Timberland Bancorp: Trading At TBV Makes The Stock A Buy

2025-01-31 10:30:00 ET

Summary

• Timberland Bancorp's Q1 results show strong financial performance with increased net interest income and limited loan loss provisions, leading to a higher EPS of $0.86.
• The bank's balance sheet improved with a higher equity ratio, and a significant portion of its loan book consists of stable mortgage loans.
• Timberland's robust balance sheet, cash-rich position, and attractive valuation at book value and a 9x earnings multiple make it a compelling investment.
• I maintain a small long position in Timberland Bancorp and anticipate a dividend hike soon, reflecting confidence in its continued strong performance.

Introduction

Timberland Bancorp, Inc. ( TSBK ) is a small regional/local bank based in Washington State . The balance sheet contains less than $2B in assets, but the small size of the bank also means it can keep an eye on the quality of its loan book. Despite the sometimes adverse economic circumstances in the past few years, Timberland Bancorp has done well as the bank remained profitable as the loan loss provisions were kept limited....

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