SUFFOLK, Va., Oct. 26, 2023 (GLOBE NEWSWIRE) -- TowneBank (the "Company" or "Towne") (NASDAQ: TOWN) today reported earnings for the quarter ended September 30, 2023 of $44.86 million, or $0.60 per diluted share, compared to $50.17 million, or $0.69 per diluted share, for the quarter ended September 30, 2022.
"We were pleased to deliver a solid performance for the quarter which reflected the strength of our core deposit franchise, diversified revenue model and robust capital levels. TowneBank continues to retain and grow its leading 28% deposit market share position in our home market in the Hampton Roads region, along with maintaining a top tier position in the Richmond, Raleigh, and Charlotte metropolitan markets, which validates our Main Street banking strategy. Average deposits were up $326 million versus the sequential quarter, excluding brokered deposits, which allowed us to reduce higher cost borrowings. Highlighting the value of our diversified revenue model, fee income benefited from stronger insurance revenues as we continue to build the intrinsic value of our insurance agency. 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 Third Quarter 2023:
- Total revenues were $172.86 million, a decrease of $6.37 million, or 3.56%, compared to third quarter 2022. A decline in net interest income of $10.98 million, driven by an increase in interest expense, was partially offset by an increase in noninterest income of $4.61 million.
- Loans held for investment were $11.17 billion, an increase of $0.61 billion, or 5.81%, compared to September 30, 2022, and a decrease of $35.04 million, or 0.31%, compared to June 30, 2023, 1.24% on an annualized basis. The increase from the prior year was primarily due to the January 2023 acquisition of Farmers Bankshares, Inc., ("Farmers"). Excluding loans acquired in the first quarter, total loans would have increased $335.47 million, or 3.18%, compared to September 30, 2022.
- Total deposits were $13.88 billion, an increase of $468.74 million, or 3.49%, compared to third quarter 2022, driven by the Farmers acquisition. In comparison to June 30, 2023, total deposits increased 0.83%, or $114.14 million, 3.29% on an annualized basis.
- Noninterest bearing deposits decreased 20.26%, to $4.44 billion, compared to third quarter 2022 and represented 32.02% of total deposits. Compared to the linked quarter, noninterest bearing deposits decreased 6.91%.
- Annualized return on common shareholders' equity was 9.04% compared to 10.69% in third quarter 2022. Annualized return on average tangible common shareholders' equity (non-GAAP) was 13.11% compared to 15.27% in third quarter 2022.
- Net interest margin was 2.95% for the quarter and taxable equivalent net interest margin (non-GAAP) was 2.98%, compared to the prior year quarter net interest margin of 3.28% and taxable equivalent net interest margin (non-GAAP) of 3.31%.
- The effective tax rate was 17.34% in the quarter compared to 20.08% in third quarter 2022 and 18.41% in the linked quarter.
"We continue to prudently manage the Company during the uncertain economic environment. Seasonality in noninterest revenues and member deposit balances may create some volatility in the next few quarters, however, we believe in our conservative approach to growth, liquidity and capital deployment will prove to be the right strategy for our long-term success," stated William I. Foster III, President and Chief Executive Officer.
Quarterly Net Interest Income:
- Net interest income was $113.06 million compared to $124.04 million for the quarter ended September 30, 2022. The decrease was driven by increased deposit costs outpacing higher earning asset yields.
- Tax-equivalent net interest margin (non-GAAP) was 2.98%, including purchase accounting accretion of 5 basis points, compared to 3.31%, including purchase accounting accretion of 2 basis points, for third quarter 2022.
- On an average basis, loans held for investment, with a yield of 5.13%, represented 73.45% of earning assets at September 30, 2023 compared to a yield of 4.25% and 69.83% of earning assets in the third quarter of 2022.
- Total cost of deposits increased to 1.84% from 0.30% for the quarter ended September 30, 2022. Interest expense on deposits increased $53.94 million, or 527.28%, over the prior year quarter driven by the increase in rate.
- Higher mortgage rates and low home sale inventory have adversely impacted our residential mortgage banking business.
- Average interest-earning assets totaled $15.21 billion at September 30, 2023 compared to $14.99 billion at September 30, 2022, an increase of 1.47%.
- Average interest-bearing liabilities totaled $9.75 billion, an increase of $1.40 billion, or 16.83% from prior year. Average short term FHLB borrowings were $248.91 million during the quarter.
Quarterly Provision for Credit Losses:
- The quarterly provision for credit losses was an expense of $1.01 million compared to $3.93 million one year ago and $3.56 million in the linked quarter.
- The allowance for credit losses on loans increased $1.65 million in third quarter 2023, compared to the linked quarter. The increase in the allowance was driven by changes in our portfolio composition, combined with changes to the macroeconomic forecast scenarios utilized in our models.
- Net loan recoveries were $1.07 million in the quarter compared to net recoveries of $187 thousand in the prior year quarter and net charge-offs of $9 thousand in the linked quarter. Two notable recoveries in third quarter 2023 were related to charge-offs that occurred in the fourth quarter of 2022 and first quarter of 2023.
- The ratio of net charge-offs (recoveries) to average loans on an annualized basis was (0.04)% in third quarter 2023, (0.01)% in third quarter 2022, and zero percent in the linked quarter.
- The allowance for credit losses on loans represented 1.12% of total loans at September 30, 2023, 1.02% at September 30, 2022, and 1.10% at June 30, 2023. The allowance for credit losses on loans was 17.60 times nonperforming loans compared to 20.48 times at September 30, 2022 and 18.09 times at June 30, 2023.
Quarterly Noninterest Income:
- Total noninterest income was $59.81 million compared to $55.20 million in 2022, an increase of $4.61 million, or 8.35%.
- Residential mortgage banking income was $10.65 million compared to $11.97 million in third quarter 2022. Loan volume decreased to $520.41 million in third quarter 2023 from $692.70 million in 2022. Higher mortgage rates coupled with low home sale inventory levels have adversely impacted production. Residential purchase activity comprised 95.96% of production volume in the third quarter of 2023 compared to 93.20% in the prior year quarter.
- Gross margins on residential mortgage sales increased 15 basis points from 3.02% in third quarter 2022 to 3.17% in the current quarter.
- Total net insurance commissions increased $4.34 million, or 22.34%, to $23.78 million in third 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 29.41%, or $2.91 million, to $12.80 million in third 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 $117.70 million compared to $112.03 million in 2022, an increase of $5.67 million, or 5.06%. Increases in salaries and employee benefits of $1.80 million, FDIC and other insurance of $1.37 million, software expense of $1.54 million, and amortization expense of $0.97 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 2023 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 an increased assessment rate in 2023.
- Software expense increased due to growth related cost increases and a number of ongoing projects throughout the Company.
- Amortization expense increased driven by the recent Farmers Bankshares, Inc. acquisition.
Consolidated Balance Sheet Highlights:
- Total assets were $16.68 billion for the quarter ended September 30, 2023, a $544.72 million decrease compared to $17.23 billion at June 30, 2023. Total assets increased $728.56 million, or 4.57%, from $15.95 billion at September 30, 2022.
- Loans held for investment increased $0.61 billion, or 5.81%, compared to prior year but decreased $35.04 million, or 0.31%, compared to the linked quarter, 1.24% on an annualized basis.
- Mortgage loans held for sale increased $23.03 million, or 13.95%, compared to prior year but declined $41.45 million, or 18.06%, compared to the linked quarter.
- Total deposits increased $468.74 million, or 3.49%, compared to prior year, primarily in interest- bearing demand and time deposits. In the linked quarter comparison, total deposits increased $114.14 million, or 3.29% on an annualized basis.
- Total borrowings increased $86.75 million, or 27.09%, over third quarter 2022 but decreased $0.65 billion, or 61.59%, compared to the linked quarter. FHLB advances, which are included in total borrowings, decreased $0.65 billion in third quarter 2023, compared to the linked quarter.
Investment Securities:
- Total investment securities were $2.54 billion compared to $2.61 billion at June 30, 2023 and $2.45 billion at September 30, 2022. The weighted average duration of the portfolio at September 30, 2023 was 3.3 years. The carrying value of the available for sale debt securities portfolio included net unrealized losses of $238.52 million at September 30, 2023, compared to $195.98 million at June 30, 2023 and $199.84 million at September 30, 2022, with the increases related to market valuation adjustments due to rising interest rates.
Loans and Asset Quality:
- Total loans held for investment were $11.17 billion at September 30, 2023 compared to $11.21 billion at June 30, 2023 and $10.56 billion at September 30, 2022.
- Total loans for commercial real estate non-owner occupied office buildings were $714.20 million at September 30, 2023. The average loan balance was $1.83 million with less than $1.0 million total criticized or classified loans.
- Nonperforming assets were $7.88 million, or 0.05% of total assets, compared to $5.44 million, or 0.03%, at September 30, 2022.
- Nonperforming loans were 0.06% of period end loans compared to 0.05% at September 30, 2022.
- Other real estate owned increased to $766 thousand from $186 thousand at September 30, 2022.
Deposits and Borrowings:
- Total deposits were $13.88 billion compared to $13.77 billion at June 30, 2023 and $13.41 billion at September 30, 2022.
- Total loans held for investment to deposits was 80.49% compared to 81.41% at June 30, 2023 and 78.73% at September 30, 2022.
- Noninterest-bearing deposits were 32.02% of total deposits at September 30, 2023 compared to 34.68% at June 30, 2023 and 41.56% at September 30, 2022. Noninterest-bearing deposits declined $1.13 billion, or 20.26%, compared to September 30, 2022, primarily in commercial and escrow accounts.
