What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-05-07 compared with 2026-02-06 · 227 added, 128 removed, 957 unchanged (27% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS

December 31, 2025 and September 30, 2025

March 31, 2026 and September 30, 2025

(Dollars in thousands, except per share amounts)

38 unchanged sentences

CONSOLIDATED BALANCE SHEETS (continued)

December 31, 2025 and September 30, 2025

March 31, 2026 and September 30, 2025

(Dollars in thousands, except per share amounts)

7 unchanged sentences

50,000,000 shares authorized;

7,879,828 shares issued and outstanding - December 31, 2025 7,889,571 shares issued and outstanding - September 30, 2025

7,833,643 shares issued and outstanding - March 31, 2026 7,889,571 shares issued and outstanding - September 30, 2025

23,982 26,305

8 unchanged sentences

CONSOLIDATED STATEMENTS OF INCOME

For the three months ended December 31, 2025 and 2024

For the three and six months ended March 31, 2026 and 2025

(Dollars in thousands, except per share amounts)

Three Months Ended December 31,

Three Months Ended March 31, Six Months Ended

2026 2025 2026 2025

Interest and dividend income

12 unchanged sentences

Recapture of credit losses - investment securities ( 3 ) ( 5 ) ( 5 ) ( 10 )

Recapture of credit losses - unfunded commitments ( 49 ) ( 20 )

Provision for (recapture of) credit losses - unfunded commitments 3 14 ( 46 ) ( 7 )

Total provision for (recapture of) credit losses - net 523 246 488 272

14 unchanged sentences

CONSOLIDATED STATEMENTS OF INCOME (continued)

For the three months ended December 31, 2025 and 2024

For the three and six months ended March 31, 2026 and 2025

(Dollars in thousands, except per share amounts)

Three Months Ended December 31,

Three Months Ended March 31, Six Months Ended

2026 2025 2026 2025

Non-interest expense

28 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the three months ended December 31, 2025 and 2024

For the three and six months ended March 31, 2026 and 2025

(Dollars in thousands)

Three Months Ended December 31

Three Months Ended March 31 Six Months Ended

2026 2025 2026 2025

Comprehensive income

2 unchanged sentences

Unrealized holding gain (loss) on investment securities available for sale, net of income taxes of $( 32 ), $ 32 , $ 15 , and $( 183 ) respectively

( 117 ) 122 ( 52 ) ( 690 )

Total other comprehensive income (loss), net of income taxes ( 117 ) 122 ( 52 ) ( 690 )

4 unchanged sentences

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

For the three months ended December 31, 2025 and 2024

For the three and six months ended March 31, 2026 and 2025

(Dollars in thousands, except per share amounts)

4 unchanged sentences

Earnings Total

Balance, December 31, 2024 7,954,673 $ 29,593 $ 220,398 $ ( 792 ) $ 249,199

Net income — — 6,755 — 6,755

Other comprehensive income — — — 122 122

Repurchase of common stock, net of tax ( 61,764 ) ( 1,908 ) — — ( 1,908 )

Restricted stock grant forfeitures ( 1,380 ) ( 11 ) — — ( 11 )

Exercise of stock options 11,960 212 — — 212

Common stock dividends ($ 0.25 per common share)

— — ( 1,987 ) — ( 1,987 )

Stock-based compensation expense — 142 — — 142

Balance, March 31, 2025 7,903,489 $ 28,028 $ 225,166 $ ( 670 ) $ 252,524

Balance, December 31, 2025 7,879,828 $ 26,025 $ 242,617 $ ( 233 ) $ 268,409

Net income — — 7,131 — 7,131

Other comprehensive loss — — — ( 117 ) ( 117 )

Repurchase of common stock, net of tax ( 80,000 ) ( 3,108 ) — — ( 3,108 )

Exercise of stock options 33,815 877 — — 877

Common stock dividends ($ 0.29 per common share)

— — ( 2,291 ) — ( 2,291 )

Stock-based compensation expense — 188 — — 188

Balance, March 31, 2026 7,833,643 $ 23,982 $ 247,457 $ ( 350 ) $ 271,089

Common Stock Accumulated

Compre-hensive

Income (Loss)

Number of Shares Amount Retained

Earnings Total

Balance, September 30, 2024 7,960,127 $ 29,862 $ 215,531 $ 20 $ 245,413

7 unchanged sentences

Stock-based compensation expense — 283 — — 283

Balance, December 31, 2024 7,954,673 $ 29,593 $ 220,398 $ ( 792 ) $ 249,199

Balance, March 31, 2025 7,903,489 $ 28,028 $ 225,166 $ ( 670 ) $ 252,524

Balance, September 30, 2025 7,889,571 $ 26,305 $ 236,607 $ ( 298 ) $ 262,614

Net income — — 15,347 — 15,347

Other comprehensive income — — — 65 65

Other comprehensive loss — — — ( 52 ) ( 52 )

Repurchase of common stock, net of tax ( 109,303 ) ( 4,108 ) — — ( 4,108 )

4 unchanged sentences

Stock-based compensation expense — 346 — — 346

Balance, December 31, 2025 7,879,828 $ 26,025 $ 242,617 $ ( 233 ) $ 268,409

Balance, March 31, 2026 7,833,643 $ 23,982 $ 247,457 $ ( 350 ) $ 271,089

See notes to unaudited consolidated financial statements

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the three months ended December 31, 2025 and 2024

For the six months ended March 31, 2026 and 2025

(Dollars in thousands)

Three Months Ended December 31,

Six Months Ended March 31,

Cash flows from operating activities

Net income $ 15,347 $ 13,615

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

(Recapture of) provision for credit losses ( 35 ) 27

Adjustments to reconcile net income to net cash provided by operating activities:

