Territorial Bancorp (TBNK) Q2 2024 earnings summary

Executive summary

• Net loss of $775,000 for Q2 2024, down from net income of $1.5 million in Q2 2023, or $(0.09) per diluted share versus $0.17 per share last year.

• Net loss for the six months ended June 30, 2024 was $1.3 million, compared to net income of $3.8 million for the same period in 2023.

• Announced definitive merger agreement with Hope Bancorp, with shareholders to receive 0.8048 Hope Bancorp shares per TBNK share in a $78.6 million all-stock deal.

• Board approved a $0.01 per share dividend, payable August 23, 2024, to shareholders of record as of August 9, 2024.

Financial highlights

• Net interest income for Q2 2024 was $8.2 million, down 25.7% year-over-year; for the six months, $17.0 million, down 26.7%.

• Total interest expense rose by $3.66 million year-over-year, mainly due to higher deposit and FRB borrowing costs.

• Noninterest expense increased by $474,000 in Q2, including $509,000 in merger-related costs.

• Net interest margin declined to 1.56% in Q2 2024 from 2.09% in Q2 2023; for the six months, 1.60% vs. 2.19%.

• Total assets were $2.2 billion at June 30, 2024, down 3.2% from December 31, 2023.

Outlook and guidance

• The Hope Bancorp merger is pending regulatory and shareholder approval and is expected to be a tax-free reorganization.

• Hope Bancorp intends to maintain Territorial's brand and operations in Hawaii post-merger.

• Management expects continued pressure on net interest margin due to the fixed-rate nature of assets and rising funding costs.