above. These reductions to shareholders' equity were partially offset by
a $991,000 decrease to the accumulated other comprehensive loss category. A
significant portion ($976,000) of the non-recurring impairment charge on the
mutual funds reflected in the current quarter's income statement had
previously been accounted for as a reduction to shareholders' equity. This
reduction was reflected in the accumulated other comprehensive loss line item
in the balance sheet. Timberland did not repurchase any shares during the
quarter. Timberland remains well capitalized with tier 1 risk based capital of
12.1%, equity to assets of 11.3% and tangible equity to assets of 10.3%.
About Timberland Bancorp, Inc.
Timberland Bancorp operates 21 branches in the state of Washington in Hoquiam,
Aberdeen, Ocean Shores, Montesano, Elma, Olympia, Lacey, Tumwater, Yelm,
Puyallup, Edgewood, Tacoma, Spanaway (Bethel Station), Gig Harbor, Poulsbo,
Silverdale, Auburn, Winlock, and Toledo.
Timberland Q3 Earnings
July 22, 2008
Page 5
TIMBERLAND BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
($ in thousands, except per share)
(unaudited)
Three Months Ended
---------------------------------------------
Non-GAAP* GAAP GAAP GAAP
June 30, June 30, March 31, June 30,
2008 2008 2008 2007
--------- --------- --------- ---------
Interest and dividend income
Loans receivable $ 9,825 $ 9,825 $ 10,358 $ 9,981
Investments and mortgage-
backed securities 235 235 142 350
Dividends from mutual funds
and Federal Home Loan Bank
("FHLB") stock 272 272 395 426
Federal funds sold 28 28 27 49
Interest bearing deposits
in banks 8 8 4 8
--------- --------- --------- ---------
Total interest and
dividend income 10,368 10,368 10,926 10,814
Interest expense
Deposits 2,703 2,703 3,117 2,866
FHLB advances 1,161 1,161 1,132 1,278
Other borrowings 4 4 6 12
--------- --------- --------- ---------
Total interest expense 3,868 3,868 4,255 4,156
--------- --------- --------- ---------
Net interest income 6,500 6,500 6,671 6,658
Provision for loan losses 500 500 700 260
--------- --------- --------- ---------
Net interest income after
provision for loan losses 6,000 6,000 5,971 6,398
Non-interest income
Service charges on deposits 948 948 648 692
Gain on sale of loans, net 127 127 144 79
Loss on redemption of mutual
funds -- (2,822) -- --
Bank owned life insurance
("BOLI") net earnings 121 121 119 116
Servicing income on loans sold 234 234 179 127
ATM transaction fees 329 329 302 295
Other 170 170 162 192
--------- --------- --------- ---------
Total non-interest income
(loss) 1,929 (893) 1,554 1,501
Non-interest expense
Salaries and employee benefits 2,812 2,812 2,986 2,752
Premises and equipment 519 519 650 557
Advertising 228 228 268 190
Loss (gain) from other real
estate operations -- -- -- 1
ATM expenses 136 136 142 128
Postage and courier 129 129 130 113
Amortization of core deposit
intangible 62 62 62 71
State and local taxes 149 149 147 148
Professional fees 175 175 145 175
Other 709 709 676 626
--------- --------- --------- ---------
Total non-interest expense 4,919 4,919 5,206 4,761
Income before federal income
taxes 3,010 188 2,319 3,138
Federal income taxes 965 734 734 1,000
--------- --------- --------- ---------
Net income (loss) $ 2,045 $ (546) $ 1,585 $ 2,138
========= ========= ========= =========
Earnings (loss) per common
share:
Basic $ 0.32 $ (0.08) $ 0.25 $ 0.32
Diluted $ 0.31 $ (0.08) $ 0.24 $ 0.31
Weighted average shares
outstanding:
Basic 6,446,303 6,446,303 6,441,367 6,713,777
Diluted 6,524,818 6,524,818 6,560,806 6,910,165
* Non-GAAP column excludes non-recurring loss on redemption of mutual funds.
