TOWN - TowneBank Reports First Quarter 2020 Earnings

April, 27 2020 08:30 AM Towne Bank

SUFFOLK, Va., April 27, 2020 (GLOBE NEWSWIRE) -- TowneBank (the “Company”) (NASDAQ: TOWN) today reported earnings for the quarter ended March 31, 2020 of $26.38 million, or $0.36 per diluted share, compared to $31.41 million, or $0.44 per diluted share, for the quarter ended March 31, 2019.

“Our Company began 2020 on strong footing with loan demand exceeding expectations. However, traditional performance measures such as growth and profitability were temporarily superseded by challenges that are unprecedented in the history of this country. Our slogan of “Serving Others and Enriching Lives” emerged center stage as we engaged our members, communities and colleagues to understand how we can help them navigate the current environment. Through our participation in the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), we assisted our members with nearly 5,000 loans totaling $1 billion while also providing safe access to our banking offices and providing work at home solutions for a large number of Towne teammates. Our strong liquidity and capital positions enabled us to help our members manage through these difficult times,” said G. Robert Aston, Jr., Executive Chairman.

Highlights for the First Quarter of 2020 Compared to the First Quarter of 2019:

Total revenues were $137.70 million, an increase of $3.84 million, or 2.87%.
Loans held for investment increased $678.83 million, or 8.38%, from March 31, 2019, and $364.91 million, or 4.33%, from December 31, 2019, or 17.43% on an annualized basis.
Total deposits were $9.31 billion, an increase of $0.58 billion, or 6.60%, compared to prior year and $0.04 billion, or 0.40%, from December 31, 2019, or 1.61% on an annualized basis.
Noninterest bearing deposits increased by 8.77%, to $3.06 billion, representing 32.88% of total deposits. Compared to the linked quarter, noninterest bearing deposits increased 3.70%, or 14.89% on an annualized basis.
Annualized return on common shareholders' equity was 6.42% and annualized return on average tangible common shareholders' equity was 10.01% (non-GAAP).
Net interest margin for the quarter was 3.35% and taxable equivalent net interest margin was 3.37% (non-GAAP).
Effective tax rate of 19.00% in the quarter compared to 20.72% in the first quarter of 2019.

“Now more than ever it is important to know Your Banker; not your Bank. Our style of Hometown Banking was redefined when social distancing and quarantines became daily buzz-words in our vocabulary, workplace and social activities. Under challenging conditions our colleagues are providing uninterrupted services and offering solutions to help businesses and households. We appreciate the trust and confidence of the communities we serve and our stakeholders,” stated J. Morgan Davis, President and Chief Executive Officer.

Quarterly Net Interest Income Compared to the First Quarter of 2019:

Net interest income was $89.50 million compared to $87.47 million at March 31, 2019.
Taxable equivalent net interest margin (non-GAAP) was 3.37%, including accretion of 13 basis points, compared to 3.57%, including accretion of 11 basis points, for 2019.
Average loans held for investment, with an average yield of 4.73%, represented 79.60% of average earning assets at March 31, 2020 compared to an average yield of 5.06% and 80.16% of average earning assets in the first quarter of 2019.
Total cost of deposits decreased to 0.83% from 0.93% at March 31, 2019.
Average interest-earning assets totaled $10.74 billion at March 31, 2020 compared to $10.02 billion at March 31, 2019, an increase of 7.22%.
Average interest-bearing liabilities totaled $7.16 billion, an increase of $0.34 billion from prior year.

Quarterly Provision for Credit Losses:

Effective January 1, 2020, we adopted the current expected credit loss (CECL) accounting standard, which requires an allowance for loans and unfunded commitments, as well as credit losses for debt securities. The cumulative effect adjustment from the change in accounting policies resulted in an increase in our allowance of $3.01 million for loans and unfunded commitments and $0.23 million for debt securities, with a corresponding decrease in retained earnings (pre-tax).
Recorded a quarterly provision for credit losses for on-balance sheet loans of $5.76 million compared to $1.44 million one year ago and $3.60 million in the linked quarter. This increase is primarily attributable to forecasted credit weaknesses due to deteriorating economic conditions driven by the current COVID-19 pandemic. Expected loss estimates consider the impacts of decreased economic activity and higher unemployment and the mitigating benefits of government stimulus and industry wide loan modification efforts.
Net loan charge-offs were $0.56 million compared to $0.23 million one year prior. The ratio of net loan charge-offs to average loans on an annualized basis was 0.03% compared to 0.04% in the linked quarter and 0.01% in the first quarter of 2019.
Recorded a provision for credit losses on off-balance sheet commitments of $1.10 million.
Recorded a provision for credit losses on debt securities of $0.16 million.
The on-balance sheet allowance for loan losses represented 0.73% of total loans compared to 0.69% at December 31, 2019 and 0.66% at March 31, 2019. The allowance for on-balance sheet loan losses was 3.85 times nonperforming loans compared to 3.34 times at December 31, 2019 and 9.36 times at March 31, 2019.

Quarterly Noninterest Income Compared to the First Quarter of 2019:

Total noninterest income was $48.20 million compared to $46.38 million in 2019, an increase of $1.82 million, or 3.92%. Insurance commissions and other title fees increased $1.31 million in the quarter, while residential mortgage banking income decreased $6.09 million, real estate brokerage and property management income decreased $2.33 million, and service charges on deposit accounts decreased $0.42 million. Also included in noninterest income are net gains on investment securities of $5.00 million as compared to net losses of $0.78 million in the prior year.
Residential mortgage banking recorded income of $7.42 million compared to $13.51 million in first quarter 2019. Loan volume in the current quarter was $923.20 million, with purchase activity comprising 61.31% of that volume. Loan volume in first quarter 2019 was $513.53 million, with purchase activity of 86.08%. The notable increase in income from loan production between periods, was partially offset by net losses on derivative instruments of $10.89 million for the quarter.
Total Insurance segment revenue increased 9.42% to $20.24 million in the first quarter due to organic growth and additional income from a third quarter 2019 agency acquisition.
Property management fee revenue decreased 34.19%, or $2.64 million, as compared to first quarter 2019 due to decreases in reservation levels driven by current travel restrictions related to COVID-19.
Bank owned life insurance and other noninterest income increased $3.58 million, or 75.23%, as compared to first quarter 2019 due to proceeds from life insurance policies and investment commission income.

