HONOLULU, Oct. 25, 2024 - 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.

Contacts

For Media:

Breitenbush Partner
Andrew Wilson, 773-425-4991
awilson@breitenbushpartners.com

For Investors:

Blue Hill Advisors
Jason Blumberg, 917-733-0381
jason@bluehilladv.com

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.

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.

1 https://www.sec.gov/Archives/edgar/data/1447051/000110465924055737/tm2412965d1_ex2-1.htm
2 Based on Hope's closing stock price on the Nasdaq on 10/25/24.
3 https://www.nasdaq.com/press-release/blue-hill-doubles-down-cloak-secrecy-and-unanswered-questions-2024-10-09

SOURCE Blue Hill Advisors