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SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the

Securities Exchange Act of 1934

(Amendment (Amendment No.          )

Filed by the Registrant  ☒                            Filed by a Party other than the Registrant  ☐

Check the appropriate box:

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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1132 Bishop Street, Suite 2200Table of Contents

Honolulu, Hawaii 96813

(808) 946-1400

April 24, 2017May 8, 2020

Dear Fellow Stockholder:

You are cordially invited to attend the 20172020 annual meeting of stockholders of Territorial Bancorp Inc. The meeting will be held at 1132 Bishop Street, Suite 611,601, Honolulu, Hawaii, on May 25, 2017,June 11, 2020, at 8:30 a.m., local time.

The notice of annual meeting and proxy statement appearing on the following pages describe the formal business to be transacted at the meeting. Officers of the Company will be present to respond to appropriate questions of stockholders.

As explained in the Proxy Statement, the Board of Directors recommends that you vote for:

▶

​Proposal 1: The Election of Directors;



▶

​Proposal 2: The Ratification of the Appointment of Moss Adams LLP as our Independent Registered Public Accounting Firm; and



▶

​Proposal 3: The Advisory Approval of our Executive Compensation.

It is important that your shares are represented at this meeting, whether or not you attend the meeting in person and regardless of the number of shares you own. To make sure your shares are represented, we urge you to complete and mail the enclosed proxy card promptly. If you attend the meeting, you may vote in person even if you have previously mailed a proxy card.

We look forward to seeing you at the meeting.

Sincerely,

Allan S. Kitagawa

Chairman of the Board, President and

Chief Executive Officer

		Sincerely,
		Allan S. Kitagawa Chairman of the Board, President and Chief Executive Officer

We are monitoring the emerging public health impact of the coronavirus (COVID-19). The health and well-being of our employees, stockholders, directors and other stakeholders are paramount. If public health developments warrant, we may change the date or location of the annual meeting, including the possibility that we may hold the annual meeting through a "virtual" or online method. Any such change will be announced as promptly as practicable, through a press release and a filing with the Securities and Exchange Commission, as well as any other notification required by state law.

    2020 Proxy Statement

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1132 Bishop Street, Suite 2200

Honolulu, Hawaii 96813
(808) 946-1400

(808)

NOTICE OF 20172020 ANNUAL MEETING OF STOCKHOLDERS

		Vernon Hirata
		Corporate Secretary
		April 24, 2017

		Vernon Hirata Corporate Secretary May 8, 2020

    2020 Proxy Statement

PROXY STATEMENTTable of Contents

This proxy statement is furnished in connection with the solicitation

Table of proxies by the Board of Directors of Territorial Bancorp Inc. (the “Company”) to be used at the annual meeting of stockholders of the Company. The Company is the holding company for Territorial Savings Bank (the “Bank”). The annual meeting will be held at 1132 Bishop Street, Suite 611, Honolulu, Hawaii, on Thursday, May 25, 2017, at 8:30 a.m., local time. This proxy statement and the enclosed proxy card are being mailed to stockholders of record on or about April 24, 2017.Contents