Provision for credit losses 488 272

Depreciation 737 753

12 unchanged sentences

Net change in accrued interest receivable and other assets, and other liabilities and accrued expenses ( 2,874 ) ( 3,976 )

Net cash provided by (used in) operating activities 6,084 ( 3,056 )

Net cash provided by operating activities 12,805 9,298

Cash flows from investing activities

3 unchanged sentences

Proceeds from maturities and prepayments of investment securities available for sale 11,466 9,290

Purchase of FHLB stock ( 58 ) ( 8 )

Decrease in loans receivable, net 12,461 1,059

5 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

For the three months ended December 31, 2025 and 2024

For the six months ended March 31, 2026 and 2025

(Dollars in thousands)

Three Months Ended December 31,

Six Months Ended March 31,

Cash flows from financing activities

Net decrease in deposits $ ( 12,153 ) $ ( 17,252 )

Net increase in deposits $ 26,575 $ 3,162

Proceeds from exercise of stock options 1,439 686

1 unchanged sentence

Payment of dividends ( 4,497 ) ( 3,980 )

Net cash used in financing activities ( 14,797 ) ( 19,655 )

Net increase (decrease) in cash and cash equivalents 3,436 ( 657 )

Net cash provided by (used in) financing activities 19,409 ( 2,924 )

Net increase in cash and cash equivalents 51,243 26,483

Cash and cash equivalents

5 unchanged sentences

Supplemental disclosure of non-cash investing activities

Other comprehensive income (loss) related to investment securities $ 65 $ ( 812 )

Other comprehensive loss related to investment securities $ ( 52 ) $ ( 690 )

Loans transferred to OREO and other repossessed assets $ — $ 221

10 unchanged sentences

The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2025 (“2025 Form 10-K”).

The unaudited consolidated results of operations for the three months ended December 31, 2025 are not necessarily indicative of the results that may be expected for the entire fiscal year ending September 30, 2026.

The unaudited consolidated results of operations for the six months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the entire fiscal year ending September 30, 2026.

(b) Principles of Consolidation:

11 unchanged sentences

Actual results could differ from those estimates.

(e) Certain prior period amounts have been reclassified to conform to the December 31, 2025 presentation with no change to previously reported net income or total shareholders’ equity.

(e) Certain prior period amounts have been reclassified to conform to the March 31, 2026 presentation with no change to previously reported net income or total shareholders’ equity.

Timberland Bancorp, Inc.

2 unchanged sentences

(2) INVESTMENT SECURITIES

Held to maturity and available for sale investment securities have been classified according to management’s intent and were as follows as of December 31, 2025 and September 30, 2025 (dollars in thousands):

Held to maturity and available for sale investment securities have been classified according to management’s intent and were as follows as of March 31, 2026 and September 30, 2025 (dollars in thousands):

Losses Estimated

Fair Value Allowance for Credit Losses

December 31, 2025

March 31, 2026

Held to Maturity

5 unchanged sentences

Municipal securities 605 1 — 606 —

Bank issued trust preferred securities 499 — ( 4 ) 495 1

Total $ 117,327 $ 279 $ ( 4,318 ) $ 113,288 $ 31

December 31, 2025 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value

March 31, 2026 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value

Available for Sale

15 unchanged sentences

Total $ 78,617 $ 382 $ ( 759 ) $ 78,240

Held to maturity and available for sale investment securities with unrealized losses were as follows as of December 31, 2025 (dollars in thousands):

Held to maturity and available for sale investment securities with unrealized losses were as follows as of March 31, 2026 (dollars in thousands):

Less Than 12 Months 12 Months or Longer Total

6 unchanged sentences

Private label residential 1,810 ( 28 ) 3 11,683 ( 768 ) 13 13,493 ( 796 )

Bank issued trust preferred securities

$ 8,004 $ ( 48 ) 10 $ 91,039 $ ( 4,270 ) 62 $ 99,043 $ ( 4,318 )

$ 744 $ ( 5 ) 5 $ 96,317 $ ( 4,285 ) 67 $ 97,061 $ ( 4,290 )

Available for sale

18 unchanged sentences

$ 15,899 $ ( 67 ) 4 $ 28,947 $ ( 692 ) 24 $ 44,846 $ ( 759 )

During the three months ended December 31, 2025, the Company recorded a $ 3,000 net realized loss on 13 held to maturity investment securities, all of which had been recognized previously as a credit loss.

During the three months ended December

31, 2024, the Company recorded a $ 2,000 net realized loss on 13 held to maturity investment securities all of which had been recognized previously as credit losses.

The recorded amount of investment securities pledged as collateral for public fund deposits, federal treasury tax and loan deposits, FHLB collateral and other non-profit organization deposits totaled $ 194.02 million and $ 195.93 million at December 31, 2025 and September 30, 2025, respectively.

The contractual maturities of investment securities at December 31, 2025 were as follows (dollars in thousands).

During the six months ended March 31, 2026, the Company recorded a $ 3,000 net realized loss on 14 held to maturity investment securities, all of which had been recognized previously as a credit loss.

During the six months ended March 31, 2025, the Company recorded a $ 2,000 net realized loss on 13 held to maturity investment securities all of which had been recognized previously as credit losses.

The recorded amount of investment securities pledged as collateral for public fund deposits, federal treasury tax and loan deposits, FHLB collateral and other non-profit organization deposits totaled $ 196.29 million and $ 195.93 million at March 31, 2026 and September 30, 2025, respectively.

The contractual maturities of investment securities at March 31, 2026 were as follows (dollars in thousands).

