Concludes that Proposed Merger with Hope "Does Not Appear to Maximize Value for Shareholders"

Competing Offer "Appears Sufficiently Credible to Mitigate the Downside Risk of Rejecting the Proposed Merger"

Recommends Territorial Shareholders Vote Against All Proposals at the Upcoming Special Meeting

HONOLULU, Oct. 1, 2024 /PRNewswire/ -- Blue Hill Advisors LLC ("Blue Hill") and former Hawaii banking executive Allan Landon today announced that Institutional Shareholder Services Inc. ("ISS"), a leading independent proxy advisory firm, has recommended that shareholders of Territorial Bancorp Inc. ("Territorial" or the "Company") (NASDAQ: TBNK) vote AGAINST the proposed merger between Territorial and Hope Bancorp, Inc. ("Hope") (NASDAQ: HOPE) at the Company's Special Meeting of Stockholders on October 10, 2024.

In its report, ISS concludes that Hope's takeover of Territorial is not in the best interest of the Company's shareholders:¹

• "Given the lack of a robust sales process, the fact that the merger agreement restrictions accepted by the board limit its ability to engage with a competing bidder, and the improved outlook for financial institutions, the proposed merger with HOPE does not appear to maximize value for shareholders."

• "Despite some uncertainty, the competing offer from Blue Hill appears sufficiently credible to mitigate the downside risk of rejecting the proposed merger – as reflected by the fact that shares are currently trading above the implied merger consideration."

• "Nonetheless, the deal was announced near TBNK's all-time low trading price, and a few months before the recent decision by the Federal Reserve to cut interest rates, both of which raise the concern that the board did not negotiate the transaction from a position of strength."

• "The board ran a limited sales process, primarily engaging with a bidder brought to it by its financial advisor, and only contacting two other banks that had previously expressed interest in a combination."

• "TBNK shares have rallied since the consortium's sweetened competing bid on Sept. 26, trading above the implied value of the merger consideration."

• "…the proposed 70 percent tender would allow shareholders to crystallize a cash premium for most of their shares and maintain a 30 percent interest in the company, thus providing certainty of value along with potential upside exposure."

Jason Blumberg, Managing Member of Blue Hill, commented:

"We are pleased that ISS has recommended that shareholders vote AGAINST the Hope merger at the upcoming Special Meeting. We are prepared to move quickly to execute our transaction, which we believe will benefit all of Territorial's stakeholders."

Jerry O'Brien, Chief Executive Officer and Chief Investment Officer of O'Brien-Staley Partners, one of the investors behind the proposal, added:

"We remain keenly interested in Territorial Bancorp at the higher price and appreciate Allan Landon's leadership in advancing this superior proposal."

Mr. Landon concluded: 

"We remain committed to our superior proposal, which is better for shareholders, employees, customers and the Hawaiian market."

More information on the proposal from Blue Hill and Mr. Landon can be found at www.NewTerritorial.com and in a presentation titled, "A Better Deal for Territorial".

Territorial shareholders are encouraged to contact Blue Hill for more information or to contact Territorial's Board to express their support for this proposal. Shareholders who have already voted FOR the Hope merger but who wish to change their vote can still do so before the October 10 special meeting of Territorial stockholders by following the instructions for changing votes as described in the prospectus that Hope filed with the U.S. Securities and Exchange Commission on August 22, 2024.

Contacts

For Media:

Breitenbush Partners
Andrew Wilson, 773-425-4991
awilson@breitenbushpartners.com 

For Investors:

Blue Hill Advisors
Jason Blumberg, 917-733-0381
jason@bluehilladv.com

About Blue Hill Advisors

Blue Hill Advisors is an advisor to and investor in regional and community banks. The firm looks for opportunities that it believes have been substantially mispriced by the market and seeks to build long-term value through active management.

