TIMBERLAND BANCORP INC 10-K

Item 9A. Controls and Procedures (a) Evaluation of Disclosure Controls and Procedures : An evaluation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)) was carried out under the supervision and with the participation of the Company’s Chief Executive Officer, Chief Financial Officer and several other members of the Company’s senior management as of the end of the period covered by this annual report. The Company’s Chief Executive Officer and Chief Financial Officer concluded that as of September 30, 2021 the Company’s disclosure controls and procedures were effective in ensuring that the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is (i) accumulated and communicated to the Company’s management (including the Chief Executive Officer and Chief Financial Officer) in a timely manner, and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. (b) Changes in Internal Controls : There have been no changes in our internal control over financial reporting (as defined in 13a-15(f) of the Exchange Act) that occurred during the quarter ended September 30, 2021, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. The Company continued, however, to implement suggestions from its internal auditor and independent auditor on ways to strengthen existing controls. The Company does not expect that its disclosure controls and procedures and internal controls over financial reporting will prevent all errors and fraud. A control procedure, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control procedure are met. Because of the inherent limitations in all control procedures, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns in controls or procedures can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any control procedure is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control procedure, misstatements due to error or fraud may occur and not be detected. Management’s Report on Internal Control Over Financial Reporting Management of Timberland Bancorp, Inc. (the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13(a)-15(f) of the Exchange Act. The Company's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. To comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, the Company designed and implemented a structured and comprehensive assessment process to evaluate its internal control over financial reporting across the enterprise. The assessment of the effectiveness of the Company's internal control over financial reporting was based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's internal control over financial reporting includes policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements. A control procedure, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Also, because of the inherent limitations in all control procedures, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. Additionally, in designing disclosure controls and procedures, our management was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any 134 disclosure controls and procedures is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. As a result of these inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Furthermore, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Based on its assessment, management has concluded that the Company's internal control over financial reporting was effective as of September 30, 2021. The management of the Company has assessed the Company's compliance with the Federal laws and regulations pertaining to insider loans and the Federal and, if applicable, State laws and regulations pertaining to dividend restrictions during the fiscal year that ended on September 30, 2021. Management has concluded that the Company complied with the Federal laws and regulations pertaining to insider loans and the Federal and, if applicable, State laws and regulations. Date: December 8, 2021 /s/ Michael R. Sand /s/ Dean J. Brydon Michael R. Sand Dean J. Brydon President and Chief Executive Officer Chief Financial Officer 135 Item 9B. Other Information None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. PART III Item 10. Directors, Executive Officers and Corporate Governance The information required by this item is contained under the section captioned “Proposal I - Election of Directors” in the Company’s Definitive Proxy Statement for the 2021 Annual Meeting of Stockholders (“Proxy Statement”) and is incorporated herein by reference. For information regarding the executive officers of the Company and the Bank, see “Item 1. Business - Executive Officers of the Registrant.” Compliance with Section 16(a) of the Exchange Act The information required by this item is contained under the section captioned “Section 16(a) Beneficial Ownership Reporting Compliance” included in the Company’s Proxy Statement and is incorporated herein by reference. Audit Committee Matters and Audit Committee Financial Expert The Company has a separately designated standing Audit Committee, which as of September 30, 2021 was composed of Directors Stoney, Smith, and Suter. Each member of the Audit Committee is “independent” as defined in the Nasdaq Stock Market listing standards. The Company’s Board of Directors has designated Directors Stoney and Suter as the Audit Committee financial experts, as defined in the SEC’s Regulation S-K. Directors Stoney, Smith, and Suter are independent as that term is used in Item 7(c) of Schedule 14A promulgated under the Exchange Act. Code of Ethics The Board of Directors ratified its Code of Ethics for the Company’s officers (including its senior financial officers), directors and employees during the year ended September 30, 2021. The Code of Ethics requires the Company’s officers, directors and employees to maintain the highest standards of professional conduct. The Company’s Code of Ethics was filed as an exhibit to its Annual Report on Form 10-K for the year ended September 30, 2003 and is available on our website at www.timberlandbank.com. Nomination Procedures There have been no material changes to the procedures by which stockholders may recommend nominees to the Company’s Board of Directors. Item 11. Executive Compensation The information required by this item is contained under the sections captioned “Executive Compensation” and “Directors’ Compensation” included in the Company’s Proxy Statement and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters (a) Security Ownership of Certain Beneficial Owners. The information required by this item is contained under the section captioned “Security Ownership of Certain Beneficial Owners and Management” included in the Company’s Proxy Statement and is incorporated herein by reference. (b) Security Ownership of Management. 