Territorial Bancorp (US:TBNK)2025-03-31 19:23Financial Performance - The net loss for 2024 was $4,299 thousand, compared to a net income of $5,027 thousand in 2023[156]. - Net income decreased by $9.3 million, or 185.5%, resulting in a net loss of $4.3 million for the year ended December 31, 2024, compared to net income of $5.0 million for 2023[190]. - Noninterest income increased by $140,000, or 5.7%, to $2.6 million in 2024 from $2.5 million in 2023, driven by higher bank-owned life insurance income and other income[198]. - Noninterest expense rose by $2.7 million, or 7.0%, to $40.9 million in 2024, primarily due to merger-related legal fees and increased federal deposit insurance premiums[200]. - The income tax benefit for 2024 was $2.4 million with an effective tax rate of (36.0%), compared to an income tax expense of $1.8 million with an effective tax rate of 26.5% in 2023[201]. Asset and Equity Changes - Total assets decreased to $2,169,715 thousand in 2024 from $2,236,672 thousand in 2023, a decline of approximately 3%[156]. - Total stockholders' equity decreased to $248,351 thousand in 2024 from $251,086 thousand in 2023[156]. - Cash and cash equivalents were $123.5 million, down $3.1 million or 2.5% from $126.7 million at the end of 2023[160]. - Stockholders' equity decreased to $248.4 million, a decline of $2.7 million, or 1.1%, from $251.1 million at the end of 2023, primarily due to a net loss incurred during the year[183]. Loan and Deposit Activity - Total loans decreased by $22.0 million, with repayments and sales exceeding new loan originations[163]. - As of December 31, 2024, total deposits amounted to $1.7 billion, representing 89.4% of total liabilities, with a year-over-year increase of $81.1 million, or 5.0%[175][177]. - The increase in deposits was primarily driven by a $173.7 million rise in certificates of deposit, which included a $161.4 million increase in state and local government deposits[177]. - The company originated $74.9 million in loans during the year ended December 31, 2024, down from $100.8 million in 2023[235]. Interest Income and Expense - Interest income increased to $72,305 thousand in 2024, up from $69,088 thousand in 2023, representing a growth of approximately 3.2%[156]. - Interest expense rose significantly to $40,613 thousand in 2024 from $26,457 thousand in 2023, an increase of approximately 53.5%[156]. - Net interest income after provision for credit losses decreased to $31,619 thousand in 2024 from $42,634 thousand in 2023, a decline of approximately 25.9%[156]. - The average yield on total deposits increased to 2.01% in 2024 from 1.23% in 2023[179]. - The net interest rate spread decreased to 1.21% for the year ended December 31, 2024, down from 1.83% in 2023[192]. - The net interest margin also declined to 1.50% for the year ended December 31, 2024, compared to 2.02% for 2023[192]. Credit Quality and Losses - Nonperforming assets totaled $1.9 million, or 0.09% of total assets, at December 31, 2024, down from $2.3 million, or 0.10% of total assets, at December 31, 2023[138]. - Provision for credit losses recorded was $73,000 for 2024, compared to a reversal of $3,000 in 2023, resulting in an allowance for credit losses to total loans ratio of 0.40% in 2024 and 0.39% in 2023[195][196]. - Net charge-offs were $80,000 in 2024, down from $117,000 in 2023, reflecting improved credit quality[196]. - Nonaccrual loans totaled $1.933 million in 2024, a decrease from $2.260 million in 2023, indicating a reduction in troubled assets[207]. Regulatory and Capital Position - The company exceeded all regulatory capital requirements and was considered "well capitalized" under regulatory guidelines[240]. - Total capital to risk-weighted assets improved to 27.26%, up from 26.87% in 2023[1]. - The company maintained a minimum liquidity ratio of 10% to ensure sufficient liquidity for meeting customer needs[232]. Market and Economic Conditions - The increased cost of operations is attributed to inflation, although the primary assets and liabilities are monetary in nature[243]. - Changes in market interest rates have a more significant impact on performance compared to inflation effects[243].