TowneBank (the “Company”) (NASDAQ: TOWN) today reported earnings for the quarter ended March 31, 2021 of $69.0 million, or $0.95 per diluted share, compared to $26.38 million, or $0.36 per diluted share, for the quarter ended March 31, 2020.

“Towne continued the strong earnings momentum from the latter half of last year fueled by continued strength in our fee-based businesses and solid growth in deposits and loans. Our deposit balances climbed to new record levels and our teams continue to assist those companies and individuals most impacted by the pandemic by delivering $429 million in new Paycheck Protection Program funding during the first quarter. Overall, we are off to a great start to the year,” said G. Robert Aston, Jr., Executive Chairman.

Highlights for First Quarter 2021 Compared to First Quarter 2020:

  • Total revenues were $182.51 million, an increase of $44.81 million, or 32.54%.
  • Pre-provision, pre-tax, net revenues (non-GAAP) were $81.55 million, an increase of $41.96 million, or 105.99%.
  • Loans held for investment were $9.73 billion, an increase of $0.95 billion, or 10.82%, from March 31, 2020, and   $0.11 billion, or 1.10%, from December 31, 2020. In first quarter 2021, the Company originated approximately $429.41 million of loans in round two of the Small Business Administration's Paycheck Protection Program ("PPP"). The balance at March 31, 2021 and December 31, 2020 included $898.73 million and $855.89 million, respectively, of PPP loans.
  • Total deposits were $12.14 billion, an increase of $2.83 billion, or 30.42%, compared to prior year and $0.57 billion, or 4.89%, from December 31, 2020.
  • Noninterest bearing deposits increased by 58.17%, to $4.84 billion, representing 39.87% of total deposits. Compared to the linked quarter, noninterest bearing deposits increased 10.66%.
  • Annualized return on common shareholders' equity was 15.70% and annualized return on average tangible common shareholders' equity was 22.45% (non-GAAP).
  • Net interest margin for the quarter was 3.04% and taxable equivalent net interest margin (non-GAAP) was 3.06%.
  • Nonperforming assets were $17.27 million, or 0.11% of total assets, compared to $29.75 million, or 0.24%, at March 31, 2020.
  • Effective tax rate of 19.37% in the quarter compared to 19.00% in the first quarter of 2020.

“During the quarter we opened our newest banking office located in the Myers Park area of Charlotte, North Carolina, with a third Charlotte region banking office planned to open later this year. Looking ahead, we believe the investments in our newer markets will deliver significant growth opportunities as the economy improves,” stated J. Morgan Davis, President and Chief Executive Officer.

Quarterly Net Interest Income Compared to First Quarter 2020:

  • Net interest income was $99.99 million compared to $89.50 million at March 31, 2020.
  • Taxable equivalent net interest margin (non-GAAP) was 3.06%, including purchase accounting accretion of 5 basis points and PPP interest and fees of 12 basis points, compared to 3.37%, including purchase accounting accretion of 13 basis points and no PPP interest and fees, for first quarter 2020.
  • Average loans held for investment, with an average yield of 4.29%, represented 72.30% of average earning assets at March 31, 2021 compared to an average yield of 4.73% and 79.60% of average earning assets in the first quarter of 2020. Excluding PPP loans, loan yields were 4.18% in first quarter 2021.
  • Interest and fee income on PPP loans was $11.63 million in first quarter 2021, compared to $11.29 million in the linked quarter, and zero in first quarter 2020.
  • Total cost of deposits decreased to 0.30% from 0.83% at March 31, 2020.
  • Average interest-earning assets totaled $13.34 billion at March 31, 2021 compared to $10.74 billion at March 31, 2020, an increase of 24.21%.
  • Average interest-bearing liabilities totaled $8.01 billion, an increase of $0.85 billion from prior year.
  • Interest expense on the Federal Reserve Bank ("FRB") PPP lending facility was $0.16 million in first quarter, compared to $0.04 million in the linked quarter, and zero in first quarter 2020.

Quarterly Provision for Credit Losses:

  • The quarterly provision for credit losses for on-balance-sheet loans was a benefit of $3.41 million compared to a provision expense of $5.76 million one year ago and an expense of $1.21 million in the linked quarter. The first quarter 2021 included a release in the allowance for credit losses of $3.41 million driven by a combination of minimal net charge-offs, improvements in the economic forecast, offset by modest core loan growth.
  • Net loan charge-offs were $0.67 million compared to charge-offs of $0.56 million one year prior. The ratio of net loan charge-offs to average loans on an annualized basis was 0.03% in first quarter 2021 and 2020.
  • The provision for credit losses on off-balance-sheet commitments was a benefit of $0.48 million compared to a provision expense of $1.10 million in the first quarter of 2020, and $0.06 million in the linked quarter.
  • The allowance for credit losses on loans represented 1.19% of total loans compared to 1.25% at December 31, 2020 and 0.73% at March 31, 2020. Excluding PPP loans, which are fully government guaranteed, the allowance for credit losses (non-GAAP) was 1.31%, compared to 1.37% at December 31, 2020. The allowance for credit losses on loans was 9.09 times nonperforming loans compared to 10.74 times at December 31, 2020 and 3.85 times at March 31, 2020.

Quarterly Noninterest Income Compared to First Quarter 2020:

  • Total noninterest income was $82.52 million compared to $48.20 million in 2020, an increase of $34.32 million, or 71.20%. Residential mortgage banking income increased $30.0 million and real estate brokerage and property management income increased $11.0 million. Also included in noninterest income are net gains on investment securities of $1.0 million as compared to net gains of $5.0 million in the prior year.
  • Residential mortgage banking recorded income of $37.41 million compared to $7.42 million in first quarter 2020. Loan volume in the current quarter was $1.60 billion, with purchase activity comprising 53.45% of that volume. Loan volume in first quarter 2020 was $0.92 billion, with purchase activity comprising 61.31%. In addition to increased income resulting from the impact of higher loan volume and strong margins in the current quarter compared to prior year, the Company recorded a net gain on derivative instruments of $2.86 million compared to a loss on derivative instruments of $10.89 million in first quarter 2020.
  • Total Insurance segment revenue decreased $0.17 million, or 0.83% to $20.07 million in first quarter 2021 compared to 2020. The Company acquired a property and casualty insurance agency in December 2020, which brought in $0.61 million in additional revenue in first quarter 2021 and partially offset the impact of the reduction in revenues due to the sale of its travel insurance joint venture in third quarter 2020, which contributed revenue of $1.27 million in first quarter 2020.
  • Property management fee revenue increased 205.20%, or $10.41 million, to $15.48 million compared to first quarter 2020. The continuation of international travel restrictions related to COVID-19 coupled with many businesses and schools continuing to operate remotely has positively impacted the demand for domestic travel destinations. This high demand is in sharp contrast to the virtual shut-downs created by quarantines in first quarter 2020 that resulted in only limited reservation activities.

