FORM 11-K
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended September 30, 2009
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-23333
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
Timberland Bank Employee Stock Ownership and 401(k) Plan
B. Name of issuer of securities held pursuant to the plan and the
address of its principal executive office:
Timberland Bank
624 Simpson Avenue
Hoquiam, Washington 98550
Financial Statements and Exhibits
Page
(a) Reports of Independent Registered Public Accounting Firm 1
(b) Financial Statements
Statements of Net Assets Available for Benefits
at September 30, 2009 and 2008 3
Statement of Changes in Net Assets Available for Benefits
for the Year Ended September 30, 2009 5
Notes to the Financial Statements 6
(c) Supplemental Schedule
Schedule H, Line 4i Schedule of Assets (Held at End of Year) 13
(d) Exhibit 23 Consent of Independent Registered Public
Accounting Firm 15
Signatures
The Plan: Pursuant to the requirements of the Securities and Exchange Act
of 1934, the trustees (or other persons who administer employees benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
----------------------------------------------
Administrator, Timberland Bank Employee Stock Ownership and 401(k) Plan
By: /s/ Dean J. Brydon
------------------------------
Dean J. Brydon (name)
------------------------------
Chief Financial Officer (title)
------------------------------
Timberland Bank (bank)
------------------------------
Date: March 24, 2010
Timberland Bank Employee Stock Ownership and 401(k) Plan
Financial Report
September 30, 2009
Timberland
Bank
Employee
Stock
Ownership
And
401(k)
Plan
Financial
Report
September 30
2009
Contents
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Report of Registered Independent Public Accounting Firm................ 1
Financial Statements
Statements of Net Assets Available for Benefits......................... 2-3
Statement of Changes in Net Assets Available for Benefits............... 4
Notes to Financial Statements........................................... 5-12
Supplemental Schedule
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)..........13-14
[Letterhead of PMB Helin Donovan, LLP]
Report of Independent Registered Public Accounting Firm
To: Plan Administrator, Investment, and Benefit Committees
of Timberland Bank Employee Stock Ownership and 401(k) Plan
We have audited the accompanying statements of net assets available for
benefits of the Timberland Bank Employee Stock Ownership and 401(k) Plan (the
Plan) as of September 30, 2009 and 2008 and the related statement of changes
in net assets available for benefits for the year then ended September 30,
2009. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
September 30, 2009 and 2008, and the changes in net assets available for
benefits for the year ended September 30, 2009, in conformity with U.S.
generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule H, line 4i
schedule of assets (held at end of year) as of September 30, 2009 is presented
for the purpose of additional analysis and is not a required part of the basic
financial statements, but is supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The supplemental
schedule is the responsibility of the Plan's management. The supplemental
schedule has been subjected to the auditing procedures applied in the audit of
the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
PMB Helin Donovan, LLP
/s/PMB Helin Donovan, LLP
Spokane, Washington
March 19, 2010
Financial
Statements
Statements of Net Assets Available for Benefits
------------------------------------------------------------------------------
Timberland Bank Employee Stock Ownership and 401(k) Plan
September 30, 2009
September 30, 2009
Partici- Nonparticipant-Directed
pant ------------------------
Directed Allocated Unallocated Total
Assets
Investments, at fair value:
Stable Value Common
Collective Trust Fund $ 570,798 $ - - $ - - $ 570,798
Other common collective
trust funds 5,678,533 - - - - 5,678,533
Timberland Bancorp, Inc.
("Bancorp") common stock 1,686,671 2,555,502 1,554,644 5,796,817
---------- ---------- ---------- -----------
Total investments 7,936,002 2,555,502 1,554,644 12,046,148
Cash 65,360 16,653 2,304 84,317
---------- ---------- ---------- -----------
Total assets 8,001,362 2,572,155 1,556,948 12,130,465
Liabilities
Note payable - - - - 3,811,270 3,811,270
Net assets available at ---------- ---------- ---------- -----------
fair value 8,001,362 2,572,155 (2,254,322) 8,319,195
Adjustment from fair value to
contract value for fully
benefit-responsive
investment contracts (32,836) - - - - (32,836)
Net assets available ---------- ---------- ---------- -----------
for benefits $7,968,526 $2,572,155 ($2,254,322) $ 8,286,359
========== ========== ========== ===========
See notes to financial statements.
