• TowneBank Reports Second Quarter 2024 Earnings

    来源: Nasdaq GlobeNewswire / 24 7月 2024 15:30:02   America/Chicago

    SUFFOLK, Va., July 24, 2024 (GLOBE NEWSWIRE) -- TowneBank (the "Company" or "Towne") (NASDAQ: TOWN) today reported earnings for the quarter ended June 30, 2024 of $42.86 million, or $0.57 per diluted share, compared to $41.72 million, or $0.56 per diluted share, for the quarter ended June 30, 2023. Excluding certain items affecting comparability, core earnings (non-GAAP) were $42.56 million, or $0.57 per diluted share, in the current quarter, an increase of 10.10% compared to $38.66 million, or $0.52 per diluted share, for the quarter ended June 30, 2023.

    "TowneBank delivered another solid quarter of performance, reflective of the strength of our diversified operating model and conservative approach to balance sheet management. It was encouraging to report quarterly sequential growth in tax-equivalent net interest margin and noninterest-bearing demand deposit balances for the first time since 2022 signaling momentum heading into the back half of the year. Lastly, our strategy of continuing to expand our noninterest income sources, resulted in one of the strongest quarters we have seen in recent years. On a personal note, I am grateful for the contributions of our entire TowneBank family as we celebrated our 25th anniversary of Serving Others and Enriching Lives," said G. Robert Aston, Jr., Executive Chairman.

    Highlights for Second Quarter 2024:

    • Total revenues were $174.97 million, a decrease of $6.60 million, or 3.63%, compared to second quarter 2023. Net interest income declined $4.56 million, driven by the impact of higher rates on deposit costs and continued migration to higher yielding deposit products. Additionally, noninterest income decreased $2.04 million due to a second quarter 2023 gain of $8.83 million related to the sale of BHHS Towne Realty.
    • Total deposits were $14.27 billion, an increase of $505.93 million, or 3.68%, compared to second quarter 2023. Total deposits increased 1.04%, or $146.51 million, in comparison to March 31, 2024, 4.17% on an annualized basis.
    • Noninterest-bearing deposits decreased 9.87%, to $4.30 billion, compared to second quarter 2023 and represented 30.15% of total deposits. Compared to the linked quarter, noninterest-bearing deposits increased 2.61%, or 10.51% on an annualized basis. This represents the first quarterly sequential increase in noninterest-bearing deposits since June 2022.
    • Loans held for investment were $11.45 billion, an increase of $243.73 million, or 2.17%, compared to June 30, 2023, and a decrease of $0.60 million, or 0.01%, compared to March 31, 2024.
    • Annualized return on common shareholders' equity was 8.49% compared to 8.52% in second quarter 2023. Annualized return on average tangible common shareholders' equity (non-GAAP) was 12.16% compared to 12.48% in second quarter 2023.
    • Net interest margin was 2.86% for the quarter and tax-equivalent net interest margin (non-GAAP) was 2.89%, including purchase accounting accretion of 5 basis points, compared to the prior year quarter net interest margin of 2.98% and tax-equivalent net interest margin (non-GAAP) of 3.01%, including purchase accounting accretion of 4 basis points.
    • Net interest margin increased 14 bp and spread increased 13 bp, compared to the linked quarter.
    • The effective tax rate was 15.93% in the quarter compared to 18.41% in second quarter 2023 and 17.31% in the linked quarter. The lower tax rate in the current quarter was due to increases in tax-advantaged income investments and investments in Low Income Housing Tax Credits.

    "Importantly, we continued to report strong asset quality metrics and healthy capital levels reflective of our conservative approach to Main Street banking. We continuously evaluate investments in people, process and technologies to help improve efficiencies across all lines of business," stated William I. Foster III, President and Chief Executive Officer.

    Quarterly Net Interest Income:

    • Net interest income was $109.05 million compared to $113.61 million for the quarter ended June 30, 2023. The decrease was driven by increased deposit costs, partially offset by higher yields on earning assets.
    • On an average basis, loans held for investment, with a yield of 5.45%, represented 74.76% of earning assets at June 30, 2024 compared to a yield of 5.00% and 73.24% of earning assets in the second quarter of 2023.
    • The cost of interest-bearing deposits was 3.32% for the quarter ended June 30, 2024, compared to 2.28% in second quarter 2023. Interest expense on deposits increased $33.35 million, or 68.53%, over the prior year quarter driven by the increase in rate.
    • Our total cost of deposits increased to 2.32% from 1.46% for the quarter ended June 30, 2023 due to higher interest-bearing deposit balances coupled with higher rates.
    • Average interest-earning assets totaled $15.34 billion at June 30, 2024 compared to $15.31 billion at June 30, 2023, an increase of 0.26%.   The Company anticipates approximately $495 million of cash flows from its securities portfolio to be available for reinvestment in the next two years.
    • Average interest-bearing liabilities totaled $10.29 billion, an increase of $0.61 billion, or 6.27%, from prior year, primarily related to deposit growth. Average short term FHLB borrowings were $65.93 million during the quarter compared to $802.75 million one year prior.

    Quarterly Provision for Credit Losses:

    • The quarterly provision for credit losses was a benefit of $177 thousand compared to an expense of $3.56 million in the prior year quarter and a benefit of $0.88 million in the linked quarter.
    • The allowance for credit losses on loans decreased $283 thousand in second quarter 2024, compared to the linked quarter. The decrease in the allowance was driven by net recoveries during the quarter, continued strength in credit quality, and a continuation of improvements in macroeconomic forecast scenarios utilized in our model.  
    • Net loan recoveries were $19 thousand in the quarter compared to net charge-offs of $9 thousand in the prior year quarter and $520 thousand in the linked quarter.
    • The ratio of net charge-offs to average loans on an annualized basis was 0.00% in second quarter 2024 and 2023, compared to 0.02% in the linked quarter.
    • The allowance for credit losses on loans represented 1.10% of total loans at each of June 30, 2024, June 30, 2023, and March 31, 2024. The allowance for credit losses on loans was 19.08 times nonperforming loans compared to 18.09 times at June 30, 2023 and 18.01 times at March 31, 2024.

    Quarterly Noninterest Income:

    • Total noninterest income was $65.92 million compared to $67.96 million in 2023, a decrease of $2.04 million, or 2.99%. Excluding a gain of $8.83 million on the sale of BHHS TowneRealty in second quarter 2023, total noninterest income increased $6.80 million compared to second quarter 2023, or 11.50%.
    • Residential mortgage banking income was $13.42 million compared to $11.36 million in second quarter 2023. Loan volume increased to $0.63 billion in second quarter 2024 from $0.62 billion in second quarter 2023. The number of loans originated was lower than second quarter 2023, but higher per-loan average balances resulted in higher production volume.   Residential purchase activity comprised 94.85% of production volume in the second quarter of 2024 compared to 96.32% in the prior year quarter.
    • Gross margins on residential mortgage sales increased 32 basis points to 3.28% in the current quarter from 2.96% in second quarter 2023.
    • Total net insurance commissions increased $1.53 million, or 6.81%, to $24.03 million in second quarter 2024 compared to 2023. This increase was attributable to increases in property and casualty commissions, which were driven by organic growth.
    • Property management fee revenue increased 18.30%, or $2.21 million, to $14.31 million in second quarter 2024 compared to 2023. Reservation income increased compared to the prior year due to an acquisition in March 2024.

    Quarterly Noninterest Expense:

    • Total noninterest expense was $123.98 million compared to $125.23 million in 2023, a decrease of $1.24 million, or 0.99%. Decreases in FDIC and other insurance of $1.57 million, acquisition expenses of $2.98 million, and various expense line items were partially offset by an increase in salaries and employee benefits of $3.90 million, software expense of $0.89 million, and data processing expense of $0.60 million.
    • Salaries and benefits expense increases were driven by annual base salary adjustments effective third quarter 2023, production incentives, and higher health insurance costs.
    • Software increased due to higher core system costs while data processing increased due to seasonal merchant fee increases and core conversion expenses in our property management line of business.

