Timberland Bancorp (TSBK) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was $5.92 million, up 4% sequentially but down 6.1% year-over-year; net income for the nine months was $17.93 million, down 12.4% from the prior year.

• Total assets increased 3.3% to $1.90 billion at June 30, 2024, driven by higher loans receivable, investment securities available for sale, and cash equivalents.

• Shareholders' equity rose 3.5% year-over-year and 1% sequentially to $241.22 million, reflecting net income, reduced accumulated other comprehensive loss, and stock option exercises, offset by dividends, stock repurchases, and CECL adoption impact.

• Net loans increased 3% from the prior quarter and 11% year-over-year; deposits rose 5% year-over-year but fell 1% sequentially.

• Net interest margin improved to 3.53% from 3.48% in the prior quarter but compressed from 3.94% a year ago.

Financial highlights

• Net interest income for Q3 was $15.98 million, up 2% sequentially but down 3.9% year-over-year; for the nine months, it fell 7.6% to $47.62 million.

• Non-interest income for the quarter was $2.79 million, up 7% sequentially but down 2.9% year-over-year; non-interest expense rose 1.3% to $11.07 million.

• Efficiency ratio increased to 58.97% from 56.01% a year ago but improved from 60.22% in the prior quarter.

• Total interest and dividend income rose 21.4% to $24.14 million for the quarter, but interest expense surged 150.6% to $8.16 million.

• Provision for credit losses was $264,000 for the quarter and $810,000 for the nine months, primarily due to loan growth.

Outlook and guidance

• Management expects to maintain adequate liquidity and well-capitalized status, with no material capital expenditures projected for the remainder of fiscal 2024.

• Management remains optimistic about loan portfolio strength and growth opportunities in core markets.

• Deposit competition is expected to remain strong, potentially impacting future deposit growth.

• Quarterly dividend of $0.24 per share is expected to continue, subject to board discretion, marking 47 consecutive quarters.

• Stock repurchase program remains active, with 192,025 shares available for future purchases.