- Total borrowings were $0.41 billion compared to $1.06 billion at June 30, 2023 and $0.32 billion at September 30, 2022.
Capital:
- Common equity tier 1 capital ratio of 12.19%.
- Tier 1 leverage capital ratio of 10.06%.
- Tier 1 risk-based capital ratio of 12.31%.
- Total risk-based capital ratio of 15.09%.
- Book value per common share was $26.28 compared to $26.36 at June 30, 2023 and $25.08 at September 30, 2022.
- Tangible book value per common share (non-GAAP) was $19.28 compared to $19.31 at June 30, 2023 and $18.17 at September 30, 2022.
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 $16.68 billion as of September 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; 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; 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, our Quarterly Report on Form 10-Q for the period ended June 30, 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 | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| 2023 | 2023 | 2023 | 2022 | 2022 | ||||||||||||||||
| Income and Performance Ratios: | ||||||||||||||||||||
| Total revenue | $ | 172,864 | $ | 181,568 | $ | 184,144 | $ | 175,307 | $ | 179,236 | ||||||||||
| Net income | 44,745 | 43,368 | 38,478 | 46,494 | 50,671 | |||||||||||||||
| Net income available to common shareholders | 44,862 | 41,716 | 38,333 | 46,685 | 50,169 | |||||||||||||||
| Net income per common share - diluted | 0.60 | 0.56 | 0.52 | 0.64 | 0.69 | |||||||||||||||
| Book value per common share | 26.28 | 26.36 | 26.40 | 25.73 | 25.08 | |||||||||||||||
| Book value per common share - tangible(non-GAAP) | 19.28 | 19.31 | 19.04 | 18.84 | 18.17 | |||||||||||||||
| Return on average assets | 1.06 | % | 0.99 | % | 0.95 | % | 1.16 | % | 1.22 | % | ||||||||||
| Return on average assets - tangible(non-GAAP) | 1.17 | % | 1.10 | % | 1.05 | % | 1.25 | % | 1.31 | % | ||||||||||
| Return on average equity | 8.96 | % | 8.46 | % | 7.99 | % | 9.98 | % | 10.60 | % | ||||||||||
| Return on average equity - tangible(non-GAAP) | 12.97 | % | 12.35 | % | 11.71 | % | 14.26 | % | 15.08 | % | ||||||||||
| Return on average common equity | 9.04 | % | 8.52 | % | 8.05 | % | 10.07 | % | 10.69 | % | ||||||||||
| Return on average common equity - tangible(non-GAAP) | 13.11 | % | 12.48 | % | 11.83 | % | 14.44 | % | 15.27 | % | ||||||||||
| Noninterest income as a percentage of total revenue | 34.60 | % | 37.43 | % | 33.00 | % | 26.54 | % | 30.80 | % | ||||||||||
| Regulatory Capital Ratios (1): | ||||||||||||||||||||
| Common equity tier 1 | 12.19 | % | 11.99 | % | 11.68 | % | 11.92 | % | 11.92 | % | ||||||||||
| Tier 1 | 12.31 | % | 12.11 | % | 11.80 | % | 12.04 | % | 12.05 | % | ||||||||||
| Total | 15.09 | % | 14.88 | % | 14.55 | % | 14.80 | % | 14.80 | % | ||||||||||
| Tier 1 leverage ratio | 10.06 | % | 9.85 | % | 9.86 | % | 9.87 | % | 9.52 | % | ||||||||||
| Asset Quality: | ||||||||||||||||||||
| Allowance for credit losses on loans to nonperforming loans | 17.60x | 18.09x | 12.87x | 17.67x | 20.48x | |||||||||||||||
| Allowance for credit losses on loans to period end loans | 1.12 | % | 1.10 | % | 1.07 | % | 1.03 | % | 1.02 | % | ||||||||||
| Nonperforming loans to period end loans | 0.06 | % | 0.06 | % | 0.08 | % | 0.06 | % | 0.05 | % | ||||||||||
| Nonperforming assets to period end assets | 0.05 | % | 0.05 | % | 0.06 | % | 0.04 | % | 0.03 | % | ||||||||||
| Net charge-offs (recoveries) to average loans (annualized) | (0.04)% | - | % | 0.14 | % | 0.11 | % | (0.01)% | ||||||||||||
| Net charge-offs (recoveries) | $ | (1,074 | ) | $ | 9 | $ | 3,874 | $ | 2,904 | $ | (187 | ) | ||||||||
| Nonperforming loans | $ | 7,110 | $ | 6,827 | $ | 9,322 | $ | 6,273 | $ | 5,250 | ||||||||||
| Former bank premises | - | 1,782 | - | - | - | |||||||||||||||
| Foreclosed property | 766 | 738 | 564 | 560 | 186 | |||||||||||||||
| Total nonperforming assets | $ | 7,876 | $ | 9,347 | $ | 9,886 | $ | 6,833 | $ | 5,436 | ||||||||||
| Loans past due 90 days and still accruing interest | $ | 970 | $ | 360 | $ | 206 | $ | 324 | $ | 725 | ||||||||||
| Allowance for credit losses on loans | $ | 125,159 | $ | 123,513 | $ | 120,002 | $ | 110,816 | $ | 107,497 | ||||||||||
| Mortgage Banking: | ||||||||||||||||||||
| Loans originated, mortgage | $ | 348,387 | $ | 409,050 | $ | 280,401 | $ | 299,298 | $ | 458,254 | ||||||||||
| Loans originated, joint venture | 172,021 | 207,450 | 135,818 | 157,511 | 234,443 | |||||||||||||||
| Total loans originated | $ | 520,408 | $ | 616,500 | $ | 416,219 | $ | 456,809 | $ | 692,697 | ||||||||||
| Number of loans originated | 1,487 | 1,715 | 1,249 | 1,355 | 1,983 | |||||||||||||||
| Number of originators | 192 | 196 | 194 | 186 | 194 | |||||||||||||||
| Purchase % | 95.96 | % | 96.32 | % | 94.99 | % | 95.08 | % | 93.20 | % | ||||||||||
| Loans sold | $ | 567,291 | $ | 525,078 | $ | 346,288 | $ | 483,254 | $ | 701,908 | ||||||||||
| Rate lock asset | $ | 1,348 | $ | 1,551 | $ | 1,435 | $ | 482 | $ | 859 | ||||||||||
| Gross realized gain on sales and fees as a % of loans originated | 3.17 | % | 2.96 | % | 3.11 | % | 2.93 | % | 3.02 | % | ||||||||||
| Other Ratios: | ||||||||||||||||||||
| Net interest margin | 2.95 | % | 2.98 | % | 3.36 | % | 3.51 | % | 3.28 | % | ||||||||||
| Net interest margin-fully tax equivalent(non-GAAP) | 2.98 | % | 3.01 | % | 3.39 | % | 3.53 | % | 3.31 | % | ||||||||||
| Average earning assets/total average assets | 90.73 | % | 90.96 | % | 90.98 | % | 91.51 | % | 91.92 | % | ||||||||||
| Average loans/average deposits | 80.75 | % | 83.72 | % | 82.40 | % | 80.14 | % | 76.82 | % | ||||||||||
| Average noninterest deposits/total average deposits | 33.50 | % | 36.07 | % | 38.35 | % | 41.07 | % | 41.77 | % | ||||||||||
| Period end equity/period end total assets | 11.90 | % | 11.56 | % | 11.89 | % | 11.92 | % | 11.56 | % | ||||||||||
| Efficiency ratio(non-GAAP) | 66.21 | % | 70.41 | % | 65.64 | % | 61.99 | % | 61.03 | % | ||||||||||
| (1) Current reporting period regulatory capital ratios are preliminary. | ||||||||||||||||||||
| TOWNEBANK | |||||||||||||||||
| Selected Data (unaudited) | |||||||||||||||||
| (dollars in thousands) | |||||||||||||||||
| Investment Securities | % Change | ||||||||||||||||
| Q3 | Q3 | Q2 | Q3 23 vs. | Q3 23 vs. | |||||||||||||
| Available-for-sale securities, at fair value | 2023 | 2022 | 2023 | Q3 22 | Q2 23 | ||||||||||||
| U.S. agency securities | $ | 300,161 | $ | 331,297 | $ | 318,354 | (9.40)% | (5.71)% | |||||||||
| U.S. Treasury notes | 26,721 | 26,399 | 26,874 | 1.22 | % | (0.57)% | |||||||||||
| Municipal securities | 484,587 | 426,720 | 503,792 | 13.56 | % | (3.81)% | |||||||||||
| Trust preferred and other corporate securities | 74,024 | 79,501 | 71,116 | (6.89)% | 4.09 | % | |||||||||||
| Mortgage-backed securities issued by GSE | 1,079,303 | 1,027,331 | 1,086,947 | 5.06 | % | (0.70)% | |||||||||||
| Allowance for credit losses | (1,343 | ) | (1,112 | ) | (1,232 | ) | 20.77 | % | 9.01 | % | |||||||
| Total | $ | 1,963,453 | $ | 1,890,136 | $ | 2,005,851 | 3.88 | % | (2.11)% | ||||||||
| Gross unrealized gains (losses) reflected in financial statements | |||||||||||||||||
| Total gross unrealized gains | $ | 475 | $ | 1,292 | $ | 975 | (63.24)% | (51.28)% | |||||||||
