Territorial Bancorp Inc. (NASDAQ:TBNK) (the “Company”),
headquartered in Honolulu, Hawaii, the holding company parent of
Territorial Savings Bank, announced net income of $3.78 million or
$0.41 per diluted share for the three months ended March 31, 2016,
compared to $3.53 million or $0.38 per diluted share for the three
months ended March 31, 2015.
The Company also announced that its Board of Directors approved
a quarterly cash dividend of $0.18 per share. The dividend is
expected to be paid on May 26, 2016 to stockholders of record as of
May 12, 2016.
Allan Kitagawa, Chairman and Chief Executive Officer, said, “The
growth in our loan portfolio has resulted in a 7.1% increase in
total interest and dividend income for the three months ended March
31, 2016 as compared to the three months ended March 31,
2015. The increase in interest and dividend income occurred
because our loan portfolio grew by 16.9% to $1.215 billion at March
31, 2016 from $1.039 billion at March 31, 2015. The growth in
interest income has resulted in a 7.3% increase in net income for
the three months ended March 31, 2016 compared to the three months
ended March 31, 2015. This has allowed our fully-diluted
earnings per share to increase to $0.41 per share from $0.38 per
share. Based on this strong performance, we will pay our 26th
consecutive quarterly dividend on May 26, 2016.”
Interest Income
Net interest income after provision for loan losses increased to
$14.47 million for the three months ended March 31, 2016 from
$13.58 million for the three months ended March 31, 2015. Total
interest and dividend income was $16.38 million for the three
months ended March 31, 2016 compared to $15.29 million for the
three months ended March 31, 2015. The increase in interest and
dividend income was primarily due to a $1.68 million increase in
interest earned on loans which occurred because of the growth in
loans receivable. The increase in interest income on loans
was offset by a $648,000 decline in interest income on investment
securities due to a net reduction in the investment securities
portfolio as repayments exceeded securities purchased.
Interest Expense and Provision for Loan
Losses
Total interest expense increased to $1.88 million for the three
months ended March 31, 2016 from $1.52 million for the three months
ended March 31, 2015. Total interest expense on deposits
increased to $1.41 million for the three months ended March 31,
2016 from $1.13 million for the three months ended March 31,
2015. The increase in interest expense on deposits occurred
because of the growth in total deposits. Interest expenses on
advances from the Federal Home Loan Bank rose by $187,000 due to an
increase in Federal Home Loan Bank advances, which was primarily
used to fund new loans. Interest expense on securities sold
under agreements to repurchase decreased by $94,000 as maturing
borrowings were paid-off. During the quarter ended March 31,
2016, the provision for loan losses was $28,000 compared to a
$194,000 provision for the three months ended March 31, 2015.
Noninterest Income
Noninterest income was $886,000 for the three months ended March
31, 2016 compared to $1.25 million for the three months ended March
31, 2015. The reduction in noninterest income was primarily
due to a $236,000 decrease in the gain on sale of investment
securities that occurred as there were no securities sold during
the three months ended March 31, 2016.
Noninterest Expense
Noninterest expense was $9.06 million for the three months ended
March 31, 2016 compared to $8.90 million for the three months ended
March 31, 2015. Salaries and employee benefits was $5.43
million for the three months ended March 31, 2016 compared to $5.10
million for the three months ended March 31, 2015. The
increase in salaries and employee benefits expense is primarily due
to the hiring of additional staff to handle the additional workload
associated with an increase in regulatory requirements. The
increase in salaries and employee benefits expense can also be
attributed to a lower credit to compensation expense as the Bank
originated fewer loans in the three months ended March 31, 2016 as
compared to March 31, 2015. The rise in these expenses was
offset by a decrease of $132,000 in other general and
administrative expenses, primarily related to a reduction in
accounting and auditing expenses.
Assets and Equity
Total assets increased to $1.850 billion at March 31, 2016 from
$1.821 billion at December 31, 2015. Loans receivable grew by
$26.11 million or 2.2% to $1.215 billion at March 31, 2016 from
$1.189 billion at December 31, 2015 as residential mortgage loan
originations exceeded loan repayments and sales. The growth in
loans receivable was funded by a $29.82 million increase in
deposits. Deposits increased to $1.475 billion at March 31,
2016 from $1.445 billion at December 31, 2015. Total
stockholders’ equity increased to $223.03 million at March 31, 2016
from $219.64 million at December 31, 2015. The increase in
stockholders’ equity occurred as the Company’s net income for the
year exceeded share repurchases and dividends paid to shareholders.
