Territorial Bancorp Inc. (TBNK): Business Model Canvas [Dec-2025 Updated]

You're digging into the mechanics of Territorial Bancorp Inc. (TBNK) after that big April 2025 integration with Hope Bancorp, and honestly, the core engine-the Territorial Savings division-still runs on deep Hawaiian community trust, banking on a deposit base around $\mathbf{\$1.72}$ billion and servicing customers through about $\mathbf{29}$ local branches. We need to see how they translate that local footprint into profit streams, primarily from residential mortgages, while balancing the new capital and tech from the parent company. Dive below to see the full nine-block breakdown of how this island-focused bank is structured for the next phase of growth, mapping out exactly where the costs and revenues align post-merger.

Territorial Bancorp Inc. (TBNK) - Canvas Business Model: Key Partnerships

The Key Partnerships structure for the entity formerly known as Territorial Bancorp Inc. (TBNK) is defined by its acquisition by Hope Bancorp, Inc., effective April 2, 2025.

Hope Bancorp, Inc. (Bank of Hope) for capital and technology integration is now the controlling entity. Territorial Bancorp shareholders received 0.8048 shares of Hope Bancorp, Inc. Common Stock (HOPE) for each share of TBNK owned. Hope Bancorp, as of December 31, 2024, reported total assets of $17.05 billion. The combination created the largest regional bank catering to multi-cultural customers across the continental United States and Hawaii.

The legacy operations, now Territorial Savings, a division of Bank of Hope, continue to rely on established operational frameworks, including those for wealth management.

• The previous structure involved offering non-deposit investments like annuities and mutual funds.
• This was executed through a third-party broker-dealer.
• The merger was expected to provide an expanded array of banking products and services to Territorial customers.

For wholesale funding and liquidity, the Federal Home Loan Bank (FHLB) was a critical partner for Territorial Savings Bank prior to the merger. As of the three months ended March 31, 2024, Territorial Bancorp experienced an interest expense increase on FHLB advances primarily due to a $49.67 million increase in the average advance balance.

Local Hawaiian businesses and community organizations for outreach remains central to the preserved Territorial brand. Territorial Savings Bank historically conducted business through its network of 28-29 full-service branches statewide in Hawaii.

Here's a quick look at the key entities and associated figures from the period leading up to and including the late 2025 operational reality:

The integration of technology platforms from Hope Bancorp is a key component of the post-merger operational structure.

Territorial Bancorp Inc. (TBNK) - Canvas Business Model: Key Activities

You're looking at the core engine of Territorial Bancorp Inc. before its integration with Hope Bancorp Inc. in early 2025. The key activities centered on deep roots in the Hawaiian market, primarily funded by local deposits and deployed into local real estate assets. Here's a breakdown of the numbers driving those operations as of the last full reporting period before the merger closed in April 2025.

Residential mortgage loan origination and servicing in Hawaii defined the lion's share of the asset side of the balance sheet. Territorial Bancorp Inc. focused heavily on the local real estate market, which is a critical activity for any community bank in that region. The servicing operation, while smaller in fee income, was an ongoing administrative function.

• One- to four-family residential mortgage loans comprised 96.9% of the total loan portfolio at December 31, 2024.
• The principal balance of one- to four-family residential mortgage loans stood at $1.2 billion at December 31, 2024.
• Servicing fees received for the year ended December 31, 2024, amounted to $83,000.
• Commercial real estate loans represented only 0.6% of the total loan portfolio as of December 31, 2024.

Core deposit gathering was the primary source of funding, relying on local customers for stability. Territorial Savings Bank offered a variety of accounts, avoiding brokered deposits historically, which speaks to a focus on relationship banking.

Investment portfolio management of securities was the secondary deployment of funds after lending, though recent reports indicated a reduction in this area. The management activity involved balancing liquidity and yield within regulatory capital constraints.

Managing a network of approximately 29 full-service branches was the physical infrastructure supporting all other activities. These branches served as the touchpoints for both deposit gathering and loan origination across the Hawaiian Islands.

