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, 2007
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 Employee Stock Ownership and 401(k) 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
Page
(a) Report of Independent Registered Public Accounting Firm 1
(b) Financial Statements
Statement of Net Assets Available for Benefits
at September 30, 2007 and 2006 2
Statement of Changes in Net Assets Available for
Benefits for the Year Ended September 30, 2007 3
Notes to the Financial Statements 4
(c) Supplemental Schedule
Schedule H, Line 4i - Schedule of Assets Held at End
of Year 11
(d) Exhibit Index 23.1 Consent of Independent Registered Public
Accounting Firm 12
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
---------------------------------------------------------
Administrator, Timberland Bank Employee Stock Ownership
and 401(k) Plan
/s/Dean J. Brydon
By: ---------------------------------
Dean J. Brydon (name)
---------------------------------
Chief Financial Officer (title)
---------------------------------
Timberland Bank (bank)
---------------------------------
Date: March 27, 2008
Timberland Bank Employee Stock Ownership and
401(k) Plan
Financial Report
September 30, 2007
Timberland
Bank
Employee
Stock
Ownership
And
401(k)
Plan
Financial
Report
September 30
2007
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.......................................4-10
Supplemental Schedule
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)........11
McGladrey & Pullen
Certified Public Accountants
Report of Independent Registered Public Accounting Firm
To the Audit Committee
Timberland Bank Employee Stock Ownership and 401(k) Plan
Hoquiam, Washington
We have audited the accompanying statements of net assets available for
benefits of Timberland Bank Employee Stock Ownership and 401(k) Plan (the
Plan) as of September 30, 2007 and 2006, and the related statement of changes
in net assets available for benefits for the year ended September 30, 2007.
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 net assets available for benefits of the Plan as of
September 30, 2007 and 2006, and the changes in net assets available for
benefits for the year ended September 30, 2007, 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 of assets
held at end of year as of September 30, 2007, 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.
As discussed in Note 2, the Plan's financial statements reflect the adoption
of Financial Accounting Standards Board Staff Position, FSP AAG INV-1 and
Statements of Position 94-4-1, Reporting of Fully Benefit-Responsive
Investment Contracts Held by Certain Investment Companies Subject to the AICPA
Investment Company Guide and Defined-Contribution Health and Welfare and
Pension Plans.
/s/McGladrey & Pullen, LLP
Seattle, Washington
March 27, 2008
Financial
Statements
Statements of Net Assets Available for Benefits
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Timberland Bank Employee Stock Ownership and 401(k) Plan
September 30, 2007 and 2006
September 30, 2007
Nonparticipant-Directed
Participant- -----------------------
Directed Allocated Unallocated Total
Assets
Investments, at fair
value:
Stable Value Common
Collective Trust
Fund $ 27,987 $ - - $ - - $ 27,987
Other common
collective trust
funds 5,601,175 - - - - 5,601,175
Timberland Bancorp,
Inc ("Bancorp")
common stock 4,830,623 8,102,390 6,347,114 19,280,127
Cash 143,627 1,777 - - 145,404
Total assets 10,603,412 8,104,167 6,347,114 25,054,693
Liabilities
Note payable - - - - 4,292,902 4,292,902
Net assets available
at fair value 10,603,412 8,104,167 2,054,212 20,761,791
Adjustment from fair
value to contract
value for fully
benefit-responsive
investment contracts 2,129 - - - - 2,129
Net assets available
for benefits $10,605,541 $8,104,167 $2,054,212 $20,763,920
September 30, 2006
Nonparticipant-Directed
Participant- -----------------------
Directed Allocated Unallocated Total
Assets
Investments, at fair
value:
Bancorp common stock $ - - $9,515,836 $7,736,621 $17,252,457
Cash - - - - 184 184
Total assets - - 9,515,836 7,736,805 17,252,641
Liabilities
Note payable - - - - 4,506,507 4,506,507
Net assets available
for benefits $ - - $9,515,836 $3,230,298 $12,746,134
See notes to financial statements. 2
Statement of Changes in Net Assets Available for Benefits
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Timberland Bank Employee Stock Ownership and 401(k) Plan
Year Ended September 30, 2007
Nonparticipant-Directed
Participant- -----------------------
Directed Allocated Unallocated Total
Additions to net assets
Investment income:
Net appreciation in fair
value of investments:
Stable Value Common
Collective Trust
Fund $ 7,122 - - - - $ 7,122
Other common
collective trust
funds 499,619 - - - - 499,619
