HOQUIAM, Wash., July 28, 2026 (GLOBE NEWSWIRE) -- Timberland Bancorp, Inc. (NASDAQ: TSBK) (“Timberland” o la “Company”), la sociedad tenedora de Timberland Bank (el “Bank”), informó un ingreso neto de $7.72 million, o $0.98 por acción común diluida, para el trimestre finalizado el June 30, 2026. Eso se comparó con un ingreso neto de $7.10 million, o $0.90 por acción común diluida, en el mismo trimestre de un año antes y $7.13 million, o $0.90 por acción común diluida, en el trimestre anterior.

Para los primeros nueve meses del fiscal 2026, el ingreso neto aumentó 11% a $23.07 million, o $2.92 por acción común diluida, desde $20.72 million, o $2.60 por acción común diluida, en los primeros nueve meses del fiscal 2025.

“Timberland delivered another strong quarter, with net income and earnings per share up 8% and 9%, respectively, from the prior quarter, and up 9% from the year ago quarter,” dijo Dean Brydon, Chief Executive Officer. “Net interest margin expanded, loan growth was solid, and most of our income-related ratios compared favorably with both the linked-quarter and year-over-year. We remain encouraged by our business model and believe we are well positioned as we head into the end of our fiscal year.”

“As a result of Timberland’s strong earnings and capital position, our Board of Directors announced a 3% increase to the quarterly cash dividend to shareholders of $0.30 per share, payable on August 24, 2026, to shareholders of record on August 10, 2026,” dijo Jonathan Fischer, President and Chief Operating Officer. “This represents the 55th consecutive quarter Timberland will have paid a cash dividend and demonstrates the Board’s continued confidence in our long-term outlook.”

“Overall, this was a relatively clean quarter from an earnings standpoint, with minimal non-recurring items impacting results,” dijo Marci Basich, Chief Financial Officer. “Net interest margin improved this quarter, up four basis points after a modest decline last quarter and improved five basis points year-over-year. Our balance sheet positioning and proactive deposit pricing strategies continue to help mitigate the headwinds of the current interest rate environment. On the deposit side, total deposits grew 1% from the prior quarter and 6% year over year. Maintaining a disciplined funding mix and stable margin will remain a top priority going forward.”

“Net loans were up 3% from the prior quarter and 4% year-over-year,” Brydon añadió. “Even with a shifting rate environment, demand across our lending categories has remained healthy. Credit quality held steady with modest improvements in non-performing asset levels, delinquency levels, and substandard loan levels. Our markets continue to offer solid growth opportunities, and we remain confident in the quality of our loan portfolio and our disciplined approach to credit risk management.”

Earnings and balance sheet highlights

For the quarter ended June 30, 2026, earnings per diluted common share (“EPS”) increased 9% to $0.98 from $0.90 in the comparable quarter one year ago and from $0.90 in the preceding quarter. EPS increased 12% to $2.92 for the first nine months of fiscal 2026 from $2.60 in the first nine months of fiscal 2025.

Net income rose 9% to $7.72 million from $7.10 million in the comparable quarter one year ago and increased 8% from $7.13 million in the preceding quarter. For the first nine months of fiscal 2026, net income increased 11% to $23.07 million from $20.72 million in the first nine months of fiscal 2025.

Return on average equity (“ROE”) and return on average assets (“ROA”) for the quarter were 11.42% and 1.51%, respectively. Net interest margin (“NIM”) increased to 3.85% from 3.80% in the comparable quarter one year ago and 3.81% in the preceding quarter. The efficiency ratio improved to 53.40% from 54.48% in the comparable quarter one year ago and 55.37% in the preceding quarter.

On the balance sheet, total assets increased 1% from the prior quarter and 5% year over year. Net loans receivable increased 3% from the prior quarter and 4% year over year. Total deposits increased 1% from the prior quarter and 6% year over year. Total shareholders’ equity increased 1% from the prior quarter and 6% from a year earlier. During the quarter, Timberland repurchased 70,000 shares of common stock for $2.83 million.

