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Timberland Bancorp Inc. Reports Operating Results (10-K)

December 14, 2009 | About:
10qk

10qk

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Timberland Bancorp Inc. (TSBK) filed Annual Report for the period ended 2009-09-30.

Timberland Bancorp, Inc. was organized for the purpose of becoming the holding company for Timberland Savings Bank. The Savings Bank is a community oriented savings bank which offeres a variety of savings products to its retail customers while concentrating its lending activities on real estate mortgage loans. Timberland Bancorp Inc. has a market cap of $29.03 million; its shares were traded at around $4.12 with and P/S ratio of 0.63. The dividend yield of Timberland Bancorp Inc. stocks is 2.91%. Timberland Bancorp Inc. had an annual average earning growth of 9% over the past 5 years.

Highlight of Business Operations:

Grays Harbor County has a population of 71,000 according to the U.S.

Census Bureau 2008 estimates and a median family income of $54,500 according

to 2009 HUD estimates. The economic base in Grays Harbor has been

historically dependent on the timber and fishing industries. Other industries

that support the economic base are tourism, agriculture, shipping,

transportation and technology. According to the Washington State Employment

Security Department, the unemployment rate in Grays Harbor County increased to

11.9% at September 30, 2009 from 7.5% at September 30, 2008. The median price

of a resale home in Grays Harbor County for the quarter ended September 30,

2009 decreased 13.2% to $134,500 as compared to the quarter one year prior.

The number of home sales decreased 29.5% for the quarter ended September 30,

2009 compared the same quarter one year earlier. The Bank has six branches

(including its home office) located throughout the county. The recent

downturn in Grays Harbor County's economy and the decline in real estate

values have had a negative effect on the Bank's profitability in this market

area.



King County is the most populous county in the state and has a population

of 1.9 million according to the U.S. Census Bureau 2008 estimates. The Bank

has one branch in King County. The county's median family income is $84,300

according to 2009 HUD estimates. King County's economic base is diversified

with many industries including shipping, transportation, aerospace (Boeing),

computer technology and biotech industries. According to the Washington State

Employment Security Department, the unemployment rate for the King County area

increased to 8.8% at September 30, 2009 from 4.6% at September 30, 2008. The

median price of a resale home in King County for the quarter ended September

30, 2009 decreased 10.5% to $382,000, as compared to the same quarter one year

earlier. The number of home sales increased 14.2% for the quarter ended

September 30, 2009 compared to the same quarter one year earlier. The recent

downturn in King County's economy and the decline in real estate values have

had a negative effect on the Bank's profitability in this market area.



At September 30,

-

2009 2008 2007 2006 2005

- - - - -

Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent

- - - - - - - - - -

(Dollars in thousands)



Mortgage Loans:

One- to four-

family(1)....$110,556 18.58% $112,299 18.35% $102,434 17.40% $ 98,709 20.11% $101,763 23.24%

Multi-family.. 25,638 4.31 25,927 4.24 35,157 5.97 17,689 3.60 20,170 4.61

Commercial.... 188,205 31.62 146,223 23.90 127,866 21.72 137,609 28.04 124,849 28.51

Construction

and land.....

development 139,728 23.48 186,344 30.46 186,261 31.64 146,855 29.92 112,470 25.68

Land.......... 65,642 11.03 60,701 9.92 60,706 10.30 29,598 6.03 24,981 5.71

- - - - - - - - - -

Total mortgage

loans....... 529,769 89.02 531,494 86.87 512,424 87.03 430,460 87.70 384,233 87.75



Consumer Loans:

Home equity

and second

mortgage..... 41,746 7.01 48,690 7.96 47,269 8.02 37,435 7.63 32,298 7.38

Other......... 9,827 1.66 10,635 1.73 10,922 1.86 11,127 2.27 9,330 2.13

- - - - - - - - - -

Total consumer

loans....... 51,573 8.67 59,325 9.69 58,191 9.88 48,562 9.90 41,628 9.51

Commercial

business

loans......... 13,775 2.31 21,018 3.44 18,164 3.09 11,803 2.40 12,013 2.74

- - - - - - - - - -

Total loans.. 595,117 100.00% 611,837 100.00% 588,779 100.00% 490,825 100.00% 437,874 100.00%

- = - = - = - = - =



The Bank also offers adjustable-rate mortgage ("ARM") loans. All of the

Bank's ARM loans are retained in its loan portfolio and not sold. The Bank

offers several ARM products which adjust annually after an initial period

ranging from one to five years subject to a limitation on the annual increase

of 2% and an overall limitation of 6%. These ARM products are priced

utilizing the weekly average yield on one year U.S. Treasury securities

adjusted to a constant maturity of one year plus a margin of 2.875% to 4.00%.

Loans tied to the prime rate or to LIBOR indices typically do not have

periodic, or lifetime adjustment limits. Loans tied to these indices normally

have margins ranging up to 3.5%. ARM loans held in the Bank's portfolio do

not permit negative amortization of principal. Borrower demand for ARM loans

versus fixed-rate mortgage loans is a function of the level of interest rates,

the expectations of changes in the level of interest rates and the difference

between the initial interest rates and fees charged for each type of loan.

The relative amount of fixed-rate mortgage loans and ARM loans that can be

originated at any time is largely determined by the demand for each in a

competitive environment. At September 30, 2009, $54.7 million, or 49.4%, of

the Bank's one- to four- family loan portfolio consisted of ARM loans.



At September 30,

-

2009 2008

- -

Outstanding Percent of Outstanding Percent of

Balance Total Balance Total

- - - -

(In thousands)

Custom and owner/builder

construction.............. $ 35,414 25.34% $ 47,168 25.31%

Speculative construction... 16,959 12.14 30,895 16.58

Multi-family (including

condominium).............. 18,800 13.46 40,509 21.74

Land development........... 19,158 13.71 28,152 15.11

Commercial real estate..... 49,397 35.35 39,620 21.26

- - - -

Total.................... $139,728 100.00% $186,344 100.00%

= = = =



Read the The complete ReportTSBK is in the portfolios of Chuck Royce of ROYCE & ASSOCIATES.

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