- 2014 diluted earnings per share $1.51, up from $1.49 for
2013.
- Net interest income for 2014 rose by $3.6 million compared to
2013.
- Net interest income for the fourth quarter increased by
$565,000, compared to the fourth quarter of 2013.
- Board of Directors declares dividend of $0.16 per share.
- Total dividends per share of common stock rose by 12.9% in 2014
to $0.70 cents per share.
- Loans grew by 13.0% in 2014 to $968.2 million at December 31,
2014.
- Deposits rose by 5.5% in 2014 to $1.360 billion at December 31,
2014.
Territorial Bancorp Inc. (Nasdaq:TBNK) (the "Company"),
headquartered in Honolulu, Hawaii, the holding company parent of
Territorial Savings Bank, announced net income of $3.5 million or
$0.37 per basic and diluted share for the three months ended
December 31, 2014, compared to $3.5 million or $0.37 per basic and
diluted share for the three months ended December 31, 2013. Loans
grew by 4.6 % during the three months ended December 31, 2014 and
by 13.0% for the year ended December 31, 2014. Deposits rose by
5.5% in 2014. During the year, the Company successfully completed
its fifth share repurchase program and also commenced its sixth
share repurchase program.
The Company also announced that its Board of Directors approved
a quarterly cash dividend on its common stock of $0.16 per share.
The dividend is expected to be paid on February 23, 2015 to
stockholders of record as of February 9, 2015.
Allan Kitagawa, Chairman and Chief Executive Officer, said, "We
have been very successful in increasing our net interest income and
the size of our loan portfolio in 2014. We are working to improve
our shareholder returns by continuing our stock repurchase program
and paying dividends. I am pleased to announce that in addition to
the $0.10 per share special dividend paid in December 2014, we will
be paying a quarterly dividend of $0.16 per share."
Quarterly Results:
Interest Income
Net interest income increased to $13.5 million for the three
months ended December 31, 2014 from $13.0 million for the three
months ended December 31, 2013. Total interest and dividend income
was $15.1 million for the three months ended December 31, 2014
compared to $14.4 million for the three months ended December 31,
2013. The $668,000 increase in interest and dividend income was
primarily due to an increase of $1.0 million in interest earned on
loans that occurred because of growth in the loan portfolio. This
was partially offset by a $397,000 reduction in interest earned on
investment securities that occurred because of a decrease in the
size of the investment portfolio.
Interest Expense and Provision for Loan
Losses
Total interest expense increased to $1.6 million for the three
months ended December 31, 2014 compared to $1.5 million for the
three months ended December 31, 2013. The increase in interest
expense was primarily due to a $71,000 increase in interest expense
on deposits and a $32,000 increase of interest expense on
securities sold under agreements to repurchase. During the fourth
quarter of 2014, there was a provision of $172,000 for loan losses
compared to a credit of $8,000 to the provision for loan losses for
the quarter ended December 31, 2013. The increase in loan loss
provisions occurred primarily because of growth in the loan
portfolio.
Noninterest Income
Noninterest income was $1.1 million for the three months ended
December 31, 2014 compared to $1.7 million for the three months
ended December 31, 2013. The reduction in noninterest income was
primarily due to a $400,000 decrease in gain on sale of securities,
a decrease of $121,000 in services fees on loan and deposit
accounts, a decrease of $38,000 in gain on sale of loans and a
$29,000 decrease on income on bank-owned life insurance.
Noninterest Expense
Noninterest expense decreased to $8.6 million for the three
months ended December 31, 2014 as compared to $9.0 million for the
three months ended December 31, 2013. The decrease in noninterest
expense was primarily due to lower salaries and employee benefits,
equipment expenses and other general and administrative expenses
which was partially offset by increases in occupancy and FDIC
insurance premiums.
Year Ended December 31, 2014 Results:
For the year ended December 31, 2014 net interest income was
$53.5 million compared to $49.9 million for the year ended December
31, 2013. Total interest and dividend income increased to $59.6
million for the year ended December 31, 2014 from $56.2 million for
the year ended December 31, 2013 primarily because of an increase
in interest income on loans that occurred because of growth in the
loan portfolio. Total interest expense decreased to $6.1
million for the year ended December 31, 2014 from $6.3 million for
the year ended December 31, 2013, primarily due to a decrease in
interest paid on securities sold under agreements to
repurchase. This was partially offset by an increase in
interest expense on deposits that occurred because of growth in
total deposits. Provision for loan losses increased to
$360,000 for the year ended December 31, 2014 compared to $39,000
for the year ended December 31, 2013 primarily because of growth in
the loan portfolio.
