On April 22, 2025, Timberland Bancorp Inc (TSBK, Financial) released its 8-K filing for the second fiscal quarter ended March 31, 2025. Timberland Bancorp Inc, a bank holding company operating under the name Timberland Bank, provides community banking services in western Washington. The company offers a range of financial services, including various loan and deposit products.
Quarterly Financial Performance
Timberland Bancorp Inc reported a net income of $6.76 million, or $0.85 per diluted share, for the second fiscal quarter of 2025. This represents a 21% increase in EPS from $0.70 in the same quarter last year. However, it is a slight decrease from the previous quarter's EPS of $0.86. The company's net interest margin (NIM) improved to 3.79%, up from 3.64% in the previous quarter and 3.48% a year ago.
“Our second fiscal quarter operating results were strong, highlighted by net interest margin expansion and modest balance sheet growth,” stated Dean Brydon, Chief Executive Officer.
Dividend and Shareholder Returns
Reflecting its solid earnings and capital position, Timberland Bancorp Inc announced a 4% increase in its quarterly cash dividend to $0.26 per share, marking the 50th consecutive quarter of dividend payments. This decision underscores the company's commitment to returning value to shareholders.
“As a result of Timberland’s solid earnings and strong capital position, our Board of Directors announced a 4% increase to the quarterly cash dividend to shareholders,” stated Jonathan Fischer, President and Chief Operating Officer.
Income and Expense Analysis
Operating revenue for the quarter increased by 1% to $19.90 million from the previous quarter and by 9% from the same quarter last year. Net interest income rose by 1% to $17.21 million compared to the previous quarter, driven by a decrease in funding costs and an increase in the yield on interest-earning assets. Non-interest income slightly decreased by less than 1% to $2.69 million, while operating expenses increased by 1% to $11.19 million.
Balance Sheet and Asset Quality
Total assets grew by 1% to $1.93 billion, with net loans receivable increasing by $8.26 million. The company's liquidity position remained strong, with liquidity assets comprising 16.9% of total liabilities. Timberland's non-performing assets ratio improved to 0.13%, and net charge-offs were minimal at less than $1,000 for the quarter.
“The loan portfolio continues to grow at a moderate pace, increasing 1% from the prior quarter and 4% year-over-year,” Brydon continued.
Capital and Risk Management
Timberland Bancorp Inc maintained a robust capital position with a total risk-based capital ratio of 20.29% and a Tier 1 leverage capital ratio of 12.55%. The tangible common equity to tangible assets ratio stood at 12.36%. Despite an increase in loans graded "Substandard," the company remains well-collateralized, viewing the issue as isolated.
Overall, Timberland Bancorp Inc's second fiscal quarter results demonstrate strong financial performance, driven by improved net interest margins and prudent balance sheet management. The company's strategic focus on maintaining a strong capital position and enhancing shareholder value through dividend increases positions it well for future growth.
Explore the complete 8-K earnings release (here) from Timberland Bancorp Inc for further details.