Voting and Proxy Procedure Who Can Vote at the Meeting You are entitled to vote your Company common stock if the records of the Company show that you held your shares as of the close of business on March 31, 2017. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by your broker or other nominee. As the beneficial owner, you have the right to direct your broker how to vote. As of the close of business on March 31, 2017, there were 9,807,648 shares of Company common stock outstanding for voting purposes. Each share of common stock has one vote. The Company’s Articles of Incorporation provide that, subject to certain exceptions, a record owner of the Company’s common stock for a person who beneficially owns, either directly or indirectly, in excess of 10% of the Company’s outstanding shares, is not entitled to any vote in respect of the shares held in excess of the 10% limit. Attending the Meeting If you were a stockholder as of the close of business on March 31, 2017, you may attend the meeting. However, if your shares of Company common stock are held by a broker, bank, or other nominee (i.e., in “street name”), you will need proof of ownership to be admitted to the meeting. A recent brokerage statement or a letter from a bank or broker are examples of proof of ownership. If you want to vote your shares of Company common stock held in street name in person at the meeting, you will have to get a written proxy in your name from the broker, bank, or other nominee who holds your shares. Vote Required A majority of the outstanding shares of common stock entitled to vote is required to be represented at the meeting to constitute a quorum for the transaction of business. If you return valid proxy instructions or attend the meeting in person, your shares will be counted for purposes of determining whether there is a quorum, even if you abstain from voting. Brokernon-votes also will be counted for purposes of determining the existence of a quorum. A brokernon-vote occurs when a broker, bank, or other nominee holding shares for a beneficial owner does not vote on a particular proposal because the broker, bank, or other nominee does not have discretionary voting power with respect to that item and has not received voting instructions from the beneficial owner. 1   1 In voting on the election of directors, you may vote in favor of all nominees, withhold votes as to all nominees, or withhold votes as to specific nominees. There is no cumulative voting for the election of directors. Directors are elected by a plurality of the votes cast at the annual meeting. This means that the nominees receiving the greatest number of votes will be elected. Votes that are withheld and brokernon-votes will have no effect on the outcome of the election. In addition, the Company has adopted a majority voting policy with respect to the election of directors. For more information, see “Majority Voting Policy.” In voting to ratify the appointment of Moss Adams LLP as our independent registered public accounting firm, you may vote in favor of the proposal, vote against the proposal, or abstain from voting. To be approved, this matter requires the affirmative vote of a majority of the votes cast at the annual meeting. Brokernon-votes and abstentions will not be counted as votes cast and will have no effect on this proposal. In voting on the nonbinding proposal to approve our executive compensation, you may vote in favor of the proposal, vote against the proposal, or abstain from voting. To approve the proposal, the affirmative vote of a majority of the votes cast at the annual meeting is required. Brokernon-votes and abstentions will not be counted as votes cast and will have no effect on this proposal. While this vote is required by law, it will neither be binding on us or the Board of Directors, nor will it create or imply any change in the fiduciary duties of, or impose any additional fiduciary duty on, us or the Board of Directors. In voting on thenon-binding proposal with respect to the frequency that stockholders will vote on our executive compensation, a stockholder may select that stockholders: (i) consider the proposal every “1 Year”; (ii) consider the proposal every “2 Years”; (iii) consider the proposal every “3 Years”; or (iv) “abstain” from voting on the proposal. Generally, approval of any matter presented to stockholders requires the affirmative vote of a majority of the votes cast. However, because this vote is advisory andnon-binding, if none of the frequency options receive a majority of the votes cast, the option receiving the greatest number of votes will be considered the frequency recommended by our stockholders. Brokernon-votes and abstentions will not be counted as votes cast and will have no effect on this proposal. Even though this vote will neither be binding on us or the Board of Directors, nor will it create or imply any change in the fiduciary duties of, or impose any additional fiduciary duty on us or the Board of Directors, the Board of Directors will take into account the outcome of this vote in making a determination on the frequency that advisory votes on executive compensation will be included in our proxy statements. In voting to approve an amendment to and tore-approve the material terms of the performance goals under the Territorial Bancorp Inc. 2010 Equity Incentive Plan, you may vote in favor of the proposal, against the proposal or abstain from voting. To be approved, this matter requires the affirmative vote of a majority of the votes cast at the annual meeting. Brokernon-votes and abstentions will not be counted as votes cast and will have no effect on this proposal. In voting tore-approve the material terms of the performance goals under the Territorial Bancorp Inc. Annual Incentive Plan, you may vote in favor of the proposal, against the proposal or abstain from voting. To be approved, this matter requires the affirmative vote of a majority of the votes cast at the annual meeting. Brokernon-votes and abstentions will not be counted as votes cast and will have no effect on this proposal. 2 Voting by Proxy The Company’s Board of Directors is sending you this proxy statement to request that you allow your shares of Company common stock to be represented at the annual meeting by the persons named in the enclosed proxy card. All shares of Company common stock represented at the meeting by properly executed and dated proxies will be voted according to the instructions indicated on the proxy card. If you sign, date, and return a proxy card without giving voting instructions, your shares will be voted as recommended by the Company’s Board of Directors. The Board of Directors recommends that you: ◾votefor each of the nominees for director; ◾ votefor ratification of the appointment of Moss Adams LLP as the Company’s independent registered public accounting firm; ◾  votefor the approval of our executive compensation as described in this proxy statement; ◾vote for the“1 Year” option with respect to the frequency that stockholders will vote on our executive compensation; ◾votefor the approval of an amendment to andre-approval of the material terms of the performance goals under the Territorial Bancorp Inc. 2010 Equity Incentive Plan; and ◾votefor there-approval of the material terms of the performance goals under the Territorial Bancorp Inc. Annual Incentive Plan. If any matters not described in this proxy statement are properly presented at the annual meeting and you have returned a validly executed proxy card, the persons named in the proxy card will use their judgment to determine how to vote your shares. This includes a motion to adjourn or postpone the meeting to solicit additional proxies. The Company does not currently know of any other matters to be presented at the meeting. You may revoke your proxy at any time before the vote is taken at the annual meeting. To revoke your proxy, you must advise the Corporate Secretary of the Company in writing before your common stock has been voted at the annual meeting, deliver a later dated proxy, or attend the meeting and vote your shares in person by ballot. Attendance at the annual meeting will not in itself constitute revocation of your proxy. If your Company common stock is held in street name, you will receive instructions from your broker or other nominee that you must follow to have your shares voted. Your broker or other nominee may allow you to deliver your voting instructions via the telephone or the Internet. Please review the proxy card or instruction form provided by your broker or other nominee that accompanies this proxy statement. Participants in the ESOP and 401(k) Plan If you participate in the Territorial Savings Bank Employee Stock Ownership Plan (the “ESOP”) or if you hold Territorial Bancorp Inc. common stock through the Territorial Savings Bank 401(k) Plan (the “401(k) Plan”), you will receive vote authorization forms for the plans that reflect all shares you may direct the trustees to vote on your behalf under the plans. Under the terms of the ESOP, the ESOP trustee votes all shares held by the ESOP, but each ESOP participant may direct the trustee how to vote the shares of common stock allocated to his or her account. The ESOP trustee, subject to the exercise of its fiduciary responsibilities, will vote all unallocated shares of Territorial Bancorp Inc. common stock held by the ESOP and allocated shares for which no voting instructions are received in the same proportion as shares for which it has received timely voting instructions. Under the terms of the 401(k) Plan, a participant 3 is entitled to provide voting instructions for all shares credited to his or her 401(k) Plan account and held in the Territorial Bancorp Inc. Stock Fund. Shares for which no voting instructions are given or for which instructions were not timely received will be voted in the same proportion as shares for which voting instructions were received.The deadline for returning your ESOP and 401(k) Plan voting instructions is May 18, 2017. If you have any questions about voting, please contact Senior Vice President and Director of Investor Relations, Walter Ida, at (808)946-1400.
Corporate Governance			4
▶ General			4
The Company periodically reviews its corporate governance policies and procedures to ensure that the Company meets the highest standards of ethical conduct, reports results with accuracy and transparency, and maintains full compliance with the laws, rules and regulations that govern the Company’s operations. As part of this periodic corporate governance review, the Board of Directors reviews and adopts what it believes to be best corporate governance policies and practices for the Company. ▶ Code of Ethics and Business Conduct We have adopted a Code of Ethics and Business Conduct that is designed to promote the highest standards of ethical conduct by our directors, executive officers, and employees. The Code of Ethics and Business Conduct requires that our directors, executive officers, and employees avoid conflicts of interest, comply with all laws and other legal requirements, conduct business in an honest and ethical manner, and otherwise act with integrity and in our best interest. Under the terms of the Code of Ethics and Business Conduct, directors, executive officers, and employees are required to report any conduct that they believe in good faith to be an actual or apparent violation of the Code of Ethics and Business Conduct. A copy of the Code of Ethics and Business Conduct can be found in the “TSB—Investor Relations—Corporate Governance” section of our Web site, www.territorialsavings.net. Amendments to and waivers from our Code of Ethics and Business Conduct will be disclosed in the “TSB—Investor Relations—Corporate Governance” section of our Web site. As a mechanism to encourage compliance with the Code of Ethics and Business Conduct, we have established procedures to receive, retain, and treat complaints regarding accounting, internal accounting controls, and auditing matters. These procedures ensure that individuals may submit concerns regarding questionable accounting or auditing matters in a confidential and anonymous manner. The Code of Ethics and Business Conduct also prohibits us from retaliating against any director, executive officer, or employee who reports actual or apparent violations of the Code of Ethics and Business Conduct. In addition, we have adopted a Code of Ethics for Senior Officers that is applicable to our senior financial officers, including our principal executive officer, principal financial officer, principal accounting officer, and all officers performing similar functions. A copy of the Code of Ethics for Senior Officers can be found in the “TSB—Investor Relations—Corporate Governance” section of our 4 4
Web site, www.territorialsavings.net. Amendments to and waivers from our Code of Ethics for Senior Officers will be disclosed in the “TSB—Investor Relations—Corporate Governance” section of our Web site. ▶ Meetings of the Board of Directors			4
The Company conducts business through meetings of its Board of Directors and through activities of its committees. During 2016, the Board of Directors held 15 meetings (not including committee meetings), and our independent directors met 13 times in executive session without management present. No director attended fewer than 75% of the total meetings of the Board of Directors and the committees on which such director served (held during the period for which the director has served as a director or committee member, as appropriate). ▶ Committees of the Board of Directors The following table identifies our Audit, Compensation, and Nominating and Corporate Governance committees and their members. All members of each committee are independent in accordance with the listing standards of the NASDAQ Stock Market, Inc. Each of these committees operates under a written charter that is available in the “TSB—Investor Relations—Corporate Governance” section of the Company’s Web site, www.territorialsavings.net.       Nominating and Corporate Governance    Compensation    Audit      Francis E. Tanaka *    Kirk W. Caldwell *    Howard Y. Ikeda *      Kirk W. Caldwell    Howard Y. Ikeda    Francis E. Tanaka      Richard I. Murakami    Richard I. Murakami    Richard I. Murakami                David S. Murakami Number of Meetings in 2016:    2    6    5 * Denotes Chairperson. 5
Audit Committee.    Pursuant to Territorial Bancorp Inc.’s Audit Committee Charter, the Audit Committee assists the Board of Directors in its oversight of the Company’s accounting and reporting practices, the quality and integrity of the Company’s financial reports and the Company’s compliance with applicable laws and regulations. The Audit Committee is also responsible for engaging the Company’s independent registered public accounting firm and monitoring its conduct and independence. In addition to meeting the independence requirements of the NASDAQ Stock Market, Inc., each member of the Audit Committee meets the audit committee independence requirements of the Securities and Exchange Commission. The Board of Directors has designated Howard Y. Ikeda as an audit committee financial expert under the rules of the Securities and Exchange Commission. The report of the Audit Committee required by the rules of the Securities and Exchange Commission is included in this proxy statement. See “Audit Committee Report.” 5 Compensation Committee.    Pursuant to Territorial Bancorp Inc.’s Compensation Committee Charter, the Compensation Committee approves the compensation objectives for the Company and Territorial Savings Bank and establishes the compensation for the Chief Executive Officer and other executives. Our Chairman of the Board, President and Chief Executive Officer, Allan Kitagawa, provides recommendations to the Compensation Committee on matters of compensation philosophy, plan design, and the general guidelines for employee compensation. However, Mr. Kitagawa does not vote on and is not present for any discussion of his own compensation. These recommendations are then considered by the Compensation Committee. The Compensation Committee reviews all compensation components for the Company’s Chief Executive Officer and other highly compensated executive officers’ compensation including base salary, annual incentive, long-term incentives, and perquisites. In addition to reviewing competitive market values, the committee also examines the total compensation mix,pay-for-performance relationship, and how all elements, in the aggregate, comprise the executive’s total compensation package. Decisions by the Compensation Committee with respect to the compensation of executive officers are approved by the full Board of Directors. See “Compensation Discussion and Analysis” for more information regarding the role of the Compensation Committee in determining and/or recommending the amount or form of executive compensation. The report of the Compensation Committee required by the rules of the Securities and Exchange Commission is included in this proxy statement. See “Compensation Committee Report.” Nominating and Corporate Governance Committee.    Pursuant to Territorial Bancorp Inc.’s Nominating and Corporate Governance Committee charter, the Nominating and Corporate Governance Committee assists the Board of Directors in identifying qualified individuals to serve as Board members, in determining the composition of the Board of Directors and its committees, in monitoring a process to assess Board effectiveness, and in developing and implementing the Company’s corporate governance guidelines. The Nominating and Corporate Governance Committee also considers and recommends the nominees for director to stand for election at the Company’s annual meeting of stockholders. The procedures of the Nominating and Corporate Governance Committee required to be disclosed by the rules of the Securities and Exchange Commission are included in this proxy statement. See “Nominating and Corporate Governance Committee Procedures.” ▶ Attendance at the Annual Meeting			6
The Board of Directors encourages each director to attend annual meetings of stockholders. All of our directors attended the 2016 Annual Meeting of Stockholders. ▶ Board Leadership Structure The Board of Directors currently combines the position of Chairman of the Board with the position of Chief Executive Officer, coupled with a lead independent director to strengthen the Company’s governance structure. The Board of Directors believes this provides an efficient and effective leadership model for the Company. Combining the Chairman of the Board and Chief Executive Officer positions fosters clear accountability, effective decision-making, alignment on corporate strategy, and a clear and direct channel of communication from senior management to the full Board of Directors. To further strengthen the leadership of the Board of Directors, the Board selects a lead independent director on an annual basis, currently Director Richard Murakami. The responsibilities of the lead 6 6
independent director include leading all Board meetings of “nonmanagement” directors. The Board of Directors believes its administration of its risk oversight function is not adversely affected by the Board of Directors’ leadership structure. To assure effective independent oversight, the Board has adopted a number of governance practices, including holding executive sessions of the independent directors at least twice a year or more often as needed. In addition, the Compensation Committee, which consists only of independent directors, evaluates the performance of our Chairman of the Board and Chief Executive Officer and presents its findings to our independent directors. ▶ Risk Oversight The Board of Directors has an active role, as a whole and also at the committee level, in overseeing management of the Company’s risks. The Board of Directors satisfies this responsibility through the review of minutes from each committee regarding such committee’s considerations and actions, through frequent attendance as nonvoting guests at committee meetings and through regular reports directly from officers responsible for oversight of particular risks within our organization. The Board of Directors regularly reviews information regarding the Company’s credit, liquidity, and operations, as well as the risks associated with such areas. The Company’s Compensation Committee is responsible for overseeing the management of risks relating to the Company’s executive compensation plans and arrangements. The Audit Committee oversees management of financial risks. The Nominating and Corporate Governance Committee manages risks associated with the Company’s corporate governance, including the independence of the Board of Directors and potential conflicts of interest. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board of Directors is regularly informed about such risks. The Board of Directors annually reviews our conflicts of interest policy to ensure all directors are in compliance with the policy. Risks relating to the direct operations of Territorial Savings Bank are further overseen by its Board of Directors, who are the same individuals who serve on the Board of Directors of Territorial Bancorp Inc. The Board of Directors of Territorial Savings Bank also has additional committees that conduct additional risk oversight. Further, the Board of Directors oversees risks through the establishment of policies and procedures that are designed to guide daily operations in a manner consistent with applicable laws, regulations, and risks acceptable to the organization, such as the requirement that all loan relationships in excess of $5.0 million must be submitted to the Board of Directors Loan Committee for approval, subject to ratification by the full Board of Directors, or to the full Board of Directors for approval.			6
Stock Ownership The following table provides information as of March 31, 2017, with respect to persons known by the Company to be the beneficial owners of more than 5% of the Company’s outstanding common stock. A person may be considered to own any shares of common stock over which he or she has, directly or indirectly, sole or shared voting or investing power. Percentages are based on 9,807,648 shares of Company common stock issued and outstanding as of March 31, 2017. 8   7 Name and Address      Number of Shares Owned      Percent of Common Stock Outstanding   Territorial Savings Bank Employee Stock Ownership Plan 1132 Bishop St., Suite 2200 Honolulu, Hawaii 96813      960,190    9.8% Renaissance Technologies LLC (1) Renaissance Technologies Holdings Corporation 800 Third Avenue New York, New York 10022      502,900    5.1% (1)  As disclosed in Schedule 13G filed with the Securities and Exchange Commission on February 14, 2017.
Proposal 1 — Election of Directors The Board of Directors of Territorial Bancorp Inc. is presently composed of six members. The Board is divided into three classes, each with three-year staggered terms, with approximatelyone-third of the directors elected each year. The nominees for election this year are Howard Y. Ikeda and David S. Murakami, both of whom are current directors of the Company and the Bank. The Board of Directors has determined that each of our directors, with the exception of Chairman of the Board, President and Chief Executive Officer Allan S. Kitagawa, is “independent” as defined in the listing standards of the NASDAQ Stock Market. Mr. Kitagawa is not independent because he is one of our executive officers. In determining the independence of the directors listed above, the Board of Directors reviewed the following transactions, none of which is required to be reported under “Transactions with Certain Related Persons” below. Director Kirk W. Caldwell has a mortgage loan and overdraft protection with Territorial Savings Bank. Director David S. Murakami has a mortgage loan, a home equity line of credit and overdraft protection with Territorial Savings Bank. Director Richard I. Murakami has a mortgage loan and overdraft protection with Territorial Savings Bank. Director Francis E. Tanaka has a mortgage loan with Territorial Savings Bank. It is intended that the proxies solicited by the Board of Directors will be voted for the election of the nominees named below. If any nominee is unable to serve, and you have returned a validly executed proxy card, the persons named in the proxy card will vote your shares to approve the election of any substitute proposed by the Board of Directors. Alternatively, the Board of Directors may adopt a resolution to reduce the size of the Board. At this time, the Board of Directors knows of no reason why any nominee might be unable to serve. The following table sets forth certain information regarding our directors, nominees proposed by the Board of Directors, and executive officers. Shares beneficially owned include shares of common stock over which a person has, directly or indirectly, sole or shared voting or investment power. Unless otherwise indicated, none of the shares listed are pledged as security, and each of the named individuals has sole voting power and sole investment power with respect to the number of shares shown. Percentages of common stock owned are based on 9,807,648 shares of Company common stock issued and outstanding as of March 31, 2017. 8 9   Name   Position(s) Held With Territorial Bancorp Inc.   Age (1)   Director Since (2)   Current Term Expires   Shares Beneficially Owned as of March 31,  2017   Percent of Common Stock NOMINEES Howard Y. Ikeda   Director   71   1988   2017   70,975 (3)   * David S. Murakami (4)   Director   77   2006   2017   56,075 (5)   * CONTINUING DIRECTORS Allan S. Kitagawa   Chairman of the Board, President and Chief Executive Officer   71   1986   2018   296,743 (6)   3.0% Richard I. Murakami (4)   Director   89   1981   2018   82,024 (7)   * Kirk W. Caldwell   Director   64   2007   2019   79,877 (8)   * Francis E. Tanaka   Director   71   2011   2019   4,839 (9)   * EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS Vernon Hirata   Vice Chairman,Co-Chief Operating Officer, General Counsel and Corporate Secretary   64           261,724 (10)   2.7% Ralph Y. Nakatsuka   Vice Chairman andCo-Chief Operating Officer   61           262,214 (11)   2.7% Karen J. Cox   Senior Vice President-Administration   71           49,009 (12)   * Richard K.C. Lau   Senior Vice President and Chief Lending Officer   74           70,733 (13)   * Melvin M. Miyamoto   Senior Vice President, Treasurer and Chief Financial Officer   63           50,552 (14)   * All Directors and Executive Officers as a Group (11 persons)               1,284,765   13.1% * Less than 1%. (1)  As of December 31, 2016. (2)  Includes service with Territorial Savings Bank. (3)  Includes 3,200 shares held by an individual retirement account, 10,022 shares owned by Mr. Ikeda’s spouse, and 31,275 stock options that are exercisable within 60 days of March 31, 2017. (4)  David S. Murakami and Richard I. Murakami are not related. (5)  Includes 900 shares held jointly by David S. Murakami’s spouse and his children, and 31,275 stock options that are exercisable within 60 days of March 31, 2017. (6)  Includes 27,355 shares held through the Territorial Savings Bank 401(k) Plan, 9,286 shares held through the Territorial Savings Bank Employee Stock Ownership Plan, 10,000 shares owned by Mr. Kitagawa’s spouse, and 111,419 stock options that are exercisable within 60 days of March 31, 2017. 9 (7)  Includes 10,000 shares held in trust, 34,395 stock options that are exercisable within 60 days of March 31, 2017 and 6,141 unvested shares of restricted stock over which Mr. Richard I. Murakami has voting power. (8)  Includes 41,275 stock options that are exercisable within 60 days of March 31, 2017. (9)  Includes 3,085 stock options that are exercisable within 60 days of March 31, 2017. (10)  Includes 37,418 shares held through the Territorial Savings Bank 401(k) Plan, 9,286 shares held through the Territorial Savings Bank Employee Stock Ownership Plan, 15,600 shares held in trust, 377 shares owned by Mr. Hirata’s spouse, and 142,410 stock options that are exercisable within 60 days of March 31, 2017. (11)  Includes 9,286 shares held through the Territorial Savings Bank Employee Stock Ownership Plan and 146,430 stock options that are exercisable within 60 days of March 31, 2017. (12)  Includes 13,791 shares held through the Territorial Savings Bank 401(k) Plan, 7,885 shares held through the Territorial Savings Bank Employee Stock Ownership Plan, 500 shares held as trustee for two grandchildren, and 14,643 stock options that are exercisable within 60 days of March 31, 2017. (13)  Includes 11,330 shares held through the Territorial Savings Bank 401(k) Plan, 8,534 shares held through the Territorial Savings Bank Employee Stock Ownership Plan, 1,500 shares held by a corporation, and 19,524 stock options that are exercisable within 60 days of March 31, 2017. (14)  Includes 14,737 shares held through the Territorial Savings Bank 401(k) Plan, 7,816 shares held through the Territorial Savings Bank Employee Stock Ownership Plan, and 19,524 stock options that are exercisable within 60 days of March 31, 2017.
The Board of Directors recommends a vote “FOR” the election of all nominees. The business experience for at least the past five years of each of our directors and nominees proposed by the Board of Directors is set forth below. The biographies of each of the nominees and continuing Board members below contain information regarding the person’s business experience and the experiences, qualifications, attributes, or skills that caused the Nominating Committee and the Board of Directors to determine that the person should serve as a director. Each director is also a director of Territorial Savings Bank. Unless otherwise indicated, directors and executive officers have held their positions for the past five years. All of the nominees and directors continuing in office are long-time residents of the communities served by Territorial Bancorp Inc. and its subsidiaries and many of such individuals have operated, or currently operate, businesses located in such communities. As a result, each nominee and director continuing in office has significant knowledge of the businesses that operate in Territorial Bancorp Inc.’s market area, an understanding of the general real estate market, values and trends in such communities, and an understanding of the overall demographics of such communities. Additionally, as residents of such communities, each nominee and continuing director has direct knowledge of the trends and developments occurring in such communities. As the holding company for a community banking institution, Territorial Bancorp Inc. believes that the local knowledge and experience of its directors assists Territorial Bancorp Inc. in assessing the credit and banking needs of its customers, developing products and services to better serve its customers, and assessing the risks inherent in its lending operations, and provides Territorial Bancorp Inc. with greater business development opportunities. As local residents, our nominees and directors are also exposed to the advertising, product offerings, and community development efforts of competing institutions which, in turn, assists Territorial Bancorp Inc. in structuring its marketing efforts and community outreach programs. 10 ▶ Nominees for Election of Directors			11
The nominees standing for election are: Howard Y. Ikeda Howard Y. Ikeda is the President of Ikeda and Wong, CPA, Inc., an independent public accounting firm in the State of Hawaii. Mr. Ikeda is a Certified Public Accountant licensed to practice in the State of Hawaii. He began his career with what is now KPMG LLP and has been in public accounting for over 40 years. His firm is now one of the larger independent accounting firms in Hawaii. Mr. Ikeda’s professional and business experience provide the Board of Directors with valuable insight into the accounting issues Territorial Bancorp Inc. faces and in assessing strategic transactions involving Territorial Bancorp Inc. and Territorial Savings Bank. His experience as a Certified Public Accountant qualifies him to be a member of the Audit Committee as a “financial expert” for purposes of the rules and regulations of the Securities and Exchange Commission. David S. Murakami David S. Murakami was a Certified Residential Appraiser in the State of Hawaii, and was the owner of DSM Appraisal Company from 1982 until 2011, when he retired. His firm focused on appraising residential real property. Mr. Murakami previously worked as a Senior Vice President-Loan Administrator with financial institutions in the State of Hawaii beginning in 1962. Mr. Murakami’s business experience, both with financial institutions and as a Certified Residential Appraiser, gives him extensive insights into Territorial Savings Bank’s challenges and opportunities in its overall operations and lending activities. He is also well-known in the local community as he was a long-time assistant coach for the highly visible University of Hawaii-Manoa baseball program. ▶ Directors Continuing in Office The following directors have terms ending in 2018: Allan S. Kitagawa 12 Allan S. Kitagawa has served as Chairman of the Board and Chief Executive Officer of Territorial Savings Bank since 1986, and was named President in 2007. Mr. Kitagawa worked with American Savings and Loan Association from 1974 to 1986, including service as Executive Vice President and Chief Executive Officer of the Hawaii Division. Mr. Kitagawa is a Certified Public Accountant who began his career with what is now KPMG LLP. Under Mr. Kitagawa’s leadership, Territorial Savings Bank has grown significantly while the Bank’s conservative lending practices have resulted in continued low levels of nonperforming assets. Richard I. Murakami Richard I. Murakami is the retired President of a major building, material and bonding company in Hawaii and previously was employed for 20 years as a Vice President of a Hawaii based commercial bank. Mr. Murakami is a well-known and respected member of the Japanese-American community. He also provides insight into the traditional savings and loan depositor as these customers constitute a significant part of the customer base of Territorial Savings Bank. 11 The following directors have terms ending in 2019: Kirk W. Caldwell Kirk W. Caldwell was elected Mayor of the City and County of Honolulu in November 2012, and took office January 2, 2013. He previously held this position as acting Mayor from July 2010 to October 2012. Mr. Caldwell served as Managing Director of the City and County of Honolulu, Hawaii, from January 2009 until July 2010. Mr. Caldwell was Of Counsel to the law firm of Ashford & Wriston from 2011 until December 31, 2012, where he had worked from 1984 until 2009, including as partner. Much of his practice consisted of representing financial institutions, including Territorial Savings Bank. Prior to his appointment as Managing Director of the City and County of Honolulu, Mr. Caldwell also served as the majority leader of the State of Hawaii House of Representatives, and had served as a state representative since 2002. Mr. Caldwell provides the Board of Directors with a significant understanding of the communities in which we operate. Moreover, his experience as an attorney that represented financial institutions continues to provide value to the Board since the Bank is regulated by both the state and federal banking regulators. Francis E. Tanaka Francis E. Tanaka retired in 2001 as the Executive Vice President – Controller of Haseko (Hawaii), Inc., the U.S. subsidiary of a large Japanese publicly-traded company that is in the engineering, construction, real estate development, investment, and property management business throughout the world. For 18 years, Mr. Tanaka was in charge of the financial management of the Hawaii subsidiary, which still conducts residential, office, and commercial development in Hawaii. Prior to that, he was controller of a construction company. He is a Certified Public Accountant and was employed by national and local certified public accounting firms early in his career. He continues to perform limited tax services and business consulting in his retirement. Mr. Tanaka’s financial and accounting background, including supervision and preparation of financial statements for a Securities and Exchange Commission-registered real estate venture of the Hawaii subsidiary, adds depth to the Audit Committee. He also provides the Board of Directors with knowledge of real estate development in Hawaii and of Japanese companies doing business in Hawaii.
Proposal 2 — Ratification of Independent Registered Public Accounting Firm			14
The ▶ Audit Fees			14
▶ Pre-Approval of Services by the Independent Registered Public Accounting Firm			14
Proposal 3 — Advisory (Non-Binding) Vote on Executive Compensation			15
Audit Committee Report			16
Information about Executive Officers			17
Executive Compensation			18
▶ Directors Fees			18
▶ Narrative Discussion of Executive Compensation			18
▶ Company Background and Performance Highlights			19
▶ 2019 Compensation Program Summary			20
▶ Our Compensation Philosophy and Program Components			21
▶ 2019 Base Salary			21
▶ 2019 Annual Incentive Plan			22
▶ 2019 LTIP Program			23
▶ LTIP Payout in 2019 (2017 to 2019 performance cycle)			23
▶ Stockholder Engagement and Changes Resulting from our Say on Pay Results			24
▶ Gender Diversity			25
▶ Executive Benefits			25
▶ Executive Agreements			25
▶ Other Policies and Practices			25
▶ Annual Risk Review of Compensation Policies and Procedures			25
▶ Stock Ownership Guidelines			26
▶ Hedging and Pledging Policies			26
Executive Officer Compensation			27
▶ Tax-Qualified Benefit Plans			31
Compensation Committee Interlocks and Insider Participation			32
Section 16(a) Beneficial Ownership Reporting Compliance			32
Transactions with Certain Related Persons			32
Nominating and Corporate Governance Committee Procedures			33
Majority Voting Policy			36
Submission of Business Proposals and Stockholder Nominations			36
Stockholder Communications			37
Miscellaneous			37
Important Notice Regarding the Availability of Proxy Materials			38

Table of Contents

Please Vote

It is very important that you vote to play a part in the future of your Company.

