Territorial Bancorp Inc. Reports Q4 2024 Results: Net Loss, Merger Approval, and Dividend Declaration

Territorial Bancorp Inc. (NASDAQ: TBNK), the holding company for Territorial Savings Bank, reported a net loss of $1.72 million, or $0.20 per diluted share, for the three months ended December 31, 2024. The results reflect $1.53 million of pre-tax merger-related expenses. Despite the net loss, the company's tier one leverage and risk-based capital ratios remained strong at 11.68% and 28.96%, respectively, indicating a "well-capitalized" status.



The Board of Directors approved a dividend of $0.01 per share, to be paid on February 28, 2025, to stockholders of record as of February 14, 2025. This dividend reflects the company's commitment to returning value to shareholders while navigating the current financial landscape.

Territorial Bancorp Inc. also announced the approval of its shareholders for the proposed merger with Hope Bancorp, Inc. (NASDAQ: HOPE). Under the terms of the merger agreement, Territorial Bancorp 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. The transaction is valued at approximately $78.60 million, based on the closing price of Hope Bancorp's common stock on April 26, 2024. 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 local communities.

The company's net interest income decreased by $2.21 million for the quarter, primarily due to a $2.42 million increase in total interest expense. This increase was driven by prolonged increases in short-term interest rates, which led to higher interest expense on deposits, particularly on certificates of deposit (CDs) and savings accounts. The average cost of CDs and savings accounts increased by 17 basis points and 58 basis points, respectively, while the average balance of CDs rose by $132.90 million. This resulted in a $2.51 million increase in interest expense on deposits for the quarter.

Despite the decrease in net interest income, Territorial Bancorp Inc. remains focused on maintaining its strong financial position and executing its strategic initiatives. The company's management is committed to enhancing shareholder value and ensuring the long-term success of the organization. As the company continues to navigate the current financial landscape, investors will closely monitor its progress and the potential impact of the proposed merger with Hope Bancorp, Inc.