SUFFOLK, Va., July 28, 2022 (GLOBE NEWSWIRE) — TowneBank (the "Company" or "Towne") (NASDAQ: TOWN) today reported earnings for the quarter ended June 30, 2022 of $46.55 million, or $0.64 per diluted share, compared to $55.80 million, or $0.77 per diluted share, for the quarter ended June 30, 2021.
"Our second quarter earnings reflected prudent strategic actions taken over the past twenty-four months to prepare our balance sheet for rising interest rates. While mortgage loan production declined sharply due primarily to higher interest rates, stellar growth of the loan portfolio during the quarter led to significant growth in net interest income as we were able to move excess cash into higher yielding assets. Credit quality remains excellent and we believe our unique business model is well positioned to capitalize on opportunities that may arise during this period of economic uncertainty," said G. Robert Aston, Jr., Executive Chairman.
Highlights for Second Quarter 2022 Compared to Second Quarter 2021:
- Total revenues were $166.98 million, a decrease of $0.34 million, or 0.20%. This year-over-year decrease was driven by a decline in residential mortgage banking income of $12.35 million that was mostly offset by an $8.20 million increase in net interest income and increases in insurance and property management revenue.
- Pre-provision, pre-tax, net revenues (non-GAAP), were $57.75 million, a decrease of $1.98 million, or 3.32%.
- Loans held for investment were $10.43 billion, an increase of $1.00 billion, or 10.63%, compared to June 30, 2021, and $0.52 billion, or 5.21%, from March 31, 2022. Excluding the decline in loans from the Paycheck Protection Program ("PPP"), loans held for investment increased $1.49 billion, or 16.75%, compared to June 30, 2021, and $0.56 billion, or 23.03%, on an annualized basis, from the linked quarter. Total loans at June 30, 2022, June 30, 2021, and March 31, 2022 included $36.19 million, $524.87 million, and $83.99 million, respectively, of PPP loans.
- Total deposits were $14.00 billion, an increase of $1.03 billion, or 7.96% compared to prior year and $0.22 billion, or 6.53% on an annualized basis, from March 31, 2022.
- Noninterest bearing deposits increased by 9.16%, to $5.72 billion, representing 40.89% of total deposits. Compared to the linked quarter, noninterest bearing deposits increased 13.85%, on an annualized basis.
- Annualized return on common shareholders’ equity was 10.03% and annualized return on average tangible common shareholders’ equity was 14.37% (non-GAAP).
- Net interest margin for the quarter was 2.88% and taxable equivalent net interest margin (non-GAAP) was 2.89%.
- Effective tax rate of 19.32% in the quarter compared to 20.03% in second quarter 2021, and 19.77% in the linked quarter.
"Our results benefited from continued investments in our insurance line of business. Insurance segment revenues were up 11% for the first six months compared to the same period last year. We continue to invest in talent which enables our insurance platform to continue strong organic growth coupled with opportunistic partnerships through strategic acquisitions," stated J. Morgan Davis, Chief Executive Officer.
Quarterly Net Interest Income Compared to Second Quarter 2021:
- Net interest income was $109.34 million compared to $101.14 million as of June 30, 2021. The increase was driven by higher interest rates and increased loan and investment securities balances.
- Tax-equivalent net interest margin (non-GAAP) was 2.89%, including purchase accounting accretion of 3 basis points and PPP interest and fees of 3 basis points, compared to 2.94%, including purchase accounting accretion of 5 basis points and a 10 basis point increase in PPP interest and fees, for second quarter 2021.
- On an average basis, loans held for investment, with a yield of 3.99%, represented 66.91% of earning assets at June 30, 2022 compared to a yield of 4.23% and 69.05% of earning assets in the second quarter of 2021. Excluding PPP loans, loan yields were 3.95% in second quarter 2022 compared to 4.15% in second quarter 2021.
- Interest and fee income on PPP loans was $1.52 million in second quarter 2022, compared to $2.10 million in the linked quarter, and $10.02 million in second quarter 2021.
- Total cost of deposits decreased to 0.16% from 0.23% at June 30, 2021.
- In June 2022, the Company gave notice that on July 30, 2022, it will redeem the $250.00 million outstanding of 4.50% fixed to floating rate subordinated notes due 2027. The Company recognized interest expense related to the notes of $2.81 million in second quarter 2022 and $2.96 million in second quarter 2021.
- Average interest-earning assets totaled $15.24 billion at June 30, 2022 compared to $13.93 billion at June 30, 2021, an increase of 9.45%.
- Average interest-bearing liabilities totaled $8.75 billion, an increase of $0.69 billion from prior year.
Quarterly Provision for Credit Losses:
- The quarterly provision for credit losses for on-balance-sheet loans was an expense of $0.11 million compared to provision benefits of $8.09 million one year ago and $2.10 million in the linked quarter.
- The second quarter 2022 included an increase in the allowance for credit losses on loans of $0.19 million that was driven by core loan growth and partially offset by the release of remaining reserves associated with industries heavily impacted by COVID-19 and net recoveries.
- Net loan recoveries were $0.08 million compared to net recoveries of $0.14 million one year prior and net charge-offs of $0.13 million in the linked quarter. The ratio of net charge-offs to average loans on an annualized basis was zero percent in second quarter 2022, 0.01% in the linked quarter. and (0.01)% in second quarter 2021.
- The allowance for credit losses on loans represented 1.00% of total loans at June 30, 2022, 1.05% on March 31, 2022, and 1.15% at June 30, 2021. The allowance for credit losses on loans was 18.94 times nonperforming loans compared to 21.52 times at March 31, 2022 and 9.67 times at June 30, 2021.
Quarterly Noninterest Income Compared to Second Quarter 2021:
- Total noninterest income was $57.64 million compared to $66.18 million in 2021, a decrease of $8.54 million, or 12.90%. Residential mortgage banking income decreased $12.35 million and real estate brokerage decreased $0.48 million, while property management income increased $2.36 million and insurance commissions increased $1.42 million.
- Residential mortgage banking recorded income of $13.18 million compared to $25.52 million in second quarter 2021. Loan volume decreased to $0.84 billion in second quarter 2022 compared to $1.45 billion in 2021. Recent increases in mortgage rates have resulted in refinance activities dropping below 10% of our total mortgage production volume, the lowest level since June 2018. Residential purchase activity comprised 92.27% of production volume in the second quarter of 2022 compared to 76.95% in the prior year quarter.
- Margins on residential mortgages declined 72 basis points from 3.64% in second quarter 2021 to 2.92% in the current quarter.
- Total Insurance commissions, net increased $1.42 million, or 7.72%, to $19.75 million in second quarter 2022 compared to 2021. This resulted from increases in property and casualty commissions, which were driven by organic growth and higher rates.
- Property management fee revenue increased 33.30%, or $2.36 million, to $9.45 million compared to second quarter 2021. Reservation income is up in the quarter over quarter comparison due primarily to the July 2021 acquisition of a vacation rental company in Tennessee, which contributed $2.22 million in property management fees during the quarter. Reservation income has declined at all property management locations from the linked quarter. Management anticipates the loosening of COVID-related travel restrictions, giving travelers more destination options, will continue the decline in reservation activity for the remainder of 2022, from the record levels of the past two years.
- In April 2022, the Company implemented changes for personal accounts to eliminate fees for non-sufficient funds and other overdraft program fees. The change did not have a material effect on revenue in second quarter 2022 and is not expected to have a material effect on future revenue.
Quarterly Noninterest Expense Compared to Second Quarter 2021:
- Total noninterest expense was $108.73 million compared to $105.39 million in 2021, an increase of $3.33 million, or 3.16%. Increases in salaries and employee benefits of $3.53 million, advertising and marketing expense of $0.83 million, and occupancy expense of $0.78 million were partially offset by declines in other expenses.
- Salary and benefits expense increases were driven by annual base salary adjustments that went into effect mid second quarter 2021, the acquisition of a vacation rental company in July 2021, and increases in health insurance costs.
- The increase in occupancy expense was driven by lower tenant income at McKinnon Tower in Norfolk, Virginia. The company purchased the building in 2020 with an existing lease that termed out at year end 2021.
- Advertising and marketing expense increases were primarily related to internet advertising in our realty segment and post-COVID increases in client business development.
Consolidated Balance Sheet Highlights:
- Total assets were $16.86 billion for the quarter ended June 30, 2022, a $0.20 billion increase compared to $16.67 billion at March 31, 2022. Total assets increased $1.06 billion, or 6.71%, from $15.80 billion at June 30, 2021. The year-over-year increase was driven by growth in loans and investment securities.
- Loans held for investment increased $1.00 billion, or 10.63%, compared to prior year and $0.52 billion, or 5.21%, compared the linked quarter. Excluding PPP loans of $36.19 million in second quarter 2022, $524.87 million in second quarter 2021, and $83.99 million in the linked quarter, loans held for investment increased $1.49 billion, or 16.75%, compared to prior year, and $0.56 billion, or 5.74%, compared to March 31, 2022, or 23.03% on an annualized basis.
- Average loans held for investment, excluding PPP loans, were $10.14 billion in the second quarter of 2022, an increase of $1.29 billion, or 14.55%, compared to prior year. In the linked quarter comparison, average loans held for investment, excluding PPP loans, increased 6.12%, or $0.58 billion, 24.56% on an annualized basis.
- Mortgage loans held for sale decreased $342.73 million, or 61.81%, compared to the prior year and $22.90 million, or 9.76%, compared to the linked quarter.
- Total deposits increased $1.03 billion, or 7.96%, compared to the prior year and $0.22 billion, or 1.63%, compared to the linked quarter.
- Total borrowings increased $9.91 million, or 1.68%, from prior year and decreased $27.93 million, or 4.45%, compared to the linked quarter.
