Territorial Savings Bank surpassed analysts’ estimates as its net income edged up 1.3% in the second quarter amid improved margins stemming from higher interest rates and $1.5 million in interest earned on investment securities.

The state’s fifth-largest bank reported today it had net income of $4.11 million, or 46 cents a share, to beat analysts’ consensus estimate of 41 cents. In the year-earlier quarter, Territorial earned $4.06 million, or 44 cents a share.

“We were able to increase our net interest income by 7.54% and our fully-diluted earnings per share by 4.55%,” Territorial Chairman and CEO Allan Kitagawa said in a statement. “Our strong capital and asset quality will allow us to serve our community during these uncertain times. The company intends to continue to enhance shareholder value through dividends and share repurchases.”

Territorial Bancorp Inc., the holding company, declared a quarterly dividend of 23 cents a share that will be paid Aug. 25 to stockholders of record as of Aug. 11. On July 12, the company also announced it repurchased 220,029 of common shares and completed its 11th share repurchase program.

The bank’s net interest margin, which is the difference from what it pays out in deposits and generates from loans, rose to 2.72% last quarter from 2.54% in the year-earlier period. Net interest income increased 7.5% to $14.1 million.

Noninterest income, which includes service charges and fees, fell 53.7% to $800,000 primarily due to a $911,000 decrease in the gain on sale of investment securities that occurred because no securities were sold during the three months ended June 30.

Territorial released from its loan-loss reserve $326,000 last quarter that had been put aside for potential loan losses. That compares with the $372,000 released back to its income statement in the second quarter of 2021.

Territorial’s loans receivable were virtually flat with the year-earlier quarter at $1.29 billion. Deposits rose 3% to $1.73 billion.

Shares of the company rose 19 cents to $22.16 before the earnings were announced.