Quarterly Noninterest Expense Compared to First Quarter 2020:

  • Total noninterest expense was $97.33 million compared to $96.89 million in 2020, an increase of $0.44 million, or 0.45%. Increases in salary and benefits expense of $2.57 million, occupancy expense of $0.57 million, data processing expense of $0.45 million, and software expense of $0.70 million, were partially offset by a $2.27 million reduction in the estimated fourth quarter 2020 incentive accrual and $2.34 million in deferred loan costs related to the origination of PPP loans during first quarter 2021.
  • The quarterly increase in salaries and benefits was primarily driven by higher variable production related costs.   Strong first quarter mortgage production resulted in increased overtime and incentive expenses as well as related payroll taxes.
  • Increased mortgage volume and higher credit card fees on vacation property reservation activities drove the increase in data processing expense, while increased costs associated with our core banking platform resulted in higher software expenses.

Consolidated Balance Sheet Highlights:

  • Total assets were $15.08 billion for the quarter ended March 31, 2021, an increase of $0.45 billion, or 3.10%, compared to $14.63 billion at December 31, 2020. Total assets increased $2.46 billion, or 19.45%, from $12.62 billion at March 31, 2020. The year-over-year increase was driven primarily by higher liquidity levels and loans held for investment tied to PPP lending activities.
  • Loans held for investment increased $0.95 billion, or 10.82%, compared to prior year and $0.11 billion compared the linked quarter. Excluding PPP loans of $0.90 billion in the first quarter, and $0.86 billion in the fourth quarter of 2020, loans held for investment increased $52.06 million, or 0.59%, compared to prior year, and $63.08 million, or 0.72%, compared to the linked quarter, or 2.92% on an annualized basis.
  • Average loans held for investment, excluding PPP loans, were $8.78 billion in the first quarter of 2021, an increase of $213.39 million, or 2.49% compared to prior year.   In the linked quarter comparison, average loans held for investment, excluding PPP loans, increased 0.61%, or $53.48 million, 2.49% on an annualized basis.
  • Mortgage loans held for sale increased   $129.76 million, or 28.64%, compared to the prior year and $42.11 million, or 7.79%, compared to the linked quarter.
  • Total deposits increased $2.83 billion, or 30.42%, compared to the prior year and $0.57 billion, or 4.89%, compared to the linked quarter.
  • Total borrowings decreased $0.64 billion, or 45.63%, from prior year and $0.20 billion, or 20.82%, compared to the linked quarter.

Investment Securities:

  • Total investment securities were $1.46 billion compared to $1.42 billion at December 31, 2020 and $1.35 billion at March 31, 2020. The weighted average duration of the portfolio at March 31, 2021 was 4.33 years. The carrying value of the AFS debt securities portfolio included $28.12 million in net unrealized gains compared to $58.32 million in net unrealized gains at December 31, 2020. During the first quarter of 2021, we sold $15.18 million in AFS debt securities at a gain of $1.0 million to reposition the portfolio.

Loans and Asset Quality:

  • Total loans held for investment were $9.73 billion at March 31, 2021 compared to $9.63 billion at December 31, 2020 and $8.78 billion at March 31, 2020.
  • Nonperforming assets were $17.27 million, or 0.11% of total assets, compared to $29.75 million, or 0.24%, at March 31, 2020.
  • Nonperforming loans were 0.13% of period end loans compared to 0.19% at March 31, 2020.
  • Foreclosed property decreased to $3.75 million from $13.05 million at March 31, 2020.
  • Expected loss estimates are subject to change based on continuing review of models and assumptions, portfolio performance, changes in forecasted macroeconomic conditions and loan mix which could result in material changes to the reserve in future periods.
  • At March 31, 2021 we had $210.25 million in loan modifications made in accordance with section 4013 of the CARES Act.

Deposits and Borrowings:

  • Total deposits were $12.14 billion compared to $11.57 billion at December 31, 2020 and $9.31 billion at March 31, 2020.
  • Total loans to deposits were 80.19% compared to 83.20% at December 31, 2020 and 94.37% at March 31, 2020.
  • Non-interest bearing deposits were 39.87% of total deposits at March 31, 2021 compared to 37.80% at December 31, 2020 and 32.88% at March 31, 2020.
  • Total borrowings were $0.76 billion compared to $0.96 billion at December 31, 2020 and $1.39 billion at March 31, 2020.

Capital:

  • Common equity tier 1 capital ratio of 12.15%.
  • Tier 1 leverage capital ratio of 9.54%.
  • Tier 1 risk-based capital ratio of 12.30%.
  • Total risk-based capital ratio of 15.59%.
  • Book value was $24.78 compared to $24.31 at December 31, 2020 and $22.77 at March 31, 2020.
  • Tangible book value (non-GAAP) was $17.94 compared to $17.46 at December 31, 2020 and $15.91 at March 31, 2020.

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

Today, the bank operates over 40 banking offices throughout Hampton Roads and Central Virginia, as well as Northeastern and Central North Carolina – serving as a local leader in promoting the social, cultural, and economic growth in each community. Towne offers a competitive array of business and personal banking solutions, delivered with only the highest ethical standards. Experienced local bankers providing a higher level of expertise and personal attention with local decision-making are key to the TowneBank strategy. Towne has grown its capabilities beyond banking to provide expertise through its controlled divisions and subsidiaries that include Towne Investment Group, Towne Wealth Management, Towne Insurance Agency, Towne Benefits, TowneBank Mortgage, TowneBank Commercial Mortgage, Berkshire Hathaway HomeServices Towne Realty, Towne 1031 Exchange, LLC, and Towne Vacations. With total assets of $15.08 billion as of March 31, 2021, TowneBank is one of the largest banks headquartered in Virginia.

