Territorial Bancorp (US:TBNK)2023-05-12 17:10Financial Position - Total assets increased by $43.2 million, or 2.0%, to $2.2 billion at March 31, 2023[131] - Cash and cash equivalents rose to $84.9 million, an increase of $44.3 million, or 109.3%, since December 31, 2022[132] - Total loans were $1.3 billion at March 31, 2023, representing 58.4% of total assets, with a decrease of $3.5 million, or 0.3%[133] - Deposits decreased by $54.2 million, or 3.2%, to $1.7 billion, primarily due to a $71.4 million decrease in passbook savings[136] - Total borrowings increased by $105.0 million, or 69.5%, to $256.0 million at March 31, 2023[137] - Total stockholders' equity decreased by $2.8 million, or 1.1%, to $253.8 million at March 31, 2023[138] - Nonperforming assets totaled $2.4 million, or 0.11% of total assets, consistent with the previous quarter[124] - The investment securities portfolio decreased by $1.9 million, or 0.3%, to $736.7 million at March 31, 2023[134] - Federal Home Loan Bank advances increased by $105.0 million to $246.0 million during the three months ended March 31, 2023[125] Income and Expenses - Net income decreased by $2.4 million, or 50.8%, to $2.3 million for the three months ended March 31, 2023, compared to $4.7 million for the same period in 2022[145] - Net interest income decreased by $1.7 million, or 12.4%, to $12.1 million for the three months ended March 31, 2023, from $13.8 million for the same period in 2022[146] - Interest expense increased by $3.5 million, or 301.9%, to $4.6 million for the three months ended March 31, 2023, due to a 76 basis point increase in the cost of average interest-bearing liabilities[148] - Interest income increased by $1.8 million, or 11.8%, to $16.7 million for the three months ended March 31, 2023, from $15.0 million for the same period in 2022[147] - Noninterest income decreased by $1.0 million, or 64.4%, to $589,000 for the three months ended March 31, 2023, compared to $1.7 million for the same period in 2022[152] - Noninterest expense increased by $15,000 for the three months ended March 31, 2023, compared to the same period in 2022[155] - Income tax expense was $851,000 for the three months ended March 31, 2023, reflecting an effective tax rate of 26.9%, compared to $1.3 million and 21.9% in the same period of 2022[156] Loan and Credit Quality - The company recorded reversals of credit loss provisions of $100,000 during the three months ended March 31, 2023[124] - The provision for credit losses recorded a reversal of $100,000 for the three months ended March 31, 2023, compared to a reversal of $168,000 for the same period in 2022[150] - Nonaccrual loans totaled $2.4 million at March 31, 2023, or 0.18% of total loans, down from $3.2 million, or 0.25%, at March 31, 2022[150] Capital and Regulatory Compliance - As of March 31, 2023, Territorial Savings Bank exceeded all fully phased-in regulatory capital requirements and is considered "well capitalized" under regulatory guidelines[165] - The total risk-based capital ratio for Territorial Savings Bank was 26.53% as of March 31, 2023, exceeding the required 12.50%[167] Interest Rate Sensitivity - Estimated EVE decreased by $176,982 thousand (67.90%) with a +400 basis point change in interest rates[180] - Estimated EVE decreased by $141,177 thousand (54.17%) with a +300 basis point change in interest rates[180] - Estimated EVE decreased by $96,494 thousand (37.02%) with a +200 basis point change in interest rates[180] - Estimated EVE decreased by $48,887 thousand (18.76%) with a +100 basis point change in interest rates[180] - Estimated EVE at $260,635 thousand with no change in interest rates[180] - Estimated EVE increased by $43,724 thousand (16.78%) with a -100 basis point change in interest rates[180] - Estimated EVE increased by $75,682 thousand (29.04%) with a -200 basis point change in interest rates[180] - Interest rates on Freddie Mac mortgage-backed securities decreased by 25 basis points from December 31, 2022, to March 31, 2023[182] - The decrease in mortgage interest rates is not expected to significantly affect estimated EVE[182] - EVE modeling assumes constant composition of interest-sensitive assets and liabilities over the measurement period[183] Loan Origination and Securities - During the three months ended March 31, 2023, the company originated $21.2 million in loans and purchased securities with a face value of $6.8 million[162] - Certificates of deposit due within one year totaled $387.1 million, representing 23.3% of total deposits as of March 31, 2023[161] - The company experienced net decreases in deposits of $54.2 million for the three months ended March 31, 2023, compared to a decrease of $6.3 million in the same period of 2022[163] Hedging Activities - The company does not permit hedging activities, such as engaging in futures, options, or swap transactions[176]