Investment Securities:
- Total investment securities were $2.48 billion compared to $2.30 billion at March 31, 2022 and $1.49 billion at June 30, 2021. The weighted average duration of the portfolio at June 30, 2022 was 3.8 years. The carrying value of the available for sale debt securities portfolio included $120.41 million, and $70.32 million in net unrealized losses at June 30, 2022 and March 31, 2022, respectively, compared to net unrealized gains of $42.18 million at June 30, 2021.
Loans and Asset Quality:
- Total loans held for investment were $10.43 billion at June 30, 2022 compared to $9.91 billion at March 31, 2022 and $9.42 billion at June 30, 2021.
- Nonperforming assets were $6.06 million, or 0.04% of total assets, compared to $15.22 million, or 0.10%, at June 30, 2021.
- Nonperforming loans were 0.05% of period end loans compared to 0.12% at June 30, 2021.
- Foreclosed property decreased to $0.56 million from $4.04 million at June 30, 2021.
Deposits and Borrowings:
- Total deposits were $14.00 billion compared to $13.77 billion at March 31, 2022 and $12.96 billion at June 30, 2021.
- Total loans held for investment to deposits were 74.49% compared to 71.95% at March 31, 2022 and 72.69% at June 30, 2021.
- Non-interest bearing deposits were 40.89% of total deposits at June 30, 2022 compared to 40.17% at March 31, 2022 and 40.44% at June 30, 2021.
- Total borrowings were $0.60 billion compared to $0.63 billion at March 31, 2022 and $0.59 billion at June 30, 2021.
Capital:
- Common equity tier 1 capital ratio of 11.83%.
- Tier 1 leverage capital ratio of 9.19%.
- Tier 1 risk-based capital ratio of 11.97%.
- Total risk-based capital ratio of 16.76%.
- Book value per common share was $25.48 compared to $25.61 at March 31, 2022 and $25.51 at June 30, 2021.
- Tangible book value per common share (non-GAAP) was $18.58 compared to $18.67 at March 31, 2022 and $18.70 at June 30, 2021.
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.
Today, TowneBank operates over 40 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 controlled divisions and subsidiaries that include Towne Wealth Management, Towne Insurance Agency, Towne Benefits, TowneBank Mortgage, TowneBank Commercial Mortgage, Berkshire Hathaway HomeServices Towne Realty, Towne 1031 Exchange, LLC, and Towne Vacations. With total assets of $16.86 billion as of June 30, 2022, 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, pre-provision, pre-tax net revenues, 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 the impacts of the ongoing the impact of the COVID-19 pandemic and the associated efforts to limit its spread; competitive pressures in the banking industry that may increase significantly; changes in the interest rate environment that may reduce margins and/or the volumes and values of loans made or held as well as the value of other financial assets held; changes in the credit worthiness of customers and the possible impairment of the collectability of loans; general economic conditions, either nationally or regionally, that may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and/or a reduced demand for credit or other services; 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, 2020 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
J. Morgan Davis, Chief Executive Officer, 757-673-1673
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, | ||||||||||||||||
| 2022 | 2022 | 2021 | 2021 | 2021 | ||||||||||||||||
| Income and Performance Ratios: | ||||||||||||||||||||
| Total Revenue | $ | 166,980 | $ | 165,412 | $ | 160,424 | $ | 170,076 | $ | 167,321 | ||||||||||
| Net income | 47,054 | 46,250 | 41,657 | 52,743 | 58,002 | |||||||||||||||
| Net income available to common shareholders | 46,547 | 45,586 | 40,183 | 50,400 | 55,803 | |||||||||||||||
| Pre-provision, pre-tax, net revenues(non-GAAP) | 57,748 | 55,369 | 48,483 | 63,647 | 59,728 | |||||||||||||||
| Net income per common share – diluted | 0.64 | 0.63 | 0.55 | 0.69 | 0.77 | |||||||||||||||
| Book value per common share | 25.48 | 25.61 | 26.13 | 25.91 | 25.51 | |||||||||||||||
| Book value per common share – tangible(non-GAAP) | 18.58 | 18.67 | 19.15 | 18.92 | 18.70 | |||||||||||||||
| Return on average assets | 1.13 | % | 1.13 | % | 0.99 | % | 1.27 | % | 1.48 | % | ||||||||||
| Return on average assets – tangible(non-GAAP) | 1.22 | % | 1.23 | % | 1.08 | % | 1.37 | % | 1.59 | % | ||||||||||
| Return on average equity | 9.94 | % | 9.73 | % | 8.38 | % | 10.59 | % | 12.21 | % | ||||||||||
| Return on average equity – tangible(non-GAAP) | 14.20 | % | 13.91 | % | 12.08 | % | 15.09 | % | 17.38 | % | ||||||||||
| Return on average common equity | 10.03 | % | 9.81 | % | 8.45 | % | 10.68 | % | 12.31 | % | ||||||||||
| Return on average common equity – tangible(non-GAAP) | 14.37 | % | 14.08 | % | 12.22 | % | 15.27 | % | 17.57 | % | ||||||||||
| Noninterest income as a percentage of total revenue | 34.52 | % | 40.03 | % | 37.17 | % | 40.94 | % | 39.55 | % | ||||||||||
| Regulatory Capital Ratios (1): | ||||||||||||||||||||
| Common equity tier 1 | 11.83 | % | 12.16 | % | 12.36 | % | 12.53 | % | 12.42 | % | ||||||||||
| Tier 1 | 11.97 | % | 12.31 | % | 12.51 | % | 12.69 | % | 12.57 | % | ||||||||||
| Total | 16.76 | % | 17.34 | % | 15.56 | % | 15.85 | % | 15.76 | % | ||||||||||
| Tier 1 leverage ratio | 9.19 | % | 9.16 | % | 9.11 | % | 9.18 | % | 9.44 | % | ||||||||||
| Asset Quality: | ||||||||||||||||||||
| Allowance for credit losses on loans to nonperforming loans | 18.94x | 21.52x | 17.75x | 12.68x | 9.67x | |||||||||||||||
| Allowance for credit losses on loans to period end loans | 1.00 | % | 1.05 | % | 1.12 | % | 1.15 | % | 1.15 | % | ||||||||||
| Allowance for credit losses on loans to period end loans excluding PPP loans(non-GAAP) | 1.00 | % | 1.06 | % | 1.13 | % | 1.18 | % | 1.22 | % | ||||||||||
| Nonperforming loans to period end loans | 0.05 | % | 0.05 | % | 0.06 | % | 0.09 | % | 0.12 | % | ||||||||||
| Nonperforming assets to period end assets | 0.04 | % | 0.03 | % | 0.06 | % | 0.09 | % | 0.10 | % | ||||||||||
| Net charge-offs (recoveries) to average loans (annualized) | — | % | 0.01 | % | — | % | (0.03)% | (0.01)% | ||||||||||||
| Net charge-offs (recoveries) | $ | (80 | ) | $ | 126 | $ | (60 | ) | $ | (644 | ) | $ | (137 | ) | ||||||
| Nonperforming loans | $ | 5,493 | $ | 4,825 | $ | 5,973 | $ | 8,451 | $ | 11,178 | ||||||||||
| Foreclosed property | 563 | 560 | 4,583 | 5,409 | 4,041 | |||||||||||||||
| Total nonperforming assets | $ | 6,056 | $ | 5,385 | $ | 10,556 | $ | 13,860 | $ | 15,219 | ||||||||||
| Loans past due 90 days and still accruing interest | $ | 232 | $ | 40 | $ | 372 | $ | 143 | $ | 1,584 | ||||||||||
| Allowance for credit losses on loans | $ | 104,019 | $ | 103,833 | $ | 106,059 | $ | 107,177 | $ | 108,130 | ||||||||||
| Mortgage Banking: | ||||||||||||||||||||
| Loans originated, mortgage | $ | 588,529 | $ | 583,008 | $ | 851,021 | $ | 939,272 | $ | 1,050,663 | ||||||||||
| Loans originated, joint venture | 249,279 | 236,980 | 303,362 | 370,865 | 403,864 | |||||||||||||||
| Total loans originated | $ | 837,808 | $ | 819,988 | $ | 1,154,383 | $ | 1,310,137 | $ | 1,454,527 | ||||||||||
| Number of loans originated | 2,282 | 2,237 | 3,408 | 3,917 | 4,514 | |||||||||||||||
| Number of originators | 201 | 207 | 213 | 219 | 222 | |||||||||||||||
| Purchase % | 92.27 | % | 77.93 | % | 79.36 | % | 77.45 | % | 76.95 | % | ||||||||||
| Loans sold | $ | 759,073 | $ | 853,808 | $ | 1,150,996 | $ | 1,394,166 | $ | 1,485,057 | ||||||||||
| Rate lock asset | $ | 1,935 | $ | 3,009 | $ | 3,455 | $ | 6,087 | $ | 7,760 | ||||||||||
| Gross realized gain on sales and fees as a % of loans originated | 2.92 | % | 3.01 | % | 3.42 | % | 3.61 | % | 3.64 | % | ||||||||||
| Other Ratios: | ||||||||||||||||||||
| Net interest margin | 2.88 | % | 2.67 | % | 2.70 | % | 2.76 | % | 2.91 | % | ||||||||||
| Net interest margin-fully tax equivalent(non-GAAP) | 2.89 | % | 2.69 | % | 2.72 | % | 2.77 | % | 2.94 | % | ||||||||||
| Average earning assets/total average assets | 92.22 | % | 92.24 | % | 92.13 | % | 91.95 | % | 91.97 | % | ||||||||||
| Average loans/average deposits | 74.57 | % | 71.61 | % | 70.68 | % | 71.69 | % | 78.31 | % | ||||||||||
| Average noninterest deposits/total average deposits | 40.56 | % | 40.49 | % | 41.42 | % | 40.40 | % | 40.21 | % | ||||||||||
| Period end equity/period end total assets | 11.09 | % | 11.28 | % | 11.71 | % | 12.02 | % | 11.83 | % | ||||||||||
| Efficiency ratio(non-GAAP) | 63.51 | % | 64.42 | % | 67.03 | % | 59.58 | % | 61.46 | % | ||||||||||
| (1) Current reporting period regulatory capital ratios are preliminary | ||||||||||||||||||||
| TOWNEBANK | |||||||||||||||||