Noninterest income was $5.2 million for the year ended December
31, 2014 compared to $8.7 million for the year ended December 31,
2013. This decrease in noninterest income was primarily due to
decreases in gains on sale of investment securities, gains on sales
of loans and service fees on loan and deposit accounts.
Noninterest expense was $35.3 million for the year ended
December 31, 2014 compared to $35.1 million for the year ended
December 31, 2013. The increase in noninterest expense was
primarily due to increases in occupancy and equipment expenses.
Net income for 2014 was $14.1 million compared to $14.6 million
earned in 2013. The decline in net income can be attributed
primarily to a decrease in non-interest income which was partially
offset by an increase in net interest income.
Assets and Equity
Total assets increased to $1.692 billion at December 31, 2014
from $1.617 billion at December 31, 2013. Loans receivable grew to
$968.2 million at December 31, 2014 from $856.5 million at December
31, 2013 as new loan originations exceeded loan repayments and loan
sales. Investment securities decreased to $572.9 million at
December 31, 2014 from $613.4 million at December 31, 2013 as
repayments and sales exceeded new security purchases. The
growth in loans receivable was funded by an increase in deposits
and repayments on investment securities. Deposits grew to
$1.360 billion at December 31, 2014 from $1.289 billion at December
31, 2013. Total stockholders' equity increased to $216.4
million at December 31, 2014 from $212.1 million at December 31,
2013. The increase in stockholders' equity was primarily due
to 2014 earnings which was partially offset by dividend payments
and by the cost of shares repurchased in the Company's stock
repurchase programs. Since becoming a public company in 2009
through December 31, 2014, the Company has repurchased 2,749,789
shares, compared to 2,528,259 shares as of December 31,
2013.
Asset Quality
Total delinquent loans past due and not accruing totaled
$758,000 (4 loans) at December 31, 2014, compared to $1.6 million
(5 loans) at December 31, 2013. Non-performing assets totaled
$4.5 million at December 31, 2014 compared to $6.0 million at
December 31, 2013. The ratio of non-performing assets to total
assets of 0.26% at December 31, 2014 continues to remain one of the
lowest in the country. The allowance for loan losses at
December 31, 2014 was $1.7 million and represented 0.17% of total
loans. At December 31, 2013, the allowance for loan losses was
$1.5 million and represented 0.17% of total loans.
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.
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
per share data) |
|
|
Three Months
Ended |
Year
Ended |
|
December
31 |
December
31 |
|
2014 |
2013 |
2014 |
2013 |
Interest and dividend income: |
|
|
|
|
Investment securities |
$ 4,697 |
$ 5,094 |
$ 19,752 |
$ 18,941 |
Loans |
10,300 |
9,286 |
39,620 |
36,982 |
Other investments |
90 |
39 |
243 |
252 |
Total interest and dividend
income |
15,087 |
14,419 |
59,615 |
56,175 |
Interest expense: |
|
|
|
|
Deposits |
1,142 |
1,071 |
4,474 |
4,296 |
Advances from the Federal Home Loan
Bank |
67 |
67 |
266 |
302 |
Securities sold under agreements to
repurchase |
346 |
314 |
1,378 |
1,684 |
Total interest expense |
1,555 |
1,452 |
6,118 |
6,282 |
Net interest income |
13,532 |
12,967 |
53,497 |
49,893 |
Provision (reversal of allowance) for loan
losses |
172 |
(8) |
360 |
39 |
Net interest income after
provision for loan losses |
13,360 |
12,975 |
53,137 |
49,854 |
Noninterest income: |
|
|
|
|
Service fees on loan and deposit
accounts |
444 |
565 |
2,022 |
2,232 |
Income on bank-owned life
insurance |
263 |
292 |
1,060 |
1,066 |
Gain on sale of investment
securities |
216 |
616 |
1,263 |
3,450 |
Gain on sale of loans |
113 |
151 |
396 |
1,541 |
Other |
106 |
98 |
436 |
427 |
Total noninterest income |
