Dec 18 - Timberland Bancorp Inc. in Hoquiam, Wash., (Nasdaq: TSBK) has reported that the Federal Reserve Bank approved the company's request for permission to redeem the remaining preferred shares originally issued in December 2008 to the U.S. Treasury Department under the Treasury's Capital Purchase Program. The shares will be redeemed at the liquidation value of $1,000 per share on Dec. 20, 2013.
"We are pleased to be able to redeem the shares using existing balance sheet resources," said Michael R. Sand, president and CEO. "During the last fiscal year we paid $710,000 in dividends to preferred shareholders. With the dividend rate scheduled to increase to 9 percent on Dec. 23, 2013, the dividend expense on the preferred shares would have increased to $1.09 million annually. The purchase of the preferred shares eliminates this future dividend expense."
Timberland originally issued 16,641 shares of fixed-rate cumulative perpetual stock, series A, to Treasury in December 2008. On Nov. 13, 2012, Treasury auctioned the preferred shares to private investors. During the quarter ended March 31, 2013, Timberland redeemed 4,576 of the preferred shares at a $255,000 discount from the liquidation value. The remaining 12,065 shares will be redeemed on Dec. 20, 2013, and eliminate all outstanding preferred shares from the company's capital structure.
The purchase will not reduce Timberland's book value per common share or its tangible book value per common share which were reported at Sept. 30, 2013, as $11.04 and $10.22, respectively. Timberland will continue to be considered well capitalized under all regulatory guidelines.
About Timberland Bancorp Inc.
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 22 branches (including its main office in Hoquiam).