November 5, 1997
Board of Directors
Timberland Savings Bank, SSB
624 Simpson Avenue
Hoquiam, Washington 98550
Dear Board of Directors:
The notice of proposed mutual-to-stock conversion and subsequent amendments thereto,
filed on behalf of Timberland Savings Bank, SSB, Hoquiam, Washington (TSB), have
been reviewed by the Federal Deposit Insurance Corporation (FDIC) pursuant to section
303.15 of the FDIC Rules and Regulations. This application was made in connection
with TSB's proposal to convert from a Washington-chartered mutual savings bank to a
Washington-chartered stock savings bank.
The FDIC has relied on information provided in Timberland's Notice of Conversion and the
accompanying business plan in reaching its decision. It is anticipated that any planned material
deviations from the business plan which will result in a return of capital will be provided to the
FDIC in advance of such an event. Based on the information and representations presented, as
amended, including commitments by Timberland to restrict payment of dividends and the return
of capital, the FDIC plans to issue a letter of non-objection to the proposed conversion
transaction, provided that TSB satisfies the following conditions.
1. TSB must provide written evidence that its plan of conversion had been approved by
the affirmative vote of a majority of the votes eligible to be case at a special meeting of
TSB's members, without the use of proxies executed outside the context of the
proposed conversion.
2. TSB must advise this office of the results of the subscription offering and deliver an
updated appraisal that:
(a) takes into account the results of the subscription offering;
(b) discusses any material occurrences during the subscription period; and
(c) explains any orders that may have been rejected.
3. TSB must receive final approval from the appropriate State of Washington officials (State
Authority) for its establishment as a stock savings bank and final approval must be
received form the Federal Reserve Bank of San Francisco and the State Authority for
Timberland Bancorp, Inc., to acquire TSB.
4. TSB must execute, if necessary. the enclosed Tolling Agreement and deliver it to this
office no later than Friday, January 16, 1998.
Provided that TSB meets the conditions outlined above and that the FDIC is satisfied with the
appraiser's determination in the updated appraisal that the results of the subscription offering
represent fair value for TSB. and provided further that there has been no significant alteration to
the terms of the conversion transaction (by action of other regulators or otherwise) subsequent to
the date of this letter, the FDIC will issue a letter of non-objection to the proposed conversion
transaction.
Sincerely,
Keith W. Seibold
Acting Associate Director
Enclosure
cc: Mr. Victor Cangelosi. Esq.
Breyer R Aguggia
1300 I Street. N.W.
Suite 470 East
Washington. D.C. 20005
Tolling Agreement
by and between
Timberland Savings Bank, SSB, Hoquiam, Washington
and
The Federal Deposit Insurance Corporation
The undersigned parties hereby agree as follows:
1. The time in which the Federal Deposit Insurance Corporation (FDIC) may act to
object to the notice of the proposed conversion of Timberland Savings Bank, SSB
(TSB), to stock ownership filed with the FDIC on September 17, 1997, pursuant
to section 303.15 of the FDIC Rules and Regulations (Notice), is hereby extended
from January 16, 1998. until 30 days after TSB advises the FDIC of the results of
the subscription offering and delivers an appraisal that:
(a) takes into account the results of the subscription offering;
(b) discusses any material occurrences during the subscription period; and
(c) explains any orders that may have been rejected.
2. Any action take by the FDIC on the aforementioned Notice during the extension
period described in paragraph 1 shall have the same force and effect as if it were-
taken by the FDIC before January 16, 1998, and shall not be challenged by TSB
or anyone associated with it solely for having been taken during the extension
period described above in paragraph 1.
Dated:
TIMBERLAND SAVINGS BANK, SSB
By:
Dated:
FEDERAL DEPOSIT INSURANCE CORPORATION
By:
