Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 28, 2021 | Jun. 30, 2020 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2020 | ||
Entity File Number | 001-34403 | ||
Entity Registrant Name | Territorial Bancorp Inc. | ||
Entity Incorporation, State or Country Code | MD | ||
Entity Tax Identification Number | 26-4674701 | ||
Entity Address, Address Line One | 1132 Bishop Street, SuiteĀ 2200 | ||
Entity Address, City or Town | Honolulu | ||
Entity Address, State or Province | HI | ||
Entity Address, Postal Zip Code | 96813 | ||
City Area Code | 808 | ||
Local Phone Number | 946-1400 | ||
Title of 12(b) Security | Common stock | ||
Trading Symbol | TBNK | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Public Float | $ 204.8 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 9,513,867 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001447051 | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
ASSETS | ||
Cash and cash equivalents | $ 363,543 | $ 44,806 |
Investment securities available for sale, at fair value | 3,562 | 8,628 |
Investment securities held to maturity, at amortized cost (fair value of $262,841 and $371,305 at December 31, 2020 and December 31, 2019, respectively) | 247,642 | 363,883 |
Loans held for sale | 2,195 | 470 |
Loans receivable, net | 1,406,995 | 1,584,784 |
Federal Home Loan Bank stock, at cost | 8,144 | 8,723 |
Federal Reserve Bank stock, at cost | 3,145 | 3,128 |
Accrued interest receivable | 6,515 | 5,409 |
Premises and equipment, net | 4,855 | 4,370 |
Right-of-use asset, net | 12,333 | 11,580 |
Bank-owned life insurance | 45,644 | 45,113 |
Deferred income tax assets, net | 3,382 | 2,619 |
Prepaid expenses and other assets | 2,844 | 2,800 |
Total assets | 2,110,799 | 2,086,313 |
Liabilities: | ||
Deposits | 1,659,800 | 1,631,933 |
Advances from the Federal Home Loan Bank | 141,000 | 156,000 |
Securities sold under agreements to repurchase | 10,000 | 10,000 |
Accounts payable and accrued expenses | 29,221 | 23,038 |
Lease liability | 13,119 | 12,183 |
Income taxes payable | 2,161 | 2,305 |
Advance payments by borrowers for taxes and insurance | 6,790 | 6,964 |
Total liabilities | 1,862,091 | 1,842,423 |
Commitments and contingencies: (Note 22 and 24) | ||
Stockholders' Equity: | ||
Preferred stock, $0.01 par value; authorized 50,000,000 shares, no shares issued or outstanding | ||
Common stock, $0.01 par value; authorized 100,000,000 shares; issued and outstanding 9,513,867 and 9,681,493 shares at December 31, 2020 and December 31, 2019, respectively | 95 | 97 |
Additional paid-in capital | 61,153 | 65,057 |
Unearned ESOP shares | (3,915) | (4,404) |
Retained earnings | 200,066 | 190,808 |
Accumulated other comprehensive loss | (8,691) | (7,668) |
Total stockholders' equity | 248,708 | 243,890 |
Total liabilities and stockholders' equity | $ 2,110,799 | $ 2,086,313 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Consolidated Balance Sheets | ||
Investment securities held to maturity, fair value (in dollars) | $ 262,841 | $ 371,305 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized shares | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 100,000,000 | 100,000,000 |
Common stock, shares issued | 9,513,867 | 9,681,493 |
Common stock, shares outstanding | 9,513,867 | 9,681,493 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Interest income: | ||
Loans | $ 59,174 | $ 63,137 |
Investment securities | 9,615 | 11,459 |
Other investments | 968 | 972 |
Total interest income | 69,757 | 75,568 |
Interest expense: | ||
Deposits | 9,013 | 13,463 |
Advances from the Federal Home Loan Bank | 2,996 | 3,346 |
Securities sold under agreements to repurchase | 182 | 218 |
Total interest expense | 12,191 | 17,027 |
Net interest income | 57,566 | 58,541 |
Provision for loan losses | 1,625 | 61 |
Net interest income after provision for loan losses | 55,941 | 58,480 |
Noninterest income: | ||
Service fees on loan and deposit accounts | 2,662 | 1,937 |
Income on bank-owned life insurance | 807 | 835 |
Gain on sale of investment securities | 1,320 | 2,910 |
Gain on sale of loans | 1,626 | 1,540 |
Other | 389 | 610 |
Total noninterest income | 6,804 | 7,832 |
Noninterest expense: | ||
Salaries and employee benefits | 21,741 | 22,580 |
Occupancy | 6,684 | 6,400 |
Equipment | 4,666 | 4,183 |
Federal deposit insurance premiums | 352 | 288 |
Other general and administrative expenses | 3,982 | 4,555 |
Total noninterest expense | 37,425 | 38,006 |
Income before income taxes | 25,320 | 28,306 |
Income taxes | 6,715 | 6,311 |
Net income | $ 18,605 | $ 21,995 |
Basic earnings per share (in dollars per share) | $ 2.03 | $ 2.38 |
Diluted earnings per share (in dollars per share) | 2.01 | 2.34 |
Cash dividends declared (in dollars per share) | $ 1.02 | $ 1.49 |
Basic weighted-average shares outstanding (in shares) | 9,137,398 | 9,196,674 |
Diluted weighted-average shares outstanding (in shares) | 9,196,689 | 9,325,614 |
Service Fees on Loan and Deposit Accounts | ||
Noninterest income: | ||
Service fees on loan and deposit accounts | $ 2,662 | $ 1,937 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Consolidated Statements of Comprehensive Income | ||
Net income | $ 18,605 | $ 21,995 |
Unfunded pension liability loss, net of tax | (789) | (457) |
Unrealized (loss) gain on securities, net of tax | (234) | 598 |
Other comprehensive (loss) income, net of tax | (1,023) | 141 |
Comprehensive income | $ 17,582 | $ 22,136 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Unearned ESOP Shares | Retained Earnings | Accumulated Other Comprehensive Loss | Total |
Balance at Dec. 31, 2018 | $ 97 | $ 65,090 | $ (4,893) | $ 182,594 | $ (7,809) | $ 235,079 |
Balance (in shares) at Dec. 31, 2018 | 9,645,955 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 21,995 | 21,995 | ||||
Other comprehensive income (loss) | 141 | 141 | ||||
Adoption of lease accounting standard | (10) | (10) | ||||
Cash dividends declared | (13,771) | (13,771) | ||||
Share-based compensation | 571 | 571 | ||||
Share-based compensation (in shares) | 6,541 | |||||
Allocation of ESOP shares | 909 | 489 | 1,398 | |||
Repurchase of shares of common stock | $ (2) | (5,384) | (5,386) | |||
Repurchase of shares of common stock (in shares) | (192,248) | |||||
Exercise of options for common stock | $ 2 | 3,871 | 3,873 | |||
Exercise of options for common stock (in shares) | 221,245 | |||||
Balance at Dec. 31, 2019 | $ 97 | 65,057 | (4,404) | 190,808 | (7,668) | 243,890 |
Balance (in shares) at Dec. 31, 2019 | 9,681,493 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 18,605 | 18,605 | ||||
Other comprehensive income (loss) | (1,023) | (1,023) | ||||
Cash dividends declared | (9,347) | (9,347) | ||||
Share-based compensation | 619 | 619 | ||||
Share-based compensation (in shares) | 18,875 | |||||
Allocation of ESOP shares | 690 | 489 | 1,179 | |||
Repurchase of shares of common stock | $ (3) | (6,633) | (6,636) | |||
Repurchase of shares of common stock (in shares) | (268,328) | |||||
Exercise of options for common stock | $ 1 | 1,420 | 1,421 | |||
Exercise of options for common stock (in shares) | 81,827 | |||||
Balance at Dec. 31, 2020 | $ 95 | $ 61,153 | $ (3,915) | $ 200,066 | $ (8,691) | $ 248,708 |
Balance (in shares) at Dec. 31, 2020 | 9,513,867 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Consolidated Statements of Stockholders' Equity, Share Data | ||
Cash dividends declared (in dollars per share) | $ 1.02 | $ 1.49 |
Common Stock | ||
Consolidated Statements of Stockholders' Equity, Share Data | ||
Allocation of ESOP shares, shares | 48,932 | 48,932 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 18,605 | $ 21,995 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Provision for loan losses | 1,625 | 61 |
Depreciation and amortization | 1,224 | 1,171 |
Deferred income tax (benefit) expense | (392) | 1,466 |
Amortization of fees, discounts, and premiums, net | (401) | (493) |
Amortization of right-of-use asset | 3,289 | 2,761 |
Origination of loans held for sale | (45,496) | (7,982) |
Proceeds from sales of loans held for sale | 44,991 | 10,133 |
Gain on sale of loans, net | (1,626) | (1,540) |
Gain on sale of investment securities available for sale | (290) | (153) |
Gain on sale of investment securities held to maturity | (1,030) | (2,757) |
Net loss on disposal of premises and equipment | 49 | |
ESOP expense | 1,179 | 1,398 |
Share-based compensation expense | 619 | 571 |
Increase in accrued interest receivable | (1,106) | (135) |
Net increase in bank-owned life insurance | (807) | (835) |
Net decrease in prepaid expenses and other assets | 94 | 81 |
Net increase (decrease) in accounts payable and accrued expenses | 3,946 | (629) |
Net decrease in lease liability | (3,166) | (2,638) |
Net decrease in advance payments by borrowers for taxes and insurance | (174) | (46) |
Net decrease in income taxes payable | (144) | (102) |
Net cash from operating activities | 20,989 | 22,327 |
Cash flows from investing activities: | ||
Purchases of investment securities held to maturity | (9,210) | |
Principal repayments on investment securities held to maturity | 109,990 | 42,698 |
Principal repayments on investment securities available for sale | 1,368 | 1,187 |
Proceeds from sale of investment securities held to maturity | 16,863 | 3,527 |
Proceeds from sale of investment securities available for sale | 3,668 | 5,117 |
Principal repayments on loans receivable, net of loan originations | 167,312 | (48,782) |
Purchases of Federal Home Loan Bank stock | (21) | (22,366) |
Proceeds from redemption of Federal Home Loan Bank stock | 600 | 21,736 |
Purchases of Federal Reserve Bank stock | (17) | (14) |
Proceeds from bank-owned life insurance | 276 | 788 |
Purchases of premises and equipment | (1,762) | (718) |
Proceeds from disposals of premises and equipment | 4 | |
Net cash from investing activities | 298,281 | (6,037) |
Cash flows from financing activities: | ||
Net increase in deposits | 27,867 | 2,769 |
Proceeds from advances from the Federal Home Loan Bank | 557,200 | |
Repayments of advances from the Federal Home Loan Bank | (15,000) | (543,400) |
Proceeds from securities sold under agreements to repurchase | 5,000 | 5,000 |
Repayments of securities sold under agreements to repurchase | (5,000) | (25,000) |
Purchases of Fed Funds | 10 | 10 |
Sales of Fed Funds | (10) | (10) |
Proceeds from issuance of common stock | 170 | |
Repurchases of common stock | (5,000) | (1,597) |
Cash dividends paid | (8,400) | (13,689) |
Net cash from financing activities | (533) | (18,547) |
Net increase (decrease) in cash and cash equivalents | 318,737 | (2,257) |
Cash and cash equivalents at beginning of the period | 44,806 | 47,063 |
Cash and cash equivalents at end of the period | 363,543 | 44,806 |
Cash paid for: | ||
Interest on deposits and borrowings | 12,554 | 16,873 |
Income taxes | 8,161 | 4,947 |
Supplemental disclosure of noncash investing and financing activities: | ||
Company stock acquired through stock swap and net settlement transactions | 1,421 | 3,703 |
Company stock repurchased through stock swap and net settlement transactions | 1,636 | 3,789 |
Loans receivable transferred to held for sale | 9,431 | 39,051 |
Loans securitized into investment securities | 9,759 | 36,826 |
Dividends declared, not yet paid | 947 | 82 |
Establishment of right-of-use asset, net of incentives | 4,042 | 14,341 |
Establishment of lease liability | $ 4,102 | 14,821 |
Transfer of securities from held-to-maturity to available-for-sale | $ 11,390 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2020 | |
Organization | |
Organization | (1) Organization ā Territorial Bancorp Inc. is a Maryland corporation and is the holding company for Territorial Savings Bank. Territorial Savings Bank is a Hawaii state-chartered bank headquartered in Honolulu, Hawaii and is a member of the Federal Reserve System. Territorial Savings Bank has |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | (2) Summary of Significant Accounting Policies ā (a) Description of Business ā Territorial Bancorp Inc. (the Company), through its wholly-owned subsidiary, Territorial Savings Bank (the Bank), provides loan and deposit products and services primarily to individual customers through 29 branches located throughout Hawaii. We deal primarily in residential mortgage loans in the State of Hawaii. The Companyās earnings depend primarily on its net interest income, which is the difference between the interest income earned on interest-earning assets (loans receivable and investments) and the interest expense incurred on interest-bearing liabilities (deposit liabilities and borrowings). Deposits traditionally have been the principal source of the Bankās funds for use in lending, meeting liquidity requirements, and making investments. The Company also derives funds from receipt of interest and principal repayments on outstanding loans receivable and investments, borrowings from the Federal Home Loan Bank (FHLB), securities sold under agreements to repurchase, and proceeds from issuance of common stock. ā (b) Principles of Consolidation ā The Consolidated Financial Statements include the accounts and results of operations of Territorial Bancorp Inc. and Territorial Savings Bank and its wholly-owned subsidiaries. Significant intercompany balances and transactions have been eliminated in consolidation. ā (c) Cash and Cash Equivalents ā Cash and cash equivalents includes cash and due from banks, interest-bearing deposits in other banks, federal funds sold, and short-term, highly liquid investments with original maturities of three months or less. ā (d) Investment Securities ā The Company classifies and accounts for its investment securities as follows: (1) held-to-maturity debt securities in which the Company has the positive intent and ability to hold to maturity are reported at amortized cost; (2) trading securities that are purchased for the purpose of selling in the near term are reported at fair value, with unrealized gains and losses included in current earnings; and (3) available-for-sale securities not classified as either held-to-maturity or trading securities are reported at fair value, with unrealized gains and losses excluded from current earnings and reported as a separate component of equity. At December 31, 2020 and 2019, the Company classified all of its investments, except $3.6 million and $8.6 million of securities, respectively, as held-to-maturity. ā A decline in the market value of any available-for-sale or held-to-maturity security below cost, that is deemed to be other than temporary, results in an impairment to reduce the carrying amount to fair value. To determine whether impairment is other than temporary, the Company considers the type of the investment, the cause of the decline in value and the amount and duration of the decline in value. It also considers whether it has the intent and ability not to sell and would not be required to sell for a sufficient period of time to recover the remaining amortized cost basis. ā Gains or losses on the sale of investment securities are computed using the specific-identification method. The Company amortizes premiums and accretes discounts associated with investment securities using the interest method over the contractual life of the respective investment security. Such amortization and accretion is included in the interest income line item in the Consolidated Statements of Income. Interest income is recognized when earned. ā (e) Loans Receivable ā This policy applies to all loan classes. Loans receivable are stated at the principal amount outstanding, less the allowance for loan losses, loan origination fees and costs, and commitment fees. Interest on loans receivable is accrued as earned. The Company has a policy of placing loans on a nonaccrual basis when 90 days or more contractually delinquent or when, in the opinion of management, collection of all or part of the principal balance appears doubtful. For nonaccrual loans, the Company records payments received as a reduction in principal. The Company, considering current information and events regarding the borrowersā ability to repay their obligations, considers a loan to be impaired when it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. When a loan is considered to be impaired, the amount of the impairment is measured based on the present value of expected future cash flows discounted at the loanās effective interest rate or, if the loan is considered to be collateral dependent, based on the fair value of the collateral less estimated costs to sell. Impairment losses are written off against the allowance for loan losses. For nonaccrual impaired loans, the Company records payments received as a reduction in principal. A nonaccrual loan may be restored to an accrual basis when principal and interest payments are current and full payment of principal and interest is expected. ā (f) Loans Held for Sale ā Loans held for sale are stated at the lower of aggregate cost or market value. Net fees and costs of originating loans held for sale are deferred and are included in the basis for determining the gain or loss on sales of loans held for sale. ā (g) Deferred Loan Origination Fees and Unearned Loan Discounts ā Loan origination and commitment fees and certain direct loan origination costs are being deferred, and the net amount is recognized over the life of the related loan as an adjustment to yield. Net deferred loan fees are amortized using the interest method over the contractual term of the loan, adjusted for actual prepayments. Net unamortized fees on loans paid in full are recognized as a component of interest income. ā (h) Real Estate Owned ā Real estate owned is valued at the time of foreclosure at fair value, less estimated cost to sell, thereby establishing a new cost basis. The Company obtains appraisals based on recent comparable sales to assist management in estimating the fair value of real estate owned. Subsequent to acquisition, real estate owned is valued at the lower of cost or fair value, less estimated cost to sell. Declines in value are charged to expense through a direct write-down of the asset. Costs related to holding real estate are charged to expense while costs related to development and improvements are capitalized. Net gains or losses recognized on the sale of real estate owned are included in other general and administrative expenses. ā (i) Allowance for Loan Losses ā The Company maintains an allowance adequate to cover managementās estimate of probable loan losses as of the balance sheet date. The Companyās allowance for loan losses is maintained at a level considered adequate to provide for losses that can be estimated based upon specific and general conditions. All loan losses are charged, and all recoveries are credited, to the allowance for loan losses. Additions to the allowance for loan losses are provided by charges to income based on various factors, which, in the Companyās judgment, deserve current recognition in estimating probable losses. Charge-offs to the allowance are made when management determines that collectability of all or a portion of a loan is doubtful and available collateral is insufficient to repay the loan. ā General allowances are established for loan losses on a portfolio basis for loans that do not meet the definition of impaired, in accordance with the Receivables topic of the FASB ASC. The portfolio is grouped into similar risk characteristics, primarily loan type and loan-to-value ratio. The Company applies an estimated loss rate to each loan group. The loss rates applied are based upon its loss experience adjusted, as appropriate, for qualitative and environmental factors discussed below. This evaluation is inherently subjective, as it requires material estimates that may be susceptible to significant revisions based upon changes in economic and real estate market conditions. Actual loan losses may be significantly more than the allowance for loan losses the Company has established, which could have a material negative effect on its financial results. ā Residential mortgage loans represent the largest segment of the Companyās loan portfolio. Residential mortgage loans are secured by a first mortgage on residential real estate in Hawaii and consist primarily of fixed-rate mortgage loans which have been underwritten to Freddie Mac and Fannie Mae guidelines and have similar risk characteristics. The loan loss allowance is determined by first calculating the historical loss rate for this segment of the portfolio. The loss rate may be adjusted for qualitative and environmental factors. The allowance for loan loss is calculated by multiplying the adjusted loss rate by the total loans in this segment of the portfolio. ā The adjustments to historical loss experience are based on an evaluation of several qualitative and environmental factors, including: ā ā changes in lending policies and procedures, including changes in underwriting standards and collections, charge-off and recovery practices; ā ā changes in international, national, and local economic trends; ā ā changes in the bankās internal loan review system; ā ā changes in the experience and ability of personnel in the mortgage loan origination and loan servicing departments; ā ā changes in the number and amount of delinquent loans and classified assets; ā ā changes in the type and volume of loans being originated; ā ā changes in the value of underlying collateral for collateral dependent loans; ā ā changes in any concentration of credit; and ā ā external factors such as competition, legal and regulatory requirements on the level of estimated credit losses in the existing loan portfolio. ā The Company also uses historical loss rates adjusted for qualitative and environmental factors to establish loan loss allowances for the following portfolio segments: ā ā home equity loans and lines of credit; and ā ā consumer and other loans. ā The Company has a limited loss experience for the construction, commercial and other mortgage segment of the loan portfolio. The loan loss allowance on this portfolio segment is determined using the loan loss rate of other financial institutions in the State of Hawaii. The allowance for loan loss is calculated by multiplying the loan loss rate of other financial institutions in the state by the total loans in this segment of the Companyās loan portfolio. ā The allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories. In addition, the unallocated allowance is established to provide for probable losses that have been incurred as of the reporting date but are not reflected in the allocated allowance. ā While the Company uses the best information available to make evaluations, future adjustments to the allowance may be necessary if conditions differ substantially from the information used in making the evaluations. In addition, as an integral part of their examination process, the bank regulators will periodically review the allowance for loan losses. The bank regulators may require the Company to increase the allowance based on their analysis of information available at the time of their examination. ā (j) Transfer of Financial Assets ā Transfers of financial assets are accounted for as sales when control is surrendered. Control is surrendered when the assets have been isolated from the Company, the transferee obtains the right to pledge or exchange the assets without constraint, and the Company does not maintain effective control over the transferred assets. Mortgage loans sold for cash are accounted for as sales as the above criteria have been met. ā Mortgage loans may also be packaged into securities that are issued and guaranteed by U.S. government-sponsored enterprises or a U.S. government agency. The Company receives 100% of the mortgage-backed securities issued. The mortgage-backed securities received in securitizations are valued at fair value and classified as held-to-maturity. A gain or loss in the securitization transactions is recognized for the difference between the fair value of the mortgage-backed securities received and the amortized cost of the loans securitized. ā Mortgage loan transfers accounted for as sales and securitizations are without recourse, except for normal representations and warranties provided in sales transactions, and the Company may retain the related rights to service the loans. The retained servicing rights create mortgage servicing assets that are accounted for in accordance with the Transfers and Servicing topic of the FASB ASC. Mortgage servicing assets are initially valued at fair value and subsequently at the lower of cost or fair value and are amortized in proportion to and over the period of estimated net servicing income. The Company uses a discounted cash flow model to determine the fair value of retained mortgage servicing rights. ā (k) Premises and Equipment ā Premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is principally computed on the straight-line method over the estimated useful lives of the respective assets. The estimated useful life of buildings and improvements is 30 years, furniture, fixtures, and equipment is 3 to 10 years, and automobiles are 3 years. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or estimated useful life of the asset. ā (l) Income Taxes ā The Company files consolidated federal income tax and consolidated state franchise tax returns. ā Deferred tax assets and liabilities are recognized using the asset and liability method of accounting for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and net operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. ā We establish income tax contingency reserves for potential tax liabilities related to uncertain tax positions. A liability for income tax uncertainties would be recorded for unrecognized tax benefits related to uncertain tax positions where it is more likely than not that the position will be sustained upon examination by a taxing authority. ā As of December 31, 2020 and 2019, the Company had not recognized a liability for income tax uncertainties in the accompanying Consolidated Balance Sheets because management concluded that the Company does not have uncertain tax positions. ā The Company recognizes interest and penalties related to tax liabilities in other interest expense and other general and administrative expenses, respectively, in the Consolidated Statements of Income. ā Tax years 2017 to 2019 currently remain subject to examination by the Internal Revenue Service and by the Department of Taxation of the State of Hawaii. ā (m) Impairment of Long-Lived Assets ā Long-lived assets, such as premises and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the Consolidated Balance Sheets and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. ā (n) Pension Plan ā Pension benefit costs (returns) are charged (credited) to salaries and employee benefits expense or other general and administrative expenses, and the corresponding prepaid (accrued) pension cost is recorded in prepaid expenses and other assets or accounts payable and accrued expenses in the Consolidated Balance Sheets. The Companyās policy is to fund pension costs in amounts that will not be less than the minimum funding requirements of the Employee Retirement Income Security Act of 1974 and will not exceed the maximum tax-deductible amounts. The Company generally funds at least the net periodic pension cost, subject to limits and targeted funded status as determined with the consulting actuary. ā (o) Share-Based Compensation ā The Company grants share-based compensation awards, including restricted stock and restricted stock units, which are either performance-based or time-based. The fair value of the restricted stock and restricted stock unit awards were based on the closing price of the Companyās stock on the date of grant. The cost of these awards are amortized in the Consolidated Statements of Income on a straight-line basis over the vesting period. The amount of performance-based restricted stock units that vest on a performance condition is remeasured quarterly based on how the Companyās return on average equity compares to the SNL Bank Index. The fair value of performance-based restricted stock units that are based on how the Companyās total stock return compares to the SNL Bank Index was measured using a Monte-Carlo valuation. ā (p) Supplemental Employee Retirement Plan (SERP) ā The SERP is a noncontributory supplemental retirement plan covering certain current and former employees of the Company. Benefits in the SERP plan are paid after retirement, in addition to the benefits provided by the Pension Plan. The Company accrues SERP costs over the estimated period until retirement by charging salaries and employee benefits expense in the Consolidated Statements of Income, with a corresponding credit to accounts payable and accrued expenses in the Consolidated Balance Sheets. ā (q) Employee Stock Ownership Plan (ESOP) ā The cost of shares issued to the ESOP, but not yet allocated to participants, is shown as a reduction of stockholdersā equity. Compensation expense is based on the market price of shares as they are committed to be released to participant accounts. Dividends on allocated ESOP shares reduce retained earnings; dividends on unearned ESOP shares reduce debt and accrued interest. ā (r) Earnings Per Share ā We have two forms of our outstanding common stock: common stock and unvested restricted stock awards. Holders of unvested restricted stock awards receive dividends at the same rate as common shareholders and they both share equally in undistributed earnings. Unvested restricted stock awards that are time-based contain nonforfeitable rights to dividends or dividend equivalents are considered to be participating securities in the earnings per share computation using the two-class method. Under the two-class method, earnings are allocated to common shareholders and participating securities according to their respective rights to earnings. Unvested restricted stock awards that vest based on performance or market conditions are not considered to be participating securities in the earnings per share calculation because accrued dividends on shares that do not vest are forfeited. ā Basic earnings per share is computed by dividing net income allocated to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income allocated to common shareholders by the sum of the weighted-average number of shares outstanding plus the dilutive effect of stock options and restricted stock. ESOP shares not committed to be released are not considered outstanding. ā (s) Common Stock Repurchase Program ā The Company adopted common stock repurchase programs in which shares repurchased reduce the amount of shares issued and outstanding. The repurchased shares may be reissued in connection with share-based compensation plans and for general corporate purposes. During 2020 and 2019, the Company repurchased , respectively, as part of the repurchase programs authorized by the Board of Directors. ā (t) Bank-Owned Life Insurance ā The Companyās investment in bank-owned life insurance is based on cash surrender value. The Company invests in bank-owned life insurance to provide a funding source for benefit plan obligations. Bank-owned life insurance also generally provides noninterest income that is nontaxable. Federal regulations generally limit the investment in bank-owned life insurance to of the Bankās Tier 1 capital plus the allowance for loan losses. At December 31, 2020, this limit was ā (u) Leases ā The Company records a right-of-use (ROU) asset for those leases that convey rights to control use of identified assets for a period of time in exchange for consideration. The Company is also required to record a lease liability for the present value of future payment commitments. The Company leases most of its premises and some vehicles and equipment under operating leases expiring on various dates through 2030. The majority of lease agreements relate to real estate and generally provide that the Company pay taxes, insurance, maintenance and certain other variable operating expenses applicable to the leased premises. Variable lease components and nonlease components are not included in the Companyās computation of the ROU asset or lease liability. The Company also does not include short-term leases in the computation of the ROU asset or lease liability. Short-term leases are leases with a term at commencement of 12 months or less. Short-term lease expense is recorded on a straight-line basis over the term of the lease. Lease agreements do not contain any residual value guarantees or restrictive covenants. ā The value of the ROU asset and lease liability is impacted by the amount of the periodic payment required, length of the lease term, and the discount rate used to calculate the present value of the minimum lease payments. Certain leases have renewal options at the expiration of the lease terms. Generally, option periods are not included in the computation of the lease term, ROU asset or lease liability because the Company is not reasonably certain to exercise renewal options at the expiration of the lease terms. Because the discount rates implicit in our leases are not known, discount rates have been estimated using the rates for fixed-rate, amortizing advances from the Federal Home Loan Bank (FHLB) for the approximate terms of the leases. ā (v) Use of Estimates ā The preparation of the Consolidated Financial Statements requires management to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amount of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include the allowance for loan losses; valuation of certain investment securities and determination as to whether declines in fair value below amortized cost are other than temporary; valuation allowances for deferred income tax assets; mortgage servicing assets; and assets and obligations related to employee benefit plans. Accordingly, actual results could differ from those estimates. ā (w) Recently Issued Accounting Pronouncements ā In June 2016, the Financial Accounting Standards Board (FASB) amended various sections of the FASB Accounting Standards Codification (ASC) related to the accounting for credit losses on financial instruments. The amendment changes the threshold for recognizing losses from a āprobableā to an āexpectedā model. The new model is referred to as the current expected credit loss model and applies to loans, leases, held-to-maturity investments, loan commitments and financial guarantees. The amendment requires the measurement of all expected credit losses for financial assets as of the reporting date (including historical experience, current conditions and reasonable and supportable forecasts) and enhanced disclosures that will help financial statement users understand the estimates and judgments used in estimating credit losses and evaluating the credit quality of an organizationās portfolio. The amendment is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. In November 2019, the FASB issued an update that delays the effective date of the amendment for smaller reporting companies, as defined by the Securities and Exchange Commission, to fiscal years beginning after December 15, 2022. The Company is a smaller reporting company. The Company will apply the amendmentās provisions as a cumulative-effect adjustment to retained earnings at the beginning of the first period the amendment is effective. The Company has formed a team that is working on an implementation plan to adopt the amendment. The implementation plan will include developing policies, procedures and internal controls over the model. The Company is also working with a software vendor to measure expected losses required by the amendment. The Company is currently evaluating the effects that the adoption of this amendment will have on its consolidated financial statements and expects that the portfolio composition and economic conditions at the time of adoption will influence the accounting adjustment made at the time the amendment is adopted. ā In August 2018, the FASB amended the Fair Value Measurement topic of the FASB ASC. The amendment affects disclosures only, and includes additions, deletions and modifications of the disclosures of assets and liabilities reported in the fair value hierarchy. The amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. Entities are allowed to early adopt any removed or modified disclosures while delaying adoption of any added disclosures until the effective date. The Company adopted this amendment as of January 1, 2020 and it did not have a material effect on its consolidated financial statements. ā In August 2018, the FASB amended the Compensation ā Retirement Benefits topic of the FASB ASC. The amendment affects disclosures related to defined benefit pension or other post retirement plans and includes additions, deletions and clarifications of disclosures. The amendment is effective for fiscal years ending after December 15, 2020, with early adoption permitted. The Company adopted this amendment as of December 31, 2020 and it did not have a material effect on its consolidated financial statements. ā The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed by Congress and signed into law by the President on March 27, 2020. The CARES Act provides relief to financial institutions from categorizing eligible loan modifications as troubled debt restructurings over the remaining life of the modified loan. Eligible loan modifications under the CARES Act must be related to the COVID-19 pandemic and the borrower must not have been more than 30 days past due as of December 31, 2019. Loan modifications under the CARES Act must be executed during the period from March 1, 2020 to the earlier of December 31, 2020 or 60 days after the end of the national emergency. On December 21, 2020, the President signed legislation which extended the troubled debt restructuring relief provisions of the CARES Act to January 1, 2022. Banking regulators issued similar guidance, which also clarified that a COVID-19 loan modification should not be considered a troubled debt restructuring if the borrower was not more than 30 days past due on payments at the time the loan modification program was implemented and the modification is considered short-term (not to exceed six months). ā |
