Territorial Bancorp Inc.’s net income increased 8.7% in the fourth quarter as it benefited from a gain on loan sales and a one-time tax benefit.

The state’s fifth-largest bank reported today it had earnings of $5 million, or 54 cents a share, compared with $4.6 million, or 50 cents a share, in the year-earlier period.

The holding company of Territorial Savings Bank said its noninterest income jumped 21.2% to $1 million primarily due to a $318,000 increase in the gain of loan sales from the year-earlier quarter.

Territorial also reported that its income tax expense last quarter was $1.15 million at an 18.54% rate compared with $1.74 million at a 27.23% rate in the year-ago quarter. Last quarter’s income tax expense included a $402,000 tax benefit that occurred when the company filed an amended 2017 corporate tax return which included an increase in depreciation expense.

For the year, the bank’s earnings rose 14.5% to $22 million.

“We are pleased by the company’s performance in 2019,” Territorial Chairman and CEO Allan Kitagawa said. “We were able to increase our earnings by $2.78 million. Our strong performance allowed us to increase our cash dividends paid in 2019 by $0.35 or 30.70% per common share as compared to 2018.”

Loans and deposits in the fourth quarter were slightly ahead of a year ago. Loans edged up 0.6% to $1.58 billion while deposits ticked up 0.2% to $1.63 billion.

The bank’s net interest income, the difference between what it collects on loans and what it pays for deposits, fell 2.5% to $14.5 million while its net interest margin fell 13 basis points to 2.88%