| Selected Data (unaudited) | |||||||||||||||||
| (dollars in thousands) | |||||||||||||||||
| Investment Securities | % Change | ||||||||||||||||
| Q2 | Q2 | Q1 | Q2 22 vs. | Q2 22 vs. | |||||||||||||
| Available-for-sale securities, at fair value | 2022 | 2021 | 2022 | Q2 21 | Q1 22 | ||||||||||||
| U.S. agency securities | $ | 342,702 | $ | 206,151 | $ | 338,490 | 66.24 | % | 1.24 | % | |||||||
| U.S. Treasury notes | 27,496 | 1,013 | 970 | 2,614.31 | % | 2,734.64 | % | ||||||||||
| Municipal securities | 447,927 | 334,633 | 400,200 | 33.86 | % | 11.93 | % | ||||||||||
| Trust preferred and other corporate securities | 84,307 | 31,680 | 85,792 | 166.12 | % | (1.73)% | |||||||||||
| Mortgage-backed securities issued by GSE and GNMA | 1,012,690 | 881,078 | 1,022,169 | 14.94 | % | (0.93)% | |||||||||||
| Allowance for credit losses | (1,111 | ) | (134 | ) | (1,081 | ) | 729.10 | % | 2.78 | % | |||||||
| Total | $ | 1,914,011 | $ | 1,454,421 | $ | 1,846,540 | 31.60 | % | 3.65 | % | |||||||
| Gross unrealized gains (losses) reflected in financial statements | |||||||||||||||||
| Total gross unrealized gains | $ | 1,840 | $ | 65,152 | $ | 3,443 | (97.18)% | (46.56)% | |||||||||
| Total gross unrealized losses | (122,253 | ) | (22,968 | ) | (73,758 | ) | 432.28 | % | 65.75 | % | |||||||
| Net unrealized gains (losses) and other adjustments on AFS securities | $ | (120,413 | ) | $ | 42,184 | $ | (70,315 | ) | (385.45)% | 71.25 | % | ||||||
| Held-to-maturity securities, at amortized cost | |||||||||||||||||
| U.S. agency securities | $ | 100,718 | $ | — | $ | 83,004 | N/M | 21.34 | % | ||||||||
| U.S. Treasury notes | 434,432 | — | 336,193 | N/M | 29.22 | % | |||||||||||
| Municipal securities | 5,138 | 5,053 | 5,116 | 1.68 | % | 0.43 | % | ||||||||||
| Trust preferred corporate securities | 2,248 | 2,297 | 2,260 | (2.13)% | (0.53)% | ||||||||||||
| Mortgage-backed securities issued by GSE and GNMA | 6,547 | 8,039 | 6,811 | (18.56)% | (3.88)% | ||||||||||||
| Allowance for credit losses | (85 | ) | (97 | ) | (92 | ) | (12.37)% | (7.61)% | |||||||||
| Total | $ | 548,998 | $ | 15,292 | $ | 433,292 | 3,490.10 | % | 26.70 | % | |||||||
| Total gross unrealized gains | $ | 448 | $ | 1,708 | $ | 714 | (73.77)% | (37.25)% | |||||||||
| Total gross unrealized losses | (18,615 | ) | — | (11,915 | ) | — | % | — | % | ||||||||
| Net unrealized gains (losses) in HTM securities | $ | (18,167 | ) | $ | 1,708 | $ | (11,201 | ) | (1,163.64)% | 62.19 | % | ||||||
| Loans Held For Investment(1) | % Change | ||||||||||||||||
| Q2 | Q2 | Q1 | Q2 22 vs. | Q2 22 vs. | |||||||||||||
| 2022 | 2021 | 2022 | Q2 21 | Q1 22 | |||||||||||||
| Real estate – construction and development | $ | 1,383,791 | $ | 1,029,811 | $ | 1,236,294 | 34.37 | % | 11.93 | % | |||||||
| Commercial real estate – owner occupied | 1,579,464 | 1,445,328 | 1,561,117 | 9.28 | % | 1.18 | % | ||||||||||
| Commercial real estate – non owner occupied | 2,757,651 | 2,597,405 | 2,697,929 | 6.17 | % | 2.21 | % | ||||||||||
| Real estate – multifamily | 371,658 | 343,764 | 339,220 | 8.11 | % | 9.56 | % | ||||||||||
| Residential 1-4 family | 1,513,662 | 1,166,898 | 1,392,052 | 29.72 | % | 8.74 | % | ||||||||||
| HELOC | 386,067 | 390,726 | 376,480 | (1.19)% | 2.55 | % | |||||||||||
| Commercial and industrial business (C&I) | 1,261,279 | 1,529,788 | 1,212,973 | (17.55)% | 3.98 | % | |||||||||||
| Government | 527,230 | 479,664 | 518,839 | 9.92 | % | 1.62 | % | ||||||||||
| Indirect | 555,638 | 310,492 | 485,620 | 78.95 | % | 14.42 | % | ||||||||||
| Consumer loans and other | 89,320 | 129,702 | 88,784 | (31.13)% | 0.60 | % | |||||||||||
| Total | $ | 10,425,760 | $ | 9,423,578 | $ | 9,909,308 | 10.63 | % | 5.21 | % | |||||||
| (1) Paycheck Protection Program loans totaling $0.04 billion, $0.52 billion, and $0.08 billion, primarily in C&I, are included in Q2 22, Q2 21, and Q1 22, respectively. | |||||||||||||||||
| Deposits | % Change | ||||||||||||||||
| Q2 | Q2 | Q1 | Q2 22 vs. | Q2 22 vs. | |||||||||||||
| 2022 | 2021 | 2022 | Q2 21 | Q1 22 | |||||||||||||
| Noninterest-bearing demand | $ | 5,723,415 | $ | 5,243,074 | $ | 5,532,337 | 9.16 | % | 3.45 | % | |||||||
| Interest-bearing: | |||||||||||||||||
| Demand and money market accounts | 6,384,818 | 5,373,146 | 6,432,005 | 18.83 | % | (0.73)% | |||||||||||
| Savings | 388,364 | 349,552 | 393,119 | 11.10 | % | (1.21)% | |||||||||||
| Certificates of deposits | 1,499,514 | 1,998,828 | 1,414,339 | (24.98)% | 6.02 | % | |||||||||||
| Total | $ | 13,996,111 | $ | 12,964,600 | $ | 13,771,800 | 7.96 | % | 1.63 | % | |||||||
| TOWNEBANK | ||||||||||||||||||||||||||||||||
| Average Balances, Yields and Rate Paid (unaudited) | ||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||
| Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||||||
| June 30, 2022 | March 31, 2022 | June 30, 2021 | ||||||||||||||||||||||||||||||
| 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) (2)(3) |
$ | 10,199,019 | $ | 101,463 | 3.99 | % | $ | 9,668,724 | $ | 95,596 | 4.01 | % | $ | 9,616,787 | $ | 101,490 | 4.23 | % | ||||||||||||||
| Taxable investment securities | 2,331,410 | 11,388 | 1.95 | % | 2,059,614 | 9,013 | 1.75 | % | 1,351,922 | 6,476 | 1.92 | % | ||||||||||||||||||||
| Tax-exempt investment securities | 132,304 | 879 | 2.66 | % | 110,698 | 680 | 2.46 | % | 128,094 | 434 | 1.36 | % | ||||||||||||||||||||
| Total securities | 2,463,714 | 12,267 | 1.99 | % | 2,170,312 | 9,693 | 1.79 | % | 1,480,016 | 6,910 | 1.87 | % | ||||||||||||||||||||
| Interest-bearing deposits | 2,368,147 | 4,616 | 0.78 | % | 2,929,929 | 1,347 | 0.19 | % | 2,327,310 | 619 | 0.11 | % | ||||||||||||||||||||
| Loans held for sale | 213,109 | 2,217 | 4.16 | % | 276,448 | 2,375 | 3.44 | % | 503,706 | 3,711 | 2.95 | % | ||||||||||||||||||||
| Total earning assets | 15,243,989 | 120,563 | 3.17 | % | 15,045,413 | 109,011 | 2.94 | % | 13,927,819 | 112,730 | 3.25 | % | ||||||||||||||||||||
| Less: allowance for credit losses | (103,871 | ) | (106,172 | ) | (116,025 | ) | ||||||||||||||||||||||||||
| Total nonearning assets | 1,389,692 | 1,372,757 | 1,332,094 | |||||||||||||||||||||||||||||
| Total assets | $ | 16,529,810 | $ | 16,311,998 | $ | 15,143,888 | ||||||||||||||||||||||||||
| Liabilities and Equity: | ||||||||||||||||||||||||||||||||
| Interest-bearing deposits | ||||||||||||||||||||||||||||||||
| Demand and money market | $ | 6,349,725 | $ | 3,094 | 0.20 | % | $ | 6,178,217 | $ | 2,262 | 0.15 | % | $ | 5,179,907 | $ | 2,004 | 0.16 | % | ||||||||||||||
| Savings | 387,498 | 526 | 0.54 | % | 382,839 | 511 | 0.54 | % | 346,177 | 528 | 0.61 | % | ||||||||||||||||||||
| Certificates of deposit | 1,392,474 | 1,953 | 0.56 | % | 1,472,942 | 2,121 | 0.58 | % | 1,816,283 | 4,612 | 1.02 | % | ||||||||||||||||||||
| Total interest-bearing deposits | 8,129,697 | 5,573 | 0.27 | % | 8,033,998 | 4,894 | 0.25 | % | 7,342,367 | 7,144 | 0.39 | % | ||||||||||||||||||||
| Borrowings | 128,276 | 135 | 0.42 | % | 135,775 | 137 | 0.40 | % | 476,122 | 565 | 0.47 | % | ||||||||||||||||||||
| Subordinated debt, net | 496,862 | 5,091 | 4.10 | % | 386,934 | 4,120 | 4.26 | % | 249,260 | 2,962 | 4.75 | % | ||||||||||||||||||||
| Total interest-bearing liabilities | 8,754,835 | 10,799 | 0.49 | % | 8,556,707 | 9,151 | 0.43 | % | 8,067,749 | 10,671 | 0.53 | % | ||||||||||||||||||||
| Demand deposits | 5,547,936 | 5,467,153 | 4,937,754 | |||||||||||||||||||||||||||||
| Other noninterest-bearing liabilities | 348,678 | 387,871 | 304,793 | |||||||||||||||||||||||||||||
| Total liabilities | 14,651,449 | 14,411,731 | 13,310,296 | |||||||||||||||||||||||||||||
| Shareholders’ equity | 1,878,361 | 1,900,267 | 1,833,592 | |||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 16,529,810 | $ | 16,311,998 | $ | 15,143,888 | ||||||||||||||||||||||||||
| Net interest income (tax-equivalent basis) (6) | $ | 109,764 | $ | 99,860 | $ | 102,059 | ||||||||||||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures | ||||||||||||||||||||||||||||||||
| Tax-equivalent basis adjustment | (424 | ) | (656 | ) | (915 | ) | ||||||||||||||||||||||||||
| Net interest income (GAAP) | $ | 109,340 | $ | 99,204 | $ | 101,144 | ||||||||||||||||||||||||||
| Interest rate spread (4)(6) | 2.68 | % | 2.51 | % | 2.72 | % | ||||||||||||||||||||||||||
| Interest expense as a percent of average earning assets | 0.28 | % | 0.25 | % | 0.31 | % | ||||||||||||||||||||||||||
| Net interest margin (tax equivalent basis) (5)(6) | 2.89 | % | 2.69 | % | 2.94 | % | ||||||||||||||||||||||||||
| Total cost of deposits | 0.16 | % | 0.15 | % | 0.23 | % | ||||||||||||||||||||||||||
(1) Yields and interest income are presented on a taxable-equivalent basis using the federal statutory tax rate of 21%.
