Timberland Ban (TSBK) DIvidends Date & History

Key Takeaways

• Timberland Bancorp pays a quarterly dividend of $0.29 per share, translating to an annualized dividend of $1.16 and a forward dividend yield of approximately 2.59%.
• The payout ratio stands at a conservative 28.71%, indicating ample room for continued dividend payments and future increases without straining earnings.
• Dividend per share has grown 12% year-over-year, with the quarterly payout rising from $0.24 in early 2024 to $0.29 by mid-2026, reflecting a sustained commitment to returning capital to shareholders.
• Free cash flow of $28.4 million in fiscal 2025 comfortably covers annual dividend obligations of approximately $8.1 million, reinforcing dividend safety.
• TSBK's dividend yield exceeds the financial sector average, making it an appealing option among regional bank dividend stocks for income-oriented investors.
• The company has maintained an uninterrupted dividend payment record spanning more than two decades, with 88 total dividend distributions to shareholders.

Dividend Overview

TSBK, the holding company for Timberland Bank, operates as a community-focused financial institution headquartered in Hoquiam, Washington. Founded in 1915, the bank serves consumers and businesses across western and central Washington through 23 branches, offering a full suite of lending and deposit services. Timberland Bancorp pays a quarterly cash dividend, currently set at $0.29 per share following the most recent increase declared in early 2026. On an annualized basis, the dividend totals $1.16 per share, yielding approximately 2.59% based on recent trading levels. The most recent ex-dividend date was May 8, 2026, with the payment distributed on May 22, 2026. With a conservative payout ratio, a demonstrated willingness to raise the dividend regularly, and a payout frequency of four times per year, TSBK fits the profile of a modest-but-reliable dividend growth stock rather than a high-yield play. The company has also historically supplemented its regular dividend with periodic special cash dividends, most recently a $0.10 per share special dividend in November 2022.

Dividend History and Growth

Timberland Bancorp has established a long track record as a consistent dividend payer, distributing dividends to shareholders for more than 20 years without interruption. The company's dividend growth trajectory over the past decade underscores a deliberate and shareholder-friendly capital allocation strategy. In fiscal 2014, the annual dividend stood at just $0.12 per share. By fiscal 2025, that figure had risen to $1.02 per share—representing a compound annual growth rate (CAGR) of approximately 23% over the period. In more recent years, the pace of increases has remained steady: the annual dividend climbed from $0.75 in fiscal 2020 to $0.83 in 2021, $0.87 in 2022, $0.91 in 2023, $0.95 in 2024, and $1.02 in 2025. The quarterly per-share payout rose from $0.24 in early 2024 to $0.25 in November 2024, to $0.26 by mid-2025, to $0.28 in November 2025, and most recently to $0.29 in February 2026. This pattern of incremental, predictable increases—combined with occasional special dividends—reflects management's confidence in the bank's earnings power and its commitment to sharing profits directly with shareholders.

Dividend Sustainability and Payout Ratio

The sustainability of Timberland Bancorp's dividend is supported by a notably low payout ratio of 28.71%, meaning the company distributes less than 30% of its earnings as dividends. This leaves a substantial cushion to maintain or increase the dividend even in periods of moderate earnings pressure. On a free cash flow basis, the coverage is equally robust: in fiscal 2025, Timberland Bancorp generated $28.4 million in free cash flow while paying approximately $8.1 million in total dividends, resulting in a free cash flow dividend coverage ratio of roughly 3.5x. The bank's capital position further reinforces dividend safety. As of March 31, 2026, total capital stood at $271.1 million, with regulatory capital ratios well above minimum requirements. Earnings per share (EPS) for the trailing twelve months reached $3.90, providing strong fundamental support for the $1.16 annual dividend. The bank has also steadily expanded its balance sheet, with total assets surpassing $2 billion by early 2026, supported by disciplined lending and effective deposit gathering. While the bank's geographic concentration in Washington State represents a risk factor tied to regional economic conditions, the conservative payout ratio, strong free cash flow generation, and healthy capitalization collectively indicate that the dividend is well-protected.

Dividend Compared to Industry Peers

Within the regional banking sector, Timberland Bancorp's dividend yield of approximately 2.59% is competitive, particularly when compared against the broader financial sector average yield of roughly 1.35%. Among Pacific Northwest community bank peers, TSBK's yield sits in a moderate range. For context, BANR (Banner Corporation) offers a yield near 2.98%, while COLB (Columbia Banking System) provides a higher yield of approximately 4.78%. FNWB (First Northwest Bancorp) yields around 2.51%, and RVSB (Riverview Bancorp) trails at roughly 1.42%. Where TSBK distinguishes itself is in its payout ratio discipline—at under 30%, it is among the most conservative in its peer group, which suggests greater capacity for future dividend growth relative to higher-yielding competitors that operate with elevated payout ratios. The company's five-year average dividend growth rate of approximately 11.27% also compares favorably to industry averages, positioning TSBK as a dividend grower within a sector where many peers prioritize yield over growth.

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Is This Stock Attractive for Dividend Investors?

Timberland Bancorp's dividend profile is likely to resonate most with dividend growth investors and long-term-oriented income investors who prioritize consistency, safety, and steady increases over maximum current yield. The stock's 2.59% yield, while above the financial sector average, is not among the highest in the regional banking space, meaning pure high-yield seekers may find more income elsewhere. However, the combination of a low payout ratio below 30%, a decade-long history of rising dividends, strong free cash flow coverage, and a robust capital base makes TSBK a compelling candidate for investors focused on dividend reliability and compounding growth over time. The bank's conservative underwriting culture, community-focused business model, and 23-branch Washington footprint provide a stable operating foundation, though geographic concentration is a factor worth monitoring. With a low beta of 0.29, TSBK shares also exhibit relatively low volatility compared to the broader market, which may appeal to conservative investors seeking smoother portfolio performance alongside a growing income stream. As with any equity investment, individual circumstances and risk tolerance should guide decision-making.

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