    Consolidated Balance Sheet Highlights:

    • Management is focused on strategic balance sheet management with a concentration on controlled loan growth and maintaining strong levels of liquidity.
    • Total assets were $17.07 billion for the quarter ended June 30, 2024, a $184.61 million increase compared to $16.88 billion at March 31, 2024. Total assets decreased $156.23 million, or 0.91%, from $17.23 billion at June 30, 2023.
    • Loans held for investment increased $243.73 million, or 2.17%, compared to prior year but declined $0.60 million, or 0.01%, compared to the linked quarter.
    • Mortgage loans held for sale decreased $28.74 million, or 12.52%, compared to prior year but increased $50.04 million, or 33.20%, compared to the linked quarter.
    • Total deposits increased $505.93 million, or 3.68%, primarily in interest-bearing demand and time deposits, compared to prior year. In the linked quarter comparison, total deposits increased $146.51 million, or 4.17% on an annualized basis.
    • Noninterest-bearing deposits decreased $471.06 million or 9.87%, compared to prior year, but increased $109.64 million, or 2.61%, compared to the linked quarter. This linked quarter increase is the first quarter-end increase in balances since June 30, 2022.
    • Total borrowings decreased $764.41 million, or 72.14%, compared to second quarter 2023 and increased $4.19 million, or 1.44%, compared to the linked quarter. Short-term FHLB advances decreased in the current quarter compared to both the prior year quarter and the linked quarter.

    Investment Securities:

    • Total investment securities were $2.49 billion compared to $2.54 billion at March 31, 2024 and $2.61 billion at June 30, 2023. The weighted average duration of the portfolio at June 30, 2024 was 3.4 years. The carrying value of the available for sale debt securities portfolio included net unrealized losses of $172.93 million at June 30, 2024, compared to $170.84 million at March 31, 2024 and $195.98 million at June 30, 2023, with the changes related to market valuation adjustments due to changing interest rates.

    Loans and Asset Quality:

    • Total loans held for investment were $11.45 billion at both June 30, 2024 and March 31, 2024, and $11.21 billion at June 30, 2023.
    • Nonperforming assets were $7.16 million, or 0.04% of total assets, compared to $9.35 million, or 0.05%, at June 30, 2023, and $7.77 million, or 0.05%, in the linked quarter end.
    • Nonperforming loans were 0.06% of period end loans at June 30, 2024, June 30, 2023, and the linked quarter end.
    • Foreclosed property decreased to $581 thousand from $738 thousand at June 30, 2023.  

    Deposits and Borrowings:

    • Total deposits were $14.27 billion compared to $14.13 billion at March 31, 2024 and $13.77 billion at June 30, 2023.
    • The ratio of period end loans held for investment to deposits was 80.24% compared to 81.07% at March 31, 2024 and 81.41% at June 30, 2023.
    • Noninterest-bearing deposits were 30.15% of total deposits at June 30, 2024 compared to 29.69% at March 31, 2024 and 34.68% at June 30, 2023. Noninterest-bearing deposits declined $471.06 million, or 9.87%, compared to June 30, 2023, but increased 109.64 million, or 2.61%, compared to the linked quarter.
    • Total borrowings were $295.17 million compared to $290.98 million at March 31, 2024 and $1.06 billion at June 30, 2023.

    Capital:

    • Common equity tier 1 capital ratio of 12.43%(1).
    • Tier 1 leverage capital ratio of 10.25%(1).
    • Tier 1 risk-based capital ratio of 12.55%(1).
    • Total risk-based capital ratio of 15.34% (1) .
    • Book value per common share was $27.62 compared to $27.33 at March 31, 2024 and $26.36 at June 30, 2023.
    • Tangible book value per common share (non-GAAP) was $20.65 compared to $20.31 at March 31, 2024 and $19.31 at June 30, 2023.

    (1) Preliminary.

    About TowneBank:
    Founded in 1999, TowneBank is a company built on relationships, offering a full range of banking and other financial services, with a focus of serving others and enriching lives. Dedicated to a culture of caring, Towne values all employees and members by embracing their diverse talents, perspectives, and experiences.

    Now celebrating 25 years, TowneBank operates 50 banking offices throughout Hampton Roads and Central Virginia, as well as Northeastern and Central North Carolina – serving as a local leader in promoting the social, cultural, and economic growth in each community. Towne offers a competitive array of business and personal banking solutions, delivered with only the highest ethical standards. Experienced local bankers providing a higher level of expertise and personal attention with local decision-making are key to the TowneBank strategy. TowneBank has grown its capabilities beyond banking to provide expertise through its affiliated companies that include Towne Wealth Management, Towne Insurance Agency, Towne Benefits, TowneBank Mortgage, TowneBank Commercial Mortgage, Berkshire Hathaway HomeServices RW Towne Realty, Towne 1031 Exchange, LLC, and Towne Vacations. With total assets of $17.07 billion as of June 30, 2024, TowneBank is one of the largest banks headquartered in Virginia.

    Non-GAAP Financial Measures:
    This press release contains certain financial measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Such non-GAAP financial measures include the following: fully tax-equivalent net interest margin, core operating earnings, core net income, tangible book value per common share, total risk-based capital ratio, tier one leverage ratio, tier one capital ratio, and the tangible common equity to tangible assets ratio. Management uses these non-GAAP financial measures to assess the performance of TowneBank’s core business and the strength of its capital position. Management believes that these non-GAAP financial measures provide meaningful additional information about TowneBank to assist investors in evaluating operating results, financial strength, and capitalization. The non-GAAP financial measures should be considered as additional views of the way our financial measures are affected by significant charges for credit costs and other factors. These non-GAAP financial measures should not be considered as a substitute for operating results determined in accordance with GAAP and may not be comparable to other similarly titled measures of other companies. The computations of the non-GAAP financial measures used in this presentation are referenced in a footnote or in the appendix to this presentation.

    Forward-Looking Statements:
    This press release contains certain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts, but instead represent only the beliefs, expectations, or opinions of TowneBank and its management regarding future events, many of which, by their nature, are inherently uncertain. Forward-looking statements may be identified by the use of such words as: "believe," "expect," "anticipate," "intend," "plan,” "estimate," or words of similar meaning, or future or conditional terms, such as "will," "would," "should," "could," "may," "likely," "probably," or "possibly." These statements may address issues that involve significant risks, uncertainties, estimates, and assumptions made by management. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include among others, competitive pressures in the banking industry that may increase significantly; changes in the interest rate environment that may reduce margins and/or the volumes and values of loans made or held as well as the value of other financial assets held; an unforeseen outflow of cash or deposits or an inability to access the capital markets, which could jeopardize our overall liquidity or capitalization; changes in the creditworthiness of customers and the possible impairment of the collectability of loans; insufficiency of our allowance for credit losses due to market conditions, inflation, changing interest rates or other factors; adverse developments in the financial industry generally, such as the recent bank failures, responsive measures to mitigate and manage such developments, related supervisory and regulatory actions and costs, and related impacts on customer and client behavior; general economic conditions, either nationally or regionally, that may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and/or a reduced demand for credit or other services; geopolitical instability, including wars, conflicts, civil unrest, and terrorist attacks and the potential impact, directly or indirectly, on our business; the effects of weather-related or natural disasters, which may negatively affect our operations and/or our loan portfolio and increase our cost of conducting business; public health events (such as the COVID-19 pandemic) and governmental and societal responses to them; changes in the legislative or regulatory environment, including changes in accounting standards and tax laws, that may adversely affect our business; costs or difficulties related to the integration of the businesses we have acquired may be greater than expected; expected cost savings associated with pending or recently completed acquisitions may not be fully realized or realized within the expected time frame; cybersecurity threats or attacks, whether directed at us or at vendors or other third parties with which we interact, the implementation of new technologies, and the ability to develop and maintain reliable electronic systems; our competitors may have greater financial resources and develop products that enable them to compete more successfully; changes in business conditions; changes in the securities market; and changes in our local economy with regard to our market area. Any forward-looking statements made by us or on our behalf speak only as of the date they are made or as of the date indicated, and we do not undertake any obligation to update forward-looking statements as a result of new information, future events, or otherwise. For additional information on factors that could materially influence forward-looking statements included in this report, see the "Risk Factors" in TowneBank’s Annual Report on Form 10-K for the year ended December 31, 2023, and related disclosures in other filings that have been, or will be, filed by TowneBank with the Federal Deposit Insurance Corporation.

