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Net income at Caisse d’Epargne Territoriale fell 24% in the fourth quarter as revenue from securities and loan sales fell and the company released less money from its loan loss reserve than in the quarter. previous.
“The fourth quarter of 2021 was very challenging,” Territorial Chairman and CEO Allan Kitagawa said in a statement Thursday. “We performed well despite relatively low interest rates for new loans, which reduced asset returns. Hawaii’s economy continues to improve and we remain well positioned to serve our community with our strong balance sheet.
Territorial Bancorp Inc., holding company of the state’s fifth-largest bank, posted net income of $4.2 million, or 46 cents per share, to beat analysts’ estimate of 42 cents. In the prior year quarter, Territorial earned $5.5 million, or 60 cents per share.
The bank had no sales of investment securities last quarter, compared to $462,000 a year earlier. The bank also only generated $79,000 from the sale of loans last quarter, compared to $639,000 in the fourth quarter of 2020.
Territorial released $140,000 from its loan loss reserve last quarter that had been set aside for potential loan losses. That compares to the $679,000 released to its income statement in the fourth quarter of 2020.
For the year, Territorial’s profit fell 6.3% to $17.4 million, or $1.91 per share, from $18.6 million, or $2.01 per share, in 2020 .
Territorial’s loans receivable fell 7.4% to $1.30 billion as repayments and loan sales outpaced new loans. Deposits rose 1.3% to $1.68 billion.
Territorial’s net interest income, which is the difference between what the bank generates from loans and pays out in deposits, edged up 0.4% to $13.9 million from the quarter of the previous year. Its net interest margin remained stable at 2.72%, compared to 2.73% in the previous quarter.
The bank’s noninterest income, which includes charges and fees, fell 48% to $1.3 million from $2.5 million. The decrease in non-interest income is mainly explained by a decrease of $441,000 in service charges on loans and deposit accounts, a decrease of $462,000 in the sale of investment securities and a decrease in $560,000 of gain on sale of loans.
Territorial also declared a quarterly dividend of 23 cents per share to be paid Feb. 24 to shareholders of record as of Feb. 10.
Shares in the company fell 14 cents to $24.62 ahead of the earnings release.
FOURTH QUARTER NET
$4.2 million
NET OF THE YEAR EARLIER
$5.5 million
