Territorial Savings Bank increased its quarterly dividend for the sixth time in just more than two years even as net income slipped 4.9 percent in the January-March period.

The state’s fifth-largest bank said Thursday its earnings fell to $3.5 million, or 37 cents a share, from $3.6 million, or 36 cents a share, in the year-earlier quarter primarily due to decreases in both loan and investment securities sales.

But the board of holding company Territorial Bancorp Inc. approved the company’s 17th consecutive quarterly dividend in raising the payout to 15 cents a share from 14 cents a share. It will be payable May 29 to stockholders of record as of May 15. That equates to an annualized yield of 2.92 percent based on Thursday’s closing price of $20.55.

"We continue to focus on improving long-term shareholder returns and the effective utilization of our capital," Territorial Chairman and Chief Executive Officer Allan Kitagawa said.

Territorial also has been buying back stock and completed its fifth stock repurchase program in February. The company’s earnings per share did not decline despite the dip in net income because Territorial’s buyback program has reduced the number of outstanding shares.

"We returned 151 percent of our first quarter’s net income back to shareholders in the form of dividends and share repurchases," Kitagawa said.

Since March 1, 2012, Territorial has raised its dividend six times and also paid two special dividends of 10 cents a share each.

Territorial said its noninterest income declined 42.5 percent during the first quarter as its sales of investment securities fell 61 percent to $346,000 from $888,000 and its loan sales declined 87.8 percent to $79,000 from $645,000.

However, the bank’s net interest income the spread between loans and deposits rose 8 percent to $13.2 million from $12.2 million. Its net interest margin improved to 3.36 percent from 3.22 percent in the year-earlier quarter.

Territorial, which generates more than 95 percent of its loans from residential mortgages, saw its loans receivable rise 9.9 percent to $872.6 million from $793.7 million in the year-earlier quarter.

Deposits rose 6.5 percent to $1.32 billion from $1.24 billion, and assets increased 4.8 percent to $1.64 billion from $1.57 billion.

The company’s asset quality remained strong: Its ratio of nonperforming assets loans 90 or more days delinquent to total assets of 0.31 percent still is one of the lowest in the country.

Territorial, which went public in July 2009 when it converted from mutual to full stock ownership, has seen its stock more than double since its initial public offering at $10 a share. Territorial’s stock rose 9 cents Thursday on the Nasdaq before earnings were released following the close of the market.