Territorial Bancorp Shareholders Approve Hope Bancorp Merger

News release from Territorial Bancorp Inc

HONOLULU, Nov. 06, 2024 -- Territorial Bancorp Inc. (NASDAQ: TBNK) ("Territorial” or the "Company”) announced that its shareholders voted to approve the Company's proposed merger with Hope Bancorp, Inc. ("Hope Bancorp”) (NASDAQ: HOPE) at the Special Meeting of Territorial Stockholders held today.

Territorial shareholders' support for the Hope Bancorp merger underscores the value it delivers and the benefits it creates for customers, employees and communities across Hawai'i. Through this all-stock merger, Territorial shareholders will be able to participate in the significant upside value creation of a scaled, more diversified regional bank with an attractive dividend and compelling growth opportunities. Territorial customers can expect a seamless transition, with a continued focus on relationship banking, personalized service and tailored financial solutions.

"We expect our combination with Bank of Hope to strengthen Territorial for the long term, providing many advantages for our customers and employees as we become part of a larger organization with greater resources, enhanced technology platforms, and an expanded array of banking products and services,” said Allan S. Kitagawa, Chairman, CEO and President of Territorial. "We greatly appreciate the hard work of our employees and their unwavering commitment to delivering outstanding service as we progress toward the closing of this transaction.”

As previously announced, closing of the transaction remains subject to customary regulatory approvals and closing conditions.

AB: Controversial bid for Territorial in Hawaii wins shareholder backing

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Investors Behind Territorial Proposal Advance Offer with Detailed Disclosure to Board

Confidentially Provide Information Detailing Financial Wherewithal, Regulatory Experience and Oversubscribed Investor Interest

Reduce Minimum Tender Requirement from 70% to 51%

Call on Board to Recognize that Offer is "Reasonably Likely to Lead to a Superior Proposal"

Remind Shareholders That Board Has Failed to Justify Territorial's Sale to Hope

Urge Territorial Shareholders to Vote AGAINST Hope Sale Again at the Adjourned Special Meeting of Stockholders on November 6, 2024

News Release from Blue Hill Advisors Oct 25, 2024

HONOLULU, Oct. 25, 2024 /PRNewswire/ -- Investors behind a proposal submitted on August 26 to the Board of Directors (the "Board") of Territorial Bancorp Inc. ("Territorial" or the "Company") (NASDAQ: TBNK) have disclosed information about themselves in an addendum sent to Territorial's outside counsel today (the "Addendum"). The investors have offered repeatedly since late August to engage with the Board and advance their proposal toward a binding agreement that they believe will be better for all Territorial stakeholders.

The Addendum offers additional details about the seven seasoned bank investors backing the proposal, whose individual expressions of interest in acquiring Territorial shares total $134 million. That is $26 million more than the amount required to tender for 100% of Territorial's shares at a price of $12.50 per share and nearly $80 million more than the amount required to tender for 51% of Territorial's shares, a new reduced minimum threshold the investors have committed to in the Addendum.

The investors collectively manage $3.4 billion in investor capital and comprise a mix of funds, family offices and private investors who have executed hundreds of transactions like this. Two of the investors have opted to remain anonymous due to the Board's history of aggressive and misleading public statements – detailed information about them is nevertheless provided in the Addendum.

"Territorial has perpetuated a false narrative about the relative risks of these two transactions. Territorial's shareholders and Board should be comforted by the strong, oversubscribed interest in this transaction among the seven experienced investors who are backing this proposal," said Jason Blumberg, Managing Member of Blue Hill Advisors. "Our proposal clearly exceeds the threshold of 'reasonably likely to lead to a Superior Proposal,' and the Board should engage immediately."

Thus far, however, the investors have been stymied by the Board's refusal to engage on any level. The Board has declined every overture, citing Territorial's merger agreement with Hope which prohibits engagement until the Board determines that a proposal is "reasonably likely to lead to a Superior Offer." 1 The investors firmly believe they have always cleared the "reasonably likely" hurdle and opted to send the Addendum to put to rest any questions about the viability of their offer.

The investors are now calling on the Board to uphold its fiduciary duty to shareholders and explore a potentially superior proposal that values Territorial at a 25% premium to the current value of the consideration shareholders would receive in a sale to Hope2. The Board should stop provoking the investors with ludicrous demands – for example, suggesting that Blue Hill Advisors, one of the investors behind the proposal, should make a sight-unseen "legally binding 'hell or highwater' commitment" 3 – and instead engage quickly.

Mr. Blumberg further commented, "The Superior Proposal criteria in the merger agreement clearly exist so that a competing bidder with a potentially superior offer can exchange the confidential information needed to move from a preliminary offer to a definitive, binding agreement, all while the Hope transaction proceeds in parallel. The criteria don't just allow for, but explicitly anticipate, routine contingencies like due diligence that are inherent in any initial offer. There is no risk to Territorial shareholders since the Hope transaction can clearly proceed in parallel while the investors perform due diligence and move to a superior, final offer."