Cash and Cash Equivalents
Cash and Cash Equivalents | 12 Months Ended |
Dec. 31, 2020 | |
Cash and Cash Equivalents | |
Cash and Cash Equivalents | (3) Cash and Cash Equivalents ā The table below presents the balances of cash and cash equivalents: ā ā ā ā ā ā ā ā ā December 31, (Dollars in thousands) 2020 2019 Cash and due from banks ā $ 14,355 ā $ 9,571 ā Interest-earning deposits in other banks ā 349,188 ā 35,235 ā Cash and cash equivalents ā $ 363,543 ā $ 44,806 ā ā Interest-earning deposits in other banks consist primarily of deposits at the Federal Reserve Bank of San Francisco. |
Investment Securities
Investment Securities | 12 Months Ended |
Dec. 31, 2020 | |
Investment Securities. | |
Investment Securities | (4) Investment Securities ā The amortized cost and fair values of investment securities are as follows: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Amortized ā Gross Unrealized ā Estimated (Dollars in thousands) Cost Gains Losses Fair Value December 31, 2020: ā ā ā ā ā ā ā ā ā ā ā ā ā Available-for-sale: ā ā ā ā ā ā ā ā ā ā ā ā ā U.S. government-sponsored mortgage-backed securities ā $ 3,185 ā $ 377 $ ā ā $ 3,562 ā Total ā $ 3,185 ā $ 377 $ ā ā $ 3,562 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Held-to-maturity: ā ā ā ā ā ā ā ā ā ā ā ā ā U.S. government-sponsored mortgage-backed securities ā $ 247,642 ā $ 15,200 $ (1) ā $ 262,841 ā Total ā $ 247,642 ā $ 15,200 $ (1) ā $ 262,841 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019: ā ā ā ā ā ā ā ā ā ā ā ā ā Available-for-sale: ā ā ā ā ā ā ā ā ā ā ā ā ā U.S. government-sponsored mortgage-backed securities ā $ 7,905 ā $ 723 $ ā ā $ 8,628 ā Total ā $ 7,905 ā $ 723 $ ā ā $ 8,628 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Held-to-maturity: ā ā ā ā ā ā ā ā ā ā ā ā ā U.S. government-sponsored mortgage-backed securities ā $ 363,883 ā $ 8,436 $ (1,014) ā $ 371,305 ā Total ā $ 363,883 ā $ 8,436 $ (1,014) ā $ 371,305 ā ā The amortized cost and estimated fair value of investment securities by maturity date at December 31, 2020 are shown below. Incorporated in the maturity schedule are mortgage-backed securities, which are allocated using the contractual maturity as a basis. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. ā ā ā ā ā ā ā ā ā Amortized Estimated (Dollars in thousands) Cost Fair Value Available-for-sale: ā ā ā ā ā ā ā Due within 5 years ā $ ā ā $ ā ā Due after 5 years through 10 years ā ā ā ā ā Due after 10 years ā 3,185 ā 3,562 ā Total ā $ 3,185 ā $ 3,562 ā ā ā ā ā ā ā ā ā Held-to-maturity: ā ā ā ā ā ā ā Due within 5 years ā $ ā ā $ ā ā Due after 5 years through 10 years ā 59 ā 58 ā Due after 10 years ā 247,583 ā 262,783 ā Total ā $ 247,642 ā $ 262,841 ā ā ā ā ā ā ā ā ā ā Realized gains and losses and the proceeds from sales of held-to-maturity and available-for-sale securities are shown in the table below. ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā (Dollars in thousands) 2020 2019 Proceeds from sales ā $ 20,531 ā $ 8,644 Gross gains ā 1,320 ā 2,910 Gross losses ā ā ā ā ā During 2020, the Company sold $15.8 million of held-to-maturity mortagage-backed securities and recorded a gain of $1.0 million. During 2019, the Company sold its ā During 2020, the Company sold $3.4 million of available-for-sale mortgage-backed securities and recorded a gain of $290,000 . During 2019, the Company sold ā As of January 1, 2019, the Company transferred securities with an amortized cost of $11.4 million from held-to-maturity to available-for-sale with the adoption of ASU 2017-12 on derivatives and hedging. ā Investment securities with amortized costs of $192.7 million and $188.9 million at December 31, 2020 and 2019, respectively, were pledged to secure deposits made by state and local governments, securities sold under agreements to repurchase and transaction clearing accounts. ā Provided below is a summary of investment securities which were in an unrealized loss position at December 31, 2020 and 2019. The Company does not intend to sell held-to-maturity and available-for-sale securities until such time as the value recovers or the securities mature and it is not more likely than not that the Company will be required to sell the securities prior to recovery of value or the securities mature. ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Less Than 12 Months 12 Months or Longer Total Unrealized Unrealized Number of Unrealized Description of securities Fair Value Losses Fair Value Losses Securities Fair Value Losses (Dollars in thousands) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2020: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Held-to-maturity: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā U.S. government-sponsored mortgage-backed securities ā $ 678 ā $ (1) ā $ 4 ā $ ā 6 ā $ 682 ā $ (1) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Held-to-maturity: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā U.S. government-sponsored mortgage-backed securities ā $ 55,882 ā $ (302) ā $ 34,492 ā $ (712) 30 ā $ 90,374 ā $ (1,014) ā ā Mortgage-Backed Securities. ā During 2020 and 2019, the Company securitized fixed-rate first mortgage loans with a book value of $9.4 million and $36.8 million, respectively, into Freddie Mac mortgage-backed securities to increase liquidity. The securitization transactions increased investment securities and lowered loans receivable. The securitization transactions were accounted for by recording the mortgage-backed securities at a fair value of million, respectively. Net gains of |
Federal Home Loan Bank Stock
Federal Home Loan Bank Stock | 12 Months Ended |
Dec. 31, 2020 | |
FHLB stock | |
Federal Home Loan Bank Stock | |
Federal Home Loan Bank Stock | (5) Federal Home Loan Bank Stock ā The Bank, as a member of the FHLB system, is required to obtain and hold shares of capital stock in the FHLB. At December 31, 2020 and 2019, the Bank met such requirement. At December 31, 2020 and 2019, the Bank owned ā The Company evaluated its investment in the stock of the FHLB Des Moines for impairment. Based on the Companyās evaluation of the underlying investment, including the long-term nature of the investment and the liquidity position of the FHLB Des Moines, the Company did not consider its FHLB stock other-than-temporarily impaired. ā |
Federal Reserve Bank Stock
Federal Reserve Bank Stock | 12 Months Ended |
Dec. 31, 2020 | |
FRB stock | |
Federal Reserve Bank Stock | |
Federal Reserve Bank Stock | (6) Federal Reserve Bank Stock ā The Bank, as a member of the Federal Reserve System, is required to hold shares of capital stock of the FRB of San Francisco equal to six percent of capital and surplus of the Bank. At December 31, 2020 and 2019, the Bank met such requirement. At December 31, 2020 and 2019, the Bank owned ā The Company evaluated its investment in the stock of the FRB of San Francisco for impairment. Based on the Companyās evaluation of the underlying investment, including the long-term nature of the investment and the liquidity position of the FRB of San Francisco, the Company did not consider its FRB stock other-than-temporarily impaired. ā |
Loans Receivable and Allowance
Loans Receivable and Allowance for Loan Losses | 12 Months Ended |
Dec. 31, 2020 | |
Loans Receivable and Allowance for Loan Losses | |
Loans Receivable and Allowance for Loan Losses | (7) Loans Receivable and Allowance for Loan Losses ā The components of loans receivable are as follows: ā ā ā ā ā ā ā ā ā ā ā December 31, (Dollars in thousands) 2020 2019 Real estate loans: ā ā ā ā ā ā ā First mortgages: ā ā ā ā ā ā ā One- to four-family residential ā $ 1,366,507 ā $ 1,536,781 ā Multi-family residential ā 7,245 ā 9,965 ā Construction, commercial and other ā 19,074 ā 23,382 ā Home equity loans and lines of credit ā 9,376 ā 10,084 ā Total real estate loans ā 1,402,202 ā 1,580,212 ā Other loans: ā ā ā ā ā ā ā Loans on deposit accounts ā 235 ā 235 ā Consumer and other loans ā 10,086 ā 9,484 ā Total other loans ā 10,321 ā 9,719 ā Less: ā ā ā ā ā ā ā Net unearned fees and discounts ā (1,266) ā (2,435) ā Allowance for loan losses ā (4,262) ā (2,712) ā Total unearned fees, discounts and allowance for loan losses ā (5,528) ā (5,147) ā Loans receivable, net ā $ 1,406,995 ā $ 1,584,784 ā ā The table below presents the activity in the allowance for loan losses by portfolio segment: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Construction, Home Commercial Equity and Other Loans and Residential Mortgage Lines of Consumer (Dollars in thousands) Mortgage Loans Credit and Other Unallocated Totals Year ended December 31, 2020: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Balance, beginning of year ā $ 1,741 ā $ 511 ā $ 1 ā $ 54 ā $ 405 ā $ 2,712 ā Provision (reversal of provision) for loan losses ā 1,361 ā (105) ā (10) ā 177 ā 202 ā 1,625 ā ā ā 3,102 ā 406 ā (9) ā 231 ā 607 ā 4,337 ā Charge-offs ā ā ā ā ā ā ā (92) ā ā ā (92) ā Recoveries ā ā ā ā ā 10 ā 7 ā ā ā 17 ā Net recoveries (charge-offs) ā ā ā ā ā 10 ā (85) ā ā ā (75) ā Balance, end of year ā $ 3,102 ā $ 406 ā $ 1 ā $ 146 ā $ 607 ā $ 4,262 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Year ended December 31, 2019: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Balance, beginning of year ā $ 1,797 ā $ 443 ā $ 1 ā $ 47 ā $ 354 ā $ 2,642 ā (Reversal of provision) provision for loan losses ā (84) ā 68 ā ā ā 26 ā 51 ā 61 ā ā ā 1,713 ā 511 ā 1 ā 73 ā 405 ā 2,703 ā Charge-offs ā (8) ā ā ā ā ā (40) ā ā ā (48) ā Recoveries ā 36 ā ā ā ā ā 21 ā ā ā 57 ā Net recoveries (charge-offs) ā 28 ā ā ā ā ā (19) ā ā ā 9 ā Balance, end of year ā $ 1,741 ā $ 511 ā $ 1 ā $ 54 ā $ 405 ā $ 2,712 ā ā The allowance for loan loss for each segment of the loan portfolio is generally determined by calculating the historical loss of each segment in a seven year look-back period and adding a qualitative adjustment for the following factors: ā ā changes in lending policies and procedures, including changes in underwriting standards and collections, charge-off and recovery practices; ā changes in international, national, and local economic trends; ā changes in the bankās internal loan review system; ā changes in the experience and ability of personnel in the mortgage loan origination and loan servicing departments; ā changes in the number and amount of delinquent loans and classified assets; ā changes in the type and volume of loans being originated; ā changes in the value of underlying collateral for collateral dependent loans; ā changes in any concentration of credit; and ā external factors such as competition, legal and regulatory requirements on the level of estimated credit losses in the existing loan portfolio. ā In 2020, we granted loan payment deferrals to customers who were experiencing financial hardship because of the COVID-19 pandemic. We established additional loan loss provisions in 2020 because of these loan payment deferrals and the higher unemployment rate that occurred because of the COVID-19 pandemic. ā The allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories. The unallocated allowance is established for probable losses that have been incurred as of the reporting date but are not reflected in the allocated allowance. ā Management considers the allowance for loan losses at December 31, 2020 to be at an appropriate level to provide for probable losses that can be reasonably estimated based on general and specific conditions at that date. While the Company uses the best information it has available to make evaluations, future adjustments to the allowance may be necessary if conditions differ substantially from the information used in making the evaluations. To the extent actual outcomes differ from the estimates, additional provisions for credit losses may be required that would reduce future earnings. In addition, as an integral part of their examination process, the bank regulators periodically review the allowance for loan losses and may require the Company to increase the allowance based on their analysis of information available at the time of their examination. ā The table below presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Construction, Home Commercial Equity and Other Loans and Residential Mortgage Lines of Consumer (Dollars in thousands) Mortgage Loans Credit and Other Unallocated Totals December 31, 2020: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Allowance for loan losses: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Ending allowance balance: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Individually evaluated for impairment ā $ ā ā $ ā ā $ ā ā $ ā ā $ ā ā $ ā ā Collectively evaluated for impairment ā 3,102 ā 406 ā 1 ā 146 ā 607 ā 4,262 ā Total ending allowance balance ā $ 3,102 ā $ 406 ā $ 1 ā $ 146 ā $ 607 ā $ 4,262 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Loans: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Ending loan balance: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Individually evaluated for impairment ā $ 4,947 ā $ ā ā $ 23 ā $ ā ā $ ā ā $ 4,970 ā Collectively evaluated for impairment ā 1,367,576 ā 19,024 ā 9,353 ā 10,334 ā ā ā 1,406,287 ā Total ending loan balance ā $ 1,372,523 ā $ 19,024 ā $ 9,376 ā $ 10,334 ā $ ā ā $ 1,411,257 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Allowance for loan losses: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Ending allowance balance: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Individually evaluated for impairment ā $ ā ā $ ā ā $ ā ā $ ā ā $ ā ā $ ā ā Collectively evaluated for impairment ā 1,741 ā 511 ā 1 ā 54 ā 405 ā 2,712 ā Total ending allowance balance ā $ 1,741 ā $ 511 ā $ 1 ā $ 54 ā $ 405 ā $ 2,712 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Loans: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Ending loan balance: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Individually evaluated for impairment ā $ 1,224 ā $ ā ā $ 89 ā $ ā ā $ ā ā $ 1,313 ā Collectively evaluated for impairment ā 1,543,125 ā 23,326 ā 9,997 ā 9,735 ā ā ā 1,586,183 ā Total ending loan balance ā $ 1,544,349 ā $ 23,326 ā $ 10,086 ā $ 9,735 ā $ ā ā $ 1,587,496 ā ā The table below presents the balance of impaired loans individually evaluated for impairment by class of loans: ā ā ā ā ā ā ā ā ā Unpaid Recorded Principal (Dollars in thousands) Investment Balance December 31, 2020: ā ā ā ā ā ā ā With no related allowance recorded: ā ā ā ā ā ā ā One- to four-family residential mortgages ā $ 4,947 ā $ 5,425 ā Home equity loans and lines of credit ā 23 ā 32 ā Total ā $ 4,970 ā $ 5,457 ā ā ā ā ā ā ā ā ā December 31, 2019: ā ā ā ā ā ā ā With no related allowance recorded: ā ā ā ā ā ā ā One- to four-family residential mortgages ā $ 1,224 ā $ 1,615 ā Home equity loans and lines of credit ā ā 89 ā ā 178 ā Total ā $ 1,313 ā $ 1,793 ā ā ā The table below presents the average recorded investment and interest income recognized on impaired loans by class of loans: ā ā ā ā ā ā ā ā ā Average Recorded Interest Income (Dollars in thousands) Investment Recognized 2020: ā ā ā ā ā ā ā With no related allowance recorded: ā ā ā ā ā ā ā One- to four-family residential mortgages ā $ 5,012 ā $ 33 ā Home equity loans and lines of credit ā 24 ā ā ā Total ā $ 5,036 ā $ 33 ā ā ā ā ā ā ā ā ā 2019: ā ā ā ā ā ā ā With no related allowance recorded: ā ā ā ā ā ā ā One- to four-family residential mortgages ā $ 1,272 ā $ 34 ā Home equity loans and lines of credit ā 98 ā ā ā Total ā $ 1,370 ā $ 34 ā ā There were no loans individually evaluated for impairment with a related allowance for loan loss as of December 31, 2020 or 2019. Loans individually evaluated for impairment do not have an allocated allowance for loan loss because they are written down to fair value at the time of impairment. ā The table below presents the aging of loans and accrual status by class of loans, net of unearned fees and discounts. Loans with a formal loan payment deferral plan in place are not considered contractually past due or delinquent if the borrower is in compliance with the loan payment deferral plan: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Loans 90 Days or More 30 - 59 60 - 89 90 Days or Past Due Days Past Days Past More Total Past Loans Not Total Nonaccrual and Still (Dollars in thousands) Due Due Past Due Due Past Due Loans Loans Accruing December 31, 2020: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā One- to four-family residential mortgages ā $ 376 ā $ 152 ā $ 240 ā $ 768 ā $ 1,364,527 ā $ 1,365,295 ā $ 4,382 ā $ ā ā Multi-family residential mortgages ā ā ā ā ā ā ā ā ā 7,228 ā 7,228 ā ā ā ā ā Construction, commercial and other mortgages ā ā ā ā ā ā ā ā ā 19,024 ā 19,024 ā ā ā ā ā Home equity loans and lines of credit ā ā ā 23 ā ā ā 23 ā 9,353 ā 9,376 ā 23 ā ā ā Loans on deposit accounts ā ā ā ā ā ā ā ā ā 235 ā 235 ā ā ā ā ā Consumer and other ā 1 ā ā ā ā ā 1 ā 10,098 ā 10,099 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Total ā $ 377 ā $ 175 ā $ 240 ā $ 792 ā $ 1,410,465 ā $ 1,411,257 ā $ 4,405 ā $ ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā One- to four-family residential mortgages ā $ ā ā $ 959 ā $ ā ā $ 959 ā $ 1,533,446 ā $ 1,534,405 ā $ 647 ā $ ā ā Multi-family residential mortgages ā ā ā ā ā ā ā ā ā 9,944 ā 9,944 ā ā ā ā ā Construction, commercial and other mortgages ā ā ā ā ā ā ā ā ā 23,326 ā 23,326 ā ā ā ā ā Home equity loans and lines of credit ā ā ā 26 ā ā ā 26 ā 10,060 ā 10,086 ā 89 ā ā ā Loans on deposit accounts ā ā ā ā ā ā ā ā ā 235 ā 235 ā ā ā ā ā Consumer and other ā 33 ā 1 ā 1 ā 35 ā 9,465 ā 9,500 ā ā ā 1 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Total ā $ 33 ā $ 986 ā $ 1 ā $ 1,020 ā $ 1,586,476 ā $ 1,587,496 ā $ 736 ā $ 1 ā ā The Company primarily uses the aging of loans and accrual status to monitor the credit quality of its loan portfolio. When a mortgage loan becomes seriously delinquent ( or more contractually past due), it displays weaknesses that may result in a loss. As a loan becomes more delinquent, the likelihood of the borrower repaying the loan decreases and the loan becomes more collateral-dependent. A mortgage loan becomes collateral-dependent when the proceeds for repayment can be expected to come only from the sale or operation of the collateral and not from borrower repayments. Generally, appraisals are obtained after a loan becomes collateral-dependent or is delinquent. The carrying value of collateral-dependent loans is adjusted to the fair value of the collateral less selling costs. Any commercial real estate, commercial, construction or equity loan that has a loan balance in excess of a specified amount is also periodically reviewed to determine whether the loan exhibits any weaknesses and is performing in accordance with its contractual terms. ā The Company had 12 nonaccrual loans with a book value of $4.4 million at December 31, 2020 and six nonaccrual loans with a book value of $736,000 as of December 31, 2019. The Company collected interest on nonaccrual loans of during 2020 and 2019, respectively, but due to regulatory requirements, the Company recorded the interest as a reduction of principal. The Company would have recognized additional interest income of during 2020 and 2019, respectively, had the loans been accruing interest. The Company did not have any loans 90 days or more past due and still accruing interest as of December 31, 2020. At December 31, 2019, the Company had ā There were no loans modified in a troubled debt restructuring during the year ended December 31, 2020 or 2019. There were no new troubled debt restructurings within the 12 months ended December 31, 2020 that subsequently defaulted. See below for a description on how loan modifications are treated under the CARES Act and Interagency Statements issued by bank regulators in 2020. ā The table below summarizes troubled debt restucturings by class of loans: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Number of Accrual Number of Nonaccrual ā (Dollars in thousands) Loans Status Loans Status Total December 31, 2020: ā ā ā ā ā ā ā ā ā ā One- to four-family residential mortgages ā 3 ā $ 565 ā ā 2 ā $ 467 ā $ 1,032 Total ā 3 ā $ 565 ā ā 2 ā $ 467 ā $ 1,032 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019: ā ā ā ā ā ā ā ā ā ā ā ā ā ā One- to four-family residential mortgages ā 3 ā $ 577 ā ā 2 ā $ 525 ā $ 1,102 Home equity loans and lines of credit ā ā ā ā ā 1 ā 64 ā 64 Total ā 3 ā $ 577 ā ā 3 ā $ 589 ā $ 1,166 ā There were no delinquent restructured loans at December 31, 2020 or December 31, 2019. Restructurings include deferrals of interest and/or principal payments and temporary or permanent reductions in interest rates due to the financial difficulties of the borrowers. At December 31, 2020, we have ā The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed by Congress and signed into law by the President on March 27, 2020. The CARES Act provides relief to financial institutions from categorizing eligible loan modifications as troubled debt restructurings over the remaining life of the modified loan. Eligible loan modifications under the CARES Act must be related to the COVID-19 pandemic and the borrower must not have been more than 30 days past due as of December 31, 2019. Loan modifications under the CARES Act must be executed during the period from March 1, 2020 to the earlier of December 31, 2020 or 60 days after the end of the national emergency. On December 21, 2020, the President signed legislation which extended the troubled debt restructuring relief provisions of the CARES Act to January 1, 2022. Banking regulators issued similar guidance, which also clarified that a COVID-19 loan modification should not be considered a troubled debt restructuring if the borrower was not more than 30 days past due on payments at the time the loan modification program was implemented and the modification is considered short-term (not to exceed six months). The Company will be using the provisions of the CARES Act and the Interagency Statements to account for the eligible loans receiving modifications. ā The Company has granted loan payment deferrals to borrowers who have been affected by the COVID-19 pandemic. At December 31, 2020, the Company granted, and had outstanding, loan payment deferrals on $130.8 million of loans, which represent 9.3% of total loans receivable. $126.3 million of these loan payment deferrals consist of one- to four-family residential mortgage loans, which represent 9.0% of the total loans receivable. The Company believes these loans are currently well secured as the ratio of the current loan balance to the current tax- assessed value of the property securing these mortgage loans averages 54.9%. One- to four-family residential mortgage loans represent 96.7% of the Companyās total loan portfolio balance. All of the Companyās residential mortgage loans are secured by real estate in Hawaii. The Company has also granted loan payment deferrals of $4.5 million on other non-residential mortgage loans, which represent 0.3% of the total balance of loans receivable. The loans on which the Company has granted loan payment deferrals are included in the ALLL calculation. Loans performing under a loan payment deferral agreement are not contractually past due and are excluded from the past due statistics above. ā The Company had no real estate owned as of December 31, 2020 or 2019. There were two one- to four-family residential mortgage loans totaling $251,000 in the process of foreclosure as of December 31, 2020. There were loans in the process of foreclosure at December 31, 2019. ā Nearly all of our real estate loans are collateralized by real estate located in the State of Hawaii. Loan-to-value ratios on these real estate loans generally do not exceed 80% at the time of origination. ā During the years ended December 31, 2020 and 2019, the Company sold mortgage loans held for sale with principal balances of $43.8 million and $10.1 million, respectively, and recognized gains of $1.2 million and $89,000 , respectively. The Company had ā During 2020 and 2019, the Company securitized fixed-rate first mortgage loans with a book value of $9.4 million and $36.8 million, respectively, and received mortgage-backed securities with a fair market value of $9.8 million and $37.9 million, respectively. During 2020 and 2019, the Company retained the servicing of these loans and recorded mortgage servicing assets with a fair market value of ā The Company serviced loans for others with principal balances of $56.7 million and $65.1 million at December 31, 2020 and 2019, respectively. Of these amounts, million of loan balances relate to securitizations for which the Company continues to hold the related mortgage-backed securities at December 31, 2020 and 2019, respectively. The amount of contractually specified servicing fees earned was for 2020 and 2019, respectively. The fees are reported in service fees on loan and deposit accounts in the Consolidated Statements of Income. ā In the normal course of business, the Company has made loans to certain directors and executive officers under terms which management believes are consistent with the Companyās general lending policies. Loans to directors and executive officers amounted to |
Accrued Interest Receivable
Accrued Interest Receivable | 12 Months Ended |
Dec. 31, 2020 | |
Accrued Interest Receivable | |
Accrued Interest Receivable | (8) Accrued Interest Receivable ā The components of accrued interest receivable are as follows: ā ā ā ā ā ā ā ā ā ā ā December 31, (Dollars in thousands) 2020 2019 Loans receivable ā $ 5,872 ā $ 4,425 ā Investment securities ā ā 627 ā ā 952 ā Interest-bearing deposits ā 16 ā 32 ā Total ā $ 6,515 ā $ 5,409 ā ā Accrued interest receivable rose by $1.1 million primarily because of interest accrued on loans in the Bankās payment deferral program. As of December 31, 2020, the Company granted loan payment deferrals of $130.8 million of loans. To qualify for the Bankās loan payment deferral program, a borrowerās financial difficulties must be related to the COVID-19 pandemic and the loan must not have been more than 30 days past due as of December 31, 2019. ā ā ā ā ā ā ā ā ā ā |
Mortgage Servicing Assets
Mortgage Servicing Assets | 12 Months Ended |
Dec. 31, 2020 | |
Mortgage Servicing Assets. | |
Mortgage Servicing Assets | (9) Mortgage Servicing Assets ā Mortgage servicing assets are created when the Company sells mortgage loans and retains the rights to service the loans. Mortgage servicing assets are accounted for in accordance with the Transfers and Servicing topic of the FASB ASC and are initially valued at fair value and subsequently at the lower of cost or fair value. We amortize mortgage servicing assets in proportion to and over the period of estimated net servicing income. All servicing assets are grouped into categories based on the interest rate and original term of the loan sold. Mortgage servicing assets related to loan sales are recognized upon the sale of loans and totaled ā The table below presents the changes in our mortgage servicing assets: ā ā ā ā ā ā ā ā ā (Dollars in thousands) 2020 2019 Balance at beginning of year ā $ 503 ā $ 226 ā Additions ā 78 ā 344 ā Impairments ā (73) ā (16) ā Amortization ā (101) ā (51) ā Balance at end of year ā $ 407 ā $ 503 ā ā In 2020, the Company added $78,000 in mortgage servicing assets when it securitized $9.4 million of mor tgage loans into mortgage-backed securities. million of mortgage loans on a servicing retained basis. These transactions were conducted to increase liquidity. ā The table below presents the gross carrying values, accumulated amortization, and net carrying values of our mortgage servicing assets: ā ā ā ā ā ā ā ā ā ā ā December 31, (Dollars in thousands) 2020 2019 Gross carrying value ā $ 1,643 ā $ 1,638 ā Accumulated amortization ā (1,236) ā (1,135) ā Net carrying value ā $ 407 ā $ 503 ā ā The estimated amortization expense for our mortgage servicing assets for the next five years and all years thereafter are as follows: ā ā ā ā ā ā (Dollars in thousands) ā ā 2021 ā $ 97 ā 2022 ā 62 ā 2023 ā 44 ā 2024 ā 33 ā 2025 ā 27 ā Thereafter ā 144 ā Total ā $ 407 ā ā The Company uses a discounted cash flow model to determine the fair value of retained mortgage servicing assets. The discounted cash flow model is also used to assess impairment of servicing assets. Impairments are recorded as adjustments to amortization expense and included in service fees on loan and deposit accounts in the Consolidated Statements of Income. Critical assumptions used in the discounted cash flow model include mortgage prepayment speeds, discount rates and cost of servicing. ā Prepayment speed may be affected by economic factors such as home price appreciation, market interest rates, the availability of other loan products to our borrowers and customer payment patterns. Prepayment speeds include the impact of all borrower prepayments, including full payoffs, additional principal payments and the impact of loans paid off due to foreclosure liquidations. As market interest rates decline, prepayment speeds will generally increase as customers refinance existing mortgage loans under more favorable interest rate terms and future cash flows will generally decline resulting in a potential reduction, or impairment, to the fair value of the mortgage servicing assets. Alternatively, an increase in market interest rates may cause a decrease in prepayment speeds and therefore an increase in the fair value of mortgage servicing assets. ā The table below presents the fair values and key assumptions used in determining the fair values of our mortgage servicing assets as of December 31, 2020 and 2019: ā ā ā ā ā ā ā ā ā ā 2020 2019 Fair value, beginning of year (in thousands) ā $ 552 ā $ 291 ā Fair value, end of year (in thousands) ā 407 ā 552 ā ā ā ā ā ā ā ā ā Weighted average discount rate ā 10.25 % 10.25 % Weighted average prepayment speed assumption (CPR) ā 13.57 ā 12.58 ā Annual cost to service (per loan) ā $ 75 ā $ 75 ā ā The conditional prepayment rate (CPR) prepayment model assumes constant prepayment rates each period. |
Interest Rate Lock and Forward
Interest Rate Lock and Forward Loan Sale Commitments | 12 Months Ended |
Dec. 31, 2020 | |
Interest Rate Lock and Forward Loan Sale Commitments | |