Share Repurchases
Through December 31, 2015, the Company had repurchased 3,099,253
shares of stock or 25.33% of the shares issued in its initial
public offering in 2009. On March 7, 2016, the Company announced
the adoption of its seventh share repurchase program of up to
275,000 shares, or approximately 3% of the current outstanding
shares. The Company uses share repurchases as part of its
overall program to enhance shareholder value. In evaluating
our share repurchase programs, the Company considers the effect of
repurchases on its tangible book value per share. At the Company’s
current share price level, the amount of dilution to tangible book
value may limit the Company’s repurchasing of shares. The
Company will closely monitor this issue and, depending on market
and other conditions, will conduct repurchases when it makes
financial sense.
Asset Quality
Total delinquent loans 90 days or more past due and not accruing
totaled $1.35 million (5 loans) at March 31, 2016, compared to
$1.63 million (7 loans) at December 31, 2015. Non-performing
assets totaled $5.16 million at March 31, 2016 compared to $5.42
million at December 31, 2015. The ratio of non-performing
assets to total assets declined to 0.28% at March 31, 2016 from
0.30% at December 31, 2015 and continues to remain one of the
lowest in the country. The allowance for loan losses at March
31, 2016 was $2.18 million and represented 0.18% of total loans
compared to $2.17 million and 0.18% of total loans as of December
31, 2015.
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 market and other conditions that would affect our
ability to repurchase our shares of common stock.
- 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 |
|
|
March 31, |
|
|
2016 |
|
2015 |
Interest
and dividend income: |
|
|
|
|
|
|
Loans |
|
$ |
12,361 |
|
$ |
10,686 |
Investment securities |
|
|
3,875 |
|
|
4,523 |
Other investments |
|
|
144 |
|
|
79 |
Total interest and dividend
income |
|
|
16,380 |
|
|
15,288 |
|
|
|
|
|
|
|
Interest
expense: |
|
|
|
|
|
|
Deposits |
|
|
1,408 |
|
|
1,134 |
Advances from the Federal Home Loan
Bank |
|
|
257 |
|
|
70 |
Securities sold under agreements to
repurchase |
|
|
218 |
|
|
312 |
Total interest expense |
|
|
1,883 |
|
|
1,516 |
|
|
|
|
|
|
|
Net interest income |
|
|
14,497 |
|
|
13,772 |
Provision for loan losses |
|
|
28 |
|
|
194 |
|
|
|
|
|
|
|
Net interest income after provision
for loan losses |
|
|
14,469 |
|
|
13,578 |
|
|
|
|
|
|
|
Noninterest income: |
|
|
|
|
|
|
Service fees on loan and deposit
accounts |
|
|
456 |
|
|
460 |
Income on bank-owned life
insurance |
|
|
247 |
|
|
255 |
Gain on sale of investment
securities |
|
|
— |
|
|
236 |
Gain on sale of loans |
|
|
61 |
|
|
129 |
Other |
|
|
122 |
|
|
166 |
Total noninterest income |
|
|
886 |
|
|
1,246 |
|
|
|
|
|
|
|
Noninterest expense: |
|
|
|
|
|
|
Salaries and employee
benefits |
|
|
5,426 |
|
|
5,099 |
Occupancy |
|
|
1,420 |
|
|
1,437 |
Equipment |
|
|
906 |
|
|
945 |
Federal deposit insurance
premiums |
|
|
225 |
|
|
209 |
Other general and administrative
expenses |
|
|
1,082 |
|
|
1,214 |
Total noninterest expense |
|
|
9,059 |
|
|
8,904 |
|
|
|
|
|
|
|
Income
before income taxes |
|
|
6,296 |
|
|
5,920 |
Income
taxes |
|
|
2,512 |
|
|
2,394 |
Net income |
|
$ |
3,784 |
|
$ |
3,526 |
|
|
|
|
|
|
|
Basic
earnings per share |
|
$ |
0.42 |
|
$ |
0.39 |
Diluted
earnings per share |
|
$ |
0.41 |
|
$ |
0.38 |
Cash
dividends declared per common share |
|
$ |
0.18 |
|
$ |
0.16 |
Basic
weighted-average shares outstanding |
|
|
9,034,919 |
|
|
9,120,720 |
Diluted
weighted-average shares outstanding |
|
|
9,305,615 |
|
|
9,319,814 |
TERRITORIAL BANCORP INC. AND
SUBSIDIARIES |
Consolidated Balance Sheets (Unaudited) |
