Timberland Bancorp (TSBK) risk factors, FY2025 10-K

Timberland Bancorp's FY2025 10-K, filed Dec 09, 2025, lists 31 risk factors in 7 groups. Against the prior year's 29: 3 new, 1 dropped, 22 substantially reworded.

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Risk factors listed
317 groups
New this year
3vs 29 last year
Dropped
1since the prior 10-K
Substantially reworded
22of those kept
Section length
9k wordsItem 1A

What the changes say

  • Timberland Bancorp updated risks regarding cannabis banking, artificial intelligence adoption, and accounting model transitions.
  • Portfolio figures for commercial loans, construction loans, and commercial real estate were updated for fiscal 2025.
  • Climate change risks were revised to reflect shifting federal administrative priorities.

What changed since the prior 10-K

New

  • NewRisks Related to Laws and Regulations

    Any new regulations or legislation, changes in existing regulations or oversight, or changes in regulatory interpretation could materially impact our operations, increase our costs of compliance and doing business, and adversely affect our profitability

    Legal cannabis-related businesses accounted for approximately 0.9% of our total deposits as of September 30, 2025, exposing us to regulatory changes and pending legislation like the SAFER Banking Act.

  • NewRisks Related to Cybersecurity, Third Parties and Technology

    While we have policies and procedures designed to prevent such losses, there can be no assurance that such losses will not occur

    Adopting artificial intelligence in financial services introduces model risk, cybersecurity threats like data poisoning, compliance challenges with black-box systems, and operational disruptions.

  • NewRisks Related to Accounting Matters

    adjustments in how we report our financial position, performance, and risk exposures. Additionally, such regulatory changes could necessitate retrospective application, which might result in the restatement of prior period financial statements

    The CECL model adopted on October 1, 2023, uses forward-looking macroeconomic forecasts and assumptions, increasing earnings volatility compared to the prior incurred loss model.

Dropped

  • DroppedRisks Related to Cybersecurity, Third-Parties and Technology

    We rely on other companies to provide key components of our business infrastructure

Reworded

  • 100% rewrittenRisks Related to Accounting Matters

    Our framework for managing risks may not be effective in mitigating risk and loss to us

    Expanded to specify that risks may arise from internal factors, third parties, or unforeseen events, leading to substantial and unexpected losses if risk management is ineffective.

  • 99% rewrittenRisks Related to Economic Conditions

    Monetary policy, inflation, deflation, and other external economic factors could adversely impact our financial performance and operations

    Added explicit references to trade policies, U.S. Treasury, tariffs, supply-chain disruptions, and wage inflation affecting small- and medium-sized business clients.

    Was: External economic factors, such as changes in monetary policy and inflation and deflation, may have an adverse effect on our business, financial condition and results of operations

  • 99% rewrittenRisks Related to Laws and Regulations

    Climate change and related legislative and regulatory initiatives may materially affect our business and results of operations

    Updated to note a federal policy shift under the current administration reducing emphasis on climate change initiatives and easing regulatory pressures on banks.

  • 95% rewrittenRisks Related to our Lending Activities

    Repayment of our commercial business loans is often dependent on the cash flows of the borrower, which may be unpredictable, and the collateral securing these loans may fluctuate in value

    Updated commercial business loan figures to $127.0 million, or 8.1% of total loans, as of September 30, 2025.

  • 94% rewrittenRisks Related to Accounting Matters

    We are subject to an extensive body of accounting rules and best practices. Periodic changes to such rules may change the treatment and recognition of critical financial line items and affect our profitability

    Added FASB and SEC as regulatory bodies and noted that accounting changes may require adopting new standards with potential reporting impacts.

  • 93% rewrittenRisks Related to our Lending Activities

    Our real estate construction and land loans expose us to significant risks

    Updated construction loan figures to $223.89 million (14.2% of total loans), with residential at $186.75 million, commercial at $21.82 million, and land development at $15.32 million as of September 30, 2025.

  • 92% rewrittenRisks Related to our Lending Activities

    Our emphasis on commercial real estate lending may expose us to increased lending risks

    Updated commercial real estate loan figures to $610.69 million, representing 38.8% of total loans, as of September 30, 2025.

  • 90% rewrittenRisks Related to Economic Conditions

    Our business may be adversely affected by downturns in the national economy and in the economies in our market areas

    Expanded local economic downturn factors to include rising interest rates, recessions, and natural disasters across Grays Harbor, Pierce, Thurston, King, Kitsap, and Lewis counties.

  • 90% rewrittenRisks Related to Laws and Regulations

    Non-compliance with the USA PATRIOT Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions and limit our ability to get regulatory approval of acquisitions

  • 84% rewrittenRisks Related to Laws and Regulations

    We operate in a highly regulated environment and may be adversely affected by changes in federal and state laws and regulations that could increase our costs of operations

  • 82% rewrittenRisks Related to Accounting Matters

    Ineffective liquidity management could adversely affect our financial results and condition

  • 77% rewrittenRisks Related to Cybersecurity, Third Parties and Technology

    We are subject to certain risks in connection with our use of technology

  • 75% rewrittenRisk Related to Market Interest Rates

    Changes in interest rates may reduce our net interest income and may result in higher defaults in a rising rate environment

  • 72% rewrittenRisk Related to our Business Strategy

    We may be adversely affected by risks associated with completed and potential acquisitions

  • 70% rewrittenRisks Related to our Lending Activities

    Our business may be adversely affected by credit risk associated with residential property

