Territorial Savings' new holding company Hope Bancorp reports Q1 earnings, merger impact
Story Highlights Hope Bancorp discussed its acquisition of Territorial Savings Bank during its Q1 earnings call.
Hope acquired Territorial in a $78.6 million deal that closed April 2.
Hope Bancorp CEO Kevin Kim said the company is excited to build on "territorial's storied history."
Hope Bancorp Inc. shared preliminary estimates Tuesday on what its $78.6 million acquisition of Hawaii's Territorial Bancorp Inc., in a deal that closed this month, means for the company.
"We are excited by the enhanced opportunities of our combined future and look forward to building on Territorial's storied history," Kevin Kim, Hope Bancorp chairman, president and CEO, told investors during an earnings call Tuesday morning.
In its first quarter earnings report, Hope Bancorp (Nasdaq: HOPE) reported net income of $21.1 million, or 17 cents per diluted common share, for the quarter ending March 31. Excluding notable items, net income for the first quarter was $22.9 million, or 19 cents per diluted common share.
At the same period last year, Hope reported a net income of $25.9 million, or $0.21 per diluted common share.
As of the merger close on April 2, Hope said Territorial contributed about $1.7 billion of stable low-cost deposits at a weighted average cost of 1.96% and about $1 billion, after accounting discounts, of residential mortgage loans with pristine asset quality.
"Purchase accounting adjustments are preliminary, and we estimate deposits and loans net of fair value adjustments," Angie Yang, Hope Bancorp senior vice president and director of investor relations and corporate communications, said during the call.
As part of the Territorial acquisition, Hope issued nearly 7 million shares worth $73 million.
Hope said that at the transaction's closing, Territorial had $87 million in cash and cash equivalents and its investment securities portfolio was sold at a market value of $531 million. Additionally, most of Territorial's $161 million in Federal Home Loan Bank borrowings was paid off leaving a remainder of $36 million.Territorial's nonperforming assets totaled less than $2 million.
Hope expects one-time merger charges of $18 million in the next quarter due to the acquisition. Its updated income accretion income expectations for 2025 are $14 million.
Ending March 31, Hope's total deposits were $14.5 billion, a 1% increase from the prior quarter. In Q1 last year, total deposits were $14.8 billion. The company reported $17.07 billion in assets.
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