Mr. Blumberg continued, "Territorial has adopted a confounding position, unsupported by the merger agreement, under which the preliminary offer must be fully baked, devoid of any contingencies including due diligence and with financing that is already committed before the Board will even consider engaging. Territorial's unjustifiable position has created a roadblock that makes it impossible for us to deliver the certainty they claim to want."

The investors maintain that Territorial shareholders are left with little choice but to continue opposing the Hope merger until the Board comes to the table or the deal is terminated, freeing Territorial's Board to pursue a better deal. The investors have consistently maintained that virtually any deal would be better than a sale to Hope that (1) was struck near Territorial's all-time-low share price, (2) values Territorial at the second lowest bank sale multiple on record and (3) deprives shareholders of any chance to recover the nearly 70% in value destroyed over the last five years. The improving interest rate outlook and M&A environment for banks only bolster the investors' confidence that Territorial can and should do better.

Mr. Blumberg concluded, "Territorial shareholders should continue voting AGAINST the sale to Hope to force the Board to the table. The special meeting can be postponed one more time if Territorial cannot achieve the requisite shareholder support on November 6. The Board can use the extra time between now and the next meeting to give the investors access to information to finalize this superior proposal."

More information on the investor proposal 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 Advisors 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 November 6 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 (the "SEC") on August 22, 2024.

AB: Hope Bancorp tight-lipped on its acquisition of Territorial in Hawaii, competing offer | American Banker

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Blue Hill Advisors and Investors Reaffirm Commitment to Territorial Transaction; Will Stand by Offer if Hope Deal Terminates

Reiterate Desire to Engage Directly with the Board, Not in a Public Fight

Commit to Completing Transaction on the Same Proposed Terms if Sale to Hope Terminates

Urge Territorial Shareholders to Vote AGAINST Hope Sale Again at the Adjourned Special Meeting of Stockholders on November 6, 2024

News Release from Blue Hill Advisors, Oct 17, 2024

HONOLULU, Oct. 17, 2024 /PRNewswire/ -- Former Hawaii banking executive Allan Landon, Blue Hill Advisors and other leading bank investors today reaffirmed their commitment to successfully completing a transaction with Territorial Bancorp Inc. ("Territorial" or the "Company") (NASDAQ: TBNK) and clarified their intent to stand by their offer if shareholders vote down the proposed sale to Hope Bancorp, Inc. ("Hope") (NASDAQ: HOPE) at the adjourned Special Meeting of Stockholders on November 6.

Mr. Landon and the investors, which also include O'Brien-Staley Partners and veteran bank investor Mark Lynch, have favored a collaborative approach with Territorial's Board of Directors (the "Board"). However, the Board has rejected multiple requests by the investors to engage in direct discussions. In the event that the sale to Hope terminates, Mr. Landon and the investors stand ready to speak with the Board in November and to diligently execute the proposed cash transaction on the current terms shortly thereafter.

"Our goal all along has been to engage in constructive dialogue with Territorial about this superior offer for shareholders, employees, customers and the Hawaii community," said Mr. Landon.  "We look forward to that opportunity, even if it has to come after the adjourned special meeting. We intend to offer the same terms then as we are offering now."

The investors urge Territorial shareholders not to be distracted by the numerous letters, presentations and press releases put out by Territorial's Board and advisors over the last few weeks. Instead, they encourage shareholders to focus on five simple points:

The Board's sale process was flawed. The Board struck a deal with Hope near the stock's all-time-low price, after a nearly 70% decline and a limited sales process involving only two other potential buyers. Shares of Territorial have consistently traded at a premium to the implied value of the Hope merger consideration since the investors made their proposal public, reflecting shareholder expectations for a better transaction.

The investors believe that their offer is reasonably likely to be considered a superior proposal. The investors' $12.50 cash proposal represents a substantial premium to the current value of the Hope merger consideration and offers up to 30% of Territorial shareholders (and potentially more depending on shareholder and Board feedback) the opportunity to participate in Territorial's recovery. Meanwhile, the Board approved a sale that values Territorial at the second lowest bank sale multiple in recorded history.

The Board continues to reject requests to discuss the investors' proposal. Mr. Landon and the investors have repeatedly offered to work collaboratively with the Board and share more information about their proposal. The investors are not interested in perpetuating a public back-and-forth or subjecting themselves to Territorial's misleading assertions.

Territorial's prospects have improved dramatically. Since the sale to Hope was announced in April 2024, the banking sector has rallied on the expectation of lower interest rates, which would disproportionately benefit Territorial via repricing of its higher cost wholesale funding. There is simply no reason for shareholders to accept a sale that values Territorial at the second lowest bank sale multiple on record.

A leading independent proxy advisory firm has recommended voting against the sale to Hope. Institutional Shareholder Services Inc. ("ISS") has recommended that shareholders vote AGAINST the Hope deal. The deal terms on which that recommendation was based have not changed. In its report, ISS noted that "the competing offer from Blue Hill appears sufficiently credible to mitigate the downside risk of rejecting the proposed merger" and that the Hope deal "does not appear to maximize value for shareholders."

More information on the investor proposal 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 Advisors 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 November 6 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 (the "SEC") on August 22, 2024.

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Oct 7 2024: UPDATE: Territorial Bank Postpones Merger Vote