TIMBERLAND BANCORP INC
For the period ended Jun 30, 2025. Filed Aug 8, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 8, 2025
TSBK$47.96+0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-09.
0000939057-25-000135
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-08.
0000939057-25-000194
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 133 previous paragraphs and 135 current paragraphs.
66 unchanged; 55 reworded; 13 added; 10 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 10 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
•the impact of inflation and monetary and fiscal policy responses thereto, and their impact on consumer behavior;
Current report
•the effects of a Federal government shutdown, debt ceiling standoff, or other fiscal policy uncertainty;
Current report
•legislation or regulatory changes, including but not limited to shifts in capital requirements, banking, securities and tax laws, or consumer protection laws;
Current report
•vulnerabilities in information systems or third-party service providers, including disruptions, breaches, or attacks;
Current report
•the ability to adapt to rapid technological changes, including advancements in artificial intelligence, digital banking, and cybersecurity;
Current report
Premises and Equipment: Premises and equipment increased by $4,000, or less than 1%, to $21.49 million at both June 30, 2025 and September 30, 2024. The modest increase reflects capitalized additions related to facility improvements and equipment purchases during the period, which were largely offset by scheduled depreciation expense.
Current report
Other Assets: Other assets increased $1.05 million, or 16.87% to $7.30 million at June 30, 2025 from $6.24 million at September 30, 2024. This was due to a $724,000 balance due from the SBA and a $397,000 increase in federal income tax benefit.
Current report
The shift in the deposit mix toward higher-cost funding sources, such as certificates of deposits, reflects continued competitive pricing pressures in the market and customer preferences for higher-yielding deposit products amid the current interest rate environment. Conversely, balances in non-interest-bearing and money market accounts declined, contributing to a modest increase in the Company’s overall cost of deposits.
Current report
At June 30, 2025, the loan-to-deposit ratio was approximately 86.39%, unchanged from September 30, 2024, reflecting continued disciplined loan growth largely funded by core deposit activity. Management continues to monitor deposit pricing and mix in the context of liquidity management and efforts to support net interest income and profitability.
Current report
Substandard loans increased $23.94 million to $32.37 million at June 30, 2025 from $8.43 million at September 30, 2024. As of June 30, 2025, substandard loans are 1.55% of total loans receivable. The increase is primarily a result of downgrading three relationships that were previously classified watch and special mention. The loans are not classified as non-accrual and were performing according to their repayment terms.
Current report
Total interest and dividend income increased $5.88 million, or 8.42%, to $75.67 million for the nine months ended June 30, 2025 from $69.79 million for the nine months ended June 30, 2024, primarily due to increases in the average yield and average balance of loans receivable, the average balance of interest bearing deposits in bank and CDs held for investment and a higher average yield on investment securities. These increases were partially offset by a decrease in the average balance of investment securities and a decrease in the average yield on interest-bearing deposits in banks and CDs held for investment.
Current report
Total interest expense increased by $1.69 million, or 7.6%, to $23.86 million for the nine months ended June 30, 2025 from $22.17 million for the nine months ended June 30, 2024. The increase in interest expense was due to an increase in the average cost of interest bearing liabilities and an increase in the average balance of interest-bearing liabilities. The average balance of interest-bearing liabilities increased $58.86 million, or 4.9%, to $1.26 billion for the nine months ended June 30, 2025 from $1.20 billion for the nine months ended June 30, 2024, primarily due to increases in the average balances of certificates of deposit and money market accounts, partially offset by decreases in NOW checking and savings accounts. The average cost of interest-bearing liabilities increased to 2.53% for the nine months ended June 30, 2025 from 2.46% for the nine months ended June 30, 2024.
Current report
Total non-interest income for the nine months ended June 30, 2025 increased 55,000, or 0.7%, to $8.26 million from $8.20 million for the nine months ended June 30, 2024. The modest increase reflects offsetting movements across several components. The primary reasons for the increase were a $115,000 increase in gain on sales of loans, a $64,000 increase in servicing income on loans sold and a $32,000 increase in BOLI net earnings. These increases were largely offset by a $100,000 decrease in service charges on deposits, reflecting continued moderation in customer overdraft activity, and a $67,000 decrease in ATM and debit card interchange fees consistent with lower card-based transaction volume.
Removed paragraphs (10)
Previous report
•the impact of inflation and the Federal Reserve monetary policy;
Previous report
•the effects of any Federal government shutdown;
Previous report
•legislative or regulatory changes, including changes in banking, securities and tax law, in regulatory policies and principles, or the interpretation of regulatory capital or other rules;
Previous report
•disruptions or security breaches or other adverse events, failures or interruptions in or attacks on our information technology systems or on the third-party vendors;
Previous report
•the potential for new or increased tariffs, trade restrictions or geopolitical tensions that could affect economic activity or specific industry sectors
Previous report
Premises and Equipment: Premises and equipment decreased by $50,000, or 0.2%, to $21.44 million at March 31, 2025 from $21.49 million at September 30, 2024. This decrease was primarily due to scheduled depreciation.
Previous report
Other Assets: Other assets increased $3.09 million, or 33.4% to $9.33 million at March 31, 2025 from $6.24 million at September 30, 2024. This was due to a $2.00 million investment security that matured but funds had not been received and an increase in the daily prefund deposit for debit card transactions.
Previous report
Total interest and dividend income increased $4.47 million, or 9.79%, to $50.12 million for the six months ended March 31, 2025 from $45.65 million for the six months ended March 31, 2024, primarily due to a $55.11 million increase in the average balance of interest-earning assets, principally loans and interest bearing-deposits in banks and CDs, and an increase in the average yield on interest-earning assets.
