Bancorp finalizes merger with Territorial Bank
In a strategic move aimed at expanding its reach in the multicultural banking sector, Territorial Bancorp has announced its merger with Hope Bancorp. The merger, which was initiated by Hope Bancorp in 2023, was completed in April 2025.
The decision to merge with Hope Bancorp over a higher cash offer from Blue Hill Advisors was primarily driven by strategic considerations. Territorial Bancorp, which focuses on the Korean-American market and also targets Asian-American and Pacific Islander communities, found a natural fit with Hope Bancorp's specialisation in multicultural banking.
The merger offers several benefits. For one, it provides Territorial's shareholders with a stake in the combined entity, offering potential upside rather than just immediate cash. This aligns with Hope Bancorp’s vision for long-term growth in the niche high-potential market, specifically Hawaii's multicultural segment.
The acquisition also brings operational and financial synergies. It reduced costs, expanded deposits to $1.7 billion, and improved Hope Bancorp’s net interest margin, capital ratios, and positioning in a low-rate environment.
Moreover, Hope Bancorp demonstrated a clear and transparent strategic focus, highlighted by their active investor engagement and disciplined execution during and after the merger. This regulatory and strategic transparency was a significant factor in Territorial's decision.
The merger has made Bank of Hope, the largest regional bank catering to multicultural customers across the continental U.S. and Hawaii. The roughly $2.17 billion-asset Territorial, with 28 branches throughout Honolulu, will expand Hope's footprint and reach.
Territorial Savings Bank will operate as Territorial Savings, a unit of Bank of Hope. Kevin S. Kim, CEO of Hope Bancorp, expressed his excitement about the merger, while Kitagawa from Territorial stated that the combination would strengthen Territorial for the long term.
Interestingly, Hope Bancorp's last attempt to acquire a bank in 2017 failed to secure regulatory approvals. However, this time around, the regulatory approval for the merger was received a month earlier.
Despite Blue Hill Advisors offering a higher cash deal, Territorial's shareholders ultimately reiterated their commitment to Hope's offer. Jason Blumberg, managing member of Blue Hill, accused Territorial of trying to strong-arm its investors. However, Territorial postponed a shareholder vote by nearly a month to continue discussions with investors.
The deal was worth $78.6 million in stock. Keefe, Bruyette & Woods analysts mentioned that Territorial adds low-cost, granular deposits, which remains a core strategy for Hope. Additionally, Hope Bancorp purchased licensing rights.
In summary, Territorial Bancorp favoured Hope Bancorp’s proposal due to the strategic alignment, growth opportunities in multicultural banking, and potential long-term shareholder value, rather than the immediate higher cash offer presented by Blue Hill Advisors.
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