The non-performing assets to total assets ratio was 0.43% at June 30, 2026, compared with 0.47% at March 31, 2026 and 0.21% at June 30, 2025. Book value per common share rose to $35.16, and tangible book value per common share, a non-GAAP measure, increased to $33.19. Liquidity remained strong at June 30, 2026, with only $10 million in borrowings and additional secured borrowing line capacity of $791 million available through the Federal Home Loan Bank (“FHLB”) and the Federal Reserve.

Operating results

Operating revenue, defined as net interest income before the provision for credit losses plus non-interest income, increased 4% to $21.79 million from $21.05 million in the preceding quarter and rose 6% from $20.50 million in the same quarter a year ago. The quarterly increase was mainly driven by higher interest income on loans receivable and, to a lesser extent, higher non-interest income, partially offset by increased interest expense on deposits. For the first nine months of fiscal 2026, operating revenue rose 7% to $64.56 million from $60.06 million in the same period of fiscal 2025, primarily due to increases in interest income on loans receivable, interest income on interest-bearing deposits in banks and non-interest income, partly offset by lower interest income from investment securities.

Net interest income increased $562,000, or 3%, to $18.81 million from $18.24 million in the preceding quarter and rose $1.18 million, or 7%, from $17.62 million in the same quarter a year earlier. The linked-quarter increase was mainly due to a $14.62 million increase in average interest-earning assets, a five-basis-point increase in the weighted average yield on interest-bearing assets, and, to a lesser extent, a two-basis-point decrease in the weighted average cost of interest-bearing liabilities. For the first nine months of fiscal 2026, net interest income increased $4.19 million, or 8%, to $56.00 million from $51.81 million in the first nine months of fiscal 2025, primarily due to a $99.58 million increase in average interest-earning assets and a 15-basis-point decrease in the weighted average cost of interest-bearing liabilities.

Timberland’s NIM increased to 3.85% from 3.81% in the preceding quarter and 3.80% in the comparable quarter one year ago. The current-quarter NIM benefited by approximately two basis points from the collection of $82,000 in pre-payment penalties, non-accrual interest and late fees, as well as the accretion of $8,000 of the fair value discount on acquired loans. The preceding quarter’s NIM benefited by approximately one basis point from the collection of $38,000 in pre-payment penalties, non-accrual interest and late fees, and the accretion of $10,000 of the fair value discount on acquired loans. The comparable quarter one year ago benefited by approximately four basis points from the collection of $102,000 in pre-payment penalties, non-accrual interest and late fees, and the accretion of $68,000 of the fair value discount on acquired loans. For the first nine months of fiscal 2026, NIM expanded to 3.84% from 3.74% in the first nine months of fiscal 2025.

A provision for credit losses on loans of $600,000 was recorded in the quarter ended June 30, 2026, primarily reflecting loan portfolio growth and changes in portfolio composition. That compared with a $523,000 provision in the preceding quarter and a $351,000 provision in the comparable quarter one year ago.

Non-interest income increased $181,000, or 6%, to $2.99 million from $2.81 million in the preceding quarter and rose $113,000, or 4%, from $2.88 million in the same quarter one year earlier. The linked-quarter increase was mainly due to a $91,000 increase in BOLI net earnings, a $62,000 increase in ATM and debit card interchange fees, and smaller gains in several other categories, partially offset by an $86,000 decline in net gain on sales of loans. For the first nine months of fiscal 2026, non-interest income increased 4% to $8.56 million from $8.26 million in the same period of fiscal 2025.