Previous report
Total interest expense increased by $1.93 million, or 13.8%, to $15.94 million for the six months ended March 31, 2025 from $14.01 million for the six months ended March 31, 2024. The increase in interest expense was due to an increase in the average cost and an increase in the average balance of interest-bearing liabilities, primarily deposits.
Previous report
Total non-interest income for the six months ended March 31, 2025 decreased $29,000, or 0.5%, to $5.38 million from $5.41 million for the six months ended March 31, 2024. This decrease was primarily due to a $53,000 decrease in service charges on deposits and a $33,000 decrease in ATM and debit card interchange fees. These decreases were partially offset by a $45,000 increase in gain on sale of loans and a $19,000 increase in BOLI net earnings.
Reworded paragraphs (55)
Previous wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to assist in understanding our financial condition and results of operations. The information contained in this section should be read in conjunction with the consolidated financial statements and accompanying notes to the consolidated financial statements contained in Item 1 of this Form 10-Q. The following analysis discusses the material changes in the consolidated financial condition and results of operations of the Company at and for the three and six months ended March 31, 2025.
Current wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to assist in understanding our financial condition and results of operations. The information contained in this section should be read in conjunction with the consolidated financial statements and accompanying notes to the consolidated financial statements contained in Item 1 of this Form 10-Q. The following analysis discusses the material changes in the consolidated financial condition and results of operations of the Company at and for the three and nine months ended June 30, 2025.
Previous wording
"intends," "plans," "targets," "potentially," "probably," "projects," "outlook" or similar expressions or future or conditional verbs such as "may," "will," "should," "would" and "could." Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, assumptions and statements about future economic performance. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause our actual results to differ materially from the results anticipated or implied by our forward-looking statements, including, but not limited to:
Current wording
Certain matters discussed in this Quarterly Report on Form 10-Q may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to our financial condition, results of operations, plans, objectives, future performance or business. Forward-looking statements are not statements of historical fact, are based on certain assumptions and often include the words "believes," "expects," "anticipates," "estimates," "forecasts," "intends," "plans," "targets," "potentially," "probably," "projects," "outlook" or similar expressions or future or conditional verbs such as "may," "will," "should," "would" and "could." Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, assumptions and statements about future economic performance. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause our actual results to differ materially from the results anticipated or implied by our forward-looking statements, including, but not limited to:
Previous wording
•effects of employment levels, labor shortages inflation, a recession or slowed economic growth;
Current wording
•effects of employment levels, labor shortages, inflation, recessionary pressures or slowing economic growth;
Previous wording
•changes in the interest rate environment, including increases or decreases in the Board of Governors of the Federal Reserve System (“Federal Reserve”) benchmark rate and duration of such levels, which could adversely affect our revenues and expenses, the values of our assets and obligations, and the availability and cost of capital and liquidity;
Current wording
•changes in interest rate levels, including actions by the Board of Governors of the Federal Reserve System (“Federal Reserve”), which could adversely affect our revenues and expenses, the values of our assets and obligations, and the availability and cost of capital and liquidity;
Previous wording
•environmental, social and governance goals and targets;
Current wording
•geopolitical developments and international conflicts, including but not limited to tensions or instability in Eastern Europe, the Middle East, and Asia, or the imposition of new or increased tariffs and trade restrictions, which may disrupt financial markets, global supply chains, energy prices, or economic activity in specific industry sectors; environmental, social and governance goals and targets;
Previous wording
•effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, civil unrest, and other external events;
Current wording
•effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, domestic political unrest, and other external events;
Previous wording
Any of the forward-looking statements that we make in this Form 10-Q and in the other public statements we make are based upon management's beliefs and assumptions at the time they are made. We do not undertake and specifically disclaim any obligation to publicly update or revise any forward-looking statements included in this quarterly report to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise.
Current wording
Any of the forward-looking statements that we make in this Form 10-Q and in the other public statements we make are based upon management's beliefs and assumptions at the time they are made. We do not undertake and specifically disclaim any obligation to publicly update or revise any forward-looking statements included in this quarterly report to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking statements discussed in this document might not occur and we caution readers not to place undue reliance on any forward-looking statements. These risks could cause our actual results for fiscal 2025 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of, us, and could negatively affect the Company's consolidated financial condition and results of operations as well as its stock price performance.
Previous wording
Timberland Bancorp, Inc., a Washington corporation, is the holding company for Timberland Bank. The Bank opened for business in 1915 and serves consumers and businesses across Grays Harbor, Thurston, Pierce, King, Kitsap and Lewis counties, Washington with a full range of lending and deposit services through its 23 offices (including its main office in Hoquiam). At March 31, 2025, the Company had total assets of $1.93 billion, net loans receivable of $1.42 billion, total deposits of $1.65 billion and total shareholders’ equity of $252.52 million. The Company's business activities generally are limited to passive investment activities and oversight of its investment in the Bank. Accordingly, the information set forth in this report, including the unaudited consolidated financial statements and related data, relates primarily to the Bank's operations.
Current wording
Timberland Bancorp, Inc., a Washington corporation, is the holding company for Timberland Bank. The Bank opened for business in 1915 and serves consumers and businesses across Grays Harbor, Thurston, Pierce, King, Kitsap and Lewis counties, Washington with a full range of lending and deposit services through its 23 offices (including its main office in Hoquiam). At June 30, 2025, the Company had total assets of $1.96 billion, net loans receivable of $1.44 billion, total deposits of $1.67 billion and total shareholders’ equity of $256.66 million. The Company's business activities generally are limited to passive investment activities and oversight of its investment in the Bank. Accordingly, the information set forth in this report, including the unaudited consolidated financial statements and related data, relates primarily to the Bank's operations.