Quarterly Noninterest Expense Compared to the First Quarter of 2019:

Total noninterest expense was $96.89 million compared to $92.12 million in 2019, an increase of $4.77 million, or 5.17%. This reflects increases of $3.01 million in salary and benefits expense, $0.76 million in advertising and marketing, $0.75 million in software expense, $0.39 million in professional fees, $0.27 million in furniture and equipment expense, and a decline in occupancy expense of $0.75 million.
Market expansion and infrastructure enhancements, that occurred after first quarter 2019, have resulted in generally higher levels of salary and benefits expense, software expense, and professional fees. Advertising and marketing increased due to focused advertising in our new North Carolina markets. The decline in occupancy expense is attributable to one time expenses related to the adoption of the new leasing standard in first quarter 2019.

Quarterly Income Taxes Compared to the First Quarter of 2019:

Income tax expense was $6.19 million compared to $8.21 million one year prior. This represents an effective tax rate of 19.00% compared to 20.72% in the first quarter of 2019.

Consolidated Balance Sheet Highlights:

Total assets were $12.62 billion for the quarter ended March 31, 2020, an increase of 5.66%, or 22.51% on an annualized basis, compared to $11.95 billion at December 31, 2019. Total assets increased $1.06 billion, or 9.12%, from $11.57 billion at March 31, 2019. The linked quarter increase was driven primarily by growth in cash and cash equivalents and loans held for investment.
Loans held for investment increased $0.36 billion, or 4.33%, or 17.43% on an annualized basis, compared to year end 2019.
Mortgage loans held for sale increased $33.91 million, or 8.09%, over December 31, 2019.
Total deposits increased $37.08 million, or 0.40%, or 1.61% on an annualized basis, over December 31, 2019.
Total borrowings increased $0.62 billion, or 80.17%, from December 31, 2019. This increase was primarily attributable to the Company taking actions to shore up liquidity sources in response to the current economic environment.

Investment Securities:

Total investment securities were $1.35 billion compared to $1.52 billion at December 31, 2019 and $1.20 billion at March 31, 2019. The weighted average duration of the portfolio at March 31, 2020 was 4.31 years. The Company established credit loss reserves related to the HTM and AFS debt securities portfolios of $0.39 million during the quarter. The carrying value of the AFS debt securities portfolio included $20.70 million in net unrealized gains compared to $19.73 million at December 31, 2019. During the first quarter of 2020, we sold $211.70 million in AFS debt securities at a gain of $5.00 million, in order to take advantage of interest rate fluctuations in the market in response to concerns over COVID-19.

Loans and Asset Quality:

Total loans held for investment were $8.78 billion at March 31, 2020 compared to $8.42 billion at December 31, 2019 and $8.11 billion at March 31, 2019.
Nonperforming assets were $29.75 million, or 0.24% of total assets, compared to $24.99 million, or 0.22%, at March 31, 2019.
Nonperforming loans were 0.19% of period end loans.
Foreclosed property decreased to $13.05 million from $17.07 million at March 31, 2019. The Company sold the remainder of its former bank premises during the first quarter of 2020 for a reduction of $2.22 million compared to March 31, 2019.
Expected loss estimates are subject to change based on continuing review of models and assumptions, portfolio performance, changes in forecasted macroeconomic conditions and loan mix which could result in material additions to the reserve in future periods.

Deposits and Borrowings:

Total deposits were $9.31 billion compared to $9.27 billion at December 31, 2019 and $8.73 billion at March 31, 2019.
Total loans to deposits were 94.37% compared to 90.81% at December 31, 2019 and 92.83% at March 31, 2019.
Non-interest bearing deposits were 32.88% of total deposits at March 31, 2020 compared to 31.83% at December 31, 2019 and 32.23% at March 31, 2019.
Total borrowings were $1.39 billion compared to $0.77 billion and $1.03 billion at December 31, 2019 and March 31, 2019, respectively.

Capital:

Common equity tier 1 capital ratio of 10.98%.
Tier 1 leverage capital ratio of 10.11%.
Tier 1 risk-based capital ratio of 11.10%.
Total risk-based capital ratio of 14.07%.
Book value was $22.77 compared to $22.58 at December 31, 2019 and $21.40 at March 31, 2019.
Tangible book value (non-GAAP) was $15.91 compared to $15.69 at December 31, 2019 and $14.46 at March 31, 2019.

About TowneBank:
As one of the top community banks in Virginia and North Carolina, TowneBank operates 42 banking offices serving Chesapeake, Chesterfield County, Glen Allen, Hampton, James City County, Mechanicsville, Newport News, Norfolk, Portsmouth, Richmond, Suffolk, Virginia Beach, Williamsburg, and York County in Virginia, along with Raleigh, Cary, Charlotte, Greensboro, Greenville, Moyock, Grandy, Camden County, Southern Shores, Corolla, Duck and Nags Head in North Carolina. TowneBank also offers a full range of financial services through its controlled divisions and subsidiaries that include Towne Investment Group, 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. Local decision-making is a hallmark of its hometown banking strategy that is delivered through the leadership of each group’s President and Board of Directors. With total assets of $12.62 billion as of March 31, 2020, TowneBank is one of the largest banks headquartered in Virginia.

Non-GAAP Financial Measures:
This press release contains financial information determined by methods other than in accordance with GAAP. The Company's management uses these non-GAAP financial measures in its analysis of the Company's performance. These measures typically adjust GAAP performance measures to exclude the effects of the amortization of intangibles and include the tax benefit associated with revenue items that are tax-exempt, as well as adjust income available to common shareholders for certain significant activities or transactions that are infrequent in nature. Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Company’s core businesses. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of GAAP to non-GAAP disclosures are included as tables at the end of this release.

