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Territorial Bancorp Inc. Announces Second Quarter 2015 Results

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  • Earnings per share for the three months ended June 30, 2015 rose to $0.41 per diluted share compared to $0.40 per diluted share for the three months ended June 30, 2014.
  • Net income for the three months ended June 30, 2015 was $3.84 million compared to $3.72 million for the three months ended June 30, 2014, an increase of 3.2%.
  • Net interest income for the three months ended June 30, 2015 was $14.06 million, compared to $13.37 million for the three months ended June 30, 2014, an increase of 5.1%.
  • New loan originations for the three months ended June 30, 2015 totaled $132.15 million and $254.25 million for the first six months of 2015.
  • Loans receivable and loans held for sale grew by $142.02 million or 14.7% as compared to December 31, 2014.
  • Board of Directors approved an increase in the quarterly cash dividend from $0.16 to $0.17 per share. This is Territorial Bancorp Inc.'s 22nd consecutive quarterly dividend.


HONOLULU, July 30, 2015 (GLOBE NEWSWIRE) -- Territorial Bancorp Inc. (NASDAQ: TBNK) (the "Company"), headquartered in Honolulu, Hawaii, the holding company parent of Territorial Savings Bank, announced net income of $3.84 million or $0.41 per diluted share for the three months ended June 30, 2015, compared to $3.72 million or $0.40 per diluted share for the three months ended June 30, 2014. 

The Company also announced that its Board of Directors approved an increase in its quarterly cash dividend from $0.16 to $0.17 per share.  The dividend is expected to be paid on August 27, 2015 to stockholders of record as of August 13, 2015.

Allan Kitagawa, Chairman and Chief Executive Officer, said, "Our loan portfolio grew by 14.7% during the first six months of 2015, while net interest income rose by 4.9% for the first six months of 2015 as compared to the first six months of 2014.  Our strong performance has allowed us to increase our dividend.  Our next dividend, which will be paid on August 27, 2015, represents our 22nd consecutive quarterly dividend payment."

Interest Income

Net interest income after provision for loan losses increased to $13.96 million for the three months ended June 30, 2015 from $13.21 million for the three months ended June 30, 2014. Total interest and dividend income was $15.61 million for the three months ended June 30, 2015 compared to $14.88 million for the three months ended June 30, 2014. The $729,000 growth in interest and dividend income was primarily due to a $1.51 million increase in interest earned on loans which occurred primarily because of the increase in loans receivable.  The increase in interest income on loans was offset by an $812,000 decline in interest income from investment securities due to a net decline in our investment securities portfolio from repayments and sales that exceeded securities purchased. 

Interest Expense and Provision for Loan Losses

Total interest expense increased to $1.55 million for the three months ended June 30, 2015 from $1.51 million for the three months ended June 30, 2014.  During the quarter, interest expense on deposits rose by $51,000 due to an increase in total deposits. Interest expenses on advances from the Federal Home Loan Bank rose by $91,000 due to an increase in Federal Home Loan Bank advances.  Interest expense on securities sold under agreements to repurchase declined by $100,000 because of a decrease in these borrowings.  During the quarter ended June 30, 2015, the provision for loan losses was $101,000 compared to a $156,000 provision for the three months ended June 30, 2014.

Noninterest Income

Noninterest income was $1.25 million for the three months ended June 30, 2015 compared to $1.28 million for the three months ended June 30, 2014.  The reduction in noninterest income was primarily due to a $69,000 decrease in the gain on sale of investment securities that occurred because of a reduction in the amount of securities sold. 

Noninterest Expense

Noninterest expense was $8.84 million for the three months ended June 30, 2015 compared to $8.75 million for the three months ended June 30, 2014.  An increase in equipment and other general and administrative expenses was offset by a decrease in salaries and employee benefits.