Previous wording
The provision for (recapture of) credit losses is dependent on changes in the loan portfolio and management’s assessment of the collectability of the loan portfolio as well as prevailing economic and market conditions. The ACL on loans reflects the amount that management has determined is adequate to cover probable expected credit losses in the loan portfolio. As the loan portfolio increases, or due to an increase in probable expected losses inherent in the loan portfolio, the ACL may increase, resulting in a decrease to net interest income after the provision. Improvement in loan risk ratings, increase in property values, or receipts of recoveries of amounts previously charged off may partially or fully offset any required increases to the ACL on loans due to loan growth or an increase in the probable expected credit losses. The Company recorded a provision for credit losses on loans of $237,000 and $289,000 for the three and six months ended March 31, 2025, respectively, primarily due to changes in the composition of the portfolio. The Company recorded a provision for credit losses on loans of $166,000 and $545,000 for the three and six months ended March 31, 2024, respectively.
Current wording
The provision for (recapture of) credit losses is dependent on changes in the loan portfolio and management’s assessment of the collectability of the loan portfolio as well as prevailing economic and market conditions. The ACL on loans reflects the amount that management has determined is adequate to cover probable expected credit losses in the loan portfolio. As the loan portfolio increases, or due to an increase in probable expected losses inherent in the loan portfolio, the ACL may increase, resulting in a decrease to net interest income after the provision. Improvement in loan risk ratings, increase in property values, or receipts of recoveries of amounts previously charged off may partially or fully offset any required increases to the ACL on loans due to loan growth or an increase in the probable expected credit losses. The Company recorded a provision for credit losses on loans of $351,000 and $640,000 for the three and nine months ended June 30, 2025, respectively, due to loan portfolio growth and the annual update of model assumptions. The annual update of model assumptions reflects routine adjustments to key inputs used in the credit loss estimation process, including changes in economic forecasts, historical loss experience, prepayment speeds, and other risk factors that influence expected credit losses under the Company's current expected credit loss (“CECL”) methodology. The Company recorded a provision for credit losses on loans of $264,000 and $810,000 for the three and nine months ended June 30, 2024, respectively.
Previous wording
Net income is also impacted by levels of non-interest income and non-interest expense. For the three and six months ended March 31, 2025, non-interest income consisted primarily of service charges on deposit accounts, gain on sales of loans, ATM and debit card interchange transaction fees, BOLI net earnings, servicing income on loans sold, escrow fees and other operating income. Non-interest income may also be affected by net recoveries on investment securities and the reversal of previously recognized OTTI losses, if applicable. Additionally, it is reduced by valuation allowances on loan servicing rights and increased by recoveries of such allowances, when recognized. Non-interest expense for the same periods primarily included salaries and employee benefits, premises and equipment costs, advertising, ATM and debit card interchange transaction fees, postage and courier expenses, state and local taxes, professional fees, FDIC insurance premiums, loan administration and foreclosure-related expenses, technology and communications expenses, deposit operation expenses, amortization of CDI, and other general operating expenses. In certain periods, non-interest expense may be offset by gains on the sale of premises and equipment or OREO. Both non-interest income and non-interest expense are influenced by the Company’s overall growth and the expansion of its loan and deposit account base.
Current wording
Net income is also impacted by levels of non-interest income and non-interest expense. For the three and nine months ended June 30, 2025, non-interest income consisted primarily of service charges on deposit accounts, gain on sales of loans, ATM and debit card interchange transaction fees, BOLI net earnings, servicing income on loans sold, escrow fees and other operating income. Non-interest income may also be affected by net recoveries on investment securities and the reversal of previously recognized OTTI losses, if applicable. Additionally, it is reduced by valuation allowances on loan servicing rights and increased by recoveries of such allowances, when recognized. Non-interest expense for the same periods primarily included salaries and employee benefits, premises and equipment costs, advertising, ATM and debit card interchange transaction fees, postage and courier expenses, state and local taxes, professional fees, FDIC insurance premiums, loan administration and foreclosure-related expenses, technology and communications expenses, deposit operation expenses, amortization of CDI, and other general operating expenses. In certain periods, non-interest expense may be offset by gains on the sale of premises and equipment or OREO. Both non-interest income and non-interest expense are influenced by the Company’s overall growth and the expansion of its loan and deposit account base.
Previous wording
General: Total assets increased by $9.26 million, or 0.5%, to $1.93 billion at March 31, 2025 from $1.92 billion at September 30, 2024. The increase was primarily due to increases cash and cash equivalents and other assets which were partially offset by decreases in investment securities and in several other asset categories.
Current wording
General: Total assets increased by $33.72 million, or 1.8%, to $1.96 billion at June 30, 2025 from $1.92 billion at September 30, 2024. The increase was primarily due to increases in cash and cash equivalents and loans receivable which were partially offset by decreases in investment securities. The increase in assets was primarily funded by an increase in deposits.
Previous wording
Net loans receivable decreased by $1.45 million, or 0.1%, to $1.42 billion at March 31, 2025 from $1.42 billion at September 30, 2024, primarily due to decreases in construction and commercial business loans as well as smaller decreases in other loan categories. These decreases were partially offset by an increase in one- to four-family loans and smaller increases in other loan categories.
Current wording
Net loans receivable increased by $19.97 million, or 1.4%, to $1.44 billion at June 30, 2025 from $1.42 billion at September 30, 2024, primarily due to increases in multi-family, one- to four-family, commercial real estate, and land loans as well as smaller increases in other loan categories. These increases were partially offset by a decrease in construction and commercial business loans as well as smaller decreases in other loan categories.
