P3YTerritorial Bancorp Inc. 0001447051--12-312024Q3假http://fasb.org/us-gaap/2023#以资产作为担保的权利http://fasb.org/us-gaap/2023#持至到期投资00http://fasb.org/us-gaap/2023#应收利息883221088266130001447051us-gaap:留存收益会员2024-09-300001447051us-gaap:额外实收资本成员2024-09-300001447051us-gaap:累计其他综合收益成员2024-09-300001447051us-gaap:累积净未实现投资收益损失成员2024-09-300001447051us-gaap:累计确定给付计划调整成员2024-09-300001447051tbnk : 员工股票持有计划成员2024-09-300001447051us-gaap: 留存收益成员2024-06-300001447051us-gaap: 额外实收资本成员2024-06-300001447051us-gaap: 累计其他综合收益成员2024-06-300001447051us-gaap: 累计未实现投资收益（损失）成员2024-06-300001447051us-gaap:累计确定福利计划调整成员2024-06-300001447051tbnk : 员工股票拥有计划成员2024-06-300001447051us-gaap:留存收益成员2023-12-310001447051us-gaap:其他支付的额外资本成员2023-12-310001447051us-gaap:累计其他综合收益成员2023-12-310001447051us-gaap:累计未实现投资收益损失成员2023-12-310001447051us-gaap:累计确定福利计划调整成员2023-12-310001447051tbnk : 员工股票拥有计划成员2023-12-310001447051us-gaap:留存收益成员2023-09-300001447051us-gaap:额外支付资本成员2023-09-300001447051us-gaap:累计其他综合收益成员2023-09-300001447051us-gaap:累计未实现投资收益损失成员2023-09-300001447051us-gaap:累计定义收益计划调整成员2023-09-300001447051tbnk : 员工持股计划成员2023-09-300001447051us-gaap:留存收益成员2023-06-300001447051us-gaap:额外支付资本成员2023-06-300001447051us-gaap:累计其他综合收益成员2023-06-300001447051us-gaap:累计未实现投资收益损失成员2023-06-300001447051us-gaap:累计确定福利计划调整成员2023-06-300001447051tbnk : 员工持股计划成员2023-06-300001447051us-gaap:留存收益成员2022-12-310001447051us-gaap:额外已付资本成员2022-12-310001447051us-gaap:累计其他综合收益成员2022-12-310001447051us-gaap:累计未实现投资收益损失成员2022-12-310001447051us-gaap:累计定义福利计划调整成员2022-12-310001447051tbnk : 员工持股计划成员2022-12-310001447051us-gaap:普通股成员2024-09-300001447051us-gaap:普通股成员2024-06-300001447051us-gaap:普通股成员2023-12-310001447051us-gaap:普通股成员2023-09-300001447051us-gaap:普通股成员2023-06-300001447051us-gaap:普通股成员2022-12-310001447051tbnk : 2019年股权激励计划成员2024-09-300001447051tbnk : 基于业绩条件的绩效股票成员2024-09-300001447051us-gaap:限制性股票成员2023-12-310001447051tbnk : 基于业绩条件的绩效股票成员2023-12-310001447051tbnk : 基于市场条件的绩效股票成员2023-12-310001447051us-gaap:限制性股票成员2023-09-300001447051tbnk : 基于业绩条件的绩效股票成员2023-09-300001447051tbnk : 基于市场条件的绩效股票成员2023-09-300001447051us-gaap:受限股票成员2022-12-310001447051tbnk : 基于业绩条件的利润分享股份成员2022-12-310001447051tbnk : 基于市场条件的利润分享股份成员2022-12-310001447051us-gaap:受限股票成员2023-01-012023-09-300001447051tbnk : 基于业绩条件的利润分享股份成员2023-01-012023-09-300001447051tbnk : 基于市场条件的利润分享股份成员2023-01-012023-09-300001447051tbnk : 2010年股权激励计划成员美国通用会计准则：股份补偿奖励第一批次成员2024-01-012024-09-300001447051tbnk : 到期少于一年会员2024-09-300001447051tbnk : 到期一年到两年会员2023-12-310001447051tbnk : 到期少于一年会员2023-12-310001447051us-gaap:限制性股票会员2024-01-012024-09-300001447051tbnk : 贷款和存款账户的服务费用会员2024-07-012024-09-300001447051tbnk : 其他产品和服务会员2024-07-012024-09-300001447051tbnk : 贷款和存款账户的服务费用会员2024-01-012024-09-300001447051tbnk : 其他产品和服务会员2024-01-012024-09-300001447051tbnk : 贷款和存款账户的服务费用会员2023-07-012023-09-300001447051tbnk : 其他产品和服务会员2023-07-012023-09-300001447051tbnk : 贷款和存款账户的服务费用会员2023-01-012023-09-300001447051tbnk : 其他产品和服务会员2023-01-012023-09-300001447051美国会计准则：到期日超过90天成员2024-01-012024-09-300001447051SRT：执行官成员tbnk : 地区储蓄银行非合格补充员工股票拥有计划会员2024-07-012024-09-300001447051srt : 高级管理人员会员tbnk : 领土储蓄银行非合格补充员工股票拥有计划成员2024-01-012024-09-300001447051srt : 高级职员成员tbnk : 领土储蓄银行非合格补充员工股票拥有计划成员2023-07-012023-09-300001447051srt : 高级职员成员tbnk : 领土储蓄银行非合格补充员工股票拥有计划成员2023-01-012023-09-300001447051us-gaap: 累计其他综合收益成员2024-07-012024-09-300001447051us-gaap: 累计未实现投资收益损失成员2024-07-012024-09-300001447051us-gaap: 累计其他综合收益成员2024-01-012024-09-300001447051us-gaap:累计未实现投资收益损失成员2024-01-012024-09-300001447051us-gaap:累计其他综合收益成员2023-07-012023-09-300001447051us-gaap:累计未实现投资收益损失成员2023-07-012023-09-300001447051us-gaap:累计其他综合收益成员2023-01-012023-09-300001447051us-gaap:累计未实现投资收益损失成员2023-01-012023-09-300001447051us-gaap：家庭资产成员美元指数-金融资产-不过期成员2024-09-300001447051tbnk : 一至四家庭抵押贷款成员美国会计准则：融资应收款项60至89天逾期成员2024-09-300001447051tbnk：一至四人家庭抵押贷款成员融资应收款逾期30至59天成员2024-09-300001447051tbnk：一至四人家庭抵押贷款成员美国通用会计准则：逾期的金融资产成员2024-09-300001447051tbnk：一至四人家庭抵押贷款成员us-gaap：金融资产未逾期成员2024-09-300001447051tbnk：多家庭抵押贷款成员us-gaap:未到期金融资产成员2024-09-300001447051tbnk : 存款账户贷款成员us-gaap:未到期金融资产成员2024-09-300001447051tbnk : 消费及其他贷款成员us-gaap:融资应收账款逾期30到59天成员2024-09-300001447051tbnk : 消费及其他贷款成员us-gaap:逾期金融资产成员2024-09-300001447051tbnk : 消费及其他贷款成员us-gaap:金融资产未到期成员2024-09-300001447051tbnk : 建设商业及其他抵押贷款成员us-gaap:金融资产未到期成员2024-09-300001447051us-gaap:融资应收款60到89天逾期成员2024-09-300001447051us-gaap:融资应收款30到59天逾期成员2024-09-300001447051us-gaap:金融资产逾期成员2024-09-300001447051us-gaap:金融资产未到期成员2024-09-300001447051us-gaap:房屋净值成员us-gaap:未到期金融资产成员2023-12-310001447051tbnk : 一至四家庭抵押贷款成员融资应收账款逾期90天以上成员2023-12-310001447051tbnk : 一至四家庭抵押贷款成员us-gaap:融资应收款逾期30至59天成员2023-12-310001447051tbnk : 一至四家庭抵押贷款成员us-gaap:逾期金融资产成员2023-12-310001447051tbnk : 一至四家庭抵押贷款成员us-gaap:未逾期金融资产成员2023-12-310001447051tbnk : 多户家庭抵押贷款成员us-gaap:未逾期金融资产成员2023-12-310001447051tbnk : 存款帐户贷款成员us-gaap:未逾期金融资产成员2023-12-310001447051tbnk : 消费及其他贷款成员us-gaap:逾期30至59天的融资应收款成员2023-12-310001447051tbnk : 消费及其他贷款成员us-gaap:逾期金融资产成员2023-12-310001447051tbnk : 消费及其他贷款成员us-gaap:未逾期金融资产成员2023-12-310001447051tbnk : 建设商业及其他抵押贷款成员us-gaap:未逾期金融资产成员2023-12-310001447051us-gaap:融资应收款逾期90天或以上成员2023-12-310001447051us-gaap:融资应收款逾期30到59天成员2023-12-310001447051us-gaap:逾期金融资产成员2023-12-310001447051us-gaap:未到期金融资产成员2023-12-310001447051美元指数-住宅组合部分成员tbnk : 一到四家庭抵押贷款成员2024-09-300001447051us-gaap:住宅投资组合细分成员2024-01-012024-09-300001447051us-gaap:住宅投资组合细分成员2023-01-012023-09-300001447051作为抵押物和权利成员的资产存款2024-09-300001447051us-gaap:以权利担保的资产成员tbnk : 联邦储备银行贴现窗口成员2024-09-300001447051us-gaap:作为抵押物的资产与权利成员tbnk : 联邦储备银行银行定期融资项目成员2024-09-300001447051us-gaap:作为抵押物的资产与权利成员us-gaap:存款成员2023-12-310001447051us-gaap:作为抵押物的资产与权利成员tbnk : 联邦储备银行贴现窗口成员2023-12-310001447051us-gaap:作为抵押物的资产与权利成员tbnk : 联邦储备银行银行定期融资计划成员2023-12-310001447051tbnk : 多家庭抵押贷款成员2024-09-300001447051tbnk : 存款账户贷款成员2024-09-300001447051tbnk : 建筑商业及其他抵押贷款成员2024-09-300001447051tbnk : 多家庭抵押贷款成员2023-12-310001447051tbnk : 存款账户贷款成员2023-12-310001447051tbnk : 建筑商业及其他抵押贷款成员2023-12-310001447051tbnk : 一至四家庭抵押贷款成员美国通用会计准则：房地产贷款成员2024-09-300001447051tbnk : 多家庭抵押贷款成员us-gaap:房地产贷款成员2024-09-300001447051tbnk : 家庭净值贷款和信用额度融资应收款成员us-gaap:房地产贷款成员2024-09-300001447051tbnk : 存款账户贷款成员tbnk : 其他贷款类别成员2024-09-300001447051tbnk : 消费者和其他贷款成员tbnk : 其他贷款类成员2024-09-300001447051tbnk : 建筑商业及其他抵押贷款成员us-gaap:不动产贷款成员2024-09-300001447051us-gaap:不动产贷款成员2024-09-300001447051tbnk : 其他融资应收款成员2024-09-300001447051tbnk : 一至四户家庭抵押贷款成员us-gaap:不动产贷款成员2023-12-310001447051tbnk : 多户住宅抵押贷款成员us-gaap:房地产贷款成员2023-12-310001447051tbnk : 房屋净值贷款及信用线路融资应收款成员us-gaap:房地产贷款成员2023-12-310001447051tbnk : 存款账户贷款成员tbnk : 其他贷款类别成员2023-12-310001447051tbnk : 消费贷款及其他贷款成员tbnk : 其他贷款类别成员2023-12-310001447051tbnk : 建设商业及其他抵押贷款成员us-gaap:不动产贷款成员2023-12-310001447051us-gaap:不动产贷款成员2023-12-310001447051tbnk : 其他融资应收款成员2023-12-310001447051tbnk : 2024年度成员tbnk : 存款账户贷款成员2024-07-012024-09-300001447051tbnk : 前几年成员tbnk : 一至四家庭抵押贷款成员2024-07-012024-09-300001447051tbnk : 2024年度成员2024-07-012024-09-300001447051tbnk : 之前的年份会员2024-07-012024-09-300001447051tbnk : 一至四家庭抵押贷款会员2024-07-012024-09-300001447051tbnk : 存款账户贷款会员2024-07-012024-09-300001447051tbnk : 2024年会员tbnk : 存款账户贷款会员2024-01-012024-09-300001447051tbnk : 2023年会员tbnk : 存款账户贷款会员2024-01-012024-09-300001447051tbnk : 2023年会员tbnk : 消费和其他贷款成员2024-01-012024-09-300001447051tbnk : 过去年份成员tbnk : 一至四家庭抵押贷款成员2024-01-012024-09-300001447051tbnk : 过去年份成员tbnk : 消费和其他贷款成员2024-01-012024-09-300001447051tbnk : 2024年成员2024-01-012024-09-300001447051tbnk : 2023年成员2024-01-012024-09-300001447051tbnk : 过去年份成员2024-01-012024-09-300001447051tbnk : 一到四家庭抵押贷款会员2024-01-012024-09-300001447051tbnk : 存款账户贷款会员2024-01-012024-09-300001447051tbnk : 消费及其他贷款会员2024-01-012024-09-300001447051tbnk : 2023年会员tbnk : 存款账户贷款会员2023-07-012023-09-300001447051tbnk : 2023年会员tbnk : 消费及其他贷款会员2023-07-012023-09-300001447051tbnk : 2019年会员tbnk : 一至四户家庭抵押贷款会员2023-07-012023-09-300001447051tbnk : 往年会员tbnk : 一至四户家庭抵押贷款会员2023-07-012023-09-300001447051tbnk : 2023年会员2023-07-012023-09-300001447051tbnk : 2019年会员2023-07-012023-09-300001447051tbnk : 往年会员2023-07-012023-09-300001447051tbnk : 一至四户家庭抵押贷款会员2023-07-012023-09-300001447051tbnk : 存款账户贷款会员2023-07-012023-09-300001447051tbnk : 消费者和其他贷款会员2023-07-012023-09-300001447051tbnk : 2023年会员tbnk : 存款账户贷款会员2023-01-012023-09-300001447051tbnk : 2023年会员tbnk : 消费者和其他贷款会员2023-01-012023-09-300001447051tbnk : 2019年会员tbnk : 1到4家庭抵押贷款会员2023-01-012023-09-300001447051tbnk : 2019年会员tbnk : 消费及其他贷款成员2023-01-012023-09-300001447051tbnk : 之前的年份成员tbnk : 一至四家庭抵押贷款成员2023-01-012023-09-300001447051tbnk : 2023年成员2023-01-012023-09-300001447051tbnk : 2019年成员2023-01-012023-09-300001447051tbnk : 之前的年份成员2023-01-012023-09-300001447051tbnk : 一至四家庭抵押贷款成员2023-01-012023-09-300001447051tbnk : 存款账户贷款成员2023-01-012023-09-300001447051tbnk : 消费者和其他贷款成员2023-01-012023-09-300001447051US-GAAP：房地产成员2024-06-300001447051us-gaap：消费者投资组合分段成员2024-06-300001447051美元指数:商业投资组合部门会员2024-06-3000014470512024-06-300001447051SRT：采纳调整累积效应期会员us-gaap:会计准则更新201613成员us-gaap：未分配的融资应收款成员2023-09-300001447051srt : 采用调整的累计效果期成员us-gaap:会计准则更新201613成员us-gaap:房地产成员2023-09-300001447051srt : 采用调整的累计影响期间成员us-gaap:会计准则更新201613成员us-gaap:消费者投资组合细分成员2023-09-300001447051srt : 采用调整的累计影响期间成员us-gaap:会计准则更新201613成员us-gaap:商业投资组合细分成员2023-09-300001447051srt : 采用调整的累积效应期成员us-gaap:会计准则更新201613成员2023-09-300001447051us-gaap:房地产成员2023-09-300001447051us-gaap:消费者投资组合细分成员2023-09-300001447051us-gaap:商业投资组合细分成员2023-09-300001447051us-gaap:房地产成员2023-06-300001447051us-gaap:消费者投资组合细分成员2023-06-300001447051us-gaap:商业投资组合细分成员2023-06-3000014470512023-06-300001447051us-gaap:未分配融资应收款成员2022-12-310001447051us-gaap:房地产成员2022-12-310001447051us-gaap:消费组合细分成员2022-12-310001447051us-gaap:商业组合细分成员2022-12-310001447051us-gaap:房地产成员美国会计准则：融资应收款项60至89天逾期成员2024-09-300001447051us-gaap:房地产成员融资应收款逾期30至59天成员2024-09-300001447051us-gaap:房地产成员美元指数-金融资产-不过期成员2024-09-300001447051us-gaap:消费组合细分成员us-gaap:融资应收款逾期30到59天成员2024-09-300001447051us-gaap:消费组合细分成员us-gaap:财务资产未逾期成员2024-09-300001447051us-gaap:商业组合细分成员us-gaap:财务资产未逾期成员2024-09-300001447051us-gaap:房地产成员2024-09-300001447051us-gaap:消费组合Segment成员2024-09-300001447051us-gaap:商业组合Segment成员2024-09-300001447051us-gaap:房地产成员融资应收账款逾期90天以上成员2023-12-310001447051us-gaap:房地产成员us-gaap:融资应收账款30至59天逾期成员2023-12-310001447051us-gaap:房地产成员us-gaap:未逾期金融资产成员2023-12-310001447051us-gaap:消费者组合细分成员us-gaap:逾期30-59天融资应收款成员2023-12-310001447051us-gaap:消费者组合细分成员us-gaap:未逾期金融资产成员2023-12-310001447051us-gaap:商业组合细分成员us-gaap:未逾期金融资产成员2023-12-310001447051us-gaap:房地产成员2023-12-310001447051us-gaap:消费者投资组合细分成员2023-12-310001447051us-gaap:商业投资组合细分成员2023-12-310001447051美元指数：得梅因联邦住房贷款银行成员2024-09-300001447051srt : 费城地区联邦住房贷款银行成员2023-12-310001447051tbnk : 领土储蓄银行2010年修订和重新制定的员工持股计划和信托成员2024-07-012024-09-300001447051tbnk : 领土储蓄银行2010年修订和重新制定的员工持股计划和信托成员2023-07-012023-09-300001447051tbnk : 领土储蓄银行2010年修订和重新制定的员工持股计划和信托成员2023-01-012023-09-300001447051tbnk : 基于绩效条件的绩效股份成员2024-01-012024-09-300001447051tbnk : 基于市场条件的业绩股份成员2024-01-012024-09-300001447051tbnk : 基于业绩的限制性股票单位成员2024-01-012024-09-300001447051srt : 最多成员tbnk : 基于业绩的限制性股票单位成员2024-09-300001447051us-gaap:限制性股票成员2024-09-300001447051tbnk : 基于市场条件的业绩股份成员2024-09-300001447051us-gaap:留存收益会员2024-07-012024-09-300001447051us-gaap: 留存收益成员2024-01-012024-09-300001447051us-gaap:留存收益成员2023-07-012023-09-300001447051tbnk : 2010年股权激励计划成员2024-01-012024-09-300001447051tbnk : 员工持股计划Esop及员工持股计划Esop恢复计划成员2024-01-012024-09-300001447051tbnk : Territorial Savings Bank 2010年修订和重述的员工持股计划及信托成员us-gaap：PrimeRate会员2024-01-012024-09-300001447051tbnk : O 2024年第二季度分红成员us-gaap:后续事件会员2024-10-252024-10-2500014470512023-09-3000014470512022-12-310001447051us-gaap:二级公允价值输入成员us-gaap: 公允价值计量递延成员2024-09-300001447051us-gaap:公允价值计量周期性成员2024-09-300001447051us-gaap:公允价值输入等级2成员us-gaap:公允价值计量周期性成员2023-12-310001447051us-gaap:公允价值计量周期性成员2023-12-310001447051美元指数-由美国政府赞助企业发布的抵押支持的证券成员2024-09-300001447051us-gaap:美国政府赞助企业发行的抵押贷款支持证券成员2023-12-310001447051srt : 加权平均成员tbnk : 到期少于一年的会员2024-09-300001447051srt : 加权平均会员2024-09-300001447051srt : 加权平均会员tbnk : 到期一到两年的会员2023-12-310001447051srt : 加权平均会员tbnk : 到期少于一年的会员2023-12-310001447051srt : 加权平均会员2023-12-310001447051美国会计准则：到期日超过90天成员2024-09-300001447051us-gaap: 公允价值非经常性计量成员2024-09-300001447051tbnk : 员工持股计划会员2024-07-012024-09-300001447051tbnk : 员工持股计划会员2024-01-012024-09-300001447051tbnk : 员工持股计划会员2023-07-012023-09-300001447051tbnk : 员工持股计划会员2023-01-012023-09-300001447051us-gaap:额外实收资本成员2024-07-012024-09-300001447051us-gaap: 额外支付股本会员2024-01-012024-09-300001447051us-gaap: 额外支付股本会员2023-07-012023-09-300001447051us-gaap:额外实收资本成员2023-01-012023-09-300001447051us-gaap:留存收益成员2023-01-012023-09-300001447051tbnk : 住宅抵押贷款出售成员2024-09-300001447051srt : 最大成员2024-09-300001447051us-gaap:公允价值输入第一级成员美元指数:公允价值披露的估计2024-09-300001447051us-gaap:公允价值输入等级1成员us-gaap:公允价值估算公允价值披露成员2023-12-310001447051us-gaap:FairValueInputsLevel3Memberus-gaap:公允价值估计公允价值披露成员2024-09-300001447051us-gaap:公允价值输入级别3成员us-gaap:公允价值估计公允价值披露成员2023-12-310001447051us-gaap：家庭资产成员2024-09-300001447051tbnk: 一到四家庭抵押贷款成员2024-09-300001447051tbnk: 消费者及其他贷款成员2024-09-300001447051us-gaap: 房屋净值成员2023-12-310001447051tbnk : 一至四户家庭抵押贷款成员2023-12-310001447051tbnk : 消费者和其他贷款成员2023-12-310001447051美元指数-住宅组合部分成员2024-09-300001447051us-gaap:住宅投资组合细分成员2023-12-310001447051us-gaap:房地产成员2024-07-012024-09-300001447051us-gaap:消费者投资组合细分成员2024-07-012024-09-300001447051us-gaap:商业投资组合细分成员2024-07-012024-09-300001447051us-gaap:房地产成员2024-01-012024-09-300001447051us-gaap:消费者投资组合部门成员2024-01-012024-09-300001447051us-gaap:商业投资组合部门成员2024-01-012024-09-300001447051us-gaap:房地产成员2023-07-012023-09-300001447051us-gaap:消费者投资组合部门成员2023-07-012023-09-300001447051us-gaap:商业投资组合部门成员2023-07-012023-09-300001447051us-gaap:房地产成员2023-01-012023-09-300001447051us-gaap:消费者投资组合部门成员2023-01-012023-09-300001447051us-gaap:商业投资组合部门成员2023-01-012023-09-300001447051srt : 德莫因联邦住房贷款银行成员tbnk : 领土储蓄银行成员2024-09-300001447051srt : 德莫因联邦住房贷款银行成员tbnk : 领土储蓄银行成员2023-12-310001447051tbnk : 领土储蓄银行2010年修订和重述的员工持股计划及信托成员2009-01-012009-01-010001447051tbnk : 领土储蓄银行2010年修订和重述的员工持股计划及信托成员2024-01-012024-09-300001447051tbnk : 领土储蓄银行2010年修订和重述的员工持股计划及信托成员2009-01-0100014470512023-07-012023-09-3000014470512023-01-012023-12-310001447051us-gaap:普通股成员2024-07-012024-09-300001447051us-gaap:普通股成员2024-01-012024-09-300001447051us-gaap:普通股成员2023-07-012023-09-300001447051us-gaap:普通股成员2023-01-012023-09-3000014470512023-01-012023-09-300001447051us-gaap:公允价值输入等级2成员us-gaap:公允价值估计公允价值披露成员2024-09-300001447051us-gaap:公允价值估计公允价值披露成员2024-09-300001447051美元指数-携带报告金额公允价值披露成员2024-09-3000014470512024-09-300001447051us-gaap:公允价值输入等级2成员美元指数:公允价值披露的估计2023-12-310001447051us-gaap:公允价值估计公允价值披露成员2023-12-310001447051美元指数-携带报告金额公允价值披露成员2023-12-3100014470512023-12-3100014470512024-07-012024-09-3000014470512024-10-3100014470512024-01-012024-09-30xbrli:sharesiso4217:美元指数tbnk:安防-半导体xbrli：纯形tbnk:贷款tbnk:子公司iso4217:美元指数xbrli:股份

