Item 1.02 Termination of a Material Definitive Agreement

As discussed in the Prospectus of Territorial Bancorp Inc. (the "Company"), as filed with the U.S. Securities and Exchange Commission on May 26, 2009 pursuant to Rule 424(b)(3) of the Securities Act of 1933, as amended (File No. 333-155388), the Company intended to use a portion of the net proceeds of its stock offering to redeem $24.0 million of trust preferred securities that it had issued through three issuer pools. On September 17, 2009, the Company repaid subordinated debentures issued by Territorial Savings Statutory Trust III, resulting in the redemption of $5.0 million of trust preferred securities. The remaining outstanding subordinated debentures, issued by Territorial Savings Statutory Trust I and Territorial Savings Statutory Trust II, are scheduled to be repaid on September 28, 2009, which will result in the redemption of the remaining $19.0 million of outstanding trust preferred securities.

The debentures were issued pursuant to Indentures entered into between Territorial Savings Group, Inc., whom the Company succeeded to as a result of the mutual-to-stock conversion of Territorial Mutual Holding Company, and U.S. Bank National Association, as Trustee, and as successor to State Street Bank and Trust Company of Connecticut, National Association. The current interest rates on the subordinated debt range from 3.56% to 4.00%.