Proposal		​	​	More Information		Board Recommendation
1	​	To elect two directors to serve for a term of Directors has appointedthree years	​	Page 9	​	FOR all nominees
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2	​	To ratify the selection of Moss Adams LLP to be the Company’sas our independent registered public accounting firm for the year ending December 31, 2017, subject to ratification by stockholders. A representative of Moss Adams LLP is expected to be present at the annual meeting to respond to appropriate questions from stockholders and will have the opportunity to make2019	​	Page 14	​	FOR
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3	​	To consider a statement should he or she desire to do so. If the ratification of the appointment of Moss Adams LLP is not approved by a majority of the votes cast by stockholders at the annual meeting, other independent registered public accounting firms may be considered by the Audit Committee of the Board of Directors. Even if the selection of Moss Adams LLP is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such change is in the best interest of the Company and its stockholders. 12 The Board of Directors recommends that stockholders vote “FOR” the ratification of the appointment of Moss Adams LLP as the Company’s independent registered public accounting firm. KPMG LLP was previously the independent registered public accounting firm for the Company. On April 9, 2015, the firm was dismissed as the Company’s independent registered public accounting firm. The decision to dismiss KPMG LLP was approved by the Audit Committee of the Company. During the years ended December 31, 2014 and 2013 and the subsequent interim period through April 9, 2015, there were no: (1) disagreements with KPMG LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to their satisfaction, would have caused them to make reference in connection with their opinion to the subject matter of the disagreement, or (2) reportable events under Item 304(a)(1)(v) of RegulationS-K except that KPMG LLP advised the Company of the following material weaknesses noted below. The audit reports of KPMG LLP on the consolidated financial statements of the Company as of and for the years ended December 31, 2014 and 2013 did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles. The audit reports of KPMG LLP on the effectiveness of internal control over financial reporting as of December 31, 2014 and 2013 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles, except that KPMG LLP’s report indicates that the Company did not maintain effective internal control over financial reporting as of December 31, 2013 because of the effect of material weaknesses on the achievement of the objectives of the control criteria and contains an explanatory paragraph that states material weaknesses related to the Company’s (1) risk assessment processes for effective identification of financial reporting risks and controls, (2) investment securities policies and processes, and (3) income tax policies and procedures. Audit Fees The following table sets forth the fees to Moss Adams LLP for the years ended December 31, 2016 and 2015.       2016      2015   Audit fees      $ 459,000      $ 441,000   Audit-related fees (1)    $ 49,000    $ --   Tax fees (2)    $ 28,360    $ 14,250   All other fees    $ --    $ --   (1)  Audit-related fees pertain to the audit of the financial statements of certain employee benefit plans. (2)  Tax fees consist of tax return preparation and other tax matters. 13 The following table sets forth the fees to KPMG LLP for the years ended December 31, 2016 and 2015.       2016      2015   Audit fees (1)    $ 25,000      $ --   Audit-related fees (2)    $ --    $ 73,900   Tax fees (3)    $ --    $ 26,500   All other fees    $ --    $ --   (1)   Audit fees relate to the audit of Territorial Bancorp Inc.’s consolidated financial statements, the audits of internal controls over financial reporting, reviews of financial statements included in the Company’s quarterly reports on Form10-Q and regulatory and statutory engagements related to the aforementioned statements, and to Securities and Exchange Commission registration statements. (2)  Audit-related fees pertain to the audit of the financial statements of certain employee benefit plans. (3)  Tax fees consist of tax return preparation and other tax matters. Pre-Approval of Services by the Independent Registered Public Accounting Firm The Audit Committee is responsible for appointing, setting compensation and overseeing the work of the independent registered public accounting firm. In accordance with its charter and written policy, the Audit Committee approves, in advance, all audit and permissiblenon-audit services to be performed by the independent registered public accounting firm, or such services can be performed in accordance with the Audit Committee’s writtenpre-approval policy. Such approval process ensures that the external auditor does not provide anynon-audit services to us that are prohibited by law or regulation. During each of the years ended December 31, 2016 and 2015, 100% of the fees paid to Moss Adams LLP were either approved, in advance, by the Audit Committee, orpre-approved under the Audit Committee’s writtenpre-approval policy, and during the year ended December 31, 2015, 100% of the audit-related fees and tax fees paid to KPMG LLP were approved, in advance, by the Audit Committee. 14 Proposal 3 — Advisory (Nonbinding) Vote on Executive Compensation Based upon a Board determination that considered the advice of stockholders at our 2011 Annual Meeting of Stockholders, stockholders are annually being given the opportunity to vote on an advisory (nonbinding) resolutionnonbinding proposal to approve theour executive compensation of our “Named Executive Officers,” as described in thisthe proxy statement under “Compensation Discussion	​	Page 15	​	FOR
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By Internet Using a Computer		By Telephone		By Mail
Vote 24/7 www.proxyvote.com		Dial toll-free 24/7 1-800-690-6903		Cast your ballot, sign your proxy card and Analysis”send by pre-paid mail
​	​	​	​	​

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Territorial Bancorp Inc.

Proxy Statement

This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors of Territorial Bancorp Inc. (the "Company") to be used at the annual meeting of stockholders of the Company. The Company is the holding company for Territorial Savings Bank (the "Bank"). The annual meeting will be held at 1132 Bishop Street, Suite 601, Honolulu, Hawaii, on Thursday, June 11, 2020, at 8:30 a.m., local time. This proxy statement and the enclosed proxy card are being mailed to stockholders of record on or about May 8, 2020.

Voting and Proxy Procedure

You are entitled to vote your Company common stock if the records of the Company show that you held your shares as of the close of business on March 13, 2020. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in "street name" and these proxy materials are being forwarded to you by your broker or other nominee. As the beneficial owner, you have the right to direct your broker how to vote.

As of the close of business on March 13, 2020, there were 9,658,548 shares of Company common stock outstanding for voting purposes. Each share of common stock has one vote. The Company's Articles of Incorporation provide that, subject to certain exceptions, a record owner of the Company's common stock for a person who beneficially owns, either directly or indirectly, in excess of 10% of the Company's outstanding shares, is not entitled to any vote in respect of the shares held in excess of the 10% limit.

If you were a stockholder as of the close of business on March 13, 2020, you may attend the meeting. However, if your shares of Company common stock are held by a broker, bank, or other nominee (i.e., in "street name"), you will need proof of ownership to be admitted to the meeting. A recent brokerage statement or a letter from a bank or broker are examples of proof of ownership. If you want to vote your shares of Company common stock held in street name in person at the meeting, you will have to get a written proxy in your name from the broker, bank, or other nominee who holds your shares.

A majority of the outstanding shares of common stock entitled to vote is required to be represented at the meeting to constitute a quorum for the transaction of business. If you return valid proxy instructions or attend the meeting in person, your shares will be counted for purposes of determining whether there is a quorum, even if you abstain from voting. Broker non-votes also will be counted for purposes of determining the existence of a quorum. A broker non-vote occurs when a broker, bank, or other nominee holding shares for a beneficial owner does not vote on a particular proposal because the broker, bank, or other nominee does not have discretionary voting power with respect to that item and has not received voting instructions from the beneficial owner.

    2020 Proxy Statement    1

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In voting on the election of directors, you may vote in favor of all nominees, withhold votes as to all nominees, or withhold votes as to specific nominees. There is no cumulative voting for the election of directors. Directors are elected by a plurality of the votes cast at the annual meeting. This means that the nominees receiving the greatest number of votes will be elected. Votes that are withheld and broker non-votes will have no effect on the outcome of the election. In addition, the Company has adopted a majority voting policy with respect to the election of directors. For more information, see "Majority Voting Policy."

In voting to ratify the appointment of Moss Adams LLP as our independent registered public accounting firm, you may vote in favor of the proposal, vote against the proposal, or abstain from voting. To be approved, this matter requires the affirmative vote of a majority of the votes cast at the annual meeting. Broker non-votes and abstentions will not be counted as votes cast and will have no effect on this proposal.

In voting on the nonbinding proposal to approve our executive compensation, you may vote in favor of the proposal, vote against the proposal, or abstain from voting. To approve the proposal, the affirmative vote of a majority of the votes cast at the annual meeting is required. Broker non-votes and abstentions will not be counted as votes cast and will have no effect on this proposal. While this vote is required by law, it will neither be binding on us or the Board of Directors, nor will it create or imply any change in the fiduciary duties of, or impose any additional fiduciary duty on, us or the Board of Directors.

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Proposal 4 — Advisory(Non-Binding) Vote on the Frequency of

Voting on Executive Compensationby Proxy

In accordance with Section 14A of the Securities Exchange Act of 1934, as amended, stockholders are being given the opportunity to vote on an advisory(non-binding) resolution at the Annual Meeting to approve the compensation of executive officers (the“say-on-pay” advisory vote in Proposal 3 above) this year, as they have done on an annual basis since 2011. As required by federal regulations, we are required to submit to stockholders the question of the frequency of advisory votes on executive compensation at least once every six years. Accordingly, we are also asking stockholders to vote on whether future“say-on-pay” advisory votes on executive compensation should occur every year, every two years or every three years.

After careful consideration, the Board of Directors recommends that future stockholder“say-on-pay” advisory votes on executive compensation continue to be conducted every year. The determination was based upon the premise that Named Executive Officer compensation is evaluated, adjusted and approved on an annual basis by the Board of Directors upon a recommendation from the Compensation Committee and the belief that investor sentiment should be a factor taken into consideration by the Compensation Committee in making its annual recommendation.

Stockholders will be able to specify one of four choices for this proposal on the proxy card: every 1 Year, every 2 Years, every 3 Years or abstain. Unless otherwise instructed, validly executed proxies will be voted for the “1 Year” option on this matter.

The Company's Board of Directors is sending you this proxy statement to request that you allow your shares of Company common stock to be represented at the annual meeting by the persons named in the enclosed proxy card. All shares of Company common stock represented at the meeting by properly executed and dated proxies will be voted according to the instructions indicated on the proxy card. If you sign, date, and return a proxy card without giving voting instructions, your shares will be voted as recommended by the Company's Board of Directors. The Board of Directors recommends that you:

▶

​votefor each of the nominees for director;



▶

​votefor ratification of the appointment of Moss Adams LLP as the Company's independent registered public accounting firm; and



▶

​votefor the approval of our executive compensation as described in this proxy statement.

If any matters not described in this proxy statement are properly presented at the annual meeting and you have returned a validly executed proxy card, the persons named in the proxy card will use their judgment to determine how to vote your shares. This includes a motion to adjourn or postpone the meeting to solicit additional proxies. The Company does not currently know of any other matters to be presented at the meeting.

You may revoke your proxy at any time before the vote is taken at the annual meeting. To revoke your proxy, you must advise the Corporate Secretary of the Company in writing before your common stock has been voted at the annual meeting, deliver a later dated proxy, or attend the meeting and vote your shares in person by ballot. Attendance at the annual meeting will not in itself constitute revocation of your proxy.

If your Company common stock is held in street name, you will receive instructions from your broker or other nominee that you must follow to have your shares voted. Your broker or other nominee may allow you to deliver your voting instructions via the telephone or the Internet. Please review the proxy card or instruction form provided by your broker or other nominee that accompanies this proxy statement.

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Proposal 5 — Approval of an Amendment to andRe-Approval of the Material Terms of the Performance Goals Under the Territorial Bancorp Inc. 2010 Equity Incentive Plan

The Board of Directors originally adopted and stockholders approved the Territorial Bancorp, Inc. 2010 Equity Incentive Plan in 2010. On March 29, 2016, the Board of Directors approved an amendment to the Territorial Bancorp Inc. 2010 Equity Incentive Plan, which was approved by stockholders at the 2016 Annual Meeting.

We are submitting for stockholder approval (1) an amendment to the Territorial Bancorp Inc. 2010 Equity Incentive Plan, as amended and restated (the “2010 Equity Plan”) that was adopted, subject to stockholder approval, by the Compensation Committee and the Board of Directors on March 29, 2017, to include the ability to grant restricted stock unit awards under the plan and (2) the material terms of the performance goals under the 2010 Equity Plan for stockholderre-approval to meet the requirements under Section 162(m) of the Internal Revenue Code (the “Code”). The amended and restated plan is substantially the same as the plan as amended in 2016, with the exceptions that the plan would allow the Company to grant restricted stock unit awards (but would not add any additional shares to the plan for restricted stock unit awards or for any other awards under the plan) and would include “total shareholder return” as a performance goal for performance-based awards under plan.

We are not seeking to increase the number of shares authorized for issuance under the 2010 Equity Plan.

Section 162(m)Re-approval

Approval of this proposal will constitutere-approval of the material terms of the performance goals under the 2010 Equity Plan for purposes of Section 162(m) of the Code. This will have the effect of extending the period (which expired at the 2015 Annual Meeting) during which the Company may grant awards intended to qualify as “performance-based compensation” for purposes of Section 162(m) of the Code, to the time the 2010 Equity Plan will terminate in 2020. Despite the fact that the original period during which the Company could grant awards intended to qualify as “performance-based compensation” for purposes of Section 162(m) expired in 2015, the Company did not grant any awards under the 2010 Equity Plan during 2015 or 2016 that were intended to qualify as “performance-based compensation.”

Section 162(m) of the Code generally does not allow a publicly-held company to obtain tax deductions for compensation of more than $1.0 million paid in any year to its Chief Executive Officer, or any of its other three most highly compensated executive officers (other than its Chief Financial Officer), unless the payments are “performance-based” in accordance with conditions specified under Section 162(m) of the Code. Generally, under Section 162(m) of the Code, it is required that the material terms of the performance goals under the 2010 Equity Plan must be approved every five years in order to grant “performance-based compensation.” If the material terms of the performance goals are not approved within this five-year period, we would not be able to grant any “performance-based compensation” for purposes of Section 162(m) of the Code unless and until requisite stockholder approval is obtained in accordance with the provisions of Section 162(m) of the Code.