目录

​

​

美国

证券交易委员会

华盛顿特区20549

​

表格 10-Q

​

☒  根据1934年证券交易所法案第13或15(d)条的季报告

​

截至本季结束 2024年9月30日

​

或

​

☐根据1934年证券交易法第13或15(d)条的过渡报告。

​

在从 过渡期间至 之间

​

委员会档案号码 001-34403

​

territorial bancorp inc

(注册人在公司章程中指定的正确名称)

​

马里兰州。

​

26-4674701

（注册／设立之）州或其他辖区

​

（联邦税号）

​

​

1003 Bishop Street，Pauahi塔架500套房, 檀香山, 夏威夷

​

96813

（总部地址）

​

(邮递区号)

​

(808) 946-1400

(注册人电话号码，包括区号)

​

不适用

(若自上次报告以来变更过名称、地址和正式财政年度，请注明前名、前址和前财政年度)

​

根据法案第12(b)条规定注册的证券：

​

​

​

​

每种类别的名称

交易标的

每个注册交易所的名称

普通股

territorial bancorp inc

纳斯达克股票交易所有限责任公司

​

请以核对符号指示，表明登记者(1)在过去12个月期间（或是登记者需要提交此类报告的较短期间内），已依照1934年证券交易所法第13条或第15(d)条的规定提交所有应提交的报告，以及(2)在过去90天内已经受到此类提交要求的规定。Yes ☒ 否 ☐.

​

请在标的旁的核取方块中标示，登记者在过去12个月内是否根据S-t条例第405条的规定，电子提交了每一个互动式数据档案。Yes ☒ 否 ☐.

​

请用√符号表示公司是否为大型加速归档者、加速归档者、非加速归档者、较小型报告公司或新兴成长公司。请参见《交易所法》第120亿2条对「大型加速归档者」、「加速归档者」、「较小型报告公司」和「新兴成长公司」的定义。

​

大型快速申报者☐

​

加速披露人☐

非加速归档人 ☒

​

小型报告公司☒

​

​

新兴成长型公司 ☐

​

如果一家新兴成长型企业，请打勾表示公司已选择不使用扩展过渡期以符合根据《交易所法案》第13(a)条所提供的任何新的或修订财务会计准则。 ☐

​

请勾选表示该注册公司为外壳公司（如风险披露变革法案的第1202条所定义）。是的☐ 否 ☒.

​

于最新合理日期指示每个发行人普通股类别的股份总数： 8,832,210 截至2024年10月31日，每股面值为0.01美元的普通股已发行并流通。

​

​

​

目录

territorial bancorp inc。

​

基本报表10-Q季度报告

​

目录

​

第一部分

​

​

​

ITEm 1.

基本报表

1

ITEm 2.

财务状况和业绩的管理讨论和分析

29

项目 3。

市场风险相关数量和质量的披露

43

项目 4。

控制和程序

44

​

​

​

第二部分

​

ITEm 1.

法律诉讼

45

项目1A.

风险因素

45

ITEm 2.

未注册的股权证券销售、资金用途以及发行人购买股权证券

45

项目 3。

债券不履行标准

45

项目 4。

矿山安全披露

45

条目 5。

其他资讯

45

条目 6。

附件

45

​

​

​

签名

47

​

​

​

目录

部分I

​

项目 1.     基本报表S

​

territorial bancorp inc. 及其子公司

合并资产负债表（未经审计）。

(单位为千美元，除了股份数据以外)

​

​

​

​

​

​

​

​

​

 

 

9月30日，

 

十二月三十一日，

 

 

 

2024

 

2023

 

资产

​

​

​

​

​

​

​

现金及现金等价物

​

$

143,128

​

$

126,659

​

可供出售的投资证券，以公允价值计量

​

​

19,920

​

​

20,171

​

持有至到期的投资证券，按摊销成本计算（公允价值为 $552,222 和 $568,128 于2024年9月30日和2023年12月31日分别

​

 

654,349

​

 

685,728

​

应收贷款

​

 

1,287,688

​

 

1,308,552

​

信用损失准备

​

​

(5,055)

​

​

(5,121)

​

应收贷款，扣除信用损失准备

​

 

1,282,633

​

 

1,303,431

​

联邦住房贷款银行股票，成本为

​

 

9,307

​

 

12,192

​

联邦储备银行股票，成本计价

​

​

3,187

​

​

3,180

​

应计利息应收帐款

​

 

6,056

​

 

6,105

​

房地产及设备，净值

​

 

7,257

​

 

7,185

​

使用权资产，净额

​

​

11,613

​

​

12,371

​

银行拥有的寿险

​

 

49,388

​

 

48,638

​

所得税应收

​

​

1,832

​

​

344

​

递延所得税资产，净额

​

 

2,465

​

 

2,457

​

预付费用及其他资产

​

 

7,297

​

 

8,211

​

总资产

​

$

2,198,432

​

$

2,236,672

​

​

​

​

​

​

​

​

​

负债及股东权益

​

​

​

​

​

​

​

负债:

​

​

​

​

​

​

​

存款

​

$

1,670,281

​

$

1,636,604

​

来自联邦住房贷款银行的贷款

​

 

177,000

​

 

242,000

​

来自联邦储备银行的贷款

​

​

50,000

​

​

50,000

​

根据协议回购的证券出售

​

 

10,000

​

 

10,000

​

应付帐款和应计费用

​

 

22,176

​

 

23,334

​

租赁负债

​

​

17,090

​

​

17,297

​

借款人提前支付的税款和保险费用

​

 

3,148

​

 

6,351

​

总负债

​

 

1,949,695

​

 

1,985,586

​

​

​

​

​

​

​

​

​

承诺及或有负债：（注16）

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

股东权益：

​

​

​

​

​

​

​

优先股，面额; 授权 $0.01 股票授权数为。 50,000,000 股份， no 发行的分享或 流通在外的股份

​

 

—

​

 

—

​

普通股, $0.01 股票授权数为。 100,000,000 股份授权数: 发行 和 流通在外的股份 8,832,210 和 8,826,613 截至2024年9月30日及2023年12月31日时之股数

​

 

88

​

 

88

​

资本公积额额外增资

​

 

48,163

​

 

48,022

​

未赚取的员工持股计划股份

​

 

(2,079)

​

 

(2,447)

​

保留盈余

​

 

208,504

​

 

211,644

​

累积其他全面亏损

​

 

(5,939)

​

 

(6,221)

​

总股东权益

​

 

248,737

​

 

251,086

​

总负债及股东权益

​

$

2,198,432

​

$

2,236,672

​

​

请查看附带的基本报表注记。

​

1

Table of Contents

TERRITORIAL BANCORP INC. AND SUBSIDIARIES

Consolidated Statements of Operations (Unaudited)

(Dollars in thousands, except per share data)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2024

 

2023

 

2024

 

2023

 

Interest income:

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans

​

$

12,229

​

$

11,886

​

$

36,540

​

$

35,037

​

Investment securities

​

​

4,183

​

​

4,447

​

​

12,753

​

​

13,512

​

Other investments

​

 

1,901

​

 

1,051

​

 

5,104

​

 

2,848

​

Total interest income

​

 

18,313

​

 

17,384

​

 

54,397

​

 

51,397

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest expense:

​

​

​

​

​

​

​

​

​

​

​

​

​

Deposits

​

 

8,469

​

 

5,408

​

 

22,658

​

 

13,261

​

Advances from the Federal Home Loan Bank

​

 

1,714

​

 

1,896

​

 

5,330

​

 

4,782

​

Advances from the Federal Reserve Bank

​

​

600

​

​

—

​

​

1,789

​

​

—

​

Securities sold under agreements to repurchase

​

 

46

​

 

46

​

 

137

​

 

137

​

Total interest expense

​

 

10,829

​

 

7,350

​

 

29,914

​

 

18,180

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net interest income

​

 

7,484

​

 

10,034

​

 

24,483

​

 

33,217

​

Provision (reversal of provision) for credit losses

​

 

29

​

 

(259)

​

 

22

​

 

(147)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net interest income after provision (reversal of provision) for credit losses

​

 

7,455

​

 

10,293

​

 

24,461

​

 

33,364

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Noninterest income:

​

​

​

​

​

​

​

​

​

​

​

​

​

Service and other fees

​

 

273

​

 

298

​

 

885

​

 

1,022

​

Income on bank-owned life insurance

​

 

255

​

 

218

​

 

750

​

 

628

​

Net gain on sale of loans

​

 

19

​

 

—

​

 

19

​

 

10

​

Other

​

 

69

​

 

73

​

 

215

​

 

208

​

Total noninterest income

​

 

616

​

 

589

​

 

1,869

​

 

1,868

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Noninterest expense:

​

​

​

​

​

​

​

​

​

​

​

​

​

Salaries and employee benefits

​

 

4,899

​

 

5,176

​

 

14,606

​

 

15,723

​

Occupancy

​

 

1,813

​

 

1,819

​

 

5,319

​

 

5,201

​

Equipment

​

 

1,335

​

 

1,263

​

 

3,987

​

 

3,878

​

Federal deposit insurance premiums

​

 

392

​

 

246

​

 

1,281

​

 

737

​

Other general and administrative expenses

​

 

1,561

​

 

1,163

​

 

4,851

​

 

3,251

​

Total noninterest expense

​

 

10,000

​

 

9,667

​

 

30,044

​

 

28,790

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(Loss) income before income taxes

​

 

(1,929)

​

 

1,215

​

 

(3,714)

​

 

6,442

​

Income tax (benefit) expense

​

 

(611)

​

 

335

​

 

(1,139)

​

 

1,749

​

Net (loss) income

​

$

(1,318)

​

$

880

​

$

(2,575)

​

$

4,693

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Basic (loss) earnings per share

​

$

(0.15)

​

$

0.10

​

$

(0.30)

​

$

0.54

​

Diluted (loss) earnings per share

​

$

(0.15)

​

$

0.10

​

$

(0.30)

​

$

0.53

​

Cash dividends declared per common share

​

$

0.01

​

$

0.23

​

$

0.07

​

$

0.69

​

Basic weighted-average shares outstanding

​

 

8,618,155

​

 

8,577,632

​

 

8,604,082

​

 

8,656,915

​

Diluted weighted-average shares outstanding

​

 

8,618,155

​

 

8,610,289

​

 

8,604,082

​

 

8,705,784

​

​

See accompanying Notes to Consolidated Financial Statements.

​

2

Table of Contents

TERRITORIAL BANCORP INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

(Dollars in thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2024

    

2023

 

2024

 

2023

 

Net (loss) income

​

$

(1,318)

​

$

880

​

$

(2,575)

​

$

4,693

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Other comprehensive income (loss), net of tax:

​

​

​

​

​

​

​

​

​

​

​

​

​

Unrealized gain (loss) on securities

​

​

793

​

 

(780)

​

 

282

​

 

(757)

​

Total other comprehensive income (loss), net of tax

​

 

793

​

 

(780)

​

 

282

​

 

(757)

​

Comprehensive (loss) income

​

$

(525)

​

$

100

​

$

(2,293)

​

$

3,936

​

​

See accompanying Notes to Consolidated Financial Statements.

​

3

Table of Contents

TERRITORIAL BANCORP INC. AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity (Unaudited)

(Dollars in thousands, except per share data)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

Common

 

 

 

 

Additional

 

Unearned

 

 

 

 

Other

 

Total

 

 

Shares

 

Common

 

Paid-in

 

ESOP

 

Retained

 

Comprehensive

 

Stockholders’

 

 

Outstanding

 

Stock

 

Capital

 

Shares

 

Earnings

 

Loss

 

Equity

Balance at June 30, 2024

​

8,832,210

​

$

88

​

$

48,105

​

$

(2,203)

​

$

209,909

​

$

(6,732)

​

$

249,167

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net loss

​

—

​

 

—

​

​

—

​

​

—

​

​

(1,318)

​

​

—

​

​

(1,318)

Other comprehensive income

​

—

​

 

—

​

​

—

​

​

—

​

​

—

​

​

793

​

​

793

Cash dividends declared ($0.01 per share)

​

—

​

 

—

​

​

—

​

​

—

​

​

(87)

​

​

—

​

​

(87)

Share-based compensation

​

—

​

 

—

​

​

65

​

​

—

​

​

—

​

​

—

​

​

65

Allocation of 12,233 ESOP shares

​

—

​

 

—

​

​

(7)

​

​

124

​

​

—

​

​

—

​

​

117

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balances at September 30, 2024

​

8,832,210

​

$

88

​

$

48,163

​

$

(2,079)

​

$

208,504

​

$

(5,939)

​

$

248,737

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balances at December 31, 2023

​

8,826,613

​

$

88

​

$

48,022

​

$

(2,447)

​

$

211,644

​

$

(6,221)

​

$

251,086

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net loss

​

—

​

 

—

​

​

—

​

​

—

​

​

(2,575)

​

​

—

​

​

(2,575)

Other comprehensive income

​

—

​

 

—

​

​

—

​

​

—

​

​

—

​

​

282

​

​

282

Cash dividends declared ($0.07 per share)

​

—

​

 

—

​

​

—

​

​

—

​

​

(565)

​

​

—

​

​

(565)

Share-based compensation

​

12,178

​

 

—

​

​

231

​

​

—

​

​

—

​

​

—

​

​

231

Allocation of 36,700 ESOP shares

​

—

​

 

—

​

​

(39)

​

​

368

​

​

—

​

​

—

​

​

329

Repurchase of shares of common stock

​

(6,556)

​

 

—

​

​

(51)

​

​

—

​

​

—

​

​

—

​

​

(51)

Cancelled shares

​

(25)

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balances at September 30, 2024

​

8,832,210

​

$

88

​

$

48,163

​

$

(2,079)

​

$

208,504

​

$

(5,939)

​

$

248,737

​

See accompanying Notes to Consolidated Financial Statements.

​

4

Table of Contents

TERRITORIAL BANCORP INC. AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity (Unaudited)

(Dollars in thousands, except per share data)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

Common

 

 

 

 

Additional

 

Unearned

 

 

 

 

Other

 

Total

 

 

 

Shares

 

Common

 

Paid-in

 

ESOP

 

Retained

 

Comprehensive

 

Stockholders’

 

 

 

Outstanding

 

Stock

 

Capital

 

Shares

 

Earnings

 

Loss

 

Equity

 

Balance at June 30, 2023

​

8,848,511

​

$

88

​

$

48,110

​

$

(2,691)

​

$

212,848

​

$

(7,721)

​

$

250,634

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net income

​

—

​

 

—

​

​

—

​

​

—

​

​

880

​

​

—

​

​

880

​

Other comprehensive loss

​

—

​

 

—

​

​

—

​

​

—

​

​

—

​

​

(780)

​

​

(780)

​

Cash dividends declared ($0.23 per share)

​

—

​

 

—

​

​

—

​

​

—

​

​

(1,987)

​

​

—

​

​

(1,987)

​

Share-based compensation

​

—

​

 

—

​

​

88

​

​

—

​

​

—

​

​

—

​

​

88

​

Allocation of 12,233 ESOP shares

​

—

​

 

—

​

​

14

​

​

122

​

​

—

​

​

—

​

​

136

​

Repurchase of shares of common stock

​

(21,898)

​

 

—

​

​

(221)

​

​

—

​

​

—

​

​

—

​

​

(221)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balances at September 30, 2023

​

8,826,613

​

$

88

​

$

47,991

​

$

(2,569)

​

$

211,741

​

$

(8,501)

​

$

248,750

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balances at December 31, 2022

​

9,071,076

​

$

91

​

$

51,825

​

$

(2,936)

​

$

215,314

​

$

(7,744)

​

$

256,550

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net income

​

—

​

 

—

​

​

—

​

​

—

​

​

4,693

​

​

—

​

​

4,693

​

Other comprehensive loss

​

—

​

 

—

​

​

—

​

​

—

​

​

—

​

​

(757)

​

​

(757)

​

Cumulative change in accounting principle (1)

​

​

​

​

​

​

​

​

​

​

​

​

​

(2,319)

​

​

​

​

​

(2,319)

​

Cash dividends declared ($0.69 per share)

​

—

​

 

—

​

​

—

​

​

—

​

​

(5,947)

​

​

—

​

​

(5,947)

​

Share-based compensation

​

12,729

​

 

—

​

​

90

​

​

—

​

​

—

​

​

—

​

​

90

​

Allocation of 36,700 ESOP shares

​

—

​

 

—

​

​

221

​

​

367

​

​

—

​

​

—

​

​

588

​

Repurchase of shares of common stock

​

(257,192)

​

​

(3)

​

​

(4,145)

​

​

—

​

​

—

​

​

—

​

​

(4,148)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balances at September 30, 2023

​

8,826,613

​

$

88

​

$

47,991

​

$

(2,569)

​

$

211,741

​

$

(8,501)

​

$

248,750

​

​

(1)Represents the impact of the adoption of Accounting Standard Update 2016-13.

​

See accompanying Notes to Consolidated Financial Statements.