Total operating expenses decreased $21,000, or less than 1%, to $11.64 million from $11.66 million in the preceding quarter and increased $471,000, or 4%, from $11.17 million in the comparable quarter one year ago. The slight decrease from the preceding quarter was mainly due to lower salary and employee benefits expense and lower technology and communications expense, along with smaller changes in other categories. The efficiency ratio improved to 53.40% from 55.38% in the preceding quarter and 54.48% in the same quarter one year ago. For the first nine months of fiscal 2026, operating expenses increased 4% to $34.73 million from $33.43 million in the first nine months of fiscal 2025.

Income tax expense rose $190,000, or 11%, to $1.93 million from $1.74 million in the preceding quarter, primarily due to higher taxable income. The effective income tax rate was 20.0% for the quarter ended June 30, 2026, compared with 19.6% in the quarter ended March 31, 2026 and 20.1% in the quarter ended June 30, 2025. For the first nine months of fiscal 2026, the effective income tax rate was 20.0%, compared with 20.1% in the first nine months of fiscal 2025.

Balance sheet management

Total assets increased $14.44 million, or 1%, during the quarter to $2.06 billion at June 30, 2026, from $2.05 billion at March 31, 2026, and increased $103.63 million, or 5%, from $1.96 billion a year earlier. The quarterly increase was mainly attributable to higher net loans receivable and bank owned life insurance, partially offset by lower cash and cash equivalents.

Liquidity

Timberland said it continued to maintain a strong liquidity position, both on-balance sheet and off-balance sheet. Liquidity, measured as the sum of cash and cash equivalents, CDs held for investment and available-for-sale investment securities, was 19.3% of total liabilities at June 30, 2026, compared with 22.1% at March 31, 2026 and 17.0% one year earlier. The company also had $791 million of secured borrowing line capacity available through the FHLB and the Federal Reserve at June 30, 2026. Timberland said that, with a strong and diversified deposit base, only 17% of deposits were uninsured or uncollateralized at June 30, 2026, excluding public deposits that are fully collateralized.

Loans

Net loans receivable increased $44.77 million, or 3%, during the quarter to $1.50 billion at June 30, 2026, from $1.45 billion at March 31, 2026, and increased $54.16 million, or 4%, from $1.44 billion a year earlier. The quarterly increase was primarily driven by a $35.26 million increase in commercial real estate loans and a $30.48 million increase in construction loans, along with smaller increases in several other categories. Those gains were partially offset by an $11.58 million decrease in one- to four-family loans, a $9.70 million increase in the undisbursed portion of construction loans in process, and smaller changes in other categories.

Timberland originated $133.67 million in loans during the quarter ended June 30, 2026, compared with $71.12 million in the preceding quarter and $81.99 million in the comparable quarter one year ago. The company also continues to originate fixed-rate one- to four-family mortgage loans, some of which are sold into the secondary market for asset-liability management purposes and to generate non-interest income. During the current quarter, fixed-rate one- to four-family mortgage loans totaling $7.83 million were sold, compared with $11.36 million in the preceding quarter and $5.11 million in the comparable quarter one year ago.

Investment securities and BOLI

Investment securities and CDs held for investment increased $863,000, or less than 1%, to $216.89 million at June 30, 2026, from $216.03 million at March 31, 2026. The increase was primarily due to purchases of additional CDs and U.S. government agency mortgage-backed investment securities, partly offset by maturities of U.S. Treasury securities and scheduled amortization.

Bank owned life insurance (“BOLI”) increased $15.25 million, or 69%, to $37.39 million at June 30, 2026, from $22.14 million at March 31, 2026, mainly because Timberland purchased $15.00 million in additional BOLI policies during the quarter.

Deposits, borrowings and capital

Total deposits increased $20.34 million, or 1%, during the quarter to $1.76 billion at June 30, 2026, from $1.74 billion at March 31, 2026, and increased $94.07 million, or 6%, from $1.67 billion a year earlier. The quarterly increase included gains of $7.00 million in certificates of deposit balances, $5.56 million in money market balances, $4.09 million in NOW account balances, $2.99 million in non-interest-bearing deposits and $700,000 in savings balances.

