Mahalo for supporting Honolulu Star-Advertiser. Enjoy this free story!
Territorial Bancorp Inc., which generates more than 97% of its real estate loans from one- to four-family residential properties, posted a 17.9% decline in fourth-quarter net income as loan repayments and sales exceeded new loan originations.
The state’s fifth-largest bank reported Thursday that earnings fell to $3.4 million, or 39 cents a share, to fall short of analysts’ consensus earnings estimate of 42 cents. In the year-earlier quarter, Territorial earned $4.2 million, or 46 cents a share.
Territorial also announced that it relocated its corporate headquarters in early December to Pauahi Tower at 1003 Bishop St. from 1132 Bishop St. because of a more favorable lease.
Loans receivable, including loans held for sale, decreased by $8.1 million, to $1.29 billion, at the end of the year from $1.3 billion as of year-end 2021.
“While 2022’s, and likely 2023’s, interest rate environment makes it challenging, we expect that our strong capital and solid asset quality will sustain us through this cycle,” Territorial Chairman and CEO Allan Kitagawa said in a statement. “We have been through many different interest rate cycles over the years and believe that our capital and asset quality positions will continue to be important to our constituencies.”
Territorial announced it would keep its quarterly dividend at 23 cents a share and that it will be payable Feb. 23 to stockholders of record as of Feb. 9. On Dec. 8, Territorial declared a special cash dividend of 10 cents a share that was paid Dec. 29.
“For our shareholders, we are proud to have announced our twelfth repurchase program during the December quarter as well as paying a special dividend. We will continue to look for areas to enhance shareholder value, such as our recent corporate headquarters move to less expensive space, as we move forward.”
In the fourth quarter, Territorial set aside $27,000 for potential loan losses, compared with the year-earlier quarter when it released $140,000 from its loan-loss reserve to its income statement.
The bank’s net interest income, which is the difference between what it generates from loans and pays out in deposits, dipped 4.3% to $13.3 million from the year-earlier quarter. Its net interest margin fell 16 basis points to 2.56% from 2.72% a year earlier.
Noninterest income, which includes service charges and fees, declined 8.8% to $1.2 million.
Deposits rose 2% to $1.72 billion.
For the year, Territorial’s net income fell 7.3% to $16.2 million from $17.4 million in 2021. During 2022, Territorial released $576,000 from its loan-loss reserve, compared with releasing $1.6 million from its reserve in 2021.
Territorial’s stock closed down 30 cents at $24.02 before the earnings were announced.
FOURTH-QUARTER NET
$3.4 million
YEAR-EARLIER NET
$4.2 million
81