Previous wording
Total deposits increased by $3.16 million, or 0.2%, to $1.65 billion at March 31, 2025 from $1.65 billion at September 30, 2024, primarily due to increases in certificates of deposit "CDs" and savings account balances. These increases were partially offset by decreases in money market, non-interest-bearing and NOW checking account balances.
Current wording
Total deposits increased by $21.81 million, or 1.3%, to $1.67 billion at June 30, 2025 from $1.65 billion at September 30, 2024, primarily due to increases in certificates of deposit "CDs" account balances. This increase was partially offset by decreases in money market and non-interest-bearing account balances.
Previous wording
Shareholders’ equity increased by $7.11 million, or 2.9%, to $252.52 million at March 31, 2025 from $245.41 million at September 30, 2024. The increase was primarily due to net income and proceeds from stock option exercises during the current period. These increases were partially offset by the payment of dividends to common shareholders, repurchases of common stock and an other comprehensive loss during the six months ended March 31, 2025.
Current wording
Shareholders’ equity increased by $11.25 million, or 4.6%, to $256.66 million at June 30, 2025 from $245.41 million at September 30, 2024. The increase was primarily due to net income earned during the current period, partially offset by the payment of dividends to common shareholders, and repurchases of common stock during the nine months ended June 30, 2025.
Previous wording
Cash and Cash Equivalents and CDs Held for Investment: Cash and cash equivalents and CDs held for investment increased by $24.99 million, or 14.3%, to $199.92 million at March 31, 2025 from $174.94 million at September 30, 2024. The increase was due to a $26.48 million increase in cash and cash equivalents, resulting primarily from maturities, prepayments and scheduled amortizations of investment securities as well as an increase in deposits. The overall increase was partially offset by a $1.50 million decrease in CDs held for investment.
Current wording
Cash and Cash Equivalents and CDs Held for Investment: Cash and cash equivalents and CDs held for investment increased by $27.15 million, or 15.5%, to $202.09 million at June 30, 2025 from $174.94 million at September 30, 2024. The increase was due to a $28.90 million increase in cash and cash equivalents, resulting primarily from an increase in deposits and maturities, prepayments and scheduled amortizations of investment securities. The overall increase was partially offset by a $1.75 million decrease in CDs held for investment.
Previous wording
Investment Securities: Investment securities (including investments in equity securities) decreased by $18.60 million, or 7.6%, to $226.61 million at March 31, 2025 from $245.22 million at September 30, 2024. This decrease was primarily due to maturities, prepayments and scheduled amortizations. Partially offsetting these decreases was the purchase of additional U.S. government agency mortgage-backed investment securities and U.S. Treasury investment securities, all of which were classified as available for sale. For additional information on investment securities, see Note 2 of the Notes to Unaudited Consolidated Financial Statements contained in “Item 1, Financial Statements.”
Current wording
Investment Securities: Investment securities (including investments in equity securities) decreased by $16.32 million, or 6.7%, to $228.90 million at June 30, 2025 from $245.22 million at September 30, 2024. This decrease was primarily due to maturities, prepayments and scheduled amortizations. Partially offsetting the decrease were purchases of additional U.S. government agency mortgage-backed and U.S. Treasury investment securities. During the quarter ended June 30, 2025, the Bank initiated a partial restructuring of investment securities which resulted in the sale of $13.86 million of US Treasury and mortgage-backed investment securities with an average yield of 3.87% and the purchase of $13.68 million of mortgage-backed investment securities with an average yield of 4.83%. The restructuring resulted in a net gain on sale of investment securities of $24,000. For additional information on investment securities, see Note 2 of the Notes to Unaudited Consolidated Financial Statements contained in “Item 1, Financial Statements.”
Previous wording
Other Investments: Other investments, consisting solely of the Company's investment in the Solomon Hess SBA Loan Fund LLC, was unchanged at $3.00 million at both March 31, 2025 and September 30, 2024. This investment is utilized to help satisfy compliance with the Bank's Community Reinvestment Act investment test requirements.
Current wording
Other Investments: Other investments, consisting solely of the Company's investment in the Solomon Hess SBA Loan Fund LLC, remained unchanged at $3.00 million at both June 30, 2025 and September 30, 2024. This investment is utilized to help satisfy compliance with the Bank's Community Reinvestment Act investment test requirements.
Previous wording
Loans: Net loans receivable decreased by $1.45 million, or 0.1%, to $1.42 billion at March 31, 2025 from $1.42 billion at September 30, 2024. The decrease was primarily due to an $11.02 million decrease in construction loans, including a $5.16 million increase in the undisbursed portion of construction loans, a $7.60 million decrease in commercial business loans, and smaller decreases in other loan categories. These decreases were partially offset by a $16.30 million increase in one- to four-family loans, and smaller increases in other loan categories.
Current wording
Loans: Net loans receivable increased by $19.97 million, or 1.4%, to $1.44 billion at June 30, 2025 from $1.42 billion at September 30, 2024. The increase was primarily due to a $23.06 million increase in multi-family loans, an $18.45 million increase in one- to four-family loans, an $8.71 million increase in commercial real estate loans and, and smaller increases in other loan categories. These increases were partially offset by a $16.52 million decrease in construction loans, a $12.2 million decrease in commercial business loans, a $6.39 million increase in the undisbursed portion of construction loans and smaller decreases in other loan categories.
Previous wording
Loan originations increased by $364,000, or 0.2%, to $128.66 million for the six months ended March 31, 2025 from $128.30 million for the six months ended March 31, 2024. The increase was primarily due to an increase in originations of commercial real estate and construction loans, particularly multi-family construction loans. This increase was partially offset by a decrease in multi-family and commercial business loan originations.
