Territorial Bancorp Inc. on Thursday reaffirmed its board of directors’ commitment to the proposed merger with Los Angeles- based Hope Bancorp Inc. following an unsolicited acquisition proposal from Blue Hill Advisors LLC.

“The unsolicited letter from Blue Hill claims to provide a nominally higher purchase price, but there are significant factors making the proposal highly uncertain and inferior to the merger agreed upon with Hope,” Allan Kitagawa, chairman, CEO and president of Territorial, said in a statement. “The Territorial Board carefully considered the proposal on two separate occasions, and after weighing the advice of independent legal and financial advisors, the Board rejected the proposal. In comparison to the Hope merger, where we have an experienced acquiror and a fully negotiated merger agreement, and where all required regulatory applications have been made and are being processed, and no third-party financing is required, the Blue Hill proposal is highly speculative. We again urge shareholders to vote ‘yes’ in favor of the proposed merger with Hope Bancorp.”

On Tuesday, Blue Hill and other bank investors reaffirmed their commitment to a $12-per-share cash offer for Territorial, initially announced April 29, that would allow up to 30% of current shareholders to remain invested in the state’s fifth-largest bank as it aims for a turnaround under new leadership.

The proposal, delivered Aug. 26 by former Bank of Hawaii CEO Allan Landon, was presented as an alternative to Territorial’s planned merger with Hope Bancorp. Blue Hill Advisors’ offer values Territorial at a 29% premium to its Sept. 12 closing price and a 70% premium to the closing price the day before the Hope merger was announced in April.

Despite the offer, Territorial’s board of directors has rejected the proposal twice — on Sept. 6 and 12 — citing merger terms with Hope that restrict the pursuit of competing proposals unless they are “reasonably likely to lead to a Superior Proposal.”

“We think our proposal is significantly better for Territorial’s shareholders and other constituents,” Landon said in a statement. “We requested the opportunity to engage with the Board, but the terms of the Hope merger agreement prevented that. If given the opportunity, we are prepared to move quickly and would expect to close our investment by year end.”

In its statement Thursday, Territorial stated that the “Blue Hill proposal was found to contain multiple flaws.”

According to Territorial, the offer lacked evidence of the investors’ financial capability to support it and provided no assurance that the group could secure the necessary regulatory approvals promptly, if at all.

Territorial also noted that the proposal was contingent on several conditions, including due diligence and the completion of a tender offer requiring the cancellation of at least 70% of Territorial’s outstanding shares. In contrast, the Hope merger already has undergone a detailed due-diligence review, with only a few remaining conditions left for completion.

“These and other aspects of the Blue Hill proposal led the Territorial Board to reject it in the long-term interests of shareholders,” Territorial said in its statement.

Landon and the investors argue that Territorial’s shares are undervalued and could rebound as expected interest rate cuts ease funding pressures and buoy asset values. On Wednesday the Federal Reserve cut interest rates by a half-point. Territorial’s shares finished Friday at $10.30.

Blue Hill Advisors added that the proposal could help preserve a century-old Hawaii institution dedicated to serving local communities, keep Territorial under local leadership with minimal disruption to employees and customers, and provide opportunity for Territorial to return to profitability and growth.

The proposal also could create more jobs in Hawaii as the company invests in future growth and technology while also allowing current shareholders who participate to share in expected value creation.

“We believe Territorial shares have considerable upside from here,” Jason Blumberg, managing member of Blue Hill Advisors, said Tuesday in a statement. “We are providing a substantial premium in cash and offering a meaningful percentage of existing shareholders the option to participate in the bank’s recovery if they choose to. The merger with Hope substantially dilutes the value of any recovery in Territorial. Shareholders who want to own Hope stock can take our cash and buy more shares than they would have received in the merger.”

Territorial Bancorp, with about $2 billion in assets, operates 28 Territorial Savings Bank branches on Oahu, Maui, Kauai and Hawaii island.

Hope Bancorp operates Bank of Hope, which has 48 branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Alabama and Georgia. The company has about $17 billion in assets.

Blue Hill Advisors said the merger with Hope would leave Territorial shareholders with just a 5.6% stake in the new company, reducing their ability to benefit from the expected recovery.

Under the merger agreement with Hope, Territorial shareholders will receive 0.8 share of Hope Bancorp common stock in exchange for each share of Territorial common stock they own.

“Voting against the Hope merger would send a message that shareholders believe the bank has better options,” Blumberg added.

While the investors remain hopeful, it will ultimately be up to Territorial’s shareholders to decide, as the Hope merger requires approval from a majority of outstanding shares.

Territorial shareholders who want more information about the new offer can contact Blue Hill Advisors for more information at 917-733-0381 or jason@bluehilladv.com, or to express their support for the proposal directly to Territorial’s board.

Shareholders who already have voted in favor of the Hope merger but wish to change their vote still can do so before the Oct. 10 special meeting of Territorial stockholders. Instructions for changing votes is described in the prospectus that Hope filed Aug. 22 with the U.S. Securities and Exchange Commission. It can be accessed at 808ne.ws/4ezZqmt.