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As stated above, although we did not seekre-approval of the material terms of the performance measures in 2015 or 2016, we did not make any awards under the plan that would have otherwise been intended to qualify as “performance-based compensation” during 2015 or 2016. We are now seekingre-approval of the material terms of the performance goals so that we may make grants of awards under the 2010 Equity Plan that would qualify as “performance-based compensation.” We haveParticipants in the pastESOP and we specifically reserve our right in the future to pay compensation that is not deductible under Section 162(m)401(k) Plan

If you participate in the Territorial Savings Bank Employee Stock Ownership Plan (the "ESOP") or if you hold Territorial Bancorp Inc. common stock through the Territorial Savings Bank 401(k) Plan (the "401(k) Plan"), you will receive vote authorization forms for the plans that reflect all shares you may direct the trustees to vote on your behalf under the plans. Under the terms of the ESOP, the ESOP trustee votes all shares held by the ESOP, but each ESOP participant may direct the trustee how to vote the shares of common stock allocated to his or her account. The ESOP trustee, subject to the exercise of its fiduciary responsibilities, will vote all unallocated shares of Territorial Bancorp Inc. common stock held by the ESOP and allocated shares for which no voting instructions are received in the same proportion as shares for which it has received timely voting instructions. Under the terms of the 401(k) Plan, a participant is entitled to provide voting instructions for all shares credited to his or her 401(k) Plan account and held in the Territorial Bancorp Inc. Stock Fund. Shares for which no voting instructions are given or for which instructions were not timely received will be voted in the same proportion as shares for which voting instructions were received.The deadline for returning your ESOP and 401(k) Plan voting instructions is June 4, 2020.

If you have any questions about voting, please contact Senior Vice President and Director of Investor Relations, Walter Ida, at (808) 946-1400.

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Corporate Governance

The Company periodically reviews its corporate governance policies and procedures to ensure that the Company meets the highest standards of ethical conduct, reports results with accuracy and transparency, and maintains full compliance with the laws, rules and regulations that govern the Company's operations. As part of this periodic corporate governance review, the Board of Directors reviews and adopts what it believes to be best corporate governance policies and practices for the Company.

Code of the Code. If our stockholders do not approve this proposal, then the current terms of the 2010 Equity Plan will remain in effect. However, we will not be able to grant any “performance-based compensation” for purposes of Section 162(m) of the Code unlessEthics and until requisite stockholder approval is obtained in accordance with the provisions of Section 162(m) of the Code. If our stockholders do not approve this proposal, performance-based awards (other than time-based stock options) granted in 2017 prior to our 2017 Annual Meeting will be null and void and we will not be able to grant restricted stock unit awards under the plan. The failure of stockholders to approve this proposal will not affect any awards granted under the 2010 Equity Plan that are not intended to be performance-based awards. As noted above, we will still be permitted to grant awards pursuant to the 2010 Equity Plan (other than restricted stock unit awards), but we may be precluded from taking a deduction for awards that would otherwise qualify as “performance-based.” Our executive officers and directors (including our director nominees) have an interest in this proposal as they would be eligible to receive awards under the 2010 Equity Plan.Business Conduct Summary of the 2010 Equity Plan The following is a summary of the material features of the 2010 Equity Plan, as amended. The summary is qualified in its entirety by reference to the complete text of the 2010 Equity Plan, a copy of which is attached as Appendix A to this Proxy Statement. General. Subject to permitted adjustments for certain corporate transactions, the 2010 Equity Plan authorizes the issuance or delivery to participants of up to 1,862,637 shares of Company common stock pursuant to grants of restricted stock awards, restricted stock unit awards, incentive stock options, andnon-qualified stock options; provided, however, that no more than 1,612,637 shares may be issued or delivered in the aggregate pursuant to the exercise of stock options, and no more than 1,106,318 shares may be issued or delivered pursuant to restricted stock awards or restricted stock unit awards. As of March 29, 2017, the 2010 Equity Plan had 1,628 shares available for the awards of stock options and 268,958 shares available for the award of restricted stock and, if approved, restricted stock units. We are not seeking to increase the number of shares available for awards under the 2010 Equity Incentive Plan. The 2010 Equity Plan is administered by the members of our Compensation Committee who are “Disinterested Board Members,” as defined in the 2010 Equity Plan (the “Committee”). The Committee has full and exclusive power within the limitations set forth in the 2010 Equity Plan to make all decisions and determinations regarding the selection of participants and the granting of awards; establishing the terms and conditions relating to each award; adopting rules, regulations and guidelines for carrying out the 2010 Equity Plan’s purposes; and interpreting and otherwise construing the 2010 Equity Plan. The Equity Incentive Plan also permits the Board of Directors or the Committee to 18 delegate to one or more officers of the Company the power to: (i) designate officers and employees who will receive awards; and (ii) determine the number of awards to be received by them, provided that the delegation is not prohibited by applicable law or the rules of the stock exchange on which our common stock is traded. Awards intended to be “performance-based” under Section 162(m) of the Code must be granted by the Committee in order to be exempt from the $1.0 million limit on deductible compensation for tax purposes. The Committee may grant an award under the 2010 Equity Plan as an alternative to or replacement of an existing award under the 2010 Equity Plan or any other plan of Territorial Bancorp or its subsidiaries, or as the form of payment for grants or rights earned or due under any other plan or arrangement of Territorial Bancorp or its subsidiaries, including the plan of any entity acquired by Territorial Bancorp or its subsidiaries. The 2010 Equity Plan may be funded with authorized but unissued shares or with shares repurchased in open market transactions. Eligibility. Employees and directors of the Company and Territorial Savings Bank are eligible to receive awards under the 2010 Equity Plan, except thatnon-employees may not be granted incentive stock options. Types of Awards. The Committee may determine the type and terms and conditions of awards under the 2010 Equity Plan, which shall be set forth in an award agreement delivered to each participant. Each award shall be subject to conditions established by the Committee that are set forth in the recipient’s award agreement, and shall be subject to vesting conditions and restrictions as determined by the Committee. Awards may be granted in a combination of incentive andnon-qualified stock options, restricted stock or restricted stock units, as follows: Stock Options. A stock option is the right to purchase shares of common stock at a specified price for a specified period of time. The exercise price may not be less than the fair market value of a share of our common stock on the date the stock option is granted. Fair market value for purposes of the 2010 Equity Plan means the final sales price of the Company’s common stock as reported on the NASDAQ stock market on the date in question, or if the Company’s common stock was not traded on that date, then on the day prior to that date or on the next preceding day on which the Company’s common stock was traded, and without regard to after-hours trading activity. The Committee will determine the fair market value of the common stock, in accordance with Section 422 of the Code, if it cannot be determined in the manner described above. Further, the Committee may not grant a stock option with a term that is longer than 10 years. Stock options are either “incentive” stock options or“non-qualified” stock options. Incentive stock options have certain tax advantages that are not available tonon-qualified stock options, and must comply with the requirements of Section 422 of the Code. Only employees are eligible to receive incentive stock options. Outside directors may only receivenon-qualified stock options under the 2010 Equity Plan. Shares of common stock purchased upon the exercise of a stock option must be paid for at the time of exercise either (i) by personal, certified or cashier’s check, (ii) by tendering stock of Territorial Bancorp owned by the participant in satisfaction of the exercise price, (iii) by a “cashless exercise,” (iv) by other property deemed acceptable to the Committee (including by“net-exercise”), or (v) by any combination of the foregoing. The total number of shares that may be acquired upon the exercise of a stock option will be rounded down to the nearest whole share.

We have adopted a Code of Ethics and Business Conduct that is designed to promote the highest standards of ethical conduct by our directors, executive officers, and employees. The Code of Ethics and Business Conduct requires that our directors, executive officers, and employees avoid conflicts of interest, comply with all laws and other legal requirements, conduct business in an honest and ethical manner, and otherwise act with integrity and in our best interest. Under the terms of the Code of Ethics and Business Conduct, directors, executive officers, and employees are required to report any conduct that they believe in good faith to be an actual or apparent violation of the Code of Ethics and Business Conduct. A copy of the Code of Ethics and Business Conduct can be found in the "About Us — Investor Relations — Corporate Governance" section of our website, www.territorialsavings.net. Amendments to and waivers from our Code of Ethics and Business Conduct will be disclosed in the "About Us — Investor Relations — Corporate Governance" section of our website.

As a mechanism to encourage compliance with the Code of Ethics and Business Conduct, we have established procedures to receive, retain, and treat complaints regarding accounting, internal accounting controls, and auditing matters. These procedures ensure that individuals may submit concerns regarding questionable accounting or auditing matters in a confidential and anonymous manner. The Code of Ethics and Business Conduct also prohibits us from retaliating against any director, executive officer, or employee who reports actual or apparent violations of the Code of Ethics and Business Conduct.

In addition, we have adopted a Code of Ethics for Senior Officers that is applicable to our senior financial officers, including our principal executive officer, principal financial officer, principal accounting officer, and all officers performing similar functions. A copy of the Code of Ethics for Senior Officers can be found in the "About Us — Investor Relations — Corporate Governance" section of our website, www.territorialsavings.net. Amendments to and waivers from our Code of Ethics for Senior Officers will be disclosed in the "About Us — Investor Relations — Corporate Governance" section of our website.

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Restricted Stock. A restricted stock award is a grant of common stock, subject to vesting requirements, to a participant for no consideration or such minimum consideration as may be required by applicable law or regulation. Restricted stock awards may be granted only in whole shares of common stock and are subject to vesting conditions and other restrictions established by the Committee as set forth in the 2010 Equity Plan or the award agreement. Prior to vesting of the restricted stock award, unless otherwise determined by the Committee, the recipient of a restricted stock award may exercise any voting rights with respect to common stock subject to an award and receive any dividends and distributions with respect to the common stock.

Restricted Stock Units. A restricted stock unit award is similar to a restricted stock award except that no share of common stock is actually awarded to the recipient on the date of grant. Each restricted stock unit is evidenced by an award agreement that specifies the restriction period, the number of restricted stock units granted and such other provision as the Committee will determine. Restricted stock unit awards will be paid in shares of common stock, or, in the sole discretion of the Committee, in cash or a combination of cash and shares of common stock.

Dividend Equivalents. The Committee or the Board is authorized to grant dividend equivalents with respect to any award available under the Plan, other than stock options. Dividend equivalents confer on the participant the right to receive payments equal to cash dividends or distributions with respect to all or a portion of the number of shares of stock subject to the award. Unless otherwise determined, dividend equivalents are deemed to be reinvested in additional shares of stock subject to the same vesting restrictions as the shares to which they relate. Alternatively, the Committee or the Board may determine that dividend equivalents (except with respect to performance awards) will be paid as accrued or held in anon-interest bearing account until the award vests.

Prohibition Against Repricing of Options. The 2010 Equity Plan provides that neither the Committee nor the Board of Directors is authorized to make any adjustment or amendment that reduces or would have the effect of reducing the exercise price of a stock option previously granted.

Limitation on Awards Under the 2010 Equity Plan. As of March 29, 2017, the 2010 Equity Plan had 1,628 shares available for the awards of stock options and 268,958 shares available for the award of restricted stock and, if approved, restricted stock units. We are not seeking to increase the number of shares available for grant under the 2010 Equity Plan at this time. If approved, the shares attributable to restricted stock unit awards would come from the existing reserve for restricted stock awards under the plan.

The following overall limits apply to awards under the 2010 Equity Plan (although, as stated above fewer shares currently remain available for grant under the 2010 Equity Plan):

◾

the maximum number of shares of stock, in the aggregate, that may be issued or delivered to any one employee participant pursuant to the exercise of stock options is 428,159 shares, all of which may be issued during any calendar year;

◾

the maximum number of shares of stock, in the aggregate, that may be issued or delivered to any one employee participant pursuant to restricted stock awards or restricted stock unit awards is 276,579 shares, all of which may be issued during any calendar year;

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◾

the maximum number of shares of stock that may be issued or delivered to any one individualnon-employee director pursuant to the exercise of stock options, in the aggregate, shall be 85,630 shares or, and the maximum number of shares that may be issued or delivered to any one individualnon-employee director pursuant to restricted stock awards or restricted stock unit awards, in the aggregate, shall be 55,315 shares; and

◾

the maximum number of shares of stock that may be issued or delivered to allnon-employee directors, in the aggregate, pursuant to the exercise of stock options shall be 513,791 shares, and the maximum number of shares that may be issued or delivered to allnon-employee directors in the aggregate pursuant to restricted stock awards or restricted stock unit awards shall be 331,895.

To the extent any shares of stock covered by an award (including restricted stock awards or restricted stock unit awards) under the 2010 Equity Plan are not delivered to a participant or beneficiary for any reason, including because the award is forfeited or canceled or because a stock option is not exercised, then such shares shall not be deemed to have been delivered for purposes of determining the maximum number of shares of stock available for delivery under the plan. To the extent (i) a stock option is exercised by using an actual or constructive exchange of shares to pay the exercise price, or (ii) shares of stock covered by an award are withheld to satisfy withholding taxes upon exercise or vesting of the award, the number of shares of stock available shall be reduced by the gross number of stock options exercised rather than the net number of shares of stock issued.

In the event of a corporate transaction involving the stock of Territorial Bancorp Inc. (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation,split-up,spin-off, combination or exchange of shares), the foregoing share limitations and all outstanding awards will automatically be adjusted proportionally and uniformly to reflect such event to the extent that the adjustment will not affect the award’s status as “performance-based compensation” under Section 162(m) of the Code, if applicable; provided, however, that the Committee may adjust awards to preserve the benefits or potential benefits of the awards, including the prevention of automatic adjustments if appropriate.

Performance Features. A federal income tax deduction for the Company is generally unavailable for annual compensation in excess of $1.0 million paid to its chief executive officer and three other most highly compensated officers (other than its chief financial officer) named in the summary compensation table. However, amounts that constitute “performance-based compensation” (under Section 162(m) of the Code) are not counted toward the $1.0 million limit. The 2010 Equity Plan is designed so that stock options will be considered performance-based compensation. The Committee may designate whether any restricted stock awards or restricted stock unit awards granted to any participant are intended to be performance-based compensation. Any restricted stock awards or restricted stock unit awards designated as performance-based compensation will be conditioned on the achievement of one or more performance measures, to the extent required by Section 162(m) of the Code.

The performance measures that may be used for performance-based awards will be based on any one or more of the following performance measures, as selected by the Committee:

◾

basic earnings per share;

◾

basic cash earnings per share;

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◾

diluted earnings per share;

◾

diluted cash earnings per share;

◾

net income (before or after taxes);

◾

cash earnings;

◾

net interest income;

◾

non-interest income;

◾

general and administrative expense to average assets ratio;

◾

cash general and administrative expense to average assets ratio;

◾

efficiency ratio;

◾

cash efficiency ratio;

◾

return on average assets;

◾

cash return on average assets;

◾

return on average stockholders’ equity;

◾

cash return on average stockholders’ equity;

◾

return on average tangible stockholders’ equity;

◾

cash return on average tangible stockholders’ equity;

◾

core earnings;

◾

operating income;

◾

operating efficiency ratio;

◾

net interest rate spread;

◾

growth in assets, loans, or deposits;

◾

loan production volume;

◾

non-performing loans;

◾

cash flow; strategic business objectives, consisting of one or more objectives based upon meeting specified cost targets, business expansion goals, and goals relating to acquisitions or divestitures, or goals relating to capital raising and capital management;

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◾

total shareholder return; or

◾

any combination of the foregoing.