Current wording
Loan originations increased by $8.20 million, or 4.0%, to $210.81 million for the nine months ended June 30, 2025 from $202.62 million for the nine months ended June 30, 2024. The increase was primarily due to an increase in originations of commercial real estate and one- to four-family loans. This increase was partially offset by a decrease in commercial business and construction loan originations.
Previous wording
The Company generally sells longer-term fixed-rate one- to four-family mortgage loans for asset liability management purposes and to generate non-interest income. Sales of fixed-rate one- to four-family loans increased by $1.41 million, or 23.25%, to $7.49 million for the six months ended March 31, 2025 from $6.07 million for the six months ended March 31, 2024, primarily due to an increase in one- to four-family construction loans refinancing to permanent loans and being sold into the secondary market.
Current wording
The Company generally sells longer-term fixed-rate one- to four-family mortgage loans for asset liability management purposes and to generate non-interest income. Sales of fixed-rate one- to four-family loans increased by $4.47 million, or 49.01%, to $13.60 million for the nine months ended June 30, 2025 from $9.12 million for the nine months ended June 30, 2024, primarily due to an increase in one- to four-family construction loans refinancing to permanent loans and being sold into the secondary market.
Previous wording
BOLI (Bank Owned Life Insurance): BOLI increased by $331,000, or 1.4%, to $23.94 million at March 31, 2025 from $23.61 million at September 30, 2024. The increase was due to net BOLI earnings, representing the increase in the cash surrender value of the BOLI policies.
Current wording
BOLI (Bank Owned Life Insurance): BOLI increased by $502,000, or 2.1%, to $24.11 million at June 30, 2025 from $23.61 million at September 30, 2024. The increase was due to net BOLI earnings, representing the increase in the cash surrender value of the BOLI policies.
Previous wording
Goodwill and CDI: The recorded amount of goodwill remained unchanged at $15.13 million at both March 31, 2025 and September 30, 2024. CDI decreased by $90,000, or 20.0%, to $361,000 at March 31, 2025 from $451,000 at September 30, 2024 due to scheduled amortization. For additional information on goodwill and CDI, see Note 3 of the Notes to Unaudited Consolidated Financial Statements contained in “Item 1, Financial Statements.”
Current wording
Goodwill and CDI: The recorded amount of goodwill remained unchanged at $15.13 million at both June 30, 2025 and September 30, 2024. CDI decreased by $135,000, or 29.9%, to $316,000 at June 30, 2025 from $451,000 at September 30, 2024 due to scheduled amortization. For additional information on goodwill and CDI, see Note 3 of the Notes to Unaudited Consolidated Financial Statements contained in “Item 1, Financial Statements.”
Previous wording
Loan Servicing Rights, Net: Loan servicing rights, net decreased by $321,000, or 23.40%, to $1.05 million at March 31, 2025 from $1.37 million at September 30, 2024 primarily due to the amortization of servicing rights. The principal amount of loans serviced for Freddie Mac and the U.S. Small Business Administration decreased by $10.98 million to $359.58 million at March 31, 2025 from $370.56 million at September 30, 2024.
Current wording
Loan Servicing Rights, Net: Loan servicing rights, net decreased by $461,000, or 33.60%, to $911,000 at June 30, 2025 from $1.37 million at September 30, 2024 primarily due to the amortization of servicing rights. The principal amount of loans serviced for Freddie Mac and the U.S. Small Business Administration decreased by $13.05 million to $357.51 million at June 30, 2025 from $370.56 million at September 30, 2024.
Previous wording
Deposits: Deposits increased by $3.16 million, or 0.2%, to $1.65 billion at March 31, 2025 from $1.65 billion at September 30, 2024. The increase was primarily due to a $32.98 million increase in certificates of deposit account balances and a $1.86 million increase in savings account balances. These increases were partially offset by a $26.37 million decrease in money market account balances, and a $5.31 million decrease in non-interest bearing demand account balances.
Current wording
Deposits: Deposits increased by $21.81 million, or 1.32%, to $1.67 billion at June 30, 2025 from $1.65 billion at September 30, 2024. The increase was primarily due to a $48.99 million increase in certificates of deposit account balances and a $1.59 million increase in NOW checking accounts. These increases were partially offset by a $21.72 million decrease in money market account balances, and a $6.89 million decrease in non-interest bearing demand account balances.
Previous wording
FHLB Borrowings: The Company has short- and long-term borrowing lines with the FHLB with total credit available on the lines equal to 45% of the Bank's total assets, limited by available collateral. FHLB borrowings remained unchanged at $20.00 million at both March 31, 2025 and September 30, 2024. The borrowings consist of three long-term borrowings: two totaling $15.00 million with scheduled maturities in May 2026, both bearing interest at 3.95%, and one $5.00 million borrowing maturing in August 2026 with an interest rate of 4.03%.
Current wording
FHLB Borrowings: The Company has short- and long-term borrowing lines with the FHLB with total credit available on the lines equal to 45% of the Bank's total assets, limited by available collateral. FHLB borrowings remained unchanged at $20.00 million at both June 30, 2025 and September 30, 2024. The borrowings consist of three borrowings: two totaling $15.00 million with scheduled maturities in May 2026, both bearing interest at 3.95%, and one $5.00 million borrowing maturing in August 2026 with an interest rate of 4.03%.
Previous wording
Shareholders’ Equity: Total shareholders’ equity increased by $7.11 million, or 2.9%, to $252.52 million at March 31, 2025 from $245.41 million at September 30, 2024. The increase was primarily due to net income of $13.62 million and proceeds of $686,000 from the exercise of stock options. This increase was partially offset by dividend payments to common shareholders of $3.98 million, the repurchase of 89,168 shares of the Company's common stock for $2.79 million and a $690,000 other comprehensive loss for fair value adjustment on available for sale investment securities, resulting from changes in market interest rates during the period..