    Media contact:
    G. Robert Aston, Jr., Executive Chairman, 757-638-6780
    William I. Foster III, President and Chief Executive Officer, 757-417-6482

    Investor contact:
    William B. Littreal, Chief Financial Officer, 757-638-6813

    TOWNEBANK
    Selected Financial Highlights (unaudited)
    (dollars in thousands, except per share data)
       
      Three Months Ended
      June 30, March 31, December 31, September 30, June 30,
      2024   2024   2023   2023   2023 
    Income and Performance Ratios:         
     Total revenue$174,970  $167,102  $155,546  $172,864  $181,568 
     Net income 43,039   35,127   28,545   44,745   43,368 
     Net income available to common shareholders 42,856   34,687   28,804   44,862   41,716 
     Net income per common share - diluted 0.57   0.46   0.39   0.60   0.56 
     Book value per common share 27.62   27.33   27.24   26.28   26.36 
     Book value per common share - tangible(non-GAAP) 20.65   20.31   20.28   19.28   19.31 
     Return on average assets 1.01%  0.83%  0.68%  1.06%  0.99%
     Return on average assets - tangible(non-GAAP) 1.11%  0.92%  0.77%  1.17%  1.10%
     Return on average equity 8.43%  6.84%  5.75%  8.96%  8.46%
     Return on average equity - tangible(non-GAAP) 12.03%  9.87%  8.53%  12.97%  12.35%
     Return on average common equity 8.49%  6.89%  5.79%  9.04%  8.52%
     Return on average common equity - tangible(non-GAAP) 12.16%  9.98%  8.62%  13.11%  12.48%
     Noninterest income as a percentage of total revenue 37.68%  38.23%  30.74%  34.60%  37.43%
    Regulatory Capital Ratios (1):         
     Common equity tier 1 12.43%  12.20%  12.18%  12.19%  11.99%
     Tier 1 12.55%  12.32%  12.29%  12.31%  12.11%
     Total 15.34%  15.10%  15.06%  15.09%  14.88%
     Tier 1 leverage ratio 10.25%  10.15%  10.17%  10.06%  9.85%
    Asset Quality:         
     Allowance for credit losses on loans to nonperforming loans19.08x 18.01x 18.48x 17.60x 18.09x
     Allowance for credit losses on loans to period end loans 1.10%  1.10%  1.12%  1.12%  1.10%
     Nonperforming loans to period end loans 0.06%  0.06%  0.06%  0.06%  0.06%
     Nonperforming assets to period end assets 0.04%  0.05%  0.05%  0.05%  0.05%
     Net charge-offs (recoveries) to average loans (annualized) —%  0.02%  —% (0.04)%  —%
     Net charge-offs (recoveries)$(19) $520  $68  $(1,074) $9 
               
     Nonperforming loans$6,582  $6,987  $6,843  $7,110  $6,827 
     Former bank premises —   —   —   —   1,782 
     Foreclosed property 581   780   908   766   738 
     Total nonperforming assets$7,163  $7,767  $7,751  $7,876  $9,347 
     Loans past due 90 days and still accruing interest$368  $323  $735  $970  $360 
     Allowance for credit losses on loans$125,552  $125,835  $126,461  $125,159  $123,513 
    Mortgage Banking:         
     Loans originated, mortgage$430,398  $289,191  $302,616  $348,387  $409,050 
     Loans originated, joint venture 196,583   135,197   126,332   172,021   207,450 
     Total loans originated$626,981  $424,388  $428,948  $520,408  $616,500 
     Number of loans originated 1,700   1,247   1,237   1,487   1,715 
     Number of originators 169   176   181   192   196 
     Purchase % 94.85%  95.66%  95.06%  95.96%  96.32%
     Loans sold$605,134  $410,895  $468,014  $567,291  $525,078 
     Rate lock asset$1,930  $1,681  $895  $1,348  $1,551 
     Gross realized gain on sales and fees as a % of loans originated 3.28%  3.34%  3.06%  3.17%  2.96%
    Other Ratios:         
     Net interest margin 2.86%  2.72%  2.83%  2.95%  2.98%
     Net interest margin-fully tax-equivalent(non-GAAP) 2.89%  2.75%  2.86%  2.98%  3.01%
     Average earning assets/total average assets 90.36%  90.52%  90.48%  90.73%  90.96%
     Average loans/average deposits 80.80%  81.48%  80.72%  80.75%  83.72%
     Average noninterest deposits/total average deposits 30.06%  30.25%  31.69%  33.50%  36.07%
     Period end equity/period end total assets 12.24%  12.24%  12.21%  11.90%  11.56%
     Efficiency ratio(non-GAAP) 68.98%  73.25%  76.17%  66.21%  70.41%
     (1) Current reporting period regulatory capital ratios are preliminary.      
            


    TOWNEBANK
    Selected Data (unaudited)
    (dollars in thousands)
     
    Investment Securities      % Change
     Q2 Q2 Q1 Q2 24 vs. Q2 24 vs.
    Available-for-sale securities, at fair value 2024   2023   2024  Q2 23 Q1 24
    U.S. agency securities$281,934  $318,354  $294,723  (11.44)% (4.34)%
    U.S. Treasury notes 27,701   26,874   27,534  3.08% 0.61%
    Municipal securities 442,474   503,792   447,323  (12.17)% (1.08)%
    Trust preferred and other corporate securities 88,228   71,116   87,983  24.06% 0.28%
    Mortgage-backed securities issued by GSEs and GNMA 1,411,883   1,086,947   1,347,920  29.89% 4.75%
    Allowance for credit losses (1,541)  (1,232)  (1,382) 25.08% 11.51%
    Total$2,250,679  $2,005,851  $2,204,101  12.21% 2.11%
    Gross unrealized gains (losses) reflected in financial statements      
    Total gross unrealized gains$1,983  $975  $1,868  103.38% 6.16%
    Total gross unrealized losses (174,911)  (196,954)  (172,708) (11.19)% 1.28%
    Net unrealized gains (losses) and other adjustments on AFS securities$(172,928) $(195,979) $(170,840) (11.76)% 1.22%
    Held-to-maturity securities, at amortized cost         
    U.S. agency securities$102,234  $101,469  $102,042  0.75% 0.19%
    U.S. Treasury notes 97,171   433,298   197,356  (77.57)% (50.76)%
    Municipal securities 5,318   5,226   5,294  1.76% 0.45%
    Trust preferred corporate securities 2,147   2,198   2,159  (2.32)% (0.56)%
    Mortgage-backed securities issued by GSEs 5,618   5,826   5,659  (3.57)% (0.72)%
    Allowance for credit losses (79)  (87)  (82) (9.20)% (3.66)%
    Total$212,409  $547,930  $312,428  (61.23)% (32.01)%
              