(Dollars in thousands, except share data) |
|
|
|
|
|
|
|
March 31, |
|
December
31, |
|
2016 |
|
2015 |
ASSETS |
|
|
|
|
|
Cash and
cash equivalents |
$ |
81,988 |
|
|
$ |
65,919 |
|
Investment securities held to maturity, at amortized cost (fair
value of $494,514 and $497,982 at March 31, 2016 and December 31,
2015, respectively) |
|
480,296 |
|
|
|
493,059 |
|
Loans
held for sale |
|
603 |
|
|
|
2,139 |
|
Loans
receivable, net |
|
1,214,762 |
|
|
|
1,188,649 |
|
Federal
Home Loan Bank stock, at cost |
|
4,945 |
|
|
|
4,790 |
|
Federal
Reserve Bank stock, at cost |
|
3,042 |
|
|
|
3,022 |
|
Accrued
interest receivable |
|
4,803 |
|
|
|
4,684 |
|
Premises
and equipment, net |
|
4,619 |
|
|
|
4,903 |
|
Bank-owned life insurance |
|
42,575 |
|
|
|
42,328 |
|
Current
income taxes receivable |
|
1,311 |
|
|
|
— |
|
Deferred
income tax assets, net |
|
8,758 |
|
|
|
9,378 |
|
Prepaid
expenses and other assets |
|
2,352 |
|
|
|
2,270 |
|
Total assets |
$ |
1,850,054 |
|
|
$ |
1,821,141 |
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
Deposits |
$ |
1,474,925 |
|
|
$ |
1,445,103 |
|
Advances from the Federal Home Loan
Bank |
|
69,000 |
|
|
|
69,000 |
|
Securities sold under agreements to
repurchase |
|
55,000 |
|
|
|
55,000 |
|
Accounts payable and accrued
expenses |
|
23,276 |
|
|
|
25,178 |
|
Current income taxes
payable |
|
1,805 |
|
|
|
2,095 |
|
Advance payments by borrowers for
taxes and insurance |
|
3,021 |
|
|
|
5,124 |
|
Total liabilities |
|
1,627,027 |
|
|
|
1,601,500 |
|
|
|
|
|
|
|
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 9,675,955 and
9,659,685 shares at March 31, 2016 and December 31, 2015,
respectively |
|
97 |
|
|
|
96 |
|
Additional paid-in capital |
|
71,259 |
|
|
|
70,118 |
|
Unearned ESOP shares |
|
(6,239 |
) |
|
|
(6,361 |
) |
Retained earnings |
|
163,163 |
|
|
|
161,024 |
|
Accumulated other comprehensive
loss |
|
(5,253 |
) |
|
|
(5,236 |
) |
Total stockholders’
equity |
|
223,027 |
|
|
|
219,641 |
|
Total liabilities and stockholders’
equity |
$ |
1,850,054 |
|
|
$ |
1,821,141 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TERRITORIAL BANCORP INC. AND SUBSIDIARIES |
|
|
|
|
|
|
|
|
Selected Financial Data (Unaudited) |
|
|
|
|
|
|
|
|
March 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
|
March 31, |
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
Performance
Ratios (annualized): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on
average assets |
|
|
|
|
|
0.83 |
% |
|
|
0.83 |
% |
Return on
average equity |
|
|
|
|
|
6.84 |
% |
|
|
6.50 |
% |
Net
interest margin on average interest earning assets |
|
|
3.28 |
% |
|
|
3.36 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March |
|
At December |
|
|
|
|
|
|
|
31, 2016 |
|
|
|
31, 2015 |
|
Selected
Balance Sheet Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value
per share (1) |
|
|
|
|
$ |
23.05 |
|
|
$ |
22.74 |
|
Stockholders' equity to total assets |
|
|
|
|
12.06 |
% |
|
|
12.06 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality |
|
|
|
|
|
|
|
|
(Dollars in
thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Delinquent
loans 90 days or more past due and not accruing (2) |
$ |
1,345 |
|
|
$ |
1,625 |
|
Non-performing assets (2) |
|
|
|
|
5,157 |
|
|
|
5,415 |
|
Allowance
for loan losses |
|
|
|
|
|
2,183 |
|
|
|
2,166 |
|
Non-performing assets to total assets |
|
|
|
|
0.28 |
% |
|
|
0.30 |
% |
Allowance
for loan losses to total loans |
|
|
|
0.18 |
% |
|
|
0.18 |
% |
Allowance
for loan losses to non-performing assets |
|
|
42.33 |
% |
|
|
40.00 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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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