Territorial Bancorp Faces Challenges, Cuts Dividend

Territorial Bancorp, a regional savings bank based in Honolulu, Hawaii, has made the difficult decision to slash its quarterly dividend by 78%. The bank's board of directors recently announced that the dividend for the current quarter will be reduced from 23 cents per share to just 5 cents per share.

This drastic reduction in dividend payouts reflects the challenges faced by Territorial Bancorp in the third quarter. The bank cited lower earnings and an uncertain interest rate and economic environment as the primary factors behind this decision.

In the third quarter, Territorial Bancorp reported a profit of $880,000, or 10 cents per share. This is a significant drop from the previous year's figures of $3.89 million, or 44 cents per share. Chief Executive Allan Kitagawa attributed this decline to lower loan volumes and higher interest costs resulting from rising mortgage rates.

These unfavorable conditions have put pressure on net interest margins, leading the bank to take measures to control expenses. Despite these challenges, Territorial Bancorp remains determined to navigate this tough environment while focusing on sustainable growth and stability.

As the bank continues to adjust to changing market dynamics, it is essential to closely monitor its performance and adapt accordingly. With an annual yield of 2.8%, based on the recent closing price of $7.19, Territorial Bancorp will strive to overcome these obstacles and emerge stronger in the face of adversity.