Net (depreciation) in
fair value of
investment in Bancorp
common stock (604,599) (608,909) (1,186,472) (2,399,980)
Interest and dividends 124,534 - - 352,493 477,027
Contributions:
Employer 371,360 - - 297,482 668,842
Participant 559,316 - - - - 559,316
Allocation of 35,266.72
shares of Bancorp
common stock - - 264,324 - - 264,324
Total additions to net
assets 957,352 (344,585) (536,497) 76,270
Deductions from net assets
Interest expense - - - - 375,265 375,265
Benefit payments 883,109 1,067,084 - - 1,950,193
Allocation of 35,266.72
shares of Bancorp
common stock - - - - 264,324 264,324
Total deductions from
net assets 883,109 1,067,084 639,589 2,589,782
Net increase (decrease)
before transfer of
assets from other
qualified plan 74,243 (1,411,669) (1,176,086) (2,513,512)
Transfer from Timberland
Bank 401(k) and Profit
Sharing Plan 10,531,298 - - - - 10,531,298
Net increase (decrease) 10,605,541 (1,411,669) (1,176,086) 8,017,786
Net assets available for
benefits
Beginning of year - - 9,515,836 3,230,298 12,746,134
End of year $10,605,541 $8,104,167 $2,054,212 $20,763,920
See notes to financial statements. 3
Notes to Financial Statements
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Timberland Bank Employee Stock Ownership and 401(k) Plan
September 30, 2007 and 2006
Note 1 - Plan Description and Basis of Presentation
The following description of Timberland Bank Employee Stock Ownership and
401(k) Plan ("Plan") provides only general information. Participants should
refer to the Plan agreement for a more complete description of the Plan's
provisions.
General
Effective October 1, 2006 Timberland Bank ("Company") established the Plan by
combining the existing Timberland Bank Employee Stock Ownership Plan and the
Timberland Bank 401(k) Profit Sharing Plan. The Plan is comprised of two
components, a defined contribution 401(k) plan and a leveraged employee stock
ownership plan ("ESOP"). It is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA") and is designed to comply
with Section 4975(e)(7) and the regulations thereunder of the Internal Revenue
Code of 1986, as amended ("Code"). The Plan is administered by Pentegra
Retirement Services and HomeFederal Bank is the trustee. The Company is the
wholly owned subsidiary of Timberland Bancorp Inc. ("Bancorp").
The Plan purchased Bancorp common stock using proceeds borrowed from the
Bancorp to fund the ESOP portion of the plan. The borrowing is to be repaid
over a period of 21 1/4 years by fully deductible Company contributions to
the Plan. As the Plan makes each payment of principal and interest, an
appropriate percentage of stock is committed to be released and annually the
Plan allocates committed stock to eligible employee accounts, in accordance
with applicable Code regulations.
The borrowing is collateralized by unallocated shares of stock and guaranteed
by the Company. The Bancorp has no rights against shares once they are
allocated under the Plan. Accordingly, the accompanying financial statements
present, separately, assets and liabilities, and changes therein pertaining
to:
* The accounts of employees with vested rights in allocated stock
(Allocated)
* Stock not yet allocated to employees (Unallocated)
Voting Rights
Each participant may direct the trustee as to the voting rights attributable
to shares of Bancorp common stock held in the ESOP component of the Plan,
which are allocated to the participant's stock account. Any allocated shares
in which voting instructions are not received, unallocated shares, and shares
held in the 401(k) component of the Plan are voted by the trustee in the same
proportion as shares for which the trustee receive voting instructions.
Eligibility
The Plan covers substantially all full-time employees of the Company who have
one year of service and are 21 years of age or older. Employees are generally
eligible to participate upon the completion of at least 1,000 hours of service
within a 12-month period. Participants who do not have at least 1,000 hours
of service during such Plan year, or who are not employed on the last working
day of the Plan year, are not eligible for an allocation of the ESOP
contribution for that year. The Plan provides entry dates on the first day of
each calendar quarter.
(continued)
4
Notes to Financial Statements
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Timberland Bank Employee Stock Ownership and 401(k) Plan
September 30, 2007 and 2006
Note 1 - Plan Description and Basis of Presentation (continued)
401(k) Contributions and Participant Investment Options
The Plan participants may contribute into the 401(k) component 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 percent of eligible compensation, with additional
amounts contributed at the option of its board of directors.
