Territorial Bancorp Inc. Announces Fourth Quarter 2024 Results
Rhea-AI Summary
Territorial Bancorp Inc. (NASDAQ: TBNK) reported a net loss of $1.72 million, or $0.20 per diluted share, for Q4 2024, including $1.53 million in pre-tax merger-related expenses. The company declared a dividend of $0.01 per share, payable February 28, 2025. Net interest income decreased by $2.21 million compared to Q4 2023, while total interest income increased slightly to $17.91 million.
The company maintains strong capital ratios with tier one leverage at 11.68% and risk-based capital at 28.96%. Asset quality remains solid with a non-performing assets ratio of 0.09%. Total assets were $2.17 billion, with deposits increasing by $81.06 million to $1.72 billion. The previously announced merger with Hope Bancorp continues to progress, with TBNK shareholders set to receive 0.8048 shares of Hope Bancorp stock for each TBNK share.
Positive
- Strong capital ratios: 11.68% tier one leverage and 28.96% risk-based capital
- Excellent asset quality with 0.09% non-performing assets ratio
- Deposits increased by $81.06 million to $1.72 billion
- Total interest income increased to $17.91 million
Negative
- Net loss of $1.72 million in Q4 2024
- Net interest income decreased by $2.21 million year-over-year
- Interest expense increased by $2.42 million compared to Q4 2023
- Loans receivable decreased by $21.89 million
- Dividend reduced to $0.01 per share
Insights
The Q4 2024 results reveal a complex transition period for Territorial Bancorp, marked by a net loss of
The bank's fundamentals show mixed signals. While maintaining robust capital ratios (tier one leverage at
Notable shifts in the balance sheet structure include:
- A significant
$81.06 million increase in deposits, primarily from government sources, demonstrating strong institutional relationships - Strategic deleveraging through repayment of
$82 million FHLB advances and$50 million FRB advances - Declining loan portfolio (
$21.89 million decrease) indicating conservative growth stance amid market uncertainties
The reduction in quarterly dividend to
- The Company’s tier one leverage and risk-based capital ratios were
11.68% and28.96% , respectively, and the Company is considered to be “well-capitalized” at December 31, 2024. - Ratio of non-performing assets to total assets of
0.09% at December 31, 2024.
HONOLULU, Jan. 31, 2025 (GLOBE NEWSWIRE) -- Territorial Bancorp Inc. (NASDAQ: TBNK) (the Company), headquartered in Honolulu, Hawaii, the holding company parent of Territorial Savings Bank, reported a net loss of
The Board of Directors approved a dividend of
Hope Bancorp, Inc. Merger Agreement
As previously announced in a joint news release issued April 29, 2024, Hope Bancorp, Inc. (NASDAQ: HOPE) (Hope Bancorp) and the Company signed a definitive merger agreement. Under the terms of the merger agreement, Company stockholders will receive a fixed exchange ratio of 0.8048 share of Hope Bancorp common stock in exchange for each share of Company common stock they own, in a
Upon completion of the transaction, Hope Bancorp intends to maintain the Territorial franchise in Hawaii and preserve the 100-plus year legacy of the Territorial Savings Bank brand name, culture and commitment to the local communities. The branches will continue to do business under the Territorial Savings Bank brand, as a trade name of Bank of Hope.
The transaction is subject to regulatory approvals and the satisfaction of other customary closing conditions.
Interest Income
Net interest income decreased by
Interest Expense and Provision for Credit Losses
As a result of prolonged increases in short-term interest rates, total interest expense increased by
The Company had a
Noninterest Income
Noninterest income increased by
Noninterest Expense
Noninterest expense increased by
Income Taxes
Income tax benefit for the three months ended December 31, 2024 was
Balance Sheet
Total assets were
Deposits increased by
Asset Quality
Credit quality continues to be extremely important as the Company adheres to its strict underwriting standards. The Company had
About Us
Territorial Bancorp Inc., headquartered in Honolulu, Hawaii, is the stock holding company for Territorial Savings Bank. Territorial Savings Bank is a state-chartered savings bank which was originally chartered in 1921 by the Territory of Hawaii. Territorial Savings Bank conducts business from its headquarters in Honolulu, Hawaii and has 28 branch offices in the state of Hawaii. For additional information, please visit the Company’s website at: https://www.tsbhawaii.bank.
Forward-looking statements
This earnings release contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect,” “will,” “may” and words of similar meaning. These forward-looking statements include, but are not limited to:
- statements of our goals, intentions and expectations;
- statements regarding our business plans, prospects, growth and operating strategies;
- statements regarding the asset quality of our loan and investment portfolios; and
- estimates of our risks and future costs and benefits.
These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. We are under no duty to and do not take any obligation to update any forward-looking statements after the date of this earnings release.
The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:
- factors related to the proposed transaction with Hope Bancorp, including the receipt of regulatory approvals, and other customary closing conditions;
- general economic conditions, either internationally, nationally or in our market areas, that are worse than expected;
- competition among depository and other financial institutions;
- inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments;
- adverse changes in the securities markets;
- changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements;
- changes in monetary or fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board;
- our ability to enter new markets successfully and capitalize on growth opportunities;
- our ability to successfully integrate acquired entities, if any;
- changes in consumer demand, spending, borrowing and savings habits;
- changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission and the Public Company Accounting Oversight Board;
- changes in our organization, compensation and benefit plans;
- the timing and amount of revenues that we may recognize;
- the value and marketability of collateral underlying our loan portfolios;
- our ability to retain key employees;
- cyberattacks, computer viruses and other technological risks that may breach the security of our websites or other systems to obtain unauthorized access to confidential information, destroy data or disable our systems;
- technological change that may be more difficult or expensive than expected;
- the ability of third-party providers to perform their obligations to us;
- the ability of the U.S. Government to manage federal debt limits;
- the quality and composition of our investment portfolio;
- the effect of any pandemic disease, natural disaster, war, act of terrorism, accident or similar action or event;
- changes in market and other conditions that would affect our ability to repurchase our common stock; and
- changes in our financial condition or results of operations that reduce capital available to pay dividends.
Because of these and a wide variety of other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements.
Contact: Walter Ida
(808) 946-1400
| Territorial Bancorp Inc. and Subsidiaries | |||||||||||||||
| Consolidated Statements of Operations (Unaudited) | |||||||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Interest income: | |||||||||||||||
| Loans | $ | 12,280 | $ | 12,006 | $ | 48,820 | $ | 47,043 | |||||||
| Investment securities | 4,104 | 4,406 | 16,857 | 17,918 | |||||||||||
| Other investments | 1,524 | 1,279 | 6,628 | 4,127 | |||||||||||
| Total interest income | 17,908 | 17,691 | 72,305 | 69,088 | |||||||||||
| Interest expense: | |||||||||||||||
| Deposits | 8,731 | 6,223 | 31,389 | 19,484 | |||||||||||
| Advances from the Federal Home Loan Bank | 1,569 | 1,854 | 6,899 | 6,636 | |||||||||||
| Advances from the Federal Reserve Bank | 384 | 154 | 2,173 | 183 | |||||||||||
| Securities sold under agreements to repurchase | 15 | 46 | 152 | 154 | |||||||||||
| Total interest expense | 10,699 | 8,277 | 40,613 | 26,457 | |||||||||||
| Net interest income | 7,209 | 9,414 | 31,692 | 42,631 | |||||||||||
| Provision (reversal of provision) for credit losses | 51 | 144 | 73 | (3 | ) | ||||||||||
| Net interest income after provision (reversal of provision) for credit losses | 7,158 | 9,270 | 31,619 | 42,634 | |||||||||||
| Noninterest income: | |||||||||||||||
| Service and other fees | 285 | 305 | 1,170 | 1,327 | |||||||||||
| Income on bank-owned life insurance | 257 | 227 | 1,007 | 855 | |||||||||||
| Net gain on sale of loans | — | — | 19 | 10 | |||||||||||
| Other | 200 | 71 | 415 | 279 | |||||||||||
| Total noninterest income | 742 | 603 | 2,611 | 2,471 | |||||||||||
| Noninterest expense: | |||||||||||||||
| Salaries and employee benefits | 5,181 | 5,109 | 19,787 | 20,832 | |||||||||||
| Occupancy | 1,539 | 1,709 | 6,858 | 6,910 | |||||||||||
| Equipment | 1,320 | 1,278 | 5,307 | 5,156 | |||||||||||
| Federal deposit insurance premiums | 386 | 245 | 1,667 | 982 | |||||||||||
| Other general and administrative expenses | 2,474 | 1,137 | 7,325 | 4,388 | |||||||||||
| Total noninterest expense | 10,900 | 9,478 | 40,944 | 38,268 | |||||||||||
| (Loss) Income before income taxes | (3,000 | ) | 395 | (6,714 | ) | 6,837 | |||||||||
| Income tax (benefit) expense | (1,276 | ) | 61 | (2,415 | ) | 1,810 | |||||||||
| Net (loss) income | $ | (1,724 | ) | $ | 334 | $ | (4,299 | ) | $ | 5,027 | |||||
| Basic (loss) earnings per share | $ | (0.20 | ) | $ | 0.04 | $ | (0.50 | ) | $ | 0.58 | |||||
| Diluted (loss) earnings per share | $ | (0.20 | ) | $ | 0.04 | $ | (0.50 | ) | $ | 0.57 | |||||
| Cash dividends declared per common share | $ | 0.01 | $ | 0.05 | $ | 0.08 | $ | 0.74 | |||||||
| Basic weighted-average shares outstanding | 8,630,432 | 8,575,902 | 8,610,706 | 8,636,495 | |||||||||||
| Diluted weighted-average shares outstanding | 8,630,432 | 8,603,843 | 8,610,706 | 8,684,092 | |||||||||||
| Territorial Bancorp Inc. and Subsidiaries | ||||||||
| Consolidated Balance Sheets (Unaudited) | ||||||||
| (Dollars in thousands, except per share data) | ||||||||
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| ASSETS | ||||||||
| Cash and cash equivalents | $ | 123,523 | $ | 126,659 | ||||
| Investment securities available for sale, at fair value | 18,492 | 20,171 | ||||||
| Investment securities held to maturity, at amortized cost (fair value of | 645,669 | 685,728 | ||||||
| Loans receivable | 1,286,662 | 1,308,552 | ||||||
| Allowance for credit losses | (5,114 | ) | (5,121 | ) | ||||
| Loans receivable, net of allowance for credit losses | 1,281,548 | 1,303,431 | ||||||
| Federal Home Loan Bank stock, at cost | 8,542 | 12,192 | ||||||
| Federal Reserve Bank stock, at cost | 3,189 | 3,180 | ||||||
| Accrued interest receivable | 5,800 | 6,105 | ||||||
| Premises and equipment, net | 7,278 | 7,185 | ||||||
| Right-of-use asset, net | 12,523 | 12,371 | ||||||
| Bank-owned life insurance | 49,645 | 48,638 | ||||||
| Income taxes receivable | 2,082 | 344 | ||||||
| Deferred income tax assets, net | 1,877 | 2,457 | ||||||
| Prepaid expenses and other assets | 9,547 | 8,211 | ||||||
| Total assets | $ | 2,169,715 | $ | 2,236,672 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Liabilities: | ||||||||
| Deposits | $ | 1,717,663 | $ | 1,636,604 | ||||
| Advances from the Federal Home Loan Bank | 160,000 | 242,000 | ||||||
| Advances from the Federal Reserve Bank | — | 50,000 | ||||||
| Securities sold under agreements to repurchase | — | 10,000 | ||||||
| Accounts payable and accrued expenses | 19,403 | 23,334 | ||||||
| Lease liability | 17,967 | 17,297 | ||||||
| Advance payments by borrowers for taxes and insurance | 6,331 | 6,351 | ||||||
| Total liabilities | 1,921,364 | 1,985,586 | ||||||
| Stockholders' Equity: | ||||||||
| Preferred stock, | — | — | ||||||
| Common stock, | ||||||||
| 8,832,210 and 8,826,613 shares at December 31, 2024 and 2023, respectively | 88 | 88 | ||||||
| Additional paid-in capital | 48,367 | 48,022 | ||||||
| Unearned ESOP shares | (1,957 | ) | (2,447 | ) | ||||
| Retained earnings | 206,693 | 211,644 | ||||||
| Accumulated other comprehensive loss | (4,840 | ) | (6,221 | ) | ||||
| Total stockholders’ equity | 248,351 | 251,086 | ||||||
| Total liabilities and stockholders’ equity | $ | 2,169,715 | $ | 2,236,672 | ||||
| Territorial Bancorp Inc. and Subsidiaries | |||||||||||||
| Selected Financial Data (Unaudited) | |||||||||||||
| Three Months Ended | |||||||||||||
| December 31, | |||||||||||||
| 2024 | 2023 | ||||||||||||
| Performance Ratios (annualized): | |||||||||||||
| Return on average assets | -0.32 | % | 0.06 | % | |||||||||
| Return on average equity | -2.75 | % | 0.53 | % | |||||||||
| Net interest margin on average interest earning assets | 1.39 | % | 1.78 | % | |||||||||
| Efficiency ratio (1) | 137.09 | % | 94.62 | % | |||||||||
| At | At | ||||||||||||
| December | December | ||||||||||||
| 31, 2024 | 31, 2023 | ||||||||||||
| Selected Balance Sheet Data: | |||||||||||||
| Book value per share (2) | $ | 28.12 | $ | 28.45 | |||||||||
| Stockholders' equity to total assets | 11.45 | % | 11.23 | % | |||||||||
| Asset Quality | |||||||||||||
| (Dollars in thousands): | |||||||||||||
| Delinquent loans 90 days past due and not accruing | $ | 1,219 | $ | 227 | |||||||||
| Non-performing assets (3) | $ | 1,933 | $ | 2,260 | |||||||||
| Allowance for credit losses | $ | 5,114 | $ | 5,121 | |||||||||
| Non-performing assets to total assets | 0.09 | % | 0.10 | % | |||||||||
| Allowance for credit losses to total loans | 0.40 | % | 0.39 | % | |||||||||
| Allowance for credit losses to non-performing assets | 264.56 | % | 226.59 | % | |||||||||
| Note: | |||||||||||||
| (1) Efficiency ratio is equal to noninterest expense divided by the sum of net interest income and noninterest income | |||||||||||||
| (2) Book value per share is equal to stockholders' equity divided by number of shares issued and outstanding | |||||||||||||
| (3) Non-performing assets consist of non-accrual loans and real estate owned. Amounts are net of charge-offs | |||||||||||||
FAQ
What are the terms of Hope Bancorp's acquisition of TBNK stock?
What caused TBNK's net loss in Q4 2024?
How much is TBNK's Q4 2024 dividend and when is it payable?
What are TBNK's capital ratios as of December 31, 2024?
How did TBNK's deposit base change in Q4 2024?
