Hampton Roads based TowneBank (the “Bank” or “Company”)
(NASDAQ:TOWN) today reported record financial results for the three
and six months ended June 30, 2017. Earnings for the quarter
ended June 30, 2017 were $26.21 million compared to the
$6.26 million for the same quarter in 2016. Fully
diluted earnings per share were $0.42 per share compared to $0.12
per share in second quarter 2016. Earnings in the second
quarter of 2016 included after-tax acquisition-related expenses of
$12.26 million, mostly related to the Monarch Financial
Holdings, Inc. (“Monarch”) merger, as compared to
$1.09 million in the current quarter.
Excluding certain items affecting comparability, earnings for
the quarter ended June 30, 2017 were $24.77 million
(non-GAAP), or $0.40 (non-GAAP) per diluted share, compared to
$18.52 million (non-GAAP), or $0.36 (non-GAAP) per diluted
share, for the same quarter in 2016.
Earnings for the year-to-date period were $48.18 million as
compared to $24.08 million earned in the same period of
2016. Fully diluted earnings per share were $0.77 compared to
$0.47 for the six months ended June 30, 2016.
Excluding certain items affecting comparability, earnings for
the year-to-date period were $46.81 million (non-GAAP), or
$0.75 (non-GAAP) per diluted share, as compared to the
$36.72 million (non-GAAP), or $0.71 (non-GAAP) per diluted
share, earned in the same period of 2016.
The Bank’s quarterly dividend was $0.14 per share resulting in
total common dividends of $8.77 million. The current
dividend represents an increase of 7.7% over the dividend paid
during the same quarter of 2016.
“We are pleased to announce another quarter of strong earnings
with solid deposit growth and continued strong growth in both net
interest income and noninterest income, while producing a return on
average assets of 1.29% and a return on average tangible equity of
13.67%,” said G. Robert Aston, Jr., Chairman and Chief Executive
Officer. “In addition, we were pleased with the overwhelming
response to our $250 million subordinated debt offering
completed in July, which will result in increases to our risk-based
capital ratios and a reduction in our CRE concentration ratio.”
The following items affected comparability of
our second quarter 2017 earnings (in thousands):
Three Months
Ended June 30, 2017 |
|
|
|
|
|
|
|
Consolidated |
|
|
Banking |
|
Realty |
|
Insurance |
|
Totals |
|
|
|
|
|
|
|
|
|
Purchase accounting
adjustments (1) |
|
$ |
3,889 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
3,889 |
|
Acquisition-related
expenses |
|
(699 |
) |
|
(87 |
) |
|
(495 |
) |
|
(1,281 |
) |
|
|
|
|
|
|
|
|
|
Total, before
taxes |
|
$ |
3,190 |
|
|
$ |
(87 |
) |
|
$ |
(495 |
) |
|
$ |
2,608 |
|
Income taxes |
|
(1,331 |
) |
|
12 |
|
|
152 |
|
|
(1,167 |
) |
Total impact,
net of taxes (2) |
|
$ |
1,859 |
|
|
$ |
(75 |
) |
|
$ |
(343 |
) |
|
$ |
1,441 |
|
|
|
|
|
|
|
|
|
|
(1)
Relates to the effects of non-recurring reclassification and
recovery of certain purchased loans |
|
|
(2)
Non-GAAP measures are defined in the “Reconcilement of Non-GAAP
Measures” |
|
|
The following table shows the aggregate
acquisition accounting impact on net interest margin for the
quarter ended June 30, 2017:
Three Months
Ended June 30, 2017 |
|
Net Interest Margin (1) |
|
|
|
Net Interest
Margin, as presented |
|
3.84% |
Purchase accounting
adjustments (2) |
|
0.21% |
|
|
|
Net interest
margin, excluding one-time adjustments |
|
3.63% |
Acquisition accounting
accretion, other |
|
0.10% |
Net interest
margin, excluding purchase accounting impact |
|
3.53% |
|
|
|
(1) Presented on a
tax-equivalent basis |
|
|
(2) Relates to the
effects of non-recurring reclassification of purchased loans |
|
|
On July 17, 2017, the Company issued $250.0 million of
fixed to variable rate subordinated notes due July 30,
2027. The Company received $247.10 million after
deducting discounts and issuance costs. The notes accrue interest
at a fixed rate of 4.50% for the first five years until
July 2022. After this date and for the remaining five
years of the notes' term, interest will accrue at a variable rate
of three-month LIBOR plus 2.550%. The Company may redeem the
subordinated notes in whole or in part, on or after July 30,
2022. Subject to the speed of deployment into higher earning
assets, we expect the issuance of these notes to result in a
reduction of up to 12 basis points to net interest margin in
third quarter 2017.
Second Quarter 2017 Performance
Highlights
- Total revenues were $119.60 million, an increase of
$35.34 million, or 41.95% from second quarter 2016
- Taxable equivalent net interest margin was 3.84%, including
accretion of 31 basis points, compared to 3.33%, including
accretion of 5 basis points, for 2016
- Excluding one-time purchase accounting adjustments of
$3.89 million, or 21 basis points, taxable equivalent net
interest margin was 3.63%
- Residential mortgage banking income increased
$9.45 million, or 77.76%
- Insurance segment total revenue increased 10.03% to $14.89
million
- Loans held for investment increased $389.11 million, or
7.00% from June 30, 2016
- Total deposits were $6.60 billion, an increase of
$409.49 million, or 6.62%, from second quarter 2016
- Noninterest bearing deposits increased by 13.77%, to
$2.22 billion, representing 33.65% of total deposits
- Total cost of deposits increased slightly to 0.44% from 0.42%
at June 30, 2016
- Asset quality showed continued strength
- Nonperforming assets declined to $35.69 million, or 0.42% of
total assets compared to $36.29 million, or 0.46%, at June 30,
2016
- Nonperforming loans were 0.16% of period end loans
- Foreclosed property decreased to $23.25 million
- The Bank remained well-capitalized
- Common equity tier 1 capital ratio of 11.98%
- Tier 1 leverage capital ratio of 10.43%
- Tier 1 risk-based capital ratio of 12.03%
- Total risk-based capital ratio of 12.68%
- Tangible book value increased to $12.81
Second Quarter 2017 Earnings Compared to
Second Quarter 2016
Net income for the second quarter was $26.21 million, or
$0.42 per diluted share, versus $6.26 million, or
$0.12 per diluted share, in 2016, reflecting strong growth in
net interest income as compared to the prior year period.
Excluding after-tax acquisition-related expenses of $12.26 million,
net income for the second quarter of 2016 was $18.52 million
(non-GAAP), or $0.36 per diluted share.
Net Interest IncomeNet interest income
increased to $69.25 million, a $21.47 million, or 44.93%,
increase from the second quarter of 2016. The primary driver
was the growth in average earning assets, which increased
$1.45 billion, or 24.65%, while tax-equivalent net interest
margin increased to 3.84% in the current quarter from 3.33% in
second quarter 2016. Accretion income added
$5.57 million, or 31 basis points, to margin in the
current quarter as compared to $0.61 million, or 5 basis
points, in the second quarter of 2016. Net interest
income included a cumulative one-time adjustment to accretion
income of a $3.89 million, or 21 basis points, due to the
effects of a reclassification of purchased revolving credits.
Noninterest IncomeNoninterest income was
$50.34 million for the second quarter of 2017, an increase of
$13.88 million, or 38.05%, from the second quarter of
2016. Residential mortgage banking income increased
$9.45 million, or 77.76%, from the second quarter of 2016
primarily due to higher production volumes resulting from the
Monarch merger. Mortgage production was $1.08 billion in
second quarter 2017, which was $486.59 million higher than
second quarter 2016 production of $591.79 million.
Insurance commissions and other title fees increased
$1.28 million, or 10.97%, primarily due to organic growth in
property and casualty and employee benefits lines of
business. Additionally, real estate brokerage and property
management income increased $1.51 million, or 24.74%, from the
second quarter of 2016 primarily due to our acquisition of a resort
property management company at Deep Creek Lake, Maryland (“Deep
Creek”) in second quarter 2017.
Noninterest ExpenseNoninterest expense
increased by $6.22 million, or 8.65%, from the comparative
quarter of 2016. The primary driver was an increase of
$14.74 million in salaries and benefits expense due to the
addition of staff related to the Monarch acquisition, incentive
compensation, and organic growth. Also contributing were
increases in occupancy expenses of $1.50 million and furniture
and equipment expenses of $1.18 million, primarily related to
mortgage facilities acquired in the Monarch acquisition.
Partially offsetting the increase was a reduction in
acquisition-related expenses of $17.15 million.
Second Quarter 2017 Earnings Compared to
First Quarter 2017Net income for the second quarter was
$26.21 million, or $0.42 per diluted share, versus
$21.97 million, or $0.35 per diluted share, in first quarter
2017, reflecting the increase in net interest income and seasonal
improvements in our Realty segment.
Performance Highlights
- Total revenues were $119.60 million compared to
$105.17 million in the first quarter of 2017
- Taxable equivalent net interest margin was 3.84%, including
accretion of 31 basis points, compared to 3.45%, including
accretion of 9 basis points, in the first quarter of 2017
- Excluding one-time purchase accounting adjustments of
$3.89 million, or 21 basis points, taxable equivalent net
interest margin was 3.63%
- Noninterest income increased $5.46 million due to
seasonality in our Realty segment
- Total loans held for investment increased $35.98 million
from March 31, 2017
- Total deposits increased $405.00 million, or 6.54%, from
March 31, 2017, including an additional $175 million of
brokered certificates of deposit
- Noninterest bearing deposits increased by $166.81 million,
or 8.13%
Net Interest IncomeOn a linked quarter basis,
net interest income increased by $8.97 million or 14.88%, in
second quarter 2017 versus first quarter 2017, while tax-equivalent
net interest margin was 3.84% versus 3.45% for the first quarter of
2017. The increase in net interest income was primarily due
to the previously discussed increase in accretion income, combined
with a seasonal increase in average balances of loans held for sale
and decreased borrowing costs. Accretion income added
$5.57 million, or 31 basis points, to margin in the
current quarter, as compared to $1.13 million, or 9 basis
points, in the linked quarter. Net interest income included a
cumulative one-time adjustment to accretion income of a
$3.89 million, or 21 basis points, due to the effects of
a reclassification of purchased revolving credits.
Noninterest IncomeIn comparison to the first
quarter of 2017, noninterest income increased $5.46 million,
or 12.16%. The increase was driven by residential mortgage
banking income, which grew by $3.96 million, or 22.47%, due to a
seasonal increase in mortgage production of $372.32 million,
from $706.06 million in first quarter 2017 to
$1.08 billion in second quarter 2017. Additionally, real
estate brokerage and property management income was higher by $2.64
million, or 52.79% due to a seasonal increase in real estate
brokerage and the Deep Creek acquisition. Partially
offsetting the increase from the linked quarter was a decline in
insurance commissions due to lower contingent commission revenue,
which is primarily received during the first quarter of each
year.
Noninterest ExpenseNoninterest expense
increased by $7.87 million, or 11.20%, from the first quarter
of 2017. The primary drivers were increases in salaries and
benefits expenses of $4.63 million and acquisition-related expenses
of $1.29 million. Salaries and benefits expenses were
higher due to the accrual of expenses related to our profit sharing
plan, which requires the achievement of certain performance
thresholds and a targeted level of earnings, combined with the
effects of the Deep Creek acquisition.
Noninterest
Income |
|
|
|
|
|
|
% Change |
|
Q2 |
|
Q2 |
|
Q1 |
|
Q2 17 vs. |
|
Q2 17 vs. |
(dollars in
thousands) |
2017 |
|
2016 |
|
2017 |
|
Q2 16 |
|
Q1 17 |
Residential mortgage
banking income, net |
$ |
21,594 |
|
|
$ |
12,148 |
|
|
$ |
17,632 |
|
|
77.76 |
% |
|
22.47 |
% |
Insurance commissions
and other title fees and income, net |
12,902 |
|
|
11,627 |
|
|
14,800 |
|
|
10.97 |
% |
|
(12.82 |
)% |
Real estate brokerage
and property management, net |
7,629 |
|
|
6,116 |
|
|
4,993 |
|
|
24.74 |
% |
|
52.79 |
% |
Service charges on
deposit accounts |
2,644 |
|
|
2,284 |
|
|
2,472 |
|
|
15.76 |
% |
|
6.96 |
% |
Credit card merchant
fees, net |
1,298 |
|
|
1,113 |
|
|
1,118 |
|
|
16.62 |
% |
|
16.10 |
% |
Bank owned life
insurance |
1,421 |
|
|
1,181 |
|
|
1,474 |
|
|
20.32 |
% |
|
(3.60 |
)% |
Other income |
2,856 |
|
|
1,999 |
|
|
2,397 |
|
|
42.87 |
% |
|
19.15 |
% |
Subtotal before loss on
investment securities |
50,344 |
|
|
36,468 |
|
|
44,886 |
|
|
38.05 |
% |
|
12.16 |
% |
Net loss on investment
securities |
(1 |
) |
|
— |
|
|
— |
|
|
N/M |
|
|
N/M |
|
Total noninterest
income |
$ |
50,343 |
|
|
$ |
36,468 |
|
|
$ |
44,886 |
|
|
38.05 |
% |
|
12.16 |
% |
Noninterest
Expense |
|
|
|
|
|
|
% Change |
|
Q2 |
|
Q2 |
|
Q1 |
|
Q2 17 vs. |
|
Q2 17 vs. |
(dollars in
thousands) |
2017 |
|
2016 |
|
2017 |
|
Q2 16 |
|
Q1 17 |
Salaries and
benefits |
$ |
44,834 |
|
|
$ |
30,093 |
|
|
$ |
40,208 |
|
|
48.98 |
% |
|
11.51 |
% |
Occupancy expense |
6,658 |
|
|
5,157 |
|
|
6,684 |
|
|
29.11 |
% |
|
(0.39 |
)% |
Furniture and
equipment |
3,563 |
|
|
2,381 |
|
|
3,343 |
|
|
49.64 |
% |
|
6.58 |
% |
Acquisition-related
expenses |
1,281 |
|
|
18,435 |
|
|
(5 |
) |
|
(93.05 |
)% |
|
N/M |
|
Other expenses |
21,783 |
|
|
15,833 |
|
|
20,018 |
|
|
37.58 |
% |
|
8.82 |
% |
Total noninterest
expense |
$ |
78,119 |
|
|
$ |
71,899 |
|
|
$ |
70,248 |
|
|
8.65 |
% |
|
11.20 |
% |
Segment Results
|
|
|
|
|
|
|
|
$ Change |
(in thousands) |
|
Q2 |
|
Q2 |
|
Q1 |
|
Q2 17 vs. |
|
Q2 17 vs. |
Segment
Net Income (Loss) |
|
2017 |
|
2016 |
|
2017 |
|
Q2 16 |
|
Q1 17 |
Banking |
|
$ |
21,546 |
|
|
$ |
1,290 |
|
|
$ |
17,967 |
|
|
$ |
20,256 |
|
|
$ |
3,579 |
|
Realty |
|
3,204 |
|
|
3,765 |
|
|
926 |
|
|
(561 |
) |
|
2,278 |
|
Insurance |
|
1,463 |
|
|
1,204 |
|
|
3,075 |
|
|
259 |
|
|
(1,612 |
) |
Total net income |
|
$ |
26,213 |
|
|
$ |
6,259 |
|
|
$ |
21,968 |
|
|
$ |
19,954 |
|
|
$ |
4,245 |
|
Second Quarter 2017 Compared to Second Quarter
2016
BankingNet income for the three months ended
June 30, 2017 for the Banking segment was $21.55 million,
increasing $20.26 million from comparative 2016, as net
interest income climbed by $19.55 million primarily due to the
increase in earning assets from the Monarch merger and increased
accretion income. Also contributing to the variance was a
decrease in the provision for loan losses of $0.78 million and
an increase in noninterest income of $1.76 million, which
included increases in wealth management income, service charges and
credit card merchant fees. Additionally, noninterest expenses
declined by $8.0 million, as the decrease in
acquisition-related expenses of $17.32 million was partially
offset by increases in personnel costs and other expenses.
