HONOLULU - Territorial Bancorp Inc. (NASDAQ:TBNK), a Honolulu-based holding company for Territorial Savings Bank, has urged its shareholders to vote in favor of a proposed merger with Hope Bancorp, Inc. (NASDAQ:HOPE). The announcement comes as Territorial prepares for a Special Meeting of Stockholders on November 6, 2024, to decide on the merger and related proposals.
In a letter to shareholders, Territorial outlined the benefits of merging with Hope Bancorp, emphasizing the value creation from the all-stock transaction. Shareholders would receive 0.8048 shares of Hope Bancorp common stock for each Territorial share they own, representing a 25% premium based on stock prices prior to the merger announcement. The deal promises substantial upside potential, with $10.5 million in anticipated annual cost savings and synergies, and a dividend increase of over 1,000% compared to Territorial's current quarterly dividend.
Territorial also highlighted the strategic advantages of becoming part of a larger, more diversified regional bank with expanded growth opportunities. The merger is expected to preserve Territorial's commitment to Hawaii, maintaining local leadership and operations, and offering continued community support.
The company contrasted this with a non-binding, highly conditional expression of interest from Blue Hill Advisors LLC, which Territorial's Board unanimously deemed inferior to the Hope Bancorp proposal. Blue Hill's offer to purchase Territorial for $12.50 per share in cash was criticized for its lack of committed financing, reliance on regulatory approvals, and potential negative impacts on Hawaii's jobs and communities. The Board expressed skepticism about Blue Hill's ability to meet its proposed tender threshold and raised concerns about the uncertainty and risks associated with its offer.
Territorial's Board recommended that shareholders vote for the Hope Bancorp merger, considering it the best path forward for value creation and growth. The merger is expected to be completed by the end of 2024, subject to regulatory approvals and stockholder consent.
This news is based on a press release statement from Territorial Bancorp Inc.
In other recent news, Territorial Bancorp Inc., a Hawaii-based bank holding company, has once again rejected a merger proposal from Blue Hill Advisors LLC, despite a 4% increase in their offer. This marks the third time Territorial has declined Blue Hill's advances, reaffirming its commitment to a previously announced merger with Hope Bancorp, Inc. Allan S. Kitagawa, Chairman, CEO, and President of Territorial, labeled Blue Hill's proposal as "highly uncertain and inferior" to the Hope merger, citing a lack of evidence that Blue Hill's investor group can secure the required regulatory approvals promptly.
The board of Territorial has consistently rejected Blue Hill's offer after careful consideration and a process that evaluated other strategic alternatives. In contrast, a detailed due diligence review has been completed for the Hope merger, with only a few remaining conditions. The proposed merger with Hope is expected to bring benefits to Territorial's shareholders, customers, employees, and the communities it serves.
These are recent developments following Hope Bancorp's filing of a Registration Statement on Form S-4 with the U.S. Securities and Exchange Commission (SEC). The document, containing the Proxy Prospectus, was distributed to Territorial's stockholders around late August and supplemented in mid-September. Investors and stockholders are advised to review these documents carefully for more information about the proposed transaction.
InvestingPro Insights
As Territorial Bancorp Inc. (NASDAQ:TBNK) urges shareholders to support the merger with Hope Bancorp, recent InvestingPro data provides additional context to the company's financial situation and market performance.
InvestingPro data shows that TBNK's stock has seen significant momentum recently, with a 20.85% price return over the past month and an impressive 46.2% return over the last three months. This upward trend aligns with the company's assertion of value creation through the proposed merger.
However, the company faces some financial challenges. An InvestingPro Tip indicates that TBNK's net income is expected to drop this year, which could be a factor in the board's decision to pursue a merger. Additionally, the company's revenue growth has been negative, with a -27.52% decline in the last twelve months as of Q2 2024.
On a positive note, TBNK is trading at a low Price / Book multiple of 0.39, suggesting the stock might be undervalued relative to its book value. This could potentially support the board's argument that the merger offer represents a good deal for shareholders.
For investors seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for TBNK, providing a deeper understanding of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.