Expected maturities may differ from scheduled maturities due to the prepayment of principal or call provisions.

11 unchanged sentences

The Company assesses each available for sale investment security that is in an unrealized loss position to determine whether the decline in fair value below the amortized cost basis results from a credit loss or other factors.

The Company did not record an ACL on any available for sale investment securities at December 31, 2025 or September 30, 2025.

The Company did not record an ACL on any available for sale investment securities at March 31, 2026 or September 30, 2025.

As of both dates, the Company considered the unrealized losses across the classes of major security-type to be related to fluctuations in market conditions, primarily interest rates, and not reflective of a deterioration in credit value.

12 unchanged sentences

The calculation is completed on a quarterly basis using the default studies provided by an industry leading source.

At December 31, 2025 and September 30, 2025, the ACL on the held to maturity securities portfolio totaled $ 34,000 and $ 36,000 , respectively.

The following tables set forth information for the three months ended December 31, 2025 and 2024 regarding activity in the ACL by portfolio segment (dollars in thousands):

Three Months Ended December 31, 2025 Three Months Ended December 31, 2024

At March 31, 2026 and September 30, 2025, the ACL on the held to maturity securities portfolio totale d $ 31,000 and $ 36,000 , respectively.

The following tables set forth information for the three and six months ended March 31, 2026 and 2025 regarding activity in the ACL by portfolio segment (dollars in thousands):

Three Months Ended March 31, 2026 Three Months Ended March 31, 2025

Beginning Allowance Provision for (Recapture of) Credit Losses Ending Allowance Beginning Allowance Provision for (Recapture of) Credit Losses Ending Allowance

3 unchanged sentences

Total $ 34 $ ( 3 ) $ 31 $ 55 $ ( 5 ) $ 50

Six Months Ended March 31, 2026 Six Months Ended March 31, 2025

Beginning Allowance Provision for (Recapture of) Credit Losses Ending Allowance Beginning Allowance Provision for (Recapture of) Credit Losses Ending Allowance

Held to Maturity

Private label residential $ 35 $ ( 4 ) $ 31 $ 55 $ ( 7 ) $ 48

Bank issued trust preferred securities

1 ( 1 ) — 5 ( 3 ) 2

Total $ 36 $ — $ ( 5 ) $ 31 $ 60 $ ( 10 ) $ 50

The ACL on held to maturity securities is included within investment securities held to maturity on the consolidated balance sheets.

Changes in the ACL are recorded through the provision for (recapture of) credit losses on the consolidated income statement.

Accrued interest receivable on held to maturity investment securities totaled $ 418,000 a t December 31, 2025 and is included in accrued interest receivable on the consolidated balance sheet.

Accrued interest receivable on held to maturity investment securities totaled $ 276,000 a t March 31, 2026 and is included in accrued interest receivable on the consolidated balance sheet.

This amount is excluded from the estimate of expected credit losses.

1 unchanged sentence

When held to maturity investment securities are placed on non-accrual status, unpaid interest credited to income is reversed.

The Company had $ 32,000 of private label mortgage-backed held to maturity investment securities in non-accrual status at December 31, 2025.

The Company ha d $ 30,000 of private label mortgage-backed held to maturity investment securities in non-accrual status at March 31, 2026.

The Company monitors the credit quality of investment securities held to maturity using credit ratings from Moody's, S&P and Fitch.

The Company monitors the credit ratings on a quarterly basis.

The following tables set forth the Company's held to maturity investment securities at December 31, 2025 and September 30, 2025, by credit quality indicator (dollars in thousands):

The following tables set forth the Company's held to maturity investment securities at March 31, 2026 and September 30, 2025, by credit quality indicator (dollars in thousands):

Credit Ratings

As of December 31, 2025 AAA/AA/A BBB/BB/B Unrated Total

As of March 31, 2026 AAA/AA/A BBB/BB/B Unrated Total

Held to Maturity

4 unchanged sentences

Municipal securities 605 — — 605

Bank issued trust preferred securities — — 499 499

Total held to maturity $ 113,053 $ — $ 4,274 $ 117,327

9 unchanged sentences

Total held to maturity $ 131,441 $ — $ 5,420 $ 136,861

Prior to adopting ASU 2016-13 during the year ended September 30, 2024, the Company bifurcated OTTI into (1) amounts related to credit losses which are recognized through earnings and (2) amounts related to all other factors which are recognized as a component of other comprehensive income (loss).

Prior to adopting ASU 2016-13 during the year ended September 30, 2024, the Company bifurcated other-than-temporary impairment ("OTTI") into (1) amounts related to credit losses which are recognized through earnings and (2) amounts related to all other factors which are recognized as a component of other comprehensive income (loss).

To determine the component of the gross OTTI related to credit losses, the Company compared the amortized cost basis of the OTTI security to the present value of its revised expected cash flows, discounted using its pre-impairment yield.

2 unchanged sentences

The amounts written off due to credit loss remain and continue to be recovered on a cash basis.

The following table presents a roll forward of the credit loss component of held to maturity investment securities that have been written down for OTTI with the credit loss component recognized in earnings for the three months ended December 31, 2025 and 2024 (dollars in thousands):

Three Months Ended

The following table presents a roll forward of the credit loss component of held to maturity investment securities that have been written down for OTTI with the credit loss component recognized in earnings for the six months ended March 31, 2026 and 2025 (dollars in thousands):

Six Months Ended

Beginning balance of credit loss $ 788 $ 803

15 unchanged sentences

Based on this assessment, the Company determined that it is not "more likely than not" that the Company's fair value is less than its carrying amount, and, therefore, goodwill was determined not to be impaired at May 31, 2025.