2
Statements of Net Assets Available for Benefits
------------------------------------------------------------------------------
Timberland Bank Employee Stock Ownership and 401(k) Plan
September 30, 2008
September 30, 2008
Partici- Nonparticipant-Directed
pant ------------------------
Directed Allocated Unallocated Total
Assets
Investments, at fair value:
Stable Value Common
Collective Trust Fund $ 44,814 $ - - $ - - $ 44,814
Other common collective
trust funds 5,525,538 - - - - 5,525,538
Timberland Bancorp, Inc.
("Bancorp") common stock 2,377,796 3,952,209 2,795,763 9,125,768
---------- ---------- ---------- -----------
Total investments 7,948,148 3,952,209 2,795,763 14,696,120
Cash 73,179 1,260 1,901 76,340
---------- ---------- ---------- -----------
Total assets 8,021,327 3,953,469 2,797,664 14,772,460
Liabilities
Note payable - - - - 4,062,700 4,062,700
Net assets available at ---------- ---------- ---------- -----------
fair value 8,021,327 3,953,469 (1,265,036) 10,709,760
Adjustment from fair value to
contract value for fully
benefit-responsive
investment contracts 3,131 - - - - 3,131
Net assets available ---------- ---------- ---------- -----------
for benefits $8,024,458 $3,953,469 ($1,265,036) $10,712,891
========== ========== ========== ===========
See notes to financial statements.
3
Statement of Changes in Net Assets Available for Benefits
------------------------------------------------------------------------------
Timberland Bank Employee Stock Ownership and 401(k) Plan
Year Ended September 30, 2009
Partici- Nonparticipant-Directed
pant ------------------------
Directed Allocated Unallocated Total
Additions to net assets
Investment income:
Net appreciation (deprecia-
tion) in fair value of
investments:
Stable Value Common
Collective Trust Fund $ 6,071 $ - - $ - - $ 6,071
Other common collective
trust funds (67,790) - - - - (67,790)
Bancorp common stock (933,535) (1,835,198) (785,258) (3,553,991)
Interest and dividends 134,263 206,522 139,550 480,335
Contributions:
Employer 474,747 - - 258,185 732,932
Participant 473,932 - - - - 473,932
Allocation of 35,266.74 shares
of Bancorp common stock - - 264,324 - - 264,324
---------- ---------- ---------- -----------
Total additions to net
assets 87,688 (1,364,352) (387,523) (1,664,187)
---------- ---------- ---------- -----------
Deductions from net assets
Interest expense - - - - 337,439 337,439
Benefit payments 143,620 16,962 - - 160,582
Allocation of 35,266.74 shares
of Bancorp common stock - - - - 264,324 264,324
Total deductions from ---------- ---------- ---------- -----------
net assets 143,620 16,962 601,763 762,345
---------- ---------- ---------- -----------
Net decrease (55,932) (1,381,314) (989,286) (2,426,532)
Net assets available for benefits
Beginning of year 8,024,458 3,953,469 (1,265,036) 10,712,891
---------- ---------- ---------- -----------
End of year $7,968,526 $2,572,155 ($2,254,322) $ 8,286,359
========== ========== ========== ===========
See notes to financial statements.
4
Notes to Financial Statements
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Timberland Bank Employee Stock Ownership and 401(k) Plan
September 30, 2009 and 2008
Note 1 - Plan Description and Basis of Presentation
The following description of the Timberland Bank Employee Stock Ownership and
401(k) Plan ("Plan") provides only general information. Participants should
refer to the Plan agreement for a more complete description of the Plan's
provisions.
General
Effective October 1, 2006 Timberland Bank ("Company") established the Plan by
combining the existing Timberland Bank Employee Stock Ownership Plan and the
Timberland Bank 401(k) Profit Sharing Plan. The Plan is comprised of two
components, a defined contribution 401(k) plan and a leveraged employee stock
ownership plan ("ESOP"). It is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA) and is designed to comply with
Section 4975(e)(7) and the regulations thereunder of the Internal Revenue Code
of 1986, as amended ("Code"). The Plan is administered by Pentegra Retirement
Services and Pentegra Trust Company is the trustee for Timberland Bancorp,
Inc. stock and Reliance Trust Company is the trustee for all other funds in
the plan. The Company is the wholly owned subsidiary of Timberland Bancorp
Inc. ("Bancorp").