Performance measures may be based on the performance of Territorial Bancorp as a whole or of any one or more subsidiaries or business units of Territorial Bancorp or a subsidiary and may be measured relative to a peer group, an index or a business plan. The Committee may adjust performance measures after they have been set, but only to the extent the Committee exercises negative discretion as permitted under applicable law for purposes of an exception to Section 162(m) of the Code. In establishing the performance measures, the Committee may provide for the inclusion or exclusion of certain items. Additionally, the grant of an award intended to be performance-based compensation and the establishment of any performance-based measures shall be made during the period required by Section 162(m) of the Code.

Vesting of Awards. The Committee may specify vesting requirements on any award. If the vesting of an award under the 2010 Equity Plan is conditioned on the completion of a specified period of service with Territorial Bancorp or its subsidiaries, without the achievement of performance measures or objectives, then the required period of service for full vesting shall be determined by the Committee and evidenced in an award agreement. Unless the Committee specifies otherwise, awards may not vest at a rate exceeding 20% per year commencing one year after the date of grant; subject to acceleration of vesting in the event of death and substantial disability. The Committee may determine that all stock options then held by a participant shall become fully exercisable (subject to expiration provisions otherwise applicable to such award) and all restricted stock awards or restricted stock unit awards shall be fully earned and vested immediately. Unless the Committee specifies that an unvested award will be forfeited on retirement (as defined in the 2010 Equity Plan), any unvested award will continue to vest following retirement in accordance with the vesting schedule set forth in the award agreement. Notwithstanding the foregoing, at least 95% of all awards granted under the 2010 Equity Plan after May 26, 2016, shall be subject to a vesting requirement of at least one year of service following the grant of the award, unless accelerated vesting is due to death, disability or an involuntary termination

Change in Control. With respect to any award granted under the 2010 Equity Plan after May 26, 2016, at the time of an involuntary termination at or following a Change in Control (as that term is defined in the 2010 Equity Plan), all stock options will become exercisable and remain exercisable for one year following the involuntary termination and restricted stock awards and, if approved, restricted stock unit awards (other than restricted stock unit awards granted as performance-based compensation) will become fully vested. With respect to awards granted prior to May 26, 2016, unless otherwise stated in an award agreement as determined by the Committee, upon the occurrence of a Change in Control of the Company, all restricted stock awards then held by a participant will become fully vested and all stock option awards shall become fully exercisable.

Forfeiture. The Committee may specify that rights and benefits with respect to any award may be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain events in addition to any otherwise applicable vesting or performance conditions. Such events include termination for cause; termination of service, violations of material policies; breach of noncompetition, confidentiality or other restrictive covenants; or any other conduct that is detrimental to Territorial Bancorp’s business or reputation, its affiliates and/or its subsidiaries.

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If Territorial Bancorp is required to prepare an accounting restatement due to the material noncompliance of Territorial Bancorp, as a result of misconduct, with any financial reporting requirement under the securities laws, any participant who is subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 shall reimburse Territorial Bancorp the amount of any payment in settlement of an award earned or accrued during the twelve-month period following the first public issuance or filing with the Securities and Exchange Commission of the financial document embodying such financial reporting requirement. In addition, in the event of an accounting restatement, the Committee, in its sole and exclusive discretion, may require that any participant reimburse Territorial Bancorp for all or any part of the amount of any payment in settlement of any award granted hereunder.

Amendment and Termination. The Board of Directors may, at any time, amend or terminate the 2010 Equity Plan or any award granted under the 2010 Equity Plan, provided that, except as provided in the 2010 Equity Plan, no amendment or termination may adversely impair the rights of an outstanding award without the participant’s (or affected beneficiary’s) written consent. The Board of Directors may not amend the provision of the 2010 Equity Plan related to repricing, materially increase the original number of securities that may be issued under the 2010 Equity Plan (other than as provided in the 2010 Equity Plan), materially increase the benefits accruing to a participant, or materially modify the requirements for participation in the 2010 Equity Plan, without approval of stockholders. Notwithstanding the foregoing, the Board of Directors may, without stockholder approval, amend the 2010 Equity Plan at any time, retroactively or otherwise, to ensure that the 2010 Equity Plan complies with current or future law and the Board of Directors may unilaterally amend the 2010 Equity Plan and any outstanding award, without participant consent, in order to maintain an exemption from, or to comply with, Section 409A of the Code, and its applicable regulations and guidance.

Duration of Plan. The 2010 Equity Plan will remain in effect as long as any awards under it are outstanding; however, no awards may be granted under the 2010 Equity Plan on or after the10-year anniversary of the effective date of the 2010 Equity Plan. At any time, the Board of Directors may terminate the 2010 Equity Plan. However, any termination of the 2010 Equity Plan will not affect outstanding awards.

U.S. Federal Income Tax Consequences

The following is a summary of the federal income tax consequences that may arise in conjunction with participation in the 2010 Equity Plan.

Non-Qualified Stock Options. The grant of anon-qualified option will not result in taxable income to the participant. Except as described below, the participant will realize ordinary income at the time of exercise in an amount equal to the excess of the fair market value of the shares acquired over the exercise price for those shares, and the Company will be entitled to a corresponding deduction for tax purposes. Gains or losses realized by the participant upon disposition of such shares will be treated as capital gains and losses, with the basis in such shares equal to the fair market value of the shares at the time of exercise.

Incentive Stock Options. The grant of an incentive stock option will not result in taxable income to the participant. The exercise of an incentive stock option will not result in taxable income to the participant provided the participant was, without a break in service, an employee of the Company or

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a subsidiary during the period beginning on the date of the grant of the option and ending on the date three months prior to the date of exercise (one year prior to the date of exercise if the participant is disabled, as that term is defined in the Code).

The excess of the fair market value of the shares at the time of the exercise of an incentive stock option over the exercise price is an adjustment that is included in the calculation of the participant’s alternative minimum taxable income for the tax year in which the incentive stock option is exercised. For purposes of determining the participant’s alternative minimum tax liability for the year of disposition of the shares acquired pursuant to the incentive stock option exercise, the participant will have a basis in those shares equal to the fair market value of the shares at the time of exercise.

If the participant does not sell or otherwise dispose of the shares within two years from the date of the grant of the incentive stock option or within one year after the exercise of such stock option, then, upon disposition of such shares, any amount realized in excess of the exercise price will be taxed as a capital gain. A capital loss will be recognized to the extent that the amount realized is less than the exercise price.

If the foregoing holding period requirements are not met, the participant will generally realize ordinary income at the time of the disposition of the shares, in an amount equal to the lesser of (i) the excess of the fair market value of the shares on the date of exercise over the exercise price, or (ii) the excess, if any, of the amount realized upon disposition of the shares over the exercise price, and the Company will be entitled to a corresponding deduction. If the amount realized exceeds the value of the shares on the date of exercise, any additional amount will be a capital gain. If the amount realized is less than the exercise price, the participant will recognize no income, and a capital loss will be recognized equal to the excess of the exercise price over the amount realized upon the disposition of the shares.

Restricted Stock. A participant who has been granted a restricted stock award will not realize taxable income at the time of grant, provided that that the stock subject to the award is not delivered at the time of grant, or if the stock is delivered, it is subject to restrictions that constitute a “substantial risk of forfeiture” for federal income tax purposes. Upon the later of delivery or vesting of shares subject to an award, the holder will realize ordinary income in an amount equal to the then fair market value of those shares and the Company will be entitled to a corresponding deduction for tax purposes. Gains or losses realized by the participant upon disposition of such shares will be treated as capital gains and losses, with the basis in such shares equal to the fair market value of the shares at the time of delivery or vesting. Dividends paid to the holder during the restriction period, if so provided, will also be compensation income to the participant and the Company will be entitled to a corresponding deduction for tax purposes. A participant who makes an election under Section 83(b) of the Code will include the full fair market value of the restricted stock award in taxable income in the year of grant at the grant date fair market value.

Restricted Stock Units. A participant who has been granted a restricted stock unit will not realize taxable income as long as the award remains in the form of a restricted stock unit. When the restricted stock unit is extinguished and a stock award is issued, the tax consequences for restricted stock awards (see paragraph above) will be realized. If, in the sole discretion of the Committee, the restricted stock unit is converted to a cash amount and distributed, the participant will recognize income at the time of distribution equal to the cash received. A restricted stock unit does not have

		25

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voting rights or dividend rights. Since no stock is transferred to the participant on the grant date of the restricted stock unit, an election to have the restricted stock unit taxed at the grant date cannot be made since Section 83(b) of the Code requires a transfer of stock.

Withholding of Taxes. The Company may withhold amounts from participants to satisfy withholding tax requirements. Except as otherwise provided by the committee who administers the 2010 Equity Plan, participants may have shares withheld from awards or may tender previously owned shares to the Company to satisfy the minimum tax withholding requirements.

Change in Control. In the event of a change in control, outstanding unvested awards under the 2010 Equity Plan may be considered parachute payments that would cause an “excess parachute payment” under the Code. An excess parachute payment may subject the participant to a 20% excise tax and preclude deduction by the Company.

Deduction Limits. Section 162(m) of the Code generally limits the Company’s ability to deduct for tax purposes compensation in excess of $1.0 million per year for its chief executive officer and the three other most highly compensated executives (excluding the chief financial officer) named in the summary compensation table (“covered employees”). Restricted stock awards and restricted stock unit awards, other than performance-based restricted stock awards or restricted stock unit awards, and other awards that are not subject to performance goals may be subject to this deduction limit if income recognized on the awards plus other compensation of the executive that is subject to the limit exceeds $1.0 million. “Qualified performance-based compensation” is not subject to this limit and is fully deductible by the Company. “Qualified performance-based compensation” is compensation that is subject to a number of requirements such as stockholder approval of possible performance goals, and objective quantification of those goals in advance. Stock options available for award under the 2010 Equity Plan will be considered “qualified performance-based compensation” even if such awards vest solely due to the passage of time during the performance of services. Accordingly, if an award is not exempt from Section 162(m), income recognized on such award by a covered employee will be subject to the $1.0 million deduction limit on compensation.

In the case of performance-based awards granted to a covered employee that are not distributed until after the covered employee’s retirement or other termination of employment, the $1.0 million deduction limit will not apply and the award will be fully deductible. Performance awards may provide for accelerated vesting upon death, disability, or a change in control and still be considered exempt from the $1.0 million deduction limit. The amended 2010 Equity Plan is designed so that stock options and performance-based restricted stock awards and restricted stock unit awards that are subject to performance goals may qualify as qualified performance-based compensation that is not subject to the $1.0 million deduction limit.

Tax Advice. The preceding discussion is based on federal tax laws and regulations presently in effect, which are subject to change, and the discussion does not purport to be a complete description of the federal income tax aspects of the amended 2010 Equity Plan. A participant may also be subject to state and local taxes in connection with the grant of awards under the amended 2010 Equity Plan. The Company suggests that participants consult with their individual tax advisors to determine the applicability of the tax rules to the awards granted to them in their personal circumstances.

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New Plan Benefits; Awards Granted Under the 2010 Equity Plan

In addition to awards already granted and outstanding pursuant to the 2010 Equity Plan, the restricted stock unit awards detailed in the New Plan Benefits table below include the awards granted to our executives,non-employee directors and employees pursuant to the 2010 Equity Plan, conditioned upon the approval by our stockholders of the proposed amendment to the 2010 Equity Plan and there-approval of the material terms of the performance goals under the 2010 Equity Plan for purposes of Section 162(m) of the Code.

It is not possible to determine all of the benefits or amounts that will be received by or allocated to participants under the 2010 Equity Plan because future awards granted under 2010 Equity Plan will be made at the discretion of our Compensation Committee (or subcommittee thereof, if necessary for Section 162(m) of the Code).

Our executive officers have a financial interest in this proposal because our Compensation Committee has selected and may in the future select one or more of our executive officers as eligible to receive grants under the 2010 Equity Plan. Additionally, our directors (including members of our Compensation Committee) have received, and in the future may receive additional, grants under the 2010 Equity Plan.

Name and Position		Dollar Value of Time-Based Restricted Units to be Granted (1)		Number  of Time-Based Restricted Units to be Granted		Dollar Value of Performance- Based Restricted Units  to be Granted (Maximum) (2)		Number  of Performance-Based Restricted Units to be Granted (Maximum)
Allan S. Kitagawa, Chairman of the Board, President, and Chief Executive Officer		$155,773		4,972		$233,596		7,456
Melvin M. Miyamoto, Senior Vice President, Treasurer and Chief Financial Officer		$12,720		406		$19,049		608
Vernon Hirata, Vice Chairman, Co-Chief Operating Officer, General Counsel, and Corporate Secretary		$58,806		1,877		$88,225		2,816
Ralph Y. Nakatsuka, Vice Chairman and Co-Chief Operating Officer		$58,806		1,877		$88,225		2,816
Richard K.C. Lau, Senior Vice President and Chief Lending Officer		$14,788		472		$22,150		707
Executive Group		$300,893		9,604		$451,245		14,403
Non-Employee Director Group		--		--		--		--

(1) Determined by multiplying the closing price of our common stock on March 29, 2017 by the number of time-based restricted units granted.

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(2) Represents potential payments at maximum level of achievement, determined by multiplying the closing price of our common stock on March 29, 2017 by the maximum number of performance-based restricted units granted. Depending on actual performance, payments could range from zero to 100% of the amount shown, with 66% of the amounts shown paid at target level of achievement.

Unless otherwise instructed, validly executed proxies will be voted “FOR” this proposal.

The Board of Directors unanimously recommends that you vote “FOR” the approval of an amendment to andre-approval of the material terms of the performance goals under the Territorial Bancorp Inc. 2010 Equity Incentive Plan.

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Proposal 6 —Re-Approval of the Material Terms of the Performance Goals Under the Territorial Bancorp Inc. Annual Incentive Plan

We are submitting to our stockholders forre-approval the material terms of the performance goals under the Territorial Bancorp Inc. Annual Incentive Plan, as amended and restated (the “Annual Incentive Plan”) in order to ensure that compensation paid under the Annual Incentive Plan continues to be considered qualified performance-based compensation under Section 162(m) of the Code.

Section 162(m) of the Code generally disallows a federal income tax deduction to any publicly-held corporation for compensation paid in excess of $1.0 million in any taxable year to the Chief Executive Officer or any of the three other most highly compensated executive officers (other than the Chief Financial Officer) who are named in the summary compensation table and are employed by the corporation on the last day of the taxable year. However, there is an exception to this limit on deductibility for qualified performance-based compensation, the material terms of which are disclosed to and approved by the stockholders. Qualified performance-based compensation is fully deductible without regard to this limit.

Because the Annual Incentive Plan allows us to select from a list of performance goals when setting the terms of an award, Section 162(m) of the Code requires that we seek stockholder approval of the material terms of the performance goals at five-year intervals, in order to preserve the treatment of amounts paid under the Annual Incentive Plan as qualified performance-based compensation. The material terms include the employees eligible under the Annual Incentive Plan, a description of the business criteria on which performance goals are based, and the maximum amount of compensation payable under the Annual Incentive Plan to any one employee if the performance goals are attained. Each of these aspects of the Annual Incentive Plan is described below.

The Annual Incentive Plan, as amended and restated, is substantially similar to the plan as approved by our stockholders at the 2012 annual meeting. However, certain immaterial changes have been made to the plan to clarify the duration of the plan and to eliminate certain unnecessary defined terms. In addition, “total shareholder return” and “nonperforming assets ratio” have been added as possible performance goals under the Annual Incentive Plan. We have not made any other changes with respect to the material terms of the performance goals or other terms of the Annual Incentive Plan. If stockholders fail to approve the proposal, no cash incentive compensation will be paid under the Annual Incentive Plan for any year beginning in 2018, but awards previously made, including for 2017, shall continue in accordance with their terms.

The Annual Incentive Plan is intended to enable the Company to provide incentive cash compensation in atax-efficient manner to key employees of the Company who contribute to the profitability and growth of the Company by linking and aligning the personal interests of participants with the goals of the Company through incentive awards. The plan is also intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of participants who make significant contributions to the Company’s success and to allow participants to share in the success of the Company.