As of December 31, 2025, management believes that there have been no events or changes in the circumstances since May 31, 2025 that would indicate a potential impairment of goodwill.

No assurances can be given, however, that the Company will not record an impairment loss on goodwill in the future.

As of March 31, 2026, management believes that there have been no events or changes in the circumstances since May 31, 2025 that would indicate a potential impairment of goodwill.

No assurance can be given, however, that the Company will not record an impairment loss on goodwill in the future.

If adverse economic conditions or any decreases in the Company's stock price and market capitalization were deemed to be other than temporary, it may significantly affect the fair value of the Company's goodwill and may trigger impairment charges.

3 unchanged sentences

CDI is evaluated for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable, with any changes in estimated useful life accounted for prospectively over the revised remaining life.

As of December 31, 2025, management believes that there have been no events or changes in the circumstances that would indicate a potential impairment of CDI.

As of March 31, 2026, management believes that there have been no events or changes in the circumstances that would indicate a potential impairment of CDI.

(4) LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES

Loans receivable by portfolio segment consisted of the following at December 31, 2025 and September 30, 2025 (dollars in thousands):

Loans receivable by portfolio segment consisted of the following at March 31, 2026 and September 30, 2025 (dollars in thousands):

2026 September 30,

26 unchanged sentences

__________________

(1) Does not include one- to four-family loans held for sale totaling $ 3.74 million and $ 1.13 million at December 31, 2025 and September 30, 2025, respectively.

Loans receivable at December 31, 2025 and September 30, 2025, are reported net of unamortized discounts totaling $ 43,000 and $ 51,000 , respectively.

(1) Does not include one- to four-family loans held for sale totaling $ 1.64 million and $ 1.13 million at March 31, 2026 and September 30, 2025, respectively.

Loans receivable at March 31, 2026 and September 30, 2025, are reported net of unamortized discounts totaling $ 33,000 and $ 51,000 , respectively.

Credit Quality Indicators

14 unchanged sentences

Loans in this classification have the weaknesses of substandard loans with the additional characteristic that the weaknesses make the collection or liquidation in full on the basis of currently existing facts, conditions and values questionable, and there is a high possibility of loss.

At December 31, 2025, no loans were classified as doubtful.

At March 31, 2026, no loans were classified as doubtful.

At September 30, 2025, there was one loan classified as doubtful which is supported by an SBA guarantee of the remaining balance.

1 unchanged sentence

This classification does not mean that the loan has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this loan even though partial recovery may be realized in the future.

At December 31, 2025 and September 30, 2025, there were no loans classified as loss.

The following table sets forth the Company's loan portfolio at December 31, 2025 by risk attribute and year of origination as well as current period gross charge-offs (dollars in thousands):

At March 31, 2026 and September 30, 2025, there were no loans classified as loss.

The following table sets forth the Company's loan portfolio at March 31, 2026 by risk attribute and year of origination as well as current period gross charge-offs (dollars in thousands):

Term Loans Amortized Cost Basis by Origination Fiscal Year

46 unchanged sentences

Pass $ 756 $ 75 $ 441 $ 368 $ 68 $ 262 $ 28 $ 1,998

Watch — — — — — 6 — 6

Substandard — — — — — — 20 20

2 unchanged sentences

Pass $ 4,916 $ 11,049 $ 11,911 $ 16,391 $ 24,047 $ 11,988 $ 42,649 $ 122,951

Watch — — — — 40 — 128 168

Special Mention — — — — — 281 — 281

109 unchanged sentences

Loss rates used by the Company are affected as changes in these factors increase or decrease from quarter to quarter.

In addition, regulatory agencies, as integral part of their examination process, periodically review the Company's ACL and may require the Company to make adjustments to the ACL based on their judgment about information available to them at the time of their examinations.

The following tables set forth information for the three months ended December 31, 2025 and 2024 regarding activity in the ACL by portfolio segment (dollars in thousands):

Three Months Ended December 31, 2025

In addition, regulatory agencies, as an integral part of their examination process, periodically review the Company's ACL and may require the Company to make adjustments to the ACL based on their judgment about information available to them at the time of their examinations.

The following tables set forth information for the three and six months ended March 31, 2026 and 2025 regarding activity in the ACL by portfolio segment (dollars in thousands):

Three Months Ended March 31, 2026

Allowance Provision for

16 unchanged sentences

Total $ 18,125 $ 523 $ — $ — $ 18,648

Three Months Ended December 31, 2024

Three Months Ended March 31, 2025

Allowance Provision for

(Recapture of) Loan Losses Charge-

(Recapture of) Credit Losses Charge-

Offs Recoveries Ending

14 unchanged sentences

Total $ 17,288 $ 237 $ ( 2 ) $ 2 $ 17,525

Six Months Ended March 31, 2026

Allowance Provision for

(Recapture of) Credit Losses Charge-

Offs Recoveries Ending

Mortgage loans:

One-to four-family $ 2,892 $ ( 71 ) $ — $ — $ 2,821

Multi-family 1,625 14 — — 1,639

Commercial real estate 7,147 332 — — 7,479

Construction – custom and owner/builder 1,268 ( 93 ) — — 1,175

Construction – speculative one- to four-family 112 69 — — 181

Construction – commercial 348 ( 91 ) — — 257

Construction – multi-family 400 569 — — 969

Construction – land development 412 ( 332 ) — — 80

Land 797 ( 113 ) — — 684

Consumer loans:

Home equity and second mortgage 435 17 — — 452

Other 58 ( 7 ) — — 51

Commercial business loans 2,597 245 — 18 2,860

Total $ 18,091 $ 539 $ — $ 18 $ 18,648

Six Months Ended March 31, 2025

Allowance Provision for

(Recapture of) Credit Losses Charge-

Offs Recoveries Ending

Mortgage loans:

