HONOLULU, May 1, 2014 (GLOBE NEWSWIRE) -- Territorial Bancorp Inc. (Nasdaq:TBNK) (the "Company"), headquartered in Honolulu, Hawaii, the holding company parent of Territorial Savings Bank, announced net income of $3.5 million or $0.38 per basic and $0.37 per diluted share for the three months ended March 31, 2014, compared to $3.6 million or $0.37 per basic and $0.36 per diluted share for the three months ended March 31, 2013. The slight reduction in net income for the first quarter of 2014 was primarily due to decreases in the gain on sale of loans and in the gain on sale of investment securities. They were offset, in part, by an increase in net interest income. The decrease in net income did not cause a decline in basic or diluted earnings per share because of a reduction in the weighted-average shares outstanding, which resulted from the Company successfully completing its fifth share repurchase program in February of 2014.
The Company also announced that its Board of Directors approved an increase in its quarterly cash dividend from $0.14 to $0.15 per share. The dividend is expected to be paid on May 29, 2014 to stockholders of record as of May 15, 2014.
Allan Kitagawa, Chairman and Chief Executive Officer, said "We continue to focus on improving long-term shareholder returns and the effective utilization of our capital. We completed our fifth stock repurchase program in February 2014 and increased our dividend to $0.15 from $0.14 per share of common stock. As a result, we returned 151% of our first quarter's net income back to shareholders in the form of dividends and share repurchases."
Net interest income increased to $13.2 million for the three months ended March 31, 2014 from $12.2 million for the three months ended March 31, 2013. Total interest and dividend income was $14.7 million for the three months ended March 31, 2014 compared to $13.9 million for the three months ended March 31, 2013. The $775,000 increase in interest and dividend income was primarily due to an increase of $520,000 in interest earned on investment securities and an increase of $310,000 of interest earned on loans. This was offset, in part, by a $55,000 reduction in interest earned from other investments.
Interest Expense and Provision for Loan Losses
Total interest expense decreased to $1.5 million for the three months ended March 31, 2014 compared to $1.7 million for the three months ended March 31, 2013. The decrease in interest expense was primarily due to a $134,000 reduction of interest expense on securities sold under agreements to repurchase and a $66,000 reduction of interest expense on deposits and Federal Home Loan Bank advances. These reductions were primarily due to the payoff of higher costing securities sold under agreements to repurchase and a decrease in the cost of deposits which occurred in this lower interest rate environment. During the first quarter of 2014, there was a $9,000 provision for loan losses compared to $18,000 for the first quarter of 2013.
Noninterest income was $1.4 million for the three months ended March 31, 2014 compared to $2.4 million for the three months ended March 31, 2013. The reduction in noninterest income was primarily due to a $566,000 decrease in gain on sale of loans and a $542,000 decrease in gain on sale of investment securities. This was partially offset by a $61,000 increase in other noninterest income and a $47,000 increase in income on bank-owned life insurance.
Noninterest expense increased to $8.9 million for the three months ended March 31, 2014 as compared to $8.7 million for the three months ended March 31, 2013. The increase in noninterest expense was primarily due to an increase in occupancy expense that includes rent, depreciation and repairs and maintenance expenses.
Income Taxes and Net Income
A $166,000 decrease in income before taxes and a slight increase in the effective tax rate caused net income for the first quarter of 2014 to be $179,000 lower than net income for the first quarter of 2013.
Assets and Equity
Total assets increased to $1.640 billion at March 31, 2014 from $1.617 billion at December 31, 2013. Loans receivable grew to $872.6 million at March 31, 2014 from $856.5 million at December 31, 2013 as residential mortgage loan originations exceeded loan repayments and sales. Investment securities increased to $623.6 million as of March 31, 2014 from $613.4 million at December 31, 2013 as new securities purchased exceeded the amount of repayments and sales. The growth in loans receivable and investment securities was funded by an increase in deposits. Deposits increased to $1.317 billion at March 31, 2014 from $1.289 billion at December 31, 2013. Total stockholders' equity decreased to $211.4 million at March 31, 2014 from $212.1 million at December 31, 2013. The decrease in stockholders' equity occurred because the total share repurchases and dividend payments exceeded the current quarter's earnings. The Company completed its fifth share repurchase program. Through March 31, 2014, the Company repurchased 2,699,253 shares, compared to 2,528,259 shares at December 31, 2013.
Total delinquent loans 90 days or more past due and not accruing totaled $1.0 million (3 loans) at March 31, 2014, compared to $1.6 million (5 loans) at December 31, 2013. Non-performing assets totaled $5.1 million at March 31, 2014 compared to $6.0 million at December 31, 2013. The ratio of non-performing assets to total assets of 0.31% at March 31, 2014 continues to remain one of the lowest in the country. The allowance for loan losses at March 31, 2014 and December 31, 2013 was $1.5 million and represented 0.17% of total loans.
Territorial Bancorp Inc., headquartered in Honolulu, Hawaii, is the stock holding company for Territorial Savings Bank. Territorial Savings Bank is a federally chartered savings bank which was originally chartered in 1921 by the Territory of Hawaii. Territorial Savings Bank conducts business from its headquarters in Honolulu, Hawaii and has 28 branch offices in the state of Hawaii.
