The Washington bank posted higher net income, a wider net interest margin and solid loan and deposit growth for the quarter ended June 30, while continuing share repurchases and reporting strong liquidity.
Timberland Bancorp reported net income of $7.72 million, or $0.98 per diluted share, for the quarter ended June 30, 2026, up from $7.10 million, or $0.90 per diluted share, a year earlier and from $7.13 million, or $0.90 per diluted share, in the prior quarter. For the first nine months of fiscal 2026, net income rose 11% to $23.07 million, or $2.92 per diluted share, from $20.72 million, or $2.60 per diluted share, a year earlier. Profitability improved across several measures, with return on average assets at 1.51%, return on average equity at 11.42%, net interest margin at 3.85% and the efficiency ratio improving to 53.40%. Net interest income increased to $18.81 million from $18.24 million in the prior quarter and $17.62 million a year earlier, while operating revenue rose to $21.79 million. The bank said total assets increased to $2.06 billion at June 30, 2026, up 1% from the prior quarter and 5% from a year earlier. Net loans receivable climbed 3% sequentially and 4% year over year to $1.50 billion, led by increases in commercial real estate and construction lending. Total deposits rose 1% from the prior quarter and 6% from a year earlier to $1.76 billion. Credit quality showed mixed but generally stable trends. Non-performing assets to total assets improved to 0.43% from 0.47% in the prior quarter, while non-accrual loans fell to $8.56 million from $9.41 million. The allowance for credit losses on loans was 1.27% of loans receivable, unchanged from the prior quarter and up from 1.23% a year earlier. Timberland recorded a $600,000 provision for credit losses on loans, mainly tied to loan growth and portfolio mix. Timberland's board raised the quarterly cash dividend 3% to $0.30 per share, payable on Aug. 24, 2026, to shareholders of record on Aug. 10, 2026. The company said this will mark its 55th consecutive quarter of paying a cash dividend. During the quarter it repurchased 70,000 shares for $2.83 million at an average price of $40.49 per share, leaving 157,977 shares available under its existing repurchase plan. The bank reported total shareholders' equity of $273.21 million at June 30, 2026, with book value per share of $35.16 and tangible book value per share of $33.19. Capital remained strong, including a total risk-based capital ratio of 20.86%, a Tier 1 leverage ratio of 12.82% and a tangible common equity to tangible assets ratio of 12.61%.