(2) Average loan balances for June 30, 2021 and related yields have been restated to include, previously excluded, nonaccrual loans of $11.98 million.
(3) June 30, 2022, June 30, 2021, and March 31, 2022 includes average PPP balances of $60.89 million, $766.47 million and $115.51 million, and related interest and fee income of $1.52 million, $10.02 million, and $2.10 million, respectively.
(4) Interest spread is the average yield earned on earning assets less the average rate paid on interest-bearing liabilities. Fully tax equivalent.
(5) Net interest margin is net interest income expressed as a percentage of average earning assets. Fully tax equivalent.
(6) Non-GAAP.
| TOWNEBANK | |||||||||||||||||||||||||||||||||
| Average Balances, Yields and Rate Paid (unaudited) | |||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||
| Six Months Ended | Six Months Ended | Six Months Ended June 30, | |||||||||||||||||||||||||||||||
| June 30, 2022 | June 30, 2021 | 2022 Compared with 2021 | |||||||||||||||||||||||||||||||
| Interest | Average | Interest | Average | ||||||||||||||||||||||||||||||
| Average | Income/ | Yield/ | Average | Income/ | Yield/ | Increase | Change Due to | ||||||||||||||||||||||||||
| Balance | Expense | Rate (1) | Balance | Expense | Rate (1) | (Decrease) | Rate | Volume | |||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||
| Loans (net of unearned income and deferred costs) (2)(3) |
$ | 9,935,337 | $ | 197,059 | 4.00 | % | $ | 9,638,329 | $ | 203,451 | 4.26 | % | $ | (6,392 | ) | $ | (12,533 | ) | $ | 6,141 | |||||||||||||
| Taxable investment securities | 2,196,263 | 20,401 | 1.86 | % | 1,327,862 | 13,080 | 1.97 | % | 7,321 | (785 | ) | 8,106 | |||||||||||||||||||||
| Tax-exempt investment securities | 121,561 | 1,559 | 2.57 | % | 133,944 | 976 | 1.46 | % | 583 | 681 | (98 | ) | |||||||||||||||||||||
| Total securities | 2,317,824 | 21,960 | 1.89 | % | 1,461,806 | 14,056 | 1.92 | % | 7,904 | (104 | ) | 8,008 | |||||||||||||||||||||
| Interest-bearing deposits | 2,647,485 | 5,963 | 0.45 | % | 2,022,901 | 1,035 | 0.10 | % | 4,928 | 4,518 | 410 | ||||||||||||||||||||||
| Loans held for sale | 244,604 | 4,592 | 3.75 | % | 520,260 | 7,072 | 2.72 | % | (2,480 | ) | 2,098 | (4,578 | ) | ||||||||||||||||||||
| Total earning assets | 15,145,250 | 229,574 | 3.06 | % | 13,643,296 | 225,614 | 3.33 | % | 3,960 | (6,021 | ) | 9,981 | |||||||||||||||||||||
| Less: allowance for credit losses | (105,015 | ) | (118,466 | ) | |||||||||||||||||||||||||||||
| Total nonearning assets | 1,381,271 | 1,344,845 | |||||||||||||||||||||||||||||||
| Total assets | $ | 16,421,506 | $ | 14,869,675 | |||||||||||||||||||||||||||||
| Liabilities and Equity: | |||||||||||||||||||||||||||||||||
| Interest-bearing deposits | |||||||||||||||||||||||||||||||||
| Demand and money market | $ | 6,264,444 | $ | 5,355 | 0.17 | % | $ | 5,043,155 | $ | 4,080 | 0.16 | % | $ | 1,275 | $ | 242 | $ | 1,033 | |||||||||||||||
| Savings | 385,182 | 1,037 | 0.54 | % | 339,131 | 1,050 | 0.62 | % | (13 | ) | (146 | ) | 133 | ||||||||||||||||||||
| Certificates of deposit | 1,432,486 | 4,074 | 0.57 | % | 1,887,359 | 10,563 | 1.13 | % | (6,489 | ) | (4,355 | ) | (2,134 | ) | |||||||||||||||||||
| Total interest-bearing deposits | 8,082,112 | 10,466 | 0.26 | % | 7,269,645 | 15,693 | 0.44 | % | (5,227 | ) | (4,259 | ) | (968 | ) | |||||||||||||||||||
| Borrowings | 132,004 | 272 | 0.41 | % | 519,048 | 1,387 | 0.53 | % | (1,115 | ) | (262 | ) | (853 | ) | |||||||||||||||||||
| Subordinated debt, net | 442,202 | 9,212 | 4.17 | % | 249,188 | 5,892 | 4.73 | % | 3,320 | (773 | ) | 4,093 | |||||||||||||||||||||
| Total interest-bearing liabilities | 8,656,318 | 19,950 | 0.46 | % | 8,037,881 | 22,972 | 0.58 | % | (3,022 | ) | (5,294 | ) | 2,272 | ||||||||||||||||||||
| Demand deposits | 5,507,768 | 4,711,854 | |||||||||||||||||||||||||||||||
| Other noninterest-bearing liabilities |
368,166 | 304,162 | |||||||||||||||||||||||||||||||
| Total liabilities | 14,532,252 | 13,053,897 | |||||||||||||||||||||||||||||||
| Shareholders’ equity | 1,889,254 | 1,815,778 | |||||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 16,421,506 | $ | 14,869,675 | |||||||||||||||||||||||||||||
| Net interest income (tax-equivalent basis)(6) | $ | 209,624 | $ | 202,642 | $ | 6,982 | $ | (727 | ) | $ | 7,709 | ||||||||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures | |||||||||||||||||||||||||||||||||
| Tax-equivalent basis adjustment | (1,080 | ) | (1,508 | ) | 428 | ||||||||||||||||||||||||||||
| Net interest income (GAAP) | $ | 208,544 | $ | 201,134 | $ | 7,410 | |||||||||||||||||||||||||||
| Interest rate spread (4)(6) | 2.60 | % | 2.75 | % | |||||||||||||||||||||||||||||
| Interest expense as a percent of average earning assets | 0.27 | % | 0.34 | % | |||||||||||||||||||||||||||||
| Net interest margin (tax equivalent basis) (5)(6) | 2.79 | % | 3.00 | % | |||||||||||||||||||||||||||||
| Total cost of deposits | 0.16 | % | 0.26 | % | |||||||||||||||||||||||||||||
| (1) Yields and interest income are presented on a taxable-equivalent basis using the federal statutory rate of 21%. | |||||||||||||||||||||||||||||||||
| (2) Average loan balances for June 30, 2021 and related yields have been restated to include, previously excluded, nonaccrual loans of $12.48 million. | |||||||||||||||||||||||||||||||||
| (1) June 30, 2022 and June 30, 2021 includes average PPP balances of $88.05 million and $786.50 million and related interest income of $3.62 million and $21.65 million, respectively. | |||||||||||||||||||||||||||||||||
| (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, | ||||||
| 2022 | 2021 | ||||||
| (unaudited) | (audited) | ||||||
| ASSETS | |||||||
| Cash and due from banks | $ | 72,592 | $ | 17,373 | |||
| Interest-bearing deposits at FRB – Richmond | 2,341,942 | 3,244,484 | |||||
| Interest-bearing deposits in financial institutions | 35,087 | 34,779 | |||||
| Total Cash and Cash Equivalents | 2,449,621 | 3,296,636 | |||||
| Securities available for sale, at fair value (amortized cost of $2,035,535 and $1,788,853, and allowance for credit losses of $1,111 and $210 at June 30, 2022 and December 31, 2021, respectively.) | 1,914,011 | 1,806,183 | |||||
| Securities held to maturity, at amortized cost (fair value $530,916 and $155,676 at June 30, 2022 and December 31, 2021, respectively.) | 549,083 | 154,221 | |||||
| Less: allowance for credit losses | (85 | ) | (94 | ) | |||
| Securities held to maturity, net of allowance for credit losses | 548,998 | 154,127 | |||||
| Other equity securities | 6,679 | 6,759 | |||||
| FHLB stock | 10,432 | 13,146 | |||||
| Total Securities | 2,480,120 | 1,980,215 | |||||
| Mortgage loans held for sale | 211,716 | 358,303 | |||||
| Loans, net of unearned income and deferred costs | 10,425,760 | 9,506,252 | |||||
| Less: allowance for credit losses | (104,019 | ) | (106,059 | ) | |||
| Net Loans | 10,321,741 | 9,400,193 | |||||
| Premises and equipment, net | 289,753 | 270,772 | |||||
| Goodwill | 457,162 | 457,187 | |||||
| Other intangible assets, net | 44,878 | 50,379 | |||||
| BOLI | 254,478 | 251,805 | |||||
| Other assets | 354,570 | 295,897 | |||||
