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, 2004 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 401 (k) Profit Sharing 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
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(a) Financial Statements
The Timberland Bank 401(k) Profit Sharing Plan became effective as of
December 4, 1970, and was restated effective October 1, 2000. Filed as a
part of this report on Form 11-K are the audited financial statements of
the Plan as of September 30, 2004 and 2003 and for the year ended
September 30, 2004.
(b) Exhibit 23 Consent of Independent Auditors
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.
/s/ Dean J. Brydon
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Administrator, Timberland Bank 401 (k) Profit Sharing Plan
By: /s/ Dean J. Brydon
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Dean J. Brydon (name)
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Chief Financial Officer (title)
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Timberland Bank (bank)
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Date: February 11, 2005
Timberland Bank 401(k) Profit Sharing Plan
Financial Report
September 30, 2004
Timberland
Bank
401(k)
Profit
Sharing
Plan
Financial
Report
September 30
2004
Contents
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Report of Independent Registered Public Accounting Firm................... 1
Financial Statements
Statements of Net Assets Available for Benefits........................... 2
Statement of Changes in Net Assets Available for Benefits................. 3
Notes to Financial Statements............................................. 4-7
Supplemental Schedule
Schedule of Assets (Held at End of Year).................................. 8
[McGladrey & Pullen, LLP Letterhead]
Report of Independent Registered Public Accounting Firm
To the Audit Committee of the
Timberland Bank 401(k) Profit Sharing Plan
Hoquiam, Washington
We have audited the accompanying statements of net assets available for
benefits of Timberland Bank 401(k) Profit Sharing Plan (the Plan) as of
September 30, 2004 and 2003, and the related statement of changes in net
assets available for benefits for the year ended September 30, 2004. 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 auditing standards of the Public
Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit 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 financial status of the Plan as of September 30,
2004 and 2003, and the changes in its financial status for the year ended
September 30, 2004, 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 as of
September 30, 2004 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 United States Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the
auditing procedures applied in the audits 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.
/s/McGladrey & Pullen, LLP
McGladrey & Pullen, LLP
Tacoma, Washington
December 2, 2004
Financial
Statements
Statements of Net Assets Available for Benefits
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Timberland Bank 401(k) Profit Sharing Plan
September 30, 2004 and 2003
2004 2003
Assets
Investments (participant directed) $7,251,672 $6,500,372
Employer contributions receivable 553,629 496,776
Employee receivable 6,113 - -
Cash 7,704 5,805
Accrued income 472 400
Total assets 7,819,590 7,003,353
Liabilities - - - -
Net assets available for benefits $7,819,590 $7,003,353
See notes to financial statements.
2
Statement of Changes in Net Assets Available for Benefits
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Timberland Bank 401(k) Profit Sharing Plan
Year Ended September 30, 2004
Additions to Net Assets
Investment income:
Net appreciation in fair value of investments $ 34,350
Dividends 104,660
Total investment income 139,010
Contributions:
Employer 553,629
Participant 249,193
Total contributions 802,822
Total additions to net assets 941,832
Deductions from Net Assets
Benefits paid to participants 103,128
Administrative expenses 22,467
Total deductions from net assets 125,595
Net increase 816,237
Net Assets Available for Benefits
Beginning of year 7,003,353
End of year $7,819,590
See notes to financial statements.
3
Notes to Financial Statements
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Timberland Bank 401(k) Profit Sharing Plan
September 30, 2004 and 2003
Note 1 - Description of the Plan
The following description of Timberland Bank 401(k) Profit Sharing Plan (the
Plan) provides only general information. Participants should refer to the
Plan agreement for a more complete description of the Plan's provisions.
General
The Plan is a defined contribution plan covering substantially all full-time
employees of Timberland Bank (the Company) who have one year of service and
are age twenty-one or older. It is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA). The Company is the wholly
owned subsidiary of Timberland Bancorp, Inc.
Contributions and Participant Investment Options
The Plan participants may contribute up to the maximum of pretax annual
compensation as set by law. Participants may also contribute amounts
representing distributions from other qualified defined benefit or defined
contribution plans. The Company makes an annual safe harbor contribution of
3% of eligible compensation, with additional amounts contributed at the option
of its board of directors. For the year ended September 30, 2004, the Company
contributed a total of 10% of total eligible participant compensation.
Participants must direct their salary deferral contributions and their
allocated share of the safe harbor contribution and the employer
contributions, if any, into a variety of investment choices, as made available
and determined by the Plan administrator, which are more fully described in
the Plan's literature.
Participant Accounts
Each participant's account is credited with the participant's contribution and
allocations of: (a) the Company's contributions, (b) Plan earnings, and (c)
forfeitures of terminated participants' nonvested accounts and charged with an
allocation of administrative expenses. Allocations are based on participant
earnings or account balances, as defined. The benefit to which a participant
is entitled is the benefit that can be provided from the participant's vested
account.
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, 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 age 65, or
if the participant's separation from service is a result of death or
disability.
