Timberland Bancorp, Inc.
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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.
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l . - . M,
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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.
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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
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