The incentive bonus process for the named executive officers under the Annual Incentive Plan is discussed under “Compensation Discussion and Analysis.”

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The following is a summary of the material features of the Annual Incentive Plan, which is qualified in its entirety by reference to the provisions of the Annual Incentive Plan, attached hereto as Appendix B.

General

The Annual Incentive Plan is administered by the members of the Compensation Committee (the “Committee”) who are “outside directors,” as defined in Section 162(m) of the Code. The Committee has full and exclusive power within the limitations set forth in the Annual Incentive Plan to make all decisions and determinations regarding the selection of participants and the granting of awards; establishing the terms and conditions relating to each award; adopting rules, regulations, and guidelines with respect to the Annual Incentive Plan; and interpreting and otherwise construing the Annual Incentive Plan. The Annual Incentive Plan also permits the Committee to delegate to one or more officers of the Company or a subsidiary the power to: (i) designate employees who will receive awards; and (ii) determine the size of any such awards. However, the Committee may not delegate its responsibilities to any such officer for awards to be granted to that officer; the resolution providing such authorization sets forth the total number of awards such officer may grant; and the officer shall report periodically to the Committee regarding the nature and scope of the awards granted pursuant to the authority delegated. Awards intended to be “performance-based” under Code Section 162(m) may only be granted by the Committee in order to be exempt from the $1.0 million limit on deductible compensation for tax purposes.

Eligibility

The officers and key employees of the Company who may be selected from time to time by the Committee are eligible to receive awards under the Annual Incentive Plan.

Types of Awards

The Committee may determine the terms and conditions of awards under the Annual Incentive Plan, which shall be set forth in an award agreement delivered to each participant. The Committee may grant awards that are payable based on the attainment of a specific performance goal or goals, with or without additional service requirements. Generally, awards shall be paid in cash lump sums no later than March 15 of the calendar year following the calendar year in which the awards are earned, unless receipt of the amounts are deferred in accordance with Code Section 409A and the terms of the Annual Incentive Plan. At present, this eligible group consists of three persons.

Performance Features

The performance measures that may be used for awards made under the Annual Incentive Plan will be based on any one or more of the following performance measures, as selected by the Committee:

◾

basic earnings per share;

◾

basic cash earnings per share;

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◾

diluted earnings per share;

◾

diluted cash earnings per share;

◾

net income (before or after taxes);

◾

net income before interest, taxes, depreciation, and/or amortization;

◾

cash earnings;

◾

net interest income;

◾

noninterest income;

◾

general and administrative expense to average assets ratio;

◾

cash general and administrative expense to average assets ratio;

◾

efficiency ratio;

◾

cash efficiency ratio;

◾

return on average assets;

◾

cash return on average assets;

◾

return on average stockholders’ equity;

◾

cash return on average stockholders’ equity;

◾

return on average tangible stockholders’ equity;

◾

cash return on average tangible stockholders’ equity;

◾

core earnings;

◾

operating income;

◾

operating efficiency ratio;

◾

net interest rate spread;

◾

growth in assets, loans, or deposits;

◾

loan production volume;

◾

nonperforming loans;

◾

nonperforming asset ratio;

◾

cash flow;

◾

strategic business objectives, consisting of one or more objectives based upon meeting specified cost targets, business expansion goals, objectively determinable and measurable regulatory (or regulatory-related) requirements;

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◾

goals relating to acquisitions or divestitures;

◾

goals relating to capital raising and capital management, or goals related to objectively determinable and measurable best practices where the outcome is substantially uncertain at the time the performance goal is set;

◾

total shareholder return; or

◾

any combination of the foregoing.

Performance measures may be based on the performance of the Company as a whole or of any one or more subsidiaries or business units of the Company or a subsidiary and may be measured relative to a peer group, an index, or a business plan. The Committee may adjust performance measures after they have been set, but only to the extent the Committee exercises negative discretion as permitted under applicable law for purposes of an exception to Code Section 162(m). In establishing the performance measures, the Committee may provide for the inclusion or exclusion of certain items. Additionally, the grant of an award intended to be performance-based compensation and the establishment of any performance-based measures shall be made during the period required by Section 162(m) of the Code.

Vesting of Awards

Generally, awards are fully vested if the performance goals are achieved and, if any service requirements are imposed with respect to an award, when the service requirement has been met.

Change in Control

Unless otherwise stated in an award agreement as determined by the Committee, upon the occurrence of a change in control of the Company, (i) all then-outstanding awards with performance goals yet to be achieved shall be considered to be earned at target values or at such value otherwise determined by the Committee and payable at the time set forth in the award agreement and (ii) upon a participant’s involuntary termination for a reason other than cause during theone-year period following a change in control, any service requirement applicable to the then-outstanding awards shall be considered satisfied.

Forfeiture

The Committee may specify in an award agreement that the participant’s rights, payments, and benefits with respect to the award shall be subject to reduction, cancellation, forfeiture, or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions, which may include, but is not limited to, termination of employment for cause, any other termination of employment, violation of material Company policies, breach of noncompetition, confidentiality or other restrictive covenants, or other conduct that is detrimental to the business or reputation of the Company or any subsidiary.

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In addition, if the Company is required to prepare an accounting restatement due to errors, omissions, or fraud, the Committee may require any participant who is subject to forfeiture of his or her award under Section 304 of the Sarbanes-Oxley Act of 2002 or Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 to reimburse the Company for the amount of any payment of an award that exceeded the amount that would have been payable to the participant had the financial statements been initially filed as restated or any greater or lesser amount that the Committee shall determine. In addition, in the event of an accounting restatement for any reason, the Committee, in its sole and exclusive discretion, may require that any participant reimburse the Company for all or any part of the amount of any payment in settlement of any award granted hereunder.

Effective Date, Amendment and Termination

The Annual Incentive Plan became effective upon stockholder approval in 2012. The plan, as amended and restated shall continue in effect indefinitely, provided stockholder approval is obtained at the Company’s 2017 Annual Meeting. In the event stockholder approval is not obtained at the 2017 Annual Meeting, the plan shall terminate for purposes of future awards but awards previously made shall continue in accordance with their terms. Also, at any time, the Company may terminate the Annual Incentive Plan. However, any termination of the Annual Incentive Plan will not affect outstanding awards.

The Board of Directors may, at any time, amend or terminate the Annual Incentive Plan or any award granted under the Annual Incentive Plan, provided that, except as provided in the Annual Incentive Plan, no amendment or termination may adversely impair the rights of an outstanding award without the participant’s (or affected beneficiary’s) written consent. The Board of Directors may not materially increase the maximum amount to be granted to any one employee under the Annual Incentive Plan without approval of stockholders. Notwithstanding the foregoing, the Board of Directors may, without stockholder approval, amend the Annual Incentive Plan at any time, retroactively or otherwise, to ensure that the Annual Incentive Plan complies with current or future law and the Board of Directors may unilaterally amend the Annual Incentive Plan and any outstanding award, without participant consent, in order to maintain an exemption from, or to comply with, Section 409A of the Code and its applicable regulations and guidance.

Federal Income Tax Considerations

The following is a summary of the federal income tax consequences that may arise in conjunction with participation in the Annual Incentive Plan.

The grant of an award will not result in taxable income to the participant, because the grant is subject to a substantial risk of forfeiture (i.e., the requirement to satisfy the performance targets set forth in the award agreement). The participant will realize ordinary income at the time of payment of the awards (i.e., following satisfaction of the performance targets) in an amount equal to the dollar amount of the cash bonus that was determined by the Committee. The Company will be entitled to a corresponding deduction for tax purposes. The Company shall withhold amounts from participants to satisfy tax withholding requirements.

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Section 162(m) of the Code generally limits the Company’s ability to deduct for tax purposes compensation in excess of $1.0 million per year for its chief executive officer and the three other most highly compensated executives (excluding the chief financial officer) employed at the end of the year who are named in the summary compensation table (“covered employees”). “Qualified performance-based compensation” is not subject to this limit and is fully deductible by the Company. “Qualified performance-based compensation” is compensation that is subject to a number of requirements such as stockholder approval of possible performance goals, and objective quantification of those goals in advance. Awards under the Annual Incentive Plan may be considered “qualified performance-based compensation.” If an award is not exempt from Section 162(m), income recognized on such award by a covered employee will be subject to the $1.0 million deduction limit on compensation. In the case of performance-based awards granted to a covered employee that are not distributed until after the covered employee’s termination of employment (or in the case of the chief executive officer, the payment is not made until after the end of the year in which his employment terminates), the $1.0 million deduction limit will not apply and the award will be fully deductible. Performance awards may provide for accelerated vesting upon death, disability, or a change in control and still be considered exempt from the $1.0 million deduction limit. The Company expects that the Committee will take these deduction limits into account in setting the size and the terms and conditions of awards. However, the Committee may decide to grant awards that result in executive compensation that exceeds the deduction limit.

The preceding discussion is based on federal tax laws and regulations presently in effect, which are subject to change, and the discussion does not purport to be a complete description of the federal income tax aspects of the Annual Incentive Plan. A participant may also be subject to state and local taxes in connection with the grant of awards under the Annual Incentive Plan. The Company suggests that participants consult with their individual tax advisors to determine the applicability of the tax rules to the awards granted to them in their personal circumstances.

Accounting Treatment

Under Financial Accounting Standards Board Accounting Codification Standards Topic 718, the Company is required to recognize compensation expense on its income statement over the requisite service period or performance period based on the grant date fair value of the awards made under the Annual Incentive Plan.

New Plan Benefits

Awards under the Annual Incentive Plan are based on actual future performance and are subject to the Committee’s negative discretion. As a result, the amounts that will be paid under the Annual Incentive Plan in future are not currently determinable. In no event, however, may any participant receive an award for any one year that exceeds $2.5 million.

Unless otherwise instructed, validly executed proxies will be voted “FOR” this proposal.

The Board of Directors unanimously recommends that you vote “FOR” there-approval of the material terms of the performance goals under the Territorial Bancorp Inc. Annual Incentive Plan.

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Audit Committee Report

The Company’s management is responsible for the Company’s internal controls and financial reporting process. The Company’s independent registered public accounting firm is responsible for performing an independent audit of the Company’s consolidated financial statements, issuing an opinion on the conformity of those financial statements with generally accepted accounting principles, and issuing a report on internal control over financial reporting. The Audit Committee oversees the Company’s internal controls and financial reporting process on behalf of the Board of Directors.

In this context, the Audit Committee has met and held discussions with management and the independent registered public accounting firm. Management represented to the Audit Committee that the Company’s consolidated financial statements were prepared in accordance with generally accepted accounting principles and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent registered public accounting firm. The Audit Committee discussed with the independent registered public accounting firm the matters related to the results of the audit in accordance with PCAOB Standard 1301, Communications with Audit Committees.

In addition, the Audit Committee has received the written disclosures and the letter from the independent registered public accounting firm required by Rule 3520 of the PCAOB Auditing Standards and has discussed with the independent registered public accounting firm the firm’s independence from the Company and its management. In concluding that the registered public accounting firm is independent, the Audit Committee considered, among other factors, whether thenon-audit services provided by the firm were compatible with its independence.

The Audit Committee discussed with the Company’s independent registered public accounting firm the overall scope and plans for their audit. The Audit Committee meets with the independent registered public accounting firm, with and without management present, to discuss the results of their audit, their evaluation of the Company’s internal controls, and the overall quality of the Company’s financial reporting.

In performing all of these functions, the Audit Committee acts only in an oversight capacity. In its oversight role, the Audit Committee relies on the work and assurances of the Company’s management, which has the primary responsibility for financial statements and reports, and of the independent registered public accounting firm who, in their report, express an opinion on the conformity of the Company’s financial statements to generally accepted accounting principles. The Audit Committee’s oversight does not provide it with an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or policies, or appropriate internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, the Audit Committee’s considerations and discussions with management and the independent registered public accounting firm do not assure that the Company’s financial statements are presented in accordance with generally accepted accounting principles, that the audit of the Company’s financial statements has been carried out in accordance with generally accepted auditing standards, or that the Company’s independent registered public accounting firm is in fact “independent.”

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board has approved, that the audited consolidated financial

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statements be included in the Company’s Annual Report on Form10-K for the year ended December 31, 2016, for filing with the Securities and Exchange Commission. The Audit Committee also has approved, subject to stockholder ratification, the selection of Moss Adams LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2017.

Audit CommitteeMeetings of the Board of Directors

The Company conducts business through meetings of its Board of Directors and through activities of its committees. During 2019, the Board of Directors held 14 meetings (not including committee meetings), and our independent directors met 13 times in executive session without management present. No director attended fewer than 75% of the total meetings of the Board of Directors and the committees on which such director served (held during the period for which the director has served as a director or committee member, as appropriate).

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The following table identifies our Audit, Compensation, and Nominating and Corporate Governance committees and their members. All members of each committee are independent in accordance with the listing standards of the NASDAQ Stock Market, Inc. Each of these committees operates under a written charter that is available in the "About Us — Investor Relations — Corporate Governance" section of the Company's website, www.territorialsavings.net.

Audit Committee.    Pursuant to Territorial Bancorp Inc.'s Audit Committee Charter, the Audit Committee assists the Board of Directors in its oversight of the Company's accounting and reporting practices, the quality and integrity of the Company's financial reports and the Company's compliance with applicable laws and regulations. The Audit Committee is also responsible for engaging the Company's independent registered public accounting firm and monitoring its conduct and independence. In addition to meeting the independence requirements of the NASDAQ Stock Market, Inc., each member of the Audit Committee meets the audit committee independence requirements of the Securities and Exchange Commission. The Board of Directors has designated Howard Y. Ikeda and Jennifer Isobe as audit committee financial experts under the rules of the Securities and Exchange Commission. The report of the Audit Committee required by the rules of the Securities and Exchange Commission is included in this proxy statement. See "Audit Committee Report."

Compensation Committee.    Pursuant to Territorial Bancorp Inc.'s Compensation Committee Charter, the Compensation Committee approves the compensation objectives for the Company and Territorial Savings Bank and establishes the compensation for the Chief Executive Officer and other executives. Our Chairman of the Board, President and Chief Executive Officer, Allan Kitagawa, provides recommendations to the Compensation Committee on matters of compensation philosophy, plan design, and the general guidelines for employee compensation. However, Mr. Kitagawa does not vote on and is not present for any discussion of his own compensation. These recommendations are then considered by the Compensation Committee. The Compensation Committee reviews all compensation components for the Company's Chief Executive Officer and other highly compensated executive officers' compensation including base salary, annual incentives, long-term incentives, and perquisites. In addition to reviewing competitive market values, the committee also examines the total compensation mix, pay-for-performance relationship, and how all elements, in the aggregate, comprise the executive's total compensation package. Decisions by the Compensation Committee with respect to the compensation of executive officers are approved by the full Board of Directors. See "Narrative Discussion of Executive Compensation" for more information regarding the role of the Compensation Committee in determining and/or recommending the amount or form of executive compensation. The report of the Compensation Committee required by the rules of the Securities and Exchange Commission is included in this proxy statement. See "Compensation Committee Report."

Nominating and Corporate Governance Committee.    Pursuant to Territorial Bancorp Inc.'s Nominating and Corporate Governance Committee charter, the Nominating and Corporate Governance Committee assists the Board of Directors in identifying qualified individuals to serve as Board members, in determining the

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composition of the Board of Directors and its committees, in monitoring a process to assess Board effectiveness, and in developing and implementing the Company's corporate governance guidelines. The Nominating and Corporate Governance Committee also considers and recommends the nominees for director to stand for election at the Company's annual meeting of stockholders. The procedures of the Nominating and Corporate Governance Committee required to be disclosed by the rules of the Securities and Exchange Commission are included in this proxy statement. See "Nominating and Corporate Governance Committee Procedures."