    Total gross unrealized gains$175  $272  $265  (35.66)% (33.96)%
    Total gross unrealized losses (12,880)  (25,914)  (14,262) (50.30)% (9.69)%
    Net unrealized gains (losses) in HTM securities$(12,705) $(25,642) $(13,997) (50.45)% (9.23)%
    Total unrealized gains (losses) on AFS and HTM securities$(185,633) $(221,621) $(184,837) (16.24)% 0.43%
           % Change
    Loans Held For InvestmentQ2 Q2 Q1 Q2 24 vs. Q2 24 vs.
      2024   2023   2024  Q2 23 Q1 24
    Real estate - construction and development$1,190,768  $1,364,575  $1,255,741  (12.74)% (5.17)%
    Commercial real estate - owner occupied 1,673,582   1,687,261   1,700,753  (0.81)% (1.60)%
    Commercial real estate - non owner occupied 3,155,958   3,034,548   3,178,947  4.00% (0.72)%
    Real estate - multifamily 682,537   520,464   595,075  31.14% 14.70%
    Residential 1-4 family 1,887,420   1,790,225   1,882,296  5.43% 0.27%
    HELOC 408,273   380,501   386,361  7.30% 5.67%
    Commercial and industrial business (C&I) 1,297,538   1,259,743   1,291,201  3.00% 0.49%
    Government 517,954   520,994   528,341  (0.58)% (1.97)%
    Indirect 558,216   562,161   555,482  (0.70)% 0.49%
    Consumer loans and other 79,501   87,542   78,146  (9.19) % 1.73%
    Total$11,451,747  $11,208,014  $11,452,343  2.17% (0.01)%
              
           % Change
    DepositsQ2 Q2 Q1 Q2 24 vs. Q2 24 vs.
      2024   2023   2024  Q2 23 Q1 24
    Noninterest-bearing demand$4,303,773  $4,774,830  $4,194,132  (9.87)% 2.61%
    Interest-bearing:         
    Demand and money market accounts 6,940,086   6,529,336   6,916,701  6.29% 0.34%
    Savings 312,881   361,891   326,179  (13.54)% (4.08)%
    Certificates of deposits 2,715,848   2,100,604   2,689,062  29.29% 1.00%
    Total 14,272,588   13,766,661   14,126,074  3.68% 1.04%
                      


    TOWNEBANK
    Average Balances, Yields and Rate Paid (unaudited)
    (dollars in thousands)
     
     Three Months Ended Three Months Ended Three Months Ended
     June 30, 2024 March 31, 2024 June 30, 2023
       Interest Average   Interest Average   Interest Average
     Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/
     Balance Expense Rate (1) Balance Expense Rate (1) Balance Expense Rate (1)
    Assets:                 
    Loans (net of unearned income
    and deferred costs)    		$11,471,669  $155,374  5.45% $11,379,323  $151,811  5.37% $11,209,641  $139,814  5.00%
    Taxable investment securities 2,368,476   21,671  3.66%  2,440,652   18,716  3.07%  2,450,393   17,195  2.81%
    Tax-exempt investment securities 156,503   1,521  3.89%  161,538   1,549  3.84%  209,728   2,003  3.82%
    Total securities 2,524,979   23,192  3.67%  2,602,190   20,265  3.12%  2,660,121   19,198  2.89%
    Interest-bearing deposits 1,182,816   14,512  4.93%  1,167,322   14,234  4.90%  1,262,692   14,488  4.60%
    Mortgage loans held for sale 165,392   2,945  7.12%  116,868   1,716  5.87%  172,679   2,547  5.90%
    Total earning assets 15,344,856   196,023  5.14%  15,265,703   188,026  4.95%  15,305,133   176,047  4.61%
    Less: allowance for loan losses (126,792)      (127,413)      (121,140)    
    Total nonearning assets 1,764,418       1,725,945       1,642,972     
    Total assets$16,982,482      $16,864,235      $16,826,965     
    Liabilities and Equity:                 
    Interest-bearing deposits                 
    Demand and money market$6,896,176  $48,161  2.81% $6,828,053  $47,985  2.83% $6,220,394  $32,058  2.07%
    Savings 317,774   845  1.07%  329,036   881  1.08%  371,455   895  0.97%
    Certificates of deposit 2,715,615   33,017  4.89%  2,583,938   29,522  4.60%  1,968,623   15,718  3.20%
    Total interest-bearing deposits 9,929,565   82,023  3.32%  9,741,027   78,388  3.24%  8,560,472   48,671  2.28%
    Borrowings 100,165   1,627  6.43%  212,375   3,078  5.73%  863,255   10,345  4.74%
    Subordinated debt, net 256,093   2,236  3.49%  255,878   2,236  3.50%  255,264   2,236  3.50%
    Total interest-bearing liabilities 10,285,823   85,886  3.36%  10,209,280   83,702  3.30%  9,678,991   61,252  2.54%
    Demand deposits 4,267,590       4,224,104       4,829,395     
    Other noninterest-bearing liabilities 383,447       390,576       339,966     
    Total liabilities 14,936,860       14,823,960       14,848,352     
    Shareholders’ equity 2,045,622       2,040,275       1,978,613     
    Total liabilities and equity$16,982,482      $16,864,235      $16,826,965     
    Net interest income (tax-equivalent basis) (4)  $110,137      $104,324      $114,795   
    Reconciliation of Non-GAAP Financial Measures                
    Tax-equivalent basis adjustment   (1,089)      (1,106)      (1,184)  
    Net interest income (GAAP)  $109,048      $103,218      $113,611   
                      
    Interest rate spread (2)(4)    1.78%     1.65%     2.07%
    Interest expense as a percent of average earning assets   2.25%     2.21%     1.61%
    Net interest margin (tax-equivalent basis) (3)(4)   2.89%     2.75%     3.01%
    Total cost of deposits    2.32%     2.26%     1.46%
                      


    (1)Yields and interest income are presented on a tax-equivalent basis using the federal statutory tax rate of 21%.
    (2)Interest spread is the average yield earned on earning assets less the average rate paid on interest-bearing liabilities. Fully tax-equivalent.
    (3)Net interest margin is net interest income expressed as a percentage of average earning assets. Fully tax-equivalent.
    (4)Non-GAAP.
      


    TOWNEBANK
    Average Balances, Yields and Rate Paid (unaudited)
    (dollars in thousands)
     
     Six Months Ended Six Months Ended
     June 30, 2024 June 30, 2023
       Interest Average   Interest Average
     Average  Income/ Yield/ Average  Income/ Yield/
     Balance Expense Rate (1) Balance Expense Rate (1)
    Assets:           
    Loans (net of unearned income and deferred costs)$11,425,496  $307,186  5.41% $11,153,944  $273,349  4.94%
    Taxable investment securities 2,404,564   40,385  3.36%  2,444,474   34,011  2.78%
    Tax-exempt investment securities 159,021   3,071  3.86%  198,940   3,891  3.91%
    Total securities 2,563,585   43,456  3.39%  2,643,414   37,902  2.87%
    Interest-bearing deposits 1,175,069   28,746  4.92%  1,154,218   25,137  4.39%
    Mortgage loans held for sale 141,130   4,661  6.61%  139,035   4,151  5.97%
    Total earning assets 15,305,280   384,049  5.05%  15,090,611   340,539  4.55%
    Less: allowance for loan losses (127,102)      (117,812)    
    Total nonearning assets 1,745,180       1,616,524     
    Total assets$16,923,358      $16,589,323     
    Liabilities and Equity:           
    Interest-bearing deposits           
    Demand and money market$6,862,115  $96,146  2.82% $6,219,081  $55,360  1.80%
    Savings 323,405   1,726  1.07%  386,532   1,739  0.91%
    Certificates of deposit 2,649,777   62,539  4.75%  1,826,777   25,506  2.82%
    Total interest-bearing deposits 9,835,297   160,411  3.28%  8,432,390   82,605  1.98%
    Borrowings 156,270   4,705  5.95%  610,946   14,261  4.64%
    Subordinated debt, net 255,986   4,472  3.49%  252,679   4,405  3.49%
    Total interest-bearing liabilities 10,247,553   169,588  3.33%  9,296,015   101,271  2.20%
    Demand deposits 4,245,847       4,995,980     
    Other noninterest-bearing liabilities 387,010       334,930     
    Total liabilities 14,880,410       14,626,925     
    Shareholders’ equity 2,042,948       1,962,398     
    Total liabilities and equity$16,923,358      $16,589,323     
    Net interest income (tax-equivalent basis)(4)  $214,461      $239,268   
    Reconciliation of Non-GAAP Financial Measures          
    Tax-equivalent basis adjustment   (2,195)      (2,280)  
    Net interest income (GAAP)  $212,266      $236,988   
                
    Interest rate spread (2)(4)    1.72%     2.35%
    Interest expense as a percent of average earning assets   2.23%     1.35%
    Net interest margin (tax-equivalent basis) (3)(4)   2.82%     3.20%
    Total cost of deposits    2.29%     1.24%
                
    (1) Yields and interest income are presented on a tax-equivalent basis using the federal statutory rate of 21%.
    (2) Interest spread is the average yield earned on earning assets less the average rate paid on interest-bearing liabilities. Fully tax-equivalent.
    (3) Net interest margin is net interest income expressed as a percentage of average earning assets. Fully tax-equivalent.
    (4) Non-GAAP.