1,142 |
1,722 |
5,177 |
8,716 |
Noninterest expense: |
|
|
|
|
Salaries and employee benefits |
4,870 |
5,333 |
20,932 |
21,015 |
Occupancy |
1,456 |
1,394 |
5,761 |
5,365 |
Equipment |
926 |
948 |
3,701 |
3,524 |
Federal deposit insurance
premiums |
206 |
196 |
808 |
770 |
Other general and administrative
expenses |
1,160 |
1,175 |
4,106 |
4,403 |
Total noninterest expense |
8,618 |
9,046 |
35,308 |
35,077 |
Income before income taxes |
5,884 |
5,651 |
23,006 |
23,493 |
Income taxes |
2,430 |
2,137 |
8,909 |
8,846 |
Net income |
3,454 |
3,514 |
$ 14,097 |
$ 14,647 |
|
|
|
|
|
Basic earnings per share |
$ 0.37 |
$ 0.37 |
$ 1.53 |
$ 1.51 |
Diluted earnings per share |
$ 0.37 |
$ 0.37 |
$ 1.51 |
$ 1.49 |
Cash dividends declared per common share |
$ 0.26 |
$ 0.24 |
$ 0.70 |
$ 0.62 |
Basic weighted-average shares
outstanding |
9,273,524 |
9,415,999 |
9,211,409 |
9,711,233 |
Diluted weighted-average shares
outstanding |
9,426,484 |
9,591,430 |
9,317,323 |
9,844,942 |
|
|
|
|
|
TERRITORIAL BANCORP
INC. AND SUBSIDIARIES |
Consolidated Balance Sheets
(Unaudited) |
(Dollars in thousands, except
share data) |
|
|
|
ASSETS |
12/31/2014 |
12/31/2013 |
Cash and cash equivalents |
$ 75,060 |
$ 75,365 |
Investment securities held to maturity, at
amortized cost (fair value of $586,710 and $598,007 at December 31,
2014 and 2013, respectively) |
572,922 |
613,436 |
Federal Home Loan Bank stock, at cost |
11,234 |
11,689 |
Federal Reserve Bank stock, at cost |
2,925 |
-- |
Loans held for sale |
1,048 |
2,210 |
Loans receivable, net |
968,212 |
856,542 |
Accrued interest receivable |
4,436 |
4,310 |
Premises and equipment, net |
5,629 |
6,056 |
Real estate owned |
-- |
-- |
Bank-owned life insurance |
41,303 |
40,243 |
Deferred income taxes receivable |
7,254 |
5,075 |
Prepaid expenses and other assets |
1,874 |
1,978 |
Total assets |
$ 1,691,897 |
$ 1,616,904 |
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
Liabilities: |
|
|
Deposits |
$ 1,359,679 |
$ 1,288,709 |
Advances from the Federal Home Loan
Bank |
15,000 |
15,000 |
Securities sold under agreements to
repurchase |
72,000 |
72,000 |
Accounts payable and accrued
expenses |
24,098 |
23,933 |
Current income taxes payable |
826 |
1,414 |
Advance payments by borrowers for taxes
and insurance |
3,916 |
3,708 |
Total liabilities |
1,475,519 |
1,404,764 |
Commitments and contingencies |
|
|
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 9,919,064 and 10,051,377
shares at December 31, 2014 and 2013, respectively |
99 |
101 |
Additional paid-in capital |
75,229 |
77,340 |
Unearned ESOP shares |
(6,851) |
(7,340) |
Retained earnings |
153,289 |
145,826 |
Accumulated other comprehensive
loss |
(5,388) |
(3,787) |
Total stockholders' equity |
216,378 |
212,140 |
Total liabilities and stockholders'
equity |
$ 1,691,897 |
$ 1,616,904 |
|
|
|
TERRITORIAL BANCORP
INC. AND SUBSIDIARIES |
Selected Financial Data
(Unaudited) |
|
|
|
|
Three Months Ended |
|
December 31, |
|
2014 |
2013 |
Performance Ratios (annualized): |
|
|
|
|
|
Return on average assets |
0.82% |
0.88% |
Return on average equity |
6.30% |
6.55% |
Net interest margin on average interest
earning assets |
3.35% |
3.38% |
|
|
|
|
|
|
|
At December |
At December |
|
31, 2014 |
31, 2013 |
Selected Balance Sheet Data: |
|
|
|
|
|
Book value per share (1) |
$21.81 |
$21.11 |
Stockholders' equity to total assets |
12.79% |
13.12% |
|
|
|
Asset Quality |
|
|
(Dollars in thousands): |
|
|
|
|
|
Delinquent loans 90 past due and not accruing
(2) |
$758 |
$1,577 |
Non-performing assets (2) |
4,453 |
6,000 |
Allowance for loan losses |
1,692 |
1,486 |
Non-performing assets to total assets |
0.26% |
0.37% |
Allowance for loan losses to total loans |
0.17% |
0.17% |
Allowance for loan losses to non-performing
assets |
38.00% |
24.77% |
|
|
|
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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