Here is a snapshot of the financial scale supporting these key activities, based on the latest available figures for Territorial Bancorp Inc. before the April 2025 merger completion:

The bank's activities involved managing deposit accounts like passbook and statement savings, money market, commercial and regular checking, and Super NOW accounts. The investment portfolio management included securities, which saw a decrease contributing to the total asset reduction from $2.24 billion at the end of 2023 to $2.17 billion at year-end 2024. Finance: draft 13-week cash view by Friday.

Territorial Bancorp Inc. (TBNK) - Canvas Business Model: Key Resources

You're looking at the core assets Territorial Bancorp Inc. (TBNK) brings to the table, especially now that the combination with Hope Bancorp, Inc. is complete as of April 2025. These aren't just line items; they are the foundation of the local franchise.

The most tangible resource is the stable, low-cost deposit base in Hawaii. As of the end of 2024, this base totaled about $1.72 billion, an increase from $1.64 billion at the end of 2023, largely driven by deposits from state and local governments. This funding source is critical for lending operations.

Next, you have the brand equity. That's The Territorial Savings Bank brand and its 100+ year legacy in Hawaii. Territorial Savings Bank itself was organized back in 1921, giving it deep, established community roots that Hope Bancorp intends to preserve as a trade name under Bank of Hope. That longevity matters in relationship banking.

The human capital is focused and local. The team consists of approximately 232-240 employees. For instance, one report from early 2025 noted 238 employees, while year-end 2023 data showed 240 total employees, including 232 full-time staff. These are the people delivering the personalized service.

Finally, the strategic infusion comes from the parent. You gain access to Capital and enhanced technology platform from parent Hope Bancorp. Hope Bancorp, a $17 billion-asset entity upon closing the merger, brings greater resources and an expanded array of banking products and services. This post-merger structure means TBNK's operations now sit within a larger, technologically advanced organization.

To give you a clearer picture of the financial standing at the time of the merger announcement's reporting period, here are some key figures from the end of 2024:

The strength of the franchise is also reflected in its operational focus and regulatory standing:

• One- to Four-Family Residential Mortgage Loans comprised 96.9% of the total loan portfolio at December 31, 2024.
• The bank provides financial services through 28 banking offices throughout Hawaii.
• The merger transaction was valued at approximately $78.60 million based on April 26, 2024, stock prices.
• The stock exchange symbol remains NASDAQ: TBNK, though the entity is now a unit of Bank of Hope.

If onboarding for new systems takes longer than expected post-integration, service continuity could be at risk.

Finance: draft 13-week cash view by Friday.

Territorial Bancorp Inc. (TBNK) - Canvas Business Model: Value Propositions

You're looking at the core value Territorial Bancorp Inc. (TBNK) delivered to its customers in Hawaii, especially leading up to its expected April 2025 merger with Hope Bancorp.

Community-focused, friendly island style personal banking service

Territorial Bancorp Inc. positioned itself as Hawaii's trusted community banking partner, a legacy dating back to 1921. This value proposition centers on local commitment and personalized service, which is key in their market area.

• Community-focused financial institution serving individuals, families, and businesses across Hawaii.
• Operates through a network of 28-29 full-service branches statewide.

Primary focus on one-to four-family residential mortgage loans

The lending strategy was heavily concentrated on the local housing market. This focus meant deep expertise in the specific real estate dynamics of the islands. Here's the quick math on that concentration as of the end of 2024:

What this estimate hides is the reliance on conforming, fixed-rate residential mortgage loans, with historically little demand for adjustable-rate products in their area.

FDIC-insured deposit accounts for individuals and businesses

Securing stable, local funding through insured deposits is the backbone of any community bank. Territorial Bancorp Inc. offered a variety of deposit products to individuals and businesses to support its lending activities.

• Deposit accounts included passbook and statement savings, money market, commercial and regular checking, and Super NOW accounts, plus certificates of deposit.
• Consolidated deposits stood at $1.7 billion as of December 31, 2024.
• Total deposits were reported at $1.72 billion near the end of the fourth quarter of 2024.