One-to four-family $ 2,632 $ 168 $ — $ — $ 2,800

Multi-family 1,308 7 — — 1,315

Commercial real estate 6,934 49 — — 6,983

Construction – custom and owner/builder 1,328 ( 111 ) — — 1,217

Construction – speculative one-to four-family 128 ( 39 ) — — 89

Construction – commercial 537 ( 179 ) — — 358

Construction – multi-family 456 87 — — 543

Construction – land development 335 40 — — 375

Land 793 59 — — 852

Consumer loans:

Home equity and second mortgage 348 ( 3 ) — — 345

Other 39 ( 2 ) ( 4 ) — 33

Commercial business loans 2,640 213 ( 241 ) 3 2,615

Total $ 17,478 $ 289 $ ( 245 ) $ 3 $ 17,525

Non-Accrual Loans

4 unchanged sentences

A loan is generally not removed from non-accrual until all delinquent principal, interest and late fees have been brought current and the borrower demonstrates repayment ability over a period of not less than six months and all taxes are current.

The following tables present an analysis of loans by aging category and portfolio segment at December 31, 2025 and September 30, 2025 (dollars in thousands):

The following tables present an analysis of loans by aging category and portfolio segment at March 31, 2026 and September 30, 2025 (dollars in thousands):

Past Due 60-89

3 unchanged sentences

Past Due Current Total

December 31, 2025

March 31, 2026

Mortgage loans:

19 unchanged sentences

Total $ 501 $ 490 $ 9,405 $ — $ 10,396 $ 1,464,388 $ 1,474,784

(1) Includes non-accrual loans past due 90 days or more and other loans classified as non-accrual.

(1) Includes loans past due 90 days or more and other loans classified as non-accrual.

(2) Net of construction LIP.

26 unchanged sentences

Total $ 374 $ 876 $ 4,407 $ — $ 5,657 $ 1,481,552 $ 1,487,209

(1) Includes non-accrual loans past due 90 days or more and other loans classified as non-accrual.

(1) Includes loans past due 90 days or more and other loans classified as non-accrual.

(2) Net of construction LIP.

At December 31, 2025, the Company had $ 534,000 of non-accrual loans with an ACL of $ 362,000 and $ 3.75 million of non-accrual loans with no ACL.

The following table is a summary of the amortized cost of collateral dependent non-accrual loans as of December 31, 2025 (in thousands):

At March 31, 2026, the Company had $ 5.51 million of non-accrual loans with an ACL of $ 1.03 million and $ 3.89 million of non-accrual loans with no ACL.

The following table is a summary of the amortized cost of collateral dependent non-accrual loans as of March 31, 2026 (in thousands):

Recorded Investment Related ACL

25 unchanged sentences

These methods incorporate the post-modification of loan terms, as well as defaults and charge-offs associated with historical modified loans.

There were no loan modifications to borrowers experiencing financial difficulty during the three months ended December 31, 2025 and 2024.

The following tables present the amortized cost basis of loans that were experiencing financial difficulty and modified during the six months ended March 31, 2026, by loan class and modification type (dollars in thousands):

Term Extension

March 31, 2026 Amortized Cost Basis % of Total Loan Type Financial Effect

Home Equity and Second Mortgage $ 55 0.10 % Loan extended five years .

Combination - Term Extension and Interest and Payment Modification

March 31, 2026 Amortized Cost Basis % of Total Loan Type Financial Effect

Commercial Business Loan $ 2 — % Loan extended 18 months, interest rate increased and loan payment decreased.

All loans modified during the past twelve months are performing according to modified terms.

At December 31, 2025, the Company has operating leases for three retail bank branch offices and an administrative office.

The Company's leases have remaining lease terms of one to twenty-four years , and include options to extend the leases for up to fifteen years .

Lease extensions are not certain, and the Company evaluates each lease based on the specific circumstances for the location to determine the probability of exercising the extensions in the calculation of ROU assets and lease liabilities.

The components of lease cost (included in the premises and equipment expense category in the consolidated statements of income) are as follows for the three months ended December 31, 2025 and 2024 (dollars in thousands):

Three Months Ended December 31,

The following tables present the amortized cost basis of loans that were experiencing financial difficulty and modified during the six months ended March 31, 2025, by loan class and modification type (dollars in thousands):

Combination - Term Extension and Collateral Addition

March 31, 2025 Amortized Cost Basis % of Total Loan Type Financial Effect

Commercial Business Loan $ 256 0.20 % Loan extended three months and secured a deed of trust on a land parcel

Combination - Term Extension and Payment Modification

March 31, 2025 Amortized Cost Basis % of Total Loan Type Financial Effect

Commercial Business Loan $ 5 — % Loan extended seven months , monthly payment reduced with principal payments due at time of change in terms and 1.5 months after signing.

At March 31, 2026, the Company had operating leases for three retail bank branch offices and an administrative office.

The Company's leases have remaining terms ranging from one to 24 years, and include options to extend the leases for up to a total of fifteen years .

Lease extensions are not certain, and the Company evaluates each lease based on the specific circumstances for the location to determine the probability of exercising the extension in the calculation of ROU assets and lease liabilities.