Timberland Q3 Earnings
July 22, 2008
Page 6
TIMBERLAND BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT Nine Months Ended
-------------------------------
($ in thousands, except per share) Non-GAAP* GAAP GAAP
(unaudited) June 30, June 30, June 30,
2008 2008 2007
--------- --------- ---------
Interest and dividend income
Loans receivable $ 30,947 $ 30,947 $ 28,050
Investments and mortgage-backed securities 625 625 1,185
Dividends from mutual funds and FHLB stock 1,090 1,090 1,259
Federal funds sold 87 87 192
Interest bearing deposits in banks 22 22 61
--------- --------- ---------
Total interest and dividend income 32,771 32,771 30,747
Interest expense
Deposits 9,153 9,153 8,113
FHLB advances 3,510 3,510 3,173
Other borrowings 18 18 39
--------- --------- ---------
Total interest expense 12,681 12,681 11,325
--------- --------- ---------
Net interest income 20,090 20,090 19,422
Provision for loan losses 2,400 2,400 416
--------- --------- ---------
Net interest income after provision
for loan losses 17,690 17,690 19,006
Non-interest income
Service charges on deposits 2,292 2,292 2,061
Gain on sale of loans, net 364 364 250
Loss on redemption of mutual funds - - (2,822) - -
BOLI net earnings 360 360 343
Servicing income on loans sold 531 531 373
ATM transaction fees 930 930 830
Other 504 504 548
--------- --------- ---------
Total non-interest income 4,981 2,159 4,405
Non-interest expense
Salaries and employee benefits 8,718 8,718 8,303
Premises and equipment 1,634 1,634 1,827
Advertising 678 678 569
Loss (gain) from real estate operations - - - - (14)
ATM expenses 426 426 354
Postage and courier 376 376 347
Amortization of core deposit intangible 186 186 214
State and local taxes 447 447 420
Professional fees 467 467 524
Other 2,044 2,044 2,052
--------- --------- ---------
Total non-interest expense 14,976 14,976 14,596
Income before federal income taxes 7,695 4,873 8,815
Federal income taxes 2,449 2,218 2,806
--------- --------- ---------
Net income $ 5,246 $ 2,655 $ 6,009
========= ========= =========
Earnings per common share:
Basic $ 0.81 $ 0.41 $ 0.88
Diluted $ 0.80 $ 0.40 $ 0.85
Weighted average shares outstanding:
Basic 6,467,874 6,467,874 6,863,253
Diluted 6,587,120 6,587,120 7,080,530
* Non-GAAP column excludes non-recurring loss on redemption of mutual funds.
Timberland Q3 Earnings
July 22, 2008
Page 7
TIMBERLAND BANCORP, INC.
CONSOLIDATED BALANCE SHEET
($ in thousands) (unaudited) June 30, March 31, June 30,
2008 2008 2007
--------- --------- ---------
Assets
Cash and due from financial institutions:
Non-interest bearing $ 14,776 $ 12,165 $ 11,798
Interest-bearing deposits in banks 3,196 883 1,188
Federal funds sold 5,565 1,220 205
--------- --------- ---------
23,537 14,268 13,191
Investments and mortgage-backed securities:
Held to maturity 14,684 60 72
Available for sale 18,828 42,868 64,911
FHLB stock 5,705 5,705 5,705
--------- --------- ---------
39,217 48,633 70,688
Loans receivable 562,664 549,593 500,694
Loans held for sale 1,065 4,949 1,165
Less: Allowance for loan losses (7,076) (6,697) (4,529)
--------- --------- ---------
Net loans receivable 556,653 547,845 497,330
Accrued interest receivable 2,932 3,055 3,177
Premises and equipment 16,286 16,470 16,557
Other real estate owned ("OREO") and other
repossessed items 879 -- 68
BOLI 12,775 12,654 12,294
Goodwill 5,650 5,650 5,650
Core deposit intangible 1,034 1,096 1,292
Mortgage servicing rights 1,277 1,145 1,018
Other assets 3,514 3,697 2,881
--------- --------- ---------
Total Assets $ 663,754 $ 654,513 $ 624,146
========= ========= =========
Liabilities and Shareholders' Equity
Non-interest-bearing deposits $ 50,697 $ 50,068 $ 50,580
Interest-bearing deposits 429,237 419,769 382,934