Interest Rate Lock and Forward Loan Sale Commitments | (10) Interest Rate Lock and Forward Loan Sale Commitments ā The Company may enter into interest rate lock commitments with borrowers on loans intended to be sold. To manage interest rate risk on the lock commitments, the Company may also enter into forward loan sale commitments. The interest rate lock commitments and forward loan sale commitments are treated as derivatives and are recorded at their fair values in prepaid expenses and other assets or in accounts payable and accrued expenses. Changes in fair value are recorded in current earnings. At December 31, 2020, the notional amount of interest rate locks and forward loan sale commitments on loans held for sale amounted to ā The table below presents the location of assets and liabilities related to derivatives: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Asset Derivatives ā Liability Derivatives ā ā Location on ā Fair Value at December 31, ā Fair Value at December 31, (Dollars in thousands) Balance Sheet 2020 2019 2020 2019 Interest rate contracts Prepaid expenses and other assets ā $ 38 ā $ 5 ā $ ā ā $ ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Interest rate contracts Accounts payable and accrued expenses ā ā ā ā ā 38 ā 5 ā Total derivatives ā ā ā $ 38 ā $ 5 ā $ 38 ā $ 5 ā ā There were no gains or losses on derivatives for the years ended December 31, 2020 and 2019. |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Premises and Equipment | |
Premises and Equipment | (11) Premises and Equipment ā Premises and equipment are as follows: ā ā ā ā ā ā ā ā ā ā ā December 31, (Dollars in thousands) 2020 2019 Land ā $ 585 ā $ 585 ā Buildings and improvements ā 1,365 ā 1,365 ā Leasehold improvements ā 14,671 ā 14,027 ā Furniture, fixtures and equipment ā 6,807 ā 6,035 ā Automobiles ā 118 ā 115 ā ā ā 23,546 ā 22,127 ā Less accumulated depreciation and amortization ā (18,701) ā (17,900) ā ā ā 4,845 ā 4,227 ā Construction in progress ā 10 ā 143 ā Total ā $ 4,855 ā $ 4,370 ā ā Depreciation expense was $1.2 million for the years ended December 31, 2020 and 2019. |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2020 | |
Deposits | |
Deposits | (12) Deposits ā Deposit accounts by type are summarized with their respective weighted-average interest rates as follows: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, ā ā 2020 ā 2019 (Dollars in thousands) Amount Rate Amount Rate Non-interest bearing ā $ 66,014 ā % $ 54,927 ā % Savings accounts ā 1,010,891 0.15 ā 908,175 0.49 ā Certificates of deposit ā 321,778 1.34 ā 463,943 1.87 ā Money market ā 7,749 0.20 ā 4,917 0.45 ā Checking and Super NOW ā 253,368 0.02 ā 199,971 0.02 ā Total ā $ 1,659,800 0.36 % $ 1,631,933 0.81 % ā The maturity of certificate of deposit accounts at December 31, 2020 is as follows (dollars in thousands): ā ā ā ā ā ā Maturing in: ā ā 2021 ā $ 221,647 ā 2022 ā 66,610 ā 2023 ā 16,975 ā 2024 ā 12,533 ā 2025 ā 4,013 ā Total ā $ 321,778 ā ā Certificates of deposit with balances greater than or equal to $250,000 totaled $172.7 mllion and $272.7 million at December 31, 2020 and 2019, respectively. Deposit accounts in the Bank are insured by the FDIC, generally up to a maximum of $250,000 per account owner. ā Interest expense by type of deposit is as follows: ā ā ā ā ā ā ā ā ā (Dollars in thousands) 2020 2019 Savings ā $ 2,486 ā $ 4,593 ā Certificates of deposit and money market ā 6,479 ā 8,829 ā Checking and Super NOW ā 48 ā 41 ā Total ā $ 9,013 ā $ 13,463 ā ā At December 31, 2020 and 2019, overdrawn deposit accounts totaled $15,000 and $37,000, respectively, and have been reclassified as loans in the consolidated balance sheets. |
Advances from the Federal Home
Advances from the Federal Home Loan Bank | 12 Months Ended |
Dec. 31, 2020 | |
Advances from the Federal Home Loan Bank | |
Advances from the Federal Home Loan Bank | (13) Advances from the Federal Home Loan Bank ā Federal Home Loan Bank advances are secured by a blanket pledge on the Bankās assets not otherwise pledged. At December 31, 2020 and 2019, our credit line with the FHLB Des Moines was equal to 45% of the Bankās total assets and we had the capacity to borrow an additional $807.2 million and $727.5 million, respectively. ā During 2020, we restructured $82.0 million of FHLB advances. This transaction lowered the average cost of FHLB advances from years. The restructuring was accounted for as a continuation of the existing borrowings with any prepayment fees recognized as an adjustment to the future cost of the restructured advances. ā Advances outstanding consisted of the following: ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, ā ā 2020 ā 2019 ā ā ā Weighted ā ā Weighted ā ā ā Average ā ā ā ā Average ā (Dollars in thousands) Amount ā Rate ā Amount ā Rate ā Due within one year ā $ ā ā % $ 20,000 2.16 % Due over 1 year to 2 years ā 10,000 2.13 ā 57,000 2.50 ā Due over 2 years to 3 years ā 34,000 1.58 ā 30,000 2.37 ā Due over 3 years to 4 years ā ā 77,000 1.40 ā 19,000 2.16 ā Due over 4 years to 5 years ā 20,000 1.57 ā 30,000 1.87 ā Total ā $ 141,000 1.52 % $ 156,000 2.27 % ā |
Securities Sold Under Agreement
Securities Sold Under Agreements to Repurchase | 12 Months Ended |
Dec. 31, 2020 | |
Securities Sold Under Agreements to Repurchase | |
Securities Sold Under Agreements to Repurchase | (14) Securities Sold Under Agreements to Repurchase ā Securities sold under agreements to repurchase are treated as financings and the obligations to repurchase the identical securities sold are reflected as a liability with the securities collateralizing the agreements classified as an asset. Securities sold under agreements to repurchase are summarized as follows: ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2020 ā 2019 ā ā ā Weighted ā ā Weighted ā Repurchase ā Average ā Repurchase ā Average (Dollars in thousands) ā Liability ā Rate ā Liability ā Rate Maturing: ā ā ā ā ā ā ā ā ā ā ā 1 year or less ā $ ā ā % $ 5,000 1.65 % Over 3 year to 4 years ā 5,000 1.88 ā ā ā ā Over 4 year to 5 years ā 5,000 1.73 ā 5,000 1.88 ā Total ā $ 10,000 1.81 % $ 10,000 1.77 % ā Below is a summary comparing the carrying value and fair value of securities pledged to secure repurchase agreements, the repurchase liability, and the amount at risk at December 31, 2020. The amount at risk is the greater of the carrying value or fair value over the repurchase liability and refers to the potential loss to the Company if the secured lender fails to return the security at the maturity date of the agreement. All the agreements to repurchase are with JP Morgan Securities and the securities pledged are mortgage-backed securities issued and guaranteed by U.S. government sponsored enterprises. The repurchase liability cannot exceed of the fair value of securities pledged. In the event of a decline in the fair value of securities pledged to less than the required amount due to market conditions or principal repayments, the Company is obligated to pledge additional securities or other suitable collateral to cure the deficiency. ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Weighted Carrying Fair Average Value of Value of Repurchase Amount Months to (Dollars in thousands) Securities Securities Liability at Risk Maturity Maturing: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Over 90 days ā $ 10,253 ā $ 11,234 ā $ 10,000 ā $ 1,234 48 ā ā |
Offsetting of Financial Liabili
Offsetting of Financial Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Offsetting of Financial Liabilities | |
Offsetting of Financial Liabilities | (15) Offsetting of Financial Liabilities ā Securities sold under agreements to repurchase are subject to a right of offset in the event of default. See Note 14, Securities Sold Under Agreements to Repurchase, for additional information. ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Net Amount of Gross Amount Not Offset in the Gross Amount Gross Amount Liabilities Balance Sheet of Recognized Offset in the Presented in the Financial Cash Collateral (Dollars in thousands) Liabilities Balance Sheet Balance Sheet Instruments ā Pledged Net Amount December 31, 2020: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Securities sold under agreements to repurchase ā $ 10,000 ā $ ā ā $ 10,000 ā $ 10,000 ā $ ā ā $ ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Securities sold under agreements to repurchase ā $ 10,000 ā $ ā ā $ 10,000 ā $ 10,000 ā $ ā ā $ ā ā |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Income Taxes | (16) Income Taxes ā Allocation of federal and state income taxes between current and deferred provisions is as follows: ā ā ā ā ā ā ā ā ā (Dollars in thousands) 2020 2019 Current ā ā ā ā ā ā ā Federal ā $ 5,157 ā $ 3,366 ā State ā 1,950 ā 1,479 ā ā ā 7,107 ā 4,845 ā Deferred ā ā ā ā ā ā ā Federal ā (231) ā 1,147 ā State ā (161) ā 319 ā ā ā (392) ā 1,466 ā Total ā $ 6,715 ā $ 6,311 ā ā The federal statutory corporate tax rate for the years ended December 31, 2020 and 2019 was 21%. A reconciliation of the tax provision based on the statutory corporate rate on pretax income and the provision for taxes as shown in the accompanying Consolidated Statements of Income is as follows: ā ā ā ā ā ā ā ā ā (Dollars in thousands) 2020 2019 Income tax expense at statutory rate ā $ 5,317 ā $ 5,944 ā Income tax effect of: ā ā ā ā ā ā ā Other tax-exempt income ā (194) ā (263) ā Share-based compensation ā 70 ā (69) ā Meal and entertainment expenses ā ā 51 ā ā 82 ā State income taxes, net of federal income tax benefits ā 1,574 ā 1,301 ā Tax benefit from the exercise of stock options ā ā (63) ā ā (297) ā Tax benefit from tax depreciation study (1) ā ā ā ā ā (402) ā Non-deductible executive compensation ā ā 67 ā ā ā ā Other ā (107) ā 15 ā Total income tax expense ā $ 6,715 ā $ 6,311 ā Effective income tax rate ā 26.52 % 22.29 % (1) The Company conducted a study that reduced the asset lives used to calculate depreciation. The Company filed an amended tax return and was able to deduct the increase in depreciation expense at the 2017 federal corporate tax rate of 35% rather than the current 21% federal corporate tax rate. ā The components of income taxes payable (receivable) are as follows: ā ā ā ā ā ā ā ā ā ā ā December 31, (Dollars in thousands) 2020 2019 Current taxes payable: ā ā ā ā ā ā ā Federal ā $ 239 ā $ 767 ā State ā 1,922 ā 1,538 ā ā ā $ 2,161 ā $ 2,305 ā Deferred taxes receivable: ā ā ā ā ā ā ā Federal ā $ (2,152) ā $ (1,651) ā State ā (1,230) ā (968) ā ā ā $ (3,382) ā $ (2,619) ā ā The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below: ā ā ā ā ā ā ā ā ā ā ā December 31, (Dollars in thousands) 2020 2019 Deferred tax assets: ā ā ā ā ā ā ā Premises and equipment ā $ 392 ā $ 547 ā Hawaii franchise tax ā 476 ā 479 ā Unfunded pension liability ā 1,250 ā 925 ā Allowance for loan losses ā 1,135 ā 722 ā Employee benefit plans ā 2,706 ā 2,692 ā Equity incentive plan ā 210 ā 350 ā Deferred compensation ā 339 ā 413 ā Net lease liability ā ā 209 ā ā 161 ā Other ā 22 ā 8 ā ā ā 6,739 ā 6,297 ā Deferred tax liabilities: ā ā ā ā ā ā ā Deferred loan costs ā 2,926 ā 3,078 ā FHLB stock dividends ā 126 ā 126 ā Prepaid expense ā 97 ā 155 ā Unrealized gain on securities available for sale ā ā 100 ā ā 185 ā Premiums on loans sold ā 108 ā 134 ā ā ā 3,357 ā 3,678 ā Net deferred tax assets ā $ 3,382 ā $ 2,619 ā ā Deferred tax assets and liabilities at December 31, 2020 and 2019 were calculated using federal corporate tax rates of 21% . ā In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not the Company will realize the benefits of these deductible differences. The amount of the deferred tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income are reduced. There was no valuation allowance for deferred tax assets as of December 31, 2020 and 2019. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2020 | |
Employee Benefit Plans | |
Employee Benefit Plans | (17) Employee Benefit Plans ā The Company has a noncontributory defined benefit pension plan (Pension Plan) that covers most employees with at least one year of service. The benefits are based on years of service and the employeesā compensation during the service period. The Companyās policy is to accrue the actuarially determined pension costs and to fund pension costs within regulatory guidelines. The Company reviews its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is appropriate to do so. The effect of modifications to those assumptions is recorded in accumulated other comprehensive income beginning in 2006 and amortized to net periodic benefit cost over future periods using the corridor method. The Company believes that the assumptions utilized in recording its obligations under the plan are reasonable based on its experience and market conditions. ā In 2008, the Board of Directors approved changes to the Companyās Pension Plan. Effective December 31, 2008, there are no further accruals of benefits for any participants and benefits do not increase with any additional years of service. Employees already enrolled in the Pension Plan as of December 31, 2008 will be 100% vested if they have at least five years of service. For employees with less than five years of service, vesting would occur at the employeeās five-year anniversary date. ā In addition, the Company sponsors a Supplemental Employee Retirement Plan (SERP), a noncontributory supplemental retirement benefit plan, which covers certain current and former employees of the Company for amounts in addition to those provided under the Pension Plan. ā The following table sets forth the status of the Pension Plan and SERP at the dates indicated: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Pension Plan ā SERP ā ā December 31, (Dollars in thousands) 2020 2019 2020 2019 Accumulated benefit obligation at end of year ā $ 24,130 ā $ 21,367 ā $ 9,866 ā $ 9,702 ā Change in projected benefit obligation: ā ā ā ā ā ā ā ā ā ā ā ā ā Benefit obligation at beginning of year ā $ 21,367 ā $ 18,713 ā $ 9,702 ā $ 9,473 ā Service cost ā 174 ā 164 ā 9 ā 84 ā Interest cost ā 722 ā 811 ā 172 ā 162 ā Actuarial loss ā 2,776 ā 2,558 ā ā ā ā ā Benefits paid ā (909) ā (879) ā (17) ā (17) ā Benefit obligation at end of year ā 24,130 ā 21,367 ā 9,866 ā 9,702 ā Change in plan assets: ā ā ā ā ā ā ā ā ā ā ā ā ā Fair value of plan assets at beginning of year ā 19,435 ā 17,500 ā ā ā ā ā Actual return on plan assets ā 2,625 ā 2,814 ā ā ā ā ā Employer contributions ā ā ā ā ā 17 ā 17 ā Benefits paid ā (909) ā (879) ā (17) ā (17) ā Fair value of plan assets at end of year ā 21,151 ā 19,435 ā ā ā ā ā Funded status at end of year ā $ (2,979) ā $ (1,932) ā $ (9,866) ā $ (9,702) ā Amounts recognized in the Consolidated Balance Sheets: ā ā ā ā ā ā ā ā ā ā ā ā ā Accounts payable and accrued expenses - liability ā $ (2,979) ā $ (1,932) ā $ (9,866) ā $ (9,702) ā Amounts recognized in accumulated other comprehensive loss: ā ā ā ā ā ā ā ā ā ā ā ā ā Net actuarial loss ā $ 12,088 ā $ 11,008 ā $ ā ā $ ā ā Prior service cost ā 134 ā 139 ā ā ā ā ā Accumulated other comprehensive loss, before tax ā $ 12,222 ā $ 11,147 ā $ ā ā $ ā ā ā The accumulated benefit obligation experienced an actuarial loss of $2.8 million in 2020 primarily because of a decrease in the discount rate used to calculate the obligation and a difference between the actual benefits paid and the assumption used in the actuarial calculation. The following table sets forth the changes recognized in accumulated other comprehensive loss for the years indicated: ā ā ā ā ā ā ā ā ā ā ā Pension Plan ā ā Year Ended December 31, (Dollars in thousands) 2020 2019 Accumulated other comprehensive loss at beginning of year, before tax ā $ 11,147 ā $ 10,524 ā Actuarial net loss arising during the period ā 1,455 ā 961 ā Amortizations (recognized in net periodic benefit cost): ā ā ā ā ā ā ā Actuarial loss ā (375) ā (333) ā Prior service cost ā (5) ā (5) ā Total recognized in other comprehensive loss ā 1,075 ā 623 ā Accumulated other comprehensive loss at end of year, before tax ā $ 12,222 ā $ 11,147 ā ā For the years ended December 31, 2020 and 2019, the following weighted average assumptions were used to determine benefit obligations at the end of the year: ā ā ā ā ā ā ā ā ā ā ā ā ā Pension Plan ā SERP ā ā Year Ended December 31, ā 2020 2019 2020 2019 Assumptions used to determine the year-end benefit obligations: ā ā ā ā ā ā ā ā ā Discount rate 2.50 % 3.30 % 5.01 % 5.02 % Rate of compensation increase N/A ā N/A ā 5.00 % 5.00 % ā The dates used to determine retirement measurements for the Pension Plan were December 31, 2020 and 2019. ā The Companyās investment strategy for the Pension Plan is to maintain a consistent rate of return with primary emphasis on capital appreciation and secondary emphasis on income to enhance the purchasing power of the planās assets over the long-term and to preserve capital. The investment policy establishes a target allocation for each asset class that is reviewed periodically and rebalanced when considered appropriate. Normal target allocations at December 31, 2020 were 55% domestic equity securities, 10% international equity securities and 35% bonds. Equity securities primarily include stocks, investment in exchange traded funds and large-cap, mid-cap and small-cap mutual funds. Bonds include U.S. Treasuries, mortgage-backed securities and corporate bonds of companies in diversified industries. Other types of investments include money market funds and savings accounts opened with the Company. ā As of December 31, 2020 and 2019, the Pension Planās assets measured at fair value were classified as follows: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Fair Value of Measurements at Report Date Using: ā ā ā ā ā Quoted Prices ā ā ā ā ā ā ā ā ā ā ā in Active ā Significant ā ā ā ā ā ā ā ā Markets for ā Other ā Significant ā ā ā ā ā Identical ā Observable ā Unobservable ā ā Total Fair ā Assets ā Inputs ā Inputs (Dollars in thousands) ā Value ā (Level 1) ā (Level 2) ā (Level 3) December 31, 2020: ā ā ā ā ā Cash ā $ 1,971 ā $ 1,971 ā $ ā ā $ ā ā Equities ā 14,004 ā 14,004 ā ā ā ā ā Mutual funds (1) ā 5,176 ā 5,176 ā ā ā ā ā Total ā $ 21,151 ā $ 21,151 ā $ ā ā $ ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019: ā ā ā ā ā ā ā ā ā ā ā ā ā Cash ā $ 3,021 ā $ 3,021 ā $ ā ā $ ā ā Equities ā 11,576 ā 11,576 ā ā ā ā ā Mutual funds (1) ā 4,838 ā 4,838 ā ā ā ā ā Total ā $ 19,435 ā $ 19,435 ā $ ā ā $ ā ā (1) This category includes mutual funds that invest in equities and bonds. The mutual fund managers have the ability to change the amounts invested in equities and bonds depending on their investment outlook. ā Estimated future benefit payments reflecting expected future service at December 31, 2020 are as follows: ā ā ā ā ā ā ā ā ā ā Pension ā ā (Dollars in thousands) ā Plan ā SERP 2021 ā $ 1,379 ā $ 17 ā 2022 ā 1,435 ā 8,671 ā 2023 ā 1,441 ā 149 ā 2024 ā 1,444 ā 149 ā 2025 ā 1,430 ā 149 ā 2026 - 2030 ā 6,868 ā 743 ā Total ā $ 13,997 ā $ 9,878 ā ā For the years ended December 31, 2020 and 2019, the following weighted average assumptions were used to determine net periodic benefit cost for the fiscal years shown: ā ā ā ā ā ā ā ā ā ā ā ā ā Pension Plan SERP ā ā Year Ended December 31, (Dollars in thousands) 2020 2019 2020 2019 Assumptions used to determine the net periodic benefit cost: ā ā ā ā ā ā ā ā ā Discount rate 3.30 % 4.30 % 5.02 % 5.02 % Expected return on plan assets 7.00 ā 7.25 ā - ā - ā Rate of compensation increase N/A ā N/A ā 5.00 ā 5.00 ā ā The components of net periodic benefit cost were as follows: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Pension Plan SERP ā ā Year Ended December 31, ā (Dollars in thousands) 2020 2019 2020 2019 Net periodic benefit cost (income) for the year: ā ā ā ā ā ā ā ā ā ā ā ā ā Service cost ā $ 174 ā $ 164 ā $ 9 ā $ 84 ā Interest cost ā 722 ā 811 ā 172 ā 162 ā Expected return on plan assets ā (1,304) ā (1,217) ā ā ā ā ā Amortization of prior service cost ā 5 ā 5 ā ā ā ā ā Recognized actuarial loss ā 375 ā 333 ā ā ā ā ā Recognized curtailment loss ā ā ā ā ā ā ā ā ā Net periodic benefit cost (income) for the year: ā $ (28) ā $ 96 ā $ 181 ā $ 246 ā ā The components of net periodic benefit cost other than the service cost component are included in other general and administrative expenses in the Consolidated Statements of Income. The service cost component of net periodic benefit costs is included in salaries and employee benefits. ā The expected return on plan assets is based on the weighted-average long-term rates of return for the types of assets held in the plan. The expected return on plan assets is adjusted when there is a change in the expected long-term rate of return or in the composition of assets held in the plan. The discount rate is based on the return of high-quality fixed-income investments that can be used to fund the benefit payments under the Companyās defined benefit plan. ā The Company does not expect to make any contributions to the Pension Plan in 2021. The Company expects to make a ā The Company also has a 401(k) defined contribution plan and profit sharing plan covering all employees after one year of service. The 401(k) plan provides for employer matching contributions, as determined by the Company, based on a percentage of employeesā contributions subject to a maximum amount defined in the plan agreement. The Companyās 401(k) matching contributions, based on 5% of employeesā contributions for 2020 and 2019 amounted to $65,000 and $62,000, respectively. The Company contributes to the profit sharing plan an amount determined by the Board of Directors. No contributions were made to the profit sharing plan for years ended December 31, 2020 and 2019. |
Employee Stock Ownership Plan
Employee Stock Ownership Plan | 12 Months Ended |
Dec. 31, 2020 | |
Employee Stock Ownership Plan | |
Employee Stock Ownership Plan | |
Employee Stock Ownership Plan | (18) Employee Stock Ownership Plan ā Effective January 1, 2009, Territorial Savings Bank adopted an Employee Stock Ownership Plan (ESOP) for eligible employees. The ESOP borrowed , of the total number of shares issued by the Company in its initial public offering. The shares were acquired at a price of ā The loan is secured by the shares purchased with the loan proceeds and will be repaid by the ESOP over the 20 -year term of the loan with funds from Territorial Savings Bankās contributions to the ESOP and dividends payable on the shares. The interest rate on the ESOP loan is an adjustable rate equal to the . The interest rate adjusts annually and will be the prime rate on the first business day of the calendar year. ā Shares purchased by the ESOP are held by a trustee in an unallocated suspense account, and shares are released annually from the suspense account on a pro-rata basis as principal and interest payments are made by the ESOP to the Company. The trustee allocates the shares released among participants on the basis of each participantās proportional share of compensation relative to all participants. As shares are committed to be released from the suspense account, Territorial Savings Bank reports compensation expense based on the average fair value of shares released with a corresponding credit to stockholdersā equity. The shares committed to be released are considered outstanding for earnings per share computations. Compensation expense recognized for the years ended December 31, 2020 and 2019 amounted to ā Shares held by the ESOP trust were as follows: ā ā ā ā ā ā ā ā ā December 31, 2020 2019 Allocated shares ā ā 507,304 ā 466,807 ā Unearned shares ā ā 391,464 ā 440,397 ā Total ESOP shares ā ā 898,768 ā 907,204 ā Fair value of unearned shares, in thousands ā $ 9,407 ā $ 13,626 ā ā The ESOP restoration plan is a non-qualified plan that provides supplemental benefits to certain executives who are prevented from receiving the full benefits contemplated by the ESOPās benefit formula. The supplemental cash payments consist of payments representing shares that cannot be allocated to the participants under the ESOP due to IRS limitations imposed on tax-qualified plans. We accrue for these benefits over the period during which employees provide services to earn these benefits. For the years ended December 31, 2020 and 2019, we accrued |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
2010 Equity Incentive Plan | |
Share-Based Compensation | |
Share-Based Compensation | (19) Share-Based Compensation ā On August 19, 2010, Territorial Bancorp Inc. adopted the 2010 Equity Incentive Plan, which provides for awards of stock options and restricted stock to key officers and outside directors. In accordance with the Compensation ā Stock Compensation topic of the FASB ASC, the cost of the 2010 Equity Incentive Plan is based on the fair value of the awards on the grant date. The fair value of restricted stock is based on the closing price of the Companyās stock on the grant date. The fair value of stock options is estimated using a Black-Scholes option pricing model using assumptions for dividend yield, stock price volatility, risk-free interest rate and option term. These assumptions are based on our judgments regarding future events, are subjective in nature, and cannot be determined with precision. The cost of the awards will be recognized on a straight-line basis over the three five ā The Company recognized compensation expense, measured as the fair value of the share-based award on the date of grant, on a straight-line basis over the vesting period. Share-based compensation is recorded in the Consolidated Statements of Income as a component of salaries and employee benefits with a corresponding increase in stockholdersā equity. The table below presents information on compensation expense and the related tax benefit for all share-based awards: ā ā ā ā ā ā ā ā ā ā ā (In thousands) 2020 2019 Compensation expense ā $ 619 ā $ 571 ā Income tax benefit ā 169 ā 156 ā ā Shares of our common stock issued under the 2010 and 2019 Equity Incentive Plan shall be authorized shares. The maximum number of shares that will be awarded under the plan is ā Stock Options ā The table below presents the stock option activity of the Company: ā ā ā ā ā ā ā ā ā ā ā ā ā Weighted Aggregate Average Remaining Intrinsic Exercise Contractual Value Options Price Life (years) (in thousands) Options outstanding at December 31, 2018 337,654 ā $ 17.51 1.74 ā $ 2,859 ā Granted ā ā ā ā ā ā ā Exercised 221,245 ā 17.50 ā ā 2,483 ā Forfeited ā ā ā ā ā ā ā Expired ā ā ā ā ā ā ā Options outstanding at December 31, 2019 116,409 ā $ 17.53 0.72 ā $ 1,562 ā Granted ā ā ā ā ā ā ā Exercised 81,827 ā 17.36 ā ā 725 ā Forfeited ā ā ā ā ā ā ā Expired 31,497 ā ā ā ā ā ā Options outstanding at December 31, 2020 3,085 ā $ 23.62 1.67 ā $ 1,265 ā ā ā ā ā ā ā ā ā ā ā ā ā Options vested and exercisable at December 31, 2020 3,085 ā $ 23.62 1.67 ā $ 1,265 ā ā The following summarizes certain stock option activity of the Company: ā ā ā ā ā ā ā ā ā (In thousands) 2020 2019 Intrinsic value of stock options exercised ā $ 725 ā $ 2,483 ā Proceeds received from stock options exercised ā 1,421 ā 3,873 ā Tax benefits realized from stock options exercised ā 158 ā 534 ā Total fair value of stock options that vested ā ā ā ā ā ā During the year ended December 31, 2020, 81,827 of stock options were exercised. shares of common stock. Pursuant to the provisions of our equity incentive plan, optionees are permitted to use the value of common stock they own in a stock swap transaction or use a net settlement method to pay the exercise price of stock options. ā As of December 31, 2020, the Company had no unrecognized compensation costs related to the stock option plan. ā Restricted Stock ā Restricted stock is accounted for as a fixed grant using the fair value of the Companyās stock at the time of grant. Unvested restricted stock may not be disposed of or transferred during the vesting period. Restricted stock carries the right to receive dividends, although dividends attributable to restricted stock may be retained by the Company until the shares vest, at which time they are paid to the award recipient. Accrued dividends on restricted stock that do not vest based on performance or market conditions are forfeited. ā The table below presents the restricted stock activity: ā ā ā ā ā ā ā ā Weighted Average Grant Restricted Date Fair Stock Value Unvested at December 31, 2018 ā 16,424 ā $ 30.26 ā Granted 10,366 ā 27.30 ā Vested 6,541 ā 30.14 ā Forfeited ā ā ā ā Unvested at December 31, 2019 20,249 ā $ 28.78 ā ā ā ā ā ā ā ā Unvested at December 31, 2019 ā 20,249 ā $ 28.78 ā Granted 13,444 ā 21.05 ā Vested 9,998 ā 29.16 ā Forfeited ā ā ā ā Unvested at December 31, 2020 23,695 ā $ 24.24 ā ā During the year ended December 31, 2020, the Company issued 13,444 shares of restricted stock to certain members of executive management under the 2010 Equity Incentive Plan. The fair value of the restricted stock is based on the value of the Companyās stock on the date of grant. Restricted stock will vest over ā As of December 31, 2020, the Company had $337,000 of unrecognized compensation costs related to time-vested restricted stock. The unrecognized compensation costs are expected to be recognized over a weighted average period of ā During the year ended December 31, 2020, the Company issued 16,129 of performance-based restricted stock units (PRSUs) to certain members of executive management under the 2019 Equity Incentive Plan. These PRSUs will vest in the first quarter of 2023 after our Compensation Committee determines whether a performance condition that compares the Companyās return on average equity to the SNL Bank Index is achieved. Depending on the Companyās performance, the actual number of these PRSUs that are issued at the end of the vesting period can vary between of the target award. For the PRSUs, an estimate is made of the number of shares expected to vest based on the probability that the performance criteria will be achieved to determine the amount of compensation expense to be recognized. This estimate is re-evaluated quarterly and total compensation expense is adjusted for any change in the current period. ā The table below presents the PRSUs that will vest on a performance condition: ā ā ā ā ā ā ā Performance- ā ā ā ā Based Restricted ā ā ā Stock Units Weighted ā ā Based on a ā Average Grant ā ā Performance ā Date Fair Condition Value Unvested at December 31, 2018 23,538 ā $ 30.14 Granted 12,438 ā 27.30 Vested ā ā ā Forfeited ā ā ā Unvested at December 31, 2019 35,976 ā $ 29.16 ā ā ā ā ā ā Unvested at December 31, 2019 35,976 ā $ 29.16 Granted 16,129 ā 21.05 Vested 7,680 ā 29.53 Forfeited 3,840 ā 29.53 Unvested at December 31, 2020 40,585 ā $ 25.83 ā The fair value of these PRSUs is based on the fair value of the Companyās stock on the date of grant. As of December 31, 2020, the Company had of unrecognized compensation costs related to these PRSUs. The unrecognized compensation costs are expected to be recognized over a weighted average period of years. Performance will be measured over a ā During the year ended December 31, 2020, the Company issued 4,032 of PRSUs to certain members of executive management under the 2010 Equity Incentive Plan. These PRSUs will vest in the first quarter of 2023 after our Compensation Committee determines whether a market condition that compares the Companyās total stock return to the SNL Bank Index is achieved. The number of shares that will be expensed will not be adjusted for performance. The fair value of these PRSUs is based on a Monte Carlo valuation of the Companyās stock on the date of grant. The assumptions which were used in the Monte Carlo valuation of the PRSUs are: ā Grant date: March 12, 2020 Performance period: January 1, 2020 to December 31, 2022 2.82 year risk-free rate on grant date: 0.56% December 31, 2019 closing price: $30.94 Closing stock price on date of grant: $21.05 Annualized volatility (based on 2.82 year historical volatility as of the grant date): 18.02% ā The table below presents the PRSUs that will vest on a market condition: ā ā ā ā ā ā ā ā ā ā ā ā Performance- ā ā ā ā ā Based Restricted ā Monte Carlo ā ā Stock Units ā Valuation of ā ā Based on a ā the Company's Market Condition Stock Unvested at December 31, 2018 5,884 ā $ 26.42 Granted 3,110 ā 24.45 Vested ā ā ā Forfeited ā ā ā Unvested at December 31, 2019 8,994 ā $ 25.74 ā ā ā ā ā ā Unvested at December 31, 2019 8,994 ā $ 25.74 Granted 4,032 ā 22.16 Vested 1,197 ā 24.44 Forfeited 1,682 ā 24.44 Unvested at December 31, 2020 10,147 ā $ 24.69 ā ā As of December 31, 2020, the Company had $76,000 of unrecognized compensation costs related to the PRSUs that are based on a market condition. The unrecognized compensation costs are expected to be recognized over a weighted average period of years. Performance will be measured over a ā On May 16, 2019, shareholders of Territorial Bancorp Inc. adopted the 2019 Equity Incentive Plan, which provides for the award of 15,000 stock options and restricted stock to key officers and directors. As of December 31, 2020, no awards have been granted under the 2019 Equity Incentive Plan. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share | |
Earnings Per Share | (20) Earnings Per Share ā The table below presents the information used to compute basic and diluted earnings per share: ā ā ā ā ā ā ā ā ā For the Year Ended December 31, ā ā ā ā ā ā (Dollars in thousands, except per share data) 2020 2019 Net income ā $ 18,605 ā $ 21,995 ā Income allocated to participating securities ā ā (78) ā ā (149) ā Net income available to common shareholders ā $ 18,527 ā $ 21,846 ā ā ā ā ā ā ā ā ā Weighted-average number of shares used in: ā ā ā ā ā ā ā Basic earnings per share ā 9,137,398 ā 9,196,674 ā Dilutive common stock equivalents: ā ā ā ā ā ā ā Stock options and restricted stock units ā 59,291 ā 128,940 ā Diluted earnings per share ā 9,196,689 ā 9,325,614 ā ā ā ā ā ā ā ā ā Net income per common share, basic ā $ 2.03 ā $ 2.38 ā Net income per common share, diluted ā $ 2.01 ā $ 2.34 ā ā |
Other Comprehensive Loss
Other Comprehensive Loss | 12 Months Ended |
Dec. 31, 2020 | |
Other Comprehensive Loss | |
