Hoquiam-based Timberland Bancorp has reported net income of $876,000 for the quarter ended June 30, bringing net income for the first nine months of its fiscal year to $3.86 million.
Timberland’s Board of Directors also declared a quarterly cash dividend of three cents per common share payable on Aug. 23, to shareholders of record on Aug. 9.
“Results for the quarter ended June 30, 2013 included a significant improvement in asset quality with non-accrual and delinquent loans decreasing by 44 percent during the quarter and 61 percent year-over-year,” said Michael R. Sand, President and Chief Executive Officer. “Non-performing assets decreased 22 percent during the quarter and net interest margin increased from both the prior quarter and year-over-year partly as a result of loans totaling approximately $6 million returning to an accrual basis during the quarter based on their performance.”
“Core earnings remain strong although third quarter net income was impacted by $1.6 million in net charge-offs of which $1.3 million was attributable to the results of the reappraisal of a commercial land parcel in Kitsap County that was acquired through foreclosure during the quarter,” Sand also stated.
Fiscal Third Quarter 2013 highlights include:
• Net income to common shareholders for the first nine months of fiscal 2013 increased 26% to $3.32 million from $2.64 million for the first nine months of fiscal 2012;
• Earnings per diluted common share for the first nine months of fiscal 2013 increased to 48 cents from 39 cents for the first nine months of fiscal 2012;
• Total delinquent and non-accrual loans decreased 44 percent during the quarter and 61% year-over-year;
• Non-performing assets decreased 22 percent during the quarter;
• Net interest margin for the current quarter increased to 3.88 percent from 3.83 percent for the preceding quarter;
The company reports total risk-based capital ratio of 16.42 percent, a Tier 1 leverage capital ratio of 11.55 percent and a tangible capital to tangible assets ratio of 11.48 percent as of June 30.
Timberland provisioned $1.39 million to its loan loss allowance during the quarter ended June 30, 2013 compared to $1.18 million in the preceding quarter and $900,000 in the comparable quarter one year ago. Net charge-offs for the third fiscal quarter of 2013 were $1.57 million compared to $1.63 million for the preceding quarter and $1.56 million for the comparable quarter one year ago. For the first nine months of fiscal 2013, the provision for loan losses was $2.76 million compared to $2.60 million one year ago. Timberland’s allowance for loan losses to total loans was 2 percent at June 30, compared to 2.03 percent at March 31, and 2.11 percent at June 30 a year ago.
Total delinquent loans and non-accrual loans decreased 44 percent to $13.6 million as of June 30 from $24.2 million as of March 31, and decreased 61 percent from $34.7 million one year ago.
In the category of “other real estate owned” and other repossessed assets increased $283,000 to $15.3 million as of June 30, from $15 on March 31, and increased $5.3 million from $10 million on June 30 a year ago. As of June 30, the portfolio consisted of 51 individual properties. The properties consisted of commercial real estate properties totaling $6.1 million, land parcels totaling $5.2 million, multi-family properties totaling $2.4 million and single family homes totaling $1.6 million.
Balance Sheet Management
Total assets decreased by $5.3 million, or 1 percent, to $732.8 million as of June 30, from the quarter before. The decrease in total assets was primarily due to a $3.3 million decrease in cash and cash equivalents and a $1.5 million decrease in net loans receivable.
Timberland says it has continued to reduce its exposure to land development and land loans. The bank’s land loan portfolio decreased 23 percent to $31.7 million as of June 30, 2013 compared to one year ago.