136 The information required by this item is contained under the sections captioned “Security Ownership of Certain Beneficial Owners and Management” and “Proposal I - Election of Directors” included in the Company’s Proxy Statement and is incorporated herein by reference. (c) Changes In Control. The Company is not aware of any arrangements, including any pledge by any person of securities of the Company, the operation of which may at a subsequent date result in a change in control of the Company. (d) Equity Compensation Plan Information. Equity Compensation Plan Information The following table summarizes share and exercise price information about the Company’s equity compensation plans as of September 30, 2021: Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (a) (b) (c) Equity compensation plans approved by security holders: 2003 Stock Option Plan 42,000 $ 9.10 — Timberland Bancorp, Inc. 2014 Equity Incentive Plan: 245,815 22.92 17,926 Timberland Bancorp, Inc. 2019 Equity Incentive Plan: 119,000 23.33 231,000 Equity compensation plans not approved by security holders — — — Total 406,815 $ 21.62 248,926 Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this item is contained under the sections captioned “Meetings and Committees of the Board of Directors And Corporate Governance Matters - Corporate Governance - Related Party Transactions” and “Meetings and Committees of the Board of Directors and Corporate Governance Matters - Corporate Governance - Director Independence” included in the Company's Proxy Statement and are incorporated herein by reference. Item 14. Principal Accounting Fees and Services The information required by this item is contained under the section captioned “Proposal 3 - Ratification of Selection of Independent Auditor” included in the Company’s Proxy Statement and is incorporated herein by reference. 137 PART IV Item 15. Exhibits and Financial Statement Schedules (a) Exhibits 3.1 Articles of Incorporation of the Registrant ( 1 ) 3.2 Amended and Restated Bylaws of the Registrant ( 2 ) 4.1 Form of Certificate of Timberland Bancorp, Inc. Common Stock ( 3 ) 4.2 Description of Capital Stock of Timberland Bancorp, Inc. ( 4 ) 10.1 Employee Severance Compensation Plan, as revised ( 5 ) 10.2 Employee Stock Ownership Plan ( 5 ) 10.3 2003 Stock Option Plan ( 6 ) 10.4 Form of Incentive Stock Option Agreement ( 6 ) 10.5 Form of Non-qualified Stock Option Agreement ( 7 ) 10.6 Form of Management Recognition and Development Award Agreement ( 7) 10.7 Employment Agreement with Michael R. Sand ( 8) 10.8 Employment Agreement with Dean J. Brydon ( 8) 10.9 Timberland Bancorp, Inc. 2014 Equity Incentive Plan ( 9 ) 10.10 Timberland Bancorp, Inc. 2019 Equity Incentive Plan (1 0 ) 10.11 F orm of Incentive Stock Option Agreement (1 1 ) 10.12 For m of Non-qualified Stock Option Agreement (1 1 ) 10.13 Form of Restricted Stock Grant Agreement (1 1 ) 14 Code of Ethics (1 2 ) 21 Subsidiaries of the Registrant * 23.1 Consent of Delap LLP * 31.1 Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act * 31.2 Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act * 32 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act * 101 The following materials from Timberland Bancorp, Inc.’s Annual Report on Form 10-K for the year ended September 30, 2021, formatted in Extensible Business Reporting Language (XBRL): (a) Consolidated Balance Sheets; (b) Consolidated Statements of Income; (c) Consolidated Statements of Comprehensive Income; (d) Consolidated Statements of Shareholders’ Equity; (e) Consolidated Statements of Cash Flows; and (f) Notes to Consolidated Financial Statements ___________ (1) Filed as an exhibit to the Registrant's Registration Statement on Form S-1 (333-35817) and incorporated by reference. (2) Incorporated by reference to the Registrant’s Current Report on Form 8-K filed August 25, 2021. (3) Filed as an exhibit to the Registrant's Statement on Form S-1 (333-35817) and incorporated by reference. (4) Incorporated by reference to the Registrant's Annual Report on Form 10-K for year ended September 30, 2019. (5) Incorporated by reference to the Registrant's Current Report on Form 8-K filed April 16, 2007. (6) Incorporated by reference to the Registrant's 2004 Annual Meeting Proxy Statement dated December 24, 2003. (7) Incorporated by reference to Exhibit 99.2 included in the Registrant’s Registration Statement on Form S-8(333-116163). (8) Incorporated by reference to the Registrant’s Current Report of Form 8-K filed on March 29, 2013. (9) Attached as Appendix A to the Registrant's Annual Meeting Proxy Statement filed on December 19, 2014. (10) Attached as Appendix A to the Registrant's Annual Meeting Proxy Statement filed on December 18, 2019. (11) Incorporated by reference and included in the Registrant's Registration Statement on Form S-8 (333-240040). (12) Incorporated by reference to the Registrant's Annual Report on Form 10-K for the year ended September 30, 2003. Item 16. Form 10-K Summary None. 138 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TIMBERLAND BANCORP, INC. Date: December 8, 2021 By: /s/Michael R. Sand Michael R. Sand President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. SIGNATURES TITLE DATE /s/Michael R. Sand President, Chief Executive Officer and December 8, 2021 Michael R. Sand Director (Principal Executive Officer) /s/Jon C. Parker Chairman of the Board December 8, 2021 Jon C. Parker /s/Dean J. Brydon Chief Financial Officer December 8, 2021 Dean J. Brydon (Principal Financial and Accounting Officer) /s/Parul Bhandari Director December 8, 2021 Parul Bhandari /s/Andrea M. Clinton Director December 8, 2021 Andrea M. Clinton /s/Kathy D. Leodler Director December 8, 2021 Kathy D. Leodler /s/David A. Smith Director December 8, 2021 David A. Smith Director _______ __, 2021 Michael J. Stoney /s/Kelly A. Suter Director December 8, 2021 Kelly A. Suter 139