Other Comprehensive Loss | (21) Other Comprehensive Loss ā The table below presents the changes in the components of accumulated other comprehensive loss, net of taxes: ā ā ā ā ā ā ā ā ā ā ā ā Unfunded Unrealized Pension (Gain)/Loss on (Dollars in thousands) Liability Securities Total December 31, 2020: ā ā ā ā ā ā ā ā ā ā Balances at beginning of year ā $ 8,178 ā $ (510) ā $ 7,668 ā Other comprehensive loss, net of taxes ā 789 ā 13 ā 802 ā Amounts reclassified from other comprehensive income, net of taxes ā ā ā 221 ā 221 ā Net current period other comprehensive loss ā 789 ā 234 ā 1,023 ā Balances at end of year ā $ 8,967 ā $ (276) ā $ 8,691 ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019: ā ā ā ā ā ā ā ā ā ā Balances at beginning of year ā $ 7,721 ā $ 88 ā $ 7,809 ā Other comprehensive loss (income), net of taxes ā 457 ā (721) ā (264) ā Amounts reclassified from other comprehensive income, net of taxes ā ā ā 123 ā 123 ā Net current period other comprehensive loss (income) ā 457 ā (598) ā (141) ā Balances at end of year ā $ 8,178 ā $ (510) ā $ 7,668 ā ā ā ā ā ā ā ā ā ā ā ā ā The table below presents the tax effect on each component of other comprehensive income and loss: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Year Ended December 31, 2020 ā 2019 Pretax ā ā After Tax Pretax ā ā After Tax (Dollars in thousands) Amount ā Tax ā Amount ā Amount ā Tax ā Amount ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Unfunded pension liability ā $ 1,075 ā $ (286) ā $ 789 ā $ 623 ā $ (166) ā $ 457 ā Unrealized loss (gain) on securities ā 18 ā (5) ā 13 ā (983) ā 262 ā (721) ā Amount reclassified from other comprehensive income ā 301 ā (80) ā 221 ā 168 ā (45) ā 123 ā Total ā $ 1,394 ā $ (371) ā $ 1,023 ā $ (192) ā $ 51 ā $ (141) ā ā |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2020 | |
Commitments | |
Commitments | (22) Commitments ā (a) Loan Commitments ā Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any terms or conditions established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customerās creditworthiness on an individual basis. The Companyās policy is to require suitable collateral, primarily real estate, to be provided by customers prior to disbursement of approved loans. At December 31, 2020 and 2019, the Company had loan commitments aggregating to $21.3 million (interest rates from 2.250% to 3.125%) and $8.7 million (interest rates from 3.375% to 4.000% ), respectively, primarily consisting of fixed-rate residential first mortgage loans. In addition to commitments to originate loans, at December 31, 2020 and 2019, the Company had ā (b) Reserve Requirements ā The Company is required by the Federal Reserve Bank to maintain reserves based on the amount of deposits held. During 2020, the Federal Reserve Bank eliminated reserve requirements as part of an emergency stimulus move in an attempt to cushion the U.S. economy from the coronavirus pandemic. The reserve requirement at December 31, 2019 was |
Regulatory Capital and Supervis
Regulatory Capital and Supervision | 12 Months Ended |
Dec. 31, 2020 | |
Regulatory Capital and Supervision | |
Regulatory Capital and Supervision | (23) Regulatory Capital and Supervision ā Territorial Savings Bank and the Company are subject to various regulatory capital requirements, including a risk-based capital measure. The risk-based capital guidelines include both a definition of capital and a framework for calculating risk-weighted assets by assigning balance sheet assets and off-balance sheet items to broad risk categories. Effective January 1, 2015, the well capitalized threshold for Tier 1 risk-based capital was increased from ratio requirement for a financial institution to be considered well capitalized. Additionally, effective January 1, 2015, consolidated regulatory capital requirements identical to those applicable to the subsidiary depository institutions became applicable to savings and loan holding companies over billion in assets, such as the Company. This asset level was increased to billion in 2018. Accordingly, the Company is no longer subject to regulatory capital requirements because its total assets are less than billion. The capital requirements became fully-phased in on January 1, 2019. At December 31, 2020 and 2019, Territorial Savings Bank exceeded all of the fully-phased in regulatory captial requirments and is considered to be āwell capitalizedā under regulatory guidelines. In addition to establishing the minimum regulatory capital requirements, the regulations limit capital distributions and certain discretionary bonus payments to management if the institution does not hold a ācapital conservation bufferā consisting of of common equity Tier 1 capital to risk-weighted assets above the amount necessary to meet its minimum risk-based capital requirements. The capital conservation buffer requirement was ā The table below presents the fully-phased in capital required to be considered āwell-capitalizedā and meet the capital conservation buffer requirement as a percentage of total and risk-weighted assets and the percentage and the total amount of capital maintained for Territorial Savings Bank and the Company at December 31, 2020 and 2019: ā ā ā ā ā ā ā ā ā ā (Dollars in thousands) Required Ratio ā Actual Amount Actual Ratio December 31, 2020: ā ā ā ā ā ā ā ā Tier 1 Leverage Capital ā ā ā ā ā ā ā ā Territorial Savings Bank 5.00 % $ 239,256 ā 11.38 % Territorial Bancorp Inc. ā ā $ 257,399 ā 12.24 % Common Equity Tier 1 Risk-Based Capital (1) ā ā ā ā ā ā ā ā Territorial Savings Bank 9.00 % $ 239,256 ā 27.49 % Territorial Bancorp Inc. ā ā $ 257,399 ā 29.57 % Tier 1 Risk-Based Capital (1) ā ā ā ā ā ā ā ā Territorial Savings Bank 10.50 % $ 239,256 ā 27.49 % Territorial Bancorp Inc. ā ā $ 257,399 ā 29.57 % Total Risk-Based Capital (1) ā ā ā ā ā ā ā ā Territorial Savings Bank 12.50 % $ 243,608 ā 27.99 % Territorial Bancorp Inc. ā ā $ 261,751 ā 30.07 % ā ā ā ā ā ā ā ā ā December 31, 2019: ā ā ā ā ā ā ā ā Tier 1 Leverage Capital ā ā ā ā ā ā ā ā Territorial Savings Bank 5.00 % $ 227,507 ā 10.92 % Territorial Bancorp Inc. ā ā $ 251,558 ā 12.06 % Common Equity Tier 1 Risk-Based Capital (1) ā ā ā ā ā ā ā ā Territorial Savings Bank 9.00 % $ 227,507 ā 23.31 % Territorial Bancorp Inc. ā ā $ 251,558 ā 25.77 % Tier 1 Risk-Based Capital (1) ā ā ā ā ā ā ā ā Territorial Savings Bank 10.50 % $ 227,507 ā 23.31 % Territorial Bancorp Inc. ā ā $ 251,558 ā 25.77 % Total Risk-Based Capital (1) ā ā ā ā ā ā ā ā Territorial Savings Bank 12.50 % $ 230,304 ā 23.59 % Territorial Bancorp Inc. ā ā $ 254,355 ā 26.06 % (1) The required Common Equity Tier 1 Risk-Based Capital, Tier 1 Risk-Based Capital and Total Risk-Based Capital ratios are based on the fully-phased in capital ratios in the Basel III capital regulations plus the 2.50% capital conservation buffer that became effective on January 1, 2019. ā Prompt Corrective Action provisions define specific capital categories based on an institutionās capital ratios. However, the regulators may impose higher minimum capital standards on individual institutions or may downgrade an institution from one capital category to a lower category because of safety and soundness concerns. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Companyās Consolidated Financial Statements. ā Prompt Corrective Action provisions impose certain restrictions on institutions that are undercapitalized. The restrictions imposed become increasingly more severe as an institutionās capital category declines from āundercapitalizedā to ācritically undercapitalized.ā ā At December 31, 2020 and 2019, the Bankās capital ratios exceeded the minimum capital thresholds for a āwell-capitalizedā institution. There are no conditions or events that have changed the institutionās category under the capital guidelines. ā Depending on the amount of dividends to be paid, the Bank is required to either notify or make application to the Federal Reserve Bank before dividends are paid to the parent company. ā Legislation enacted in 2018 requires the federal banking agencies, including the Federal Reserve Board, to establish a ācommunity bank leverage ratioā between 8% to 10% of average total consolidated assets for qualifying institutions with assets of less than $10 billion. Institutions with capital meeting the specified requirements and electing to follow the alternative framework would be deemed to comply with the applicable regulatory capital requirements, including the risk based requirements. The federal regulators have adopted 9% as the applicable ratio, effective March 31, 2020, and subsequently lowered the ratio to 8% as a result of the CARES Act. The Bank is not planning to adopt the alternative framework, with the applicable regulatory requirements. |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Contingencies | |
Contingencies | (24) Contingencies ā The Company is involved in various claims and legal actions arising out of the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Companyās Consolidated Balance Sheets or Consolidated Statements of Income. ā |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2020 | |
Revenue Recognition | |
Revenue Recognition | (25) Revenue Recognition ā The Companyās contracts with customers are generally short-term in nature, with cycles of one year or less. These can range from an immediate term for services such as wire transfers, foreign currency exchanges and cashierās check purchases, to several days for services such as processing annuity and mutual fund sales. Some contracts may be of an ongoing nature, such as providing deposit account services, including ATM access, check processing, account analysis and check ordering. However, provision of an assessable service and payment for such service is usually concurrent or closely timed. Contracts related to financial instruments, such as loans, investments and debt, are excluded from the scope of this reporting requirement. ā After analyzing the Companyās revenue sources, including the amount of revenue received, the timing of services rendered and the timing of payment for these services, the Company has determined that the rendering of services and the payment for such services are generally closely matched. Any differences are not material to the Companyās Consolidated Financial Statements. Accordingly, the Company generally records income when payment for services is received. ā Revenue from contracts with customers is reported in service fees on loan and deposit accounts and in other noninterest income in the Consolidated Statements of Income. The table below reconciles the revenue from contracts with customers and other revenue reported in those line items: ā ā ā ā ā ā ā ā ā ā ā Service Fees on ā ā ā ā Loan and Deposit ā ā ā ā (Dollars in thousands) Accounts Other Total Year ended December 31, 2020 ā ā ā ā ā ā ā ā ā Revenue from contracts with customers ā $ 2,565 ā $ 243 ā $ 2,808 Other revenue ā ā 97 ā ā 146 ā ā 243 Total ā $ 2,662 ā $ 389 ā $ 3,051 ā ā ā ā ā ā ā ā ā ā Year ended December 31, 2019 ā ā ā ā ā ā ā ā ā Revenue from contracts with customers ā $ 1,779 ā $ 150 ā $ 1,929 Other revenue ā ā 158 ā ā 460 ā ā 618 Total ā $ 1,937 ā $ 610 ā $ 2,547 ā |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases | |
Leases | (26) Leases ā The table below presents lease costs and other information for the years indicated: ā ā ā ā ā ā ā ā ā ā Year Ended ā December 31, (Dollars in thousands) 2020 2019 Lease Costs: ā ā ā ā ā ā ā Operating lease costs ā $ 3,365 ā $ 3,130 ā Short-term lease costs ā 23 ā 57 ā Variable lease costs ā 163 ā 129 ā Total lease costs ā $ 3,551 ā $ 3,316 ā ā ā ā ā ā ā ā ā Cash paid for amounts included in measurement of lease liabilities ā $ 3,238 ā $ 2,991 ā ROU assets obtained in exchange for new operating lease liabilities ā $ 4,042 ā $ 14,341 ā ā Total rental expense comprised minimum rentals of $3.4 million and $3.1 million for the years ended December 31, 2020 and 2019, respectively. ā At December 31, 2020, future minimum rental commitments under noncancellable operating leases are as follows: ā ā ā ā ā ā ā ā ā ā ā (Dollars in thousands) ā ā ā ā ā ā ā ā 2021 ā $ 3,055 ā ā ā ā ā ā 2022 ā 2,760 ā ā ā ā ā ā 2023 ā 2,407 ā ā ā ā ā ā 2024 ā 2,152 ā ā ā ā ā ā 2025 ā 1,461 ā ā ā ā ā ā Thereafter ā 3,824 ā ā ā ā ā ā Total ā ā 15,659 ā ā ā ā ā ā Less present value discount ā ā 2,540 ā ā ā ā ā ā Present value of leases ā $ 13,119 ā ā ā ā ā ā ā The table below presents other lease related information: ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, ā ā December 31, ā ā ā 2020 ā 2019 ā Weighted-average remaining lease term (years) ā 5.92 ā ā 5.99 ā ā Weighted-average discount rate ā ā 2.29 % ā ā 2.76 % ā ā The Company leases to a tenant certain property that it owns. Future minimum rental income for this noncancellable lease is as follows: ā ā ā ā ā ā (Dollars in thousands) ā ā ā 2021 ā $ 110 ā 2022 ā ā ā 2023 ā ā ā 2024 ā ā ā 2025 ā ā ā Thereafter ā ā ā Total ā $ 110 ā ā Rental income comprised of minimum rentals for 2020 and 2019 was approximately $110,000 each year. ā |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | (27) Fair Value of Financial Instruments ā In accordance with the Fair Value Measurements and Disclosures topic of the FASB ASC, the Company groups its financial assets and liabilities measured or disclosed at fair value into three levels based on the markets in which the financial assets and liabilities are traded and the reliability of the assumptions used to determine fair value as follows: ā ā ā ā ā ā Level 3 ā Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect managementās own estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of discounted cash flow models and similar techniques that require the use of significant judgment or estimation. ā In accordance with the Fair Value Measurements and Disclosures topic, the Company bases its fair values on the price that it would expect to receive if an asset were sold or the price that it would expect to pay to transfer a liability in an orderly transaction between market participants at the measurement date. Also as required, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when developing fair value measurements. ā The Company uses fair value measurements to determine fair value disclosures. Investment securities available for sale and derivatives are recorded at fair value on a recurring basis. From time to time, the Company may be required to record other financial assets at fair value on a nonrecurring basis, such as loans held for sale, impaired loans and investments, and mortgage servicing assets. These nonrecurring fair value adjustments typically involve application of the lower of cost or fair value accounting or write-downs of individual assets. ā Investment Securities Available for Sale. ā Interest Rate Contracts. The Company may enter into interest rate lock commitments with borrowers on loans intended to be sold. To manage interest rate risk on the lock commitments, the Company may also enter into forward loan sale commitments. The interest rate lock commitments and forward loan sale commitments are treated as derivatives and are recorded at their fair value determined by referring to prices quoted in the secondary market for similar contracts. The fair value inputs are considered Level 2 inputs. Interest rate contracts that are classified as assets are included with prepaid expenses and other assets on the Consolidated Balance Sheet while interest rate contracts that are classified as liabilities are included with accounts payable and accrued expenses. ā The estimated fair values of the Companyās financial instruments are as follows: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Carrying ā ā ā ā Fair Value Measurements Using (Dollars in thousands) Amount Fair Value Level 1 Level 2 Level 3 December 31, 2020 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Assets ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Cash and cash equivalents ā $ 363,543 ā $ 363,543 ā $ 363,543 ā $ ā ā $ ā ā Investment securities available for sale ā ā 3,562 ā ā 3,562 ā ā ā ā ā 3,562 ā ā ā ā Investment securities held to maturity ā 247,642 ā ā 262,841 ā ā ā ā ā 262,841 ā ā ā ā Loans held for sale ā 2,195 ā ā 2,274 ā ā ā ā ā 2,274 ā ā ā ā Loans receivable, net ā 1,406,995 ā ā 1,433,489 ā ā ā ā ā ā ā ā 1,433,489 ā FHLB stock ā 8,144 ā ā 8,144 ā ā ā ā ā 8,144 ā ā ā ā FRB stock ā ā 3,145 ā ā 3,145 ā ā ā ā ā 3,145 ā ā ā ā Accrued interest receivable ā 6,515 ā ā 6,515 ā ā 16 ā ā 627 ā ā 5,872 ā Interest rate contracts ā 38 ā ā 38 ā ā ā ā ā 38 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Liabilities ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Deposits ā 1,659,800 ā ā 1,663,226 ā ā ā ā ā 1,338,022 ā ā 325,204 ā Advances from the Federal Home Loan Bank ā 141,000 ā ā 145,441 ā ā ā ā ā 145,441 ā ā ā ā Securities sold under agreements to repurchase ā 10,000 ā ā 10,466 ā ā ā ā ā 10,466 ā ā ā ā Accrued interest payable ā 35 ā ā 35 ā ā ā ā ā 33 ā ā 2 ā Interest rate contracts ā 38 ā ā 38 ā ā ā ā ā 38 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Assets ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Cash and cash equivalents ā $ 44,806 ā $ 44,806 ā $ 44,806 ā $ ā ā $ ā ā Investment securities available for sale ā ā 8,628 ā ā 8,628 ā ā ā ā ā 8,628 ā ā ā ā Investment securities held to maturity ā 363,883 ā ā 371,305 ā ā ā ā ā 371,305 ā ā ā ā Loans held for sale ā 470 ā ā 480 ā ā ā ā ā 480 ā ā ā ā Loans receivable, net ā 1,584,784 ā ā 1,627,903 ā ā ā ā ā ā ā ā 1,627,903 ā FHLB stock ā 8,723 ā ā 8,723 ā ā ā ā ā 8,723 ā ā ā ā FRB stock ā ā 3,128 ā ā 3,128 ā ā ā ā ā 3,128 ā ā ā ā Accrued interest receivable ā 5,409 ā ā 5,409 ā ā 32 ā ā 952 ā ā 4,425 ā Interest rate contracts ā 5 ā ā 5 ā ā ā ā ā 5 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Liabilities ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Deposits ā 1,631,933 ā ā 1,632,741 ā ā ā ā ā 1,167,990 ā ā 464,751 ā Advances from the Federal Home Loan Bank ā 156,000 ā ā 156,906 ā ā ā ā ā 156,906 ā ā ā ā Securities sold under agreements to repurchase ā 10,000 ā ā 9,968 ā ā ā ā ā 9,968 ā ā ā ā Accrued interest payable ā 397 ā ā 397 ā ā ā ā ā 47 ā ā 350 ā Interest rate contracts ā 5 ā ā 5 ā ā ā ā ā 5 ā ā ā ā ā At December 31, 2020 and 2019, neither the commitment fees received on commitments to extend credit nor the fair value thereof was material to the Consolidated Financial Statements of the Company. ā The table below presents the balance of assets and liabilities measured at fair value on a recurring basis: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā (Dollars in thousands) Level 1 Level 2 Level 3 Total December 31, 2020 ā ā ā ā ā ā ā ā ā ā ā ā ā Interest rate contracts ā assets ā $ ā ā $ 38 ā $ ā ā $ 38 ā Interest rate contracts ā liabilities ā ā ā (38) ā ā ā (38) ā Investment securities available for sale ā ā ā ā ā 3,562 ā ā ā ā ā 3,562 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019 ā ā ā ā ā ā ā ā ā ā ā ā ā Interest rate contracts ā assets ā $ ā ā $ 5 ā $ ā ā $ 5 ā Interest rate contracts ā liabilities ā ā ā (5) ā ā ā (5) ā Investment securities available for sale ā ā ā 8,628 ā ā ā 8,628 ā ā The table below presents the balance of assets measured at fair value on a nonrecurring basis and the related losses: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Fair Value ā ā (Dollars in thousands) Adjustment Date ā Level 1 Level 2 Level 3 Total ā Total Losses ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2020 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Mortgage servicing assets ā 12/31/2020 ā $ ā ā $ ā ā $ 407 ā $ 407 ā $ (73) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Mortgage servicing assets ā 9/30/2019 ā ā ā ā ā ā ā ā 452 ā ā 452 ā ā (16) ā ā Mortgage servicing assets are valued using a discounted cash flow model. Assumptions used in the model include mortgage prepayment speeds, discount rates and cost of servicing. Losses on mortgage servicing assets are included in service fees on loan and deposit accounts in the Consolidated Statements of Income. ā The table below presents the significant unobservable inputs for Level 3 nonrecurring fair value measurements: ā ā ā ā ā ā ā ā ā ā ā ā ā Unobservable Range (Dollars in thousands) Fair Value Valuation Technique Input (Weighted Average) December 31, 2020: ā ā ā ā ā ā ā ā ā ā ā Mortgage servicing assets ā $ 407 ā Discounted cash flow ā Discount rate ā ā 9.25% - 11.25% (10.25%) ā ā ā ā ā ā ā ā Prepayment speed (CPR) ā 10.42 - 19.61 (13.57) ā ā ā ā ā ā ā ā Annual cost to service (per loan, in dollars) ā $ 75 ā December 31, 2019: ā ā ā ā ā ā ā ā ā ā ā Mortgage servicing assets ā $ 452 Discounted cash flow Discount rate ā ā 9.25% - 11.25% (10.25%) ā ā ā ā ā ā ā Prepayment speed (CPR) ā 9.11 - 13.06 (12.58) ā ā ā ā ā ā ā Annual cost to service (per loan, in dollars) ā $ 75 ā ā |
Parent Company Only
Parent Company Only | 12 Months Ended |
Dec. 31, 2020 | |
Parent Company Only | |
Parent Company Only | (28) Parent Company Only ā Presented below are the condensed balance sheet, statement of income, and statement of cash flows for Territorial Bancorp Inc. ā Condensed Balance Sheet ā ā ā ā ā ā ā ā ā ā ā December 31, (Dollars in thousands) 2020 2019 Assets ā ā ā ā ā ā ā Cash ā $ 18,108 ā $ 22,602 ā Investment in Territorial Savings Bank ā 230,566 ā 219,838 ā Receivable from Territorial Savings Bank ā 851 ā 1,377 ā Prepaid expenses and other assets ā 355 ā 233 ā Total assets ā $ 249,880 ā $ 244,050 ā Liabilities and Equity ā ā ā ā ā ā ā Other liabilities ā $ 1,172 ā $ 160 ā Equity ā 248,708 ā 243,890 ā Total liabilities and equity ā $ 249,880 ā $ 244,050 ā ā Condensed Statement of Income ā ā ā ā ā ā ā ā ā ā ā For the Year Ended December 31, (Dollars in thousands) 2020 2019 Interest and dividend income: ā ā ā ā ā ā ā Dividends from Territorial Savings Bank ā $ 8,000 ā $ 21,250 ā Interest-earning deposit with Territorial Savings Bank ā 19 ā 35 ā Total interest and dividend income ā 8,019 ā 21,285 ā ā ā ā ā ā ā ā ā Noninterest expense: ā ā ā ā ā ā ā Salaries ā 43 ā 43 ā Other general and administrative expenses ā 719 ā 676 ā Total noninterest expense ā 762 ā 719 ā ā ā ā ā ā ā ā ā Income before income taxes and equity in undistributed earnings in subsidiaries ā 7,257 ā 20,566 ā ā ā ā ā ā ā ā ā Income taxes ā (217) ā (177) ā ā ā ā ā ā ā ā ā Income before equity in undistributed earnings in subsidiaries ā 7,474 ā 20,743 ā ā ā ā ā ā ā ā ā Equity in undistributed earnings of Territorial Savings Bank, net of dividends ā 11,131 ā 1,252 ā ā ā ā ā ā ā ā ā Net income ā $ 18,605 ā $ 21,995 ā ā Condensed Statement of Cash Flows ā ā ā ā ā ā ā ā ā ā ā For the Year Ended December 31, (Dollars in thousands) 2020 2019 Cash flows from operating activities: ā ā ā ā ā ā ā Net income ā $ 18,605 ā $ 21,995 ā Adjustments to reconcile net income to net cash provided by operating activities: ā ā ā ā ā ā ā Equity in undistributed earnings of Territorial Savings Bank, net of dividends ā (11,131) ā (1,252) ā Net decrease in prepaid expenses and other assets ā 1,583 ā 683 ā Net decrease in other liabilities ā (151) ā (97) ā Net cash provided by operating activities ā 8,906 ā 21,329 ā ā ā ā ā ā ā ā ā Cash flows from investing activities: ā ā ā ā ā ā ā Investment in Territorial Savings Bank ā ā ā ā ā Net cash used in investing activities ā ā ā ā ā ā ā ā ā ā ā ā ā Cash flows from financing activities: ā ā ā ā ā ā ā Proceeds from issuance of common stock ā ā ā 170 ā Repurchases of common stock ā (5,000) ā (1,597) ā Cash dividends paid ā (8,400) ā (13,689) ā Net cash used in financing activities ā (13,400) ā (15,116) ā Net (decrease) increase in cash ā (4,494) ā 6,213 ā Cash at beginning of the period ā 22,602 ā 16,389 ā Cash at end of the period ā $ 18,108 ā $ 22,602 ā ā |
Unaudited Quarterly Financial I
Unaudited Quarterly Financial Information | 12 Months Ended |
Dec. 31, 2020 | |
Unaudited Quarterly Financial Information | |
Unaudited Quarterly Financial Information | (29) Unaudited Quarterly Financial Information ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā First Second Third Fourth ā ā ā Quarter ā Quarter ā Quarter ā Quarter ā Full Year ā ā (Dollars in thousands, except per share data) 2020: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Interest income ā $ 18,581 ā $ 18,005 ā $ 17,131 ā $ 16,040 ā $ 69,757 ā Interest expense ā 4,064 ā 3,239 ā 2,667 ā 2,221 ā 12,191 ā Net interest income ā 14,517 ā 14,766 ā 14,464 ā 13,819 ā 57,566 ā Provision (reversal of provision) for loan losses ā 217 ā 1,395 ā 692 ā (679) ā 1,625 ā Net interest income after provision for loan losses ā 14,300 ā 13,371 ā 13,772 ā 14,498 ā 55,941 ā Noninterest income ā 1,301 ā 1,461 ā 1,577 ā 2,465 ā 6,804 ā Noninterest expense ā 9,538 ā 8,971 ā 9,386 ā 9,530 ā 37,425 ā Income before income taxes ā 6,063 ā 5,861 ā 5,963 ā 7,433 ā 25,320 ā Income taxes ā 1,590 ā 1,570 ā 1,645 ā 1,910 ā 6,715 ā Net income ā 4,473 ā 4,291 ā 4,318 ā 5,523 ā 18,605 ā Basic earnings per share ā 0.48 ā 0.47 ā 0.47 ā 0.61 ā 2.03 ā Diluted earnings per share ā 0.48 ā 0.47 ā 0.47 ā 0.59 ā 2.01 ā Cash dividends declared per common share ā 0.23 ā 0.23 ā 0.23 ā 0.33 ā 1.02 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā First Second Third Fourth ā ā ā ā Quarter ā Quarter ā Quarter ā Quarter ā Full Year ā ā (Dollars in thousands, except per share data) 2019: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Interest income ā $ 18,705 ā $ 19,114 ā $ 18,948 ā $ 18,801 ā $ 75,568 ā Interest expense ā 3,869 ā 4,452 ā 4,397 ā 4,309 ā 17,027 ā Net interest income ā 14,836 ā 14,662 ā 14,551 ā 14,492 ā 58,541 ā Provision (reversal of provision) for loan losses ā 5 ā (51) ā 111 ā (4) ā 61 ā Net interest income after provision for loan losses ā 14,831 ā 14,713 ā 14,440 ā 14,496 ā 58,480 ā Noninterest income ā 3,440 ā 1,273 ā 2,102 ā 1,017 ā 7,832 ā Noninterest expense ā 9,774 ā 9,511 ā 9,401 ā 9,320 ā 38,006 ā Income before income taxes ā 8,497 ā 6,475 ā 7,141 ā 6,193 ā 28,306 ā Income taxes ā 1,973 ā 1,415 ā 1,775 ā 1,148 ā 6,311 ā Net income ā 6,524 ā 5,060 ā 5,366 ā 5,045 ā 21,995 ā Basic earnings per share ā 0.71 ā 0.55 ā 0.58 ā 0.54 ā 2.38 ā Diluted earnings per share ā 0.70 ā 0.54 ā 0.57 ā 0.53 ā 2.34 ā Cash dividends declared per common share ā 0.22 ā 0.32 ā 0.22 ā 0.73 ā 1.49 ā ā |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events | |
Subsequent Events | (30) Subsequent Events ā On January 28, 2021, the Board of Directors of Territorial Bancorp Inc. declared a quarterly cash dividend of $0.23 per share of common stock. The dividend was paid on February 25, 2021 to stockholders of record as of February 11, 2021. ā |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | ā (b) Principles of Consolidation ā The Consolidated Financial Statements include the accounts and results of operations of Territorial Bancorp Inc. and Territorial Savings Bank and its wholly-owned subsidiaries. Significant intercompany balances and transactions have been eliminated in consolidation. |
Cash and Cash Equivalents | (c) Cash and Cash Equivalents ā Cash and cash equivalents includes cash and due from banks, interest-bearing deposits in other banks, federal funds sold, and short-term, highly liquid investments with original maturities of three months or less. |
Investment Securities | ā (d) Investment Securities ā The Company classifies and accounts for its investment securities as follows: (1) held-to-maturity debt securities in which the Company has the positive intent and ability to hold to maturity are reported at amortized cost; (2) trading securities that are purchased for the purpose of selling in the near term are reported at fair value, with unrealized gains and losses included in current earnings; and (3) available-for-sale securities not classified as either held-to-maturity or trading securities are reported at fair value, with unrealized gains and losses excluded from current earnings and reported as a separate component of equity. At December 31, 2020 and 2019, the Company classified all of its investments, except $3.6 million and $8.6 million of securities, respectively, as held-to-maturity. ā A decline in the market value of any available-for-sale or held-to-maturity security below cost, that is deemed to be other than temporary, results in an impairment to reduce the carrying amount to fair value. To determine whether impairment is other than temporary, the Company considers the type of the investment, the cause of the decline in value and the amount and duration of the decline in value. It also considers whether it has the intent and ability not to sell and would not be required to sell for a sufficient period of time to recover the remaining amortized cost basis. ā Gains or losses on the sale of investment securities are computed using the specific-identification method. The Company amortizes premiums and accretes discounts associated with investment securities using the interest method over the contractual life of the respective investment security. Such amortization and accretion is included in the interest income line item in the Consolidated Statements of Income. Interest income is recognized when earned. ā (e) Loans Receivable ā This policy applies to all loan classes. Loans receivable are stated at the principal amount outstanding, less the allowance for loan losses, loan origination fees and costs, and commitment fees. Interest on loans receivable is accrued as earned. The Company has a policy of placing loans on a nonaccrual basis when 90 days or more contractually delinquent or when, in the opinion of management, collection of all or part of the principal balance appears doubtful. For nonaccrual loans, the Company records payments received as a reduction in principal. The Company, considering current information and events regarding the borrowersā ability to repay their obligations, considers a loan to be impaired when it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. When a loan is considered to be impaired, the amount of the impairment is measured based on the present value of expected future cash flows discounted at the loanās effective interest rate or, if the loan is considered to be collateral dependent, based on the fair value of the collateral less estimated costs to sell. Impairment losses are written off against the allowance for loan losses. For nonaccrual impaired loans, the Company records payments received as a reduction in principal. A nonaccrual loan may be restored to an accrual basis when principal and interest payments are current and full payment of principal and interest is expected. |
Loans Receivable | ā |
Loans Held for Sale | ā (f) Loans Held for Sale ā Loans held for sale are stated at the lower of aggregate cost or market value. Net fees and costs of originating loans held for sale are deferred and are included in the basis for determining the gain or loss on sales of loans held for sale. |
Deferred Loan Origination Fees and Unearned Loan Discounts | ā (g) Deferred Loan Origination Fees and Unearned Loan Discounts ā Loan origination and commitment fees and certain direct loan origination costs are being deferred, and the net amount is recognized over the life of the related loan as an adjustment to yield. Net deferred loan fees are amortized using the interest method over the contractual term of the loan, adjusted for actual prepayments. Net unamortized fees on loans paid in full are recognized as a component of interest income. |
Real Estate Owned | ā (h) Real Estate Owned ā Real estate owned is valued at the time of foreclosure at fair value, less estimated cost to sell, thereby establishing a new cost basis. The Company obtains appraisals based on recent comparable sales to assist management in estimating the fair value of real estate owned. Subsequent to acquisition, real estate owned is valued at the lower of cost or fair value, less estimated cost to sell. Declines in value are charged to expense through a direct write-down of the asset. Costs related to holding real estate are charged to expense while costs related to development and improvements are capitalized. Net gains or losses recognized on the sale of real estate owned are included in other general and administrative expenses. ā |
Allowance for Loan Losses | (i) Allowance for Loan Losses ā The Company maintains an allowance adequate to cover managementās estimate of probable loan losses as of the balance sheet date. The Companyās allowance for loan losses is maintained at a level considered adequate to provide for losses that can be estimated based upon specific and general conditions. All loan losses are charged, and all recoveries are credited, to the allowance for loan losses. Additions to the allowance for loan losses are provided by charges to income based on various factors, which, in the Companyās judgment, deserve current recognition in estimating probable losses. Charge-offs to the allowance are made when management determines that collectability of all or a portion of a loan is doubtful and available collateral is insufficient to repay the loan. ā General allowances are established for loan losses on a portfolio basis for loans that do not meet the definition of impaired, in accordance with the Receivables topic of the FASB ASC. The portfolio is grouped into similar risk characteristics, primarily loan type and loan-to-value ratio. The Company applies an estimated loss rate to each loan group. The loss rates applied are based upon its loss experience adjusted, as appropriate, for qualitative and environmental factors discussed below. This evaluation is inherently subjective, as it requires material estimates that may be susceptible to significant revisions based upon changes in economic and real estate market conditions. Actual loan losses may be significantly more than the allowance for loan losses the Company has established, which could have a material negative effect on its financial results. ā Residential mortgage loans represent the largest segment of the Companyās loan portfolio. Residential mortgage loans are secured by a first mortgage on residential real estate in Hawaii and consist primarily of fixed-rate mortgage loans which have been underwritten to Freddie Mac and Fannie Mae guidelines and have similar risk characteristics. The loan loss allowance is determined by first calculating the historical loss rate for this segment of the portfolio. The loss rate may be adjusted for qualitative and environmental factors. The allowance for loan loss is calculated by multiplying the adjusted loss rate by the total loans in this segment of the portfolio. ā The adjustments to historical loss experience are based on an evaluation of several qualitative and environmental factors, including: ā ā changes in lending policies and procedures, including changes in underwriting standards and collections, charge-off and recovery practices; ā ā changes in international, national, and local economic trends; ā ā changes in the bankās internal loan review system; ā ā changes in the experience and ability of personnel in the mortgage loan origination and loan servicing departments; ā ā changes in the number and amount of delinquent loans and classified assets; ā ā changes in the type and volume of loans being originated; ā ā changes in the value of underlying collateral for collateral dependent loans; ā ā changes in any concentration of credit; and ā ā external factors such as competition, legal and regulatory requirements on the level of estimated credit losses in the existing loan portfolio. ā The Company also uses historical loss rates adjusted for qualitative and environmental factors to establish loan loss allowances for the following portfolio segments: ā ā home equity loans and lines of credit; and ā ā consumer and other loans. ā The Company has a limited loss experience for the construction, commercial and other mortgage segment of the loan portfolio. The loan loss allowance on this portfolio segment is determined using the loan loss rate of other financial institutions in the State of Hawaii. The allowance for loan loss is calculated by multiplying the loan loss rate of other financial institutions in the state by the total loans in this segment of the Companyās loan portfolio. ā The allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories. In addition, the unallocated allowance is established to provide for probable losses that have been incurred as of the reporting date but are not reflected in the allocated allowance. ā While the Company uses the best information available to make evaluations, future adjustments to the allowance may be necessary if conditions differ substantially from the information used in making the evaluations. In addition, as an integral part of their examination process, the bank regulators will periodically review the allowance for loan losses. The bank regulators may require the Company to increase the allowance based on their analysis of information available at the time of their examination. |
