Timberland Bancorp Reports $8.22 Million Net Income for Q1 Fiscal 2026

Timberland Bancorp, Inc. reported a net income of $8.22 million for the first quarter of fiscal 2026, reflecting a 19.8% increase from $6.86 million in the same period last year. This growth translated to a diluted earnings per share of $1.04, up from $0.86 in the prior year. The increase in profitability was primarily driven by an $1.98 million rise in net interest income, which reached $18.95 million, alongside a modest increase in non-interest income. The company’s total interest and dividend income rose to $27.20 million, a 7.7% increase compared to the previous year, largely due to higher yields on loans and an increase in average interest-bearing deposits.

In terms of financial position, Timberland Bancorp's total assets decreased slightly by $6.65 million, or 0.3%, to $2.01 billion as of December 31, 2025, compared to $2.01 billion at the end of September 2025. This decline was attributed to reductions in investment securities and net loans receivable, which fell by $4.76 million to $1.46 billion. The decrease in loans was primarily due to declines in construction and land loans, although there were increases in one- to four-family and multi-family loans. Total deposits also saw a decrease of $12.15 million, or 0.7%, to $1.70 billion, driven by declines in non-interest-bearing demand deposits and certificates of deposit.

The company’s shareholders’ equity increased by $5.80 million, or 2.2%, to $268.41 million, bolstered by the net income earned during the quarter, despite the impact of dividend payments and stock repurchases. The allowance for credit losses (ACL) on loans stood at $18.13 million, reflecting a slight increase from the previous quarter. The company recorded a recapture of credit losses of $35,000 for the quarter, indicating a positive trend in asset quality, with non-accrual loans decreasing to $4.28 million.

Operationally, Timberland Bancorp continues to focus on its core lending activities, primarily in real estate-secured loans. The company has maintained a loan-to-deposit ratio of approximately 85.59%, indicating a disciplined approach to loan growth funded by core deposits. The bank's liquidity position remains strong, with a regulatory liquidity ratio of 16.90% as of December 31, 2025. The company also has access to significant borrowing capacity through the Federal Home Loan Bank, which supports its lending and operational needs.

Looking ahead, Timberland Bancorp anticipates continued growth in its loan portfolio, supported by favorable market conditions and strategic initiatives. The company remains committed to managing its capital effectively while returning value to shareholders through dividends and stock repurchases. The management is optimistic about maintaining its well-capitalized status and navigating the evolving economic landscape, which includes potential challenges related to interest rate fluctuations and market conditions.