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TowneBank Reports Third Quarter 2025 Earnings

SUFFOLK, Va., Oct. 22, 2025 (GLOBE NEWSWIRE) — TowneBank (the “Company” or “Towne”) (NASDAQ: TOWN) today reported earnings for the quarter ended September 30, 2025 of $38.98 million, or $0.51 per diluted share, compared to $42.95 million, or $0.57 per diluted share, for the quarter ended September 30, 2024. Excluding certain items affecting comparability, core earnings (non-GAAP) were $63.45 million, or $0.83 per diluted share, in the current quarter compared to $43.39 million, or $0.58 per diluted share, for the quarter ended September 30, 2024.

“We delivered another strong quarter with total revenue up nearly 24% year-over-year. During the period, we announced a new partnership with Dogwood and completed the Old Point acquisition. Our disciplined approach, partnering with leading organizations in high growth markets, continues to drive earnings momentum, reflected in a 3.50% tax-equivalent margin. Towne’s resilient business model and flexible balance sheet position us well to navigate an uncertain economic environment,” said G. Robert Aston, Jr., Executive Chairman.

Highlights for Third Quarter 2025:

  • Towne successfully completed the acquisition of Old Point Financial Corporation (“Old Point”), the parent company of The Old Point National Bank of Phoebus (“Old Point National Bank”), in September 2025. Included in that acquisition were $961.35 million in loans, $208.83 million in securities, and $1.21 billion in deposits.
  • As previously announced, Towne successfully completed the acquisition of Village Bank and Trust Financial Corp. and its wholly-owned bank subsidiary, Village Bank (“Village”), in April 2025. Included in that acquisition were $576.51 million in loans, $74.31 million in securities, and $637.49 million in deposits.
  • Total revenues were $215.67 million, an increase of $41.15 million, or 23.58%, compared to third quarter 2024. Net interest income increased $34.67 million, driven by a combination of increased interest income and lower deposit costs, and noninterest income increased $6.48 million.
  • Total deposits were $16.53 billion, an increase of $2.17 billion, or 15.09%, compared to third quarter 2024. Total deposits increased 7.84%, or $1.20 billion, in comparison to June 30, 2025. Excluding $1.21 billion in Old Point acquired deposits, total deposits would have increased $0.96 billion, or 6.66% compared to the prior year but declined $9.67 million, compared to the linked quarter.  
  • Noninterest-bearing deposits increased 20.43%, to $5.14 billion, compared to third quarter 2024 and represented 31.09% of total deposits. Compared to the linked quarter, noninterest-bearing deposits increased 8.10%, including $306.07 million acquired from Old Point.
  • Loans held for investment were $13.38 billion, an increase of $1.97 billion, or 17.23%, compared to September 30, 2024, and $1.02 billion, or 8.25% compared to June 30, 2025. Excluding loans acquired in the quarter, total loans would have increased $1.01 billion, or 8.81%, compared to the prior year and $58.01 million, or 1.86% on an annualized basis, compared to the linked quarter.
  • Annualized return on common shareholders’ equity was 6.80% compared to 8.18% in third quarter 2024. Annualized return on average tangible common shareholders’ equity (non-GAAP) was 10.15% compared to 11.54% in third quarter 2024.
  • Net interest margin was 3.48% for the quarter and tax-equivalent net interest margin (non-GAAP) was 3.50%, including purchase accounting accretion of 8 basis points, compared to the prior year quarter net interest margin of 2.90% and tax-equivalent net interest margin (non-GAAP) of 2.93%, including purchase accounting accretion of 3 basis points.
  • Compared to the linked quarter, which included purchase accounting accretion of 6 basis points, net interest margin increased 10 basis points and spread increased 11 basis points.
  • The effective tax rate was 15.88% in the quarter compared to 11.52% in third quarter 2024 and 22.23% in the linked quarter. The increase in the effective rate from third quarter 2024 to 2025 was due to an increase in state tax expense and nondeductible expenses related to the Old Point acquisition. The lower effective tax rate in the current quarter compared to prior quarter was primarily due to LIHTC investment properties placed in service during the period and the prior quarter nonrecurring adjustment to deferred income tax related to the repurchase of noncontrolling interests in Resort Property Management.

“We’re excited to have completed most of the Village integration and system conversions, marking a major milestone for our team. Our immediate priority is to finalize the Dogwood partnership and integrate Old Point systems which we expect could occur in the first quarter of 2026. Looking ahead, we anticipate scheduling the Dogwood system integration in the second half of 2026. I want to express my sincere gratitude to our dedicated teammates whose leadership and commitment to our mission of Serving Others and Enriching Lives make these achievements possible,” stated William I. Foster III, President and Chief Executive Officer.

Quarterly Net Interest Income:

  • Net interest income was $146.95 million in third quarter 2025 compared to $112.28 million for the quarter ended September 30, 2024.
  • On an average basis, loans held for investment, with a yield of 5.65%, represented 75.52% of earning assets at September 30, 2025 compared to a yield of 5.46% and 74.16% of earning assets at September 30, 2024.
  • The cost of interest-bearing deposits was 2.55% for the quarter ended September 30, 2025, compared to 3.28% in second quarter 2024. Interest expense on deposits decreased $12.99 million, or 15.81%, from the prior year quarter driven by decreases in rate.
  • Our total cost of deposits decreased to 1.75% from 2.29% for the quarter ended September 30, 2024 due to lower interest-bearing deposit rates, as short-term Treasury rates continued to fall.
  • Average interest-earning assets totaled $16.77 billion at September 30, 2025 compared to $15.40 billion at September 30, 2024, an increase of 8.89%.
  • Average interest-bearing liabilities totaled $11.07 billion, an increase of $0.82 billion, or 8.01%, from prior year, driven by demand and money market deposit growth. Borrowings increased by $68.12 million over the linked quarter, driven by debt assumed in the Old Point acquisition.

Quarterly Provision for Credit Losses:

  • The quarterly provision for credit losses was an expense of $15.28 million compared to a benefit of $1.10 million in the prior year quarter and an expense of $6.41 million in the linked quarter. The provision includes an initial provision for credit losses of $12.00 million related to loans and commitments acquired in the Old Point transaction.
  • The allowance for credit losses on loans increased $14.99 million in third quarter 2025, compared to the linked quarter, $13.50 million of which resulted from the September 2025 acquisition of Old Point. In addition to the $11.45 million initial acquisition related provision for the purchased loan portfolio we increased our allowance $2.05 million for purchased credit deteriorated loan marks. Additional allowance increases were primarily driven by loan portfolio growth.
  • Net loan charge-offs were $254 thousand in the quarter, $19 thousand in the linked quarter, and $677 thousand in the prior year quarter.
  • The ratio of net charge-offs to average loans on an annualized basis was 0.01% in third quarter 2025, 0.02% in third quarter 2024, and 0.00% in the linked quarter.
  • The allowance for credit losses on loans represented 1.11% of total loans at September 30, 2025, compared to 1.08% at September 30, 2024, and 1.09% at June 30, 2025. The allowance for credit losses on loans was 19.38 times nonperforming loans compared to 18.70 times at September 30, 2024 and 16.81 times at June 30, 2025.

Quarterly Noninterest Income:

  • Total noninterest income was $68.71 million compared to $62.24 million in 2024, an increase of $6.48 million, or 10.41%.
  • Property management fee revenue increased $2.31 million, or 20.57%, to $13.53 million in third quarter 2025, compared to third quarter 2024. The increase was driven by changes to our fee structure resulting in revenue growth.
  • Residential mortgage banking income was $13.12 million compared to $11.79 million in third quarter 2024. Loan volume increased to $636.36 million in third quarter 2025 from $598.18 million in third quarter 2024. Residential purchase activity was 91.84% of production volume in the third quarter of 2025 compared to 91.49% in third quarter 2024.
  • Gross margins on residential mortgage sales increased 19 basis points to 3.32%, from the linked quarter and 4 basis points from 3.28% in third quarter 2024.
  • Investment income, net, increased 1.10 million, or 38.73%, from third quarter 2024, $0.50 million of this increase was attributable to the acquisition of Old Point.

Quarterly Noninterest Expense:

  • Total noninterest expense was $153.74 million compared to $126.90 million in 2024, an increase of $26.84 million, or 21.15%. This increase was primarily attributable to acquisition-related expenses and growth in salaries and employee benefits.
  • The acquisitions of Village and Old Point, and the pending acquisition of Dogwood State Bank, which is expected to be completed first quarter 2026, resulted in $17.81 million in acquisition-related expenses in the quarter.
  • An increase in banking personnel related to the Village and Old Point acquisitions represented $3.03 million of the $6.84 million increase in salaries and benefits expenses, compared to the prior year quarter. Additional contributing factors were annual base salary adjustments that went into effect October 2024 and higher performance-based incentives.

Consolidated Balance Sheet Highlights:

  • Total assets were $19.68 billion for the quarter ended September 30, 2025, a $1.42 billion increase compared to $18.26 billion at June 30, 2025. Total assets increased $2.49 billion, or 14.51%, from $17.19 billion at September 30, 2024.
  • Loans held for investment increased $1.97 billion, or 17.23%, compared to prior year and $1.02 billion, or 8.25%, compared to the linked quarter. The Company continues to maintain a strong credit discipline.
  • Mortgage loans held for sale decreased $51.81 million, or 19.60%, compared to prior year and $26.24 million, or 10.99%, compared to the linked quarter, driven by production seasonality.
  • Total deposits increased $2.17 billion, or 15.09%, compared to prior year, driven by acquisition-related increases in both noninterest bearing and interest-bearing demand deposits. In the linked quarter comparison, total deposits increased $1.20 billion, or 7.84%.
  • Noninterest-bearing deposits increased $871.86 million, or 20.43%, compared to prior year and $385.15 million, or 8.10%, compared to the linked quarter.
  • Total borrowings increased $71.41 million, or 24.56%, compared to third quarter 2024 and $68.12 million, or 23.16%, compared to the linked quarter, due to acquired FHLB borrowings and subordinated debt.

Investment Securities:

  • Total investment securities were $2.87 billion compared to $2.78 billion at June 30, 2025 and $2.60 billion at September 30, 2024. The weighted average duration of the portfolio at September 30, 2025 was 3.2 years. The carrying value of the available-for-sale debt securities portfolio included net unrealized losses of $87.87 million at September 30, 2025, compared to $113.14 million at June 30, 2025 and $110.62 million at September 30, 2024, with the changes in fair value marks due to the change in interest rates.

Loans and Asset Quality:

  • Total loans held for investment were $13.38 billion at September 30, 2025, $12.36 billion at June 30, 2025, and $11.41 billion at September 30, 2024. Excluding loans acquired in the quarter, total loans would have increased $1.01 billion, or 8.81%, compared to the prior year and $58.01 million, or 1.86% on an annualized basis, compared to the linked quarter.
  • Nonperforming assets were $10.38 million, or 0.05% of total assets, compared to $7.47 million, or 0.04%, at September 30, 2024, and $9.29 million, or 0.05%, at the linked quarter end.
  • Nonperforming loans were 0.06% of period end loans at September 30, 2025, September 30, 2024, and the linked quarter end.
  • Foreclosed property consisted of $712 thousand in other real estate owned, $885 thousand in former bank premises and $1.09 million in repossessed autos, for a total of $2.68 million in foreclosed property at September 30, 2025, compared to $884 thousand in repossessed autos at September 30, 2024.

Deposits and Borrowings:

  • Total deposits were $16.53 billion compared to $15.33 billion at June 30, 2025 and $14.36 billion at September 30, 2024. Excluding $1.21 billion in acquired deposits, total deposits would have increased $0.96 billion, or 6.66%, compared to the prior year but declined $9.67 million, or 0.25% on an annualized basis from the linked quarter.
  • The ratio of period end loans held for investment to deposits was 80.93% compared to 80.63% at June 30, 2025 and 79.46% at September 30, 2024.
  • Noninterest-bearing deposits were 31.09% of total deposits at September 30, 2025 compared to 31.02% at June 30, 2025 and 29.71% at September 30, 2024. Noninterest-bearing deposits increased $0.87 billion, or 20.43%, compared to September 30, 2024, and $385.15 million, or 8.10%, compared to the linked quarter.
  • Total borrowings were $362.23 million compared to $294.12 million at June 30, 2025 and $290.82 million at September 30, 2024.

Capital:

  • Common equity tier 1 capital ratio of 11.18%(1).
  • Tier 1 leverage capital ratio of 9.84%(1).
  • Tier 1 risk-based capital ratio of 11.23%(1).
  • Total risk-based capital ratio of 13.99% (1).
  • Book value per common share was $30.38 compared to $29.58 at June 30, 2025 and $28.59 at September 30, 2024.
  • Tangible book value per common share (non-GAAP) was $21.59 compared to $21.98 at June 30, 2025 and $21.65 at September 30, 2024.

(1) Preliminary.

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 60 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 affiliated companies that include Towne Wealth Management, Towne Insurance Agency, Towne Benefits, TowneBank Mortgage, TowneBank Commercial Mortgage, Berkshire Hathaway HomeServices RW Towne Realty, Towne 1031 Exchange, and Towne Vacations. With total assets of $19.68 billion as of September 30, 2025, 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, among others, 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; an unforeseen outflow of cash or deposits or an inability to access the capital markets, which could jeopardize our overall liquidity or capitalization; changes in the creditworthiness of customers and the possible impairment of the collectability of loans; insufficiency of our allowance for credit losses due to market conditions, inflation, changing interest rates or other factors; adverse developments in the financial industry generally, such as the 2023 bank failures, responsive measures to mitigate and manage such developments, related supervisory and regulatory actions and costs, and related impacts on customer and client behavior; 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; geopolitical instability, including wars, conflicts, trade restrictions and tariffs, civil unrest, and terrorist attacks and the potential impact, directly or indirectly, on our business; the effects of weather-related or natural disasters, which may negatively affect our operations and/or our loan portfolio and increase our cost of conducting business; public health events (such as the COVID-19 pandemic) and governmental and societal responses to them; changes in the legislative or regulatory environment, including changes in accounting standards and tax laws, that may adversely affect our business; our ability to successfully integrate the businesses from recently completed and pending acquisitions, including our recent merger with Old Point Financial Corporation and our pending merger with Dogwood State Bank (“Dogwood”), to the extent that it may take longer or be more difficult, time-consuming, or costly to accomplish than expected; our ability to close the transaction with Dogwood when expected or at all because required approvals and other conditions to closing are not received or satisfied on the proposed terms or on the anticipated schedule; deposit attrition, operating costs, customer losses, and business disruption associated with recently completed or pending acquisitions, including reputational risk and adverse effects on relationships with employees, customers or other business partners, that may be greater than expected; costs or difficulties related to the integration of the businesses that we have acquired that may be greater than expected; expected growth opportunities or cost savings associated with recently completed or pending acquisitions that may not be fully realized or realized within the expected time frame; the diversion of management’s attention and time from ongoing business operations and opportunities on merger related matters; cybersecurity threats or attacks, whether directed at us or at vendors or other third parties with which we interact, the implementation of new technologies, and the ability to develop and maintain reliable electronic systems; competitors that 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, including any adverse impact of actual and proposed cuts to federal spending, including defense, security and military spending, on the economy. 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, 2024 and related disclosures in other filings that have been, or will be, filed by TowneBank with the Federal Deposit Insurance Corporation.

Media contact:
G. Robert Aston, Jr., Executive Chairman, 757-638-6780
William I. Foster III, President and Chief Executive Officer, 757-417-6482

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
  September 30, June 30, March 31, December 31, September 30,
  2025   2025   2025   2024   2024 
Income and Performance Ratios:         
 Total revenue$215,665  $207,442  $192,044  $177,160  $174,518 
 Net income 39,294   39,269   50,887   41,441   43,126 
 Net income available to common shareholders 38,977   38,837   50,592   41,265   42,949 
 Net income per common share – diluted 0.51   0.51   0.67   0.55   0.57 
 Book value per common share 30.38   29.58   29.19   28.43   28.59 
 Book value per common share – tangible (non-GAAP) 21.59   21.98   22.36   21.55   21.65 
 Return on average assets 0.83%  0.86%  1.19%  0.95%  1.00%
 Return on average assets – tangible (non-GAAP) 0.94%  0.96%  1.29%  1.03%  1.09%
 Return on average equity 6.78%  7.12%  9.50%  7.64%  8.12%
 Return on average equity – tangible (non-GAAP) 10.10%  10.39%  13.08%  10.68%  11.42%
 Return on average common equity 6.80%  7.14%  9.57%  7.70%  8.18%
 Return on average common equity – tangible (non-GAAP) 10.15%  10.44%  13.21%  10.79%  11.54%
 Noninterest income as a percentage of total revenue 31.86%  33.85%  37.27%  33.36%  35.66%
Regulatory Capital Ratios (1):         
 Common equity tier 1 11.18%  11.77%  12.75%  12.77%  12.63%
 Tier 1 11.23%  11.82%  12.87%  12.89%  12.76%
 Total 13.99%  14.49%  15.65%  15.68%  15.54%
 Tier 1 leverage ratio 9.84%  9.93%  10.61%  10.36%  10.38%
Asset Quality:         
 Allowance for credit losses on loans to nonperforming loans 19.38x  16.81x  19.15x  16.69x  18.70x
 Allowance for credit losses on loans to period end loans 1.11%  1.09%  1.08%  1.08%  1.08%
 Nonperforming loans to period end loans 0.06%  0.06%  0.06%  0.06%  0.06%
 Nonperforming assets to period end assets 0.05%  0.05%  0.04%  0.05%  0.04%
 Net charge-offs (recoveries) to average loans (annualized) 0.01%  %  0.02%  0.01%  0.02%
 Net charge-offs (recoveries)$254  $19  $626  $382  $677 
           
 Nonperforming loans$7,698  $7,982  $6,586  $7,424  $6,588 
 Former bank premises 885             
 Foreclosed property 1,798   1,306   786   443   884 
 Total nonperforming assets$10,381  $9,288  $7,372  $7,867  $7,472 
 Loans past due 90 days and still accruing interest$1,863  $210  $15  $1,264  $510 
 Allowance for credit losses on loans$149,175  $134,187  $126,131  $123,923  $123,191 
Mortgage Banking:         
 Loans originated, mortgage$491,921  $494,108  $300,699  $385,238  $421,571 
 Loans originated, joint venture 144,440   177,359   144,495   180,188   176,612 
 Total loans originated$636,361  $671,467  $445,194  $565,426  $598,183 
 Number of loans originated 1,679   1,750   1,181   1,489   1,637 
 Number of originators 169   166   161   160   159 
 Purchase % 91.84%  92.37%  89.94%  89.46%  91.49%
 Loans sold$657,822  $596,009  $475,518  $629,120  $526,998 
 Rate lock asset$2,213  $2,186  $1,880  $1,150  $1,548 
 Gross realized gain on sales and fees as a % of loans originated 3.32%  3.13%  3.18%  3.25%  3.28%
Other Ratios:         
 Net interest margin 3.48%  3.38%  3.14%  2.99%  2.90%
 Net interest margin-fully tax-equivalent (non-GAAP) 3.50%  3.40%  3.17%  3.02%  2.93%
 Average earning assets/total average assets 90.03%  90.23%  90.32%  90.57%  90.43%
 Average loans/average deposits 80.92%  81.09%  80.01%  78.71%  80.07%
 Average noninterest deposits/total average deposits 31.30%  30.88%  29.68%  30.14%  30.19%
 Period end equity/period end total assets 12.22%  12.26%  12.66%  12.50%  12.58%
 Efficiency ratio (non-GAAP) 69.23%  70.71%  67.10%  70.28%  70.93%
 (1) Current reporting period regulatory capital ratios are preliminary.      
        

TOWNEBANK
Selected Data (unaudited)
(dollars in thousands)
 
Investment Securities      % Change
 Q3 Q3 Q2 Q3 25 vs. Q3 25 vs.
Available-for-sale securities, at fair value 2025   2024   2025  Q3 24 Q2 25
U.S. agency securities$364,889  $291,814  $345,808  25.04% 5.52%
U.S. Treasury notes 83,246   28,655   78,746  190.51% 5.71%
Municipal securities 478,711   455,722   438,490  5.04% 9.17%
Trust preferred and other corporate securities 143,291   91,525   115,126  56.56% 24.46%
Mortgage-backed securities issued by GSEs and GNMA 1,599,812   1,496,631   1,577,325  6.89% 1.43%
Allowance for credit losses (1,350)  (1,171)  (1,520) 15.29% (11.18)%
Total$2,668,599  $2,363,176  $2,553,975  12.92% 4.49%
Gross unrealized gains (losses) reflected in financial statements      
Total gross unrealized gains$10,741  $6,703  $6,048  60.24% 77.60%
Total gross unrealized losses (98,606)  (117,319)  (119,186) (15.95)% (17.27)%
Net unrealized gains (losses) and other adjustments on AFS securities$(87,865) $(110,616) $(113,138) (20.57)% (22.34)%
Held-to-maturity securities, at amortized cost         
U.S. agency securities$68,140  $102,428  $92,973  (33.48)% (26.71)%
U.S. Treasury notes 96,017   96,942   96,250  (0.95)% (0.24)%
Municipal securities 5,439   5,342   5,414  1.82% 0.46%
Trust preferred corporate securities 2,081   2,133   2,094  (2.44)% (0.62)%
Mortgage-backed securities issued by GSEs 5,166   5,577   5,201  (7.37)% (0.67)%
Allowance for credit losses (65)  (77)  (67) (15.58)% (2.99)%
Total$176,778  $212,345  $201,865  (16.75)% (12.43)%
          
Total gross unrealized gains$283  $323  $214  (12.38)% 32.24%
Total gross unrealized losses (3,746)  (7,929)  (5,148) (52.76)% (27.23)%
Net unrealized gains (losses) in HTM securities$(3,463) $(7,606) $(4,934) (54.47)% (29.81)%
Total unrealized gains (losses) on AFS and HTM securities$(91,328) $(118,222) $(118,072) (22.75)% (22.65)%
       % Change
Loans Held For InvestmentQ3 Q3 Q2 Q3 25 vs. Q3 25 vs.
  2025   2024   2025  Q3 24 Q2 25
Real estate – construction and development$1,239,372  $1,118,669  $1,072,625  10.79% 15.55%
Commercial real estate – owner occupied 1,910,050   1,655,345   1,815,900  15.39% 5.18%
Commercial real estate – non-owner occupied 3,808,755   3,179,699   3,557,175  19.78% 7.07%
Real estate – multifamily 920,254   750,906   887,083  22.55% 3.74%
Residential 1-4 family 2,189,417   1,891,216   1,997,395  15.77% 9.61%
HELOC 556,386   408,565   480,610  36.18% 15.77%
Commercial and industrial business (C&I) 1,452,133   1,256,511   1,370,564  15.57% 5.95%
Government 504,543   521,681   510,902  (3.29)% (1.24)%
Indirect 697,606   546,887   579,041  27.56% 20.48%
Consumer loans and other 100,517   83,039   88,378  21.05% 13.74%
Total$13,379,033  $11,412,518  $12,359,673  17.23% 8.25%
          
       % Change
DepositsQ3 Q3 Q2 Q3 25 vs. Q3 25 vs.
  2025   2024   2025  Q3 24 Q2 25
Noninterest-bearing demand$5,139,488  $4,267,628  $4,754,340  20.43% 8.10%
Interest-bearing:         
Demand and money market accounts 8,273,987   6,990,103   7,654,317  18.37% 8.10%
Savings 331,168   319,970   332,108  3.50% (0.28)%
Certificates of deposits 2,786,292   2,785,469   2,587,951  0.03% 7.66%
Total 16,530,935   14,363,170   15,328,716  15.09% 7.84%
                  

TOWNEBANK
Average Balances, Yields and Rate Paid (unaudited)
(dollars in thousands)
 
 Three Months Ended Three Months Ended Three Months Ended
 September 30, 2025 June 30, 2025 September 30, 2024
   Interest Average   Interest Average   Interest Average
 Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/
 Balance Expense Rate (1) Balance Expense Rate (1) Balance Expense Rate (1)
Assets:                 
Loans (net of unearned income
and deferred costs)
$12,662,595  $180,361  5.65% $12,304,172  $170,520  5.56% $11,419,428  $156,610  5.46%
Taxable investment securities 2,627,476   23,203  3.53%  2,598,093   23,361  3.60%  2,376,102   20,940  3.53%
Tax-exempt investment securities 176,193   1,913  4.34%  172,083   1,802  4.19%  168,768   1,686  4.00%
Total securities 2,803,669   25,116  3.58%  2,770,176   25,163  3.63%  2,544,870   22,626  3.56%
Interest-bearing deposits 1,096,909   10,597  3.83%  1,045,727   10,241  3.93%  1,226,445   15,249  4.95%
Mortgage loans held for sale 204,949   3,351  6.54%  172,102   2,770  6.44%  208,513   3,247  6.23%
Total earning assets 16,768,122   219,425  5.19%  16,292,177   208,694  5.14%  15,399,256   197,732  5.11%
Less: allowance for loan losses (139,408)      (131,837)      (125,331)    
Total nonearning assets 1,995,385       1,896,640       1,754,216     
Total assets$18,624,099      $18,056,980      $17,028,141     
Liabilities and Equity:                 
Interest-bearing deposits                 
Demand and money market$7,791,983  $43,015  2.19% $7,590,290  $42,054  2.22% $6,917,622  $48,896  2.81%
Savings 332,403   684  0.82%  337,807   704  0.84%  315,338   842  1.06%
Certificates of deposit 2,626,140   25,444  3.84%  2,560,313   25,394  3.98%  2,723,437   32,390  4.73%
Total interest-bearing deposits 10,750,526   69,143  2.55%  10,488,410   68,152  2.61%  9,956,397   82,128  3.28%
Borrowings 49,111   (212) (1.69)%  34,799   (341) (3.88)%  33,867   (25) (0.29)%
Subordinated debt, net 267,755   2,461  3.68%  272,448   2,609  3.83%  256,309   2,237  3.49%
Total interest-bearing liabilities 11,067,392   71,392  2.56%  10,795,657   70,420  2.62%  10,246,573   84,340  3.27%
Demand deposits 4,898,006       4,685,835       4,305,783     
Other noninterest-bearing liabilities 378,717       387,166       370,736     
Total liabilities 16,344,115       15,868,658       14,923,092     
Shareholders’ equity 2,279,984       2,188,322       2,105,049     
Total liabilities and equity$18,624,099      $18,056,980      $17,028,141     
Net interest income (tax-equivalent basis) (4)  $148,033      $138,274      $113,392   
Reconciliation of Non-GAAP Financial Measures                
                  
Tax-equivalent basis adjustment   (1,081)      (1,061)      (1,110)  
Net interest income (GAAP)  $146,952      $137,213      $112,282   
                  
Interest rate spread (2)(4)    2.63%     2.52%     1.84%
Interest expense as a percent of average earning assets   1.69%     1.73%     2.18%
Net interest margin (tax-equivalent basis) (3)(4)   3.50%     3.40%     2.93%
Total cost of deposits    1.75%     1.80%     2.29%
                  

(1) Yields and interest income are presented on a tax-equivalent basis using the federal statutory tax rate of 21%.
(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
Average Balances, Yields and Rate Paid (unaudited)
(dollars in thousands)
 
 Nine Months Ended Nine Months Ended
 September 30, 2025 September 30, 2024
   Interest Average   Interest Average
 Average Income/ Yield/ Average Income/ Yield/
 Balance Expense Rate (1) Balance Expense Rate (1)
Assets:           
Loans (net of unearned income and deferred costs)$12,169,050  $503,947  5.54% $11,423,458  $463,794  5.42%
Taxable investment securities 2,568,420   67,866  3.52%  2,395,007   61,327  3.41%
Tax-exempt investment securities 174,786   5,575  4.25%  162,294   4,756  3.91%
Total securities 2,743,206   73,441  3.57%  2,557,301   66,083  3.45%
Interest-bearing deposits 1,113,719   32,639  3.92%  1,192,319   43,995  4.93%
Mortgage loans held for sale 180,618   8,774  6.48%  163,755   7,908  6.44%
Total earning assets 16,206,593   618,801  5.10%  15,336,833   581,780  5.07%
Less: allowance for loan losses (131,892)      (126,508)    
Total nonearning assets 1,894,785       1,748,215     
Total assets$17,969,486      $16,958,540     
Liabilities and Equity:           
Interest-bearing deposits           
Demand and money market$7,555,758  $125,675  2.22% $6,880,752  $145,042  2.82%
Savings 327,517   2,102  0.86%  320,696   2,569  1.07%
Certificates of deposit 2,575,944   76,651  3.98%  2,674,509   94,928  4.74%
Total interest-bearing deposits 10,459,219   204,428  2.61%  9,875,957   242,539  3.28%
Borrowings 37,910   (854) (2.97)%  115,171   4,679  5.34%
Subordinated debt, net 266,786   7,374  3.69%  256,094   6,710  3.49%
Total interest-bearing liabilities 10,763,915   210,948  2.62%  10,247,222   253,928  3.31%
Demand deposits 4,622,418       4,265,971     
Other noninterest-bearing liabilities 373,274       381,547     
Total liabilities 15,759,607       14,894,740     
Shareholders’ equity 2,209,879       2,063,800     
Total liabilities and equity$17,969,486      $16,958,540     
Net interest income (tax-equivalent basis)(4)  $407,853      $327,852   
Reconciliation of Non-GAAP Financial Measures          
Tax-equivalent basis adjustment   (3,210)      (3,304)  
Net interest income (GAAP)  $404,643      $324,548   
            
Interest rate spread (2)(4)    2.48%     1.76%
Interest expense as a percent of average earning assets   1.74%     2.21%
Net interest margin (tax-equivalent basis) (3)(4)   3.36%     2.86%
Total cost of deposits    1.81%     2.29%
            
(1) Yields and interest income are presented on a tax-equivalent basis using the federal statutory rate of 21%.
(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)
  
   
 September 30, December 31,
  2025   2024 
 (unaudited) (audited)
ASSETS   
Cash and due from banks$152,647  $108,750 
Interest-bearing deposits at FRB 974,514   1,127,878 
Interest-bearing deposits in financial institutions 122,819   102,847 
Total Cash and Cash Equivalents 1,249,980   1,339,475 
Securities available for sale, at fair value (amortized cost of $2,757,814 and $2,509,970, and allowance for credit losses of $1,350 and $1,326 at September 30, 2025 and December 31, 2024, respectively) 2,668,599   2,353,365 
Securities held to maturity, at amortized cost (fair value of $173,380 and $203,883 at September 30, 2025 and December 31, 2024, respectively) 176,843   212,352 
Less: allowance for credit losses (65)  (77)
Securities held to maturity, net of allowance for credit losses 176,778   212,275 
Other equity securities 12,420   12,100 
FHLB stock 16,341   12,136 
Total Securities 2,874,138   2,589,876 
Mortgage loans held for sale 212,507   200,460 
Loans, net of unearned income and deferred costs 13,379,033   11,459,055 
Less: allowance for credit losses on loans (149,175)  (123,923)
Net Loans 13,229,858   11,335,132 
Premises and equipment, net 422,134   368,876 
Goodwill 591,691   457,619 
Other intangible assets, net 101,875   60,171 
BOLI 334,527   279,802 
Other assets 665,810   615,479 
TOTAL ASSETS$19,682,520  $17,246,890 
    
LIABILITIES AND EQUITY   
Deposits:   
Noninterest-bearing demand$5,139,488  $4,253,053 
Interest-bearing:   
Demand and money market accounts 8,273,987   7,329,669 
Savings 331,168   311,841 
Certificates of deposit 2,786,292   2,542,735 
Total Deposits 16,530,935   14,437,298 
Advances from the FHLB 52,646   3,218 
Subordinated debt, net 283,847   260,001 
Repurchase agreements and other borrowings 25,740   33,683 
Total Borrowings 362,233   296,902 
Other liabilities 384,321   357,063 
TOTAL LIABILITIES 17,277,489   15,091,263 
Preferred stock, authorized and unissued shares – 2,000,000     
Common stock, $1.667 par value: 150,000,000 shares authorized;   
78,928,417 and 75,255,205 shares issued at   
September 30, 2025 and December 31, 2024, respectively 131,574   125,455 
Capital surplus 1,253,666   1,122,147 
Retained earnings 1,075,657   1,007,775 
Common stock issued to deferred compensation trust, at cost:   
1,112,008 and 1,046,121 shares at September 30, 2025 and December 31, 2024, respectively (24,130)  (21,868)
Deferred compensation trust 24,130   21,868 
Accumulated other comprehensive income (loss) (63,370)  (116,045)
TOTAL SHAREHOLDERS’ EQUITY 2,397,527   2,139,332 
Noncontrolling interest 7,504   16,295 
TOTAL EQUITY 2,405,031   2,155,627 
TOTAL LIABILITIES AND EQUITY$19,682,520  $17,246,890 
 

TOWNEBANK
Consolidated Statements of Income (unaudited)
(dollars in thousands, except per share data)
        
        
 Three Months Ended Nine Months Ended
 September 30, September 30,
  2025   2024   2025   2024 
INTEREST INCOME:       
Loans, including fees$179,612  $155,792  $501,705  $461,316 
Investment securities 24,784   22,334   72,473   65,257 
Interest-bearing deposits in financial institutions and federal funds sold 10,597   15,249   32,639   43,995 
Mortgage loans held for sale 3,351   3,247   8,774   7,908 
Total interest income 218,344   196,622   615,591   578,476 
INTEREST EXPENSE:       
Deposits 69,143   82,128   204,428   242,539 
Advances from the FHLB 258   29   407   3,408 
Subordinated debt, net 2,461   2,237   7,374   6,710 
Repurchase agreements and other borrowings (470)  (54)  (1,261)  1,271 
Total interest expense 71,392   84,340   210,948   253,928 
Net interest income 146,952   112,282   404,643   324,548 
PROVISION FOR CREDIT LOSSES 15,276   (1,100)  24,106   (2,154)
Net interest income after provision for credit losses 131,676   113,382   380,537   326,702 
NONINTEREST INCOME:       
Residential mortgage banking income, net 13,123   11,786   37,046   35,685 
Insurance commissions and related income, net 25,791   25,727   77,893   75,297 
Property management income, net 13,529   11,221   48,585   42,306 
Service charges on deposit accounts 4,056   3,117   11,025   9,548 
Credit card merchant fees, net 1,909   1,830   5,400   5,042 
Investment income, net 3,933   2,835   10,166   7,759 
BOLI 2,157   1,886   6,021   6,966 
Gain on sale of equity investment    20   2,000   20 
Other income 4,222   3,814   12,379   9,345 
Net gain on investment securities (7)     (7)  74 
Total noninterest income 68,713   62,236   210,508   192,042 
NONINTEREST EXPENSE:       
Salaries and employee benefits 78,964   72,123   232,404   214,849 
Occupancy 9,988   9,351   29,112   28,490 
Furniture and equipment 5,044   4,657   14,436   13,769 
Amortization – intangibles 4,427   3,130   11,431   9,675 
Software 7,518   6,790   20,647   19,947 
Data processing 4,630   4,701   12,974   13,223 
Professional fees 2,999   4,720   8,191   11,689 
Advertising and marketing 3,759   4,162   11,460   12,268 
FDIC and other insurance 3,002   2,797   8,895   9,287 
Acquisition related expenses 17,814   460   36,971   1,073 
Other expenses 15,593   14,009   48,418   42,205 
Total noninterest expense 153,738   126,900   434,939   376,475 
Income before income tax expense and noncontrolling interest 46,651   48,718   156,106   142,269 
Provision for income tax expense 7,357   5,592   26,656   20,977 
Net income$39,294  $43,126  $129,450  $121,292 
Net income attributable to noncontrolling interest (317)  (177)  (1,044)  (800)
Net income attributable to TowneBank$38,977  $42,949  $128,406  $120,492 
Per common share information       
Basic earnings$0.51  $0.57  $1.70  $1.61 
Diluted earnings$0.51  $0.57  $1.69  $1.61 
Cash dividends declared$0.27  $0.25  $0.79  $0.75 
                

TOWNEBANK
Consolidated Balance Sheets – Five Quarter Trend
(dollars in thousands, except share data)
 
          
 September 30, June 30, March 31, December 31, September 30,
  2025   2025   2025   2024   2024 
 (unaudited) (unaudited) (unaudited) (audited) (unaudited)
ASSETS         
Cash and due from banks$152,647  $149,462  $126,526  $108,750  $131,068 
Interest-bearing deposits at FRB 974,514   838,315   1,090,555   1,127,878   1,061,596 
Interest-bearing deposits in financial institutions 122,819   123,911   100,249   102,847   103,400 
Total Cash and Cash Equivalents 1,249,980   1,111,688   1,317,330   1,339,475   1,296,064 
Securities available for sale 2,668,599   2,553,975   2,470,171   2,353,365   2,363,176 
Securities held to maturity 176,843   201,932   202,018   212,352   212,422 
Less: allowance for credit losses (65)  (67)  (68)  (77)  (77)
Securities held to maturity, net of allowance for credit losses 176,778   201,865   201,950   212,275   212,345 
Other equity securities 12,420   12,248   12,223   12,100   12,681 
FHLB stock 16,341   13,428   12,425   12,136   12,134 
Total Securities 2,874,138   2,781,516   2,696,769   2,589,876   2,600,336 
Mortgage loans held for sale 212,507   238,742   168,510   200,460   264,320 
Loans, net of unearned income and deferred costs 13,379,033   12,359,673   11,652,746   11,459,055   11,412,518 
Less: allowance for credit losses (149,175)  (134,187)  (126,131)  (123,923)  (123,191)
Net Loans 13,229,858   12,225,486   11,526,615   11,335,132   11,289,327 
Premises and equipment, net 422,134   392,056   373,111   368,876   365,764 
Goodwill 591,691   499,709   457,619   457,619   457,619 
Other intangible assets, net 101,875   74,186   57,145   60,171   63,265 
BOLI 334,527   295,434   280,344   279,802   279,325 
Other assets 665,810   645,779   634,437   615,479   572,000 
TOTAL ASSETS$19,682,520  $18,264,596  $17,511,880  $17,246,890  $17,188,020 
LIABILITIES AND EQUITY         
Deposits:         
Noninterest-bearing demand$5,139,488  $4,754,340  $4,313,553  $4,253,053  $4,267,628 
Interest-bearing:         
Demand and money market accounts 8,273,987   7,654,317   7,463,355   7,329,669   6,990,103 
Savings 331,168   332,108   312,151   311,841   319,970 
Certificates of deposit 2,786,292   2,587,951   2,519,489   2,542,735   2,785,469 
Total Deposits 16,530,935   15,328,716   14,608,548   14,437,298   14,363,170 
Advances from the FHLB 52,646   12,838   3,029   3,218   3,405 
Subordinated debt, net 283,847   260,430   260,198   260,001   256,444 
Repurchase agreements and other borrowings 25,740   20,847   20,875   33,683   30,970 
Total Borrowings 362,233   294,115   284,102   296,902   290,819 
Other liabilities 384,321   402,823   402,252   357,063   371,316 
TOTAL LIABILITIES 17,277,489   16,025,654   15,294,902   15,091,263   15,025,305 
          
Preferred stock              
Common stock, $1.667 par value 131,574   125,728   125,679   125,455   125,139 
Capital surplus 1,253,666   1,131,536   1,123,330   1,122,147   1,117,279 
Retained earnings 1,075,657   1,057,184   1,039,518   1,007,775   985,343 
Common stock issued to deferred compensation         
trust, at cost (24,130)  (23,977)  (21,969)  (21,868)  (22,224)
Deferred compensation trust 24,130   23,977   21,969   21,868   22,224 
Accumulated other comprehensive income (loss) (63,370)  (83,103)  (87,869)  (116,045)  (81,482)
TOTAL SHAREHOLDERS’ EQUITY 2,397,527   2,231,345   2,200,658   2,139,332   2,146,279 
Noncontrolling interest 7,504   7,597   16,320   16,295   16,436 
TOTAL EQUITY 2,405,031   2,238,942   2,216,978   2,155,627   2,162,715 
TOTAL LIABILITIES AND EQUITY$19,682,520  $18,264,596  $17,511,880  $17,246,890  $17,188,020 
                    

TOWNEBANK
Consolidated Statements of Income – Five Quarter Trend (unaudited)
(dollars in thousands, except share data)
  
  
 Three Months Ended
 September 30, June 30, March 31, December 31, September 30,
  2025   2025   2025   2024   2024 
INTEREST INCOME:         
Loans, including fees$179,612  $169,772  $152,322  $154,933  $155,792 
Investment securities 24,784   24,850   22,839   22,236   22,334 
Interest-bearing deposits in financial institutions and federal funds sold 10,597   10,241   11,801   15,796   15,249 
Mortgage loans held for sale 3,351   2,770   2,653   3,087   3,247 
Total interest income 218,344   207,633   189,615   196,052   196,622 
INTEREST EXPENSE:         
Deposits 69,143   68,152   67,133   75,885   82,128 
Advances from the FHLB 258   124   25   26   29 
Subordinated debt, net 2,461   2,609   2,304   2,261   2,237 
Repurchase agreements and other borrowings (470)  (465)  (325)  (177)  (54)
Total interest expense 71,392   70,420   69,137   77,995   84,340 
Net interest income 146,952   137,213   120,478   118,057   112,282 
PROVISION FOR CREDIT LOSSES 15,276   6,410   2,420   1,606   (1,100)
Net interest income after provision for credit losses 131,676   130,803   118,058   116,451   113,382 
NONINTEREST INCOME:         
Residential mortgage banking income, net 13,123   13,561   10,361   11,272   11,786 
Insurance commissions and related income, net 25,791   25,677   26,424   23,265   25,727 
Property management income, net 13,529   15,556   19,500   8,186   11,221 
Service charges on deposit accounts 4,056   3,642   3,327   3,289   3,117 
Credit card merchant fees, net 1,909   1,794   1,697   1,486   1,830 
Investment income, net 3,933   3,158   3,075   3,195   2,835 
BOLI 2,157   1,992   1,872   4,478   1,886 
Other income 4,222   4,849   5,310   3,932   3,834 
Net gain on investment securities (7)            
Total noninterest income 68,713   70,229   71,566   59,103   62,236 
NONINTEREST EXPENSE:         
Salaries and employee benefits 78,964   78,362   75,078   74,399   72,123 
Occupancy 9,988   9,791   9,333   9,819   9,351 
Furniture and equipment 5,044   4,770   4,621   4,850   4,657 
Amortization – intangibles 4,427   3,979   3,026   3,095   3,130 
Software 7,518   6,835   6,293   6,870   6,790 
Data processing 4,630   4,510   3,835   3,788   4,701 
Professional fees 2,999   2,539   2,653   3,446   4,720 
Advertising and marketing 3,759   3,228   4,472   3,359   4,162 
Other expenses 36,409   36,651   21,225   17,815   17,266 
Total noninterest expense 153,738   150,665   130,536   127,441   126,900 
Income before income tax expense and noncontrolling interest 46,651   50,367   59,088   48,113   48,718 
Provision for income tax expense 7,357   11,098   8,201   6,672   5,592 
Net income 39,294   39,269   50,887   41,441   43,126 
Net income attributable to noncontrolling interest (317)  (432)  (295)  (176)  (177)
Net income attributable to TowneBank$38,977  $38,837  $50,592  $41,265  $42,949 
Per common share information         
Basic earnings$0.51  $0.52  $0.67  $0.55  $0.57 
Diluted earnings$0.51  $0.51  $0.67  $0.55  $0.57 
Basic weighted average shares outstanding 76,417,605   75,240,678   75,149,668   75,034,688   74,940,827 
Diluted weighted average shares outstanding 76,763,640   75,540,822   75,527,713   75,318,578   75,141,661 
Cash dividends declared$0.27  $0.27  $0.25  $0.25  $0.25 
          

TOWNEBANK
Banking Segment Financial Information (unaudited)
(dollars in thousands)
 
          
 Three Months Ended Nine Months Ended Increase/(Decrease)
 September 30, June 30, September 30, YTD 2025 over 2024
  2025   2024   2025   2025   2024  Amount Percent
                        
Revenue             
Net interest income$145,746  $111,569  $136,325  $401,654  $322,280  $79,374  24.63%
Service charges on deposit accounts 4,056   3,117   3,642   11,025   9,548   1,477  15.47%
Credit card merchant fees 1,909   1,830   1,794   5,400   5,042   358  7.10%
Investment income, net 3,933   2,835   3,158   10,166   7,759   2,407  31.02%
Other income 4,632   4,828   5,750   16,876   13,096   3,780  28.86%
Subtotal 14,530   12,610   14,344   43,467   35,445   8,022  22.63%
Net gain/(loss) on investment securities (7)        (7)  74   (81) (109.46)%
Total noninterest income 14,523   12,610   14,344   43,460   35,519   7,941  22.36%
Total revenue 160,269   124,179   150,669   445,114   357,799   87,315  24.40%
              
Provision for credit losses 15,148   (1,043)  6,212   23,727   (2,189)  25,916  (1,183.92)%
              
Expenses             
Salaries and employee benefits 53,053   47,148   52,850   155,588   140,261   15,327  10.93%
Occupancy 7,571   6,963   7,342   21,892   21,217   675  3.18%
Furniture and equipment 4,302   3,878   4,081   12,191   11,336   855  7.54%
Amortization of intangible assets 2,417   1,072   1,969   5,367   3,352   2,015  60.11%
Software 5,096   4,336   4,427   13,545   12,813   732  5.71%
Data processing 2,853   2,765   2,840   8,301   7,922   379  4.78%
Accounting and professional fees 2,514   4,123   1,934   6,458   9,929   (3,471) (34.96)%
Advertising and marketing 2,167   2,141   1,883   6,947   6,759   188  2.78%
FDIC and other insurance 2,672   2,493   2,676   7,938   8,475   (537) (6.34)%
Acquisition related 17,761   460   17,256   35,437   606   34,831  N/M
Other expenses 13,272   10,356   11,276   36,519   30,711   5,808  18.91%
Total expenses 113,678   85,735   108,534   310,183   253,381   56,802  22.42%
Income before income tax, corporate allocation and noncontrolling interest 31,443   39,487   35,923   111,204   106,607   4,597  4.31%
Corporate allocation 1,544   1,223   1,535   4,475   3,524   951  26.99%
Income before income tax provision and noncontrolling interest 32,987   40,710   37,458   115,679   110,131   5,548  5.04%
Provision for income tax expense 3,881   3,495   7,814   16,375   12,731   3,644  28.62%
Net income 29,106   37,215   29,644   99,304   97,400   1,904  1.95%
Noncontrolling interest (112)  (29)  (124)  (194)  34   (228) (670.59)%
Net income attributable to TowneBank$28,994  $37,186  $29,520  $99,110  $97,434  $1,676  1.72%
              
Efficiency ratio (non-GAAP) 69.42%  68.18%  70.73%  68.48%  69.89% (1.41)% (2.02)%
                        

TOWNEBANK
Mortgage Segment Financial Information (unaudited)
(dollars in thousands)
 
    
 Three Months Ended Nine Months Ended Increase/(Decrease)
 September 30, June 30, September 30, YTD 2025 over 2024
  2025   2024   2025   2025   2024  Amount Percent
Revenue             
Residential mortgage brokerage income, net$13,724  $12,211  $14,083  $38,388  $37,006  $1,382  3.73%
Income (loss) from unconsolidated subsidiary 107   51   83   232   148   84  56.76%
Net interest and other income 1,414   904   1,095   3,620   2,903   717  24.70%
Total revenue 15,245   13,166   15,261   42,240   40,057   2,183  5.45%
              
Provision for credit losses 128   (57)  198   379   35   344  982.86%
              
Expenses             
Salaries and employee benefits 7,574   6,513   7,315   21,920   19,972   1,948  9.75%
Occupancy 956   975   1,098   2,993   3,099   (106) (3.42)%
Furniture and equipment 151   151   151   497   478   19  3.97%
Amortization of intangible assets             287   (287) (100.00)%
Software 800   744   790   2,317   2,407   (90) (3.74)%
Data processing 209   205   198   570   523   47  8.99%
Accounting and professional fees 117   219   157   500   595   (95) (15.97)%
Advertising and marketing 500   407   420   1,309   1,237   72  5.82%
FDIC and other insurance 128   91   117   341   287   54  18.82%
Acquisition related 53      1,481   1,534      1,534  100.00%
Other expenses 2,466   2,327   2,728   7,657   7,084   573  8.09%
Total expenses 12,954   11,632   14,455   39,638   35,969   3,669  10.20%
              
Income before income tax, corporate allocation and noncontrolling interest 2,163   1,591   608   2,223   4,053   (1,830) (45.15)%
Corporate allocation (502)  (484)  (519)  (1,371)  (1,322)  (49) 3.71%
Income before income tax provision and noncontrolling interest 1,661   1,107   89   852   2,731   (1,879) (68.80)%
Provision for income tax expense 319   218   (41)  38   497   (459) (92.35)%
Net income 1,342   889   130   814   2,234   (1,420) (63.56)%
Noncontrolling interest (205)  (285)  (308)  (630)  (812)  182  22.41%
Net income attributable to TowneBank$1,137  $604  $(178) $184  $1,422  $(1,238) (87.06)%
              
Efficiency ratio excluding gain on equity investment (non-GAAP) 84.97%  88.35%  94.72%  93.84%  89.08%  4.76% 5.34%
                           

TOWNEBANK
Resort Property Management Segment Financial Information (unaudited)
(dollars in thousands)
 
    
 Three Months Ended Nine Months Ended Increase/(Decrease)
 September 30, June 30, September 30, YTD 2025 over 2024
  2025   2024   2025   2025   2024  Amount Percent
Revenue             
Property management fees, net$13,529  $11,221  $15,556   48,585   42,306   6,279  14.84%
Net interest and other income 44   2   24   81   104   (23) (22.12)%
Total revenue 13,573   11,223   15,580   48,666   42,410   6,256  14.75%
              
Expenses             
Salaries and employee benefits 5,516   5,842   5,250   16,214   16,941   (727) (4.29)%
Occupancy 677   663   574   1,865   1,920   (55) (2.86)%
Furniture and equipment 431   453   385   1,222   1,316   (94) (7.14)%
Amortization of intangible assets 637   637   637   1,911   1,807   104  5.76%
Software 885   964   877   2,622   2,495   127  5.09%
Data processing 1,428   1,616   1,339   3,711   4,438   (727) (16.38)%
Accounting and professional fees 92   152   236   454   624   (170) (27.24)%
Advertising and marketing 941   1,379   750   2,582   3,750   (1,168) (31.15)%
FDIC and other insurance 60   60   113   240   169   71  42.01%
Acquisition related             466   (466) (100.00)%
Other expenses (756)  675   427   2,284   2,099   185  8.81%
Total expenses 9,911   12,441   10,588   33,105   36,025   (2,920) (8.11)%
              
Income before income tax, corporate allocation and noncontrolling interest 3,662   (1,218)  4,992   15,561   6,385   9,176  143.71%
Corporate allocation (329)     (316)  (965)     (965) N/M
Income before income tax provision and noncontrolling interest 3,333   (1,218)  4,676   14,596   6,385   8,211  128.60%
Provision for income tax expense 922   (200)  1,227   3,778   1,839   1,939  105.44%
Net income 2,411   (1,018)  3,449   10,818   4,546   6,272  137.97%
Noncontrolling interest    137      (220)  (22)  (198) (900.00)%
Net income attributable to TowneBank$2,411  $(881) $3,449  $10,598  $4,524  $6,074  134.26%
              
Efficiency ratio excluding gain on equity investment (non-GAAP) 68.33%  105.18%  63.87%  64.10%  80.68% (16.58)% (20.55)%
                        

TOWNEBANK
Insurance Segment Financial Information (unaudited)
(dollars in thousands)
 
          
 Three Months Ended Nine Months Ended Increase/(Decrease)
 September 30, June 30, September 30, YTD 2025 over 2024
  2025   2024   2025   2025   2024  Amount Percent
Commission and fee income             
Property and casualty$24,030  $23,157  $23,306  $70,659  $66,104  $4,555  6.89%
Employee benefits 4,925   4,483   4,596   14,245   13,712   533  3.89%
Specialized benefit services             10   (10) (100.00)%
Total commissions and fees 28,955   27,640   27,902   84,904   79,826   5,078  6.36%
              
Contingency and bonus revenue 2,556   2,731   3,034   9,210   10,185   (975) (9.57)%
Other income 10   25   4   18   41   (23) (56.10)%
Total revenue 31,521   30,396   30,940   94,132   90,052   4,080  4.53%
              
Employee commission expense 4,943   4,446   5,008   15,001   13,728   1,273  9.27%
Revenue, net of commission expense 26,578   25,950   25,932   79,131   76,324   2,807  3.68%
              
Salaries and employee benefits 12,821   12,620   12,947   38,682   37,675   1,007  2.67%
Occupancy 784   750   777   2,362   2,254   108  4.79%
Furniture and equipment 160   175   153   526   639   (113) (17.68)%
Amortization of intangible assets 1,373   1,421   1,373   4,153   4,229   (76) (1.80)%
Software 737   746   741   2,163   2,232   (69) (3.09)%
Data processing 140   115   133   392   340   52  15.29%
Accounting and professional fees 276   226   212   779   541   238  43.99%
Advertising and marketing 151   235   175   622   522   100  19.16%
FDIC and other insurance 142   153   126   376   356   20  5.62%
Acquisition related             1   (1) (100.00)%
Other expenses 611   651   451   1,958   2,311   (353) (15.27)%
Total operating expenses 17,195   17,092   17,088   52,013   51,100   913  1.79%
Income before income tax, corporate allocation and noncontrolling interest 9,383   8,858   8,844   27,118   25,224   1,894  7.51%
Corporate allocation (713)  (739)  (700)  (2,139)  (2,202)  63  2.86%
Income before income tax provision and noncontrolling interest 8,670   8,119   8,144   24,979   23,022   1,957  8.50%
Provision for income tax expense 2,235   2,079   2,098   6,465   5,910   555  9.39%
Net income 6,435   6,040   6,046   18,514   17,112   1,402  8.19%
Noncontrolling interest                  %
Net income attributable to TowneBank$6,435  $6,040  $6,046  $18,514  $17,112  $1,402  8.19%
              
Provision for income taxes 2,235   2,079   2,098   6,465   5,910   555  9.39%
Depreciation, amortization and interest expense 1,481   1,550   1,489   4,497   4,632   (135) (2.91)%
EBITDA (non-GAAP)$10,151  $9,669  $9,633  $29,476  $27,654  $1,822  6.59%
              
Efficiency ratio (non-GAAP) 59.53%  60.44%  60.60%  60.48%  61.43% (0.95)% (1.55)%
                        

TOWNEBANK
Reconciliation of Non-GAAP Financial Measures
(dollars in thousands)
     
 Three Months Ended Nine Months Ended
 September 30, September 30, June 30, September 30, September 30,
  2025   2024   2025   2025   2024 
          
Return on average assets (GAAP) 0.83%  1.00%  0.86%  0.96%  0.95%
Impact of excluding average goodwill and other intangibles and amortization 0.11%  0.09%  0.10%  0.10%  0.09%
Return on average tangible assets (non-GAAP) 0.94%  1.09%  0.96%  1.06%  1.04%
          
Return on average equity (GAAP) 6.78%  8.12%  7.12%  7.77%  7.80%
Impact of excluding average goodwill and other intangibles and amortization 3.32%  3.30%  3.27%  3.41%  3.31%
Return on average tangible equity (non-GAAP) 10.10%  11.42%  10.39%  11.18%  11.11%
          
Return on average common equity (GAAP) 6.80%  8.18%  7.14%  7.81%  7.86%
Impact of excluding average goodwill and other intangibles and amortization 3.35%  3.36%  3.30%  3.44%  3.37%
Return on average tangible common equity
(non-GAAP)
 10.15%  11.54%  10.44%  11.25%  11.23%
          
Book value (GAAP)$30.38  $28.59  $29.58  $30.38  $28.59 
Impact of excluding average goodwill and other intangibles and amortization (8.79)  (6.94)  (7.60)  (8.79)  (6.94)
Tangible book value (non-GAAP)$21.59  $21.65  $21.98  $21.59  $21.65 
          
Efficiency ratio (GAAP) 71.29%  72.71%  72.63%  70.70%  72.88%
Impact of exclusions(2.06)% (1.78)% (1.92)% (1.63)% (1.86)%
Efficiency ratio (non-GAAP) 69.23%  70.93%  70.71%  69.07%  71.02%
          
Average assets (GAAP)$18,624,099  $17,028,141  $18,056,980  $17,969,486  $16,958,540 
Less: average goodwill and intangible assets 611,836   522,219   567,250   565,597   523,335 
Average tangible assets (non-GAAP)$18,012,263  $16,505,922  $17,489,730  $17,403,889  $16,435,205 
          
Average equity (GAAP)$2,279,984  $2,105,049  $2,188,322  $2,209,879  $2,063,800 
Less: average goodwill and intangible assets 611,836   522,219   567,250   565,597   523,335 
Average tangible equity (non-GAAP)$1,668,148  $1,582,830  $1,621,072  $1,644,282  $1,540,465 
          
Average common equity (GAAP)$2,272,509  $2,088,674  $2,180,687  $2,199,472  $2,047,482 
Less: average goodwill and intangible assets 611,836   522,219   567,250   565,597   523,335 
Average tangible common equity (non-GAAP)$1,660,673  $1,566,455  $1,613,437  $1,633,875  $1,524,147 
          
Net income (GAAP)$38,977  $42,949  $38,837  $128,406  $120,492 
Amortization of intangibles, net of tax 3,497   2,473   3,143   9,030   7,643 
Tangible net income (non-GAAP)$42,474  $45,422  $41,980  $137,436  $128,135 
          
Total revenue (GAAP)$215,665  $174,518  $207,442  $615,151  $516,590 
Net (gain)/loss on investment securities/equity investments 7   (20)     (1,993)  (94)
Total revenue for efficiency calculation (non-GAAP)$215,672  $174,498  $207,442  $613,158  $516,496 
          
Noninterest expense (GAAP)$153,738  $126,900  $150,665  $434,939  $376,475 
Less: amortization of intangibles 4,427   3,130   3,979   11,431   9,675 
Noninterest expense net of amortization (non-GAAP)$149,311  $123,770  $146,686  $423,508  $366,800 
                    

TOWNEBANK
Reconciliation of Non-GAAP Financial Measures
(dollars in thousands, except per share data)
           
           
Reconciliation of GAAP Earnings to Operating Earnings Excluding Certain Items Affecting Comparability Three Months Ended
  September 30, June 30, March 31, December 31, September 30,
   2025   2025   2025   2024   2024 
Net income available to common shareholders (GAAP) $38,977  $38,837  $50,592  $41,265  $42,949 
           
Adjustments          
Plus: Acquisition-related expenses, net of tax  14,996   15,291   389   250   460 
Plus: Initial provision for acquired loans, net of tax  9,478   4,926          
Plus: FDIC special assessment, net of tax               
Plus: Resort Property Management deferred tax adjustment for repurchase of noncontrolling interests     2,286          
Less: Gain on sale of equity investments, net of noncontrolling interest           (99)  (16)
Total adjustments, net of taxes  24,474   22,503   389   151   444 
Core operating earnings, excluding certain items affecting comparability (non-GAAP) $63,451  $61,340  $50,981  $41,416  $43,393 
Annualized interest impact of Series IV Notes, net of tax  42   42   42       
Core net income for diluted EPS (non-GAAP) $63,493  $61,382  $51,023  $41,416  $43,393 
           
Weighted average diluted shares  76,763,640   75,540,822   75,527,713   75,318,578   75,141,661 
Diluted EPS (GAAP) $0.51  $0.51  $0.67  $0.55  $0.57 
Diluted EPS, excluding certain items affecting comparability (non-GAAP) $0.83  $0.81  $0.68  $0.55  $0.58 
Average assets $18,624,099  $18,056,980  $17,211,862  $17,349,128  $17,028,141 
Average tangible equity $1,668,148  $1,621,072  $1,643,353  $1,628,420  $1,582,830 
Average tangible common equity $1,660,673  $1,613,437  $1,627,145  $1,612,087  $1,566,455 
Return on average assets, excluding certain items affecting comparability (non-GAAP)  1.35%  1.36%  1.20%  0.95%  1.01%
Return on average tangible equity, excluding certain items affecting comparability (non-GAAP)  15.92%  15.95%  13.17%  10.72%  11.53%
Return on average common tangible equity, excluding certain items affecting comparability (non-GAAP)  15.99%  16.03%  13.30%  10.82%  11.65%
Efficiency ratio, excluding certain items affecting comparability (non-GAAP)  60.97%  61.68%  66.87%  70.12%  70.67%
           

TOWNEBANK
Reconciliation of Non-GAAP Financial Measures
(dollars in thousands, except per share data)
     
     
Reconciliation of GAAP Earnings to Operating Earnings Excluding Certain Items Affecting Comparability Nine Months Ended
  September 30, September 30,
   2025   2024 
Net income available to common shareholders (GAAP) $128,406  $120,492 
     
Adjustments    
Plus: Acquisition-related expenses, net of tax  30,676   1,040 
Plus: FDIC special assessment, net of tax     711 
Plus: Initial provision for acquired loans, net of tax  14,404    
Plus: Resort Property Management deferred tax adjustment for repurchase of noncontrolling interests  2,286    
Less: Gain on sale of equity investments, net of noncontrolling interest and tax     (16)
Total adjustments, net of taxes  47,366   1,735 
Core operating earnings, excluding certain items affecting comparability (non-GAAP) $175,772  $122,227 
Annualized interest impact of Series IV Notes, net of tax  126    
Core net income for diluted EPS (non-GAAP) $175,898  $122,227 
Weighted average diluted shares  75,952,187   75,043,848 
Diluted EPS (GAAP) $1.69  $1.61 
Diluted EPS, excluding certain items affecting comparability (non-GAAP) $2.32  $1.63 
Average assets $17,969,486  $16,958,540 
Average tangible equity $1,644,282  $1,540,465 
Average tangible common equity $1,633,875  $1,524,147 
Return on average assets, excluding certain items affecting comparability (non-GAAP)  1.31%  0.96%
Return on average tangible equity, excluding certain items affecting comparability (non-GAAP)  15.03%  11.26%
Return on average common tangible equity, excluding certain items affecting comparability (non-GAAP)  15.12%  11.38%
Efficiency ratio, excluding certain items affecting comparability (non-GAAP)  63.04%  70.81%
     

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