Current wording
Shareholders’ Equity: Total shareholders’ equity increased by $11.25 million, or 4.6%, to $256.66 million at June 30, 2025 from $245.41 million at September 30, 2024. The increase was primarily due to net income of $20.72 million and proceeds of $817,000 from the exercise of stock options. This increase was partially offset by dividend payments to common shareholders of $6.03 million, the repurchase of 123,404 shares of the Company's common stock for $3.85 million and a $795,000 other comprehensive loss for fair value adjustment on available for sale investment securities, resulting from changes in market interest rates during the period.
Previous wording
Non-performing assets to total assets was 0.13% at March 31, 2025 and 0.20% at September 30, 2024. Non-performing assets decreased by $1.35 million, or 34.2%, to $2.59 million at March 31, 2025 from $3.94 million at September 30, 2024. The decrease was primarily due to a $1.56 million decrease in non-accrual loans, with the largest decreases occurring in the commercial real estate and commercial business portfolios. The decrease in both categories was a result of loan payoffs. These decreases were partially offset by a $221,000 increase in OREO and other repossessed assets.
Current wording
Non-performing assets to total assets was 0.21% at June 30, 2025 and 0.20% at September 30, 2024. Non-performing assets increased by $166,000, or 4.2%, to $4.10 million at June 30, 2025 from $3.94 million at September 30, 2024. The increase was primarily due to a $221,000 increase in OREO and repossessed assets which was partially offset by a $42,000 decrease in non-accrual loans. The decrease in non-accrual loans was driven by the reductions in the commercial real estate and commercial business portfolios, partially offset by an increase in the one- to four- family portfolio. Decreases in the commercial real estate and commercial business categories were primarily attributable to loan payoffs.
Previous wording
(1) At March 31, 2025 and September 30, 2024, there were no one-to four-family properties in the process of foreclosure.
Current wording
(1) At June 30, 2025 there was one one- to four-family property in the process of foreclosure. At September 30, 2024, there were no one-to four-family properties in the process of foreclosure.
Previous wording
Comparison of Operating Results for the Three and Six Months Ended March 31, 2025 and 2024
Current wording
Comparison of Operating Results for the Three and Nine Months Ended June 30, 2025 and 2024
Previous wording
Net income increased by $1.05 million, or 18.3%, to $6.76 million for the quarter ended March 31, 2025 from $5.71 million for the quarter ended March 31, 2024. Net income per diluted common share increased by $0.15, or 21.4%, to $0.85 for the quarter ended March 31, 2025 from $0.70 for the quarter ended March 31, 2024. The increases in net income and net income per diluted common share for the three months ended March 31, 2025, were primarily due to a $1.58 million increase in net interest income and a $72,000 increase in non-interest income. These increases were partially offset by a $235,000 increase in the provision for income taxes, a $203,000 increase in non-interest expense and $165,000 increase in the provision for credit losses.
Current wording
Net income increased by $1.18 million, or 19.9%, to $7.10 million for the quarter ended June 30, 2025 from $5.92 million for the quarter ended June 30, 2024. Net income per diluted common share increased by $0.16, or 21.6%, to $0.90 for the quarter ended June 30, 2025 from $0.74 for the quarter ended June 30, 2024. The increases in net income and diluted earnings per share for the three months ended June 30, 2025, were primarily due to a $1.64 million increase in net interest income and an $84,000 increase in non-interest income. These increases were partially offset by a $255,000 increase in the provision for income taxes, a $196,000 increase in the provision for credit losses and a $98,000 increase in non-interest expense.
Previous wording
Net income increased $1.61 million, or 13.4%, to $13.62 million for the six months ended March 31, 2025 from $12.00 million for the six months ended March 31, 2024. Net earnings per diluted common share increased by $0.24, or 16.3% to $1.71 for the six months ended March 31, 2025 from $1.47 for the six months ended March 31, 2024. The increases in net income and net earnings per diluted common share were due to a $2.53 million increase in net interest income and a $145,000 decrease in the provision for credit losses. These increases were partially offset by a $645,000 increase in non-interest expense, a $403,000 increase in the provision for income taxes and a $29,000 decrease in non-interest income.
Current wording
Net income increased $2.79 million, or 15.6%, to $20.72 million for the nine months ended June 30, 2025 from $17.93 million for the nine months ended June 30, 2024. Net income per diluted common share increased by $0.39, or 17.7% to $2.60 for the nine months ended June 30, 2025 from $2.21 for the nine months ended June 30, 2024. The increases in net income and diluted earnings per share were due to a $4.19 million increase in net interest income and a $55,000 increase in non-interest income. These increases were partially offset by a $744,000 increase in non-interest expense, a $656,000 increase in the provision for income taxes and a $53,000 increase in the provision for credit losses.
Previous wording
Net interest income increased by $2.54 million, or 8.0%, to $34.18 million for the six months ended March 31, 2025 from $31.64 million for the six months ended March 31, 2024. This increase was due to a 34 basis point increase in the weighted average yield of interest-earning assets to 5.44% at March 31, 2025 from 5.10% at March 31, 2024, and a $55.37 million increase in average total interest-earning assets, partially offset by a $70.58 million increase in the average balance of total interest-bearing liabilities.
Current wording
Net Interest Income: Net interest income increased by $1.64 million, or 10.3%, to $17.62 million for the quarter ended June 30, 2025 from $15.98 million for the quarter ended June 30, 2024. This increase was due to a 17 basis point increase in the weighted average yield of interest-earning assets to 5.50% at June 30, 2025 from 5.33% at June 30, 2024, and a $39.55 million increase in average total interest-earning assets. Offsetting some of the benefits was a $33.72 million increase in the average balance of total interest-bearing liabilities.