Comprehensive suite of banking and non-deposit investment services

Beyond core lending and deposits, Territorial Bancorp Inc. provided a broader set of financial tools, though the mortgage focus remained paramount. They competed with various financial entities, so offering a wider range helped maintain relationships.

The services included:

• Various loan products beyond residential mortgages, such as home equity loans and consumer loans.
• Commercial business loans and multi-family mortgage loans.
• Insurance agency activities.
• Non-deposit investments, specifically annuities and mutual funds, offered through a third-party broker-dealer.

If you're tracking the pro forma entity post-merger, note that the standalone Territorial Bancorp reported a net loss in Q4 2024, which the merger was expected to make immediately accretive to Hope Bancorp's EPS.

Finance: draft 13-week cash view by Friday.

Territorial Bancorp Inc. (TBNK) - Canvas Business Model: Customer Relationships

You're looking at the customer relationships for Territorial Bancorp Inc. (TBNK) right around the time of its integration into Hope Bancorp, which closed in April 2025. The core relationship strategy for Territorial Savings Bank was deeply rooted in its local, in-person presence in Hawaii, which is now being enhanced by the scale and technology of the acquiring entity.

Personal, in-branch service model via the branch network

The physical footprint was central to Territorial Bancorp Inc.'s customer engagement. The bank maintained a significant, localized presence across the Hawaiian Islands, which supported the personal service model.

• Chartered in 1921, the bank built a century-long legacy on local community commitment.
• As of early 2025, Territorial Savings Bank conducted business through a network of up to 29 full-service branches in the State of Hawaii.

Here's a breakdown of that branch distribution just prior to the merger closing:

Relationship-based lending with prudent credit standards

The lending approach was heavily focused on relationship banking, primarily serving individuals and families with residential mortgages, all while maintaining what was described as prudent credit standards. This focus is clear when you look at the loan portfolio composition as of December 31, 2024.

• The primary lending activity was the origination of one- to four-family residential mortgage loans.
• As of December 31, 2024, $1.2 billion, representing 96.9% of the total loan portfolio, consisted of one- to four-family residential mortgage loans.
• Other loan types, like commercial real estate loans and construction loans, made up only 0.9%, totaling $11.6 million, of the portfolio at that date.

The merger with Hope Bancorp was expected to accelerate loan mix diversification by adding a residential mortgage portfolio noted for excellent asset quality, while the combined entity projected high single-digit loan growth for 2025.

Automated digital banking services (online and mobile)

While the in-branch model was strong, the integration post-April 2025 brought an expected upgrade to the digital experience. The goal was to leverage the larger organization's resources to enhance technology platforms.

• The merger was anticipated to provide customers with improved technology platforms for better digital experiences.
• Territorial Savings Bank offered a variety of deposit accounts, including online-accessible options like money market and Super NOW accounts, alongside traditional checking and savings.

Dedicated customer service for deposit and loan inquiries

The commitment to local service was supported by a dedicated staff base. Post-merger, the intention was to maintain the legacy of exemplary customer service while layering on greater resources.

• Approximately 240 employees were part of the Territorial Bancorp Inc. team before the merger absorption.
• The legacy Territorial franchise in Hawai'i was intended to operate under the trade name Territorial Savings, a division of Bank of Hope, preserving the brand's commitment to local communities.

Territorial Bancorp Inc. (TBNK) - Canvas Business Model: Channels

You're looking at how Territorial Savings Bank, now operating as a division of Bank of Hope following the April 2, 2025 merger, gets its services to customers in late 2025. The physical footprint remains anchored in Hawaii, but the digital reach is now part of a much larger network.

The primary physical channel is the network of brick-and-mortar locations, which is a key part of its community-focused approach, even post-acquisition. As of the merger completion, the legacy Territorial franchise in Hawaii operates its established physical access points.

The digital channels are critical for modern banking, allowing account access and transactions outside the physical branch network. This capability is now integrated into the larger Bank of Hope technology platform.