Transfer of Financial Assets | ā (j) Transfer of Financial Assets ā Transfers of financial assets are accounted for as sales when control is surrendered. Control is surrendered when the assets have been isolated from the Company, the transferee obtains the right to pledge or exchange the assets without constraint, and the Company does not maintain effective control over the transferred assets. Mortgage loans sold for cash are accounted for as sales as the above criteria have been met. ā Mortgage loans may also be packaged into securities that are issued and guaranteed by U.S. government-sponsored enterprises or a U.S. government agency. The Company receives 100% of the mortgage-backed securities issued. The mortgage-backed securities received in securitizations are valued at fair value and classified as held-to-maturity. A gain or loss in the securitization transactions is recognized for the difference between the fair value of the mortgage-backed securities received and the amortized cost of the loans securitized. ā Mortgage loan transfers accounted for as sales and securitizations are without recourse, except for normal representations and warranties provided in sales transactions, and the Company may retain the related rights to service the loans. The retained servicing rights create mortgage servicing assets that are accounted for in accordance with the Transfers and Servicing topic of the FASB ASC. Mortgage servicing assets are initially valued at fair value and subsequently at the lower of cost or fair value and are amortized in proportion to and over the period of estimated net servicing income. The Company uses a discounted cash flow model to determine the fair value of retained mortgage servicing rights. |
Premises and Equipment | ā (k) Premises and Equipment ā Premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is principally computed on the straight-line method over the estimated useful lives of the respective assets. The estimated useful life of buildings and improvements is 30 years, furniture, fixtures, and equipment is 3 to 10 years, and automobiles are 3 years. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or estimated useful life of the asset. |
Income Taxes | ā (l) Income Taxes ā The Company files consolidated federal income tax and consolidated state franchise tax returns. ā Deferred tax assets and liabilities are recognized using the asset and liability method of accounting for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and net operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. ā We establish income tax contingency reserves for potential tax liabilities related to uncertain tax positions. A liability for income tax uncertainties would be recorded for unrecognized tax benefits related to uncertain tax positions where it is more likely than not that the position will be sustained upon examination by a taxing authority. ā As of December 31, 2020 and 2019, the Company had not recognized a liability for income tax uncertainties in the accompanying Consolidated Balance Sheets because management concluded that the Company does not have uncertain tax positions. ā The Company recognizes interest and penalties related to tax liabilities in other interest expense and other general and administrative expenses, respectively, in the Consolidated Statements of Income. ā Tax years 2017 to 2019 currently remain subject to examination by the Internal Revenue Service and by the Department of Taxation of the State of Hawaii. |
Impairment of Long-Lived Assets | ā (m) Impairment of Long-Lived Assets ā Long-lived assets, such as premises and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the Consolidated Balance Sheets and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. |
Pension Plan | ā (n) Pension Plan ā Pension benefit costs (returns) are charged (credited) to salaries and employee benefits expense or other general and administrative expenses, and the corresponding prepaid (accrued) pension cost is recorded in prepaid expenses and other assets or accounts payable and accrued expenses in the Consolidated Balance Sheets. The Companyās policy is to fund pension costs in amounts that will not be less than the minimum funding requirements of the Employee Retirement Income Security Act of 1974 and will not exceed the maximum tax-deductible amounts. The Company generally funds at least the net periodic pension cost, subject to limits and targeted funded status as determined with the consulting actuary. ā |
Share-Based Compensation | (o) Share-Based Compensation ā The Company grants share-based compensation awards, including restricted stock and restricted stock units, which are either performance-based or time-based. The fair value of the restricted stock and restricted stock unit awards were based on the closing price of the Companyās stock on the date of grant. The cost of these awards are amortized in the Consolidated Statements of Income on a straight-line basis over the vesting period. The amount of performance-based restricted stock units that vest on a performance condition is remeasured quarterly based on how the Companyās return on average equity compares to the SNL Bank Index. The fair value of performance-based restricted stock units that are based on how the Companyās total stock return compares to the SNL Bank Index was measured using a Monte-Carlo valuation. ā |
Supplemental Employee Retirement Plan (SERP) | (p) Supplemental Employee Retirement Plan (SERP) ā The SERP is a noncontributory supplemental retirement plan covering certain current and former employees of the Company. Benefits in the SERP plan are paid after retirement, in addition to the benefits provided by the Pension Plan. The Company accrues SERP costs over the estimated period until retirement by charging salaries and employee benefits expense in the Consolidated Statements of Income, with a corresponding credit to accounts payable and accrued expenses in the Consolidated Balance Sheets. ā |
Employee Stock Ownership Plan (ESOP) | (q) Employee Stock Ownership Plan (ESOP) ā The cost of shares issued to the ESOP, but not yet allocated to participants, is shown as a reduction of stockholdersā equity. Compensation expense is based on the market price of shares as they are committed to be released to participant accounts. Dividends on allocated ESOP shares reduce retained earnings; dividends on unearned ESOP shares reduce debt and accrued interest. ā |
Earnings Per Share | (r) Earnings Per Share ā We have two forms of our outstanding common stock: common stock and unvested restricted stock awards. Holders of unvested restricted stock awards receive dividends at the same rate as common shareholders and they both share equally in undistributed earnings. Unvested restricted stock awards that are time-based contain nonforfeitable rights to dividends or dividend equivalents are considered to be participating securities in the earnings per share computation using the two-class method. Under the two-class method, earnings are allocated to common shareholders and participating securities according to their respective rights to earnings. Unvested restricted stock awards that vest based on performance or market conditions are not considered to be participating securities in the earnings per share calculation because accrued dividends on shares that do not vest are forfeited. ā Basic earnings per share is computed by dividing net income allocated to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income allocated to common shareholders by the sum of the weighted-average number of shares outstanding plus the dilutive effect of stock options and restricted stock. ESOP shares not committed to be released are not considered outstanding. ā |
Common Stock Repurchase Program | (s) Common Stock Repurchase Program ā The Company adopted common stock repurchase programs in which shares repurchased reduce the amount of shares issued and outstanding. The repurchased shares may be reissued in connection with share-based compensation plans and for general corporate purposes. During 2020 and 2019, the Company repurchased , respectively, as part of the repurchase programs authorized by the Board of Directors. |
Bank-Owned Life Insurance | ā (t) Bank-Owned Life Insurance ā The Companyās investment in bank-owned life insurance is based on cash surrender value. The Company invests in bank-owned life insurance to provide a funding source for benefit plan obligations. Bank-owned life insurance also generally provides noninterest income that is nontaxable. Federal regulations generally limit the investment in bank-owned life insurance to of the Bankās Tier 1 capital plus the allowance for loan losses. At December 31, 2020, this limit was |
Leases | (u) Leases ā The Company records a right-of-use (ROU) asset for those leases that convey rights to control use of identified assets for a period of time in exchange for consideration. The Company is also required to record a lease liability for the present value of future payment commitments. The Company leases most of its premises and some vehicles and equipment under operating leases expiring on various dates through 2030. The majority of lease agreements relate to real estate and generally provide that the Company pay taxes, insurance, maintenance and certain other variable operating expenses applicable to the leased premises. Variable lease components and nonlease components are not included in the Companyās computation of the ROU asset or lease liability. The Company also does not include short-term leases in the computation of the ROU asset or lease liability. Short-term leases are leases with a term at commencement of 12 months or less. Short-term lease expense is recorded on a straight-line basis over the term of the lease. Lease agreements do not contain any residual value guarantees or restrictive covenants. ā The value of the ROU asset and lease liability is impacted by the amount of the periodic payment required, length of the lease term, and the discount rate used to calculate the present value of the minimum lease payments. Certain leases have renewal options at the expiration of the lease terms. Generally, option periods are not included in the computation of the lease term, ROU asset or lease liability because the Company is not reasonably certain to exercise renewal options at the expiration of the lease terms. Because the discount rates implicit in our leases are not known, discount rates have been estimated using the rates for fixed-rate, amortizing advances from the Federal Home Loan Bank (FHLB) for the approximate terms of the leases. |
Use of Estimates | (v) Use of Estimates ā The preparation of the Consolidated Financial Statements requires management to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amount of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include the allowance for loan losses; valuation of certain investment securities and determination as to whether declines in fair value below amortized cost are other than temporary; valuation allowances for deferred income tax assets; mortgage servicing assets; and assets and obligations related to employee benefit plans. Accordingly, actual results could differ from those estimates. |
Recently Issued Accounting Pronouncements | ā (w) Recently Issued Accounting Pronouncements ā In June 2016, the Financial Accounting Standards Board (FASB) amended various sections of the FASB Accounting Standards Codification (ASC) related to the accounting for credit losses on financial instruments. The amendment changes the threshold for recognizing losses from a āprobableā to an āexpectedā model. The new model is referred to as the current expected credit loss model and applies to loans, leases, held-to-maturity investments, loan commitments and financial guarantees. The amendment requires the measurement of all expected credit losses for financial assets as of the reporting date (including historical experience, current conditions and reasonable and supportable forecasts) and enhanced disclosures that will help financial statement users understand the estimates and judgments used in estimating credit losses and evaluating the credit quality of an organizationās portfolio. The amendment is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. In November 2019, the FASB issued an update that delays the effective date of the amendment for smaller reporting companies, as defined by the Securities and Exchange Commission, to fiscal years beginning after December 15, 2022. The Company is a smaller reporting company. The Company will apply the amendmentās provisions as a cumulative-effect adjustment to retained earnings at the beginning of the first period the amendment is effective. The Company has formed a team that is working on an implementation plan to adopt the amendment. The implementation plan will include developing policies, procedures and internal controls over the model. The Company is also working with a software vendor to measure expected losses required by the amendment. The Company is currently evaluating the effects that the adoption of this amendment will have on its consolidated financial statements and expects that the portfolio composition and economic conditions at the time of adoption will influence the accounting adjustment made at the time the amendment is adopted. ā In August 2018, the FASB amended the Fair Value Measurement topic of the FASB ASC. The amendment affects disclosures only, and includes additions, deletions and modifications of the disclosures of assets and liabilities reported in the fair value hierarchy. The amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. Entities are allowed to early adopt any removed or modified disclosures while delaying adoption of any added disclosures until the effective date. The Company adopted this amendment as of January 1, 2020 and it did not have a material effect on its consolidated financial statements. ā In August 2018, the FASB amended the Compensation ā Retirement Benefits topic of the FASB ASC. The amendment affects disclosures related to defined benefit pension or other post retirement plans and includes additions, deletions and clarifications of disclosures. The amendment is effective for fiscal years ending after December 15, 2020, with early adoption permitted. The Company adopted this amendment as of December 31, 2020 and it did not have a material effect on its consolidated financial statements. ā The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed by Congress and signed into law by the President on March 27, 2020. The CARES Act provides relief to financial institutions from categorizing eligible loan modifications as troubled debt restructurings over the remaining life of the modified loan. Eligible loan modifications under the CARES Act must be related to the COVID-19 pandemic and the borrower must not have been more than 30 days past due as of December 31, 2019. Loan modifications under the CARES Act must be executed during the period from March 1, 2020 to the earlier of December 31, 2020 or 60 days after the end of the national emergency. On December 21, 2020, the President signed legislation which extended the troubled debt restructuring relief provisions of the CARES Act to January 1, 2022. Banking regulators issued similar guidance, which also clarified that a COVID-19 loan modification should not be considered a troubled debt restructuring if the borrower was not more than 30 days past due on payments at the time the loan modification program was implemented and the modification is considered short-term (not to exceed six months). |
Cash and Cash Equivalents (Tabl
Cash and Cash Equivalents (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Cash and Cash Equivalents | |
Schedule of balances of cash and cash equivalents | ā ā ā ā ā ā ā ā ā December 31, (Dollars in thousands) 2020 2019 Cash and due from banks ā $ 14,355 ā $ 9,571 ā Interest-earning deposits in other banks ā 349,188 ā 35,235 ā Cash and cash equivalents ā $ 363,543 ā $ 44,806 ā ā |
Investment Securities (Tables)
Investment Securities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Investment Securities. | |
Schedule of amortized cost and fair values of investment securities | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Amortized ā Gross Unrealized ā Estimated (Dollars in thousands) Cost Gains Losses Fair Value December 31, 2020: ā ā ā ā ā ā ā ā ā ā ā ā ā Available-for-sale: ā ā ā ā ā ā ā ā ā ā ā ā ā U.S. government-sponsored mortgage-backed securities ā $ 3,185 ā $ 377 $ ā ā $ 3,562 ā Total ā $ 3,185 ā $ 377 $ ā ā $ 3,562 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Held-to-maturity: ā ā ā ā ā ā ā ā ā ā ā ā ā U.S. government-sponsored mortgage-backed securities ā $ 247,642 ā $ 15,200 $ (1) ā $ 262,841 ā Total ā $ 247,642 ā $ 15,200 $ (1) ā $ 262,841 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019: ā ā ā ā ā ā ā ā ā ā ā ā ā Available-for-sale: ā ā ā ā ā ā ā ā ā ā ā ā ā U.S. government-sponsored mortgage-backed securities ā $ 7,905 ā $ 723 $ ā ā $ 8,628 ā Total ā $ 7,905 ā $ 723 $ ā ā $ 8,628 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Held-to-maturity: ā ā ā ā ā ā ā ā ā ā ā ā ā U.S. government-sponsored mortgage-backed securities ā $ 363,883 ā $ 8,436 $ (1,014) ā $ 371,305 ā Total ā $ 363,883 ā $ 8,436 $ (1,014) ā $ 371,305 ā ā |
Schedule of amortized cost and estimated fair value of investment securities by maturity | ā ā ā ā ā ā ā ā ā Amortized Estimated (Dollars in thousands) Cost Fair Value Available-for-sale: ā ā ā ā ā ā ā Due within 5 years ā $ ā ā $ ā ā Due after 5 years through 10 years ā ā ā ā ā Due after 10 years ā 3,185 ā 3,562 ā Total ā $ 3,185 ā $ 3,562 ā ā ā ā ā ā ā ā ā Held-to-maturity: ā ā ā ā ā ā ā Due within 5 years ā $ ā ā $ ā ā Due after 5 years through 10 years ā 59 ā 58 ā Due after 10 years ā 247,583 ā 262,783 ā Total ā $ 247,642 ā $ 262,841 ā ā ā ā ā ā ā ā ā ā |
Schedule of realized gains and losses and proceeds from sales of securities held to maturity | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā (Dollars in thousands) 2020 2019 Proceeds from sales ā $ 20,531 ā $ 8,644 Gross gains ā 1,320 ā 2,910 Gross losses ā ā ā ā |
Summary of investment securities in an unrealized loss position | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Less Than 12 Months 12 Months or Longer Total Unrealized Unrealized Number of Unrealized Description of securities Fair Value Losses Fair Value Losses Securities Fair Value Losses (Dollars in thousands) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2020: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Held-to-maturity: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā U.S. government-sponsored mortgage-backed securities ā $ 678 ā $ (1) ā $ 4 ā $ ā 6 ā $ 682 ā $ (1) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Held-to-maturity: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā U.S. government-sponsored mortgage-backed securities ā $ 55,882 ā $ (302) ā $ 34,492 ā $ (712) 30 ā $ 90,374 ā $ (1,014) ā ā |
Loans Receivable and Allowanc_2
Loans Receivable and Allowance for Loan Losses (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Loans Receivable and Allowance for Loan Losses | |
Schedule of components of loans receivable | ā ā ā ā ā ā ā ā ā ā ā December 31, (Dollars in thousands) 2020 2019 Real estate loans: ā ā ā ā ā ā ā First mortgages: ā ā ā ā ā ā ā One- to four-family residential ā $ 1,366,507 ā $ 1,536,781 ā Multi-family residential ā 7,245 ā 9,965 ā Construction, commercial and other ā 19,074 ā 23,382 ā Home equity loans and lines of credit ā 9,376 ā 10,084 ā Total real estate loans ā 1,402,202 ā 1,580,212 ā Other loans: ā ā ā ā ā ā ā Loans on deposit accounts ā 235 ā 235 ā Consumer and other loans ā 10,086 ā 9,484 ā Total other loans ā 10,321 ā 9,719 ā Less: ā ā ā ā ā ā ā Net unearned fees and discounts ā (1,266) ā (2,435) ā Allowance for loan losses ā (4,262) ā (2,712) ā Total unearned fees, discounts and allowance for loan losses ā (5,528) ā (5,147) ā Loans receivable, net ā $ 1,406,995 ā $ 1,584,784 ā ā |
Schedule of activity in allowance for loan losses on loans receivable and by portfolio segment | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Construction, Home Commercial Equity and Other Loans and Residential Mortgage Lines of Consumer (Dollars in thousands) Mortgage Loans Credit and Other Unallocated Totals Year ended December 31, 2020: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Balance, beginning of year ā $ 1,741 ā $ 511 ā $ 1 ā $ 54 ā $ 405 ā $ 2,712 ā Provision (reversal of provision) for loan losses ā 1,361 ā (105) ā (10) ā 177 ā 202 ā 1,625 ā ā ā 3,102 ā 406 ā (9) ā 231 ā 607 ā 4,337 ā Charge-offs ā ā ā ā ā ā ā (92) ā ā ā (92) ā Recoveries ā ā ā ā ā 10 ā 7 ā ā ā 17 ā Net recoveries (charge-offs) ā ā ā ā ā 10 ā (85) ā ā ā (75) ā Balance, end of year ā $ 3,102 ā $ 406 ā $ 1 ā $ 146 ā $ 607 ā $ 4,262 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Year ended December 31, 2019: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Balance, beginning of year ā $ 1,797 ā $ 443 ā $ 1 ā $ 47 ā $ 354 ā $ 2,642 ā (Reversal of provision) provision for loan losses ā (84) ā 68 ā ā ā 26 ā 51 ā 61 ā ā ā 1,713 ā 511 ā 1 ā 73 ā 405 ā 2,703 ā Charge-offs ā (8) ā ā ā ā ā (40) ā ā ā (48) ā Recoveries ā 36 ā ā ā ā ā 21 ā ā ā 57 ā Net recoveries (charge-offs) ā 28 ā ā ā ā ā (19) ā ā ā 9 ā Balance, end of year ā $ 1,741 ā $ 511 ā $ 1 ā $ 54 ā $ 405 ā $ 2,712 ā |
Schedule of balance in allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Construction, Home Commercial Equity and Other Loans and Residential Mortgage Lines of Consumer (Dollars in thousands) Mortgage Loans Credit and Other Unallocated Totals December 31, 2020: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Allowance for loan losses: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Ending allowance balance: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Individually evaluated for impairment ā $ ā ā $ ā ā $ ā ā $ ā ā $ ā ā $ ā ā Collectively evaluated for impairment ā 3,102 ā 406 ā 1 ā 146 ā 607 ā 4,262 ā Total ending allowance balance ā $ 3,102 ā $ 406 ā $ 1 ā $ 146 ā $ 607 ā $ 4,262 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Loans: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Ending loan balance: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Individually evaluated for impairment ā $ 4,947 ā $ ā ā $ 23 ā $ ā ā $ ā ā $ 4,970 ā Collectively evaluated for impairment ā 1,367,576 ā 19,024 ā 9,353 ā 10,334 ā ā ā 1,406,287 ā Total ending loan balance ā $ 1,372,523 ā $ 19,024 ā $ 9,376 ā $ 10,334 ā $ ā ā $ 1,411,257 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Allowance for loan losses: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Ending allowance balance: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Individually evaluated for impairment ā $ ā ā $ ā ā $ ā ā $ ā ā $ ā ā $ ā ā Collectively evaluated for impairment ā 1,741 ā 511 ā 1 ā 54 ā 405 ā 2,712 ā Total ending allowance balance ā $ 1,741 ā $ 511 ā $ 1 ā $ 54 ā $ 405 ā $ 2,712 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Loans: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Ending loan balance: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Individually evaluated for impairment ā $ 1,224 ā $ ā ā $ 89 ā $ ā ā $ ā ā $ 1,313 ā Collectively evaluated for impairment ā 1,543,125 ā 23,326 ā 9,997 ā 9,735 ā ā ā 1,586,183 ā Total ending loan balance ā $ 1,544,349 ā $ 23,326 ā $ 10,086 ā $ 9,735 ā $ ā ā $ 1,587,496 ā ā |
Schedule of balance of impaired loans individually evaluated for impairment by class of loans | ā ā ā ā ā ā ā ā ā Unpaid Recorded Principal (Dollars in thousands) Investment Balance December 31, 2020: ā ā ā ā ā ā ā With no related allowance recorded: ā ā ā ā ā ā ā One- to four-family residential mortgages ā $ 4,947 ā $ 5,425 ā Home equity loans and lines of credit ā 23 ā 32 ā Total ā $ 4,970 ā $ 5,457 ā ā ā ā ā ā ā ā ā December 31, 2019: ā ā ā ā ā ā ā With no related allowance recorded: ā ā ā ā ā ā ā One- to four-family residential mortgages ā $ 1,224 ā $ 1,615 ā Home equity loans and lines of credit ā ā 89 ā ā 178 ā Total ā $ 1,313 ā $ 1,793 ā ā |
Schedule of average recorded investment and interest income recognized on impaired loans by class of loans | ā ā ā ā ā ā ā ā ā Average Recorded Interest Income (Dollars in thousands) Investment Recognized 2020: ā ā ā ā ā ā ā With no related allowance recorded: ā ā ā ā ā ā ā One- to four-family residential mortgages ā $ 5,012 ā $ 33 ā Home equity loans and lines of credit ā 24 ā ā ā Total ā $ 5,036 ā $ 33 ā ā ā ā ā ā ā ā ā 2019: ā ā ā ā ā ā ā With no related allowance recorded: ā ā ā ā ā ā ā One- to four-family residential mortgages ā $ 1,272 ā $ 34 ā Home equity loans and lines of credit ā 98 ā ā ā Total ā $ 1,370 ā $ 34 ā ā |
Schedule of aging of loans and accrual status by class of loans | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Loans 90 Days or More 30 - 59 60 - 89 90 Days or Past Due Days Past Days Past More Total Past Loans Not Total Nonaccrual and Still (Dollars in thousands) Due Due Past Due Due Past Due Loans Loans Accruing December 31, 2020: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā One- to four-family residential mortgages ā $ 376 ā $ 152 ā $ 240 ā $ 768 ā $ 1,364,527 ā $ 1,365,295 ā $ 4,382 ā $ ā ā Multi-family residential mortgages ā ā ā ā ā ā ā ā ā 7,228 ā 7,228 ā ā ā ā ā Construction, commercial and other mortgages ā ā ā ā ā ā ā ā ā 19,024 ā 19,024 ā ā ā ā ā Home equity loans and lines of credit ā ā ā 23 ā ā ā 23 ā 9,353 ā 9,376 ā 23 ā ā ā Loans on deposit accounts ā ā ā ā ā ā ā ā ā 235 ā 235 ā ā ā ā ā Consumer and other ā 1 ā ā ā ā ā 1 ā 10,098 ā 10,099 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Total ā $ 377 ā $ 175 ā $ 240 ā $ 792 ā $ 1,410,465 ā $ 1,411,257 ā $ 4,405 ā $ ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā One- to four-family residential mortgages ā $ ā ā $ 959 ā $ ā ā $ 959 ā $ 1,533,446 ā $ 1,534,405 ā $ 647 ā $ ā ā Multi-family residential mortgages ā ā ā ā ā ā ā ā ā 9,944 ā 9,944 ā ā ā ā ā Construction, commercial and other mortgages ā ā ā ā ā ā ā ā ā 23,326 ā 23,326 ā ā ā ā ā Home equity loans and lines of credit ā ā ā 26 ā ā ā 26 ā 10,060 ā 10,086 ā 89 ā ā ā Loans on deposit accounts ā ā ā ā ā ā ā ā ā 235 ā 235 ā ā ā ā ā Consumer and other ā 33 ā 1 ā 1 ā 35 ā 9,465 ā 9,500 ā ā ā 1 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Total ā $ 33 ā $ 986 ā $ 1 ā $ 1,020 ā $ 1,586,476 ā $ 1,587,496 ā $ 736 ā $ 1 ā ā |
Summary of troubled debt restructurings by class of loan | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Number of Accrual Number of Nonaccrual ā (Dollars in thousands) Loans Status Loans Status Total December 31, 2020: ā ā ā ā ā ā ā ā ā ā One- to four-family residential mortgages ā 3 ā $ 565 ā ā 2 ā $ 467 ā $ 1,032 Total ā 3 ā $ 565 ā ā 2 ā $ 467 ā $ 1,032 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019: ā ā ā ā ā ā ā ā ā ā ā ā ā ā One- to four-family residential mortgages ā 3 ā $ 577 ā ā 2 ā $ 525 ā $ 1,102 Home equity loans and lines of credit ā ā ā ā ā 1 ā 64 ā 64 Total ā 3 ā $ 577 ā ā 3 ā $ 589 ā $ 1,166 |
Accrued Interest Receivable (Ta
Accrued Interest Receivable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accrued Interest Receivable | |
Schedule of components of accrued interest receivable | ā ā ā ā ā ā ā ā ā ā ā December 31, (Dollars in thousands) 2020 2019 Loans receivable ā $ 5,872 ā $ 4,425 ā Investment securities ā ā 627 ā ā 952 ā Interest-bearing deposits ā 16 ā 32 ā Total ā $ 6,515 ā $ 5,409 ā |
Mortgage Servicing Assets (Tabl
Mortgage Servicing Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Mortgage Servicing Assets. | |
Schedule of changes in mortgage servicing assets | ā ā ā ā ā ā ā ā ā (Dollars in thousands) 2020 2019 Balance at beginning of year ā $ 503 ā $ 226 ā Additions ā 78 ā 344 ā Impairments ā (73) ā (16) ā Amortization ā (101) ā (51) ā Balance at end of year ā $ 407 ā $ 503 ā |
Schedule of gross carrying values, accumulated amortization, and net carrying values of mortgage servicing assets | ā ā ā ā ā ā ā ā ā ā ā December 31, (Dollars in thousands) 2020 2019 Gross carrying value ā $ 1,643 ā $ 1,638 ā Accumulated amortization ā (1,236) ā (1,135) ā Net carrying value ā $ 407 ā $ 503 ā ā |
Schedule of estimated future amortization expense for mortgage servicing assets | ā ā ā ā ā ā (Dollars in thousands) ā ā 2021 ā $ 97 ā 2022 ā 62 ā 2023 ā 44 ā 2024 ā 33 ā 2025 ā 27 ā Thereafter ā 144 ā Total ā $ 407 ā ā |
Schedule of fair values and key assumptions used in determining fair values of mortgage servicing assets | ā ā ā ā ā ā ā ā ā ā 2020 2019 Fair value, beginning of year (in thousands) ā $ 552 ā $ 291 ā Fair value, end of year (in thousands) ā 407 ā 552 ā ā ā ā ā ā ā ā ā Weighted average discount rate ā 10.25 % 10.25 % Weighted average prepayment speed assumption (CPR) ā 13.57 ā 12.58 ā Annual cost to service (per loan) ā $ 75 ā $ 75 ā ā |
Interest Rate Lock and Forwar_2
Interest Rate Lock and Forward Loan Sale Commitments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Interest Rate Lock and Forward Loan Sale Commitments | |
Schedule of location of assets and liabilities related to derivatives | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Asset Derivatives ā Liability Derivatives ā ā Location on ā Fair Value at December 31, ā Fair Value at December 31, (Dollars in thousands) Balance Sheet 2020 2019 2020 2019 Interest rate contracts Prepaid expenses and other assets ā $ 38 ā $ 5 ā $ ā ā $ ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Interest rate contracts Accounts payable and accrued expenses ā ā ā ā ā 38 ā 5 ā Total derivatives ā ā ā $ 38 ā $ 5 ā $ 38 ā $ 5 ā |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Premises and Equipment | |
Schedule of premises and equipment | ā ā ā ā ā ā ā ā ā ā ā December 31, (Dollars in thousands) 2020 2019 Land ā $ 585 ā $ 585 ā Buildings and improvements ā 1,365 ā 1,365 ā Leasehold improvements ā 14,671 ā 14,027 ā Furniture, fixtures and equipment ā 6,807 ā 6,035 ā Automobiles ā 118 ā 115 ā ā ā 23,546 ā 22,127 ā Less accumulated depreciation and amortization ā (18,701) ā (17,900) ā ā ā 4,845 ā 4,227 ā Construction in progress ā 10 ā 143 ā Total ā $ 4,855 ā $ 4,370 ā ā |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Deposits | |
Summary of deposit accounts by type with their respective weighted-average interest rates | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, ā ā 2020 ā 2019 (Dollars in thousands) Amount Rate Amount Rate Non-interest bearing ā $ 66,014 ā % $ 54,927 ā % Savings accounts ā 1,010,891 0.15 ā 908,175 0.49 ā Certificates of deposit ā 321,778 1.34 ā 463,943 1.87 ā Money market ā 7,749 0.20 ā 4,917 0.45 ā Checking and Super NOW ā 253,368 0.02 ā 199,971 0.02 ā Total ā $ 1,659,800 0.36 % $ 1,631,933 0.81 % ā |
Schedule of maturity of certificate of deposit accounts | ā ā ā ā ā ā Maturing in: ā ā 2021 ā $ 221,647 ā 2022 ā 66,610 ā 2023 ā 16,975 ā 2024 ā 12,533 ā 2025 ā 4,013 ā Total ā $ 321,778 ā |
Schedule of interest expense by type of deposit | ā ā ā ā ā ā ā ā ā (Dollars in thousands) 2020 2019 Savings ā $ 2,486 ā $ 4,593 ā Certificates of deposit and money market ā 6,479 ā 8,829 ā Checking and Super NOW ā 48 ā 41 ā Total ā $ 9,013 ā $ 13,463 ā ā |
Advances from the Federal Hom_2
Advances from the Federal Home Loan Bank (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Advances from the Federal Home Loan Bank | |
Schedule of advances outstanding | ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, ā ā 2020 ā 2019 ā ā ā Weighted ā ā Weighted ā ā ā Average ā ā ā ā Average ā (Dollars in thousands) Amount ā Rate ā Amount ā Rate ā Due within one year ā $ ā ā % $ 20,000 2.16 % Due over 1 year to 2 years ā 10,000 2.13 ā 57,000 2.50 ā Due over 2 years to 3 years ā 34,000 1.58 ā 30,000 2.37 ā Due over 3 years to 4 years ā ā 77,000 1.40 ā 19,000 2.16 ā Due over 4 years to 5 years ā 20,000 1.57 ā 30,000 1.87 ā Total ā $ 141,000 1.52 % $ 156,000 2.27 % |
Securities Sold Under Agreeme_2
Securities Sold Under Agreements to Repurchase (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Securities Sold Under Agreements to Repurchase | |
Summary of securities sold under agreements to repurchase | ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2020 ā 2019 ā ā ā Weighted ā ā Weighted ā Repurchase ā Average ā Repurchase ā Average (Dollars in thousands) ā Liability ā Rate ā Liability ā Rate Maturing: ā ā ā ā ā ā ā ā ā ā ā 1 year or less ā $ ā ā % $ 5,000 1.65 % Over 3 year to 4 years ā 5,000 1.88 ā ā ā ā Over 4 year to 5 years ā 5,000 1.73 ā 5,000 1.88 ā Total ā $ 10,000 1.81 % $ 10,000 1.77 % ā |