Previous wording
Total interest and dividend income increased by $1.71 million, or 7.4%, to $24.87 million for the quarter ended March 31, 2025 from $23.16 million for the quarter ended March 31, 2024, primarily due to increases in the average yield earned on and average balance of loans receivable, as well as an increase in the average balance of interest-bearing deposits in banks and CDs and a higher average yield on investment securities. These increases were partially offset by a decrease in the average balance of investment securities and, to a lesser extent, a decrease in the average rate paid on interest-bearing deposits in banks and CDs.
Current wording
Total interest and dividend income increased by $1.41 million, or 5.8%, to $25.54 million for the quarter ended June 30, 2025 from $24.14 million for the quarter ended June 30, 2024, primarily due to increases in the average yield earned on and average balance of loans receivable, as well as an increase in the average balance of interest-bearing deposits in banks and CDs and a higher average yield on investment securities. These increases were partially offset by a decrease in the average balance of investment securities and, to a lesser extent, a decrease in the average yield on interest-bearing deposits in banks and CDs.
Previous wording
The average balance of total interest-earning assets increased by $34.17 million, or 1.9%, to $1.84 billion for the quarter ended March 31, 2025 from $1.81 billion for the quarter ended March 31, 2024. The average balance of loans receivable increased by $70.58 million, or 5.2%, and the average balance of interest-bearing deposits in banks and CDs increased by $29.05 million, or 20.3%. These increases were partially offset by a decrease in the average balance of investment securities of $65.51 million, or 22.4% between the periods. During the quarter ended March 31, 2025, there was a total of $201,000 of pre-payment penalties, non-accrual interest and late fees collected compared to $99,000 collected for the quarter ended March 31, 2024. The average yield on interest-earning assets increased by 32 basis points to 5.48% for the quarter ended March 31, 2025 from 5.16% for the quarter ended March 31, 2024. The average yield on investment securities increased 49 basis points to 3.58% for the quarter ended March 31, 2025 compared to the quarter ended March 31, 2024, while the average yield on loans receivable increased 33 basis points to 5.90% during the same period.
Current wording
The average balance of total interest-earning assets increased by $39.55 million, or 2.2%, to $1.86 billion for the quarter ended June 30, 2025 from $1.82 billion for the quarter ended June 30, 2024. The average balance of loans receivable increased by $58.77 million, or 4.2%, and the average balance of interest-bearing deposits in banks and CDs increased by $17.47 million, or 10.8%. These increases were partially offset by a decrease in the average balance of investment securities of $36.71 million, or 14.0%. During the quarter ended June 30, 2025, there was a total of $170,000 of pre-payment penalties, non-accrual interest and late fees collected compared to $133,000 collected for the quarter ended June 30, 2024. The average yield on interest-earning assets increased by 17 basis points to 5.50% for the quarter ended June 30, 2025 from 5.33% for the quarter ended June 30, 2024. The average yield on investment securities increased nine basis points to 3.66% for the quarter ended June 30, 2025 compared to the quarter ended June 30, 2024, while the average yield on loans receivable increased 27 basis points to 5.92% during the same period.
Previous wording
Total interest expense increased by $131,000, or 1.7%, to $7.65 million for the quarter ended March 31, 2025 from $7.52 million for the quarter ended March 31, 2024. This increase was due to an increase in the average balance of interest-bearing liabilities. The average balance of interest-bearing liabilities increased by $45.97 million, or 3.8%, to $1.25 billion for the quarter ended March 31, 2025 from $1.21 billion for the quarter ended March 31, 2024, primarily due to increases in the average balances of certificate of deposit and money market accounts, partially offset by decreases in the average balance of NOW checking accounts. The average cost of interest-bearing liabilities decreased to 2.47% for the quarter ended March 31, 2025 from 2.50% for the quarter ended March 31, 2024.
Current wording
Total interest expense decreased by $236,000, or 2.9%, to $7.92 million for the quarter ended June 30, 2025 from $8.16 million for the quarter ended June 30, 2024. This decrease was due to a decrease in the average cost of interest-bearing liabilities. The average balance of interest-bearing liabilities increased by $33.72 million, or 2.7%, to $1.27 billion for the quarter ended June 30, 2025 from $1.24 billion for the quarter ended June 30, 2024, primarily due to increases in the average balances of certificate of deposit and NOW checking accounts, partially offset by decreases in the average balance of money market and savings accounts. The average cost of interest-bearing liabilities decreased to 2.49% for the quarter ended June 30, 2025 from 2.64% for the quarter ended June 30, 2024.
Previous wording
As a result of changes above, the net interest margin ("NIM") increased to 3.79% for the quarter ended March 31, 2025 from 3.48% for the quarter ended March 31, 2024.
Current wording
As a result of changes above, the net interest margin ("NIM") increased to 3.80% for the quarter ended June 30, 2025 from 3.53% for the quarter ended June 30, 2024.
Previous wording
Net Interest Income: Net interest income increased by $1.58 million, or 10.1%, to $17.21 million for the quarter ended March 31, 2025 from $15.64 million for the quarter ended March 31, 2024. This increase was due to a 32 basis point increase in the weighted average yield of interest-earning assets to 5.48% at March 31, 2025 from 5.16% at March 31, 2024, and a $34.16 million increase in average total interest-earning assets. To a lesser extent, a three basis point decrease in the average rate paid on interest-bearing liabilities, to 2.47% from 2.50%, also contributed to the improvement. These positive factors were partially offset by a $45.97 million increase in the average balance of total interest-bearing liabilities, which increased the Company’s overall funding costs.
