Clarence E. Hamre Announces Retirement Plans from Timberland Bank and Timberland Bancorp, Inc., Michael R. Sand Appointed President.

Business Editors

HOQUIAM, Wash.--(BUSINESS WIRE)--Jan. 23, 2003

Clarence E. Hamre announced his decision to retire as President of Timberland Bank at the Annual Shareholders' meeting today. Hamre, who recently completed 34 years with the bank, will retire as CEO effective September 30, 2003, but will continue as Chairman of the Board of Directors and will serve the bank in an advisory capacity.

In conjunction with Mr. Hamre's retirement announcement, the Board of Directors unanimously elected and promoted Michael R. Sand to President. Mr. Sand, an experienced Senior Executive of the bank, was recently honored for 25 years of service, having been appointed Executive Vice President in 1993.

"Clarence's influence, dedication and hard work have made a substantial impact on the growth of Timberland Bank, stated Sand. He was appointed President on December 1, 1969, when there was just one branch, a staff of eight and assets of $8.8 million. Today Timberland has 14 branches with $434 million in assets and 180 employees. We have developed a strong, professional relationship over the past 25 years, and I am pleased he will continue to serve the bank in the future."

Mr. Hamre commented, "My 34 years with Timberland Bank have been extremely gratifying. It has been a great privilege to work alongside such a dedicated and professional Board of Directors and staff. I want to thank each and every one of them for their loyalty and support. With Mike as my successor, the entire organization will benefit from the continuity of our combined 59 years of service together. Mike is a highly qualified executive with an intimate knowledge of the financial services industry and is committed to the continued growth and influence of Timberland Bank.

Hamre, who began his banking career in the Tacoma and Puyallup area, held many leadership positions in both Pierce and Grays Harbor counties. Hamre served on the boards of Puyallup Valley Chamber of Commerce, Sumner Valley Chamber of Commerce, the Daffodil Festival, and Fife School Board, just to mention a few. After moving to Grays Harbor he served as President and board member for Kiwanis, Grays Harbor Chamber of Commerce, Hoquiam Development Association, Grays Harbor Fair Board, the Neighborhood Housing Board, 7th Street Theatre Public Development Authority, in addition to serving as a long-time member and director of Saron Lutheran Church in Hoquiam.

Mr. Sand began his banking career at Timberland in 1978. He earned his BA and MBA from the University of Puget Sound. Mr. Sand serves on the board of the Aberdeen Neighborhood Housing Authority, Grays Harbor Community Hospital Charitable Foundation and the Grays Harbor YMCA. He is a past-president of the Grays Harbor Chamber Commerce and a member of Hoquiam Lions Club. He resides in Hoquiam with his wife and five children.

Timberland Bank was established in Grays Harbor in 1915 and has grown to a 14-branch network located in five western Washington counties. A 15th branch will open in downtown Olympia this summer. Timberland is a community-oriented bank which offers a variety of savings and lending products to retail customers while concentrating its lending activities on real estate mortgage loans. Today, the greatest portion of the bank's $434 million of assets is invested in residential, consumer and business-related loans throughout the communities it serves. Timberland Bank is a subsidiary of Timberland Bancorp, Inc. and Timberland Bancorp, Inc. trades on the Nasdaq under the ticker symbol "TSBK."

Statements concerning the future performance of the bank, developments or events, expectation for earnings, growth and economic forecasts, and other guidance on future periods of time, constitute forward-looking statements, which are subject to a number of risks and uncertainties beyond the Company's control and might cause actual results to differ materially from the stated expectations and objectives. Factors which could cause actual results to differ materially may include, but are not limited to, regional and general economic conditions, changes in interest rates and Timberland's ability to attract and retain key employees. In addition, these factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements. Timberland Bank undertakes no obligation to update or revise any forward-looking statements.