Summary comparing carrying value and fair value of securities pledged to secure repurchase agreements, repurchase liability, and amount at risk | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Weighted Carrying Fair Average Value of Value of Repurchase Amount Months to (Dollars in thousands) Securities Securities Liability at Risk Maturity Maturing: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Over 90 days ā $ 10,253 ā $ 11,234 ā $ 10,000 ā $ 1,234 48 ā |
Offsetting of Financial Liabi_2
Offsetting of Financial Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Offsetting of Financial Liabilities | |
Schedule of securities sold under agreements to repurchase subject to conditional right of offset | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Net Amount of Gross Amount Not Offset in the Gross Amount Gross Amount Liabilities Balance Sheet of Recognized Offset in the Presented in the Financial Cash Collateral (Dollars in thousands) Liabilities Balance Sheet Balance Sheet Instruments ā Pledged Net Amount December 31, 2020: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Securities sold under agreements to repurchase ā $ 10,000 ā $ ā ā $ 10,000 ā $ 10,000 ā $ ā ā $ ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Securities sold under agreements to repurchase ā $ 10,000 ā $ ā ā $ 10,000 ā $ 10,000 ā $ ā ā $ ā |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Schedule of allocation of federal and state income taxes between current and deferred provisions | ā ā ā ā ā ā ā ā ā (Dollars in thousands) 2020 2019 Current ā ā ā ā ā ā ā Federal ā $ 5,157 ā $ 3,366 ā State ā 1,950 ā 1,479 ā ā ā 7,107 ā 4,845 ā Deferred ā ā ā ā ā ā ā Federal ā (231) ā 1,147 ā State ā (161) ā 319 ā ā ā (392) ā 1,466 ā Total ā $ 6,715 ā $ 6,311 ā ā |
Schedule of reconciliation of tax provision based on statutory corporate rate on pretax income and provision for taxes | ā ā ā ā ā ā ā ā ā (Dollars in thousands) 2020 2019 Income tax expense at statutory rate ā $ 5,317 ā $ 5,944 ā Income tax effect of: ā ā ā ā ā ā ā Other tax-exempt income ā (194) ā (263) ā Share-based compensation ā 70 ā (69) ā Meal and entertainment expenses ā ā 51 ā ā 82 ā State income taxes, net of federal income tax benefits ā 1,574 ā 1,301 ā Tax benefit from the exercise of stock options ā ā (63) ā ā (297) ā Tax benefit from tax depreciation study (1) ā ā ā ā ā (402) ā Non-deductible executive compensation ā ā 67 ā ā ā ā Other ā (107) ā 15 ā Total income tax expense ā $ 6,715 ā $ 6,311 ā Effective income tax rate ā 26.52 % 22.29 % (1) The Company conducted a study that reduced the asset lives used to calculate depreciation. The Company filed an amended tax return and was able to deduct the increase in depreciation expense at the 2017 federal corporate tax rate of 35% rather than the current 21% federal corporate tax rate. |
Schedule of components of income taxes payable (receivable) | ā ā ā ā ā ā ā ā ā ā ā December 31, (Dollars in thousands) 2020 2019 Current taxes payable: ā ā ā ā ā ā ā Federal ā $ 239 ā $ 767 ā State ā 1,922 ā 1,538 ā ā ā $ 2,161 ā $ 2,305 ā Deferred taxes receivable: ā ā ā ā ā ā ā Federal ā $ (2,152) ā $ (1,651) ā State ā (1,230) ā (968) ā ā ā $ (3,382) ā $ (2,619) ā ā |
Schedule of tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities | ā ā ā ā ā ā ā ā ā ā ā December 31, (Dollars in thousands) 2020 2019 Deferred tax assets: ā ā ā ā ā ā ā Premises and equipment ā $ 392 ā $ 547 ā Hawaii franchise tax ā 476 ā 479 ā Unfunded pension liability ā 1,250 ā 925 ā Allowance for loan losses ā 1,135 ā 722 ā Employee benefit plans ā 2,706 ā 2,692 ā Equity incentive plan ā 210 ā 350 ā Deferred compensation ā 339 ā 413 ā Net lease liability ā ā 209 ā ā 161 ā Other ā 22 ā 8 ā ā ā 6,739 ā 6,297 ā Deferred tax liabilities: ā ā ā ā ā ā ā Deferred loan costs ā 2,926 ā 3,078 ā FHLB stock dividends ā 126 ā 126 ā Prepaid expense ā 97 ā 155 ā Unrealized gain on securities available for sale ā ā 100 ā ā 185 ā Premiums on loans sold ā 108 ā 134 ā ā ā 3,357 ā 3,678 ā Net deferred tax assets ā $ 3,382 ā $ 2,619 ā ā |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Employee Benefit Plans | |
Schedule of status of Pension Plan and SERP | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Pension Plan ā SERP ā ā December 31, (Dollars in thousands) 2020 2019 2020 2019 Accumulated benefit obligation at end of year ā $ 24,130 ā $ 21,367 ā $ 9,866 ā $ 9,702 ā Change in projected benefit obligation: ā ā ā ā ā ā ā ā ā ā ā ā ā Benefit obligation at beginning of year ā $ 21,367 ā $ 18,713 ā $ 9,702 ā $ 9,473 ā Service cost ā 174 ā 164 ā 9 ā 84 ā Interest cost ā 722 ā 811 ā 172 ā 162 ā Actuarial loss ā 2,776 ā 2,558 ā ā ā ā ā Benefits paid ā (909) ā (879) ā (17) ā (17) ā Benefit obligation at end of year ā 24,130 ā 21,367 ā 9,866 ā 9,702 ā Change in plan assets: ā ā ā ā ā ā ā ā ā ā ā ā ā Fair value of plan assets at beginning of year ā 19,435 ā 17,500 ā ā ā ā ā Actual return on plan assets ā 2,625 ā 2,814 ā ā ā ā ā Employer contributions ā ā ā ā ā 17 ā 17 ā Benefits paid ā (909) ā (879) ā (17) ā (17) ā Fair value of plan assets at end of year ā 21,151 ā 19,435 ā ā ā ā ā Funded status at end of year ā $ (2,979) ā $ (1,932) ā $ (9,866) ā $ (9,702) ā Amounts recognized in the Consolidated Balance Sheets: ā ā ā ā ā ā ā ā ā ā ā ā ā Accounts payable and accrued expenses - liability ā $ (2,979) ā $ (1,932) ā $ (9,866) ā $ (9,702) ā Amounts recognized in accumulated other comprehensive loss: ā ā ā ā ā ā ā ā ā ā ā ā ā Net actuarial loss ā $ 12,088 ā $ 11,008 ā $ ā ā $ ā ā Prior service cost ā 134 ā 139 ā ā ā ā ā Accumulated other comprehensive loss, before tax ā $ 12,222 ā $ 11,147 ā $ ā ā $ ā ā |
Schedule of changes recognized in accumulated other comprehensive loss for Pension Plan | ā ā ā ā ā ā ā ā ā ā ā Pension Plan ā ā Year Ended December 31, (Dollars in thousands) 2020 2019 Accumulated other comprehensive loss at beginning of year, before tax ā $ 11,147 ā $ 10,524 ā Actuarial net loss arising during the period ā 1,455 ā 961 ā Amortizations (recognized in net periodic benefit cost): ā ā ā ā ā ā ā Actuarial loss ā (375) ā (333) ā Prior service cost ā (5) ā (5) ā Total recognized in other comprehensive loss ā 1,075 ā 623 ā Accumulated other comprehensive loss at end of year, before tax ā $ 12,222 ā $ 11,147 ā ā |
Schedule of weighted average assumptions used to determine benefit obligations | ā ā ā ā ā ā ā ā ā ā ā ā ā Pension Plan ā SERP ā ā Year Ended December 31, ā 2020 2019 2020 2019 Assumptions used to determine the year-end benefit obligations: ā ā ā ā ā ā ā ā ā Discount rate 2.50 % 3.30 % 5.01 % 5.02 % Rate of compensation increase N/A ā N/A ā 5.00 % 5.00 % ā |
Schedule of Pension Plan's assets measured at fair value | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Fair Value of Measurements at Report Date Using: ā ā ā ā ā Quoted Prices ā ā ā ā ā ā ā ā ā ā ā in Active ā Significant ā ā ā ā ā ā ā ā Markets for ā Other ā Significant ā ā ā ā ā Identical ā Observable ā Unobservable ā ā Total Fair ā Assets ā Inputs ā Inputs (Dollars in thousands) ā Value ā (Level 1) ā (Level 2) ā (Level 3) December 31, 2020: ā ā ā ā ā Cash ā $ 1,971 ā $ 1,971 ā $ ā ā $ ā ā Equities ā 14,004 ā 14,004 ā ā ā ā ā Mutual funds (1) ā 5,176 ā 5,176 ā ā ā ā ā Total ā $ 21,151 ā $ 21,151 ā $ ā ā $ ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019: ā ā ā ā ā ā ā ā ā ā ā ā ā Cash ā $ 3,021 ā $ 3,021 ā $ ā ā $ ā ā Equities ā 11,576 ā 11,576 ā ā ā ā ā Mutual funds (1) ā 4,838 ā 4,838 ā ā ā ā ā Total ā $ 19,435 ā $ 19,435 ā $ ā ā $ ā ā (1) This category includes mutual funds that invest in equities and bonds. The mutual fund managers have the ability to change the amounts invested in equities and bonds depending on their investment outlook. ā |
Schedule of estimated future benefit payments reflecting expected future service | ā ā ā ā ā ā ā ā ā ā Pension ā ā (Dollars in thousands) ā Plan ā SERP 2021 ā $ 1,379 ā $ 17 ā 2022 ā 1,435 ā 8,671 ā 2023 ā 1,441 ā 149 ā 2024 ā 1,444 ā 149 ā 2025 ā 1,430 ā 149 ā 2026 - 2030 ā 6,868 ā 743 ā Total ā $ 13,997 ā $ 9,878 ā ā |
Schedule of weighted average assumptions used to determine net periodic benefit cost | ā ā ā ā ā ā ā ā ā ā ā ā ā Pension Plan SERP ā ā Year Ended December 31, (Dollars in thousands) 2020 2019 2020 2019 Assumptions used to determine the net periodic benefit cost: ā ā ā ā ā ā ā ā ā Discount rate 3.30 % 4.30 % 5.02 % 5.02 % Expected return on plan assets 7.00 ā 7.25 ā - ā - ā Rate of compensation increase N/A ā N/A ā 5.00 ā 5.00 ā ā |
Schedule of components of net periodic benefit cost | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Pension Plan SERP ā ā Year Ended December 31, ā (Dollars in thousands) 2020 2019 2020 2019 Net periodic benefit cost (income) for the year: ā ā ā ā ā ā ā ā ā ā ā ā ā Service cost ā $ 174 ā $ 164 ā $ 9 ā $ 84 ā Interest cost ā 722 ā 811 ā 172 ā 162 ā Expected return on plan assets ā (1,304) ā (1,217) ā ā ā ā ā Amortization of prior service cost ā 5 ā 5 ā ā ā ā ā Recognized actuarial loss ā 375 ā 333 ā ā ā ā ā Recognized curtailment loss ā ā ā ā ā ā ā ā ā Net periodic benefit cost (income) for the year: ā $ (28) ā $ 96 ā $ 181 ā $ 246 ā |
Employee Stock Ownership Plan (
Employee Stock Ownership Plan (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Employee Stock Ownership Plan | |
Schedule of shares held by the ESOP trust | ā ā ā ā ā ā ā ā ā December 31, 2020 2019 Allocated shares ā ā 507,304 ā 466,807 ā Unearned shares ā ā 391,464 ā 440,397 ā Total ESOP shares ā ā 898,768 ā 907,204 ā Fair value of unearned shares, in thousands ā $ 9,407 ā $ 13,626 ā ā |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Schedule of compensation expense and related tax benefit for all share-based awards | ā ā ā ā ā ā ā ā ā (In thousands) 2020 2019 Compensation expense ā $ 619 ā $ 571 ā Income tax benefit ā 169 ā 156 ā ā |
Schedule of stock option activity | ā ā ā ā ā ā ā ā ā ā ā ā ā Weighted Aggregate Average Remaining Intrinsic Exercise Contractual Value Options Price Life (years) (in thousands) Options outstanding at December 31, 2018 337,654 ā $ 17.51 1.74 ā $ 2,859 ā Granted ā ā ā ā ā ā ā Exercised 221,245 ā 17.50 ā ā 2,483 ā Forfeited ā ā ā ā ā ā ā Expired ā ā ā ā ā ā ā Options outstanding at December 31, 2019 116,409 ā $ 17.53 0.72 ā $ 1,562 ā Granted ā ā ā ā ā ā ā Exercised 81,827 ā 17.36 ā ā 725 ā Forfeited ā ā ā ā ā ā ā Expired 31,497 ā ā ā ā ā ā Options outstanding at December 31, 2020 3,085 ā $ 23.62 1.67 ā $ 1,265 ā ā ā ā ā ā ā ā ā ā ā ā ā Options vested and exercisable at December 31, 2020 3,085 ā $ 23.62 1.67 ā $ 1,265 ā |
Summary of certain stock option activity | ā ā ā ā ā ā ā ā ā (In thousands) 2020 2019 Intrinsic value of stock options exercised ā $ 725 ā $ 2,483 ā Proceeds received from stock options exercised ā 1,421 ā 3,873 ā Tax benefits realized from stock options exercised ā 158 ā 534 ā Total fair value of stock options that vested ā ā ā ā ā |
Restricted Stock | |
Schedule of restricted stock award activity | ā ā ā ā ā ā ā ā Weighted Average Grant Restricted Date Fair Stock Value Unvested at December 31, 2018 ā 16,424 ā $ 30.26 ā Granted 10,366 ā 27.30 ā Vested 6,541 ā 30.14 ā Forfeited ā ā ā ā Unvested at December 31, 2019 20,249 ā $ 28.78 ā ā ā ā ā ā ā ā Unvested at December 31, 2019 ā 20,249 ā $ 28.78 ā Granted 13,444 ā 21.05 ā Vested 9,998 ā 29.16 ā Forfeited ā ā ā ā Unvested at December 31, 2020 23,695 ā $ 24.24 ā |
Restricted Stock Units Based on a Performance Condition | |
Schedule of restricted stock award activity | ā ā ā ā ā ā ā Performance- ā ā ā ā Based Restricted ā ā ā Stock Units Weighted ā ā Based on a ā Average Grant ā ā Performance ā Date Fair Condition Value Unvested at December 31, 2018 23,538 ā $ 30.14 Granted 12,438 ā 27.30 Vested ā ā ā Forfeited ā ā ā Unvested at December 31, 2019 35,976 ā $ 29.16 ā ā ā ā ā ā Unvested at December 31, 2019 35,976 ā $ 29.16 Granted 16,129 ā 21.05 Vested 7,680 ā 29.53 Forfeited 3,840 ā 29.53 Unvested at December 31, 2020 40,585 ā $ 25.83 |
Restricted Stock Units Based on a Market Condition | |
Schedule of restricted stock award activity | ā ā ā ā ā ā ā ā ā ā ā ā Performance- ā ā ā ā ā Based Restricted ā Monte Carlo ā ā Stock Units ā Valuation of ā ā Based on a ā the Company's Market Condition Stock Unvested at December 31, 2018 5,884 ā $ 26.42 Granted 3,110 ā 24.45 Vested ā ā ā Forfeited ā ā ā Unvested at December 31, 2019 8,994 ā $ 25.74 ā ā ā ā ā ā Unvested at December 31, 2019 8,994 ā $ 25.74 Granted 4,032 ā 22.16 Vested 1,197 ā 24.44 Forfeited 1,682 ā 24.44 Unvested at December 31, 2020 10,147 ā $ 24.69 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share | |
Schedule of information used to compute basic and diluted earnings per share | ā ā ā ā ā ā ā ā ā For the Year Ended December 31, ā ā ā ā ā ā (Dollars in thousands, except per share data) 2020 2019 Net income ā $ 18,605 ā $ 21,995 ā Income allocated to participating securities ā ā (78) ā ā (149) ā Net income available to common shareholders ā $ 18,527 ā $ 21,846 ā ā ā ā ā ā ā ā ā Weighted-average number of shares used in: ā ā ā ā ā ā ā Basic earnings per share ā 9,137,398 ā 9,196,674 ā Dilutive common stock equivalents: ā ā ā ā ā ā ā Stock options and restricted stock units ā 59,291 ā 128,940 ā Diluted earnings per share ā 9,196,689 ā 9,325,614 ā ā ā ā ā ā ā ā ā Net income per common share, basic ā $ 2.03 ā $ 2.38 ā Net income per common share, diluted ā $ 2.01 ā $ 2.34 ā |
Other Comprehensive Loss (Table
Other Comprehensive Loss (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Comprehensive Loss | |
Schedule of changes in components of accumulated other comprehensive income and loss, net of taxes | ā ā ā ā ā ā ā ā ā ā ā ā Unfunded Unrealized Pension (Gain)/Loss on (Dollars in thousands) Liability Securities Total December 31, 2020: ā ā ā ā ā ā ā ā ā ā Balances at beginning of year ā $ 8,178 ā $ (510) ā $ 7,668 ā Other comprehensive loss, net of taxes ā 789 ā 13 ā 802 ā Amounts reclassified from other comprehensive income, net of taxes ā ā ā 221 ā 221 ā Net current period other comprehensive loss ā 789 ā 234 ā 1,023 ā Balances at end of year ā $ 8,967 ā $ (276) ā $ 8,691 ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019: ā ā ā ā ā ā ā ā ā ā Balances at beginning of year ā $ 7,721 ā $ 88 ā $ 7,809 ā Other comprehensive loss (income), net of taxes ā 457 ā (721) ā (264) ā Amounts reclassified from other comprehensive income, net of taxes ā ā ā 123 ā 123 ā Net current period other comprehensive loss (income) ā 457 ā (598) ā (141) ā Balances at end of year ā $ 8,178 ā $ (510) ā $ 7,668 ā ā ā ā ā ā ā ā ā ā ā ā ā |
Schedule of tax effect on each component of accumulated other comprehensive loss | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Year Ended December 31, 2020 ā 2019 Pretax ā ā After Tax Pretax ā ā After Tax (Dollars in thousands) Amount ā Tax ā Amount ā Amount ā Tax ā Amount ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Unfunded pension liability ā $ 1,075 ā $ (286) ā $ 789 ā $ 623 ā $ (166) ā $ 457 ā Unrealized loss (gain) on securities ā 18 ā (5) ā 13 ā (983) ā 262 ā (721) ā Amount reclassified from other comprehensive income ā 301 ā (80) ā 221 ā 168 ā (45) ā 123 ā Total ā $ 1,394 ā $ (371) ā $ 1,023 ā $ (192) ā $ 51 ā $ (141) ā |
Regulatory Capital and Superv_2
Regulatory Capital and Supervision (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Regulatory Capital and Supervision | |
Schedule of regulatory capital ratios | ā ā ā ā ā ā ā ā ā ā (Dollars in thousands) Required Ratio ā Actual Amount Actual Ratio December 31, 2020: ā ā ā ā ā ā ā ā Tier 1 Leverage Capital ā ā ā ā ā ā ā ā Territorial Savings Bank 5.00 % $ 239,256 ā 11.38 % Territorial Bancorp Inc. ā ā $ 257,399 ā 12.24 % Common Equity Tier 1 Risk-Based Capital (1) ā ā ā ā ā ā ā ā Territorial Savings Bank 9.00 % $ 239,256 ā 27.49 % Territorial Bancorp Inc. ā ā $ 257,399 ā 29.57 % Tier 1 Risk-Based Capital (1) ā ā ā ā ā ā ā ā Territorial Savings Bank 10.50 % $ 239,256 ā 27.49 % Territorial Bancorp Inc. ā ā $ 257,399 ā 29.57 % Total Risk-Based Capital (1) ā ā ā ā ā ā ā ā Territorial Savings Bank 12.50 % $ 243,608 ā 27.99 % Territorial Bancorp Inc. ā ā $ 261,751 ā 30.07 % ā ā ā ā ā ā ā ā ā December 31, 2019: ā ā ā ā ā ā ā ā Tier 1 Leverage Capital ā ā ā ā ā ā ā ā Territorial Savings Bank 5.00 % $ 227,507 ā 10.92 % Territorial Bancorp Inc. ā ā $ 251,558 ā 12.06 % Common Equity Tier 1 Risk-Based Capital (1) ā ā ā ā ā ā ā ā Territorial Savings Bank 9.00 % $ 227,507 ā 23.31 % Territorial Bancorp Inc. ā ā $ 251,558 ā 25.77 % Tier 1 Risk-Based Capital (1) ā ā ā ā ā ā ā ā Territorial Savings Bank 10.50 % $ 227,507 ā 23.31 % Territorial Bancorp Inc. ā ā $ 251,558 ā 25.77 % Total Risk-Based Capital (1) ā ā ā ā ā ā ā ā Territorial Savings Bank 12.50 % $ 230,304 ā 23.59 % Territorial Bancorp Inc. ā ā $ 254,355 ā 26.06 % (1) The required Common Equity Tier 1 Risk-Based Capital, Tier 1 Risk-Based Capital and Total Risk-Based Capital ratios are based on the fully-phased in capital ratios in the Basel III capital regulations plus the 2.50% capital conservation buffer that became effective on January 1, 2019. ā |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue Recognition | |
Reconciliation of revenue from contracts with customers and other revenue reported in line items | ā ā ā ā ā ā ā ā ā ā ā Service Fees on ā ā ā ā Loan and Deposit ā ā ā ā (Dollars in thousands) Accounts Other Total Year ended December 31, 2020 ā ā ā ā ā ā ā ā ā Revenue from contracts with customers ā $ 2,565 ā $ 243 ā $ 2,808 Other revenue ā ā 97 ā ā 146 ā ā 243 Total ā $ 2,662 ā $ 389 ā $ 3,051 ā ā ā ā ā ā ā ā ā ā Year ended December 31, 2019 ā ā ā ā ā ā ā ā ā Revenue from contracts with customers ā $ 1,779 ā $ 150 ā $ 1,929 Other revenue ā ā 158 ā ā 460 ā ā 618 Total ā $ 1,937 ā $ 610 ā $ 2,547 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases | |
Schedule of lease costs | ā ā ā ā ā ā ā ā ā ā Year Ended ā December 31, (Dollars in thousands) 2020 2019 Lease Costs: ā ā ā ā ā ā ā Operating lease costs ā $ 3,365 ā $ 3,130 ā Short-term lease costs ā 23 ā 57 ā Variable lease costs ā 163 ā 129 ā Total lease costs ā $ 3,551 ā $ 3,316 ā ā ā ā ā ā ā ā ā Cash paid for amounts included in measurement of lease liabilities ā $ 3,238 ā $ 2,991 ā ROU assets obtained in exchange for new operating lease liabilities ā $ 4,042 ā $ 14,341 ā |
Schedule of future minimum rental commitments under noncancellable operating leases | ā ā ā ā ā ā ā ā ā ā ā (Dollars in thousands) ā ā ā ā ā ā ā ā 2021 ā $ 3,055 ā ā ā ā ā ā 2022 ā 2,760 ā ā ā ā ā ā 2023 ā 2,407 ā ā ā ā ā ā 2024 ā 2,152 ā ā ā ā ā ā 2025 ā 1,461 ā ā ā ā ā ā Thereafter ā 3,824 ā ā ā ā ā ā Total ā ā 15,659 ā ā ā ā ā ā Less present value discount ā ā 2,540 ā ā ā ā ā ā Present value of leases ā $ 13,119 ā ā ā ā ā ā |
Schedule of other lease related information | ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, ā ā December 31, ā ā ā 2020 ā 2019 ā Weighted-average remaining lease term (years) ā 5.92 ā ā 5.99 ā ā Weighted-average discount rate ā ā 2.29 % ā ā 2.76 % ā |
Schedule of future minimum rental income | ā ā ā ā ā ā (Dollars in thousands) ā ā ā 2021 ā $ 110 ā 2022 ā ā ā 2023 ā ā ā 2024 ā ā ā 2025 ā ā ā Thereafter ā ā ā Total ā $ 110 ā |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Schedule of estimated fair values of financial instruments | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Carrying ā ā ā ā Fair Value Measurements Using (Dollars in thousands) Amount Fair Value Level 1 Level 2 Level 3 December 31, 2020 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Assets ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Cash and cash equivalents ā $ 363,543 ā $ 363,543 ā $ 363,543 ā $ ā ā $ ā ā Investment securities available for sale ā ā 3,562 ā ā 3,562 ā ā ā ā ā 3,562 ā ā ā ā Investment securities held to maturity ā 247,642 ā ā 262,841 ā ā ā ā ā 262,841 ā ā ā ā Loans held for sale ā 2,195 ā ā 2,274 ā ā ā ā ā 2,274 ā ā ā ā Loans receivable, net ā 1,406,995 ā ā 1,433,489 ā ā ā ā ā ā ā ā 1,433,489 ā FHLB stock ā 8,144 ā ā 8,144 ā ā ā ā ā 8,144 ā ā ā ā FRB stock ā ā 3,145 ā ā 3,145 ā ā ā ā ā 3,145 ā ā ā ā Accrued interest receivable ā 6,515 ā ā 6,515 ā ā 16 ā ā 627 ā ā 5,872 ā Interest rate contracts ā 38 ā ā 38 ā ā ā ā ā 38 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Liabilities ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Deposits ā 1,659,800 ā ā 1,663,226 ā ā ā ā ā 1,338,022 ā ā 325,204 ā Advances from the Federal Home Loan Bank ā 141,000 ā ā 145,441 ā ā ā ā ā 145,441 ā ā ā ā Securities sold under agreements to repurchase ā 10,000 ā ā 10,466 ā ā ā ā ā 10,466 ā ā ā ā Accrued interest payable ā 35 ā ā 35 ā ā ā ā ā 33 ā ā 2 ā Interest rate contracts ā 38 ā ā 38 ā ā ā ā ā 38 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Assets ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Cash and cash equivalents ā $ 44,806 ā $ 44,806 ā $ 44,806 ā $ ā ā $ ā ā Investment securities available for sale ā ā 8,628 ā ā 8,628 ā ā ā ā ā 8,628 ā ā ā ā Investment securities held to maturity ā 363,883 ā ā 371,305 ā ā ā ā ā 371,305 ā ā ā ā Loans held for sale ā 470 ā ā 480 ā ā ā ā ā 480 ā ā ā ā Loans receivable, net ā 1,584,784 ā ā 1,627,903 ā ā ā ā ā ā ā ā 1,627,903 ā FHLB stock ā 8,723 ā ā 8,723 ā ā ā ā ā 8,723 ā ā ā ā FRB stock ā ā 3,128 ā ā 3,128 ā ā ā ā ā 3,128 ā ā ā ā Accrued interest receivable ā 5,409 ā ā 5,409 ā ā 32 ā ā 952 ā ā 4,425 ā Interest rate contracts ā 5 ā ā 5 ā ā ā ā ā 5 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Liabilities ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Deposits ā 1,631,933 ā ā 1,632,741 ā ā ā ā ā 1,167,990 ā ā 464,751 ā Advances from the Federal Home Loan Bank ā 156,000 ā ā 156,906 ā ā ā ā ā 156,906 ā ā ā ā Securities sold under agreements to repurchase ā 10,000 ā ā 9,968 ā ā ā ā ā 9,968 ā ā ā ā Accrued interest payable ā 397 ā ā 397 ā ā ā ā ā 47 ā ā 350 ā Interest rate contracts ā 5 ā ā 5 ā ā ā ā ā 5 ā ā ā ā ā |
Schedule of assets and liabilities measured at fair value on a recurring basis | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā (Dollars in thousands) Level 1 Level 2 Level 3 Total December 31, 2020 ā ā ā ā ā ā ā ā ā ā ā ā ā Interest rate contracts ā assets ā $ ā ā $ 38 ā $ ā ā $ 38 ā Interest rate contracts ā liabilities ā ā ā (38) ā ā ā (38) ā Investment securities available for sale ā ā ā ā ā 3,562 ā ā ā ā ā 3,562 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019 ā ā ā ā ā ā ā ā ā ā ā ā ā Interest rate contracts ā assets ā $ ā ā $ 5 ā $ ā ā $ 5 ā Interest rate contracts ā liabilities ā ā ā (5) ā ā ā (5) ā Investment securities available for sale ā ā ā 8,628 ā ā ā 8,628 ā ā |
Schedule of Significant unobservable inputs for Level 3 nonrecurring fair value measurements | ā ā ā ā ā ā ā ā ā ā ā ā ā Unobservable Range (Dollars in thousands) Fair Value Valuation Technique Input (Weighted Average) December 31, 2020: ā ā ā ā ā ā ā ā ā ā ā Mortgage servicing assets ā $ 407 ā Discounted cash flow ā Discount rate ā ā 9.25% - 11.25% (10.25%) ā ā ā ā ā ā ā ā Prepayment speed (CPR) ā 10.42 - 19.61 (13.57) ā ā ā ā ā ā ā ā Annual cost to service (per loan, in dollars) ā $ 75 ā December 31, 2019: ā ā ā ā ā ā ā ā ā ā ā Mortgage servicing assets ā $ 452 Discounted cash flow Discount rate ā ā 9.25% - 11.25% (10.25%) ā ā ā ā ā ā ā Prepayment speed (CPR) ā 9.11 - 13.06 (12.58) ā ā ā ā ā ā ā Annual cost to service (per loan, in dollars) ā $ 75 ā |
Fair Value, Measurements, Nonrecurring | |
Schedule of balance of assets measured at fair value on a nonrecurring basis | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Fair Value ā ā (Dollars in thousands) Adjustment Date ā Level 1 Level 2 Level 3 Total ā Total Losses ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2020 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Mortgage servicing assets ā 12/31/2020 ā $ ā ā $ ā ā $ 407 ā $ 407 ā $ (73) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Mortgage servicing assets ā 9/30/2019 ā ā ā ā ā ā ā ā 452 ā ā 452 ā ā (16) ā |
Parent Company Only (Tables)
Parent Company Only (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Parent Company Only | |
Condensed Balance Sheet | ā ā ā ā ā ā ā ā ā ā ā December 31, (Dollars in thousands) 2020 2019 Assets ā ā ā ā ā ā ā Cash ā $ 18,108 ā $ 22,602 ā Investment in Territorial Savings Bank ā 230,566 ā 219,838 ā Receivable from Territorial Savings Bank ā 851 ā 1,377 ā Prepaid expenses and other assets ā 355 ā 233 ā Total assets ā $ 249,880 ā $ 244,050 ā Liabilities and Equity ā ā ā ā ā ā ā Other liabilities ā $ 1,172 ā $ 160 ā Equity ā 248,708 ā 243,890 ā Total liabilities and equity ā $ 249,880 ā $ 244,050 ā |
Condensed Statement of Income | ā ā ā ā ā ā ā ā ā ā ā For the Year Ended December 31, (Dollars in thousands) 2020 2019 Interest and dividend income: ā ā ā ā ā ā ā Dividends from Territorial Savings Bank ā $ 8,000 ā $ 21,250 ā Interest-earning deposit with Territorial Savings Bank ā 19 ā 35 ā Total interest and dividend income ā 8,019 ā 21,285 ā ā ā ā ā ā ā ā ā Noninterest expense: ā ā ā ā ā ā ā Salaries ā 43 ā 43 ā Other general and administrative expenses ā 719 ā 676 ā Total noninterest expense ā 762 ā 719 ā ā ā ā ā ā ā ā ā Income before income taxes and equity in undistributed earnings in subsidiaries ā 7,257 ā 20,566 ā ā ā ā ā ā ā ā ā Income taxes ā (217) ā (177) ā ā ā ā ā ā ā ā ā Income before equity in undistributed earnings in subsidiaries ā 7,474 ā 20,743 ā ā ā ā ā ā ā ā ā Equity in undistributed earnings of Territorial Savings Bank, net of dividends ā 11,131 ā 1,252 ā ā ā ā ā ā ā ā ā Net income ā $ 18,605 ā $ 21,995 ā |
Condensed Statement of Cash Flows | ā ā ā ā ā ā ā ā ā ā ā For the Year Ended December 31, (Dollars in thousands) 2020 2019 Cash flows from operating activities: ā ā ā ā ā ā ā Net income ā $ 18,605 ā $ 21,995 ā Adjustments to reconcile net income to net cash provided by operating activities: ā ā ā ā ā ā ā Equity in undistributed earnings of Territorial Savings Bank, net of dividends ā (11,131) ā (1,252) ā Net decrease in prepaid expenses and other assets ā 1,583 ā 683 ā Net decrease in other liabilities ā (151) ā (97) ā Net cash provided by operating activities ā 8,906 ā 21,329 ā ā ā ā ā ā ā ā ā Cash flows from investing activities: ā ā ā ā ā ā ā Investment in Territorial Savings Bank ā ā ā ā ā Net cash used in investing activities ā ā ā ā ā ā ā ā ā ā ā ā ā Cash flows from financing activities: ā ā ā ā ā ā ā Proceeds from issuance of common stock ā ā ā 170 ā Repurchases of common stock ā (5,000) ā (1,597) ā Cash dividends paid ā (8,400) ā (13,689) ā Net cash used in financing activities ā (13,400) ā (15,116) ā Net (decrease) increase in cash ā (4,494) ā 6,213 ā Cash at beginning of the period ā 22,602 ā 16,389 ā Cash at end of the period ā $ 18,108 ā $ 22,602 ā |
Unaudited Quarterly Financial_2
Unaudited Quarterly Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Unaudited Quarterly Financial Information | |
Schedule of unaudited quarterly financial information | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā First Second Third Fourth ā ā ā Quarter ā Quarter ā Quarter ā Quarter ā Full Year ā ā (Dollars in thousands, except per share data) 2020: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Interest income ā $ 18,581 ā $ 18,005 ā $ 17,131 ā $ 16,040 ā $ 69,757 ā Interest expense ā 4,064 ā 3,239 ā 2,667 ā 2,221 ā 12,191 ā Net interest income ā 14,517 ā 14,766 ā 14,464 ā 13,819 ā 57,566 ā Provision (reversal of provision) for loan losses ā 217 ā 1,395 ā 692 ā (679) ā 1,625 ā Net interest income after provision for loan losses ā 14,300 ā 13,371 ā 13,772 ā 14,498 ā 55,941 ā Noninterest income ā 1,301 ā 1,461 ā 1,577 ā 2,465 ā 6,804 ā Noninterest expense ā 9,538 ā 8,971 ā 9,386 ā 9,530 ā 37,425 ā Income before income taxes ā 6,063 ā 5,861 ā 5,963 ā 7,433 ā 25,320 ā Income taxes ā 1,590 ā 1,570 ā 1,645 ā 1,910 ā 6,715 ā Net income ā 4,473 ā 4,291 ā 4,318 ā 5,523 ā 18,605 ā Basic earnings per share ā 0.48 ā 0.47 ā 0.47 ā 0.61 ā 2.03 ā Diluted earnings per share ā 0.48 ā 0.47 ā 0.47 ā 0.59 ā 2.01 ā Cash dividends declared per common share ā 0.23 ā 0.23 ā 0.23 ā 0.33 ā 1.02 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā First Second Third Fourth ā ā ā ā Quarter ā Quarter ā Quarter ā Quarter ā Full Year ā ā (Dollars in thousands, except per share data) 2019: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Interest income ā $ 18,705 ā $ 19,114 ā $ 18,948 ā $ 18,801 ā $ 75,568 ā Interest expense ā 3,869 ā 4,452 ā 4,397 ā 4,309 ā 17,027 ā Net interest income ā 14,836 ā 14,662 ā 14,551 ā 14,492 ā 58,541 ā Provision (reversal of provision) for loan losses ā 5 ā (51) ā 111 ā (4) ā 61 ā Net interest income after provision for loan losses ā 14,831 ā 14,713 ā 14,440 ā 14,496 ā 58,480 ā Noninterest income ā 3,440 ā 1,273 ā 2,102 ā 1,017 ā 7,832 ā Noninterest expense ā 9,774 ā 9,511 ā 9,401 ā 9,320 ā 38,006 ā Income before income taxes ā 8,497 ā 6,475 ā 7,141 ā 6,193 ā 28,306 ā Income taxes ā 1,973 ā 1,415 ā 1,775 ā 1,148 ā 6,311 ā Net income ā 6,524 ā 5,060 ā 5,366 ā 5,045 ā 21,995 ā Basic earnings per share ā 0.71 ā 0.55 ā 0.58 ā 0.54 ā 2.38 ā Diluted earnings per share ā 0.70 ā 0.54 ā 0.57 ā 0.53 ā 2.34 ā Cash dividends declared per common share ā 0.22 ā 0.32 ā 0.22 ā 0.73 ā 1.49 ā |
Organization - Narrative (Detai
Organization - Narrative (Details) | 12 Months Ended |
Dec. 31, 2020subsidiary | |
Organization | |
Number of inactive subsidiaries | 2 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Description of Business, Investment Securities and Transfer of Financial Assets (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($) | |
Description of Business | ||
Number of branches located throughout Hawaii | item | 29 | |
Investment Securities | ||
Investment securities available for sale, at fair value | $ | $ 3,562 | $ 8,628 |
Transfer of financial assets | ||
Percentage of receipt on transfer of mortgage-backed securities issued | 100.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Premises and Equipment Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Buildings and improvements | |
Premises and equipment | |
Estimated useful life | 30 years |
Furniture, fixtures and equipment | Minimum | |
Premises and equipment | |
Estimated useful life | 3 years |
Furniture, fixtures and equipment | Maximum | |
Premises and equipment | |
Estimated useful life | 10 years |
Automobiles | |
Premises and equipment | |
Estimated useful life | 3 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Common Stock Repurchase Program and Forms of Outstanding Common Stock (Details) | 12 Months Ended | |
Dec. 31, 2020security$ / sharesshares | Dec. 31, 2019$ / sharesshares | |
Common stock | ||
Number of different forms of outstanding common stock | security | 2 | |
Common Stock Repurchase Program | ||
Common Stock Repurchase Program | ||
Repurchase of shares of common stock (in shares) | shares | 204,324 | 59,700 |
Average cost of shares repurchased (in dollars per share) | $ / shares | $ 24.47 | $ 26.74 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Bank-Owned Life Insurance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Bank-Owned Life Insurance | ||
Amount of investment in bank-owned life insurance | $ 45,644 | $ 45,113 |
Territorial Savings Bank | ||
Bank-Owned Life Insurance | ||
Percentage applied on Tier 1 capital plus allowance for loan losses to calculate ceiling limit of investment | 25.00% | |
Amount of ceiling limit of investment | $ 60,900 |
Cash and Cash Equivalents (Deta
Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Cash and Cash Equivalents | ||
Cash and due from banks | $ 14,355 | $ 9,571 |
Interest-earning deposits in other banks | 349,188 | 35,235 |
Cash and cash equivalents | $ 363,543 | $ 44,806 |
Investment Securities - Amortiz
Investment Securities - Amortized Cost and Fair Values of Available-for-Sale Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Available-for-sale: | ||
Amortized Cost | $ 3,185 | $ 7,905 |
Gross Unrealized Gains | 377 | 723 |
Estimated Fair Value | 3,562 | 8,628 |
Mortgage-backed securities | ||
Available-for-sale: | ||
Amortized Cost | 3,185 | 7,905 |
Gross Unrealized Gains | 377 | 723 |
Estimated Fair Value | $ 3,562 | $ 8,628 |
Investment Securities - Amort_2
Investment Securities - Amortized Cost and Fair Values of Held-to-Maturity Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Held-to-maturity: | ||
Amortized Cost | $ 247,642 | $ 363,883 |
Gross Unrealized Gains | 15,200 | 8,436 |
Gross Unrealized Losses | (1) | (1,014) |
Estimated Fair Value | 262,841 | 371,305 |
Mortgage-backed securities | ||
Held-to-maturity: | ||
Amortized Cost | 247,642 | 363,883 |
Gross Unrealized Gains | 15,200 | 8,436 |
Gross Unrealized Losses | (1) | (1,014) |
Estimated Fair Value | $ 262,841 | $ 371,305 |
Investment Securities - Maturit
Investment Securities - Maturity Schedule of Available-for-Sale Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Amortized Cost | ||
Due within 5 years | $ 0 | |
Due after 5 years through 10 years | 0 | |
Due after 10 years | 3,185 | |
Amortized Cost | 3,185 | $ 7,905 |
Estimated Fair Value | ||
Due within 5 years | 0 | |
Due after 5 years through 10 years | 0 | |
Due after 10 years | 3,562 | |
Estimated Fair Value | $ 3,562 | $ 8,628 |
Investment Securities - Matur_2
Investment Securities - Maturity Schedule of Held-to-Maturity Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Held-to-maturity, Amortized Cost | ||
Due within 5 years | $ 0 | |
Due after 5 years through 10 years | 59 | |
Due after 10 years | 247,583 | |
Amortized Cost | 247,642 | $ 363,883 |
Held-to-maturity, Estimated Fair Value | ||
Due within 5 years | 0 | |
Due after 5 years through 10 years | 58 | |
Due after 10 years | 262,783 | |
Estimated Fair Value | $ 262,841 | $ 371,305 |
Investment Securities - Realize
Investment Securities - Realized Gains and Losses and Proceeds from Sales (Details) - USD ($) | Jan. 01, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Realized gains and losses and the proceeds from sales of securities | |||
Proceeds from sales | $ 16,863,000 | $ 3,527,000 | |
Available-for-sale mortgage-backed securities sold | 3,400,000 | 5,000,000 | |
Transfer of securities from held-to-maturity to available-for-sale | $ 11,400,000 | 11,390,000 | |
Proceeds from Sale of Held-to-maturity Securities | 16,863,000 | 3,527,000 | |
Trust preferred securities | |||
Realized gains and losses and the proceeds from sales of securities | |||
Proceeds from sales | 75,000 | ||
Gross gains | 2,700,000 | ||
Proceeds from Sale of Held-to-maturity Securities | 75,000 | ||
Gain on Sale of Investments | 2,700,000 | ||
Mortgage-backed securities | |||
Realized gains and losses and the proceeds from sales of securities | |||
Proceeds from sales | 746,000 | ||
Gross gains | 1,000,000 | 40,000 | |
Debt Securities, Available-for-sale, Realized Gain | 290,000 | 153,000 | |
Proceeds from Sale of Held-to-maturity Securities | 746,000 | ||