Current wording
Net interest income increased by $4.19 million, or 8.8%, to $51.81 million for the nine months ended June 30, 2025 from $47.62 million for the nine months ended June 30, 2024. This increase was due to a 29 basis point increase in the weighted average yield on interest-earning assets to 5.46% for the nine months ended June 30, 2025 from 5.17% for the same period in 2024, and a $49.96 million increase in average total interest-earning assets, partially offset by a $58.86 million increase in the average balance of total interest-bearing liabilities and a seven basis point increase in the weighted average yield of interest-bearing liabilities to 2.53% for the nine months ended June 30, 2025 from 2.46% for the same period in 2024.
Previous wording
The average balance of total interest-earning assets increased by $55.36 million, or 3.1%, to $1.85 billion for the six months ended March 31, 2025 from $1.79 billion for the six months ended March 31, 2024. The average balance of loans receivable increased by $87.98 million, or 6.5%, and the average balance of interest-bearing deposits in banks and CDs increased by $34.80 million or 25.9%. These increases were partially offset by a decrease in the average balance of investment securities of $67.15 million or 22.3% between the periods. During the six months ended March 31, 2025, there was a total of $316,000 of pre-payment penalties, non-accrual interest and late fees collected compared to $232,000 collected for the six months ended March 31, 2024. The average yield on interest-earning assets increased by 34 basis points to 5.44% for six months ended March 31, 2025 from 5.10% for the six months ended March 31, 2024. The average yield on investment securities increased 52 basis points to 3.55% for the six months ended March 31, 2025, compared to the same period in 2024. This increase was primarily due to the reinvestment of matured or called lower-yielding securities into higher-yielding instruments, as well as upward adjustments in the yields of variable-rate securities in response to the higher interest rate environment. Similarly, the average yield on loans receivable increased 32 basis points to 5.88% during the same period.
Current wording
The average balance of total interest-earning assets increased by $49.96 million, or 2.8%, to $1.85 billion for the nine months ended June 30, 2025 from $1.80 billion for the nine months ended June 30, 2024. The average balance of loans receivable increased by $78.29 million, or 5.7%, and the average balance of interest-bearing deposits in banks and CDs increased by $29.05 million or 20.2%. These increases were partially offset by a decrease in the average balance of investment securities of $57.04 million or 19.8% between the periods. During the nine months ended June 30, 2025, there was a total of $510,000 of pre-payment penalties, non-accrual interest and late fees collected compared to $384,000 collected for the nine months ended June 30, 2024. The average yield on interest-earning assets increased by 29 basis points to 5.46 for nine months ended June 30, 2025 from 5.17% for the nine months ended June 30, 2024. The average yield on investment securities increased 39 basis points to 3.58% for the nine months ended June 30, 2025, compared to the same period in 2024. This increase was primarily due to the reinvestment of matured or called lower-yielding securities into higher-yielding instruments, as well as upward adjustments in the yields of variable-rate securities in response to the higher interest rate environment. Similarly, the average yield on loans receivable increased 30 basis points to 5.87% during the same period.
Previous wording
NIM expanded to 3.71% for the six months ended March 31, 2025 from 3.53% for the six months ended March 31, 2024.
Current wording
NIM expanded to 3.74% for the nine months ended June 20, 2025 from 3.53% for the nine months ended June 30, 2024.
Previous wording
Provision for Credit Losses: A $246,000 provision for credit losses was recorded for the quarter ended March 31, 2025, consisting of a $237,000 provision for credit losses on loans which was primarily due to changes in the composition of the loan portfolio, a $5,000 recapture of credit losses on investment securities, and a $14,000 provision for credit losses on unfunded commitments which was primarily due to an increase in the balance of unfunded loan commitments. An $81,000 provision for credit losses was recorded for the quarter ended March 31, 2024, consisting of a $166,000 provision for credit losses on loans, a $3,000 provision for credit losses on investment securities and a $88,000 recapture of credit losses on unfunded commitments.
Current wording
Provision for Credit Losses: A $440,000 provision for credit losses was recorded for the quarter ended June 30, 2025, consisting of a $351,000 provision for credit losses on loans which was due to loan portfolio growth and the annual update of model assumptions, a $4,000 recapture of credit losses on investment securities, and a $93,000 provision for credit losses on unfunded commitments which was due to the annual update of model assumptions. The annual update of model assumptions reflects revised macroeconomic indicators, including slower projected economic growth and modest increases in unemployment, as well as refinements to loss estimates within certain loan segments, particularly commercial real estate. A $244,000 provision for credit losses was recorded for the quarter ended June 30, 2024, consisting of a $264,000 provision for credit losses on loans, a $12,000 recapture of credit losses on investment securities and an $8,000 recapture of credit losses on unfunded commitments.
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The increase was primarily due to higher pre-tax income. The Company's effective tax rate was 20.1% for the nine months ended June 30, 2025 compared to 20.2% for the nine months ended June 30, 2024.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Certain matters discussed in this Quarterly Report on Form 10-Q may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to our financial condition, results of operations, plans, objectives, future performance or business. Forward-looking statements are not statements of historical fact, are based on certain assumptions and often include the words "believes," "expects," "anticipates," "estimates," "forecasts,"
Previous report — wording carried elsewhere
In light of these risks, uncertainties and assumptions, the forward-looking statements discussed in this document might not occur and we caution readers not to place undue reliance on any forward-looking statements. These risks could cause our actual results for fiscal 2025 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of, us, and could negatively affect the Company's consolidated financial condition and results of operations as well as its stock price performance.