Total borrowings declined $10.00 million, or 50%, to $10.00 million at June 30, 2026, from $20.00 million at March 31, 2026 and June 30, 2025.

Total shareholders’ equity increased $2.12 million, or 1%, to $273.21 million at June 30, 2026, from $271.09 million at March 31, 2026, and increased $16.54 million, or 6%, from $256.66 million a year earlier. The increase was mainly due to net income of $7.72 million and $140,000 in proceeds from stock option exercises, partially offset by $2.27 million in dividends, the repurchase of 70,000 shares of common stock for $2.83 million at an average price of $40.49 per share, and an $817,000 increase in accumulated other comprehensive loss.

At June 30, 2026, Timberland had 157,977 shares available for repurchase under its existing stock repurchase plan.

The company said it remained well capitalized, with a total risk-based capital ratio of 20.87%, a Tier 1 leverage capital ratio of 12.82%, a tangible common equity to tangible assets ratio of 12.61% and a shareholders’ equity to total assets ratio of 13.26% at June 30, 2026. Timberland’s held-to-maturity investment securities totaled $117.59 million at June 30, 2026 and carried a net unrealized pre-tax loss of $4.37 million. If those unrealized losses were included in accumulated other comprehensive income (loss), the shareholders’ equity to total assets ratio would have been 13.11%.

Asset quality

Timberland’s non-performing assets to total assets ratio was 0.43% at June 30, 2026, compared with 0.47% at March 31, 2026 and 0.21% at June 30, 2025. Net recoveries were $1,000 in the current quarter, compared with net charge-offs of less than $1,000 in the preceding quarter and net recoveries of $1,000 in the comparable quarter one year ago.

During the quarter, the company recorded a $600,000 provision for credit losses on loans, offset by a $91,000 recapture of credit losses on unfunded commitments and a $1,000 recapture of credit losses on investment securities. The allowance for credit losses (“ACL”) for loans as a percentage of loans receivable was 1.27% at June 30, 2026, unchanged from March 31, 2026 and up from 1.23% a year earlier.

Total delinquent loans, defined as past due 30 days or more, and non-accrual loans decreased $1.69 million, or 16%, to $8.71 million at June 30, 2026, from $10.40 million at March 31, 2026, and increased $2.54 million, or 41%, from $6.17 million at June 30, 2025. Non-accrual loans decreased $849,000, or 9%, to $8.56 million from $9.41 million at March 31, 2026, and increased $4.71 million, or 123%, from $3.84 million a year earlier. Loans graded “Substandard” decreased $874,000, or 9%, to $8.66 million from $9.54 million at March 31, 2026 and declined $23.71 million, or 73%, from $32.37 million at June 30, 2025.

Timberland said it had two properties classified as other real estate owned (“OREO”) at June 30, 2026.

About Timberland Bancorp, Inc.

Timberland Bancorp, Inc., a Washington corporation, is the holding company for Timberland Bank. The Bank opened for business in 1915 and serves consumers and businesses across Grays Harbor, Thurston, Pierce, King, Kitsap and Lewis counties in Washington through 24 branches, including its main office in Hoquiam.

Forward-looking statements

The company said certain matters discussed in the press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to financial condition, results of operations, plans, objectives, future performance or business and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied.

Timberland said it does not undertake any obligation to publicly update or revise forward-looking statements to reflect events or circumstances after the date of the release. The company cautioned readers not to place undue reliance on such statements.

Non-GAAP financial measures

In addition to GAAP results, the press release includes certain non-GAAP financial measures. Timberland said it believes these measures can help investors understand its financial performance, but they should be reviewed together with GAAP results as reported. Financial measures that exclude intangible assets are non-GAAP measures. To provide a broader view of capital adequacy, Timberland presents tangible common equity alongside the GAAP measure. Tangible common equity is calculated as shareholders’ equity less goodwill and CDI, and tangible assets are calculated as total assets less goodwill and CDI.