Territorial Bancorp (US:TBNK)2022-08-12 14:01Financial Position - Total assets increased by $49.4 million, or 2.3%, to $2.2 billion at June 30, 2022[127]. - Total loans decreased by $16.2 million, or 1.2%, to $1.3 billion at June 30, 2022, representing 59.0% of total assets[129]. - Total securities increased by $92.7 million, or 14.6%, to $729.1 million at June 30, 2022, accounting for 33.4% of total assets[131]. - Deposits rose by $47.8 million, or 2.8%, to $1.7 billion at June 30, 2022, driven by an increase in certificates of deposit[133]. - Total stockholders' equity decreased by $417,000, or 0.2%, to $255.9 million at June 30, 2022, due to dividends declared and shares repurchased exceeding net income[135]. - Total liabilities were $1.901 billion, with stockholders' equity at $257.9 million as of June 30, 2022[140]. - Cash and cash equivalents totaled $70.6 million as of June 30, 2022, with $10.0 million in securities sold under agreements to repurchase[171]. Loan Performance - Nonperforming assets totaled $4.0 million, or 0.18% of total assets, at June 30, 2022, compared to $3.3 million, or 0.15% at December 31, 2021[122]. - The company does not offer subprime or Alt-A loans, maintaining a conservative loan underwriting approach[123]. - Nonaccrual loans totaled $4.0 million at June 30, 2022, or 0.31% of total loans, compared to $4.2 million, or 0.32%, at June 30, 2021[161]. - The allowance for loan losses to total loans ratio was 0.17% at June 30, 2022, down from 0.23% at June 30, 2021[161]. - Total loans originated decreased to $97.7 million in the six months ended June 30, 2022, down from $176.7 million in the same period of 2021[176]. Income and Expenses - Net income for the three months ended June 30, 2022, was $4.1 million, an increase of $52,000 or 1.3% compared to the same period in 2021[143]. - Net income decreased by $251,000, or 2.8%, to $8.8 million for the six months ended June 30, 2022, from $9.1 million for the same period in 2021[155]. - Net interest income rose by $986,000 or 7.5% to $14.1 million for the three months ended June 30, 2022, driven by a $615,000 increase in interest income[144]. - Net interest income increased by $1.6 million, or 6.0%, to $27.9 million for the six months ended June 30, 2022, compared to $26.3 million for the same period in 2021[156]. - Noninterest income decreased by $927,000 for the three months ended June 30, 2022, totaling $800,000 compared to $1.7 million for the same period in 2021[151]. - Noninterest income decreased by $1.5 million to $2.453 million for the six months ended June 30, 2022, a decline of 38.1% compared to the same period in 2021[163]. - Interest expense decreased by $371,000, or 22.2%, to $1.3 million for the three months ended June 30, 2022, from $1.7 million for the same period in 2021[146]. - Interest expense decreased by $1.1 million, or 31.3%, to $2.5 million for the six months ended June 30, 2022, from $3.6 million for the same period in 2021[158]. Interest Rate Sensitivity - An increase in interest rates from 3% to 4% represents a 100 basis point increase, impacting the company's interest rate sensitivity[192]. - The estimated Economic Value of Equity (EVE) decreased by $136.1 million (46.76%) with a 400 basis point increase in interest rates, resulting in an EVE ratio of 9.91%[194]. - The EVE calculation indicates that the present value of assets decreased due to a 39 basis point increase in mortgage interest rates between March 31, 2022, and June 30, 2022[195]. - The company’s interest-sensitive assets and liabilities are primarily long-term, fixed-rate residential mortgage loans, making it vulnerable to interest rate increases[189]. - The Board of Directors has established an Asset/Liability Management Committee to evaluate and manage interest rate risk[188]. - The methodologies used to determine interest rate risk through changes in EVE have inherent shortcomings, as they rely on certain assumptions that may not reflect actual market conditions[196]. Capital and Commitments - The total risk-based capital ratio for Territorial Savings Bank was 27.41% as of June 30, 2022, exceeding the required 12.50%[181]. - The company has unpledged securities with a market value of $440.9 million, allowing for additional borrowing capacity[171]. - At June 30, 2022, the company had $3.9 million in loan commitments outstanding for fixed-rate loans and $13.7 million in unused lines of credit[175]. - The company experienced a net increase in deposits of $47.8 million for the six months ended June 30, 2022, compared to $18.9 million in the same period of 2021[177].