Forward-Looking Statements:
Certain statements contained in this release constitute forward-looking statements within the meaning of U.S. federal securities laws. These forward-looking statements speak only as of the date of this release, are based on current expectations, and involve a number of assumptions. These include statements regarding TowneBank’s future economic performance, financial condition, prospects, growth, strategies and expectations, and objectives of management, and are generally identified by the use of words such as “believe,” “expect,” “intend,” “anticipate,” “estimate,” or “project” or similar expressions. TowneBank intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and is including this statement for purposes of these safe harbor provisions. You should not place undue reliance on forward-looking statements, which are subject to assumptions that are subject to change. TowneBank’s ability to predict results, or the actual effect of future plans or strategies, is inherently uncertain. These forward-looking statements are subject to a number of factors and uncertainties that could cause actual results to differ from those indicated or implied in the forward-looking statements and such differences may be material. Factors which could have a material effect on the operations and future prospects of TowneBank include but are not limited to: the impacts of the ongoing coronavirus (COVID-19) pandemic, changes in interest rates, general economic and business conditions; legislative/regulatory changes; the monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System; the quality and composition of TowneBank’s loan and securities portfolios; demand for loan products; deposit flows; competition; demand for financial services in TowneBank’s market area; implementation of new technologies and the ability to develop and maintain secure and reliable electronic systems; changes in the securities markets; changes in accounting principles, policies and guidelines; and other risk factors detailed from time to time in filings made by TowneBank with the Federal Deposit Insurance Corporation. TowneBank undertakes no obligation to update or clarify these forward-looking statements, whether as a result of new information, future events or otherwise.

Media contact:
G. Robert Aston, Jr., Executive Chairman, 757-638-6780
J. Morgan Davis, President and 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


March 31,

December 31,

September 30,

June 30,

March 31,

2020

2019

2019

2019

2019
Income and Performance Ratios:










Total Revenue
$
137,696


$
139,671


$
145,879


$
144,537


$
133,854


Net income
27,605


35,948


39,400


36,242


32,082


Net income attributable to TowneBank
26,384


35,075


37,659


34,638


31,409


Net income per common share - diluted
0.36


0.49


0.52


0.48


0.44


Book value per common share
22.77


22.58


22.38


21.95


21.4


Book value per common share - tangible ^(non-GAAP)
15.91


15.69


15.44


15.05


14.46


Return on average assets
0.88
%

1.16
%

1.26
%

1.2
%

1.14
%

Return on average assets - tangible ^(non-GAAP)
1
%

1.3
%

1.4
%

1.35
%

1.29
%

Return on average equity
6.37
%

8.44
%

9.22
%

8.83
%

8.24
%

Return on average equity - tangible ^(non-GAAP)
9.91
%

12.97
%

14.2
%

13.9
%

13.24
%

Return on average common equity
6.42
%

8.51
%

9.29
%

8.89
%

8.3
%

Return on average common equity - tangible ^(non-GAAP)
10.01
%

13.12
%

14.36
%

14.05
%

13.39
%

Noninterest income as a percentage of total revenue
35
%

35.59
%

37.55
%

37.86
%

34.65
%











Regulatory Capital Ratios (1):










Common equity tier 1
10.98
%

11.46
%

11.52
%

11.58
%

11.49
%

Tier 1
11.1
%

11.49
%

11.55
%

11.62
%

11.52
%

Total
14.07
%

14.58
%

14.7
%

14.85
%

14.79
%

Tier 1 leverage ratio
10.11
%

9.95
%

9.84
%

9.86
%

9.92
%











Asset Quality:










Allowance for credit losses on loans to nonperforming loans
3.85x

3.34x

3.95x

3.00x

9.36x

Allowance for credit losses on loans to period end loans
0.73
%

0.69
%

0.68
%

0.67
%

0.66
%

Nonperforming loans to period end loans
0.19
%

0.21
%

0.17
%

0.22
%

0.07
%

Nonperforming assets to period end assets
0.24
%

0.27
%

0.26
%

0.29
%

0.22
%

Net charge-offs to average loans (annualized)
0.03
%

0.04
%

0.03
%

0.08
%

0.01
%












Nonperforming loans
$
16,700


$
17,437


$
14,016


$
18,202


$
5,696


Former bank premises
—


1,521


1,510


1,510


2,223


Foreclosed property
13,053


13,839


15,517


14,517


17,071


Total nonperforming assets
$
29,753


$
32,797


$
31,043


$
34,229


$
24,990


Loans past due 90 days and still accruing interest
$
91


$
309


$
636


$
415


$
117













Allowance for credit losses on loans
$
64,372


$
58,234


$
55,428


$
54,527


$
53,303












Mortgage Banking:










Loans originated, mortgage
$
718,681


$
628,279


$
703,922


$
574,638


$
366,643


Loans originated, joint venture
204,522


231,879


259,742


246,491


146,884


Total loans originated
$
923,203


$
860,158


$
963,664


$
821,129


$
513,527


Number of loans originated
3,025


2,984


3,360


3,121


1,977


Number of originators
221


217


225


229


240


Purchase %
61.31
%

70.32
%

68.83
%

84.97
%

86.08
%

Loans sold
$
809,834


$
879,910


$
925,058


$
694,832


$
473,068


Gross realized gain on sales and fees as a % of loans originated
1.8
%

3.38
%

3.45
%

3.43
%

3.58
%











Other Ratios:










Net interest margin
3.35
%

3.33
%

3.41
%

3.49
%

3.54
%

Net interest margin-fully tax equivalent ^(non-GAAP)
3.37
%

3.35
%

3.43
%

3.52
%

3.57
%

Average earning assets/total average assets
89.15
%

89.57
%

89.53
%

89.46
%

89.5
%

Average loans/average deposits
92.99
%

88.41
%

87.63
%

91.6
%

95.83
%

Average noninterest deposits/total average deposits
32.21
%

32.14
%

31.82
%

31.63
%

31.39
%

Period end equity/period end total assets
13.19
%

13.84
%

13.63
%

13.45
%

13.53
%

Efficiency ratio
73.02
%

66.11
%

66.66
%

66.8
%

68.43
%












(1) Current reporting period regulatory capital ratios are preliminary


TOWNEBANK
Selected Data (unaudited)
(dollars in thousands)

Investment Securities






% Change

Q1

Q1

Q4

Q1 20 vs.