(continued)
4
Notes to Financial Statements
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Timberland Bank 401(k) Profit Sharing Plan
September 30, 2004 and 2003
Note 1 - Description of the Plan (concluded)
Payment of Benefits
On termination of service, a participant with an accrued benefit of $5,000 or
less will receive a lump-sum amount equal to the value of the vested interest
in their account. The distribution date will be the earliest administratively
feasible date for participants that attain normal retirement age or age 55
with 10 years of service. Distributions for participants that do not meet
these requirements will be made as soon as administratively feasible in the
Plan year following separation of service. Participants with an accrued
benefit in excess of $5,000 may leave the funds in the Plan or elect to
receive a lump-sum distribution.
Forfeited Accounts
At September 30, 2004, forfeited, nonvested accounts totaled $27,721. These
accounts will be reallocated to participants in the same manner as employer
contributions.
Note 2 - Summary of 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 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. Actual
results could differ from these estimates.
Investment Valuation and Income Recognition
The Plan's investments are stated at fair value. Quoted market prices are
used to value common stock and mutual funds. Shares of mutual funds are
valued at the net asset value of shares held by the Plan at year-end.
Purchases and sales of securities are recorded on the trade-date basis.
Dividends are recorded on the ex-dividend date.
Payment of Benefits
Benefits are recorded when paid.
5
Notes to Financial Statements
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Timberland Bank 401(k) Profit Sharing Plan
September 30, 2004 and 2003
Note 3 - Investments
The following presents, separately, identified investments that represent 5%
or more of the Plan's net assets at September 30:
2004 2003
Timberland Bancorp, Inc. Common Stock $4,345,658 $4,799,885
Mutual Funds
First American Small Cap Growth Fund 758,499 238,382
First American Strategy Growth Allocation Fund 732,259 311,848
First American Equity Index Fund 564,923 226,270
First American Prime Obligations Fund 474,973 708,239
First American Strategy Aggressive Allocation Fund 375,360 215,748
$7,251,672 $6,500,372
** The fund balance has been included in other - mutual funds, as the fund
did not exceed 5% of the Plan's net assets at year-end.
During 2004 the Plan's investments, including gains and losses on investments
bought and sold, as well as held during the year, appreciated in value by
$34,350 as follows:
Mutual funds $142,403
Common stock (108,053)
Net appreciation in fair value of investments $ 34,350
Note 4 - Plan Termination
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate
the Plan, subject to the provisions of ERISA. In the event of Plan
termination, participants will become 100% vested in their accounts. Any
unallocated assets of the Plan shall be allocated to participant accounts and
distributed in such a manner as the Company may determine.
6
Notes to Financial Statements
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Timberland Bank 401(k) Profit Sharing Plan
September 30, 2004 and 2003
Note 5 - Tax Status/Non-Standardized Prototype Plan
Effective October 1, 1997, the Plan adopted a nonstandardized form of a
prototype plan sponsored by Actuarial Planning Group, Inc. The prototype plan
received an opinion letter, dated August 30, 2001, from the Internal Revenue
Service which stated that the Plan, as then designed, was in compliance with
the applicable requirements of the Internal Revenue Code. The Plan has been
amended subsequent to receiving the opinion letter. However, the Plan
administrator believes the Plan is designed and is being operated in
compliance with the applicable provisions of the Internal Revenue Code.
The Internal Revenue Service is currently examining the Plan's records and tax
filings for the year ended September 30, 2002. Management has not received
notification of any issues and believes there will be no findings that would
affect reported amounts or the Plan's exempt status.
Note 6 - Administration of Plan Assets
Certain Plan investments are shares of mutual funds managed by US Bank. US
Bank is the trustee, as defined by the Plan; therefore, these transactions
qualify as party-in-interest transactions. Fees paid by the Plan for
investment management services amounted to $22,467 for the year ended
September 30, 2004.
Certain administrative functions of the Plan are performed by officers or
employees of the Company. No such officers or employees receive compensation
from the Plan. Other administrative and management fees of the Plan are paid
directly by the Company.
Note 7 - 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 values of investment securities
will occur in the near term, and that such changes could materially affect
participant account balances and the amounts reported on the statements of net
assets available for benefits.
7
Supplemental
Schedule
Schedule of Assets (Held at End of Year)
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Timberland Bank 401(k) Profit Sharing Plan
September 30, 2004
EIN: 91-0260220
Plan Number: 001
(a) and (b) (c) (d) (e)
Identity of Cost Current
Issue, Description of Investment, Value
Borrower, Including Maturity Date,
Lessor or Rate of Interest, Collateral,
Similar Party Par or Maturity Value (pv or mv)
** US Bank First American Strategy Aggressive
Allocation Fund * $ 375,360
** US Bank First American Prime Obligations Fund * 474,973
** US Bank First American Equity Index Fund * 564,923
** US Bank First American Strategy Growth
Allocation Fund * 732,259
** US Bank First American Small Cap Growth Fund * 758,499
** Timberland
Bancorp, Inc. Common Stock, $0.01 par value * 4,345,658
$7,251,672
* Historical cost not required for participant-directed accounts.
** Represents a party-in-interest.
8
[McGladrey & Pullen, LLP Letterhead]
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-116163, filed June 4, 2004) of Timberland
Bancorp, Inc. of our report dated December 2, 2004, appearing in this Annual
Report on Form 11-K of Timberland Bank 401(k) Profit Sharing Plan for the year
ended September 30, 2004.
/s/McGladrey & Pullen, LLP
McGladrey & Pullen, LLP
Tacoma, Washington
February 14, 2005