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Territorial Bancorp Inc (NASDAQ:TBNK): Should The Recent Earnings Drop Worry You?

Andrew Edmonds

Analyzing Territorial Bancorp Inc’s (NASDAQ:TBNK) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess TBNK’s recent performance announced on 31 December 2017 and compare these figures to its long-term trend and industry movements. View our latest analysis for Territorial Bancorp

Commentary On TBNK’s Past Performance

For the purpose of this commentary, I like to use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This blend allows me to analyze different companies on a similar basis, using new information. For Territorial Bancorp, its most recent earnings (trailing twelve month) is US$14.94M, which, relative to the previous year’s level, has declined by -7.93%. Given that these figures may be relatively short-term, I have created an annualized five-year figure for TBNK’s net income, which stands at US$14.61M This suggests that despite the fact that earnings growth was negative against the prior year, over time, Territorial Bancorp’s earnings have been growing on average.

NasdaqGS:TBNK Income Statement Mar 20th 18
NasdaqGS:TBNK Income Statement Mar 20th 18

How has it been able to do this? Let’s take a look at if it is only owing to industry tailwinds, or if Territorial Bancorp has experienced some company-specific growth. Over the last couple of years, Territorial Bancorp grew its bottom line faster than revenue by successfully controlling its costs. This brought about a margin expansion and profitability over time. Eyeballing growth from a sector-level, the US mortgage industry has been relatively flat in terms of earnings growth over the previous year, levelling off from a solid 12.85% over the previous five years. This means that whatever near-term headwind the industry is experiencing, it’s hitting Territorial Bancorp harder than its peers.

What does this mean?

Territorial Bancorp’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that are profitable, but have unpredictable earnings, can have many factors influencing its business. I recommend you continue to research Territorial Bancorp to get a better picture of the stock by looking at:

  • 1. Future Outlook: What are well-informed industry analysts predicting for TBNK’s future growth? Take a look at our free research report of analyst consensus for TBNK’s outlook.

  • 2. Financial Health: Is TBNK’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.

  • 3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.