Q1 20 vs.
*Available-for-sale securities, at fair value*
2020

2019

2019

Q1 19

Q4 19
U.S. agency securities
$
121,857


$
260,152


$
129,038


(53.16
)%

(5.57
)%
U.S. Treasury notes
1,014


2,229


1,000


(54.51
)%

1.40
%
Municipal securities
266,489


107,278


223,106


148.41
%

19.45
%
Trust preferred and other corporate securities
59,606


35,003


53,367


70.29
%

11.69
%
Mortgage-backed securities issued by GSE and GNMA
799,713


695,115


1,034,797


15.05
%

(22.72
)%
Allowance for credit losses
(259
)

n/a

n/a

n/a

n/a
Total
$
1,248,420


$
1,099,777


$
1,441,308


13.52
%

(13.38
)%










*Gross unrealized gains (losses) reflected in financial statements*






Total gross unrealized gains
$
30,545


$
6,736


$
23,950


353.46
%

27.54
%
Total gross unrealized losses
(9,848
)

(8,955
)

(4,215
)

9.97
%

133.64
%
Net unrealized gains (losses) and other adjustments on AFS securities
$
20,697


$
(2,219
)

$
19,735















*Held-to-maturity securities, at amortized cost*









Municipal securities
$
28,852


$
34,472


$
29,167


(16.30
)%

(1.08
)%
Trust preferred corporate securities
2,357


500


2,369


371.40
%

(0.51
)%
Mortgage-backed securities issued by GSE and GNMA
11,222


14,715


12,152


(23.74
)%

(7.65
)%
Less: Allowance for credit losses
(133
)

n/a

n/a

n/a

n/a
Total
$
42,298


$
49,687


$
43,688


(14.87
)%

(3.18
)%










*Gross unrealized gains (losses) not reflected in financial statements*








Total gross unrealized gains
$
964


$
1,445


$
1,520


(33.29
)%

(36.58
)%
Total gross unrealized losses
—


(410
)

(37
)

(100.00
)%

(100.00
)%
Net unrealized gains (losses) in HTM securities
$
964


$
1,035


$
1,483















Loans Held For Investment






% Change

Q1

Q1

Q4

Q1 20 vs.

Q1 20 vs.

2020

2019

2019

Q1 19

Q4 19
Real estate - construction and development
$
1,060,834


$
1,111,360


$
1,120,533


(4.55
)%

(5.33
)%
Commercial real estate - non owner occupied
2,305,971


1,951,292


2,183,232


18.18
%

5.62
%
Commercial real estate - owner occupied
1,398,216


1,279,039


1,329,144


9.32
%

5.20
%
Real estate - multifamily
283,514


255,649


243,041


10.90
%

16.65
%
Real estate - residential 1-4 family and HELOC
1,693,562


1,637,579


1,653,084


3.42
%

2.45
%
Commercial and industrial business
1,636,244


1,547,623


1,574,275


5.73
%

3.94
%
Consumer and other loans
405,854


322,828


315,979


25.72
%

28.44
%
Total
$
8,784,195


$
8,105,370


$
8,419,288


8.38
%

4.33
%










Deposits






% Change

Q1

Q1

Q4

Q1 20 vs.

Q1 20 vs.

2020

2019

2019

Q1 19

Q4 19
Noninterest-bearing demand
$
3,060,515


$
2,813,857


$
2,951,225


8.77
%

3.70
%
Interest-bearing:









Demand and money market accounts
3,573,926


3,290,907


3,586,364


8.60
%

(0.35
)%
Savings
280,807


285,790


276,205


(1.74
)%

1.67
%
Certificates of deposits
2,392,744


2,341,134


2,457,123


2.20
%

(2.62
)%
Total
$
9,307,992


$
8,731,688


$
9,270,917


6.60
%

0.40
%


TOWNEBANK
Average Balances, Yields and Rate Paid (unaudited)
(dollars in thousands)


Three Months Ended

Three Months Ended

Three Months Ended

March 31, 2020

December 31, 2019

March 31, 2019



Interest

Average



Interest

Average



Interest

Average

Average

Income/

Yield/

Average

Income/

Yield/

Average

Income/

Yield/

Balance

Expense

Rate

Balance

Expense

Rate

Balance

Expense

Rate
Assets:

















Loans (net of unearned income
$
8,550,216


$
100,566


4.73
%

$
8,283,388


$
100,504


4.81
%

$
8,030,994


$
100,146


5.06
%
and deferred costs), excluding
nonaccrual loans
Taxable investment securities
1,356,411


9,211


2.72
%

1,331,175


9,179


2.76
%

1,036,645


7,529


2.91
%
Tax-exempt investment securities
128,204


861


2.69
%

118,298


908


3.07
%

79,310


765


3.86
%
Total securities
1,484,615


10,072


2.71
%

1,449,473


10,087


2.78
%

1,115,955


8,294


2.97
%
Interest-bearing deposits
373,984


1,102


1.19
%

519,737


2,067


1.58
%

693,365


3,998


2.34
%
Loans held for sale
333,070


2,988


3.59
%

469,725


4,413


3.76
%

178,475


2,003


4.49
%
Total earning assets
10,741,885


114,728


4.3
%

10,722,323


117,071


4.33
%

10,018,789


114,441


4.63
%
Less: allowance for credit losses
(55,331
)





(56,766
)





(52,844
)




Total nonearning assets
1,362,769






1,305,036






1,228,808





Total assets
$
12,049,323






$
11,970,593






$
11,194,753





Liabilities and Equity:

















Interest-bearing deposits

















Demand and money market
$
3,521,707


$
5,319


0.61
%

$
3,533,912


$
6,421


0.72
%

$
3,174,157


$
6,240


0.8
%
Savings
276,947


593


0.86
%

278,910


638


0.91
%

285,499


1,027


1.46
%
Certificates of deposit
2,434,098


13,150


2.17
%

2,544,845


14,685


2.29
%

2,290,056


11,907


2.11
%
Total interest-bearing deposits
6,232,752


19,062


1.23
%

6,357,667


21,744


1.36
%

5,749,712


19,174


1.35
%
Borrowings
679,745


2,581


1.5
%

454,621


1,810


1.56
%

821,889


4,221


2.05
%
Subordinated debt, net
248,510


2,962


4.77
%

248,361


2,962


4.77
%

247,913


2,962


4.78
%
Total interest-bearing liabilities
7,161,007


24,605


1.38
%

7,060,649


26,516


1.49
%

6,819,514


26,357


1.57
%
Demand deposits
2,962,110






3,011,688






2,630,813





Other noninterest-bearing liabilities
260,500






250,327






198,527





Total liabilities
10,383,617






10,322,664






9,648,854





Shareholders’ equity
1,665,706






1,647,929






1,545,899





Total liabilities and equity
$
12,049,323






$
11,970,593






$
11,194,753





Net interest income (tax-equivalent basis)


$
90,123






$
90,555






$
88,084



Reconcilement of Non-GAAP Financial Measures
















Tax-equivalent basis adjustment


(627
)





(596
)





(611
)


Net interest income (GAAP)


$
89,496






$
89,959






$
87,473





















Interest rate spread (1)(3)




2.92
%





2.84
%





3.06
%
Interest expense as a percent of average earning assets



0.92
%





0.98
%





1.07
%
Net interest margin (tax equivalent basis) (2)(3)



3.37
%





3.35
%





3.57
%
Total cost of deposits




0.83
%





0.92
%





0.93
%

(1) Interest spread is the average yield earned on earning assets less the average rate paid on interest-bearing liabilities. Fully tax equivalent.
(2) Net interest margin is net interest income expressed as a percentage of average earning assets. Fully tax equivalent.
(3) Non-GAAP.


