Territorial Bancorp Inc. is a Maryland corporation and owns 100% of the outstanding
common stock of Territorial Savings Bank. On July 10, 2009, we completed our
initial public offering of common stock in connection with the mutual-to-stock
conversion of Territorial Mutual Holding Company, selling 12,233,125 shares
of common stock at $10.00 per share. Since the completion of our initial public
offering, we have not engaged in any significant business activity other than
owning the common stock of and having savings deposits in Territorial Savings
Bank, paying dividends and repurchasing shares of common stock.
Territorial Savings Bank is a Hawaii state-chartered savings bank headquartered
in Honolulu, Hawaii. Territorial Savings Bank was organized in 1921, and reorganized
into the mutual holding company structure in 2002. Territorial Savings Bank
is currently the wholly-owned subsidiary of Territorial Bancorp Inc. We provide
financial services to individuals, families and businesses through our 28 banking
offices located throughout the State of Hawaii.
On June 25, 2014, Territorial Savings Bank converted from a federal savings
bank to a Hawaii state-chartered savings bank. On July 10, 2014, Territorial
Savings Bank became a member of the Federal Reserve System.
Territorial Savings Bank’s executive offices are located at 1132 Bishop
Street, Suite 2200, Honolulu, Hawaii 96813. Our telephone number at this address
is (808) 946-1400.
Territorial Savings Bank’s business consists primarily of accepting deposits
from the general public and investing those deposits, together with funds generated
from operations and borrowings, in one- to four-family residential mortgage
loans and investment securities. To a much lesser extent, we also originate
home equity loans and lines of credit, construction, commercial and other nonresidential
real estate loans, consumer loans, multi-family mortgage loans and other loans.
Territorial Savings Bank offers a variety of deposit accounts, including passbook
and statement savings accounts, certificates of deposit, money market accounts,
commercial and regular checking accounts and Super NOW accounts. Through our
subsidiary, Territorial Financial Services, Inc., we engage in insurance agency
activities. We also offer various non-deposit investments to our customers,
including annuities and mutual funds, through a third-party broker-dealer.
Our primary lending activity is the origination of one- to four-family residential
mortgage loans. To a much lesser extent, we also originate home equity loans
and lines of credit, construction, commercial and other nonresidential real
estate loans, consumer loans, multi-family mortgage loans and commercial business
loans.
Our Board of Directors has primary responsibility for establishing and overseeing
our investment policy. The Board of Directors has delegated authority to implement
the investment policy to our Investment Committee, consisting of our President
and Chief Executive Officer, our Vice Chairman and Co-Chief Operating Officer,
our Senior Vice President and Chief Financial Officer and our Vice President
and Controller. The investment policy is reviewed at least annually by the Investment
Committee, and any changes to the policy are subject to approval by the full
Board of Directors. The overall objectives of the Investment Policy are to maintain
a portfolio of high quality and diversified investments to maximize interest
income over the long term and to minimize risk, to provide collateral for borrowings,
to provide additional earnings when loan production is low, and to reduce our
tax liability. The policy dictates that investment decisions give consideration
to the safety of principal, liquidity requirements and potential returns. Our
Senior Vice President and Chief Financial Officer executes our securities portfolio
transactions as directed by the Investment Committee. All purchase and sale
transactions are reported to the Board of Directors on a monthly basis.
Our current investment policy permits investments in securities issued by the
United States Government as well as mortgage-backed securities and direct obligations
of Fannie Mae, Freddie Mac and Ginnie Mae. The investment policy also permits,
with certain limitations, investments in certificates of deposit, bank-owned
life insurance, collateralized mortgage obligations, trust preferred securities,
municipal securities and stock in the Federal Home Loan Bank and the Federal
Reserve Bank. We purchased stock in the Federal Home Loan Bank in order to obtain
services such as demand deposit accounts, certificates of deposit, security
safekeeping services and borrowings in the form of advances. As a member of
the Federal Reserve System, we are required to hold stock in the Federal Reserve
Bank.
Deposits traditionally have been our primary source of funds for our investment
and lending activities. We also borrow from the Federal Home Loan Bank and from
securities dealers through securities sold under agreements to repurchase to
supplement cash flow needs, to lengthen the maturities of liabilities for interest
rate risk management purposes and to manage our cost of funds. Our additional
sources of funds are loan repayments, maturing investments, retained earnings,
income on other earning assets and the proceeds of loan and security sales.
We accept deposits primarily from the areas in which our offices are located.
We rely on our competitive pricing and products, convenient locations and quality
customer service to attract and retain deposits. We offer a variety of deposit
accounts with a range of interest rates and terms. Our deposit accounts consist
of passbook and statement savings accounts, certificates of deposit, money market
accounts, commercial and regular checking accounts and Super NOW accounts. Historically,
we have not accepted brokered deposits.
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