    TOWNEBANK
    Consolidated Balance Sheets
    (dollars in thousands, except share data)
      
       
     June 30, December 31,
      2024   2023 
     (unaudited) (audited)
    ASSETS   
    Cash and due from banks$140,028  $85,584 
    Interest-bearing deposits at FRB - Richmond 1,062,115   939,356 
    Federal funds sold and interest-bearing deposits in financial institutions 99,303   103,417 
    Total Cash and Cash Equivalents 1,301,446   1,128,357 
    Securities available for sale, at fair value (amortized cost of $2,425,148 and $2,292,963, and allowance for credit losses of $1,541 and $1,498 at June 30, 2024 and December 31, 2023, respectively) 2,250,679   2,129,342 
    Securities held to maturity, at amortized cost (fair value $199,783 and $462,656 at June 30, 2024 and December 31, 2023, respectively) 212,488   477,592 
    Less: Allowance for credit losses (79)  (84)
    Securities held to maturity, net of allowance for credit losses 212,409   477,508 
    Other equity securities 13,566   13,792 
    FHLB stock 12,134   21,372 
    Total Securities 2,488,788   2,642,014 
    Mortgage loans held for sale 200,762   149,987 
    Loans, net of unearned income and deferred costs 11,451,747   11,329,021 
    Less: allowance for credit losses (125,552)  (126,461)
    Net Loans 11,326,195   11,202,560 
    Premises and equipment, net 340,348   337,598 
    Goodwill 457,619   456,335 
    Other intangible assets, net 65,460   64,634 
    BOLI 277,434   277,445 
    Other assets 610,791   576,109 
    TOTAL ASSETS$17,068,843  $16,835,039 
        
    LIABILITIES AND EQUITY   
    Deposits:   
    Noninterest-bearing demand$4,303,773  $4,342,701 
    Interest-bearing:   
    Demand and money market accounts 6,940,086   6,757,619 
    Savings 312,881   336,492 
    Certificates of deposit 2,715,848   2,456,394 
    Total Deposits 14,272,588   13,893,206 
    Advances from the FHLB 3,591   203,958 
    Subordinated debt, net 256,227   255,796 
    Repurchase agreements and other borrowings 35,351   32,826 
    Total Borrowings 295,169   492,580 
    Other liabilities 411,770   393,375 
    TOTAL LIABILITIES 14,979,527   14,779,161 
    Preferred stock, authorized and unissued shares - 2,000,000 —   — 
    Common stock, $1.667 par value: 150,000,000 shares authorized;   
    75,039,089 and 74,893,462 shares issued at   
    June 30, 2024 and December 31, 2023, respectively 125,090   124,847 
    Capital surplus 1,115,759   1,112,761 
    Retained earnings 961,162   921,126 
    Common stock issued to deferred compensation trust, at cost   
    1,076,483 and 1,004,717 shares at June 30, 2024 and December 31, 2023, respectively (22,756)  (20,813)
    Deferred compensation trust 22,756   20,813 
    Accumulated other comprehensive income (loss) (129,224)  (118,762)
    TOTAL SHAREHOLDERS’ EQUITY 2,072,787   2,039,972 
    Noncontrolling interest 16,529   15,906 
    TOTAL EQUITY 2,089,316   2,055,878 
    TOTAL LIABILITIES AND EQUITY$17,068,843  $16,835,039 
     


    TOWNEBANK
    Consolidated Statements of Income (unaudited)
    (dollars in thousands, except per share data)
            
            
     Three Months Ended Six Months Ended
     June 30, June 30,
      2024   2023   2024   2023 
    INTEREST INCOME:       
    Loans, including fees$154,549  $138,977  $305,523  $271,745 
    Investment securities 22,928   18,851   42,924   37,226 
    Interest-bearing deposits in financial institutions and federal funds sold 14,512   14,488   28,746   25,137 
    Mortgage loans held for sale 2,945   2,547   4,661   4,151 
    Total interest income 194,934   174,863   381,854   338,259 
    INTEREST EXPENSE:       
    Deposits 82,023   48,671   160,411   82,605 
    Advances from the FHLB 942   10,407   3,380   13,399 
    Subordinated debt, net 2,236   2,236   4,472   4,405 
    Repurchase agreements and other borrowings 685   (62)  1,325   862 
    Total interest expense 85,886   61,252   169,588   101,271 
    Net interest income 109,048   113,611   212,266   236,988 
    PROVISION FOR CREDIT LOSSES (177)  3,556   (1,054)  15,225 
    Net interest income after provision for credit losses 109,225   110,055   213,320   221,763 
    NONINTEREST INCOME:       
    Residential mortgage banking income, net 13,422   11,360   23,899   20,732 
    Insurance commissions and related income, net 24,031   22,498   49,570   45,321 
    Property management income, net 14,312   12,098   31,085   27,633 
    Real estate brokerage income, net —   1,834   —   3,625 
    Service charges on deposit accounts 3,353   3,015   6,431   5,754 
    Credit card merchant fees, net 1,662   1,682   3,213   3,226 
    Investment commission income, net 2,580   2,166   4,923   4,218 
    BOLI 3,238   1,710   5,080   3,383 
    Gain on sale of equity investment —   8,833   —   8,833 
    Other income 3,324   2,761   5,531   5,998 
    Net gain/(loss) on investment securities —   —   74   — 
    Total noninterest income 65,922   67,957   129,806   128,723 
    NONINTEREST EXPENSE:       
    Salaries and employee benefits 71,349   67,445   142,726   136,866 
    Occupancy 9,717   9,487   19,139   18,552 
    Furniture and equipment 4,634   4,389   9,112   8,633 
    Amortization - intangibles 3,298   3,610   6,544   7,134 
    Software 7,056   6,169   13,156   11,792 
    Data processing 4,606   4,011   8,522   7,364 
    Professional fees 3,788   3,166   6,968   6,178 
    Advertising and marketing 3,524   3,959   8,106   8,360 
    Other expenses 16,012   22,992   35,302   44,747 
    Total noninterest expense 123,984   125,228   249,575   249,626 
    Income before income tax expense and noncontrolling interest 51,163   52,784   93,551   100,860 
    Provision for income tax expense 8,124   9,416   15,385   19,014 
    Net income$43,039  $43,368  $78,166  $81,846 
    Net income attributable to noncontrolling interest (183)  (1,652)  (623)  (1,797)
    Net income attributable to TowneBank$42,856  $41,716  $77,543  $80,049 
    Per common share information       
    Basic earnings$0.57  $0.56  $1.04  $1.07 
    Diluted earnings$0.57  $0.56  $1.03  $1.07 
    Cash dividends declared$0.25  $0.25  $0.50  $0.48 
                    


    TOWNEBANK
    Consolidated Balance Sheets - Five Quarter Trend
    (dollars in thousands, except share data)
     