Assets and Equity

Total assets increased to $1.743 billion at June 30, 2015 from $1.692 billion at December 31, 2014.  Loans receivable grew by $142.02 million or 14.7% to $1.111 billion at June 30, 2015 from $969.26 million at December 31, 2014 as residential mortgage loan originations exceeded loan repayments and sales. The growth in loans receivable was funded primarily by a $13.70 million increase in deposits, a $38.81 million decrease in cash and cash equivalents, $47.21 million received from repayments and sales of investment securities and a $42.00 million increase in Federal Home Loan Bank advances.  Securities sold under agreements to repurchase decreased to $60.0 million at June 30, 2015 from $72.0 million at December 31, 2014.  Deposits increased to $1.373 billion at June 30, 2015 from $1.360 billion at December 31, 2014.  Total stockholders' equity increased to $218.36 million at June 30, 2015 from $216.38 million at December 31, 2014.  The increase in stockholders' equity occurred as the Company's net income for the year exceeded share repurchases and dividends paid to shareholders.   Through June 30, 2015, the Company has repurchased 2,949,253 shares of stock or 24.1% of the shares issued in its initial public offering in 2009.

Asset Quality

Total delinquent loans 90 days or more past due and not accruing totaled $1,805,000 (5 loans) at June 30, 2015, compared to $758,000 (4 loans) at December 31, 2014.  Non-performing assets totaled $5.40 million at June 30, 2015 compared to $4.45 million at December 31, 2014.  The ratio of non-performing assets to total assets rose to 0.31% at June 30, 2015 from 0.26% at December 31, 2014 but continues to remain one of the lowest in the country.  The allowance for loan losses at June 30, 2015 was $1.99 million and represented 0.18% of total loans compared to $1.69 million and 0.17% of total loans as of December 31, 2014. 

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.territorialsavings.net/.

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, including those set forth in the Company's filings with the Securities and Exchange Commission, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: 

  • general economic conditions, either nationally, internationally 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;
  • our ability to enter new markets successfully and capitalize on growth opportunities;
  • our ability to successfully integrate acquired entities, if any;
  • changes in consumer 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;
  • changes in our financial condition or results of operations that reduce capital available to pay dividends; and
  • changes in the financial condition or future prospects of issuers of securities that we own. 

 

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.

  

TERRITORIAL BANCORP INC. AND SUBSIDIARIES 
Consolidated Statements of Income (Unaudited) 
(Dollars in thousands, except share data) 
 
        Three Months Ended Six Months Ended
        6/30/2015 6/30/2014 6/30/2015 6/30/2014
Interest and dividend income:         
 Loans    $  11,266  $  9,760  $  21,952  $  19,300 
 Investment securities     4,274     5,086     8,797     10,160 
 Other investments     70     35     149     78 
     Total interest and dividend income     15,610     14,881     30,898     29,538 
Interest expense:         
 Deposits      1,154     1,103     2,288     2,194 
 Advances from the Federal Home Loan Bank     157     66     227     132 
 Securities sold under agreements to repurchase    243     343     555     686 
     Total interest expense     1,554     1,512     3,070     3,012 
     Net interest income     14,056     13,369     27,828     26,526 
Provision for loan losses    101     156     295     165 
     Net interest income after provision for loan losses    13,955     13,213     27,533     26,361 
Noninterest income:        
 Service fees on loan and deposit accounts     527     524     987     1,023 
 Income on bank-owned life insurance     256     264     511     532 
 Gain on sale of investment securities    240     309     476     655 
 Gain on sale of loans    110     86     239     165 
 Other        115     96     281     262 
     Total noninterest income    1,248     1,279     2,494     2,637 
Noninterest expense:        
 Salaries and employee benefits    5,064     5,297     10,163     10,660 
 Occupancy     1,428     1,409     2,865     2,831 
 Equipment     953     905     1,898     1,819 
 Federal deposit insurance premiums     211     201     420     400 
 Other general and administrative expenses     1,187     935     2,401     1,901 
     Total noninterest expense    8,843     8,747     17,747     17,611 
Income before income taxes     6,360     5,745     12,280     11,387 
Income taxes     2,523     2,026     4,917     4,206 
     Net income  $  3,837  $  3,719  $  7,363  $  7,181 
               
