Timberland Bancorp Reports 5.6% Increase in Net Income for Q2 Fiscal 2026

Timberland Bancorp, Inc. reported its financial results for the second quarter of fiscal 2026, revealing a net income of $7.13 million, a 5.6% increase from $6.76 million in the same quarter of the previous year. For the six months ending March 31, 2026, net income rose to $15.35 million, up 12.7% from $13.62 million year-over-year. The company attributed this growth primarily to a $1.03 million increase in net interest income and a $120,000 rise in non-interest income, despite facing higher non-interest expenses and provisions for credit losses.

Total assets for Timberland Bancorp increased by $33.61 million, or 1.7%, to $2.05 billion as of March 31, 2026, compared to $2.01 billion at the end of September 2025. This growth was driven by a significant rise in cash and cash equivalents, which increased by $51.24 million, offset by a slight decrease in net loans receivable, which fell by $12.71 million to $1.45 billion. The decline in loans was primarily due to reductions in custom and owner-builder construction loans, land development, and one- to four-family loans, although there were increases in multi-family and speculative one-to-four-family construction loans.

The company’s total deposits also saw an increase, rising by $26.58 million, or 1.5%, to $1.74 billion. This growth was mainly attributed to increases in NOW checking and money market accounts, although there were decreases in non-interest-bearing demand and savings account balances. Shareholders’ equity increased by $8.48 million, or 3.2%, to $271.09 million, primarily due to net income earned during the period, which was partially offset by dividend payments and stock repurchases.

In terms of operational metrics, Timberland Bancorp's net interest income for the quarter was $18.24 million, a 6.0% increase from the previous year, driven by a rise in average interest-earning assets and a decrease in the average cost of interest-bearing liabilities. The net interest margin improved to 3.81% for the quarter, reflecting the impact of lower funding costs. The provision for credit losses was $523,000 for the quarter, up from $246,000 in the prior year, indicating a cautious approach to potential credit risks amid changing economic conditions.

Looking ahead, Timberland Bancorp remains focused on maintaining its capital levels and liquidity to support future growth. The company is well-capitalized under regulatory standards, with a Tier 1 capital ratio of 12.85% as of March 31, 2026. Management continues to monitor market conditions and adjust strategies accordingly, including potential adjustments to dividend policies and stock repurchase programs, to ensure sustainable growth and shareholder value.