TowneBank (the "Company" or "Towne") (NASDAQ: TOWN) today reported
earnings for the quarter ended March 31, 2022 of
$45.59 million, or $0.63 per diluted share, compared to
$69.00 million, or $0.95 per diluted share, for the quarter
ended March 31, 2021.
"TowneBank had a strong start to the year despite the expected
revenue decline in our real estate segment as well as a reduction
in revenue associated with the forgiveness of Paycheck Protection
Program ("PPP") loans. With core annualized loan growth of over
20%, spread across all of our markets, combined with the continued
deployment of excess liquidity, we expect the increase in
short-term rates will result in improvements in net interest income
and margin through the rest of 2022. Credit metrics remained
excellent and we strengthened our balance sheet ahead of rising
rates by completing a sub debt offering at attractive rates in
early February," said G. Robert Aston, Jr., Executive Chairman.
Highlights for First Quarter 2022
Compared to First Quarter 2021:
- Total revenues were $165.41 million, a decrease of
$17.10 million, or 9.37%, and pre-provision, pre-tax, net
revenues (non-GAAP), were $55.37 million, a decrease of
$26.21 million, or 32.13%. These declines were primarily
driven by residential mortgage banking income, which declined
$22.77 million in the quarter and a reduction in income on PPP
loans of $9.53 million.
- Loans held for investment were $9.91 billion, an increase
of $0.17 billion, or 1.79%, from March 31, 2021, and
$0.40 billion, or 4.24%, from December 31, 2021.
Excluding the decline in PPP loans, loans held for investment
increased $989.07 million, or 11.19%, compared to March 31,
2021, and $476.79 million, or 20.68% on an annualized basis,
from the linked quarter. Total loans at March 31, 2022,
March 31, 2021, and December 31, 2021 included
$0.08 billion, $0.90 billion, and $0.16 billion,
respectively, of PPP loans.
- Total deposits were $13.77 billion, an increase of
$1.63 billion, or 13.44% compared to prior year and
$0.20 billion, or 5.92% on an annualized basis, from
December 31, 2021.
- Noninterest bearing deposits increased by 14.29%, to
$5.53 billion, representing 40.17% of total deposits. Compared
to the linked quarter, noninterest bearing deposits decreased
$14.33 million, primarily in escrow deposits.
- Annualized return on common shareholders' equity was 9.81% and
annualized return on average tangible common shareholders' equity
was 14.08% (non-GAAP).
- Net interest margin for the quarter was 2.67% and taxable
equivalent net interest margin (non-GAAP) was 2.69%.
- Effective tax rate of 19.77% in the quarter compared to 19.37%
in first quarter 2021, and 18.97% in the linked quarter.
"Our results benefited from healthy loan pipelines as we entered
2022. We opened a new full-service banking office in Charlotte, and
we continue to invest in growing our fee-based businesses. We also
believe our strong commitment to generating high levels of
noninterest bearing deposits should provide a competitive advantage
in a rising rate environment," stated J. Morgan Davis, Chief
Executive Officer.
Quarterly Net Interest Income Compared
to First Quarter 2021:
- Net interest income was $99.20 million compared to
$99.99 million as of March 31, 2021.
- Tax-equivalent net interest margin (non-GAAP) was 2.69%,
including purchase accounting accretion of 6 basis points and
PPP interest and fees of 3 basis points, compared to 3.05%,
including purchase accounting accretion of 4 basis points
and 11 basis points of PPP interest and fees, for first
quarter 2021.
- On an average basis, loans held for investment, with a yield of
4.01%, represented 64.26% of earning assets at March 31, 2022
compared to a yield of 4.28% and 72.33% of earning assets in the
first quarter of 2021. Excluding PPP loans, loan yields were 3.97%
in first quarter 2022 compared to 4.17% in first quarter 2021.
- Interest and fee income on PPP loans was $2.10 million in
first quarter 2022, compared to $3.85 million in the linked
quarter, and $11.63 million in first quarter 2021.
- Total cost of deposits decreased to 0.15% from 0.30% at
March 31, 2021.
- In February 2022, the Company issued $250.00 million of
fixed-to-floating rate subordinated notes. The subordinated notes
accrue interest at a fixed rate of 3.13%, resulting in an increase
in interest expense of $1.11 million in the quarter.
- Average interest-earning assets totaled $15.05 billion at
March 31, 2022 compared to $13.36 billion at
March 31, 2021, an increase of 12.65%.
- Average interest-bearing liabilities totaled
$8.56 billion, an increase of $0.55 billion from prior
year, driven primarily by growth in interest bearing deposits.
- We expect to continue positioning our earning asset portfolio
to positively benefit interest margin in a rising rate
environment.
Quarterly Provision for Credit
Losses:
- The quarterly provision for credit losses for on-balance-sheet
loans was a benefit of $2.10 million compared to benefits of
$3.41 million one year ago and $1.18 million in the
linked quarter.
- The first quarter 2022 included a release in the allowance for
credit losses of $2.23 million that was driven by improved
economic forecasts and the related release of certain reserves
associated with industries heavily impacted by COVID-19, partially
offset by an increase in reserves driven by core loan growth.
- Net loan charge-offs were $0.13 million compared to
$0.67 million one year prior and net recoveries of
$0.06 million in the linked quarter. The ratio of net loan
charge-offs to average loans on an annualized basis was 0.01% in
first quarter 2022, 0.03% in first quarter 2021, and 0.00% in the
linked quarter.
- The allowance for credit losses on loans represented 1.05% of
total loans at March 31, 2022, 1.12% at December 31,
2021, and 1.19% at March 31, 2021. Excluding PPP loans, which
are fully government guaranteed, the allowance for credit losses
(non-GAAP) was 1.06%, compared to 1.13% at December 31, 2021
and 1.31% at March 31, 2021. The allowance for credit losses
on loans was 21.52 times nonperforming loans compared to 17.76
times at December 31, 2021 and 9.09 times at March 31,
2021.
Quarterly Noninterest Income Compared to
First Quarter 2021:
- Total noninterest income was $66.21 million compared to
$82.52 million in 2021, a decrease of $16.31 million, or
19.77%. Residential mortgage banking income decreased
$22.77 million, while insurance commissions and property
management income increased $2.75 million and
$1.66 million, respectively.
- Residential mortgage banking recorded income of
$14.64 million compared to $37.41 million in first
quarter 2021. Margins declined 100 basis points between quarters
and loan volume decreased to $0.82 billion in first quarter
2022 compared to $1.60 billion in 2021. Residential purchase
activity comprised 77.93% of production volume in the first quarter
of 2022 compared to 53.45% in the prior year quarter as the
increase in rates continued to negatively impact refinance
activity. Included in first quarter 2022 was a loss on interest
rate-locks of $0.45 million, compared to a gain of
$0.74 million in first quarter 2021.
- Margins on residential mortgages decreased 100 basis points
from first quarter 2021 to 3.01% in the current quarter.
- Total Insurance segment revenue was $23.11 million in
first quarter 2022, $3.03 million or 15.11%, higher than first
quarter 2021. This increase was attributable to organic growth in
property and casualty commissions plus bonus and contingency
income.
- Property management fee revenue increased 10.75%, or
$1.66 million, to $17.15 million compared to first
quarter 2021. Reservation income is up in the quarter over quarter
comparison due primarily to the July 2021 acquisition of a vacation
rental company in Tennessee, which contributed $4.14 million
in property management fees during the quarter. Management
anticipates the loosening of COVID-related travel restrictions may
result in a decline in reservation activity for the remainder of
2022, from the record levels of the past two years.
- In April 22, the Company implemented changes for personal
accounts to eliminate fees for non-sufficient funds and other
overdraft program fees. The change is not expected to have a
material effect on future revenue.
Quarterly Noninterest
Expense Compared to First Quarter 2021:
- Total noninterest expense was $109.38 million compared to
$97.33 million in 2021, an increase of $12.05 million, or
12.38%. The higher level of expenses was attributable to increases
in salaries and benefits of $5.53 million, advertising and
marketing expense of $1.16 million, an earnout adjustment of
$1.84 million for a prior year property management company
acquisition, and $0.53 million in fixed asset disposals
associated with the move of our financial services group
headquarters.
- Advertising and marketing expense increases, related primarily
to our Realty segment, were driven by production based advertising
programs in our property management companies and consumer mortgage
advertising in our residential mortgage operations.
- Increased costs associated with our core banking platform
resulted in higher software expenses, and higher credit card fees
on vacation property reservation activities drove the increase in
data processing expense.
Consolidated Balance Sheet
Highlights:
- Total assets were $16.67 billion for the quarter ended
March 31, 2022, an increase of $1.59 billion, or 10.53%,
from $15.08 billion at March 31, 2021. Total assets
increased $0.31 billion, or 1.87%, from the linked quarter.
The year-over-year increase was driven by increases in securities
and loans held for investment.
- Loans held for investment increased $0.17 billion, or
1.79%, compared to prior year and $0.40 billion, or 4.24%,
compared the linked quarter. Excluding PPP loans of
$0.08 billion in first quarter 2022, $0.90 billion in
first quarter 2021, and $0.16 billion in the linked quarter,
loans held for investment increased $989.07 million, or
11.19%, compared to prior year, and $476.79 million, or 5.10%,
compared to December 31, 2021, or 20.68% on an annualized
basis. Loan growth was broad-based across almost all of our loan
portfolio classifications and market areas.
- Average loans held for investment, excluding PPP loans, were
$9.55 billion in the first quarter of 2022, an increase of
$699.86 million, or 7.91%, compared to prior year. In the
linked quarter comparison, average loans held for investment,
excluding PPP loans, increased 4.15%, or $380.77 million,
16.84% on an annualized basis.
- Unamortized fee income related to PPP loans was
$2.08 million at March 31, 2022.
- Mortgage loans held for sale decreased $348.29 million, or
59.75%, compared to the prior year and $123.68 million, or
34.52%, compared to the linked quarter.
- Total deposits increased $1.63 billion, or 13.44%,
compared to the prior year and $0.20 billion, or 1.46%,
compared to the linked quarter.
- Total borrowings decreased $0.13 billion, or 17.02%, from
prior year due to the repayment of FHLB borrowings and the FRB PPP
Lending Facility. Total borrowings increased $0.15 billion, or
30.33%, compared to the linked quarter due to a new subordinated
debt offering in the quarter.
Investment Securities:
- Total investment securities were $2.30 billion compared to
$1.98 billion at December 31, 2021 and $1.46 billion
at March 31, 2021. The weighted average duration of the
portfolio at March 31, 2022 was 3.9 years. The carrying value
of the available for sale debt securities portfolio included
$70.32 million in net unrealized losses at March 31,
2022, and $28.12 million and $17.54 million in net
unrealized gains at March 31, 2021 and December 31, 2021,
respectively. In first quarter 2022, the net change in carrying
value for available-for-sale debt securities resulted in a $1.03
decrease in tangible book value.
Loans and Asset Quality:
- Total loans held for investment
were $9.91 billion at March 31, 2022 compared to
$9.51 billion at December 31, 2021 and $9.73 billion
at March 31, 2021.
- Nonperforming assets were $5.39 million, or 0.03% of total
assets, compared to $17.27 million, or 0.11%, at
March 31, 2021.
- Nonperforming loans were 0.05% of period end loans compared to
0.13% at March 31, 2021.
- Foreclosed property decreased to $0.56 million from
$3.75 million at March 31, 2021.
Deposits and Borrowings:
- Total deposits were $13.77 billion compared to
$13.57 billion at December 31, 2021 and
$12.14 billion at March 31, 2021.
- Total loans held for investment to deposits were 71.95%
compared to 70.03% at December 31, 2021 and 80.19% at
March 31, 2021.
- Non-interest bearing deposits were 40.17% of total deposits at
March 31, 2022 compared to 40.86% at December 31, 2021
and 39.87% at March 31, 2021.
- Total borrowings were $0.63 billion compared to
$0.48 billion at December 31, 2021 and $0.76 billion
at March 31, 2021.
Capital:
- Common equity tier 1 capital ratio of 12.16%.
- Tier 1 leverage capital ratio of 9.16%.
- Tier 1 risk-based capital ratio of 12.31%.
- Total risk-based capital ratio of 17.34%.
- Book value per common share was $25.61 compared to $26.13 at
December 31, 2021 and $24.78 at March 31, 2021.
- Tangible book value per common share (non-GAAP) was $18.67
compared to $19.15 at December 31, 2021 and $17.94 at
March 31, 2021.
About TowneBank:Founded in
1999, TowneBank is a company built on relationships, offering a
full range of banking and other financial services, with a focus of
serving others and enriching lives. Dedicated to a culture of
caring, Towne values all employees and members by embracing their
diverse talents, perspectives, and experiences.
Today, TowneBank operates over 40 banking offices throughout
Hampton Roads and Central Virginia, as well as Northeastern and
Central North Carolina – serving as a local leader in promoting the
social, cultural, and economic growth in each community. Towne
offers a competitive array of business and personal banking
solutions, delivered with only the highest ethical standards.
Experienced local bankers providing a higher level of expertise and
personal attention with local decision-making are key to the
TowneBank strategy. TowneBank has grown its capabilities beyond
banking to provide expertise through its controlled divisions and
subsidiaries that include Towne Wealth Management, Towne Insurance
Agency, Towne Benefits, TowneBank Mortgage, TowneBank Commercial
Mortgage, Berkshire Hathaway HomeServices Towne Realty, Towne 1031
Exchange, LLC, and Towne Vacations. With total assets of
$16.67 billion as of March 31, 2022, TowneBank is one of
the largest banks headquartered in Virginia.
Non-GAAP Financial Measures:This press release
contains certain financial measures determined by methods other
than in accordance with accounting principles generally accepted in
the United States of America (“GAAP”). Such non-GAAP financial
measures include the following: fully tax-equivalent net interest
margin, core operating earnings, core net income, tangible book
value per common share, total risk-based capital ratio, tier one
leverage ratio, tier one capital ratio, and the tangible common
equity to tangible assets ratio. Management uses these non-GAAP
financial measures to assess the performance of TowneBank’s core
business and the strength of its capital position. Management
believes that these non-GAAP financial measures provide meaningful
additional information about TowneBank to assist investors in
evaluating operating results, financial strength, and
capitalization. The non-GAAP financial measures should be
considered as additional views of the way our financial measures
are affected by significant charges for credit costs and other
factors. These non-GAAP financial measures should not be considered
as a substitute for operating results determined in accordance with
GAAP and may not be comparable to other similarly titled measures
of other companies. The computations of the non-GAAP financial
measures used in this presentation are referenced in a footnote or
in the appendix to this presentation.
Forward-Looking Statements:This press release
contains certain forward-looking statements as defined by the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements are not historical facts, but instead represent only the
beliefs, expectations, or opinions of TowneBank and its management
regarding future events, many of which, by their nature, are
inherently uncertain. Forward-looking statements may be identified
by the use of such words as: "believe," "expect," "anticipate,"
"intend," "plan,” "estimate," or words of similar meaning, or
future or conditional terms, such as "will," "would," "should,"
"could," "may," "likely," "probably," or "possibly." These
statements may address issues that involve significant risks,
uncertainties, estimates, and assumptions made by management.
Factors that may cause actual results to differ materially from
those contemplated by such forward-looking statements include the
impacts of the ongoing the impact of the COVID-19 pandemic and the
associated efforts to limit its spread; competitive pressures in
the banking industry that may increase significantly; changes in
the interest rate environment that may reduce margins and/or the
volumes and values of loans made or held as well as the value of
other financial assets held; changes in the credit worthiness of
customers and the possible impairment of the collectability of
loans; general economic conditions, either nationally or
regionally, that may be less favorable than expected, resulting in,
among other things, a deterioration in credit quality and/or a
reduced demand for credit or other services; changes in the
legislative or regulatory environment, including changes in
accounting standards and tax laws, that may adversely affect our
business; costs or difficulties related to the integration of the
businesses we have acquired may be greater than expected; expected
cost savings associated with pending or recently completed
acquisitions may not be fully realized or realized within the
expected time frame; cybersecurity threats or attacks, the
implementation of new technologies, and the ability to develop and
maintain reliable electronic systems; our competitors may have
greater financial resources and develop products that enable them
to compete more successfully; changes in business conditions;
changes in the securities market; and changes in our local economy
with regard to our market area. Any forward-looking statements made
by us or on our behalf speak only as of the date they are made or
as of the date indicated, and we do not undertake any obligation to
update forward-looking statements as a result of new information,
future events, or otherwise. For additional information on factors
that could materially influence forward-looking statements included
in this report, see the "Risk Factors" in TowneBank’s Annual Report
on Form 10-K for the year ended December 31, 2021 and related
disclosures in other filings that have been, or will be, filed by
TowneBank with the Federal Deposit Insurance Corporation.
Media contact:G. Robert Aston,
Jr., Executive Chairman, 757-638-6780J. Morgan Davis, Chief
Executive Officer, 757-673-1673
Investor contact:William B.
Littreal, Chief Financial Officer, 757-638-6813
|
TOWNEBANK |
|
Selected Financial Highlights (unaudited) |
|
(dollars in thousands, except per share data) |
|
|
|
|
| |
|
Three Months Ended |
| |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
| |
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
2021 |
|
|
Income and Performance Ratios: |
|
|
|
|
|
|
|
|
|
|
|
Total Revenue |
$ |
165,412 |
|
|
$ |
160,424 |
|
|
$ |
170,076 |
|
|
$ |
167,321 |
|
|
$ |
182,509 |
|
| |
Net income |
|
46,250 |
|
|
|
41,657 |
|
|
|
52,743 |
|
|
|
58,002 |
|
|
|
72,631 |
|
| |
Net income available to common
shareholders |
|
45,586 |
|
|
|
40,183 |
|
|
|
50,400 |
|
|
|
55,803 |
|
|
|
68,995 |
|
| |
Pre-provision, pre-tax, net
revenues(non-GAAP) |
|
55,369 |
|
|
|
48,483 |
|
|
|
63,647 |
|
|
|
59,728 |
|
|
|
81,578 |
|
| |
Net income per common share -
diluted |
|
0.63 |
|
|
|
0.55 |
|
|
|
0.69 |
|
|
|
0.77 |
|
|
|
0.95 |
|
| |
Book value per common
share |
|
25.61 |
|
|
|
26.13 |
|
|
|
25.91 |
|
|
|
25.51 |
|
|
|
24.78 |
|
| |
Book value per common share -
tangible(non-GAAP) |
|
18.67 |
|
|
|
19.15 |
|
|
|
18.92 |
|
|
|
18.70 |
|
|
|
17.94 |
|
| |
Return on average assets |
|
1.13 |
% |
|
|
0.99 |
% |
|
|
1.27 |
% |
|
|
1.48 |
% |
|
|
1.92 |
% |
| |
Return on average assets -
tangible(non-GAAP) |
|
1.23 |
% |
|
|
1.08 |
% |
|
|
1.37 |
% |
|
|
1.59 |
% |
|
|
2.05 |
% |
| |
Return on average equity |
|
9.73 |
% |
|
|
8.38 |
% |
|
|
10.59 |
% |
|
|
12.21 |
% |
|
|
15.56 |
% |
| |
Return on average equity -
tangible(non-GAAP) |
|
13.91 |
% |
|
|
12.08 |
% |
|
|
15.09 |
% |
|
|
17.38 |
% |
|
|
22.19 |
% |
| |
Return on average common
equity |
|
9.81 |
% |
|
|
8.45 |
% |
|
|
10.68 |
% |
|
|
12.31 |
% |
|
|
15.70 |
% |
| |
Return on average common
equity - tangible(non-GAAP) |
|
14.08 |
% |
|
|
12.22 |
% |
|
|
15.27 |
% |
|
|
17.57 |
% |
|
|
22.45 |
% |
| |
Noninterest income as a
percentage of total revenue |
|
40.03 |
% |
|
|
37.17 |
% |
|
|
40.94 |
% |
|
|
39.55 |
% |
|
|
45.21 |
% |
|
Regulatory Capital Ratios (1): |
|
|
|
|
|
|
|
|
|
| |
Common equity tier 1 |
|
12.16 |
% |
|
|
12.36 |
% |
|
|
12.53 |
% |
|
|
12.42 |
% |
|
|
12.15 |
% |
| |
Tier 1 |
|
12.31 |
% |
|
|
12.51 |
% |
|
|
12.69 |
% |
|
|
12.57 |
% |
|
|
12.30 |
% |
| |
Total |
|
17.34 |
% |
|
|
15.56 |
% |
|
|
15.85 |
% |
|
|
15.76 |
% |
|
|
15.59 |
% |
| |
Tier 1 leverage ratio |
|
9.16 |
% |
|
|
9.11 |
% |
|
|
9.18 |
% |
|
|
9.44 |
% |
|
|
9.54 |
% |
|
Asset Quality: |
|
|
|
|
|
|
|
|
|
| |
Allowance for credit losses on loans to nonperforming loans |
21.52x |
|
17.76x |
|
12.68x |
|
9.67x |
|
9.09x |
| |
Allowance for credit losses on
loans to period end loans |
|
1.05 |
% |
|
|
1.12 |
% |
|
|
1.15 |
% |
|
|
1.15 |
% |
|
|
1.19 |
% |
| |
Allowance for credit losses on
loans to period end loans excluding PPP loans(non-GAAP) |
|
1.06 |
% |
|
|
1.13 |
% |
|
|
1.18 |
% |
|
|
1.22 |
% |
|
|
1.31 |
% |
| |
Nonperforming loans to period
end loans |
|
0.05 |
% |
|
|
0.06 |
% |
|
|
0.09 |
% |
|
|
0.12 |
% |
|
|
0.13 |
% |
| |
Nonperforming assets to period
end assets |
|
0.03 |
% |
|
|
0.06 |
% |
|
|
0.09 |
% |
|
|
0.10 |
% |
|
|
0.11 |
% |
| |
Net charge-offs (recoveries)
to average loans (annualized) |
|
0.01 |
% |
|
|
— |
% |
|
(0.03) % |
|
(0.01) % |
|
|
0.03 |
% |
| |
Net charge-offs
(recoveries) |
$ |
126 |
|
|
$ |
(60 |
) |
|
$ |
(644 |
) |
|
$ |
(137 |
) |
|
$ |
669 |
|
| |
|
|
|
|
|
|
|
|
|
|
| |
Nonperforming loans |
$ |
4,825 |
|
|
$ |
5,973 |
|
|
$ |
8,451 |
|
|
$ |
11,178 |
|
|
$ |
12,768 |
|
| |
Former bank premises |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
750 |
|
| |
Foreclosed property |
|
560 |
|
|
|
4,583 |
|
|
|
5,409 |
|
|
|
4,041 |
|
|
|
3,748 |
|
| |
Total nonperforming
assets |
$ |
5,385 |
|
|
$ |
10,556 |
|
|
$ |
13,860 |
|
|
$ |
15,219 |
|
|
$ |
17,266 |
|
| |
Loans past due 90 days and
still accruing interest |
$ |
40 |
|
|
$ |
372 |
|
|
$ |
143 |
|
|
$ |
1,584 |
|
|
$ |
108 |
|
| |
Allowance for credit losses on
loans |
$ |
103,833 |
|
|
$ |
106,059 |
|
|
$ |
107,177 |
|
|
$ |
108,130 |
|
|
$ |
116,077 |
|
|
Mortgage Banking: |
|
|
|
|
|
|
|
|
|
| |
Loans originated, mortgage |
$ |
583,008 |
|
|
$ |
851,021 |
|
|
$ |
939,272 |
|
|
$ |
1,050,663 |
|
|
$ |
1,187,595 |
|
| |
Loans originated, joint
venture |
|
236,980 |
|
|
|
303,362 |
|
|
|
370,865 |
|
|
|
403,864 |
|
|
|
417,177 |
|
| |
Total loans originated |
$ |
819,988 |
|
|
$ |
1,154,383 |
|
|
$ |
1,310,137 |
|
|
$ |
1,454,527 |
|
|
$ |
1,604,772 |
|
| |
Number of loans
originated |
|
2,237 |
|
|
|
3,408 |
|
|
|
3,917 |
|
|
|
4,514 |
|
|
|
5,164 |
|
| |
Number of originators |
|
207 |
|
|
|
213 |
|
|
|
219 |
|
|
|
222 |
|
|
|
229 |
|
| |
Purchase % |
|
77.93 |
% |
|
|
79.36 |
% |
|
|
77.45 |
% |
|
|
76.95 |
% |
|
|
53.45 |
% |
| |
Loans sold |
$ |
853,808 |
|
|
$ |
1,150,996 |
|
|
$ |
1,394,166 |
|
|
$ |
1,485,057 |
|
|
$ |
1,601,480 |
|
| |
Rate lock asset |
$ |
3,009 |
|
|
$ |
3,455 |
|
|
$ |
6,087 |
|
|
$ |
7,760 |
|
|
$ |
12,522 |
|
| |
Gross realized gain on sales
and fees as a % of loans originated |
|
3.01 |
% |
|
|
3.42 |
% |
|
|
3.61 |
% |
|
|
3.64 |
% |
|
|
4.01 |
% |
|
Other Ratios: |
|
|
|
|
|
|
|
|
|
| |
Net interest margin |
|
2.67 |
% |
|
|
2.70 |
% |
|
|
2.76 |
% |
|
|
2.91 |
% |
|
|
3.04 |
% |
| |
Net interest margin-fully tax
equivalent(non-GAAP) |
|
2.69 |
% |
|
|
2.72 |
% |
|
|
2.77 |
% |
|
|
2.94 |
% |
|
|
3.05 |
% |
| |
Average earning assets/total
average assets |
|
92.24 |
% |
|
|
92.13 |
% |
|
|
91.95 |
% |
|
|
91.97 |
% |
|
|
91.52 |
% |
| |
Average loans/average
deposits |
|
71.61 |
% |
|
|
70.68 |
% |
|
|
71.69 |
% |
|
|
78.22 |
% |
|
|
82.71 |
% |
| |
Average noninterest
deposits/total average deposits |
|
40.49 |
% |
|
|
41.42 |
% |
|
|
40.40 |
% |
|
|
40.21 |
% |
|
|
38.39 |
% |
| |
Period end equity/period end
total assets |
|
11.28 |
% |
|
|
11.71 |
% |
|
|
12.02 |
% |
|
|
11.83 |
% |
|
|
12.04 |
% |
| |
Efficiency ratio(non-GAAP) |
|
64.42 |
% |
|
|
67.03 |
% |
|
|
59.58 |
% |
|
|
61.46 |
% |
|
|
52.11 |
% |
| |
(1) Current
reporting period regulatory capital ratios are preliminary |
|
|
|
|
|
|
|
TOWNEBANK |
|
Selected Data (unaudited) |
|
(dollars in thousands) |
| |
|
|
Time Period |
|
% Change |
| Investment
Securities |
Q1 |
|
Q1 |
|
Q4 |
|
Q1 22 vs. |
|
Q1 22 vs. |
| Available-for-sale
securities, at fair value |
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
|
Q1 21 |
|
Q4 21 |
|
U.S. agency securities |
$ |
338,490 |
|
|
$ |
201,787 |
|
|
$ |
310,587 |
|
|
67.75 |
% |
|
8.98 |
% |
| U.S. Treasury notes |
|
970 |
|
|
|
1,019 |
|
|
|
1,000 |
|
|
(4.81) |
% |
|
(3.00) |
% |
| Municipal securities |
|
400,200 |
|
|
|
334,751 |
|
|
|
385,673 |
|
|
19.55 |
% |
|
3.77 |
% |
| Trust preferred and other
corporate securities |
|
85,792 |
|
|
|
31,241 |
|
|
|
53,950 |
|
|
174.61 |
% |
|
59.02 |
% |
| Mortgage-backed securities
issued by GSE and GNMA |
|
1,022,169 |
|
|
|
849,418 |
|
|
|
1,055,183 |
|
|
20.34 |
% |
|
(3.13) |
% |
| Allowance for credit
losses |
|
(1,081 |
) |
|
|
(210 |
) |
|
|
(210 |
) |
|
414.76 |
% |
|
414.76 |
% |
| Total |
$ |
1,846,540 |
|
|
$ |
1,418,006 |
|
|
$ |
1,806,183 |
|
|
30.22 |
% |
|
2.23 |
% |
| Gross
unrealized gains (losses) reflected in financial
statements |
|
|
|
|
|
|
| Total gross unrealized
gains |
$ |
3,443 |
|
|
$ |
38,751 |
|
|
$ |
32,054 |
|
|
(91.12) |
% |
|
(89.26) |
% |
| Total gross unrealized
losses |
|
(73,758 |
) |
|
|
(10,632 |
) |
|
|
(14,514 |
) |
|
593.74 |
% |
|
408.19 |
% |
| Net unrealized gains (losses)
and other adj. on AFS securities |
$ |
(70,315 |
) |
|
$ |
28,119 |
|
|
$ |
17,540 |
|
|
(350.06) |
% |
|
(500.88) |
% |
| Held-to-maturity
securities, at amortized cost |
|
|
|
|
|
|
|
|
|
| U.S. agency securities |
|
83,004 |
|
|
$ |
— |
|
|
$ |
73,360 |
|
|
N/M |
|
13.15 |
% |
| U.S. Treasury notes |
|
336,193 |
|
|
|
— |
|
|
|
66,326 |
|
|
N/M |
|
406.88 |
% |
| Municipal securities |
|
5,116 |
|
|
|
5,032 |
|
|
|
5,095 |
|
|
1.67 |
% |
|
0.41 |
% |
| Trust preferred corporate
securities |
|
2,260 |
|
|
|
2,309 |
|
|
|
2,272 |
|
|
(2.12) |
% |
|
(0.53) |
% |
| Mortgage-backed securities
issued by GSE and GNMA |
|
6,811 |
|
|
|
8,639 |
|
|
|
7,168 |
|
|
(21.16) |
% |
|
(4.98) |
% |
| Allowance for credit
losses |
|
(92 |
) |
|
|
(97 |
) |
|
|
(94 |
) |
|
(5.15) |
% |
|
(2.13) |
% |
| Total |
$ |
433,292 |
|
|
$ |
15,883 |
|
|
$ |
154,127 |
|
|
2,628.02 |
% |
|
181.13 |
% |
| Gross
unrealized gains (losses) not reflected in financial
statements |
|
|
|
|
|
|
|
|
| Total gross unrealized
gains |
$ |
714 |
|
|
$ |
1,598 |
|
|
$ |
1,561 |
|
|
(55.32) |
% |
|
(54.26) |
% |
| Total gross unrealized
losses |
|
(11,915 |
) |
|
|
— |
|
|
|
(106 |
) |
|
— |
% |
|
— |
% |
| Net unrealized gains (losses)
in HTM securities |
$ |
(11,201 |
) |
|
$ |
1,598 |
|
|
$ |
1,455 |
|
|
(800.94) |
% |
|
(869.83) |
% |
| |
| Loans Held For
Investment(1) |
Q1 |
|
Q1 |
|
Q4 |
|
Q1 22 vs. |
|
Q1 22 vs. |
| |
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
|
Q1 21 |
|
Q4 21 |
| Real estate - construction and
development |
$ |
1,236,294 |
|
|
$ |
1,031,267 |
|
|
$ |
1,125,863 |
|
|
19.88 |
% |
|
9.81 |
% |
| Commercial real estate - owner
occupied |
|
1,561,117 |
|
|
|
1,439,412 |
|
|
|
1,494,000 |
|
|
8.46 |
% |
|
4.49 |
% |
| Commercial real estate - non
owner occupied |
|
2,697,929 |
|
|
|
2,477,315 |
|
|
|
2,620,334 |
|
|
8.91 |
% |
|
2.96 |
% |
| Real estate - multifamily |
|
339,220 |
|
|
|
360,125 |
|
|
|
332,659 |
|
|
(5.80) |
% |
|
1.97 |
% |
| Residential 1-4 family |
|
1,392,052 |
|
|
|
1,173,761 |
|
|
|
1,305,915 |
|
|
18.60 |
% |
|
6.60 |
% |
| HELOC |
|
376,480 |
|
|
|
400,314 |
|
|
|
380,834 |
|
|
(5.95) |
% |
|
(1.14) |
% |
|
Commercial and industrial business (C&I) |
|
1,212,973 |
|
|
|
2,005,558 |
|
|
|
1,206,911 |
|
|
(39.52) |
% |
|
0.50 |
% |
|
Government |
|
518,839 |
|
|
|
398,579 |
|
|
|
525,358 |
|
|
30.17 |
% |
|
(1.24) |
% |
|
Indirect |
|
485,620 |
|
|
|
278,567 |
|
|
|
394,802 |
|
|
74.33 |
% |
|
23.00 |
% |
| Consumer loans and other |
|
88,784 |
|
|
|
169,685 |
|
|
|
119,576 |
|
|
(47.68) |
% |
|
(25.75) |
% |
| Total |
$ |
9,909,308 |
|
|
$ |
9,734,583 |
|
|
$ |
9,506,252 |
|
|
1.79 |
% |
|
4.24 |
% |
| (1) Paycheck
Protection Program loans totaling $0.08 billion,
$0.90 billion, and $0.16 billion, primarily in C&I,
are included in Q1 22, Q1 21, and Q4 21, respectively. |
| |
| Deposits |
Q1 |
|
Q1 |
|
Q4 |
|
Q1 22 vs. |
|
Q1 22 vs. |
| |
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
|
Q1 21 |
|
Q4 21 |
| Noninterest-bearing
demand |
$ |
5,532,337 |
|
|
$ |
4,840,678 |
|
|
$ |
5,546,665 |
|
|
14.29 |
% |
|
(0.26) |
% |
| Interest-bearing: |
|
|
|
|
|
|
|
|
|
|
Demand and money market accounts |
|
6,432,005 |
|
|
|
5,062,461 |
|
|
|
6,139,714 |
|
|
27.05 |
% |
|
4.76 |
% |
|
Savings |
|
393,119 |
|
|
|
342,554 |
|
|
|
371,356 |
|
|
14.76 |
% |
|
5.86 |
% |
|
Certificates of deposits |
|
1,414,339 |
|
|
|
1,893,951 |
|
|
|
1,515,891 |
|
|
(25.32) |
% |
|
(6.70) |
% |
| Total |
$ |
13,771,800 |
|
|
$ |
12,139,644 |
|
|
$ |
13,573,626 |
|
|
13.44 |
% |
|
1.46 |
% |
|
TOWNEBANK |
|
Average Balances, Yields and Rate Paid
(unaudited) |
|
(dollars in thousands) |
|
|
| |
Three Months Ended |
|
Three Months Ended |
|
Three Months Ended |
| |
March 31, 2022 |
|
December 31, 2021 |
|
March 31, 2021 |
| |
|
|
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 incomeand deferred costs), (1)(2) |
$ |
9,668,724 |
|
|
$ |
95,596 |
|
|
4.01 |
% |
|
$ |
9,372,187 |
|
|
$ |
95,696 |
|
|
4.05 |
% |
|
$ |
9,660,111 |
|
|
$ |
101,960 |
|
|
4.28 |
% |
|
Taxable investment securities |
|
2,059,614 |
|
|
|
9,013 |
|
|
1.75 |
% |
|
|
1,625,683 |
|
|
|
10,217 |
|
|
2.51 |
% |
|
|
1,303,535 |
|
|
|
6,604 |
|
|
2.03 |
% |
|
Tax-exempt investment securities |
|
110,698 |
|
|
|
680 |
|
|
2.46 |
% |
|
|
157,855 |
|
|
|
292 |
|
|
0.74 |
% |
|
|
139,859 |
|
|
|
542 |
|
|
1.55 |
% |
| Total securities |
|
2,170,312 |
|
|
|
9,693 |
|
|
1.79 |
% |
|
|
1,783,538 |
|
|
|
10,509 |
|
|
2.36 |
% |
|
|
1,443,394 |
|
|
|
7,146 |
|
|
1.98 |
% |
| Interest-bearing deposits |
|
2,929,929 |
|
|
|
1,347 |
|
|
0.19 |
% |
|
|
3,274,392 |
|
|
|
1,215 |
|
|
0.15 |
% |
|
|
1,715,110 |
|
|
|
416 |
|
|
0.10 |
% |
| Loans held for sale |
|
276,448 |
|
|
|
2,375 |
|
|
3.44 |
% |
|
|
379,808 |
|
|
|
2,750 |
|
|
2.90 |
% |
|
|
536,997 |
|
|
|
3,361 |
|
|
2.50 |
% |
|
Total earning assets |
|
15,045,413 |
|
|
|
109,011 |
|
|
2.94 |
% |
|
|
14,809,925 |
|
|
|
110,170 |
|
|
2.95 |
% |
|
|
13,355,612 |
|
|
|
112,883 |
|
|
3.42 |
% |
| Less: allowance for credit
losses |
|
(106,172 |
) |
|
|
|
|
|
|
(107,215 |
) |
|
|
|
|
|
|
(120,934 |
) |
|
|
|
|
| Total nonearning assets |
|
1,372,757 |
|
|
|
|
|
|
|
1,372,799 |
|
|
|
|
|
|
|
1,357,738 |
|
|
|
|
|
|
Total assets |
$ |
16,311,998 |
|
|
|
|
|
|
$ |
16,075,509 |
|
|
|
|
|
|
$ |
14,592,416 |
|
|
|
|
|
| Liabilities and
Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest-bearing deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand and money market |
$ |
6,178,217 |
|
|
$ |
2,262 |
|
|
0.15 |
% |
|
$ |
5,853,873 |
|
|
$ |
2,148 |
|
|
0.15 |
% |
|
$ |
4,904,885 |
|
|
$ |
2,075 |
|
|
0.17 |
% |
|
Savings |
|
382,839 |
|
|
|
511 |
|
|
0.54 |
% |
|
|
371,901 |
|
|
|
534 |
|
|
0.57 |
% |
|
|
332,006 |
|
|
|
522 |
|
|
0.64 |
% |
|
Certificates of deposit |
|
1,472,942 |
|
|
|
2,121 |
|
|
0.58 |
% |
|
|
1,541,483 |
|
|
|
2,707 |
|
|
0.70 |
% |
|
|
1,959,225 |
|
|
|
5,951 |
|
|
1.23 |
% |
| Total interest-bearing
deposits |
|
8,033,998 |
|
|
|
4,894 |
|
|
0.25 |
% |
|
|
7,767,257 |
|
|
|
5,389 |
|
|
0.28 |
% |
|
|
7,196,116 |
|
|
|
8,548 |
|
|
0.48 |
% |
| Borrowings |
|
135,775 |
|
|
|
137 |
|
|
0.40 |
% |
|
|
245,622 |
|
|
|
360 |
|
|
0.58 |
% |
|
|
562,451 |
|
|
|
822 |
|
|
0.58 |
% |
| Subordinated debt, net |
|
386,934 |
|
|
|
4,120 |
|
|
4.26 |
% |
|
|
249,555 |
|
|
|
2,962 |
|
|
4.75 |
% |
|
|
249,114 |
|
|
|
2,930 |
|
|
4.70 |
% |
|
Total interest-bearing liabilities |
|
8,556,707 |
|
|
|
9,151 |
|
|
0.43 |
% |
|
|
8,262,434 |
|
|
|
8,711 |
|
|
0.42 |
% |
|
|
8,007,681 |
|
|
|
12,300 |
|
|
0.62 |
% |
| Demand deposits |
|
5,467,153 |
|
|
|
|
|
|
|
5,492,894 |
|
|
|
|
|
|
|
4,483,444 |
|
|
|
|
|
| Other noninterest-bearing
liabilities |
|
387,871 |
|
|
|
|
|
|
|
417,707 |
|
|
|
|
|
|
|
303,524 |
|
|
|
|
|
|
Total liabilities |
|
14,411,731 |
|
|
|
|
|
|
|
14,173,035 |
|
|
|
|
|
|
|
12,794,649 |
|
|
|
|
|
| Shareholders’ equity |
|
1,900,267 |
|
|
|
|
|
|
|
1,902,474 |
|
|
|
|
|
|
|
1,797,767 |
|
|
|
|
|
| Total liabilities and
equity |
$ |
16,311,998 |
|
|
|
|
|
|
$ |
16,075,509 |
|
|
|
|
|
|
$ |
14,592,416 |
|
|
|
|
|
| Net interest income
(tax-equivalent basis) |
|
|
$ |
99,860 |
|
|
|
|
|
|
$ |
101,459 |
|
|
|
|
|
|
$ |
100,583 |
|
|
|
|
Reconciliation of Non-GAAP Financial Measures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax-equivalent basis adjustment |
|
|
|
(656 |
) |
|
|
|
|
|
|
(667 |
) |
|
|
|
|
|
|
(593 |
) |
|
|
| Net interest income
(GAAP) |
|
|
$ |
99,204 |
|
|
|
|
|
|
$ |
100,792 |
|
|
|
|
|
|
$ |
99,990 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest rate spread
(3)(4) |
|
|
|
|
2.51 |
% |
|
|
|
|
|
2.53 |
% |
|
|
|
|
|
2.80 |
% |
| Interest expense
as a percent of average earning assets |
|
|
|
0.25 |
% |
|
|
|
|
|
0.23 |
% |
|
|
|
|
|
0.37 |
% |
| Net interest
margin (tax equivalent basis) (4)(5) |
|
|
|
2.69 |
% |
|
|
|
|
|
2.72 |
% |
|
|
|
|
|
3.05 |
% |
| Total cost of deposits |
|
|
|
|
0.15 |
% |
|
|
|
|
|
0.16 |
% |
|
|
|
|
|
0.30 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Average loans balances for December 31, 2021 and March 31,
2021 and related yields have been restated to include, previously
excluded, nonaccrual loans of $7.69 million and $12.98 million,
respectively.(2) March 31, 2022, March 31, 2021, and
December 31, 2021 includes average PPP balances of
$0.12 billion, $0.81 billion and $0.20 billion, and
related interest and fee income of $2.10 million,
$11.63 million, and $3.85 million, respectively.(3)
Interest spread is the average yield earned on earning assets less
the average rate paid on interest-bearing liabilities. Fully tax
equivalent.(4) Net interest margin is net interest income expressed
as a percentage of average earning assets. Fully tax equivalent.(5)
Non-GAAP.
|
TOWNEBANK |
|
Consolidated Balance Sheets |
|
(dollars in thousands, except share data) |
|
|
|
| |
|
|
| |
March 31, |
|
December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
| |
(unaudited) |
|
(audited) |
|
ASSETS |
|
|
|
| Cash and due from banks |
$ |
74,991 |
|
|
$ |
17,373 |
|
| Interest-bearing deposits at
FRB - Richmond |
|
2,857,327 |
|
|
|
3,244,484 |
|
| Interest-bearing deposits in
financial institutions |
|
34,684 |
|
|
|
34,779 |
|
|
Total Cash and Cash Equivalents |
|
2,967,002 |
|
|
|
3,296,636 |
|
| Securities available for sale,
at fair value (amortized cost of $1,917,936 and $1,788,853, and
allowance for credit losses of $1,081 and $210 at March 31,
2022 and December 31, 2021, respectively.) |
|
1,846,540 |
|
|
|
1,806,183 |
|
| Securities held to maturity,
at amortized cost (fair value $422,183 and $155,676 at
March 31, 2022 and December 31, 2021, respectively.) |
|
433,384 |
|
|
|
154,221 |
|
|
Less: allowance for credit losses |
|
(92 |
) |
|
|
(94 |
) |
|
Securities held to maturity, net of allowance for credit
losses |
|
433,292 |
|
|
|
154,127 |
|
| Other equity securities |
|
6,789 |
|
|
|
6,759 |
|
| FHLB stock |
|
10,432 |
|
|
|
13,146 |
|
|
Total Securities |
|
2,297,053 |
|
|
|
1,980,215 |
|
| Mortgage loans held for
sale |
|
234,620 |
|
|
|
358,303 |
|
| Loans, net of unearned income
and deferred costs |
|
9,909,308 |
|
|
|
9,506,252 |
|
|
Less: allowance for credit losses |
|
(103,833 |
) |
|
|
(106,059 |
) |
|
Net Loans |
|
9,805,475 |
|
|
|
9,400,193 |
|
| Premises and equipment,
net |
|
277,764 |
|
|
|
270,772 |
|
| Goodwill |
|
457,162 |
|
|
|
457,187 |
|
| Other intangible assets,
net |
|
47,562 |
|
|
|
50,379 |
|
| BOLI |
|
253,112 |
|
|
|
251,805 |
|
| Other assets |
|
326,838 |
|
|
|
295,897 |
|
|
TOTAL ASSETS |
$ |
16,666,588 |
|
|
$ |
16,361,387 |
|
| |
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
| Deposits: |
|
|
|
|
Noninterest-bearing demand |
$ |
5,532,337 |
|
|
$ |
5,546,665 |
|
|
Interest-bearing: |
|
|
|
|
Demand and money market accounts |
|
6,432,005 |
|
|
|
6,139,714 |
|
|
Savings |
|
393,119 |
|
|
|
371,356 |
|
|
Certificates of deposit |
|
1,414,339 |
|
|
|
1,515,891 |
|
|
Total Deposits |
|
13,771,800 |
|
|
|
13,573,626 |
|
| Advances from the FHLB |
|
55,196 |
|
|
|
155,367 |
|
| Subordinated debt, net |
|
496,757 |
|
|
|
249,652 |
|
| FRB PPP lending facility |
|
— |
|
|
|
— |
|
| Repurchase agreements and
other borrowings |
|
75,988 |
|
|
|
76,797 |
|
|
Total Borrowings |
|
627,941 |
|
|
|
481,816 |
|
| Other liabilities |
|
387,087 |
|
|
|
389,771 |
|
|
TOTAL LIABILITIES |
|
14,786,828 |
|
|
|
14,445,213 |
|
| Preferred stock, authorized
and unissued shares - 2,000,000 |
|
— |
|
|
|
— |
|
| Common stock, $1.667 par:
150,000,000 shares authorized |
|
|
|
|
72,724,275 and 72,683,985 shares issued at |
|
|
|
|
March 31, 2022 and December 31, 2021, respectively |
|
121,231 |
|
|
|
121,164 |
|
| Capital surplus |
|
1,050,387 |
|
|
|
1,050,948 |
|
| Retained earnings |
|
747,614 |
|
|
|
716,605 |
|
| Common stock issued to
deferred compensation trust, at cost |
|
|
|
|
910,304 and 911,458 shares at March 31, 2022 and
December 31, 2021, respectively |
|
(18,323 |
) |
|
|
(18,257 |
) |
| Deferred compensation
trust |
|
18,323 |
|
|
|
18,257 |
|
| Accumulated other
comprehensive income (loss) |
|
(56,712 |
) |
|
|
10,597 |
|
|
TOTAL SHAREHOLDERS’ EQUITY |
|
1,862,520 |
|
|
|
1,899,314 |
|
| Noncontrolling interest |
|
17,240 |
|
|
|
16,860 |
|
|
TOTAL EQUITY |
|
1,879,760 |
|
|
|
1,916,174 |
|
|
TOTAL LIABILITIES AND EQUITY |
$ |
16,666,588 |
|
|
$ |
16,361,387 |
|
| |
|
TOWNEBANK |
|
Consolidated Statements of Income (unaudited) |
|
(dollars in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
| |
Three Months Ended |
| |
March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
| INTEREST
INCOME: |
|
|
|
|
Loans, including fees |
$ |
94,962 |
|
|
$ |
101,396 |
|
|
Investment securities |
|
9,671 |
|
|
|
7,117 |
|
|
Interest-bearing deposits in financial institutions and federal
funds sold |
|
1,347 |
|
|
|
416 |
|
|
Mortgage loans held for sale |
|
2,375 |
|
|
|
3,361 |
|
|
Total interest income |
|
108,355 |
|
|
|
112,290 |
|
| INTEREST
EXPENSE: |
|
|
|
|
Deposits |
|
4,894 |
|
|
|
8,548 |
|
|
Advances from the FHLB |
|
92 |
|
|
|
497 |
|
|
Subordinated debt, net |
|
4,120 |
|
|
|
2,930 |
|
|
Repurchase agreements and other borrowings |
|
45 |
|
|
|
325 |
|
|
Total interest expense |
|
9,151 |
|
|
|
12,300 |
|
| Net interest
income |
|
99,204 |
|
|
|
99,990 |
|
| PROVISION FOR CREDIT
LOSSES |
|
(1,449 |
) |
|
|
(4,027 |
) |
|
Net interest income after provision for credit
losses |
|
100,653 |
|
|
|
104,017 |
|
| NONINTEREST
INCOME: |
|
|
|
|
Residential mortgage banking income, net |
|
14,638 |
|
|
|
37,412 |
|
|
Insurance commissions and other title fees and income, net |
|
19,074 |
|
|
|
16,325 |
|
|
Property management income, net |
|
17,147 |
|
|
|
15,483 |
|
|
Real estate commission income, net |
|
2,554 |
|
|
|
2,451 |
|
|
Service charges on deposit accounts |
|
2,574 |
|
|
|
2,190 |
|
|
Credit card merchant fees, net |
|
1,375 |
|
|
|
1,302 |
|
|
BOLI |
|
1,717 |
|
|
|
1,519 |
|
|
Other income |
|
7,129 |
|
|
|
4,837 |
|
|
Net gain/(loss) on investment securities |
|
— |
|
|
|
1,000 |
|
|
Total noninterest income |
|
66,208 |
|
|
|
82,519 |
|
| NONINTEREST
EXPENSE: |
|
|
|
|
Salaries and employee benefits |
|
63,963 |
|
|
|
58,435 |
|
|
Occupancy expense |
|
8,327 |
|
|
|
8,072 |
|
|
Furniture and equipment |
|
3,690 |
|
|
|
3,512 |
|
|
Amortization - intangibles |
|
2,817 |
|
|
|
2,723 |
|
|
Software expense |
|
4,492 |
|
|
|
4,194 |
|
|
Data processing |
|
3,594 |
|
|
|
3,239 |
|
|
Professional fees |
|
2,027 |
|
|
|
2,339 |
|
|
Advertising and marketing |
|
4,127 |
|
|
|
2,968 |
|
|
Other expenses |
|
16,342 |
|
|
|
11,844 |
|
|
Total noninterest expense |
|
109,379 |
|
|
|
97,326 |
|
| Income before income
tax expense and noncontrolling interest |
|
57,482 |
|
|
|
89,210 |
|
| Provision for income tax
expense |
|
11,232 |
|
|
|
16,579 |
|
| Net
income |
$ |
46,250 |
|
|
$ |
72,631 |
|
| Net income attributable to
noncontrolling interest |
|
(664 |
) |
|
|
(3,636 |
) |
| Net income
attributable to TowneBank |
$ |
45,586 |
|
|
$ |
68,995 |
|
| Per common share
information |
|
|
|
|
Basic earnings |
$ |
0.63 |
|
|
$ |
0.95 |
|
|
Diluted earnings |
$ |
0.63 |
|
|
$ |
0.95 |
|
|
Cash dividends declared |
$ |
0.20 |
|
|
$ |
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, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
2021 |
|
| |
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(audited) |
|
(unaudited) |
|
ASSETS |
|
|
|
|
|
|
|
|
|
| Cash and due from banks |
$ |
74,991 |
|
|
$ |
17,373 |
|
|
$ |
75,370 |
|
|
$ |
117,797 |
|
|
$ |
141,545 |
|
| Interest-bearing deposits at
FRB - Richmond |
|
2,857,327 |
|
|
|
3,244,484 |
|
|
|
3,155,039 |
|
|
|
2,970,490 |
|
|
|
1,936,458 |
|
| Interest-bearing deposits in
financial institutions |
|
34,684 |
|
|
|
34,779 |
|
|
|
33,506 |
|
|
|
31,971 |
|
|
|
30,031 |
|
|
Total Cash and Cash Equivalents |
|
2,967,002 |
|
|
|
3,296,636 |
|
|
|
3,263,915 |
|
|
|
3,120,258 |
|
|
|
2,108,034 |
|
| Securities available for
sale |
|
1,846,540 |
|
|
|
1,806,183 |
|
|
|
1,560,402 |
|
|
|
1,454,421 |
|
|
|
1,418,006 |
|
| Securities held to
maturity |
|
433,384 |
|
|
|
154,221 |
|
|
|
14,898 |
|
|
|
15,389 |
|
|
|
15,980 |
|
|
Less: allowance for credit losses |
|
(92 |
) |
|
|
(94 |
) |
|
|
(94 |
) |
|
|
(97 |
) |
|
|
(97 |
) |
|
Securities held to maturity, net of allowance for credit
losses |
|
433,292 |
|
|
|
154,127 |
|
|
|
14,804 |
|
|
|
15,292 |
|
|
|
15,883 |
|
| Other equity securities |
|
6,789 |
|
|
|
6,759 |
|
|
|
6,621 |
|
|
|
6,395 |
|
|
|
6,355 |
|
| FHLB stock |
|
10,432 |
|
|
|
13,146 |
|
|
|
13,146 |
|
|
|
16,909 |
|
|
|
16,909 |
|
|
Total Securities |
|
2,297,053 |
|
|
|
1,980,215 |
|
|
|
1,594,973 |
|
|
|
1,493,017 |
|
|
|
1,457,153 |
|
| Mortgage loans held for
sale |
|
234,620 |
|
|
|
358,303 |
|
|
|
431,846 |
|
|
|
554,447 |
|
|
|
582,905 |
|
| Loans, net of unearned income
and deferred costs |
|
9,909,308 |
|
|
|
9,506,252 |
|
|
|
9,297,565 |
|
|
|
9,423,578 |
|
|
|
9,734,583 |
|
|
Less: allowance for credit losses |
|
(103,833 |
) |
|
|
(106,059 |
) |
|
|
(107,177 |
) |
|
|
(108,130 |
) |
|
|
(116,077 |
) |
|
Net Loans |
|
9,805,475 |
|
|
|
9,400,193 |
|
|
|
9,190,388 |
|
|
|
9,315,448 |
|
|
|
9,618,506 |
|
| Premises and equipment,
net |
|
277,764 |
|
|
|
270,772 |
|
|
|
270,810 |
|
|
|
265,644 |
|
|
|
261,831 |
|
| Goodwill |
|
457,162 |
|
|
|
457,187 |
|
|
|
457,187 |
|
|
|
452,328 |
|
|
|
452,328 |
|
| Other intangible assets,
net |
|
47,562 |
|
|
|
50,379 |
|
|
|
50,839 |
|
|
|
42,271 |
|
|
|
44,808 |
|
| BOLI |
|
253,112 |
|
|
|
251,805 |
|
|
|
249,862 |
|
|
|
249,213 |
|
|
|
247,655 |
|
| Other assets |
|
326,838 |
|
|
|
295,897 |
|
|
|
301,552 |
|
|
|
311,209 |
|
|
|
306,176 |
|
|
TOTAL ASSETS |
$ |
16,666,588 |
|
|
$ |
16,361,387 |
|
|
$ |
15,811,372 |
|
|
$ |
15,803,835 |
|
|
$ |
15,079,396 |
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
| Deposits: |
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing demand |
$ |
5,532,337 |
|
|
$ |
5,546,665 |
|
|
$ |
5,394,952 |
|
|
$ |
5,243,074 |
|
|
$ |
4,840,678 |
|
|
Interest-bearing: |
|
|
|
|
|
|
|
|
|
|
Demand and money market accounts |
|
6,432,005 |
|
|
|
6,139,714 |
|
|
|
5,681,181 |
|
|
|
5,373,146 |
|
|
|
5,062,461 |
|
|
Savings |
|
393,119 |
|
|
|
371,356 |
|
|
|
366,165 |
|
|
|
349,552 |
|
|
|
342,554 |
|
|
Certificates of deposit |
|
1,414,339 |
|
|
|
1,515,891 |
|
|
|
1,571,752 |
|
|
|
1,998,828 |
|
|
|
1,893,951 |
|
|
Total Deposits |
|
13,771,800 |
|
|
|
13,573,626 |
|
|
|
13,014,050 |
|
|
|
12,964,600 |
|
|
|
12,139,644 |
|
| Advances from the FHLB |
|
55,196 |
|
|
|
155,367 |
|
|
|
155,537 |
|
|
|
255,706 |
|
|
|
255,872 |
|
| Subordinated debt, net |
|
496,757 |
|
|
|
249,652 |
|
|
|
249,503 |
|
|
|
249,353 |
|
|
|
249,204 |
|
| FRB PPP lending facility |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
183,164 |
|
| Repurchase agreements and
other borrowings |
|
75,988 |
|
|
|
76,797 |
|
|
|
82,413 |
|
|
|
85,042 |
|
|
|
68,509 |
|
|
Total Borrowings |
|
627,941 |
|
|
|
481,816 |
|
|
|
487,453 |
|
|
|
590,101 |
|
|
|
756,749 |
|
| Other liabilities |
|
387,087 |
|
|
|
389,771 |
|
|
|
409,435 |
|
|
|
379,278 |
|
|
|
366,697 |
|
|
TOTAL LIABILITIES |
|
14,786,828 |
|
|
|
14,445,213 |
|
|
|
13,910,938 |
|
|
|
13,933,979 |
|
|
|
13,263,090 |
|
| Preferred stock |
|
|
|
|
|
|
|
|
|
|
Authorized shares - 2,000,000 |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| Common stock, $1.667 par
value |
|
121,231 |
|
|
|
121,164 |
|
|
|
121,163 |
|
|
|
121,144 |
|
|
|
121,108 |
|
| Capital surplus |
|
1,050,387 |
|
|
|
1,050,948 |
|
|
|
1,049,367 |
|
|
|
1,048,332 |
|
|
|
1,047,312 |
|
| Retained earnings |
|
747,614 |
|
|
|
716,605 |
|
|
|
690,960 |
|
|
|
655,095 |
|
|
|
613,826 |
|
| Common stock issued to
deferred compensation |
|
|
|
|
|
|
|
|
|
|
trust, at cost |
|
(18,323 |
) |
|
|
(18,257 |
) |
|
|
(18,076 |
) |
|
|
(18,076 |
) |
|
|
(17,063 |
) |
| Deferred compensation
trust |
|
18,323 |
|
|
|
18,257 |
|
|
|
18,076 |
|
|
|
18,076 |
|
|
|
17,063 |
|
| Accumulated other
comprehensive income (loss) |
|
(56,712 |
) |
|
|
10,597 |
|
|
|
21,597 |
|
|
|
29,273 |
|
|
|
17,969 |
|
|
TOTAL SHAREHOLDERS’ EQUITY |
|
1,862,520 |
|
|
|
1,899,314 |
|
|
|
1,883,087 |
|
|
|
1,853,844 |
|
|
|
1,800,215 |
|
| Noncontrolling interest |
|
17,240 |
|
|
|
16,860 |
|
|
|
17,347 |
|
|
|
16,012 |
|
|
|
16,091 |
|
|
TOTAL EQUITY |
|
1,879,760 |
|
|
|
1,916,174 |
|
|
|
1,900,434 |
|
|
|
1,869,856 |
|
|
|
1,816,306 |
|
|
TOTAL LIABILITIES AND EQUITY |
$ |
16,666,588 |
|
|
$ |
16,361,387 |
|
|
$ |
15,811,372 |
|
|
$ |
15,803,835 |
|
|
$ |
15,079,396 |
|
|
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, |
|
| |
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
2021 |
|
|
| INTEREST
INCOME: |
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
$ |
94,962 |
|
|
$ |
95,054 |
|
|
$ |
98,258 |
|
|
$ |
100,614 |
|
|
$ |
101,396 |
|
|
|
Investment securities |
|
9,671 |
|
|
|
10,484 |
|
|
|
7,000 |
|
|
|
6,871 |
|
|
|
7,117 |
|
|
|
Interest-bearing deposits in financial institutions and federal
funds sold |
|
1,347 |
|
|
|
1,215 |
|
|
|
1,182 |
|
|
|
619 |
|
|
|
416 |
|
|
|
Mortgage loans held for sale |
|
2,375 |
|
|
|
2,750 |
|
|
|
3,405 |
|
|
|
3,711 |
|
|
|
3,361 |
|
|
|
Total interest income |
|
108,355 |
|
|
|
109,503 |
|
|
|
109,845 |
|
|
|
111,815 |
|
|
|
112,290 |
|
|
| INTEREST
EXPENSE: |
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
4,894 |
|
|
|
5,389 |
|
|
|
6,028 |
|
|
|
7,144 |
|
|
|
8,548 |
|
|
|
Advances from the FHLB |
|
92 |
|
|
|
206 |
|
|
|
247 |
|
|
|
274 |
|
|
|
497 |
|
|
|
Subordinated debt |
|
4,120 |
|
|
|
2,962 |
|
|
|
2,962 |
|
|
|
2,962 |
|
|
|
2,930 |
|
|
|
Repurchase agreements and other borrowings |
|
45 |
|
|
|
154 |
|
|
|
165 |
|
|
|
291 |
|
|
|
325 |
|
|
|
Total interest expense |
|
9,151 |
|
|
|
8,711 |
|
|
|
9,402 |
|
|
|
10,671 |
|
|
|
12,300 |
|
|
| Net interest
income |
|
99,204 |
|
|
|
100,792 |
|
|
|
100,443 |
|
|
|
101,144 |
|
|
|
99,990 |
|
|
| PROVISION FOR CREDIT
LOSSES |
|
(1,449 |
) |
|
|
(1,110 |
) |
|
|
(1,582 |
) |
|
|
(10,055 |
) |
|
|
(4,027 |
) |
|
|
Net interest income after provision for credit
losses |
|
100,653 |
|
|
|
101,902 |
|
|
|
102,025 |
|
|
|
111,199 |
|
|
|
104,017 |
|
|
| NONINTEREST
INCOME: |
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage banking income, net |
|
14,638 |
|
|
|
20,945 |
|
|
|
25,422 |
|
|
|
25,524 |
|
|
|
37,412 |
|
|
|
Insurance commissions and other title fees and income, net |
|
19,074 |
|
|
|
15,486 |
|
|
|
17,398 |
|
|
|
18,331 |
|
|
|
16,325 |
|
|
|
Property management income, net |
|
17,147 |
|
|
|
9,099 |
|
|
|
10,502 |
|
|
|
7,091 |
|
|
|
15,483 |
|
|
|
Real estate commission income, net |
|
2,554 |
|
|
|
3,165 |
|
|
|
3,781 |
|
|
|
3,893 |
|
|
|
2,451 |
|
|
|
Service charges on deposit accounts |
|
2,574 |
|
|
|
2,479 |
|
|
|
2,524 |
|
|
|
2,391 |
|
|
|
2,190 |
|
|
|
Credit card merchant fees, net |
|
1,375 |
|
|
|
1,412 |
|
|
|
1,660 |
|
|
|
1,667 |
|
|
|
1,302 |
|
|
|
BOLI |
|
1,717 |
|
|
|
1,904 |
|
|
|
2,301 |
|
|
|
1,541 |
|
|
|
1,519 |
|
|
|
Other income |
|
7,129 |
|
|
|
5,142 |
|
|
|
6,045 |
|
|
|
5,487 |
|
|
|
4,837 |
|
|
|
Net gain/(loss) on investment securities |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
252 |
|
|
|
1,000 |
|
|
|
Total noninterest income |
|
66,208 |
|
|
|
59,632 |
|
|
|
69,633 |
|
|
|
66,177 |
|
|
|
82,519 |
|
|
| NONINTEREST
EXPENSE: |
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
63,963 |
|
|
|
64,814 |
|
|
|
61,230 |
|
|
|
61,365 |
|
|
|
58,435 |
|
|
|
Occupancy expense |
|
8,327 |
|
|
|
8,371 |
|
|
|
7,656 |
|
|
|
7,559 |
|
|
|
8,072 |
|
|
|
Furniture and equipment |
|
3,690 |
|
|
|
3,528 |
|
|
|
3,513 |
|
|
|
3,622 |
|
|
|
3,512 |
|
|
|
Amortization - intangibles |
|
2,817 |
|
|
|
2,935 |
|
|
|
2,750 |
|
|
|
2,719 |
|
|
|
2,723 |
|
|
|
Software expense |
|
4,492 |
|
|
|
4,014 |
|
|
|
4,209 |
|
|
|
4,494 |
|
|
|
4,194 |
|
|
|
Data processing |
|
3,594 |
|
|
|
3,524 |
|
|
|
3,603 |
|
|
|
3,414 |
|
|
|
3,239 |
|
|
|
Professional fees |
|
2,027 |
|
|
|
2,723 |
|
|
|
2,227 |
|
|
|
2,259 |
|
|
|
2,339 |
|
|
|
Advertising and marketing |
|
4,127 |
|
|
|
3,414 |
|
|
|
3,865 |
|
|
|
3,257 |
|
|
|
2,968 |
|
|
|
Other expenses |
|
16,342 |
|
|
|
17,144 |
|
|
|
15,033 |
|
|
|
16,705 |
|
|
|
11,844 |
|
|
|
Total noninterest expense |
|
109,379 |
|
|
|
110,467 |
|
|
|
104,086 |
|
|
|
105,394 |
|
|
|
97,326 |
|
|
|
Income before income tax expense and noncontrolling
interest |
|
57,482 |
|
|
|
51,067 |
|
|
|
67,572 |
|
|
|
71,982 |
|
|
|
89,210 |
|
|
| Provision for income tax
expense |
|
11,232 |
|
|
|
9,410 |
|
|
|
14,829 |
|
|
|
13,980 |
|
|
|
16,579 |
|
|
| Net
income |
|
46,250 |
|
|
|
41,657 |
|
|
|
52,743 |
|
|
|
58,002 |
|
|
|
72,631 |
|
|
| Net income attributable to
noncontrolling interest |
|
(664 |
) |
|
|
(1,474 |
) |
|
|
(2,343 |
) |
|
|
(2,199 |
) |
|
|
(3,636 |
) |
|
| Net income
attributable to TowneBank |
$ |
45,586 |
|
|
$ |
40,183 |
|
|
$ |
50,400 |
|
|
$ |
55,803 |
|
|
$ |
68,995 |
|
|
| Per common share
information |
|
|
|
|
|
|
|
|
|
|
|
Basic earnings |
$ |
0.63 |
|
|
$ |
0.55 |
|
|
$ |
0.70 |
|
|
$ |
0.77 |
|
|
$ |
0.95 |
|
|
|
Diluted earnings |
$ |
0.63 |
|
|
$ |
0.55 |
|
|
$ |
0.69 |
|
|
$ |
0.77 |
|
|
$ |
0.95 |
|
|
|
Basic weighted average shares outstanding |
|
72,498,075 |
|
|
|
72,525,504 |
|
|
|
72,506,877 |
|
|
|
72,468,094 |
|
|
|
72,414,953 |
|
|
|
Diluted weighted average shares outstanding |
|
72,562,122 |
|
|
|
72,624,610 |
|
|
|
72,591,281 |
|
|
|
72,560,234 |
|
|
|
72,517,008 |
|
|
|
Cash dividends declared |
$ |
0.20 |
|
|
$ |
0.20 |
|
|
$ |
0.20 |
|
|
$ |
0.20 |
|
|
$ |
0.18 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
TOWNEBANK |
|
Banking Segment Financial Information
(unaudited) |
|
(dollars in thousands) |
|
|
| |
|
|
|
|
|
| |
Three Months Ended |
|
Increase/(Decrease) |
| |
March 31, |
|
December 31, |
|
2022 over 2021 |
| |
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
|
Amount |
|
Percent |
| Revenue |
|
|
|
|
|
|
|
|
|
| Net interest income |
$ |
96,770 |
|
|
$ |
97,604 |
|
|
$ |
98,345 |
|
|
$ |
(834 |
) |
|
(0.85) |
% |
|
Service charges on deposit |
|
|
|
|
|
|
|
|
|
|
accounts |
|
2,574 |
|
|
|
2,190 |
|
|
|
2,479 |
|
|
|
384 |
|
|
17.53 |
% |
|
Credit card merchant fees |
|
1,375 |
|
|
|
1,302 |
|
|
|
1,412 |
|
|
|
73 |
|
|
5.61 |
% |
|
Other income |
|
6,710 |
|
|
|
4,970 |
|
|
|
4,876 |
|
|
|
1,740 |
|
|
35.01 |
% |
|
Subtotal |
|
10,659 |
|
|
|
8,462 |
|
|
|
8,767 |
|
|
|
2,197 |
|
|
25.96 |
% |
|
Net gain/(loss) on investment securities |
|
— |
|
|
|
1,000 |
|
|
|
— |
|
|
|
(1,000 |
) |
|
(100.00) |
% |
|
Total noninterest income |
|
10,659 |
|
|
|
9,462 |
|
|
|
8,767 |
|
|
|
1,197 |
|
|
12.65 |
% |
| Total revenue |
|
107,429 |
|
|
|
107,066 |
|
|
|
107,112 |
|
|
|
363 |
|
|
0.34 |
% |
| |
|
|
|
|
|
|
|
|
|
| Provision for credit
losses |
|
(1,833 |
) |
|
|
(3,401 |
) |
|
|
(1,199 |
) |
|
|
1,568 |
|
|
(46.10) |
% |
| |
|
|
|
|
|
|
|
|
|
| Expenses |
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
37,059 |
|
|
|
31,861 |
|
|
|
37,678 |
|
|
|
5,198 |
|
|
16.31 |
% |
|
Occupancy expense |
|
5,659 |
|
|
|
5,546 |
|
|
|
5,541 |
|
|
|
113 |
|
|
2.04 |
% |
|
Furniture and equipment |
|
2,709 |
|
|
|
2,668 |
|
|
|
2,570 |
|
|
|
41 |
|
|
1.54 |
% |
|
Amortization of intangibles |
|
827 |
|
|
|
962 |
|
|
|
812 |
|
|
|
(135 |
) |
|
(14.03) |
% |
|
Other expenses |
|
18,228 |
|
|
|
14,050 |
|
|
|
19,484 |
|
|
|
4,178 |
|
|
29.74 |
% |
| Total expenses |
|
64,482 |
|
|
|
55,087 |
|
|
|
66,085 |
|
|
|
9,395 |
|
|
17.05 |
% |
| Income before income tax,
corporate allocation and noncontrolling interest |
|
44,780 |
|
|
|
55,380 |
|
|
|
42,226 |
|
|
|
(10,600 |
) |
|
(19.14) |
% |
| Corporate allocation |
|
1,292 |
|
|
|
1,292 |
|
|
|
1,260 |
|
|
|
— |
|
|
— |
% |
| Income before income tax
provision and noncontrolling interest |
|
46,072 |
|
|
|
56,672 |
|
|
|
43,486 |
|
|
|
(10,600 |
) |
|
(18.70) |
% |
| Provision for income tax
expense |
|
8,519 |
|
|
|
9,701 |
|
|
|
7,123 |
|
|
|
(1,182 |
) |
|
(12.18) |
% |
| Net income |
|
37,553 |
|
|
|
46,971 |
|
|
|
36,363 |
|
|
|
(9,418 |
) |
|
(20.05) |
% |
| Noncontrolling interest |
|
— |
|
|
|
(5 |
) |
|
|
(3 |
) |
|
|
5 |
|
|
(100.00) |
% |
| Net income attributable to
TowneBank |
$ |
37,553 |
|
|
$ |
46,966 |
|
|
$ |
36,360 |
|
|
|
(9,413 |
) |
|
(20.04) |
% |
| |
|
|
|
|
|
|
|
|
|
| Efficiency
ratio(non-GAAP) |
|
59.25 |
% |
|
|
51.03 |
% |
|
|
60.94 |
% |
|
|
|
|
|
TOWNEBANK |
|
|
Realty Segment Financial Information
(unaudited) |
|
|
(dollars in thousands) |
|
|
|
|
| |
|
|
|
|
| |
Three Months Ended |
|
Increase/(Decrease) |
|
| |
March 31, |
|
December 31, |
|
2022 over 2021 |
|
| |
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
|
Amount |
|
Percent |
|
| Revenue |
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage brokerageincome, net |
$ |
15,906 |
|
|
$ |
37,877 |
|
|
$ |
22,257 |
|
|
$ |
(21,971 |
) |
|
(58.01) |
% |
|
|
Real estate brokerage income, net |
|
2,554 |
|
|
|
2,451 |
|
|
|
3,165 |
|
|
|
103 |
|
|
4.20 |
% |
|
|
Title insurance and settlement fees |
|
504 |
|
|
|
525 |
|
|
|
610 |
|
|
|
(21 |
) |
|
(4.00) |
% |
|
|
|
Property management fees, net |
|
17,147 |
|
|
|
15,483 |
|
|
|
9,099 |
|
|
|
1,664 |
|
|
10.75 |
% |
|
|
Income from unconsolidatedsubsidiary |
|
167 |
|
|
|
406 |
|
|
|
113 |
|
|
|
(239 |
) |
|
(58.87) |
% |
|
|
|
Net interest and other income |
|
2,932 |
|
|
|
2,736 |
|
|
|
3,010 |
|
|
|
196 |
|
|
7.16 |
% |
|
| Total revenue |
|
39,210 |
|
|
|
59,478 |
|
|
|
38,254 |
|
|
|
(20,268 |
) |
|
(34.08) |
% |
|
| |
|
|
|
|
|
|
|
|
|
|
| Provision for credit
losses |
|
384 |
|
|
|
(626 |
) |
|
|
89 |
|
|
|
1,010 |
|
|
(161.34) |
% |
|
| |
|
|
|
|
|
|
|
|
|
|
| Expenses |
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
17,291 |
|
|
|
16,847 |
|
|
|
17,682 |
|
|
|
444 |
|
|
2.64 |
% |
|
|
Occupancy expense |
|
1,898 |
|
|
|
1,871 |
|
|
|
1,957 |
|
|
|
27 |
|
|
1.44 |
% |
|
|
Furniture and equipment |
|
761 |
|
|
|
649 |
|
|
|
727 |
|
|
|
112 |
|
|
17.26 |
% |
|
|
Amortization of intangible assets |
|
816 |
|
|
|
590 |
|
|
|
931 |
|
|
|
226 |
|
|
38.31 |
% |
|
|
Other expenses |
|
10,852 |
|
|
|
9,229 |
|
|
|
9,805 |
|
|
|
1,623 |
|
|
17.59 |
% |
|
| Total expenses |
|
31,618 |
|
|
|
29,186 |
|
|
|
31,102 |
|
|
|
2,432 |
|
|
8.33 |
% |
|
| |
|
|
|
|
|
|
|
|
|
|
| Income before income tax,
corporate allocation and noncontrolling interest |
|
7,208 |
|
|
|
30,918 |
|
|
|
7,063 |
|
|
|
(23,710 |
) |
|
(76.69) |
% |
|
| Corporate allocation |
|
(1,000 |
) |
|
|
(1,000 |
) |
|
|
(1,000 |
) |
|
|
— |
|
|
— |
% |
|
| Income before income tax
provision and noncontrolling interest |
|
6,208 |
|
|
|
29,918 |
|
|
|
6,063 |
|
|
|
(23,710 |
) |
|
(79.25) |
% |
|
| Provision for income tax
expense |
|
1,374 |
|
|
|
6,216 |
|
|
|
1,894 |
|
|
|
(4,842 |
) |
|
(77.90) |
% |
|
| Net income |
|
4,834 |
|
|
|
23,702 |
|
|
|
4,169 |
|
|
|
(18,868 |
) |
|
(79.61) |
% |
|
| Noncontrolling interest |
|
(664 |
) |
|
|
(3,631 |
) |
|
|
(1,471 |
) |
|
|
2,967 |
|
|
(81.71) |
% |
|
| Net income attributable to
TowneBank |
$ |
4,170 |
|
|
$ |
20,071 |
|
|
$ |
2,698 |
|
|
|
(15,901 |
) |
|
(79.22) |
% |
|
| |
|
|
|
|
|
|
|
|
|
|
| Efficiency
ratio(non-GAAP) |
|
78.56 |
% |
|
|
48.08 |
% |
|
|
78.87 |
% |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
TOWNEBANK |
|
Insurance Segment Financial Information
(unaudited) |
|
(dollars in thousands) |
|
|
| |
|
|
|
|
|
| |
Three Months Ended |
|
Increase/(Decrease) |
| |
March 31, |
|
December 31, |
|
2022 over 2021 |
| |
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
|
Amount |
|
Percent |
| Commission and fee income |
|
|
|
|
|
|
|
|
|
|
Property and casualty |
$ |
15,337 |
|
|
$ |
14,188 |
|
|
$ |
13,135 |
|
|
$ |
1,149 |
|
|
8.10 |
% |
|
Employee benefits |
|
4,161 |
|
|
|
3,884 |
|
|
|
3,682 |
|
|
|
277 |
|
|
7.13 |
% |
|
Specialized benefit services |
|
170 |
|
|
|
167 |
|
|
|
172 |
|
|
|
3 |
|
|
1.80 |
% |
| Total commissions and
fees |
|
19,668 |
|
|
|
18,239 |
|
|
|
16,989 |
|
|
|
1,429 |
|
|
7.83 |
% |
| |
|
|
|
|
|
|
|
|
|
| Contingency and bonus
revenue |
|
3,404 |
|
|
|
1,759 |
|
|
|
2,231 |
|
|
|
1,645 |
|
|
93.52 |
% |
| Other income |
|
33 |
|
|
|
74 |
|
|
|
40 |
|
|
|
(41 |
) |
|
(55.41) |
% |
| Total revenue |
|
23,105 |
|
|
|
20,072 |
|
|
|
19,260 |
|
|
|
3,033 |
|
|
15.11 |
% |
| |
|
|
|
|
|
|
|
|
|
| Employee commission
expense |
|
4,332 |
|
|
|
4,107 |
|
|
|
4,202 |
|
|
|
225 |
|
|
5.48 |
% |
| Revenue, net of commission
expense |
|
18,773 |
|
|
|
15,965 |
|
|
|
15,058 |
|
|
|
2,808 |
|
|
17.59 |
% |
| |
|
|
|
|
|
|
|
|
|
| Salaries and employee
benefits |
|
9,613 |
|
|
|
9,727 |
|
|
|
9,454 |
|
|
|
(114 |
) |
|
(1.17) |
% |
| Occupancy expense |
|
770 |
|
|
|
655 |
|
|
|
873 |
|
|
|
115 |
|
|
17.56 |
% |
| Furniture and equipment |
|
220 |
|
|
|
195 |
|
|
|
231 |
|
|
|
25 |
|
|
12.82 |
% |
| Amortization of intangible
assets |
|
1,174 |
|
|
|
1,171 |
|
|
|
1,192 |
|
|
|
3 |
|
|
0.26 |
% |
| Other expenses |
|
1,502 |
|
|
|
1,305 |
|
|
|
1,530 |
|
|
|
197 |
|
|
15.10 |
% |
| Total operating expenses |
|
13,279 |
|
|
|
13,053 |
|
|
|
13,280 |
|
|
|
226 |
|
|
1.73 |
% |
| Income before income tax,
corporate allocation and noncontrolling interest |
|
5,494 |
|
|
|
2,912 |
|
|
|
1,778 |
|
|
|
2,582 |
|
|
88.67 |
% |
| Corporate allocation |
|
(292 |
) |
|
|
(292 |
) |
|
|
(260 |
) |
|
|
— |
|
|
— |
% |
| Income before income tax
provision and noncontrolling interest |
|
5,202 |
|
|
|
2,620 |
|
|
|
1,518 |
|
|
|
2,582 |
|
|
98.55 |
% |
| Provision for income tax
expense |
|
1,339 |
|
|
|
662 |
|
|
|
393 |
|
|
|
677 |
|
|
102.27 |
% |
| Net income |
|
3,863 |
|
|
|
1,958 |
|
|
|
1,125 |
|
|
|
1,905 |
|
|
97.29 |
% |
| Noncontrolling interest |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
N/M |
| Net income attributable to
TowneBank |
$ |
3,863 |
|
|
$ |
1,958 |
|
|
$ |
1,125 |
|
|
|
1,905 |
|
|
97.29 |
% |
| |
|
|
|
|
|
|
|
|
|
| Provision for income
taxes |
|
1,339 |
|
|
|
662 |
|
|
|
393 |
|
|
|
677 |
|
|
102.27 |
% |
| Depreciation, amortization and
interest expense |
|
1,319 |
|
|
|
1,308 |
|
|
|
1,342 |
|
|
|
11 |
|
|
0.84 |
% |
| EBITDA(non-GAAP) |
$ |
6,521 |
|
|
$ |
3,928 |
|
|
$ |
2,860 |
|
|
|
2,593 |
|
|
66.01 |
% |
| |
|
|
|
|
|
|
|
|
|
| Efficiency
ratio(non-GAAP) |
|
64.48 |
% |
|
|
74.43 |
% |
|
|
80.28 |
% |
|
|
|
|
|
TOWNEBANK |
|
Reconciliation of Non-GAAP Financial Measures |
|
(dollars in thousands) |
|
|
| |
Three Months Ended |
| |
March 31, |
|
March 31, |
|
December 31, |
| |
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
| |
|
|
|
|
|
| Return on average assets
(GAAP) |
|
1.13 |
% |
|
|
1.92 |
% |
|
|
0.99 |
% |
| Impact of excluding average
goodwill and otherintangibles and amortization |
|
0.10 |
% |
|
|
0.13 |
% |
|
|
0.09 |
% |
| Return on average tangible
assets (non-GAAP) |
|
1.23 |
% |
|
|
2.05 |
% |
|
|
1.08 |
% |
| |
|
|
|
|
|
| Return on average equity
(GAAP) |
|
9.73 |
% |
|
|
15.56 |
% |
|
|
8.38 |
% |
| Impact of excluding average
goodwill and otherintangibles and amortization |
|
4.18 |
% |
|
|
6.63 |
% |
|
|
3.70 |
% |
| Return on average tangible
equity (non-GAAP) |
|
13.91 |
% |
|
|
22.19 |
% |
|
|
12.08 |
% |
| |
|
|
|
|
|
| Return on average common
equity (GAAP) |
|
9.81 |
% |
|
|
15.70 |
% |
|
|
8.45 |
% |
| Impact of excluding average
goodwill and otherintangibles and amortization |
|
4.27 |
% |
|
|
6.75 |
% |
|
|
3.77 |
% |
| Return on average tangible
common equity(non-GAAP) |
|
14.08 |
% |
|
|
22.45 |
% |
|
|
12.22 |
% |
| |
|
|
|
|
|
| Book value (GAAP) |
$ |
25.61 |
|
|
$ |
24.78 |
|
|
$ |
26.13 |
|
| Impact of excluding average
goodwill and otherintangibles and amortization |
|
(6.94 |
) |
|
|
(6.84 |
) |
|
|
(6.98 |
) |
| Tangible book value
(non-GAAP) |
$ |
18.67 |
|
|
$ |
17.94 |
|
|
$ |
19.15 |
|
| |
|
|
|
|
|
| Efficiency ratio (GAAP) |
|
66.13 |
% |
|
|
53.33 |
% |
|
|
68.86 |
% |
| Impact of exclusions |
(1.71) |
% |
|
(1.22) |
% |
|
(1.83) |
% |
| Efficiency ratio
(non-GAAP) |
|
64.42 |
% |
|
|
52.11 |
% |
|
|
67.03 |
% |
| |
|
|
|
|
|
| Average assets (GAAP) |
$ |
16,311,998 |
|
|
$ |
14,592,416 |
|
|
$ |
16,075,509 |
|
| Less: average goodwill and
intangible assets |
|
506,496 |
|
|
|
497,446 |
|
|
|
506,867 |
|
| Average tangible assets
(non-GAAP) |
$ |
15,805,502 |
|
|
$ |
14,094,970 |
|
|
$ |
15,568,642 |
|
| |
|
|
|
|
|
| Average equity (GAAP) |
$ |
1,900,267 |
|
|
$ |
1,797,767 |
|
|
$ |
1,902,474 |
|
| Less: average goodwill and
intangible assets |
|
506,496 |
|
|
|
497,446 |
|
|
|
506,867 |
|
| Average tangible equity
(non-GAAP) |
$ |
1,393,771 |
|
|
$ |
1,300,321 |
|
|
$ |
1,395,607 |
|
| |
|
|
|
|
|
| Average common equity
(GAAP) |
$ |
1,884,101 |
|
|
$ |
1,782,795 |
|
|
$ |
1,886,279 |
|
| Less: average goodwill and
intangible assets |
|
506,496 |
|
|
|
497,446 |
|
|
|
506,867 |
|
| Average tangible common equity
(non-GAAP) |
$ |
1,377,605 |
|
|
$ |
1,285,349 |
|
|
$ |
1,379,412 |
|
| |
|
|
|
|
|
| Net Income (GAAP) |
$ |
45,586 |
|
|
$ |
68,995 |
|
|
$ |
40,183 |
|
| Amortization of Intangibles,
net of tax |
|
2,225 |
|
|
|
2,151 |
|
|
|
2,318 |
|
| Tangible net income
(non-GAAP) |
$ |
47,811 |
|
|
$ |
71,146 |
|
|
$ |
42,501 |
|
| |
|
|
|
|
|
| Net Income (GAAP) |
$ |
45,586 |
|
|
$ |
68,995 |
|
|
$ |
40,183 |
|
| Provision for credit
losses |
|
(1,449 |
) |
|
|
(4,027 |
) |
|
|
(1,110 |
) |
| Provision for income tax |
|
11,232 |
|
|
|
16,579 |
|
|
|
9,410 |
|
|
Pre-provision, pre-tax net revenues (non-GAAP) |
$ |
55,369 |
|
|
$ |
81,547 |
|
|
$ |
48,483 |
|
| |
|
|
|
|
|
| Total Revenue (GAAP) |
$ |
165,412 |
|
|
$ |
182,509 |
|
|
$ |
160,424 |
|
| Net (gain)/loss on investment
securities |
|
— |
|
|
|
(1,000 |
) |
|
|
— |
|
| Other nonrecurring (income)
loss |
|
— |
|
|
|
30 |
|
|
|
— |
|
| Total Revenue for efficiency
calculation (non-GAAP) |
$ |
165,412 |
|
|
$ |
181,539 |
|
|
$ |
160,424 |
|
| |
|
|
|
|
|
| Noninterest expense
(GAAP) |
$ |
109,379 |
|
|
$ |
97,326 |
|
|
$ |
110,467 |
|
| Less: Amortization of
intangibles |
|
2,817 |
|
|
|
2,723 |
|
|
|
2,935 |
|
| Noninterest expense net of
amortization (non-GAAP) |
$ |
106,562 |
|
|
$ |
94,603 |
|
|
$ |
107,532 |
|
TowneBank (NASDAQ:TOWN)
Historical Stock Chart
From Apr 2024 to May 2024
TowneBank (NASDAQ:TOWN)
Historical Stock Chart
From May 2023 to May 2024
