Timberland Bancorp, Inc.
Annual Report 2012

Plain-text annual report

Timberland Bancorp, Inc. • •• v ' l ^ l " ^: • -- • • •. • " • % ' . " " : * ," - - • • •- ' . ' ^_ • • • ' • • •• > i' • • .' ->.!.?., Silverdale Ocean Shores Hoquiam Aberdeen (2 branches) Montesano Auburn Edgewood Puyallup Gig Harbor Tacoma Yelm ^Bethel Station (Spana way) Lacey (2 branches) Olympia Chehalis Timberland Bancorp, Inc. Dear Fellow Shareholders of Timberland Bancorp, Inc.: On behalf of the Directors and Employees of Timberland Bancorp, Inc. and its subsidiary, Timberland Bank, it is my privilege to invite you to attend our annual meeting for the year ended September 30, 2012. The meeting will convene on January 22, 2013 at 1:00 p.m. and will be conducted in the Grays Harbor Public Utility's Dennis Nichols building located at 220 Myrtle Street in Hoquiam, Washington. During the meeting we will discuss the Company's operating results for the year ended September 30, 2012, conduct an election of Directors and answer questions from the attendees. I encourage you to review the attached Form 10-K which details the operating results of the Company. Michael R. Sand The Federal Reserve continued its efforts to stimulate the economy this past year and is currently focused on keeping interest rates low through its monthly purchase of billions of dollars of mortgage backed securities. Historians will best judge the overall effectiveness of the Fed's policy actions however the immediate impact is clearly the forcible maintenance of a low interest rate environment for an indefinite period. For the banking industry this focuses the crosshairs directly on margins for the duration of the Fed's accommodative posture. Muting the impact of current Fed policy will involve booking additional quality loans, further managing the cost of deposits and reducing the level of non-earning assets. During the fiscal year ended September 30, 2012, the Company realized a sigmficant increase in profitability compared to the prior fiscal year. Net interest income and non-interest income increased while total non-interest expenses and the provision for loan losses decreased. The result was an increase in net income to $4-59 million for the recently completed fiscal year from $1.09 million for the prior fiscal year and an increase in net income available to common shareholders to $3.52 million from $32 thousand in the prior fiscal year. Timberland continues to be a well-capitalized financial institution producing strong core earnings. At September 30, 2012 the Total Capital to Risk Weighted Asset ratio stood at 16.77% and the Tier 1 Leverage Capital Ratio was 11.66%. We continue to believe that the Pacific Northwest provides an enviable economic environment in which to operate and we look forward to the new fiscal year. We also look forward to your presence at our annual meeting on January 22nd. Sincerely, Michael R. Sand President and CEO FINANCIAL HIGHLIGHTS TIMBERLAND BANCORP, INC. AND SUBSIDIARY The following table presents selected financial inforination concerning the consolidated financial position and results of operations of Timberland Bancorp, Inc. ("Company") at and for the dates indicated. The consolidated data is derived in part from, and should be read in conjunction with, the Consolidated Financial Statements ofthe Company and its subsidiary presented herein. Total Assets September 30, 2012 2010 (Dollars in thousands except share data) 2011 2012 2011 2010 Loans Receivable and Loans Held for Sale, Net 2012 2011 2010 Total Deposits $597,926 $592,678 2012 2011 2010 Net Income (Loss) SELECTED FINANCIAL DATA Total Assets Loans Receivable and Loans Held for Sale, Net Total Deposits Shareholders' Equity $ 736,954 538,480 597,926 90,319 $ 738,224 528,024 592,678 86,205 $ 742,687 527,591 578,869 85,408 OPERATING DATA Interest and Dividend Income Interest Expense Net Interest Income Provision for Loan Losses Net Interest Income after Provision for Loan Losses Non-Interest Income Non-Interest Expense Income (Loss) before Income Taxes Provision (benefit) for Income Taxes Net Income (Loss) Preferred Stock Dividends Preferred Stock Discount Accretion Net Income (Loss) to Common Shareholders 31,605 5.947 25,658 3,500 22,158 9,781 25,568 6,371 1,781 4,590 (832) (240) 3,518 $ NET INCOME (LOSS) PER COMMON SHARE Basic $ Diluted 0.52 0.52 33,966 8,533 25,433 6,758 18,675 8,681 25,963 1,393 304 1,089 (832) (225) 32 36,596 10,961 25,635 10,550 15,085 5,696 24,641 (3,860) (1,569) (2,291) (832) (210) (3,333) $ 0.00 0.00 $ (0.50) (0.50) $ $ KEY FINANCIAL RATIOS Return (Loss) on Average Assets Retum (Loss) on Average Equity Net Interest Margin Efficiency Ratio Non-Performing Assets to Total Assets Total Equity-to-Assets Book Value Per Common Share Tangible Book Value Per Common Share (2) (1) 0.62% 5.21 3.81 72.15 5.19 12.26 $ 10.52 $ 9.68 0.15% 1.26 3.78 76.11 5.01 11.68 $ 9.97 $ 9.11 (0.32)% (2.65) 3.87 78.65 5.53 11.50 $ 9.89 $ 9.00 2012 2011 2010 (1) Non-performing assets include non-accrual loans, loans past due 90 days or more and still accruing, non-accrual investment securities, other real estate owned and other repossessed assets. (2) Calculation subtracts goodwill and core deposit intangible from the equity component. 