The components of lease cost (included in the premises and equipment expense category in the consolidated statements of income) for the three months ended March 31, 2026 and 2025 were as follows (dollars in thousands):

Three Months Ended March 31, Six Months Ended March 31,

2026 2025 2026 2025

Operating lease cost $ 131 $ 100 $ 257 $ 197

1 unchanged sentence

Total lease cost $ 131 $ 100 $ 257 $ 197

The following table provides supplemental information related to operating leases at or for the three months ended December 31, 2025 and 2024 (dollars in thousands):

At or For the Three Months Ended December 31 2025 At or For the Three Months Ended December 31, 2024

The following table provides supplemental information related to operating leases at or for the three and six months ended March 31, 2026 and 2025 (dollars in thousands):

At or For the Three Months Ended March 31, 2026 At or For the Six Months Ended March 31, 2026

Cash paid for amounts included in the measurement of lease liabilities:

2 unchanged sentences

Weighted average discount rate-operating leases 4.18 % 4.18 %

At or For the Three Months Ended March 31, 2025 At or For the Six Months Ended March 31, 2025

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases $ 84 $ 168

Weighted average lease term-operating leases 5.6 years 5.6 years

Weighted average discount rate-operating leases 2.35 % 2.35 %

The Company's leases typically do not contain a discount rate implicit in the lease contracts.

As an alternative, the weighted average discount rate used to estimate the present value of future lease payments in calculating the value of the ROU asset and lease liability was determined by utilizing the FHLB fixed-rate credit advance borrowing rate for the term correlating to the remaining term of each lease.

Maturities of operating lease liabilities at December 31, 2025 for future fiscal years are as follows (dollars in thousands):

Maturities of operating lease liabilities at March 31, 2026 for future fiscal years are as follows (dollars in thousands):

Remainder of Fiscal 2026 $ 176

12 unchanged sentences

Common stock equivalents arise from the assumed conversion of outstanding stock options.

Information regarding the calculation of basic and diluted net income per common share for the three months ended December 31, 2025 and 2024, is as follows (dollars in thousands, except per share amounts):

Three Months Ended December 31,

Information regarding the calculation of basic and diluted net income per common share for the three and six months ended March 31, 2026 and 2025, is as follows (dollars in thousands, except per share amounts):

Three Months Ended March 31, Six Months Ended March 31,

2026 2025 2026 2025

Basic net income per common share computation

9 unchanged sentences

____________________________________________

(1) For the three months ended December 31, 2025 and 2024, average options to purchase 1,000 and 96,220 shares of common stock, respectively, were outstanding but not included in the computation of diluted net income per common share because their effect would have been anti-dilutive.

(1) For the three and six months ended March 31, 2026, average options to purchase 0 and 505 shares of common stock, respectively, were outstanding but not included in the computation of diluted earnings per common share because their effect would have been anti-dilutive.

For the three and six months ended March 31, 2025, average options to purchase 126,540 and 111,213 shares of common stock, respectively, were outstanding but not included in the computation of diluted earnings per common share because their effect would have been anti-dilutive.

(7) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The changes in accumulated other comprehensive income (loss) ("AOCI") by component during the three months ended December 31, 2025 and 2024, are as follows (dollars in thousands):

Three Months Ended Three Months Ended

December 31, 2025 December 31, 2024

Changes in fair value of available for sale securities Total Changes in fair value of available for sale securities Total

The changes in accumulated other comprehensive income (loss) ("AOCI") by component during the three and six months ended March 31, 2026 and 2025, are as follows (dollars in thousands):

Three Months Ended Six Months Ended

March 31, 2026 March 31, 2025 March 31, 2026 March 31, 2025

Changes in fair value of available for sale securities (1) Changes in fair value of available for sale securities (1) Changes in fair value of available for sale securities (1) Changes in fair value of available for sale securities (1)

Balance of AOCI at the beginning of period $ ( 233 ) $ ( 792 ) $ ( 298 ) $ 20

10 unchanged sentences

Restricted stock awards typically vest in equal annual installments over a three - or five-year period beginning on the first anniversary of the grant date.

At December 31, 2025, 132,935 shares of common stock remained available for further issuance under the 2019 Plan, either as stock options or restricted stock.

At March 31, 2026, 132,935 shares of common stock remained available for further issuance under the 2019 Plan, either as stock options or restricted stock.

The Company's 2014 Equity Incentive Plan (the "2014 Plan") expired on January 27, 2025;

therefore, no further awards may be granted under the plan.

As of December 31, 2025, there were 109,890 shares outstanding that had been previously granted in the 2014 Plan, of which 98,090 were vested and 11,800 were unvested.

Stock option activity for the three months ended December 31, 2025 and 2024, is summarized as follows:

Three Months Ended December 31, 2025 Three Months Ended December 31, 2024

As of March 31, 2026, there were 89,375 options outstanding to purchase that had been previously granted under the 2014 Plan, of which 77,775 were vested and 11,600 were unvested.

Stock option activity for the six months ended March 31, 2026 and 2025, is summarized as follows:

Six Months Ended March 31, 2026 Six Months Ended March 31, 2025

Number of Shares Weighted

5 unchanged sentences

The fair value of stock options is determined using the Black-Scholes valuation model.

There were no stock options granted during the three months ended December 31, 2025 and 2024.

The aggregate intrinsic value of options exercised during the three months ended December 31, 2025 and 2024 was $ 201,000 and $ 239,000 , respectively.

At December 31, 2025, there were 33,400 unvested options with an aggregate grant date fair value of $ 223,000 , all of which the Company assumes will vest.

The aggregate intrinsic value of unvested options at December 31, 2025 was $ 268,000 .

There were 100 options that vested during the three months ended December 31, 2025 with a total fair value of $ 326 .

At December 31, 2024, there were 76,530 unvested options with an aggregate grant date fair value of $ 464,000 .

There were 100 options that vested during the three months ended December 31, 2024 with a total fair value of $ 326 .