The Plan purchased Bancorp common stock using proceeds borrowed from Bancorp
to fund the ESOP portion of the plan. The borrowing is to be repaid over a
period of 21.25 years by fully deductible Company contributions to the Plan.
As the Plan makes each payment of principal and interest, an appropriate
percentage of stock is committed to be released and annually the Plan
allocates committed stock to eligible employee accounts, in accordance with
applicable Code regulations.
The borrowing is collateralized by unallocated shares of stock and guaranteed
by the Company. Bancorp has no rights against shares once they are allocated
under the Plan. Accordingly, the accompanying financial statements present,
separately, assets and liabilities, and changes therein pertaining to:
* The accounts of employees with vested rights in allocated stock
(Allocated)
* Stock not yet allocated to employees (Unallocated)
Voting Rights
Each participant may direct the trustee as to the voting rights attributable
to shares of Bancorp common stock held in the ESOP component of the Plan,
which are allocated to the participant's stock account. Any allocated shares
in which voting instructions are not received, unallocated shares, and shares
held in the 401(k) component of the Plan are voted by the trustee in the same
proportion as shares for which the trustee receives voting instructions.
Eligibility
The Plan covers substantially all full-time employees of the Company who have
one year of service and are 21 years of age or older. Employees are generally
eligible to participate upon the completion of at least 1,000 hours of service
within a 12-month period. Participants who do not have at least 1,000 hours
of service during such Plan year, or who are not employed on the last working
day of the Plan year, are not eligible for an allocation of the ESOP
contribution for that year. The Plan provides entry dates on the first day of
each calendar quarter.
5
Notes to Financial Statements
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Timberland Bank Employee Stock Ownership and 401(k) Plan
September 30, 2009 and 2008
Note 1 - Plan Description and Basis of Presentation (continued)
401(k) and Company Contributions and Participant Investment Options
The Plan participants may contribute into the 401(k) component up to the
maximum of pretax annual compensation as set by law ($16,500 for 2009 and
$15,500 for 2008). Participants may also contribute amounts representing
distributions from other qualified defined benefit or defined contribution
plans (rollover contributions). The Company makes an annual safe harbor
contribution of three percent of eligible compensation, with additional
amounts contributed at the option of its Board of Directors. The Company also
makes contributions necessary to repay the loan from the Bancorp that was used
to acquire Bancorp stock.
Participants may direct the investments of their 401(k) salary deferral
contributions, safe harbor contribution and the employer discretionary
contribution, if any, into a variety of investment choices, which are more
fully described in the Plan's literature.
Participants age 50 and older during the Plan year are permitted to make
elective catch-up deferrals in accordance with Section 414(v) of the Code.
For 2009 and 2008, the maximum catch-up deferral by law was $5,500 and $5,000,
respectively.
Participant Accounts and Forfeitures
Each participant's account is credited with allocations of the (a) Company's
safe-harbor and discretionary contributions, (b) Company stock released as a
result of the ESOP loan repayments, (c) Participants 401(k) and catch-up
contributions, (d) the Plan's earnings and (e) the forfeitures of terminated
participants' nonvested accounts. ESOP allocations and Company discretionary
contributions are based upon the relation of the participant's compensation to
total eligible Plan compensation for the Plan year. Dividends from Bancorp
common stock in the ESOP component are used, along with Company contributions,
to make payments on the ESOP loan. Dividends earned on allocated shares are
credited to participant accounts in the form of Bancorp stock equal to the
fair market value of the stock at the time of the dividend. Forfeited
balances of terminated participant nonvested accounts are treated as
discretionary contributions for the Plan year in which the forfeitures occur.
Forfeitures allocated for the years ended September 30, 2009 and 2008, totaled
$10,936 and $16,024, respectively for the ESOP part of the Plan. For the
years ended September 30, 2009 and 2008, the 401(k) forefeitures totaled
$6,586 and $16,884, respectively.