| Total gross unrealized losses | (238,993 | ) | (201,127 | ) | (196,954 | ) | 18.83 | % | 21.34 | % | |||||||
| Net unrealized gains (losses) and other adjustments on AFS securities | $ | (238,518 | ) | $ | (199,835 | ) | $ | (195,979 | ) | 19.36 | % | 21.71 | % | ||||
| Held-to-maturity securities, at amortized cost | |||||||||||||||||
| U.S. agency securities | $ | 101,659 | $ | 100,905 | $ | 101,469 | 0.75 | % | 0.19 | % | |||||||
| U.S. Treasury notes | 433,015 | 434,148 | 433,298 | (0.26)% | (0.07)% | ||||||||||||
| Municipal securities | 5,249 | 5,159 | 5,226 | 1.74 | % | 0.44 | % | ||||||||||
| Trust preferred corporate securities | 2,185 | 2,235 | 2,198 | (2.24)% | (0.59)% | ||||||||||||
| Mortgage-backed securities issued by GSE | 5,746 | 6,298 | 5,826 | (8.76)% | (1.37)% | ||||||||||||
| Allowance for credit losses | (85 | ) | (83 | ) | (87 | ) | 2.41 | % | (2.30)% | ||||||||
| Total | $ | 547,769 | $ | 548,662 | $ | 547,930 | (0.16)% | (0.03)% | |||||||||
| Total gross unrealized gains | $ | 82 | $ | 153 | $ | 272 | (46.41)% | (69.85)% | |||||||||
| Total gross unrealized losses | (23,505 | ) | (31,116 | ) | (25,914 | ) | (24.46)% | (9.30)% | |||||||||
| Net unrealized gains (losses) in HTM securities | $ | (23,423 | ) | $ | (30,963 | ) | $ | (25,642 | ) | (24.35)% | (8.65)% | ||||||
| Total unrealized (losses) gains on AFS and HTM securities | $ | (261,941 | ) | $ | (230,798 | ) | $ | (221,621 | ) | 13.49 | % | 18.19 | % | ||||
| % Change | |||||||||||||||||
| Loans Held For Investment | Q3 | Q3 | Q2 | Q3 23 vs. | Q3 23 vs. | ||||||||||||
| 2023 | 2022 | 2023 | Q3 22 | Q2 23 | |||||||||||||
| Real estate - construction and development | $ | 1,325,976 | $ | 1,324,831 | $ | 1,364,575 | 0.09 | % | (2.83)% | ||||||||
| Commercial real estate - owner occupied | 1,686,888 | 1,590,371 | 1,687,261 | 6.07 | % | (0.02)% | |||||||||||
| Commercial real estate - non owner occupied | 3,025,985 | 2,799,363 | 3,034,548 | 8.10 | % | (0.28)% | |||||||||||
| Real estate - multifamily | 542,611 | 458,803 | 520,464 | 18.27 | % | 4.26 | % | ||||||||||
| Residential 1-4 family | 1,818,843 | 1,567,024 | 1,790,225 | 16.07 | % | 1.60 | % | ||||||||||
| HELOC | 371,861 | 388,305 | 380,501 | (4.23)% | (2.27)% | ||||||||||||
| Commercial and industrial business (C&I) | 1,237,524 | 1,251,350 | 1,259,282 | (1.10)% | (1.73)% | ||||||||||||
| Government | 523,456 | 520,198 | 520,994 | 0.63 | % | 0.47 | % | ||||||||||
| Indirect | 548,621 | 572,710 | 562,161 | (4.21)% | (2.41)% | ||||||||||||
| Consumer loans and other | 91,206 | 86,656 | 88,003 | 5.25 | % | 3.64 | % | ||||||||||
| Total | $ | 11,172,971 | $ | 10,559,611 | $ | 11,208,014 | 5.81 | % | (0.31)% | ||||||||
| % Change | |||||||||||||||||
| Deposits | Q3 | Q3 | Q2 | Q3 23 vs. | Q3 23 vs. | ||||||||||||
| 2023 | 2022 | 2023 | Q3 22 | Q2 23 | |||||||||||||
| Noninterest-bearing demand | $ | 4,444,861 | $ | 5,574,528 | $ | 4,774,830 | (20.26)% | (6.91)% | |||||||||
| Interest-bearing: | |||||||||||||||||
| Demand and money market accounts | 6,764,415 | 6,042,417 | 6,529,336 | 11.95 | % | 3.60 | % | ||||||||||
| Savings | 350,031 | 387,622 | 361,891 | (9.70)% | (3.28)% | ||||||||||||
| Certificates of deposits | 2,321,498 | 1,407,495 | 2,100,604 | 64.94 | % | 10.52 | % | ||||||||||
| Total | 13,880,805 | 13,412,062 | 13,766,661 | 3.49 | % | 0.83 | % | ||||||||||
| TOWNEBANK | ||||||||||||||||||||||||||||||||
| Average Balances, Yields and Rate Paid (unaudited) | ||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||
| Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||||||
| September 30, 2023 | June 30, 2023 | September 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) | $ | 11,169,924 | $ | 144,457 | 5.13 | % | $ | 11,209,641 | $ | 139,814 | 5.00 | % | $ | 10,465,441 | $ | 112,225 | 4.25 | % | ||||||||||||||
| Taxable investment securities | 2,373,731 | 18,645 | 3.14 | % | 2,450,393 | 17,195 | 2.81 | % | 2,385,218 | 12,943 | 2.17 | % | ||||||||||||||||||||
| Tax-exempt investment securities | 206,639 | 1,993 | 3.86 | % | 209,728 | 2,003 | 3.82 | % | 147,184 | 1,252 | 3.41 | % | ||||||||||||||||||||
| Total securities | 2,580,370 | 20,638 | 3.20 | % | 2,660,121 | 19,198 | 2.89 | % | 2,532,402 | 14,195 | 2.24 | % | ||||||||||||||||||||
| Interest-bearing deposits | 1,230,582 | 15,031 | 4.85 | % | 1,262,692 | 14,488 | 4.60 | % | 1,800,798 | 9,509 | 2.09 | % | ||||||||||||||||||||
| Loans held for sale | 227,426 | 3,928 | 6.91 | % | 172,679 | 2,547 | 5.90 | % | 188,737 | 2,446 | 5.18 | % | ||||||||||||||||||||
| Total earning assets | 15,208,302 | 184,054 | 4.80 | % | 15,305,133 | 176,047 | 4.61 | % | 14,987,378 | 138,375 | 3.66 | % | ||||||||||||||||||||
| Less: allowance for credit losses | (125,553 | ) | (121,140 | ) | (104,178 | ) | ||||||||||||||||||||||||||
| Total nonearning assets | 1,680,110 | 1,642,972 | 1,421,094 | |||||||||||||||||||||||||||||
| Total assets | $ | 16,762,859 | $ | 16,826,965 | $ | 16,304,294 | ||||||||||||||||||||||||||
| Liabilities and Equity: | ||||||||||||||||||||||||||||||||
| Interest-bearing deposits | ||||||||||||||||||||||||||||||||
| Demand and money market | $ | 6,605,853 | $ | 41,381 | 2.49 | % | $ | 6,220,394 | $ | 32,058 | 2.07 | % | $ | 6,084,753 | $ | 6,542 | 0.43 | % | ||||||||||||||
| Savings | 356,116 | 938 | 1.05 | % | 371,455 | 895 | 0.97 | % | 391,437 | 628 | 0.64 | % | ||||||||||||||||||||
| Certificates of deposit | 2,236,102 | 21,852 | 3.88 | % | 1,968,623 | 15,718 | 3.20 | % | 1,456,746 | 3,060 | 0.83 | % | ||||||||||||||||||||
| Total interest-bearing deposits | 9,198,071 | 64,171 | 2.77 | % | 8,560,472 | 48,671 | 2.28 | % | 7,932,936 | 10,230 | 0.51 | % | ||||||||||||||||||||
| Borrowings | 299,105 | 3,382 | 4.42 | % | 863,255 | 10,345 | 4.74 | % | 94,411 | 139 | 0.58 | % | ||||||||||||||||||||
| Subordinated debt, net | 255,446 | 2,245 | 3.52 | % | 255,264 | 2,236 | 3.50 | % | 320,518 | 3,117 | 3.89 | % | ||||||||||||||||||||
| Total interest-bearing liabilities | 9,752,622 | 69,798 | 2.84 | % | 9,678,991 | 61,252 | 2.54 | % | 8,347,865 | 13,486 | 0.64 | % | ||||||||||||||||||||
| Demand deposits | 4,633,856 | 4,829,395 | 5,690,020 | |||||||||||||||||||||||||||||
| Other noninterest-bearing liabilities | 389,912 | 339,966 | 387,835 | |||||||||||||||||||||||||||||
| Total liabilities | 14,776,390 | 14,848,352 | 14,425,720 | |||||||||||||||||||||||||||||
| Shareholders' equity | 1,986,469 | 1,978,613 | 1,878,574 | |||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 16,762,859 | $ | 16,826,965 | $ | 16,304,294 | ||||||||||||||||||||||||||
| Net interest income (tax-equivalent basis) (4) | $ | 114,256 | $ | 114,795 | $ | 124,889 | ||||||||||||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures | ||||||||||||||||||||||||||||||||
| Tax-equivalent basis adjustment | (1,198 | ) | (1,184 | ) | (851 | ) | ||||||||||||||||||||||||||
| Net interest income (GAAP) | $ | 113,058 | $ | 113,611 | $ | 124,038 | ||||||||||||||||||||||||||
| Interest rate spread (2)(4) | 1.96 | % | 2.07 | % | 3.02 | % | ||||||||||||||||||||||||||
| Interest expense as a percent of average earning assets | 1.82 | % | 1.61 | % | 0.36 | % | ||||||||||||||||||||||||||
| Net interest margin (tax equivalent basis) (3)(4) | 2.98 | % | 3.01 | % | 3.31 | % | ||||||||||||||||||||||||||