RealtyFor the three months ended June 30,
2017, the Realty segment net income was $3.20 million as
compared to $3.77 million in second quarter 2016. The
variance was driven by increased noninterest expenses of
$13.56 million primarily due to an increase in mortgage
operational expenses related to the merger with Monarch, including
an increase in personnel costs of $7.97 million. The
decrease was mostly offset by an increase in residential mortgage
banking income of $9.24 million, or 73.98%, due to higher
production volumes resulting from the Monarch merger.
Additionally, net interest and other income increased by
$2.06 million as higher production volume led to higher
average mortgage loans held for sale.
InsuranceThe Insurance segment had net income
of $1.46 million for the three months ended June 30,
2017, an increase of $0.26 million compared to second quarter
2016. The increase in net income was primarily driven by
organic growth in property and casualty insurance and employee
benefit insurance lines.
Second Quarter 2017 Compared to First Quarter
2017
BankingEarnings increased by $3.58 million, or
19.92% from the first quarter of 2017 as an increase in net
interest income of $7.99 million was partially offset by
increases in personnel costs of $3.18 million and
acquisition-related expenses of $0.58 million.
Additionally, there was also a decrease of $1.22 million in
the provision for loan losses.
RealtyNet income in the Realty segment
increased by $2.28 million from the linked quarter ended
March 31, 2017. The increase was primarily a result of a
seasonal increase in residential mortgage banking income of $3.96
million and real estate brokerage income of $0.88 million.
InsuranceNet income decreased $1.61 million
from the first quarter of 2017 driven by a reduction in contingency
and bonus revenue of $2.59 million. Contingent
commissions are seasonal in nature and are primarily received
during the first quarter of each year. Additionally,
commissions from travel insurance decreased by $0.47 million
but were offset by an increases in property and casualty
commissions of $0.81 million and employee benefits commissions
of $0.31 million.
Balance Sheet
At June 30, 2017, total Bank assets reached
$8.43 billion, an increase of $0.49 billion, or 6.12%,
over June 30, 2016.
Loans
|
|
|
|
|
|
|
% Change |
|
Q2 |
|
Q2 |
|
Q1 |
|
Q2 17 vs. |
|
Q2 17 vs. |
(dollars in
thousands) |
2017 |
|
2016 |
|
2017 |
|
Q2 16 |
|
Q1 17 |
Construction and land
development |
$ |
888,566 |
|
|
$ |
824,609 |
|
|
$ |
898,540 |
|
|
7.76 |
% |
|
(1.11 |
)% |
Commercial real estate
- investment related properties |
1,339,270 |
|
|
1,221,488 |
|
|
1,362,184 |
|
|
9.64 |
% |
|
(1.68 |
)% |
Commercial real estate
- owner occupied |
956,333 |
|
|
896,620 |
|
|
907,049 |
|
|
6.66 |
% |
|
5.43 |
% |
Multifamily real
estate |
206,894 |
|
|
171,501 |
|
|
236,782 |
|
|
20.64 |
% |
|
(12.62 |
)% |
1-4 family residential
real estate |
1,227,389 |
|
|
1,183,818 |
|
|
1,215,278 |
|
|
3.68 |
% |
|
1.00 |
% |
Commercial and
industrial business loans |
1,110,822 |
|
|
1,075,736 |
|
|
1,086,273 |
|
|
3.26 |
% |
|
2.26 |
% |
Consumer loans and
other |
219,787 |
|
|
186,177 |
|
|
206,974 |
|
|
18.05 |
% |
|
6.19 |
% |
Total |
$ |
5,949,061 |
|
|
$ |
5,559,949 |
|
|
$ |
5,913,080 |
|
|
7.00 |
% |
|
0.61 |
% |
The Bank’s loan portfolio ended the period at $5.95 billion
representing an increase of 7.00%, or $389.11 million, from
the prior year, and an increase of $35.98 million, or 0.61%,
from March 31, 2017.
Deposits
|
|
|
|
|
|
|
% Change |
|
Q2 |
|
Q2 |
|
Q1 |
|
Q2 17 vs. |
|
Q2 17 vs. |
(dollars in
thousands) |
2017 |
|
2016 |
|
2017 |
|
Q2 16 |
|
Q1 17 |
Noninterest-bearing
demand |
$ |
2,219,406 |
|
|
$ |
1,950,816 |
|
|
$ |
2,052,598 |
|
|
13.77 |
% |
|
8.13 |
% |
Interest-bearing: |
|
|
|
|
|
|
|
|
|
Demand
and money market accounts |
2,292,978 |
|
|
2,174,154 |
|
|
2,270,025 |
|
|
5.47 |
% |
|
1.01 |
% |
Savings |
318,714 |
|
|
317,071 |
|
|
320,104 |
|
|
0.52 |
% |
|
(0.43 |
)% |
Certificates of deposits |
1,764,671 |
|
|
1,744,238 |
|
|
1,548,045 |
|
|
1.17 |
% |
|
13.99 |
% |
Total |
$ |
6,595,769 |
|
|
$ |
6,186,279 |
|
|
$ |
6,190,772 |
|
|
6.62 |
% |
|
6.54 |
% |
The Bank continued to experience solid deposit growth with total
deposits increasing to $6.60 billion, up $0.41 billion, or
6.62%, from June 30, 2016. The Bank saw continued growth
in noninterest-bearing demand deposits, which ended the quarter at
$2.22 billion, a 13.77% increase from the prior year.
Noninterest-bearing deposits represented 33.65% of total deposits
at June 30, 2017.
Capital Ratios
|
|
Q2 |
|
Q2 |
|
Q1 |
|
|
2017 |
|
2016 |
|
2017 |
Common Equity Tier
1 |
|
11.98 |
% |
|
11.82 |
% |
|
11.94 |
% |
Tier 1 |
|
12.03 |
% |
|
11.89 |
% |
|
11.98 |
% |
Total |
|
12.68 |
% |
|
12.50 |
% |
|
12.62 |
% |
Tier 1 Leverage
Ratio |
|
10.43 |
% |
|
12.36 |
% |
|
10.49 |
% |
The Bank’s total equity at June 30, 2017 rose to
$1.12 billion, an increase of $61.45 million, or 5.79%,
from June 30, 2016. Total risk-based capital remained
strong as common equity Tier 1, Tier 1 capital, total
risk-based capital, and Tier 1 leverage capital ratios were
11.98%, 12.03%, 12.68%, 10.43%, respectively. All ratios
exceed the current regulatory standards for well capitalized
status.
Asset Quality
|
|
|
|
|
|
|
|
|
|
(in thousands) |
6/30/2017 |
|
3/31/2017 |
|
12/31/2016 |
|
9/30/2016 |
|
6/30/2016 |
|
|
|
|
|
|
|
|
|
|
Nonperforming
loans |
$ |
9,645 |
|
|
$ |
11,538 |
|
|
$ |
13,099 |
|
|
$ |
11,337 |
|
|
$ |
10,580 |
|
Former bank
premises |
2,798 |
|
|
2,798 |
|
|
3,494 |
|
|
— |
|
|
— |
|
Foreclosed
property |
23,249 |
|
|
21,473 |
|
|
21,011 |
|
|
22,884 |
|
|
25,707 |
|
|
|
|
|
|
|
|
— |
|
|
|
Total nonperforming
assets |
$ |
35,692 |
|
|
$ |
35,809 |
|
|
$ |
37,604 |
|
|
$ |
34,221 |
|
|
$ |
36,287 |
|
|
|
|
|
|
|
|
|
|
|
Quarterly net loans
charged off |
$ |
384 |
|
|
$ |
1,347 |
|
|
$ |
485 |
|
|
$ |
649 |
|
|
$ |
241 |
|
|
|
|
|
|
|
|
|
|
|
Year-to-date net loans
charged off |
$ |
1,731 |
|
|
$ |
1,347 |
|
|
$ |
1,715 |
|
|
$ |
1,230 |
|
|
$ |
581 |
|
|
|
|
|
|
|
|
|
Change |
|
|
Q2 |
|
Q2 |
|
Q1 |
|
Q2 17 vs. |
|
Q2 17 vs. |
(dollars in
thousands) |
|
2017 |
|
2016 |
|
2017 |
|
Q2 16 |
|
Q1 17 |
Total loans 90 days
past due and still accruing |
|
$ |
206 |
|
|
$ |
— |
|
|
$ |
35 |
|
|
$ |
206 |
|
|
$ |
171 |
|
Total loans 30-89 days
past due |
|
$ |
4,193 |
|
|
$ |
5,041 |
|
|
$ |
11,424 |
|
|
$ |
(848 |
) |
|
$ |
(7,231 |
) |
Allowance for loan
losses |
|
$ |
44,131 |
|
|
$ |
39,618 |
|
|
$ |
43,195 |
|
|
$ |
4,513 |
|
|
$ |
936 |
|
Total performing
TDRs |
|
$ |
24,663 |
|
|
$ |
28,184 |
|
|
$ |
26,659 |
|
|
$ |
(3,521 |
) |
|
$ |
(1,996 |
) |
|
|
|
|
|
|
|
|
|
|
|
Nonperforming loans to
period end loans |
|
0.16 |
% |
|
0.19 |
% |
|
0.20 |
% |
|
(0.03 |
) |
|
(0.04 |
) |
Nonperforming assets to
period end assets |
|
0.42 |
% |
|
0.46 |
% |
|
0.44 |
% |
|
(0.04 |
) |
|
(0.02 |
) |
Allowance for loan
losses to period end loans |
|
0.74 |
% |
|
0.71 |
% |
|
0.73 |
% |
|
0.03 |
|
|
0.01 |
|
Allowance for loan
losses (originated) to originated period end loans |
|
0.86 |
% |
|
0.90 |
% |
|
0.86 |
% |
|
(0.04 |
) |
|
— |
|
Net charge-offs to
average loans (annualized) |
|
0.03 |
% |
|
0.02 |
% |
|
0.09 |
% |
|
0.01 |
|
|
(0.06 |
) |
Ratio of allowance for
loan losses to nonperforming loans |
|
4.58x |
|
3.74x |
|
3.74x |
|
0.84x |
|
0.84x |
Continued strength in credit quality contributed to the Bank's
financial results as net charge-offs totaled $0.38 million in the
second quarter of 2017 compared to $0.24 million in the second
quarter of 2016 and $1.35 million in the linked quarter.
Total nonperforming assets were $35.69 million, or 0.42%, of Bank
assets at June 30, 2017, as compared to $36.29 million, or
0.46%, at June 30, 2016, and $35.81 million, or 0.44%, at
March 31, 2017. The allowance for loan losses was
$44.13 million, increased from $39.62 million at
June 30, 2016 and $43.20 million at March 31,
2017.
About TowneBank:As one of the
top community banks in Virginia and North Carolina, TowneBank
operates 37 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
Moyock, Grandy, Camden County, Southern Shores, Corolla and Nags
Head in North Carolina. Towne also offers a full range of
financial services 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. 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 $8.43 billion as of June
30, 2017, TowneBank is one of the largest banks headquartered in
Virginia.
On April 27, 2017, TowneBank announced the signing of a
definitive agreement to acquire Paragon Commercial Corporation
(“Paragon”) and its wholly-owned bank subsidiary, Paragon
Commercial Bank. Founded in Raleigh, North Carolina in 1999,
Paragon Commercial Bank provides banking services through highly
responsive professionals, an extensive courier service, online and
mobile technologies, free worldwide ATM access and a select number
of strategically placed offices in Raleigh, Cary and Charlotte,
North Carolina. Pending customary regulatory and shareholder
approvals, the merger is scheduled to close in January 2018. Based
on financial data as of March 31, 2017, the combined company would
have total assets of $9.7 billion, gross loans of $7.1 billion and
total deposits of $7.5 billion.
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. Since the presentation of
these GAAP performance measures and their impact differ between
companies, 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: 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; TowneBank’s ability to complete and successfully
integrate the business of Paragon Commercial Bank in the expected
timeframe, if at all, and to achieve expected revenue synergies and
cost savings from the merger; and other risk factors detailed from
time to time in filings made by TowneBank with the Federal Deposit
Insurance Corporation (the “FDIC”). TowneBank undertakes no
obligation to update or clarify these forward-looking statements,
whether as a result of new information, future events or
otherwise.
Additional Information About the Merger and Where to
Find It:This communication does not constitute an offer to
sell or the solicitation of an offer to buy any securities or a
solicitation of any vote or approval. In connection with the
merger, Paragon will file with the Securities and Exchange
Commission (“SEC”) a preliminary proxy statement. Paragon will
deliver a definitive proxy statement/prospectus to its stockholders
seeking approval of the merger and related matters. In
addition, each of TowneBank and Paragon may file other relevant
documents concerning the proposed merger with the FDIC and SEC.
Paragon, TowneBank and their respective directors and executive
officers may be deemed to be participants in the solicitation of
proxies from Paragon’s stockholders in connection with the proposed
merger. Information about the directors and executive
officers of Paragon and TowneBank and other persons who may be
deemed participants in the solicitation, including their interests
in the merger, will be included in the definitive proxy
statement/prospectus when it becomes available. Additional
information about Paragon’s executive officers and directors can be
found in Paragon’s final prospectus filed with the SEC on June 17,
2016. Additional information regarding TowneBank’s executive
officers and directors can be found in TowneBank’s definitive proxy
statement in connection with its 2017 Annual Meeting of
Stockholders filed with the FDIC on April 21, 2017. You may
obtain free copies of each document from Paragon by directing a
request by telephone or mail to Paragon Commercial Corporation,
3535 Glenwood Avenue, Raleigh, North Carolina 27612, Attention:
Investor Relations (telephone: (919) 788-7770), or by
accessing Paragon’s website at
https://www.paragonbank.com under “About Us-Investor
Relations.” You may obtain free copies of each document from
TowneBank by directing a request by telephone or mail to TowneBank,
6001 Harbour View Boulevard, Suffolk, Virginia 23425, Attention:
Investor Relations (telephone: (757) 638-6794), or by accessing
TowneBank’s website at https://townebank.com under “Investor
Relations.” The information on TowneBank’s and Paragon’s
websites is not, and shall not be deemed to be, a part of this
release or incorporated into other filings either company makes
with the FDIC or SEC.