--------- --------- ---------
Total deposits 479,934 469,837 433,514
FHLB advances 104,645 105,663 112,463
Other borrowings: repurchase agreements 1,007 815 775
Other liabilities and accrued expenses 3,393 3,356 3,402
--------- --------- ---------
Total Liabilities 588,979 579,671 550,154
--------- --------- ---------
Shareholders' Equity
Common stock- $.01 par value; 50,000,000
shares authorized; June 30, 2008
- 6,901,453 shares issued and outstanding
March 31, 2008 - 6,876,653 shares issued
and outstanding June 30, 2007 - 7,025,360
shares issued and outstanding 69 69 70
Additional paid in capital 8,706 8,527 11,425
Unearned shares- Employee Stock Ownership
Plan (2,842) (2,908) (3,521)
Retained earnings 68,822 70,125 66,915
Accumulated other comprehensive income (loss) 20 (971) (897)
--------- --------- ---------
Total Shareholders' Equity 74,775 74,842 73,992
--------- --------- ---------
Total Liabilities and Shareholders' Equity $ 663,754 $ 654,513 $ 624,146
========= ========= =========
Timberland Q3 Earnings
July 22, 2008
Page 8
KEY FINANCIAL RATIOS AND DATA
($ in thousands, except per share amounts) (unaudited)
Three Months Ended
-------------------------------------------
Core Results GAAP GAAP GAAP
June 30, June 30, March 31, June 30,
2008 (a) 2008 2008 2007
---------- --------- --------- --------
PERFORMANCE RATIOS:
Return (loss) on average assets (b) 1.24% (0.33%) 0.98% 1.38%
Return (loss) on average equity (b) 10.91% (2.91%) 8.48% 11.24%
Net interest margin (b) 4.23% 4.23% 4.44% 4.67%
Efficiency ratio 58.36% 87.73% 63.29% 58.35%
Nine Months Ended
------------------------------------------
Core Results GAAP GAAP
June 30, June 30, June 30,
2008 (a) 2008 2007
---------- --------- --------
Return on average assets (b) 1.07% 0.54% 1.34%
Return on average equity (b) 9.34% 4.73% 10.36%
Net interest margin (b) 4.42% 4.42% 4.72%
Efficiency ratio 59.73% 67.31% 61.26%
June 30, March 31, June 30,
2008 2008 2007
-------- -------- -------
ASSET QUALITY RATIOS:
Non-performing loans $ 9,391 $ 6,388 $ 982
OREO and other repossessed assets 879 -- 68
-------- -------- -------
Total non-performing assets $ 10,270 $ 6,388 $ 1,050
Non-performing assets to total assets 1.55% 0.98% 0.17%
Allowance for loan losses to non-performing
loans 75% 105% 461%
Restructured loans $ -- $ 2,491 $ --
CAPITAL RATIOS:
Tier 1 leverage capital 10.41% 10.53% 10.92%
Tier 1 risk based capital 12.10% 12.08% 13.08%
Total risk based capital 13.35% 13.28% 13.96%
Equity to assets 11.27% 11.43% 11.85%
Tangible equity to assets (e) 10.26% 10.40% 10.74%
Book value per share (c) $ 10.83 $ 10.88 $ 10.53
Book value per share (d) $ 11.46 $ 11.53 $ 11.19
Tangible book value per share (c) (e) $ 9.87 $ 9.90 $ 9.54
Tangible book value per share (d) (e) $ 10.44 $ 10.49 $ 10.14
(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 Q3 Earnings
July 22, 2008
Page 9
AVERAGE BALANCE SHEET:
Three Months Ended
June 30, March 31, June 30,
2008 2008 2007
--------- --------- ---------
Average total loans $ 560,515 $ 546,349 $ 494,137
Average total interest earning assets 614,383 600,872 570,597
Average total assets 659,998 647,851 619,120
Average total interest bearing deposits 415,495 411,465 388,610
Average FHLB advances and other borrowings 110,903 107,572 98,467
Average shareholders' equity 74,956 74,741 76,087
Nine Months Ended
June 30, June 30,
2008 2007
--------- ---------
Average total loans $ 548,346 $ 466,200
Average total interest earning assets 605,949 548,942
Average total assets 652,804 598,688
Average total interest bearing deposits 412,904 381,946
Average FHLB advances and other borrowings 109,794 82,139
Average shareholders' equity 74,901 77,364
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.