Forward-looking statements - this earnings release contains forward-looking statements, which can be identified by the use of words such as "estimate," "project," "believe," "intend," "anticipate," "plan," "seek," "expect," "will," "may" and words of similar meaning. These forward-looking statements include, but are not limited to:
These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. We are under no duty to and do not take any obligation to update any forward-looking statements after the date of this earnings release.
The following factors, among others, including those set forth in the Company's filings with the Securities and Exchange Commission, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:
Because of these and a wide variety of other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements.
|TERRITORIAL BANCORP INC. AND SUBSIDIARIES|
|Consolidated Statements of Income (Unaudited)|
|(Dollars in thousands, except per share data)|
|Three Months Ended|
|Interest and dividend income:|
|Investment securities||$ 5,074||$ 4,554|
|Total interest and dividend income||14,657||13,882|
|Advances from the Federal Home Loan Bank||66||103|
|Securities sold under agreements to repurchase||343||477|
|Total interest expense||1,500||1,700|
|Net interest income||13,157||12,182|
|Provision for loan losses||9||18|
|Net interest income after provision for loan losses||13,148||12,164|
|Service fees on loan and deposit accounts||499||501|
|Income on bank-owned life insurance||268||221|
|Gain on sale of investment securities||346||888|
|Gain on sale of loans||79||645|
|Total noninterest income||1,358||2,360|
|Salaries and employee benefits||5,363||5,352|
|Federal deposit insurance premiums||199||190|
|Other general and administrative expenses||966||1,051|
|Total noninterest expense||8,864||8,716|
|Income before income taxes||5,642||5,808|
|Net income||$ 3,462||$ 3,641|
|Basic earnings per share||$ 0.38||$ 0.37|
|Diluted earnings per share||$ 0.37||$ 0.36|
|Cash dividends declared per common share||$ 0.14||$ 0.12|
|Basic weighted-average shares outstanding||9,187,540||9,917,359|
|Diluted weighted-average shares outstanding||9,380,160||10,117,034|
|TERRITORIAL BANCORP INC. AND SUBSIDIARIES|
|Consolidated Balance Sheets (Unaudited)|
|(Dollars in thousands, except share data)|
|Cash and cash equivalents||$ 72,147||$ 75,365|
|Investment securities held to maturity, at amortized cost (fair value of $617,078 and $598,007 at March 31, 2014 and December 31, 2013, respectively)||623,609||613,436|
|Federal Home Loan Bank stock, at cost||11,579||11,689|
|Loans held for sale||1,017||2,210|
|Loans receivable, net||872,631||856,542|
|Accrued interest receivable||4,419||4,310|
|Premises and equipment, net||6,058||6,056|
|Bank-owned life insurance||40,510||40,243|
|Deferred income taxes receivable||5,734||5,075|
|Prepaid expenses and other assets||2,303||1,978|
|Total assets||$ 1,640,007||$ 1,616,904|
|Liabilities and Stockholders' Equity|
|Deposits||$ 1,317,308||$ 1,288,709|
|Advances from the Federal Home Loan Bank||15,000||15,000|
|Securities sold under agreements to repurchase||72,000||72,000|
|Accounts payable and accrued expenses||21,082||23,933|
|Current income taxes payable||806||1,414|
|Advance payments by borrowers for taxes and insurance||2,417||3,708|
|Preferred stock, $.01 par value; authorized 50,000,000 shares, no shares issued or outstanding||--||--|
|Common stock, $.01 par value; authorized 100,000,000 shares; issued and outstanding 9,880,383 and 10,051,377 shares at March 31, 2014 and December 31, 2013, respectively||99||101|
|Additional paid-in capital||74,266||77,340|
|Unearned ESOP shares||(7,218)||(7,340)|
|Accumulated other comprehensive loss||(3,712)||(3,787)|
|Total stockholders' equity||211,394||212,140|
|Total liabilities and stockholders' equity||$ 1,640,007||$ 1,616,904|
|TERRITORIAL BANCORP INC. AND SUBSIDIARIES|
|Selected Financial Data (Unaudited)|
|March 31, 2014|
|Three Months Ended|
|Performance Ratios (annualized):|
|Return on average assets||0.85%||0.93%|
|Return on average equity||6.54%||6.64%|
|Net interest margin on average interest earning assets||3.36%||3.22%|
|At March||At December|
|31, 2014||31, 2013|
|Selected Balance Sheet Data:|
|Book value per share (1)||$21.40||$21.11|
|Stockholders' equity to total assets||12.89%||13.12%|
|(Dollars in thousands):|
|Delinquent loans 90 days or more past due and not accruing (2)||$1,033||$1,577|
|Non-performing assets (2)||5,120||6,000|
|Allowance for loan losses||1,485||1,486|
|Non-performing assets to total assets||0.31%||0.37%|
|Allowance for loan losses to total loans||0.17%||0.17%|
|Allowance for loan losses to non-performing assets||29.00%||24.77%|
|(1) Book value per share is equal to stockholders' equity divided by number of shares issued and outstanding|
|(2) Amounts are net of charge-offs|
Walter Ida (808) 946-1400