TOWNEBANK |
Selected Financial Highlights
(unaudited) |
(dollars in thousands, except per share
data) |
|
|
|
|
|
|
|
Increase/ |
|
% Increase/ |
Three Months Ended June 30, |
2017 |
|
2016 |
|
(Decrease) |
|
(Decrease) |
|
|
|
|
|
|
|
|
|
Results of Operations: |
|
|
|
|
|
|
|
|
Net interest
income |
$ |
69,253 |
|
|
$ |
47,784 |
|
|
$ |
21,469 |
|
|
44.93 |
% |
|
Noninterest income |
50,343 |
|
|
36,468 |
|
|
13,875 |
|
|
38.05 |
% |
|
Total Revenue |
119,596 |
|
|
84,252 |
|
|
35,344 |
|
|
41.95 |
% |
|
Acquisition-related
expenses |
1,281 |
|
|
18,435 |
|
|
(17,154 |
) |
|
(93.05 |
)% |
|
Noninterest expenses,
excluding acquisition-related expenses |
76,838 |
|
|
53,464 |
|
|
23,374 |
|
|
43.72 |
% |
|
Provision for loan
losses |
1,320 |
|
|
2,099 |
|
|
(779 |
) |
|
(37.11 |
)% |
|
Income before income
tax and noncontrolling interest |
40,157 |
|
|
10,254 |
|
|
29,903 |
|
|
291.62 |
% |
|
Provision for income
tax expense |
12,240 |
|
|
2,375 |
|
|
9,865 |
|
|
415.37 |
% |
|
Net income |
27,917 |
|
|
7,879 |
|
|
20,038 |
|
|
254.32 |
% |
|
Net income attributable
to noncontrolling interest |
(1,704 |
) |
|
(1,620 |
) |
|
(84 |
) |
|
5.19 |
% |
|
Net income attributable
to TowneBank |
26,213 |
|
|
6,259 |
|
|
19,954 |
|
|
318.80 |
% |
|
Net income available to
common shareholders |
26,213 |
|
|
6,259 |
|
|
19,954 |
|
|
318.80 |
% |
|
Net income per common
share - basic |
0.42 |
|
|
0.12 |
|
|
0.30 |
|
|
250.00 |
% |
|
Net
income per common share - diluted |
0.42 |
|
|
0.12 |
|
|
0.30 |
|
|
250.00 |
% |
Period End Data: |
|
|
|
|
|
|
|
|
Total assets |
$ |
8,427,042 |
|
|
$ |
7,940,741 |
|
|
$ |
486,301 |
|
|
6.12 |
% |
|
Total assets -
tangible |
8,118,730 |
|
|
7,641,740 |
|
|
476,990 |
|
|
6.24 |
% |
|
Earning assets |
7,590,796 |
|
|
7,143,797 |
|
|
446,999 |
|
|
6.26 |
% |
|
Loans (net of unearned
income) |
5,949,061 |
|
|
5,559,949 |
|
|
389,112 |
|
|
7.00 |
% |
|
Allowance for loan
losses |
44,131 |
|
|
39,618 |
|
|
4,513 |
|
|
11.39 |
% |
|
Goodwill and other
intangibles |
308,312 |
|
|
299,000 |
|
|
9,312 |
|
|
3.11 |
% |
|
Nonperforming
assets |
35,692 |
|
|
36,287 |
|
|
(595 |
) |
|
(1.64 |
)% |
|
Noninterest bearing
deposits |
2,219,406 |
|
|
1,950,816 |
|
|
268,590 |
|
|
13.77 |
% |
|
Interest bearing
deposits |
4,376,363 |
|
|
4,235,463 |
|
|
140,900 |
|
|
3.33 |
% |
|
Total
deposits |
6,595,769 |
|
|
6,186,279 |
|
|
409,490 |
|
|
6.62 |
% |
|
Total equity |
1,122,998 |
|
|
1,061,548 |
|
|
61,450 |
|
|
5.79 |
% |
|
Total equity -
tangible |
814,686 |
|
|
762,548 |
|
|
52,138 |
|
|
6.84 |
% |
|
Common equity |
1,110,681 |
|
|
1,050,360 |
|
|
60,321 |
|
|
5.74 |
% |
|
Common equity -
tangible |
802,369 |
|
|
751,360 |
|
|
51,009 |
|
|
6.79 |
% |
|
Book value per common
share |
17.74 |
|
|
16.84 |
|
|
0.90 |
|
|
5.34 |
% |
|
Book
value per common share - tangible |
12.81 |
|
|
12.05 |
|
|
0.76 |
|
|
6.31 |
% |
Daily Average Balances: |
|
|
|
|
|
|
|
|
Total assets |
$ |
8,180,959 |
|
|
$ |
6,534,063 |
|
|
$ |
1,646,896 |
|
|
25.20 |
% |
|
Total assets -
tangible |
7,873,036 |
|
|
6,339,815 |
|
|
1,533,221 |
|
|
24.18 |
% |
|
Earning assets |
7,318,667 |
|
|
5,871,197 |
|
|
1,447,470 |
|
|
24.65 |
% |
|
Loans (net of unearned
income), excluding nonaccrual loans |
5,926,336 |
|
|
4,702,825 |
|
|
1,223,511 |
|
|
26.02 |
% |
|
Allowance for loan
losses |
43,501 |
|
|
38,419 |
|
|
5,082 |
|
|
13.23 |
% |
|
Goodwill and other
intangibles |
307,923 |
|
|
194,248 |
|
|
113,675 |
|
|
58.52 |
% |
|
Noninterest bearing
deposits |
2,081,819 |
|
|
1,538,370 |
|
|
543,449 |
|
|
35.33 |
% |
|
Interest bearing
deposits |
4,186,319 |
|
|
3,544,493 |
|
|
641,826 |
|
|
18.11 |
% |
|
Total
deposits |
6,268,138 |
|
|
5,082,863 |
|
|
1,185,275 |
|
|
23.32 |
% |
|
Total equity |
1,115,008 |
|
|
859,938 |
|
|
255,070 |
|
|
29.66 |
% |
|
Total equity -
tangible |
807,085 |
|
|
665,690 |
|
|
141,395 |
|
|
21.24 |
% |
|
Common equity |
1,103,813 |
|
|
850,393 |
|
|
253,420 |
|
|
29.80 |
% |
|
Common
equity - tangible |
795,891 |
|
|
656,145 |
|
|
139,746 |
|
|
21.30 |
% |
Key
Ratios: |
|
|
|
|
|
|
|
|
Return on average
assets |
1.29 |
% |
|
0.39 |
% |
|
0.90 |
% |
|
230.77 |
% |
|
Return on average
assets - tangible |
1.40 |
% |
|
0.44 |
% |
|
0.96 |
% |
|
218.18 |
% |
|
Return on average
equity |
9.43 |
% |
|
2.93 |
% |
|
6.50 |
% |
|
221.84 |
% |
|
Return on average
equity - tangible |
13.67 |
% |
|
4.21 |
% |
|
9.46 |
% |
|
224.70 |
% |
|
Return on average
common equity |
9.53 |
% |
|
2.96 |
% |
|
6.57 |
% |
|
221.96 |
% |
|
Return on average
common equity - tangible |
13.87 |
% |
|
4.28 |
% |
|
9.59 |
% |
|
224.07 |
% |
|
Net interest
margin-fully tax equivalent (1) |
3.84 |
% |
|
3.33 |
% |
|
0.51 |
% |
|
15.32 |
% |
|
Net interest
margin |
3.80 |
% |
|
3.27 |
% |
|
0.53 |
% |
|
16.21 |
% |
|
Average earning
assets/total average assets |
89.46 |
% |
|
89.88 |
% |
|
(0.42 |
)% |
|
(0.47 |
)% |
|
Average loans/average
deposits |
94.55 |
% |
|
92.52 |
% |
|
2.03 |
% |
|
2.19 |
% |
|
Average noninterest
deposits/total average deposits |
33.21 |
% |
|
30.27 |
% |
|
2.94 |
% |
|
9.71 |
% |
|
Allowance for loan
losses/period end loans |
0.74 |
% |
|
0.71 |
% |
|
0.03 |
% |
|
4.23 |
% |
|
Nonperforming assets to
period end assets |
0.42 |
% |
|
0.46 |
% |
|
(0.04 |
)% |
|
(8.70 |
)% |
|
Period end
equity/period end total assets |
13.33 |
% |
|
13.37 |
% |
|
(0.04 |
)% |
|
(0.30 |
)% |
|
Efficiency ratio |
65.32 |
% |
|
85.34 |
% |
|
(20.02 |
)% |
|
(23.46 |
)% |
|
|
|
|
|
|
|
|
|
(1)
Presented on a tax-equivalent basis |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOWNEBANK |
Selected Financial Highlights
(unaudited) |
(dollars in thousands, except per share
data) |
|
|
|
|
|
|
|
Increase/ |
|
% Increase/ |
Six
Months Ended June 30, |
2017 |
|
2016 |
|
(Decrease) |
|
(Decrease) |
|
|
|
|
|
|
|
|
|
Results of Operations: |
|
|
|
|
|
|
|
|
Net interest
income |
$ |
129,533 |
|
|
$ |
94,120 |
|
|
$ |
35,413 |
|
|
37.63 |
% |
|
Noninterest income |
95,228 |
|
|
68,882 |
|
|
26,346 |
|
|
38.25 |
% |
|
Total Revenue |
224,761 |
|
|
163,002 |
|
|
61,759 |
|
|
37.89 |
% |
|
Acquisition-related
expenses |
1,276 |
|
|
18,849 |
|
|
(17,573 |
) |
|
(93.23 |
)% |
|
Noninterest expenses,
excluding acquisition-related expenses |
147,091 |
|
|
105,211 |
|
|
41,880 |
|
|
39.81 |
% |
|
Provision for loan
losses |
3,861 |
|
|
1,840 |
|
|
2,021 |
|
|
109.84 |
% |
|
Income before income
tax and noncontrolling interest |
72,533 |
|
|
37,102 |
|
|
35,431 |
|
|
95.50 |
% |
|
Provision for income
tax expense |
21,626 |
|
|
10,563 |
|
|
11,063 |
|
|
104.73 |
% |
|
Net income |
50,907 |
|
|
26,539 |
|
|
24,368 |
|
|
91.82 |
% |
|
Net income attributable
to noncontrolling interest |
(2,727 |
) |
|
(2,461 |
) |
|
(266 |
) |
|
10.81 |
% |
|
Net income attributable
to TowneBank |
48,180 |
|
|
24,078 |
|
|
24,102 |
|
|
100.10 |
% |
|
Net income available to
common shareholders |
48,180 |
|
|
24,078 |
|
|
24,102 |
|
|
100.10 |
% |
|
Net income per common
share - basic |
0.78 |
|
|
0.47 |
|
|
0.31 |
|
|
65.96 |
% |
|
Net
income per common share - diluted |
0.77 |
|
|
0.47 |
|
|
0.30 |
|
|
63.83 |
% |
Period End Data: |
|
|
|
|
|
|
|
|
Total assets |
$ |
8,427,042 |
|
|
$ |
7,940,741 |
|
|
$ |
486,301 |
|
|
6.12 |
% |
|
Total assets -
tangible |
8,118,730 |
|
|
7,641,740 |
|
|
476,990 |
|
|
6.24 |
% |
|
Earning assets |
7,590,796 |
|
|
7,143,797 |
|
|
446,999 |
|
|
6.26 |
% |
|
Loans (net of unearned
income) |
5,949,061 |
|
|
5,559,949 |
|
|
389,112 |
|
|
7.00 |
% |
|
Allowance for loan
losses |
44,131 |
|
|
39,618 |
|
|
4,513 |
|
|
11.39 |
% |
|
Goodwill and other
intangibles |
308,312 |
|
|
299,000 |
|
|
9,312 |
|
|
3.11 |
% |
|
Nonperforming
assets |
35,692 |
|
|
36,287 |
|
|
(595 |
) |
|
(1.64 |
)% |
|
Noninterest bearing
deposits |
2,219,406 |
|
|
1,950,816 |
|
|
268,590 |
|
|
13.77 |
% |
|
Interest bearing
deposits |
4,376,363 |
|
|
4,235,463 |
|
|
140,900 |
|
|
3.33 |
% |
|
Total
deposits |
6,595,769 |
|
|
6,186,279 |
|
|
409,490 |
|
|
6.62 |
% |
|
Total equity |
1,122,998 |
|
|
1,061,548 |
|
|
61,450 |
|
|
5.79 |
% |
|
Total equity -
tangible |
814,686 |
|
|
762,548 |
|
|
52,138 |
|
|
6.84 |
% |
|
Common equity |
1,110,681 |
|
|
1,050,360 |
|
|
60,321 |
|
|
5.74 |
% |
|
Common equity -
tangible |
802,369 |
|
|
751,360 |
|
|
51,009 |
|
|
6.79 |
% |
|
Book value per common
share |
17.74 |
|
|
16.84 |
|
|
0.90 |
|
|
5.34 |
% |
|
Book
value per common share - tangible |
12.81 |
|
|
12.05 |
|
|
0.76 |
|
|
6.31 |
% |
Daily Average Balances: |
|
|
|
|
|
|
|
|
Total assets |
$ |
8,091,161 |
|
|
$ |
6,423,650 |
|
|
$ |
1,667,511 |
|
|
25.96 |
% |
|
Total assets -
tangible |
7,786,156 |
|
|
6,233,169 |
|
|
1,552,987 |
|
|
24.91 |
% |
|
Earning assets |
7,248,947 |
|
|
5,767,829 |
|
|
1,481,118 |
|
|
25.68 |
% |
|
Loans (net of unearned
income), excluding nonaccrual loans |
5,894,743 |
|
|
4,609,551 |
|
|
1,285,192 |
|
|
27.88 |
% |
|
Allowance for loan
losses |
43,058 |
|
|
38,487 |
|
|
4,571 |
|
|
11.88 |
% |
|
Goodwill and other
intangibles |
305,006 |
|
|
190,481 |
|
|
114,525 |
|
|
60.12 |
% |
|
Noninterest bearing
deposits |
2,020,195 |
|
|
1,477,081 |
|
|
543,114 |
|
|
36.77 |
% |
|
Interest bearing
deposits |
4,144,447 |
|
|
3,522,050 |
|
|
622,397 |
|
|
17.67 |
% |
|
Total
deposits |
6,164,642 |
|
|
4,999,131 |
|
|
1,165,511 |
|
|
23.31 |
% |
|
Total equity |
1,104,308 |
|
|
845,058 |
|
|
259,250 |
|
|
30.68 |
% |
|
Total equity -
tangible |
799,303 |
|
|
654,577 |
|
|
144,726 |
|
|
22.11 |
% |
|
Common equity |
1,093,128 |
|
|
835,830 |
|
|
257,298 |
|
|
30.78 |
% |
|
Common
equity - tangible |
788,122 |
|
|
645,349 |
|
|
142,773 |
|
|
22.12 |
% |
Key
Ratios: |
|
|
|
|
|
|
|
|
Return on average
assets |
1.20 |
% |
|
0.75 |
% |
|
0.45 |
% |
|
60.00 |
% |
|
Return on average
assets - tangible |
1.31 |
% |
|
0.82 |
% |
|
0.49 |
% |
|
59.76 |
% |
|
Return on average
equity |
8.80 |
% |
|
5.73 |
% |
|
3.07 |
% |
|
53.58 |
% |
|
Return on average
equity - tangible |
12.79 |
% |
|
7.84 |
% |
|
4.95 |
% |
|
63.14 |
% |
|
Return on average
common equity |
8.89 |
% |
|
5.79 |
% |
|
3.10 |
% |
|
53.54 |
% |
|
Return on average
common equity - tangible |
12.97 |
% |
|
7.95 |
% |
|
5.02 |
% |
|
63.14 |
% |
|
Net interest
margin-fully tax equivalent (1) |
3.64 |
% |
|
3.33 |
% |
|
0.31 |
% |
|
9.31 |
% |
|
Net interest
margin |
3.60 |
% |
|
3.28 |
% |
|
0.32 |
% |
|
9.76 |
% |
|
Average earning
assets/total average assets |
89.59 |
% |
|
89.79 |
% |
|
(0.20 |
)% |
|
(0.22 |
)% |
|
Average loans/average
deposits |
95.62 |
% |
|
92.21 |
% |
|
3.41 |
% |
|
3.70 |
% |
|
Average noninterest