The Board of Directors encourages each director to attend annual meetings of stockholders. All of our directors attended the 2019 Annual Meeting of Stockholders.

The Board of Directors currently combines the position of Chairman of the Board with the position of Chief Executive Officer, coupled with a lead independent director to strengthen the Company's governance structure. The Board of Directors believes this provides an efficient and effective leadership model for the Company. Combining the Chairman of the Board and Chief Executive Officer positions fosters clear accountability, effective decision-making, alignment on corporate strategy, and a clear and direct channel of communication from senior management to the full Board of Directors. To further strengthen the leadership of the Board of Directors, the Board selects a lead independent director on an annual basis, currently Director Ikeda. The responsibilities of the lead independent director include leading all Board meetings of "nonmanagement" directors. The Board of Directors believes its administration of its risk oversight function is not adversely affected by the Board of Directors' leadership structure. To assure effective independent oversight, the Board has adopted a number of governance practices, including holding executive sessions of the independent directors at least twice a year or more often as needed. In addition, the Compensation Committee, which consists only of independent directors, evaluates the performance of our Chairman of the Board and Chief Executive Officer and presents its findings to our independent directors.

The Board of Directors has an active role, as a whole and also at the committee level, in overseeing management of the Company's risks. The Board of Directors satisfies this responsibility through the review of minutes from each committee regarding such committee's considerations and actions, through frequent attendance as nonvoting guests at committee meetings and through regular reports directly from officers responsible for oversight of particular risks within our organization. The Board of Directors regularly reviews information regarding the Company's credit, liquidity, and operations, as well as the risks associated with such areas. The Company's Compensation Committee is responsible for overseeing the management of risks relating to the Company's executive compensation plans and arrangements. The Audit Committee oversees management of financial risks. The Nominating and Corporate Governance Committee manages risks associated with the Company's corporate governance, including the independence of the Board of Directors and potential conflicts of interest. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board of Directors is regularly informed about such risks. The Board of Directors annually reviews our conflicts of interest policy to ensure all directors are in compliance with the policy.

Risks relating to the direct operations of Territorial Savings Bank are further overseen by its Board of Directors, who are the same individuals who serve on the Board of Directors of Territorial Bancorp Inc. The Board of

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Directors of Territorial Savings Bank also has additional committees that conduct additional risk oversight. Further, the Board of Directors oversees risks through the establishment of policies and procedures that are designed to guide daily operations in a manner consistent with applicable laws, regulations, and risks acceptable to the organization, such as the requirement that all loan relationships in excess of $5.0 million must be submitted to the Board of Directors Loan Committee for approval, subject to ratification by the full Board of Directors, or to the full Board of Directors for approval.

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Stock Ownership

The following table provides information as of March 13, 2020, with respect to persons known by the Company to be the beneficial owners of more than 5% of the Company's outstanding common stock. A person may be considered to own any shares of common stock over which he or she has, directly or indirectly, sole or shared voting or investing power. Percentages are based on 9,658,548 shares of Company common stock issued and outstanding as of March 13, 2020.

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Proposal 1 — Election of Directors

The Board of Directors of Territorial Bancorp Inc. is presently composed of seven members. The Board is divided into three classes, each with three-year staggered terms, with approximately one-third of the directors elected each year. The nominees for election this year are Howard Y. Ikeda and David S. Murakami, all of whom are current directors of the Company and the Bank.

The Board of Directors has determined that each of our directors, with the exception of Chairman of the Board, President and Chief Executive Officer Allan S. Kitagawa, is "independent" as defined in the listing standards of the NASDAQ Stock Market. Mr. Kitagawa is not independent because he is one of our executive officers.

In determining the independence of the directors listed above, the Board of Directors reviewed the following transactions, none of which is required to be reported under "Transactions with Certain Related Persons" below. Director Kirk W. Caldwell has a mortgage loan and overdraft protection with Territorial Savings Bank. Director David S. Murakami has a mortgage loan and overdraft protection, and had a home equity line of credit, with Territorial Savings Bank. Director Francis E. Tanaka has a mortgage loan with Territorial Savings Bank.

It is intended that the proxies solicited by the Board of Directors will be voted for the election of the nominees named below. If any nominee is unable to serve, and you have returned a validly executed proxy card, the persons named in the proxy card will vote your shares to approve the election of any substitute proposed by the Board of Directors. Alternatively, the Board of Directors may adopt a resolution to reduce the size of the Board. At this time, the Board of Directors knows of no reason why any nominee might be unable to serve.

The table below sets forth certain information regarding our directors, nominees proposed by the Board of Directors, and executive officers. Shares beneficially owned include shares of common stock over which a person has, directly or indirectly, sole or shared voting or investment power. Unless otherwise indicated, none of the shares listed are pledged as security, and each of the named individuals has sole voting power and sole investment power with respect to the number of shares shown. Percentages of common stock owned are based on 9,658,548 shares of Company common stock issued and outstanding as of March 13, 2020.

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The Board of Directors recommends a vote "FOR" the election of all nominees.

The business experience for at least the past five years of each of our directors and nominees proposed by the Board of Directors is set forth below. The biographies of each of the nominees and continuing board members below contain information regarding the person's business experience and the experiences, qualifications, attributes, or skills that caused the Nominating Committee and the Board of Directors to determine that the person should serve as a director. Each director is also a director of Territorial Savings Bank. Unless otherwise indicated, directors and executive officers have held their positions for the past five years.

All of the nominees and directors continuing in office are long-time residents of the communities served by Territorial Bancorp Inc. and its subsidiaries and many of such individuals have operated, or currently operate, businesses located in such communities. As a result, each nominee and director continuing in office has significant knowledge of the businesses that operate in Territorial Bancorp Inc.'s market area, an understanding of the general real estate market, values and trends in such communities, and an understanding of the overall demographics of such communities. Additionally, as residents of such communities, each nominee and continuing director has direct knowledge of the trends and developments occurring in such communities. As the holding company for a community banking institution, Territorial Bancorp Inc. believes that the local knowledge and experience of its directors assists Territorial Bancorp Inc. in assessing the credit and banking needs of its customers, developing products and services to better serve its customers, and assessing the risks inherent in its lending operations, and provides Territorial Bancorp Inc. with greater business development opportunities. As local residents, our nominees and directors are also exposed to the advertising, product offerings, and community development efforts of competing institutions which, in turn, assists Territorial Bancorp Inc. in structuring its marketing efforts and community outreach programs.

The nominees standing for election are:

Howard Y. Ikeda is the President of Ikeda and Wong, CPA, Inc., an independent public accounting firm in the State of Hawaii. Mr. Ikeda is a Certified Public Accountant licensed to practice in the State of Hawaii. He began his career with what is now KPMG LLP. In 1973, he founded Ikeda and Wong, which is now one of the largest independent accounting firms in Hawaii. Mr. Ikeda's professional and business experience provide the Board of Directors with valuable insight into the accounting issues Territorial Bancorp Inc. faces and in assessing strategic transactions involving Territorial Bancorp Inc. and Territorial Savings Bank. His employment experience and experience as a Certified Public Accountant qualifies him to be a member of the Audit Committee as a "financial expert" for purposes of the rules and regulations of the Securities and Exchange Commission.

David S. Murakami was a Certified Residential Appraiser in the State of Hawaii, and was the owner of DSM Appraisal Company from 1982 until 2011, when he retired. His firm focused on appraising residential real property. Mr. Murakami previously worked as a Senior Vice President-Loan Administrator with financial institutions in the State of Hawaii beginning in 1962. Mr. Murakami's business experience, both with financial institutions and as a Certified Residential Appraiser, gives him extensive insights into Territorial Savings Bank's challenges and opportunities in its overall operations and lending activities. He is also well-known in the local community as he was a long-time assistant coach for the highly visible University of Hawaii-Manoa baseball program.

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The following directors have terms ending in 2021:

Allan S. Kitagawa has served as Chairman of the Board and Chief Executive Officer of Territorial Savings Bank since 1986, and was named President in 2007. Mr. Kitagawa worked for American Savings and Loan Association from 1974 to 1986, including service as Executive Vice President and Chief Executive Officer of the Hawaii Division. Mr. Kitagawa was a Certified Public Accountant who began his career with what is now KPMG LLP. Under Mr. Kitagawa's leadership, Territorial Savings Bank has grown significantly while the Bank's conservative lending practices have resulted in continued low levels of nonperforming assets.

John M. Ohama is the Principal Broker for Honolulu Land Company, LLC, a firm he founded in 2012. His firm is engaged in the sale of real estate in Hawaii, with some property management services, with such activity primarily in residential real estate sales. Prior to founding his current firm, he was, for almost six years, the co-owner of another real estate firm, where he was the broker-in-charge of the sales side of the firm that also conducted property management. Prior to this co-venture, Mr. Ohama was the owner and principal of a larger real estate sales firm for over two decades that represented buyers and sellers of mostly residential real estate. That firm also conducted commercial real estate transactions and property management. He has served, for eight years, on the Hawaii State Real Estate Commission, the state entity that oversees the real estate brokers and salespeople in Hawaii. He was appointed by two different Governors of the State of Hawaii and served as its chair for five of those years. He also remains an active member of the Honolulu Board of Realtors and has served in various capacities on their ethics and professional responsibility committees. Mr. Ohama's daily involvement in residential real estate provides the Board of Directors with significant insight into the activity that constitutes the significant majority of Territorial Savings Bank's lending activities.

The following directors have terms ending in 2022:

Kirk W. Caldwell was re-elected Mayor of the City and County of Honolulu in 2016. He was first elected Mayor in 2012. He previously held this position as acting Mayor from July 2010 to October 2010. Mr. Caldwell served as Managing Director of the City and County of Honolulu, Hawaii, from January 2009 until July 2010. Mr. Caldwell was Of Counsel to the law firm of Ashford & Wriston from 2011 until December 31, 2012, where he had worked from 1984 until 2009, including as partner. Much of his practice consisted of representing financial institutions, including Territorial Savings Bank. Prior to his appointment as Managing Director of the City and County of Honolulu, Mr. Caldwell also served as the majority leader of the State of Hawaii House of Representatives, and had served as a state representative since 2002. Mr. Caldwell provides the Board of Directors with a significant understanding of the communities in which we operate. Moreover, his experience as an attorney that represented financial institutions continues to provide value to the Board since the Bank is regulated by both the state and federal banking regulators.

Francis E. Tanaka retired as the Executive Vice President — Controller of Haseko (Hawaii), Inc., the U.S. subsidiary of a large Japanese publicly-traded company that is in the engineering, construction, real estate development, investment, and property management business throughout the world. For 18 years, Mr. Tanaka was in charge of the financial management of the Hawaii subsidiary, which still does residential, office, and commercial development in Hawaii. For a portion of Mr. Tanaka's career at Haseko (Hawaii), he supervised the preparation of financial statements for a Securities and Exchange Commission-registered real estate venture of the Hawaii subsidiary. Prior to Haseko (Hawaii), he was the controller of a Hawaii construction company. He was a Certified Public Accountant and was employed by national and local certified public accounting firms early in his career. He continues to provide the Board with knowledge of real estate development in Hawaii and of Japanese companies doing business in Hawaii.

Jennifer Isobe is a principal with the Hawaii accounting firm, KKDLY LLC, which is one of the largest Hawaii accounting firms. Prior to joining KKDLY LLC in 2014, she was a senior audit manager at KPMG LLP. During the course of her career, she has had many clients that have been registered with or were subsidiaries of companies registered with the Securities and Exchange Commission. She has also been part of the audit

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team for several large Hawaii nonprofit entities, including the largest multi-billion dollar trust in Hawaii and one of the largest non-profit hospitals in Hawaii. She has served on the board of a number of large non-profit organizations and is very active in the business community in Hawaii. She is a Certified Public Accountant in Hawaii. Her presence adds depth to the financial expertise on the Board and, as an active practitioner, adds to the Board's knowledge on current accounting developments. In addition, her experience qualifies her to be a member of the Audit Committee as a "financial expert" for purposes of the rules and regulations of the Securities and Exchange Commission.

The following table describes our directors' qualifications and experience.

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Proposal 2 — Ratification of Independent Registered Public Accounting Firm

The Audit Committee of the Board of Directors has appointed Moss Adams LLP to be the Company's independent registered public accounting firm for the year ending December 31, 2020, subject to ratification by stockholders. A representative of Moss Adams LLP is expected to be present at the annual meeting to respond to appropriate questions from stockholders and will have the opportunity to make a statement should he or she desire to do so.

If the ratification of the appointment of Moss Adams LLP is not approved by a majority of the votes cast by stockholders at the annual meeting, other independent registered public accounting firms may be considered by the Audit Committee of the Board of Directors.

Even if the selection of Moss Adams LLP is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such change is in the best interest of the Company and its stockholders.

The Board of Directors recommends that stockholders vote "FOR" the ratification of the appointment of Moss Adams LLP as the Company's independent registered public accounting firm.

The following table sets forth the fees to Moss Adams LLP for the years ended December 31, 2019 and 2018.

The Audit Committee is responsible for appointing, setting compensation and overseeing the work of the independent registered public accounting firm. In accordance with its charter and written policy, the Audit Committee approves, in advance, all audit and permissible non-audit services to be performed by the independent registered public accounting firm, or such services can be performed in accordance with the Audit Committee's written pre-approval policy. Such approval process ensures that the external auditor does not provide any non-audit services to us that are prohibited by law or regulation.

During each of the years ended December 31, 2019 and 2018, 100% of the fees paid to Moss Adams LLP were either approved, in advance, by the Audit Committee, or pre-approved under the Audit Committee's written pre-approval policy.

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Proposal 3 — Advisory (Nonbinding) Vote on Executive Compensation

Based upon a board determination that considered the advice of stockholders at our 2017 Annual Meeting of Stockholders, stockholders are annually being given the opportunity to vote on an advisory (nonbinding) resolution to approve the compensation of our "Named Executive Officers," as described in this proxy statement under "Narrative Discussion of Executive Compensation" and the compensation tables and narrative disclosure. This proposal, commonly known as a "say-on-pay" proposal, gives stockholders the opportunity to endorse or not endorse the Company's executive pay program.

The purpose of our compensation policies and procedures is to attract and retain experienced, highly qualified executives critical to the Company's long-term success and enhancement of stockholder value. The Board of Directors believes the Company's compensation policies and procedures achieve this objective, and therefore recommend stockholders vote "FOR" the proposal. Specifically, stockholders are being asked to approve the following resolution:

"RESOLVED, that the compensation paid to the Company's Named Executive Officers, as disclosed in this proxy statement pursuant to Item 402 of Securities and Exchange Commission Regulation S-K, including the Narrative Discussion of Executive Compensation, compensation tables and narrative discussion is hereby APPROVED."

Although nonbinding, the Board of Directors and the Compensation Committee value constructive dialogue on executive compensation and other important governance topics with our stockholders and encourage all stockholders to vote their shares on this matter. The Board of Directors and the Compensation Committee will review the voting results and take them into consideration when making future decisions regarding our executive compensation programs.

Unless otherwise instructed, validly executed proxies will be voted "FOR" this resolution.

The Board of Directors unanimously recommends that you vote "FOR" the resolution set forth in Proposal 3.

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Audit Committee Report

The Company's management is responsible for the Company's internal controls and financial reporting process. The Company's independent registered public accounting firm is responsible for performing an independent audit of the Company's consolidated financial statements, issuing an opinion on the conformity of those financial statements with generally accepted accounting principles, and issuing a report on internal control over financial reporting. The Audit Committee oversees the Company's internal controls and financial reporting process on behalf of the Board of Directors.

In this context, the Audit Committee has met and held discussions with management and the independent registered public accounting firm. Management represented to the Audit Committee that the Company's consolidated financial statements were prepared in accordance with generally accepted accounting principles and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent registered public accounting firm. The Audit Committee discussed with the independent registered public accounting firm the matters related to the results of the audit in accordance with the applicable standards of the Public Company Accounting Oversight Board ("PCAOB").