Participants must direct their 401(k) salary deferral contributions, safe
harbor contribution and the employer discretionary contribution, if any, into
a variety of investment choices, which are more fully described in the Plan's
literature.
Participant Accounts and Forfeitures
Each participant's account is credited with allocations of the (a) Company's
contributions, (b) the Plan's earnings and (c) the forfeitures of terminated
participants' nonvested accounts. ESOP allocations are based upon the
relation of the participant's compensation to total eligible Plan compensation
for the Plan year. Dividends from Bancorp common stock in the ESOP component
are used, along with Company contributions, to make payments on the note
payable. Dividends earned on allocated shares are credited to participant
accounts in the form of Bancorp common stock equal to the fair market value of
the stock at the time of the dividend. Forfeited balances of terminated
participant nonvested accounts are treated as discretionary contributions for
the Plan year in which the forfeitures occur. Forfeitures allocated for the
year ended September 30, 2007, totaled $52,653 for the ESOP component. No
forfeitures remained to be allocated as of September 30, 2007 in the ESOP
forefeiture account. As September 30, 2007, the 401(k) forefeiture balance
was approximately $63,000. During October 2007, approximately $61,000 of the
401(k) forfeitures were allocated to the participants.
Benefit Payments and Plan Amendments
On termination of service, a participant with an accrued benefit of $1,000 or
less will receive a lump-sum amount equal to the value of the vested interest
in their account. A Participant with an accrued benefit in excess of $1,000
may leave the funds in the Plan or elect to receive a lump sum distribution or
a distribution over a certain period in months, quarterly, semiannual or
annual installments equal to the value of the vested interest in his or her
accounts. The distribution date will be the earliest administratively feasible
date for participants who attain normal retirement at the age of 62 or early
retirement at the age of 55 with 10 years of service. All distributions from
the 401(k) component are in cash. Distributions from the ESOP component prior
to May 1, 2007 were in the form of Bancorp common stock. Effective May 1,
2007, the Plan was amended to allow distributions for the ESOP component to be
in Bancorp common stock or cash as elected by the participant. During the
year ended September 30, 2007, the Plan distributed 59,755 shares of Bancorp
common stock from the ESOP Component.
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, the ESOP, 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 the age
of 65, or if the participant's separation from service is a result of death or
disability.
(Continued) 5
Notes to Financial Statements
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Timberland Bank Employee Stock Ownership and 401(k) Plan
September 30, 2007 and 2006
Note 1 - Plan Description and Basis of Presentation (concluded)
ESOP Component Diversification
Diversification is offered to a participant close to retirement so that they
may have the opportunity to move a part of the value of their investment in
Bancorp common stock into investments which are more diversified. A
participant who is at least 55 years of age, with at least 10 years of
participation in the Plan, may elect to diversify a portion of their account.
Diversification is offered to each eligible participant over a six-year
period. In each of the first five years, a participant may diversify up to 25
percent of the number of shares allocated to their account, less any shares
previously diversified. In the sixth year, the percentage increases to 50
percent. (See also Note 10)
Plan Termination
The Company reserves the right to terminate the Plan at any time, subject to
Plan provisions. Upon termination of the Plan, the interest of each
participant will be distributed to the participant or to their beneficiary at
the time prescribed by the Plan terms and the Code. In the event of Plan
termination, participants will become 100 percent vested in their accounts.
Note 2 - Summary of Significant 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 in the United States of America 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, at the date of the financial statements. Actual results could
differ from those estimates.
Investment Valuation and Income Recognition
The Plan's investments at September 30, 2007 and 2006 consists of common
collective trust funds (2007 only) and Bancorp common stock; both of which are
stated at fair value. Quoted market prices are used to value shares of
Bancorp common stock. The Plan's interest in the common collective trust
funds are based on the fair values of the common collective trust funds'
underlying investments, based on net asset value information reported by the
investment manager (State Street Global Advisors) to the asset custodian and
trustee (HomeFederal Bank). Purchases and sales of securities are recorded on
the trade-date basis. Interest expense is recorded on the accrual basis.
Dividends are recorded on the ex-dividend date.
(Continued)
6
Notes to Financial Statements
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Timberland Bank Employee Stock Ownership and 401(k) Plan
September 30, 2007 and 2006
Note 2 - Summary of Significant Accounting Policies (concluded)
Payment of Benefits
Benefits are recorded when paid.