              
     June 30, March 31, December 31, September 30, June 30,
      2024   2024   2023   2023   2023 
     (unaudited) (unaudited) (audited) (unaudited) (unaudited)
    ASSETS         
    Cash and due from banks$140,028  $75,802  $85,584  $83,949  $106,994 
    Interest-bearing deposits at FRB - Richmond 1,062,115   926,635   939,356   1,029,276   1,427,044 
    Federal funds sold and interest-bearing deposits in financial institutions 99,303   98,673   103,417   102,527   102,231 
    Total Cash and Cash Equivalents 1,301,446   1,101,110   1,128,357   1,215,752   1,636,269 
    Securities available for sale 2,250,679   2,204,101   2,129,342   1,963,453   2,005,851 
    Securities held to maturity 212,488   312,510   477,592   547,854   548,017 
    Less: allowance for credit losses (79)  (82)  (84)  (85)  (87)
    Securities held to maturity, net of allowance for credit losses 212,409   312,428   477,508   547,769   547,930 
    Other equity securities 13,566   13,661   13,792   14,062   13,798 
    FHLB stock 12,134   12,139   21,372   16,634   40,454 
    Total Securities 2,488,788   2,542,329   2,642,014   2,541,918   2,608,033 
    Mortgage loans held for sale 200,762   150,727   149,987   188,048   229,502 
    Loans, net of unearned income and deferred costs 11,451,747   11,452,343   11,329,021   11,172,971   11,208,014 
    Less: Allowance for credit losses (125,552)  (125,835)  (126,461)  (125,159)  (123,513)
    Net Loans 11,326,195   11,326,508   11,202,560   11,047,812   11,084,501 
    Premises and equipment, net 340,348   342,569   337,598   335,522   326,686 
    Goodwill 457,619   457,619   456,335   456,684   456,695 
    Other intangible assets, net 65,460   68,758   64,634   67,496   71,106 
    BOLI 277,434   279,293   277,445   275,240   273,435 
    Other assets 610,791   615,324   576,109   551,884   538,848 
    TOTAL ASSETS$17,068,843  $16,884,237  $16,835,039  $16,680,356  $17,225,075 
    LIABILITIES AND EQUITY         
    Deposits:         
    Noninterest-bearing demand$4,303,773  $4,194,132  $4,342,701  $4,444,861  $4,774,830 
    Interest-bearing:         
    Demand and money market accounts 6,940,086   6,916,701   6,757,619   6,764,415   6,529,336 
    Savings 312,881   326,179   336,492   350,031   361,891 
    Certificates of deposit 2,715,848   2,689,062   2,456,394   2,321,498   2,100,604 
    Total Deposits 14,272,588   14,126,074   13,893,206   13,880,805   13,766,661 
    Advances from the FHLB 3,591   3,775   203,958   104,139   754,319 
    Subordinated debt, net 256,227   256,011   255,796   255,580   255,365 
    Repurchase agreements and other borrowings 35,351   31,198   32,826   47,315   49,898 
    Total Borrowings 295,169   290,984   492,580   407,034   1,059,582 
    Other liabilities 411,770   401,307   393,375   408,305   408,333 
    TOTAL LIABILITIES 14,979,527   14,818,365   14,779,161   14,696,144   15,234,576 
              
    Preferred stock —   —   —   —   — 
    Common stock, $1.667 par value 125,090   125,009   124,847   124,837   124,805 
    Capital surplus 1,115,759   1,114,038   1,112,761   1,111,152   1,109,526 
    Retained earnings 961,162   937,065   921,126   911,042   884,901 
    Common stock issued to deferred compensation         
    trust, at cost (22,756)  (20,915)  (20,813)  (20,740)  (20,134)
    Deferred compensation trust 22,756   20,915   20,813   20,740   20,134 
    Accumulated other comprehensive income (loss) (129,224)  (126,586)  (118,762)  (179,043)  (145,392)
    TOTAL SHAREHOLDERS’ EQUITY 2,072,787   2,049,526   2,039,972   1,967,988   1,973,840 
    Noncontrolling interest 16,529   16,346   15,906   16,224   16,659 
    TOTAL EQUITY 2,089,316   2,065,872   2,055,878   1,984,212   1,990,499 
    TOTAL LIABILITIES AND EQUITY$17,068,843  $16,884,237  $16,835,039  $16,680,356  $17,225,075 
                        


    TOWNEBANK
    Consolidated Statements of Income - Five Quarter Trend (unaudited)
    (dollars in thousands, except share data)
      
      
     Three Months Ended
     June 30, March 31, December 31, September 30, June 30,
      2024   2024   2023   2023   2023 
    INTEREST INCOME:         
    Loans, including fees$154,549  $150,974  $146,810  $143,605  $138,977 
    Investment securities 22,928   19,996   20,464   20,292   18,851 
    Interest-bearing deposits in financial institutions and federal funds sold 14,512   14,234   13,967   15,031   14,488 
    Mortgage loans held for sale 2,945   1,716   2,886   3,928   2,547 
    Total interest income 194,934   186,920   184,127   182,856   174,863 
    INTEREST EXPENSE:         
    Deposits 82,023   78,388   73,200   64,171   48,671 
    Advances from the FHLB 942   2,438   917   3,438   10,407 
    Subordinated debt, net 2,236   2,236   2,236   2,245   2,236 
    Repurchase agreements and other borrowings 685   640   41   (56)  (62)
    Total interest expense 85,886   83,702   76,394   69,798   61,252 
    Net interest income 109,048   103,218   107,733   113,058   113,611 
    PROVISION FOR CREDIT LOSSES (177)  (877)  2,446   1,007   3,556 
    Net interest income after provision for credit losses 109,225   104,095   105,287   112,051   110,055 
    NONINTEREST INCOME:         
    Residential mortgage banking income, net 13,422   10,477   8,035   10,648   11,360 
    Insurance commissions and related income, net 24,031   25,539   21,207   23,777   22,498 
    Property management income, net 14,312   16,773   7,358   12,800   12,098 
    Real estate brokerage income, net —   —   (32)  (63)  1,834 
    Service charges on deposit accounts 3,353   3,079   3,056   2,823   3,015 
    Credit card merchant fees, net 1,662   1,551   1,476   2,006   1,682 
    Investment commission income, net 2,580   2,343   2,380   2,363   2,166 
    BOLI 3,238   1,842   2,206   1,814   1,710 
    Other income 3,324   2,206   2,127   3,638   11,594 
    Net gain/(loss) on investment securities —   74   —   —   — 
    Total noninterest income 65,922   63,884   47,813   59,806   67,957 
    NONINTEREST EXPENSE:         
    Salaries and employee benefits 71,349   71,377   66,035   67,258   67,445 
    Occupancy 9,717   9,422   9,308   9,027   9,487 
    Furniture and equipment 4,634   4,478   4,445   4,100   4,389 
    Amortization - intangibles 3,298   3,246   3,411   3,610   3,610 
    Software 7,056   6,100   6,743   6,130   6,169 
    Data processing 4,606   3,916   3,529   4,140   4,011 
    Professional fees 3,788   3,180   3,339   2,770   3,166 
    Advertising and marketing 3,524   4,582   3,377   3,653   3,959 
    Other expenses 16,012   19,290   21,708   17,014   22,992 
    Total noninterest expense 123,984   125,591   121,895   117,702   125,228 
    Income before income tax expense and noncontrolling interest 51,163   42,388   31,205   54,155   52,784 
    Provision for income tax expense 8,124   7,261   2,660   9,410   9,416 
    Net income 43,039   35,127   28,545   44,745   43,368 
    Net income attributable to noncontrolling interest (183)  (440)  259   117   (1,652)
    Net income attributable to TowneBank$42,856  $34,687  $28,804  $44,862  $41,716 
    Per common share information         
    Basic earnings$0.57  $0.46  $0.39  $0.60  $0.56 
    Diluted earnings$0.57  $0.46  $0.39  $0.60  $0.56 
    Basic weighted average shares outstanding 74,925,877   74,816,420   74,773,335   74,750,294   74,691,121 
    Diluted weighted average shares outstanding 75,037,955   74,979,501   74,793,557   74,765,515   74,699,810 
    Cash dividends declared$0.25  $0.25  $0.25  $0.25  $0.25 
              


    TOWNEBANK
    Banking Segment Financial Information (unaudited)
    (dollars in thousands)
     