In addition, the Audit Committee has received the written disclosures and the letter from the independent registered public accounting firm required by Rule 3526 of the PCAOB Standards and has discussed with the independent registered public accounting firm the firm's independence from the Company and its management. In concluding that the registered public accounting firm is independent, the Audit Committee considered, among other factors, whether the non-audit services provided by the firm were compatible with its independence.

The Audit Committee discussed with the Company's independent registered public accounting firm the overall scope and plans for their audit. The Audit Committee meets with the independent registered public accounting firm, with and without management present, to discuss the results of their audit, their evaluation of the Company's internal controls, and the overall quality of the Company's financial reporting.

In performing all of these functions, the Audit Committee acts only in an oversight capacity. In its oversight role, the Audit Committee relies on the work and assurances of the Company's management, which has the primary responsibility for financial statements and reports, and of the independent registered public accounting firm who, in their report, express an opinion on the material conformity of the Company's financial statements to generally accepted accounting principles. The Audit Committee's oversight does not provide it with an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or policies, or appropriate internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, the Audit Committee's considerations and discussions with management and the independent registered public accounting firm do not assure that the Company's financial statements are presented in accordance with generally accepted accounting principles, that the audit of the Company's financial statements has been carried out in accordance with the standards of the PCAOB, or that the Company's independent registered public accounting firm is in fact "independent."

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board has approved, that the audited consolidated financial statements be included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019, for filing with the Securities and Exchange Commission. The Audit Committee also has approved, subject to stockholder ratification, the selection of Moss Adams LLP as the Company's independent registered public accounting firm for the year ending December 31, 2020.

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Audit Committee of the Board of Directors of
Territorial Bancorp Inc.

Howard Y. Ikeda (Chairman)
David Murakami
Jennifer Isobe
John Ohama

Information about Executive Officers

The following provides information regarding our executive officers who are not directors of the Company.

Vernon Hirata has served as Territorial Savings Bank's Vice Chairman, Co-Chief Operating Officer, General Counsel and Corporate Secretary since 2007. Mr. Hirata joined Territorial Savings Bank in 1986 as Senior Vice President/General Counsel, and was named Executive Vice President/General Counsel and Corporate Secretary in 1987. Previously, Mr. Hirata was employed at American Savings and Loan Association from 1978 to 1986, including service as Senior Vice President and Staff Attorney.

Ralph Y. Nakatsuka joined Territorial Savings Bank in 2007 as Vice Chairman and Co-Chief Operating Officer, and was employed at American Savings Bank from 1980 to 2007, including service as Executive Vice President of Lending and Chief Lending Officer from 1997 to 2007 and Chief Financial Officer from 1987 to 1997. Mr. Nakatsuka is a Certified Public Accountant.

Karen J. Cox has served as Senior Vice President of Administration of Territorial Savings Bank since 1984, and has been employed by Territorial Savings Bank since 1968. Ms. Cox is in charge of various areas, including human resources, information technology, and branch development and maintenance. Ms. Cox previously worked with other financial institutions in the State of Hawaii beginning in 1964.

Richard K.C. Lau has served as Senior Vice President and Chief Lending Officer of Territorial Savings Bank since 1985. Mr. Lau was employed at other financial institutions in the State of Hawaii beginning in 1970.

Melvin M. Miyamoto was named Chief Financial Officer in June 2015, having served as Senior Vice President and Treasurer of Territorial Savings Bank since 1986, and has been employed by Territorial Savings Bank since 1984. Mr. Miyamoto is a Certified Public Accountant.

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Executive Compensation

Each of Territorial Savings Bank's outside directors receives an annual retainer for board meetings of $32,650 per year and an annual retainer for committee meetings of $2,450 per year. Each of Territorial Bancorp Inc.'s outside directors receives an annual retainer for board meetings of $5,100 per year and an annual retainer for committee meetings of $615 per year. The retainer fees are increased to the following amounts for the following committees: the Chairman of Territorial Savings Bank's Audit Committee receives a committee retainer of $2,650 and the Chairman of Territorial Bancorp Inc.'s Audit Committee receives a committee retainer of $8,570; the Chairman of Territorial Savings Bank's Compensation Committee receives a committee retainer of $4,900; and the Chairman of Territorial Bancorp Inc.'s Compensation Committee receives a committee retainer of $1,225. Receipt of full retainer payments is based upon a director attending at least 75% of board or committee meetings, as applicable, with reductions for the failure to attend such number of board or committee meetings.

The following table sets forth for the year ended December 31, 2019, certain information as to the total remuneration we paid to our directors. Mr. Kitagawa does not receive separate fees for service as a director.

At December 31, 2019, Directors Ikeda and Caldwell had 11,275 and 31,497 vested but unexercised stock options, respectively, each with an exercise price of $17.36 per option. Director Tanaka had 3,085 vested but unexercised stock options with an exercise price of $23.62 per option.

The Company has no stock ownership guidelines for directors. However, for previous grants under our 2010 Equity incentive Plan each director must retain an amount equal to 50% of each restricted stock or stock option award (net of taxes) until their service on the Board ends.

Narrative Discussion of Executive Compensation

We qualify as a "smaller reporting company" under revised rules of the Securities and Exchange Commission. As a result, we are not required to provide a compensation discussion and analysis in this Proxy Statement. Instead, we are providing this Narrative Discussion of Executive Compensation in order to summarize key aspects of our executive compensation programs, policies and pay decisions related to the "Named Executive Officers" as defined below.

This discussion describes our 2019 executive compensation program and pay decisions. Our compensation program and practices are designed to reward our executives based on our performance against our short-

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and long-term goals in a risk appropriate manner that enhances the long-term value of the Company. The following pages explain the process, objectives, and structure of the executive compensation decisions undertaken by our Compensation Committee and our Board of Directors during 2019, as well as provide some historical perspective on our evolving pay program.

For 2019, our Named Executive Officers are:

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Executive Compensation

Director Fees

Each of Territorial Savings Bank’s outside directors receives an annual retainer for Board meetings of $32,650 per year and an annual retainer for committee meetings of $2,450 per year. Each of Territorial Bancorp Inc.’s outside directors receives an annual retainer for Board meetings of $5,100 per year and an annual retainer for committee meetings of $615 per year. The retainer fees are increased to the following amounts for the following committees: the Chairman of Territorial Savings Bank’s Audit Committee receives a committee retainer of $2,650 and the Chairman of Territorial Bancorp Inc.’s Audit Committee receives a committee retainer of $8,570; the Chairman of Territorial Savings Bank’s Compensation Committee receives a committee retainer of $4,900; and the Chairman of Territorial Bancorp Inc.’s Compensation Committee receives a committee retainer of $1,225. Receipt of full retainer payments is based upon a director attending at least 75% of Board or committee meetings, as applicable, with reductions for the failure to attend such number of Board or committee meetings.

The following table sets forth for the year ended December 31, 2016, certain information as to the total remuneration we paid to our directors. Mr. Kitagawa does not receive separate fees for service as a director.

At December 31, 2016, Directors David Murakami, Richard Murakami, Ikeda, and Caldwell each had 41,275 vested but unexercised stock options with an exercise price of $17.36 per option. Director Tanaka had 3,085 vested but unexercised stock options with an exercise price of $23.62 per option.

The Company has no stock ownership guidelines for directors. However, for previous grants under our 2010 Equity incentive Plan each director must retain 50% of each restricted stock or stock option award (net of taxes) until their service on the board ends. We have not determined whether we will maintain the stock retention requirement for future grants made under the 2010 Equity Incentive Plan.

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Compensation Discussion and Analysis

The following Compensation Discussion and Analysis, or CD&A, describes our 2016 executive compensation program, as well as several significant changes to our 2017 program that we made based on stockholder feedback. Our compensation program and practices are designed to reward our executives based on our performance against our short- and long-term goals in a risk appropriate manner that enhances the long-term value of the Company. The following pages explain the process, objectives, and structure of the executive compensation decisions undertaken by our Compensation Committee and our Board of Directors during 2016, as well as provide some historical perspective on our transition from mutual to public company status and the impact on our evolving pay program. This CD&A is intended to be read in conjunction with the tables included elsewhere in this proxy statement, which provide detailed historical compensation information for our “named executive officers,” or NEOs, described below.

For 2016, our named executive officers are:

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I. Executive Summary

Company Background and Performance Highlights

Territorial Savings Bank has been serving customers in our Hawaii market for nearly one hundred years. In 2009, Territorial Savings Bank converted from a mutual savings bank by forming Territorial Bancorp as its holding company and conducting its initial public offering. As a mutual organization, our ability to raise capital was limited. The additional capital raised in the public offering allowed us to better compete in our highly competitive market place while strengthening our regulatory capital position. In 2014, we converted to a Hawaii state-chartered savings bank to provide greater operating flexibility.

Our performance has always been strong relative to other thrifts across the United States.

Our compensation program has evolved following our conversion from a mutual ownership structure to a more mature publicly traded institution. Highlights include:

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Our financial results consistently reflect 75^th percentile performance:

As illustrated below, our profitability, reflected by our return on average equity (“ROAE”), return on average assets (“ROAA”) andnon-performing assets (i.e. asset quality measured by NPA/Assets) has consistently tracked above the 75^th percentile of our peer group during 2012 to 2015 and at or just below the 75^th percentile for 2016.

Territorial Savings Bank has been serving customers in our Hawaii market for nearly one hundred years. We are a traditional thrift institution that focuses on retail customers, including originating long-term, fixed-rate residential mortgage loans. Well over half of our deposits are savings deposits (as opposed to certificates of deposit or checking accounts), and over 95% of our loan portfolio consists of fixed-rate residential mortgage loans. Our objective is to provide key banking services at a reasonable price to our customers, while growing organically. We also recognize our responsibility to provide a reasonable return to our stockholders.

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​In 2019, we paid two special dividends in addition to our quarterly dividends. The special dividends totaled $0.60 per share and the total dividends paid for the year were $1.49 per share.



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​Since going public, we have paid 40 consecutive quarterly dividends.



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​Net income increased 14.5% to $22.00 million for the year ended December 31, 2019 compared to $19.21 million for the year ended December 31, 2018.



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​The Company did not have any delinquent mortgage loans 90 days past due and not accruing at December 31, 2019. Mortgage loans represent over 95% of Territorial Savings Bank's loans.



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​Our total shareholder return was 25.24% during 2019.

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2016 Strategic and Financial Highlights:

2016 was a very successful year for the Company and its stockholders. We:

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Increased net income by 10.84% from the previous year.

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Increased annual dividends per share 21% over 2015 ($0.92, up from $0.76) including aspecialdividend of $0.20 in December; the 5th consecutive year we paid an extra dividend.

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Increased our fully diluted earnings per share to $1.76 from $1.59 per share.

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Originated thesecond highestamount of loansever in the history of the Bank.

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Received regulatory approval to open our29thbranch in Hawaii, which opened in April 2017.

Stockholder Engagement and Changes Resulting

from our Say on Pay Results

We have actively engaged with stockholders since 2013. Each year we reach out to our largest investors (representing approximately 35% to 40% of our stockholder base) to request feedback on our executive compensation programs. While a significant number of institutional stockholders do not feel the need to engage with us, we appreciate the feedback from those that do participate. All feedback received was summarized by the Director of Investor Relations and shared with the Compensation Committee and the Board of Directors. During this process we received positive validation of some of our programs and practices, as well as constructive ideas for enhancements to other elements of our programs. As a result, our corporate governance and compensation programs have evolved over the years in part in direct response to this feedback. We have made many changes to our program over the last several years and believe 2017 might represent the most significant changes yet, which we made in response to further feedback we received in 2016.

The formal stockholder advisory votes on pay(“Say-on-Pay”) provides a valuable barometer for how our programs are perceived by the full spectrum of our investors. In 2013, our advisory Say on Pay vote received favorable votes of over 90% of stockholders voting, but this approval decreased to 53% in 2014. As a result of our stockholder outreach, and with the assistance of our compensation consultant at the time, we made changes that were favorably received which resulted in 88% approval of our advisory Say on Pay vote in 2015. Based on these positive results, and the limited feedback received from institutional stockholders, we continued to implement the changes made in 2015. However, at the 2016 stockholder meeting, our approval decreased to 64%. We took this advisory vote seriously and worked diligently to understand the stockholder and proxy advisory firm perspectives and made more substantial changes to our program for 2017. We hope these changes are well received and encourage more stockholders to engage with us, as we have noticed a reduction in stockholders willing to engage in detailed discussions with us over the years.

While we believe we established a sound foundation for determining executive compensation over the years, the Compensation Committee decided to bring in a fresh point of view by engaging Meridian Compensation Partners, LLC (“Meridian”) atyear-end 2016 to serve as our new Compensation Committee independent compensation consultant and to assist in some of the changes we are implementing for 2017. See” 2017 Changes to Compensation”, which summarizes our 2017 changes.

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Below is a high-level summary of some of the major changes we have made over the last several years based on stockholder feedback:

As a result of our changes, we believe we are continuing to evolve toward a best practice program that will ensure our executives are motivated and rewarded for continuing to sustain our strong performance results and enhancing stockholder value. Below is a summary of our compensation and governance practices.

What We Do:

Pay for Performance: Provide annual and long-term incentive plans that focus on delivering specific performance results.

Balanced Approach to Total Compensation:We use a mix of performance metrics across both short- and long-term performance periods, consider both absolute and relative performance in assessing our performance and provide payouts in cash and equity.

Annual Say on Pay Vote: We conduct an annualSay-on-Pay advisory vote.

Independent Compensation Consultant: The Compensation Committee engages its own independent compensation consultant to review the Company’s executive compensation program and practices.

Robust Stock Ownership and Holding Requirements: We have stock ownership guidelines requiring our executives to hold significant equity ownership. In addition, our shares issued through our equity incentive plan require executives and directors to hold an amount of stock equal to 50% of granted stock, net of stock sold to pay for taxes,until separation from the Company.

Clawback Policy: Our incentive plans are subject to clawback/recoupment in the event of an accounting restatement due to covered misconduct.

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Double Trigger Severance and Equity Vesting Provisions:We require both a change in control and loss of position before severance is paid. We require the same before equity can vest on change in control.

Stockholder Engagement: As part of the Company’s stockholder outreach program, members of the Compensation Committee and members of management welcome engagement with stockholders to better understand their perceptions and views on our executive compensation program.

Mitigate Inappropriate Risk Taking: Our compensation programs include features intended to discourage employees from taking unnecessary and excessive risk including balanced performance metrics, emphasis on long-term stockholder value creation, and clawback provisions.

What We Don’t Do:

Gross-ups for Excise Taxes: We don’t providechange-in-control taxgross-ups to individuals promoted or hired after 2014 (only three legacy agreements still in place).

No Repricing of Stock Options:We prohibit repricing of stock options without stockholder approval.

Hedging and Pledging: We prohibit hedging and restrict pledging as part of our Insider Trading Policy.

20162019 Compensation Program Summary

For 2016, a significant portion of our top three executives’ pay was provided in the form of performance-based incentives. For the top three NEOs,

Our executive compensation program has evolved following our conversion from a mutual ownership structure to a more mature publicly traded institution.

In 2019, similar to prior years, a significant portion of our Named Executive Officers' pay was provided in the form of performance-based incentives. For the Named Executive Officers, our long-term incentive program represented 55% of total variable pay based on long-term performance and 45% based on annual performance objectives. This mix was designed to support our focus on long-term profitability results. The pie chart below illustrates our average target total compensation mix for the Named Executive Officers.

Our incentive performance metrics are designed to reward profitability and return to our stockholders that preserves our focus on strong credit portfolio. Below is a summary of the measures and weights for our annual and long-term incentive programs.