Benefit Payments and Plan Amendments
On termination of service, a participant whose vested Plan accounts totaled
$1,000 or less will receive a lump-sum amount equal to the value of the vested
interest in their account. A Participant whose vested Plan accounts exceed
$1,000 may leave the funds in the Plan or elect to receive a lump sum
distribution or a distribution over a certain period in monthly, quarterly,
semiannual or annual installments equal to the value of the vested interest in
his or her accounts. A participants vested Plan accounts will be distributed
upon attaining age 65, unless an election has been made to defer or accelerate
the distribution of benefits. All distributions from the 401(k) component are
in cash. Distributions from the ESOP component are in the form of Bancorp
common stock or cash as elected by the participant. During the year ended
September 30, 2009, the Plan distributed 7,964 shares of Bancorp common stock
from the ESOP component.
6
Notes to Financial Statements
------------------------------------------------------------------------------
Timberland Bank Employee Stock Ownership and 401(k) Plan
September 30, 2009 and 2008
Note 1 - Plan Description and Basis of Presentation (continued)
Vesting
Participants are immediately vested in all deferral, rollover and safe harbor
contributions, plus actual earnings thereon. Vesting in the Company's
discretionary contribution portion of accounts, the ESOP, plus earnings
thereon, is based on years of credited service. Participants are fully vested
after six years of credited service. A participant's accrued benefit derived
from employer contributions is also 100% nonforfeitable upon attaining the age
of 65, or if the participant's separation from service is a result of death or
disability.
ESOP Component Diversification
Effective October 1, 2007, diversification is offered to a participant that
has three years or more of service with the Company. They may diversify their
entire ESOP balance or any portion they choose. The divestment may be
directed into the same fund choices available for the 401(k) component of the
plan. Divestment and reinvestment may occur once a month. During the plan
year ended September 30, 2009 there were 706 shares or $4,962 that were
diversified out of the ESOP component of the Plan.
Plan Termination
The Company reserves the right to terminate the Plan at any time, subject to
Plan provisions. Upon termination of the Plan, the interest of each
participant will be distributed to the participant or to their beneficiary at
the time prescribed by the Plan terms and the Code. In the event of Plan
termination, participants will become 100 percent vested in their accounts.
Note 2 - Summary of Significant Accounting Policies
Basis of Accounting
The financial statements of the Plan are prepared under the accrual method of
accounting.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities, and changes therein, and the disclosure of contingent assets and
liabilities, at the date of the financial statements. Actual results could
differ from those estimates.
Investment Valuation and Income Recognition
The Plan's investments at September 30, 2009 and 2008 consist of common
collective trust funds and Bancorp common stock; both of which are stated at
fair value. Quoted market prices are used to value shares of Bancorp common
stock. The Plan's interest in the common collective trust funds are based on
the fair values of the common collective trust funds' underlying investments,
based on net asset value information reported by the investment manager (State
Street Global Advisors) to the asset custodian (Reliance Trust Company) and
trustee (Reliance Trust Company and Pentegra Trust Company). Fluctuations in
market value are reflected as net appreciation (depreciation) in fair value of
investments.
7
Notes to Financial Statements
------------------------------------------------------------------------------
Timberland Bank Employee Stock Ownership and 401(k) Plan
September 30, 2009 and 2008
Note 2 - Summary of Significant Accounting Policies (continued)
Investment Valuation and Income Recognition (concluded)
Purchases and sales of securities are recorded on the trade-date basis.
Interest income is recognized when earned. Dividends are recorded on the
ex-dividend date.
As of December 31, 2008, the Plan adopted the FASB issued staff position on
interim disclosures about fair value of financial instruments for financial
assets and liabilities. The FASB guidance defines fair value, and increases
disclosures surrounding fair value calculations.
Payment of Benefits
Benefits are recorded when paid.