deposits/total average deposits |
32.77 |
% |
|
29.55 |
% |
|
3.22 |
% |
|
10.90 |
% |
|
Allowance for loan
losses/period end loans |
0.74 |
% |
|
0.71 |
% |
|
0.03 |
% |
|
4.23 |
% |
|
Nonperforming assets to
period end assets |
0.42 |
% |
|
0.46 |
% |
|
(0.04 |
)% |
|
(8.70 |
)% |
|
Period end
equity/period end total assets |
13.33 |
% |
|
13.37 |
% |
|
(0.04 |
)% |
|
(0.30 |
)% |
|
Efficiency ratio |
66.01 |
% |
|
76.11 |
% |
|
(10.10 |
)% |
|
(13.27 |
)% |
|
|
|
|
|
|
|
|
|
(1)
Presented on a tax-equivalent basis |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOWNEBANK |
Selected Financial Highlights
(unaudited) |
(dollars in thousands, except per share
data) |
|
|
|
June 30, |
|
March 31, |
|
Increase/ |
|
% Increase/ |
Three Months Ended |
2017 |
|
2017 |
|
(Decrease) |
|
(Decrease) |
|
|
|
|
|
|
|
|
|
Results of Operations: |
|
|
|
|
|
|
|
|
Net interest
income |
$ |
69,253 |
|
|
$ |
60,281 |
|
|
$ |
8,972 |
|
|
14.88 |
% |
|
Noninterest income |
50,343 |
|
|
44,886 |
|
|
5,457 |
|
|
12.16 |
% |
|
Total Revenue |
119,596 |
|
|
105,167 |
|
|
14,429 |
|
|
13.72 |
% |
|
Acquisition-related
expenses |
1,281 |
|
|
(5 |
) |
|
1,286 |
|
|
N/M |
|
|
Noninterest expenses,
excluding acquisition-related expenses |
76,838 |
|
|
70,253 |
|
|
6,585 |
|
|
9.37 |
% |
|
Provision for loan
losses |
1,320 |
|
|
2,541 |
|
|
(1,221 |
) |
|
(48.05 |
)% |
|
Income before income
tax and noncontrolling interest |
40,157 |
|
|
32,378 |
|
|
7,779 |
|
|
24.03 |
% |
|
Provision for income
tax expense |
12,240 |
|
|
9,386 |
|
|
2,854 |
|
|
30.41 |
% |
|
Net income |
27,917 |
|
|
22,992 |
|
|
4,925 |
|
|
21.42 |
% |
|
Net income attributable
to noncontrolling interest |
(1,704 |
) |
|
(1,024 |
) |
|
(680 |
) |
|
66.41 |
% |
|
Net income attributable
to TowneBank |
26,213 |
|
|
21,968 |
|
|
4,245 |
|
|
19.32 |
% |
|
Net income available to
common shareholders |
26,213 |
|
|
21,968 |
|
|
4,245 |
|
|
19.32 |
% |
|
Net income per common
share - basic |
0.42 |
|
|
0.35 |
|
|
0.07 |
|
|
20.00 |
% |
|
Net
income per common share - diluted |
0.42 |
|
|
0.35 |
|
|
0.07 |
|
|
20.00 |
% |
Period End Data: |
|
|
|
|
|
|
|
|
Total assets |
$ |
8,427,042 |
|
|
$ |
8,174,786 |
|
|
$ |
252,256 |
|
|
3.09 |
% |
|
Total assets -
tangible |
8,118,730 |
|
|
7,872,823 |
|
|
245,907 |
|
|
3.12 |
% |
|
Earning assets |
7,590,796 |
|
|
7,362,550 |
|
|
228,246 |
|
|
3.10 |
% |
|
Loans (net of unearned
income) |
5,949,061 |
|
|
5,913,080 |
|
|
35,981 |
|
|
0.61 |
% |
|
Allowance for loan
losses |
44,131 |
|
|
43,195 |
|
|
936 |
|
|
2.17 |
% |
|
Goodwill and other
intangibles |
308,312 |
|
|
301,962 |
|
|
6,350 |
|
|
2.10 |
% |
|
Nonperforming
assets |
35,692 |
|
|
35,809 |
|
|
(117 |
) |
|
(0.33 |
)% |
|
Noninterest bearing
deposits |
2,219,406 |
|
|
2,052,598 |
|
|
166,808 |
|
|
8.13 |
% |
|
Interest bearing
deposits |
4,376,363 |
|
|
4,138,174 |
|
|
238,189 |
|
|
5.76 |
% |
|
Total
deposits |
6,595,769 |
|
|
6,190,772 |
|
|
404,997 |
|
|
6.54 |
% |
|
Total equity |
1,122,998 |
|
|
1,101,245 |
|
|
21,753 |
|
|
1.98 |
% |
|
Total equity -
tangible |
814,686 |
|
|
799,283 |
|
|
15,403 |
|
|
1.93 |
% |
|
Common equity |
1,110,681 |
|
|
1,089,760 |
|
|
20,921 |
|
|
1.92 |
% |
|
Common equity -
tangible |
802,369 |
|
|
787,798 |
|
|
14,571 |
|
|
1.85 |
% |
|
Book value per common
share |
17.74 |
|
|
17.42 |
|
|
0.32 |
|
|
1.84 |
% |
|
Book
value per common share - tangible |
12.81 |
|
|
12.59 |
|
|
0.22 |
|
|
1.75 |
% |
Daily Average Balances: |
|
|
|
|
|
|
|
|
Total assets |
$ |
8,180,959 |
|
|
$ |
8,000,366 |
|
|
$ |
180,593 |
|
|
2.26 |
% |
|
Total assets -
tangible |
7,873,036 |
|
|
7,698,310 |
|
|
174,726 |
|
|
2.27 |
% |
|
Earning assets |
7,318,667 |
|
|
7,177,697 |
|
|
140,970 |
|
|
1.96 |
% |
|
Loans (net of unearned
income), excluding nonaccrual loans |
5,926,336 |
|
|
5,862,799 |
|
|
63,537 |
|
|
1.08 |
% |
|
Allowance for loan
losses |
43,501 |
|
|
42,610 |
|
|
891 |
|
|
2.09 |
% |
|
Goodwill and other
intangibles |
307,923 |
|
|
302,056 |
|
|
5,867 |
|
|
1.94 |
% |
|
Noninterest bearing
deposits |
2,081,819 |
|
|
1,957,887 |
|
|
123,932 |
|
|
6.33 |
% |
|
Interest bearing
deposits |
4,186,319 |
|
|
4,102,109 |
|
|
84,210 |
|
|
2.05 |
% |
|
Total
deposits |
6,268,138 |
|
|
6,059,996 |
|
|
208,142 |
|
|
3.43 |
% |
|
Total equity |
1,115,008 |
|
|
1,093,490 |
|
|
21,518 |
|
|
1.97 |
% |
|
Total equity -
tangible |
807,085 |
|
|
791,433 |
|
|
15,652 |
|
|
1.98 |
% |
|
Common equity |
1,103,813 |
|
|
1,082,324 |
|
|
21,489 |
|
|
1.99 |
% |
|
Common
equity - tangible |
795,891 |
|
|
780,268 |
|
|
15,623 |
|
|
2.00 |
% |
Key
Ratios: |
|
|
|
|
|
|
|
|
Return on average
assets |
1.29 |
% |
|
1.11 |
% |
|
0.18 |
% |
|
16.22 |
% |
|
Return on average
assets - tangible |
1.40 |
% |
|
1.22 |
% |
|
0.18 |
% |
|
14.75 |
% |
|
Return on average
equity |
9.43 |
% |
|
8.15 |
% |
|
1.28 |
% |
|
15.71 |
% |
|
Return on average
equity - tangible |
13.67 |
% |
|
11.88 |
% |
|
1.79 |
% |
|
15.07 |
% |
|
Return on average
common equity |
9.53 |
% |
|
8.23 |
% |
|
1.30 |
% |
|
15.80 |
% |
|
Return on average
common equity - tangible |
13.87 |
% |
|
12.05 |
% |
|
1.82 |
% |
|
15.10 |
% |
|
Net interest
margin-fully tax equivalent (1) |
3.84 |
% |
|
3.45 |
% |
|
0.39 |
% |
|
11.30 |
% |
|
Net interest
margin |
3.80 |
% |
|
3.41 |
% |
|
0.39 |
% |
|
11.44 |
% |
|
Average earning
assets/total average assets |
89.46 |
% |
|
89.72 |
% |
|
(0.26 |
)% |
|
(0.29 |
)% |
|
Average loans/average
deposits |
94.55 |
% |
|
96.75 |
% |
|
(2.20 |
)% |
|
(2.27 |
)% |
|
Average noninterest
deposits/total average deposits |
33.21 |
% |
|
32.31 |
% |
|
0.90 |
% |
|
2.79 |
% |
|
Allowance for loan
losses/period end loans |
0.74 |
% |
|
0.73 |
% |
|
0.01 |
% |
|
1.37 |
% |
|
Nonperforming assets to
period end assets |
0.42 |
% |
|
0.44 |
% |
|
(0.02 |
)% |
|
(4.55 |
)% |
|
Period end
equity/period end total assets |
13.33 |
% |
|
13.47 |
% |
|
(0.14 |
)% |
|
(1.04 |
)% |
|
Efficiency ratio |
65.32 |
% |
|
66.80 |
% |
|
(1.48 |
)% |
|
(2.22 |
)% |
|
|
|
|
|
|
|
|
|
(1)
Presented on a tax-equivalent basis |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOWNEBANK |
Average Balances, Yields and Rate Paid
(unaudited) |
(dollars in thousands) |
|
|
Three Months Ended |
|
Three Months Ended |
|
Three Months Ended |
|
June 30, 2017 |
|
March 31, 2017 |
|
June 30, 2016 |
|
|
|
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 and deferred costs), excluding
nonaccrual loans |
$ |
5,926,336 |
|
|
$ |
72,167 |
|
|
4.88 |
% |
|
$ |
5,862,799 |
|
|
$ |
64,979 |
|
|
4.49 |
% |
|
$ |
4,702,825 |
|
|
$ |
52,232 |
|
|
4.47 |
% |
Taxable investment
securities |
597,231 |
|
|
2,801 |
|
|
1.88 |
% |
|
627,338 |
|
|
2,843 |
|
|
1.81 |
% |
|
671,791 |
|
|
2,734 |
|
|
1.63 |
% |
Tax-exempt investment
securities |
48,560 |
|
|
370 |
|
|
3.05 |
% |
|
50,485 |
|
|
375 |
|
|
2.97 |
% |
|
52,398 |
|
|
405 |
|
|
3.09 |
% |
Interest-bearing
deposits |
455,489 |
|
|
1,188 |
|
|
1.05 |
% |
|
450,076 |
|
|
887 |
|
|
0.80 |
% |
|
289,699 |
|
|
364 |
|
|
0.51 |
% |
Loans held for
sale |
291,051 |
|
|
2,879 |
|
|
3.96 |
% |
|
186,999 |
|
|
1,727 |
|
|
3.69 |
% |
|
154,484 |
|
|
1,294 |
|
|
3.31 |
% |
Total earning
assets |
7,318,667 |
|
|
79,405 |
|
|
4.35 |
% |
|
7,177,697 |
|
|
70,811 |
|
|
4.00 |
% |
|
5,871,197 |
|
|
57,029 |
|
|
3.91 |
% |
Less: allowance
for loan losses |
(43,501 |
) |
|
|
|
|
|
(42,610 |
) |
|
|
|
|
|
(38,419 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonearning
assets |
905,793 |
|
|
|
|
|
|
865,279 |
|
|
|
|
|
|
701,285 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets |
$ |
8,180,959 |
|
|
|
|
|
|
$ |
8,000,366 |
|
|
|
|
|
|
$ |
6,534,063 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand and money
market |
$ |
2,235,869 |
|
|
$ |
1,957 |
|
|
0.35 |
% |
|
$ |
2,272,911 |
|
|
$ |
1,865 |
|
|
0.33 |
% |
|
$ |
1,813,502 |
|
|
$ |
1,298 |
|
|
0.29 |
% |
Savings |
318,323 |
|
|
815 |
|
|
1.03 |
% |
|
320,319 |
|
|
757 |
|
|
0.96 |
% |
|
301,542 |
|
|
709 |
|
|
0.95 |
% |
Certificates of
deposit |
1,632,127 |
|
|
4,105 |
|
|
1.01 |
% |
|
1,508,879 |
|
|
3,381 |
|
|
0.91 |
% |
|
1,429,449 |
|
|
3,260 |
|
|
0.92 |
% |
Total interest-bearing
deposits |
4,186,319 |
|
|
6,877 |
|
|
0.66 |
% |
|
4,102,109 |
|
|
6,003 |
|
|
0.59 |
% |
|
3,544,493 |
|
|
5,267 |
|
|
0.60 |
% |
Borrowings |
641,748 |
|
|
2,551 |
|
|
1.57 |
% |
|
723,506 |
|
|
3,803 |
|
|
2.10 |
% |
|
471,392 |
|
|
3,190 |
|
|
2.69 |
% |
Total interest-bearing
liabilities |
4,828,067 |
|
|
9,428 |
|
|
0.78 |
% |
|
4,825,615 |
|
|
9,806 |
|
|
0.82 |
% |
|
4,015,885 |
|
|
8,457 |
|
|
0.85 |
% |
Demand deposits |
2,081,819 |
|
|
|
|
|
|
1,957,887 |
|
|
|
|
|
|
1,538,370 |
|
|
|
|
|
Other
noninterest-bearing liabilities |
156,065 |
|
|
|
|
|
|
123,374 |
|
|
|
|
|
|
119,870 |
|
|
|
|
|
Total
liabilities |
7,065,951 |
|
|
|
|
|
|
6,906,876 |
|
|
|
|
|
|
5,674,125 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’
equity |
1,115,008 |
|
|
|
|
|
|
1,093,490 |
|
|
|
|
|
|
859,938 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and equity |
$ |
8,180,959 |
|
|
|
|
|
|
$ |
8,000,366 |
|
|
|
|
|
|
$ |
6,534,063 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
(tax-equivalent basis) |
|
|
$ |
69,977 |
|
|
|
|
|
|
$ |
61,005 |
|
|
|
|
|
|
$ |
48,572 |
|
|
|
Reconcilement of Non-GAAP Financial Measures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax-equivalent
basis adjustment |
|
|
(724 |
) |
|
|
|
|
|
(724 |
) |
|
|
|
|
|
(788 |
) |
|
|
Net interest income
(GAAP) |
|
|
$ |
69,253 |
|
|
|
|
|
|
$ |
60,281 |
|
|
|
|
|
|
$ |
47,784 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread
(1) |
|
|
|
|
3.57 |
% |
|
|
|
|
|
3.18 |
% |
|
|
|
|
|
3.06 |
% |
Interest
expense as a percent of average earning assets |
|
|
|
0.52 |
% |
|
|
|
|
|
0.55 |
% |
|
|
|
|
|
0.58 |
% |
Net
interest margin (tax equivalent basis) (2) |
|
|
|
3.84 |
% |
|
|
|
|
|
3.45 |
% |
|
|
|
|
|
3.33 |
% |
Total cost of
deposits |
|
|
|
|
0.44 |
% |
|
|
|
|
|
0.40 |
% |
|
|
|
|
|
0.42 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
TOWNEBANK |
Average Balances, Yields and Rate Paid
(unaudited) |
(dollars in thousands) |
|
|
Six Months Ended |
|
Six Months Ended |
|
Six Months Ended June 30,
2017 |
|
June 30, 2017 |
|
June 30, 2016 |
|
Compared with June 30, 2016 |
|
|
|
Interest |
|
Average |
|
|
|
Interest |
|
Average |
|
|
|
|
|
Average |
|
Income/ |
|
Yield/ |
|
Average |
|
Income/ |
|
Yield/ |
|
Increase |
|
Change due to |
|
Balance |
|
Expense |
|
Rate |
|
Balance |
|
Expense |
|
Rate |
|
(Decrease) |
|
Rate |
|
Volume |
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans (net of unearned