​

5

Table of Contents

TERRITORIAL BANCORP INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)

(Dollars in thousands)

​

​

​

​

​

​

​

​

​

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2024

 

2023

 

Cash flows from operating activities:

​

​

​

​

​

​

​

Net (loss) income

​

$

(2,575)

​

$

4,693

​

Adjustments to reconcile net (loss) income to net cash (used in) from operating activities:

​

​

​

​

​

​

​

Provision (reversal of provision) for credit losses

​

 

22

​

 

(147)

​

Depreciation and amortization

​

 

711

​

 

839

​

Deferred income tax benefit

​

 

(111)

​

 

(492)

​

Accretion of fees, discounts, and premiums, net

​

 

(312)

​

 

(267)

​

Amortization of right-of-use asset

​

​

2,120

​

​

2,124

​

Origination of loans held for sale

​

 

(861)

​

 

(813)

​

Proceeds from sales of loans held for sale

​

 

880

​

 

823

​

Gain on sale of loans, net

​

 

(19)

​

 

(10)

​

Net loss on disposal of premises and equipment

​

​

—

​

​

5

​

ESOP expense

​

 

329

​

 

588

​

Share-based compensation expense

​

 

231

​

 

90

​

Net increase in accrued interest receivable

​

 

(21)

​

 

(62)

​

Income on bank-owned life insurance

​

 

(750)

​

 

(629)

​

Net decrease (increase) in prepaid expenses and other assets

​

 

914

​

 

(103)

​

Net (decrease) increase in accounts payable and accrued expenses

​

 

(1,157)

​

 

137

​

Net (decrease) increase in lease liability

​

​

(1,569)

​

​

1,500

​

Net decrease in advance payments by borrowers for taxes and insurance

​

 

(3,203)

​

 

(2,326)

​

Net decrease in income taxes payable

​

 

(1,488)

​

 

(359)

​

​

​

​

​

​

​

​

​

Net cash (used in) from operating activities

​

 

(6,859)

​

 

5,591

​

​

​

​

​

​

​

​

​

Cash flows from investing activities:

​

​

​

​

​

​

​

Purchases of investment securities held to maturity

​

 

—

​

 

(6,693)

​

Principal repayments on investment securities held to maturity

​

 

31,456

​

 

28,900

​

Principal repayments on investment securities available for sale

​

​

674

​

​

686

​

Principal repayments on loans receivable, net of loan originations

​

 

21,043

​

 

(14,516)

​

Purchases of Federal Home Loan Bank stock

​

​

(40)

​

​

(5,887)

​

Proceeds from redemption of Federal Home Loan Bank stock

​

 

2,925

​

 

1,240

​

Purchases of Federal Reserve Bank stock

​

​

(7)

​

​

(8)

​

Proceeds from redemption of Federal Reserve Bank stock

​

​

—

​

​

1

​

Purchases of premises and equipment

​

 

(783)

​

 

(592)

​

​

​

​

​

​

​

​

​

Net cash from investing activities

​

 

55,268

​

 

3,131

​

​

(Continued)

​

6

Table of Contents

TERRITORIAL BANCORP INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)

(Dollars in thousands)

​

​

​

​

​

​

​

​

​

 

 

Nine Months Ended

​

 

 

September 30,

​

 

 

2024

 

2023

​

Cash flows from financing activities:

​

​

​

​

​

​

​

Net increase (decrease) in deposits

​

$

33,677

​

$

(65,139)

​

Proceeds from advances from the Federal Home Loan Bank

​

 

—

​

 

146,000

​

Repayments of advances from the Federal Home Loan Bank

​

 

(65,000)

​

 

(31,000)

​

Proceeds from advances from the Federal Reserve Bank

​

 

100,000

​

 

—

​

Repayments of advances from the Federal Reserve Bank

​

 

(100,000)

​

 

—

​

Purchase of Fed Funds

​

​

—

​

​

20

​

Sale of Fed Funds

​

​

—

​

​

(20)

​

Repurchases of common stock

​

 

—

​

 

(4,026)

​

Cash dividends paid

​

 

(617)

​

 

(5,988)

​

​

​

​

​

​

​

​

​

Net cash (used in) from financing activities

​

 

(31,940)

​

 

39,847

​

​

​

​

​

​

​

​

​

Net change in cash and cash equivalents

​

 

16,469

​

 

48,569

​

​

​

​

​

​

​

​

​

Cash and cash equivalents at beginning of the period

​

 

126,659

​

 

40,553

​

​

​

​

​

​

​

​

​

Cash and cash equivalents at end of the period

​

$

143,128

​

$

89,122

​

​

​

​

​

​

​

​

​

Supplemental disclosure of cash flow information:

​

​

​

​

​

​

​

Cash paid for:

​

​

​

​

​

​

​

Interest on deposits and borrowings

​

$

28,654

​

$

17,405

​

Income taxes

​

 

459

​

 

2,600

​

​

​

​

​

​

​

​

​

Supplemental disclosure of noncash investing and financing activities:

​

​

​

​

​

​

​

Company stock repurchased through stock swap and net settlement transactions

​

$

51

​

$

122

​

Establishment of right-of-use asset, net of incentives and modifications

​

​

1,362

​

​

590

​

Establishment of lease liability, net of modifications

​

​

1,362

​

​

590

​

​

See accompanying Notes to Consolidated Financial Statements.

​

​

7

Table of Contents

TERRITORIAL BANCORP INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

​

(1)      Organization

​

Territorial Bancorp Inc. (the Company) is a Maryland corporation and is the holding company for Territorial Savings Bank (the Bank). Territorial Savings Bank is a Hawaii state-chartered bank headquartered in Honolulu, Hawaii and is a member of the Federal Reserve System. Territorial Savings Bank had one subsidiary, Territorial Financial Services, Inc., that was dissolved during the nine months ended September 30, 2024.

​

(2)    Summary of Significant Accounting Policies  

​

(a)Basis of Presentation

​

The accompanying unaudited interim condensed consolidated financial statements of Territorial Bancorp Inc. have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited interim condensed consolidated financial statements and notes should be read in conjunction with the Company’s consolidated financial statements and notes thereto filed as part of the Annual Report on Form 10-K for the year ended December 31, 2023. In the opinion of management, all adjustments necessary for a fair presentation have been made and consist only of normal recurring adjustments. Interim results of operations are not necessarily indicative of results to be expected for the full year or for any other period. 

​

(b)Allowance of Credit Losses (ACL) on Loans and Securities

​

The current expected credit losses (CECL) accounting standard requires an estimate of the credit losses expected over the life of the financial instrument. The ACL is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the ACL during the period when management deems the loan to be uncollectible and all interest previously accrued but not collected is reversed against the current period ACL.

​

The estimate of expected credit losses is based on information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of financial instruments. Historical loss experience is generally the starting point for estimating expected credit losses. The Company considers whether the historical loss experience should be adjusted for asset specific risk characteristics or current conditions at the reporting date that did not exist over the historical reporting period. These qualitative adjustments can include changes in the economy, loan underwriting standards, and delinquency trends. The Company then considers future economic conditions as part of the one year reasonable and supportable forecast period.

​

Our loan portfolio is segmented into three pools for estimating our allowance for credit losses on loans: real estate, commercial, and consumer loans. They were established upon the adoption of Accounting Standards Update (ASU) 2016-13. Only three pools are used to segment our loan portfolio because loans within the pools share similar risk characteristics and were originated using similar underwriting standards. Loans that do not share similar risk characteristics would be evaluated on an individual basis and excluded from the collective evaluation. Historically, we have disclosed information about our loans and allowance based on class of financing receivable. The portfolio segments align with the class of financing receivables as follows:

​

●Real estate: One- to four-family residential, multi-family residential, and commercial mortgage
●Commercial: Commercial loans other than mortgage loans
●Consumer: Home equity loans, loans on deposit accounts, and all other consumer loans

​

8

Table of Contents

Collateral dependent loans are not considered to share the same risk characteristics with the three pools discussed above. A loan is considered to be collateral dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. For loans which are considered to be collateral dependent, the Company has elected to estimate the expected credit loss based on the fair value of the collateral less selling costs. If the fair value of the collateral less selling costs is less than the loan’s amortized cost basis, the Company records a partial charge-off to reduce the loan’s amortized cost basis for the difference between the collateral fair value less selling costs and the amortized cost basis.

​

The ACL on loans and accrued interest is calculated on a loan by loan basis. If the loan’s amortized cost basis is less than the total present value of cash flows calculated using a discounted cash flow approach, the ACL is equal to the amortized cost basis minus the total present value of cash flows on the loan discounted by the loan’s effective interest rate. The expected cash flows include estimates of loan charge-offs, recoveries, and prepayments. Economic variables which have a strong correlation with our historical loan charge-offs, recoveries, and prepayments are utilized in forecasting loan charge-offs, recoveries, and prepayments during the one year reasonable and supportable forecast period. After the reasonable and supportable forecast period, the historical reversion rate is used to calculate loan charge-offs, recoveries, and prepayments for the remaining expected life of the loan. The reversion rate is based on historical averages and applied on a straight-line basis. Qualitative adjustments may be made to account for current conditions and forward looking events not captured in the quantitative calculation. The forecast and reversion rate utilize historical behavior during select periods of time. Our real estate and consumer loan pools utilize a vintage approach where historical losses, recoveries, and prepayment experience is determined using loans that have originated within a specified period. Our commercial loans utilize a reporting period approach where historical losses, recoveries, and prepayment experience is considered during a selected historical period of time. Off-balance sheet forecasts utilize a reporting period approach.

​

Loans receivable are stated at amortized cost which includes the principal amount outstanding, less the allowance for credit losses, deferred loan origination fees and costs, commitment fees, and cumulative net charge-offs. Interest income on loans receivable is accrued as earned. Accrued interest receivable on loans was $4.4 million and $4.6 million as of September 30, 2024 and December 31, 2023, respectively, and is included in accrued interest receivable on the Consolidated Balance Sheet.

​

The Company determines delinquency status by considering the number of days full payments required by the contractual terms of the loan are past due. The Company has a policy of placing loans on a nonaccrual basis when 90 days or more contractually delinquent or when, in the opinion of management, collection of all or part of the principal balance appears doubtful, unless the loans are well secured and in the process of collection. When a loan is placed on nonaccrual status, all interest previously accrued and not collected is reversed against current period provision for credit losses. For nonaccrual loans, the Company records payments received as a reduction in principal. A nonaccrual loan may be restored to an accrual basis when principal and interest payments are current and full payment of principal and interest is expected.

​

The Company’s off-balance sheet credit exposures are comprised of unfunded portions of existing loans, such as lines of credit and construction loans, and commitments to originate loans that are not conditionally cancellable by the Company.  Under the CECL accounting standard, expected credit losses on these amounts are calculated using a forecasted estimate of the likelihood that funding of the unfunded amount/commitment will occur and the historical reversion rate.  Changes to the reserve for off-balance sheet credit exposures are recorded through increases or decreases to the provision for credit losses on the Consolidated Statements of Operations.  The Company had $900 in reserves for off-balance sheet credit exposures at September 30, 2024 and no reserves for off-balance sheet credit exposures at December 31, 2023.

​

While management utilizes its best judgment and information available, the adequacy of the ACL and the reserve for off-balance sheet credit exposures is determined by certain factors outside of the Company's control, such as the performance of our portfolios, changes in the economic environment including economic uncertainty, changes in interest rates and loan prepayments, and the view of the regulatory authorities toward classification of assets, the level of ACL, and the reserve for off-balance sheet credit exposures. Additionally, the level of ACL and the reserve for off-balance sheet credit exposures may fluctuate based on the balance and mix of the loan portfolio, changes in loan prepayments

9

Table of Contents

and off-balance sheet credit exposures, changes in charge-off rates, and changes in forecasted economic conditions. If actual results differ significantly from our assumptions, our ACL and the reserve for off-balance sheet credit exposures may not be sufficient to cover losses in our loan portfolio, resulting in additions to our ACL and an increase in the provision for credit losses.

​

The Company is required to utilize the CECL methodology to estimate expected credit losses with respect to held-to-maturity (HTM) investment securities. Since all of the Company’s HTM investment securities were issued by U.S. government agencies or U.S. government-sponsored enterprises, which include the explicit and/or implicit guarantee of the U.S. government and have a long history of no credit losses, the Company has not recorded a credit loss on these securities. The unrealized losses on these securities were due to changes in interest rates, relative to when the securities were purchased, and are not due to decreases in the credit quality of the securities.

​

Available for sale (AFS) investment securities in an unrealized loss position are evaluated for impairment. The Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the investment securities amortized cost basis is written down to fair value through income. For AFS debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the investment security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an ACL is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an ACL is recognized in other comprehensive income. The Company has not recorded an ACL related to our AFS investment securities.

​

Changes in the ACL are recorded as a provision (or reversal of provision) for credit losses. Losses are charged against the ACL when management believes the uncollectibility of an AFS security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

​

(3)      Recently Issued and Adopted Accounting Pronouncements

​

In June 2022, the Financial Accounting Standards Board (FASB) issued ASU 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, to clarify that contractual sale restrictions should not be considered in the measurement of the fair value of an equity security. The Company owns stock in the Federal Reserve Bank (FRB) and in the Federal Home Loan Bank (FHLB), which is valued at historical cost, which also approximates fair value. Ownership of stock is a condition for services the Company receives from the FRB and FHLB. The stock is not publicly traded and can only be issued, exchanged, redeemed or repurchased by the FRB and the FHLB. ASU 2022-03 was effective for fiscal years beginning after December 15, 2023. The Company adopted the standard on January 1, 2024, and it did not have a material effect on its consolidated financial statements.

​

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the U.S. Securities and Exchange Commission’s (SEC) Disclosure Update and Simplification Initiative. The ASU is intended to clarify or improve disclosure and presentation requirements of a variety of topics. Many of the amendments will allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the requirements and align the requirements in the FASB Accounting Standard Codification with the SEC’s regulations. The Company is currently evaluating the effects that ASU 2023-06 will have on its consolidated financial statements.

​

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU is intended to improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis to enable investors to develop more decision-useful financial analyses. This ASU will be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company does not expect the

10

Table of Contents

adoption of this ASU to have a material effect on its consolidated financial statements, though certain incremental disclosures will be required.

​

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU is intended to enhance the transparency and decision usefulness of income tax disclosures. This ASU will be effective for fiscal years beginning after December 15, 2024. The Company is currently evaluating the effects that ASU 2023-09 will have on its consolidated financial statements.

​

(4)      Cash and Cash Equivalents

​

The table below presents the balances of cash and cash equivalents:

​

​

​

​

​

​

​

​

 

 

September 30,

 

December 31,

(Dollars in thousands)

 

2024

    

2023

Cash and due from banks

​

$

7,635

​

$

10,471

Interest-earning deposits in other banks

​

 

135,493

​

 

116,188

Cash and cash equivalents

​

$

143,128

​

$

126,659

​

Interest-earning deposits in other banks consist primarily of deposits at the Federal Reserve Bank of San Francisco.

​

(5)      Investment Securities

​

The amortized cost, gross unrealized gains and losses, fair value, and related ACL of investment securities are as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Amortized

​

Gross Unrealized

​

Estimated

​

 

​

(Dollars in thousands)

    

Cost

    

Gains

    

Losses

    

Fair Value

    

 

ACL

September 30, 2024:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Available-for-sale:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Mortgage-backed securities issued by U.S. government-sponsored enterprises

​

$

21,927

​

$

—

 

$

(2,007)

​

$

19,920

​

$

—

Held-to-maturity:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Mortgage-backed securities issued by U.S. government agencies or U.S. government-sponsored enterprises

​

​

654,349

​

​

102

 

​

(102,229)

​

​

552,222

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total

​

$

676,276

​

$

102

 

$

(104,236)

​

$

572,142

​

$

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2023:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Available-for-sale:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Mortgage-backed securities issued by U.S. government-sponsored enterprises

​

$

22,563

​

$

—

 

$

(2,392)

​

$

20,171

​

$

—

Held-to-maturity:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Mortgage-backed securities issued by U.S. government agencies or U.S. government-sponsored enterprises

​

​

685,728

​

​

68

 

​

(117,668)

​

​

568,128

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total

​

$

708,291

​

$

68

 

$

(120,060)

​

$

588,299

​

$

—

​

11

Table of Contents

The amortized cost and estimated fair value of investment securities by maturity date at September 30, 2024 are shown below. Incorporated in the maturity schedule are mortgage-backed securities, which are allocated using the contractual maturity as a basis. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

​

​

​

​

​

​

​

​

​

 

    

Amortized

    

Estimated

 

(Dollars in thousands)

 

Cost

     

Fair Value

 

Available-for-sale:

​

​

​

​

​

​

​

Due after 10 years

​

$

21,927

​

$

19,920

​

Total

​

$

21,927

​

$

19,920

​

​

​

​

​

​

​

​

​

Held-to-maturity:

​

​

​

​

​

​

​

Due within 5 years

​

$

10

​

$

10

​

Due after 5 years through 10 years

​

 

8

​

 

8

​

Due after 10 years

​

 

654,331

​

 

552,204

​

Total

​

$

654,349

​

$

552,222

​

​

The Company did not sell any held-to-maturity or available-for-sale securities during the nine months ended September 30, 2024 and 2023.

​

Investment securities with amortized costs of $597.4 million and $555.8 million at September 30, 2024 and December 31, 2023, respectively, were pledged to secure deposits made by state and local governments, securities sold under agreements to repurchase, transaction clearing accounts, and Federal Reserve Bank borrowings. Included in these amounts were $187.4 million and $74.0 million pledged to the Federal Reserve Bank’s discount window at September 30, 2024 and December 31, 2023, respectively, and $51.1 million and $202.1 million pledged to the Federal Reserve Bank’s Bank Term Funding Program at September 30, 2024 and December 31, 2023, respectively.

​

12

Table of Contents

Provided below is a summary of investment securities which were in an unrealized loss position at September 30, 2024 and December 31, 2023. The Company does not intend to sell securities until such time as the value recovers or the securities mature and it is not more likely than not that the Company will be required to sell the securities prior to recovery of value or the securities mature.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

 

Less Than 12 Months

 

12 Months or Longer

 

Total

 

 

 

 

 

 

Unrealized

 

 

 

 

Unrealized

 

Number of

 

 

 

 

Unrealized

 

Description of securities

 

Fair Value

 

Losses

 

Fair Value

 

Losses

 

Securities

 

Fair Value

 

Losses

 

(Dollars in thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

September 30, 2024:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Available-for-sale:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Mortgage-backed securities issued by U.S. government-sponsored enterprises

​

$

—

​

$

—

​

$

19,920

​

$

(2,007)

 

4

​

$

19,920

​

$

(2,007)

​

Held-to-maturity:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Mortgage-backed securities issued by U.S. government agencies or U.S. government-sponsored enterprises

​

​

368

​

​

(2)

​

​

541,078

​

​

(102,227)

 

147

​

​

541,446

​

​

(102,229)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total

​

$

368

​

$

(2)

​

$

560,998

​

$

(104,234)

​

151

​

$

561,366

​

$

(104,236)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2023:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Available-for-sale:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Mortgage-backed securities issued by U.S. government sponsored enterprises

​

$

—

​

$

—

​

$

20,171

​

$

(2,392)

 

4

​

$

20,171

​

$

(2,392)

​

Held-to-maturity:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Mortgage-backed securities issued by U.S. government agencies or U.S. government-sponsored enterprises

​

​

10,326

​

​

(107)

​

​

554,514

​

​

(117,561)

 

152

​

​

564,840

​

​

(117,668)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total

​

$

10,326

​

$

(107)

​

$

574,685

​

$

(119,953)

​

156

​

$

585,011

​

$

(120,060)

​

​

Mortgage-Backed Securities. The unrealized losses on the Company’s investment in mortgage-backed securities were caused by increases in market interest rates subsequent to purchase. All of the mortgage-backed securities are guaranteed by Freddie Mac or Fannie Mae, which are U.S. government-sponsored enterprises, or Ginnie Mae, which is a U.S. government agency. Since the decline in market value is attributable to changes in interest rates and not credit quality, the Company does not intend to sell these investments until maturity, and it is not more likely than not that the Company will be required to sell such investments prior to recovery of its cost basis, no allowance for credit losses was recorded for these securities as of September 30, 2024 or December 31, 2023.

