Timberland Bancorp Announces Second Fiscal Quarter Results

Net Income of $5.05 Million and EPS of $0.60
Allowance for Loan Losses Increased 20%Return on Average Assets of 1.56%Return on Average Equity of 11.39%Announces $0.20 Quarterly Cash DividendHOQUIAM, Wash., April 28, 2020 (GLOBE NEWSWIRE) — Timberland Bancorp, Inc. (NASDAQ: TSBK) (“Timberland” or “the Company”) today reported net income of $5.05 million for the quarter ended March 31, 2020 compared to $6.11 million for the comparable quarter one year ago and $6.65 million for the preceding quarter.  Earnings per diluted common share (“EPS”) were $0.60 for the current quarter compared to $0.72 for the comparable quarter one year ago and $0.78 for the preceding quarter.  Net income for the quarter ended March 31, 2020 was reduced by a $2.00 million provision to the loan loss reserve due to the economic uncertainties associated with the COVID-19 pandemic.  This provision reduced the quarter’s EPS approximately $0.19 and increased the allowance for loan losses to 1.29% of loans receivable from 1.07% at December 31, 2019.For the first six months of fiscal 2020, Timberland earned $11.70 million, or $1.38 per diluted common share, compared to net income of $11.73 million, or $1.39 per diluted common share, for the first six months of fiscal 2019.Timberland’s Board of Directors declared a quarterly cash dividend to shareholders of $0.20 per common share payable on May 29, 2020, to shareholders of record on May 15, 2020.“Staff efforts in March and April were primarily dedicated toward working to defer payments for borrowers adversely affected by Washington’s shelter-in-place proclamation, processing and booking Paycheck Protection Program (“PPP”) loans and managing a significant increase in residential mortgage loan refinance activity,” commented Michael Sand, President and CEO.  “Timberland’s strong profitability and earnings retention over many years has significantly strengthened the Company’s capital base.  With a Tier 1 leverage capital ratio of 12.75% and a tangible common equity to tangible assets ratio of 12.33% we are confident of persevering and managing through these unprecedented and challenging economic times. The Company holds substantial on balance sheet liquidity and has ready access to ample external, and currently inexpensive, sources of liquidity, if needed.”“In late March we received our first requests for payment deferrals from businesses that had been adversely affected by operating restrictions brought on by the Coronavirus.  Staff worked diligently with borrowers to provide initial 90-day payment deferrals with interest continuing to accrue or scheduled to be paid monthly.  Depending on the timing of operating restriction relief in Washington State, extensions to the initial payment deferral periods for customers operating in certain business segments may be warranted.  We will continue to monitor our loan portfolio diligently in light of the significant impact the Coronavirus has had on business and commercial clients in our local market areas.  We have added a schedule of commercial real estate credits by type and a summary of loan payment deferrals later in this release.  During April we obtained SBA approval for approximately 570 PPP applicants with loan requests aggregating to approximately $99.1 million.  The funding of PPP loans approved from this first SBA allocation was completed on April 25, 2020 providing needed financial support to many small businesses in our communities.  The opportunity for consumers to lock in long-term low interest rate residential mortgage loans has not gone unnoticed.  As a consequence, we have seen a significant uptick in one- to four-family residential refinancing requests, the majority of which are conforming and destined for sale to the Federal Home Loan Mortgage Corporation.”“During the quarter Timberland repurchased 56,601 shares of stock before making the decision on March 16, 2020 to temporarily suspend further buyback activity.  Upon due deliberation and thoughtful consideration Timberland’s directors declared a regular $0.20 divided as noted above.”   Second Fiscal Quarter 2020 Earnings and Balance Sheet Highlights (at or for the period ended March 31, 2020, compared to December 31, 2019, or March 31, 2019):   Earnings Highlights:Net income for the first six months of fiscal 2020 was $11.70 million compared to $11.73 million for the first six months of fiscal 2019; EPS was $1.38 for the first six months of fiscal 2020 compared to $1.39 for the first six months of fiscal 2019;Net income (after a $2.00 million provision for loan losses) was $5.05 million for the current quarter compared to $6.11 million for the comparable quarter one year ago and $6.65 million for the preceding quarter;  EPS was $0.60 for the current quarter compared to $0.72 for the comparable quarter one year ago and $0.78 for the preceding quarter;Return on average equity and return on average assets for the current quarter were 11.39% and 1.56%, respectively;Net interest margin was 4.27% for the current quarter compared to 4.51% for the comparable quarter one year ago and 4.43% for the preceding quarter; andEfficiency ratio was 50.04% for the current quarter compared to 55.66% for the comparable quarter one year ago and 49.43% for the preceding quarter.   Balance Sheet Highlights:Total assets increased 7% year-over-year and 4% from the prior quarter;Total deposits increased 5% year-over-year and 4% from the prior quarter;Net loans receivable increased 4% year-over-year and decreased 1% from the prior quarter; andBook and tangible book (non-GAAP) values per common share increased to $21.42 and $19.38, respectively, at March 31, 2020.Operating Results