income and deferred costs), excluding nonaccrual loans |
$ |
5,894,743 |
|
|
$ |
137,146 |
|
|
4.69 |
% |
|
$ |
4,609,551 |
|
|
$ |
103,013 |
|
|
4.49 |
% |
|
$ |
34,133 |
|
|
$ |
4,650 |
|
|
$ |
29,483 |
|
Taxable investment
securities |
612,196 |
|
|
5,644 |
|
|
1.84 |
% |
|
713,152 |
|
|
5,790 |
|
|
1.62 |
% |
|
(146 |
) |
|
730 |
|
|
(876 |
) |
Tax-exempt investment
securities |
49,522 |
|
|
746 |
|
|
3.01 |
% |
|
52,689 |
|
|
814 |
|
|
3.09 |
% |
|
(68 |
) |
|
(20 |
) |
|
(48 |
) |
Interest-bearing
deposits |
453,174 |
|
|
2,074 |
|
|
0.92 |
% |
|
277,477 |
|
|
694 |
|
|
0.50 |
% |
|
1,380 |
|
|
785 |
|
|
595 |
|
Loans held for
sale |
239,312 |
|
|
4,606 |
|
|
3.85 |
% |
|
114,960 |
|
|
1,987 |
|
|
3.46 |
% |
|
2,619 |
|
|
249 |
|
|
2,370 |
|
Total
earning assets |
7,248,947 |
|
|
150,216 |
|
|
4.18 |
% |
|
5,767,829 |
|
|
112,298 |
|
|
3.92 |
% |
|
37,918 |
|
|
6,394 |
|
|
31,524 |
|
Less: allowance
for loan losses |
(43,058 |
) |
|
|
|
|
|
(38,487 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
nonearning assets |
$ |
885,272 |
|
|
|
|
|
|
$ |
694,308 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets |
$ |
8,091,161 |
|
|
|
|
|
|
$ |
6,423,650 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand and money market |
$ |
2,254,288 |
|
|
$ |
3,822 |
|
|
0.34 |
% |
|
$ |
1,798,205 |
|
|
$ |
2,626 |
|
|
0.29 |
% |
|
$ |
1,196 |
|
|
$ |
470 |
|
|
$ |
726 |
|
Savings |
319,315 |
|
|
1,573 |
|
|
0.99 |
% |
|
300,806 |
|
|
1,409 |
|
|
0.94 |
% |
|
164 |
|
|
77 |
|
|
87 |
|
Certificates of
deposit |
1,570,844 |
|
|
7,485 |
|
|
0.96 |
% |
|
1,423,039 |
|
|
6,445 |
|
|
0.91 |
% |
|
1,040 |
|
|
360 |
|
|
680 |
|
Total interest-bearing
deposits |
4,144,447 |
|
|
12,880 |
|
|
0.63 |
% |
|
3,522,050 |
|
|
10,480 |
|
|
0.60 |
% |
|
2,400 |
|
|
907 |
|
|
1,493 |
|
Borrowings |
682,401 |
|
|
6,354 |
|
|
1.85 |
% |
|
470,497 |
|
|
6,375 |
|
|
2.69 |
% |
|
(22 |
) |
|
(2,348 |
) |
|
2,326 |
|
Total interest-bearing
liabilities |
4,826,848 |
|
|
19,234 |
|
|
0.80 |
% |
|
3,992,547 |
|
|
16,855 |
|
|
0.85 |
% |
|
2,378 |
|
|
(1,441 |
) |
|
3,819 |
|
Demand deposits |
2,020,195 |
|
|
|
|
|
|
1,477,081 |
|
|
|
|
|
|
|
|
|
|
|
Other
noninterest-bearing liabilities |
139,810 |
|
|
|
|
|
|
108,964 |
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities |
6,986,853 |
|
|
|
|
|
|
5,578,592 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’
equity |
1,104,308 |
|
|
|
|
|
|
845,058 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and equity |
$ |
8,091,161 |
|
|
|
|
|
|
$ |
6,423,650 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
(tax-equivalent basis) |
|
|
$ |
130,982 |
|
|
|
|
|
|
$ |
95,442 |
|
|
|
|
$ |
35,540 |
|
|
$ |
7,835 |
|
|
$ |
27,705 |
|
Reconcilement of Non-GAAP Financial Measures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax-equivalent
basis adjustment |
|
|
(1,449 |
) |
|
|
|
|
|
(1,322 |
) |
|
|
|
(127 |
) |
|
|
|
|
Net interest income
(GAAP) |
|
|
$ |
129,533 |
|
|
|
|
|
|
$ |
94,120 |
|
|
|
|
$ |
35,413 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread
(1) |
|
|
|
|
3.38 |
% |
|
|
|
|
|
3.07 |
% |
|
|
|
|
|
|
Interest
expense as a percent of averageearning assets |
|
|
|
0.54 |
% |
|
|
|
|
|
0.59 |
% |
|
|
|
|
|
|
Net interest margin
(tax equivalentbasis) (2) |
|
|
|
|
3.64 |
% |
|
|
|
|
|
3.33 |
% |
|
|
|
|
|
|
Total cost of
deposits |
|
|
|
|
0.42 |
% |
|
|
|
|
|
0.42 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
TOWNEBANK |
Consolidated Balance Sheets |
(dollars in thousands, except share
data) |
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
2017 |
|
2016 |
|
2016 |
|
(unaudited) |
|
(unaudited) |
|
(audited) |
ASSETS |
|
|
|
|
|
Cash and due from
banks |
$ |
468,455 |
|
|
$ |
188,183 |
|
|
$ |
130,967 |
|
Interest-bearing
deposits in financial institutions |
5,071 |
|
|
33,777 |
|
|
5,581 |
|
Federal funds sold |
— |
|
|
14 |
|
|
— |
|
Total Cash and Cash Equivalents |
473,526 |
|
|
221,974 |
|
|
136,548 |
|
Securities available
for sale, at fair value |
700,354 |
|
|
812,375 |
|
|
812,974 |
|
Securities held to
maturity, at amortized cost |
63,937 |
|
|
65,728 |
|
|
66,490 |
|
Federal Home Loan Bank
stock, at amortized cost |
29,586 |
|
|
28,008 |
|
|
35,937 |
|
Total Securities |
793,877 |
|
|
906,111 |
|
|
915,401 |
|
Mortgage loans held for
sale |
388,523 |
|
|
473,147 |
|
|
314,046 |
|
Loans, net of unearned
income and deferred costs: |
|
|
|
|
|
Real
estate-residential 1-4 family |
1,227,389 |
|
|
1,183,818 |
|
|
1,215,823 |
|
Real
estate-commercial |
2,295,603 |
|
|
2,118,108 |
|
|
2,251,312 |
|
Real
estate-construction and development |
888,566 |
|
|
824,609 |
|
|
826,027 |
|
Real
estate-multi-family |
206,894 |
|
|
171,501 |
|
|
222,791 |
|
Commercial |
1,110,822 |
|
|
1,075,736 |
|
|
1,089,539 |
|
Consumer
and other loans |
219,787 |
|
|
186,177 |
|
|
201,729 |
|
Loans,
net of unearned income and deferred costs |
5,949,061 |
|
|
5,559,949 |
|
|
5,807,221 |
|
Less: allowance for loan losses |
(44,131 |
) |
|
(39,618 |
) |
|
(42,001 |
) |
Net Loans |
5,904,930 |
|
|
5,520,331 |
|
|
5,765,220 |
|
Premises and equipment,
net |
199,926 |
|
|
202,333 |
|
|
198,568 |
|
Goodwill |
268,246 |
|
|
257,485 |
|
|
264,910 |
|
Other intangible
assets, net |
40,066 |
|
|
41,515 |
|
|
37,856 |
|
Bank-owned life
insurance policies |
192,339 |
|
|
164,933 |
|
|
189,499 |
|
Other assets |
165,609 |
|
|
152,912 |
|
|
151,867 |
|
TOTAL
ASSETS |
$ |
8,427,042 |
|
|
$ |
7,940,741 |
|
|
$ |
7,973,915 |
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
Deposits: |
|
|
|
|
|
Noninterest-bearing demand |
$ |
2,219,406 |
|
|
$ |
1,950,816 |
|
|
$ |
1,947,312 |
|
Interest-bearing: |
|
|
|
|
|
Demand
and money market accounts |
2,292,978 |
|
|
2,174,154 |
|
|
2,263,894 |
|
Savings |
318,714 |
|
|
317,071 |
|
|
319,611 |
|
Certificates of deposit |
1,764,671 |
|
|
1,744,238 |
|
|
1,504,380 |
|
Total Deposits |
6,595,769 |
|
|
6,186,279 |
|
|
6,035,197 |
|
Advances from the
Federal Home Loan Bank |
527,219 |
|
|
500,798 |
|
|
687,511 |
|
Repurchase agreements
and other borrowings |
28,571 |
|
|
44,008 |
|
|
32,540 |
|
Total Borrowings |
555,790 |
|
|
544,806 |
|
|
720,051 |
|
Other liabilities |
152,485 |
|
|
148,108 |
|
|
132,109 |
|
TOTAL
LIABILITIES |
7,304,044 |
|
|
6,879,193 |
|
|
6,887,357 |
|
Preferred stock |
|
|
|
|
|
Authorized and unissued shares - 2,000,000 |
— |
|
|
— |
|
|
— |
|
Common stock, $1.667
par: 90,000,000 shares authorized |
|
|
|
|
|
62,619,045; 62,365,197; and 62,492,168 shares issued at |
|
|
|
|
|
June 30, 2017 and 2016 and December 31, 2016, respectively |
104,386 |
|
|
103,963 |
|
|
104,174 |
|
Capital surplus |
747,867 |
|
|
742,228 |
|
|
745,411 |
|
Retained earnings |
260,783 |
|
|
202,565 |
|
|
229,503 |
|
Common stock issued to
deferred compensation trust, at cost |
|
|
|
|
|
697,606; 674,899; and 692,431 shares at |
|
|
|
|
|
June 30, 2017 and 2016 and December 31, 2016, respectively |
(11,492 |
) |
|
(10,785 |
) |
|
(11,168 |
) |
Deferred compensation
trust |
11,492 |
|
|
10,785 |
|
|
11,168 |
|
Accumulated other
comprehensive income (loss) |
(2,355 |
) |
|
1,604 |
|
|
(3,986 |
) |
TOTAL
SHAREHOLDERS’ EQUITY |
1,110,681 |
|
|
1,050,360 |
|
|
1,075,102 |
|
Noncontrolling
interest |
12,317 |
|
|
11,188 |
|
|
11,456 |
|
TOTAL
EQUITY |
1,122,998 |
|
|
1,061,548 |
|
|
1,086,558 |
|
TOTAL
LIABILITIES AND EQUITY |
$ |
8,427,042 |
|
|
$ |
7,940,741 |
|
|
$ |
7,973,915 |
|
TOWNEBANK |
Consolidated Statements of Income
(unaudited) |
(dollars in thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
INTEREST
INCOME: |
|
|
|
|
|
|
|
Loans,
including fees |
$ |
71,443 |
|
|
$ |
51,444 |
|
|
$ |
135,698 |
|
|
$ |
101,690 |
|
Investment securities |
3,171 |
|
|
3,139 |
|
|
6,389 |
|
|
6,604 |
|
Interest-bearing deposits in financial institutions and
federal funds sold |
1,188 |
|
|
364 |
|
|
2,074 |
|
|
694 |
|
Mortgage
loans held for sale |
2,879 |
|
|
1,294 |
|
|
4,606 |
|
|
1,987 |
|
Total interest income |
78,681 |
|
|
56,241 |
|
|
148,767 |
|
|
110,975 |
|
INTEREST
EXPENSE: |
|
|
|
|
|
|
|
Deposits |
6,877 |
|
|
5,267 |
|
|
12,879 |
|
|
10,480 |
|
Advances
from the Federal Home Loan Bank |
2,521 |
|
|
3,158 |
|
|
6,294 |
|
|
6,321 |
|
Repurchase agreements and other borrowings, net of capitalized
interest |
30 |
|
|
32 |
|
|
61 |
|
|
54 |
|
Total interest expense |
9,428 |
|
|
8,457 |
|
|
19,234 |
|
|
16,855 |
|
Net interest
income |
69,253 |
|
|
47,784 |
|
|
129,533 |
|
|
94,120 |
|
|
|
|
|
|
|
|
|
PROVISION FOR
LOAN LOSSES |
1,320 |
|
|
2,099 |
|
|
3,861 |
|
|
1,840 |
|
Net interest income after provision for loan
losses |
67,933 |
|
|
45,685 |
|
|
125,672 |
|
|
92,280 |
|
NONINTEREST
INCOME: |
|
|
|
|
|
|
|
Residential mortgage banking income, net |
21,594 |
|
|
12,148 |
|
|
39,226 |
|
|
19,266 |
|
Insurance
commissions and other title fees and income, net |
12,902 |
|
|
11,627 |
|
|
27,702 |
|
|
25,660 |
|
Real
estate brokerage and property management income, net |
7,629 |
|
|
6,116 |
|
|
12,623 |
|
|
10,943 |
|
Service
charges on deposit accounts |
2,644 |
|
|
2,284 |
|
|
5,115 |
|
|
4,460 |
|
Credit
card merchant fees, net |
1,298 |
|
|
1,113 |
|
|
2,416 |
|
|
2,008 |
|
Bank
owned life insurance |
1,421 |
|
|
1,181 |
|
|
2,896 |
|
|
2,352 |
|
Other
income |
2,856 |
|
|
1,999 |
|
|
5,251 |
|
|
4,193 |
|
Loss on
investment securities |
(1 |
) |
|
— |
|
|
(1 |
) |
|
— |
|
Total noninterest income |
50,343 |
|
|
36,468 |
|
|
95,228 |
|
|
68,882 |
|
NONINTEREST
EXPENSE: |
|
|
|
|
|
|
|
Salaries
and employee benefits |
44,834 |
|
|
30,093 |
|
|
85,042 |
|
|
60,279 |
|
Occupancy |
6,658 |
|
|
5,157 |
|
|
13,342 |
|
|
10,174 |
|
Furniture
and equipment |
3,563 |
|
|
2,381 |
|
|
6,906 |
|
|
4,739 |
|
Other
expenses |
23,064 |
|
|
34,268 |
|
|
43,077 |
|
|
48,868 |
|
Total noninterest expense |
78,119 |
|
|
71,899 |
|
|
148,367 |
|
|
124,060 |
|
Income before
income tax expense & noncontrolling interest |
40,157 |
|
|
10,254 |
|
|
72,533 |
|
|
37,102 |
|
Provision for
income tax expense |
12,240 |
|
|
2,375 |
|
|
21,626 |
|
|
10,563 |
|
Net
income |
$ |
27,917 |
|
|
$ |
7,879 |
|
|
$ |
50,907 |
|
|
$ |
26,539 |
|
Net income
attributable to noncontrolling interest |
(1,704 |
) |
|
(1,620 |
) |
|
(2,727 |
) |
|
(2,461 |
) |
Net income
attributable to TowneBank |
$ |
26,213 |
|
|
$ |
6,259 |
|
|
$ |
48,180 |
|
|
$ |
24,078 |
|
Net income
available to common shareholders |
$ |
26,213 |
|
|
$ |
6,259 |
|
|
$ |
48,180 |
|
|
$ |
24,078 |
|
Per common
share information |
|
|
|
|
|
|
|
Basic
earnings |
$ |
0.42 |
|
|
$ |
0.12 |
|
|
$ |
0.78 |
|
|
$ |
0.47 |
|
Diluted