TOWNEBANK
Consolidated Balance Sheets
(dollars in thousands, except share data)






March 31,

December 31,

2020

2019

(unaudited)

(audited)
ASSETS



Cash and due from banks
$
108,929


$
97,593

Interest-bearing deposits at FRB - Richmond
753,643


322,505

Interest-bearing deposits in financial institutions
23,564


22,518

Total Cash and Cash Equivalents
886,136


442,616

Securities available for sale, at fair value (amortized cost $1,227,982, allowance for credit losses of $259) (1)
1,248,420


1,441,308

Securities held to maturity, at amortized cost (fair value $43,395 )(1)
42,431


43,688

Less: allowance for credit losses
(133
)

—

Securities held to maturity, net of allowance for credit losses
42,298


43,688

Other equity securities
6,462


6,462

FHLB stock
52,042


30,094

Total Securities
1,349,222


1,521,552

Mortgage loans held for sale
453,143


419,233

Loans, net of unearned income and deferred costs
8,784,195


8,419,288

Less: allowance for credit losses
(64,372
)

(58,234
)
Net Loans
8,719,823


8,361,054

Premises and equipment, net
236,735


231,806

Goodwill
446,725


446,816

Other intangible assets, net
51,448


54,399

BOLI
240,924


243,062

Other assets
239,670


227,125

TOTAL ASSETS
$
12,623,826


$
11,947,663





LIABILITIES AND EQUITY



Deposits:



Noninterest-bearing demand
$
3,060,515


$
2,951,225

Interest-bearing:



Demand and money market accounts
3,573,926


3,586,364

Savings
280,807


276,205

Certificates of deposit
2,392,744


2,457,123

Total Deposits
9,307,992


9,270,917

Advances from the FHLB
971,527


471,687

Subordinated debt, net
248,607


248,458

Repurchase agreements and other borrowings
171,762


52,391

Total Borrowings
1,391,896


772,536

Other liabilities
258,306


250,516

TOTAL LIABILITIES
10,958,194


10,293,969

Preferred stock



Authorized and unissued shares - 2,000,000
—


—

Common stock, $1.667 par: 150,000,000 shares authorized



72,619,938 and 72,469,682 shares issued at



March 31, 2020 and December 31, 2019, respectively
121,057


121,107

Capital surplus
1,041,870


1,041,160

Retained earnings
477,972


467,186

Common stock issued to deferred compensation trust, at cost



811,419 and 818,578 shares at



March 31, 2020 and December 31, 2019, respectively
(15,562
)

(15,555
)
Deferred compensation trust
15,562


15,555

Accumulated other comprehensive income (loss)
12,301


11,302

TOTAL SHAREHOLDERS’ EQUITY
1,653,200


1,640,755

Noncontrolling interest
12,432


12,939

TOTAL EQUITY
1,665,632


1,653,694

TOTAL LIABILITIES AND EQUITY
$
12,623,826


$
11,947,663

(1) For 2020, disclosures are presented in compliance with ASC 326.


TOWNEBANK
Consolidated Statements of Income (unaudited)
(dollars in thousands, except per share data)









Three Months Ended

March 31,

2020

2019
INTEREST INCOME:



Loans, including fees
$
100,062


$
99,695

Investment securities
9,949


8,134

Interest-bearing deposits in financial institutions and federal funds sold
1,102


3,998

Mortgage loans held for sale
2,988


2,003

Total interest income
114,101


113,830

INTEREST EXPENSE:



Deposits
19,062


19,174

Advances from the FHLB
2,492


4,153

Subordinated debt, net
2,962


2,962

Repurchase agreements and other borrowings
89


68

Total interest expense
24,605


26,357

Net interest income
89,496


87,473





PROVISION FOR CREDIT LOSSES
7,016


1,438

Net interest income after provision for credit losses
82,480


86,035

NONINTEREST INCOME:



Residential mortgage banking income, net
7,416


13,508

Insurance commissions and other title fees and income, net
16,893


15,582

Real estate brokerage and property management income, net
6,938


9,268

Service charges on deposit accounts
2,440


2,861

Credit card merchant fees, net
1,179


1,183

BOLI
3,105


1,598

Other income
5,227


3,157

Net gain/(loss) on investment securities
5,002


(776
)
Total noninterest income
48,200


46,381

NONINTEREST EXPENSE:



Salaries and employee benefits
55,867


52,860

Occupancy expense
7,502


8,251

Furniture and equipment
3,640


3,371

Amortization - intangibles
2,950


3,192

Software expense
3,492


2,745

Data processing
2,791


3,166

Professional fees
3,067


2,679

Advertising and marketing
3,584


2,829

Other expenses
13,995


13,030

Total noninterest expense
96,888


92,123

Income before income tax expense and noncontrolling interest
33,792


40,293

Provision for income tax expense
6,187


8,211

Net income
$
27,605


$
32,082

Net income attributable to noncontrolling interest
(1,221
)

(673
)
Net income attributable to TowneBank
$
26,384


$
31,409

Per common share information



Basic earnings
$
0.37


$
0.44

Diluted earnings
$
0.36


$
0.44

Cash dividends declared
$
0.18


$
0.16


TOWNEBANK
Consolidated Balance Sheets - Five Quarter Trend
(dollars in thousands, except share data)












March 31,

December 31,

September 30,

June 30,

March 31,

2020

2019

2019

2019

2019

(unaudited)

(audited)

(unaudited)

(unaudited)

