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

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:

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.

Contacts

For Media:

Breitenbush Partners

Andrew Wilson, 773-425-4991

[email protected] 

For Investors:

Blue Hill Advisors

Jason Blumberg, 917-733-0381

[email protected]

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.

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SOURCE Blue Hill Advisors