earnings |
$ |
0.42 |
|
|
$ |
0.12 |
|
|
$ |
0.77 |
|
|
$ |
0.47 |
|
Cash
dividends declared |
$ |
0.14 |
|
|
$ |
0.13 |
|
|
$ |
0.27 |
|
|
$ |
0.25 |
|
TOWNEBANK |
Consolidated Statements of Comprehensive
Income |
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
|
|
|
Net
income |
$ |
27,917 |
|
|
$ |
7,879 |
|
|
$ |
50,907 |
|
|
$ |
26,539 |
|
|
|
|
|
|
|
|
|
Other
comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains on securities |
|
|
|
|
|
|
|
Unrealized holding gains arising during the period |
2,571 |
|
|
2,329 |
|
|
2,733 |
|
|
6,809 |
|
Deferred
tax expense |
(900 |
) |
|
(815 |
) |
|
(957 |
) |
|
(2,383 |
) |
Realized
losses reclassified into earnings |
1 |
|
|
— |
|
|
1 |
|
|
— |
|
Net
unrealized gains |
1,672 |
|
|
1,514 |
|
|
1,777 |
|
|
4,426 |
|
|
|
|
|
|
|
|
|
Pension and postretirement benefit plans |
|
|
|
|
|
|
|
Actuarial
gain (loss) |
143 |
|
|
— |
|
|
(395 |
) |
|
109 |
|
Deferred
tax benefit (expense) |
(49 |
) |
|
— |
|
|
139 |
|
|
(38 |
) |
Amortization of prior service costs |
41 |
|
|
115 |
|
|
92 |
|
|
153 |
|
Deferred
tax expense |
(14 |
) |
|
(40 |
) |
|
(32 |
) |
|
(53 |
) |
Amortization of actuarial loss (gain) |
39 |
|
|
(2 |
) |
|
78 |
|
|
2 |
|
Deferred
tax expense |
(14 |
) |
|
1 |
|
|
(28 |
) |
|
(1 |
) |
Change in
retirement plans, net of tax |
146 |
|
|
74 |
|
|
(146 |
) |
|
172 |
|
|
|
|
|
|
|
|
|
Other
comprehensive income (loss), net of tax |
1,818 |
|
|
1,588 |
|
|
1,631 |
|
|
4,598 |
|
|
|
|
|
|
|
|
|
Comprehensive
income |
$ |
29,735 |
|
|
$ |
9,467 |
|
|
$ |
52,538 |
|
|
$ |
31,137 |
|
TOWNEBANK |
Consolidated Balance Sheets - Five Quarter
Trend |
(dollars in thousands, except share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
2017 |
|
2017 |
|
2016 |
|
2016 |
|
2016 |
|
(unaudited) |
|
(unaudited) |
|
(audited) |
|
(unaudited) |
|
(unaudited) |
ASSETS |
|
|
|
|
|
|
|
|
|
Cash and due from
banks |
$ |
468,455 |
|
|
$ |
420,192 |
|
|
$ |
130,967 |
|
|
$ |
147,887 |
|
|
$ |
188,183 |
|
Interest-bearing
deposits in financial institutions |
5,071 |
|
|
5,335 |
|
|
5,581 |
|
|
6,891 |
|
|
33,777 |
|
Federal funds sold |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
14 |
|
Total Cash and Cash Equivalents |
473,526 |
|
|
425,527 |
|
|
136,548 |
|
|
154,778 |
|
|
221,974 |
|
Securities available
for sale, at fair value |
700,354 |
|
|
720,667 |
|
|
812,974 |
|
|
704,418 |
|
|
812,375 |
|
Securities held to
maturity, at amortized cost |
63,937 |
|
|
65,117 |
|
|
66,490 |
|
|
70,304 |
|
|
65,728 |
|
Federal Home Loan Bank
stock, at amortized cost |
29,586 |
|
|
36,402 |
|
|
35,937 |
|
|
24,888 |
|
|
28,008 |
|
Total Securities |
793,877 |
|
|
822,186 |
|
|
915,401 |
|
|
799,610 |
|
|
906,111 |
|
Mortgage loans held for
sale |
388,523 |
|
|
214,047 |
|
|
314,046 |
|
|
439,451 |
|
|
473,147 |
|
Loans, net of unearned
income and deferred costs: |
5,949,061 |
|
|
5,913,080 |
|
|
5,807,221 |
|
|
5,651,642 |
|
|
5,559,949 |
|
Less: allowance for loan losses |
(44,131 |
) |
|
(43,195 |
) |
|
(42,001 |
) |
|
(40,655 |
) |
|
(39,618 |
) |
Net Loans |
5,904,930 |
|
|
5,869,885 |
|
|
5,765,220 |
|
|
5,610,987 |
|
|
5,520,331 |
|
Premises and equipment,
net |
199,926 |
|
|
198,664 |
|
|
198,568 |
|
|
202,955 |
|
|
202,333 |
|
Goodwill |
268,246 |
|
|
264,910 |
|
|
264,910 |
|
|
264,578 |
|
|
257,485 |
|
Other intangible
assets, net |
40,066 |
|
|
37,052 |
|
|
37,856 |
|
|
39,747 |
|
|
41,515 |
|
Bank-owned life
insurance policies |
192,339 |
|
|
190,917 |
|
|
189,499 |
|
|
163,385 |
|
|
164,933 |
|
Other assets |
165,609 |
|
|
151,598 |
|
|
151,867 |
|
|
154,651 |
|
|
152,912 |
|
TOTAL
ASSETS |
$ |
8,427,042 |
|
|
$ |
8,174,786 |
|
|
$ |
7,973,915 |
|
|
$ |
7,830,142 |
|
|
$ |
7,940,741 |
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
Noninterest-bearing demand |
$ |
2,219,406 |
|
|
$ |
2,052,598 |
|
|
$ |
1,947,312 |
|
|
$ |
1,974,395 |
|
|
$ |
1,950,816 |
|
Interest-bearing: |
|
|
|
|
|
|
|
|
|
Demand
and money market accounts |
2,292,978 |
|
|
2,270,025 |
|
|
2,263,894 |
|
|
2,207,962 |
|
|
2,174,154 |
|
Savings |
318,714 |
|
|
320,104 |
|
|
319,611 |
|
|
315,477 |
|
|
317,071 |
|
Certificates of deposit |
1,764,671 |
|
|
1,548,045 |
|
|
1,504,380 |
|
|
1,649,113 |
|
|
1,744,238 |
|
Total Deposits |
6,595,769 |
|
|
6,190,772 |
|
|
6,035,197 |
|
|
6,146,947 |
|
|
6,186,279 |
|
Advances from the
Federal Home Loan Bank |
527,219 |
|
|
687,366 |
|
|
687,511 |
|
|
427,655 |
|
|
500,798 |
|
Repurchase agreements
and other borrowings |
28,571 |
|
|
35,318 |
|
|
32,540 |
|
|
31,927 |
|
|
44,008 |
|
Total Borrowings |
555,790 |
|
|
722,684 |
|
|
720,051 |
|
|
459,582 |
|
|
544,806 |
|
Other liabilities |
152,485 |
|
|
160,085 |
|
|
132,109 |
|
|
144,735 |
|
|
148,108 |
|
TOTAL
LIABILITIES |
7,304,044 |
|
|
7,073,541 |
|
|
6,887,357 |
|
|
6,751,264 |
|
|
6,879,193 |
|
Preferred stock |
|
|
|
|
|
|
|
|
|
Authorized shares - 2,000,000 |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
Common stock, $1.667
par value |
104,386 |
|
|
104,307 |
|
|
104,174 |
|
|
104,000 |
|
|
103,963 |
|
Capital surplus |
747,867 |
|
|
746,289 |
|
|
745,411 |
|
|
743,223 |
|
|
742,228 |
|
Retained earnings |
260,783 |
|
|
243,337 |
|
|
229,503 |
|
|
218,631 |
|
|
202,565 |
|
Common stock issued to
deferred compensation trust, at cost |
(11,492 |
) |
|
(11,294 |
) |
|
(11,168 |
) |
|
(10,969 |
) |
|
(10,785 |
) |
Deferred compensation
trust |
11,492 |
|
|
11,294 |
|
|
11,168 |
|
|
10,969 |
|
|
10,785 |
|
Accumulated other
comprehensive income (loss) |
(2,355 |
) |
|
(4,173 |
) |
|
(3,986 |
) |
|
1,339 |
|
|
1,604 |
|
TOTAL
SHAREHOLDERS’ EQUITY |
1,110,681 |
|
|
1,089,760 |
|
|
1,075,102 |
|
|
1,067,193 |
|
|
1,050,360 |
|
Noncontrolling
interest |
12,317 |
|
|
11,485 |
|
|
11,456 |
|
|
11,685 |
|
|
11,188 |
|
TOTAL
EQUITY |
1,122,998 |
|
|
1,101,245 |
|
|
1,086,558 |
|
|
1,078,878 |
|
|
1,061,548 |
|
TOTAL
LIABILITIES AND EQUITY |
$ |
8,427,042 |
|
|
$ |
8,174,786 |
|
|
$ |
7,973,915 |
|
|
$ |
7,830,142 |
|
|
$ |
7,940,741 |
|
TOWNEBANK |
Consolidated Statements of Income - Five
Quarter Trend (unaudited) |
(dollars in thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
2017 |
|
2017 |
|
2016 |
|
2016 |
|
2016 |
INTEREST
INCOME: |
|
|
|
|
|
|
|
|
|
Loans,
including fees |
$ |
71,443 |
|
|
$ |
64,255 |
|
|
$ |
65,151 |
|
|
$ |
64,623 |
|
|
$ |
51,444 |
|
Investment securities |
3,171 |
|
|
3,218 |
|
|
3,152 |
|
|
3,099 |
|
|
3,139 |
|
Interest-bearing deposits in financial institutions andfederal
funds sold |
1,188 |
|
|
887 |
|
|
487 |
|
|
(36 |
) |
|
364 |
|
Mortgage
loans held for sale |
2,879 |
|
|
1,727 |
|
|
3,028 |
|
|
4,137 |
|
|
1,294 |
|
Total Interest Income |
78,681 |
|
|
70,087 |
|
|
71,818 |
|
|
71,823 |
|
|
56,241 |
|
INTEREST
EXPENSE: |
|
|
|
|
|
|
|
|
|
Deposits |
6,877 |
|
|
6,003 |
|
|
5,928 |
|
|
5,909 |
|
|
5,267 |
|
Advances
from the Federal Home Loan Bank |
2,521 |
|
|
3,772 |
|
|
3,546 |
|
|
3,276 |
|
|
3,158 |
|
Repurchase agreements and other borrowings |
30 |
|
|
31 |
|
|
193 |
|
|
33 |
|
|
32 |
|
Total Interest Expense |
9,428 |
|
|
9,806 |
|
|
9,667 |
|
|
9,218 |
|
|
8,457 |
|
Net Interest
Income |
69,253 |
|
|
60,281 |
|
|
62,151 |
|
|
62,605 |
|
|
47,784 |
|
|
|
|
|
|
|
|
|
|
|
PROVISION FOR
LOAN LOSSES |
1,320 |
|
|
2,541 |
|
|
1,831 |
|
|
1,686 |
|
|
2,099 |
|
Net Interest Income after Provision for Loan
Losses |
67,933 |
|
|
57,740 |
|
|
60,320 |
|
|
60,919 |
|
|
45,685 |
|
NONINTEREST
INCOME: |
|
|
|
|
|
|
|
|
|
Residential mortgage banking income, net |
21,594 |
|
|
17,632 |
|
|
18,096 |
|
|
21,430 |
|
|
12,148 |
|
Insurance
commissions and other title fees and income, net |
12,902 |
|
|
14,800 |
|
|
9,823 |
|
|
11,258 |
|
|
11,627 |
|
Real
estate brokerage and property management income, net |
7,629 |
|
|
4,993 |
|
|
2,925 |
|
|
6,647 |
|
|
6,116 |
|
Service
charges on deposit accounts |
2,644 |
|
|
2,472 |
|
|
2,535 |
|
|
2,552 |
|
|
2,284 |
|
Credit
card merchant fees, net |
1,298 |
|
|
1,118 |
|
|
1,135 |
|
|
1,365 |
|
|
1,113 |
|
Bank
owned life insurance |
1,421 |
|
|
1,474 |
|
|
2,377 |
|
|
1,264 |
|
|
1,181 |
|
Other
income |
2,856 |
|
|
2,397 |
|
|
2,621 |
|
|
2,305 |
|
|
1,999 |
|
Net gain
(loss) on investment securities |
(1 |
) |
|
— |
|
|
6 |
|
|
— |
|
|
— |
|
Total Noninterest Income |
50,343 |
|
|
44,886 |
|
|
39,518 |
|
|
46,821 |
|
|
36,468 |
|
NONINTEREST
EXPENSE: |
|
|
|
|
|
|
|
|
|
Salaries
and employee benefits |
44,834 |
|
|
40,208 |
|
|
43,071 |
|
|
40,497 |
|
|
30,093 |
|
Occupancy
expense |
6,658 |
|
|
6,684 |
|
|
6,885 |
|
|
6,656 |
|
|
5,157 |
|
Furniture
and equipment |
3,563 |
|
|
3,343 |
|
|
3,378 |
|
|
3,199 |
|
|
2,381 |
|
Other
expenses |
23,064 |
|
|
20,013 |
|
|
19,500 |
|
|
20,581 |
|
|
34,268 |
|
Total Noninterest Expense |
78,119 |
|
|
70,248 |
|
|
72,834 |
|
|
70,933 |
|
|
71,899 |
|
Income before
income tax expense and noncontrolling interest |
40,157 |
|
|
32,378 |
|
|
27,004 |
|
|
36,807 |
|
|
10,254 |
|
Provision for
income tax expense |
12,240 |
|
|
9,386 |
|
|
7,160 |
|
|
10,974 |
|
|
2,375 |
|
Net
income |
27,917 |
|
|
22,992 |
|
|
19,844 |
|
|
25,833 |
|
|
7,879 |
|
Net income
attributable to noncontrolling interest |
(1,704 |
) |
|
(1,024 |
) |
|
(848 |
) |
|
(1,657 |
) |
|
(1,620 |
) |
Net income
attributable to TowneBank |
$ |
26,213 |
|
|
$ |
21,968 |
|
|
$ |
18,996 |
|
|
$ |
24,176 |
|
|
$ |
6,259 |
|
Net income
available to common shareholders |
$ |
26,213 |
|
|
$ |
21,968 |
|
|
$ |
18,996 |
|
|
$ |
24,176 |
|
|
$ |
6,259 |
|
Per common
share information |
|
|
|
|
|
|
|
|
|
Basic
earnings |
$ |
0.42 |
|
|
$ |
0.35 |
|
|
$ |
0.31 |
|
|
$ |
0.39 |
|
|
$ |
0.12 |
|
Diluted
earnings |
$ |
0.42 |
|
|
$ |
0.35 |
|
|
$ |
0.31 |
|
|
$ |
0.39 |
|
|
$ |
0.12 |
|
Basic
weighted average shares outstanding |
62,145,045 |
|
|
62,075,983 |
|
|
61,963,948 |
|
|
61,908,316 |
|
|
51,994,473 |
|
Diluted
weighted average shares outstanding |
62,364,260 |
|
|
62,262,789 |
|
|
62,175,705 |
|
|
62,067,832 |
|
|
52,116,772 |
|
Cash
dividends declared |
$ |
0.14 |
|
|
$ |
0.13 |
|
|
$ |
0.13 |
|
|
$ |
0.13 |
|
|
$ |
0.13 |
|
TOWNEBANK |
Banking Segment Financial
Information |
(dollars in thousands) |
|
|
|
|
|
|
|
|
Increase/(Decrease) |
|
Three Months Ended |
|
June 30, 2017 |
|
June 30, 2017 |
|
June 30, |
|
March 31, 2017 |
|
June 30, 2016 |
|
March 31, 2017 |
|
2017 |
|
2016 |
|
|
Amount |
|
Percent |
|
Amount |
|
Percent |
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income |
$ |
66,434 |
|
|
$ |
46,888 |
|
|
$ |
58,444 |
|
|
$ |
19,546 |
|
|
41.69 |
% |
|
$ |
7,990 |
|
|
13.67 |
% |
Service
charges on deposit accounts |
2,644 |
|
|