Adoption of New Accounting Guidance
As described in FASB Staff Position ("FSP"), FSP Audit Accounting Guide
("AAG") INV-1 and Statement of Position ("SOP") 94-4-1, Reporting of Fully
Benefit-Responsive Investment Contracts Held by Certain Investment Companies
Subject to the American Institute of Certified Public Accountants Investing
Company Guide and Defined-Contribution Health and Welfare and Pension Plans
(the FSP) investment contracts held by a defined contribution plan are
required to be reported at fair value. However, contract value is the
relevant measurement attributed for that portion of the net assets available
for benefits of a defined contribution plan attributable to fully
benefit-responsive investment contracts because contract value is the amount
participants would receive if they were to initiate permitted transactions
under the terms of the Plan. The Plan invests in investment contracts through
a common collective trust fund. Contract value for this common collective
trust fund is based on the net asset value of the fund, as reported by the
investment manager. As required by the FSP, the statements of net assets
available for benefits present the fair value of the investment in the common
collective trust funds as well as the adjustment of the investment in the
common collective trust fund from fair value to contract value relating to the
investment contracts. The statement of changes in net assets available for
benefits is prepared on a contract value basis. These requirements are
effective for financial statements issued for periods ending after December
15, 2006. The provisions of FSP AAG INV-1 and SOP 94-4-1 have been applied to
the statement of nets assets available for benefits as of September 30, 2007
only, as there were no holdings by the Plan in this investment at September
30, 2006.
Recent Accounting Pronouncement
In September 2006, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 157 Fair Value
Measurements. SFAS No. 157 established a single authoritative definition of
fair value, sets out a framework for measuring fair value and requires
additional disclosures about fair value measurements. SFAS No. 157 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007. The Plan Administrator does not believe the adoption of
SFAS No. 157 will have a material impact on the financial statements.
Note 3 - Tax Status
The Plan obtained its latest determination letter dated December 19, 2001, in
which the Internal Revenue Service stated that the Plan, as then designed, was
in compliance with the applicable requirements of the Code. The Plan has been
amended since receiving the determination letter; however, the Plan
Administrator believes the Plan is designed and operating in compliance with
the applicable requirements of the Code.
7
Notes to Financial Statements
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Timberland Bank Employee Stock Ownership and 401(k) Plan
September 30, 2007 and 2006
Note 4 - Administration of Plan Assets
Certain administrative functions of the Plan are performed by officers and
employees of the Company. No such officers or employees receive compensation
from the Plan. The Company also retained the services of a third party to
perform administrative functions. Administrative expenses are paid directly
by the Company, which approximated $34,800 for the year ended September 30,
2007.
Note 5 - Investments
The following presents, separately, identified investments that represent 5%
or more of the Plan's net assets and Bancorp common stock at September 30:
September 30, 2007
Nonparticipant-Directed
Participant- -----------------------
Directed Allocated Unallocated Total
Bancorp common stock
Number of shares 308,666 517,725 405,566 1,231,957
Market value $ 4,830,623 $8,102,390 $6,347,114 $19,280,127
State Street Global
Advisors Common
Collective Trust Short
Term Investment Fund 1,547,122 - - - - 1,547,122
Other (including common
collective trust funds) 4,082,040 - - - - 4,082,040
Total investments at
fair value $10,459,785 $8,102,390 $6,347,114 $24,909,289
September 30, 2006
Nonparticipant-Directed
Participant- -----------------------
Directed Allocated Unallocated Total
Bancorp common stock
Number of shares
(adjusted for 2007
stock split) - - 542,212 440,834 983,046
Market value $ - - $9,515,836 $7,736,621 $17,252,457
(Continued)
8
Notes to Financial Statements
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Timberland Bank Employee Stock Ownership and 401(k) Plan
September 30, 2007 and 2006
Note 5 - Investments (Concluded)
During the year ended September 30, 2007 the Plan's investments, including
gains and losses on investments bought and sold, as well as held during each
period, appreciated (depreciated) in value as follows:
Stable Value Common Collective Trust Fund $ 7,122
Other common collective trust funds 499,619
Bancorp common stock (2,399,980)
Net (depreciation) in fair value of investments ($1,893,239)
Note 6 - Note Payable
On December 19, 2006, the Company approved the extension of the Plan's term
loan agreement with The Bancorp, Inc. (a related party). The new agreement
extends the maturity date of the note to March 31, 2019. The quarterly
payments decreased to $147,217 from $234,269 with the interest rate remaining
at 8.5 percent. The note is guaranteed by the Company and remains
collateralized by unallocated shares of Bancorp common stock. The new annual
principal and interest payments total $588,870 and are due through maturity in
2019.