(unaudited)
ASSETS









Cash and due from banks
$
108,929


$
97,593


$
124,439


$
110,580


$
104,091

Interest-bearing deposits at FRB - Richmond
753,643


322,505


675,288


834,505


775,208

Interest-bearing deposits in financial institutions
23,564


22,518


21,663


21,527


21,001

Total Cash and Cash Equivalents
886,136


442,616


821,390


966,612


900,300

Securities available for sale, at fair value (amortized cost $1,227,982, allowance for credit losses of $259) (1)
1,248,420


1,441,308


1,337,395


1,260,821


1,099,777

Securities held to maturity, at amortized cost (fair value $43,395 )(1)
42,431


43,688


44,494


50,574


49,687

Less: allowance for credit losses
(133
)

—


—


—


—

Securities held to maturity, net of allowance for credit losses
42,298


43,688


44,494


50,574


49,687

Other equity securities
6,462


6,462


5,697


5,396


5,022

FHLB stock
52,042


30,094


26,282


32,657


41,464

Total Securities
1,349,222


1,521,552


1,413,868


1,349,448


1,195,950

Mortgage loans held for sale
453,143


419,233


456,719


362,773


247,021

Loans, net of unearned income and deferred costs
8,784,195


8,419,288


8,182,829


8,126,729


8,105,370

Less: allowance for credit losses
(64,372
)

(58,234
)

(55,428
)

(54,527
)

(53,303
)
Net Loans
8,719,823


8,361,054


8,127,401


8,072,202


8,052,067

Premises and equipment, net
236,735


231,806


231,060


230,177


227,458

Goodwill
446,725


446,816


446,423


442,881


442,881

Other intangible assets, net
51,448


54,399


57,404


58,391


61,333

BOLI
240,924


243,062


241,652


240,621


238,977

Other assets
239,670


227,125


225,374


219,375


202,276

TOTAL ASSETS
$
12,623,826


$
11,947,663


$
12,021,291


$
11,942,480


$
11,568,263

LIABILITIES AND EQUITY









Deposits:









Noninterest-bearing demand
$
3,060,515


$
2,951,225


$
3,030,505


$
2,950,615


$
2,813,857

Interest-bearing:









Demand and money market accounts
3,573,926


3,586,364


3,534,252


3,409,322


3,290,907

Savings
280,807


276,205


280,552


277,495


285,790

Certificates of deposit
2,392,744


2,457,123


2,592,705


2,631,386


2,341,134

Total Deposits
9,307,992


9,270,917


9,438,014


9,268,818


8,731,688

Advances from the FHLB
971,527


471,687


381,846


532,004


739,160

Subordinated debt, net
248,607


248,458


248,309


248,160


248,010

Repurchase agreements and other borrowings
171,762


52,391


42,971


56,355


44,775

Total Borrowings
1,391,896


772,536


673,126


836,519


1,031,945

Other liabilities
258,306


250,516


271,617


230,691


238,974

TOTAL LIABILITIES
10,958,194


10,293,969


10,382,757


10,336,028


10,002,607

Preferred stock









Authorized shares - 2,000,000
—


—


—


—


—

Common stock, $1.667 par value
121,057


121,107


121,080


121,038


121,047

Capital surplus
1,041,870


1,041,160


1,039,156


1,036,982


1,035,563

Retained earnings
477,972


467,186


445,186


420,600


399,030

Common stock issued to deferred compensation









trust, at cost
(15,562
)

(15,555
)

(15,317
)

(15,160
)

(14,067
)
Deferred compensation trust
15,562


15,555


15,317


15,160


14,067

Accumulated other comprehensive income (loss)
12,301


11,302


19,958


15,143


(1,792
)
TOTAL SHAREHOLDERS’ EQUITY
1,653,200


1,640,755


1,625,380


1,593,763


1,553,848

Noncontrolling interest
12,432


12,939


13,154


12,689


11,808

TOTAL EQUITY
1,665,632


1,653,694


1,638,534


1,606,452


1,565,656

TOTAL LIABILITIES AND EQUITY
$
12,623,826


$
11,947,663


$
12,021,291


$
11,942,480


$
11,568,263

(1) For 2020, disclosures are presented in compliance with ASC 326.



TOWNEBANK

Consolidated Statements of Income - Five Quarter Trend (unaudited)

(dollars in thousands, except share data)






Three Months Ended

March 31,

December 31,

September 30,

June 30,

March 31,


2020

2019

2019

2019

2019

INTEREST INCOME:










Loans, including fees
$
100,062


$
100,059


$
102,047


$
101,874


$
99,695


Investment securities
9,949


9,936


9,889


8,987


8,134


Interest-bearing deposits in financial institutions and federal funds sold
1,102


2,067


3,745


4,015


3,998


Mortgage loans held for sale
2,988


4,413


3,956


3,007


2,003


Total interest income
114,101


116,475


119,637


117,883


113,830


INTEREST EXPENSE:










Deposits
19,062


21,744


23,552


21,784


19,174


Advances from the FHLB
2,492


1,730


1,935


3,201


4,153


Subordinated debt
2,962


2,962


2,962


2,962


2,962


Repurchase agreements and other borrowings
89


80


85


117


68


Total interest expense
24,605


26,516


28,534


28,064


26,357


Net interest income
89,496


89,959


91,103


89,819


87,473













PROVISION FOR CREDIT LOSSES
7,016


3,601


1,508


2,824


1,438


Net interest income after provision for credit losses
82,480


86,358


89,595


86,995


86,035


NONINTEREST INCOME:










Residential mortgage banking income, net
7,416


15,884


18,855


18,565


13,508


Insurance commissions and other title fees and income, net
16,893


15,001


16,681


17,213


15,582


Real estate brokerage and property management income, net
6,938


6,737


9,444


8,843


9,268


Service charges on deposit accounts
2,440


2,245


2,253


3,185


2,861


Credit card merchant fees, net
1,179


1,389


1,514


660


1,183


BOLI
3,105


3,865


2,117


1,635


1,598


Other income
5,227


4,591


3,981


4,617


3,157


Net gain/(loss) on investment securities
5,002


—


(69
)

—


(776
)

Total noninterest income
48,200


49,712


54,776


54,718


46,381


NONINTEREST EXPENSE:










Salaries and employee benefits
55,867


56,013


55,784


54,263


52,860


Occupancy expense
7,502


7,516


7,953


7,662


8,251


Furniture and equipment
3,640


3,598


3,805


3,578


3,371


Amortization - intangibles
2,950


3,005


3,059


3,113


3,192


Software expense
3,492


2,976


3,208


2,788


2,745


Data processing
2,791


2,510


2,533


3,616


3,166


Professional fees
3,067


2,990


3,566


3,707


2,679


Advertising and marketing
3,584


2,839


3,429


3,182


2,829


Other expenses
13,995


10,889


13,950


14,647


13,030


Total noninterest expense
96,888


92,336


97,287


96,556


92,123


Income before income tax expense and noncontrolling interest
33,792


43,734


47,084


45,157


40,293


Provision for income tax expense
6,187


7,786


7,684


8,915


8,211


Net income
27,605


35,948


39,400


36,242


32,082


Net income attributable to noncontrolling interest
(1,221
)

(873
)

(1,741
)

(1,604
)

(673
)

Net income attributable to TowneBank
$
26,384


$
35,075


$
37,659


$
34,638


$
31,409


Per common share information










Basic earnings
$
0.37


$
0.49


$
0.52


$
0.48


$
0.44


Diluted earnings
$
0.36


$
0.49


$
0.52


$
0.48


$
0.44


Basic weighted average shares outstanding
72,206,228


72,122,476


72,091,221


72,044,817


71,992,330


Diluted weighted average shares outstanding
72,299,721


$
72,302,414


72,222,934


72,145,600


72,099,558


Cash dividends declared
$
0.18


$
0.18


$
0.18


$
0.18


$
0.16


TOWNEBANK
Banking Segment Financial Information (unaudited)
(dollars in thousands)








Three Months Ended

Increase/(Decrease)

March 31,

December 31,

2020 over 2019

2020

2019

2019

Amount

Percent
Revenue









Net interest income
$
87,406


$
86,400


$
87,637


$
1,006


1.16
%
Service charges on deposit









accounts
2,440


2,861


2,245


(421
)

(14.72
)%
Credit card merchant fees
1,179


1,183


1,389


(4
)

(0.34
)%
Other income
7,061


3,927


5,271


3,134


79.81
%
Subtotal
10,680


7,971


8,905


2,709


33.99
%
Net gain/(loss) on investment securities
5,002


(776
)

—


5,778


(744.59
)%
Total noninterest income
15,682


7,195


8,905


8,487


117.96
%
Total revenue
103,088


93,595


96,542


9,493


10.14
%










Provision for credit losses
7,041


1,438


3,601


5,603


389.64
%










Expenses









Salaries and employee benefits
33,225


31,087


34,183


2,138


6.88
%
Occupancy expense
4,916


5,244


4,959


(328
)

(6.25
)%
Furniture and equipment
2,660


2,367


2,577


293


12.38
%
Amortization of intangibles
1,164


1,366


1,214


(202
)

(14.79
)%
Other expenses
18,705


16,181


14,078


2,524


15.6
%
Total expenses
60,670


56,245


57,011


4,425


7.87
%
Income before income tax, corporate allocation and noncontrolling interest
35,377


35,912


35,930


(535
)

(1.49
)%
Corporate allocation
670


452


627


218


48.23
%
Income before income tax provision and noncontrolling interest
36,047


36,364


36,557


(317
)

(0.87
)%
Provision for income tax expense
6,663


7,192


6,368


(529
)

(7.36
)%
Net income
29,384


29,172


30,189


212


0.73
%
Noncontrolling interest
(1
)

2


(1
)

(3
)

(150.00
)%
Net income attributable to TowneBank
$
29,383


$
29,174


$
30,188


$
209


0.72
%










Efficiency ratio
61.85
%

59.6
%

59.05
%

2.25
%

3.78
%


TOWNEBANK
Realty Segment Financial Information (unaudited)
(dollars in thousands)





Three Months Ended

Increase/(Decrease)

March 31,

December 31,

2020 over 2019

2020

2019

2019

Amount

Percent
Revenue









Residential mortgage brokerage
$
8,007


$
13,756


$
16,617


$
(5,749
)

(41.79
)%
income, net
Real estate brokerage income, net
1,865


1,561


2,550


304


19.47
%
Title insurance and settlement fees
436


368


531


68


18.48
%
Property management fees, net
5,073


7,708


4,187


(2,635
)

(34.19
)%
Income from unconsolidated
186


94


75


92


97.87
%
subsidiary
Net interest and other income
2,421


1,372


2,787


1,049


76.46
%
Total revenue
17,988


24,859


26,747


(6,871
)

(27.64
)%










Expenses









Salaries and employee benefits
13,293


12,895


12,941


398


3.09
%
Occupancy expense
1,927


2,345


1,857


(418
)

(17.83
)%
Furniture and equipment
762


768


773


(6
)

(0.78
)%
Amortization of intangible assets
657


725


655


(68
)

(9.38
)%
Other expenses
6,867


6,241


7,030


626


10.03
%
Total expenses
23,506


22,974


23,256


532


2.32
%










(Loss) income before income tax, corporate allocation and noncontrolling interest
(5,518
)

1,885


3,491


(7,403
)

(392.73
)%
Corporate allocation
(393
)

(263
)

(362
)

(130
)

49.43
%
(Loss) income before income tax provision and noncontrolling interest
(5,911
)

1,622


3,129


(7,533
)

(464.43
)%
Provision for income tax (benefit) expense
(1,292
)

551


416


(1,843
)

(334.48
)%
Net (loss) income
(4,619
)

1,071


2,713


(5,690
)

(531.28
)%
Noncontrolling interest
(791
)

(252
)

(715
)

(539
)

213.89
%
Net (loss) income attributable to TowneBank
$
(5,410
)

$
819


$
1,998


$
(6,229
)

(760.56
)%










Efficiency ratio
130.68
%

92.42
%

86.95
%

38.26
%

41.4
%


TOWNEBANK
Insurance Segment Financial Information (unaudited)
(dollars in thousands)








Three Months Ended

Increase/(Decrease)

March 31,

December 31,

2020 over 2019

2020

2019

2019

Amount

Percent
Commission and fee income









Property and casualty
$
12,786


$
11,873


$
11,957


$
913


7.69
%
Employee benefits
3,918


3,506


3,758


412


11.75
%
Travel insurance
1,266


1,289


794


(23
)

(1.78
)%
Specialized benefit services
168


170


173


(2
)