Fully Benefit-Responsive Investment Contracts
As described in the Financial Accounting Standards Board ("FASB") Audit
Guidance for Reporting of Fully Benefit-Responsive Investment Contracts Held
by Certain Investment Companies Subject to the American Institute of Certified
Public Accountants Investing Company Guide and Defined-Contribution Health and
Welfare and Pension Plans, investment contracts held by a defined contribution
plan are required to be reported at fair value. However, contract value is
the relevant measurement attributed for that portion of the net assets
available for benefits of a defined contribution plan attributable to fully
benefit-responsive investment contracts because contract value is the amount
participants would receive if they were to initiate permitted transactions
under the terms of the Plan. The Plan invests in investment contracts through
a common collective trust fund. Contract value for this common collective
trust fund is based on the net asset value of the fund, as reported by the
investment manager. As required by the FASB guidance, the statements of net
assets available for benefits present the fair value of the investment in the
common collective trust funds as well as the adjustment of the investment in
the common collective trust fund from fair value to contract value relating to
the investment contracts. The statement of changes in net assets available
for benefits is prepared on a contract value basis. The provisions of the
FASB guidance for reporting of fully benefit-responsive investment contracts
have been applied to the statement of net assets available for benefits as of
September 30, 2009 and 2008.
Note 3 - Tax Status
The Plan obtained its latest determination letter dated December 19, 2001, in
which the Internal Revenue Service stated that the Plan, as then designed, was
in compliance with the applicable requirements of the Code. The Plan has been
amended since receiving the determination letter; however, the Plan
Administrator believes the Plan is designed and operating in compliance with
the applicable requirements of the Code.
Note 4 - Administration of Plan Assets
Certain administrative functions of the Plan are performed by officers and
employees of the Company. No such officers or employees receive compensation
from the Plan. The Company also retained the services of a third party to
perform administrative functions. Administrative expenses are paid directly
by the Company and approximated $22,415 for the year ended September 30, 2009.
8
Notes to Financial Statements
------------------------------------------------------------------------------
Timberland Bank Employee Stock Ownership and 401(k) Plan
September 30, 2009 and 2008
Note 5 - Investments
The following presents, separately, identified investments that represent five
percent or more of the Plan's net assets and Bancorp common stock at September
30:
September 30, 2009
Partici- Nonparticipant-Directed
pant ------------------------
Directed Allocated Unallocated Total
Bancorp common stock
Number of shares 363,507 550,755 335,052 1,249,314
Market value $1,686,671 $2,555,502 $1,554,644 $ 5,796,817
State Street Global Advisors
Common Collective Trust
Short Term Investment Fund 1,543,161 - - - - 1,543,161
State Street Global Advisors
Moderate Strategic Balanced
SL Fund 849,560 - - - - 849,560
State Street Global Advisors
Russell 2000 Index SL Series
Fund - Class A 723,875 - - - - 723,875
State Street Global Advisors
Aggressive Strategic
Balanced SL Fund 689,030 - - - - 689,030
Other (including common
collective trust funds) 2,443,705 - - - - 2,443,705
Total investments at ---------- ---------- ---------- -----------
fair value $ 7,936,002 $2,555,502 $1,554,644 $12,046,148
========== ========== ========== ===========
9
Notes to Financial Statements
------------------------------------------------------------------------------
Timberland Bank Employee Stock Ownership and 401(k) Plan
September 30, 2009 and 2008
Note 5 - Investments (continued)
September 30, 2008
Partici- Nonparticipant-Directed
pant ------------------------
Directed Allocated Unallocated Total
Bancorp common stock
Number of shares 314,940 523,471 370,300 1,208,711
Market value $2,377,796 $3,952,209 $2,795,763 $ 9,125,768
State Street Global Advisors
Common Collective Trust
Short Term Investment Fund 1,724,668 - - - - 1,724,668
State Street Global Advisors
Moderate Strategic Balanced
SL Fund 784,300 - - - - 784,300
State Street Global Advisors
Russell 2000 Index SL Series
Fund - Class A 783,248 - - - - 783,248
Other (including common
collective trust funds) 2,278,136 - - - - 2,278,136
Total investments at ---------- ---------- ---------- -----------
fair value $7,948,148 $3,952,209 $2,795,763 $14,696,120
========== ========== ========== ===========
During the year ended September 30, 2009 the Plan's investments, including
gains and losses on investments bought and sold, as well as held during each
period, appreciated (depreciated) in value as follows:
Stable Value Common Collective Trust Fund $ 6,071
Other common collective trust funds (67,790)
Bancorp common stock (3,553,991)
Net depreciation in fair value of investments ($3,615,710)
The Pentegra Stable Value Fund is a collective trust fund administrated by
State Street Global Advisors. The average yield and crediting interest rates
were approximately 2.3% and 2.9%, respectively for 2009.