  • 54% rewrittenRisk Related to Market Interest Rates

    Our securities portfolio may be negatively impacted by fluctuations in market value and interest rates

  • 51% rewrittenRisks Related to our Lending Activities

    Our allowance for credit losses on loans may not be sufficient to absorb losses in our loan portfolio

  • 41% rewrittenRisks Related to Cybersecurity, Third Parties and Technology

    Our business may be adversely affected by an increasing prevalence of fraud and other financial crimes

  • 39% rewrittenRisks Related to Cybersecurity, Third Parties and Technology

    The financial services market is undergoing rapid technological changes and, if we are unable to stay current with those changes, we may not be able to effectively compete

  • 26% rewrittenRisks Related to Accounting Matters

    We may experience decreases in the fair value of our loan servicing rights, which could reduce our earnings

  • 21% rewrittenRisks Related to our Lending Activities

    If our non-performing assets increase, our earnings will be adversely affected

  • 21% rewrittenRisks Related to Accounting Matters

    The Company’s reported financial results depend on management’s selection of accounting methods and certain assumptions and estimates, which, if incorrect, could cause unexpected losses in the future

All 31 risk factors

Headings as the filing states them, in filing order.

Risks Related to Economic Conditions

  1. 01Our business may be adversely affected by downturns in the national economy and in the economies in our market areas90% rewritten
  2. 02Monetary policy, inflation, deflation, and other external economic factors could adversely impact our financial performance and operations99% rewritten

Risks Related to our Lending Activities

  1. 03Our real estate construction and land loans expose us to significant risks93% rewritten
  2. 04Our emphasis on commercial real estate lending may expose us to increased lending risks92% rewritten
  3. 05Repayment of our commercial business loans is often dependent on the cash flows of the borrower, which may be unpredictable, and the collateral securing these loans may fluctuate in value95% rewritten
  4. 06Our business may be adversely affected by credit risk associated with residential property70% rewritten
  5. 07Our allowance for credit losses on loans may not be sufficient to absorb losses in our loan portfolio51% rewritten
  6. 08If our non-performing assets increase, our earnings will be adversely affected21% rewritten

Risk Related to our Business Strategy

  1. 09We may be adversely affected by risks associated with completed and potential acquisitions72% rewritten

Risk Related to Market Interest Rates

  1. 10Changes in interest rates may reduce our net interest income and may result in higher defaults in a rising rate environment75% rewritten
  2. 11Our securities portfolio may be negatively impacted by fluctuations in market value and interest rates54% rewritten
  3. 12An increase in interest rates, change in the programs offered by Freddie Mac or our ability to qualify for their programs may reduce our mortgage revenues, which would negatively impact our non-interest income

Risks Related to Laws and Regulations

  1. 13The level of our commercial real estate loan portfolio may subject us to additional regulatory scrutiny
  2. 14We operate in a highly regulated environment and may be adversely affected by changes in federal and state laws and regulations that could increase our costs of operations84% rewritten
  3. 15Any new regulations or legislation, changes in existing regulations or oversight, or changes in regulatory interpretation could materially impact our operations, increase our costs of compliance and doing business, and adversely affect our profitabilityNew
  4. 16Non-compliance with the USA PATRIOT Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions and limit our ability to get regulatory approval of acquisitions90% rewritten
  5. 17Climate change and related legislative and regulatory initiatives may materially affect our business and results of operations99% rewritten

Risks Related to Cybersecurity, Third Parties and Technology

  1. 18The financial services market is undergoing rapid technological changes and, if we are unable to stay current with those changes, we may not be able to effectively compete39% rewritten
  2. 19We are subject to certain risks in connection with our use of technology77% rewritten
  3. 20Our business may be adversely affected by an increasing prevalence of fraud and other financial crimes41% rewritten
  4. 21While we have policies and procedures designed to prevent such losses, there can be no assurance that such losses will not occurNew

Risks Related to Accounting Matters

  1. 22The Company’s reported financial results depend on management’s selection of accounting methods and certain assumptions and estimates, which, if incorrect, could cause unexpected losses in the future21% rewritten
  2. 23We may experience future goodwill impairment, which could reduce our earnings
  3. 24We are subject to an extensive body of accounting rules and best practices. Periodic changes to such rules may change the treatment and recognition of critical financial line items and affect our profitability94% rewritten
  4. 25adjustments in how we report our financial position, performance, and risk exposures. Additionally, such regulatory changes could necessitate retrospective application, which might result in the restatement of prior period financial statementsNew
  5. 26We may experience decreases in the fair value of our loan servicing rights, which could reduce our earnings26% rewritten
  6. 27If our investments in real estate are not properly valued or sufficiently reserved to cover actual losses, or if we are required to increase our valuation allowances, our earnings could be reduced
  7. 28Ineffective liquidity management could adversely affect our financial results and condition82% rewritten
  8. 29Our growth or future losses may require us to raise additional capital in the future, but that capital may not be available when it is needed or the cost of that capital may be exceedingly high
  9. 30Our framework for managing risks may not be effective in mitigating risk and loss to us100% rewritten
  10. 31We are dependent on key personnel, and the loss of one or more of those key personnel may materially and adversely affect our prospects

Other Timberland Bancorp 10-Ks

  • FY2024 10-K risk factors
    29 risks

    Substantially all loans are concentrated in Washington state, exposing the bank to regional economic and real estate downturns. The loan portfolio includes $219.20 million in construction loans and significant commercial real estate exposure. Earnings depend heavily on net interest income and interest rate fluctuations driven by Federal Reserve policies.

    Filed Dec 11, 2024

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.