| TOTAL ASSETS | $ | 16,864,039 | $ | 16,361,387 | |||
| LIABILITIES AND EQUITY | |||||||
| Deposits: | |||||||
| Noninterest-bearing demand | $ | 5,723,415 | $ | 5,546,665 | |||
| Interest-bearing: | |||||||
| Demand and money market accounts | 6,384,818 | 6,139,714 | |||||
| Savings | 388,364 | 371,356 | |||||
| Certificates of deposit | 1,499,514 | 1,515,891 | |||||
| Total Deposits | 13,996,111 | 13,573,626 | |||||
| Advances from the FHLB | 55,024 | 155,367 | |||||
| Subordinated debt, net | 497,061 | 249,652 | |||||
| FRB PPP lending facility | — | — | |||||
| Repurchase agreements and other borrowings | 47,922 | 76,797 | |||||
| Total Borrowings | 600,007 | 481,816 | |||||
| Other liabilities | 397,388 | 389,771 | |||||
| TOTAL LIABILITIES | 14,993,506 | 14,445,213 | |||||
| Preferred stock, authorized and unissued shares – 2,000,000 | — | — | |||||
| Common stock, $1.667 par: 150,000,000 shares authorized | |||||||
| 72,744,374 and 72,683,985 shares issued at | |||||||
| June 30, 2022 and December 31, 2021, respectively | 121,265 | 121,164 | |||||
| Capital surplus | 1,051,384 | 1,050,948 | |||||
| Retained earnings | 777,430 | 716,605 | |||||
| Common stock issued to deferred compensation trust, at cost | |||||||
| 945,183 and 911,458 shares at June 30, 2022 and December 31, 2021, respectively | (19,349 | ) | (18,257 | ) | |||
| Deferred compensation trust | 19,349 | 18,257 | |||||
| Accumulated other comprehensive income (loss) | (96,358 | ) | 10,597 | ||||
| TOTAL SHAREHOLDERS’ EQUITY | 1,853,721 | 1,899,314 | |||||
| Noncontrolling interest | 16,812 | 16,860 | |||||
| TOTAL EQUITY | 1,870,533 | 1,916,174 | |||||
| TOTAL LIABILITIES AND EQUITY | $ | 16,864,039 | $ | 16,361,387 | |||
| TOWNEBANK | |||||||||||||||
| Consolidated Statements of Income (unaudited) | |||||||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||
| June 30, | June 30, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| INTEREST INCOME: | |||||||||||||||
| Loans, including fees | $ | 101,043 | $ | 100,614 | $ | 196,005 | $ | 202,011 | |||||||
| Investment securities | 12,263 | 6,871 | 21,934 | 13,988 | |||||||||||
| Interest-bearing deposits in financial institutions and federal funds sold | 4,616 | 619 | 5,963 | 1,035 | |||||||||||
| Mortgage loans held for sale | 2,217 | 3,711 | 4,592 | 7,072 | |||||||||||
| Total interest income | 120,139 | 111,815 | 228,494 | 224,106 | |||||||||||
| INTEREST EXPENSE: | |||||||||||||||
| Deposits | 5,573 | 7,144 | 10,467 | 15,693 | |||||||||||
| Advances from the FHLB | 86 | 274 | 178 | 771 | |||||||||||
| Subordinated debt, net | 5,091 | 2,962 | 9,211 | 5,892 | |||||||||||
| Repurchase agreements and other borrowings | 49 | 291 | 94 | 616 | |||||||||||
| Total interest expense | 10,799 | 10,671 | 19,950 | 22,972 | |||||||||||
| Net interest income | 109,340 | 101,144 | 208,544 | 201,134 | |||||||||||
| PROVISION FOR CREDIT LOSSES | 56 | (10,055 | ) | (1,393 | ) | (14,082 | ) | ||||||||
| Net interest income after provision for credit losses | 109,284 | 111,199 | 209,937 | 215,216 | |||||||||||
| NONINTEREST INCOME: | |||||||||||||||
| Residential mortgage banking income, net | 13,176 | 25,524 | 27,814 | 62,937 | |||||||||||
| Insurance commissions and other title fees and income, net | 19,746 | 18,331 | 38,820 | 34,656 | |||||||||||
| Property management income, net | 9,452 | 7,091 | 26,599 | 22,574 | |||||||||||
| Real estate commission income, net | 3,412 | 3,893 | 5,966 | 6,344 | |||||||||||
| Service charges on deposit accounts | 2,446 | 2,391 | 5,020 | 4,580 | |||||||||||
| Credit card merchant fees, net | 1,906 | 1,667 | 3,281 | 2,969 | |||||||||||
| BOLI | 1,853 | 1,541 | 3,570 | 3,060 | |||||||||||
| Other income | 5,649 | 5,487 | 12,778 | 10,324 | |||||||||||
| Net gain/(loss) on investment securities | — | 252 | — | 1,252 | |||||||||||
| Total noninterest income | 57,640 | 66,177 | 123,848 | 148,696 | |||||||||||
| NONINTEREST EXPENSE: | |||||||||||||||
| Salaries and employee benefits | 64,892 | 61,365 | 128,855 | 119,801 | |||||||||||
| Occupancy expense | 8,342 | 7,559 | 16,669 | 15,630 | |||||||||||
| Furniture and equipment | 3,643 | 3,622 | 7,333 | 7,134 | |||||||||||
| Amortization – intangibles | 2,684 | 2,719 | 5,501 | 5,442 | |||||||||||
| Software expense | 4,762 | 4,494 | 9,254 | 8,688 | |||||||||||
| Data processing | 3,556 | 3,414 | 7,150 | 6,652 | |||||||||||
| Professional fees | 1,761 | 2,259 | 3,788 | 4,598 | |||||||||||
| Advertising and marketing | 4,091 | 3,257 | 8,218 | 6,225 | |||||||||||
| Other expenses | 14,994 | 16,705 | 31,336 | 28,549 | |||||||||||
| Total noninterest expense | 108,725 | 105,394 | 218,104 | 202,719 | |||||||||||
| Income before income tax expense and noncontrolling interest | 58,199 | 71,982 | 115,681 | 161,193 | |||||||||||
| Provision for income tax expense | 11,145 | 13,980 | 22,377 | 30,559 | |||||||||||
| Net income | $ | 47,054 | $ | 58,002 | $ | 93,304 | $ | 130,634 | |||||||
| Net income attributable to noncontrolling interest | (507 | ) | (2,199 | ) | (1,171 | ) | (5,835 | ) | |||||||
| Net income attributable to TowneBank | $ | 46,547 | $ | 55,803 | $ | 92,133 | $ | 124,799 | |||||||
| Per common share information | |||||||||||||||
| Basic earnings | $ | 0.64 | $ | 0.77 | $ | 1.27 | $ | 1.72 | |||||||
| Diluted earnings | $ | 0.64 | $ | 0.77 | $ | 1.27 | $ | 1.72 | |||||||
| Cash dividends declared | $ | 0.23 | $ | 0.20 | $ | 0.43 | $ | 0.38 | |||||||
| TOWNEBANK | |||||||||||||||||||
| Consolidated Balance Sheets – Five Quarter Trend | |||||||||||||||||||
| (dollars in thousands, except share data) | |||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||||
| 2022 | 2022 | 2021 | 2021 | 2021 | |||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (audited) | (unaudited) | |||||||||||||||
| ASSETS | |||||||||||||||||||
| Cash and due from banks | $ | 72,592 | $ | 74,991 | $ | 17,373 | $ | 75,370 | $ | 117,797 | |||||||||
| Interest-bearing deposits at FRB – Richmond | 2,341,942 | 2,857,327 | 3,244,484 | 3,155,039 | 2,970,490 | ||||||||||||||
| Interest-bearing deposits in financial institutions | 35,087 | 34,684 | 34,779 | 33,506 | 31,971 | ||||||||||||||
| Total Cash and Cash Equivalents | 2,449,621 | 2,967,002 | 3,296,636 | 3,263,915 | 3,120,258 | ||||||||||||||
| Securities available for sale | 1,914,011 | 1,846,540 | 1,806,183 | 1,560,402 | 1,454,421 | ||||||||||||||
| Securities held to maturity | 549,083 | 433,384 | 154,221 | 14,898 | 15,389 | ||||||||||||||
| Less: allowance for credit losses | (85 | ) | (92 | ) | (94 | ) | (94 | ) | (97 | ) | |||||||||
| Securities held to maturity, net of allowance for credit losses | 548,998 | 433,292 | 154,127 | 14,804 | 15,292 | ||||||||||||||
| Other equity securities | 6,679 | 6,789 | 6,759 | 6,621 | 6,395 | ||||||||||||||
| FHLB stock | 10,432 | 10,432 | 13,146 | 13,146 | 16,909 | ||||||||||||||
| Total Securities | 2,480,120 | 2,297,053 | 1,980,215 | 1,594,973 | 1,493,017 | ||||||||||||||
| Mortgage loans held for sale | 211,716 | 234,620 | 358,303 | 431,846 | 554,447 | ||||||||||||||
| Loans, net of unearned income and deferred costs | 10,425,760 | 9,909,308 | 9,506,252 | 9,297,565 | 9,423,578 | ||||||||||||||
