Hope Bancorp, Territorial Bancorp to merge in stock-for-stock transaction

Hope Bancorp (HOPE) and Territorial Bancorp (TBNK) jointly announced the signing of a definitive merger agreement, which is expected to create the largest regional bank catering to multi-ethnic customers across the continental United States and the Hawaiian Islands. As of December 31, 2023, Territorial had total assets of $2.24B, total loans of $1.31B and total deposits of $1.64B. Following the completion of the transaction, the legacy Territorial franchise in Hawai’i will continue to do business under the Territorial Savings Bank brand, as a trade name of Bank of Hope. Under the terms of the merger agreement, upon completion of the transaction, Territorial shareholders will receive a fixed exchange ratio of 0.8048 shares of Hope Bancorp common stock in exchange for each share of Territorial common stock they own, in a 100% stock-for-stock transaction valued at approximately $78.6M. 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, although the actual value will be determined upon transaction closing. Upon completion of the transaction, it is expected that Hope Bancorp shareholders will own approximately 94.4% of the combined entity and Territorial shareholders will own approximately 5.6%, with 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. The proposed transaction, after the close, is expected to be immediately accretive to Hope Bancorp’s earnings. The boards of directors of both companies have approved the merger agreement and the transaction contemplated thereby. The transaction is expected to close by year-end 2024, subject to regulatory approvals, the approval of Territorial shareholders, and the satisfaction of other customary closing conditions.