(1.18
)%
Total commissions and fees
18,138


16,838


16,682


1,300


7.72
%










Contingency and bonus revenue
2,022


1,585


1,396


437


27.57
%
Other income
81


75


1,805


6


8
%
Total revenue
20,241


18,498


19,883


1,743


9.42
%










Employee commission expense
3,596


3,098


3,501


498


16.07
%
Revenue, net of commission expense
16,645


15,400


16,382


1,245


8.08
%










Salaries and employee benefits
9,349


8,878


8,889


471


5.31
%
Occupancy expense
659


662


700


(3
)

(0.45
)%
Furniture and equipment
218


236


248


(18
)

(7.63
)%
Amortization of intangible assets
1,129


1,101


1,136


28


2.54
%
Other expenses
1,357


2,027


1,096


(670
)

(33.05
)%
Total operating expenses
12,712


12,904


12,069


(192
)

(1.49
)%
Income before income tax, corporate allocation and noncontrolling interest
3,933


2,496


4,313


1,437


57.57
%
Corporate allocation
(277
)

(189
)

(265
)

(88
)

46.56
%
Income before income tax provision and noncontrolling interest
3,656


2,307


4,048


1,349


58.47
%
Provision for income tax expense
816


468


1,002


348


74.36
%
Net income
2,840


1,839


3,046


1,001


54.43
%
Noncontrolling interest
(429
)

(423
)

(157
)

(6
)

1.42
%
Net income attributable to TowneBank
$
2,411


$
1,416


$
2,889


$
995


70.27
%










Provision for income taxes
816


468


1,002


348


74.36
%
Depreciation, amortization and interest expense
1,300


1,333


1,309


(33
)

(2.48
)%
EBITDA (non-GAAP)
$
4,527


$
3,217


$
5,200


$
1,310


40.72
%










Efficiency ratio
76.37
%

83.79
%

73.67
%

(7.42
)%

(8.86
)%


TOWNEBANK
Reconcilement of Non-GAAP Financial Measures
(dollars in thousands)








Three Months Ended

March 31,

March 31,

December 31,

2020

2019

2019






Return on average assets (GAAP)
0.88
%

1.14
%

1.16
%
Impact of excluding average goodwill and other
0.12
%

0.15
%

0.14
%
intangibles and amortization
Return on average tangible assets (non-GAAP)
1
%

1.29
%

1.3
%






Return on average equity (GAAP)
6.37
%

8.24
%

8.44
%
Impact of excluding average goodwill and other
3.54
%

5
%

4.53
%
intangibles and amortization
Return on average tangible equity (non-GAAP)
9.91
%

13.24
%

12.97
%






Return on average common equity (GAAP)
6.42
%

8.3
%

8.51
%
Impact of excluding average goodwill and other
3.59
%

5.09
%

4.61
%
intangibles and amortization
Return on average tangible common equity
10.01
%

13.39
%

13.12
%
(non-GAAP)






Book value (GAAP)
$
22.77


$
21.4


$
22.58

Impact of excluding average goodwill and other
(6.86
)

(6.94
)

(6.89
)
intangibles and amortization
Tangible book value (non-GAAP)
$
15.91


$
14.46


$
15.69







Average assets (GAAP)
$
12,049,323


$
11,194,753


$
11,970,593

Less: average goodwill
446,838


442,869


446,428

Less: average intangible assets
53,285


63,400


56,339

Average tangible assets (non-GAAP)
$
11,549,200


$
10,688,484


$
11,467,826







Average equity (GAAP)
$
1,665,706


$
1,545,899


$
1,647,929

Less: average goodwill
446,838


442,869


446,428

Less: average intangible assets
53,285


63,400


56,339

Average tangible equity (non-GAAP)
$
1,165,583


$
1,039,630


$
1,145,162







Average common equity (GAAP)
$
1,653,676


$
1,534,131


$
1,635,394

Less: average goodwill
446,838


442,869


446,428

Less: average intangible assets
53,285


63,400


56,339

Average tangible common equity (non-GAAP)
$
1,153,553


$
1,027,862


$
1,132,627







Net Income (GAAP)
$
26,384


$
31,409


35,075

Amortization of Intangibles, net of tax
2,331


2,521


2,374

Tangible Net Income (non-GAAP)
$
28,715


$
33,930


$
37,449


TOWNEBANK
Reconcilement of Non-GAAP Financial Measures
(dollars in thousands, except per share data)






















Reconcilement of GAAP Earnings to Operating Earnings Excluding Certain Items Affecting Comparability

Three Months Ended


March 31,

December 31,

September 30,

June 30,

March 31,


2020

2019

2019

2019

2019
Net income (GAAP)

$
26,384


$
35,075


$
37,659


$
34,638


$
31,409












Acquisition-related expenses

(150
)

19


207


20


411

Income tax expense (benefit) - other items

21


(3
)

(20
)

(3
)

(52
)
Total charges, net of taxes

(129
)

16


187


17


359

Operating earnings, excluding certain items affecting

$
26,255


$
35,091


$
37,846


$
34,655


$
31,768

comparability (non-GAAP)
Weighted average diluted shares

72,299,721


72,311,979


72,222,934


72,145,600


72,099,558

Diluted EPS (GAAP)

$
0.36


$
0.49


$
0.52


$
0.48


$
0.44

Diluted EPS, excluding certain items affecting

$
0.36


$
0.49


$
0.52


$
0.48


$
0.44

comparability (non-GAAP)
Average assets

$
12,049,323


$
11,970,593


$
11,845,282


$
11,532,278


$
11,194,753

Average tangible equity

$
1,165,583


$
1,145,162


1,119,824


$
1,070,635


$
1,039,630

Return on average assets, excluding certain items

0.88
%

1.16
%

1.27
%

1.21
%

1.15
%
affecting comparability (non-GAAP)
Return on average tangible equity, excluding certain items affecting comparability (non-GAAP)

9.86
%

12.98
%

14.26
%

13.9
%

13.38
%
Return on average common tangible equity, excluding certain items affecting comparability (non-GAAP)

9.97
%

13.12
%

14.42
%

14.06
%

13.53
%
Efficiency ratio, excluding certain items affecting

73.13
%

66.1
%

66.52
%

66.79
%

68.12
%
comparability (non-GAAP)

Company Name:	Towne Bank
Stock Symbol:	TOWN
Market:	NASDAQ
Website:	townebank.com

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