• Online banking platform access for account management.
• Mobile banking platform for transactions and account servicing.
• Telephone banking services for remote customer support.

The core lending product, one- to four-family residential mortgage loans, is distributed through these channels, supported by the mortgage production offices. At year-end 2024, these loans represented $1.2 billion, or 96.9%, of the total loan portfolio. The bank's total consolidated deposits stood at $1.7 billion as of December 31, 2024. ATMs are also a standard component of the physical access strategy, complementing the branch network.

Territorial Bancorp Inc. (TBNK) - Canvas Business Model: Customer Segments

You're looking at the core customer base for Territorial Bancorp Inc. (TBNK), which operates as the holding company for Territorial Savings Bank, serving the State of Hawaii through its 28 banking offices across all four counties. The bank's entire operation is geographically anchored to this market.

The customer segments are clearly defined by geography and primary financial needs, heavily skewed toward residential lending.

• Individuals and families in the State of Hawaii
• Local small to mid-sized businesses in the Hawaiian Islands
• Residential real estate investors and homeowners seeking mortgages
• Multi-cultural customers, aligning with the parent company's focus

The primary focus, based on the loan book as of December 31, 2024, is unequivocally on residential customers. One- to four-family residential mortgage loans made up 96.9% of the total loan portfolio, equating to approximately $1.2 billion of the total loans. This shows a deep commitment to serving homeowners and, by extension, residential real estate investors within Hawaii.

For the business segment, the focus is on smaller, local enterprises. Commercial real estate loans, which primarily target owner-occupied light industrial properties, represented only 0.6% of the total loan portfolio at year-end 2024, totaling $8.2 million across about ten loans with an average balance near $822,000. Nonresidential real estate loans overall were just 0.9% of the portfolio.

The bank draws its funding from these local relationships, too. As of June 30, 2024, Territorial Bancorp Inc. held a 2.9% FDIC-insured deposit market share in the State of Hawaii, ranking fifth among institutions with offices there. The concentration of deposits is highest in the County of Hawaii, where the bank ranked fifth with a 4.4% market share among eight institutions.

Here's a quick look at the scale of the operation serving these segments as of late 2024/early 2025 filings:

The offering of non-deposit investments, like annuities and mutual funds, through a third-party broker-dealer also suggests a segment of customers seeking wealth management services alongside their core banking needs. The bank's long history, starting in 1921, suggests a deep, established relationship with Hawaii's multi-generational and multi-cultural population, even if specific demographic data isn't explicitly broken out in the latest filings.

Finance: draft the 2025 pro-forma deposit mix based on the Hope Bancorp merger integration by next Tuesday.

Territorial Bancorp Inc. (TBNK) - Canvas Business Model: Cost Structure

You're looking at the cost side of Territorial Bancorp Inc.'s (TBNK) operations as of late 2025, keeping in mind the definitive merger agreement with Hope Bancorp, Inc. signed in April 2024, which was expected to close in the first quarter of 2025. This context is key because the final cost structure will be integrated into Hope Bancorp's larger framework, but for now, we look at the last reported figures from TBNK, primarily year-end 2024.

Interest expense on deposits and borrowings

The cost of funding was a major driver of expense pressure, especially as short-term interest rates remained elevated through 2024. You saw total interest expense jump significantly in the fourth quarter of 2024 compared to the prior year period. Specifically, for the three months ended December 31, 2024, total interest expense increased by $2.42 million compared to the same period in 2023.

The bulk of this increase came from customer deposits, reflecting a shift in funding mix. Interest expense on deposits rose by $2.51 million for the three months ended December 31, 2024. Here's a breakdown of the liability-side interest costs for that quarter:

The migration of customer balances from lower-rate savings accounts to higher-rate CDs was a clear driver of the increased deposit cost. Honestly, managing that deposit beta in a high-rate environment is always tricky.