10
Notes to Financial Statements
------------------------------------------------------------------------------
Timberland Bank Employee Stock Ownership and 401(k) Plan
September 30, 2009 and 2008
Note 6 - Note Payable
On December 19, 2006, the Company approved the extension of the Plan's term
loan agreement with the Bancorp, Inc. (a related party). The new agreement
extends the maturity date of the note to March 31, 2019. The quarterly
payments decreased to $147,217 from $234,269 with the interest rate remaining
at 8.5 percent. The note is guaranteed by the Company and remains
collateralized by unallocated shares of Bancorp common stock. The new annual
principal and interest payments total $588,870 and are due through maturity in
2019.
Note 7 - Employer Contributions
The Company is obligated to make contributions in cash to the Plan for the
ESOP component, which, when aggregated with the Plan's dividends and interest
earnings, equal the amount necessary to enable the Plan to make its regularly
scheduled payments of principal and interest on the term loan of $588,870 for
the year ended September 30, 2009. In addition, the Company is obligated to
make an annual safe-harbor contribution of three percent into the 401(k)
component which was $284,868 for the year ended September 30, 2009. At the
discretion of the Board of Directors, the Company made an additional
contribution to the 401(k) component for the year ended September 30, 2009 in
the amount of two percent of total eligible participant compensation or
$189,879.
Note 8 - Risks and Uncertainties
The Plan invests in various investment securities. Investment securities are
exposed to various risks, such as interest rate, market and credit risks. Due
to the level of risk associated with certain investment securities, it is at
least reasonably possible that changes in the value of investment securities
will occur in the near term and that such changes could materially affect
participants' account balances and the amounts reported on the statement of
net assets available for benefits.
Note 9 - Trustee and Custodian Transfer
Effective June 1, 2009 the Trustee for the Timberland Bancorp, Inc. stock fund
and the ESOP shares in the plan changed from Indiana Bank and Trust to
Pentegra Trust Company. Reliance Trust Company became the Trustee for the
remaining 401(k) funds and the Custodian for all funds and employer stock
within the Plan. On June 30, 2009 all funds and ESOP shares were transferred
to Reliance Trust Company as custodian.
11
Notes to Financial Statements
------------------------------------------------------------------------------
Timberland Bank Employee Stock Ownership and 401(k) Plan
September 30, 2009 and 2008
Note 10 - Fair Value of Investments
As discussed in note 2, the Plan adopted the FASB guidance on fair value of
financial instruments as of December 31, 2008. The FASB guidance established
a three-tiered fair value hierarchy that prioritizes inputs to valuation
techniques in fair value calculations. The three levels of inputs are defined
as follows:
Level 1 - unadjusted quoted prices for identical assets or liabilities in
active markets accessible by the Company.
Level 2 - inputs that are observable in the marketplace other than those
inputs classified as Level 1
Level 3 - inputs that are unobservable in the marketplace and significant to
the valuation
The guidance from FASB on fair value of financial instruments requires the
Plan to maximize the use of observable inputs and minimize the use of
unobservable inputs. If a financial instrument uses inputs that fall in
different levels of the hierarchy, the instrument will be categorized based
upon the lowest level of input that is significant to the fair value
calculation.
The following table summarizes the balances of assets and liabilities measured
at fair value on a recurring basis at September 30, 2009 (in thousands):
Fair Value
---------------------------
Total
Level 1 Level 2 Level 3 Losses
Available for Sale Securities
Timberland Bancorp, Inc. common stock $ 5,797 $ - - $ - - $ 5,797
Stable Value Fund - - 571 - - 571
Other common collective trust funds - - 5,678 - - 5,678
------- ------- ------- -------
Total $ 5,797 $ 6,249 $ - - $12,046
Note 11 - Subsequent Events
The Company evaluates events that occur subsequent to the balance sheet date
of periodic reports, but before financial statements are issued for periods
ending on such balance sheets dates, for possible adjustment to such financial
statements or other disclosure. This evaluation generally occurs through the
date at which the Company's financial statements are available to be issued.