| Less: allowance for credit losses | (104,019 | ) | (103,833 | ) | (106,059 | ) | (107,177 | ) | (108,130 | ) | |||||||||
| Net Loans | 10,321,741 | 9,805,475 | 9,400,193 | 9,190,388 | 9,315,448 | ||||||||||||||
| Premises and equipment, net | 289,753 | 277,764 | 270,772 | 270,810 | 265,644 | ||||||||||||||
| Goodwill | 457,162 | 457,162 | 457,187 | 457,187 | 452,328 | ||||||||||||||
| Other intangible assets, net | 44,878 | 47,562 | 50,379 | 50,839 | 42,271 | ||||||||||||||
| BOLI | 254,478 | 253,112 | 251,805 | 249,862 | 249,213 | ||||||||||||||
| Other assets | 354,570 | 326,838 | 295,897 | 301,552 | 311,209 | ||||||||||||||
| TOTAL ASSETS | $ | 16,864,039 | $ | 16,666,588 | $ | 16,361,387 | $ | 15,811,372 | $ | 15,803,835 | |||||||||
| LIABILITIES AND EQUITY | |||||||||||||||||||
| Deposits: | |||||||||||||||||||
| Noninterest-bearing demand | $ | 5,723,415 | $ | 5,532,337 | $ | 5,546,665 | $ | 5,394,952 | $ | 5,243,074 | |||||||||
| Interest-bearing: | |||||||||||||||||||
| Demand and money market accounts | 6,384,818 | 6,432,005 | 6,139,714 | 5,681,181 | 5,373,146 | ||||||||||||||
| Savings | 388,364 | 393,119 | 371,356 | 366,165 | 349,552 | ||||||||||||||
| Certificates of deposit | 1,499,514 | 1,414,339 | 1,515,891 | 1,571,752 | 1,998,828 | ||||||||||||||
| Total Deposits | 13,996,111 | 13,771,800 | 13,573,626 | 13,014,050 | 12,964,600 | ||||||||||||||
| Advances from the FHLB | 55,024 | 55,196 | 155,367 | 155,537 | 255,706 | ||||||||||||||
| Subordinated debt, net | 497,061 | 496,757 | 249,652 | 249,503 | 249,353 | ||||||||||||||
| FRB PPP lending facility | — | — | — | — | — | ||||||||||||||
| Repurchase agreements and other borrowings | 47,922 | 75,988 | 76,797 | 82,413 | 85,042 | ||||||||||||||
| Total Borrowings | 600,007 | 627,941 | 481,816 | 487,453 | 590,101 | ||||||||||||||
| Other liabilities | 397,388 | 387,087 | 389,771 | 409,435 | 379,278 | ||||||||||||||
| TOTAL LIABILITIES | 14,993,506 | 14,786,828 | 14,445,213 | 13,910,938 | 13,933,979 | ||||||||||||||
| Preferred stock | |||||||||||||||||||
| Authorized shares – 2,000,000 | — | — | — | — | — | ||||||||||||||
| Common stock, $1.667 par value | 121,265 | 121,231 | 121,164 | 121,163 | 121,144 | ||||||||||||||
| Capital surplus | 1,051,384 | 1,050,387 | 1,050,948 | 1,049,367 | 1,048,332 | ||||||||||||||
| Retained earnings | 777,430 | 747,614 | 716,605 | 690,960 | 655,095 | ||||||||||||||
| Common stock issued to deferred compensation | |||||||||||||||||||
| trust, at cost | (19,349 | ) | (18,323 | ) | (18,257 | ) | (18,076 | ) | (18,076 | ) | |||||||||
| Deferred compensation trust | 19,349 | 18,323 | 18,257 | 18,076 | 18,076 | ||||||||||||||
| Accumulated other comprehensive income (loss) | (96,358 | ) | (56,712 | ) | 10,597 | 21,597 | 29,273 | ||||||||||||
| TOTAL SHAREHOLDERS’ EQUITY | 1,853,721 | 1,862,520 | 1,899,314 | 1,883,087 | 1,853,844 | ||||||||||||||
| Noncontrolling interest | 16,812 | 17,240 | 16,860 | 17,347 | 16,012 | ||||||||||||||
| TOTAL EQUITY | 1,870,533 | 1,879,760 | 1,916,174 | 1,900,434 | 1,869,856 | ||||||||||||||
| TOTAL LIABILITIES AND EQUITY | $ | 16,864,039 | $ | 16,666,588 | $ | 16,361,387 | $ | 15,811,372 | $ | 15,803,835 | |||||||||
| 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, | |||||||||||||||
| 2022 | 2022 | 2021 | 2021 | 2021 | |||||||||||||||
| INTEREST INCOME: | |||||||||||||||||||
| Loans, including fees | $ | 101,043 | $ | 94,962 | $ | 95,054 | $ | 98,258 | $ | 100,614 | |||||||||
| Investment securities | 12,263 | 9,671 | 10,484 | 7,000 | 6,871 | ||||||||||||||
| Interest-bearing deposits in financial institutions and federal funds sold | 4,616 | 1,347 | 1,215 | 1,182 | 619 | ||||||||||||||
| Mortgage loans held for sale | 2,217 | 2,375 | 2,750 | 3,405 | 3,711 | ||||||||||||||
| Total interest income | 120,139 | 108,355 | 109,503 | 109,845 | 111,815 | ||||||||||||||
| INTEREST EXPENSE: | |||||||||||||||||||
| Deposits | 5,573 | 4,894 | 5,389 | 6,028 | 7,144 | ||||||||||||||
| Advances from the FHLB | 86 | 92 | 206 | 247 | 274 | ||||||||||||||
| Subordinated debt | 5,091 | 4,120 | 2,962 | 2,962 | 2,962 | ||||||||||||||
| Repurchase agreements and other borrowings | 49 | 45 | 154 | 165 | 291 | ||||||||||||||
| Total interest expense | 10,799 | 9,151 | 8,711 | 9,402 | 10,671 | ||||||||||||||
| Net interest income | 109,340 | 99,204 | 100,792 | 100,443 | 101,144 | ||||||||||||||
| PROVISION FOR CREDIT LOSSES | 56 | (1,449 | ) | (1,110 | ) | (1,582 | ) | (10,055 | ) | ||||||||||
| Net interest income after provision for credit losses | 109,284 | 100,653 | 101,902 | 102,025 | 111,199 | ||||||||||||||
| NONINTEREST INCOME: | |||||||||||||||||||
| Residential mortgage banking income, net | 13,176 | 14,638 | 20,945 | 25,422 | 25,524 | ||||||||||||||
| Insurance commissions and other title fees and income, net | 19,746 | 19,074 | 15,486 | 17,398 | 18,331 | ||||||||||||||
| Property management income, net | 9,452 | 17,147 | 9,099 | 10,502 | 7,091 | ||||||||||||||
| Real estate commission income, net | 3,412 | 2,554 | 3,165 | 3,781 | 3,893 | ||||||||||||||
| Service charges on deposit accounts | 2,446 | 2,574 | 2,479 | 2,524 | 2,391 | ||||||||||||||
| Credit card merchant fees, net | 1,906 | 1,375 | 1,412 | 1,660 | 1,667 | ||||||||||||||
| BOLI | 1,853 | 1,717 | 1,904 | 2,301 | 1,541 | ||||||||||||||
| Other income | 5,649 | 7,129 | 5,142 | 6,045 | 5,487 | ||||||||||||||
| Net gain/(loss) on investment securities | — | — | — | — | 252 | ||||||||||||||
| Total noninterest income | 57,640 | 66,208 | 59,632 | 69,633 | 66,177 | ||||||||||||||
| NONINTEREST EXPENSE: | |||||||||||||||||||
| Salaries and employee benefits | 64,892 | 63,963 | 64,814 | 61,230 | 61,365 | ||||||||||||||
| Occupancy expense | 8,342 | 8,327 | 8,371 | 7,656 | 7,559 | ||||||||||||||
| Furniture and equipment | 3,643 | 3,690 | 3,528 | 3,513 | 3,622 | ||||||||||||||
| Amortization – intangibles | 2,684 | 2,817 | 2,935 | 2,750 | 2,719 | ||||||||||||||
| Software expense | 4,762 | 4,492 | 4,014 | 4,209 | 4,494 | ||||||||||||||
| Data processing | 3,556 | 3,594 | 3,524 | 3,603 | 3,414 | ||||||||||||||
| Professional fees | 1,761 | 2,027 | 2,723 | 2,227 | 2,259 | ||||||||||||||
| Advertising and marketing | 4,091 | 4,127 | 3,414 | 3,865 | 3,257 | ||||||||||||||
| Other expenses | 14,994 | 16,342 | 17,144 | 15,033 | 16,705 | ||||||||||||||
| Total noninterest expense | 108,725 | 109,379 | 110,467 | 104,086 | 105,394 | ||||||||||||||
| Income before income tax expense and noncontrolling interest | 58,199 | 57,482 | 51,067 | 67,572 | 71,982 | ||||||||||||||
| Provision for income tax expense | 11,145 | 11,232 | 9,410 | 14,829 | 13,980 | ||||||||||||||
| Net income | 47,054 | 46,250 | 41,657 | 52,743 | 58,002 | ||||||||||||||
| Net income attributable to noncontrolling interest | (507 | ) | (664 | ) | (1,474 | ) | (2,343 | ) | (2,199 | ) | |||||||||
| Net income attributable to TowneBank | $ | 46,547 | $ | 45,586 | $ | 40,183 | $ | 50,400 | $ | 55,803 | |||||||||
| Per common share information | |||||||||||||||||||
| Basic earnings | $ | 0.64 | $ | 0.63 | $ | 0.55 | $ | 0.70 | $ | 0.77 | |||||||||
| Diluted earnings | $ | 0.64 | $ | 0.63 | $ | 0.55 | $ | 0.69 | $ | 0.77 | |||||||||