​

13

Table of Contents

(6)      Loans Receivable and Allowance for Credit Losses

​

The components of loans receivable, net of ACL as of September 30, 2024 and December 31, 2023 are as follows:

​

​

​

​

​

​

​

​

​

​

​

​

September 30,

​

December 31,

​

​

(Dollars in thousands)

    

2024

    

2023

 

​

Real estate loans:

​

​

​

​

​

​

​

​

First mortgages:

​

​

​

​

​

​

​

​

One- to four-family residential

​

$

1,250,405

​

$

1,277,544

​

​

Multi-family residential

​

 

5,375

​

 

5,855

​

​

Construction, commercial, and other

​

 

12,668

​

 

11,631

​

​

Home equity loans and lines of credit

​

 

12,469

​

 

7,058

​

​

Total real estate loans

​

 

1,280,917

​

 

1,302,088

​

​

Other loans:

​

​

​

​

​

​

​

​

Loans on deposit accounts

​

 

377

​

 

196

​

​

Consumer and other loans

​

 

8,304

​

 

8,257

​

​

Total other loans

​

​

8,681

​

​

8,453

​

​

​

​

​

​

​

​

​

​

​

Total loans

​

 

1,289,598

​

 

1,310,541

​

​

​

​

​

​

​

​

​

​

​

Net unearned fees and discounts

​

 

(1,910)

​

 

(1,989)

​

​

Total loans, net of unearned fees and discounts

​

 

1,287,688

​

 

1,308,552

​

​

​

​

​

​

​

​

​

​

​

Allowance for credit losses

​

 

(5,055)

​

 

(5,121)

​

​

Loans receivable, net of allowance for credit losses

​

$

1,282,633

​

$

1,303,431

​

​

​

The table below presents the activity in the ACL by portfolio segment:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

 

Real Estate

 

Commercial

 

Consumer

​

 

 

(Dollars in thousands)

 

Loans

 

Loans

 

Loans

​

Totals

Three months ended September 30, 2024:

​

​

​

​

​

​

​

​

​

​

​

​

Balance, beginning of period

​

$

4,430

​

$

529

​

$

159

​

$

5,118

Provision (reversal of provision) for credit losses

​

 

51

​

​

(48)

​

​

26

​

​

29

​

​

 

4,481

​

 

481

​

 

185

​

 

5,147

Charge-offs

​

 

(98)

​

​

—

​

​

(5)

​

​

(103)

Recoveries

​

 

10

​

​

—

​

​

1

​

​

11

Net charge-offs

​

 

(88)

​

 

—

​

 

(4)

​

 

(92)

Balance, end of period

​

$

4,393

​

$

481

​

$

181

​

$

5,055

​

​

​

​

​

​

​

​

​

​

​

​

​

Nine months ended September 30, 2024:

​

​

​

​

​

​

​

​

​

​

​

​

Balance, beginning of period

​

$

4,502

​

$

514

​

$

105

​

$

5,121

(Reversal of provision) provision for credit losses

​

 

(38)

​

​

(33)

​

​

93

​

​

22

​

​

 

4,464

​

 

481

​

 

198

​

 

5,143

Charge-offs

​

 

(103)

​

 

—

​

 

(25)

​

 

(128)

Recoveries

​

 

32

​

 

—

​

 

8

​

 

40

Net charge-offs

​

 

(71)

​

 

—

​

 

(17)

​

 

(88)

Balance, end of period

​

$

4,393

​

$

481

​

$

181

​

$

5,055

​

14

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

 

Real Estate

 

Commercial

 

Consumer

 

 

 

 

 

 

(Dollars in thousands)

 

Loans

 

Loans

 

Loans

 

Unallocated

 

Totals

Three months ended September 30, 2023:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance, beginning of period

​

$

4,734

​

$

426

​

$

102

​

$

—

​

$

5,262

(Reversal of provision) provision for credit losses

​

 

(291)

​

 

14

​

 

18

​

 

—

​

 

(259)

​

​

 

4,443

​

 

440

​

 

120

​

 

—

​

 

5,003

Charge-offs

​

 

(5)

​

 

—

​

 

(22)

​

 

—

​

 

(27)

Recoveries

​

 

25

​

 

—

​

 

2

​

 

—

​

 

27

Net recoveries (charge-offs)

​

 

20

​

 

—

​

 

(20)

​

 

—

​

 

—

Balance, end of period

​

$

4,463

​

$

440

​

$

100

​

$

—

​

$

5,003

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Nine months ended September 30, 2023:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance, beginning of period

​

$

1,263

​

$

434

​

$

76

​

$

259

​

$

2,032

Adoption of ASU No. 2016-13

​

​

3,393

​

​

71

​

​

4

​

​

(259)

​

​

3,209

(Reversal of provision) provision for credit losses

​

 

(146)

​

 

(65)

​

 

64

​

 

—

​

 

(147)

​

​

 

4,510

​

 

440

​

 

144

​

 

—

​

 

5,094

Charge-offs

​

 

(72)

​

 

—

​

 

(52)

​

 

—

​

 

(124)

Recoveries

​

 

25

​

 

—

​

 

8

​

 

—

​

 

33

Net charge-offs

​

 

(47)

​

 

—

​

 

(44)

​

 

—

​

 

(91)

Balance, end of period

​

$

4,463

​

$

440

​

$

100

​

$

—

​

$

5,003

​

The provision for credit losses in the three and nine months ended September 30, 2024 was primarily due to an increase in loans in the consumer loan portfolio and a decrease in its forecasted prepayments. This increase to the provision was partially offset by a decrease in the forecasted charge-offs in the real estate portfolio and an increase in the forecasted prepayments in the real estate and commercial portfolios. The reversal of provision for credit losses in the three and nine months ended September 30, 2023 was primarily due to a decrease in our real estate portfolio’s forecasted charge-offs that was partially offset by a decrease in its forecasted prepayments.

​

15

Table of Contents

The Company primarily uses the aging of loans to monitor the credit quality of its loan portfolio. The table below presents by credit quality indicator, loan class, and year of origination, the amortized cost basis of the Company’s loans as of September 30, 2024.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Revolving Loans

​

​

​

​

Amortized Cost of Term Loans by Origination Year

​

Amortized

​

​

​

(Dollars in thousands)

​

2024

​

2023

​

2022

​

2021

​

2020

​

Prior

​

Cost Basis

​

Total

September 30, 2024:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

30 - 59 days past due

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

60 - 89 days past due

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

90 days or more past due

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Loans not past due

​

​

322

​

​

564

​

​

302

​

​

4,718

​

​

—

​

​

901

​

​

1,158

​

​

7,965

Total Commercial

​

​

322

​

​

564

​

​

302

​

​

4,718

​

​

—

​

​

901

​

​

1,158

​

​

7,965

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Consumer

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

30 - 59 days past due

​

​

11

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

11

60 - 89 days past due

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

90 days or more past due

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Loans not past due

​

​

432

​

​

25

​

​

58

​

​

10

​

​

1

​

​

41

​

​

11,621

​

​

12,188

Total Consumer

​

​

443

​

​

25

​

​

58

​

​

10

​

​

1

​

​

41

​

​

11,621

​

​

12,199

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Real Estate

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

30 - 59 days past due

​

​

—

​

​

1,064

​

​

—

​

​

—

​

​

—

​

​

391

​

​

—

​

​

1,455

60 - 89 days past due

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

1,219

​

​

—

​

​

1,219

90 days or more past due

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Loans not past due

​

​

36,251

​

​

88,094

​

​

125,988

​

​

271,572

​

​

176,052

​

​

566,893

​

​

—

​

​

1,264,850

Total Real Estate

​

​

36,251

​

​

89,158

​

​

125,988

​

​

271,572

​

​

176,052

​

​

568,503

​

​

—

​

​

1,267,524

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total

​

$

37,016

​

$

89,747

​

$

126,348

​

$

276,300

​

$

176,053

​

$

569,445

​

$

12,779

​

$

1,287,688

​

The Company did not have any revolving loans that converted to term loans during the nine months ended September 30, 2024.

​

16

Table of Contents

The table below presents by credit quality indicator, loan class, and year of origination, the amortized cost basis of the Company’s loans as of December 31, 2023.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Revolving Loans

​

​

​

​

Amortized Cost of Term Loans by Origination Year

​

Amortized

​

​

​

(Dollars in thousands)

​

2023

​

2022

​

2021

​

2020

​

2019

​

Prior

​

Cost Basis

​

Total

December 31, 2023

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

30 - 59 days past due

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

60 - 89 days past due

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

90 days or more past due

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Loans not past due

​

​

387

​

​

353

​

​

4,836

​

​

—

​

​

203

​

​

856

​

​

1,230

​

​

7,865

Total Commercial

​

​

387

​

​

353

​

​

4,836

​

​

—

​

​

203

​

​

856

​

​

1,230

​

​

7,865

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Consumer

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

30 - 59 days past due

​

​

4

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

4

60 - 89 days past due

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

90 days or more past due

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Loans not past due

​

​

271

​

​

80

​

​

20

​

​

4

​

​

14

​

​

42

​

​

6,137

​

​

6,568

Total Consumer

​

​

275

​

​

80

​

​

20

​

​

4

​

​

14

​

​

42

​

​

6,137

​

​

6,572

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Real Estate

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

30 - 59 days past due

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

428

​

​

—

​

​

428

60 - 89 days past due

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

90 days or more past due

​

​

—

​

​

—

​

​

—

​

​

—

​

​

140

​

​

87

​

​

—

​

​

227

Loans not past due

​

​

91,195

​

​

129,148

​

​

283,571

​

​

183,887

​

​

91,113

​

​

514,546

​

​

—

​

​

1,293,460

Total Real Estate

​

​

91,195

​

​

129,148

​

​

283,571

​

​

183,887

​

​

91,253

​

​

515,061

​

​

—

​

​

1,294,115

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total

​

$

91,857

​

$

129,581

​

$

288,427

​

$

183,891

​

$

91,470

​

$

515,959

​

$

7,367

​

$

1,308,552

​

The Company did not have any revolving loans that converted to term loans during the year ended December 31, 2023.

​

The following table presents by loan class and year of origination, the gross charge-offs recorded during the three and nine months ended September 30, 2024 and 2023.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(Dollars in thousands)

​

2024

​

2023

​

2022

​

2021

​

2020

​

Prior

​

Total

Three months ended September 30, 2024:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

One- to four-family residential mortgages

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

98

​

$

98

Loans on deposit accounts

​

​

5

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

5

Total

​

$

5

​

$

—

​

$

—

​

$

—

​

$

—

​

$

98

​

$

103

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Nine months ended September 30, 2024:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

One- to four-family residential mortgages

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

103

​

$

103

Loans on deposit accounts

​

​

19

​

​

3

​

​

—

​

​

—

​

​

—

​

​

—

​

​

22

Consumer and other

​

​

—

​

​

2

​

​

—

​

​

—

​

​

—

​

​

1

​

​

3

Total

​

$

19

​

$

5

​

$

—

​

$

—

​

$

—

​

$

104

​

$

128

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(Dollars in thousands)

​

2023

​

2022

​

2021

​

2020

​

2019

​

Prior

​

Total

Three months ended September 30, 2023:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

One- to four-family residential mortgages

​

$

—

​

$

—

​

$

—

​

$

—

​

$

1

​

$

4

​

$

5

Loans on deposit accounts

​

​

21

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

21

Consumer and other

​

​

1

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

1

Total

​

$

22

​

$

—

​

$

—

​

$

—

​

$

1

​

$

4

​

$

27

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Nine months ended September 30, 2023:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

One- to four-family residential mortgages

​

$

—

​

$

—

​

$

—

​

$

—

​

$

11

​

$

61

​

$

72

Loans on deposit accounts

​

​

48

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

48

Consumer and other

​

​

1

​

​

—

​

​

—

​

​

—

​

​

3

​

​

—

​

​

4

Total

​

$

49

​

$

—

​

$

—

​

$

—

​

$

14

​

$

61

​

$

124

​

17

Table of Contents

The table below presents the aging of loans and accrual status by class of loans, net of unearned fees and discounts. Loans with a formal loan payment deferral plan in place are not considered contractually past due or delinquent if the borrower is in compliance with the loan payment deferral plan.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

90 Days

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

or More

 

 

 

30 - 59

 

60 - 89

 

90 Days or

 

 

 

 

 

 

 

 

 

 

 

 

 

Past Due

 

 

 

Days Past

 

Days Past

 

More

 

Total Past

 

Loans Not

 

Total

 

Nonaccrual

 

and Still

 

(Dollars in thousands)

 

Due

 

Due

 

Past Due

 

Due

 

Past Due

 

Loans

 

Loans

 

Accruing

 

September 30, 2024:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

One- to four-family residential mortgages

​

$

1,455

​

$

1,219

​

$

—

​

$

2,674

​

$

1,245,877

​

$

1,248,551

​

$

2,172

​

$

—

​

Multi-family residential mortgages

​

 

—

​

 

—

​

 

—

​

 

—

​

 

5,368

​

 

5,368

​

 

—

​

 

—

​

Construction, commercial, and other mortgages

​

 

—

​

 

—

​

 

—

​

 

—

​

 

12,614

​

 

12,614

​

 

—

​

 

—

​

Home equity loans and lines of credit

​

 

—

​

 

—

​

 

—

​

 

—

​

 

12,471

​

 

12,471

​

 

4

​

 

—

​

Loans on deposit accounts

​

 

—

​

 

—

​

 

—

​

 

—

​

 

377

​

 

377

​

 

—

​

 

—

​

Consumer and other

​

 

11

​

 

—

​

 

—

​

 

11

​

 

8,296

​

 

8,307

​

 

163

​

 

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total

​

$

1,466

​

$

1,219

​

$

—

​

$

2,685

​

$

1,285,003

​

$

1,287,688

​

$

2,339

​

$

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2023:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

One- to four-family residential mortgages

​

$

428

​

$

—

​

$

227

​

$

655

​

$

1,274,960

​

$

1,275,615

​

$

2,079

​

$

—

​

Multi-family residential mortgages

​

 

—

​

 

—

​

 

—

​

 

—

​

 

5,848

​

 

5,848

​

 

—

​

 

—

​

Construction, commercial, and other mortgages

​

 

—

​

 

—

​

 

—

​

 

—

​

 

11,570

​

 

11,570

​

 

—

​

 

—

​

Home equity loans and lines of credit

​

 

—

​

 

—

​

 

—

​

 

—

​

 

7,060

​

 

7,060

​

 

11

​

 

—

​

Loans on deposit accounts

​

 

—

​

 

—

​

 

—

​

 

—

​

 

196

​

 

196

​

 

—

​

 

—

​

Consumer and other

​

 

4

​

 

—

​

 

—

​

 

4

​

 

8,259

​

 

8,263

​

 

170

​

 

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total

​

$

432

​

$

—

​

$

227

​

$

659

​

$

1,307,893

​

$

1,308,552

​

$

2,260

​

$

—

​

​

​

The table below presents the amortized cost basis of loans on nonaccrual status as of September 30, 2024 and December 31, 2023.

​

​

​

​

​

​

​

​

​

​

​

(Dollars in thousands)

 

Nonaccrual Loans With a Related ACL

 

Nonaccrual Loans Without a Related ACL

 

Total Nonaccrual Loans

September 30, 2024

​

​

​

​

​

​

​

​

​

One- to four-family residential mortgages

​

$

2,172

​

$

—

​

$

2,172

Home equity loans and lines of credit

​

​

4

​

​

—

​

​

4

Consumer and other

​

​

163

​

​

—

​

​

163

Total Nonaccrual Loans and Leases

​

$

2,339

​

$

—

​

$

2,339

​

​

​

​

​

​

​

​

​

​

December 31, 2023:

​

​

​

​

​

​

​

​

​

One- to four-family residential mortgages

​

$

1,030

​

$

1,049

​

$

2,079

Home equity loans and lines of credit

​

​

11

​

​

—

​

​

11

Consumer and other

​

​

170

​

​

—

​

​

170

Total Nonaccrual Loans and Leases

​

$

1,211

​

$

1,049

​

$

2,260

​

All payments received while on nonaccrual status are applied against the principal balance of the loan.

​

When a mortgage loan becomes seriously delinquent (90 days or more contractually past due), it displays weaknesses that may result in a loss. As a loan becomes more delinquent, the likelihood of the borrower repaying the loan decreases and the loan becomes more collateral dependent. A mortgage loan becomes collateral dependent when the proceeds for repayment can be expected to come only from the sale or operation of the collateral and not from borrower repayments. Generally, appraisals are obtained after a loan becomes collateral dependent or is four months delinquent. The carrying value of collateral-dependent loans is adjusted to the fair value of the collateral less selling costs. Any commercial real estate, commercial, construction or equity loan that has a loan balance in excess of a specified amount is also periodically reviewed to determine whether the loan exhibits any weaknesses and is performing in accordance with its contractual terms. The amortized cost basis of collateral-dependent loans, excluding accrued interest receivable, was $227,000 at December 31, 2023. These loans were collateralized by residential real estate in Hawaii. As of December 31, 2023, the fair value of the collateral less selling costs of these collateral-dependent loans

18

Table of Contents

exceeded the amortized cost basis and there was no ACL calculated on collateral-dependent loans. There were no collateral-dependent loans at September 30, 2024.

​

The Company had no real estate owned as of September 30, 2024 or December 31, 2023. There was one one- to four-family residential mortgage loan with a principal balance of $1.2 million in the process of foreclosure at September 30, 2024. There were two one- to four-family residential mortgage loans totaling $227,000 in the process of foreclosure at December 31, 2023.

​

Nearly all of our real estate loans are collateralized by real estate located in the State of Hawaii. Loan-to-value ratios on these real estate loans generally do not exceed 80% at the time of origination.

​

During the nine months ended September 30, 2024 and 2023, the Company sold mortgage loans held for sale with principal balances of $877,000 and $827,000, respectively, and recognized gains of $19,000 and $10,000, respectively. The Company had no loans held for sale at September 30, 2024 and 2023.

​

The Company serviced loans for others with principal balances of $31.5 million at September 30, 2024 and $33.2 million at December 31, 2023. Of these amounts, $18.5 million and $19.3 million of loan balances relate to securitizations for which the Company continues to hold the related mortgage-backed securities at September 30, 2024 and December 31, 2023, respectively. The amount of contractually specified servicing fees earned for the three months ended September, 2024 and 2023 was $21,000 and $23,000, respectively. The amount of contractually specified servicing fees earned for the nine months ended September 30, 2024 and 2023 was $63,000 and $69,000, respectively. The fees are reported in service and other fees in the Consolidated Statements of Operations.

​

​

(7)Advances from the Federal Home Loan Bank

​

Federal Home Loan Bank advances are secured by a blanket pledge on the Bank’s assets not otherwise pledged. At September 30, 2024 and December 31, 2023, our credit limit with the FHLB of Des Moines was equal to 25% and 45%, respectively, of Territorial Savings Bank’s total assets and we had the capacity to borrow an additional $364.3 million and $612.6 million, respectively.

​

Advances outstanding consisted of the following:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

 

September 30, 2024

 

​

December 31, 2023

 

 

 

 

 

 

Weighted

 

​

 

 

 

Weighted

 

 

 

 

 

 

Average

 

​

 

 

 

Average

 

(Dollars in thousands)

 

Amount

 

Rate

 

     

Amount

 

Rate

 

Due within one year

​

$

52,000

 

1.99

%

​

$

82,000

 

1.40

%

Due over 1 year to 2 years

​

 

30,000

 

3.64

​

​

 

45,000

 

2.87

​

Due over 2 years to 3 years

​

 

30,000

 

4.24

​

​

 

20,000

 

3.20

​

Due over 3 years to 4 years

​

​

60,000

​

4.32

​

​

​

30,000

​

4.24

​

Due over 4 years to 5 years

​

​

5,000

​

4.38

​

​

​

60,000

​

4.32

​

Due over 5 years to 6 years

​

 

—

 

—

​

​

 

5,000

 

4.38

​

Total

​

$

177,000

 

3.51

%

​

$

242,000

 

2.96

%

​

​

19

Table of Contents

(8)       Advances from the Federal Reserve Bank

​

In March 2023, the FRB created a new Bank Term Funding Program (BTFP) to make additional funding available to eligible depository institutions. The BTFP ceased making new loans on March 11, 2024. This program offered loans up to a one year term that can be prepaid without penalty. The amount that could be borrowed was based upon the par value of the securities pledged as collateral to the FRB. As a member of the FRB system, the Bank may also borrow from the FRB Discount Window. At September 30, 2024, we had the ability to borrow up to $158.7 million using the market value of pledged collateral.

