TowneBank Reports Second Quarter 2024 Earnings
SUFFOLK, Va., July 24, 2024 (GLOBE NEWSWIRE) -- TowneBank (the "Company" or "Towne") (NASDAQ: TOWN) today reported earnings for the quarter ended June 30, 2024 of $42.86 million, or $0.57 per diluted share, compared to $41.72 million, or $0.56 per diluted share, for the quarter ended June 30, 2023. Excluding certain items affecting comparability, core earnings (non-GAAP) were $42.56 million, or $0.57 per diluted share, in the current quarter, an increase of 10.10% compared to $38.66 million, or $0.52 per diluted share, for the quarter ended June 30, 2023.
"TowneBank delivered another solid quarter of performance, reflective of the strength of our diversified operating model and conservative approach to balance sheet management. It was encouraging to report quarterly sequential growth in tax-equivalent net interest margin and noninterest-bearing demand deposit balances for the first time since 2022 signaling momentum heading into the back half of the year. Lastly, our strategy of continuing to expand our noninterest income sources, resulted in one of the strongest quarters we have seen in recent years. On a personal note, I am grateful for the contributions of our entire TowneBank family as we celebrated our 25th anniversary of Serving Others and Enriching Lives," said G. Robert Aston, Jr., Executive Chairman.
Highlights for Second Quarter 2024:
- Total revenues were $174.97 million, a decrease of $6.60 million, or 3.63%, compared to second quarter 2023. Net interest income declined $4.56 million, driven by the impact of higher rates on deposit costs and continued migration to higher yielding deposit products. Additionally, noninterest income decreased $2.04 million due to a second quarter 2023 gain of $8.83 million related to the sale of BHHS Towne Realty.
- Total deposits were $14.27 billion, an increase of $505.93 million, or 3.68%, compared to second quarter 2023. Total deposits increased 1.04%, or $146.51 million, in comparison to March 31, 2024, 4.17% on an annualized basis.
- Noninterest-bearing deposits decreased 9.87%, to $4.30 billion, compared to second quarter 2023 and represented 30.15% of total deposits. Compared to the linked quarter, noninterest-bearing deposits increased 2.61%, or 10.51% on an annualized basis. This represents the first quarterly sequential increase in noninterest-bearing deposits since June 2022.
- Loans held for investment were $11.45 billion, an increase of $243.73 million, or 2.17%, compared to June 30, 2023, and a decrease of $0.60 million, or 0.01%, compared to March 31, 2024.
- Annualized return on common shareholders' equity was 8.49% compared to 8.52% in second quarter 2023. Annualized return on average tangible common shareholders' equity (non-GAAP) was 12.16% compared to 12.48% in second quarter 2023.
- Net interest margin was 2.86% for the quarter and tax-equivalent net interest margin (non-GAAP) was 2.89%, including purchase accounting accretion of 5 basis points, compared to the prior year quarter net interest margin of 2.98% and tax-equivalent net interest margin (non-GAAP) of 3.01%, including purchase accounting accretion of 4 basis points.
- Net interest margin increased 14 bp and spread increased 13 bp, compared to the linked quarter.
- The effective tax rate was 15.93% in the quarter compared to 18.41% in second quarter 2023 and 17.31% in the linked quarter. The lower tax rate in the current quarter was due to increases in tax-advantaged income investments and investments in Low Income Housing Tax Credits.
"Importantly, we continued to report strong asset quality metrics and healthy capital levels reflective of our conservative approach to Main Street banking. We continuously evaluate investments in people, process and technologies to help improve efficiencies across all lines of business," stated William I. Foster III, President and Chief Executive Officer.
Quarterly Net Interest Income:
- Net interest income was $109.05 million compared to $113.61 million for the quarter ended June 30, 2023. The decrease was driven by increased deposit costs, partially offset by higher yields on earning assets.
- On an average basis, loans held for investment, with a yield of 5.45%, represented 74.76% of earning assets at June 30, 2024 compared to a yield of 5.00% and 73.24% of earning assets in the second quarter of 2023.
- The cost of interest-bearing deposits was 3.32% for the quarter ended June 30, 2024, compared to 2.28% in second quarter 2023. Interest expense on deposits increased $33.35 million, or 68.53%, over the prior year quarter driven by the increase in rate.
- Our total cost of deposits increased to 2.32% from 1.46% for the quarter ended June 30, 2023 due to higher interest-bearing deposit balances coupled with higher rates.
- Average interest-earning assets totaled $15.34 billion at June 30, 2024 compared to $15.31 billion at June 30, 2023, an increase of 0.26%. The Company anticipates approximately $495 million of cash flows from its securities portfolio to be available for reinvestment in the next two years.
- Average interest-bearing liabilities totaled $10.29 billion, an increase of $0.61 billion, or 6.27%, from prior year, primarily related to deposit growth. Average short term FHLB borrowings were $65.93 million during the quarter compared to $802.75 million one year prior.
Quarterly Provision for Credit Losses:
- The quarterly provision for credit losses was a benefit of $177 thousand compared to an expense of $3.56 million in the prior year quarter and a benefit of $0.88 million in the linked quarter.
- The allowance for credit losses on loans decreased $283 thousand in second quarter 2024, compared to the linked quarter. The decrease in the allowance was driven by net recoveries during the quarter, continued strength in credit quality, and a continuation of improvements in macroeconomic forecast scenarios utilized in our model.
- Net loan recoveries were $19 thousand in the quarter compared to net charge-offs of $9 thousand in the prior year quarter and $520 thousand in the linked quarter.
- The ratio of net charge-offs to average loans on an annualized basis was 0.00% in second quarter 2024 and 2023, compared to 0.02% in the linked quarter.
- The allowance for credit losses on loans represented 1.10% of total loans at each of June 30, 2024, June 30, 2023, and March 31, 2024. The allowance for credit losses on loans was 19.08 times nonperforming loans compared to 18.09 times at June 30, 2023 and 18.01 times at March 31, 2024.
Quarterly Noninterest Income:
- Total noninterest income was $65.92 million compared to $67.96 million in 2023, a decrease of $2.04 million, or 2.99%. Excluding a gain of $8.83 million on the sale of BHHS TowneRealty in second quarter 2023, total noninterest income increased $6.80 million compared to second quarter 2023, or 11.50%.
- Residential mortgage banking income was $13.42 million compared to $11.36 million in second quarter 2023. Loan volume increased to $0.63 billion in second quarter 2024 from $0.62 billion in second quarter 2023. The number of loans originated was lower than second quarter 2023, but higher per-loan average balances resulted in higher production volume. Residential purchase activity comprised 94.85% of production volume in the second quarter of 2024 compared to 96.32% in the prior year quarter.
- Gross margins on residential mortgage sales increased 32 basis points to 3.28% in the current quarter from 2.96% in second quarter 2023.
- Total net insurance commissions increased $1.53 million, or 6.81%, to $24.03 million in second quarter 2024 compared to 2023. This increase was attributable to increases in property and casualty commissions, which were driven by organic growth.
- Property management fee revenue increased 18.30%, or $2.21 million, to $14.31 million in second quarter 2024 compared to 2023. Reservation income increased compared to the prior year due to an acquisition in March 2024.
Quarterly Noninterest Expense:
- Total noninterest expense was $123.98 million compared to $125.23 million in 2023, a decrease of $1.24 million, or 0.99%. Decreases in FDIC and other insurance of $1.57 million, acquisition expenses of $2.98 million, and various expense line items were partially offset by an increase in salaries and employee benefits of $3.90 million, software expense of $0.89 million, and data processing expense of $0.60 million.
- Salaries and benefits expense increases were driven by annual base salary adjustments effective third quarter 2023, production incentives, and higher health insurance costs.
- Software increased due to higher core system costs while data processing increased due to seasonal merchant fee increases and core conversion expenses in our property management line of business.
Consolidated Balance Sheet Highlights:
- Management is focused on strategic balance sheet management with a concentration on controlled loan growth and maintaining strong levels of liquidity.
- Total assets were $17.07 billion for the quarter ended June 30, 2024, a $184.61 million increase compared to $16.88 billion at March 31, 2024. Total assets decreased $156.23 million, or 0.91%, from $17.23 billion at June 30, 2023.
- Loans held for investment increased $243.73 million, or 2.17%, compared to prior year but declined $0.60 million, or 0.01%, compared to the linked quarter.
- Mortgage loans held for sale decreased $28.74 million, or 12.52%, compared to prior year but increased $50.04 million, or 33.20%, compared to the linked quarter.
- Total deposits increased $505.93 million, or 3.68%, primarily in interest-bearing demand and time deposits, compared to prior year. In the linked quarter comparison, total deposits increased $146.51 million, or 4.17% on an annualized basis.
- Noninterest-bearing deposits decreased $471.06 million or 9.87%, compared to prior year, but increased $109.64 million, or 2.61%, compared to the linked quarter. This linked quarter increase is the first quarter-end increase in balances since June 30, 2022.
- Total borrowings decreased $764.41 million, or 72.14%, compared to second quarter 2023 and increased $4.19 million, or 1.44%, compared to the linked quarter. Short-term FHLB advances decreased in the current quarter compared to both the prior year quarter and the linked quarter.
Investment Securities:
- Total investment securities were $2.49 billion compared to $2.54 billion at March 31, 2024 and $2.61 billion at June 30, 2023. The weighted average duration of the portfolio at June 30, 2024 was 3.4 years. The carrying value of the available for sale debt securities portfolio included net unrealized losses of $172.93 million at June 30, 2024, compared to $170.84 million at March 31, 2024 and $195.98 million at June 30, 2023, with the changes related to market valuation adjustments due to changing interest rates.
Loans and Asset Quality:
- Total loans held for investment were $11.45 billion at both June 30, 2024 and March 31, 2024, and $11.21 billion at June 30, 2023.
- Nonperforming assets were $7.16 million, or 0.04% of total assets, compared to $9.35 million, or 0.05%, at June 30, 2023, and $7.77 million, or 0.05%, in the linked quarter end.
- Nonperforming loans were 0.06% of period end loans at June 30, 2024, June 30, 2023, and the linked quarter end.
- Foreclosed property decreased to $581 thousand from $738 thousand at June 30, 2023.
Deposits and Borrowings:
- Total deposits were $14.27 billion compared to $14.13 billion at March 31, 2024 and $13.77 billion at June 30, 2023.
- The ratio of period end loans held for investment to deposits was 80.24% compared to 81.07% at March 31, 2024 and 81.41% at June 30, 2023.
- Noninterest-bearing deposits were 30.15% of total deposits at June 30, 2024 compared to 29.69% at March 31, 2024 and 34.68% at June 30, 2023. Noninterest-bearing deposits declined $471.06 million, or 9.87%, compared to June 30, 2023, but increased 109.64 million, or 2.61%, compared to the linked quarter.