Note 7 - Employer Contributions
The Company is obligated to make contributions in cash to the Plan for the
ESOP component, which, when aggregated with the Plan's dividends and interest
earnings, equal the amount necessary to enable the Plan to make its regularly
scheduled payments of principal and interest on the term loan. In addition,
the Company is obligated to make an annual safe-harbor contribution of 3
percent into the 401(k) component. At the discretion of the board of
directors the Company made an additional contribution to the 401(k) component
for the year ended September 30, 2007 in the amount of 2 percent of total
eligible participant compensation.
Note 8 - 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 value of investment securities
will occur in the near term and that such changes could materially affect
participants' account balances and the amounts reported on the statement of
net assets available for benefits.
9
Notes to Financial Statements
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Timberland Bank Employee Stock Ownership and 401(k) Plan
September 30, 2007 and 2006
Note 9 - Plan Merger
Effective October 1, 2006, Timberland Bank 401(k) and Profit Sharing Plan and
Timberland Bank Employee Stock Ownership Plan were merged with the surviving
plan being the Timberland Bank Employee Stock Ownership Plan. The surviving
plan's name was changed to the Timberland Bank Employee Stock Ownership and
401(k) Plan ("KSOP"). All plan assets were transferred to the Timberland Bank
Employee Stock Ownership and 401(k) Plan on October 3, 2006. The KSOP is
administered by Pentegra Retirement Services, and the trustee for the plan is
HomeFederal Bank.
Note 10 - Subsequent Event
Effective October 1, 2007 participants that have three years of service or
more with the Company may diversify their stock held in the ESOP component of
the Plan. The divestment and reinvestment opportunity may be made once per
quarter. The Plan was amended to comply with the Pension Reform Act of 2006.
10
Supplemental
Schedule
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
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Timberland Bank Employee Stock Ownership and 401(k) Plan
September 30, 2007
EIN: 20-5645878
Plan #: 002
(a) and (b) (c) (d) (e)
Identity of Issue, Description of Investment, Cost Current
Borrower, Lessor Including Maturity Date, Value
or Similar Party Rate of Interest, Collateral,
Par or Maturity Value
**Timberland Bancorp,
Inc. Common Stock - 923,291 Shares $6,920,066 $14,449,504
**Timberland Bancorp,
Inc. Common Stock - 308,666 Shares * 4,830,623
State Street Global
Advisors STIF * 1,547,122
State Street Global
Advisors Moderate Strategic Balanced
SL Fund * 936,070
State Street Global
Advisors Russell 2000 Index SL Series
Fund - Class A * 907,351
State Street Global
Advisors Aggressive Strategic Balanced
SL Fund * 895,819
State Street Global
Advisors S&P 500 Flagship SL Series
Fund - Class A * 710,479
State Street Global
Advisors Daily EAFE Index SL Series
Fund - Class T * 146,950
**Home Federal Bank Cash Stock Liquidity Fund * 145,404
State Street Global
Advisors NASDAQ 100 Index Non-Lending
Fund Series A * 90,463
State Street Global
Advisors S&P Midcap Index SL Series
Fund - Class A * 85,139
State Street Global
Advisors S&P Value Index SL Fund Series A * 83,776
State Street Global
Advisors REIT Index Non-Lending Series
Fund - Class A * 50,623
State Street Global
Advisors S&P Growth Index SL Fund Series A * 47,473
State Street Global
Advisors Passive Bond Market Index SL
Series Fund A * 42,238
State Street Global
Advisors Long US Treasury Index SL Series
Fund Class A * 34,878
State Street Global
Advisors Pentegra Stable Value Fund, at
Contract Value * 30,116
State Street Global
Advisors Conservative Strategic Balanced
SL Fund * 22,794
$25,056,822
* Historical cost not required for participant-directed accounts.
** Represents a party-in-interest
11
[McGladrey & Pullen, LLP Letterhead]
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration
Statement (No. 333-116163, filed June 4, 2004) on Form S-8 of Timberland
Bancorp, Inc. of our report dated March 27, 2008, appearing in this Annual
Report on Form 11-K of Timberland Bank Employee Stock Ownership and 401(k)
Plan for the year ended September 30, 2007.
/s/McGladrey & Pullen, LLP
Seattle, Washington
March 28, 2008