Timberland Bancorp Inc (TSBK) Reports First Fiscal Quarter Results
Net Income: $6.30 million for the quarter ended December 31, 2023, down from $7.51 million year-over-year.
Earnings Per Share (EPS): $0.77 per diluted share, compared to $0.90 in the same quarter last year.
Net Interest Margin (NIM): Compressed to 3.60% from 4.03% year-over-year.
Loan Growth: Net loans receivable increased by $34 million during the quarter.
Deposits: Total deposits rose by $66 million, reaching $1.63 billion.
Asset Quality: Non-performing assets were 0.18% of total assets, up from 0.12% year-over-year.
Dividend: Quarterly cash dividend increased by $0.01 to $0.24 per share.
On January 22, 2024, Timberland Bancorp Inc (NASDAQ:TSBK) released its 8-K filing, detailing the financial results for the first fiscal quarter ended December 31, 2023. The bank holding company, which offers a wide range of financial services, reported a net income of $6.30 million, or $0.77 per diluted common share. This represents a decrease from the $7.51 million, or $0.90 per diluted common share, reported for the same period in the previous year.
Despite the year-over-year decline in net income, Timberland Bancorp's CEO Dean Brydon expressed satisfaction with the quarter's solid earnings, loan and deposit growth, and tangible book value per share growth. However, he noted that the earnings were lower compared to the year-ago quarter, which was the peak of the company's margin before deposit cost increases began compressing margins.
Financial Performance and Challenges
Timberland Bancorp's net interest margin (NIM) experienced a contraction to 3.60% from 4.03% in the same quarter of the previous year. This was attributed to an increase in the cost of funds outpacing the growth in yields on earning assets. The company's President and COO, Jonathan Fischer, pointed out that the intense competition for deposits and the migration of non-interest bearing deposits into interest-bearing accounts are expected to continue pressuring the margin in the near term.
Financial Achievements and Industry Significance
The company's loan origination volumes remained steady, with net loans receivable increasing by $34 million during the quarter. This growth is significant as it demonstrates the company's ability to expand its lending portfolio in a challenging economic environment. Additionally, the increase in the quarterly cash dividend to $0.24 per share underscores the company's commitment to delivering shareholder value and reflects its strong capital position.
Key Financial Metrics
Timberland Bancorp's balance sheet highlights include a 3% increase in total assets to $1.90 billion and a 4% increase in total deposits to $1.63 billion. The allowance for credit losses on loans increased by $460,000 due to the adoption of the CECL accounting standard. The company's credit quality remains strong, with only $2,000 in net charge-offs for the quarter and non-performing assets constituting just 0.18% of total assets.
Analysis of Company Performance
While Timberland Bancorp has faced margin compression due to rising deposit costs, its ability to grow its loan and deposit base in a potentially slowing economy is commendable. The company's proactive monitoring of credit quality and the modest increase in non-performing assets suggest a resilient portfolio. However, the potential for further economic headwinds and interest rate volatility may continue to pose challenges for the bank.
For a more detailed analysis of Timberland Bancorp Inc's financial performance, including income statements and balance sheets, please visit GuruFocus.com.
Explore the complete 8-K earnings release (here) from Timberland Bancorp Inc for further details.
This article first appeared on GuruFocus.