​

Advances outstanding consisted of the following:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

 

September 30, 2024

 

​

December 31, 2023

 

 

 

 

 

 

Weighted

 

​

 

 

 

Weighted

 

 

 

 

 

 

Average

 

​

 

 

 

Average

 

(Dollars in thousands)

 

Amount

 

Rate

 

        

Amount

 

Rate

 

Due within one year

​

$

50,000

 

4.76

%

​

$

50,000

 

4.89

%

Total

​

$

50,000

​

4.76

%

​

$

50,000

​

4.89

%

​

​

(9)      Securities Sold Under Agreements to Repurchase

​

Securities sold under agreements to repurchase are treated as financings and the obligations to repurchase the identical securities sold are reflected as a liability with the securities collateralizing the agreements classified as an asset. Securities sold under agreements to repurchase are summarized as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

 

September 30, 2024

 

​

December 31, 2023

 

​

 

 

 

 

 

Weighted

 

​

 

 

 

Weighted

 

​

 

 

Repurchase

 

Average

 

​

Repurchase

 

Average

 

​

(Dollars in thousands)

 

Liability

 

Rate

 

    

Liability

 

Rate

 

​

Maturing:

​

​

​

​

​

​

​

​

​

​

​

​

​

1 year or less

​

$

10,000

 

1.81

%  

​

$

5,000

 

1.88

%

​

Over 1 year to 2 years

​

​

—

​

—

​

​

​

5,000

​

1.73

​

​

Total

​

$

10,000

 

1.81

%  

​

$

10,000

 

1.81

%

​

​

Below is a summary comparing the carrying value and fair value of securities pledged to secure repurchase agreements, the repurchase liability, and the amount at risk at September 30, 2024. The amount at risk is the greater of the carrying value or fair value over the repurchase liability and refers to the potential loss to the Company if the secured lender fails to return the security at the maturity date of the agreement. All the agreements to repurchase are with JP Morgan Securities and the securities pledged are mortgage-backed securities issued and guaranteed by U.S. government agencies or U.S. government-sponsored enterprises. The fair value of the securities pledged must exceed the repurchase liability by 5.00%. In the event of a decline in the fair value of securities pledged to less than the required amount due to market conditions or principal repayments, the Company is obligated to pledge additional securities or other suitable collateral to cure the deficiency.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted

 

 

 

Carrying

 

Fair

 

 

 

 

 

 

 

Average

 

 

 

Value of

 

Value of

 

Repurchase

 

Amount

 

Months to

 

(Dollars in thousands)

 

Securities

 

Securities

 

Liability

 

at Risk

 

Maturity

 

Maturing:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Over 90 days

​

$

13,512

​

$

11,786

​

$

10,000

​

$

3,512

 

3

​

​

​

20

Table of Contents

(10)    Offsetting of Financial Liabilities

​

Securities sold under agreements to repurchase are subject to a right of offset in the event of default. See Note 9, Securities Sold Under Agreements to Repurchase, for additional information.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

 

 

 

 

 

Net Amount of

 

Gross Amount Not Offset in the

 

 

 

 

 

Gross Amount

 

Gross Amount

 

Liabilities

 

Balance Sheet

 

 

 

 

 

of Recognized

 

Offset in the

 

Presented in the

 

Financial

    

Cash Collateral

 

 

 

(Dollars in thousands)

 

Liabilities

 

Balance Sheet

 

Balance Sheet

 

Instruments

​

Pledged

 

Net Amount

September 30, 2024:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Securities sold under agreements to repurchase

​

$

10,000

​

$

—

​

$

10,000

​

$

10,000

​

$

—

​

$

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2023:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Securities sold under agreements to repurchase

​

$

10,000

​

$

—

​

$

10,000

​

$

10,000

​

$

—

​

$

—

​

​

(11) Employee Stock Ownership Plan

​

Effective January 1, 2009, Territorial Savings Bank adopted an Employee Stock Ownership Plan (ESOP) for eligible employees. The ESOP borrowed $9.8 million from the Company and used those funds to acquire 978,650 shares, or 8%, of the total number of shares issued by the Company in its initial public offering. The shares were acquired at a price of $10.00 per share.

​

The loan is secured by the shares purchased with the loan proceeds and will be repaid by the ESOP over the 20-year term of the loan with funds from Territorial Savings Bank’s contributions to the ESOP and dividends payable on the shares. The interest rate on the ESOP loan is an adjustable rate equal to the prime rate, as published in The Wall Street Journal. The interest rate adjusts annually and will be the prime rate on the first business day of the calendar year.

​

Shares purchased by the ESOP are held by a trustee in an unallocated suspense account, and shares are released annually from the suspense account on a pro-rata basis as principal and interest payments are made by the ESOP to the Company. The trustee allocates the shares released among participants on the basis of each participant’s proportional share of compensation relative to all participants. As shares are committed to be released from the suspense account, Territorial Savings Bank reports compensation expense based on the average fair value of shares released with a corresponding credit to stockholders’ equity. The shares committed to be released are considered outstanding for earnings per share computations. Compensation expense recognized for the three months ended September 30, 2024 and 2023 amounted to $117,000 and $136,000, respectively. Compensation expense recognized for the nine months ended September 30, 2024 and 2023 amounted to $329,000 and $588,000, respectively.

​

Shares held by the ESOP trust were as follows:

​

​

​

​

​

​

​

​

​

​

 

 

September 30,

 

December 31,

 

 

 

 

2024

 

2023

 

 

Allocated shares

 

​

630,136

 

​

619,938

​

​

Unearned shares

 

​

207,965

 

​

244,665

​

​

Total ESOP shares

 

​

838,101

 

​

864,603

​

​

Fair value of unearned shares, in thousands

​

$

2,171

​

$

2,728

​

​

​

The ESOP restoration plan is a nonqualified plan that provides supplemental benefits to certain executives who are prevented from receiving the full benefits contemplated by the ESOP’s benefit formula. The supplemental cash payments consist of payments representing shares that cannot be allocated to the participants under the ESOP due to IRS limitations imposed on tax-qualified plans. We accrue for these benefits over the period during which employees provide services to earn these benefits. For the three months ended September 30, 2024 and 2023, we accrued $13,000 and $9,000, respectively, and for the nine months ended September 30, 2024 and 2023, we reversed $14,000 and $12,000, respectively, for the ESOP restoration plan.

21

Table of Contents

​

(12)    Share-Based Compensation

​

The shareholders of Territorial Bancorp Inc. adopted the 2010 Equity Incentive Plan and the 2019 Equity Incentive Plan. These plans provide for the award of stock options and restricted stock to key officers and directors. In accordance with the Compensation – Stock Compensation topic of the FASB ASC, the cost of the equity incentive plans is based on the fair value of the awards on the grant date. The fair value of time-based restricted stock is based on the closing price of the Company’s stock on the grant date. The fair value of performance-based stock that will vest based on a performance condition is based on the closing price of the Company’s stock on the date of grant. The fair value of performance-based restricted stock that will vest on a market condition is based on a Monte Carlo valuation of the Company’s stock on the date of grant. The cost of the awards will be recognized on a straight-line basis over the three-year vesting period during which participants are required to provide services in exchange for the awards. There are 4,949 remaining shares available for new awards under the 2019 Equity Plan.

​

The Company recognized compensation expense, measured as the fair value of the share-based award on the date of grant, on a straight-line basis over the vesting period. Share-based compensation is recorded in the Consolidated Statements of Operations as a component of salaries and employee benefits with a corresponding increase in stockholders’ equity. The table below presents information on compensation expense and the related tax benefit for all share-based awards:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

(Dollars in thousands)

 

2024

 

2023

 

2024

 

2023

 

Compensation expense

​

$

65

​

$

88

​

$

231

​

$

90

​

Income tax benefit

​

 

18

​

 

24

​

 

63

​

 

24

​

​

Restricted Stock

​

Restricted stock awards are accounted for as fixed grants using the fair value of the Company’s stock at the time of grant. Unvested restricted stock may not be disposed of or transferred during the vesting period. Restricted stock carries the right to receive dividends, although dividends attributable to restricted stock are retained by the Company until the shares vest, at which time they are paid to the award recipient. Unvested restricted stock that is time-based contain nonforfeitable dividend rights.  Accrued dividends on restricted stock that do not vest based on performance or market conditions are forfeited. 

​

The table below presents the time-based restricted stock activity:

​

​

​

​

​

​

​

​

 

 

 

 

Weighted

 

 

 

Time-Based

 

Average Grant

 

 

 

Restricted

 

Date Fair

 

 

 

Stock

 

Value

 

Unvested at December 31, 2023

 

25,738

​

$

21.61

​

Granted

 

26,664

​

 

7.03

​

Vested

 

12,178

​

 

22.83

​

Forfeited

 

—

​

 

—

​

Unvested at September 30, 2024

 

40,224

​

$

11.57

​

​

​

​

​

​

​

​

Unvested at December 31, 2022

 

23,664

​

$

24.15

​

Granted

 

14,803

​

 

19.29

​

Vested

 

12,729

​

 

23.64

​

Forfeited

 

—

​

 

—

​

Unvested at September 30, 2023

 

25,738

​

$

21.61

​

​

As of September 30, 2024, the Company had $351,000 of unrecognized compensation costs related to time-based restricted stock.

22

Table of Contents

​

The table below presents the performance-based restricted stock (PRSUs) that will vest on a performance condition:

​

​

​

​

​

​

​

 

 

Performance-

 

​

​

​

​

Based Restricted

​

​

​

 

 

Stock Units

 

Weighted

​

​

Based on a

​

Average Grant

​

​

Performance

​

Date Fair

 

 

Condition

 

Value

Unvested at December 31, 2023

 

44,967

​

$

22.85

Granted

 

31,995

​

 

7.03

Vested

 

—

​

 

—

Forfeited

 

12,797

​

 

26.77

Unvested at September 30, 2024

 

64,165

​

$

14.18

​

​

​

​

​

​

Unvested at December 31, 2022

 

43,557

​

$

23.63

Granted

 

17,758

​

 

19.29

Vested

 

—

​

 

—

Forfeited

 

16,348

​

 

21.05

Unvested at September 30, 2023

 

44,967

​

$

22.85

​

The fair value of these PRSUs is based on the fair value of the Company’s stock on the date of grant. As of September 30, 2024, the Company had no unrecognized compensation costs related to the PRSUs. Additional compensation expense up to $607,000 may be recognized in the future if achievement of the performance condition becomes probable for previously issued grants. Performance will be measured over a three-year performance period and will be cliff vested. The performance condition is measured quarterly by comparing the Company’s three-year return on average equity to a peer group of banks. The Company’s percentile ranking in the peer group is used to adjust the number of PRSUs that are expected to vest.

​

The table below presents the PRSUs that will vest on a market condition:

​

​

​

​

​

​

​

​

​

Performance-

​

​

​

​

​

Based Restricted

​

Monte Carlo

​

​

Stock Units

​

Valuation of

​

​

Based on a

​

the Company's

 

 

Market Condition

 

Stock

Unvested at December 31, 2023

 

11,245

​

$

22.31

Granted

 

8,000

​

​

5.55

Vested

 

—

​

 

—

Forfeited

 

3,199

​

 

26.00

Unvested at September 30, 2024

 

16,046

​

$

13.22

​

​

​

​

​

​

Unvested at December 31, 2022

 

10,889

​

$

24.04

Granted

 

4,443

​

​

17.95

Vested

 

—

​

 

—

Forfeited

 

4,087

​

 

22.16

Unvested at September 30, 2023

 

11,245

​

$

22.31

​

As of September 30, 2024, the Company had $54,000 of unrecognized compensation costs related to the PRSUs that are based on a market condition. The market value of PRSUs that will vest on a market condition is determined by a Monte Carlo valuation of the Company’s stock as of the grant date. Performance will be measured over a three-year performance period and will be cliff vested. The market condition is measured quarterly by comparing the Company’s three-year average total stock return to a peer group of other banks. The Company’s percentile ranking in the peer group determines how many PRSUs will vest.

23

Table of Contents

​

​

(13)    Earnings Per Share

​

Holders of unvested restricted stock accrue dividends at the same rate as common shareholders and they both share equally in undistributed earnings. Unvested restricted stock awards that are time-based contain nonforfeitable rights to dividends or dividend equivalents and are considered to be participating securities in the earnings per share computation using the two-class method. Under the two-class method, earnings are allocated to common shareholders and participating securities according to their respective rights to earnings. Unvested restricted stock awards that vest based on performance or market conditions are not considered to be participating securities in the earnings per share calculation because accrued dividends on shares that do not vest are forfeited.

​

The table below presents the information used to compute basic and diluted earnings per share:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

(Dollars in thousands, except per share data)

 

2024

    

2023

    

2024

    

2023

 

Net (loss) income

​

$

(1,318)

​

$

880

​

$

(2,575)

​

$

4,693

​

Income allocated to participating securities

​

​

—

​

​

(15)

​

​

—

​

​

(44)

​

Net (loss) income available to common shareholders

​

$

(1,318)

​

$

865

​

$

(2,575)

​

$

4,649

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Weighted-average number of shares used in:

​

​

​

​

​

​

​

​

​

​

​

​

​

Basic earnings per share

​

 

8,618,155

​

 

8,577,632

​

 

8,604,082

​

 

8,656,915

​

Dilutive common stock equivalents:

​

​

​

​

​

​

​

​

​

​

​

​

​

Stock options and restricted stock units

​

 

—

​

 

32,657

​

 

—

​

 

48,869

​

Diluted earnings per share

​

 

8,618,155

​

 

8,610,289

​

 

8,604,082

​

 

8,705,784

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net (loss) income per common share, basic

​

$

(0.15)

​

$

0.10

​

$

(0.30)

​

$

0.54

​

Net (loss) income per common share, diluted

​

$

(0.15)

​

$

0.10

​

$

(0.30)

​

$

0.53

​

​

Dilutive common stock equivalents were not included in calculating the net loss per share for the three months

and nine months ended September 30, 2024 because these equivalents are anti-dilutive.

​

24

Table of Contents

(14)    Accumulated Other Comprehensive Loss

​

The table below presents the changes in the components of accumulated other comprehensive loss, net of taxes:

​

​

​

​

​

​

​

​

​

​

​

​

 

 

Unfunded

 

Unrealized

 

 

 

 

 

 

Pension

 

(Gain)/Loss on

 

 

 

 

(Dollars in thousands)

 

Liability

 

Securities

 

Total

 

Three months ended September 30, 2024

​

​

​

​

​

​

​

​

​

​

Balances at beginning of period

​

$

4,466

​

$

2,266

​

$

6,732

​

Other comprehensive income, net of taxes

​

​

—

​

 

(793)

​

 

(793)

​

Net current period other comprehensive income

​

 

—

​

 

(793)

​

 

(793)

​

Balances at end of period

​

$

4,466

​

$

1,473

​

$

5,939

​

​

​

​

​

​

​

​

​

​

​

​

Three months ended September 30, 2023

​

​

​

​

​

​

​

​

​

​

Balances at beginning of period

​

$

5,746

​

$

1,975

​

$

7,721

​

Other comprehensive loss, net of taxes

​

 

—

​

 

780

​

 

780

​

Net current period other comprehensive loss

​

 

—

​

 

780

​

 

780

​

Balances at end of period

​

$

5,746

​

$

2,755

​

$

8,501

​

​

​

​

​

​

​

​

​

​

​

​

Nine months ended September 30, 2024

​

​

​

​

​

​

​

​

​

​

Balances at beginning of period

​

$

4,466

​

$

1,755

​

$

6,221

​

Other comprehensive income, net of taxes

​

 

—

​

 

(282)

​

 

(282)

​

Net current period other comprehensive income

​

 

—

​

 

(282)

​

 

(282)

​

Balances at end of period

​

$

4,466

​

$

1,473

​

$

5,939

​

​

​

​

​

​

​

​

​

​

​

​

Nine months ended September 30, 2023

​

​

​

​

​

​

​

​

​

​

Balances at beginning of period

​

$

5,746

​

$

1,998

​

$

7,744

​

Other comprehensive loss, net of taxes

​

​

—

​

​

757

​

​

757

​

Net current period other comprehensive loss

​

 

—

​

 

757

​

 

757

​

Balances at end of period

​

$

5,746

​

$

2,755

​

$

8,501

​

​

The table below presents the tax effect on each component of accumulated other comprehensive loss:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

 

Three Months Ended September 30,

 

 

 

2024

 

2023

 

 

 

Pretax

 

 

 

 

After Tax

 

Pretax

 

 

 

 

After Tax

 

(Dollars in thousands)

    

Amount

    

Tax

    

Amount

    

Amount

    

Tax

    

Amount

 

Unrealized (gain) loss on securities

​

$

(1,082)

​

$

289

​

$

(793)

​

$

1,063

​

$

(283)

​

$

780

​

Total

​

$

(1,082)

​

$

289

​

$

(793)

​

$

1,063

​

$

(283)

​

$

780

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

 

Nine Months Ended September 30,

​

 

 

2024

 

2023

​

 

 

Pretax

 

 

 

 

After Tax

 

Pretax

 

 

 

 

After Tax

 

(Dollars in thousands)

    

Amount

    

Tax

    

Amount

    

Amount

    

Tax

    

Amount

 

Unrealized (gain) loss on securities

​

$

(385)

​

$

103

​

$

(282)

​

$

1,032

​

$

(275)

​

$

757

​

Total

​

$

(385)

​

$

103

​

$

(282)

​

$

1,032

​

$

(275)

​

$

757

​

​

​

​

(15)    Revenue Recognition

​

The Company’s contracts with customers are generally short term in nature, with cycles of one year or less. These can range from an immediate term for services such as wire transfers, foreign currency exchanges, and cashier’s check purchases, to several days for services such as processing annuity and mutual fund sales. Some contracts may be of an ongoing nature, such as providing deposit account services, including ATM access, check processing, account analysis, and check ordering. However, provision of an assessable service and payment for such service is usually

25

Table of Contents

concurrent or closely timed. Contracts related to financial instruments, such as loans, investments, and debt, are excluded from the scope of this reporting requirement.

​

After analyzing the Company’s revenue sources, including the amount of revenue received, the timing of services rendered, and the timing of payment for these services, the Company has determined that the rendering of services and the payment for such services are generally closely matched. Any differences are not material to the Company’s Consolidated Financial Statements. Accordingly, the Company generally records income when payment for services is received.

​

Revenue from contracts with customers is reported in service and other fees in other noninterest income in the Consolidated Statements of Operations. The table below reconciles the revenue from contracts with customers and other revenue reported in those line items:

​

​

​

​

​

​

​

​

​

​

​

 

 

Service and

 

​

​

 

​

​

(Dollars in thousands)

 

Other Fees

 

Other

 

Total

Three months ended September 30, 2024

​

​

​

​

​

​

​

​

​

Revenue from contracts with customers

​

$

241

​

$

23

​

$

264

Other revenue

​

​

32

​

​

46

​

​

78

Total

​

$

273

​

$

69

​

$

342

​

​

​

​

​

​

​

​

​

​

Three months ended September 30, 2023

​

​

​

​

​

​

​

​

​

Revenue from contracts with customers

​

$

265

​

$

16

​

$

281

Other revenue

​

​

33

​

​

57

​

​

90

Total

​

$

298

​

$

73

​

$

371

​

​

​

​

​

​

​

​

​

​

Nine months ended September 30, 2024

​

​

​

​

​

​

​

​

​

Revenue from contracts with customers

​

$

787

​

$

100

​

$

887

Other revenue

​

​

98

​

​

115

​

​

213

Total

​

$

885

​

$

215

​

$

1,100

​

​

​

​

​

​

​

​

​

​

Nine months ended September 30, 2023

​

​

​

​

​

​

​

​

​

Revenue from contracts with customers

​

$

917

​

$

85

​

$

1,002

Other revenue

​

​

105

​

​

123

​

​

228

Total

​

$

1,022

​

$

208

​

$

1,230

​

​

(16)    Leases

​

The table below presents lease costs and other information for the periods indicated:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

Three Months Ended

 

Nine Months Ended

 

​

 

September 30,

 

September 30,

 

(Dollars in thousands)

 

2024

 

2023

 

2024

 

2023

 

Lease costs:

​

​

​

​

​

​

​

​

​

​

​

​

​

Operating lease costs

​

$

707

​

$

689

​

$

2,096

​

$

2,084

​

Short-term lease costs

​

 

143

​

 

160

​

 

437

​

 

375

​

Variable lease costs

​

 

41

​

 

45

​

 

120

​

 

122

​

Total lease costs

​

$

891

​

$

894

​

$

2,653

​

$

2,581

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cash paid for amounts included in measurement of lease liabilities

​

$

882

​

$

(1,901)

​

$

1,856

​

$

(1,271)

​

ROU assets obtained in exchange for new operating lease liabilities

​

$

263

​

$

84

​

$

1,362

​

$

590

​

​

26

Table of Contents

Future minimum rental commitments under noncancellable operating leases are as follows:

​

​

​

​

​

​

​

September 30,

(Dollars in thousands)

    

2024

2024

​

$

2,570

2025

​

 

2,320

2026

​

 

2,224

2027

​

 

1,965

2028

​

 

1,661

Thereafter

​

 

8,209

Total

​

​

18,949

​

​

​

​

Less present value discount

​

​

(1,859)

Present value of leases

​

$

17,090

​

The table below presents additional lease-related information:

​

​

​

​

​

​

​

​

​

​

​

​

​

September 30,

​

​

December 31,

​

​

​

    

2024

    

​

2023

 

​

Weighted-average remaining lease term (years)

​

 

9.43

​

​

 

9.77

​

​

Weighted-average discount rate

​

​

2.22

%

​

​

2.15

%

​

​

​

​

(17)    Fair Value

​

In accordance with the Fair Value Measurements and Disclosures topic of the FASB ASC, the Company groups its financial assets and liabilities measured or disclosed at fair value into three levels based on the markets in which the financial assets and liabilities are traded and the reliability of the assumptions used to determine fair value as follows:

​

●Level 1 — Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities traded in active markets. A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available.

