Hope Bancorp in Los Angeles has agreed to buy Territorial Bancorp in Honolulu.
The $18.1 billion-asset Hope said in a press release that it will pay $78.6 million in stock for the $2.2 billion-asset Territorial. The deal is expected to close by the end of this year.
Territorial has 28 branches, $1.3 billion of loans and $1.6 billion of deposits. Hope said it will continue to use the Territorial brand in Hawaii.
“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,” Kevin Kim, Hope’s chairman, president and CEO, said in the release.
“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,” Kim added.
Hope expects double-digit earnings per share accretion. It should take about three years for Hope to earn back an estimated 6% dilution to its tangible book value.
Hope was advised by D.A. Davidson and Greenberg Traurig. Territorial was advised by Keefe, Bruyette & Woods and Luse Gorman.