| Total cost of deposits | 1.84 | % | 1.46 | % | 0.30 | % | ||||||||||||||||||||||||||
(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) | |||||||||||||||||||||
| Nine Months Ended | Nine Months Ended | ||||||||||||||||||||
| September 30, 2023 | September 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) | $ | 11,159,329 | $ | 417,808 | 5.01 | % | $ | 10,113,980 | $ | 309,283 | 4.09 | % | |||||||||
| Taxable investment securities | 2,420,634 | 52,656 | 2.90 | % | 2,259,940 | 33,344 | 1.97 | % | |||||||||||||
| Tax-exempt investment securities | 201,535 | 5,883 | 3.89 | % | 130,196 | 3,090 | 3.16 | % | |||||||||||||
| Total securities | 2,622,169 | 58,539 | 2.98 | % | 2,390,136 | 36,434 | 2.03 | % | |||||||||||||
| Interest-bearing deposits | 1,179,952 | 40,168 | 4.55 | % | 2,362,155 | 15,472 | 0.88 | % | |||||||||||||
| Loans held for sale | 168,822 | 8,079 | 6.38 | % | 225,777 | 7,038 | 4.16 | % | |||||||||||||
| Total earning assets | 15,130,272 | 524,594 | 4.64 | % | 15,092,048 | 368,227 | 3.26 | % | |||||||||||||
| Less: allowance for credit losses | (120,420 | ) | (104,733 | ) | |||||||||||||||||
| Total nonearning assets | 1,637,952 | 1,394,691 | |||||||||||||||||||
| Total assets | $ | 16,647,804 | $ | 16,382,006 | |||||||||||||||||
| Liabilities and Equity: | |||||||||||||||||||||
| Interest-bearing deposits | |||||||||||||||||||||
| Demand and money market | $ | 6,349,422 | $ | 96,742 | 2.04 | % | $ | 6,203,889 | $ | 11,898 | 0.26 | % | |||||||||
| Savings | 376,282 | 2,676 | 0.95 | % | 387,290 | 1,664 | 0.57 | % | |||||||||||||
| Certificates of deposit | 1,964,718 | 47,358 | 3.22 | % | 1,440,661 | 7,134 | 0.66 | % | |||||||||||||
| Total interest-bearing deposits | 8,690,422 | 146,776 | 2.26 | % | 8,031,840 | 20,696 | 0.34 | % | |||||||||||||
| Borrowings | 505,856 | 17,644 | 4.60 | % | 119,336 | 412 | 0.46 | % | |||||||||||||
| Subordinated debt, net | 253,612 | 6,650 | 3.50 | % | 401,195 | 12,328 | 4.10 | % | |||||||||||||
| Total interest-bearing liabilities | 9,449,890 | 171,070 | 2.42 | % | 8,552,371 | 33,436 | 0.52 | % | |||||||||||||
| Demand deposits | 4,873,945 | 5,569,186 | |||||||||||||||||||
| Other noninterest-bearing liabilities | 353,459 | 374,794 | |||||||||||||||||||
| Total liabilities | 14,677,294 | 14,496,351 | |||||||||||||||||||
| Shareholders' equity | 1,970,510 | 1,885,655 | |||||||||||||||||||
| Total liabilities and equity | $ | 16,647,804 | $ | 16,382,006 | |||||||||||||||||
| Net interest income (tax-equivalent basis)(4) | $ | 353,524 | $ | 334,791 | |||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures | |||||||||||||||||||||
| Tax-equivalent basis adjustment | (3,477 | ) | (2,209 | ) | |||||||||||||||||
| Net interest income (GAAP) | $ | 350,047 | $ | 332,582 | |||||||||||||||||
| Interest rate spread (2)(4) | 2.22 | % | 2.74 | % | |||||||||||||||||
| Interest expense as a percent of average earning assets | 1.51 | % | 0.30 | % | |||||||||||||||||
| Net interest margin (tax equivalent basis) (3)(4) | 3.12 | % | 2.97 | % | |||||||||||||||||
| Total cost of deposits | 1.45 | % | 0.20 | % | |||||||||||||||||
| (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) | |||||||
| September 30, | December 31, | ||||||
| 2023 | 2022 | ||||||
| (unaudited) | (audited) | ||||||
| ASSETS | |||||||
| Cash and due from banks | $ | 83,949 | $ | 55,381 | |||
| Interest-bearing deposits at FRB - Richmond | 1,029,276 | 1,000,205 | |||||
| Federal funds sold and interest-bearing deposits in financial institutions | 102,527 | 97,244 | |||||
| Total Cash and Cash Equivalents | 1,215,752 | 1,152,830 | |||||
| Securities available for sale, at fair value (amortized cost of $2,203,314 and $2,033,040, and allowance for credit losses of $1,343 and $1,086 at September 30, 2023 and December 31, 2022, respectively) | 1,963,453 | 1,840,902 | |||||
| Securities held to maturity, at amortized cost (fair value $524,431 and $518,993 at September 30, 2023 and December 31, 2022, respectively) | 547,854 | 548,475 | |||||
| Less: allowance for credit losses | (85 | ) | (83 | ) | |||
| Securities held to maturity, net of allowance for credit losses | 547,769 | 548,392 | |||||
| Other equity securities | 14,062 | 6,424 | |||||
| FHLB stock | 16,634 | 9,617 | |||||
| Total Securities | 2,541,918 | 2,405,335 | |||||
| Mortgage loans held for sale | 188,048 | 102,339 | |||||
| Loans, net of unearned income and deferred costs | 11,172,971 | 10,794,602 | |||||
| Less: allowance for credit losses | (125,159 | ) | (110,816 | ) | |||
| Net Loans | 11,047,812 | 10,683,786 | |||||
| Premises and equipment, net | 335,522 | 304,802 | |||||
| Goodwill | 456,684 | 458,482 | |||||
| Other intangible assets, net | 67,496 | 43,163 | |||||
| BOLI | 275,240 | 258,069 | |||||
| Other assets | 551,884 | 436,461 | |||||
| TOTAL ASSETS | $ | 16,680,356 | $ | 15,845,267 | |||
| LIABILITIES AND EQUITY | |||||||
| Deposits: | |||||||
| Noninterest-bearing demand | $ | 4,444,861 | $ | 5,265,186 | |||
| Interest-bearing: | |||||||
| Demand and money market accounts | 6,764,415 | 6,185,075 | |||||
| Savings | 350,031 | 374,987 | |||||
| Certificates of deposit | 2,321,498 | 1,468,975 | |||||
| Total Deposits | 13,880,805 | 13,294,223 | |||||
| Advances from the FHLB | 104,139 | 29,674 | |||||
| Subordinated debt, net | 255,580 | 247,420 | |||||
| Repurchase agreements and other borrowings | 47,315 | 40,918 | |||||
| Total Borrowings | 407,034 | 318,012 | |||||
| Other liabilities | 408,305 | 344,275 | |||||
| TOTAL LIABILITIES | 14,696,144 | 13,956,510 | |||||
| Preferred stock, authorized and unissued shares - 2,000,000 | - | - | |||||
| Common stock, $1.667 par value: 150,000,000 shares authorized | |||||||
| 74,887,083 and 72,841,379 shares issued at | |||||||
| September 30, 2023 and December 31, 2022, respectively | 124,837 | 121,426 | |||||
| Capital surplus | 1,111,152 | 1,052,262 | |||||
| Retained earnings | 911,042 | 840,777 | |||||
| Common stock issued to deferred compensation trust, at cost | |||||||
| 1,001,376 and 931,030 shares at September 30, 2023 and December 31, 2022, respectively | (20,740 | ) | (18,974 | ) | |||
| Deferred compensation trust | 20,740 | 18,974 | |||||
| Accumulated other comprehensive income (loss) | (179,043 | ) | (140,505 | ) | |||
| TOTAL SHAREHOLDERS' EQUITY | 1,967,988 | 1,873,960 | |||||
| Noncontrolling interest | 16,224 | 14,797 | |||||
| TOTAL EQUITY | 1,984,212 | 1,888,757 | |||||
| TOTAL LIABILITIES AND EQUITY | $ | 16,680,356 | $ | 15,845,267 | |||
| TOWNEBANK | |||||||||||||||
| Consolidated Statements of Income (unaudited) | |||||||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| INTEREST INCOME: | |||||||||||||||
| Loans, including fees | $ | 143,605 | $ | 111,590 | $ | 415,351 | $ | 307,595 | |||||||
| Investment securities | 20,292 | 13,979 | 57,519 | 35,913 | |||||||||||
| Interest-bearing deposits in financial institutions and federal funds sold | 15,031 | 9,509 | 40,168 | 15,472 | |||||||||||
| Mortgage loans held for sale | 3,928 | 2,446 | 8,079 | 7,038 | |||||||||||
| Total interest income | 182,856 | 137,524 | 521,117 | 366,018 | |||||||||||
| INTEREST EXPENSE: | |||||||||||||||
| Deposits | 64,171 | 10,230 | 146,776 | 20,696 | |||||||||||
