Territorial Savings Bank’s earnings rose 14.2 percent in the first quarter as loan growth jumped double digits.
The state’s fifth-largest bank, which generates more than 95 percent of its loans from residential mortgages, said Thursday that net income rose to $4.3 million, or 46 cents a share, to beat analysts’ estimates by a penny. In the year-earlier quarter, Territorial earned $3.8 million, or 41 cents a share.
Loans rose 12.6 percent to $1.37 billion from $1.21 billion.
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FIRST-QUARTER NET
$4.3 million
YEAR-EARLIER NET
$3.8 million
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“Our first quarter of 2017 has been strong and we are looking forward to continuing this momentum through the remainder of the year,” Chairman and CEO Allan Kitagawa of parent company Territorial Bancorp Inc. said in a statement. “Hawaii’s tourism industry saw a record number of visitors in 2016 and this growth has continued in 2017. The strength of Hawaii’s economy has given us an opportunity to successfully expand our loan portfolio, which in turn has increased our net income and earnings per share.”
Deposits increased 5 percent to $1.55 billion from $1.45 billion. Assets rose 4.6 percent to $1.94 billion from $1.85 billion.
Last quarter the bank’s net interest income, the difference between the interest Territorial pays on deposits and the interest it receives on loans, inched up 1.1 percent to $14.7 million from $14.5 million in the year-earlier quarter. The bank’s net interest margin, though, worsened to 3.21 percent from 3.28 percent.
Noninterest income, which includes service charges and fees, increased 15.3 percent to $1 million from $886,000 in the year-earlier quarter. The increase primarily was due to a $100,000 increase in service fees on loans and deposits and a $95,000 increase in the sale of investment securities
Territorial’s nonperforming assets — delinquent loans not accruing interest and foreclosed real estate — declined 23.4 percent to $3.5 million from $4.6 million.
The bank said it opened its 29th branch earlier this month across the street from the Wal-Mart parking garage at 735 Keeaumoku St. in the location formerly occupied by Morning Glory, a gift shop.
Territorial’s stock slipped 23 cents to $32.41 in trading Thursday. The financial results were released after the market closed.