2,284 |
|
|
2,472 |
|
|
360 |
|
|
15.76 |
% |
|
172 |
|
|
6.96 |
% |
Credit
card merchant fees |
1,297 |
|
|
1,113 |
|
|
1,118 |
|
|
184 |
|
|
16.53 |
% |
|
179 |
|
|
16.01 |
% |
Other
income |
3,362 |
|
|
2,148 |
|
|
3,106 |
|
|
1,214 |
|
|
56.52 |
% |
|
256 |
|
|
8.24 |
% |
Total
noninterest income |
7,303 |
|
|
5,545 |
|
|
6,696 |
|
|
1,758 |
|
|
31.70 |
% |
|
607 |
|
|
9.07 |
% |
Total revenue |
73,737 |
|
|
52,433 |
|
|
65,140 |
|
|
21,304 |
|
|
40.63 |
% |
|
8,597 |
|
|
13.20 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for loan
losses |
1,320 |
|
|
2,099 |
|
|
2,541 |
|
|
(779 |
) |
|
(37.11 |
)% |
|
(1,221 |
) |
|
(48.05 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits |
23,519 |
|
|
17,119 |
|
|
20,341 |
|
|
6,400 |
|
|
37.39 |
% |
|
3,178 |
|
|
15.62 |
% |
Occupancy expense |
3,828 |
|
|
3,588 |
|
|
4,128 |
|
|
240 |
|
|
6.69 |
% |
|
(300 |
) |
|
(7.27 |
)% |
Furniture and
equipment |
2,372 |
|
|
1,847 |
|
|
2,274 |
|
|
525 |
|
|
28.42 |
% |
|
98 |
|
|
4.31 |
% |
Advertising and
marketing |
1,207 |
|
|
933 |
|
|
1,041 |
|
|
274 |
|
|
29.37 |
% |
|
166 |
|
|
15.95 |
% |
Charitable
contributions |
1,647 |
|
|
1,295 |
|
|
1,313 |
|
|
352 |
|
|
27.18 |
% |
|
334 |
|
|
25.44 |
% |
Outside processing |
1,112 |
|
|
842 |
|
|
1,154 |
|
|
270 |
|
|
32.07 |
% |
|
(42 |
) |
|
(3.64 |
)% |
Foreclosed property
expenses |
135 |
|
|
454 |
|
|
130 |
|
|
(319 |
) |
|
(70.26 |
)% |
|
5 |
|
|
3.85 |
% |
FDIC and other
insurance |
1,131 |
|
|
1,122 |
|
|
987 |
|
|
9 |
|
|
0.80 |
% |
|
144 |
|
|
14.59 |
% |
Professional fees |
748 |
|
|
885 |
|
|
1,280 |
|
|
(137 |
) |
|
(15.48 |
)% |
|
(532 |
) |
|
(41.56 |
)% |
Telephone and
postage |
963 |
|
|
715 |
|
|
904 |
|
|
248 |
|
|
34.69 |
% |
|
59 |
|
|
6.53 |
% |
Other expenses |
5,311 |
|
|
21,177 |
|
|
4,797 |
|
|
(15,866 |
) |
|
(74.92 |
)% |
|
514 |
|
|
10.72 |
% |
Total expenses |
41,973 |
|
|
49,977 |
|
|
38,349 |
|
|
(8,004 |
) |
|
(16.02 |
)% |
|
3,624 |
|
|
9.45 |
% |
Income before income
tax, corporate allocation and noncontrolling interest |
30,444 |
|
|
357 |
|
|
24,250 |
|
|
30,087 |
|
|
8,427.73 |
% |
|
6,194 |
|
|
25.54 |
% |
Corporate
allocation |
410 |
|
|
255 |
|
|
484 |
|
|
155 |
|
|
60.78 |
% |
|
(74 |
) |
|
(15.29 |
)% |
Income before income
tax provision and noncontrolling interest |
30,854 |
|
|
612 |
|
|
24,734 |
|
|
30,242 |
|
|
4,941.50 |
% |
|
6,120 |
|
|
24.74 |
% |
Provision for income
tax expense |
9,307 |
|
|
(678 |
) |
|
6,765 |
|
|
9,985 |
|
|
(1,472.71 |
)% |
|
2,542 |
|
|
37.58 |
% |
Net income |
21,547 |
|
|
1,290 |
|
|
17,969 |
|
|
20,257 |
|
|
1,570.31 |
% |
|
3,578 |
|
|
19.91 |
% |
Noncontrolling
interest |
(1 |
) |
|
— |
|
|
(2 |
) |
|
(1 |
) |
|
N/M |
|
|
1 |
|
|
(50.00 |
)% |
Net income attributable
to TowneBank |
$ |
21,546 |
|
|
$ |
1,290 |
|
|
$ |
17,967 |
|
|
$ |
20,256 |
|
|
1,570.23 |
% |
|
$ |
3,579 |
|
|
19.92 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio |
56.92 |
% |
|
95.32 |
% |
|
58.87 |
% |
|
(38.40 |
)% |
|
(40.29 |
)% |
|
(1.95 |
)% |
|
(3.31 |
)% |
TOWNEBANK |
Banking Segment Financial
Information |
(dollars in thousands) |
|
|
|
|
|
|
Six Months Ended |
|
Increase/(Decrease) |
|
June 30, |
|
2017 over 2016 |
|
2017 |
|
2016 |
|
Amount |
|
Percent |
Net interest
income |
$ |
124,878 |
|
|
$ |
92,711 |
|
|
$ |
32,167 |
|
|
34.70 |
% |
Service charges
on deposit accounts |
5,115 |
|
|
4,460 |
|
|
655 |
|
|
14.69 |
% |
Credit card
merchant fees |
2,416 |
|
|
2,008 |
|
|
408 |
|
|
20.32 |
% |
Other
income |
6,468 |
|
|
4,676 |
|
|
1,792 |
|
|
38.32 |
% |
Total
noninterest income |
13,999 |
|
|
11,144 |
|
|
|
2,855 |
|
|
25.62 |
% |
Total
revenue |
138,877 |
|
|
103,855 |
|
|
|
35,022 |
|
|
33.72 |
% |
|
|
|
|
|
|
|
|
Provision for
loan losses |
3,861 |
|
|
1,840 |
|
|
2,021 |
|
|
109.84 |
% |
|
|
|
|
|
|
|
|
Salaries and employee
benefits |
43,860 |
|
|
34,631 |
|
|
9,229 |
|
|
26.65 |
% |
Occupancy expense |
7,955 |
|
|
7,063 |
|
|
892 |
|
|
12.63 |
% |
Furniture and
equipment |
4,646 |
|
|
3,712 |
|
|
934 |
|
|
25.16 |
% |
Advertising and
marketing |
2,249 |
|
|
1,807 |
|
|
442 |
|
|
24.46 |
% |
Charitable
contributions |
2,960 |
|
|
2,262 |
|
|
698 |
|
|
30.86 |
% |
Outside processing |
2,266 |
|
|
1,772 |
|
|
494 |
|
|
27.88 |
% |
Foreclosed property
expenses |
253 |
|
|
566 |
|
|
(313 |
) |
|
(55.30 |
)% |
FDIC and other
insurance |
2,118 |
|
|
2,172 |
|
|
(54 |
) |
|
(2.49 |
)% |
Professional fees |
2,028 |
|
|
1,934 |
|
|
94 |
|
|
4.86 |
% |
Telephone and
postage |
1,868 |
|
|
1,460 |
|
|
408 |
|
|
27.95 |
% |
Other expenses |
10,120 |
|
|
24,778 |
|
|
(14,658 |
) |
|
(59.16 |
)% |
Total
expenses |
80,323 |
|
|
82,157 |
|
|
(1,834 |
) |
|
(2.23 |
)% |
Income before income
tax and corporate allocation |
54,693 |
|
|
19,858 |
|
|
34,835 |
|
|
175.42 |
% |
Corporate
allocation |
895 |
|
|
614 |
|
|
281 |
|
|
45.77 |
% |
Income before income
tax provision |
55,588 |
|
|
20,472 |
|
|
35,116 |
|
|
171.53 |
% |
Provision for income
tax expense |
16,072 |
|
|
5,051 |
|
|
11,021 |
|
|
218.19 |
% |
Net income |
$ |
39,516 |
|
|
$ |
15,421 |
|
|
24,095 |
|
|
156.25 |
% |
Noncontrolling
interest |
$ |
(3 |
) |
|
$ |
— |
|
|
(3 |
) |
|
N/M |
|
Net income attributable
to TowneBank |
$ |
39,513 |
|
|
$ |
15,421 |
|
|
24,092 |
|
|
156.23 |
% |
|
|
|
|
|
|
|
|
Efficiency ratio |
57.84 |
% |
|
79.11 |
% |
|
(21.27 |
)% |
|
(26.89 |
)% |
TOWNEBANK |
Realty Segment Financial
Information |
(dollars in thousands) |
|
|
|
|
|
|
|
|
Increase/(Decrease) |
|
Three Months Ended |
|
June 30, 2017 |
|
June 30, 2017 |
|
June 30, |
|
March 31, |
|
June 30, 2016 |
|
March 31, 2017 |
|
2017 |
|
2016 |
|
2017 |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage
brokerageincome, net |
$ |
21,730 |
|
|
$ |
12,490 |
|
|
$ |
17,775 |
|
|
$ |
9,240 |
|
|
73.98 |
% |
|
$ |
3,955 |
|
|
22.25 |
% |
Real estate brokerage
income, net |
2,337 |
|
|
2,393 |
|
|
1,460 |
|
|
(56 |
) |
|
(2.34 |
)% |
|
877 |
|
|
60.07 |
% |
Title insurance and
settlement fees |
582 |
|
|
550 |
|
|
355 |
|
|
32 |
|
|
5.82 |
% |
|
227 |
|
|
63.94 |
% |
Property management
fees, net |
5,293 |
|
|
3,723 |
|
|
3,533 |
|
|
1,570 |
|
|
42.17 |
% |
|
1,760 |
|
|
49.82 |
% |
Income from
unconsolidatedsubsidiary |
250 |
|
|
216 |
|
|
124 |
|
|
34 |
|
|
15.74 |
% |
|
126 |
|
|
101.61 |
% |
Net interest and other
income |
3,229 |
|
|
1,167 |
|
|
2,203 |
|
|
2,062 |
|
|
176.69 |
% |
|
1,026 |
|
|
46.57 |
% |
Total revenue |
33,421 |
|
|
20,539 |
|
|
25,450 |
|
|
12,882 |
|
|
62.72 |
% |
|
7,971 |
|
|
31.32 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits |
15,220 |
|
|
7,250 |
|
|
13,708 |
|
|
7,970 |
|
|
109.93 |
% |
|
1,512 |
|
|
11.03 |
% |
Occupancy expense |
2,269 |
|
|
1,053 |
|
|
1,964 |
|
|
1,216 |
|
|
115.48 |
% |
|
305 |
|
|
15.53 |
% |
Furniture and
equipment |
999 |
|
|
275 |
|
|
869 |
|
|
724 |
|
|
263.27 |
% |
|
130 |
|
|
14.96 |
% |
Amortization of
intangible assets |
718 |
|
|
353 |
|
|
559 |
|
|
365 |
|
|
103.40 |
% |
|
159 |
|
|
28.44 |
% |
Other expenses |
7,495 |
|
|
4,214 |
|
|
5,978 |
|
|
3,281 |
|
|
77.86 |
% |
|
1,517 |
|
|
25.38 |
% |
Total expenses |
26,701 |
|
|
13,145 |
|
|
23,078 |
|
|
13,556 |
|
|
103.13 |
% |
|
3,623 |
|
|
15.70 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
tax, corporate allocation and noncontrolling interest |
6,720 |
|
|
7,394 |
|
|
2,372 |
|
|
(674 |
) |
|
(9.12 |
)% |
|
4,348 |
|
|
183.31 |
% |
Corporate
allocation |
(266 |
) |
|
(123 |
) |
|
(307 |
) |
|
(143 |
) |
|
116.26 |
% |
|
41 |
|
|
(13.36 |
)% |
Income before income
tax provision and noncontrolling interest |
6,454 |
|
|
7,271 |
|
|
2,065 |
|
|
(817 |
) |
|
(11.24 |
)% |
|
4,389 |
|
|
212.54 |
% |
Provision for income
tax expense |
1,889 |
|
|
2,249 |
|
|
627 |
|
|
(360 |
) |
|
(16.01 |
)% |
|
1,262 |
|
|
201.28 |
% |
Net income |
4,565 |
|
|
5,022 |
|
|
1,438 |
|
|
(457 |
) |
|
(9.10 |
)% |
|
3,127 |
|
|
217.45 |
% |
Noncontrolling
interest |
(1,361 |
) |
|
(1,257 |
) |
|
(512 |
) |
|
(104 |
) |
|
8.27 |
% |
|
(849 |
) |
|
165.82 |
% |
Net income attributable
to TowneBank |
$ |
3,204 |
|
|
$ |
3,765 |
|
|
$ |
926 |
|
|
$ |
(561 |
) |
|
(14.90 |
)% |
|
$ |
2,278 |
|
|
246.00 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio |
79.89 |
% |
|
64.00 |
% |
|
90.68 |
% |
|
15.89 |
% |
|
24.83 |
% |
|
(10.79 |
)% |
|
(11.90 |
)% |
TOWNEBANK |
Realty Segment Financial
Information |
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
Increase/(Decrease) |
|
June 30, |
|
2017 over 2016 |
|
2017 |
|
2016 |
|
Amount |
|
Percent |
Residential mortgage
banking income, net |
$ |
39,505 |
|
|
$ |
19,800 |
|
|
$ |
19,705 |
|
|
99.52 |
% |
Real estate brokerage
income, net |
3,797 |
|
|
3,805 |
|
|
(8 |
) |
|
(0.21 |
)% |
Title insurance and
settlement fees |
936 |
|
|
899 |
|
|
37 |
|
|
4.12 |
% |
Property management
fees, net |
8,826 |
|
|
7,138 |
|
|
1,688 |
|
|
23.65 |
% |
Income from
unconsolidated subsidiary |
374 |
|
|
380 |
|
|
(6 |
) |
|
(1.58 |
)% |
Net interest and other
income |
5,431 |
|
|
1,930 |
|
|
3,501 |
|
|
181.40 |
% |
Total
revenue |
58,869 |
|
|
33,952 |
|
|
24,917 |
|
|
73.39 |
% |
|
|
|
|
|
|
|
|
Salaries and employee
benefits |
28,928 |
|
|
13,957 |
|
|
14,971 |
|
|
107.27 |
% |
Occupancy expense |
4,233 |
|
|
2,066 |
|
|
2,167 |
|
|
104.89 |
% |
Furniture and
equipment |
1,868 |
|
|
544 |
|
|
1,324 |
|
|
243.38 |
% |
Amortization of
intangible assets |
1,277 |
|
|
705 |
|
|
572 |
|
|
81.13 |
% |
Other expenses |
13,472 |
|
|
7,058 |
|
|
6,414 |
|
|
90.88 |
% |
Total
expenses |
49,778 |
|
|
24,330 |
|
|
25,448 |
|
|
104.60 |
% |
Income before income
tax, corporate allocation and noncontrolling interest |
9,091 |
|
|
9,622 |
|
|
(531 |
) |
|
(5.52 |
)% |
Corporate
allocation |
(574 |
) |
|
(292 |
) |
|
(282 |
) |
|
96.58 |
% |
Income before income
tax provision and noncontrolling interest |
8,517 |
|
|
9,330 |
|
|
(813 |
) |
|
(8.71 |
)% |
Provision for income
tax |
2,516 |
|
|
2,908 |
|
|
(392 |
) |
|
(13.48 |
)% |
Net income |
6,001 |
|
|
6,422 |
|
|
(421 |
) |
|
(6.56 |
)% |
Noncontrolling
interest |
(1,872 |
) |
|
(1,625 |
) |
|
(247 |
) |
|
15.20 |
% |
Net income attributable
to TowneBank |
$ |
4,129 |
|
|
$ |
4,797 |
|
|
$ |
(668 |
) |
|
(13.93 |
)% |
|
|
|
|
|
|
|
|
Efficiency ratio |
84.56 |
% |
|
71.66 |
% |
|
12.90 |
% |
|
18.00 |
% |
TOWNEBANK |
Insurance Segment Financial
Information |
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/(Decrease) |
|
Three Months Ended |
|
June 30, 2017 |
|
June 30, 2017 |
|
June 30, |
|
March 31, |
|
June 30, 2016 |
|
March 31, 2017 |
|
2017 |
|
2016 |
|
2017 |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