​

●Level 2 — Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

​

●Level 3 — Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect management’s own estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of discounted cash flow models and similar techniques that require the use of significant judgment or estimation.

​

In accordance with the Fair Value Measurements and Disclosures topic, the Company bases its fair values on the price that it would expect to receive if an asset were sold or the price that it would expect to pay to transfer a liability in an orderly transaction between market participants at the measurement date. Also as required, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when developing fair value measurements.

​

The Company uses fair value measurements to determine fair value disclosures. Investment securities available for sale and derivatives are recorded at fair value on a recurring basis. From time to time, the Company may be required to record other financial assets at fair value on a nonrecurring basis, such as loans held for sale, individually evaluated loans and investments, and mortgage servicing assets. These nonrecurring fair value adjustments typically involve application of the lower of cost or fair value accounting or write-downs of individual assets.

​

Investment Securities Available for Sale. The estimated fair values of mortgage-backed securities issued by U.S. government-sponsored enterprises are considered Level 2 inputs because the valuation for investment securities utilized pricing models that varied based on asset class and included trade, bid, and other observable market information.

27

Table of Contents

​

Interest Rate Contracts. The Company may enter into interest rate lock commitments with borrowers on loans intended to be sold. To manage interest rate risk on the lock commitments, the Company may also enter into forward loan sale commitments. The interest rate lock commitments and forward loan sale commitments are treated as derivatives and are recorded at their fair value determined by referring to prices quoted in the secondary market for similar contracts. The fair value inputs are considered Level 2 inputs. Interest rate contracts that are classified as assets are included with prepaid expenses and other assets on the Consolidated Balance Sheet while interest rate contracts that are classified as liabilities are included with accounts payable and accrued expenses.

​

The estimated fair values of the Company’s financial instruments are as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Carrying

​

​

​

​

Fair Value Measurements Using

 

(Dollars in thousands)

    

Amount

    

Fair Value

​

Level 1

​

Level 2

​

Level 3

 

September 30, 2024

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Assets

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cash and cash equivalents

​

$

143,128

​

$

143,128

​

$

143,128

​

$

—

​

$

—

​

Investment securities available for sale

​

​

19,920

​

​

19,920

​

​

—

​

​

19,920

​

​

—

​

Investment securities held to maturity

​

 

654,349

​

​

552,222

​

​

—

​

​

552,222

​

​

—

​

Loans receivable, net

​

 

1,282,633

​

​

1,113,762

​

​

—

​

​

—

​

​

1,113,762

​

FHLB stock

​

 

9,307

​

​

9,307

​

​

—

​

​

9,307

​

​

—

​

FRB stock

​

​

3,187

​

​

3,187

​

​

—

​

​

3,187

​

​

—

​

Accrued interest receivable

​

 

6,056

​

​

6,056

​

​

223

​

​

1,416

​

​

4,417

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Liabilities

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Deposits

​

 

1,670,281

​

​

1,668,752

​

​

—

​

​

1,023,196

​

​

645,556

​

Advances from the Federal Home Loan Bank

​

 

177,000

​

​

178,069

​

​

—

​

​

178,069

​

​

—

​

Advances from the Federal Reserve Bank

​

​

50,000

​

​

50,016

​

​

—

​

​

50,016

​

​

—

​

Securities sold under agreements to repurchase

​

 

10,000

​

​

9,940

​

​

—

​

​

9,940

​

​

—

​

Accrued interest payable

​

 

2,443

​

​

2,443

​

​

—

​

​

1,748

​

​

695

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2023

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Assets

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cash and cash equivalents

​

$

126,659

​

$

126,659

​

$

126,659

​

$

—

​

$

—

​

Investment securities available for sale

​

​

20,171

​

​

20,171

​

​

—

​

​

20,171

​

​

—

​

Investment securities held to maturity

​

 

685,728

​

​

568,128

​

​

—

​

​

568,128

​

​

—

​

Loans receivable, net

​

 

1,303,431

​

​

1,120,704

​

​

—

​

​

—

​

​

1,120,704

​

FHLB stock

​

 

12,192

​

​

12,192

​

​

—

​

​

12,192

​

​

—

​

FRB stock

​

​

3,180

​

​

3,180

​

​

—

​

​

3,180

​

​

—

​

Accrued interest receivable

​

 

6,105

​

​

6,105

​

​

79

​

​

1,441

​

​

4,585

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Liabilities

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Deposits

​

 

1,636,604

​

​

1,633,164

​

​

—

​

​

1,104,171

​

​

528,993

​

Advances from the Federal Home Loan Bank

​

 

242,000

​

​

238,380

​

​

—

​

​

238,380

​

​

—

​

Advances from the Federal Reserve Bank

​

​

50,000

​

​

50,049

​

​

—

​

​

50,049

​

​

—

​

Securities sold under agreements to repurchase

​

 

10,000

​

​

9,700

​

​

—

​

​

9,700

​

​

—

​

Accrued interest payable

​

 

1,183

​

​

1,183

​

​

—

​

​

157

​

​

1,026

​

​

At September 30, 2024 and December 31, 2023, neither the commitment fees received on commitments to extend credit nor the fair value thereof was material to the Consolidated Financial Statements of the Company.

​

28

Table of Contents

The table below presents the balance of assets and liabilities measured at fair value on a recurring basis:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(Dollars in thousands)

    

Level 1

    

Level 2

    

Level 3

    

Total

 

September 30, 2024

​

​

​

​

​

​

​

​

​

​

​

​

​

Investment securities available for sale

​

$

—

​

$

19,920

​

$

—

​

$

19,920

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2023

​

​

​

​

​

​

​

​

​

​

​

​

​

Investment securities available for sale

​

$

—

​

$

20,171

​

$

—

​

$

20,171

​

​

There were no assets or liabilities measured at fair value on a nonrecurring basis as of September 30, 2024 or December 31, 2023.

​

​

​

(18)    Subsequent Events

​

On October 25, 2024, the Board of Directors of Territorial Bancorp Inc. declared a quarterly cash dividend of $0.01 per share of common stock. The dividend is expected to be paid on November 22, 2024 to stockholders of record as of November 8, 2024.

​

On November 6, 2024, shareholders of the Company approved the Merger Agreement with Hope Bancorp, Inc. described below.

​

​

ITEM 2.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

​

Hope Bancorp Merger Agreement

​

On April 26, 2024, Hope Bancorp, Inc., a Delaware corporation (“Hope Bancorp”), and the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”). Under the terms of the merger agreement, the Company’s shareholders will receive a fixed exchange ratio of 0.8048 share of Hope Bancorp common stock in exchange for each share of the Company’s common stock they own, in a 100% stock-for-stock transaction valued at approximately $78.6 million, based on the closing price of Hope Bancorp’s common stock on April 26, 2024. The transaction is intended to qualify as a tax-free reorganization for the Company’s shareholders.

​

The transaction is subject to regulatory approvals and the satisfaction of other customary closing conditions.

​

Cautionary Statement Regarding Forward-Looking Information

​

This Quarterly Report contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect,” “will,” “may,” “continue,” and words of similar meaning. These forward-looking statements include, but are not limited to:

​

●statements of our goals, intentions, and expectations;

​

●statements regarding our business plans, prospects, growth, and operating strategies;

​

●statements regarding the asset quality of our loan and investment portfolios; and

​

●estimates of our risks and future costs and benefits.

​

These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic, and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and

29

Table of Contents

decisions that are subject to change. You should not place undue reliance on such statements. We are under no duty to and do not take any obligation to update any forward-looking statements after the date of this Quarterly Report.

​

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

​

●factors related to the proposed transaction with Hope Bancorp, including the receipt of regulatory and shareholder approvals, and other customary closing conditions;

​

●general economic conditions, internationally, nationally or in our market areas, that are worse than expected;

​

●competition among depository and other financial institutions;

​

●inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments;

​

●adverse changes in the securities or credit markets;

​

●changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements;

​

●changes in monetary or fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board;

​

●our ability to enter new markets successfully and capitalize on growth opportunities;

​

●a failure to maintain adequate levels of capital and liquidity to support our operations;

​

●our ability to successfully integrate acquired entities, if any;

​

●changes in consumer demand, spending, borrowing, and savings habits;

​

●changes in accounting and auditing policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board;

​

●changes in our organization, compensation, and benefit plans;

​

●the timing and amount of revenues that we may recognize;

​

●the value and marketability of collateral underlying our loan portfolios;

​

●our ability to retain key employees;

​

●cyber attacks, computer viruses, and other technological risks that may breach the security of our websites or other systems to obtain unauthorized access to confidential information, destroy data or disable our systems;

​

●technological changes that may be more difficult or expensive than expected;

​

●the ability of third-party providers to perform their obligations to us;

​

●the ability of the U.S. Government to manage federal debt limits;

​

●the effects of any federal government shutdown;

​

30

Table of Contents

●risks, uncertainties and other factors relating to a pandemic, including the length of time that the pandemic continues, the imposition of any restrictions on individual or business activities; the severity and duration of the effect of the pandemic on the general economy and on the businesses of our borrowers and their ability to make payments on their obligations; the remedial actions and stimulus measures adopted by federal, state and local governments, including the effects of any vaccine mandate; and the inability of employees to work due to illness, quarantine, or government mandates;

​

●changes in the quality and/or composition of our loan portfolio, including changes in our allowance for credit losses;

​

●the quality and composition of our investment portfolio;

​

●changes in market and other conditions that would affect our ability to repurchase our common stock;

​

●changes in our financial condition or results of operations that reduce capital available to pay dividends;

​

●the effects of climate change and societal, investor, and governmental responses to climate change;

​

●the effects of social and governance change and societal and investor sentiment and governmental responses to social and governance matters;

​

●the effects of domestic and international hostilities, including terrorism; and

​

●changes in the financial condition or future prospects of issuers of securities that we own.

​

Because of these and a wide variety of other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements.

​

Overview

​

We have historically operated as a traditional thrift institution. The significant majority of our assets consist of long-term, fixed-rate residential mortgage loans and mortgage-backed securities, which we have funded primarily with deposit inflows, cash balances at the Federal Reserve Bank, loan and security repayments, advances from the Federal Home Loan Bank and the Federal Reserve Bank, proceeds from securities sold under agreements to repurchase, and proceeds from loan and security sales. As a result, we may be vulnerable to increases in interest rates, as our interest-bearing liabilities mature or reprice more quickly than our interest-earning assets, as occurred in 2023.

​

We have continued our focus on originating one- to four-family residential real estate loans. Our emphasis on conservative loan underwriting has resulted in continued low levels of nonperforming assets. Our nonperforming assets, which include nonaccrual loans, totaled $2.3 million, or 0.11% of total assets at September 30, 2024 compared to $2.3 million, or 0.10% of total assets at December 31, 2023. We recorded a provision for credit losses of $22,000 and a reversal of provision for credit losses of $147,000 during the nine months ended September 30, 2024 and 2023, respectively. The provision for credit losses in the nine months ended September 30, 2024 was primarily due to an increase in loans in the consumer loan portfolio and a decrease in its forecasted prepayments. This increase to the provision was partially offset by a decrease in the forecasted charge-offs in the real estate portfolio and an increase in the forecasted prepayments in the real estate and commercial portfolio. The reversal of provision for credit losses in the nine months ended September 30, 2023 was primarily due to a decrease in our real estate portfolio’s forecasted charge-offs that was partially offset by a decrease in its forecasted prepayments.

​

Federal Home Loan Bank advances decreased by $65.0 million to $177.0 million and Federal Reserve Bank advances remained constant at $50.0 million for the nine months ended September 30, 2024. Federal Home Loan Bank advances had a net increase of $115.0 million to $256.0 million during the nine months ended September 30, 2023. We had no Federal Reserve Bank advances at September 30, 2023. Securities sold under agreements to repurchase remained constant at $10.0 million during the nine months ended September 30, 2024 and 2023.

​

31

Table of Contents

Our investments in mortgage-backed securities have been issued by Freddie Mac or Fannie Mae, which are U.S. government-sponsored enterprises, or Ginnie Mae, which is a U.S. government agency. These entities guarantee the payment of principal and interest on our mortgage-backed securities. As of September 30, 2024 and December 31, 2023, we owned $674.3 million and $705.9 million, respectively, of mortgage-backed securities issued by Freddie Mac, Fannie Mae, and Ginnie Mae. We did not record a provision for credit losses on investment securities during the nine months ended September 30, 2024 or 2023 as all our securities were issued either by U.S. government agencies or U.S. government-sponsored enterprises.

​

Critical Accounting Policies

​

There are no material changes to the critical accounting policies disclosed in Territorial Bancorp Inc.’s Annual Report on Form 10-K for the year ended December 31, 2023.

​

Comparison of Financial Condition at September 30, 2024 and December 31, 2023

​

Assets. At September 30, 2024, our total assets were $2.2 billion, a decrease of $38.2 million, or 1.7%, from December 31, 2023. The decrease in assets was primarily due to decreases of $31.6 million in total investment securities and $20.8 million in total loans, that were partially offset by a $16.5 million increase in cash and cash equivalents.

​

Cash and Cash Equivalents. Cash and cash equivalents were $143.1 million at September 30, 2024, an increase of $16.5 million, or 13.0%, since December 31, 2023. The increase in cash and cash equivalents was primarily due to a $33.7 million increase in deposits, a $31.6 million decrease in total investment securities, and a $20.8 million decrease in the loan portfolio, that were partially offset by a $65.0 million decrease in Federal Home Loan Bank (FHLB) advances.

​

Loans. Total loans were $1.3 billion at September 30, 2024, or 58.3% of total assets. During the nine months ended September 30, 2024, the loan portfolio decreased by $20.8 million, or 1.6%. The decrease in the loan portfolio primarily occurred as principal repayments exceeded the origination of new loans.

​

Securities. Total investment securities, including $19.9 million of investment securities available for sale, were $674.3 million at September 30, 2024, or 30.7% of total assets. During the nine months ended September 30, 2024, the investment securities portfolio decreased by $31.6 million, or 4.5%. The decrease in the investment securities balance was primarily due to principal repayments. At September 30, 2024, none of the underlying collateral for the securities consisted of subprime or Alt-A (traditionally defined as nonconforming loans having less than full documentation) loans.

​

Deposits. Deposits were $1.7 billion at September 30, 2024, an increase of $33.7 million, or 2.1%, since December 31, 2023. The growth in deposits was primarily due to an increase of $114.7 million in certificates of deposit, which was partially offset by decreases of $51.0 million in passbook savings and $26.7 million in checking accounts. The increase in certificates in deposit was primarily due to a $92.7 million increase in certificates of deposit held by state and local governments. The decrease in passbook savings and checking accounts occurred as customers sought higher interest rates than what we offer.

​

Borrowings. Total borrowings were $237.0 million at September 30, 2024, a decrease of $65.0 million, or 21.5%, since December 31, 2023. Our borrowings consist of advances from the FHLB and Federal Reserve Bank (FRB) and funds borrowed under securities sold under agreements to repurchase.

​

Stockholders’ Equity. Total stockholders’ equity was $248.7 million at September 30, 2024, a decrease of $2.3 million, or 0.9%, from $251.1 million at December 31, 2023. The decrease in stockholders’ equity was primarily due to the net loss incurred during the year.

​

32

Table of Contents

Average Balance and Yields

​

The following tables set forth the average balance sheet, yields and rates, and certain other information for the periods indicated. No tax-equivalent yield adjustments were made, as we did not hold any tax-free investments. All average balances are daily average balances. Nonaccrual loans were included in the computation of average balances and are included with accrual loans in the tables. However, no interest income was attributed to nonaccrual loans. The yields set forth below include the effect of net deferred costs, discounts, and premiums that are amortized or accreted to interest income of $71,000 and $197,000 for the three and nine months ended September 30, 2024, respectively, and $51,000 and $153,000 for the three and nine months ended September 30, 2023, respectively.

​

33

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

 

For the Three Months Ended September 30,

 

​

 

 

2024

 

​

2023

 

​

 

 

Average

 

 

 

 

 

 

​

Average

 

 

 

 

 

 

​

 

 

Outstanding

 

 

 

 

Yield/Rate

 

​

Outstanding

 

 

 

 

Yield/Rate

 

​

 

 

Balance

 

Interest

 

(1)

 

​

Balance

 

Interest

 

(1)

 

​

​

 

(Dollars in thousands)

​

​

Interest-earning assets:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Real estate loans:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

First mortgage:

    

​

​

    

​

​

    

​

    

​

​

​

    

​

​

    

​

 

​

One- to four-family residential (2)

​

$

1,257,046

​

$

11,723

 

3.73

%  

​

$

1,271,467

​

$

11,423

 

3.59

%

​

Multi-family residential

​

 

5,425

​

​

63

 

4.65

​

​

 

6,027

​

​

72

 

4.78

​

​

Construction, commercial, and other

​

​

12,270

​

​

142

 

4.63

​

​

 

17,333

​

​

173

 

3.99

​

​

Home equity loans and lines of credit

​

 

12,296

​

​

202

 

6.57

​

​

 

7,276

​

​

126

 

6.93

​

​

Other loans

​

 

8,657

​

​

99

 

4.57

​

​

 

8,327

​

​

92

 

4.42

​

​

Total loans

​

 

1,295,694

​

​

12,229

 

3.78

​

​

 

1,310,430

​

 

11,886

 

3.63

​

​

Investment securities:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Mortgage-backed securities issued by U.S. government agencies or U.S. government-sponsored enterprises (2)

​

 

680,545

​

​

4,183

 

2.46

​

​

 

721,619

​

 

4,447

 

2.47

​

​

Total securities

​

 

680,545

​

​

4,183

 

2.46

​

​

 

721,619

​

 

4,447

 

2.47

​

​

Other investments

​

 

136,595

​

​

1,901

 

5.57

​

​

 

80,405

​

 

1,051

 

5.23

​

​

Total interest-earning assets

​

 

2,112,834

​

​

18,313

 

3.47

​

​

 

2,112,454

​

​

17,384

 

3.29

​

​

Non-interest-earning assets

​

 

89,058

​

​

​

​

​

​

​

 

88,387

​

​

​

​

​

​

​

Total assets

​

$

2,201,892

​

​

​

​

​

​

​

$

2,200,841

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest-bearing liabilities:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Savings accounts

​

$

692,637

​

​

1,729

 

1.00

%  

​

$

775,092

​

 

672

 

0.35

%

​

Certificates of deposit

​

 

606,483

​

​

6,726

 

4.44

​

​

 

499,188

​

 

4,720

 

3.78

​

​

Money market accounts

​

 

2,417

​

​

1

 

0.17

​

​

 

4,486

​

 

2

 

0.18

​

​

Checking and Super NOW accounts

​

 

265,564

​

​

13

 

0.02

​

​

 

284,272

​

 

14

 

0.02

​

​

Total interest-bearing deposits

​

 

1,567,101

​

​

8,469

 

2.16

​

​

 

1,563,038

​

​

5,408

 

1.38

​

​

Federal Home Loan Bank advances

​

 

209,771

​

​

1,714

 

3.27

​

​

 

260,620

​

 

1,896

 

2.91

​

​

Federal Reserve Bank advances

​

​

50,000

​

​

600

​

4.80

​

​

​

—

​

​

—

​

​

​

​

Securities sold under agreements to repurchase

​

 

10,000

​

​

46

 

1.84

​

​

 

10,000

​

 

46

 

1.84

​

​

Total interest-bearing liabilities

​

 

1,836,872

​

​

10,829

 

2.36

​

​

 

1,833,658

​

​

7,350

 

1.60

​

​

Non-interest-bearing liabilities

​

 

114,020

​

​

​

​

​

​

​

 

115,744

​

​

​

​

​

​

​

Total liabilities

​

 

1,950,892

​

​

​

​

​

​

​

 

1,949,402

​

​

​

​

​

​

​

Stockholders’ equity

​

 

251,000

​

​

​

​

​

​

​

 

251,439

​

​

​

​

​

​

​

Total liabilities and stockholders’ equity

​

$

2,201,892

​

​

​

​

​

​

​

$

2,200,841

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net interest income

​

​

​

​

$

7,484

​

​

​

​

​

​

​

$

10,034

​

​

​

​

Net interest rate spread (3)

​

​

​

​

​

​

 

1.11

%  

​

​

​

​

​

​

 

1.69

%

​

Net interest-earning assets (4)

​

$

275,962

​

​

​

​

​

​

​

$

278,796

​

​

​

​

​

​

​

Net interest margin (5)

​

​

​

​

​

​

 

1.42

%  

​

​

​

​

​

​

 

1.90

%

​

Interest-earning assets to interest-bearing liabilities

​

 

115.02

%  

​

​

​

​

​

​

 

115.20

%  

​

​

​

​

​

​

(1)Annualized by using the ratio of the number of months in a year over the number of months in the period.
(2)Average balance includes loans or investments held to maturity and available for sale, as applicable.
(3)Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(4)Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(5)Net interest margin represents net interest income divided by average total interest-earning assets.

