HONOLULU - Leading independent proxy advisory firms Glass, Lewis & Co., and Institutional Shareholder Services (ISS) have recommended that shareholders of Territorial Bancorp Inc. (NASDAQ: NASDAQ:TBNK) vote in favor of the proposed merger with Hope Bancorp, Inc. (NASDAQ: HOPE), according to a recent statement from Territorial. The special meeting for Territorial shareholders to vote on the transaction is scheduled for November 6, 2024.
Glass Lewis cited the financial benefits of the merger, stating that Territorial shareholders would benefit from the continued participation in a larger, more profitable bank. The report also mentioned a dividend discount model analysis by KBW indicating a favorable implied value of the proposed exchange ratio.
Concerns were raised regarding the preliminary indication of interest from Blue Hill, which lacked transparency and financing details, leading to doubts about its ability to close a transaction. Glass Lewis agreed with the Territorial Board's decision not to consider Blue Hill's proposal superior to the Hope Bancorp merger.
The Territorial Board, which owns 9.2% of the company's outstanding shares, has already voted in favor of the transaction and is urging other shareholders to do the same. The board believes the merger is the best path forward for Territorial's shareholders, customers, employees, and the local communities they serve.
The merger is subject to regulatory approvals, the approval of Territorial Bancorp stockholders, and other customary closing conditions. Forward-looking statements included in the press release indicate expectations of benefits such as a low-cost core deposit base, diversified loan portfolio, and expanded market share, but also acknowledge risks and uncertainties that could affect the outcomes.
This news article is based on a press release statement from Territorial Bancorp Inc.
In other recent news, Territorial Bancorp has been the subject of a bidding war between Hope Bancorp and a group of investors led by Allan Landon and Blue Hill Advisors. Hope Bancorp's proposed merger with Territorial Bancorp has been met with resistance, particularly from Institutional Shareholder Services Inc., who advised shareholders to vote against the merger due to potential risks and better alternatives. In response, Blue Hill Advisors and Allan Landon increased their cash offer to purchase Territorial Bancorp, aiming to outdo Hope Bancorp's takeover attempt.
Hope Bancorp recently reported a net income of $25.3 million, or $0.21 per diluted share, for the second quarter, with an adjusted income of $26.6 million, or $0.22 per share. However, the company anticipates a low single-digit loan growth and a 10% drop in net interest income compared to the previous year's quarter.
In the analysis sector, DA Davidson has raised the stock target for Hope Bancorp to $15.00, maintaining a Buy rating. This decision follows Hope Bancorp's second-quarter performance, which demonstrated a positive Net Interest Margin shift. These are the recent developments involving Territorial Bancorp and Hope Bancorp.
InvestingPro Insights
As Territorial Bancorp Inc. shareholders prepare to vote on the proposed merger with Hope Bancorp, Inc., it's worth examining some key financial metrics and insights from InvestingPro to provide additional context for this significant decision.
Hope Bancorp, the acquiring company, currently has a market capitalization of $1.54 billion and a price-to-earnings (P/E) ratio of 14.2. This valuation suggests that the market has a moderate growth expectation for the company. Interestingly, Hope Bancorp's price-to-book ratio stands at 0.73, indicating that the stock might be undervalued relative to its book value.
One of the InvestingPro Tips highlights that Hope Bancorp "has maintained dividend payments for 13 consecutive years." This consistent dividend history could be appealing to Territorial shareholders who value steady income streams. Currently, Hope Bancorp offers a dividend yield of 4.39%, which is noteworthy in the current market environment.
However, it's important to note that another InvestingPro Tip indicates that Hope Bancorp's "net income is expected to drop this year." This projection aligns with the company's recent financial performance, as evidenced by a revenue decline of 15.98% over the last twelve months.
For investors seeking a more comprehensive analysis, InvestingPro offers 6 additional tips for Hope Bancorp, providing a deeper understanding of the company's financial health and prospects.
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