Commission and fee
income |
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
and casualty |
$ |
9,271 |
|
|
$ |
8,793 |
|
|
$ |
8,457 |
|
|
$ |
478 |
|
|
5.44 |
% |
|
$ |
814 |
|
|
9.63 |
% |
Employee
benefits |
3,280 |
|
|
2,907 |
|
|
2,974 |
|
|
373 |
|
|
12.83 |
% |
|
306 |
|
|
10.29 |
% |
Travel
insurance |
1,159 |
|
|
1,163 |
|
|
1,627 |
|
|
(4 |
) |
|
(0.34 |
)% |
|
(468 |
) |
|
(28.76 |
)% |
Specialized benefit services |
158 |
|
|
152 |
|
|
165 |
|
|
6 |
|
|
3.95 |
% |
|
(7 |
) |
|
(4.24 |
)% |
Total commissions and
fees |
13,868 |
|
|
13,015 |
|
|
13,223 |
|
|
853 |
|
|
6.55 |
% |
|
645 |
|
|
4.88 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingency and bonus
revenue |
948 |
|
|
467 |
|
|
3,539 |
|
|
481 |
|
|
103.00 |
% |
|
(2,591 |
) |
|
(73.21 |
)% |
Other income |
76 |
|
|
52 |
|
|
88 |
|
|
24 |
|
|
46.15 |
% |
|
(12 |
) |
|
(13.64 |
)% |
Total revenue |
14,892 |
|
|
13,534 |
|
|
16,850 |
|
|
1,358 |
|
|
10.03 |
% |
|
(1,958 |
) |
|
(11.62 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee commission
expense |
2,454 |
|
|
2,254 |
|
|
2,273 |
|
|
200 |
|
|
8.87 |
% |
|
181 |
|
|
7.96 |
% |
Revenue, net of
commission expense |
12,438 |
|
|
11,280 |
|
|
14,577 |
|
|
1,158 |
|
|
10.27 |
% |
|
(2,139 |
) |
|
(14.67 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits |
6,095 |
|
|
5,723 |
|
|
6,159 |
|
|
372 |
|
|
6.50 |
% |
|
(64 |
) |
|
(1.04 |
)% |
Occupancy expense |
562 |
|
|
517 |
|
|
592 |
|
|
45 |
|
|
8.70 |
% |
|
(30 |
) |
|
(5.07 |
)% |
Furniture and
equipment |
192 |
|
|
259 |
|
|
200 |
|
|
(67 |
) |
|
(25.87 |
)% |
|
(8 |
) |
|
(4.00 |
)% |
Amortization of
intangible assets |
704 |
|
|
692 |
|
|
697 |
|
|
12 |
|
|
1.73 |
% |
|
7 |
|
|
1.00 |
% |
Other expenses |
1,892 |
|
|
1,586 |
|
|
1,173 |
|
|
306 |
|
|
19.29 |
% |
|
719 |
|
|
61.30 |
% |
Total operating
expenses |
9,445 |
|
|
8,777 |
|
|
8,821 |
|
|
668 |
|
|
7.61 |
% |
|
624 |
|
|
7.07 |
% |
Income before income
tax, corporate allocation and noncontrolling interest |
2,993 |
|
|
2,503 |
|
|
5,756 |
|
|
490 |
|
|
19.58 |
% |
|
(2,763 |
) |
|
(48.00 |
)% |
Corporate
allocation |
(144 |
) |
|
(132 |
) |
|
(177 |
) |
|
(12 |
) |
|
9.09 |
% |
|
33 |
|
|
(18.64 |
)% |
Income before income
tax provision and noncontrolling interest |
2,849 |
|
|
2,371 |
|
|
5,579 |
|
|
478 |
|
|
20.16 |
% |
|
(2,730 |
) |
|
(48.93 |
)% |
Provision for income
tax expense |
1,044 |
|
|
804 |
|
|
1,994 |
|
|
240 |
|
|
29.85 |
% |
|
(950 |
) |
|
(47.64 |
)% |
Net income |
1,805 |
|
|
1,567 |
|
|
3,585 |
|
|
238 |
|
|
15.19 |
% |
|
(1,780 |
) |
|
(49.65 |
)% |
Noncontrolling
interest |
(342 |
) |
|
(363 |
) |
|
(510 |
) |
|
21 |
|
|
(5.79 |
)% |
|
168 |
|
|
(32.94 |
)% |
Net income attributable
to TowneBank |
$ |
1,463 |
|
|
$ |
1,204 |
|
|
$ |
3,075 |
|
|
$ |
259 |
|
|
21.51 |
% |
|
$ |
(1,612 |
) |
|
(52.42 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio |
75.94 |
% |
|
77.81 |
% |
|
60.51 |
% |
|
(1.87 |
)% |
|
(2.40 |
)% |
|
15.43 |
% |
|
25.50 |
% |
TOWNEBANK |
Insurance Segment Financial
Information |
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
Increase/(Decrease) |
|
June 30, |
|
2017 over 2016 |
|
2017 |
|
2016 |
|
Amount |
|
Percent |
Net commission and fee
income |
|
|
|
|
|
|
|
Property and
casualty |
$ |
17,728 |
|
|
$ |
16,878 |
|
|
$ |
850 |
|
|
5.04 |
% |
Employee benefits |
6,254 |
|
|
5,806 |
|
|
448 |
|
|
7.72 |
% |
Travel insurance |
2,786 |
|
|
2,619 |
|
|
167 |
|
|
6.38 |
% |
Specialized benefit
services |
323 |
|
|
305 |
|
|
18 |
|
|
5.90 |
% |
Total net commissions
and fees |
27,091 |
|
|
25,608 |
|
|
1,483 |
|
|
5.79 |
% |
|
|
|
|
|
|
|
|
Contingency and bonus
revenue |
4,488 |
|
|
3,879 |
|
|
609 |
|
|
15.70 |
% |
Other income |
162 |
|
|
129 |
|
|
33 |
|
|
25.58 |
% |
Total revenues |
31,741 |
|
|
29,616 |
|
|
2,125 |
|
|
7.18 |
% |
|
|
|
|
|
|
|
|
Employee commission
expense |
4,726 |
|
|
4,421 |
|
|
305 |
|
|
6.90 |
% |
Revenue, net of
commission expense |
27,015 |
|
|
25,195 |
|
|
1,820 |
|
|
7.22 |
% |
|
|
|
|
|
|
|
|
Salaries and employee
benefits |
12,255 |
|
|
11,692 |
|
|
563 |
|
|
4.82 |
% |
Occupancy expense |
1,154 |
|
|
1,045 |
|
|
109 |
|
|
10.43 |
% |
Furniture and
equipment |
392 |
|
|
483 |
|
|
(91 |
) |
|
(18.84 |
)% |
Amortization of
intangible assets |
1,401 |
|
|
1,377 |
|
|
24 |
|
|
1.74 |
% |
Other expenses |
3,064 |
|
|
2,976 |
|
|
88 |
|
|
2.96 |
% |
Total operating
expenses |
18,266 |
|
|
17,573 |
|
|
693 |
|
|
3.94 |
% |
Income before income
tax, corporate allocation and noncontrolling interest |
8,749 |
|
|
7,622 |
|
|
1,127 |
|
|
14.79 |
% |
Corporate
allocation |
(321 |
) |
|
(322 |
) |
|
1 |
|
|
(0.31 |
)% |
Income before income
tax provision and noncontrolling interest |
8,428 |
|
|
7,300 |
|
|
1,128 |
|
|
15.45 |
% |
Provision for income
tax |
3,038 |
|
|
2,604 |
|
|
434 |
|
|
16.67 |
% |
Net income |
5,390 |
|
|
4,696 |
|
|
694 |
|
|
14.78 |
% |
Noncontrolling
interest |
(852 |
) |
|
(836 |
) |
|
(16 |
) |
|
1.91 |
% |
Net income attributable
to TowneBank |
$ |
4,538 |
|
|
$ |
3,860 |
|
|
$ |
678 |
|
|
17.56 |
% |
|
|
|
|
|
|
|
|
Efficiency ratio |
67.61 |
% |
|
69.75 |
% |
|
(2.14 |
)% |
|
(3.07 |
)% |
TOWNEBANK |
Reconcilement of Non-GAAP Financial
Measures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
2017 |
|
2016 |
|
2017 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
Return on average
assets (GAAP) |
1.29 |
% |
|
0.39 |
% |
|
1.11 |
% |
|
1.20 |
% |
|
0.75 |
% |
Impact of excluding
average goodwill and otherintangibles and amortization |
0.11 |
% |
|
0.05 |
% |
|
0.11 |
% |
|
0.11 |
% |
|
0.07 |
% |
Return on average
tangible assets (non-GAAP) |
1.40 |
% |
|
0.44 |
% |
|
1.22 |
% |
|
1.31 |
% |
|
0.82 |
% |
|
|
|
|
|
|
|
|
|
|
Return on average
equity (GAAP) |
9.43 |
% |
|
2.93 |
% |
|
8.15 |
% |
|
8.80 |
% |
|
5.73 |
% |
Impact of excluding
average goodwill and otherintangibles and amortization |
4.24 |
% |
|
1.28 |
% |
|
3.73 |
% |
|
3.99 |
% |
|
2.11 |
% |
Return on average
tangible equity (non-GAAP) |
13.67 |
% |
|
4.21 |
% |
|
11.88 |
% |
|
12.79 |
% |
|
7.84 |
% |
|
|
|
|
|
|
|
|
|
|
Return on average
common equity (GAAP) |
9.53 |
% |
|
2.96 |
% |
|
8.23 |
% |
|
8.89 |
% |
|
5.79 |
% |
Impact of excluding
average goodwill and otherintangibles and amortization |
4.34 |
% |
|
1.32 |
% |
|
3.82 |
% |
|
4.08 |
% |
|
2.16 |
% |
Return on average
tangible common equity(non-GAAP) |
13.87 |
% |
|
4.28 |
% |
|
12.05 |
% |
|
12.97 |
% |
|
7.95 |
% |
|
|
|
|
|
|
|
|
|
|
Book value (GAAP) |
$ |
17.74 |
|
|
$ |
16.84 |
|
|
$ |
17.42 |
|
|
$ |
17.74 |
|
|
$ |
16.84 |
|
Impact of excluding
average goodwill and otherintangibles and amortization |
(4.93 |
) |
|
(4.79 |
) |
|
(4.83 |
) |
|
(4.93 |
) |
|
(4.79 |
) |
Tangible book value
(non-GAAP) |
$ |
12.81 |
|
|
$ |
12.05 |
|
|
$ |
12.59 |
|
|
$ |
12.81 |
|
|
$ |
12.05 |
|
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 |
|
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
|
2017 |
|
2017 |
|
2016 |
|
2016 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
Net income (GAAP) |
|
$ |
26,213 |
|
|
$ |
21,968 |
|
|
$ |
18,996 |
|
|
$ |
24,176 |
|
|
$ |
6,259 |
|
|
|
|
|
|
|
|
|
|
|
|
Purchase accounting
corrections |
|
(3,889 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
expenses |
|
1,281 |
|
|
(5 |
) |
|
(707 |
) |
|
969 |
|
|
18,435 |
|
|
|
|
|
|
|
|
|
|
|
|
Total charges |
|
(2,608 |
) |
|
(5 |
) |
|
(707 |
) |
|
969 |
|
|
18,435 |
|
Income tax expense
(benefit) |
|
1,167 |
|
|
75 |
|
|
264 |
|
|
(267 |
) |
|
(6,177 |
) |
Total charges, net of
taxes |
|
(1,441 |
) |
|
70 |
|
|
(443 |
) |
|
702 |
|
|
12,258 |
|
Operating earnings,
excluding certain items affectingcomparability (non-GAAP) |
|
$ |
24,772 |
|
|
$ |
22,038 |
|
|
$ |
18,553 |
|
|
$ |
24,878 |
|
|
$ |
18,517 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares |
|
62,364,260 |
|
|
62,262,789 |
|
|
62,175,705 |
|
|
62,067,832 |
|
|
52,116,772 |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS (GAAP) |
|
$ |
0.42 |
|
|
$ |
0.35 |
|
|
$ |
0.31 |
|
|
$ |
0.39 |
|
|
$ |
0.12 |
|
Diluted EPS, excluding
certain items affectingcomparability (non-GAAP) |
|
$ |
0.40 |
|
|
$ |
0.35 |
|
|
$ |
0.30 |
|
|
$ |
0.40 |
|
|
$ |
0.36 |
|
|
|
|
|
|
|
|
|
|
|
|
Average assets |
|
$ |
8,180,959 |
|
|
$ |
8,000,366 |
|
|
$ |
7,965,438 |
|
|
$ |
7,991,213 |
|
|
$ |
6,534,063 |
|
Average tangible
equity |
|
$ |
807,085 |
|
|
$ |
791,433 |
|
|
$ |
783,789 |
|
|
$ |
772,932 |
|
|
$ |
665,690 |
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets, excluding certain itemsaffecting comparability
(non-GAAP) |
|
1.21 |
% |
|
1.12 |
% |
|
0.93 |
% |
|
1.24 |
% |
|
1.14 |
% |
Return on average
tangible equity, excluding certain itemsaffecting comparability
(non-GAAP) |
|
12.96 |
% |
|
11.91 |
% |
|
10.04 |
% |
|
13.45 |
% |
|
11.62 |
% |
Efficiency ratio,
excluding certain items affectingcomparability (Non-GAAP) |
|
66.41 |
% |
|
66.80 |
% |
|
72.34 |
% |
|
63.94 |
% |
|
63.46 |
% |
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 |
|
Six Months Ended |
|
|
June 30, |
|
June 30, |
|
|
2017 |
|
2016 |
|
|
|
|
|
Net income (GAAP) |
|
$ |
48,180 |
|
|
$ |
24,078 |
|
|
|
|
|
|
Purchase accounting
adjustments |
|
(3,889 |
) |
|
— |
|
|
|
|
|
|
Acquisition-related
expenses |
|
1,276 |
|
|
18,849 |
|
|
|
|
|
|
Total charges |
|
(2,613 |
) |
|
18,849 |
|
Income tax expense
(benefit) |
|
1,242 |
|
|
(6,210 |
) |
Total charges, net of
taxes |
|
(1,371 |
) |
|
12,639 |
|
Operating earnings,
excluding certain items affecting comparability (non-GAAP) |
|
$ |
46,809 |
|
|
$ |
36,717 |
|
|
|
|
|
|
Weighted average
diluted shares |
|
62,351,215 |
|
|
51,711,472 |
|
|
|
|
|
|
Diluted EPS (GAAP) |
|
$ |
0.77 |
|
|
$ |
0.47 |
|
Diluted EPS, excluding
certain items affecting comparability (non-GAAP) |
|
$ |
0.75 |
|
|
$ |
0.71 |
|
|
|
|
|
|
Average assets |
|
$ |
8,091,161 |
|
|
$ |
6,423,650 |
|
Average tangible
equity |
|
$ |
799,303 |
|
|
$ |
654,577 |
|
|
|
|
|
|
Return on average
assets, excluding certain items affecting comparability
(non-GAAP) |
|
1.16 |
% |
|
1.15 |
% |
Return on average
tangible equity, excluding certain items affectingcomparability
(non-GAAP) |
|
12.44 |
% |
|
11.72 |
% |
Efficiency ratio,
excluding certain items affecting comparability (non-GAAP) |
|
66.60 |
% |
|
64.55 |
% |
For more information contact:
G. Robert Aston, Jr., Chairman and CEO, 757-638-6780
Clyde E. McFarland, Jr., Senior Executive Vice President and CFO, 757-638-6801
William B. Littreal, Chief Investor Relations Officer and CSO, 757-638-6813
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