2012 FORM lO'K We have included our Form 10-K, as filed with the Securities and Exchange Commission, with our annual report to give you more complete information about our Company. A table of contents can be found facing page one. Written requests to obtain a copy of any exhibit listed in Part IV should be sent to Timberland Bancorp, Inc., 624 Simpson Avenue, Hoquiam, Washington 98550, attention: Investor Relations Department. [This page left blank intentionally] l . - . M, [This page left blank intentionally] DIRECTORS A ND OFFICERS TIMBERLAND BANCORP, INC. OFFICERS: Michael R. Sand President and Chief Executive Officer Dean J. Brydon Executive Vice President Robert A. Drugge Executive Vice President Marci A. Basich Senior Vice President DIRECTORS: Kathie M. Bailey Senior Vice President Jonathan A. Fischer Senior Vice President Edward C. Foster Senior Vice President Jon C. Parker is Chairman of the Board of the Company and the Bank. Mr. Parker is a member of the law firm Parker & Winkelman P.S., Hoquiam, Washington, which serves as general counsel to the Bank and the Company. Michael R. Sand has been affiliated with the Bank since 1977 and has served as President of the Bank and the Company since January 23, 2003. On September 30, 2003, he was appointed as ChiefExecutive Officer of the Bank and Company. Prior to appointment as President and Chief Executive Officer, Mr. Sand had served as Executive Vice President ofthe Bank since 1993 and as Executive Vice President of the Company since its formation in 1997. Andrea M. Clinton, an interior designer, is the owner of AMC Interiors at Home, Olympia, Washington. Larry D. Qoldherg is the retired principal partner of Goldberg Furniture Company, Aberdeen, Washington. James C. Mason is the President and owner of the following companies: Mason Timber Inc., Mason Trucking Inc., Masco Petroleum Inc., Aloha Jet Inc., Mason Aviation, Inc., Trailer Services Inc., Shine Quarry Inc., Mason Properties LLC, Masco Maritime LLC, Grass Island LLC, Masco Oil Warehouse LLC, 110 Commerce Street LLC, 1100 Basich Blvd LLC, 954 Anderson Drive LLC, 2012 Ind Pkwy LLC, 1020 Anderson Dr. LLC, 1104 Basich Blvd LLC, 200 Myrtle LLC and Shelton Renal Care LLC, all ofwhich are headquartered in Western Washington. Ronald A. Robbel is a Certified Public Accountant and is retired. David A. Smith is a pharmacist and the owner of Harbor Drug, Inc., a retail pharmacy located in Hoquiam, Washington. Michael J. Stoney, a Certified Public Accountant, is a member of the accounting firm Easter &. Stoney, P.S., with offices in Elma and Aberdeen, Washington. [This page left blank intentionally] CORPORATE INFORMATION MAIN OFFICE INDEPENDENT AUDITORS 624 Simpson Avenue Hoquiam, Washington 98550 Telephone: (360) 533-4747 GENERAL COUNSEL Parker & Winkelman PS Hoquiam, Washington TRANSFER AGENT Delap LLP Lake Oswego, Oregon SPECIAL COUNSEL Breyer & Associates PC McLean, Virginia For shareholder inquiries concerning dividend checks, transferring ownership, address changes or lost or stolen certificates please contact our transfer agent: American Stock Transfer & Trust Company 59 Maiden Lane New York, New York 10038 (800)937-5449 A N N U AL MEETING The Annual Meeting of Shareholders will be held at the Grays Harbor PUD meeting room known as the Dennis Nichols Building, located at 220 Myrtle Street, Hoquiam, Washington on Tuesday, January 22, 2013 at 1:00 p.m.. Pacific Time. H o q u i am 624 Simpson Ave. Hoquiam, WA 98550 (360)533-4747 O c e an Shores 361 Damon Rd. Ocean Shores, WA 98569 (360)289-2476 D o w n t o wn Aberdeen 117 N.Broadway Aberdeen, WA 98520 (360)533-4500 S o u th Aberdeen 300 N. Boone St. Aberdeen, WA 98520 (360)533-6440 M o n t e s a no 210 S. Main St. Montesano, WA 98563 (360) 249-4021 E l ma 313W.Waldrip Elma, WA 98541 (360) 482-3333 Toledo 101 Ramsey Way Toledo, WA 98591 (360)864-6102 W i n l o ck 209 NE 1st St. Winlock, WA 98596 (360) 785-3552 Chehalis 714 W Main St. Chehalis, WA 98532 (360)740-0770 T u m w a t er 801 Trosper Rd. SW Tumwater, WA 98512 (360) 705-2863 O l y m p ia 423 Washington St. SE Olympia, WA 98501 (360)943-5496 Panorama 1751 Circle Lane SE Lacey, WA 98503 (360)413-3891 www.timberlandbank.com Lacey 1201 Marvin Rd. NE Lacey, WA 98516 (360) 438-1400 Yelm lOlYelmAve.W Yelm, WA 98597 (360)458-2221 Bethel Station 2419 224th St. E. Spanaway,WA 98387 (253) 875-4250 Tacoma 7805 S. Hosmer St. Tacoma, WA 98408 (253) 472-4465 . G ig H a r b or 3105JudsonSt. Gig Harbor, WA 98335 (253)851-1188 Silverdale 2401 NW Bucklin Hill Rd. Silverdale, WA 98383 (360) 337-7727 r Puyallup (South Hill) 12814 Meridian E. Puyallup, WA 98373 (253)841-4980 Poulsbo 20464 Viking Way NW Poulsbo, WA 98370 (360)598-5801 Edgewood ( N o r th Hill) 2418 Meridian E. Edgewood, WA 98371 (253) 845-0999 A u b u rn 202 Auburn Way S. Auburn, WA 98002 (253)804-6177 i Membe I S ra FDIC 

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