Gain on Sale of Investments | 1,000,000 | 40,000 | |
Mortgage-backed securities | |||
Realized gains and losses and the proceeds from sales of securities | |||
Proceeds from sales | 15,800,000 | ||
Proceeds from Sale of Held-to-maturity Securities | $ 15,800,000 | ||
Minimum | Mortgage-backed securities | |||
Realized gains and losses and the proceeds from sales of securities | |||
Portion of outstanding purchased principal already collected | 85.00% | ||
Held-to-maturity debt securities | |||
Realized gains and losses and the proceeds from sales of securities | |||
Proceeds from sales | $ 20,531,000 | 8,644,000 | |
Gross gains | 1,320,000 | 2,910,000 | |
Proceeds from Sale of Held-to-maturity Securities | 20,531,000 | 8,644,000 | |
Gain on Sale of Investments | $ 1,320,000 | $ 2,910,000 |
Investment Securities - Securit
Investment Securities - Securities Pledged (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Pledged investment securities | ||
Investment securities pledged to secure deposits made by state and local governments, securities sold under agreements to repurchase and transaction clearing accounts | $ 192.7 | $ 188.9 |
Investment Securities - Held-to
Investment Securities - Held-to-Maturity Unrealized Loss Position Summary (Details) - Mortgage-backed securities $ in Thousands | Dec. 31, 2020USD ($)security | Dec. 31, 2019USD ($)security |
Investment Securities | ||
Less Than 12 Months Fair Value | $ 678 | $ 55,882 |
Less Than 12 Months Unrealized Losses | (1) | (302) |
12 Months or Longer Fair Value | $ 4 | 34,492 |
12 Months or Longer Unrealized Losses | $ (712) | |
Total Number of Securities | security | 6 | 30 |
Total Fair Value | $ 682 | $ 90,374 |
Total Unrealized Losses | $ (1) | $ (1,014) |
Investment Securities - Mortgag
Investment Securities - Mortgage-Backed Securities (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule of Investments [Line Items] | |||
Fair market value of received mortgage-backed securities | $ 9,800,000 | $ 37,900,000 | |
Mortgage servicing assets | 407,000 | 503,000 | $ 226,000 |
Net gain recognized on the securitization | 78,000 | 344,000 | |
Fixed-rate mortgage loans | |||
Schedule of Investments [Line Items] | |||
Book value | 9,400,000 | 36,800,000 | |
Net gain recognized on the securitization | $ 377,000 | $ 1,500,000 |
Federal Home Loan Bank Stock (D
Federal Home Loan Bank Stock (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Federal Home Loan Bank Stock | ||
Capital stock of the FHLB owned | $ 8,144 | $ 8,723 |
Territorial Savings Bank | ||
Federal Home Loan Bank Stock | ||
Capital stock of the FHLB owned | $ 8,100 | $ 8,700 |
Federal Reserve Bank Stock (Det
Federal Reserve Bank Stock (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Federal Reserve Bank Stock | ||
Capital stock of the Federal Reserve Bank owned | $ 3,145 | $ 3,128 |
Territorial Savings Bank | ||
Federal Reserve Bank Stock | ||
Requirement to hold shares of capital stock of the Federal Reserve Bank as a percentage of capital and surplus (as a percent) | 6.00% | |
Capital stock of the Federal Reserve Bank owned | $ 3,100 | $ 3,100 |
Loans Receivable and Allowanc_3
Loans Receivable and Allowance for Loan Losses - Components (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Real estate loans: | |||
Total real estate loans | $ 1,402,202 | $ 1,580,212 | |
Other loans: | |||
Less: Net unearned fees and discounts | (1,266) | (2,435) | |
Less: Allowance for loan losses | (4,262) | (2,712) | $ (2,642) |
Total unearned fees, discounts and allowance for loan losses | (5,528) | (5,147) | |
Loans receivable, net | 1,406,995 | 1,584,784 | |
Other Financing Receivables | |||
Other loans: | |||
Total other loans | 10,321 | 9,719 | |
One- to four-family residential | Residential Mortgage | |||
Real estate loans: | |||
Total real estate loans | 1,366,507 | 1,536,781 | |
Multi-family residential | Residential Mortgage | |||
Real estate loans: | |||
Total real estate loans | 7,245 | 9,965 | |
Construction, Commercial and Other Mortgage Loans | Construction, commercial and other | |||
Real estate loans: | |||
Total real estate loans | 19,074 | 23,382 | |
Other loans: | |||
Less: Allowance for loan losses | (406) | (511) | (443) |
Home Equity Loans and Lines of Credit | Home equity loans and lines of credit | |||
Real estate loans: | |||
Total real estate loans | 9,376 | 10,084 | |
Other loans: | |||
Less: Allowance for loan losses | (1) | (1) | $ (1) |
Loans on Deposit Accounts | Other Financing Receivables | |||
Other loans: | |||
Total other loans | 235 | 235 | |
Consumer and Other | Other Financing Receivables | |||
Other loans: | |||
Total other loans | $ 10,086 | $ 9,484 |
Loans Receivable and Allowanc_4
Loans Receivable and Allowance for Loan Losses - Activity in Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Activity in allowance for loan losses | ||||||||||
Balance, beginning of period | $ 2,712 | $ 2,642 | $ 2,712 | $ 2,642 | ||||||
Provision (reversal of provision) for loan losses | $ (679) | $ 692 | $ 1,395 | 217 | $ (4) | $ 111 | $ (51) | 5 | 1,625 | 61 |
Allowance for loan losses on loans receivable after provision (reversal of allowance) | 4,337 | 2,703 | ||||||||
Charge-offs | (92) | (48) | ||||||||
Recoveries | 17 | 57 | ||||||||
Net recoveries (charge-offs) | (75) | 9 | ||||||||
Balance, end of period | 4,262 | 2,712 | $ 4,262 | 2,712 | ||||||
Look back period to calculate historical loss of each segment | 7 years | |||||||||
Residential Mortgage | Residential Mortgage | ||||||||||
Activity in allowance for loan losses | ||||||||||
Balance, beginning of period | 1,741 | 1,797 | $ 1,741 | 1,797 | ||||||
Provision (reversal of provision) for loan losses | 1,361 | (84) | ||||||||
Allowance for loan losses on loans receivable after provision (reversal of allowance) | 3,102 | 1,713 | ||||||||
Charge-offs | (8) | |||||||||
Recoveries | 36 | |||||||||
Net recoveries (charge-offs) | 28 | |||||||||
Balance, end of period | 3,102 | 1,741 | 3,102 | 1,741 | ||||||
Construction, commercial and other | Construction, Commercial and Other Mortgage Loans | ||||||||||
Activity in allowance for loan losses | ||||||||||
Balance, beginning of period | 511 | 443 | 511 | 443 | ||||||
Provision (reversal of provision) for loan losses | (105) | 68 | ||||||||
Allowance for loan losses on loans receivable after provision (reversal of allowance) | 406 | 511 | ||||||||
Balance, end of period | 406 | 511 | 406 | 511 | ||||||
Home equity loans and lines of credit | Home Equity Loans and Lines of Credit | ||||||||||
Activity in allowance for loan losses | ||||||||||
Balance, beginning of period | 1 | 1 | 1 | 1 | ||||||
Provision (reversal of provision) for loan losses | (10) | |||||||||
Allowance for loan losses on loans receivable after provision (reversal of allowance) | (9) | 1 | ||||||||
Recoveries | 10 | |||||||||
Net recoveries (charge-offs) | 10 | |||||||||
Balance, end of period | 1 | 1 | 1 | 1 | ||||||
Other Financing Receivables | Consumer and other loans | ||||||||||
Activity in allowance for loan losses | ||||||||||
Balance, beginning of period | 54 | 47 | 54 | 47 | ||||||
Provision (reversal of provision) for loan losses | 177 | 26 | ||||||||
Allowance for loan losses on loans receivable after provision (reversal of allowance) | 231 | 73 | ||||||||
Charge-offs | (92) | (40) | ||||||||
Recoveries | 7 | 21 | ||||||||
Net recoveries (charge-offs) | (85) | (19) | ||||||||
Balance, end of period | 146 | 54 | 146 | 54 | ||||||
Unallocated | Unallocated | ||||||||||
Activity in allowance for loan losses | ||||||||||
Balance, beginning of period | $ 405 | $ 354 | 405 | 354 | ||||||
Provision (reversal of provision) for loan losses | 202 | 51 | ||||||||
Allowance for loan losses on loans receivable after provision (reversal of allowance) | 607 | 405 | ||||||||
Balance, end of period | $ 607 | $ 405 | $ 607 | $ 405 |
Loans Receivable and Allowanc_5
Loans Receivable and Allowance for Loan Losses - Balance in Allowance for Loan Losses and Recorded Investment (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Allowance for loan losses: | |||
Collectively evaluated for impairment | $ 4,262 | $ 2,712 | |
Total ending allowance balance | 4,262 | 2,712 | $ 2,642 |
Loans: | |||
Individually evaluated for impairment | 4,970 | 1,313 | |
Collectively evaluated for impairment | 1,406,287 | 1,586,183 | |
Total ending loan balance | 1,411,257 | 1,587,496 | |
Residential Mortgage | Residential Mortgage | |||
Allowance for loan losses: | |||
Collectively evaluated for impairment | 3,102 | 1,741 | |
Total ending allowance balance | 3,102 | 1,741 | 1,797 |
Loans: | |||
Individually evaluated for impairment | 4,947 | 1,224 | |
Collectively evaluated for impairment | 1,367,576 | 1,543,125 | |
Total ending loan balance | 1,372,523 | 1,544,349 | |
Construction, commercial and other | Construction, Commercial and Other Mortgage Loans | |||
Allowance for loan losses: | |||
Collectively evaluated for impairment | 406 | 511 | |
Total ending allowance balance | 406 | 511 | 443 |
Loans: | |||
Collectively evaluated for impairment | 19,024 | 23,326 | |
Total ending loan balance | 19,024 | 23,326 | |
Home equity loans and lines of credit | Home Equity Loans and Lines of Credit | |||
Allowance for loan losses: | |||
Collectively evaluated for impairment | 1 | 1 | |
Total ending allowance balance | 1 | 1 | 1 |
Loans: | |||
Individually evaluated for impairment | 23 | 89 | |
Collectively evaluated for impairment | 9,353 | 9,997 | |
Total ending loan balance | 9,376 | 10,086 | |
Other Financing Receivables | Consumer and other loans | |||
Allowance for loan losses: | |||
Collectively evaluated for impairment | 146 | 54 | |
Total ending allowance balance | 146 | 54 | 47 |
Loans: | |||
Collectively evaluated for impairment | 10,334 | 9,735 | |
Total ending loan balance | 10,334 | 9,735 | |
Unallocated | Unallocated | |||
Allowance for loan losses: | |||
Collectively evaluated for impairment | 607 | 405 | |
Total ending allowance balance | $ 607 | $ 405 | $ 354 |
Loans Receivable and Allowanc_6
Loans Receivable and Allowance for Loan Losses - Impaired Loans (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Impaired loans | ||
Average Recorded Investment | $ 5,036 | $ 1,370 |
Interest Income Recognized | 33 | 34 |
Loans individually evaluated for impairment with a related allowance for loan loss | 0 | 0 |
One- to four-family residential | ||
Impaired loans | ||
Average Recorded Investment | 5,012 | 1,272 |
Interest Income Recognized | 33 | 34 |
Home Equity Loans and Lines of Credit | ||
Impaired loans | ||
Average Recorded Investment | 24 | 98 |
Individually Evaluated for Impairment | ||
Impaired loans | ||
Recorded Investment | 4,970 | 1,313 |
Unpaid Principal Balance | 5,457 | 1,793 |
Individually Evaluated for Impairment | One- to four-family residential | ||
Impaired loans | ||
Recorded Investment | 4,947 | 1,224 |
Unpaid Principal Balance | 5,425 | 1,615 |
Individually Evaluated for Impairment | Home Equity Loans and Lines of Credit | ||
Impaired loans | ||
Recorded Investment | 23 | 89 |
Unpaid Principal Balance | $ 32 | $ 178 |
Loans Receivable and Allowanc_7
Loans Receivable and Allowance for Loan Losses - Delinquent and Nonaccrual Loans (Details) | 12 Months Ended | |
Dec. 31, 2020USD ($)loan | Dec. 31, 2019USD ($)loan | |
Accounts, Notes, Loans and Financing Receivable | ||
Nonaccrual Loans | $ 4,405,000 | $ 736,000 |
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing | $ 1,000 | |
90 Days or More Past Due | ||
Accounts, Notes, Loans and Financing Receivable | ||
Number of loans | loan | 0 | 1 |
Mortgage loan due | $ 1,000 | |
Fixed-rate mortgage loans | Minimum | ||
Accounts, Notes, Loans and Financing Receivable | ||
Loan delinquency period that may result in loss | 90 days | |
Loan delinquency period after which an appraisal is obtained of the underlying collateral | 4 months | |
Non Accrual Loans | ||
Accounts, Notes, Loans and Financing Receivable | ||
Number of loans | loan | 12 | 6 |
Nonaccrual Loans | $ 4,400,000 | $ 736,000 |
Interest collected on nonaccrual loans recorded as a reduction of principal | 72,000 | 58,000 |
Non accrual loans, additional interest income that would have been recognized had the loans been accruing interest | $ 132,000 | $ 60,000 |
Loans Receivable and Allowanc_8
Loans Receivable and Allowance for Loan Losses - Aging of Loans and Accrual Status (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Financing Receivable, Recorded Investment, Past Due | ||
Total Past Due | $ 792 | $ 1,020 |
Loans Not Past Due | 1,410,465 | 1,586,476 |
Total ending loan balance | 1,411,257 | 1,587,496 |
Nonaccrual Loans | 4,405 | 736 |
Loans 90 Days or More Past Due and Still Accruing | 1 | |
30 - 59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Total Past Due | 377 | 33 |
60 - 89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Total Past Due | 175 | 986 |
90 Days or More Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Total Past Due | 240 | 1 |
Residential Mortgage | One- to four-family residential | ||
Financing Receivable, Recorded Investment, Past Due | ||
Total Past Due | 768 | 959 |
Loans Not Past Due | 1,364,527 | 1,533,446 |
Total ending loan balance | 1,365,295 | 1,534,405 |
Nonaccrual Loans | 4,382 | 647 |
Residential Mortgage | Multi-family residential | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans Not Past Due | 7,228 | 9,944 |
Total ending loan balance | 7,228 | 9,944 |
Residential Mortgage | 30 - 59 Days Past Due | One- to four-family residential | ||
Financing Receivable, Recorded Investment, Past Due | ||
Total Past Due | 376 | |
Residential Mortgage | 60 - 89 Days Past Due | One- to four-family residential | ||
Financing Receivable, Recorded Investment, Past Due | ||
Total Past Due | 152 | 959 |
Residential Mortgage | 90 Days or More Past Due | One- to four-family residential | ||
Financing Receivable, Recorded Investment, Past Due | ||
Total Past Due | 240 | |
Construction, commercial and other | Construction, Commercial and Other Mortgage Loans | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans Not Past Due | 19,024 | 23,326 |
Total ending loan balance | 19,024 | 23,326 |
Home equity loans and lines of credit | Home Equity Loans and Lines of Credit | ||
Financing Receivable, Recorded Investment, Past Due | ||
Total Past Due | 23 | 26 |
Loans Not Past Due | 9,353 | 10,060 |
Total ending loan balance | 9,376 | 10,086 |
Nonaccrual Loans | 23 | 89 |
Home equity loans and lines of credit | 60 - 89 Days Past Due | Home Equity Loans and Lines of Credit | ||
Financing Receivable, Recorded Investment, Past Due | ||
Total Past Due | 23 | 26 |
Other Financing Receivables | Loans on Deposit Accounts | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans Not Past Due | 235 | 235 |
Total ending loan balance | 235 | 235 |
Other Financing Receivables | Consumer and Other | ||
Financing Receivable, Recorded Investment, Past Due | ||
Total Past Due | 1 | 35 |
Loans Not Past Due | 10,098 | 9,465 |
Total ending loan balance | 10,099 | 9,500 |
Loans 90 Days or More Past Due and Still Accruing | 1 | |
Other Financing Receivables | 30 - 59 Days Past Due | Consumer and Other | ||
Financing Receivable, Recorded Investment, Past Due | ||
Total Past Due | $ 1 | 33 |
Other Financing Receivables | 60 - 89 Days Past Due | Consumer and Other | ||
Financing Receivable, Recorded Investment, Past Due | ||
Total Past Due | 1 | |
Other Financing Receivables | 90 Days or More Past Due | Consumer and Other | ||
Financing Receivable, Recorded Investment, Past Due | ||
Total Past Due | $ 1 |
Loans Receivable and Allowanc_9
Loans Receivable and Allowance for Loan Losses - Troubled Debt Restructurings (Details) | 12 Months Ended | |
Dec. 31, 2020USD ($)loan | Dec. 31, 2019USD ($)loan | |
Additional disclosures | ||
Loans modified by troubled debt restructurings considered impaired | $ 1,032,000 | $ 1,166,000 |
Loan deferrals granted, COVID-19 | $ 130,800,000 | |
Percentage of forbearance loans representing total loans receivable, COVID-19 | 9.30% | |
Percentage of current loan balance to the current tax-assessed value of the property securing mortgage loans COVID-19 | 54.90% | |
Real estate owned | $ 0 | $ 0 |
Mortgage loans in process of foreclosure, number of contracts | loan | 0 | |
Accruing interest | ||
Additional disclosures | ||
Number of loans modified by troubled debt restructurings considered impaired | loan | 3 | 3 |
Loans modified by troubled debt restructurings considered impaired | $ 565,000 | $ 577,000 |
Non Accrual Loans | ||
Additional disclosures | ||
Number of loans modified by troubled debt restructurings considered impaired | loan | 2 | 3 |
Loans modified by troubled debt restructurings considered impaired | $ 467,000 | $ 589,000 |
Loans modified in troubled debt restructuring | ||
Troubled debt restructurings | ||
Number of Loans | loan | 0 | 0 |
Number of loans subsequently defaulted | loan | 0 | 0 |
Additional disclosures | ||
Commitments to lend additional funds to borrowers | $ 0 | |
One- to four-family residential | ||
Additional disclosures | ||
Loans modified by troubled debt restructurings considered impaired | $ 1,032,000 | $ 1,102,000 |
Mortgage loans in process of foreclosure, number of contracts | loan | 2 | |
Mortgage loans in process of foreclosure, total value | $ 251,000 | |
One- to four-family residential | Accruing interest | ||
Additional disclosures | ||
Number of loans modified by troubled debt restructurings considered impaired | loan | 3 | 3 |
Loans modified by troubled debt restructurings considered impaired | $ 565,000 | $ 577,000 |
One- to four-family residential | Non Accrual Loans | ||
Additional disclosures | ||
Number of loans modified by troubled debt restructurings considered impaired | loan | 2 | 2 |
Loans modified by troubled debt restructurings considered impaired | $ 467,000 | $ 525,000 |
Home Equity Loans and Lines of Credit | ||
Additional disclosures | ||
Loans modified by troubled debt restructurings considered impaired | $ 64,000 | |
Home Equity Loans and Lines of Credit | Non Accrual Loans | ||
Additional disclosures | ||
Number of loans modified by troubled debt restructurings considered impaired | loan | 1 | |
Loans modified by troubled debt restructurings considered impaired | $ 64,000 | |
Residential Mortgage | One- to four-family residential | ||
Additional disclosures | ||
Loan deferrals granted, COVID-19 | $ 126,300,000 | |
Percentage of forbearance loans representing total loans receivable, COVID-19 | 9.00% | |
Percentage of mortgage loans representing total loan portfolio balance | 96.70% | |
Unallocated | ||
Additional disclosures | ||
Loan deferrals granted, COVID-19 | $ 4,500,000 | |
Percentage of forbearance loans representing total loans receivable, COVID-19 | 0.30% |
Loans Receivable and Allowan_10
Loans Receivable and Allowance for Loan Losses - Collateral, Sales, Serviced for Others, Directors and Executive Officers (Details) | 12 Months Ended | ||
Dec. 31, 2020USD ($)loan | Dec. 31, 2019USD ($)loan | Dec. 31, 2018USD ($) | |
Accounts, Notes, Loans and Financing Receivable | |||
Loans serviced for others | $ 56,700,000 | $ 65,100,000 | |
Fair market value of received mortgage-backed securities | 9,800,000 | 37,900,000 | |
Mortgage servicing assets | 407,000 | 503,000 | $ 226,000 |
Net gain recognized on the securitization | 78,000 | 344,000 | |
Loans serviced for others, securitization for which the company continues to hold the related mortgage-backed securities | 35,500,000 | 37,800,000 | |
Loans serviced for others, amount of contractually specified servicing fees earned | 173,000 | 114,000 | |
Loans to related parties | |||
Loans to directors and executive officers | 622,000 | 661,000 | |
Fixed-rate mortgage loans | |||
Accounts, Notes, Loans and Financing Receivable | |||
Mortgage servicing assets | $ 78,000 | 344,000 | |
Fixed-rate mortgage loans | Maximum | |||
Accounts, Notes, Loans and Financing Receivable | |||
Loan to value ratio (as a percent) | 80.00% | ||
Residential Mortgage Loans Held For Sale | |||
Accounts, Notes, Loans and Financing Receivable | |||
Residential mortgage loans sold, loan amount | $ 43,800,000 | 10,100,000 | |
Residential mortgage loans sold, recognized gains | $ 1,200,000 | $ 89,000 | |
Number of loans | loan | 5 | 1 | |
Residential mortgage loans held for sale | $ 2,200,000 | $ 470,000 | |
Fixed-rate mortgage loans | |||
Accounts, Notes, Loans and Financing Receivable | |||
Book value | 9,400,000 | 36,800,000 | |
Net gain recognized on the securitization | $ 377,000 | $ 1,500,000 |
Accrued Interest Receivable (De
Accrued Interest Receivable (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Components of accrued interest receivable | ||
Accrued interest receivable | $ 6,515 | $ 5,409 |
Payment Deferral | ||
Components of accrued interest receivable | ||
Accrued interest receivable | 1,100 | |
Loan payment deferrals | 130,800 | |
Loans receivable | ||
Components of accrued interest receivable | ||
Accrued interest receivable | 5,872 | 4,425 |
Investment securities | ||
Components of accrued interest receivable | ||
Accrued interest receivable | 627 | 952 |
Interest-bearing deposits | ||
Components of accrued interest receivable | ||
Accrued interest receivable | $ 16 | $ 32 |
Mortgage Servicing Assets (Deta
Mortgage Servicing Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Gross carrying values, accumulated amortization, and net carrying values of mortgage servicing assets | ||
Gain on sale of loans | $ 78,000 | $ 344,000 |
Servicing Asset at Amortized Cost, Additions | 78,000 | 344,000 |
Transfer to Investments | 9,759,000 | 36,826,000 |
Proceeds from sale of mortgage loans on a servicing retained basis | 9,400,000 | 2,200,000 |
Mortgage servicing assets | ||
Balance at beginning of year | 503,000 | 226,000 |
Additions | 78,000 | 344,000 |
Impairments | (73,000) | (16,000) |
Amortization | (101,000) | (51,000) |
Balance at end of year | 407,000 | 503,000 |
Gross carrying value | 1,643,000 | 1,638,000 |
Accumulated amortization | (1,236,000) | (1,135,000) |
Net carrying value | 407,000 | 503,000 |
Estimated amortization expense | ||
Net carrying value | 407,000 | 503,000 |
Fair values and key assumptions used in determining the fair values of mortgage servicing assets | ||
Fair value, beginning of year | 552,000 | 291,000 |
Fair value, end of year | 407,000 | 552,000 |
Annual cost to service (per loan, in dollars) | $ 75 | $ 75 |
Weighted Average | ||
Fair values and key assumptions used in determining the fair values of mortgage servicing assets | ||
Discount rate (as a percent) | 10.25% | 10.25% |
Weighted average prepayment speed assumption (CPR) | 13.57% | 12.58% |
Mortgage-backed securities | ||
Gross carrying values, accumulated amortization, and net carrying values of mortgage servicing assets | ||
Transfer to Investments | $ 36,800,000 | |
Mortgage Servicing Assets | ||
Mortgage servicing assets | ||
Net carrying value | $ 407,000 | |
Estimated amortization expense | ||
2021 | 97,000 | |
2022 | 62,000 | |
2023 | 44,000 | |
2024 | 33,000 | |
2025 | 27,000 | |
Thereafter | 144,000 | |
Net carrying value | $ 407,000 |
Interest Rate Lock and Forwar_3
Interest Rate Lock and Forward Loan Sale Commitments - Notional Amounts (Details) $ in Millions | Dec. 31, 2020USD ($) |
Interest rate locks | |
Interest rate lock and forward loan sale commitments | |
Amount of derivatives | $ 10 |
Forward commitment | Loans receivable | Sale | |
Interest rate lock and forward loan sale commitments | |
Amount of derivatives | $ 12.2 |
Interest Rate Lock and Forwar_4
Interest Rate Lock and Forward Loan Sale Commitments - Location of Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Assets and liabilities related to derivatives | ||
Fair value of asset derivatives | $ 38 | $ 5 |
Fair value of liability derivatives | 38 | 5 |
Interest rate contracts | Prepaid expenses and other assets | ||
Assets and liabilities related to derivatives | ||
Fair value of asset derivatives | 38 | 5 |
Interest rate contracts | Accounts payable and accrued expenses | ||
Assets and liabilities related to derivatives | ||
Fair value of liability derivatives | $ 38 | $ 5 |
Interest Rate Lock and Forwar_5
Interest Rate Lock and Forward Loan Sale Commitments - Location of Gains and Losses (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Interest Rate Lock and Forward Loan Sale Commitments | ||
Gain (loss) related to derivatives | $ 0 | $ 0 |
Premises and Equipment (Details
Premises and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Premises and equipment | ||
Gross | $ 23,546 | $ 22,127 |
Less accumulated depreciation and amortization | (18,701) | (17,900) |
Net | 4,845 | 4,227 |
Construction in progress | 10 | 143 |
Total | 4,855 | 4,370 |
Depreciation expense | 1,200 | 1,200 |
Land | ||
Premises and equipment | ||
Gross | 585 | 585 |
Buildings and improvements | ||
Premises and equipment | ||
Gross | 1,365 | 1,365 |
Leasehold improvements | ||
Premises and equipment | ||
Gross | 14,671 | 14,027 |
Furniture, fixtures and equipment | ||
Premises and equipment | ||
Gross | 6,807 | 6,035 |
Automobiles | ||
Premises and equipment | ||
Gross | $ 118 | $ 115 |
Deposits (Details)
Deposits (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Deposit amount | ||
Non-interest bearing | $ 66,014,000 | $ 54,927,000 |
Savings accounts | 1,010,891,000 | 908,175,000 |
Certificates of deposit | 321,778,000 | 463,943,000 |
Money market | 7,749,000 | 4,917,000 |
Checking and Super NOW | 253,368,000 | 199,971,000 |
Total | $ 1,659,800,000 | $ 1,631,933,000 |
Interest rate | ||
Savings accounts (as a percent) | 0.15% | 0.49% |
Certificates of deposit (as a percent) | 1.34% | 1.87% |
Money market (as a percent) | 0.20% | 0.45% |
Checking and Super NOW (as a percent) | 0.02% | 0.02% |
Total (as a percent) | 0.36% | 0.81% |
Maturity of certificate of deposit accounts | ||
2021 | $ 221,647,000 | |
2022 | 66,610,000 | |
2023 | 16,975,000 | |
2024 | 12,533,000 | |
2025 | 4,013,000 | |
Total | 321,778,000 | $ 463,943,000 |
Deposit with balances greater than or equal to $250,000 | ||
Maximum amount of account owner deposit in bank insured by FDIC | 250,000 | |
Interest expense by type of deposit | ||
Savings | 2,486,000 | 4,593,000 |
Certificates of deposit and money market | 6,479,000 | 8,829,000 |
Checking and Super NOW | 48,000 | 41,000 |
Total | 9,013,000 | 13,463,000 |
Overdrawn deposit accounts reclassified as loans | 15,000 | 37,000 |
Domestic | ||
Deposit with balances greater than or equal to $250,000 | ||
Total | $ 172,700,000 | $ 272,700,000 |
Advances from the Federal Hom_3
Advances from the Federal Home Loan Bank (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Federal Home Loan Bank advances | ||
Federal Home Loan Bank stock, at cost | $ 8,144 | $ 8,723 |
Federal Home Loan Bank, Advances, Rolling Maturity | ||
Due within one year | 20,000 | |
Due over 1 year to 2 years | 10,000 | 57,000 |
Due over 2 years to 3 years | 34,000 | 30,000 |
Due over 3 years to 4 years | 77,000 | 19,000 |
Due over 4 years to 5 years | 20,000 | 30,000 |
Total | $ 141,000 | $ 156,000 |
Weighted Average Rate | ||
Due within one year (as a percent) | 2.16% | |
Due over 1 year to 2 years (as a percent) | 2.13% | 2.50% |
Due over 2 years to 3 years (as a percent) | 1.58% | 2.37% |
Due over 3 years to 4 years (as a percent) | 1.40% | 2.16% |
Due over 4 years to 5 years (as a percent) | 1.57% | 1.87% |
Total (as a percent) | 1.52% | 2.27% |
Extended Maturity [Member] | ||
Federal Home Loan Bank advances | ||
Federal Home Loan Bank stock, at cost | $ 82,000 | |
Federal home loan bank, advances | 1.52% | 2.28% |
Extended Term | 1 year 10 months 24 days | |
FHLB Des Moines | ||
Federal Home Loan Bank advances | ||
Available additional unused FHLB advances | $ 807,200 | $ 727,500 |
Territorial Savings Bank | ||
Federal Home Loan Bank advances | ||
Federal Home Loan Bank stock, at cost | $ 8,100 | $ 8,700 |
Territorial Savings Bank | FHLB Des Moines | ||
Federal Home Loan Bank advances | ||
Percentage of total assets used to determine maximum line of credit | 45.00% |
Securities Sold Under Agreeme_3
Securities Sold Under Agreements to Repurchase - Summary of Repurchase Liability by Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Securities sold under agreements to repurchase | ||
Repurchase Liability | $ 10,000 | $ 10,000 |
Weighted Average | ||
Securities sold under agreements to repurchase | ||
Rate (as a percent) | 1.81% | 1.77% |
1 year or less | ||
Securities sold under agreements to repurchase | ||
Repurchase Liability | $ 5,000 | |
1 year or less | Weighted Average | ||
Securities sold under agreements to repurchase | ||
Rate (as a percent) | 1.65% | |
Over 3 years to 4 years | ||
Securities sold under agreements to repurchase | ||
Repurchase Liability | $ 5,000 | |
Over 3 years to 4 years | Weighted Average | ||
Securities sold under agreements to repurchase | ||
Rate (as a percent) | 1.88% | |
Over 4 years to 5 years | ||
Securities sold under agreements to repurchase | ||
Repurchase Liability | $ 5,000 | $ 5,000 |
Over 4 years to 5 years | Weighted Average | ||
Securities sold under agreements to repurchase | ||
Rate (as a percent) | 1.73% | 1.88% |
Securities Sold Under Agreeme_4
Securities Sold Under Agreements to Repurchase - Summary of Securities Pledged (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Securities sold under agreements to repurchase | |
Repurchase liability maximum | 90.00% |
Maturing Over 90 days | |
Securities sold under agreements to repurchase | |
Carrying Value of Securities | $ 10,253 |
Fair Value of Securities | 11,234 |
Repurchase Liability | 10,000 |
Amount at Risk | $ 1,234 |
Weighted Average Months to Maturity | 48 months |
Offsetting of Financial Liabi_3
Offsetting of Financial Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Securities sold under agreements to repurchase | ||
Gross Amount of Recognized Liabilities | $ 10,000 | $ 10,000 |
Net Amount of Liabilities Presented in the Balance Sheet | 10,000 | 10,000 |
Gross amount not offset in the balance sheet | ||
Financial Instruments | $ 10,000 | $ 10,000 |
Income Taxes - Provision and Re
Income Taxes - Provision and Reconciliation to Federal Statutory Corporate Tax Rate (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2017 | |
Current | |||||||||||
Federal | $ 5,157 | $ 3,366 | |||||||||
State | 1,950 | 1,479 | |||||||||
Total current | 7,107 | 4,845 | |||||||||
Deferred | |||||||||||
Federal | (231) | 1,147 | |||||||||
State | (161) | 319 | |||||||||
Total deferred | (392) | 1,466 | |||||||||
Total income tax expense | $ 1,910 | $ 1,645 | $ 1,570 | $ 1,590 | $ 1,148 | $ 1,775 | $ 1,415 | $ 1,973 | $ 6,715 | $ 6,311 | |
Federal statutory corporate tax rate (as a percent) | 21.00% | 21.00% | 35.00% | ||||||||
Reconciliation of tax provision | |||||||||||
Income tax expense at statutory rate | $ 5,317 | $ 5,944 | |||||||||
Income tax effect of: | |||||||||||
Other tax-exempt income | (194) | (263) | |||||||||
Share-based compensation | 70 | (69) | |||||||||
Meal and entertainment expenses | 51 | 82 | |||||||||
State income taxes, net of federal income tax benefits | 1,574 | 1,301 | |||||||||
Tax benefit from the exercise of stock options | (63) | (297) | |||||||||
Tax benefit from tax depreciation study (1) | (402) | ||||||||||
Non-deductible executive compensation | 67 | ||||||||||
Other | (107) | 15 | |||||||||
Total income tax expense | $ 1,910 | $ 1,645 | $ 1,570 | $ 1,590 | $ 1,148 | $ 1,775 | $ 1,415 | $ 1,973 | $ 6,715 | $ 6,311 | |
Effective income tax rate (as a percent) | 26.52% | 22.29% | |||||||||
Federal statutory corporate tax rate (as a percent) | 21.00% | 21.00% | 35.00% |
Income Taxes - Components of In
Income Taxes - Components of Income Taxes Payable (Receivable) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Components of income taxes payable (receivable) | ||
Current taxes payable | $ 2,161 | $ 2,305 |
Deferred taxes receivable | (3,382) | (2,619) |
State | ||
Components of income taxes payable (receivable) | ||
Current taxes payable | 1,922 | 1,538 |
Deferred taxes receivable | (1,230) | (968) |
Federal | ||
Components of income taxes payable (receivable) | ||
Current taxes payable | 239 | 767 |
Deferred taxes receivable | $ (2,152) | $ (1,651) |
Income Taxes - Deferred Tax Com
Income Taxes - Deferred Tax Components (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2017 | |
Deferred tax assets: | |||
Premises and equipment | $ 392 | $ 547 | |
Hawaii franchise tax | 476 | 479 | |
Unfunded pension liability | 1,250 | 925 | |
Allowance for loan losses | 1,135 | 722 | |
Employee benefit plans | 2,706 | 2,692 | |
Equity incentive plan | 210 | 350 | |
Deferred compensation | 339 | 413 | |
Net lease liability | 209 | 161 | |
Other | 22 | 8 | |
Total | 6,739 | 6,297 | |
Deferred tax liabilities: | |||
Deferred loan costs | 2,926 | 3,078 | |
FHLB stock dividends | 126 | 126 | |
Prepaid expense | 97 | 155 | |
Unrealized gain on securities available-for-sale | 100 | 185 | |
Premium on loans sold | 108 | 134 | |
Total | 3,357 | 3,678 | |
Net deferred tax assets | $ 3,382 | $ 2,619 | |
Federal statutory corporate tax rate (as a percent) | 21.00% | 21.00% | 35.00% |
Valuation allowance for deferred tax assets | $ 0 | $ 0 |
Employee Benefit Plans - Pensio
Employee Benefit Plans - Pension Plan Participants (Details) - Pension Plan | Dec. 31, 2008 | Dec. 31, 2020 |
Employee benefit plans | ||
Vesting percentage for employees already enrolled with at least five years of service as of effective date of plan change | 100.00% | |
Minimum service period for employees already enrolled to be 100% vested as of effective date of plan change | 5 years | |
Vesting period if minimum service period for employees already enrolled was not met as of effective date of plan change | 5 years | |
Minimum | ||
Employee benefit plans | ||
Required service period to participate in the plan | 1 year |
Employee Benefit Plans - Status
Employee Benefit Plans - Status of Pension Plan and SERP (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Change in projected benefit obligation: | |||
Actuarial loss (gain) | $ 2,800 | ||
Pension Plan | |||
Employee benefit plans | |||
Accumulated benefit obligation at end of year | 24,130 | $ 21,367 | |
Change in projected benefit obligation: | |||
Benefit obligation at beginning of year | 21,367 | 18,713 | |
Service cost | 174 | 164 | |
Interest cost | 722 | 811 | |
Actuarial loss (gain) | 2,776 | 2,558 | |
Benefits paid | (909) | (879) | |