| Advances from the FHLB | 3,438 | 83 | 16,838 | 261 | |||||||||||
| Subordinated debt, net | 2,245 | 3,117 | 6,650 | 12,328 | |||||||||||
| Repurchase agreements and other borrowings | (56 | ) | 56 | 806 | 151 | ||||||||||
| Total interest expense | 69,798 | 13,486 | 171,070 | 33,436 | |||||||||||
| Net interest income | 113,058 | 124,038 | 350,047 | 332,582 | |||||||||||
| PROVISION FOR CREDIT LOSSES | 1,007 | 3,925 | 16,232 | 2,532 | |||||||||||
| Net interest income after provision for credit losses | 112,051 | 120,113 | 333,815 | 330,050 | |||||||||||
| NONINTEREST INCOME: | |||||||||||||||
| Residential mortgage banking income, net | 10,648 | 11,968 | 31,380 | 39,782 | |||||||||||
| Insurance commissions and other income, net | 23,777 | 19,435 | 69,098 | 58,255 | |||||||||||
| Property management income, net | 12,800 | 9,891 | 40,433 | 36,489 | |||||||||||
| Real estate brokerage income, net | (63 | ) | 2,932 | 3,562 | 8,899 | ||||||||||
| Service charges on deposit accounts | 2,802 | 2,455 | 8,671 | 7,474 | |||||||||||
| Credit card merchant fees, net | 2,006 | 1,658 | 5,232 | 4,940 | |||||||||||
| BOLI | 1,814 | 1,585 | 5,196 | 5,155 | |||||||||||
| Other income | 6,022 | 5,274 | 24,956 | 18,052 | |||||||||||
| Total noninterest income | 59,806 | 55,198 | 188,528 | 179,046 | |||||||||||
| NONINTEREST EXPENSE: | |||||||||||||||
| Salaries and employee benefits | 67,258 | 65,463 | 204,124 | 194,318 | |||||||||||
| Occupancy | 9,027 | 8,748 | 27,579 | 25,417 | |||||||||||
| Furniture and equipment | 4,100 | 3,764 | 12,733 | 11,097 | |||||||||||
| Amortization - intangibles | 3,610 | 2,644 | 10,744 | 8,145 | |||||||||||
| Software expense | 6,130 | 4,594 | 17,922 | 13,848 | |||||||||||
| Data processing | 4,140 | 3,628 | 11,504 | 10,778 | |||||||||||
| Professional fees | 2,770 | 2,627 | 8,948 | 6,416 | |||||||||||
| Advertising and marketing | 3,653 | 4,290 | 12,012 | 12,508 | |||||||||||
| Other expenses | 17,014 | 16,276 | 61,762 | 47,612 | |||||||||||
| Total noninterest expense | 117,702 | 112,034 | 367,328 | 330,139 | |||||||||||
| Income before income tax expense and noncontrolling interest | 54,155 | 63,277 | 155,015 | 178,957 | |||||||||||
| Provision for income tax expense | 9,410 | 12,606 | 28,424 | 34,983 | |||||||||||
| Net income | $ | 44,745 | $ | 50,671 | $ | 126,591 | $ | 143,974 | |||||||
| Net income attributable to noncontrolling interest | 117 | (502 | ) | (1,680 | ) | (1,672 | ) | ||||||||
| Net income attributable to TowneBank | $ | 44,862 | $ | 50,169 | $ | 124,911 | $ | 142,302 | |||||||
| Per common share information | |||||||||||||||
| Basic earnings | $ | 0.60 | $ | 0.69 | $ | 1.67 | $ | 1.96 | |||||||
| Diluted earnings | $ | 0.60 | $ | 0.69 | $ | 1.67 | $ | 1.96 | |||||||
| Cash dividends declared | $ | 0.25 | $ | 0.23 | $ | 0.73 | $ | 0.66 | |||||||
| TOWNEBANK | |||||||||||||||||||
| Consolidated Balance Sheets - Five Quarter Trend | |||||||||||||||||||
| (dollars in thousands, except share data) | |||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| 2023 | 2023 | 2023 | 2022 | 2022 | |||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (audited) | (unaudited) | |||||||||||||||
| ASSETS | |||||||||||||||||||
| Cash and due from banks | $ | 83,949 | $ | 106,994 | $ | 97,502 | $ | 55,381 | $ | 97,290 | |||||||||
| Interest-bearing deposits at FRB - Richmond | 1,029,276 | 1,427,044 | 1,040,112 | 1,000,205 | 1,245,067 | ||||||||||||||
| Federal funds sold and interest-bearing deposits in financial institutions | 102,527 | 102,231 | 104,924 | 97,244 | 96,862 | ||||||||||||||
| Total Cash and Cash Equivalents | 1,215,752 | 1,636,269 | 1,242,538 | 1,152,830 | 1,439,219 | ||||||||||||||
| Securities available for sale | 1,963,453 | 2,005,851 | 2,078,483 | 1,840,902 | 1,890,136 | ||||||||||||||
| Securities held to maturity | 547,854 | 548,017 | 548,226 | 548,475 | 548,745 | ||||||||||||||
| Less: allowance for credit losses | (85 | ) | (87 | ) | (88 | ) | (83 | ) | (83 | ) | |||||||||
| Securities held to maturity, net of allowance for credit losses | 547,769 | 547,930 | 548,138 | 548,392 | 548,662 | ||||||||||||||
| Other equity securities | 14,062 | 13,798 | 13,341 | 6,424 | 6,360 | ||||||||||||||
| FHLB stock | 16,634 | 40,454 | 29,837 | 9,617 | 9,475 | ||||||||||||||
| Total Securities | 2,541,918 | 2,608,033 | 2,669,799 | 2,405,335 | 2,454,633 | ||||||||||||||
| Mortgage loans held for sale | 188,048 | 229,502 | 157,161 | 102,339 | 165,023 | ||||||||||||||
| Loans, net of unearned income and deferred costs | 11,172,971 | 11,208,014 | 11,173,785 | 10,794,602 | 10,559,611 | ||||||||||||||
| Less: allowance for credit losses | (125,159 | ) | (123,513 | ) | (120,002 | ) | (110,816 | ) | (107,497 | ) | |||||||||
| Net Loans | 11,047,812 | 11,084,501 | 11,053,783 | 10,683,786 | 10,452,114 | ||||||||||||||
| Premises and equipment, net | 335,522 | 326,686 | 321,944 | 304,802 | 295,345 | ||||||||||||||
| Goodwill | 456,684 | 456,695 | 477,234 | 458,482 | 458,482 | ||||||||||||||
| Other intangible assets, net | 67,496 | 71,106 | 73,238 | 43,163 | 44,854 | ||||||||||||||
| BOLI | 275,240 | 273,435 | 271,704 | 258,069 | 256,074 | ||||||||||||||
| Other assets | 551,884 | 538,848 | 463,076 | 436,461 | 386,053 | ||||||||||||||
| TOTAL ASSETS | $ | 16,680,356 | $ | 17,225,075 | $ | 16,730,477 | $ | 15,845,267 | $ | 15,951,797 | |||||||||
| LIABILITIES AND EQUITY | |||||||||||||||||||
| Deposits: | |||||||||||||||||||
| Noninterest-bearing demand | $ | 4,444,861 | $ | 4,774,830 | $ | 5,069,363 | $ | 5,265,186 | $ | 5,574,528 | |||||||||
| Interest-bearing: | |||||||||||||||||||
| Demand and money market accounts | 6,764,415 | 6,529,336 | 6,284,184 | 6,185,075 | 6,042,417 | ||||||||||||||
| Savings | 350,031 | 361,891 | 389,173 | 374,987 | 387,622 | ||||||||||||||
| Certificates of deposit | 2,321,498 | 2,100,604 | 1,855,411 | 1,468,975 | 1,407,495 | ||||||||||||||
| Total Deposits | 13,880,805 | 13,766,661 | 13,598,131 | 13,294,223 | 13,412,062 | ||||||||||||||
| Advances from the FHLB | 104,139 | 754,319 | 504,497 | 29,674 | 29,850 | ||||||||||||||
| Subordinated debt, net | 255,580 | 255,365 | 255,151 | 247,420 | 247,265 | ||||||||||||||
| Repurchase agreements and other borrowings | 47,315 | 49,898 | 46,602 | 40,918 | 43,165 | ||||||||||||||
| Total Borrowings | 407,034 | 1,059,582 | 806,250 | 318,012 | 320,280 | ||||||||||||||
| Other liabilities | 408,305 | 408,333 | 336,201 | 344,275 | 375,869 | ||||||||||||||
| TOTAL LIABILITIES | 14,696,144 | 15,234,576 | 14,740,582 | 13,956,510 | 14,108,211 | ||||||||||||||
| Preferred stock | - | - | - | - | - | ||||||||||||||
| Common stock, $1.667 par value | 124,837 | 124,805 | 124,682 | 121,426 | 121,423 | ||||||||||||||
| Capital surplus | 1,111,152 | 1,109,526 | 1,109,387 | 1,052,262 | 1,052,374 | ||||||||||||||
| Retained earnings | 911,042 | 884,901 | 861,905 | 840,777 | 810,845 | ||||||||||||||
| Common stock issued to deferred compensation | |||||||||||||||||||
| trust, at cost | (20,740 | ) | (20,134 | ) | (18,839 | ) | (18,974 | ) | (18,862 | ) | |||||||||
| Deferred compensation trust | 20,740 | 20,134 | 18,839 | 18,974 | 18,862 | ||||||||||||||
| Accumulated other comprehensive income (loss) | (179,043 | ) | (145,392 | ) | (121,297 | ) | (140,505 | ) | (157,980 | ) | |||||||||
