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Territorial Bancorp earns $3.6 million in 1Q

HONOLULU (AP) -- The parent company of Territorial Savings Bank said Wednesday it earned $3.6 million in the first quarter, slightly up from income of $3.5 million during the same three months a year ago.

Honolulu-based Territorial Bancorp Inc. said its earnings amounted to 37 cents per basic share.

CEO Allan Kitagawa said Hawaii's economy has improved but the bank is facing challenges because of the impact federal budget cuts could have on the state's economy.

"The growth in the visitor industry and the start of new construction projects has kept the state's unemployment rate low," Kitagawa said.

Hawaii has depended heavily on federal spending, especially given the military's strong presence in the state. In addition to the automatic cuts, it's not fully clear how the state will be affected by the death of longtime U.S. Sen. Daniel Inouye in December. Inouye had a reputation for driving federal dollars toward Hawaii.

The bank is trying to grow its loan portfolio and produce mortgage loans with good quality, Kitagawa said.

The company said its total assets dropped slightly to $1.57 billion in the period ending March 31.

Territorial's board approved an increase in the company's quarterly dividend, from 12 cents to 13 cents per share.

Shares of the company dropped 41 cents, or 1.8 percent, to $22.97 on Wednesday.