| Basic weighted average shares outstanding | 72,559,537 | 72,498,075 | 72,525,504 | 72,506,877 | 72,468,094 | ||||||||||||||
| Diluted weighted average shares outstanding | 72,568,886 | 72,562,122 | 72,624,610 | 72,591,281 | 72,560,234 | ||||||||||||||
| Cash dividends declared | $ | 0.23 | $ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.20 | |||||||||
| TOWNEBANK | ||||||||||||||||||||||||||
| Banking Segment Financial Information (unaudited) | ||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | Increase/(Decrease) | ||||||||||||||||||||||||
| June 30, | March 31, | June 30, | 2022 over 2021 | |||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2022 | 2021 | Amount | Percent | ||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||
| Net interest income | $ | 107,417 | $ | 98,135 | $ | 96,770 | $ | 204,187 | $ | 195,739 | $ | 8,448 | 4.32 | % | ||||||||||||
| Service charges on deposit | ||||||||||||||||||||||||||
| accounts | 2,446 | 2,391 | 2,574 | 5,020 | 4,580 | 440 | 9.61 | % | ||||||||||||||||||
| Credit card merchant fees | 1,906 | 1,667 | 1,375 | 3,281 | 2,969 | 312 | 10.51 | % | ||||||||||||||||||
| Other income | 5,042 | 5,403 | 6,710 | 11,751 | 10,375 | 1,376 | 13.26 | % | ||||||||||||||||||
| Subtotal | 9,394 | 9,461 | 10,659 | 20,052 | 17,924 | 2,128 | 11.87 | % | ||||||||||||||||||
| Net gain/(loss) on investment securities | — | 252 | — | — | 1,252 | (1,252 | ) | (100.00)% | ||||||||||||||||||
| Total noninterest income | 9,394 | 9,713 | 10,659 | 20,052 | 19,176 | 876 | 4.57 | % | ||||||||||||||||||
| Total revenue | 116,811 | 107,848 | 107,429 | 224,239 | 214,915 | 9,324 | 4.34 | % | ||||||||||||||||||
| Provision for credit losses | (160 | ) | (9,532 | ) | (1,833 | ) | (1,993 | ) | (12,932 | ) | 10,939 | (84.59)% | ||||||||||||||
| Expenses | ||||||||||||||||||||||||||
| Salaries and employee benefits | 38,673 | 35,776 | 37,059 | 75,733 | 67,637 | 8,096 | 11.97 | % | ||||||||||||||||||
| Occupancy expense | 5,633 | 5,012 | 5,659 | 11,292 | 10,558 | 734 | 6.95 | % | ||||||||||||||||||
| Furniture and equipment | 2,747 | 2,816 | 2,709 | 5,456 | 5,484 | (28 | ) | (0.51)% | ||||||||||||||||||
| Amortization of intangibles | 777 | 912 | 827 | 1,603 | 1,875 | (272 | ) | (14.51)% | ||||||||||||||||||
| Other expenses | 17,856 | 18,392 | 18,228 | 36,083 | 32,441 | 3,642 | 11.23 | % | ||||||||||||||||||
| Total expenses | 65,686 | 62,908 | 64,482 | 130,167 | 117,995 | 12,172 | 10.32 | % | ||||||||||||||||||
| Income before income tax, corporate allocation and noncontrolling interest | 51,285 | 54,472 | 44,780 | 96,065 | 109,852 | (13,787 | ) | (12.55)% | ||||||||||||||||||
| Corporate allocation | 1,325 | 1,249 | 1,292 | 2,617 | 2,540 | 77 | 3.03 | % | ||||||||||||||||||
| Income before income tax provision and noncontrolling interest | 52,610 | 55,721 | 46,072 | 98,682 | 112,392 | (13,710 | ) | (12.20)% | ||||||||||||||||||
| Provision for income tax expense | 9,756 | 10,535 | 8,519 | 18,275 | 20,236 | (1,961 | ) | (9.69)% | ||||||||||||||||||
| Net income | 42,854 | 45,186 | 37,553 | 80,407 | 92,156 | (11,749 | ) | (12.75)% | ||||||||||||||||||
| Noncontrolling interest | — | 1 | — | — | (3 | ) | 3 | (100.00)% | ||||||||||||||||||
| Net income attributable to TowneBank | $ | 42,854 | $ | 45,187 | $ | 37,553 | $ | 80,407 | $ | 92,153 | $ | (11,746 | ) | (12.75)% | ||||||||||||
| Efficiency ratio (non-GAAP) | 55.57 | % | 57.62 | % | 59.25 | % | 57.33 | % | 54.35 | % | 2.98 | % | 5.48 | % | ||||||||||||
| TOWNEBANK | ||||||||||||||||||||||||||
| Realty Segment Financial Information (unaudited) | ||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | Increase/(Decrease) | ||||||||||||||||||||||||
| June 30, | March 31, | June 30, | 2022 over 2021 | |||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2022 | 2021 | Amount | Percent | ||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||
| Residential mortgage brokerage income, net |
$ | 14,858 | $ | 26,383 | $ | 15,906 | $ | 30,765 | $ | 64,260 | $ | (33,495 | ) | (52.12)% | ||||||||||||
| Real estate brokerage income, net | 3,412 | 3,893 | 2,554 | 5,966 | 6,344 | (378 | ) | (5.96)% | ||||||||||||||||||
| Title insurance and settlement fees | 561 | 688 | 504 | 1,065 | 1,212 | (147 | ) | (12.13)% | ||||||||||||||||||
| Property management fees, net | 9,452 | 7,091 | 17,147 | 26,599 | 22,574 | 4,025 | 17.83 | % | ||||||||||||||||||
| Income from unconsolidated subsidiary | 115 | 289 | 167 | 282 | 695 | (413 | ) | (59.42)% | ||||||||||||||||||
| Net interest and other income | 2,411 | 3,332 | 2,932 | 5,343 | 6,068 | (725 | ) | (11.95)% | ||||||||||||||||||
| Total revenue | 30,809 | 41,676 | 39,210 | 70,020 | 101,153 | (31,133 | ) | (30.78)% | ||||||||||||||||||
| Provision for credit losses | 216 | (523 | ) | 384 | 600 | (1,150 | ) | 1,750 | (152.17)% | |||||||||||||||||
| Expenses | ||||||||||||||||||||||||||
| Salaries and employee benefits | 16,501 | 16,018 | 17,291 | 33,791 | 32,865 | 926 | 2.82 | % | ||||||||||||||||||
| Occupancy expense | 1,997 | 1,935 | 1,898 | 3,895 | 3,806 | 89 | 2.34 | % | ||||||||||||||||||
| Furniture and equipment | 707 | 592 | 761 | 1,467 | 1,242 | 225 | 18.12 | % | ||||||||||||||||||
| Amortization of intangible assets | 816 | 590 | 816 | 1,633 | 1,180 | 453 | 38.39 | % | ||||||||||||||||||
| Other expenses | 9,932 | 10,442 | 10,852 | 20,785 | 19,669 | 1,116 | 5.67 | % | ||||||||||||||||||
| Total expenses | 29,953 | 29,577 | 31,618 | 61,571 | 58,762 | 2,809 | 4.78 | % | ||||||||||||||||||
| Income before income tax, corporate allocation and noncontrolling interest | 640 | 12,622 | 7,208 | 7,849 | 43,541 | (35,692 | ) | (81.97)% | ||||||||||||||||||
| Corporate allocation | (1,000 | ) | (1,000 | ) | (1,000 | ) | (2,000 | ) | (2,000 | ) | — | — | % | |||||||||||||
| Income before income tax provision and noncontrolling interest | (360 | ) | 11,622 | 6,208 | 5,849 | 41,541 | (35,692 | ) | (85.92)% | |||||||||||||||||
| Provision for income tax expense | (144 | ) | 2,255 | 1,374 | 1,230 | 8,471 | (7,241 | ) | (85.48)% | |||||||||||||||||
| Net income | (216 | ) | 9,367 | 4,834 | 4,619 | 33,070 | (28,451 | ) | (86.03)% | |||||||||||||||||
| Noncontrolling interest | (507 | ) | (2,200 | ) | (664 | ) | (1,171 | ) | (5,832 | ) | 4,661 | (79.92)% | ||||||||||||||
| Net income attributable to TowneBank | $ | (723 | ) | $ | 7,167 | $ | 4,170 | $ | 3,448 | $ | 27,238 | $ | (23,790 | ) | (87.34)% | |||||||||||
| Efficiency ratio(non-GAAP) | 94.57 | % | 69.55 | % | 78.56 | % | 85.60 | % | 56.93 | % | 28.67 | % | 50.36 | % | ||||||||||||
| TOWNEBANK | ||||||||||||||||||||||||||
| Insurance Segment Financial Information (unaudited) | ||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | Increase/(Decrease) | ||||||||||||||||||||||||
| June 30, | March 31, | June 30, | 2022 over 2021 | |||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2022 | 2021 | Amount | Percent | ||||||||||||||||||||
| Commission and fee income | ||||||||||||||||||||||||||
| Property and casualty | $ | 16,546 | $ | 14,941 | $ | 15,337 | $ | 31,884 | $ | 29,129 | $ | 2,755 | 9.46 | % | ||||||||||||
| Employee benefits | 3,924 | 3,430 | 4,161 | 8,085 | 7,315 | 770 | 10.53 | % | ||||||||||||||||||