Personnel expenses for the ~232-240 employees

Territorial Bancorp Inc. viewed its employees as its most important asset. As of December 31, 2024, the company had 233 full-time employees and nine part-time employees, totaling 242 individuals. Personnel costs, which fall under noninterest expense, showed some fluctuation leading up to the merger announcement.

For the first quarter of 2024, salaries and employee benefits decreased by $442,000 compared to the first quarter of 2023. This reduction was attributed to several factors:

• Decrease in the number of employees working at the bank.
• Lower deferred salary expense from originating fewer new loans.
• Decline in Employee Stock Ownership Plan (ESOP) accruals due to a lower share price.

The compensation structure included salaries, an ESOP, a 401(k) Plan with potential employer matching, healthcare, and paid time off.

Occupancy and equipment costs for the branch network

Specific line items for occupancy and equipment costs aren't broken out separately in the readily available summary filings, so we look at the broader Noninterest Expense category, which includes these fixed and semi-fixed costs. For the full year 2024, total Noninterest Expenses increased by $2.7 million to reach $40.9 million. This increase was largely driven by one-time merger-related costs, but the underlying operational costs for the branch network would be embedded here.

For the three months ended December 31, 2024, total Noninterest Expense increased by $1.42 million compared to the same period in 2023, primarily due to a $1.34 million increase in general and administrative expenses. You can't separate the tech spend from the G&A spike, but it's important to note that $1.53 million of those Q4 2024 general and administrative expenses were specifically merger-related legal and consulting fees. That one-time fee is masking the true underlying cost of running the branches and technology stack.

Technology and data processing expenses, increasingly integrated with Hope Bancorp

Technology and data processing expenses are typically bundled within the General and Administrative Expenses, which saw a significant spike in late 2024 due to the pending acquisition. The expectation, post-merger completion in early 2025, would be a shift toward Hope Bancorp's established technology platforms, potentially leading to consolidation savings in the long run, but incurring integration costs in the near term.

The merger agreement itself, valued at approximately $78.60 million based on the April 26, 2024, stock price, dictates that Hope Bancorp intends to maintain the Territorial Savings Bank franchise in Hawaii. This suggests that while back-office systems might integrate, the customer-facing branch technology under the Territorial Savings Bank trade name will likely remain operational, at least initially.

Finance: draft 13-week cash view by Friday

Territorial Bancorp Inc. (TBNK) - Canvas Business Model: Revenue Streams

You're looking at the core ways Territorial Bancorp Inc. generated revenue before its merger completion in early 2025. For a community bank focused on Hawaii, the story is almost always about the spread between what they earn on loans and what they pay for deposits.

Net Interest Income (NII) from loan and investment securities portfolios is the engine room. For the quarter ended September 30, 2024, Territorial Bancorp Inc. reported Net Interest Income of $7.5 million, down from $10 million in the same quarter of the prior year. This decline reflects the pressure from rising interest expenses outpacing interest income growth in that period.

Interest income on loans, primarily residential mortgages, forms the bulk of the interest earnings. In the fourth quarter of 2024, total interest income was reported at $17.91 million. The loan portfolio as of December 31, 2024, included Nonresidential Real Estate Loans totaling $11.6 million, which represented 0.9% of the total loan portfolio. Total deposits, the primary funding source, stood at $1.7 billion at the end of 2024.

Noninterest income provides diversification, though it's a smaller piece of the pie for Territorial Bancorp Inc. For the full year ended December 31, 2024, Noninterest income was $2.6 million. This was driven by items like income from bank-owned life insurance and other miscellaneous sources.

Specific components of that noninterest income include service charges, fees, and income from agency activities. While exact breakdowns for late 2025 aren't available due to the merger, the full-year 2024 figures give you a sense of scale:

• Full Year 2024 Noninterest Income: $2.6 million
• Nonresidential Real Estate Loans as percentage of total loan portfolio (Dec 31, 2024): 0.9%
• Total Deposits (Dec 31, 2024): $1.7 billion

Here's a quick look at the latest reported revenue components for Territorial Bancorp Inc. before the merger: