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Analogy 1: A community bank for Western Washington, like a local Bank of America.

Analogy 2: JPMorgan Chase, but focused on individual communities in Western Washington.

Analogy 3: A neighborhood bank for Western Washington, similar to a smaller Wells Fargo.

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• Deposit Accounts: Offers various accounts like checking, savings, money market, and certificates of deposit for individuals and businesses to manage and save their funds.
• Real Estate Loans: Provides financing for residential mortgages, commercial properties, and construction projects.
• Commercial Business Loans: Supplies loans and lines of credit to businesses for working capital, equipment, and other operational needs.
• Consumer Loans: Grants personal loans to individuals for purposes such as auto purchases or other personal financing.

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Timberland Bancorp (TSBK)

• Individuals and Consumers: This category includes everyday people who utilize services such as checking accounts, savings accounts, certificates of deposit, money market accounts, personal loans, mortgages (residential real estate loans), and home equity lines of credit.

• Small to Medium-sized Businesses (SMBs): These are local and regional businesses that require commercial banking services. Their needs typically include business checking and savings accounts, commercial real estate loans, working capital loans, lines of credit, equipment financing, and treasury management services.

• Commercial Real Estate Investors and Developers: This customer group includes individuals or entities involved in the acquisition, development, and construction of commercial properties (such as office buildings, retail centers, multi-family housing, and industrial facilities). They seek financing for these projects, which often represents a significant portion of a bank's loan portfolio.

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Dean J. Brydon, Chief Executive Officer

Mr. Brydon has been affiliated with Timberland Bank since 1994 and has served as Chief Executive Officer since February 1, 2023. Previously, he held the position of President from January 24, 2022, to January 31, 2023, and served as Chief Financial Officer from January 2000 to January 31, 2023. Mr. Brydon is a Certified Public Accountant.

Marci A. Basich, Executive Vice President and Chief Financial Officer

Ms. Basich has been affiliated with Timberland Bank since 1999. She has served as Executive Vice President and Chief Financial Officer since February 1, 2023, and as Treasurer of the Company since January 2002. Ms. Basich is a Certified Public Accountant.

Jonathan A. Fischer, President, Chief Operating Officer & Secretary

Mr. Fischer has been affiliated with Timberland Bank since October 1997. He has served as President since February 1, 2023, Chief Operating Officer since August 23, 2012, and Secretary since January 24, 2022. Prior to these roles, Mr. Fischer served as Chief Risk Officer since October 2010. He also held positions as Compliance Officer, Community Reinvestment Act Officer, and Privacy Officer since January 2000.

Matthew J. DeBord, Executive Vice President and Chief Lending Officer

Mr. DeBord has been affiliated with Timberland Bank since 2012. He has served as an Executive Vice President and Chief Lending Officer since April 1, 2023. Before this, Mr. DeBord served as the Commercial Bank Team Leader.

Todd W. Van Cise, Executive Vice President and Chief Credit Officer

Mr. Van Cise has been affiliated with Timberland Bank since August 2012. He has served as an Executive Vice President and Chief Credit Officer since January 1, 2024. His banking career began in 1997 with Union Bank of California's credit training program. Mr. Van Cise has worked for several large and small financial institutions, including Bank of America and West Coast Bank. He is a graduate of the University of Washington's Business School and Pacific Coast Banking School, and he served four years in the United States Army prior to college.

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The key risks to Timberland Bancorp (TSBK) are primarily related to its concentrated loan portfolio, sensitivity to interest rate fluctuations, and potential liquidity challenges.

1. Concentration in Washington State and Real Estate/Construction Loans: Timberland Bancorp has a high concentration of its business in Washington State, making it susceptible to adverse regional economic conditions. A substantial portion of its loan portfolio, specifically 68.44% as of September 30, 2025, consists of commercial real estate and construction loans. These types of loans generally carry higher credit risk, particularly during economic downturns, and the company has observed an increase in classified and substandard loans within these categories.
2. Interest Rate Volatility and Net Interest Margin Compression: As a financial institution, Timberland Bancorp is exposed to interest rate risk. Significant changes in interest rates can compress its net interest margin (NIM), impacting profitability. The company has experienced periods where NIM fell due to historically low interest rates (2020-2022) and where rising funding costs outpaced asset yields. Uncertainty surrounding future interest rate movements, including potential aggressive interest rate cuts, could lead to lower profitability.
3. Liquidity Risk and Deposit Outflows: The business faces liquidity risks if there are accelerated deposit outflows or if market access for funding deteriorates. Competition for deposits remains intense, and customers migrating from non-interest-bearing to interest-bearing accounts can contribute to margin compression, despite the company's efforts to manage funding costs.

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The clear emerging threat to Timberland Bancorp (TSBK), a traditional community bank, stems from the proliferation and increasing adoption of digital-first financial service providers. This includes:

• Fintech Companies and Neobanks: Online-only banks (e.g., Chime, SoFi, Ally Bank) and specialized fintechs offer core banking services such as deposits, loans, and payments with significantly lower operating costs, often resulting in higher interest rates on savings, lower fees, and superior digital user experiences. This directly challenges TSBK's ability to attract and retain customers, particularly younger, digitally-native demographics, and threatens to erode its traditional branch-based customer acquisition model.
• Big Tech Companies Entering Financial Services: Companies like Apple, leveraging their vast user bases and technological prowess, are increasingly offering financial products such as high-yield savings accounts (e.g., Apple Savings with Goldman Sachs), credit cards, and payment services. This represents a formidable threat due to their brand recognition, established ecosystems, and ability to integrate financial services seamlessly into users' daily lives, bypassing traditional banking relationships.

These emerging threats parallel historical disruptions where new, more efficient, or technologically advanced business models displaced incumbents (e.g., Netflix disrupting Blockbuster's physical distribution model, iPhone disrupting BlackBerry's user experience and app ecosystem). They directly threaten TSBK's core business model by offering a more convenient, cost-effective, and digitally-native alternative for banking services.

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Timberland Bancorp (TSBK) operates as a community bank in Western Washington, offering a range of financial products and services. The company primarily serves consumers and businesses across Grays Harbor, Thurston, Pierce, King, Kitsap, and Lewis counties in Washington state. Its main products and services include various deposit products, personal and business banking services, and real estate lending, specifically residential mortgages, construction loans, and commercial real estate loans.

The addressable markets for their main lending products in the specified regions are as follows:

• Residential Mortgage Lending: The market for residential mortgage originations in Washington State saw approximately $70 billion in home loans funded by top lenders in 2021. In 2022, there were 70,949 home sales in Washington, with an average mortgage of $490,217. This indicates a significant annual market for home loans within their operating region.
• Commercial Real Estate Lending: The total commercial real estate (CRE) mortgage borrowing and lending market in the U.S. was estimated at $498 billion in 2024. While this is a national figure, Timberland Bancorp's commercial real estate lending activities in Washington State contribute to and operate within this broader U.S. market.

Market sizing for other specific products like general consumer loans (e.g., auto loans, personal loans) or the broader "community banking services" beyond lending, specifically for Washington State, is not consistently available to provide a definitive market size figure. The aggregated market size figures for "Community Banking" across various sources show significant discrepancies and would require further detailed definition to be accurately presented without caveats, which is outside the scope of this response.

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Timberland Bancorp (TSBK) is expected to drive future revenue growth over the next two to three years through several key strategies:

1. Loan Portfolio Growth: The company's revenue is primarily derived from its community banking operations in western Washington, with a significant portion of its loan portfolio in mortgage loans. Timberland Bancorp plans to continue leveraging its strong loan portfolio to drive future growth. The loan portfolio experienced an impressive 9% growth, or $119 million, in fiscal year 2024, although it saw a slight decrease in the most recent quarter due to increased payoffs.
2. Net Interest Margin (NIM) Expansion: Timberland Bancorp has demonstrated a strategic focus on improving its net interest margin. In the fourth quarter of fiscal 2025, the NIM was 3.82%, a 24-basis point improvement from the same quarter in 2024, with the full-year NIM rising to 3.76% from 3.54% in 2024. This expansion is attributed to higher asset yields and disciplined asset-liability management, indicating a continued focus on optimizing interest income relative to interest expenses.
3. Strategic Branch Expansion: To capture new markets and deepen customer relationships, Timberland Bancorp is undertaking strategic expansion. The company plans to open a new full-service branch in University Place, aiming to tap into a growing market and enhance its commercial banking relationships in the area.
4. Growth in Deposits, particularly Non-Interest-Bearing Deposits: An increase in total deposits, especially non-interest-bearing balances, is a significant driver. Total deposits grew 3% sequentially and 4% year-over-year to $1.72 billion in the fourth quarter of fiscal 2025, with notable growth in non-interest-bearing accounts. This growth provides a stable and lower-cost funding source for the bank's lending activities, thereby supporting net interest income.

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Share Repurchases

• On July 22, 2025, Timberland Bancorp announced a new stock repurchase program authorizing the buyback of up to 5% of its outstanding shares, totaling 393,842 shares. This program replaced a previous one that had 31,762 shares remaining.
• Between July 22, 2025, and September 30, 2025, the company repurchased 56,562 shares for $1.89 million under the new buyback plan.
• Quarterly stock buybacks have shown varying amounts, for example, $1.05 million in Q2 2025, $1.91 million in Q1 2025, and $886,890 in Q4 2024.

Share Issuance

• The number of shares outstanding for Timberland Bancorp has decreased by 1.58% over the past year.
• In 2024, the net common equity issued/repurchased by Timberland Bancorp was -$5 million, indicating a net repurchase of shares.

Inbound Investments

• As of recent filings, 221 institutional owners hold a total of 6,577,268 shares in Timberland Bancorp.
• In Q1 2021, 67 hedge funds and large institutions collectively invested $133 million in Timberland Bancorp, with 7 funds initiating new positions and 20 increasing their existing stakes.