| TOTAL SHAREHOLDERS' EQUITY | 1,967,988 | 1,973,840 | 1,974,677 | 1,873,960 | 1,826,662 | ||||||||||||||
| Noncontrolling interest | 16,224 | 16,659 | 15,218 | 14,797 | 16,924 | ||||||||||||||
| TOTAL EQUITY | 1,984,212 | 1,990,499 | 1,989,895 | 1,888,757 | 1,843,586 | ||||||||||||||
| TOTAL LIABILITIES AND EQUITY | $ | 16,680,356 | $ | 17,225,075 | $ | 16,730,477 | $ | 15,845,267 | $ | 15,951,797 | |||||||||
| TOWNEBANK | ||||||||||||||||||
| Consolidated Statements of Income - Five Quarter Trend (unaudited) | ||||||||||||||||||
| (dollars in thousands, except share data) | ||||||||||||||||||
| Three Months Ended | ||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||
| 2023 | 2023 | 2023 | 2022 | 2022 | ||||||||||||||
| INTEREST INCOME: | ||||||||||||||||||
| Loans, including fees | $ | 143,605 | $ | 138,977 | $ | 132,768 | $ | 123,395 | $ | 111,590 | ||||||||
| Investment securities | 20,292 | 18,851 | 18,375 | 15,294 | 13,979 | |||||||||||||
| Interest-bearing deposits in financial institutions and federal funds sold | 15,031 | 14,488 | 10,649 | 11,387 | 9,509 | |||||||||||||
| Mortgage loans held for sale | 3,928 | 2,547 | 1,604 | 1,842 | 2,446 | |||||||||||||
| Total interest income | 182,856 | 174,863 | 163,396 | 151,918 | 137,524 | |||||||||||||
| INTEREST EXPENSE: | ||||||||||||||||||
| Deposits | 64,171 | 48,671 | 33,934 | 20,118 | 10,230 | |||||||||||||
| Advances from the FHLB | 3,438 | 10,407 | 2,992 | 665 | 83 | |||||||||||||
| Subordinated debt, net | 2,245 | 2,236 | 2,169 | 2,108 | 3,117 | |||||||||||||
| Repurchase agreements and other borrowings | (56 | ) | (62 | ) | 923 | 244 | 56 | |||||||||||
| Total interest expense | 69,798 | 61,252 | 40,018 | 23,135 | 13,486 | |||||||||||||
| Net interest income | 113,058 | 113,611 | 123,378 | 128,783 | 124,038 | |||||||||||||
| PROVISION FOR CREDIT LOSSES | 1,007 | 3,556 | 11,670 | 6,074 | 3,925 | |||||||||||||
| Net interest income after provision for credit losses | 112,051 | 110,055 | 111,708 | 122,709 | 120,113 | |||||||||||||
| NONINTEREST INCOME: | ||||||||||||||||||
| Residential mortgage banking income, net | 10,648 | 11,360 | 9,372 | 7,368 | 11,968 | |||||||||||||
| Insurance commissions and other income, net | 23,777 | 22,498 | 22,823 | 17,324 | 19,435 | |||||||||||||
| Property management income, net | 12,800 | 12,098 | 15,535 | 7,756 | 9,891 | |||||||||||||
| Real estate brokerage income, net | (63 | ) | 1,834 | 1,791 | 2,355 | 2,932 | ||||||||||||
| Service charges on deposit accounts | 2,802 | 3,018 | 2,851 | 2,655 | 2,455 | |||||||||||||
| Credit card merchant fees, net | 2,006 | 1,682 | 1,545 | 1,653 | 1,658 | |||||||||||||
| BOLI | 1,814 | 1,710 | 1,672 | 1,985 | 1,585 | |||||||||||||
| Other income | 6,022 | 13,757 | 5,177 | 5,428 | 5,274 | |||||||||||||
| Total noninterest income | 59,806 | 67,957 | 60,766 | 46,524 | 55,198 | |||||||||||||
| NONINTEREST EXPENSE: | ||||||||||||||||||
| Salaries and employee benefits | 67,258 | 67,445 | 69,420 | 61,307 | 65,463 | |||||||||||||
| Occupancy | 9,027 | 9,487 | 9,064 | 9,252 | 8,748 | |||||||||||||
| Furniture and equipment | 4,100 | 4,389 | 4,244 | 3,983 | 3,764 | |||||||||||||
| Amortization - intangibles | 3,610 | 3,610 | 3,524 | 2,475 | 2,644 | |||||||||||||
| Software expense | 6,130 | 6,169 | 5,624 | 5,111 | 4,594 | |||||||||||||
| Data processing | 4,140 | 4,011 | 3,353 | 3,096 | 3,628 | |||||||||||||
| Professional fees | 2,770 | 3,166 | 3,011 | 3,605 | 2,627 | |||||||||||||
| Advertising and marketing | 3,653 | 3,959 | 4,401 | 3,489 | 4,290 | |||||||||||||
| Other expenses | 17,014 | 22,992 | 21,756 | 18,823 | 16,276 | |||||||||||||
| Total noninterest expense | 117,702 | 125,228 | 124,397 | 111,141 | 112,034 | |||||||||||||
| Income before income tax expense and noncontrolling interest | 54,155 | 52,784 | 48,077 | 58,092 | 63,277 | |||||||||||||
| Provision for income tax expense | 9,410 | 9,416 | 9,599 | 11,598 | 12,606 | |||||||||||||
| Net income | 44,745 | 43,368 | 38,478 | 46,494 | 50,671 | |||||||||||||
| Net income attributable to noncontrolling interest | 117 | (1,652 | ) | (145 | ) | 191 | (502 | ) | ||||||||||
| Net income attributable to TowneBank | $ | 44,862 | $ | 41,716 | $ | 38,333 | $ | 46,685 | $ | 50,169 | ||||||||
| Per common share information | ||||||||||||||||||
| Basic earnings | $ | 0.60 | $ | 0.56 | $ | 0.52 | $ | 0.64 | $ | 0.69 | ||||||||
| Diluted earnings | $ | 0.60 | $ | 0.56 | $ | 0.52 | $ | 0.64 | $ | 0.69 | ||||||||
| Basic weighted average shares outstanding | 74,750,294 | 74,691,121 | 74,363,222 | 72,686,303 | 72,578,736 | |||||||||||||
| Diluted weighted average shares outstanding | 74,765,515 | 74,699,810 | 74,390,614 | 72,724,189 | 72,594,474 | |||||||||||||
| Cash dividends declared | $ | 0.25 | $ | 0.25 | $ | 0.23 | $ | 0.23 | $ | 0.23 | ||||||||
| TOWNEBANK | ||||||||||||||||||||||||||
| Banking Segment Financial Information (unaudited) | ||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | Increase/(Decrease) | ||||||||||||||||||||||||
| September 30, | June 30, | September 30, | YTD 2023 over 2022 | |||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2023 | 2022 | Amount | Percent | ||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||
| Net interest income | $ | 112,189 | $ | 123,039 | $ | 113,327 | $ | 349,165 | $ | 327,226 | $ | 21,939 | 6.70 | % | ||||||||||||
| Service charges on deposit accounts | 2,802 | 2,455 | 3,018 | 8,671 | 7,474 | 1,197 | 16.02 | % | ||||||||||||||||||
| Credit card merchant fees | 2,006 | 1,658 | 1,682 | 5,232 | 4,940 | 292 | 5.91 | % | ||||||||||||||||||
| Other income | 6,608 | 5,332 | 6,153 | 18,499 | 17,083 | 1,416 | 8.29 | % | ||||||||||||||||||
| Total noninterest income | 11,416 | 9,445 | 10,853 | 32,402 | 29,497 | 2,905 | 9.85 | % | ||||||||||||||||||
| Total revenue | 123,605 | 132,484 | 124,180 | 381,567 | 356,723 | 24,844 | 6.96 | % | ||||||||||||||||||
| Provision for credit losses | 1,206 | 4,240 | 3,482 | 16,442 | 2,247 | 14,195 | 631.73 | % | ||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||
| Salaries and employee benefits | 42,727 | 39,349 | 42,240 | 128,161 | 115,082 | 13,079 | 11.36 | % | ||||||||||||||||||
| Occupancy | 6,637 | 6,109 | 6,846 | 19,717 | 17,401 | 2,316 | 13.31 | % | ||||||||||||||||||
| Furniture and equipment | 3,273 | 2,803 | 3,544 | 10,150 | 8,259 | 1,891 | 22.90 | % | ||||||||||||||||||
| Amortization of intangible assets | 1,296 | 726 | 1,341 | 3,918 | 2,330 | 1,588 | 68.15 | % | ||||||||||||||||||
| Other expenses | 22,595 | 21,075 | 29,178 | 80,215 | 57,158 | 23,057 | 40.34 | % | ||||||||||||||||||
| Total expenses | 76,528 | 70,062 | 83,149 | 242,161 | 200,230 | 41,931 | 20.94 | % | ||||||||||||||||||
| Income before income tax, corporate allocation and noncontrolling interest | 45,871 | 58,182 | 37,549 | 122,964 | 154,246 | (31,282 | ) | (20.28)% | ||||||||||||||||||
| Corporate allocation | 1,291 | 902 | 1,271 | 3,763 | 3,520 | 243 | 6.90 | % | ||||||||||||||||||
| Income before income tax provision and noncontrolling interest | 47,162 | 59,084 | 38,820 | 126,727 | 157,766 | (31,039 | ) | (19.67)% | ||||||||||||||||||
| Provision for income tax expense | 7,440 | 11,507 | 6,114 | 21,204 | 29,782 | (8,578 | ) | (28.80)% | ||||||||||||||||||