34

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

 

For the Nine Months Ended September 30,

 

​

 

 

2024

 

​

2023

 

​

 

 

Average

 

 

 

 

 

 

​

Average

 

 

 

 

 

 

    

 

 

Outstanding

 

 

 

 

Yield/Rate

 

​

Outstanding

 

 

 

 

Yield/Rate

 

​

 

 

Balance

 

Interest

 

(1)

 

​

Balance

 

Interest

 

(1)

 

​

​

​

(Dollars in thousands)

 

​

Interest-earning assets:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Real estate loans:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

First mortgage:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

One- to four-family residential (2)

​

$

1,266,049

​

$

35,142

 

3.70

%  

​

$

1,259,987

​

$

33,559

 

3.55

%

​

Multi-family residential

​

 

5,550

​

 

194

 

4.66

​

​

 

5,655

​

 

205

 

4.83

​

​

Construction, commercial, and other

​

 

12,201

​

 

422

 

4.61

​

​

 

21,071

​

 

647

 

4.09

​

​

Home equity loans and lines of credit

​

 

10,145

​

 

493

 

6.48

​

​

 

6,920

​

 

355

 

6.84

​

​

Other loans

​

 

8,491

​

 

289

 

4.54

​

​

 

8,353

​

 

271

 

4.33

​

​

Total loans

​

 

1,302,436

​

 

36,540

 

3.74

​

​

 

1,301,986

​

 

35,037

 

3.59

​

​

Investment securities:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Mortgage-backed securities issued by U.S. government agencies or U.S. government-sponsored enterprises (2)

​

 

691,578

​

 

12,753

 

2.46

​

​

 

731,495

​

 

13,512

 

2.46

​

​

Total securities

​

 

691,578

​

 

12,753

 

2.46

​

​

 

731,495

​

 

13,512

 

2.46

​

​

Other investments

​

 

124,013

​

 

5,104

 

5.49

​

​

 

79,150

​

 

2,848

 

4.80

​

​

Total interest-earning assets

​

 

2,118,027

​

 

54,397

 

3.42

​

​

 

2,112,631

​

 

51,397

 

3.24

​

​

Non-interest-earning assets

​

 

89,005

​

​

​

​

​

​

​

 

88,584

​

​

​

​

​

​

​

Total assets

​

$

2,207,032

​

​

​

​

​

​

​

$

2,201,215

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest-bearing liabilities:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Savings accounts

​

$

710,726

​

​

4,573

 

0.86

%  

​

$

820,324

​

 

1,498

 

0.24

%

​

Certificates of deposit

​

 

559,642

​

 

18,041

 

4.30

​

​

 

467,487

​

 

11,715

 

3.34

​

​

Money market accounts

​

 

2,570

​

 

2

 

0.10

​

​

 

4,966

​

 

4

 

0.11

​

​

Checking and Super NOW accounts

​

 

275,368

​

 

42

 

0.02

​

​

 

290,682

​

 

44

 

0.02

​

​

Total interest-bearing deposits

​

 

1,548,306

​

 

22,658

 

1.95

​

​

 

1,583,459

​

 

13,261

 

1.12

​

​

Federal Home Loan Bank advances

​

 

230,814

​

 

5,330

 

3.08

​

​

 

238,363

​

 

4,782

 

2.67

​

​

Federal Reserve Bank advances

​

​

50,000

​

​

1,789

 

4.77

​

​

​

—

​

​

—

​

—

​

​

Securities sold under agreements to repurchase

​

 

10,000

​

 

137

 

1.83

​

​

 

10,000

​

 

137

 

1.83

​

​

Total interest-bearing liabilities

​

 

1,839,120

​

 

29,914

 

2.17

​

​

 

1,831,822

​

 

18,180

 

1.32

​

​

Non-interest-bearing liabilities

​

 

116,194

​

​

​

​

​

​

​

 

116,027

​

​

​

​

​

​

​

Total liabilities

​

 

1,955,314

​

​

​

​

​

​

​

 

1,947,849

​

​

​

​

​

​

​

Stockholders’ equity

​

 

251,718

​

​

​

​

​

​

​

 

253,366

​

​

​

​

​

​

​

Total liabilities and stockholders’ equity

​

$

2,207,032

​

​

​

​

​

​

​

$

2,201,215

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net interest income

​

​

​

​

$

24,483

​

​

​

​

​

​

​

$

33,217

​

​

​

​

Net interest rate spread (3)

​

​

​

​

​

​

 

1.25

%  

​

​

​

​

​

​

 

1.92

%

​

Net interest-earning assets (4)

​

$

278,907

​

​

​

​

​

​

​

$

280,809

​

​

​

​

​

​

​

Net interest margin (5)

​

​

​

​

​

​

 

1.54

%  

​

​

​

​

​

​

 

2.10

%

​

Interest-earning assets to interest-bearing liabilities

​

 

115.17

%  

​

​

​

​

​

​

 

115.33

%  

​

​

​

​

​

​

(1)Annualized by using the ratio of the number of months in a year over the number of months in the period.
(2)Average balance includes loans or investments held to maturity and available for sale, as applicable.
(3)Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(4)Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(5)Net interest margin represents net interest income divided by average total interest-earning assets.

35

Table of Contents

Comparison of Operating Results for the Three Months Ended September 30, 2024 and 2023

​

General. We had a net loss of $1.3 million for the three months ended September 30, 2024, a $2.2 million decrease in earnings compared to net income of $880,000 for the three months ended September 30, 2023. The decrease in net income was primarily due to a $2.6 million decrease in net interest income which was partially offset by a $946,000 decrease in income taxes.

​

Net Interest Income. Net interest income decreased by $2.6 million, or 25.4%, to $7.5 million for the three months ended September 30, 2024 from $10.0 million for the three months ended September 30, 2023. Interest expense increased by $3.5 million, or 47.3%, primarily due to a 76 basis point increase in the cost of average interest-bearing liabilities. Interest income increased by $929,000, or 5.3%, primarily due to an 18 basis point increase in the yield on average interest-earning assets. The net interest rate spread and net interest margin were 1.11% and 1.42%, respectively, for the three months ended September 30, 2024, compared to 1.69% and 1.90%, respectively, for the three months ended September 30, 2023. The decrease in the net interest rate spread and in the net interest margin are attributable to the 76 basis point increase in the cost of average interest-bearing liabilities, which was partially offset by the 18 basis point increase in the yield of average interest-earning assets.

​

Interest Income. Interest income increased by $929,000, or 5.3%, to $18.3 million for the three months ended September 30, 2024 from $17.4 million for the three months ended September 30, 2023. Interest income on other investments increased by $850,000, or 80.9%, to $1.9 million for the three months ended September 30, 2024 from $1.1 million for the three months ended September 30, 2023. The increase in interest income on other investments was primarily due to an increase in the interest earned on our cash balances at the FRB. Our average cash balance at the FRB increased by $57.9 million from $63.7 million for the three months ended September 30, 2023, to $121.6 million for the three months ended September 30, 2024. In addition, the yield earned increased from 4.84% for the three months ended September 30, 2023 to 5.15% for the three months ended September 30, 2024. Interest income on loans increased by $343,000, or 2.9%, from $11.9 million for the three months ended September 30, 2023 to $12.2 million for the three months ended September 30, 2024. The increase in interest income on loans occurred because of a 15 basis point increase in the yield on loans which was partially offset by a $14.7 million, or 1.1%, decrease in the average balance of loans which occurred as loan repayments exceeded new loan originations. These increases in interest income were partially offset by a decrease in interest income on investment securities of $264,000, or 5.9%, from $4.4 million for the three months ended September 30, 2023 to $4.2 million for the three months ended September 30, 2024. The decrease in interest income on investment securities was primarily due to a $41.1 million decrease in the average balance that was primarily due to principal repayments.

​

Interest Expense. Interest expense increased by $3.5 million, or 47.3%, to $10.8 million for the three months ended September 30, 2024 from $7.4 million for the three months ended September 30, 2023. Interest expense on interest-bearing deposits increased by $3.1 million, or 56.6%, to $8.5 million for the three months ended September 30, 2024 from $5.4 million for the three months ended September 30, 2023. The increase in interest expense on interest-bearing deposits was primarily due to a $107.3 million, or 21.5%, increase in the average balance of certificates of deposit and a 66 basis point increase in the rate paid on certificates of deposit. The increase in the average balance was primarily due to an increase in state and local government certificates of deposit. The rate paid on certificates of deposit increased to 4.44% for the three months ended September 30, 2024 from 3.78% for the three months ended September 30, 2023, primarily due to increases in market interest rates. Interest expense on savings accounts increased by $1.1 million, or 157.3%, to $1.7 million for the three months ended September 30, 2024 from $672,000 for the three months ended September 30, 2023. The increase in interest expense on savings accounts occurred primarily because of a 65 basis point increase in the rate which was partially offset by a $82.5 million, or 10.6%, decrease in the average balance of savings accounts. The increase in the rates on savings accounts was primarily due to increases in market interest rates. The decrease in the average balance of savings accounts occurred primarily as customers transferred their funds to certificates of deposits, which had higher interest rates, or sought higher interest rates elsewhere. Interest expense on FRB advances was $600,000 for the three months ended September 30, 2024 due to a $50.0 million advance from the FRB Bank Term Funding Program (BTFP) that was obtained to enhance our liquidity and to fund the decrease in deposits. There were no advances from the FRB during the three months ended September 30, 2023. Interest expense on FHLB advances decreased by $182,000, or 9.6%, from $1.9 million for the three months ended September 30, 2023 to $1.7 million for the three months ended September 30, 2024.  The decrease in interest expense on FHLB advances

36

Table of Contents

was primarily due to a $50.8 million decrease in the average balance of FHLB advances, which was partially offset by a 36 basis point increase in the average cost of advances.  The changes in the average balance and average cost of FHLB advances was primarily due to $60.0 million of maturing FHLB advances that were paid off in the three months ended September 30, 2024 which had a relatively low average interest rate of 1.47%.

​

Provision for Credit Losses. We recorded a provision for credit losses of $29,000 and a reversal of provision for credit losses of $259,000 for the three months ended September 30, 2024 and 2023, respectively. The provision for credit losses in the three months ended September 30, 2024 was primarily due to an increase in loans in the consumer loan portfolio and a decrease in its forecasted prepayments. This increase to the provision was partially offset by a decrease in the forecasted charge-offs in the real estate portfolio and an increase in the forecasted prepayments in the real estate and commercial portfolio. The reversal of provision for credit losses in the nine months ended September 30, 2023 was primarily due to a decrease in our real estate portfolio’s forecasted charge-offs that was partially offset by a decrease in its forecasted prepayments. The provisions recorded resulted in the ratios of the allowance for credit losses to total loans of 0.39% and 0.38% at September 30, 2024 and 2023, respectively. Nonaccrual loans totaled $2.3 million, or 0.18% of total loans at September 30, 2024 and 2023. Nonaccrual loans as of September 30, 2024 and 2023 consisted primarily of one- to four-family residential real estate loans. The allowance at September 30, 2024 and 2023 reflects management’s best estimate of losses over the life of loans in our portfolio in accordance with the CECL approach. For additional information, see Note (6), “Loans Receivable and Allowance for Credit Losses” in our Notes to Consolidated Financial Statements.

​

Noninterest Income. The following table summarizes changes in noninterest income between the three months ended September 30, 2024 and 2023.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

September 30,

 

Change

​

 

 

 

2024

 

2023

 

$ Change

 

% Change

 

​

​

​

​

​

​

(Dollars in thousands)

​

​

​

​

Service and other fees

​

$

273

​

$

298

​

$

(25)

 

(8.4)

%  

​

Income on bank-owned life insurance

​

 

255

​

 

218

​

 

37

 

17.0

%

​

Net gain on sale of loans

​

 

19

​

 

—

​

 

19

 

—

%  

​

Other

​

 

69

​

 

73

​

 

(4)

 

(5.5)

%  

​

Total

​

$

616

​

$

589

​

$

27

 

4.6

%

​

​

Noninterest income increased by $27,000 for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase in bank-owned life insurance income was primarily due to higher market interest rates.

​

Noninterest Expense. The following table summarizes changes in noninterest expense between the three months ended September 30, 2024 and 2023.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

 

Three Months Ended

 

 

 

 

 

 

September 30,

 

 

Change

 

 

 

2024

 

2023

 

$ Change

    

% Change

 

​

​

​

​

​

​

(Dollars in thousands)

​

​

​

​

Salaries and employee benefits

​

$

4,899

​

$

5,176

​

$

(277)

 

(5.4)

%  

​

Occupancy

​

 

1,813

​

 

1,819

​

 

(6)

 

(0.3)

%  

​

Equipment

​

 

1,335

​

 

1,263

​

 

72

 

5.7

%  

​

Federal deposit insurance premiums

​

 

392

​

 

246

​

 

146

 

59.3

%  

​

Other general and administrative expenses

​

 

1,561

​

 

1,163

​

 

398

 

34.2

%  

​

Total

​

$

10,000

​

$

9,667

​

$

333

 

3.4

%  

​

​

Noninterest expense increased by $333,000 for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Other general and administrative expenses included $353,000 of merger related legal and consulting expenses and a writeoff of $135,000 of cash destroyed in the Maui wildfire that was deemed unrecoverable. The increase in federal deposit insurance premiums was primarily due to an increase in the Federal

37

Table of Contents

Deposit Insurance Corporation (FDIC) premium rate. The increase in equipment expense was due to an increase in service bureau expense. The decrease in salaries and employee benefits was primarily due to a decrease in compensation expense and various benefit expenses, which was partially offset by a decrease in deferred salary expense for originating new loans.

​

Income Tax (Benefit) Expense. The income tax benefit was $611,000 for the three months ended September 30, 2024, reflecting an effective tax benefit rate of 31.7%, compared to income tax expense of $335,000 for the three months ended September 30, 2023, reflecting an effective tax rate of 27.6%.

​

Comparison of Operating Results for the Nine Months Ended September 30, 2024 and 2023

​

General. We had a net loss of $2.6 million for the nine months ended September 30, 2024, a decrease in earnings of $7.3 million compared to net income of $4.7 million for the nine months ended September 30, 2023. The decrease in earnings was primarily due to an $8.7 million decrease in net interest income, a $1.3 million increase in non-interest expense, and a $169,000 increase in the provision for credit losses. These decreases in earnings were partially offset by a $2.9 million decrease in income taxes.

​

Net Interest Income. Net interest income decreased by $8.7 million, or 26.3%, to $24.5 million for the nine months ended September 30, 2024 from $33.2 million for the nine months ended September 30, 2023. Interest expense increased by $11.7 million, or 64.5%, due to an 85 basis point increase in the cost of average interest-bearing liabilities and a $7.3 million increase in the average balance of interest-bearing liabilities. Interest income increased by $3.0 million, or 5.8%, due to an 18 basis point increase in the yield on average interest-earning assets and a $5.4 million increase in the average balance of interest-earning assets. The net interest rate spread and net interest margin were 1.25% and 1.54%, respectively, for the nine months ended September 30, 2024, compared to 1.92% and 2.10%, respectively, for the nine months ended September 30, 2023. The decreases in the net interest rate spread and in the net interest margin are attributable to the 85 basis point increase in the cost of average interest-bearing liabilities, which was partially offset by the 18 basis point increase in the yield on average interest-earning assets.

​

Interest Income. Interest income increased by $3.0 million, or 5.8%, to $54.4 million for the nine months ended September 30, 2024 from $51.4 million for the nine months ended September 30, 2023. Interest income on other investments increased by $2.3 million, or 79.2%, to $5.1 million for the nine months ended September 30, 2024 from $2.8 million for the nine months ended September 30, 2023. The increase in interest income on other investments was primarily due to an increase in the interest earned on our cash balances at the FRB. Our average cash balance at the FRB increased by $45.1 million from $63.5 million during the nine months ended September 30, 2023, to $108.5 million during the nine months ended September 30, 2024. In addition, the yield earned increased from 4.55% for the nine months ended September 30, 2023 to 5.09% for the nine months ended September 30, 2024. Interest income on loans increased by $1.5 million, or 4.3%, to $36.5 million for the nine months ended September 30, 2024 from $35.0 million for the nine months ended September 30, 2023. The increase in interest income on loans occurred because of a 15 basis point increase in the yield. These increases in interest income were partially offset by a $759,000, or 5.6%, decrease in interest income on investment securities from $13.5 million for the nine months ended September 30, 2023 to $12.8 million for the nine months ended September 30, 2024. The decrease in interest income on investment securities was primarily due to a $39.9 million decrease in the average balance that was primarily due to principal repayments.

​

Interest Expense. Interest expense increased by $11.7 million, or 64.5%, to $29.9 million for the nine months ended September 30, 2024 from $18.2 million for the nine months ended September 30, 2023. Interest expense on interest-bearing deposits increased by $9.4 million, or 70.9%, to $22.7 million for the nine months ended September 30, 2024 from $13.3 million for the nine months ended September 30, 2023. The increase in interest expense on interest-bearing deposits was primarily due to a 96 basis point increase in the rate paid on certificates of deposit and a $92.2 million increase in the average balance of certificates of deposit. The average rate paid on certificates of deposit increased to 4.30% for the nine months ended September 30, 2024, from 3.34% for the nine months ended September 30, 2023. Interest expense on savings accounts increased by $3.1 million, or 205.3%, to $4.6 million for the nine months ended September 30, 2024 from $1.5 million for the nine months ended September 30, 2023. The increase in interest expense on savings accounts occurred primarily because of a 62 basis point increase in the rate which was partially offset by a $109.6 million, or 13.4%, decrease in the average balance of savings accounts. The increase in the rates on

38

Table of Contents

certificates of deposit and savings accounts were primarily due to increases in market interest rates. The changes in the average balance of savings accounts and certificates of deposit occurred primarily as customers transferred funds from savings accounts with relatively low interest rates to our certificates of deposit with higher interest rates or withdrew their deposits and sought higher interest rates elsewhere. Interest expense on advances from the FRB was $1.8 million for the nine months ended September 30, 2024 due to a $50.0 million advance from the FRB BTFP that was obtained to enhance our liquidity and to fund the decrease in deposits. There were no advances from the FRB during the nine months ended September 30, 2023. Interest expense on FHLB advances rose by $548,000, or 11.5%, from $4.8 million for the nine months ended September 30, 2023 to $5.3 million for the nine months ended September 30, 2024. The increase in interest expense occurred because of a 41 basis point increase in the cost of FHLB advances and was partially offset by a $7.5 million, or 3.2%, decrease in the average FHLB advance balance.

​

Provision for Credit Losses. We recorded a provision for credit losses of $22,000 and a reversal of provision for credit losses of $147,000 during the nine months ended September 30, 2024 and 2023, respectively. The provision for credit losses in the nine months ended September 30, 2024 was primarily due to an increase in loans in the consumer loan portfolio and a decrease in its forecasted prepayments. This increase to the provision was partially offset by a decrease in the forecasted charge-offs in the real estate portfolio and an increase in the forecasted prepayments in the real estate and commercial portfolio. The reversal of provision for credit losses in the nine months ended September 30, 2023 was primarily due to a decrease in our real estate portfolio’s forecasted charge-offs that was partially offset by a decrease in its forecasted prepayments. The provisions recorded resulted in ratios of the allowance for credit losses to total loans of 0.39% and 0.38% at September 30, 2024 and 2023, respectively. Nonaccrual loans totaled $2.3 million, or 0.18% of total loans at September 30, 2024 and 2023. Nonaccrual loans as of September 30, 2024 and 2023 consisted primarily of one- to four-family residential real estate loans. The allowance at September 30, 2024 and 2023 reflects management’s best estimate of losses over the life of loans in our portfolio in accordance with the CECL approach. For additional information see Note (6), “Loans Receivable and Allowance for Credit Losses” in our Notes to Consolidated Financial Statements.

​

Noninterest Income. The following table summarizes changes in noninterest income between the nine months ended September 30, 2024 and 2023.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

 

Nine Months Ended

 

 

 

 

 

 

 

 

 

September 30,

 

Change

​

 

 

 

2024

 

2023

 

$ Change

    

% Change

 

​

​

​

​

​

​

(Dollars in thousands)

​

​

​

​

Service and other fees

​

$

885

​

$

1,022

​

$

(137)

 

(13.4)

%  

​

Income on bank-owned life insurance

​

 

750

​

 

628

​

 

122

 

19.4

%

​

Net gain on sale of loans

​

 

19

​

 

10

​

 

9

 

90.0

%  

​

Other

​

 

215

​

 

208

​

 

7

 

3.4

%  

​

Total

​

$

1,869

​

$

1,868

​

$

1

 

0.1

%

​

​

Noninterest income increased by $1,000 for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase in bank-owned life insurance income was primarily due to higher market interest rates. Service and other fees decreased primarily due to a decrease in broker fee income, appraisal fee income, and NOW return item fees.

