Territorial Savings Bank in Honolulu plans to shed its federal charter and become a state-chartered savings bank.

The board of the $1.6 billion-asset Territorial has approved plans to file a charter conversion application with the Division of Financial Institutions in Hawaii, according to a Friday press release. Territorial will also file an application to become a member bank of the Federal Reserve Bank of San Francisco.

"These changes, if approved, will lower the regulatory cost to the bank. In addition, the bank and holding company will have the same federal regulator," chairman and chief executive Allan Kitagawa said in the release.

Territorial is owned by Territorial Bancorp (TBNK) and has 28 offices in Hawaii, according to the Federal Deposit Insurance Corp.

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