Publicly-traded Timberland Bancorp (NASDAQ: TSBK) is the holding company for Timberland Bank, which opened for business in 1915 and serves consumers and businesses across Grays Harbor, Thurston, Pierce, King, Kitsap and Lewis counties, Washington with a full range of lending and deposit services through its 22 branches. The company filed its 10-Q with the SEC today and admitted that its recent success is partially attributable to the cannabis industry:
Non-interest Income: Total non-interest income increased by $299,000, or 13.5%, to $2.51 million for the quarter ended March 31, 2016 from $2.21 million for the quarter ended March 31, 2015. The increase in non-interest income was primarily due to an $85,000 increase in service charges on deposits, a $67,000 increase in ATM and debit card interchange transaction fees, a $67,000 improvement in servicing income on loans sold and smaller increases several other categories. The increase in service charges on deposits was primarily due to an increase in the amount of service charges collected on checking accounts owned by business associated with the marijuana (or Initiative-502) industry in Washington State. It is permissible in Washington state to handle accounts associated with this industry.
The numbers aren’t huge, but perhaps 3% of the company’s overall net income of $2.4mm during the quarter came from the service fees, depending upon any additional costs incurred by the bank to service the accounts.
While the fact that the bank is willing to provide services to the cannabis industry isn’t likely the reason for Timberland Bancorp’s strong performance in the stock market over the past 5 years, perhaps other banks will take notice and embrace a more liberal policy when it comes to dealing with cannabis companies.