​

39

Table of Contents

Noninterest Expense. The following table summarizes changes in noninterest expense between the nine months ended September 30, 2024 and 2023.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

 

Nine Months Ended

 

 

 

 

 

 

 

 

 

September 30,

 

Change

    

 

 

 

2024

    

2023

 

$ Change

 

% Change

 

​

​

​

​

​

​

(Dollars in thousands)

​

​

​

​

Salaries and employee benefits

​

$

14,606

​

$

15,723

​

$

(1,117)

 

(7.1)

%  

​

Occupancy

​

 

5,319

​

 

5,201

​

 

118

 

2.3

%  

​

Equipment

​

 

3,987

​

 

3,878

​

 

109

 

2.8

%  

​

Federal deposit insurance premiums

​

 

1,281

​

 

737

​

 

544

 

73.8

%  

​

Other general and administrative expenses

​

 

4,851

​

 

3,251

​

 

1,600

 

49.2

%  

​

Total

​

$

30,044

​

$

28,790

​

$

1,254

 

4.4

%  

​

​

Noninterest expense increased by $1.3 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. Other general and administrative expenses included $1.2 million of merger related legal and consulting expenses and a writeoff of $135,000 of cash destroyed in the Maui wildfire that was deemed unrecoverable. The increase in federal deposit insurance premiums was primarily due to an increase in the FDIC premium rate. The decrease in salaries and employee benefits was primarily due to a decrease in compensation expense and various benefit expenses which was partially offset by a decrease in deferred salary expense for originating new loans.

​

Income Tax (Benefit) Expense. The income tax benefit was $1.1 million for the nine months ended September 30, 2024, reflecting an effective tax benefit rate of 30.7%, compared to income tax expense of $1.7 million for the nine months ended September 30, 2023, reflecting an effective tax rate of 27.1%.

​

​

Liquidity and Capital Resources

​

Liquidity is the ability to meet current and future financial obligations. Our primary obligations include meeting the borrowing needs of our customers, fulfilling deposit withdrawals, interest payment on deposits, and repayment of borrowings. Our primary sources of funds consist of deposit inflows, cash balances at the FRB, loan and security repayments, advances from the FHLB and FRB, securities sold under agreements to repurchase, and proceeds from loan and security sales. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and mortgage and mortgage-backed security prepayments are greatly influenced by general interest rates, economic conditions, and competition. We have established an Asset/Liability Management Committee, consisting of our President and Chief Executive Officer, our Vice Chairman and Co-Chief Operating Officer, our Executive Vice President and Chief Financial Officer, our Executive Vice President of Finance, and our Vice President and Senior Treasury Analyst, which is responsible for establishing and monitoring our liquidity targets and strategies in order to ensure that sufficient liquidity exists for meeting the borrowing needs and deposit withdrawals of our customers as well as unanticipated contingencies. We believe that we have enough sources of liquidity to satisfy our short- and long-term liquidity needs as of September 30, 2024.

​

We regularly monitor and adjust our investments in liquid assets based upon our assessment of:

​

(i)expected loan demand;

​

(ii)purchases and sales of investment securities;

​

(iii)expected deposit flows and borrowing maturities;

​

(iv)yields available on interest-earning deposits and securities; and

​

(v)the objectives of our asset/liability management program.

​

Excess liquid assets are invested generally in interest-earning deposits or securities and may also be used to pay off short-term borrowings.

​

40

Table of Contents

Our most liquid asset is cash. The amount of this asset is dependent on our operating, financing, lending, and investing activities during any given period. At September 30, 2024, our cash and cash equivalents totaled $143.1 million. If we require funds beyond our ability to generate them internally, borrowing agreements exist with the FHLB and FRB, which provide an additional source of funds. We also utilize securities sold under agreements to repurchase as another borrowing source. At September 30, 2024, we had the ability to borrow an additional $364.3 million and $158.7 million from the FHLB and FRB, respectively. In addition, we had the ability to borrow up to $61.1 million, using our unpledged securities as collateral, from the FRB or using securities sold under agreements to repurchase.

​

Our cash flows are derived from operating activities, investing activities, and financing activities as reported in our Consolidated Statements of Cash Flows included in our Consolidated Financial Statements.

​

We had estimated uninsured deposits (in excess of the federal deposit insurance limit of $250,000) of $507.0 million, or 30.4% of total deposits as of September 30, 2024, compared to an estimated $419.4 million, or 25.6% of total deposits as of December 31, 2023.  The increase in uninsured deposits was primarily due to a $92.7 million increase in certificates of deposit held by state and local governments which was used to payoff $65.0 million of maturing FHLB advances and to increase our liquidity. Our estimate is calculated on the same basis used for regulatory reporting. We have no deposits that are uninsured for any other reason.

​

At September 30, 2024, we had $3.1 million in loan commitments outstanding for fixed-rate loans and had $17.6 million in unused lines of credit to borrowers. Certificates of deposit due within one year of September 30, 2024 totaled $628.4 million, or 37.6% of total deposits. If these deposits do not remain with us, we may be required to seek other sources of funds, including loan and security sales, brokered deposits, securities sold under agreements to repurchase, and FHLB and FRB advances. Depending on market conditions, we may be required to pay higher rates on such deposits or other borrowings than we currently pay on the certificates of deposit due on or before September 30, 2025. We have the ability to attract and retain deposits by adjusting the interest rates offered.

​

Our primary investing activities are originating loans and purchasing mortgage-backed securities. During the nine months ended September 30, 2024 and 2023, we originated $51.3 million and $83.0 million of loans, respectively. During the nine months ended September 30, 2023, we purchased securities with a face value of $6.8 million. We did not purchase any securities in the nine months ended September 30, 2024.

​

Financing activities consist primarily of activity in deposit accounts, FHLB advances, FRB advances, securities sold under agreements to repurchase, stock repurchases, and dividend payments. We experienced a net increase in deposits of $33.7 million for the nine months ended September 30, 2024. Deposit flows are affected by the overall level of interest rates, the interest rates and products offered by us and our local competitors, and by other factors. At September 30, 2024, FHLB and FRB advances were $177.0 million and $50.0 million, respectively. At December 31, 2023, FHLB and FRB advances were $242.0 million and $50.0 million, respectively.

​

Territorial Bancorp Inc. is a separate legal entity from Territorial Savings Bank and must provide for its own liquidity to pay dividends, repurchase shares of its common stock, and for other corporate purposes. Territorial Bancorp Inc.’s primary source of liquidity is dividend payments from Territorial Savings Bank. The ability of Territorial Savings Bank to pay dividends to Territorial Bancorp Inc. is subject to regulatory requirements. At September 30, 2024, Territorial Bancorp Inc. (on an unconsolidated, stand-alone basis) had liquid assets of $15.8 million.

​

Territorial Savings Bank is subject to various regulatory capital requirements, including a risk-based capital measure. The risk-based capital guidelines include both a definition of capital and a framework for calculating risk-weighted assets by assigning balance sheet assets and off-balance sheet items to broad risk categories. Territorial Bancorp Inc. is not subject to regulatory capital requirements because its total assets are less than $3.0 billion. At September 30, 2024, Territorial Savings Bank exceeded all of the fully phased in regulatory capital requirements and is considered to be “well capitalized” under regulatory guidelines.

​

41

Table of Contents

The tables below present the fully-phased in capital required to be considered “well-capitalized” and meet the regulatory capital conservation buffer requirement as a percentage of total and risk-weighted assets and the percentage and the total amount of capital maintained for Territorial Savings Bank and the Company at September 30, 2024 and December 31, 2023:

​

​

​

​

​

​

​

​

​

​

​

(Dollars in thousands)

    

Required Ratio

    

    

Actual Amount

    

Actual Ratio

 

September 30, 2024:

​

​

​

​

​

​

​

​

​

Tier 1 Leverage Capital

​

​

​

​

​

​

​

​

​

Territorial Savings Bank

 

5.00

%

​

$

238,079

​

10.82

%

Territorial Bancorp Inc.

 

​

​

​

$

254,676

​

11.57

%

Common Equity Tier 1 Risk-Based Capital (1)

​

​

​

​

​

​

​

​

​

Territorial Savings Bank

 

9.00

%

​

$

238,079

​

26.67

%

Territorial Bancorp Inc.

 

​

​

​

$

254,676

​

28.51

%

Tier 1 Risk-Based Capital (1)

​

​

​

​

​

​

​

​

​

Territorial Savings Bank

 

10.50

%

​

$

238,079

​

26.67

%

Territorial Bancorp Inc.

 

​

​

​

$

254,676

​

28.51

%

Total Risk-Based Capital (1)

​

​

​

​

​

​

​

​

​

Territorial Savings Bank

 

12.50

%

​

$

243,134

​

27.24

%

Territorial Bancorp Inc.

 

​

​

​

$

259,731

​

29.07

%

​

​

​

​

​

​

​

​

​

​

December 31, 2023:

​

​

​

​

​

​

​

​

​

Tier 1 Leverage Capital

​

​

​

​

​

​

​

​

​

Territorial Savings Bank

 

5.00

%

​

$

238,972

​

10.86

%

Territorial Bancorp Inc.

 

​

​

​

$

257,307

​

11.69

%

Common Equity Tier 1 Risk-Based Capital (1)

​

​

​

​

​

​

​

​

​

Territorial Savings Bank

 

9.00

%

​

$

238,972

​

26.31

%

Territorial Bancorp Inc.

 

​

​

​

$

257,307

​

28.33

%

Tier 1 Risk-Based Capital (1)

​

​

​

​

​

​

​

​

​

Territorial Savings Bank

 

10.50

%

​

$

238,972

​

26.31

%

Territorial Bancorp Inc.

 

​

​

​

$

257,307

​

28.33

%

Total Risk-Based Capital (1)

​

​

​

​

​

​

​

​

​

Territorial Savings Bank

 

12.50

%

​

$

244,093

​

26.87

%

Territorial Bancorp Inc.

 

​

​

​

$

262,428

​

28.89

%

(1)The required Common Equity Tier 1 Risk-Based Capital, Tier 1 Risk-Based Capital and Total Risk-Based Capital ratios are based on the fully-phased in capital ratios in the Basel III capital regulations plus the 2.50% capital conservation buffer.

​

Prompt Corrective Action provisions define specific capital categories based on an institution’s capital ratios. However, the regulators may impose higher minimum capital standards on individual institutions or may downgrade an institution from one capital category to a lower category because of safety and soundness concerns. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our Consolidated Financial Statements.

​

Prompt Corrective Action provisions impose certain restrictions on institutions that are undercapitalized. The restrictions imposed become increasingly more severe as an institution’s capital category declines from “undercapitalized” to “critically undercapitalized.”

​

At September 30, 2024 and December 31, 2023, the Bank’s capital ratios exceeded the minimum capital thresholds for a “well-capitalized” institution. There are no conditions or events that have changed the institution’s category under the capital guidelines.

​

Depending on the amount of dividends to be paid, the Bank is required to either notify or make application to the Federal Reserve Bank before dividends are paid to the Company.

42

Table of Contents

​

The federal banking agencies, including the Federal Reserve Board, are required to establish a “community bank leverage ratio” between 8% to 10% of average total consolidated assets for qualifying institutions with assets of less than $10 billion. Institutions with capital meeting the specified requirements and electing to follow the alternative framework would be deemed to comply with the applicable regulatory capital requirements, including the risk based requirements. The federal regulators have currently adopted 9% as the applicable ratio. We have not elected to follow the alternative framework.

​

Off-Balance Sheet Arrangements and Aggregate Contractual Obligations

​

Commitments. As a financial services provider, we routinely are a party to various financial instruments with off-balance sheet risks, such as commitments to extend credit and unused lines of credit. While these contractual obligations represent our potential future cash requirements, a significant portion of commitments to extend credit may expire without being drawn upon. Such commitments are subject to the same credit policies and approval process accorded to loans we make. In addition, we enter into commitments to sell mortgage loans.

​

Contractual Obligations. In the ordinary course of our operations, we enter into certain contractual obligations. Such obligations include operating leases for premises and equipment, agreements with respect to borrowed funds and deposit liabilities, and agreements with respect to investments. Between December 31, 2023 and September 30, 2024, there have not been any material changes in our contractual obligations or funding needs.

​

ITEM 3.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

​

General. Our most significant form of market risk is interest rate risk because, as a financial institution, the majority of our assets and liabilities are sensitive to changes in interest rates. Therefore, a principal part of our operations is to manage interest rate risk and limit the exposure of our net interest income to changes in market interest rates. Our Board of Directors has established an Asset/Liability Management Committee, which is responsible for evaluating the interest rate risk inherent in our assets and liabilities, for determining the level of risk that is appropriate, given our business strategy, operating environment, capital, liquidity, and performance objectives, and for managing this risk consistent with the guidelines approved by the Board of Directors.

​

Because we have historically operated as a traditional thrift institution, the significant majority of our assets consist of long-term, fixed-rate residential mortgage loans and mortgage-backed securities, which we have funded primarily with deposit inflows, cash balances at the FRB, loan and security repayments, advances from the FHLB and FRB, our capital, proceeds from securities sold under agreements to repurchase, and proceeds from loan and security sales. In addition, there is little demand for adjustable-rate mortgage loans in the Hawaii market area. This has resulted in our being particularly vulnerable to increases in interest rates, as our interest-bearing liabilities mature or reprice more quickly than our interest-earning assets.

​

Our policies do not permit hedging activities, such as engaging in futures, options or swap transactions, or investing in high-risk mortgage derivatives, such as collateralized mortgage obligation residual interests, real estate mortgage investment conduit residual interests or stripped mortgage-backed securities.

​

Economic Value of Equity. We use an interest rate sensitivity analysis that computes changes in the economic value of equity (EVE) of our cash flows from assets, liabilities, and off-balance sheet items in the event of a range of assumed changes in market interest rates. EVE represents the market value of portfolio equity and is equal to the present value of assets minus the present value of liabilities, with adjustments made for off-balance sheet items. This analysis assesses the risk of loss in market-risk-sensitive instruments in the event of an instantaneous and sustained 100 to 400 basis point increase or decrease in market interest rates with no effect given to any steps that we might take to counter the effect of that interest rate movement. A basis point equals one-hundredth of one percent, and 100 basis points equals one percent. An increase in interest rates from 3% to 4% would mean, for example, a 100 basis point increase in the “Change in Interest Rates” column below.

​

43

Table of Contents

The following table presents our internal calculations of the estimated changes in our EVE as of June 30, 2024 (the latest date for which we have available information) that would result from the designated instantaneous changes in the interest rate yield curve.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

 

 

 

 

 

 

 

 

 

 

 

Increase

 

​

 

 

 

 

 

 

 

 

 

 

 

 

(Decrease) in

 

​

 

 

​

 

 

Estimated 

 

 

 

EVE Ratio as a

 

EVE Ratio as a

 

​

Change in

 

​

 

 

Increase 

 

 

 

Percent of

 

Percent of

 

​

Interest Rates

 

Estimated EVE

 

(Decrease) in 

 

Percentage

 

Present Value

 

Present Value of

 

​

(bp) (1)

 

(2)

 

EVE

 

 Change in EVE

 

of Assets (3)(4)

 

Assets (3)(4)

 

​

(Dollars in thousands)

 

​

+400

​

$

(53,943)

​

$

(201,647)

 

(136.52)

%  

(3.72)

%  

(11.85)

%

​

+300

​

$

(9,386)

​

$

(157,090)

 

(106.35)

%  

(0.61)

%  

(8.74)

%

​

+200

​

$

39,570

​

$

(108,134)

 

(73.21)

%  

2.44

%  

(5.69)

%

​

+100

​

$

92,421

​

$

(55,283)

 

(37.43)

%  

5.39

%  

(2.74)

%

​

0

​

$

147,704

​

$

—

 

—

%  

8.13

%  

—

%

​

-100

​

$

200,681

​

$

52,977

​

35.87

%  

10.44

%  

2.31

%

​

-200

​

$

249,913

​

$

102,209

 

69.20

%  

12.31

%  

4.18

%

​

-300

​

$

290,475

​

$

142,771

 

96.66

%  

13.60

%  

5.47

%

​

-400

​

$

294,036

​

$

146,332

 

99.07

%  

13.30

%  

5.17

%

​

(1)Assumes an instantaneous uniform change in interest rates at all maturities.
(2)EVE is the difference between the present value of an institution’s assets and liabilities.
(3)Present value of assets represents the discounted present value of incoming cash flows on interest-earning assets.
(4)EVE Ratio represents EVE divided by the present value of assets.

​

Interest rates on Freddie Mac mortgage-backed securities decreased by 57 basis points between June 30, 2024 and Septemer 30, 2024. The decrease in mortgage interest rates has increased the value of our interest-earning assets.

​

Certain shortcomings are inherent in the methodologies used in determining interest rate risk through changes in EVE. Modeling changes in EVE requires making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. In this regard, the EVE table presented assumes that the composition of our interest-sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration or repricing of specific assets and liabilities. Accordingly, although the EVE table provides an indication of our interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our EVE and net interest income and will differ from actual results.

​

ITEM 4.      CONTROLS AND PROCEDURES

​

An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chairman of the Board, President and Chief Executive Officer and the Executive Vice President and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act of 1934, as amended) as of September 30, 2024. Based on that evaluation, the Company’s management, including the Chairman of the Board, President and Chief Executive Officer and the Executive Vice President and Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were effective.

​

During the quarter ended September 30, 2024, there have been no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

44

Table of Contents

PART II

​

ITEM 1.      LEGAL PROCEEDINGS

​

The Company and its subsidiaries are subject to various legal actions that are considered ordinary, routine litigation incidental to the business of the Company. In the opinion of management, based on currently available information, the resolution of these legal actions is not expected to have a material adverse effect on the Company’s results of operations, and no claim for money damages exceeds ten percent of the Company’s consolidated assets.

​

ITEM 1A.   RISK FACTORS

​

There have been no material changes to the risk factors as described in our Annual Report on Form 10-K for the period ended December 31, 2023 filed with the Securities and Exchange Commission.

​

​

ITEM 2.     UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES

​

(a)             Not applicable.

​

(b)             Not applicable.

​

(c)             Stock Repurchases. There were no repurchases of our shares of common stock during the three months ended September 30, 2024.

​

​

​

ITEM 3.      DEFAULTS UPON SENIOR SECURITIES

​

None.

​

ITEM 4.      MINE SAFETY DISCLOSURES

​

Not applicable.

​

ITEM 5.      OTHER INFORMATION

​

None.

​

ITEM 6.      EXHIBITS

​

The exhibits required by Item 601 of Regulation S-K are included with this Quarterly Report on Form 10-Q and are listed below.

​

​

45

Table of Contents

INDEX TO EXHIBITS

​

​

​

Exhibit

​

​

Number

​

Description

31.1

​

Certification of Allan S. Kitagawa, Chairman of the Board, President and Chief Executive Officer, Pursuant to Rule 13a-14(a) and Rule 15d-14(a).

​

​

​

31.2

​

Certification of Melvin M. Miyamoto, Executive Vice President and Chief Financial Officer, Pursuant to Rule 13a-14(a) and Rule 15d-14(a).

​

​

​

32

​

Certification of Allan S. Kitagawa, Chairman of the Board, President and Chief Executive Officer, and Melvin M. Miyamoto, Executive Vice President and Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

​

​

​

101

​

The following materials from Territorial Bancorp Inc.’s Form 10-Q report for the quarter ended September 30, 2024, formatted in Inline XBRL pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Income; (iii) Consolidated Statements of Comprehensive Income; (iv) Consolidated Statements of Stockholders’ Equity (v) Consolidated Statements of Cash Flows; and (vi) Notes to Consolidated Financial Statements.

​

​

​

101.INS

​

XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH

​

Inline XBRL Taxonomy Extension Schema Document

101.CAL

​

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

​

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

​

Inline XBRL Taxonomy Extension Label Linkbase

101.PRE

​

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

​

Cover Page Interactive Data File (formatted as inline XBRL document and contained in Exhibit 101)

​

​

46

Table of Contents

SIGNATURES

​

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

​

​

​

TERRITORIAL BANCORP INC.

​

(Registrant)

​

​

​

​

Date: November 13, 2024

/s/ Allan S. Kitagawa

​

Allan S. Kitagawa

​

Chairman of the Board, President and

​

Chief Executive Officer

​

​

​

​

Date: November 13, 2024

/s/ Melvin M. Miyamoto

​

Melvin M. Miyamoto

​

Executive Vice President and Chief Financial Officer

​

​

​

​

​

​

​

​

47