Basic earnings per share $  0.42  $  0.41  $  0.81  $  0.78 
Diluted earnings per share $  0.41  $  0.40  $  0.79  $  0.77 
Cash dividends declared per common share $  0.16  $  0.15  $  0.32  $  0.29 
Basic weighted-average shares outstanding    9,053,383     9,164,801     9,086,865     9,176,108 
Diluted weighted-average shares outstanding    9,307,988     9,346,872     9,314,776     9,363,631 
               

  

TERRITORIAL BANCORP INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
(Dollars in thousands, except share data)
 
Assets 6/30/2015 12/31/2014
Cash and cash equivalents $  36,250  $  75,060 
Investment securities held to maturity, at amortized cost     
 (fair value of $530,136 and $586,710 at June 30, 2015 and    
 December 31, 2014, respectively)    525,708     572,922 
Loans receivable, net    1,110,823     968,212 
Loans held for sale    455     1,048 
Federal Home Loan Bank stock, at cost    4,310     11,234 
Federal Reserve Bank stock, at cost    2,971     2,925 
Accrued interest receivable    4,587     4,436 
Premises and equipment, net    5,314     5,629 
Real estate owned    192     - 
Bank-owned life insurance     41,814     41,303 
Deferred income taxes receivable    8,568     7,254 
Prepaid expenses and other assets     2,086     1,874 
     Total assets  $  1,743,078  $  1,691,897 
     
Liabilities and Stockholders' Equity    
Liabilities:       
 Deposits   $  1,373,379  $  1,359,679 
 Advances from the Federal Home Loan Bank    57,000     15,000 
 Securities sold under agreements to repurchase    60,000     72,000 
 Accounts payable and accrued expenses    27,011     24,098 
 Current income taxes payable     2,647     826 
 Advance payments by borrowers for taxes and insurance    4,677     3,916 
     Total liabilities     1,524,714     1,475,519 
Stockholders' Equity:     
 Preferred stock, $.01 par value; authorized 50,000,000 shares, no    
  shares issued or outstanding    -     - 
 Common stock, $.01 par value; authorized 100,000,000 shares;    
  issued and outstanding 9,719,600 and 9,919,064 shares    
  at June 30, 2015 and December 31, 2014, respectively    97     99 
 Additional paid-in capital    72,528     75,229 
 Unearned ESOP shares    (6,606)    (6,851)
 Retained earnings    157,673     153,289 
 Accumulated other comprehensive loss     (5,328)    (5,388)
     Total stockholders' equity     218,364     216,378 
     Total liabilities and stockholders' equity  $  1,743,078  $  1,691,897 
           

 

             
  TERRITORIAL BANCORP INC. AND SUBSIDIARIES    
  Selected Financial Data (Unaudited)    
  June 30, 2015    
             
             
       Three Months Ended   
       June 30,   
        2015   2014    
 Performance Ratios (annualized):         
             
 Return on average assets     0.89%  0.91%   
 Return on average equity     7.04%  6.95%   
 Net interest margin on average interest earning assets  3.37%  3.39%   
             
             
             
       At June At December    
       30, 2015  31, 2014    
 Selected Balance Sheet Data:         
             
 Book value per share (1)    $22.47  $21.81    
 Stockholders' equity to total assets    12.53%  12.79%   
             
             
 Asset Quality           
 (Dollars in thousands):          
             
 Delinquent loans 90 days or more past due and not accruing (2) $1,805  $758    
 Non-performing assets (2)   $5,403  $4,453    
 Allowance for loan losses    $1,994  $1,691    
 Non-performing assets to total assets    0.31%  0.26%   
 Allowance for loan losses to total loans   0.18%  0.17%   
 Allowance for loan losses to non-performing assets  36.91%  37.97%   
             
             
 Note:           
             
 (1) Book value per share is equal to stockholders' equity divided by number of shares issued and outstanding 
 (2) Amounts are net of charge-offs         
             

 

 

 

Contact: Walter Ida (808) 946-1400

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