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Regulatory Matters
 12 Months Ended
Sep. 30, 2014
Regulatory Capital Requirements [Abstract]  
Regulatory Matters
Regulatory Matters

Timberland Bancorp and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies.  Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements.  Under capital adequacy guidelines of the regulatory framework for prompt corrective action, the Bank must meet specific capital adequacy guidelines that involve quantitative measures of the Bank’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices.  The capital classifications of Timberland Bancorp and the Bank are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Federally-insured state-chartered banks are required to maintain minimum levels of regulatory capital.  Under current FDIC regulations, insured state-chartered banks generally must maintain (1) a ratio of Tier 1 leverage capital to total assets of at least 4.0%, (2) a ratio of Tier 1 capital to risk weighted assets of at least 4.0% and (3) a ratio of total capital to risk weighted assets of at least 8.0%.



The following table compares Timberland Bancorp’s (consolidated) and the Bank’s actual capital amounts at September 30, 2014 and 2013 to their minimum regulatory capital requirements at those dates (dollars in thousands):

 
Actual
 
Capital Adequacy
Purposes
 
To be Well Capitalized
Under Prompt
Corrective
Action Provisions
 
Amount
 
Ratio
 
Amount
 
Ratio
 
 
Amount
 
Ratio
September 30, 2014
 
 
 
 
 
 
 
 
 
 
 
 
Tier 1 leverage capital:
 
 
 
 
 
 
 
 
 
 
 
 
Timberland Bancorp
$
78,480

 
10.6
%
 
$
29,644

 
4.0
%
 
N/A

 
N/A

Timberland Bank
75,734

 
10.2

 
29,629

 
4.0
 
 
$
37,036

 
5.0
%
Tier 1 risk adjusted capital:
 

 
 

 
 
 
 
 
 
 

 
 

Timberland Bancorp
78,480

 
13.7

 
22,943

 
4.0
 
 
N/A

 
N/A

Timberland Bank
75,734

 
13.2

 
22,939

 
4.0
 
 
34,409

 
6.0

Total risk based capital:
 

 
 
 
 

 
 
 
 
 

 
 

Timberland Bancorp
85,692

 
14.9

 
45,886

 
8.0
 
 
N/A

 
N/A

Timberland Bank
82,945

 
14.5

 
45,878

 
8.0
 
 
57,348

 
10.0

 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2013
 

 
 

 
 

 
 
 
 
 

 
 

Tier 1 leverage capital:
 

 
 

 
 

 
 
 
 
 

 
 

Timberland Bancorp
$
85,158

 
11.5
%
 
$
29,677

 
4.0
%
 
N/A

 
N/A

Timberland Bank
82,265

 
11.1

 
29,662

 
4.0
 
 
$
37,078

 
5.0
%
Tier 1 risk adjusted capital:
 

 
 

 
 
 
 
 
 
 

 
 

Timberland Bancorp
85,158

 
15.3

 
22,259

 
4.0
 
 
N/A

 
N/A

Timberland Bank
82,265

 
14.8

 
22,255

 
4.0
 
 
33,382

 
6.0

Total risk based capital:
 

 
 

 
 

 
 
 
 
 

 
 

Timberland Bancorp
92,168

 
16.6

 
44,518

 
8.0
 
 
N/A

 
N/A

Timberland Bank
89,273

 
16.1

 
44,509

 
8.0
 
 
55,636

 
10.0



Restrictions on Retained Earnings

At the time of conversion of the Bank from a Washington-chartered mutual savings bank to a Washington-chartered stock savings bank, the Bank established a liquidation account in an amount equal to its retained earnings of $23,866,000 as of June 30, 1997, the date of the latest statement of financial condition used in the final conversion prospectus.  The liquidation account is maintained for the benefit of eligible account holders who have maintained their deposit accounts in the Bank after conversion.  The liquidation account reduces annually to the extent that eligible account holders have reduced their qualifying deposits as of each anniversary date.  Subsequent increases do not restore an eligible account holder’s interest in the liquidation account.  At September 30, 2014 management estimates the amount of the liquidation account to be $429,000.  In the event of a complete liquidation of the Bank (and only in such an event), eligible depositors who have continued to maintain accounts will be entitled to receive a distribution from the liquidation account before any distribution may be made with respect to common stock.  The Bank may not declare or pay cash dividends if the effect thereof would reduce its regulatory capital below the amount required for the liquidation account.