Territorial Bancorp Inc. of Honolulu posted a 43.5% increase in second-quarter net income from a year earlier, to $3.2 million.
The parent company of Territorial Savings Bank said its earnings improved mainly because of a 17% increase in net interest income.
The $1.4 billion-asset company cut its interest expenses by 24% by lowering the interest rate it paid on deposits.
And, unlike last year, Territorial had no impairment losses on securities during the quarter, which meant non-interest income rose.
"We are pleased with our performance during the second quarter of 2010 in light of difficult economic conditions in Hawaii and throughout the country," Allan Kitagawa, chairman and chief executive officer, said in a press release Thursday.
Nonperforming assets accounted for 0.05% of the company's total assets as of June 30. That was the same percentage as at the end of 2009.
The number of delinquent loans more than 89 days past due and nonaccruals increased 77.6% to $492,000 as of June 30, compared with $277,000 as of Dec. 31, 2009. The ratio of nonperforming assets to total assets remained flat despite a slight increase in total nonperforming assets, because the company's overall assets rose. — Rachel Witkowski