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

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

Media contact:G. Robert Aston, Jr., Executive Chairman, 757-638-6780J. Morgan Davis, President and Chief Executive Officer, 757-673-1673

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

 
 
TOWNEBANK
Selected Financial Highlights (unaudited)
(dollars in thousands, except per share data)
     
    Three Months Ended
    March 31,   December 31,   September 30,   June 30,   March 31,
  2021   2020   2020   2020   2020
Income and Performance Ratios:                  
  Total Revenue $ 182,509     $ 171,848     $ 192,135     $ 162,656     $ 137,696  
  Net income 72,631     53,891     50,715     37,222     27,605  
  Net income available to common shareholders 68,995     50,082     34,464     34,605     26,384  
  Pre-provision, pre-tax, net revenues (non-GAAP) 81,547     62,107     73,903     69,014     39,587  
  Net income per common share - diluted 0.95     0.69     0.48     0.48     0.36  
  Book value per common share 24.78     24.31     23.83     23.50     22.77  
  Book value per common share - tangible (non-GAAP) 17.94     17.46     17.06     16.68     15.91  
  Return on average assets 1.92 %   1.35 %   0.89 %   0.97 %   0.88 %
  Return on average assets - tangible (non-GAAP) 2.05 %   1.46 %   0.97 %   1.07 %   1.00 %
  Return on average equity 15.56 %   11.26 %   7.85 %   8.18 %   6.37 %
  Return on average equity - tangible (non-GAAP) 22.19 %   16.28 %   11.66 %   12.32 %   9.91 %
  Return on average common equity 15.70 %   11.36 %   7.91 %   8.24 %   6.42 %
  Return on average common equity - tangible (non-GAAP) 22.45 %   16.48 %   11.79 %   12.44 %   10.01 %
  Noninterest income as a percentage of total revenue 45.21 %   41.45 %   49.64 %   42.66 %   35.00 %
Regulatory Capital Ratios (1):                  
  Common equity tier 1 12.15 %   11.87 %   11.75 %   11.54 %   11.23 %
  Tier 1 12.30 %   12.04 %   11.91 %   11.67 %   11.35 %
  Total 15.59 %   15.42 %   15.35 %   14.91 %   14.40 %
  Tier 1 leverage ratio 9.54 %   8.99 %   8.89 %   9.05 %   10.11 %
Asset Quality:                  
  Allowance for credit losses on loans to nonperforming loans 9.09x   10.74x   7.31x   5.34x   3.85x
  Allowance for credit losses on loans to period end loans 1.19 %   1.25 %   1.22 %   0.92 %   0.73 %
  Allowance for credit losses on loans to period end loans excluding PPP loans (non-GAAP) 1.31 %   1.37 %   1.37 %   1.04 %   0.73 %
  Nonperforming loans to period end loans 0.13 %   0.12 %   0.17 %   0.17 %   0.19 %
  Nonperforming assets to period end assets 0.11 %   0.11 %   0.19 %   0.19 %   0.24 %
  Net charge-offs (recoveries) to average loans (annualized) 0.03 %   %   (0.01 )%   %   0.03 %
  Net charge-offs (recoveries) $ 669     $ 109     $ (328   $ (102   $ 559  
                     
  Nonperforming loans $ 12,768     $ 11,188     $ 16,295     $ 16,935     $ 16,700  
  Former bank premises 750     750     750          
  Foreclosed property 3,748     4,276     11,695     12,315     13,053  
  Total nonperforming assets $ 17,266     $ 16,214     $ 28,740     $ 29,250     $ 29,753  
  Loans past due 90 days and still accruing interest $ 108     $ 528     $ 19     $ 464     $ 91  
  Allowance for credit losses on loans $ 116,077     $ 120,157     $ 119,058     $ 90,467     $ 64,372  
Mortgage Banking:                  
  Loans originated, mortgage $ 1,187,595     $ 1,257,963     $ 1,292,801     $ 1,116,782     $ 718,681  
  Loans originated, joint venture 417,177     429,848     498,100     357,815     204,522  
  Total loans originated $ 1,604,772     $ 1,687,811     $ 1,790,901     $ 1,474,597     $ 923,203  
  Number of loans originated 5,165     5,481     5,817     4,818     3,025  
  Number of originators 229     228     224     216     223  
  Purchase % 53.45 %   59.76 %   61.21 %   51.26 %   61.31 %
  Loans sold $ 1,601,480     $ 1,845,926     $ 1,833,590     $ 1,398,649     $ 809,834  
  Rate lock asset $ 12,522     $ 11,781     $ 10,480     $ 7,202     $ 3,691  
  Gross realized gain on sales and fees as a % of loans originated 4.01 %   4.02 %   3.65 %   3.17 %   1.80 %
Other Ratios:                  
  Net interest margin 3.04 %   2.97 %   2.70 %   2.85 %   3.35 %
  Net interest margin-fully tax equivalent (non-GAAP) 3.06 %   2.98 %   2.72 %   2.87 %   3.37 %
  Average earning assets/total average assets 91.47 %   91.59 %   92.09 %   91.33 %   89.15 %
  Average loans/average deposits 82.71 %   83.42 %   86.29 %   91.81 %   92.99 %
  Average noninterest deposits/total average deposits 38.39 %   39.61 %   37.76 %   36.52 %   32.21 %
  Period end equity/period end total assets 12.04 %   12.20 %   11.82 %   11.05 %   13.19 %
  Efficiency ratio (non-GAAP) 52.11 %   60.02 %   57.36 %   55.17 %   70.79 %
  (1) Current reporting period regulatory capital ratios are preliminary            
 
 
TOWNEBANK
Selected Data (unaudited)
(dollars in thousands)
 
Investment Securities             % Change
  Q1   Q1   Q4   Q1 21 vs.   Q1 21 vs.
Available-for-sale securities, at fair value 2021   2020   2020   Q1 20   Q4 20
U.S. agency securities $ 201,787       $ 121,857       $ 184,657       65.59 %   9.28 %
U.S. Treasury notes 1,019       1,014       1,000       0.49 %   1.90 %
Municipal securities 334,751       266,489       353,651       25.62 %   (5.34 )%
Trust preferred and other corporate securities 31,241       59,606       31,499       (47.59 )%   (0.82 )%
Mortgage-backed securities issued by GSE and GNMA 849,418       799,713       797,765       6.22 %   6.47 %
Allowance for credit losses (210 )     (259 )     (348 )     (18.92 )%   (39.66 )%
Total $ 1,418,006       $ 1,248,420       $ 1,368,224       13.58 %   3.64 %
Gross unrealized gains (losses) reflected in financial statements                              
Total gross unrealized gains $ 38,751       $ 30,545       $ 60,025       26.87 %   (35.44 )%
Total gross unrealized losses (10,632 )     (9,848 )     (1,703 )     7.96 %   524.31 %
Net unrealized gains (losses) and other adjustments on AFS securities $ 28,119       $ 20,697       $ 58,322       35.86 %   (51.79 )%
Held-to-maturity securities, at amortized cost                  
Municipal securities $ 5,032       $ 28,852       $ 5,012       (82.56 )%   0.40 %
Trust preferred corporate securities 2,309       2,357       2,321       (2.04 )%   (0.52 )%
Mortgage-backed securities issued by GSE and GNMA 8,639       11,222       9,179       (23.02 )%   (5.88 )%
Allowance for credit losses (97 )     (133 )     (97 )     (27.07 )%   %
Total $ 15,883       $ 42,298       $ 16,415       (62.45 )%   (3.24 )%
                   
Gross unrealized gains (losses) not reflected in financial statements                        
Total gross unrealized gains $ 1,598       $ 964       $ 1,957       65.77 %   (18.34 )%
Total gross unrealized losses                   %   %
Net unrealized gains (losses) in HTM securities $ 1,598       $ 964       $ 1,957       65.77 %   (18.34 )%
                   
Loans Held For Investment (1)             % Change
  Q1   Q1   Q4   Q1 21 vs.   Q1 21 vs.
  2021   2020   2020   Q1 20   Q4 20
Real estate - construction and development $ 1,031,267       $ 1,060,834       $ 1,199,772       (2.79 )%   (14.04 )%
Commercial real estate - owner occupied 1,439,412       1,398,216       1,380,516       2.95 %   4.27 %
Commercial real estate - non owner occupied 2,477,315       2,305,971       2,335,235       7.43 %   6.08 %
Real estate - multifamily 360,125       283,514       295,488       27.02 %   21.87 %
Residential 1-4 family 1,173,761       1,229,909       1,216,629       (4.57 )%   (3.52 )%
HELOC 400,314       463,653       412,476       (13.66 )%   (2.95 )%
Commercial and industrial business (C&I) 2,005,558       1,311,266       1,990,808       52.95 %   0.74 %
Government 398,579       324,978       379,243       22.65 %   5.10 %
Indirect 278,567       268,347       271,459       3.81 %   2.62 %
Consumer loans and other 169,685       137,507       147,442       23.40 %   15.09 %
Total $ 9,734,583       $ 8,784,195       $ 9,629,068       10.82 %   1.10 %
(1) Paycheck Protection Program loans totaling $0.90 billion and $0.86 billion, primarily in C&I, are included in Q1 2021 and Q4 2020, respectively.
                   
Deposits             % Change
  Q1   Q1   Q4   Q1 21 vs.   Q1 21 vs.
  2021   2020   2020   Q1 20   Q4 20
Noninterest-bearing demand $ 4,840,678       $ 3,060,515       $ 4,374,566       58.17 %   10.66 %
Interest-bearing:                  
Demand and money market accounts 5,062,461       3,573,926       4,819,604       41.65 %   5.04 %
Savings 342,554       280,807       330,091       21.99 %   3.78 %
Certificates of deposits 1,893,951       2,392,744       2,048,905       (20.85 )%   (7.56 %
Total $ 12,139,644       $ 9,307,992       $ 11,573,166       30.42 %   4.89 %
 
 
TOWNEBANK
Average Balances, Yields and Rate Paid (unaudited)
(dollars in thousands)
 
  Three Months Ended   Three Months Ended   Three Months Ended
  March 31, 2021   December 31, 2020   March 31, 2020
      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 (1) $ 9,647,129     $ 101,960     4.29 %   $ 9,752,150     $ 104,799     4.28 %   $ 8,550,216     $ 100,566     4.73 %
Taxable investment securities 1,303,535     6,604     2.03 %   1,250,375     6,878     2.20 %   1,356,411     9,211     2.72 %
Tax-exempt investment securities 139,859     542     1.55 %   139,572     520     1.49 %   128,204     861     2.69 %
Total securities 1,443,394     7,146     1.98 %   1,389,947     7,398     2.13 %   1,484,615     10,072     2.71 %
Interest-bearing deposits 1,715,110     416     0.10 %   1,754,365     435     0.10 %   373,984     1,102     1.19 %
Loans held for sale 536,997     3,361     2.50 %   587,517     3,867     2.63 %   333,070     2,988     3.59 %
Total earning assets 13,342,630     112,883     3.43 %   13,483,979     116,499     3.44 %   10,741,885     114,728     4.30 %
Less: allowance for credit losses (120,934 )           (121,402 )           (55,331 )        
Total nonearning assets 1,370,720             1,359,808             1,362,769          
Total assets $ 14,592,416             $ 14,722,385             $ 12,049,323          
Liabilities and Equity:                                      
Interest-bearing deposits                                      
Demand and money market $ 4,904,885     $ 2,075     0.17 %   $ 4,582,588     $ 2,633     0.23 %   $ 3,521,707     $ 5,319     0.61 %
Savings 332,006     522     0.64 %   317,561     552     0.69 %   276,947     593     0.86 %
Certificates of deposit 1,959,225     5,951     1.23 %   2,159,573     7,578     1.40 %   2,434,098     13,150     2.17 %
Total interest-bearing deposits 7,196,116     8,548     0.48 %   7,059,722     10,763     0.61 %   6,232,752     19,062     1.23 %
Borrowings 562,451     822     0.58 %   722,291     1,645     0.89 %   679,745     2,581     1.50 %
Subordinated debt, net 249,114     2,930     4.70 %   248,965     2,962     4.76 %   248,510     2,962     4.77 %
Total interest-bearing liabilities 8,007,681     12,300     0.62 %   8,030,978     15,370     0.76 %   7,161,007     24,605     1.38 %
Demand deposits 4,483,444             4,630,665             2,962,110          
Other noninterest-bearing liabilities 303,524             291,836             260,500          
Total liabilities 12,794,649             12,953,479             10,383,617          
Shareholders’ equity 1,797,767             1,768,906             1,665,706          
Total liabilities and equity $ 14,592,416             $ 14,722,385             $ 12,049,323          
Net interest income (tax-equivalent basis)         $ 100,583             $ 101,129             $ 90,123      
Reconciliation of Non-GAAP Financial Measures                                      
Tax-equivalent basis adjustment         (593 )           (515 )           (627 )    
Net interest income (GAAP)         $ 99,990             $ 100,614             $ 89,496      
                                       
Interest rate spread (2)(3)             2.81 %           2.68 %           2.92 %
Interest expense as a percent of average earning assets             0.37 %           0.45 %           0.92 %
Net interest margin (tax equivalent basis) (3)(4)             3.06 %           2.98 %           3.37 %
Total cost of deposits             0.30 %           0.37 %           0.83 %
                                       

(1) March 31, 2021 and December 31, 2020 includes average PPP balances of $0.88 billion and $1.04 billion, and related interest and fee income of $11.63 million and $11.29 million, respectively.(2) Interest spread is the average yield earned on earning assets less the average rate paid on interest-bearing liabilities. Fully tax equivalent.(3) Net interest margin is net interest income expressed as a percentage of average earning assets. Fully tax equivalent.(4) Non-GAAP.

 
 
TOWNEBANK
Consolidated Balance Sheets
(dollars in thousands, except share data)
   
     
  March 31,   December 31,
  2021   2020
  (unaudited)   (audited)
ASSETS      
Cash and due from banks $ 141,545     $ 41,514  
Interest-bearing deposits at FRB - Richmond 1,936,458     1,795,241  
Interest-bearing deposits in financial institutions 30,031     27,532  
Total Cash and Cash Equivalents 2,108,034     1,864,287  
Securities available for sale, at fair value (amortized cost of $1,390,097 and $1,310,250, and allowance for credit losses of $210 and $348 at March 31, 2021 and December 31, 2020, respectively.) 1,418,006     1,368,224  
Securities held to maturity, at amortized cost (fair value $17,578 and $18,469 at March 31, 2021 and December 31, 2020, respectively.) 15,980     16,512  
Less: allowance for credit losses (97 )   (97 )
Securities held to maturity, net of allowance for credit losses 15,883     16,415  
Other equity securities 6,355     6,492  
FHLB stock 16,909     30,135  
Total Securities 1,457,153     1,421,266  
Mortgage loans held for sale 582,905     540,798  
Loans, net of unearned income and deferred costs 9,734,583     9,629,068  
Less: allowance for credit losses (116,077 )   (120,157 )
Net Loans 9,618,506     9,508,911  
Premises and equipment, net 261,831     260,242  
Goodwill 452,328     452,328  
Other intangible assets, net 44,808     45,533  
BOLI 247,655     246,109  
Other assets 306,176     286,970  
TOTAL ASSETS $ 15,079,396     $ 14,626,444  
       
LIABILITIES AND EQUITY      
Deposits:      
Noninterest-bearing demand $ 4,840,678     $ 4,374,566  
Interest-bearing:      
Demand and money market accounts 5,062,461     4,819,604  
Savings 342,554     330,091  
Certificates of deposit 1,893,951     2,048,905  
Total Deposits 12,139,644     11,573,166  
Advances from the FHLB 255,872     456,038  
Subordinated debt, net 249,204     249,055  
FRB PPP lending facility 183,164     182,852  
Repurchase agreements and other borrowings 68,509     67,786  
Total Borrowings 756,749     955,731  
Other liabilities 366,697     313,719  
TOTAL LIABILITIES 13,263,090     12,842,616  
Preferred stock, authorized and unissued shares - 2,000,000      
Common stock, $1.667 par: 150,000,000 shares authorized 72,653,670 and 72,667,541 shares issued at March 31, 2021 and December 31, 2020, respectively 121,108     121,132  
Capital surplus 1,047,312     1,046,642  
Retained earnings 613,826     557,889  
Common stock issued to deferred compensation trust, at cost 873,521 and 873,486 shares at March 31, 2021 and December 31, 2020, respectively (17,063 )   (16,969 )
Deferred compensation trust 17,063     16,969  
Accumulated other comprehensive income (loss) 17,969     41,184  
TOTAL SHAREHOLDERS’ EQUITY 1,800,215     1,766,847  
Noncontrolling interest 16,091     16,981  
TOTAL EQUITY 1,816,306     1,783,828  
TOTAL LIABILITIES AND EQUITY $ 15,079,396     $ 14,626,444  
 
 
TOWNEBANK
Consolidated Statements of Income (unaudited)
(dollars in thousands, except per share data)
       
       
  Three Months Ended
  March 31,
  2021   2020
INTEREST INCOME:      
Loans, including fees $ 101,396     $ 100,062  
Investment securities 7,117     9,949  
Interest-bearing deposits in financial institutions and federal funds sold 416     1,102  
Mortgage loans held for sale 3,361     2,988  
Total interest income 112,290     114,101  
INTEREST EXPENSE:      
Deposits 8,548     19,062  
Advances from the FHLB 497     2,492  
Subordinated debt, net 2,930     2,962  
Repurchase agreements and other borrowings 325     89  
Total interest expense 12,300     24,605  
Net interest income 99,990     89,496  
       
PROVISION FOR CREDIT LOSSES (4,027 )   7,016  
Net interest income after provision for credit losses 104,017     82,480  
NONINTEREST INCOME:      
Residential mortgage banking income, net 37,412     7,416  
Insurance commissions and other title fees and income, net 16,325     16,893  
Real estate brokerage and property management income, net 17,934     6,938  
Service charges on deposit accounts 2,190     2,440  
Credit card merchant fees, net 1,302     1,179  
BOLI 1,519     3,105  
Other income 4,837     5,227  
Net gain/(loss) on investment securities 1,000     5,002  
Total noninterest income 82,519     48,200  
NONINTEREST EXPENSE:      
Salaries and employee benefits 58,435     55,867  
Occupancy expense 8,072     7,502  
Furniture and equipment 3,512     3,640  
Amortization - intangibles 2,723     2,950  
Software expense 4,194     3,492  
Data processing 3,239     2,791  
Professional fees 2,339     3,067  
Advertising and marketing 2,968     3,584  
Other expenses 11,844     13,995  
Total noninterest expense 97,326     96,888  
Income before income tax expense and noncontrolling interest 89,210     33,792  
Provision for income tax expense 16,579     6,187  
Net income $ 72,631     $ 27,605  
Net income attributable to noncontrolling interest (3,636 )   (1,221 )
Net income attributable to TowneBank $ 68,995     $ 26,384  
Per common share information      
Basic earnings $ 0.95     $ 0.37  
Diluted earnings $ 0.95     $ 0.36  
Cash dividends declared $ 0.18     $ 0.18  
 
 
TOWNEBANK
Consolidated Balance Sheets - Five Quarter Trend
(dollars in thousands, except share data)
 
                   
  March 31,   December 31,   September 30,   June 30,   March 31,
  2021   2020   2020   2020   2020
  (unaudited)   (audited)   (unaudited)   (unaudited)   (unaudited)
ASSETS                  
Cash and due from banks $ 141,545     $ 41,514     $ 114,604     $ 115,724     $ 108,929  
Interest-bearing deposits at FRB - Richmond 1,936,458     1,795,241     1,670,186     2,511,152     753,643  
Interest-bearing deposits in financial institutions 30,031     27,532     24,890     24,374     23,564  
Total Cash and Cash Equivalents 2,108,034     1,864,287     1,809,680     2,651,250     886,136  
Securities available for sale 1,418,006     1,368,224     1,310,683     1,266,624     1,248,420  
Securities held to maturity 15,980     16,512     17,131     41,595     42,431  
Less: allowance for credit losses (97 )   (97 )   (90 )   (121 )   (133 )
Securities held to maturity, net of allowance for credit losses 15,883     16,415     17,041     41,474     42,298  
Other equity securities 6,355     6,492     6,497     6,497     6,462  
FHLB stock 16,909     30,135     41,829     49,277     52,042  
Total Securities 1,457,153     1,421,266     1,376,050     1,363,872     1,349,222  
Mortgage loans held for sale 582,905     540,798     669,020     610,369     453,143  
Loans, net of unearned income and deferred costs 9,734,583     9,629,068     9,770,570     9,801,889     8,784,195  
Less: allowance for credit losses (116,077 )   (120,157 )   (119,058 )   (90,467 )   (64,372 )
Net Loans 9,618,506     9,508,911     9,651,512     9,711,422     8,719,823  
Premises and equipment, net 261,831     260,242     256,909     257,533     236,735  
Goodwill 452,328     452,328     446,725     446,725     446,725  
Other intangible assets, net 44,808     45,533     45,781     48,632     51,448  
BOLI 247,655     246,109     244,103     242,493     240,924  
Other assets 306,176     286,970     295,637     247,962     239,670  
TOTAL ASSETS $ 15,079,396     $ 14,626,444     $ 14,795,417     $ 15,580,258     $ 12,623,826  
LIABILITIES AND EQUITY                  
Deposits:                  
Noninterest-bearing demand $ 4,840,678     $ 4,374,566     $ 4,464,178     $ 4,226,208     $ 3,060,515  
Interest-bearing:                  
Demand and money market accounts 5,062,461     4,819,604     4,642,482     4,223,391     3,573,926  
Savings 342,554     330,091     312,444     298,673     280,807  
Certificates of deposit 1,893,951     2,048,905     2,285,859     2,516,666     2,392,744  
Total Deposits 12,139,644     11,573,166     11,704,963     11,264,938     9,307,992  
Advances from the FHLB 255,872     456,038     731,202     906,365     971,527  
Subordinated debt, net 249,204     249,055     248,906     248,756     248,607  
FRB PPP lending facility 183,164     182,852         1,111,429      
Repurchase agreements and other borrowings 68,509     67,786     58,061     60,913     171,762  
Total Borrowings 756,749     955,731     1,038,169     2,327,463     1,391,896  
Other liabilities 366,697     313,719     303,582     266,314     258,306  
TOTAL LIABILITIES 13,263,090     12,842,616     13,046,714     13,858,715     10,958,194  
Preferred stock                  
Authorized shares - 2,000,000                  
Common stock, $1.667 par value 121,108     121,132     121,115     121,101     121,057  
Capital surplus 1,047,312     1,046,642     1,045,170     1,043,774     1,041,870  
Retained earnings 613,826     557,889     520,888     499,502     477,972  
Common stock issued to deferred compensation trust, at cost (17,063 )   (16,969 )   (16,951 )   (16,776 )   (15,562 )
Deferred compensation trust 17,063     16,969     16,951     16,776     15,562  
Accumulated other comprehensive income (loss) 17,969     41,184     44,569     43,218     12,301  
TOTAL SHAREHOLDERS’ EQUITY 1,800,215     1,766,847     1,731,742     1,707,595     1,653,200  
Noncontrolling interest 16,091     16,981     16,961     13,948     12,432  
TOTAL EQUITY 1,816,306     1,783,828     1,748,703     1,721,543     1,665,632  
TOTAL LIABILITIES AND EQUITY $ 15,079,396     $ 14,626,444     $ 14,795,417     $ 15,580,258     $ 12,623,826  
 
 
TOWNEBANK
Consolidated Statements of Income - Five Quarter Trend (unaudited)
(dollars in thousands, except share data)
   
   
  Three Months Ended
  March 31,   December 31,   September 30,   June 30,   March 31,
  2021   2020   2020   2020   2020
INTEREST INCOME:                  
Loans, including fees $ 101,396     $ 104,182     $ 102,869     $ 102,139     $ 100,062  
Investment securities 7,117     7,499     7,440     8,163     9,949  
Interest-bearing deposits in financial institutions and federal funds sold 416     435     632     433     1,102  
Mortgage loans held for sale 3,361     3,867     4,587     3,811     2,988  
Total interest income 112,290     115,983     115,528     114,546     114,101  
INTEREST EXPENSE:                  
Deposits 8,548     10,762     12,966     15,072     19,062  
Advances from the FHLB 497     1,404     1,901     2,595     2,492  
Subordinated debt 2,930     2,962     2,962     2,962     2,962  
Repurchase agreements and other borrowings 325     241     940     643     89  
Total interest expense 12,300     15,369     18,769     21,272     24,605  
Net interest income 99,990     100,614     96,759     93,274     89,496  
                   
PROVISION FOR CREDIT LOSSES (4,027 )   1,617     31,598     26,945     7,016  
Net interest income after provision for credit losses 104,017     98,997     65,161     66,329     82,480  
NONINTEREST INCOME:                  
Residential mortgage banking income, net 37,412     37,504     37,531     29,715     7,416  
Insurance commissions and other title fees and income, net 16,325     13,868     17,468     17,612     16,893  
Real estate brokerage and property management income, net 17,934     9,229     11,301     10,781     6,938  
Service charges on deposit accounts 2,190     1,707     1,986     1,888     2,440  
Credit card merchant fees, net 1,302     1,377     1,506     1,109     1,179  
BOLI 1,519     1,990     1,605     1,584     3,105  
Other income 4,837     5,559     22,278     3,763     5,227  
Net gain/(loss) on investment securities 1,000         1,701     2,930     5,002  
Total noninterest income 82,519     71,234     95,376     69,382     48,200  
NONINTEREST EXPENSE:                  
Salaries and employee benefits 58,435     61,475     61,408     56,926     55,867  
Occupancy expense 8,072     8,193     8,396     7,227     7,502  
Furniture and equipment 3,512     3,462     3,247     3,564     3,640  
Amortization - intangibles 2,723     2,797     2,851     2,901     2,950  
Software expense 4,194     4,066     3,572     3,492     3,492  
Data processing 3,239     2,363     3,113     2,718     2,791  
Professional fees 2,339     2,591     2,637     2,972     3,067  
Advertising and marketing 2,968     2,204     1,870     1,986     3,584  
Other expenses 11,844     18,781     14,887     9,239     13,995  
Total noninterest expense 97,326     105,932     101,981     91,025     96,888  
Income before income tax expense and noncontrolling interest 89,210     64,299     58,556     44,686     33,792  
Provision for income tax expense 16,579     10,408     7,841     7,464     6,187  
Net income 72,631     53,891     50,715     37,222     27,605  
Net income attributable to noncontrolling interest (3,636 )   (3,809 )   (16,251 )   (2,617 )   (1,221 )
Net income attributable to TowneBank $ 68,995     $ 50,082     $ 34,464     $ 34,605     $ 26,384  
Per common share information                  
Basic earnings $ 0.95     $ 0.69     $ 0.48     $ 0.48     $ 0.37  
Diluted earnings $ 0.95     $ 0.69     $ 0.48     $ 0.48     $ 0.36  
Basic weighted average shares outstanding 72,414,953     72,357,177     72,339,413     72,280,555     72,206,228  
Diluted weighted average shares outstanding 72,517,008     72,455,096     72,375,736     72,317,988     72,299,721  
Cash dividends declared $ 0.18     $ 0.18     $ 0.18     $ 0.18     $ 0.18  
                   
                   
TOWNEBANK
Banking Segment Financial Information (unaudited)
(dollars in thousands)
 
           
  Three Months Ended   Increase/(Decrease)
  March 31,   December 31,   2021 over 2020
  2021   2020   2020   Amount   Percent
Revenue                  
Net interest income $ 97,604     $ 87,406     $ 97,412     $ 10,198     11.67 %
Service charges on deposit accounts 2,190     2,440     1,707     (250 )   (10.25 )%
Credit card merchant fees 1,302     1,179     1,377     123     10.43 %
Other income 4,970     7,061     5,983     (2,091 )   (29.61 )%
Subtotal 8,462     10,680     9,067     (2,218 )   (20.77 )%
Net gain/(loss) on investment securities 1,000     5,002         (4,002 )   (80.01 )%
Total noninterest income 9,462     15,682     9,067     (6,220 )   (39.66 )%
Total revenue 107,066     103,088     106,479     3,978     3.86 %
                   
Provision for credit losses (3,401 )   7,041     1,628     (10,442 )   (148.30 )%
                   
Expenses                  
Salaries and employee benefits 31,861     33,225     37,358     (1,364 )   (4.11 )%
Occupancy expense 5,546     4,916     5,681     630     12.82 %
Furniture and equipment 2,668     2,660     2,625     8     0.30 %
Amortization of intangibles 962     1,164     1,013     (202 )   (17.35 )%
Other expenses 14,050     18,705     19,892     (4,655 )   (24.89 )%
Total expenses 55,087     60,670     66,569     (5,583 )   (9.20 )%
Income before income tax, corporate allocation and noncontrolling interest 55,380     35,377     38,282     20,003     56.54 %
Corporate allocation 1,292     670     643     622     92.84 %
Income before income tax provision and noncontrolling interest 56,672     36,047     38,925     20,625     57.22 %
Provision for income tax expense 9,701     6,663     5,163     3,038     45.60 %
Net income 46,971     29,384     33,762     17,587     59.85 %
Noncontrolling interest (5 )   (1 )   4     (4 )   400.00 %
Net income attributable to TowneBank $ 46,966     $ 29,383     $ 33,766     $ 17,583     59.84 %
                   
Efficiency ratio (non-GAAP) 51.03 %   60.67 %   61.57 %   (9.64 )%   (15.89 )%
 
 
TOWNEBANK
Realty Segment Financial Information (unaudited)
(dollars in thousands)
 
       
  Three Months Ended   Increase/(Decrease)
  March 31,   December 31,   2021 over 2020
  2021   2020   2020   Amount   Percent
Revenue                  
Residential mortgage brokerage income, net $ 37,877     $ 8,007     $ 38,040     $ 29,870     373.05 %
Real estate brokerage income, net 2,451     1,865     3,564     586     31.42 %
Title insurance and settlement fees 525     436     669     89     20.41 %
Property management fees, net 15,483     5,073     5,665     10,410     205.20 %
Income from unconsolidated subsidiary 406     186     398     220     118.28 %
Net interest and other income 2,736     2,396     3,627     340     14.19 %
Total revenue 59,478     17,963     51,963     41,515     231.11 %
                   
Provision for credit losses (626 )   (25 )   (11 )   (601 )   2,404.00 %
                   
Expenses                  
Salaries and employee benefits 16,847     13,293     16,168     3,554     26.74 %
Occupancy expense 1,871     1,927     1,869     (56 )   (2.91 )%
Furniture and equipment 649     762     614     (113 )   (14.83 )%
Amortization of intangible assets 590     657     658     (67 )   (10.20 )%
Other expenses 9,229     6,867     8,779     2,362     34.40 %
Total expenses 29,186     23,506     28,088     5,680     24.16 %
                   
Income (loss) before income tax, corporate allocation and noncontrolling interest 30,918     (5,518 )   23,886     36,436     (660.31 )%
Corporate allocation (1,000 )   (393 )   (403 )   (607 )   154.45 %
(Loss) income before income tax provision and noncontrolling interest 29,918     (5,911 )   23,483     35,829     (606.14 )%
Provision for income tax (benefit) expense 6,216     (1,292 )   4,421     7,508     (581.11 )%
Net (loss) income 23,702     (4,619 )   19,062     28,321     (613.14 )%
Noncontrolling interest (3,631 )   (791 )   (3,813 )   (2,840 )   359.04 %
Net (loss) income attributable to TowneBank $ 20,071     $ (5,410 )   $ 15,249     $ 25,481     (471.00 )%
                   
Efficiency ratio (non-GAAP) 48.08 %   127.20 %   52.79 %   (79.12 )%   (62.20 )%
                   
                   
TOWNEBANK
Insurance Segment Financial Information (unaudited)
(dollars in thousands)
 
           
  Three Months Ended   Increase/(Decrease)
  March 31,   December 31,   2021 over 2020
  2021   2020   2020   Amount   Percent
Commission and fee income                  
Property and casualty $ 14,189     $ 12,786     $ 11,942     $ 1,403     10.97 %
Employee benefits 3,884     3,918     3,725     (34 )   (0.87 )%
Travel insurance     1,266         (1,266 )   (100.00 )%
Specialized benefit services 167     168     175     (1 )   (0.60 )%
Total commissions and fees 18,240     18,138     15,842     102     0.56 %
                   
Contingency and bonus revenue 1,759     2,022     1,087     (263 )   (13.01 )%
Other income 73     81     69     (8 )   (9.88 )%
Total revenue 20,072     20,241     16,998     (169 )   (0.83 )%
                   
Employee commission expense 4,107     3,596     3,592     511     14.21 %
Revenue, net of commission expense 15,965     16,645     13,406     (680 )   (4.09 )%
                   
Salaries and employee benefits 9,727     9,349     7,949     378     4.04 %
Occupancy expense 655     659     643     (4 )   (0.61 )%
Furniture and equipment 195     218     223     (23 )   (10.55 )%
Amortization of intangible assets 1,171     1,129     1,126     42     3.72 %
Other expenses 1,305     1,357     1,334     (52 )   (3.83 )%
Total operating expenses 13,053     12,712     11,275     341     2.68 %
Income before income tax, corporate allocation and noncontrolling interest 2,912     3,933     2,131     (1,021 )   (25.96 )%
Corporate allocation (292 )   (277 )   (240 )   (15 )   5.42 %
Income before income tax provision and noncontrolling interest 2,620     3,656     1,891     (1,036 )   (28.34 )%
Provision for income tax expense 662     816     824     (154 )   (18.87 )%
Net income 1,958     2,840     1,067     (882 )   (31.06 )%
Noncontrolling interest     (429 )       429     (100.00 )%
Net income attributable to TowneBank $ 1,958     $ 2,411     $ 1,067     (453 )   (18.79 )%
                   
Provision for income taxes 662     816     824     (154 )   (18.87 )%
Depreciation, amortization and interest expense 1,308     1,300     1,274     8     0.62 %
EBITDA (non-GAAP) $ 3,928     $ 4,527     $ 3,165     $ (599 )   (13.23 )%
                   
Efficiency ratio (non-GAAP) 74.43 %   69.59 %   75.70 %   4.84 %   6.96 %
 
 
TOWNEBANK
Reconciliation of Non-GAAP Financial Measures
(dollars in thousands)
 
  Three Months Ended
  March 31,   March 31,   December 31,
  2021   2020   2020
           
Return on average assets (GAAP) 1.92 %   0.88 %   1.35 %
Impact of excluding average goodwill and other intangibles and amortization 0.13 %   0.12 %   0.11 %
Return on average tangible assets (non-GAAP) 2.05 %   1.00 %   1.46 %
           
Return on average equity (GAAP) 15.56 %   6.37 %   11.26 %
Impact of excluding average goodwill and other intangibles and amortization 6.63 %   3.54 %   5.02 %
Return on average tangible equity (non-GAAP) 22.19 %   9.91 %   16.28 %
           
Return on average common equity (GAAP) 15.70 %   6.42 %   11.36 %
Impact of excluding average goodwill and other intangibles and amortization 6.75 %   3.59 %   5.12 %
Return on average tangible common equity (non-GAAP) 22.45 %   10.01 %   16.48 %
           
Book value (GAAP) $ 24.78     $ 22.77     $ 24.31  
Impact of excluding average goodwill and other intangibles and amortization (6.84 )   (6.86 )   (6.85 )
Tangible book value (non-GAAP) $ 17.94     $ 15.91     $ 17.46  
           
Efficiency ratio (GAAP) 53.33 %   70.36 %   61.64 %
Impact of exclusions (1.22 )%   0.43 %   (1.62 )%
Efficiency ratio (non-GAAP) 52.11 %   70.79 %   60.02 %
           
Average assets (GAAP) $ 14,592,416     $ 12,049,323     $ 14,722,385  
Less: average goodwill and intangible assets 497,446     500,123     491,453  
Average tangible assets (non-GAAP) $ 14,094,970     $ 11,549,200     $ 14,230,932  
           
Average equity (GAAP) $ 1,797,767     $ 1,665,706     $ 1,768,906  
Less: average goodwill and intangible assets 497,446     500,123     491,453  
Average tangible equity (non-GAAP) $ 1,300,321     $ 1,165,583     $ 1,277,453  
           
Average common equity (GAAP) $ 1,782,795     $ 1,653,676     $ 1,753,596  
Less: average goodwill and intangible assets 497,446     500,123     491,453  
Average tangible common equity (non-GAAP) $ 1,285,349     $ 1,153,553     $ 1,262,143  
           
Net Income (GAAP) $ 68,995     $ 26,384     50,082  
Amortization of Intangibles, net of tax 2,151     2,331     2,210  
Tangible net income (non-GAAP) $ 71,146     $ 28,715     $ 52,292  
           
Net Income (GAAP) $ 68,995     $ 26,384     $ 50,082  
Provision for credit losses (4,027 )   7,016     1,617  
Provision for income tax 16,579     6,187     10,408  
Pre-provision, pre-tax net revenues (non-GAAP) $ 81,547     $ 39,587     $ 62,107  
           
Total Revenue (GAAP) $ 182,509     $ 137,696     $ 171,848  
Net (gain)/loss on investment securities (1,000 )   (5,002 )    
Other nonrecurring (income) loss 30          
Total Revenue for efficiency calculation (non-GAAP) $ 181,539     $ 132,694     $ 171,848  
           
Noninterest expense (GAAP) $ 97,326     $ 96,888     $ 105,932  
Less: Amortization of intangibles 2,723     2,950     2,797  
Noninterest expense net of amortization (non-GAAP) $ 94,603     $ 93,938     $ 103,135  
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