Territorial Savings Bank originated fewer loans in the first quarter than a year earlier but reported an 11.5 percent increase in earnings as the company benefited from a lower tax rate and deposits increased.
The parent of the state’s fifth-largest bank, Territorial Bancorp Inc., said today that net income rose to $4.8 million, or 51 cents a share, from $4.3 million, or 46 cents a share, in the year-earlier period.
Territorial said it benefited from the Tax Cuts and Jobs Act that went into effect Jan. 1 and reduced the federal corporate tax rate to 21 percent from 35 percent. Territorial said its income tax expense during the first quarter was $1.76 million compared with $2.58 million in the year-earlier quarter.
Deposits rose 4.2 percent to $1.67 billion but loans receivable increased only 1.1 percent $1.51 billion. Assets gained 2.6 percent to $2.06 billion.
The company’s net interest income — the spread between what it takes in from loans and pays out for deposits — increased 3.9 percent to $15.2 million from $14.7 million.
“The company’s solid performance in the first quarter is a result of our ongoing efforts to increase the size of our loan portfolio by focusing on originating residential mortgage loans,” Territorial Chairman and CEO Allan Kitagawa said. “The continued growth of Hawaii’s economy, especially the visitor industry, has allowed us to increase the size of our loan portfolio and total deposits. Our asset quality and capital remain strong.”
The bank also maintained its quarterly dividend at 20 cents a share. It will be payable May 24 to stockholders of record as of May 10.
Territorial’s stock closed up 32 cents at $30.22 on Thursday. The financial results were announced after the market closed.