Territorial Bancorp Inc. said the outstanding balances on its predominantly residential loan portfolio are “well secured” by the value of these properties as the COVID-19 pandemic wreaks havoc on the state’s economy.
The parent company of the state’s fifth-largest bank updated its coronavirus situation today while reporting that its first-quarter net profit fell 31.4% to $ 4.5 million mainly due to a one-time gain of $ 1.98 million in the quarter of last year from the sale of a trusted preferred security. Territorial earned $ 6.5 million in the first quarter of 2019.
“Our total assets and deposits increased in the first quarter and we continued to focus on maintaining strong asset quality,” said Territory President and CEO Allan Kitagawa in a statement. “Our focus on asset quality and our strong capitalization should enable the company to meet the challenges we face with the COVID-19 pandemic. “
The Territorial Savings Bank said during the quarter it received forbearance requests on 183 loans, representing 3.52% of its total number of loans. The bank said it is currently analyzing forbearance requests and may allow borrowers experiencing financial hardship due to COVID-19 to defer up to six loan payments.
Of these 183 requests in total, 170 were for residential properties of one to four families. The bank said these residential mortgages, which represent 97% of the bank’s total loan portfolio balance, are well secured because the ratio of the current loan balance to the current value of the property securing these mortgages is an average of 46.26%.
The company also received forbearance requests on four commercial mortgage loans, which represent 0.08% of the total number of loans; seven commercial loans, which represent 0.13% of the total number of loans; and two home equity lines of credit which represent 0.04% of the total number of loans.
The territory has set aside $ 217,000 for potential future loan losses, compared to $ 5,000 in the previous year quarter.
The company, which temporarily closed seven of its 29 branches due to a drop in demand for banking services, said it had not seen an increase in defaults since the start of the year, significant changes in deposits or large drawdowns on lines of credit. . Territorial said it had no commercial loans to hotels, transportation companies, restaurants or retail establishments.
Territorial also declared a quarterly dividend of 23 cents per share which will be paid on May 28 to shareholders of record on May 14.