Additional information regarding options outstanding at December 31, 2025, is as follows:

There were no stock options granted during the six months ended March 31, 2026 and 2025.

The aggregate intrinsic value of options exercised during the six months ended March 31, 2026 and 2025 was $ 643,000 and $ 386,000 , respectively.

At March 31, 2026, there were 33,200 unvested options with an aggregate grant date fair value of $ 221,000 , all of which the Company assumes will vest.

The aggregate intrinsic value of unvested options at March 31, 2026 was $ 388,000 .

There were 300 options that vested during the six months ended March 31, 2026 with a total fair value of $ 2,056 .

At March 31, 2025, there were 71,230 unvested options with an aggregate grant date fair value of $ 431,000 .

There were 2,500 options that vested during the six months ended March 31, 2025 with a total fair value of $ 16,000 .

Additional information regarding options outstanding at March 31, 2026, is as follows:

Options Outstanding Options Exercisable

8 unchanged sentences

158,275 $ 26.29 4.6 125,075 $ 25.91 4.1

The aggregate intrinsic value of options outstanding at December 31, 2025 and 2024, was $ 1.84 million and $ 1.45 million , respectively.

As of December 31, 2025, unrecognized compensation cost related to unvested stock options was $ 210,000 , which is expected to be recognized over a weighted average period of 1.16 years.

There were no restricted stock awards granted during the three months ended December 31, 2025 and 2024.

The following table presents the activity related to restricted stock for the three months ended December 31, 2025 and 2024:

Three Months Ended December 31, 2025 Three Months Ended December 31, 2024

The aggregate intrinsic value of options outstanding at March 31, 2026 and 2025, was $ 2.08 million and $ 1.20 million , respectively.

As of March 31, 2026, unrecognized compensation cost related to unvested stock options was $ 168,000 , which is expected to be recognized over a weighted average period of 1.01 years.

There were no restricted stock awards granted during the six months ended March 31, 2026 and 2025.

The following table presents the activity related to restricted stock for the six months ended March 31, 2026 and 2025:

Six Months Ended March 31, 2026 Six Months Ended March 31, 2025

Number of Unvested Shares Weighted Average Grant Date Fair Value Number of Unvested Shares Weighted Average Grant Date Fair Value

1 unchanged sentence

Forfeited ( 2,080 ) 29.50 ( 1,830 ) 28.70

Vested — — ( 200 ) 27.37

Restricted stock outstanding end of period 68,370 $ 32.01 46,985 $ 29.31

1 unchanged sentence

The related stock-based compensation expense is recorded over the requisite service period.

At December 31, 2025, unrecognized compensation cost related to unvested restricted stock awards was $ 2.06 million, which is expected to be recognized over a weighted average period of 2.42 years.

At March 31, 2026, unrecognized compensation cost related to unvested restricted stock awards was $ 1.91 million, which is expected to be recognized over a weighted average period of 2.30 years.

(9) FAIR VALUE MEASUREMENTS

Fair value is defined under GAAP as the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

GAAP requires that valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs.

GAAP requires that valuation techniques maximize the use of observable inputs and

minimize the use of unobservable inputs.

GAAP also establishes a fair value hierarchy which prioritizes the valuation inputs into three levels.

7 unchanged sentences

The estimated fair values of mutual funds are based upon quoted market prices (Level 1).

The Company had no liabilities measured at fair value on a recurring basis at December 31, 2025 and September 30, 2025.

The Company's assets measured at estimated fair value on a recurring basis at December 31, 2025 and September 30, 2025, were as follows (dollars in thousands):

December 31, 2025 Estimated Fair Value

The Company had no liabilities measured at fair value on a recurring basis at March 31, 2026 and September 30, 2025.

The Company's assets measured at estimated fair value on a recurring basis at March 31, 2026 and September 30, 2025, were as follows (dollars in thousands):

March 31, 2026 Estimated Fair Value

Level 1 Level 2 Level 3 Total

12 unchanged sentences

Total $ 5,832 $ 73,272 $ — $ 79,104

There were no transfers among Level 1, Level 2 and Level 3 during the three months ended December 31, 2025 and the year ended September 30, 2025.

There were no transfers among Level 1, Level 2 and Level 3 during the six months ended March 31, 2026 and the year ended September 30, 2025.

The Company may be required, from time to time, to measure certain assets and liabilities at fair value on a non-recurring basis in accordance with GAAP.

9 unchanged sentences

The valuation of OREO and other repossessed assets is subject to significant external and internal judgment (Level 3).

The following table summarizes the balances of assets measured at estimated fair value on a non-recurring basis at December 31, 2025 and September 30, 2025 (dollars in thousands):

The following table summarizes the balances of assets measured at estimated fair value on a non-recurring basis at March 31, 2026 and September 30, 2025 (dollars in thousands):

Estimated Fair Value Total Estimated

December 31, 2025 Level 1 Level 2 Level 3 Fair Value

March 31, 2026 Level 1 Level 2 Level 3 Fair Value

Individually evaluated collateral-dependent loans:

Mortgage loans:

Commercial $ — $ — $ 3,830 $ 3,830

Commercial business loans — — 653 653

9 unchanged sentences

Total $ — $ — $ 398 $ 398

The following table presents quantitative information about Level 3 inputs for financial instruments measured at fair value on a non-recurring basis as of December 31, 2025 and September 30, 2025:

The following table presents quantitative information about Level 3 inputs for financial instruments measured at fair value on a non-recurring basis as of March 31, 2026 and September 30, 2025:

Technique(s) Significant Unobservable Input(s) Range

6 unchanged sentences

The disclosures also do not include estimated fair value amounts for certain items which are not defined as financial instruments but which may have significant value.

