Timberland Bancorp(TSBK) - 2019 Q2 - Quarterly Report

Financial Position - Total assets increased by $222.28 million, or 21.8%, to $1.24 billion at March 31, 2019, primarily due to the South Sound Merger[153] - Net loans receivable rose by $147.89 million, or 20.4%, to $873.28 million at March 31, 2019, driven by loans acquired in the South Sound Merger[154] - Total deposits increased by $182.09 million, or 20.5%, to $1.07 billion at March 31, 2019, largely due to deposits acquired in the South Sound Merger[155] - Shareholders' equity grew by $37.68 million, or 30.2%, to $162.34 million at March 31, 2019, mainly from common stock issued in the South Sound Merger[156] - Cash and cash equivalents and CDs held for investment increased by $28.17 million, or 13.3%, to $240.32 million at March 31, 2019, due to the South Sound Merger[157] - Investment securities rose by $30.48 million, or 218.2%, to $44.44 million at March 31, 2019, primarily from securities acquired in the South Sound Merger[158] Profitability - Net income increased by $3.85 million, or 48.8%, to $11.73 million for the six months ended March 31, 2019 from $7.88 million for the same period in 2018[174] - Net interest income increased by $6.01 million, or 31.6%, to $25.07 million for the six months ended March 31, 2019 from $19.06 million for the same period in 2018[179] - Total interest and dividend income increased by $6.83 million, or 33.6%, to $27.16 million for the six months ended March 31, 2019, from $20.32 million for the same period in 2018[180] - Net interest income for the six months ended March 31, 2019, was $25.072 million, compared to $19.058 million for the same period in 2018[185] Loan Performance - The provision for loan losses is influenced by changes in the loan portfolio and economic conditions, reflecting the Company's assessment of credit losses[148] - Non-accrual loans increased by $1.43 million, or 108.4%, to $2.75 million at March 31, 2019, from $1.32 million at September 30, 2018[188] - Total delinquent loans increased by $1.02 million, or 39.9%, to $3.58 million at March 31, 2019, from $2.56 million at September 30, 2018[188] - The allowance for loan losses was $9.74 million at March 31, 2019, representing 1.10% of loans receivable and 354.9% of non-performing loans[193] Efficiency and Expenses - Total non-interest expense increased by $2.06 million, or 28.5%, to $9.28 million for the quarter ended March 31, 2019, driven by increases in salaries and employee benefits[195] - The efficiency ratio improved to 55.66% for the quarter ended March 31, 2019, compared to 56.83% for the same quarter last year[197] - The provision for income taxes increased by $61,000, or 5.0%, to $1.28 million for the quarter ended March 31, 2019[198] Capital and Liquidity - The Bank's regulatory liquidity ratio was 25.05% at March 31, 2019[201] - The Bank's Tier 1 capital was $143.202 million, with a leverage capital ratio of 11.96% at March 31, 2019[206] Asset Quality - The non-performing assets to total assets ratio was 0.41% at March 31, 2019 compared to 0.36% at September 30, 2018[170] - The average cost of interest-bearing liabilities increased to 0.55% for the six months ended March 31, 2019, from 0.40% for the same period in 2018[182] Loan Activity - Loan originations increased by $9.35 million, or 5.8%, to $170.86 million for the six months ended March 31, 2019 from $161.51 million for the same period in 2018[161] - Average loans receivable increased by $155.94 million, or 21.9%, and average investment securities increased by $26.09 million, or 336.0%[180] Interest Rates - The average yield on interest-earning assets increased to 4.90% for the quarter ended March 31, 2019 from 4.48% for the same period in 2018[178] - The net interest margin (NIM) increased to 4.51% for the quarter ended March 31, 2019, from 4.19% for the same quarter in 2018[183] - For the six months ended March 31, 2019, the NIM increased to 4.49% from 4.19% for the same period in 2018[185] Other Income - Non-interest income for the three and six months ended March 31, 2019 included service charges on deposit accounts and gain on sales of loans[149] - Total non-interest income increased by $858,000, or 27.8%, to $3.94 million for the quarter ended March 31, 2019, primarily due to a $1.02 million increase in BOLI net earnings[193]