              
     Three Months Ended Six Months Ended Increase/(Decrease)
     June 30, March 31, June 30, YTD 2024 over 2023
      2024   2023   2024   2024   2023  Amount Percent
    Revenue             
    Net interest income$108,029  $113,327  $102,682  $210,711  $236,976  $(26,265) (11.08)%
    Service charges on deposit accounts 3,352   3,015   3,079   6,431   5,754   677  11.77%
    Credit card merchant fees 1,662   1,682   1,551   3,213   3,226   (13) (0.40)%
    Investment commission income, net 2,580   2,166   2,343   4,923   4,218   705  16.71%
    Other income 4,840   3,990   3,429   8,268   7,790   478  6.14%
    Subtotal 12,434   10,853   10,402   22,835   20,988   1,847  8.80%
    Net gain/(loss) on investment securities —   —   74   74   —   74  N/M
    Total noninterest income 12,434   10,853   10,476   22,909   20,988   1,921  9.15%
    Total revenue 120,463   124,180   113,158   233,620   257,964   (24,344) (9.44)%
                  
    Provision for credit losses (170)  3,482   (976)  (1,146)  15,235   (16,381) (107.52)%
                  
    Expenses             
    Salaries and employee benefits 46,640   42,240   46,474   93,113   85,433   7,680  8.99%
    Occupancy 7,194   6,846   7,061   14,254   13,080   1,174  8.98%
    Furniture and equipment 3,810   3,544   3,648   7,458   6,877   581  8.45%
    Amortization of intangible assets 1,117   1,341   1,162   2,280   2,622   (342) (13.04)%
    Other expenses 23,587   29,178   26,953   50,541   57,621   (7,080) (12.29)%
    Total expenses 82,348   83,149   85,298   167,646   165,633   2,013  1.22%
    Income before income tax, corporate allocation and noncontrolling interest 38,285   37,549   28,836   67,120   77,096   (9,976) (12.94)%
    Corporate allocation 1,232   1,271   1,069   2,301   2,472   (171) (6.92)%
    Income before income tax provision and noncontrolling interest 39,517   38,820   29,905   69,421   79,568   (10,147) (12.75)%
    Provision for income tax expense 5,130   6,114   4,105   9,235   13,765   (4,530) (32.91)%
    Net income 34,387   32,706   25,800   60,186   65,803   (5,617) (8.54)%
    Noncontrolling interest (58)  —   120   62   —   62  N/M
    Net income attributable to TowneBank$34,329  $32,706  $25,920  $60,248  $65,803  $(5,555) (8.44)%
                  
    Efficiency ratio(non-GAAP) 67.43%  65.88%  74.40%  70.81%  63.19%  7.62% 12.06%


    TOWNEBANK
    Realty Segment Financial Information (unaudited)
    (dollars in thousands)
     
        
     Three Months Ended Six Months Ended Increase/(Decrease)
     June 30, March 31, June 30, YTD 2024 over 2023
      2024   2023   2024   2024   2023  Amount Percent
    Revenue             
    Residential mortgage brokerage
    income, net    		$13,996  $12,215  $10,798  $24,795  $22,009  $2,786  12.66%
    Real estate brokerage income, net —   1,834   —   —   3,625   (3,625) (100.00)%
    Title insurance and settlement fees —   152   —   —   443   (443) (100.00)%
    Property management fees, net 14,312   12,098   16,773   31,085   27,633   3,452  12.49%
    Income (loss) from unconsolidated subsidiary 67   (886)  30   97   (821)  918  111.81%
    Gain on equity investment —   8,833   —   —   8,833   (8,833) (100.00)%
    Net interest and other income 1,317   635   784   2,101   820   1,281  156.22%
    Total revenue 29,692   34,881   28,385   58,078   62,542   (4,464) (7.14)%
                  
    Provision for credit losses (7)  74   99   92   (10)  102  1,020.00%
                  
    Expenses             
    Salaries and employee benefits 12,370   13,949   12,188   24,558   28,789   (4,231) (14.70)%
    Occupancy 1,811   1,869   1,569   3,381   3,890   (509) (13.08)%
    Furniture and equipment 596   640   594   1,190   1,333   (143) (10.73)%
    Amortization of intangible assets 781   741   677   1,457   1,424   33  2.32%
    Other expenses 9,136   9,337   8,199   17,335   17,775   (440) (2.48)%
    Total expenses 24,694   26,536   23,227   47,921   53,211   (5,290) (9.94)%
                  
    Income before income tax, corporate allocation and noncontrolling interest 5,005   8,271   5,059   10,065   9,341   724  7.75%
    Corporate allocation (490)  (600)  (348)  (838)  (1,200)  362  (30.17)%
    Income before income tax provision and noncontrolling interest 4,515   7,671   4,711   9,227   8,141   1,086  13.34%
    Provision for income tax expense 1,163   1,686   1,156   2,319   1,867   452  24.21%
    Net income 3,352   5,985   3,555   6,908   6,274   634  10.11%
    Noncontrolling interest (125)  (1,652)  (560)  (685)  (1,797)  1,112  (61.88)%
    Net income attributable to TowneBank$3,227  $4,333  $2,995  $6,223  $4,477  $1,746  39.00%
                  
    Efficiency ratio excluding gain on equity investment(non-GAAP) 80.54%  99.03%  79.44%  80.00%  96.42% (16.42)        % (17.03)%
                  


    TOWNEBANK
    Insurance Segment Financial Information (unaudited)
    (dollars in thousands)
     
              
     Three Months Ended Six Months Ended Increase/(Decrease)
     June 30, March 31, June 30, YTD 2024 over 2023
      2024   2023   2024   2024   2023  Amount Percent
    Commission and fee income             
    Property and casualty$22,225  $20,028  $20,722  $42,947  $38,156  $4,791  12.56%
    Employee benefits 4,404   4,561   4,826   9,230   9,148   82  0.90%
    Specialized benefit services —   153   9   9   312   (303) (97.12)%
    Total commissions and fees 26,629   24,742   25,557   52,186   47,616   4,570  9.60%
                  
    Contingency and bonus revenue 2,951   2,638   4,503   7,454   7,008   446  6.36%
    Other income 6   8   11   17   15   2  13.33%
    Total revenue 29,586   27,388   30,071   59,657   54,639   5,018  9.18%
                  
    Employee commission expense 4,771   4,881   4,512   9,283   9,434   (151) (1.60)%
    Revenue, net of commission expense 24,815   22,507   25,559   50,374   45,205   5,169  11.43%
                  
    Salaries and employee benefits 12,339   11,256   12,715   25,055   22,644   2,411  10.65%
    Occupancy 712   772   792   1,504   1,582   (78) (4.93)%
    Furniture and equipment 228   205   236   464   423   41  9.69%
    Amortization of intangible assets 1,400   1,528   1,407   2,807   3,088   (281) (9.10)%
    Other expenses 2,263   1,782   1,916   4,178   3,045   1,133  37.21%
    Total operating expenses 16,942   15,543   17,066   34,008   30,782   3,226  10.48%
    Income before income tax, corporate allocation and noncontrolling interest 7,873   6,964   8,493   16,366   14,423   1,943  13.47%
    Corporate allocation (742)  (671)  (721)  (1,463)  (1,272)  (191) 15.02%
    Income before income tax provision and noncontrolling interest 7,131   6,293   7,772   14,903   13,151   1,752  13.32%
    Provision for income tax expense 1,831   1,616   2,000   3,831   3,382   449  13.28%
    Net income 5,300   4,677   5,772   11,072   9,769   1,303  13.34%
    Noncontrolling interest —   —   —   —   —   —  —%
    Net income attributable to TowneBank$5,300  $4,677  $5,772  $11,072  $9,769  $1,303  13.34%
                  
