The parent of Territorial Savings Bank boosted earnings 2.9 percent in the first quarter and raised its dividend for the fifth time in the past two years as it continued to benefit from a strong loan portfolio.

Territorial Bancorp Inc. said Wednesday that net income rose to $3.6 million, or 36 cents a share, compared with $3.5 million, or 34 cents a share, in the year-earlier period. The results beat analysts’ consensus forecast of 31 cents.

The state’s fifth-largest bank increased its dividend to 13 cents a share from 12 cents. It will be paid May 29 to stockholders of record on May 15. That equals an annualized yield of 2.3 percent based on Wednesday’s closing price of $22.97.

Territorial’s stock fell 41 cents, or 1.8 percent. Earnings were released after the market closed.

In addition to the steady increase in dividends, the bank paid a special dividend of 10 cents a share in December, marking the fifth dividend it paid out in 2012.

"Territorial has a very significant amount of excess capital, so really what they’re doing is giving some of that excess capital back to shareholders, which I’m sure shareholders of Territorial are happy to see, particularly in an environment where it’s really tough to find yields out there," said analyst Aaron Deer of investment banking firm Sandler O’Neill. "Their capital is strong and their ratios are far above what’s required by regulators."

Last month, Territorial said it completed its third stock repurchase program.

"We continue to strive for improved shareholder returns through our stock repurchase program and payment of dividends," said Allan Kitagawa, chairman and CEO of Territorial.

The bank, which generates about 95 percent of its loans from residential mortgages, ended last quarter with loans receivable of $793.7 million, up 2.4 percent from $774.9 million at year-end and up 11.6 percent from $711.5 million in the first quarter of 2012.

"We have seen good growth in our loan portfolio," Kitagawa said. "Our emphasis is on producing mortgage loans with good credit quality and increasing the size of our loan portfolio."

Although the bank’s nonperforming assets — loans more than 90 days past due — nearly doubled from a year ago, rising to $5.1 million from $2.7 million, its ratio of nonperforming assets to total assets remained one of the lowest in the country at 0.33 percent.

Territorial was hurt by low interest rates and saw its net interest income — the difference between what it pays depositors and what it brings in from loans — fall 6.7 percent to $12.2 million from $13.1 million a year ago. Its net interest margin decreased to 3.22 percent from 3.47 percent.

But noninterest income, which includes service charges, fees and the gains on sales from both investment securities and loans, jumped 63.7 percent to $2.4 million from $1.4 million.

Territorial’s assets were flat from a year ago at $1.57 billion while deposits rose 3 percent to $1.24 billion.