Territorial Savings Bank’s net income jumped 14.7 percent in the third quarter on the strength of strong loan growth and higher interest rates.
The holding company of the state’s fifth-largest bank, Territorial Bancorp Inc., said Thursday its earnings rose to $4.8 million, or 51 cents a share, to match analysts’ estimates. A year earlier Territorial earned $4.2 million, or 44 cents a share.
“We have been able to increase the size of our loan portfolio and our net interest income while maintaining good asset quality,” Territorial Chairman and CEO Allan Kitagawa said.
Territorial, which generates more than 95 percent of its loans from residential lending, said its overall loans receivable rose 7.8 percent to $1.55 billion from the year-earlier period. Deposits increased 4.6 percent to $1.64 billion. Assets grew 3.2 percent to $2.03 billion.
The bank’s net interest income, which is the difference between how much Territorial pays for deposits compared with what it charges to lend out money, rose 0.7 percent to $14.8 million.
Noninterest income, though, fell 17.9 percent to $746,000 primarily due to a $150,000 decline in the gain of investment securities sales and a decrease of $20,000 in the gain of loan sales.
The bank said it benefited last quarter from the Tax Cuts and Jobs Act, which went into effect Jan. 1 and reduced the federal corporate tax rate to 21 percent from 35 percent. Territorial said its income tax expense during the quarter was $1.27 million compared with $2.58 million in the year-earlier period.
Territorial also declared a quarterly cash dividend of 22 cents a share that will be payable Nov. 21 to stockholders of record as of Nov. 8. It was the bank’s 36th consecutive dividend.
Territorial’s stock fell 60 cents, or 2.1 percent, to close at $27.60 before the earnings were announced.
THIRD-QUARTER NET
$4.8 million
YEAR-EARLIER NET
$4.2 million