    Provision for income taxes 1,831   1,616   2,000   3,831   3,382   449  13.28%
    Depreciation, amortization and interest expense 1,529   1,683   1,553   3,083   3,389   (306) (9.03)%
    EBITDA(non-GAAP)$8,660  $7,976  $9,325  $17,986  $16,540  $1,446  8.74%
                  
    Efficiency ratio(non-GAAP) 62.63%  62.27%  61.27%  61.94%  61.26%  0.68% 1.11%
                               


    TOWNEBANK
    Reconciliation of Non-GAAP Financial Measures
    (dollars in thousands)
         
     Three Months Ended Six Months Ended
     June 30, June 30, March 31, June 30, June 30,
      2024   2023   2024   2024   2023 
              
    Return on average assets (GAAP) 1.01%  0.99%  0.83%  0.92%  0.97%
    Impact of excluding average goodwill and other intangibles and amortization 0.10%  0.11%  0.09%  0.09%  0.11%
    Return on average tangible assets (non-GAAP) 1.11%  1.10%  0.92%  1.01%  1.08%
              
    Return on average equity (GAAP) 8.43%  8.46%  6.84%  7.63%  8.23%
    Impact of excluding average goodwill and other intangibles and amortization 3.60%  3.89%  3.03%  3.32%  3.80%
    Return on average tangible equity (non-GAAP) 12.03%  12.35%  9.87%  10.95%  12.03%
              
    Return on average common equity (GAAP) 8.49%  8.52%  6.89%  7.69%  8.29%
    Impact of excluding average goodwill and other intangibles and amortization 3.67%  3.96%  3.09%  3.38%  3.87%
    Return on average tangible common equity (non-GAAP) 12.16%  12.48%  9.98%  11.07%  12.16%
              
    Book value (GAAP)$27.62  $26.36  $27.33  $27.62  $26.36 
    Impact of excluding average goodwill and other intangibles and amortization (6.97)  (7.05)  (7.02)  (6.97)  (7.05)
    Tangible book value (non-GAAP)$20.65  $19.31  $20.31  $20.65  $19.31 
              
    Efficiency ratio (GAAP) 70.86%  68.97%  75.16%  72.96%  68.26%
    Impact of exclusions(1.88)%  1.44% (1.91)% (1.90)% (0.31)%
    Efficiency ratio (non-GAAP) 68.98%  70.41%  73.25%  71.06%  67.95%
              
    Average assets (GAAP)$16,982,482  $16,826,965  $16,864,235  $16,923,358  $16,589,323 
    Less: average goodwill and intangible assets 525,122   530,658   522,675   523,899   526,339 
    Average tangible assets (non-GAAP)$16,457,360  $16,296,307  $16,341,560  $16,399,459  $16,062,984 
              
    Average equity (GAAP)$2,045,622  $1,978,613  $2,040,275  $2,042,948  $1,962,398 
    Less: average goodwill and intangible assets 525,122   530,658   522,675   523,899   526,339 
    Average tangible equity (non-GAAP)$1,520,500  $1,447,955  $1,517,600  $1,519,049  $1,436,059 
              
    Average common equity (GAAP)$2,029,150  $1,963,164  $2,024,169  $2,026,659  $1,947,202 
    Less: average goodwill and intangible assets 525,122   530,658   522,675   523,899   526,339 
    Average tangible common equity (non-GAAP)$1,504,028  $1,432,506  $1,501,494  $1,502,760  $1,420,863 
              
    Net income (GAAP)$42,856  $41,716  $34,687  $77,543  $80,049 
    Amortization of intangibles, net of tax 2,605   2,852   2,564   5,170   5,636 
    Tangible net income (non-GAAP)$45,461  $44,568  $37,251  $82,713  $85,685 
              
    Total revenue (GAAP)$174,970  $181,568  $167,102  $342,072  $365,711 
    Net (gain)/loss on investment securities —   —   (74)  (74)  — 
    Other nonrecurring (income) loss —   (8,833)  —   —   (8,833)
    Total Revenue for efficiency calculation (non-GAAP)$174,970  $172,735  $167,028  $341,998  $356,878 
              
    Noninterest expense (GAAP)$123,984  $125,228  $125,591  $249,575  $249,626 
    Less: amortization of intangibles 3,298   3,610   3,246   6,544   7,134 
    Noninterest expense net of amortization (non-GAAP)$120,686  $121,618  $122,345  $243,031  $242,492 
                        


    TOWNEBANK
    Reconciliation of Non-GAAP Financial Measures
    (dollars in thousands, except per share data)
               
               
    Reconciliation of GAAP Earnings to Operating Earnings Excluding Certain Items Affecting Comparability Three Months Ended
      June 30, March 31, December 31, September 30, June 30,
       2024   2024   2023   2023   2023 
    Net income (GAAP) $42,856  $34,687  $28,804  $44,862  $41,716 
               
    Adjustments          
    Plus: Acquisition-related expenses, net of tax  18   564   56   458   2,457 
    Plus: FDIC special assessment, net of tax  (310)  1,021   4,083   —   — 
    Less: Gain on sale of equity investments, net of noncontrolling interest  —   —   (1,846)  (438)  (5,513)
    Core operating earnings, excluding certain items affecting comparability (non-GAAP) $42,564  $36,272  $31,097  $44,882  $38,660 
    Weighted average diluted shares  75,037,955   74,979,501   74,793,557   74,765,515   74,699,810 
    Diluted EPS (GAAP) $0.57  $0.46  $0.39  $0.60  $0.56 
    Diluted EPS, excluding certain items affecting comparability (non-GAAP) $0.57  $0.48  $0.42  $0.60  $0.52 
    Average assets $16,982,482  $16,864,235  $16,683,041  $16,762,859  $16,826,965 
    Average tangible equity $1,520,500  $1,517,600   1,465,216  $1,460,024  $1,447,955 
    Average common tangible equity $1,504,028  $1,501,494  $1,449,052  $1,443,453  $1,432,506 
    Return on average assets, excluding certain items affecting comparability (non-GAAP)  1.01%  0.87%  0.74%  1.06%  0.92%
    Return on average tangible equity, excluding certain items affecting comparability (non-GAAP)  11.95%  10.29%  9.15%  12.97%  11.50%
    Return on average common tangible equity, excluding certain items affecting comparability (non-GAAP)  12.08%  10.40%  9.25%  13.13%  11.62%
    Efficiency ratio, excluding certain items affecting comparability (non-GAAP)  70.85%  74.84%  78.33%  67.76%  67.32%
                         


    TOWNEBANK
    Reconciliation of Non-GAAP Financial Measures
    (dollars in thousands, except per share data)
         
         
    Reconciliation of GAAP Earnings to Operating Earnings Excluding Certain Items Affecting Comparability Six Months Ended
      June 30, June 30,
       2024   2023 
    Net income (GAAP) $77,543  $80,049 
         
    Adjustments    
    Plus: Acquisition-related expenses, net of tax  582   7,260 
    Plus: FDIC special assessment, net of tax  711   — 
    Plus: Initial provision for acquired loans, net of tax  —   3,166 
    Less: Gain on sale of equity investments, net of noncontrolling interest and tax  —   (5,513)
    Total charges, net of taxes  1,293   4,913 
    Core operating earnings, excluding certain items affecting comparability (non-GAAP) $78,836  $84,962 
    Weighted average diluted shares  75,002,469   74,545,389 
    Diluted EPS (GAAP) $1.03  $1.07 
    Diluted EPS, excluding certain items affecting comparability (non-GAAP) $1.05  $1.14 
    Average assets $16,923,358  $16,589,323 
    Average tangible equity $1,519,049  $1,436,059 
    Average tangible common equity $1,502,760  $1,420,863 
    Return on average assets, excluding certain items affecting comparability (non-GAAP)  0.94%  1.03%
    Return on average tangible equity, excluding certain items affecting comparability (non-GAAP)  11.12%  12.72%
    Return on average common tangible equity, excluding certain items affecting comparability (non-GAAP)  11.24%  12.86%
    Efficiency ratio, excluding certain items affecting comparability (non-GAAP)  72.80%  67.44%

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