For the financial statements as of and for the periods ending September 30,
2009, this date was March 19, 2010.
12
Supplemental
Schedule
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
------------------------------------------------------------------------------
Timberland Bank Employee Stock Ownership and 401(k) Plan
September 30, 2009
EIN: 20-5645878
Plan #: 002
(a) and (b) (c) (d) (e)
Identity of Issue, Description of Investment, Cost Current
Borrower, Lessor Including Maturity Date, Value
or Similar Party Rate of Interest, Collateral,
Par or Maturity Value
Stable Value Funds
------------------
State Street Global
Advisors Pentegra Stable Value Fund,
at Fair Value $ * $ 570,798
Employer Stock
--------------
**Timberland Bancorp, Inc. Common Stock-885,807 Shares 6,639,123 4,110,146
**Timberland Bancorp, Inc. Common Stock-363,507 Shares * 1,686,671
---------
5,796,817
Other Common Collective Trusts
------------------------------
State Street Global
Advisors Short-Term Investment
Fund (STIF) * 1,543,161
State Street Global
Advisors Moderate Strategic Balanced
SL Fund * 849,560
State Street Global
Advisors Russell 2000 Index SL Series
Fund - Class A * 723,875
State Street Global
Advisors Aggressive Strategic Balanced
SL Fund * 689,030
State Street Global
Advisors S&P 500 Flagship SL Series
Fund - Class A * 594,463
State Street Global
Advisors Daily EAFE Index SL Series
Fund - Class T * 206,854
State Street Global
Advisors S&P Midcap Index SL Series
Fund - Class A * 150,745
State Street Global
Advisors Long US Treasury Index SL
Series Fund Class A * 148,239
State Street Global
Advisors S&P Value Index SL Fund
Series A * 140,002
State Street Global
Advisors NASDAQ 100 Index Non-Lending
Fund Series A * 110,784
State Street Global
Advisors Target Retirement Fund 2025 * 102,116
State Street Global
Advisors REIT Index Non-Lending Series
Fund - Class A * 93,799
State Street Global
Advisors Passive Bond Market Index SL
Series Fund A * 90,805
13
Schedule H, Line 4i - Schedule of Assets (Held at End of Year) (continued)
------------------------------------------------------------------------------
Timberland Bank Employee Stock Ownership and 401(k) Plan
September 30, 2009
EIN: 20-5645878
Plan #: 002
(a) and (b) (c) (d) (e)
Identity of Issue, Description of Investment, Cost Current
Borrower, Lessor Including Maturity Date, Value
or Similar Party Rate of Interest, Collateral,
Par or Maturity Value
Other Common Collective Trusts (continued)
------------------------------------------
State Street Global
Advisors S&P Growth Index SL Fund
Series A * 90,513
State Street Global
Advisors Target Retirement Fund 2015 * 80,148
State Street Global
Advisors Conservative Strategic
Balanced SL Fund * 49,858
State Street Global
Advisors Target Retirement Fund 2035 * 8,783
State Street Global
Advisors Target Retirement Fund 2045 * 5,798
5,678,533
-----------
$12,046,148
===========
* Historical cost not required for participant-directed accounts.
**Represents a party-in-interest
14
[Letterhead of PMB Helin Donovan, LLP]
Consent of Independent Registered Public Accounting Firm
We hereby consent to the incorporation by reference in the Registration
Statement (No. 333-116163, filed June 4, 2004) on Form S-8 of Timberland
Bancorp, Inc. of our report dated March 15, 2010 appearing in this Annual
Report on Form 11-K of Timberland Bank Employee Stock Ownership and 401(k)
Plan for the year ended September 30, 2009.
PMB Helin Donovan, LLP
/s/PMB Helin Donovan, LLP
Spokane, Washington
March 19, 2010