Benefit obligation at end of year | 24,130 | 21,367 | |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 19,435 | 17,500 | |
Actual return on plan assets | 2,625 | 2,814 | |
Benefits paid | (909) | (879) | |
Fair value of plan assets at end of year | 21,151 | 19,435 | |
Funded status at end of year | (2,979) | (1,932) | |
Amounts recognized in accumulated other comprehensive loss: | |||
Net actuarial loss | 12,088 | 11,008 | |
Prior service cost | 134 | 139 | |
Accumulated other comprehensive loss, before tax | 12,222 | 11,147 | $ 10,524 |
Pension Plan | Accounts payable and accrued expenses | |||
Amounts recognized in the Consolidated Balance Sheets: | |||
Accounts payable and accrued expenses - liability | (2,979) | (1,932) | |
Supplemental Employee Retirement Plan (SERP) | |||
Employee benefit plans | |||
Accumulated benefit obligation at end of year | 9,866 | 9,702 | |
Change in projected benefit obligation: | |||
Benefit obligation at beginning of year | 9,702 | 9,473 | |
Service cost | 9 | 84 | |
Interest cost | 172 | 162 | |
Benefits paid | (17) | (17) | |
Benefit obligation at end of year | 9,866 | 9,702 | |
Change in plan assets: | |||
Employer contributions | 17 | 17 | |
Benefits paid | (17) | (17) | |
Funded status at end of year | (9,866) | (9,702) | |
Supplemental Employee Retirement Plan (SERP) | Accounts payable and accrued expenses | |||
Amounts recognized in the Consolidated Balance Sheets: | |||
Accounts payable and accrued expenses - liability | $ (9,866) | $ (9,702) |
Employee Benefit Plans - Change
Employee Benefit Plans - Changes Recognized in Accumulated Other Comprehensive Loss for Pension Plan (Details) - Pension Plan - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Amounts recognized in accumulated other comprehensive loss: | ||
Accumulated other comprehensive loss at beginning of year, before tax | $ 11,147 | $ 10,524 |
Actuarial net loss arising during the period | 1,455 | 961 |
Amortizations (recognized in net periodic benefit cost): | ||
Actuarial loss | (375) | (333) |
Prior service cost | (5) | (5) |
Total recognized in other comprehensive loss | 1,075 | 623 |
Accumulated other comprehensive loss at end of year, before tax | $ 12,222 | $ 11,147 |
Employee Benefit Plans - Assump
Employee Benefit Plans - Assumptions Used to Determine Benefit Obligations and Pension Plan Investment Strategy (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Pension Plan | ||
Weighted average assumptions used to determine the year-end benefit obligations | ||
Discount rate (as a percent) | 2.50% | 3.30% |
Pension Plan | Domestic equity securities | ||
Normal target allocation | ||
Normal target allocation (as a percent) | 55.00% | |
Pension Plan | International equity securities | ||
Normal target allocation | ||
Normal target allocation (as a percent) | 10.00% | |
Pension Plan | Bonds | ||
Normal target allocation | ||
Normal target allocation (as a percent) | 35.00% | |
Supplemental Employee Retirement Plan (SERP) | ||
Weighted average assumptions used to determine the year-end benefit obligations | ||
Discount rate (as a percent) | 5.01% | 5.02% |
Rate of compensation increase (as a percent) | 5.00% | 5.00% |
Employee Benefit Plans - Pens_2
Employee Benefit Plans - Pension Plan Assets Measured at Fair Value (Details) - Pension Plan - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Assets measured at fair values | |||
Fair value of assets | $ 21,151 | $ 19,435 | $ 17,500 |
Cash | |||
Assets measured at fair values | |||
Fair value of assets | 1,971 | 3,021 | |
Equities | |||
Assets measured at fair values | |||
Fair value of assets | 14,004 | 11,576 | |
Mutual funds | |||
Assets measured at fair values | |||
Fair value of assets | 5,176 | 4,838 | |
Level 1 | |||
Assets measured at fair values | |||
Fair value of assets | 21,151 | 19,435 | |
Level 1 | Cash | |||
Assets measured at fair values | |||
Fair value of assets | 1,971 | 3,021 | |
Level 1 | Equities | |||
Assets measured at fair values | |||
Fair value of assets | 14,004 | 11,576 | |
Level 1 | Mutual funds | |||
Assets measured at fair values | |||
Fair value of assets | $ 5,176 | $ 4,838 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Pension Plan | ||
Estimated future benefit payments | ||
2021 | $ 1,379,000 | |
2022 | 1,435,000 | |
2023 | 1,441,000 | |
2024 | 1,444,000 | |
2025 | 1,430,000 | |
2026 - 2030 | 6,868,000 | |
Total | $ 13,997,000 | |
Assumptions used to determine the net periodic benefit cost: | ||
Discount rate (as a percent) | 3.30% | 4.30% |
Expected return on plan assets (as a percent) | 7.00% | 7.25% |
Net periodic benefit cost (income) for the year: | ||
Service cost | $ 174,000 | $ 164,000 |
Interest cost | 722,000 | 811,000 |
Expected return on plan assets | (1,304,000) | (1,217,000) |
Amortization of prior service cost | 5,000 | 5,000 |
Recognized actuarial loss | 375,000 | 333,000 |
Net periodic benefit cost | (28,000) | $ 96,000 |
Supplemental Employee Retirement Plan (SERP) | ||
Estimated future benefit payments | ||
2021 | 17,000 | |
2022 | 8,671,000 | |
2023 | 149,000 | |
2024 | 149,000 | |
2025 | 149,000 | |
2026 - 2030 | 743,000 | |
Total | $ 9,878,000 | |
Assumptions used to determine the net periodic benefit cost: | ||
Discount rate (as a percent) | 5.02% | 5.02% |
Rate of compensation increase (as a percent) | 5.00% | 5.00% |
Net periodic benefit cost (income) for the year: | ||
Service cost | $ 9,000 | $ 84,000 |
Interest cost | 172,000 | 162,000 |
Net periodic benefit cost | 181,000 | $ 246,000 |
Expected contribution | ||
2020 | $ 17,000 |
Employee Benefit Plans - Define
Employee Benefit Plans - Defined Contribution and Profit Sharing Plans (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Defined Contribution Plan Disclosure [Line Items] | ||
Required service period to participate in plans | 1 year | |
401(k) plan | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Company matching contribution of employees' contributions (as a percent) | 5.00% | 5.00% |
Employer's matching contribution (in dollars) | $ 65,000 | $ 62,000 |
Profit sharing plan | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Employer's matching contribution (in dollars) | $ 0 | $ 0 |
Employee Stock Ownership Plan -
Employee Stock Ownership Plan - Loan, Expense and Shares (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 01, 2009 | Dec. 31, 2020 | Dec. 31, 2019 |
Employee Stock Ownership Plan | |||
Allocated shares | 507,304 | 466,807 | |
Unearned shares | 391,464 | 440,397 | |
Total ESOP shares | 898,768 | 907,204 | |
Fair value of unearned shares, in thousands | $ 9,407 | $ 13,626 | |
ESOP | |||
Employee Stock Ownership Plan | |||
Amount borrowed from employer | $ 9,800 | ||
Shares purchased | 978,650 | ||
Percentage of shares issued in initial public offering | 8.00% | ||
Employee stock ownership plan, price per share of shares acquired in initial public offering (in dollars per share) | $ 10 | ||
Term of loan | 20 years | ||
ESOP expense | $ 1,200 | $ 1,400 | |
ESOP | Prime rate | |||
Employee Stock Ownership Plan | |||
Variable interest rate | prime rate, as published in The Wall Street Journal |
Employee Stock Ownership Plan_2
Employee Stock Ownership Plan - Nonqualified ESOP Restoration Plan (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
ESOP restoration | Certain executives | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits | ||
Accrued (reversed) benefits | $ 137,000 | $ 350,000 |
Share-Based Compensation - Plan
Share-Based Compensation - Plan Provisions (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-Based Compensation | ||
Compensation expense | $ 619 | $ 571 |
Income tax benefit | $ 169 | $ 156 |
Number of shares authorized | 1,862,637 | |
2010 Equity Incentive Plan | Vesting period one | ||
Share-Based Compensation | ||
Vesting period | 3 years | |
2010 Equity Incentive Plan | Vesting period two | ||
Share-Based Compensation | ||
Vesting period | 5 years | |
2010 Equity Incentive Plan | Vesting period three | ||
Share-Based Compensation | ||
Vesting period | 6 years |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock Option Activity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock option activity | |||
Granted (in shares) | 0 | ||
Common Stock | |||
Stock option activity | |||
Exercised (in shares) | 81,827 | 221,245 | |
Stock option activity | |||
Shares of common stock issued in exchange for stock options and common shares | 27,194 | ||
Common shares exchanged | 54,633 | ||
Stock Options | |||
Stock option activity | |||
Balance at beginning of period (in shares) | 116,409 | 337,654 | |
Exercised (in shares) | 81,827 | 221,245 | |
Expired (in shares) | 31,497 | ||
Balance at end of period (in shares) | 3,085 | 116,409 | 337,654 |
Options vested and exercisable (in shares) | 3,085 | ||
Weighted Average Exercise Price | |||
Balance at beginning of period (in dollars per share) | $ 17.53 | $ 17.51 | |
Exercised (in dollars per share) | 17.36 | 17.50 | |
Balance at end of period (in dollars per share) | 23.62 | $ 17.53 | $ 17.51 |
Options vested and exercisable (in dollars per share) | $ 23.62 | ||
Remaining Contractual Life | |||
Options outstanding | 1 year 8 months 1 day | 8 months 19 days | 1 year 8 months 26 days |
Options vested and exercisable | 1 year 8 months 1 day | ||
Aggregate Intrinsic Value | |||
Beginning of period | $ 1,562,000 | $ 2,859,000 | |
Exercised | 725,000 | 2,483,000 | |
End of period | 1,265,000 | 1,562,000 | $ 2,859,000 |
Options vested and exercisable | 1,265,000 | ||
Stock option activity | |||
Intrinsic value of stock options exercised | 725,000 | 2,483,000 | |
Proceeds received from stock options exercised | 1,421,000 | 3,873,000 | |
Tax benefits realized from stock options exercised | $ 158,000 | $ 534,000 | |
Common shares exchanged | 81,827 | ||
Unrecognized compensation costs | $ 0 |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Stock Awards (Details) - USD ($) | Mar. 12, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | May 16, 2019 |
Unrecognized compensation | ||||
Granted (in shares) | 0 | |||
Restricted Stock | ||||
Restricted Stock Awards | ||||
Unvested at beginning of period (in shares) | 20,249 | 16,424 | ||
Granted (in shares) | 13,444 | 10,366 | ||
Vested (in shares) | 9,998 | 6,541 | ||
Unvested at end of period (in shares) | 23,695 | 20,249 | ||
Weighted Average Grant Date Fair Value | ||||
Unvested at beginning of period (in dollars per share) | $ 28.78 | $ 30.26 | ||
Granted (in dollars per share) | 21.05 | 27.30 | ||
Vested (in dollars per share) | 29.16 | 30.14 | ||
Unvested at end of period (in dollars per share) | $ 24.24 | $ 28.78 | ||
Unrecognized compensation | ||||
Vesting period | 3 years | |||
Unrecognized compensation costs | $ 337,000 | |||
Unrecognized compensation costs, period of recognition | 1 year 7 months 6 days | |||
Equity Incentive Plan, 2019 | ||||
Unrecognized compensation | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 15,000 | |||
Restricted Stock Units Based on a Performance Condition | ||||
Restricted Stock Awards | ||||
Unvested at beginning of period (in shares) | 35,976 | 23,538 | ||
Granted (in shares) | 16,129 | 12,438 | ||
Vested (in shares) | 7,680 | |||
Forfeited (in shares) | 3,840 | |||
Unvested at end of period (in shares) | 40,585 | 35,976 | ||
Weighted Average Grant Date Fair Value | ||||
Unvested at beginning of period (in dollars per share) | $ 29.16 | $ 30.14 | ||
Granted (in dollars per share) | 21.05 | 27.30 | ||
Vested (in dollars per share) | 29.53 | |||
Forfeited (in dollars per share) | 29.53 | |||
Unvested at end of period (in dollars per share) | $ 25.83 | $ 29.16 | ||
Unrecognized compensation | ||||
Vesting period | 3 years | |||
Unrecognized compensation costs | $ 340,000 | |||
Unrecognized compensation costs, period of recognition | 1 year 9 months 18 days | |||
Restricted Stock Units Based on a Performance Condition | Minimum | ||||
Unrecognized compensation | ||||
Shares vesting as a percentage of target | 0.00% | |||
Restricted Stock Units Based on a Performance Condition | Maximum | ||||
Unrecognized compensation | ||||
Shares vesting as a percentage of target | 150.00% | |||
Restricted Stock Units Based on a Market Condition | ||||
Restricted Stock Awards | ||||
Unvested at beginning of period (in shares) | 8,994 | 5,884 | ||
Granted (in shares) | 4,032 | 3,110 | ||
Vested (in shares) | 1,197 | |||
Forfeited (in shares) | 1,682 | |||
Unvested at end of period (in shares) | 10,147 | 8,994 | ||
Weighted Average Grant Date Fair Value | ||||
Unvested at beginning of period (in dollars per share) | $ 25.74 | $ 26.42 | ||
Granted (in dollars per share) | 22.16 | 24.45 | ||
Vested (in dollars per share) | 24.44 | |||
Forfeited (in dollars per share) | 24.44 | |||
Unvested at end of period (in dollars per share) | $ 24.69 | 25.74 | ||
Unrecognized compensation | ||||
Vesting period | 3 years | |||
Unrecognized compensation costs | $ 76,000 | |||
Unrecognized compensation costs, period of recognition | 1 year 9 months 18 days | |||
Assumptions used in the Monte Carlo valuation of PRSUs | ||||
Term used for risk-free rate | 2 years 9 months 25 days | |||
Term used for risk-free rate and historical volatility | 2 years 9 months 25 days | |||
Risk-free interest rate (as a percent) | 0.56% | |||
Closing stock price (in dollars per share) | $ 21.05 | $ 30.94 | ||
Annualized volatility (as a percent) | 18.02% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings Per Share | ||||||||||
Net income | $ 5,523 | $ 4,318 | $ 4,291 | $ 4,473 | $ 5,045 | $ 5,366 | $ 5,060 | $ 6,524 | $ 18,605 | $ 21,995 |
Income allotted to participating securities | (78) | (149) | ||||||||
Net income available to common shareholders | $ 18,527 | $ 21,846 | ||||||||
Weighted-average number of shares used in: | ||||||||||
Basic earnings per share (in shares) | 9,137,398 | 9,196,674 | ||||||||
Dilutive common stock equivalents: | ||||||||||
Stock options and restricted stock units (in shares) | 59,291 | 128,940 | ||||||||
Diluted earnings per share (in shares) | 9,196,689 | 9,325,614 | ||||||||
Net income per common share, basic (in dollars per share) | $ 0.61 | $ 0.47 | $ 0.47 | $ 0.48 | $ 0.54 | $ 0.58 | $ 0.55 | $ 0.71 | $ 2.03 | $ 2.38 |
Net income per common share, diluted (in dollars per share) | $ 0.59 | $ 0.47 | $ 0.47 | $ 0.48 | $ 0.53 | $ 0.57 | $ 0.54 | $ 0.70 | $ 2.01 | $ 2.34 |
Other Comprehensive Loss - Chan
Other Comprehensive Loss - Changes in Components of Accumulated Other Comprehensive Income and Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Changes in the components of accumulated other comprehensive loss, net of taxes | ||
Balances at beginning of period | $ (243,890) | $ (235,079) |
Other comprehensive income, net of taxes | 1,023 | (141) |
Net current period other comprehensive (gain) loss | 1,023 | (141) |
Balances at end of period | (248,708) | (243,890) |
Accumulated Other Comprehensive Loss | ||
Changes in the components of accumulated other comprehensive loss, net of taxes | ||
Balances at beginning of period | 7,668 | 7,809 |
Other comprehensive income, net of taxes | 802 | (264) |
Net current period other comprehensive (gain) loss | 1,023 | (141) |
Balances at end of period | 8,691 | 7,668 |
Unfunded Pension Liability | ||
Changes in the components of accumulated other comprehensive loss, net of taxes | ||
Balances at beginning of period | 8,178 | 7,721 |
Other comprehensive income, net of taxes | 789 | 457 |
Net current period other comprehensive (gain) loss | 789 | 457 |
Balances at end of period | 8,967 | 8,178 |
Amount Reclassified from Other Comprehensive Income | ||
Changes in the components of accumulated other comprehensive loss, net of taxes | ||
Other comprehensive income, net of taxes | 221 | 123 |
Amounts reclassified from accumulated other comprehensive income, net of taxes | 221 | 123 |
Unrealized (Gain)/Loss on Securities | ||
Changes in the components of accumulated other comprehensive loss, net of taxes | ||
Balances at beginning of period | (510) | 88 |
Other comprehensive income, net of taxes | 13 | (721) |
Net current period other comprehensive (gain) loss | 234 | (598) |
Balances at end of period | $ (276) | $ (510) |
Other Comprehensive Loss - Tax
Other Comprehensive Loss - Tax Effect on Each Component (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Tax effect on each component of other comprehensive loss | ||
Pretax amount | $ 1,394 | $ (192) |
Tax | (371) | 51 |
After Tax Amount | 1,023 | (141) |
Accumulated Other Comprehensive Loss | ||
Tax effect on each component of other comprehensive loss | ||
After Tax Amount | 802 | (264) |
Unfunded Pension Liability | ||
Tax effect on each component of other comprehensive loss | ||
Pretax amount | 1,075 | 623 |
Tax | (286) | (166) |
After Tax Amount | 789 | 457 |
Unrealized (Gain)/Loss on Securities | ||
Tax effect on each component of other comprehensive loss | ||
Pretax amount | 18 | (983) |
Tax | (5) | 262 |
After Tax Amount | 13 | (721) |
Amount Reclassified from Other Comprehensive Income | ||
Tax effect on each component of other comprehensive loss | ||
Pretax amount | 301 | 168 |
Tax | (80) | (45) |
After Tax Amount | $ 221 | $ 123 |
Commitments - Loans (Details)
Commitments - Loans (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Commitments to originate loans | ||
Loan Commitments | ||
Commitment amount | $ 21.3 | $ 8.7 |
Commitments to originate loans | Minimum | ||
Loan Commitments | ||
Interest rate (as a percent) | 2.25% | 3.375% |
Commitments to originate loans | Maximum | ||
Loan Commitments | ||
Interest rate (as a percent) | 3.125% | 4.00% |
Unused lines of credit to borrowers | ||
Loan Commitments | ||
Commitment amount | $ 20.7 | $ 24.5 |
Commitments - Leases (Details)
Commitments - Leases (Details) $ in Millions | Dec. 31, 2019USD ($) |
Reserve Requirements | |
Federal Reserve Bank reserve requirements | $ 13.5 |
Regulatory Capital and Superv_3
Regulatory Capital and Supervision (Details) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($)item | Jan. 01, 2019 | Dec. 31, 2018USD ($) | Jan. 01, 2015USD ($) | Dec. 31, 2014 | |
Total Risk-Based Capital | ||||||
Number of conditions or events that have changed the institution's category under capital guidelines | item | 0 | 0 | ||||
Territorial Savings Bank | ||||||
Regulatory capital and supervision | ||||||
Well capitalized threshold for Tier 1 risk-based capital (percent) | 8 | 6 | ||||
Well capitalized threshold for Common Equity Tier 1 risk-based capital (percent) | 6.50% | |||||
Minimum capital conservation buffer | 2.5 | 2.50 | ||||
Tier 1 Leverage Capital | ||||||
Required Ratio | 5 | 5 | ||||
Actual Amount | $ 239,256 | $ 227,507 | ||||
Actual Ratio | 11.38 | 10.92 | ||||
Common Equity Tier 1 Risk-Based Capital | ||||||
Required Ratio | 9.00% | 9.00% | ||||
Actual Amount | $ 239,256 | $ 227,507 | ||||
Actual Ratio | 27.49% | 23.31% | ||||
Tier 1 Risk-Based Capital | ||||||
Required Ratio | 10.50 | 10.50 | ||||
Actual Amount | $ 239,256 | $ 227,507 | ||||
Actual Ratio | 27.49 | 23.31 | ||||
Total Risk-Based Capital | ||||||
Required Ratio | 12.50 | 12.50 | ||||
Actual Amount | $ 243,608 | $ 230,304 | ||||
Actual Ratio | 27.99 | 23.59 | ||||
Territorial Bancorp Inc. | ||||||
Regulatory capital and supervision | ||||||
Threshold of assets requiring consolidated regulatory capital requirements identical to those applicable to subsidiary depository institutions | $ 3,000,000 | $ 3,000,000 | $ 1,000,000 | |||
Tier 1 Leverage Capital | ||||||
Actual Amount | $ 257,399 | $ 251,558 | ||||
Actual Ratio | 12.24 | 12.06 | ||||
Common Equity Tier 1 Risk-Based Capital | ||||||
Actual Amount | $ 257,399 | $ 251,558 | ||||
Actual Ratio | 29.57% | 25.77% | ||||
Tier 1 Risk-Based Capital | ||||||
Actual Amount | $ 257,399 | $ 251,558 | ||||
Actual Ratio | 29.57 | 25.77 | ||||
Total Risk-Based Capital | ||||||
Actual Amount | $ 261,751 | $ 254,355 | ||||
Actual Ratio | 30.07 | 26.06 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues | ||
Revenue from contracts with customers | $ 2,808 | $ 1,929 |
Other revenue | 243 | 618 |
Total | 2,662 | 1,937 |
Total other noninterest income | 389 | 610 |
Total revenue from contracts with customers and other revenue | 3,051 | 2,547 |
Service Fees on Loan and Deposit Accounts | ||
Revenues | ||
Revenue from contracts with customers | 2,565 | 1,779 |
Other revenue | 97 | 158 |
Total | 2,662 | 1,937 |
Other | ||
Revenues | ||
Revenue from contracts with customers | 243 | 150 |
Other revenue | 146 | 460 |
Total other noninterest income | $ 389 | $ 610 |
Leases - Lease Costs (Details)
Leases - Lease Costs (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases | ||
Minimum rental expense | $ 110,000 | $ 110,000 |
Lease costs: | ||
Operating lease costs | 3,365,000 | 3,130,000 |
Short-term lease costs | 23,000 | 57,000 |
Variable lease costs | 163,000 | 129,000 |
Total lease costs | 3,551,000 | 3,316,000 |
Cash paid for amounts included in measurement of lease liabilities | 3,238,000 | 2,991,000 |
Establishment of right-of-use asset, net of incentives | 4,042,000 | 14,341,000 |
Rental expense, minimum rentals | $ 3,400,000 | $ 3,100,000 |
Leases - Future Minimum Rental
Leases - Future Minimum Rental Commitments Under Non-cancellable Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Future minimum rental commitments: | ||
2021 | $ 3,055 | |
2022 | 2,760 | |
2023 | 2,407 | |
2024 | 2,152 | |
2025 | 1,461 | |
Thereafter | 3,824 | |
Total | 15,659 | |
Less present value discount | 2,540 | |
Present value of leases | $ 13,119 | $ 12,183 |
Leases - Other Related Informat
Leases - Other Related Information (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Leases | ||
Weighted-average remaining lease term (years) | 5 years 11 months 1 day | 5 years 11 months 26 days |
Weighted-average discount rate | 2.29% | 2.76% |
Leases - Future minimum renta_2
Leases - Future minimum rental income (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases | ||
2021 | $ 110,000 | |
Total | 110,000 | |
Minimum rental expense | $ 110,000 | $ 110,000 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Estimated Fair Values (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Investment securities available for sale, at fair value | $ 3,562 | $ 8,628 |
Investment securities held to maturity | 262,841 | 371,305 |
Carrying Amount | ||
Assets | ||
Cash and cash equivalents | 363,543 | 44,806 |
Investment securities available for sale, at fair value | 3,562 | 8,628 |
Investment securities held to maturity | 247,642 | 363,883 |
Loans held for sale | 2,195 | 470 |
Loans receivable, net | 1,406,995 | 1,584,784 |
FHLB stock | 8,144 | 8,723 |
FRB stock | 3,145 | 3,128 |
Accrued interest receivable | 6,515 | 5,409 |
Interest rate contracts | 38 | 5 |
Liabilities | ||
Deposits | 1,659,800 | 1,631,933 |
Advances from the Federal Home Loan Bank | 141,000 | 156,000 |
Securities sold under agreements to repurchase | 10,000 | 10,000 |
Accrued interest payable | 35 | 397 |
Interest rate contracts | 38 | 5 |
Estimated Fair Value | ||
Assets | ||
Cash and cash equivalents | 363,543 | 44,806 |
Investment securities available for sale, at fair value | 3,562 | 8,628 |
Investment securities held to maturity | 262,841 | 371,305 |
Loans held for sale | 2,274 | 480 |
Loans receivable, net | 1,433,489 | 1,627,903 |
FHLB stock | 8,144 | 8,723 |
FRB stock | 3,145 | 3,128 |
Accrued interest receivable | 6,515 | 5,409 |
Interest rate contracts | 38 | 5 |
Liabilities | ||
Deposits | 1,663,226 | 1,632,741 |
Advances from the Federal Home Loan Bank | 145,441 | 156,906 |
Securities sold under agreements to repurchase | 10,466 | 9,968 |
Accrued interest payable | 35 | 397 |
Interest rate contracts | 38 | 5 |
Estimated Fair Value | Level 1 | ||
Assets | ||
Cash and cash equivalents | 363,543 | 44,806 |
Accrued interest receivable | 16 | 32 |
Estimated Fair Value | Level 2 | ||
Assets | ||
Investment securities available for sale, at fair value | 3,562 | 8,628 |
Investment securities held to maturity | 262,841 | 371,305 |
Loans held for sale | 2,274 | 480 |
FHLB stock | 8,144 | 8,723 |
FRB stock | 3,145 | 3,128 |
Accrued interest receivable | 627 | 952 |
Interest rate contracts | 38 | 5 |
Liabilities | ||
Deposits | 1,338,022 | 1,167,990 |
Advances from the Federal Home Loan Bank | 145,441 | 156,906 |
Securities sold under agreements to repurchase | 10,466 | 9,968 |
Accrued interest payable | 33 | 47 |
Interest rate contracts | 38 | 5 |
Estimated Fair Value | Level 3 | ||
Assets | ||
Loans receivable, net | 1,433,489 | 1,627,903 |
Accrued interest receivable | 5,872 | 4,425 |
Liabilities | ||
Deposits | 325,204 | 464,751 |
Accrued interest payable | $ 2 | $ 350 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Assets and Liabilities Measured at Fair Value on Recurring Basis | ||
Investment securities available for sale, at fair value | $ 3,562 | $ 8,628 |
Fair Value, Measurements, Recurring | ||
Assets and Liabilities Measured at Fair Value on Recurring Basis | ||
Interest rate contracts - assets | 38 | 5 |
Interest rate contracts - liabilities | (38) | (5) |
Investment securities available for sale, at fair value | 3,562 | 8,628 |
Fair Value, Measurements, Recurring | Level 2 | ||
Assets and Liabilities Measured at Fair Value on Recurring Basis | ||
Interest rate contracts - assets | 38 | 5 |
Interest rate contracts - liabilities | (38) | (5) |
Investment securities available for sale, at fair value | $ 3,562 | $ 8,628 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Nonrecurring Basis (Details) | 12 Months Ended | ||
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Assets Measured at Fair Value on Nonrecurring Basis and Related Losses | |||
Mortgage servicing assets, Fair value | $ 407,000 | $ 552,000 | $ 291,000 |
Annual cost to service (per loan, in dollars) | $ 75 | $ 75 | |
Level 3 | |||
Assets Measured at Fair Value on Nonrecurring Basis and Related Losses | |||
Servicing Asset, Valuation Technique [Extensible List] | us-gaap:ValuationTechniqueDiscountedCashFlowMember | us-gaap:ValuationTechniqueDiscountedCashFlowMember | |
Fair Value, Measurements, Nonrecurring | |||
Assets Measured at Fair Value on Nonrecurring Basis and Related Losses | |||
Mortgage servicing assets, Fair value | $ 407,000 | $ 452,000 | |
Mortgage servicing assets, Total losses | (73,000) | (16,000) | |
Fair Value, Measurements, Nonrecurring | Level 3 | |||
Assets Measured at Fair Value on Nonrecurring Basis and Related Losses | |||
Mortgage servicing assets, Fair value | $ 407,000 | $ 452,000 | |
Discount rate | Fair Value, Measurements, Nonrecurring | Level 3 | |||
Assets Measured at Fair Value on Nonrecurring Basis and Related Losses | |||
Servicing Asset, Measurement Input | 10.25 | 10.25 | |
Prepayment speed (CPR) | Fair Value, Measurements, Nonrecurring | Level 3 | |||
Assets Measured at Fair Value on Nonrecurring Basis and Related Losses | |||
Servicing Asset, Measurement Input | 13.57 | 12.58 | |
Annual cost to service (per loan, in dollars) | Fair Value, Measurements, Nonrecurring | Level 3 | |||
Assets Measured at Fair Value on Nonrecurring Basis and Related Losses | |||
Servicing Asset, Measurement Input | 75,000 | 75,000 | |
Discounted cash flow model | Fair Value, Measurements, Nonrecurring | Level 3 | Mortgage Servicing Assets | |||
Assets Measured at Fair Value on Nonrecurring Basis and Related Losses | |||
Fair value | $ 407,000 | $ 452,000 | |
Minimum | Discount rate | Fair Value, Measurements, Nonrecurring | Level 3 | |||
Assets Measured at Fair Value on Nonrecurring Basis and Related Losses | |||
Servicing Asset, Measurement Input | 9.25 | 9.25 | |
Minimum | Prepayment speed (CPR) | Fair Value, Measurements, Nonrecurring | Level 3 | |||
Assets Measured at Fair Value on Nonrecurring Basis and Related Losses | |||
Servicing Asset, Measurement Input | 10.42 | 9.11 | |
Maximum | Discount rate | Fair Value, Measurements, Nonrecurring | Level 3 | |||
Assets Measured at Fair Value on Nonrecurring Basis and Related Losses | |||
Servicing Asset, Measurement Input | 11.25 | 11.25 | |
Maximum | Prepayment speed (CPR) | Fair Value, Measurements, Nonrecurring | Level 3 | |||
Assets Measured at Fair Value on Nonrecurring Basis and Related Losses | |||
Servicing Asset, Measurement Input | 19.61 | 13.06 |
Parent Company Only - Condensed
Parent Company Only - Condensed Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | |||
Prepaid expenses and other assets | $ 2,844 | $ 2,800 | |
Total assets | 2,110,799 | 2,086,313 | |
Liabilities and Equity | |||
Equity | 248,708 | 243,890 | $ 235,079 |
Total liabilities and stockholders' equity | 2,110,799 | 2,086,313 | |
Territorial Bancorp Inc. | |||
Assets | |||
Cash | 18,108 | 22,602 | |
Investment in Territorial Savings Bank | 230,566 | 219,838 | |
Receivable from Territorial Savings Bank | 851 | 1,377 | |
Prepaid expenses and other assets | 355 | 233 | |
Total assets | 249,880 | 244,050 | |
Liabilities and Equity | |||
Other liabilities | 1,172 | 160 | |
Equity | 248,708 | 243,890 | |
Total liabilities and stockholders' equity | $ 249,880 | $ 244,050 |
Parent Company Only - Condens_2
Parent Company Only - Condensed Statement of Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Interest and dividend income: | ||||||||||
Total interest income | $ 16,040 | $ 17,131 | $ 18,005 | $ 18,581 | $ 18,801 | $ 18,948 | $ 19,114 | $ 18,705 | $ 69,757 | $ 75,568 |
Noninterest expense: | ||||||||||
Salaries | 21,741 | 22,580 | ||||||||
Other general and administrative expenses | 3,982 | 4,555 | ||||||||
Total noninterest expense | 9,530 | 9,386 | 8,971 | 9,538 | 9,320 | 9,401 | 9,511 | 9,774 | 37,425 | 38,006 |
Income before income taxes | 7,433 | 5,963 | 5,861 | 6,063 | 6,193 | 7,141 | 6,475 | 8,497 | 25,320 | 28,306 |
Income taxes | 1,910 | 1,645 | 1,570 | 1,590 | 1,148 | 1,775 | 1,415 | 1,973 | 6,715 | 6,311 |
Net income | $ 5,523 | $ 4,318 | $ 4,291 | $ 4,473 | $ 5,045 | $ 5,366 | $ 5,060 | $ 6,524 | 18,605 | 21,995 |
Territorial Bancorp Inc. | ||||||||||
Interest and dividend income: | ||||||||||
Dividends from Territorial Savings Bank | 8,000 | 21,250 | ||||||||
Interest-earning deposit with Territorial Savings Bank | 19 | 35 | ||||||||
Total interest income | 8,019 | 21,285 | ||||||||
Noninterest expense: | ||||||||||
Salaries | 43 | 43 | ||||||||
Other general and administrative expenses | 719 | 676 | ||||||||
Total noninterest expense | 762 | 719 | ||||||||
Income before income taxes | 7,257 | 20,566 | ||||||||
Income taxes | (217) | (177) | ||||||||
Income before equity in undistributed earnings in subsidiaries | 7,474 | 20,743 | ||||||||
Equity in undistributed earnings of Territorial Savings Bank, net of dividends | 11,131 | 1,252 | ||||||||
Net income | $ 18,605 | $ 21,995 |
Parent Company Only - Condens_3
Parent Company Only - Condensed Statement of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 18,605 | $ 21,995 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Net decrease in prepaid expenses and other assets | 94 | 81 |
Net cash from operating activities | 20,989 | 22,327 |
Cash flows from investing activities: | ||
Net cash from investing activities | 298,281 | (6,037) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 170 | |
Repurchases of common stock | (5,000) | (1,597) |
Cash dividends paid | (8,400) | (13,689) |
Net cash from financing activities | (533) | (18,547) |
Net increase (decrease) in cash and cash equivalents | 318,737 | (2,257) |
Cash and cash equivalents at beginning of the period | 44,806 | 47,063 |
Cash and cash equivalents at end of the period | 363,543 | 44,806 |
Territorial Bancorp Inc. | ||
Cash flows from operating activities: | ||
Net income | 18,605 | 21,995 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Equity in undistributed earnings of Territorial Savings Bank, net of dividends | (11,131) | (1,252) |
Net decrease in prepaid expenses and other assets | 1,583 | 683 |
Net decrease in other liabilities | (151) | (97) |
Net cash from operating activities | 8,906 | 21,329 |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 170 | |
Repurchases of common stock | (5,000) | (1,597) |
Cash dividends paid | (8,400) | (13,689) |
Net cash from financing activities | (13,400) | (15,116) |
Net increase (decrease) in cash and cash equivalents | (4,494) | 6,213 |
Cash and cash equivalents at beginning of the period | 22,602 | 16,389 |
Cash and cash equivalents at end of the period | $ 18,108 | $ 22,602 |
Unaudited Quarterly Financial_3
Unaudited Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Unaudited Quarterly Financial Information | ||||||||||
Interest income | $ 16,040 | $ 17,131 | $ 18,005 | $ 18,581 | $ 18,801 | $ 18,948 | $ 19,114 | $ 18,705 | $ 69,757 | $ 75,568 |
Interest expense | 2,221 | 2,667 | 3,239 | 4,064 | 4,309 | 4,397 | 4,452 | 3,869 | 12,191 | 17,027 |
Net interest income | 13,819 | 14,464 | 14,766 | 14,517 | 14,492 | 14,551 | 14,662 | 14,836 | 57,566 | 58,541 |
Provision (reversal of provision) for loan losses | (679) | 692 | 1,395 | 217 | (4) | 111 | (51) | 5 | 1,625 | 61 |
Net interest income after provision for loan losses | 14,498 | 13,772 | 13,371 | 14,300 | 14,496 | 14,440 | 14,713 | 14,831 | 55,941 | 58,480 |
Noninterest income | 2,465 | 1,577 | 1,461 | 1,301 | 1,017 | 2,102 | 1,273 | 3,440 | 6,804 | 7,832 |
Noninterest expense | 9,530 | 9,386 | 8,971 | 9,538 | 9,320 | 9,401 | 9,511 | 9,774 | 37,425 | 38,006 |
Income before income taxes | 7,433 | 5,963 | 5,861 | 6,063 | 6,193 | 7,141 | 6,475 | 8,497 | 25,320 | 28,306 |
Income taxes | 1,910 | 1,645 | 1,570 | 1,590 | 1,148 | 1,775 | 1,415 | 1,973 | 6,715 | 6,311 |
Net income | $ 5,523 | $ 4,318 | $ 4,291 | $ 4,473 | $ 5,045 | $ 5,366 | $ 5,060 | $ 6,524 | $ 18,605 | $ 21,995 |
Basic earnings per share (in dollars per share) | $ 0.61 | $ 0.47 | $ 0.47 | $ 0.48 | $ 0.54 | $ 0.58 | $ 0.55 | $ 0.71 | $ 2.03 | $ 2.38 |
Diluted earnings per share (in dollars per share) | 0.59 | 0.47 | 0.47 | 0.48 | 0.53 | 0.57 | 0.54 | 0.70 | 2.01 | 2.34 |
Cash dividends declared (in dollars per share) | $ 0.33 | $ 0.23 | $ 0.23 | $ 0.23 | $ 0.73 | $ 0.22 | $ 0.32 | $ 0.22 | $ 1.02 | $ 1.49 |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | Jan. 28, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Subsequent Events | |||||||||||
Quarterly cash dividend declared on common stock (in dollars per share) | $ 0.33 | $ 0.23 | $ 0.23 | $ 0.23 | $ 0.73 | $ 0.22 | $ 0.32 | $ 0.22 | $ 1.02 | $ 1.49 | |
Subsequent event | |||||||||||
Subsequent Events | |||||||||||
Quarterly cash dividend declared on common stock (in dollars per share) | $ 0.23 |