Territorial Bancorp, Inc. intends to operate as the bank holding company for Territorial Savings Bank, a federally chartered, FDIC-insured savings bank, which provides financial services to individuals, families, and businesses. Territorial Savings Bank accepts deposits; originates home equity loans and lines of credit, construction, commercial and other non-residential real estate loans, consumer loans, multi-family mortgage loans, and other loans; offers various deposit accounts, including passbook and statement savings accounts, certificates of deposit, money market accounts, commercial and regular checking accounts, and Super NOW accounts; engages in insurance agency activities; and provides various non-deposit investments, such as annuities and mutual funds through a third-party broker-dealer. Territorial Bancorp, Inc. is based in Honolulu, Hawaii with banking offices located throughout the State of Hawaii. Territorial Bancorp Inc. has a market cap of $202.9 million; its shares were traded at around $16.59 .
Highlight of Business Operations:Assets. At September 30, 2009, our assets were $1.4 billion, an increase of $132.1 million, or 10.8%, from $1.2 billion at December 31, 2008. The increase was caused by increases in cash and cash equivalents and investment securities held to maturity, partially offset by a decrease in loans.
Loans. At September 30, 2009, total loans (including loans held for sale of $3.2 million) were $614.9 million, or 45.3% of total assets. During the nine months ended September 30, 2009, the loan portfolio decreased $27.2 million, or 4.2%. The decrease was caused primarily by a decrease in one- to four-family residential real estate loans of $19.4 million, as we sold $74.6 million of longer-term loans during the nine months ended September 30, 2009. Home equity loans and lines of credit also decreased by $7.1 million.
We had previously considered our investment in PreTSL XXIV other-than-temporarily impaired as of December 31, 2008, and we recorded a $2.5 million impairment charge during the quarter ended December 31, 2008. The cumulative effect of our adoption of new accounting pronouncements, effective January 1, 2009, resulted in the reclassification of $1.5 million, net of tax of $958,000, of securities impairment from retained earnings to accumulated other comprehensive loss. Based on our continued review, we considered our investment in this security to have experienced additional other-than-temporary impairment as of March 31, 2009, June 30, 2009 and September 30, 2009, and recorded an additional $3.5 million impairment charge due to credit losses with respect to this security during the nine months ended September 30, 2009
Deposits. During the nine months ended September 30, 2009, our deposits grew $61.7 million, or 6.7%. The increase was caused by our continuing to promote higher than market rates for our savings accounts (which increased $173.1 million during the nine-month period), offsetting a decrease of $103.9 million in certificates of deposit. During the nine months ended September 30, 2009, we continued to lower the rates we pay on certificates of deposit because of increased liquidity from other sources, such as the net proceeds from our stock offering, as well as principal repayments on loans and mortgage-backed securities, allowing these deposits to run off.
Borrowings. Historically, our borrowings consisted primarily of advances from the Federal Home Loan Bank of Seattle and funds borrowed under repurchase agreements. During the nine months ended September 30, 2009, our borrowings decreased $45 million, or 25.7%. During the quarter ended March 31, 2009, we repaid all of our outstanding Federal Home Loan Bank advances, and our reverse repurchase agreements increased $15.0 million, or 13.0% during that quarter. We also repaid $24.7 million of subordinated debentures during the quarter ended September 30, 2009. We have not required further borrowings to fund our operations. Instead, we have funded our operations with the net proceeds from our stock offering, additional deposits and principal repayments on loans and mortgage-backed securities.
Equity. At September 30, 2009, our equity was $215.8 million, an increase of $116.4 million, or 117.1%, from $99.4 million at December 31, 2008. The increase resulted from the completion of our stock offering in July 2009, as well as net income of $5.7 million for the nine months ended September 30, 2009.
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