| Net income | 39,722 | 47,577 | 32,706 | 105,523 | 127,984 | (22,461 | ) | (17.55)% | ||||||||||||||||||
| Noncontrolling interest | - | - | - | - | - | - | N/M | |||||||||||||||||||
| Net income attributable to TowneBank | $ | 39,722 | $ | 47,577 | $ | 32,706 | $ | 105,523 | $ | 127,984 | $ | (22,461 | ) | (17.55)% | ||||||||||||
| Efficiency ratio(non-GAAP) | 60.86 | % | 52.34 | % | 65.88 | % | 62.44 | % | 55.48 | % | 6.96 | % | 12.55 | % | ||||||||||||
| TOWNEBANK | ||||||||||||||||||||||||||
| Realty Segment Financial Information (unaudited) | ||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | Increase/(Decrease) | ||||||||||||||||||||||||
| September 30, | June 30, | September 30, | YTD 2023 over 2022 | |||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2023 | 2022 | Amount | Percent | ||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||
| Residential mortgage brokerage income, net | $ | 10,955 | $ | 12,726 | $ | 12,215 | $ | 32,964 | $ | 43,491 | $ | (10,527 | ) | (24.21)% | ||||||||||||
| Real estate brokerage income, net | (63 | ) | 2,932 | 1,834 | 3,562 | 8,899 | (5,337 | ) | (59.97)% | |||||||||||||||||
| Title insurance and settlement fees | - | 525 | 152 | 443 | 1,590 | (1,147 | ) | (72.14)% | ||||||||||||||||||
| Property management fees, net | 12,800 | 9,891 | 12,098 | 40,433 | 36,489 | 3,944 | 10.81 | % | ||||||||||||||||||
| Income from unconsolidated subsidiary | (63 | ) | 77 | (886 | ) | (884 | ) | 359 | (1,243 | ) | (346.24)% | |||||||||||||||
| Net interest and other income | 1,163 | 1,508 | 9,468 | 10,817 | 6,851 | 3,966 | 57.89 | % | ||||||||||||||||||
| Total revenue | 24,792 | 27,659 | 34,881 | 87,335 | 97,679 | (10,344 | ) | (10.59)% | ||||||||||||||||||
| Provision for credit losses | (199 | ) | (315 | ) | 74 | (210 | ) | 285 | (495 | ) | (173.68)% | |||||||||||||||
| Expenses | ||||||||||||||||||||||||||
| Salaries and employee benefits | 12,881 | 15,854 | 13,949 | 41,670 | 49,646 | (7,976 | ) | (16.07)% | ||||||||||||||||||
| Occupancy | 1,669 | 1,919 | 1,869 | 5,559 | 5,814 | (255 | ) | (4.39)% | ||||||||||||||||||
| Furniture and equipment | 600 | 765 | 640 | 1,933 | 2,232 | (299 | ) | (13.40)% | ||||||||||||||||||
| Amortization of intangible assets | 742 | 817 | 741 | 2,166 | 2,449 | (283 | ) | (11.56)% | ||||||||||||||||||
| Other expenses | 9,544 | 8,687 | 9,337 | 27,319 | 29,472 | (2,153 | ) | (7.31)% | ||||||||||||||||||
| Total expenses | 25,436 | 28,042 | 26,536 | 78,647 | 89,613 | (10,966 | ) | (12.24)% | ||||||||||||||||||
| Income before income tax, corporate allocation and noncontrolling interest | (445 | ) | (68 | ) | 8,271 | 8,898 | 7,781 | 1,117 | 14.36 | % | ||||||||||||||||
| Corporate allocation | (600 | ) | (602 | ) | (600 | ) | (1,800 | ) | (2,602 | ) | 802 | (30.82)% | ||||||||||||||
| Income before income tax provision and noncontrolling interest | (1,045 | ) | (670 | ) | 7,671 | 7,098 | 5,179 | 1,919 | 37.05 | % | ||||||||||||||||
| Provision for income tax expense | (99 | ) | (120 | ) | 1,686 | 1,769 | 1,110 | 659 | 59.37 | % | ||||||||||||||||
| Net income | (946 | ) | (550 | ) | 5,985 | 5,329 | 4,069 | 1,260 | 30.97 | % | ||||||||||||||||
| Noncontrolling interest | 117 | (502 | ) | (1,652 | ) | (1,680 | ) | (1,672 | ) | (8 | ) | 0.48 | % | |||||||||||||
| Net income attributable to TowneBank | $ | (829 | ) | $ | (1,052 | ) | $ | 4,333 | $ | 3,649 | $ | 2,397 | $ | 1,252 | 52.23 | % | ||||||||||
| Efficiency ratio excluding gain on equity investment(non-GAAP) | 99.61 | % | 98.43 | % | 99.03 | % | 97.43 | % | 89.24 | % | 8.19 | % | 9.18 | % | ||||||||||||
| TOWNEBANK | ||||||||||||||||||||||||||
| Insurance Segment Financial Information (unaudited) | ||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | Increase/(Decrease) | ||||||||||||||||||||||||
| September 30, | June 30, | September 30, | YTD 2023 over 2022 | |||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2023 | 2022 | Amount | Percent | ||||||||||||||||||||
| Commission and fee income | ||||||||||||||||||||||||||
| Property and casualty | $ | 22,103 | $ | 17,567 | $ | 20,028 | $ | 60,259 | $ | 49,451 | $ | 10,808 | 21.86 | % | ||||||||||||
| Employee benefits | 4,245 | 4,020 | 4,561 | 13,393 | 12,105 | 1,288 | 10.64 | % | ||||||||||||||||||
| Specialized benefit services | 133 | 160 | 153 | 445 | 489 | (44 | ) | (9.00)% | ||||||||||||||||||
| Total commissions and fees | 26,481 | 21,747 | 24,742 | 74,097 | 62,045 | 12,052 | 19.42 | % | ||||||||||||||||||
| Contingency and bonus revenue | 2,335 | 1,654 | 2,638 | 9,343 | 8,052 | 1,291 | 16.03 | % | ||||||||||||||||||
| Other income | 557 | 23 | 8 | 573 | 72 | 501 | 695.83 | % | ||||||||||||||||||
| Total revenue | 29,373 | 23,424 | 27,388 | 84,013 | 70,169 | 13,844 | 19.73 | % | ||||||||||||||||||
| Employee commission expense | 4,906 | 4,331 | 4,881 | 14,340 | 12,943 | 1,397 | 10.79 | % | ||||||||||||||||||
| Revenue, net of commission expense | 24,467 | 19,093 | 22,507 | 69,673 | 57,226 | 12,447 | 21.75 | % | ||||||||||||||||||
| Salaries and employee benefits | 11,650 | 10,260 | 11,256 | 34,293 | 29,590 | 4,703 | 15.89 | % | ||||||||||||||||||
| Occupancy | 721 | 720 | 772 | 2,303 | 2,202 | 101 | 4.59 | % | ||||||||||||||||||
| Furniture and equipment | 227 | 196 | 205 | 650 | 606 | 44 | 7.26 | % | ||||||||||||||||||
| Amortization of intangible assets | 1,572 | 1,101 | 1,528 | 4,660 | 3,366 | 1,294 | 38.44 | % | ||||||||||||||||||
| Other expenses | 1,568 | 1,653 | 1,782 | 4,614 | 4,532 | 82 | 1.81 | % | ||||||||||||||||||
| Total operating expenses | 15,738 | 13,930 | 15,543 | 46,520 | 40,296 | 6,224 | 15.45 | % | ||||||||||||||||||
| Income before income tax, corporate allocation and noncontrolling interest | 8,729 | 5,163 | 6,964 | 23,153 | 16,930 | 6,223 | 36.76 | % | ||||||||||||||||||
| Corporate allocation | (691 | ) | (300 | ) | (671 | ) | (1,963 | ) | (918 | ) | (1,045 | ) | 113.83 | % | ||||||||||||
| Income before income tax provision and noncontrolling interest | 8,038 | 4,863 | 6,293 | 21,190 | 16,012 | 5,178 | 32.34 | % | ||||||||||||||||||
| Provision for income tax expense | 2,069 | 1,219 | 1,616 | 5,451 | 4,091 | 1,360 | 33.24 | % | ||||||||||||||||||
| Net income | 5,969 | 3,644 | 4,677 | 15,739 | 11,921 | 3,818 | 32.03 | % | ||||||||||||||||||
| Noncontrolling interest | - | - | - | - | - | - | N/M | |||||||||||||||||||
| Net income attributable to TowneBank | $ | 5,969 | $ | 3,644 | $ | 4,677 | $ | 15,739 | $ | 11,921 | $ | 3,818 | 32.03 | % | ||||||||||||
| Provision for income taxes | 2,069 | 1,219 | 1,616 | 5,451 | 4,091 | 1,360 | 33.24 | % | ||||||||||||||||||
| Depreciation, amortization and interest expense | 1,726 | 1,228 | 1,683 | 5,115 | 3,767 | 1,348 | 35.78 | % | ||||||||||||||||||
| EBITDA(non-GAAP) | $ | 9,764 | $ | 6,091 | $ | 7,976 | $ | 26,305 | $ | 19,779 | $ | 6,526 | 32.99 | % | ||||||||||||
| Efficiency ratio(non-GAAP) | 59.21 | % | 67.19 | % | 62.27 | % | 60.55 | % | 64.53 | % | (3.98) % | (6.17)% | ||||||||||||||
| TOWNEBANK | |||||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures | |||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| September 30, | September 30, | June 30, | September 30, | September 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2023 | 2022 | |||||||||||||||