- Total borrowings were $295.17 million compared to $290.98 million at March 31, 2024 and $1.06 billion at June 30, 2023.
Capital:
- Common equity tier 1 capital ratio of 12.43%(1).
- Tier 1 leverage capital ratio of 10.25%(1).
- Tier 1 risk-based capital ratio of 12.55%(1).
- Total risk-based capital ratio of 15.34% (1) .
- Book value per common share was $27.62 compared to $27.33 at March 31, 2024 and $26.36 at June 30, 2023.
- Tangible book value per common share (non-GAAP) was $20.65 compared to $20.31 at March 31, 2024 and $19.31 at June 30, 2023.
(1) Preliminary.
About TowneBank:
Founded in 1999, TowneBank is a company built on relationships, offering a full range of banking and other financial services, with a focus of serving others and enriching lives. Dedicated to a culture of caring, Towne values all employees and members by embracing their diverse talents, perspectives, and experiences.
Now celebrating 25 years, TowneBank operates 50 banking offices throughout Hampton Roads and Central Virginia, as well as Northeastern and Central North Carolina – serving as a local leader in promoting the social, cultural, and economic growth in each community. Towne offers a competitive array of business and personal banking solutions, delivered with only the highest ethical standards. Experienced local bankers providing a higher level of expertise and personal attention with local decision-making are key to the TowneBank strategy. TowneBank has grown its capabilities beyond banking to provide expertise through its affiliated companies that include Towne Wealth Management, Towne Insurance Agency, Towne Benefits, TowneBank Mortgage, TowneBank Commercial Mortgage, Berkshire Hathaway HomeServices RW Towne Realty, Towne 1031 Exchange, LLC, and Towne Vacations. With total assets of $17.07 billion as of June 30, 2024, TowneBank is one of the largest banks headquartered in Virginia.
Non-GAAP Financial Measures:
This press release contains certain financial measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Such non-GAAP financial measures include the following: fully tax-equivalent net interest margin, core operating earnings, core net income, tangible book value per common share, total risk-based capital ratio, tier one leverage ratio, tier one capital ratio, and the tangible common equity to tangible assets ratio. Management uses these non-GAAP financial measures to assess the performance of TowneBank’s core business and the strength of its capital position. Management believes that these non-GAAP financial measures provide meaningful additional information about TowneBank to assist investors in evaluating operating results, financial strength, and capitalization. The non-GAAP financial measures should be considered as additional views of the way our financial measures are affected by significant charges for credit costs and other factors. These non-GAAP financial measures should not be considered as a substitute for operating results determined in accordance with GAAP and may not be comparable to other similarly titled measures of other companies. The computations of the non-GAAP financial measures used in this presentation are referenced in a footnote or in the appendix to this presentation.
Forward-Looking Statements:
This press release contains certain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts, but instead represent only the beliefs, expectations, or opinions of TowneBank and its management regarding future events, many of which, by their nature, are inherently uncertain. Forward-looking statements may be identified by the use of such words as: "believe," "expect," "anticipate," "intend," "plan,” "estimate," or words of similar meaning, or future or conditional terms, such as "will," "would," "should," "could," "may," "likely," "probably," or "possibly." These statements may address issues that involve significant risks, uncertainties, estimates, and assumptions made by management. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include among others, competitive pressures in the banking industry that may increase significantly; changes in the interest rate environment that may reduce margins and/or the volumes and values of loans made or held as well as the value of other financial assets held; an unforeseen outflow of cash or deposits or an inability to access the capital markets, which could jeopardize our overall liquidity or capitalization; changes in the creditworthiness of customers and the possible impairment of the collectability of loans; insufficiency of our allowance for credit losses due to market conditions, inflation, changing interest rates or other factors; adverse developments in the financial industry generally, such as the recent bank failures, responsive measures to mitigate and manage such developments, related supervisory and regulatory actions and costs, and related impacts on customer and client behavior; general economic conditions, either nationally or regionally, that may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and/or a reduced demand for credit or other services; geopolitical instability, including wars, conflicts, civil unrest, and terrorist attacks and the potential impact, directly or indirectly, on our business; the effects of weather-related or natural disasters, which may negatively affect our operations and/or our loan portfolio and increase our cost of conducting business; public health events (such as the COVID-19 pandemic) and governmental and societal responses to them; changes in the legislative or regulatory environment, including changes in accounting standards and tax laws, that may adversely affect our business; costs or difficulties related to the integration of the businesses we have acquired may be greater than expected; expected cost savings associated with pending or recently completed acquisitions may not be fully realized or realized within the expected time frame; cybersecurity threats or attacks, whether directed at us or at vendors or other third parties with which we interact, the implementation of new technologies, and the ability to develop and maintain reliable electronic systems; our competitors may have greater financial resources and develop products that enable them to compete more successfully; changes in business conditions; changes in the securities market; and changes in our local economy with regard to our market area. Any forward-looking statements made by us or on our behalf speak only as of the date they are made or as of the date indicated, and we do not undertake any obligation to update forward-looking statements as a result of new information, future events, or otherwise. For additional information on factors that could materially influence forward-looking statements included in this report, see the "Risk Factors" in TowneBank’s Annual Report on Form 10-K for the year ended December 31, 2023, and related disclosures in other filings that have been, or will be, filed by TowneBank with the Federal Deposit Insurance Corporation.
Media contact:
G. Robert Aston, Jr., Executive Chairman, 757-638-6780
William I. Foster III, President and Chief Executive Officer, 757-417-6482
Investor contact:
William B. Littreal, Chief Financial Officer, 757-638-6813
| TOWNEBANK | ||||||||||||||||||||
| Selected Financial Highlights (unaudited) | ||||||||||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
| 2024 | 2024 | 2023 | 2023 | 2023 | ||||||||||||||||
| Income and Performance Ratios: | ||||||||||||||||||||
| Total revenue | $ | 174,970 | $ | 167,102 | $ | 155,546 | $ | 172,864 | $ | 181,568 | ||||||||||
| Net income | 43,039 | 35,127 | 28,545 | 44,745 | 43,368 | |||||||||||||||
| Net income available to common shareholders | 42,856 | 34,687 | 28,804 | 44,862 | 41,716 | |||||||||||||||
| Net income per common share - diluted | 0.57 | 0.46 | 0.39 | 0.60 | 0.56 | |||||||||||||||
| Book value per common share | 27.62 | 27.33 | 27.24 | 26.28 | 26.36 | |||||||||||||||
| Book value per common share - tangible(non-GAAP) | 20.65 | 20.31 | 20.28 | 19.28 | 19.31 | |||||||||||||||
| Return on average assets | 1.01 | % | 0.83 | % | 0.68 | % | 1.06 | % | 0.99 | % | ||||||||||
| Return on average assets - tangible(non-GAAP) | 1.11 | % | 0.92 | % | 0.77 | % | 1.17 | % | 1.10 | % | ||||||||||
| Return on average equity | 8.43 | % | 6.84 | % | 5.75 | % | 8.96 | % | 8.46 | % | ||||||||||
| Return on average equity - tangible(non-GAAP) | 12.03 | % | 9.87 | % | 8.53 | % | 12.97 | % | 12.35 | % | ||||||||||
| Return on average common equity | 8.49 | % | 6.89 | % | 5.79 | % | 9.04 | % | 8.52 | % | ||||||||||
| Return on average common equity - tangible(non-GAAP) | 12.16 | % | 9.98 | % | 8.62 | % | 13.11 | % | 12.48 | % | ||||||||||
| Noninterest income as a percentage of total revenue | 37.68 | % | 38.23 | % | 30.74 | % | 34.60 | % | 37.43 | % | ||||||||||
| Regulatory Capital Ratios (1): | ||||||||||||||||||||
| Common equity tier 1 | 12.43 | % | 12.20 | % | 12.18 | % | 12.19 | % | 11.99 | % | ||||||||||
| Tier 1 | 12.55 | % | 12.32 | % | 12.29 | % | 12.31 | % | 12.11 | % | ||||||||||
| Total | 15.34 | % | 15.10 | % | 15.06 | % | 15.09 | % | 14.88 | % | ||||||||||
| Tier 1 leverage ratio | 10.25 | % | 10.15 | % | 10.17 | % | 10.06 | % | 9.85 | % | ||||||||||
| Asset Quality: | ||||||||||||||||||||
| Allowance for credit losses on loans to nonperforming loans | 19.08x | 18.01x | 18.48x | 17.60x | 18.09x | |||||||||||||||
| Allowance for credit losses on loans to period end loans | 1.10 | % | 1.10 | % | 1.12 | % | 1.12 | % | 1.10 | % | ||||||||||
| Nonperforming loans to period end loans | 0.06 | % | 0.06 | % | 0.06 | % | 0.06 | % | 0.06 | % | ||||||||||
| Nonperforming assets to period end assets | 0.04 | % | 0.05 | % | 0.05 | % | 0.05 | % | 0.05 | % | ||||||||||
| Net charge-offs (recoveries) to average loans (annualized) | — | % | 0.02 | % | — | % | (0.04)% | — | % | |||||||||||
| Net charge-offs (recoveries) | $ | (19 | ) | $ | 520 | $ | 68 | $ | (1,074 | ) | $ | 9 | ||||||||
| Nonperforming loans | $ | 6,582 | $ | 6,987 | $ | 6,843 | $ | 7,110 | $ | 6,827 | ||||||||||
| Former bank premises | — | — | — | — | 1,782 | |||||||||||||||
| Foreclosed property | 581 | 780 | 908 | 766 | 738 | |||||||||||||||
| Total nonperforming assets | $ | 7,163 | $ | 7,767 | $ | 7,751 | $ | 7,876 | $ | 9,347 | ||||||||||
| Loans past due 90 days and still accruing interest | $ | 368 | $ | 323 | $ | 735 | $ | 970 | $ | 360 | ||||||||||
| Allowance for credit losses on loans | $ | 125,552 | $ | 125,835 | $ | 126,461 | $ | 125,159 | $ | 123,513 | ||||||||||
| Mortgage Banking: | ||||||||||||||||||||
| Loans originated, mortgage | $ | 430,398 | $ | 289,191 | $ | 302,616 | $ | 348,387 | $ | 409,050 | ||||||||||
| Loans originated, joint venture | 196,583 | 135,197 | 126,332 | 172,021 | 207,450 | |||||||||||||||
| Total loans originated | $ | 626,981 | $ | 424,388 | $ | 428,948 | $ | 520,408 | $ | 616,500 | ||||||||||
| Number of loans originated | 1,700 | 1,247 | 1,237 | 1,487 | 1,715 | |||||||||||||||
| Number of originators | 169 | 176 | 181 | 192 | 196 | |||||||||||||||
| Purchase % | 94.85 | % | 95.66 | % | 95.06 | % | 95.96 | % | 96.32 | % | ||||||||||
| Loans sold | $ | 605,134 | $ | 410,895 | $ | 468,014 | $ | 567,291 | $ | 525,078 | ||||||||||
| Rate lock asset | $ | 1,930 | $ | 1,681 | $ | 895 | $ | 1,348 | $ | 1,551 | ||||||||||
| Gross realized gain on sales and fees as a % of loans originated | 3.28 | % | 3.34 | % | 3.06 | % | 3.17 | % | 2.96 | % | ||||||||||
| Other Ratios: | ||||||||||||||||||||
| Net interest margin | 2.86 | % | 2.72 | % | 2.83 | % | 2.95 | % | 2.98 | % | ||||||||||
| Net interest margin-fully tax-equivalent(non-GAAP) | 2.89 | % | 2.75 | % | 2.86 | % | 2.98 | % | 3.01 | % | ||||||||||
| Average earning assets/total average assets | 90.36 | % | 90.52 | % | 90.48 | % | 90.73 | % | 90.96 | % | ||||||||||
| Average loans/average deposits | 80.80 | % | 81.48 | % | 80.72 | % | 80.75 | % | 83.72 | % | ||||||||||
| Average noninterest deposits/total average deposits | 30.06 | % | 30.25 | % | 31.69 | % | 33.50 | % | 36.07 | % | ||||||||||
| Period end equity/period end total assets | 12.24 | % | 12.24 | % | 12.21 | % | 11.90 | % | 11.56 | % | ||||||||||
| Efficiency ratio(non-GAAP) | 68.98 | % | 73.25 | % | 76.17 | % | 66.21 | % | 70.41 | % | ||||||||||
| (1) Current reporting period regulatory capital ratios are preliminary. | ||||||||||||||||||||
| TOWNEBANK | |||||||||||||||||
| Selected Data (unaudited) | |||||||||||||||||
| (dollars in thousands) | |||||||||||||||||
| Investment Securities | % Change | ||||||||||||||||
| Q2 | Q2 | Q1 | Q2 24 vs. | Q2 24 vs. | |||||||||||||
| Available-for-sale securities, at fair value | 2024 | 2023 | 2024 | Q2 23 | Q1 24 | ||||||||||||
| U.S. agency securities | $ | 281,934 | $ | 318,354 | $ | 294,723 | (11.44)% | (4.34)% | |||||||||
| U.S. Treasury notes | 27,701 | 26,874 | 27,534 | 3.08 | % | 0.61 | % | ||||||||||
| Municipal securities | 442,474 | 503,792 | 447,323 | (12.17)% | (1.08)% | ||||||||||||
| Trust preferred and other corporate securities | 88,228 | 71,116 | 87,983 | 24.06 | % | 0.28 | % | ||||||||||
| Mortgage-backed securities issued by GSEs and GNMA | 1,411,883 | 1,086,947 | 1,347,920 | 29.89 | % | 4.75 | % | ||||||||||
| Allowance for credit losses | (1,541 | ) | (1,232 | ) | (1,382 | ) | 25.08 | % | 11.51 | % | |||||||
| Total | $ | 2,250,679 | $ | 2,005,851 | $ | 2,204,101 | 12.21 | % | 2.11 | % | |||||||
| Gross unrealized gains (losses) reflected in financial statements | |||||||||||||||||
| Total gross unrealized gains | $ | 1,983 | $ | 975 | $ | 1,868 | 103.38 | % | 6.16 | % | |||||||
| Total gross unrealized losses | (174,911 | ) | (196,954 | ) | (172,708 | ) | (11.19)% | 1.28 | % | ||||||||
| Net unrealized gains (losses) and other adjustments on AFS securities | $ | (172,928 | ) | $ | (195,979 | ) | $ | (170,840 | ) | (11.76)% | 1.22 | % | |||||
| Held-to-maturity securities, at amortized cost | |||||||||||||||||
| U.S. agency securities | $ | 102,234 | $ | 101,469 | $ | 102,042 | 0.75 | % | 0.19 | % | |||||||
| U.S. Treasury notes | 97,171 | 433,298 | 197,356 | (77.57)% | (50.76)% | ||||||||||||
| Municipal securities | 5,318 | 5,226 | 5,294 | 1.76 | % | 0.45 | % | ||||||||||
| Trust preferred corporate securities | 2,147 | 2,198 | 2,159 | (2.32)% | (0.56)% | ||||||||||||
| Mortgage-backed securities issued by GSEs | 5,618 | 5,826 | 5,659 | (3.57)% | (0.72)% | ||||||||||||
| Allowance for credit losses | (79 | ) | (87 | ) | (82 | ) | (9.20)% | (3.66)% | |||||||||
| Total | $ | 212,409 | $ | 547,930 | $ | 312,428 | (61.23)% | (32.01)% | |||||||||
| Total gross unrealized gains | $ | 175 | $ | 272 | $ | 265 | (35.66)% | (33.96)% | |||||||||
| Total gross unrealized losses | (12,880 | ) | (25,914 | ) | (14,262 | ) | (50.30)% | (9.69)% | |||||||||
| Net unrealized gains (losses) in HTM securities | $ | (12,705 | ) | $ | (25,642 | ) | $ | (13,997 | ) | (50.45)% | (9.23)% | ||||||
| Total unrealized gains (losses) on AFS and HTM securities | $ | (185,633 | ) | $ | (221,621 | ) | $ | (184,837 | ) | (16.24)% | 0.43 | % | |||||
| % Change | |||||||||||||||||
| Loans Held For Investment | Q2 | Q2 | Q1 | Q2 24 vs. | Q2 24 vs. | ||||||||||||
| 2024 | 2023 | 2024 | Q2 23 | Q1 24 | |||||||||||||
| Real estate - construction and development | $ | 1,190,768 | $ | 1,364,575 | $ | 1,255,741 | (12.74)% | (5.17)% | |||||||||
| Commercial real estate - owner occupied | 1,673,582 | 1,687,261 | 1,700,753 | (0.81)% | (1.60)% | ||||||||||||
| Commercial real estate - non owner occupied | 3,155,958 | 3,034,548 | 3,178,947 | 4.00 | % | (0.72)% | |||||||||||
| Real estate - multifamily | 682,537 | 520,464 | 595,075 | 31.14 | % | 14.70 | % | ||||||||||
| Residential 1-4 family | 1,887,420 | 1,790,225 | 1,882,296 | 5.43 | % | 0.27 | % | ||||||||||
| HELOC | 408,273 | 380,501 | 386,361 | 7.30 | % | 5.67 | % | ||||||||||
| Commercial and industrial business (C&I) | 1,297,538 | 1,259,743 | 1,291,201 | 3.00 | % | 0.49 | % | ||||||||||
| Government | 517,954 | 520,994 | 528,341 | (0.58)% | (1.97)% | ||||||||||||
| Indirect | 558,216 | 562,161 | 555,482 | (0.70)% | 0.49 | % | |||||||||||
| Consumer loans and other | 79,501 | 87,542 | 78,146 | (9.19) % | 1.73 | % | |||||||||||
| Total | $ | 11,451,747 | $ | 11,208,014 | $ | 11,452,343 | 2.17 | % | (0.01)% | ||||||||
| % Change | |||||||||||||||||
| Deposits | Q2 | Q2 | Q1 | Q2 24 vs. | Q2 24 vs. | ||||||||||||
| 2024 | 2023 | 2024 | Q2 23 | Q1 24 | |||||||||||||
| Noninterest-bearing demand | $ | 4,303,773 | $ | 4,774,830 | $ | 4,194,132 | (9.87)% | 2.61 | % | ||||||||
| Interest-bearing: | |||||||||||||||||
| Demand and money market accounts | 6,940,086 | 6,529,336 | 6,916,701 | 6.29 | % | 0.34 | % | ||||||||||
| Savings | 312,881 | 361,891 | 326,179 | (13.54)% | (4.08)% | ||||||||||||
| Certificates of deposits | 2,715,848 | 2,100,604 | 2,689,062 | 29.29 | % | 1.00 | % | ||||||||||
| Total | 14,272,588 | 13,766,661 | 14,126,074 | 3.68 | % | 1.04 | % | ||||||||||
| TOWNEBANK | ||||||||||||||||||||||||||||||||
| Average Balances, Yields and Rate Paid (unaudited) | ||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||
| Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | ||||||||||||||||||||||||||||||
| Interest | Average | Interest | Average | Interest | Average | |||||||||||||||||||||||||||
| Average | Income/ | Yield/ | Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||||||||||||||
| Balance | Expense | Rate (1) | Balance | Expense | Rate (1) | Balance | Expense | Rate (1) | ||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||
| Loans (net of unearned income and deferred costs) | $ | 11,471,669 | $ | 155,374 | 5.45 | % | $ | 11,379,323 | $ | 151,811 | 5.37 | % | $ | 11,209,641 | $ | 139,814 | 5.00 | % | ||||||||||||||
| Taxable investment securities | 2,368,476 | 21,671 | 3.66 | % | 2,440,652 | 18,716 | 3.07 | % | 2,450,393 | 17,195 | 2.81 | % | ||||||||||||||||||||
| Tax-exempt investment securities | 156,503 | 1,521 | 3.89 | % | 161,538 | 1,549 | 3.84 | % | 209,728 | 2,003 | 3.82 | % | ||||||||||||||||||||
| Total securities | 2,524,979 | 23,192 | 3.67 | % | 2,602,190 | 20,265 | 3.12 | % | 2,660,121 | 19,198 | 2.89 | % | ||||||||||||||||||||
| Interest-bearing deposits | 1,182,816 | 14,512 | 4.93 | % | 1,167,322 | 14,234 | 4.90 | % | 1,262,692 | 14,488 | 4.60 | % | ||||||||||||||||||||
| Mortgage loans held for sale | 165,392 | 2,945 | 7.12 | % | 116,868 | 1,716 | 5.87 | % | 172,679 | 2,547 | 5.90 | % | ||||||||||||||||||||
| Total earning assets | 15,344,856 | 196,023 | 5.14 | % | 15,265,703 | 188,026 | 4.95 | % | 15,305,133 | 176,047 | 4.61 | % | ||||||||||||||||||||
| Less: allowance for loan losses | (126,792 | ) | (127,413 | ) | (121,140 | ) | ||||||||||||||||||||||||||
| Total nonearning assets | 1,764,418 | 1,725,945 | 1,642,972 | |||||||||||||||||||||||||||||
| Total assets | $ | 16,982,482 | $ | 16,864,235 | $ | 16,826,965 | ||||||||||||||||||||||||||
| Liabilities and Equity: | ||||||||||||||||||||||||||||||||
| Interest-bearing deposits | ||||||||||||||||||||||||||||||||
| Demand and money market | $ | 6,896,176 | $ | 48,161 | 2.81 | % | $ | 6,828,053 | $ | 47,985 | 2.83 | % | $ | 6,220,394 | $ | 32,058 | 2.07 | % | ||||||||||||||
| Savings | 317,774 | 845 | 1.07 | % | 329,036 | 881 | 1.08 | % | 371,455 | 895 | 0.97 | % | ||||||||||||||||||||
| Certificates of deposit | 2,715,615 | 33,017 | 4.89 | % | 2,583,938 | 29,522 | 4.60 | % | 1,968,623 | 15,718 | 3.20 | % | ||||||||||||||||||||
| Total interest-bearing deposits | 9,929,565 | 82,023 | 3.32 | % | 9,741,027 | 78,388 | 3.24 | % | 8,560,472 | 48,671 | 2.28 | % | ||||||||||||||||||||
| Borrowings | 100,165 | 1,627 | 6.43 | % | 212,375 | 3,078 | 5.73 | % | 863,255 | 10,345 | 4.74 | % | ||||||||||||||||||||
| Subordinated debt, net | 256,093 | 2,236 | 3.49 | % | 255,878 | 2,236 | 3.50 | % | 255,264 | 2,236 | 3.50 | % | ||||||||||||||||||||
| Total interest-bearing liabilities | 10,285,823 | 85,886 | 3.36 | % | 10,209,280 | 83,702 | 3.30 | % | 9,678,991 | 61,252 | 2.54 | % | ||||||||||||||||||||
| Demand deposits | 4,267,590 | 4,224,104 | 4,829,395 | |||||||||||||||||||||||||||||
| Other noninterest-bearing liabilities | 383,447 | 390,576 | 339,966 | |||||||||||||||||||||||||||||
| Total liabilities | 14,936,860 | 14,823,960 | 14,848,352 | |||||||||||||||||||||||||||||
| Shareholders’ equity | 2,045,622 | 2,040,275 | 1,978,613 | |||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 16,982,482 | $ | 16,864,235 | $ | 16,826,965 | ||||||||||||||||||||||||||
| Net interest income (tax-equivalent basis) (4) | $ | 110,137 | $ | 104,324 | $ | 114,795 | ||||||||||||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures | ||||||||||||||||||||||||||||||||
| Tax-equivalent basis adjustment | (1,089 | ) | (1,106 | ) | (1,184 | ) | ||||||||||||||||||||||||||
| Net interest income (GAAP) | $ | 109,048 | $ | 103,218 | $ | 113,611 | ||||||||||||||||||||||||||
| Interest rate spread (2)(4) | 1.78 | % | 1.65 | % | 2.07 | % | ||||||||||||||||||||||||||
| Interest expense as a percent of average earning assets | 2.25 | % | 2.21 | % | 1.61 | % | ||||||||||||||||||||||||||
| Net interest margin (tax-equivalent basis) (3)(4) | 2.89 | % | 2.75 | % | 3.01 | % | ||||||||||||||||||||||||||
| Total cost of deposits | 2.32 | % | 2.26 | % | 1.46 | % | ||||||||||||||||||||||||||
| (1) | Yields and interest income are presented on a tax-equivalent basis using the federal statutory tax rate of 21%. |
| (2) | Interest spread is the average yield earned on earning assets less the average rate paid on interest-bearing liabilities. Fully tax-equivalent. |
| (3) | Net interest margin is net interest income expressed as a percentage of average earning assets. Fully tax-equivalent. |
| (4) | Non-GAAP. |
| TOWNEBANK | |||||||||||||||||||||
| Average Balances, Yields and Rate Paid (unaudited) | |||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||
| Six Months Ended | Six Months Ended | ||||||||||||||||||||
| June 30, 2024 | June 30, 2023 | ||||||||||||||||||||
| Interest | Average | Interest | Average | ||||||||||||||||||
| Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||||||
| Balance | Expense | Rate (1) | Balance | Expense | Rate (1) | ||||||||||||||||
| Assets: | |||||||||||||||||||||
| Loans (net of unearned income and deferred costs) | $ | 11,425,496 | $ | 307,186 | 5.41 | % | $ | 11,153,944 | $ | 273,349 | 4.94 | % | |||||||||
| Taxable investment securities | 2,404,564 | 40,385 | 3.36 | % | 2,444,474 | 34,011 | 2.78 | % | |||||||||||||
| Tax-exempt investment securities | 159,021 | 3,071 | 3.86 | % | 198,940 | 3,891 | 3.91 | % | |||||||||||||
| Total securities | 2,563,585 | 43,456 | 3.39 | % | 2,643,414 | 37,902 | 2.87 | % | |||||||||||||
| Interest-bearing deposits | 1,175,069 | 28,746 | 4.92 | % | 1,154,218 | 25,137 | 4.39 | % | |||||||||||||
| Mortgage loans held for sale | 141,130 | 4,661 | 6.61 | % | 139,035 | 4,151 | 5.97 | % | |||||||||||||
| Total earning assets | 15,305,280 | 384,049 | 5.05 | % | 15,090,611 | 340,539 | 4.55 | % | |||||||||||||
| Less: allowance for loan losses | (127,102 | ) | (117,812 | ) | |||||||||||||||||
| Total nonearning assets | 1,745,180 | 1,616,524 | |||||||||||||||||||
| Total assets | $ | 16,923,358 | $ | 16,589,323 | |||||||||||||||||
| Liabilities and Equity: | |||||||||||||||||||||
| Interest-bearing deposits | |||||||||||||||||||||
| Demand and money market | $ | 6,862,115 | $ | 96,146 | 2.82 | % | $ | 6,219,081 | $ | 55,360 | 1.80 | % | |||||||||
| Savings | 323,405 | 1,726 | 1.07 | % | 386,532 | 1,739 | 0.91 | % | |||||||||||||
| Certificates of deposit | 2,649,777 | 62,539 | 4.75 | % | 1,826,777 | 25,506 | 2.82 | % | |||||||||||||
| Total interest-bearing deposits | 9,835,297 | 160,411 | 3.28 | % | 8,432,390 | 82,605 | 1.98 | % | |||||||||||||
| Borrowings | 156,270 | 4,705 | 5.95 | % | 610,946 | 14,261 | 4.64 | % | |||||||||||||
| Subordinated debt, net | 255,986 | 4,472 | 3.49 | % | 252,679 | 4,405 | 3.49 | % | |||||||||||||
| Total interest-bearing liabilities | 10,247,553 | 169,588 | 3.33 | % | 9,296,015 | 101,271 | 2.20 | % | |||||||||||||
| Demand deposits | 4,245,847 | 4,995,980 | |||||||||||||||||||
| Other noninterest-bearing liabilities | 387,010 | 334,930 | |||||||||||||||||||
| Total liabilities | 14,880,410 | 14,626,925 | |||||||||||||||||||
| Shareholders’ equity | 2,042,948 | 1,962,398 | |||||||||||||||||||
| Total liabilities and equity | $ | 16,923,358 | $ | 16,589,323 | |||||||||||||||||
| Net interest income (tax-equivalent basis)(4) | $ | 214,461 | $ | 239,268 | |||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures | |||||||||||||||||||||
| Tax-equivalent basis adjustment | (2,195 | ) | (2,280 | ) | |||||||||||||||||
| Net interest income (GAAP) | $ | 212,266 | $ | 236,988 | |||||||||||||||||
| Interest rate spread (2)(4) | 1.72 | % | 2.35 | % | |||||||||||||||||
| Interest expense as a percent of average earning assets | 2.23 | % | 1.35 | % | |||||||||||||||||
| Net interest margin (tax-equivalent basis) (3)(4) | 2.82 | % | 3.20 | % | |||||||||||||||||
| Total cost of deposits | 2.29 | % | 1.24 | % | |||||||||||||||||
| (1) Yields and interest income are presented on a tax-equivalent basis using the federal statutory rate of 21%. | |||||||||||||||||||||
| (2) Interest spread is the average yield earned on earning assets less the average rate paid on interest-bearing liabilities. Fully tax-equivalent. | |||||||||||||||||||||
| (3) Net interest margin is net interest income expressed as a percentage of average earning assets. Fully tax-equivalent. | |||||||||||||||||||||
| (4) Non-GAAP. | |||||||||||||||||||||
| TOWNEBANK | |||||||
| Consolidated Balance Sheets | |||||||
| (dollars in thousands, except share data) | |||||||
| June 30, | December 31, | ||||||
| 2024 | 2023 | ||||||
| (unaudited) | (audited) | ||||||
| ASSETS | |||||||
| Cash and due from banks | $ | 140,028 | $ | 85,584 | |||
| Interest-bearing deposits at FRB - Richmond | 1,062,115 | 939,356 | |||||
| Federal funds sold and interest-bearing deposits in financial institutions | 99,303 | 103,417 | |||||
| Total Cash and Cash Equivalents | 1,301,446 | 1,128,357 | |||||
| Securities available for sale, at fair value (amortized cost of $2,425,148 and $2,292,963, and allowance for credit losses of $1,541 and $1,498 at June 30, 2024 and December 31, 2023, respectively) | 2,250,679 | 2,129,342 | |||||
| Securities held to maturity, at amortized cost (fair value $199,783 and $462,656 at June 30, 2024 and December 31, 2023, respectively) | 212,488 | 477,592 | |||||
| Less: Allowance for credit losses | (79 | ) | (84 | ) | |||
| Securities held to maturity, net of allowance for credit losses | 212,409 | 477,508 | |||||
| Other equity securities | 13,566 | 13,792 | |||||
| FHLB stock | 12,134 | 21,372 | |||||
| Total Securities | 2,488,788 | 2,642,014 | |||||
| Mortgage loans held for sale | 200,762 | 149,987 | |||||
| Loans, net of unearned income and deferred costs | 11,451,747 | 11,329,021 | |||||
| Less: allowance for credit losses | (125,552 | ) | (126,461 | ) | |||
| Net Loans | 11,326,195 | 11,202,560 | |||||
| Premises and equipment, net | 340,348 | 337,598 | |||||
| Goodwill | 457,619 | 456,335 | |||||
| Other intangible assets, net | 65,460 | 64,634 | |||||
| BOLI | 277,434 | 277,445 | |||||
| Other assets | 610,791 | 576,109 | |||||
| TOTAL ASSETS | $ | 17,068,843 | $ | 16,835,039 | |||
| LIABILITIES AND EQUITY | |||||||
| Deposits: | |||||||
| Noninterest-bearing demand | $ | 4,303,773 | $ | 4,342,701 | |||
| Interest-bearing: | |||||||
| Demand and money market accounts | 6,940,086 | 6,757,619 | |||||
| Savings | 312,881 | 336,492 | |||||
| Certificates of deposit | 2,715,848 | 2,456,394 | |||||
| Total Deposits | 14,272,588 | 13,893,206 | |||||
| Advances from the FHLB | 3,591 | 203,958 | |||||
| Subordinated debt, net | 256,227 | 255,796 | |||||
| Repurchase agreements and other borrowings | 35,351 | 32,826 | |||||
| Total Borrowings | 295,169 | 492,580 | |||||
| Other liabilities | 411,770 | 393,375 | |||||
| TOTAL LIABILITIES | 14,979,527 | 14,779,161 | |||||
| Preferred stock, authorized and unissued shares - 2,000,000 | — | — | |||||
| Common stock, $1.667 par value: 150,000,000 shares authorized; | |||||||
| 75,039,089 and 74,893,462 shares issued at | |||||||
| June 30, 2024 and December 31, 2023, respectively | 125,090 | 124,847 | |||||
| Capital surplus | 1,115,759 | 1,112,761 | |||||
| Retained earnings | 961,162 | 921,126 | |||||
| Common stock issued to deferred compensation trust, at cost | |||||||
| 1,076,483 and 1,004,717 shares at June 30, 2024 and December 31, 2023, respectively | (22,756 | ) | (20,813 | ) | |||
| Deferred compensation trust | 22,756 | 20,813 | |||||
| Accumulated other comprehensive income (loss) | (129,224 | ) | (118,762 | ) | |||
| TOTAL SHAREHOLDERS’ EQUITY | 2,072,787 | 2,039,972 | |||||
| Noncontrolling interest | 16,529 | 15,906 | |||||
| TOTAL EQUITY | 2,089,316 | 2,055,878 | |||||
| TOTAL LIABILITIES AND EQUITY | $ | 17,068,843 | $ | 16,835,039 | |||
| TOWNEBANK | |||||||||||||||
| Consolidated Statements of Income (unaudited) | |||||||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||
| June 30, | June 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| INTEREST INCOME: | |||||||||||||||
| Loans, including fees | $ | 154,549 | $ | 138,977 | $ | 305,523 | $ | 271,745 | |||||||
| Investment securities | 22,928 | 18,851 | 42,924 | 37,226 | |||||||||||
| Interest-bearing deposits in financial institutions and federal funds sold | 14,512 | 14,488 | 28,746 | 25,137 | |||||||||||
| Mortgage loans held for sale | 2,945 | 2,547 | 4,661 | 4,151 | |||||||||||
| Total interest income | 194,934 | 174,863 | 381,854 | 338,259 | |||||||||||
| INTEREST EXPENSE: | |||||||||||||||
| Deposits | 82,023 | 48,671 | 160,411 | 82,605 | |||||||||||
| Advances from the FHLB | 942 | 10,407 | 3,380 | 13,399 | |||||||||||
| Subordinated debt, net | 2,236 | 2,236 | 4,472 | 4,405 | |||||||||||
| Repurchase agreements and other borrowings | 685 | (62 | ) | 1,325 | 862 | ||||||||||
| Total interest expense | 85,886 | 61,252 | 169,588 | 101,271 | |||||||||||
| Net interest income | 109,048 | 113,611 | 212,266 | 236,988 | |||||||||||
| PROVISION FOR CREDIT LOSSES | (177 | ) | 3,556 | (1,054 | ) | 15,225 | |||||||||
| Net interest income after provision for credit losses | 109,225 | 110,055 | 213,320 | 221,763 | |||||||||||
| NONINTEREST INCOME: | |||||||||||||||
| Residential mortgage banking income, net | 13,422 | 11,360 | 23,899 | 20,732 | |||||||||||
| Insurance commissions and related income, net | 24,031 | 22,498 | 49,570 | 45,321 | |||||||||||
| Property management income, net | 14,312 | 12,098 | 31,085 | 27,633 | |||||||||||
| Real estate brokerage income, net | — | 1,834 | — | 3,625 | |||||||||||
| Service charges on deposit accounts | 3,353 | 3,015 | 6,431 | 5,754 | |||||||||||
| Credit card merchant fees, net | 1,662 | 1,682 | 3,213 | 3,226 | |||||||||||
| Investment commission income, net | 2,580 | 2,166 | 4,923 | 4,218 | |||||||||||
| BOLI | 3,238 | 1,710 | 5,080 | 3,383 | |||||||||||
| Gain on sale of equity investment | — | 8,833 | — | 8,833 | |||||||||||
| Other income | 3,324 | 2,761 | 5,531 | 5,998 | |||||||||||
| Net gain/(loss) on investment securities | — | — | 74 | — | |||||||||||
| Total noninterest income | 65,922 | 67,957 | 129,806 | 128,723 | |||||||||||
| NONINTEREST EXPENSE: | |||||||||||||||
| Salaries and employee benefits | 71,349 | 67,445 | 142,726 | 136,866 | |||||||||||
| Occupancy | 9,717 | 9,487 | 19,139 | 18,552 | |||||||||||
| Furniture and equipment | 4,634 | 4,389 | 9,112 | 8,633 | |||||||||||
| Amortization - intangibles | 3,298 | 3,610 | 6,544 | 7,134 | |||||||||||
| Software | 7,056 | 6,169 | 13,156 | 11,792 | |||||||||||
| Data processing | 4,606 | 4,011 | 8,522 | 7,364 | |||||||||||
| Professional fees | 3,788 | 3,166 | 6,968 | 6,178 | |||||||||||
| Advertising and marketing | 3,524 | 3,959 | 8,106 | 8,360 | |||||||||||
| Other expenses | 16,012 | 22,992 | 35,302 | 44,747 | |||||||||||
| Total noninterest expense | 123,984 | 125,228 | 249,575 | 249,626 | |||||||||||
| Income before income tax expense and noncontrolling interest | 51,163 | 52,784 | 93,551 | 100,860 | |||||||||||
| Provision for income tax expense | 8,124 | 9,416 | 15,385 | 19,014 | |||||||||||
| Net income | $ | 43,039 | $ | 43,368 | $ | 78,166 | $ | 81,846 | |||||||
| Net income attributable to noncontrolling interest | (183 | ) | (1,652 | ) | (623 | ) | (1,797 | ) | |||||||
| Net income attributable to TowneBank | $ | 42,856 | $ | 41,716 | $ | 77,543 | $ | 80,049 | |||||||
| Per common share information | |||||||||||||||
| Basic earnings | $ | 0.57 | $ | 0.56 | $ | 1.04 | $ | 1.07 | |||||||
| Diluted earnings | $ | 0.57 | $ | 0.56 | $ | 1.03 | $ | 1.07 | |||||||
| Cash dividends declared | $ | 0.25 | $ | 0.25 | $ | 0.50 | $ | 0.48 | |||||||
| TOWNEBANK | |||||||||||||||||||
| Consolidated Balance Sheets - Five Quarter Trend | |||||||||||||||||||
| (dollars in thousands, except share data) | |||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||||
| 2024 | 2024 | 2023 | 2023 | 2023 | |||||||||||||||
| (unaudited) | (unaudited) | (audited) | (unaudited) | (unaudited) | |||||||||||||||
| ASSETS | |||||||||||||||||||
| Cash and due from banks | $ | 140,028 | $ | 75,802 | $ | 85,584 | $ | 83,949 | $ | 106,994 | |||||||||
| Interest-bearing deposits at FRB - Richmond | 1,062,115 | 926,635 | 939,356 | 1,029,276 | 1,427,044 | ||||||||||||||
| Federal funds sold and interest-bearing deposits in financial institutions | 99,303 | 98,673 | 103,417 | 102,527 | 102,231 | ||||||||||||||
| Total Cash and Cash Equivalents | 1,301,446 | 1,101,110 | 1,128,357 | 1,215,752 | 1,636,269 | ||||||||||||||
| Securities available for sale | 2,250,679 | 2,204,101 | 2,129,342 | 1,963,453 | 2,005,851 | ||||||||||||||
| Securities held to maturity | 212,488 | 312,510 | 477,592 | 547,854 | 548,017 | ||||||||||||||
| Less: allowance for credit losses | (79 | ) | (82 | ) | (84 | ) | (85 | ) | (87 | ) | |||||||||
| Securities held to maturity, net of allowance for credit losses | 212,409 | 312,428 | 477,508 | 547,769 | 547,930 | ||||||||||||||
| Other equity securities | 13,566 | 13,661 | 13,792 | 14,062 | 13,798 | ||||||||||||||
| FHLB stock | 12,134 | 12,139 | 21,372 | 16,634 | 40,454 | ||||||||||||||
| Total Securities | 2,488,788 | 2,542,329 | 2,642,014 | 2,541,918 | 2,608,033 | ||||||||||||||
| Mortgage loans held for sale | 200,762 | 150,727 | 149,987 | 188,048 | 229,502 | ||||||||||||||
| Loans, net of unearned income and deferred costs | 11,451,747 | 11,452,343 | 11,329,021 | 11,172,971 | 11,208,014 | ||||||||||||||
| Less: Allowance for credit losses | (125,552 | ) | (125,835 | ) | (126,461 | ) | (125,159 | ) | (123,513 | ) | |||||||||
| Net Loans | 11,326,195 | 11,326,508 | 11,202,560 | 11,047,812 | 11,084,501 | ||||||||||||||
| Premises and equipment, net | 340,348 | 342,569 | 337,598 | 335,522 | 326,686 | ||||||||||||||
| Goodwill | 457,619 | 457,619 | 456,335 | 456,684 | 456,695 | ||||||||||||||
| Other intangible assets, net | 65,460 | 68,758 | 64,634 | 67,496 | 71,106 | ||||||||||||||
| BOLI | 277,434 | 279,293 | 277,445 | 275,240 | 273,435 | ||||||||||||||
| Other assets | 610,791 | 615,324 | 576,109 | 551,884 | 538,848 | ||||||||||||||
| TOTAL ASSETS | $ | 17,068,843 | $ | 16,884,237 | $ | 16,835,039 | $ | 16,680,356 | $ | 17,225,075 | |||||||||
| LIABILITIES AND EQUITY | |||||||||||||||||||
| Deposits: | |||||||||||||||||||
| Noninterest-bearing demand | $ | 4,303,773 | $ | 4,194,132 | $ | 4,342,701 | $ | 4,444,861 | $ | 4,774,830 | |||||||||
| Interest-bearing: | |||||||||||||||||||
| Demand and money market accounts | 6,940,086 | 6,916,701 | 6,757,619 | 6,764,415 | 6,529,336 | ||||||||||||||
| Savings | 312,881 | 326,179 | 336,492 | 350,031 | 361,891 | ||||||||||||||
| Certificates of deposit | 2,715,848 | 2,689,062 | 2,456,394 | 2,321,498 | 2,100,604 | ||||||||||||||
| Total Deposits | 14,272,588 | 14,126,074 | 13,893,206 | 13,880,805 | 13,766,661 | ||||||||||||||
| Advances from the FHLB | 3,591 | 3,775 | 203,958 | 104,139 | 754,319 | ||||||||||||||
| Subordinated debt, net | 256,227 | 256,011 | 255,796 | 255,580 | 255,365 | ||||||||||||||
| Repurchase agreements and other borrowings | 35,351 | 31,198 | 32,826 | 47,315 | 49,898 | ||||||||||||||
| Total Borrowings | 295,169 | 290,984 | 492,580 | 407,034 | 1,059,582 | ||||||||||||||
| Other liabilities | 411,770 | 401,307 | 393,375 | 408,305 | 408,333 | ||||||||||||||
| TOTAL LIABILITIES | 14,979,527 | 14,818,365 | 14,779,161 | 14,696,144 | 15,234,576 | ||||||||||||||
| Preferred stock | — | — | — | — | — | ||||||||||||||
| Common stock, $1.667 par value | 125,090 | 125,009 | 124,847 | 124,837 | 124,805 | ||||||||||||||
| Capital surplus | 1,115,759 | 1,114,038 | 1,112,761 | 1,111,152 | 1,109,526 | ||||||||||||||
| Retained earnings | 961,162 | 937,065 | 921,126 | 911,042 | 884,901 | ||||||||||||||
| Common stock issued to deferred compensation | |||||||||||||||||||
| trust, at cost | (22,756 | ) | (20,915 | ) | (20,813 | ) | (20,740 | ) | (20,134 | ) | |||||||||
| Deferred compensation trust | 22,756 | 20,915 | 20,813 | 20,740 | 20,134 | ||||||||||||||
| Accumulated other comprehensive income (loss) | (129,224 | ) | (126,586 | ) | (118,762 | ) | (179,043 | ) | (145,392 | ) | |||||||||
| TOTAL SHAREHOLDERS’ EQUITY | 2,072,787 | 2,049,526 | 2,039,972 | 1,967,988 | 1,973,840 | ||||||||||||||
| Noncontrolling interest | 16,529 | 16,346 | 15,906 | 16,224 | 16,659 | ||||||||||||||
| TOTAL EQUITY | 2,089,316 | 2,065,872 | 2,055,878 | 1,984,212 | 1,990,499 | ||||||||||||||
| TOTAL LIABILITIES AND EQUITY | $ | 17,068,843 | $ | 16,884,237 | $ | 16,835,039 | $ | 16,680,356 | $ | 17,225,075 | |||||||||
| TOWNEBANK | |||||||||||||||||||
| Consolidated Statements of Income - Five Quarter Trend (unaudited) | |||||||||||||||||||
| (dollars in thousands, except share data) | |||||||||||||||||||
| Three Months Ended | |||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||||
| 2024 | 2024 | 2023 | 2023 | 2023 | |||||||||||||||
| INTEREST INCOME: | |||||||||||||||||||
| Loans, including fees | $ | 154,549 | $ | 150,974 | $ | 146,810 | $ | 143,605 | $ | 138,977 | |||||||||
| Investment securities | 22,928 | 19,996 | 20,464 | 20,292 | 18,851 | ||||||||||||||
| Interest-bearing deposits in financial institutions and federal funds sold | 14,512 | 14,234 | 13,967 | 15,031 | 14,488 | ||||||||||||||
| Mortgage loans held for sale | 2,945 | 1,716 | 2,886 | 3,928 | 2,547 | ||||||||||||||
| Total interest income | 194,934 | 186,920 | 184,127 | 182,856 | 174,863 | ||||||||||||||
| INTEREST EXPENSE: | |||||||||||||||||||
| Deposits | 82,023 | 78,388 | 73,200 | 64,171 | 48,671 | ||||||||||||||
| Advances from the FHLB | 942 | 2,438 | 917 | 3,438 | 10,407 | ||||||||||||||
| Subordinated debt, net | 2,236 | 2,236 | 2,236 | 2,245 | 2,236 | ||||||||||||||
| Repurchase agreements and other borrowings | 685 | 640 | 41 | (56 | ) | (62 | ) | ||||||||||||
| Total interest expense | 85,886 | 83,702 | 76,394 | 69,798 | 61,252 | ||||||||||||||
| Net interest income | 109,048 | 103,218 | 107,733 | 113,058 | 113,611 | ||||||||||||||
| PROVISION FOR CREDIT LOSSES | (177 | ) | (877 | ) | 2,446 | 1,007 | 3,556 | ||||||||||||
| Net interest income after provision for credit losses | 109,225 | 104,095 | 105,287 | 112,051 | 110,055 | ||||||||||||||
| NONINTEREST INCOME: | |||||||||||||||||||
| Residential mortgage banking income, net | 13,422 | 10,477 | 8,035 | 10,648 | 11,360 | ||||||||||||||
| Insurance commissions and related income, net | 24,031 | 25,539 | 21,207 | 23,777 | 22,498 | ||||||||||||||
| Property management income, net | 14,312 | 16,773 | 7,358 | 12,800 | 12,098 | ||||||||||||||
| Real estate brokerage income, net | — | — | (32 | ) | (63 | ) | 1,834 | ||||||||||||
| Service charges on deposit accounts | 3,353 | 3,079 | 3,056 | 2,823 | 3,015 | ||||||||||||||
| Credit card merchant fees, net | 1,662 | 1,551 | 1,476 | 2,006 | 1,682 | ||||||||||||||
| Investment commission income, net | 2,580 | 2,343 | 2,380 | 2,363 | 2,166 | ||||||||||||||
| BOLI | 3,238 | 1,842 | 2,206 | 1,814 | 1,710 | ||||||||||||||
| Other income | 3,324 | 2,206 | 2,127 | 3,638 | 11,594 | ||||||||||||||
| Net gain/(loss) on investment securities | — | 74 | — | — | — | ||||||||||||||
| Total noninterest income | 65,922 | 63,884 | 47,813 | 59,806 | 67,957 | ||||||||||||||
| NONINTEREST EXPENSE: | |||||||||||||||||||
| Salaries and employee benefits | 71,349 | 71,377 | 66,035 | 67,258 | 67,445 | ||||||||||||||
| Occupancy | 9,717 | 9,422 | 9,308 | 9,027 | 9,487 | ||||||||||||||
| Furniture and equipment | 4,634 | 4,478 | 4,445 | 4,100 | 4,389 | ||||||||||||||
| Amortization - intangibles | 3,298 | 3,246 | 3,411 | 3,610 | 3,610 | ||||||||||||||
| Software | 7,056 | 6,100 | 6,743 | 6,130 | 6,169 | ||||||||||||||
| Data processing | 4,606 | 3,916 | 3,529 | 4,140 | 4,011 | ||||||||||||||
| Professional fees | 3,788 | 3,180 | 3,339 | 2,770 | 3,166 | ||||||||||||||
| Advertising and marketing | 3,524 | 4,582 | 3,377 | 3,653 | 3,959 | ||||||||||||||
| Other expenses | 16,012 | 19,290 | 21,708 | 17,014 | 22,992 | ||||||||||||||
| Total noninterest expense | 123,984 | 125,591 | 121,895 | 117,702 | 125,228 | ||||||||||||||
| Income before income tax expense and noncontrolling interest | 51,163 | 42,388 | 31,205 | 54,155 | 52,784 | ||||||||||||||
| Provision for income tax expense | 8,124 | 7,261 | 2,660 | 9,410 | 9,416 | ||||||||||||||
| Net income | 43,039 | 35,127 | 28,545 | 44,745 | 43,368 | ||||||||||||||
| Net income attributable to noncontrolling interest | (183 | ) | (440 | ) | 259 | 117 | (1,652 | ) | |||||||||||
| Net income attributable to TowneBank | $ | 42,856 | $ | 34,687 | $ | 28,804 | $ | 44,862 | $ | 41,716 | |||||||||
| Per common share information | |||||||||||||||||||
| Basic earnings | $ | 0.57 | $ | 0.46 | $ | 0.39 | $ | 0.60 | $ | 0.56 | |||||||||
| Diluted earnings | $ | 0.57 | $ | 0.46 | $ | 0.39 | $ | 0.60 | $ | 0.56 | |||||||||
| Basic weighted average shares outstanding | 74,925,877 | 74,816,420 | 74,773,335 | 74,750,294 | 74,691,121 | ||||||||||||||
| Diluted weighted average shares outstanding | 75,037,955 | 74,979,501 | 74,793,557 | 74,765,515 | 74,699,810 | ||||||||||||||
| Cash dividends declared | $ | 0.25 | $ | 0.25 | $ | 0.25 | $ | 0.25 | $ | 0.25 | |||||||||
| TOWNEBANK | ||||||||||||||||||||||||||
| Banking Segment Financial Information (unaudited) | ||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | Increase/(Decrease) | ||||||||||||||||||||||||
| June 30, | March 31, | June 30, | YTD 2024 over 2023 | |||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2024 | 2023 | Amount | Percent | ||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||
| Net interest income | $ | 108,029 | $ | 113,327 | $ | 102,682 | $ | 210,711 | $ | 236,976 | $ | (26,265 | ) | (11.08)% | ||||||||||||
| Service charges on deposit accounts | 3,352 | 3,015 | 3,079 | 6,431 | 5,754 | 677 | 11.77 | % | ||||||||||||||||||
| Credit card merchant fees | 1,662 | 1,682 | 1,551 | 3,213 | 3,226 | (13 | ) | (0.40)% | ||||||||||||||||||
| Investment commission income, net | 2,580 | 2,166 | 2,343 | 4,923 | 4,218 | 705 | 16.71 | % | ||||||||||||||||||
| Other income | 4,840 | 3,990 | 3,429 | 8,268 | 7,790 | 478 | 6.14 | % | ||||||||||||||||||
| Subtotal | 12,434 | 10,853 | 10,402 | 22,835 | 20,988 | 1,847 | 8.80 | % | ||||||||||||||||||
| Net gain/(loss) on investment securities | — | — | 74 | 74 | — | 74 | N/M | |||||||||||||||||||
| Total noninterest income | 12,434 | 10,853 | 10,476 | 22,909 | 20,988 | 1,921 | 9.15 | % | ||||||||||||||||||
| Total revenue | 120,463 | 124,180 | 113,158 | 233,620 | 257,964 | (24,344 | ) | (9.44)% | ||||||||||||||||||
| Provision for credit losses | (170 | ) | 3,482 | (976 | ) | (1,146 | ) | 15,235 | (16,381 | ) | (107.52)% | |||||||||||||||
| Expenses | ||||||||||||||||||||||||||
| Salaries and employee benefits | 46,640 | 42,240 | 46,474 | 93,113 | 85,433 | 7,680 | 8.99 | % | ||||||||||||||||||
| Occupancy | 7,194 | 6,846 | 7,061 | 14,254 | 13,080 | 1,174 | 8.98 | % | ||||||||||||||||||
| Furniture and equipment | 3,810 | 3,544 | 3,648 | 7,458 | 6,877 | 581 | 8.45 | % | ||||||||||||||||||
| Amortization of intangible assets | 1,117 | 1,341 | 1,162 | 2,280 | 2,622 | (342 | ) | (13.04)% | ||||||||||||||||||
| Other expenses | 23,587 | 29,178 | 26,953 | 50,541 | 57,621 | (7,080 | ) | (12.29)% | ||||||||||||||||||
| Total expenses | 82,348 | 83,149 | 85,298 | 167,646 | 165,633 | 2,013 | 1.22 | % | ||||||||||||||||||
| Income before income tax, corporate allocation and noncontrolling interest | 38,285 | 37,549 | 28,836 | 67,120 | 77,096 | (9,976 | ) | (12.94)% | ||||||||||||||||||
| Corporate allocation | 1,232 | 1,271 | 1,069 | 2,301 | 2,472 | (171 | ) | (6.92)% | ||||||||||||||||||
| Income before income tax provision and noncontrolling interest | 39,517 | 38,820 | 29,905 | 69,421 | 79,568 | (10,147 | ) | (12.75)% | ||||||||||||||||||
| Provision for income tax expense | 5,130 | 6,114 | 4,105 | 9,235 | 13,765 | (4,530 | ) | (32.91)% | ||||||||||||||||||
| Net income | 34,387 | 32,706 | 25,800 | 60,186 | 65,803 | (5,617 | ) | (8.54)% | ||||||||||||||||||
| Noncontrolling interest | (58 | ) | — | 120 | 62 | — | 62 | N/M | ||||||||||||||||||
| Net income attributable to TowneBank | $ | 34,329 | $ | 32,706 | $ | 25,920 | $ | 60,248 | $ | 65,803 | $ | (5,555 | ) | (8.44)% | ||||||||||||
| Efficiency ratio(non-GAAP) | 67.43 | % | 65.88 | % | 74.40 | % | 70.81 | % | 63.19 | % | 7.62 | % | 12.06 | % | ||||||||||||
| TOWNEBANK | ||||||||||||||||||||||||||
| Realty Segment Financial Information (unaudited) | ||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | Increase/(Decrease) | ||||||||||||||||||||||||
| June 30, | March 31, | June 30, | YTD 2024 over 2023 | |||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2024 | 2023 | Amount | Percent | ||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||
| Residential mortgage brokerage income, net | $ | 13,996 | $ | 12,215 | $ | 10,798 | $ | 24,795 | $ | 22,009 | $ | 2,786 | 12.66 | % | ||||||||||||
| Real estate brokerage income, net | — | 1,834 | — | — | 3,625 | (3,625 | ) | (100.00)% | ||||||||||||||||||
| Title insurance and settlement fees | — | 152 | — | — | 443 | (443 | ) | (100.00)% | ||||||||||||||||||
| Property management fees, net | 14,312 | 12,098 | 16,773 | 31,085 | 27,633 | 3,452 | 12.49 | % | ||||||||||||||||||
| Income (loss) from unconsolidated subsidiary | 67 | (886 | ) | 30 | 97 | (821 | ) | 918 | 111.81 | % | ||||||||||||||||
| Gain on equity investment | — | 8,833 | — | — | 8,833 | (8,833 | ) | (100.00)% | ||||||||||||||||||
| Net interest and other income | 1,317 | 635 | 784 | 2,101 | 820 | 1,281 | 156.22 | % | ||||||||||||||||||
| Total revenue | 29,692 | 34,881 | 28,385 | 58,078 | 62,542 | (4,464 | ) | (7.14)% | ||||||||||||||||||
| Provision for credit losses | (7 | ) | 74 | 99 | 92 | (10 | ) | 102 | 1,020.00 | % | ||||||||||||||||
| Expenses | ||||||||||||||||||||||||||
| Salaries and employee benefits | 12,370 | 13,949 | 12,188 | 24,558 | 28,789 | (4,231 | ) | (14.70)% | ||||||||||||||||||
| Occupancy | 1,811 | 1,869 | 1,569 | 3,381 | 3,890 | (509 | ) | (13.08)% | ||||||||||||||||||
| Furniture and equipment | 596 | 640 | 594 | 1,190 | 1,333 | (143 | ) | (10.73)% | ||||||||||||||||||
| Amortization of intangible assets | 781 | 741 | 677 | 1,457 | 1,424 | 33 | 2.32 | % | ||||||||||||||||||
| Other expenses | 9,136 | 9,337 | 8,199 | 17,335 | 17,775 | (440 | ) | (2.48)% | ||||||||||||||||||
| Total expenses | 24,694 | 26,536 | 23,227 | 47,921 | 53,211 | (5,290 | ) | (9.94)% | ||||||||||||||||||
| Income before income tax, corporate allocation and noncontrolling interest | 5,005 | 8,271 | 5,059 | 10,065 | 9,341 | 724 | 7.75 | % | ||||||||||||||||||
| Corporate allocation | (490 | ) | (600 | ) | (348 | ) | (838 | ) | (1,200 | ) | 362 | (30.17)% | ||||||||||||||
| Income before income tax provision and noncontrolling interest | 4,515 | 7,671 | 4,711 | 9,227 | 8,141 | 1,086 | 13.34 | % | ||||||||||||||||||
| Provision for income tax expense | 1,163 | 1,686 | 1,156 | 2,319 | 1,867 | 452 | 24.21 | % | ||||||||||||||||||
| Net income | 3,352 | 5,985 | 3,555 | 6,908 | 6,274 | 634 | 10.11 | % | ||||||||||||||||||
| Noncontrolling interest | (125 | ) | (1,652 | ) | (560 | ) | (685 | ) | (1,797 | ) | 1,112 | (61.88)% | ||||||||||||||
| Net income attributable to TowneBank | $ | 3,227 | $ | 4,333 | $ | 2,995 | $ | 6,223 | $ | 4,477 | $ | 1,746 | 39.00 | % | ||||||||||||
| Efficiency ratio excluding gain on equity investment(non-GAAP) | 80.54 | % | 99.03 | % | 79.44 | % | 80.00 | % | 96.42 | % | (16.42) % | (17.03)% | ||||||||||||||
| TOWNEBANK | ||||||||||||||||||||||||||
| Insurance Segment Financial Information (unaudited) | ||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | Increase/(Decrease) | ||||||||||||||||||||||||
| June 30, | March 31, | June 30, | YTD 2024 over 2023 | |||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2024 | 2023 | Amount | Percent | ||||||||||||||||||||
| Commission and fee income | ||||||||||||||||||||||||||
| Property and casualty | $ | 22,225 | $ | 20,028 | $ | 20,722 | $ | 42,947 | $ | 38,156 | $ | 4,791 | 12.56 | % | ||||||||||||
| Employee benefits | 4,404 | 4,561 | 4,826 | 9,230 | 9,148 | 82 | 0.90 | % | ||||||||||||||||||
| Specialized benefit services | — | 153 | 9 | 9 | 312 | (303 | ) | (97.12)% | ||||||||||||||||||
| Total commissions and fees | 26,629 | 24,742 | 25,557 | 52,186 | 47,616 | 4,570 | 9.60 | % | ||||||||||||||||||
| Contingency and bonus revenue | 2,951 | 2,638 | 4,503 | 7,454 | 7,008 | 446 | 6.36 | % | ||||||||||||||||||
| Other income | 6 | 8 | 11 | 17 | 15 | 2 | 13.33 | % | ||||||||||||||||||
| Total revenue | 29,586 | 27,388 | 30,071 | 59,657 | 54,639 | 5,018 | 9.18 | % | ||||||||||||||||||
| Employee commission expense | 4,771 | 4,881 | 4,512 | 9,283 | 9,434 | (151 | ) | (1.60)% | ||||||||||||||||||
| Revenue, net of commission expense | 24,815 | 22,507 | 25,559 | 50,374 | 45,205 | 5,169 | 11.43 | % | ||||||||||||||||||
| Salaries and employee benefits | 12,339 | 11,256 | 12,715 | 25,055 | 22,644 | 2,411 | 10.65 | % | ||||||||||||||||||
| Occupancy | 712 | 772 | 792 | 1,504 | 1,582 | (78 | ) | (4.93)% | ||||||||||||||||||
| Furniture and equipment | 228 | 205 | 236 | 464 | 423 | 41 | 9.69 | % | ||||||||||||||||||
| Amortization of intangible assets | 1,400 | 1,528 | 1,407 | 2,807 | 3,088 | (281 | ) | (9.10)% | ||||||||||||||||||
| Other expenses | 2,263 | 1,782 | 1,916 | 4,178 | 3,045 | 1,133 | 37.21 | % | ||||||||||||||||||
| Total operating expenses | 16,942 | 15,543 | 17,066 | 34,008 | 30,782 | 3,226 | 10.48 | % | ||||||||||||||||||
| Income before income tax, corporate allocation and noncontrolling interest | 7,873 | 6,964 | 8,493 | 16,366 | 14,423 | 1,943 | 13.47 | % | ||||||||||||||||||
| Corporate allocation | (742 | ) | (671 | ) | (721 | ) | (1,463 | ) | (1,272 | ) | (191 | ) | 15.02 | % | ||||||||||||
| Income before income tax provision and noncontrolling interest | 7,131 | 6,293 | 7,772 | 14,903 | 13,151 | 1,752 | 13.32 | % | ||||||||||||||||||
| Provision for income tax expense | 1,831 | 1,616 | 2,000 | 3,831 | 3,382 | 449 | 13.28 | % | ||||||||||||||||||
| Net income | 5,300 | 4,677 | 5,772 | 11,072 | 9,769 | 1,303 | 13.34 | % | ||||||||||||||||||
| Noncontrolling interest | — | — | — | — | — | — | — | % | ||||||||||||||||||
| Net income attributable to TowneBank | $ | 5,300 | $ | 4,677 | $ | 5,772 | $ | 11,072 | $ | 9,769 | $ | 1,303 | 13.34 | % | ||||||||||||
| Provision for income taxes | 1,831 | 1,616 | 2,000 | 3,831 | 3,382 | 449 | 13.28 | % | ||||||||||||||||||
| Depreciation, amortization and interest expense | 1,529 | 1,683 | 1,553 | 3,083 | 3,389 | (306 | ) | (9.03)% | ||||||||||||||||||
| EBITDA(non-GAAP) | $ | 8,660 | $ | 7,976 | $ | 9,325 | $ | 17,986 | $ | 16,540 | $ | 1,446 | 8.74 | % | ||||||||||||
| Efficiency ratio(non-GAAP) | 62.63 | % | 62.27 | % | 61.27 | % | 61.94 | % | 61.26 | % | 0.68 | % | 1.11 | % | ||||||||||||
| TOWNEBANK | |||||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures | |||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||
| June 30, | June 30, | March 31, | June 30, | June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2024 | 2023 | |||||||||||||||
| Return on average assets (GAAP) | 1.01 | % | 0.99 | % | 0.83 | % | 0.92 | % | 0.97 | % | |||||||||
| Impact of excluding average goodwill and other intangibles and amortization | 0.10 | % | 0.11 | % | 0.09 | % | 0.09 | % | 0.11 | % | |||||||||
| Return on average tangible assets (non-GAAP) | 1.11 | % | 1.10 | % | 0.92 | % | 1.01 | % | 1.08 | % | |||||||||
| Return on average equity (GAAP) | 8.43 | % | 8.46 | % | 6.84 | % | 7.63 | % | 8.23 | % | |||||||||
| Impact of excluding average goodwill and other intangibles and amortization | 3.60 | % | 3.89 | % | 3.03 | % | 3.32 | % | 3.80 | % | |||||||||
| Return on average tangible equity (non-GAAP) | 12.03 | % | 12.35 | % | 9.87 | % | 10.95 | % | 12.03 | % | |||||||||
| Return on average common equity (GAAP) | 8.49 | % | 8.52 | % | 6.89 | % | 7.69 | % | 8.29 | % | |||||||||
| Impact of excluding average goodwill and other intangibles and amortization | 3.67 | % | 3.96 | % | 3.09 | % | 3.38 | % | 3.87 | % | |||||||||
| Return on average tangible common equity (non-GAAP) | 12.16 | % | 12.48 | % | 9.98 | % | 11.07 | % | 12.16 | % | |||||||||
| Book value (GAAP) | $ | 27.62 | $ | 26.36 | $ | 27.33 | $ | 27.62 | $ | 26.36 | |||||||||
| Impact of excluding average goodwill and other intangibles and amortization | (6.97 | ) | (7.05 | ) | (7.02 | ) | (6.97 | ) | (7.05 | ) | |||||||||
| Tangible book value (non-GAAP) | $ | 20.65 | $ | 19.31 | $ | 20.31 | $ | 20.65 | $ | 19.31 | |||||||||
| Efficiency ratio (GAAP) | 70.86 | % | 68.97 | % | 75.16 | % | 72.96 | % | 68.26 | % | |||||||||
| Impact of exclusions | (1.88)% | 1.44 | % | (1.91)% | (1.90)% | (0.31)% | |||||||||||||
| Efficiency ratio (non-GAAP) | 68.98 | % | 70.41 | % | 73.25 | % | 71.06 | % | 67.95 | % | |||||||||
| Average assets (GAAP) | $ | 16,982,482 | $ | 16,826,965 | $ | 16,864,235 | $ | 16,923,358 | $ | 16,589,323 | |||||||||
| Less: average goodwill and intangible assets | 525,122 | 530,658 | 522,675 | 523,899 | 526,339 | ||||||||||||||
| Average tangible assets (non-GAAP) | $ | 16,457,360 | $ | 16,296,307 | $ | 16,341,560 | $ | 16,399,459 | $ | 16,062,984 | |||||||||
| Average equity (GAAP) | $ | 2,045,622 | $ | 1,978,613 | $ | 2,040,275 | $ | 2,042,948 | $ | 1,962,398 | |||||||||
| Less: average goodwill and intangible assets | 525,122 | 530,658 | 522,675 | 523,899 | 526,339 | ||||||||||||||
| Average tangible equity (non-GAAP) | $ | 1,520,500 | $ | 1,447,955 | $ | 1,517,600 | $ | 1,519,049 | $ | 1,436,059 | |||||||||
| Average common equity (GAAP) | $ | 2,029,150 | $ | 1,963,164 | $ | 2,024,169 | $ | 2,026,659 | $ | 1,947,202 | |||||||||
| Less: average goodwill and intangible assets | 525,122 | 530,658 | 522,675 | 523,899 | 526,339 | ||||||||||||||
| Average tangible common equity (non-GAAP) | $ | 1,504,028 | $ | 1,432,506 | $ | 1,501,494 | $ | 1,502,760 | $ | 1,420,863 | |||||||||
| Net income (GAAP) | $ | 42,856 | $ | 41,716 | $ | 34,687 | $ | 77,543 | $ | 80,049 | |||||||||
| Amortization of intangibles, net of tax | 2,605 | 2,852 | 2,564 | 5,170 | 5,636 | ||||||||||||||
| Tangible net income (non-GAAP) | $ | 45,461 | $ | 44,568 | $ | 37,251 | $ | 82,713 | $ | 85,685 | |||||||||
| Total revenue (GAAP) | $ | 174,970 | $ | 181,568 | $ | 167,102 | $ | 342,072 | $ | 365,711 | |||||||||
| Net (gain)/loss on investment securities | — | — | (74 | ) | (74 | ) | — | ||||||||||||
| Other nonrecurring (income) loss | — | (8,833 | ) | — | — | (8,833 | ) | ||||||||||||
| Total Revenue for efficiency calculation (non-GAAP) | $ | 174,970 | $ | 172,735 | $ | 167,028 | $ | 341,998 | $ | 356,878 | |||||||||
| Noninterest expense (GAAP) | $ | 123,984 | $ | 125,228 | $ | 125,591 | $ | 249,575 | $ | 249,626 | |||||||||
| Less: amortization of intangibles | 3,298 | 3,610 | 3,246 | 6,544 | 7,134 | ||||||||||||||
| Noninterest expense net of amortization (non-GAAP) | $ | 120,686 | $ | 121,618 | $ | 122,345 | $ | 243,031 | $ | 242,492 | |||||||||
| TOWNEBANK | ||||||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures | ||||||||||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||||||||
| Reconciliation of GAAP Earnings to Operating Earnings Excluding Certain Items Affecting Comparability | Three Months Ended | |||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
| 2024 | 2024 | 2023 | 2023 | 2023 | ||||||||||||||||
| Net income (GAAP) | $ | 42,856 | $ | 34,687 | $ | 28,804 | $ | 44,862 | $ | 41,716 | ||||||||||
| Adjustments | ||||||||||||||||||||
| Plus: Acquisition-related expenses, net of tax | 18 | 564 | 56 | 458 | 2,457 | |||||||||||||||
| Plus: FDIC special assessment, net of tax | (310 | ) | 1,021 | 4,083 | — | — | ||||||||||||||
| Less: Gain on sale of equity investments, net of noncontrolling interest | — | — | (1,846 | ) | (438 | ) | (5,513 | ) | ||||||||||||
| Core operating earnings, excluding certain items affecting comparability (non-GAAP) | $ | 42,564 | $ | 36,272 | $ | 31,097 | $ | 44,882 | $ | 38,660 | ||||||||||
| Weighted average diluted shares | 75,037,955 | 74,979,501 | 74,793,557 | 74,765,515 | 74,699,810 | |||||||||||||||
| Diluted EPS (GAAP) | $ | 0.57 | $ | 0.46 | $ | 0.39 | $ | 0.60 | $ | 0.56 | ||||||||||
| Diluted EPS, excluding certain items affecting comparability (non-GAAP) | $ | 0.57 | $ | 0.48 | $ | 0.42 | $ | 0.60 | $ | 0.52 | ||||||||||
| Average assets | $ | 16,982,482 | $ | 16,864,235 | $ | 16,683,041 | $ | 16,762,859 | $ | 16,826,965 | ||||||||||
| Average tangible equity | $ | 1,520,500 | $ | 1,517,600 | 1,465,216 | $ | 1,460,024 | $ | 1,447,955 | |||||||||||
| Average common tangible equity | $ | 1,504,028 | $ | 1,501,494 | $ | 1,449,052 | $ | 1,443,453 | $ | 1,432,506 | ||||||||||
| Return on average assets, excluding certain items affecting comparability (non-GAAP) | 1.01 | % | 0.87 | % | 0.74 | % | 1.06 | % | 0.92 | % | ||||||||||
| Return on average tangible equity, excluding certain items affecting comparability (non-GAAP) | 11.95 | % | 10.29 | % | 9.15 | % | 12.97 | % | 11.50 | % | ||||||||||
| Return on average common tangible equity, excluding certain items affecting comparability (non-GAAP) | 12.08 | % | 10.40 | % | 9.25 | % | 13.13 | % | 11.62 | % | ||||||||||
| Efficiency ratio, excluding certain items affecting comparability (non-GAAP) | 70.85 | % | 74.84 | % | 78.33 | % | 67.76 | % | 67.32 | % | ||||||||||
| TOWNEBANK | ||||||||
| Reconciliation of Non-GAAP Financial Measures | ||||||||
| (dollars in thousands, except per share data) | ||||||||
| Reconciliation of GAAP Earnings to Operating Earnings Excluding Certain Items Affecting Comparability | Six Months Ended | |||||||
| June 30, | June 30, | |||||||
| 2024 | 2023 | |||||||
| Net income (GAAP) | $ | 77,543 | $ | 80,049 | ||||
| Adjustments | ||||||||
| Plus: Acquisition-related expenses, net of tax | 582 | 7,260 | ||||||
| Plus: FDIC special assessment, net of tax | 711 | — | ||||||
| Plus: Initial provision for acquired loans, net of tax | — | 3,166 | ||||||
| Less: Gain on sale of equity investments, net of noncontrolling interest and tax | — | (5,513 | ) | |||||
| Total charges, net of taxes | 1,293 | 4,913 | ||||||
| Core operating earnings, excluding certain items affecting comparability (non-GAAP) | $ | 78,836 | $ | 84,962 | ||||
| Weighted average diluted shares | 75,002,469 | 74,545,389 | ||||||
| Diluted EPS (GAAP) | $ | 1.03 | $ | 1.07 | ||||
| Diluted EPS, excluding certain items affecting comparability (non-GAAP) | $ | 1.05 | $ | 1.14 | ||||
| Average assets | $ | 16,923,358 | $ | 16,589,323 | ||||
| Average tangible equity | $ | 1,519,049 | $ | 1,436,059 | ||||
| Average tangible common equity | $ | 1,502,760 | $ | 1,420,863 | ||||
| Return on average assets, excluding certain items affecting comparability (non-GAAP) | 0.94 | % | 1.03 | % | ||||
| Return on average tangible equity, excluding certain items affecting comparability (non-GAAP) | 11.12 | % | 12.72 | % | ||||
| Return on average common tangible equity, excluding certain items affecting comparability (non-GAAP) | 11.24 | % | 12.86 | % | ||||
| Efficiency ratio, excluding certain items affecting comparability (non-GAAP) | 72.80 | % | 67.44 | % | ||||
