Hope Bancorp, Inc. and Territorial Bancorp Inc. jointly
announced a definitive merger agreement, expected to create the largest
regional bank catering to multi-ethnic customers across the continental U.S.
and the Hawaiian Islands.
Hope Bancorp said it intends to preserve Territorial’s
100-plus year legacy in Hawaii, including its brand name, culture and
commitment to local communities, in a joint press release announcing the deal.
Hope Bancorp is the holding company for Bank of Hope and
Territorial Bancorp is the stock holding company for Territorial Savings Bank. Territorial
has total assets of $2.24 billion, including $1.31 billion in loans and $1.64
billion in deposits. Hope Bancorp is the first and only super regional Korean
American bank in the U.S., with $18.09 billion in total assets.
“We believe this combination will strengthen our position as
one of the leading Asian American banks in the country by expanding our
footprint to the Hawaiian Islands,” Hope Bancorp Chair, President and CEO Kevin
Kim said in the release. “Upon the close of the transaction, we believe
Territorial’s high-quality deposit base will enhance our core funding mix and
Territorial’s residential mortgage portfolio will accelerate the
diversification of our loans. We look forward to building on Territorial’s
100-plus year legacy of exemplary customer service and support of local
communities in a strategically important market.”
The acquisition supports Hope Bancorp’s strategic growth
efforts by adding a stable, low-cost core deposit base to the combined company.
It also will accelerate its loan mix diversification by adding a residential
mortgage portfolio with quality assets, the release explained. Additionally,
Hope Bancorp said it views the transaction as an opportunity to grow
Territorial’s market share and enhance the customer experience by leveraging
the combined company’s larger balance sheet, resources and more extensive array
of banking products and services, among other things.
“Our merger with Hope Bancorp will bring together two
companies that share long-standing commitments to our customers and the
communities where we live and work,” Officer of Territorial Bancorp Chairman,
President and CEO Allan Kitagawa said. “Our name will remain Territorial
Savings Bank, and we expect a seamless transition for our customers, who will
continue to benefit from our strong focus on relationship banking, personalized
service and tailored financial solutions. At the same time, we believe the proposed
combination will strengthen Territorial Savings Bank for the long term,
providing many advantages for our customers and employees as we become part of
a larger organization with greater resources, enhanced technology platforms,
and an expanded array of banking products and services.”
Under the terms of the merger agreement, Territorial
shareholders will receive a fixed exchange ratio of approximately 0.8 shares of
Hope Bancorp common stock in exchange for each share of Territorial common
stock they own, in a 100 percent stock-for-stock transaction valued at
approximately $78.6 million. Based on the closing price of Hope Bancorp’s
common stock on April 26, this represents a value of $8.82 per share of
Territorial common stock, according to the release. The actual value will be
determined upon transaction closing. Hope Bancorp shareholders are expected to
own approximately 94.4 percent of the combined entity and Territorial
shareholders will own about 5.6 percent, the actual percentages being
determined as of the transaction closing date. The transaction is intended to
qualify as a tax-free reorganization for Territorial shareholders.