| Return on average assets (GAAP) | 1.06 | % | 1.22 | % | 0.99 | % | 1.00 | % | 1.16 | % | |||||||||
| Impact of excluding average goodwill and other intangibles and amortization | 0.11 | % | 0.09 | % | 0.11 | % | 0.11 | % | 0.09 | % | |||||||||
| Return on average tangible assets (non-GAAP) | 1.17 | % | 1.31 | % | 1.10 | % | 1.11 | % | 1.25 | % | |||||||||
| Return on average equity (GAAP) | 8.96 | % | 10.60 | % | 8.46 | % | 8.48 | % | 10.09 | % | |||||||||
| Impact of excluding average goodwill and other intangibles and amortization | 4.01 | % | 4.48 | % | 3.89 | % | 3.87 | % | 4.31 | % | |||||||||
| Return on average tangible equity (non-GAAP) | 12.97 | % | 15.08 | % | 12.35 | % | 12.35 | % | 14.40 | % | |||||||||
| Return on average common equity (GAAP) | 9.04 | % | 10.69 | % | 8.52 | % | 8.54 | % | 10.18 | % | |||||||||
| Impact of excluding average goodwill and other intangibles and amortization | 4.07 | % | 4.58 | % | 3.96 | % | 3.95 | % | 4.39 | % | |||||||||
| Return on average tangible common equity (non-GAAP) | 13.11 | % | 15.27 | % | 12.48 | % | 12.49 | % | 14.57 | % | |||||||||
| Book value (GAAP) | $ | 26.28 | $ | 25.08 | $ | 26.36 | $ | 26.28 | $ | 25.08 | |||||||||
| Impact of excluding average goodwill and other intangibles and amortization | (7.00 | ) | (6.91 | ) | (7.05 | ) | (7.00 | ) | (6.91 | ) | |||||||||
| Tangible book value (non-GAAP) | $ | 19.28 | $ | 18.17 | $ | 19.31 | $ | 19.28 | $ | 18.17 | |||||||||
| Efficiency ratio (GAAP) | 68.09 | % | 62.51 | % | 68.97 | % | 68.20 | % | 64.53 | % | |||||||||
| Impact of exclusions | (1.88) % | (1.48) % | 1.44 | % | (0.82) % | (1.59) % | |||||||||||||
| Efficiency ratio (non-GAAP) | 66.21 | % | 61.03 | % | 70.41 | % | 67.38 | % | 62.94 | % | |||||||||
| Average assets (GAAP) | $ | 16,762,859 | $ | 16,304,294 | $ | 16,826,965 | $ | 16,647,804 | $ | 16,382,006 | |||||||||
| Less: average goodwill and intangible assets | 526,445 | 504,000 | 530,658 | 526,375 | 504,715 | ||||||||||||||
| Average tangible assets (non-GAAP) | $ | 16,236,414 | $ | 15,800,294 | $ | 16,296,307 | $ | 16,121,429 | $ | 15,877,291 | |||||||||
| Average equity (GAAP) | $ | 1,986,469 | $ | 1,878,574 | $ | 1,978,613 | $ | 1,970,510 | $ | 1,885,655 | |||||||||
| Less: average goodwill and intangible assets | 526,445 | 504,000 | 530,658 | 526,375 | 504,715 | ||||||||||||||
| Average tangible equity (non-GAAP) | $ | 1,460,024 | $ | 1,374,574 | $ | 1,447,955 | $ | 1,444,135 | $ | 1,380,940 | |||||||||
| Average common equity (GAAP) | $ | 1,969,898 | $ | 1,861,845 | $ | 1,963,164 | $ | 1,954,850 | $ | 1,869,112 | |||||||||
| Less: average goodwill and intangible assets | 526,445 | 504,000 | 530,658 | 526,375 | 504,715 | ||||||||||||||
| Average tangible common equity (non-GAAP) | $ | 1,443,453 | $ | 1,357,845 | $ | 1,432,506 | $ | 1,428,475 | $ | 1,364,397 | |||||||||
| Net income (GAAP) | $ | 44,862 | $ | 50,169 | $ | 41,716 | $ | 124,911 | $ | 142,302 | |||||||||
| Amortization of intangibles, net of tax | 2,852 | 2,089 | 2,852 | 8,488 | 6,435 | ||||||||||||||
| Tangible net income (non-GAAP) | $ | 47,714 | $ | 52,258 | $ | 44,568 | $ | 133,399 | $ | 148,737 | |||||||||
| Noninterest expense (GAAP) | $ | 117,702 | $ | 112,034 | $ | 125,228 | $ | 367,328 | $ | 330,139 | |||||||||
| Less: amortization of intangibles | 3,610 | 2,644 | 3,610 | 10,744 | 8,145 | ||||||||||||||
| Noninterest expense net of amortization (non-GAAP) | $ | 114,092 | $ | 109,390 | $ | 121,618 | $ | 356,584 | $ | 321,994 | |||||||||
| 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 | |||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| 2023 | 2023 | 2023 | 2022 | 2022 | ||||||||||||||||
| Net income (GAAP) | $ | 44,862 | $ | 41,716 | $ | 38,333 | $ | 46,685 | $ | 50,169 | ||||||||||
| Adjustments | ||||||||||||||||||||
| Plus: Acquisition-related expenses, net of tax | 458 | 2,457 | 4,803 | 320 | 610 | |||||||||||||||
| Plus: Initial provision for acquired loans, net of tax | - | - | 3,166 | - | - | |||||||||||||||
| Less: Gain on sale of equity investments, net of noncontrolling interest and tax | (438 | ) | (5,513 | ) | - | - | - | |||||||||||||
| Core operating earnings, excluding certain items affecting comparability (non-GAAP) | $ | 44,882 | $ | 38,660 | $ | 46,302 | $ | 47,005 | $ | 50,779 | ||||||||||
| Weighted average diluted shares | 74,765,515 | 74,699,810 | 74,390,614 | 72,724,189 | 72,594,474 | |||||||||||||||
| Diluted EPS (GAAP) | $ | 0.60 | $ | 0.56 | $ | 0.52 | $ | 0.64 | $ | 0.69 | ||||||||||
| Diluted EPS, excluding certain items affecting comparability (non-GAAP) | $ | 0.60 | $ | 0.52 | $ | 0.62 | $ | 0.65 | $ | 0.70 | ||||||||||
| Average assets | $ | 16,762,859 | $ | 16,826,965 | $ | 16,349,040 | $ | 15,929,756 | $ | 16,304,294 | ||||||||||
| Average tangible equity | $ | 1,460,024 | $ | 1,447,955 | 1,424,030 | $ | 1,352,891 | $ | 1,374,574 | |||||||||||
| Average common tangible equity | $ | 1,443,453 | $ | 1,432,506 | $ | 1,409,091 | $ | 1,336,356 | $ | 1,357,845 | ||||||||||
| Return on average assets, excluding certain items affecting comparability (non-GAAP) | 1.06 | % | 0.92 | % | 1.15 | % | 1.17 | % | 1.24 | % | ||||||||||
| Return on average tangible equity, excluding certain items affecting comparability (non-GAAP) | 12.97 | % | 11.50 | % | 13.98 | % | 14.36 | % | 15.26 | % | ||||||||||
| Return on average common tangible equity, excluding certain items affecting comparability (non-GAAP) | 13.12 | % | 11.62 | % | 14.13 | % | 14.54 | % | 15.45 | % | ||||||||||
| Efficiency ratio, excluding certain items affecting comparability (non-GAAP) | 67.76 | % | 67.32 | % | 64.32 | % | 63.20 | % | 62.16 | % | ||||||||||
| 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 | Nine Months Ended | |||||||
| September 30, | September 30, | |||||||
| 2023 | 2022 | |||||||
| Net income (GAAP) | $ | 124,911 | $ | 142,302 | ||||
| Adjustments | ||||||||
| Plus: Acquisition-related expenses, net of tax | 7,718 | 705 | ||||||
| Plus: Initial provision for acquired loans, net of tax | 3,166 | - | ||||||
| Less: Gain on sale of equity investments, net of noncontrolling interest and tax | (5,951 | ) | - | |||||
| Total charges, net of taxes | 4,933 | 705 | ||||||
| Core operating earnings, excluding certain items affecting comparability (non-GAAP) | $ | 129,844 | $ | 143,007 | ||||
| Weighted average diluted shares | 74,618,743 | 72,567,596 | ||||||
| Diluted EPS (GAAP) | $ | 1.67 | $ | 1.96 | ||||
| Diluted EPS, excluding certain items affecting comparability (non-GAAP) | $ | 1.74 | $ | 1.96 | ||||
| Average assets | $ | 16,647,804 | $ | 16,382,006 | ||||
| Average tangible equity | $ | 1,444,135 | $ | 1,380,940 | ||||
| Average tangible common equity | $ | 1,428,475 | $ | 1,364,397 | ||||
| Return on average assets, excluding certain items affecting comparability (non-GAAP) | 1.04 | % | 1.17 | % | ||||
| Return on average tangible equity, excluding certain items affecting comparability (non-GAAP) | 12.81 | % | 14.47 | % | ||||
| Return on average common tangible equity, excluding certain items affecting comparability (non-GAAP) | 12.95 | % | 14.64 | % | ||||
| Efficiency ratio, excluding certain items affecting comparability (non-GAAP) | 67.61 | % | 64.39 | % | ||||