About OSP

O'Brien-Staley Partners (OSP) operates across four discrete financial business strategies: alternative asset management; market-rate impact investing; nationwide loan servicing; and deposit management. Founded by Jerry O'Brien and Warren Staley in 2010, OSP is imbued with the core credit and fundamental investing discipline, risk management and governance DNA that has long been recognized as hallmarks of their personal and professional brands. https://osp-group.com 

FORWARD-LOOKING STATEMENTS

Certain statements and information contained in this communication may be forward looking in nature and may constitute forward-looking statements. Forward-looking statements include all statements that are not historical facts and can typically be identified by words such as "may", "will ", "expect", "could", "should", "intend", "commit", "estimate", "anticipate", "believe", "remain", "on track", "design", "target", "objective", "goal", "forecast", "projection", "outlook", "prospects", "plan", "intend", or similar terminology, including by way of example and without limitation plans, intentions and expectations regarding the proposal to acquire Territorial and the anticipated results, benefits, synergies, costs, timing and other expectations of the benefits of a potential transaction.

Forward-looking statements are related to future, not past, events and are not guarantees of future performance. These statements are based on current expectations and projections about future events and, by their nature, address matters that are, to different degrees, uncertain and are subject to inherent risks and uncertainties. They relate to events and depend on circumstances that may or may not occur or exist in the future, and, as such, undue reliance should not be placed on them. Actual results may differ materially from those expressed in such statements as a result of a variety of factors, including, among other things, the ability of Territorial, on the one hand, and Blue Hill Advisors and certain other investors (collectively, the "Investors"), on the other hand, to agree on terms for the proposed transaction and, in the event a definitive transaction agreement is executed, the ability of the parties to obtain any necessary shareholder and regulatory approvals and financing, to satisfy any other conditions to the closing of the transaction and to consummate the proposed transaction on a timely basis, as well as changes in general economic, financial and market conditions and other changes in business conditions, changes in regulations, and many other factors, most of which are outside of the control of the Investors. The Investors expressly disclaim and do not assume any liability in connection with any inaccuracies in any of these forward-looking statements or in connection with any use by any party of such forward-looking statements. Any forward-looking statements contained in this communication speaks only as of the date of this communication.

The Investors undertake no obligation to update or revise its outlook or forward-looking statements, whether as a result of new developments or otherwise. Names, organizations and company names referred to may be the trademarks of their respective owners. This communication does not represent investment advice, a solicitation, a recommendation, an invitation, an offer for the purchase or sale of financial products and/or of any kind of financial services as contemplated by the laws in any country or state.

NO OFFER OR SOLICITATION

This document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which the offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.   

ADDITIONAL INFORMATION AND WHERE TO FIND IT

This communication does not constitute an offer to buy or solicitation of an offer to sell any securities. This communication relates to a proposal that Investors have made for a transaction with Territorial. In furtherance of this proposal and subject to future developments, Investors or certain affiliated entities (and, if a negotiated transaction is agreed to, Territorial) may file one or more registration statements, proxy statements, tender offer statements or other documents with the SEC. This communication is not a substitute for any proxy statement, registration statement, tender offer statement, prospectus or other document Investors or any of their affiliates and/or Territorial may file with the SEC in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF TERRITORIAL ARE URGED TO READ THE PROXY STATEMENT(S), REGISTRATION STATEMENT, TENDER OFFER STATEMENT, PROSPECTUS AND/OR OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Any definitive proxy statement(s) or prospectus(es) (if and when available) will be mailed to stockholders of Territorial, as applicable. Investors and security holders of Territorial will be able to obtain free copies of these documents (if and when available) and other documents filed with the SEC through the web site maintained by the SEC at www.sec.gov.

PARTICIPANTS IN THE SOLICITATION

This communication is neither a solicitation of a proxy nor a substitute for any proxy statement or other filings that may be made with the SEC.

¹ Permission to quote ISS was neither sought nor obtained. Emphases added.

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SOURCE Blue Hill Advisors