UPDATE: Sterne Agee Downgrades Territorial Bancorp on Valuation

Jefferies reduces its rating on Territorial Bancorp

from Buy to Neutral and suspends its price target of $23 as shares reach it. Jefferies notes, "Year to date the shares increased 13.5% as compared to the SNL U.S. Thrift Index which increased 3.4%. Furthermore, the shares currently trade at 118% of tangible book value (TBV) vs. the peer median of 96% (Figure 1). While we believe the valuation premium is warranted due to higher fore-casted profitability levels, in our opinion, the company will continue to experience net interest margin (NIM) pressure as a result of lower reinvestment yields and exclusive of a sale we believe the shares are fairly valued." TBNK closed at $32.14 on Wednesday.