| Specialized benefit services | 160 | 163 | 170 | 330 | 329 | 1 | 0.30 | % | ||||||||||||||||||
| Total commissions and fees | 20,630 | 18,534 | 19,668 | 40,299 | 36,773 | 3,526 | 9.59 | % | ||||||||||||||||||
| Contingency and bonus revenue | 2,994 | 3,323 | 3,404 | 6,398 | 5,082 | 1,316 | 25.90 | % | ||||||||||||||||||
| Other income | 15 | 43 | 33 | 48 | 117 | (69 | ) | (58.97)% | ||||||||||||||||||
| Total revenue | 23,639 | 21,900 | 23,105 | 46,745 | 41,972 | 4,773 | 11.37 | % | ||||||||||||||||||
| Employee commission expense | 4,279 | 4,103 | 4,332 | 8,612 | 8,210 | 402 | 4.90 | % | ||||||||||||||||||
| Revenue, net of commission expense | 19,360 | 17,797 | 18,773 | 38,133 | 33,762 | 4,371 | 12.95 | % | ||||||||||||||||||
| Salaries and employee benefits | 9,718 | 9,571 | 9,613 | 19,331 | 19,299 | 32 | 0.17 | % | ||||||||||||||||||
| Occupancy expense | 712 | 612 | 770 | 1,482 | 1,266 | 216 | 17.06 | % | ||||||||||||||||||
| Furniture and equipment | 189 | 214 | 220 | 410 | 408 | 2 | 0.49 | % | ||||||||||||||||||
| Amortization of intangible assets | 1,091 | 1,217 | 1,174 | 2,265 | 2,387 | (122 | ) | (5.11)% | ||||||||||||||||||
| Other expenses | 1,376 | 1,295 | 1,502 | 2,878 | 2,602 | 276 | 10.61 | % | ||||||||||||||||||
| Total operating expenses | 13,086 | 12,909 | 13,279 | 26,366 | 25,962 | 404 | 1.56 | % | ||||||||||||||||||
| Income before income tax, corporate allocation and noncontrolling interest | 6,274 | 4,888 | 5,494 | 11,767 | 7,800 | 3,967 | 50.86 | % | ||||||||||||||||||
| Corporate allocation | (325 | ) | (249 | ) | (292 | ) | (617 | ) | (540 | ) | (77 | ) | 14.26 | % | ||||||||||||
| Income before income tax provision and noncontrolling interest | 5,949 | 4,639 | 5,202 | 11,150 | 7,260 | 3,890 | 53.58 | % | ||||||||||||||||||
| Provision for income tax expense | 1,533 | 1,190 | 1,339 | 2,872 | 1,852 | 1,020 | 55.08 | % | ||||||||||||||||||
| Net income | 4,416 | 3,449 | 3,863 | 8,278 | 5,408 | 2,870 | 53.07 | % | ||||||||||||||||||
| Noncontrolling interest | — | — | — | — | — | — | N/M | |||||||||||||||||||
| Net income attributable to TowneBank | $ | 4,416 | $ | 3,449 | $ | 3,863 | $ | 8,278 | $ | 5,408 | 2,870 | 53.07 | % | |||||||||||||
| Provision for income taxes | 1,533 | 1,190 | 1,339 | 2,872 | 1,852 | 1,020 | 55.08 | % | ||||||||||||||||||
| Depreciation, amortization and interest expense | 1,220 | 1,361 | 1,319 | 2,539 | 2,669 | (130 | ) | (4.87)% | ||||||||||||||||||
| EBITDA (non-GAAP) | $ | 7,169 | $ | 6,000 | $ | 6,521 | $ | 13,689 | $ | 9,929 | $ | 3,760 | 37.87 | % | ||||||||||||
| Efficiency ratio (non-GAAP) | 61.96 | % | 65.70 | % | 64.48 | % | 63.20 | % | 69.83 | % | (6.63)% | (9.49)% | ||||||||||||||
| 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, | |||||||||||||||
| 2022 | 2021 | 2022 | 2022 | 2021 | |||||||||||||||
| Return on average assets (GAAP) | 1.13 | % | 1.48 | % | 1.13 | % | 1.13 | % | 1.69 | % | |||||||||
| Impact of excluding average goodwill and other intangibles and amortization |
0.09 | % | 0.11 | % | 0.10 | % | 0.09 | % | 0.12 | % | |||||||||
| Return on average tangible assets (non-GAAP) | 1.22 | % | 1.59 | % | 1.23 | % | 1.22 | % | 1.81 | % | |||||||||
| Return on average equity (GAAP) | 9.94 | % | 12.21 | % | 9.73 | % | 9.83 | % | 13.86 | % | |||||||||
| Impact of excluding average goodwill and other intangibles and amortization |
4.26 | % | 5.17 | % | 4.18 | % | 4.23 | % | 5.88 | % | |||||||||
| Return on average tangible equity (non-GAAP) | 14.20 | % | 17.38 | % | 13.91 | % | 14.06 | % | 19.74 | % | |||||||||
| Return on average common equity (GAAP) | 10.03 | % | 12.31 | % | 9.81 | % | 9.92 | % | 13.98 | % | |||||||||
| Impact of excluding average goodwill and other intangibles and amortization |
4.34 | % | 5.26 | % | 4.27 | % | 4.30 | % | 5.98 | % | |||||||||
| Return on average tangible common equity (non-GAAP) |
14.37 | % | 17.57 | % | 14.08 | % | 14.22 | % | 19.96 | % | |||||||||
| Book value (GAAP) | $ | 25.48 | $ | 25.51 | $ | 25.61 | $ | 25.48 | $ | 25.51 | |||||||||
| Impact of excluding average goodwill and other intangibles and amortization |
(6.90 | ) | (6.81 | ) | (6.94 | ) | (6.90 | ) | (6.81 | ) | |||||||||
| Tangible book value (non-GAAP) | $ | 18.58 | $ | 18.70 | $ | 18.67 | $ | 18.58 | $ | 18.70 | |||||||||
| Efficiency ratio (GAAP) | 65.11 | % | 62.99 | % | 66.13 | % | 65.62 | % | 57.95 | % | |||||||||
| Impact of exclusions | (1.60)% | (1.53)% | (1.71)% | (1.66)% | (1.36)% | ||||||||||||||
| Efficiency ratio (non-GAAP) | 63.51 | % | 61.46 | % | 64.42 | % | 63.96 | % | 56.59 | % | |||||||||
| Average assets (GAAP) | $ | 16,529,810 | $ | 15,143,888 | $ | 16,311,998 | $ | 16,421,506 | $ | 14,869,675 | |||||||||
| Less: average goodwill and intangible assets | 503,678 | 496,059 | 506,496 | 505,079 | 496,748 | ||||||||||||||
| Average tangible assets (non-GAAP) | $ | 16,026,132 | $ | 14,647,829 | $ | 15,805,502 | $ | 15,916,427 | $ | 14,372,927 | |||||||||
| Average equity (GAAP) | $ | 1,878,361 | $ | 1,833,592 | $ | 1,900,267 | $ | 1,889,254 | $ | 1,815,778 | |||||||||
| Less: average goodwill and intangible assets | 503,678 | 496,059 | 506,496 | 505,079 | 496,748 | ||||||||||||||
| Average tangible equity (non-GAAP) | $ | 1,374,683 | $ | 1,337,533 | $ | 1,393,771 | $ | 1,384,175 | $ | 1,319,030 | |||||||||
| Average common equity (GAAP) | $ | 1,861,635 | $ | 1,818,664 | $ | 1,884,101 | $ | 1,872,806 | $ | 1,800,829 | |||||||||
| Less: average goodwill and intangible assets | 503,678 | 496,059 | 506,496 | 505,079 | 496,748 | ||||||||||||||
| Average tangible common equity (non-GAAP) | $ | 1,357,957 | $ | 1,322,605 | $ | 1,377,605 | $ | 1,367,727 | $ | 1,304,081 | |||||||||
| Net Income (GAAP) | $ | 46,547 | $ | 55,803 | $ | 45,586 | $ | 92,133 | $ | 124,799 | |||||||||
| Amortization of Intangibles, net of tax | 2,120 | 2,148 | 2,225 | 4,346 | 4,299 | ||||||||||||||
| Tangible net income (non-GAAP) | $ | 48,667 | $ | 57,951 | $ | 47,811 | $ | 96,479 | $ | 129,098 | |||||||||
| Net Income (GAAP) | $ | 46,547 | $ | 55,803 | $ | 45,586 | $ | 92,133 | $ | 124,799 | |||||||||
| Provision for credit losses | 56 | (10,055 | ) | (1,449 | ) | (1,393 | ) | (14,082 | ) | ||||||||||
| Provision for income tax | 11,145 | 13,980 | 11,232 | 22,377 | 30,559 | ||||||||||||||
| Other nonrecurring (income) loss | — | — | — | — | 30 | ||||||||||||||
| Pre-provision, pre-tax net revenues (non-GAAP) | $ | 57,748 | $ | 59,728 | $ | 55,369 | $ | 113,117 | $ | 141,306 | |||||||||
| Total Revenue (GAAP) | $ | 166,980 | $ | 167,321 | $ | 165,412 | $ | 332,392 | $ | 349,830 | |||||||||
| Net (gain)/loss on investment securities | — | (252 | ) | — | — | (1,252 | ) | ||||||||||||
| Other nonrecurring (income) loss | — | — | — | — | 30 | ||||||||||||||
| Total Revenue for efficiency calculation (non-GAAP) | $ | 166,980 | $ | 167,069 | $ | 165,412 | $ | 332,392 | $ | 348,608 | |||||||||
| Noninterest expense (GAAP) | $ | 108,725 | $ | 105,394 | $ | 109,379 | $ | 218,104 | $ | 202,719 | |||||||||
| Less: amortization of intangibles | 2,684 | 2,719 | 2,817 | 5,501 | 5,442 | ||||||||||||||
| Noninterest expense net of amortization (non-GAAP) | $ | 106,041 | $ | 102,675 | $ | 106,562 | $ | 212,603 | $ | 197,277 | |||||||||
