Hope Bancorp and Territorial Bancorp announce $78.6m merger deal
Hope Bancorp, Inc. (NASDAQ: HOPE), the holding company for Bank of Hope, and Territorial Bancorp Inc. (NASDAQ: TBNK), the stock holding company for Territorial Savings Bank, have announced a definitive merger agreement that will significantly enhance their capabilities and reach across the continental United States and the Hawaiian Islands. The transaction, valued at approximately $78.6 million, is a strategic move to create the largest regional bank dedicated to serving multi-ethnic communities.
Under the terms of the agreement, Territorial shareholders will receive a fixed exchange ratio of 0.8048 shares of Hope Bancorp common stock for each share of Territorial common stock. This represents a value of $8.82 per share based on the closing price of Hope Bancorp’s common stock as of April 26, 2024. Post-transaction, Hope Bancorp shareholders are expected to own about 94.4% of the combined entity, with Territorial shareholders owning approximately 5.6%.
The merger is set to close by the end of 2024, subject to regulatory approvals, the approval of Territorial shareholders, and other customary closing conditions. This union not only aligns with the strategic growth objectives of both entities but also promises to bolster their market share and enhance the customer experience by leveraging a larger balance sheet and a more comprehensive suite of banking products and services.
Kevin S. Kim, Chairman, President, and Chief Executive Officer of Hope Bancorp, expressed optimism about the merger’s potential to expand their footprint to the Hawaiian Islands, noting that the high-quality deposit base and residential mortgage portfolio of Territorial will significantly diversify and strengthen their core funding mix.
Allan S. Kitagawa, Chairman, President, and Chief Executive Officer of Territorial Bancorp, highlighted the seamless transition expected for customers who will continue to enjoy strong relationship banking, personalized service, and tailored financial solutions. The merger is anticipated to provide many advantages for customers and employees alike as part of a larger organization with greater resources.
The combined entity will continue to operate under the Territorial Savings Bank brand in Hawaii, preserving its century-plus legacy and commitment to local communities. This strategic merger is poised to enhance the operational capabilities and financial health of the newly formed entity, ensuring sustained growth and an expanded array of services for its diverse customer base.
This merger not only signifies a significant expansion for Hope Bancorp into a strategically important market but also underscores their commitment to enhancing shareholder value and reinforcing their position as one of the leading Asian American banks in the country.