The Company does not believe that it would be practicable to estimate a fair value for these types of items as of December 31, 2025 and September 30, 2025.

The Company does not believe that it would be practicable to estimate a fair value for these types of items as of March 31, 2026 and September 30, 2025.

Because GAAP excludes certain items from fair value disclosure requirements, any aggregation of the fair value amounts presented would not represent the underlying value of the Company.

Additionally, the Company uses the exit price notion in calculating the fair values of financial instruments not measured at fair value on a recurring basis.

The recorded amounts and estimated fair values of financial instruments were as follows as of December 31, 2025 and September 30, 2025 (dollars in thousands):

December 31, 2025

The recorded amounts and estimated fair values of financial instruments were as follows as of March 31, 2026 and September 30, 2025 (dollars in thousands):

March 31, 2026

Fair Value Measurements Using:

57 unchanged sentences

The ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted.

The Company does not expect this ASU to impact the Company's consolidated financial statements since there are no PSLs in the loan portfolio.

The Company does not expect this ASU to impact the Company's consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) Narrow-Scope Improvements.

10 unchanged sentences

All of the Company's revenue from contracts with customers within the scope of ASC 606 is recognized in non-interest income with the exception of gains on sales of OREO and gains on sales/disposition of premises and equipment, which are included in non-interest expense.

For the three months ended December 31, 2025, the Company recognized $ 989,000 in service charges on deposits, $ 1.19 million in ATM and debit card interchange transaction fees, $ 24,000 in escrow fees, and $ 23,000 in fee income from non-deposit investment sales included in "Other, net" in non-interest income on the consolidated statement of income, all considered within the scope of ASC 606.

For the three months ended December 31, 2024, the Company recognized $ 999,000 in service charges on deposits,

$ 1.27 million in ATM and debit card interchange transaction fees, $ 18,000 in escrow fees, and $ 1,000 in fee income from non-deposit investment sales.

For the three months ended March 31, 2026, the Company recognized $ 934,000 in service charges on deposits, $ 1.13 million in ATM and debit card interchange transaction fees, $ 28,000 in escrow fees, and $ 12,000 in fee income from non-deposit investment sales included in "Other, net" in non-interest income on the consolidated statement of income, all considered within the scope of ASC 606.

For the six months ended March 31, 2026, the Company recognized $ 1.92 million in service charges on deposits, $ 2.33 million in ATM and debit card interchange transaction fees, $ 52,000 in escrow fees, and $ 36,000 in fee income from non-

deposit investment sales included in "Other, net" in non-interest income on the consolidated statement of income, all considered within the scope of ASC 606.

For the three months ended March 31, 2025, the Company recognized $ 959,000 in service charges on deposits, $ 1.18 million in ATM and debit card interchange transaction fees, $ 17,000 in escrow fees, and $ 1,000 in fee income from non-deposit investment sales.

For the six months ended March 31, 2025, the Company recognized $ 1.96 million in service charges on deposits, $ 2.44 million in ATM and debit card interchange transaction fees, $ 35,000 in escrow fees, and $ 2,000 in fee income from non-deposit investment sales.

If a contract is determined to be within the scope of ASC 606, the Company recognizes revenue when it satisfies its performance obligation.

27 unchanged sentences

Collateral held varies, but may include accounts receivable, inventory, property and equipment, residential real estate, land and income-producing commercial properties.

A summary of the Company's commitments at December 31, 2025 and 2024, are listed below (in thousands):

December 31, 2025 December 31, 2024

A summary of the Company's commitments at March 31, 2026 and 2025, are listed below (in thousands):

March 31, 2026 March 31, 2025

Undisbursed portion of construction loans in process (see Note 4) $ 90,576 $ 75,042

4 unchanged sentences

Management estimates the amount of expected losses related to unfunded, off-balance sheet commitments over the contractual period in which there is exposure to credit risk from a contractual obligation to extend credit, unless the Company has determined that obligation is unconditionally cancellable.

The methodology for calculating the ACL on unfunded loan commitments is similar to the methodology for calculating the ACL on loans but also includes an estimate of the future utilization of the commitment as determined by

historical utilization.

Credit risk associated with the unfunded commitments is consistent with the loss ratio for each loan segment within the ACL for loans.

The ACL on unfunded commitments is recognized in other liabilities and accrued expenses in the consolidated balance sheets and is adjusted as a provision for (recapture of) credit losses on the consolidated income statements.

The ACL on unfunded loan commitments totaled $ 383,000 and $ 307,000 at December 31, 2025 and 2024, respectively

The following table sets forth information for the three months ended December 31, 2025 and 2024, regarding activity in the ACL on unfunded loan commitments (dollars in thousands):

Three Months Ended December 31, 2025 Three Months Ended December 31, 2024

The ACL on unfunded loan commitments totaled $ 386,000 and $ 320,000 at March 31, 2026 and 2025, respectively

The following table sets forth information for the three and six months ended March 31, 2026 and 2025, regarding activity in the ACL on unfunded loan commitments (dollars in thousands):

Three Months Ended March 31, 2026 Three Months Ended March 31, 2025

Beginning ACL $ 383 $ 306

1 unchanged sentence

Ending ACL $ 386 $ 320

ACL Six Months Ended March 31, 2026 Six Months Ended March 31, 2025

Beginning ACL $ 432 $ 327

Provision for (recapture of) credit losses ( 46 ) ( 7 )

Ending ACL $ 386 $ 320

The Bank has an employee severance compensation plan which expires in 2027 that provides severance pay benefits to eligible employees in the event of a change in control of Timberland Bancorp or the Bank (as defined in the plan).

7 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements