SUFFOLK, Va., July 27, 2023 (GLOBE NEWSWIRE) -- TowneBank ("Towne") (NASDAQ: TOWN) today reported earnings for the quarter ended June 30, 2023 of $41.72 million, or $0.56 per diluted share, compared to $46.55 million, or $0.64 per diluted share, for the quarter ended June 30, 2022. Excluding acquisition-related items and the gain on sale of Berkshire Hathaway HomeServices ("BHHS") Towne Realty, core earnings (non-GAAP) for the quarter ended June 30, 2023 were $38.66 million, or $0.52 per diluted share, compared to $46.60 million, or $0.64 per diluted share, for the quarter ended June 30, 2022.
"We continue to emphasize strong levels of on balance sheet liquidity, deposit growth, and prudent loan growth in the current environment. Our performance during the quarter delivered success on each of these important initiatives. Our HomeTowne Bankers generated nearly $170 million in deposit growth, or 5% on an annualized basis, which demonstrates the strength of our main street banking model. In addition, we increased reserve levels and grew tangible book value during the quarter. While earnings will likely remain under pressure in the short run, we believe our conservative approach to balance sheet management will position our Company to benefit from opportunities despite a challenging operating environment," said G. Robert Aston, Jr., Executive Chairman.
Highlights for Second Quarter 2023:
- Total revenues were $181.57 million, an increase of $14.59 million, or 8.74%, compared to second quarter 2022. In addition to a $4.27 million increase in net interest income, noninterest income increased $10.32 million, driven by the $8.83 million gross gain on the sale of BHHS Towne Realty.
- Loans held for investment were $11.21 billion, increases of $0.78 billion, or 7.50%, compared to June 30, 2022, and $34.23 million, or 0.31%, compared to March 31, 2023, 1.23% on an annualized basis. Towne completed the acquisition of Farmers Bankshares, Inc. and its wholly owned subsidiary, Farmers Bank, in January 2023. Excluding loans acquired in the first quarter, total loans would have increased $0.50 billion, or 4.84%, compared to June 30, 2022.
- Total deposits were $13.77 billion, a decline of $229.45 million, or 1.64%, compared to second quarter 2022. Excluding $514.57 million in acquired deposits, total deposits would have decreased $744.02 million, or 5.32%, in the yearly comparison. In comparison to March 31, 2023, total deposits increased 1.24%, or $168.53 million, 4.97% on an annualized basis.
- Noninterest bearing deposits decreased 16.57%, to $4.77 billion, compared to second quarter 2022 and represented 34.68% of total deposits. Compared to the linked quarter, noninterest bearing deposits decreased 5.81%.
- Annualized return on common shareholders' equity was 8.52% compared to 10.03% in second quarter 2022. Annualized return on average tangible common shareholders' equity (non-GAAP) was 12.48% compared to 14.37% in second quarter 2022.
- Net interest margin was 2.98% for the quarter and taxable equivalent net interest margin (non-GAAP) was 3.01% compared to the prior year quarter net interest margin of 2.88% and taxable equivalent net interest margin (non-GAAP) of 2.89%.
- The effective tax rate of 18.41% in the quarter compared to 19.32% in second quarter 2022 and 20.03% in the linked quarter.
"We were pleased to announce the formation of BHHS RW Towne Realty, Inc during the quarter. Beyond the financial merits of the transaction, this combination brings two market-leading real estate brokerage operations together, each having distinct core competencies which will deliver unparalleled capabilities in Hampton Roads. The transaction also highlights TowneBank's proven approach to growing scale in our fee-based businesses whether organic, via acquisitions or by creating strategic partnerships," stated William I. Foster III, President and Chief Executive Officer.
Quarterly Net Interest Income:
- Net interest income was $113.61 million compared to $109.34 million for the quarter ended June 30, 2022. The increase was driven by higher earning asset yields that were mostly offset by increased deposit costs.
- Tax-equivalent net interest margin (non-GAAP) was 3.01%, including purchase accounting accretion of 4 basis points, compared to 2.89%, including purchase accounting accretion of 3 basis points, for second quarter 2022.
- On an average basis, loans held for investment, with a yield of 5.00%, represented 73.24% of earning assets at June 30, 2023 compared to a yield of 3.99% and 66.91% of earning assets in the second quarter of 2022.
- Total cost of deposits increased to 1.46% from 0.16% for the quarter ended June 30, 2022. Interest expense on deposits increased $43.10 million, or 773.34%, over the prior year quarter driven, primarily, by the increase in rate.
- Higher mortgage rates, increased funding costs, and low home sale inventory, have adversely impacted our residential mortgage banking business.
- Average interest-earning assets totaled $15.31 billion at June 30, 2023 compared to $15.24 billion at June 30, 2022, an increase of 0.40%.
- Average interest-bearing liabilities totaled $9.68 billion, an increase of $0.92 billion, or 10.56% from prior year. Average short term FHLB borrowings were $802.75 million during the quarter.
Quarterly Provision for Credit Losses:
- The quarterly provision for credit losses was an expense of $3.56 million compared to $0.06 million one year ago and $11.67 million in the linked quarter.
- The allowance for credit losses on loans in second quarter 2023, compared to the linked quarter, increased $3.51 million. The increase in the allowance was driven by loan growth and changes in our portfolio composition, combined with changes to the macroeconomic forecast scenarios utilized in our models.
- Net loan charge-offs were $9 thousand in the quarter compared to net recoveries of $80 thousand in the prior year quarter and $3.87 million in the linked quarter. The ratio of net charge-offs to average loans on an annualized basis was zero percent in second quarter 2023 and 2022, and 0.14% in the linked quarter.
- The allowance for credit losses on loans represented 1.10% of total loans at June 30, 2023, 1.00% at June 30, 2022, and 1.07% at March 31, 2023. The allowance for credit losses on loans was 18.09 times nonperforming loans compared to 18.94 times at June 30, 2022 and 12.87 times at March 31, 2023.
Quarterly Noninterest Income:
- Total noninterest income was $67.96 million compared to $57.64 million in 2022, an increase of $10.32 million, or 17.90%, $8.83 million of which was attributable to the gross gain on the sale of BHHS Towne Realty.
- Residential mortgage banking income was $11.36 million compared to $13.18 million in second quarter 2022. Loan volume decreased to $616.50 million in second quarter 2023 from $837.81 million in 2022. The prolonged increase in mortgage rates has resulted in refinance activities dropping to 3.68% of total mortgage production volume, a historic low. Residential purchase activity comprised 96.32% of production volume in the second quarter of 2023 compared to 92.27% in the prior year quarter.
- Gross margins on residential mortgage sales increased 4 basis points from 2.92% in second quarter 2022 to 2.96% in the current quarter.
- Total net insurance commissions increased $2.75 million, or 13.94%, to $22.50 million in second quarter 2023 compared to 2022. This resulted from increases in property and casualty commissions, which were driven by organic growth and commissions from a recent acquisition.
- Property management fee revenue increased 27.99%, or $2.65 million, to $12.10 million in second quarter 2023 compared to 2022. Reservation income increased compared to the prior year due to higher rental inventories and income from a recent acquisition.
Quarterly Noninterest Expense:
- Total noninterest expense was $125.23 million compared to $108.73 million in 2022, an increase of $16.50 million, or 15.18%. Increases in salaries and employee benefits of $2.55 million, acquisition-related expenses of $2.95 million, FDIC and other insurance of $2.53 million, software expense of $1.41 million, and professional fees of $1.41 million were the primary sources of the increase.
- Salaries and benefits expense increases were driven by annual base salary adjustments that went into effect July 2022 and an increase in the year-over-year number of employees, primarily related to the Farmers Bankshares, Inc. acquisition.
- FDIC and other insurance increased due to a combination of timing and increased assessments in 2023.
- Software and professional fee expenses increased due to a number of ongoing projects related to recent acquisitions and our loan portfolio.
Consolidated Balance Sheet Highlights:
- Total assets were $17.23 billion for the quarter ended June 30, 2023, a $494.60 million increase compared to $16.73 billion at March 31, 2023. Total assets increased $361.04 million, or 2.14%, from $16.86 billion at June 30, 2022.
- Loans held for investment increased $0.78 billion, or 7.50%, compared to prior year and $34.23 million, or 0.31%, compared to the linked quarter, 1.23% on an annualized basis. Excluding loans acquired in the prior quarter, total loans would have increased $0.50 billion, or 4.84%, compared to prior year.
- Mortgage loans held for sale increased $17.79 million, or 8.40%, compared to prior year and $72.34 million, or 46.03%, compared to the linked quarter.
- Excluding $514.57 million in acquired deposits, total deposits would have decreased $744.02 million, or 5.32%, compared to second quarter 2022. In the linked quarter comparison, total deposits increased $168.53 million, or 4.97%, on an annualized basis.
- Total borrowings increased $459.58 million, or 76.59%, over second quarter 2022 and $253.33 million, or 31.42%, compared to the linked quarter. FHLB advances, which are included in total borrowings, increased $249.82 million in the quarter.
Investment Securities:
- Total investment securities were $2.61 billion compared to $2.67 billion at March 31, 2023 and $2.48 billion at June 30, 2022. The weighted average duration of the portfolio at June 30, 2023 was 3.4 years. The carrying value of the available for sale debt securities portfolio included net unrealized losses of $195.98 million at June 30, 2023, compared to $165.71 million at March 31, 2023 and $120.41 million at June 30, 2022, related to market valuation adjustments due to rising interest rates.
Loans and Asset Quality:
- Total loans held for investment were $11.21 billion at June 30, 2023 compared to $11.17 billion at March 31, 2023 and $10.43 billion at June 30, 2022.
- Nonperforming assets were $9.35 million, or 0.05% of total assets, compared to $6.06 million, or 0.04%, at June 30, 2022.
- Nonperforming loans were 0.06% of period end loans compared to 0.05% at June 30, 2022.
- Other real estate owned increased to $2.52 million from $0.56 million at June 30, 2022, $1.78 million of which is former bank premises acquired in the Farmers transaction.
Deposits and Borrowings:
- Total deposits were $13.77 billion compared to $13.60 billion at March 31, 2023 and $14.00 billion at June 30, 2022.
- Total loans held for investment to deposits was 81.41% compared to 82.17% at March 31, 2023 and 74.49% at June 30, 2022.
- Noninterest-bearing deposits were 34.68% of total deposits at June 30, 2023 compared to 37.28% at March 31, 2023 and 40.89% at June 30, 2022.
- Total borrowings were $1.06 billion compared to $0.81 billion at March 31, 2023 and $0.60 billion at June 30, 2022.
Capital:
- Common equity tier 1 capital ratio of 11.99%.
- Tier 1 leverage capital ratio of 9.85%.
- Tier 1 risk-based capital ratio of 12.11%.
- Total risk-based capital ratio of 14.88%.
- Book value per common share was $26.36 compared to $26.40 at March 31, 2023 and $25.48 at June 30, 2022.
- Tangible book value per common share (non-GAAP) was $19.31 compared to $19.04 at March 31, 2023 and $18.58 at June 30, 2022.
BHHS Towne Realty
Effective April 27, 2023, the Company transferred its ownership interest in BHHS Towne Realty, which was formerly a subsidiary of TowneBank to BHHS RW Towne Realty, LLC, in exchange for a minority interest in that company.
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.
TowneBank operates over 45 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 $17.23 billion as of June 30, 2023, 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 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; changes in the creditworthiness of customers and the possible impairment of the collectability of loans; 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; unusual and infrequently occurring events, such as weather-related or natural disasters, acts of war or terrorism, or public health events (such as the COVID-19 pandemic); 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, 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, 2022 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, 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, | |||||||||||||||
| 2023 | 2023 | 2022 | 2022 | 2022 | |||||||||||||||
| Income and Performance Ratios: | |||||||||||||||||||
| Total revenue | $ | 181,568 | $ | 184,144 | $ | 175,307 | $ | 179,236 | $ | 166,980 | |||||||||
| Net income | 43,368 | 38,478 | 46,494 | 50,671 | 47,054 | ||||||||||||||
| Net income available to common shareholders | 41,716 | 38,333 | 46,685 | 50,169 | 46,547 | ||||||||||||||
| Pre-provision, pre-tax, net revenues(non-GAAP)(1) | 45,855 | 59,602 | 64,357 | 66,700 | 57,748 | ||||||||||||||
| Net income per common share - diluted | 0.56 | 0.52 | 0.64 | 0.69 | 0.64 | ||||||||||||||
| Book value per common share | 26.36 | 26.40 | 25.73 | 25.08 | 25.48 | ||||||||||||||
| Book value per common share - tangible(non-GAAP) | 19.31 | 19.04 | 18.84 | 18.17 | 18.58 | ||||||||||||||
| Return on average assets | 0.99 | % | 0.95 | % | 1.16 | % | 1.22 | % | 1.13 | % | |||||||||
| Return on average assets - tangible(non-GAAP) | 1.10 | % | 1.05 | % | 1.25 | % | 1.31 | % | 1.22 | % | |||||||||
| Return on average equity | 8.46 | % | 7.99 | % | 9.98 | % | 10.60 | % | 9.94 | % | |||||||||
| Return on average equity - tangible(non-GAAP) | 12.35 | % | 11.71 | % | 14.26 | % | 15.08 | % | 14.20 | % | |||||||||
| Return on average common equity | 8.52 | % | 8.05 | % | 10.07 | % | 10.69 | % | 10.03 | % | |||||||||
| Return on average common equity - tangible(non-GAAP) | 12.48 | % | 11.83 | % | 14.44 | % | 15.27 | % | 14.37 | % | |||||||||
| Noninterest income as a percentage of total revenue | 37.43 | % | 33.00 | % | 26.54 | % | 30.80 | % | 34.52 | % | |||||||||
| Regulatory Capital Ratios (1): | |||||||||||||||||||
| Common equity tier 1 | 11.99 | % | 11.68 | % | 11.92 | % | 11.92 | % | 11.83 | % | |||||||||
| Tier 1 | 12.11 | % | 11.80 | % | 12.04 | % | 12.05 | % | 11.97 | % | |||||||||
| Total | 14.88 | % | 14.55 | % | 14.80 | % | 14.80 | % | 16.76 | % | |||||||||
| Tier 1 leverage ratio | 9.85 | % | 9.86 | % | 9.87 | % | 9.52 | % | 9.19 | % | |||||||||
| Asset Quality: | |||||||||||||||||||
| Allowance for credit losses on loans to nonperforming loans | 18.09x | 12.87x | 17.67x | 20.48x | 18.94x | ||||||||||||||
| Allowance for credit losses on loans to period end loans | 1.10 | % | 1.07 | % | 1.03 | % | 1.02 | % | 1.00 | % | |||||||||
| Nonperforming loans to period end loans | 0.06 | % | 0.08 | % | 0.06 | % | 0.05 | % | 0.05 | % | |||||||||
| Nonperforming assets to period end assets | 0.05 | % | 0.06 | % | 0.04 | % | 0.03 | % | 0.04 | % | |||||||||
| Net charge-offs (recoveries) to average loans (annualized) | - | % | 0.14 | % | 0.11 | % | (0.01 | )% | - | % | |||||||||
| Net charge-offs (recoveries) | $ | 9 | $ | 3,874 | $ | 2,904 | $ | (187 | ) | $ | (80 | ) | |||||||
| Nonperforming loans | $ | 6,827 | $ | 9,322 | $ | 6,273 | $ | 5,250 | $ | 5,493 | |||||||||
| Former bank premises | 1,782 | - | - | - | - | ||||||||||||||
| Foreclosed property | 738 | 564 | 560 | 186 | 563 | ||||||||||||||
| Total nonperforming assets | $ | 9,347 | $ | 9,886 | $ | 6,833 | $ | 5,436 | $ | 6,056 | |||||||||
| Loans past due 90 days and still accruing interest | $ | 360 | $ | 206 | $ | 324 | $ | 725 | $ | 232 | |||||||||
| Allowance for credit losses on loans | $ | 123,513 | $ | 120,002 | $ | 110,816 | $ | 107,497 | $ | 104,019 | |||||||||
| Mortgage Banking: | |||||||||||||||||||
| Loans originated, mortgage | $ | 409,050 | $ | 280,401 | $ | 299,298 | $ | 458,254 | $ | 588,529 | |||||||||
| Loans originated, joint venture | 207,450 | 135,818 | 157,511 | 234,443 | 249,279 | ||||||||||||||
| Total loans originated | $ | 616,500 | $ | 416,219 | $ | 456,809 | $ | 692,697 | $ | 837,808 | |||||||||
| Number of loans originated | 1,715 | 1,249 | 1,355 | 1,983 | 2,282 | ||||||||||||||
| Number of originators | 196 | 194 | 186 | 194 | 201 | ||||||||||||||
| Purchase % | 96.32 | % | 94.99 | % | 95.08 | % | 93.20 | % | 92.27 | % | |||||||||
| Loans sold | $ | 525,078 | $ | 346,288 | $ | 483,254 | $ | 701,908 | $ | 759,073 | |||||||||
| Rate lock asset | $ | 1,551 | $ | 1,435 | $ | 482 | $ | 859 | $ | 1,935 | |||||||||
| Gross realized gain on sales and fees as a % of loans originated | 2.96 | % | 3.11 | % | 2.93 | % | 3.02 | % | 2.92 | % | |||||||||
| Other Ratios: | |||||||||||||||||||
| Net interest margin | 2.98 | % | 3.36 | % | 3.51 | % | 3.28 | % | 2.88 | % | |||||||||
| Net interest margin-fully tax equivalent(non-GAAP) | 3.01 | % | 3.39 | % | 3.53 | % | 3.31 | % | 2.89 | % | |||||||||
| Average earning assets/total average assets | 90.96 | % | 90.98 | % | 91.51 | % | 91.92 | % | 92.22 | % | |||||||||
| Average loans/average deposits | 83.72 | % | 82.40 | % | 80.14 | % | 76.82 | % | 74.57 | % | |||||||||
| Average noninterest deposits/total average deposits | 36.07 | % | 38.35 | % | 41.07 | % | 41.77 | % | 40.56 | % | |||||||||
| Period end equity/period end total assets | 11.56 | % | 11.89 | % | 11.92 | % | 11.56 | % | 11.09 | % | |||||||||
| Efficiency ratio(non-GAAP) | 70.41 | % | 65.64 | % | 61.99 | % | 61.03 | % | 63.51 | % | |||||||||
| (1) Current reporting period regulatory capital ratios are preliminary. | |||||||||||||||||||
| TOWNEBANK | |||||||||||||||||
| Selected Data (unaudited) | |||||||||||||||||
| (dollars in thousands) | |||||||||||||||||
| Investment Securities | % Change | ||||||||||||||||
| Q2 | Q2 | Q1 | Q2 23 vs. | Q2 23 vs. | |||||||||||||
| Available-for-sale securities, at fair value | 2023 | 2022 | 2023 | Q2 22 | Q1 23 | ||||||||||||
| U.S. agency securities | $ | 318,354 | $ | 342,702 | $ | 334,211 | (7.10 | )% | (4.74 | )% | |||||||
| U.S. Treasury notes | 26,874 | 27,496 | 27,272 | (2.26 | )% | (1.46 | )% | ||||||||||
| Municipal securities | 503,792 | 447,927 | 508,439 | 12.47 | % | (0.91 | )% | ||||||||||
| Trust preferred and other corporate securities | 71,116 | 84,307 | 76,965 | (15.65 | )% | (7.60 | )% | ||||||||||
| Mortgage-backed securities issued by GSE | 1,086,947 | 1,012,690 | 1,132,746 | 7.33 | % | (4.04 | )% | ||||||||||
| Allowance for credit losses | (1,232 | ) | (1,111 | ) | (1,150 | ) | 10.89 | % | 7.13 | % | |||||||
| Total | $ | 2,005,851 | $ | 1,914,011 | $ | 2,078,483 | 4.80 | % | (3.49 | )% | |||||||
| Gross unrealized gains (losses) reflected in financial statements | |||||||||||||||||
| Total gross unrealized gains | $ | 975 | $ | 1,840 | $ | 2,218 | (47.01 | )% | (56.04 | )% | |||||||
| Total gross unrealized losses | (196,954 | ) | (122,253 | ) | (167,929 | ) | 61.10 | % | 17.28 | % | |||||||
| Net unrealized gains (losses) and other adjustments on AFS securities | $ | (195,979 | ) | $ | (120,413 | ) | $ | (165,711 | ) | 62.76 | % | 18.27 | % | ||||
| Held-to-maturity securities, at amortized cost | |||||||||||||||||
| U.S. agency securities | $ | 101,469 | $ | 100,718 | $ | 101,281 | 0.75 | % | 0.19 | % | |||||||
| U.S. Treasury notes | 433,298 | 434,432 | 433,584 | (0.26 | )% | (0.07 | )% | ||||||||||
| Municipal securities | 5,226 | 5,138 | 5,203 | 1.71 | % | 0.44 | % | ||||||||||
| Trust preferred corporate securities | 2,198 | 2,248 | 2,210 | (2.22 | )% | (0.54 | )% | ||||||||||
| Mortgage-backed securities issued by GSE | 5,826 | 6,547 | 5,948 | (11.01 | )% | (2.05 | )% | ||||||||||
| Allowance for credit losses | (87 | ) | (85 | ) | (88 | ) | 2.35 | % | (1.14 | )% | |||||||
| Total | $ | 547,930 | $ | 548,998 | $ | 548,138 | (0.19 | )% | (0.04 | )% | |||||||
| Total gross unrealized gains | $ | 272 | $ | 448 | $ | 392 | (39.29 | )% | (30.61 | )% | |||||||
| Total gross unrealized losses | (25,914 | ) | (18,615 | ) | (24,018 | ) | 39.21 | % | 7.89 | % | |||||||
| Net unrealized gains (losses) in HTM securities | $ | (25,642 | ) | $ | (18,167 | ) | $ | (23,626 | ) | 41.15 | % | 8.53 | % | ||||
| Total unrealized (losses) gains on AFS and HTM securities | $ | (221,621 | ) | $ | (138,580 | ) | $ | (189,337 | ) | 59.92 | % | 17.05 | % | ||||
| % Change | |||||||||||||||||
| Loans Held For Investment | Q2 | Q2 | Q1 | Q2 23 vs. | Q2 23 vs. | ||||||||||||
| 2023 | 2022 | 2023 | Q2 22 | Q1 23 | |||||||||||||
| Real estate - construction and development | $ | 1,364,575 | $ | 1,383,791 | $ | 1,473,034 | (1.39 | )% | (7.36 | )% | |||||||
| Commercial real estate - owner occupied | 1,687,261 | 1,579,464 | 1,675,119 | 6.82 | % | 0.72 | % | ||||||||||
| Commercial real estate - non owner occupied | 3,034,548 | 2,757,651 | 2,908,791 | 10.04 | % | 4.32 | % | ||||||||||
| Real estate - multifamily | 520,464 | 371,658 | 505,237 | 40.04 | % | 3.01 | % | ||||||||||
| Residential 1-4 family | 1,790,225 | 1,513,662 | 1,734,698 | 18.27 | % | 3.20 | % | ||||||||||
| HELOC | 380,501 | 386,067 | 387,967 | (1.44 | )% | (1.92 | )% | ||||||||||
| Commercial and industrial business (C&I) | 1,259,282 | 1,261,279 | 1,297,707 | (0.16 | )% | (2.96 | )% | ||||||||||
| Government | 520,994 | 527,230 | 510,494 | (1.18 | )% | 2.06 | % | ||||||||||
| Indirect | 562,161 | 555,638 | 582,306 | 1.17 | % | (3.46 | )% | ||||||||||
| Consumer loans and other | 88,003 | 89,320 | 98,432 | (1.47 | )% | (10.60 | )% | ||||||||||
| Total | $ | 11,208,014 | $ | 10,425,760 | $ | 11,173,785 | 7.50 | % | 0.31 | % | |||||||
| % Change | |||||||||||||||||
| Deposits | Q2 | Q2 | Q1 | Q2 23 vs. | Q2 23 vs. | ||||||||||||
| 2023 | 2022 | 2023 | Q2 22 | Q1 23 | |||||||||||||
| Noninterest-bearing demand | $ | 4,774,830 | $ | 5,723,415 | $ | 5,069,363 | (16.57 | )% | (5.81 | )% | |||||||
| Interest-bearing: | |||||||||||||||||
| Demand and money market accounts | 6,529,336 | 6,384,818 | 6,284,184 | 2.26 | % | 3.90 | % | ||||||||||
| Savings | 361,891 | 388,364 | 389,173 | (6.82 | )% | (7.01 | )% | ||||||||||
| Certificates of deposits | 2,100,604 | 1,499,514 | 1,855,411 | 40.09 | % | 13.22 | % | ||||||||||
| Total | 13,766,661 | 13,996,111 | 13,598,131 | (1.64 | )% | 1.24 | % | ||||||||||
| TOWNEBANK | ||||||||||||||||||||||||||||||||
| Average Balances, Yields and Rate Paid (unaudited) | ||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||
| Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||||||
| June 30, 2023 | March 31, 2023 | June 30, 2022 | ||||||||||||||||||||||||||||||
| 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) | $ | 11,209,641 | $ | 139,814 | 5.00 | % | $ | 11,097,626 | $ | 133,536 | 4.88 | % | $ | 10,199,019 | $ | 101,463 | 3.99 | % | ||||||||||||||
| Taxable investment securities | 2,450,393 | 17,195 | 2.81 | % | 2,438,489 | 16,816 | 2.76 | % | 2,331,410 | 11,388 | 1.95 | % | ||||||||||||||||||||
| Tax-exempt investment securities | 209,728 | 2,003 | 3.82 | % | 188,033 | 1,887 | 4.01 | % | 132,304 | 1,059 | 3.20 | % | ||||||||||||||||||||
| Total securities | 2,660,121 | 19,198 | 2.89 | % | 2,626,522 | 18,703 | 2.85 | % | 2,463,714 | 12,447 | 2.02 | % | ||||||||||||||||||||
| Interest-bearing deposits | 1,262,692 | 14,488 | 4.60 | % | 1,044,538 | 10,649 | 4.13 | % | 2,368,147 | 4,616 | 0.78 | % | ||||||||||||||||||||
| Loans held for sale | 172,679 | 2,547 | 5.90 | % | 105,018 | 1,604 | 6.11 | % | 213,109 | 2,217 | 4.16 | % | ||||||||||||||||||||
| Total earning assets | 15,305,133 | 176,047 | 4.61 | % | 14,873,704 | 164,492 | 4.49 | % | 15,243,989 | 120,743 | 3.18 | % | ||||||||||||||||||||
| Less: allowance for credit losses | (121,140 | ) | (114,447 | ) | (103,871 | ) | ||||||||||||||||||||||||||
| Total nonearning assets | 1,642,972 | 1,589,783 | 1,389,692 | |||||||||||||||||||||||||||||
| Total assets | $ | 16,826,965 | $ | 16,349,040 | $ | 16,529,810 | ||||||||||||||||||||||||||
| Liabilities and Equity: | ||||||||||||||||||||||||||||||||
| Interest-bearing deposits | ||||||||||||||||||||||||||||||||
| Demand and money market | $ | 6,220,394 | $ | 32,058 | 2.07 | % | $ | 6,217,754 | $ | 23,302 | 1.52 | % | $ | 6,349,725 | $ | 3,094 | 0.20 | % | ||||||||||||||
| Savings | 371,455 | 895 | 0.97 | % | 401,776 | 844 | 0.85 | % | 387,498 | 526 | 0.54 | % | ||||||||||||||||||||
| Certificates of deposit | 1,968,623 | 15,718 | 3.20 | % | 1,683,354 | 9,788 | 2.36 | % | 1,392,474 | 1,953 | 0.56 | % | ||||||||||||||||||||
| Total interest-bearing deposits | 8,560,472 | 48,671 | 2.28 | % | 8,302,884 | 33,934 | 1.66 | % | 8,129,697 | 5,573 | 0.27 | % | ||||||||||||||||||||
| Borrowings | 863,255 | 10,345 | 4.74 | % | 355,833 | 3,915 | 4.40 | % | 128,276 | 135 | 0.42 | % | ||||||||||||||||||||
| Subordinated debt, net | 255,264 | 2,236 | 3.50 | % | 250,066 | 2,169 | 3.47 | % | 496,862 | 5,091 | 4.10 | % | ||||||||||||||||||||
| Total interest-bearing liabilities | 9,678,991 | 61,252 | 2.54 | % | 8,908,783 | 40,018 | 1.82 | % | 8,754,835 | 10,799 | 0.49 | % | ||||||||||||||||||||
| Demand deposits | 4,829,395 | 5,164,415 | 5,547,936 | |||||||||||||||||||||||||||||
| Other noninterest-bearing liabilities | 339,966 | 329,840 | 348,678 | |||||||||||||||||||||||||||||
| Total liabilities | 14,848,352 | 14,403,038 | 14,651,449 | |||||||||||||||||||||||||||||
| Shareholders' equity | 1,978,613 | 1,946,002 | 1,878,361 | |||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 16,826,965 | $ | 16,349,040 | $ | 16,529,810 | ||||||||||||||||||||||||||
| Net interest income (tax-equivalent basis) (4) | $ | 114,795 | $ | 124,474 | $ | 109,944 | ||||||||||||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures | ||||||||||||||||||||||||||||||||
| Tax-equivalent basis adjustment | (1,184 | ) | (1,096 | ) | (604 | ) | ||||||||||||||||||||||||||
| Net interest income (GAAP) | $ | 113,611 | $ | 123,378 | $ | 109,340 | ||||||||||||||||||||||||||
| Interest rate spread (2)(4) | 2.07 | % | 2.67 | % | 2.69 | % | ||||||||||||||||||||||||||
| Interest expense as a percent of average earning assets | 1.61 | % | 1.09 | % | 0.28 | % | ||||||||||||||||||||||||||
| Net interest margin (tax equivalent basis) (3)(4) | 3.01 | % | 3.39 | % | 2.89 | % | ||||||||||||||||||||||||||
| Total cost of deposits | 1.46 | % | 1.02 | % | 0.16 | % | ||||||||||||||||||||||||||
(1) Yields and interest income are presented on a taxable-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, 2023 | June 30, 2022 | ||||||||||||||||||||
| 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) | $ | 11,153,944 | $ | 273,349 | 4.94 | % | $ | 9,935,337 | $ | 197,059 | 4.00 | % | |||||||||
| Taxable investment securities | 2,444,474 | 34,011 | 2.78 | % | 2,196,263 | 20,401 | 1.86 | % | |||||||||||||
| Tax-exempt investment securities | 198,940 | 3,891 | 3.91 | % | 121,561 | 1,836 | 3.02 | % | |||||||||||||
| Total securities | 2,643,414 | 37,902 | 2.87 | % | 2,317,824 | 22,237 | 1.92 | % | |||||||||||||
| Interest-bearing deposits | 1,154,218 | 25,137 | 4.39 | % | 2,647,485 | 5,963 | 0.45 | % | |||||||||||||
| Loans held for sale | 139,035 | 4,151 | 5.97 | % | 244,604 | 4,592 | 3.75 | % | |||||||||||||
| Total earning assets | 15,090,611 | 340,539 | 4.55 | % | 15,145,250 | 229,851 | 3.06 | % | |||||||||||||
| Less: allowance for credit losses | (117,812 | ) | (105,015 | ) | |||||||||||||||||
| Total nonearning assets | 1,616,524 | 1,381,271 | |||||||||||||||||||
| Total assets | $ | 16,589,323 | $ | 16,421,506 | |||||||||||||||||
| Liabilities and Equity: | |||||||||||||||||||||
| Interest-bearing deposits | |||||||||||||||||||||
| Demand and money market | $ | 6,219,081 | $ | 55,360 | 1.80 | % | $ | 6,264,444 | $ | 5,355 | 0.17 | % | |||||||||
| Savings | 386,532 | 1,739 | 0.91 | % | 385,182 | 1,037 | 0.54 | % | |||||||||||||
| Certificates of deposit | 1,826,777 | 25,506 | 2.82 | % | 1,432,486 | 4,074 | 0.57 | % | |||||||||||||
| Total interest-bearing deposits | 8,432,390 | 82,605 | 1.98 | % | 8,082,112 | 10,466 | 0.26 | % | |||||||||||||
| Borrowings | 610,946 | 14,261 | 4.64 | % | 132,004 | 272 | 0.41 | % | |||||||||||||
| Subordinated debt, net | 252,679 | 4,405 | 3.49 | % | 442,202 | 9,212 | 4.17 | % | |||||||||||||
| Total interest-bearing liabilities | 9,296,015 | 101,271 | 2.20 | % | 8,656,318 | 19,950 | 0.46 | % | |||||||||||||
| Demand deposits | 4,995,980 | 5,507,768 | |||||||||||||||||||
| Other noninterest-bearing liabilities | 334,930 | 368,166 | |||||||||||||||||||
| Total liabilities | 14,626,925 | 14,532,252 | |||||||||||||||||||
| Shareholders' equity | 1,962,398 | 1,889,254 | |||||||||||||||||||
| Total liabilities and equity | $ | 16,589,323 | $ | 16,421,506 | |||||||||||||||||
| Net interest income (tax-equivalent basis)(4) | $ | 239,268 | $ | 209,901 | |||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures | |||||||||||||||||||||
| Tax-equivalent basis adjustment | (2,280 | ) | (1,357 | ) | |||||||||||||||||
| Net interest income (GAAP) | $ | 236,988 | $ | 208,544 | |||||||||||||||||
| Interest rate spread (2)(4) | 2.35 | % | 2.60 | % | |||||||||||||||||
| Interest expense as a percent of average earning assets | 1.35 | % | 0.28 | % | |||||||||||||||||
| Net interest margin (tax equivalent basis) (3)(4) | 3.20 | % | 2.79 | % | |||||||||||||||||
| Total cost of deposits | 1.24 | % | 0.16 | % | |||||||||||||||||
(1) Yields and interest income are presented on a taxable-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, | ||||||
| 2023 | 2022 | ||||||
| (unaudited) | (audited) | ||||||
| ASSETS | |||||||
| Cash and due from banks | $ | 106,994 | $ | 55,381 | |||
| Interest-bearing deposits at FRB - Richmond | 1,427,044 | 1,000,205 | |||||
| Federal funds sold and interest-bearing deposits in financial institutions | 102,231 | 97,244 | |||||
| Total Cash and Cash Equivalents | 1,636,269 | 1,152,830 | |||||
| Securities available for sale, at fair value (amortized cost of $2,203,062 and $2,033,040, and allowance for credit losses of $1,232 and $1,086 at June 30, 2023 and December 31, 2022, respectively) | 2,005,851 | 1,840,902 | |||||
| Securities held to maturity, at amortized cost (fair value $522,375 and $518,993 at June 30, 2023 and December 31, 2022, respectively) | 548,017 | 548,475 | |||||
| Less: allowance for credit losses | (87 | ) | (83 | ) | |||
| Securities held to maturity, net of allowance for credit losses | 547,930 | 548,392 | |||||
| Other equity securities | 13,798 | 6,424 | |||||
| FHLB stock | 40,454 | 9,617 | |||||
| Total Securities | 2,608,033 | 2,405,335 | |||||
| Mortgage loans held for sale | 229,502 | 102,339 | |||||
| Loans, net of unearned income and deferred costs | 11,208,014 | 10,794,602 | |||||
| Less: allowance for credit losses | (123,513 | ) | (110,816 | ) | |||
| Net Loans | 11,084,501 | 10,683,786 | |||||
| Premises and equipment, net | 326,686 | 304,802 | |||||
| Goodwill | 456,695 | 458,482 | |||||
| Other intangible assets, net | 71,106 | 43,163 | |||||
| BOLI | 273,435 | 258,069 | |||||
| Other assets | 538,848 | 436,461 | |||||
| TOTAL ASSETS | $ | 17,225,075 | $ | 15,845,267 | |||
| LIABILITIES AND EQUITY | |||||||
| Deposits: | |||||||
| Noninterest-bearing demand | $ | 4,774,830 | $ | 5,265,186 | |||
| Interest-bearing: | |||||||
| Demand and money market accounts | 6,529,336 | 6,185,075 | |||||
| Savings | 361,891 | 374,987 | |||||
| Certificates of deposit | 2,100,604 | 1,468,975 | |||||
| Total Deposits | 13,766,661 | 13,294,223 | |||||
| Advances from the FHLB | 754,319 | 29,674 | |||||
| Subordinated debt, net | 255,365 | 247,420 | |||||
| Repurchase agreements and other borrowings | 49,898 | 40,918 | |||||
| Total Borrowings | 1,059,582 | 318,012 | |||||
| Other liabilities | 408,333 | 344,275 | |||||
| TOTAL LIABILITIES | 15,234,576 | 13,956,510 | |||||
| Preferred stock, authorized and unissued shares - 2,000,000 | - | - | |||||
| Common stock, $1.667 par value: 150,000,000 shares authorized | |||||||
| 74,878,243 and 72,841,379 shares issued at | |||||||
| June 30, 2023 and December 31, 2022, respectively | 124,805 | 121,426 | |||||
| Capital surplus | 1,109,526 | 1,052,262 | |||||
| Retained earnings | 884,901 | 840,777 | |||||
| Common stock issued to deferred compensation trust, at cost | |||||||
| 977,334 and 931,030 shares at June 30, 2023 and December 31, 2022, respectively | (20,134 | ) | (18,974 | ) | |||
| Deferred compensation trust | 20,134 | 18,974 | |||||
| Accumulated other comprehensive income (loss) | (145,392 | ) | (140,505 | ) | |||
| TOTAL SHAREHOLDERS' EQUITY | 1,973,840 | 1,873,960 | |||||
| Noncontrolling interest | 16,659 | 14,797 | |||||
| TOTAL EQUITY | 1,990,499 | 1,888,757 | |||||
| TOTAL LIABILITIES AND EQUITY | $ | 17,225,075 | $ | 15,845,267 | |||
| TOWNEBANK | |||||||||||||||
| Consolidated Statements of Income (unaudited) | |||||||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||
| June 30, | June 30, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| INTEREST INCOME: | |||||||||||||||
| Loans, including fees | $ | 138,977 | $ | 101,043 | $ | 271,745 | $ | 196,005 | |||||||
| Investment securities | 18,851 | 12,263 | 37,226 | 21,934 | |||||||||||
| Interest-bearing deposits in financial institutions and federal funds sold | 14,488 | 4,616 | 25,137 | 5,963 | |||||||||||
| Mortgage loans held for sale | 2,547 | 2,217 | 4,151 | 4,592 | |||||||||||
| Total interest income | 174,863 | 120,139 | 338,259 | 228,494 | |||||||||||
| INTEREST EXPENSE: | |||||||||||||||
| Deposits | 48,671 | 5,573 | 82,605 | 10,467 | |||||||||||
| Advances from the FHLB | 10,407 | 86 | 13,399 | 178 | |||||||||||
| Subordinated debt, net | 2,236 | 5,091 | 4,405 | 9,211 | |||||||||||
| Repurchase agreements and other borrowings | (62 | ) | 49 | 862 | 94 | ||||||||||
| Total interest expense | 61,252 | 10,799 | 101,271 | 19,950 | |||||||||||
| Net interest income | 113,611 | 109,340 | 236,988 | 208,544 | |||||||||||
| PROVISION FOR CREDIT LOSSES | 3,556 | 56 | 15,225 | (1,393 | ) | ||||||||||
| Net interest income after provision for credit losses | 110,055 | 109,284 | 221,763 | 209,937 | |||||||||||
| NONINTEREST INCOME: | |||||||||||||||
| Residential mortgage banking income, net | 11,360 | 13,176 | 20,732 | 27,814 | |||||||||||
| Insurance commissions and other title fees and income, net | 22,498 | 19,746 | 45,321 | 38,820 | |||||||||||
| Property management income, net | 12,098 | 9,452 | 27,633 | 26,599 | |||||||||||
| Real estate brokerage income, net | 1,834 | 3,412 | 3,625 | 5,966 | |||||||||||
| Service charges on deposit accounts | 3,018 | 2,446 | 5,870 | 5,020 | |||||||||||
| Credit card merchant fees, net | 1,682 | 1,906 | 3,226 | 3,281 | |||||||||||
| BOLI | 1,710 | 1,853 | 3,383 | 3,570 | |||||||||||
| Other income | 13,757 | 5,649 | 18,933 | 12,778 | |||||||||||
| Total noninterest income | 67,957 | 57,640 | 128,723 | 123,848 | |||||||||||
| NONINTEREST EXPENSE: | |||||||||||||||
| Salaries and employee benefits | 67,445 | 64,892 | 136,866 | 128,855 | |||||||||||
| Occupancy | 9,487 | 8,342 | 18,552 | 16,669 | |||||||||||
| Furniture and equipment | 4,389 | 3,643 | 8,633 | 7,333 | |||||||||||
| Amortization - intangibles | 3,610 | 2,684 | 7,134 | 5,501 | |||||||||||
| Software expense | 6,169 | 4,762 | 11,792 | 9,254 | |||||||||||
| Data processing | 4,011 | 3,556 | 7,364 | 7,150 | |||||||||||
| Professional fees | 3,166 | 1,761 | 6,178 | 3,788 | |||||||||||
| Advertising and marketing | 3,959 | 4,091 | 8,360 | 8,218 | |||||||||||
| Other expenses | 22,992 | 14,994 | 44,747 | 31,336 | |||||||||||
| Total noninterest expense | 125,228 | 108,725 | 249,626 | 218,104 | |||||||||||
| Income before income tax expense and noncontrolling interest | 52,784 | 58,199 | 100,860 | 115,681 | |||||||||||
| Provision for income tax expense | 9,416 | 11,145 | 19,014 | 22,377 | |||||||||||
| Net income | $ | 43,368 | $ | 47,054 | $ | 81,846 | $ | 93,304 | |||||||
| Net income attributable to noncontrolling interest | (1,652 | ) | (507 | ) | (1,797 | ) | (1,171 | ) | |||||||
| Net income attributable to TowneBank | $ | 41,716 | $ | 46,547 | $ | 80,049 | $ | 92,133 | |||||||
| Per common share information | |||||||||||||||
| Basic earnings | $ | 0.56 | $ | 0.64 | $ | 1.07 | $ | 1.27 | |||||||
| Diluted earnings | $ | 0.56 | $ | 0.64 | $ | 1.07 | $ | 1.27 | |||||||
| Cash dividends declared | $ | 0.25 | $ | 0.23 | $ | 0.48 | $ | 0.43 | |||||||
| TOWNEBANK | |||||||||||||||||||
| Consolidated Balance Sheets - Five Quarter Trend | |||||||||||||||||||
| (dollars in thousands, except share data) | |||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||||
| 2023 | 2023 | 2022 | 2022 | 2022 | |||||||||||||||
| (unaudited) | (unaudited) | (audited) | (unaudited) | (unaudited) | |||||||||||||||
| ASSETS | |||||||||||||||||||
| Cash and due from banks | $ | 106,994 | $ | 97,502 | $ | 55,381 | $ | 97,290 | $ | 72,592 | |||||||||
| Interest-bearing deposits at FRB - Richmond | 1,427,044 | 1,040,112 | 1,000,205 | 1,245,067 | 2,341,942 | ||||||||||||||
| Federal funds sold and interest-bearing deposits in financial institutions | 102,231 | 104,924 | 97,244 | 96,862 | 35,087 | ||||||||||||||
| Total Cash and Cash Equivalents | 1,636,269 | 1,242,538 | 1,152,830 | 1,439,219 | 2,449,621 | ||||||||||||||
| Securities available for sale | 2,005,851 | 2,078,483 | 1,840,902 | 1,890,136 | 1,914,011 | ||||||||||||||
| Securities held to maturity | 548,017 | 548,226 | 548,475 | 548,745 | 549,083 | ||||||||||||||
| Less: allowance for credit losses | (87 | ) | (88 | ) | (83 | ) | (83 | ) | (85 | ) | |||||||||
| Securities held to maturity, net of allowance for credit losses | 547,930 | 548,138 | 548,392 | 548,662 | 548,998 | ||||||||||||||
| Other equity securities | 13,798 | 13,341 | 6,424 | 6,360 | 6,679 | ||||||||||||||
| FHLB stock | 40,454 | 29,837 | 9,617 | 9,475 | 10,432 | ||||||||||||||
| Total Securities | 2,608,033 | 2,669,799 | 2,405,335 | 2,454,633 | 2,480,120 | ||||||||||||||
| Mortgage loans held for sale | 229,502 | 157,161 | 102,339 | 165,023 | 211,716 | ||||||||||||||
| Loans, net of unearned income and deferred costs | 11,208,014 | 11,173,785 | 10,794,602 | 10,559,611 | 10,425,760 | ||||||||||||||
| Less: allowance for credit losses | (123,513 | ) | (120,002 | ) | (110,816 | ) | (107,497 | ) | (104,019 | ) | |||||||||
| Net Loans | 11,084,501 | 11,053,783 | 10,683,786 | 10,452,114 | 10,321,741 | ||||||||||||||
| Premises and equipment, net | 326,686 | 321,944 | 304,802 | 295,345 | 289,753 | ||||||||||||||
| Goodwill | 456,695 | 477,234 | 458,482 | 458,482 | 457,162 | ||||||||||||||
| Other intangible assets, net | 71,106 | 73,238 | 43,163 | 44,854 | 44,878 | ||||||||||||||
| BOLI | 273,435 | 271,704 | 258,069 | 256,074 | 254,478 | ||||||||||||||
| Other assets | 538,848 | 463,076 | 436,461 | 386,053 | 354,570 | ||||||||||||||
| TOTAL ASSETS | $ | 17,225,075 | $ | 16,730,477 | $ | 15,845,267 | $ | 15,951,797 | $ | 16,864,039 | |||||||||
| LIABILITIES AND EQUITY | |||||||||||||||||||
| Deposits: | |||||||||||||||||||
| Noninterest-bearing demand | $ | 4,774,830 | $ | 5,069,363 | $ | 5,265,186 | $ | 5,574,528 | $ | 5,723,415 | |||||||||
| Interest-bearing: | |||||||||||||||||||
| Demand and money market accounts | 6,529,336 | 6,284,184 | 6,185,075 | 6,042,417 | 6,384,818 | ||||||||||||||
| Savings | 361,891 | 389,173 | 374,987 | 387,622 | 388,364 | ||||||||||||||
| Certificates of deposit | 2,100,604 | 1,855,411 | 1,468,975 | 1,407,495 | 1,499,514 | ||||||||||||||
| Total Deposits | 13,766,661 | 13,598,131 | 13,294,223 | 13,412,062 | 13,996,111 | ||||||||||||||
| Advances from the FHLB | 754,319 | 504,497 | 29,674 | 29,850 | 55,024 | ||||||||||||||
| Subordinated debt, net | 255,365 | 255,151 | 247,420 | 247,265 | 497,061 | ||||||||||||||
| Repurchase agreements and other borrowings | 49,898 | 46,602 | 40,918 | 43,165 | 47,922 | ||||||||||||||
| Total Borrowings | 1,059,582 | 806,250 | 318,012 | 320,280 | 600,007 | ||||||||||||||
| Other liabilities | 408,333 | 336,201 | 344,275 | 375,869 | 397,388 | ||||||||||||||
| TOTAL LIABILITIES | 15,234,576 | 14,740,582 | 13,956,510 | 14,108,211 | 14,993,506 | ||||||||||||||
| Preferred stock | - | - | - | - | - | ||||||||||||||
| Common stock, $1.667 par value | 124,805 | 124,682 | 121,426 | 121,423 | 121,265 | ||||||||||||||
| Capital surplus | 1,109,526 | 1,109,387 | 1,052,262 | 1,052,374 | 1,051,384 | ||||||||||||||
| Retained earnings | 884,901 | 861,905 | 840,777 | 810,845 | 777,430 | ||||||||||||||
| Common stock issued to deferred compensation | |||||||||||||||||||
| trust, at cost | (20,134 | ) | (18,839 | ) | (18,974 | ) | (18,862 | ) | (19,349 | ) | |||||||||
| Deferred compensation trust | 20,134 | 18,839 | 18,974 | 18,862 | 19,349 | ||||||||||||||
| Accumulated other comprehensive income (loss) | (145,392 | ) | (121,297 | ) | (140,505 | ) | (157,980 | ) | (96,358 | ) | |||||||||
| TOTAL SHAREHOLDERS' EQUITY | 1,973,840 | 1,974,677 | 1,873,960 | 1,826,662 | 1,853,721 | ||||||||||||||
| Noncontrolling interest | 16,659 | 15,218 | 14,797 | 16,924 | 16,812 | ||||||||||||||
| TOTAL EQUITY | 1,990,499 | 1,989,895 | 1,888,757 | 1,843,586 | 1,870,533 | ||||||||||||||
| TOTAL LIABILITIES AND EQUITY | $ | 17,225,075 | $ | 16,730,477 | $ | 15,845,267 | $ | 15,951,797 | $ | 16,864,039 | |||||||||
| 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, | ||||||||||||||
| 2023 | 2023 | 2022 | 2022 | 2022 | ||||||||||||||
| INTEREST INCOME: | ||||||||||||||||||
| Loans, including fees | $ | 138,977 | $ | 132,768 | $ | 123,395 | $ | 111,590 | $ | 101,043 | ||||||||
| Investment securities | 18,851 | 18,375 | 15,294 | 13,979 | 12,263 | |||||||||||||
| Interest-bearing deposits in financial institutions and federal funds sold | 14,488 | 10,649 | 11,387 | 9,509 | 4,616 | |||||||||||||
| Mortgage loans held for sale | 2,547 | 1,604 | 1,842 | 2,446 | 2,217 | |||||||||||||
| Total interest income | 174,863 | 163,396 | 151,918 | 137,524 | 120,139 | |||||||||||||
| INTEREST EXPENSE: | ||||||||||||||||||
| Deposits | 48,671 | 33,934 | 20,118 | 10,230 | 5,573 | |||||||||||||
| Advances from the FHLB | 10,407 | 2,992 | 665 | 83 | 86 | |||||||||||||
| Subordinated debt, net | 2,236 | 2,169 | 2,108 | 3,117 | 5,091 | |||||||||||||
| Repurchase agreements and other borrowings | (62 | ) | 923 | 244 | 56 | 49 | ||||||||||||
| Total interest expense | 61,252 | 40,018 | 23,135 | 13,486 | 10,799 | |||||||||||||
| Net interest income | 113,611 | 123,378 | 128,783 | 124,038 | 109,340 | |||||||||||||
| PROVISION FOR CREDIT LOSSES | 3,556 | 11,670 | 6,074 | 3,925 | 56 | |||||||||||||
| Net interest income after provision for credit losses | 110,055 | 111,708 | 122,709 | 120,113 | 109,284 | |||||||||||||
| NONINTEREST INCOME: | ||||||||||||||||||
| Residential mortgage banking income, net | 11,360 | 9,372 | 7,368 | 11,968 | 13,176 | |||||||||||||
| Insurance commissions and other title fees and income, net | 22,498 | 22,823 | 17,324 | 19,435 | 19,746 | |||||||||||||
| Property management income, net | 12,098 | 15,535 | 7,756 | 9,891 | 9,452 | |||||||||||||
| Real estate brokerage income, net | 1,834 | 1,791 | 2,355 | 2,932 | 3,412 | |||||||||||||
| Service charges on deposit accounts | 3,018 | 2,851 | 2,655 | 2,455 | 2,446 | |||||||||||||
| Credit card merchant fees, net | 1,682 | 1,545 | 1,653 | 1,658 | 1,906 | |||||||||||||
| BOLI | 1,710 | 1,672 | 1,985 | 1,585 | 1,853 | |||||||||||||
| Other income | 13,757 | 5,177 | 5,428 | 5,274 | 5,649 | |||||||||||||
| Total noninterest income | 67,957 | 60,766 | 46,524 | 55,198 | 57,640 | |||||||||||||
| NONINTEREST EXPENSE: | ||||||||||||||||||
| Salaries and employee benefits | 67,445 | 69,420 | 61,307 | 65,463 | 64,892 | |||||||||||||
| Occupancy | 9,487 | 9,064 | 9,252 | 8,748 | 8,342 | |||||||||||||
| Furniture and equipment | 4,389 | 4,244 | 3,983 | 3,764 | 3,643 | |||||||||||||
| Amortization - intangibles | 3,610 | 3,524 | 2,475 | 2,644 | 2,684 | |||||||||||||
| Software expense | 6,169 | 5,624 | 5,111 | 4,594 | 4,762 | |||||||||||||
| Data processing | 4,011 | 3,353 | 3,096 | 3,628 | 3,556 | |||||||||||||
| Professional fees | 3,166 | 3,011 | 3,605 | 2,627 | 1,761 | |||||||||||||
| Advertising and marketing | 3,959 | 4,401 | 3,489 | 4,290 | 4,091 | |||||||||||||
| Other expenses | 22,992 | 21,756 | 18,823 | 16,276 | 14,994 | |||||||||||||
| Total noninterest expense | 125,228 | 124,397 | 111,141 | 112,034 | 108,725 | |||||||||||||
| Income before income tax expense and noncontrolling interest | 52,784 | 48,077 | 58,092 | 63,277 | 58,199 | |||||||||||||
| Provision for income tax expense | 9,416 | 9,599 | 11,598 | 12,606 | 11,145 | |||||||||||||
| Net income | 43,368 | 38,478 | 46,494 | 50,671 | 47,054 | |||||||||||||
| Net income attributable to noncontrolling interest | (1,652 | ) | (145 | ) | 191 | (502 | ) | (507 | ) | |||||||||
| Net income attributable to TowneBank | $ | 41,716 | $ | 38,333 | $ | 46,685 | $ | 50,169 | $ | 46,547 | ||||||||
| Per common share information | ||||||||||||||||||
| Basic earnings | $ | 0.56 | $ | 0.52 | $ | 0.64 | $ | 0.69 | $ | 0.64 | ||||||||
| Diluted earnings | $ | 0.56 | $ | 0.52 | $ | 0.64 | $ | 0.69 | $ | 0.64 | ||||||||
| Basic weighted average shares outstanding | 74,691,121 | 74,363,222 | 72,686,303 | 72,578,736 | 72,559,537 | |||||||||||||
| Diluted weighted average shares outstanding | 74,699,810 | 74,390,614 | 72,724,189 | 72,594,474 | 72,568,886 | |||||||||||||
| Cash dividends declared | $ | 0.25 | $ | 0.23 | $ | 0.23 | $ | 0.23 | $ | 0.23 | ||||||||
| TOWNEBANK | ||||||||||||||||||||||||||
| Banking Segment Financial Information (unaudited) | ||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | Increase/(Decrease) | ||||||||||||||||||||||||
| June 30, | March 31, | June 30, | YTD 2023 over 2022 | |||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2023 | 2022 | Amount | Percent | ||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||
| Net interest income | $ | 113,327 | $ | 107,417 | $ | 123,650 | $ | 236,976 | $ | 204,187 | $ | 32,789 | 16.06 | % | ||||||||||||
| Service charges on deposit accounts | 3,018 | 2,446 | 2,851 | 5,870 | 5,020 | 850 | 16.93 | % | ||||||||||||||||||
| Credit card merchant fees | 1,682 | 1,906 | 1,545 | 3,226 | 3,281 | (55 | ) | (1.68 | )% | |||||||||||||||||
| Other income | 6,153 | 5,042 | 5,740 | 11,892 | 11,751 | 141 | 1.20 | % | ||||||||||||||||||
| Total noninterest income | 10,853 | 9,394 | 10,136 | 20,988 | 20,052 | 936 | 4.67 | % | ||||||||||||||||||
| Total revenue | 124,180 | 116,811 | 133,786 | 257,964 | 224,239 | 33,725 | 15.04 | % | ||||||||||||||||||
| Provision for credit losses | 3,482 | (160 | ) | 11,754 | 15,235 | (1,993 | ) | 17,228 | (864.43 | )% | ||||||||||||||||
| Expenses | ||||||||||||||||||||||||||
| Salaries and employee benefits | 42,240 | 38,673 | 43,193 | 85,433 | 75,733 | 9,700 | 12.81 | % | ||||||||||||||||||
| Occupancy | 6,846 | 5,633 | 6,233 | 13,080 | 11,292 | 1,788 | 15.83 | % | ||||||||||||||||||
| Furniture and equipment | 3,544 | 2,747 | 3,333 | 6,877 | 5,456 | 1,421 | 26.04 | % | ||||||||||||||||||
| Amortization of intangible assets | 1,341 | 777 | 1,281 | 2,622 | 1,603 | 1,019 | 63.57 | % | ||||||||||||||||||
| Other expenses | 29,178 | 17,856 | 28,444 | 57,621 | 36,083 | 21,538 | 59.69 | % | ||||||||||||||||||
| Total expenses | 83,149 | 65,686 | 82,484 | 165,633 | 130,167 | 35,466 | 27.25 | % | ||||||||||||||||||
| Income before income tax, corporate allocation and noncontrolling interest | 37,549 | 51,285 | 39,548 | 77,096 | 96,065 | (18,969 | ) | (19.75 | )% | |||||||||||||||||
| Corporate allocation | 1,271 | 1,325 | 1,200 | 2,472 | 2,617 | (145 | ) | (5.54 | )% | |||||||||||||||||
| Income before income tax provision and noncontrolling interest | 38,820 | 52,610 | 40,748 | 79,568 | 98,682 | (19,114 | ) | (19.37 | )% | |||||||||||||||||
| Provision for income tax expense | 6,114 | 9,756 | 7,651 | 13,765 | 18,275 | (4,510 | ) | (24.68 | )% | |||||||||||||||||
| Net income | 32,706 | 42,854 | 33,097 | 65,803 | 80,407 | (14,604 | ) | (18.16 | )% | |||||||||||||||||
| Noncontrolling interest | - | - | - | - | - | - | N/M | |||||||||||||||||||
| Net income attributable to TowneBank | $ | 32,706 | $ | 42,854 | $ | 33,097 | $ | 65,803 | $ | 80,407 | $ | (14,604 | ) | (18.16 | )% | |||||||||||
| Efficiency ratio(non-GAAP) | 65.88 | % | 55.57 | % | 60.70 | % | 63.19 | % | 57.33 | % | 5.86 | % | 10.22 | % | ||||||||||||
| TOWNEBANK | ||||||||||||||||||||||||||
| Realty Segment Financial Information (unaudited) | ||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | Increase/(Decrease) | ||||||||||||||||||||||||
| June 30, | March 31, | June 30, | YTD 2023 over 2022 | |||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2023 | 2022 | Amount | Percent | ||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||
| Residential mortgage brokerage income, net | $ | 12,215 | $ | 14,858 | $ | 9,794 | $ | 22,009 | $ | 30,765 | $ | (8,756 | ) | (28.46 | )% | |||||||||||
| Real estate brokerage income, net | 1,834 | 3,412 | 1,791 | 3,625 | 5,966 | (2,341 | ) | (39.24 | )% | |||||||||||||||||
| Title insurance and settlement fees | 152 | 561 | 291 | 443 | 1,065 | (622 | ) | (58.40 | )% | |||||||||||||||||
| Property management fees, net | 12,098 | 9,452 | 15,535 | 27,633 | 26,599 | 1,034 | 3.89 | % | ||||||||||||||||||
| Income from unconsolidated subsidiary | (886 | ) | 115 | 66 | (821 | ) | 282 | (1,103 | ) | (391.13 | )% | |||||||||||||||
| Net interest and other income | 9,468 | 2,411 | 184 | 9,653 | 5,343 | 4,310 | 80.67 | % | ||||||||||||||||||
| Total revenue | 34,881 | 30,809 | 27,661 | 62,542 | 70,020 | (7,478 | ) | (10.68 | )% | |||||||||||||||||
| Provision for credit losses | 74 | 216 | (84 | ) | (10 | ) | 600 | (610 | ) | (101.67 | )% | |||||||||||||||
| Expenses | ||||||||||||||||||||||||||
| Salaries and employee benefits | 13,949 | 16,501 | 14,839 | 28,789 | 33,791 | (5,002 | ) | (14.80 | )% | |||||||||||||||||
| Occupancy | 1,869 | 1,997 | 2,021 | 3,890 | 3,895 | (5 | ) | (0.13 | )% | |||||||||||||||||
| Furniture and equipment | 640 | 707 | 693 | 1,333 | 1,467 | (134 | ) | (9.13 | )% | |||||||||||||||||
| Amortization of intangible assets | 741 | 816 | 683 | 1,424 | 1,633 | (209 | ) | (12.80 | )% | |||||||||||||||||
| Other expenses | 9,337 | 9,932 | 8,437 | 17,775 | 20,785 | (3,010 | ) | (14.48 | )% | |||||||||||||||||
| Total expenses | 26,536 | 29,953 | 26,673 | 53,211 | 61,571 | (8,360 | ) | (13.58 | )% | |||||||||||||||||
| Income before income tax, corporate allocation and noncontrolling interest | 8,271 | 640 | 1,072 | 9,341 | 7,849 | 1,492 | 19.01 | % | ||||||||||||||||||
| Corporate allocation | (600 | ) | (1,000 | ) | (600 | ) | (1,200 | ) | (2,000 | ) | 800 | (40.00 | )% | |||||||||||||
| Income before income tax provision and noncontrolling interest | 7,671 | (360 | ) | 472 | 8,141 | 5,849 | 2,292 | 39.19 | % | |||||||||||||||||
| Provision for income tax expense | 1,686 | (144 | ) | 182 | 1,867 | 1,230 | 637 | 51.79 | % | |||||||||||||||||
| Net income | 5,985 | (216 | ) | 290 | 6,274 | 4,619 | 1,655 | 35.83 | % | |||||||||||||||||
| Noncontrolling interest | (1,652 | ) | (507 | ) | (145 | ) | (1,797 | ) | (1,171 | ) | (626 | ) | 53.46 | % | ||||||||||||
| Net income attributable to TowneBank | $ | 4,333 | $ | (723 | ) | $ | 145 | $ | 4,477 | $ | 3,448 | $ | 1,029 | 29.84 | % | |||||||||||
| Efficiency ratio excluding gain on BHHS Towne Realty(non-GAAP) | 99.03 | % | 94.57 | % | 93.96 | % | 96.42 | % | 85.60 | % | 10.82 | % | 12.64 | % | ||||||||||||
| TOWNEBANK | ||||||||||||||||||||||||||
| Insurance Segment Financial Information (unaudited) | ||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | Increase/(Decrease) | ||||||||||||||||||||||||
| June 30, | March 31, | June 30, | YTD 2023 over 2022 | |||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2023 | 2022 | Amount | Percent | ||||||||||||||||||||
| Commission and fee income | ||||||||||||||||||||||||||
| Property and casualty | $ | 20,028 | $ | 16,546 | $ | 18,129 | $ | 38,156 | $ | 31,884 | $ | 6,272 | 19.67 | % | ||||||||||||
| Employee benefits | 4,561 | 3,924 | 4,587 | 9,148 | 8,085 | 1,063 | 13.15 | % | ||||||||||||||||||
| Specialized benefit services | 153 | 160 | 159 | 312 | 330 | (18 | ) | (5.45 | )% | |||||||||||||||||
| Total commissions and fees | 24,742 | 20,630 | 22,875 | 47,616 | 40,299 | 7,317 | 18.16 | % | ||||||||||||||||||
| Contingency and bonus revenue | 2,638 | 2,994 | 4,369 | 7,008 | 6,398 | 610 | 9.53 | % | ||||||||||||||||||
| Other income | 8 | 15 | 6 | 15 | 48 | (33 | ) | (68.75 | )% | |||||||||||||||||
| Total revenue | 27,388 | 23,639 | 27,250 | 54,639 | 46,745 | 7,894 | 16.89 | % | ||||||||||||||||||
| Employee commission expense | 4,881 | 4,279 | 4,553 | 9,434 | 8,612 | 822 | 9.54 | % | ||||||||||||||||||
| Revenue, net of commission expense | 22,507 | 19,360 | 22,697 | 45,205 | 38,133 | 7,072 | 18.55 | % | ||||||||||||||||||
| Salaries and employee benefits | 11,256 | 9,718 | 11,388 | 22,644 | 19,331 | 3,313 | 17.14 | % | ||||||||||||||||||
| Occupancy | 772 | 712 | 810 | 1,582 | 1,482 | 100 | 6.75 | % | ||||||||||||||||||
| Furniture and equipment | 205 | 189 | 218 | 423 | 410 | 13 | 3.17 | % | ||||||||||||||||||
| Amortization of intangible assets | 1,528 | 1,091 | 1,560 | 3,088 | 2,265 | 823 | 36.34 | % | ||||||||||||||||||
| Other expenses | 1,782 | 1,376 | 1,264 | 3,045 | 2,878 | 167 | 5.80 | % | ||||||||||||||||||
| Total operating expenses | 15,543 | 13,086 | 15,240 | 30,782 | 26,366 | 4,416 | 16.75 | % | ||||||||||||||||||
| Income before income tax, corporate allocation and noncontrolling interest | 6,964 | 6,274 | 7,457 | 14,423 | 11,767 | 2,656 | 22.57 | % | ||||||||||||||||||
| Corporate allocation | (671 | ) | (325 | ) | (600 | ) | (1,272 | ) | (617 | ) | (655 | ) | 106.16 | % | ||||||||||||
| Income before income tax provision and noncontrolling interest | 6,293 | 5,949 | 6,857 | 13,151 | 11,150 | 2,001 | 17.95 | % | ||||||||||||||||||
| Provision for income tax expense | 1,616 | 1,533 | 1,766 | 3,382 | 2,872 | 510 | 17.76 | % | ||||||||||||||||||
| Net income | 4,677 | 4,416 | 5,091 | 9,769 | 8,278 | 1,491 | 18.01 | % | ||||||||||||||||||
| Noncontrolling interest | - | - | - | - | - | - | N/M | |||||||||||||||||||
| Net income attributable to TowneBank | $ | 4,677 | $ | 4,416 | $ | 5,091 | $ | 9,769 | $ | 8,278 | $ | 1,491 | 18.01 | % | ||||||||||||
| Provision for income taxes | 1,616 | 1,533 | 1,766 | 3,382 | 2,872 | 510 | 17.76 | % | ||||||||||||||||||
| Depreciation, amortization and interest expense | 1,683 | 1,220 | 1,706 | 3,389 | 2,539 | 850 | 33.48 | % | ||||||||||||||||||
| EBITDA(non-GAAP) | $ | 7,976 | $ | 7,169 | $ | 8,563 | $ | 16,540 | $ | 13,689 | $ | 2,851 | 20.83 | % | ||||||||||||
| Efficiency ratio(non-GAAP) | 62.27 | % | 61.96 | % | 60.27 | % | 61.26 | % | 63.20 | % | (1.94 | )% | (3.07 | )% | ||||||||||||
| 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, | |||||||||||||||
| 2023 | 2022 | 2023 | 2023 | 2022 | |||||||||||||||
| Return on average assets (GAAP) | 0.99 | % | 1.13 | % | 0.95 | % | 0.97 | % | 1.13 | % | |||||||||
| Impact of excluding average goodwill and other intangibles and amortization | 0.11 | % | 0.09 | % | 0.10 | % | 0.11 | % | 0.09 | % | |||||||||
| Return on average tangible assets (non-GAAP) | 1.10 | % | 1.22 | % | 1.05 | % | 1.08 | % | 1.22 | % | |||||||||
| Return on average equity (GAAP) | 8.46 | % | 9.94 | % | 7.99 | % | 8.23 | % | 9.83 | % | |||||||||
| Impact of excluding average goodwill and other intangibles and amortization | 3.89 | % | 4.26 | % | 3.72 | % | 3.80 | % | 4.23 | % | |||||||||
| Return on average tangible equity (non-GAAP) | 12.35 | % | 14.20 | % | 11.71 | % | 12.03 | % | 14.06 | % | |||||||||
| Return on average common equity (GAAP) | 8.52 | % | 10.03 | % | 8.05 | % | 8.29 | % | 9.92 | % | |||||||||
| Impact of excluding average goodwill and other intangibles and amortization | 3.96 | % | 4.34 | % | 3.78 | % | 3.87 | % | 4.30 | % | |||||||||
| Return on average tangible common equity (non-GAAP) | 12.48 | % | 14.37 | % | 11.83 | % | 12.16 | % | 14.22 | % | |||||||||
| Book value (GAAP) | $ | 26.36 | $ | 25.48 | $ | 26.40 | $ | 26.36 | $ | 25.48 | |||||||||
| Impact of excluding average goodwill and other intangibles and amortization | (7.05 | ) | (6.90 | ) | (7.36 | ) | (7.05 | ) | (6.90 | ) | |||||||||
| Tangible book value (non-GAAP) | $ | 19.31 | $ | 18.58 | $ | 19.04 | $ | 19.31 | $ | 18.58 | |||||||||
| Efficiency ratio (GAAP) | 68.97 | % | 65.11 | % | 67.55 | % | 68.26 | % | 65.62 | % | |||||||||
| Impact of exclusions | 1.44 | % | (1.60 | )% | (1.91 | )% | (0.31 | )% | (1.66 | )% | |||||||||
| Efficiency ratio (non-GAAP) | 70.41 | % | 63.51 | % | 65.64 | % | 67.95 | % | 63.96 | % | |||||||||
| Average assets (GAAP) | $ | 16,826,965 | $ | 16,529,810 | $ | 16,349,040 | $ | 16,589,323 | $ | 16,421,506 | |||||||||
| Less: average goodwill and intangible assets | 530,658 | 503,678 | 521,972 | 526,339 | 505,079 | ||||||||||||||
| Average tangible assets (non-GAAP) | $ | 16,296,307 | $ | 16,026,132 | $ | 15,827,068 | $ | 16,062,984 | $ | 15,916,427 | |||||||||
| Average equity (GAAP) | $ | 1,978,613 | $ | 1,878,361 | $ | 1,946,002 | $ | 1,962,398 | $ | 1,889,254 | |||||||||
| Less: average goodwill and intangible assets | 530,658 | 503,678 | 521,972 | 526,339 | 505,079 | ||||||||||||||
| Average tangible equity (non-GAAP) | $ | 1,447,955 | $ | 1,374,683 | $ | 1,424,030 | $ | 1,436,059 | $ | 1,384,175 | |||||||||
| Average common equity (GAAP) | $ | 1,963,164 | $ | 1,861,635 | $ | 1,931,063 | $ | 1,947,202 | $ | 1,872,806 | |||||||||
| Less: average goodwill and intangible assets | 530,658 | 503,678 | 521,972 | 526,339 | 505,079 | ||||||||||||||
| Average tangible common equity (non-GAAP) | $ | 1,432,506 | $ | 1,357,957 | $ | 1,409,091 | $ | 1,420,863 | $ | 1,367,727 | |||||||||
| Net income (GAAP) | $ | 41,716 | $ | 46,547 | $ | 38,333 | $ | 80,049 | $ | 92,133 | |||||||||
| Amortization of intangibles, net of tax | 2,852 | 2,120 | 2,784 | 5,636 | 4,346 | ||||||||||||||
| Tangible net income (non-GAAP) | $ | 44,568 | $ | 48,667 | $ | 41,117 | $ | 85,685 | $ | 96,479 | |||||||||
| Noninterest expense (GAAP) | $ | 125,228 | $ | 108,725 | $ | 124,397 | $ | 249,626 | $ | 218,104 | |||||||||
| Less: amortization of intangibles | 3,610 | 2,684 | 3,524 | 7,134 | 5,501 | ||||||||||||||
| Noninterest expense net of amortization (non-GAAP) | $ | 121,618 | $ | 106,041 | $ | 120,873 | $ | 242,492 | $ | 212,603 | |||||||||
| 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, | |||||||||||||||
| 2023 | 2023 | 2022 | 2022 | 2022 | |||||||||||||||
| Net income (GAAP) | $ | 41,716 | $ | 38,333 | $ | 46,685 | $ | 50,169 | $ | 46,547 | |||||||||
| Adjustments | |||||||||||||||||||
| Plus: Acquisition-related expenses, net of tax | 2,457 | 4,803 | 320 | 610 | 50 | ||||||||||||||
| Plus: Initial provision for acquired loans, net of tax | - | 3,166 | - | - | - | ||||||||||||||
| Less: Gain on sale of BHHS Towne Realty, net of noncontrolling interest and tax | (5,513 | ) | - | - | - | - | |||||||||||||
| Core operating earnings, excluding certain items affecting comparability (non-GAAP) | $ | 38,660 | $ | 46,302 | $ | 47,005 | $ | 50,779 | $ | 46,597 | |||||||||
| Weighted average diluted shares | 74,699,810 | 74,390,614 | 72,724,189 | 72,594,474 | 72,568,886 | ||||||||||||||
| Diluted EPS (GAAP) | $ | 0.56 | $ | 0.52 | $ | 0.64 | $ | 0.69 | $ | 0.64 | |||||||||
| Diluted EPS, excluding certain items affecting comparability (non-GAAP) | $ | 0.52 | $ | 0.62 | $ | 0.65 | $ | 0.70 | $ | 0.64 | |||||||||
| Average assets | $ | 16,826,965 | $ | 16,349,040 | $ | 15,929,756 | $ | 16,304,294 | $ | 16,529,810 | |||||||||
| Average tangible equity | $ | 1,447,955 | $ | 1,424,030 | 1,352,891 | $ | 1,374,574 | $ | 1,374,683 | ||||||||||
| Average common tangible equity | $ | 1,432,506 | $ | 1,409,091 | $ | 1,336,356 | $ | 1,357,845 | $ | 1,357,957 | |||||||||
| Return on average assets, excluding certain items affecting comparability (non-GAAP) | 0.92 | % | 1.15 | % | 1.17 | % | 1.24 | % | 1.13 | % | |||||||||
| Return on average tangible equity, excluding certain items affecting comparability (non-GAAP) | 11.50 | % | 13.98 | % | 14.36 | % | 15.26 | % | 14.21 | % | |||||||||
| Return on average common tangible equity, excluding certain items affecting comparability (non-GAAP) | 11.62 | % | 14.13 | % | 14.54 | % | 15.45 | % | 14.39 | % | |||||||||
| Efficiency ratio, excluding certain items affecting comparability (non-GAAP) | 67.32 | % | 64.32 | % | 63.20 | % | 62.16 | % | 65.08 | % | |||||||||
| 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, | ||||||
| 2023 | 2022 | ||||||
| Net income (GAAP) | $ | 80,049 | $ | 92,133 | |||
| Adjustments | |||||||
| Plus: Acquisition-related expenses, net of tax | 7,260 | 97 | |||||
| Plus: Initial provision for acquired loans, net of tax | 3,166 | - | |||||
| Less: Gain on sale of BHHS Towne Realty, net of noncontrolling interest and tax | (5,513 | ) | - | ||||
| Core operating earnings, excluding certain items affecting comparability (non-GAAP) | $ | 84,962 | $ | 92,230 | |||
| Weighted average diluted shares | 74,545,389 | 72,560,468 | |||||
| Diluted EPS (GAAP) | $ | 1.07 | $ | 1.27 | |||
| Diluted EPS, excluding certain items affecting comparability (non-GAAP) | $ | 1.14 | $ | 1.27 | |||
| Average assets | $ | 16,589,323 | $ | 16,421,506 | |||
| Average tangible equity | $ | 1,436,059 | $ | 1,384,175 | |||
| Average tangible common equity | $ | 1,420,863 | $ | 1,367,727 | |||
| Return on average assets, excluding certain items affecting comparability (non-GAAP) | 1.03 | % | 1.13 | % | |||
| Return on average tangible equity, excluding certain items affecting comparability (non-GAAP) | 12.72 | % | 14.07 | % | |||
| Return on average common tangible equity, excluding certain items affecting comparability (non-GAAP) | 12.86 | % | 14.24 | % | |||
| Efficiency ratio, excluding certain items affecting comparability (non-GAAP) | 67.44 | % | 65.58 | % | |||
